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M/'
MAR 1
W
-v.
>t>
ESTABLISHED 1S39
tfUS.
UBRA«t
Ike Commercial
Reg. U. S. Pat. Office
Volume
168
Number 4714
New
The Stock Market |
:
| An Emphatic Word of
Caution
;i
By M. S. BENJAMIN
*
abandoning
bullish position, calls
attention
to
deflation¬
such
plant
the building of
to meet this demand, the ar¬
capacity
V
if
•
,
for
demand
the
as
goods,
mament
pro¬
and the
have
constructively
gram,
E R P,
d
i
o m
t ed
n a
common
as
•'
.' v,. •
\"
"■
I'f.1','V
;?'??
■,
other
which
have
But
to
high time
the
"new
of
meant
•
the
into net;
gross
In the first
that
trans late
to
structure!
place, it
extent
of
to
us
threat
to
seems
the
new
invest¬
in
ment
Walter. F. Hahn
than
ability
prewar
market
the
more
less
or
road
and equip¬
the
third round of wage increases is ment in the past decade, which
not sufficiently appreciated.
may have meant a smaller rela¬
Last winter there were signs of tive v/age factor.
But probably
growing buyers' resistance, but more important than all other fac¬
the subsequent drop in farm prices tors combined has been the wage
^nd the effbrtsi on behalf of large and price spiral, which for the
corporations, such as Ford and railroads, has meant higher hourly
International Harvester, to lower wages, ; higher cost of materials
their prices in order to bring down and supplies including
fuel, and
the cost of living, promised hope. higher freight rates and
passenger
our
arising
economy
from
(Continued
43)
on page
standpoint
that
*
sev¬
plans
is
to generate
this
prosperity
as 3 means
to¬
securing
mass
.
content-
Perhhp$ the most slirprising step the never-predictable, ment and thus
g
Kremlin has taken for h good while past was the recent blocking ?a
toward
denunciation of Marshall Tito. We say the Kremlin advisr
Com munism.
edly, for although the action was taken by the "Cominform,"
an
organization quite distinct from
the Russian Soviet, no one who has cut his eye teeth has
any doubt about the ultimate source of authority and power
or about the
origin of the action taken against the Yugo¬
which insists that it is
slavian dictator.
are
guesses
is
putting
on
—
just at the moment that Russia
by
observers to have
some
conclusion which may or may not
the
per
yet
as
ceed
tr
has
suc¬
d
e
William Chamberlain
in
anquilizing
explanation of such things
stand out with great
a
deep significance
be sound.
as
on page
(Continued
*An
lain
address
before
Harvard
on page
28)
by Mr. Chamber¬
the
Graduates
of
the
Business
Francisco,
Cal.,
-School,
San
June 17, 1948.
But what¬
these, certain facts
clarity, and from these
(Continued
people, the Marshall Plan is
predicated upon a simple premise:
a
major
requirement
is
that
of them better than guesses.
none
taken
was
its "big show" in Berlin with the outcome in
doubt is taken
—a
meaning of this unexpected action, there
without end
The fact that it
none
which
of
the
As to the real
_
Like its pred¬
ecessors,
a
number of
32)
State and
36)
on page
political
purpose
the
ward
,
there does
to
.
began the present inflation(Continued
Havana
of
alone, the railroad
Maybe They All Will Learn
Curtain
>
ever
the
From
the Iron
prosperity essential
#>t r a n q u ility, >
of
f
fares.
share earnings
material
general
The
1
p
<
But now, as a result of these third
that
Am PFe See If
total
which
have
may
is
it
of
ency,
consider
and
pause
look"
now
exist
eral
less
traffic; man¬
agerial effici¬
com¬
belief that within certain states outside
not
EDITORIAL
may
or
share
stocks.
mon
Maurice S. Benjamin
more
and
Spokesmen for'the State Department have announced that the
Department's plans for European recovery have their origin in the
meant
than;? pre-war
accumu¬
lation of
\\?t v,;b'
'.'J'-.
*
factors#1
—location,
advised
the 1
A.-
7y.\
course,? been
■
continu¬
ally
;,-j
The almost sensational differences in the earnings trends of in¬
railroad companies since the end of the war in 1945 to a
large extent have been due to the upward spiral of wages and other
costs and freight and passenger rates* There have, of
bullish
elements
possibilities
dividual
im¬
pressed by
have
.
share earnings occasioned by wage-price spiral.
per
' v'rv;'
v*
fully
these
up
basis? for calculating future earnings
a
been
have
Company
Asserting false premise of Marshall Plan is assumption that under
existing monetary and fiscal practices it is possible to create
prosperity and contentment iit states to be aided, Mr. Chamber¬
lain holds, until an honest medium of exchange is adopted, pur¬
pose of plan cannot be successful/
Contends only honest ex¬
change medium is one based on a material of value, and cites orgy
of spending, instability and gambling in times of inconvertible
paper currency. ' Sees $1 billion of U. S. gold sufficient to put
Western Europe on gold currency basis.
common
and the relative attraction of individual stocks. Stresses importance
of basic railroad "arithmetic" in light of substantial changes in
We
scene.
denominator the number of shares of
and in this way
60 roads
economic
the
/
Former President, United Light and Power
the important items of railroad income
enables quick comparison of leverage
position? of individual stocks. Gives table of comparative data on
During the past 18 months boom
durable
as
accounts
activity, prices and profits*
factors,
Using
stock, Mr. Hahn sets
factors threatening industrial
ary
Copy
Members of the New York Stock Exchange
economist,
numerous
By WILLIAM CHAMBERLAIN *
Railroad Specialist, Smith, Barney & Co.
previous
a
Currency—Only
of European Recovery
Means
|:v
By WALTER F. HAHN
Benjamin Hill & Co.
Market
Price 30 Cents
Redeemable
Measuring Earnings Trends in
II Railroad Stocks
Senior Partner, v
•
York, N. Y., Thursday, July 8, 1948
j.
Municipal
Lithographing Co.
R. H. Johnson & Co.
Established
—
*
Bonds
1927
—
INVESTMENT SECURITIES
Hirsch & Co.
Bond Department
64 Wall
Street, New York 5
THE NATIONAL CITY BANK
Members New York Stock Exchange
and other Exchangee
15 Broad St., New York 4, N. Y.
*Anortt t-0«00
Chicago
*
'
Teletype NT 1-010
Cleveland
Geneva
Londea
(Representative)
BOSTON
Troy
PHILADELPHIA
Albany
Buffalo
Harrisburg
Syracuse
52 WILLIAM ST.,
OF NEW YORK
Scranton
Wilkes-Barre
Bell
Woonsocket
Washington, D. £.
TENNESSEE
Bood Dept. Teletype: NY 1*708
For
Banks,
Brokers
and
4s of 1960-90
.
BROADCASTING CO.
Distributors of Municipal
'
ACTIVE
TRADING MARKETS
Gordon Graves & Co.
INSTITUTIONAL
30 Broad
OTIS & CO.
(Incorporated)
Established
Street, New York 4, N. Y.
Tele. NY 1 -809
and
.
..
::
fl
Cincinnati
■
Chicago
Columbus
Montreal
OF
BONDS & STOCKS
Est.
1896
Analysis
Grporation
40 Exchange Place, New
York5,N.Y,
Toledo
Buffalo
Telephone JtEetor 2-7340
111
New
other
..r
request
York
Stock Exchange
Principal Exchanges
Broadway, N. Y. 6
WOrth 4-6000
Teletype NY 1-702-3
upon
j
,
ira haupt & co.
Members
120 Broadway, New York 5
Bell System
NEW YORK
OF
COMMON
and
Denver
CITY
& Light Co.
f
Dominion Securities
SUTRO BROS. & CO.
THE
Wisconsin Power
CANADIAN
?
CHASE
NATIONAL BANK
Toronto
Members New York Sbock Exchange
1899
CLEVELAND
New York
-
Connect
Bought—-Sold—Quoted
Corporate Securities
INVESTMENTS
Tel. WHitehall 3-2840
(Fundings)
New York
Wires
THE
HAnover 2-0980
Dealers
UNITED KINGDOM
Underwriters and
N. Y. 5
Teletype NY 1-395
Private
Springfield
GAS TRANS. CORP.
AMERICAN
HART SMITH & CO.
Teletype NY 1-2708
Boston Telephone:
Enterprise 1820
2
THE
(98)
COMMERCIAL.
FINANCIAL CHRONICLE
&
Thursday, July 8, 1948
not
Ouit Economic System in the Unsettled World
Time, Inc.
Bird & Son, Inc.
Memo
By WALTER E.
Request
on
Halliburton Oil Well
BOUGHT—SOLD—QUOTED
New York Hanseatic
-
Broadway, New York
NY
Teletype
7-5GfiO
BArclay
*
"
Corporation
120
;
.
on
• \
collapsed and
prostrate■■
and his followers.
Monetary "Policy
Since the Keynesian
philosophy
philosophy of
Socialism, Socialists naturally em¬
is in
essentials
braced the
the
the
extreme forms of
more
so-called
Deal,
New
which,
after
1935, rested to such a great
degree.. on the Socialist-Keynes
theories; * and " even
the Com¬
*
5
have
have1 been- left
by pursuing courses similar to that
implied in the doctrines of Keynes
.
Spahr, in pointing out trend toward governmen'ally controlled economy since 1932, in line with the
withering and blighting of economic science by ih; Keynesian-Socialist doctrines, deplores departure
from competitive free enterprise system.
Contends Socialism & road to retrogression and urges, in rela¬
tionship between U. S. economy and that of Socialist Britain, and Russia, we.keep ourselves economic¬
ally strong. Sees greatest danger in irredeemable naner, money,, byf which government can run away
with peoples'purse.
• "
Request
on
SPAHR*'(
/-Professor of Economics, New York University
Dr.
Cementing Co.
Prospectus
>
Executive Vlce?Presldient, Economists' National Committee
S:K
,
„'
j
;
.
jn the history of the world.
Governments
nations
found
munists
the
ac¬
program
ceptable and embraced it in prac¬
I.
1-583
tically all its forms.;
The Present Condition of Our Economic System;
The
peace-time
spending
pro¬
Our economic
system today reveals a relatively high degree of government manage¬ grams of our government, begin¬
ment superimposed upon, or mixed with, the elements of private enterprise. This becomes ning roughly late in 1933, and
considerable portions of expendi¬
clear,if we view the present structure in the light of our past.
We must, of course, ex¬ tures during, the war and since,
Lonsdale Company
cept the periof
ods
Bought—Sold—Quoted
wars
almost
Prospectus
tion
ftfC PONNELL & Co.
Members
New
York Curb Exchange
and
i s
characteristic
Rapid
a
move¬
toward
ment
govern-
m e
11
nta
y-
managed
Walter E. Spahr
economy since
1932
Begin¬
ning in
this country was
taken rapidly by our Federal gov¬
—
Joseph McManus & Co.
ernment in the direction of
Members
Neiv York Curb
- managed
economy.
policies
adopted
followed
much more closely those recom¬
Exchange
mended by the Socialist "Party in
its
Chicago Stock Exchange
39
gov¬
political platform of 1932 than
they
did
the
policies
recom¬
mended by either the Democratic
Broadway, New York 6
Republican
or
Tele. NY 1-1610
j
Parties
in
political platforms of that
their
year.
;?The( reasohs 'for* this "develop¬
&
ment
probably cannot be 'sum¬
briefly and at the same
The direction of
the movement, however, is a mat¬
ter of relatively common knowl¬
marized
—*r
time accurately.
Primary Markets in
,
edge.
Gas-Oil
This development
& Transmission Company
revealed,
ap¬
parently, the first case in our his¬
tory in which a political party
willing to use the wide¬
spread and deep distress of a pe¬
was ever
—★-
of
riod
means
Troster, Currie & Summers
Members
New
York
Security
Dealers
can
Ass'n
Teletype—NY 1-376-377-378
a
business recession
as
a
of leading our people rap¬
idly
from
a
highly-developed
private' - enterprise - competitive
system into a form of economy
and political system characterized
by such a high degree of govern¬
ment management.
ment
NATIONAL BANK
oi INDIA, LIMITED
the Government in
to
Kenya Colony and Uganda
26, Bishopsgate,
London, E. C.
In
Colony,
Paid-Up
Reserve
Capital
£2,500,000
conducts
every
banking and exchange
description
business
that
we
have had
an
irredeemable paper money is per¬
of the most noteworthy
evidences of a highly managed
economy, although it is perhaps
£4,000,000
£2,000,000
Fund
Bank
sistency that human ingenuity can
reveal, stand as one of the monu¬
ments to this development of the
haps
and Zanzibar
The
ated themselves with all the per¬
The fact
India, Burma, Ceylon, Kenya
Kericho, Kenya, and Aden
Subscribed Capital
variety of government agencies,
that developed and have perpetu¬
last 15 years.
Head Office:
Branches
rein
a
govern¬
on
one
the least understood by the
of
in
general.
An
public
irredeeemable
Trusteeships and Executorships
ernment's
public
abuse
and
use
for
wherever
these
reasons
finds
one
a
*An
address
b.y Dr. Spahr be¬
fore the Institute of International
Relations,
American Friends
Service Committee, Whittier, Cal.,
July 6, 1948.
■
The Parker
in
position
importantly from
to
'Current
vahie
Price
(6-30-47)
about
du Pont,
31
Milk
HAncock
N. Y.
same
time
estab¬
the
of
over
the
.
$19.44
public purse.
$8.00
per
St., Boston 9, Mass.
There
When
6-8200
Teletype BS 424
CAnat
6-8100
Teleohon# BArclav 7-01OO
Birmingham, Ala.
Mobile, Ala.
so
Direct wires to our
branch offices
are -
ethics
in
CONNECTICUT RAILWAY
with
government manage¬
-There is one development
& LIGHTING CO.
'
science
of
Econo'mics
been
has
people's monetary sys¬
withered by the blighting wind
tem undergoes this fundamental
of Keynesian-Socialist doctrines.
alteration, another far-reaching
and subtle change takes place: It Perhaps, the chief characteristics
of these doctrines are the attacks
is in that nation's standards of
a
/
BOUGHT—SOLD—QUOTED
Circular
Broad
80
Phone
promises to
For
•
-
Marx and others like him, appar¬
i ently goes back in no small degree
to the book, "Economic Conse¬
-
in this country,
Treasury and Federal Reserve
banks
example,
are now
authorized to issue
quences of the Peace," by John
Mayngrd Keynes of England, pub¬
The more direct
lished in 1920.
which they do not
and recent, attack was launched
redeem, do not intend to redeem,1
by Keynes in full-fledged form in
and under law cannot redeem.
1935tl936 when his book, "The
One minor exception is the re¬
General Theory of Employment;
demption of silver certificates in
Interest, and Money," was pub¬
silver; but none of our currency lished.
can be redeemed in gold. In these
Following the appearance of the
instances, it should be observed,
latter book, this country was, and
we have slipped down to a stand¬
still is, deluged with agitation and
ard of behavior in which we now
promises to
pay
activities in behalf of the Keynesgreat privileges—the right,
ian-Socialistic • philosophy by the
to issue promises to pay—without;
too" followers of Keynes.
at the same time requiring these "me,
The Keynesian type of thinking
issuing institutions to assume the
corresponding obligations to re¬ appears to have been thoroughly
grant
"Privileges
or
sponsibilities"
with, and perhaps an
important factor contributing to,
rights without re-s England's
plunge into Socialism.
been,
has
throughout
concept that
was
African
Teletype NY 1-492
'
not honor and does not intend to
honor.
St., New York 4
9-25JM1
BO
on the private enterprise system.
right of
The groundwork for these at¬
institution to issue
pay which
he does tacks, aside from that laid by Karl
respect to the
,
request
upon
Bittner, Edelmann & Co.
any person or
Southwest
Gas
Producing
Commonwealth Gas
Bought
—
Sold
—
Established
Quoted
1856
H. Hentz & Co.
Members
New
•
>
York Stock Exchange
and other leading exchanges
Cotton Exchange Bldg.
N. Y.
YORK 4,
NEW
Bowling
CHICAGO
Green
DETROIT
N. Y.
9-8420
PITTSBURGH
GENEVA, SWITZERLAND
in harmony
supposedly
our
history, a,
unacceptable to
•
The
doer
Keynesian-Socialist
trines
thoroughly permeated
Federal
our
and
they
colleges and
Government,
reached into
and
our
filtered
the high schools, into
and, in some degree,
business circles*.
the press
even into
These doctrines have gone into
our Federal laws and
policies in
other, in
a
HEAD OFFICE—Edinburgh
.
Branches throughout Scotland
,
LONDON OFFICES:
3
Bishopsgate, E. C. 2
Burlington Garden*, W, /'
||
have
in this nation.
NEW YORK 6, N. Y.
1-672
been
The
TOTAL ASSETS
manner
and
or
otherwise
blanketed 'by
im¬
heavy
mortgage is something new in the
history of :;the United States but
f
£141,823,667
the neoplf
taken by the Federal
Government
paired
■
•
64 New Bond Street, IV, I
in which the savings of
Principal Exchanges
\
Charing Cross, 5. IV, 7
49
dissipation of our na¬
tional patrimony to a degree never
Trletvue NY
Incorporated by Royal Charter 1727
8 West Smithfield, E. C!» t
%
Securities
Royal Bank of Scotland
down tc
multitude of ways. All of them
have resulted, in one form or an¬
Goodbody & Co.
_
MY 1-1557
HAnovor 2-0700
New Orleans. La.-
the in¬
the
Members N. Y. Stock Exchange and Other
BROADWAY
York 4, N. Y.
25 Broad St., New
We
people deprived of the closely related to our drift toward
Statism which deserves brief de¬
right Of private property' in- gold,
and, consequently, of any effect¬ scription because of its far-reach¬
ive control over the public purse, ing significance. It is the develop¬
ment of recent years in the field
the government is free to issue its
of Economics.
promises to pay as it sees fit and
to buy with them what it chooses ^ The State of Economic Science
to buy.
"—During the last dozen years, the
: /
With
seen
115
York Stock Exchange
Members New
dividual is concerned.
down
share
Homsey Co.
Teleohone
South
Co!
Steiner, Rouse &
the
multitude of ramifications in
metallic money that is depreciated;
at the will of the governments ment.
British Securities and
(6-30-47) $9.60
Bought—Sold—Quoted
and
use
a
Net current assets
Louisiana Securities
funda¬
far as the independence of
1
Canadian Mining
Canadian Banks
expanded aircraft
;this
many other ways
veloped governmentally-managed;
some', obvious,
some
subtle, in
also finds this par-'
which the pr.vate enterprise sys¬
ticular essential element—an irre¬
deemable paper currency or a; tem has been curbed and loaded
Canadian Industrials
prografn.
Book
the
at
universities
benefit
■ -
.
economy one
We Maintain American Markets For ;
is
on
lishing obligation to redeem.' We
a
-
highly-de¬
Manufacturing complete line of pre¬
Company
without
soon
fittings and valves,
30)
Alabama &
mental characteristic of a highlydeveloped governmentally > man¬
aged economy. We have acquiesced
in the grant of power and priv¬
ilege to issue promises to pay
abuse
that
Common Stock
couplings,
taken
.
Appliance Company
cision
have
right of private
of the. property in gold, a right that has
in their own-hands.
purse
is
It
we
gov*. have, ldst
deem their promises,
also undertaken
on page
.
have lost control
spending, and they can,-keep
the ultimate control of the
our
The almost endless number and
Bankers
maintain
a
The
Exchange
DIgby 4-3122
a
ernmental^
New York Stock
gold-coin or
gold-bullion system gives them,
if- they: can
convert into - gold
upon demand the promises to pay
issued
by
the
Treasury
and
banks, they can put a sharp, brake,
upon the volume of such; prom¬
ises that can be issued safely „.they
dependence which
govern¬
(Continued
money
a
>
ment.
2-7815
REctor
is an integral pkrt :«s; -1
privilege and
It is an ear¬
governmentally - managed dangerous power.
mark of power to abuse and of
economy. A domestic gold-coin or
gold-bullion standard and a high dictatorship, ■ ••
degree of freedom in a private
With our abandonment
of
t
enterprise system go together. A gold-coin standard and system,
highly developed governmentally- and with the infliction upon'us o!
managed economy could not.func¬ a system of irredeemable papei
tion if the people .retained the in-- mortey and Ian overvalued silver,
paper
of
lives,
property
BROADWAY, NEW YORK S
Tel.
.
peo¬
oehavior,
of
York Stock Exchange
New
120
■
*
com¬
of
ple's
v
i
plete domina¬
Request
on
-
major
when
AMOclated Banka:
'
Glyn Mills & Co.
William*
Deacon's
Bank, Ltd.
.
COMMERCIAL
THE
Number 4714
168
Volume
I NDEX
Articles
Redeemable
and
News
Chamberlain
Cover
_
Measuring Earnings Trends in Railroad Stocks
—Walter rF. Hahn
FINANCIAL
S.
Benjamin—
-
Cover
i
Market
E.
Spahr
;
y
;___
—August Huber
IIovv to
2
___________
_
3
_____
Buy Stocks and Bonds
;—Donald L. Kemmerer and Burton C. Hurd
;
Export Control:
—J.
Mishell
4
Instrument of Foreign Policy
•| general business for
George
4
—_
Prosperity?—Alfred C. NeaL~______
7
is
Status. o£ Fuel Oil Ayailability-^Jbhfi W: Boatwright-8;
'
'V
I
i,
ft
Relations—Earl Bunting
&
„
mount
tion
-
6
Monetary Fundi Official: Outlines ^teps.
Toward Currency Stabilization and
..;
and
Multilateral payments. ' 9:
11;yy
Bank for International Settlements Reviews Gold Black
Markets and Hoarding
NAPA
Committee,
More
Headed
by
Robert
('.
Confidence; in> Business, Outlook
Swan ton,
__ _ _ _
i
_ _
Dollar
16.-.
course,
the-
is
.
"
C.orpQrat6\Prqfits.iIi:.^^
;
21
__
First National Bank qt Boston Warns High Taxes* Are "
vv'
\
tially
!
•
,
Hennessy Advocates Changes in Type of
Stockholder Reports
»'■ SEC Reports
'
demand
- v
.-.
/'
effective
Export-Import Bank Grants Credit to Swedish Concerns____
John Haskell Heads ECA Mission to Sweden
" SEC Invites Views
_
Securities
Coming Events in the Investment Field
v
Dealer-Broker—Investment Recommendations
Einzig—"What Price Marshall Aid?"___
Mutual
NSTA
*
,
IIIIIIII
Our Reporter
.
£
7
point balanced.
16
orices
22
tion
Railroad
40,
40
Securities
Securities
able at
Governments.
Prospective Security Offerings
Utility Securities.
__j_
—I'll
Registration.^
The State of Trade and
mal
the
36
reach
14
resent, demand
44
orice
Industry
the
of
would
£
the
United
all-time
an
record
level, 70% over 1939,
equal gain over 1929.
farm
production has
record
-
r
ernment for
New York, 5, N« %
Tel.. IIA 2-8080
all,
huge
do much to ba-lance.available sup¬
We Wish to Buy
Rochester &
Pittsburgh Coal Ccm.
Globe Autamalie Spiinkle:
Davis Coal & Coke Cent.
Gray & Wolfe Corp.
FrM Corp. Pfd.
money
George Birkins Company
40 Exchange Place, New York 5
WHitehall 4-8957
Tele. NY 1-1404
goods and services for
These
purposes.
not available to
sumer
Tele. NY 1-2423
Supply
war goods
satisfy con¬
nevertheless,
the funds spent for them by the
government went into the stream
war
QUOTED
CORPORATION
52 Wall St.
proportions.
supply.
This was created largely during
the war years by heavy govern¬
ment
deficits.
During the war,
huge sums were spent by +he gov¬
;were
—
an
has been the
be
38
SOLD
farm
Forcibly exerting its underlying
the domestic economy
price
In
For
pressure on
avail¬
reductions to
who rep¬
but atnthe lower
at
in
Huge Money
other buyers
level,
of
some
48
__
been
than there
events
of
course
start
is
Similarly,
other things
being equal, the price fluctuations
5
Tomorrow's Markets (Walter Whyte
Says)
Washington and You___
h
States
peacetime
people who can buy at that
price. The next step in the nor¬
46
production
and shows
are
IIIIIIIIIIIIII—HI
Corner
ly
produc¬
are
price level
.-IIIIII__
"
Securities Now in
a
goods
more
20
,
_____.___._l
Salesman's
until
44%.
is
goods continues large¬
unabated and over-all indus¬
trial
Eventually, high
stimulate
would
advance
Demand for
the
supply-demand picture is at
Governments—:
on
(U. S, Bureau of Labor
Statistics).
Since June^ 1946, de¬
spite a decline early this year,
prices out of reach. Giving effect
to
such
price adjustments, the
5
Public
:
;
.
—
/FIRST COLONY
i oL^
"by 110%
usually
41
Observations—A. Wilfred- May^i____
on
BOUGHT
in the United States has increased
that
advance.
on
12
Funds
Notes-
Our Reports
8
17;.
News About Banks and Bankers.
_
.>
10
From Washington Ahead of the News—Carlisle
Bargeron___
Indications of Business Activity
-
o
eventually
can
Forming
Corporation
that
largely, govern (the
prpductiont thTopgh
regulating effective demand.
Yet
oince 1939, the general price level
diminishes
as
Each
upward
price! scale would
normally result in the elimination
of
another group of purchasers
who would like to buy but find
orices
notch
13;
:y;;'
t
demand
Metal
mal conditions
supply-demand factors.
It
elementary to reeognizev that
demand
16;
47
Teletype N. Y. 1-714
nor¬
the
.Cover
Bookshelf____
1908
Broadway
Bell System
products alone, prices generally
have increased 185% since 1939.
Business
Canadian
course
established
comparatively
-epresent important equalizers of
Bank and Insurance Stocks
_
normal
more
been:
under
volume,
U
■
under normal conditions effective
See It (Editorial)
Man's
h,/-■
has
basic
?s
$
It
40
Regular Features
As We
Established
Members N, Y. Security Dealers /sen,
REctor 2-4500—120
This would be in contrast to
prices
prices get too high.
Economic laws tell us that prices
27,
J.K.Rice,Jr.&Co.
success¬
are
31
Proxy Changes.
on
Com.; & Pfd.
U,S. FinishingCom. & Pfd.
accruing to over-all profits from
a rising price, level..
be curtailed if
23
other-means
Dorset Fabrics
.
the. substantial inventory profits
of last year and the other benefits
in
goods indus-
events experience has Shovfrn
Listed Corporations' Sales in First
1948
;
on
Quarter of
-
the
•"
United Piece Dye Works
prices
keener, it would result,, of
ih- lower 1 corporate earn¬
or
iies:
goods—automobiles,
the consumer
In
Finished
finished products could mean
nventory .losses to; many compa-
/
and wages, normally stimulates,
turn,
Texas Gas Trans. Corp.
on
sdtj($e^bii' ihdividu&J; employment
t
•
'
token, a decliae in raw material
prices and reduced selling prices
August Huber
tries.;^.vn;:;v;;
; Daniel J.
4-6551
fully effected to increase general
operating efficiency. By the same
indi¬
durable
100%.
about.
•
ing'power. The alternative would
be employee lay-offs unless labor
productivity is increased substan¬
*
housing, heavy electrical equip¬
ment, railroad equipment,-steel,
virtually all kinds of machinery.
2tc.. Activity in these heavier in¬
dustries, which represent a majoi
19
HaroIdStonierStressesDy namicRanking Needy
■
comes
toward
.leavy
;
i
Tennessee Gas Trans. Co.
getting out of reach of a portion
of consumers and competition be¬
continued
lor
Henry C. Link of Psychological Corporation Holds Public
;• iv Exaggerates
^Concept':-0f ;Higb-'
;
-y
18
Reports
on
•>-,
STREET, NEW YORK.
Telephone: WHitehall
1929.
derh^hd-'b^edueed-through
.
still
3oint
V
Bonds
WALL
goods "prices at wholesale are- up
If, at- some point, effective
,
J _ Ji
Bolivia to Make Offer; for Resumption of* Service
99
96%.
demand.
cations
__
'
Federal Water & Gas Corp.
advanced
sustained
Present
National City Bank of New York Warns of
Expanding
Federal Budget
.--Ut,
•
1*y,
basic
14
Wall Street Committee, Headed by Amyas
Ames, Launches
Information Drive
us!;
on
'■
.
;
.
sus-,
Obvi-
economy
'
^
be
tained.
o'us
.'t
:
how
foundation of a
Finance_____-^_L______
,,
para-.^
ques-*
i$
will
4
^
FederaL Reserve Board. Reviews and Forecasts Trends in
Business
them off
pass
Obsolete Securities Dept.
domestic
long this rec¬
ord high level;
of prices and
produ c tio n
15
Dividend Policy
International
>
%
Roland Robinson Recommends More Liberal Bank
mares,
of change. Sees im¬
favorable.
warns
than twice the $104 billion of the boom
year
more
The/
•
World Trade and- World; Stability—Herbert V, Prochnow^L- .11.
Financial Problems of Railroads—William T. Faricy
13
t
If you have
any dream stocks
that have turned into
night¬
tional Product is
«'
>
time, but
some
DREAM STOCK
economy continues at record levels.
Gross Na¬
currently running at an annual rate of about $245
billion, compared with $123 Mlli6iT ii^3l94X;i $9b billion in 1937; and
6
The New Challenge in Industrial
SELLS HIS
mediate stock market outlook relatively
The
—William A. Kielmann
Wages, Prices, Profits—What Formula Determines
LlCHTtnSTfll
-
MR. BLANDINGS
Co.
&
Says sufficient stimulus has been given to maintain
expenses.
^Savings and Loan Associations Are Not Banks"
.
Spencer Trask
Mr. Huber, after
analyzing present conditions and economic laws
relating thereto, lists as factors maintaining present high peak in
American economy: - (1) greater resort to instalment buying;
(2) expansion of credit and larger use of current income for cor¬
porate purposes; and (3) excessive government and foreign aid
i
Abnormal Factors Maintaining Business at Boom Level
•
Analyst,
3
AND COMPANY
Member^, New. York. Stock Exchange
.—Cover.
Our Economic System in the Unsettled World
—Walter
Maintaining
By AUGUST HUBER
____—
_
(99)
Business at Boom Level
.
The Stock Market—An Emphatic Word of Caution
—M.
CHRONICLE
Abnormal Factors
Page
Currency—Only Means of European Recovery
—William
&
desires
but,
LAMBORN&CO.,Inc.\
99
WALL
STREET
ply and effective demand.
of money
supply.' Inasmuch as
the government was spending far
conjunction with the funda-.
mental importance of price levels beyond its income, the deficit, fi¬
on
basic supply-demand factors, nancing, in effect created huge
the cost of production is a prime amounts of new moneys without
determinant
of
selling
prices. making available, by far, suffi¬
When wage rates and raw mate¬ cient goods to be absorbed by the
increased* quantity
of- -money.
rial costs are high, selling prices
Measured by money in. circulation
are
necessarily high. Since 1939 and private demand deposits, the
NEW YORK 5, N. Y.
In
Published
Twice Weekly
Dominion
'
The
COMMERCIAL
FINANCIAL CHRONICLE
.
WILLIAM B.
I
25
t
V;
Park
11.
DANA
Place,
Bank
y
COMPANY, Publisher*
New
York
8,
N,
WILLIAM
D.
125.00
$25.00
Note—On
oe
issue)
dnd citv
Oth<b
(general
and
news,
Offices:
Chicago
3,
111.
Copyright
etc.).
135
Reentered
ary
25,
8,
"i
as
1942,
Y.,
fluctuations
in
exchange, remittances for for4
subscriptions and advertisements must
made
in
New
raw
material.,
prices
have
in-
supply
money
York funds.
creased 150% and wage
rates have
La
CERTIFICATES
ad¬
Bond & Mtge. Guar. Co.
We
(Continued
,
is.
DIgby 4-2727
about
32)
on page
interested in offerings of
are
*.3;.° '
w
Winters & Crampton Corp.
High Grade Public Utility and Industrial
Common
PREFERRED STOCKS
Miles Shoes, Inc.
Lawyers Mortgage. Co»
Salle
St.,
0613);
State
Lawyers Title & Guar* Co.
C:,-Eng¬
by William B.
Nv
Danaf
J.;
Act
of
Members
March
1879.
Subscription Rates
,
'
Newburger, Loeb & Co.
•
Subscriptions/ in * Unifc-d' Stf tes. ~tl.* 'S.
Possessions, Territories and Members of
Pan-Ameiican Union, $35.00 per
year; in
i
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15 Broad
New
York
St, N.Y. 5
Bel)
Teletype
Stock
*"•
25
1-2033
•
~ "X
r
New
York
Stock Exchange
Broad Street, New York 4
Tel.:
HAnover
V\".
\^
v
J;-
Members
New
York
Curb
Exchange
135 S/La Salle
Tel.:
2-4300
Exchange-
WH'rtehaH 4-6330
NY
"
Spencer Trask & .Go.
Prudence Co.'
second-class matter-Febru¬
the post. office at New
1
-
Analyses available
Y, Title & Mtge. Co.
•
at
under (the
today
Exports—Imports—Futures
-i
S.
Conipanv
York,;<N.
extra.)
•
(Telephone:
1948
-
i
the
Monthly,,
SUGAR
TITLE COMPANY
news/and
Drapers' Gardens, London, E.
land, .6/0 Edwards & Smith.
.>
-
of
—
postage
Monday "(com¬
every
1
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(Foreign
account
postage-..extra.)
Record
5
Raw—-Refined—-Liquid
Manager
plete Statistical issue — market, quotation
record?; corporation news, bank clearings,
state
-
SEIPERT, President
RIGGS, Business
Thursday
vertising
cf
-
Record—Monthly,
(Foreign
Earnings
year..
year.
Publications
Quotation
year.
per
he.rate
Jign
.Thursday, July 8, 1948
Every
and
per
Monthly
Y.
p. SEIJBERT, Editor & Publisher
% WILLIAht ^DANA
.
'
REctor 2*9570 to 9576 -ft.
HERBERT
•
Other
R*g. U. s. Patent Office
*.
5
of
Canada, $38.00
per
Countries, $42.00 per. year.'.*.
Other
and
St., Chicago 3
FINancial 2330
*'
Teletype—NY 1-5
I,
Rnstnri
-
!
Glens Falls.
:
■*
C, E.
on
request
Unterberg & Co.
Members N.
Y.
Security Dealers Ass'n
61 Broadway, New York 6, N* Y,
Telephone BOwling Green 9-3565
Schenectady:
:
-
' "Wofeestef
_.,...
...Teletype. NY 1-1660
'
U-
4
COMMERCIAL
THE
(100)
&
CHRONICLE
FINANCIAL
ExpoitiControl: Instrument of
Foreign Policy
Stocks .and! Bonds*
How f of Buy-
By DONALD L. KEMMERER
•
Associate
Economics, University of Illinois
Professor of
Thursday, July 8, 1948
and
By J. MISIIELL GEORGE
BURTON C. IIURD
Investment Counsellor,
Deputy Director, Export Program Staff,
Champaign, 111.
Office of International Trade, U. S. Commerce Department
intention to reveal secret shortcuts to making a fortune in investments, outline pro¬
buying stocks and bonds and how and where to find information needed. Discuss investment
Authors, claiming
cedure in
no
After reviewing
shifts in world trade resulting from war, Commerce
Department expert gives basic role of export controls as: (1) pro¬
tection of domestic materials; and^2) directing of U. 5, materials
problems of inflation or deflation, business and industrial trends/and intrinsic safety factors of vari¬
classes of slocks and bonds.
Describe advantages and disadvantages of investment trusts and
ous
sum
successful investment policy
up
on
where economic recovery can
(1) get all the facts; (2) exercise patient sludy; and (3) act
your
ment
secret shortcuts to making a fortune in invest¬
ments. We do not know any shortcuts.
Handling investments is not a black art but a mat¬
ter of taking a few precautions, exercising constant care, and then using your common sense.
there is also an ele-<*>
fuck involved, but it is
Admittedly
_
(4) Which are the best com¬ may offer low returns but good
long-term growth prospects. But
panies in those industries?
(5) What should I know about again, if you are easily worried,
who> use care and good judgment
or would be helpless without the
each of my investments?
enjoy most of the luck.
(6) What should I know about money, you should not consider
You have worked hard to ac¬
this course of action, for even at
cumulate the savings you are plan¬ ordering investments?
the
planning
for
(7) How should I watch my in¬ best
capital
ning to invest, or. at least your
growth is difficult.
Can you af¬
father
or
your
husband
has vestments?
of
ment
that the
observation
You Investing?
Why Are
For what
must
do you want
to invest this money?
That will
determine in large part the type
of
investments you
will select.
You
probably fall into one or
purpose
basic
of four
more
classes
of
in¬
vestors.
First,
order
you
cash
in
saving
be
may
have
to
hand
on
for
in
tip or a hunch or be¬
intriguing name^ Make
on a
money
cause
the
invest
Don't
hard.
of
an
cheaply when others, were being
forced to sell.
Lest you find the
analogy implausible though flat¬
tering, remember that anyone can
mind now that you must do this on a modest scale. If you
keep your savings.
Use ! have such ideas in mind, you want
the same precautions in buying
an
easily liquidated investment
investments as you would if you
and should put your money into a
were
buying a farm, a house, a savings
account
or
short-term
business site, or even a car.
For government bonds.
The interest
example, if you were buying a return is low but that is not where
farm
you
would have the soil you expect to make your profit.
tested; you would find out what
Second, you may be setting your
crops the previous owner raised,
money aside for your old age or
what returns he got, on the aver¬
up your
work to
period of years, the
age, over a
condition of
the fences
and farm
buildings, whether the land was
llat or rolling, its drainage, and
much
making
were
loan to
a
information.
other
a
similar
If you
mortgage-secured
a
farmer, you would make
searching investigation
of the property and
character.
If
you
the borrower's
intend to buy
stock, which is the same as buying
a share in a business, or if you in¬
for your children's education. You
be
may
widow and this is
a
your
"all." In that eveht you want more
than anything else to conserve the
principal.
You should therefore
prefer safe and presumably low-
sible course of procedure for you
tell
how to
find the
information you need.
The basic questions to which you
you
where and
should have the
are:
answers
vesting
(2)
my
Do
purposes am
money?
anticipate
I in¬
that
I
the
price level will rise or fall?
(3) What are the best industries
in which to invest?
■
1
;
decided
you may
somewhat
less
vestments.
The
clined
more
conservative
more
to worry,
dependent
income, the
should prefer.
you
are
you
of investments and sort of indus¬
tries you should favor.
risk of
This is the
changing
noticeably
a
price
level.
Deflation
Will
is going
have
we
rising
to
depression and
ing prices such
take?
prices
for
period of fall¬
a
has
as
followed
war? Perhaps you reply that
every
expert, that better
you are no
than
you
that
one,
men
to be guessing
seem
that
and
qualified to give
feel
you
good
a
at
un¬
answer.
Unfortunately, you must make a
decision, or at least you must de¬
cide
whose
to
answer
acccept cn
this controversial question.
all, it is
After
Mishell
scale.
American
goods
George
was
to Europe and Asia.
and
particularly Latin America,
had formerly been largefrom
their
orders
to
further strain
a
A
few
United
world
States
trade.
in
the
In
ol
1947, the dollar
value of exports from all coun¬
tries, including the United States,
was about twice as high as in 1938.
The physical volume of world ex¬
ports
about the
was
same
in
the
two years,
price inflation account¬
ing for virtually all the increase
in
dollar
value.
Before the
war.
will choose.
think
you
;
prices
prefer to hold cash and fore¬
income
go
are
in
order
safe and liquid
to
position
a
in
be
as
as
pos¬
sible, reasoning that the increased
purchasing power of the dollar
will be ample return for
you. You
conclude that this is the surest
to increase the value of
way
principal.
You
avoid
your
common
was
estimated
than
two-
of total world exports in 1938 and
Asia for 16%.
in
Since economic
both
areas
has
re¬
been
too slow to
permit exports in pre¬
volume, a disproportionately
large segment of world demand
war
has been shifted to United States
In 1947, the United States sup¬
plied over one-third of the goods
moving in world commerce, as
contrasted with only 14% before
the war.
In dollar value, the in¬
if you think
Total
rise
was
about
more
than
fourfold.
United States exports were
lated,
will
on
the
market
is
■*.
increase.
stocks.
likely to
If this is your chief con¬
tion,
continue
the
tend
are
return
to
for
will lean towards
you
Stocks
to
share in the
a
from
rise
dividends
and
dollar
the
value of your share in
a thriving
business will
This
$14.5
abnormally
foreign
Canada,
except
validated
tion,
OIT license.)
requires a
In addi¬
March 1, shipments of all
on
commodities
to
Europe
were
placed under export control.
As
result, the scope of export con¬
trol has now more than doubled.
demand
high level of
been super¬
has
value
exports to
than Canada
total
of
destinations
other
rose from $2.9 billion in the third
quarter of 1947 to $3.0 billion in
the
fourth
quarter.
Controlled
exports showed a small change,
from
almost
million,
$712
to
$706
which
90%
were
spite of
a
of
food¬
stuffs, fuels and metals.
In
value
will
time,
some
investments.
ties whose export to any destina¬
markets.
times the prewar average.
income
prices
is. the basic list of commodi¬
List
The
crease
On the other hand
less
at
Europe alone accounted for 49%
covery
Canada
export: control
during both the third and fourth
quarters of 1947. During the first
quarter of 1948, however, 38 iron
and steel mill products, as well as
some other items, principally mis¬
cellaneous grains, were addedt to
the Positive List.
(The Positive
fifths.
;
States to
except
to
subject
of
United
the
from
a
total; in 1947, its share
ownership of a company. Thus if
prices rise and business is stimu¬
s^fer
modest
'
■
approxi¬
the ship¬
value,
destinations
were
pattern
of
on
key statistics will indi¬
changing position of the
the
1;
one-fourth
mately
all
United States supplies.
cate
terms
ments
backlog of de¬
Finally, you may be interested
primarily in increasing your sav¬
ings by buying investments whose
from
a
In
geographic
their
American
their European sources
This shift, together with
mand, placed
exported, the amounts to be
to be
as
the huge domestic
application of controls
exported,
and
distribution.
Europe,
billion in 1947, as
against a 193-3-38 annual average
of less than $3 billion.
In volume
terms,
our
1947
exports
were
approximately two and one-half
with
The
therefore plays an important role
in determining
the commodities
Other areas,
which
importers
advanced.
effectively
most
gram.
not
confined
the world
stocks.
be
J.
Corollary to this purpose, export
controls can play a strategic part
in the European Recovery Pro¬
pressure
for
large
part what type of investment you
in¬
this
quired
be
contributed about three-fourths of
■If.
the
coun¬
re¬
the
however, the Eastern Hemisphere
Your decision will dictate in
to
aid
dodge the responsibility for it.
not
assuring
by
materials
of
by the
and where economic recovery can
furnish
and you can¬
your money
the
on
States,
flow1 of these
distribution
supplied
tries where needs are most urgent
The
several more years, or do we face
a
country
produc¬
on
failed.
Which direction do you believe
the price level
materials
United
resources
to
markets
Ahead?
international
scarce
adequate
shifted
or
the
the
—
only
scale
Is There Inflation
to
United
with
the sort
on
impacts of heavy foreign demand
for goods in short supply.
(2) They are used to influence
economic
States
At the present
important bearing
or
should
for
the
are used to protect
domestic economy from the
the
was
assistance
~
(1) They
.
in
time, however, another factor has
an
are
you
however,
more
in¬
world
better position to
a
the
of
forced to turn
buy and what sorts of industries
may
Third,
much
decide what sort of investments to
risk.
cannot afford the
content
f (1) For what
paralyzed, <£—
tive
going
down, you will lean towards highmoment permit the lure of higher
grade short-term bonds, or you
income to attract you away from
may even consider keeping your
the haven of safety.
You simply
funds in a savings account. Or you
wish to support
yourself wholly, or in part, from
tend to buy a bond, which is the
the income that your savings yield.
same as making *a loan to a busi¬
If this is true, you will tend to in¬
ness,
you
should make similar
vest some of your savings in some¬
thorough investigations.
what higher-yield and therefore
This article will outline a sen¬
and
of
Industry, agriculture, and the channels of trade
crippled throughout the Eastern Hemisphere.
With normal
production
of
many
critical
commodities
wholly
or
partially
were
taking these
have
you
will be in
you
They al¬
ways kept sizable cash balances
and were in a position to
buy
Kemmercr
worked
When
industry.
half years ago saw vast areas
a
the world laid waste.
which of these groups you
belong
depression period.
a
before
three and
war
risks.
you
bargains when some future oppor¬
tunity
presents itself.
Andrew
Carnegie and John D. Rockefeller
made some of their best purchases
L.
The end of the
That is the question you
answer
adopted for compliance with Export
Advocates full cooperation of foreign trade
persons
ford it?
Donald
and sets forth procedures
Control Act.
This article will not reveal to you any
our
be most effectively advanced. De¬
control policy before and after ERP program enact¬
scribes export
conclusions quickly and boldly.
as
.
3
sharp reduction in
the allocation of meat products for
export, foodstuffs constituted
nearly half of the licensed exports
in
the
fourth
quarter.
Non-
principally.coal
metallic minerals,
petroleum, accounted for 22%
and
of
value
total
the
and
exports;
of
metals
controlled
and
manu¬
factures for 18%.
Western Europe Largest Recipient
of Controlled Goods
distribution
The
of
licenses by
of
destination 'shows
Western Europe as the largest re¬
country
lished by the University of Illinois.
your
you
will place
some
of
savings in somewhat riskier
investments
or
investments which
that stock prices rise step by
step with the price level—they do
high output, employment, and in¬
come in this country.
In spite of
cipient, especially of controlled
commodities,
even
though
the
fourth quarter reductions in the
controlled export of certain com¬
modities—meats, coal, petroleum,
but over a period of time
they will tend to rise. Stocks are
^Reprinted from "Opinion and
Comment," May 17, 1948, pub¬
sideration,
record
production, some require¬
ments of basic foods, agricultural
heavily
better than
supplies and
and
tend
American Hardware
Detroit Harvester
Art Metal Construction
Durez Plastics & Chem.
Cleveland-Cliffs Iron Co.
Grinnell Corporation
Crowell-Collier Pub.
Bought
Portsmouth Steel
-
Sold
-
Quoted
Goodbody & Co. ;
Members N. Y. Stock Exchange and Other Principal Exchanges*
115 Broadway, New York
Telephone BArclay 7-0100
105 West Adams St., Chicago
Teletype NY 1-672
to
valuable
rise
also.
That
is
not
to
say
not
j
more
—
income
cash, which returns
and
no
whose
imposed
domestic
the
on
demand
unprecedented
accompanying
industrial materials
are
not yet being met.
To pro¬
tect the, domestic economy; and to
and
ern
products—fell most
the countries pf West¬
and
caused' their
sawmill
on
Europe,
purchasing
share of the total to decline some¬
prices rise.
what from the previous quarter.
influence the direction of overseas The share of Latin America in the
Hoarding or relying on a savings
in the manner most total, on the other hand, increased
account is, in reality, a bet that shipments
compatible with American foreign from 21 to 27% of controlled ex¬
prices will not rise.
policy, the export controls ex¬ ports in the fourth quarter; largely
Perhaps you cannot make up
tended
under the Second
De¬ as a result of the increased value
your mind which way prices are
control Act until Feb.; 28, 1949.
going to move. At present, many
of controlled .exports
of grains,
people think that this year will have been continued and in some
power
declines
as
edible
usher in
depression, which belief
indicates they
should invest in
bonds.
Yet they fear they may be
wrong
a
and
that
the
price
level
instances strengthened.
Role
The
of
role
Export
of
Controls
export controls is
pean
(Continued
on page
24),
basically twofold:
and
The
oils,
other
and
non-ERP
Euro¬
nations received only 2% of
licensed
'
.
fats
foodstuffs.
shipments in the fourth:
(Continued on page 42)
A
Volume
168
Number 4714
THE
COMMERCIAL
M
.'%A>
ilv
A
&. FINANCIAL
pr
j'VVfr- •
'S
CHRONICLE
(101)
Dr.
Palyi to Speak
At Kiel University
b
Steel Production
Electric Output
Retail Trade
and
Price
Business Failures
The
J
As in 'previous periods over-all industrial output" continued to
hold at a very high level the
past week with production in most lines
exceeding somewhat that of the like period of 1947.
■■
:
slight
increase
It
was
of the
reported
United
on
Companiesby
Interest in
-
.
__
Arthur
Wiesenberger, 1948 edition, 328
Arthur Wiesenberger & Co., New York.)
v
-
?
fective
on
W
f
JLJf
ml*.
*
*
v
The most significant economic
development of the past month,
according to "Business Comment," monthly bulletin issued by the
Northern Trust Company of
Chicago, has been the confirmation of a
third
of substantial wage increases.
The amount of increase
be larger than can be absorbed without
increasing prices
round
in most
instances,
says
inevitable
as
a
result of rising costs.
Farm commodities have also
upward price trend after the February break, led by live¬
stock and livestock products.
The all-commodity wholesale price
index is now virtually the same as it was in
mid-January. Farm
products are still below the peak reached then, but other commodi¬
ties
an
higher. In recent weeks only fruits and vegetables, grains,
products, hides and cotton goods have failed to participate in
the advance.
One hopeful factor is the prospect of
large crops in this
of a more favorable agricultural outlook in
country and
important
throughout the world.
areas
"The indexes of production and trade show no
significant break
in the fabric of good business. The
public's income continues to ex¬
pand and retail trade responds accordingly, except for seasonal shifts
in the pattern of
spending. Nevertheless the
inflationary aspects
of the boom
the boom is
"An
held
are
now
ever
the
at
cause
end
of
off."
to be
and
caution, the
more
so
because
exhausing liquid assets
exhausting their credit.
having similar experiences. Products that
war,
are
and
are
a year or
some
less ago
are
are
now
abundant and there
tendency for new orders for capital equipment to fall
developments, the "Bulletin" concludes, "bear watching,
generally optimistic implications of expanded defense
foreign aid spending."
a
the
sj:
#
The demand for many types
of seasonal merchandise increased
May
arrival of hot weather in many areas.
The
dollar volume of retail trade increased
moderately during the
and continued to compare
favorably with that of the corre¬
sponding week
a
year
Budget and basement departments
ago.
tinued to be patronized by a very
large number of
V Wholesale order volume decreased
slightly
the
high
level
stimulated
many
the
of
a
week
demand
Favorable
ago.
for
some
in
weather
seasonable
con¬
shoppers.
goods.
the
in
week
many
from
areas
High prices in
lines caused
There
was
a
wealth of
a
full-length
pany,
Under
charts,
new
trust carrying
analyses
tabulations
the
of
of
a
quadrupling of
42
assumption
funds,
other
that
forward from Scotland sine# the
79
the
1880's
some buyers to be cautious of
long-term deliveries.
considerable number of orders for Fall merchandise.
and
units.
investment
embodies
an
important instrument in today's market place, this book performs
constructive
service
in
a
number
of
a
the least of which
included with unusual
ways—not
liberal
number
of
A
prolonged shutdown at steel
company captive coal mines would
shock to domestic steel
consumers, the nation's defense
program and the European Recovery Plan.
Unless the National La¬
"be
a
severe
bor Relations Board acts
promptly on the petition of the steel firms
they cannot legally, under the Taft Hartley Bill, sign a union
Shop clause without elections the country again faces curtailment in
steel
production which this week is far below the total demand, states
"The Iron Age," national
metalworking weekly, in its current
that
.
Chicago-;district where heavy melting steel is
ton.
up an average of
To
in
to
"turnaround"
with
sizable
a
block
of
an
issue
excepting
the time of purchase of the open-end trust follows
recognized
business practice of incurring expenses in
selling any merchandise,
and is not excessive when related to stock
exchange commissions
and to the
ordinary investor's incurrence of
exchange
ment
bid-and-asked
expense
reflects
prices.
no
Furthermore
the
annual
between
manage¬
Marshall
on page
33)
Plan
in
countries.
Two With H. O. Peet & Co.
(Special
to
KANSAS
Graham
The
Financial
Chronicle)
CITt, MO.—Claude
and
William
W.
I.
Hum¬
phrey, Jr., have become associated
with
H.
West
10th Street, members of the
O.
Peet
&
Company,
2a
New
Brown
Company
Bonds-Preferred-Common
using
15%
up
of
from
hart smith a go
52 WILLIAM ST., N.
Bell
undue extravagance.
But these deductions
for "the kitty" must be
recognized and taken into account. If they
are
related to the attained real investment income instead of to
fortuitous capital gains, in accordance with
investment rather than
speculative purposes,, then the loading charge must be looked on as
New York
Y.
Teletype
Private
Wires
5
HAnovcr 2-0980
NY
1-395
Conned
Montreal
Toronto
two years income and management expense as
consuming
ordinary income. At any rate, the Wiesenberger book
the
a
useful service in
clearing breaking down ordinary income
capital gains for each fund.
The Investment Income
Item
This brings up what is perhaps the greatest flaw in the invest¬
ment company system,
namely the fact that because of both partial
un-investedness and management expenses, the
ordinary investment
income is reduced to a level
considerably below what a true investor
can get from his own direct
investment in the equivalent securities.
From
closed-end funds in
1947
the
net
income was 4.6%
and
from open-ends 4%—against
5.6% from the Dow-Jor.es average.
Thus, the average investment fund is forced to seek the difference
capital gains; which is all right if the trust-holder realizes it
and makes allowances therefor
by putting out other portions of
Iris own capital for income.
In the case of the closed-end fund,
HODSON &
COMPANY,
Inc.
165
Broadway, New York
the discounts at which they
provide partial
or
customarily sell on the Stock Exchange
complete relief from these penalties.
Another wise caveat broached by
Mr. Wiesenberger pertains to'
cautioning against over-emphasis
past performance, and in stressing instead the importance of
other facts such as investment policy,
income-return, and degree of
the
appraisal of management.
In
on
(Continued
on page
43)
Oil
CORPORATION
Davis
Manufacturing, Inc.
Common Slock
COMMON
Price 37'/i<t per
share
Bought—Soldf—Quoted
Orders will be executed
by
STEWART J. LEE & CO.
bis
paper states.
(Continued
flight
problems
at
750
The freight car program
may run into an open switch bjr the
Despite all the talk and bombast in Washington
capital
Pair!
during
rampant bull markets and then only by the special-offer method.
Management costs compose one of the most important factors
10 be weighed in American investment fund
practice. For the openend funds the average buying
cost, or "load," is 73/2% and the annua1
management expense while for the closed-end companies the annual
expense is averaging of the assets. The loading charge or premium
uni vii
Established
MEMBERS
first of next year.
J; jL.
Melchior
columnist, continued examination of portfolios reveals
unwieldiness as perhaps the paramount drawback in the present-day
mutual fund technique—particularly under our
contemporary con¬
dition of stock market illiquidity. Once the beaten
path of the active
stocks is left for actual or near special situations
(which is really the
raison d'etre for professional
management), it is well-nigh impossible
holding back scrap supplies. They don't have
them. They can't get them. And
they are doing everything they can
to get something that at least looks like
scrap, the trade
.
Dr.
this
This is one time the
scrap brokers and dealers cannot be dragged
into the scrap scramble on the
basis that they are bulling the mar¬
ket or that
they are
:
foreign
exchange, and
dalusia Avenue.
Illiquid Markets
25£
•
to
finan¬
O'Connor, Weller & Co., 248 An¬
Unwieldiness
This increase has moved "The Iron
Age" steel scrap composite
(a gross ton—the first change in months. The composite now
stands at $40.91 a gross ion.
a
ex¬
cial,
•
Qne major problem still unlicked is scrap. Even with summer
days when scrap is supposed to be moving fast this week
supplies are
dwindling, demand is high and the strait-jacket put on
prices is
crackipg open at the seams, according to the magazine.
Heavy melting scrap prices are up this week for the first time
in,months in a major market. The break-through
happened in the
up
study
survey
of the steel trade.
an
,
from
STEEL OUTPUT SCHEDULED AT LOWER RATE
DUE TO COKE OVEN CLOSINGS AND HOLIDAY
July
on
for
Yoi^k Stock Exchange.
Mr.
caveats which are
objectivity. In addition to pointing out the advantages of investment Humphrey was previously with A.
E. Weltner-& Co.
companies, such as availability of expert management to the small lay
investor, diversification, some tax favors, marketability (of open-end
funds), Wiesenberger lists the following counterbalancing disad¬
vantages: possible deterioration of management through changes in O'Connor, Weller Co. Adds
(Special to The Financial Chronicle)
personnel, tax laws' obstruction to accumulation of capital reserves,
CORAL GABLES, FLA.—Perry
bad marketability of closed-end
company shares, unwieldiness of
L. Smith is now connected with
portfolio holdings, and recurring management costs.
is the
considerably with the
total
week
New
tended trip
salient
last year's chapter on the open-end type of com¬
summarized
renders
:Js
on
continuing 20-year growth of.
"leakage"
consumers
These
despite
and
the
firms, also,
in short supply
were
concern
larger number of
Business
appears
for
in its third year.
data
leading funds; detailed tabulation
of portfolio holdings; and clear analyses of man¬
agement results, income and dividend records,
price ranges and comparative operating details.
contains
are
cereal
5
Dr.
flew
from
of
uses
the movement in this country and the garnering
of a million participants in the funds, this edition
number
shown
Palyi
features of the
the Bulletin.
Already, continues the report,
of firms,
particularly automobile companies, have an¬
nounced price increases, and the movement in that
direction appears
*'a
on
Europe."
York
In. line with the
A. Wilfred
*
$15.
years ago as a
69-page
paper-bound pamphlet, it now appears as a 328page encyclopedia of information, including an
ft
Kennedy, Vice-
Tuesday, and, in keeping with their threat to strike if the union shop
clause was not made a part of their
contract, some 50,000 of the
nation's 400,000 bituminous coal miners left the
pits on that day.
The companies' current
supply of coal on hand, the Association
states, is only sufficient for a 41-day period, which will not permit
the mills to operate at full
capacity during a prolonged walkout.
pp.
pub¬
"Americ a's
seven
the investment company to the investor;
the background, management policy and
Sunday that the 35-member scale committee7
From latest reports of the National Coal Association on
Monday
of the current week, it
appeared likely that the big steel companies
would be confronted with a strike in their
"captive" coal mines on
issued
a
address
explanation of the function and various
contract affects 80,000 miners and becomes ef¬
new
First
*
lic
•
July 16.
appears to
i;
:
already had signed the.
The
Palyi, Chicago
economist, to
deliver
unanimously approved on that day an
agreement reached late Saturday night by John L, Lewis, United
Mine Workers President, and the anthracite coal
operators. The set¬
tlement provides an increase in wages for the Pennsylvania hard;
agreement.
(Ger¬
invited
Melchior
continuing growth of the investment fund
is found in the just-issued annual edition of Arthur
Wiesenberger's compendium on investment companies. ("Investment
Mine Workers
coal miners of $1 a day. It is understood from Thomas
President of the union, that the operators
Kiel
has
Dr.
in this country
<
.
of
Zone)
Flowering "Investor Cooperative"
*
•!»
*
,
University
British
many,
A fine reflection of the
in
employment and payrolls was
noted for the week with
labor-management relations for the most
part favorable. With respect to some raw materials, it was reported
that they remained somewhat difficult to
obtain, but most producers
were able to obtain an
adequate supply for current production needs.
*
.
•The
Auto Production
Industry
continued
.
By A. WILFRED MAY
Index
%
A
.
Commodity Price Index
Food
'
Observations
Carloadings
*
Stave of Trade
5
63
N.
Y.
SECURITY
Wall Street, New York S. N. YI
w
uvij
iiive
1888
DEALERS
60 Wall Street, New York 5
HAnover 2-0038
ASSOCIATION
Bell
Teletype NY 1-897
iS=
*
6
(102)
.THE
Thursday, July 8, 1943
FINANCIAL jCHRONICLE
&
COMMERCIAL
Savings and-loan Associations Are Not Banks1' Recommends More Libeial Bank
Dividend Policy
;By WILLIAM A. KIELM^NN*
Former President, New York State Bankers Association
President, The Peoples National Bank & Trust Co., Lynbrook, L. I., N. Y.
Holding it is misconception to consider savings and loah associations
as
New York State Bankers Association points /out distinctions > between these financial institutions, and
deplores fact that Federal Savings and Loan Associations pretend to operate as banks. Denies oppo¬
sition of banks to savings institutions as such, but holds duty of bankers to clarify distinction between
a bank of
deposit and a savings institution.
Federa 1.
1 '•
..
"•
•
•
"
■
<♦;
and
Loan
Associa¬
tions
which
has
been
ing
It
c
is
in
and
ple, the customers of savings and
loan associations, who think that
shares
i;ng siip.er-..
forms
of
by
Act
Loan
Owners
Home
of
1933
The Home Owners Loan Act of
deposit which
William A. Kielmantt
not.
1933 authorized the Federal Home
Loan
People generally are. also under
to
Board
Bank
organization, operation, anc
the erroneous impression that the
regulation of Federal Savings and
insurance of these associations- is Loan Associations, giving primary
comparable to that of the Federal consideration to the best practices
Deposit Insurance Corporation and of local mutual thrift and home fi¬
is payable in cash.
•'
nancing institutions in the United
clear that I, and I am sure all the
Section 5 (b) of the Home
Owners Loan Act of 1933 clearly
bankers
shows
At the outset I wish to make it
throughout
York, believe
the State of
that savings
and loan associations have
a
defi-
States.
that
by
Mr.
of
Convention
Bankers
Woods,
N.
Kielmann
the
New
Association,
H.,
June
14,
1943.
was
intended
not
Savings and Loan
should
operate
as
Associations
banks of
address
it
that
Federal
deposit, for it states "nc
deposits shall be accepted." Char¬
ter "K," a portion of section 8,
or
deposits
The American Bankers Associa¬
tion
titled
leaflet
oublisned 'a
ha«
"The
en¬
in¬
Customer
Bank
quires." This leaflet has been re¬
vised January,
1948.
It clearly
sets forth
bank
difference between
the
deposit and a Federa
Savings
and Loan
Association
and I earnestly recommend it t<
any bank for distribution to
its
a
of
the public
New
of
to
nor
some
Fed¬
Savings and loan associa¬
but they do apply to sc]
eral
It shall
many
except for advances.
York,
afford to
Botany Mills Com. & Pfds.
Camden Forge
Dayton Malleable Iron
Gisholt Machine
tion
Stromberg-Carlson
tutions
Warner Co.
24
Federal Street, Boston
Tel. HUbbard 2-3790
10
Tele. BS 128
H. M. Byllesby & Company
PHILADELPHIA OFFICE
Stock Exchange Bldg. Phila. 2
Teletype
Telephone
PH 73
RIttenhouse 6-3717
Stix & Co.
lic to
STREET
language
newspaper
Louis Stock Exchange
Bell Tele. LS 186
PHILADELPHIA
SPOKANE, WASH.
Then
up
You
SECURITIES
For Immediate
or
of
Execution
of
Quotes call TWX Sp-43
Exchange
A.M.,
Pac.
other
from
Std.
10:45
Time:
Orders
Floor
on
to
11:30
hours.
Sp-82
CORPORATION
44 Wall Street-
Members Standard
of
Private
Philadelphia,
Wire
New
New York 5
Brokers
-
Stock Exchange
Spokane
Dealers
-
Underwriters
WHitehall 3-7253
Peyton Building, Spokane
System
York
between
and
a
of
Los
Angeles
Branches
of
these
.
.
see
can
hese
policies has been very suc¬
cessful. About five-ninths of bank
since
bers
the
been
success.
one-tenth
of
increase, probably much less,
due to sale of new capital
for this
reason
situa¬
tion is fairly evident. Except for
diort periods Since the banking
holiday bank shares have com¬
manded a market price generally
from most of their
and
bid quotations are
published, went
above
book
value
only during
1936-1937 and again, briefly, near
the end of the war."
Professor
even
the
from
contends
Robinson
that these two
policies are contra¬
dictory. "It has not been directly
recognized
by
the
supervisory
authorities that their policies of
urging conservative dividend dis¬
tribution and of encouraging mar¬
ket sales of new capital shares are
one with the
large majority of bank
come
to
enjoy an
essentially in conflict
other.
A
shares
have
investment
in
status
market
the
which is influenced
by dividends
paid. But dividends have been
conservative, not only as a pro¬
portion of earnings but also on
the
basis of
value.
book
For
the
period since the banking holiday,
well
as
included
good
Federal
poor
ones,
Reserve
regulation.
can
the capital
sale
policy be pushed with fair¬
ness to existing stockholders? The
damage to them of this policy is
clearly evident. These are ob¬
viously relative questions, to be
balanced
against
such
further
questions as:
(1)
Are
present
levels
of
capital adequate for
risks? (2) Could banks be trusted
to follow sufficiently conservative
dividend policies if left free to
pay out more dividends if they so
desired?"
In answering the
first question,
Robinson
examines the
Professor
history of banking difficulties in
the past and comes to the conclu¬
sion
that
"inadequate
capital
has been
...
■hares. The
and
time,
of banking difficulties. ...
extent evidence is avail¬
The second
Since
banking holiday commercial
bank capital has increased more
han $31/2 billion.
It appears
he
control
same
cause
...
than
At the
never
retained and added to
more
than
dividend
distribution? Certainly that would
seem to be the one way in which
they could make such a policy ef¬
fective, short of rather dogmatic
generous
mem¬
he
not
rather
smile
to
more
holiday
banking
capital accounts.
jolicy has had little
them
years
as
the profits of
member
banks
To
leading
a
basic
or
the
able, it appears that banks which
have failed had neither more nor
less
capital than surviving banks.
It also appears that
ity
was
mate
the
proxi¬
of bank closings.
cause
The fact that
which
lack of liquid¬
common
more
so
.
banks
very many
closed at the time of
were
the
banking holiday have paid out
fully or almost fully to depositors
is evidence that
on
'going
a
con¬
cern' basis these institutions prob¬
ably did have adequate capital."
Capital Position of Banks
With
respect
present
the
to
capital position of banks, Profes¬
sor Robinson argues that "Capital
protection now enjoyed by banks
is greater than it has been at any
time in the past. The liquidity of
the
banking system has never
been so great.
The relative
,
.
.
of ! banking
assets has
never been so high.
The whole
economy has become more liquid
so that all debt obligations have
an
improved position; i.e., the
absolute quality of credit assets
has
generally
improved.
The
ratios of bank capital, net of fixed
assets, to customer loans and non¬
governmental securities are now
quality
...
far
not
1920's.
from
the
In
...
levels
addition,
of
the
the
ac¬
cumulation of earnings is increas¬
ing
rate.
capital at a very substantial
Although during the year.
1947
bank
than
during
loans
increased
more
of record,
the additions to bank capital from
any
year
have averaged only about 7% of
they
retained earnings appear to have
capital accounts, and dividends
and loar,
have been only about 3% of book equaled roughly 7% of' the in¬
associations endeavor to give the
crease in loans. This is a substan¬
which
passbooks
that savings
us'ng
impression to their customers thaf
are in the nature of a savings
bank while as a matter of fact
they
customer
is
actually now
an
Is it
lie
is
these
the
associations
I
j
wonder that .the pub-?
under
shares
that
;
.
-
present
face
the
additional
be
holders 'of
dismal
capital
bank
prospect
in
banks
have
impression
are
that
banks
of
thousands
Savings and
seen
tial risk coverage.
"If
this
reasonable
left
to
is
the
that
choose
,
.
-?■
.
case,
banks
their
iHseems
might
own
be.
"divw
.
policies with a minimum
of -supervisory nagging; V
If
dend.
spect:' banks differ greatly from
banks were freed from supervis¬
other types of enterprise in which
ory prodding, the past record does
new caoital often can be expected
not indicate that they would over¬
to contribute pro rata to earnings
The
and often will increase them more step prbpriety in the matter.
than
proportionately,
So
when profit and dividend record itself
advertising.:; No- bahkss,i sell!' more capital;
they suggests this conclusion. During
(Continued on.page $3)
'
(Continued on page 38) r.-:1. II dilute the earnings available to
of inches of
Loan
"The
expected to increase
earnings appreciably. In this re¬
any
deposit?
value;,
cannot
Public Given False Impression
at
Kellogg, Idaho and Yakima, Wn.
prodding or the natural
:onservatism of banks, the first of
which
to $5,000.
investor.
CORPORATION
PEnnypacker 5-5976
Ac¬
Ac¬
ends by say¬
Federally in¬
bank-like
the
STANDARD SECURITIES
Philadelphia 2
Syracuse
at
BUCKLEY SECURITIES
1420 Walnut St.
in
are
NORTHWEST MINING
Central Illinois Public Service
Request
advertisement
recites some
it
accounts
"All
advertising
Maryland Drydock
"Open e
their services, and it
ing
Seminole Oil & Gas
have
"Systematic Savings
"Ordinary Savings
counts."
sured
Corporation
as:
association
an
counts."
Members St.
words
They
demand.
on
such
reads:
Incorporated
Floor, Kentucky Home'Life Bldg.
LOUISVILLE 2, KENTUCKY
<
associations
advertising has led the pub¬
feel that their accounts arc
from
St. Louis 1,Mo#
1st
on
passbooks
savings account where your sav¬
ings are insured.
Chartered and
supervised by U. S. Government.'
SECURITIES
A
BANKERS BOND m
Data
these
though
payable
used
INVESTMENT
509 OLIVE
Portsmouth Steel
policy. o
their advertising they are
in
their
Debentures
Long Distance 238-9
a
have not said so in so many
Sold
Bought and Sold
m
pursuing
are
forms similar to banks'
Even
Stock
Ashland Oil & Refining Co.
first
The
tional-stock.
was
using words and language which
leads the public to believe that
the
share
investor js getting
a
bank deposit payable on demand.
ST. LOUIS
Ashland Oil & Refining Co.
Common
policies,
possibly get to the appearance of!
banks. They are using forms similar
book
value.
The
share
to banks' signature cards, forms below
similar to banks' deposit tickets, prices of larger banks, for which
and
Bought and
Robinson
points out "the supervisory
agencies have urged two specific
fines'. 'Of action: (1) the retention
of a large proportion of earnings;
in other words,
minimum divi¬
dends; and-i(2) the sale of. addi¬
We do, however, deplore
these insti¬
economic
operating just as close as they can
LOUISVILLE
I.
Roland
be
;hat
a
the fact that many of
Corp.
Traded in Round Lots
Walter J. Connolly & Co., Inc.
.
furtherance of their
in
posi¬
life of oui
entitled to
are
the
in
country.
Prior Preferred
Vinco
ing has no quarrel with the Fed¬
eral Savings and Loan Associa¬
tions as such.
I am certain that
our banks
believe that these as¬
sociations
Kearney & Trecker
RR.
.and
unreasonable.
bave
emphasize that bank¬
I want to
American Phenolics
Maine
un¬
are
realistic'
not earnings of Federal Reserve
of the latter that I do
believe that banking can
remain silent longer.
&
bank-y
.
tions,
BOSTON
B'm
•
policies1 has been continuously
urged since the banking holiday;
the second has had more promi¬
nence during those periods wher
customers.
j
the market price of bank shares
My comments do not aoply Uias approached or exceeded their
State Savings and Loan Associa¬
book value.
tions, which are under the super¬
vision of Hon. Elliott V. Bell, Su¬
"Whether
because
of
super¬
evidence'of indebted¬
issue any
ness
from
visors
int«
forced
be
really want more capital sold in
the markets, would it not be wise
.1
shall not perintendent of Banks of the State visory
reads, "The Association
accept
cannot
liquidation because of financia
inability to promptly meet obli
gations for repurchase of shares
provide for
the
association, but - a.i
an
association
them banks of
Boston
should supervisors pur¬
supervisory authorities
ards.
,
contradictory
two
sue? If the
on
tionship
asks:
therefore
the
of
policies
•
for
led
consider
this weakness."
author
The
"Which
ship in such associations in con
trast with a debtor-creditor relgv.
frown
been
Bretton
They represent .owner-1 points out that
considering
the .relative
accounts.
to
compulsion
of
greatest
overcome
J"
of
has
State
the.
Robinson"
.
cies
bank
these
associations,
York
sor
shaft
■ —
-
the poli¬
of
the
of
*
f.
Aew," Profes¬
Saving:
are
policies"
existing shareholders. The incen¬
tives, then, for market sales of
added bank capital for going in¬
stitutions are weak. It would take
age,
ing
at
number
tne
<$>
'
u 1 v
ings and loan plan of operation
provides for the repurchase o
quired
*An
J
tlw
in
are doing business with a
whose
resources
are
re¬
they
New
rlrnrl Policies
dend Policies'',
adequacy
of
b a n.k capital
forrisk cover-
advertis¬
are
made
Com¬
Divi-
between bank and cus
tomer of a savings bank or com
mercial bank.
The Federal-say¬
that the pub1 i c,
through
they-
are
by Roland I. Robinson, Professor of Banking, The School of
merce, Northwestern University. Writing on "Bank Capital and
Business' 'Re-1.
Associations
:
plea
protest against "forced-draft sale of bank stock" and a
that "banks be allowed to liberalize their dividend
deposit
a
Federal
in
Loan
and
as
additional stock to bolster
or sale of
bank capital.
by law to measure up to
well-established
banking stand¬
on
the
to
Accounts
make
customers
they
are
not
banks.
Our primary concern in
this matter should be for the peo¬
firm
my
their
which
investments
years.
onvic t i
thrift
however,
are,
in
tak¬
form
recent
They not represent itself
institutions institution."
unrealistic, unreasonable, and contradictory, policy of
as
's-...
A
————^;-v;'
—.———-——--—»—-—
nite place in our economy.
zes
-
belief that as your president, I have a duty before turning over my office to;
my successor to apprise this association of anything of sufficient moment which has come
to my attention
during my administration.
Such a matter is the public's misconception
Savings
critic
| requiring retention of earnings
\
It is my
of
"Harvard Business Review,"
Prof." Roland I. Robinson, writing in
i
banks, retiring President of the
Federal
newsoaper
Volurr>°
163
Number 4714
•
THE COMMERCIAL
1
From
'
•
'
''V
FINANCIAL CHRONICLE
•/
Determines
f
"ix
/ :
same
level, but profits
as,prewar
conglomera-'^
There is
^scaVp
fajidito maintain prosperity, and
—
as
same
to discuss the
,
that .isn't!
now
to
record
on
|
iThey
incensed
^
man.
program.
at-Tru-
j
iciyii rights:!
are,
of
wages,
short,
•
Carlisle
ables
"
men
the
as
astute
Hague at least kept their
mouths shut. However, under the
of
the
recent
.boom,
even
he
joined
those
on
•statement
chance.
that
This
Eisenhower
spoke
out
record
with
Truman
'
.
make
cannot be minimized.
man
posed
sible
for
dent
It had been
their
that
father
and
hand
and
the
at
the
as
bona
fide dele¬
This is what happened in
gation.
famous
Taft-RoosOvelt
set-to
Chicago in 1912.
That this
denced
by
Hague's
the plan was evi¬
was
the
appointment
"man,"
Congresswoman
Mary Norton of New
chairman
of
of
the
Jersey,
credentials
as
com¬
mittee.
They don't make any more
practical politicians than she.
So
it
dous
who
was
matter
a
importance
had
>
been
of
tremen¬
when
Hague,
along with
going
Truman, threw in the sponge. The
Eisenhower boom went into high
His
gear.
the
nomination
seemed
on
way.
Then he pulled the rug out from
under the boys.
More than two-
thirds of the so-called Democratic
party
and
practically all of the
left looking silly.
is amazing that the general
leaders
It
are
let the movement in his behalf go
so far.
He may not have felt it
incumbent
another
public
he
But
did.
him
upon
to
statement
he
could
find the occasion to speak on
certain subjects later is interest¬
told
In
this period that he
nitely not available.
As
it
festly
these
was,
got
some
defi¬
was
people mani¬
of
form
encour¬
agement.
It
It
was
seems
would
not
to
a
me
have
pretty
spectacle.
that the
General
been
check.
Don't
extent
of
his
to
a
take
people
were
attitude
that
these
highly honoring him
and to express
his gratitude. They
were simply
using him to knife in
the back his " former commander-
which
were
tionary
soft-pedaling
eign policy
the
for¬
Republic of Haiti Bonds
Called for Redemption
regally than have these
people for the past 15
difficult
for
a
man
years.
of
It is
Eisen¬
hower's stature to consider it an
honor that they should turn to
him to bail them out.
•
Secondarily in the Eisenhower
movement, and giving it the im-
How
has
the
we
inflationary
are
the end of that infla¬
come
for
since
all
the
July 15, 1957, that, through opera¬
tion of the sinking
fund, $327,270
war.
of
these
tificates
the
will
Office
be
made
a
risen
from
6£
June
practical
were
of
1946
purposes
the
of
Port-au-Prince,
„
at
or
when
price
111
the
banks
new
of
were
it
The
per¬
were
pre¬
only slightly i
in
was
1937
8.6%
of
and,
the
national income last year.
Those are the basic considera¬
tions and facts upon which I think
might agree before undertak¬
ing this discussion. Tlow the prob¬
we
lem before
in
what
us
is what ingredients
proportions
will
make
this cake called prosperity last so
that we can eat it and still have
Question Is Vital
This
discussion
far
transcends
the question of who or what group
is right or wrong. The question to
which
have
we
been
addressing
ourselves is vital not just to labor,
not just ot the manufacturer, not
just to the
coupon clipper,
It is
to the preservation of the
private enterprise system and be¬
vital
yond that to the preservation of
that way of life which emphasizes
individual freedom and the dig¬
nity of the human personality.
