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ESTABLISHED 1S39
Chronicle
Reg. U. S. Pat. Office
New York,
Number 4922
Volume 172
EDITORIAL
As We See It
The
sympathizers, but if the social goals
have become so necessary to the health
of
society"
our
not for all
are
practical
pur¬
those formulated and patented by the
New Deal and the Fair Deal, then what in
Last week
a
name
are
they?
is a
try
Hence there is every assurance
of
voters..
Allan
starting
Williams
C.
to be
by
year'a
about
*
million,) leaving a ne
E.C.A. aid, of
$100
million—more than onefourth of her total gold and dollar
reserves.
And that is not all.
$25
some
For
perpetual motion machine,
little
Dr. Melchior
a
small country of high livirr
like Denmark, the cost
standards
Palyi
summary
of construction
structure.
ac¬
on
page
The
more
so
northwest Europe,
The Danes,
who half a year ago relaxed their strict import controls,
try to solve the problem presently by compromises. On
the one hand, their food subsidies have been almos
wiped out, with the consequence that the cost of livin"
rose substantially and industrial wages had to be raiser'
this year by 5% or so.
On the other hand, they have
offset this inflationary trend by minor economies in thnation is based, as customary
on
34
North Central Regional Meet¬
.American Statistical Association, University of Michigan,
by Mr. Williams at the
food
subsidies
to
all
THE
OFFING—Besides providing
Continued
on
page
23
up-to-the-minute information
SEC, our "Securities Now in Registration" section,
page 38, contains, under "Prospective Offerings," details of proposed
financing well in advance of actual registration.
with
over
hold down inflation.
ing of the
Ann Arbor, Mich., June 24, 1950.
IN
of
vital to the whole pric
when the postwar policy of the
imports is
non-governmental developers.
Continued
^Statement
are
dollar deficiercy, after
desired.
The
registered
on
a
nations
larly sensitive. Denmark expects
tivity (Table I) for the first quarter of 1950 needs little
comment. May I point out, however, that the apparent
ratio between private and public work is a matter of
definition. Tax regulations and credit arrangements are
both incentive and prime mover in the work sponsored
ISSUES
International
As
cost of imports to which
trading
•
.
The result is a very serious
particu¬
this
balance of payment deficit ot
small
the construction industry leaves
27
issues
•
quasi-automatic (i.e., irresponsible)
rise in the
which swell the real estate tax
ects
rolls.
of participants in the Phila-
on
"
pound last September ir,
the
fashion.
spectful cooperation of government at
every level, particularly if it in turn
is one of the major sponsors of proj¬
the membership of that Committee, both
NEW
a
fol¬
Scandinavian currencies
The
lowed
billion
Republican and Democratic, is a matter of public
page
repressed but visibly coming
fore in Britain and Holland.
>
still
to the
while
countries
Scandinavian
disabilities
and
the
both. The problem is acute already in
Any industry which commands $1
a month should have the re¬
by
analyze the positions of the minority members of
the Joint Committee on the Economic Report. Of
on
or
of trouble,
shows signs
national budgets of the respective
payments or in the
countries,
"crutches," and ;
"aspirin," if fundamental surgery is
unpopular with a large sector of the
We took occasion last week in these columns to
Continued
coming home to roost. They roost in the
kind or another: in the balances
wilt be favored with
fantastic."
The identity
of
policy makers
construction indus¬
ailments
other
that
Republicans who have frankly
espoused some of the important social goals, have
been accused by members of their own party of
being 'me too.' This accusation (so the members
of the newly-formed Republican Advance believe)
displays a lack of clear thinking that seems almost
record.
are
And beyond lies assurance
measures.
the fact that many
course,
Chickens
forms of deficits of one
p4£t&4$-be favored by credit and tax
negative opposition. Too often the appearance has
been created that the party is not merely antisocialistic, but anti-social."
It thinks that "the situation is made worse
of Europe's self-adjusiment and spontaneous return
to dollar convertibility..'
way
blessings to the world.
that wherever that cluster
activities
another
public works as leading to budget deficits
and cites case of Sweden and Great
Britain. Foresees a European Dollar-Bloc, and concludes
Britain's national Socialism remains decisive obstacle in
of many great
source
or
in several nations,
-
It is fundamental in the thinking of top
of the Federal Government that the
kind
investment in
demands,
luxury prices. Urges construction
problems be tackled on local basis.
publicans met in Philadelphia for the purpose of
arranging for the "revitalization" of their party.
The members of this group, which is said to have
the backing of a large number, perhaps a large
majority, of the so-called liberal wing of the
party, complain that the Republican party has too
often been "maneuvered into a position of purely
unfavorable repercussions of recent cur¬
as
devaluations budget deficits of one
together with rising prices for imported foodstuffs and
commodities. Points out self-bankruptcy, due to over¬
of tiny apartments at
of partially identified Re¬
group
Palyi lists
rency
supported by government aid, Chicago real estate specialist sees problem in shrinking manpower to operate
it Deplores lack of sufficient apprentices. Says "we may
be heading into trouble in residential construction field,"
because of excessive suburban development and building
poses
Heaven's
Dr.
be kept at peak
Asserting construction industry will
capacity indefinitely by assortment of latent
bers and
"that
Chicago
Statistical
Member, Chicago Chapter, American
Association
newly organized "Republican Advance"
appears
to resent the label "me-too-ers"
which has been appended to some of its mem¬
By MELCHIOR PALYI
WILLIAMS*
City Planner and Real Estate Broker,
-
Cop;
a
Devaluation Boomerangs
The Construction Outlook
By ALLAN C.
Cents
Price 30
N. Y., Thursday, July 6, 1950
the
Slate and
Minerals & Chemical
Municipal
Corporation
prepared a Re¬
search Bulletin which discusses
the
outlook
for
this
leading
We
have
of
producer
are
available
address
across
Established 1927
SECURITIES
Department C
64 Wall
White,Weld&Co.
Troy
40 Wall Street,
New York 5
Straat, Naw York 8
Albany
The
OF NEW YORK
Harris burg
Buffalo
Scran ton
Providence
William sport
Wflkes-Barre
CHICAGO
BOSTON
THE NATIONAL CITY BANK
PHILADELPHIA
BOSTON
Sprlnytteld
Washington, D. C.
Bond Dept.
Teletype: NY 1-708
canadian
stocks
Underwriters and
Distributors of Municipal
Ill
authorized dealers or
SANDERS & CO.
Angeles
ESTABLISHED 1891
1899
MEMBERS NEW YORK
115
New York
Cincinnati
Portland, Ore. San Francisco
NATIONAL BANK
Of
THE
CITY OF NEW YORK
PL
Los Angeles
CANADIAN
BONDS & STOCKS
Central Vermont
Public Service Co.
COMMON
Chicago . Denver
Columbus Toledo
DoKcaox Securities
Corporation
STOCK EXCH.
40 Exchange
CLEVELAND
Chicago
Los
Goodbody & CO.
(Incorporated)
Established
Agency: 20 Exchange
CHASE
THE
Analysis
OTIS & CO.
BOSTON
New York
and
Corporate Securities
Devonshire Street
Bond Department
bonds
and
Prospectus from
f
Canadian Bank
ofGomm&ice
IS etc York
Dallas
Buffalo
/•
'
Head Office: Toronto
Seattle
YANCK.
Bonds
Canada
Monthly Commercial Letter
upon request
request.
upon
INVESTMENT
Please
^ 600 Branches
R. H. lohnson & Co.
chem¬
agricultural
related products.
icals and
Copies
just
BROADWAY
NEW YORK
105 W.
*
Place, New York Sf N. Y.
ADAMS ST.
CHICAGO
1-702-3
WHitehall 4-8161
request
IRA HAUPT & CO.
Stock Exchange
Principal Exchange*
Members New York
and
other
111
Broadway, N. y.
WOrth 4-6000
Teletype NY
upon
Boston
Telephone:
6
1-2706
Enterprise 1820
Teletype NY
2
The Commercial and Financial Chronicle
(62)
MARKETS
TRADING
The
IN
Security I Like Best
Metal & Thermit Corp.
in the investment
Co., Common & B
R. Hoe &
Morris Plan $2.25 Conv.
Utility
Public
Central
Partner,
Sears
Draper,
Co.
&
(Mutual Funds)
Corporation
.,
The security
which
in
one
120 Broadway, New York 5
satisfaction
Teletype NY 1-583
ership.
t
continued
from
own¬
wisely
have
I
Mu-
a
.ha
•
,
,
Because
suited
it
to
minimum
Since 1917
frfe pONNELL & Co.
Members
New
f
Tel. REctor 2-78IS
the
like
best:
Common
costs of
all
order
to
give
ideal
my
Capital Stock
Girdler Corporation
this
years of rising
In the period 1939
of
cost
nearly
much.
as
Income must be adequate to in-
to make the sacrifice to
me
for these future enjoyments,
but if income is only 2% it is not
save
i! BANKERS BOND E
sufficient
Incorporated
Kentucky Home Life Bldg.
LOUISVILLE 2, KENTUCKY
1st Floor,
Bell Tele. LS 186
Long Distance 238-9
to
inspire me to go
without things in order to save as
it would take me over 30 years
to
double
if
V
I
on
However,
income in
5%,
which
and
have
I
far, it will take
,
.
only
14
capital.
This
remains
of
.
u
u
increasing
or
148 State St., Boston 9, Mass.
:
Teletype BS 259
:
^ N. Y. Telephone WOrth 4-5000
^
hope
us
cumu-
day to
some
en-
ideal security must lend itself
sytematic savings and
investment, i.e. it must be
rity of the
a secu-
general descrip-
same
tion every year which I
to
buy regularly to
Production Company)
(Hugoton
To
designate
Puget Sound Power & Light
Interstate Power
Kentucky Utilities
security
one
as
is
to unwittingly neglect any number of favorites which in the
aggregate
would go to
make up a
well rounded
investment
list. All of us
the
in
able
am
build future
satisfaction in
ment it must be one I
recommend to
my
am
invest-
proud to
The
Street, New York 5
devel°P
time
WHitehall 4-2530
Teletype NY 1-3568
we
I
utive
like
best
must
To
get
Mexican Railways
of risks
against
protect
losses,
Full-time experienced and profes-
management
broad
to
tions
list
time
change
must
change
securities
of
as
economic
and
dividends increase
BONDS
to
unforeseen
from
condi-
equal
in
gas
earnings
and
regard
option
equal
is
verted into cash
Bought—Sold—Quoted
family
can
values
Analysisr
on
make
inherent
so
use
in
that
the
request
should
I
or
my
of the capital
unforeseen
make this necessary.
ZIPPIN & COMPANY
208 South La Salle St., Chicago 4
Tele. RAndolph 6-4698
Tel. CG 431
The
as
for
(if
anything
me
from
my
the
wife and family
happens to
picture)
only presently being tapped,
today, the
as
company
contract, is to take
a
a
at
under
an
15-year
minimum of
300,000,000 M cubic feet of
some
gas
has
customer, Kansas Pojver &
wellhead
the
contract.
security I like best will do
well
engineers and economists alike,
the potentialities of this business
prices
security from 12 cents to 15 cents
difficulties
me
I
terms
of
the
running
per
Mcf
original
Any gas
Panhandle
to
to
Light
Toledo Edison Common
Mathieson
clause
based
on
the
Hydro Carbon Chemical
Henry B. Warner & Co., Inc.
Members
South
Broad
Stock
Exchange
St., Phila. 9, Pa.
the
at
at
prices
from
purchasers in the field.
the meantime, however,
Phila.-Balto.
un¬
obtainable
those
Light Common
Transportation Co.
Mcf.
Telephone
PEnnypacker 5-2857
New
York
Bell System Teletype
PH 771
City Tel.: BOwling Green 9-4814
In
it is
en¬
tirely possible that sales to others
than
Kansas Power & Light
be
developed and it will
be
the
policy of the company
maintain
within
its
the
operation
State
of
has
company
TRADING
expects
-Pf
to
*Lea Fabrics
wholly
In
of gas,
constructed
income, and
for
The
a
receive
the
some
"Winters & Crampton
a
"Plywood Inc.
which
should
source
stock
of
has
measure
build
may
extraction
the
20.
We
veto
the
and
be
feel
in
the
case
*
sold
effects
rule over
a
of
look
above
its
bill
it
in
keeping
potentials
earnings
current
rate
over
the
near-term
years),
and
the
ex¬
I
believe
this
stock
is
remove
all gas being delivered now is in
those
does
the neighborhood of 15 cents per
time.
favor
at
Tele. N. Y.
1-2494
the
N. Q. B.
OVER-THE-COUNTER
INDUSTRIAL STOCK INDEX
11-Year Performance of
35 Industrial Stocks
BOOKLET* ON
REQUEST
man¬
amply qualified to be listed among
that I
WOrth 4-6400
(we
considerably
the
agement,
Broadway, New York S
is
purely intrastate
growth
for
Corporation
111
nature.
mind the defensive nature of this
stock,
aetna securities
of
reason
Kerr
Therefore,
company.
request
Hugoton
unlikely that the FPC will exert
any
on
veto¬
after the
of
by
Information
at
receded
intrastate
the
a
week, is about
minimized
under
it
now,
that
the
company's
Even
bill
of the past
the
may
Kerr
23
around
in
revenue.
high of 27j/4 but with the
of
"Copeland Refriger'n
hydro¬
result
recently
"Douglas & Lomason
facili¬
of
MARKETS
to
Kansas.
addition to the direct sale
the
may
doubt
no
price of coal, the average price of
it
Penna. Power &
undoubtedly
was
understand, because of tremely able and aggressive
escalator
City Electric
Harshaw Chemical
the dehydration plant, from which it
are inclined to
stocks have been
Light Co., which, under
decrease.
or
My ideal security is, easily con-
Enterprise 6800
Atlantic
123
overplayed and that there must ing
one
Hartford. Conn.
Open End Phone to New York Canal 6-1613
Philadelphia
750,000,000
estimate
other
this
Ine,
Enterprise 2904
Phlla.
common stock of Hugoton ProAuction Co., an intrastate natural
As
to
expiration of the contract
overlook intermediate
market fluctuations,
Today two of the favorite exPressions are "defense stocks'
and "growth stocks." One doesn't
aiways get both of these factors
in> the stock of one company, but
among the issues appearing to me
Dealers
Tele. BS 142
2-5500
exec¬
was
fun-
ihe Picture and when we are will-
are
it
company
the conservative side.
der
Stolle
Securities
St., Boston 10, Mass.
Portland, Me.
the time of the organization
the
advance the opinion that it only
seems that way. In the view of
minimum of risk.
successful
so
positions in Hugoton.
further
also
been
under the 15-year contract is
Carl
of
Assn.
Tel. HUbbard
stock¬
not sold to Kansas Power &
we are
Nat'l
75 Federal
Substan¬
companies, is functioning in
This
and
a
J. B. Mognire & Co., Inc.
Members
Philadelphia Electric Common
Gas Field.
To those who
peo-
is
Allan Wood Steel Com. & Pfd.
diversification
time
Quoted
management
same
has
events
this
—
in
which
Pansion in this industry, let
sional
Sold
—
the affairs of Panhandle, making
it one of the outstanding pipeline
on
baby along
wher)
dividend.
a
the
were
time
there is
tially
Panhandle
to
as
carbon
are
dividend
no
estimated
bv the management that mserves
from
to
distributed
holders
to
me
Bought
incorporated
September, 1948, having been
organized by the Panhandle East¬
ern
Pipe Line Co., and its stock
safety I realize I must have broad
37 Wall
Common
the
THs company was
Portion of the famous Hugoton
.•f-
V0GELL & CO., Inc.
of California
in¬
under
year
to
in
At
busi-
feel that the
security
a
FILTROL CO.
Annual
The m»anageis likely to
liberal dividend policy.
a
COme a halt in the enormous ex-
have
branch offices
increase
of the company
Sas producer located in the Kansas
one
owners.
Toledo Edison
by
while
and
in
community
my
the
to
scheduled
are
year
indicate that
important, highly thought of
in
crease
ties
friends and
which my inquiries
pie
addition
deliveries
of
however,
ness,
qualified
To get
In
adopt
convinced that
my
income.
Central Illinois Pub. Serv.
STOLLE
President, G. A. Saxton & Co. Inc.
New York City
nurture
have enough future income to
7-0425
CARL
pets which
joy some of the luxuries in life,
to
our
the average price, we are told
that the present estimate of deliv¬
ment
damenta'l
readily
NY 1-1557
in
place early in 1951.
soundness to
my
Direct wires to
Mcf.
more
vestment Fund
my
bought Mutual Funds.
of
Exchange
Birmingham, Ala.
Mobile, Ala.
highly anticipated this year, initiation of
desired benefits, is the Mutual In- a dividend schedule
should take
lative experience over the period
all
HAnover 2-0700
to minimum in the contract.
others
with
many
I have
As
Tel. CA.
Among
with the management
and
that
l
value, which has been
Request
York Curb
25 Broad St., New York 4, N. Y.
New Orleans, La. -
out, and secure for me share,
year
these
my
assumes
stable
u-
Act.
I know that if I am
join
double
to
years
original capital plus accumulations
CONTROL
Analysis
leave
to
get
can
been able ,to do so
me
U. S. THERMO
capital.
my
wish
if I
York Stock Exchange
New
under the
up
"the" favorite above all others
Common
spire
Members New
Co., Inc., N, Y. City.
only
income
the
in
the
creased
Securities
with stable real
me
do
me
security
living increased substantially, but my in¬
come from my
Mutual Fund in-
Churchill-Downs Inc.
Steiner, Rouse & Co!
Members
Saxon &
security I know that terms of the contract.
this great satisfaction
Earnings this first year may
continued ownership year in well run from $1.50 to $2.00
per
of
living.
1949
to
—
A.
G.
that extensive safe¬
in whom I do have confidence.
and
Carrol J. Hoffman
In
To
Company
President,
under Federal reg¬
is
and
or
The
increase
must
Production
Stolle,
will give me
provide
income.
American Air Filter Co.
Carl
additional assurance and
in
knowing that my
get
one
is
satisfaction
I
notice
security 1
must
tQ reciuce the cost to me of secur-
transfer the management to some¬
the
it
reasons
Bought—Sold—Quoted
18,000,000,000
provisions in the Act make eries for. 1950 is
possible for me to either liqui¬ cubic feet, a 20% increase over
date my security on a few hours' the 15,000,000,000
specified as a
are
of
some
BROADWAY, NEW YORK 3
Co.,
&
it
out.
year
Sears
Draper,
Boston, Mass.
small amount
a
that
and
Here
Exchange
York Curb Exchange
New York Stock
on
ing expert experienced and suc¬
cessful
investment management.
dissatisfied
own
in
year
woiry
invest ($10,000-$20,000) I must
join with others similarly situated Hugoton
Federal
risk, it is the
best security I
could
only
Louisiana Securities
and Mutual Funds—Carrol J.
Hoffman,
Partner,
have
other things
a
o
or
guards have been set
in¬
with
come,
living,
am
care
any
ulations
my
pendable
I
Participants and
Their Selections
,
part.
investment
is
■needs for reg¬
ular
and
de¬
Rights & Scrip
Forum
confidence
Fund.
ment
Specialists in
group
Thursday, July 6, 1951
.
to
.
...
Invest¬
1
u a
T
I like best
I get the greatest
believe
I
selected
120
without
their
Mass.
when
me
As I
New York Hanseatic
BArclay 7-S660
for
HOFFMAN
J.
CARROL
5Vi}/52
1920
different
a
participate and give their reasons for favoring a particular security.
Pfd.
Boston,
Established
which, each week,
.
Alabama &
This Week's
of experts
and advisory field from all sections of the country
A continuous forum in
.
present
National Quotation Bureau
Incorporated
46 Front Street
New York 4, N. Y.
Volume 172
Number 4922
.
.
.
The Commercial and Financial Chronicle
(63)
Stocks for Income—And Korea
INDEX
B. SL
ALLEN M. BERNSTEIN
By
Article« and News
AMD COMPANY
Devaluation Boomerangs—Melchior Palyi
for income rather than
hence
being purchased chiefly
are
capital gains, and declining yields
The
may
based
decline
Outlook—Allan
Williams
C.
Cover
„
Red
THE BIG
3
4
on.
Flags
on
the Market Track—Jacques Coe
Federal Reserve Views Credit Aids to
HANGOVER
So
—Thomas B.
Small Business
McCabe
4
went
you
obsoletes
Due, rather
to psychologi¬
more
than
causes
SEC
to
regula¬
in
the
in
prices during the past year.
stock
changed.
belief
We
A
bull
upon
the
the
lic
is
the
on
shall first
will
people
invest
to
in
in
have
what basis of
re¬
Ac¬
stocks.
common
that
the
has
industrials
6.32%, which com¬
approximately 2.80%
for bonds of the highest grade and
3.70% for preferred stocks of the
reach¬
ed its peak. It
is argued that
same
man
has
started
to
speculate
in
end
in
of
before
of
Allen
M.
bull
a
market
is
Possibly it is true that
the top of the market has not yet
been
stocks
an
advan¬
A
half
in
cut
after
taxes
the difference is still considerable.
It is obviously
'
.
!
8
WALL
STREET, NEW YORK
*
Telephone: WHitehall 4-6551
10
Estate Taxes Are Destroying Small Business—W. T. Hackett__ 11
A Realistic
Approach to Economic Security—Louis W. Dawson 13
What If Excess Profits Tax Is Restored?—William
The Job Is to Sell
impossible to fore¬
tell where the differential will be
reached, but that is not due
considered not worth the risk.
A
of public interest.
It is
15%
increase in
equity prices,
our
own
opinion that a larger
granted no change in dividends,
percentage
of the
public
own
would reduce the yield to 5V2%,
stocks today than ever before. We
Remington Aims
Witherspoon 13
Ourselves—Benjamin H. Griswold, III
13
Erosion of the Economy—Francis Adams Truslow
Jack & Heintz
14
Teaching Capitalism by Making Capitalists—Jacob O. Kamm.. 15
Investment Problems of Pension Funds—Henry J.
Simonson, Jr. 17
Higgins, Inc.
Capital for Development—Role of the Securities Act
—Commissioner
against the
as
of
be
even
Sawyer
Technique for Decontrolling Rents—Jules Backman
the holder
bonds, of about 3V2%—
while
this
advantage may
and
sight.
There is
taxes, to
common
owner
Bernstein
that
earnest
the
calibre.
tage,
only after the
little
is
with
pares
not yet
better!
Competitive Transportation—A Federal
Charles
present basis of average yield on
market
and
6
us—you'll feel much
on
still be willing
cording to Standard & Poors the
market
of
your
over?
all
you
of the end of the
We
turn
pub¬
not
market.
to determine
theory
that
Growth
Aim—Hon.
shall then have to look for
other symptoms
exists,
based
Looking Ahead in Consumer Credit—E. A. Mattison
Balanced
Differentials
Yield
has
investment
advance
99
tions, the entire concept of com¬
mon
unbroken
almost
find
to
up
hurting
Dump them
cal
security-buying
a
on
woke
and
spree,
underlying vulnerability of current profits.
on
Construction
Cover
Stocks for Income—And Korea—Allen M. Bernstein
market. Warns against earnings-and-income reliance at height of booming industrial period.
Holds Korean situation may be sparkplug
setting off major
place effective ceiling
ICHTEnSTfll
page
President, Bernstein-Macaulay, Inc., Investment Counsel
Market economist maintains stocks
3
Is
Richard
B.
McEntire
18
Security Desirable?—Roger W. Babson____
*
.•>
Buying
May
Inflationary
Feed
Fire,
Says
Alegre
Sugar
*
Business in New York to Remain at High Level in Rest of 1950
"Scare"
Puinta
31
5
National
Bought
City Bank
—
Sold
—
Quoted
9
lack
to
the
use
he is
"own"
word
The small
man
advisedly.
his stocks—
owns
carrying them
not
on
mar¬
speculating with
them. He is buying stocks of good
companies or certificates of opengin.
He
is
not
the differential after taxes to
and
about
1 Va %.
large
number
bought
were
time
an
on
this
of utility
stocks
8% basis. For
and long-term growth. There may
registered a
steady increase in price. But when
be
the yield approached 6%,
investment
end
trusts for
exceptions—as witness
trading in television shares.
some
the
is
there
But
the
rotation
no
group to group as
in
income
from
there had been
vance
significant and
im¬
more
these issues
market
eral
bought primarily for
were
profit.
Today they
primarily for income.
bought
are
A
selling
now
are
the.ad¬
number
of
some¬
was
lower.
It
20
23
stabil¬
on a 6%
basis, in spite of the
fact that as a group their earnings
less
likely to be affected by
changing conditions than those of
many industrials.
are
Incorporated
61
Financing
24
BO 9-5133
Bankers Express Concern About Future.j
Have We Learned Yet? (Boxed)
29
,
_
Guaranty Trust Co. Notes Paradox in Federal Deficits...
33
We
Bank
It (Editorial)
See
Insurance
and
Cover
Stocks
Not
long ago the careful in¬
buy first mortgages
so
in
the
final
that
earnings
dends, and
we
analysis
12
take
care
We
capital
and
income
Securities
26
...
divi¬
believe it to be
a
will
daily
im¬
trial
condition.
We
ourselves,
that
are
our
impressed by the
present
forego
income,
they realize that
and,
though
even
stock
prosperity
lush
may
fact
pensate for a falling off in these
two
industries.
Television
sets,
decline.
desire
continue
But it is the
for income
the
believe,
we
will
dividends
definitely.
that
in¬
present
has
been,
From
Washington Ahead of the News—Carlisle Bargeron
though
or
a
Indications of Business
Mutual
NSTA
are
Activity
16
demand for these remain
they could not com¬
increase
Continued
on
page
Observations—A.
Wilfred
Reporter
on
May__
Governments
Public
Security
30
Securities
Securities
Securities Now
The Security I
SECURITIES
500 OUVE
STREET
28
in Registration
St. Louis 1,Mo.
38
Like Best
2
State of Trade and Industry
The
INVESTMENT
32
__
Salesman's Corner
5
Tomorrow's Markets (Walter Whyte
Says)—
34
Washington and You
44
32
Published Twice
1
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Reporter's Report
Our
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land
High Grade Public Utility and Industrial
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pensate in value of national prod-
dominant factor
interested in offerings of
New
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___
Our
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36
Notes
The
We
6
Funds
rests
air-conditioning
units,
washing
machines, automatic refrigeration,
Of course, they frequently de¬
gas stoves and oil burners have
lude themselves with the idea that
all added their share, but even
prices
Eng.
8
Recommendations
Investment
Einzig—"American Prosperity Best Aid in European Recovery" 22
News About Banks and Bankers
pressed by the fact that this belief primarily upon automobiles and
is actually existent and, growing. building. It is a prosperity of lux¬
It is the
The advancing stock market has ury, not of necessity.
unbalanced many of our accounts type of prosperity that is depend¬
ent upon an ultra high standard
—that is the percentage of stock¬
of living,, and as such is more sus¬
holdings has grown to a point that
ceptible to psychological reaction.
some liquidation has been deemed
It would be impossible to com¬
desirable. But people hesitate to
sell
Engineering & Mfg.
Continental Aviation &
9
rather dangerous
of itself.
are,
Liberty Products
Texas
it is
control
will
procedure to buy
stocks primarily for income at the
income, on the theory that if capi¬
tal were conserved, income would height of a boom period. We are
take care of itself. But today the referring not to a booming stock
theory seems to be reversed—get market, but to a booming indus¬
bonds of the highest grade for
enough
Foote Bros. Gear & Machine
18
Business Man's Bookshelf
Canadian
AIRCRAFT EQUIPMENT
MANUFACTURERS
Regular Features
As
<1.
30
_
Coming Events in the Investment FieldBut
vestor would
or
Teletype NY 1-3370
Present Dangers
Income
on
Broadway, New York 6
Savings Bank Deposits Increased §1 Billion in Past 12 Mos.__ 28
Dealer-Broker
Emphasis
J.F.Reilly & Co.
Halsey, Stuart & Co. Survey Cites Upward Trend in Municipal
would
that they have been
seem
stocks
Delano
months ago, when the gen¬
a
portant, however, is the attitude
ized
of the larger investors, the trust
companies, other estate managers
and financial advisers.
Formerly
group
halted.
was
20
Reports Preston
what under their prices of a cou¬
ple
past.
More
a
National Banks' Assets and Deposits Higher,
Reports Mid-Year Business at Peak
However, we may be influenced
by a guide post. About a year ago
a
Colonial Trust Co. Introduces New Fund Raising Plan
135
South
(Telephone;
La
Salle
St..
State 0613);
eign subscriptions and advertisements must
be
made
in
New
York
funds.
Exports—Imports—Futures
DIgby 4-2727
,
4
The Commercial and Financial Chronicle
(64)
matically make
Red
Flags
on
the Market Track
Senior
Partner, Jacques Coe &
N. Y.
Mr.
Coe
technical
cites
market downturn,
as
Stock
evidence
Exchange
signals which have been indicating
trend reversal, declining bond market,
Many
an
there appeared
years ago
article
about
devised by a
new
a
man
wno
had
lows, and mutual funds situa¬
simple rule of thumb
for successful stock market specu¬
which
indicated
to
Aids to Small Business
had
started
in
January—
the stock market strength of May
us
was
By THOMAS B. McCABE*
beginning to lose technical
was the number of issues
Chairman, Board of Governors, Federal Reserve System
strength
which were making new lows, in¬
creasing in totals, while tne num¬
ber
of
issues
making
declining.
were
The
<
kept its declining path all during
and
which
early in June that the market
Terms next October crucial month.
tion.
Bows
Still another piece of statistical
Co., Members of
cycle expectations, reduction of short interest, "confidence"
indexes, issues registering
Federal Reserve Views Credit
Issues Making New
By JACQUES COE
daily
figures
shown
a
Thursday, July 6, 1950
.
.
their appearance
do the necessary.
and
.
and
new
Chairman
Board
highs
In
weekly
in
of Federal
presenting views
Reserve
business, finds chief need is
supplying equity capital and long-term credits. Admits taxa¬
handicap to small business, but says tax revision
tion is serious
odd-lot
curiously
enough
have
preponderance of public
alone would
eliminate occasion for other
not
measures
of relief.
Favors establishment of special Federal investment institutions
to aid small business,
but, in view of the speculative nature of
selling which ordinarily is incon¬
sistent with the trend of the
McCabe,
financial aids to small
on
mar¬
This particular
ket and would be considered a
their loans, advocates making them "experimental" and eventu¬
index has not yet told its com¬
lation.
His
very bullish factor. However, most
basis was the
plete
story
because
eventually
ally placing them entirely under private enterprise.
continuation of a declining bond people overlook the fact that at
10% rule; that
this time, and in this particular
While we commend the com¬ business are usually the first to
market should suggest to us that
is
to
say,
banking system for its admit that they do not have satis¬
the absolute top of the market is market, certain fundamentals are mercial
never buy un¬
different t from
previous
bull financing of the short- and in¬ factory statistical proof of the ex¬
not too many months away.
til the market
The
markets.
"Something
new
has termediate-term credit require- tent of this need.
To obtain such,
time lag is usually from six to
had improved
been added" which for the most m e n t s
of
proof would require a specific
10% from its
eight months—which would sug¬
and
part eliminates the odd-lot sta¬ small
financial analysis of small- and.
lowest
aver¬
gest July, August or September.
tistics
as
a
significant market mediummedium-sized
business
concerns
age level and
Another factor we
constantly index.
sized
busi¬
throughout the country. However,
then keep the
mention is the 41-44 month cycle
we do have such qualitative evi¬
ness, we must
position until
—elaborated
Potential Mutual Funds' impact
upon
in
previous
dence as the policy statement oil
recognize the
the
m a r k et
bulletins. We stated in March, as
There are now 94 open-end in¬ fact that
small business of the Committee
has lost 10%
we say
again, that July, 1950, is vestment trusts
while banks
having a market
for
Economic
Development
from its high¬
the median month and
histori¬
valuation as of March 31 in the- make a great
(1947), the report, of the Tulsa
est
level.
It
cally the top could be five months neighborhood of
$2,200,000,000 and many loans to
Chamber of Commerce (1948) on
made
an
in¬
early or five months late. Hence increasing at the rate of
busi¬
approxi¬ small
the number and functioning of the
teresting story
Jacques Cos
the danger zone could be any¬
mately $100,000,000 every three ness, they are
so-called industrial foundations to
and there were
where from now to November.
months. The buyers of these cer¬ not able to ac¬
help small business, and the testi¬
many versions of the tremendous1
tificates are taking the place of commodate all
mony presented to the Subcom¬
fortune built up in that manner.
Rise in Debit Balances
the old-fashioned odd-lot buyer. small business
mittee of the Joint Committee on
As a matter of fact, after thor¬
There has at times been con¬ needs.
There
There
has been a substantial
the Economic Report (1949) point¬
ough investigations, we found that
increase in customers' debit bal¬ siderable conversation and specu¬ are many fi¬
ing to the existence of unsolved
the
application of this theory,
lation as to what sort of market nancial needs
Thomas B. McCabe
financing problems in the small
while for the most part quite suc¬ ances; in fact, they are more than
twice what they were early in influence these "open-end" trusts of businesses,
business area.
This evidence in¬
cessful, could at times have cre¬
would have during a period of both large and small, that are not dicates that small- and mediumated so many reversals of posi¬ 1949; they are higher today than
great stress,
particularly if the bankable, namely, equity capital sized business concerns encoun¬
tions that the net results were not they were in December, 1945.
fellows
were
inclined
to and long-term credit needs. Com¬
Another item mentioned as a little
ter serious difficulties in obtain¬
outstanding.
tender their certificates for cash mercial banks have a
technical weakness is the gradual
primary re¬ ing outstdp equity capital and
However, the long-term record reduction of the short interest. redemption "en
masse," thereby sponsibility to their depositors for long-term credit needed for exof the 10% rule has been right
There has been some reduction, creating competitive liquidation.
maintaining loan and investment p a n d i n g productive facilities,
more often than wrong.
Curiously for
instance, from March 15 to
Certainly the Korean episode portfolios in a sound condition. broadening the market for their
enough, the drastic decline of list June
15—the
decline
is
from was a test, and thus far the mar¬ They 'cannot undertake business products
and
services,
and
week, which probably will go
2,580,000 shares to 2,369,000 shares ket has come out of it reasonably financing which involves undue launching new projects. The evi¬
down in stock-market history as
elements of risk, undue investi¬ dence
also
—only 211,000 shares down. This well.
suggests
that
veryHowever,
this
particular
the ''Korean break," lost from top
small
or
administrative
ex¬
concerns
sometimes
meet
factor
admittedly is not a substantial re¬ market
should
not
be gational
to
botton—(according to practi¬
duction, but again the significance thrown off lightly. Some time in pense, or the freezing of their with difficulties in financing their
cally all well known averages)— is
the line of direction.
the future—and under more ten¬ funds for relatively long periods short-term
working capital re¬
exactly 10%.
of time.
In the
case
of larger quirements.
We also mentioned three months uous conditions, a decision on the
Past Technical Signals
ago
our
"index of confidence" part of some or all of these trusts businesses, financial requirements
While
the
financing need of
which are not bankable may be
to
get
substantially into
cash,
Our last article in the "Chron- which is a calculated relationship
small business is often referred to
met from other sources, such as
between certain speculative stocks could be a dominant market fac¬
Le," "Final Market Rise Still
insurance companies and the cap¬ broadly as a need for easier avail¬
and
certain
investment
stocks tor.
)ead," April 6, 1950, dealt with
ital markets; in the case of small ability of bank credit, I am in¬
weighted with the bond averages.
clined to think that it is primarily
the possibilities of a "coming in¬
Referring to the historical rec¬
business,
non-bank
sources
of
As far back as March this index ord of the motor
a need for equity
terruption" which would divide
shares, which funds are less accessible.
capital and longon
a
moving average basis sug¬ over a broad period of time have
term
the second phase of the market
credit, either singly or in
gested an interruption some time the habit of making their average
some combination. In many of the
froni the third and (in our opinTaxation
It is difficult highs and
cases that have come
final phase. We mentioned a in June or July.
to the Sys¬
lows
three
to
four
There is no denying the
fact tem's attention where small busi¬
iber of technical signals which to imagine what would have hap¬ months ahead of the overall mar¬
that the problem of small busi¬
ness concerns have
id proven useful in the past and
pened to the markt if we had not ket average—the last highs were
complained of
made during the middle of June. ness financing has been compli¬ credit shortages, close inspection
which we thought might point the had
the
Korean
incident—but
cated by the structure and rates
If these tops should
of these businesses has revealed
way for the beginning of this in¬
stand, then
of Federal and State taxes.
historically it is well known that the
As I that where there was an actual fi¬
danger month obviously would
terruption.
said last August in a statement nancial
when the market technically is be October.
need it usually was for
Certainly, the declining ten¬
on
the
equity capital situation, additional equity capital.
dency for bond prices, the impor¬ ready for a substantial correction,
Steel vs. Motors
prepared at the request of a sub¬
The
small
business
tance of which we stressed, and the news developments just auto¬
financing
committee
of
this
Committee,
There is still one other index
problem is, however, too complex,
there never seems to be a conven¬
to be characterized simply as one
never before mentioned
in these
ient time for a review of the tax
articles, because additional re¬ structure. In 1948 when we had of insufficient equity capital or
search was
There are many
necessary and we have a substantial surplus we elected long-term credit.
small business concerns whose re¬
not gone back far enough to test
to reduce taxes without revamp¬
its long-term accuracy.
quirements for short-term credit
It is the
ing
the
tax
structure.
Now, are so small that the commercial
ratio of the steel
early
June.
-
shares
to
the
motor shares plotted over a period
of years with a certain time
lag.
We have worked
and
the
have
been
it back to
up-and-down
singularly
1945
signals
accurate—
for
instance, it indicates a downsignal in April, 1946—up in Sep¬
tember, 1947—down in July, 1948
—up in October, 1949, and unless
there
is
a
radical
change in the
trend of these ratios during the
next few months the next
selling
period would be December, 1950.
of Chas. A.
'
BANKERS
Members New York Slock Exchange and Other
Leading Exchanges
UNDERWRITERS AND DISTRIBUTORS OF
INVESTMENT SECURITIES
BROKERS OF
Private Wires
•
BONDS, STOCKS, COMMODITIES
Home Office: Atlanta
•
Phone LD-159
that would lead to
we
banker cannot afford
Day & Co., Inc., Wash¬
of the Boston
reform of the
a
system tends to be neglected
and postponed.
While
of
some
which
small
face
the
difficulties
business
concerns
in
be
handled
small businessman
and
advice
the
frequently does
not obtain needed financial
sel
loan
case
which
coun¬
would
ac¬
complete analysis
During the past
in part by a basic revision of the
two
decades
have
introduced
elimi¬
novations in lending techniques,
including the instalment loan for
meas¬
the purchase of
revision
the
impression that
alone
occasion
that
ures
would
the
for
before
now
this
loan
secured
able
are
Committee.
Affirmative View
Those
more
Mericka & Co., Inc., Union Com¬
John
who
need for
cilities
J.
of
Small
or
feel
that
some
to
is
a
provide
effectively for the financing
needs of small- and medium-sized
*Part
Cabe
of
statement
before
Banking
and
by
the.. Senate
Currency,
C., June 27, 1950.
a
banks
number of in¬
equipment and the
by
accounts
receiv¬
by
business
of
concerns
to
these innovations suggests that ef¬
additional fa¬
institutions
or
there
commercial
inventory held under
warehouse receipts. The re¬
sponse
Business Financing Needs
Wm. J. Mericka Adds<
S. Fowler to its staff.
personal
which
present tax structure, I would not
(Special to The Financial Chronicle)
Building, has added
the
in
company a more
of his business.
real
Ohio —Wm.
in
department,
attempting
to
obtain
equity capital would be alleviated
members
Stock Exchange.
CLEVELAND,
the expense
any¬
field
ington at Court Street,
merce
financing,
tax
nate
Kenneth C.
Willett has been added to the staff
INVESTMENT
deficit
of processing and servicing them
thing that will cause even a tem¬ in the same manner as
larger busi¬
porary loss of Treasury revenue.
ness
loans.
Such small business
Therefore, a fundamental study
loans, if granted at all, may often
tax
(Special to The Financial Chronicle)
—
with
want to leave the
G!ias. A. Day Ca. AdJs
BOSTON, Mass.
faced
naturally do not want to do
Chairman
Mc¬
Committee
Washington,
on
D.
forts
by
banks
themselves
to
broaden
can
their lending activities
long way toward widen¬
the circle of bank-eligible
go a
ing
credit risks.
Within
large
cial
the
banks
past
have
programs
year,
several
launched
which
Continued
spe¬
supplement
on
page
37
Volume 172
Number 4922
.
.
.
The Commercial and Financial Chronicle
Business in New York
r
Steel Production
The
Electric
To Remain at
Output
Trade
Retail
State of Trade
Level in Rest of 1950
Commodity Price Index
Food Price
and Industry
Commerce and
Business Failures
J)
production for the nation as a whole rose
slightly last week, but compared with that of the comparable
period in 1949, the improvement was noticeable.
In
taking stock it is noted that a new all-time high was re¬
in electric power production and in automotive output,
while steel operations continued for the eleventh consecutive week
corded
In
second
month
of
on
survey
ducted
employment
to
rose
greatest total in the nation's history.
Industry
to
This
was
New
the
61,482,000,
said spending for new construction this year
will total nearly $26,000,000,000, a new high and 14% above the
1949. Outlays for all construction in the
$11,700,000,000, 17% above the 1949 pe¬
Residential building accounted for most of this increase, the
$22,600,000,000 spent in
1950 totaled
report said.
The elimination of overtime
operations cut into automotive pro¬
Ward's Automotive Reports, esti¬
output of United States passenger cars would
that
mated
June
Thomas
In the steel
industry this week it is "business as usual," and
Our
L
;
working magazine.
military operations there require only eyedropper
pro¬
portions of the war materiel we have on hand. Consequently our
into Korea had little or no immediate effect on industrial
move
J.
Thomas
With
production in the United States at capacity levels
steel
immediate requirements for war would have to be filled at
any
of civilian production. If the Korean situation merely
accelerates preparedness in the United States, the requirements
upon the steel and metalworking industries will be much smaller
and be made more gradually than in the case of war, this trade
the expense
paper
take
adds. The steel and metalworking industries could perhaps
a moderately increased preparedness job without cramping
on
industry on civilian demand would free
steel capacity for preparedness needs. There are signs the
civilians. A catching up by
some
filling consumer re¬
quirements. Washing machines and gas ranges are in much freer
supply and a refrigerator maker is planning to cut production in
August or September. Some tapering of agricultural implement
production is looked for. Similar occurrences in other fields, par¬
ticularly the automotive, would free enough steel perhaps to ac¬
commodate preparedness production with no pinch on goods civil¬
appliance industry is "over the hump" on
want, "Steel" concludes.
ians
i,\
*
the
It
is
of L. Switchmen's Union of
a plea by John
Sunday evening last, rejected
on
Scott, new chairman of the National (Railway) Mediation
Board to end the eight-day-old strike begun on Sunday, June 25,
Thad
a
Scott
South
the
months'
six
next
or
time
this
of
Cold
from
thermometer
war's
me
to
What
our
first
half
the
26.1%
two-thirds
the
sales volume
on gross
half
first
with
pqvoh
off,
foreseeing a
them
of
Only
year.
falling
a
drop.
Reporting
of
1950,
com-
the corresponding pe¬
1949, 38.1% of the firms
inuicaied
5
the
of
anticipate
ranging
upturns
from
while 26.3% found their
to 15%,
figures had been about the same.
Decreases, mostly moderate, were
noted by 34.9%.
Employment not only has
mained
comparatively stable
half,
11.2%
but
of
re¬
in
347
help
months. On
the
firms expect to take on more
during the next six
June
1, 1950, they had 257,302
employees, a drop of 3,027 (1.16%)
total
the
from
a
before.
.year
by
the
the participants
timism
for the
indicates that op¬
is
future
based
generally on (1) plans for inten¬
sified selling efforts; (2) expecta¬
tion
of
of
(5)
markets;
new
re¬
advertising
stepped-up
The firms
looking for
a
business
slackening ascribe their forecasts
to
marily
May
write-off
impotence,
nal
in
political ideals of
any
fight
"make
to
France
not
only
for
but
tne
we
must
sum¬
her military
constant complete
for
well
as
as
internal.
•
England within the past month has given us two excellent
indications of what can be expected of her in building a world of
capitalism.
The public's realization of the autarchic
implications of the Labor Government's obstruction of a European
Payments Union may have been somewhat obscured by technical¬
democratic
ities.
the
But the long-term
Schuman
significance of her intransigeance toward
plan for the creation of a European steel and coal
production pool is crystal clear.
"Economist"
London
As a recent lead editorial in the
characterized
its country's
policy:
"In
Executive's document on European
Unity} of the Party's>'attitude to closer European integration,
the conclusion that appears
ment
will
icies and
to emerge is that the Labor Govern¬
cooperate with Europe only if it adopts socialist pol¬
planning.
accepts the principles of public ownership and
[its economic dicta] do indeed lay the Labor Party open to '
accusation of preferring
ideology to cooperation and of
These
the
putting the preservation of national planning before the possibil¬
ity of international advance."
This is quite apart from the ex¬
tremely dubious position of the Labor Government—a debtor—
on
the one hand dictating to her neighbors, while on the other
resenting
any
interference
accompany our generous
Korea
or
no
in
her
own
affairs
by us
Korea, Kremlin or no Kremlin, no country can
enjoy the privileges arising from inter¬
exercising the prerogatives of selfcontainment. It is now clear that Socialism and international¬
ism are mutually exclusive and that Britain chooses Socialism.
expect simultaneously to
cooperation
national
The
while
Definition
of
Likewise have the Schuman
Our
Political
Drift
Plan discussion and the Hot War
threats rekindled
interest in our definition of the political struc-
ture to which we
ourselves are drifting.
Last
of
the
week your
columnist had an extended direct discussion
ican types—with both Mr. Herbert Matthews, a very competent
journalist who has just written a book based on long-term obser¬
vation in England; and with our Federal Security Administrator,
Continued
on
page
abroad; (4) higher costs; (5)
retention of excise
in¬
taxes and
July 1,1950
duties.
their 48-hour pay check. Mr.
asked the union to call off the strike because of "current
40-hour week with no cut in
Continued,
on
page
32
tabulation
industry
78.9%
of
better,
in
volume
sales
products
shows
in
firms
the
expect
gory
food
and
food
or
the
that
that cate¬
as
good,
six
next
OUR
Next in line were whole¬
months.
ELECTION
TO
MEMBERSHIP IN THE
retail,
78.5%;
drugs,
chemicals and paints, 75.1%; and
and
sale
and textiles, 73.9%. In
and export field, 62.5%
look for as good or better busi¬
apparels
NEW YORK COTTON EXCHANGE
the import
CHICAGO BOARD OF TRADE
ness.
Other
WE
ARE
PLEASED
TO
ANNOUNCE
THAT
aspects of the New York
NEW YORK PRODUCE EXCHANGE
City business situation gleaned by
the survey were
Price
MR.
WINFIELD H. PERDUN
these:
Changes
used, 51.6%
—
COMMODITY EXCHANGE, INC.
On materials
believe there will be
changes, 48.4% not. Of the former,
WILL
ASSOCIATED
BE
WITH
US
AS OF JULY
1
91.4% look for increases and 8.6%
for
73.7%
Exchange
exchanges
Members New York Stock
and other leading
14
WALL
STREET,
NEW
YORK
do
changes,
Smith, Barney & Co.
of
finished
On
cuts.
69.5%
not
while
the
increases and
expect
30.5%
latter
26.3%
products,
to
do,
make
with
anticipating
decreases.
Inventory—73.8% find their in¬
5
ventory
position
normal,
high, and 16.7% low.
9.5%
+
three-cornered question of Socialism—British and Amer-!
(1) keener competition; (2) less
creased foreign
to
grants-in-aid.
export business; (3) dollar short¬
age
this
12-page resume [the National
stocking of dealers' low invento¬
(6)
domestic
supporters
uncertainty about her political status—exter¬
business conditions
better
generally; (3) plans for new and
improved products; (4) develop¬
ment
Wilfred
hand
Association's
Industrial Development Division
of the questionnaires returned by
Analysis
the
are
chief
Dollar-bolstered
A.
to
as
our
the world safe tor democracy"?
the
good
as
and
us
anything else but military
self-defense.
347
business
equally
of
and
other
repre¬
of
intervene
to
Korea,
*
*
that the A. F.
understood
America
Jef¬
senting a com¬
plete
cross-
Miley
better
The
North
for
Warm, irrespective of
confusions, let us at least decisively
abandon any illusions that we are to be fight¬
ing for ideological principles and not delude
our
city's major industries, participat¬
in the survey, 72.3% expect
Substantial expansion in consumer
year ago.
force
joining of support.
turning
by
campaigns.
credit took place in May
setting a record for the month of $19,091,000,000. The increase of
$481,000,000 during the month was the biggest so far this year. The
previous high was $18,779,000,000 last December 31. Amounts owed
on
instalment sales of automobiles and other goods at the end
of May totaled $6,751,000,000. This was $2,033,000,000 more than a
At
decision
momentous
armed
Britain's
ing
ries;
#
*
with
UN-Atlantic Pact is
section
first
production in the United States, the magazine notes.
Truman's
of
ourselves that the Korean stake for
Of
riod for
plenty of it, in metal-working plants and steel mills despite United
States military intervention in Korea, says "Steel," national metal-
ideological pronouncement
Secretary, a Churchill-Atlee Parliamentary
debate on the plan for international economic cooperation was
terminated by the Prime Minister's announcement of President
War
Miley,
firms,
for
*
few days before this incisive
a
Britain's
Vice-Presi¬
protect the new record in July, but that August production might
a new high if schedules now being projected are attained.
*
Just
from
dent.
moderate
*
to prevent
Executive
eclipse the record set in May by 136,000, to reach a npw high of
718,000. The agency predicted that a lack of working days may
reach
as 'bogus interna¬
hy the 'great capitalist interests of Europe'
the nationalization of basic industries."
tionalism' devised
York,
ferson
be
duction the past week, however,
War, tonight denounced the Schuman Plan
As¬
public
predictions of the Department of Commerce and Bureau of
Labor Statistics. They
"LONDON, July 1—John Strachey, British Secretary of
Inc., and made
1,750,000
ployment is the current construction boom which will continue
during the second half of 1950 with practically no let-up, according
riod.
by the
Commerce and
important factor in helping to sustain production and em¬
first half of
con¬
sociation
June
Korea, Britain's Mr. Strachey, and Our Mr. Ewing
"Strachey Brands Schuman Plan Capitalist Plot to Bar Socialism"
[Special to the New York "Times"]
the increase, during the
second half of 1950, according to
a mid-year
erally
May and only 178,000 below the record high, set in July,
1948. Reflecting the influx of job-seekers from schools and col¬
leges, there was also an increase in unemployment last month. It
climbed to 3,384,000, up 327,000 from May.
to the
in¬
expected to boom in
City, with volume gen¬
above
An
major
Business is
New York
slight decrease.
the
results
dustries.
history.
past week that aggregate unemployment continued
some
For
city's
of
survey
appraisal of the country's employment situation, it was
an
found the
show
of
industrial
its greatest production cycle in its
Industry Associa¬
tion of New York reports
L
Total
By A. WILFRED MAY
Index
Production
Auto
Observations...
High
CarloadingS
for
5
(65)
WqlsloaJloffutqii & Goodwin
M«»W>
York Stock Exchaago
San fronotco Stack 6rckaag.
Mam Yatk Cwfc (Mchaaga
U» Aagalat Stock Ejcfxmg*
Stack Ejichtm*.
SAN FRANCISCO
LOS ANGELES
30 offktt coat! to coast
Oiroct fti.O.
Yfita Srttam Coanacn All
Of Be a,
PHILADELPHIA
42
•
6
The Commercial and Financial Chronicle
(66)
.
that
reveal
From
Ahead
of the News
themselves
themselves
of
the
as
before
world
that
"free"
the
because
peoples
looking to them might
are
misunderstand them and become disheartened.
A
It
munists and
Senator
in
mess
our
Taft
Korea,
him
backed
was
and the wise
in the Kremlin decided
men
disunity in this country
The record is pretty plain
Bargeron
feelers, the end of the
war
held
was
they have the
course,
bombs.
But
very backward
credit
continu¬
of
situation, and in sup¬
suggestion for an
my
council
and
concerned
interested
we
solely
in
consumer
affairs, here it is:
The
First:
broad¬
Board
A.
E.
Mattison
of
Reserve
overstates
seriously
amount
avail¬
Federal
the
credit
out¬
consumer
standing.
ability, and continuously increased
its
usefulness
in improving the
majority
If
this
standard of living of the
families.
American
Federal
if
accept
Board
fig¬
measure
we
with
credit
do
we
Reserve
even
ures;
sumer
if
Even
Second:
the
the
con¬
Board's
important and sensitive indicators
accepted by some of our presum¬
ably sincere and informed econ¬
omists, writers and government
ence
constituting
posting
many more millions g year
vehicle for the Russians in
great propaganda
a
lot of jobs for lame-duck politicians,
a
This
is
military aid
a
because, bear in mind, we alone developed and
dropped the atomic bomb and a very backward nation is now
supposed to be able to develop it, notwithstanding that neither
) Great Britain
r
nor
France
fit to try to develop it.
see
Well, in the domestic politics around this running of global
^
things
on
the part of
State Department, a group of Republi-
our
|
cans, with a view more than anything else to showing up the bunk
J of our Administration's policy, several months ago began asking
why,
if
you
going
are
to
such
all
an
effort
out
"contain"
to
| Communism in Europe, you don't do something in Asia.
At this
time, Great
in
government
do the
China
Britain
and
our
had
State
recognized
the
Department
Their alarm and warn¬
agencies.
all
ings that there is now too much
consumer debt
are predicated on
an assumption that Americans are
fools who are rushing headlong
Communist
moving to
thing. This group of Republicans, Taft, Bridges and
Knovvland, and others, attacked the Administration on the ground
that it had thrown China to the Communists.
They were trying to
the bunk of the Administration's policy
jof spending billions in Europe and other billions at home on the
military establishment to "contain" Communism.
On
one
or
or
review
this
the
to
out
by
the
State
Department
to
its
agents
and
would
we
not
defend
them.
sent
nearly
nor
six
Formosa
in either of them
would
McCarthy's
to
seem
attack
be
upon
more
the
Department
of
Koreans.
tals
Oh, the Northern Koreans
stimulated
by
Russians.
indirect
Well,
we
had
a
we are now
seems
not
advice and
to have
learning, despise
The
their
in
lives
our
and
the
only manifestation of which they have
be
at
the
last
moment, very likely because of the
licans''agitation against him, Truman decides
retary of State and
us
a
helluva
lot
move
before
in
we
on
are
to
this situation.
reverse
It's
through with it.
Sec¬
going to cost
Thus goes
but
f
seen
Repub¬
his
opinion but
of
withholdings), as com¬
with 9% at the end of last
year.
The report goes
our
and
to show
on
18%
equaled
sets
the
at
these
of
end
end of 1949 it
liquid
1940.
of
as¬
the
At
in the far lower
was
can
of
1940
between
and
by
1949,
disposable personal income
155%!
Federal
Board
better
assure
credit
consumer
credit
consumer
figures
overstated, and that is true.
It is also true that they are un¬
were
realistic
from
and
misleading.
article
an
I
quote
appearing in the
April 15 issue of "Business Week,"
the
bearing
title,
"Federal Re¬
Change Con¬
Will
serve
Board
sumer
Credit Figures."
The arti¬
going
soon
less—in
billion
$2
to
Federal
"Statisticians
done
or
here; not just
institutions
more
to
a
tackle
job for
or
have
been
con¬
sidering revision of the figures on
a
;might be established,
representation
from
ment
of consumer
experts' minds for them."
These
asso¬
individually,
containing
complaints
address
18th
by
Annual
Industrial
Angeles, Cal.,
Bankers
15,
before
this
will agree
you
that
actively engaged
are
business
vital
have
in
right
a
expect that economic statistics
of
hign
such
from
come
importance
snouid
impartial
some
body,
interested
only in providing ac¬
curate, neutral,
unbiased infor¬
mation to help us all—consumers,
businessmen, lenders,
officials—to come
to the wisest possible decisions in
matters
involving the economic
borrowers,
and government
life of the country.
How
be
continues
to
statistics
Board's
the
can
regarded
so
the
when
for
press
Board
power
to
regulate consumer credit under a
renewal of Regulation W Or some
similar
measure?
Suggestion for Consumer Credit
Regulation
Finance
Now
I, in the interests of
public service, offer the
may
further
additional suggestion that we also
explore ways and means of regu¬
lating
of
industry
our
to end some
have
that
abuses
the
devel¬
here and there.
oped
The recent Federal Trade Comf
mission
study
exorbitant
bile
excessive and
the automo¬
of
in
packs
business, with results which
lead to permanent regula¬
could
this
tion
in
been
unnecessary
established
had
would
field,
have
if the industry
means
some
of
itself,
with
sufficient
to control abuses.
policing
power
industry there are al¬
enough shortsighted "hitand-run"
operators to give the
business a black eye in the minds
In
any
ways
the
of
Other industries
partial solu¬
in
many
instances
public.
found
which
long way toward in¬
confidence.
I
public
creasing
the
that
agree
least
at
credit
consumer
industry itself has made substan¬
tial strides in this respect, and I
suggesting only
am
view
and
research
further
a
re¬
additional
for
that can be enforced
offenders for the benefit
and, in turn, our
safeguards
against
the
of
public
business.
well
am
long
of
aware
and
involved,
culties
too
in the
illusions
the
diffi¬
have
been
business to have
about
overnight
correction of abuses.
But, like the
mine who
had his first
friend
of
child
also
20
after
I
am
of marriage,
years
aware
the
of
progress
that has been made and urge only
that renewed
to
continue
efforts
and
put forth
be
the
hasten
im¬
provement.
The
"Down
Currently
Payment"
one
of
Question
the most dis¬
cussed—or
eral
Reserve
Board
check of Fed¬
figures
cur¬
of
America.
"Retailing Daily"
said:
Most of this
cussed—topics
concerns
of
finance
the
com¬
panies and banks.
The licensed
loan companies as y.et do not seem
to
be
involved.
Amer¬
Association,
1950.
who
we
have all had
we
industry, if you please, is terms:
down-payments 'and
maturities.
a
Institute
the
sure
am
on
Credit
of
I
less
alarmist
reported
credit activity,
Mattison
be
with.
contend
to
real¬
more
vice
being made by the Retail
Mr.
over
in which the Fairchild News Ser¬
rently
Institute
June
brought
total
those
of
seme
conjectures that
public notice in the April 5,
1950, issue of "Retailing Daily,"
The article in
*An
the
were
well
less—a
or
to
seg¬
every
for
cause
any
estimates, that is.
in
might
istic amount tnat would
I
are
that
together, such downward
billion
$17
cle says:
"Consumers
totals.
urged
the extent of service
on
have gone a
I have said the Federal Reserve
be
billion,
a
reduction
which
would bring the $19 billion fig¬
ure down
to the neighbornood of
tions
Estimates
Reserve
reported
aggregate
$2
have
Defective
owe
we
increased
credit
tne
might also
Taken
income
after
pared
nearly
new, complete, integrated,
industry-wide effort. For exam¬
ple,
a
joint
economic
council
ican
global leadership.
then
future
ciations
in
strutting brass.
But
matter
century.
a
At¬
known
income
at
ing the citizens, the Congress and consumer credit for some time.
the
feel
the
present
setup
government
agencies,
con¬ They
cerned, directly or indirectly, with doesn't give the real picture. Now
this situation?
It is my opinion complaints from finance compa¬
that an industry-wide job needs to nies and others have made up the
They despise
never
mere
the years to come than by educat¬
by their fellow Koreans, they failed to fight for the Stars
Stripes, for "Democracy" which they have
taxes
once
as to to¬
purchase,
of
means
a
proved by the record of
one
and
personal
consumer
kill the frequently
credit, either
as
How
in
strutting American brass which has been in their midst.
tacked
than
performed
a
the
were
mission
worked.
us.
be
or
half
intelligence
military
disposable
(total
increased
as
stimulating the Southern Koreans.
Our advice and stimulation
Koreans,
our
of
outstanding
service
public
as
was
it
revisions
1940 equaled only 12%
106%
rely
largely
on
personal
opinion, without any proof what¬
soever.
The proof that consumer
credit is sound is on our side, not
single Russian in the melee.
getting Russian
are
Southern Korea training and
a
the end of
while
must
moving against Southern
Incidentally, this is the situation. So far,
officers have been unable to find
Southern
now
better
consumer
Senator
his
and
support by Senator Taft, the attitude of the State Department
responsible for Northern Koreans
the
thor¬
so
myth
that
consumer
credit debt is reaching dangerous
proportions.
The amazing thing
to me is that those who challenge
Secretary of State
logical that, instead
State
reported that
credit
Consumer
for all to
and
January.
It
for
Proportions
What
Acheson said this publicly in a speech at the National Press Club
in
has just
consumer
recurring
abroad
of strategic importance, there was
nothing
wanted
we
record
people.
couid
advices
months ago, the State Department said neither Korea
was
people respect their
Not Reaching Dangerous
prepared to defend that island.
In official
The National Industrial Confer¬
a
group.
My and more favorable ratio of 11%.
mentioning it is to And if we look at total consumer
suggest what might be a number- debt,
which
includes mortgage
one
project for this industry to debt as well as consumer credit,
consider, under its obligation to the ratio to liquid personal assets
continue to improve its usefulness was 52% in 1940 and 32% in 1949.
assumed position of leadership
therein, and suggested that a
line should be drawn in Asia before Formosa and that we should
we were
in
economy.
Board
in
business.
great care.
most
in
purpose
our
Administration repudiated him.
still
the
informed
oughly
occasions, Taft, trying to cut down on the
expenditures abroad, said by way of showing that he was not an
"Isolationist," that he was quite cognizant of world affairs and
The
is
of
as
It is not necessary to
obligations.
more
let the world know
it
some
cannot repay. You the
relationship
between
con¬
do hundreds of sumer credit and liquid personal
thousands of merchants, bankers, assets
(the cash, bank deposits,
and other lenders, that this is not savings and loan shares, and gov¬
so, and you all know how abun¬ ernment
bonds)
held
by
the
dant the record is with proof that American people. Consumer credit
know,
I
and
same
show the inconsistency
our
with
into debts they
the American
was
in
yardstick,
an
volume
credit should be re-examined with
to
activity than to improve on our
past record?
This premise is, of course, not
So to combat this
and then we spend another coupJ.e of billion in
j program to European and Asiatic nations.
,
that
of the
mighty nation, we maintain a military
establishment costing $15 billion a year and support an
organiza-
told.
I
-f,
serious¬
balance
| this country and affording
.
However, for the
rubber
and
.
consumer
premise is true, then what better
country, become tremendously effi-
propaganda, does have the bombs,
tion called the United Nations
.
of
pattern can we find for our future
are
*
over-all
of
dis¬
we
a
cient industrially through
.
port
of
and
recent
record and because of the
ened the chan¬
•
And
the overstate¬
total
Board estimates.
ness
nels
This
the
to
up
of
contract
previously
by
from
loans
credit debt in the Federal Reserve
astound¬
ously
is because they either do not have the industrial
facilities or would rather depend upon this country than
go to the
tremendous industrial effort which it takes to manufacture the
<
be?
have
Nagasaki. Since that time we, having been the only people
to drop these bombs, have become the most
frightened people in
the world about them.
Neither England nor France has yet seen
bombs, although, of
of
ment
purpose
-
failure to deduct debt
loans,
which
are
apparent
ways
the
with
to
the
creuit cate¬
add
loans
element
to
consolidation
nothing to the
concerning
fact
and
formula.
familiar
closure
business
consumer
instalment
covered
propaganda
a
contributes
buying, in my
opinion, is due
entirely to the
up
find
and
combat
to
referred
pertain
Other doubts relate to the Board's
the idea
explore
to
is
thoroughly
is
What
answer
there
Job
this method of
race
troops, unopposed, into Manchuria. He got
into the Japanese war and among the victors in this
way.
In the
meantime we dropped atomic bombs, unnecessarily, on Hiroshima
fit to manufacture the
that
isn't
The
of
important
the
doubts
txie
quotation
Sucn
gory.
credit has
but rather, in my opin¬
ion, aoes great harm.
I am sure nearly everyone here
ing growth of
Carlisle
that
loans in the
economy
public.
can
peace
usefulness
Amer¬
swer?
until Stalin could
-
the
an
constructive
other
this
that after winning the war in Japan and with
Japan sending out
which
perhaps
really the an¬
Well, it so happens there could not have
possibly been a Korean situation without the
agreement at Yalta.
means
But
the time to push us.
was
whose
ican
so
up,
this showed there
over-simpli¬
to
Board's
estimates
is
up
long-held
authorities as to
accuracy."
reporting
T. & S. A.
reaching dangerous proportions.
continued
that
Senators McCarthy and Taft are undoubtedly
responsible for the Northern Koreans' attack.
This is because Senator McCarthy charged the
State Department was infiltrated with Com¬
of
apropos
by
Some of
living standards, denies
fication to say that the future of
consumer credit depends upon its
widely syndicated Leftist columnist has
written,
the
Attacks Federal Reserve
estimates of outstanding consumer credit as "excessive, un¬
realistic and misleading." Advocates banks and others con¬
cerned in consumer credit financing explore ways and means of
self-regulation, with view to controlling and eliminating abuses.
therefore they must conduct
they have never conducted
and
guidance,
it is
some
in
Prominent West Coast banker, contending consumer
increased its usefulness in improving
the
fantasy which is presented to the American people on account of
their now being global leaders, on account of all the "free" peo¬
ples of the world looking to them for guidance, particularly ECA
of this article is to set down some truths in
The purpose
points
doubts
E. A. MATTISON*
Executive Vice-President, Bank of America, N.
BARGERON
By CARLISLE
credit
consumer
February
Consumer Credit
By
total
is $2 billion less than reported for
Looking Ahead in
Washington
Thursday, July 6, 1950
.
.
Los
"The
Board
fact,
is
however,
revising
its
that
system
the
to
This
doubt
has
always
been,
will continue to
be,
and
a
no
sub-
Volume 172
ject
of
Number 4922
unending
I
to
answer
there ls one
it—I
that each of these homes will be a
don't
vision sets.
servatively
barring Federal
looking forward to
selling at least half of this market
in
murhmi yr°PP0Seud- However, this
™C\ rhaVe observed, as have
terms
cycles just as
you.
run
And
does much of the rest of the busi-
particularly
which
ours
inked
with
views
as
fhl d°i n0t sbare ihe dim my col¬
view or
the alarm
of
of
some
When
repossessions
and
°
GSJ'Se sui.iiciehdy to be seriS Wlil siiL^n~not uni¬
fnrmh
formly,
iirst
tne
of
ones
forceu,
competition,
the
we
But those who
u£ course.
have be en the worst offenders
to
better
*hnf? are other
A.d
attractive
restricted.
well
fornia
on
ation
worked
emphasis
and
1950,
growth,
so
able
oper¬
to
popula¬
9% be¬
by
of
kind
the.
bankers
who
are
18%.
fellow.
ber
'and
now
1960,
efforts
their
to
duct
force in
our
by
little
the
serve
Consumer credit is
structive
American
of
homes.
at
in
a
have
,
been
has
60%
faith
the rate of population
and,
peace,
To
a
which
is
that
rate
to a
great
extent
household
that
furnishings
and
essential
are
selling the soft goods
to
today out¬
modern family life) are
(the cloth¬
that
a
in
faith,
is
history
all,
and
short time
This past
come.
of
rent
better understood,
respected and less suspected.
of the
new
capital to take care
new
increased
volume is
Cutting
one.
The
problems.
costs
cur¬
a
the
and
mechanization of operations is an¬
how
half-
to
as
other.
to
say
nothing of contend¬
our
nation
a
life
as
been grave
continued existence
well
to our mode
as
enterprise profit
ingredients
system.
The
now
faith and
are
dynamic
our
have
the
and
needed
active par¬
an
ticipation by every citizen in the
institutions
American
ticipation
that
in
community
affairs,
public service banking on the part
of
your
interest
institution, and an active
to
government affairs to
in
elect and
support those
furthering
way
our
of life—ail these things are
within
your
power
realistic,' step
be
dedicatea
good American
and
challenge,
ing with creeping—or is it gallop¬
in
cords the geratest
ing—inflation; but none of these
best years
consumer
up
the
credit
to
do.
coming years
will
be
of our lives.
advertising
inevitable.
are
the
of
public
effectiv^
New Issues
Education
the
to
added
cost
h3S 3lS° proved
S
$13,694,000
wifhV? a11' l1 uSeems t0 ™e tha*
with
notable exceptions that
a lew
have caused
ble
in
a
some
structure
rather
great deal
of trou¬
localities, the term
tending to
City of Oklahoma City, Oklahoma
improv™
ls
tnan
to
deteriorate.
I
<
am
;•
*
*0
.t,*
;
*
V
'
..#1*
*
referring primarily, Gf
the West Coast
course, to
In order to
area.
4%, 1%% and 2% Bonds
the trend further it is
suggested that greater effort be
improve
devoted to
counseling dealers and
Currently many
increasing their expen¬
.their
firms
are
Dated
salesmen.
ditures
for
should
do
is
sales
in
Sales
Bureau
tion-
So
been
we
our
bank
a
"Buv
Interest
Exempt from Federal Income Taxes Under
held,
Business
of
106
tar
Educa¬
AMOUNTS, MATURITIES, COUPONS AND
which covered
Due
better
communities, with an at¬
of 11,865, with the pro¬
still under way.
There
ments
that,
taking
on
while
new
not
new,
to
and
car
pansion.
1.66%
1965
2%
1.90%
1.95
1.05%
4
1.15
1960
1%
1.65
1966-67
2
1%
1.20
1961
2
1.70
1968-69
2
100
1.75
1970-71
2
2.05
1956
1%
1.39
1962
2
1957
1%
1.40
1963
2
1.80
1972-73
2
2.10
1.50
1964
2
1.85
1974-75
2
2.15
1958
1%
(Accrued interest to be
added)
ex¬
after publication of this
received by us and subject to the
approval of legality by Messrs. Wood, King and Dawson, Attorneys, New York City.
There appear also to be oppor¬
The above Bonds
are
offered subject to prior sale be!ore or
advertisement, for delivery when, as and if issued and
extend consumer cred¬
fields
m
Pi ice
1%%
■-:)
tunities to
it
or
4%
show
indication of continued
every
Coupons
1955
I refer
fields
Maturities
1954
car
these
Yields
Yields
Coupons
1953
leasing by pro¬
also to the growth
of appliance financing now beingcovered by the real estate mort¬
Both!
Maturities
are
fessional men;
gage.
Yields
Coupons
1959
truck leasing by busi¬
firms and
ness
Maturities
significance due to
the rate of growth of both.
$598,000 each August 1, 1953-74, inclusive
$538,000 August 1, 1975
two current develop¬
are
YIELDS OR PRICE
have
courses
tendance
gram
Existing Statutes and Decisions
Training Pro¬
150
than
thereafter)
cooperation
witn
the
Department of Educa¬
■.
California
tion's
below. Principal and interest (February 1, 1952 and semi-annually
Bonds in denomination of $1,000, registerable as to principal only.
might in¬
sponsoring
Retail
gram
It
to know that
currently
Now"
training and
likewise.
terest you
August 1, 1950." Due August 1, 1953-75, inclusive, as shown
payable in New York City or Oklahoma City. Coupon
Jonly just scratched—
ravel
credit; for example—ana in
of r'soft goods and home
furnishings. The farm market for
the field
credit
consumer
offer
would
seem
to
great possibilities.
<!
The National
City Bank of New York
■
.
Expanding Markets for Appliances
Somebody; suggested
the
other
Eastman, Dillon & Co.
Continental Illinois National Bank and Trust Company
Kuhn, Loeb & Co.
of Chicago
*
•/
The Marine Trust Company of Buffalo
Barr Brothers & Co.
Hayden, Stone & Co.
day tnat we finance escalators for
the cliff dwellers of New
th
80%
cess
of
hav^
but not too
actually
labor-saving
end
Harris, Hall & Company
Fidelity Union Trust Company
(Incorporated)
Wood, Struthers & Co.
Geo. B. Gibbons & Company
Newark, N. J.
Incorporated
ac¬
to electric power,
many
Mexico
SV1 may' today some
all,-farm homes have
Bramhall, Barbour & Co., Inc.
Wm. E. Pollock & Co., Inc.
F. S. Smithers & Co.
installed
appliances.
By
King,Incorporated Co.
Quirk &
Hirsch & Co.
the
of
1951J it is estimated that
almost
Adams, McEntee & Co., Inc.
Robert Winthrop & Co.
every farm home in the
be in a position to use
Northwestern National Bank
of Minneapolis
J. C. Bradford & Co.
nation will
electric
appliances
conveniently
homes do
as
today.
What does
try
and
as
fully and
city and suburban
this
mean
to
indus¬
progressive bankers?
it opens up a new, rich market,
almost undeveloped as far as home
Pacific Northwest Company
and
equipment
are
Shelby Cullom Davis & Co.
Goodbody & Co.
Janney & Co.
Incorporated
Blewer, Heitner & Glynn Robert Hawkins & Co.
Incorporated
to
appliances
Sills, Fairman & Harris
June 30,1950
H. V. Sattley & Co. McDougall and Company Edward D. Jones & Co.
Incorporated
Let's
and meet the
by dealers cn terms is weak sellfog, and
the final
unfavorable
results
have
much. Individual par¬
us so
century in America probably re¬
growth and de¬
of
periods
there
threats to
to improve
raising of
world
see
measured
have
as
steps
my
all
must given
field
There will be
need look back only
we
In
zeal¬
be
Bold
our
in the economy
encourage
must
mis-statistics put out
bureaucratic body which1
or
any
history,
services, and to have our place
more
firm
a
gains
in
taken
our
ability to achieve it.
our
strengthen
we
must of course
of
most
relatively
far
be
strong America to assure
a
pro¬
we
as
find
might want to oversimplify us.
con¬
democracy.
guarded.
ously
better than those of the past;
To attain them
these
But
certainly, the coming years
consumer credit promise to be
even
units
family
our
growth
appliances
plan out¬
sold anj finally eliminated the
company's 60-month plan. Obvi¬
ously,
expected
sound, constructive, and human in
explains why hard goods (the dur¬
36-month
a
increase
family
growth is expected to increase by
between
15%
24%.
faster than
a more
large appliance
a
ti.at
and
ceeding
instance here in Cali¬
one
m
This
tween
conclusions
proper
increased
Family
deal for the seller and
the buyer if the terms of sale are
more
the
can
ways, of course,
lenaer to olier
while
should
6
This,
draw
1940
m0St elfec Jve Of Which
i
is
because
not
lation
Then
operators
increase
from the fact that while our popu¬
are
follow suit.
fnr
JpzaO per xarni per
yearly total of over
increased
otier
1950.
Most
regaidless
curtail.
by
and
will
deal with them
competent
a way to
competent man¬
and
new,
has brought consumer agement always has.
credit from infancy to maturity.
It happens to be my way of!
It has played a vital role in the
thinking that we consumer credit
development of our country, and bankers should be too proud ofi
we
can
be justifiably proud that our
insignia to allow it to be gam¬
we
are
consumer
credit bankers, bled
away, either by our own con-i
dous
be considered.
leagues.
and
1945
really
7
years
then, creates a new and
counting the tremen¬
potential in the equipment fertile market for the merchandise It is one of the most powerful
that is so largely financed by in¬ forces in a democracy that has,
and implement field.
So here we have new fields for stalment credit,
and therefore if by itself, brought "more to most"
development. What do they indi¬ we do our part of the job as it in terms of the good things of life
cate?
They show that there will should be done, banking will con¬ to masses of people.
be a steadily increasing potential tinue to aid in the acquisition and
Gains Must Be Guarded
for consumer credit, especially if furnishing of an increasing num¬
alone,
must
own
1945,
this
tion
saie oi
a
and
between
continue,
after 1951. Trans¬
three-quarters of a billion dollars
in appliance sales to farm homes
one
indivisiblv
our
million
dollars, this means an
for
"*ar
sales, the merchants'
well
Es
is
12 years
into
£*vtictge
Secor.y. In any highly com¬
petitive business,
hke
the
lated
in
50
numbers, family units
1940
tween
are
management
improvement in living stand¬
ards the world has yet seen. This
have increased by V^k million be¬
Trade authorities con¬
reg-
to which I stand of record
ation
In actual
radio and tele¬
are
est
that
prospect for over $3,000 worth of
electric appliances,
believe
velopment and certainly the great¬
ing, luxuries, and specialty items
are largely
bought by indi¬
viduals for themselves).
concerned, because it is estimated
moment to
I have any categori¬
suggest mat
(67)
The Commercial and Financial Chronicle
.
argument.