If
the
American system of personal
freedom, political liberty and pri¬
vate enterprise cannot outperform
the
other
systems
which
have
nearly to dominate the
then we shall all be en¬
in some kind of planned
totalitarianism. That is why main¬
taining prosperity is such an im¬
portant problem.
come
very
world,
gulfed
I
do
not
know whether all
the
members of this panel will agree
on
a
program which
slow
down
and
will at least
which
the
Presum¬
one.
which is
ARE
TO
PLEASED
ANNOUNCE
THAT
MR. ARCHIBALD
(JACK) vK. ROSE
without
removed
unfilled
a
IS
NOW
ASSOCIATED
WITH
US
IN
OUR
large backlog both
wants
and
of
money
savings which they had aecumu
lated during the war. When con
NEW
YORK
TRADING
DEPARTMENT
the
removed
pent-up
demand, supported as it was by
high level of current income and
a backlog
of liquid savings, was
*
were
turned loose in
a
market in which
scarcity and shortage
was
the rule
Prices rose,
Commercial In¬
a
a
''Statement by Dr. Neal before
iorum at the Summer Institute
subsidiary. of C. I. T.^ Financial pf/ ! Social
.
Profits
and
cre¬
real wages began
has joined Commercial Investment fall, wages were increased, and
Trust Incorporated as. Assistant despite
the rapid
increase
in
Vice-President in the bank rela¬
"
discovered
WE
incomes and
bankers,
Corp.
1929,
than it
money
sufficient appreciation of the fact
that 140 million people had high
the
Incorporated is
as
which
were
v.,
controls
cer¬
A. Perry
Waterman, for many
years associated with A. G. Becker
& Co., Inc., investment
Trust
never
the part of labor, business, and
When the war ended
trols
vestment
in
that
consumers.
head office of its New York
agent,
National City Bank of New
tions department.
below
to pay for
part of the cost of waging the
on
Fiscal' Agent,
Haiti,
same
During the war, prices were held
down by government controls and
.by patriotism and self-restraint
either
at
income
The per¬
it.
65 points
removed.
the
I
bonds
bond
that
behest of the Government in
ating this
amount
is
129
cents, more- than
100%. A large proportion of the
increase in prices and wages has
controls
.
have
about
the wartime ratio.
1940.
hourly earnings of indus¬
workers
of
price.
a
centage of profits in the national
vailed
prices
to
is
income
process
cents
form
a
as
.before the war, although be¬
low
higher
far
as
doing their patriotic duty at the
Commercial Inv. Trust
more
ex¬
neces¬
associated—we
process.
Haiti Internal Loan (5%) series A
bonds and bond certificates, due
2re
lived
I
of the institution with
am
emphasize
Banque Nationale de la Republique d'Haiti, as fiscal, agent, is
notifying holders of Republic of
A. P. Waterman Now With
frantic in the realization
at
not
now.
trial
on
may
stop
unhealthy inflationary spiral
now
whirling us around.
high enough and not
saving ably it is the pay for the things I think, however, that we should
which
the people
who receive
enough during the war.
We fi¬
give serious consideration to the
nanced too large a
part of the profits do.' The proper measure following
principles:
war on the basis of a credit ex¬
is not the percentage increase in
(1) There can be no lasting
pansion arising from the purchase total
profits before or after taxes, benefit to the people of this coun¬
of government securities by the
a
continuation of the
nor is it the percentage increase try from
commercial banking system with
(Continued on page 35)
newly created money. I want to in the ratio of profits to sales, noi
issue.
plunderbunders this country has
experienced in my time and who
now
opinions
ing the price for not raising taxes
too far now, or
Daddy will spank. I wouldn't be
surprised if it didn't work to the
go
the greatest
that their racket is .coming* to an
end. No despots in any land have
I
not yet at
York.
Z Mainly they
In my
process.
press-are my own and not
The
in-chief.
in the middle
are
the
:
ment of the bonds and
of
name.
It is
nominees.
the
use
is
How Far Inflation?
of
little ridiculous for him
continued
We
inflationary
an
opinion—and
and
bond 'certificates have been
called by lot and will be redeemed
at 100% on
July 15, 1948. Pay¬
the
It
would
percentage point rise
^'The inflationary process arises
The
in wholesale prices occurred after
Republicans deliberated .in
the [because people want to buy more
light of, what the General might
June, 1946. 36 points of the 70
goods than are available at exist¬
do or say.
The p r o p a g a nd a ing prices and furthermore
they percentage point increase in con«t
sumer prices occurred after June
throughout the meeting, appar¬ have the
money to back up their
1946. And almost 21 cents of the
ently authentic, was that if either desire to buy. Our friend
repre¬
66 cents increase in average hourly
Taft, Bricker or Joe Martin be¬
senting the NAM will, I am sure
came
the nominee he would feel
point out that logically, therefore earnings occurred after mid-1946
it
incumbent
upon
himself
to we must increase the production
Some of you may wonder why
warn"
the
country.
This un¬ of the things that people are able I do not carry through with sta¬
questionably was a potent argu¬ and. willing to
buy in order tc tistics showing what profits have
ment against these three men.
keep prices from rising higher done in this same period. I shoulc
Now, seemingly it is the Gen¬ This would be
altogether desir¬ like to, but in truth there is nc
eral's intention to shape the.con^,
able. However, when we explore measure of profits comparable tc
met of the
campaign. Dewey has the origins of this
inflationary the measures of prices and wages
said
the
foreign policy of the process we find that the
principal which I have given. The price oi
Administration will certainly be
impetus to higher prices arose a package of cigarettes or a bar
?n issue.
The global thinkers and
from an expansion in the- supply of soap can be measured. The pay
spenders had hoped this would of
for a given hour of work of s
money and of money income5
not be the case. It is a
thing that ; which provide the wherewithal given kind can also be measured.
can't stand full discussion,
What
is the measure of profits
to bid up prices. The truth of the
Presumably Eisenhower would matter is, we are now and have comparable to the measure o;'
like to keep the
Republicans in been for the last three years pay¬ prices and wages? Frankly I have
fully justified
weeks ago to express his resent¬ principal
ment at
we
wages
income
erage
of
before
those who communicated with him
uncorrected.
possible that
and
rather than
was
have
gone so far?
Wholesale
have risen by 111% from
1939 to April of 1948, or to more
than, double the prewar level.
Consumer prices have risen dur¬
ing the same period by 70%. Av¬
V:^-; sarily "those
;
would
have been any better off than
are
percentage of return
centage of wages in the national
fundamental
inflation-
of
causes
the
recent past.
Eisenhower's statement that he
make
have
reconveradd that
hope I shall get the discussion
off on the right foot
by reviewing
what has been
happening in the
may
Vice-Presidential
hasten to
I
V-J, Day,
chasing
I
f
committee
are
perity.
he inherited from that father.
could 1 -His shadow hung over; the Re¬
simply be denied their seats in publican convention.
It had ;'a
the convention.
Rump delegations bearing on the
Presidential^ and
hastily organized
recognized by the credentials
Neal
ward in the spiral may not be the
one which results in
lasting pros¬
,
.they
could have been
C.
A.
that
upper
prices
profits
wages,
except their father.
ironic thing is that most
trouble is due to the mess
being
since
remained
im¬
his
the
sion period.
least
each other up¬
...
war
cies followed during the
present
for¬
mula in which
:
ting
are
Presi-
today
nanced the
(
afraid that the
Truman's cockiness ing..
Apparently he is determined
getting the nomination to have some influence ?in the
came from the realization
thatAi| campaign. He has already had
the dissentients seemed to
be getr some.,
about
many
people
the
of his
is
the
investment, all of which have
fundamentally been variously cited as
being
which we fi- comparable with prices and
wages.
and from the poli- I will
say this much about profits
also, had the government controls been
from tnis tine maintained
through the period
country as his
No_ one is respon¬
Truman's
pro-
It
it
in
way
clear,
the
upon
running mate.
And
it
whom
the
is
derives
the
from
brought
gram.
profits increased also. Ir,
the
current
inflationary
process
to
into
activities of .the Roosevelt
'iney have turned against
uoya.
the
no
The importance of
Hague step¬
ping out from under the President
assumed
the
the
had
to
seems
and
unanimous.
-
to
'
Frank
spell
at all.
vari-
need
be
hope, before;
The-picture of this great debaVthe trek to cle, the complete collapse of the
Philadelphia, so-called Democratic party would
got underway.: not be complete without pointing
But such
Bargeron
'
'
any; tered
eco-
nomi'c
them: why, the GeneraL should;be flat-
Jw i t h
out of current in¬
budgetary surplus.
a
-
whatever
theref fect that;
Sd we had the - spectacle of these
Truman'. can't\ twd, diametrically «oppo*sed groups!;wi.n! There
j mpying together in their eomihon
'.were
few, if; misery. It is difficult to see just
any
in national income is
Holds it vital to end inflation
wages
1940.
us to
make, sure that we are all. talking
thing. ' From the title assigned to us it is clear that it was intended for
question of what formula determines prosperity in terms of wages prices
profits,
and*
/,
^
'
,
;
and (3)
other
^
,«
,
or
It is well at the outset of this discussion for
,
about the
1 y a the
Philadelphia conclaveVap-i
•leader qf: the,:proached^ a re the So uthermbolt-'
e
ers.
of Boston
(1) increased production; (2) less spending
come;
j petus. it en joyed, as - the time vf or •
aggregationi
Prosperity?
ALFRED C. NEAL*
still below level in 1929
are
urges:
succeeded in bringing together such a
never
'
tion.
J|f®|By
Vice-President, Federal Reserve Bank
Whatever chances Mr. Truman had for
reelection—undoubtedly!
certainly been destroyed on the eve of the so-called
Democratic conclave.
I say so-called Democratic because-Barnum at'
height of his career
;
Pointing out inflation spiral is continuing, Dr. Neal finds percentage of
-slim—have
the
7
Wages, Prices, Profits—What Formula
By CARLISLE BARGERON
-
(103)
-i
Washington
Ahead of the News
'
&
i
Progress,
Mass., June 29, 1948.
Wellesley
MACKUBIN, LEGG & COMPANY
ESTABLISHED
MEMBERS
NEW YORK
NEW YORK CURB
BALTIMORE
BALTIMORE
1899
STOCK
EXCHANGE
STOCK
f.'
•
EXCHANGE
(ASSOC.)
EXCHANGE
NEW
YORK
8
(104)
THE
Status of Fuel Oil
COMMERCIAL
Pointing out
race
FINANCIAL
CHRONICLE
Availability
By JOHN W. BO AT WRIGHT *
General
&
,
,
Dealer-Broker Investment
,
Manager, Distribution Economics Dept., Standard! Oil Co. of Indiana
Recommendations and Literature
between expanding demand and oil industry's effort to increase supplies is still nip
petroleum supplies will be tight for next 10 months. Notes shift from
It is understood that the
and tuck, Mr. Boatwright predicts
coal to oil for energy,
and
send
to
stock-piling of coal for national security and relief of growing demand
urges
Thursday, July 8, 1948
firms mentioned will be pleased
parties the following literature:
interested
for oil.
Today I shall discuss briefly what is happening in the petroleum supplies field, then
problems apparent in the total energy requirements market/ arid then present a
brief review of recent happenings in the fuel oil burner market. From these brief
reviews,
conclusions
held
The Economics Advisory Commit¬
tee to the Interstate Oil Compact
interpretation
Commission
of the market.
does
not
supply, but it does give
sider first the
to
essary
meet
reduction
an
esti¬
anticipated
supplied
by coal means
that oil and natural gas output has
absorbed
mands.
supply
This
tion.
Are
the
ucts
John
W. Boatwright
thus
Both
be
would
growth
brought to the market
was
creates
both
social
The
estimating
needed.
agencies
oil
all
and
processor,
1,
Ont.,
try—Study—Goodbody & Co., 115
Broadway, New York 6, N. Y.
Also
dum
available
on
others
is
Niagara
Corp., and
Opinion.
using
Laboratories,
Voorhis
&
Co.,
Inc.
•—
K a 1 b,
Broad Street,
appraisal
25
—
New York 4, N. Y.
a
leaflet
a
of
Power
Market
ment
Electric
Co.—Memo¬
1, Texas.
memoran¬
Hudson
Paso
randum—Rauscher, Pierce & Co.,
Mercantile Bank Building, Dallas
Also
available
circulars
are
on
Ideal Cement Co., Southern Union
Gas Co., Southwest Gas Produc¬
ing Co., and Time, Inc.
Insurance Stocks: Basic Invest¬
Characteristics
Mid
recog-
Mont
El
eco¬
nomic problem arises from the
termination of conditions wherein
the
Toronto
Cigarette Manufacturing Indus¬
industry sought a market
Co., Inc., 67
for its fuel oils» on a
by-product York
parently indicate that both esti¬ basis.
5, N. Y.
Today the home owner, the
mating agencies felt that at least
diesel
operator,
the
industrial
this
situa¬
supplies of pe¬
troleum prod¬
estimate
shift
Building,
Du
Investment
Canada.
tremendous
This close concurrence would ap¬
Its
approximately
95% of
increased energy
requirements of the nation.
the
Circular—Schaefer, Miller & Co.,
15 Broad Street, New York 5, N.Y.
ratio of require¬
and economic problems.
de¬
10.3%.
petroleum
in the
ments
estimate
mate of the minimum supply nec¬
con¬
us
in¬
availability of 10.2%
during the first half of 1948 com¬
pared with the first half of 1947.
the
Let
an
of
crease
the
to
Bank
of
Bureau of Mines estimated
nec¬
essary
crude
in excess of 80% of our total en¬
oil, natural ergy requirements.
Today coal
gasoline, benzol and imports, the supplies approximately 45%. This
be
to
including domestic
Companies-i-14th edition
comparative brochure — Coch¬
ran,
Murray & Hay, Dominion
production
as
minimum
Com¬
of
most
will
and
surance
'
justified. The
statistical de¬
tail
Preferred
Stocks considered eligible for
investment by Canadian Life In¬
mon
of the market,
I shall attempt
to draw such
appear
Canadian
,
review
Geyer &
Street, New
—
Wall
Fifth
Avenue
*
Corp.—Cir¬
cular—Seligman, Lubetkin & Co.,
41
Broad
Street, New York 4,
New York,
/
„
Also
Year Outlook —Discussion
Of business
500
?
,»
available
Graham-Paige
data
are
Motors
and
on
Ten¬
activity and economic
fuel oil now compete with each
nessee Products & Chemical Corp.
in 1948 equal to or
events and their possible future
greater | nized that a greater expansion of other and with the
gasoline con¬
than was anticipated?
In what supply than of demand was necdevelopment — Bache & Co., 36
sumer for an adequacy of
Fox
Metal
Products Corpora¬
supplies. Wall
way has demand changed?
Is it essary to restore industry stocks The obvious
Street, New York 5, N. Y.
tion
answer
is that the
Memorandum — Frank
<X
behaving about as was expected? from the low levels reached at
home owner, the diesel operator,
Moore & Co., 42 Broadway, New
Does the
Natural Gas Pipe Lines — An¬
inter-relationship of sup- the end of the year. Our carry¬ and others using the
York 4, N. Y.
previously
Ply and demand during the early over stocks were low because in¬
alysis of status of industry — H.
classified by-product fuel
must
part of 1948 indicate that thus far ventories had been pulled down
Hentz & Co., 60 Beaver
Street,
bid up the price paid for these
Gary
Railways, Inc. — Memo¬
the oil
New York 4, N. Y.
industry has properly adr sharply in 1947 and some restora¬ fuels Ho
where they equal the
randum—Collett & Co., Fletcher
Vised the American
public, the tion had to be provided.
value to the refiner for production
Trust Building, Indianapolis, Ind.
burner industry, the diesel. in¬
New York City Bank StocksAgain taking actual data for the
far
—
dustry, the farmers, and all others
of what
might be expected?
The Bureau of
Mines, on March
25, 1948, issued its forecast of
probable total U. S.
demand, do¬
exports, for the year
mestic plus
1948.
That
agency expected the
demand for the fouaf major prod¬
ucts—gasoline, kerosene, i*esidual
distillate
and
fuels—to
increase
of gasoline. This is happening and,
first three months as published
Quarterly comparison of 19 stocks
as we all know,
during the past
by the Bureau of Mines, estimates winter when
—Laird,
Bissell
&
Meeds,
120
supplies of fuel oils
for the next two months based on
Broadway, New York 5, N. Y.
were tightest,
some opportunists
.American
Petroleum
Institute's
in the oil industry charged even
Railroad Developments
reports, and my estimates for
Leaf¬
more than this,
\
let of current developments in the
June, it would appear that the
The shift of demand also creates
oil industry will achieve an ex¬
industry—Yilas & Hickey, 49 Wall
a
social problem of tremendous
pansion of supplies of 9.9% during
Street, New York 5, N. Y.
the first six months; of 1948. No¬ significance. The energy needs of
this nation are being supplied in¬
tice
that even- this
rentarkable
Realty Bond Price Averages—
creasingly from a source with
growtly'jJ^ieVement is -slightly more limited potentialities and by Index of 200 issues—Amott, Baker
& Co., Inc., 150
below estimated minimum needs
Broadway, New
a fuel that fights wars and
propels York 7, N. Y.
based5 on the (estimated demand.
of
0.4
the demand would be
percentage point behind
slightly
higher for these products during the needs as estimated, and the
this time period. That Committee demand is running approximately
estimated that demand would be IV2 percentage points over that
7.7% higher than during 1947.
foreseen. However, the oil indus¬
try has achieved a greater growth
Now let us see what has
hap¬
pened.
Take
the
first
months' actual experience
lished
the
the Bureau
by
next
two
three
months
pub¬
as
of
Mines,
estimated
from data supplied by the Ameri¬
Petroleum Institute, and, for
can
the month of June, my estimate,
and we have a preliminary ap¬
praisal of demand behavior for
the first half of 1948. The results
were:
Estim. Incr. Over
,
Product
1st 6 Mos. of 1947
Gasoline
7.8%
_
Kerosene
10.4
-
Distillates
18.0
Residual A.-
3.6
-
a
(9.9%) than the expansion of de¬
mand
(8.7%).
Stocks of crude
and products therefore have im¬
proved over last year but they
have not as yet improved as much
or at as great a rate as the need
estimated by oil industry econo¬
mists.
So
clude
far, I believe it fair to con¬
that the oil industry har
properly advised the public con¬
cerning petroleum supplies. The
race
between expanded demand
and the oil industry's effort to
provide increased supplies is still
nip and tuck. The race is not
won,
but some gain has been
8.7%
The demand for the four prin¬
petroleum
products
will
show an increase of approximately
cipal
8.7%
of
over
1947.
percentage
mates
1V2
in
the
This
first
is
points
above
anticipated
over
referred
percentage
demand
six
either
over
sounds
or
the
IV2
esti¬
to.
points
that
months
1
increase
which
like
a
was
very
close
approximation. Actually, it
economy where the sup¬
ply side of the market has excess
capacity. In an economy, how¬
ever, where the supply side of the
market has exerted every possible
effort, a difference of this magni¬
tude becomes of real significance
is in
as
it
an
can
well
mean
dislocations
of
supply, unless the petroleum
industry has been able to achieve
expansion
requirements.
"*n
over
the anticipated
still
There
achieved.
Avg. Four Products
for:
Continuing
appears
(a)
American
to
Turning
advise
to
of
consumer
the
petroleum
readily available
at the present
no
Coal
stage of scientific and economic
development cannot propel the
planes, the automotive and diesel
transportation arid the tractors. A
tremendous,
expanding
market
must be supplied
by petroleum
there
and
is
no
readily available
This fact must be rec¬
y '
1 ,* >
substitute.
ognized.
.
I have taken data
published by
the Department of Commerce on
coal production, petroleum, natu¬
ral
gasoline, and water power.
Each of these has
for
1948
mates
and
been
These
1949.
then
were
estimated
esti¬
converted
British thermal units.
to
to the supply side
Boatwright
meeting of National Heating
Association, Chicago,
111., June 28, 1948.
a
Wholesalers
Railway—
Barney &
Co., 14 Wall Street, New York 5,
New
York.
sis, if the energy requirements of
the country continue to reflect a
close
correlation
conditions,
in
as
industrial
with
has
been
the
past, then there need be
apprehension concerning the
nation's ability to meet its energy
(b) Continuing mightiest efforts
the part of the oil industry tc
bring greater and greater supplies
to the market;
on
the
To do so, however,
increased
quired.
of
load
Television—Review and analy¬
Hirsch
&
CO., 25 Broad
Street, New York 4, N. Y.
sis
fuel
#
troleum
(c)
Avoiding over - optimistic
estimates about adequacy of pe¬
supplies for all possible
wants.
but
Actually, in spite of an amazing
expansion of the petroleum indus¬
try in a period of steel shortage
the
supply-demand relationship
(a) The Haifa refinery was
processing approximately 90,000
American
Company
der
must continue
to show considerabel improvement before we car
the satisfaction of all pos¬
sible desires. As it is, petroleum
assure
supplies will probably continue
be tight during the next ten
to
months at least.
Eastern
It has
day.
a
the
conflict started.
Near
This
in
greater demand upon the West¬
ern Hemisphere, which means ei¬
will
be
diminished.
in Total Energy
Requirements
Now let
look
briefly at the
problem of total energy require¬
ments.
Consider
sources
ments
1918.
us
in
In
of
our
the
the
shift
energy
United
that year,
in
or
that
States
since
coal supplied
effect, how¬
readily be
an
im¬
pact upon the American economy
of almost
90,000 barrels of petro¬
leum
day.
the
require¬
net
per
troleum
The domestic
industry
(Continued
&
Foundry
Circular—A. M. Kid¬
Co.,
1
Wall
Street,
New
N. Y.
American
Woolen
Company,
&
Co., 52 William
York 5, N. Y.
Street,
New
Associated
Transport,
Inc. —
Memorandum—Homer
O'Connell
&
Co., Inc., 25 Broad Street, New
4, N. Y.
York
Bird & Son, Inc.—Memorandum
New York Hanseatic Corpora¬
tion, 120 Broadway, New York 5,
N. Y,
Central
A.
Illinois
Public
Service
Memorandum—Wil¬
—
Fuller
&
Co., 209 South
La Salle Street, Chicago 4, 111.
Also available
are
data
on
Wis¬
consin Power and Light Company.
cannot
on page
& Co., 105 West Adams
Street, Chicago 3, 111.
Hydraulic
Press
Brick
Co.—
Jarnel
E.
Lumber
Co.
—
Data
—
W.
Hoy, 110 East 42nd Street,
New York 17, N. Y.
Also available is information
City
of
Point Pleasant, W.
Flood Wall Revenue Bonds.
on
Va.
1
Kingsburg Cotton Oil Co.—Data
—Leason & Co., 39 South La Salle
Street, Chicago 3, 111.
Lakeside
Laboratories,
Inc.
—
Detailed analysis for dealers only
—Loewi & Co., 225 East Mason
Street, Wilwaukee 2, Wis.
Also
available
International
is
circular
a
on
Cellucotton.
pe¬
Marine Midland Corp.—Analysis
-Paine, Webber, Jackson & Cur¬
tis, 25 Broad Street, New York 4,
N. Y.
Metal
Forming
Current
bulletin
Corporation
—
First
Colony
Corporation, 52 Wall Street, New
York 5, N. Y.
—
Michigan Chemical Corp.—Data
—Prescott &
Co., Guardian Bldg.,
Cleveland 14, Ohio.
Muter
Co.
Memorandum
—
—
Hicks & Price, 231 South La Salle
Connecticut Railway & Lighting
Co.—Circular—Bittner, Edelmann
&
Co., 80 Broad Street, New York
4, N. Y.
Old
Ben
Coal
Corporation—Il¬
lustrated brochure giving
13-year
analysis—Comstock
&
Co.,
231
South La Salle
Street,
Chicago 4.
Continental Baking Company—
Analysis
Outlook—Eastman,
Dillon &
Co., 15 Broad Street,
New York 5, N. Y.
Also
;S'.
Illinois.
■
*>
.
.
1
£v-
and
available
are
analyses
of
Parker
circular
31 Milk
Appliance Company —
du Pont, Homsey
Co.,
Street, Boston 9, Mass.
—
Paramount Pictures, Inc., Rail Di¬
visional
Liens,
Southwest
Gas
Producing Company, Inc.
absorb
39)
R. Hoe & Co., Inc.—AnalysisAdams
Street, Chicago 4, 111.
the United
increased
The
ever; can very
—
Machine
.
di¬
supplies of petroleum
products for Europe, which results
ther that exports from
Street, Chicago 3,
120
Inc.—Circular—Emanuel, Deetjen
minishes
States
&
York 5,
liam
since
down
i'fi
Corp.,
Company
few of them.
shut
s*i
Broadway, New York 5, N. Y.
re¬
ready to absorb any abnormal im¬
pact on the total energy availabil¬
been
—
Air Products, Ins. — Circular—
New York Hanseatic
It will also have to stand
barrels of crude oil
Salle
Illinois.
ration, 100 Broadway, New York Circular—Dompsey-Tegeler & Co.,
St. Louis 1, Mo.
5, N. Y.
ity of the nation. What are some
of these possible impacts?
They
are
infinite.We shall consider
a
South La
case
the
requirements.
Heyden Chemical Corp.—Circu^
G.
Becker
&
Co., 120
lar—A.
Tax Exempt Income — Memo¬
randum—The First Boston Corpo¬
On this ba¬
imports into this country will be
*An address by Mr.
*t
which there is
substitute.
coal will have to take its share of
conserve;
Side of Market
now
certain forms of transportation for
no
every reason
Shift
Supply
c
Northern
—
by 7.2% during the first hSlf- Of
1948.
The
Economics. Advisory
Committee to the Interstate Oil
Compact Commission anticipated Supplies of petroleum are running
that
Great
Memorandum—Smith,
Philip Morris & Co. Ltd., Inc.—
Memorandum—Sutro Bros. & Co.,
120
Delaware
Rayon
Company
—
Broadway, New York 5, N. Y.
(Continued on page 36)
Volume
THE
Number 4714
168
COMMERCIAL
FINANCIAL
&
CHRONICLE
Outlines Steps Toward Currency Stabilization and
Multilateral Payments
High official of International Monetary Fund
stable international exchange until Western Europe f
eliminated. Lists major steps required to enable
European exports to compete successfully in world market*
sees no
is restored and its deficit in international payments
v
A
high executive official of the International Monetary Fund, who does not wish his
identity to be revealed, recently commented on the European payments problem and the
j present impasse in seeking to restore stable convertibility and transferability of the lead¬
ing currencies of the world.; Despite the efforts and work of the International Monetary
Fund, he did not foresee any achievement toward international currency stability, until
Europe takes measures to prevent a wave of new inflation.
"The
European
obviously not in
are<S>
countries
position
a
to
have their currencies made freely
transferable now," the official re¬
marked.
the
"The
balance
war
of
has impaired
payments of the
countries of Eu¬
major trading
rope with the rest of the world.
tions
on
and by
transactions,
exchange
discrimination in interna¬
tional trade and payments.
less
a
new
and
Un¬
manageable
in¬
vertibility, one must first make
convertibility possible.
system of multilateral payments,
There
is
French
no
use,
we
as
primary responsibility for
taking the measure necessary to
ments
ity,
there
without
that
is
just
their
international
with
rests
the
world
European
"The
While they
reasonably expect external
the cooperation of other
countries, it is they alone that can
put into effect the national meas¬
crease
may
for
expanding
basic problem is to in¬
production in Europe. Ag¬
production in Western
Europe in 1947
only
the
that
production
of
was
far below not
level
prewar
recent
establishing fi¬
nancial stability that will enable
bad
harvests account for much of the
deterioration
of
European pay¬
them
ments
and trade and for
to
compete
in
world
trial
of
the
Hemisphere. The
Europe must take
of
10%
increase their production; second,
use more
of their
other
dustrial
major steps: First, they must
in they must
progress
the
Western
countries
during the past year.
On
hand, Europe's indus¬
recovery has made remark¬
able
mar¬
kets, particularly in the markets
It has
pro¬
since the
production
„
•
to
conver-
now
reached approximate¬
no
hope for
workable
a
acting.
it
preach
To restore con¬
could have been reached in 1947
Hemisphere; and fourth, I might
well
have
-
said
first,
(Continued
must
they
on page
of the war. They
important part of
th^f Ijf^^r^nings^from
ices
of
an
various
kinds.
The
and -dislocation
of
de¬
war
\ have made of Europe
a deficiency
dependent upon an imsurplus: from the: Western
f Hemisphere.
Furthermore,
the
4
sharp rise in prices since the fend,
economy
I
port
of the
has magnified consid¬
war
erably their balance of payment
deficit. Europe has carried through
since the end of the war largely
result of aid from the United
as a
-States
and Canada, some use of
the International Bank and
Fund,
and
by very heavy drafts on
monetary reserves.
The internal
tional payments of the countries
of Western Europe still show a
large deficit and their reserve po¬
is •? critical,
This ; is
the
problem that must be mei before
sition
a
'
system of multilateral payments
Can be restored.
"Just to indicate the magnitude
of the problems faced by Europe:
In
-
1947
the
countries
of
Western
Europe had a deficit in their bal¬
ance of payments aggregating $71/2
billion.
European payments with
the world
as
the Western
whole, other than
a
Hemisphere,
balance.
The
Western
were
in
Hemisphere,
dificit
with
the
therefore,
the magnitude of both
Europe's over-all payments prob¬
lem and its dollar problem. Some¬
how, during the next four years
the European economy must re¬
duce its dependence on imports
measures
and increase its
supplies of exports
and services by an aggregate of
$7^ billion; and this must be
done in terms of dollar
payments
and receipts.
"One of the
major purposes of
the European Recovery Program
is to give the countries of Eu¬
opportunity to complete
the rebuilding of their economies
and
to
make
the
adjustments
necessary in their international
Cotton IsTheir BusinessfipHE name ANDERSON, CLAYTON & CO. has beI
almost
come
■*-
synonymous
with
"cotton".
With
headquarters in Houston, its domestic and foreign
branches,
subsidiaries,
cotton is grown
or
and
spun.
partnership in 1904/ and
agencies extend
The firm
now
is
a
was
wherever
founded
corporation.
as
a
For Europe itself, this
will require a tremendous change
in
its
and its relations
with the rest of the world. Europe
economy
will be more
fore the
food
war
and
raw
populated than be¬
and will need
To pay for
flow of imports, the vol¬
of exports from Europe may
a
ume
have
to
be
about
50%
world's largest merchandiser of raw cotton and the larg¬
Keeping
field', the
pace
with its growth in the merchandising
company
has added steadily to its cottonseed
oil mills and cotton warehouses both in this country and
abroad.
145
It presently owns
gins abroad;
2 vegetable
oil refineries in
the
task.
is
obviously
operative effort
on
than
in
the
gram.
>
aid
other
the
countries.
It
a
great
participating
States
and
will
world.
But it must be done. Un¬
less Europe succeeds in
restoring
its balance of payments the world
continue
to
be
unstable' currencies,
of its divisions oper¬
Subsidiaries
California.
branches also include
and
plagued
by
or
insurance company and a tex¬
Some of the subsidiaries in Latin America and
edible products such
cooking oil, and
which
an
one
finished products are
and cotton linters are
shortening
as
of them makes the cans In
marketed.
important
Oil seed cake
by-products.
Man's need for textiles ranks second only to his need
States
role in
and
10
abroad; these warehouses
are
equipped
Anderson, Clayton & Co. play an important
filling both of these primary needs by supplying
material for textiles^ and food in the form of fats
with 37 compress machines and have a total capacity of
raw
2,500,000 bales.
and feed for cattle.
table Securities
published for more than 10
years
by Equi¬
Corporation featuring outstanding industrial ay,d commercial
concerns
Equitable will welcome opportunities to contribute to the further
development of
the South
by supplying capital funds
to
sound
enterprises.
co¬
the Western
Hemisphere coun¬
tries, and of other regions of the
will
farm in
where yields are more
one
impossible
require
the good will and cooperation of
1
acre
and
difficult,
a
United
57,000
for food.
economic
European Recovery Pro¬
It will require extensive
from
a
States and 7 abroad. It owns 20 warehouses in the United
to
the part of the
countries
ates
areas
areas,
greater
'
European
irrigated
84
United
in the Southern states.
believe, a not
It will require
some
16 cottonseed oil mills and
gins in the United States, and 16 oil mills and
proportionately greater
other regions, v
I
in
Egypt manufacture
This is another advertisement in the series
"This
duction
assumed than in other
tile mill.
est worldwide crusher of cottonseed.
than before the war; and the in¬
crease in exports will have to be
but
Accessory to its cotton merchandising and cottonseed
milling activities, Anderson, Clayton & Co. finances pro¬
more
materials from the
Western Hemisphere.
such
The World Their Market
It is the
rope an
payments.
by
restric-
In¬
about
duction in export; third,
consequence
struction
war.
was
greater in 1947 than in 1946.
♦
lost
even
The
sold a great part of
-their
foreign
investments
and
they have incurred large debts as
a
but
years.
*
is
They have
have
.
n
ricultural
and
ures
;;•/
Increased Production
countries themselves.
aid
markets.
pay¬
they must ly the prewar" level., Probably an
convertibil¬ emphasize exports to the Western even higher > level of production
slang, de beler la
tibilite, to 'bleat' the
ternational balance is established,
say
currency
and
financial
policies that will enable their ex¬
ports to compete successfully in
"The
restore
9
pursue
'
four
:
(105)
NASHV I LIE
DALLAS
K NOX VI LLE
T7 ATTTTV A ;T? TrT7
JC/
W.
BIRMINGHAM
NEW
M
E
ORLEANS
M
P H
I
S
U XX/x|D
Securities
NEW
YORK
HARTFORD
CHATTANOOGA
G REENSBORO
AN
Corporation
D
JACKSON. MISS.
BROWNLEE O. CURREY, President.
322 UNION STREET/ NASHVILLE
3, TENN.
TWO WALL STREET, NEW YORK 5,
N. Y.
39)
-
1
10
COMMERCIAL
THE
(106)
six months ended May
Mill!! Illinois:: Brevitie
On
15-year 6% convertible sinking fund debentures due May
Segal Lock & Hardware Co., Inc., being the unsubscribed
debentures
The
holders.
will
used
be
bank
to
$250,000
repay
approxi¬
expend
to
loans,
were] the' Sumter,
The net proceeds
ville
due
eral
Bacon,
Whipple
corporate purposes..;
Becker & Co. Ine.;
underwriting;
by Lehman
Brothers, New York, and Straus
&; Blosser, Chicago, offered to;
the
public
300,000
shares of
:
|
analysis
and
$16.75
per share. Other Illinois bank¬
ers'.participating in this offer¬
ing' were: Bacon, Whipple &;
Co.;
William > Blair
&
Co.;
Brailsford & Co.; Central Re¬
interested In->
to
financial *
vestment dealers and other
'
Institutions on request.
t, maintain
We
J.
Coal
-
)
and
stock
invite
purchase
the
for
inquiries
<
scher
your
Co.
of
Chicago; Holley, Dayton
Gernon; Kebbon, McCormick
&
Co.; Link, Gorman & Co.;
Mason, Moran & Co.; Mullaney,
Wells & Co. and Sills, Minton &
&
Approximate Price 14
Of
Co.
COMSTOCK & Co.
300,060
the
Dempsey
certain
Another group
of underwriters
Gas-Co.
first
Income 5%—1952
On June 25,
Co.
headed
Halsey, Stuart s&;
a
of
group
invest¬
ment banking firms which miK-
licly
Mobile & Ohio RR. Co. collater¬
of
offered
al trust
101
$7,000,000
Gulf,
3%% bonds due 1968 at
interest.
and
share
previously
quarter.
Demp¬
>
Co., Inc.
Halsey, Stuart & Co. IncM also
over
that for the
due
corre¬
A
nation-wide
derwriters
Brailsford & Co.
Co.,
by
deemable
CG 95
(par
first
$25)
shares of Pa¬
5%
preferred
$26.50
at
&
publicly
cific Gas & Electric Co.
CHICAGO 4
un¬
Blyth
30
June
1,000,000
of
group
headed
Inc., on
offered
208 S. La Salle Street
9868
per
lowing Illinois
C.
—
Allyn
&
Co.,
ment
-5% Preferred
Common
lien
Collins
&
CO.;
*
Included
share
ment
on
lis
New
an
Tel. Dearborn 5G00
F,
10116
Farwell,
Co.,
&
&
Inc.,
to
in
weeks
last
gram.
21.2%.
Paul
*
•
V.
"
*
Galvin,
*
1
'
the
President
of
Motorola, Inc., reported that ?ales
for the six months ended
Serving Investment Dealers
We
specialize
exclusively
in
under¬
May 29,
1948 were nearly
$26,000,000, com¬
pared
with
$21,000,000 in : the
comparable periiod in the previ¬
fiscal year.
writing and distribution of securities,
ous
providing investment dealers with at¬
taxes
tractive issues for their clients.
$1,550,769, equal to $1.94
taining
own,
department -of
in
compete
we
dealers,
retail
no
but
Main¬
no
them
serve
our
with
way
ipon
and
Net profits, after
amounted to
reserves,
share,
per com-
against • $1,379,774,
as
exclusively.
Creased
F.
S.
T-
„
.
'
'
Central
increase of 38%
fiscal
ceding
over
income
•
Security Traders Association of
and
Michigan - Annual
In
July 16, 1948 (New York City)
year,
>
J,' *
'
*•
included,
Co.
;
others,
(Inc.);
;Kebbon, McCormick <& Co., Wil¬
Co. and Carter H.
Harrison & Co., on July 1, puby- 0700
'■■000.
'
:. >
r:0
Republic
tbarv $1); of
•;
Metals
at
$15
?.the jqejt proceeds toj be used to.
_»
{
;
«
*
Bond
*
underwriting
An
Mt.
joint Annua!
Sept. 10, 1948 (New York City)
Merrill Lynch, Pierce, Fenner &
Beane,
among
and
Security Traders Association of
including,
others, Central Republic
jointly,
Co., and
15
The Illinois Co.
publicly
of
offered
and
150,-
properties of the
at
c
National Security Trader* AbbO-
Dec. 5*10, 1948 (Hollywood, Fla.)
Investment Bankers Association
1948 convention at the
Beach Hotel.,
company.
*
^
a
Hollywood
T
'
f!'*?
Utility
Common
Central
british:
Industrial
Paper
Common
|r- Ra ilroad
-
Detroit Harvester
'
,
;
r
Common
i/'-f
[
Portsmouth Steel
Common
;
south African
•
r
Municipal
-nut
—
Sold
—
Quoted
Disintegrating
Common
.
STRAUS & BLOSSER
Members
■
V- 'i
Bought
\
Metals
|i
BONDS —SHARES
;
New
York
Members
Chicago
Associate
Member
185 South La Salle
Tel. ANDover 5700
Stock
Stock
New
Exchange
Exchange
York
Curb
St., Chicago 8, Til.
>;
Tele. CO 650-651
AjCAIXSfN«®COMEANY f
zippin
: '
II .
-
NEW york
m
boston'
.
omaha
Incorporated
philadelphia
;y.;vv:
.
CHICAGO
milwaukee:
Kansas city
flint
minneapolis ;
0
.
,
elation Convention.
,
utility
gas
Outing
Nov.15-18, 1948 (Dallas, Tex.)
Montana-Dakota
electric
the
Summer
on
payment of the cost of additions
to
York
Travers Island, r;
Kebbon, McCormick
Co.- (Inc.),
shares
New
at $12.50 per share, the net
proceeds to be applied toward
SECURITIES
IBA
of
headed by Blyth & Co., Inc., and f
$5)
Chicago
Denver-Rocky
of
Club
Group
Party at Park Hill Country Club.
syndicate
Utilities Co. common stock, (par
INVESTMENT
Securities Admin¬
Aug, 27, 1948 (Denver, Colo.)
augment working capital.
•
of
istrators at the Multnomah Hotel
;
000
FLOYD D. CERF CO.
Annual Convention of National
Association
share,
per
r
July 19-22, 1948 (Portland, Oreg.)
i
stock
Permanentef
The
Corp.
offering of
annual
Toledo
of
Club.
banking
of capital
Club
buting at the Inverness Country
.nation-wide
a
investment
shares
600,000
Bond
Co.
participated
30
with
o*
group
f'0 - L*
group,
among
Republic
'^
June
on
firms, in the public
to
$68381,993, as
$55,587,819 in the
Central
together
I
sales in-
year,
(Inc.)
against
gain of
weeks.of
a
and
June
Public
f
at
addition, A. C. Allyn & Co.,
Inc.
&
Bowser
Lochmoore
at
Country Club, Grosse Point, Mich.
New York Curb Exchange Em¬
1948 amounted to $19,ployees Quarter Century Club946,638, as against liabilities of
Exchange dinner at Freeport, L. I.
$12,278,027.
!
corresponding
the
*
Party
Summer
April 30,
Co.
■
^
" '
Detroit,
the pre¬
Current assets
taxes.
STANY
for
(Detroit, Mich.)
July 13, 1948
year.
Net profit
$3,484,515 after all
tn
(Philadelphia,«Pal)
1948
Tournament
Cup at Philadelphia.
charges and Federal and Canadian
For-
Correspondence invited.
120 South La Salle Street
Golf
ended
year
C.
$11,706,615,
*
liam Blair &
fiscal
the
A.
were
Glore,
underwriting
which
July 9,
i
amounted
compared to
period last year;" '
An
Club, Haddouf ield, N. J.
Yantis &' Co., Inc.
During
an
Co.
Summer
Annual
Philadelphia
Outing at the Tavistock Country
Co., Mullaney, Wells & Co. and
at
same
.
of
July 16, 1948 (Toledo, Ohio)
fiscal
23.0%
Investment Traders Association
Martin, Burns
1981,
1,
In the first 24
current
July 9, 1948 (Philadelphia, Pa.)
share and dividends,
Corbett, Inc., Mason, Moran &
&
Jewel Tea Co.. Inc., sales in the
four weeks ended June 19, 1948
of
Party at Sleepy Hollow Club.
G. Becker & Co., Inc.;
Illinois Co.,
The
Bond Club of Louisville Annual
cumulative pre¬
(par
$100);
at
$
amounted
*;/w
$90,000,-
bon, McCormick &Co.
£
July 9, 1948 (Louisville, KyJ
Corp., Chicago, transacted a rec¬
ord volume of peacetime business
amounting to $79,406 133. This was
Co., Harris, .Hall, &
$9,662,432
Tele. CG 146
4%
per
weje: A.
(Inc.), The Illinois Co. and Keb■
Cleveland Security Traders AsBociation summer outing. ;
on
invest¬
3% bonds,
July
and interest,
Allyn
gan
due
which
April 30, 1948 the Zenith Radio
Telephone
refunding mortgage
series
in part, the Pacific; Gas
Company's
construction
pro¬
'
issue of
York
July 9, 1948 (Cleveland, Ohio)
V
the
among
$12,000,000 bank loans and to fiMembers of Chicago Stock Exchange
*
NTpS
each,
of Chicago
group
stock
$101.25
Bank
bankers publicly offering
June 30
000
Bacon,
nance,
209 S. La Salle Street * Chicago 4
of
proceeds
and for other corporate
*
" - /
purpose,
stock
proceeds will be used to retire
William A.Fullcr&Co.
net
National. Shawmut
re¬
Chapman & Co.; Harris, Hall &
Co.
(Inc.); The Illinois
Co.;
Kebbon, McCormick & Co. and
Mullaney, Wells & Co.
The net
—A—
a
EVE
j
-bankers
Co.
Light
including pay¬
of $1,000,000 of note issued
purposes,
Central Republic Co. (Inc.); Ju¬
'
1
❖
j;s
houses
Inc.;
pe¬
a s
COMING
j
publicly offered 80,000
ferred
company,
The
to
Co., Inc.; William Blair & Co.;
,
the
17
of Boston to obtain funds for such
Whipple & Co.; A. G. Becker &
Gamble-Skogmo, Inc.
1978,
utility
the participants: A.
were among
TRADING MARKETS
banking
>
Commander.
shares of Kansas City Power &
which will be applied toward fi¬
and accrued dividends. The fol¬
—
June
publicly offered $3,-
nancing construction costs of the
i v!i:*®#:; 0 n-00- ;!
Tel. State
24
first mortgage bonds, 3ys% series
•v'
i-,-
June
on
sponding period last year.
Common Stock
investment
-
*
Among the
.
paid
,
*
Co. and F. S. Yantis &
sey
1947 fiscal year. Income of $9,659,282 for the first six months of 1948
39%
war;
riod
Co., Rockford, 111., a subsidiary of
Keystone Steel & Wire Co., on
July 2 declared a regular quarterly dividend of 25 cents per
share on the capital stock, payable
500,000 Sierra Pacific Power Co.
was
Milwaukee Railway
60%
the
'
'
per
Included
this group were
among
approximately
he
during
July 15 to holders of record July
8. vThis compares with 20 cents;
sales for the first half of the
over
Chicago, North Shore &
of
served
.
company's properties.
April 30, 1948 of $140,060,707, an
increase
1942
which '
;;(Inc;);Julien "Collins
t!oV;f Since
January
Amesi' Emerich & Cdvlncy and:
of
1947
he
series due 1968, at 100.75% and
D. M. S. Hegarty
Rogers & Tracy, Inc. i The net
has
interest. Of the proceeds, $14 000,been
as¬
proceeds will be placed in Bene- ;
000 will be used to repay a like
sociated with Commercial Invest¬
ficial's general funds.
ment
amount of 1%% notes due 1949,
Trust, Incorporated, as a
*
*
*
and the remainder toward cost of
Vice-President.
The directors of National Lock
construction of additions to the
y.
Corp,
in
Navy
in
were:
Inc;;
ca¬
his joining the
Loan
A. G. Becker & Co.,;
Central
Republic
Co.
share
,
mortgage
in
similar
a
<
or¬
pacity prior to
preferred
stock, $4 dividend series of 1948 [
(without par value) at $100 per
::
pipe line sinking fund bonds, 3%
Deere! &Co., Moline, reports
Sales for the six months ended
Central Public Utility
Mr. 1
ganization
cumulative
Corp.
Col
Inc., on. Jiine>\24 '.qfferefl.to th?
public&$28,000,000.' ol " SohtiierAi
Industrial
Beneficial
of
where' he
was a
member of the
"
headqcl. by .Halsey, Stuart,
Natural
Hegarty
on
writing the offering to the pub¬
lic on June 23 of 100,000 shares
Co.;
Inc.,
underwriting
Included among those under-
;'
Illinois
&
Sons
Rollins
Patterson, Copeland & Kendall,*
#
#
The
&
activities.
subscrip¬
\Co'.;l
&
Wells
stocks.
closed
which
period
been
Vice-President of E. H.
a
Rollins
has
Hegarty
will devote his efforts to'corporate
b u y i n g and ;! s
June 29.
William Blair
Inc. and F. S. Yantis & Co., Inc.
selling stockholders.
*
tion
the
during
S.
M.
elected
of¬
were
D.
;
common
exercised
|
por¬
total of 152,654
shares "were
a
Hegariy V.-P.
Of E. H. Rollins & Sons
; rep- ?
208,260
preferred
w
Warrants- for
additional
*
Mullaney,
y 4.40 %
'
G.
ac¬
count and 100,000 for account
Dearborn 1S01
A.
Collins
Co.;
&
Co.;
the
Kerr-McGee
Teletype CG 955
Julien
Co.;
Co.;
of¬
shares
200,000
were
for
corporation's
fered,
CHICAGO 4, ILL.
231 So. LaSalle St.
(Inc.); Dixon BretInc.;
Farwell,
Noonan
Chapman & Co.; First Securities
sale.
or
stock (par $1.) at
public Co.
position in Old Ben
a
common
13
a
prepared by
has been
available
is
giving
brochure
Illustrated
year
us
an
headed
Kerr-McGee Oil Industries, Inc.
common
An
16,
and
financing were:'*
&
of
initially
shares which
April 1, 2003, at. 100% and;
interest. Also partici¬
this
shares
issue
new
a
D. M. S.
"
$25.12^)
$20). at
unsubscribed
the
of
com-
fered to holders of tne common
refunding
accrued
in
On June
•
Nash¬
&
and
pating
syndicate
CORPORATION
first
Segalock Fasteners, Inc. (a sub1
sidiary), and the balance for gen¬
&
OLD BEN COAL
RR.
offered
tion
mortgage 3%%, bonds, series H,i
of
plant
C.,
S.
publicly
% $30,000,000. Louisville
amount of-<S>
mately $300,000 for expansion of
subscription to stock
priced at par.
which
.
resent
of
shares
Corp.
share. •'These
per
-
*
55,606
Teicphone
stock (par
thon
i; i
July l, Halsey, Stuart &
a banking syn-
dicate
principal
for
fered
1, 1963 of
balance of
'
'
General
Co. Inc. headed
vestment bankers,
$2,000,000
'
Thursday, July 8, 1948
offered
licly
29, 1947.
_
.Floyd D. Cerf Co., Inc., Chicago, and a nation-wide group of in¬
on June 16 made a public offering of $1,943,800
CHRONICLE
$1.72 per common share, .for the
or
-
FINANCIAL
&
&
company
Specialists in Foreign Securities
\
208 S. La Salle St., Chicago 4, Illinois
Telephone Randolph 4696 £'V *
■
/00:0
Teletype CG 451
)
\
!
'Volume 168
Number* 4714
THE
COMMERCIAL
FRB Reviews and Forecasts
&
FINANCIAL
and forecast of
According to the article:
y
System, contains an
business and finance,
in
country have now been operating
ifor almost two years at practically
full capacity and under conditions
-of
Contending each succeeding generation will witness
greater international trade despite economic uncertainties, Mr. Prochnowr, after reviewing dependence of various nations on commerce, including U. S.,
asserts our dollars borrowed abroad must
eventually be expended Jin American markets. Holds we
waste our resources in exports unless we are wil ing to take raw materials
and finished goods in re¬
turn. Attaciks economic illiteracy. :
There is
reasonably wide agreement that world trade is essential to world stability.
requirements of world stability is that men should be able to ex¬
change the products of their skills, their energies, and their resources. A sensible utiliza¬
the past two
has
total
years and their cost
exceptionally low. The
been
tion
used
by business concerns
undoubtedly exceeded that of any
rising prices. Over-all business
/expenditures have been in record
previous
-volume. In part this has reflected
/the large
ing reliance
operating requirements
for inventories, customer financ¬
ing, and the day-to-day expenses
fthat are necessitated by an ex¬
ceptionally large volume of sales,
dollar amounts and percentage-?
wise, than in any other two-jyeai}
period on record.
"The financial position of
busi-f
programs under¬
taken
costs
at
rising
/increased facilities
to
—
provide
-plant
and
^equipment —to meet large postWar demands.
on
—
natural
resouroes
' within
varied,
Britain
sound
philos¬
ophy withia a
nation.
men
corporations as a group today
is still strong.: This is
frue;dOspit<4
the fuse since the- -end ctf the Wan
continued
import
of- commodities
flow;
output
quantities
abroad.
;
In
which
requirements,
still
are
reduced
'large
required from
but
1938, Great Britain
largest
was
the
single
importer in
the
food, raw materials and
articles semi and fully manufac¬
world of
tured combined.
the
it
t
the
:
in
Great
increased, resulting in
There .is an almost^ irresistible
temptation on an occasion of this
kind to indulge simply in the easy
But.
find
difficult
upon
was
acreage
between them and other peoples.
some-
times
daily, is dependent
and
increased
e
life
—________—__
our
People living in other
boundaries.
jis accepted as
ness
j
the *
regions of the world, however, re¬
f f i-' quire no/ reorientation, no new
ciently com¬ perspective to understand the? im¬
bined
with portance of trade between nations,
the
for their general welfare, as well
resources
of
the
earth, as the food necessary to sustain
men,
the security mar*?
•kets as a source of financing, al-t
"though direct loans to businesses
by banks and insurance compa*
nies
expanded more,
both
in
pm part it has resulted from busi¬
of
skills, .ener¬
gies and .im¬
aginations of
two-year period. Over
this period there has been increase
ness investment
By HERBERT V. PROCIINOW*
One of the fundamental
"The business enterprises of thc^
f
>
v
Reserve
developments
11
Vice-President, The First National Bank of Chicago
The June issue of the "Federal Reserve Bulletin," published by
^analysis
£
:
,
In its June "Bulletin," Board says 1948 profits are likely to be i
larger than 1947 and cash assets of public are ample, despite in- >
creased spending. Foresees larger outlays for plant and equipment.
the Board of Governors of the Federal
(107)
World Trade: and World Stability
Trends in Business and Finance
?
CHRONICLE
best
Thereby, she
customer
countries
of
for
some
was
31
the world,
the pros¬
perity of many of whom depended
upon
one
circumstance-—their
retailing ,pf platitudes regarding
international trade, but in order power to find in Great Britain a
H. V. Prochnow
large volume of liquid-assets
that this discussion may not be ready market for their
sound
p hi.Texports.
for tax payments as well as -for
osophy across mired in generalities, may we pro¬ Thus, the 2% of the population of
available internal funds, and in financing inventories, accounts
ceed directly to a practical consid¬ the world
re-j national boundaries..
residing in, Great Brit¬
part by substantial acquisition of ceivable, plant, and equipment/
/There* is a profound heed to eration of international trade as ain accounted for about 20% of
■< funds
from
external
sources.
and
despite a large volume of broaden our vision on these mat¬ it relates to various nations.
the trade of the world, a per cap¬
(Funds
obtained
from
internal debt financing. Business holdings
ita figure of $80, compared with
ters; for -in an atomic age with
.sources averaged
more than
$15 of liquid assets in relation to sales Constellation
Britain and International Trade
a
airplanes, television,
$15 per capita figure in the
(billion a year in 1946 and 1947, are still somewhat above the pre¬ and fast
United States.
global communication, it
-or almost three-fifths of total cor¬
Great Britain, the greatest trad¬
war levels, and in relation to cur¬
is inevitable that world trade will
The Netherlands and Belgium
ing nation in the world, is a ;
porate uses of funds. The internal rent liabilities they are substan¬
become increasingly important.
classic example of a nation whose iare very similar to Great Britain,
funds
were
derived
primarily tially
above
such
levels.
The
Times have
for each country has a high dens¬
changed and the existence is
from
undistributed
dependent upon world
profits
but building up of the shareholders' world
has grown smaller than it
also from the use of liquid assets equity through the- large volume
:trade, for about 50 million peo¬ ity of population engaged an in¬
was
in those days when Daniel
dustry and trading. The Nether¬
—cash and United States Govern¬
of undistributed profits, together
ple, better than one-third the
Webster
stood
on
the
floor of
ment
securities
with numerous stock issues, has
accumulated
population bf the United States, lands, however, differs in one im¬
Congress discussing railroads and live within an area of 68 thousand portant respect in that the dairy
resulted in an equity-to-debt ratio
during the war.
J
said it was ridiculous to think that
square miles, an area about twice output is sufficient to supply do¬
J "The large volume of undistrib¬ for business corporations lnx the iman could breathe
travelling 15 the size of the State of Indiana mestic needs and also to permit
uted profits has reflected chiefly
aggregate that is slightly above
'miles an hour. '
substantial exports.
As a matter
the
(86 thousand square miles). With
unprecedented
volume
of that of 1939.
If there is any economic cer¬
of fact, during prewar years
dairy
cpal ^nd- iron ore the principal
sales, but it has also been due to
tainty in an Uncertain world, it is natural
products accounted for about 20%
Usesxjf Funds
some extent
to the reduction in
resources, this highly in¬
the certainty that each succeed¬
of her total gxports.
dustrialized nation has been ob¬
taxes from high wartime rates. i
"The record rate of business op¬
Like Great Britain, Belgium is
ing generation will witness greater
liged to import great quantities
flPrices have risen substantially, erations that has prevailed since
international trade.
of foodstuffs to feed her millions obliged to import food to sustain
the dbllar volume of business has the latter part of 1946 has been
ber population, While both the
It is difficult for us fully to
of people and also tons of raw
been, higher than ever before, and the
principal factor giving rise to
comprehend the significance and materials for her processing in¬ Netherlands and Belgium import
business profits, the residual 4«lethe large volume of business ex¬
importance of world trade be¬ dustries, much of the output of large quantities of raw and scmiinent of the business sales dollar,
penditures. (Table I). Operations cause of the tremendous output of which is subsequently exported. iprocessed materials for complete
have also risen sharply.
our
industrial machine and the In the average prewar years, for and final processing and reexport.
"Funds from external sources at approximately full capacity and
abundance of food, minerals, and example, Great Britain was the
Thus, Belgium, in an average
have been in large volume over at a high and rising price level
largest importer of food in the prewar year, imported 1,285 thou¬
sand
!:!An address by Mr. Prochnow
(metric)
tons
of
bread
Table I
world, importing about two-thirds
before the Export Managers Club, of
her
foodstuff
requirements. grains, or about 60% of her total
I
"Business
expenditures of the
past "two years have been financed
in part by the large volume of
of
•
apply
o
this
a
v
*
—
-
,
•
,
CORPORATE
ESTIMATED PRINCIPAL USES AND SOURCES OF
•Chicago, 111., June 16, 1948.
t
U.
'
■
•
-
of Dollars
•
Internal, total
'
'
■
5.4
19
20
2.5
0
9
27.0
100
100
16.8
56
62
14.4
10.4
54
•38
0.5
6.4
2
24
11.1!
9.0
42
33
3.3
11
12
—2.7
18
10
1.0
"
28
5.1
3.0
4
11
2.3
0.0
9
0
0.5
*"
'
-
7.5
4.8
Total
Sources—
43
6.7
25
3.0
of allowances
56
14.9
—__
1.2
2
5
Louisiana & Arkansas
Railway
Equipment Trust, Series G
■
________
;
'
V>. y.V,.
.
'
,
'
4 '
'
*
fFunds retained from operations._—
v Reduction in liquid assets—^—
L_J__
External, total
37)
on page
1946
11.6
0.0
Inventory accumulation
Increase in customer financing
-t-iFederal income tax payments in excess
1947
14:7
equipment expenditures
(Continued
diets became less
of Total
1946
26.5
Plant and
V'
age
1947
Uses—
war,
As Bercent-
In Billions
.
Item
'
-
During the
X
:
i
•
v
0
2%%
Equipment Trust Certificates
(Philadelphia-Plan)
|
rv-
-
.
/
.
*
Bank loans
} ^Security-issues-and mortgages
Trade credit
'
_
_
Federal Govt, for income taxes due__
Other
net
sources
and
statistical
'27.0
100
100
banks
and
insurance companies.
Also, in contrast to
pertain figures quoted in later sections of the articles, excludes
incorporated enterprises.
;£>ource---Department of Uonimetce.
$88,000 semi-annually January 1, 1949
'
j
(
"
July 1, 1958, inclusive.
to
'
•
,
:
* h"
„js
'
as to payment of par value and dividends by endorsement
by Louisiana & Arkansas Railway Company |
,
.
i
and equipment to
modernize operations and to ex¬
pand capacity for probable future
has
also
^
been
-
v
-
to cost
approxi¬
;
.....
.
v
industrial
groups
were
'.V
I
V
The
of these Certificates are subject to authorization by the Interstate Commerce Commission.
Offering Circular may be obtained in any State in which this announcement is circulated only from
the undersigned and such other dealers as
may lawfully offer these securities in such State.
manufacturing durable
have continued high,
they are down season¬
ally from the level prevailing in
the latter, part of 194,7.
ness
sales
although
/'Inventory
accumulation:. In¬
$300 bil- ventory accumulation is a business
fourth use of funds directly affected by
or 1944,
the volume of sales. The percent¬
wartime years." Sales last year in
•
Issuance and sale
goods. Thus far in 1948 total busi¬
„
\ lion,'
approximately
alarger than those in 1946
the previous peak peacetime .and
yield 1.45% to 2.70%, according to maturity
^4V
industries
af¬
high cost of such investment, r t
"Aggregate corporate .sales in
standard-gauge railroad equipment estimated
new
Priced to
V''/.* *
the largest on record. The largest
increases over 1946 occurred in
fected by the exceptional volume
of postwar demand and by the
1947 probably exceeded
be secured by
mately $2,200,296.
'
all broad
a
| tnent; in plant
Certificates are to be issued under an Agreement to be dated July.J, 1948, which
will provide 'for the issuance of $1,760,000 aggregate
par value of Certificates to
un¬
-
large volume of
} working; capital. Business invest-
i
mature
.
^Profits, after income taxeg and cash divi¬
dends, plus depreciation allowances.
i requirements
r
.
#,
•
?
t
To be unconditionally guaranteed
,
•
26.5:
'Total
necessitated
'
To
These
'-Excludes
!
*
,
dis-
5/crepancy
*
*
age increase
in such accumulation
(Continued
on page
34}.: //y
^
HALSEY, STUART & CO. Inc.
..
■' i
v
/
>
y}/
i1
."v
-
:
I-V
•••."'
/:'V
-:,v
ft' :V/
To be dated July 1, 1948. Par value and semi-annual dividends (January 1 and July 1) payable in New York
Cify. Defini¬
tive Certificates in the denomination of $1,000, registerable as to par value. Not redeemable prior »to
jnaturity. These"'
Certificates are offered when, ias and if received by us. Certificates in temporary or definitive form will be delivered
at the
office of Halsey, Stuart & Co. Jnc., 35 Wall St., New York, N. Y. The information contained
herein has been
compiled irom
carefully
sources
considered reliable and,
?
"
while not guaranteed as to completeness
-correct as of this date.
-
July
1948.
.
,
,
r
,
-
.
or accuracy, we
j
A
c
'
*
believe it to bes
rf
,
-t
i
.
-
COMMERCIAL
THE
FINANCIAL
&
CHRONICLE
Thursday, July 8, 1948
With Daniel F. Rice Co.
PALM
FLA.—Robert
BEACH,
If I Were
A. Cannon is with Daniel F. Rice
&
Co., 246 South County Road.
Retail Salesman
a
(Second of
Series)
a
By ROBERT E. CLARK
Vice-President, Calvin Bullock
By HENRY HUNT
youngest and best liked executives in the business, Robert E. Clark,
Vice-President of Calvin Bullock,
sponsors
of Dividend Shares,
that you were suddenly made a trustee
organization or estate and were charged with the
responsibility for investing several million dollars. Without
doubt you
would promptly seek professional advice and
retain a competent investment organization to
help you
Nation-Wide Securities, Canadian Fund, Ltd.,
keep watching the securities which were selected.
Aeronautical
ities would, of course, be
"If I Were
Prospectus
your
request from
upon
investment dealer,
National
research
or
from
this
Retail Salesman"
series
written
was
for
by
one
of
the
The Bullock Fund, and
With combined assets of approximately
Securities, Inc.
us
suppose
an
Such
$100 million.
a
is
course
Where Will the "Dow" Go From Here?
-
corporation
In
120 BROADWAY, NEW YORK 5. N. Y.
to
Now, let
Do
as
,
On
"A return to
a
Price-Earnings*Basis
«•
price earnings ratio comparable to the 1929 peak
would result in a price rise of almost 100%.:^-/:
J
"A return to a price-earning ratio comparable to the 1937 peak
would result in a price rise of over 75%.
'
a
"A return to
follow the
same
do it—and it has been done
shareg.
'
"
1
'
'
Through ownership of these shares, investors, large and
small, share proportionately in a broadly diversified in¬
price-earnings ratio, cpmparable to the high of
price, rise of over 60%.
a
1946 would result in
can
ment company
.
RUSSELL BERG FUND
you
You
follows:
have some money of your own
conscientious?
sensible investment formula?
by almost onp mil¬
lion investors—whether you have a few hundred or many
thousands of dollars to invest. It can be done economically,
conveniently and' soundly' through the purchase of invest¬
earnings and dividends, Edward E. Hale of Vance, Sanders con¬
cludes
Because it is time-tested, and sound.
us suppose you
Are you as careful and
to invest.
statistical discussion of where the "Dow" has sold in relation
a
The secur¬
broadly diversified.
with wealthy individual or
traditonal
institutional investors.
&
securities
in
article
second
The
a
Let
.
vestment portfolio, carefully
a
selected by experts, and have
equally at their disposal and services of
agement,
. \
professional man¬
,
On
Prospectus
INVESTMENT
on
MANAGER
Jv. v,-.:J./
• ■
AND
Price-Dividend Basis
Moreover,, the investment companies from which you, can
choose emphasize certain specific objectives and are man¬
aged accordingly. ' Therefore, * if your need is for high in¬
come, you can select from companies giving priority to this
feature. Other investment companies place greater emphasis
upon capital gains;
still others upon investment stability
through a broad portfolio, including bonds and preferred
stocks as well as equities.
Their records are public information.
Their manage¬
ments can be readily evaluated.
Some are supervised by
;,
"Stock prices would have to increase over 60% to equal the
price-dividend ratio reached in 1929.
Request
"Stock prices would have .to increase about 20% to equal the
price-dividend ratio reached in 1937.
UNDERWRITER
V,. • •..' i■L-". j
a
''1,
\\
to equal the
"Stock prices would have to increase over 50%
price-dividend ratio reached in 1946."
Russell, Berg & Company
Bank Loans of Affiliated Now
Investment Counsel
75 Federal
Street, Boston
TELEPHONE LIBERTY
2-955O
$17,000,000
As of June 28, Lord, Abbett's Affiliated Fund increased its
loans from $15 million to $17 million.
bank
firms which have been
that
the company might maintain its effective leverage at amounts deemed
appropriate by the management at this level of the market with the
outlook for business favorable.
<
r
,1
of different industries and
widely. These are facts which expose to high risk the
Investors who buy but one or two stocks in the hope of
so
borrowing, total assets of the Company, at pres¬
ent market prices, are approximately $73 million, of which $17 mil¬
lion
constitutes borrowings and
the remainder, $56 million, the
equity."
new
'
•
...
'
high income
solve
new
and says in part:
'smaller
these
funds
had the responsibility of managing in¬
vestment accounts knows the difficulty of keeping a number of dif¬
ferent lists, of securities constantly in mind. It is not the dollar size
of each list,* but the number and diversity of items that make it so
difficult,
Thus a single account of some millions of dollars, like
Fidelity Fund, may be more easily kept in mind, managed and serv¬
iced properly than 10 separate accounts which might total a much
"Anyone who has
profit*
is designed to help investors
company
in which
different investors participate it offers peace of mind
and opportunity for adequate investment reward.
Why not follow the sound policy which you would adopt
if you were charged with the responsibility of investing
booklet called "Modern Investment Manage¬
ment" is laid out to catch the investor's eye,
or
investment
problems.
As
a
cooperative venture
many
Concentration
Fidelity Fund's
An
.
-V:
\
.
corporations. Seldom in recent his¬
tory has the market performance of different stocks varied
,
"After the
serving investors for over 50 years.
Never before has it been so difficult to forecast the future
"The additional borrowing," it was stated, "was arranged so
ever
amount.
for
others?
Your
■
tection.
deserves equal
own; money
pro¬
'
That is
why
we
recommend that you consider invest¬
ment
companies as the logical and sound way to make your
capital productive in these eventful years.
Dow-Jones Industrials would be almost
exactly 10 times earnings,
which, historically, is abnormally low.
"If, with such stability of earnings the dividend rate were to creep
,
The Fidelity Fund shareholder benefits by this concentration of
theTurnis''iolimany-ipVestofs in one relatively. simple form of trust,
rv.
where sound
Prospectus from your Investment Dealer or
secure
supervision and direction
satisfactory investment results."
9
HUGHW. LONG & CO.
48 Dividends
can
be expertly combined to
V
:
1 ^^£^2
back to
a
conservative 'normal' of
year.
This would be
INCORCQSATtD
48 WALL
(OS
STREET, NEW YORK 5, N Y.
ANGUS
CHICAGO
Company - of
Edwin P. Rubin, President of Selected s Investments
as follows:
"It
^interesting to observe that dividends last year were an
abnormally low percentage of earnings. The following table gives
•
?..**'
Year
^
Earned
•
,1929
1930
-k
1931
—
T934'_1-:_-_l_:
1939
Certificates of Participation in
FUNDS
investing tkeir capital ^; "
IN
,
-
PREFERRED STOCKS
f
.
161
__
3.66
94
4.55
72
7.05
70
.11.49
8.78
76
4.98
83
77
6.11
68
10.92
7.06
65
71
11.64
i:
'1941
7.59
65
70
194?
,
69
69
9.22
.
_
l943.^:^U-wl-l-^r^I--Z,'V>9.74 "i;
-
—
6.40
6.30
65
66
6.57
•«
65
6.69
,
63
—
"(arDeficit.
7.50
55
49
"In
$
*Y.
,
,
..
|
t
COMMON STOCKS
.
CSeries 5 1«S2-S3tS4)
I ;
Prospectus from
-
your
local investment dealer or
is, of course, difficult to say what a normal ratio of pay¬
ments in relation to earnings might be. It is obvious that the current
low ratio of payments is the result of increased capital needs at a
time when it was not easy to finance. This condition may continue.
It is also possible that the ratio of payments to
earnings will not
increase until the trend of
earnings has turned downward.
"However, if
ompany
oston
6U
Congress otreet f
Boston 9, Massackusette
one examines the table closely, he observes that in
from 1941 to 1945 inclusive (the war years) the DowJones Industrials paid out, on average, about 66% of earnings. That
was a period in which corporate managers were very conservative
because they did not know what their postwar problems would be.
We may, therefore, assume, with some justification, that managers of
these corporations would normally consider the payment of twothirds of earnings as conservative.
.
•'
the five years
Stocks, Inc." writes in part
some
important
respects
Nov.
as
there
investment outlook since the end
follows;
has been
■
,
-
"
y
improvement
1
in
of your company's fiscal year
Retail sales remain high; industry is continuing
large expenditures to increase both capacity and operating efficiency.
Contracts for new buildings have been averaging about 30% more
than during the early months of 1947.
The steel industry is oper¬
ating at capacity but is still unable to supply its markets. Although
on
58
-
_
The Investment Outlook
the
"It
I
„
Hugh W. Long in his semi-annual report to the shareholders of
63
9.21
^
;
"V?*
available at $15 a copy.
f
328-page volume has again been considerably ex-*
panded both in subject matter and in the number of individual com¬
panies reviewed," said Arthur Wiesenberger, its author. "This is the
enly book in the entire securhy.field that details, not Phly the wide
variety of securities available, but aiso details the many possible
advantageous uses to which they may be put. AndL we have made
every effort to write all of it in such a simple and clear way that
it can be understood by people who are totally unfamiliar with
the subject, and at the same time be most valuable to those who
know a great deal about investing."
now
"New York
66
18.86
price level of 190."
new
,
66
10.56
13.63
1947
•
,
10.07
1946
S.
.
•
(Series K1-K2)
i
seriously, is
73
..
on a
^ Arthur Wiesenberger's ; 1948; edition pf "Investment Companies/?
"must" for every mutual fund dealer who takes his responsibilities,
81
6.01
9.11
-
—
1940
1945
BONDS "
__
3.40
10.07
——
"1944
(Series B1-B2-B3-B4)
205
yield of 6.6%
„
1938'J:_l_-_—i
pi '
8.40
4.62
3.91
_
1937.
£
% Paid
101
6.34
1936
{; INVESTMENT
11.13
2.11
.
1935
it
11.02
.51(d)
1933
i
5 Yr. Period
% Paid
64
12.75
4.09 s
-
1932
ustocuan
Paid
19.94
a
"The
respect to the Dow-Jones Industrials:
V
-
36% improvement over last year's payments.
New Wiesenberger Manual Available
*
:
Chicago, recently wrote
the essential facts with
a
It would also represent a
Up 36%?>*■■> ■ *r
662A%; dividend payments would
compared with $9.21 last
then reach about $12.57 per index share;
30,
1947.
a whole continues to exceed
supply,
bringing out new models which further stinhulate the desire to buy new cars. The petroleum industry is unable
to meet fully the demand for its products and has launched ah.
aggressive long-term expansion program. There are many other im¬
portant industries for which the outlook is equally favorable. Asia
group,
these industries have generally dominated the trend of
business,
' ■
v.:
the demand for automobiles as
the auto
companies
are
,
"Enactment
of
the
European Recovery Program
and
increased
appropriations for armaments have strengthened convictions that the
country's economy will continue to operate at a high level for an
extended period ahead. Recent tax reductions not only leave mote
of most people's income for saving and investment but also permit
them to retain more of each dollar of investment income.
"Your
management and the staff of Manhattan Research Asso¬
ciates, investment adviser to the company, are constantly studying
both the unfavorable and the favorable factors which affect invest¬
ments.
At this time we believe that carefully selected securities
"If earnings were to stabilize at last year's level for this year are available at prices which offer attractive opportunities for the
and next; the present market level of approximately 190 for the -investment of money." kV- - i
^• v;
,
v
.
,
....
.
Volume
168
Number 4714
THE
COMMERCIAL
FINAN CI AL•'■■■ CHRONI CLE
&
(109)
13
Financial Problems of Railroads'
Canadian Securities
By WILLIAM T. FARICY*
President, Association of American Railroads
Mr.
By WILLIAM J. McKAY
A
Canadian
financial
problem
that
probably
ranks
next
in
importance to the correction of the Dominion's imbalance of trade
with this country, is Canada's indirect U. S. debt in the
shape of
Dominion of Canada internal obligations in the hands of U. S.
Faricy, in pointing
out three fold responsibility of railroads—to public, to employees and to invest¬
ors—contends railroad managers' cannot
regard themselves as successful until their companies are in
Cites rising operating costs, which in spite of greater use of improved
equipment have been increasing faster than changes in railroad rates. Calls for larger margin of gross
revenues
holders. In view of the recent an-<£
nouncement
by
Abbott
the
that
Finance
and U. S. dollar
in
creased
from
the
Minister
Dominion's
the
last
December
gold
have in¬
reserves
six
months
low
of
level
$461 millions to $742 millions, it
would appear that Canada's ex¬
change crisis has now been suc¬
cessfully negotiated. Consequent¬
ly it is logical to suppose that the
thorny subject of the Canadian
Government
internal
bonds
by non-residents should
ceive
more
held
now
Canadian official quarters.
!,
Although the interest
■
securities is payable on
Ronald Ledwell Joins
vestment
Hancock, Blackstock I
(Special
these
on
the basis
to
The
ATLANTA,
Financial
GA.
—
Chronicle)
Ronald
E.
associated
at
redemption date at *the
and
the
nity
for
mine, to keep it that way. In the
second World - War, the railroads
were called upon to perform just
opportu¬
rail¬
road
about twice
the
the
jobs; to
employees
as
first World
become
man
but
least
the
to
the
investors
un¬
and one-third fewer
locomotives. Since the war, there
not
in
William
T.
Faricy
men,
has been
let-down in railroad
no
performance,
riers
"free" dollar market in this
the bond holders.
on
its
whenever
resources
matured
of
and
the
11
c a
interested.
One important task" you and' i
have
before us, as I see it, is to
keep the public and its legislative
and regulatory representatives in4
formed
railroad'
of
needs,
and
stressing at all
ture
of
the
;
problems'
accomplishments^
times the vital naf
service
the railroads.
Only
rendered
an
sales
proceeds of
d
internal
e
bonds.
In turn the weakness of
the free Canadian dollar on such
occasions tends to give rise to
though the car¬
adjust their
operations to the needs of a record
public
lation,
rates,
Looking at the matter in this peacetime demand for service. But
broad way, we have three part¬ this may not be enough for the
ners
in this railroad enterprise: next war, if we are so unfortunate
the
145 000,000
citizens of this as to have one; past achievements
country, whose economic welfare must and will be surpassed.
and
national
security
are
so
Railroad
performance
during
greatly dependent upon an effec¬ the war was so impressive that it
tive system of rail transport, the
brought many persons to a recog¬
million and a third railway men nition
of what they had never
coun¬
considerable strain is placed
effected
This
fewer
who
railroads, in¬
are
in
last
has
cluding both the stockholders and
a
War.
as
they
did with one-fourth fewer freight
and
passenger
cars,
one-fourth
official rate of exchange. In view
of the narrowness of the Canadian
try
much service
railroads, and
Ledwell
of the official rate which is tan¬
tamount to payment in U. S. dol¬
lars at par, the principal on the
bonds is convertible at maturity
or
for investors.
Railroad Management—of which the group I am addressing
tivity, particularly in the pulp and
today is an important seg¬
paper,
machinery,
agricultural ment—carries a
continuing responsibility for the physical condition, the efficient opera¬
equipment, and retail food sec¬
tion, and the financial welfare of the properties entrusted to it for operation.
That retions. Western Oils provided the
principal feature of the market sponsibility
lies
in
three
war
load without congestion and accorded the kind of hearing b>
following the report of the discov¬
directions: to :
delays, producing twice as much the committee members that w~
ery by Imperial Oil of a new oil
the1
general l
transportation per day as in the had hoped for, one in which -wpool about 30 miles southeast of
first World
War.
The railroad were asked many questions, on.
public, whose
the Leduc field.
patronage ere- <
performance record, both in war that gave us an opportunity tc,
ates the need
cover
and in peace, is an impressive one,
the things
in which th.
of railroad in¬
and it is part of our job, yours and committee members really weij
re¬
particular attention in
:
comfortable financial position.
ments.
informed
Our first partner,
.
have
even
had
to
can
such matters
act
as
intelligently
legislation,
and
wage
i*j>;
regu
|
adjust^
the pubr.
lie, will act favorably in direct
proportion as public opinion is
kept informed of the facts about
bur industry.
The
million
and
a
j third rail
employees, who are our sec¬
ond partner, have fared well in
This has been
this great enterprise. They worfe
a
and women who operate the plant,
frequent cause of embarrass¬
Ronald E. Ledwell
thought of previously—the basic hard but not onerously; they are
ment to the Canadian administra¬
and the investors whose dollars character of railroad
service, ahd well treated as the good Amer1*tion as the recurrent weakness of with Hancock, Blackstock & Co.,
provide
railroad
facilities
and the importance to the public of icans that they are should be,
the "free" dollar has been of con¬ Chandler Building.
He was for¬ service. These are triple interests,
maintaining that service in full and notwithstanding all the in¬
siderable propaganda value to the merly with Wyatt, Neal & Wag¬ each important in its own field. I
vigor.
Earlier this month this creases in the cost of living, rail¬
want to consider with you these
minority interests in Canada who goner.
subject was considered by one of way employees, taken as a whole,
have
persistently criticized the
three aspects of the railroad man¬ the most important committees of are
better,off in terms of real dol¬
.revaluation of the dollar to its
agerial function.
Congress, • the House Committee lars, that is, dollars of 1939 ptu>
present parity.
Railroads do not comprise sim¬ on Interstate and Foreign Com¬ ch a sing power, than they were ih
To all intents and purposes the
ply "another business" among the merce, as a part of its national that year. In terms of the purrlevel of the "free" Canadian dol¬
Busy as chasing power of the prewar dol¬
large and fundamental industries transportation inquiry.
lar has become the principal de¬
(Special to The Financial Chronicle)
of the United States.
They are was Congress in the session just lar weekly earnings of railway
terminant of the value of the Do¬
The rail¬ closed, that committee neverthe¬ employees today are about 10%
DETROIT, MICH.—Donald M. much more than that.
minion of Canada obligations in
Woodruff has become associated roads not only embody one of the less devoted most of the first two greater than thby were in 1939.
the hands of non-residents.
The with H. V.
Sattley & Co., Inc., nation's great industries, but, what weeks in June to hearings de¬ Their retirement system: is uh*situation is further complicated
Hammond Building.
Mr. Wood¬ is more important, they constitute signed Jo develop the facts as to paralleled any where .in the worfti
by the fact that these securities ruff in the past headed his own one of the most essential elements the readiness and ability of the and Congress, with the concurf
fall
into
two
categories.
The investment firm, D. M. Woodruff of the national economy, vital to nation's various forms of trans¬ rence of railroad management and
bonds that were registered with
& Co., in Detroit.
any
defense the approval of the President, rer
peacetime progress and stability portation to meet
the
Foreign
Exchange
Control
and indispensable in time of war. traffic load. That speaks well for cently voted railway employees .a
Board while this privilege existed
the foresight of the committee. In merited 20% increase in pensions.
can be liquidated on the Canadian
Deveureux Josephs Dir.
Railroad Performance
j ^ the course of those hearings, the
market and the proceeds are dis¬
Responsibilities toj Investors J
As t.almost everyone knows by principal
emphasis was on the
Of J. P. Morgan & Co., Inc.
posable at the "free" rate. On the
One of our greatest-responsibil¬
now,
the railroads handled the railroads, their past and present
At a regular meeting held today,
other hand the unrecorded bonds
performance, and their require¬ ities is to the railroad investor, the
the board of directors of J. P.
for all practical purposes are only
Three representatives of third partner in our enterprise
*An address by Mr. Faricy at ments.
Morgan & Co. Incorporated, 23 the
eligible for sale at the prevailing
Accounting Division of the the Association of American Rail¬ It is he who is the first man ir,
market for the bonds in this coun¬ Wall
Street,
New York
City, Association of American
roads outlined the railroad situa¬ the process of making: the wheels
Railroads,
try,
Through the operation of elected Devereaux C. Josephs to
tion to the committee, and were
Cleveland* O., June 29, 1948.
(Continued on page 40)
1
switches between recorded and the board.
doubts concerning
the official dollar.
the standing of
D|W. Woodruff Wilh
H. V.
way
.
Sattley & Co.
unrecorded bonds the value of the
Mr. Josephs is the President of
latter category of securities in the
final analysis is likewise deter¬
mined by the level of the "free"
the New York Life Insurance Co.
dollar.
This announcement
the standing in this
country of the direct obligations
/!!'*
""'t1
'
ject to the undesirable influence
;v.v
^
While
market.
this
situa¬
v
'
'
'
}
v
•/
.
'2'
* v
a
'
"f,- '
'
,
NEW
wise
unblemished
ord.
Therefore
that
as
financial
$8,160,000
there
soon
is
little
it is
as
PROVINCIAL
General American Transportation
MUNICIPAL
prac¬
CORPORATION
au¬
thorities will take steps to remove
Corporation I
,the; restrictions that now prevent
the completely free movements of
Equipment Trust Certificates, Series 43
capital between this country and
.Canada.
*f During the week both the
ex
CANADIAN STOCKS
ternal and internal sections of the
bond market
with
were
little
:price-level. Stocks
and the undertone
a
were
was
current
the
firmer
continuance
July 1, 1948
Due
serially
to
July 1, 1968
in the
steady
result of better sentiment
cerning
Dated
dull and inac
change
w .
rec¬
ticably possible the Canadian
tive
placed privately
ISSUE
GOVERNMENT
fully take advantage of its other¬
;
were
not being offered to the public.
unofficial Canadian
narrow
tion exists, the Dominion can not
doubt
are
CANADIAN BONDS
of the Dominion of Canada is sub¬
dollar
of record only. These securities
through the undersigned, and have not been and
In this way
of the
appears for purposes
,
as
con¬
of
AiE.AMES&CO.
INCORPORATED
the
high level of business
ac¬
TWO WALL STREET
*In last week's column
owing to
a
typographical
error,
NEW YORK 5,
Kuhn>|Loeb & Co.
N. Y.
/V
it inadvert¬
ently appeared that the principal
as
well
able
on
as
the
interest
was
pay¬
the basis of U. S. dollars
at' par. %
WORTH 4-2400
NY-1-1045
July 8, 1948.
;
}v i"''1'
•
•
t;
14
FINANCIAL CHRONICLE
COMMERCIAL; &
THE
(110)
Thursday, July 8, 1948
Gold Black Markets! and
Securities Salesman's Corner
mined
By JOHN BUTTON
Foresees
gold.
thing that will waste more of anyone's time anct
anything else—that is the inability to organize work. I
man who keeps a loose-leaf notebook on every important
is
a
piece of work in which he is engaged—sometimes his pockets are
crammed full of them—and
reminder and goes on to
as
he finishes
a
task he tears out each
the next.
good policy to spend the last 15 to 30 minutes of each
day reviewing what has been done and writing out plans
for the morrow. Any salesman who systematically cultivates a group
of prospects and continually maps out his plans for calls, appoint¬
ments, telephone follow ups and letter writing, cannot fail to put in a
good productive day's work, Another advantage of planned activity
is. that, it leads to good solid work
habits. Work that is planned is
business
pleasant because it has defined objectives. There is absolutely no
better method of building up a productive clientele than to see a
certain number of new prospects and old customers every day, This
is true because the thoughts and ideas that you will get from neonle
when you are talking with them about securities WILL GENERATE
POSSIBILITIES FOR DOING BUSINESS.
For
example, one customer will ask you about a certain stock
bond that he purchased from someone else a few years ago you
just possibly may know something in the way of a new development
(favorable or unfavorable) regarding either that particular security,
the industry in which it lies, and there you go—if you can seize
your opportunity. Or he may ask you for a quotation, and you pick
up' his 'phone and obtain it for him. He says "Thanks very muchi
maybe sometime next week I'll call you and have you sell that bond;
I may need some money," But you have always been accommodat¬
ing and pleasant toward this customer even though you. have never
done much business with him. Then the thought strikes you and you
says, "You itnow, I wish you had a little extra money right now, in¬
stead of needing some, because we have a special situation in a most
attractive common stock that I wish you could buy. Quite frankly
we think it is an excellent
purchase at this time." So your friendly
bond seller thinks ai minute and says, "There is a fellow I know who
has been buying quite a few securities
lately and I think he might
be interested." So you arrange to have your friend call him and tell
him that you are going to give him a 'phone call tomorrow
morning;
which he willingly does. Much to your
surprise you come to your
office the next morning and you get a 'phone call from the new
prospect—he tells you that his friend thinks so highly of you that he
or
would like
to hear about what you have to offer.
You tell him and
(This isn't the sort of thing that only hap¬
pens in the movies; it actually happened last week to someone with
whom we are acquainted.)
:
.
.'-v-;
he gives you a nice order.
,
Eighteenth Annual Report of the Ba nk for International Settlements of Basle,
Switzerland, covering the year ending March 31, 1948, in addition to reviewing interna¬
tional trade, exchange rates &nd price movements, gives a clear cut analysis of
gold hoard¬
ing and gold black markets since^-
beginning
of the last World
this topic, of uni¬
War. Regarding
interest in view
versal
forts
the
International
the
of
of
ef¬
Mone-i
salesman
a
who sold
a
propositions
Chamber of Commerce. Every
gold bullion, the Report gives the
following information:
'
"The postwar world has seen a
recrudescence
the hoarding
of
0$
which has been intensified
monetary uncertainty and af
desire to possess, for political or
other reasons, durable and' easily*
gold,
by
He set aside several for which he had offered to obtain certain
week.
When
times
improved he
doubled
arranged
man
that
tell me that his success was- glandular—but it
HE PLANNED HIS WORK AND HE DID IT.
the
was
calls
about
made
income.
more
He
for
$250
used
than
a
to
that—
Texas Unioia Oil Sfock
Stewart J. Lee &
most any
"In the
circumstances.*
oh June 30 publicly offered 800,000
10
shares of
common
stock
(par
cents) of Texas Union Oil Corp.
(Del.) at'37% cents
steady rise in prices, the
being pushed up' by about
30% between, say, 1895 and 1914.
cause
a
level
But, when gold becomes
scarce
in
relation to the value* of the: goods
be
to
the
moved
and
of
balances
the
deficits
payments
in
be
to
covered, then 'the sink in the East-
puts
strain on. the monetary
(though it should not be
a
system
"In
the
World
of
course
the
second
War, the demand for gold
The net
to pay for
for
per
share.
proceeds will be used
organizational expenses,
equipment, for cost
of
drilling
has been associated with. the In¬
ternational Statistical Bureau, Inc..
and prior
thereto, he conducted
his own investment security busi¬
ness
additional wells, and
working cap¬
ital.
It is contemplated
by
the
corporation to drill at least five
six
more
of
the
in central
KINGSTON,
P. Smith has
corporation,
is
also
President of the Houston Real Es¬
tate Board.
Pennsylvania.
With Chilson, Newbery
or
test wells.
:William W. Long, who is Presi¬
dent
Stock Exchange.
For
past eight years Mr. Bassett
the
N.
Y.— Frederick
joined Chilson, New-
of
reserves.
•
end
the,
introduced by
land
in
1945
of
a
so-
scheme'
float
'export
was
the Bank of Eng¬
revive
to
order
the
i
erably reduced in the latter half
of
1947
as
result
a
of
general
a
pronouncement by
the Interna¬
tional Monetary Fund against in¬
ternational
dealings in gold at
prices.
"Private gold business has also
other
been
than
official
handled
in
the
New
York
London gold market to some ex¬
market, often in conjunction with
tent.
An initial quota of about'
50,000 ounces was put at the dis¬
posal of the market, the intention
being that it should be- exported,
London.
but
months,
form processed
manufactured
gold,
which
only
in
the
After pronouncement by
the International
Monetary Fund,
the New York market
continue
wprp
were
was
dealings
able to
for
some
until
new
regulations
by the U. R Trpaciirv'
S. Treasury;
issnpH
issued hv thp TT
"The
National
Bank
and
the
100 000:
scheme; Treasury Department in Switzer¬
increased
to
but the original
ounces,
was
at
revised with restrictive effect!
the
time
the
of
convertibility
crisis in August, 1947, and, by the
the end of that year, a stricter
system
licenses
in operation.
By the1
Spring of 1948'the business trans¬
acted under the scheme is said
a
further
Beirut have
emerged
as
measure,
the market
,
toward
by such sales.
Sw.fcs
milliard
1
A little
sold
was
up to the end of 1946 and a fur«?
ther Sw.fcs 480 million was sold
during 1947.
)
"In
Greece j also,
the Bank of Eng¬
gold coins
land began to permit purchases* have been released to the market
and sales of gold against U. S.j as an anti-inflationary monetary
the end: of 1946,
dollars, provided that the London1
dealers
acted
intermediaries)
as
between
In
measure.
its
half-yearly
re¬
view for January, 1948, the Bank
of Greece stated that it would
cer-7
principals outside the:
Supplies for this tainly be preferable to meet mon¬
Mexico, etary demand by, offering goods
from Central and South Apnerica and raw materials but that the
sterling
areas.
traffic jcame largely from
deposits country was going through a pe¬
by riod of acute shortage of goods
non-residents, while most of the and, as long as the fear of ban*
demand
came
from the Middle ditry was most intense and a feel¬
and Far East.
It is reported that ing of
mistrust left behind by
gold could be bought from Central monetary devaluations in the past
America at between 10 and 20%) persistedf the government had to
above the U. S. Treasury price of! undertake the sale of gold coins as
$35 per ounce, while the ultimate: a short-term means of stabiliza¬
It is admitted that inter¬
buyers in the Middle and Far; tion.
and
still
from
prewar
gold
in
maintained
London
vention
results
bined
can
as
with
nomic,
have
long
as
no
permanent
it is not com¬
other
essential
eco¬
Without
such
measures.
measures,
the
sale
(Continued
of
on
gold coins
43)!
page
-
1
CHARTI
im¬
Price of Gold
on
Various Markets.
Free-market price given at $ rate for bank-notes,
.
black
have sold gold, mainly in
coins, on the market and to in¬
dustry, as part of an anti-infla¬
over
cof
have: become almost negigible;
"As
land
tionary monetary policy, funds in
export1 Swiss francs being drained from
allocating
of
was
Eastern countries at times paid;
governments in the West, which oremiums up to 50% on the U. S.
found this a cheaper way of pro-:
parity. .This traffic was consid-;
curing local currencies than buy¬
1 See
an
article on "The Traffic in
ing them via the exchanges. Since
the war, Hong Kong, Alexandria.! Free Gold" in- the "London Economist"
for 1.7 th April 1948.
,
.1
Bombay, Manila, Tangier, Macao1
portant markets for gold,: most ofl
them applying
a
more
or- 4es^
highly developed technique of in¬
ternational arbitrage.
& I)
j
"But, in the West also, gold has
Charles W. Bassett has joined been sold to the public, and there
the
commodity
department
of have been regular quotations ioi
Goodbody & Co., 115 Broadway, various1 kinds- of coins and^for
New York City, members of the gold in bars op free, semi-free or
New York
disposal
gradually
East, hoarding of gold!
(and silver) has been practised fori
centuries.
In the fifty years be-i
fore the first World War,
ship-1
ments to India and China usually;
absorbed more than a quarter of
the world's current production of
gold—a welcome outlet when, af4
ter the discovery of the deposits!
in the Transvaal, the output be-i
came
sufficiently
abundant
to!
Goodbody & Go. Dept. j
Co., New York,
the
transportable assets which can be and
in
sold without difficulty in almost! Would
November, 1947, specifically
yield' a return in foreign
any market, and will thus retain' exchange beyond the bare value, prohibiting the export of gold at
their purchasing power under ial4 of the bullion.1
increased prices.
The 'float' was;
and
Slewarl J. Lee Offers
have
governments)
markets out of their official
-.jjs;
night he would take out his prospect cards and set aside those which by Eastern countries began to in¬
had interviewed that day. He discarded those which' were un¬
crease, and some gold is reported
promising. He designated those who were to receive follow up let¬ to have been sold at the time by
ters.
such
called
he
favors; through his organization, and he
TOMORROW.
During the depression this
gold -at
to prevent' speculation id
powers
of the most difficult
one
know—memberships in
and
placed
"At'
are everyday examples of how planned work leads to forgotten that dishoarding of Easti
Consistent day to day planning to'see the right oeople, ern gold in the years 1931-34?
knowing your securities and your job, and following through with helped to ease the monetary con-s
service and a pleasant and optimistic outlook on life and
people in ditions in the West during the!
general, will bring you business in ever increasing volume. I re¬ critical period).
of which I
banks
tary Fund and the leading world
business.
member
'
a
balance in valuation of national currencies is established.
These
>
inflation is stopped and
currency
The
the
It is also
or a
black markets until
or
,
one
effort than
know
end of; hoarding
no
true
There
Hoarding
Bank for International Settlements holds, although it is not possible to describe all sources and centers
of clandestine movements of gold, therV Is no doubt tHaf prfvafe markets Have been fed by newly
JO
in U.S. dollars per
fine
ounces
120
120
markets."
"Chart
I shows the quotations
Switzerland, Belgium, France,
Italy and Portugal, in addition to
the prices quoted in a number of
Eastern markets (Bombay, Hong-¬
Kong
and Alexandria). Greece
and Tangier are in a sense bor¬
derline cases: they serve partly as
in
links
between
East
and
West
in
the movement of gold.
"It
will
be
from
seen
Chart II
bery and Co., 48 Main Street, and' that,
will be identified with the Sales
Department cooperating with E. A.
Chilson and E. Graham in South¬
ern
Ulster and Sullivan Counties.
in the'European countries,
quotations for gold fell steadily
until the middle of 1947; the same
was
the
ern
markets, with the exception,
case
in many of the East *
however, of Bombay, where prices
stiffened
appreciably
in
the
Spring of 1947.
Over-the-Counter Quotation Services
"At
this
where
point it
the
free,
plies.
from
The
movements
of
gold
country to another were
rarely on a larger scale than dur¬
ing 1947 and the early months of
1948, but during this period nearly
all
NATIONAL QUOTATION BUREAU, Inc.
Established
1913
Street, New York 4, N. Y.
Chicago
'»
30
30
ill
20
20
10
10
black markets obtained their sup¬
For 35 Years
46 Front
40
may be asked
semi-free and
,
San Francisco
one
the
movements
were
on
of-
cial
account, being the outcome
of direct arrangements between
central banks and governments,
without
in private
markets.
In some cases, however,
the monetary authorities (central
any
0
dealings
1
1
1946
II
I
Mill
I
11
1947
-
H'Sii
t
I
1
1
I
1948
1
1
Iq
;
y
Volume
THE
Number 4714
168
The New
COMMERCIAL
&
FINANCIAL
CHRONICLE
state, trade and local industrial
relations
associations, - NAM is
holding meetings and clinics all
Challenge in Industrial Relations
||
j^
By' EARIr BtNTINO*
.
NAM leader
pleads for teamwork! in^ lafcof-manage nent rclations and wants bothpartiexio be on
"same sich of table
Outlines plans of NAM to im irave labcwMnanagement relations, and to provide j
more jobs for
the handicapped, as well as to in:tall more effective communication with employees*
with
programs,
/isions for steady employment.
pro
i-The
.
new.
This is
But it is
;
To win
of
challenge in. industrial relations suggeste a ^
a
fight to the finish. The greatest fight of our lives.:
fight for—not
a
gues—must
be.^
has
.
■>??
life
today. A: )
new/and hap- r/%
pier -chap-ter.'g
h
n
dft \ wage
being
started.
and
labor
the
go
side
Earl
Bunting
of
the
table—with
all the members of industry work¬
ing together
to
serve
invincible team
as an
our
and greater
new
a
way in which this can be done
beginning to fire Americans
creative
imagination.' When tax
policies are considered there is at
.east
a
growing awareness that
the way toward new industries
and the expansion of existing con¬
The
v
big boss
one
the
—
American public. r <
The job we face today
.
cerns'.
productive
.
big to handle
other way. V
responsibilities have
America's
>
grown
any
growing — enor¬
mously. Not just in our genera¬
are
—
through encouraging rather than
confiscating the capital formation
tion but hi these last few postwar
years.
.
"
The
\XA>
old
.'''j/
concept
of
labor
ahd
management
climbing
wearily
into
the
arena
for
one
more
of the
round
gladiatorial
play to
the grandstands never made sense.
The two participants made
monkeys of themselves by making
holy show of the fact that they
a
didn't
know
how
to-
along
still,
the long suffering public really
took it on the chin. The public
has never had anything to
gain
with
each
from
other.
industrial
sulted
that
But
(1)
get
strife.
That
in less national
much
less
re¬
income
goods
—
more
—
hard feeling in the way of the
teamwork that American progress
takes,
v
"
/
'
No
would
one
gesting
that
the
dream
of
problem
sug¬
of
in¬
I
the
public
already
during the past
there has been
.
The
year
rapidly growing
understanding that the public ex¬
pects a very different type of per¬
formance from its industrial" team
than the old gladiatorial combat.
-Time
generation
seen
an
Our
on.
has
too
entire
recently
the whole world turned into
to
arena
be
entertained
by
muscle-minded
gladiators mug¬
ging to the grandstands while the
productive
job that they ought
be doing grinds to a halt and
to
progress hits the
skids.
of
out
us
in
this
mess.
i
alibis
any
If
that
which
happens the
ment
the
from
public
sense
—
has
a
—
tain other things will
Such as:
f
,
you
hunch that
cer¬
labor that you didn't have
or
simple
humanity
1
:
(1)
If America. cannot
and -good
ing team which gets results.
"Just one result when
you come
that
A level of pro¬
get out of our
can
all that it's got to give.,
Which is plenty.
economy
"We don't want to wait for
to
make
another miracle
and top¬
1 constructive
power
of
American management have done
outstanding job along these
lines for
handicapped veterans.
And it
a continuing job.
The NAM has invited the U. S.
ductivity possible.
do it for
war
to
—
possible.
spots
has
can
can
do it—and
you can
make
You
the
If you two
lasting peace
do it to knock;
been
off
of
inflation
which
tearing at our pockettoo long.
You can do it
books
that the American people's en¬
so
terprise
system
eclipses its
own
best record—swings into decisive
peacetime
competition
and
serf
and
with
the
regimented
of socialism
and
once
com¬
and for
that
freedom is the
mosj; valuable pos¬
session any land can borrow from
us."
v
That; is
''
no
the
challenge
all
we
muster
uncertain
terms.
It
dwarfs
united
unite to do the great produc-
The'
National
Association
Manufacturers t believes;That
■*An address by Mr.
Bunting at
the 15th NAM Institute
on
Indus¬
Relations, Highland
111., June 21, 1948.
Park,
trial
in
us
Commerce
all
join
to "
nation-wide
a
of
resources
dustrial
more or
And
relations
less than
we
nobody
know
ever
*
application of free¬
Personnel
of
-
in¬
are.
nothing
human relations:
..
blame
got
•
well
that
anywhere Tec-
must
ingenuity and
into
employers
the
very
who
are
tp rigid job requirements.
; Experience in the field of jobs
the
that
policies
/
one's
exists
American industry.
(2)
The
NAM
is
American
ahead,
people
taking growing
in their stride—
educators
must
of
give the
American
youth
opportunity to find out how
free enterprise works.
And it is
equally imperative for us to find
every
out how the American way of life
works for the individual teachers
out
Upon any human heart,
depends.
(4)
The
of
has
.
worked
Upon
their
enthu¬
/
most
happy that we have '
distinguished educators with us ',
today.
For many years one cf
NAM's important
programs has
been .to build better nmtual /un^
This
group of people represents
of the most valuable assets in
one
America.
I
long
and hard far full opportunity
for older workers in industry,
1
j
NAM
am
r
derstandirig
between "education
experience
of
older and industry at every level—from
workers, their maturity of judg¬ the; communities of our land to
ment, their' seasoned skill, and national leadership. We are in¬
loyalty, are priceless to American tensifying this overall effort. And
in the field of industrial relations
industry.
we are
especially concerned that
Even: in depression
land.
The
absolutely
irre¬
years, our
showed that the majority
studies
those who teach personnel admin¬
istration, industrial relations and
of
successful companies surveyed
did not discriminate against old¬
er
workers.
They
continued
labor
management relations
should be given every opportunity
to familiarize themselves with in¬
to
employ them and to keep them as
of dependability
on
the
payroll. Whatever NAM does we
dustry's principles, practices and
towers
achievements.
r
aire
on
going- td take
never
dustry
ford
a
The programs
licking
conviction that neither in¬
our
nor
to
loyalty.
this
country
shelve
We
going
only
are
a
I have ' touched
few of the many
af¬
activities NAM has under way to
and
help meet the challenge that all
can
experience
are
on
to
keep
(Continued
CONDENSED
on page
47)
STATEMENT
FIRST NATIONAL BANK
IN
ST. LOUIS
At the Close
the opportu¬
be made in
will
or
leaders.
enterprise to survive—
whole
forge
under¬
relationship
siasm for the opportunity system
and their understanding of how
it works the future of our land
feet that mat¬
own
If that exists,
nity
worked
is
on
ters.
be
handicapped has shown
the burning desire to
it
stand
and
through
understanding in every
community of our land.
And no
.aw
^can
impose
understanding
physically handicapped.
for
the
with in¬
building
it is imperative that we
opportunity for all citi¬
pro¬
| In its b ro a d.es t application,
jpbs- for the handicapped means
of Business, June 30, 1948
.
convinced
RESOURCES
that
sound human relations in in¬
.
dustry will require still more
effective communication with
!•.
f
Communication
street.
talk
It
means
with—not
There
never
is
a:
two-way
the: chance
just
talk
to
to
at.
could be mutual trust
industry unless companies tell
story directly to their em¬
ployees.
Put yourself
in
their
their
shoes.
Could you do your job in
Could you do your job
the dark?
well if you did not know how it
ties in with what the other people
oh
team
your
you
are
doing?
Cash and Due from Banks
$116,864,124, 85
U. S. Government Securities
150,810,702. 29
Loans and Discounts
;
employees.
173,763,616. 06
Other Bonds and Stocks
10,000,251. 37
Stock in Federal Reserve Bank
612,000. 00
Banking House, Improvements, Furniture
and Fixtures
308,153. 30
Other Real Estate Owned
857,002. 00
Customers'
Liability a/c Letters of Credit,
Acceptances, etc.
.53
1,894,256.
Accrued Interest Receivable
.26
858,118.
Overdrafts
.17
54,215.
Other Resources
.30
3,103.
Could
$456,025,543. Vi
put your heart and soul into
it if you didn't know whether the
LIABILITIES
team
was scoring or being scored
against? Who would your natural
human loyalty go to if the news
of everything about the company
which
came
see,
,
we
of
war
pro¬
any challenge from without into
understanding
and
insignificance.
man-by-man
self-discipline
it
The public believes in the in¬
takes to build this country's
pro¬
dustrial team.
Our one job is to
ductive might in peacetime, the
odds are very long that .aggression fulfill. thattrust-^in plenty; : in
peace and:in.full? v.•
'
would force belated
unity upon
us". I do not believe any American / Industrial
understanding ^ and
is content to wait 'till the world good will is the keystone of this
is- again aflame with war before man-sized job.
the
Chamber
in
of
face.; That is the American pub¬
lic, our big boss, speaking in
happen too.
"•
manage¬
all, for all the world to
and I
and 145 million other Americans
possess
anything
either
munism—and shows
adds up and often adds to
whatever horse
*
heart
flight
will it takes to get along with eachother as a hard hitting, fast mov¬
economies
>
If
stands in your way, let us knownow! But we don't want to hear
slave
Defense Outlays, Higher Wages
And Inflation
to
industry and say:
got what it- takes to get
"You've
better
marches
brains and
.
labor
ar¬
a
began
Or it could turn to management
'•
duction
had
of
it could tighten its belt, lower its that the free enterprise system
living standards, and risk the exists for one purpose only: For
danger of Soviet Russia's lumber¬ people. For every individual. Not
ing ox cart economy pushing by just for run-of-the-mill people—
and blocking the road of human if they exist.
And not just for
progress.
people who can adapt themselves
'
v
\
the
millenium
defense
reckon up the costs and found that
it faced two alternatives. Either
and
day
of.
many
placeable
great; responsibility
are handicapped.
•,
.
for
pro¬
underway.
arid the European Recovery Pro-, adjusting more jobs to
gram.
Having made these com¬ real:; abilities of those
right down to it.
But.
The
gram to channel the
dustrial relations has been settled.
We wouldn't need to be here if
rived.
job.
commitments
question
the
of
business and industry to pro¬
vide more jobs| for those who
with their government in making
worse
to
ment for all—not just for some
Americans, but for all.
There is
no easy solution of this
problem.
our
with
mitments,
by
dom
j
Way
that
r
nature
What has happened is that the
American people have gone along
major
,
lies ajn
power
necessary to do the.
the
is
educational
For free
for
human
Some -of these are;]
'
is too
to
answer
in
its-
—
same
grams which NAM has
validate their
the
they
to %
.
belong
NAM Planis Under
/.
costs;
tjevel of productive power; Even
when
management
where
rising
lies'
ijs to- rise to
.
only be
can
written
.
fijr
gressis*"
pro
,
.
They are beginning fd sense: that
the one way to. halfc inflation anc|
a'-ni.;s-
u m
of
round
on
day
It
followed; by
increases
*
liouhd
non-
personnel
provide opportunity and advance¬
fight against.
t
place 'v
no
in V American
with
practices.
zens.
jiope -for A peaceful world." vv-.. ing in and doing our own. share
;
j (2) The American public knows of the job.
what, the inflationary
score
is. J; Are we doing this?
Or are we
They have seen round on round just talking about it?
toVvK
the library. It;
It
is just what I
m
Ijive.jab that alone can put muscle turing the other fellow. Good huand- sinew
and
heart- into the man relations are built by pitch¬
returned
discriminatory
NAM's
of
standing
which we face is sound
,
Another
[ The test of democracy is.'the responsibilities
through to America's goals for the whole American people, the ancient feud
;Monta-Vrt*
I
message to
ter human relations
dustry
Another basic human problem
r
Capulets
and
i
a
(3)
carrying this
on
broad-gauge programs of bet.
their communities.
j
Points out dangers
unsound in principle.
mean.
(5)
country—to help indi¬
companies more perfectly
team-up with their employees and
vidual
Managing Director, National Association of Manufacturers
expand employee benefit
right
15
America.
the
over
f f^ j
-
and
(111)
ard?
concerned
your
welfare
to you from the shop stew¬
And how could we in man¬
agement
hope to provide an
atmosphere in which the dignity
and importance of the individual
ever
employee is fully recognized if
we
Capital Stock
$10,200,000.00
Surplus
10,200,000.00
Undivided Profits
7,890,061.15
Dividend Declared,
and Nov.
28,290,061.15
Payable Aug. 31, 1948,
30, 1948
600,000. 00
Reserve for Taxes, Interest, etc.
1,545,752. 47
Unearned Discount
281,873. 58
Liability a/c Letters of Credit, Acceptances, etc.
did hot find out at first hand what
Other Liabilities
the
Demand Deposits
1,901,516. 55
hopes
and
fears
of
our
em¬
ployees really are?
Good neighborliness, from the
grassroots up, is also as close to
the heart
of all human
relations
Time
5,028. 90
$358,552,456.03
Deposits
59,886,412.67
'
U. S. Government
Deposits
4,962,441.78
Total Deposits
423,401,310.48
as^anythihg I know.
This is also
a definitely two-way
relationship.
'It -is. up * to management to
keep
its community informed on com¬
$456,025,543.13
policy, practice, and accom¬
plishments.
And it is equally up
pany
to
management
to
i
take
whole¬
hearted part in
community lifesensing local sentiment and mak¬
ing friends for the enterprise
tem which
In
close
sys¬
they personalize.
cooperation with NIC
St.
Louis'
v
.
; V.•
....
Largest
.
Bank
Member Federal Deposit Insurance
Corporation
/
16
COMMERCIAL
THE
(112)
FINANCIAL
&
CHRONICLE
,
.
It will be observed that net
Thursday, July 8, 1943
>
operating profits were substantially
A. vK. Rose With
better in the first six months of 1948 over 1947 for Bank of Manhat¬
Bank and Insurance Stocks
Chase National and Guaranty Trust, but that their total net
profit, including securiy profits or losses, are somewhat lower. Total
net earnings of Bankers Trust, Irving Trust, Manufacturers Trust,
and Public National show improvement over 1947 first half results.
Indicated six months' earnings of First National and United States
Trust are above indicated for the similar 1947 period. In the case of
tan,
By E. A. VAN DEUSEN
This Week
Bank Stocks
—
writing the second quarter statements of most of New
York City banks have been published. Comparative results are some¬
what mixed.
Compared with the first quarter, and with 1947, com¬
mercial loans are up but investments in governments are down.
Deposits are mixed, as also are earnings.
Table I shows deposits, loans and discounts, government securi¬
ties and total earning assets for June 30, 1948 vs. June 30, 1947. Bank
of' New York's deposits and assets are higher than a year ago as
might be expected, due to its merger with Fifth Avenue; the same is
true of Chemical in view of its merger with Continental.
TABLE
I
Discs.
Depos.
Sec.
Loans
Earn.
U.S.G.
&
U.S.G.
Manhattan
of
Discs.
Sec.
Assets
Depos.
Bank
of N. Y. &
5th Ave.
Hanover
338
812
142
240
369
102
165
291
Chemical
:
1,175
1,305
539
519
1,177
1,409
450
606
1,129
4,445
Bank
&
1,203
2,169
369
464
959
42
126
171
1,118
1,633
529
440
formed
to
fellowships to educators for
grant
98
at
a
press
153
Exchange
'ifX
52
76
145
•;"? t
t
t
Corn
Exchange
768
72
512
606
752
79
470
571
704
124
467
680
530
94
368
569
Club.
679
1,406
2,197
1,123
2,097
181
■
2,352
870
301
548
874
1,013
413
384
823
2.113
450
1,179
1,711
2,116
555
1,024
1,647
4,835
2,418
Irving
Trust
York
New
U.
____
2,291
3,848
4,748
1,310
1,883
261
524
589
252
239
497
125
301
438
502
147
240
410
32
70
120
110
32
70
120
ect
■
23,221
6,280 11,659
19,362 22,523
7,310
City Bank Farmers Trust."' tMerged with Chemical.
Includes
of Kid-
Peabody
;der,
18,274
9,600
Co.,
com
chair¬
of
the
mit
tee,
man
^
proj¬
Amyas
,Ames
&
TbTALS
explain¬
the
The table shows that aggregate
Archibald
now
vK.
associated
("Jack")
with
"
is
Rose
their
New
York trading
National Association
ties
In
ing
3,636
241
108
___
1,182
625
520
Trust
Trust
S.
Trust
National
Public
f
1,036
_
Manufacturers
Archibald vK. Rose
Hogate.
Luncheon
National
i__
all-out campaign
luncheon by officials of the Joint Committee on Education
/v. on June 30 at<Sv
the
Stock York Stock Exchange; Donald D.
First
Continental
Corn
educational institutions the general and detailed
nature of the securities business.
The specific plans were explained
1,084
51
178
Commercial,
by
make known to
to
3,317
1,461'
4,155
1,361
195
__
3.680
1,169
Trust
National
Commercial
603
408
683
505
1.431
.
National
.
reported
are
The Wall Street Community has launched an
426
1,341
Central
Chase
that
Assets
1,034
79
Baltimore
and
announce
studying all phases of!security business.
;
($000,000)
817
328
earnings
lower
Committee
Joint
Earn.
($000,000)
415
i 356
1,005
New York
Exchanges,
Wall Street Launches Information Drive
'
Bank,
the
Stock
Exchange, National City and New York Trust.
Factors which will affect the rate of earnings during the second
half of the year include: moderately rising operating expenses and
increased reserve requirements on the minus side, with stiffening
interest rates and high volume of loans on the plus side.
Total
Total
&
Somewhat
-June 30 , 1948-
Loans
possible due to mergers.
last year are not
> ' ;
'
-June 30, 1947—
Mackubin, Legg $ Co., members
Of
York, and also of Chemical, direct comparisons with
of New
Bank
this
At
Mackubin, Legg & Co.
department, 76 Bea¬
Mr.
formerly with Fitzgerald
& Co., Inc.
of Securi¬
ver
Dealers—L. Raymond
Billett,
National
Dealers;
Herbert F. Boynton, H. F. Boynton & Co.; Wallace H. Fulton,
Executive Director, National As¬
sociation
of
Securities
Dealers;
Dean G.
Rowland
Collins, New
■York University.
Street,
New York City.
Rose was
Chairman of the Board,
Association of Securities
Kuhn, Loeb Places
;
Equip. Issue Privately
American
General
Transporta¬
deposits of the banks listed are
said "the se¬
tion Corp. announced July 7 that
only moderately below their totals of a year ago. Loans and discounts
it has negotiated through Kuhn,
curities
busiare higher
by $1,030,000,000 or approximately 16.5%; holdings of
n e s s
Loeb: & Co., the sale of $8,160,00(1
is con¬
governments are lower by $2,059,000,000 or 17.7%, and total earning
equipment trust certificates, series
stantly changAmyas Ames
assets are lower by $1,088,000,000 or 5.6%.
43, to a small group of institutions.
ing and adBetter than average gains in loans and discounts were made by
The certificates will mature seri¬
;
justing to new
Chase National (21%), Commercial National (21%), Guaranty Trust
ally in quarterly instalments to
conditions, the last five years hav¬
(28%), Irving Trust (37%), Manufacturers Trust (23%), and Public ing been a period of particularly
Arthur S. Kleeman, President of and including July 1, 1968. Ma¬
National (17.6%). Bank cf New York's gain of 29% and Chemical^UgjJg^."Manv^Tthe nro'b- Colonial Trust
turities to and including. July I,
Company, has an¬
gain of 43% are obviously affected by their mergers with Fifth****** chanZe- MaiW 01 the Prob
lems
confronting the business— nounced the promotion of C. F. 1953 bear dividends at the rate of
Avenue and Continental.
•
questions involving money mar¬ Meyer to Assistant Vice-President 2%, the balance at a rate of 3V8%,
Table II presents 1948 earnings for the first and second quarters,
kets, cyclic movements, type and from Assistant Secretary and As¬ The equipment covered by the
and also for the first six months of the year compared with the simiavailability of capital, the effects sistant Treasurer, and Charles F. trust consists of a total of 1,246
Iar period in 1947. Also book values for June 30,
^taxation and government con- Bailey to Auditor from Chief Ac¬ new tank, refrigerator and hopper
cars.
froT on free markets—are prob¬ countant.
TABLE II
C. F.
Meyer Promoted f
By Colonial Trust Co.
1st 6 Mos. 1948
1st 6 Mos. 1947
*
.
'
^
•'
'■ '
;c:
...
>
.
,
Bankers
Trust
Central
Net
Profits
Oper.
$1.38
$1.08
1.25
Corn
First
National
.87
.76
50.98
1.50
1.50
122.46
1.27
1.06
1.59
.78
1.71
1.74
•
.61
43.77
.81
.45
1.48
43.84
2.45
1.21
1.24
42.10
20.52
21.58
1,369.56
__—.
9.18
4.89
4.29
363.85
7.70
9.74
1.58
__.
2.01
8.32
—
-
—
U.
S.
Trust-
_
"Includes
are
.30
23.10
securities business.
61.42
of the
48.93
dertaken in the belief that it will
108.46
1.56
1.58
1.13
1.20
733,17
9.89
8.96
18.85
55.58,
;
"v
operating earnings exclusive of security
a few cases.
NEW JERSEY
City
SECURITIES
Bank Stocks
The
Committee for
program
1948 is
of mutual benefit to
be
business
and to
colleges. The securities in¬
dustry will benefit from the re¬
search, the interchange of ideas
and
the
relationships
resulting
.
,,
.
knowledge of the great financial
This program is being
started in a small way in its first
year.
We believe that it has farreaching possibilities."
centers.
different
from
been awarded scholarships.
Laird, Bisseli & Meeds
York
Stock
Exchange
Established
120 BROADWAY, NEW YORK 5, N. Y.
Telephone:
Bell
BArclay
Teletype—NY
1891
18 Clinton St., Newark
7-3500
2, N. J.
MArket 3-3430
1-1248-49
ft. A. Gibbs, Manager Trading Dept.)
They
Paul Lloyd Howell, Assistant
Professor of Finance
at North¬
N.
Y.
Phone—REctor 2-4383
Wisconsin;
—
Stock
of
Exchange
Amyas Ames, Chairman,
Association of
Charles B.
Harding, Smith, Barney & Co.;
Walter
W.
Stokes, Jr., Stokes,
Hoyt & Co.
Vilas,
President,
Stock Exchange Firms;
GEYER & CO.
Investment Bankers Association
INCORPORATED
NEW YORK 5:
WHlTKHALL 3-0762
NY 1-2876
BOSTON 9
CHICAGO 4
LOS ANGELES 14
10 Post Office Square
231 S. LaSalle Street
210 West Seventh Street
HUbbard 2-0650
FRAnklin 7535
BS-297
CG-105
V
—Julien H. Collins,
vestment
Bankers
"Wall Street
67
Robert
SAN FRANCISCO 4
Russ
Building
YUkon 6-2332
LA-1086
PRIVATE WIRE SYSTEM CONNECTING:
Michigan 2837
SF-573
NEW YORK, BOSTON,
CHICAGO,
CLEVELAND, PHILADELPHIA, ST. LOUIS, LOS ANGELES, SAN FRANCISCO
TELEPHONES
TO:
Providence,
Hartford, Enterprise 6011
Enterprise
7008
.
.
W.
Robert
W.
al
Fisher, Blyth & Co.;
Clark, Jr., Education¬
Director,
i>
York
Francis
A.
Bankers
Investment
Association.
New
President, In¬
Association;
.
.
Curb
Truslow,
,
Detroit, Enterprise 6066
we
are
Exchange—
President,
New York Curb Exchange.
New
Emil
York
Schram,
are
*
i'fi
*
%
$6,000 gross and this has been accomplished through
the untiring efforts of Messrs Beck, Murphy, Reilly and Strickland,
who represent
the "Commercial & Financial Chronicle."
How about your
being read
as we
ideas?
We the committee know these notes are
do get comments, now may we ask for
■
K. I. M. YOUR NSTA
*
-0
*
.
.
.
*
Stock
Collin, Norton & Co.,
120
Broadway,
New York
President,
New
5, N. Y.
SECURITY TRADERS ASSOCIATION OF NEW
The
YORK
Security Traders Association of New York announces it will
again hold a summer outing. It will be held on Friday, Sept. 10 at
Island, home of the New York Athletic Club.
A feature of the afternoon will be an all-star soft ball game
which in itself should undoubtedly be worth the price of admission,
Travers
especially
as
there will be FREE BEER.
highlights will include horseshoe pitching, golf, and a
hatful of surprise contests.
There will be prizes, prizes and prizes—
for contest winners, contest loser, spectators and others.
As the capacity of the club is limited, ST ANY members are urged
to make their reservations before the public announcement appears
in the "sheets." The Arrangements Committee the same as for the
Other
■
STANY
dinner.
The price of $8
per
person
includes
sumptuous
a
dinner, gratuities, use of lockers, etc., and FREE BEER before dinner.
Members of the Committee are: Arnold J.VWechsler, Ogden,
&
Co., Chairman, Arrangements
Committee. Horseshoes:
Greene and Company.
Co. and Joe Cabbie,
Larry Wrenn, Allen & Co. and Frank McCall,
Softball: Joe Eagan, Frank C. Masterson &
Abraham & Co.
Exchange—
suggestions?
.■..
"BUY ADVERTISING"
>
HAROLD B. SMITH, Chairman
Yearbook Committee, NSTA
;
Wechsler
.
Portland, Enterprise 7008
;
stop
counts."
We are over
Finance at
Kidder, Peabody & Co.; Homer A.
■
"You can't
further advanced at this time.
are:
Association
X
great number of our membership
a
University of North Carolina.
Firms
.4J-H.
Advocate,"
"Christian
O'Neill,
John T.
and
Assistant Professor of
WHOLESALE MARKETS IN
v
certain
University; Frank Max¬
Graner, Assistant Professor
of Finance at the University of
mittee
INSURANCE STOCKS
of the following quotation which was ad¬
you
Wesleyan
well
The members of the Joint Com¬
BANK and
the
by
people from thinking—but can you start them? That's what
We think the above is most fitting at this time as
western
the
3^
vanced
,
„
Three educators
J. S. Rippel & Co.
LIBBING"
We must remind
not thinking about
the work your Advertising Committee is endeavoring to do for them.
To put it more frankly, this job is not an easy one and can only
X'ur^5Psucceed when our membership looks upon this work as a necessary
on
the other hand, will be.in a
adjunct toward the progress of our National Organization. While it
position to acquire first - hand is true we have several months to go, nevertheless, we should be
are:
Members New
"AD
un¬
parts of the country have already
Request
on
Edu¬
.80
QUARTERLY COMPARISON
Circular
on
1.29
However, this is feasible in only
19 New York
"The Joint Committee
cation represents all phases of the
.30
3.14
NSTA Notes
and to students.
.78
2.33
18.12
shown.
our entire economy.
Accordingly there are many as¬
pects of the business that are of
interest to economists, to teachers
1.30
City Eank Farmers Trust.
Wherever possible, net
profits
m«a:bndn«8 jtseg^Jut
advantage of
1.67
3.47
_
Meeting' them intelli¬
gently benefits not only the secur-
0.60
-
1.58
2.09
3.17
ccftfirfcry as
whole.
a
2.59
0.57
2.30
Trust
Trust——.
lems which affectethe;
59.18
40.59
City
York
New
59.52
.85
.86
2.49
Trust.
Manufacturers
1.63
1.24
Irving Trust
"National
$32.73
569.67
3.00
1.73
National
*
_
_
1.11
Exchange
Guaranty
$.56
1.63
1.32
1.39
Trust_
&
1948
Quar.
...
$.52
■SZ®
3.00
___—___
Bank
Commercial
.
June 30,
2nd
.
Quar
10.90
_
National
Chemical
Sec.,
Values
Indie.
or
1st
Profits
$1.10
Hanover
Chase
Incl.
Incl. Sec.
Book
1948
Total
Total
Net
Y. & 5th Ave.
Bank of N.
or
$0.94
'
f.
Manhattan—.—
of
f or Total
Oper.
i!
j
Bank
.*
Indicated
Indicated
y-
ridge, J. Arthur
Postley & Co.
Golf:
Jerry Kane, Luckhurst & Co. and Ted Plum-
Warner
&
Co. Cards: Sam
.,"
*
Gronick, Gilbert J.
*
-
,
THE
Number 4714.
Volume ,168,
COMMERCIAL
FINANCIAL
CHRONICLE
Francis Schanck Wilh J
What Price Marshall Aid?
CHICAGO, ILL.—Bacon, Whip¬
ple & Co., 135 South La Salle St.,
members
of
not to insist
Chicago
Stock
European currency devaluations has had only tem¬
reassuring effect and there is growing feeling Britain will be
forced to abandon principle of Empire Preference.
porary
on
nounce
the
manager
,<$
was
rushed
—
the
revised
was
considered to be far
Par¬
the text
liament
in
from
few
wording of
thought
through
a
Moreover, the
satisfactory.
insistence of the American nego¬
on the right of the Admin¬
days
without
hav¬
tiators
ing been
con¬
istration
sidered
ade¬
deliveries
24
prefers to
government
signing of the pact
postpone the
until after the time limit of July 3,
if
even
in
of
some
doing
so
benefit
the
it will lose
to
allocated
Marshall Plan.
Britain under the
the
Jr.,
municipal
Mr.
ated
dictate
with First
has
been
Boston
associ¬
Corpora¬
negotiations. Rather than ac¬
cepting
unfavorable
terms the
government is prepared to lose
an amount of aid proportionate to
the
delay between July 3 and the
signing of the pact, which will
not take place until after it has
been approved by Parliament.
The publication
of the terms of
awaited with great
interest in London. Many people
the pact were
to
judgment
reserve
after
they
On
have
are
the
valuation
absence
is
rather than
future
as
it
of the
materially
during the last few days. Until
recently the main argument in
favor of accepting the pact was
stand
trade deficit, and it
impossible
before
ma¬
raw
terial imports.
now
become
This argument has
powerfully
rein¬
the threat of a war
by
with Soviet Russia over the Berlin
conflict. Many Conserv¬
currency
atives
until
who
recently
were
opposed to concessions affecting
Empire Preference are now in¬
clined to reconsider their attitude,
"first
the
on
first"
things
must
come
principle.
The
the
likely
to
decrease
United
has
argument
influence,
to
however,
a
large number of the opponents of
the
pact. Their argument runs
the
Chicago office. Dur¬
ing World War II, he served four
of active duty in the U. S.
the
to
devalue
sterling,
vantages of such
than
more
reason
which
aid
have to
aircraft
Ernest
Smith & Co., 2 Broad¬
New York City, members of
way,
belongs to
League Club
Bond Club of
OF THE
the
and the
Chicago.
New
have
York
admitted
Curb
Louis
the
United
States
grant in order to keep the
carrier
afloat."
It
CHASE
CITY
tages to
the
OF NEW YORK
be
derived
aid.
RESOURCES
Cash and Due from Banks
What is causing even more con¬
than the fear that Britain
cern
U. S. Government
might be forced into devaluation
contrary
the
JUNE 30, 1948
disad¬
the advan¬
from E.R.P.
to her
fear
best
interests
that under the
might have
to
is
State and
pact she
abandon
some
of
$1,203,034,945.43
Obligations
Municipal Securities
1,632,762,060.73
.
escape clauses embodied in
Havana Final Act, with the
result that she would have to give
up
and
quantitative
discrimination
Empire Preference at a very
.
.
•
Other Securities
37,494,179.62
•
*
126,899,161.59
Loans, Discounts and Bankers' Acceptances
1,461,069,553.89
early
date.
kind
would
Concessions
provide
of
this
the
is
ar¬
gued that the development of an
acute conflict in Berlin should in¬
Accrued Interest Receivable
•
Stock of Federal Reserve Bank
attacks
American
ment
forced
some
of
Loan
Britain
to
avoid
Agree¬
repetition
Acceptance Liability
.
.
.
•
.
.
20,343,543.62
•
.
.
7,950,000.00
abandon
the
the
8,561,369.20
•
20,617,572.94
that
the
.
Mortgages
Customers'
for
•
main
against the
pact. Opponents of the pact recall
ground
.
this
of
Banking Houses
30,660,493.36
Other Assets
1,939,071.00
•
$4,551,331,951.38
ex¬
perience.
There is
LIABILITIES
growing feeling that,
a purely economic
point of
view, Britain would now be in a
a
from
much better position to
terms
demanded
States than she
in
the
reject the
the United
by
in
was
1945.
For
requirements, the
rest,
working
and
goods
Britain
classes
stocks
have
is
war-weary
of
become
had
a
replenished.
prepared,
both
on the terms of the
pact is
likely to be determined largely
by the development of the conflict
over
Berlin.
ease
between
resistance
stiffen;
Should
now
to
$4,154,808,627.36
•
2,960,000.00
....
8,291,321.26
Payable August 2, 1948.
•
•
Reserve for.Taxes, Interest, etc.
Other Liabilities
21,425,322.92
consumers'
better
now
•
*
meantime
British produc¬
tion has been converted for
peace¬
time
Deposits
Dividend
the
tension
Acceptances Outstanding $ 25,661,968.10
Less Amount in Portfolio
Reserve for
4,238,300.52
18,482,323.76
Capital Funds:
.
.Undivided Profits
.
.
$111,000,000.00
.
.
Surplus
154,000,000.00
.
58,940,688.50
and the debate,
the
should the
would
pact
tension
323,940,688.50
grow
resistance
worse
21,423,667.58
Contingencies
Capital Stock.
duce the United States to moder¬
might become
confined largely to the pro-Com¬
ate their demands instead of ex¬
munist elements in Parliament.
pecting Britain to accept them for
the sake of co-operation in face
The
ington
statement issued in Wash¬
its original
no
a say
of
cies produced a
But
it
did
States
longer insists on
demand to reserve the
right to have
devaluation
United
the
that
Government
not
regarding the
Peter
last.
On
second
P.
McDermott
&
change,
Cohn
is
announce
now
in
that Sidney D,
charge of
the
firm's investment service depart¬
ment.
secure
public and
trust
deposits and for other
at
purposes as
$266,101,220.00
required
Co., 44
Wall Street, New York City, mem¬
bers of the New York Stock Ex¬
European curren¬
reassuring effect.
$4,551,331,951.38
United States Government and other securities carried
Cohn With McDermott Co.
of the common danger.
Exchange,
J.
Newman
to limited partnership in the firm.
STATEMENT OF CONDITION,
decision would
a
outweigh
bate
rier afloat.
of
Union
and
in
stocks.
Ernest Smith Co. Admits
Cook and
rather than lowered. It is felt that
That being so there is
why Britain should ac¬
cept costly conditions for the sake
their aircraft carrier in
conflict with Russia, it is to
no
the
counties
THE
defla¬
The trend and outcome of the de¬
a
as
Dupage
organization
He is
member of two School District
of Education in
that
with preferred
inflationary trend in
States and
their
"If the United States want to use
Britain
ings and Loan Association.
Board
municipal depart¬
of
connection
near
interests to keep the aircraft car¬
lines:
following
the
on
tivities
increase
in
materially and mentally, to
face a period of austerity. On the
other hand, in the meantime the
international
political
situation
has grown incomparably worse.
broadly
director of the
a
and of the Hinsdale Federal Sav¬
manager of the
some inscrutable reason the
United States should force Britain
British
political
failed
Mr. Schanck is
number
a
safeguards included
meeting her in the Bretton Woods Final Act,
would become' and the result had proved to be
very
long to disastrous. They are anxious to
maintain vital food and
forced
Com¬
Transport Service.
terms
of
chance
no
would
Britain
it
without
that
Plans and
Staff
of
the
number
The
increased
has
63
the
many
contained.
as
on
Harriman, Ripley & Co., Inc.,
Wall Street, New York City,
announce that Richard T. Kearns,
formerly of the staff of Spencer
Trask & Co.; became a member of
their trading organization on July
1, 1948, and is conducting the ac¬
as ex¬
Transport
result of the contrast
a
between the
hand,
opponents
former
mander Air
cidedly undervalued in relation to
the dollar,
and that its under¬
become
other
the
supporters and
of the pact who had
already decided to support it or
oppose it, without knowing what
there
Officer
Facilities
a
if, for
the
until
Air
Squadron Eleven and
tion since 1930, recently serving as
years
foreign stations
officer
of
do¬
on
Municipal Bond Club of Chicago
Schanck
ment of the
consisted
activities
States
its
government did not want to rush
available.
ecutive
bond
department.
tionary trend in Britain. Conse¬
quently, it is argued, the gold
value of sterling should be raised
preferred
as
mestic and
aid
Owing to the delay in the negotia¬
tion of the pact, it became evi¬
dently impossible to debate its
terms before that date, and the
•
the
an¬
with
of British experts have expressed
the opinion that sterling is de¬
Dr. Paul Einzig
that,
the
Exchanges,
association
service
war
various aviation
17
Kearns Trading For
Harriman Ripley
notice
the 'United
to
During recent weeks
on
rather than do
that,
of
and
was
Commander, in De¬
valuation.
of
Commons
June
York
a
specific
provisions in the pact .about de¬
nnounced,
House
moment's
a
enable
in
even
however, in
the
at
Government
of
Council
t he
a
would
Lord
The
Marshall
stop
New
as
cember, 1945.
has caused widespread uneasiness.
It is felt that this trump card
quately, would
repeat
itself.
President
to
the
firm of Francis R. Schanck,
LONDON, ENGLAND—The British Government's decision to
postpone the debate on the terms of the bilateral pact on EEP aid
was
welcomed with relief in British political circles.
It had been
feared that the experience with the American Loan Agreement,
which
released
His
Dr. Einzig notes some opposition^ in Britain to recent agreement
with U. S. in the matter of Marshall Plan aid. Says
policy7of U. S.
(113)
Naval Reserve from which he
Bason, Whipple & Go.
By PAUL EINZIG
""1
&
Member Federal Deposit Insurance Corporation
or
are pledged to
permitted by law.
18
THE
(114)
COMMERCIAL
City Bank of New York, in July "Monthly tetter/'
perilous trend in new projects for Federal spending.
sees
"j
when the money is
defense
To
to5 the
subtracted."
ever
turn
partment
for
heads
more
pleas
when
that
President
the
$40
a
year
wJl
BROWN BROTHERS HARRIMAN & CO.
The
penditures
for
1948
figure
billion.
$37.5
'49^
is
that program
of Condition, June 30, 1948
ditures
cash
ASSETS
on
Hand and Due from Banks.
.
.
.
.
United States Government Securities
_.
Loans and Discounts
Customers'
Liability
...
on
•
42,918,093.01
4,939,273.87
.
.
.*
.
.
Acceptances
*.
,
*59,263,764.33
.
..
19,394^54.79
.
Other Assets
1,092,426.92
$230,295,423.19
LIABILITIES '
Deposits—Demand
.
.
\
Deposits—Time
.
.
.
.
$192,768,435.64
_
*
"
"
individual
725,531.59
Reserve for
Expenses, etc.
Contingencies
$
Capital
Surplus
1,500,000.00
13,885,283.54
crease
IT Brown-
billion
Thatcher M. Brown
Complete Facilities
Deposit Accounts
Ray Morris
Louis Curtis
the
E. R. Harriman
Knight Woolley
-
Brokers
for
of
Purchase
Credit
and
Sale
Securities
Investment Advisory Service
Limited Partner—W. A. Harriman
Managers
L. Parks Shirley
Edward Abrams
Howard P. Maeder
David G. Ackf.rman
Edwin K. Merrill
Donald K. Walker
Joseph R. Kenny
M. Dutton Morehouse
John C. West
Ernest E. Nelson
Gale Willard
F. H. Kingsbury,
Jr.
•
Harry L. Wills
Joseph C. Lucey
Assjstant Managers
William C. Horn
Robert H. Chamberlin
came
John A. Knox
Arthur K. Paddock
Louis C. Farley, Jr.
Thomas
William F. Ray
James Hale. Jr.
Herbert Muhlert
Arthur R. Rowe
Laurence W. Siuonds
William A. Hess
evidence
This
were
George E. Paul, Treasurer
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 ex¬
amination by the Commissioner of Banks of the Commonwealth of Massachusetts.
'49
Fiscal
Dramatic
It is true today as it
then.
Elects New Officers
Denind
CLEVELAND, OHIO.—The fol¬
lowing officers were elected for
the year 1948-49 by the Bond Club
the biggest
in
ever
proposed
"The
action
majority
a
pres¬
is
the
of
totally
committee
Rudford
Wilson'
K.
0rin Koeser
inconsistent
ing, certainly it should be for the
purpose of strengthening our na¬
tional defenses against the threats
of the totalitarian powers. Above
all, it should not be used to chew
up
the
very
materials
which,
should they be needed, are so vital
Outlook
the
year^
to
Unofficial
the
tallies
adjournment
made
of
-
ity favoring
amount
the
President
for
headed
the
plus
authorizations
t
<
px
military spending which, while
appropriations
i-)
-v
■
-•
>:
,
■
-« >
'
4
•
••1 '■'
'■
r
if
Stanley
to $440 million
a cut
of
the growing
programs
declared,
"will
in
which
taxes
urer.
Senator
mean
Byrd
increase
an
will
New governors chosen for
year
private
enterprise system; to its
very foundations."
As Chairman
Bridges of the Senate Appropri¬
ations
same
vote
Committee
debate,
for
stated
takes
and
will
tion it deserves
in
The real
the
budget
MIAMI
;
results
for
fiscal
3-
Doerge,
Co.; Harry G.
to
The
Financial
Chiionicle)
BEACH, FLA.—Inves¬
tor's Service
that
Corporation has been
formed with offices at 420 Lincoln
attenT
Koad. Officers
71'
man,.
danger is not in how
Vice-President
'49
are
Manuel Hoff¬
President; R. H, Struthers,
and
Treasurer;
Milton Feller,
Secretary, and-Sid¬
budget to which new ney Wasserman, Assistant Treas¬
constantly being added urer. ■■■'■7-.
;
will turn out.
toward
the
a
H.
Investors Service Corp.;
the forthcom¬
ing election campaigns.
■
hope
Mericka &
(Special
.
issue will receive
Carl
the
in
guts"
tp
in the face of
propaganda..
citizens
Many
J.
were
Kraus, Ball, Burge & Kraus; Wm.
H. Watterson, Fahey, Clark & Co.
economy
pressure
this
"it
term
Wm.
the
shake
K.
Stanley Eilers, Hornblower &
Weeks, was re-elected as Treas¬
financial demands of
requirements,
R.
Secretary: Wm. Watterson, Fahey, Clark & Co.
programs
already authorized or
under way.
The mounting reve¬
nue
President
Doerge
Vice-President: Orin E. Koeser,
top of
on
Cleveland:
H.
Blyth & Co.;
to
new
Carl
Eilers
Wilson, Curtiss, House & Co.
is not called to
halt
a
drift
sition ol'
$2.8
employes,
of
bigger and bigger
spending, through the superimpo-
since
Congress voted pay increases
government
floor
He presented projections
where the Federal budget is
of
January budget message, and
in
his subsequent
supplemental
requests. At the same time, how¬
ever,
the
on
less.
or
aggregate
sought in
than* the
debate
Senator Byrd aligned
himself with a Republican minor¬
show that direct and permanent
appropriations for the fiscal year
less
the
the Senate,
Congress
were
national security."
our
In
The Cbngress, under the
not in the form of
by Franklin
D.
the
1932
political
Cleveland Bond Club
an arena roi
politics.
lion and far and away
Acceding to the recommendations
of Air Force Secretary Symington,
.the Congress has approved a 70group Air Force proposal which,
.in the .first instance, commits the
government to the expenditure
of $3 billion oyer and above the
President's original budget. } T-v
for
v•».,
in
appropriation
narbors and tiooa
figure
balances:on
fiscal
new
additional contract
iff
approval
campaign.
was
$666 million appropriations m fis¬
cal '49—a 60% increase over the
current year's figure of $41o mil¬
his
Private Bankers and subject to
docu¬
a
durmg
provided
of
tne
Pig
spending.
President's budget included
The
from
with the will of Congress as over¬
billion
as
anew
was
pressures
the
at
ending June 30, 1949,
Licensed
the
on
rivers,
"pork barrel"
calling fdr a "legislative
budget," voted to cut this by $2Y2
billion
to
$37.2 - billion.
Now,
already, practical observers i rec¬
ognize that this'legislative budget
goal is lost—this time mainly by
increased military expenditures.
Arthur L. Nash
Merritt T. Cooke
J. McElrath
deoate
statement,
signed by Alfred E. Smith
Calvin Coolidge, was quoted
Roosevelt
control
expenditures
-
control—traditionally
1946
of
Loans -Acceptances
of
This
with
a
organized
of
ment
and
bill for
Congressional Reorganization Act
and
H. D. Pennington
Commercial Letters
carryback of $3
expenditures to fis¬
government
aggregation
an
and selfish minorities."
$8 billion
the
billion.
Domestic
to
the
demonstrated
was
starting point is the President's
budget message of* last January
which projected expenditures for
fiscal "49 at a total close to $40
Foreign Banking
Thomas McCance
Prescott S. Bush
tor
billion might easily
surplus, even
How hard it is to get
in
them.# Inder
pendence and liberty will be gone
the general public will find
itself in a condition of servitude
moderate
ECA
take
and
and
A Perilous Trend
corporate and
rates
tax
Treasury cash
For
FACILITIES
Stephen Y. JIord
from
has taken charge 6t,
held
total
action, i arise
charge of their government they
will find that their government
cal '48.
<
Moueau
expenditure
a
Unless the people, through
unified
level
by
The
Required by Law $1,600,000 U. S. Government Securities are
Pledged to Secure Public Deposits
PARTNERS
an
to *$40
apart
hand.
$230,295,423 19
As
favor.
of
government must be re¬
fear and without
without
.
2,000,000.00
11,885,283.54
based
$210 billion and is gen¬
fore,
spendthrift govern¬
"All the costs of local, State and
national
duced
level
a
ment.
rev¬
current
of
destruction
personal sense of re¬
sponsibility
and
the
dwindling
value of the currency which goes
and
surplus; pro¬ whelmingly expressed in the reso¬
this tremendous flow lution finally adopted on Feb. 27,
of revenue, approximately $6 bil¬
1948, establishing the legislative
lion yras applied to reduction of
budget for the fiscal year 1949...
the national debt,
with the re¬
"If we must violate our pledge
maining $2 billion going to in¬ for
curtailed governmental spend¬
duced
383,614.87
....
........
the
Of
19,953,738.46
*
Accrued Interest,
nearer
close
wartime maximum.
$ 20,679,270.05
Less Held in Portfolio.
.
locaT
fiscal
income
The
question whether Amer¬
the^ progressive
was
billion,
is
these
ident's budget for these purposes.
The House Appropriations Comt
both
1945 when
in
1,804,350-68 $194,572,786.32
.......
Acceptances
$39 V2
billion.
pay¬
all
Notwithstanding this failure to
achieve the hopedffor reduction in
mittee cut the total back to $539
expenditures, the Treasury closed million—still
allowing a 30% in¬
the '48 fiscal yeap with a Whopr
crease.
The
Senate voted $640
ping big surplus, in the neighbor¬
milLon, nearly all the President
hood of $8 billion (not couhting
estimated.
A conference between
the charge of $3'billion reserve
committees
of
the
two
Houses
for '49
expenditures just men¬
resulted in a compromise on $573
tioned).
Revenues,
which
the
million, a 38% increase over fis¬
President in January, 1947, 'esti¬
cal 1948 and a 14% decrease from
mated at $38 or $39 billion, actu¬
the President's figure.
ally turned out to be near $45
A minority report filed in the
billion, second only to the peak Senate
minced no words:
50,929,969.91
.
State,' Municipal and Other Public-Securities
Other Marketable Securities
$ 51,756,940.36
to
for
forecast
"down
year's cost
when
plans and programs are added to¬
gether and projected j into
the
future, the results raise the fun¬
along with
government
national
a
yield
until fiscal '49.
Cash
of
first
But
ican principles of life and govern¬
ment can survive the
tax load,
revenues substant.aily
above $40 billion a year on pres¬
ent tax rates.
Evidently, there¬
against 1948 expen¬
though the actual
will not be made
even
outlay
subject
plan—the
the
of
little.
damental
then,
even
and
erating
exclusive of the provision of
Statement
of
oh
is
the
European aid legislation charging
$3 billion of the estimated cost of
of
ail
are
carefully
is
revenue
$200
elsewhere—
fiscal
be
The results,
.
level
ury s
within $1 billion of the President's
PHILADELPHIA
BOSTON
NEW YORK
figures
can
an¬
enues, in its turn, is subject to
business fluctuations.
The Treas¬
mainly in the area of foreign aid.
The upshot
was
that total ex¬
PRIVATE BANKERS
the
and
be
European Recovery Program.
eaten up by
were
outlays
very
fiscal
generally broad, most
notably perhaps in the case of the
over
directions
increased
ment"
cannot
tentative
istrators
by the appropriations ^com¬
mittees, spearheaded by Chairman
Taber-of the House Committee,
some
until
be
payment"
on bal¬
expendi¬
change under the force of events.
The discret.on allowed to admin¬
work
Business Established 1818
figure
have the fatal charm of the "easy
in
actual
the President's original
available
ago
effected
,
whether
to
increasing
billion
swered
proposed Ttis
economies
commit
the and from which nothing much is
appropriations ever subtracted. * New. projects,
needed/ / T ; constantly put. before • Congress,
as
prevent
from
checked.
$37.5 billion budget for the (fiscal
year
ended June 30, 1948, the
Congress set out to trim expendi¬
tures by some $4
to $6 billion.
Actually, despite
much valiant
substantial
to
'49 above
money.
recalled
question
tures
passed and it is now possible to
year.
As a matter of fact, high
Says the "Bank Letter":
assess
results, in at least a pre¬
Events of the past two weeks Treasury
officials
openly
pre¬
liminary way.
have raised new questions about dicted a deficit in the new fiscal
The pressure
for enlarged
the trend of the Federal budget year when the tax bill was en¬
Since then, spending pro¬ spending—in almost every imag¬
and
the country's
capacity and acted.
inable
direction—has
been
in¬
willingness to meet its new obli¬ posals of so many different kinds
tense.
Yet
Congress has made
gations without inflation.
With have been under discussion that
the combination of the tax cut, many people have been led to cuts, some of tnem-running to
substantial figures.
For this no
a
much enlarged
military pro¬ conclude that the budget has got
proof perhaps could be more elo¬
out
of
hand.
The
gram, the enactment of the for¬ completely
quent than the attacks;; levelled
eign-aid program, and election- President's original budget pro¬
against the Congress for "parsi¬
year pressures to loosen the purse posals last January—which set a
mony"
and
"penny-pinchipg.'
strings,
talk ( has
been
widely spending target of $39.7 billion—
The experience bids fair to repeat
swollen
current that there will be a re¬ were
by supplemental
what happened last year—only at
a
higher level of spending.
It
be
The
ance
adjournment of Con4
gress,
June
19, all the major
appropriations
bills
had
been
will
nevertheless
enough; nas tefen <cut out
de-:
of
constituents
or
the
At
deficits in the 1949 fiscal
to
:
a
responded
is
bills,
/international
and
lesser extent Congress
itself has taken the initiative and
"Monthly Bank -Letter" of the National
City Bank of New York, the 1949 fiscal budget outlook is analyzed
atid a warning sounded that there is danger to our stability and
principles of government in the trend of adding new items of Fed¬
eral
expenditures
"from
which^
much
Thursday^ July 8; 1948
g o verhmeh t to
aid.
In the July issue of the
never
CHRONICLE
tional
|of Expanding Federal Budget
National
FINANCIAL
requests that he filed chiefly for
additional" appropriations- for • na¬
"
Warns
&
a
items are
It lies in the trend
_
1
•'•i-'-vY
'
■/■{'■is;-"
■
;
Volume
168
Number 4714
THE;
Report More Confidence
(115)
Bolivia's Plan to Resume Service
-
The
In Business Conditions
Business
Survey Committee of National Association of Purchasing
Agents, headed by Robert C. Swanton of Winchester Repeating
Arms Corporation, sees beneficial effect of recent
wage agreements
and brighter political picture.
by purchasing
Survey.
Pro-3—
duction
creases
agents
the
Business
May
sodas,
sand,
steel,
heavy
tin*
titanium,
_'
tallow,
die castings.
'
acids,
4
zinc
Executive
Power.
est
lowing approval by that Congress,
and
upon
completion of
other
formal requirements, an offer will
be made to the bondholders which
provide generally
ammonia, brass fittings, cad¬
mium, chrome, coal tar products,
coke, copper, ferro alloys, fuel oil,
num,
uary.
Back
orders con¬
tinue to
•
as
to
the
w
Febru-
of
conditions,
agreement,
coal
Past Due Interest will be
com¬
(b)
new
erally
tion
rider
to
34%
many
will
March
17%
in
noted
advanced
of
employment
in
vacations
even
more
It is believed that
uates.
over
wide
a
spiral, but
Production
sharp
holding
generally upward ad¬
justment reflecting increased wage
and
transportation
costs.
With
a
many of the
influences
strikes
stabilized
employment
worker
create
more
Prices
are
and
to
been
nan.
1 i
The trend of
reducing invento¬
ries has changed
somewhat. While
60% report maintaining invento¬
ries at lowest
n
announced
Cash, Gold
Due
and
(Direct
State
is
class
past five
price protec
man
or
pening;
rather,
a
this
policy
treme caution prevails.
is
of
L.
Mr.
Curtis from
served
ing,
railroad
ties, rosin, salamo-
$4,645,527,278
Accept¬
on
Bills.
and
Stock
2,682,977
Ownership
Portfolio
in
Transit
.•
.
Branches.
28,128,039
......
Capital
25,971,263
.........
Dividend
4,650,000
..,...$ 77,500,000
6,115,385
.
.
5,370,967
Interest, Taxes, Other Accrued
Expenses, etc.
7,000,000
,
Other Assets
Total
Other
and
Unearned Income
Surplus
1,561,915
with
39,792,976
7,200,000
.
....
....
.
10,424,319
for:
Unearned Discount
International
of
Bank Premises
Items
Reserves
37,020,477
Federal Reserve Bank
in
$50,217,295
.
Undivided Profits
'£4,995,679,834
Total
are as
.
,
.
.
.
.
162,500,000
,
34,367,350
•
.
274,367,350'
$4,995,679,834;
.
of June 25, 1948
CORPORATION)
Chairman of the Executive Committee
of the Board
President
W. Randolph Burgess
Jr.
Howard C. Sheperd
TRUST COMPANY
Office: 22 William Street, New York
Condensed Statement
Detroit
—
the
late
(IN
Colonel
hav¬
west Airlines.
was
a
First Lieutenant
serv¬
Officer in Charge-of Flying
Post Field,
Fort Sill, Okla¬
as
homa.
;
In
addition
to
preferred
stock
of
con¬
the
company was considered and it
the sense of the
meeting that
no
action be taken at this time.
DOLLARS ONLY—CENTS
OMITTED)
Cash
Due
and
Banks
from
.
LIABILITIES
*.
-.
$ 23,959,474
U. S. Government Obligations
Fully Guaranteed).
or
Obligations
of
and
in
1,077,004
«
Municipal Securities
.
.....
and
Securities
Federal Reserve Bank
.
Bank Premises
Other Assets
.
7,926,361
,
.
Advances
Real Estate Loans
Stock
93,665,485
Loan Deposit
Reserves
Other Securities
and
$101,847,428
.
$1,729,484)
Other Federal
Agencies
State
Deposits.
(Includes United States War
Hancock's
tion of the dividend upon the
of June 30, 1948
-
Loans
Mr.
as
ASSETS
(Direct
During World War I, Mr. Han¬
cock
of Condition
as
*
many chem¬
icals, coal, cocoa butter, diamond
powder, fats, ferromanganese,
frit,
pig iron, lumber
(mixed), mag¬
nesia, menthol, paper,
pipe, print¬
OMITTED)
for
Acceptances
,
...
.
1 otal.
.
.
.
.
(Includes Reserve
of
$310,652)
.
,
for
4,441,191
.
Dividend
'
101,038
1,085,986
1,373,869
Capital
,
«
•
•
•
$10,000,000
Surplus
.
,
i
\
\
10,000,000
600,000
3,079,383
,
was
rachloride; castings,
of June 30, 1948
as
1930
vertible
Reported up: Acetone,
alkalies,
aluminum,
ammonia,
asbestos,
babbitt,, .calcium carbide and tet¬
par,
Grenville L. Hancock
all price climb is not
firmer tone in many
par
Sher¬
election, the matter of the declara¬
a
Customers' Liability
Adams from 1919 to 1930 and
The number of
commodities in
in price far
overbalances
the decreases.
established
Securities
1918
ing played a direct part in the
early financial history of North¬
Commodity Changes
markets.
and
Head
E. S. Evans of that
company
ing
over¬
of
below
1,308,134,577
Discounts
CITY BANK FARMERS
Hancock
Co.,
ex
large, it has
purchase
demption of bonds at
82,591,319
Wm. Gage Brady,
•
Though the
for
available
Less: Own Accept¬
245,222,036
,
former director of Evans Products
re¬
creased
when
fund
the
1941.
at
Specific
a-nd
Chairman
&
hap
of
ances
(MEMBER FEDERAL DEPOSIT INSURANCE
to
are
spot-checking
frequently.
Some
that
of Condition
Undivided Profits
,
9,008,433
29,008,433
2,428,452
$135,297,052
Total.
.
.
,
.
.
$135,297,052
$8,850,463 of United States Government Obligations are deposited to secure the
United States War Loan Deposit and for other
purposes required or permitted by law,
Glidden, Morris
to Admit
(MEMBER FEDERAL
DEPOSIT INSURANCE
CORPORATION)
Glidden, Morris &. Co., 72 Wall
Street, New York City, have ad¬
mitted John C. Glidden as a
gen¬
eral partner.
In the past he was
with the firm as a
limited
partner.
Chairman of
the Board
W. Randolph Burgess*
on
all
constituting
retirement
Loan Deposit $37,481,988)
Figures of Foreign Branches
with Jackson
re¬
political
survey
balance
$302,660,341 of United States Government Obligations and $2,272,208 of other assets are deposited
to secure $228,380,560 of Public and Trust
Deposits and for other purposes required or permitted by law
associated
with
developments may create a sec
ondary boom and cause rash
buy
ing. There is no evidence in the
current
3%
at M. I. T. He
was
Buyers
more
ployed
principal
Liability
.
of
in
was
the
is expressed that
the
cent favorable labor and
the
Deposits
20,026,721
Real Estate Loans
East¬
Mr. Hancock
concern
at
Lumber
Co.,
Lebanon, Ore¬
the three-month commitmen
range which has governed for
markets
interest
Sant'iam
Buying policy continues within
ported.
new
1,788,510,291
Municipal Securities
and
per
outstanding from time to
(Includes United States War
by Paul F. Col-
gon.
tion, to induce large quantity
ders for longer
periods, are
of
cumulative
in¬
DOLLARS ONLY—CENTS
Other Federal
of
total
bonds stamped
Office: 55 Wall Street, New York
$1,461,486,097
Banks
from
Agencies
Eugene,
Oregon, and
Buying Policy
of
the
on
for
for
any
LIABILITIES
Fully Guaranteed)
or
Obligations
of
satisfactory turn
for
date, plus
ment
during the
1954
U. S. Government Obligations
Plywood Mills
of increased production.