P1 esume for one
cal
.
.
the
8
The Commercial and Financial Chronicle
(68)
Balanced Growth of Competitive
benefits
which
The
Federal
Federal
from
or
ac¬
present.
Government
NSTA
has
Notes
always promoted the development
By HON. CHARLES SAWYER*
Secretary
Thursday, July 6, 1950
.
ships, the trains, the trucks, buses,
automobiles, and the airplanes to
use these facilities—every one of
tivity, either past
Transportation—A Federal Aim
..
of
transportation, not
Govern¬
ment enterprise but as private en¬
terprise. The Congress at its first
session in 1789 promoted shipping
and
shipbuilding by legislation
which reserved the coastal ship¬
of Commerce
defining government action in promoting and
says it is Administration's policy that
no
competitor, or class of competitors, should have special
privileges or undue advantages. Advocates "user charges" for
highway and air transportation, and points out "great difficulty
in giving Federal funds is knowing when to stop."
Holds start
should be made toward basing rates on actual cost of furnish¬
Sec. Sawyer, in
regulating transportation,
trade
ping
American
to
who owned
AD
L1BBING
citizens
American-built snips.
Government
form
as
action
for each
—
of
transportation—has
followed
the
following pattern:
First, promotion — in the interest
ing transportation and sees much room for improvement in
of enabling citizens more easily
government transportation activities.
to move themselves or their goods
from one place to another; second,
As Secretary of Commerce
the imagination
and
I capturing
take pride in what my Depart¬ stirring
the enthusiasm of our regulation—to protect the users of
ment has done for Friendship In¬ people, in and out of Government. transportation from unreasonable
ternational Airport.
Selection of
the
site
was
based, in part,
on
exten¬
an
sive
meteoro¬
logical
survey
conducted
the
by
Weather
Bureau.
Civil
The
Aero¬
nautics
Ad--
In
enthusiasm for the
our
the
We cannot afford
old.
air
an
other transportation me¬ national defense would not be
in war, the con¬ jeopardized by lack of adequate
of this nation's business re¬ transportation facilities.
In peace and
duct
The Federal Government
air.
all forms of
Government Objectives
ment of Com-
not
merce,
only helped to
+'nr
building—the Federal
totalled
The
con¬
$2,212,500—but
general objectives of Gov¬
ernment
grad¬
ing the land and erecting the ter¬
tribution
transportation are in
part good working order.
of the Depart¬
minal
vital interest in seeing that
a
are:
transportation
That
(1)
users
have
adequate, safe and non-dis¬
criminatory service at reasonable
rates;
making sure that Friend¬
(2) A healthy development in
ship gets the very latest equip¬ the various forms of transporta¬
ment for safety of operations. The
tion so that all forms can be sol¬
traffic control
tower ani the
landir^j
strument
system are al¬
On order is the
ready installed.
newest type
radar
in¬
of precision approach
and
surveillance
radar.
These will make certain that the
of
progress
in
this
of
quate
nation
meet
to
will
hear
We
contradiction
of
June
30
amounts
to
$1.5
billion.
In
1845 the
Congress authorized
the Postmaster General
to
and
to companies oper¬
ating steamships which could be
converted for
war
use.
A
century
for
services rendered
rather than
transporta¬ giving business an outright gift of
the taxpayers money.
Incidental¬
told that
ly, the mail-subsidy idea did not
money
is used to
As you all know, the installa¬ Government
originate in Washington, but in
tion, operation and maintenance promote some forms of transpor¬
London; in 1940 the British Gov¬
of the airways facilities at Friend¬ tation—such as air—at the ex¬
ernment gave such a subsidy to
ship—and at many other airports, pense of other forms—railroads,
help Samuel Cunard set up steam¬
and between airports—is the re¬ xor
instance; that inland water
ship service between England and
sponsibility of the Federal Gov¬ farriers, with Government aid, America.
give unfair competition to rail¬
ernment. The agency in
charge is
You all know that the Federal
the Civil
Aeronautics Adminis¬ roads, or that the Government al¬
promoted
railroad
lows rail rates to be set at such Government
tration. For the past 25 years the
uneconomic low levels that our construction by giving grants of
Federal
Government
has
been
land and rights of way. This form
providing—without charge to the coastal shipping is being ruined.
of promotional activity started in
hear
that
the
vehicles
of
users—an extensive system of ra¬ We
1850 with a grant to the Illinois
dio and visual aids to air
trucking companies are breaking
naviga¬
Central.
It continued until 1871.
the corners off the huge cement
tion and air traffic control.
The
of the progress of science and tech¬
confusion
nology.
tion
annual
domestic cost of the Fed¬
eral
airways has risen from $800
thousand in 1925 to $92 million in
1950.
These figures do not include
other Federal benefits to air trans¬
portation such as airmail subsid¬
ies, grants in aid for the establish¬
ment
of
airports,
funds
and
ex¬
pended for constructing and oper¬
ating the international portion of
the Federal airways system.
The
other
airplane
forms
has
of
superseded
transportation
Friendship International
Airport, Baltimore, Md., June 2o, 195O.
regu¬
lation that there is imminent dan¬
that the vital spark of private
ger
business
initiative
There
is
New
York
Stock
Exchange
New
York
Curb
Exchange
New
York
Cotton
Chicago
Exchange
Exchange
Board
oI
inc
Trade
New Orleans Cotton Exchane*
And
other
Exchanges
not, however, lose sight of
NEW
YORK
Detroit
geneva,
4,
N
Y
pjtt«eurge
switzerland
of
1887;
since then
other laws have given the
one
ment.
over
operations
interstate '
and
manage¬
The
Congress has felt that
central
fact:
We
do
have
the government supervision over cer¬
greatest transportation system in tain functions of private manage¬
As
of team¬
Government
business
the
result
a
between
we
have
is
ment
necessary to make sure
furnish the public
and
that
railroads
in this
safe
and
efficient service
at
rea¬
of sonable rates.
Today the Federal
eirways, railroads, highways, and Government exercises broad pow¬
improved rivers and harbors ever ers in respect to construction, con¬
greatest
network
solidation
End
or
.
abandonment
of
transporta¬ lines, rate-making, issuance of seto
this country's economic c u r i t i e s,
safety practices and
political
development and equipment, and has extensive con¬
well-being
sight
of.
We need
plenty
has
This
of
world.
of
never
is
a
been
big
lost
country.
good transportation and
it. We have it. Our
transportation
N. Y. Cotton Exchange Bldg.
Act
increasing control
those of
Chicago
for
room
enactment of the Interstate Com¬
merce
railroad
us
tion
'
faces,
members
of
O'Neill
National
1950
our
Marshall and John M. O'Neill of Baltimore's Stein Bros. & Boyce.
ing effort in making the 1946 National Convention in Seattle a
great success. Our Seattle affiliate helped to make our Convention
in the Pacific Northwest tops and their demonstration of hospital¬
Sid, we will see the Pacific Northwest
the advertising columns of our Convention
ity will never be forgotten.
in
many
species in
issue of the
John is
"Chronicle," I
am
sure.
of the original group of organizers of the National
one
Security Traders Association and highly respected by our trading
fraternity. He is one of our most active national members and is
personally acquainted with the majority of our entire member¬
ship. John, you must be lonesome with Bill Boggs now in New
York so why not take up Herb Blizzard's challenge of getting a
bigger percentage increase in advertising in our Convention issue
of the "Chronicle" than does any other affiliate.
I think two old
youngsters like you could do much at this time to get our minds
off Korea.
How about it?
"F.Y.I."
Have
that
learned
Herb
Seibert, Editor and
Pub¬
lish^ of the "Chronicle" and
a
plah V^ith
memoes
our
can
one of our members, has worked
National President Frank Burkholder whereby
out
we
have a personal participation in this year's advertis¬
ing effort and more particularly in the development of nonfinanWill you please reply immediately upon receipt of
the important communication you will soon receive from Frank.
cial contracts.
By the way, looks like
a big success at Virginia Beach the
the largest percentage of membership
here on the East Coast and with the convention only a few hun¬
dred miles away, suggest you consider spending your vacation re¬
end
of
With
September.
newing and developing friendships in
Security Traders Association.
organization—the Na-
your
tioned
HAROLD
B.
Chairman
SMITH,
NSTA
Advertising Committee
Pershing & Co.
120 Broadway, New York 5, N. Y.
Dealer-Broker Investment
any
We
facilities
dwarf
other nation of the
now
have
227,000 miles
trols
over
accounting and report¬
ing.
For many years railroads had
virtual monopoly on
It is understood that the
to
firms mentioned will be pleased
send interested parties
hauling.
this
Some
form
reached
the
long-distance
believed
that
transportation
ultimate.
One
in
had
en¬
the following literature:
!
Basis
for
Business
Strength—
Discussion in current issue of "Inr
Almanac"
vestors
Co.,
—
Estabrook
&
Cement Producers—Analysis of
common
stocks of Lone
Penn-Dixie
ment,
over
an
eleven-year period—Na¬
tional
Quotation Bureau, Inc., 46
Front Street, New York 4, N. Y.
State
15
General
Portland
Star Ce¬
Cement,
Quarterly Comparison and
Analysis for 19 Leading New York
City Bank Stocks—Laird, Bissell
&
Meeds,
*
Chemical Industry—Analysis of
"blue
chip" of growth industries
—William R. Staats Co., 640 South
Spring Street, Los Angeles 14,
Amalgamated Sugar Co.—Mem¬
Co.,
160 South
Lake
Cars-
&
Co., South Texas Build¬
ing, San Antonio 5, Texas.
Over-the-Counter Index—Book¬
let
showing an up-to-date com¬
parison between the thirty listed
industrial stocks used in the Dow-
Jones
Averages
and
over-the-counter
the
thirty-
industrial
stocks used in the National
Quo¬
Averages, both as
to yield and market performance
tation
Bureau
Burton
&
Street, Salt
available
are
memoranda
Montana Power Co., Mountain.
on
Fuel
Supply Co., Utah Idaho Su¬
Co., and Utah Power & Light
I
Texas Munic¬
ipalities— Brochure—Volz,
five
L.
Main
City 1, Utah.
Also
Co.
well
New
*
orandum—Edward
gar
Calif.
on
Broadway,
*
F.
Co., 61 Broadway, New
York 6, N. Y.
Financial Data
120
York 5, N. Y.
and
Cement—E.
Hutton &
a
railroads, 30% of all railroads thusiast, Dr. A. T. Hadley, saw no
world; 350,000 miles of pri¬ use for additional domestic trans¬
mary highways, 57,000
miles of portation facilities, especially a
airways; 27,000 miles of improved national system of motor highinland waterways. We have the
Continued cn page 30
in the
Recommendations and Literature
Street, Boston 9,
Mass., and 40 Wall Street, New
many
im¬ Interstate Commerce Commission York 5, N. Y.
developed anywhere.
The importance of
Members
Commodity
much
be
provement in present transporta¬
nation
Co.
soon
bridled "free enterprise" of the
rugged railroad barons led to the
tion activities of Government. Let
private
H. Hentz &
will
burned out.
work
1856
are
In those two decades, the amount
the nation's
of land awarded—by Federal and
highways and are not paying their
state governments — came to
fair share for maintaining or re¬
slightly less than 10% of the en¬
building the roads which Federal
tire land area of the United States.
funds help construct.
Railroads developed rapidly. By
We are told, in addition, that
1890 there were four transconti¬
the transportation industry is so
nental lines in operation. The un¬
tightly chained by Federal
the world.
Established
Federal
We
familiar
two
M.
slabs which make up
in
*An address by
Secretary Sawyer at
dinfeer meeting of the Baltimore
Assoc atiOli of Commerce in connection
with the
dedication of the
in
policies.
Here's
John
Sanders
J.
Advertising Committee: Sidney J. Sanders of Seattle's Foster &
award
of na¬ later we still have this public pol¬
icy of overpaying private business
needs
the
ade¬
be
tional defense.
safety keeps abreast
Today all forms of domestic
transportation,
except
railroads
and pipelines, receive government
help either from subsidies or from
Federal provision of facilities such
as airway markers, airports, high¬
ways,
inland waterways, harbor
developments,
weather
reports,
maps and charts, and other aids to
navigation.
The grand total of
Federal
expenditures for trans¬
portation in the fiscal year ending
operation; mail subsidies
That the transportation sys¬
(3)
tem
effective
and
vent
Government Subsidies
this
is also
Sidney
Many will recall that Sid was very active and displayed untir¬
quires all forms of transportation:
water, rail and highway, as well
has
is
treatment; third, more regulation
the interests of own-,
ers and operators of transportation
property and equipment—and also
to assure that the private interests
of users and the public interest of
—to protect
neglect
dia.
as
n
but we must not
age;
Weather
Charles Sawyer
to
We live
transportation facilities.
in
ministration,
Bu¬
value
make this error in respect to our
which like the
reau,
new we
sometimes tend to forget the
of
new
Black, Sivalls & Bryson—Mem¬
orandum—Wm. J. Mericka & Co.,
Union Commerce
land
Building, Cleve¬
14, Ohio, and 150 Broadway.
7, N. Y.
New York
Central
Illinois
Public
Service
Co.—Analysis—Tyson & Co., Inc.,
Lewis Tower Building, Philadel¬
phia 2, Pa.
Central Vermont Public Service
Co.—Analysis—Ira Haupt
Ill
& Co.,
Broadway, New York 6, N. Y.
Volume 172
Number 4922
Industries
Dresser
dum—Roberts &
.
.
.
Memoran¬
—
Co., 488 Madison
Avenue, New York 22, N. Y,
.
International Minerals & Chem¬
.
ical Corp.—Research bulletin dis¬
cussing the outlook—Department
C, White, Weld & Co., 40 Wall
Street, New York 5, N. Y.
Mexican Railways
Analysis—
—
(69)
The Commercial and Financial Chronicle
"Scare"
Baying May Feed Inflationary Fire
pouring of goods in peacetime as
this country is now enjoying. In
view of this fact one may question
of the cold
ified
war
will
,
mean
intens¬
national defense
With the Treasury already show¬
how long the current rates of pro¬ ing a deficit, it becomes all the
July issue of "Monthly Bank Letter" of National City Bank duction in certain lines can be more imperative to cut down non¬
points out intensified spending on National defense may lead
Federal
maintained without beginning to essential
-spending
tc
to heavy buying on assumption prices are going higher.
catch
up
with
requirements. avoid
feeding
the
inflationary
ernment deficit, excessively easy While basic commodity prices had
In its review of general busi¬
fires now and piling up more deb;
terms for home mortgage financ¬ a considerable rise this spring, the
ness conditions, the July issue of
for servicing and paying down ir.
the "Monthly Bank Letter" of the ing, the large and increasing vol¬ reaction early last month was an
the the future."
National City Bank of New York ume of consumer instalment debt, indication of reluctance on
•
spending
9
on
'
.
Zlppin & Co., 208 South La Salle
warning that the current farm subsidies, constant pressure part of buyers to reach too high
war scare may stimulate inflation
organized
labor
for
more and a reminder that commodities
by
that have been over-bulled can
Oklahoma Gas & Electric Co.— should the public, on the assump¬ wages and other benefits, and—
drop sharply. The caution exhib¬
Memorandum—F. S. Smithers & tion that prices are going higher, now—the war scare.
enter upon a buying spree.
"The
latter comes
at a
time ited by business leaders since the
Co., 1 Wall Street, New York 5,
"In boom times like these," the when the
New York.
economy
is operating end of the war has been an im¬
"Letter" states, "the question al¬ close to
capacity, and when there portant stabilizing influence all
Pennsylvania Salt Manufactur¬ ways arises as to whether infla¬ is little 'give' on the upside to along.
In the present instance,
ing Co.—Memorandum—DeHaven tionary forces may not gain the take care of any enlarged de¬ barring a major conflict, anyone
& Townsend, Crouter & Bodine, upper hand and lead to a cycle mands either on the
part of the rushing out and buying on the
Packard Building, Philadelphia 2, of rising wages and prices and
Government or of private citizens. assumption that prices are going
Pennsylvania.
through the roof may find he has
expanding credit.
The
present
"A point to bear in mind, how¬
acted overhastily.
situation
has many inflationary
ever, is that no country in the
Riverside
Cement
Co.—N e w
"Presumably the warming up
elements in it—the Federal Gov¬ world has ever seen such an out¬
analysis—Lerner & Co., 10 Post
Office Square, Boston 9, Mass.
Also available is a brief review
sounds
a
Street, Chicago 4, 111.
Harry Fischer With
Hornblower & Weeks
(Special to The Financial Chronicle)
CLEVELAND, Ohio—Harry
has
Fischer
become
with Hornblower & Weeks,
Commerce Building.
merly with George I. Griffiths &
Co.
in the past
and
was
Memorandum—Cruttenden & Co.,
Chi¬
Street,
Salle
La
South
209
4, 111.
cago
Sugars, Inc.—Anal¬
Southdown
ysis—Scharff & Jones, Inc., 219
Carondelet Street, New Orleans 12,
Louisiana.
U. S. Thermo
Control—Analysis
State
—Raymond
&
Co.,
148
Street, Boston 9, Mass.
COMING
EVENTS
Investment Field
In
(New York City)
July 7, 1950
Association of New
Investment
the West¬
annual outing at
York
chester
N. Y.
Country Club, Rye,
(St. Louis, Mo.)
July 12, 1950
Security Traders Club of
Louis annual summer outing
St.
at
Seibert's Grove.
(Portland, Ore.)
July 21, 1950
Portland Investment
Bond Club
annual summer outing at Mt.
Hood
Golf Club.
Sept. 8-9, 1950 (Portland,
Ore.)
of the
Association,
annual meeting at Gearhart Hotel,,
Gearhart-by-the-Sea, Ore.
Pacific Northwest Group
Bankers
Investment
(Philadelphia, Pa.)
Philadelphia Fieldi
at the Manufacturers Coun¬
Sept 15, 1950
'
LIFE OF GE0HGIA
SERVES THE SOUTH
Bond Club of
Day
Sept. 26-30, 1050
Va.)
(Virginia Beach,.
of the Na¬
Annual Convention
Security Traders Associa¬
tion at the Cavalier Hotel.
Oct. 12, 1950
Dallas
Club Annual
Fain
OF GEORGIA is
operations, and one of the ten larg¬
"combination
companies"
—
those selling both
in the
than 3,000 full-time agents in
weekly premium and ordinary insurance
country. It
eleven
(Dallas, Tex.)
Bond
South-wide in its
est
tional
;
INSURANCE COMPANY
LIFE
try Club.
has
more
Southern
states,
who
serve
over
—
a
million
policyholding families.
Nov
?«-Dec. 1, 1950
(Hollywood*
Fla.)
Investment Bankers
annual
Association
convention at the Holly¬
people
worth of
to
policyholders last year amounted to some $7,000,-
000. The
Company has assets of $50,000,000.
Hub of the
1950 (New York City)
Security Dealers As¬
sociation Silver Anniversary Din¬
ner at the Waldorf Astoria HoteE
New York
have more than $700,000,000
protection with Life of Georgia. Payments
wood Beach Hotel.
Dec. 8,
now
Atlanta.
the
Company's activity is its home office in
Recently enlarged and modernized, this is
This is another advertisement in the series
cal offices in
lina,
Conrad, Bruce
Georgia, Alabama, Florida, South Caro¬
Mississippi, Arkansas, Tennessee, North Caro¬
lina, Virginia, Kentucky,
as a
and Louisiana.
mutual company selling only weekly
premium insurance, the Company converted- to a
stock
organization in 1918 and since has greatly ex¬
panded the scope of its coverage. Known throughout
the life insurance business as fast-growing and pro¬
gressive, Life of Georgia next year will observe its
60th
anniversary.
-
published for more than ten years by Equitable
commercial concerns in the
to the further
development of the South by supplying capital funds to sound enterprises.
Corporation featuring outstanding industrial and
Southern
Joins
operations are spread throughout the
Company's territory, with 160 strategically-located lo¬
Securities
(Starlight Roof).
best-appointed office buildings in the
South. Service
Chartered
Meeting.
Southern
of
one
states.
economic
Equitable
will welcome opportunities to contribute
(Special to The Financial Chronicle)
PORTLAND,' Oreg.
—
Richard
NEW
Langton
has
been
added
staff of Conrad, Bruce &
to the
Co., 813
Southwest Alder Street.
NASHVILLE
DALLAS
KNOXVILLE
.
(Special to The Financial
FREMONT,
Neb.
ORLEANS
MEMPHIS
Securities
Chronicle)
—
YORK
HARTFORD
CHATTANOOGA
GREENSBORO
BIRMINGHAM
NEW
Joins Waddell & Reed
EQUITABLE
Brownlee O.
Robert B.
AND
Corporation
JACKSON. MISS.
Currey, President
English is with Waddell & Reed,
Inc. of Kansas
City.
1
322 UNION STREET,
NASHVILLE 3.
Trading
Manager for J. E. Neubauer &
Corp.—
Acceptance
Union
He was for¬
of the Cement Industry.
Securities
N.
associateu
TWO WAUL STREET, NEW YORK 5.
Co
10
The Commercial and Financial Chronicle
(70)
will
It
A
Technique for
Decontrolling Rents
A
feasible
more
rentI
paid
the
It
basis
for
long
moderate
housing
come
low
and
therefore, is how
the
line
shows
the
levels
in
single
brackets.
distribution
by
persons
The
1948.
col¬
estimates
the
Council
the
of
of
Economic Advisers after allowing
f°r their estimates of under-reHowever, it is is a difficult one to make in terms porting of income in the Bureau
difficult
to of any precise definition as to its of Census data.
This table shows
between
luxury and non-luxury
apartments. Such a determination
understand
characteristics.
that 4.7% of all families and sin-
the
The Office of the Housing Expediter
has
decontrolled
some
xle
justifica-
tion for
con-
a
tin uation
con
t
r o
1
of
for
The
status.
ury
in two
ing.
ants
u
who
p
oc-
the
y
units,
few
«
1
i
claims
be
i
could
made of
undue
hard-
ship
if
they
had
to
pay
A
multiple
the
following
unwilling to recognize the lack of economic justification
of
protecting the higher
income
groups
against rises in
rents, then rent control will continue to be handled in political
ceiving
has
terms—as
connection
been
with
clear
so
the
in
York
New
services
in
utilities,
cleaning and painting,
Recommendation
by
defined
^
wo^ers In
nrvti
*
n
manufac u ing
t
'
not available
the
re-
are
statewide
tax
come
the
basis
York State,
County,
had
$10,000.
In
reports.
2,401,000
total
from
135,695,
is
in¬
1947, out of
taxpayers
or
incomes
It
Federal
New
in
5.7% of the
in
excess
doubtful
of
whether
major shift in this distribu-
any
Distinguf&hing Luxury From
no
of "luxury"
sim¬
which
be used to set apart that type
of housing.
comes
100
which
Unfortunately, there is
can
tion developed in 1948 or 1949 al-
feet
square
taining at
Non-Luxury
ple definition
dwellings or apartments consisting of more than four rooms of at
least
State law.
least
2
each,
maximum
the
equal to $25
per
unfurnished
or
room
rent
and
Distrib.
uie pro¬
York City.
state
reside
above
in
New
in
the
must
be
classified
recipients.
income
III
Under $30 a month
9.8
$30-$49.99
con¬
cerned.
Our next problem is how much
would
be
viduals
or
paid for rent
earning
A
more.
useful
found in the
by
indi¬
per
$10,000
indication
budget for
an
is
exec¬
utive family prepared by the Hel¬
ler Committee of California for
the
city
of
San
Francisco.
The
latest budget for a family of four
is available as of September, 1949.
It
covers
income of $12,405. An
an
spent
for housing.
This covered
cost of a house purchased in
the
September,
1949,
hence
and
re¬
flects current
a
building costs.
On
monthly basis, the amount spent
lor
housing
$120.37.
income
equivalent
was
Note
that
which
is
this
is
to
for
$2 405
a
year
monthly
rent
for
those
earning
$10,000.,; Nevertheless, this figure
gives us a good first approxima¬
tion for
ury
dollar definition of lux¬
a
housing.
19.6
16.3
$50
3,000 to
4,000
18.4
17.7
4,000 to
5,000____
11.1
13.6
21.2
4.7
a
Dallas
month and
$125 to $150 will mark the
Average
Dollar
Percent
Rent Groups
Amount
Increase
57
$6.83
25.7
21.5
62
5.31
36.8
13.6
56
9.53
23.7
relative proportion spent for rent
in
a
moderate
income
family's
4.3
41
6.08
10.3
budget.
59
13.96
2-3.1
75
10.99
55.6
Bureau
of Labor Statistics,
ap¬
proximately 13% of the expendi¬
36.7
tures
over
Area 3
16.7
Under $30 a month
$30-$49.99
$50
a
month
a
month and
Spokane4
4i.4
21.6
58
14.27
98
_
47
17.87
27.5
8.2
over
_
•
46
5.71
19.0
test
is
found
According
of
family
a
entire
than
to
in
the
.
the
U.
earning
*.
city
All
income
100.0
groups
100.0
Median income ___$2,840
$3,420
$30-$49.99
$50
♦Income
includes
money income of
noninstitutional
population.
civilian
SOURCES:
Bureau
of
bution)
and
(adjusted
bution
Department
the
Census,
Council
after
is
Commerce,
(unadjusted
of
Economic
distribution).
ing of income
of
the
distri¬
Advisers
(Adjusted
distri¬
estimate
m
for under-report¬
the Bureau of the Census
survey.)
SOURCE:
dent,
Economic
January,
11)50,
Report of
p.
the Presi¬
14Q.
Dwelling
Units
The
by
S.
1940,
New
Contract
and
City
Tenant-Occupied
Monthly Rent
Du
1940
Manhattan
Under $5
elling Units
N. Y. City
273
Nevertheless,
16.7
ignored and the 13%
34
6.41
10.2
52
-3.59
25.8
66
6.24
34.2
45
7.04
18.7
5
12.75
24.4
-
9.0
36
9.08
30.2
18.1
46
7.09
37.7
4
tainly,
families
earning $10,000
9
2,587
distribution—can afford to pay the
economic costs
is
little
of
that
14
25,432
justification
14.21
38.5
9
13.84
over
additional
units
were
reported
as
follows,
25.8
effective
some
15. 1949.
Percent of
Rent Increase
expenditures
Percent
15.1
16.1
5
6.16
17.5
$75 and $99.
5
7.86
21.7
City,
25
to 29—_
61,345
193,269
City
Jacksonville
106,928
1
10.00
470,285
4
8.83
26.7
Houston
(>
11.62
39.8
339,765
42,794
163,223
60 to
74—
39,525
110,443
75
99
31,696
57,742
100
to
and
over
Not reporting
Total
SOURCE:
45,434
53,397
4,172
12,942
542,034
16th
Census
of
1,724,776
United
1040, Housing Vol. HI, part 3>
pp.
States,
114, 132.
Lake
2 Decontrolled
July
__
£___
June
4 Decontrolled
14, 1949, by the city council; surveyed May 15-Nov. 15, 1949.
3 Decontrolled June
23, 1949, by the city council; surveyed Apr. 15-Nov.
15, 1949.
Nov.
15,
16,
1949,
by
the
Housing
Expediter;
surveyed
May
15-
1949.
5 Decontrolled
Aug. 5, 1949, by the city council;
surveyed June 15-Nov. 15.1949.
Decontrolled Aug. 5, 1949, by the
city council; surveyed June 15-Nov. 15, 1949.
7 Decontrolled
Sept. 14, 1949, by the city council;
surveyed July 15-Nov. 15, 1949.
8 Decontrolled
Oct. 19, 1949, by State-wide
action; surveyed Aug. 15-Nov. 15,
1949.
6
SOURCE:
U.
S.
Bureau
amply
during the past few
demonstrated
Many
years.
smaller
cost
have
persons
sized
taken
which
apartments
great deal
a
effort
per
in
room
an
hold down the total cost
to
of
housing. It is not infrequent in
housing
developments
for
prospective renters to ask how
new
much
they
space
sum
of
this
buy
can
for
a
the inexorable
—
the
budget
average
situation
unavoidable.
Moreover, the substantial de¬
pressed levels of rents in the New
York
ductions
in
in
the
substantial
per
large apartments.
cost
room
before the
during and
area
resulted
war
room
The
use
define
to
re¬
cost of
of
the
a per
luxury
housing, would, therefore, exclude
that definition many of the
apartments
occupied
by indivi¬
from
duals
families who would most
or
certainly be defined as in the up¬
per income groups. Because of this
consideration,
suitable
more
a
definition of luxury is in terms of
monthly rent for
entire apart¬
an
rather than rent
ment,
per
room.
Logical Decontrol
The
most
of
of
$125
to
appears
trol rents,
logical
in
way to decon¬
which are still
areas
experiencing a housing shortage,
by releasing from control the
highest
cost
housing
and
then
slowly but surely lower the level
is
of controlled rents.
for two
This is logical
reasons:
(1)
No justification on grounds
hardship can be advanced to
of
control
5%
or
rents for those in the top
10% of the income distribu¬
tion.
"
7
*
t
As the housing situation is
alleviated, the tendency is for
(2)
of
Labor
Statistics.
this assump¬
City is found
of
housing by
more
made
of
or
44.0
Topeka
71,748
using total
housing rather
for
than cost per room has been
high
rent
housing
available first,
so
be
to
that
ten¬
-
9.40
.
on
York
distribution
3
Spokane
59
the
$2.95
165.267
to
New
for
Amount
Salt
light
margin of liberality.
A useful check
l
60,073
to 49
some
Units
to 24
50
incomes
luxury
provide
Knoxville
Dallas
is
is ap¬
cut-off point
as a
way
subsidizing
such income groups.
The importance of
monthly rents in the 1940 Census ants in that category are protect¬
of
Housing. (See Table II).
In ed against
runaway rents.
>
Manhattan, 45,434 apartments
This second point has been sup¬
rented for $100 or over in 1940.
ported
by the experience with
This was 9% of the 542,000 ten¬
new housing and decontrol in the
ant-occupied
dwelling
units
in
past year.
A special study made
the borough. An additional 31,696,
32
107,247
40
month
for
There
by
in
1.4
50,027
30 to 39
a
said
40.0
.
20
.
$150
for
In
estimate
housing.
be
tion
12.0
45.273
to
the
of
can
13.8
5,236
10 to
tendency
obtained.
is
data,
year—
29.3
month
Nov.
these
a
the upper 5% or 10% of the income
8.12
$30-$49.99
after
groups.
plied to the $10,000 income, a to¬
tal of $1,300 or about $110 per
month
more
11.37
45.1
time
smaller
ratio
individuals
or
or
Cer¬
11
9.97
on
this
be
to
previously discussed.
39
46
a
if
apartments
tends
11.6
20.3
month and
be
of
rentals,
—0.4
over
12.03
bbZ
$5 to
15 to 19
26.9
1.0
month
and
16.0
6.07
10.9
___
increases
to
6.46
8.3
propor¬
income
6.66
33
a
lower
48
10.5
1 Rent
tends
groups
for
21.8
$30-$49.99 a month.__
$50 a month and over
$50
come
than
47
Under $30 a month
Manhattan
York
17.0
10.5
3.4
Under $30 a month
a
6.32
6.25
increase, the
less
about
tion spent for rents by higher in¬
7.8
Jacksonville Area 3
$30-$49.99
53
27
44
incomes
total.
significantly
distribution
comes
a
year is
spent for rent.
Studies of expenditures show that
as
is
monthly
$3,000
12.9
$30-$49.99 a month
$50 a month and over
$50, a month
Houston Area3
28.7
6.6
month
a
4.89
2.3
over
City
Under $30
45
8.7
Under $30 a month
Distrbiuted by Contract Monthly
Rent,
month
a
month and
a
Lake
Topeka 7
TABLE II
Tenant-Occupied
Salt
11.9
the
in line with the distribution of in¬
'
Under $30 a month
of
1%.
makes
dividing line between luxury and
other types of housing in New
York City. In other areas, the cut¬
off point will be lower.
Another
2%
or
few of the apartments
in the other boroughs rent at $200
or
more, the
proportion for the
run
than
in
San
higher
Francisco, so that the New York
City figure would also be some¬
what
higher.
On this basis, it
might be suggested that a monthly
rent of
a
equal to
very
limits
$125-$150 the Dividing Line
$200
is
apartment out of every 50 in
designated
Housing costs in New York
10,000
at
This
more.
an
above the suggested cut-off point
of
$10,000.
It suggests a lower
about
were
Manhattan,
year
Average
___
or
Since
are
we
Percent of
month
a
month
nition
which
not available show¬
renting
apartments
one
13.9
16.7
there
that
luxury in¬
Such a "guess¬
as
somewhSt
not avail-
,
distribution
timate' would be close enough for
the purposes of reaching the defi¬
with
are
ing between $125 and $150 would
be significantly smaller.
A recent special study of luxury
housing in Manhattan estimated
In any event, the top
10%
Rental Units
16.0
2.4
the
in
to
not
tailed data
since about half of the resi¬
dents
is
ing the breakdown above $100, it
is clear that the proportion rent¬
all Units in
Knoxville 2
17.4
over___
City,
area.
apartments
$75 and $99 had
New
for ail
Under $1,000
10,000 and
are
Units Reporting Rent Increases
Adjusted
15.1
Xork
City
the
resi¬
by
Percent Incr.
$1,000 to $2,000
5,000 to 10,000
10%
in 1949, or
(Rental Dwellings with Kitchen Facilities)
Single Persons
Unadj.
Dislrib.
earned
was
the
every
portion could not be much
from $193.5 billion in
and
% of all Families
3,000
rose
place. Thus, on
total personal
Comparable data
by Income Level, 1948
2,000 to
basis,
Changes In Residential Rents, by Rent Group,
All Units, by City, 19491
Families
Losses
taken
rise of less than 10%.
a
TABLE
Single Persons not in Familes,
♦Income Size
increase in total in¬
1947, to $211.7 billion
month
per
has
income
was
month furnished.
TABLE I
of
for
some
national
a
$35 per room per
One of the significant
Distribution
though
con¬
bedrooms,
State
York
of
the
$100
class,
probable, the total
proportion renting at $100 would
be only 15% for Manhattan and
6% for the entire city. While de¬
excess
$10,000 per year. Even if
$10,000 or over income in
New
all
raised
been
which
City
of
the
if
renting between
es¬
$1,444
Data
by states
or
cities on a comparable basis.
However, data are available on a
individual
as
t
Data
Washington, decontrolled:
Luxuries
i
Statewide
approved
Housing Expediter,
(2) Seattle and King
_
10%
executive with that income
house-
was
.
per
elevator, switchboard,
room,
r
industries.
of $30
(unfurnished)
room
«v\
of the apart¬
average
.
.
^
j;imes ^ average, annual inc me
con-
'
an
,,
,.
month and up, and which includes
rental:
we are
be noted that this is at least three
units, in which
maximum of 80%
per
24,
unit structure
ments rent for
the economic cost of such housing,
Yet, if
1949
on
or more
'
Oct.
?.lve ta maximum line of demarcallon tor ,uxury incomes It m.ght
Rent
decontrol:
to
taining 12
a
that this figure would certainly
.
County
■
had
persons
portion of families with an income in excess of $10,000,.suggests
used
shown below:
cases are
resolved
higher rent
Jules Backman
definitions
(l) Alleghany
Advisory Board
c
incomes above
$10,000 in 1948. Such a small pro-
because of their lux-
apartments
luxury
housFor ten-
York
than
come
"adjusted distribution" gives
umn
de-
to
I
various
by
families and single
income
demarcation
of
which
dents oi iMew
of
termine
luxury in¬
available
York
individuals
problems in connection with rent
control,
are
less
of incomes for families and
economy.
so
serious housing shortage
prevails,
as a
New
in
Even
was
State.
safe guess to
a
in
show estimates of the distribution
con¬
in-
be defended
can
having
as
Data
Table
peacetime
a
defined
comes.
rents because
runaway
will effectively eliminate rent
liberalized
that
York
dicated,
in¬
wnn
$10,000
of
trol, which does not belong in
a
probably is
timate
of
New
be
Argues
high-rent housing is being made available first. Concludes
on
in
taxpayers had incomes in
sliding-scale
control
families
excess
somewhat
such
Rent
an
Bu¬
It is in¬
tion
of
than
distribu¬
the
to
proportion
in
income
1940, according
of Labor Statistics.
reau
therefore, that the 1940
distribution
provides a satisfac¬
tory guide to the present distribu¬
comes
of
since
we
illus¬
Thursday, July 6, 1950
.
.
relatively
high dollar incomes, the following
emerges; In New York City, the
higher
luxury housing, is found by
If
an
witn
area
an
as
tion and the proportion of income
more
program
tration of
cities.
City
spent for rent by those who may
protected against
are
individual
luxury dividing
as
gradual release from highest to lowest cost units.
wealthier tenants
for
take New York
most logical way to de-control,
Suggesting $125-$150 monthly urban rental
-
to
apartment.
per
believe
examination
as
approach
able
of
School of Commerce, Accounts and Finance
line, Dr. Backman suggests
per room.
most satisfactory
approach in terms of establishing
objective standards for decontrol
Professor of Economics,
Assistant
New York University,
that decontrol
noted
decontrol is found in terms of the
Dr. JULES BACKMAN'
By
be
ip terms of rental
was
.
6% of the total, rented between
For all of New York
advertisements
York
"Times"
showed
in
from
substantial
a
the
1945
only 3%
to
New
1950
increase
in
of the anartments the
number of apartments adver¬
rented for more than $100 while a
tised for rental. For Manhattan, of
similar proportion rented between
the 16 apartments offered for rent
$75. and $99 a month. On a na¬
on Sept.
1, 1946, six were offered
tional basis, the Federal Reserve
at
Board has estimated that only 2%
of the non-farm families who are
tenants
paid
month in
$100
and
over
per
1948 and 1949.
Rents
risen
in
only
New
York
6.1%
(102.6
1950,
City have
to 108.9)
or
had
more
no
there
month
per
price.
were
By
230
and
March 5,
offers
of
apartments in Manhattan, of which
73
Small New York Rent Rises
$150
nine
were
showed
at
no
apartments
$150
or
more
and
64
price; there were 63
offered between $100
Continued
on
page
43
Number 4922
Volume 172
The Commercial and Financial Chronicle
..
.
(71)
if for any reason a business inter¬
Estate Taxes Aie
est
Destroying
tate
the
W. T.
not
sold
HACKETT*
are
ly,
The Huntington National Bank, Columbus, Ohio
that
where
is
will
a
involved—the
raised
be
by
Asserting high taxes, because of their confiscatory effect, lead
to socialism, Mr. Hackett cities current heavy estate levies as a
value"
purposes
series factor in el.mination of small business. Cites instances
in the decedent's estate.
observation of estate taxes causing liquidation
As you
or
tor
disposal of small businesses.
Proposes plan whereby indi¬
viduals could acquire tax exempt government bonds or life
insurance payable at death to cover estate taxes.
As
all know,
we
and has been for
ing down
the
the world is—
some
road
Socialistic
to
forms of government.
country
years—go¬
We in this
ment.
We
will
trend.
same
kid¬
are
be,
mit
here"—it
pen
is
their
hap¬
Of
call
FIFTH AVE. OFFICE
Fifth
Ave.
44th
at
year,
an
excuse
140
industry.
to,
into account
recent sales
on
If
it
have
would
claim
1
ings value. Their
MADISON
some
Cash
years—•
surer
way—
taxes.
works.
the
state
course,
it
how
Here's
cialist
In
a
the plants and
owns
so¬
of
government,
ma¬
chinery which produce the goods
by which people live.
believes
and
investing is
debt
is
nation's
are
that
a
that
floods
The
prices,
Socialist
and
wages
production, and there is no free
enterprise or profit system.
How
does
control of
Government
a
industry, unless it
get
con¬
England,
example,
for
the
tax load is and has been in excess
of the national income for
of 40%
it is growing
and
years,
heavier
Government.
Labor
her
under
and
define
term
my
explain that
am
forts has built up a manufacturing
or
processing business of
sort, either in the form of a
prietorship, partnership
held corporation.
some
BRUSSELS
$
.
569,365,278.04
Taxes
We
all
that
the
has
1932
average
has
done
ing
odds,
in
the
form
of
mounting income taxes. As
it
sequence,
has
impossible for
a
national
know
only too well,
various
continually try¬
governments are
our
of heavy and
increasing taxes, cer¬
industries that are essen¬
tial to the economy of a country—
such as railroads, utilities, steel,
coal—deplete their cash reserves
and
eventually fail to make a
As
I
been
tain key
profit. This does, not, of course,
happen all at once, as we well
know that even today under our
has
business
load
tax
in
general is still making money. But
a prolonged recession or a depres¬
sion—coupled with a fixed high
tax structure, which is necessary
to
support
deeply
a
entrenched
bureaucracy—can quickly bring a
nation to the point of bankruptcy.
No business can, of course,
nitely operate at
certain
later
or,
industries
whole
a
loss,
so
indefi¬
sooner
businesses
are
and.
confronted
to
man
I believe
years.
bulk
been
of
or
tioned, and essential to the coun¬
economy,
the Government
cannot allow it to fail, so the Gov¬
ernment buys it—by issuing bonds
try's
to its owners—and thereafter ope¬
rates
That
it.
business
then
no
cash
as
securities.
has
created
on
the
in
therefore
and
bricks and
busi¬
extent
per¬
with
a
come
so
in
mortar.
His
*An
Session
address
of
by
Tax'
the
are
Govern-
Mr. Hackett at 18th
Institute,
New
York
City, June 18, 1950.
<
Total
Deposits
.
5,061,745.28
V
16,777.40
.
.
.
.
.
.
.
$
.
fact,
.
.
.
.
.
.
$2,764,198,62:5.44
.
however,
he
.
.
.
principal invest¬
ment—an
interest in
a
closelyheld business. This is particularly
he
attempts
on
as
a
to
going
pass
the
concern
Dividend
from
provisions
of
exact
the
and
specific
Federal
Estate
Tax Laws and
Regulations as they
apply to the matter of valuing a
closely-held business interest. We
all
know
the
of
that
stock
year
an
if
in
such
one
a
.
.
.
.
373,969,698.02
2,335,396,907.60
.
150,000.00
15,627,990.27
11,045,844.08
Held for
.
3,000,000.00
1,409,836.56
.
Accounts
Payable, Reserve for
Expenses, Taxes, etc
39,226,339.18
54,682,019.82
Total Liabilities
actually
a period
after death, and if the
powers, to secure
LUTHER
intra-family in nature,
realized will establish
value. As a rule, partner¬
and proprietorships gener¬
ally terminate at the death of a
or
owner
and
thus
their
However,
public
moneys as
required by law, and for other
WILLIAM
CLEVELAND
purposes.
L.
KLEITZ
President
Chairman of the Board
DIRECTORS
GEORGE G.
Chairman of the Board,
ALLEN
Duke Power Company
WILLIAM
F.
W.
BELL
B.
President, American
Cyanamid Company
CHARSKE
Chairman, Executive
Committee, Union Pacific Railroad Company
W.
PALEN
CHARLES
GAWTRY
President, The
Copper Mining Company
W. KELLOGG
Chairman of the Board,
The M. W.
L.
KLEITZ
STUART M.
CRANE, JR.
President,
Crane & Co., Inc., Dalton, Mass.
CROCKER
President,
The Columbia Gas System, Inc.
JOHN
W.
of Davis Polk Wardwell
DAVIS
Sunderland & Kiendl
CHARLES E.
DUNLAP
President, BerwindWhite Coal Mining Company
GANO
DUNN
>
-
.
White
WALTER
S.
FRANKLIN
President, The J. G.
President,
President
Chairman of the Board,
Air Reduction Company, Inc.
C.
GEORGE
E.
CARROL
M.
POTTER
ROOSEVELT
SHANKS
The Prudential Insurance
EUGENE
Retired
of Roosevelt 85 Son
President,
Company of America
W.
STETSON
Chairman, Executive
Committee, Illinois Central Railroad Company
THOMAS J.
WATSON
Chairman of the Board,
International Business Machines Corporation
CHARLES
E.
WILSON
Engineering Corporation
.
Kellogg Company
CHARLES S. MUNSON
WILLIAM
M.
Company
Chairman of the Board,
Anaconda
MORRIS
Presbyterian Hospital in the City of New York
WINTHROP
Chairman of the Board,
The Great Atlantic & Pacific Tea
CORNELIUS F. KELLEY
WILLIAM
COOPER,
P.
LEWIS
JOHN A. HARTFORD
Chairman of the Board
CONWAY
arm's length transaction
tax value is established.
$2,764,198,625.44
Securities carried at $120,698,431.43 in the above Statement are pledged to qualify for
fiduciary
business
is
ships
partner
.
$
.
liquidated within
or
one
.
Payable July 15, 1950
Foreign Branches
J. LUTHER CLEVELAND
inequity I refer to lies in
or
.
Items in Transit with
to
his heirs.
far
.
4,582,146.19
the nature of his
the
$
.
.
.
$
dies
apt to single him out because of
The
73,969,698.02
Investment
J.
Eventually,
if
100,000,000.00
200,000,000.00
.
.
and at that point one of the many
inconsistencies of our tax laws is
business
.
Capital Funds
Less: Own Acceptances
today.
true
.
Foreign Funds Borrowed
Acceptances
in¬
long as he lives. He is,
the "wealthy" man of
price
eventually
.
Undivided Profits.
better-than-average
the
to sell out to
.
busi¬
the tax
forced
...
Capital
Surplus Fund
in most cases, provides him
ness,
one-by-one
key
12,228,767.04
LIABILITIES
represented by in¬
ventories, receivables, machinery,
industries. They are then squeezed
and
.
now
not
privately-owned
.
who
man
small
a
to the maximum
ness
and
remaining
.
Total Resources
mitted by law, and a good portion
of
his
accumulated
wealth
is
sale is
consequence
average
however, plowed any
earnings back into his busi¬
excess
heavier
a
The
has,
sold
as
.
Other Real Estate
listed marketable
or
interest
an
longer pays its share of the high
load and the load becomes
tax
Bank Premises
post-1932
largely
wealth, it is not in liquid form,
such
with
failure. If it is a key business
industry, such as those I men¬
.
26,431,867.56
9,680,999.69
8,275,345,91
con¬
by the development and operation
closely-held corporations,
partnerships and proprietorships.
.
tremendous
,
ever-
a
virtually
salaried
a
that the
say
wealth
consequence
a
constantly
.
.
Receivable
Real Estate Bonds and Mortgages
that you will agree with me when
ness
ing to increase it.
9,000,000.00
.
.
Accrued Interest and Accounts
so
sizable estate during
the past eighteen
As
billion is close to 30% of
income, and, as we
$60
61,464,029.09
in the face of serious and increas¬
of
our
Stock of Federal Reserve Bank
accumulated
who
since
estate
an
Business
of small
United
the
982,767,056.62
$
"
Small
and
know
individual
States, our
Federal, state and local tax load
in
Here
1,079,906,758.81
Other Securities and Obligations
Credits Granted on Acceptances
pro¬
closely
or
of course,
page
60th St.
127,081,009.29
Estate
accumulate
fiscates it?
In
first
referring not to the corner drug¬
gist or grocer, but to the man
who by his own initiative and ef¬
of
benefit to the
economy.
controls
state
saving
unnecessary,
and
good
paper money
Socialism
individual
that
at
CENTER OFFICE
Public Securities
should
higher of
AVE. OFFICE
Hand, in Federal Reserve Bank, and Due from
on
Banks and Bankers
busi¬
and
on
RESOURCES
I
easier
excuse,
Condensed Statement of Condition, June 30, 1950
business."
ROBERT
The Pennsylvania Railroad Company
Member Federal Deposit Insurance
W. WOODRUFF
President, General
Electric Company
Chairman, Executive
Committee, The Coca-Cola Company
Corporation
cases,
usually
OFFICE
PARIS
LONDON
"small business" and "small
much
the
Continued
Broadway
is
capitalized earn¬
a
to
nessman"
revolution
by the people electing Socialist
politicians to office.
There is a
they
potential threat
for
"small
there
in such
Rockefeller Plaza at 50th St.
by
I
value
or
Madison Ave.
or
Hackett
tax
as
that
by which the
that
say
book value
U. S. Government Obligations
Loans and Bills Purchased
T.
said
be
thumb"
authorities operate
I
c.omparison with
a
of
and
today destroying—
been
so-called
brought about
can
"rule
a
St.
"big business."
importance is the fact
are
but
evidence
to "fair market value."
a
pay¬
supposed
are
realized
and
over
company's
its
in
also take
ROCKEFELLER
tax load.
more
and
it, is not
ssarily
conclusive
again and again—ad infini¬
that taxes
n e c e
constitute
Guaranty Trust Company of New York
that taxes hold for
to
want
authorities
shares
of
a
power
its dividend
position
the price
execu¬
of
excess
after
as
So much for the
whatever
you
in
year
deficits
tum—our
Welfare State,
o r
earning
course,
to
governments
spend
incomes,
raise
The
Statism,
to
their
use
happening.
Socialism,
various
our
value—he
capacity, and the
The
of
business in this country if we per¬
say
book
years,
MAIN
continue
can't
choose to
and I maintain
the ultimate fate of big
when
"it
else, you
ing
it
schedules
its
relative
.
know, when the
administrator
than
in¬
be,
can
ding ourselves
we
all key
or
iness,
period of
taxing
taxing
shares of
corporations,
showing the net worth of the bus¬
its "fair market
of
higher
it.
That
following that
a
what
matter
when
government-owned,
Socialist state—no
are
have
you
call
are
Finally,
dustries
for
to
the sales price of listed
these factors do not of themselv***
value"—usually
must support that value with data
chances
the
as
closely-
a
competitive
no
question, to put it mild¬
authorities
in
is its "fair market
close corporation
a
interest
held corporation at what he feels
his heirs—as is oftentimes
or
case
interest
Vice-President and Trust Officer
under his
decedent's
liquidated and
or
continues to operate for the ben¬
efit of the deceased owner's es¬
SmaU
By
is
li
26
10
The Commercial and Financial Chronicle
(70)
will
It
A
Technique for
Decontrolling Rents
Assistant Professor
New York University,
A
the
as
of Economics,
on
liberalized
a
moderate
housing
come
long
control
low
and
in-
be defended so
serious housing shortage
prevails,
as a
can
is a difficult
understand
the
con-
a
tinuation
con
of
trol
for
luxury housing. For tenants
who
oc-
the
cupy
higher rent
units, few
claims
b«
could
made of
undue hard-
pediter
has
apartments
because
in two
gle
luxused
.
maximum of 80%
for
rent
an
and
the
brackets.
distribution
single
in
which
persons
by
The col-
1948.
of all families and sin-
had
persons
incomes
above
,
incl"stri s"
of the apart-
of $30
average
available
various
by
shows
may
give a maximum line of demarca,on tor luxury incomes It might
*>.e not^ that thls 15 at least three
'Imes "j® average annua income
w0^ers m
manufac uring
multiple unit structure containing 12 or more units, in which
ments
ship
if
they
had
to
pay
the lack of economic
nize
cation
justifi-
of
protecting the higher
income
groups
against rises in
rents, then rent control will continue to be handled in political
has
terms—as
been
with
connection
clear
so
the
New
in
I)er
statewide
Data
per
and which includes
services
in
the
'
or
Recommendation
by Housing
(2)
the
total
and
King County,
Washington, decontrolled:
defined
had
In 1947, out of
in
incomes
is
It
$10,000.
excess
doubtful
of
whether
major shift in this distribu-
any
individual
as
reports.
2,401,000
taxpayers in New
York State, 135,695, or 5.7% of the
approved
was
Expediter,
Seattle
tax
come
cleaning and painting,
Luxuries
York
(unfurnished)
room
month and up,
the
following
dwellings or apartments consisting of more than four rooms of at
Distingurshing Luxury From
which
Unfortunately, there is no sim-
feet
square
least
at
the
2
each,
equal to $25
per
or
Distribution
TABLE
All Units, by
and
Single
Unadj.
Percent of
Average
Average
all Units in
Dollar
Percent
Rent Groups
Amount
Increase
13.9
57
$6.83
Under
17.4
$1,000
21.5
62
5.31
36.8
23.7
Under $30 a month
9.8
16.0
3,000—
19.6
16.3
3,000 to
4,000
5,000_:—
18.4
$30-$49.99
16.7
2,000 to
17.7
$1,000 to $2,000
4,000 to
and
All
income
Median income
$2,840
$30-$49.99
includes
money income of
noninstitutional
population.
civilian
SOURCES:
of
Bureau
bution)
and
(adjusted
bution
.
the
Department
of Commerce,
(unadjusted distri¬
Council
of
Economic
distribution).
for
distri¬
SOURCE:
dent,
Economic
January,
JD50,
Report
p.
of the Presi¬
140.
Tenant-Occupied
Dwelling
Units
Rent,
1940,
New
Contract
Manhattan
York
Tenant-Occupied
Monthly Rent
Manhattan
Under $5
$5 to
N. Y.
273
on
14-—
25,432
107,247
20
to
24
60,073
165,267
25
to
29
61,345
193,269
30
to
39
City
Jacksonville
106,928
470,285
163,228
60 to
74
39,525
110,443
75 to
99
31,696
57,742
over
45,434
53,397
Not reporting
4,172
12,942
100
and
Total
SOURCE:
__
16th
542,034
Census
of
pp.
flects current building costs.
On
monthly basis, the amount spent
for
housing
was
equivalent to
a
$120.37.
Note
that
income
which
is
this
for
is
$2 405
a
an
year
above the suggested cut-off point
of $10,000.
It suggests a lower
monthly rent for those earning
$10,000., Nevertheless, this figure
gives us a good first approxima¬
tion for
ury
dollar definition of lux¬
a
housing.
36
9.08
30.2
46
7.09
37.7
<
11.6
39
11.37
somewhSt
higher
Francisco, so that
City figure would
what
higher.
On
might be suggested
of
types
Another
than
in
San
also
be
this
some¬
basis,
that
a
it
monthly
in
New
is
found
in
the
relative proportion spent for rent
in
a
moderate
income
family's
According
Labor
incomes
as
11
8.12
13.8
12.03 V
9.97
*
9
units
were
40.0
45.1
14.21
32
1.4
.
reported
as
38.5
13.84
25.8
follows,
effective
some
Rent Increase
Amount
Percent
$2.95
15.1
9.40
16.1
increase,
the
Dej949T°iled
for
tends to
groups
than
lower
smaller
be
income
if this
groups.
tendency
is
ratio is ap¬
plied to the $10,000 income, a to¬
tal of $1,300 or about $110 per
month
these
to
$150
for
obtained.
is
the
data,
a
some
of
of
$125
appears
to
margin of liberality.
A useful check
tion
light
cut-off point
as a
incomes
luxury
provide
In
estimate
month
for New
•
SOURCE:
or
the
on
York
distribution
this assump¬
City is found
of
Statistics.
apartments
tends
comes
be
to
previously discussed. Cer¬
families
or
individuals
tainly,
earning $10,000
or more a year—
the upper 5% or 10% of the income
distribution—can afford to pay the
economic costs
is
little
of
that
of
housing. There
said by way
for
subsidizing
be
can
justification
such income groups.
The importance of
using total
housing rather
amply
demonstrated during the past few
years.
Many persons have taken
expenditures
for
than cost per room has been
smaller
cost
sized
which
apartments
great deal per room in an
effort to hold down the total cost
of
a
housing. It is not infrequent in
housing
developments
for
new
prospective
much
renters
space
they
sum
of
this
the
for
a
inexorable
budget
average
situation
Moreover,
how
ask
buy
the
—
the
to
can
unavoidable.
substantial
de¬
pressed levels of rents in the New
York
ductions
in
in
the
substantial
per
cost
to
define
re¬
cost of
room
large apartments. The
room
before the
during and
area
resulted
war
of
use
the
a per
luxury
housing, would, therefore, exclude
that definition many of the
apartments occupied
by indivi¬
from
duals
or
families who would most
certainly be defined as in the up¬
per income groups. Because of this
consideration,
a
more
suitable
definition of luxury is in terms of
monthly rent for an entire apart¬
ment, rather than rent per room.
Logical Decontrol
The
most
logical
to decon¬
way
for two
(1)
of
hardshio
control
5%
reasons:
No justification
or
be
can
grounds
on
advanced
rents for those
to
in the top
10% of the income distribu¬
tion.
/,
*■;.
(2) As the housing situation is
alleviated, the
tendency is for
21.7
City,
44.9
26.7
39.8
For all of New York
only 3%
more
housing by
6% of the total, rented between
11.63
U. S. Bureau of Labor
of
rentals,
in line with the distribution of in¬
high rent housing to be
made available first, so that ten¬
monthly rents in the 1940 Census ants in that category are protect¬
of Housing.
(See Table II).
In ed against runaway rents.
Manhattan, 45,434 apartments
This second point has been sup¬
rented for $100 or over in 1940.
ported
by the experience with
This was 9% of the 542,000 ten¬
new housing and decontrol in the
ant-occupied
dwelling
units
in
past year.
A special study made
the borough. An additional 31,696,
of
in
7.8<;
by State-wide action; surveyed Aug. 15-Nov. 15,
distribution
experiencing a housing shortage,
is by releasing from control the
highest
cost
housing
and
then
slowly but surely lower the level
of controlled rents. This is logical
come
$75 and $99.
Decontrolled Aug. 5, 1949, by the
city council; surveyed June 15-Nov. 15,1949.
Decontrolled Aug. 5, 1949, by the
city council; surveyed June 15-Nov. 15, 1949.
Sept. 14, 1949, by the city council; surveyed
July 15-Nov. 15, 1949.
S.
ap¬
the
less
trol rents, in areas which are still
8.83
5
U.
for
significantly
propor¬
19.00
__
a
tion spent for rents by higher in¬
17.5
.
the
to
Statistics,
proportion
is
monthly
makes
the New York
housing
test
of
by
run
York City. In other areas, the cut¬
off point will be lower.
29.3
—0.4
$200
is
1%.
The
limits
$125-$150 the Dividing Line
Housing costs in New York
other
city
designated
24.4
®
States,
114, 132.
and
advertisements
York
"Times"
showed
a
in
from
the
1945
substantial
of the
to
New
1950
increase
in
and
64
were
63
aoartments the
number of apartments adver¬
rented for more than $100 while a
tised for rental. For Manhattan, of
similar proportion rented between
the 16 apartments offered for rent
$75 and $99 a month.
On a na¬ on
Sept. 1, 1946, six were offered
tional basis, the Federal Reserve
at $150 or more per month and
Board has estimated that only 2%
nine had no price.
By March 5,
of the non-farm families who are
1950, there were 230 offers of
tenants paid $100 and over per
apartments in Manhattan, of which
month
in
1948 and 1949.
73
7 Decontrolled
1,724,776
United
1940, Housing Vol. Ill, part 3,
6
1949,
12.75
2 Decontrolled June 14, 1949.
by the city council; surveyed May 15-Nov. 15, 1949.
3 Decontrolled June
23, 1949, by the city council; surveyed Apr. 15-Nov.
15, 1949.
4 Decontrolled
July 16, 1949, by the Housing Expediter; surveyed May 15Nov. 15, 1949.
5
house
a
5
Houston
.
purchased in
hence re¬
of
cost
September,
18.7
Units
339,765
42.794
the
34.2
Topeka
71,748
This covered
7.04
Spokane
59
$1,444 for housing.
6.24
Dallas
49
an
45
Knoxville
to
covers
66
45.273
50,027
to
It
of September, 1949.
income of $12,405. An
as
10.2
additional
19
50
The
latest budget for a family of four
is available
25.8
15, 1949.
to
40
Francisco.
6.41
over
15
Lake
San
-3.59
Percent of
Salt
of
52
18.1
over
10 to
-
city
34
1.0
month
after Nov.
the
3.4
5,236
time
exec¬
an
utive family prepared by the Hel¬
ler Committee of California for
10.9
<
bbZ
2,587
9
budget for
ignored and the 13%
12.0
a
increases
found in the
Nevertheless,
,
than
is
the
more,
entire
year
indication
16.7
9.0
month and
useful
A
16.0
8.3
or
indi¬
per
earning $10,000
more.
26.9
46
a
by
*
or
6.46
20.3
1 Rent
viduals
paid for rent
6.66
33
City
be
6.07
21.8
10,000
at
This
more.
very few of the apartments
in the other boroughs rent at $200
con¬
Our next problem is how much
would
48
10.5
$50
Dwelling Units
1940
are
we
47
$30-$49.99
City
17.0
10.5
or
Since
which
with
7.8
Under $30 a month___
and
6.32
about
were
renting
equal to
apartment out of every 50 in
Manhattan, or 2% of the total.
cerned.
28.7
6.25
month
nition
12.9
month
area.
one
4.89
-
there
apartments
timate' would be close enough for
the purposes of reaching the defi¬
45
53
Houston Area 3
City
the
significantly smaller.
A recent special study of luxury
housing in Manhattan estimated
that
luxury in¬
Such a "guess¬
19.0
44
a
distribution
27.5
month
month and
recipients.
,
as
5.71
27
a
come
income
17.87
6.6
$50
classified
46
Lake
$30-$49.99
the
be
47
:
11.9
Under $30 a month
Distrbiuted by Contract Monthly
in
New
event, the top
any
10%
must
in
proximately 13% of the expendi¬
tures of a family earning about
$3,000 a year is spent for rent.
Studies of expenditures show that
Topeka7
TABLE II
In
reside
55.6
98
Under $30 a month
$30-$49.99 a month
$50 a month and over
ing of income in the Bureau of the Census
survey.)
City.
state
36.7
8.2
Jacksonville Area 6
under-report¬
the
in
York
14.27
__
of
be
since about half of the resi¬
dents
10.99
$30-$49.99 a month
$50 a month and over
Advisers
(Adjusted
estimate
resi¬
58
8.7
a
month and
by
Cny, uie pro¬
75
'•
2.3
a
xork
budget.
over
Salt
Census,
after
Is
the
10%
earned
was
New
Bureau
City5_.__...
Under $30 a month
$3,420
$50
♦Income
_
Under $30 a month__-
100.0
100.0
groups
in
of
10.3
over
York
raised
all
which
tne
£-3.1
4.7
_
taxpayers had incomes
of
13.96
2.4
_
10%
59
21.6
month and
than
less
9.53
41.4
a
New
been
es¬
City
6.08
Under $30 a month-
month__,
the
if
apartments
renting between $75 and $99 had
State.
York
56
$30-$49.99
$50
somewhat
New
41
13.6
Spokane4
York
safe guess to
a
in
4.3
....
21.2
over—
that
16.7
over
15.1
a
New
in
Even
was
13.6
month.__
11.1
5,000 to 10,000
10,000
a
$50 a month and
Dallas Area 3
timate
25.7
Knoxville2
Distrib.
is
$10,000
rent of $125 to $150 will mark the
Rental Units
Persons
in
It probably
tory guide to the present distribu¬
in¬
wnn
dividing line between luxury and
for ail
Adjusted
Distrib.
City, 19491
Percent Incr.
% i>f all Families
and
Rent Group,
Units Reporting Rent Increases
by Income Level, 1948
Classes
not avail-
are
(Rental Dwellings with Kitchen Facilities)
Single Persons not in Familes/
♦Income Size
personal
III
Changes in Residential Rents, by
Families
of
total
Comparable data
One of the significant
TABLE I
basis,
a
per
month furnished.
be used to set apart that type
-
Thus, on
1947, to $211.7 billion in 1949, or
rise °f *ess ^an 10%«
month
per
higher than
income rose from $193.5 billion in
was
per room
has taken place.
national
a
for
rent
room
$35
con-
bedrooms,
maximum
unfurnished
which
pie definition of "luxury"
of housing.
comes
100
taining
Non-Luxury
can
tion developed in 1948 or 1949 although some increase in total in-
least
State law.
of
executive with that income spent
.Mate wide oat a
Data are no* available by states
cities on a comparable basis,
the economic cost of such housing, rental:
elevator, switchboard, re- However, data are available on a
Yet, if we are unwilling to recog- ceiving room, utilities, house- statewide basis from Federal inJules Backman
families
excess
Bu¬
It is in¬
portion could not be much above
I
who
luxury in¬
$10,000 in 1948. Such a small proportion of families with an income in excess of $10,000,.suggests
that this figure would certainly
some
A
a
tion
of
in
the
that the 1940
provides a satisfac¬
ing the breakdown above $100, it
is clear that the proportion rent¬
ing between $125 and $150 would
distribu¬
umn
decontrol:
to
proportion
comes
to
therefore,
State
are
income levels
(1) Alleghany- County
Rent
Advisory Board on Oct. 24, 1949
resolved
distribution
dicated,
or
that 4.7%
shown below:
cases are
1940, according
of Labor Statistics.
reau
relatively
high dollar incomes, the following
emerges.
In New York City, the
York
of families
their
of
since
we
illus¬
dents
having
as
Data
Table
definitions
The
status.
ury
If
an
witn
area
an
as
6% for the entire city. While de¬
tailed data are not available show¬
income
.
decontrolled
tration of
cities.
City
individuals
The Office of the Housing Ex-
justifica-
tion for
to make in
one
York
excess
of
"adjusted distribution" gives
the estimates of the Council of
Economic Advisers after allowing
f°r their estimates of under-reterms porting of income in the Bureau
to its
Census data. This table shows
of any precise definition as
characteristics.
to
individual
of incomes for families and single
control, therefore, is how to determine the line of demarcation
between luxury and non-luxury
apartments. Such a determination
However, it is
New
show estimates of the distribution
problems in connection with rent
difficult
for
take
Thursday, July 6, 1950
.
$10,000 per year. Even if every
$10,000 or over income in New
defined
comes.
high-rent housing is being made available first. Concludes
such sliding-scale program will effectively eliminate rent con¬
trol, which does not belong in a peacetime economy.
for
able
.
to
the
$100 class,
is not probable, the total
proportion renting at $100 would
be only 15% for Manhattan and
.be
more
Rent
most
spent for rent by those
most logical way to de-control,
gradual release from highest to lowest cost units. Argues
wealthier tenants are protected against runaway rents because
basis
to
tion and the proportion of income
luxury dividing
as
approach
satisfactory
approach in terms of establishing
objective standards for decontrol
of luxury housing, is found by an
examination
line, Dr. Backman suggests
room.
apartment.
per
believe
I
decontrol
per
is found in terms of the
rent- paid
School of Commerce, Accounts and Finance
Suggesting $125-$150 monthly urban rental
that
noted
feasible
more
decontrol
Dr. JULES BACKMAN
By
be
in terms of rental
was
.
Small New York Rent Rises
Rents
risen
in
only
New
York
6.1%
(102.6
City have
to
108.9)
were
showed
at
no
apartments
$150
or
price;
offered
more
there
between
Continued
$100
on page 43
Volume 172
Number 4922
.
.
The Commercial and Financial Chronicle
.
(71)
if for any reason a business inter¬
Estate Taxes Are
Destroying
is not
est
efit
causing liquidation
As
all
we
and has been for
ing down
payable at death to
know, the world is—
the
some
road
years—go¬
Socialistic
to
forms of government. We in this
country
"fair
its
of
or
tor
or
administrator
I
.
when
a
what
iness,
ing
taxing
all
else
choose
you
to
be,
can
and
maintain
I
be, the ultimate
fate of big
when
continue
"it
can't
say
raise
happening.
Socialism,
Statism,
The
Welfare State,
call
it,
is
W.
T.
Hackett
I
of
the
of
a
easier
and
Here's how
state
surer
way—
it works. In
the
so¬
a
of
government,
owns the plants and ma¬
chinery which produce the goods
by which people live.
Socialism
course,
believes
individual
that
saving
and investing is unnecessary, that
debt is good and that floods of
paper
money
nation's
state
are
a
benefit to the
Socialist
The
economy.
controls
production,
enterprise
How
prices, wages and
there is no free
profit system.
a
Government
get
and
or
does
control of
industry, unless it
con¬
for
England,
the
example,
tax load is and has been in excess
of 40% of the national income for
FIFTH
Fifth
should
some
first
define
nessman"
and
term
my
"small busi¬
explain that I
am
referring not to the corner drug¬
gist or grocer, but to the man
who by his own initiative and ef¬
Government.
United
States,
our
billion is close to 30%
$60
national
our
income,
and,
of
we
as
know
only too well, our various
governments are continually try¬
ing to increase it.
As
of heavy and
consequence
a
increasing taxes, cer¬
tain key industries that are essen¬
tial to the economy of a country—
such as railroads, utilities, steel,
constantly
coal—deplete their cash
reserves
and
eventually fail to make a
profit. This does, not, of course,
all
happen
know
that
at
once,
load
tax
general is still making
a
as
we-., .well
today under our
even
tremendous
prolonged recession
business
money.
in
But
depres¬
or a
sion—coupled with a fixed high
tax structure, which is necessary
to support a
deeply entrenched
bureaucracy—can quickly bring a
nation to the point of bankruptcy.
No business can, of course, indefi¬
nitely operate at a loss, so sooner
or.
certain
later
whole
businesses
industries
AVE. OFFICE
Ave.
140
Madison
are
and
confronted
business
longer pays its share
the
and
then
no
of the high
load
becomes
consequence
oni the
privately-owned
key
industries. They are then squeezed
one-by-one
forced
*An
Session
to
of
and
eventually
are
sell out to the Govern-
address
by
Tax'
at
PARIS
Ave.
at
BRUSSELS
Mr. Hackett at 18th
Institute,
New
York
City, June 18, 1950.
RESOURCES
Cash
Hand, in Federal Reserve Bank, and Due from
on
Banks and Bankers.
U. S. Government
$
Obligations
569,365,278.04
1,079,906,758.81
982,767,056.62
Loans and Bills Purchased
Public Securities.
$
Stock of Federal Reserve Bank
.
61,464,029.09
9,000,000.00
.
9,680,999.69
.
.
12,228,767.04
prietorship, partnership
held corporation.
on
Receivable
pro¬
closely
or
Obligations
Acceptances
8,275,345,91
Real Estate Bonds and Mortgages
127,081,009.29
;
Taxes
all
know
individual
Small
Business
that
since
the
has
who
estate
an
and
accumulated
1932
has
in the face of serious and
average
done
it
has
impossible for
a
been
that
say
bulk
of
man
to
wealth, it is not in liquid form,
cash
as
securities.
has
listed
or
however, plowed any
earnings back into his busi¬
to the
ness
maximum extent per¬
mitted by law, and
of
his
$
..............
Total
a
good portion
.accumulated
wealth
100,000,000.00
200,000,000.00
Undivided Profits.
.
.
73,969,698.02
.
Capital Funds
.
'
$
.
Deposits
150,000.00
$
Investment
15,627,980.27
$
............
11,045,844.08
4,582,146.19
.
Dividend
373,969,698.02
2,335,396,907.60
.
Foreign Funds Borrowed
Acceptances
Less: Own Acceptances Held for
marketable
has,
excess
Capital
Surplus Fund
The
average man who
interest in a small busi¬
an
ness
16,777.40
$2,764,198,625.44
LIABILITIES
post-1932
wealth
such
5,061,745.28
.....'
.
Total Resources
con¬
sizable estate during
the
.
evera
the past eighteen years. I believe
that you will agree with me when
I
;
Other Real Estate
so
virtually
salaried
a
......
increas¬
ing odds, in the form of
mounting income taxes. As
sequence,
Bank Premises
Payable July 15, 1950 ".
Foreign Branches
Accounts Payable, Reserve for
Expenses, Taxes, etc.
.
3,000,000.00
1,409,836.56
.
Items in Transit with
39,226,339.18
.
is
54,682,019.82
therefore
now represented
by in¬
ventories, receivables, machinery,
and
bricks
and
Total Liabilities
His busi¬
mortar.
in most cases, provides him
ness,
with
a
come
so
Securities carried
better-than-average
in¬
long as he lives. He is,
the "wealthy" man of
in
fact,
today.
$2,764,198,625.44
fiduciary
LUTHER
J.
Eventually,
at
8120,698,431.43 in the above Statement
powers, to secure
public
moneys as
are pledged to tjualify for
required by law, and for other purposes.
WILLIAM
CLEVELAND
L.
KLEITZ
President
Chairman of the Board
however, he dies
point one of the many
inconsistencies of our tax laws is
and at that
apt to single him out because of
the nature of his
ment—an
in
closelyheld business. This is particularly
true if he attempts to pass the
business on as a going concern to
The
the
a
-
from
provisions
of
exact
the
and
specific
Federal
Estate
Tax Laws and Regulations as
sold
of
sale is
F.
W.
BELL
B.
President, American
Cyanamid Company
CHARSKE
if such
in
one
a
actually
CHARLES
year
an
and
not
the
a period
after death, and if the
arm's length transaction
intra-family in nature,
price
realized
will
President, The
M.
ally terminate
partner
or
at
owner
the
death
and
tax value is established.
thus
of
Copper Mining Company
W. KELLOGG
Chairman of the Board,
The M. W.
L.
CHARLES
S. MUNSON
KLEITZ—-
STUART
GEORGE
E.
President,
System, Inc.
CARROL
M.
of Davis Polk Wardwell
EUGENE
W.
THOMAS
J.
M. CROCKER
The Columbia Gas
JOHN
W.
DAVIS
Sunderland & Kiendl
DUNLAP
President, BerwindWhite Coal Mining Company
CHARLES E.
GANO
DUNN
,
-
White
WALTER
S.
C.
CRANE, JR.
Crane &
FRANKLIN
The
....
President, The J. G.
their
Company, Inc.
POTTER
Retired
ROOSEVELT
SHANKS
The Prudential Insurance
of Roosevelt & Son
President,
Company of America
STETSON
Chairman, Executive
Committee, Illinois Central Railroad Company
WATSON
Chairman of the Board,
International Business Machines
CHARLES
E.
WILSON
ROBERT
W. WOODRUFF
Member Federal Deposit Insurance
Corporation
President, General
Electric Company
Chairman, Executive
Committee, The Coca-Cola Company
a
However,
President
Chairman of the Board,
Engineering Corporation
President,
Pennsylvania Railroad Company
Kellogg Company
.
Air Reduction
WILLIAM
President,
Co., Inc., Dalton, Mass.
Company
Chairman of the Board,
Anaconda
MORRIS
Presbyterian Hospital in the City of New York
WINTHROP
establish
the tax value. As a rule, partner¬
ships and proprietorships gener¬
CORNELIUS F. KELLEY
WILLIAM
COOPER
P.
Chairman of the Board,
The Great Atlantic & Pacific Tea
Chairman of the Board
PALEN CONWAY
business
is
W.
LEWIS GAWTRY
JOHN A. HARTFORD
Chairman, Executive
Committee, Union Pacific Railroad Company
liquidated within
or
one
that
stock
WILLIAM
J. LUTHER CLEVELAND
inequity I refer to lies in
far
Chairman of the Board,
Duke Power Company
ALLEN
G.
principal invest¬
interest
his heirs.
DIRECTORS
GEORGE
Corporation
earn¬
pf course,
page
60th St.
50th St.
.
know
a
on
Accrued Interest and Accounts
the
as
Rockefeller Plaza
Credits Granted
some
or
heavier
excuse,
MADISON AVE. OFFICE
processing business of
sort, either in the form of a
or
We
usually
capitalized
a
is
the
higher of
OFFICE
Broadway
St.
44th
at
forts has built up a manufacturing
all
That
remaining
they
the
26,431,867.56
Estate
there
in such cases,
Continued
.
to its owners—and thereafter ope¬
load
book value or
c.omparison with
a
value
tax
as
that
by which
that
say
ings value. Their
.
they
apply to the matter of valuing a
closely-held business interest. We
tax
claim
Other Securities and
failure. If it is a key business
or industry, such as those I men¬
tioned, and essential to the coun¬
try's economy,r the Government
cannot allow it to fail, so the Gov¬
ernment buys it—by issuing bonds
it.
recent sales
would
.
with
rates
shares and
on
said
thumb"
authorities operate
I
.
As
Labor
the
price realized
LONDON
years—•
of
in
to,
of
ROCKEFELLER CENTER OFFICE
business."
Federal, state and local tax load
Here
is growing heavier
it
her
under
supposed
are
be
can
-W,
,
of
excess
has been largely created
by the development and operation
of small closely-held
corporations,
partnerships and proprietorships.
and
years,
industry.
it
"rule
a
Condensed Statement of Condition, June 30, 1950
for
"small
accumulate
fiscates it?
In
company's
its
also take into account
course,
.
the
in
If
a
potential threat
"small business" and
revolution
taxes.
„
in
today destroying—•
been
so-called
by the people electing Socialist
politicians to office.
There is a
cialist
spend
are
have
and
not
or
much
over
again and again—ad infini¬
that taxes
brought about
by
power
and
position
authorities
that taxes hold for "big business."
Of more importance is the fact
ssarily
n e c e
to
So much for the
to
want
evidence
Guaranty Trust Company of New York
tum—our tax load.
whatever
you
conclusive
use
is
o r
earning
capacity,
The
taxing it
their incomes, year after year, and
their deficits as an excuse to
hap¬
here"—it
pen
constitute
to "fair market value."
in¬
key
ding ourselves
we
its
relative
business in this country if we per¬
mit our various governments to
kid¬
are
value—he
that value with data
MAIN
That
will
value"—usually
book
period of years, its dividend pay¬
market
schedules
than
showing the net worth of the bus¬
chances
by the
purposes
for
to
these factors do not of themselves
higher
no
call it.
are
trend.
We
have
you
raised
as
the sales
price of listed shares of
competitive
corporations,
but
must support
question, to put it mild¬
be
closely-
a
is its "fair market
es¬
As you know, when the execu¬
government-owned,
Socialist
state—no
are
matter
following that
same
Finally,
dustries
will
a
in
estate taxes.
cover
ment.
that
involved—the
in the decedent's estate.
Proposes plan whereby indi¬
could acquire tax exempt government bonds or life
insurance
owner's
interest
held corporation at what he feels
the ben¬
close corporation
a
value"
disposal of small businesses.
viduals
where
is
ly,
of small business. Cites instances
taxes
deceased
authorities
Asserting high taxes, because of their confiscatory effect, lead
to socialism, Mr. Hackett cities current heavy estate levies as a
estate
case
are
The Huntington National Bank, Columbus, Ohio
under his observation of
the
decedent's
liquidated and
or
his heirs—as is oftentimes
interest
Vice-President and Trust Officer
series factor in el.mination
or
the
T. HACKETT*
W.
of
tate
Small Business
By
sold
continues to operate for
11
26
i
12
The Commercial and Financial Chronicle
(72)
A Realistic
country, can all have real security
if we are willing to worn for 11
Approach
To Economic
Security
By LOUIS W. DAWSON*
programs
that the 1950s will
go
ture and
that will
not
Tax Is Restored?
disrupt the
what
security
can
effects
we
By WILLIAM
can we
will
it
have
on
Basic
Newhard, Cook & Co., Members New York Stock Exchange
Though stating reinstitution of Excess Profits Tax would sub¬
the
stantially lower current corporate profits, Mr. Witherspoon
holds it is reasonable to expect, if such tax is restored, it would
allow for "inter-war" depreciation of dollar and at least double
Necessity
of
Solvency
The
necessity of solvency in a
family, business or nation is basic.
In the final analysis, our ability
to pay
out under and security
program depends on our ability
to
keep
abreast
of
production
reasonably
our payments.
of corporate
amount
It
has
been
said
no
have changed
the form
in
United
States,
the
greatly
This is in
was
probably
inevitable, betain
and
of
cer-
trends
of
events
recent years,
One
ed to
ident. The
importhe
been
tremendous
of
movement
the population
W.
Louis
Dawson
from tne rural
areas
cities.
the
In
country,
to
the
early days of this
of our population
90%
essentially a farm population,
Today only slightly more than
was
10% remain
the farm.
on
What-
life
on
the
income and employment depends
largely
upon factors beyond his
individual control. So he feels he
must build his security as he goes
along, from other
sources.
Thirdly, the need for security
has been impressed upon the public by the awful spectacle of two
world wars within a generation,
fourth
A
has
factor
been
the
The
other
,,
.
...
-
.
lengthening life
factor
span is anhas
focused
that
Many of the social reforms of
+jje iast
15
have been ad-
years
mirable, and have achieved a
public attention on the importance grea^ advance in social welfare,
©f. security.
People are hving
the danger is that we may
longer; the population as a whole not clearly perceive where to
is aging.
This creates new eco- (jraw the line. In our desire to
nomic problems, not only for those
alleviate the sorrows of our felwill
who
reach
soon
advanced
bqt for younger members
lbes on whom the
°fi reir
©ldsters
become dependent,
may
Process
of
Leveling Incomes
In the last generation there has
been
individual.
young people of the nation
The
should
be
with
concerned
this
who
particularly
will
trend, since it is they
really feel its full ef¬
fects. If we give to an aging popu¬
lation goods that they cannot earn,
and
which
must
be
paid for out
of future production, where can
the burden fall but upon the back
of the young worker?
Where can
the money come from but
roll and his tax bill, and
his
pay¬
in such
event, how can it help but lower
and his family's income and
his
standard
of
living?
Where
does
the threat to the will to strive and
ing, it is not for themselves. It is
and for the unborn,
upon whom the full penalty will
for the young
•
15,1950.
»•***•■
-
I.
W
^
J*.
*
4
f
Chicago,. 111.,
t
V-K
V
V* A
»
|
a s-
tounding assumption,
especially in
the
of the
use
on-#
with the accompanying monetization of a tremendous debt.
This
be
expected
laws
with
of
least
at
justice,
en¬
some
would
re-
impose the old EPT law without
modifications, which would
flagrantly abrogate justice?
proper
so
A more
ing
equitable
revenue
war
would
means of rais¬
partially to pay for
be through the per¬
sonal income tax.
fect
all
This would af¬
rather
persons
almost inarticulate
group,
It
than
an
minority
the stockholder.
is
dangerous,
of
course,
to
®xPress a*J opinion as to a future
£^10n
of
war
Congress under the stress
conditions.
However, it is
for the investor to de¬
necessary
termine the
probable course that
legislation would take in
such tax
the event of
war.
If it is concluded
that corporate taxes will be
fiscatory
should
relatively
or
hold
not
so,
many
or
con¬
he
any
equity securities. However, if he
feels as the writer does, that tax
comparison with
dollar earnings in the prewar pe¬ legislation will have at least some
semblance
of
justice,
he
will
riod
loses
its
significance.
In
choose to hold equities. Hence, it
order to achieve a semblance of
has seemed opportune to set forth
justice in the use of the average
the general concept of this matter
earnings base of exemption, this
as it appears at the present time.
figure would have to be doubled.
In summary,
If it is doubled, average corporate
therefore, it would
has
depreciated the value of the
dollar
so
t&at
earnings
would
twice
during
be
as
any
another
somewhat
large
as
more
during
war
than
World
excess
be
enacted
hostilities,
War H.
Not
reasonable that
seem
an
so
much
change would have
to be made in the invested capital
would
some
sort of
profits tax law would
in
the
for
of open
event
that
but
allow
such
the
a
law
"inter-war"
depreciation of the dollar and al¬
low at least double
capital.
Therefore,
from
this
standpoint corporations might be
Midwest Stock Exchange.
expected
to
earn
substantially
more dollars, even though the ex¬
turning back to the un¬ cess
profit taxes were reinstituted
successful, authoritarian, totalita¬ without
any change in the formula
rian systems of ages past and
for exemption.
of
take
abandon
the great concepts upon
this country was founded.
which
If
we
are
to be
a
country chiefly
It might be said that corporate
income taxes would be increased,
but these
engaged
.
Association,
acting
semblance
rather
it
decree.
were imposed only upon
in taking care of the
that portion of income subject to
aged, the disabled and the shift¬
exemption from the excess profits
i0wmen, we may move too fast, less, without those limits which
an(j—what may be much more prudence counsels, it can only be tax. Therefore, it would take quite
a
substantial increase in the in¬
important—in the wrong direc- done at the expense of the popu¬ come tax rate to make
decided in¬
Iowa Pool, The: Study in RaiLlation as a whole — particularly
tion.
the young, active and struggling roads into overall profits.
road
Competition,
1870-84—Ju¬
The danger signals that indicate part of the
The reinstitution of the excess
we may
population. How can
be moving too fast are
lius Grodinsky—The University of
tax would substantially
evident in the budget deficit, the anyone who has experienced, or profits
lower corporate profits from cur-' Chicago Press, 5750 Ellis Avenue,
inability to control actual outlays, observed, the,struggles of a young
married couple to maintain a de¬ rent levels. From the point of jus¬ Chicago 37, 111.—Cloth—$4.00.
and the progressive increase and
...
__
lli^dbrwriters
could
back
cut
Congress^ committed to
emptions,
a
be
fall if we make the dreadful mis¬
a
leveling out of incomes,
through arbitrary adjustment of
compensation levels,
and as
a liberalization of various kinds of cent home and give their children
the things they need, lightly take
result of steeply
graduated income government guarantees and subtaxes. Whether this, on balance, sidies. We cannot fail; to be sus- away the fruits of their work?
<
will be a good or bad thing for picious of the soundness of an era
Rising Productivity Needed
the country, remains to be seen: of prosperity that is so largely
But since the rewards for effort supported
Rising productivity will, in the
by easy money, confuture as in the past, enlarge our
are no longer so high, there has stantly
expanding consumer creddeveloped, it seems, a greater end it, government deficits, extrava- capacity to give a higher standard
greater tendency to settle for se-, gant and growing government of living for the worker and pro¬
vision of additional benefits for
equity.
guarantees, and, increasing govthe aged and other nonworkers.
In view of the trends ani devel- nrnmeht subsidies. Somewhere the.
We can, with optimism, count on
opments I have just described; it Hne must be drawn, or we face
this process. But in judging the
.» '
'.
either the destruction of the. value
J ?Jr' ^-be,orc^ of the ■ dollar, or such heavy taxes ability of the country at this time
Annual■ Meeting, ot
the. ( bcajo
L-fe
A,i-v
•
to pay for additional security pror
.
then
a
would
Congressional
the dollar cor¬
formula for exemption.
economically justified, work
Consider
fall but upon him and his
the expansion in the invested cap¬ porate profit which existed during
No crueler trick can be played on
the last world conflict.
young
fellow - producers?
And ital base
any people than to hold out false
during the postwar years.
Where does the threat of the cen¬
hopes of security that can never
Corporations using this method
tralized, totalitarian state over¬ have
be attained.
poured millions of dollars
With Morrow & Co.
hang, but upon the young of this into
the erection of plant facilities
I see nothing political in this
(Special to The Financial Chronicle)
generation and the children yet
question of basic philosophy. Unduring the past five years and this
unborn?
CLEVELAND, Ohio—Ralph M.
derneath all partisanship is the
expansion in certain companies
When those who have largely
Callaghan is with Morrow & Co.,
and industries has more than dou¬
question of our individual beliefs
lived their lives cry out in warn¬
Hanna Building, members of the
bled the prewar value of invested
*n wbat vwe want our country to
'
«
How
society in gen¬
as an
rates
through
that
ex-
were never
public's vivid recollection of the J,° anc*
how our objecagonies and degradation caused *lves can best be ac eved.
great depression of the Great Advances in Social Welfare
2 930s
nity
wage
however, is
It is for
his freedom of choice and his dig¬
no
mulas for cal-
average earn¬
principles and concepts to which
eral.
When they outrun produc¬
ings
base of
has arrived after centuries
tion, they lower the standard of
1936-1939 as
of struggle.
\
living for the producers of a so¬
one method of
In
approaching this problem,
ciety. They tend also to reward
William Witherspoon
calculating the
we must put from our minds the
the idle and penalize the produc¬
idea that the government, private
exemption. If
tive. Thus, unless carefully con¬ this basis were
used, the calendar
business, unions or anyone else
trolled, they deaden initiative and would be turned back 12 y2 to 13
can give us security.
Security is
the will to work.
And lastly, if
years. This is an exceedingly long
something that must be earned—
plan is piled on plan without re¬ time to look backward and from
whether it involves an individual
straint, they vest economic power an economic standpoint the inter¬
or a nation Once that principle is
over the entire citizenry in a cen¬
vening developments have made
recognized, it then becomes evitral government, leading finally to it even
more remote.
During that
dent that the benefits of any se- a totalitarian
state. Under such a
time, the United States has en¬
curity program must bear some
system, man soon begins to lose gaged in its most expensive war
sensible relationship to what the
country can afford.
t
farm may have entailed, it did ofYou men and women, as life
fer security. A farmer was rarely, underwriters,
know • better, than
if ever, "out of a job."
So mil- anyone, that you can give an iriJions of people who left farms to dividual only an amount of life
work for wages felt the need for insurance
that his income will
some element that would replace permit him to carry.
If you give
the security of farm life.
him more than he can afford, he
A second factor has been the will probably, in the course of
effect of the technological revo- time, end up with no protection
lution. The machine age and the at all.
development of large industrial
The same thing is true of any
organizations have changed our nation that undertakes programs
Way of life. The average citizen it cannot afford. History is reno longer has the security given
plete with examples of governby possession of his own small ments that have gone broke trybusiness. The continuance of his ing to make good on promises that
disadvantages
ever
have
culating
highly desirable objective—from
this very reason that they should
an
economic, as well as social,
be approved with care and wis¬
standpoint.
Our problem is to
dom.
In their cumulative effect
satisfy such aspirations and yet
such plans tend to constitute an
be sure we retain the most solid
on
use
of the old for¬
degree, our sense of values.
excessive drain
war
grant-
powers
man
tent trend has
/
our
impaired and he would
way of improving his
position for the duration of hos¬
the Pres¬ tilities. It cannot be expected that
conformity with the
and thus soften the abruptness of
less fortunate fellowmen.
security
cause
of
reduction in wage rates, the
of
the
stockholder is
ing
position
of major hostilities.
aspirations and, to a great
declines in production. They ful¬
And,
fill for many of us our very deep
Tne growth of no honest man can gainsay the
and human desire to care for our
this desire for fact that "security for all" is a
peal
excess
profit taxes will be reinstated at
mand
curity above all else" reached its heavals
profit permitted during last conflict.
that
the outbreak
wonder that the public deIt is
true that security plans
for planned security has
may tend to stabilize the income
steadily increased. These vast upof great numbers of consumers,
is
WITHERSPOOJtf
Statistical and Research Department
sounaiy
economy?
heavy taxes court economic ruin.
down in history as the uecade in
which the public demand for "se-
What If Excess Pzofifs
a.ford?
acquire
it?
What price are we willing to
pay? Who should provide it? And
sidies. Warns further reduction of dollar's value and continued
I suspect
do
that
stages
country's economy. Some of the
important questions involved are:
How fast
should be founded on eco¬
nomic and sociai principles and not on political issues, life
insurance executive calls for realistic approach based on indi¬
vidual needs and country's ability to pay. Denounces extrava¬
gant pledges that might disrupt nation's economy.. Sees danger
signals in budget deficits, in inability to control actual outlays,
and excessive liberalization of government guarantees and sub¬
Asserting social security
by
Thursday, July 6, 1950
.
extravagantly pledge the fu¬
How much
President, Mutual Life Insurance Co. of N. Y.
•
it
obtain
and
not
..
COUrt" economic. FUin.\
as
1
I*
am
-
t
*
confident that
-
-
—
•
*
J
.1
'.r,
,
■,
we.
in this
t
_
_
.
Continued
on page
25
tice
between
stockholders
and
Operating Results of Depart¬
laborers, such a tax would be un¬
fair. During this postwar period, ment and Specialty Stores in 1949
labor has received substantial in¬
creases
in wage rates, either di¬
indirectly, and the stock¬
holder's
position has also been
materially improved through
larger dividend payments. Gen¬
erally speaking, it would seem that
these two groups of persons, have
fared about equally, well, com¬
paring one with the other. If, now,
earnings and dividends on equity
rectly
or
investments
1930
are
reverted
levels, without
a
to
the
—F. L. Foster, Jr.— Harvard Uni¬
versity, Graduate School of Busi¬
ness
Administration, Division of
Research,, Soldiers Field. Boston
63, Mass.—Paper—$5.00.
Our
Money
and
tho
National
Defrt—George R. Kinzie—School
of Business Administration, Bradley. University*
correspond- Paper.
*
-
*
Peoria
;
*
5,
111.—
Volume 172
Number 4922
.
.
.
The Commercial and Financial Chronicle
country. Our job is to foster the
government interference, and the
lations firm of Ivy Lee and T. J.
Ross. There has been a great deal
flow
growing
of comment about the program
tem, into the bloodstream of busi-
who
ness
enterprise. Without our busi¬
to
capitalize
industry, it
would be necessary for the gov¬
ernment
to
capitalize industry,
more
ness
he has
well-known New York
The lob Is to Sell Ourselves
By BENJAMIN
H. GRISWOLD III*
the
Partner, Alex Brown & Sons, Member of
further
secure
awakened
public
the
the
to
possibilities of
telling our
is
and if that should
need
tell
not
work being done
in Los Angeles.
You
glad to know that it is
a
in other
of this
is splendid
these
behind
at
terial
work. It
a high level."
Analyzing what
of
story to
the
sale
public.
We
hampers the
the magazine
puts
stock,
new
to
its editorial finger on two
major factors. First "a far greater
rea
1 ize that
general
the
securities
the public under¬
important role of our
takes
in
industry. After all, our
much
a
public what you are up
to sell. For
far too long a period the persons
responsible for the sale of com¬
our
system-
-
have
failed to take the public into their
confidence. Today this is vital if
target.
theinfluence
of
securities
industrial
and
we
maintain the
to
are
terprise
free
en¬
which
you
gentlemen
regard so highly."
boast to
Indentifying the sale of securi¬
as a matter of paramount irn-
and is far more
economy,
aware
stocks and other commercial
mon
alert interest
more
when, he
"Tell the
private citizen is com¬
mitted to free enterprise by in¬
vesting
in
it,
he
immediately
ac¬
point vital to
said:
a
us
ties
on,/ our
share of the national income than
the
stand
public relations
its
find
not
does
of
to and what you have
great deal of
a
made
one
every
Free
When the
get
tivities to help
relations—of
December
in
Much of this huge volume of ma¬
vital that every one of us
tain business capital expenditures
There has been
stake in free enterprise.
a
Hoyt, publisher of the
Post, when he adressed
50th anniversary banquet in
your
talking,
preaching,
lecturing,
broadcasting, writing and arguing
about the free enterprise system.
places.
All
.
,
great deal of comment
creating
is
Stake
The
Denver
will
we
socialism.
wno
Palmer
Enterprise
you
the good
be
happen
threat of
invests, like the man
buys a home, takes a far
responsible attitude because
man
have lost our freedom.
here
will
The U. S. needs to sus¬
standards.
probably
right
publicity expansion.
entire United
States the securities industry has
Throughout
I
private capital, the life-
Creating
about
adequate equity capital and
Stresses impor¬
industry to all fields of business. Calls for
of securities
tance
intent
vest.
stake in free enterprise.
a
of
and
criticism.
some
the
of
blood of America's economic sys¬
good
improving
all the time, and I think that all
of us will be increasingly pleased
at the work being done in its har¬
publicity activities by stock exchanges, their members and other
securities dealers. Sees need of educating small savers in in¬
for them
re¬
and the effort has been
Pointing oat public's misunderstanding of securities industry,
prominent Baltimore investment banker comments on recent
principles, and to
public
Exchange,
been
has
Nevertheless,
New York Stock Exchange
to create
York
New
there
President, Association of Stock Exchange Firms
vestment
13
(73)
bave
come
perhaps
the
most
Continued
legislation;^ taxation,
of
on
page
24
tb
going
Neither of
workers.
in¬
vesting funds." Second, said "Busi¬
ness Week," "The shift in the in¬
the
of
ments
business
is
r:
these groups is accustomed to
sege-
many
been
has
before
ever
farmers and
public, in fact
funda¬
mental task in the economy of the
job
com¬
munity itself,
do
THE NATIONAL CITY BANK OF NEW YORK
come-distribution pattern has gone
hand in hand with
not
com¬
prehend and
income
therefore
inheritance
not
do
fully take
advantage of
the
shortage
ties
''would
the
of
B.
securities in¬
H. Gr is wold,
most
III
of
We have become
country.
our
well-being
economic
the
that the very nature
aware
of
our
that
mean
tunities
It also
points to
duction
in
substantial re¬
capital ex¬
a
business
essentiality of its service to busi¬
ness
and
to
the
community, is
penditures of the sort that has
always gone hand-in-hand with
declining business. Thus
it
neither not understood at all or is
poses
business, how it operates, and the
We realize that in an age
business
American
of ad¬
become
has
by telling its story to mil¬
great
of
people,
have, in the
about our
we
financial industry, gone
work too
quietly.
However, only recently the en¬
securities industry, the stock
tire
exchanges, the investment
ers,
bank¬
the Association of Stock Ex¬
change Firms, and other organiza¬
tions serving our industry, have
awakened to the opportunity of
relations and have
public
to take the necessary
begun
steps to de¬
part from their traditional mysti¬
cism in their relations with the
basic
job of
our
industry's
public relations is to make gener¬
ally known and more widely ac¬
cepted the fundamental truth ex¬
pressed by Leslie Gould, the fi¬
nancial
correspondent,
on
May
26th when he wrote: "The corner¬
stone of the American free enter¬
prise system is private ownership
securities
through
individual
operates
citizens.
through
distributed
The
the
to
system
to
the
with
jobs and savings accounts. To de¬
velop this field a great deal of
eductation is needed
men
An
advertising magazine said our
problem is how to tell the stock
market's
story
clearly
enough
to
be
understood,
interestingly
enough
to draw a
capital
it
needs,
stake
'
♦An
by
address
meeting
Of
Mr.' Griswold
New York
and Lorf
1950.
*
v
*
al'
a
Angeles
Cal.,
Stock Exchange Firms, Los Angeles,
June 20,
$1,164,389,432
crowd, truth¬
Bills.
Other Federal
of
Agencies
Municipal Securities
and
Loans
Real Estate Loans
and
Customers' Liability
Acceptances.
Stock
.*
.
Securities,
Portfolio
20,836,361
OwN!¥tship
Bank Premises
Items
.
with
•
7,000,000
....
Branches
27,737,876
Other Assets
'
,
-
18,606,117
.
Total
4,119,955
.
.
,
.
7,596,200
.
*
:
Unearned Discount
and
.
Other
..
.
.
9,839,223
.
'*'*
Interest, Taxes, Other Accrued
Expenses,
Dividend
.......
Transit
in
ReserveS'FOr:>
-
7,500,000
.
international
of
21,655,332
13,643,923
Foreign Central Banks
Unearned Income
......
.
1,220,448
for
Federal Reserve Bank
in
>
to
(In Foreign Currencies)
1^33,230,909
.
.
.
Due
100,913,308
......
,
Discounts
and
386,328,935
,
$35,299,255
.
Less: Own Accept¬
33,413,871
ances in
State
$4,593,527,436
.
Accept-
on
and
ances
Obligations
.
Liability
1,860,934,857
.
etc.
.
.
.
26,567,049
.
2,635,000
:
.
Capital
$124,000,000
(6,200,000 Shares— $20 Par)
Surplus
$4,966,232,069
126,000,000
.....
Undivided Profits
Total
304,411,829
54,411,829
.
both
the
SEC
critics
table
the
and
inevi¬
.
.
$4,966 232,069
25. 1950.
Figures of Overseas Branches are as of June
in
labor, consumer
groups, cooperatives, etc., and at
the same time palatably enough
f314.724,210 of
to secure
United
,
$7,967,300 of other assets are deposited
other purposes required or permitted by law.
States Government Obligations and
4244,429,002 of Public and Trust Deposits and for
(member federal deposit insurance
corporation)
dispel public fear and distrust.
to
of
acquainted
are
us
of the efforts
some
Chairman of
with
being made to
Chairman
the Board
Wm. Gage Brady,
President
of the Executive Committee
W. Randolph Burgess
Jr.
Howard C. Sheperd
.
individual brokers
stepping up their advertising
keying it to appeal to great
numbers of citizens, although a
are
and
friendly critic among the fraterni¬
of
ty
writers
financial
recently
"most
CITY BANK FARMERS TRUST COMPANY
member
that
commented
Head
houses either advertise not at all
or
media suitable for other times but
not
Office: 22 William Street, New York
Affiliate of The National City Bank of New York
administration of trust functions
confine their efforts to the old
for
separate
to the mass markets
adapted
Condensed Statement
of the day."
of Condition
as
of June 50. 1950
Investment Displays
During
recent years
brokers
of
tive
number
Two
Hutton
Los Angeles
and
Dean
firms, E.
Witter,
en¬
joyed gratifying results from such
exhibits
including
grams
courses
the
at
Los
and
.
active
salesmanship
speakers' bu¬
LIABILITIES
ASSETS
displays in state and county
fairs.
F.
a
have developed effec¬
Cash
Due
and
Banks
from
.
.
U. S. Government Obligations.
Obligations
of
Agencies.
State
and
and
in
,
,
.
.
.
.
.
.
v,
.
9,507,106
905,063
Capital
.
.
.
.
$10,000,000
Surplus
.
.
•
.
10,000,000
y-t
4,559,056
Securities
Federal Reserve Bank.
.
.
1
600,000
........
2,871,082
.......
2,509,720
Undivided Profits
*.
Other Assets
,
3,194,330
.
(Includes Reserve for Dividend $155,295)
.
$128,824,274
Total
•
>
-
Total
10.558,459
30,558,459
'
(
...
.
$128,824,274
United States Government Obligations are deposited to secure
$2,581/02 of Public Deposits and for other purposes required or permitted by taw.
$7,780,693
of
(member federal deposit insurance
reaus.
$ 95,071,485
.
Reserves
Advances
and
Deposits
89,036,314
1,550,464
Municipal Securities
Bank Premises
$ 17,285,468
Other Federal
Real Estate Loans
Stock
.
.
.
Other Securities-V
Loans
.
corporation)-
chances of maintain-*
are our
ing prosperity and raising living
-
.
.
fully enough to stand the scrutiny
of
unless
prompt steps are taken to increase
the flow of venture, capital.
At
Banks
from
Banking Corporation
ings.
Angeles
County Fair last fall. Chicago has
program by the socializers, who
have acted to make accumulation gone so far as to plan a "Finance
Fair" to dramatize to the public
of wealth next to impossible by
the function and significance of
the very
high income tax and
the securities market in financing
the confiscation of large savings
production and distribution, cre¬
through inheritance taxes.
ating employment and stimulat¬
This warning was also sounded
ing the nation's economic growth.
by "Business Week," in an; ar¬
Some of our younger brokers in
ticle
entitled "Are Stockholders
various cities have set up junior
Needed?" The article said, "Busi¬
investment bankers' associations,
ness
will not be able to raise the
and- developed worthwhile pro¬
venture
Due
and
education
—
of the individuals with small sav¬
ever-ex¬
panding
distribution
of
stocks
and bonds, the money raised go¬
ing into
new
plants, tools for
the workers, and research."
Mr.
Gould goes on to point out that
the capital market has failed to
keep pace with normal growth
because
of a cleverly
executed
securities-
of
this end. Many
Private Enterprise
The
to
smaller capitalists—the
All
Securities Industry, Cornestone of
gentlemen,
the
this problem 4s wider
distribution
American citizen.
average
Cash, Cold
U. S. Government Obligations
Deposits
.
course,
answer
of June W 19 50
LIABILITIES
ASSETS
Other Securities
Of
when
publicity,
and
.
States."
majority of the public.
vertising
lions
by
misunderstood
unfortunately
the vast
.
major test to the United
a
as
if not
have to
attractive oppor¬
develop new products.
to
of Condition
many,
would
many
up
pass
dustry in fur¬
thering
■
capital
venture
companies
Condensed Statement
resulting
the
that
of
article
Week"
"Business
concluded
potentiali-
o
(
j
;
The
.
Office: 55 Wall Street/New York
tax
rates."
and
Head
sharp rise in
a
,,
The New York Stock Exchange
has conducted
an advertising and
public relations program -which
only this year-look forward-look¬
ing
new
steps
by
engaging the
Chairman of the Board
President-
W. Randolph Burgess
Lindsay Bradford/
r
...
>»v\
w
14
The Commercial and Financial Chronicle
(74)
J.
P.
MORGAN
CO.
Sc
NEW
$
News About Banks
Deposits
Cash
CONSOLIDATIONS
!
REVISED
U.
Bankers
and
ETC.
due
President, New York Curb Exchange
160,048,823
253,330,511
221,440,722
180,923,758
191,583,733
ll,358,d97
11.688,674
prise; (3) economic ignorance; and (4) unwise demands and
OF
arrogant^assumptlons of power by privileged groups.
secur¬
holdings
counted
-
-Undivided
proiits—
ft
THE
Ca_.li
1,164,389,432
U.
Govt,
S.
curity
Los.ns
1,182,660.092
Cash
1.860.934.857
1,769,175,004
U.
Total
discounted
Undivided
S.
54,411,829
prof.
-tt
Cash
112,469,741
156,453,757
189,245,531
198,541,284
175,543,395
7,964,967
Govt,
S.
Loans
BROWN
June 30, '50
ft
'banks
U.
ity
95,071,485
19,497,732
Total
Cash
89,036,314
U.
94,547,262
'
S.
ity
200,662,027
4,559.056
Deposits
Cash
193,464,337
51,555,421
U.
46,323,909
10,261,741
59,029,511
55,005.124
surplus-—14,045.284
&
TRUST
UNITED STATES TRUST
NEW
Mar. 31, '50
$
$
COMPANY
36,085,870
Deposits
Cash
U.
curity
Jjoans
2,128,288,704
542,796,848
576,856,448
1.005,984,915
1,024,818,104
580.363.892
551,655,812
due
Deposits
banks—
Govt,
S.
2,100,793.828
-
.
and
from
$
Cash
and
U.
8.
bills
discounted
ity
—
Undivided prof-
counted
52,799,115
TRUST
&
f.
Cash
from
U.
<j»
Loans
Total
1,340,031,776
Deposits
402.419,942
and
528,922.142
U.
discounted
'468 ,234,512
480.140,109
__
'
S.
14
15,031,250
*
*
Surp.
HANOVER
j
BANK
AND
undivided
&
'
U.
Govt,
S.
Deposits
Cash
378,710,866
U.
649,504,735
S.
530,960,853
444,507,199
422,762,644
Surp.
134.243,780
profits
ft
133,718,063
8.224,272
23,047,683
19,808,978
6,029,472
5,619,962
secur-.
that
—
2,762.906
*
*
2,757,088
TRUST COMPANY,
NEW
CLINTON
TRUST
*
YORK
June 30,
June 30, '50
50
Mar. 31, '50
Total
resources—
Deposits
Total
1,205,513,499
Cash
311,956,317
Loans
and
due
436,218.284
415,149,650
holdings—; 13,624,992
13,115,370
Govt,
secur¬
Surp.
371 ,413,652
405,488,334
13
14.113,398
Z—
profits
MANHATTAN
ft
TRUST
COMPANY
June 30,'50
1,170,652,037
resources-
Deposits
Cash
curity
liOans
1,042.607,156
303,361,292
U.
323,431,804
323,594,187
427,794,657
430,003,791
S.
14,914,091
prof.
*
ft
BANK
TRUST
,
982,767,057
__
prof.
TRUST
*
.
resources
Deposits
S.
742,473,531
from
!
'-banks
U.
792,224,895
—j
Cash and due
Govt,
216,565,723
»■»'
790.307,793
740,469,785
Cash
208.759,675
U.
S.
468,003,667
78,816,164
76,078.440
retary
7,359,705
Undivided profits
*
*
NEW
YORK
of
&
&
$
$
763,384,870
discounts
—_
Xfr 8. Govt, secur¬
ity holdings
4
$
Total
668,615,752
592,743,825
Cash
192,405,098
153,162,771
U.
profits-
of
the
Mr.
S.
due
ity
314.962, 254
253.899,261
12,599, 604
12,138,352
-
for
•legal 'department
the
the
risks
to
create
which
tide
a
laps
be
ex¬
or
the
at
But taxation is
more.
stream
foundation
of
order
They
to
store
to
tax
'of
expenses
resources.
up
pay
The
expenses.
government
the
are
impulses which make these erod¬
ing ripples
of
taxation
freedom
Strong currents
run.
which
should
and
The
be
direct
we
at¬
our
of
expenses
ment should receive
should
our
ene¬
extravagances and ill-
considered
the
the
fear
taxation
bank's
since
attack
and
generates
it.
we
fraud
of inflation.
What
planned in the
sel to
the
Reconstruction Finance
Corporation,
senior
attorney of
Securities Exchange Commis¬
sion, Vice-President of the De¬
the
fense
Supplies Corporation,
exec¬
S. Commercial Company. He is a
member of the New
York
and
District of Columbia Bars and of
the New York County Lawyers'
Association.
*
*
#
Chemical
at the
*
-
".
NEW
TRUST
Bank
&
Trust
Com¬
of New York has applied to
the New York State Banking De¬
pany
new
for
office
permission
at
100
to
open
Avenue
Park
of 41st
Street.
It is
expected that this office will
open
on
corner
December
1st
with
complete
banking facilities.
*
YORK
'
$
342,976,091
Mar. 31, '50
*
S
357,689,162
from
—
counted
Undivided profits—
law
been
Board
86,846,155
99,797,468
124,540,270
131,081,769
secur¬
holdings
the
fice
of
firm
of
of
the
30
to
&
the
Broad
Chemical
Ogden,
Advisory
Street
Bank
&
of¬
Trust
Company of New York according
to an announcement by Harold H.
118,519.769 111.432.195^
3,138,955
2.972,034
spending
though
on
page
43
scrutiny.
that
spending
of
is
other
our
not be allowed to rise and swamp
the sources of our freedom.
there
But
high
is
spending
high
taxation
escape our
and
which
taxes
high,
to exempt income
an
becomes
are
potent
a
of those who would build
weapon
all-powerful
recent
of
consequent
should not
fears. If taxes
then the power
from
by-product
a
years
government.
have
we
In
vast
seen
public works supplant vast private
projects through the ample de¬
vice of financing those works by
the
strong
attraction
investment.
the
device
times
of
free
tax
has, by
exemption in
tax
higl| taxation,
private, people
savings
of
Government
of
with
lend
to
which
to
induced
it
the
Temple
of
erosion.
their
curities
forts
in
bonds,
business
the
we
tractive
we
in
expend
sale
are
insidious form
an
When
of
tax
the
our
se¬
ef¬
exempt
often accepting at¬
immediate
compensation
"Part of address of Mr. Truslow at
Annual
Convention
ica, San
of
the
whose
pillars
he
The
who
statesman,
realize
that
fails
to
has
no
government
wealth except a share of the mar¬
gin
between
the
consumption of. its people, is
a
the
be
to
man
of
production
feared
as
an
and
enemy
liberty.
The
citizen
ernment
who
calls
on
gov¬
to
supply him with se¬
from the cradle
to
the
curity
and, by his insistence, en¬
government spending is
grave,
courages
danger to himself and his fel¬
low citizens. If his pleas
are
cessful
freedom
he
Men
of
who
lose
can
and gain no
his
suc¬
security in exchange.
greed
exercise
and
arrogance,
their
individual
businessmen,
power
as
leaders
or
politicians
labor
to
create
dissension, ill feeling and dissatr
isfaction
within
private
of
system
our
ownership
personal
and
initiative and competition are men
to fear
and
abhor. They are a
both
of
vast
destroy
control
of
erosion.
They
can
freedom and take
our
lives.
our
External Forces
But today we must realize that
beyond the internal forces of tax¬
ation,
tax
exemption,
Texas
Association
the
Group,
of Amer¬
Antonio, Texas, May 4, 1950.
ignorance,
unwise demands and arrogant as¬
mining
of
there
power,
forces
work
at
are
under¬
private ownership of
with it our in¬
our
production
and
dependence. These external forces
deliberate. They are expressed
the
propaganda
sinuated into
actions
which
is
in¬
minds and in the
our
which
directed
are
into
daily affairs by the very com¬
petent agents of a tyranny which
already rules half of the world.
our
Communism, Socialism, statism—
it
by
any
name
you
stands
call
on
the
other
side
issue
of
ment
urges
private
freedom
by
wish—
of
the
govern¬
a
few
and
all
'to
the
rest.
fundamentally
concept that
work,
own
and
save
versus
ownership from ourselves. It
the control of productive
enterprise
opposed
It
to
earnings, seek
decide
is
the
select his
man may
a
his
denies
where
his
to
sav¬
ings will be placed. The essential
tactic
of
this
external
freedom
our
is
to
threat
to
encourage
spending,
compound
ignorance,
inspire demands for government
promised security and stir up dissention and dissatisfaction.
As
acquire
great chunks of private enterprise.
Investment Bankers
Continued
be
must
name
Here is indeed
partner in
Blair
elected
our
heritage of helping others, it must
*
Edwin Foster Blair,
has
Even
we
must be paid for, re¬
of
the
tax
required,
therefore
re¬
excess
has pulled down.
sumptions
ings
its
His freedom will die in the ruins
of
external
through tax¬
loses its
the earnings and sav¬
acquire disappear in the
money
and
vast
earnings and
production, is like blind Samson.
ation,
tested by the most stern
Assistant Coun¬
of its
do not pay our debts
our
he
which
for
extinguishes
or
We
But
these eroding waves
are
complex enemies. If we spend and
then
a
govern¬
fire.
our
spending which
is
who, without regard
enterprise
more
source
which
at
threaten
not
what
of
work
undercutting pri¬
constantly demands more
duces
result and not
a
Governments do not tax
cause.
in
the
freedom.
our
a
in
1947, as
assistant resident attorney. During
15 years in Washington, D. C., Mr.
as
Ignorance,
economy
current
the
are
with
this
to
ownership and freedom. The
works,
in
41,360,935
Loans and bills dis'
enter¬
men
or
our
wage earner
gardless
45,403,942
316,677,618 331,491,908
Govt,
these
exist
take
to
vate
must spend
associated
partment
OF
resources
and
pro¬
makes
further
Murray is
becoming counsel to the law firm
Harper & Matthews, 70 Pine
Street, New York. Mr. Barnes has
of
a
MIDLAND
Deposits
banks
Loans & discounts- ,243,718, 554-244,608,684
Undivided
attorney
service.
knowledge
value
48.835,100
*
MARINE
Mar. 31, '50
Cash and due from
banks
of
years
92.880.490
14,649,602'- 14,573,997
COMPANY
687,471.608
Deposits
Secretary
YORK
June 30, '50
resources
succeeding
Murray,
Company, who' is retiring after 45
58,687,492
June 30, '50
Total
bank,
Sec¬
as
$
214,791,343 200.676.123
183,460,534 169,945,131
undivided
*
COMPANY,
the
T.
resident
'50 Mar. 31, '50
ft
TRUST
NEW
—
profits
THE
THE
BANK
YORK
secur¬
6,927,980
Surp.
and
Economic
of
a
tack.
*
William L. Kleitz, President of
Guaranty Trust Company of New
York, has announced the appoint¬
93,882,108
_____
Govt,
holdings
Loans
Loans and bills dis¬
NEW
and due from
banks
ity
464,294,184
resources™
Deposits
secur¬
ity holdings
NATIONAL
COMPANY,
Mar. 31, '50
.
counted
72,695,293
*
June 30,
Total
Total
964,941.424-
73,969,698
COMPANY, NEW YORK
June 30, '50
*
.
which
cannot
induced
mies
.ft
,
fense Supplies, R. F. C., and VicePresident and director of the U.
COMMERCIAL
AND
Com¬
554,401,349
ft
EXCHANGE
started
Trust
938,423.396
*
THE
CORN
Rothman
569,365,278
bills
and
discounted
Undivided
been
1,079,906,759
se¬
hldgs._
14,451,812
*
has
utive director of the Office of De¬
banks—
Govt,
Loans
bills
—
due
and
curity
hldgs._
and
278,045/763
se¬
discounted
Undivided
Cash
—
from
banks—
2,764,198,625 2,616,280,609
2,335,396,908 2,189,813,632
resources.
Deposits
due
Govt,
S.
Total
1,144,373,464
1,069,344,043
and
from
■
U.
$
OF
Mar. 31,'50
$
/
'
Mar. 31, '50
$
915,301
*
NEW YORK
|
Italiana,
and
of
Lack
part
Barnes served
ft
COMPANY,
June 30, '50
5,509.012
-
936.203
——
,553,578
GUARANTY
THE
5,821,158
undivided
&
NEW YORK
Total
-
6.846,874
counted
bills
prof.
OF
•
Loans and bills dis¬
discounted
HANK
25.304.894
from
5,879,951
S.
ity
with
career
attention
little
Effects
been
25,175,833
—
and
Mar. 31, '50
$27,189,610 $27,297,569
banks
se-
hldgs.-
Undivided
271,217,918
Cash
U.
banks—
Govt,
eurity
.<
976,918,624
due
and
from
U.! S.
1,114,242 364
1.068,961,562
resources-
Deposits
COMPANY, NEW YORK
pro¬
in 1929.
.
without
prises
energy
ment of Stuart K. Barnes
profits
*
»
Matthew
IRVING
Mr.
gin
seize
is
was
think we
I
problem.
consume.
of this
difference between production and
consumption they reduce the mar¬
Mr. Corrado
Manufacturers
pany
,
they
they
governments, to meet their
pend the
Foreign Department since
time.
with
;
undivided
&
the
When
expenditures,
Taxation
New York, in 1928.
Manufacturers Trust
1941
than
more
At
Commerciale
in
duce
anounced
was
banking
Agency in
He
joined
29,062,911
and bills dis¬
counted
&
Mar. 31,'50
that
Assistant Manager to
his
Banca
from
holdings—
it
Rothman
Joseph
moted from
in
9,163,239
due
—
Govt,
ity
Loans
—
COMPANY,
YORK
33,841,319
——
and
Company
announces
time
Company
$39,357,989 $34,611,337
resources—
banks
se¬
surp.
undiv.
1,304,929,541
"
3,508,573
June 30. '50
bills
discounted
•
ft
Trust
.
ft
TRUST
"
Total
388,075,342
hldgs._
and
Capital
"
due
banks—
curity
Loans
$
1,451,849,592
1,399,854,442
and
.
v
NEW
1,551.777,211
Deposits
ft
Assistant Secretary.
7,784.900
3,512,917
—
SCHRODER
' 3,104,462
Assistant Secretary.
an
began
TRUST
$
'• from
42,726,084
8,532,101
Mar. 31, '50
June 30, '50
,
resources.
Cash
8,998,917
47,203,371
secur¬
profits
*
76.197,928
.
3,247,836
York
same
that
counted
409,156
COMPANY, NEW YORK
Total
the
lrom
ft
CENTRAL
57,092,043
7,634,645
Govt,
New
made
$79,831,852
Loans and bills dis-
prof.
<
and due
Mar. 31. '50
61,915,375
ity holdings——
bills
Undivided
79,903,943
profits-.
Joseph A. Corrado of the bank's
Foreign
Department
has
been
'if
"ir
$88,947,406
—
banks.
354,847,951
511,288,433
se¬
hldgs._
YORK
that is, so long
as
*
BANKING
NEW
June 30, '50
resources—
Cash
banks—
curity
$
1.489,117,048
due
Govt,
S,
Mar. 31, '50
1,390,485,051
and
SCHRODER
CORPORATION,
1,552,253,850
resources.
Deposits
112,259,749
*
of
HENRY
J.
June 30, '50
Total
109,557,044
— —
and
profitable—
A. Truslow
65,435,458
2,025,239
*
COMPANY,
YORK
NEW
Francis
Manufacturers
*
CHEMICAL BANK
holdings-
self-sus¬
taining
260,158,065
secur¬
55,638,645
2,087,945
profits-.:.
so
they
as
are
68,794,034
Undivided
long
$
from
counted
57.859,034
59,090,773
them
tain
Mar. 31, '50
Loans and bills dis¬
secur¬
——
.
Undivided
30, '50
262,772,761
—
Govt,
S.
ity
23,397,312
19,753,155
i
and due
banks
U.
holdings-—
*
*
153.311,250
120,092,699
Loans and bills dis¬
33,432,039
34,992,899
BANK AND
288,613,830 284,659,451
resources—
Cash
these
COMPANY, PHILADELPHIA, PA.
Deposits
from
—
Govt,
Total
$
..
115,740,219
—
and due
banks
se¬
hldgs..
..
and
things, and
they will re¬
ft
ft
EXCHANGE NATIONAL
June
Mar. 31, '50
-
They
use.
own
1,965,632
OF
149,094,915
resources
all
and
created
30,133,005
1,839,584
$
June 30, '50
Total
125,071,032
-I*—*
YORK
2,298,721,635
2,271.810,894
resources.
they
others need
and
ft
''
Total
62,292,375
*
COMPANY,
June 30, '50
219,506,660
62,180,383
profits--
TRUST
YORK
services which
237.205,898
counted
CORN
ultimately
can
freedom.
our
too
pay
and
the goods and
$
secur¬
14,025,234
*
Mar. 31, '50
holdings- —124,045,701
which
work
destroy
which produce
226,091,750
-
—
for
machinery
Undivided
^
*
NEW
enterprises, the mines, the
farms, the factories, the wells and
Loans and bills dls-
54,349,516
53,892,839
counted
Capital
MANUFACTURERS
pro¬
ductive
from
due
—
Govt,
ity
holdings
——
and
S.'
secur¬
Loans and bills dis-
4,321,670
10,558,459
—
the
own
Y.
244,069,821
resources
banks
„
Govt,
Total
■
'counted
economic basis for free¬
our
dom, countless men
COMPANY,
N.
$
from
_._r
TRUST
June 30, '50
237,106,734 229.419.356
—
and due
banks
secur¬
Undivided profits—
47,711,641
*
*
BROOKLYN,
S
resources-
Deposits
Loans and bills dis-
49,795,882
*
Mar. 31. '50
$
102,662,828
17,285,468
holdings
1,379,484,665
YORK
June 30. '50
from
due
1,404,655,407
prof.
CO.
&
through
channelling private capital into profitable enterprise.
In
I
BROOKLYN
HARRIMAN
136,122,092
__
Govt,
S.
NEW
$
128,824,274
_
Cash and
1,655,931,638
Says
1.200,710,221
1,671,781,138
bills
and
Undivided
ft
BROTHERS,
Mar. 31,'50
S
Deposits
1,199,628,369
exces¬
private enter¬
on
freedom, and points out responsibility of in¬
our
offices
YORK
resources—
4,22^189,^2
(1)
economy:
bankers for maintaining freedom in world
vestment
se¬
hldgs.-
discounted
ft
Total
and restrict
$
4.633,437,693
our
also external forces operating to destroy our economy
are
due
banks
7,562.402
U.
"CITY BANK FARMERS TRUST COMPANY,
NEW
31, '50
4,298,936,909
—
and
curity
profits—
ft
Mar.
erosive forces in
as
(2) intrusion of government
taxation;
there
YORK
NEW
4,697,749,012
resources-
Deposits
secur¬
counted
52,427,995
469,111,610
119,740,706
Undivided
ft
Total
and bills dis¬
Loans
1,375,617,474
1.333,230,909
__
OF
THE
$
S
508,477,336
from
holdings
*
Mar. 31, '50
465,475,550
Govt,
ity
bills
CITY
and due from
banks
se¬
hldgs.-
and
*
sive
NATIONAL BANK
June 30, '50
506,777,840
resources—
Deposits
due
banks...
AND
$
4,519.348.370
CHASE
YORK
NEW
June 30, '50
4.909.931,502
4,593,527,436
and
from
COMPANY, OF
$
$
4,966,232.069
resources.
deposits
BANK
NATIONAL
PUBLIC
TRUST
Mar. 31, '50
June 30. '50
Total
THE
NEW YORK
BANK OF
CITY
Mr. Truslov/ lists
Loans and bill£ dis-
CAPITALIZATIONS
NATIONAL
By FRANCIS ADAMS TRUSLOW*
from
141,583,768
Govt,
8.
ity
$
638.051.308
567,026,334 559,784,675
and
banks
NEW BRANCHES
NEW OFFICERS,
Erosion oi the Economy
Mar. 31, '50
30, '50
642,224,470
resources—..
Thursday, July 6, 1950
.
.
INCORPORATED,
YORK
June
Total
.
we
go
about
our
work from
day to day, it is difficult to think
in
terms
of
these
seemingly re¬
are
lapping
degree to
which we are each
personally suc¬
cessful in building
up
our
own
business, providing for our own
family and attaining the particu¬
mote
at
lar
forces
our
which
freedom.
objectives
measures
The
we
seek,
often
inversely the degree to
Continued on page 43
Volume 172
Number 4922
.
.
The Commercial and Financial Chronicle
.
(75)
tained.
Teaching Capitalism
By Making Capitalists
of
ing Dec.
College, Berea, Ohio
Dr. Kamm reviews plan of teaching capitalism to students by
making them capitalists through participation in an investment
fund. Says yield of investments has been satisfactory and
Portfolio
and
stocks;
into
cash.
United States
capitalists.
their
b
eager to become
are
desire
undertaken
the
by
serve
Board of
ment
banking
have
indicated
want
t3
i-
s
Many
to
come
something is to shun it.
own
They
u
nesses.
the
over
homes and to start their
own
own
all
security
be¬
accounts,
Series
E
ilar
highly
such
a
c
a
n
industry
through
the
curity
would
The
preferred
the
If
to
be
latter
28.1%
of
large
up
were
purchase bonds, these
included in the second
are
main¬
of
life
is
true
liquid
Investment
;
of
Dr. Jacob 0. Kamm
Theory
following
this
has
has
been
at
been
Ohio, students are daily,
changing their investment habits
as
a
result of a unique course
investment
combines
have
of
tax on its
If it then distributes its
earnings
in
dividends
holders, the shareholders
For
example,
which
pays
come
taxes.
residue
of
holders
pay
who
win-Wallace
owns
the
caoital gains on
assume)
their divi¬
on
gifts
$850.
to
the class
enter
title
to
information
ized
in
their
class at
Bald¬
legal
a
as
in
is organ¬
which
trust.
They
securities, collect divi¬
ment will receive $21,709 in addi¬
analyze se¬
tional income taxes. Out of $100,- dends, vote proxies
000
of
corporate
income
the curities, and plan their portfolio
of the
or owners
cor¬
poration would receive only $40,300.
Corporations needing new
capital funds have preferred to re¬
tain earnings rather than to pay
dividends and then sell additional
shares to stockholders to raise the
funds.
•necessary
lowed this
cient
have
fol¬
procedure because their
shareholders
funds
dend
They
do
left
suffi¬
have
not
from
their
divi¬
receipts after paying income
taxes to
purchase the new shares.
When
corporations do find it
necessary to raise additional capi¬
tal
funds
rather
they prefer bond issues
than
The
issues.
stock
holdings
principles
and
learn
the
tion
ible
to
on
as
bond
a
interest
is deduct¬
corporate expense prior
the computation of its income.
This factor has caused many
obtain
by foregoing a
porations
funds
to
cor¬
capital
proper bal¬
borrowed
capital
new
between
(bonds)
Americans
invest.
for
do
There
not
is
know
an
capital
how
urgent
The class elects
The
Secretary.
education.
attitude
not
on
The
as
Treasurer
the part of people who
understand
how
to
do
.
.
•
V
.
JUNE 30, 1930
,
Cash and Due from Banks
U. S. Government
State and
.
>'
-fjh
.
$1,199,628,369.05
Obligations
Municipal Securities
1,671,781,138.39
.
.
.
.
.
Other Securities
170,573,972.39
155,998,291.09
Mortgages
.
.
.
.
35,073,960.72
.
Loans
1,404,655,407.45
Accrued Interest Receivable
10,639,311.19
Customers'Acceptance Liability
.
...
18,137,871.25
Banking Houses
Other Assets
29,119,285.71
.
2,141,404.78
.
$4,697,749,012.02
the
fund
are
managed
continuity
other.
'
college quar¬
helps to maintain
also
He
ters.
from
Actions
proval of
a
one
class to
require
the
an¬
down
cific
each
to
Dividend
Payable August 1, 1950.
Reserves—Taxes and
Other Liabilities
.
.
.
.
15,268,644.02
Expenses
11,508,560.91
.
23,975,167.11
Acceptances Outstanding
Lesi: In
4,696,152.44
Portfolio
a
Capital Funds:
Capital Stock.
.
.
.
$111,000,000.00
(7,400,000 Shares-$15 Par)
Surplus.
.
.
189,000,000.00
.
the most promising spe¬
issues.
The
conclusions
of
Undivided Profits
49,795,882.60
of these committees is sifted
349,795,882.60
by an executive group which re¬
ports directly to the class. Each
student is a working member and
has
2,960,000.00
The class members,
organized into groups — one
studies general economic condi¬
tions,
another
follows
marketare
movements,
$4,298,936,909.82
Deposits
ap¬
two-thirds majority of
the members.
LIABILITIES
serves
that dividends
so
and
collected
1,697,749,012.02
some
out in the class.
United States Government and other securities carried at $295,701,972.00 were
to secure
Funds
Yield
as
the proof of the pudding
eating, the proof of the
effectiveness of their
the
results
FEDERAL
DEPOSIT
INSURANCE
CORPORATION
Satisfactorily
the
Just
is in
which
training is in
they
have
at¬
pledged
public and trust deposits and for other purposes as required or permitted by law.
MEMBER
to
usual
.
RESOURCES
President and
a
professor
in interims between
need
broadening and improving in¬
vestment
do
equity
and
s
lectures.
specific duty to carry
By putting theory
into
practice these students are
(stock).
able to graduate from college with
One of the most important rea¬
a
knowledge of the procedure to
sons why
equity financing is not
follow in investing their funds.
more
widely used is that many
ance
STATEMENT OF CONDITION,
■
in
third analyzes in¬
dustries with a view to selecting
the most favored, and a fourth se¬
lects the most promising individ¬
ual issues. The analysis is a fourfunds at a much lower interest step one narrowing from the study *
of
general economic conditions
rate by selling bonds and in addi¬
high-grade
corporate
bonds today averages 2.65%.
The
average yield on New York Stock
Exchange listed stocks is in ex¬
cess
of 7%.
Corporations obtain
yield
'•
they
which
textbooks
in
v
to carry out the in¬
so as
vestment
study
*
•"
buy
sell
and
OF NEW YORK
CITY
'
and operates an
security sales, and
The students who
automatically take
fund
the
BANK
-
fund today has grown
dividends on securities,
the
share¬
income, the Federal Govern¬
stockholders
CHASE
re¬
Started with $100
actual fund.
through
its
".
1
investments
The
in¬
shall
(we
schools.
1947,
to
And
program
in¬
distributes
it
tax of 35%
a
dend
If
$62,000
OF THE
;
carrying out this
of
type
same
to
Federal
$38 000 in
come
view
a
in
$100,000
earns
also
are
corpora-;
a
Wallace.
-
land, have reouested
with
share¬
to
Baldwin
cently administrators of the Swiss
high schools in Zurich^ Switzer¬
earnings.
pays a
ory
They
at
earnings.
tion
Continued
the¬
why
laws
corporate
corporation
taxed.
ufacturing,
16.5%
in
building,
1.7% in chemicals, 3.2% in .food
NATIONAL
SAVE
FOR
YOUR
IN D E P E N D E N C E
—
B UY
U.
S.
this.
be obtained by
in
ebb.
low
a
reasons
Tax
so.
high
in the double taxation
distributed
The
their
various
are
resulted
disproves
selecting an issue representing a
corporation which makes many
different products or engages in
dustries: 16.3% in auto parts man¬
THE
and
with
investment
practice.
learn to invest by invest¬
school education.
ing.
They are taught capitalism
The
rapid economic develop¬ by their becoming capitalists.
A
ment of the United States has de¬ project which was initiated three
pended to a great extent upon years ago to permit students to do
the willingness of people to invest this has now become a widely ac¬
their savings in
equity or risk cepted educational advancement.
bearing
securities.
In
recent Many large American universities
years,
however, new equity fi¬ are patterning courses after that
There
can
necessar¬
Baldwin-Wallace College
At
which
as
of those who have entered
nancing
fund
Berea,
and
universities
as
class
the
Diversification
the following in¬
among
cannot obtain
funds
But
assets.
Investment Practice
or
business
of
of
dis¬
were
moderate*,
diversification. The record
tunities.
This
graduates
well
tributed
proper
ily true for it may merely be the
result of a lack of knowledge of
lim¬
colleges
the form
limited
with
stocks;
insurance,
conclusion is not
back¬
grounds.
in
of
should not purchase equity;
securities, because
an. investor!
other available investment oppor¬
invest¬
d
held
The fund's assets
cash.
individuals
that
*
in
r
means
savings bonds, and sim¬
f
o
their
e
were
invested
£
Investors
Re¬
ments because
it
were
j
.
Small
We hear too often the statement!
At the end of 1949 71.9% of the
common
and
•
«-
Securities and
Equity
1
assets
is made
fund
the
lower price levels. •
in¬
former
Surveys category. Cash holdings
se¬
purchase
corporate
divided
are
auction.
prefer
evidenced by the
of
their
savings in
bank
i
vestment
The
that people
A
r
enough
Federal
take
can
exceptional in¬
opportunities
which
any
Governors, invest¬
firms, and others
participants in
me
for
12.75%
that the class
so
advantage of
is
as
investment
owner-
of
holdings
defensive.
cludes
knowledge of putting investment theory
praclice. Sees in experiment means of preserving strength
of American capitalistic system.
people
1947;
into two broad groups: aggressive
students have acquired
Young
31,
tained
might appear. If they held no cash
average return for the years in they would,either have to dispose
fvhich it has been in existence has of some other holding or let the
been
11.9%.
Students
consider opportunity pass. Cash also serves
this return satisfactory in view as a hedge" against a decline in
of the unsettled market conditions security prices, for some funds are
of the past few years.
•
available to purchase securities at
By JACOB O. KAMM
+
return
a
1948; and of 11.93% for 1949.
Director, School of Commerce
Balwin-Wallace
The fund showed
11.01% for the fiscal year end¬
15
SAVINGS
BONDS
*
on
page
35
16
The Commercial and Financial Chronicle
(76)
Net
assets
May 31, 3950,
compared with
Nov. 30, 1949.
$35,582,992
942,863
Mutual Funds
serves
Bleak Swiss Outlook
(2)
For Limited Funds
Prospectus
your
from
from
request
upon
investment dealer,
or
the
been
almost 20% of assets,
were
stock
common
ratio
had
Lesson to Us
and
(3)
companies, pen¬ had previously been upgraded
the recently-for¬ less volatile issues.
NATIONAL
SECURITIES
&
CORPORATION
120 BROADWAY, NEW YORK 5, N. Y.
sion
funds
and
to
Insur¬
first class bonds to 2.27%.
Nation-Wide
Securities
Of
and pension funds have been
ance
constructed
the basis of
on
4%
from first mortgages,
and
deficits
are
heavy
consequently
anticipated.
20,000
shareholders
of
81
Investors, Inc., only
in their shares, most
turned
of which occurred
York
New
tions
for
the
Monday. In
Inc., redemp¬
on
Stocks,
than
this
to
answer
problem, in
week
one-half
Bond Fund
totaled
Prospectuses
available
•w>s '■
Investment
or
CALVIN BULLOCK
Note
Strong
;
week's
popular
mutual
that
of
belied " to
events
the
extent
some
Diversified
to
I]
argu¬
satisfy redemption demands of
Not only was
this argument put
in a questionable
Fund
light by the turn
of events,
but, in addition, a new
facet of experienced management
demonstrated
was
A Series of
calmness
New
during
less
were
be
must
the
however,
taken,
special
factors
situation
week's
which
in
last
to
degree distorted the test.
some
Ex post
material
investment
dealer,
or
your
and
is
still
the
on—as
is
tories
and
shown
best
Wall
Institutional
investors,
contrasted
as
the fear psychology of the
experienced
investors who
wished to realize profits in hand.
Company
Selling
Street, New York 5
LOS
was
small
ANCELES
further augmented by
investor's
started
—
a
rising prices in
calm
the
reinvesting
tions
watch
and
velopments
"we
by
have
little
a
cash,
further
for
the
in
Korean
de¬
situa¬
tion."
eystone
Fund
Operations
Easy
Reports from two funds indicate
the
Custodian
with
ease
ated
during
which
last
they
week's
oper¬
down¬
turn.
Wellington
FunJs
Fund,
in
special
a
letter to
dealers, stated that dur¬
ing Monday and Tuesday of last
week; June 26 and 27, their sales
Certificates of Participation in
were
INVESTMENT FUNDS
about
deemed.
double
Share
shares
price
compares
30, 1949, the
last fiscal year."
On
or
IN
3.2%.
was
so
re¬
That this price reduction
small
Wellington
BONDS
Cash
(Series B1-B2-B3-B4)
sets of
the
and
was
to
the
fund,
If
is to be
a case
selves
can
attributed
three
factors:
by
(1)
bond're¬
government
1949 to
which
only
May 31, 1950,
with net asset
value per share of $20.81 com¬
pared with $7,314,567 and $18.82
per share on Dec. 31,
1949, and
$5,610,426 and $14.95 per share
May 31, 1949.
at
the
391,664
on
31, 1949.
:
investment
Net
in
the
page
29
FUND
of
BOSTON
.
\i/
many
.
/
a balanced fund
Prospectus on request
from your investment dealer
be
be
stable.
if fund
true
this
And
or
Louis h. Whitehead Co.
OMMONWEALTH
share¬
educated
are
It
is the
responsibility
Investment Company
MULTIPLE
fun¬
of
w
^Jdudion
fund
management to continue this edu¬
cation.
PURCHASE
1
INC.
PROGRAM
Keystone Funds
Break
Combined
net
Keystone Funds
Million
200
assets
of the
May 31, 1950
high of $211,427,by the semi¬
annual report of the Keystone In¬
come* Common Stock
Fund
S-2,
made public today. This is an in¬
crease of $43,288,200 over the total
of $168,139,000 on May 31 of last
year,
and a gain of $20,940,700
from the figure on Nov. 30, 1949.
reached
DIVIDEND
Directors
disclosed
number
of
shareholders
have declared
of
dividend
new
a
is
A Flexible Plan for
ten
on
20
cents
Systematic Investment
a
per
share, payable July 15, 1950
to
,
Prospectus and details from
shareholders of record
investment dealers
or
July 5, 1950.
North American Securities Co,
2500
James W. Maitland
Russ
Bldg., San Francisco 4
President
115 Broadway, NewYork Cify
■iiiiiiiiiiiiiiiinii
was
May 31, 1950, compared
on
with 51,564 a year earlier.
The
Business Shares Assets Rise
a
American Business Shares, Inc.,
balanced
fund
sponsored
by
Lord, Abbett & Co., reports
asset
value
May 31,
$3.46
of $4.04
1950, as
share
per
compared
a
a
share
per
year
THE FULLY
net
on
with
ADMINISTERED
earlier.
Knickerbocker
FUND
Fund
EATON & HOWARD
Group Securities, inc.
STOCK FUND
A Balanced fund
for the
Diversification,
Supervision and Safe-keeping
of Investments
PROSPECTUSES OF THESE TWO MANAGED INVESTMENT FUNDS MAY
be obtained from
BY
REQUEST TO YOUR
INVESTMENT DEALER OR
Prospectus
TO
the
Tlie Keystone Company
i
of jBoston
EATON & HOWARD
50 Congress Street
TWENTY-FIVE YEARS OF INVESTMENT MANAGEMENT
■
■
BOSTON
.
.
a
Boston 9, .Massachusetts
i
prospectus on
from your
;
24 Federal Street
BOSTON
may
investment
dealer
and
company
obtained
be
its
from
describing
shares,
in-
'
eluding price and terms of offering.
INCORPORATED
•
„
on
MUTUAL
your
\
income
Continued
of
BALANCED FUND
BE OBTAINED
■i
and
.
(Series S1-S2-S3-S4)
^
31
of
.
COMMON STOCKS
i
31, last, 388,620
375,282 on May
May
on
Dec.
on
Shares outstanding
each period were
of capital
and
relatively stable
income, has added substantially to
reserve funds.
At May 31, 1950,
made, however,
investor education.
52,668
of
end
stresses
thoroughly
continuously in the advan¬
tages of the long-term view. To a
certain extent, the funds last week
reaped what they have sown in
The
on
$8,151,502
and
it
from May,
stability, the funds them¬
must
holders
200,
40%
almost
May, 1950.
stocks
common
EATON & HOWARD
may
increased
conservation
maintenance
PREFERRED STOCKS
Prospectus
period of any corre¬
sponding fiscal period in the com¬
pany's history. The report noted
that
net
asset value
per
share
were
Net Asset Increase
prices,
highest during this
six-month
Total net assets
Nation-Wide Reports
Investor Education Is Key
declined
during this period only 61 cents,
investing their capital
(Series K.1-K2)
our
Nov.
on
statement
that
Fund
but no broad change of policy is
contemplated as yet. We want to
weigh the longer run implica¬
t
;;
end of our
/
damental
device.
management's
was
Wellington
orders
loss
stop
Typical of
approach
>
in
out
This
assets.
35.3%
depleted inven¬
industries.
view
long-term
investors.
small
uncovered
48
net
our
with
by
market
with
INCOKPOHATED
CHICAGO
of
.
short supply,
a
tutional
local
from
and
pointed
stability section represented 44.2%
for mutual funds' contributions to
less
Huch W. Long
At
relative
a
—
Shares, Ltd., reported very little
selling by experienced and insti¬
descriptive
available from
any
ings are good, and consequently
dividends, and the business boom
of
other
Bullock
of
assets
history,
have
With the rise in
crisis which contrasted
sharply with the evident hysteria
York
Stocks, Inc.
and
Prankard,
less
funds,
shareholders.
Prospectus
I.
net
Fund, Ltd., on May 31 were at
shareholders,
the highest level for the end of
2nd, President,
the market has moved upward.
the end of May, the capital
as
Manhattan
during facto market opinion is that the
a market break, would accelerate
makings of a crash were certainly
the downward trend by dumping not
at hand
because the pricelarge blocks of securities in order earnings ratio is still low, earn¬
ment
Inquire about=
Own Record
Total
to
stated:
Test Distorted
Market Break Finds Funds
Established 1894
Last
1%.
of
redemptions
the proper legal framework,
Dealers
H.
report
May 31, 1950, total net as¬
Nation-Wide Securities, a
"balanced"
investment company,
is, of than
one-third of 1%.
course, investment trusts.
In dis¬
amounted to $15,177,504, equal to
"Overall," Mr. Long reported,
cussions with labor leaders and
$14.62 per share on 1,038,424 out¬
"purchases of shares by present
pension trustees, Mutual Funds
standing shares.. These compare
shareholders and by new inves¬
with $13,604,986 or $13.97 a share
might do well to present to these
tors during
the week exceeded on Dec.
prospects a detailed analysis of
31, 1949 and $11,576,147
redemptions by a reasonably large
the Swiss problem.
or
Such a prob¬
$12.55 per share on 922,069
margin."
lem could arise here.
shares on May 31, 1949.
An
-
the
Fundamental
min¬
a
imum of 3% from State bonds and
of
from
Bullock Fund Breaks
the
ing and noon Friday, June 26 to
liquid funds held by June 30. Results of the survey
banks
and
insurance
companies were similar to the experience
have driven the interest rate on of
Wellington Fund.
Excessive
Dividend Shares
his
In
"As I
Bank.
Bullock Fund
earlier.
fiscal period in the company's
according to the semi¬
annual report for the six months
mulated General Insurance Fund
recent quarterly reports, we have
Hugh W. Long & Co., which
ended
May 31.
Net investment
for Old Age and Survivors are in
manages
three
funds,
made
a been shifting some of our invest¬ income per share of this "growth
dire straits, according to figures
study of sales and redemptions ments from common stocks to fund" managed by Calvin Bullock
compiled by the Swiss National between 10 o'clock Monday morn¬ securities held for capital stability
also was
Swiss insurance
RESEARCH
year
security
reduced
prior to the break,
common
stock holdings
May
income, exclusive
profits and losses, of
$910,000 and net realized security
profits of $1,139,590.
of
government bonds
and
reported
company
investment
net
By ROBERT R. RICH
the
1950,
cash
Thursday, July 6, 1950
.
$33,- amounted to 14.86% of total net
assets
compared with 4.5o%
a
the six months ended
For
31,
on
were
..
333
Montgomery Street
SAN FRANCISCO
Distributors Group,
63 Wall
request
investment dealer
KNICKERBOCKER
SHARES
INC.
or
Incorporated
General Distributors
Street, New York 5, N. Y.
NEW
CHICAGO
:
YORK
.
LOS ANGELES
:
Volume 172
Number 4922
...
The Commercial and Financial Chronicle
(77)
relatively
Investment Problem
income,
generous
safe.
or
conservative investment.
Investment Problem of Pension
Of Pension Funds
agement
sets and at the
drive
for
systems
has
effective
in
securitypension
and
been
recent
exceedingly
months
and
result, a
tantly
growing
as
a
cons
number
c o r
of
orations
p
are
setting up
appro priate
plans. Since
1949, pension
plan programs
have
cording
H. J. Simonson, Jr.
plans
billion each year into pension ac¬
counts of which about half goes
into current benefits and the bal¬
to build up reserves to cover
future benefits.
ance
The largest pension system now
in effect appears to be that of the
American
Telephone4 and Tele¬
graph1 Company and its subsidi¬
This Bell system covers about
600,000 workers and the fund is
over $1 billion. By
reported to be
simple
arithmetic, if it takes $1
billion to fund the pension plan
for
600,000 Bell system workers, it
should take about $10billion to fund
ited
the provisions of the
he
the
tendency
is
maintain
ments
for
companies
control
of
the
of
the
pension
fund
conditions
be made
can
relatively
If
Based
on
the
There are, however, cer¬
disadvantages, and many
employees object to a pension re¬
serve which is entirely dependent
the future
on
success
of the
compilation, it will
serve
to
give an idea of the astronomical
figures which are involved.
near
term, annual con¬
tributions of corporations to pen¬
sion programs
will aggregate from
$2 billion. While this
seeking investment each
will have a vital effect on
the money market, it is not likely
that any problems will be created
which cannot be met by gradual
readjustments.
Likewise, it does
not appear that the volume of
pension trust funds seeking in¬
year
over
the foreseeable fu¬
ture will cause any
major change
in trends which would otherwise
prevail in the money market.
are
Financing
Pension
Programs
Once the details of the
pension
have been crystallized,
including effects of future social
security payments, contributions
program
by employees, if any, it becomes
to provide the mechan¬
the availability of
assure
and
the
pressing need for more
adequate income.
neighborhood of 2Vz%. In sharp
contrast, many good quality equi¬
ties with long-term continuous
dividend payment records and ex¬
cellent consistent earnings records
for several decades, are currently
available to produce returns of
the
from 4% to 6%.
The
the
With
pension funds, the prob¬
directly yield per Sc
but rather long-term return as i
lem
is
not
the
As
average
return increases,
contributions
cash
annual
of
the
manage¬
pension funds is therefore
in "legal" issues
conservative
000
count
investment
rently would be around $2,800. To
Continued
on
is
tered"
a
plan,
to
tions.
growing
Under
tendency
especially
sized
medium
are
not
earmarked for individual
changes can easily
turnover, inte¬
gration with government pensions,
wage increases and other unpre¬
dictable f u t u r e developments.
There is also the possibility that
beneficiary provisions might be
be made for labor
849,940.00
Loans and Discounts
78,816,164.10
.
566,186.75
.
877,987,89
.......
7,472,276.64
Mortgages
Liability
Banking Houses
needed, is probably the
However, as a
method.
long-range policy, it is not desir¬
Acceptances
Accrued Income Receivable
Other
.
...
.
on
1,980,780.55
....
Assets
95,217.90
.
$792,224,895.44
LIABILITIES
liberal in the event that the
Capital (750,000 Shares of $20 Par Value)
...
Surplus
$15,000,000.00
25,000,000.00
$ 47,359,705.98
7,359,705.93
Undivided Profits
Reserve for Taxes,
1,314,189.94
Expenses, etc
Acceptances Outstanding
.
Less: Held in Portfolio
$1,682,762.41
.......
.
.
.
.
.
.
605,294.29
1,077,468.12
.
742,473,531.40
Deposits
(Includes $18,506,663.08 U. S. Deposits)
$792,224,895.44
fund grows faster
than originally
contemplated because of favorable
market developments This flexi¬
bility is one of the principal ar¬
guments in favor of this type of
A
prime
Memorandum
:
U. S. Securities
pledged
required by law
of
any
pension plan is, of course, the net
cost to the company. This net cost
gives effect to earned interest and
dividends,
capital
appreciation,
tax savings and cost of adminis¬
tration.
If the management feels
that a realistic investment policy
will enable a larger return than
possible, for example,
government obligations,
teed method permits the
eral investment policy
U. S.
the trus¬
more lib¬
on
to
be
set
ROBERT A. DRYSDALE
It is in connection with the ad¬
can
deposits and for other
a
do outstanding service
fill almost any
desired investment
objective, be it long-term growth,
OF
Mills, Inc.
JOHN H. PHIPPS
B. SHERER
JOHN R. Mc WILLI AM
Executive Vice President
Chairman
C. WALTER
HERBERT J. STURSBERG
Tr-asnrer, Livingston Worsted
Drysdale & Company
DUNHAM
$27,925,641.79
.
DIRECTORS
PETERS, JR.
President
NICHOLS*
EDMUND Q. TROWBRIDGE
E. MYRON BULL
Chairman, Nichols Engineer¬
President, A. H. Bull & Co.,
ing & Research Corporation
Inc.
GEORGE
BRUNSON S. McCUTCHEN
DOUBLEDAY
Chairman, Ingersoll-Rand
Company
Senior
SIDNEY A. KIRKMAN
Consulting Engineer
WILLIAM G. HOLLOWAY
A. PATTEN
JAMES A. FULTON
Chairman, VP. R. Grace &
The Corn
Pres'dent, Home Life Insur¬
Company
Vice President
trusteed invest¬
since specific types of Funds are
available at reasonable cost to ful¬
purposes as
.
RALPH
Senior Partner
HENRY
up.
Funds
to secure
.
BOARD
consideration
ment fund that Mutual Investment
system
raises
1,200,000.00
Other Securities
corpora¬
ods is used.
"pay-as-you-go"
19,506,433.89
....
this
ministration of
under which the employer
464,294,184.19
retains
beneficiaries,
more
$216,565,723.53
State, Municipal and Public Securities
among
method, the
control over
the investments of its employees'
pension funds.
Since the funds
corporation
.........
U. S. Government Securities
48
Method
There
i;
Business, June 30, 1950
ASSETS
Customers'
ance
Company
Exchange Safe Deposit Company operates vaults in
59 of the 76 branches located
from
"legal" bonds the management of
REPORT OF CONDITION
Federal Reserve Bank Stock
ac¬
"legal" securities could
easily produce an annual income
of $4,600.
By 1937, the income
dropped to around $3,800 and cur¬
in
investment
Cash in Vaults and Due from Banks
are
proportionately less. Accordingly,
management of pension fund in¬
vestments must look critically at
the annual return. In 1928, a $100,-
offset this declining income
dilemma
ment of
Question of Yield for Pension
Funds
com¬
funds when needed to
meet
pension
payments.
The
principal methods by which vol¬
untary pension plans may be fi¬
nanced are commented on briefly
below.
In some cases, a combina¬
tion of two or more of these meth¬
adequate
as
U. S. Government issues in the
on
program.
oldest
invest¬
yields from this group
low and comparable to yield
At the Close of
Advantages of the Trusteed
tc
serve
between risk
factors inherent in equity issuer
ESTABLISHED 1853
Real Estate
available
affects the net cost of a program.
forced
curities,
invested
in the plant, machinery,
equipment and inventory of the
corporation.
Cash is
conserved
and adjustments to meet changing
to
the slack
up
Trust Company
A corporation may finance its
pension program by setting up
appropriate book reserves either
annually or periodically.
Under
this plan, in effect, the fund is
small
cash
Investment Funds which
take
altered circumstances.
accurate
The
the
in
toward the trusteed "self adminis¬
to
advantage of
Corn Exchange Bank
to
60,000,000 workers would
be
around $10 billion.
While this
arithmetic is far too simple for an
necessary
the
demand for the "legal" se¬
ment
a position to adjust
readily for unforeseen changes or
pension pattern of the recent steel
settlement, annual requirements
to provide eventual pensions for
ism
of
Because
"legal" list aren't always
invest¬
pany.
of
investments.
trustee
order to be in
in round numbers.
Methods
take
can
easily.
industries.
vestment
that
was
2V4%
returns, or a balanced program
of high grade bonds and stocks.
Many companies turn to Mutua,
be lim¬
may
investments
tain tax
to
on
right, or the trustee may invest
only as specifically directed. The
pensions
are
eventually provided for the
estimated 60,000,000 workers, then
we are talking about $100 billion
$1
a
committee
by type, class, or by spe¬
cific issues; the corporation setting
up
the plan may have a veto
the program for six million workers
amount
bonds not on the "legal" list
comparable quality, but
that the "legal" list bonds often
sold at premiums (with resultant
low
yields) just because they
were eligible for savings bank and
of
or investment in selectee
and diversified common stocks tc
The trustee may
discretion;
to
as
in
Over the
the
that
of
were
corporate and mu¬
bonds.