Offers
a
4%
ice to be applied first to the
pay¬
Service
of
required
through
(IN
Mr. Han¬
sentative
is being« obtained on
higher inventories, because
buying
terest
$1,500,000
balance
ASSETS
Repre¬
ern
rate
months.
than
Ihe Associated
ments, 24% (slightly more than in
May) indicate increases. Several
ward
not
1949
years
than
The
monies,
Chair-
s,
cock
operating require¬
over
Prices
The
election
of
Grenville L.
Hancock to the Board of Directors
of
Northeast
Airlines, Inc., has
im¬
Inventories
their
less
last
Hancock Elected Director
being watched closely.
a
less
not
Including Domestic and Foreign Branches
Banking Corporation
competitive markets.
comment that
orders
with
removed,
productivity,
of
issued thereafter; this 4% serv¬
or
provide each
Condensed Statement
.Loans
back
even
rising; Inventories
static.
Employment unchanged.
Buying policy hand-to-mouth to
90 days.
purchasing executives look for in¬
creasing supplies, resulting from
proved
and
about
month.
production-retarding
of
will
ances in
Canada
commodities—no
that
time,
not
Head
Other Securities
Prices
Republic, will provide
service
of
service.
June.
scarce
Summer
areas.
cut
to
is
labor
Commodity Prices
range
(c) Beginning with Jan. 1, 1955,
THE NATIONAL CITY BANK OF NEW YORK
reporting
reduced
dropped from
employee loss through draft will
be more than offset by June
grad¬
con¬
Caution is still advised.
cern.
par,
phepQl,'
have
than last year.
Draft
Act, is giving buyers much
in
Skilled
to order¬
the
Those
employment
ly procurement, contained in the
powers'
(2)
bonds
22% report increased pay¬
as
rolls.
filling up; compe¬
tition is growing; a switch to a
buyers' market in several lines is
war
Bolivia
continuing high employ¬
61% reporting this condi¬
ment,
are
approaching. The threat
below
par.
year so long as any assented or
hew bonds are outstanding a sum
The June survey indicates gen¬
the
prompt adjustment of other wage
controversies, and a brighter po¬
litical picture.
Purchasing agents
point out, however, that material
pipe lines
market
or
the
1952; 2% for 1953 and
1954; and 3% for 1955 and there¬
to Dec. 31, 1948.
arrears
the
after.
promised by the issuance of
interest in
bonds, either (1) by purchase
in
by redemption through call at
Employment
a
as
of
of
methanol,
Better available: Bearings, steel
balls, electrical supplies, fasteners,
several mill supplies.
close
More confidence is
expressed in
general business
result
lead,
;
some papers,
pipe and fittings, nylon, tin, zinc.
level.
ary
steel,
nails, nickel,
rate
last month,
are
iron,
glue,
about
same
and
Robert C. Swanton
build
at
up
the
.
Minister
for 1951 and
follows:
as
On the down side:
since Jan¬
its
annum
on
the total principal of
$61,905,800 of dollar bonds,
.all bonds stamped or issued in ac¬
i
(a) Bolivia will pay interest
ceptance of the offer, and not re¬
semi-annually at the annual rates
of: 1% for 1949 and
or
redeemed
before
1950; iy2% purchased
Fol¬
bonds in the principal amount of
Alcohol, cot¬
while
the ton
and burlap bags, turpentine;- $5,627,800; thus the holder of each
n umber re¬
some hardware, electrical supplies,
$1,000 bond accepting the pro¬
porting
pro¬ office
supplies, tung, linseed, cas- posed plan will be offered a new
duction drops nor and
pine oils, cotton textiles.
and additional $100 bond for all
was
the low¬
Continuing hard to get: Alumi¬
of the reports,
ampupt of bonds covered by the
offer, will be used for retirement
Dollar Bonds
on
through
a proposed plan of service for
its four
$56,278,000 outstanding publicly offered dollar
bonds, fol¬
lowing discussions earlier this month between
Foreign Bondholders
Protective Council, Inc., and a<£Delegation of the Republic. The
Current Service will
begin as
proposed plan will be submitted from Jan.
1, 1949, on the newto the Bolivian
Congress by the principal amount of not more than
will
in-, niac,
were
shown in 28%
in
announced
issues of
Bolivian
According to a composite opinion of the Business Survey Com¬
mittee of the National Association of
Purchasing Agents, headed by
Robert C. Swanton, June business activity confirmed the trend of
improvement reported
Republic of Bolivia
Finance, J. Ramono, on July 1
19
President
Lindsay Bradford
a
em¬
bonds
or
*
re¬
20
THE
(116)
COMMERCIAL .&
FINANCIAL
CHRONICLE
has enjoyed rapid growth
in
At the beginning of
its history it entered this field
through the Shawinigan Carbide
Company, from which has been
developed
the
largest
carbide
plant in the British Empire and
also
a
large chemical industry
based on acetylene.
Shawinigan
Chemicals Ltd. is now an impor¬
ness
recent years.
Shawinigan Water & Power
Shawinigan Water & Power of Canada, one of the largest pro¬
ducers and wholesalers of hydro-electric power in the world, re•
of achieve¬
The Shawinigan family includes Quebec Power, Shawinigan
t^ptly issued
ment.
brochure to commemorate its 50
tant producer of vinylite, a
tic material which is used
a
years
cles.
industry,
under way,
industrial
then
just
The
getting
The
power.
has
1,250,COO
more
than
217,0C0 industrial, do¬
mestic,
users
in
farm
an
serving
h.p.
tains
of 25,000 square
power
>:Like most American companies,
rapidly
increasing
capacity remained well in
of
the
period,
up
when
Carbide
for
The
en¬
only
construction
system
not
work
but
investi¬
also
sites
power
and
builds
hydro-electric and manufacturing
that
estimated
is
the
gates
St
the
care
de¬
plants throughout Canada, and in
other countries.
horse¬
The
developed on the
company's
;
(400,00C
preferred
shares
and
$1.63
$1.20
1.47
—
1945__
1.00
1.06
1946
0.90
1944
,
1.07
1943
/
1.09
0.90
(the Trenche develop¬
shares of
common)
are
1.16
0.90
1941
1.07
0.90
1940
0.95
0.90
busi¬
Canadian.
have
years
"hidden"
should be included the
drop to 12.4.
Earn¬
ings figures for the Chemical
company have not been regularly
furnished, but in 1947 the com¬
pany
grossed
$13,166,000
and
made a profit of $1,280,000, equiv¬
sidiary
ratio
would
(There
earnings of 270.
some
(the
1948
being 20%-16).
nearly
difference
points
earnings, but if the full equity in
the earnings of the chemical sub¬
the
on
other subsidiaries, but
plus
price-earnings
ratio
would
be
14.4% based on'published share
share
per
hidden earnings for
they would
probably not be very significant
in terms of parent share earn¬
ings.)
Shawinigan sells currently on
the New York Curb around
20
be
may
23%, the yield based on the $1.20
dividend rate being 5.12%.
The
•1
1
Earnings in recent
shown
590
The
Public
range
from
of
price
Montreal
the
reflects the 15%
non-resident tax
discount in Canadian
funds.
"As compared
with most
U. S. utility stocks, it does not
afford a very high yield.
How¬
ever,
its
investment
caliber is
supported by a 40-year dividend
record, a very strong cash posi¬
tion
(presumably for construc¬
tion), a 23% depreciation reserve,
and a 41 % equity ratio. The com¬
pany's diversification in the grow¬
ing chemical business doubtless
also carries investment appeal.
the
Exaggerates Concept of High
Corporate Profits
20,000 stockholders of which 86%
company's chemical
to
parent company stock; dividends
of $703,000 were paid, equivalent
to about 320 per share, leaving
Shawinigan is currently selling
on
the
Montreal
Exchange
at
owned by
are
The
0.90
.
1942
2,178,250
in 1952.
de¬
1947
alent
i
stocks
ment) is scheduled for completion
to
Divs.
Earns.
Year—
a
St. Maurice, and a 384,000
h.p. plant
excess
immediate requirements
wartime
upper
be
can
join
to
of
for
Moun¬
additional
million
one
miles in the Province of Quebec.
Shawinigan's
It
Lawrence.
commercial
and
area
Quebec
subsidiary
takes
miles
240
flows
the
gineering
Maurice
.
Laurentian
through
of
St.
the
on
which
River,
company
now
are
Union
Chemical
Monsanto
velopment and research.
company's principal hydro
units
was! the first to seek
with
controlled
demands.
war
The alumi¬
developed 10,000 h.p.
num
in
components of DDT and 2.4D (the
new
weed
killer)
plus
many
other products.
Subsidiaries of
the chemical company are jointly
and
1946:
wide range of everyday arti¬
The company
also makes
very
Chemicals Ltd., and Shawinigan<$>
Engineering,
together
with
a mands became abnormally high
number
of
smaller
subsidiaries By forming a power pool of the
including
transport
and
hotel three great Quebec power sys¬
tems—the Saguenay, the St. Law¬
companies.
rence
and
the
i The
Shawinigan—the
company was incorporated
was
able to meet all
in 1898 and five years later had company
growth, due in part to the great
activity of the paper industry,
which supplied 41% revenues in
plas¬
Thursday, July 8, 1943
.*
Dr.
substantial
Henry C. Link of the Psychological Corporation reports, as
pubile believes fact profits
average under 10%.
result of survey, only one-quarter of
According to Dr. Henry C. Link, of the Psychological Corpora¬
tion, if large companies made profits as high as most people think
they now make, most managers would consider themselves unscru¬
pulous profiteers.
If companies made as much profit as most people
thought
they
<?>
should
make,
pared with the 1948 survey, we
the
managers
would
bankers Trust Company
see
ably
profit
companies are actual¬
ly making.
Also, people's ideas
of what they
should make are
slightly nearer the truth. This im¬
provement may be due to some of
prof¬
as
iteers.
In
a
Psychological
B
a r o m e
a more
which large
think of them¬
selves
NEW YORK
slight change toward
a
realistic appreciation of the
prob¬
still
ter
the
educational
measures
which
ducted by
companies have been taking with
their employees and through their
public service advertising.
The
with
veys
con¬
survey
CONDENSED
STATEMENT OF
CONDITION, JUNE 30,
1948
The
Psychological
Corporation
interviews
ASSETS
from
Cash and Due from Banks
$
......
379,251,082.75
coast
New
.
.
.
518,954,817.71
,
York
coast
and
by
Loans and Bills Discounted
Refining Company
State and
HENRY J. COCHRAN
President, The Franklin Savings Bank
539,227,594.70
16,051,198.80
Municipal Securities
Other Securities and Investments
30,391,763.48
....
President
S. SLOAN COLT
13,769,525.14
Banking Premises
tions asked
Union Dime Savings Bank
Accrued Interest and Accounts Receivable
4,073,052.38
..
one
of the ques¬
was:
of
which
iarge business companies take in,
about
how many cents
do you
think they keep as clear profit?"
The same question was asked
in
a
comparable
Psychological
Barometer survey made in May,
dollar
every
The results in the two
1946.
WILLIAM L. DcBOST
Chairman,
interviewers,
"Out
ELLSWORTH BUNKER
Chairman, The. National Sugar
of line with the facts."
Henry C. Link
to
393
U. S. Government Securities
CORNELIUS N. BUSS
in
cities
148
DIRECTORS
startling fact is that in both sur¬
people's ideas of the profits
of big companies are so far out
personal
sur¬
veys were:
President, American Brake
Customers'
Shoe Company
Liability
on
Acceptances
.
.
13,000,205.85
.
JOHN W. HANES
$1,514,719,240.81
Chairman, Executive Committee,
United Stales Lines Company
New
CHARLES D. HILLES
May
1946
1948
13% 24%
Capital
......
$30,000,000.00
Surplus
......
80,000,000.00
And yet,
New Jersey
Undivided Profits
.
,
.
42,941,767.67
$
152,941,767.67
THOMAS A. MORGAN
Chairman, The Sperry Corporation
General Reserve
11,085,435.93
Dividend
PHILIP D. REED
Payable July 1, 1948
1,350,000.00
....
Deposits
Reserve for Taxes,
1,305,093,022.87
Accrued Expenses, etc.
Acceptances Outstanding
THOMAS J. WATSON. JR.
Vice President, International Business
4,372,252.42
.
$15,510,425.73
Less Amount in Portfolio
Corp.
profits
are
six times
to
one
13,379,458.36
Other Liabilities
President, The Commonwealth
26,497,303.56
Corporation
'How many
cents out of every
dollar
Profit
April
May
1946
as
1948
Under 10c
17%
42
f 45
15
17
26
been
deposited to
method described in the
secure
deposits, including $16,318,991.57 of United States Government
deposits, and for other
f
purposes.
i
*
Member of
the Federal Deposit Insurance Corporation
I■
...
to
Security Deal¬
succeed Philip
t,
&
dent
Presi¬
of
Gey¬
Co., Inc.,
&
er
Geyer,
is
is Chairman of
the
National
Quotation
Committee
the
of
National
Association
of
Security
Dealers,
well
as
being
as
member
a
its
New
of
George Geyer
York
District committee.
Hermosillo to Attend
Secur. Administrators
Convention
July 19
LINCOLN, NEB.
has
been
Announce¬
—
made
that
Prax-
Reina
General
Hermosillo, Assistant
Manager of Nacional Fi-
10
over_.
Uncertain
stockholders, dated January 20, 1948. Assets carried at $30,931,777.50 have
Mr.
who
edes
Dollar Companies
Have
York
e
r r
Grammack
Cents
30c and
annual report to
a
ment
10c to 29c
Securities in the above statement are carried in accordance with the
C
do. you think they should
keep as a fair profit?'
per
New
Association
L.
anywhere from
great as they
profits are entirely too
high. Thehrefore, we asked them
this question:
Should
$1,514,719,240.81
the
ers
as
"Many people today think that
"
2,130,967.37
JUSTIN R. WHITING
Southern
high profits like the present.
A
large majority, 68%, believe that
company
Vice President
Machine*
less than 10c on a dollar.
according to government
actually are.
Chairman, General Electric Company
GEORGE A. SLOAN
,
Chairman, Southern Agriculturist
President, The Nutrition Foundation, Inc.
B. A. TOMPKINS
quarter of the people
company
profits
figures, their profits are less than
10c on a dollar even in a year of
these
New Jersey
DANIEL E. POMEROY
10
that
average
WARD MELVILLE
PAUL" MOORE
a
believe
President, Melville Shoe Corporation
29
26
Continuing, Dr. Link reports:
LIABILITIES
President,
York University
__
37
32
over
"Only
Council of New
29
Uncertain
WILLIAM H. JACKSON
Partner, J, U, Whitney Jt Co.
FRED I. KENT
—
10c to 29c
30c and
York
of
April
Companies Get as Profit
Under 10c
s
George Geyer, Geyer & Co.,
has been elected President
Inc.,
Co.
Cents per Dollar
WILLIAM B. GIVEN, JR.
GeorgeEsyer^ Pres. of
NY Security Dealers
*
28%
nanciera will represent Mexico at
the
annual
tional
meeting
Association
of
of
the
Na¬
Securities
Administrators in Portland, Oreg.,
62%, said July 19-22.
companies
ought to earn anywhere from 10
Two With J. A. Warner
to 60 cents profit on every dollar
of goods they sold. In other words,
J. Arthur Warner & Co., Inc.,
these people think that companies 120 Broadway, New York
City,
ought to make much more money announce that Thomas M. Aberthan they are actually making to¬ nethy and Sidney Ornstil are now
"A
that
large majority,
they
thought
day.
"When the 1946 survey
associated with them in their New
is
com-
York
Trading Department.
,
;
Volume
Number 4714
168
;
THE COMMERCIAL
•
Stonier Stresses Dynamic
In the
N.
J.,
the
need
of the American
"
: :
^
of
dynamic banking, always
Harold Stonier, Director of the School and
Bankers Association, stressed
2, Dr.
Manager
friends and neighbors to
S.
buy
rations amid *
Bonds. > Thisy.ha$
by. which, it i|
said that many millions buy their
share of liberty on the instalment
changing
plan.
alert
to
suc¬
ceeding gene¬
nomic
eco-■?
•
hold
sibility
ed out. ."It is
they
evolving
vice
in¬
bonds
these
the
respon¬
years
ahead
become
duel
the
weak
receive
lars
inflated
and
before.
lives, there¬
fore, as bankers you will have a
responsibility to discharge. You
busi¬
and
dustry,
in
if,
dollars back for the stronger dol¬
i
ser-
to
ness
when
an
in
share
to
us
g,"
Dr.
Stonier point¬
thin
undoubtedly
will
customers
our
- •
static
a
In this activity we act a^
our government withouj
On the other han<L
compensation.
-
"Banking is
not
method
a-
agents of
condi-
■
tions.
Savings
•
been
Dr.
Harold
For
Stonier
and
beyond
that,
banking helps
invested
they
.years
the rest of your
many millions of
achieve economic sta¬
must take
bility and satisfy their wants. To
perform these services satisfac-
interest in govern¬
and in the
and
women
an
local, state and national,
general economic forces
ment,
which determine the value of your
But
American
be¬
better
is siphon¬
government
(117)
workers
off
than
rewards
incomparably
workers
for
risk
taking.
of
this
progress
tinuation
abroad,
ing the major share, this source
drying up as is clearly
by the accompanying chart.
It
is
interesting
to
note
that
but
also they receive by far the
largest returns from industry. In
pendent
whereas
the workers have
capitalists
preservation of American
business enterprise. For that rea¬
son
they should be. deeply con¬
vestment and
in
of money is
shown
for
our
U.
-
the
cause
Banking at Rutgers University in New Brunswick,
of
July
on
Executive
higher income brackets.
Banking
graduating class of the Grad¬
of his address to the
course
School
uate
FINANCIAL CHRONICLE
in
which
...
1945—the
this
latest
i information
available t—national
,
consequence,
income
at stake than the
more
year
is
was
the
ing
after taxes of those receiv¬
more
than $25,000
coin
before
rich
be
shows
adopt new methods, different
approaches and advance with the
gently and build one for himself
thus by example insuring that his
shall
own
be
safe
from
when built.'
"While
,
there
is
national leaders and
should have
|
not
enough
funds
capital
ou;
the worker?
over
to
and
over
our
that have followed this course.
years,
mains
our type
of banking reunique among all banking
systems of the present day.
"In recent years bankers have
voluntarily assumed a new responsibility
ral
on
behalf of the FedWe have urged
government.
Manufacturers
The class graduated this year
is composed of 244 bank officers
106
cities
and
towns
in
.
Diplomas
presented to
were
the men by the Chairman of the
Board of Regents of the school,
Loring L. Gelbach, who is President of the Central National Bank
of Cleveland, Ohio.
Condensed Statement
of Condition
High Taxes Are Drying Up Chief Source
of Capital -
In- the current issue of its "New England
tional Bank of Boston sounds
when
levied
on
a
Letter," the First Na¬
warning that high taxation, especially
high income brackets, is threatening
our
it is stated.
"The chief
source
was
the most laggard in
emerging from the depression.
ress
of
this capital is the surplus earnings
"The obsolescence and
physical
ploughed back into business, while
deterioration during the past dec¬
most of the remainder
ade
the
It
from
savings of the well-
surplus
to-do.
comes
this
is
money—used
to
purchase modern facilities which
in turn lower costs,
broaden mar¬
kets, and create jobs—that is the
fountainhead of progress. Largely
as
a
consequence
in
investment
this
of
the
capital
country,
each
succeeding decade witnessed
a
higher level of activity and well-
being until the
near
was
flow
1930's, when the
confiscatory
taxation
that
imposed reduced the capital
to
a
trickle.
Without
this
supply of capital, business became
unemployment
stagnant,
staggering
proportions,
reached
and
this
and
a
half
has
U. S. Government Securities
U. S. Government Insured F. H. A.
State and
Municipal Bonds
.
created
Mortgages
a
equity stock, because of extortion¬
taxes
climate.
tion
of
the
past has
.
.
.
.
21,078,705.28
.
.
3,037,500.00
Acceptances
555.347,284.04
15,160.439.39
.
10,206,041.24
Other Real Estate
Customers'
Equities
.
.
.
.
.
,
.
233.980.73
.
Liability for Acceptances
5,891.554.86
Accrued Interest and Other Resources
6.932.883.73
....
$2,265,689,163.93
LIAR I CITIES
$41,250,000.00
....
.
....
Undivided Profits
.
.
60,000,000.00
....
,
25.425,176.07
126,675.176.07
Reserve for Contingencies
6,874,630.95
Reserves for Taxes, Unearned
Dividend
Discount, Interest,
etc.
.
.
busi¬
Liability
5,555,158.19
.
Payable July 1, 1948
1,237.500.00
Outstanding Acceptances
The largest propor¬
6,669,342.90
.
Deposits
and
ness
.
18,769.921.37
Surplus
ate
.
Banking Houses
healthy basis.
Last year most of the money for
this
purpose
came
from funds
ploughed back into business, while
the greater part of the remainder
represented bank borrowings or
the sale of bonds.
Only a small
proportion came from the sale of
on
.
the
estimated
economy
2,938.264,45
.
.
Other Securities
Capital
our
Mortgages '
.
.
.
Stock of Federal Reserve Bank
outlay of from
$50 to $75 billion in order to place
an
unfavorable
equity
come
602.840,245.16
1,023,252,343.68
greatest deficiency in capital fa¬
cilities ever known, and will call
for
$
........
Loans. Bills Purchased and Bankers'
country which for decades had
led the world in economic prog-
system is dependent upon
steady flow of fresh capital,
which is the lifeblood of business,"
a
close of business June 30.1948
economic
system, which is dependent upon a steady flow of fresh capital.
"The perpetuation of our eco-^
nomic
as at
It 12 S O U1I C E S
Cash and Due from Banks
Warns
COMPANY
TRUST
33
states and the District of Colum-
bia.
money
in
as
Endorser
on
Acceptances and Foreign Bills
.
.
2,319,435.62
.
2,116,357,920.20
the
$2,265,689,16353
from those in the
United States Government and other securities carried
at
NET INCOME AFTER TAXES OF HIGHER INCOME GROUPS
public funds and
IN RELATION TO NATIONAL INCOME
trust
deposits and for other
$62,616,384.25
purposes
as
required
pledged
arc
or
to secure
permitted by
law.
(I» Billions of Dollars)
200
DIRECTOR SEDWIN
J. BEINECKE
FREDERICK CRETSCIf
Chairman, The Spcrry & Hutchinson Co.
'
EDGAR S. BLOOM
'
West Indies
ALVIN G.
OSWALD L.
BRUSH
President, George A. Fuller Company
CHARLES A. DANA
of the Board
President, Gcrli & Co., Inc.
Higher Income Croups lo Mulimial Income
HARVEY
Products
C.
R. PALMER
GEORGE J.
D. GIBSON
W.
Corporation
VAUGIIAN
Corporation
HENRY C.
PATTERSON
Chairman
ALBERT N.
VON ELM
of the Board
WILLIAMS
President, Scranton & Lehigh
President, Westinghouse
Coal Co,
President
Air Brake
Head Office: 55 Broad Street, New York
MORE
THAN
75
j
President, Curtiss- Wright
President, Cluelt Pcabody & Co., Inc.
PAOI.INO GERLI
Chairman, Trust Committee 1
L. A. VAN ROM EL
GUY
President, John P. Maguire & Co., Inc.
President, United States Lines Company
SMITH
President, National Dairy
JOHN P. MAGUIRE
JOHN M. FRANKLIN
V.
President, Home Insurance Co,
President, Emigrant Industrial
Savings Bank
President, Dana Corporation
RICHARD
City
ERNEST STAUFFKN
JOHN T. MADDEN
HORACE C. FLANIGAN
Kalirt of Net Income Aflcr Ta\c» of
HAROLD
MACLELLAN
President, United Biscuit Company
of America
LOU R. CRANDALL
«
JOHNSTON
F.
C.
New York
Simpson Thacher & Bhrtlett
KENNETH
Corporation
Vice-Chairman
Vice President
HAROLD
President, Lambert Company
Steamship Lines
Chairman, American Home
Products
WILLIAM G. RABE
President, Lincoln Savings Bank
JOHN L. JOHNSTON
Chairman, Atlantic, Gulf and
•;
OFFICES
IN
GREATER
Company
City
NEW
YORK
European Representative Office: 1, Cornhili, London, E. C. 3
Member Federal Reserve System
oo
a
O
~
cm
m
o
r-*
<x)
c.
n
OM<MCM<M<MCMCM
m
~
^
CO
£>
cncncnmoiaicn
a
oi
cn
■
econom;
tick, and the vital role played b;
capital and savings.
Otherwise
provide the tools that are indis¬
"The driving force behind our through ignorance and prejudicer
pensable for new jobs and higher progress has been the spirit of the 'temple' may be pulled dowr.
living standards.
Not only are private initiative in response to upon our heads."
are
neglect."
from
violence
better understand¬
a
ing of what makes
been
,
yet time,
\ struggle^ by default or through
changing times. Because American
banking on the whole has been
able to do this over a period of
that
enterprise. Let not him wht
pull down the house
another, but let him work dili¬
of
to
to
That
is houseless
succeeding generations bondholders' dollars. In the area
amid
changing economic* condi- j of political action our fate as
tions
means
that banking must; bankers may be determined.
It
ever be on the alert and willing i would
be shameful to lose that
torily
work-
and
demonstrated
again by countries
has
as
should
some
'soaking the rich' is like
less, based upon data firing a shotgun into the crowd.
furnished by the United- States It is a
shortsighted policy as it
Treasury. In 1929 the net income jeopardizes all interests. Experi¬
after taxes of this group consti¬ ence has
indisputably shown that
tuted over "8% of national income, confiscatory
taxation
chills the
but by 1945 it had been reducec
spirit of personal initiative, dis¬
toi.7%.;,;,.„
courages
the
accumulation
oi
"We need not feel sorry for the
savings, " and forces capital into
rich as they can somehow manage
hiding. Carried to its logical con¬
to get along. Rather, our concern
clusion^ confiscatoj^i taxation de¬
should be for the workers as they stroys wealth and distributes pov¬
erty,
a
others may become rich, and hence
is just encouragement to industry
"So
the chief sufferers when there
address
an
of
capital in?
safeguarding of
As Abraham Lin-*
positive good to the world.
lays
about 58%
are
prospect
on
the
ingmen at New York in 1864 said:
the golden eggs.'
a year was
in
con^
is de¬
.'Property is the fruit of labor;
that property is desirable, and is a
about
any
action,
'kill the goose that
would
aggregate* amount of net in¬
come
return
property rights.
the
hearly 110%' more, thah^in 1929, cerned
the
upon
reasonable
A
21
.
Member New York Clearing House Association
.
Member Federal Deposit Insurance Corporation
22
(118)
THE
COMMERCIAL
what its
—he may
As result of survey made by
Controllership Foundation, its Presi¬
dent, Daniel J. Hennessy, presents recommendations for new type
be issued
to
:
to
sent
about
j management relationships.
these
remarks
Y'Y Y
a
on
x*—
stockholders,
many
if
the
his
"For
annual
conducted
the
Founda¬
tion
Elmo
by
Roper,
Mr.
Hennessy
falls
report
between
two
the
isv doing,
whole
and
he
lament
The
~
,
Corn
On the other hand, most of 'the
large investors covered in the sur¬
New York in its windows
survey
re¬
Avenue
Americas
the
of
type
prescribes
far
a
counting terminology, plus a fullscale annual report —
designed
as
document
source
a
consumer
about
the
stock in," the
owns
of the exhibit is
purpose
tell Americans
as
the company
—
810.899,655
.62,552,224
$
TRUST
June 30, 1948
sophisticated large
investors, financial experts, bank¬
ers
more
others
and
access to
who
in
lack of in¬
a
the part of both
on
information
such
ready
cold statistical facts. The
study also disclosed
terest
wish
as
groups
company
labor policy, government relations
Total
1.435,711,400
1,305,093,022
Deposits
Cash
and
1,208,560,200
due
banks_
from
basic
many
needed
in
of
America.
these
Samples
materials
raw
*
325,483,500
482,045,500
539,227,594
551,268,000
42,941,766
42.428,000
U.
of
Govt.se-
S.
curity
hldgs.
Loans and bills
are
shown.
*
379,251,083
518,954,817
Undivided prof.
raw
*
if
Manufacturers
Trust
of New York
Company
announces
MANUFACTURERS TRUST COMPANY,
NEW
YORK
that Car)
L. Moehwart and Karl Wolff have
been
appointed
taries.
Mr.
Assistant
Moehwart
June 30, 1948
Secre¬
is
in
Total
department at the bank's
head
office,
while
Mr.
Wolff
makes
his headquarters
at' the
2,085,683,267
due
banks
from
602,840,245
558,277,393
1,023,252,344
1,080,513.835
555,347,284
496,448,941
25,425,176
24,005,172
Govt, se¬
S.
hldgs.
curity
branch office located at 84 Broad¬
2,231,881,921
„2,116,357,920
and
Cash
U.
$
2.265,689,164
resources
Deposits
loan
Loans and bills
Brooklyn.
way,
discounted—
Undivided prof.
the
*
M.
Earl
York
bank
Savings
Bank
that
announces
.
BROWN
of
this
month.
FULTON
—.
of text
pages
de¬
"With
be
needs
TRUST
OF
NEW
BROADWAY
1002
Building)
Condensed
,1
Cash
York
Cash
U.
Vault
on
MADISON
(Bet.
office
6th
at
77th
&
Sts.)
investors' reactions
____
Federal
Reserve
Bank
'
„
368,011.72]
|
*.12,590,122.73 ^$31,947,025.77
...
Deposit in other Banks
Government Securities
on
S.
State
and
Federal
Other
846,255.44
18,142,635.88
Muhicipal Bonds
Reserve
Bank
Securities
Loans
Secured
Loans
and
of
531,715.49
Stock
120,000.00
L
by
Bills
2 446;196.59
Collateral--
;
Purchased—
Overdrafts—Secured
$2,717.63:
Real
and
Estate
York
Bonds
l
Unsecured
$493.50-
3,211.13
—
■
Real Estate
(Branch Office)
Accrued Interest and Other Resources
161,502.69
461,700.83
,
Mortgages..
83;503.19
50,000.00
__
—'
139,085.37
;
$38,943^941.06
LIABILITIES
Due
Depositors
„
Dividend
No.
175
Reserved
for
Taxes,
Payable
July
Expenses
1,
1948
and
:,i Capital
—„—
Undivided
—_
$33,218;313.43
30,000.00
;
Contingencies
323,418.23
&00d;000.$0
•
——
Y Surplus
—-
1,372,209.40
_
giving out more information
than they used to, and that this
is all to the good as far as the
cerned.
the
to
investor
is
con¬
bank
Avenue
a considerable
minority objects
trend toward glossy
new
pictures and.expensive for¬
mat in annual report preparation,
terming them a waste of money.
A second group of about the same
paper,
size
applauds the new format ten¬
—•
perhaps not so much
because of the added appeal to
the respondent himself, but more
Cash and due
of
a
belief
that
it
is
?
thing for the less sophisti¬
from
banks
U.
51,756,940
Govt,
S.
•
ity holdings
CHASE
THE
John Adrian Larkin
Chairman of
the
counted
59,263,764
13,885,284
Honorary
Arthur J. Morris
Chairman
President
Stanley A. Sweet
Stephen C. Clark
Charles
J.
Nourse
Franklin
Charles Scribner
Charles
S.
McVeigh
Henry W.
B.
Lord
Bull >
Charles.8. Brown
E.
Townsend Irvin
,
Walter
Russell V. Crulkshank
O'Donnell Iselin
Frederick S.
De
Newbold
Coursey Fales
-
&
N.
•
Stillman
Moseley, Jr.
Morris
Member Federal Reserve System and Federal
Deposit Insurance Corporation
57,957.941
—
Capital and surplus
*
CENTRAL
TRUST
*
13,865,284
tt
HANOVER
COMPANY,
analysts
and
of the study
stock brokers, trust
with
•
Cash
and
Govt,
S.
curity
415,486,774
hldgs.
606,485,001
643,335,515
450,287,764
418,155,809
128.578,640
discounted..-
128,053,265
Capital, surplus
undivid¬
and
ed
J.
profits---
P.
&
MORGAN
CO.
NEW
—
Mar. 31/48
658.294,099 635,159,753
Ca»sh
for stockhold¬
general is likely to satisfy
their needs, the summary brings
out. Nearly all the people inters
in
(Continued on-page 37)
♦.
>
586,791,761
due
Govt,
S.
secur¬
ity holdings—
143,282,710
Loans
BANK
4,675,876,956
4,295,185,05„
Cash
1,725,308,801
U. S.
bills
1,461,069,554
58,940,689
and
®
407,904,968
329,201,051
due
se¬
hldgs.
440,410,477
415,757,180
529,393,201
432,570,769
9,610,356
8,855,503
bills
Undivided prof.
Sj!
$
CITY
NATIONAL
BANK
June 30,1948
*:■'*"
NEW
OF
BANK
YORK
OF
THE
•$ •" .v
o
bonds.
from
U.
S.
4,645,527,278
rill IP
nd
Total
1,461,486,097
Cash
1,289,461,435
'
•••
'
__
and
Undivided prof.
1,275,144.519
32,010,807
*
FARMERS
Total
TRUST
$
banks.
;
holdings
* ■
-
23,959,474
——
U. S. *Govfc.
security
'23,344,322
Hi
''-Tr*
CORN
Si!
tli
EXCHANGE
BANK
June 30/48
Total
resources
Deposits
.
—
fbanks
U.
93,665,485 102,842,577
TRUST
J
,
Mar. 31/43
S.
Govt,
798,866,392 797,073,101
751,545,208 750,630,983
>
1
«
225,099,118 210,420,774
secur¬
ity holdings
470,252,197 486,340,985
Loans and bills dis¬
—_
Undivided .profits—
,
14,937,213
Cash and due from
■
'
_.T—_
.
434.481,540
15,457,718
....
142.413,048
Loans and bills dis¬
counted
i
<■;.
COMPANY, NEW YORK
a".,'".,
du$ from.
342,789,239
hldgs.
425,865.413
CO.,
101,847,428 109,656,253
Cash -and
338,121,358
-
30/48 Mar. 31/48
reserves——/ 135,297,052
Deposits
292,265,877
se-
'discounted—-
YORK
June
\C
345,495,520
:
1.138,737.965
Undivided prof.
34,367,350
NEW
1,059,763*744
Loans-and bills
Govt,
•
BANK
CITY
1,169,109,532
1,088,388,999
Y
due
U. S.
curity
1,308,134,577
$
banks-
from
.
—
1,846,680,036
Loans and bills
discounted
resources
Deposits
hldgs. 1,788,510,291
]
,
Mar. 31, 1948
$
>
Govt, se-
curity
:
COMPANY,
YORK
June 30,1948
4,507,009,250
^f'och
*
MANHATTAN
4,850.380.fi2r
Deposits
s|:
NEW
Mar. 31,1948
$
Total resources 4,995,679,834
*
1,168,935,543
discounted—
*
$
"
1,317,248,763
banks-
and
Loans
1,405,956,363
57,389,075
v
Mar. 31. 1948
1,360,694,693
Govt,
curity
COMPANY,
YORK
1,515,183,172
resources
from
__
TRUST
$>
Total
1,257,487,343
profits.
si:
June 30, 1948
se¬
discounted
Undiv.
&
NEW
$
1,203,034,945
&
18,382,864
*
si:
hldgs. 1,632,762,061
S.. Govt,
curity
130,786,454
18,742,686
prof.
Deposits
banks.
from
U.
308,925,722 315,055,076
Loans and bills dis¬
Mar. 31, '43
4,551,331.951
-
143,930,630
from
banks
U.
504,159,814
166,453,828
Cash and
due
and
in¬
nual preport issued
resources—
Deposits
THE
4,154,108,627
resources
Deposits
including
officers,
Total
*
Total
INCORPORATED,
YORK
June 30/48
CHEMICAL
$
410,236,261
se¬
Loans and bills
YORK
June 30, *48
$
1.556.494,715
1,417,743,347
due
banks
from,
U.
fi¬
bankers .as
vestment counselors and others
in ten cities'.— prove that no an¬
ers
OF
•
;
Mar. 31. 1948
1,554,241,363
1,403,010,546
Deposits
Undivided
BANK
AND
YORK
$
fu¬
near
BANK
NEW
June 30, 1948
Total resources
*•
NEW
OF
*
nancial
part
DIRECTORS
Edmund P; Rogers
Board
59,302,764
Loans and bills dis¬
constructed
in the
*
NATIONAL
CITY
-
f
>
50,929,970
counted
❖
5,372,209.40
Interviews conducted
OF
47,919,350
secur-
and
stockholders."
cated
$38,943,941.06
BOARD
$
230,295,423 234,396,113
194,572,786 198,452,741
resources
Deposits
ture.
dencies
because
has
and. will occupy
However,
vociferous
and
good
2,000,000.00
—
Profits
the
ref
are
sophisticated
:
New
annual
to
declares, "there seems to be gen¬
eral
agreement
that companies
New
of
which
port content and format, the study
___$
•___
in
redesigned to meet the
people who really want
dig into it, and who know what
like 'surplus7 and 'reserve'
mean." Commenting on the large
AVE.
78th
of
terms
Statement, June 30, 1948
_•
Deposit
CO.,
Mar. 31/48
$
Total
pub¬
lic in July 1833, it was the first
savings bank in Greenwich Vil¬
lage which then was a separate
community
some
distance
re¬
this
to
YORK
RESOURCES
Cash in
&
June 30/48
the
When
HARRIMAN
YORK
NEW
bank began its service to the
other
accountants
can
(Singer
*
BROTHERS
the
is observing its 115th anni¬
versary
and then offering
*
Harkness, President of
Greenwich
New
Mar. 31, 1948
$
the
—
149
s
1,514,719,240
resources
discounted—
pile of
arrangement," the 16th
Street, is near the 14th Street
and executive salaries
the last
scribing the company's products, Foundation's report observes, "a
center, and a third office on 57th
being labeled "least interesting" policies,
problems,
personalities self-selected public is left for the Street near 5th Avenue is
op¬
full-scale
annual
report, which
posite the new branch building
COMPANY
April 12, 1948
$
to
—
—for the
COMPANY,
YORK
NEW
large stock¬
materials
a
/-> I
:-
63,848,493
BANKERS
of the Union
more
of South Africa
some
V
870,076,684
doing in promoting world trade.
The
financial position and outlook for
re¬
/.
discounted—
showing an exhibit by
Farrell Lines in recognition of the
work that steamship company is
lining earnings, dividends, general
com¬
660,500,757
1,158,058,374
.
interested in, or unable to under¬
stand, detailed statistics and ac¬
primarily
avid
an
680,832,855
1,123,217,847
se¬
hldgs.
is
Street
port goes on to say, "since he has a complete financial report on ret
moved from the northern bound¬
paid good money to get his stock quest."
ary of New York City.
From its
certificates, he is naturally anx¬
Along with such a letter would humble
beginning in a small vil¬
ious to get dividends, and he is
go a condensed income and i sur¬
lage store, the bank has grown to
interested
to • know
what * the plus
statement
arid
a
balance be k
$265 million institution with
chances are that 'his. company' sheet, in order to
comply with three modern oifices in Manhattan
will
remain
strong
enough
to stock exchange regulations. A sec¬
serving moie than 175,000 depos¬
safeguard his capital and become ond document advocated as a re¬
itors. "Throughout its history, the
profitable enough to pay the same sult of the survey would be some-bank has endeavored to make sav¬
or
a
bigger — return on his thing in the nature of a company
ing as convenient as possible for
money.
To him these are simple newsletter telling — again in sim¬
the public," Mr. Harkness said. He
questions that can be answered in ple narrative prose — what the
notes that "for this purpose, the
a
paragraph, and he says he will company i$ doing, -including new
bank's offices have always beer,
be satisfied if his company gives products, new personalities, new
located at major shopping centers
him these answers. »
■
problems, plus a running account of the
city." The main office is
the
"If the company gives him.more of
corporation's
month-toat Broadway and 36th Street; an¬
complicated tables prepared by month history.
simpler
of summary for the 50 to
of shareholders who are not
75%
"not
panies he
Entitled "What People Want to
Know About Your Company," the
report
is
information
of
banks.
Govt,
Loans and bills
48th
at
due
Undivided prof.
the
on
S.
2,760,369,125
2,332;835,818
2,352,216,496
and
curity
The Colonial Trust Company of
Foundation's
holder
Hennessy are be¬
ing published by the Foundation.
1
$
2,799,933,625
resources
Deposits
from
,
findings of the
Total
U.
u
ferred to by Mr.
to
T
:
Mar. 31, 1948
1948
$
in¬
BANK ITEM ONE
OF
YORK
June 30,
Cash
of 'overpaid corporation
presidents' to talk his language."
COMPANY
TRUST
NEW
the
..
-
.
GUARANTY
Exchange Bank
&
of New York an¬
Hayner, Assistant Secretary,
AssistantVice-President.
may
the
4:.:
vV.i
Bankers
the promotion of Silas A.
nounces
went
.
*
Trust Company
vey
asked for more details, and
project, con¬
on
to
ducted by Elmo Roper, disclosed their individual requests for added
information that they would like
say,
"Part of
that tlfe average shareholder has
to see included in annual reports
the large sums
little interest in corporation finan¬
embraced such topics as details on
of money now
cial, data, only 11% of those re¬
contingent liabilities; consolidated
being spent on
sponding in the survey mention¬
income
statements
and
balance
company
an¬
ing balance sheet items as things
sheets going back ten years; rec¬
nual reports
they need to know about in order
onciliation of the surplus and re¬
might well be
to keep track of an investment.
serve accounts; existence and ex¬
directed
into
V
"A third of the respondents say
other channels
Danlel J' Hennessy they try first to find out about tent of hidden reserves; the back
if we wish to overcome misunder¬
company
earnings," the report history of the company's earnings
etc.
*
standing and suspicion of busi¬ avows, "but
another 27%
can
In order to satisfy the run-ofness.
•
:
name
nothing they first look for.
the-mine stockholders who crave
"This survey shows that the Asked about other
things, beside
present
type of annual report earnings, which attract their in¬ simple, easy-to-read information
should be replaced by a different terest, only about half the stock¬ and at the same time not to de¬
prive the more sophisticated in¬
method of reporting," said Mr. holders can name
anything at all."
vestors of the accounting facts and
Hennessy, who in addition to serv¬
An appraisal of the value of re¬
figures that they prize, the reporl
ing the Foundation as President ports
brought out "no great en¬ recommends
and
that* the
Chairman of the board is
present
thusiasm," the Foundation's report
practice of sending all stockhold¬
Vice-President and a director of
declares, revealing that 40% of ers the same
the Jamaica Water
type o-f annual reporl
Supply Co., the total stockholder body profess
should be reconsidered. "For at
Jamaica, N. Y. "Otherwise it is to find no
utility in the brochures least half of the
stockholders, and
impossible to meet the varying
they receive from their current
needs of small
stockholders, large companies, .while 60%. accorded possibly 75% of them," the docu¬
ment advises, "it might be more
investors, bankers, trustees, in¬ them a
"moderately useful" rat¬ effective
public
relations
tech¬
vestment counselors, financial an¬
ing.
nique to send them annually or
alysts, company employees and
Concluding from such evidence semi-annually a one-page state¬
other groups."
that the run-of-the-mjne, stock¬ ment
The
signed by the President, out¬
The
'tI
j
CAPITALIZATIONS
know;
thing into
V'r>
,
and
OFFICERS, ETC.
REVISED-
ability
material."
source
NEW
any simple and
statements about what
company
j
NEW BRANCHES
find
wastebasket
stools," the Foundation's report on
the findings observes.
"It is nei¬
ther good reading matter nor good
for
can't
throw
present
shareholders,
he
believable
-Y,:
——
by the bulk of respondents.
among
survey
to find out what he wants to
companies,
t ionwide
n a
g'V-"";/
CONSOLIDATIONS
questions answered, there may be
some
danger of 'report indiges¬
tion.'
If he has to look too far
according to Daniel J, Hennessy,
Controllership Foundation, New York. Basing his
President of the
News About Banks
or
which he opens the annual report
and
his desire to get only two
improve stockholder and worker-
Most annual reports of the general type now being issued
by cor¬
porations fail in their purpose of informing the people to whom they
are
Thursday, July 8, 1948
new
factory looks like
may not give these
things a few brief., moments oi
passing attention.
But, remem¬
bering the limited interest with
Reports
statements
CHRONICLE
where the
or
of
FINANCIAL
charts and pictures, to. .shqw
company's dollar goes
and
Advocates Changes in Type of Stockholder
&
-
1,085,986
9,008,433
1,165,976
counted
8,856,407 Undivided profits—
78,963,531
4,382,045
73,765,375
3,974,71^ ,'
:
Volume 168
:j THE
PUBLIC
TRUST
r;
Number 4714
NATIONAL
CO.
BANK
NEW
OF
1
„
,
539,509,389 549,381,107
Deposits
—w 502,072,736 512,590,115
Cash and due from
,:,
Cash
j
U.
8.
127,191,132 116,996,457
'j, '
239,678,783,^268,882,604
iZf-C'i,
jGovfc
'
se-
curity holdings
,
Loans and bills discounted
.
..
Undivided profits.-:'
COMMERCIAL
OF
r.', t
•>
.
BANK
"
.
$25;par 'yalu^£poinihpn /stc^k/;:at;
$5C) per/share,;Johnspn^S
Co,,
,98,126,577 103,035.794
,
of the First National Bank and;
purchased the entire olfering of 4,000 shares of the bank's
214{274,323
the underwriters.
were
Loans and bills dis-
%
'•"•t coUhted
\- v
'
>
STATES
/
"
-
TRUST
June
It".'
J.
Total
Deposits
•
*
OF
'*'■
V; 'v'
142.608,437
20,904,201
27,883,839
69,716,247
—
69,894,524
Undivided
32.397.327
1,326,944
:)t
GRACE
1,281,450
#
NATIONAL
BANK,
NEW
due
80,742,820
U.
29,157,010
44,888,820
1943
in
TRUST
"otal
vided
profits
4,061,951
c«
s!s
resources
3,972,581
Deposits
Cash
TRUST
NEW
COMPANY
Total
resources
U.
OF
ity
30/48
$38,943,941
Deposits
Cash and due
...banks
S. Govt,
$40,243,734
«
secur-f
THE
1,161,502
1,372,209
profits—
12,550,224
*
PHILADELPHIA
J
ity holdings
75,872,684
12,663,274
33,992,837
profits
I
Loans "r>d discounts
Undivided
76,547,948
Surplus and undivided
34,546,274
31,947,025
103,194,389
counted
from|
„_
U.
107,085,933
Loans and bills dis¬
Dec. 31/47
33,218,313
70,469,744
secur¬
holdings
NATIONAL
BANK,
PHILADELPHIA, PA.
1,265,361
June
1,357,471
30/48
*
Total
resources
Deposits
Cash and due from
«__
J.
HENRY
SCHRODER
CORPORATION,
BANKING
NEW
YORK
banks
June 30.'48
Total
Mar. 31.'*P
$76,867,743
$65,749.18«'
54,234,094
45,512,523
7,407,920
resources
6,689,437
Deposits
Cash and
G"""t.
S.
S.
counted
38,266,979
NEW
Cash
COMPANY,
Deposits
YORK
Govt,
ity holdings
18,185,832
6,731,681
profits
2,622,339
CLINTON
:Js
2,619,844
:■!
TRUST
NEW
COMPANY,
Mar. 31/48
$26,247,301 $25,835,927
24,396,344
24.010,803
resources
—
due from
banks
7,257,230
6,664,167
10,697,023
6,854,572
6,431,350
842,846
834,008
$
■
NATIONAL
COMPANY
BANK
NEW
OF
v
-ity holdings^;—
.*
38,172,004
-«
79,271,234
74,799,856
30,951,010
profits— "
701,035
counted
25,389,428
685,272
*
Cash
and
Apr. 12, '48
$57,501,545 $50,603,800
due
from.
41.208.4C0
^
:
#
ter of
quar¬
1948 and the
first, second, third and fourth calendar quarters
Net sales of these com-^—;/■-
of 1947.
panies for the first quarter of 1948
the first
were
1.1%.
171,354,711
7,890,061
8,268,117
i\i
•
;k
of
W.
Turner
H. Fred Wil¬
Vice-President,
A, Swaney as Assist¬
Assistant
Russel
Cashier
of
of
Bank
nounced
the
Federal
Chicago
June
$25,186,392,000,
with
$21,102,486,000
Re¬
was
an¬
30
of
quarter
19.4%.
W.
Vice-President,
and
1947,
of
1947
was
Mr. Turner has been
Vice-President
and
is
in
charge of the check collection
functions of the bank.
He has
been : with: the • Federal Reserve
Bank of Chicago since 1918,
He
been
in
charge of the credit
of
711,695,000,
reported
781
survey,
were
first
increase
responding
1947 of
1947 of $3,783,586,000, sales in the
first
over
the
When
-an
of
1948
decreased
using these data
indication
cor-
first quarter sales
quarter
1.9%.
quarter
$20,438,179,000,
21.2%
of
first
quarter of 1947.
Compared
the fourth quarter sales in
with
manufacturing
with
an increase of 13.6%
sales of $3,268,375,000 in the
over
$25,566,992,000,
decrease of 1.5%.
a
sales in 1948 of
Assistant
when
quarter of 1948 decreased
One
hundred
and
seventeen
other companies engaged in retail
trade reported sales in the first
quarter of 1948 amounting to $3,-
the first
Of the 1,070 corporations in the
corporations
on
for
an' increase
sales amounted to
there
compared
Compared with the fourth
quarter
by Clarence
W. Avery, Chairman of the Board
has
business
of
some
of these reports are for
1947
in having seasonal variations of sales.
of
$20,663,717,000,
sales
companies
or
industrial
J. P.
MORGAN
& CO.
INCORPORATED
NEW
YORK
•
^holdings,
—23,636,290
Loans
and
bilis
."-/pavable i_2—_ ' 2,180,559
Surplus • and undiv.
profits'——Ll-—8,202,604
..
.
9,479,300
:
-•
-
23,526,000
■;
•
2,136,600
'
8,180,500
Condensed Statement of Condition June
30,1948
President
22.032 0°8
21.618.80.5
15.333,774
ASSETS
HENR Y C. AL EXANDER
15,260,367
R. AT KIN
Vice-President
-
RAUL C\ CABOT
President State Street
BERNARD S. CAR TER
President Morgan & Cie.
Incorporated
Philadelphia,
CHARLES S. CHEST ON
Cash
Hand and Due from Banks.
on
State and
H. P. DAVISON
Pennsylvania Law
School.
He
engaged in the active practice cf
308,925,722.32
Municipal \Bonds and Notes
12,266,008.61
Stock of the Federal Reserve Bank
Other Bonds and Securities
of Morgan
Grenfell
Sp
1,200,000.00
(including Shares
Limited
Co.
and
Morgan if Cie. Incorporated)
12,510,836.96
Loans and Bills Purchased
COLLYER
Company
He attended
$166,453,827.61
United States Government Securities
Accrued Interest, Accounts
JOHN L.
President The B. E. Goodrich
143,282,710.41
Receivable, etc...
Banking House
1,972,776.32
3,000,000.00
Liability of Customers on Letters
of Credit and Acceptances
$
CHARLES D. DICKEY
until
War
World
he
served
as
I,
RALPH IV.
Re¬
Officer and after which he
dent
and
men's
Cashier
National
nounced
the
;■
Deil-y,
of
of
the
Vice-President
GUSTAV METZMAN
a
,
Vice-President
regret on July 2
of Herbert W.
Vice-Chairman of the
*
-
Vice-President
JUNIUS S. MORGAN
an¬
with
as
Company
TV. A. MITCHELL
,
ALFRED P. SLOAN, JR.
Chairman General Motors
Accounts
$586,791,760.83
3,951,891.63
Acceptances Outstanding and Letters'of
\Credit Issued..
Capital.
..
8,807,759.74
.t
20,000,000,00
i..
Surplus
.
.
—
20,000,000.00
18,742,686.39
-
$658,294,098.59
E. TAPPAN STANNA RD
President Kcnnccott
*
■
Sj»v
••
<
•
'
Copper Corporation
'
''
yi/rjZ?
»* K fr•'
y-
;/;• >;•■>/
JAMES L.
William J. Wallace has been ap-
pointed an investment officer in
the personal trust department of
National
Bank
and
Trust Company of Pittsburgh, it is
learned from the "Post Gazette'1
of that city.
34,396,121.01
Payable, Reserve for Taxes, etc....
Official Checks Outstanding
Corporation
,
•
Mellon
$552,395,639.82
Deposits.
Undivided Profits.
Director.
'
'
Railroad
resignation
bank effective July 1. Mr, Goodall will continue to serve the bank
LIABILITIES
THOMAS S. LAMONT
Trust
Philadelphia
8,682,216.36
$658,294,098.59
Morgan & Cie.
Incorporated
Trades¬
and
125,543.38
Chairman
Vice-Presi¬
Bank
8,807,759.74.
GALLAGHER
President New York Central
E.
Prepayments
N. D. JAY
j,oined the bank. He is President
of the Edgemont Township School
Board, a member of the Philadel¬
phia Club and other organizations:
Howard
Less
Vice-President
during
Naval
a
Vice-President
The paper indicated/,
adds in its June 28
issue, that Mi;/
Wallace, prior to joining the bir,hfe
THOMSON
Chairman Finance
v
I
United States Government securities carried at $18,953,877.54 in the above
statement arc
pledged to qualify for fiduciary powers, to secure
public monies as required by law, and for other purposes.
Committee Hartford Fir*
Insurance
Company
JOHN S, ZINSSER
\ jtMiriaafi-
'SkQtpt:
or
in
Chairman
1. C.
an
possible profits, it should be noted
in
$16,866,992,000.. Compared that
•
53,591,205
as
trends
with the fourth quarter sales
DIRECTORS
22,120,193
53,464,033
,
The Securities and Exchange Commission released
on June 10,
sales data for 1,070 corporations
showing the net sales (including
operating revenues) of these corporations for the first calendar
173,763.616
♦
serve
San
on
118',065,032
profits—
as
with
of
Crocker
,
1 37,352,283
bills
—
,
Undivided
son,
cisco.
116,864,125
and
•1 payable
the
He will,
150,810,702
Harvard, class of 1904, and is a
graduate
of
the
University
of
the
.
16,803,261
U. S; Govt: security
.
24,456,179
.•
47,914,055
-
"banks
'
441,519,067
secur.
Mar. 31/48
-«
TRUST, COMPANY,
June 30, '48
resources
Deposits
Apr. 12, '48
$
due from
holdings
Loans
LOUIS
423,401,310 409,024,975
_•
Govt,
having
at¬
tained the age of 65 retired on
July 1 under the bank's pension
plan.
Mr. Brock has been with
as
COUNTY
BROOKLYN, N. Y.
Total
ST.
Vice-President
funds
Goodall
'
KINGS
S.
secur¬
Company
35,278,309
Loans and bills dis¬
Undivided
banks
U.
TRUST
&
: v,
w"June 30/48 Mar. 31/48
Total resburcesuli/i-145,900,832 143,628,618
Deposits
137,966,394 135,634,656
.banks ————I.
U. S. Govt; secur.
IN
456,025,543
—
John W. Brock, Trust Officer of
Title Bank and Trust Com¬
YORK
Cash and due from
'
r
Land
serve
and undi¬
profits—
#
,
Sc
June 30, *48
Deposits
;
*
BANK
resources
Cash and
become the
Listed Corporations' Sales
During the First Quarter of 1948
27,856,775
Investment Corporation
which
counted
STERLING
30,547,998
•
.
Bank
First National Bank of San Fran¬
serving
Reports
426,652.281
NATIONAL
from
counted
law
Loans and bills dis¬
vided
SEC
»
.
1
of
National
merged
571,430,086
438,146,895
*
total
after
Bank
Crocker
later
National
to
started his
Aug. 1, 1904
$
_•
Govt,
10,991,007
secur¬
ity holdings and
municioal bonds-
Surplus
bills
payable —•
Vndiv. profits—,
FIRST
National
institution for 44 years.
GEOR G E W'HlTNEY
30,'43
the bank since 1920.
YORK
June 30/48
Govt,
629,772,380
__
i
90,224,477
holdings
pany,
undi¬
and
First
Francisco
which
First
on
se-
and
Loans and bills dis¬
19,272,319
6,266,280
*
S.
Govt,
S.
Francisco
San
$
secur¬
counted
U,
April 12, '48
curity. -hldgs-.. 1,125,745,357 1,097,986,763
Loans
Crocker
old
107.049,148
8,416.475
Loans and bills dis¬
Cash and
ity
Capital
9,706,294
Deposits
I
CHICAGO
30, '48
Bank
The
Murphy
career
the
due
banks
from
U.
OF
Mr*
banking
with
On June 30, Daniel" J. Murphy
retired as Vice-President of the
2,275,210,573 2,193,605,354
2,082,217,706 2,002,333,256
—_
and
panies.
war.
*
Chairman Executive Committee
94,597,034
—
and due
S.
Mar. 31/48
due from
banks
Total
Cash
OF
111.333,405
resources
banks
$34,984,975 $35,169,650
29,973,233
30,207,733
COMPANY
s
U.
vided
resources-
Deposits
$
I
NATIONAL
$
•
8,791,615
3,275,853
Deposits
June 30,'48
Surplus
i
157.858.969
TRUST
*
TRUST
resources
S.
June
.
*
4>
ILLINOIS
TRUST CO.
AND
charge of bond drives in
in
ury
the Crocker Investment
held for many yedrs. He will also
continue his membership on the
boards of directors of a number of
San
Francisco
industrial
com¬
Prior thereto he
with the United States Treas¬
R. C. LEFFLYGWELL
9,103,788
June
3,280,070
SCHRODER
U.
it BANK
PHILADELPHIA
undi¬
profits
and
#
..
in
1946.
Michigan during the
to
Company, positions which he has
$
150,793.244
PROVIDENT
Tofal
Cash
"
CONTINENTAL
.
pany and
Swaney
representative
Murphy will also continue
736,044,039 7-09,026,202
669,566,082 641,156,370
profits—
11,915,025
*
Total
'1
secur¬
—
the
Fidelity
arid Deposit Co. since 1910.
30,736,005
9,897,939
counted
and
with
He has
Prior to
of the Re¬
Mr.
Committee
ARTHUR M. ANDERSON
ity holdings
vided
been associated
secur¬
Loans and bills dis¬
Surplus
was
a mem¬
Maryland bar.
Mr.
Executive
Crocker family as Vice-President
of the Provident
Securities Com¬
Michigan and has been with the
Hoyt, who has resigned, is
ber of the
Loans and bills dis¬
Undivided
Mr.
Bank's
bank since
229,846,169 246,264,191
Govt,
27.
June
in 1945.
manager
Department.
the
Smith, who succeeds Sidney M.
ity holdings—— 295,568,929 251,995,942
from
due
banks
U.
U.
of
was
the
Mar. 31/48
s
!.•!
its organization
of the bank.
72,951,493
Govt,
S.
YORK
June
$
from
due
noted in: the Balti¬
.was
"Sun?
member of
manage the various interest of the
ident, it
ant
Mar. 31/48
charge of the
as a
been manager of the Bank and
Public Relations Department since
is
BANK
280,447,829 274,845,657
257,030,361 25U,xJo,»lo
,
and
banks
FULTON
30/48
Mary¬
nounced by Frank A. Bach, Pres¬
Appointment
PHILADELPHIA
$
-:,i
ap¬
Mr. Mot-
NATIONAL
COMPANY,
June
undi¬
and
present
he
of
loaning officer however, continue
was a
23
and
the board of directors
of the bank.
search
as
EXCHANGE
4ND
Company
department,
(119)
for several * years, and was
in
charge of fiscal agency functions
during the war. Mr. Wilson has
that, he
private trusts.
21,335,762
CORN
counted
capacity
his
Deposit
land at Baltimore in
*
Loans and bills dis¬
Surplus
Executive Vice-
a
*
42,407,282
1925.
trustee of the War¬
Institution for Savings, Boston
ren
secur-
of which
President.
as
is also
*
contract department has been an¬
of :.{■
Bank
Vice-Presi-
a
which
until
22,856,788
24,728,853
Govt,
S.
ity holdings,—
-
v:
.
director in
and a number of
from
banks
• •
...
Boston,
a
became
served
rey
92,519,756
Cash and
he
pointment
$
95,606,689
Deposits
-
has
Mar. 31/48
105,966,154
resources
1929
-ient and in
YORK
$
.
Total
•..
Senior; Exec¬
National
of
elected
President,
*
June 30/48
i
Bank
was
In
25.599.807
profits,.
r
Motley,
and Atlas
he
Loans and bills dis¬
counted :
%
■.
and
-
Vice-President of the Web¬
tional
secur-
ity holding——
$.■■
<
Boston,. was appointed its Presi¬
dent onsluly I. In 1902, Mri Mot-'
ley^^ joined^^ the ihyestnient firn^/of
Curtis fc Sanger, Boston^ becom¬
ing a partner in 1911. He later
joined the Webster a?id Atlas Na¬
«: • « •
30/481 Mar1.: 31/48
•
due from
G°vt.
S.
ster
110,043,506 111,511,340
and
ibanks
U.
COMPANY
J", .
141,322,296
*7'
resources
Cash
'■ ;;
'
NEW YORK-" »■»
i
-fr
'
"f
*"< ' *
UNITED
N
■i
Edward
|
utive
♦
The- ejection of. E. Milton Smith
as
Vice-President of the Fidelity
Total
5l;277{417
52,643,856
13;832^09r' I3V710;002
UndiVided^ijrofitSrt'
,
4>
,
more
■
have
secur-!Vi?.'^<..<y,•»-t%***■'
holdine^——
«
^ru^Compan^ .of Bayshw/ei
Mar. 31/48
.
ity
#
.
31,455,454
V l,854,052
It is announced that stockhold-.
ers
1 'tbanks
U. -S;"-G-Tvt.
^
,,
128,206,836
.28,754,785
1,735,531
—
(
AND
YORK
Deposits —';/.■! 178.357,126 188,093,289
HCash and due from ' '/•
;\
'51,240,462^ 50,567,851
.
■■
Undivided profits__
8,187,973
NEW
resourcesdi;'ii:^06,723,750
Total;
62,590,067 ;57;277,948
128,027,889
i
NATIONAL
captain in the Army Air
a
,
„
Govt^ secur-
r
June 30,'48
.
S,
ity holdings—
counted
*
COMPANY
TRUST
!
FINANCIAL CHRONICLE
Forces.
Loans and bills dis¬
*
I
U>
..
8,567,038;
;
Y,
and due from
banks
i
146,573.439 135,597.267
—*
N.
was
Mar.'31/48
I,
' I
" y -1'
'
, 'r
;
.•»
. - v
"l J C>r /. Total resources^,* 230,418,156 229,830,132
Deposits
212,737,220 212,545,915
resources——
banks
COMPANY,
June 30/48
$
" -
TRUST
/ BROOKLYN,
,
Mar<31/48
$
Total
BROOKLYN
AND
YORK
June 30,"48
COMMERCIAL &
THE
Member Federal Reserve System
Member Federal Deposit Insurance Corporation
groups
THE
(120)
24:
COMMERCIAL
continue'
Stocks and Bonds
How to Buy
preferred stocks are more likely
to be maintained than those on
continue to rise, and to rise
may
into
4)
from page
(Continued
stocks
noticeably for several more years.
the common stock.
Even if not
They would like an investment
that would protect them against maintained, they will be restored
before dividends on common stock.
the? worst effects of either of these
Thus
Investments known
convertible preferred stocks
convertible bonds are. a partial
possibilities.
as*
and
the
ferred
much
not
does
that of
as
value
market
stock
of
pre¬
decline
as
stock al¬
common
though it will probably go below
that of bonds. On the other hand,
To understand the convertible
if prices continue to rise, compion
preferred' stock you must know stocks will tend to rise in value,
how company earnings .are dis¬
and in that event the fact that the
tributed. Owners of the securities
stock is convertible into common
of a company are paid in the fol¬
stock will raise the value of con¬
lowing order.
Bondholders' in¬
vertible
preferred.
Convertible
terest must be paid first or the
bonds also perform the same func¬
company will be threatened with
tion, although at present there are
bankruptcy. The preferred stock¬ not
hedge.
The
is
stock
of
return
resolving your
uncertainty as to whether the
price level is going to move up
Last to
generally fixed.
but most favored when
times are good and earnings are
be>
paid,
are
have
stockholders
ferred
cared for.
and
it
If
do
to
courage
hold¬
to whatever other
provides partial two-way
have
you
lest
the
will
be
proportion,
or
If
you
prices
rise
arid
common
in
value, you can
and put the money
up
some
bonds
cash.
or
,
sell some of the bond and in¬
can
vest the money in common stocks
propitious level. Thus,
again, as
they eventually will, you will be
among the first to profit. It takes
courage, however, to follow such
a program as this.
It means you
must
do
the opposite
of what
most investors are doing and you
will be tempted to go with the
crowd. Furthermore, it may take
at
more
a
when stocks start to rise
even
or
waiting before
of
rather
your
of patient
years
you reap
contrary
policy.
least
year—until the
one
1929
crash—before the wisdom of your
action would have been manifest.
Meanwhile
you
would
have
would
action
have
become
ap¬
parent.
Invest In?
to
AND TRUST COMPANY
STATEMENT
CONDITION
June 30,1948
RESOURCES
.
U. S. Government Securities
State and
•
•
t
•
.
.
.
.
.
$127,191,132.24
.
.
Municipal Securities
•
I
239,678,782.93
13,330,001.68
7,231,439.78
Other Securities
146,573,439.01
Loans and Discounts
Customers'
1,269,864.76
Liability for Acceptances.
Stock of the Federal Reserve Bank
•
660,000.00
.
Banking Houses
.....
•
•
•
bonds,
•
2,229,896.94
•
1,120,434.84
Accrued Interest Receivable
224,397.17
Other Assets
in
generalities
aboutHhe merits
stocks,
and
convertible preferred stocks and
bonds. Now the question is: What
the
common
industries
best
to
invest
$539,509,389.35
LIABILITIES
in
few
a
industry
other
you
depress stocks.
Finally, you may be interested
in a good income regardless of
some risk.
Fairly consistent per¬
formers in the past have been the
better companies in the utility, in¬
food,
surance,
soap,
oil, propri¬
etary drug and tobacco industries.
Investments in the steel, non-fer¬
metals, and railroad equip¬
ment
industries may earn and
rous
investment trust of course
The
has
few disadvantages.
a
Sizable
and manage¬
included in the purchase
costs
for marketing
ment
are
price. You will find also that it is
expensive to shift your invest¬
ments from, say, the building ma¬
terials
group
to the oil group.
And you do not have the fun of
and watching
picking
investments;
someone
own
your
else is do¬
ing it all for you.
If the investment
trust idea ap¬
better dividends in good
to
you
after you
have
times, but their earnings can fall peals
off alarmingly fast
if economic weighed the advantages and dis¬
pay even
obvious that many
have not been cata¬
It should be
industries
logued,
but
by
looking into the
records, which we shall tell you
about, you can classify some of
them
yourself.
The Advantages of
general
should
you
limit
watch them 'more
can
you
a
makes
yourself to investments in a few
companies in a few industries, so
that
recommend
panies with diversified interests.
For example, duPont de Nemours
chemicals, nylons, fertiliz¬
the
Investment Trust
In
ask your broker to
good one.
You may gain some of the ad¬
vantages of the investment trust
and still preserve your freedom to
move' cheaply if you invest in one
of the nation's really big com¬
advantages,
conditions change.
Possibly you will ob¬
ject to this idea of a few invest¬
ments bn the ground that it is
gun-powders, and owns a
quarter of General Motors.
The
big insurance companies also have
their funds widely invested.
Fire
insurance
companies have large
holdings in common stocks and
casualty companies favor fixeders,
income investments.
putting all your eggs into one
basket.
There
of
is,
course,
a
What
happy medium betweeri too great
concentration and too great di¬
Should
Know
About
the Bonds You Buy
By now, you may have picked
The dan¬ four or five industries and are
in not being ready to look for one to three
versity of investment.
ger of diversity lies
able to watch your
You
investments;
companies in each industry to in¬
of concentration is that vest in. We shall also assume that
you may be so unfortunate as to
you intend to buy both bonds and
choose
an
unprofitable or less stocks. Let us look at bonds first
profitable company. If you are because they are usually consid¬
unwilling to try to strike this ered safer. Bonds are a debt, and
happy medium - yourself, or are the stipulated interest must be
in.
aghast by this time at the number
paid on them on pain of bank¬
All that can be done here is to
of critical decisions you have to
ruptcy.
You will want some of
make a few suggestions about the
make, there is an easier way out your savings in bonds. The safest
industries to choose. If you expect
for you." It is provided by com¬
bond today is the short-term (one
that the price level will continue
panies
known
as
investment year) government bond. A gov¬
up for some time, then avoid in¬
trusts.
ernment bond of somewhat longer
dustries whose prices are likely
One kind of investment trust maturity that is especially recom¬
to
be
regulated
or
controlled.
buys a wide variety of bonds, mended by trust companies be¬
Their
profits may be squeezed
common
stocks
and
preferred cause of its many advantages is
thin
between
rising
costs
and
stocks and has a staff of experts the Series G.
Although the in¬
price ceilings. Railroads had been
to watch those securities carefully. come on these is low, remember
having a difficult time until re¬
The investment trust will sell you that you are buying them for safe¬
cently,
because
the
Interstate some of its own shares of stock.
ty, not income. In fact, so long as
Commerce
Commission
did
not
These represent a participation in you are buying bonds for safety,
increase their rates as fast as their
its broad list of investments*
If buy only the best.
There is no
costs
went up.
Public utilities
the trust's selection of securities substitute for quality, and quality
faced the same problem.
Choose
alone provides the protection that
is good, you
should receive an
instead
industries the prices of
adequate return.
If the invest¬ you are seeking.
whose goods or services may be
We shall assume that the other
ment trust makes poor choices,
raised without delay and without
the opposite will happen. Actu¬ bonds you buy are issued by in¬
curtailing the demand apprecia¬
ally it is more likely to do well dustries, railroads, and utilities.
bly.
The automobile industry is
are
certain
other funda¬
than badly because it has expert There
a
good example.
Oil is another.
advice. Also, even if a few of the mental facts you
should know
If you expect the price level to
securities held by the investment about any bond that you buy. Sev¬
be fairly stable, then choose in¬
trust prove disappointing, others eral of these will be named and
dustries
that
make
goods
for will
probably do better than an¬ discussed briefly.
which there is now a pent-up de¬
(a)
What does the company
ticipated. You will thus have the
mand, such as building materials, advantages of diversity.
make?
How big and how old is
automobiles, and perhaps railroad
the company? Has it a long his¬
A second type of investment
equipment. Also desirable are in¬
Did it
trust stock gives you the oppor¬ tory of financial success?
dustries enjoying a rapid growth,
come
through the previous de¬
tunity to invest in one or more of
such as the chemical and propri¬
satisfactorily?
Is
the
several industries.
Suppose you pression
etary drug industries, or indus¬
believe that the building mate¬ management reliable and alert? Is
tries
whose
raw
materials are
the company still growing?
D»
rials industry has a great future
scarce, such as oil or non-ferrous
not be misled by the company's
ahead of it but have no idea
metals.
name.
For example, duPont is far
which
building materials com¬
First
of
all, look over the
economy
of
the
nation.
You
should pick the businesses which
are likely to do well in the future
you foresee
and which are not
too risky for you to be involved
Main Office, 37 Broad Street
Cash and Due from Banks
to this point
in?
i
OF
up
of
are
of NEW YORK
CONDENSED
talked
have
Furthermore, you may
place.
invest
to
like
The Public National Bank
its
carefully.
What Are the Best Industries
We
you would; they would sell the
stock and buy something else in
uncertainty and higher taxes tend
you
you
v i r t u a 1 ly
have been in
should actually riot ex¬ groups—say oils, tobaccos, auto¬
mobiles and chemicals—-and ob¬
pect too much in the way of war
tain
similar
diversification,
as
profits. Stocks may be profitable
as
the benefit of expert
in the preparatory period for war well
but once war is under way, fear, guardianship, in each of these.
and
had
day-to-day doubts.
And
bought stocks in 1932,
would have waited about a
before the wisdom of that
men
as
the past. You should pick indus¬
tries whose plants are scattered
many
had
be
may
"drafted"
the gains
Had you sold some of your stocks
in 1928, you would have waited
at
industries
1948
Thursday, July 8,
CHRONICLE
Thus, if a crash takes you by sur¬
prise, you have saved some of
the profits of the pleasant pros¬
perity..
•
' v ■ .
pn the other hand, suppose that
prices fall. While your high-grade
bonds may decline, your common
stocks will fall sharply. Later you
year
proportion
rigidly.
rather
select,
prices fall, the dividends on
stocks
you
so,
wise to hold to this
assuming that it is high-grade, is
thai;
common
rise.
prices
stock,
in
half
and
been
preferred
your
into bonds lest prices fall,
money
Now the advantage of
the convertible
divide
to
ings between bonds and common
stocks.
You may put half your
the common stockhold¬
ers;,
They get a big share of what
is left after bondholders and pre¬
large,
is
down
or
FINANCIAL
short-term
months
Another way of
preferred
on
from which
ones
to choose.
earnings are large enough.
rate
good
many
paid
be
will
dividends
holders'
next if
to
go
then sell
&
the danger
.
$9,625,000.00
Capital
12,375,000.00
Surplus.
22,000,000.00
Undivided Profits
Dividend
.
$30,567,038.28
8,567,038.28
.
.
275,000.00
Payable July 1,1948
Unearned Discount
•
•
•
862,576.71
•
Reserved for Interest,Taxes, Contingencies
I Less: Own in Portfolio
Other Liabilities
Deposits.
.
<
4,040,241.62
.
.
2,263,034.91
1,458,117.39
233,679.18
.
•
•
#
•
•
•
•
♦
•
•
502,072,736.17
$539,509,389.35
United States
are
pledged to
Government Securities carried at $8,933,338.89
secure
purposes as
to fall, keep
stocks and invest in
short-term high-grade bonds, pre¬
public and trust deposits, and for other
required or permitted by law*
If you see labor troubles ahead,
such as occurred in 1946, it is wise
to
In
of
V. CLEARING
HOUSE ASSOCIATION
25 Offices Located
CORPORATION
costs
view
of
industries
Throughout Greater New York
,,
which
relatively small.
the growing strength
some
investors confine themselves
such industries.
fall the tobacco,
drug, food, beverage, chemical,
utility and oil industries.
almost entirely to
In this category
you
anticipate another war
you
should consider
then
such wartime favorites
Y
in
are
organized labor in recent times,
soon,
FEDERAL RESERVE SYSTEM
FEDERAL DEPOSIT INSURANCE
in
invest
labor
.If
MEMBER: N.
from
sumably governments.
$3,721,152.30
Acceptances
If you expect prices
away
as
airplane
manufacturing, automobiles, steel,
non-ferrous
metals,
oils
and
bear
You
should, however,
in mind two probable char¬
chemicals.
acteristics of the next war. Parts
destro3'ed and
of America may be
panies
have
You may buy
the
best prospects.
stock in the build¬
ing materials group of an invest¬
ment trust.
This group may in¬
clude the stocks of 10 to 20 com¬
panies, say two lumber
companies,
interested
more
than
in
automobiles
in
gunpowder; Canada Dry
Ginger Ale is not just a soft drink
Bendix Aviation makes
of automobile^ parts, and no washing machines;
company;
a
wide - variety
and
Seaboard Air
Line is
a
rail-
plywood
road.
You cannot guess intelli¬
paint company, two or
gently as to your company's fu¬
three roofing companies, a hard¬
ture, including its ability to pay
ware company, a
lock company,
its debts, unless you know the an¬
two or three furnace companies,
swers to some of these questions.
and a few bathroom fixture com¬
three cement concerns, a
company, a
At this point you may be say¬
panies. Such an investment will
give you more diversification than ing that all these questions are
you could otherwise afford with very fine, but after all where cant
the answers to them be found.
your
modest savings or watch
You have only the vaguest idea
over with your limited time and
knowledge of such matters.
If where to look. You do not know
one
of the cement companies, as the names of the best companies
an
example, began to
experience
earnings, v. the
investment
trust experts
who are watching
for such misfortunes would prob¬
poor
ably spot the trouble long
before
in
some
chosen.
of the industries you have
You will find the answer
question and others in pon¬
derous
security manuals. These
manuals are not so difficult to use
to this
•
Volume
as
Number 4714
168
and
imagine,
may
you
you
should learn where they are to be
They
found and how to use them.
contain the most reliable informa¬
make
available,
readily
information
the
Since
or
is
that
tion
dollars, you
many
you
save
may
should seek it out. There are two
such
publish
that
houses
major
One is Moody's Invest¬
manuals.
Service; the other is Standard
and Poor's Corporation.
Moody's puts out a Railroad
Manual, a Utilities Manual, an In¬
dustrials Manual, a Governments
Manual, and a Bank and Finance
Manual.