In recent years,
been
the
found
also
return
low
a
many
so-
"legal" investments, which
has
income,
to
with
2%%,
make
already in effect cover from 4,000,000 to 5,000,000 workers. Em¬
ployers are paying more than $1
other
was
the
in
in
through 1940.
respect
committee
same
popularity
in
to
have full
esti-
tnated that
aries.
invest
With
tendency to
able from the standpoint of either
question
the
wisdom
of
such
management or employees.
"legal" investments not only from
The pension plan may be fund¬
the standpoint of effective yield
ed through purchase of annuities
but also as to safety of principal.
from an insurance company
Prior to the legislation in New
either on a group or individual
York State allowing trustees to
basis.
Under this method, the lia¬
use
their own judgment on in¬
bility of the employer is fixed.
vesting up to 35% of trust funds
However, the method is inflexible
in common stocks, a committee of
and in many cases the total net
the trust division of the New York
cost over a
period of years is
State Bankers Association made a
somewhat higher than if a selffour-year study.
The conclusion
administered trusteed plan is used.
trust indenture.
industries.
pension
to
was
article
the list went into default
on
from 1928
past,
selected
nicipal
of
glass
is
bonds
is the "legal" list doesn't always give as
trusteed method whereby periodic
much
protection as a trustee's
payments in cash are made into a
For one thing, bonds
trust account to be invested ac¬ good sense.
rapidly, espe¬
cially in the
steel, automo¬
It
were
there
Growing
spread
bile and
authorized
called
committee,
recent
11,1950
Ill) to the effect that more
$800 million par value of
p.
these objectives could ordinarily
be accomplished by setting up a
trust under which the trustee
the
a
than
as¬
time to main¬
same
tain adequate income. In the
Pointing ont rising volume of accumulated pension funds will
new investment outlets, Mr. Simonson recommends util¬
izing mutual fund shares as means of obtaining higher income
and greater diversification. Says sound mutual funds wJl also
serve as inflation hedge and are suitable for all size accounts.
Stresses diversification advantages of mutual funds.
insurance
principal
in
"Business Week" (March
man¬
corporate pension
a
fund is to preserve
require
Labor's
of
headed
quoted
The basic problem of the
President, National Securities & Research Corporation
through
who
Funds
By HENRY J. SIMONSON, JR.
Bascom H. Torrance, Vice-
President of the City Bank Farm¬
ers Trust Company of New York,
17"
throughout the City of New York.
Member Federal Deposit Insurance Corporation.
1
page
21
18
The Commercial and Financial Chronicle
(78)
.
.
Thursday, July 6, 1950
.
a
Capital lor Development-
Bank and Insurance Stocks
By H.
common ground of understand¬
ing and cooperation.
.
The
Role oi the Securities Act
E. JOHNSON
this
The
operating statements
SEC
of the major fire insurance com¬
without question, the most profitable
period in the history of the fire insurance industry. Underwriting
results were extremely favorable with all lines contributing to the
profitable showing. Investment income also improved and re¬
flected the larger volume of invested funds and a higher return
was,
year
from stock and bond
holdings.
For the most part, the same
into the first half of the
that all
those
companies will
of
a
year
trends should have carried over
While it is not possible
It takes
current period.
be'able
an
to show results comparable with
lot to make
and
tend
to
wars,
its
scientif ic
_
nation.
a
history
its diplomacy, its
stress
showing is favorable.
aid in keeping
and
technological
tured their
ing
dramatic per¬
to exhibit
an
tion
To
public, is
one
tributions
of
finance.
extremely high rate of business activity and increasing inven¬
terested in the
There is also the
financial
modern
The gain in volume, however, should keep the loss
showing any material change.
larger losses.
ratio from
Nevertheless, the
of
reappearance
new
an increase in fire losses.
of Fire Underwriters shows
of the National Board
in losses for the first five months of
1950
following shows the monthly comparisons so far this year
and the corresponding periods of the two previous years.
Also
shown are the yearly figures for 1949 and 1948.
1950
January
1949
what
$58,823,000
$57,926,000
62,124,000
71,521,000
72,468,000
61,605,000
67,218,000
biased, if I were to rewrite
and
physics
the
the
praising
Months
Total
$310,001,000
$296,720,000
be
$331,774,000
51,787,000
-----
July
as
54,706,000
49,678,000
49,945,000
control
October
49,914,000
51,845,000
52,949,000
gone
December
12 Months Total
Because of the increase in losses and the
trial
activity
valuations, it
of
69,397,000
trend
over
gaining
as
the
a
handled.
also
may
show
few
past
a
small
gain.
physical
has
energy
to preserve savings, and
their
ment has
pressive
flow
invest¬
into
required a skill
as
physical
scientists
as
im¬
which
for
any
the
claim
can
credit.
This
This
has. been
the
born
been
has
of
necessity. * Without this
flow of savings into investment,
with
The combination of these various factors
should result in
generally favorable underwriting record for most companies.
development
kind
our
of
economy
simply
is
impossible of achievement. With¬
a
out
it,
would
we
be,
the
and sci¬
from
standpoint of industrial
income, good gains are indicated, especially
entific progress, back somewhere
among those companies holding sizable amounts of common stocks.
in the early part of the industrial
Dividend payments on equities this year have been ahead of
last
revolution.
year by as much as 5% to 8%. The
quality issues or'"blue chips" "
It is this vital process in which
in which the fire insurance
companies have- their major commit¬
we
have a part.
I say "we."
ments have done especially well.
You, in Canada, have a very di¬
Stocks like General
Motors, Chrysler, duPont, General Elec¬
rect and important role.
I, as a
tric, Westinghouse, I.B.M., and Allied Chemical, as well as
many
regulator, or what is frequently
others are currently paying
larger dividends than they did in the '
called, with more candor than
first half of 1949. A larger volume of funds has
also helped to
flattery, a "bureaucrat," am in¬
As to investment
.
augment income.
While
there
volved in many
will
be
considerable variation
among
companies, there have been indications that investment
>ome institutions is 15%-20%
proposition, gains of 5%-10%
On balance
we
As
year ago.
income of
a
general
not be unusual.
exchange. The major func¬
the stock exchange is to
of
provide
analysis
on
NATIONAL BANK
of
Bank
Available
on
Members New York Stock Exchange
Members New York Curb Exchange
ISO BEOADWAY, NEW YORK 5, N. Y.
to
the
Government
Bishopsgata.
London, E. C.
Branches In India,
Burma, Ceylon, Kenya
Colony. Kericho, Kenya, and
Aden
i
and
Zanzibar
Subscribed Capital
Paid-up Capital
rather
But
Reserve
Fund
£2,000,000.
:
£2,500,000
Teletype—NY 1-1248-49
ThCh?nku,i!0-dlict8
banking and
,
e7ery description of
exchange
_
Trusteeships
and
business
than
a
source
of
our
security
modern
trading
system
of
tured
on
is
enterprise
an
willing
wealth
and
to
to
which
commit
his
his
energies. Today's
capitalists are millions of people
whose
possible need for ready
cash
time in the future
some
made
them
extremely
therefore
insist
transform
or
to
conscious
liquidity and who
on
being able to
investments
switch
has
into
investment
at
These people would not have
completed
Executorships
*An
Entire
address
at
the
of
by
Commissioner
Montreal
Stock
Montreal, Canada, May 30, 1950.
I
it
en¬
itself.
The
cestors
of
against
stock-watering
modern
our
of
coin
the
be
cial
as
of
as
grow and expand,
that
require
lic
strong
a
that
not
that
in
mon
omy
of pub¬
is
a
ironies
of
sound economy
internal
mere
in
come,
a
fact.
sense,
of
security—in fact in
And I
this
do
It
our
in
maintenance
kets
•
are
together
In
like
fingers
the
and
an
share
independent United States
most
of
a
continent
and
a
mutual
states, and
modern
our
Federal
ap¬
dramatically dem¬
describe
can
that permeated
the
the
mar¬
before the crash is
hysteria.
to
that
keeps
reality,
for
markets
investors
were
the
fire
of
rush
the
for
business,
as
customers,
relation
*
tip,
rumor
uninformed
as
some
and
many
of
securities
to
facts,
and
im¬
were
pelled to give the markets a helping hand to keep those prices up.
More
independent Canada
state
house? had brought out issues at
prices ballooned away from any
locked
of
was
their
of
clasped hands.
an
our
a
often
the
potentials,
as
these
were
they were
buying, without the anchor of in¬
re¬
public
economic
noti¬
and hunch.
sur¬
flow
stat¬
the
Without adequate and current information about what
tinder
common
that
fact
close
savings into investment, and the
development
of
our
maximum
Just
as
made
formation
be¬
n^j^to
free
a
time
finance,
our
of
and
only word that
longer
our very
not
audience
confidence
fraud
authority of
feeling
on
has
offered
notification
are
onstrated in the crash of 1929 and
the depression that followed.
The.
major job in
a
maintenance
no
qualifica¬
proach to the problem necessary.
com¬
our
is
ga¬
qualification
That
business and
premium
the
be
economy,
of
the
of
to
to recog¬
one
a
between
of the
growth and prosperity. It is
that
securities
come
high
a
prescriptions
of
the complex nature of
that
wide¬
vary
run
of
Important
purpose of keeping our econ¬
growing and prosperous.
There
laws
statutes
financial
in
us
state
laws, the constitutional limitation
regulation and business
of
staff at¬
a
Chairman of
as
themes.
counteracting forces, but
those
as
the
seven
fication,
shalt
government alike share the
with
for
on
discover
we
when
our
have
processes, we
nize
as
in
utes, and variations
economies
measure
confidence
are
In
channels of investment
open
was
which
law
utility, railroad and
regulatory functions.
tailed
same
"thou
our
statute
These
tion
code
a
But
such
regulatory devices from
the simplest general
power given
to
a
state
attorney general to
enjoin fraud, to the most de¬
elementary stages finan¬
regulation may be adminis¬
nots."
it
public
mut
its
tered
Manitoba
task to deal
my
Out
basic character.
In
since
State
ly.
realm
pretty much of the
are
of
second
I served first
with
against clipping and the integrity
of a share of stock against dilu¬
tion
subject,
might mention in passing that
other
rules
the
of
pride,
particular au¬
any
Commission which ad¬
ministers the securities law along
found in rules against the clipping
of gold coins.
And indeed, pro¬
tection
statutes.
local
a
was
the
an¬
will
little
torney and later
regulation.
or
finance
as
conservative
houses
had
no
and
choice
informed
but
to
do
business at current market
levels,
or
to stay out
altogether. It was
banquet, and, as my fellow
Commissioner Ed McCormick re¬
cently had occasion to say, it was
border, so have we been
highly and increasingly interde¬
pendent.
Our geographical re¬
a
problems,
justice,
a
lationship,
our common
common
our
will.
of human
ven-
our
Exchange,
by
of
period of years, 47 of our
48 states and all 10 of
your prov¬
inces have done likewise.
other, govern¬
regulation of finance is as
ment
old
cash
Mc¬
over
always
another line
government
form
some
of
think
we
Following these enactments,
years
—that
the
get
provincial
a
Province
1912.
fi¬
individual
of
to
regulation
as
the
on
been
in
the
for the exact
liefs—all
concepts
of
banquet whose main staple
was
ignorance.
rights and dignity, and
common
forces
also undertaken
fines
so pa¬
enough, it
the
of
and
of
with
Kansas
mind
without
enterprise
of
sales,
with
not
deavor. " The triangle has
the
capital investment would be as
impossible
as
a
"city
without
streets.
The capitalist is no long¬
er merely the man who has ven¬
he
two
vival.
of the need for
£4,000,000
Telephone: BArclay 7-3500
(L. A. Glbbs, Manager Trading Dept.)
Specialists in Bank Stocks
la
Kenya Colony and
Uganda
Head Office:
26,
request
Laird, Bisseil & Meeds
INDIA, LIMITED
Bankers
Stocks
Industrial
of
countries
two
our
so
said
state
governments,
it did in Canada, with the
enacted
nancial capital meet at the vertex
se¬
capital.
new
pre¬
trading market for
a
markets
leading New York City
Bell
stock
of its aspects. Of
is that of a
role
your
curities
good showing in comparison with the
quarterly comparison
and
course,
tion
a
year.
Our
19
may
a
would expect the operating results for
the first
six months to make
vious
ahead of
different
Regulation
been
was
my
own
State
of
Kansas
which passed the first such law in
1911. Interestingly
amounts
Securities Marketing
...
operating costs gradually
reflection of the record volume of business being
years
of
direct
to
as
somewhat higher costs and property
that totals for the six and twelve-month
periods would be higher than last year.
;. •
Expenses
reserve
an
necessary
$711,114,000
.
credit
energy." To create the techniques
high rate of indus¬
.
and
advance in the science
of what one might call "credit-
appears
-
an area,
Along with our advances in the
well
as
measure
mines.
50,955,000
49,543,000
$667,536,000
large
But
have
various
as
thority
merged and trans¬
are
Government
In
49,592,000
50,150,000
58,116,000
67,279,000
to
be with its rivers and
I would
as
August
November
wealth
ap¬
I wopld
concerned with its potential
September
..
which
at
in
history
speak
if
rency—i.e., the corporate security.
modern
of
I
Were
of credit flow
June
in
engine
growth
civilization.
the prospects
5
I
the
and
people
to
tonight
straight.
enactment
ex¬
ferred through the medium of one
of our new forms of capital-cur¬
stock
common
diesel
the
above
74,236,000
63,751,000
59,256,000
55,290,000
54,162,000
58,7-35,000
be some¬
may
the
just
try bookkeeping near Newtonian
$63,010,000
58,340,000
values
of
preciate.
history, I would rank double en¬
February
April
May
McEntire
which
at
remarks
my
regulation today, started in
United States with action by
the
val¬
determines
you
such
behavior.
well-managed
a
only
not
United
subject which is
securities
buy
but at times determines the
sell,
^'c'iart'
Therefore, while I
1948
March
—
levels
failtoap-
The
on
change
often
citizens
of 1949.
Trading
fellow
our
economic
and
ues
the
together
The
orderly market have become
prime indices of underlying
which
nance
rise of 8.5%
compared with those
as
and
econ-
natural¬
ly see the im¬
portance of fi¬
The estimates
a
our
jomy,
inflationary trends has
already been reflected in
of
pects
probability that most companies will report
of
Development of Regulation
is
standing example.
as¬
written
record
certainly an out¬
But the serv¬
ice of an exchange does not end
at that point. Quotations on a fair
tories, premium writings should continue to increase.
in
elementary.
seems
time
exchanges, of which the Montreal
Exchange
other
fields
tently wrong, that I trust you and
I are justified in
spending a little
securities
You and I, in¬
of
many
about this
the prime con¬
residential construction at record levels this year, combined with
an
its
securities
seem
much
a ven¬
palatable
is
the
Therefore, I should like
of
will
be
to
making
modern
the
of
in
ways
States.
and
of
re¬
discuss the philosophy and the
operations of the federal regula¬
no
but
our
should each have
to
securities investment
to broad areas of the
haps,
pervaded
we
understanding
finance.
less important,
further moderate gain.
has
country's
Providing liquidity, and there¬
During 1949, after several years of rapidly
rising volume, there was a tendency for underwritings to level off.
The gain in the first six months of 1949 was approximately 8%
and for the full year around 5%. With automobile production and
first half is expected
meant
that
lations that
capital at all, if mak¬
investment
an
by
the
will
economy grow¬
ture.
achievements.
Somewhat less
volume for
securities
indefinitely locked in with
a
Premium
of
laws against coin clipping.
as
prosperous.
a
Headlines
there should be many instances where the
ago,
regulation
government
essential
as
day
boun¬
our
accompanying interflow of credit.
It is important to the basic good
Stresses Securities Act of 1933 merely
requires "full disclosure" and does not seek to regulate flow
of capital. Recalls SEC efforts toward simplification of pros¬
pectus, and denies registration process is expensive or that
SEC is "a policeman patrolling a beat."
ing and
'
past
defends
just
as
Sees in securities regulation
relatively favorable operating conditions.
The
member
markets
Every
cross
two-way stream. And
a
with this interflow of goods is an
Member, Securities and Exchange Commission
panies for the first six months of the current year should soon be
available.
It is generally expected that the results will reflect
bond.
goods of life
daries in
be¬
commerce
countries is symbolic of
our
common
the
By RICHARD B. McENTIRE*
Week—Insurance Stocks
This
extensive
tween
disdain
world
for
which
opposite of
of these
those
stand
our
be¬
things provide
Passage of Securities Act of 1933
It took many years and
get
us
gestion
through the attack
that
followed
a war
to
of indi¬
that
ban-
Volume 172
quet.
Number 4922
None of
would
.
.
The Commercial and Financial Chronicle
.
like
to
had
of
us
another
before
it
whole
a
tries and
the
state
statutes.
were
as
Many
ideas
advanced. In the main, there
two points of view. One of
were
were
these
urged
decide
on
merits of
the
from the unsound—and to achieve
protection of investors by the ex¬
ercise of judgment concerning the
wisdom of investment in an enter¬
prise and the likelihood of its
suc¬
cess.
The other
viewpoint was simply
require that the relevant and
to
pertinent facts be made available
to the public, that such facts be
lack
work?
of
In
curity
can
the
Act
Securities
general,
before
liberate
se¬
method.
a
be publicly offered the
usually
choice
of
ment
leging the deficiencies in the reg¬
its entirety, I
does
not
allow
for material information about the
a
business
of this statute in
the
should mention that
exemptive pro¬
and
financial
record
This filing is in¬
company.
it carries certain
spected by
visions, it provides penalties for
selling
securities
fraudulently,
If
and it
mented the staff will send
it
our
of comment to the
been sold in violation of the stat¬
ing the matters
All these
are
common
letter
issuer, suggest¬
which fuller
upon
disclosure is necessary. This letter
is sent within a short time after
pro¬
visions, going no further than the
If
In
where
we
are
wilful attempt
technique,
convinced
a
has been made to
flout the disclosure
or
that
will recommend that
declared
effective; and,
be offered. Here, too,
requirements,
comment.
Commission
and
complete
After that,
or
it
hasten
can
ligence
as
to indicate that a letter
"disclosure."
invests
disclosure
a
the
statute.
Securities
and
It
Irving Trust Company
Ex-
NEW YORK
change Commission with abso¬
lutely no power to pass upon the
merits of security issues.
It per¬
mits anything—I repeat, anything
—to be sold, requiring
only that
information
possible
securities
STATEMENT OF CONDITION JUNE 30, 1950
to make
appraisal of the
necessary
fair
a
be
giyen to those who
invited to purchase.
are
I trust that I
can
make this
one
clear, and I emphasize it
because
first,
it underlies
the
whole
of
philosophy and operation
system, and secondly, be¬
our
cause
much
so
misinformation
to be extant concerning it.
we see or hear comments
seems
So often
about
getting
having
our "approval," or
"pass upon" an issue of
us
Cash and Due from Banks
.
$
.
U. S. Government Securities
WILLIAM N. ENSTROM
311,956,317
.'Chairman
436,218,284
.
of the Board
RICHARD H. WEST
President
U. S. Government Insured
F.H.A.
Mortgages
.
8,515,028
.
HARRY E. WARD
Honorary Chairman
Other Securities
securities.
DIRECTORS
ASSETS
point
.
14,267,990
.
HENRY P. BRISTOL
Not
only
quired
prove"
a
are
to,
even
neither
we
allowed
nor
security,
makes it
a
but
re¬
the
law
criminal offense
to represent to anyone that an is¬
has
sue
our
"approval."
purely personal word, I would like
to mention another thing in this
that
Loans and Discounts
Chairman of the Board,
3,150,000
Bristol-Myers Company
A moment ago, I said
I
thought
Congress
had
wisely in providing for a
disclosure procedure instead of a
regulatory formula. I meant that
405,488,334
.....
JOHN F. DECENER, JR.
C. A. AuffmonJl & Co.
First
Mortgages
on
2,163,365
Real Estate
WILLIAM K. DICK
Headquarters Building
If I may be pardoned for another
connection.
Stock in Federal Reserve Bank
"ap¬
to,
Customers'
for
14,157,200
....
New York. N.Y.
GEORGE F. CENTES
Liability
Vice President
6,099,822
Acceptances Outstanding
Other Assets.
I. J. HARVEY, JR.
President,
3,497,159
.
The Flintkote
Company
chosen
$1,205,513,499
and
adminstrative
LIABILITIES
DAVID L. LUKE, JR.
President, Weal Virginia
discretion
providing for the exercise of
Pulp and Paper Company
Capital Stock
$
......
50,000,000
HIRAM A. MATHEWS
administrative
judgment,
when
the availability of a limited mar¬
ket only is involved. Indeed as I
have said, I administered such a
law in my home State. But in so
doing, I was affecting the possi¬
bility of sale to the people of that
state, and only those people.
that it is wise
or
in normal
proper
times to invest any group of five
men
ter)
(or fifty
with the
for that mat¬
men
power
and the
sponsibility to sit in judgment
the economic life of any
enterprises
sary
tal.
re¬
on
my
a
taskj and I
colleagues
mission feel the
do in this
regard.
Law Merely
on
same
Undivided Profits
all
-am sure
the Com¬
that I
way
Vice President
MICHAEL A. MORRISSEY
14,113,398
....
Chairman of the Board.
The American News Company
Total
$
Capital Accounts
119,113,398
PETER S. PAINE
$1,068,961,562
Deposits
Other
Expenses
President,
New York & Pennsylvania Co.
Dividend
Payable
LeROY A. PETERSEN
....
....
President, Otis Elevator Company
3,638,334
1,000,000
J. WHITNEY PETERSON
President,
Acceptances: Less Amount
JACOB L. REISS
in Portfolio
Other Liabilities
President,
7,057,243
5,742,962
Reiss Manufacturing
Greenwich, Conn.
$1,205,513,499
WILLIAM J. WARDALL
New York. N. Y.
United States Government Securities
Of these, $38,990j878
monies and
are
are
pledged to
stated at amortized cost.
secure
FRANCIS L. WHITMARSH
deposits of public
President,
Francis H.
for other purposes required by law.
Calls fWi"Full
'*
•
Disclosure"
The
Securities
Act
J '
'
t
-
.
'
of
1933
v
is
.
>
not the
only one which pur Com¬
mission administers; but since it is
the
one
which has
prirtiary rela¬
tionship to new issues and hence
of capital""forma¬
tion, I have so far, and will largeto
the
process
Corporation
FLETCHER W. ROCKWELL
*:
'
|
United States Tobacco Company
neces¬
to go to the public for capi¬
For myself, I would °ot un¬
dertake such
that
and
which find it
55,000,000
Surplus
Reserve for Taxes and
However, It is a very different
thing to be dealing on a nation¬
wide basis, and I do not believe
♦X
Vice President,
with all my heart. I have no quar¬
with state or provincial laws
giving
HAROLD A. HATCH
Deering Mtfliken Si Co., Inc.
rel
member
federal
deposit
the
Continued
Congress considered these
schemes, and chose. I think
is
either require an
time of ef-
there has been such gross neg¬
The
which
add
statutory twen¬
ty-day period, after its registra¬
tion statement is put into shape,
having available those
that it chose very wisely.
It en¬
acted the Securities Act of 1933,
me
issuer to wait the
facts, the individual would be left
entirely free to buy or not to buy,
depending on his own judgment.
two
let
Under the statute the
can
nothing more.
word, that there be achieved
full
it
upon
.effectiveness, the securities may
a
very
response
comment
investor—and
a
full
that
to the
satisfactorily
the registration statement
the staff
be
Is
rarely used, and is used only
that
issuer's
of
corrects
securities from being sold.
However,
the
letter
placed in the hands of the poten¬
tial
a
and
rrore
progress
could be made,
with less interference in programs
a for¬
law, al¬
(if after a
hearing, the record sustains the
allegations of deficiency) issuing
a stop order which prevents any
that the statement
be corrected or supple¬
a
comment, institute
istration statement and
appears
needs to
of
mal proceeding under the
staff of experts.
gives to a purchaser certain
legal fights where a security has
ute.
of
give
statement
of business financing, by the in¬
ter
time
correct
formal and cooperative technique
of the letter of comment.
ties and Exchange Commission a
registration statement. That state¬
While
pur¬
The Commission has the
and leaves with the individual in¬
ment decisions.
nd
no
legal power to wield the big stick.
It can, without sending such a let¬
vestor the
is, in effect, a series of re¬
sponses to prescribed items calling
serve
19
We have found that most
issuers are anxious to
administrative
issuer must file with the Securi¬
responsibility of invest¬
of comment would
pose.
security to be issued.
a
detailed recital
sound
or
peoples hold.
—
within 10 days.
requires that the truth be told,
It
good from the bad
the
merits
our
Registration Process
does
How
ity to any governmental agency to
"regulatory" form
statute, where an agency would
be created and, in effect, empow¬
ered to pass upon the'merits of
security issues — to sort out the
a
of
—
I may note here that this tech¬
nique of informal comment on
registration filings is itself a de¬
The
of* sometimes called the "truth in se¬
It gives no author¬
- curities" law.
range
possible plans—as varied
the filing
we
common
Faced jLet
ope.
receive
concepts of legality and
morality which both of our coun¬
ly hereafter, confine myself to it.
me repeat, that this law calls
with this problem, the Congress ;for nothing more than a disclotook steps to meet it in 1933.
It sure of the pertinent facts.
It is
partake
(79)
insurance
corporation
Leggett A Company
on
page 22
20
(80)
The Commercial and Financial Chronicle
lOlh Anniversary for
Albert Frank Club
Our
Reporter
Governments
on
of
tunity to donate part
By JOHN T. CHIPPENDALE, JR.
The
Club, social organi¬
the
officers
and
market has firmed slightly, with sentiment
seemingly improved. The Korean affair is responsible in no small
measure for this development.
Despite the suddenness of events
the government market took things pretty much in stride.
Un¬
em¬
ployees of Albert Frank-Guenther
Law, Inc., New York City, is objserving the 10th anniversary of
its founding with publication of
brochure
commemorative
a
government
doubtedly
been
de¬
the market would have advanced
Central
in
Banks
the
sellers, and do not
have in the recent past.
would
the
was
idea
formulated
nial
dinner held
of
result
after
testimo¬
a
The
in the
spring of
Maples,
General Manager and Vice-Chair¬
Herts, former
executive who
the
since
H. Mallin and
who are still
retired,
club
was
to
no
em¬
occasions
Mr.
serving
President,
1944.
Other
issues that
from
1940
to
included
markets
copywriter of
1950,
becoming
the
first
Tf"
'
Miss Chandler joined the agency
than seven
years
ago
to
work on the house organs of client
more
companies.
As
President
of
In
the
addition
to
Miss
Chandler,
following officers and
nors
10th
were
elected
at
the
continue
should
there
under
become
Assistant
Account Executive;
"Treasurer,
Robert
M.
Jenove,
media director; Board of Gover¬
Joseph A. Fitzgibbon, pub¬
licity staff; Stanley F. Merritt,
nors;
of
involved.
strong as
as
unless
pressure,
feel
who
the
is
It
the
department;
and Robert R. Slorah, production
department.
copy
dium
through which
and the taxes
that
However, barring
Whether
voted by
are
the Congress.
enlargement of the Far Eastern picture,
an
by this group the government* market Will continue
the
on
defensive,
in
<
orderly
an
and
way,
under
control
the
idea
born
was
make
Increased
The
total
banks
onA
deal
in
This
the
with
increased
been
it
some
opinion
and
quite
few
a
sidelines have gone into the market.
able
in
the
and funds
amount
restricted
have
of
been
the
than
main
belonging
money
governments.
issues
that
move
assets
June
of the
will
that
ties.
Volume
and
has
the
has
the
on
more
eligibles.
and
amounts
orders
too much
they
as
sizable
of the
effort
have
notice¬
Institutions
-
call
been
put
into
that which has
or
■
the securities
market was such
to make
sessions, reports
buy
these securi¬
in
amounts
of
the
When blocks have
prices
longer
came
were
larger orders
absorbed.
come
quoted
were
(until yesterday) that orders
attempting to push quotations
and
into
down,
without
The trend-of the
after the taxables
Considerable
ber
1967/72s
that \vatched
as
well
as
the partials.
City banks. They
were
*
.
the
the
December
four-point
stantial
from
real
INCORPORATED
NEW YORK 5
BOSTON 9
HAncock 6-6463
to
get
the 1963/68s
and
away
appear
were
on
institutional buyers.
concerns.
favorable.
The
prices.
"rights."
on
Septem¬
Most
a
them.
The
rather
sub¬
can
in
New
York
tremendous
a
City
increase
the
convenience
the
and
a
to
Loans
24
increase
pre¬
of
$1,000,000,000
de¬
a
or
a
than
more
reduction
or
less their
buying of the September
of
time
of
$46,152,000,-
deposits
of
indi¬
of
deposits
December
cor¬
or
States
Government
$1,940,000,000,
358,000,000
deposits
down
000, and deposits of
ing $7,196,000,000
own
000,
2s for the
ber.
or
were
reduction
a
of
subdivisions
were
States
of
$5,-
$65,000,-
banks
total¬
than
greater
in
De¬
$1,149,000,000, balances
$7,496,000,000
with Federal Reserve
reserve
of
$10,231,000,000, a
nearly
$19,000,000,000,
than
$1,084,000,-
savings
more
Bills
total
de¬
$2,000,000,000
to
pared
$7,000,000
$89,000,000
and
borrowed
for
$76,000,000*,#
were
money
and
rediscounts
payable,
liabilities
other
in
com¬
December
April l*of
in
last
year.
The unimpaired
the
banks
capita^ stock of
April 24, 1950,
on
was
$1,943,000,000, including $16,674,000
of preferred
stock.
Surplus
$2,681,000,000, u n d i'v i d e d
$1,122,000,000 and capital
$311,000,000. Total capital
was
profits
reserves
of
accounts
$6,057,000,000,000,
which
were
7.49%
posits,
were
$122,000,000
than
in
were
of
December,
7.12%
of
de¬
total
greater
when they
deposits.
Piper, Jaffray Partner
Piper,
deposits
$4,000,000 and certified and
Jaffray
members
New
&
Hopwood,
York
Stock
Ex¬
change, announce that R. Colgate
V. Mann, a member of the Stock
Exchange,
a
general
of
July
make
York
were
13%, less than in Decem¬
Postal
of
banks
nearly $200,Deposits
of
political
held
increased
by
1%.
$87,000,000;
securities
$2,0000,00,000 were
The
United
were
Other
than
of
with other banks of
nearly
like amount in bank de¬
corporations
the
a
since December.
of
and
increase
an
creased
banks
Included in the current
deposit figures are demand de¬
posits of individuals, partnerships,
000,000,
was
nearly 12%, since
or
a year ago.
posits.
since
of
more
Obligations of States and
subdivisions held were
national
mostly to net withdrawals
deposits of business
class
of
Delano
Cash
$2,500,000,000,
and
obligations
$37,000,000,000, which
more
of
individuals
000,
an
cember.
Preston
demand
a
held
Government
$33,000,000
by
the spring call last year. The de¬
crease in deposits since
December,
and
S.
December.
of
nearly
3%, since December, but $2,800,000,000 greater than reported for
due
$200,-
and
$1,000,000,000
over
$4,000,000,000,
on
April 24, 1950, were
$81,000,000,000, which is
in
of
$442,000,000,
The deposits
is
than
more
December,
banks
U.
of
of
of
since
political
April 11, 1949, the date of the
crease
$1,-
were
and discounts on April
$24,135,000,000, which was
were
cember.
below
as
etc.,
•
and
of
more
Deposits Higher
decrease of $659,000,000 since De¬
31, 1949, the date of the
and
l%s of 1954 and the iy2s of
anywhere from $300
range
cashiers' checks,
081,000,000.
vious call, but were $3,000,000,000
greater than the total reported as
some
of making
In
$5,000.
than
active
Dec.
come
few of them at
some
posits
The
and
reported
the
got
way
but
accounts,
New York and Brooklyn,-such de¬
the
amount
has
one
checking
since April, 1949.
$2,000,-
of it
side, the larger deposit banks, according
quite
There has been
the
of
increase
assets
refunding operation
When the
the weak
reports, took
thousands,
be impor¬
and
Kleeman stated.
appreciate
safety
000,000
United
The
latter
from
have had
help from the Central Banks, which is
things
1955
demand from
out-of-town
hundreds,
contributions
Mr.
ben¬
as
When multiplied by
.
Accounts
an
partnerships, and
porations of $19,149,000,000.
1967/72s, particularly by those
spread
of
viduals,
swopping has been done between
and
1959/62s, the 1962/67s
WHitehall 3-1200
$88,000,the Cur¬
possessions.
and
Market Briefs
45 Milk Street
than
more
year
banks
the
almost
filled' without
were
up when buyers appeared. .Accord¬
in for sale again were the New York
came
.
has shown
cov¬
States
♦
ing to advices, the most aggressive buyers of the bank issues which
15 Broad Street
this
the 4,982
banks
sizable
a
partially-exempts have been
recently,
put in, then
were
.
The number of Personal Check¬
ing
of
real investment
some
increased
lesser
market,
scale
& Co.
of
returns from
orders
were
equity market.
indicate there has been
the
Aubrey G. Lanston
national
of
24
The
21.
000,000
buyers
individuals
absorbed by the commercial banks.
BONDS
to
money
on
were
buyers, although quite
to
scare.
rates
Scale
This has been
in
some¬
war
money
ahead.
The latter represents idle funds
out
the
to
measure
prices of Treasuries will
★
NOTES
desire
a
more
Comptroller
nounced
in
Buying of government bonds by investors has increased
have
organization named
an
Banks' Assets,
April
amounted Jo
,
Although the longer; bank issues have not been able
CERTIFICATES
of
out
great
a
active
Buying by Individuals
what, and this is attributed
feeling brings
a
Comptroller of Currency Delano, making public results of con¬
dition call as of April 24, reports gain of $3 billion in assets
and $2.8 billion in deposits, compared with April 11, 1949.
ered
much progress on the up-side until the last few
BILLS
dime
plan, Mr. Kleeman said, "the
the
of the Federal Reserve banks.
be eased and
about
use
of
course
for regular checking accounts.
000,000.
be
housewives,
ited to the organization chosen by
the depositor.
In commenting on
the
For the time being at least
usual
rency Preston
Delano an¬
to
Many people,
do not find it possible to maintain
the
minimum
deposit
required
the deficit will be increased will depend upon the trend of
expen¬
it is believed
the
in
charged by the bank on Personal
Checking Accounts may be cred¬
ditures
taxables
★
me¬
could
persons
the
of
out
corresponding call
★
eficiary.
The plan provides that one
tures.
money
out
drastic action is likely to be taken by the authorities.
Long Bank Issues in Demand
TREASURY
to
n,
tens,
a
makes
checks
give to their favorite organizations during the past few years, particu¬
their expendi¬ larly among salaried groups who
ever, and they might even
strengthened by events in Korea.
been taken
u. s.
S.
tant,"
as
the
Per¬
a
month,
or
240 checks a year, so that a
Personal Checking Account should
net anywhere from 75c
to $2.40
such
plan
raising
we
without adding to
international
pointed
no
club's
Joseph T. Condon, publicity de¬
partment; Secretary, John J.Kelly,
a
but
that
uses
Account
75
of the year.
especially
plained the
fund
new
National
gover¬
meeting held in the
agency's main office at 131 Cedar
Street, New York: Vice-President,
m
least
20 checks in the
Trust Co., ex¬
Arthur S. Kleeman
Continue
those
are
more
annual
co-director
to
be
'
the
club, she succeeds Robert J. Fitz¬
patrick of the publicity staff.
hand,
inflationary forces will be
womim
*
case
This has kept the Vies under wraps,
though these bonds would rally under a com¬
other
will
situation
Albert Frank-Guenther Law, Inc.,
has been
elected
President
for
President of the club.
selling of Treasuries
previously, they have supplied
Market Pressure
the
On
.
Chandler,
much
as
buying. The Central Banks, it is
believed in some quarters, might not be averse to
having the
ineligibles firm up slightly, pending clarification of the Korean
incident.
How much of betterment this might amount to is not
clear even to those that expound the idea.
j
Joseph
A.
Fitzgibbon,
1944-45;
Ritchey, 1945-46; Gilbert E.
Busch,
1946-47; George
Green,
1947-48; Gregory Langley, 19431949; and Robert J. Fitzpatrick,
Helen
as
e e
Checking
Colonial
in demand..
were
New
City,
Arthur
is trying to eval¬
bination of investor and dealer
John
1949-50.
has been the
as
in
show
who
person
at
course
mu¬
June 28.
penny
club's first
Presidents
ities,
York
records
sonal
out
television,
sical personal¬
contributions,
an
addition, and
important addition.
as
an
"Our
number of
radio and
in
causes
present
average
well
as
worthy
,
Although there has not been
by Federal
hope
President of
The
is deemed advisable.
when it looked
the
was
tives,
Spotlight
worsen.
pub¬
presenta-
as a
our
rather
relations
r e
come
as
social affairs.
Mallin
the
monetary authori¬
ties, it is agreed, have the money market under control and they
are in a position to influence interest rates in whichever
direction
weddings, births, deaths, and times
of sickness,
the club has held
many
in
the Far Eastern situation should
sending gifts to
such
on
lic
a
Unfortunately, the answer
only with the passing of time.
For the moment, however,
important changes in monetary policy are looked for unless
will
ternalism."
addition
heads
and their
for
give for this plan is to be in lieu
of
organi-
zation
n
not
the firm
on
the
to
press,
Nonetheless, the
The money market, like the other markets,
uate the effects of the Korean affair.
ployees of the agency in a bond
a spirit of fraIn
presented
was
ineligibles have been acting better, even showing signs of
The longer bank issues with good buying
resilience, after the recent decline.
The
Korea
of friendship and
members
institutions
K 1
formed in 1940 "in order to bring
together all the officers and
for
available
oppor¬
this city. We do not consider that
the money which the bank will
charitable
and
side, due in part to outside buying.
The partially-exempts have not been very active even though
prices have given ground, due to changes in the tax bill.
old national advertising agency.
has
clubs
period, at least untli the inter¬
be appraised.
can
shorts have been
of the board of the 77-year-
Thought up by I.
Edward Wisbauer,
active, and Jacques
advertising account
ganizations,
It may be that stabilization of the market
of order
be out
had
radically new and different
of raising money for or¬
wanting to go ahead.
have displayed some
1940 for the late Harold E.
man
not
national situation
an
appear
Raising Plan
checking accounts
of charges to philanthropy
means
few days have not been aggressive
to want to push prices down as they
past
decade.
club
if Federal
seller of securities, especially the Vies.
a
picting some of the ''good times"
of club members during the past
The
Thursday, July 6, 1950
.
Colonial Trust Co. offers personal
A
zation
.
N. Y. Bank Introduces New Fund
Elects Miss Chandler
The AFGL
.
1,
his
has
been
admitted
partner in the
1950.
office
Mr.
firm
as
as
Mann
will
the
New
with
correspondents of the firm,
Carl M. Loeb, Rhoades & Co.
Mr.
firm
the
Mann's
was
admission
previously
"Chronicle"
of
to
reported
June
29.
the
in
Volume 172
Number 4922
Continued
.
.
The Commercial and Financial Chronicle
.
'
,
from
,
r
•
k
in
shares, or against diownership of individual
shares, is their wide fluctuations
in
price.
However, for pension
fund
investments, it is obvious
17
page
(81)
-
*
common
rect
Investment Problem
that
Of Pension Funds
trusteed funds in recent years
favorably
and
considered
trusteed
has
toward
accounts
been
motivated
equities
the
on
of income rather than
substantial
has
preferred
stocks. This trend in
common
basis
hope of
In fact
on
appreciation.
the
higher income available from
equities was one of the principal
for the
reasons
recent
change in
New York laws governing
of
invest¬
and
this
time-tested
investment
also
investment
welcome
trustee
funds
the
to
investment
or
manager
rv
^
•
n
nxea
ii
5!
fh
k
oe worm mucn
pension will
by the time he receives it.
Furthermore,
tne
the
innacimon+c
investments
iund
other^kctors
inclu^n-
many otner tactors mciuain& artimany
arti
ficial
interest
rates,
dollar averaging.
Furthermore, in
balanced
well
a
currency
includes
wbicb
but
not only
short-term
alsQ
fund
pension
of
manager
i,inj
pension
over a
vision
investments.
of
such
To
lected
have
stocks
common
and
stocks
longer-
used
are
that the record of Mutual Invest-
teT™ bonds' ll?e n^d f?r forced ment Fund
seulng 0f stocks should never
*
_
ml_
.
,
The normal payments are
anse-
equities returning from 4Ve¬
vided satisfactory
with its
sion
protection.
fund
investment
mutual
The
constant expert
supervi-
diversification therefore
and
contributions
the
to
fund,
,
,
.,
,
typical mutual investment iund
specifically designed for the con¬
servative requirements of the in¬
stitutional account (portfolio di¬
vided into high-grade
bonds of
about 47%, high-grade preferred
stocks
28%, and good common
stocks 25%)
shows a return of
about 3.25% at present quotations.
illustrate
To
cost to
able
cause
of their slight market flue-
gcale
investors
type of investment account. Man¬
have
provides an ideal medium for the
tuations.
as
a
.
hedge
.
.
.
..
„
,
{or A„ size Accounts
Stock Fluctuations Unimportant
in
An
vanced
funds
Pension Investments
argument
ad-
frequently
against mutual investment
with
investments
entirely
is
agement
for
the
and
endowment
(about
million)
over
turned
the cos*
the
in
$200
the manage-
*he*r sendce and many
thp
of
re-
relatively
small
pension fund.
and
its
entire
percentagewise
the
expensive
sized
Hence, mutual in-
vestment funds
are
of particular
importance since they can provide
size
of
the
portfolio to the company managone
With
Pension
logical to
it
program,
query as
there
pect
that
an
managers
inclination
investment
is every
reason
progressively
a
realistic pension
is
million
programs
Investment Fund
of mutual investment funds ifi this
:
of
rate
basis
the
cost
compound inter¬
2%%/ (the rate used
computation
for
insurance
various
on
shares because
of
type
contracts), at the end of the pe¬
amount
to
Marine .Midland Trust
and interest would
riod principal
$1,949,400.
of New York
approximate
(which
is
available
in
return
institutional
sound
Company
3y4%
At
type of mutual investment fund)
accumulate
would
the
at
in
of
end
ingly,
30
$2,610,400
to
STATEMENT OF CONDITION
in
bonds
accumulate
against an
govern¬
yield about 2V4%.
United States Government
or
This increment, of course,
applies
directly to reduce the cost of the
pension plan or possibly may re¬
sult in larger pensions to bene¬
Stocks
State and
Obligations
.
.....
Inflation Hedge
as
consideration for
Another prime
pension funds is the matter
the purchasing power of the
many
The
of
amount
the
Capital
Municipal Securities
2,600,273.30
600,000.00
$ 5,000,000.00
.
.
.
.
.
.
Undivided Profits
.
15,000,000.00
.
.
...
,
.
.
3,138,954.77
$ 23,138,954.77
4,553,992.19
Other Securities
1,527,048.61
Liability
3.397.850.18
1,085,752.77
Acceptances
on
.1,093,716.35
on
Acceptances
Other Liabilities
538,752.88
'717,907.04
Accrued Interest Receivable
.
Provision for Taxes, Interest, etc
118,519,769.26
Mortgages
Other Resources
.
Surplus
124,540,269.92
Stock of Federal Reserve Bank
Customers'Liability
dollar.
^ 86,846,15495
Loans and Discounts
ficiaries.
of
LIABILITIES
RESOURCES
Cash and Due from Banks
"legal"
to
JUNE 30, 1950
...
to
the
31/4%,
about $661,000 more as
investment
fund
investment
yield approximately
corporation would
ment
Accord¬
years.
each $1 million invested
on
mutual
a
annually
compounded
million
$1
Deposits.
114,120.96
.
.
.
316,677,617.96
.
r
pen¬
$342,976,090.57
$342,976,090.57
-
which the employee will re¬
sion
ceive must,
of
of necessity, be fixed
dollars.
This serves
in
terms
to
inextricably
link
the
Securities carried at $11,648,954.53 in
the above statement
are
pledged to
secure
public deposits and for other purposes required byJaw.
pension
program to the vicissitudes of the
American
dollar.
If
purchasing
DIRECTORS
remains stable, the benefits
power
present pension programs will
be great.
But stability in pur¬
of
chasing power over the near and
intermediate term is not indicated.
Since 1900, according to
the Con¬
Price Index of the National
sumers
Industrial Conference Board, pur¬
chasing
66%.
power
policies of unbal¬
budgets and deficit spend¬
committed
anced
in
further
inevitably
of
form
declines
will result
of purchasing
necessity for some
hedge is apparent and
The
power.
Yorktoivn
DAVID G.
Board,
Office
BAIRD
IF infield
Baird Foundation
ownership
of
stocks offers
selected
Chairman,
Company of Buffalo
Executive Committee,
President
Chairman
of the Board,
Continental Can Co.
SAMUEL S. CONOVER
Kenefick, Bass, Letchworth,
Balay & Phillips, Buffalo
Buffalo, N. Y.
"
of the Board,
Company
The Marine Trust
of Buffalo
CLOUD
of the Board
and President,
Barringer & Brooks
Executive Committee
Director,
R. H.
Chairman
Reinsurance
SEYMOUR H. KNOX
Chairman
EDWARD K. STRAUS
EDWARD C. LOWRY. JR.
Jackson, Nash, Brophy,
Honorary Chairman,
Sullivan & Cromwell
EDWARD H. LEICH WORTH
JOHN C. JACKSON
LUCIUS D. CLAY
EUSTACE SELIGMAN
Foundry Co.
International Salt Co.
Macy & Co., Inc.
WAMPLER
President, Carrier Corp.
General
Corp.
BURDETTE S. WRIGHT
Leesburg, Va.
STUART McCAMPBELL
-
POPE
Chairman,
Executive Committee
American Machine &
EDWARD L. FULLER
PAUL H. HUSTED
JAMES C. BLAINE
BAYARD F.
President, The Marine Trust
President,
Trustee,
to
which
ing
has declined about
The administration appears
Chairman, Advisory
HERBERT H. LEONARD
CHARLES H. D1EFENDORF
GEORGE M. ADRIAN
Treasurer and Director,
HENRY J.
McCampbell & Co.
WYATT
President, Crum & Forsler
common
at least partial pro¬
tection.
A
young
worker
in
industry
MAIN OFFICE
might very well prefer to partici¬
pate in a pension fund whose re¬
serves were invested in common
periods of
increase in
value of the equities might per¬
mit increases in benefits to make
stocks.
severe
Thus
during
inflation,
the
128 Chambers Street
J10 William Street
143 Liberty Street
Member Federal
•
will be
development. The answer is indi- of the many advantages they offer*
T*?
1
of 30 years at a
ex-
larger-
made in selected types of Mutual
to the position
in net
issues, let us
hypothetical case.
If $1
is invested for a period
a
funds
to
percentage of the investments of
rapidly expanding pen-
a
mutual
and
investment.
fund
showing
now
toward
Programs
investment
sion
pension
of the
leading Mutual Investment Funds.
in
type
b£^e^very moderate initial fees
decrease
investment
with
man-
medium
institutional
which
of
ment
Place of Mutual Investment Funds
experienced
in¬
funds
other uncertainties.
Skilled
mutual
realistic about
are
University with the largest
ing the investments of
Mutual Investment Funds Suitable
against inflation and
leading
vestment funds
vard
are
equity portion of the pension fund
of
agements
Har-
Government
take
as
.
fundg
and
corporation if the aver¬
a
S.
est
large
trugtg
return is higher than avail¬
in
"legal" investments or
age
U.
the savings
gmall
cently
balanced portfolio primarily be-
pen-
sion. account,bond preferred stock
the section or as a
section, the
Certain
,
a
Qnly
term bonds which
to 6% it is
possible to increase the
overall yield of an entire fund up
to 3.25% or 3.50%. For example,
not
world
a
for
Past 20 years has been such that pftmnl
1
completely hnlari/1^ institutional
balanced
educational
included in
available
are
stock portion of the
common
management over the
Any unusual requirements can be
are
funds
ment
by large investors,
It is interesting to note further, meeting the requirements of the
readily met by liquidation of short
pro-
of
good
a
Various types of mutual investVarfn,,<! ^
lectivity and wide diversification
that
nual
many
or-
offer
simple and economical means of investing providing careful selection
of portfolio securities, wide diver-
tific analysis and constant super-
century has demonstrated that se-
With
religious
shares
years at both hiSh and managers, mutuals provide the sification and continuous expert
*0w prices' resulting in effective same competent management, se- supervision,
bought
By utilizing mutual investment
funds with an investment policy
account.
Fund
TY^nnth period of
«inn
*
stocks indi-
or
are
turned to their management.
investment
Investment
!w„ Sor
shares
fund
vidually owned
but
holding high-grade equities, it
is possible to materially increase
the return of the entire pension
and
ment
of the trust account plus the an-
else¬
on
estates
ganizations, who find that Mutual
up for increased living costs. As
it is now, a young man would
met out of the investment income
commented
ias
funds,
plication. A pension fund invest- in investment problems or does
ment is designed as a permanent not have available the vast faciliinvestment pool.
Mutual invest- ties that are necessary for scien-
the experience of the past quarter
estates,
trusts
as ever-increasing
acceptance
by numbers of pension fund trustees, institutions, labor union
argument has little ap- who is either lacking in experience
where in this article.
personal
well
are
individual
manipulation, increased tax rates,
etc.
Against all these influences,
ment
cated by the rapid growth of the
mutual investment fund industryas
manage-
ment at reasonable cost.
Mutual
2T
120 BROADWAY
17 Battery Place
Park Ave.
Deposit Insurance Corporation
at
46th Street
Seventh Ave.
at
37th Street
22
(82)
The Commercial and Financial Chronicle
ate further the
American Prosperity Best Aid
In European Recovery
further
Dr.
which
pean
make
Continued
for feeling they
coun¬
the United States
owe
the
result of the
jrom
equally by the favorable effect
prosperity in the United States.
not
of
it
be
can
While the
in
measured
American
that,
prosperity,
had
it
not
Marshall
Aid
been
suffered
the first half of 1949
recession
trade
can
as
in
in the
Britain
Dr.
Paul
Einzif
some
idea about the
extent
which
to
been for the turn in the trend in the United
States, the devaluation
sterling could only have produced passing improvement, and the
gold would have been resumed by now on a large scale.
The British gold reserve would be dwindling at a dangerous pace
outflow of
spite of further drastic cuts in dollar imports. These cuts would
have impaired Britain's food and raw material position, and would
have resulted in a curtailment of production and unemployment.
Several members of the British Government
frankly admitted
that, but for Marshall Aid, Britain would
have experienced unemployment on a large scale. There has so
occasions
official admission that Britain owes her
no
largely to the
wave
of
immunity of
prosperity in
the
United
States.
Apart from the extent to which American prosperity con¬
an increase of sterling area exports to the dollar
through the increase of American demand, Britain has also
tributes towards
area
benefited
by the
moderate rising trend
of
prices
in
the
United
States. But for that trend—or, rather, but for the absence of a
falling trend—it would have been necessary for the government
to resort to drastic deflationary measures in order to maintain the
advantage gained
through the devaluation of sterling. If prices
were falling Britain would have to make the
to prevent the rise of her prices, for otherwise
British exports would lose ground not only in the United States
in the United States
effort
utmost
but
also
in
third
countries
as
a
result
of
growing
American
competition.
ports but
be
also
not only in
necessary,
in
order
order to
save
dollar im¬
to
deflate, to curtail capital investment
in public works and in private industries. .This would con¬
tribute towards increased unemployment. It would also cause a
both
deterioration of
the
budgetary position, owing to the decline
of
the yield of taxation.
in all European countries both
through material and psychological
a collapse of the American
economy,
which has been freely predicted
by communists ever since 1945,
would have brought many millions of converts into the
commu¬
The anticipation of
nist camp, and would have contributed to industrial
instability in
Western Europe. The output would have suffered
as a result of
an increase in the number and
extent of strikes.
It must be gratifying for an American to
see the extent to
which world economy is dependent on American
economy. At the
same
time,
however,
the
realization
of
this
must
increase
the
burden of
responsibility that rests on the shoulders of the United
States. Any grave setback in business in the
United States would
inevitably reverse the European progress towards
this
recovery,
would
and
entail grave economic, social and
political conse¬
There is much discussion on the question what will
hap¬
pen when in 1952 Marshall Aid will come to an end. A much
quences.
more
urgent problem is to consider what would
happen if the present
boom in the United States should
give way to a slump. The fact
that the recession of 1949 was checked in
good time is undoubt¬
edly encouraging.
Nevertheless, American opinion should
the worldwide repercussions of
low
an
Nor
lateral.
exaggerated
is
a
realize
possible setback that might fol¬
boom.
American
One of the
influence
reasons
for
on
world
the boom
economy
in
entirely uni¬
the United
States
is
undoubtedly the recovery experienced in Europe and other
parts
of the world.
But for the maintenance of the
import from
the
United
American business would
be
States
much
as
a
less
capacity of Europe
result
of
prosperous.
Marshall
And
Aid,
Ameri¬
can
prosperity, by enabling Europe to buy more from the dollar
area, tends to accentuate itself. Any relapse in
Europe caused by
relapse in the United Stat<^ would tend to accentuate the
re¬
lapse in the United States, which in turn would tend to
accentu¬
a
issues; while they
cannot dis¬
we
strangle
we
traditional part
are a
the
process
that
as
this
the
and
of issue, as
delayed by the time taken by the
registrant to comply with the let¬
ter
of
comment.
But
the
once
statement is confirmed it is in the
Commission's discretion how long
waiting period should elapse—
a
to the 20 days provided by the
up
law.
So
which, as I
usually, by far,
are
I
could
The expense of
printing and dis¬
tributing the prospectus is fre¬
quently hammered at as one of the
incident
to
criticism
loses
that
force
of the
of
representative
a
the
28 mineral
three
Of
score.
petroleum is¬
in
Canada,
in
us
that
and
the
past
on
this
surveyed
years,
statements
sample I had
and
originating
registered with
sues
total,
only
two
held for the stat¬
were
utory period after being corrected
according to the letter of com¬
ment. The average
for all of the
waiting period
issues
was 6.5 days
days, as against
the 20 days provided by law.
and the median 5
Our
Congress recognized that a
piece of paper resting in a central
file
in
Washington,
to
be
investors.
In
of
D.
C.,
limited
order
to
was
to
use
to do so, spare no expense
who have been
us
which
salient facts
con¬
set forth
in
the
registration statement. This
requirement attaches to all se¬
curities
registered under the Se¬
curities
Act
behalf of business itself.
on
it
and
attaches
to
regulation,
ment
of
be made
can
oppression
administered.
facade
We
if
pine.
In
days,
on
rather than less.
wheat
we
from
an
the
more
As
learn
the
of
instru¬
ruthlessly
become
a
administered.
at
new
form
ruthless
early
tended to insist
perience
if
can
supinely
still
were
It
neither
are
other
nor
su¬
while
we
game, we
disclosure
gain
we
to
The cry for
we
the
have
dis¬
come
fulfilled—i.e.,
recognized clearly
investor
is
little
of
billions of
securities
Law¬
The
effectively
under
$57.5
dollars
billions
of
registered
will
often
insist
on
cramming prospectuses with
nutiae
that
vance
to
mi¬
may have little rele¬
the
basic
investment
are a standing answer to
criticism that the registration
requirements are a bar to securi¬
any
ties
glad
am
Proud of SEC
We
to be able to report
considerable
fying
has
resulted
On
but
have
paft,
our
not
The
simpli¬
progress
from
only
from
who
suers
in
progress
prospectuses.
efforts
offerings.
security.
Progress of Simplification
I
the Securities Act since its
those
of
worked
our
the
is¬
with
us.
have maintained
we
a
are
proud
Record
that
of
record,
and we are proud of the fact that
the laws we administer have be¬
come
part of the working code of
business. We still hear
American
complaints of course, as you do,
and many of them come from the
adventurous frontier of economic
development represented by the
constant, never-ending study of
our disclosure
requirements in or¬
wild-catters
der to
the
of
simplify them.
As
patient education
result
a
attor¬
many
neys and others have learned how
to
draft
models
out
prospectuses
of
brevity
now,
which
and
staff
pur
is
recommendations
simplification which
have
before
for
us
clarity.
working
for
we
are
further
expect to
early consid¬
at
the
would
have
to
is
expensive.
its
exaggera¬
process
from
the rather startling
often
makes
of
error
con¬
fusing us with underwriters; for
analysis demonstrates quite clear¬
ly that registration itself is not
In
recent
a
the Commission it
issues
of
study by
shown that
was
securities
tered and offered
for cash
distributors
—
but
including
all
registration costs—was only V2 of
1%
of
the
aggregate
offering
price.
Expenses, other than distribu¬
tion fees, are a minor
factor. Yet
only part of the items in the cost
distribution, other than
world
distrib¬
where
oil
and
(as
the
Texans
call
any
non-conformist) who had the itch
to
search
and
the
optimism
to
keep doing it in the face of dis¬
appointment.
They are the men
not
are
they
from
a
business
by
intractable
either
are
million dollars
miles from
in
infected
most
who
—men
much
so
are
nature's
one
of
viruses
one
foot
million
or a
dollar.
one
I expect that kind of man to
chafe at regulation.
If he were
the kind of fellow who
obeyed the
voice
of
with
he
caution
the
would
catting
and
restraints
could
of
Jive
convention
probably not be wildprospecting in the first
or
place.
Canada stands
on
a
representative period the average
cost, other than compensation to
of
ericks
regis¬
over
the
of
brought to the
light of day by incorrigible mav¬
as
SEC
tions, that criticism
all
part
gas resources were
who
eration.
We
and
prospectors.
I
a
soft spot in my heart for
wild-catter.
I come frcm a
have I
century,
and
prospector
they
of
to
the
hopes
world
of her
eve
wild-catter
and
important to her
were, and are to us.
the
a
the
are
that
that
she
needs
For
can
the
as
one
bring
metals
and
hydrocarbons of the earth, is
her still untapped vast resources.
I said, earlier
tonight, that it takes
a
lot to make
a
nation.
Optimism,
that conservative folks
might call
irrational, a sense of adventure
credits, are essential ingredients in
the making of a nation.
We, south
given to the prospective investor.
that
tune
are
that the prospectus
containing the
essential
information
shall
be
And
the
state
We want the basic
law
hopeless, have been registered
to
annually.
forth
single strongest exof
simplification and
streamlining.
to
the
out doubt the
purpose of our
industry
with
predominantly. To¬
day the Commission itself is with¬
ponent
Commission
every
registrars' fees, cost of compliance
over¬
our
Exchange
passage
tribution
simplifying
a
nor
doses of disclosure.
closure requirements used to
from business
in
foreign to the bond and guaran¬
teed
investment buyer, and
and
by
inherent
we
the
learn too that neither business
the investor is served
is
utors' commissions and
discounts,
is attributable to registration. Ex¬
penses
such
as
issuance
taxes,
ex¬
pick
chaff
Act
type and size.
Securities in every
step of the range, from gilt-edged
liability of their clients for
for
any
expense loosely
at¬
registration under the
represented
civil
omissions
distribution.
like
the
to
and
who profess to fear possible
expensive.
To adapt an old
aphorism, regu¬
lation is as regulation does. Dis¬
of
yers
newly distributed
securities
as
long as they are in the process of
closure,
bulk
in the
registration
Quite apart
prospectuses
in pre¬
apart from the prospectus.
that the vast
Securities
can state that, para¬
doxically enough, the major ob¬
jections to streamlining are made
bring the
required to provide to in¬
an¬
plain fact is
tributed
by far. And
over
ties
the
The
Consistently,
be deaf not to hear the
persistent
and
baseless criticism
that
the
vestors
erature
ex¬
information to those who need it,
distributors of registered securi¬
are
consider¬
considered
paring and distributing selling lit¬
middle of this
Right
The Prospectus Requirements
is
and,
they feel free under the law
when
have
The task is not
test
as a
it
many corporations, without
prodding of regulation, are
ties
appraise these
registrations,
when
registration.
lavish in their expenditures on
nual reports to stockholders
laden.
arguments against the facts about
some
bene¬
fited by a formidable document
filled with details and technicali¬
a
therefore,
the
Commission
has
public distribution whether or not
jettisoned, paragraph
by
para¬
registered.
graph, much of the cargo with
Registrations with the Securi¬
which
prospectuses
once
were
merit of the
that
Act.
discounts
indicated,
expenses
understand.
can
those of
registration
type
and
which
Securities
underwriters' commis¬
are
the largest part of the cost of
registered distribution.
respect.
ties that discourage him from
them
other types, is sometimes
tain
What is true of Britain is also true to a greater or less
extent
of other Western European countries.
Had.it not been for the
American boom the indices of European
recovery would not have
been nearly as favorable.
Moreover, adverse business conditions in
the United States would have strengthened communist
movements
effects.
that
true
bound
It would
develop¬
well
in
unemployment
petroleum
in
of
far been
known
red-tape of delay.
is
It
during
British economy depends on the United States. There was a sharp
in the British gold reserve, owing to the reduction of
American buying from Britain and the sterling area. Had it not
various
this
special au¬
protection.
on
own
underwriting
sions
have
other
able
speculations, they do of¬
insist
ten
decline
on
the
that
process
by
gives
and
approve
for
result of the Ameri¬
a
On
tracting the information he needs
concede that
may
countries from crisis and chaos.
setback
procedure
ments securities
itself
could not have saved Britain and many other
The
extent.
some
insist
their
predates
So too
19
page
"acceleration."
mining
largely escapes
be stated without fear
may
contradiction
in
have sometimes heard people
accuse
us
of
animosity against
easily measurable and
Yet
difference
I
terms of dollars, the extent of this indirect aid
is
the
Role of the Securities Act
as
attention.
long
Capital for Development-
help
nearly the same extent is that Western Europe
Aid
of the
European
increase
the
fectiveness—a
Marshall
to
a
course, generally publicized. It is direct, con¬
crete and obvious.
What is not realized to
of
likely
under
are
fundamental
a
received from the American economy. Assist¬
in the form of Marshall Aid has been, of
extent
Europe.
Western
is
of
ance
benefited
other
consideration, will tend to reduce to
extent European dependence on the United States.
Euro¬
integration is not likely, however, to proceed far enough to
some
for the part they played in European recovery.
The gratifying increase in the figures of production all over West¬
has
of
and
prosperity
will
for
Counsel fees
increase of intra-European trade through the imminent
the European Payments Union and
through other
an
creation
measures
debt of gratitude
of
writers
dits
Thursday, July 6, 3950
.
.
But
LONDON, Eng.—Britain and other Western European
to
result
a
Britain
American
in
British economic welfare.
sequences to
largely
as
which
on
isolate their national economies to
hand,
Einzig, though agreeing Marshall Plan aid has greatly
European recovery, points out more important factor
is maintenance of U. S.
prosperity. Says any grave setback in
U. S. business would eventually reverse European recovery
and weaken stability of our price structure, with adverse con¬
Europe is
to
depend
setback
a
gradual abandonment of bilateralism
and other forms of quantitative restrictions which at
present tend
assisted
ern
the effect of
and
extent
The
cause
countries
to
reason
the
both
By PAUL EINZIG
tries have good
relapse in Europe. It would create a vicious spiral,
in American business conditions would become
the setback
and
.
tered.
securities
laws
attributes
whether
The
of
and
any
not
or
filing fee is
one
so
dis¬
regis¬
of the
few expenses directly attributable
to the registration process.
It is,
by
law,
one
per cent of the
one
one-hundredth
of
maximum of¬
dreams and hopes that get lost in
complexities of debits and
of
the
boundary, are proud of a
tradition that I believe also exists
in Canada.
Even in the crowded
cities
our
children's heroes whom
they emulate in play and dress
the
optimists,
adventurers,
fering price of the securities to be dreamers who carved
out of the frontier.
registered.
Independent audits of financial
accounts
most
are
made
corporations
ciable
regularly
of
any
by
appre¬
whether
or
not
re¬
quired by law, and we do not re¬
quire special audits in connection
with
the
nation
But from the range out in
your
West and ours the
prospector may
have to convince a
conservative
banker that he, the
prospector, has
something worth putting hard
money into. Often, the process of
basic registration form, financing carries the deal
to the
frequently the under¬ public.
The banker will not, and
size,
although
our
are
and
[Volume 172
Number 4922
believe
we
should
that
not,
be
the
.
.
investor
expected
to
Chronicle
The Commercial and Financial
.
buy
blind.
maximum fulfillment of
economic
potentialities.
best
our
Fortunately this does not
bar
a
any
mineral
to
moter
mean
development in
of the word. The pro¬
sense
of
mineral
a
development
be impatient with the
quirements
of
disclosure,
organically
We have admin¬
unified purpose.
istered the law in that spirit.
Our
when
he
re¬
A composite opinion of purchas¬
ing agents who comprise the Na¬
either side of the
tional
through most of the third quarter.
Association
of
I
things
have tried to outline for you
of the
simple premises un¬
derlying our approach to securi¬
ties regulation.
We are not, and
cannot afford to be, smug about
our way.
Year by year we accu¬
mulate experience that teaches us
that
changes should
be
made.
What we can do by improving our
rules and regulations we do that
way.
Sometimes the change we
think necessary is basic enough
to take to the Congress as a rec¬
ommendation for legislative
some
has
lems
the
day prob¬
com¬
chases,
"strictness"
or
"leniency" of administration.
The job we have to do, the goal
for which we reach is bigger than
a
reputation for being back-pat¬
ters or wrisi-slappers. The stand¬
amendment.
But
the
essential ards have to be kept high, surely,
wisdom of disclosure as a working but rather than talk of strictness
formula for securities regulation or leniency, let us remember that
is confirmed by our continuous ultimately the business of securi¬
ties regulation is to help the se¬
experience.
Our
experience confirms
the curities business play its impor¬
further fact that world security tant part in the big scheme of
and well being are no respectors things.
And securities regulation
of boundary lines. North and south that strangles legitimate securities
of our mutual border, we share business is little better than the
a
common
stake in
continental lack of regulation that permits the
prosperity and in the free flow of high-binders to strangle it.
goods and credit.
We share a
I am not a cosmopolitan. I come
reveals
the
ends
the
agents
advances
Much of the increase
in
activity was in anticipation
July industrial vacation
the
close-downs.
Prices continued to
advance
a
over
broad front, with
nonferrous metals in the
ventories
to
exploitation of
sources
pull
side
increased
ever
lost
The
border.
the
sec¬
for
the
and
will
that
be
job to discourage explora¬
tion or to prevent investors from
taking risks.
But we are com¬
mitted
to
It is
an
the
an
that
idea
informed
are,
as
ignorance
own
field.
likely
is
his
and
be
The legitimate
a
en¬
some hope of de¬
the benefit of its
its shareholders is
likely to find him unwilling to
venture again.
I couch my state¬
ment in less than positive terms
firmed
psychopaths
who,
like
believers, just cannot be
Hindu
burned.
But
their
overall
priming the economic
1929
are con¬
demonstrated,
pump, as
be
can
effect
small
the Cuban
nounced
capital, have been
the
by
Chase
United
States
tions and individuals)
corpora¬
The
must
see
increase
an
in
that
1 have tried to demonstrate that
don't
think of
our
countries
as
parties to isolated business trans^
Below the debits and the
actions.
credits, below the exchange bal¬
ances,
is an economic organism
living in a world environment that
calls for stress on an organically
unified
SEC Not
I have tried
point
and
our
in
a
and
purpose
that we,
a
new
building
modern
the
at
district of
ness
finishing and
tures will
Exchange
task under the Securities Act
broad framework. We do not
conceive
ourselves
as
policemen
beat. We believe that
what goes by the name of protect¬
ing the investor is fostering the
patrolling
a
Austrian
Import Corp.
NEW
Havana.
Interior
installation
of
fix¬
be started
immediately,
opening of the quar¬
planned for November.
bank
Statement
four-story
of 23rd
The opening of this new branch,
the
step
gram
of branch expansion in the
in
Caribbean
long-range
a
area.
Chase's
Moreau D. Brown
branch, located at Aguiar 310 in
Thomas McCance
Prescott S. Bush
financial
lished in
district,
was
estab¬
1925.
H. D. Pennington
E. R. Harriman
Knight Woqlley
Stephen Y. Hord
Limited Partner—W. A. HarJUMAN
ager
of
Ernest
Broadway,
nership.
J.
New
of the
members
Exchange,
was
Smith
York
New
York
same
Co.,
City,
date Louis
$ 5J,555,420,99
Banks
from
GoyERNMENT Securities
59,029,510.79
.
.
State, Municipal and Other Public Securities
.
46,582,72.7.94
.
Other Marketable Securities
and
5,214,468.37
Discounts
Customers' Liability
53,892,839.17
on
Acceptances
.
.
.
.
19,446,737.89
.
1,385,029.09
.
$2 37, J
Edward Abrams
M. D. Morehouse
David G. Ackerman
06,734^24
Ernest E. Nelson
R. H. Chamberlin
Willjam F. Ray
L. Parks Shipley
Joseph R. Kenny
LIABILITIES
Deposits—Demand
Deposits—Time
Howard P. Maeder
Edwin K. Merrile
...
Gale Willard
Harry L. Wills
Less Held
Reserve
Assistant Managers
John B. Madden
J. Eugene Banks
Merritt T. Cooke
Jr.
in
Portfolio
.
.
20,622,434.04
1,751,244.47
.
Interest, Expenses, etc
for
276,989.66
Contingencies
1,500,000.00
Capital
Herbert Muhlekt
$ 2.2,373,678.51
SURPLUS
$
2,000,000.00
12,045,283.54
14,045,283.54
Arthur L. Nash
$237,106,734.24
L.
J. Newquist
Arthur K. Paddock
As Required by Law
$1,600,000 U. S. Government Securities
Arthur R. Rowb
ark
Pledged to
Secure Public Deposits
L. W. Simonds
C. F. Von GlahN
FACILITIES
Complete Facilities
George E. Paul, Treasurer
Thomas
$ J 98,728,000.44
1,934,026.56 $200,662,027.00
Acceptances
Accrued
James Hale, Jr.
.
.
John C. West
Joseph C. Lucey
Louis C. Farley,
.
.
for
Domestic
•
Brokers
for
Herbert Gray, Auditor
and
Loans
Commercial Letters
J. McElrath, Comptroller
of
of
Foreign-Banking
Acceptances
•
Credit
Purchase-and Sale
Custody
Curb
Newman, limited partner, with¬
drew from the firm.
Due
Deposit Accounts
man¬
admitted to part¬
On the
United States
and
Managers
John A. Knox
&
Hand
Other Assets
Admits Max Freedman
July 1 Max Freeman,
on
Loans
William C. Horn
On
Cash
Rav Morris
William A. Hess
Earnest Smith & Co.
ASSETS
Jr.
Robert A. Lovett
Louis Curtis
Elbridge T. Gerry
the
F. H. Kingsbury,
Thatcher M. Brown
pro¬
present
oj Condition, June 30, 1930
PARTNERS
announced, will be the
first
2
Co.
PHILADELPHIA
BOSTON
YORK
&
BANKERS
PRIVATE
corner
visitors from the United States.
Policeman
at the Securities
Commission, view
Co.;
Inc.,
Foster
A.
for
American
and
&
Electronics,
F.
branch will be located
Street and J Street, in the center
of a rapidly growing new busi¬
attitude.
to drive home the
of
Laboratory
Business Established 18J 8
completed
volume.
I
Callaway, Fish & Co. He is a
director
the ground floor of a recently
on
and I have
doubt that the future will and
no
and
Policy
an
Brown Brothers Harriman
National
Bank.
of
Securities
Securities
Investment Advisory Service
Licensed
as Private Bankers and subject to examination and regulation by the Superintendent of Banks of the State of New York and
by the Department of
Banking of the Commonwealth of Pennsylvania. Subject to supervision and examination by the Commissioner of Banks of the Commonwealth of Massachusetts.
SAVB
.
Simpkins Partner m
Mitchell, HMchiiffiS
in
—
With prices
inflationary trend,
buyers are taking as short a view
of future coverage as possible. It
is necessary, however, to support
production schedules and allow
Buying
an¬
Our
proximity,
our
common
Located six blocks west of the
language and traditions, and our
Hotel
Nacional
and
two blocks
heavy interchange of people and
ideas give Canadian enterprise an north of the University of Havana,
branch will serve the
enviable advantage in the attrac¬ the new
tion of United
States capital. I diversified businesses in the lo¬
read recently an estimate that $5
cality and will provide special
billion of United States capital
facilities to business concerns and
was
already invested in Canada
by
Assistant Vice-President.
Willard S. Simpkins on July 1
work, but industrial became a
partner in the New York
employment is still on the in¬
Stock Exchange firm of Mitchell,
crease.
Checking on
employee
productivity, Purchasing Agents Hutchins & Co. with headquarter*
report the most satisfactory con¬ in the firm's New York office at
dition in many months.
Eighty- 1 Wall Street. Mr. Simpkins was
five per cent report improvement,
with
Hornblower
&
much of it stemming from im¬ formerly
proved aids to manufacture and Weeks. Prior thereto he was a
H
satisfactory labor relations.
pMner in G. M.-P. ^Murphy & Co.
opening of a new
Havana, its second in
in
branch
ters
(both
The second
months.
National
Opening New
with formal
indeed.
two
rise
Third
the
and outdoor
Plans for the
and
because I know that there
to
exceeding this range by
sharp
with
Branch in Havana
An
terprise with
velopment for
economy
commonly
ciated
Bank & Trust Co. of Scranton, as
pay rolls is recorded for the month,
following a steady increase since
March.
A part of it is seasonal
90 days, showing
the high side of 30 to
with 8%
one
Chase
us.
to
be,
we
l)y the production schedules
purchased requirements; it is
quarter is closing with consider¬
investor who has been the victim
wasted
purpose
dedicated.
idea that forward look¬
another's concealment
must
tated
for
on
risk
the
one.
ing enterprise shares with
on
common
we
to
fJ>
our
should be
of
contributions
majority, however, report they
are
increasing
or
maintaining
satisfactory turnover rates. A few
are running
into difficulties be¬
cause the short supply of a few
essential materials is causing in¬
Employment—A
our
enterpriser on one
risk taker on the vidual national
other, are essential parts of the the world.
process.
We don't conceive it to
To
hand,
erately increased in June. Larger
production requirements call for
expanded protective stocks.
The
In¬
productivity is indicated by 85%
require either of us to
of those reporting.
The predomi¬
unique national flavor or
nant buying policy is being dic¬
the opportunity to make our^ indi¬
re¬
the
of
Bank of Semite!
SCRANTON, Pa. — Dudley R.
Atherton, Jr., former co-manager
of the Philadelphia office of F. S.
Moseley & Co., has become asso¬
ventories to become unbalanced.
van.
from
skills and
our
either
on
With Third Nat'l
the
of
the Survey show inventories mod¬
point of the
report
of April
and May, and moved substantially
higher with production and new
of
iirdiejf ftllerf©!, Jr.
purchasing agents contributing to
Robert C. SvutM
Purchasing
June
Exchange. Mr. Perdun wa®
formerly a partner in Laurence
other
Sharp
Inventories—One-third
ond
consecutive
month,
with
turnover reported generally im¬
the from a relatively small city in a
proving and satisfactory.
Some
earth the resources necessary for
region of my country that is proud
find the turnover of materials is
security and prosperity.
of its regional flavor.
Let me add,
We, at the Securities and Ex¬ if I must, that, as much as I be¬ handicapped and production is
unbalanced by the slow delivery
change
Commission,
are
very lieve that circumstance has made
of
sensitive to that fact. We want,
hard-to-get
materials. Em¬
us joint venturers in the big busi¬
neither wittingly nor unwittingly, ness of
ployment is at the highest point of
history I do not believe
the
to stand in the way of the fullest
year.
Improved employee
that circumstances either now or
need
common
M. Marks & Co.
Stock
fabricated goods.
business at the high
orders.
I ©a
Em
Co., 14 Wall Street, New York
City, members of the New York
periods
of
high
competition,
to
maintain volume, is reported in
with general
held
Smi th,
associated with Smith, Barney &
quarter of the
June
of
Winfield H. Perdun has become
during
prices.
■$
second
year.
90-day
Wiifieldl Peril! W/fifih
are
that
year
to
beginning to revert to some of
of the lower cost substitutes used
chester Re¬
depends
as
30-
general policy
Buyers are watching the current
price trend closely and are critical
of sympathetic
advances during
the past two months.
Companies
capital and trading I n d u s t r ies,
expected to put Inc., New Hapremium on such char¬ v e n, Conn.,
a
the
show weakness-durirfg the month.
0
Win¬
markets—and be
acterization
of
over a wide range.
Lead
the only nonferrous metal to
was
markets—both
much of
side
vanced
realization
potential
procurement;
watchword.
Commodity Prices—Sparked by
sharp increases in copper, nickel
and zinc,
industrial prices ad¬
to the idea that peating Arms
of our eco¬ C o., D i v iof
Olin
on free sion
as we are,
full
nomic
day to
face. One cannot be
we
mitted,
the
that rector of Pur¬
importance
an
transcends
in
M
the day, going one to two months
further where necessary to assure
deliveries.
Caution
is still the
able optimism that business will
remain at present high levels
discovers that these
he will be reconciled to them.
top
bracket is the
regulations and prescriptions are
uniformly administered with re¬
spect to securities issues from
Purchasing
boundary. And
but the maintenance of high standards Agents Business Survey Commitin securities selling is at heart a t e e, whose
re¬
Chairman
quirements permit him to tell the common problem.
is
investor the objective facts upon
In a way, the part that my Com¬ Robert C.
which his own optimism is based mission plays in the big scheme of Swanton,
h
Di¬
may
increase
(83)
lead time of many materials. The
Business Survey Committee of National Association of Pur¬
chasing Agents sees higher production, with more new orders
and prices advancing on broad front.
what I have called an
the
for
Reports Mid-Year Business at Peat
For Can¬
ada and the United States that is
No Bar to Mineral Development
•'**
BOB
YOUR
INDEBHNDBNCB
—
BUY
U.S.
SAVINGS
BONDS
Export-
24
(84)
The Commercial and Financial Chronicle
"This
Reveals
Upward Trend in Municipal Financing
Halsey, Stuart & Co. forecasts
But
ipal issues for 1950. Sees Federal Housing bonds providing
at least $1 billion of tax exempts this fall, with ultimate addi¬
tion of
a
With
in
more
than
municipal bond issues in
the first quarter of this year—a
new
record — and an
total of approximately
quarterly
new
estimated
other
1.8 billion at the six-month mark,
ous
the year 1950
and varied-purpose
in
trend
ward
is continuing an up¬
financing that dates back to 1944,
Halsey, Stuart & Co. Inc. pointed
out
of the Municipal Bond
of
Mar¬
necessary
long-term
to the offering
Federal
Public
Housing Authority bonds will be
respect,
as
by a well known aver¬
moving within 0.10 in
fraction by which
trader would have cut his
almost static price level
the
into
came
same
or
the
market
same
prices.
plaints
constant
by
underwriters
com¬
that
the
middle maturities of issues would
not
sell, but price concessions
such
'remainders'
seemed
on
not
to
ironed out
"It
would
last
the
set
a
ing can
tinued.
predicted at the
year
that 1950
freely
was
of
end
high
new
bonds
bonds
the
swell
the
far
said.
survey
has
latter
the
"So
expected to
was
competitor,
1948,
can
for
1950
careful
long
as
of
buyer
to fill almost any
and
to
of bonds
as
they
munic¬
bonds
requirements of
ipals will continue to find
$500 million ahead of last
Only a few Federal Public
Housing Authority bonds, if any,
needed
at least, so
be absorbed.
"The
about
be
billion of tax-exempt
year
per
amount
security, salability and yield. And
he
will find
it an
increasingly
good market in which to buy be¬
cause
of the steadily
increasing
year.
will
could
financing
municipal market, the old sources
can be expected to pour out large
not
happened, but
1950 is doing very well volumewise.
It gives signs of making a
new high without the help of the
'Housings.'
At
mid-year
it
is
about $300
million ahead of its
nearest
"This
it is
said, and an ultimate $7 billion
are expected.
Entirely apart from
this new source of supply for the
previous figure because a
large volume of Federal Housing
any
total,"
initial offer¬
an
be made," the survey con¬
provide $1
far above
that
so
show up in
Continued
portance
is
pass
last
year's record of $2.9 billion.
State and municipal offerings in
activity in the secondary market.
had the
riety of issues to choose from
if
bring into general
conversa¬
index which has been well
an
known
the
to
This
years.
of
has
1950—so much
the
trade
offerings
of
know
such
combined."
kind
a
of issues
that set
move
range,"
pre¬
of
number
large
in
1950
think in
within
a
very
according to
the
narrow
survey.
substantial
a
ing—which
speculative
may
has
do
to
with
"In
the
the
Banking Houses
Other Real Estate.
Credits Granted
.
Acceptances.
on
.
Accrued Interest and Accounts
price
Government
reasons
for
how¬
movements,
to
prefer that
price movements be narrow. That
a
seems
excellent explanation of
very
thing.
second
quarter
was
en¬
by proposed legisla¬
some
which
will
affect
segment
a
municipal market. For
some
it has been advantageous to
dealers
to
short
own
term, high coupon bonds at high
premiums because the premiums,
maturity, became capital losses
at
Ways and Means Committee
the
House
of
Representatives,
the process of 'plugging loop¬
holes,' apparently is working on a
plug
see
for
the
that
last
Other Assets
the
1950
one—so
of
those
may
interesting
4,901,030.54
1,148,123.66
*
6s
in
and
that
relatively
small
Capital Stock.
Surplus
Undivided Profits
Reserve
■
forContingencies
4,445,223.78
4,537,677.60
Reserves for Taxes, Expenses, etc..
Dividend Payable July 1, 1950-
1,125,000.00
Acceptances Outstanding $29,649,670.97
(Less own
held in
acceptances
portfolio)
Other Liabilities
2,839,074.99
26,810,595.98
ZZZZZZZZZT
9,769,051.07
J ,390,485,050.69
Deposits
$1,552,253,849.56
at
563,509,452.35 in the foregoing
deposited to secure public funds
and for other
purposes required by law.
statement are
The
Our
with
our
organizations
industry.
our
opportunities
industry
of
individual
our
the
and
connected
combined'
all
of
exchanges,
brokers,
the
efforts
can
endless..
are
nationally,
under
leadership of the New York
Stock
Exchange—which is in fact
national
our
well
exchange
—
might
carrying its speak-,
consider
ers'
bureaus,
its
investment
its special events, its dis¬
tribution of information, and its,
the
Good
a
Story to Tell
"Invest-in-America-Weeks"
our
by
dollar
that
business
any
in
is
the
the
to
makes
dollar
invested,
truly attractive package
investing public. It is up
us to figure
how to encourage
the
buying public to come in
through our doors.
for
a
the
to
There
is
planned
activity
an
of
part
as
being
public
relations program right here in
Los Angeles which illustrates the
kind
of
your
imaginative, hard-hitting
promotion
needed
behalf
on
of
our
industry. I speak of the pro¬
posed "Invest-in-America-Week."
As
I
understand
it, the idea is to
wrap up in one package special
events, industry tie-ups, speakers'
bureau
activity, trade association
participation, sustained press cov¬
erage, radio and television, and
the
entire
colorful
of
gamut
ag¬
gressive promotion.
I
particularly like
include
to
and
in
this
them—and that they have every-,
thing to gain by taking
re¬
area
a
con¬
greater
a
part in it.
It is
a
happy fact of human
history that when a good idea is
born, it tends to grow because
what is good in one place is good
in another. The public relations
which
has
industry
is
work
our
all
of
started
work,
by
and
it
encourage
to
that the harvest of good
so
from
been
good
should
us
grow
it
will
be
truly national
in
scope.
Selling our goods to make a
profit is extremely important, as
every one of us knows only too
well. But there is
something even
important—and that is sell¬
more
ing ourselves and selling our in¬
dustry to the public. Let us re¬
ness,
lations, which will present to top
management
that the securities industry
be-,
longs to them and exists to serve*
member
stockholder
Let
businessman, women's organ¬
izations, schools, commercial or¬
ganizations,
members
of
press,
radio and television, and the gen-;
eral public everywhere be given
full
opportunity
to
understand
indus¬
of
right
into the communities.
design
your
institute
an
trial finance
down
the
that
selves but
public.
tional
in
selling
only
not
we
busi-,
our
benefit
our¬
benefit the general,
we
We
strengthen the na¬
which provides
economy,
creasing numbers of people to in¬
ter
in
Is."
1950 Prospects
In
said:
see
"The
volume
about
market¬
is
expected
tardy
Federal
Housing
The
in
the
bonds
financing
cooperation
to
ness
and
I
other
vest
busi¬
public
I
see it is adoption of "Investin-America-Week" by other cities
to the point where it
may become
national
an
activity in the primary
markets, and the growing number
portance of the securities industry
in the lives of all of our
people.
ing
of dealer houses and banks offer¬
ing these issues will create corre¬
sponding activity in the secondary
markets.
"The
public
It
has
a
direct¬
the
to
part
im¬
of
your
country, to develop
tionship
between
desirable to corporations and large
banks
in
the
higher
income
and
munity.
brackets upon the increase in
United
a
industry
general business com¬
Every business in the
the
States
has
direct
a
stake
in
industry, because the broker and
before
course
of
prices.
Increased
corporate taxes, however, together
with
U.
S.
Treasury policy with
and
on
U. S. bonds to
supply
new
money,
definitely influence the prices
of all sorts of tax
exempt
The
survey
closed
on
bonds."
a
warn¬
ing note.
"These
ioal
success
of
the
securities
the investment banker have
Congress.
the
the
opinions of The
market's
outlook
are
munichased
of
helping
to
started and of
business
to
get
new
job
a
and
remain
healthy.
We
must
ness
and
aggressively strive to
story. If
rock
industry in
our
With
that
great
a
cause.
built, let
American
us
make
all
busi¬
telling
the
that
people understand
so.
inspiration,
May
do
to
power
we
have
we
be given
outstanding
an
Charles P. Atherton
Opens in Boston
(Special
to The
BOSTON,
Atherton
53
State
Financial
Mass.
has
to
securities business.
a
member
of
—
Chronicle)
Charles
.offices
opened
Street,
the
engage
Mr.
in
P.
at
a
Atherton,'
Boston
Stock
Exchange, was formerly a partner
in Schirmer, Atherton & Co.
With Waddell & Reed
(Special
to The
Financial
Chronicle)
CITY, Mo.—Owen G.
Turnbull is with Waddell &
Reed,
Inc., 1012 Baltimore Avenue.
is
With Blair Rollins
the
(Special to The Financial Chronicle)
ST.
LOUIS,
Murdoch
why this is
help
our
enterprise
sure
we
more
job!
business is the bed¬
which
upon
even
great.
KANSAS
gain the cooperation of
sell ourselves
we
to
business
helping established
grow
profit
impor-'
tant, we help our fellow-citizens,
and we help to make our country
our
legislative
now
When
with
savings
ourselves—but
closer rela¬
porate taxes that may result from
proposals
their
thinking here in Los Angeles, as
well as an objective of
your col¬
leagues in other parts of the
tax-exempt status of mu¬
nicipals should become still more
cor¬
event
attention
been
employment for mil¬
themselves.
encourage
annual
and
securities
hope this plan works out to its
potential. The full potential
full
as
income
between
the
partici¬
pation in industry financing.
half
second
the continued
ing of issues in quantity. Substan¬
tial
program-of helpful infor¬
mation
business
looking
at
prospects
for
remaining months, Halsey,
1950's
Stuart
will
Member Federal Reserve
System
Member Federal De/xjsit Insurance
Corporation
stock
by
on
so
reaches Ameri¬
lions. We make it possible for in¬
refund
Clearing House Association
carried
aggressive
the
communities,
message
everywhere. This work
cans
be
other
the
enter¬
interested
respect to rates
Charter Member New York
in
that
prise. The institute will also fos¬
be
"Volume will largely determine
Securities carried
throughout the nation.
The goodwork
being done here can be
done
would
crease
$25,000,000.00
75,000,000.00
15,081,250.44$ 115,081,250.44
Personally, I should like to see'
effective public relations work on'
behalf of our industry extended
courses,
large supply of mu¬
nicipals may be expected to in¬
LIABILITIES
tribute to a strong demand for
outstanding municipal bonds."
densed
were
alone.
$1,552,253,849.56
taxes
may
be expected.
Both of these factors should con¬
rarely offered
and most people had no idea who
should
Receivable
securities,
amounts."
dends
ever, no one should lose sight of
the fact that the United
States
cause
k480,140,108.98
433,292.35
'
2,229,109.09
23,045,956.01
showed that only 8 per
of
the
population
owned
survey
United States. At the present time
of
in both individual and cor-,
crease
porate
of
fact
Reserve
the growth prospects of securities,
and the prevailing ratio of divi¬
steadiness
considering the
4,185,215.48
.
the
follow¬
Is, which puzzled the public be¬
State, Municipal and Public Securities
needed
something
have
combinations of short 6s and long
Other Bonds and Investments
Loans and Discounts
were
we have
Federal
recent
a
customer's
of
402,419,942.46
511,288,433.22
122,462,637.77
proof
condition,
for
now
in
Cash and Due from Banks—______
U. S. Government
Obligations
this
that
offered
The
ASSETS
and
they think of 1929.
ing, it is reported that it
index
an
in the Federal income tax returns.
of business June 30, 1950
investments
further
bargain to offer in return
years
At the close
speculative
shudder when
the best
investment
CONDENSED STATEMENT OF CONDITION
purely
another evidence of the municipal
market's broadening and expand¬
tion
Broadway, New York
as
industry have a good
story to tell.
We probably have
of the
165
of stocks
They
Have
livened
Founded 1824
them.
We in
"The
Sc
great
of
be
to
come
the whole
TRUST COMPANY
the
digestion of (or indi¬
gestion from) new issues. As still
day has
is
BANK
of
buy
terms
were
the market's
narrow
to
stocks
commer¬
and
bidders
continued
One
to
many
averages.
he has bonds to sell."
"Prices
This record volume includes the
same
has he
Never before
how
or
investment houses of the country,
the total of its listings each
nationwide
common
why more people do not
buy stocks is because they don't
cent
the
there
reasons
stock
of
of
to
on
time
for
need
securities.
many
most
American
went
present
buying
many
for
index contains
nor
exceeded public offerings of util¬
ity, corporate and railroad bonds
tion
in
va¬
the first half of the year actually
remainder
entire
Hoyt
the
definite
cial
been
This
to
as
the
Mr.
"At
a
If
much discussed
in¬
an
Thursday, July 6, IS50
.
13
page
and other industrial and
sup¬
ply.
issues and
jrom
to
economy,
loomed
floating
"In
.
The lob Is to Sell Ourselves
der'
the
intensify
it said.
of
municipal
new
the average no matter
large the so-called 'remain¬
in
not
a
equity
were
will
future,"
they do,
however,
say:
nearly the
very
at
near
event
drastic reduction in the supply
how
ket."
the
the
em¬
was
phasized by the way in which suc¬
ceeding issues of a frequent bor¬
rower
"There
expected that by fall all
is
details
"Mid-Year Sur¬
annual
its
in
vey
"It
achieved
complications
in
price on a 'slow-mover' at almost
any time during the period. This
make up the total.
tax-exempt
new
road, housing
issues went to
school,
price
by
basis—a
many a
said.
Large soldiers' bonus issues from
Pennsylvania,
Washington
and
Iowa, the first $50,000,000 of Cali¬
fornia's State school bonds, vari¬
that
in
record
new
age,
vious records, Halsey, Stuart
billion dollars
a
in
the
prices
tax-exempt
yield
though drastic reduction in supply may be expected if foreign
complications worsen.
variation
featured
postwar
markets—as is well known.
measured
Market for variety of issues still favorable,
$7 billion.
has
money
high in state and munic¬
a new
small
level
.
just
is
Mo.
—
affiliated
Herbert
with
S.
Blair,
Incorporated, 314
North Broadway.
Rollins
&
Co.
Volume 172
Number 4922
Continued
from
.
.
.
The Commercial and Financial Chronicle
ity
12
page
n(85)
unsound
for
less
themselves and
Our
private
there will be
programs,
demand
plans.
life
their families by
A Realistic
it seems to me,
is to preach the gospel of a sound
to
approach to the whole subject of
Approach
veterans hold government life in¬
make
to
as
our
The
fatal
be
to
decisions
base
income
national
that
earned in recent years
dented
on
has
of
the
been
unprece¬
boon.
Security plans are
projects, the cost of
long-term
which
times
it could
of various kinds,
grams
well
times,
they
in
carried
be
must
as
bad
good. And in bad
as
the
For
last
ten
years,
United States, aided by
Federal
a
deficits,
and
the
continuous
spurred
on
guarantees and
subsidies, has been living in a
boom which has gone higher and
lasted longer than any previous
one in the nation's history.
If we
by
government
base
security programs on the
our
to
as
mere
these
consider
of
vital
principles
words. This, is not
believe
who
us
freedom
vidual
and
in
The
them.
dignity of the indi¬
after centuries and
centuries
of
were
they
slavery
it
ed
and
lost.
fought for,
self.
And
price
.
.
of
immediate comfort
and
it
sometimes
is
at
a
the foregoing of greater
.
immediate
gratuitous
insurance
prevail, and
enters into programs
afford, the final result
of the
those
of
dollar
to
million
80
accomplish
never
point at
a
people
their
is,
will
intended
I
believe, our
duty as leaders of this great en¬
terprise to make our voices heard
It
purposes.
on
this subject.
life insurance
It is
as
women
and
men
duty
for this
is
our
bring
great country of ours. It
our privilege to
individual
security
and
duty and
secur¬
assumption that the current boom
will
smoothly
and indefinitely
continue its upward path, with¬
out the interruptions and read¬
opportunity which is inherent in
ity
of immediate standards of planned life insurance to as many
living higher than we earn.
But as we can reach.
To this end let
justments history has taught us to
impatiently
..
.
once
embark
we
road
the
on
of
incredibly
being
are
we
A Realistic
Approach to Social
Security
for
greater
apparent solutions to our as¬
We Americans often become ob¬
pirations, we enter the long retro¬
gressive road back to dependence
the
I
ply statism. They
But there is
hope
on
approach to the
an
commend itself as re¬
may
It is to study
alistic.
each demand
the light of the
actual need for it, at the level
where it does not replace indi¬
in
security
vidual
accomplishment, and in the
light of the country's present abil¬
ity to assimilate it.
The factual
and
needs
of
ability to
pay
This is the
Should be. paramount.
accepted approach of the trained
life insurance underwriter to the
underwriter
the
life
nature
recognizes
individual's
the
of
all the same
their fundamental philosophy
in
are
that the State becomes the arbiter
of
Our
lives.
our
inherent
dignity,
freedom, our
Most
gone.
are
emphatically, this does not mean
we cannot have security plans. It
does
that
mean
should
be
all
such
plans
both
screened
their concept and degree
to preserve
than
million
by
people
13
the
Under
achieve
der the
ered
this
dependents. Un¬
tion, I
pending in Con¬
much to
achieve the objectives of
security
on
the
an
toward the objective of
I think
of
lines,
straining
an
our
A
solve
must
we
within some
So a pro¬
of the kind I have outlined
problems
our
arbitrary time limit.
gram
too slow and unspec¬
tacular to many people. But Rome
may
was
seem
built in
not
day;
a
nor
can
plans for the economic security of
150
million
people
plished overnight.
us
review for
a
be
accom¬
However, let
moment what
have already done to
Walker
in order
achieve
we
our
security offers
to
ques¬
tive of any
of
-
in Economic
Life Insurance Role
Security
ing
have
individually,
to
increase
protected
the
demand
for
Fenner
Joins Paul
Rudolph
(Special to The Financial Chronicle)
life
SAN
Chan
FRANCISCO, Calif. —
Sing has been added
Ngok
to
the im¬
tjne staff of Paul C. Rudolph &
and protec¬ Company, 749 Market Street.
focus public attention on
vantages and avoids many pitfalls.
overstraining of the
problem, outlines the best means
available for solving it, and offers
It prevents an
the
practicable solution of
that problem, he satisfies the in¬
dividual's
security
aspirations.
The same technique can be ap¬
deadening effect of excessive tax¬
ation. It prevents deficits that will
plied to the larger problems aris¬
erations.
most
for security
national scale.
demands
from
ing
programs on a
To continue the
-
a
analogy, you as
life underwriter may study the
of
needs
insurance
a
real need
for $50,000
of protection. But you
his present income,
afford only $25,000.
So
know that, on
he
can
provide him with. $25,000 of
you
now,
coverage
additional $25,000
the
for
establish his need
in the
future, and issue it to him piece¬
meal when and if his income in¬
the produc¬
tivity and income of future gen¬
real
avoids
It
fulfilling
are
It enables government and pri¬
vate
enterprise to work jointly,
each
doing the particular
with
things for which it is best suited.
It
to the con¬
could not
reasonably assume the full cost of
Part of the pro¬
gram could be adopted immedi¬
ately; the need for the balance in
the program now.
raises
far from
that
assurance
adopted
the future
be established;
would
as
improved technology
and other economic developments
justified it, the remainder of the
program
could be adopted and
paid for.
inal
was
the basis for the orig¬
It is inherent in
insurance
does
not
insurance.
of life
institution
underlies the Blue
It
Cross Plan.
current plans for
surgical needs.
It
exclude governmental
of
participation,
but
require¬
the
ments for that should
be that the
service is beyond the
capacity of
private
initiative and funds, but
within the capacity of a govern¬
ment
operating
on
a
balanced
budget.
Also
tal
be
individual
to
human
or
but
last,
threat
no
freedom
dignity.
Chairman
NEW
least, it gives
program
any
be successfully
can
car¬
Chairman Executive Committee
GEORGE WHITNEY
HENRY C. ALEXANDER
without
portunity.
participation, I believe, should
an
awareness of the need for
preserving the freedom and dig¬
nity of the individual.
There is
danger that this may be lost sight
of, in the rush to get things done.
a flight
economic op-r,
injuring the economy—...
will actually promote its growth
and add a new factor of stability.
We
who
business
yield
to
no
of
life
in
man
create
to
engaged
are
great
desire
in
this
insurance
our
fervent
real
security for
all. Our predecessors, who found¬
institution
the
of
life
insur¬
dreamed that dream of
ance,
curity
State and
than
more
100
years
Investment
Stoclc of
Corporation
BERNARD S.
few
wealthy
families.
Those
founders, and others who followed
them, have devoted their lives to
Cie.
Chairman and President
The B. P. Goodrich
Company
DAVISON
of
basis.
And
Americans
have
en¬
their security to us.
seems
to
people,
duties
that
me
to
we,
Accrued Interest, Accounts
2.309,948.53
Receivable, etc...
3,000,000.00
•
Liability of Customers on Letters
9,367,069.43
<
,
$642,224,470.38
Vice-President
N.
I). JAY
LIABILITIES
Chairman Morgan & Cie.
Incorporated
s
DEVEREUX C. JOSEPHS
President New York Life
Insurance Company
THOMAS S. I.AM ONT
Vice-President
L. F.
McCOLLUM
Company
G US TA V M
ETZMAN
President New York Central
insurance
life
The first is to
and
insurance, because if
Deposits: U. S. Government
All
9.208,674.85
$567,026,333.97
Payable, Reserve for Taxes, etc...
4,129,954.40
Official Checks Outstanding
Accounts
$ 49.499,878.88
508317.780.24
Other
Acceptances Outstanding
Credit Issued
and Tellers of
..
9.709,284.80
20,000,000.00
Capital
30,000,000.00
Surplus
Undivided
11,358,897.21
Profits
Railroad Company
,
JUNIUS S. MORGAN
Vice-President
$642,224,470.38
ALFRED P. SLOAN, JR.
securities carried at $66,678,830.40 in the above
arc pledged to qu Hfy for fduriiry powers,
to secure
public monies as required by law, and for other purposes.
United States Government
statement
JAMES L. THOMSON
Chairman Finance
as
have two pri¬
perform in the
present situation.
have
12.443,459.35
ISO,923,758.32
CHARLES D. DICKEY
Corporation
life
Sp
'
Chairman General Motors
practical
mary
Grenfell
Vice-President
many
sell
(including Shares
Co. Limited and
Morgan 4" Gie. Incorporated)...... .........
of Morgan
of Credit and Acceptances
H. P.
sound
It
37,765,955.76
1,500,000.00
the Federal Reserve Bank
Banking House
and
insurance
253330,511.29
Municipal Bonds and Notes
Loans and Bills Purchased.
the creation of security on a
millions
Securities
Other Bonds and Securities
CARTER
JOHN L. COLLYER
ago,
unattainable by any except
was
$141,583,767.70
Due from Banks
Government
CABOT
PAUL C.
President State Street
President Continental Oil
se¬
when those of lesser faith thought
a
Hand and-
States
Security of that sort—
from
trusted
underlying all governmen¬
or
on
United
Vice-President
CHARLES S. CHEST ON
sacrificing either
living standard,
ASSETS
*
Cash
I. C. R. AT KIN
President More/an &
Thus, security for all becomes,]"
not a doubtful mirage, but a long-'*
term reality that can be counted,
upon.
And this can be achieved^
it
June 30, 1950
Condensed Statement of Condition
Executive Vice-President
Long-Term
a
Reality
ed
YORK
ARTHUR M. ANDERSON
And
ried out.
far
INCORPOR I TED
C. LEFF1NG WELL
Incorporated
clusion that the country
This
genuine
a
a
need for it, but come
then,
programs
J. P. MORGAN & CO.
•
R.
President
Counting Upon
a study of some de¬
security program on a
national scale might show a real
and
and
need.
Likewise,
mand for
wasteful
that any
assurance
adopted
DIRECTORS
mortgage
unjustified expense, and provides
in the future.
creases
It reduces the
system.
otherwise
individual
an
has
that he
find
and
economic
more
life
more
people
satisfactory personal
secur¬
Committee Hartford Fire
Insurance
JOHN S.
Company
Chairman Sharp & Dohme
Member Federal Reserve Si/stem,
Member Federal Deposit Insurance Corporation
ZINSSER
Inc.
&
Pont & Co.,
ad¬
many
form¬
2809 Collins Avenue.
The national programs
portance of security
was
MIAMI
BEACH, Fla. — Mrs.
Rosemary S. Weber has joined the
market
insurance.
Pierce,
staff of Francis I. du
believe,
reducing
Co., 135 South La
Mr. Foster
Joins du Pont Staff
sponsored programs
the
from
David
associated
(Special to The Financial Chronicle)
by buying life insurance in pri¬
vate
companies.
The
national,
government
&
Lynch,
never
minimum
the
McFarland,
and
become
Beane.
be satisfied
provisions of
national security plans. They will
always want supplemental secur¬
ity, and they will obtain it chiefly
people will
Bache
rill
there will always be a vast
In
country as rich as this, millions
with
we
erly with Hicks & Price and Mer¬
demand for private insurance.
a
have
Salle Street.
gram,
—far
security.
Eighty million Americans, act¬
approach
with
insurance? Irrespec¬
national security pro¬
for life insurance—tend, I
dream of
priceless heritage
our
realistic
tions of
sessed with the idea that
greater business than
Lambie,
Harold
J.
Ralph
E.
Vennum,
effort to achieve
And what does this all mean to
life
a sound basis and, at
time, build for ourselves
CHICAGO, 111. — George V.
Curry, Donn E. Foster, James T.
the final goal too quickly.
private
will do
(Special to The Financial Chronicle)
pro¬
bankrupting
or
in
economy
we
Seven With Bache & Co.
do not make the mistake
we
same
even
further
to
such
along
progress
vided
forward
certain that
am
have had before.
represents tremendous
look
can
it
oppose
now
complete security for all.
we
must,
their
bill
progress
we
people, can help the public to
recognize that important distinc¬
greatly increased.
All
But
strenuously
me,
unsound.
the number of persons cov¬
by Social Security will be
gress,
chief
such plan that is economically
If we, as life insurance
any
Se¬
that.
to
seems
coverage
entitled to benefits for them¬
selves and
the
As
of
family security, we
can not
logically oppose the objec¬
tives of any plan that helps to
curity program 44 million people
are
supplying
protection.
advocates
insur¬
Social
programs
reasonable
family
pro¬
that reimburses them for medical
expenses.
within
practical costs, they
help you—not hinder you
should
insured
expense;
and
have
national
as
and
—in your great work of
are
million
long
kept
bounds
More
are
hospitalization
ance;
some
As
are
million
35
which to build.
on
protected by acci¬
are
health insurance.
61
tected
Security."
to
as
of freedom.
problem of the individual. Because
the
In
vital job of being "'Merchants of
problem of security for all, which
test
to the
anew
freedom
comforts
sacrificing
immediate
almighty State, whether it
be
called
communism, fascism,
socialism, totalitarianism or sim¬
for
dedicate ourselves
us
and
expect,
naive.
More
dent and
to
our
preach sound doctrines of security
of greater
...
life
which the life insurance proceeds
It is not a gift.
It is what
fights for and holds for him¬
man
cannot
value
it will be
or
lions.
Americans
will probably be a dilution of the
It must be jealously guard¬
man.
million
80
the country
Constitution of the United States.
Freedom is the noblest concept
as we can
of thinking.
way
billions.
totalling another $38 bil¬
surance
34 million
against
surgical
the
in
converts
thus
For if unsound views
strife,
and
embodied
many
and
$215
addition to this, about six million
than
the highest attainments
are
of civilization,
welfare,
than
more
policyholders in America have a
great deal at stake in this matter.
and
so
should be conceded by those
and
relatively
become
serious burden.
more
There is danger that we may come
never
and
security
To Economic
tion, and furnish the average fam¬
ily, for the first time, with a base
amounting
insurance
second great duty,
25
26
(86)
The Commercial and Financial Chronicle
Continued
from
Estate Taxes Aie
By WILLIAM J. McKAY i
studying the whole question of
U. S. import policy. In the case of for
creditor nation, but a spirit of dis¬
illusionment concerning undue in¬
Canada, despite the "Buy Ameri¬
volvement
those
in
affairs
world
and
of
Europe
in particular,
tended to breed widespread eco¬
nomic
isolationism.
the
During
certain
chase
in
the
The
tial interest in
its
opinion
the
would
far
"go
to
the most serious obstacles
remove
U. S. Tariff Act to the in¬
international
of
crease
Also during the past
15 years the
Reciprocal Trade Agreements pro¬
the world would
gram
.sufficient dollars to
its
cover
in¬
debtedness to the United States.
trade."
has been responsible for
reductions
siderable
tariff, and
in
the
con¬
U.
list of 2,500 items
a
S.
on
death
taxes
itself following World War II. The
sider
granting further concessions
nesses
United States had become
will
be
to
repeat
an even
greater creditor nation, and dev¬
astated Europe and the rest of the
world
were
more
than
de-
ever
l»endent on its exports.
Foreign
loans, gifts, and ECA assistance
served to fill immediate needs but
these
frankly emergency
that provided no basic
were
measures
solution
of
economic
world's
Happily, however, this
problem.
time
the
the
U.
S.
outlook
affairs had undergone
change.
There
was
no
profound
repetition
of the isolationist spirit
that pre¬
vailed after World War I.
there
was a
world
on
a
Instead
profound appreciation
of the fact that to avoid
chaos,
as¬
As
result of recent events this
a
spirit has been put to
new
vital
a
test and has not been found want¬
ing.
The challenge of the
aggressor has
way
been met in
that the world has
latest
sucji a*
no
doubt
of U. S. willingness and ability to
assume world
leadership.
In the
economic
field
however
the
look is not quite as clear.
out¬
The
an¬
forth¬
coming International Tariffs
and
September at Torquay, England.
Thus
there
little
is
doubt
that
this country will capably fulfill its
destined role as the world's eco¬
nomic, as well as political, and
military leader. As Canada in par¬
ticular has long urged, a lower¬
ing of the U. S. tariff and simpli¬
fication
dures
U.
of
would
S.
customs
remove
proce¬
the
of
one
principal barriers in the path of a
greatly expanded volume of world
trade, the bridging of the dollar
general convertibility of
gap, and
currencies.
the
During
tional
essential.
was
the
at
Trade Convention to be held next
sumption of effective world lead¬
ership
discussed
week
tivity at
a
external
and
Canadian
export¬
of
lead, copper, cattle and
fiuospar, who had hoped for lower
ers
rather
than
higher U. S. tariffs.
Similarly, Canadian exporters had
entertained
high hopes for the
early passing by Congress of the
U. S. Customs Simplification Bill,
t»ut it now appears there is no
chance of passage in this
Congress.
Such
ing
doubts
U.
S.
however
intentions
concern¬
in
the
eco¬
nomic field have little foundation
es the record
clearly shows. Al¬
ready
by' a
special committee headed
Presidential appointee is
a
the
last twenty consecutive cases
that have been analyzed
by our
Trust
Department.
During the
past fifteen years I have analyzed
better
than
400
families'
estates,
of which contained closelyheld business interests, and I can
assure
you that
the findings in
many
these twenty
typical.
cases are
explain that the figures
I am about to give you are those
that applied to each case as of the
time
that
first
we
after
the
examined
it—
individuals
had done
cerned
con¬
everything they
both
minimum in
the
are
typical
firmer
funds
at
also
was *
easing
9V2 %
to
strengthened to 914%. Despite
peated
rumors
a
143/4%-14%, and
after
concerning
an
re¬
im¬
this
lar,
the
necessity of do¬
so.
eight
of
them
did
involve
not
closely-held business interests; al¬
though three of these eight had at
time been the owners of close
one
corporations,
or
had held substan¬
is by no means likely tial interest in
such businesses, but
prevailing circumstances,
they had sold them out—because
although it can be considered as of tax
under
considerations.
eventual
an
possibility. Stocks
staging a preliminary rally
were subjected to successive sell¬
ing waves that affected all sec¬
after
Of the
all
of
remaining twelve estates,
which
involved
complete
ownership of or substantial inter¬
ests in closely-held
businesses—
tions of the market.
Industrials
and base-metals suffered heavily mainly corporations — in every
and
Western
after
and
the
golds
displaying earlier resistance
finally followed the general
mar¬
ket downtrend.
Louis
the individual had
case
oils
he
terest,
wanted
usually
to
someone
to
his
to
his in¬
pass
children.
However, ten of the twelve
estates
analyzed did not contain sufficent
liquidity with which to pay the
Stirling to Be
succession
taxes
that
would
be
imposed by the time
Belts Borland Partner
the estates
reached the children. This meant
but one thing—an eventual forced
business
In
dollars, the total taxes that
analyses showed could
be
our
'Government
claimed
the
Provincial
■
.
on
time
these
both
ten
cases—by
husband
and
wife
were
gone—amounted to approxi¬
mately $2,100,000, and their total
liquidity was less than $745,000.
Municipal
1
*1
Corporation
hcamman stocks
Louis
J.
These figures were arrived at
by using in each case the higher
of book value, or an
average of
each company's past three
years'
earnings capitalized at 10%, as
being the probable claimed tax
value of the business interest in¬
Stirling
You may well say that
CHICAGO, 111.—Louis J. Stir¬ volved.
ling will become a partner in this is a purely arbitrary method
of setting
Betts, Borland & Co., Ill South
up the values that the
La Salle Street, members of the authorities
might claim—and it is
im
New
lauuuvu w
and
Midwest
Stock
Two Wall stroot
ivv>"'
It
Joseph James Bodell died
Street
n
were
Joseph J. Bodell
1-1045
• «
Mantaa ft, Ulaa.
6 l-'-v
do
not
arbitrary,
are
think
contained in these estates—if
they
h.
NY
I
it is too far
Exchanges, on July 17. Mr. Stir¬
ling has been resident manager from the basis that would be used
in Chicago for Hirsch & Co.
in valuing the business interests
Btew Yairlk 5, N. Y.
WORTH 4-2400
—but their methods
and
INCORPORATED
fir.
York
age
of
Mr.
Bodell
68
retirement
after
from
in
a
long
1909
1942
illness.
until
was
Bodell & Co., investment
Providence, R. I.
at the
head
his
of
firm of
being administered today.
is true,
figures
we
of
all
we
Courts,
the
recent
have
owners
of
Estate
know, for
there
others
that
Revenue
cases
are
estates
as
than the
usual
negligible amount of estate
planning.
It is also true that by
certain
rearrangements
that
we
the
quite
Federal
require¬
one
aspect
problem
serious
to
last
our
ten
but
which
propor¬
and
years
one
fac¬
more
along the road
progress
Socialist state, where all
a
business—large
and
government
small—will
owned.
A Relief Plan for Estate Tax
Valuations
Relief
valu¬
every
Mr.
that reaches the
are
many,
settled
are
by
by
the
the
nomic
figure.
Recently, however, I
across a
compilation that
you
of sixty-two
disputes as to
cases
then
ran
may
of
at
lower
or
the
in
value
4%
of
somewhere
the
cases
between
the
able
be
per
$18,800,000;
the
er's claimed values
(better
and the
share
$37,700,-
higher)
to the
all
fact
t,o
seem
that
to
stantial
100%
a
part
of
not
businesses each year.
As
a
consequence,
present
our
small
businesses and
either
caus¬
at the
ernment
to
"small
I
in
are
ing great
As
time
same
our
the
elected
Federal
rep¬
Gov¬
rendering lip service
business"
and
concern over
said
at
the
So¬
cialistic form of government is not
office.
way
of
Taxes
are
is
nature.
tax,
of
most
.It
is
a
all
social reform.
our
It
is not,
in light,
tremendously high gov¬
expenditures, an impor¬
source
of
recently
tax
revenue.
published
In
figures
show that if the government were
to
impose an immediate 100%
capital levy on all life insurance
cash values, city real estate, farm
the
destroyed
the
govern-
last
year
combination
Tax
of
rates
value."
Transfer of the
of
Maloney
will
*
be
the
to
Gerald
^considered
Keller,
Paul
W.
both
came
a
David
of the
ited
ner
•
13.
partners
Co., withdrew
general
Burnet
limited
&
part¬
Co.,
partner July
be¬
1.
Burt, Jr., member
Exchange, general
partner
on
juiy
June 30.
on
Allan
P.
O'Connor
limited
&
in
Watson, retired
a
T.
on
Ward,
E.
mem¬
Gregory
Brown and Nellie
Brown
the firm
in
Exchange
late
Inez Hereford
B.
and for some years now has been
fact,
of
bership
ner
employed by politicians to effect
of
I
changes:
of
levy
still
The New York Stock
Exchange
has announced the
following firm
socialistic
capital
would
Exchange
Weekly Firm Changes
surest
forms
that
New York Stock
Socialistic
the
estates
significant
light
Sidney F.
estate
taxation,
in
Tax
in
tax
from
Estate
The
In
revenue.
the
a
needs.
in
the
bringing it about.
they
very sub¬
coupled
arbitrarily high claims as to
their
necessarily brought about by rev¬
olution
or
by voting Socialists
into
been
Estate
with
express¬
a
further
are,
a
received
so
because
its welfare.
outset,
they
of
on
otherwise
or
ing them to liquidate or sell out,
usually to some larger company,
resentative
if
proposed
be
wonder, though,
how
many
small
closely
held
businesses were sold, liquidated
high
system of levying succession taxes
is
picking
off
one-by-one the
now
rates
produce
tax
have
ment's
all of many family-owned
or
time;
by one,
key-men-
the
is
and
one
one
they collected from last year, the
in
liquidation
slowly
fact, if the government had levied
indi¬
taxes—results
or
It
Tax
amount
amount,
sale
In¬
and
are
at
off
as
die.
and
income
them
will still not
vidual accumulating any substan¬
tial amount of liquidity, because
forced
to
insurance
Estate
levies
speak,
revenue
high
high
Estate
actuality—and when coupled with
our present high estate tax rates
the
such
owners
increased;
problem
closely-held
business
in¬
being vulnerable to an arbi¬
trarily high tax valuation is an
of
not
death
destroying the small
Their effect is less no¬
that
point
an
would
his
surely
owners
this
impossibility of
at
that
Treas¬
Tax
so
of
a
terest
the
insurance
present
property
they pick
than that claimed by the estates).
up
which
States
ticeable than, for instance, an in¬
in corporate income
taxes,
because they do not affect
all
by the Courts were $26,500,000
(about 40% higher, on an average,
would
United
crease
commission¬
were
death
but
values
100%
than
govern¬
at
heritance
values finally established
This
the
extent
our
dollars, the total of the tax¬
000
to
business.
payers' claimed
to
be
actually used to pay taxes.
"My experience leads me to be¬
lieve," Mr. Hackett stated, "that
was
established.
was
He
was
upheld.
Thus, in 90% of the
a1 value higher than that
claimed by the decedent's estate
In
of
redeemable
subject to tax
the
cases
was
form
some
bond
ury,
mean
and the commissioner's value
en¬
pay¬
and
value
a
are
payment of death taxes; but
a
bond which, itself, would not
be subject to the death
tax; and
to permit the individual who
has
a taxable estate to take
out, if he
is insurable, life insurance
sustained,
was
settlement,
for
the government's
cases
to
as
high estate and inheri¬
levies, together with litiga¬
lifetimes
commissioner's claimed values. In
66% of the
tax
stated
that
ment
than
taxpayer's
of
permitted to acquire during their
value, and only nineteen—or 30%
settled
behalf
businesses
then suggested as one solution
the problem, that individuals
the basis of the taxpayer's claimed
mean
Con¬
the Eco¬
tion or preventing descent of
terprises from father to son.
closely-held corporation
shares.
Of these sixty-two cases,
only six—or 10%—were settled on
the
in
small
last
Joint
on
slowly but surely destroying small
businesses by forcing their
liquida¬
of
—were
the
tion costs in their
tax
value
for
tance
in¬
the
seen
volving
Report
relief
"compromise"
by the Executor,
at how much higher a
so,
appearing
before
gressional Committee
claimed
if
and
Hackett
December
many
basis
our
in which
approxi¬
not
—
"plan¬
value
tant
on
more
tax
nation, is
be
actually settled on a
that
is
higher than
the
based
no
in
toward
not
are
ernment
found them; estates
estate
tor in
method and, therefore, it is im¬
possible to know with any degree
of accuracy how many valuation
of course, that these
there had been
of
in
would
which is still growing, and which
threatens every small business in
#
whom
total
a
billions
developed
tions
substan¬
a
the
has
was
To go back to my twenty
cases,
finds few purchasers.
<
As
ing
free
of
closely-held busi¬
a
ation controversy
corporate-arbitrage
shade
realize
tax
and
estates
in
necessity
Difficulties
and
underwriters, very few people
have "planned" their estates—or
even
those
created
contain
the
realize
working
they
ning."
and
bond
ent
holding. A minority interest in a
closely-held business, of course,
/;,
realized
market, although the
price-level of Dominion internals
was
fairly well maintained. The
the
of
been
which
claim
sections
laws to
tax
and whose
ness,
because despite the most* persist¬
efforts of lawyers, trust men
internal
sale of part or all of the
|
present
that have
have
I should
not
the
Executor and Collector of Internal
ning." These situations
official rate of the Canadian dol¬
to
each year.
To illustrate this point, I would
like to summarize the
findings of
ac¬
minent upward revaluation of the
news
many
kept
the end of December next of the
U. S.-Mexican trade treaty comes
bad
today impairing
small busi¬
are
destroying
fact that high
interna¬
nouncement of the cancellation at
as
our
they
could to minimize their problems
and their taxes, by "estate
plan¬
the
and holidays
news
to the
regard
any
or
commenced
as
become,
invariably claim the highest pos¬
sible value—and many times their
claims
are
unrealistically
and
fantastically high.
This they ap¬
parently do deliberately, without
which the United States may con¬
History
have
governments
with,
minimized
liquidity increased to some
extent, but I am trying to illus¬
trate
what
is
happening under
collected; and, tax hungry
in
claim and
can
States,
mately $138
their
years,
Obviously, the higher the value
net
industries
ments for three years.
I submit
that this
be
sustain, the greater will be the tax
Mow in the shape of the Smoot-
earn
represents the inclusion of "good
will."
the
the
enough
to
satisfy
the
Government's
budget
familiar
could
cation Bill, the adoption of which
flawley Tariff of 1928 was deliv¬
ered to any hopes that the rest of
to
the
all
are
load
that the authorities
in
be able
that
pur¬
requirements
arms
Dominion.
will
capitalized earnings
is
the higher—is
resulting higher value
a
that
Treasury
Department is pressing for the
passage of the Customs Simplifi¬
'20's the mounting dollar
£ap was bridged temporarily by
foreign loans and advances. Fol¬
lowing their termination a fatal
early
Act," this country
using
basis—if
and
all
United
only
Destroying
Small Business
The United States emerged from
World War I the world's leading
Thursday. July 6, 1950
.
.
properties,
capital of
the
Canadian Securities
can
11
page
.
June 28
Hazlett,
as
a
but
and lim¬
Burt
&
limited part¬
continues
as
general partner.
Interest of the late Hurlbert C.
Elmore in H. N.
Whitney, Goadby
& Co. ceased June
11.
'
Volume 172
Number 4922
.
.
The Commercial and Financial Chronicle
.
(87)
with
Continued from first page
issues at
no
all except
the sort of issues Governor
With
We It
See
As
which ended
tion
delphia conference is not. It is, accordingly, a little diffi¬
cult to say with certainty whether, or in what degree, the
Philadelphia group is in sympathy with the stand of the
Committee members. Word, guarded word, from Philadelphia suggests some differences of view, but what has
*
.
been vouchsafed leaves little
.
publican Advance is
for doubt that the Re¬
room
to most of the strictures laid
open
It would appear,
down in these columns last week.
indeed,
party were par'excellence the
moving spirits behind the Philadelphia meeting.
that the "me-too-ers" in the
Ubiquitous Fair Dealism
to us to be "negative" in a very fun¬
seems
damental sense, far more so than what
all those who have
deal like it of
that
sense
what is
no
being.
That is to
in effect.
inconsistencies and
mental programs;
the
or
any
other
it is negative in the
of governmental affairs; to be
worse are
form, they still would leave us in
creeping socialism
a
to be found in govern¬
or
something closely akin
a great
jfiany Repub¬
nearly if not fully as imbued with the New
Deal and the Fair Deal philosophy as are the members of
the other great party. Here and there a member of each
of the parties has the understanding and the courage to
stand up and declare himself in sympathy with the prin¬
ciples of individual freedom, of individual self-reliance,
and all the rest which brought this great country of ours
to its present position of eminence throughout the world.
But their number is limited, and even thtse who pay
homage to our way of life have all too often got into the
habit of qualifying their positions in ways that compromise
their avowals of faith in a degree of which they themselves
are
probably not always fully aware.
down version of seventeenth and
cantilism and the
So far
This it appears to us
token the
same
a
negative
what
is,
the Republican Advance
as
essentially negative in nature, but by the
Its stand is,
far
so
as may
Stock
It is
"goals" and arguing about
a
Joins Hornblower & Weeks
(Special to The Financial Chronicle)
CHICAGO, 111.—Philip H. Kreishas
man
&
Weeks,
La Salle Street. In the
with
&
Adams
with
associated
become
Hornblower
Co.
Soutji
134
past he was
and
Taylor,
Duryea & Co.
for
And
our
part, We cannot imagine how a plain,
blunt statement that
that the best
means
fare for all the
could be
(Special to The Financial Chronicle)
is
one
of
firmly con^j|iced (as we are)
obtaining maximum"economic wel¬
people is found in the American system
CHICAGO, ILL.
—
William E.
Tague has been added to the staff
Cruttenden
of
Salle
La
&
Street,
Co.,
South
209
members of the
New York and Midwest Stock
as
All this New Dealism and Fair Dealism is a
watered-
*
With Faroll & Co.
t
one
no
guild system.
accused Adam
as we are aware
Smith, whose influence had a large
part .ip., overthrowing all this, of being
"negative" in his
(Special
to
The
111.—Harry
CHICAGO,
cou
Financial Chronicle)
J.
South La Salle Street,
the New York and Midwest Stock
New York Trust
'
't
'
efficient and business¬
more
It often
like administration.
'
comes
down
to
a
Company
plea for
statism.
100
argument for programs which imply by
TEN ROCKEFELLER PLAZA
that
assurances
an
shall
we
not
have
BROADWAY
•
MADISON AVENUE AND 40TH STREET
MADISON AVENUE AND 52ND STREET •
nature wide intervention of government into
SEVENTH AVENUE AND 39TH STREET
the affairs of individuals.
The term
"goals"
plies something
almost
on
invariably
as
ordinarily
used plainly im¬
now
are
jectives; most of them
employed to
are
a
New York
sort which could
Chairman of the Board
Colt's Manufacturing Company
ARTHUR
wholly out of keeping with American
Bushby & Palmer
sions," and the rest in this country, like "fair" shares for
WILLIAM
United States Government
the
across
water,
are
government
objectives,
The Clark Estates, Inc.
not
merely hopes
or
expressions of faith in what
be expected
plished
or may
natural
workings of
as a
be
can
*
F. CUTLER
American Brake Shoe Company
accom¬
RALPH S. DAMON
matter of course by the
1,650,000.00
Stock of Federal Reserve Bank
•#
Vice President
-
314,962,253.67
Obligations....
STEPHEN C. CLARK
all"
$192,405,098.06
Cash and Due from Banks
JOHN E. BIERWIRTH
President, National Distillers
Products Corporation
expansion," "abolition of depres¬
or
ASSETS
A. BALLANTINE
Root, Ballantine, Harlan,
history and American tradition. "Full employment," "un¬
interrupted growth
June 30, 1950
GRAHAM H. ANTHONY
conceivably be reached by government only if govern¬
ment assumed roles
CONDENSED STATEMENT OF CONDITION
P. ALDRICH
MALCOLM
government ob¬
mean
obviously of
DIRECTORS
Such goals
the order of socialism.
5,015,757.96
Other Bonds and Securities
243,718,554.48
Loans and Discounts
President
Trans World Airlines, Inc.
a
free society.
Customers'
FRANCIS B. DAVIS, Jr.
New York
An Old Trick
Liability for Acceptances
2,299,633.72
and Other Asset!
3,333,572.02
Interest Receivable
"WILLIAM HALE HARKNESS
New York
Now it is
an
old type
of political trick for the New
*
$763,384,869.91
HORACE HAVEMEYER, Jr.
President
Dealers
and the
Fair Dealers
opposes
their particular programs dees net want "full
to
say
employment," "continued expansion,"
that
any
or an
one
who
end to busi¬
f
■■■
B. BREWSTER
depressions. It is such charges that
tion to wince and retreat.
cause
politicians feel that they must continue to
are
for the
sin in
the opposi¬
So it is that these Republican
say
that they
happiness and health of the people and against
general.
branded the
And since the late President Roosevelt
men
who made such
avowals
as
these, but
opposed the specific programs of the New De§l, "yes-but"
men,
the tendency has been to go much further"than
ly to curtsey to abstractions. That is to
say most
mere¬
politicians,
lio matter to what party they belong, now feel that they
must
acquiesce in the notion that such "objectives" must
be those of the state.
The
evidently felt that it
was
political folly, not only to
\
"
"negative," indeed that it
oppose
was
these essentially Euro¬
ideas but to fail to outshout the New Dealers and the
Fair Dealers in their support.
This left them, of
course,
LIABILITIES
J. SPENCER LOVE
Chairman of the Board
"^HYBurlington Mills Corporation
Capital
$15,000,000.00
Surplus
40,000,000.00
Undivided Profits
12,599,603.80
ADRIAN M. MASSIE
Executive Vice President
^
4*
*.;>Morris & McVeigh
ilfl
CHARLES J. NOURSE
;,Winthrop, Stimson, Putnam
CHARLES S. McVEIGH
& Roberts
RICHARD K. PAYNTER, Jr.
Financial Vice President
$
67,599,603.80
1,646,813.50
General Reserve
Dividend
600,000.00
Payable July 3, 1950
New York Life
Insurance Company
*
ROBERT C. REAM
Chairman of the Board
American Re-Insurance Co.
2,313,306.09
Acceptances
SETON PORTER
Chairman of the Board, National
Distillers Products Corporation
Accrued Taxes and Other Liabilities,
3,753,538.79
687,471,607.73
Deposits
]j
$763-, 384,869.91
MORRIS SAYRE
President
Refining Co.
CHARLES J. STEWART
President
WALTER N. STILLMAN
Stillman, Maynard & Co.
VANDERBILT WEBB
Patterson,
pean
JENNINGS
President
Corn Products
Republicans gathered at Philadelphia fast week
Refining Co.
Socony-Vacuum Oil Co., Inc.
'
ness
The National Sugar
Belknap & Webb
United States Government obligations carried at
ment are
209
members of
The
the
Dis-
is with Faroll & Company,
Exchanges.
approach.
of reaching
means
Ex¬
changes.
"negative."
policy of accepting
and
ways
procedures and pleading for
their very
*
'
■
Usually it is
previ¬
He was
occasion of accepting both goals and general
.a/
or upon
statism with
Exchanges.
ously with Goodbody & Co.
be judged by
Dewey and what has become known
Dewey wing of the party.
them,
associated
position of the Republican Advance is itself
one.
F.
William
—
become
bers of the New York and Midwest
Negative?
they have confided to the public, essentially that of
Governor
111.
has
Freehling, Meyerhoff & Co.,
120 South La Salle Street, mem¬
Cruttenden Co. Adds
very
characterizes it,
,
O'Brien
eighteenth century mer¬
are
The Financial Chronicle)
with
to it.
licans
to
CHICAGO,
lack of
but given the best of management and
consistent
most
say,
to accuse
seem
To be sure, there is gross
business-like management
sure,
they
for the Fair Deal
use
they have nothing vital to offer in the place of
now
danger of
The fact of the matter is that
disastrously to his party. This type of opposi¬
position
or
Freehling, MeyerhofJ
jjpecia]
Dewey did his best to employ effectively in two campaigns
27
$26,884,886.24 in the above state*
pledged to secure United States Government deposits of $20,400,565.22
and trust deposits and for other purposes required by law.
and other public
Member Federal Deposit Insurance Corporation
T8
(68)
The Commercial and Financial Chronicle
Savings Damlk Deposits Increased $1 Dilfion in
Continued
from first page
..
Thursday, July 6, 1950
.
inflationary
methods
which these
pressures
entail,
Labor
tries
to
"muddle"
Rate of increase in May 1950
Devaluation Boomerangs
14% greater
was
government's budget and—by the much longer against a fresh cramp
opposite: by raising the family al¬ of "dollar shortage." Her collec¬
locations
(subsidies per child). tive wage contracts are loaded
tkan gain in May of last year.
investment
bank
during May, as Where this hodgepodge of contra¬
rise of $103,000,000 dictory policies will lead is any¬
United States continued to mount, in their mortgage portfolios. Funds one's guess. Growing demands for
ficcording to A. Livingston Kelley, for this purpose were obtained further increased wages show the
President of the National Asso¬ from the $67,000,000 monthly de¬ direction.
ciation of Mutual Savings Banks posit increase, together with $31,Scarcely any country in the
from
cash
holdings, world is as dependent percentage¬
mid President, Provident Institu¬ 000,000
tion for Savings, Providence, R. I. $4,000,000 from holdings of U. S. wise on foreign food and raw ma¬
The gain of $67,000,000 in total de¬
governments and $1,000,000 from terials as is Norway. Her domes¬
tic equilibrium
posits,
to reach
$19,807,000,000,
as
well as her
corporate and municipal securities
was 14% greater than the gain of
international position are vulner¬
holdings.
The concentration of able
$58,000,000 in May, 1949. Deposits
accordingly, especially so in
tiave risen $1,004,000,000 over the the banks upon expanding their view of her socialistic make-up:
During
tttutual
last' 12
the evidenced by
of
banks
months,
the
in
deposits
May,
savings
5.3%.
or
current
gain for the month
reflects the fact that,
deposit
activity
remains
May
while
the
with
are
the
9%
up
whereas withdrawals
€%.
in
are
1949,
only
up
During this period five-sixths
of the growth in regular deposits
represented new savings,
posed to dividend, credits.
op¬
as
May 31, 1949,
loans
$1,098,000,000,
or
than the increase
more
taxes
are
the world's most
imports are com¬
among
"progressive,"
pressed to a bare minimum, with
subsidies holding down food prices
to prewar levels.
Thanks to de¬
valuation,
the
nation's
huge
Mortgage lending continued to
t>c the
chief source of savings
their
deposits
the
over
12-
Securities Salesman9s Corner
before labor costs have
rise.
be¬
Already, all Western
currencies turned
parison with
the
"hard" in
soft
com¬
A great strain on
out
salesman,
crop
up
and
the
that only
lawyer.
lawyer
a
can
handle.
With estate taxes what they are today, it is very proper
that securities men and lawyers work together in helping clients
«olve these problems.
is
happening
recent
a
daily
all
of
one
case;
the
over
just
many
country,
like
where
that
it
alert
are
securities
salesmen
are working closely with certain law
firms, and to the
advantage of both: This salesman called upon a man who had
never
bought securities before in his whole lifetime. It came
out during the conversation that this man had a
grandson that
was very much the apple of his eye.
The proposal was made that
he set
up
of $25,000 for the grandson. This money was
investment fund. A legal trusteeship was established
fund
a
placed in
an
with the grandfather as trustee for the grandson.
an
attorney
were
needed.
As
result
the law firm.
a
©f and. both
salesman
weeks
the
later
In
a
and
lawyer
this
the
case
lawyer added
question
a
was
attorney
There
have
are
business,
assets
mutual
both
help
mentioned
or
exist.
shares),
securities
each
other,
and
If
their
of
in
the
they
assets
tied
to
protect
of
their
of your
some
tell
could
and
into
be
you
services
your
their
the
Then there
on
their
They
can
You
of
some
appraisals,
on
demise,
source
lime
to
this
is
to
to
make
you
securities.
get
your
of
proper
field and it
very
of
is
much
as
If you
much business
estate
procedure
work.
on
the
you
in
check-ups,
desirable
that
our
counterpart
of
J.
M.
Harold Laski rolled
cease
with the end of the Marshall
Myrdal,
and
inflation at home and
deterioration of the krona abroad.
latest step in the collectivist
direction consists in breaking the
A
independence of the Central Bank
(Ryksbank) which is being put
under purely political
(socialist)
also
their
only
business.
to
them
way
It
from
in
are
as
a
a
that
is
some
do
can
law
firms
qualified expert
right.
There
you
selected
find
own
give
on
for
long-term
ning. But Stalin makes the
plan¬
masses
for their alleged future wealth
by keeping their present consump¬
pay
tion at the subsistence level.
The
occidental idea is to raise by leaps
and bounds the current standards
living and simultaneously to
keep building economic pyramids.
The consequence is that violently
progressive taxation and/or infla¬
tion, combined with a repressive
bureaucratism to hold together
the artificial structure, stifle in¬
centives, distort the price mech¬
anism, demoralize the capitalistic
unbalance
and
national
the inter¬
accounts.
"classic"
A
example
of
such
self-bankrupting welfarism is that
of
Sweden.
trality"
Enriched
in
two
"neu¬
by
world
conflicts,
she emerged from the last in
enviable
financial
position.
much
value the krona upward
By last
an
So
that she proceded to
so
became
acute.
managed at
re¬
(by 10%).
her dollar short¬
summer
However, she
least to
balance
her
domestic budget throughout these
financing the wholesale
capital expansion out of tax rev¬
years,
With
enues.
picture
the
the
devaluation, the
reversed
suddenly:
shortage vanished but
was
dollar
depreciation
experi¬
striking illustration
a
trade
than
lawyers
are
Again, it is
business
in
a
this
attention to the
the
to
extent
recovering
the
supplemented by
domestic
products.
At
the
subsidies
"vital"
of
growers
same
time,
the
dollar
problem raises again its
ugly head, in spite of the reduc¬
tion of dollar
est
imports to the bar¬
necessities.
more
and
non-recurrent items
Withheld
—
demand
previously
for
British
goods, temporary cessation of the
flight out of the pound, etc.—plus
two
additional
factors:
drastic
a
reduction of dollar imports by vir¬
tual
embargoes; and
dented
rate
of
unprece¬
an
increase
in
dollar
exports at rising prices of Sterling
Area
raw
materials, such
rubber, metals, wool, etc.
After six
crude
as
back and forth between
unbalanced
counts
and
the
the devil
international
deep
blue
ac¬
sea
unbalanced domestic budgets.
foe sure,
Sweden's
technique
of
To
of
shifting the higher cost of food
and
raw
payers
materials
can
thereby encouraging him.
only to live by deficit indefi¬
nitely, but also to do her. best to
impede Europe's financial recov¬
Multilaterialism
ery.
are
as
"key
Nor
country"
onto
scarcely
the
protect
tax¬
her
out of the
long
the
them.
as
obstructs
do
our own recent proposals
anything truly constructive.
offer
"The proposed
quoting Philip
great extent
principles
which
tries
Clearing Union,'*
Cortney, "is to a
denial of the very
multilateral trade
a
of
made
accounts
the
balancing of the
the
of
European
coun¬
Without
Great
possible.
Britain the
be
resto¬
and
ration of normalcy
Clearing Union would
ineffective.
with
the
so
would
If
Union
Great
it
will
Britain
be
only
many reservations that it
still be ineffective.
To a
Clearing Union
inflationary, and it will post¬
the day when European cur¬
is
pone
rencies
become
may
against the
the
convertible
dollar.
Meanwhile
discrimination
against United
will have to be re¬
April took
In
the
for the
turn
a
first
five
worse.
months
of
this
the dollar deficit in "visible"
year
trade
same
was
than
greater
period of last year.
in
the
(So does
Holland's deficit, too, and for an¬
alogous reasons.) The reason is
that domestic prices begin to catch
with the- rise of import costs
up
due
to
the devaluation, although
have not risen appreciably
as yet.
But they cannot be held
back much longer.
Characteris¬
tically,
the
greatest
pressure
wages
emantes
the
from
nationalized
industries:
coal, railroads, elec¬
docks,
the
workers
of
tricity,
which
apparently
dissatisfied. The
are
iHe
most
Labor
regime is
searching frantically for a "new
wage
policy": one that would
satisfy its own following without
upsetting
the
ization."
The solution is
precarious
"stabil¬
—
new
elections.
the
and
For that purpose, some
most unpopular controls
the
lower
voters
costs
of
are
relaxed
living
after
wins, small business will be
the
next
in strait jackets.
Britain's financial
and
means
enough,
over-
over-employ¬
of which
competitive ability.
all
not
on
the
ing
one
reduces
As
if
her
that
a
hand and for maximiz¬
exports
on
the
other.
The
capacity to earn dollars is further
curtailed by an annual near-bil¬
lion
dollar
fail
to
volume
the
is
accomplish the
Faced with the
latest
purpose-
Bretton
just
—
as
loan,
the
set-up,
Benelux
Woods
and the Marshall Plan itself
came
to
naught. They all end in fiasco
because they try to put the cart
before
the
horse:
Dollars
before
Confidence.
Europe's Dollar-Bloc?
That the Swiss franc is
if not better than,
as,
is
good
as
the dollar
news.
Nor it it surprising
free-economy-minded
Bel¬
gium has lifted all foreign ex¬
no
that
change restrictions, excepting the
flexible control of major capital
exports. What is surprising is the
news
that France and Italy not
only are willing to enter an intraEuropean clearing, and to do so
without
hedges
the
the
kind
of
British
defeatist
demand,
but
discussing the return to con¬
vertibility. That would presage a
Dollar-Bloc in Europe — succeed¬
ing the famous Gold Bloc of the
1930's, except that Holland would
be out and Italy in.
It is too good
to be true; but it goes to show
the imaginary nature of the ail¬
are
called
ment
dollar
shortage.
tends to vanish with the
bureaucratic
tains.
and
It
lifting of
socialist
cur¬
Especially, the French bal¬
payments has improved
of
ance
almost
exactly in proportion to the
decline
—
of
dollar-aid
our
to
France.
Think
of
it:
the
and the Italian lira
—hard at any rate
to
the
not
not
or
the
in comparison
a
10-15%
them!
at
France
discount
and
Italy
enterprise countries,
free
even
gium.
parties
say,
franc
hard monies
sterling which is actually
selling
are
French
as
the
to
Their
extent
as
Bel¬
ruling
are more
"Christian'*
collectivist than,
the German Social Democrats
the
British
1920's.
erate
their
Laborites
But
the
were
Latins
"directed
in
mod¬
economies"
by a dose of common sense; their
public and officials unscrupulous-'
ly violate foolish regulations. Both
France
and
Italy
are
of
"unrequit¬
ed"
exports to release
blocked
sterlings and to build new capital
nest-eggs abroad.
Union
Even if realized, it will
all-round convertibility
the
Anglo-American
against
course
over-investment,
consumption
ment,
Clearing
panacea.
promised
are
election: by way of squeezing re¬
tail margins.
In effect, if Labor
continuous
goods
months' improvement
in the United Kingdom's own bal¬
ance
of trade, that
balance by
self-defeating
That is typical of the
way Eu¬ international trade policy is pur¬
rope's managed economies stagger sued, one that strives for
autarchy
of
not
not
States
defi¬
imported food, cotton, leather, cof¬
fee, fuels and tobacco. They are
will
inforced."
stantially enhanced budget
on
aid
deficit,
those months.) Even so, much of
the "improvement"
was
due to
(gasoline, restaurants)
be
of
gold
of
cit thanks to boosted subsidies
has
certain extent the
of
com¬
sub¬
he
Europeans
may, we will take
Bull's international
John
ling improved the British balance
red, if only moderately. The
ing fiscal year promises a
to
what
of
joins
the 1949-50 budget went into the
to
Come
care
nearing its end. The
export premium provided by the
30% discount on the pound ster¬
of
process
financial
question in Europe
management.
Britain's
collaboration,
assurances to the
Plan.
into one, will be faced with botn:
accelerated
were
properly
will
Offer
several of these
or
business
The
pay you well if you
a
also tell
may
natural
a
one
and establish yourself
legal profession.
find
may
substantial business.
some
prospecting and work.
can
their
of
proposal.
over-the-counter
direct
good prospects for securities
ease
you
a
They
that handles
business.
calls
Sometimes
that they
so
Try and give business to.lawyers, who
help
in your community,
on
too,
Try and get close to
be possible for you to
time.
setting
(or mutual funds
then route
can
This,
law firm
be the
of
lawyer friends who specialize in this
may
position
lines
interests, and those
untimely
office.
the
market information.
firms.
business
where frozen
cases
the
how to go about it.
source
is
the
in frozen equities in
up
approached along
are
you of some good prospects.
possible
good
other similar type of liquid property,
event
can
and
of
investments
age
they
enough
will talk to
«s
been
way.
Very attentive and interested prospect in such
work
few
had
salesman
farmers in land, or other similar
or any
have
heirs
A
as on
proportion to the nation's
genuine savings. This is the So¬
viet pattern, of course, of forced
fund for the grandson,
lip a separate corporation which holds securities
will
what
care
where you will find that business executives
cases
deal
the
to
perfectly ethical
a
great
a
where
case
gave
resulted in
a
taken
of his friends also set up a similar fund for his children.
one
Here
was
suggested
account.
new
a
done by this salesman in setting up this
and
The services of
salesman
good piece of business
in
economic
given
ceived under the Marshall Plan of
Norway,
between
and
in
Paris
and
London.
Under the pretext of the Atlantic
Pact's Article II, which
implies
of
the
economy
of the previous 18
(More precisely, she was
retaining the instalments she re¬
France and Britain, is created by
the policy of public works totally
aid.
promised
the
of
expense
managed
Gunnar
Swedish
Keynes
the
American
more *
on
lately
months.
about the legal profession in your community?
Have
been obtaining the cooperation they can give you in your
constant pursuit of new business? 'There is a natural tie-up
How
Here
at
the
Professor
Norwegian dollar losses
Over-Investment
you
1
other,
relies
be¬
of R. C.
By JOHN DUTTQN
estate problems
problem
London's
for
the
preparation
pending crisis of the sterling: it
Which is what Acheson
effective, if it has not al¬
ready.
Instead 'of solving one
an¬
money.
Time and again
price-wage
ation and regimentation. But one
solid
idea
emerges
clearly
in
the
come
have risen by 75%
if the Nor¬
wegians had not decided that this
even
dealer
living clauses;
spiral soon will
ment offers
gun to
securities
of
cost
nual bill for food subsidies would
mated for the current year at
1,200
million
kroners
($170
million)
the
with
Leffingwell's dictum that
"Currency devaluation is a symp¬
month period.
would bankrupt their government, tom of a
disease; it is not a cure."
preferring to let prices rise. But But it also is an anesthetic, as we
With Minneapolis Assoc.
then, sooner or later, her con¬ pointed out at one time; by dull¬
trolled wages—which are 40
(Special to The Financial Chronicle)
to ing the pains and camouflaging
50% above prewar, as against a the nature of the disease, it fools
MINNEAPOLIS, Minn.—D. V.
4% rise in the cost of living—must the patient—for a while.
Rice has been added to the staff
jump which will turn adversely
In Britain, too, the fool's para¬
of
Minneapolis Associates,
Inc., the terms of international trade.
dise created by the September, de¬
As it is, the trade deficit is esti¬
Rand Tower.
valuation is
in
compared
as
period
same
since
increased
somewhat
first five months of 1950,
deposits
that
holdings of mortgage
have
than have withdrawals.
more
For the
housing needs is shown by
fact
their
thgher than last year, amounts
deposited in regular accounts have
irisen
a
mortgage portfolio to help finance
The deposit
of
through by incentivekilling and rigidity-creating tax¬
greatly
helped by this years record tour¬
ist
traffic;
tacular
France
recovery
by
the
of her
spec¬
agricul-
Volume 172
ture
Number 4922
which turned into
.
The Commercial and Financial Chronicle
.
leading
a
export industry; both France and
Italy gain by the abolition of the
features
worst
trol
of
exchange
con¬
and, above
cline
of
all, by—the de¬
dollar and of gold.
the
That raises
vestment
Question
black
And
Germany's recovery is
hope of salvaging
the
balances
trade
about
gold
on
down?
go
Gold
30%
price
of
of
the
ana
the
dollar
has lost in
Paris
its high ground
of
last
strains
tions
are
unless
safe
a
outside
is
answer
less
the
that
two
independent streams
—franc appreciation and gold de¬
preciation—coincide and reinforce
another.
one
followed
Paris
The
with
market
the world¬
wide fall of the gold price; once
it hit home, it redounded to the
lag
a
benefit of the franc.
The French¬
stopped running out of their
men
and began to dis¬
piecemeal only, their
owi}~ currency
burse,
if
multi-billion
dollars of hoards in
yellow metal and "hard" monies.
Hoarding
the
discouraged also
is
almost
total
fears.
war
who take
disappearance of
But
a
by
French
experts
dim view of the whole
devalua¬
bet—unless
more
forthcoming—or
thorough reform of Euro¬
monopolism
is
instituted.
who
would dare to lay hand
frozen price and wage
those
on
price-
a
structures?
(340 to the dollar).
or
in
Even
the
Switzerland,
"free"
is
system
arti¬
of
the
unions
trade
freezing
policies
of
and
the
of
authori¬
the
ties.
"Stabilization" means, so far as
is
Europe
the
of
framework
all-round
an
monopolistic system.
bolster
to
concerned,
The futility
of the Marshall Plan is due to the
that
that
rigid system, it helps to fi¬
Banque
de
tion.
It
has
over
200
the
France
the
an
gold
by
year
volume
The
that
comment,
merely
last
francs, aproach-
fantastic
trillion francs!
circula¬
note
grown
billion
the
of
1.4
of
semi-official
this
represents
advance discounting of
influx allegedly under
into the central bank's cof¬
camouflage
the
way
fers, -cannot
mounting national deficit financed
by the printing press (while pri¬
vate'business in France
in
well
as
as
Italy is strangulated by
strict
credit restrictions and record high
Add
the
American
the
boom
prices
in
and
relaxation
part
also
controls.
of
(That is how controls backfire: by
upsetting the markets when they
end,
they
as
have
to
sooner
The consequences
later.)
may
tangible.
Already,
troubles are smoldering in
soon
3n France,
in
or
strikes
are
prospect
industry,
major
in
with
or
be
labor
Italy.
in progress
every
single
raise
wage
of
softening
maintenance.
its
nance
up
Some
in the right direction has
largely on Belgian and
progress
been made,
has
friends
trenched
pean
in
become
the
full
sensitive
en¬
minds.
Germany's
central bank has
remarkable job in making
a
the
monetary
stick.
It
reform
of
1948
managed to avoid the
psychological
from
pitfalls
the nation's
stemming
inflation expe¬
are
prospering,
are
but farmers' income is below that
of
last
This is the general
year.
tenor of reports made to the Federal
by
Reserve
field
its
of
New
York
representatives,
have visited
during
Bank
more
the
also
holding
three
earnings
appear
District
of
voicing
are
concern
ings
and
the
rates
-
"structural"
(non-cyclical)
na¬
a£d San Francisco
changes,
With A. C.
_
j
(Special to The Financial Chronicle)
FRANCISCO
SAN
Robert d
ford
&
Building. He was formerly
Yhe
First
Nationaf
Bank'of
St. Moline.
California
519
)
Fif&
C. Allyn and Company, Inc.,
Avenue
Calif.
Cassell is with Hanna- with
Ta]bot
Allyn & Co.
MOLINE, ILL.—John R. Pear¬
son has become associated with ft.
„
_
^
Stock Ex-*
(Special to The Financial Chronicle)
With Hannaford & Talbot
good
future.
'
goods
the
are generally explained on
grounds that many people
;
-
of NEW YORK
They
point also to the
farmers, partic¬
of dairy men and poultry
ularly
vertibility.
AND TRUST COMPANY
'
lower incomes of
Main Office, 37 Broad Street
M)
farmer^ This
...
from
has
16
page
led
of
Mutual Funds
*
situation, it is said,
of
tightening
some
and to
credit
tion
to
more
Over-all,
however,
months
to
May
share and 38 cents per and summer resort areas and by
share, respectively, based on the the boom in the home construction
number of shares outstanding at industry, particularly in the New
the end of each six-month period. York metropolitan area and the
cents
May 31, of this year, was $7,681,which
than
$1,037,122
was
greater
the
pronounced
character
those
in
cyclical
volatile
and
the
common
stocks
of
es¬
growth
long-term
trends."
As of
cash
May 31, 1950, the reserve
and
high-grade
bonds
stood at 15.47%
as
suburbs
cities.
of
other
Mortgage
sumer
large industrial
loans
and
')
June 30, 1950
%
*
*
*»
'•v;-
RESOURCES
and
the
6.82%
demand
for
Form
There has been
ceptible
ment
nance
a
slow but per¬
liberalization
of
instal¬
credit
terms, led by the fi¬
companies and dealers. On
auto loans a one-third down
ment
is
still
terms
up
increasingly
generally
to
36
common.
pay¬
required,
months
Guardian
Fund
Fund,
Inc.
has been formed by
In the dur¬
stock.
of
$1
Assets
par
as
value
common
of June 1st
were
...........
Loans and Discounts
F. H. A. Insured
156,453,757.35.,
17,796,843.99-
Municipal Securities
Other Securities
$119,740,705.65
.........
Mortgages
Customers' Liability for Acceptances.
.
.
Stock of the Federal Reserve Bank
.
6,843,393.24 '
198,541,283.51,'.'
1,933,640.36 '
1,333,681.25
.
.
720,000.00'*
2,267,618.42 '•
Banking Houses
795,829.44
Accrued Interest Receivable
Other Assets
351,086.41,
.
able
goods field, some of the rpore
lenders are financing
sales
with a down
payment of
$506,777,839.62.,;
•
aggressive
only
down
10%,
or
even
payment.
During the first four months of
this year,
in savings
the growth of deposits
banks continued at a
commercial
what
more
LIABILITIES
without any
Delinquencies
Neuberger &
Berman, members of the
New more rapid rate than was the case
York Stock Exchange.
It is au¬ with savings deposits in commer¬
banks.
In
thorized to issue a total of 500,000 cial
May, however,
shares
State and
......
are
comoared with
Mutual
.......
U. S. Government Securities
credit remains active.
on
Guardian
Cash amid Die from Banks
con¬
credit loans have paced the
advance
invest¬ but
increasing
and
companies with clearly
tablished
of
Y
per
Market value of investments on
887,
%
.
CONDITION
OF
loans
bank
31,
1950, continue to increase. This increase
amounted
to
$179,575 compared has been accentuated during the
with $140,877 in the six months past two months by the seasonal
ended May 31, 1949, equal to 46 loan increases in the agricultural
six
STATEMENT
CONDENSED
selec¬
careful
risks.
banks made
a
some¬
Capital
.
,rt
.$10,587,500.0(1
.
13,412,500.00
Surplus
24,000,000.00
Undivided Profits
Dividend
....
7,964,967.08
$31,964,967.08;
302,500.60''-
Payable July 3,1950
1,425,922.60'
Unearned Discount
Reserved for Interest,Taxes, Contingencies
5,712,320.50
$5,286,288.52
■%
3,879,567.52
1,406,721.00 1
•
Acceptances.
......
Less: Own in Portfolio
.
489,858.76/
Other Liabilities
Deposits
*.
..
...
.
....
•
..
465,475,549.68
,
■
$506,777, 889.62
United States
are
pledged to
Government Securities carried at $15,476,262.01
secure
purposes as
public and trust deposits, and for other ^
required or permitted by law.
l/v
MEMBER:
N. Y. CLEARING HOUSE ASSOCIATION
■
•
'
•
FEDERAL RESERVE SYSTEM
FEDERAL
DEPOSIT INSURANCE CORPORATION
favorable showing. In¬
Federation. $150,000. Sales load will be 2%. terest rates on savings bank de-.