Moody's manuals
are
published once a year but are
supplemented with semi-weekly
loose-leaf circulars that are alpha¬
betized and periodically indexed.
The
circulars
carry
quarterly
earnings statements and any news
ors
item
the company.
world
posted on what inter¬
ested financial experts think of it.
Both Moody's and Standard and
Poor's have rating systems for
bonds.
These ratings appear in
manuals, and also in monthly
pocket-sized bond booklets for
quick
reference.
Although the
ratings indicate the experienced
judgment of the manual com¬
panies' experts, they should be
taken only as a guide
and not
to
the
a
up to
loose-leaf
sections to replace the old ones.
these services
are
the
your
bond had
no
its yield
of
$50. But bonds usually do have a
maturity. A bond due in 30 years
paying $3 a year, and selling for
$69 has a 5% yield. (Incidentally,
although
bonds are quoted in
hundreds, they are best bought in
$1,000 units.) The matter of yield
is complicated, and the simplest
thing to do is to consult one of
6%, since $3 is 6%
be
would
expen¬
sold for $50,
and
year,
"Barron's"
ron's"
bond's
each
does this.
your
com¬
large public library,
it also may have a set.
If you wish to look over the
names of the companies in vari¬
ous industries, turn to the list of
companies by industries in the
blue-paged section in the middle
of
Moody's "Industrials."
Next
look up the company whose bonds
you are thinking of buying.
The
manual will tell you when the
company
was founded,
what it
makes, what subsidiaries it has,
or a
the
who
officers are,
when the company had its great¬
est growth, and how fast it is
growing.
The last can be deter¬
mined
by looking at the com¬
pany's
earnings statements for
back years.
The manuals contain
a
principal
of facts by which you can
mass
judge
the
whether
it
what
as
you
of the other facts
some
are
and see
good, better, or
supposed.
But
company
is
than
worse
to know about the bond
you want
considering?
(b)
Does the company ever
have difficulty in earning the in¬
terest it must regularly pay bond¬
are
you
holders?
tion.
That is
To
manual
the
•number
of
fixed
times
Notice
earned.
were
crucial ques¬
a
it, look up in the
figure showing the
answer
charges
especially
this in
bow well the company did
If you check
the last depression.
this
on
in
the
older manuals for
years 1929-33 and find the com¬
pany-did even moderately well, it
is a good omen.
a senior se¬
in case of bank¬
or
receivership, it will
have a prior claim on the com¬
pany assets. Since you are buying
bonds .for safety, you will pre¬
sumably want only a senior se¬
curity, or at least a bond that is
virtually that. You can determine
(c)
Is
curity?
ruptcy
your
If
bond
so,
those facts from the manuals.
In¬
cidentally, along with bonds you
often see "debentures" men¬
tioned. A bond is usually secured
may
by
mortgage
a
some
on
specific
whereas
property of the company,
a
debenture is merely the
unse¬
of
Thus
debt
cured
any
a
company.
given company's secured
bonds
tend
to
be
debentures.
better
'
u.
.
than
its
..
Is your bond listed on the
New York Stock Exchange's bond
market?
The investment manual
(d)
this
market; you will be able to fol¬
low it more readily.
The daily
quotations of the bond market re¬
flect the judgment of the financial
will
tell,
If it is
listed on
it
ure
various
of
recommend
should be able to answer
about the companies whose stocks
you
you
arid
for you
from
products
men
who
they
manage
the
yield
of
bond
a
—
open
tires
(a)
If
rate.
interest
the
>
Trust Company
the
com¬
financial
prospects
are
good, the yield will be low; if
they are poor, the yield will be
high. Since you are buying bonds
for safety, you will be suspicious
of a high yield.
You know that
top
quality
and
high
income
rarely mix. At present (1948) you
should hot expect more than 3%
on safe corporation bonds of dis¬
ESTABLISHED 1833
pany's
maturity, 2Vz%
tant
and
governments,
than
1%
notes
or
government
top-quality corpora¬
on
other
Cash in Vaults and Due from
factor af¬
economic
fecting the yield is the general in¬
terest rate.
As a rule, when the
price level rises, the interest rate
In order for a
30, 1910
::
-
;■
*.
$225,099,117.83
470,252,197.23
Banks
U. S. Government Securities
($24,870,856.65 pledged to sceure deposits
and for other purposes as
required by law.)
1,200,000.00
Federal Reserve Bank Stock
State, Municipal and
tion bonds about to mature.
The
ASSETS
more
one-year
on
REPORT OF CONDITION
At the Close of Business, June
long-term
on
slightly
10,435,913.44
Public Securities
859,940.00
78,963,530.60
Other Securities
Loans and Discounts
First
.*
Mortgages
Liability
will likewise rise.
Customers'
$1,000 bond paying $30 a year to
yield 4% to the investor, he must
be able to buy it below $1,000.
How much below depends, as al¬
49
on
1,519,525.19
658,100.62
7,753,904.47
Acceptances
Banking Houses
Accrued 1
ncome
2,001,5 71.08
Receivable
102,591.45
Other Assets
$798.866,391.91
indicated, on how near to
maturity the bond is. As we all
know, prices have been rising, and
interest rates are now tending to
ready
If prices continue tc
do likewise.
bonds will tend
rise,
short,
a
Stocks,
to be preferred in
are
In
bonds
on
not
bonds,
such
a
pe¬
Certainly, if you are going
some bonds, as of today,
riod.
to
yield
higher
inflation.
of
to fall.
days may be a danger sign
these
hold
they should be the short-term va¬
to five years.
Such
give you greater freedom of
riety—one
bonds
LIABILITIES
$15,000,000.00
25,000,000.00
Capital
Surplus
4,382,044.99
Undivided Profits
Reserve for
Taxes, Expenses, etc.
(f) Is the bond near its matur¬
ity date? The newspaper quota¬
tion will tell you this. "Pennsyl¬
vania Railroad 3V2 '85" will pay
$35 on .$1,000 each year and be
paid off in 1985. If the bond has a
distant
maturity and for some
reason its market value drops, you
will be in the unpleasant dilemma
having to sell at a loss or of
having your funds tied up in that
security until maturity time ap¬
economic
proaches.
When
ditions
uncertain, it is best to
buy
are
one-year
con¬
government bonds.
(g) Does your bond have a call
at which
company
may
buy it back
from you on short notice?
If so,
do not, as a rule, pay more than
the
call
price
for
the
bond.
price,
that
is,
a
price
1,989,715.55
Acceptances Outstanding
$ 1,328,230.75
Less: Held in Portfolio
378,807.42
Deposits
•
(Includes $11,733,815.89 U. S.
Moody's
or
Standard and Poor's
tell you at what
will
prices the bonds may
each
year.
.
be called
949,423.33
751,545,208.04
. -
Deposits)
___
$793,866,391.91
OF
BOARD
DIRECTORS
RALPH PETERS, JR.
President ' >
'
'
ROBERT A. DRYSDALE
Senior Partner
"
HERBERT J. STURSBERG
Treasurer, Livingston Worsted
Mills, Inc.
Drysdale & Company
JOHN H. PHIPPS
President, Capital City Broad-
DUNHAM B. SIIERER
Chairman
JOHN R. MeWILLIAM
Executive Vice President
casting Corp., Tallahassee, Fla.
EDMUND Q. TROWBRIDGE
C. WALTER NICHOLS
Retired
Chairman, Nichols Engineer-
ing & Research Corporation
~
' ' "
•
BRUNSON S.
GEORGE DOUBLEDAY
Chairman, Ingersoil-Rand
;
MeCUTCHEN
Consulting Engineer
E. MYRON BULL
President, A. II. Bull & Co.>
Inc.
SIDNEY A. KIRKMAN
Retired
Company
WILLIAM G. IIOLLOWAY
HENRY A. PATTEN
Chairman, W. R. Grace &
Vice President
the
manuals
$ 14,382,044.99
.
action.
of
make,
them.
X Mail Order House re¬
all
company's prospects and the gen¬
eral
has
com-
must keep your ears
for such significant facts as
Corn Exchange Bank
book
a
Street
.you
that the
decide to buy.
"Wall
"Fortune," X also,
big
the
the
And
the
are
fine write-ups of
panies,
about
reported
Your authors especially
in these.
some
Week.""
information
companies
Journal."
of a stock guide,
you should not rely on any¬
thing so inadequate in planning
your investments,
These are some of the questions
so
basic economic factors af¬
Two
size
"Business
or
kinds
yields.
of bond
fect
can
"Stock
follow develop¬
-
Chronicle,"
All
the
employees at 60, or the
Again, how big and how
stocks.
That would make you a old is the company?
What does Y Manufacturing concern has had
part owner of the company in it make? Is it still growing? How no labor troubles for 25 years.
which you hold stocks, although did it fare in recent depressions?
(b) Does your company also
several
bond
issues
out¬
you will have no actual share in
The big manuals can answer all have
the
management.
You
should these.
Another
question that standing, has it obtained a large
know many of the same things should interest you is whether loan at a bank, or put out several
stock?
The
about the company in which you the management is reliable and issues of preferred
hold stock as you should about alert.
You must rely on your holders of all these prior obliga¬
the
company
whose bonds you powers of observation and your tions will have to be taken care
have
bought.
Moody's manuals common sense to tell you that. of before you receive any divi¬
and those of Standard and Poor's Your broker, banker, or invest¬ dends. You are in the safest po¬
will provide you with the infor¬ ment counsellor may be able to sition if your company has no
sizable bank debt and no bonds or
mation. Another excellent service
help you, too. You can pick up
to consult is "Standard's Listed considerable information by preferred stocks.
You will prob¬
Stock Reports." These appear pe¬ reading the financial page of your ably participate early in any siz(Continued on page 26)
newspaper.
More
riodically,' one for each invest¬ metropolitan
Or your broker can fig¬
out
You
Poor's
Weekly,"
Financial
and
all
yield
of your
local broker or investment
counsellor, or of your local trust
company.
If there is a college or
pocket
be
can
and
"Commercial
section.
bond
has
company
Standard
Copimerce"
(New
National Busi¬
Financial
and
but
"aggressive" cap¬
and
A sketchier
of
"Barron's
such as
"Bar¬
weeklies,
financial
the
income,
"Journal
ments by means
Lately stocks have yielded a
better
figured out for you. Standard and
Poor's monthly bond guide also
munity
Guide.?
savings invested in
represent your "defensive"
capital whereas savings put in
the
of
from
monthly
Normally,
are
financial
ness
industry, and of the company
had
bonds
ital.
you will read them, are
journals like the "Wall
Street Journal,"
the Chicago
"Journal
of
Commerce,"
the
helpful, if
York),
within that industry.
stocks
broker
or
the
the
for
market
banker
mar¬
ket over recent years, the trend of
picture
example, if a $100
maturity, paid $3 a
For
terest.
these sets of manuals in the office
*
stabilize
Your
graphically the trend of the
and tends
the Common Stocks You Buy
its nominal rate of in¬
than
tant
sive, but it is not necessary that
you buy them.
You can probably
find one, and perhaps both, of
f university library in
certain
more
What You Should Know About
What is the yield on your
This is much more impor¬
(e)
date by sending out new
Both
accepted. There is often
time
lag before ratings are
bond?
information
its
keeps
bond
long as
without looking up the facts on prices continue to rise, they are
in some respects the wiser invest¬
the company yourself, for it is
market prices, not manual ratings, ment. In any event, we shall as¬
sume that you intend to buy some
that pay off in dollars.
eral loose-leaf manuals. This serv-
*
tell, r A
will
bond.
changed to reflect changes of con¬
Do
not
accept
them
,
% ice
the
ditions.
company
a
manual
sinking fund is a desirable fea¬
ture, for it makes repayment of
blindly
gets
a large
order or borrows from a
| bank, that fact is promptly re¬
ported.
v. Standard and Poor's lumps rail¬
roads, utilities, banks, and other
companies all together, alphabe¬
tizes them by industrial groups,
and publishes the material in sev¬
If
vestment
(121) 25
__
probably keeps them filed in his
office. They tell of the company's
earnings
and
prospects,
show
Your in¬
sinking fund provision?
you
ment.
(h) Does the bond issue have a
help
and
value
its
to
as
keep
about
interest
financial
of
THE COMMERCIAL & FINANCIAL CHRONICLE
\"
Company
The
Corn
JAMES A. FULTON
President, Home Life Insur
ance Company
Exchange Safe Deposit Company operates vaults in
throughout the City of New York.
56 of the 74 branches located
Member Federal
Deposit Insurance Corporation.
26
(122)
THE
How to Buy
COMMERCIAL & FINANCIAL CHRONICLE
Stocks and Bonds
(Continued from page 25)
able
profits
Your
the*
company makes,
will tell whether
manuals
your company
outstanding.
has other securities
So will your stock
(c)
Is
your
stock listed
on
the
New York Stock Exchange or the
New York Curb Exchange? These
the
factors
discussed
here will vary with
your purpose
in investing. If
you seek income,
idends
yield will
ested
guide booklet.
of
some
consistently paid? When did the
company last fail to pay any div¬
You
on
its stock?
should
in
especially inter¬
stock's yield.
A
stock selling for $30 a share and
paying
$1.50
safety,
be
your
in
dividends
Thursday, July 8,1948
Low-priced stocks are more-likely; would to bonds and convertible at the low
and sell at the high.";
to., be /;of poorer • qualityt^^^rf-)^ v'4% preferred stocks. Ask your broker The natural
reply is: "True, if we:
Of course the
importance to you or banker to explain the terms of only knew when." You can at least
of
mean
will count
'
a
steady
lot; if
you,
What You Should Know About:
Preferred Stocks
each
.
behavior
attempt
'
Securities ■;-7
,
You
will
-
consulted
industry,
experienced in
on
it
If your stock has a
in
bonds.
If
it
is
stocks will fall for the
same rea¬
supply the cur¬
(e) What has been the market son that bonds will fall—in
order
Most companies
behavior of yojur stock?
Is it to give the buyer a
yield to cor¬
report their earnings quarterly steady or volatile? If the
prices respond with the
higher interest
about two or three months after
vary a lot, your chances of both rates.
Any ordinary preferreds
the quarter is past. Such reports
profit and loss are greater.
Your will not participate in
higher
may: be published in the financial chances
of
loss
are
especially profits if good times continue. Be¬
section of your newspaper. What
great if you are buying stock at cause convertible
preferreds are
were
your
company's earnings a
price near its high. The blue more attractive at the time this is
over the past years?, Consult your
paper section in the middle of written,
they tend to have lower
big manuals for this information.
Moody's "Industrials" is a handy yields—about Z\'2% for safe is¬
They will usually show you how
place to look up the high and low sues
whereas high-class ordi¬
the company fared in a depres¬
prices for all industrial
stocks nary preferreds
currently yield
sion.
Have
the
earnings been each year for the
past 10 years.
around 4%.
consistently
good?
Does
your
Do not be tempted to buy lowIf you still decide to
buy some
company enjoy a feast or a fam¬
ine in earnings as the steel com¬ priced stocks because they appear preferred stocks, or some convert¬
ible preferreds, you should know
panies do, or a more steady diet cheaper. Do not think that 80
cial
section
will
rent information.
—
the
as
the tobacco companies do?
the
ing
earnings increasing
downward?
Are
or
Are
tend-
dividends
shares
of
low-priced
necessarily
shares
of
better
a
stock
than
high-priced
are
eight
stock.
to the'same questions
for
common
answers
have
we
stocks.
outlined
Be
the-
sure
preferred
stocks you buy are of top
for you are buying them
quality,
largely
for safety.
You should not invest
in the preferred stock of
any com¬
pany
which has
sizable bonded
a
indebtedness, for interest
this
on
know/
most
broker
also
may
advice.
good
he
means
is
He
give
'
ports."
at the
the standpoint of tim-:
They show the trend of the"
market
himself
trend
of
'
recent "years,the
over
the
industry,'/and of the I
within that industry. A '
study of these three lines can be'
company
meaningful.
very
of
all
studying investments, his clients'
financial needs,
more
rise.
They have little chartstop of each which are help-:
some
business
a
company's stock:
highest level:
the
from
ing.
student of invest¬
a
the
probable than a;
We told you about
"Standard's Listed Stock Re-'
ful
counsellor,
it
than
just a
makes
is
Your
-
you
calls
or
cline
the
more
broker—he is
ment;
them.
If he
investment
'
an
about
near
at
further
year
income and
high yield, that
capital growth you want, seek it
is a danger signal, for if specula¬
in common stocks. Preferred
stock
tors thought the dividends would
is not so. safe as bonds nor
so
so
listed.
You would do well to continue they would bid up the
profitable as common stocks. At
limit yourself largely, if not en¬ price of the stock. You might do
tirely/ to stocks listed on these well to ask yourself what the av¬ present, there seem to be good
reasons
for
buying high-grade
two exchanges. Your manuals or erage dividend was over the last
convertible preferreds, as has althe
stock
guide will tell you 10 years. You can find this infor¬
realy been indicated.
The ordi-1
where your stock is listed.
mation in the big manuals. Then
nary preferred
stocks, however,
(d) What is your company earn¬ see what yield this wo.uld give iri
seem doomed to decline if a
de¬
ing? Your stock guide booklet, terms of the present price of the
pression comes or if inflation con¬
"Barron's," or the "Commercial stock. If it is good, you will tend
tinues.
If interest rates
rise, these
and Financial Chronicle's'- finan¬ to buy; if not, you probably won't.
them, gen¬
erally speaking, you can sell it
more readily than if it were not
stock is listed
that
it has reached for
years, then the:
chances are excellent that a de-»
the
selection
of
securities, you
has a yield of 5% — $1.50 is
First of all, you: should have' should do so
are the first and second most im¬
at this-point; wIf you
5% of $30. You can easily calcu¬
some good reason for
buying any buy through a bank, consult the
portant markets for stocks in the late the current stock yields your¬
If it is
nation. No other exchanges com¬ self by dividing this year's esti¬ preferred stock at all.
person in the bank's trust depart¬
safety you want, you should seek ment who buys
pare in importance with them.
If mated dividend by current price.
securities; he will
your
or
is
.
someone
approximate
If, when - you are.'
buy, the market, or the-
about to
buy your securities
through your bank or through a
broker., < If you; have 'not already
v
to
knowledge.
IIow to Go About Buying
you seek
market
heavily with
conversion.
;
three
than
and how best to
He charges a fee
for this service, but if he is skilled
and experienced, his advice
may
If, for example,'
rising and higher:
before, beware; v It is?/
are
ever
obvious that you are not purchas- -'
»
-correlate them.
ing .at
attractive level.
an
side
reverse
ports
of
these
On the
Stock
Re-:
statistics; onr
dividends,
and
price:
the actual
are
be worth many times the cost. For
earnings,
example, he may be able to tell
range for ten years or more.
about the character of
you
more
the
management
of
a
company
than the manuals will reveal.
can
also interpret the
may
He
the
shown
company's
balance sheet for you.
This may
show, for example, that the com¬
pany's inventories may be dan¬
gerously high,
that it may
or
have to resort to further
(a bank loan
or
soon
to
secure
adequate working capital.
analysis is just as impor¬
tant to you as the
company's pe¬
riodic earnings statements. Con¬
sulting with an investment coun¬
Such
an
sellor
does
not
however,
mean,
the
on
chart
you are ready to placeorder for stocks or bonds, do?
your
not be disturbed because others do
member
you
vestigate the securities
market.
Someone
buy, because
that he knows
finally
the
feel
you
than you
more
buying investments, timing is
of the utmost importance.
Timing
refer
whole
to
the
market
selection.
your
buying
are
investment
else
you
is
are
-
Re-:
on
a ;;
selling"
buying,1
do.' either because
In
may
far*
so
When
with
you
lost
you are concerned;'
as
not agree
to
further,
investment go up and your care¬
fully calculated gain
that you must take all his advice
or that
you should neglect to in¬
decide
and
justify its present position in rela- >
tion to past performance.
When,
you have finally decided to buy,
hesitate no longer; buy promptly.;
If you wait, you may have the
painful experience of seeing the:
financing
bond issue)
a
We>
to look at these.
They.'
suggest an explanation for;
price behavior of the stock»
urge you
as
he needs the money *
because he thinks that invest-»
or
ment not
as good as some other.1
think it is the best selection-',
You
a
j\
to the
or
industry you have for your purpose.
Such differ- li/
company's in- ences of
opinion make the market.
ferred stock gets anything.
vestmeiits-you have-picked. There
If
everyone
thought the same'
There are other feaures of pre¬ is an old wheeze to the effect that
ferred stocks you should know .making money on investments is about any investment, there would
about.
For example, is the pre¬ easy, "all you have to do is buy be no market.
must
be
ferred
paid
before
stock
your
cumulative?
pre¬
that if earnings do not jus¬
tify
dividend
in
any
stock will pay you that back dividende later, before the common
stock receives any dividend.
That
is obviously a desirable feature.
Is
the
preferred
stock
partici¬
pating? In other words, if earn¬
ings are high, does the preferred
stockholder
share
in
additional
earnings along with the
stockholder?
This
common
also
is
de¬
a
sirable feature, but few preferred
stocks
are
prefered
participating.
stock
company?
If
Is
the
callable
at
so,
by the
what price?
Is it
selling above that price?
Is
sinking fund set
to accumulate money to pay
fci.
50*72
to
be
rated
higher than those
without sinking funds.
Finally, is
the preferred stock convertible?
Of late, many new preferred stock
issues have
conversion
been.
are
The
usually
terms
of
complex;
therefore have your broker
or
in¬
vestment counsellor explain them
to you. You should note especially
whether the stock is selling above
the conversion point—if
so, it is
virtually
stock; or far
below the conversion point—if
so,
a
common
conversion has little
serve
of
also whether
conversion
has
expired.
Convertible debentures
are even
partial hedge than is
the convertible preferred stock. If
prices fall, the convertible deben¬
as
set
you may
the
price and wait for
accept. In general,
a
seller to
some
former
procedure
is
recom¬
mended, especially if the invest¬
ment
is
that
one
is
actively
you have bought,
the broker or banker expects you
to pay promptly.
He will then
register the investment in your
traded.
Once
name, if it is a stock, and send
in your address so that dividends
earning statements
directly to you.
You should
:
ord
.
.
of
tions.
-
•
keep
your
record
you
.
!
-
a.
j
and
how to
will
use
it.
the serial number
se-
He prob¬
advertise¬
as an
be
a
glad
to show
Record in this
on
your
bond
or
a
ture has the protected status of a
debt,
L"-st
56
561'2
56'/a
The
after
that
stock
paid
Net
General
each
Change!
—2>A
.;
Motors
share
of
that
^
$3
in dividends the
The "xd" stands for;
year..
"ex-dividend," and
that if
means
you buy it now, the former owner,.
not you, will receive the
impend¬
ing
quarterly
dividend
payment.
quotations
are
plain enough; each refers to the
The
sale
next
of
four
at
least
100
shares.
■
-
change of minus 2x/4 means that.
today was at the rate
$2.25 less per share than the
last sale yesterday.
For an ex¬
planation of other little signs, ;
the
footnotes
the
at
end
of the newspaper's stock quota-;
I'l/Wi
tion list.
of
.
'7
-A
After
'''4:1
while
a
watching will
M<\/\
y*
i*"
the
fun,
off, as it'
will look only oc-:
should, and you
casionally to see
curities
still
week.
You
what
selling
are
should
wear
look
at
your
for.
least
should be
se¬
You *.
once
a
interested1
the
day
you
much you paid
through whom you
bought it. Plan to keep a record in
this book of the interest or divi¬
dends you receive.
Meanwhile,-
in the month-to-morith and year-
put
ups and downs.
stock
certificate,
bought
for
it
it.
how
and
your
stock certificate
or
or
bond
•
to-year behavior of your invest- ments, not their day-to-day flue-.
tuations.
If
the
investment
is
you can
You
some
what you expect,1
largely forget these daily
will
receive
quarterly
re¬
your
How to Watch Your Securities
companies.
You will be in-:
terested
at the financial page every day to
see
the latest market quotation
in how their earnings*
share this year compare with;
those of last year, in their expan-:
sion programs, if any, and in
any.
on your stocks and
bonds.
It is
fun, like watching the day-to-day
standings of yoqr favorite big
they
Once a;
year your company will send you'
At first you
will probably look
per
securities
may
senior
to
tunately,
market quotations that
ent management want you
them vote your'stock.
It
prominent
bentures
the market at
convertible
de¬
presents
The near future, however, may
see more
of these companies is-rt
suing this type of security. Apply*
the
same
on
tests
to
them
that
you
league team.
understand
how
to
read
the
ordinarily
in a newspaper.
Let us
interpret a typical common stock
quotation for you. (See;above.)
appear
Thefirst
figures indicate
/Highest and lowest sales prices for
100
shares
two
or
more
for
the
year.
r?
'vi/V;
7/7
proxy to fill out and return. >
This simply means that the pres-
this
device
their control
cases
<
yours
contemplate issuing.
a
few
7;
ports and other leaflets from all'
Since you will un¬
doubtedly do this, you might as
have
j?,
sound and pays
well
very
-
of
albeit an unsecured debt.
And if prices rise, it can be con¬
verted into common stock. Unfor¬
companies
.
Net
the last sale
consult
a
i
book.
ably hands it out
ment
'.
Ask your broker for
curties
be
careful recinvestment transac¬
'I''
.
will
Lew
High
56 'A
past
The
to all these questions can
be found in the big manuals.
Qnen
o.>
22
pay—that is, "at the market"—or
meaning. Ob^ in a safety deposit box
the privilege other safe
place, H-
answers
better
xd
means
sent
preferred stock?
Pre¬
with sinking funds tend
a
Gen. Motors
may
tell the broker to buy at
whatever price it is necessary to
and
ferreds
Slock
When you place your order, you
up
the
Sales in
Low
there perhaps a
off
the
1948
High
the
year,
to
cr
'fty
That
means
a
chosen
that, they.
even
cent of
to let;
is-bye
perpetuatevi,77;
though in many
they owh only
a
;
small
'f
-
peyr
;thb/total' stock.•'
analyze
the' situation,
yoti
have"
.Volume 168
COMMERCIAL
THE
Number 4714
&:
FINANCIAL V CHRONICLE
(123)
Conclusion
In
most respects, the interest
40% white-collar, 16% factory —
are inclined to think
they tell the of the national labor union official
do no bet¬
in corporation reporting is similar
throw the proxy away, and thus ter than to
quote the investment truth, and have few criticisms to
not vote against them; *(3) jour¬ advice; of a man who has been make except that they are hard to to that of the financial analyst,
the survey showed, although such
understand in places,
;;
ney to the stock holders' meeting,
eminently successful as an in¬
three
only
choices:
-let them vote it
as
(1) sign and
they wish; (2)
] In conclusion
stockholders.
"The
same
27
detailed
reports prepared for large stock¬
holders and professional analysts
would, with minor modification,
we can
suit union
research
directors and
"The brief version of the annual leaders
naturally desire informa¬ staff economists," the study con¬
vestor, who is famous the coun¬
cludes.
with tables expurgated, tion
anyway.
Your helplessness may try over for his common sense, report,
;
which will serve their special
Local labor officials and shop
/annoy you.
Forget it. You are and
who
has
probably
given apparently appeals to employees
viewpoint in collective bargaining, stewards, on the other
-only
hand, pro¬
discovering
that
a
small America more good advice in the the same way it does to stockhold¬
ers* This type of report promises such as breakdowns of the wage
■stockholder is not really much of last
fessed little interest in the annual
generation than any other
-Where you can have no
influence
of the company after all.
an owner
If you approve the
policies of the
^management, so far as you are
aware of them, do them the cour¬
tesy of signing the proxy and
•sending it in; if you disapprove,
•the best thing to do is sell the
stock.
.
When
dividend
your'
checks
in, cosh them promptly and
•come
-enter the date and amount in the
.'record
book
You
you.
broker' gave
need this record
your
will
"for income tax purposes.
/have
bond
due
date.
or
Your bank will cash it
for you.
-
/
refer
We
He
sums
investment
Bernard more comprehensible answers to bill by separate bargaining units, report, other than to emphasize
successful the few questions both groups data on depreciation and reserves, the need for broad information on
under
four have about
company finances and complete
cost breakdowns, and matters which bear on job se¬
to
up
policy
headings:
a
policies."
information
•
(2) Exercise patience in study¬
ing them.
Use imagination in dealing
(3)
with them.
•' ,J
..
,
(4) Be willing
conclusions
to
boldly
,;
.
,
v
act on your
and at once.
Guaranty Trust Company of New York
MAIN OFFICE
Fifth
Export-import Bank
Ave.
44th
at
—6
140
FIFTH AVE. OFFICE
V
Broadway
St.
MADISON
Madison
AVE. OFFICE
Ave.
at
60th
St.
OFFlfcE
ROCKEFELLER CENTER
Rockefeller Plaza at 50th St.
Brants Credit to
BRUSSELS
PARIS
LONDON
When You Should
curity.
dividends paid to
on
Get all the facts.
(1)
If you
debenture, you
'will have to clip the coupon on the
a
citizen.
Baruch.
Swedish Concerns
Sell
Your Investments
The
You have been told repeatedly
'that you should investigate before
invest.
should
companies
Jand of general economic changes
after you have invested. Read the
you
/watch for
Likewise,
'financial
you
of your
news
section
of
your
news¬
of
Board
Directors
the
of
RESOURCES
pation to the extent of $2,155,000
oy the Bank in a credit amounting
in total to
$3,330,000 to AktiebolaAerotransport
(ABA) ; and
Svensk Interkontinental Lufttra-
get>
perhaps a financial journal, fik Aktieboleg (SILA) to assist in
the quarterly and annual financing
the
purchase
from
paper,
;and
Condensed Statement of Condition, June 30, 1948
Export-Import Bank of Washing¬
ton on June 9 authorized partici¬
Cash
.Hand, in Federal Reserve Bank, and Due from
on
Banks and Bankers
U. S. Government
Consult
of
companies.
your
issues of "Standard's
new
^Listed Stock Reports."
the
Ask
'National City Bank of New York
to send you its monthly letter on
'economic conditions. It is excel¬
lent
it
and
/back
is
free.
not
Do
sit
Douglas Aircraft Co., Inc. of DC-6
transport aircraft.
This
credit
is
in
accordance
with the Bank's established
policy
of assisting American exporters to
finance
the
sale
of
American
equipment
abroad
particularly
that your job when such
equipment will direct¬
that you have in¬
ly assist the borrowing country to
posted on current
earn
dollars
and
other
"hard"
developments. You will not want currencies.
and
assume
Is done,
680,832,855.44
1,123,217,847.28
...........
Loans and Bills Purchased
Public Securities
870,076,683.69
$
.
Stock of Federal Reserve Bank
^to
make - many
changes,
but
changing conditions in the econ¬
omy
or. in
your
company
will
'sometimes indicate that you should
make some shifts in your investearly
that it was far easier to buy than
,il is to sell. If your stock or bond
has risen, you are so pleased that
.you will not think of selling. Yet
the time to sell is after your stock
will
You
discover
very
•
had
•old
substantial
a
rise.
An
saying goes that "No one ever
After
and
account
a
hope
cannot
you
when
it
has
.
Credits Granted
.
.
on
Obligations
Acceptances .
Accrued Interest and Accounts
its
peak
'and then have the wisdom to sell
it at just
that point. The person
;who does - so is just lucky, and
such luck does not often repeat
The
itself.
who
person
makes
.'some profit on his stocks is the one
•who sells too soon; in other words,
is
he
in¬
He sells after a substan¬
rise
tial
greedy for all the
not
crease.
is
and
happy
over
his
gains rather than unhappy over
7 any further rise.
*
On the other hand, if your se-
>
Receivable
7 7
Real Estate Bonds and
Mortgages
7,726,124.16
.
1,321,660.50
Bank Premises
.
120,908,322.68
4,858,969.78
/ 38,946.40
.'•••••
Other Real Estate
United States
the
in
Total Resources
V
$2,799,933,625.27
credit without re¬
the
Export-Import
on
LIABILITIES
Bank.
Capital
Surplus Fund
Undivided Profits
notes of
a
over
will mature semi-annually
period of four
The
rowers
the
bear interest at
Swedish
bor¬
will
years,
.
the rate of 3lk%-
and are to be unconditionally
guaranteed
by
the
Sveriges Riksbank.
$
.
.
100,000,000.00
200,000,000.00
63,848,493.22
..........
Capital Funds
Treasurers Checks
Outstanding
.
.
41,718,679.50
.
Deposits.
2,352,216,496.36
Investment
$
20,367,441.68
~$
Changes in
363,848,493.22
$2,310,497,816.86
Acceptances
Less: Own Acceptances Held for
Stockholder Reports
$
...
Deposits
Total
Advocates
.
.
Total
per annum,
know
to
reached
.
.
got poor taking a profit."
/all,
.
78,525,795.32
9,000,000.00
10,294,152.93
14,040,589.77
commercial bank will also partici¬
pate
course
-ments.
has
Douglas Aircraft Co., Inc. for its
own
.
Other Securities and
now
vested. * Keep
•
.
.
.
^statements
:
$
.
Obligations
14,180,999.08
6,186,442.60
.
(Continued from page 22)
viewed within this class had
va¬
a
riety of other sources of informa¬
tion, and many were in a position
to go directly to company officials
and get special questions answered
Dividend
Payable July 1, 1948
Foreign Branches
Accounts Payable, Reserve for
Expenses, Taxes, etc.
3,000,000.00
967,691.04
....
Items in Transit with
65,719,945.57
.
whenever the desired information
83,868,635.69
•
was
not available elsewhere.
"Financial
analysts
■
curit.y goes down, you must decide
whether to sell, accept some loss,
.
and
save
hold
or
the rest of your
the
because
on
money,
company
is good and you think the security
will recover. You will do best to
*
let
your
judgment
the
of
com¬
pany's and the industry's sound¬
ness guide you and try to shut out
any emotion emanating from the
stock market,
v
/be
continually buying and selling.
'While
occasional
purchases
and
'
sales may be desirable, you
avoid
shifts.
frequent
should
Presum-
;abljr /you are an investor, not a
If you shift often, it
•speculator.
'
becomes
•
•
may
costly
If
mount.
lose -dividend
•process,
and
your
shift,
you
you may
in
payments
feyery time
you,
losses
I'ie
shift,yov^
have to make two right decisions
•
instead
of
bought;
one
the
as
risk
when
of
thus
you
first
wrong,de¬
cision is thus multiplied.
choose
In shorty
carefully at the outset and
avoid
most
-for.shifting...
the
of
the
necessity
.
and
are
.
7.7
$2,799,933,625.27
"are
Securities carried at $00,235,817.59 in the above Statement are pledged to qualify for fiduciary powers, to secure public
moneys as
required by law, and for other
purposes.
less
likely to
face
They feel that many such
and
7
.
bank¬
declares,
report
sophisticated than the large
investors
take annual-report figures at
value.
reports
paint
to
try
progress and
light possible. For them, the an¬
report is a document which
and
—
as
reference
one
to
that
routine
a
other
must
be
matter, by
of in-r
sources
formation, such as tax returns and
SEC reports."
Annual
not
rate
channel
reports
high
of
as
at
an
present
.
do
important
communication
management; and workef
portion of the survey devoted
to
weighing employee - reaction
brought out.7 "Seventy-one per
•
of
the
laborers
queried, and 41% of the whitecollar
annual
never
employees,
of
report
reaches
state
their
them,"
that
respectively,
say
read, them.
the
study
they / see,
17%,
but
The relatively
few whO'dO'SeeaflcFteadthefti^
CORNELIUS F. KELLEY
WILLIAM L.
7/
DAVIS
KLEITZ
CHARLES S.
MUNSON
WILLIAM C.
GEORGE E.
President,
POTTER
STETSON
Chairman, Executive
Committee, Illinois Central Railroad Company
THOMAS J.
WATSON
President, BerwindWhite Coal Mining Company
7 President, The J. Gw
Engineering Corporation
President, International
Business Machines Corporation
DUNLAP
White
of Roosevelt & Son
EUGENE W.
of Davis Polk Wardwell
GANO "DUNN
Retired
ROOSEVELT
Sunderland 8s Kiendl
CHARLES E.
/.President
Chairman, Executive
Committee, Air Reduction Company, Inc.
/ The Columbia Gas System, Inc,
W.
Company
Chairman of the Board,
The M. W. Kellogg Company
CRANE, JR. !
1
President,
Crane & Co., Inc., Dalton, Mass.
CROCKER
Chairman of the Board,
MORRIS W. KELLOGG
American Telephone and Telegraph Company
M.
President, The Great
Anaconda Copper Mining
Chairman of the Board
COOPER
WINTHROP M.
JOHN
HARTFORD
Atlantic & Pacific Tea Company
Vice-Chairman of the Board,
STUART
A.
CONWAY
P.
company
the
JOHN
Chairman, Executive
Committee, Union Pacific Railroad Company
PALEN
Vice-President,
LEWIS GAWTRY
CHARSKE
CHARLES
Executive
The Pennsylvania Railroad Company
President, American
Cyanamid Company
J. LUTHER CLEVEL AN D
W.
WALTER S.FRANKLIN
Director, British-
President, Duke Power Company
BELL
factory
observes. "Another 10% and
never
and
WILLIAM B.
F. W.
•
American Tobacco Company, Limited,
v
tween
cent.,
KLEITZ
DIRECTORS
ALLEN
GEORGE G.
be¬
the
L.
President
Chairman of the Board
presents a particular point of view
toward company financial opera¬
checked
WILLIAM
LUTHER CLEVELAND
J.
company
prospects in the best
nual
tions
this suggests that .you may
All
ers,"
more
Total Liabilities
CHARLES E. WILSON
.
,
.
;
,
ROBERT W. WOODRUFF
c
President, General
Electric Company
Chairman, Executive
Committee, The Coca-Cola Company
Member Federal Deposit Insurance Corporation
28
THE
(124)
that
Redeemable
Curieitcy—Only | |
d European Recovery
Means
(Continued from first page)
supply
of
both conditions within these countries
capital goods from are ripe- for the agitator* and pro¬
America;
that
for
reasons
of moter of revolution .• and; will re¬
state
the
money
for the pur¬ main so until the causes. are re¬
chase of these goods should be moved.
That the causes are the
additional
an
consumers' and
supplied
promptly
from
the
Treasury of the United States, for
the most part free, in lesser part
en
long-time
account.
The
-
amount
deemed required
proximately $20 billion.
is
ap¬
is
It
position that these*
plans for promoting tranquility
within the recipient states are
predicated upon a demonstrably
false premise and will fail be¬
my
of it.
cause
This false premise is
the
assumption that under their
existing
monetary
and
fiscal
practices it is possible to create
general
prosperity and popular
contentment
states.
within
That
the
the
aided
true
require¬
ment for general prosperity and
consequent domestic tranquility
within
these
from
the
not
money
our
That
is
states
Treasury to be used in
purchasing goods from Americans..
true
and
indispensable
requirement is an honest medium
of exchange to be provided for
the
people of these
their
such
medium
a
provided there
never
or
countries by
That until
government.
own
will
be
of
exchange
never
prosperity
contentment.
mass
be and
can
general
is
That
the
law
popular
demonstrations
dis¬
of
content is the natural consequence
of the irredeemable paper money
be
That
the
monetary
own
these
govern¬
restrictions
removed
the
and
justices
corrected
by
goods for sale.
more
honest
medium
which
the
of
in¬
offering
Only
for
tion
shows
lars
in
that which deludes them with pa¬
money."
per
•
;
,
"
.
to
the
Lenin and Webster theses
that within
modern
society with
great diversity of production
its
a
and consequent wide and continu¬
distributions
ous
the
of
the
essential
as
construction
possess
And at
this point permit me to point out
that the people of a rich and pro¬
as
" of
That without such
tools in
buildings.
medium it is
a
impossible either to create or
maintain general prosperity, mass
contentment,
quility.
political
Or
tran¬
II
honest
become the
medium of exchange as
distinguished from irredeemable
pieces of paper.
I will digress a
poor
infla¬
readily as the people of a
one.
As witness of this, rich
moment to tell you. By an honest
medium of exchange I mean a me¬
dium which within itself possesses
and
productive
ductive
country
victims
of
tion
a
can
paper
money
as
France
and
her
neighbor Italy both suffer
poorer
from the
disease.
same
And it is
nancially
stable ' and politically
tranquil and require aid from no
beauty.
been
one.
Whether
Time
and
experience
have
the truth of the aphorism
of Leinin, founder and great apos¬
proven
of
overthrowing
free
capitalistic economy there is
none
stealthy in its approach and
certain of
success
as
so
the emission
irredeemable 'paper * moneys.
And
of; that
of
Daniel
Webster
in
nuggets
or
because
it is
coins
coins
desired.
minted
other
or
metal
or
or
from
possess
Come
war
repudiation,
gold or any
the value of
their metallic content.
tent
bars
dust, it possesses value
revolution
or
Bolshevism, that of all the
a
so
and
To the
tificates convertible into
coin
are
not to be confused with irredeem¬
able slips of paper
as
all who held them
the
difference
possessing
MAIN OFFICE:
NEW YORK-OFFICE:
Montague Street
26 Broad Street
Brooklyn 2, N. Y.
New York 4, N. Y.
Condensed Statement of Condition, June 30,
1948
RESOURCES
Hand and Due from Federal
Reserve Bank and Other Banks
$ 62,590,067.66
U. S. Government Securities——
State and Municipal Bonds
128,027,889.82
5,516,185.09
—
2,296,326.22
--
Loans and Bills Purchased.
28,754,785.37
Bonds and Mortgages
106,826.17
2,500,000.00
—
Other Real Estate
1,000.00
_
Resources
:
625,076.13
:
$230,418,156.46
it
that
LIABILITIES
$
fashionable prophecies.
There is
now a free gold market in Paris.
It is regulated by the Government
of France.
In this market there
is
trading in gold and the transac¬
tions
Here
reported.
are
of the most
some
recent.
twenty-dollar gold pieces
selling in this open
market at from twenty to twentyhave
been
two thousand French francs. Upon
same
market
and
seven
Now bear this in mind.
twenty-dollar
896,491.17
Dividend payable July 1, 1948
205,000.00
Deposits
212,737,220.59
Reserves for Taxes, Expenses, etc
943,913.36
$230,418,156.46
at
$18,180,726.27
and
for
other
One of the Oldest Trust
Member New,,York
are
pledged
purposes,
as
to
secure
required
law.
Companies in the United States
^
were
with
francs.
The U. S.
pieces
gold
those
are
Americans
forced to surrender to their
government
in
exchange for the
twenty-dollar bills.
The twentydollar bills
they
day
were
011
brings
Clearing House Association.
Federal' Reserve System and "Federal
Deposit Insufahce'Corporatiba
,
identical
French
a
are
the
identical bills
forced to accept. So to¬
free
market the U,
S.
French francs, while U. S. paper
of
the
identical
denomination
public
by
thousand
twenty-dollar gold piece brings
twenty to twenty-two thousand
United States Government and State and
Municipal bonds
carried
are
United
States
5,700,000.00
Reserve for Contingencies
;
the baseless nature of these
prove
1,735,531.34
Undivided Profits
v
the
people
became
aware of the blessings of managed
paper
money
they
would
no
longer desire gold coins. Demand
for gold for minting would then
disappear and as a consequence
the nation's gold stock
at Fort
Knox would possess value only as
demanded by the fine arts.
Very
little time has been required to
once
8,200,000.00
Surplus
;
was
during the
same days United States twentydollar bills have been selling at
Capital
,
paper.
value
Not
the fashion
in high political as well as in some
academic circles to belittle gold as
a
monetary metal.
It was said
the
deposits
between
intrinsic
irredeemable
many years ago
Other
assume
.
,
*
'-
A
calcula¬
tion shows that persons wishing
to dispose of U. S. twenty-dollar
gold pieces upon this open market
are
seven.
now
able
quick
at "times
to
get
three twenty-dollar bills for each
of them, ana seldom * substantially'
.
.
.
when
Russians
refused
to
surrender
them
American
Government
could
to the
not
who;
she
.
.
given tourists the impression
be
not
and
needs
financial
help.
«
.
.
compelled to do so; At present France offers a
by American law.
It is not im¬ strange picture.
Her industrial
possible, of course, that some of: production is equal to 1938, but
them
come
from
forewarned she lacks essential manufactured
,
American
citizens
residents
or
commodities.
Her
agricultural
getting them output equals 1938 yet she goes
out of the conutry.
Had these begging for wheat and meat. The
persons held American gold cer¬ cause is hoarding for black mar¬
tificates or American gold bonds ket prices.
Her cities go short of
they- would have been helpless food and the countryside eats as
against the Act of Repudiation of never before."
' '
in
succeeded
,
American
the
Government.
But
In
Paris, during the
month,
same
of the gold coin there could be no
last October, the American
repudiation. This fact and the
prices quoted
give
answer
to
those
fashionable
prophecies
ed
.
is that Natural Laws
can
My major premise, to which I
return, is this: that prosperity
and
political
tranquility
will
never
return to Western Europe
until
honesty
returns
to
its
now
In proof of this premise
might with safety rely upon the
money.
I
It is
record.
aster.
of ruin and dis¬
one
In it there
exceptions.
to be found
are
Not
in the
once
paper
Not
money.
festations
daily filled to capacity
diners, while the
Riviera,
the
expensive
gambling and resort center, had
just closed its most profitable
year. The reports are but two of
many
describing similar condi¬
different
within the inflation
tries
and
those
inflations, I
ridden
tions.
propose
scriptions.
to
describe
conditions
in
all
the
of
report
called
British
Church's
a
"The
Public
on
sued
year 1947, the
in public gam¬
bling in Great Britain during that
year
$3,865,000,000.
It
was
racing, pari-mutuel
ma¬
was
divided
follows:
as
Horse
chines:
$84,500,000.
Horse racing, bookmakers:
Greyhound
racing:
fiscal
character of
practices, they
best
the
the
are
countries
of the
WOrst.
'
•
their
neither
Football
pools: $280,000,000.
Assuming the population to be
40,000,000, this is approximately
$100 per person and $400 per fam¬
ily of four. These represent in¬
creases
the
over
They
in
show
the
of
1948.
spectacular rise
the
wholesale
This
France.
with
hand
of
May,
price
rise
index of
hand in
goes
continuous emission
a
irredeemable
francs
paper
in
satisfaction
of budgetary deficits.
surprise no one when
should
It
he is made
the
since
Government
these
of the fact that
aware
liberation
paper
has
the
issued
francs
French
more
than
of
did the
Vichy Government during the Oc¬
cupation.
Taking
the
pre-war
of
fixed date at 100,
wholesale
prices
in
France
in
October,
1944,
stood
at
265;
in
December,
'45
at
489;
in
December, '46 at 842; in Decem¬
ber '47 at 1217;
in January '48
at
1456.
These
prices take no
account of the enormous public
prices
a
subsidies
which
held
down
the
prices of certain necessities. Nor
do they take account of the black
market
prices although
during
time
that
France
the
were
black
markets
doing at least
third of all the
business.
of
one-
Nor do
they take account of the scarcity
which
was
experienced in the
cities
than
of
and
France
not
made
purchase
it
desired
more
often
impossible
things
at
to
the
established prices.
I
by
now
lished
in
tober
24,
had
turn
San
a
to
a
letter
Franciscan
the
"Argonaut"
1947.
This
just ..returned
written
and
pub¬
a
the
year
causes
increase
in
of
ab¬
experi¬
are
encing.
Having
trip
called attention to
now
present day conditions, permit me
to read
a
description of conditions
in
France during the great Assignat Inflation cf a hundred and
fifty years ago. I read from "The
Lectures
of
President
Andrew
and
D.
White,"
Professor
His¬
of
tory of
Cornell University.
The
subject is "Fiat Money Inflation
in France." These lectures were
delivered in
ing the
the
1878.
After describ¬
rise
great
in
prices
and
confusion, discontent and dis¬
order
among
the
French
people,
Dr. White said:
"But
these
small
were
far
deep-seated signs of dis¬
which now showed them¬
selves
throughout
One of these
of
evils, though great,
compared with those
more
ease
thrift
from
the
country.
the obliteration
was
the
minds
the
of
French
people. The French arO
naturally thrifty but with such
of
masses
money
and
with
such
uncertainty as to its future value
ordinary motives for saving
the
and
care
luxury
diminished
spread
country.
A still
and
loose
a
throughout
worse
the
outgrowth
the speculation and gambling.
At the great metropolitan centers
was
grew a luxurious speculating, and
gambling body which, like a ma¬
lignant tumor, absorbed into itself
the
strength of the nation. In the
leading French cities now arose a
luxury and license which was a
greater evil
even
than the
plun¬
dering which ministered to it."
Let
of Oc¬
gentleman
from
previous
of
senteeism the British
r"-~>h:
Review"
one
the
nor
The figures I am about to quote
are
taken
from
the
"Harvard
Business
$1,800,000,*
000.
tremendous
to
$1,-
700,000,000.
reflect
respect
a
covering the
the
In
is
total money spent
and
examples.
This
investigate the alarming increase
in gambling in Great Britain. Ac¬
cording to its report recently is¬
Great
as
Committee
Gambling."
countries, I will take France and
Britain
'.nV:
Committee
committee of the Church set up to
coun¬
Since it is impossible,
' '
.
Now permit me to quote from a
during
certain past and contemporary de¬
French
French
than
previous
to read you
were
with
have its mani¬
once
been
Marquis Child, report¬
expensive French restau¬
that
rants
troubled
history of the world has
succeeded as substitute for
corre¬
spondent,
except
the early part of the last Ad¬
ministration know.
money
Buildings
gold pieces.
they do not
Americans, since it
must
convertible into
those to be observed today.
That
another slip of
you may observe. the similarity
paper.
Nevertheless such con¬
between the conditions of today
vertible certificates are subject to
and
although
they
appear
Never,
even
in
the
hey-dey of the late twenties have
I
seen
such
spending, luxury,
gambling, etc., as in France and
broke.
.
no
they are proof
repudiation.
Paper cer¬
against
trate
COMPANY
Bank
twenty-dollar
One
ex¬
of this value
"These Europeans are not suf¬
fering
Belgium. It's not like the old days
the Americans, British and
were the great
spenders
come
from
in
Europe. Now it's the local
would constitute a crime for ari
people.
The exhibition of in¬
American to own them. Supposed¬ decent riches I saw in
French
ly they come from foreigners who Summer Resorts have certainly
these
It is useful
in the fine
throughout all time has
admired
by
mankind.
arts
Recent events graphically illus¬
Securities
from
for
thirty-three cents each. You may
be curious as to the sellers of
answer
BROOKLYN TRUST
Other
selling in .the
thirty to
now
are
minted
own
a
in
on
our
dol¬
paper
noteworthy that both France and specified quantity of a thing of in¬
As example, gold neither be shouted down by mobs,
Italy are richer than their neigh¬ trinsic value.
argued out of existence by doc¬
bors:
Luxembourg!,. Switzerland, coin of a given standard of weight
and Portugal, yet these poor ad¬ and fineness is a medium of ex¬ trinaires, nor repealed by govern¬
ments.
joining
countries
adhering
to change possessing intrinsic value.
honest monetary practices are fi¬ Gold is a ductile metal of natural
Ill
repudiation
Cash
S.
alike
in
political and
thing of in¬ popular
trinsic value or at the option of academic circles within the mem¬
the owner is convertible into a ory Of all who are here.
The
given quantity of
a
nothing
177
U.
of
market
who
At this point you may wish to
know precisely what I mean by an
*A further calcula^:
that
terms
gold coin
open
And for the purposes of this
discussion I offer it as a corollary
Thursday, July 8, 1948
less than that.
of mankind
effective than
more
an
exchange in
confi¬
people
dence will remove them.
Inflation from which they aresttf?* of
fering and is caused by it.'
abiding elements of
That
not
upon
the de¬
upon
the population by
practices of their
methods
in
limitations
inflicted
cent and
states
itself
contrivances
masses
fidence is
tle of
manifests
the
injustices
general unhappiness within these
which
all
has been
production and trade and the cruel
restrictions and
will
.
,
"Of
cheating the
none
CHRONICLE
things
produced, a medium of exchange
in which the people possess con¬
ments.
I
&'FINANCIAL
COMMERCIAL
of
a
me
also read from the work
distinguished French Scholar,
Pierre
work
Gaxotte.
"The
It
French
is
from
his
Revolution"
through Europe, a continent with
published in the United States in
wKichTlie
1932.
was
familiar.
He
says:
Describing the conditions in
Volume
tion of the 1790's he says:
dustrious
of res¬
taurants done such good business.
While in the outskirts of the city
bler and law violator.
"Never had the keepers
but emaciated, pale, and rag¬
none
ged figures were to be seen, the
coffee houses, and eating shops in
the Palais Royal were filled with
bursts of laughter, the glitter of
diamonds, faces shining with good
cheer, and women with next to
nothing on. It was a case of over¬
fed
bellies
empty
the
on
side
one
and
the other; and
preparing to hurl
upon the former."
bellies
on
the latter were
themselves
I have read these accounts de¬
scribing the reaction of the people
of today and that of the people of
a. century and a half ago under
like conditions for the simple
purpose
demonstrating
of
the
intensified
,
in¬
flations.
They manifest a moral
and intellectual disintegration of
government spreading throughout
fhe entire population. It is a dis¬
integration to be observed among
the educated and highly placed as
well as among the uninformed
is
It
masses.
Which feeds upon itself and grows
steadily worse and never better
the most drastic and far-
until
teaching reforms are effected. It
manifests the refusal of the people
their
to obey the mandates of
the
through
for
own
article
an
deem
it
right to pay
as they
Wage
control
believably
receive
his
for
service
hold
not
their
Both
be
and
another
ment
which they
the discredited
up.
law of human nature which causes
from
willing to pay
employer the right
an
But it is impor¬
tant to bear in mind that
ing the state owned power system
of France at the expense of the
United
States
Treasury
adds
each of
these
place in
war
destruction in Germany dur¬
the serious impli¬
understood country
came
down in ruins, pav¬
by informed persons throughout
Europe and the world not exclud¬
ing the watchful rulers of Soviet
ing the way for the Nazi seizure
Russia.
suggested
that
while the Marshall Plan does not
of power.
instrumentalities
do
not
IV
sound
out, neither evidence a
want of material possessions with¬
in the country nor result from it.
They are a direct reaction to de¬
struction of the established me¬
establishment
pointed
of
establishment
the
require
which these infla¬
tion ridden states suffer, as I have
exchange,
of
mediums
make such
possible.
This is
nevertheless the grants
not
suggestion
The
true.
failure
demonstrates
of the
now
monetary
in cir¬
reform
lator, gambler and black market¬
If restoration of contentment'
eer.'
is required to combat communism
(
within Western Europe the things;
must be done which will restore
contentment by rebuilding a pros--
society.
perous
Because
indis¬
general and will require pensable, the first of these is the
additional gold which can be sup¬ restoration of honest money.;-k;
plied only by the United States
RSMca
either by gift or loan.
It has been
estimated by a competent bank
authority and economist that $1,000,000,000
should prove suffi¬
cient. But more than gold will be
required.
A return to honesty,
Paris Scott Russell, Jr., Glore,
intelligence and sobriety in gov?'
ernment is as essential as gold. Forgan & Co., was elected Pres¬
P. S. Russell, Jr.,
NY
Without
this,,waste and extrava¬
will continue.
Correct fi¬
nancial practices will be rejected
because in conflict with immedi¬
gance
Municipal Forum
the
ident ' of
Municipal
Forum of New-
to
itself
compre¬
tinue
to
duced,
see
real
his
wage
re¬
in
his
increase
despite
chosen
Vice-
President;
T.
George
Paris S. Russell, Jr.
The owner of obli¬ Ragsdale,
gations payable in money will be Lehman Brothers, Secretary; and
forced to witness the daily de¬ Rudolph J. Harper was re-elected
Treasurer.
Frank Lucke, Laid-
money wage.
of
struction
his
savings.
Gam¬
bling will continue to be the
interest of segments
lation.
chief
of the popu¬
The decent and industri-
law
&
were
on
Co.,
D. McTrust Company,
and Edward
Northern
Grew,
elected to three-year terms
the board of governors.
-
now
to supply them. This con¬
estates of the
propose
of the great
sisted
all
and
nobles
the
appraised
were
lands
the
of
These estates and lands
Church.
and
made
pur¬
chasable at appraised values. Any
purchaser was entitled-to pay for
them
newly issued as-
the
with
Serving Savers
Kings County Trust Company
into every
lives. While
preserving the form it has altered
ty and unhappiness
phase of the people's
the substance of every
experience scarcity and
must be
This destruction
confusion, uncertain¬
has brought
to
privation in the very sight"
Assignat Inflation of France. The
French Government had just be¬
come
possessed ofproperty of
of exchange and measure¬
ment of value.
Western
of
paper
This
culation.
become
greater value than that we
V
been
has
It
,
The ills from
dium
countries
content¬
within the
tranquility
Europe that honest money replace
Except part of the purchasable wealth of
at a
steadily accelerating pace ing the first World War.
the country.
They add nothing to
among the people of
our own for the expenditures incident to
the worth or purchasing ability
Country.
And it carries an omi¬ the war and some material repa¬
rations in the way of railway roll¬ of individual Frenchmen. The re¬
nous note when one observes that
ing stock, shipping, and war ma¬ quirement for general prosperity
our own paper dollar measured
and contentment in France is not
in terms of gold coins of our own terials, the Peace of Versailles
new
state owned electrical sys¬
minting is now selling in a free left the wealth of Germany unNotwithstanding this tems- or factories or-tobacco or
market at 30 to 33 cents, with no consumed.
quickly disappearing consumers
appreciable reaction to the signif-, fact, because of a paper money
deliberately
practiced goods, but a medium of exchange
icance of this grave fact upon the, inflation
after the establishment of peace, of intrinsic and hence true and
part of our own government But
the economic and political struc¬ stable value. Clear demonstration
no greater mistake could be made
ture
of this rich
and cultured of this is to be found in the great
cations of this are not
and
disturbed
is
think it is worth.
observe this attitude building up
than to suppose
of
reestablishment
for
expropriations
can
take
a wealthy country as well
nothing to the value of the over
as in a poor one.
And the disas¬ issued inconvertible paper franc.
distrust, or to save it, and their
trous
effect upon the country's Neither does the rebuilding of the
determination promptly to
get
w*hat they can out of it either in economy will be precisely the state owned Renault automobile
same.
factory with funds provided from
things of material value or in
As example there was no major the United States Treasury. These
pleasure or excitement. One can
manifests their refusal to honor a
of exchange
accumu¬
it to
indispensable requirement
an
people of the cities will con¬
tinue
York
at
the
people to seek to dispose of a
Budgets annual meet¬
thing of lesser value for a thing ate political interests.
remain
unbalanced.
The ing held June
to pay that which he believes the of greater.
It is because people will
14.
Mr. Rus¬
•service to be worth.
Credit con¬ cannot be forced, either by law. printing. of money will be re¬
sell
succeeds
trol
takes
from
the
owner
of or terror,
to accept as true a sumed. Restrictions of every kind
will be enacted in hope of forc¬ Leander L.
money the right to loan it as he premise they know to be untrue;;
of the govern¬ Shelley of the
chooses and from seller and buy¬
It
is
not
more
state
owned ing acceptance
ment's
printings at decreed Port of New
er the right to arrange their own
property that is required to tranYork Author¬
terms.
Exchange
controls take quilize the people of Western Eu¬ values. Capital will continue to
ity. Robert T.
frcjm all owners of money the rope. but restoration to the peo¬ flee the country. The wage earn¬ Veit, Shields
right to dispose of it either at ple of an intrinsically valuable
er
and salaried person will con¬ &
Co.,
was
home or abroad for what they medium of exchange.
Rebuild¬
which
government which they know to
be based upon false pretense.
It
medium
the
and
reason
ous
29
gaudy ostentation of the law vio¬
lated lessons of history prove
This is because of that immutable
that
was
ruined because of them.
state
value
France
and
money,
paper
Even this un¬
totalitarian
rich
could
much
as
worth.
from the worker the right
takes
to
valueless in trade.
all others the
from
money
disintegration
a
signats at face value. Yet the assignats of themselves possessing
no
value-> went
the way of all
ensuing
government to still the
complaints of its primary victims
by expropriations from
others. wealth of these countries adds
Thus
having robbed Tom, the nothing of value to their irre¬
wage earner or holder of obliga¬ deemable paper currencies. Pub¬
tions payable in money, and be¬ licly held wealth is not available
ing alarmed by his outcries, the to the holder of inconvertible
government makes hurried effort paper money. The government of
to. rob Dick and Harry in Tom's Russia owns all the wealth within
interest.
These secondary expro¬ Russia and commands at its own
priations take the form of price place and price the services and
and wage and exchange controls trade of every Russian.
In all the
and rationing.
Each seeks to take history of nations no government
has ever owned such incalculable
from someone a right to which
under the customs and beliefs of wealth as is now owned by this
the people he is rightly entitled, government.
Yet its irredeem¬
Thus price control takes from the able paper rubles have recently
Owner of property the right to gone to the ashcan, having be¬
a
sell it to the highest bidder and come
mockery because near
a natural law. In them
portrayed the economic and
moral effect of paper
to serve as money. What
is required is »a medium possess¬
ing intrinsic value or convertible
upon
demand into such a me¬
dium. Increasing the publicly held
Its ills are
(125)
CHRONICLE
FINANCIAL
of paper
gam¬
efforts of
working of
are
the
rewards
and
&
hend the true cause of the failure
Assignat Infla¬ punishes the law-abiding and in¬
during the
Paris
COMMERCIAL
THE
Number 4714
168
OUR SERVICES
INCLUDE
STREET
342, 344 and 346 FULTON
BROOKLYN 1, N. Y.
long-time
the sav¬
Since 1859
ACCOUNTS
•
SAVINGS
•
MORTGAGE
LOANS
•
CHRISTMAS
CLUB
•
G.
•
SAFE
•
MODERNIZATION LOANS
contract. It has destroyed
ings of masses of honest and de¬
serving people.
It has reduced
the real wage or salary of every
-employed person.
It has inflict¬
ed cruel and unmerited punish¬
ment upon the innocent and help¬
less.
Every law-abiding individ¬
ual within the countries is its
victim.
As the price level rises
with each succeeding act of infla¬
tion the people of these countries
experience additional reduction of
savings, wages and salaries.
To
suppose that contentment and po¬
litical tranquility are to be found
; among a people rendered contin¬
ually'unhappy through a great
imposture practiced against them
-by their own government is to
abandon
reason.
of
appreciation
prompted
; words
■
Lenin
It
was
a
keen
this
which
to utter the
Capital
.
.
Surplus '
.
.
.
.
business
June 30, 1948
on
on
Cash
in
Hand
Banks
1,267,098.85
15,535,562.47
23,636,290.12
City
v.:. ■
Bonds
and
Mortgages
Loans
on
Collateral,
Demand
and
Bills
472,499.45
Time.
1,708.059.11
Purchased
Real
Estate
Other Assets
615,000.00
-——~
■
341,042.37
57,501.544.93
ue
Depositors
hecks
47,914,055.17
for
money
LATEST DIVIDEND
•
Checks
standing
PAID FROM DAY OF
SAVINGS BANK MONEY ORDERS
Taxes,
778.998.70y
Out¬
75,386.66
57.501,544.93
FULTON STREET AND DE KALB
Bensonhurst: 86th Street and
Flatbush: Avenue J and
Our
main
office
is
our
only office and makes avail¬
depositors every facility and accommodationknown to modern banking. Make it your banking home.
able to its
Member Federal Deposit
Insurance Corporation
AVENUE
19th Avenue
Coney Island Avenue
BROOKLYN, NEW YORK
MEMBER FEDERAL DEPOSIT INSURANCE
<
DEPOSIT
and
Contingencies
Official
SAVINGS BANK LIFE INSURANCE
2,526.73
Discount—
Reserves
'
inflation is a
practice under which a govern¬
ment, to advance its own imme! diate political interest, unjustly
despoils one class of its citizens
5 and unfairly enriches others.
It
Paper
•
27,973.36
Unearned
Expenses
1%
702,604.25
a
Certified
to which your attention has
>' been called.
DEPOSIT BOXES
7,500,000.00
Profits
Undivided
6,414.293.55
824,798.66
700,470.48
Stocks
'.
Surplus
5,985,829.87"
Bonds
Other Bonds
500,000.00
Capital
—
and
State
LOANS
%
Bonds..-;
S. Govt.
I. HOME
LIABILITIES
RESOURCES
Cash
Y.
$702,000.00
.
Statement at the close of
•>
N.
$7,500,000.00
.
Undivided Profits
U.
$500,000.00
.
31
CORPORATION
30
(126)
COMMERCIAL &
THE
FINANCIAL
CHRONICLE
(Continued from page 2)
have, in large degree, rested upon
the Keynesian theory that saving
is fundamentally anti-social in its
effects and that spending is vir¬
pie's savings domestically, and in¬ general effort is to obtain the con¬
ternationally they seem deter*? ditions which competition pro'mined to give away our wealth, duces. This is because the great¬
tuous.
nate the
As
a
consequence,
our
spending*has been protligate and
taxes
-our
debt have
and
become
.
until
drained dry and lie
The Keynesians domi¬
are
we
prostrate.
est social good is obtained under
competition and under regulations
teaching of Economics in of other methods of procedure
colleges, and it will, appar¬ designed to bring them into line
our
ently,
require
the
with
The tax rates methods of science can free U£
sharply progres¬ from the pestilential visitation.
The distinguished French eco¬
sive, and the tax burden has be¬
come more
characteristic of that nomic scientist and government
tend
extremely
before
years
high.
have been made
under
than
totalitarian
a
that
of
a
government
basic purposes of these taxes
has been to level down the large
incomes of
both
official, Jacques Rueff, writing
One of' "The
repubhc.
the
individuals
Fallacies
General
Lord
of
Theory"
in
on
Keynes!
Quar¬
"The
terly^ Journal of Economics" (May,
and
1947), ends his discussion with
corporations.
The tax programs this
sentence:
"Whom
Jupiter
the enforced distribution of wishes to destroy, he first makes
corporate earnings have rested Aiad," That is an observation that
upon the
notion that corporate the Keynesians, and, of course
surpluses and reserves represent a the people of this cpuntry would
for
withholding of purchasing
from the needy.
power
These various tax
do well to ponder with care.
The departures in this country
programs have had destructive ef¬
fects on savings and the accumu¬
A
what competitive conditions
to
objective
an
are
fact
cies
payers.
When
results
government undertakes
substitute its judgment as tc
to
a
is
proper
for
world
the
in
the
results
economic
that
flow
one.
upon
a
naturally
had reached economic matur¬
ity,
no
in
it
savers,
longer
was
find
investment
claimed, could
adequate
outlets
therefore, it
was now
necessary for the gov¬
ernment to step in,, take surplus
savings; and invest them in ac¬
tivities to be provided by the gov¬
ernment.
The
assumption
that
government
and,
paternalism
was
su¬
perior to private enterprise was a
companion notion of that of eco¬
nomic maturity,
The profligate
t ;
; :
spending and the
,
wild accumulation .of debt were
fostered in part by the notion
propagated by these same econo¬
mists (and others) that'governdebt
ment
•:
can
do
harm
and,
indeed, has many virtues because,
they said, "we owe it to ourselves"
no
tion of wealth and income except
as
these matters are determined
rights
decision
rests
in
matters
of this
subjective
praisals; and these are always
bitrary.,
upon
,
tendency
this may be the result of the gradual
group of economists, and others, evolution of standards which meet
who embraced such
notions, to social approval, or of formal law.
give away a very large portion of But where law lays down stand¬
the savings of the people of the ards of
fairness, these arfe presum¬
United States.
among
All sorts of
reasons
have been
provided, and are still
being provided, for the expropria¬
tion and exportation of our wealth.
Our prosperity and the welfare of
other people were said
upon
our
upon
the
ably for the purpose of making
competition work more smoothly,
and
they
are
of
social
plicable
with
sults
presumably the
and
ap¬
to depend
of
competition with
protection of the ill
Examples are
spending and gifts and children from
heavy exports of
approval
re¬
equality
to
all.
the sheltering of
maintenance
by
us
wealth. Pros¬
perity and degression were said
to be "indivisible."
This jargon
spread as though it were a funda¬
mental
truth,
although it was
merely another device employed
by those devoting themselves, in
part, at least, to the dissipation of
the national patrimony of the peo¬
ple of this country,
our
iff Artificially low interest rates
were instituted and maintained to
make it easier for the government
to borrow and spend, and because
from
adults,
the
and the
ing
aged, rules for horse
and
lation
,
of
rac¬
athletic
contests, regu¬
monopolistic practices
and
of what is deemed
fair
methods
of
to be
un¬
competition,-
re¬
pression of predatory activities of
people, and so on.
When there are departures from
practices that give us our prices
under conditions of free and fair
competition, the extent and nature
these
departures should be
of
measured
posed
against what it is
would
be
the
sup¬
situation
standards
were
anti-social
held to be essentially
people
Any defender of a governmentally-managed economy must of
necessity take the position that
fixed
if
These
Some
the
of
thus far
seen
our
other
burden
are a
blanket of debt
a
on
our
people and national patrimony,
reaching far beyond anything of
which
have
we
dreamed. The
ever
spect to
petition.
Being
in
the
the absence of
We cannot get, ex¬
.
goods reveal.
cept at unusually high prices, if
all, a multitude of things that
at
would like to have.
we
ductive
activities
great and
for
must
persist at
Our pro¬
be very
high level
long time if we are to over¬
the nonproduction or under¬
a
come
a
production of various commodities
that characterized the years of the
war and the preceding depression.
We
beginning to perceive a
these sobering things, but
are
few
of
the
real
days
not yet arrived.
ligate
of reckoning have
We. like the prof¬
individual
spender,
borrower
and.
still in the stage of
are
intoxication,
pleased
with
our
spending and its results and, there¬
fore,
wish
use
the
our
real
it
and
devices
to
scatter
wealth
wish
to
the four
to
of the world.
ners
to
prolong
to
same
We still
borrow
to
and
to
cor¬
seem
mort¬
gage and to spend until the bitter
end
finally overtakes
existent.
undesirable,
Our real
prices arid
high
which
or
real wealth.
our
wealth is relatively scarce as our
these are the only reliable guides
known as to what is good or bad.
seem
we
Since
to
us—an
think
are
we
is
end
non¬
acting
a*,
a self-regulating monop¬
economic world,, and that they are though we actually entertained
olist, the government, like any
the belief that God takes care of
the best, possible guides'to pro¬
unregulated monopolist, is free to
fools and the United States, and
do whatever it pleases. There is ducers, consumers, buyers, sellers,
that it makes no difference how
savers, and investors, has permit¬
no
standard of Tightness beyond
foolish we be, we would do well
ted tfiis country to go far astray
what it wills if it chooses to cut
itself loose from objective stand¬
ards.
The departure of so many
of
our
governmental officials and
economists—particularly the Keynesian-Socialist
brand
—
from
and to drift into or to
activities
social
far-flung
are
consequences u are
But the desire to
competitive
system
and the
serious.
depart from a
is not con¬
fined to government officials and
the
Keneysian-Socialist
econo¬
mists.
Many people
a
fabulous
Along
almost
with
this has
come
an
general acceptance of the
that
a ..government
can
notion
markets
market place.
We
obviously
need
to
remind
leadership are willing or ac¬ ourselves over and over today
participants in those Federal that there is no sound basis for
policies and practices involving the notion that the judgments of
such departures. Pressure groups government officials are superior
of almost every conceivable va¬ to the forces of the market place.
of
the
taxpayers.
Agricultural
leaders, labor leaders, owners of
mineral resources, heads of big
business enterprises, heads of lit¬
tle
enterprises, leaders in educa¬
tion, leaders in fields of religion,
and
so
on
and
on
seek
financial
aid from the Federal government.
They
When Sir George Paish, long
Washington for alms
looting
speak
proudly
of
getting
nesian-Socialist
doctrines
which
can
in positions
for "their share" of the
The people of the United States
sorely need to understand the na?
ture and implications of the Key-
an economy better than
have afflicted this nation like a
society
acting
collectively
pestilence in recent years, and
through the exercise of the judg¬
our distinct movement away from
ment of all
buyers and sellers
private - enterprise - competitive
operating freely and fairly in the
manage
of
riety go to
remind ourselves that the his¬
their wealth.
sum.
tive
or
to
tory of the world is replete with,
economic in nature and are cost¬ chapters on the wreckage of peo¬
ing the people of this country a ples whose governments dissipated
these
objective standards have af¬
fected
this
country
most
ad¬
versely. The ramifications of their
embrace
multitude of devices that are un¬
and
toward
governmen-
tally-managed
economy with its
spending, waste, and
destruction of our national patrir
profligate
mony.
ii
Socialism
;
the
private
£ enterprise system—There
are some
versus
close student of business
fluctua¬
tions visited the United States in
very important and basic things
about a system of Socialism ver-r
1937, he put the matter accurately
sus
and well when he said: "Long ex¬
vate enterprise that the people of
the United States need to realize.
system of competitive pri+
a:
perience has caused me to come
the conclusion that the eco¬
crises of the world which
come from
time to time are the
result rather of political action
ture—politically, economically, in¬
economic action, and can
become the standards of right and
Socialism
to
nomic
than
of
be avoided only
men
when the statesgreater
of all nations have a
understanding
and have some
consequences
of economic law
appreciation of the
of their own actions.
dividually.
ards
of
is
destructive
in
na¬
The subjective stand¬
the
rulers
of
the
people
The objective standards
produced by competitive private
enterprise, Which are the only,
wrong.
ones that can reflect the combined
judgment of all the people as to
said that the states¬ what should be produced, ex¬
World, taken as h changed, and consumed, and as to
whole, have, since the war, and what prices arid profits should be*
especially in recent years, acted are scuttled by government rulers
...
It may be
men,
of
the.
in such a manner as to bring the
ilar or related fields where com¬ that
they are attempting to force world machine almost to a stand Keynesians. and
their
petition in prices and profits and the helpless* taxpayers to subsid¬ still."
philosophy, as thev have thus far
operated chiefly through our Fed¬ losses prevails.' The standards for ize them. One of the basic tenets
The widespread failure of the
eral 'Government, have cost the
the regulation of other
types of of Marxianism is "From each ac¬ people of this country to under¬
people of this country billions
stand clearly the nature and value
.monopolies
are
implicitly ; the cording to his ability, to each ac¬
piled unon other billions of dol¬
of standards determined by comWhen the
lars.
And the end is not yet in same.
proper concept cording to his needs." When. in¬ neb'ti^n.
and
the ? drift |to
an
sight. They have dissipated peo- of these matters is employed, the dividuals and groups go to Washincreasing amount of governmen*.
development.
of taxes and
desirable
would tend to prevail under com¬
Federal help. It is now a respect¬
such competition were
operating. able thing to do. It is, according
who did not Basically, the regulation of pub¬
to present, standards of behavior,
need, or deserve, any appreciable lic utilities, if properly
conceived, a manifestation of
power and im¬
compensation in the form of in¬ is designed to provide
prices and
portance.
terest when they loaned their sav¬
profits of a kind and degree that
These, people* do not announce
ings.
The unfortunate effects on it is supposed would
prevail under
proudly that they are not believ¬
our hospitals, colleges, universities,
competition. The standards used
ers
in the competitive system in
and other endowed institutions are
are the prices and
profits in sim¬ so far as they are concerned, or
painfully obvious.
savers
want bread."
soon
ap¬
that called for
The element of fairness in com¬
they were impersonal petition means that the rules of
objects—automatons—fit for noth¬ the game, as in all forms Of ri¬
ing except to be plucked^
valry, have been defined and ac¬
As a part of this widespread at¬
cepted, and are followed with
titude, there has beeh an almost general approval.
These
rules
uniform
endless number of
an
would
we
.
the
objective
the objective standards yielded by
by competition.
We have monopolistic powers in competition, in which all society
records its j udgment, are inferior
ar¬ some degree on the
part of many
to the opinion or desires of a few
buyers and sellers.
In time of
men in assuring the general wel¬
In economics, let. it be empha¬
war, the Federal government puts
sized, there is no objective stand¬ itself in the position- of a power¬ fare of the people of a nation
Such a
ard of fairness of prices and hence
position cannot be de¬
ful monopolist, chiefly as a buyer.
fended in science.
of profits except where prices and
As a monopolistic buyer it can fix
There is no judgment that can
profits are determined under con¬ the
conditions
under
which
it
ditions of free and fair competi¬ will
possibly equal the combined judg¬
buy. And since this monop¬
ment of
all buyers and sellers
tion. Prices and profits thus de¬
olist is also our Federal govern¬
termined are regarded as object¬
Producers, buyers, and sellers all
ment;; there is no superior authorv,
ive or natural in the sense that
get their best and their proper
ity to act as - a neutral regulator
guidance from free markets.
they are not controlled by the as between the
helpless sellers
act of any individual buyer or
The widespread failure in this
and the monopolistic buyer in an
seller or by the direction of any
effort to see. to it that prices and country to understand what objec¬
regulating authority.
They are profits are fixed at a level that tive standards of value mean, that
sort
virtues
or
protection;
of wheat say its mar¬
ket value is.
by the operation of the forces of
We have
and fair competition.
Any departures
though that contention jus¬ the result of the competition of
tified their policies. The alleged all
buyers and sellers in the market
virtues of public debt were ex¬
place. They are the result of that
pounded vigorously by these econ¬ society's judgment; and there is
omists.