But aUong last, Germany is being This is one of the few funds which posits continue to be a matter of
concern to the commercial banks.
opened up to private capital in¬ are operated by brokerage houses.
spacfe of the Western
_
..
The rather spotty situation in retail trade and the decline in soft
the quality.
adjustment:
spontaneous return to dollar-con¬
discount
ture, ^brought about by the dump¬
ing of nearly 10 million penniless
eastern Germans into the narrow
will be spent on new
sums
Street, members of the New Yorlt
farmers are being squeezed be-
as
of last
rate, the
foolish theory that
coiv-
Sutro Co. Adds
the District, farm incohie is reported to be substantially lower,
devaluation
facilities, on
credit ex¬
pansion is the way to combat a
rampant unemployment—one of a
JongTterm
the
residential
(Special to The Financial Chronicle)
but even here some improvement
has been shown in recent weeks.
In the dairy farming sections of
and
repossessions, however, are
still reported to be nominal.
May 31, 1949.
During the past six months the
Total commercial bank deposits
September.
At the new
company, which stresses growth in the
Second District declined
deutshhe mark stands up far bet¬
and appreciation, added a number
early in the spring, but this de¬
ter than the sterling does at its
of
comoaratively lesser
known cline occurred almost
entirely in
new par in spite of the similarity
companies with highly favorable New York
City. Outside of New
of barbed wire "protecting" both.
growth characteristics to its in¬ York
City most banks reported
Well, Germany has Europe's low¬ vestment portfolio.
gains in demand deposits, with
est tariffs (lower than Belgium's!)
time deposits showing only small
Investors Mutual Reports
and
enjoys a relative degree of
way
or the
other.
Net assets of Investors Mutual, changes one
economic freedom which permits
Even those country banks whose
more rapid
recovery than almost Inc., as of June 26,
1950, were
demand
deposits
usually
turn
$200,908,717 with shares currently
anywhere else.
down
seasonally in the
spring
Yet, the mark's prospects are owned by more than 85,000 share¬
have reported that the seasonal
not
too happy
either.
German holders. investors Diversified Ser¬
downswing has been less marked
labor, encouraged by the British, vices, Minneapolis, is the princi¬
this year.
In recent weeks, de¬
strives for managerial powers in pal underwriter and manager.
posits in all sections are reported
the plants. And we have virtually
to be increasing.
Neuberger & Herman
forced her central bank to grant
rience, its acute economic suffer¬
equipment dealer*.
to
SAN
FRANCISCO, Calif. —
future
orders are
occasionally
John S. Ehrlich is now affiliated
heard. Weak spots still exist, parwith Sutro & Co., 407 Montgomery
ticularly in the soft goods lines,
f
,,
_T
.
*s over-extended.
.^frner
a
tht»
schools, hospitals, and roads.
the District. Most manufacturing establishments outside New
York City are working full time,
and reports of large backlogs of
bank
a
about the
is
in
out
feeling that the average
a
tial
Business conditions are reported
to be generally favorable through-
Despite these signs of prosperity, however, bankers throughout
There is
addition
condition
inventory
struction, which continues at higk
levels, a number of large inditstrial and civic projects are also
under way in various parts of tht*
District. Reports indicate that, in
the next few years, very substaiv-
the savings institutions.
who
last year.
deal
In
many
been actively advertising
this rate. Competing commercial
banks, paying materially lower
rates, have experienced some loss
of deposits because of transfers to
equal to, or better than, those of
the
and
now
banks
well and
to be at
up
2%
have
Bank loans and deposits are
year.
of
this
of
hands of farm
savings banks generally pay
dividends
months,
than 600
past
The
of
up
,
self
Europe's
ments
done
Sec-
(!)
bal¬
Euro¬
banks
and
the
District
reflection
often than not,
prices at which the se¬
curities were purchased.
ance.
The
paper-house of ex¬
The
management, during the
change stabilization is likely to
past six months, the report states,
crumble again. But no one seems
"has pursued the policy of reduc¬
to worry too much. The certainty
ing. on balance, common
stock
that Uncle Sam has to bail out his
holdings in companies having a
demands of 25 to 30% in the
good
Reserve
average
backing
have committed so large a portion
initiative.
But more
of their incomes to monthly pay-'
it is offset bv new
ments on mortgages and instal¬
tricks
of
neo-protectionism:
in
ment loans for the purchase of
France, e.g., reducing import
durable goods that they have little
quotas and licenses is followed
left over for new clothing. Bank¬
pronto by raising tariffs. Britain's
ers say
that, while loan demand
national
socialism
remains
one
is active, it has deteriorated in
decisive obstacle in the way of
Italian
are
the Continent,
inflations, the
on
domestic
to
io
that
fact
moving upward
due
instead
Continued
interest rates).
Federal
schedules earlier in the
fact
rise
Business conditions in
ond
Bankers say that extra shifts and
supported,
with
floors overtime work are
again appearthings like milk, meat and
ing in a few industries and that
(of all things)
machines.
The
improvement has been shown in
procession is led by Britain, of
the clothing and other soft-goods
course:
there, some 1,100 trade
lines
which
were
working
on
associations are engaged in allo¬
shortened
cating raw materials and directly
or
indirectly fixing prices, to say
nothing of the monopoly position
prices and eoivprices for the thing*
they buy.
Competent
farmers,
however, are said still to have a
margin of profit, although this ha*
been considerably reduced.
One
is over-extended.
under
the
unrelenting
concerned for future, feeling
are
wage-earner
ficially
situation point out, for one thing,
ing
ity, banks of district
growing
New
is
aid
cial
more
Den¬
European
structures.
wage
But
the
by
the
on
pean
The
Holland,
futility of devaluations is
fall, and the franc is quoted
now on the open
market, for the
first time in a decade, at the offi¬
par
of
70
tinued high
fin its July "Monthly Review of Credit and Business Condi¬
tions/' Federal Reserve Bank finds, despite signs of prosper¬
the
(89)
tween lower milk
Bankers Express Concern
now
last
documented
market
the French franc go up, or did
premium
fresh
a
mark and Sweden.
A Neat
the
abroad;
shot of commercial capital may be
her salvation—for the time being.
The
Did
from
I
Av
'M
-
.-'"J
25 Offices Located
Throughout Greater New York
30
(90)
The Commercial arid Financial Chronicle
Public
"Back
Market Record
of the
Utilities
shut
in
1949
compared
with
only
11%
for
"Today,
Communist-dominated
the
war
in
1950
new
by
have
doubtless
made
of
a
the
Federal
raised from 38% to 41%.
ings available for
now
ing the truth about other
corporate
now
income
awaiting action
tax
is
rate
to
be
stocks by about 4 to
5%, it is estimated.
a
to
speeding
They
*
the
course
missions for rate increases.
in
the
meantime earnings
possibly
dividends)
some
1950
far
are
the
as
present
concerned
outlook
the utilities
for
all.
might
suffer.
So
continue to
*
Our program
for
These
figures do
earnings for the
not
average
indicate
share
utility,'since they must be adjusted
shares
common
which
have
been
resulting
from
in
numerous
stock
new-money
the
past
offerings,
of
a
year
utilities
On
ago.
were
price-earnings ratios
June
an
a
group
selling at 11.6 times
average yield of 5.9%.
small
27
in
I
utilities
were
On
10.1
A year
representative
large group of
a
times
earnings
and
our
i
cated
selling at 12 times earnings, to yield
6.3%; and the smallest com¬
panies at 9.9 times earnings, to yield 7.6%.
Based on the change in
yields, the big company stocks gained about
7%, and the small
companies 12%. Based on the
changes in
however, the gains
dicates that,
price-earnings ratios,
were
following the
still somewhat higher
dividends.
only 4%
This
quarters both here and
2% respectively.
recent market
than
reflects
and
a
the
year
ago
increased
This in¬
decline, utility prices
may
from
now
investment
be augmented
by investments of legal trust
funds, which after July 1
Last year the electric
are
per¬
in non-legal, listed
securities.
utilities
were
able
to
stantial
million
fuel
on
expense.
Thus they did not feel
any bad
effects from the decline of
3.2% in industrial
sa^es. This year fuel
savings will be smaller,
reflecting principally' gah}s in
efficiency
from installation of new
generators and transmission lines.
How¬
ever, there may also be
—coal
prices
are
wages granted
f
showing
to John
slight gains cjtie to lower fuel
prices
an easier trend in
Lewis'
hydro-electric properties is
ir
c
some
itput
was
the
largest
union.
year).
In
1C
3%
the month of
over
same,
while
b'
showing and the
ter
industrial
and
expenses
about the
while fuel
revenues
were
vs.
also about the
made
a
4.9% for the year
maintain
rate
of gain for net
income
they did last year.
Since the dividend payout
remains fairly
steady around 70%, this
mean
that occasional increases
(such as the recent jump
from $1 to $1.20
by General Public
Utilities) may appear in the
news.
Thus the anticipated
increase in earnings and dividends
may in the end out-weigh
(as a market
factor) the fears of im¬
pending higher taxes
as
and wartime
restrictions.
makers
of
automobiles
increasing
were
were
numbers.
3,200
In
motor
registered.
7.5
biles,
trucks
1900
vehicles
years
later
million
automo-
and
buses.
Twenty
after that, in 1940, the total
years
million, and last
registration
of
44.1
reacned
motor
million.
Wants
We
year
vehicles
Good
roads
;
the
Public
Roads
Ad-
ministration, in the Department
of
Commerce, which administers
the
Federal
states
for
in
grants
highway
aid
to
the
development,
does not have to create
a
"Healthy" Competition
demand
the
benefits
competition
transportation as well
It
is
our
that
brings,
.
areas.
in
in other
as
policy
that
no
class
of competi¬
special priv¬
ileges or undue advantages.
In
this
respect competition
among
the
Competitive
or
should
various
tion
have
forms
presents
of
ity
of
treatment
surface-transport system.
of
The
ing
transporta-
perplexing
actions, cer¬
some
problems; Hederal
tainly, do result in
problems of maintaining
inequal¬
some
of
the
various
transportation.
great
difficulty
Federal
funds
•
with
giv¬
is
knowing
stop. Aid that is freely
Advantages of Private Ownership
given, because it is necessary for
an^ Operation
adequate development toward inj
WOuld
nrivate
^ith
like
to
emphasize
ownershiD
and
the
oDeration
-
traffic
the
Mississippi
Systems
the
on
ancj Warrior River
Federal Government has not been
ancj js not
jic
Sr
by
payment
But the
rgjjgs
for highways and highway traffic
—it cannot keep up with demand,
make.
Federal
moted
help
businesslike test of the
a
of
facilities,
government-probut would also
to repay what the
railroads
have alrea?y rePai?> na™e'y- the
investment in new
government's
construe-
The
Government
the initiative and
energy
course,
>
much easier
to
estate a broad general principle-
qj
Its most generous estimates of future
traffic
volume
are
on
be
industries. They would, in addi-.
tion> tend to Place aU forms of
regulates transport on a more equitable
public inter- competitive basis,
of
Gov^nment
transportation in the
ggt.
faril-
studies
the
development of a system of adequate user
charges. Such charges would not
usefulness
furnishing
that
concerning
only be
operating subsidies
Federa 1
recommended
made
interested in pub-
thrnneh
^on and
comes an unnecessary crutch, the
use °f which develops unhealthy
and
n0w
ownership
mntP(!
dependence, must not be proi°n&e(i to the point where it be-*
like
iniand
Waterways
tjon> which accounts for about 5%
b'arge
to
dependence.
CorporaIn my Transportation Report I
few exceptions
very
the
0f
important
Today,
government agencies
with
transportation
know
healthy
naive
as
operation of
and, at first shins
railroads
trucks
or
airunder
state
auspices - and
later
piane's
with
Federal
help
the
nation
xhe ' Federal Government
propaved itself out of the mud.
became
the
problems.
pre¬
once
when
not
Twenty
were
of
among
by Hadley's forecast,
point that one of the advantages
Our citizens bought their
products jn
our
transportation system is
in
there
competition in trans¬
concerned
sound
a
by
not
only within each
transportation, not only
among the various forms, but also
form
the
discouraged
private enterprise to move our
people
and
the
products
they
promoted
another
transportation—air.
motion
of
airmail,
form
The
pro-
passenger
and
air cargo service
brought results.
Between 1938 and 1949 the
oper-
ation
of
changed
lion
to
scheduled
as
6.57
miles; from
lion
2.7
trunk
lines
follows: from 480 milpassenger
7.4 million to 40.9 mil—
ton-miles
million
billion
to
of
mail;
128.6
and from
million ton-
miles of cargo.
This
rapid
transport has
expansion
affected
ings of other types of
contract
carrier
and
of
the
air
earn-
common and
has
intensi-
the
most
efficient
expensive transportation system in the world.
However,
As
a
we
people,
with what
This
not
are
we
we
satisfied.
not
are
have
believe there is
ment.
content
so
room
applies
long as we
improvenot only to
for
^be way our business
operates but
ajso to the way our government
operstes.
Steps hcive been teken
to achieve greater coordination of
the activities of
government agencjes
presently
concerned
with
transportation
The most recent
big step was the approval by Congress
application.
This pattern of government
During the 20s, and especially United States
during the 30s, the Federal Gov- and the least
ernment
of
4
fkan to work out the details o£>
Unless carefully developed and applied, the worthy
always
encouragement of private industry principle
of user charges may
bas achieved for all
people in the have results worse than the ab-.
gained
are
will
'«?•
last
running higher—along with other
and fixed charges—the
utilities are still able to
same
a
Henry Ford and the other early
low.
revenues
miscellaneous divisions
overall gain was
7.7%
costs
over
rate of gain as in the calen¬
1949.
Thus
April hydro
that month (up 1.7%
same
Gains in commercial
the
Mso, the supply of water
March, electric residential
last year—about the
der year 1949.
spite of the increased
showing/up favorably:
on record for
is
national
with
solved
master blueprint:
see
how it is
one
do
We do have
forms
fied
connected
possible to blueprint competition.
tors,
impor¬
thing of the past."
reached 30.6
make very sub¬
earnings gains because of big fuel
savings.
For the cal¬
endar year they produced
more
electricity than in 1948, yet saved
$68
tance
of
there
demand
abroad, and this
mitted to invest up to
35%
are
in terms of earnings and
matter
a
I
competitor,
ways, and he predicted in
1900
that a continental
highway system
"as
up
Frankly,
Transportation—A Federal Aim
very
those
as
drawing
an
were
automati¬
transportation—can be
-J—
Balanced Growth of
showed
earlier, high-grade stocks
result
lived
long enough to
that, where many people
involved, very few problems
—especially problems as compli¬
Continued jrom page 8
large
earnings, and showed
the other hand
selling at
average y«ield of 6.8%.
recent
have
know
Harry S. Truman.
helped her to destroy Germany.
can
only hope that we shall not be
striving today!
—:
at present with those
of 28
will
cally.
One way of
analyzing the trend of utility earnings vs.
prices
is to compare
average
to
guarantee that im¬
no
provement
had
We
for
year.
have
government
portation—not
country apparently did not foresee that
cisely this would be the behavior of Russia
we
in
of
that
roof is
one
is not directed against
It is designed to bring to all
this
gain of 14.7%.
corresponding gains
I
government.
naving six transporta¬
tion agencies put together under
It may serve a good
purpose at that to call atten¬
the fact that—believe it or not—leaders in
preferred dividend payments and then for the
increased number
of
know
tion to
February, 9.9%; January,
a
of
enough
seen
peace
—President
make
a good
Revenues of the larger electric utilities for
the month of
April were 8.5% over last
year, gross income was up 14.9%, and
net income gained 17.8%.
Increases in net income for
previous
months were as follows:
March, 9.6%;
The calendar year 1949 showed
policy within the executive
branch"
*
showing.
17.6%.
Secretary of Commerce for
tation
Truman
the people ol
any land.
people the benefits of justice and freedom."
earnings and dividends in
should
President
"The United States,
together with the other free
nations, is striving to build a world in which men
will live as good
neighbors and work for the good of
This is always a slow
procedure, and
(and
the
are
probability that an excess profits tax would
again
imposed, and the utilities might then have to ask
the state com¬
be
coun¬
are
hesitate to sacrifice their lives if that will ad¬
vance the cause of Communist
imperialism.
up our
honored
problems and for the
development of over-all transpor¬
not
possibility that, due
has
leadership with respect to trans¬
being taught to
place the State above the obligations of family life.
They are being brought up to despise religion and to
believe that God does not exist.
They are being made
into tools of power
politics, and their masters will
defense program, President Truman
might call on Congress to in¬
the rate still further. If actual
war should
ensue, there is
of
President
portation
crease
h
The
Department of Commerce by say-?
ing that it is his purpose "to look
boys
to the
tries.
Under the
This would reduce electric
utility earn¬
common
Moreover, there is
Weather Bureau.
girls are being given a com¬
pletely distorted picture of the
relatively good showing in
higher Federal taxation.
recently passed by the House and
the Senate,
Administration,
the Bureau
Roads,
the
Inland
Waterways Corporation, the Coast
and
Geodetic
Survey
and
the
countries
These
13
Public
world and prevented from learn¬
considering the threat
tax bill
time
of
fashion, under the
same
the
„
of
and
for industrial stocks.
Utilities
the
Hammer and Sickle.
However, during the recent sharp decline due to
the utility average dropped 8% or about the same
scare,
were
being mobilized and marched,
are
industrials.
comparing June 29 with Jan. 5, utilities
dip of about 4% compared with a net rise of about
3%
for industrials.
They
influence
De¬
Transportation.
agencies of govern¬
ment
directly
concerned
with
transportation problems, six are
now
in the Department of Com¬
merce.
They are the Civil Aero¬
nautics Administration, the Mari¬
Of
the young people of
'
However, in 1950 they have been slowl.y losing
ground in relation
a
war.
the
States
the
to
of Commerce for
of the tyrants who led them.
to the industrial
average:
showed
from
United
dition, created in the Department
the position of
Under-Secretary
their families and their churches
and sacrificed to the ambition
dumped
on the market to effect
the so-called "death sentences"
imposed
by the SEC. By the end of 1949,
however, the utility stocks had
fully regained their market popularity in relation to the
industrial
issues, and were in fact slightly ahead of the
latter, having ad¬
23%
off
the
Commission
partment of Commerce and, in ad-*
the
racial hatred and
During 1937-1941 utility stocks acted much worse than the
general market, the Dow u'ilitv average
dropping 61% while the
Dow industrial
average declined only 38%. This was
probably due
to fears that the holding
companies' portfolios would be
vanced
in
Maritime
days of Hitler and Mussolini, the
young people of Germany and Italy were regi¬
mented in organizations dedicated to the idea of
By OWEN ELY
Thursday, July 6, 1950
.
.
transferred
Have We Learned Yet?
Utility Securities
.
of
President
organization
Plan
Truman's
No.
21,
Re-
which
sence
of
that
principle.
Should
user charges for Federally-provided facilities be based on all
90s,ts~P?st at wel.l
installation
as future—of.
operation and
main-
tenance?
How shall the charges
j?e aPPortloned among the i ferent types of users. How shall
charges be collected — by
bcenses, fuel taxes, income taxes,,
tolls, or §ross^ receipt l2xgs. Infbe case of highway users par—
ticularly
Versy
as
there
to
Progress
,
user
is
much
contro-
charges.
is being
made
in
the
.
v
development of
charges.
a
system
Many states
are
of
user
making
Volume 172
studies
Number 4922
of
highway
.
.
The Commercial and Financial Chronicle
.
and
traffic
revenues; the Senate is obtaining
"much useful information; and in
indicated is being made.
sociation of American
has
established ^
the Department of Commerce the
gram
Civil
Technology.
has
Aeronautics
Administration
presented for the
House
of
use
the
Appropriations Committee
some
preliminary findings on the
problems involved in fixing user
charges
the Federal airways.
on
Government subsidies
ably
such
to
operations
subsidies enable
with
compete
which
U.
when
S. firms
foreign
subsidized
are
lower
are
firms
whose
or
operating costs
the
are
re¬
sult of lower wage standards. For
domestic transportation, subsidies
should
be
tually
clear
a
decreased
and
abandoned unless
even¬
there
is
finding that national de¬
requires
certain
services
fense
which could not exist except with
support.
government
fense
subsidies
and wherever
Such de¬
be direct,
should
Advocated
Readjustments
Two
major
of Federal ac¬
areas
refrigerator
goods.
Many
managements
ing
passenger
that
fast
and
profits
of
concern
the
Commission
merce
Aernautics
Com¬
I
the
Civil
the
and
Board.
in
stated
so
the immediate
Interstate
believe, and
Transportation
Report, that the regulatory agen¬
cies should consider establishing
rates—for
each
type of transport
to the full
—in close relationship
of
cost
wise
we
cient
providing service. Other¬
cannot get the most effi¬
out of
use
studying
the
plant
with
each
carrier
of
type
do best.
I
realize that it will be a long, hard
job it
the
doing
can
job to change rate structures that
built up
have been
The
through years
new
should
progress
which
ated
the
should
a* start
of
be
I
in
not
am
favor
ago.
changing
size
materials.
regula¬
tion which
•of
am
or
to
inefficient
an
opposed to regula¬
restricts the volume
so
transportation
deny
to
as
the
continu¬
Our
of
sources
great
foods
and
variety
which
fuels
of
must
and
a
manufactures
be
transported
quickly, safely and cheaply over
great
distances.
This
nation's
transportation
system must keep
with these vast changes, and
pace
if
possible
To
keep
promote
anced
ahead
of
them,
vigorous and
growth
of
bal-
competitive
a
transportation system, at the
same
time
safeguarding the public interest,
is
extremely
difficult.
there
are
no
master
plans, no
to
making
adjustments
and
We
Uur
constant
the
and
hower
blood
growth
ample
of
strength
a
flow
of
our
thus
to
and
the
outstanding
the
ex-
successful
a
built
system
the
be
commerce
economy,
the
of
our
in
must
part
every
national
maintain
of
clots
of
were
upon
Cleveland Bond Club
businessmen
the
ernment
than
other
most
tries, there is plenty of room for
private initiative to work,
work hard, at cutting costs,
proving operating efficiency
handling
of
traffic
the
less-than-carload
merchandise
Savings
In
Possible
the
stantial
through
case
of
savings
for
and
of
Water
improve
their
veloping
terminal
and
carriers
ensuing
operations
im-
by de¬
techniques of load¬
Truck
unloading cargo.
operators can progress in arrang¬
ing for cost-saving interchange of
equipment.
Savings
in
airline
possible
were
elected for
.jirst
heroes, poets,
our
because
they
security
seeking
for
or
were
them-
is
Governors
reported
to
have
saidj jn effect, that the people who
settled this
here
They
to
country did not come
a
government,
establish
ticians
tax
money,
I ask if the polidoing this for the good
may
are
the nation, or to get the votes?
What
happens
when
a
man
PHILADELPHIA, Pa. — F. S.
& Co., members of the
Moseley
to escape the tyrannies
They were not
security, but an opportunity to enjoy freedom—the freedom 0f self-development and acCOmplishment. Today the spirit of
Self-reliance is unfortunately decame
government.
York
New
Government's employees feel "se-
formerly
the
G.
is
the
ouf youth
attitude
Walker
never
formed
in
securities
a
Murray
of¬
with
business.
formerly with King
Co., Inc., is sole pro¬
&
prietor.
Join Waddell & Reed
(Special
to The Financial Chronicle)
BEVERLY
liam. D,
Jack
have
Hu 'son
staff
8943
HILLS, Calif.—Wil¬
Bell, Henry C. Carlson,
Hayden, and Walter W.
L.
of
been
Waddell
Wilshire
added
&
the
to
Reed,
Inc.,
Boulevard.
With Dempsey-Tegeler
(Special
LOS
R.
Chronicle)
to The Financial
ANGELES, Calif.—Robert
with
is now connected
Dempsey-Tegeler & Co., 210
West
Seventh
Rosborough
in¬
Street.
E. F. Hutton Co. Adds
rSpecial
^
Co.
Ariz.—Ed.
Murray,
Merritt
the total national income,
_
Co., New York.
fices at 206 West Adams Street to
in the schools
will
Mr.
of
and California real estate; pensions may help level retail sales
over a period of years, but most
systems
&
^
^
selves. They should be looking
toward
jobs
where
there's
a
chance to work up, to earn advancement in an incentive system,
not in a "sure thing" system. Pension systems should boom Florida
pension
has
firm
Manager of
was
Ed. Murray &
PHOENIX,
interested only in jobs which will
offer them old age pensions and
other
benefits.
As
Americans,
they should be ashamed of them-
crease
the
municipal bond department of
H.
engage
of
an¬
Potter
Chestnut Street.
1421
Potter
Ed.
some
H.
with
Co-Manager of its Philadelphia
as
office,
j^yg
disc0Uraeins
Exchange,
associated
become
cure" in their jobs
Yet, they don't
produce anything which
must gtand factory or retailer's or
consumer's inspection. Even more
Stock
that James
nounce
knows he>s going to be supported
whether he does a good job or a
one?
H
loses all incentive
seeking
to
The
Financial
Chronicle)
_o
Decay or Growth,
SAN
Bernard M. Baruch, adviser to
Presidents, said in a recent speech
that we are swapping our inde-
AS
OF
FRANCISCO,
Calif.
—
with E.
Howard
A. Frame is
F.
& Company, 160 Mont¬
Street.
now
Hutton
gomery
JUNE
1950
3 0,
LIABILITIES
H.
Watter-
—
Secretary
Prescott
—
&
Carl
L.
Liston,
Guy W. Prosser,
Lynch, Pierce, Fenner &
—
Agencies
The
of
First
is
Clarence
Cleveland
Accrued Taxes, Interest, etc
871,946.49
Reserve for Dividend
156,406.25
$182,228,508.92
State,CountyandMunicipal
.....
9,622,005.50
Other Securities....
11,453,324.82
21,075,330.32
.
.
Time Collateral Loans
Bills Discounted
.
.
(Par $20.00)
79,903,942.78
Other Resources
Joins Marache Sims
2,611,229.49
Capital Stock $5,687,500.00
56,90 P,623.77
Banking Houses
.
Customers1 Liability under Acceptances
$4,282,025.03
.
Acceptances Held in
1,670,795.54
6,133,305.97
.
Less:
Portfolio
16,869,013.04
.
Payable July 1,1950
Acceptances Executed
3,028,836.69
1,464,780.75
.
Accrued Interest Receivable
Corp.
2,061,654.58
3,877,431.23
Beane.
President
,
Unearned Discount
.....
Demand Loans
Co.
Treasurer
Merrill
Securities
.$262,772,760.97
(Includes United States Deposits 18,641,994.39)
Doerge,
Co.
Corwin
Deposits
UJS.GovernmentSecuri ties109,557,044.19
Securities
Fahey Clark & Co.
Vice-President
Surplus
.
10,312,500.00 16,000,000.00
Undivided Profits
.
.
3,247,835.67
.
19,247,835.67
748,934.68
.
163,495.69
.
Reserves
#
•
•
•
•
•
•
•
,
1,832,430.33
$288,613,829.83
$288,613,829.83
,
(Special to The Financial Chronicle)
LOS
ANGELES,
Olesen
P.
mond
Calif. —Ray¬
has
become
Save for Your
af¬
Independence—Buy U.S. Savings Bonds
filiated with Marache Sims & Co.,
634
South Spring
Street, mem¬
of
bers
the
Los
Angeles
Stock
Alert
Exchange.
to The
Financial Chronicle)
National Bank
of marginal services,
reducing duplication of routes and
C.
facilities
staff
LOS
the
and
Efficient
Trust Company
ANGELES, Calif.—Robert
Lowry has been added to the
South
Friendly
mm
With Revel Miller
(Special
elimination
and a general tighten¬
ing of managerial efficiency.
Progress along the lines I have
Moreover,
the
year:
Wm. J. Mericka &
through
Cleveland
President—William
son,
im¬
new
are
the
facilities
can
of
sub¬
ing and
operations
Club
following officers
possible
perhaps in operations them¬
selves.
Bond
Davis
Railroads
railroads,
are
the
Retiring
consolidation
provement
and
lots
freight.
promise to spend
a charity to support this
that—out of the people's
a
Cash and Due from Banks $68,794,033.50
CLEVELAND, Ohio—At a meet¬
ing of the Board of Governors of
terminals,
at
especially the handling of smaller
units of cargo, in the handling of
said,
"Nothing can bring you peace but
the triumph of principles."
Do
we
admire or gather inspiration
U.S.Government
and
modernizing equipment. All forms
of transportation can and should
make
improvements
in
their
Each and every sugges-
hard-earned
0wn
STATEMENT
Elects New Officers
and
im¬
more
L\° ii1SLn6? nrntJit A friend of mine, who is a teacher,
sought 1 st 0
J o p e t g
that healthy young men, in
his own physical health and life? th*ir early twenti4, claim to be
any of
philosophers
and
Co.-Mgr. For
Moseley in Phila.
more
RESOURCES
op¬
indus¬
Potter
a
frQm
development
challenge
'
portunity to establish transporta¬
tion enterprises.
Although the transportation in¬
dustry is more regulated by gov¬
we
covered America if he had been
seeking freedom from risk? Would
ai1
^ve been a great fig ting
General if he had been afraid to
swim the rivers or storm the
bridges with his men? Would
Gandhi have been the beloved
once
risk,
devel¬
no per¬
private enterprise and individual
service
American
business,
1™^" £, exce, The" pubUc must reaUze
to excels The public^muTt" reallze
^"hiColumbus have everdis- by nQW that t0Q many of thejr
Ralph Waldo Emerson
be
can
struggle.
perfect security."
freedom.
and which, at the same
unreasonably
denies
to
as
group or
has
struggle and
no
in
There
never
capitalist
foundation of
shipping and traveling public an
adequate
supply
of
transport
time,
more
we human becould not keep on living if
kept
aid to farmers,
small
to
security.
often stated that
">RS
more
it
It
encouraging
proclamation.
new
tion amounts to
his
b ut
is
national
or
dependent
A strong moral
character
without
encouraged
become
parasitical.
oped at all.
health insurance and employment
in -selves? James
Byrnes in a speech
harden-
no
or
urges
abil-
man's
every
loans
is
itself
ernment
in
at ^g last Conference of Southern
uninterrupted
vital
to
furnishes
arteries
want
objective
throughout
is
continue.
of the arteries
veins.
move
improvements
transport system
veins
ing
can
objective
that
economy.
sense
objectives. The
major
transportation
the
we
is
It
common
that
our
Uur
follow.
calls
has
They
more.
and
fibered
this leaning, this moral weakness
in the United States?
Our Gov-
pwight Eisen-, 0f
techniques,
markets,
citizens like
war
War
what
or
grave?
children who
to
'
sonal
"Dependents"
Many
Who
capacity,
Roger W. Babson
there
transportation companies to
con¬
a
were
great
I
distinc-
forth not only
demand
toward
unprofitable services
greatness
and
us
change. They like to travel. They
of
manner.
for
•
stimulus
of
of products and
range
raw
in
—
and
is
to
quite
the
ity
business
sure
for
maintain service in
provide
t
American
regulation's sake.
I am
against regulation which unduly
interferes
with
managerial dis¬
cretion, regulation which causes
tinue
peace
seem
today's growing and
important
of
bad
expanding economy are different
from
the
problems
of
twenty
years
too
didn't
-
Too
say
was
often
with
make
basing rates on the actual costs
of furnishing transportation.
tion
that it
that
most
oper¬
present
made
men
s.
and
our
es
heard
happens
are
given everything—except re¬
sponsibility? They become greedy.
They come to expect more and
e
d°e
toward
believe, however, that
I
system.
basis
v
tion
businesses
been built
have
on
of
a
etim
som
Ad¬
all
h
the
problems — including
transportation problems — con¬
by
disrupt
I
trailer
Maritime
remind
formulas
to
of
What
A
that
easy
not
.
The
trailers between ports on the West
Coast.
These and other signs of
only
in
as
losses.
in
is now determining
feasibility of a" design for a
ship which will carry loaded
I realize also that prog¬
so
if
__
ment from the cradle to the
Webster s Dictionary definition parting; too many want to lean
of "Security" includes freedom upon the government; too many
from fear> freedom from risk, dan- are thinking of security instead of
ger, harm or the like.
opportunity.
ministration
the
changing our present rate
system must be slow and gradual
of work.
ress
prov-
bring'
can
problem
interchange.
transportation
our
looking
Trucking Association is
location
of
Department
are
-
are
operations
efficient,
instead
of
American
ously
the
forward
railroad
ple want to be treated like babies,
to be cared for by their Govern¬
Babson, asserting self-reliance is diminishing and too
many want to lean upon government, preferring security to
opportunity, condemns false gospel of security as destroying
individual incentive and threatening the nation's progress.
.
of containers fcm-shippiug
freedom is "too much gov¬
Do the American peo¬
our
ernment."
Mr.
problems!?;:/
car
the problems connected with"
use
diction
of
im-|£
solvep
lems,
the
to
By ROGER W. BABSON
In-jp
this
at
oil;';
mechanical and engineering prob-g.;
tivity—those of rate-making and
regulation—lie outside the juris¬
Commerce and
Experts
making studies to
railroad operation, to
Security Desirable?
nected
practicable, budget¬
ed with other defense needs.
Rate
Is
pro~|v
Institute
are
prove
and
prob¬
international
in
necessary
transportation
stitute
a
pendence for a "false gospel of
security," that the greatest threat
,
Railroad^
research
Illinois
the
at
The As-*
31
(91)
Revel Miller & Co., 650
Spring Street, members of
Ettublislwil 1858
Philadelphia
of
Los Angeles Stock Exchange.
MEMBER
FEDERAL
DEPOSIT
INSURANCE
CORPORATION
32
(92)
The Commercial and Financial
Chronicle
Continued from page 3
ular party
A
♦
the
might
Stocks foi Income—And Koiea
uct
for
diminution in
a
duction
for
be
new
and
cars
new
houses, but what will become of
that demand if higher wages and
higher material costs again de¬
velop buyer resistance as they did
to early 1949? The purchase of a
i*ew
and
car
deferred
of
many
the
home
new
a
easily
more
be
can
than
can
necessities
real
of
t&e.
The Credit Stimulant
The
machinations
the
of
Ad¬
ministration to keep down interest
•rates and to liberalize credit are
flaying
their
part
"Never
the boom.
in
a
the
sustaining
borrower
lender" has been replaced
But it is
causing
economists
to
make
We
Truman
happened to
Continued from
XAf Ok
ll-fn
life.
of
way
Deal
ideology had it not been for
New Deal
or
by the
many
can
It
unqualified
is
to
man
obtained
be
may
or
Fair
a
critical developments."
incident.
i
or
be
not
may
more
ine
an
impertinence for any
give credit to any partic-
But
whole
a
all
of
themselves
alive.
It
free
kept
has
have
been
ing fewer charters
showed
the
competitive
the
As
had
mentioned
lot
a
to
in
contend
column
our
with this
last
industry itself; severe weather in the Pacific North¬
west and the delayed opening of the Great Lakes because of ice
conditions; some unfavorable dividend announcements; the out¬
of-hostilities in
the
Pacific.
All
of
these
factors
have
threatening erection of steel mills;
punitive taxation; destroying in¬
terest rates; discouraging thrift by
lessening the purchasing value of
in¬
creased
nervousness toward a class of security that even earlier
had been pretty much out of public favor. Nevertheless, and even
with the sharp break that followed the invasion of Southern
Korea, railroad stocks
as
a
first six months of 1950.
At the end of
52.76.
At the close of business
at 52.25.
The decline of
usual, there
stocks.
was
the
51
railroad
June 30 this
on
cents
amounted
average
same
to
possible
incentives
not
are
alive
free
a
to
enterprise
Nor will the free enterprise sys¬
remain healthy by,, running
tem
stood at
into
debt
during both boom and
periods; by encouraging the
populace to follow the example of
average stood
bust
less than
1%. As
wide variation in the action of the individual
of the general market trends, it is almost
in the rail field to realize substantial profits,
a
the
Regardless
always
dollar,
keeping
system.
whole just about held their own in the
'• !
1949 the Dow Jones
Amer-
encouraging featherbedding;
within the
break
the
that it reasonably could to destroy
these. Certainly fixing farm prices;
week, the rail market has
The coal strike and strikes
year:
spirit of
to
by promising old-
save
support;
age
sustain substantial losses, in specific securities. The first half
©f 1950 was no exception to this generalization. While
©r
by negating the
government;
desire
by all the other
nor
manifestations of
day b,y day
Welfare State.
a
railroad stocks may appear to move in
concert; this is not true of
The
period as long even as six months.
With the averages virtually unchanged
during the period, in¬
dividual stocks gave performances
ranging all the way from an ex¬
treme advance of 89% to a decline of more than 18%. Of 60 com¬
mon
and speculative preferred stocks listed on the New York
most
always been the
devastating
disease
from
which
a
any
dole
,
Exchange, 33 scored advances and 27 showed declines dur¬
ing the six months. Of these, a third had net fluctuations of less
a
point. There
were
21
on
nation has suffered.
because
for
the upside and 19 on the downside
ing
that
period
accumulated.
price changes of more than a
point. The widest change in point of actual dollars was a rise of
0% points for the high-priced Santa Fe common, nearly matched
•>y an 8V2 point decline for Denver & Rio Grande Western pre¬
could
we
purchases
In the industrial field the
bulge that took place between the
beginning of the year 1950 and the Korean difficulty was to a con¬
siderable degree concentrated in the higher
grade so-called,
well.
sion
the
"name" stocks.
This has not been true in the ralroad list. A
large
percentage of the railroad "name" stocks were about
unchanged
to lower during the six months.
Exceptions were Santa Fe, Louis¬
ville & Nashville and Southern Pacific but even in
these instances
the percentage gains were of modest
proportions. Even for Santa
Fe the price advance amounted to less than
10%.
stocks covered
than 10%. There
more
by this
were
survey
there
11
9 that were down
more
news
on
to
contend
with
the down side
but
was
were more
or
off
were
shall
we
have
find
to
in
traded
today is about 100 million
panding at
in
daily
security that
of
turns
we
was
among
the leaders
in actual dollar gain
also—up 6Y4 points.
Other mames prominent on
the upside were Chicago and East¬
ern
Illinois "A" stock,
Chicago Great Western (both issues),
totonon (both issues) and St. Paul
common. Of these, only Great
Western preferred has been a
dividend payer. ,1 The other stock
(hat acted well
during the period was Seaboard Air Line
common,
-up 5% points or 26.7% from the 1949
close.
This
showing was
probably the most logical of the material
percentage price gains,
the company's improved credit was
acknowledged by the low
coupon refunding of its 1st
Mortgage bonds and the common went
on a regular
quarterly dividend basis this year.
and
ingot tons. Capacity
companies are still ex¬
steel
average annual rate of more than 2 million tons.
producers could change over to a wartime/ footing :
overnight. But alloy producers would probably encounter '
some problems
resulting from large scale demand for special heat
resisting alloys required for jet aircraft.
Carbon
an
steel
.
•
So far there have been
directives from
no
Washington for ac¬
celerated military ordering,
allocations, priorities or any of the *
other wartime controls.
However, the ground work is being laid
this week for initiating them if and when
they are needed, states
this trade authority.
♦
•
Regardless of the international situation, civilian demand for
peacetime goods will be insatiable in many lines.
People who have
held
back
from
buying automobiles, refrigerators,
washing ma¬
now rush into the
market, lest stark
military necessity deny them such purchases for a long time.
chines and other items will
Basic steel is in greater demand than
sive ways of
and all the expen¬
ever
obtaining additional tonnage
tractive. Items like plate and bars that
are
were
becoming more at¬
fairly easy 60 to 90
days ago have been added to the critical list. It has been estimated
that
much
as
as
25%
of all
steel used in the automobile
industry,
Example, is coming in at more than mill prices. This includes
warehouses, conversion, scrap deals and premium prices.
for
This
should
be
viewed
prediction that the
trucks
above
been
this
auto
Such
year.
previous
any
in
connection
industry
record
a
will
would
accomplishment.
with
build
be
But
uncannily accurate in the past.
authoritative
an
8
million
head
this
same
to
comes
and
cars
and
shoulders
has
source
The tip-off for
is that automobile output for the first half
cles, observes this trade magazine.
the future
3,724,000 vehi¬
The trend in steel is still
up and steel production men are be¬
coming more and more concerned about rising costs.
Scarcely a
week goes by but what some
ingredient
creased in price. As a
result,
some
in
steelmaking is
steel items
are
now
being
in¬
pro¬
duced without profit. This is
building pressure under the general
steel base price
level, in spite of the fact that most steel companies
have officially denied that
they
increase, concludes "The
The American
Iron
are
contemplating
a
general price
Iron Age."
and Steel
Institute announced this week
that the operating rate of steel
companies having 94% of the steel
making capacity for the entire industry will be 92.6% of capacity
for the week begining
July 3, 1950.
This week's operating rate
is equivalent to 1,765,200 tons of
ingots and castings for the entire industry, compared to
1,929,100 tons a week ago. A month ago the rate was 101.3% and
production amounted to 1,931,000 tons; a year ago it stood at
61.2% and 1,128,200 tons.
equities.
on
shall
get
offered
income
too,
clue from
the
quality of
public.
issues
new
The
at
to the
of
amount
light and
Output
of
this
dences
as
are
ahead
many
as
potential
there
are
fot; investors to
depend to too great an extent
equity dividends for future
on
se¬
curity.
week
again
reached
12,831
was
The Korean situation has merely
highlighted
set
off
this
major
decline
what
apparent truism.
may
decline.
occur,
plug that has
develop into
Should
a
sooner
or
later
have enjoyed in the financial
picture—is frequently described as
the
hurricane
proportions.....
will
Let
be
new
historical
peak.
j
the output reported
July 2, 1949, and 949,294,000 kwh. in excess of
for the corresponding period two years ago.
Carloadings Hit Highest Weekly Level Since Nov., 1948
Loading of
810,152
totaled
Railroads.
This
revenue
cars;
was
freight for the week -ended June 24, 1950,:
according
on an
preceding week, and
ber, 1948.
was
to the Association of American
increase of 4,472 cars, or 0.6% above the
the highest for any week since Novem¬
r
us
of
-
■
'
.1
The week's total represented an increase of 7,211
cars, or 0.9%
above the corresponding week in 1949, but a decrease of
78,216
cars, or
major
we
"weather breeder/'
a
8.8%, below the comparable period in 1948.
a
earnings and dividends will be af¬
fected. A cloudless sky—such as
a
electric
kwh.
.
It has been the spark
the
6,062,095,000 kwh.
evi¬
prosperity at present.
dangers ahead are such as
to make it unwise
by
higher than the figure reported for the
previous week, 704,727,000 kwh., or 13.0%, above the total output
of
But the
distributed
all-time high record the previous high level
reached during the week of Feb. 4,
1950, when output totaled
for the week ended
dangers
energy
power
Prior to last week's
was
It
Dangers Ahead
There
electrical
industry for the week ended July 1 was estimated
6,115,119,000 kwh., according to the Edison Electric Institute.
re¬
Perhaps,
some
Electric Output Scores New All-Time
High Record
in the
or
is being
shall have to give
we
number and
•
tons
almost
of
number
hope
minor
-
in its current summary of the steel trade. It knows that
it will be called upon for high production for
many months to come—but it :
doesn't know whether the production will be for war or
peace.
The steel industry is ready for war or
peace.
In 1941 the
nation's annual steel capacity was 81.6 million
problem
the
the
in
full cognizance to the
common.
Independence Day, Holiday
steel
accumu¬
to
answer
an
bought. And
Others
considerable degree the wide
percentage gains were in
the low-priced
stocks, and where dividend prospects are, to say
the least, remote..
Chicago & Eastern Illinois common led the
parade—it was up 88.9% from the 1949 close. Missouri
Pacific
followed with a gain of
60%, while both the preferred and com¬
mon stocks of Central of
Georgia were up more than 40% during
the period. This
preferred,
difficult.
more
than
type
a
; as
timing
shares
additional weak spots, the former
incidentally,
expan¬
less
large percentage gain for the
To
continuous
as
types of credit makes
rather
specialty situations
such as Pittsburgh & West
Virginia, Western Maryland and Cen¬
tral Railroad of New
Jersey. St. Paul and Denver & Rio Grande
Western preferred stocks
in sharp contrast to a
the
all
time our
only of
not
merchandise
lation
than
only 3.2 %.
easily
of
the available statistics of produc¬
10%. In this latter
prominent
the
were
tion, sales and inventory
group appeared such names as Chesapeake &
Ohio, Pennsylvania and Great Northern. Chesapeake & Ohio and
Great Northern were, of course, affected
by unfavorable dividend
news. Southern
Railway common, however, also had unfavorable
dividend
this
sales
and
but
But
of
Still
that
were
un¬
an
has been
money
If
more
securities
Of the 60
years
alpha and omega of the situation
ferred.
were up
many
satisfied demand existed, and dur¬
that closed the half year with net
f
having prosperous times
are
to
,,
Basis of Prosperity
We
Stock
than
has
Output Cut Due
facing one of its greatest chal¬
lenges according to "The Iron Age," national metalworking weekly,
in¬
people; and if truth be told
government
has
done
ail-
the 8,375 for April.
over
American industry this week is
nate independence, initiative and
ican
only four of the forty-eight states report¬
year than last.
The May total of 9,216
this
rise of 10.0%
a
Steel
enterprise
rather
-
9,216, the largest
for any previous month since
April, 1948 with 9,223, according to
Dun & Bradstreet, Inc.
They were 23.8% above the 7,445 recorded
in May a year ago, with
in
not
can
The consistent rise in the rate of new business
incorporations
compared with a year ago was maintained during May. The
number of charters granted last month totaled
Labor alone.
or
these
we
as
also
country as
reported to have stated that it does not believe
restore rail service for nothing, especi¬
made by both the railroads and
bring about a settlement of the current dispute." The
union added, it would move
only "emergency shipments."
Administration, but it
questionable whether the
help that Labor has received from
government
has
benefited
the
is
He undoubtedly had in mind the Korean,
the board to
the
to
was
"at this time that
power,
due
union
ally when small effort has been
Democratic
The Truman Boast
of
has
Labor
5
The State of Trade and Industry
our econ¬
under
a
paae
V
Thursday, July 6, 1950
.
.
what
a war, which for five years stim¬
practically committed itself to
ulated
production while at the
keeping the economy on an even
same time it created a shortage of
keel.
necessities, and the type of lux¬
Judging from a recent address uries that have almost become
of President Truman, he is
not necessities.
only committing the government
There was nothing wrong with
but
taking the full credit for free
enterprise' per se in the 1920s.
present prosperous conditions ana
There was something wrong with
the salvation of American enter¬
our
investment
and
speculative
prise.
Does he not realize that
manipulations. We give the Dem¬
free enterprise under a free dem¬
ocratic party credit for correcting
ocratic
system without any so¬
the abuses. There was intrinsically
cialistic frills made this country a
nothing wrong with Public Utility
prosperous nation for 150 years
Holding companies, excepting size,
before
the advent
of
the New
and it will probably prove gen¬
Deal? True, we had our ups and
erally beneficial to the country
downs. We shall have them again.
that holding companies were de¬
You cannot keep 60 to 70 million
stroyed, as the independent units
people continuously employed, if
will operate more elticiently. That
people cannot, or are unwilling
prominent but less sound
•our more
would have
J~\4r
ttrntr
Mr.
omy
government
.college boys' slogan "A penny
charged is a penny saved." It is to, buy all the goods that
a
dangerous
philosophy
upon produced.
which to base future security of
Income.
ask
has
large de¬
a
that
statements
pro¬
home building.
or
There may still
mand
car
for the preservation of
km
American
.
Auto
Output Cut by Elimination of Overtime
According
to
"Ward's
Automotive5 Reports"
for
the
week
ended June 24, motor vehicle production in the United
States and
Canada dropped to an estimated total of
194,259 units,> compared
with the previous week's total of 205,334
(revised) units.
Elimination
cause
of
of the decline;
overtime
operations
~
f'
was
reported r
Total output for the current week
-*1
•
-
as
the
155,238
cars
"*■*•
-
was
made up of
•
Number 4922
Volume 172
cars
The week's total
-
.
.
The Commercial and Financial Chronicle
30,551 trucks built in the United States and a total of 6,180
and 2,290 trucks built in Canada.
and
*
.
units produced in
with
compares
a
combined output of 137,802
the United States and Canada in the like 1949
(93)
in
appliances
Weds Heads Dtp I , at
sion dropped from last week's high level.
Total retail dollar volume in the period ended on
Wednesday
of last week was estimated to be from 3% above to 1% below a
Walston, Hoffnan
Regional estimates Varied from last year's level by these
year ago.
week.
practically unchanged, while requests for televi¬
was
percentages.
Business Failures Increase
Commercial
and
ended June 29 from 147 in the
.Inc., reports.
but
remained
Moderately
to
rose
156 in
were
level of 264 in the similar week of
The week's increase appeared
41%
below
the prewar
1939.
in all industry and trade groups
except manufacturing.
reported weekly increases in
the only marked de¬
The New England States reported
cline, to nine from 13, the lowest in 1950. The East North Central,
1950,
rose
the
general upward trend in food prices last week pushed the
27 up to
$5.69, and represents a new high for almost eighteen months, or
it stoo dat $6.08.
the sum total of the price per pound of
It is not a cost-of-living index.
The index represents
foods in
31
general use.
Commodity Price Index Moves
a
a
corresponding period
drop of 2%.
Retail
Dun & Bradstreet wholesale food price index for June
since January 11, 1949, when
favorable
a
week
rose
a
in
to
response
lifted to about 6% above the
been
like week of
with
firm but irregular throughout most of the period
the beginning of the current week
with
Paine,
deficits in
this
of
governmental
time of
relatively
full
his
expect
government
of
within its income in
by Government forecasts of a larger Spring and Fall pig crop.
Weather conditions were generally favorable and the new corn
rent issue of "The
the
firms
the/Pacific
on
to
1948.
Since
that
No-3
time
eight additional offices have been
established in eastern
ing
exer¬
cities, mak-?
total of 30 offices from coast
a
coast
firm.
now
The
maintained
principal offices
by the
are in
New
York, San Francisco, Los An¬
geles and Philadelphia.
ity.
said to be making good progress. Cash wheat closed well
ago aided by increased export inquiries and brisk
weather conditions in Spring wheat areas. Oats prices fluctuated
was
Jackson &
-and later with
office in New York in
an
vember,
cise enough fiscal prudence to live
employment and general
prosperity was featured in cur¬
He
Webber,
Coast, extended its operations into
eastern territory with the opening
to
.
leading
develop¬
J
V '
Walston, Hoffman & Goodwin,
one of the leading investment and
Guaranty Survey," monthly publication of Guaranty Trust
Co., points out incongruity of government deficits in time of full
employment and general prosperity, in light of "managed
economy" doctrine of government surpluses in such periods.
paradox
past 25
of
Curtis for 13 years
Dean Witter & Co.
'The
The
the
over
number
a
ment of futures business.
Holes Paradox in Federal Deficits
of Trade was less
the Chicago Board
associated
Wall Street firms in the
held true. For
same
the
commodity futures trade, having
years
24, 1950, the
in
Mr. Woods is well known in th&
a
depart¬
consequence,
membership
brokerage
of the outbreak of hostilities in Korea.
news
©n
last
goods. As
to
another step in the firm's expan¬
sion of its services.
to
year
Trifle Higher
active last week.
were
were
York
summer
but for the
ago,
year
the year to date volume decreased by 5%.
dex stood at 238.15.
Prices
New
for
For the four weeks ended June
slightly higher at 266.57 on June 27, as compared
the in¬
and moved sharply upward at
in
a
the
of
Exchange, Chi¬
cago Board of Trade, New York
Produce
Exchange
and
Com¬
modity Exchange, Inc. and marks
According to the Federal Reserve Board's index, department
store sales in New York City for the
weekly period to June 24,
1950, declined 2% from the like period of last year. In the preced¬
ing week no change was registered from the similar week of 1949.
week before. On the corresponding 1949 date
Trading in grains on
election
An increase of 6%
year.
of Robert
Establishment
department follows the firm's
New York Cotton
ended June 24,
1949.
daily wholesale commodity price index, compiled by
Dun & Bradstreet, Inc., moved in a narrow range during the past
with 265.43
trade
demand
ment store sales
The
week and closed
1% from the like period of last
opening
office, 35 Wall Street,
Woods.
new
recorded in the previous week from that of a year
ago For
the four weeks ended June 24, 1950, sales showed a rise of 3%
Food Price Index Attains New 18-Month Peak
$6.04, a rise of 8 cents, or 1.3% over last week's $5.96. The current
figure marks a gain of 6.2% above the comparable 1949 index of
index for the week
the
announce
York
under the management
J.
was
date
A
Reserve Board's
Goodwin,
York Stock
commodity department at the
a
New
comparble
week a year ago. There was a noticeable
dip in the number of
buyers attending many wholesale centers.
Department store sales on a country-wide basis, as taken from
Federal
of the New
Exchange,
of
ordering continuing to rise moderately, buying
in the nation's wholesale markets increased somewhat in the week.
Total order volume was slightly above that for the
from
South Atlantic and Mountain states declined slightly.
members
+3 to —1; East and North¬
+2 to —2; and Southwest and Pacific Coast +1 to +5.
With apparel
the
Four of the nine major regions
casualties.
west
preceding week, Dun & Bradstreet,
they
Walston, Hoffman &
New England, South, and Midwest
the week
Casualties were 12% less numerous than a year ago,
above the 103 in the comparable week of 1948.
failures increased,
Although
failures
industrial
39
The cash
corn
market showed independent strength influenced
crop was
above
in
a
week
narrow
a
harvesting operations moved northward.
range as
The domestic flour market was featured by
active trading in
Guaranty Sur¬
vey," the monthly publication of
Guaranty Trust Company of
New
York.
"The
real
irony is discernible
heading of 'economic
planning' and the 'managed econ¬
under
the
of 20 cents per
Spring wheat flours late in the week following price reductions
hundredweight. Aggregate bookings were the larg¬
in many weeks. Export flour business remained slow. Cocoa
prices advanced sharply to new high ground for the season. Tight¬
ness in the spot market reflected expanded consumption by con¬
fectioners, increased demand from European countries and fears
of short' supplies. Demand for both green and roasted coffee broad¬
ened considerably last week with prices showing further gains.
trines and
est
pression of the 1930's," it is stated
in the feature article of the issue,
titled, "Mismanaging a 'Managed'
Economy."
Further easiness in lard reflected slow export demand, weak¬
policy, then that condition is here
in oils and
ness
total
a
of
publication of the June pig
this
pigs for
99,000,000
year,
report, indicating
largest number in
crop
the
peacetime history.
Cattle
prices declined as market receipts expanded to the heav¬
almost two months. Hog prices fluctuated irregu-.
larly and closed slightly under a week ago.
firm following recent
Spring lambs were
sharp price upturns.
Following early easiness, domestic cotton prices moved stead¬
ily upward to close with moderate net advances for
the week.
Early weakness was influenced by reports of favorable weather
conditions in the belt, continued large loan repossessions, and the
belief that the new cotton crop may turn out to be much larger
than had been anticipated.
Strengthening factors in the latter part
price-fixing, increased activ¬
of the week included mill and export
ity in the cotton goods market, reports of continued heavy weevil
infestation and the report that the ECA had allotted further funds
to Norway for
the purchase of cotton.
Withdrawals of 1949-loan cotton during the week ended June
a trifle below the previ¬
Withdrawals for the season
through June 15 totalled 1,827,000 bales, leaving a net stock still in
the hands of the CCC of 1,363,000 bales.
15
were
reported at 148,177 bales, or only
week's
ous
peak of
149,224 bales.
Trade Volume Advances
Consumers spent
*
slightly
Mildly for Week and Year
more money
in the period ended on
Wednesday of last week than during the week preceding. Much
buying
was
"If
the
in preparation for the impending holiday week-end.
slightly above the
1949, states Dun & Bradstreet, Inc.,
shibboleths of the
attainment
of
full
de¬
now
the
the
advocates
of
satory'
governmental
spending,
and held out the prospect of fi¬
nancial
security and paternalistic
benefits from the public
Crowell, Weedlon
(Special to The Financial Chronicle)
LOS ANGELES, Calif .—John D.
Gould
has
joined
Spring
Los
Street,
members
of
it'
MAIN OFFICE:
NEW YORK OFFICE:
377 Montague Street
26 Broad Street
New York 4,
Brooklyn 2, N. Y.
o
N. Y.
jobs, swell purchasing
'prime the pump' of re¬
"Spending heavily during bad
times, the managed e c o n omy
would
provide
budgetary
sur¬
pluses during good times for reducihg the national debt.
So it
was
thought,"
continued
"The
Guaranty Survey."
"These are good times in 1950,"
declared
the
bank
monthly,
"so
Condensed Statement
on
U.
;
$ 62,180,383.45
S. Government Securities
and
124,045,701.77
Municipal Bonds
14,514,315.15
Securities
Other
4,941,668.26
what of the managed or compen¬
sated economy as it affects the
Loans and Bills Purchased
debt burden?
Bonds and Mortgages
In the concept of a
'managed economy,' what is hap¬
pening to the managing? If ours
be a 'planned' economy, then what
has become of the 'plan' for debt
reduction during good times?
"Cheapening
the dollar
Bank
36,085,870.19 "
1,650,000.00
1,000.00
Other Real Estate
649,882.24
Resources
$244,069,821.06
by at¬
in its latest review of trade. The past week there continued to be
1,000.00
-
Buildings
Other
»
Hand and Due from Federal
Reserve Bank and Other Banks
State
1950
RESOURCES
,
Cash
of Condition, June 30,
trition jeopardizes the whole Fed¬
eral
increase
men
in
apparel buying by shoppers; sportswear for both
and women was high on the list of items sought. The demand
for cotton dresses rose
slightly,
as
did the interest in hosiery, Sum¬
blouses and accessories. While the
purchasing of men's wear
did not entail an increase in the volume of suits, there was a large
interest in shirts and straw headwear. Shoes were prominently
requested by shoppers in many localities.
mer
The retail
slightly last week with the
increase in dollar volume stimulated by the approaching four-day
week-end. The demand for fresh fruits rose noticeably, as prices
generally remained low. Following excessively warm weather in
many parts of the nation, the interest in soft drinks, ice cream, and
cold cuts rose appreciably.
The buying of meat and vegetables
was largely unchanged from a week ago.
•
purchasing of food
rose
Spurred by a generally high demand for furniture in many
sections, the volume of house-furnishings sold last week increased
-
moderately.
<
Dollar sales
were
fractionally above the relatively high level
for the. corresponding week a year ago.
,
~
/
} : Intensified promotions in housewares brought about a notice¬
ably increased vdemand for them in scattered areas. The interest
policy of 'social security' for
of citizens," continued
"The Guaranty Survey." "In fact,
social security can become social
insecurity if and when the dollars
paid in old-age pensions, life in¬
the
masses
and
other
fixed
obliga¬
tions are dollars of declining pur¬
chasing power. In 1940 a pension
of $100 a month provided as much
surance
in necessities and comforts
of
$168
does
now.
The
as
6,000,000.00
Surplus
Undivided
Reserve
Profits
1,839,584.99
—
,■
for Contingencies
Reserves for
Taxes, Expenses, etc
Dividend Payable July
•
Other
21%
less purchasing
than the $18.75 paid for the
bond ten years ago.
American does
not desire public parsimony at the
sacrifice of good government or
adequate military preparedness,"
in the opinion of "The Guaranty
Survey," "but he has the right to
thinking
893,515.76
;
683,281.88
205,000.00
226,091,750.43
Liabilities—.
r
——
re¬
has
"The
.
1, 1950
Deposits
156,688.00
$244,069,821.06
by a citizen today for a
maturing United States Savings
power
8,200,000.00
$
-
-
one
$25
LIABILITIES
Capital
ceived
Bond
the
Angeles Stock Exchange.
argued
economy
level for the similar week in
an
of
staff
COMPANY
covery.
Retail dollar volume for the country was very
the
Crowell, Weedon & Co., 650 South
managed
financing was justifi¬
able in times of widespread un¬
employment. Heavy government
spending, it was believed, would
power,
treasury."
With
BROOKLYN TRUST
that deficit
create
prosper¬
This is a social responsibility
that is as binding on the 'liberals'
as
on
anyone else — especially
those who have dogmatic ally
preached the virtues of 'compen¬
for all practical purposes. In
troublous
period
of
the
compensated
or
time of full
em¬
ployment is the basic aim of social
1930's
iest volume in
•
omy' that recall the political doc¬
a
employment and general
United
States-Government and State
carried
deposits
at
$28,561,871.09
and
for
other
are
and Municipal bonds
pledged
purposes,
as
to
secure
required
One of the Oldest Trust Companies in the
Member
Federal
cNew York Clearing House
Deposit
Insurance
public
by
law.
United States
Corporation
-
.
Association and Federal Reserve System
34
(94)
The Commercial and Financial Chronicle
age action during the past
hectic week.
If you take a
Tomorrow's
all in the immediate
were
gion of 206-207.
Whyte
By WALTER WHYTE==
The
universal
explanation
I
call
lows
the
Korean
minor
an
explanation
losses
will
now
out of it and
snap
shoot up
have the
market
the
not
or
is something I don't
answer
to.
To
the
be
*
that of the averages, and
the lows should be
computed
to
the lows made
on
by the same
The stocks which
down as much as
going to avoid answering the
the averages would be in the
question. The chief trouble is
first group; the stocks which
that it will have to be an an¬
*
#
This
does
based
swer
*
mean
I
am
factors
I
am
not
on
probably not capable of ex¬
plaining. Primarily the solu¬
t-
averages.
did not go
acted
with
the
averages
would be in the second
group,
while those which went lower
than the
tion, or rather the clue to the
put
solution, is to be found in the
market
itself.
This
means
a
spy-glass view of the tech¬
performance in the face
of certain news, the depth of
should be
averages
aside
candidates
as
short sales
on
any
for
*
the
apprentices
their unions.
ac-
by
1930 many unions were "cool" toward increasing their own compe-
of the turnover in
total
$3.3
of
But
slowing, and
was
billion
tition
in
their
local
areas,
Apprenticeship faded out of the
to
the individual job
requisite ratio of
skilled
bulk
vast
a
of
mechanics.
contractors
do
It
is
to
use
not
helping
him
in
the
lieu
apprentice
of
janitor.
a
He must work with the tools and
materials
skilled
his
of
trade,
under
guidance.
One of the«anomalies
of this
picture as the union men got hunproblem is the fact that general
grier and hungrier. By 1937 busicontractors see the need for
that capitalism forgot. Where else ness was better, but the men in
ap¬
prentices, but they do not place
do you, find an enormous volume the "locals" saw no merit in
large
apprentices.
That is the task of
of money being manipulated with scale apprenticeship, because
they
the contractor
so little risk
specializing in a
capital? And where knew the local conditions did not
specific trade. If the subcontrator
else do you find the customer fi- have year-round
continuity, and
does
his job
with
very
small
nancing the product so meekly?
annual earnings were poor.
Too
crews, he can't include
appren¬
On this angle of the construction P°or *? make building tradesmen
tices, for training rules stipulate
outlook I recommend re-reading attractive
customers for home- ratios of learners to
skilled men.
your library copies of "Fortune," ownership. But there was a trickle
The age pattern of the man¬
August, 1947, "The Industry Capi- of apprentices coming into the
power in the respective trades is
talism
Forgot."
The editors of national picture, and by 1940 the
rapidly getting toward the retire¬
"Fortune" detail for you the con- Prospect of apprentices to swell
ment level.
Actually, many union
coction of credit which serves pri""i011 rosters was comfort- "locals" are
working hard on this
vate developers so that they can able
lf no* generous,
problem for the financial security
produce new dwellings of every
The Selective Service Act of of the union itself
is at stake. The
size and shape. "Fortune" remarks 1940 set up a scheme for
military
dues-paying members are fading
could be rewritten to apply to the training, and presently the buildaway, and new men are not com¬
non-residential and other types of ing
trades
apprentices
found
ing in as fast as the old ones drop
construction which comprise the themselves
sought after by the out.
private work set out in Table I.
gentlemen who had to fill quotas
,
shift capital structure that housing
called
the industry
for the armed forces. The
appren-
subsequent
Construction Industry Will Be
tices
Make
no
it up, the stocks in
the first list would be the ones
mistake: the construe-
and
n0t
The
financial
losses
taken
by
contractors who didn't know their
costs and how to run their
jobs
in
recent
turning
months,
is
quietly
so-called
many
re¬
contract
capacity
to
prime
were
physical specimens, single, and with good edu-
Kept at Peak
s*
nical
To
private
has well been
rallies.
*
which
this first quarter.
This work has
been handled with such a make-
list
a
on
to maintain
has
enough
construction
construction,
the
of stocks should be lined
up,
the action of which is similar
journeymen
who
has
and
dential
but
*
specific,
more
contractor
policies urging and supporting the private operator is abundantly clear in the field of resi-
ment
the
being of more than
significance.
the
progress
ed and sent to school and shop in
not have enough men on a
single
1925. By 1928 their apprenticeship
job to give- the apprentice the
was being rewarded with journeykind of training which is
required.
men's cards in
counts for 54%
to
of
in
The
The intimate relation of govern-
the
as
*
makes the
the less palatable.
any
Whether
As if
explosion.
attention
your
for the break of last week is
the
roll
The Construction Outlook
re¬
same
time the highs were on
descending scale.
For
point of this argument
highs can be disregarded,
Says—
=
At the
Thursday, July 6, 1950
.
job
look at the averages, you will
notice that the lows last week
Markets
Walter
Continued jrom first page
..
sortment
sum
u
*
'"rt'spensable to the home town
tion industry will be kept at peak
tors to their former status
as
fore¬
men.
indefinitely by the as- anairsThis doesn't help make job
of latent demands, and
By 1941 building trades appren- openings for apprentices. The key
buy, but even there res¬
by-products of public action
ervations are called for. by government aid. But the capa- tices were flockging to the "See is the number of skilled men
in the face of fears and hopes
city of the industry is shrinking in Bees" of the Navy, for they could working on the job at the time the
Should any of these stocks
terms of the manpower available see the shape of things to come,
acquired through many years
apprentice is to be there.
break below the lows of last to operate it. Hence the peak cawanted to keep their identity
I
have
outlined
of study.
the
national
week they should be dumped. pacity in locality after locality, is with the construction industry by picture with these brief state¬
Jic
*
*
being pulled down.
enlisting
for
military building ments because the problem is con¬
A stop
might be placed to do
First let me point out that
cealed in the "grasS roots," in the
Speaking literally, the life blood operations.
the thing for you even
though of the construction industry is
The
apprenticeship
system local labor market, and in the
according to a strict Dow in¬
unique in the American scene. The ground to a stop during the war. hands of men who have to make a
terpretation, the market no\y stops are two-edged weapons
manpower which builds is skilled Subsequently a good number of living day by day, and who have
finds
itself in the position in a
breaking market, but un¬ in crafts which require long ap- men with construction experience little time or financial margin
where it has to go through the til
with which to engage in a jobsomething better is devised prenticeship and on-the-job train- in the armed forces tried to make
old highs, 228.39 in the indus¬
ing, beyond the patterns common their way into the ranks of jour- training program which is sure to
the
reaction
recent
and
the
^
trials, and 54.37 in the rails
to affirm the continued prev¬
alence
of
bull
a
market.
Should the averages
through
fail to go
strict Dow inter¬
a
pretation
we
have been in
a
the stops
[The
article
time
will have to suffice.
views
do
expressed
not
with
They
those
are
neymen in the respective trades,
but they found themselves beyond
the age limits set in prewar years
counts
*
*
of
the
presented
as
those of the author only.]
To the theorists this inter¬
of
pretation
ments
^
will
double
talk.
market
move¬
probably
make
provocative conversation and
To
the
market
when
contractors
play¬
Jersey Corp.
Formed in Jersey City
JERSEY
for
Most of you will realize, if you
but stop to reflect on history for
the last 25 years, that the man-
which is essential to the specialized crafts,
power
has
been
revitalized
training
_
..
_
and
.
.
experience
_
,
„T
Apprenticeship
so
in
bad
with
to
nue
at
921
in
engage
Bergen Ave¬
the
securities
penheimer
were
were
Harry
E.
Roche,
I can't.
Assistant
Treasurer); and Ruth I.
way
because
phase of their training programs
handled as a quasi-charitable
to drop out summarily.
Apprentices
being recruit-
activity charged against the
pay-
NEW
CONSTRUCTION ACTIVITY
Mr.
in
ness
his
own
*Total
new
Construction—
1950
construction
Percent
Pacific Coast
on
Pacifle Coast Exchanges
Schwabacher & Co.
Member«
Change
From % Mos. 1949
York
Stock
Exchange
New York Curb Exchange (Associate j
8a» Francitco Stock Exchange
Chicago Board of Trade
14 Wall Street
OQrtlandt 7-4150
New York 5, N. Y.
Saa Francisco—-Santa
Per
Shell Oil
/
Treated
which
will
be
a
alleviate
local
it
asset, not
itinerant seeking better jobs far
But the time element is
running out and the cracks are
showing in the foundation of our
17
industry
(excluding farm)—
1,800
+
44
struction
force
the
for
construction
741
—
208
—
33
10
9
understanding of the con¬
industry
outlook
re¬
quires that the products to which
our
credit and
Warehouses, office and loft buildings
Stores, restaurants and garages
73
—
153
—
307
+
3
14
savings
going
Speaking
broadly, the construction industry
is producing structures ordered by
should
100 Shares Plus Tax
be
with
conversant
sponsors
are
scrutinized.
requirements
or
market.
their
In
the
Educational
61
Hospital and institutional
72
Social
•
....
52 j.
—
10
fields, no one will
the judgment of the in¬
vestors.
Nationwide, we seem to
be doing a
fairly good job of
keeping our factories and utilties
38
—
7
up-to-date. State and Federal tax¬
+5
policies will speed or slow
willingness
to
follow
our
judgment of what should be done."
84
and
recreational
tRemaining types
Farm construction
Public
Total
utility
public construction.
or
Put
&
Dealers
50
Calls
l,059i
6?j|
Nonresidential building
433;
dk
Assn., Inc.
other
♦Joint
+
21
of
the
hotels
SOURCE:
Architectural
and
Department
+162
the demand for maintenance
replacement
of
facilities
,
of
Commerce and
+
25
+
44
struction merits much
+
13
than
558js
-
the
'
-
and produce more of
+10
Department
+
1950.
is
geared to the ever-expanding ca¬
pacity of our people to use more
7S&
miscellaneous.
Forum, May,
But
and
12^
public construction
estimates
flncludes
ation
27
Other nonresidential building
Broadway, N. Y. 4, Tel. BO 9-8470
at
+
230-
.
Hospital and institutional
All
cavil
our
2
—
J-
Educational
price change
Brokers
;
—t
THOMAS, HAAB & BOTTS
Members
3
+125
689
...-.
Subject to prior sale
+12
—
42
Residential
•
Be
away.
+
Religious
@ 42
Oct.
9 $375.00
Mission Corp. @ 56
Sep. 6 425.00
Amer.TeI&TeI@ 152% Oct. 9 387.50
Amer. Woolen @ 25
Sep. 1 300.00
Atlantic Ref'g @ 49% Oct.
9 425.00
West'n Union @28
Sep. 19 250.00
Allis-Chalmers@ 33% Sep. 25 125.00
Beth. Steel
@ 39
Sep. 18 125.00
Gulf Oil
@ 66
Dec. 11 487.50
Cities Service @ 70%
Sep. 5 450.00
Mo-Kan-T Pfd.@ 26%
Aug. 28 112.50
Barbara
Rosa
Should
should
3,332
Industrial
SPECIAL CALL OFFERINGS
Monterey—Oakland—Sacramento
Fresno—Santa
pub¬
This aspect of the construction
industry
is
basically
a
local
problem and should be treated by
18
Nonresidential building
Bailey, Dwyer &
Teletype NY 1-928
Private Wires to Principal Offices
seldom
Locally
+
Messrs. Ro-
..
New
They
non-residential
•
Orders Executed
Problem
construction
private
Residential
con¬
Company.
Securities
■
of
skilled
right.
4,391
Other nonresidential buildings
officers
claims.
labor
Total
detsky, Kelly and Heppenheimer
are
and
an
1st3Mos.
investment busi¬
Jersey City.
the
day, and the
skilled workmen,
Full
Gallagher in the past
ducted
of
lish their facts, but they know and
will tell you if you go about it
man
Mulligan, Secretary.
prefer a second interpre¬
tation, one based on the aver-
every
locally, because the skilled work¬
(Millions of dollars)
*
I
men
age
methods
TABLE I
Type of
and
the
Bad Way
is
offices
But
trades
today is in a
the on-the-job
long that we could have a major
New Jersey Corp. has been formed
collapse if the men nearing 65
Vice-Presidents (Mr. Roche is also
*
for
the
Apprenticeship
of the construction industry
not
CITY, N. J.—The First
ing them that way—at least
*
la-
apprenticeship and the road typical age of
borers
to
handle
materials
and looked too tedious for others who
town by town, is likely to be over
equipment, and to keep the job in had family obligations and needed 55.
You can get your local data
shape for the trades to come in, jobs with substantial income from the union
secretaries who
work, and make way for those quickly.
They just couldn't wait handle insurance fund collections
participant all this is "jabber- business. Officers are Hubert D.
wocky." If they go up, we Gallagher, President; Bernard Rowill be in a bull market; if
detsky, Vice-President and Treas¬
they go down, we won't. You urer; Hugh A. Kelly, William Hepcan't make any money
use
who follow in sequence.
First New
/
*
be costly in both time and
money.
for
bear market since the middle
of June.
The construe-
tion industry is skilled right down
to
the laborers,
and experience
any
necessarily at
coincide
Chronicle.
to other businesses.
this
in
of
Labor*
The
field
of
everything.
residential
-
con¬
more study
non-residential, because we
cannot
be
products
at
are
term market.
all
sure
fitted
to
the typical
the
long—,
We may be heading
into real trouble in the residential
Volume 172
Number 4922
.
.
The Commercial and Financial Chronicle
.
field because the businessmen
inclined
feel
build
to
which
on
make
they
profit,
a
familiar
something
know
they
profitable
the
serve
can
though less
even
less
or
would
ucts
di-
the production of houses
recting
prod-
customers
better.
As
nation
a
million
to
need
we
dwelling units
a
of
should
be
contrasted
when
available
is
manpower
Within the framework
of factors which builders can con-
40% of 1949 urban housing as being for rent, must be qualified,
Too much went imb too few urban
trol,
and too much
apartments at higher
areas,
the
bulk
shrinking.
need
we
kind
of
to
stimulate
apartment
the
Teaching Capitalism
By Making Capitalists
production
which I referred to above,
small
was
The Chicago Community
than
rents
Development Trust
of market demand.
One way to tackle the problem
of
Buildings built in Chicago by
modern the plan devised for the Corncharges munity Development Trust, are
producing
development;
and rental housing in the form of
tiny apartments at luxury prices
adequate,
apartments
at
monthly
which are not too great, has been today,
offering apartments with
undergoing test in Chicago for al- three bedrooms, living room, dinmost 30 years. There is a way to ing room and kitchen in walk-up
do the job, if we follow the pio- or
elevator type
buildings, at
neering which has marked the monthly charges comparable to
is
trail.
family demand, and to replace the
dwellings
which * become
uninhabitable.
need
But
,
.don't
we
suburban
vast
unrealistic
the
surely
when
assortment
consider
we
families
of
to
be
accommodated.
The
need
publicly-owned
housing is largely a reflection of
the fact that the building industry
hasn't devised
who
tomers
We
can
to serve
ways
unable
are
cus-
to
pay
usefulness
by
of
combining
merchandising.
Merchant
there
the
are
affreJT
that
economize
to
to
rates
brand
occupy
buildings.
Easier terms
part of the story.
Today we
new
production.^ buildings.
also
have
the
bugaboo of
of
have
vast
a
buildings
need
for
locations
at
will serve the market for years to
but the construction indus-
come,
try can't
die-the
its
see
clear to han-
way
assignment
at
imme-
an
in
month,
per
They washing
rising: space for
By "Architectural Forum^' 1950
the
not
are
volume
of
spectacular,
the
been
never
builders
'20s
their
took
and
left
SiTe labr^ac
7-»
-
-
4
Standardization of o,rv___
5
Uniformity
operating costs; hence, less than
$50 per month. Many are priced
in the $38 iio $45 range.
7
Volume production
3
of-denr'n
sized
erous
need
The
cities
%
tion
Subcontracting^
'4 \
Asbestos
to
No
their
older
hoods.
and
air
industry is as urgent as edu¬
cating the prospective tenants.
At two points in the scheme cap¬
ital is needed, beyond the volume
2
heating
Prefabricated
1
which
has
1
_
parts
see
reason-to
100%
we
towns
Which
and
in
neighbor¬
these twin
In many ways
could
be
handled
growing segment of
w.h0^ani
their
ability to climb stairs.
should
have
the
benefits
Land
convenient.
rates,
in
and
buildings for
19
Which
Trades
in
17
Masons
'
17
Bricklayers
Since
built
a
false
most
in
sense
rental
cities,
the
11
Others
100%
Builders
increase
can
their
ef-
materials
But
introduced
are
builders
can't
reduce
daily,
wages
by grabbing at its
People who attempt to
find security by limiting their investments to highly liquid assets
I
that
Nonfarm
December
First
twelve
^promptly
launch
capital projects.
often results in
chasing
those
nix
December
First
*1,019,000
twelve
■
52,000
months
1950
April
April
*394,700
First four months
931,300
1919
*126,000
First
88,300
four months
the
will read the
Urban
1949
and
Rural
1st 9 Mos,
Nonfarm
September
194.9
1948
Housing
1st 9 Mos.
of
1948
January
1959
1919
62.400
423,100
44,200
413 100
48,200
29,500
Rural
40,500
Total
1
323,900
38,000
323,300
30,500
____
you
747,000
82,200
741,400
78,700
50,000
Housing Starts
(Total
two-family
September
Total
1st 9 Mos.
1949
1949
1948
25,200
173,200
12,900
September
and
1st 9 Mos.
1948
of
power
multi-family)
January
1959
130,500 >"-16,300
January
1949
12,900
means
intelli-
can
#
i
hard
work
serve
vising
the market.
the
dollar has
de¬
an
estimated 72%; in the
half-century, 62%, and in the
last
decade,
41%.
Those
who
placed $1,000 in Series E savings
bonds a decade ago and added to
the $1,000 the accumulated annual
interest
compounded
These young Americans are
learning to understand capitalism
the
in
sible,
effective
most
that
italists.
way
pos¬
becoming cap¬
expressed
b.y
is,
interest
the
If
these young people is at all
typical then there is still a great
strength present
in the
American capitalistic economy.
by
latent
IAIim
ftAVIIt0>tf||l With
UUflllgllHI
flllll
Bacon, Whipple Co.
(Special
Financial Chronicle)
to The
at
c^,1T.if,r
with
Bacon, Whipple
South
La
the
of
taining security as expected, they
Salle
Exchanges.
Co.,
&
Street,
York
New
Stock
to the trust accounts which would
created
for
and
Midwest
and
Mr. Covington
formerly associated with the
was
Chic-go
office
James
of
Oli-
H.
Phant & Co
With Reynolds & Co.
the
.0
Financial
Chronicle)
CHICAGO, 111.—Charles H. Eldredge has become associated with
Reynolds
Salie
&
COm. 208
street
balle
He
btreet-
South
one
tormeny
was
with Talcott, Potter & Co.
have been losing while saving,
Every American has the
tunity
of
participating
Samuel Franklin Adds
oppor-
in
the
(Special
ownership of industry and should
advantage
this privilege
of
by purchasing at least
of
in
stock
of
one
one
the
share
private
LOS
B.
to The
Financial
Eelmont
Frarkl'n
is
&
Chronicle)
Calif.—David
ANGELES,
with
Samuel
Company,
215
342, 344 and 346
Seventh Street.
to
you
go
respective localities.
member,
the construction
Capita!
STREET
1, N. Y.
.
.
.
.
$500,000.00
.
.
Surplus
-.
.
7,500,000.00
Undivided Profits
Statement
615,000.00*
Re¬
indus¬
Hand
on
$
June 30, 1950
on
LIABILITIES
1,688,108.84
Cash
in
Banks
12,183,966.25
U.
Gov't Bonds
20,842,947.24
N.
S.
State
Y.
City
Other
and
Bonds
Loans
on
Bills
Other
Due
Checks
824,765.31
Mortgages
624,750.67
Collateral,
Demand and Time—
Real
6,896,673.82
:
-
and
$
Surplus
7,092,580.60
Bonds
Stocks
Capital
.___
Undivided
Bonds
local
activities, and you can help
strengthen it at the grass roots.
the close of business
at
RESOURCES
try is a nation-wide composite of
to The
FULTON
BROOKLYN
Purchased
Estate
32,388.12
Discounts
for
Expenses
Contingencies
Off irial
781,813.83
Checks
Outstanding
273,957.06
159,645.54
$53,412,998.39
has
Oreg.
Field & Co.,
joined
2,828.82
Taxes,
and
Chronicle)
Financial
PORTLAND,
615,607.25«
43,820,714.83
Certified
Reserves
392,682.44
500,000.00
7,500,000.00
___
Depositors
Unearned
2,037,566.15
555,000.00
Assets
Profits
—
the
John
.
staff
O.
of
Cascade Building.
*After
$53,412,998.39
charge of $301,550.00 for the Past Service
cost
under the
Company's Retirement Income Flan, adopted by Stockholders,
With Chas. N.
to The
Financial
PORTLAND.
,
and for expenses
ihereof.
Member Federal
Deposit Insurance Corporation
Oreg.—A. A. Les:
seg has
become
~ "
Chas.
N.
Tripp
Bank Building.
Tripp
Chronicle)
„
COnnCCte J with
"*
Co., American
SAVE
FOR
YOUR
INDEPENDENCE
—
L.Y
U.
5.
SAVINGS
BONDS
B.
West
Kings County Trust Company
cheerful
into
these three interrelated problems
in your
I urge
La
formerlv
was
He
the
offered
135
members
The task of de¬
capital structure for one
segment of the construction in¬
dustry
might also
be
met
by
channelling capital in quantities
S.
has become associated
Covington
2.9%
ovna^
ae
111.—William
CHICAGO,
that their purchasing
today
will
a
in
forts.
last
find
rewarded
well
are
■
economic system for their ef¬
our
Thus
clined
way
building
apartment
(Special
Rental-Type
u-
loss in the pur-
In the last century the purchas¬
ing
will have
Then the
20,500
102.900
investors
that
know
who
manpower
impasse
become clear in each locality
Cowman
Urban
a
of the dollar.
power
the
(Special
January
They
moderate
presen¬
Field & Co. Add
September
sav¬
"Architectural
258,100
*Preliminary.
•
then
attempt to find security by holding assets with a fixed
dollar value may find that they
lose more in
purchasing power
than they gain in security.
take
is
continuous flow of
private investment chan¬
ings iiuo
flowing into
Deficit financing
„
construction
pur¬
learning the impor¬
are
a
amount of risk funds
made
were
a
to resort to def-
icit financing to offset the reduced
the
br(ng the story before
you
in
comment,
Housing Started
194>t
*79,000
months
Government
necessary
Forum,"
January, 1950, of the Community
ture
194!)
their
actions are
making such security impossible,
Cash
Permanent
that
ownership of
the buildings in each locality.
Having worried you about three
phrases of the construction pic¬
II
HOUSING STATISTICS
.&
.(Source: Bureau of Labor Statistics)
.
.
if
tation
be
(
of
many
educational
such
Baldwin-Wallace College
students
witn
repaid
the
from
neyment in-gaclr trade to justify
having an apprentice on the job,
may
TABLE
.
capital
would
where
housing
is
I
lack
size of job that uses enough jour-
15
be
1949
if
Apartment
out
ficiency in better tools and better
supervision. -M o r e
economical
of
realize
the general outline.
of security,
bulk
date.
the
limitation.
Development Trust
16
Carpenters
The
into
bone
reflection.
the. b£jsis of opera- of the 1940 dollars. Instead of ob-
the public.
too.
24%
Plasterers
dle-aged families!
one
Your
Line?
mid¬
figures on 1949 housing
production (Table II) would lull
But
method
Plumbers
and
And many should
elevator-type
tion.
Opinion, Are Farthest Out cf
loca¬
attractive
are
T
costs
Wages,
industry in the form
pleasant, comfortable quarters,
reasonable
funds
ers
ltfO%„,
the
at
lost his
The dog
^method can-<be used anywhere in Power of this investment and its
"""the,country with just the custom- income is equivalent to only $766
Lme*
With Reference to Bui'dirg Labor
They
of
of
which
rr>sts
Furthest"
it for-I
is needed to
construction
tions
Is
feel
i§ airbasic
mention
to
appeared
Land Improvement costs. 11
property maintenance and
and
their health
limits
repair,
of
our
,^ve'
We all remember Aesop's Fable
of the dog and his bone.
_
as
but they should not have the bur¬
dens of
no
Building material eosts~<&4&0fcr- fliVailable to. facilitate installment
Building labor wages
49
purchase ofitrust certificates the
Mortgage intef(^*hates_ 10
eagerness of promoters to use the
Americans live longer than they
did in earlier generations.
Thus,
a
E^Jowin^
the
uulw l
.
part of the neighborhood redesign.
there is
of
Your Oninion.
Out
goals could be met by one opera¬
tion, if the production of suitable
apartments
for the possibility of advancing
their economic level,
are
cement^sliding. _ 4
subcontract^g___
gained
gently participate in the ownerthe individual from advancing his
of shares of stock in private
material position. America was corporations.
They realize that
founded by individuals who were successful
investment requires
willing to assume risk in return hard work but that those who do
method
Asphalt tile flooring.._
construe1 ion__
housing in gen¬
apartments,
the
on
partly .technical, and in some
ways education of the construc¬
floor
capital
our
in
limitations
6
Slab
Apartments
rebuild
to
owns
property, but the
monthly
,charges drop to a level of actual
12
Quantity buying.
liquidated, the trustee still
the
Needed
We need rental
the
to
,
8
'
14
Forced
Rental
Larger
title
the cost of the land, buildings and
services, v When the mortgage is
-
Dry wall construction
it out.)
worry
11
Close suoervision
'30s, but the
customers
w__ll%
Preassembly of parts
is
profits in the
the
tools
Precutting of lUtttber
mortgage investors of the '20s
lost their loans in the
who .holds
„
housing
(True,
a
trustee
in
over
vaiue
prevent
may
-
Federal
■!
.
Power
limited
liquid asset.
should hold
manner
finds it
risk money.
on
the
this
The
Basically there
is nothing wrong that couldn't be
cured
by true risk capital, but
has
by
in
s importance the various .^^Conventional mortgage financtechni<*ues and materials-you-use ing is used-4o span the difference
to reduce uosts.
between the initial trust fund and
by the customers.
there
^specialists —employed
'
prohibitive if the work is financed
boom based
highly
Ll®t in the order of tnwr^DoiIar^^pa.tment buildings.
and
capital required
other
some
find
fncT
with
will be
^cnu.ture
times
funds is often told to invest only chase.
At the
in
savings
deposits,
bonds,
or
J
1
J"
may
diate profit. The capital structure
is
incompetent!
The
potential
profits
individual
c.
sets
$38
as
are
types
which
The
corporations whose stock is traded
on a public securities market. The
nels.
ttt
We
as
ments to provide for emergencies.
But the holding of all of one's as-
machines, and garage
the family car.
wages in the building trades, offThis is not the time to tell you
see Set
by lowering productivity asnthe working details of the scheme,
new houses out-selling more adethe
mechanics
age
and become jfeutL the essence, of its success lies
quate but older structures because scarce. Note their views, as quoted Jh combining a modest payment
the customer can meet the terms from "Architectural
Forum."
:^by the tenbnt-monthly, with an
for the one. and can't show savinitial investment in a trust fund,
ings and credit rating adequate to
TABLE III
' '
,^>oth being managed by a panel of
command the other.
MERCHANT BUILDER SURVEY,^.building industry and real estate
economic
activities
tance of
Older build-
for sixroom
units including amenities
such as natural fireplaces, dish
■
builders
wavs
productive
through the purchase of
small
various
shareholdings in
companies.
as
low
with
other features familiar to American
well
Certainly everyone
part of his assets in such invest¬
1941 "frozen rents."
the
it
various
ings handled under that plan have
paid
off their
mortgages,
and
apartments are going at rates as
how to expand
see
the' potential
method,
for
35
Continued from page 15
with the record for urban production. The indicated raLo of some
per annum,
increment
the net
serve
about
production
(95)
*G
The Commercial and Financial Chronicle
(96)
The
Indications of Current
week
Business Activity
Latest
AMERICAN
IRON
Week
STEEL INSTITUTE:
AND
Indicated steel operations
-July
Equivalent to—
ingots and castings
Cteel
9
92.6
July
(percent of capacity)
9
1,765,200
tons)--.
(net
following statistical tabulations
latest week
or
month available.
or
month ended
on
Previous
Month
Ago
1,931,000
1,128,200
Previous
Year
Month
Ago
165,799,000
162.700,000
151,213,000
150,354,000
14,569,000
17,000
*14,614,000
12,332,000
12,335,000
11,000
11,952,000
174,649,000
2,469,000
*216,360,000
*23,747,000
9,216
8,375
7,415
.•*'
6,313,632
;
PETROLEUM
5,865,380
INSTITUTE—Month
April:
Total domestic
production (bbls. of 42 gal-
each)
ions
163,068,000
*
Domestic crude
INSTITUTE:
Crude oil and condensate output — daily average (bbls. of 42
gallons each) -—
June 24
-"
Crude runs to stills — daily average (bbls.)
June 24
Gasoline output (bbls.)
—
June 24
Kerosene output (bbls.)—.—
—
—June 24
Gas, oil, and distillate fuel oil oUtput (bbls.)
June24
J
ftesidual fuel oil output (bbls.)
June24
Clocks at refineries, at bulk terminals, in transit and in pipe lines—
Finished and unfinished gasoline (bbls.) at
June24
Kerosene
(bbls.) at—
June24
PETROLEUM
AMERICAN
oil output (bbls.)___
gasoline output (bbls.i**
Benzol output (bbls.)—*
5,354,750
5,118,000
4,944,050
5,565,000
! 19,034,000
5,591,000
13,704.000
5,322,000
19,626,000
18,462,000
2,001,000
*-
5,347,400
115,696,000
2,033,000
2,327,000
1,653,000
6,868,000
7,0o5,000
7,401,000
7,461,000
7,467,UOO
7.421,000
5,148,000
7,858,000
115,036,000
20,165,000
116,374,000
122,757,000
113.715,000
19,507,000
lb,075.000
2 j,313,000
50,580,000
41,291,000
47,717,000
40,o07,000
63,044,000
40,740,000
3.1.308.000
*—
Crude oil imports
(bbls.
Refined products imports (bbls.>
Indicated consumption—domestic and
(bbls.)
*
149,052,000
13,999,000
*
Natural
*
thai date:
Latest
AMERICAN
of
1,929,100
either for the
Month
61.2
101.3
are
that date,or, in cases of quotations^; are as of
Ago
101.2
Thursday, July 6. 1950
production and other figures for the
cover
Dates shown in first column
Year
Week
...
*
17,000
15,229,000
*
11,315,000
5,832,000
export
—
192,031,000
-
66,l4o,000
Decrease—all
(bbls.)**—
stocks
15,835,000
»
Gas, oil, and distillate fuel
Residual fuel oil (bbls.) at
*
oil (bbls.) at
June 24
June 24
BUSINESS INCORPORATIONS
STATES—DUN
UNITED
COKE
1
fhdvate
public
State
655,076
676.5-2
572,j50
$287,582,000
$256,200,000
$206,467,000
$180,900,000
June 29
177,294,000
110,288,000
88,994,000
141,592,000
100,340,000
96,484,000
114,608,000
106,127.000
95.493,000
84,416,000
200.3
196.6
June 29
—
61,621,000
Cereals and bakery products
169.6
169.3
—June 29
21,294,000
26,010,000
10,634,(XK^
22,795,000
Meats
233.5
227.9
ENGINEERING NEWS-
Beehive coke
June 29
—
—
;
~.
88,598,000
PRICE
INDEX
10,540,000
no,440,000
10,085,000
886,000
1,042,000
June 24
134,000
*137,200
115,300
*
1,139,000
73,300
250
June 24
July
Failures (commercial and industrial)
:
—
302
247
282
6,115,119
l
6,102,288
5,631,934
5,410,392
dun
—
&
299.2
307.6
207.2
137.3
_**
fuels
House
—
150
June 29
—
147
168
177
COTTON
SEED
June 27
...
3.705c
Received
$46.38
$46.38
$46.38
$45.91
Crushed
June 27
**...
3.837c
June 27
......
Pig iron (per gross tot)—
(Scrap steel (per gross ton)
$87.67
$39.00
$b'7.45
$Lj.3J
Stocks
3.837c
3.837c
Crude
SEED
Lead
York)
mills
at
22.200c
22.200c
June 28*
22.420c
22 .A^ijc
^■0. 4*bc
lo.b zSj
June 28
78.500c
7u.8/oc
78.000c
103.0003
28
11,000c
12.000c
T2.0O0c
12.000c
June 28
10.800c
11.800c
11.800c
11.850c
June 28
15.00UC
15.0juC
12.500c
9.00JC
at.—
at
june
...
(St. Louis)
-
20.200c
15.700c
275,850
July
x
3
102,115
101.915
102.54
Juiy
Government Bonds——*
Average corporate
3
115.04
115.24
115.82
*.
120.22
120.43
..—July
s
102.83
1x3.12
:
,
3
120.63
119.00
119.00
119.41
117.40
114.06
3
Juty
*
110.00
3
July
Aaa
115.04
115.24
112.37
'
; Baa
10 (.0.)
107.44
108.34
104 48
3
100.42
109(97
110.70
*
—
.
116.41 "
116.61
116.80
114.66
3
119.01
119.61
1*20.02
117.60
*
•
fffGODY'S BOND YIELD DAILY AVERAGES:
U. S.
Government
Bonds
—
....
Average'-corporate
Aa
Baa
.
July
——July
July
****_July
2.34
3
Stocks
(tons)
251,672,000
2.35
2.31
2.29
Railroad Group
«•#
*
May 31
(tons)
received
*******
Produced
#»tock
'
['
Stocks
—_**_.*--
Stocks
2.70
2.68
2.78
Shipped
3
2.91
2.90
2.89
3.33
3.31
3.26
3.48
July
—July
3
2.83
2.82
2.81
2.92
month of
3
2.67
2.67
2.65
2.77
Revenue from
3
3.20
3.17
3.13
3.31
3
4112
401.0
396.5
333.5
EDISON
ELECTRIC
205,526
211,027
209,448
187,300
209,350
.June 24
94
93
93
80
390,879
395,147
333,486
241,787
158,700
169,612
121.1
120.6
120.6
127.9
sales
April
to
Ultimate
;
jUne 17
:
June 17
27,376
833,176
.June 17
_
$38,337,323
_
**__.!
,
june 17
,
June 17
Customers' other sales*—
June 17
s
"
Customers'
Dollar value
short sales—
'•
'
of
Other sales
30,777
168
34,629
35,199
19,061
189
383
35,920
18,678
866,107
994,558
983,165
Junei7
5.960
11,038
7.179
Z*
June. 17
860,147
983,518
975,986
—June 17
.
$35,826,685
$39,737,085
$37,448^207
june 17
527,860
15,314
512,546
$16,938,143
306,310
342,130
339^10
165,510
june
306^310
342! 130
3^310
1651510
June 17
246,220
243.570
277,160
204,750
—-—------June 17
—
22,396,907
22,564,513
20,401,121
$410,075,600
$414,263,200
$374,735,300
43,478,939
43,289,183
41,355,734
11,592,000
6,191,000
♦11,551,000
5,401,000
:
ultimate
customers
at
March
*5,480,000
31
PAYROLLS—U. S. DEPT.
SERIES—Month of
LABOR—REVISED
April:
All manufacturing (production workers)
Durable goods
Nondurable goods
*—
♦6,071,000
141.5
141.0
141.8
Payroll indexesAil manufacturing
337;X
*333.3
319.2
14,153,000
*14,101,000
"
in manufac¬
7,546,000
7,418,000
6,607,000
*6,683,000
14,177,000
7,656,000
6,521,000
304,640
*
—
20,572
321
other sales*.
otS SiS
i
560.201
$19,165,927
34,308
.
I
29.697
918,137
$39,906,201
30,609
'Round-lot sales by dealers—
Number 01 shares—Total: sales*,*
?
29,623
904,850
$41,289,592
I_Jimel7
Number of shares—Customers' total sales—
i :
1,734
AND
IRONERS —
SIZE
(AMERICAN
HOME
MANUFACTURERS' ASSOCIA¬
TION)—Month of May:
WASHERS
HOUSEHOLD
STANDARD
LAUNDRY
Customers' short sales
Customers'
1,169
3,029
customers—month of
Nondurable goods
-•
;
10,064
2,535
consumers—
(000's omitted)
ultimate
Durable goods
;>■
*
5,813
1,772
INSTITUTE:
turing Industries—
All manufacturing
!
and. specialists on the: n. y, stock
exchange*commission:
v
*'
'Odd-tot purchaseaby dealers (customers' sales )—
\
Number of orders—Customers' total sales
f.
1,121
Employment indexes—
All manufacturing
Number of shares—Customers^ total sales*:
■
1,913
1,019
547
3,110
—
*
Number
Odd-let sales by dealers (customers' purchases)—
1
257
300
4,475
——*
*
Kilowatt-nour
OF
208,738
.June 24
*_„
;
90,076
3.04
3
index—1926-36
■
79,908
126,201
(1,000 pounds)—
*
Estimated unmber of employees
i—-—...
106,685
219
*
2.71
.June 24
Dollar value*
201,612
251
---
*
*
3
—June 30
Number of orders—
57,345
107,258
289
31
May
Shipped
Motes, grabbots, etc.
Stocks May 31:
Produced
-June 24
U
61,751
88,323
,
(1,000-lb. bales)—
Hull Fiber
3.00
_*_
! i
85,943
87,231
31
May
Shipped
2.70
exchange—securities
i
113,443
64,727
67,353
_
*
*
2.86
transactions for the odd-lot account of odd-
lot -dealers
■
82,277
98,504
(tons;
2.62
(tons)
price
108,784
79,151
Shipped (tons)
(running bates) —
2.89
average=100
!
117,678
166,332
127,724
Linters
2.63
!
ftx* paint and drug reporter
104,700
162,095
124,140
—
*
EMPLOYMENT AND
.***_*__._**._:
182,209
May 31—
(tons)
2.90
Rational paperboard association:
Orders
125,584,000
178,625
115,419,000
78,497
Stocks
2.64
July
Production (tons)
f Percentage of activity*—.—
;
Unfilled Orders' (tons) at—
227,587,000
118,392,000
Hulls-
3
woody's commodity index
1
*285,761,000
*116,520,000
i
April'
1
87,873,000
98,983,000
*
(tons)
3
—
Public Utilities Group
"Industrials Group
\
118,896,000
125,727,000
and Meal-
Cake
July
i——
_
*82,539,000
120,814,000
*127,349,000
130,694,000
Stocks (pounds) May 31
(pounds)
Consumption (pounds)
July
«
19.319
65,083,000
*
'*_
*
Produced
_July
;
343,442
Refined Oil-
Produced
{
261,911
676,299
90,610,000
106,798,000
May 31
107.44
3
July
—
Group
.'t'Industrials Group
3
—July
July
——
-
—
Public Utilities
"
July
—,—
Railroad Group
183,349
365,151
495,029
*
(pounds)
(pounds)
Produced
,
154.5
of
(tons)**.
—
May 31—
(pounds)
Shipped
ItOODY'S BOND PRICES DAILY AVERAGES:
S.
189.5
Oil-
Shipped
June 28
._*
*.
at—
Zinc (East St. Louis) at—.
U.
185.6
154.8
PROD¬
COMMERCE—Month
OF
(tons)
Produced
'
(New
140.1
94,580
COTTON
AND
(tons)
Stocks
ic5tal prices (e. & m. J, QUOTATIONS):
Electrolytic copper—
Domestic reimery at.—.—
sSL^LJ.1
Export refinery at
York)
182.7
146.6
185.4
**_•_**
"
tin
96.9
195.6
May:
Cotton Seed—
Finished steel (per lb.)
Btraits
97.2
191.3
155.3
furnishings
UCTS—DEPT.
•Lead (New
120-4
135.4
97.1
*
141.4
189.1
electricity
and
123.1
138.8
Fuel, electricity and refrigerators—*
176.1
185.1
123.5
'
144.4
175.2
185.1
:
*
135.2
174.6
—
brad-
Iron age composite prices:
.
190.9
220.7
146.6
SALES INDEX—FEDERAL RESERVE SY8-
(in 000 kwh,)**,
inc.
150.5
200.5
—
Miscellaneous
street
182.6
177.8
*—*
Other
z-
232.3
206.5
Sugar and sweets**—
fSDISON ELECTRIC INSTITUTE:
output
.170.1
144.4
*
and oils—:
Fats
Gas
Btectric
*
—
vegetables
Beverages
179.3
202.4
..
...
—
:
and
169.2
167.3
168.6
;
Fruits
Rent
TEM—1935-39 AVERAGE—100_
•:
CITIES
i
Clothing
,*• ^DEPARTMENT STORE
535,500
MODERATE
fOOdS
All
11,934.000
950,000
tons)
(net
LARGE
—
Dairy products
June 24
FOR
IN
Eggs
June 24
Pennsylvania anthracite (tons)—
Beehive coke (tons)——
of month
FAMILIES
All items
COAL OUTPUT
Bituminous
tons).*
1935-1939=109—As of May 15:
-;t'f
(U. S. BUREAU OF MINES):
coal and lignite (tons)—
(net
Oven coke stocks at end
CONSUMER
————
Federal
r
1,747,700
667,761
——
construction
and municipal
700,164
802,941
INCOME
construction
5,814,400
718,111
780,959
construction
8.
6,349,900
5,662,620
*424,459
,
805,680
June 29
ENGINEERING CONSTRUCTION
U.
*6,087,079
448,252
(net tons)
810,152
RECORD:
Total
MINES)—Month of May:
June 24
June24
„
'imVIL
IN THE
BRADSTREET,
tons)*—
(net
coke
Oven
(NEW)
&
May
(BUREAU OF
Production
ASSOCIATION OF AMERICAN RAILROADS:
Revenue freight loaded (number ox cars)
;
Revenue freight received from connections (number of cars)
of
INC.—Month
.
Round-lot purchases by dealers—
Number of shares——
Factory sales of dryers
PORTLAND CEMENT
214,000
31,600
19,500
16)122
(units)
333,072
27,400
Factory sales of washers (units).
Factory sales of ironers (units)
25,140
3,910
(BUREAU OF MINES)—
Month of May :
Production
19,950,000
(bbls.)
Shipment from mills (bbls.)**—*
Stocks (at end of month) (bbls.)
Capacity used
18,088,000
22,834,000
18,375,000
20,043,000
—
*—*
*22,928,000
85%
—
18,622,000
19,426,000
22,170,000
86%.
SELECTED INCOME ITEMS OF U. S. CLASS I
(Interstate Commerce
March:
RYS.
Commission)
—Month of
fcfuolesale prices new series
u.
—
s.
dept.
qf
Net
labor—
1926=100:
Other
: AH commodities
,
.**___
I?
Uvestrtrk"
~
~~
"
*JUn®
—June 27
*
'
commoditim .other
than farm
Building, materials—
1j
and allied products*
♦Bwised figure.
--.--ZZ:
Ulncludes .828,009. barrds
166.0
169,3
217.5
Miscellaneous
153.5
166.2
167.5
16632
167.9
17L9
151.2
Income after fixed charges
Other
Income
availaole
for fixed
'
ZZZZ I
'
208.2
161*5
160.5
238.7
225.1
148.6
148.3
147.7
145.4
136.3
13S.9
135.6
139.2
Federal
133.0
133.1
132.9
129.9
Dividend appropriations:
173.1
173.0
171.3
166.9
201.2
*201.1
199*6
191.4
June 27
114.2
113.9
116.0
116.6
otJmiiTlru7e~i^
:
-
-
deductions
20,983,673
14,308,456
23,214,687
4,133,401
0.82
2.28
49,436,602
Net income
34,920,312
Depreciation
Income
taxes
—
common
17,350,913
83,453,573
2,847,313
80,606,260
3,100,845
42,157,561
1,357,574
23,897,270
^
stock—
On
On
preferred stock
Ratio of income to fixed
•Revised.-
33,111,890
11,555,049
4,945385
(way &c structures & equip.) _*
Amortization of defense projects
—
jZtlr
3,161,444
§9,301,457"
34,842,685
1,374,594
9,630,674
3,315,603
229.4
162.5
27
45,258,406
1,317,026
31,548,927
—
224.0
JSSp
§6,140,013
4,616,875
87,548,734
52,752,210
charges
*241.0
June 27
%'
$66,102,660
92,165,609
deductions from income*
156.8
162.7
~
~
;
157.1
$15,236,247
15,265,580
30,501,827
2,613,449
27,888,378
16,459,294-
V,
Textile products ——
Fuel and lighting materials
Chemicais
157,0
$75,706,315
—
241.8
and" foods!~
Metals and metal products
t:
—
income
—j«ne 27
—
All
operating income
Total income
*
.
^EL0ducts
i>
railway
**.
:
charges—1**__*.-^
tlncrease—all stocks.
^Deficit.
,
2.52,
Number 4922
Volume 172
Continued
jrom
page
.
.
The Commercial and Financial Chronicle
.
(97)
what
4
kind
cilities
this
problem,
want to
their regular
cilities to assure adequate cover-
tivities and
age.
business.
evidenced by ini e s, loan applications, and
granted by the bank, indias
programs,
i
q u
r
'Joans
cates
unsatisfied
an
credit
the
on
for
demand
part of small busi-
which, while it may not be
large in terms of total dollar volness
ume, is none the less real.
the loan terms under these
While
special
include
have varied from one
another, they generally
(1) maturities up to 24
months
on
programs
bank
to
miscellaneous
loans,
availability of shortcredit may encourage businessmen to rely on it
too heavily, even using it to finance
long-term
needs. Should
profits decline or credit conditions
become
tighter, they may then
find themselves in serious financiai difficulties. What these small
businesses really need is financing
that will not be too burdensome
when the going gets temporarily
rough—in other words, equity capEasy
(3)
medium-term
or
and
ital
long-term
credit.
of
riety
fi-
including
purposes,
of working- capital requirements, payment of taxes and
trade
indebtedness, purchase of
nancing
and equipment
conbuildings,. and ac-
machinery
of
struction
quisition of partnership interests,
The number of different
types of
business represented by borrowers
as
surprisingly large — one bank
me
a
listing which showed
outstanding to small busi-
"u^ntiy
in
industrial
different
38
trade
from
ranging
groups,
advertising, drugs, and furniture
to radio supplies, stove manufacluring, and wholesale plumbing.
Among the borrowers were candy
jobbers, hardware stores, jewelers,
used
car
dealers, electrical contractors, truckers, surgical supply
„v°
rnemion
mention
just a few among many.
th
small
of
strUments
revealed
business
small
with
the
known
are
that
services
banks
offer,
can
or
different types of credit
available to meet business needs.
the
with
In
instances, the banks found
that small businesses were seeking
some
managerial advice
as
much
as
they
and
;T*
it
businesses,
available to small business should
eventually
be
in
outlined
bank
credit
before
bills
the
you.
The experience of similar insti¬
where
tutions has made
it abundantly
the outclear
that substantial
capital is
or
on
if the newly formed in¬
Neither stoc
or^ ~
n'an9,lrJ£ ?
?jL „man huci
vestment
companies
nessmanisS looking for
"f l^ds and nreferred
operation.
KT
f
^praScal
The sale
stock is
except
to
generally impractical, except to
Qu-ntly>
^ ^/^sinessman
doesk "xhe^Tle
0
ousinessman
tne small
of
common^tock
outsitos,'unless to inTtutions
^uthorjzed t0 partici.
especially
on a
limited basis, means that
businessman
small
the
will
have
share the control of his business
perhaps relinquish
with others, or
control.
sons
small
Most
their
value
_that is
one
businessmen
independence highly
of the primary rea-
why they g0 int0 business for
Debt
thpm selves
mav
Drove
^ financial"strTft-jaXet"
be
of
times
economic
to
in
adversity.
thst
.hit
(6) The tradtional suppliers of
^nnrie
not adaptable to
situation.
At the
®qul£,?.ndh,
w'Vd"f
rbe f™llv or ?be^cal finTctr-
cJetermined
wss
with confidence in what financial
of
deficits during
are to avoid
their first years of
two
why in¬
established
to
provide equity capital and longThere
are
stitutions
reasons
newly
credit to small
term
business may
deficits.
In the
first place, maintenance of an ade¬
quate technical and administrative
staff to review applications, grant,
and service equity capital or longterm
loans, and to provide cus¬
tomers with such managerial and
incur
operating
technical
advice and assistance as
require will mean sub¬
stantial payroll and overhead ex¬
pense.
In the second place, it will
take time for a newly established
institution of the type envisioned
they
may
to
invest
of
its
any
sizable
resources
businesses.
others
high levels of pro¬
employment.
There
in
proportion
small
Therefore,
private
if deficits
to be
avoided, the initial cap¬
ital should be large enough to per¬
mit
coverage
of operating
ex¬
penses through income from tem¬
are
existing
investment
cilities.
I
do
not
banking
share
fa¬
this
ap¬
prehension.
The
type institution woul<*
new
have
to
funds
by
or
supplement
capital
its
borrowing from banks
capital market at market
of interest.
On the basis of
in the
rates
feature
this
it
alone,
not
could
compete in its charges with rates
From the beginning, we have of interest which
banks, using de¬
thought that the approach through positors' funds, can charge their
these new institutions should be customers.
In addition, both the
experimental. No one can predict credit appraisal and risk costs of
a
necessary
'
in
unfamiliar
were
various
commercial
a
in
those engaged
cases
is
community
the
jn
e^er
these pate
by
that
elicited
Inquiries
programs
number of
sustained
to
duction
contribution
maximum
i^e
sent
and
will
explore all possibilities, for
against, it is desirable that their
privately owned. managements be given ample lati¬
Such a new institution, however,
tude to meet effectively and flex¬
would have to
be
experimental ibly the varied
financing needs of
because its operations would in¬
small business.
(4) Small business concerns do
They should have
volve
a
substantial
element
of
not
have
access
to
equity and
authority to purchase preferred or
risk.
Under these circumstances,
common
stock in small business,
long_term borrowed capital in the
I think it very doubtful that cap¬
to
extend
way that large companies do. For
long-term credit on
ital in sufficient amounts for an
such terms and conditions as indi¬
one
thing> the costs of preparing
effective trial would be subscribed vidual
circumstances
an(j marketing a small equity or
may
war¬
long_term debt issue are prohibi- initially by usual private sources. rant, including participation with
»jyp
Fnr another
there is fre— Therefore, I have concluded that
banks, or to undertake package
the most practicable solution is to
financing in which both equity
neither a new
marhave the initial capital of the in¬
and
^et nor a secondary market tor
long-term
credit are com¬
vestment companies advanced as
bined.
the equity or long-term debt inThey should also have au¬
Joans
nesses
Congress
the
to
important to the maintenance
of our system of competitive free
enterprise
that
small
business
its
if these institutions
profitability, owner¬
ship will
not
pass
to
private
hands.
Given time to develop a
useful pattern of operations and
to grow, there are some grounds
for believing that this new type
of institution may play an impor¬
tant supplementary
role in our
private financial organization.
their
great deal to be said in favor areas they will prove successful.
testing
experimentally
the We would favor
starting off with
feasibility of any proposed solu¬ enough of them to gain experience
tion that appears to be sound.
and to test their potentiality. The
As a believer in a private free sound approach is to feel one's
enterprise economy, I feel very way and to learn how to meet the
strongly that any new institution over-all problem most effectively.
especially established for the pur¬
In view of the difficult oper¬
pose of making equity capital and
ating problems that the proposed
More- long-term
credit
more
readily new
institutions
will
be
up
and up to 5 years on loans for over, they often need more equity
equipment and other longer-term capital in order to qualify for
needs; (2) repayment of principal short- and intermediate-term loans
and
interest
in
regular
instal- from banks,
ments; and (3) flexibility as to
security depending on the circumstances of the particular case. The
Joans have been granted for a va-
solution
it is
make
why,
reason
prove
workable
and
sound
Aid to Small Business
business lending acdesigned for small
The response to these
fa¬
supplementary
Facilitating the flow of equity
capital into small business chan¬
nels is undoubtedly the most dif¬
ficult -problem.
In
seeking
a
Federal Reserve Views Credit
are
of
needed.
are
37
an
institution
specializing in leng-
term capital and credit would ruf*
much
higher
the
in
case
on
of
the average than
commercial banks
which make shorter-term and bet**
ter-secured loans.
this
The
success
o#
type institution woul<§
largely on its effective¬
new
depend
ness
in working
cial
banks
through commer¬
supplementing
they are able-
in
and
facilities which
the
to offer small business customers
I should like to stress particu¬
larly the point just made that the*
of
success
the
largely on
working
banks.
its
will
effectiveness
local
ill
commercial
through
The
unique
invest¬
depend
type
new
institution
ment
bank
is
in
position
to discover ami
evaluate investment opportunities
such
for
institutions,
bank
itself
alone
to
is
extend
even
in
not
if the
Vf'
position
a
direct
long-term
Moreover, the
strategic posi¬
thority to supply technical assist¬ tion to handle the servicing awl
ance
on
a
reasonable fee basis supervision of longer-term invest¬
where
lack
technical
of
phase of
skill
in
applicant's op¬
erations seems to be critically re¬
lated to his financing problems.
In other words, the proposed in¬
stitutions must be in a position to
tailor the assistance which they
supply in accordance with the
type of problem which is pre¬
sented
by„* the individual • small
business
approaching
them
for
help.
some
From
advice which various
the
bankers have
tant
investment
proposed
would
given us, an impor¬
the business of the
of
part
an
institutions
package financ¬
represent
aid to the business.
local banker is in
of
ments
the
a
The
credit
tration
in
if
helpful.
institution,
new
such assistance is deemed
analysis and adminis¬
which the local
banker ia
position to provide cannot be
duplicated elsewhere under exist¬
ing financial mechanisms.
a
As
for
lished
ties,
competition with estab¬
investment
banking facili¬
these facilities
adapted
to
long-term
business.
meet
credit
are
the
not
now
equity ami
needs
of
small
This fact, which is gen¬
erally admitted and fully substan¬
tiated
by
objective
evidence,
ing.
Such financing avoids the constitutes the principal case for
pledge of all of a borrower's as¬ providing for new, specialized in¬
sets as a security loan, thus leav¬
vestment facilities for small busi¬
ing him in a position to obtain
short-term
financing
from com¬
if necessary.
One
banker told me that he knew of a
mercial
number of
ing'
ness.
banks
small
which
cases
business financ¬
could
made
be
Thiers leads Dept.
For laole in Philsw
some additional equity
equity and
long-term
debt
be provided.
He indicated
PHILADELPHIA, Pa.-Bache
same
time
banks
were
able to ™
that
his
bank, and he thought
Co., members of the New York
porary investment in government other
banks, would want to co¬
Stock Exchange and other stock
manv
which
tant in the local financial picture, securities.
operate closely with the new in¬
I think it is essential that defi¬ vestment institutions in working and
commodity exchanges, an*
nite provision be made for trans¬ out
constructive
nancing.
financing pro¬ nounce the appointment of John.
due -n part to tax considerations.
fer of the ownership of the new grams for promising small enter¬
A.
Thiers as manager of
Appraisal of Conflicting Views
Also, it is due in part to a change institutions to private hands as
their
prises.
It is difficult to give a^atisfac- in investment preferences of indimutual funds department in the
quickly as possible.
This is im¬
Finally, there is the problem of
portant because the new type of adequate earnings for the new Philadelphia
office,
J 21
Soufk
institution, if it is to become a type of investment institution in Broad Street.
permanent part of our private view of the costs and risks of
economy, should compete for its
Si
financing small businesses. The
cilities?"
I do not subscribe to
and other hi«hly liquid as" funds in the market place. The riskiness of the business in which
the
was
particular
j
iAn/t
^ f™"Z0r-
1^=°'
could
liatTm-ev?*
concernf
ouslj
bankable if
or
been unable to
obtain fll
kdtrj?ditSnfe^
extremists'
views
side
either
on
s
„
.
(?) There are very few msticalled statistical facts cited in sup- tutions in existence equipped to
port ofsupply small business with both
are
long-term credit and equity capiopinions that al&g|fi(ftaiWeeds tal. There are undoubtedly, many
lor bank credits are adequately cases in which some combination
served, banks that^fta^ receritly of equity capital and long-term
undertaken to e#^Sfhe.iffeld credit would prove more suitable
have
discovered
ari
'ytns^tfsiied than either one by itself. To meet
group of borrowers., At this stage, such
needs, financing must be
however, there is hb, way ti^Sliying tailored to the requirements of
of the
how
t
I
Many of the so-
question.
big that
~
u
_
would
eac^ individual business, and not
grotSp^is.
,
sum
up
he
,s
offered in exactly the same form
tutiti
take-it
or
leave-it basis to all
tms way:
u.
u
comers.
pockets in which,
for one reason or another, exist- Some
problems
in
ing financing facilities do nottfully
Special
Financing
There
meet the needs of
c,
,
small business.
,
,.
r
Short- and mediumrterm financing
generally
(2)
great
some
_
.
Establishing
Institutions
.
a
free
The
S. 2975
new
enterprise economy.
qUestjon which Congress will want
^ wejgh jg what kf„d o{ £olution
foj™^y..^BH,,wjj] prove m0st constructive. I
sure
: to-^e private
the
necessary
investigating
provisions of S. 3625 and
stipulate that the proposed
companies may
providing
tC°"greSS wi" waf
fa- The main question before you
is
application,
an
small long-term loan,
a
managerial
such
technical assistance
as
may
or
be re¬
investment
organized by the Federal Re¬
Banks, who in turn may also
provide part or all of the initial
capital when necessary.
With the
Federal Reserve System providing
launch
these
institutions
and
to
determine whether they could op¬
erate
profitably.
quired, and assuming the attend¬
ant
risks.
We heartily ap¬
Participation
through
in the
gains of
equity financing
successful ventures will be an es¬
sential to
Various
costs of
offset the high
as
well as losses.
critics of the
proposed
legislation have expressed appre¬
that
hension
the
suggested
"M
new
prove
which
ticularly the smaller banks, have mercial and industrial borrowers, vestment
developed
of
servicing
the provisions in these bills
stipulate
onstrated- 'Iheir—willii'igness
banking system to banks and other that commercial
private institu¬
provide such credit for the latter continue to provide short- and intions and individuals may at any
group. However, many banks, par- termediate-term
credit to com- time purchase stock of these in¬
not
cannot
If this summary poses the prob- the initial capital, sufficient op¬
fairly, as i think it does, the erating funds would be assured to operation
pre^Wt&no
Sal
proposed
engage
lem
problem, except
localities and
inconsistent with the precepts
and
of
serve
are
the
institutions would
be too
strongly
emphasized.
If
the
institutions
is much sounder than the use of are to
perform a useful public
public funds for risk financing of service, they must be prepared to
private enterprise. Continued pub¬ incur losses.
The interest rate on
lic financing of private concerns
loans may be prohibitive if it is
in competition with other private
set high enough to reimburse costs
concerns
is unsound in principle
be
.
(1)
judgment of the market place may
not always be acceptable to the
individual business concern, but it
institutions
Federal Reserve Banks.
from
the
We see no
of
type
investment
would
constitute
threat,
on
the
one
a
institution
competitive
hand,
to
the
existing commercial banking sys¬
tem
and,
on
the
other,
to
our
mZZaZZZJglSSSSSSSSSSSFl.'
••
38
The Commercial and Financial
(98)
Chronicle
•
Securities Now in
Aeroquip
(par $1),
of which 16,455 shares are offered by the company and
the remainder by 45 selling stockholders.
Underwriter
—Watling, Lerchen & Co., Detroit. Price—To be filed
by amendment. Proceeds—To pay for construction of a
Business
plant for production and storage use.
new
—
Flexible hose lines.
Alabama
Gas
Corp.
June 12 (letter of notification) 1,479 shares of ($2 par)
commdn stock, at $8.30 per share, being offered pro rata
to stockholders of record June 27; rights expiring July
Natural Gas Co., parent will
Southern
19.
subscribe for
No underwriter.
118,759 additional shares.
improvements.
Proceeds to
construct
Electric
Alliec'
B
June 23
(letter of notification) 35,000 shares of common^
stock to be offered at ($1 per share).
No underwriter.1**
Proceeds to develop mine.
Address—Box 392, Wicken¬
burg, Ariz.
Canadian Superior Oil of
California, Ltd. (7/17)
stock (par $1;.
amendment. Underwriter—Dillon,
Proceeds—For geological and drilling
Inc.
Co.
Products,
(7/13)
Inc.
Canam
June
Altuda
28
Inc., Gila Bend, Ariz.
50,000 shares of capital
No underwriter. Proceeds for
Mines,
(letter of notification)
at
stock
$1
share.
per
mine development.
•
American
Alliance
Aluminum
Corp.
Smelting
June 20
(letter of notification) 30,000 shares of common
(par $1).
Price—$10 per share.
Underwriter—
stock
Proceeds—For
None.
ations.
American
offered
be
to finance oper¬
Office—1107 American Bldg., Seattle, Wash.
June 28 filed
Motorists
Insurance
stockholders of
to
record
ceeds—For
Casualty
Co., Chicago
(par $5) to
July 25 at rate of
general
insurance.
American
Rock,
corporate
Price—At par.
Pro¬
Business—
purposes.
Television, Inc., North Little
Ark.
Underwriters—Gearhart,
Kinnard & Otis, New York
City. Proceeds—For-additional working capital. Office,
—Fifth and Cornish Streets. No. Little Rock, Ark.
Ampal-American Palestine Trading Corp.
April 10 filed $3,000,000 of 10-year 3% sinking fund de¬
bentures.
Underwriter
Israel Securities Corp., New
York. Proceeds—To increase working capital to be used
for enterprises in Israel. Business—Developing the eco¬
—
nomic
of Israel.
resources
Arkansas
Power
&
Light Co.
May 23 filed 155,000 shares of cumulative preferred stock
(par $100). Proceeds—To be applitd to (a) redemption
on
Aug.,1, 1950, at $110 per share plus dividend ac¬
cruals, of all the 47,609 shares of outstanding $7 pre¬
ferred
and
45,891
shares
Arkansas Western
Gas
Co.
May 2 (letter of notification) 28,948 shares of
No underwriter.
—28 E. Center
•
Berven
June
27
None.
of
one
share for each nine
Proceeds for construction.
now
Office
Street, Fayetteville, Ark.
(letter
of
notification
Price—$137.50
1,000
per
shares
share.
of
capital
Underwriter
Proceeds—For additional working capital and to
Office—301 Golden Gate Ave., San Fran¬
notes.
common
shares
Co.
(7/12)
Jrne 14 filed 179,833 shares of capital stock
(par $7), of
which 120,833 will be sold to the
public and 59,000 of¬
w
I be
employees.
sold
Of the total offering, 91,333 shares
by the company and 29,500 by three stock-
stock
share).
per
additions
240
•
of
stock,
notification)
(7/12)
shares of series A cumulative con¬
vertible preferred stock (par $50) to be offered to com¬
mon stockholders of record July 12 on basis of one pre¬
ferred share for each 12 common shares held; rights ex¬
ment,
Calif.,
and
conversion
dial
to
operations.
Color
Office—
stock (par $1).»
mon
•
Flint &
in
field
of
smelting
and
heating-treating of metals.
•
Consolidated
Engineering Corp.,
Pasadena,
•
California
June
ize
for
each
10
held
July
on
with
12
Front
scription privilege; rights to expire about July 27.
derwriter—To be
offering price.
of
named
in
an
stock
to
an
stockholders
Un¬
•
General Radiant Heater
was
tising
Continental Copper & Steel Industries, Inc.
•
(letter of notification) 18,750 shares of common
(par $2) and 1,500 shares of 5% cumulative pre¬
stock
P.
W.
(par $25), to
claims
Brooks
amounting
&
be issued
to
Expected
Shoe
filed
next
Research Associates, Inc. '(Pa.)
(letter of notification) 12,000 shares] of common
(par $1).
Price—$10 per share.
Underwriter—
to be offered on a share-for-share basis
(par $1)
General
to
be
one
-
by
Jackson
June 27
to
share
will include
filed
199,350 shares of common stock (par $20)
offered
new
of W. L.
Telephone Corp.
12 filed
June
Dental
Corp., Nashville, Tenn.
32,885 shares of common
maximum of
a
exchange for outstanding preferred stock
Douglas Shoe Co. No underwriter.
!
May 24 filed 400,000 shares of common ktock (par 50
cents). Underwriter—Max Wolberg, a director of com¬
pany.
Price—$1 per share. Proceeds—For development
of tonnage and mining and shipment of ore,
•
etc.
in
\
i
Co., Inc., New York.
30
stock
Underwriters—
Cristina Mines, Inc., N. Y. City
capital,
working
research,
General
June
(to satisfy
at par
$75,000).
Co., Inc.
week.
-•
June 30
certain
Price—$1.25 per share. Under¬
Co., New York. Proceeds
operating capital. Expected week of July 10.
$1).
(par
May 3 filed 170,000 shares of common stock (par 250).
Price—$3 per share. Underwriter—Mercer Hicks Corp.,
New York. Proceeds—For plant and warehouse, adver¬
underwritten by a group headed by Morgan Stanley &
Co. Price—Expected to be not less than $33 per share.
Proceeds—For construction.
(7/10-14)
writer—Blair F. Claybaugh &
offering of 454,457
common
Inc.
Range Mines,
capital stock
—For
amendment, along with
Five months ago
common
Telephone Co.
(letter of notification) 100,000 shares of common
June 2
oversub¬
an
(Ala.)
plant, lines and other telephone facilities.
Power
Co., Jackson, Mich.
June 23 filed 499,903 shares of common stock (no par)
to be offered present holders at the rate of one new
share
Florala
(par
(letter of notification) 1,200 shares of 4% cumu¬
lative preferred stock.
Price—At par ($25 per share).
Underwriter—None. Proceeds—To extend and modern¬
(letter of notification) 200 shares of common
stock (par $1) to be sold directly to Armand F. Dufresne
upon exercise of stock option. Price—$5 per share. Pro¬
ceeds—For working capital.
*
Consumers
stock
preferred
June 29
27
an
common
for
each
stockholders
six
in
shares held.
oversubscription privilege.
the
The
ratio
of
offering
Price—To be
amendment.
Underwriters—Paine, Webber,
& Curtis; Stone & Webster Securities Corp.
and
tional
Proceeds—For
working
capital
Diamond
Lil
and
operating
Corp., Las Vegas,
Diana
Nev.l
Proceeds for construction
Stores
and
Corp.
furnishings.
,
common
1950, at an average price of $8.37% per share and the
remaining 5,500 shares will be offered at market (esti¬
mated at $7.75 per share).
Underwriter—Hardy & Co.,
New York.
Proceeds—To selling stockholder.
Exploration
(Western)
Ltd.,
Toronto, Canada
Jan. 30 filed $10,000,000 of notes, due 1960,
,
financing
of
new
postponed.
(letter of notification) 12.200 sharps of
Dome
Mitchum, Tully & Co. Proceeds—To purchase addi¬
common
stock of operating subsidiaries, and to;
make
advances to these companies pending the per-C
manent
' .*•
-
stock, of which an offer of rescission will- be made of
6,700 shares heretofore sold during February.sand March,
$100), 500 shares of second
preferred stock (par $100) and 5,000 shares of common
stock (par $1).
Voting Trustee—Matthew McCartin of
Flushing, N. Y., and four others.
Business—Research
June 28
offices
certificates for 1,612 shares of
capital.
•
Private Wires to all
Inc., N. Y. City
first
underwriter.
Chicago
Underwriter
ceeds—For offices and equipment, expenses and working
(letter of notification) 30,000 units, of unspeci¬
fied type of security, to be offered at $5 per unit. No
Cleveland
Horner Co.,
June 29 filed voting trust
Pro¬
June 23
Pittsburgh
Price—$1.25 per share.
1421 Chestnut Street, Philadelphia 2,
Pa., will act as financial adviser.
Proceeds—To be
added to general funds. Office—595 Fifth Avenue, New
York, N. Y.
—Carstairs & Co.,
Under¬
tshare.
„
Fleming-Hall Tobacco Co., Inc., N. Y.
June 30 (letter of notification) 180,000 shares of com¬
Combustioneering Inc., Cincinnati, Ohio
June 5 filed 30,000 shares of class A capital stock.
writer—None named as yet.
Price—$100 a
"r"f'
•
Proceeds—For further design and devepolment of tele¬
vision equipment. Offered—To public on June 29.
•
San Francisco
Pa.
,
4.
Television,
expenses.
Boston
Wilkes-Barre,
public. Underwriter—None. Proceeds—For working
capital, remaining $28,000 being offered to six creditors
in payment of debt. Office—421 No. Pennsylvania Ave.,*
Wilkes-Barre, Pa.
* '
Inc., San Francisco, Calif.
June 22 (letter of notification) 16,000 shares of class A
convertible preferred stock.
Price — At par ($10 per
share).
Underwriter—Hooker & Fay, San Francisco.
None.
Philadelphia
Inc.,
to
stock
NewYork.
Airflow,
April 20 (letter of notification) 79,050 shares of common
stock (par 50 cents) to be offered first to common stock¬
holders.
Price—$1 per share to stockholders and $1.25
plant
W. Monroe St., Decatur, Ind.
additional working capital.
and for
Fleetwood
4M>%
($100
Proceeds—Fpr
Underwriter—None.
filed 103,402
pected to expire July 28. Price—To be filed by amend¬
along with dividend rate. Underwriter— Smith,
Barney & Co., New York. Proceeds—To pay promissoi"/
note, to complete purchase of a new plant at El Monte,1
A
par
shares* of
Price—At
share, with
Fedders-Quigan Corp.
IndT^
3,000
non-convertible.
notification) 100,000 shares of common
to be offered at 50 cents per
(par $1)
June 21
per unit.
Underwriter—Emory S. Warren
Co., Washington, D. C. Proceeds—For general funds.
Office—1707 Eye St., N. W., Washington, D. C.
(letter
Buffalo 2, N, Y.
Consolidated Mining Co.
property and cover costs of incorporation.
stock (par 25 cents), to be sold in units of three
A stock and one share of class B stock.
27
Avenue,
(Mont.)
10,000 additional shares to be issued to agents as com¬
mission.
No underwriter.
Proceeds to develop mining
Price—$44.50
April
(letter of notification)
Elliston
&
ferred
(Wm.)
Delaware
28
June 20 (letter of
III.(
1,000 shares of class B
and
(Del.)
4,400 shares of common
(no par).
Price—$10 per share. Underwriter—Proceeds—For additional working capital. Office
•
Plate Co., Chicago,
Alloys Corp.
—344
resources
150,000 shares of common stock
stock, (par $12.50)
Electro Refractories &
stock
of class
•
fered to
mineral
if:
Corp.
filed
7
None.
Indefinite
Citizens Credit Corp., Washington, D. C.
2 (letter of notification) 3,000 shares of class
stock
Cameron
develop
Dec. 9
June
cisco, Calif.
Bettinger Enamel Corp., Waltham, Mass.
June 28 (letter of notification) 59,576 shares of common
stock (par $1).
Price—$3.50 per share.
Underwriter—
None.
Proceeds—For
working capital.
Office—Gore
and Grove Sts., Waltham, Mass.
•
(par $1),
of which 50,000 shares are to be sold by company and
100,000 shares by three stockholders. Price—To be filed
by amendment. Underwriters—F. Eberstadt & Co. Inc.
and Shillinglaw, Bolger & Co.
Proceeds—Proceeds to
company, together with term loan of $1,000,000 from
insurance firm, will be used to pay existing long-term
obligations and the balance to be used as working capital.
shares
Carpets Corp.. San Francisco, Calif.
stock (par $100).
repay
common
(par $6) to be offered at $10 per share to holders
ot warrants at the rate
held.
16 filed
of
outstanding $6 preferred;
and (b) the carrying forward of the company's construc¬
tion program.
Bids—Received by company up to noon
(EDT) on June 19, but rejected. Only one bid was made
of $100,003 per share, with a $4.95 dividend from Lehman
Brothers, Equitable Securities Corp. and White, Weld &
Co. (jointly). Statement effective June 12.
stock
Caspers Tin
preferred
(letter of notification) 301,686 shares of com¬
stock (par 10 cents).
Price—75 cents per share.
mon
Proceeds—To
Citizens Telephone Co., Decatur,
Radio &
16
June
underwriter.
common
100,000 shares of capital stock
share for each three held.
new
one
working capital
shares."
Steel
Eastern Stainless
June
share; the remainder are registered as "bonut
Underwriter—Reported negotiating with nev
City. Proceeds—To repay bank loans and accounts pay¬
able, for machinery, equipment and other corporate pur¬
•
C.
80 cents per
Statement effective
June
B.
Vancouver,
Aug. 29 filed 1,000,000 shares of no pax value commoi.
stock.
Price—800,000 shares to be offered publicly at
preferred share and one-half share of common at $7.50
per share; remaining 20,000 common shares at $4.50 per
share.
Underwriter—Hill, Thompson & Co., New York
Statement effective June 23.
Ltd.,
Mining Corp.,
in the second year,
2%
year,
100,000 shares of capital stock (par $5) to
bejpffered to stockholders at the rate of one new share
for" each
three
held, with oversubscription privilege.
Underwriter—Allen & Co., New York. Price—To be filed
by amendment. Proceeds — To pay bank loans and for
working capital. Business — Stainless steel plates and
sheets. Offering postponed.
operations in Canada.
May 24 filed 160,000 shares of 45 cent cumulative con¬
vertible preferred stock (par $6) and 100,000 shares of
common
stock (par $1), to be offered in units of one
poses.
'■
June
Price—To be filed by
&
first
the
thereafter, and 249,993 shares of capital
Western Canada.
June 27 filed 2,150,000 shares of common
Read
ADDITIONS
Co.)
Underwriter—None. Proceeds—For general funds.
Business—To develop oil and natural gas properties in
Ariz.
Wickenburg,
Mining Co.,
Thursday, July 6, 1950
and
stock (par
$1;. To be sold to 17 subscribers (including certain part¬
ners of Carl M. Loeb, Rhoades & Co., State Street Invest¬
ment Corp. and
State Street Research & Management
in
1%
at
offering to public; $16.95
per share for stock to employees.
Proceeds—To reduce
a
loan and for general corporate purposes.
Business—
Distributor of building materials.
' Camp
.
SINCE PREVIOUS ISSUE
3%
—To be filed by amendment on
•
.
INDICATES
Registration
Underwriter—Reynolds & Co., New York. Price
holders.
Mich.
Jackson,
Corp.,
162,010 shares of common stock
filed
June 21
.
]
j
^rith interest
construction.
Temporarily
'
••
Geneva Telephone Co.,
Geneva, Ohio
June 13 (letter of notification) $25,000 of 15-year 3%%
series A first mortgage bonds, due 1964. Underwriter—
The Ohio Co., Columbus. Proceeds—To purchase equip¬
ment. Price—Expected at 101.75. 1
•
Georgia Pacific Plywood & Lumber Co.
27 (letter of notification) 4,000 shares of common
stock (par $1).
Price—$14.50 per share. Underwriter—
Reynolds & Co., New York. Proceeds—To selling stock¬
June
holder.
Globe
Hill Mining Co., Colorado Springs, Colo.
(letter of notification) 5,885,000 shares of com¬
mon stock.
Price—At par (one cent per share). Under¬
writers—George C. Carroll Co., Denver; Inter-Mountain
May 26
Volume 172
Number 4922
.
.
.
The Commercial and Financial Chronicle
(99)
Shares, Inc., Denver; and M. A. Cleek, Spokane, WdStt.
•
Proceeds—For mining equipment
June 23
Haloid Co., Rochester, N. Y. (7/7)
June 16 filed 47,183 shares of common stock
to be offered common stockholders of record
39
stock
basis
of
will
one
expire
Corp.
Price—To
filed
be
by
amendment.
stockholders.
Front Range
($1
to
Cincinnati, Ohio
Noon
sold
to
purposes.
present stockholders. Price—At par
(par
$1).
Morgan & Co.
Price—$4
per
share.
Underwriters—
Proceeds—To buy
raw
common
rial
Office—2034 E. 48th St., Vernon, Calif.
stock.
Inc., New York.
ceeds—To
Underwriter—P.
W.
Brooks
&
Pro¬
mortgage, buy machinery and for addi¬
working capital.
Business—Stampings and as¬
semblies for automotive, refrigeration, household
appli¬
pay
Southern
and other industries.
Industrial Television,
Inc., Clifton, N. J.
28 (letter of notification) 200,000 shares of com¬
mon stock
(par 10 cents). Price—$1 per share. Under¬
writer—None. Proceeds—To buy
machinery and equip¬
and
•
Mutual, Inc., Minneapolis, Minn.
1,000,000 shares of capital stock (par $1).
Underwriter—Investors Diversified Services, Inc., Minne¬
apolis. Business—An investment company.
Kauai
June
Engineering Works, Ltd., Lihue,
(letter of notification) 98,000 shares
23
stock
mon
(par
$1).
Price—$1.10
share.
per
writer—Ross & Co., Box 2665,
Honolulu, T. H.
—For
working capital.
of
Co.'s Address—Box 1589, Lihue,
(7/11)
June 2 filed $3,500,000 of first
mortgage bonds, series C,
due July 1, 1980. Underwriter—For the
bonds, to be de¬
termined by competitive bidding. Probable bidders: Hal-
Stuart & Co., Inc.; Kidder, Peabody & Co.; Union
Securities Corp. and Merrill
Lynch, Pierce, Fenner &
Beane (jointly); Equitable Securities
Corp.; Blyth & Co.,
Inc.; The First Boston Corp. and Lehman Brothers
sey,
property additions.
11
a.m.
(CDT)
Proceeds—For
Bids—For bonds to be received until
July 11 at Room 2154, 20 No. Wacker
Drive, Chicago 6, 111. Statement effective June 29.
•
on
Kentucky Water
Kentucky
Service
June 23
(letter of notification)
mulative preferred stock (par
Co.,
inc.,
Louisville,
•Southern
Co., 11:30
per
Price—$27.50
Marine
Base, Inc.
(letter of notification) $25,000 of 10-year 6%
debentures due Jan. 1, 1960, and 2,500 shares of com¬
mon stock (par 20
cents), to be offered in units of $1,000
29
of debentures arid 100 shares of
per
unit.
York.
Dowling
&
at $1,000
Co.,
New
Office—Lake Hopatcong, N. J.
Leadville
Lead Corp., Denver, Colo.
(letter of notification) $17,000 of first mortgage
(convertible into common stock at rate of 133
June 27
notes
shares
for
each
$100
note
prior to July 12, 1950). No
underwriter.
Proceeds to pay mortgages on
machinery.
Office—509 Kittredge Building, Denver
2, Colo.
Road, Fort Wayne, Ind.
•
Market
Wholesale
Grocery Co.,
Los Angeles,
California
June 19
(letter of notification) 5,000 shares of preferred
(par $50) stock and 5,000 shares of common stock (par
$10) in units of one share of preferred and one share
of common stock at $60 per unit. No underwriter. Pro¬
ceeds for working capital.
Office—1600 E. 6th St., Los
Angeles, Calif.
•
Maxon, Inc., Detroit, Mich.
(letter of notification) 1,000 shares of 6% cumu¬
lative preferred stock (par $50)
and $200,000 of 7%
June 22
bonds
(in
units
of
each).
$200
chase
Price
Underwriter—None.
—
At
stock
(par 10 cents).
—None.
Price—$1
per
share.
Underwriter
Proceeds—For
porate purposes.
working capital and general cor¬
Office—630 Fifth Avenue, New York 20,
New York.
Louisiana Power & Light Co.
May 23 filed 90,000 shares of preferred stock (par $100).
Proceeds—To be used to redeem, at $110 per shart
plus
dividend accruals, the 59,422 shares of outstanding $6
preferred stock, and for construction and other purposes.
Bids—Received by company up to noon
19,
but
rejected.
Three
bids
were
(EDT)
made
as
on
June
follows:
Union
Securities Corp., $100.40 per share with a $4.65
dividend; Blyth & Co., Inc., and Equitable Securities
Corp. (jointly), $100.10 with a $4.65 dividend; and W. C.
Langley & Co. and First Boston Corp. (jointly), $100.30
with a $4.80 dividend. Statement effective June 12.
k
.
Loven
May 31
stock.
A.
Chemical
Proceeds—To pro¬
working capital and funds for the "ultimate pur¬
of the common stock of retiring executives and
E.
on
credit to junior executives." Office
Detroit, Mich.
Jefferson Ave.,
Merry Brothers Brick & Tile Co., Augusta, Ga.
notification) 1,250 shares of 5% cumu¬
lative preferred stock. Price—At par ($100 per share).
Underwriter—Johnson, Lane, Space & Co., Inc. Proceeds
—To Ernest B. Merry, Jr., Vice-President and General
June 15 (letter of
Manager, the selling stockholder.
Middle
South Utilities,
California, Newhall, Calif.
282,250 shares of capital
($1 per share). Underwriter—Floyd
East Whittier.
Mutual
Telephone Co., Honolulu, Hawaii (7/25)
June 27 filed $1,000,000 first mortgage bonds, series G,
due 1980, and 100,000 shares of preferred stock, series C
(par $10), the new preferred stock to be offered initi¬
ally to common stockholders and employees of the com¬
at rate to be filed by amendment. Price—Of bonds
amendment; of preferred, at par. Under¬
pany
writer—Kidder, Peabody & Co.
tion and expansion program.
June
19
Automotive
filed
Proceeds—For construc¬
Fibres,
Inc.
(par $1).
stock
140,000 snares of capital
Price—To be related to the current market price at the
time of sale.
Underwriter—Reynolds & Co., New York.
purchase assets of Federal Leather Co. (An
shares were to be sold to Louis M.
Co.
and
Mississippi Power & Light Co. Underwriter—
Equitable Securities Corp will serve as "dealer-man¬
ager."
Deposits—May
be
accepted
between
June
26 and
July 14. (See also listings of Arkansas, Louisiana
and Mississippi companies elsewhere in these columns.)
Middlesex
Feb. 9
Water Co.,
Newark, N. J.
5,200 shares of
(letter of notification)
stock offered to
at $50 per
common
10,000
posed offering cancelled
price.) Pro¬
stockholders of record March 17
share on a one-for-five basis.
UnderwriterClark, Dodge & Co. Proceeds—To pay notes and for
additional working capital.
Expected this month.
Calif.
9
(letter of notification) 5,000 shares of common
stock (par $1), to be sold at the market price (of from
$5 to $5.50 per share) through First California Co.,
Holton, Hull & Co., Dempsey-Tegeler & Co. and Morgan
&
Co., Los Angeles; and James Ebert Co., Bakersfield,
Proceeds go to Eva M. Halliburton, Fresno, Calif.,
Calif.
the
Office—182
stockholder.
selling
W.
Ramona
St.,
Ventura, Calif.
American Acceptance Corp.
(letter of notification) 20,000 snares of 60-cent
dividend series cumulative preferred stock
(par $5).
•
North
June 26
Price—$10
To
share.
per
increase
Underwriter—None. Proceeds—and for working capital.
receivable
notes
Office—765 W. Lancaster Avenue, Bryn Mawr, Pa.
Illinois Coal
Northern
Corp., Chicago
notification) up to 2,000 shares of
common stock
(no par) to be sold at the market price
(between $20 and $22 per share) by T. Howard Green,
May
a
(letter
10
of
Vice-President of the
& Co., Rogers
company.
first
Underwriter—Faroll
& Tracy and Shields & Co., Chicago.
Northern Insurance
June
Co., N. Y. City
80,000 shares of capital stock (par $12.50)
offered to stockholders of record June 20 on a
filed
1
share-for-share basis with
Price
rights to expire
on
July 11.
Underwriters —First Boston
Corp and Wood, Struthers & Co. Proceeds—To increase
capital and surplus. Statement effective June 20.
—
$37.50 per share.
Public
Service Co.,
June 9 filed 49,200 shares of common
be
offered
share
to
for each
Co., Inc., New
stockholders
10
of
Huron, S. D.
stock (par $3) to
record
rate
at
Underwriter—A.
held.
of
one
C. Allyn and
York. Price—To be filed by amendment.
construction
Proceeds—For
expenditures.
Postponed
temporarily.
•
None.
Co., Los Angeles,
Calif.
(letter of notification) 197,672 shares of capital
(par $1). Price—$1.50 per share. Underwriter—
Proceeds—To pay bank loans and increase work¬
19
ing capital.
•
Oil
Oceanic
June
stock
common
June 29. Deal off.
on
Norris Oil Co., Ventura,
June
Northwestern
—Arkansas Power & Light Co., Louisiana Power & Light
Pacific
Office—811 W. 7th St., Los Angeles, Calif, t
Petroleums
Ltd., Calgary, Ala., Canada
(7/27)
June
30
filed
900,000
shares
of
common
stock
(par
$1-Canadian). Price—To be filed by amendment. Under¬
writer—Eastman, Dillon & Co. Proceeds—To pay bank
loan and for corporate purposes, including development
of oil and gas lands.
CONFIDENTIAL
SERVICE
S0IIG
SINCE
WO
Pan
American
Gold
Ltd., Toronto, Canada
July 20, 1948 filed 1,983,295 shares of common stock (par
$1). Underwriters may be brokers.
Price—45 cents per
share.
Proceeds — Mainly for development. Statement
PRINTING CO.; Inc.
effective April 10, 1950.
90 SOUTH ST., NEW YORK 7,
(P.--/£/?...i.. -t.
June
.
Panhandle
19
filed
Eastern
$20,000,000
Pipe Line Co.
of debentures,
(7/12)
due 1975, and
$15,000,000 of serial debentures, due $1,500,000 each year
from
1953 "through 1962.
Underwriters—Kidder, Pea¬
body & Co., Merrill Lynch, Pierce, Fenner & Beane,
mm
&
Co., Inc., Los Angeles, Calif. Proceeds-^To
buy land, build a plant and equip it to produce so-called
"impact" plastics. Office—244 S. Pine St., Newhall, Calif.
of residential lots in
Inc.
June 1 filed 400,000 shares of common stock (no par) to
be offered to preferred stockholders of three subsidiaries
(letter of notification)
Price—At par
Allen
of
19
(letter of notification) 273 shares of assessable
stock, with assessments limited to $5 per share.
Price—$9.18 per share. Underwriter—San Gabriel De¬
velopment Co., Whittier, for account of Murphy Ranch
Land Development Co. The stock accompanies the sale
principal
•
Leigh Foods, Inc. (N. Y.)
June 30 (letter of notification) 300,000 shares of
capital
June
Plansoen, President of Federfcl, at the same
common
'{bar $1). Price—$18 per share. Proceeds—To Rich¬
O'Conner, President of the company. Underwriter
—Francis I. DuPont & Co., Chicago. Office—2131 Bueter
Proceeds—To purchase property and for
working
capital.
•
Underwriter—Pulis,
stock
common
Murphy Ranch Mutual Water Co., Whittier,
stock
—2761
Lakeland
Common
ard A.
extensions
•
•
Kidder, Peabody & Co. (jointly), $100.19
Statement effective June 12.
$4.90 dividend.
a
National
—Bonds & Pfd.
Magnavox Co., Fort Wayne, Ind.
notification) 5,500 shares of
subsequent resale
June
Preferred
June 49 (letter of
vide
system.
Weld & Co. and
with
additional
Underwriters—The Bankers Bond Co. and
Smart,
Reid & Ebinger,
Louisville, Ky. Proceeds—To construct
water
(jointly), $100.30 with a $4.90 dividend; and Blyth & Co.,
Inc., Equitable Securities Corp., Shields & Co., White,
to be filed by
(EDT).
a.m.
$4.80 dividend; Lehman Brothers, $100,551 with
a
$4.85 div.; W. C. Langley & Co. and First Boston Corp.
1950
cu¬
$25).
with
a
Proceeds—To
amount of each.
2,000 shares of 66%
share.
to
1950
Public Service Co. of Colorado..Debentures & Pfd.
com¬
Under¬
T. H
(jointly); Harriman Ripley & Co., Inc.
18,
Preferred
Hawaii
Proceeds
Kentucky Utilities Co., Lexington, Ky.
July
.
Inc
July 25,
Mutual Telephone Co
June 28 filed
•
Electrical Corp.,
July 20, 1950
United States Plywood Corp
Investors
.
Class A & Com.
-
for working capital and
general corporate
Office—359 Lexington Avenue,
Clifton, N. J.
purposes.
(par 100). Proceeds—To be used to redeem at $110 per
plus dividends, the outstanding 44,476 shares of $6
preferred stock and for construction and other corpo¬
rate purposes.
Bids—Received by company up to noon
(EDT) on June 19 but rejected. Four bids were made
as
follows:
Union Securities Corp., $100.10 per share
common
Chicago, Rock Island & Pacific RR.
Noon (CDT)...
Equip. Trust Ctfs.
Texas Illinois NltT Gas Pipeline Co.__Notes & Com.
June
ment
1950
Radio Corp
v
Expected this month.
•
May 23 filed 85,000 shares of cumulative preferred stock
California
Preferred & Com.
July 17, 1950
Canadian Superior Oil of California, Ltd._.Common
Sightmirror Television Corp.
Common
tional
ance
Common
noon (EDT) .Common
Products, Inc
July 15,
Tm^Tone
of company's common stock.
July 13,1950
^AJffi|p®lectric
Co.,
Price—100% of principal amount.
Common
Jwjjm (EDT)
Power & Light Co.,
Industrial Stamping & Mfg. Co., Detroit
May 15 filed $500,000 of first mortgage 5%
sinking fund
bonds, due 1967, with warrants to purchase 60,000 shares
of
Service Co.
(EDT)
W^rogin
California, Los Angeles.
materials, pay debt and increase
Inc.
Co.,
share
Common
RR., noon (EDT)__
Equip. Trust Ctfs.
Fedders-Quigan Corp
Preferred
Kentucky Utilities Co., noon (EDT)
Common
Panhandle Eastern Pipe Line Co
-Debentures
Public Service Co. of Indiana, Inc.
and Pacific Co. of
working capital.
1950
Erie
Office—Industrial Canal Plant, New Or¬
R.)
(Walter
(letter of notification) 1,000 shares of 6%
cumulative preferred stock at par ($100 per share). Un¬
derwriter—George D. B. Bonbright & Co., Binghamton,
N. Y. Proceeds—To assist in acquisition of 1216 shares
6
Mississippi Power & Light Co.
Central & South West Corp., noon (EDT).Common
gen¬
June
stock
Bonds
Equip. Trust Ctfs.
(EDT)
Noon
Imperial Television Mfg. Co., Vernon, Calif.
19 (letter of
notification) 75,000 shares of capital
,
Common
July 12,
leans, La.
•
Mines, Inc
Cameron (Wm.) Co
Central Illinois Public
common
share). Underwriter—None. Proceeds—For
per
eral
be
1950
July 11, 1950
Kentucky Utilities Co., 11 a.m. (CDT)
New York, New Haven & Hartford RR.
Jiine 30 filed 10,000 shares of
capital stock.
Underwriter
—Haydock & Co. Business—Investment company.
stock
Miller
March
July 10,
plies.
Higgins, Inc., New Orleans, La.
May 23 (letter of notification) 300,000 shares of
1950
Common
Proceeds—
general corporate purposes.
Business—Sensitizing
photographic and photocopy papers and manufacturing
photocopy cameras, papers and other photographic sup¬
Haydock Fund, Inc.,
7,
July
Haloid Co.
For
•
Inc., Elkhart, Inc.
(letter of notification) 2,500 shares of common
(no par). Price—$16.50 per share. Underwriter—
Cohu & Co., New York City.
Proceeds—To two selling
NEW ISSUE CALENDAR
*
(par $5)
July 6 on
share for each three shares held.
Rights
July 24.
Underwriter—The'First Boston
Miles Laboratories,
:/
•London Associate
jiX&OftMlCK and HENDERSON, Inc.
The lEAGRAVE PRESS, Ltd.
and
Price—To be filed by amendment,
along with interest rates on both issues. Proceeds—To
Continued on page 40
Halsey, Stuart & Co.
40
(100)
The Commercial and Financial Chronicle
Continued from page 39
Underwriter—Tellier & Co., New York. Proceeds—For
payment of patents, etc., and for working capital. Office
—111 Cedar Street, New Rochelle, N. Y.
Expected week
of July 17.
^
pay promissory notes, for general funds and for con¬
struction.
Business—Production and
transmission
of
natural gas.
•
Pennzoil Co.
June 9
Stock
(letter of notification)
(par $10).