Practically none of them no other better, no other object¬
seemed to see any dangers in it. ive, standard in so far as that so¬
Taxpayers
seemed
to
no
have
ciety is concerned.
*^-as
and buyers
free
other
in
occurred
history. The impairment of our
savings and the dissipation of our
national wealth are parts of this
from
-
we
involving the welfare of thus
nation that have
competition, thai effects, that probably wilJ flow
is
substituting
its from this exceedingly unhealthy
type of appraisal of values that is government
personal or subjective and, there¬ power and will for the obj ective situation appear not to be widely
standards yielded by competition. understood. We seem to be in the
fore,
arbitrary, in nature.
No
When a government substitutes its same general situation as the in-,
person need accept another's sub¬
jective standard as "right" or ob¬ subjective will for objective stand¬ dividual borrower: who has bor¬
jective. The science of Economics ards, the net results are artificial rowed almost to the limit and is'
values, economic waste, and pos¬ busy spending the proceeds.
becomes useless.
feels prosperous and has a sense:
Individuals
cannot
argue
ef¬ sibly a disastrous destruction and
of well-being.
He sees the out-,
fectively about the Tightness? of dissipation of a nation's wealth
We have seen much in this worlc ward symptoms of prosperity—a
prices or profits or losses that re¬
sult from free and fair competi¬ in rfecent years, and throughout large flow of money, large bank
the history of the world, as tc. accounts, much buying, and great
tion.
The
farmer's
subjective
happens to people when, activity. But there are some so¬
value of his wheat may be above what
aspects of this picture;
that indicated in the competitive governments presume to tell them bering
what they may produce, what they There are the matters of debt and*
market with the result that he
may
consume,
and what prices taxes and.of the situation in re-:
may decide not to sell.
But his
launches
standard
from objective standards of ap¬
praisal of what is proper or just-—
In the light of the trend, of events
Closely related to this anti-sav¬ in this country in recent years, it withholding will not alter " the may or must be.
We would do well to weigh wit!
ing, pro-spending, program of our obviously needs to be emphasized market price.
Neither, he nor
government was the ..concept of again and again that there are no
care, and
to consider the great
anyone else can appropriately say
economic maturity which some of objective standards by which we that
in,
Thomas
Jefferson's
the market price at that time wisdom
our
economists and others were can measure what is proper in
"Were
is not the correct price. It is the warning of 1821. He said:
able to inject into our Federal production, prices, prof its,, savings,
we
directed
from
Washington
proper price for the reason that
when to saw; and when to reap,
policies. Since, so it was alleged, investment, and in the distribu¬ that
price reveals 'what all sellers
lation of capital goods.
ably the most dangerous tenden¬
demonstrating that they
are no longer believers in the vir¬
tues of the competitive system but
prefer the basic principle of Karl
Marx. They want their needs met,
as
they see them, by the tax¬
what
produce.
departure from
the tally-managed economy are prob¬
at
of the taxpayers they
expense
in
subsidies
seeking
ingjton
Oar Economic System in the Ui Mettled Woild
Thursday, July 8, 1948
under
a
system of Socialism. What
Socialist or so-called eco-;
nomic planner wants is to be able
every
to
enforce his plans and to over-*
rule the plans of all other peonle.
The only freedom that he really
advocates
and
is freedom for himself,
friends, according to his own
standards
as
to
what
he
wants".
THE
"Volume 168 : Number 4714
COMMERCIAL
the so-called; importance of the individual gives
advocate oi way to the importance of the State.
what he regards as his own wel¬ When Socialism becomes as thor¬
fare; he is a potential dictator.: ough-going as in Russia, freedom
When
people advocate govern¬ Of the individual disappears as
ment dictatorship in some form it does freedom of speech and the
is always dictatorship, by their press and indeed all freedom ex¬
own clique.
cept to live and labor as a tonguej
Perhaps no lesson of history is tied wage slave ordered about as
Evfery
advocate
.Welfare
of
State is
an
.
trogression. That is not what the
other individual.. struggles of mankind throughout
These concepts have brought tOj
the
centuries
teach
us
is
the
.enligtened people the rule of law,
proper course to take.
with those of any
guarded
constitutions.
These
are
the ear¬
marks of civilization.
Socialism
dictatorship
based upon the will of the rulers.,
•This- fact is not altered by. the,
; tendency of many modern. Social¬
.
ists
means
write
to
speak of "demo-
or
era^ie Socialism."
We need to understand that no
ded-; so-called help. One type of re¬ in this picture is that we are
is properly ; action is illustrated by Socialist weakening our economy at an ap¬
organized and given the power—-! England, if a London dispatch in palling rate to aid governments
military, naval, and air—to en¬ ■the New York "Times" of June 5 and "people that are inefficient,
Ctradictiori
in
It
terms.
is
ah
;attempt to sugarcoat bad medicine.1
'The
importance of the individual'
Jis in practice denied by the So*
Economic
•cialists.
calculation
by
«the conventional standards of the
market* place becomes
■unless there is
a
impossible
competitive sys¬
tem in another country which
I provides such standards.
As a
•consequence, results of past actions by the government planners
cannot be measured by objective
•
•
-standards derived from Socialism;
iand plans for the future cannot
-rest
worthwhile calcu-i
-lation. If'Socialism were univer-'
•sal; there would be no objective
:
upon any
which
standards anywhere against
-to
measure
results..
the
Socialist
ders
scarce
i and
At
the
best,
government
squan¬
valuable
wealth
and
produces wastefully and fool¬
Chaos and poverty for all
Social¬
ishly;
tend to be the final result.
is
and, that have, during the last 30
in their international troubles and
With
international
Statism
out
of
of peace—with reconstruc¬ evitable by government officials
here today if the House of Repre¬
tion, : production, trade, consump¬
sentatives vote cutting funds for
tion, and better living.
Each nation should be allowed aid to Europe won Senate en¬
to have any type
litical,
and
of economic, pti-!
social
organization
our
then
to
that
we
that the people desire or endure,
any interference from any
nation.
from
Press
dispatch
sovereignty
invaded, and it
should not be permitted to invade
'Evening News' asserted that 'Mr.
Taber seems to be claiming the
the
right to
should
not
be
sovereignty of another nation.
Just
tion
as
free trade within
a
na¬
our
fosters
Constitution
send
to
a
operate
relief
with
abroad.
a
We
which
Europe
cannot
.it added."
What the
Manchester "Guardian" seems to
oe saying is that if Marshall Plan
that
irre¬
deemable currency.
The govern¬
is, therefore, free to do sub¬
stantially as it pleases in diverting
the resources of the people of the
United States to foreign govern¬
ment
should be ousted
that
result "this
deemable
regard
to
interference
That
is
"world
a
-
wealth
our
not
owes
tolerated.
be
to
variation
novel
me-a-living"
-
the
of
doc¬
trine. It is that "the United States
Britain
owes
a
living
to the people themselves so
they can determine what
Governments
themselves as
regardless
of what their government may do
or be like, and that to withhold
aid under any circumstances is an
they
need to do is to return di¬
can
run
away
with the people's purse and ruin
a
nation.
That is what an irre¬
Europe cannot tolerate."
In still
other words, this 'seems to mean
entitled
a
rind,;
is the kind of interference which
that
destined
have been
they wish done. in matters of this
government
a
as
we
purse
Jpecause of her Socialist gov¬
if that
the people
are
rect control over the government's
use
and abuse
of the people's
aid should be withheld from Eng¬
ernment and
States
relatively simple lesson in a very
hard and expensive way.
Perhaps the most basic thing
tolerate,'
land
ex¬
with socialistic devices
stifle enterprise and foster
to learn what should
'This is the kind of inter¬
ference
them in large
they reduce their
It would appear that
oust—a
ment.'
also
of
system
the Marshall Plan as
to denounce—perhaps
particular govern¬
use
weapon
even
us
demand
support
while
of the United
Manchester
liberal
"The
adds:
to
waste and inefficiency.
nection with the
Its
involve
to
even
periment
published in con
preceding report,
London,
or
hours of labor and continue to
that
Associated
ways
ask
measure
dorsement."
An
found
years,
arts
economic, political, and social sys¬
tem so that we may be strong.
The framers of
report
peace
prosperity so should
free trade among nations tend to
generate and spread well-being.
International
exchange
under
competitive conditions, as within
a nation, should determine what is
justice.
desired and not desired, and what
III.
should and should not be produced
Foreseen Relationship Between
for foreign trade. Each' nation
Our Economy aiid Those of So¬
should be able to regulate its for¬
cialist
Britain
and
Communist
eign trade in accordance with its,
Russia-^There would1 appear ■ to standards of fairness.
be no way in which one may esti¬
Capital investments in foreign
mate with any assurance as to
countries and relief for foreign
accuracy what the
future rela¬
peoples should in principle be left
tionship between our economy and
to private enterprise; otherwise,
those
of
Socialist
Britain
and
governments engaging in such un¬
Communist Russia may be.
dertakings can, by compulsion,
Perhaps all that may be said
dissipate a people's wealth un¬
appropriately in respect to this
wisely, if not to the point of dis¬
matter is that we should keep
ourselves strong in order that we aster, if, because of the use of ir¬
redeemable money, it has removed
may
be as able as possible to
the public purse from direct con¬
meet eventualities which cannot
trol by the people.
be foreseen.
There is, therefore,
We have created government
every reason why we should keep
agencies to make investments and
the undermining poison of. So¬
and
That
said in
•
the
cialism
reliable.
as-' part: "A further drop in Britain's
sured, each nation should then be living standard and the spread of
in a position to proceed with the unemployment were seen as in¬
force its decisions.
private-enterprise-competitive
system in fostering the importance
of the individual, in stimulating
production, in providing a great
volume, variety, and exchange of
goods and services, in providing
prices that are right, in distribut¬
ing income and rewards in accord¬
ance
with objective standards of
That fo a con*
The one thing that would seem
to be definite and beyond dispute
icated to0 such peace,
|and thus I order" of the dictator.: system of economy known to man without
'They have brought limited gov¬ can match or ever has matched other
with the people safe¬
by bills of rights and
31
tional organization, earnestly
than that we, »the dictators see fit.
must begin, in our thinking, with,
To- take the road to Socialism
the importance of the individual is to take the road
to>social re¬
and the equality of his basic rights'
ernment,
(127)
But such, peace is unattainable, it; of reaction abroad as the result of
would seem; unless an interna-l our help or threat to reduce our
cmor^ fundamental
in contrast with the "Thus I will,
& FINANCIAL CHRONICLE
regardless
currency,
paper
with
Dined
com*
government that
wishes to rule a people, permits.
need
We
a
face
to
this basic fact
and to
get back on solid ground.
be a Santa Claus for
others, but there is no Santa Claus
anywhere to save the United
We
may
its
from
States
foolishness
if
it
dissipates its wealth, depreciates
its currency, and weakens its so¬
cial fibre sufficiently to make it,
finally, a prey to the poison of
Socialism»or dictatorship in some
other form,
.
of what she may choose to do po¬
litically or economically."
The
United States taxpayer is to pay
what Britain requires, otherwise
we
are interfering with
her socalled enlightened social experi¬
ments.
That, it would appear, is
symptomatic of the results of our
profligate so-called aid to foreign
John Haskell Heads
Mission to Sweden
,
Emil Schram, President of>■ the
New York
Stock; Exchange, has
as Ludwig von Mises has understood much better than do
countries.
said, planned chaos.
the critics of the private-enter¬
announced
that
John
Haskell,
\r
;
i.-;*:<
\ The
No economic and social system prise-competitive system the prop¬
question would seem to Vice-President, has been given a
in "the world has- ever matched er functions of government, the ments, other institutions, and peo¬ arise as to why a people who mus
year's leave of
ple; and there is little that thrifty meet the standards of the private
absence to ac¬
the private - enterprise - capitalist needs and importance of the in¬
and
concerned
people can -do enterprise system should be taxed
; system based upon free and fair dividual, and the freedom that is
cept appointabout the matter. The reason, in to
support a people who tolerate
pointment by
competition, with the government necessary if enterprise is to blos¬
addition to that involving the loss
a
Paul G. Hoff¬
government that is strangling
.acting chiefly as umpire,, regu¬ som and bear its natural fruits.
of their
direct power
over
the private
lator of monopolies', and tne pro- With recognition of the fact that
enterprise. At least it
man,
Admin¬
public purse, is that a government, would seem desirable to leave
lector of the general interests.; •
istrator, Eco¬
liberty and
general well-being
so
freed, can purchase the gooc each individual free to decide
nomic : Coopcould not thrive except under a
WBut when economic distortions
will of pressure groups with suf¬
whether
he
wishes
to
e r a t i o n Adsupport
private - enterprise - competitive
occur, due perhaps to wars, or unficient
votes
to
keep
itself in such a system.
m i n istration,
wise governmental policies, peo- system, they wrote into our Con¬
power for a very long time.
If
as
Chief
of
A free enterprise economy ob¬
pie tend, in recent years at least, stitutional system provisions for the
government
is
sufficiently
that Adminis¬
to forget these basic facts and to this liberty which embraced the
ruthless it may not be possible to viously is so strong in its funda¬
tration's
mis¬
i seek government help. Politicians,
right? to
private property,
the
mental nature that it can with¬
remove those in power except by
sion to Swe¬
^endeavoring to please, attempt to right to engage in enterprise, the
stand -severe abuse at the hands
revolution.
den. Mr. Has¬
of bad government. The fact that
£ meet;tihe demand s of these seekers right to exchange goods freely,
kell will make
It is possible that private enter¬
'of governmental protection. .The the right to enter into. contracts.
our economy continues to func¬
his headquaruse
of
irredeemable
currency As a consequence, this nation, in prise would not have provided tion as well as it does in the face
John Haskell
ters in Stock¬
makes this easy.
This procedure the 160 years following the adop¬ the capital investment and relief of the abuse to which it has been,
sufficient to bring about a rela¬
Mr.
Haskell
has
been
and is being, subjected, is some holm.
grows and grows. The new gen¬ tion of our Constitution, reached
with
the
Exchange
eration tends to pick up where the highest level of living of any tively rapid general recovery in indication of the virility of pri¬ associated
ism is,
:
•:.%
v
■
.
.
•
•
.
.
.
.
.
1938
and
has
been
a
left off because, country on earth. Our people ac¬ the war-devastated nations. On vate enterprise. .But although it since
in these complished more and did it in less the other hand, private enterprise is powerful, it also contains, like Vice-President since March, 1939.
matters, they have a very small time than any other people in the might have dorie a better and a large locomotive, many delicate, A graduate of the United States
basis on which to reach independ- history of the world. In addition^ even quicker job-than our gov¬ and
delicately - balanced, parts Military Academy in 1925, Mr.
ernment
may
do.
Apparently, which can be thrown out of bah? Haskell served as a Colonel in
ent judgments. Thus a national it Is substantially accurate to say
there is no way as yet to estimate
World War II,
drift of this type becomes easy. that it has been the great institu¬
entering active
ance very easily if tampered with
It is like the silent thief in the tions of individual freedom and with any accuracy what the net by inept hands. Still further, there service
in
October,
1943.
He
results of the activities of these
is a limit as to how far our gov¬
night. Every college and univer¬ private enterprise in this country
served with the 27th New York
! the preceding
one
with ineffective schooling
•
;
•
f
sity teacher can see the
"on the present generation
"
lege" students
'
to
devoted
.
of one
the
effects
of col-
Presidency;
development
of
% Statism, lastihg over a dozen years.
These people lack experience with
"the variations which generally
characterize different Presidents;
:
they
have V distinct
aged
inclination
governmentallv - maneconomy because they un-
toward
'
a
derstand0 little else.
-
As a consequence of this drift
j of; bur country in recent years toWard Statism, we have reached
a Stage in which; we dow1; think
: we imustr have; government aid *pt
^ proteetiPh or management ^pf dhig
and that, parity prices for aericulr
ture, subsidies for the inefficient,
•
•
"
i
.
r
•
fixing to • cover up great
scarcities, "social enterprise" piled
price
upon
"social enterprise"—a
steady,
will be.
judgment will ap¬
and nations of Europe from the parently be largely in the realm
of subjective appraisal since the,
onslaughts of autocratic govern¬
objective standards of attainment,
ments. In the face of these facts,
provided by competitive enter¬
we find vociferous groups urging
prise, will apparently be largely
that we replace these institutions
lacking.
There probably will be
with those of autocratic govern¬
some objective
standards against
ments.
which these
governmental pro¬
There are no lessons in history
grams can be measured, just as
that
justify
autocratic govern¬ we
measure the accomplishments
ments or Socialism. And perhaps
in a Socialist country against Obiall that can be said profitably as
jective standards that exist in
to our possible future relationship
other countries.
with such governments,'and* econ-f
That there are prodigal waste
omies abroad is that we; should
and
downright foolishness
in¬
not permit ourselves to be con¬
volved in many of the activities
taminated, any further with the.
bf: some; if not all, of the governr
diseases that have afflicted those
ment agencies designed to provide
countries.
They have been op-?
foreign aid seems beyond serious
pressed,: weakened, and -sapped qf question.
Although no one, ap¬
vitality
byv dictatorial govern¬
parently, can do more than guess
ments.
*
•
'
v •
that have been
and .over
again, and to make
ourselves
'
enterprises
Even the final
•
IV.
Policy
Needed
at,what the final results
•
to
ernment
can
our
the
dissipa¬
national wealth.
ital investment.
We
ices
and
served
may
be;,
in
Washington,
living recklessly and in North Africa, Italy, the Middle
a prodigal manner.
Our govern¬
East, England, France and in Rus¬
ment
are
agencies, devoted to foreign
investment and
relief, do not
meet the standards of the private
enterprise system and
fore wasteful of
sia.
our
are
there¬
His
next
assignment
was
seems
the
In
people's sub¬
some
reasonable
costs
to
the
been
to suppose
people
that
of the
with
General Omar Bradley as Deputy
Chief of Intelligence with
respects they are
While on
downright foolish.
These insti¬ Army Group.
tutions and their procedures rest assignment, in Germany,
chiefly upon the sands of emotion, Haskell was wounded.
guessing, and wishful thinking. It
stance.
awarded
the
the 12th
this-last
Colonel
He
has
Purple Heart,
Legion of Merit, the Bronze Star,
results
are,
of
course,, United States will be all out of French Legion of Honor and Croix
known: We know of the exporta¬
proportion to the returns whether de Guerre, Order of the' British
tion of our wealth abroad, of our
these be measured in real wealth
some
Rehabilitate
in
go
Division. in the Pacific as Chief
Dur¬
of Staff and in the Logistics sec¬
ing World War II and since, this
dissipation has proceeded at a tion of the Operations Division
frightful pace, and it is not clear of the War Department General
that we have yet learned anything
Staff.
He was subsequently de¬
of importance about the value of
tailed to General William J. Don¬
economy and thrift, and the desir¬
ability of persistent and great cap¬ ovan's Office of Strategic Serv¬
tion of
..
,
understand, as we ob- the World — As to the policy
needed to rehabilitate the world,
do not, that -Socialism is
an arbitrary, inefficient,
anH de¬ apparently the first and most basic
structive system; that under it the element required is world peace.
•
i viously
government
.
subtle fnarch toward Socialism.
We1 need to remind ourselves
; pver
employed twice in
the last 30 years to rescue peoples
great debt and taxes, of our high
prices.
We also know of certain types
ultimately sent
us or
in the
satisfaction to be found in
mere
our
ef¬
Empire,
Czechoslovakian
Cross and service ribbons
forts! to -be helpful and generous. battle stars.
War
with six
32
THE
(128)
As We See
COMMERCIAL
It
(Continued from first page)
helpful truths should be deduced by
peoples and governments.
The first of these is the
become
now
a
wide variety of
evident truth that to
adopt communism — certainly if the country
adopting it is within reach of Russia — is tantamount
to accepting the role of vassal to the Kremlin. Even in
those countries which are geographically distant from
Russia, the communist elements quite obviously take
orders from Moscow, and if they come into power, act
accordingly. Communism and fealty to Lenin and Stalin
have come to mean one and the same thing. It is, of
course, conceivable that a country advantageously situ¬
ated for the maintenance of its independence could
embrace communism and remain free of Russia, but
or
the feasibility of any such
it is vulnerable to an eventual
among its own peoples; it is quite another to proceed in a
readjustment. However, underly¬
similar way with foreign peoples stretched across a conti¬
ing demand factors still continue
nent in large numbers and possessed of an almost infinite
strong, particularly in the durable
variety of backgrounds and speaking a dozen languages not goods industries. After declining
heard within the boundaries of Soviet Russia. We should moderately in January and Feb¬
ruary to 251,
the index of new
certainly not like to see the Kremlin reach out its deadening orders rose sharply to 264 in
hand across the European Continent, but we believe that its
March, with all the increase in the
troubles would be only beginning when it Had done the durable goods group. New orders
marching — and we should suppose the shrewd men who in the latter group reached a new
sit
the
in
Russian regime.
Berlin. It
can
it has for
as
us on
be little doubt that in
a
number of countries, some
of them traditional lovers of
liberty, the communistic
countries
argue that some such organization of society offers the
best opportunity for advancement of the public welfare,
and there are not so many, as in this country, who look
upon these claims as ridiculousrTSut there are probably
very few who would voluntarily and knowingly submit
their economy, their belongings, their future, and indeed
their lives to the whims of a body of foreigners sitting
in high and secret council and claiming a monopoly of
the knowledge of the real meaning of Marxian precepts.
The Tito episode should, accordingly, place a, restraining
hand upon the spread of communism westward across
Europe—now that it has been made dramatically clear
that the spread of communism is the equivalent of the
spread of Russian dictatorship and tyranny.
notion
has
taken real
hold.
are
some
elements in this situation which should
and certainly afford some whole¬
some
to those who seem to suppose that
Russia is about to swallow up the rest of the world in one
big gulp and suffer no inconvenience after doing so. It may
be true, no doubt it is true, that there are substantial ele¬
ments in Yugoslavia who may,be willing for Tito to strut
give Russia
pause, too
food for thought
life out
his
or
so
collectivize
are,
foolish
so
in which
we
ment
How
are
as
sectors
fact
of Berlin, few
—
long as he does not attempt to communize
them, but who would give trouble, once a
extent, from the enlarged;
foreign aid ex-?;
penditures, and this year's income
tax reduction.
-
will
1929.
of
The
Kremlin, if it undertakes
to
"march
across
Europe to the Atlantic," either literally or figuratively,
must expect to encounter hostility among the peoples
some
subjects and continuous difficulties throughout the
to come. A Russia which extends in effect to the
Atlantic could conceivably he a weaker Russia than the
one that is now ruled from the Kremlin.
It certainly
would be risking a frittering away of its strength to try
subjugating the hundreds of millions of people to the
west of its domain.
Of course, it will be said that Russia has its
of
dealing with individuals
Into line readily and remain
can be no denying that such
to effect its purges within
Abnoimal Factors
Maintaining;
of wage
afford sufficient stimulus to main¬
funds
on
price structure for some time,
longer, possibly throughout 1948*
Business confidence may also be
flected
resented
in
necessarily
a
been
Chase
sharply higher price
debt.
new
Chairman
re¬
the highest since
amount, 75% rep¬
or
this
Of
1929.
the available goods pro¬
has
duced
749,000,000,
the
of
National
Mr.
Aldrich,
Board
of
the
in
said
Bank,
and
the
(Continued from page 3)
$110,000,000,000, or three times
the
figure of $37,400,000,003 in
1939. Thus, the pressure of these
a
heightened by the prospects of e
Republican victory this fall.
The
accompanying table indi¬
concisely the relationship of
today's economy contrasted with
cates
;
that of
previous peak years. *
;
recently: "Easy money means
It is clearly
debt,: Easy debt at a time
evident that the>
American economy is at a level
prices means extremely
burdensome debt when prices de¬ today which far exceeds the peak
cline.
A period of inflation is a established in past years.
period in which debt should bo
$
s|:
talk'
structure.
easy
of inflated
Maintaining Prosperity
Factors
It
be
readily
seen that the
prices on pro¬
duction with regard to governing
demand is upset by other circum¬
stances, or forces, which at times
exert a potent influence.
More
recently other factors, such as the
following, have been having their
can
normal influence of
effect:
prices go higher, with
some incomes lagging,
and many
people unable to afford some of
the things desired, they resort to
credit and instalment buying. For
As
(1)
a
time
this maintains
demand at
high level in spite of prices,
although eventually leading to an
unhealthy situation. Although not
out of line with the present peak
level of national income, consumer
credit is now. at an all-time high
a
of
$13.4 billion.
(2)
Record, industrial
activity
and
high prices also mean corpo¬
rations must add to inventories,
carry
larger receivables, increase
plant capacity, etc. Money is bor¬
rowed from banks, new bonds are
issued or additional equity issues
are
sold.
A larger proportion of
The peak in 1937 was $4.8 billion.
Last year total new
reduced,
are
increased."
not
vital stimulant to the
a
particularly
omy,
at
this
econ¬
time.
government spending arising from
policy of military prepared¬
ness.
This represents another case
of goods being bought largely re¬
gardless of the relative price level
a new
because
of
the
starting
these
apparent urgency
the
demand
of
a
In this con¬
given to the basic position of the
general economy.
Record produc¬
tion, peak price level, full employ-*
all-time
ment,
high
wage rates,
profits char¬
phase of a bull
market rather than its inception.
and record corporate
acterize the latter
The latter phase of a
bull market,
often the most dy¬
namic. If fanned by the fears of
further
inflation
through a re¬
however,
is
newal of
government deficits and
hopes of greater market recogni¬
tion of current corporate earning
power,
extend
believe
this phase could at least
through the summer.
X
it is important to keep
program.
factors
Thus
effectively
strongly
general
economy
the
rate
of
production
1941
1937
$90.2
30.5
General Price Level '(B)
95.3
86.3
86.4
'
and
the
$125.3
$244.3 (F)
110.0
''87.3
162.7
104.9
Industrial Production (C) „
Total Civil'n Empl'm't (G)
110
46.3
45.3
50.4
Average Weekly Wages—
$25.03
$24.05
$29.58
113
1948
50.1
"
Farm Prices (B)
(E)__
the existence
in mind, however, the
position of the over-all
and our present position
counteract,, for a time at least, the
in the business cycle. Sight should
more normal economic laws such
as
effective demand diminishing not be lost of this important con¬
from
a
as
the price level advances, thus sideration
longer view;,
standjoint.
Meanwhile,
eventually
balancing
effective market
the outlook for the intermediate
supply and demand.
With this general situation cur¬ period continues relatively favor-*;
of
27.3
Per Share
confirms
j
perform¬
nection consideration must also be
$103.8
—
Outlook
technical
of public funds
purchase Amer¬
ican goods, regardless of price, to
be
shipped abroad.
Foodstuffs,
steel, machinery, ad infinitum, are
bought in this country out of
American
production
and
sent
away, The normal equalizing ef¬
fect of the price process on de¬
mand factors is thus largely nul¬
lified.
.Superimposed on the for¬
eign aid program is the added
past, huge sums
have been used to
Money Supply (A)
.
ance
recent
primary bull market.
1929
—
The
Today, and for some time in the
capital issues
Gross National Product (A)
Market
Stock
expenditures
Government
(3)
price structure, is at an abnor¬
by corporations amounted to $4,-' mally high level. To that extent
way Dividends
is the case, but it is one thing
its own territorial limits and
change,
together with the third
increases initiated
by General Motors and tax re¬
duction already granted,
should
Business at Boom Level
Earnings Per Share (E)___
own
to
subject
tain general business activity
Prices (D)
and groups which do not fall
in their assigned niche; There
plans for this year are,
program,
82.4
162
381
$19.94
$12.75
194
$11.49
$8.78
133
able.
|ft
.
(
Psychology plays an important
role at this stage of the cycle, and
confidence
investment
bolstered
has
outcome of the
tion.
The
Presidential elec¬
general level of stock
187.0
prices is still
193
comparison with corporate
58.4
$52.0
188
$11.64
$20.00(F)
$7.59
$10.70(F)
been
by the recent technical
performance of the market in
reaching new high levels. Current,
prospects favor an encouraging
'
Dow Jones Ind. Stock
Dangerous Strategy
plant and
broadly, the impact of foreign aid
spending and
the preparedness
round
it
years
new
general economic condi-;
deteriorate,
but
viewed:
tions
of collectivation of the whole society is current income is used for cor¬
Yugoslavians may or may not be more porate purposes, which restricts
difficult to convert than other peoples in eastern Europe, dividend payments in some cases.
but one thing is certain beyond any doubt, and that is that Since August, 1945, when the •■war
ended, commercial, industrial, and rently r:prevailing, it is fairly, well
the people of that plucky little State do not want to be
agricultural loans have increased recognized, or should be, that the
slaves of any foreign regime.
from $6 billion to over $14 billion. domestic economy, based on both
rigorous program
undertaken.
The
The
course,
should
respects Russia needs
as
on
This is 15% over the
record expenditures of $16.2 last
year and compares with only $5.2
billion in 1939 and $9.2 billion in
equipment.
we
Perhaps the entir6 situation
reappraisal.
business, exclusive of
billion in 1948
the good will
everything in
understand. The
upon
ever
American
agriculture, plans to spend $18.7,
did so, and are now paying
the price of the folly, but the outrageous behavior of
Russia is certainly not adding either to her prestige or
her popularity.
is, however, that
by
defense program,
and the whim of the Politburo for almost
our
recently ,is
stimulated
erable
to enter into an arrange¬
dependent
The placing
orders
been
outlook arising, to a consid-*'
ness
and the British could
we
have
to
increased confidence in the busi¬
was
Many in these
Russian Troubles
There
We
have been
that the people of
this side of the Atlantic. There
said
enjoyed
gains in new orders dur¬
additional
of
folly of the same sort that kept us sitting
idly for days on end to permit the Russians to enter
year.
minds
indicates capital
ing April and May.
strength¬
of course, responsible for per¬
mitting ourselves to be found in a position in which
Russia can deal with us as she has been doing of late in
—
suppose
further
come on
respect, could not well strengthen respect for the
ever
would
well peacetime high.
be
A later survey
be added that the Tito episode has
Berlin from the East.
Italy and France would ponder the Marshal Tito epi¬
sode with great care. Communism as such, as is true of
socialism, has not such terrors for many European
would
Moscow
of
the heels of behavior elsewhere which has not
ened
feat is yet to be established.
of the European countries now appar¬
ently toying with the idea of adopting the Marxian system,
as expounded by Lenin and Stalin, can scarcely expect to
remain free
of foreign interference, if not domination,
should they proceed in any such way. This much must be
plain as a pikestaff to every thoughtful man on that troubled
continent
now that the experience of
Yugoslavia is before
the world.
Of course, most sensible men have long been
quite aware of what Marshal Tito has now discovered, but
apparently there have been a good many individuals and
large elements in numerous populations which were not.
That some such awareness is now beginning to take; hold
of the minds of Europe is strongly suggested by the several
defeats the communists have suffered in Europe in the past
one
rooms
goods manufacturers have
It may
any
Certainly
smoke-filled
of the fact.
aware
Communism Means Serfdom
Certainly
Thursday, July 8, 194S
FINANCIAL CHRONICLE
&
relatively low iri
earn-,
ings and dividend payments. With
improved, speculative and invest¬
ment
sentiment, current corporate
earning. power could be capital¬
ized at
months
a
higher rate
and
it
over
coming
that this
(A) Billions of dollars; (B) 1926=100, Bureau of Labor Statistics;
current
phase
of
the
market
(C) F. R. B. 1935-1939=100; (D) High price for the year; (E) Earn¬
ings and dividends per share, on the Dow Jones Industrial Averages; movement should have further to
run on the upside.
(F) First quarter annual rate; (G) Millions of persons.
appears
Volume 168
THE
Number 4714
Urges More Liberal
Bank Dividend
period
ord
of banks
Policy s
1919 to 1929 the
was
not
rec¬
bad one;
a
FINANCIAL
&
The State oi Tiade and
(Continued from page 6)v;;'vV
the
COMMERCIAL
exactly a third of memberprofits was retained.,; This
true
though supervisory
this policy during
that period apparently was mod¬
erate.
The proportion of profits
paid out by nonbanking corpora¬
tions
during this interval was
higher.
was
even
pressure
on
begin. The corn belt
substantial general rains during the week and the outlook
corn and oats was greatly
improved.
1
and other places over-the inability .to make 10,000 freight cars a
month, some car-building shops are looking for orders for January
of 1949, and, observes "The Iron Age," the voluntary allocation plan
can be thanked for the smooth running of the freight car program.
Closing prices for both grains were sharply under a week ago.
was
increased activity in export flour business last week.
Domestic flour buying remained at a low level as bakers and
.
"Certainly
flexibility
among
dividend policy would
desirable, if it could be at¬
banks
foe
in
tained.
with
Those
ownership
could
close-knit
follow; policies
best adapted to the advantage of
both
the
bank
and
its owners.
Banks with wider distribution of
December.
prices.
unless the
cars,
program next year
because of steel.
trade
Cotton price movements were
Spot prices at
The American Iron and Steel Institute announced on Tuesday
for
points,
or
the
for
operating rate of steel companies having 94% of
the steel-making
pacity
beginning July
6,
1948,
A month ago the indicated rate
5.2%, from last week.
the clos¬
The institute stated that the fall in the rate was due to
ing down of beehive coke ovens and the Independence Day holiday.
It
said, however,
was
that there was no indication that any
required this week as coal supplies are
further curtailment would be
^Vhat Are Reasonable Dividends?
Professor
bis
Robinson
article
with
a
concludes
of
discussion
reasonable dividend standards for
individual
banks.
banks, such
as
"(1) -Many
those in nonindus-
trial suburbs and in matured
com¬
munities have limited loan oppor¬
ample for the present.
ments.
Once this sort of pro¬
...
gram has been adopted, a fairly
high proportion of earnings over
the long run can be paid out.
(2) Banks with sizable loan op¬
,
portunities
.
.
be justified in
following the policy of retaining
a great deal of earnings.
In a
few cases they may even find it
advantageous to sell additional
shares.
Any bank that has
.
may
.
.
loan busi¬
(it must
be admitted that this rarely hap¬
pens) probably could have earned
a satisfactory return on the capital
it needed to keep such loan busi¬
ness.
(3) Equalization of divi¬
dends over the various phases of
business fluctuations has much to
merit it as a policy.
Fluctua¬
tions in banking profits have been
due more to nonrecurring losses
than to changes in the net earn¬
ings
from
current
operations.
Since loan losses were greater
than investment losses, and since
loans are now relatively less im¬
portant,
bank
earnings
should
flucutate cyclically less than in
the past..
actually turned
ness
away
for lack of capital
.
.
1940, the highest
,.
Transactions in
.
.
industry for the
kwh., according to the Edison
of 90,873,000 kwh. below the
however 976,001,000 kwh., or
power
growth of recent years has been
almost wholly due to governmen¬
tal
fiscal
policy. This growth
week-end.
wool market remained
the
on
high asking prices was noted in
There was little interest shown in medium wo,ols and woolen
wools, but scoured wools were in fair demand. Imports of foreign ap¬
parel wools received at Boston, New York and Philadelphia remained
in good volume, totaling 6,124,900 clean pounds in the week ending
by the electric light
ended July 3 was 5,165,825,000
Electric Institute. This was a decrease
output in the preceding week.
It was
week
ported for the corresponding period two years ago.
June
18,
compared with 5,249,900 in the previous week.
as
RETAIL AND WHOLESALE
CAR LOADINGS DROP 2% IN
LATEST WEEK
'
■
•
.
,
,
*r
■/
•'"V.: v.-
t jj -
with
Production of
most
of
!
a
the United
States and
in
retail
of
■
volume
goods, though clearance sales were generally less frequent
*;•
\
year ago.
"
1
A considerable
Canada
than^
; V?:'
%
increase in the demand for beachwear and sport
clothing for both men and
and trucks in
seasonal specialties.
during the week,
comparing favorably with that of
types
many
lines
year ago, according to Dun & Bradstreet, Inc., in its current survey
of trade.
There were extensive promotional sales of some types
PLANTS
cars
in
of
increase
moderate
a
dollar volume
a
AUTO OUTPUT UP SHARPLY IN WEEK DUE TO REOPENING
OF ASSEMBLY
buying
consumer
was
;
weather in many sections of the country encour-;
summer
the
aged
There
Loadings for the week ended June 26, 1948, totaled 888,582 cars,
according to the Association of American Railroads.
This was a
decrease of 18,192 cars or 2% below the preceding week, but an
increase of 42,441 cars or 5% above the corresponding week in 1947
and 9,038 cars or 1% above the same week in 1946.
TRADE CONTINUES
COURSE
FAVORABLE
'
Hot
lose to 112,349 units from 95,027 (revised) units the previous week,
according to "Ward's Automotive Reports."
for the banking system as a whole
may prevail.
This prediction is
made despite the fact that on a
relative basis the share of business
financing done by banks seems
to be showing a long-term secular
decline.
(5) Finally, the char¬
acter of bank stock
ownership
.
.
.
dividend
affect
policy.
upturn noted the past week was due to the return to pro¬
General Motors' Chevrolet division after a v/eek's shut¬
The
duction
women
Summer night-
apparent.
was
r
attracted considerable attention and women's cotton dresses and
wear
of
Output in the similar period a year ago was 63,460 units and, in
the like week of 1941,
This
week's
it
was
96,457 units.
78,438 cars and 29,643 trucks
cars and 1,544 trucks made in
V
consisted of
and 2,724
output
made in the United
States
Canada.
BUSINESS FAILURES LOWER IN WEEK
Commercial
occurred in both large and small failures;
A slight decline
dipped from 89 to
84, while those with losses under $5,000 declined from 22 to 19.
those involving liabilities of $5,000
Retail
trade
and
commercial
this
week, while mortality in
steady or increased.
'
'
twice
the
failures
16
was
gions had
more
declined
failures
more
States
again reported
than 10 failures during the week; New England had
12. Mortality was less heavy than a
and East North Central had
19
year ago
in the Middle Atlantic and East North Central States.
A
FOOD PRICE INDEX DECLINE FURTHER IN WEEK
trend
found,
on
one
stock
way
relations."
ownership
may
of improving public
\
Irregular movements again featured leading food markets. The
was generally lower and the Dun & Bradstreet wholesale food
price index dropped 2 cents further to $7.14 on June 29, from $7.16
a
week previous.
The current level compares with $6.39 on the
corresponding date
for
eggs,
to
The
Financial
Chronicle)
i
KANSAS CITY, MO.—Christo¬
pher T. G. Manners is with Goffe
& Carkener, Inc., Board of Trade
Building. In the past he was with
Jierrick, Waddell & Co.
potatoes and steers.
WHOLESALE
A rather
the
prices.
to
The
LOUIS,
Financial
MO.—Donald
E.
IWaldemar is with Stix & Co., 509
Street, members of the St.
Louis Stock Exchange.
Dun
Grain
INDEX
listed
butter,
on
markets
wholesale
latter part
commodity price
June 29 from 290.45 a week previous.
were
lower in the closing days of
and
prices
new
and used
cars
remained in
very
large
demand.
There was a seasonal lull in the buying of conventional living,
dining and bed-room suites and the demand for porch and lawn furni¬
ture was sustained at a very high level.
.
Retail volume for the country in the period ended on Wednesday
was estimated to be from 7 to 11% above that of the
of last week
a year ago.
Regional estimates exceeded those of
lowing
percentages:
New
England
and
a year ago
Middle
by the fol¬
West,
6
to
10;
East, 7 to 11; South, 5 to 9; Northwest, 8 to 12; Southwest, 9 to 13,
and
Pacific Coast,
4 to 8.
Favorable weather in many sections of the country the past week
stimulated retailer buying of some seasonal goods, but the dollar vol¬
ume of orders was slightly below the level of a week ago.
The vol¬
ume of trading in many wholesale markets compared favorably with
that of the corresponding week a year ago. The Fall buying season
has been prolonged in many areas and some retailers continued to
avoid
commitments
high prices in
many
for long-term deliveries last week.
Continued
lines restricted retailer buying to some extent.
on
a
country-wide basis,
taken from,
as
the Federal Reserve Board's index for the week ended June!
increased by 7% from the like
with
an
period of last
year.
increase of 21% in the preceding week.
26, 1948,
This compared.,
For the four weeks
26, 1948, sales increased by 6% and for the year to date
«!
1
K
-
-
r
-
stimulated by extremely hot days
here in New York, in addition to the advantage of an extra shop¬
ping day this
boosted
year as
the fourth of July fell
on
Friday in 1947,
department store sales last week and retail trade in
On M general.
According to
turned sharply
the current period.
Wheat prices sagged on hedge
was accom¬
Vacationers evidenced considerable interest in luggage and
at 258.25.
irregular
hair-waving kits
moderate decline in volume at beauty, shops.
sporting goods; both
by 7%.
REVERSES
weakness in grain and cotton
Bradstreet daily
&
a
ended June
sharp drop in the general price level in the
past week largely reflected
The
panied by
Sales of seasonal apparel
the corresponding 1947 date it stood
Chronicle)
Lower prices were
'!!!
PRICE
*
The substantial demand; for home
TREND
index fell to 286.51
With Stix & Co.
(Special
.
COMMODITY
UPWARD
of
hogs and lambs.
prunes,
flour, wheat, corn, rye, oats, barley, beef, hams, lard,
j; -With Goffe & Carkener
|
(Special
raisins,
'
,
Department store sales
Moving upward in the week were sugar, bellies, cottonseed oil,
cocoa,
a year ago.
were steadily purchased with fresh fish
and poultry continuing in
large demand. Fresh fruits and vegetables were abundant and rea- t
sonably priced and substitutes for high-priced meats and butter con-
rise of 11.7%.
a year ago, or a
-►
moderately
Cold cuts, confectionery, soft drinks and beer were in very large
demand along with other picnic items. Both frozen and canned foods
held corresponding week
and trade
other industry
was
j;
little
a
30 business failures; almost
in this area last year.
The next largest number of
25 in the Middle Atlantic States.
Only two other re¬
Pacific
The
or
service
all
;■
»
above the level of
July 1
dropped to 103 from the preceding week's 111, Dun & Bradstreet,
Inc. reports.
Total failures were slightly more numerous than the
82 of a year ago; they were almost eight times as heavy as the 13 in
the comparable week of 1946. Compared with the prewar level, how¬
ever, failures were only one-half as numerous as in 1939.
shareholders.
broadened
apparel.
tinued to be sought.
in the week ended
industrial failures
and
Men's lightweight Summer suits were heavily pur¬
chased along with slacks and sport shirts.
Numerous weddings con¬
tinued to stimulate the buying of some types of jewelry and bridal
Food dollar volume increased somewhat and
bank with closely held shares can
suit the convenience of these few
Many banks have
the other hand, that
suits sold well.
down because of materials shortages.
lihood that rough deposit stability
Olive
raw
various quarters.
23.3% higher than the figure reported
July 5, 1947, which; included the Independence
Day holiday and was 1,424,819,000 kwh. in excess of the output re¬
has ceased.... There is some like¬
VST.
points
for the week fended
.
"(4) Another factor to which
Individual banks must look for¬
ward in framing dividend policy
is their growth prospects.
For
the banking system as a whole,
[:
79
quiet side last week as many mills were preparing to close down
their plants for vacations until July 19.
KWH.' LOWER IN LATEST WEEK
The amount of electrical energy distributed
.
:
be
the Boston
Some resistance to current
and
of
demand
cloths displaying a firmer tone at the
prewar year.
ELECTRIC OUTPUT 90,873,000
net drop
a
.
.
must
- •.
1,627,600 tons of
tons last week,
1,732,2Q0 tons a month ago, 1,380,700 tons, or 78.9 % of the oldL
capacity one year/ago and 1,281,210 tons for the average week in
This week's operating rate is equivalent to
steel ingots and castings as against 1,716,000
tunities. The major employment of
funds for such banks is in invest¬
"
•
New York showed
was slow and market activity was limited mostly
inquiries, light offerings and scattered sales. - The de¬
cline in values reflected heavy liquidation in the July contract, con¬
tinued delays in export buying, reports of further curtailment in.
mill operations and selling induced by continued favorable advices
as to the new crop.
The market received some support at times as
the result of price-fixing against recent sales of the staple to the
CCC and expectations of good export demand early next season
under the ECA program.
Sales in the ten spot markets were reported
at 31,700 bales for the week, against 48,200 last week and 23,600 a
year ago,, ■ Textile markets were slightly more active with print
96.1%.
was
irregular last week with the trend
vy.^'
'
occasional
to
of 4.9
decrease
a
the result of good demand and
the week.
Mill
of the industry will be 90.3% of ca¬
capacity
week
and refined markets displayed a
cocoa continued firm.
Lard
as
generally downward.
authority concludes.
of this week the
raw
Hog prices continued upward
light receipts.
their orders within the next five weeks or so, the
will go far below the 10,000 goal and it won't be
It will be—of all things—because of no orders, the
railroads step up
in both the
Sugar prices
firmer tone in the week and coffee and
VS prices averaged slightly higher in relatively light trading.
freight
With all the talk about the need for more
stock
ownership
could
afford,
other things being equal, to con¬
sider a more generous distribution
of earnings."
/
other large users held to the sidelines in the hopes of lower wheat
independent freight car builders or private car-building
shops have no orders for delivery next January. The 90,000-car back¬
log at independent car shops is misleading. Of that backlog one com¬
pany holds 40,000. The rest of the industry has hardily enough busi¬
to carry them through
received
for both
There
Most
ness
33
;eports indicating larger-than-expected yields in the Winter wheat
areas.
Heavy rains over the week-end were reported in
Kansas where the harvest is about to
almost
bank
(129)
harvest
Indnstiy
(Continued from page 5)
<
,
CHRONICLE
selling and liquidation, induced
i by expectations of heavy receipts in the Southwest and continued
the
Federal
Reserve
Board's
index,
department
store sales, in New York City for, the weekly period to June 26, 1948,
increased 8above the same period last year.; This
an
increase of 18 % in the
June 26, 1948,1
preceding week.
compared with
For the four weeks ended
sales increased by 4% and for the
year
to date by 6%.
34
(130>
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
Thursday, July 8, 1948
ip 1929. Thus far in 1948, undis¬ •turing' companies. A Federal Re-j
tributed profits on artannual; basis serve compilation of financial data
appear to have remained close to based on the published reports of'
curred
(Continued from page 11)
the high 1947 leveL y\.v/' i'
principally ;r in trade as I "Expenditures
200 of the largest manufacturing- Y
for
plant,
as
was
about half as great in 1947 contrasted to manufacturing in¬ compared to those for
"The rise in corporate profits corporations in the country/ in¬
equipment,
as it was in 1940, but In the firstdustries. Throughout the past two have represented a larger propor¬ in 1947 resulted in part from? the
dicates that the average (median)«
quarter of 1948 it again became
tion of the total in the 4ast.quar¬ increase i^thq
years, but particularly in 1947, the
;(io^iv,yoiumeY of
large. The sharp rise in inven¬
ter of 1947 and thus far in 1948 sales discussed earlier and in part profit after income taxes was 7.8 >
rise in prices has accounted for a
tories thus far in 1948 may prove
than previously in the postwar from continued high profit mar¬ cents per' dollar of sales in- 1947 \:*
to be an important factor in the large part of the increase in busi¬
period. For the postwar period as gins, particularly 'for" :manufac- as! compared with 6.7 cents in 1946
business situation, for it has oc¬ ness inventories.
a whole, however, equipment ex¬
(Table II).
Table III
;
penditures
have
constituted r a
Table II
higher proportion of total expen¬ PROFIT MARGINS OF LARGE CORPORATIONS IN SELECTED'
MANUFACTURING AND TRADE INVENTORIES
ditures than in the prewar period,
YY;/YY:YINDUSTRIES;-;*
•"
i
(In billions of dollars)
reflecting the substantial amounts Ratios of Profits after Income Taxes to Sales or Operating Revenues ;■
On Hand
that have been spent to modernize
(In per cent)
Mar.
Dec.
Mar.
Dec.
Increase in existing productive facilities and
—Manufacturing4 31,
31,
1st Quarter the expansion of plants in some
31,
31,
Durable Nondurable Rail¬
Tele- Electric
1948
Industry—
1947
1947
1946
1948
lines
1947
during
the
war.
Almost
V'Y-v.
Quarter—
Goods
Goods
roads
Power
phone.
Manufacturing:
three-quarters of total expendi¬
1947—1st
y& 8.3 v: jDurable goods industries-17.8
-Y, 7.4 Y Y 11.0 YY 0,4.4
13.5
13.3
12.2
11.1
tures since the end of the war
0.2
1.1
Y,Y 2nd /—_
Nondurable goods indusY 5.7
;•
6.8 16.1
4.4
lY 8.9
y
FRB Reviews and Forecasts Business Trends
.
-
Y
.
.
•
have
dustries
/
15.4
..
YyY y/y Total
■
|
13.2
12.3
0.7
0.9
28.0
28.9
14.7
25.4
23.4
0.9
2.0
been
and
vanced
Trade:
for
equipment
>
equipment,
new
prices
have
Y
ad¬
Y.:
relatively less than plant
Wholesale
8.2
7.5
6.7
5.9
0.7
0.8
11.7
9.9
10.0
8.7
1.8
1.3
"Business/plans
caHf fpr a fur¬
expenditures in 1948 of ap¬
proximately 15% above the record
and 7.2 cents in 1939.
businesses,ate hotUdjusted'for inventory revaluation.
groups as electric light and power,
same
sulted
in
of
of
the
inventories
has
war
re¬
a
generally more bal¬
anced composition of such inven¬
tories If or
peacetime
purposes,
even though some concerns have
expenditures
equipment,
reached
half of
undoubtedly overextended their
inventory positions. Stocks of dur¬
ably
able
plant
on
which
had
and
already
record level in the first-
a
1946, has
consider¬
grown
to
have
goods
generally
creased relative to those
of
in¬
non¬
since
then.
Plans
in the aggregate,
nesses
of
busi¬
according
Securities and Exchange Com¬
mission and Department of
durable goods, and finished goods
have increased relative to raw
Commerce data, indicate expendi¬
tures for the year 1948 in excess
materials and goods in process.
of
"Business inventories as a whole
and in most lines, though
high, are
„
still
not
excessive
in relation
to
the scale of current operations as
compared with such relationships
prewar years. Such relation¬
in
ships, however, according to
ex¬
perience
are
not
in past business cycles,
unequivocal guages of the
adequacy
railroads,
"Plant and equipment expendi¬
tures: The dollar volume of busi¬
ness
those
1947; this would not
be true for all lines of business.
The rate of growth
during the past
12
months, after taking account of
seasonal factors, has slowed
up
:
"The
Y
....
plans
of
penditures
tures
of
enter¬
prises to complete their postwar
expansion
possible
programs
have
commercial
levels
sence
to
as
been
soon
as
facilitated
ex¬
they will be
addition, expendi¬
in
rise
and
1948
above
are
the
ex¬
of restrictions
con¬
tend
to
become
excessive.
More¬
over, the current inventory situa¬
tion differs greatly
among indus¬
tries. vw In
such
manufacturing
industries
as
iron
and
steel, nonferrous metals, and petroleum, for
example, current inventories are
undoubtedly
low
by
whatever
standard may be used, whereas in
lines of metal products, rub¬
ber, and textile manufacturing in¬
some
dustries
they
may
already
be
high.
equipment,
such
as
in
were
effect
in
however, have been
steadily increas¬
taxes
as
"The total dollar volume of
new
plant and equipment expenditures
of businesses for the
year
1947
as
a whole, as shown Chart I totaled
$16.2
billion,
about
twice
the
two
expended
than
75%
prewar
years
expenditures
increase
in
1941
and
above
were
1929, the
during which
largest. Some
in
expenditures would
probably be shown even if allow¬
ance
were
made
for
the
rise
in
construction costs and equipment
prices.
was
of
declines.
even
retained and
compared to 55%
after
reinvested,
in
also
concerns
undoubtedly
for
all
group indicate
favorable compari¬
more
a
today
as
led
some
companies
contrasted
in
to
years.
"These
data
profit margins,
it should be noted, relate to profits
after
all
corporate
much
on
costs
and
income
higher
taxes.
Since
tax ..rates
are
than they were
before the war, the relationship
between corporate sales and total
costs
now
exclusive
of
income
taxes
has
probably been more favorable
recently than in most previous
1946 and. prosperous years.
only 31% in 1929. The ready avail¬
ability of such funds in large
volume not only facilitated busi¬
ness operations during this period
but
Estimates
as
unprofitable
prior
business
profits
factor
affecting
has been the
crease
in
One important
this
smaller relative
overhead
as
undistributed
the
measures
1943, the previous peacetime
wartime
peaks, and more
than
J*
sharply
rose
approximately 10.5%, ;•
1% times the ratio in 1946 JJ
about
and
double
the
compilation
financial
of
data
in
rate
1929.
s
*
A
annual corporate •*prepared by the f
National City Bank of New York
and based on the published re¬
ports of
panies
profits
in
after
taxes
1947 varied
such
in
to
from
net
worth
30%
over
manufacturing industries
such
tries
as
~
3,100 leading com¬
that the ratio of Y
over
shows
\
in f..
as
cotton goods, lumber, and household equipment to less than 5%
;
:
>,
nonmanufacturing' indus- \
railroads and traction and
;
bus
transportation, and to deficits
:
for
the
manu-
•
factoring and air transport indus-
,
aircraft and
parts
tries.
"Liquid
direct costs during the period of
rising prices. Many concerns may
the
funds
operations,
able
assets:
In
retained
addition
from
to
;
current;
businesses have been
/
during the postwar period to
-
CHART IH
CORPORATE SECURITY ISSUES FOR NEW CAPITAL
cor¬
annual
porate profits, as shown in Chart
totaled
approximately $11.0
billion in 1947, as compared to
$6.9 billion in 1946, the previous
annual high; $5.9 billion in 1943,
the wartime peak; and $2.6 billion
CHART I
1947
and
in¬
against
to increase their expan¬
"Aggregate
worth, which
relationship
sion plans.
II,
extremely susceptible'
to
business
by
be
course
corporations,
of
profits since profit mar¬
have
gen e r ally
been
maintained. A higher portion of
these profits than in earlier years
,
to serious difficulties in the event.
ment in
panied by an unusually large vol¬
61%
of
these
of current with
prewar profit
margins; this is due primarily to
the exceptionally
small number
"Undistributed profits: The very
over
for
in
high dollar volume of sales of the
past two years has been accom¬
1947,
(Table III).
data
son
of
maim-
,
1947
Internal Funds
retained-
profits
corporations
gins
follows:
as
book value of the owners' invest-
an
has, been
represented
ar.e
but have since recovered a
good part, if not all, of their mid-
the first-half of 1947.
ing costs.
more
Y;;
mer,
tion expenditures in these indus¬
tries
available only at
amount
7
7.1
the first quarter of
1947, de¬
clined during the spring and sum¬
construc¬
on
inadequacy ;y of in¬ since mid-1947 by high volumes
management, and
undistributed
Inventory-sales ratios of new construction and
of ma¬ profits, as in prior prosperous pe¬
have not increased substantially
chinery and other equipment pro¬ riods, have provided most, of the
recently, but this is only because duction.
Such
construction
and new equity funds for business. In
Generally speaking, it is
only when sales level off, or actu¬
ally decline, that total inventories
6.6
15.5
in
1947
reflecting in part the ab¬
or
tinued.
14.3
3.2
,
service
ventories.
large increases in sales have
6.7
11.0
manufacturing companies of even moderate declines in 'the
and for large corporations in other volume
of production because of :
selected industries, as are shown the lower
profit margins that ac- Y
in the / accompanying
table, indi¬ company such declines. y
Y*
cate that profit
margins, for most
;"For corporations in the aggre* V
of these groups of
large corpora¬ gate the ratio of profits after taxes
tions at least, reached a high
point to net
before
establishments
pected
Quarterly
chemicals,
still involve sizable
completed. In
ume
business
petroleum,
and food
of
somewhat.
11.0
7.4
electric utilities (about 218
companies); 30 telephone companies.
1947 volume. The postwar expan¬
product tabula¬
expansion
4.9
factorings—105 durable goods companies and 95 nondurable goods f
companies;. Class I railroads (about 130 companies); Class A landiB >
sion programs of many companies
in such important broad industrial
since the end
13.2
6.8
.
NOTE—The industrial groups
.
ther increase in plant and equip¬
NOTE—Monthly estimates of the Department of Commerce. For
manufacturing and trade, figures are not additive since the former
are on a
revised, and the latter on an unrevised, basis of estimation.
These figures, unlike those used in the gross national
tions for all
5.1
■
ment
"The
Y"'
4th
YY 10.1 Y
,.6.7
—_
1948—1st
construction costs.
Retail
3rd
BILLIONS
OF DOLLARS
rate
.
•
VOLUME
BILLIONS
OF DOLLARS
4
4
COMMON STOCK
CHART II
PREFERRED STOCK
UNDISTRIBUTED
BUSINESS
EXPENDITURES
ON
NEW
PLANT
AND
BILLIONS OF DOLLARS
BILLIONS OF DOLLARS
ANNUAL
CORPORATE
PROFITS
EQUIPMENT
BILLIONS OF DOLLARS
20
ANNUAL
BILLIONS OF DOLLARS
12
12
20
ALL OTHER
BONDS
ALL OTHER
10
MANUFACTURING AND MINING
10
MANUFACTURING AND MINING
15
15
PER
CENT
PERCENTAGE
DISTRIBUTION
PER
100
-
10
CENT
100
6
10
75
75
(5
50
25
Co
1929
1937
1939
1946
194?
1929
1948
*
*
Estimates based
on
anticipated expenditures of business.
Note.—Securities and
©I Commerce estimates.
Exchange Commission and Department
All other
includes primarily railroads
an.4 °tber transportation, electric and gas utilities, communiRations, trade, services, and finance, but excludes agriculture,
1937
1946
1939
50
25
1947
?.}<
Undistributed' profits
in these years.
Note.—Department
were
'negative for "all other**
*
«
.v.
-
Sil
-
«
group
.
Y§
1922-27
of Commerce estimates, except 1947.
partly estimated by Federal Reserve. ; "All other'f
primarily .-agriculture,, construction, trade, finance**
Note.—Commercial and
transportation, communications, other public utilities, and serv- Issues of investment trusts
which
.
1935- 39
july
1945
march
is
includes
Financial
are
Chronicle,
1948
compilations
excluded in 1926 and 1927.
-
Volume
Number 4714
168
THE
CHRONICLE
FINANCIAL
COMMERCIAL' &
(131)
on. liquid; assets <as a source; higher prices or to meet possible tained- by manufacturing compa¬ both the 1935-39 and 1922-27 pe¬
financing. These assets had. future contingencies. In fact, some nies dropped off slightly;; after riods; the years 1928 and 1929
.been accumulated during the war increase in such holdings may be 1946,; while that obtained by pub¬ cannot be compared because of
years. In 1946 the liquid assets of! expected if sales and corporate in¬ lic utilities increased .very-sharply. the
difficulty of allowing; pre¬
draw,
4of
35
Wages, Prices and
f
.business
corporations
In the case of the Utilities such fi¬
;gregate
decreased
nancing
was
divided
almost
equally between telephone com¬
in the ag-J come taxes payable continue to;
$6.5
billion.i increase, thus raising the require¬
.Since 1946, however, such assets ment for liquid funds for operat¬
have decreased only slightly, by ing purposes, and if the disburser*
approximately
one-half
billion menfs of concerns that have com¬
(dollars
in
1947.
Most
the
of
in 1946, it will be
crease
de¬
recalled,;
liquidation of:
tax notes and other government'
securities to meet the high excess
.resulted from
the
.profits taxes payable that
.the
previous year's
year ons
cisely for the numerous financial
issues offered then.
During the
last
quarter
1947
of
the
dollar
panies* and those in the electric volume of new common stock is¬
sues totaled over $350 million, the
light and power and gas group.
"The* percentage of new corpo¬ largest quarterly volume of such
peted
their postwar
expansion
programs
are
substantially less rate security issues, excluding re¬ financing since the second quar¬
than their receipts.
funding
issues,
represented
by ter of 1930v
The proportion of
common
stock, as is shown in new issues 'represented by com¬
External Sources of Funds
Chart III, has been; larger since mon stock, however, as is shown
j
Table
V
has
been smaller
"As the period of practically the end of the war than it was in in
prior periods of prosperity. Since
mid-1945,
the
annual
average
capacity operations and of high
excess profits
tax was no longer!' prices has lengthened, business
in the later Summer of 1946 than
.leyied on 1946 corporate income. enterprises haver sought a some¬ ratio of the dollar volume of com¬
it was in the earlier part of the
Since early 1947 corporate hold-j what larger proportion of funds; mon stock to total new issues has
ungs of government securities have; from external sources, particularly been 16% as compared to 14% in postwar period.
.declined less rapidly and holdings; from sales of security issues. Total
Table V
.of cash have increased somewhat.! external sources provided
cor¬
CORPORATE SECURITY ISSUES FOR NEW CAPITAL*
"Changes in liquid asset hold-! porations as a group with 42% of
ings in these two years,and es¬ their total funds in 1947 as com¬
(Dollar volume in millions)
Common
pecially in 1947, have varied con-r pared with 33% in* 1946.
"Bank loans: Comniercial banks
Stocks as a
.siderably among different lines of;
.business. This is illustrated by the! have: been important! sources of :iv-.
Stocks
Percentage
data for large corporations in 14? business funds
since
mid-1946.
of Total
Preferred Common
Bonds
Total
Quarter—
•selected industries shown in the Outstanding total commercial and; 1946—1st
48
150
123
37
311
•article 'Industrial Differences in industrial loans of all banks in¬
30
239
227
320
2nd
785
income.
The?
since
in
decline
the
stock prices
n'l
Large
Corporation Financing,'
pages 623-33 of the Federal Re¬
creased
$6 billion during the
two-year period, a much larger
increase than had
"No large additional reduction
in the liquid
asset holdings of
[business enterprises is likely
even
curred in a
time.
The
keeping a larger dollar volume of
liquid assets on hand either to
meet increased operating require¬
ments for funds resulting
from
1947.
Further increase in the
seasonal
a
first-half of the
V
,
a
further in¬
NOTE:—Percentage changes computed from data in millions of
Detailed .figures may not add to totals because of rounding.
dollars.
'o.V
,
.
'Last
year's new bank loans to
business,' like those in* the pre¬
vious year, were extended to con¬
all
of
cerns
sizes
and
in
all
in¬
dustries/ Although comprehensive
data
on
not
are
the
currently
industrial
and
Size
available
char¬
acter of businesses that borrowed
from banks,
there are some in¬
available.
dications
mercial 'and
Thus
industrial
bariks in various'classes of
as
com¬
loans
of
cities,
is shown in the table, experi¬
enced
approximately
the
same
percentage increases
last
year,
indicating that the business loan
demands of a variety of differentsized
borrowers; were
involved.
Petroleum,
sales
finance,
and
food, liquor and tobacco compa¬
nies were important borrowers
from
banks,
large
while
many
small retailers and service enter¬
prises borrowed from the smaller
banks.
'
„
year
—
continued in large volume
1947
but
probably less
important relative to new shortwere
term loans than in either 1945
1946.; The
|
lower cost
or
bank
of
compared to security is¬
caused some concerns • to
seek accomodations, at least tem¬
loans,
the
cies.
"Security
issues:
as
sues,
Net
the
dollar
volume
of
new
issues
less
that of refunding issues and
less cash retirements of securities
much more important
sotirce of: funds for business cor¬
—was
a
,
,
porations5: in 1047 and early' 1948
totaled
$4.5 billion aS against $2.3
billion in 1946.
the
at
1947 this volume
Thus far in
1948
volume appears to have been
current
1,102
750
245
106
10
annual rate
about
3rd
873
606
175
92
11
4th
1,994
1,470
1,526
1,222
115
352
18
particularly
89
159
11
1948—1st
production. It folr
expansion of con¬
sumer credit to buy automobiles
Detailed fig-; and refrigerators and the like,
dollar
volume
was
slightly larger.
Mrs. Aitken
"Prospects
are
for
sustained
large business investment in fac¬
tories, machinery, and stocks of
goods throughout the remainder
of 1948
on
the basis of orders al¬
placed.
Business
enter¬
prises anticipate spending more
on
plant and equipment in 1948
than they did in 1947, and aggre¬
gate business holdings of inven¬
ready
tories and receivables still do not
appear high relative to the volume
of current and prospective sales
although such is not the
case
In such
distributed profits would continue
all lines of
"Business
a
activity.
profits are also likely
in 1948 than in 1947.
case
the volume of
un¬
late
from
the
end-of-1947 level.
decline has been
York
City
and
The
greater at New
v
Chicago
banks
than at the banks located in other
leading cities. This decline has
been in part of a seasonal nature;
in part the result of the abrupt
commodity price decline in Feb-
than
utility
railroads
on
Sales
companies
each
other
.
"Inr view* of their large
planned
Greenway &
Building, an¬
that Mrs. Vina P. Aitken,.
OMAHA, NEB.
Company,
nounce
—
Farnam
who has been associated with the
firm for
some time, has been pro¬
moted to the Sales Department.
Mrs.
Aitken
has
had
consider¬
able
experience in the financial
field having been in the Bond De¬
partment of one of the Omaha
banks before joining Greenway &
Co.
Wegener & Daly To Be
rapid
rate
It follows also that increased sav¬
ing in the form of savings bond
purchases, or in any other form,
inflationary pro¬
reduce the
will
Many of us forget that busi¬
ness is itself responsible for more
than
half
of the
total savings
cess.
in
made
the
country,
that
and
government is also responsible for
a large part of it.
Business sav¬
ings will "be; most, effective, if ac¬
companied by the postponement
of business expenditures for plant
and equipment which are not vi¬
,
tally necessary, and' government
savings will be more effective if
accomplished
by
economies in
government. *
(3) It follows also that an in¬
crease
in
Federal
Government
spending for the European Recov¬
Program and for defense, both
desirable from/ the standpoint of
our national welfare, is not made
ery
less
inflationary, but more so; by
the cut in the Federal income tax.
is essential to the management
It
of
supply of
our
money,
a
func¬
with which the Federal Re¬
tion
System is entrusted, that the
maintain in a period
serve
Treasury
such
as
this
excess
an
of cash
re¬
expenditures. Such an
excess during the first part of this
year
contributed in my opinion
materially to the slowing down of
inflation.
That surplus has now
been used up and there is little
nrosoect for any further surplus
this year. :
)
The preservation of prosperity
in this country and the continu¬
ance
of those institutions which
ceipts
over
all
we
upon
some
cherish
of
depends
recognition of
dearly
clear
our
these
fundamental
eco¬
nomic
principles. It depends also
upon
our
following the roads
which they point out to us with¬
out detours dictated by political!
considerations.
NY Stock Exch. Member
BOISE, IDAHO — Don F. Daly
York Stock
Exchange membership of the late
Arthur C. Weil on July 15 and
With Daniel Reeves & Co.
will acquire the New
First National
Bank Building, will then become
members of the Exchange. Part¬
Wegener
ners
&
Daly,
in the firm
are
Mr. Daly and
Theo. H. Wegener.
(Special
to
The
Chronicle)
Financial
CALIF.—
HILLS,
:* BEVERLY
Jr., has been
added to the staff of Daniel Reeves
&
Co., 271
South Beverly Drive,
of
members
Los
Field,
A.
Joseph
the
York
New
and
Angeles Stock Exchanges.
\
\
received
expenditures, business concerns
roughly
one-half
of the, new may increase their bank loans
rhoney
obtained : through- cor-l and make additional private as
porate security issues last year well as- public sales of securities
and thus far in 1948.
Railroads during the- remaining months of
Public sales of stock issues
as
a
group actually used!, more -1948;
money
"to
retire
outstanding may foe less costly as a result of
securities than they obtained from the? recent rise in the stock mar¬
ket.
The major part of business
issuing new ones.
"The volume of new money ob¬ external financing in 1948, as in
.
Staff of Greenway & Co*
in
large volume of purely financial
public
Mr.
„
twenties, the high despite probable higher cash
porarily;; through banks rather 1947 total. is probably by far - the dividends and corporate income
than through public security -is¬ largest annual volume of net-new taxes; Business holdings- of liquid
sues.
money ever obtained by corpora¬ assets- in- the aggregate, however,
;*
" :
:
tions through security issues.
Will probably not be reduced fur¬
; "Thus far in 1948 the business
- - :
loan volume of .the large member
"Manufacturing companies and ther. banks of the Federal Reserve
System that report on a weekly
basis has' fallen off somewhat
that
understood
"Life insurance companies have Wohlstetter will act as an indi¬
recently provided some funds to vidual floor broker.
business corporations by
actual
Interest
of
the
late
Carl F.
acquisitions of business plant and Boker, Jr., in Fahnestock & Co.,
equipment that are subsequently ceased on June 14th.
rented to the seller on long-term
Trustees under the will of Mor¬
lease.- The- legal power to pur¬ ton D. Hutzler in Salomon Bros.
chase such property has generally &
Hutzler,
became
a
limited
been acquired only recently, and
partner in place of Estate of Mor¬
thus far has been used almost ex¬ ton D.
Hutzler, limited partner,
clusively to purchase stores, of¬ on June 30.
fices, and factories- from large
Interest of the late Russell A.
profitable corporations.
During Ballou in Schirmer, Atherton &
1947 life insurance companies in¬ Co., ceased June 30.
vested in such property approxi¬
On June 30 Farr & Co., retired
mately
$125
million,
bringing as a stock exchange member firm.
their total holdings at the yearend to about $200 million.
y
rough allowance is made for the
of' the
by the Exchange July
is
It
15.
proceeding, at the
in history, adds
only to the inflationary process.
most
1946 and
considered
the
that
which has been
not add to totals because of rounding. *
the
not contribute
increased
lows
NOTE—Commercial and Financial Chronicle data.
may
of
expansion
the
credit which 'does
to
*Excludes'refunding issues.
to be larger
issues
additional
the
income
spending which is supported by a
expansion of credit and
further
equal to
1947.
Strictly comparable data on
net new financing are not avail¬
able for all prior years, but. if a
an
continue
top of spending out of
to add on
new
obtained
attain*
upward
(2) We cannot stop the
9
Conclusion
by corporations
through issuing securities—that is,
money
new products, or the
ment of greater efficiency.
ery,
5
;' :
than in 1946. In
")NTew term loans to business—
leaps with; a maturity of over one
in
j
incomplete price
recovery from those lows; in: part
the result of some repayment of
bank loans of large
companies,
particularly public utilities, with
the4 proceeds from private
and
public placements of security is¬
sues; in part the result of high
fourth-quarter profits of many
Concerns; and in part the result
of a more restrained lending pol¬
icy on the part, of bankers who
were
influenced
by
anti-infla¬
tionary fiscal and monetary poli¬
and
ruary
increased profits
and
increased production, the in¬
troduction of cost-saving machin¬
68
when-
during the first four months of 1948;
people
production per
more
upon
hour,
82
*
crease ill total loans
of the
income
upon
62
,
available, but available data for country banks indicate
pend
man
233
"Private placements of new cor¬
^Figures for country banks not
is
responsible for- the in¬
crease in production.
This means
hat increased wages should de¬
610
•
^Through June 2.
pro¬
are
1,237
~
.:^fEstimated.
the
crease
who
740
IV).
in
responsible.
Inflation
can
be
stopped if we increase production !
proportionally more than we in¬
1,552
ures
increase
an
movement of prices if we
1947, would probably oc¬
porate securities, principally debt cur during the last half of the year
\
•
Table IV
business
issues placed with insurance com¬ when
expenditures
BUSINESS LOANS OF MEMBER BANKS
panies, continued in large volume reach their seasonal peak."
V
in 1947; such placements reflected
j
Amount Outstanding *
of
substantial
(In Billions of Dollars)
Percentage Change itlie /availability
amounts- of
institutional
funds New York Stock Exchange
^ v
'< •
June
Dec.
June
Dec. 1 1st
' 1st
;
2.
investment.
Privately
31,
30,
31,
Half
Half
Year seekingWeekly Firm Changes
Type of Bank—
1948v 1947
1947
1946
1948^:
1947 "1947 placed-bonds- and notes, excluding
The New York Stock Exchange
term loans of banks but including
All member, total
*
17.0
13.8
13.2
* '
5
\29
has announced the following firm
refunding issues, totaled $1.8 bil¬
changes:
lion in 1947-,- 38%' of total debt
6.4
3
.31
Central reserve city
6.8
5.3
5.2
Transfer of the Exchange mem¬
issues;.wthia represented the same
3
"
28
6.9
5.7
Reserve city
5.5
7.1
bership of the late John A. Salter
proportion of the total as in 1946 to Charles Wohlstetter
13
'27
3.1
2.7
2.4
Country
!
will be
•J*
is
based
4th
use
in
(Table
upon
for
income
duction for which that segment
1947—1st
2nd
in
segment of our economy must
any
be
basis
sound
increase
an
28
nature,
year.
which
258
by business appears
likely in 1948 despite the decrease
largely of
The
public.
159
of bank credit
the
in which wages chase
prices upward without a gain in
;he real income of the consuming
490
part of the in¬
major
half of 1946 and the last half of
(Continued from page 7)
process
908
took place during the lasf
crease
though current holdings are still
large relative to those of prewar
years.
Business management is
previously oc¬
comparable period of
Prosperity Formula?
3rd
over
,
"Bulletin."
serve
Profits-What Is the
On King Merritt
(Special
LOS
N.
to
The
Financial
ANGELES,
Staff
Co.; Inc., Chamber of Commerce
He
(Special
was
previously
with Slayton & Co., Inc.
to
The
J.
Byrne
Chronicle)
Financial
LOS ANGELES,
CAL.—Albert
Mougin is with King Merritt &
Building.
Byrne With C. A. Botzum
Chronicle)
has
CALIF.—John
v
affiliated
J
become
with C. A* Botzum Co;, 210
Seventh
Street.
Mr.
West'
Byrne was
previously with Dean Witter & Co*T
I
36
COMMERCIAL
THE
(132)
In
the
&
FINANCIAL
of
case
Santa
Fe,
CHRONICLE
the
Thursday, July 8, 1943
1
Standard Oil Company of New
Dealer-Broker
"Load" is' made up as "follows:
Taxes
Recommendations
Other
than Federal
Income
(Continued from page 8)
Portsmouth Steel Corporation—
1—.U——$33.0
Equipment and Joint Fa¬
cility Rents ————.£"1.1'"
Bulls
railroad securities had a happy time of it in the first
The Dow-Jones average of railroad stocks ended the
on
half' of 1948.
Miscellaneous
——
period at 62.76, compared with 52.48 at the close of the year 1947.
The six months' gain in the averages amounted to almost 20 %£ At Preferred Dividend
the end of the half year the aver-^
Federal Income Tax Apage had advanced more than 50% first. six .months of the .current, v plicable < to >
Preferred *
the low of 40.43
from
established
in May, 1947, and was only six
points below the June, 1946, top.
Moreover, the second half year
started off auspiciously, with the
average at 63.94 at the close of
business last week.
Naturally,
the
action
of
the
averages tells only part of the
story.
The rail market is almost
invariably
of individual per¬
one
formances
with
cies "dm the
wide
discrepan¬
movements
>
various stocks.
of
the
The market of the
past six months, as in the last half
of 1947, has been no
exception.
While the Dow-Jones averages
going up 19.6% between
Dec. 31, 1947, and June 30,
1948,
•were
a
list of 40 representative
and
common
speculative
preferred stocks
gains ranging all the
way from little more than 8% to
more
than 270%.
At the same
marked
up
Dividend
year.
Out
the
of
41
stocks
listed
1420
6.7
Charges
Contingent Charges
2, Pa.
,s
nole
Oil
Gas
&
Dryclock.
*
<
Requirement--
data
are
and
Maryland
New
which
York
Richfield
on
have
Total
Exchange
followed, the" Less Other Income
Oil
been
South
647
2.8
best
Marshall
&
Ask
Co.,
geles 14, Calif.
close
dum—Lee
1948
of
to
27
Robbins
(2,427,000 shares)-—-—$21*
mid¬
the
at
of 272%,
This, how¬
Thus, last year's income account
special situation, cen¬
for Santa Fe on a per common
tering around reorganization de¬
velopments, settlement of the New share basis may be' restated sim¬
&
Myers
—
Higginson
year, a gain
South La Salle
ever, was a
231
Illinois.
Jersey tax claim, and the
rumors
many
possibility of a
merger offer by. Reading Com¬
pany.
None of the other stocks
as much as doubled in price dur¬
ing the six months. As a matter
of fact, during June, Central Rail¬
road
of
New Jersey
stock had
climbed as high as 39 %, only to
react
ply
as
follows: T
Per Share
merger rumors
Miles Shoes, Inc.
Maintenance
65
62
♦,
-
Broadway, New York 6, N. Y.
From the figures below it is
relatively simple to figure the ef¬
possible
Conclusions regarding the rela-*.
tive merits of individual stocks
on
changes
140
per
in
earnings
share
operating
costs
of
and
the
Of
showed
40
selected
stocks
that
substantial
21
changes in
share
per
Western common stocks.
two
named
The last
preferred
dividend
requirement.
rises
gains
half
Two of these
averages.
ferred
the
for
year,
were pre¬
(Chicago,
& Pacific and
Western Maryland 2nd) and two
were the major eastern carriers,
New York Central and Pennsyl¬
vania, which have been unpopular
waukee,
with
St.
the
stocks
mon
Mil¬ priced
stocks
Paul
speculative
invest¬
and
were
the
in
were
lowest-
of
rail equities so
that sharp percentage gains were
not too surprising.