21,145 shares of
basis
of
one
of 73.34%
June
of Pennzoil
sold
owner
•
stock
Statement
1949.
of Colorado
mately
&
$4.87%
share).
per
—To
on preferred stock. Probable
Halsey, Stuart & Co. Inc.; Blyth &
Smith, Barney & Co. (jointly); Lehman
Brothers; First Boston Corp.; Harris, Hall & Co., Inc.;
Kidder, Peabody & Co. Probable bidders for preferred:
Glore, Forgan & Co. and W. C. Langley & Co. (jointly);
JLehman Brothers; First Boston
Corp., Boettcher & Co.
and
Bosworth, Sullivan & Co.; Kuhn, Loeb & Co. and
Karris, Hall & Co., Inc. (jointly.) Proceeds—For con¬
Underwriter—
•
struction.
a.m.
(EDT)
•
June
Queen of Hills Mining Co., Salt Lake City, Utah
June 21 (letter of
notification) 750.000 shares of capital
.stock (par 5
cents). Price—10 cents per share. Under¬
writer—None. Proceeds—To purchase additional
mining
equipment. Office—514 First Security Bank Bldg., Salt
shares of
Bake
©
City, Utah.
common
($1 per share), through Gerald
Proceeds for equipment, installations,
par
Reno.
manufacturing and
©
Rochester
reserve.
(INL
Y.)
June 29 filed
July 18-19, with rights
expire Aug. 3.
Underwriter—The
ceeds—For general
Price—To
First
corporate
struction and repayment of
O
be
Boston
a
filed
by
amendment.
Corp., New York. Pro¬
purposes,
including
con¬
loan.
common
Under¬
compo¬
Safeway Stores, Inc.
June 8 filed 321,000 shares of
cumulative preferred stock
{par $100) and 257,064 shares of common stock
(par $5).
The common will be offered to
common stockholders of
record at the rate of one new
share for each 10 held.
Of the preferred,
205,661 shares will be offered in ex¬
change for 186,965 shares of
outstanding 5% preferred
ufcock, along with an unspecified cash
payment. Under¬
writer—Merrill Lynch, Pierce, Fenner & Beane
will
needed
shares
for
as
well
85,114 shares
as
the
exchange and 30,225
shares which will be created
by converting that many of
the old 5% shares
brought in under the exchange into
new
preferred stock. Any old preferred not
exchanged
will be redeemed on
Oct. 1.
Price—To be filed by
•amendment, along with the dividend rate on the new
preferred. Proceeds—To redeem the
unexchanged 5%
stock, make cash payments on
exchange, and toward the
prepayment of $20,000,000 in bank loans.
Offering—
Temporarily postponed.
©
Segal Lock & Hardware Co., Inc., N. Y.
City
June 29
(letter of notification) 177,777 7/9 shares of
common stock (par
$1), to be offered in satisfaction of
share).
York
No
Price—At
underwriter.
market
(about
Office—395
$1.12% per
Broadway: New
13, N. Y.
Seneca Oil Co., Oklahoma
City, Okla.
April 27 (letter of notification) 225,782 shares
of clas3 A
stock (par 500).
Price—$1.25 per share. Underwriter—
•Genesee Valley Securities
Co., Rochester, N. Y. Proceeds
—To acquire
properties and for working capital,
O.
Shelter Island (N.
Y.) Farmers' Cooperative, •!
Inc.
June 23 (letter of
notification) 500 shares of 5% cumula¬
tive
non-convertible preferred
stock.
Price—At
par
($100
per
share).
Underwriter—None.
Proceeds—To
purchase machinery and equipment and for other
Office—Shelter Island/Suffolk
porate purposes.
.
cor¬
County,
New York.
Sightmaster Corp., New Rochelle, N. Y.
(letter of notification) 18,500 shares of
(par 5,cents), Price—20 cents per
common
share.; Under¬
writer—Butler, Moser & Co., 44 Wall Street, New
York,
Y.
Proceeds—To selling stockholder.
Office—111
Cedar Street, New Rochelle, N. Y.
j.
N.
,
,
t
Sightmirror Television Corp. (7/17-21)(letter of notification) 749,000 shares of
June 21
*»on
stock
(par
1
cent).
shares of
wtih
The
common.
preferred
plus
accrued
dividend
from
July
1
for
the
share,
preferred
with purchase warrants at 5 cents
each; $8.25 per share
for the common, plus 5 cents for each warrant. Proceeds
—From the sale of the preferred,
together with a
$750,000
loan
,will be used to expand the company's operations.
Drawing aluminum and copper wire from
rods and stranding
aluminum, copper and steel wire into
Business
—
Southwest Natural
Price—40
cents
per
Gas
Co., Shreveport, La.
(letter of notification) 13.500 shares of common
stock to be sold by Ronald M.
Craigmyle, at market
(about $7.37% per share) through Craigmyle,
Pinney &
Co., New York City.
•
com-
share.
held.
Price—At
shares
rate
par
of
of
($50
capital
share
one
share).
per
Proceeds—To pay bank loans.
Western
19
class B
50
each
tion warrant accompanying each share. UnderwritersCourts & Co.; The
Robinson-Humphrey Co. and Clement
A. Evans & Co., Inc., Atlanta, Ga.
Price—$50
Co., Franklin, N. C.
1,406
stockholders at
Mines, Inc., Seattle, Wash.
(letter of notification) 10,000 shares of class A
non-voting common stock (no par) and 10,000 shares of
by the company with four stock purchase
voting
cents
stock
common
share.
per
No
(no par) to be offered at
underwriter.
Proceeds
velop and equip mine at Rocky Bar, Idaho.
Securities Bldg., Seattle 1, Wash.
to
de¬
Office—624
Western Oil Fields, Inc.,
Denver, Colo.
May 5 (letter of notification) 600,000 shares of common
stock and a $50,000 note
carrying interest at 4% payable
from percentage of oil sold.
This note will carry with
it as a bonus 500,000 shares of stock.
Price—Of stock,
250 per share.
Underwriter—John G. Perry & Co., Den¬
Proceeds—To
ver.
drill
for
oil
in
Wyoming
working capital.
•
Wood
for
Concentrating Co.
(letter of notification)
stock to
mon
and
'
River
1,000,000 shares of
com¬
be sold
at 10 cents per share and
125,000
shares to be issued to directors of the
company for their
services.
Underwriter—Lackman & Co., Hailey, Idaho.
Proceeds—To
build
Address—Box 453,
a
mill
for
small
mine
operators.
Hailey, Idaho.
Story-a-Day, Inc., Washington, D. C.
June 22 (letter of notification) $298,000 of
7% cumula¬
tive preferred stock
(par $100) and 2,980 shares of com¬
(no par), to be offered in units of one pre¬
and one share of common stock at
$100
No underwriter. Proceeds to promote a
share
unit.
per
weekly
magazine.
9
common
Propane Gas Corp.
(letter of notification) a sufficient number of
shares (par $1), so that aggregate
offering price
shares
close
of
offered
June
shall
5, $15
not
per
exceed
share.
$100,000.
Price—At
Underwriters—Antici¬
pated that Eastman, Dillon & Co., New
York, will sell
shares in over-the-counter market.
Proceeds—To SBN
Gas
Aetna
June 3 it
Co., West Orange, N. J.
Sudors Gold
—$1 per share (U. S. funds).
common
stock.
Underwriter—None.
Pro¬
Corp., N. Y.
135,000 shares of
City
common
(7/15)
stock
(par $1).
Price—$6 per share. Underwriters
Sills, Fairman &
Harris; Straus & Blosser. Proceeds—To 15 selling stock¬
holders.
Tele-Tone Radio Corp., N. Y. City (7/15)
June 22 filed 100,000
shares of cumulative convertible
A
stock.
Price—At par ($10 per share). Under¬
& Harris; Straus & Blosser. Pro¬
For additional plant facilities and for
working
writers—Sills, Fairman
—
capital.
•
stock.
Price—At
None.
Proceeds—To
working funds.
gan
($5
par
share).
per
of
about
considering issue in late
$10,000,000 preferred stock. Probable
bidders: Morgan Stanley & Co.; Blyth & Co.,
Securities Corp. and Equitable Securities
Inc.; Union
Corp. (jointly);
First Boston
Corp.; Drexel & Co. JProceeds will be used
May 24 announced company is planning to file shortly
registration statement covering 160,000 shares of prior
preferred stock (par $50). Price—To be filed by amend-
a
ment.
Underwriters—Glore, Forgan & Co.; Kidder, Pea¬
body & Co., and Alex. Brown & Sons, and others. Pro¬
ceeds—For additional working capital.
American Natural Gas Co.
May 18 it was announced company plans
380,607 shares of common stock (no par)
issuance
o?
to common
stockholders at rate of one share for each
eight share3
held. Price—To be filed by amendment. Underwriters—
To be determined by competitive
bidding. Probable bid¬
ders:
Glore, Forgan & Co. and W. C. Langley & (Co.
(jointly); Blyth & Co., Inc.; Lehman Brothers; The First
preferred stock at
Corp. Proceeds—To increase investments in stock
Michigan Consolidated Gas Co. and Milwaukee Gas
Light Co.
of
Ancient
Underwriter—
cancel
existing indebtedness and
Office—East Michigan Street, Michi¬
City, Ind.
Texas Illinois
June 26 filed
Mav 31
the
rate
of
one
$100
stock will be offered to holders of
outstanding common
at the rate of one new share for each
3Y2 shares held and
will be sold 50% to
Peoples Gas Light & Coke Co. and
remainder to other
stockholders, with
Peoples
all shares not subscribed for.
share.
taking
Underwriters—White,
Associated
June
15
intention
Channels
announced
stock
Gold
to
Mining Co.
it
500,000
Price—25 cents
Office—
!r':
Telephone Co., Ltd.
announced
that the company's present
approximately $10,000,000 of addi¬
by selling, in the fall of the current year,
was
is
tional funds
:
issue and sell
(par 10 cents).
Proceeds—For working capital, etc.
Virginia Street, Reno, Nev.
•
.!
206 North
share for each
were
common
(7/18)
•
River
plans
shares of
per
Natural Gas Pipeline Co.
principal amount; 120,000 shares of cumulative preferred
stock ($100 par) to be used in
paying off the notes, and
1,750,000 shares of common stock (par $1). The common
up
Co.
Boston
Television Associates, Inc.,
Michigan City, Ind.
(letter of notification) 15,623 shares of common
June 26
for
Power
company reported to be
summer
—
class
Co.
American Investment Co. of Illinois
Price
development
June 22 filed
&
Alabama
Toronto, Canada
ceeds—Funds will be applied to the
purchase of equip¬
ment, road construction, exploration and
Tele-Tone Radio
Sachs
May 12
Co.
reported company may do some f:nancing
year.
Traditional
underwriter:
Goldman,
this
for construction expenditures.
Mines Ltd.,
June 6, 1949, filed 375,000 shares of
ceeds
Finance
was
later
Suburban
June
of
Prospective Offerings
stock
mon
ferred
$12,000,000 of interim notes, due Jan. 1,
1952, payable upon maturity by delivery of cumulative
June 20
stock
mon
•
June
preferred share. The com¬
stock is offered by three
stockholders, with an op¬
offer
common
15,000
offered
to
Underwriter—None.
stock with 15,000 warrants to purchase
June 26
Office—714 Fifth St., N. W.,
Washington, D. C.
claims.
warrants
notification)
for each two shares
June 26
June 22 (letter of
notification) 600,000 shares of
•stock (par 10 cents). Price—50
cents per share.
writer—None. Proceeds—To
buy television set
certain
additional
•
Washington, ID. C.
the unsubscribed
of preferred not
common
(letter of
be offered
cable.
Royal Television & Electronics, Inc.,
nents.
(7/17-18)
per
Telephone Corp,
125,000 shares'of common 'stock (par $10)
to be offered to
present stockholders at rate of one new
iJiare for each four held about
to
Inc.
filed
stock is offered
Refrigeration, line.., IReno, Nev.
Corp.,
16,000 shares of 6% cumulative preferred
(par $50) with 64,000 stock purchase warrants to
buy 64,000 shares of common stock (par $3), and 15,000
an
June 19 (letter of
notification) 200,000 shares of
stock to be offered at
R. James,
21
Electrical
22
stock to
stock
Southern
June
Western Carolina Telephone
on
July 25.
©
Univis Lens
Vieh Co., Columbus, Ohio
May 8 (letter of notification) 19,500 shares of common
stock at $10 per share. Underwriter—The Ohio Co. Pro¬
ceeds—To buy the assets of Brodhead-Garrett Co. and
for working capital.
financing new construc¬
received at office of the company, 20
St., New York, N. Y., up to 11:30
by
in¬
Co., Dayton, Ohio
(letter of notification) 19,750 shares of common
stock (par 50 cents), to be sold to 33
employees. Price—
$7.75 per share.
Underwriter—None.
Proceeds—For
general funds. Office—401 Leo Street, Dayton, Ohio.
iaries in order to assist them in
Bids—To be
(7/20)
Jun 26
(jointly); Harriman Rip¬
Proceeds—To purchase shares of subsid¬
Pine
Plywood Corp.
working capital and for other corporate purposes,
including the erection of a new plant at Anderson, Calif.
and Equitable Securities Corp.
ley & Co., Inc.
States
crease
(7/25)
tion.
Proceeds
man, Dillon & Co., New York.
Price—To be filed
amendment along with dividend rate. Proceeds—To
Probable bidders are: Morgan Stanley & Co.,
Kidder,
Peabody & Co. and Merrill Lynch, Pierce, Fenner &
Beane (jointly); Blyth & Co., Inc. and Bear, Stearns &
Co. (jointly); Lehman Brothers; Union Securities
Corp.
bonds:
the New York Curb Exchange.
on
selling stockholder.
United
June 23 filed 1,000,000 shares of common stock
(par $5).
Underwriters—To be determined by competitive bidding.
Co., Inc., and
Inc.
June 19 filed 60,000 shares of series B cumulative con¬
vertible preferred stock (par $100). Underwriter—East¬
working capital and general cor¬
Office—401 Carondelet Building, New
Atlanta, Ga.
of
Profit-Sharing Corp.
handle sale
Proceeds—For
Co.,
share;
13 filed
United
Development Co.
$5.12%
to
underwrite
per
(letter of notification) 1,400 shares of common
stock (par 25 cents).
Price—At market (about 75 cents
per share).
Underwriter—Tucker, Anthony & Co. wilt
(letter of notification) 50,000 shares of common
10 cents).
Price—At the market (approxi¬
Southern
and dividend rate
for
Oil
$10
June 28
$1.50
Orleans, La.
$7,000,000 of convertible debentures, due
I960, and 100,000 shares of cumulative preferred stock
(par $100). Underwriters—To be determined by com¬
petitive bidding, along with prices, interest rate on de¬
ladders
Shore
porate purposes.
(7/25)
June 26 filed
bentures
at
(par
None.
>
Public Service Co.
South
June 26
share.
Under¬
Proceeds—
drilling.
effective June 27,
later
& Co., will
stock,
common
Syndicate, Inc.
•
per share.
Under¬
Co., 63 Wall Street, New York City.
selling stockholder.
Office—381 Fourth
Avenue, New York City.
of which 1,000,000 on behalf of
company ana i5u,uuu o>
New York Co., Ltd.
Price—50 cents
per
Proceeds—
writer— d'Avigdor &
Ltd.,
writers—S. G. Cranwell & Co., New York.
Nor administration expenses and
offered
be
Thursday, July 6, 1950
300,000 shares of common stock (par $1).
Price—2.75
per
share.
Underwriter—Blair
F.
Claybaugh & Co., New York.
Proceeds—To increase work¬
ing capital and repay loans from RFC and Croydon
Corp., New York City
(letter of notification) 2,500 shares of capital
(par 10 cents) of which there will be presently
1,500 shares at $1 per share, the remaining 1,000
to
Glore, Forgan
Transvision,
June
Proceeds—To
Toronto Canada
1,150,000 shares ($1 par) common
April 25, 1949, filed
common
Price—At approximate market ($1.50 per share).
shares,
stock at the same price.
common
Power Petroleum
of
22
stock
nad
Price—Of
.
ness—Natural Gas pipeline transmission.
shares
500
Skiatron
shares held;
In addition, 58,171 additional
rights will expire July 7.
shares are being offered to South Penn Oil Co.,
notification)
Co.
&
notes.
.
notes, to be filed by amendment along with interest rate.
Proceeds—For construction of pipeline facilities. Busi¬
Corp., New York City
(letter of
Underwriter—Hirsch & Co., New York City.
To selling stockholder.
share for each eight
new
27
stock.
common
Price—$14 per share.
Underwriter—
None. Proceeds—To modernize Rouseville refinery and
for expansion of marketing facilities. Offering—To be
offered minority common stockholders of record June 16
cn
Skiatron
June
Weld
the
.
to
raise
50,000 additional shares of cumulative preferred stock
(par $20), a like amount of common stock (par $20) and
$8,000,000 of first mortgage bonds, series G.
Under¬
writers—For preferred stock, probably
Paine, Webber,
Jackson & Curtis, Stone & Webster Securities
Corp. and
Mitchum, Tully & Co. For the bonds, to be determined
by competitive bidding.
Probable bidders' for bonds:
.:
Number 4S22
"Volume 172
.
.
The Commercial and Financial Chronicle
.
Halsey, Stuart & Co. Inc.; Kuhn, Loeb & Co. and Salo¬
Bros. & Hutzler (jointly); Lehman Brothers; Paine,
mon
Webber, Jackson & Curtis and Stone & Webster Secur¬
ities
White,
(jointly);
Corp.
Weld
&
Co. and
Kidder,
& Co. (jointly); Equitable Securities Corp.
Harris, Hall & Co. (Inc.) (jointly). Proceeds—For
Peabody
and
Big Bear Markets of Michigan, Inc.
plans early registra¬
June 9 it was announced company
tion of additional capital stock,
with offering toward the
Underwriter—J. G. White & Co.,
month.
this
of
end
Canada
(Dominion of)
it
27
was
Government is
payable in U. S. dollars.
Issued in 1930 with a
4% coupon, these bonds are due Oct. 1, 1960 and subject
to
call Oct.
1, next,
The latter priv¬
time this month.
60 days' notice.
on
ilege is expected to be exercised some
Probable underwriter: Morgan Stanley & Co.
Celanese
conditions
considered
market
an
initial series of this new
are
be convertible into common
satisfactory,
part for expansion of the business, including
production facilities.
Probable underwriters:
Central
Public
Illinois
Service Co.
Co.
&
Inc.;
Central
&
West Corp.
South
Probable bidders: Hal-
years.
Morgan
Stanley
&
Co.;
First
Corp.
shares
of
preferred
Eastern
stock.
announced that under
new
plan filed with
a
company
River Electric
will
Light Co. and Montaup Electric Co. and
and sell $22,000,000 of first mortgage and
issue
collateral
trust bonds and
$8,500,000 of preferred stock.
Elliott Co.
May 26 it
was reported that between 47,000 and 48,000
shares of this company's common stock may be offered
time
some
in
the
near
futuer
through F. Eberstadt &
Co.
Radio & Phonograph Corp.
Benjamin Abrams, President, announced that
company may use unissued 1,240,390 shares of capital
stock (par $5)
to acquire additional plant facilities if
(7/12)
29,
Traditional underwriter: F. Eberstadt & Co.
needed.
Erie
Electric Corp.
RR.
(7/12)
of
annual
was announced that under an amended plan
reorganization it is proposed to issue to holders of all
classes of 6% preferred stock for each old share the right
to buy a unit consisting of eight shares of new common
stock and $14 principal amount of new 4%% income de¬
bentures for a package price of $18. The common stock,
except for approximately 4,600,000 shares held by Harri¬
son Williams and associates, would be offered the right
unit of
a
share and $1.75 of new
package price of $2.25 for each
one new common
income debentures for a
five
shares held.
common
The issue of
banking
group
new
stock and
Darien Corp. and
debentures would be underwritten by
a
headed by Hemphill Noyes, Graham,
Parsons & Co., Shields & Co., Blair, Rollins & Co.,
Drexel
instalments
and Lehman Brothers
Central
in
July
it plans to file a registra¬
covering 90,000 shares of
stock
(par $10), which are to be issued to com¬
stockholders of Central Electric & Gas Co. on a 1-
common
mon
late
basis.
for-13
Dealer
Jack¬
son
& Curtis and Stone & Webster Securities Corp.
Proceeds—Mainly to retire $850,000 short-term loans.
Central
Vermont
Managers—Paine,
Public
Service
Webber,
Corp.
announced that if offer to acquire Green
Mountain Power Corp. becomes effective, it plans to re¬
May 4, it
fund
was
and refunding 3%%
bonds due 1963 of Green Mountain by the issue and sale
outstanding
$7,715,000
first
for cash of first mortgage bonds of a new
series of preferred stock, $100
series and of
value. Prob¬
prob¬
able bidders for preferred: W. C. Langley & Co. and
a
new
received
its
at
office
in
(jointly); and Harris, Hall & Co.
Florida Power &
Light Co.
June 9 stockholders approved creation of 50,000 shares
of $4.50 cumulative preferred stock (par $100).
These
shares are soon expected to be offered to finance part of
construction program which is expected to require ap¬
proximately $25,000,000 new capital through 1952.
par
able bidders for bonds: Halsey, Stuart & Co. Inc.;
Hemphill, Noyes, Graham, Parsons & Co. (jointly).
announced that registration
was
statement is
expected to be filed shortly covering not less than 25%
and not exceeding 33%% of the stock held by principal
stockholders following approval on July
stock
split
Underwriter—A.
up.
6 of 7V2-for-l
G. Becker & Co. Inc.
Houston
Lighting & Power Co.
April 14, S. R. Bertron, President, estimated construction
expenditures for 1950 between $19,000,000 and $20,000,000.
This estimate may be raised to accommodate increased
power demands on the system.
If this is the case, more
financing will be necessary, he added.
This may be
done
through
financing.
additional
common
or
preferred
stock
•
Kaye-Halbert Corp., Culver City, Calif.
8, Harry Kaye, President, announced that "it is
possible from time to time that additional financing
might be undertaken to facilitate the further growh and
development of the business. Office—3555 Hayden Ave.,
Culver City, Calif.
'
June
•
•
Bids
See Middle West Corp. below.
Chicago, Rock Island & Pacific RR. (7/18)
will be received by the company, at Room 1136,
Xa Salle Street Station, Chicago 5, 111., at or before noon
<CDT) on July 18 for. the purchase from it of $2,352,000
^equipment trust certificates, series H, dated Aug. 1, 1950,
to mature in 24 equal semi-annual instalments from Feb.
1, 1951 to Aug. 1, 1962, inclusive.
Probable bidders; Hal¬
Stuart & Co. Inc.; Salomon Bros. & Hutzler; Harri-
sey,
man
Ripley & Co., Inc. and Lehman Brothers (jointly);
(Inc.).
Harris, Hall & Co.
Chicago & Western Indiana RR.
Jan. 31 reported company will probably issue in the near
future
some
bonds to refund the 4%
first
non-callable
mortgage
bonds due July
con¬
1952. Re¬
funding of the first and refunding mortgage 4J/4% bonds,
series A, due Sept. 1, 1962, is also said to be a possibility.
'Probable bidders: Halsey, Stuart & Co. Inc.; Morgan
solidated
1,
Stanley & Co.; Lee Higginson Corp.; Harris, Hall & Co.
Boston
<#
Corp.; Lehman Brothers; Paine,
Kidder, Peabody & Co.
Webber,
& Curtis;
Jackson
Columbia
Gas
System, Inc.
corporation
June 30 it was said that
be.( in market
fir $90,000,000 of new debt securities.
Underwriters—
May be determined by competitive bidding. Probable
bidders: Halsey, Stuart &
may
Co. Inc.; Morgan Stanley & Co.
debentures due
.April 1, 1973; $20,000,000 of 3% debentures due March
1, 1974; and $13,000,000 of 3% debentures due Aug. 1,
1974; and the remainder ($12,000,000) for expansion
(7/12)
•
announced that it has advised the Wis¬
S. Commission that it expects to sell $1,000,000
consin P.
of
long-term bonds and not less than $600,000 additional
stock. Proceeds will be used to repay $1,300,000
common
loans, due in September, 1951, and the remaining
$300,000 will go to Central Telephone Co., parent, to re¬
pay temporary advances for construction.
Probable un¬
derwriter: Paine, Webber Jackson & Curtis.
bank
Long Island Lighting Co.
May 18 it was reported company's construction program
in 1950 will cost $20,000,000 which is currently being
financed
Central
Illinois
of
Gas
Light Co.
company's permanent
expected to be consummated prior
to
October, 1950, will involve refinancing of bonds ($13,000,000 of first mortgage 4%% bonds due 1967), pre¬
stock
ferred
($2,000,000 of 7% issue) and bank loans
through the issuance of new senior
(about $8,500,000)
securities
Co.
and
stock
common
97.7%
(American
Natural
Gas
presently outstanding common
stock). Probable bidders for bonds: Halsey, Stuart & Co.
Inc.; Glore, Forgan & Co., and Lehman Brothers (joint¬
ly); Kidder, Peabody & Co.; Harriman Ripley & Co.;
Smith, Barney & Co., Kuhn, Loeb & Co. and Blyth &
Co., Inc. (jointly).
now
owns
Mountain
June
Fuel
of
Supply Co. of Utah
6 company announced plans to
to take
over
create
a
new
firm
its exploration and development of natural
gas and oil operations.
It will be financed, in part,
through public sale by the new unit of 1,000,000 shares of
capital stock (par $8). Financing plan submitted by First
Boston Corp. Expected this Fall.
Mountain States Power Co.
May 17 the stockholders voted to increase the author¬
ized preferred stock (par $50) from 75,000 to 150,000
by up to $12,000,000 bank loans pending per¬
which may be done following effec¬
Probable bidders for any
There
shares.
are
presently
72,993 shares.
Lynch, Pierce, Fenner &
outstanding
Probable underwriter: Merrill
Beane.
New England Power Co.
April 24 it was estimated that about $37,000,000 new
financing will be required to pay construction cost*
estimated at $40,000,000 for 1950 to 1952. Present plan*
are
to issue in late summer or early fall $10,000,000
bonds and 50,000 shares of preferred stock.
Probable
bidders:
(1) For bonds—Halsey, Stuart & Co., Inc.;
bonds and preferred: Harriman Ripley & Co.
Lehman Brothers; Kidder, Peabody & Co.; First
Boston Corp.; Merrill Lynch, Pierce, Fenner & Beane;
(3) for preferred:—W. C. Langley & Co.
for
Inc.;
,
.
New
England Public Service Co.
April 7 SEC authorized company to file an application to
sell 200,000 shares of Public Service Co. of New Hamp¬
shire
common
stock
or
sufficient number of shares of
a
Central Maine Power Co.
common stock (about 225,008
raise approximately the same amount of
money. Probable bidders: Blyth & Co., Inc. and Kidder,
Peabody & Co. (jointly); Coffin & Burr, Inc.; First Bos¬
ton Corp.; Harriman Ripley & Co. Inc. and Goldman,
Sachs & Co. (jointly). The proceeds will be used to pay
shares)
to
bank loans.
•
New
York, New Haven & Hartford RR. (7/1!)
(EDT) on July 11 for1
Bids will be received up to noon
the company of $3,000,000 eqquipAug. 1, 1950, and to
mature in 15 equal annual instalments of $200,000 eacb.
Probable bidders: Halsey, Stuart & Co. Inc.; Salomon
Bros. & Hutzler; Lehman Brothers and Bear, Stearns &
the
purchase from
ment
trust certificates to be dated
(jointly); Harris, Hall & Co. (Inc.).
New York State
Electric & Gas Corp.
May 24 it was reported company expects to sell $14.-
000,000 of bonds and $6,000,000 of new preferred stock
in June, 1951, with an additional $10,000,000 of new
securities to be sold in 1952, the proceeds to be used to
pay, in part, cost of new construction estimated to total
$55,800,000 in the next three years.
Probable bidder*
for bonds and preferred: Blyth & Co., Inc., and Smith;
Barney & Co. (jointly); First Boston Corp. and Glore;
Forgan & Co. (jointly); Harriman Ripley & Co. Inc.
bidders for bonds only: Halsey, Stuart & Co.
Probable
Inc.
Niagara
tiveness of consolidation plan.
securities include Smith, Barney & Co.
new
Lorillard
(P.)
Macy
(R. H.)
Lehman Bros,
& Co.
May 8 it was reported that company is considering Issu¬
of $10,000,000 of new securities, either debentures
ance
or
preferred stock.
Market
Traditional underwriters
—
Lehman
Los Angeles, Calif.
announced it plans sale of 4,452 shares
but unissued, preferred stock, - series C,
Basket,
May 25
plans to sell 250,000 shares. A group of under¬
writers, headed by Kidder* Peabody & Co. and The First
Boston Corp., are expected to offer the stock. ~
(par $15) and an additional 30,000 shares of preferred
stock, (par $15) to be authorized. Further details not
of
company
authorized
available.
Corp.
more than $25,000,000 of additional debt
equity financing, including short-term bank loan*.
Probable bidders for bonds: Halsey, Stuart & Co. Ine^
Morgan Stanley & Co.; The First Boston Corp.; Kuhn,
or
Loeb & Co.
Pacific
July, 1950. These loans now amount
$12,000,000. Traditional underwriters:
and Smith, Barney & Co.
to
Power
sitate in 1950 not
Co.
bank loans in full by
Mohawk
Jan. 19 announced that construction program will nece*-
April 4, Herbert A. Kent, President, said: "It may be
necessary to do some financing" before Aug. 1, 1951 to
redeem $6,195,450 of 5% bonds due on that date and
for additional working capital to meet expanded sales
volume.
He added that company plans to pay off ita
Co.
of
manent financing
stockholders approved creation of 500,000
chares of cumulative preferred stock (par $100) of which
30
company
stock
common
(c) 1,631 shares of common stock of
stock of Wisconsin Power & Light Co.; and
Milwaukee
Co.
Telephone Co.
Brothers; Goldman, Sachs & Co.
iprogram.
Commercial Credit
Utilities Co.
Kentucky
La Crosse
Proceeds—To retire $45,000,000 of 3%%
March
of
Indiana, Inc.; (d) 3,058 shares of
(e>
6,116 shares of common stock of Kentucky Utilities Co.
There may be submitted a single bid for all of the secu¬
rities or separate bids for one or more lots as desired.
June 6, company
(Inc.); Drexel & Co.; Kuhn, Loeb & Co. and Salomon
"Bros. & Hutzler (jointly); Harriman, Ripley & Co., Inc.;
TTirst
shares
Public Service Co.
common
(2)
Holeproof Hosiery Co.
Telephone Co.
statement
be
(Inc.).
June 22 it
tion
will
Cleveland, Ohio, up to and including noon (EDT) on
July 12. Probable bidders: Halsey, Stuart & Co. Inc.;
Salomon Bros. & Hutzler, Harriman Ripley & Co. Inc.
& Co. and Sterling Grace Co.
June 22 company announced
6,116
Public Service Co.;
Bids for the
March 1 it
buy
Corp.
shares of common stock of Central & South West Corp.;
purchase from this company of $8,100,000
equipment trust certificates to mature in 30 equal semi¬
to
Middle West
(7/12)
this corporation at the Bankers
Trust Co., 16 Wall Street, New York, N. Y., up to nocn
(EDT) on July 12 for the purchase from it of (a) 12,232
Emerson
See Middle West Corp. below.
Central States
•
Bids will be received by
financing program,
will be formed to acquire the
assets of Eastern, and of the Brockton Edison Co., Fall
a
Michigan Bumper Corp.,, Grand! Rapodls, Mich.
was announced stockholders will vote July 2d
increasing authorized common stock (par $1) fron»
250,000 shares to 500,000 shares, with holders of present
outstanding stock to have no preemptive rights.
on
June 21 it was announced that the
Utilities Associates
was
®
July 5 it
(b)
issue about
Probable bidders:
may
company
Expected in the fall.
gram.
May
(7/12)
See Middle West Corp. below.
•
It is anticipated
outstanding.
Kuhn, Loeb & Co. and Smith, Barney & Co. (jointly);
First Boston Corp.; Lehman Brothers; Kidder, Peabody
&
Co., Merrill Lynch, Pierce, Fenner & Beane and
White, Weld & Co. (jointly); Glore, Forgan & Co. Pro¬
ceeds are to repay bank loans and for construction pro¬
of
preferred stock which may
stock.
Net proceeds would
Dillon, Read & Co. Inc.; Morgan Stanley & Co.
•
Boston
the SEC
Corp. of America
if
additional
are now
the next four
over
Stuart
c°v.
May 23 it
April 12 the stockholders voted to authorize the creation
of 1,000,000 shares of a new preferred stock (par $100),
505,000 shares of which can be issued at any time.
Plans are being formulated for the issuance this year,
be used in
gram
100,000
Canadian
the
reported
making preparations for an extensive refinancing opera¬
tion. It is understood to plan refunding of a $100,000,000 loan
$1^6,000,000
that $257,000,000 will be needed for the construction pro¬
Duquesne Light Co.
June 22 it was reported that
New York.
June
Consolidated Edison Co. of New York, line.
May 15, Ralph H. Tapscott, Chairman, said the company
will require approximately $90,000,000 of "new money"
through the sale of securities. No permanent financing is
contemplated before this fall, however, and current ex¬
penditures are being financed by short-term loans, cl
which
construction program.
41
(101)
Power &
Light Co.
April 13, Paul McKee, President, disclosed that a group
of 16 purchasers who acquired company's 500,000 share*
of common stock from American Power & Light Co. on
Feb.
make
6,
a
last, have informed him of their intention. to,
public distribution of these shares at earliest
practical date, which may be shortly after Aug. 6. A. G.
Allyn & Co., Inc. and Bear, Stearns & Co. headed thi*
group. The 500,000 shares of common stock are being
split-up on a 3%-for-l basis, all or part of which will
be
publicly offered. Company also expects to raise
$3,000,000 in new money later this year and a similar
amount in 1951.
f.
Continued
on
page
42.
42
The Commercial and Financial Chronicle
(102)
Continued
jrom
Pacific
States
Probable bidders for bonds:
41
page
Fire
Stone
&
June
it
5
thorized
South
dollar
May
out
plan
a
refund the
to
retired.
are
South
Gas
competitive,
Bond financing would
stock would be either
preferred
and
stock
common
which
to
as
it
Michigan
announced
was
Gas
Public Service
Chicago, III.
plans issuance and
held.
Indiana, Inc.
(7/12)
March 3 it
California
Edison
Public Service
April
Electric
stockholders
17
&
this
for
Gas Co.
approved
the issuance of $90,000,000 new bonds for the purpose of refunding $50,000,3y8% bonds due 1965; $10,000,000 3V4% bonds due
1968; $15,000,000 3% bonds due 1970 and $15,000,000
Shields
000
Co.
common
additional
000
basis
of
five
each
shares
lowed
stock
from
1,500,000
shares to 2,500,000 shares. The increase is being sought
to make additional shares available for any future need.
Probable underwriter:
common
Reynolds & Co.
Sobering Corp.
May 4, it was announced that the company's entire
stock
mon
issue
shares)
(440,000
it
Co.
May be offered through dealer-manager group
probably headed by First Boston Corp.
Sierra
Pacific
of
the
April
25
$4,700,000
securities,
trustee
of
Washington
•
*
Jan.
25
tive
great concern
as
any
reason
for
it
announced
was
in
new
the
proceeds
company
through
money
Gardiner
sale
finance
to
in
Symonds, President,
regards the highgrade bond market at this stage.
Certainly,
has
as
been
to pay
reacted with the latter.
It
sold late
easy
interest
rates,
to
changes
in
have virtually ig¬
sharp break in stock
prices. And, say bond market ob¬
servers, this is as might have been
nored
the
expected.
is
argued,
from
ket.
trifle
the
takes
its
cue
government
mar¬
latter, while perhaos a
nervous, has
shown little
disposition to move away from
price and yield levels prevailing
before the outbreak in Korea.
Whatever the long-range effects
up
modification
part
1950
the
the volume of fixed debt securities
available
for
funds
of
savings
in
New
this
con¬
York
in the year
State
appear
now
that
the
on
comprise
of
$2,245,900,000
of
such obligations.
At the
of
same
securities:-
the
first
58.5%
on
Their
price
obligations
time, $4,783,600,000
had
been
eligible for legal invest¬
ment by action of the Banking
Board became regarded as accept¬
able without further action by the
Board.
names
of 13
offer
-
Co.
were
But
or
Wisconsin
See
85%
a
of -the
^ of bonds
-
under
Rail issues
now
at
$4,102,000,000
000,000
a
sub-
utility issuers
The
the
seller)
runner-up
the
lowest
carrv
of
substantial
a
^
a
<
which
fund
Provlslon> were reported to have
been substantially spoken for in
advance
to
and
sinking
substantial sinking fund
of actual
opening of the
yield .books.
■
.
5
paae
f ^
£ ~v':-
.
.
£
#
#
,
,
,
.,
„
...
#
.
■
Socialist aims of nationalizing steel, and arbitrarily limiting
home-building by private contractors to
cdfistructed. He concludes that British
Socialist than ^erica's Fair Deal.
~
,,
~
..
°,n
.
,
.
.
„
.
one
of every four units
Labor
is
hardly
more
"
.,
.
...
..
other hand, to observer Ewing it
is quite clear that
today s Britain is truly a Socialist state, but that the United States
has no Fabian taint, and that any such implication is a red-herring
'<*>ncocted by GOP politicians for the purpose of insulting the
,
American voter.
$4,049,-
"The
year ago.
domestic
Equitable Gas Debentures
simple
truth
political
about
processes
the
current
is that both
British
are
and
American
interventionist
and
socialistic, wi|h /Britain's being doctrinaire, and our's non-doctrinxfXre and unwitting to the majority.
Although a spread of just over
full point separated the
highest
and the lowest bids fer the
a
Equitable Gas Co.'s $11,OQO,OO0 of
..
1!
—Z
.
under the
against
(7/12)
gentlemen haye recently observed the same scene at first hand,
they have gljCaned entirely opposite impressions thereof.
Mr.
Matthews is positive that Britain's flag of "democratic
capital¬
ism" still waves triumphant in the
breeze, completely uncontaminated by Socialism. This despite the fact of the
frankly doctri-
the legal investment
statute.
paid
group
Mfrk Of 7/)71
ntme
Sn
Light Co.
?wing, f^ho also has observed the British scene m connechisfnafional medical researches. But although both
Ql!f $^5* Som
These °L1 tov,abo^/*®t5'5a¥0.Q*-have been transferred to
7
&
t>
jfi-
iraii
oiJn
Power
West-Corp. above.
Worcester County Electric Co.
|:
v
dmt
U
coveredby.jit,,
the
Middle
4pril 25 company reported planning issuance of $10.000,000 first mortgage bonds. Probable bidders: Halsey,
^Stuart & Co. Inc.; Harriman Ripley & Co., Inc.; Lehman
"Brothers; Kidder, Peabody & Co.; First Boston Corp.;
Merrill, Lynch, Pierce, Fenner & Beane.
j£-;.
-----
about
cor¬
jointly); Merrill Lynch, Pierce, Fenner & Beane.
•
164.039/
of
.
difficulties, Up¬
$6,000,000,000 of their
obligations
total,
-
-
Bobst, President, announced that
reported company plans issuance and sale
bonds. Probable bidders: Halsey,
Stuart & Co. Inc.; Lehman Brothers and Bear, Stearns &
Continued from
re-
railroads'
of
'
Inc.
was
,
-
& Co.,
$20,000,000
successful
on
Enacted in 1932 at the depth of
7.
depression, this provision was v ^
the
finance construction program.
proposes
about
103.7#^vhfe
the
of
12 Elmer H.
Reofferqd-aMl04.53
Section 7^a expired.
ward
to
Oym^four bids-was 103.0253.
the "list" when the
"moratorium" provision referred
as
used
(William R.)
years
bid
Issues
be
Philadelph'S"'Cb.' (the
^
Rail
will
of
in the
500,000
The
of .the
made
The
to
-debentures, the issue moved out about 3.07% the debentures, which
quickly on reoffering.
mature in
20
statutory section Of the list stand""
which
expects
company
-Western Pacific RR. Co.
total.
Affecting chiefly the securities
public utility companies, the the
regular category
revisions brought to the eligible
division 7 of
total
announced
was
June 14 it
at eompeti-
125,000 shares may be
list 'for
some
$19,300,000,000
in¬
13% or $2,300,000,000
ended July 1 last.
of
a
and
lic
announced that
summer
(,nrt(ITO
by
Louisiana
through a nation-wide group of underwriters headed
by F. Eberstadt & Co., Inc. Expected after July 4.
/
time, and obligations of that in"dustry,
totaling
$11,302,000,000,
-
in
statutory test set for the legal list
creased
in
recapitalization and change in name
Warner-Hudnut, Inc.; also to file a registration state¬
ment with the SEC covering the sale of
approximately
325,000 shares of new common stock (par $1) to the pub¬
plans to raise
of additional
modified in 1938 and extended for
the last time in 1940. At the
height
Big Jump in Legal List
directly
bond
The
take
yield basis.
list
The gilt-edge investment list, it
to
or outstanding liens,
available
on
the
"right"
Reflecting
fields
to
.
understood
was
issues,
banks
bonds," those that
primarily
Jun£
.....
May 4 stockholders have approved an
inqre^se
authorized common stock to 1,000,000 shares from
shares.
to
such
off-shore
competitive
Warner
for construction.
supplied
clearly
bonds, and those tied to stocks by
conversion, or other features, have
But "money
&
a $40,000,000 bond sale
forthcoming. Probable bidders: Halsey, Stuart
Inc.; Stone & Webster Securities Corp. and White,
Weld & Co. (jointly); Kuhn, Loeb & Co. and A. C.
Allyn
& Co. (jointly).
The proceeds would be used in part
maining
demonstrated to date, speculative
respond
Gas
& Co.
measurable outpouring of new
bonds while institutions are
amply
when
it
20
poration
no
funds
and
Virginia Electric & Power Co.
through
bidding, but the amount has not yet been decided."
Treasury-Reserve
with
Coast
»
Moreover, it is observed, any
Meanwhile the improvement in
noteworthy sell-off in high-grades recent years in the
earning cawould
be
decidedly
surprising pacity of most railroads found the
considering the fact that there is bulk of their debt
dis¬
Merrill Lynch,
of
Power Co.
authorized
"some bonds will be
government remains commit¬
ted to that policy.
see
•
Tennessee Gas Transmission Co.
the
are
Blyth & Co., Inc.; Union Securities
Smith, Barney & Co.
(jointly); Lehman
W. C. Langley & Co. and Glore, Forgan & Co.
Gulf
June
struction expenditures.
medite prospects for the top-level
corporate bond market so long as
Investment authorities
common:
and
■
the
Tampa Electric Co.
credit program, bankers see little
need to be concerned with the im-
posed to take the sharp setback
in the equity market in stride.
and
Texas to markets in Indiana, Ohio and Michigan. Com¬
pany is now in process of completing negotiations for
its major financing requirements.
Tide Water Power Co.
manently refund $2,200,000 of bank loans by the sale of
debentures and common stock prior to Oct.
31, 1950.
They do not
of
common stock interest (62,910
shares) in Southern Utah Power Co. for not less than a
$550,000 base price, plus adjustments.
Power Co.
June 2 company announced it plans to finance and
per¬
Co.;
Valley Gas Pipe Line Co., Inc., Houston, Tex.
Jtihe 27 company sought FPC authorization to construct
a $144,500,000 pipeline project to
carry natural gas from
would be
stock.
Stuart & Co. Inc.; Drexel &
Rhoades & Co.; Lehman Brothers
•.
Banking circles speculated that
Finance
reported that company in August is ex¬
pected to register with the SEC additional shares of its
be
ceed^
Utah
SEC
.
was
will
parties" for the sale of its
8
■
iey & Co.; Riter & Co.
sales
"7"
early in 1951, involving
'
Ladenburg, Thalmann & Co.
stock
Electric Co. to undertake negotiations with "all interested
com¬
new company to be
formed by United States & Inter¬
national Securities Corp.: Dillon. Read & Co.; F. S. Mose-
Seaboard
by additional financing
Southern
June
expected to be
future and offered
(jointly); Merrill Lynch, Pierce, Fenner & Beane; Kid¬
der, Peabody & Co.; F. Eberstadt & Co.; Allen & Co.;
June 3
least $10,000,000
at
of
and
bidding not exceeding $20,000,000
first and refunding mortgage bonds.
Probable bidderl:rHalsey, Stuart & Co. Inc.; Union Securities Corp.;
Kuhp, Loeb & Co.; White, Weld & Co.; Stone & Web¬
ster'Securities Corp.; Salomon Bros. & Hutzler.
Pro¬
was
registered with the SEC in the near
for sale to the highest bidder by the Office of Alien
Property. Probable bidders: A G. Becker & Co. (Inc.),
Union Securities Corp. and
sale
bond
(jointly); Kidder, Peabody & Co. and
Pierce, Fenner & Beane (jointly).
rights. Probable bidders for bonds: Halsey, Stuart & Co.
Inc.; Blyth & Co. and Kidder, Peabody & Co. (jointly);
First Boston Corp.
June 7 company announced stockholders will vote Aug. 9
authorized
Co.
approved
issuance and
the
the
Halsey,
bidders for
$30,-
the sale of at least $5,000,000 additional common stock
which will be offered to stockholders under..preemptive
held.
Reynolds Metals Co.
increasing
be used to refund
first mortgage bonds, with respect to which a declaration
is expected to be filed prior to Nov. 1, 1950, to be fol¬
This offering, he said, will be underwritten by a group
of investment bankers headed by Hornblower & Weeks.
on
Gas
from
short-term loans in connection with the
Smith, Barney & Co. (jointly); First Boston Corp.
Blyth & Co., Inc.; Harriman Ripley & Co
Inc.;
Kidder, Peabody & Co.; White, Weld & Co.; Salomon
%ros. & Hutzler; Harriman Ripley & Co. Inc. Probable
estimated.at $32,520,financing is expected to
involve
common
Natural
SEC
shares in Sep¬
common
and
be used for construction program,
000 for 1950-1951.
Permanent
approximately 290,shares of the company—on the
for
21
166,604 additional
Loeb,
B?others;
Southern
Light Co.
-and
temporary bank borrowings of
up to $20,000,000 to mature July 1, 1951, the proceeds to
stockholders of
common
share
one
M.
•
Raytheon 7*lanufacturing Co.
to
bonds:
Corp.
June
June 1, Charles F. Adams, Jr., President, announced that
arrangements were being made for an offering later this
Power &
repay
000,000 3y4% bonds and for construction costs.
bonds due 1972.
Probable bidders: Halsey, Stuart & Co.
Inc.; Morgan, Stanley & Co. and Drexel & Co. (jointly);
Kuhn, Loeb & Co. and Lehman Brothers (jointly); First
Boston Corp.
summer
Proceeds would
study
•^Bear, Stearns & Co. (jointly); Union Securities Corp.
Boston
& Co.
to
Carl
summer
First
a
company's construction program, and for carrying for¬
was
The
September, after
or
ward the expansion program into 1951. Probable bidders
reported that company expects to issue
$55,000,000 of bonds.
Probable bidders:
Corp. and Harris, HaU & Co. (Inc.)
(jointly); Halsey, Stuart & Co. Inc.; BlytK & Co., Inc.;
See Middle West Corp. above.
August
project.
Proceeds
used
pipe line in Michigan to cost approximately $1,400,000.
Application is before FPC.
Southern
Co. of
Co.
tember. The latter will be offered to present shareholders
in the ratio of one new share for each eight shares
^
•
the
October, and
an
Co.,
company
Gas
May 23, G. M. Gadsby, President, said company plans to
sell
$10,000,000 of
additional first
mortgage
bonds
through competitive bidding during the first half of
sale of first mortgage bonds, debentures, preferred stock
and common stock in connection with its proposed new
competitive.
or
Corp.;
plans to build a 325pipe line in Utah to cost approximately
Hearings will be held before the Utah
22-inch
$25,000,000.
proposed, under" its amended plan
holdings of 154,231.8 shares of
Co.
Southeastern
later this year, with probably some common stock to be
be
Union Securities
announced company
was
P. S. Commission in
of
Jersey Gas Co.
Jersey
12
Natural
5 it
mile
1950.
exemption from competitive bidding is "requested.
June
Utah
le
filed with SEC, to sell its
Philadelphia Electric Co.
May 5 it was said that there will be additional financing
negotiated
•!&
$34,000,000, of which $11,600,000 will
June 15 United Corp.
Republic.
by Drexel & Co.
*3?
Utah
South
new
underwritten
C.
Brothers.
annuity annually paid by the United States to the
000
Thursday, July 6, 1950
Langley & Co.
in
outstanding
3% bonds, the remaining $4,500,000 to be
The new bonds would be secured by the $430,-
500,000 of
.
Traditional underwriters:
Co.
plans to spend
It is estimated that $6,000,000 of new
money will be required in this year, to be raised by
the sale of $3,000,000 of bonds and 60,1)00 shares of pre¬
ferred stock (par $50). Probable bidders include Lehman
outstanding approxi¬
mately $15,000,000, through the issuance of about $10,bonds, of which there
announced company
was
be spent in
reported that Frank & Co. has been au¬
work
sold.
W.
Carolina Electric & Gas
it
11
the next four years
(Republic of)
was
to
.
*
(Oregon)
May 18 announced company plans to enter into a con¬
tract with an underwriting firm
for the sale of its
capital stock. Initial capitalization and surplus will be
$2,000,000.
Panama
Halsey, Stuart & Co. Inc.;
Securities Corp.
Webster
&
Indemnity Insurance Co.
.
-
an
■
In
any
4
eveijt, our injection of domestic political ideology as
aijtn in a conflict with the Soviets, or with anyone
important
else, would be
a
bad mistake leading to confusion and frustration.
*
*
Volume 172
Number 4922
Continued
The Commercial and Financial Chronicle
jrom page 14
.
.
.
(103)
Continued
from
units
14
page
Helm, President of the bank.
and the
ing sources of savings, adequate
financing will not flow into the
fel¬
low citizens and our children. The
Successful man, who could furnish
the greatest influence, is often the
capital as is
created will not pj&yide its bene¬
fits and its responsibilities to the
millions who might otherwise own
and the one
Jeast interested in the freedom on
which his success was based.
it.
of
retention
complacent
most
of
independence
future
which
took
our
man
completed
I
Yesterday
';
liberty
our
trip
a
hundreds
of
conversations
America.
and
in
trip
that
From
I
evidence
renewed
received
First: The still free countries to
our
south look to us for advice
;
and
are
divergence
the
by
confused
between our
and
guidance
in
their
today,
that people
have
trust the future
of
dollar.
the
It
actions.
our
They
purchasing
This
extricably bound to ours and any
weaken
which
policies
must
us
inevitably weaken them.
Although I have not visited Eu¬
recently, I am sure that if
my trip had extended there, the
same two facts would have forced
rope
themselves forward.
:
ulate.
to
be
We
met
Freedom
enormous
an
responsibility for freedom in the
world today and you and I must
large part of that respon¬
carry a
rests not only the
people but also
of millions of people
sibility. On
future of
us
future
the
beyond
borders. We may not
responsibility, but our
our
that
want
own
our
wish, does not affect the situation.
is
It
We
in
remain
must
our
the
on
strong
and
our
side
ownership
private
is
which
widespread
that
of
enterprise
of
of free¬
foundation
the
dom. We must know and counter¬
which
the forces
act
ownership
private
counteract
eroding
are
which
forces
the
muse
we
system through valid
dissatisfaction
with
those
who
weaken
bilities
tire
witn
for
success
real
success, we
will further the
of
enterprise
private
freedom
more
careless
fering
turn
us
and
give
no
aid
without
it.
manage
those
to
borders who conduct
our
themselves
should
within or
We
who
seek to divert to government the
ownership of men's property or
tyrants
as
and
the of¬
which
will
profit:regardless of its
a
prospects for success, then
have failed in
comfort to
one
bad,
to
make
ourselves
The
tomers.
have
such
danger
but
that
our
is
cannot
may
cus¬
that
not
be
upon
exhortations
these
and
warnings
apply
To
a
of Americans who are en¬
gaged in the business of raising
new capital for business and pro¬
viding
markets for those
who
want to buy and sell bonds and
group
of those
aid
customers who
will seek
and
disregard our advice.
possible for us to be
of
shares
tell
to
we
and
and
save
work,
Not
a
we
to
we
are
live, the
earned,
work
and
in
All
we
deeply
the
heart
com¬
and
Investment
our
savings
largely channeled into invest¬
ment.
To
a
very
great extent
ownership is dispersed and can
be dispersed among millions only
are
we
not
do
the job.
sound,
If
unwise
the
over
looking to
are
them
towards
America
it
and
to
to
re¬
may con¬
fight.
what
we
of
test,
a
in the securities business
is
arising.- We
in
this
must
struggle,
do
what
I
we
can
and
the
do, direct the
willingness
sav¬
of
our
people to invest wisely.
The
eyes
only those of Texas,
are
upon
ns.
With A. E. Aub Co.
(Special
to
The
Financial
Chronicle)
CINCINNATI, Ohio—Robert W.
Mayer has become associated with
sention. If
A.
planned
or
work
lags, is badly
fails to tap the chang-
/
y
E.
per
than
were
Aub
Building.
&
Co.,
12
177 offers of which
were
for $150 and over, 37
*
resulted
*
Jersey
nounced
from
Union
Trust
seriously
if
affected
rent
control
still
is
in ef¬
distribution of income
approach suggests that units rent¬
ing for more than $125 to $150
the
should be decontrolled at
At
once.
time, a schedule should
promulgated to lower the cut¬
off
point
every
three
or
six
months.
By such a program, as
new housing becomes available we
tne
same
be
will
slowly
rent
control
but
—
eliminate
surely
which should have
place in
permanent
no
peace¬
a
time economy.
DIVIDEND NOTICES
s
ENGINEERING-
COMBUSTION
SUPERHEATER, INC.
Dividend No. 184
*»•
*
*
*
*
*
•
A
of fifty cents (50c) per
the outstanding stock of- the Com¬
all
on
pany
has
to
dividend
quarterly
share
payable July
declared
been
of
stockholders
record
at
close
the
27,
of
1950
busi¬
the
tional
July
has
an¬
that the consolidation of
Franklin
Jersey
J.,
N.
City
National
with
Bank
became
The
5.
Franklin
First
Na¬
effective
on
offices
National
of
the
Bank
two
at
329
Palisade Avenue and 3487 Hudson
Boulevard,
Jersey
known
the
as
City,
will
Palisade
banks in
According
the
of
Office
The
well
as
election
and
Expediter,
Housing
took
trolled
with
apartments
Vice-Presidents of the Fidelity
and
Deposit
land and its
ican
of
of
Mary¬
subsidiary, the Amer¬
Bonding Company
more,
uel
Company
Harold
C.
in Topeka,
for example,
Thus,
increases
rent
Kansas,
were
re¬
ported for 11% of the $50 and over
DIVIDEND NOTICES
as
Treasurers,
President
cer,
was
of
the
parent
COMPANY
STOCK
a
fidelity de¬
partment
since joining the com¬
in 1910. Mr. McCahan, whose
appointment as head of the com¬
LOWELL ADAMS
FACTORS
IS, 1950 to Stockholders of record at the close
of business July 20, 1950. Transfer books will
remain open.
CORPORATION
Or*
Checks will be mailed.
EDMUND HOFFMAN.
Secretary
Common Stock
The
ATCHISON,
TIIF
SANTA
New
York,
of
Board
The
clared
N.
COMPANY
Y„
Directors
of
dividend
a
One
June
27,
clared
1950.
has
this day
de¬
Dollar
and
Fifty
f$1.50) per share, being Dividend No.
150,
on
the Common
Capital Stock of this
Company, payable September 1, 1950, to holders
of
said
Common
Capital Stock registered on
the
books
of
the
Company
at the close
of
business
July 28, 1950.
Dividend
checks
will be
mailed to holders
of Common Capital Stock who have filed suit¬
able orders therefor at this office.
Cents
C.
D.
WILSON,
120 Broadway,
of
Board
of Lowell
Corporation has de¬
quarterly dividend of two
one-half cents (2V2^)
share
and
on
Dividend
Directors
Adams Factors
AND
TOPEKA
RAILWAY
FE
DUNNING
Executive Vice-President and Secretary
Common Stock of this Company, payable August
an¬
or¬
dividend No. 246
a
of business Sept. 8, 1950.
at the close
an
June 29 by B. H. Mer¬
1950,
twenty-five cents (25g) per share
was declared
by the Board of Direc¬
tors out of past earnings, payable on
Oct. 2, 1950, to stockholders of record
On June 27, 19S0 a quarterly dividend of
seventy-five cents per share was declared on the
Hopkins and Miss Mabel Shaw
on
On June 29,
F.
Secretary, and of Sam¬
Assistant
Mfg. Co.
of
AMERICAN
Balti¬
of
Nuttle
The Yale & Towne
246th Consecutive Dividend since 1899
CAN
Ho¬
Philadelphia, Pa.
27, 1950
YALE
lower
rents.
Avenue
Robert
JOHNS HOPKINS, Treasurer
June
centage increases than did decon¬
be
McCahan, Jr.,
THE UNITES GAS IMPR0VEMENTC0.
smaller per¬
showed
place
August 31, 1950.
a
renting at $50 a month and over
had any increases and where rises
COMMON
G.
of
Elmer B.
quarterly dividend of 35c
share on the Capital
par value $13.50 per
share,
has
been
declared,
payable September 30, 1950,
to
stockholders
of
record
concerning
proportion of apartments
*
*
A
per
data
to
Hudson County.
*
STRAUSS, Treasurer.
OTTO W.
Stock,
of
Bank
the
July 13, 1950.
ness
York atea.
smaller
*
City,
advertisements in
of
number
New
a
the
Common
Stock of this
Cor¬
poration, payable August 31, 1950
of
such
stock
of
record
to
holders
at
the close of business August
15,
1950.
E. L. North,
Assft. Secretary
Assistant Treasurer,
New York 5, N. Y.
announced, had previously served
as
assistant
General
Counsel
was
an
and
OC£
attorney
in the claim
department. Mr. Nut¬
joined the F&D in 1920, fol¬
lowing service in the Marine Corps
tle
American Car and Foundry
Company
in World War I. Mr. Hopkins has
been associated with the F&D and
New York 8,
WAGNER BAKING
30 Church Street
There has been declared, out of
capacities of security analyst and
the fiscal year
assistant
dend
to
the
Treasurer.
Miss
Shaw, whose election as Assistant
Secretary in February, 1948, made
her
one
of
the
first
two
women
of
ferred
stock
on
of
the non-cumulative pre¬
Company outstanding,
this
payable July 18, 1950, to the holders of rec¬
ord of said stock at the close of business
become junior officers of the
F&D, has been associated with the
Transfer books will not be
F&D since
be
to
1919.
*
*
*
July 11, 1950.
mailed
by
June 29, 1950
Net
Guaranty Trust
Company of
the
for
Wagner
24
Baking
Cor¬
ended June
weeks
1950, alter deductions for deprecia¬
tion charges and
reserves
for Federal
Taxes are $141,737.70.
17,
providing for the dividend re¬
of the preferred stock for
521/2c per share was
earned on the common stock outstand¬
ing compared
to 92c earned in the
After
quirements
the 24 weeks period,
12
weeks
24
Sales
for
overall
the
weeks
of 1949.
24 weeks
decrease
weeks of
was
C. Allan Fee, Secretary
of
earnings
poration
first
closed. Checks will
New York.
x
With the approval of the stock¬
holders of the Manufacturers Na¬
earnings of
ended April 30, 1950, a divi¬
and nineteen-hundredths per
one
(1.19%)
cent
CORPORATION
N. Y.
its affiliate since 1935 in the dual
of all the world, not
be
decontrolled units compiled by the
stock.
new
from 1916 to 1941
contribute
can
there
Where
month and 30 offered
$100 a month.
Queens and Long Island,
$149
For
panies' claim department recently
opportunity and
not
Bureau of Labor Statistics for the
pany
they
those
fect,
further
Kelly Graham, Chairman of the
nounced
exposed to dissatisfaction and disour
of
sale
as
main strong so that
advice is
investments
will be
increase
the
slavery
All
significant
supporting the position
with luxury incomes
that
dividend
the
member of the F&D's
our
will result and the system
stock
a
while
$75,000
slavery
are
if
by
($75,000),
having
them.
upon
men
the
Bankers
advice,
about
ganization. Mr. Howell has been
ings
of
from
dom
know
Through
ever
Technique
provide
the^r rents should be decontrolled.
less
at
the
world, people who long for free¬
lead
and
en¬
of
its capital as of
$50,000 to $200,000;
in part the increase was brought
19
between
or
symbol of that system.
Function
world
sides
freedom
tinue the
a
are
demand
than
earn
system of widespread
private ownership of production,
we
live
we
perhaps,
the
over
choosing
and
the
$30
Decontrol of Rents
increased
York,
June
Assistant
put their savings to
are
which
us,
before.
y'
only
is
of
An
mitted to
but
wise and persuasive and the
forced
world in which men
free
not
were
need
not
the
perform, would have
have
we
place in
do
vitally
The lives
experience
no
how
you
concerned.
functions
I
stock?
it
both
both
of
under
Technique for
and
norance
times
A
Established in 1864, The First Na¬
tional Bank is one of the oldest
But
these
do
How
back
business
10
page
the
-
by the eagerness, the ig¬
possibly the cupidity
us
lease
insurance
data
will
of
them.
warp
will not rest entirely
advice, it will be pressed
our
from
with
compared
A Workable
Office and the Western Slope Of¬
fice of The First National Bank.
The danger
on
Co.
June 30
on
made,
immediate
personal and
considerations
been
decisions
for
and
decisions
such
enterprise
We
cannot.
proposed
self-sus¬
a
profitable
and
schooled
what
create
may
what
and
should
one
what is good advice
is
financing
taining
no
us
what
and
and
can
Trust
&
announced
Board of The First National Bank
enemies.
our
of
evidence
will
we
was
showed
as
.heretofore," said Mr. Town- no price, 63 were between $100
send. The property was sold to and $149 and 65 were less than
the Monrem Realty Corporation, $100 a month. These data indicate
of which Charles Donner of the that there are many alternatives
E. Donner Lumber Corporation in available in the higher rent cate¬
Maspeth, L. I., is President. The gories so that runaway rent in¬
property
consists
of
adjacent creases are not probable.
buildings
at
192-6-8
Montague
Throughout the country new
Street and 167-175 Remsen Street, building has taken place at a very
Brooklyn.
rapid rate. In 1949, over one mil¬
*
*
*
lion housing units were started in
The election of Thayer Cum- the United States; more than 10%
ings, Vice-President
of
Batten, of this total was in the New York
Barton, Durstine & Osborn, Inc., Metropolitan area. During the first
as a trustee of the American Sav¬
five months of 1950, the total of
ings Bank of New York was re¬ 536,000 starts nationally, far ex¬
cently announced by Henry R. ceeded the total of 353,000 for the
months
of
1949.
Sutphen,
Jr., President
of
the corresponding
bank.
This flood of new building is pro¬
*.
Sp
5p
viding a significant alleviation of
The Oceanside National Bank the housing shortage and helps to
of Oceanside, Long
Island, New explain the marked change in the
part and given
our
as
48%
for which the average rise
26.9%. (See Table III.)
to in our
*
premises. "The banking and
of
No
explain to
our
the control of men's lives.
give
we
aid in
or
issue
any
of
cause
and" make
If
secure.
advice,
of
old
records
our
own
possi¬
10.2%
group,
issue of June 8, page 2377.
Paper
will continue without
interruption at the same address
re¬
into
or
good
20
the plans were referred
company
be
a
with
for
and
as
enterprises
we
actions as well as
talk, firmly place ourselves
in
must,
be carried.
and it must
ours
business
*
Guarantee
title
publje attitude must
our
enterprises
new
bears
by
June
These
concurrent
may
sponsibility and not solely as an
opportunity to profit. If we chan¬
nel this willingness to invest into
America's Responsibility for
America
new
for
closing of the sale of the prop¬
in
which
the
company's
Brooklyn office is located and the
vest.
This
of
erty
again in the mood to in¬
once
rises
Company
and
Bag
was
rises
the
whatever the cause, it seems prob¬
able that
the
American
public
is
Sugar
Union
New York,
deduction. But
a
divi¬
from
Barnard Townsend, President of
Title
Certainly there is evidence
support such
stock
$250,000 to $500,000. In effecting
the increase $250,000 was trans¬
ferred from the surplus account;
mem¬
Continued
of
not
a
His directorships in¬
Holly
*
earnings did not stim¬
countries are in¬
Latin American
the
the
and
power
would
100%
of
as
Company.
hear
surprising in the light of present
our
words about independence,;
government
deficits,
debts
and
personal initiative, private enter¬
"hand-out"
policies. It may be
prise, self-reliance and liberty and
that the renewed flow of divi¬
they see us giving more and more
dends from our vastly expanded
of our lives and personal respon¬
productive capacity, now that that
sibility into the hands of govern¬
expansion has been largely com¬
ment.
pleted, has aroused an interest
Second: The economies of the which mere
and
talk
Trustee
a
Corporation,
Control, etc.
to dis¬
come
now
ber of the Yale Athletic Board of
this
of
causes
public attitude.
changing
be
the
at
guess
may
He is
of the Yale
the
accumulation
enormous
proposed
a
increased
the
face
we
of
Law School.
able for the formation of business
But,
rise in rents for the higher
priced apartments was 13.8% as
compared with 37.7% for the un¬
der $30 group.
Similarly, in Salt
Lake City, 34% of the $50 a month
and over units reported average
tional Bank of Chicago on June 16
Mr.
Hotchkiss
of
dend, the capital of the bank
savings avail¬
savings into business capital.
troublesome facts.
of two
always
not
are
graduate
a
School, Yale University and Yale
probability that there is an in¬
creasing and widespread interest
among our people in converting
miles
have
People
mood to make their
capital.
of
is
clude
many
thousands
Latin
Blair
such
and
system
many
through
me
of
Tne
News About Banks and Bankers
Economy
concerned with the
are
we
46%
the under $30 a month apartments.
Erosion of the
which
with
compared
as
43
16.44%,
was
of
whereas
10.13%.
J.
June
27.
period show an
The first
decline
the second 12
13.38%.
the year the rate of
1950.
V.
STEVENS,
Secretary.
The Commercial and Financial Chronicle
44
Thursday, July 6, 1950
.
(104)
ulation
BUSINESS BUZZ
A
y*
gJ
front
and
farm
wages,
•
right ~to
the
than
more
were
propa¬
a
gandized danger.
Ejkll
A l/tl'
/lffl'U
fcmtheNation'sCapital
labor
-
strike,would be puny. It would be im¬
probable that the country would
go for all-out sacrifices unless the
danger of damage to the home
Washington...
UeMod-tbo-Scen® Interpretations
of
prices,
*
*
*
It is understood that when Mr.
„
C. —Busi¬
D.
WASHINGTON,
probably have to live
%vith two vast uncertainties for
uome considerable
time unless a
full-scale war breaks out. These
©re how much hotter will the cold
will
ness
war
which has turned warm get,
©tnd
how much will
far
So
con¬
cerned, it cannot supply the an¬
swers today
or soon which will
eliminate these uncertainties, for
leaders obviously do
not know what is going to happen.
The Administration originally
nation's
ihe
the
that
proposition
the
voiced
outlook ahead was for two alter¬
white with hope, the
Other black with tragedy. On the
natives,
Administration
did
coun¬
here
necessarily fight an all-out war.
renomination
Administration has been pre¬
with
sented
thesis
the
aggression wherever it might
occur, without
becoming totally
involved in a war on all fronts,
the land, on
the sea, and in the
would
would back down and quit.
other, they might go all
out to fight the U. S. The Admin¬
istration made it clear they were
the
served
be
with
might admit
.©gain, no one knows. On the other
•land, there is considerable opin¬
ion that this outlook of a Black
versus
White alternative might
a
tic and simple/
ian
<5o
might
Russians
of
any
decide
things.
of
number
a
to
They might, for example, extend
their power thrust into another
erea
of potentially weak resist¬
They might do it today or
or
quite some time
ance.
tomorrow
have to react
later.
l
They don't
ight away.'
Reds
the
If
not
the
war
or
U.
next month.
action
S.
against
challenge
could
all-out
an
as
any
expansion,
This would become an academic
argument, of course, if the Reds
decide
to
post-haste.
challenge
file U. S. shows
Since
probably
a
back
mobilize
to
move
mil¬
view to pushing the
eastward in Europe,
would be loose.
war
*
*
*
The argument as to
U. S. has
a
doesn't
whether the
total mobilization plan
have
regarded
is
one,
in informed circles here
as
rather
plan, but
a
its significance is minor. The plan
staff plan.
The National Se¬
curity Resources Board has no
•night wait to mobilize and group doubt drawn up some kind of
their forces when they pleased and plans for every contingency, in¬
where they judged best.
cluding total war and the drastic
controls on wages, prices, rents,
So this will make for uncer¬
profits, and the flow of materials
tainty.
total war would require.
This town, it may be reported.
In the first place, the plan is a
Is very definitely on the optimis¬
tic side, even if all observers do staff plan, without any backing
a
not accept
the simple thesis that
from
faced
down, Russia will re¬
or
cnce
has
aggression.
that
The "neutral" view is
Russia
that what
done
has
by
a
frtippet military foray into South
fCorea, together with the
answer¬
ing U. S. resistance, is to change
the
cold
V/hich
and
war
into
a
warm
easily continue
can
uncertain
more
for
war
warm
months,
perhaps years, without becoming
s>.
.
truly hot
In
this
Itind of
now
on,
all-out
or
uncertainty
the
war
there
U.
are
war.
as
either
been
sources
the
S. faces from
two interesting
Administration
This lack of backing
due
in
part to the fact
National
the
Security
Re¬
Board had been marking
time without
genuine chairman
for some time.
More than that,
however, neither the Administra¬
tion nor Congress has any stom¬
ach to go for total controls until
forced to do
At
the
recent
to
the
Congress.
treat from its general program of
how
would
like
you
a
resolve to incorporate
itself from going through
save
of
same
the
The
again.
foolishness
same
idea
to
was
have
a
standby total mobilization law and
standby
a
precisely
plan
the
agencies
of
defined
minister
of taxes for
war
parking
air-raid
an
off
powers
to
controls.
vast
with
ad¬
The
chagrin
of
World
of
the
at
mis¬
II.
War
It
is
so.
there
of
was
repentance
the
a
idea
Roosevelt's
central
of
a
TV A
Europe.
of
trol
whether
the
civilian
limited
partial,
total and encompassing, is a
trol
be another two-headed
William
when
Sidney Hillman
the
effort
war
front.
were
on
WPB,
and
Knudsen
co-bosses of
the production
It is altogether
likely that
something akin to the Controlled
Materials Plan would be reinstituted.
It
Mr.
clined
denied
tion had
a
that
the
or
to
Standard Gas & Electric
po¬
Television Equipment
plan for the total con¬
of the economy.
Assuming that the "warm war"
extends in geographical and mili¬
Video Corp. of America
Government Employees Corp.
Cinema Television B
Scophony-Baird Ltd.
M. S. WlEN & Co.
ESTABLISHED
40
the
scope,
fort
involved, and not much more.
more
For
Large Appreciation Potential
WE SUGGEST
ex¬
"Wel¬
fare
State," particularly
pubiic
housing,
crop
supports,
and a
travagant trappings of the
could
RIVERSIDE CEMENT CO,
home and heaven too for veterans,
administer controls.
Finally,
if
rare
Roosevelt
Mr.
par¬
tially dropped the "New Deal" for
the
be
duration,
more
Mr.
inclined
Truman
to
do
rily
be
expected
to
go
CUSS B (common) STOCK
mer¬
A leading
in
on.
Assuming
might got
likewise,
hot,
threat
or
that
but
the
short
war
of
a
would
be
excess
bureaucratic snafu which strained
in
the handling of the
tioned
his
"Speaking
the
fact
Frankly" men¬
that
just
a
taxes,
controls, pressure
few business profit margins.
a
review of the Cement Indus¬
try available on request.
Selling about
$9.00
"
LERNER & CO.
--
Investment Securit.es
10 Post Office Square, Boston y
on
„
Tel.
HUbbard
Mass.
2-1990
The reg¬
Teletype—NY 1-971
HAnover 2-0050
Underwriters and Distributors
rent
profits
Southern
v
Analysis of this Company and
grave
damage to the continen¬
*•"'
There
producer of cement
fast-growing
California.
really
assured by the war
general his own particular kit of measures.
the In this connection, Jimmie Byrnes
HA. 2-8780
could be expected to ask for
strange
birds that Mr. Roosevelt liked, to
for the
go
1919
Teletype N. Y. 1-1397
of re-election, tal U. S. or Canada, the Adminis¬
for Mr. Truman has not been sell¬ tration's tactics
probably would
ing himself the "Fair Deal" quite not be greatly different from those
most as long as the late President did
of the Roosevelt Administration.
manage¬
Exchange PI., N. Y. 5
Administration
such
limited controls as were roughly
necessary to
divert the flow of
resources to
the quantitative ef¬
tary
Corp.
Trad Television
Administra¬
Meanwhile most of the
might also be hazarded that
Truman would be
less in¬
(This column is intended to re+
with which it
and heat
a
fleet the "behind the scene" interpretation from the nation's Capital
and may or may not coincide with
the "Chronicle's" own views.)
litical
the haste
adds
by $3 million
up
economy,
and
against
war's
for
Submission of any plans for con¬
be put in even temporary leader¬
ship of the mobilization effort. It
may be doubted that there would
as
Park, Inc.,
Motor
Presi¬ guarantee backed
dent
was
greatly interested in of collateral.,
telling General Clay, selected to
before his death, the
days
was
ever
long term, believed
a
to be 35 to 40 years, and the bor¬
question, no matter how in¬
fallible the plans might be.
To
management of the last war has
submit to Congress the idea of
worn off and with it the resolve.
enacting extensive controls before
Nevertheless, if total war the people were predominantly
breaks out, the Truman Adminis¬
prepared for them, would become
tration could not be expected to an act of political suicide.
That
repeat all the management blun¬ has already been demonstrated by
hangover
a
conclusion
sinners'
and
The city gives the use
a
the window?"
doubted if another Wallace would
In fact the U. S. has
is
near
rower,
ders
pointless.
signs of organ¬
no
ising for an all-out war or want¬
ing one, the Russians, should the
fllack alternative be the outlook,
Channel.
the
to
move
The U. S. in all likelihood would
or
desk
how
profitably.
It does
that they need to choose to meet
the
forces
would start the week after
even
Gilhooley,
raise,
a
every
to
that and the total
ifcot follow that if the Russians ac¬
cept
on
Reds
ready
track down, it doesn't follow
feext
Reds
lions with
are
of
poised to strike the the lessons learned so hardly into
front where the statute so that by a piece of paper
be brought to bear called a law the U. S. could some¬ be occupation commander, of Mr.
economy,
"
The
"Instead
maintaining the civil¬ ment, and
with barely
cars
the property free of rent and fre©
forces
lust work out to be a little roman¬
Boston Common
go
mobilized with the maxi¬
available consistent
totally
mum
after
perhaps
or
combination
a
for 3,500
shelter.
portant military man who doesn't
believe that the U. S. should be
This
until
wait
election.
build
lot
possible, they occupa¬
don't
tional^
directors
RFC
of
to dig out under
and
that this is
it
the
ditions attached to its unique loan
for it at all. It
would be difficult to find one im¬
on
if
RFC, incidentally, got two con¬
lim¬
the hopeful alternative.
may
work out because,
fretting
re¬
Department.
adjourns,
the
after
ited forces.
While the military
pending
surprising
actually
Congress
contending
by
objectives
limited
be
nomination
is that
probably neither country would
profit by a gigantic effort on all
to the maximum capacity
of each nation. The needs of both
for
Congress upsets
the
circumstances
the
not
might
basis of this thesis
the
alone
Under
in the Arctic.
The
the
done to delay, to
was
Commerce
the
to
the tropics, in the Near
East, in the Far East, in Europe,
or
successors
organization plan to transfer RFC
in
air,
leaves
or
sian
on
whether
see
the
that
might be able to fight Rus¬
U. S.
might
On
remain and
to
their
"until
The Truman decision to skip
that
probable
altogether
is
It
encroachment of Russian
i&ower,
them
qualified."
or
fronts
further
upon
function
given an
unequivocal indication that the
U, S. would resist militarily any
the Soviets,
expired
allowed
low because of
one
hand,
one
so
law
Russian aggression
there, that the U. S. must
in accord¬
June 30, he
legal advice tnat the
terms
with the statute,
ance
not fol¬
cils who hold that it does
the
is
are
the
within
their
On the one
probably those
thought.
of
there
hand,
the domestic
be regimented.
as
this capital
economy
schools
Truman,.qaaglected to reappoint
"tHeHirectors of the RFC after
Co mm on with Natural Gas
Investment Securities
"
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