In the case of
the Rio Grande common, however,
group
the sharp
rise
directly to the phenomenal oper¬
ating performance of the road in
Freight
rates
ing. These figures may, however,
be used together with more recent
figures in attempts to calculate
future earnings possibilities and
payers.
They were Atlantic Coast
Line. Great Northern, Louisville
&
Nashville,
Union
Pacific
and
others
10
were
Southern (2)__
it
that
had
rise late last
sharp
nouncement
dividend
the
of
particularly
Chic. & E. Illinois
year
on
large
an¬
extra
and the proposed
stockTwo other stocks, both now
recognized as being in the invest¬
ment class, were just about in line
split.
with
the
Dow-Jones
average.
Atchison, Topeka & Santa Fe and
Southern Pacific were up 19.8%
and
19.7%, respectively, in the
Nickel
Plate
both of which have
considerable
a
upward
trend
railroad
of
Erie
—
number
a
Under
continue
these
to
conditions
speculative issues
at
for
months
of
are
—
Ratio
Ratio
190
of Common Stock
26
65
57
1
17
36%
35%
77%,'
62
'
140
21
29
34
33
It ?!
27
156
66
59
137
11
8
141
61
47
117
20
4
43
4
86
26
33
63
12
11
38
42
10
2
40
14
130
44
34
83
30
39
74
'
36
3
7
36
32
88
15
27
34
28
32
£
27
u£
.
11
83
;
37
27
71
15
D
3
44
3
89
4
40
24
70
22
D
3 v
45 r
18
D
3"
:
80
33
24
65
109
45
35
88
30
216
95
72
181
35
1
44
100
16
126
48
36
93
20
13
68
1
85
31
80
;
33
84
j
28
38
7n
82
32 £
41
4
10
;
£ '
74
; 30
13
11
74
;
'
"
42
21
r
"T
18
30
32
67
?
1
'41
32
80
:j
75
1
68
6
78
23
24
52
8
33
4
"41
17
13
33
9
38
6
48
17
13
34
8
6
91
4
98
38
33
76
9
13
38
38
6
48
22
13
38
8
2
46
28
79
150
9
'167
62
51
125
32
10
37
30
75
44
28
79
~
55
53
27"
62
3
63
4
6
22
34
.
77 U
■
7
80
26
27
60
16
.178
65
60
136
26
16
%
36
j
i
i
£• £ 34 B
78
j
25
67
j
23
59
34
19
t
,
74
36
33
66
£|
£•75
10
33
4
I
;•
7
46
20
29
38
.
2
11
49
17
D
141
'
6'
18
City Southern (7)
Kansas City Southern
(8)
—
—
3
24
8
16
4
4
'36
61
2
69
20
16
40
14
15
29
90
4
101
30
23
60
22
19
30
23
59
;
53
stock
come.
the
Ratio
161
the
least
Com. Slk.
70
—
Great Northern
Kansas
prices will
21
"Load"
Oper
88
All
degree of fund amenta! merit.
present indications are that
26
.79'
that
common,
75
63
—
— _
and
7
.37
Chic., R. I. & Pac
showed gains of 50% or more in
Cinn., New Orl. .& Tex. Pac.
price in the first six months of
Colorado & Southern (4)the current year.
For the most
ern
62
106
Pacific
a
Maint.
78
-
fact
Trans.
)
Oper.
117
Ft. Worth & Denver City (5)
part, these were in the highly
is, of speculative lower-priced group of
The two outstanding ex¬ Del., Lack & West
course,
at
least
partially
ex¬ issues.
Den. & Rio Gr. Westernplained by the high price and the ceptions were Kansas City South¬
Union
of
j;
; ,f
Maint.
122
.Western Pacific.
Action
indi¬
of
Trans.
expense:
Total
Pass.
153
Gt.
—
There
attraction
relative
the
vidual stocks.
as
Bal. for
Per Share
Alabama
ing public for some time past. recent months, a factor that may
Chic. Gt. Western
Surprisingly, the other five that be accepted as contributing per¬
failed to meet the performance of manently to the worth of the Chic., Ind. & Louisv
Chic., Mil., St. P. & Pac.
the averages were among the con¬ company's stock.
sistent and fairly liberal dividend
knowledge
a
Revenues-
•
be attributed
may
exact
as
only on the
since wages.,
and traffic have been chang¬
Pre Tax
more
up
have
railroadj
figures,
following
the
on
than
showed smaller percentage 90%Chicago & Eastern Illinois
and Chicago Great Western com¬
than
did
the
Dow-Jones
nine
'
three
basic
based
not be
should
rates and to understand better the
50
the
of
"arithmetic."
earnings produced in the past
29
list, all Balance
time, one of the old investment of which were up more than 75% Federal Income Tqx*
several years by the wage-price
12
favorites, Chesapeake & Ohio, de¬ during the period, were Chicago & Earned on Common17
spiral.
As long as the latter per¬
clined from 43 M> to 37%, a drop Eastern
Illinois, Chicago Great
^Except for tax applicable to sists, it will continue advisable to
Of 13.2%.
Western and Denver & Rio Grande
The next
•v
.
fects
Passenger Revenues
' 21
Total Operating Revenues- 190?+
Transportation
Corp.—»
No. 74-^
Wisconsin Power & Light; CP'-"?
Analysis—Ira Haupt & Co., Ill
Scherck,
Richter Co., Landreth
Building, St. Louis 2, Mo.
of Common
the
when
>
Freight Revenues ———$153
Operating Expenses
Reading Balance
proved unfounded. "Load"
sharply
Street, Chicago 4,
Rudolph Wurlitzer Co.—Data—
0
to the
as
memorandum
for
Winters & Crampton Corp. -j-»
Analysis—C. E. Unterberg 8c Co.,
61 Broadway, New York 6, N. Y«
Also available is an analysis oJ|
Memoran¬
Corp.,
Crampton
& ;
Troster, Currie & Summers, 74
Trinity Place, New York 6, N,. Y«
Spring Street, Los An¬
performance
was
that
of
Balance
Central Railroad of New Jersey:
;. 50.6
The stock was up from 7% at the Per Share of Common Stock
£.£££££££:££:
Winters.
Corp.—Memoran¬
dum—Maxwell,
53.4-
Stock
Co.—Analytical
Mass.
3.8
•
the
,
.
description—A. G. Woglom & Co.;
Inc., 49 Federal Street, Boston 10,
,v.......
-
—
U, S. Finishing
Cen¬
on
&c
Bennett
—
6, N. Y.
Philadelphia
tral Illinois Public Service, Semi¬
6.2
—
Palmer, 165 Broadway, New York
•
Also available
2.0
Carbon Corp*
Analysis
—
—Memorandum
Securitiesx Corp.,
Walnut Street;
0.6
Deductions-
Fixed
Data—Buckley
Cohu & Co.;
York 5, N. Y,
Union Carbide &
1
(Millions)
Wall Street, New
Jersey
4
-3 0
28
18
50
11
1
47
30
83
j
82
i
'
D
J
35
j
69
7
81
34
29
67
5
9
.42
162
more
apt to con¬
20
195
77
67
153
33
9
40
3.
5
33
30
74
6
3
42
34
82
1
4
40
30
78
1
34
35
•
.
.
78
Minneapolis & St. Louis
31
10
9
23
41
2
46
19
16
37
Missouri-Kansas-Texas
Measuring Earnings Trends in
29
Minn., St. P. & S. S. Marie—
tinue in the lead.
72
6
85
34
25
66
104
9
124
52
42
104
15
5
42
252
8
272
91
82
187
52
33
33
30
69
77
21
109
50
38
£ 94
16
1
45
34
86
;
5"
274
105
78
199
38
29
73
j
52, ;
145
62
43
1
119
46
40
Nash., Chatt. & St. Louis
New Orleans, Texas & Mex.New York, Chic. & St. Louis
New York, New Hav. & Hart.
Railroad Stocks
(particularly
low
transportation
by the transpor¬
tation ratio) has been the greatest
beneficiary
of
the
wage-price
spiral.
On the other hand, the
railroad that had relatively high
operating cost and low revenues
per share tended to have its per
cost
measured
as
share earnings reduced by the in¬
flation of costs and rates.
As
between
large
a
share
per
with
and
a
high operating cost and
a company
with low cost ratio and small rev¬
enues
share, the latter fared
per
better than the former,
since the
leverage
does
not operate to produce good re¬
sults
except
under
conditions
former's
where
greater
the
expands
(due
increased volume)
and the- costs do not (as in the
primarily
years
gross
to
1941-1944).
The cfolio wing
tute
an
consti¬
attempt to help the rail-
toad stock investor and speculator
"arith¬
transportation
maintenance charges, to¬
operating expenses for 1947
Pitts. & Lake Erie,
9
21
69
33
44
16
17
41
IT
73
Louis-San
Francisco
76
■
31
66
1
36
36
79
i
7
2
48
34
87
£
i
4
12
37
82
}
76
j
78
j
<1
36
Cr
6
9
17
2
3
26
38
33
29
65
12
6
39
35
6
89
37
27
70
15
4
42
£
30
i
£194
»:.£ 54
70
/£ 30
'
25
USV-i
114
21
5
40
14
40
;>.:V 12
39
:
96
140
56
47
Atchison, Topeka & Santa Fe had
113
16
140
56 £
41
107
19
1947
143
16
171
67
56
132
27
operating revenues of $462,699,000, i.e. $190 per share on the
2,427,000 shares of common stock
hand
from
rail¬
and
after
Federal
able
to
the
come
for
preferred dividends
income
tax
preferred
applic¬
dividend
Non-operating in¬
as are net cre'dits
is credited
equipment hire and joint fa¬
cility,r$nts.
i!
21
49
14
5
34
48
126
28
13,
38
29i
.75
;
21
66
55
135
14
35
36
30
73
j
29
7
9
18
4
7
24
32
158
61
43
116
26
16
39
27
79
26
24
54
13
12
33
31
104
37
33
80
19
5
36
32
58
21
18
45
7
6
6
26
32
29"
—
3
42
37
40
32
95
"~9
Ill5,..
3
28
26
58
*3
24
10
9
21
114
(1)
90
19
Wheeling & Lake Erie.
operations
income
31
76
Pm
72
j
64
54
(operating rev¬
enues
less
operating expenses)
and pre-Federal income tax net
32
81:4
23
28
revenue
1
68
"Load" per common share is the
total "of all income account items
net
r:
£29.
184
for themselves.
way
>'
34
167
75
between
>
1
presumably speak
columns
78
15
138
the
...
79
63
right
in
.
138
149
ratios
c
39
*
83
22.
•Sf5
318
three
;
!
30
5
The
82
86
7
18
per
30
34
io
111
a
43
39
5
302
on
stock basis.
;£
5
45
19
££
share of
been put
common
|
1
D
16
For example.
have
54 1
'
St.
j
60
£23
.
27
32
118
21
12
D
-48
-
•102
9
i; 57
...
21
revenues,
expenses,
tal
29
3
51
Northern Pacific
Freight
revenues, passenger revenues, op¬
requirement.
figures
better-the
metic" of railroad shares.
erating
1
50
27
understand
D
23
■
outstanding.
company
revenues
to
79
114
(Continued from first page)
period with large revenues
(particularly
freight
revenues)
per share and low operating cost
ary
263
.
;
16
140
56
45
110
86
D. & H. RR. Corp. figures; D. & H. Co.
shares.
(2)
(3)
(4)
(5)
(6)
'mm
20
A,,
£,
£££■•■.■■£:
Hudson Coal Co. excluded.
Participating basis.
Priority basis.
Colorado & Southern Ry. Co. only.
Fort Worth & Denver City Ry. Co. figures; Colorado & Southern shares.
Figures not exactly comparable with the other roads,
(7) Kansas City Southern Ry; Co. only..
/ (8) Including Louisiana & Arkansas Ry. Co.
.,.
,
,,
.
.
,
£
,160
|
73
69
£
£
I
75
1
-i££ }
65
63
II
1
;38
|
168
Volume
THE
Number 4714
COMMERCIAL
&
CHRONICLE
FINANCIAL
one-third
World Stability
World Trade and
on
(133)
the
population depends
this industry for its livelihood.
The
chief
rural
industries
of
(7) Copper and manufactures— 'our rice, 7% of our pork and 29% Australia are sheep-raising, dairy¬
ing and wheat.
Australia pro¬
562 million pounds imported in of our lard were exported, annu¬
requirements,
as
well as 971
ally, on the average. The farmers duces one-fourth of the world
thousand (metric) Jons; of coarse 1947, valued at $159 million,
of this country and the nations supply of wool, which is the ma¬
(8) Burlap—no production of
grains, or about 55% of her total
as a whole
would have found it jor item of Australian exports. In
requirements.
In addition, Bel' jute fibers in the Unitted States. difficult to
get along satisfactor¬ .recent years, 55 % of her total ex¬
671 million pounds imported in
gium imported on an average
ily without this outlet -for their ports were accounted for by wool
about 30 thousand tons of dairy 1947 valued at $131 million.
agricultural
production.
Today and wheat.
(9) Furs—about 50% of the do¬ we
products.
produce
perhaps
one-third
Agriculture is the basis of the
mestic consumption is imported.
The
Netherlands, despite the
more farm products than we did
Brazilian
economy,
with threeIn
1947,
furs
imported
were before World War IX;
export surplus of dairy products,
Although fourths of the people directly en¬
is obliged to import some bread valued at about $130 million.
we have increased our population
gaged therein, and the output of
(10) Raw hides and skins—im¬ and have raised our standards of her
grains and substantial quantities
agricultural
products
ac¬
of
feed
grains.
In
1938,
the ports in 1940 valued at $88 mil¬ living, our increase in farm pro¬ counts for 80% of her total ex¬
Netherlands imported 755 thou¬ lion.
duction makes foreign markets an
ports.
The economy is charac¬
sand tons of bread grains, and
(11) Tin—with practically no important part of our economy. In terized by the predominance of
1,294
thousand tons of
coarse tin produced, we imported 103 1939 we exported 20% of our pro¬
export crops, such as coffee, cot¬
grains, the latter accounting for million pounds in 1947, valued at duction of industrial machinery ton and cocoa. At the time, there
about 73% of her total consumpand
implements, 16%% of our is a shortage in staple foods, such
$58 million'.
tion.
(12) Raw silk—entire supply agricultural machinery and imple¬ at wheat," rye, barley and oats.
v
The need for raw materials and
ments, over 20% of our motor Brazil is the greatest coffee-pro¬
imported, which in 1947 totalled
manufactured goods is reflected about 2 million
pounds, valued at trucks, more than one-third of our ducing country in the world, with
lubricating oils, and nearly one- practically the entire crop exby the following table of impor¬ $23 million.
fourth of our aircraft. In the same
tant imports in the Netherlands
ported.
In cotton output, Brazil
In addition, large quantities of
year, approximately 15%
of the ranks third in the world, with raw
(1939):
cocoa,
rugs,
bananas, fish and
workers in the motor vehicle, in¬ cotton
(In millions
bulking large in the export
other products are imported.
of U. S.
dustrial heating and equipment total.
In the manufacture of steel, we industries were
dollars)
working in one
^/Argentina is one of the great
are told over forty raw materials
way or another on exports.
The
Iron, steel and articles
(Continued from page 11)
bad.
But
ever
we
forget that when¬
foreign nation sells goods
a
services
or
37
in
markets, for
dollars,
these
eventually be used
our
which
it
dollars
must
in
markets.
our
obtains
That
is
sential, controlling fact.
the
es¬
There is
no
other place in the world for
the expenditure of dollars finally.
They
to
be shifted from
can
nation
nation, but eventually the dol¬
lars
must
be
spent
here.
That
1"
employment for us, fac¬
tories in operation for us, sales
for
us
of raw
materials, farm,
means
products
ply stated, then, every dollar we
buy from foreign nations does not
make
thereof
Implements, apparatus. _
Coal, coke, briquettes.*
64
57
from
about
takes
31
manganese,
are
ton of steel
fourteen pounds of
To make
necessary.
32
Timber
countries
different
a
and about 1% million
Dry goods and textiles..
27
tons per year of 50% ore, are
needed from abroad.
Manganese
Vehicles
24
comes
21
and West Africa and Brazil.
,29
Yarns
Chemical
_
products
Mexico, a comparatively large
fcouhtry, one-fourth the size of the
United States, with but 22 million
from
Russia,
India,
South
About 60% of our tungsten
be
imported,
principally
must
from
China and the Straits Settlements.
Chromium
comes
from
South
following
figures
indicate the
percentage of the workers in
some
other industries which were
producing
in
engaged
metals
Nonferrous
and
exports:
products,
23%;
chemicals,
16%; rubber,
15%; business and consumer serv¬
ices, 11%; food, tobacco and kin¬
dred products, 12%.
Britain, we have noted, is
greatest single importer in the
world.
We have noted also that
Great
the
people, most of whom obtain their Africa and the Philippines. Almost
in the average prewar years 31
livelihood from agriculture and
all of it must be imported.
nations found in Great Britain
mining, obviously differs from the
Without
imports
the
indus¬ their best single customer. Now,
countries already commented on.
trial
to maintain such purchases, i.e.,
economy
of this country
Yet Mexico, too, in order to main¬
would be seriously handicapped. to pay for her imports of food
tain a more balanced economy, is
In minerals alone we are depen¬ and goods, Great Britain must ex¬
obliged to import some foods and
dent upon large imports to keep port great quantities of commodi¬
substantial quantities of machin¬
our plants operating.
We are net ties of which she has a surplus,
ery and manufactured goods in
importers of bauxite, antimony, and this she does as indicated by
exchange for precious metals and
the following exports;
minerals found within her bor¬ cadmium, chromium, copper, lead,
Mexi¬ manganese, mercury, nickle, tin
titanium, tungsten and zinc. In
can imports (1940) classified by
addition, we are dependent upon
commodity groups shows:
imports of vegetable oil, hemp,
(■'i-S-/
(In millions
jute,
industrial
diamonds and
ofU.S.
many other commodities.
ders.
A list of the leading
-
dollars)
Machines, apparatus and
it- tools for agriculture,
all
In
the
countries
we
products.
Iron and steel
:i(§;
Woolen and worsted yarn.
Woven
woolen
.
;
goods.
of the total value
have
mining
industry,
the
over
pleased
of her annual
and
subsequent export of
the
to
their output abroad.
foreign
which
credit,
and finished
entire
world.
goods
We
are
goods.
to sell the world our
However, we do not wish
to
raw
take
materials
or
finished
ductive capacity, in order to sell
goods abroad. But under no cpn-f
ditions do
in
sent
Prosperity Dependent on Exports
wish to take goods
goods we have
we
the
for
return
to
away,
that
build
have
sources
up the re¬
been depleted,
to replace the manpower that has
been
used
the
or
productive
prosperity of the nations
equipment that has been worn
we have just examined is closely
out.
We wish only promises to
dependent on the sale of goods
"pay and gold. It is an unbeliev-*
abroad.
Thus, in fact, the wel¬ able
philosophy for a great nation.
fare of peoples everywhere is in
It is easy to be prejudiced on
an important measure determined
these matters. Prejudice is a great
by the
extent and volume of
The
trade
is
there
in
Actually,
trade.
world
world
great fusion
a
of
time-saver.
into
has
That
of mutual
they
a
program
common
economic
cooperation -helpful
are
to ligence.
some
not
on
The
sometimes
all.
It enables
to form
one
opinions without getting the facts.
individual interest of nations
the
advantages, but
the side of intel¬
destiny
seems
of
a
world
at the mercy of
economic illiteracy.
The most ef¬
the more freely trade
fective weapon that can be used
more it will grow in
against economic ignorance is not
volume
and
the more efficient
indignation but a wider diffusion
will be the utilization of the abil¬
the
men
and the resources of
is
It
world.
the
a
fundamental
examined, notwithstanding varied
-
areas,
and
make
extend
materials
raw
Incidentally, prior to the war,
concept of economics that the
the income Great Britain received
populations, industrial de¬
more
efficiently the factors of
from
investments
abroad
and
velopment or the importance of
production
are
utilized,
the
$22
the arts
shipping and financial services
agriculture and mining, imports
greater will be the benefits ac¬
Machines and apparatus
are
essential. In some instances, amounted to about $1,720,000,000,
cruing to society. Increasing the
for
other
uses
and
which was sufficient to pay for
imports of basic foods are neces¬
25
volume, as well as freeing the
vehicles
about 35% of her total imports.
sary to sustain life; in Others, they
21
flow of world trade,, tends to raise
Mineral products
—
lerid a desired variety to diet. Raw During the war and post-war pe¬ the standards of living of all peo¬
Products of chemical inmaterials are needed by industrial riods, however, Great Britain was
16
ple. World trade not only makes
i dustry.
forced to liquidate the bulk of her
nations; machinery and manufac¬
17
good neighbors; it makes healthy,
Vegetable products
tured goods are required by agri¬ holdings abroad in order to pay richer and
happier neighbors.
for vital imports necessary for
cultural and mining countries. In
Position of U. S.
victory arid subsequent recon¬
Conclusion
all
cases,
however, imports of
Despite the fact that the United
struction and rehabilitation. As a
In
conclusion, let us consider
States is the most richly endowed goods from abroad are the key
to desired balances in the life and result, in 1947 her income from
briefly some of the more general
nation in the world, possessing
investments accounted for but 3%
economy of peoples everywhere,
aspects of world trade, >
natural resources in great abund¬
with the added by-product, as it of her total imports, which, in¬
When foreign nations borrow
ance, wide climatic variations, and
were
25% less (in
were, of the most productive util¬ cidentally,
a great industrial productive sys¬
from us, the dollars they borrow
ization of the skills of men, and physical volume) than in prewar
must eventually be expended in
tem,
we
are
dependent upon
years.
This fact makes it impera¬
?
and
we
enables other nations to buy our
goods and services. We send our
exports. The prosperity of Argen¬
tina is related to these industries
ities of
Spirits.
be
food-producing
centers
of the
goods in return; We are willing
world. Thus, agricultural, dairy
to deplete our resources, use our
and pastoral products, and their
manpower and wear out our pro¬
by-products, usually exceed 80%
flows,
Cotton yarn.
Woven cotton
loans
dollars
must
present procedure.
our
nation,
a
the
receive
1
Consider
As
for
poorer,
nations
spent here.
Finally,
goods.
us
other
s
$78
and finished goods.
It
good busines for us. Sim-
means
basic
of
knowledge
such as this
provides. We need io
bring some new thinking into our
trade relationships with other na¬
conference
tions.
as
a
ing
Nothing in life is
so
sacred
nothing is so
the thing that jolts
annoy¬
rut and
as
us
out
of it. *:
,
5
..
the
resources
at
their
command.
(1) to maintain our
World trade, like a coin, has two
standard
of living and
(2) to
We have noted the need
[maintain the efficient operation of sides.
our
economic
system.
Without and desirability of imports; the
laboring over statistics, consider other side of world trade is ex¬
world
a
trade
list merely of the more
tant items,
In other words, every time
imports, or buys, there must,
necessity, be someone who ex¬
impor¬ ports.
and note how common
Ahey are to all of us.
one
of
ports or sells. This phase of world
(1) Coffee—none grown in the
trade is as essential and vital to
States.
2,498
million
some peoples and nations as im¬
•pounds imported in 1947 valued at
ports of food are to Britain, for
$600 million.
i
United
example.
tive
that
Britons
produce
more
times
than in pre-war
in order to maintain im¬
ports
even
and export more
at
their present re¬
duced level.
Thus, the production and export
of commodities is essential in or¬
of de¬
sired imports of foods, raw mate¬
rials and other goods from abroad.
Akin, but differing slightly, and
der to maintain the flow
the second reason for
the import¬
the American markets.
enable
foreign
goods,
and
farmers and
The loans
nations
our
to
buy
manufacturers,
producers like to sell
goods.
Factories run, men are
employed, and dividends are paid.
tori, 35 % of
our
tobacco, 18% of world,
and it
is
estimated
tional trade
are
futile.
If, how¬
ever, western civilization is now
confronted with its *s.upreme op¬
portunity to organize its
interests
under
manship for
common
economic
states-*
period of unprece¬
dented progress for all mankind,
then this meeting becomes greatly
a
important.
While the jungles of Africa may
down tomorrow before an
avalanche of Studebakers, Fords
and Chevrolets, while the teeming
millions of India may not eat a
breakfast
food
tomorrow ^halsi
not go
borrowed money is
finally spent, we may face some
economic problems.
'
Valued at $225 million.
World War I| has brought
"pops and crackles" as they pour
the cream, and, while the peo¬
ple of China may go through life
ignorant of the social advantages
When
a
nation has spent its
of using Listerine and Lifebuoy,
dollars and gold, the internal eco¬
nevertheless, I believe we are
nomic pressures in that nation
agreed that world trade is imper¬
may become intense.
In nations
ative to a stable and peaceful
dependent upon the exchange of
world, where peoples can live and
their goods for other goods they
work and hope with faith in the
need, the internal economic prob¬ future.
'
'
lems may be very difficult of
—«■■■■»•_solution. In the absence of loans
But when the
ance
of exports, concerns those
(2) Cane sugar—4,180 thousand
There are two major reasons for
fehort tons (one short ton equals
nations whose prosperity is di¬
exports.
First, the imports and
2,00.0 pounds) imported in 1947
rectly dependent upon finding a
exports of a nation must be equal
"Valued at $413 million.
foreign market for the bulk of the
in value.
That is, what is bought
) Paper and manufactures— must be paid for; the two must be output of the principal industry.
imports in 1947 totalled $345 mil¬ equal. Thus, in world trade, the This condition probably is found
or credit, the way in which for¬
most often in mining or agricul¬
lion,
goods a country buys from abroad
tural nations where industry is eign nations can obtain dollars or
(4) Rubber—no crude rubber or imports must be paid for by;
relatively undeveloped or unim¬ gold in order to buy from us
produced in the United States.
goods they need desperately is to
(1) Exports
portant.
1,56,7 million pounds imported in
sell goods or services to us, that
(2) Gold
The Philippines is one example
1947, valued at $312 million.
is, for us to import from them.
(3) Income from investments
where agriculture is the principal
Jt is said that when we buy
(5) Wood pulp—imports in 1947 :; (4) Loans or gifts
occupation.
About one-third of
goods from other nations, we help
totalled 2,091 thousand short tons,
(5) Services
the cultivated land is planted in
them to have employment and full
Valued at $245 million.
Imports
We may obtain some idea of the cash crops, chiefly for export. In
production. We help them to sur¬
of
exports
to
the 1940, sugar accounted for 40% of vive. However, it is said we put
usually account for about 25 per importance
cent of our domestic consumption. United States by noting that dur¬ the total value of exports and co¬ our own workers out of work, we
make our own factories idle, and
(6) Unmanufactured wool—364 ing- the forty-year period from pra for 20%. The Philippine out¬
million pounds imported in 1947 1900 to 1939, over 57% of our cot- put of copra is the largest in the we injure .the American nation.
,
If
nothing but world confusion, and
if faith and hope are dead, theri
these
discussions
on
interna¬
that Everyone
agrees
that would
tie
on
With Herrick, Waddell
(Special
to
The
BEATRICE,
Financial
J
.}
Chroniclf)
NEB.—Willard
P.
Sherwood has joined the staff of
Herrick, Waddell & Reed, Inc., 55
Liberty Street, New York City.
Frederick Whitlock Dies
1
v
Frederick
,
]
|
Simmond./Whitlock,
partner in Farr & Co., New York
City, and
a
member of the New
York Stock Exchange,
died at his
home at the age of 54.
;
38
THE
(134)
just the
to
Tomorrow's
the market looks
way
me now.
COMMERCIAL
'
.
i'fi
'i'fi
#
When I say
Markets
I don't know,
merely sloughing it off.
do know, for example, that
I'm
Walter
I
Whyte
Says—|
stocks
certain
have met
and
support in
groups
an area
where if
seems
a
a
By WALTER WHYTE 55
Market about
into
its rest¬
over
ing period. Expect renewal of
bull
trend
in
fu¬
immediate
ture.
*
*
❖
Writing about the weather
hardly ^appropriate for
column theoretically given
*>ver
to
ai
discussion of
a
condition where the
public
the (determined by odd lot trans¬
:buy actions) was • buying and then
CHRONICLE
.there is nowhere
(Continued from page 6)
where
have
I
seen
to
reference
the fact that the Association is not
obliged to
i
demand:
their prodr
pay money on
nowhere have I
seen
advertised
and
nowhere have
share
as
I
accounts
seen
adver¬
tising. which says that the Fed¬
Savings and Loan Insurance
eral
Corporation insures :by:
(a) Transferring the account to
another Federal Savings and Loan
Association
be
which
required to
also
will
not
demand.
(b) At the option of the insured
pay on
member, by paying 10% cash and
90% in debentures of the Federal
Savings and' Loan Insurance Cor¬
poration, payable in one and three
in equal proportions without
.years
interest.
<
Please bear these two very
selling if moves didn't de¬ portant points in mind:
everybody talking velop. This resulted in a gen¬
(1) The fact that a Federal
about the weather, who am I eral milling around usually .at Savings and Loan Association is
not able to pay its shareholder on
to snub it?
top figures where the public
;
demand is no indication of insol¬
was most active on the buying
s{s
❖
❖
with
'
•
,
side. Conclusion therefore
The item-reads:
"Savings
vency.
Let me give you a little
evidence
of
the
fact
Even in the
(2)
the
of
approaching the
Mr.
Cramer
pointed
their nearest
competitors, the savings banks,
have $10 billion, and that only
about two generations ago they
were
nearly
equal. / 'Here
is
Associations-are
mark,
out
that
$1
more
that
"American
the
in
New York State Savings and Loan
the
billion
Where
public considers these associations
have
we
lived
not
up
to
commented.
piece of ad¬ responsibilities,' he
'There is no reason why the sav¬
vertising material issued by a
local radio station, the radio sta¬ ings and loan assets of New York
tion listed its advertisers, one of State should not be as great as the
which is a Federal Savings and "savings bank assets.' ///;
-:V//
banks of deposit.
Loan
In
Association:
listed
a
it
was
"To 'correct' that situation, he
suggested, better and more adver¬
tising, more presentable and 'busi¬
ness-like offices, more intelligent
handling
of
customers,
higher
paid personnel, more aggressive
errone¬
either
by the radio
station or by the printer as First
Federal Savings Bank of Blank.
On Jan. 22,
1948 a ;hold-up of
the South Brooklyn Savings and
Loan
Association
place.
I
am
Branch
managing officers and 'many
things along this line'."
took
quoting the head-lines
from two New York
of insol¬
case
article
Banker" goes on "Referring to
fact
that the total resources
Ac¬
the U. S. Government."
;,
consisting: of a
account?)
The
;
Investment
and
City
was
Okay, now we've got the that
stops were being distrib¬
Weather«out of the weyi we
uted. It was the chief reason
can go back to the market;
why I kept hammering on
what makes it tick and where
stops and repeated warnings
it's going from here. /.Now.,
not to do too much buying.
share
counts," $19,187,767.05. This rep¬
resents the savings of /pur mem¬
bers. The safety >of your invest¬
ment is insured up to $5,000 by
the Federal Savings and Loan In¬
surance Corporation, an agency of
ously
im¬
indication as; ing £n investment
an
to:v;|the;'4exactv:,Mature /h£>thei7ac<-i'
counts.
and how to make/lose money.
But
Thursday, July 8, 1948
"Savings and Loan Associations Are Not Banks''
uct
they weren't going
tailspin, support was an
urgency, When such a thing
happens it means that buying
of better than average quality
is present. What was lacking
in this picture was that this
buying
wasn't
following
stocks up. Instead there was
555
FINANCIAL
&
papers:
What
"Thugs Get $8,000 from Queens
r
to Do
About
•>
•
:
•
It is
Bank."
more
It
L
'
v
.
■
well to criticize, /but
do about it is another
very
the Fed¬
what, to
Insurance
"Girl (Clubbed in $8,000 Bank
matter.
It would be most jtiffi-r
Corporation in no manner places Hold-up"
cult to convince these associations
the insured in a position where
Such illustrations can be found of our
sincerity and of the valid¬
he can require more than 10% of
frequently and
they
definitely ity of our fears. Their
supervisory
the amount of his claim in cash.
what makes it tick? H-m-m-m.
prove that the public actually is authorities have done
'I'
*!•
❖
nothing br
In an article written by George misinformed.
That's a good question. There
very little at best to curb the type
This distribution is still go¬ A. Mooney in the New York
of advertising that has been tak¬
Was a time when I could rat'Times" on Sunday, May 30, 1948,
Misconception Widespread
ing place. It is my conviction and
tie off a dozen replies to that ing on. What softens its ef¬ he quotes George L. Bliss, presi¬
To show you that the miscon¬
fect is the accumulation going
feeling that our banks are vcroly
dent of the Century Savings and
one, each one more erudite
ception of which I speak is not seeking what is right and -fair
and
on
during declines. It can best Loan Association of New York only present among our average that an uninformed
than the other. Now all I can
public is dan¬
be seen in such groups as City as
saying that
"Bankers, people .but also among those of
gerous to all.
do isj&tand: off ^ih^ dismays and
faced with a slow-down in the
higher education, I have in my
axitos, auto accessories, tires,
If Savings and Loan Assoeiaeither
refer
rate of growth of their instituyou
to some
posession a letter from a person tions at
some time are unable to
standard textbook or simply oils, coppers, steels and rails. tions, are embarking on a pro¬ who is a trustee in one of the out¬
pay on demand, and if the public
On the opposite side, groups gram of harassing savings, asso¬
standing universities of the United
shrug my shoulders. I've got
considers them banks, as 1 betieVe
like air lines, building sup¬ ciations by an attempt to belittle States and who, in writing to me
it! Why don't you ask your,
they do, the public can be hurt
the value of the insurance of ac¬ about a certain
matter, gives me and serious
plies, gold mining and amuse¬
results to banks cotild
broker? With market activity
counts provided by the Federal the
name
of
three
"banks"
in
ments
follow.
When a day comes that
predominate as poor Savings and Loam Insurance Cor¬
Whatit is,lie^should have lots;
Nassau
County.
It, so happens a
Savings and Loan Association
risks.
poration." He* made the assertion that two out of three of the banks
l">'
t)f time to give you the an¬
elects NOT to pay on demand*
in a staff bulletin, copies of which
quoted by the university trustee as it has
swer. Alright, how ytfe?ve got
a
perfect right to do,
All this leads to the stocks were made available to the press. are jSavihgs ahd Loan Associa¬
and John Q. Citizen walks down
that taken care of, let's go to
It would be my opinion
that tions./ I hardly believe it neces¬ the street in the
locality of your
the next question. Where's it you still hold. As individuals nothing would be further from sary to further prove that the
they act okay and so long as the truth. • Banks are however, Federal savings and loan group bank saying, "That BANK didn't
going from here?
pay me.
I can't get my money
they do, they should be held. worried because they realize that is representing its merchandise as
*
*
*
out," it will make more trouble
Of course the stops still ap¬ the tide has been coming in, that bank deposits instead of invest¬ for
banking than for Savings .qnd
share
the flow of money has been in¬ ment
accounts.
I
would, Loan Associations
C At
point J jshouldr
because you
ply. For a1 complete list of
creasing for various reasons. They however, like to quote a bit from arein al lot of technical stuff
obliged to pay on demand. I
holdings, purchase price and realize too, that there will come a an article which appeared in the
also believe that, as bankers, we
about dine cuts, radiant lines,;
stops, refer to last week's time when the customer will draw "American Banker" on Oct. 16, come
pretty close to having a.
more
than he deposits and they
legs <not the kind you pay $10 column.
1947, and which quotes Mr. Floyd moral
duty now to explain the
realize that they must
be pre¬ Cramer, President of Washington difference of the two
to see), triangles / and other
types of
More next Thursday.
Federal
pared to meet it.
With a high Heights
Savings v and institutions to the public.
terms familiar to chart read¬
Many
concentration in mortgages it may Loan Association of New York
—Walter Whyte
people lean on banks for guid¬
ers.
I would too, if I could
not be possible for some of these
City. Mr. Cramer, in addressing ance and
they might well have a
[The views expressed in this associations to continue to pay on the eonvention of the New Yprk
place these words in their
right to criticize us if we remain
article do not necessarily at any demand, and this will hurt the State Savings and Loan League at
proper
order;
I'm afraid/
quiescent.
■ /
•
time coincide with those of the public and shake confidence.
It the Chateau Frontenac at Quebec,
however; I'll put one of these Chronicle.
react
They are presented as will
unfavorably
against is quoted as saying: "We are the ; I hope that this talk will "be
taken very seriously by our hanks;
terms in the wrong-place and those of the author only.]
banks as well as against Savings only type of financial institution
*
vency the insurance of
eral Savings and Loan
.
-
"
*
^is
.
some
/eager reader will hur¬
and Loan Associations.
me to task. That
will lead \to involved • coire*
riedly take
spondence
Two With Peters, Writer
(Special to The Financial Chronicle)
discussions
and
DENVER,
and I'm anxious to avoid both.
Cranmer
So I'll
have
I think the
through resting, or
just
market is
say
and
COLO. — Chappell
Jack IS. Ormsbee
become
affiliated
with
Peters, Writer & Christensen, Inc.,
U. S. National Bank Building.
whatever It has been going
through, and will
Tteasons?
Max Nedwick
now go up.
I don't know. It's
Opens
With
Schweickhardt-Landry
(Special -to
Landry & Co., Hibernia Building.
on
Phillip Lyon Opens
(Special
'
Members
\
York Stuck. Exchnnae
New York Curb Exchange (Associate)
San Francisco Stock
14Wall Street
COrtlandt
V;
7-4150
—
to The
Chronicle)
Financial
ANGELES.
C A LIF.—
Phillip Lyon has opened offices
at 325 West Eightth Street, to en¬
gage
in the securities business.
:•
Teletype NY 1-928
Private Wires to Principal
San Francisco
r
New York 5, N. Y.
•
LOS
E.
Exchange
Chicago Board of Trade
Offices
Santa Barbara
Monterey —Oakland — Sacramento
:7/-/:-//
Fresno
banks
National
limited
has
United States
to
place none of their demand de¬
posits in mortgages and a maxi¬
mum
of 60% of their time de¬
In New York State, banks
charter axe similarly
posits.
under
state
31,
1947,
ciation in
has
possession a Dec.
statement of an asso¬
my
suburban district that
a
to $22 million in 11
years and whose growth has been
from $9 million in 1945 to $15
million in 1946 and to $22 million
grown
the- financial world is known.
but have the word 'banking'
in
even
With Wm.
(Special
to
WEST
Claude
Wm.
Building.
Financial
PALM
J.
S.
The
" Beeken
Chronicle)
BEACH, FLA.—
D'Angio
Beeken
Co.
is now with
Co.,; Guaranty
it,
invested
000
This
in
association
first
mortgages.
shows
$865,000
$2,851,000 in
government
bonds, but it also
shows
borrowed
money
in the
cash
sum
Dec.
on
its
and
Its dividend on
31, 1947, was at the rate of
of
21/2%.
Jn
hand
$2,200,000.
customers
in
the
due to
statement
sense.
.
Banker":
ican
Federal
is
"It
not
ciations.
date to be in
Federal
in
in the association with which I
so
presently
We
connected.
merely let the public know in lit¬
customarily employed by
tle ways
financial
other
we are
institutions
that
public
cial
as
Small
to
print
statement
banking
our
pn our
tells
the
If
anyone,
inquires
finan¬
ireaeier
as
.our
the public the difference between
bank deposit and a savings, end
-share. If the public knows
a
ment
is buying
ex¬
and
knows
plains that the customer is buy¬
time /invest¬
the insufr
is payable,
the banks,-
.
.
....
'
■
v
;,//
7
:•
,
v/?
■
7J/<7
'/'.V
G. Brashears Co. Adds
•
(Special
.
to
The
Financial
South
-
Chronicle)
ANGELES, CALIF.—Wil¬
LOS
of
ex¬
a
how
there can be no
danger to either the Federal' Savrings and Loan Associations:or to
ance
to
Associa¬
(I wonder whether he
;
that
run
dignified adver¬
acknowledging the place
Savings and Loan Associa¬
tions in the picture of finance,
but definitely and clearly -teeing
staff
tion."
cus¬
,
tising
of
Loan
,
Association
A., Waitkus
and
bank
of the
liam
Savings
the
recommend
plain the purposes and functions
a
course
is buying.
would
I
gaged in, we tell him 'savings and
banking,' and proceed to
which
vestment
tomer
what kind of banking we are en¬
loan
Loan
only
clear under¬
and
of
standing of the nature of the ion-
that we are a, -banking organiza¬
tion.'
can
be accompanied by a
that- it
is, for example, lettering
the front doors which informs
the.
investment
an
loan
in the banking business.
"There
position to suggest
Savings
shares but this
tion
am
a
their customers
to
neces¬
for example, that an -institu¬
even
put in print the fact
that it is in the 'saving and loan
banking business.' ' We do not do
banks of deposit «nd
Savings and Loan Asso¬
I hope that our banks
Willifind,^
sary;
:
listing the liability
technical
why- this in¬
dustry should not call its business
'savings ;and loan banking'/;/
I
quote further
from the *same
speech published in the "Amer¬
hours.
$18,775,-
a
I -can see no reason
date in
question showed $19,180,-
though most of them
not banks in
are
on
000 in share accounts and
between
All
,
name
hope that it may ultimately
by close cooperation
be followed
the. others »no.t only have such a
1947, a growth from $9 million to
million in two years.
This
same association on the statement
$22
1 also
today .that does not have a /gen¬
eral name by which its section of
in
Pacific Coast Exchanges /
Schwabacher & Co.
/
Financial Chronicle)
ORLEANS, LA.—George
Gagnet is with Schweickhardt,
E.
■;
The
NEW
P.
New
and
a
The Congress of the
I have in
Securities
;
which
cated.
'
Orders Executed
amount of mort¬
Federal Savings
Loan Association may make.
aggregate
gages
CHICAGO, ILL.—Max Nedwick
restricted,
the
yardstick being
has opened offices at 211 West'
based on the population of the
Wacker Drive to conduct a secjir
area in which the bank is Lo¬
rities business.
Pacific Coast
the
I know of
in the law which limits
nothing
G.
has
joined the
Brashears &
Co,, 510
-
Spring Street, members .of
the Los
Angeles Stock Exchange.
&
THE-COMMERCIAL
Number 4714
-Volume 168
CHRONICLE
FINANCIAL
chased
Outlines Steps Toward Currency
:
Multilateral
v
(Continued from
■
►were
,
that
the
the increase in
exports, must go to the Western
Hemisphere, although part can go
to other regions that may be able
to pay in dollars.
9)
page
pected.
problem!
whi<±i resulted in a restriction of
Imports.
But this level of *pro«4
js iar from enough in thcj
of Europe's needs.
Industrial efficiency in Europe must be
V/jducbon
past year almost
none
of
the
30%' increase
in
Western European exports went
increased and output expanded if
%
Europe is not
,
to remain
ciency economy.
•
v,
,,
a
defi-j
'A
,
to
for increasing their efficiency and
i
modernizing < their
production;
\'.They have devoted a very large
; oi; • theiry current -output 'M
capital investment in agriculfuira
». and
industry. - Despite the fact
.that the standard of living in most
«.of Europe is below, and in some
,1 countries considerably below, the!
i
v
prewar * level, •, restrictions
havd
been maintained on consumption
,
.
J. in order-to give preference to in-
Indeed, the exception -
jvestment.
.* 1 ally large
-has been
>
volume of investment
major factor causing
a
inflationary
,
pressure
in most Eu-
tVxopeaircountries. - In the past two
.i
the ratio of investment to
years
^-national, income
has
been
far
^greater in Western Europe than
even in... such
countries: as the!
,
'United States and Canada.
-
Western
In¬
.
^graun :should enable the European
countries to do this.
;1
It remains
nevertheless, for Euuse these resources
in
necessary,
to
rope
J projects that will increase output
promptly.
must
Preference
be
to investment that
will decrease the abnormal dependence. of Europe on imports
given,
>
.
f
first,
the Western Hemisphere;
second, to investment that
Will provide exports to the dollar
."from
!
and,
J
area or
f
parity to earn dollars may be ex¬
to :bther areas whose ca-
'
pected* to increase*
vj
oVS:0. ■
p
v
*
^
^
-3
< :;4
'
lowance
t
Increased Exports
"Even
a
considerable
increase
In ^ductioh; if ft can be attained
In the next few years, will not
enable the European countries to
raise significantly their present
.' standard of living. [ Part of thd
increased production will have to
1
replace their present abnorihal
imports.
The European countries
must give consideration to sup¬
plying 'themselves and Cach other
with'more- of the goods which they
'have recently been getting from
v
*
>•
J
'
*
the United States and other West¬
ern Hemisphere source
On th£
other hand, most of the increased
■
will have to be ear¬
marked for export.
There is no
.doubt that Europe has a will to
[ do ~this.' ~ In 1947 the volume or
exports of the countries of Westf
em Europe Increased by 30 % as
compared with J9.4(3; it is now just
below the prewar volume.
Th$
,-proportionr of. their exports to,ih+
[ dustrial production is slightly less
production
*
-
.
i
than before the war.
.
is
the
and
To strength-
price. This
this
for
made
factor
in
Europe
p their ability: tosurvive. in the ffcf
•;f|ure depends bn their capacity to
*
;
1
export. The export drive in the
United
Kingdom
has
become
something of a national crusade.
And in other countries, top, the
*
importance of exporting is recog'
by government and business
alike and the expansion of exnized
sports has become
*
■
r
a
major objec-
tive of national economic policy,
is not
to
enough for Europe
increase exports. The increase
In
exports imist be to areas, from
•ii But
it
which dollar
payments can be ex¬
in the period just
when the United
was
war,
and
Canada
the
in
were
reconversion.
of
Every¬
enormous de¬
rather crestfallen. 'Business is be¬
fact
countries
the
that
European
eager to restore
were
increase
an
in
exports to these
explained wholly
by those facts. The higher-priced
cannot be
areas
markets of Europe
gions
tractive
and other re¬
undoubtedly
were
than
the
more
at-*
competi¬
more
tive lower-priced markets of the
Western Hemisphere. But it is no
solution for the European pay¬
problem
dollar
deficit
have
to
with
the
a
large
Western
Hemisphere
with
and
other
with other
large surplus
the surplus
a
if
areas
must be financed
areas
terribly difficult here,'
they told me. I replied: 'Did you
coming
think the
former
could
situation
last forever?' In my opinion many
European
industries, by cutting
margins, by improv¬
technical, organization
down profit
their
ing
edy;
con-1
and
sometimes
remedy at all.
goods from European sources. But
if European countries are to sell
in the Western Hemisphere they
nied
a
tive to their Western Hemisphere
customers.
And—as I mentioned
is
is
not
a
accompa¬
.
government
their prices until they are attrac¬
it
preceded by internal fis¬
credit reform. For if a
or
cal and
will have to lower their costs and
it
Devaluation is not
unless
remedy
devalues
.
without
having been strong enough to stop
the current inflation, its action
will only add to the existing in*flation.
It needs about
as
much
earlier—if this should prove to be
energy to make a 'good' devalua¬
exchange rates ought
to be adjusted until they are ade¬
quate to induce the flow of Euro¬
pean
exports to the American
tion
markets'.
achieved toward international sta¬
necessary,
' v';. '
"Coming back to the subject, I
that before anything can be
say
again, I would utter a
Monetary ad¬
justment—devaluation—is not, in
every case, the only possible rem¬
caution.
of
prevent thqlieed for
one.
"But here
word
to
as
bility, Europe must attain inter¬
nal
financial
take
measures
eration of
new
stability;
it
must
to prevent the gen¬
inflation."
Status of Fuel Oil
(Continued from
this.impact and still meet full
restricted
un¬
8)
inexorably
requirements. ment
domestic
Availability
page
toward
last
of >
improve¬
an
winter's
fuel
oil
?
(b) • The oil industry cannot problem. Competitive alertness is
successfully assume the additional keeping the oil industry in the
foreiront of this nation's industrial
energy load that would be thrown
expansion. The production, trans¬
upon it
by another coal strike
You know and I know that the portation, and refining phases of
strike in the
early months of 1946
of the
greatest stimulants
to installation of oil heating. The
was one
the industry have achieved mar¬
velous results;The oil burn& Jfi-
dustry is facing more serious com¬
industry has struggled val~ petition from manufacturers of
to
utilize
petitive prices than they now are. iently ever since, trying to catch equipment, designed
'
'
'
other fuels.
Other steps may in some cases up with that abnormal impact on
The oil burner industry is mak¬
prove necessary but the first ones demand.
have to be taken anyhow.
(c) A war requiring substan¬ ing a direct contribution by de¬
"It has often been argued that tially increased drains of petro¬ voting its sales and advertising
emphasis primarily to the replace¬
Europe can never sell enough of leum products from the civilian
its exports for dollars, and the market would require not only a ment market. Burner repair men
are
attempting to reduce fuel
United States is held up as the restricted American consumption
oil consumption
by introducing
horrible example of a country that of petroleum, but would necessi¬
their
and
distribution
could come much
system,
to
nearer
com¬
oil
correspondingly
forced greater efficiency in units previ¬
to the coal industry to ously installed. Further, :I am - in¬
formed that your engineers have
with
the
Western
Hemisphere ropean countries' to sell export meet energy requirements.
made and are making strides in
must be financed by credits from
goods to the United States was
I ask you to continue the list of
achieving
greater
burner
effi¬
the United States and Canada—
less significant than their failure
possible disrupting influences and
The . results
of
these
as has been the case too.
to sell -export goods to Canada consider the effect of a railroad ciency.
been
the
from
Europe-Has
case—while
the
has
deficit
Europe Export ior Dollars?
wholly unwarranted
in .some
European
pessimism
countries
on
their capacity to ex¬
port, to the Western Hemisphere.
Hemisphere provides
The Western
Actually,
in 1947 the failure of Western Eu¬
and Latin
Can
I "There, is a
far
won't buy from Europe.
-America.1; In 1947 the
exports of six Western European
countries (the United Kingdom,
France, Belgium, Netherlands,
Denmark
and
Norway)
to the
Western Hemisphere
were
only
40% of their prewar proportion
receptive markets for in these same markets. If these six
imports from all countries than countires had maintained their
more
1947 the
before. In
ever
United
States, Canada and Latin America
in vol¬
In fact,
available
easily, and in the case of
imported about 30%
if
more
than before the
supplies
more
had
war.
been
prewar proportion
markets they could
in the dollar
have exported
$625 million more of their prod¬
ucts to the United States and $975
million
Canada
to
more
America.
Latin
As
you
to
and
the
see,
Canada and Latin America if the
failure of Europe to maintain ex¬
supplies could have been acquired
ports
without payment in U. S. dollars,
the volume of imports would have
Canada
been
greater. Such favorable
even
markets
than
to
America
Latin
even
was
failure
its
to
and to
marked
more
maintain
ex¬
ports to the United States.
European Costs and Prices
needed foreign exchange, for Eu¬
be found, no¬
where else iri the world. The task
ropean exports can
"I repeat,
the big 30b for Eu¬
rope is to produce and sell more
of European countries during the
goods in the Western Hemisphere.
next few years. is to get their; I do not say it is an easy job. A
share of. these markets, to pro¬
great many things are produced
duce the goods that can be sold, in the
Western Hemisphere at
and .to offer them at prices that
very low prices, on account of the
will attract buyers.
abundance of raw material and
"I believe it
can
be done. In the
the
five years before
the war, 14; of
the countries of Europe partici¬
pating in the ERR (Turkey and
Portugal omitted), supplied 20.5%
of the total imports of the United
large volume
of production.
"What has made European com¬
petition possible, nevertheless, in
the past?
Specialization in some
industries, and, in general, lower
cost of production, due especially
States. In 1947 these same coun? to low wages. A good deal of this
tries provided only 10.8% of the
advantage in costs has gone, for
total. The experience in Canada reasons—shall we
say political or
Latin
is
America
the
much
I
social?
elimination
do
of
not
advocate
social
these
the
serv¬
ices, we cannot go back in that,
but
other
of
means
restoring
Europe's cost advantage must be
exports in found and I am sure will be found.
1947 would have been about $1.8
"If the European, countries .are
billion greater than they were. I
to achieve; their objective to ma,ke
am fully aware of the difficulties
of Europe a. Self-sustaining econto European exports as a conse¬
omy with internal
balance be¬
quence of the building up of in¬
tween production and demand and
dustrial production in Canada and
the
war
their
dollar
.
Latin
America
and
of
external
with
the
ex¬
balance
between
foreign
exchange
receipts and
payments, they will have to find
States and of the lack of raw ma¬
some way
of making their ex¬
terial in Europe itself. I do not
ports competitive in the Western
arguethat : there isanything
Hemisphere.
The United States
magical
in
Europe's supplying has never been more
willing to
precisely the prewar proportion of
buy import
goods
than
today.
WesternHemisphere imports.- I Neither Canada nor Latin Amer¬
panded production of the United
do believe that Europe can do
better in the next few years
will concentrate on
far
ica
has
any
special
If it for importing- from
producing the
States
goods
that
preference
the
can
tate
a
stimulus
strike
tying up coal movement to
markets, curtailed steel availabil¬
like that a':
relaxation of export
another disaster
ity,
Texas
City,
a
limitations of petroleum, an un¬
usually severe winter as was ex¬
perienced last year, a maritime
strike,
ably
rr^ean
etc.
reduced
a
growth* of demand
of
rate
for
distillate
fuel oil in the future.
Conclusion
The
conclusions
in temporary suspen¬ discussion
now
sion, etc.,
changes, worked out in a freely
competitive, market, tyill inescap¬
The oil
appear
•
this
"of
self
-
brief
evident.
industry will provide al¬
My whole thesis at this point is
most 10% more petroleum in the
attention one ines¬ first half of 1948 than it did dur¬
capable conclusion—that the oil ing the same period of last year.
industry has and is straining tc Thus far, demand has grown by
its utmost to bring to the Ameri¬ a lesser
amount so that some res¬
can
public every possible barrel toration of abnormally low inven¬
to call to your
of oil that
can
be made available.
absorb
cannot
It
abnormal
any
shock to the energy
must, from" now
balance. Coal
on, take its full
tories haS been achieved.
inventory
Further
growth is needed to
supply problems
local
eliminate
at the peak of the winter season.
in energy re¬ Supplies will probably remain
quirements. Hence, it isn't only tight for some months to come.;
important in terms of national se¬
Greater reliance must be placed
curity that we stock-pile petro¬ on coal to
carry its full share of
leum but that we also stock-pile
the nation's energy load in the
energy sources that can be stored
future. Coal today constitutes the
in piles above the ground—coal.
cushion which must absorb any
share of the growth
willing and able to pay
[: eh ; their -balance of payments;
', European countries must not only same.. If these countries could
have supplied the same propor?
increase production, but raise contion of the imports of the Western
Isidri*ably the prop orti on of output
Hemisphere countries t as before
•"that is exported.
that
the
States
«*
there is
Will to export; Nowhere
'( are people more conscious that
they could ex¬
as
the
On
or
their customary trade connections,
it still remains true that so large
and
"I'
much textiles
port, I won't say at any price, but
certainly at a very comfortable
Europe.
trary, their own dollar position
predisposes them to seek these
39
•
ume
*-
as
Within
areas.
with active
cope
omy; and the flow of goods un- by credits
*
selling to the Western Hemisphere
Europe, to where there was an
latent infla¬ mand for everything, one of the
sellers'
market
ever
tion, some countries have found strongest
This sellers' market has
it desirable io keep goods at' home seen.
and to attract imports from other been gradually disappearing. The
areas as a means of dealing with
awakening was bound to come. 1
the pressure of excessive demand saw these same businessmen in
New York six months ago, looking
at home. But even when full al¬
ciated
♦
J- tier the European Recovery Pro4
than two years had been
more
process
.
•
for
after
ments
"The - continued expansion of
production in Europe will require
•the completion of this program
for rebuilding the European econ¬
i.
Hemisphere.
have myself seen business¬
Western Europe- who
"I
men irom
in trade with dependent and asso¬
countries are
conscious of the need
extremely
the
the
offering
right export goods and
right prices.
them at the
stead, the increased exports were
used in trade within Europe and
j
"The / European
'!■
y
.t
means
of
part
"During
light
.
This
greater
Winter
-severe
and the critical payments
.
;- ^
;
it not for the
Stabilization and
in
(135)
United
be
pur¬
Petroleum Supplies
;
and Domestic
impetus
abnormal
upon
energy
requirements.
Oil Burners
i
The oil industry is deeply con¬
scious
of
the fact that reports
the hard facts
of
regarding petroleum
supplies have a serious effect upon
the market for domestic; oiLburp^
ers. The oil burner industry gen¬
Joins Pearson-Richards
(Special
to
The
Chkonicle) h
Financial
ANGELES, CALIF. —
Charles A. Kent has become affil¬
erally has [ recognized the serious iated with Pearson-Richards &
nature
of fuel supply
problems Co., 448 South Hill Street. He
and
has
cooperated to a tremen¬
Your sales are reg¬
dous extent.
what
istering
must
declines
serious
be
from
both with respect to
to
last
you
year
LOS
was
previously
with
Leimert-
Krieger & Co. and First Califor¬
nia Company.
central heat¬
ing installations and space heat¬
With Hayden, Stone Co.
ers.
The proportion going into
William O. Pearson is now as¬
replacement of older, less effi¬
cient units is encouraging to an sociated with the New York Stock
oil
man.
These obviously
are
Exchange firm of Hayden, Stone
eliminating some of the worst oil
& Co., 25 Broad Street, New York
hogs in existence last year. I do
not
believe the oil industry can City, as a registered representa¬
advise
how
many
stallations it
can
additional in¬
thafi it can advise all other manu*
consuming
much they should
facturers of petroleum
devices
how
tive.
-
•
serve, any more
Bateman, Eichler Adds
(Special
LOS
to Th*
Financial
Chuonicl*)
ANGELES, CALIF.—Rob¬
on.
This is a responsibility ert VV Carey has been, added to
beyond that which should be as¬ the staff of Bateman, Eichler &
plan
sumed
I do
in
a
competitive society. Co.,
b^eve^ however, that
petitive
conditions
are
453.
South
Spring
Street,
members of the Los Angeles Stock
working Exchange.
40
THE
(136)
Our
Reporter
on
COMMERCIAL
(Continued from
By JOHN T. CHIPPENDALE, JR.
without
could
we
not
op¬
$20,000 in
railroad plant and equipment for
each man or woman employed.
As representatives of the own¬
mid-year investment demand failed to firm prices of Treas¬
obligations because the psychological and technical position of
one of uncertainty.
The fear of lower prices
.
which
He has invested
erate.
The
.
of
13)
page
He supplies the wheels,
go round.
ury
FINANCIAL CHRONICLE
.
for Treasury
obligations that came with the offering of Savings Bonds ers of the railroads, the investors
investors, has not as yet passed.
.
The decline this in their securities, it is our task
time is attributed to concern over "pegs" and the international to see that there is
enough money
situation.
Quotations receded again on light volume especially in the till after paying .necessary
in the eligibles.
The market for government obligations is about expenses to compensate the own¬
as "professional" now as it has been in a long time and this means
ers
and lenders
adequately for
the use of the funds they have
sharp movement on both sides on restricted activity.
to institutional
.
.
.
.
.
.
.
some $23 million of bonds with a maturity of more than five
and $7 million due in less than five years.
.
This is not
.
.
for stability in the market, when the stakes in the
Savings Bond drive may run a billion more or less. * . .
mented in
marketable
of
purchases
issues might 'be augthe end of the period, so that the
sizable way near
a
payments for market equilibrium may not be
reports indicate.
.
.
favorable
as
•
first
as
ket
through the
Bonds
15th at
least,
so
that subscriptions to
an answer
.
.
bids
when
practically
were
.
.
due in less than five years
by the money managers.
ried
.
.
the
gross
expecting
The election is
a
an
...
revenues
are
of
traffic
is
with
for
.
inti¬
the
securities that do not
marketable
let them
the
•
ciation
income
net
roads
that
In
same
.
even
looking for
.
of
year,
14cents
the
.
slightly firmer
.
money market.
as
no
.
,
♦
the
rail¬
priceless
important
a
an
defense, to be
eco¬
arm
pre¬
1942, the
the
railroads
of
prior
peak,
of the
were
It
be
/
;
r
will
0
be
issued
2.70%, according to maturity. They motives, and eight sleeping cars.
a
thoughtful
financially
more
an
per
last year, 1947, moved more
confused
They moved more
tons more miles than in any year
of peace—46% more than in the
this, it
as
revenue
with
the
investment.
on
prewar
take
in
peak
year
of 1929.
They
moved more tons of coal than ever
is not
rate
were
and
road
as
that the planned
ting
day by day cut¬
may leave too
margin performs a signif¬
of
cloth
the
small
a
icant
service.
fidence
and
has
If he
the
con¬
backing of his chief
executive
quired
will
be
officer, so that any re¬
cutting of expenditures
done before the margin
and
narrows,
afterwards, he
not
becomes one of the most effective
in
forces
to the
to
a fair return
who put up his money,
the plant or buy .the
securing
man
build
tools.
The
margin
for
vestor
must
become
greater than
it
is
today.
in¬
the
To the' accomplish¬
objective, budgetary
controls which really control cart
constitute one of the most impor¬
tant steps.
Your wise and experi¬
enced group can, and I believe
will, do much to make it a real*
Bennett, Spanier Go.
i
Contest Closes
CHICAGO, ILL.-—The experiof Bennett, Spanier & Co.,
ment
i 05 South La Salle Street, with a
type of appeal to the trading
new
fraternity seems to have had
very gratifying response.
In
an
oversized
postcard,
a
cir¬
culated
generally among invest¬
ment dealers, they offered several
prizes, totaling $200, calculated to
make the statisticians thumb their
manuals with renewed vigor.
Up to this writing, no claimant
appeared for the first prize
prospects than Portsmouth
Steel.
Three other prizes were
offered
"Why Ports¬
mouth Steel, common, is an out*
for: letters
entitled
standing purchase."
number
A
of
very
interesting
replies have been received, and a
of the winning letter will be
furnished on request after entries
have been; judged.
copy
SEC Invites Views
on
|
Proxy Changes
moved
before.
rules
has
and
invited
comments
and criticisms from all interested
parties to
July 30.
The
be
submitted
suggested
before?
changes of the?.
a corporation
SEC would permit
a stockhold¬
proposal if it is determined
such
proposal
was
made
merely for. personal motives.
It
management to reject
er's
that
■:
They suc¬ would also relieve
management of
without loss or the
requirement to consider a pro¬
spoilage, the greatest wheat crop posal if less than 3% of votes at a
in the history of the world.
And
previous annual or special meet¬
right now they are beginning to
ing favored substantially the same
move
the second greatest wheat
proposal.
Another proposal is an
of
cessfully moved,
For every
railroads
the
tons
than were ever loaded before in
any one year.
audience
dollar of gross
be
what they will do in
The railroads
the years to come.
operating
revenues
each
year, there must be maintained a
permanent investment of nearly
$3 in railroad plant and equip¬
/
any
record of the railroads is ir
ance
dollar
to provide for not exceeding 80%
Halsey, Stuart & Co
Inc., on
of the cost, estimated at
$2,200,296,
July 1 publicly offered $1,760,000
of
new
standard-gauge railroad
Louisiana & Arkansas Ry. 2%%
equipment consisting of two 4-1500
equipment trust certificates, se¬
ries C, at prices to yield 1.45% to h. p. Diesel, electric freight loco¬
above
will mature. $88,000
The certificates
to
only
transportation costs and still
efficient
service
certainly
Jan.
.
that
earnest of
to
clusive.
Equipments Offered
is able
come
better
evident
plish
low
cost
transportation,
earnings must come first; lower
is hardly necessary to point out
that this 6V2 cents in net income
year.
semi-annually
1, 1949 to July 1, 1958, in¬
The accounting officer
so to budget the in¬
expenditures of his rail¬
to detect the first sign
outgo.
who
is
railroads can earn them or attrac
them as investments.
To accom¬
But the
return
Louisiana & Arkansas
and
of $100, which was offered for the
name
of
any
steel stock with
observer
and
the
To such
accounts largely for the better tone in these
Some of these purchases have been made from
part
cloth
has
rest of this year.
...
the proceeds of sales of intermediate and
long eligibles that
early
national
that
The
there will be
cut that
greater margin between intake
a
Stability Means
Low Cost Transportation
than 6 Vz cents per dollar of
will carry through to net in¬
come, and this assumes that there
will be no shutdowns in major
traffic-producing
industries
the
attractive
,
the
fact
constitute
our
gross
imme¬
corporate loans and marketable obligations are available.
This is the important reason why the ineligibles are not
getting
too much professional attention.
On the other hand, Sav¬
ings Banks have been rather sizable buyers of the restricted
bought
the
more
.
.
long
.
further increase:
or
also
.
Insurance companies continue on the sale side and
diate reversal of this trend is anticipated as
that
order
of the accounts,
a
larger portion
operating ratio will
will
the war levels,
The Securities and Exchange
follow.'
probably exceeding 77%. On such
Commission has made public sev¬
a
The present peacetime perform¬ eral proposed changes in its proxy
basis, it is expected that not
they are of the opinion that the Cost of
getting these funds is going to increase.
They believe that
greater pressure will be brought to bear on the inflation spiral which
.
de¬
em¬
into
year
war
revenues
1948.
.
to obtain in the market and
this
of
nomic asset and
prior to the second
have increased beyond
high levels attained dur¬
ing the war, and, as previously
stated, may reach $10 billion in
v
;•" A
rates in the future with short-term rates expected to
go to iy4% by the fall.
These concerns have substantial amounts
.
of
$902 mil¬ stable industry can produce low
Lower costs
12.1% of gross. In 1943, cost transportation.
gross revenues increased to $9,100 can be attained only through im¬
million but net declined to $873 proved
operating methods
and
million, or 9.7% of gross. In 1944, technological progress. These ben¬
gross increased again
to $9,400 eficial developments can be had
million but net. dropped to $667 only through plant improvements
which cost large sums, and such
million, or 7.1% Of gross.
Since the close of the war, gross funds cannot be had unless .the
money
and
classes
the net income reached
until
out
Financial officers of many American corporations are
bonds,
even
faced with
Here is where the public should
be aroused to a recognition of the
fact
that the railroads are
not
gross
revenues
securities.
are
most
Financial
lion,
although less weakness is looked for in these securities
because subscriptions are limited to $100,000.
.
from
in wage rates.
With the present
wide disparity between gross and
net income, any addition to the
close to
come
greatest
During the
the last minute in order to pay for the Savings Bonds.. . Again
the bank-eligibles are getting most of the attention from this
a
operating cost
not be the end
increased costs.
on
railroads
ployees for
this year
In
1941,
translate
exceeded
They feel there should be selling of outstanding issues at that
time, because of additional interest that can be picked up by
will result in
increase
average
this may
the .story
mands
general
of
War.
to
gross
.
.
higher
come
control
gent
ment of that
And
v
The
net.
.
AAA;
to
Such a relative increase in oper¬
ating costs means an addition to
the operating costs of the railroads
of more than $3%
billion per
of
car¬
the
year
any
able
nature, are short-range buyers and sell¬
they too are giving greater consideration to near-term devel¬
opments.
They are concerned at the moment with the period
through July 15, since there may be an opportunity to make a fast
turn in the market.
Some of the "professionals" are selling on
strength, believing they should be in a position to rebuild holdings
the last three days of the subscription period. . .
NOTES
weighted
years
1929, for each dollar of gross rev¬ served and permitted to prosper in
enues taken in, the railroads were
the public interest.
Traders and dealers, by
of
of
to
low
a
World
and
.
may
1923
million,
INSIDE THE MARKET
.
several
costs.
a
of the railroads amounted to $897
fall event that will probably not bring about
any radical changes in debt management or money rates, but why
take any chances at this time seems to be the attitude now,
.
,
.
for
railroads ranged
$3,100 million in
1933 to a high of $6,400 million in simply aii aggregate of
private en¬
1926.
In
1929
gross
revenues
terprises to be1 regulated as a
amounted to $6,300 million.
But measure of protection to the pub¬
in that same year the net income lic.
There must be public appre¬
not unmindful that another
1/4 % certificate rate in the not distant future.
effect
yet
that traffic is
railroads
from
are
% of 1% which will remain in
fact
not
are
identified
revenues
increase in loans to maintain earnings
(the last) upping of reserve
requirements is probably just around the corner. *. . . Other
mild credit restrictive measures are also anticipated such as
They
are
Strin¬
of the railroads.
revenues
,
with
Volume
.
From
\
.
to
$10 billion, the greatest" gross in
history.
How does this record present high operating costs will
compare with the past quarter of aggravate the already serious fi¬
a century?
nancial problem.
difficult but also of rather questionable value.
This applies mainly to the deposit banks, and it is resulting in a short¬
ening of maturities, especially among the larger institutions in the
.
pace
factors has been calculated at 77%.
1948, the gross revenues of Amer¬
tions not only very
group,
rec¬
Comfortable
economic conditions.
Money market followers are giving more and more attention to
short-range predicting in the government market because of the real¬
ization that the confused conditions make long-term prognostica¬
holders
faced
railroads
ican
ers
services
striving for these objectives,
are
mately
V.
.
CAUTION
but
in
Yet
rates at which
support levels of certain of the bank obligations
have been revised, which might account for purchases of bonds
.
the
.
.
have
faster
than have the rates for transporta¬
tion services. Since 1939, the aver¬
since 1939 in these
Railroad
It could be that
group.
for
product of volume of traffic times
non-existent.
operation
much
a
that annum.,
* A .'.AAs a partial offset to the in¬
in a
comfortable
financial
position, creased costs, the Interstate Com¬
and until they are, you and I, as merce Commission has
authorized
management representatives, can increased rates and fares but they
never
regard ourselves as com¬ are less than $3 billion and fall
short of offsetting the increased
pletely successful.
Accordingly there is considerable talk that shorter maturi¬
days
at
The
ties of the eligible taxables were taken on by "the authorities in
weak
rail
of
You
management.
the
to the purchase of $7 million
of these securities matures in less than five years.
the
Costs
increased
broken down, and they
going to break down,
v
accounting officers head
the departments charged with the
protection and conservation of the
not
not
are
so
In
.
.
to
na¬
tional needs.
have
must be
we
.
•of bonds due in less than five years, by the Federal Reserve Banks
last week.
Acquisitions were supposed to have been mainly
in the tap bonds, since they were down to pegged prices, but none
.
improvements necessary
keep themselves abreast of
the
railroad
operation,
Financial Position
then there should be
to continue to make
are
the
the gloomy predictions
uninformed, the railroads
; : Despite
of
the cost of railroad materials
Not
.
invest¬
new
wage rate of all classes
oi
railroad employees has risen 75%
duty to effect
our
satisfactory
ord of net earnings.
A steady to buoyant Treasury market would seem to need no
help from the authorities, since it is reported theyv come into the
market only when support levels are approached.
Assuming this
to be so,
railroads
of
day tbat
by.
goes
age
NEW SUPPORT LEVEL?
.
conditions.
should have if the
we
each year with a
Savings
.
.
.
attract the inflow
ment which
And they
gaining in efficiency and car¬
are
invest¬ rying capacity with every
net
on
current
This return will be insufficient to
which the railroads render, all for
the purpose of closing our books
by institutions will not be affected by unfavorable price
trends.
under
time of Pearl Harbor.
and
is
in
compensation
It is believed in most quarters of the fi-
.
nancial district that the powers that be want a firm stable mar¬
v
only- about 4*/4%
ment
revenues
return of
a
onslaught on our traffic by com¬ and supplies has increased 94%,
peting agencies of transport, many while payroll taxes are now about
of which are subsidized by pub¬ 9% greater than they were in 1939.
lic funds. It is our job, as owner after taking into account the re¬
representatives, to obtain from cent reduction in unemployment
regulatory agencies fair rates of compensation tax rates from 3%
support operations last week
too much to pay
However,
gross
reduce
It
economies
.
of
represent
debt and lessen fixed charges.
It
is our obligation to combat the
invested.
RESERVE BUYING
bought
dollar
would
in
of
railroad gross revenues will findl
its way into net is the watchword
of the day in .your great part in
.
years,
each
and
.
The Federal Reserve Banks in their
Thursday, July 8, 1948
Financial Problems of Railroads
Governments
the market is still
&
in
gross
crop ever
known. i>;
extension of the data already in
is not all.
The rail¬ proxy statements regarding of¬
carrying through to net income roads now have a larger number ficers' and directors' remuneration
6V2 cents per dollar of gross, the of serviceable freight cars, more to include information on
public
net railway operating income, be¬ passenger cars, and better motive
payments made to them for serv¬
fore
fixed
and
miscellaneous' power—in short, greater carrying ices in other
capacities by the corcharges, would be about 10 cents capacity—than .they had at the
ment.
,
;
If in 1948
if/-*>
t •
.
j
<:
we
•'
•
do succeed in
'
* '
> '» I
And
i
this
*■*■»■»
*
•«
*
«l
»«*«••«
■*:
»
poratio.n,.
.
.
*
*
,M
■
li
*
,
Volume 168
Number 4714
THE COMMERCIAL &
FINANCIAL CHRONICLE
(137)
Indicationsf of Current Business Activity
Year
Ago
ASSOCIATION OF AMERICAN RAILROADS:
Revenue
i
freight loaded
(number
of
cars)
j^venue freight rec'd from connections (number
CIVIL
ENGINEERING
RECORD:
CONSTRUCTION,
•
■
;*.
Total U. S. construction———...
I
Private
of cars)
ENGINEERING
NEWS
•
,
•
.
construction
Public
construction
State
and
Federal
ZZZZZZZZ,
ZZZZZZZ
municipal
——
COAL OUTPUT
(U.
S.
.
BUREAU
Z
I
_______
OF
MINES)
Bituminous coal and lignite (tons)
Pennsylvania anthracite (tons)
Beehive coke (tons)..
:
.
.
BEPARTMENT
f
STORE
INDEX—FEDERAL
AVERAGE=100
TEM—1935-3!)
EDISON
output
FAILURES
(in
SYS
000 kwh.)
(COMMERCIAL
STREET,
BRON
RESERVE
ELECTRIC INSTITUTE:
Eectric
.
SALES
AGE
INC,
-
AND
INDUSTRIAL)—DUN
&
BRAD
_
COMPOSITE
PRICES
Finished
steel
1
Pig iron
(per
l
Scrap steel (per gross ton)
(per lb.)
gross ton)
METAL PRICES
(E.
&
.June 29
M.
J.
3.24473c
3.24473c
2.85664c
.June 29
$40.53
$40.53
$33.15
.June 29
___
$40.66
$40.66
$35.58
QUOTATIONS)
Electrolytic copper—
Domestic reiinery at
I
..June 30
!
Export refinery at
i
Straits
tin
(New
York)
..June 30
at
..June 30
f Lead (New York) * at————;L_—^
Lead (St. Louis)
;
!
Zinc
(East St.
at
..June 30
..June 30
_
Louis)
at
..June 30
STOODY'S BOND PRICES DAILY AVERAGES
I!
D. S. Govt. Bonds
Average
corporate
Aaa
-
Aa
I
Baa
Railroad
Public
Group
Utilities
Industrials
Group.
Group
MOODY'S BOND
U.
S.
YIELD DAILY AVERAGES
Govt. Bonds
Average corporate——..—.,—;,
-
Aaa
;
Aa
,
Baa
.
Railroad
Public
Group
Utilities
Industrials
MOODY'S
COMMODITY INDEX
RATIONAL
FERTILIZER
INDEX
ITY
Foods
BY
ASSOCIATION—WHOLESALE
COMMOD
GROUPS—1935-39—100:
■
Fats
Farm
■M
Group.
Group
oils
and
products
Cotton
Grains
Livestock
Fuels..
I; Miscellaneous
commodities
Textiles—
Metals—
Building materials
Chemicals
Fertilizer
drugs
and
materials
—
Fertilizers—_____
Farm
All
machinery
groups
RATIONAL
Orders
combined
PAPERBOARD
received
(tons)
Percentage
of
PAINT
.June 26
.June 26
;
.June 26
activity
Unfilled orders
®IL,
ASSOCIATION
(tons)
Production
(tons)
AND
.June 26
at
DRUG
PRICE
REPORTER
INDEX—1926-36
WHOLESALE PRICES—U. S. DEPT. OF LABOR—1926=100
All
.
*
commodities—
Farm
a—
products.———-T—-
;;
products
Fuel and lighting materials
Metal and metal products
:
i
•
.June 26
.June 26
—,
Textile
f
———
,
—
-Fbods_—i»^.U———L--——ii-—
Hides and leather products
—-J,—
—
.June 26
!june
23
June 26
.
June 25
'
—
—
Bluilding materials..———
Chemicals and allied products——
—————
.June 26
.June 26
.June 25
.June 26
Bousefurnishings goods
Miscellaneous commodities-——-—
.June 26
Bpecial groupsRaw
materials
—.
Semi-manufactured
Manufactured
All
..June 26
.
articles
products
..June 26
:
commodities other than farm products
All commodities other than farm products and foods
_
■
•Revised figure.
■
..June 26
..June 26
..June 28
41
42
(138)
THE
COMMERCIAL ' &
FINANCIAL
CHRONICLE
Thursday, July 8, 1943
protection of the
Export Control: Instrument of Foreign Policy
(Continued from page 4)
quarter,
exporters
drop from 4% in the
a
for
the
who
commodity: from
previous three months.
importers
Export Control
t;
N
,
for
European
Shipments,
.
Even before the European ReProgram was maue law, t^e
in
firm
orders
a
two
single
or
List
more
European
On June 22 the validity
period of licenses for most non^
Positive List commodities for Eiil
country.
covery
from
shipments
ropean
Commerce
<
hold
non-Positive
same
changed
was
90
importer * in
of
European country
a
from
omy
domestic
econ¬
unwarranted drain
commodities.
Second,
an
scarce
conservation of limited dollar
ex¬
h conventional ;export change abroad (much of it pro¬
license application to tne
u.
S. vided by the American people un¬
Department of Commerce snow¬ der the European Recovery and
make
will
ing
his evidence of order? irom
tne European importer, including
the
number
of
authorization.
the
ECA
Neither
other aid
programs), by prevent¬
ing exports at clearly out-of-line
And third, the tendency
import prices.
tne-. n.CA
to war d
reestablishment
of a
competition in
;
to
and international situation are
be effective, there
must I be com¬
pliance with the control regula¬
Peacetime enforcement of
export controls involves a num¬
ber of difficulties not present dur¬
tions.
ing the war, when shipping con¬
trols, : the
blockade?, the pro**
claimed List of Blocked Nationals,,
.
and
vent
censorship all helped to pre¬
unauthorized diversion- of
exports.
*
'
;
I
days to six months. Fi*
any other government agency greater degree of
nally, " the Department has pub-i will guarantee the granting of an loreign trade.-Although controls and enforce¬
The use of price criteria, which ment were both minimized in the
lished in Current Export. Bulletin export license simply | because an
country Group, iw
Procedure, incorporated in cur¬ No. 452 a list of commodities which importer in an ERP country has were applied to Positive List early postwar period, the exten¬
rent Export Buiifcun imo.
received permission from his gov¬ commodities promptly after Con¬ sion of export controls to Feb. 28,
This may be shipped to Europe under
program, which became eliective general license, that is, without ernment to pay for a snipment gressional auxnorization, has un¬ 1949, made it necessary to develop
March 1, iy48, is specifically o.e- filing a license applicat.on. These with dollars.
In granting export questionably aided in the cam¬ procedures for more effective en¬
The
licenses
for shipments
Department
of
It has forcement.
signed to impieaiexiX our foreign are commodities in easy domestic
to
tnese paign .against inflation.
policy in three important respects. supply whose export will not be countries, the Office of Interna¬ eliminated many gray market ex¬ Commerce is I developing proce¬
dures to: ,1 ii -i; f■
counter to the foreign policy or
tional Trade will adhere to its port trarusactions* andihas retard¬
First, to prevent tne movement
ed! the .ex-port of goods abroad at
to any European destinat.cn oi the United States.
established standards.v
- (1) Provide a proper legal basis
Typical com¬
for both administrative and crirpThe
modities on this list are tobacco
excessive prices.
goods w.\" ose shipment would not
European Recovery Pro
Since price criteria became ef¬ inal
action
contribute to our national inter¬ ahd processed motion picture film; gram is more than a > plan ifof
under
the
Export
est; second, to speed to^ Wesief i.
building tip the factories • and fective at the beginning of tne Control Act, by broadening tne
Export Control Under the
faritfs. and transportation systems year certain administrative diffi¬ authority of the Commerce De¬
Europe the materials neeaed for
European Recovery
have
become
clear.
At partment and the Customs Bureau
of Europe. >One of the purposes culties
recovery in a manner calculated
Program
£ of this effort is to reconstruct the first it was believed that, other to investigate and dispose of al¬
to avoid the uneconomical use oi
At the same time that policies network
of
international
trade things being equal, price would leged violations^ .Sanctions of the
limited European purcnas.ng
'rpower; and, finally, to insure an and procedures were being devel¬ that was in large part destroyed be a major factor in selecting li¬ export control law: may then be
adequate flow of certain essential oped to handle shipments to East¬ by the war. International trade cense applications for approval. applied to many of the documents
imports from Eastern Europe to ern Europe, the Department oi can be rebuilt only if private Administratively and technically used in the export trade, such as
Western Europe
and the United Commerce has been working ii; businessmen in all parts of the it has proved both difficult and export
declarations,
manifests,
learn
once
States by arranging for specific close conjunction with the Eco¬ world
again to dc burdensome to use price in this and bills of lading*.
- »■ J \
'*
manner.
nomic
Cooperation
Administra¬ business with one another*
(2) Establish more secure li¬
exchanges, of commodities. V
At the same time, however, it censing practices by reducing the
The licensing of all shipments tion to establish procedures whici
The one sure way to delay the
facilitate
to Europe now subjects to control will
shipments
undei rebuilding of the structure of in¬ became evident that price criteria possibility of 'forgery or altera¬
trade
would
be
to can be used very effectively to tions in the license document, and
important additional segments of the European Recovery Program. ternational
license
our
applications by keeping closer control of the
export
trade.
Unlicensed While the administrative details place all the ERP business in the eliminate,
have not yet been completed, the
show .clearly
out-of-line document within the Commerce
hands of the participating govern¬ which
shipments to Europe in the fourth
After rejecting such ap¬ Department and the Customs- Of¬
quarter (which, if shipped now, proposed organization of exports ments. The Congress recognized prices.
under
the program. will permit the danger of this action, and the plications,. the Commerce Depart- fices.
would be subject to the new pro¬
j-v
(>.'■ ■
«f;;*
(3) Establish an export "code
cedure) constituted about a third and even stimulate genuine pri¬ legislation clearly calls for the ment' has used other criteria for
of ethics."
of our uncontrolled trade, and ac¬ vate trade.
use of "private channels of trade'; determining which expo rters
Export licensing priv¬
counted for about a quarter of our
Exporters will continue to do to the greatest extent possible. should get licenses. Among these ileges may then- be denied tor de¬
criteria are the use to Fwhich the sperate violators of the canons oi
ill; .total exports. The most important business in the same way as ir/< We must continue to avoid reli¬
commodity groups affected by the the past. The European Recovery ance on government procurement commodity will be put when-* it proper administrative practice.
:
(4) Develop > 3- more effective
Country Group R Procedure are Program is not another Lend- whether by foreign governments reaches its destination and the
lilfS
textiles and machinery.
On the Lease* with the Federal Govern¬ or our own. It sometimes appears historical position of the exporter system, of.-destination control * to
in the trade.
I
'v
basis, of the fourth quarter export ment buying all the goods and to be the easy and efficient way
prevent transshipment.
Such ac¬
pattern, 30 % of our machinery shipping them to Europe. Nor is to carry on a grant-in-aid or a i A revised version of this reg¬ tion is particularly important ih
and vehicle exports would now re-, it a plan whereby foreign, goy-j loan program, and for that reason ulation,
published on May 19, connection: with' the European.Re¬
quire licenses, as against less than ernment procurement will be sub¬ it ' is insidiously tempting;
The 1948, as Current Export Bulletin covery Program;* j
1}
No. 457, states clearly and accu¬
1% actually controlled in fourth stituted for private trade.
]$RB legislation is based on the
Expand, v:insofar as funds
Only q few commodities, such belief that the use and strength¬ rately to the trade the govern¬ permit, the enforcement activities
quarter 1947. Similarly, the extent of control over textile exports as certain bulk foods and medical ening of private channels of trade ment's policy of preventing ex¬ of * both- the Commerce
Depart¬
would be increased' from 0.3 to supplies, will be purchased
by is an important-part of economic ports at out-of-line prices, and ment and the Customs Service,
the U. S. Department of Agricul¬ recovery, not only for Europe but calls on the trade, for continuing and recruit trained enforcement
•24%.
:
advice
onwhat - constitutes
a
There are a number of other ture and the Bureau of Federal for the rest of the world.
personnel
Naturally,
enforce¬
clearly excessive price.
r
ment of export control requires
commodity groups, including rub¬ Supply and sent by these agencies
Export Controls and Nondirect to Europe.
the
The rest will
closest cooperation between
ber, over which the Department
Consultation With Industry
European Countries
of Commerce exercised little or be ordered by the private im¬
he Department of Commerce and
In
no control before March 1.
preparing-. Current Exporl the Customs Service.
Since porter in Europe and supplied by
Although? this discussion
has
a
Even with the limited facilities
large share of our exports of the private exporter in this coun¬ been primarily directed to export Bulletin No. 457, as in the devel¬
-these items goes* to Europe, the try. All arrangements for the so¬ controls as they affect the eco¬ opment of its other policies and in the past few months a number
Country Group R Procedure brings liciting of orders, the requesting nomic recovery of Western Eu¬ procedures, the Office of Inter¬ of serious violations of regulations
the
Department
aciopiea
iar-reacning control
known
nor
inca>urt
tne
as
-
,
,
,
.
?
t
.
.
..
'
.
.
■
.
-
.
.
degree of control' of export and import licenses, and
shipments "Of these Items, I exchange permits, the shipping
amounting to over 40% of U. S. j and; storing of goods, and the payexports in the case of rubber.
ment for individual shipments will
■
be initiated and carried through
Country Group R Procedure
jn private channels of trade.
During the initial period of
Exporters who have been doing
Vlll; Country Group R control, most business with Europe in the past
commodities in easy domestic sup¬ will continue to solicit business
ply were permitted to move freely through their regular agents and
a
considerable
overt
.
_
>
to
Western
Europe. License applications for such destinations
have been speedily processed—
generally within a week or ten
days after- receipt.
•
I
At the same time, the Department
Commerce
trated
,
of
on
the control of shipments
■II
'
ill
concen-
consult
with
the ECA and
other
agencies of the U. S. Government
A newly es- and decide which commodities
to Eastern Europe.
tablished
has
subcommittee
-
of
the
be paid for with funds made
Department's
Interdepartmental available by the United States to
Advisory Committee has reviewed stimulate European recovery. The
license applications for Eastern
European importer will
obtain
European exports on a case-by- permission from his government
case basis.
Its purpose has been to
exchange his own francs, or
to determine general working crikroner, or lira for U. S. dollars
teria
for
licensing
to Eastern that have been furnished by ECA
Europe which will be flexible to his government for buying
enough to meet any change in the goods from the United States uninternational situation. Although Aer the recoverv urogram
rapidly as possime, many cases
have
necessarily been delayed
pending major policy decisions.By the end of May, however,
the
log jam
ern
Europe
Department
trade—had
major
the
European
will
the
The details
governments
be enabled to keep account of
licenses for East¬ funds that are spent.
— disturbing . to
the of this plan are now being worked
no. less
than to the out. The important thing to re¬
been
policy
a
broken.
issues
shipments
fied, and action
at
the Economic Cooperation Admmistration in the United States and
on
such
continue
can
#The
concerning
have been clari¬
on licenses should
rapid rate.
In addition, the Department has
several steps
to simplify
taken
rest
the
of
watched
closely
the Depart¬
by
When exporl
ment of Commerce.
quotas are established for scarce
commodities, the Office of Inter¬
national Trade acts as claimanl
for the needs of the
countries not
participating in the European Re¬
In order to carry
ances
out the assur¬
given by the then Secretary
Harriman at the
Commerce
of
inter-American conference at Bo¬
gota, a new position of Special
Assistant for Latin American Sup¬
ply Problems has been
tary
created in
of Commerce.
That official
•v-wawvy'W tr V.
b>
indus-
lected
on
to
the
advise
the
Department
administration
of
By
mid-May many panels were
in process of formation, and meet¬
ings had been held by represen¬
tatives
of
about
20
commodity
Additional panels
groups.
are
be¬
ing organized
in other
To
as problems develop
commodity fields.
equitable trade repre¬
the panels, nomina¬
requested from national
assure
sentation
to
are
on
for
importance of bal¬
in the economic re¬
of the world.
the
phasizes
anced exports
covery
Price Criteria in Licensing
Another
export
of
of inflation.
Public
Law
in
this year
rising pres¬
policy
control
has resulted from the
sure
Policy
major" innovation
In Section 3(b)
395,
approved
on
tional
exporters/
ropean
Recovery
Plan
fror4 his
by
this
legislation.
instituted
independents,
and
exporters
being
loop-
to the letter and
spirit of the reg¬
ulations in the future.
In
the
tion
current
unsettled condi¬
the
of
world, export control
indispensable instru¬
ment for protecting the domestic
economy from
the pressures of
abnormal foreign demand, and for
systematic distribution of those
scarce materials available for ex¬
port.
I.
remains
an
The full cooperation of the for¬
eign trade community is required
to achieve the broad objective of
export control — a balance: be¬
tween
the
needs of the
domestic
the requirements of
economy and
our
foreign policy.
Two With Herrick WaddeU
(Special
to. The .Financial .Chronicle)
OMAHA, I. NEB.i—Albert^
D.
Becker of Columbus and Clarence
in various geographic areas of the
H. Wittmann of Fremont
country.
nected
made
of
to
Every
inform
current
cussed
at
effort
the
resentatives
is
entire
problems
the
panels, and the
to
meetings
names
through
Compliance
as¬
First,
now
eliminate
measures
should
loles in existing procedures, and
•esnlt in more general adherence
being
trade
be. dis¬
of
these
of the rep¬
whom
the
If the export control
quired
by
the
•».
policies
present
re¬
domestic
are
con¬
with Herrick, Waddell &
Reed, Inc., 55 Liberty Street, New
York City.
,1,1 ;-.v'
I
'•"i 7 "I'IP'
A. E. Weltner Co. Adds
•
(Special
trade
counter-inflationary
The
begun.
well as new^
comers, trade association members
and
been uncovered, and prose*of such violations have
•utions
as
may present its views.
authorized
These panels supplement but do
member is that whatever method the use of price criteria in licens¬
of accounting and disbursement of ing
exports, "either * by giving not. replace the long-established
funds is worked out, the European preference among otherwise com¬ Export
Advisory
Committee,
importer—not the U. S. exporter parable applications to those which which in recent months has met
—will initiate the first action in provide for the lowest prices, or , with increasing frequency to dis¬
requesting permission to use EGA in exceptional circumstances, by cuss the broader aspects of export
dollars to pay for a shipment.
fixing reasonable markups in ex¬ control which cut across commod¬
11;
It should be emphasized that port prices over domestic prices." ity lines.
Dec. 30, 1947, Congress
Three
nave
export
American
tated
benefited
private
be
specifically responsible
assisting members of other associations, regional bodies, and
states in their efforts interested individuals. The panels
to
obtain
material,
equipment, are then, selected, in such a man*
machinery,; etc. in short supply. ner that adequate- representation
is given to merchant exporters as
In acting as claimant for the
well as producer exporters, small,
non-European countries, the Of¬
fice of International Trade em¬ medium, and large firms, tradi¬
is
pects of export control are facili¬
being issued to
with
dustry. Commodity advisory pan¬
els have been and are being es¬
tablished, from which small work¬
ing committees, on a commodityby-commodity basis, will be se¬
tions
jippnses),
now
has
Trade
consultation
the Office of the Assistant Secre¬
Country Group R Procedure. The
licensing staff has been increased. the United States exporter who
Single licenses (multiple consignee receives a contract under the Eu¬
are
national
controls in their respective fields
Program.
covery
distributors abroad. The European
importer will consult with his
government, regarding the need
for a particular product as part
of the recovery program.
Then
jjjg
European
government will
foreign trade needs ol
the world are also
the
rope,
.
to
KANSAS
A.
The
Financial
CITY,
Chronicle)
MO.~Charles
Fordyce has. been added id
staff
of
A.
E.
Weltner
&
the
Co,., 21
West Tenth Street.
Two^With Gill Associates
(Special
to
The
Financial
Chronicle)
TOLEDO, OHIO—Paul R.
Hath¬
and Ray H. Miller have been
added to the staff of Gill Asso¬
away
ciates, Inc., Hotel Secor.1
(Volume 168
COMMERCIAL
THE
Number 4714
.
currency,
-una
Observations
(Continued from
cies
5)
page
.«•'
France availed itself of
law by which, inter alia,
dom in enacting,
toreign curren¬
Indian Government imposed a ban
;
^Anri^nf^heveal-
involved, he corrects what lias always seemed to the writer
the
as
a
miscomprehension by many security analysts.
The very
claborate detailed and clearly set-forth Wiesenberger data on man6 im
of gold into the
agement results should be particularly appreciated because of the Crowh'Colony, in ordlu to protect
bECs pronouncement of last .April bllegmg that certain trust sales th forfeign exchange reserves and
literature have been misleading in containing charts and graphs tQ
prevent premium sales and
which balloon the trusts real actual financial performance. ^
"
smuggling of gold to China.
t;sk
dollar, the escudo and, later,
the
Swiss franc.
By that law
the
LXriSriit®rtation
Combining
®
♦
„
.
.
Copious
planation
of
,
,
,
,
,...
.
,
^.
.
devoted by Wiesenberger to a detailed exmechanical "systems" for timing in the buying
space
is
two
holding of, transport of, and trade
in, gold was made free on French
territory; persons who had con¬
travened
previous
regulation?
move was made on
asked
wv,irh
T?imfJ
June 24, 194/,
ment of
Monetary
international
th
h
member
all
gnd selling of stocks: "Dollar-averaging" and "Formula-timing." count'ries to take steps to end
hey
a
chosen
are
they
because
most suitable for use with in-
are
shares, in their aim to combine good timing with
diversification in the choice of the securities bought. Dollar-averagvestment company
transactions
in
gold
at
francs
upon
wage increases,-prices are
going up sharply, and this is a
bad sign.
Salaries and wages are
set, through bargaining, by con¬
tract.
Once : set,
they
become
the end of June 1941
\%
free
the
"On
market,
of the Fund
:ng is particularly suitable for the investor with regular rather than
wori(j exchange stability and it
irregular income. Formula-timing, apart from its many variations, js the considered opinion of the
may be said to have as its main purpose the conferring of self-dis-. Fund that exchange stability may
cipiine to avoid the great psychol6gical temptation to follow. the .be-undermined by continued and
'crowd in the up and down swings of the market.
Space does not increasing external purchases and
same
markets.
price?
quoted
which were wel
above not only the official prices
were
"'A primary purpose
At the
time, the supply of
money is tapering off, instalment
buying and other forms of credit
are
soaring, and recent reports
show
that one quarter
of our
families are
priced out of the
„
premium
to
fixed, and may be impervious
a shrinkage oi revenues.
pay¬
(afterwards to be increased by
per month).
(Continued from first page)
round
charge which was fixed
a
at 25% up to
a."
prjces.
French
into
it
The Stock Market
:
their gold or convert
could deposit
"Furthermore, a most important
System With Selection
Timing
a
this free
by a law of Feb
2,1948, the establishment of a free
market for gold, side by side with a
free market for certain currencies:
prohibited. In March the
was
43
(139)
FINANCIAL CHRONICLE
&
expenditures, which
bil¬
year, may suffer a sharp
decrease,
when costs that
are
triple prewar have to be faced.
Ths upward rise in prices, neces¬
sitated by 'the third round wage
increase, may well be the straw
Capital
have
for gold but also the price
corresponding to even the highes
market quotation for the dollar.
Moreover, different prices *ver<
fixed
at the rate of $23
been
lion
a
quoted
for different kinds oi
)»ermit our detailing of the weaknesses of both of these techniques, gales ox gold at prices which di- coins and also for gold in bars to break the camel's back.
someof wHicbiarecharacteristic'of all mechanistic systeihs for 'h^at- rectlyorindirectly produce ex- Chart II gives, however, an im¬
Deline in Commodity Trice
Ing the markfet" by catching the swings. But it may be pointed out change transactions at depreciated pression of the general tendency
Expected
that they offer a wonderful psychological "escape" 'to theihany I rates.
From information at its the increase in the quotations in
This
comes
at
a
time when
experienced investors and speculators who have " previously burned ] disposal, the Fund believes that March (at the time of the Czecho¬
their fingers in using the more usuaL methods. In fact one of the! unless discouraged this practice is slovak crisis) and the drop in the scarcities are disappearing, pipe¬
lines are filling up in more and
greatest attractions of the entire mutual investment fund method is likely to become extensive, which quotations round about May 12
more categories, and when farm
the offering of an "escape" in "letting George do it," that is, throw- 1 would fundamentally disturb the
1948, when it was believed that
big one's realizedly difficult problems into the convenient laps of i exchange relationships among the negotiations would be resume! prices are about to extend further
the experts.
members of the Fund.
Moreover, with the USSR, show to what an the break experienced last win¬
ter, as a result of the favorable
these transactions involve a loss extent political events are apt tc
2
This writer's conclusion regarding the hiring of these
world crop figures to appear this
to monetary reserves, since much influence the quotations.2
j
experts' services through the investment fund technique is that
Fall. This may make people con¬
of
the
gold goes into private
because of the sizable discounts at which the closed-end funds
"In Italy the black market for
scious of a lower farm income and
hoards rather than into central
,
usually sell on the market, "the price is right."
:
gold, as well as the black markets of
sympathetic declines in the
holdings.
For these reasons, the for foreign currencies, was grad¬
price of other commodities.
Fund strongly deprecates inter¬
ually legalized; the price of gold
Incidentally, the question of nomenclature should be considered
Also, there appears to be a de¬
national
by the profession. 'The traditional generic term of investment trust
abandoned for investment company at the time of the institution
in
transactions
gold
at
fell in the slimmer and autumn o:
premium prices and recommends
that all its members take effective
1947 by 25-30%, moving parallel
with the quotation for the dollar.
unfortunate, for there is little action to
prevent such transac¬ This
strengthening of the pur¬
question that to much of the public investment company denotes tions in gold with other countries
merely a firm, practicing some indefinite role in the field, as perhaps or with the nationals of other chasing power of the lira in rela¬
tion to gold greatly helped to in¬
investment banking. A far more descriptive term would be invest¬
countries.'
crease confidence in the national
ment fund or investing company—or perhaps even investment coop¬
"This announcement by the In¬
currency; the public in more thar
erative, if the word trust be frowned on.
ternational Monetary Fund had an
one country is inclined to
place
immediate effect on the policy of
greater faith in the movements o
was
This
Of SEC regulation.
seems
name
,
countries.
several
As
already
free—or even black—market quo¬
Gold Black Markets and Hoarding
mentioned, the authorities in Lon¬
don placed a ban on dealings in
tations than in any- official price
lists.
For that reason monetary
(Continued from page 14)
foreign ;gold at a price above the
official parity: -7
• i
.*
.v
authorities have often looked witt
do nothing
could
ate
economic
superficial
a
London
sta¬
been
bility concealing an economic in¬
validism due to continuous gold
sudden
check
America
and
sent
has
part
to
gone
has
other
to
probably
in¬
markets,
cluding New York.
but intervention could
rises in the price
bleeding;
Latin
of
than cre¬
more
"The
Reserve
Bank
of
South
"As
tary
.
indicated,
also
authorities
the
the
in
i mone¬
United
appealed to individuals,
banks, etc., to assist in stopping
speculation in gold on foreign
markets and, in. the course of the
Autumn of 1947, they introduced
strict control over the movement
States
.
Africa has emphasized its absten¬
.
sovereigns—rises which would
create a still greater demand for
Of
tion
from
sales
of
gold
free
on
black
markets;
but some
newly-mined gold may have been
smuggled out of the country, the
main
destinations
being
India,
and
gold and further price increases.
a
certain amount of favor on sales
gold on black markets, sue!
sales helping to keep down the
unofficial price of gold.
of
"The
of Greece mentions
Bank
State Department
S.
U.
the
of
into foreign
The soldiers'
corporate surpluses.
past history.
The coming change in the Ad¬
ministration at Washington is cor¬
bonuses will soon be
as very opti¬
the long pull. But, in
rectly
interpreted
mistic
for
benefit by a sound and
Republican philosophy, the
economy must suffer temporarily
as the result of
a promised thor¬
to
order
honest
ough house cleaning. The curtail¬
ment of extravagant and wasteful
expenditures will cut government
spending."
'.Even;in-our bi-partisan foreign
policy, where the presently exist¬
ing course will be followed, there
"Regulation
of free
markets is a probability that in attempting
and, especially, bans on the flow to make this course straighter and
of gold to such markets will, a
more
efficient, expenditures for
best, only deal with a number of ERP might be somewhat cur¬
symptoms of the prevalent mone¬ tailed. The Russians, having lost
tary malaise.
To get rid of the the cold war with us, will prob¬
real causes of hoarding, it is im¬
ably dictate the extension of their
gold from the United States
markets; only semiprocessed refined gold could be
perative to put a stop to inflation
agreed to unfreeze $1.2 million Egypt and South-Eastern Europe* exported, and then only if the,
and also to find a true balance in
worth of gold ingots which had
"It is not possible to describe country of destination permitted
the valuation of the different cur¬
been given by Greece as a pledge
all the sources and
centres of 4he importation of such gold.
rencies.
Fear of war is a further
against a loan granted by the Fed¬ clandestine movements of gold
"In Mexico, the authorities sus¬
motive for hoarding but, as a rule,
eral Reserve Banks.
since, for obvious reasons, trans¬ pended export sale of gold, bars
it is not too difficult to deal with
:
actions of this kind are not offi¬ and
"The Bank of Mexico has sold
coins, but manufactured gold once the fear of inflation is con¬
While in some (e.g.) in the form of statuettes
gold coins at a high price in order cially reported.
quered.
to
obtain
'foreign
currencies countries gold sales, acting as an may be exported upon payment of
"History shows that conditions
antidote to inflation, undoubtedly a
duty of 30 centavos per kilo
(mainly dollars) relatively cheap¬
making for
hoarding and dis¬
had a salutary effect, it was often
ly.
The gold sales were at first
plus 5% of the value of the article.
carding vary from time to time
felt that the whole
economy of
Under direct or indirect pressure
reported to be for domestic use,
not only in the West but also in
but much of the gold found its the countries concerned was suf¬ from the International Monetary
the East.
Especially in the pres¬
fering certain disadvantages from Fund, several smuggling centres
way to the Near and Far East.
ent abnormal situation, it is clear¬
the disappearance of the gold—
(and among them Hong Kong and
"Further, there is no doubt that
especially when private hoarding Manila) imposed restrictions on ly impossible for any immutable
private markets have been fed by
rules to be laid down, and those
of gold increased at the expense
private movements of gold; such
newly-mined gold. Part of the
of more
important imports, or steps made it more difficult to responsible for dealing with these
current output of the Philipoines
savings were sterilized instead of smuggle gold into and out of the
is reported to have been sold at
problems may,
indeed, find it
being put to more productive use. respective territories.
premium prices and most of the
necessary to adapt their policies
"In a number of countries steps
"As;a consequence of all these
newly-mined gold in Ethiopia ap¬
to the circumstances of individual
pears to have found its way 'to the began to be taken against sales of bans and abstentions, the current
Thus, at the supplies of gold became more re¬ countries and the needs of the
Alexandria market, to which gold gold to the public.
*
that
and in
cline in individual savings
foot
"one
policy;
backward"
ih
their peace offensive.
This may cause a lessening of ar¬
mament; expenditures.
England, rather than Russia,
might furnish us with the surprise
shock. The Labor Government, as
a last resort to avert bankruptcy,
other words,
drastically devalue the pound.
may
repercussions throughout th$
world could be of catastrophic
The
proportions.
Business Facing
Squeezes
From many sources we
learn of
.
,
also
is
>.
*
-■"*
"
of
Government
outout
Part of the gold
-
beginning
and
Syria
by
exported
Lebanon.
1947,
Chinese
the
published
a
drastic
CHART II
Quotation of Gold Coins in Paris
'
-
In
and Switzerland.
,
stricted.
But the public's demand
gold persisted, the result being
a
general upward movement in
quotations for gold in free and
black markets in the autumn of
1947.
.
French francs.
/
•" ^
an
to
-f''" A
6000
6000
-
^A
5000
W
A
'Wm
.
/
V;
'4000
:
'i
i
*
-
ji
\
V.
_
A
Price of Napoleon '
A/?
-
'
4000
v
\^in Paris
y -v
.
3000
Frice of Napoleon
in Switzerland "•
;
jr.- ;
expressed in French francs
-v
:
...
:L
VW/'
-
W
...
200fo
2000
'I.-;:/
1
•
■
>'•/';.';•••
O"
'
/•v..',;*.
V:'"v
■
'.' ."
:f;v;\
>■.
•
1000
<
0
,
1
vl.
.11
•
1->■'.!
1946
h'/il.
1
VI
»
■->
.1
■"
1
1
1
*
'
'
1
J
1947
1
.«f.v
...
1
J i.«"i
»
1
'
•
>
1
1948
i "i-
either directly,
of
the
in
regulations,
by musing such loopholesi as
dealings in semi-manufactured or
manufactured
gold.
Hence
the
need for further clarification of the
position.
Not
of
all
the
countries
are
International
Monetary Fund, but non-members
would
seem
to
have
generally
fallen into line.
It is important to
note that the International Mone¬
policy statement in
specifically directed
against international transactions
in, gold, thus leaving each country
free to sell gold, even at premium
prices, on its domestic markets.
tary
1000
-0.
contravention
members
■
A
3000
;■> •^
,—
I \J I
.
\
'
.
■
'■
smuggling,
or
5000
.
rr
i
higher prices represented
increased temptation to resort
"The
7000
7000
-
times."
for
Fund's
this matter is
is usually impossible to give even
approximate figure for the value of
gold hoarded in individual countries. For
France the Equivalent of $3 milliard has
often been quoted as a likely figure for
the amount of .gold hoarded -by the be¬
ginning
of 1947.
A close examination
of
available data would seem to show
that the influx of gold from
1938 to
1947 cannot have been on a very large
scale (but that there was some influx
is certain, and it may well have amounted
to
several
hundred million dollars
in
2 It
an
The
size of present-day hoards will thus de¬
pend upon how much gold was in fact in
the
two
and
a
half postwar years).
the French public before
world war.
Judging .from
which has become available
in connection with the settlement of es¬
tates
and
on
other
occasions,
many
hands
the
of
second
the
information
families
France have been
possession of gold.
in
standing
So
tion
to
far (May 1948) no great propor¬
the existing hoards would seem
been
sold
on
the free gold
in France on 2nd
with the restoration
tary
confidence,
a
part
of
hoarded may be expected to
1948
long¬
of
have
ket
in
set
up
but,
markets.
mar¬
February
of mone¬
the gold
reach the
businesses that are un¬
numerous
dergoing readjustments to lower
operations. Costs of labor,
of materials and of shipping .are
becoming inflexible shackles to
profitable operations. Break-even
points are at so high a level that
a decline in gross can create sub¬
stantial damage.
A good markdown in record inventories could
levels of
have
in
effect
similar
a
many
times-earmngs ratios
for stocks could disapoear.
In citing the current readjust¬
ments that are taking place, and
cases.
Low
attention to some of the
in calling
problems ahead, we are not at¬
tempting to time a stock market
break.
Maybe second and third
quarter earnings, the confidence
engendered by a Republican vic¬
tory and the undoubting faith of
the chart followers will push the
market higher. However, we do
not think this will happen to any
extent because many businesses
need financing and would like to
issue more stock or senior obli¬
,
gations
.
prices.
The
us
*
reasons
-
stock.
into
convertible
These issues will act as
ceilings on
.
,
'•
-
given above bring
to the conclusion
should accumulate
that investors
cash.
44
(140)
THE
COMMERCIAL
Securities
•
.U
American
Bosch
Corp.
(7/19)
June 2 filed 535,882 shares of class B
($1 par) common
Underwriters—Names to be determined by com¬
petitive bidding. Probable bidders: Glore, Forgan & Co.
and Lehman Brothers
(jointly); Blyth & Co., Inc., and
Merrill Lynch, Pierce, Fenner & Beane
(jointly). Bids—
Bids for the purchase of the stock will
be received up to
3:30 p.m. (EDT)
July 19 at office of Department of Jus¬
tice, Office of Alien Property, 120 Broadway, New York.
.American Fidelity Fire Insurance
Co., New York
-
July 2
(7/16)
(letter
of
notification) 20,000 shares 80c nonstock
(par $5).
Price—$14 perStockholders of record July 15 will be given the
right; to subscribe to the stock. Rights expire Sept. 9,
convertible
preferred
share.
1948i
Expand fire insurance business., No underwriting.
Ampal-American
Palestine
jfLpril 7 filed $10,000,000 10-year
Trading Corp., N. Y.
3% sinking fund deben¬
tures.
Underwriter—Name to be filed by amendment,
41 any is used.
Proceeds — $5,000,000 in mortgage loans
for-,construction
•
Armstrong Rubber Co., West Haven, Conn.
June 30 (letter of
notification) 1,000 shares of 4%%
convertible
2,000 shares of class A
preferred
common
stock,
stock.
($50
par)
and
To be sold at $44
and
,$11.75, respectively. This stock is being sold by
James A. Walsh, President of the
Company. Underwriter
-—I?. Eberstadt & Co., Inc., New York.
Batesville Telephone Corp.,
25
ceeds—To redeem
outstanding 5% first mortgage bonds
and to pay
for improvement program.
©
Bay Petroleum Corp., Denver, Colo.
June 29 (letter of notification)
6,000 shares ($1 par)
common stock for
company and 3,000 shares of the same
stock for Charles U.
Bay, Josephine P. Bay and the First
National Bank of
Bridgeport £nd C. U. Bay as trustees.
Offering to be made at $3Q each. Proceeds from the
company's sales to be used for working capital. No un¬
derwriting.
"
/
- *
connection
"Business
•
Exploration
Canada
,
June. 2 filed
Co.
Ltd.,
Ottawa,
v
••
500,000
common
shares
($1 par).
Under¬
writer—Mark Daniels & Co.,
Price*—40c per share Cana¬
dian funds. Proceeds—For
exploration of properties.
•
Bowlsng Green
June
29
common
(letter
of
(Ohio)
1,000
stock of which 800 shares
are
shares
(no
to be sold at
par)
$100
per share and 200 shares are to be retained in
company's
treasury. To put meat packing plant into working con¬
dition and purchase livestock,
j No underwriting.
•
Central Maine Power
Co., Augusta, Me.
July 1 filed $5,000,000 first and general mortgage bonds,
series Q, due 1978. Underwriters—Names to be deter¬
mined
by competitive
bidding.
Probable
bidders —
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.; Kidder,
Peabod.y & Co. and W. E. Hutton & Coi (jointly); Merf
rill;Lynch, Pierce, Fenner & Beane and White, Weld &
Co.^(jointly); Salomon Bros. & Hutzler; Harriman Rip¬
ley & Co., Inc. Proceeds—To reduce outstanding shortv
term
construction
Bank
of
notes
payable
the
First
National
Boston, the proceeds of which
were
used
additional
construction
and
to
other
corporate
for
purposes,
ping—Expected in July.
Central
Vermont
March 30 filed
and
an
Public
Service
$1,500,000 Series E first
Corp^
mortgage bonds
undetermined
number of common shares (no
Underwriters of common—Coffin & Burr. Bonds
to be placed
privately. Common stock will be offered to
par).
common
stockholders through
subscription rights and to
and preferred stockholders
through subscrip¬
privileges. Proceeds—For a construction program
repair of flood damages. Expected by
mid-July.
• .Chieftain
Products, Inc., Brooklyn, N. Y.
July 2 (letter of notification) 50,000 shares of common
one
30,000 warrants
common
share of
stock.
common
entitling the holder to pur¬
Price—$2.75 per unit consisting of
and 1V2
rate purposes.
warrants.
General corpo¬
Underwriter—Dunne & Co., New York.
;
Clinton (Mich.) Machine Co.
April 15 (letter of notification) 10,000 shares of stock
to be sold at $5% each
(market price), for selling stock¬
holder. Underwriter—Charles E.
Bailey & Co.; Detroit.
Opportunities."
off bank loans and for
at par.
^magazine called
No underwriters.
>
FlotiKI
Loan
working capital.
Price—Expected
,
Products, Inc., Stockton, Calif.
,
Commonwealth
Edison Co., Chicago, 11 I.¬
$50,000)000 first mortgage bonds, series N,
due June' 1, 1978.
Underwriters—Names to be deter¬
mined by competitive bidding. Probable bidders include
Halsey, Stuart & Co. Inc.; Glore, Forgan & Co.; The
and
Missouri
-
$6,000,000 of 3V2%
cumulative certificates of
No
common
stock ($25
-.
cer¬
Offering—Offered only to
A.
Feeder, Inc.^Chicago, III.
June 30
(letter of notification) subscriptions for 240 4%
cumulative preferred shares
($100 par) of the com¬
pany, which is still to be organized. To be sold at par.
For; paid-in and working capital. No underwriters.
Dayton Consolidated Mines
Co.,
G.
.
Co., Virginia City,
Glohe-Wernicke
Nevada
stock
fund convertible 5% bonds due 1953 and 300,000 com¬
mon
shares reserved for conversion of bonds. Price—
of record June 18
six
shares
ferred stock.
Dively (H. G.) Industries, Inc., Colorado
Springs, Colo.
ferred
stock
(letter of notification) 10,000 shares of 7% cu¬
mulative preferred stock (par
$10) and 10,000 shares of
common stock (par $1). Price—-Par for both issues. Un¬
derwriter—Company is offering the stock in. its own
behalf, listing underwriting discounts on both issues.
*
-
j
holders at the rate of
3%
each
seven
case.
shares
one
held
common
and
additional
one
shares
held.
share for
common
share
of
preferred for
Price—Par
Underwriters—Dillon, Read & Co. Inc.
in
each
and Dean
Witter & Co.
sory
Co., Pittsburgh, Pa.
May 6 filed $14,000,000 first mortgage bonds, due 1973.
Underwriters—Names to be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co., Inc.;
The First Boston Corp.; Kuhn, Loeb & Co. and
Smith/
Barney & Co. (jointly); W. C. Langley & Co. and Glore,
Forgan & Co. (jointly); Harriman Ripley & Co.; White,
Weld
&
Co.
Proceeds—$14,000,000 of proceeds, plus
563,000 shares of new common stock, will be delivered
to the Philadelphia Co. in
exchange for natural gas
properties now under lease, outstanding cap^al stock of
Equitable, notes and other claims owed to the Phila¬
delphia Co. and to the Pittsburgh and West Virginia
Proceeds—To pay off short-term promis¬
notes and the balance for construction.
H
"
'
)
Heidelberg Sports
Pittsburgh, Pa.
Enterprises,
June 25 filed 2,041 shares of class A
5,000 shares of class B
common
Inc.,
common
stock
stock and
(par $100).
Price
—•Par
($100 per share). Underwriter—None, Proceeds
—$600,000 to be used for spectator grandstand and bal¬
ance
for related purposes.
Heyden Chemical Corp., New York, N. Y.
June 29 filed 59,579 shares of
cumulative.. convertible
preferred stock (no par) to be offered common stock¬
holders of record July 13 in the ratio of one share
,o£
preferred for each 20 shares of common stock held*
Price—By amendment.
Underwriter—A. G. Becker &
Co. will acquire the unsubscribed shares. Proceeds—
Sale originally planned for July 7 postponed.
Exeter & Hampston Electric Co., Exeter, N. H.
June 24 (letter of notification)
8,125 shares of common
To
be
used
in
part for improvement
and
expansion of
manufacturing facilities.
4
(par $20).
Price—$33 per share. "Underwriter—
None. Proceeds—For additions, extensions and
improve¬
ments to
plant and to
pay
Hunt Machine
June 21
present short-term notes total¬
At par.
First Guardian Securities Corp., New York
City
June 4 filed 36,000 shares of 5% cumulative convertible
ester G. Furman
preferred stock
($25 par) and 172,000 shares .($1 par)
(72,000 shares of common to be reserved
the preferred.)
Underwriter—None.
share for the preferred and $10 for the com¬
stock.
conversion
Price—$25
a
of
mon.
Fitzsimmons Stores, Ltd., Los Angeles, Calif.
2 filed 10,000 shares of 6% cumulative first
pre¬
ferred stock
($100 par). Underwriting—Officers, direc¬
tors and employees of the company will offer the stock
to friends and
associates.
Price—$100 per share.
Pro¬
funds used to retire 7% preferred
short-term bank loans; to modernize six
and ' for
working capital.
Business:
"Super
ceeds—To
stock; to
replace
repay
Markets" in Los
nardino County.
Angeles, Riverside, Colton and San Ber¬
Works, Inc., Greenville, S. C.
1
(letter of notification) $300,000 of 5Yz% serial
sinking fund coupon debentures (convertible). Price—
Underwriters—Frank S. Smith & Co., Inc.; AlCo.; McAlister, Smith & Pate, Inc.; H„
T. Mills; W. F. Coley &
Co.; V. M. Manning; McCarley &
Co.; G.1 H. Crawford & Co.; and Thos. L. Lewis. Pro¬
ing $130,000.
stores,
share for each
stock (par $20) aad 100,000 shares of common
(par $20). Offering—To be offered common stock¬
each
Equitable Gas
Feb.
one new
Electric Co., Ltd., Honolulu (8/2)-v i
June 29 filed 50,000 shares of series D cumulative
pre¬
,
June 28
stock
the basis of
Hawaiian
.
Gas Co.
on
held;
Rights expire July 22.
Price—Par.
Underwriter—None. Proceeds—To redeem part of pre¬
$1,000 per bond with 1,000 common shares. Underwriter
—S. K. Cunningham & Co., Pittsburgh, To receive cur¬
rent obligations, working
capital, etc. Being placed pri¬
vately.
'
' ,
•
Co., Norwood, O.
(letter of notification) 42,410 shares of common
(par $3.50) to be offered to common stockholders
June 11
May 14 (letter of notification) $100,000 first lien sinking
„
Edwards &
Sons, Herrick, Waddell & Reed, Inc.,,
Hickey & Co., Mason, Moran & Co., O'Neal-Alden 8c
Co., Inc., Wilson-Trinkle & Co., Inc. and Holton, Her**
rington, Farra Co* Proceeds—To reimburse the company's treasury for expenditures made in connection
with the building and equipping of their new veneer;
and plywood plant at
Savannah, Ga., the cost of which
was
approximately $1,650,000. Price—At par. Offering
—Expected at end of July.
)
and plant facilities.
Belt Livestock
A firm commitment has
group of underwriters
covering
shares, and ^hese, together with the balance
stock, will be publicly offered. Underwriters—F.
S. Yantis & Co.,
Inc., W. .L. Lyons & Co., H. M. Byllesby
& Co., J. C. Bradford &
Co., Crowell, Weedon & Co.j
Cruttenden & Co., Martin, Burns &
Corbett, Inc., Berwyru
T. Moore & Co., Inc.,
Mullaney, Wells & Co., William R,
Staats & Co., Van Alstyne, Noel & Co., Dempsey &
a
half of the
stockholders and patrons and members.
Price—At face
amount.
Proceeds—For acquisition of additional office
C6rn
(par $20).
been entered into with
five-year and \xfi% 10-year
indebtedness; apd $2,000,000 of
underwriting.
125,000 preferred shares
of the
1%% demand and 2J/2% 6 months cumulative loan
tificates.
company
General Plywood Corp. (7/20-3O)
100,0Q0 shares of 5% cumulative convert¬
ible preferred stock
<-
Oct. 16 filed $3,000,000 non-dividend
par);
and
common
June 25 filed
Assoc., Kansas City,
-
75,000
shares.
Company's proceeds will be
used for general corporate
purposes.: Effective May 5.
)■
■
First Boston Corp. Proceeds—For
working capital to be
used for construction.
Consumers Cooperative
shares
common
June 29 filed
common
chase
Merchandise, Inc., Denver, Colo.
(letter of notification) $300,000 of 5% serial de¬
bentures.
Underwriters—Peters, Writer & Christensen,
Inc. and Sidlo,
Simons, Roberts & Co. Proceeds—To pay;
Co., St. Joseph, Mo.
; * March 6 filed 385,000 shares of 60 cent convertible pre¬
(letter of notification) 1,000 shares of class A
ferred stock (par $5) and
325,000 shares of common stock
stock. Price—$100 per share.
Underwriter—
(par $1).
Underwriter — Floyd D. Cerf Co., Chicago,
None. Proceeds—To expand its net worth and
working
Price—preferred $10; common $6.\< Proceeds — Stock¬
capital.
\. ' •
holders will sell 260,000 preferred shares and 250,00©
for
and
Flaks
June 23
28
common
stock
ISSUE
preferred
tion
and
PREVIOUS
Proceeds—For machinery and expenses.
Provision Co.
notification)
Thursday, July 8, 1943
Registration
SINCE
with publishing a monthly
Commerce
June
.
Borderminsfer
ADDITIONS
mulative preferred participating stock. To be exchanged
for non-assessable common stock two
.years from date of
issuance at $10 a share. To provide working capital in
Price—Expected
at par.
'
in
CHRONICLE
Coleman-Chance Publishers, inc., Portland, Ore.
June 29 (letter of notification) 10,000 shares of 6% cu¬
•
Batesviile, Ind.
(letter of notification) $200,000 of 4y2% first
mortgage sinking fund bonds, due July 1, 1973. Under¬
waters—City Securities; Corp. arid Engineers, Inc. Pro¬
June
Now
INDICATES
of
housing in Palestine, $2,500,000 in
loans to transportation and industrial
cooperatives, and
'*2,200,000 in loan to Solel Boneh, Ltd., for public works.
cumulative
FINANCIAL
•
itock.
•
&
;
ceeds—To fund present unsecured
and for additional working capital.
bank
indebtedness.
■
\
Idaho-Montana Pulp & Paper Co., Poison, Mont»
May 17 filed 100,000 shares of 4% cumulative preferred
stock
($100 par)
and 500,000 shares ($10 par) common)
—
Tom G. Taylor & Co.,
Missoula9
Price—$300 per unit, consisting of two shares ot
preferred and 10 shares of common stock. Proceeds—Tea
stock.
Underwriter
Mont.
erect and operate a bleached
200-ton per day capacity.
Illinois
sulphate pulp mill with
Telephone Co., Chicago, III.
h
(par $100)»
Underwriter, none. Offering—To be offered pro rata foF
June 4 filed 389,995 shares of capital stock
&
m
PACIFIC COAST
nOV*
-AND
CO
HAWAIIAN SECURITIES
Direct
Private
Vbandc4
Wires
Dean Witter
Co.
a
BROKERS
MEMBERS
New York Stock
Exchange
Honolulu Stock Exchange
14
WALL
San Francisco Stock Exchange
Los Angeles Stock Exchange
STREET, NEW YORK
Telephone BArclay 7-4300
SAN FRANCISCO
LOS ANGELES
•
r
.
*
A
J»4iRS-|2
UNDERWRITERS
-
HONOLULU
.—
a
y
Bell
\S65
York
yvu*
P>D^
CkG°
Cvu
1
COMMERCIAL
THE
Number 4714
[Volume 168
Price—By
July 15,
Preferred
of
for
.Preferred
June
said
preferred stock
Manufacturing Co.,
....
;
Proceeds—No purpose
.
held.
Warrants will be transferable and will expire Aug.
August 4, 1948
Common
August 17, 1948
subscription by shareholders of record June 2. Ameri¬
can Telephone and Telegraph Co. (parent) will purchase
587,295 shares. Proceeds—To pay advances from Ameri¬
can Telephone and Telegraph, its parent; any remainder
of proceeds will be used in improving telephone plant.
No
are
to
be
offered
cumulative convertible preferred stock
O
to
•
Indianapolis,
Proceeds—^For construction.
Co.,
Ltd., Sherbrooke,
Quebec
Jan.
30
filed
shares
($1
par)
stock.
common
U. S. authorized agent and principal underwriter.
—$1
each.
Proceeds—To
construct milling
Price
plant and
purchase equipment.
Irwin-Phillips Co., Keokuk, Iowa
shares of 5% cumu¬
($10 par) to be sold
«on behalf of three stockholders.
Price; par. Underwrit¬
ers—Slayton & Co. have been employed as agents to
.sell the issue.
Keller & Co., Inc., Boston, Mass.
JVTay 28 (letter of notification) 9,300 shares of cumula¬
tive participating preferred stock and $200,000 of 20year 51/2% debentures, due 1968.
Underwriter—General
:Stock & Bond Corp, Proceeds—For working capital arid
purposes.
1
.
Kent-Moore Organization, Inc., Detroit, Mich.
.June 29 filed 56,000 of common stock (par $1). Price—
:$7.50 per share.
Underwriter—George A. McDowell &
<C6; Proceeds—To certain principal stockholders.
/
Kool-Aid Bottling Co., Inc. of Calif.,
Wisconsin
Sheboygan,
March 22 filed 1,500,000 shares ($1 par) common stock.
Underwriter—Heronymus & Co., Sheboygan, Wis. Pro¬
ceeds—To open and equip bottling plants in California
cities.
Price—$1 per share.
Kresge
(S. S.)
Co., Detroit,
Mich. (7/19-20)
June 29 filed 167,955 shares of common stock (par $10),
-of which 27,955 are for account of the company and 140,000 shares for account of the estate of Anna E. Kresge.
Northern
Mines, Ltd.
stock (par $1).
common
Mining Co.,
Ltd.,
Toronto.
States
Co.
Power
(of Minn.)
(7/13)
(no par).
Underwriting—Names to be determined by
competitive bidding.
Probable bidders: Halsey, Stuart
& Co. Inc. (bonds only); Smith, Barney & Co. (stock
only); Lehman Brothers and Riter & Co. (jointly both
issues); Merrill (Lynch, Pierce, Fenner & Beane; Glore,
Forgan & Co. (bonds only); Kidder, Peabody & Co. and
White, Weld & Co. (jointly on bonds). Proceeds—Fojr
acquisition of not
more than 60,000 additional common
(par $100) of Northern States Power Co. (Wis.)
off bank loans. Bids—Bids will bd received
by the company at Room 1100, 231 So. La Salle Street',
Chicago, 111., up to 10:30 a..m. (CDT) on July 13.
•
stock
and to pay
Nuera Products
Co., Denver, Colo.
May 10 filed 100,000 shares ($10 par) 6% preferred stock,
and 20,000 shares (1 mill par) common stock.
Under¬
writing—None named. Price—10 shares of preferred and
two
of
will
common
be
sold
for
$100.
Proceeds—To
O-Cel-O, Inc., Buffalo, N. Y. (3/3)
(letter of notification) 3,000 shares of preferred
(par $45) and 6,000 shares of common stock Jpar
$1) to be issued in units of one share of preferred and
two
shares of
Morning Glory Mines, Inc., Spokane, Wash.
23 (letter of notification) 250,000 shares of
common
stock.
To
be
sold
at
10
to
offered pro rata to com¬
be
Electric
Products
Corp.,
24
and
in¬
stock (par
$50). Price—$37.50 per share. Underwriter—
Singer, Deane & Scribner. Proceeds—To executors of an
" '.
•
estate.
Fuel Gas
Co., New York (7/14)
June 4 filed $13,500,000 sinking fund debentures, due
1973.
Underwriters—Names to be determined by com¬
petitive bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.; The First Boston Corp.; Harriman Ripley & Co.,
Glore, Forgan & Co., Goldman, Sachs & Go. and Leh¬
man Brothers (jointly); and White, Weld & Co.
Pro¬
320,000 additional shares of United
stock ($25 par), and to pur¬
48,500 additional shares of Iroquois Gas Corp. Bids
—Bids will be received by company at Room 2033, 2
common
chase
Rector Street, New
York, N. Y.,
up
to
noon *
(EDT) on
New England Power Co.
(7/20)
June 22 filed
100,000 shares of capital stock (par $5).
per
share.
Underwriter—First
Securities
company's receipt of
Carolina.
license to do business in
a
Proceeds—For
general business
pur¬
poses.:;-:.
•
common
(7/22)
filed
Corp., Durham; N. C.
Offering—26,667 shares will be
initially offered on a "when, as arid if issued"; basis;
13,333 shares will- be purchase^ by underwriter for' pub¬
lic or private offerings; and the remaining 40,000 shares
will be publicly offered on a "best efforts basis" on
completion of the subscription of the first 40,000 shares
and the
Pittsburgh,
(letter of notification) 2,000 shares of
Gas Co.
June
North
Pennsylvania
National
products;
Old North State Insurance Co.
each
N. ft. ft. F. Associates,
Natural
Rights expire Aug. 2. Corporation will also offer pro rata
common stockholders who exercise said right any
units offered but not purchased by other stockholders.
Price—Preferred at $45 per share and common at $2.50
per share; Underwriter — None. Proceeds — For expan¬
sion of plant facilities for the manufacture and sale of
non¬
cents
stockholders
June 23
.
common
stockholders of record July 2, 1948, at $50 per unit.
cellulose
July 14.
June 1 (letter of notification) 10,000
lative participatingpreferred stock
«o^her corporate
by
-}v. T U
June 3 filed $10,000,000 first mortgage bonds, due July 1,
1978, and 200,000 shares of cumulative preferred stock
Price—$15
ceeds—To purchase
1,500,000
Underwriter—Paul E. Frechette, Hartford, Conn., is the
a
underwriting.
National
new
Asbestos
repay
Inc., New York
July 2 (letter of notification) 10,000 shares of capital
stock (par $10). Price—$10 per share. Working capital.
No Underwriting.
additional common stock
<$10 par) to be offered to its stockholders on the basis
International
sold
for pur¬
Proceeds for exploration and development.
bonds of
only.
For mine development
stallation of machinery. No underwriting.
/
the record date, July 2.
Proceeds—To
working capital.
Memphis Trust Co., Memphis, Tenn.
30
(letter of notification) 150 subordinated
assessable
June 21 filed 60,000 shares of
share, at $12.50 per share, for each 10 shares
mow held.
The company's parent, Public Service Co. of
Indiana, plans to acquire only 62 of the 26,701 shares
to which it would be entitled, but has agreed to purchase
.all shares not otherwise subscribed for by stockholders,
stockholders, other than Public Service Co., will be en¬
titled to buy the additional 26,639 shares of Public
Service at the rate of 9/50 of a share for each share held
on
public at current
the Detroit Stock
June
stock and for construction.
Inc.,
to
Midwest Packaging Materials Co., St. Louis, Mo.
June 25 (letter of notification) 3,500 shares of common
stock (par $5). Price—At market.
Proceeds—To selling
stockholder.
Undcrwriter—Edward D. Jones & Co.
$52.50 per share and accrued dividends. Each
preferred share is convertible into two common shares.
Public offering is contemplated of the common stock not
issued in conversion.
Underwriting and offering price
to be. filed by amendment. Probable underwriter: The
First Boston Corp.
Proceeds—To redeem the preferred
<©i*
being
to the
shares
de¬
$1,000 each, 75 bearing 4^4 % interest
and 75 bearing 5% interest.
To develop loan business.
<par $50) which the company intends to call for redemp¬
one
Gold
Underwriter—Transamerica
mon
benture
tion at
<of
North Inca
March 10 filed 666,667 shares of
holders of record May 22 in ratio of one new share for
each 2V2 shares held.
Rights expire July 10. Unsub¬
June
Decatur, III.
June 30 filed 690,098 shares of common stock (no par
Value), To provide for conversion of 345,049 shares of
Co.,
shares
stock
•
Power Co.,
-*i',
Proceeds—875,000
June 24
loan and for
Indiana
(no par) common stock.
Underwriter—F. H. Winter & Co.,
build, furnish and tool a factory arid apply close to $500,000 to working capital.
market price then prevailing
Exchange. Underwriter—None.
Water
Limited, Calgary, Alberta
company and 28,572 by stockholders. Proceeds
chase of property and drilling.
scribed
-
Central Illinois Public Service Co.——Common
&
York.
Oils
903,572 shares
Masco Screw Products Co., Detroit, Mich.
June 4 (letter of notification) 141,600 shares ($1 par)
common stock.
Price—$1.75 per share. Offered to stock-
Pfd. & Com.
....
Gas
filed
pansion.
PfdL & Com.
i
McCall Corp.
Indiana
11
Underwriter—White, Weld & Co. Price—By amend¬
ment.
Proceeds—With a $2,500,000 20-year 3 % bank
loan," to pay bank loans, to restore the working capital
position of the company and to provide funds for ex¬
August 3, 1948
outstanding 5%
given,
3.
August 2, 1948
Illinois
Mich.
Corp. (8/4)
June 24 filed 87,167 shares of common stock (no par
value) to be initially offered to common stockholders of
record July 20, 1948 on basis of one new for six shares
Capital Stock
...
Rochester,
McCall
...Preferred
July 22, 1948
the basis of
15
C. G. McDonald & Co.
Preferred
Bonds
......
on
for each 2Vz
(letter of notification) 7,000 shares of common
stock (par $1).
Price—$5.50 per share.
Underwriter—
...Common
Corp. of America
O-Cel-O, Inc.
of
common
,,
July 20, 1948
.Hawaiian Electric Co., Ltd.
share of
McAleer
Julyr 19, 1948
Sy) Co.——
manufacturing facilities.
shares of preferred.
Price—At par for preferred stock. Underwriterr-Wagenseller & Durst, Inc.; Bingham, Walter &
Hurry, and
Lester & Co. all of Los Angeles. Proceeds—To retire
bank loans.
'
July 16, 1948
Old North State Ins. Co
conversion
one
.Preferred
American Fidelity Fire Ins. Co...
Underwriter—None.
Lawrence Warehouse Co., San Francisco, Calif.
18
(letter of notification) 10,000 shares of 6%
cumulative convertible preferred stock
(par $25), and
4,000 shares of common stock (no par), to be'reserved
Debs. & Com.
Westinghouse Electric Corp..
Shoe
share.
per
June
:_^_____Pfd. & Com.
Plywood Corp..
New England Power Co
Price—$100
$1,000.
North Canadian
March
:v*
,
1948
General
manufactured
Proceeds—For expansion of
Tanner & Co.__
Kresge (S.
credit of $100 against the purchase, of a new dining
a
by the company, or against repair
work or alterations performed by the company for the
purchaser.
Credit certificates issued to any. one pur-,
chaser of said preferred Stock shall be limited to a total
1948
Soya'Products Co
feredar 101,75.
certificate entitling him
a
45
construction and improvement of property. Awarded July
7 on bid of 101.319 for a 3%
coupon.
Price—To be of-
New
car
New Jersey Bell Telephone Co.,
11:30 a.m. (EDT)^„._-...Debentures
Kansas
Of 27,955
Price—70 cents each.
to
National Fuel Gas Co., Noon (EDT)-Debentures
Roosevelt Oil & Refining Corp
r__..Pfd. & Com.
—
five shares will be entitled to
Bonds
July 13, 1948
July 14,
Underwriters—Lehman Broth¬
(141)
-■>Kuliman Dining Car Co., Inc., Harrison, N. J.
June 21 (letter of notification) 1,500 shares of $5 cumula¬
tive preferred stock (no par value). Purchaser of each
July 9, 1943
Northern States Power Co, (Minn.),
10:30 a.m. (EDT)
_Bonds &
CHRONICLE
Watling, Lerchem & Co.
Proceeds
shares, for general corporate purposes.
NEW ISSUE CALENDAR
Power & Light Co
amendment.
FINANCIAL
and
ers
New Jersey
&
Pacific
June 29
Associates, Inc., San Francisco, Calif. *
(leter of notification)
tive prior preferred stk. ($25
upon,
8,000 shares 6% cumula¬
par); 16,000 shares ($1 par)
common to be issued
stock, and 16,000 shares of
exercise of warrants held by
common
preference, stock.
All
stock
owners of
be
to
sold
at
the prior
valu&
par
proceeds to pay off a. bank loan; make advances;to a
wholly-owned susbidiary, Klamath Machine & Locomo¬
tive
Works,
Hannaford
Inc.,
&
and
Talbot,
for
San
additional
Francisco,
working capital.
will be selling
agents.
•
:
Pacific
Paper Materials Co., Portland, OreJune 29 (letter of notification) 122,459 shares ($1'pap)
common
stock.
Price—Par.
To
current and past due accounts.
retire
a
like amount of
No underwriters.
Pacific Telecoin Corp., San
Francisco (7/12-1.6)'
notification) $300,000 4^2% equipment
trust certificates, series A, dated July 1, 1948, and due
July 1, 1951. Underwriters—Gearhart & Co., Inc., and
Paul D. Sheeline & Co.
Proceeds—For equipment, to
retire debt and for working capital.
June 10 (letter of
Pacific Telegraph & Telephone Co., San Fran*
May 28 filed 601,262 shares ($100 par) common stock.
Underwriting, none. Offering—Holders of preferred and
common stockholders of record June 15 are given rights
$11 million first mortgage bonds, series B,
to subscribe on or before July 7 at $100 per share to
due 1978.
Underwriters—To be determined by com¬
| the extent of one share for each six shares of preferred,
petitive
bidding.
Probable
bidders
include—Halsey,
or common held.
Proceeds—To j-eimburse company's
Stuart & Co. Inc.; The First Boston Corp.; Lehman
treasury for additions, etc.
Brothers; Merrill Lynch, Pierce, Fenner & Beane; Kuhn,
Pacific Western Oil Corp., Los Angeles
Loeb & Co.; Salomon Bros. & Hutzler and Union Secur¬
May 21 filed 450,227 shares ($10 par) capital stock. Un¬
ities Corp. (jointly); Kidder, Peabody & Co. and White,
derwriting—None.
Offering—To be offered by the own¬
Weld & Co. (jointly). Proceeds—To purchase properties
er, J. Paul Getty, President of the Company, from time
of the Bellows Falls Hydro-Electric Corp., to purchase
to time on the floor of the New York Stock Exchange,
that portion of the New Hampshire section of the Bel¬
or "to specific persons, firms or corporations," in sales
lows Falls-Pratts Junction line owned by the Connecticut
outside the Exchange.
Price—At approximate market.
River Power Co. and for repayment of bank loans. Ex¬
(Effective June 23.)
pected about July 20.
Pennsylvania Industries Corp., Pittsburgh^ jPa.
New Jersey Bell Telephone Co.
(7/13)
June 24 filed 214,987 shares, commori stock (par $10) to
June 11 filed $55,000,000 40-year debentures, due July
be exchanged for the stock of Pennsylvania Industries,
15, 1988.
Underwriters — Name to be determined
Inc. (old company), viz: 21,190 shares in exchange for„
through competitive bidding.
Probable bidders: Halsey,
old company common stock (one for each 28 of old) and
Stuart & Co. Inc.; Morgan Stanley & Co.
Proceeds—To
193,797 shares to the holders of outstanding $6 cumula¬
pay off advances made by American Telephone & Tele¬
tive preferred stock on basis of three common for one
graph Co, (parent) for construction and general corpor¬
preferred.
ate purposes. Bids—Bids will be receiced at Room 2315,
.195
on
Broadway, New York, N.Y.,
up to 11:30 a.m. (EDT)
July 13.
New Jersey Power & Light Co.
June
8
filed
(7/9)
$6,000,000 first mortgage bonds, due 1978.
Underwriter—Halsey, Stuart & Co. Inc.
Proceeds—For
Philadelphia Suburban Transportation Co.,
Upper Darby, Pa.
v
June 24 (letter of notification) 6,000 shares of 5% cumu¬
lative preferred stock. Price—At par ($50 per share)*
(Continued
on page
46)
*
-
y
46
THE
(142)
;
-
' (Continued from page 45)
•
COMMERCIAL
&
FINANCIAL
CHRONICLE
writer—R. S. Dickson & Co., Charlotte. Proceeds to pur¬
real estate, construct warehouse, office and dis¬
ibasis of 4.4
play
.
no par value common stock
(of which 249,930 shares will be issued to present conjistockholders on the' basis of. two additional shares
for each share held, and 100,000 shares to be sold at $10
la share to holders of preferred stock warrants). Net
proceeds ($2,854,570) will be used to retire outstanding
loans, finance improvements and provide additional
i
working capital.
chase
Underwriter—Wright, Wood
&
Co.
Proceeds—To Ac¬
quire common, stock of Philadelphia & Western RR.
Plymouth Rubber Co., Inc.
(letter of notification) 1,000 shares of
Price—$5.12V2
Dunbar
&
planned.
share.
per
common
Underwriter—John
•
B.
Co., Los Angeles, Calif.- No public offering,
Proceeds—To selling stockholders.
tive preferred stock
Price-^25 cents.
Hughes and Co., Denver.
Underwriter
participating
Names to be determined
through competitive bidding.
Probable bidders^ Morgan
Stanley- & Co.; White, Weld & Co. and Union Securities
Corp. (jointly.).
•
Real
Proceeds—For property additions and
Price—$100 per share.
No underwriting.
Aviation
ments.
Corp., Long Island, N. Y.
($1 par) common stock, issu¬
able upon the exercise of stock options.
Options for this
stock, exercisable at $7.25 per share, are held by eight
individuals and the estate of another, now deceised.
optionees
may
—For general
•
reoffer shares purchased.
1
funds.
Research
Cer¬
of notification) eight shares of common.
share. New equipment and expansion.
underwriting.
.a
' <
*
Price-—$1,0CQ
r
,
Coral Gables, Fia.
June 30 (letter of notification) 3,000 shares 6% cumu¬
lative preferred stock and 15,000 shares of common stock.
To. be offered at the rate of one share of preferred and
five of. common for $100. Proceeds are to be used to inr
•
Riddle Aviation Co.,
crease
No underwriting.
physical properties.
rahan & Co.
.Michigan
.
June 22 filea
ible
defining Corp., Mount Pleasant,
(par $12.50) and 242,000 shares of
Offering—All of the pre¬
ferred shares and 44,000 common shares are to be of¬
fered
for
stock
preferred
common
stock (no par value).
publicly, 135,000
conversion
shares to be resumed
stock and the remaining
common
of preferred
63,000 common shares are to be purchased principally
by officers and employees; Underwriter—F. Eberstadt
& Co. Proceeds—Plus a $1,30.0,000 bank loan to acquire
168,422 shares of $1 par Roosevelt
at $9.04 per share, 2,500 shares pfi
capital stock, at $444.45 per share,
L. Maguire, Inc., no par common
Oil Co.
common
SimralLCorp.,
stock
no par
and 1,000 shares of C.
stock, at $631.45 per
$haref for a total consideration of $3,265,110. Expected
about the middle of July.
,
.
•
Sangamo Electric Co., Springfield, III.
June- 29 (letter of notification) 8,500 shares
(no par)
stock, (stated value $8 a. share).
Price- —
$33,625. Underwriter — Paul H. Davis & Co., Chicago.
Proceeds will be used to partially reimburse the* treas¬
common
ury
000
for expenditures in connection with
plant at Marion, 111.
a
new
$1,000,-
Sanger-Bros.,
Inc., Dallas, Tex.
June 25 (letter of notification) 2,000 shares of common
stock (par $2.50).
Price-^At market (about $11.25 per
share); Underwriters—Walker, Austin & Wagener and
Stifel, Nicolaus & Co. Proceeds—To selling stockholder.
Savoy Oil Co., Inc., Tulsa, Okla.
shares (250 par). Under¬
Offering—Stockholders of, record June
writing—None.
30
given rights to subscribe at $2.50 per share on or
before July 16 for 100,000 new shares at the rate of
are
two-thirds
of
a
share
for
each
share
held.
The
other
50,000 shares will be issued to officers and others at $2.50
per. share upon the exercise of warrants. An unspecified
number of shares may or^may not be offered for sale to
the public.
Proceeds—To be added to general funds of
(Ed.)
&
Co., Inc., Milwaukee, Wis.
July 2 filed 15,000 shares of cumulative preferred stock
(par $100).
ceeds—For
Shoe
be
offered in Indiana
Inc., Chicago,
III.
general corporate
by amendment.
Pro¬
(no par), with class A
common
attached and 25.000 shares of
•
Southern Radio Corp.,
Proceeds
Charlotte, N. C.
July 1 (letter of notification/ 2,500 shares of 6% cumu¬
lative preferred stock ($50 par);; Price—Par., Under¬
.
I
-
reported
1
late in
>
Stanley
'gan
•
Offering
—
Inc., .New York.
Temporarily post¬
To be made to common stockholders
the basis of one share for each, five now
U. S. Grant Mining Co., Butte, Mont.
21 (letter of notification) 70,035 shares
June
.
^
(10c par)
June 16 (letter of notification) lu,uuu shares of common
stock (par 500). Price—At market
(about
per
parent.
Probablebidders—Halsey, Stuart &
(bonds only); Kidder; Peabody & Co. (alone
share).
Underwriters—Willis H. Burnside & Co., Inc., and Mercer
&
Co.
•
Victor
Proceeds—For
account
of
three
Co. (on bonds
preferred); Smith Barney & Co. and Goldman,
Sachs & Co. (preferred only). Proceeds—For construc-
Products
Corp., Hagerstown, Md.
notification), 42,800 shares of common
stock, of which. 21.,503 shares will be sold, to-single-holder
of; the majority of, the outstanding
voting, stock and
21,297 shares, will be offered publicly. Price—$7.50- per
tion.
•
Proceeds—To increase word¬
.
bidders—Halse.v Stuart & Co. Inc:; Salomon "Bros &
Hutzler; Harris, Hall &-Co. (Inc.)
.»
?
>
,
common
To pay bank loans and furnish
No underwriters.
July
(letter
of
•
-Public
Service Co.
-
of New Hampsbiret
asked the SEC for authority to bor..
notification)
July 6 the
company
$5,500,0QQ by, Oct.
•
Richmond Water
June
and
preferred
22.00(1
shares
,
stock.
-
*
•
V
Corp..../'
y.
.
r
„
,
,
Go*/,t
JStockholders will- vote/July 23 on; increasing: authorized^
common
no par value,-from 150,000 shares to 250,r
Company has no present plans for
marketing
stock,
000 shares.
Prospective Offerings ||
American
Buslines, Inc., Chicago
company applied to ICC for authority to issue
(a) $1,500,000 15-year debentures (to be sold privately
to institutional investors);
(b) 100,000 shares of new
cumulative' preferre'd *stoc&,.~no. par value, "(of which
July 2
45.817
shares
will
be
offered
in
outstanding 10,413 shares of $100
exchange for present
par
preferred stock
on
^'
refunding of outstanding
Traditional: uhde¥v)r-itev,;
;Taylor-Wharton: Iron &
common
4.,
Co.,
By .tljat .dater it expect^
V
Works
24, reported considering
bonds
W. C. Langley &
Co., Chicago, HI;
stock (par $.1), * Underwriter~-Wmi Ci Roney & Co. Price
by amendment.'
'
J,
*
•
r
14 will vote on increasing the
authorized capital stock (par $100) from 2,000,000 shares
;to 4,000,000 shares.'
.f
^
on
"to issue $5,000,000 of .bonds,
Price—$100 each.
working capital.
24
Stockholders
.
r
^ Tekgrapht Cffk
England Telephone!
r&w up, to.
Young Brothers* Ltd.r Honolulu, Hawaii
June 30 (letter of notification) 2,000 shares of
May
New
.
•
Zonolite
•
loans, stock proceeds for general corporate
*
- : "
Mainiy; for development.
stock.
.
able
pany and its subsidiaries under an employees' purchase
plan.; Proceeds—Of debentures to be applied to prepay¬
Oil Cq*, Alamosa, Colo.
April 30 filed 10 000 shares of common stock (par $10).
Underwriting—None, Price^r$10 pet' share. Proceeds^
-
Proceeds would be used to finance part of cost of
$6,279,730 for Diesel-electric freight locomotives.^ Prob¬
Underwriter—Kuhn, Loeb & Co. (for de¬
Stock will be offered to employees of cotrif
.
RR.
icates.
amendment.
p
.
1948, and to advertise for competitive bids. Court set' a
hearing for July 29 on question of issuance of certif¬
We&tinghouse Electric Corp* (7/15)
June 24, filed $80,000,000 of 25-yean convertible debs; and
900,000 shares of common stock (par $12.50). Pricer—By
Yeakley
-
.
Missouri. Pacific
Guy A Thompson, trustee for the road, has been author¬
ized by the Federal District Court in St. Louis, Mo., to
apply to the IQC for authority to issue $4,709,000 equip¬
ment trust certificates, series KK, to be. dated; Aug. 1,
ing capital.
ment of bank,
Inc.
bonds
and
June 28. (letter of;
bentures).
Co.
on
with group on preferred); Drexel; &
and
selling
Statement effective.
share. Underwriter—None.
Corp.
•fc*
Metropolitan Edison Co.
July 1 reported to be planning issuance of $3 500.000 first
mortgage boncjs, 4.0,000 shares of preferred stock and
$2,000,000 common stock. Bonds and preferred stock to
be sold6at competitive bidding, and common stock to
Mfg. Corp*
$3
'
Manhattan Coil
will vote July 16 and 17 on authoriz¬
issuance of 300,000 shares of new 6% cumulative
convertible preferred stock at par ($100 per share) and
on eliminating the present authorized but unissued em¬
ployees stock and 12,000 shares of 5Y2% cumulative con¬
vertible preferred stock, par $25.
_
United States Television
Halsey, Stuart & Co. Inc.; Mor& Co.; The First Boston Coro.: Shie'ds &
Weld & Co. and R. W; Pressprich & Co.
ing
capital stock.
Price—25 cents each... For machinery,
•equipment and development of mining properties,,, No
underwriting.
Hicks
possibly
The stockholders
Proceeds — Expenditures for equipment and fa¬
cilities, retiring bank loans and debentures.
stockholders.
Co.
market,
able bidders to include
c",,
Lines, Inc., Chicago
June 22.
on
in
be
J, 1948; The comp&hy is, contrbjled. joinffy
by New York Ceotrai RR, and Baltinioxe
Qhio R^,
and it is expected that the conlerripiated bond issue.; wiii
bear the guarantee of the two proprietary roads. Prob¬
•
on
Terminal
will
dated June
Underwriter—Harriman Ripley & Co.,
of record
RR*
company
Offering, ex-
July, with $9^50,000 first mortgage 20-year bonds
Price—By amendment.
•
-
additional stock.
stock reserved for
Underwriter—Lee Higginson Corp.'
-^For general corporate purposes.
warrants.
*
-
-
Lakefrout Dock &
Co., White,
(jointly).
(7/20)
share purchase warrants
common
r
Van Sickle, Inc., Emporia, Kan,
about-July
4-. &. ■
July
>
purposes.
Corp. of America, Columbus, Ohio
of record Aug. 2 will vote on
class of convertible preferred stock to be
a
in series.
* pected
•\
,
Underwriters—Name
Hydraulics,: lncL
stockholders
only^Un-.^Kenneth
June 7 filed filed 369,618 shares ($10 par) common stock.
June 28 filed 25 000 shares of cumulative preferred stock
•
To
Fund,
United Air
-
,j Schuster
dividends.
agement-Co.
company.
•
:* - ?
• j Greer
issued
ing price to the public. $48,927,375. Proceeds—To invest
in securities of companies in .the field of television, radio
and electronics.
Underwriter—Television Shares.. Man¬
purposes.
June 8 filed 150,000'common
Glore, Forgan & Co.; Blyth & Co., Inc., The Fir$t
Corp. and Central Republic Co. (jointly); Leh¬
Lazard Freres & Co. (jointly); A. Q.
authorizing
held..
(7/44)?
i35,uuu snares of 6% cumulative convert¬
for sae at com¬
Probable bidder^ in¬
up
Brothers and
Common
June 24 filed 4,987,500 shares of common stock
(par $1).
price—At market. Proposed maximum aggregate offer¬
poned
Roosevelt O*1 °-
(8/17)
(letter
Television
•
"
Riley Stoker Corp., Worcester, Mass.
June 3 (letter of notification) 7,000 shares ($3 par) com¬
mon stock.
Price—$11% per share. Underwriter—Han-
Co.
& cn
Toronto,
derwriter—City Securities Corp. ' Proceeds—To retire
$225,000 of promissory notes and for working capital.
per
,>
15
accrued
4
Inc., New York
June 30 (letter
No
Service
approximately 574,000 shares of
by Halsey, Stuart & 'Co. Inc. and
Co., Indianapolis, Ind. (7/15)
of* notification) 3,000 shares of 5
Kansas Soya Products Co., Inc. (7/A'B) ' ~
!
cumulative preferred stock (par $100).
Holders, of 492;;/ An offering of approximately 2,130 shares of $5 cumushares of presently outstanding 6% cumulative preferred- ; lative
preferred stock and 78.000 shares of common stock
stock will be offered in exchange 492 shares of the new 4 is
planned shortly. Price^—$95 a share for the preferred
5te%; preferred: stock, share for share. Price^a^anfe^hd $1.25 a;:shate*:for the commotio Underwriter will/Me
June
Proceeds
£
Foundation,
Public
that
stock owned
^Boston
Tanner &
.
June 4 .filed 42,000 shares
tain
Illinois
1. reported
clude
Canada.
Proceeds—For mine develop¬
'•
/V'' W'-"
''
share.
a
Inc.
approving the cre¬
$6,000,000 cumulative
on
of
Middle West Corp; will be put
petitive bidding around Aug. 17.
*
cents
Central
.
common
.•
Price—60
issue
preferred stock which will be convertible into
stock for a period of approximately it), years.
Issuance is planned in the late summer or" early fall.
Underwriter—F. S. Moseley & Co. ' Proceeds—For plant
man
Co.,
authorized
an
common
•
Underwriter—Mark
&
of-
fJuly
offices. No underwriting.
Daniels
Bigelow-Sanford Carpet Co.,
| modernization and additional working capital.' .;\
Tabor Lako Gold Minos* Ltd.* Toronto* Canada
April 2 filled 300,000 shares (par $X) preferred stock.
To obtain capital to transact business.
■^Republic
160,000
Loan Co., Cleveland
(letter of notification) 3,000- shares of class A
preferred stock. Price—$100. To open three new
6%
Estate
lative preferred stock (no par).
par), and
30
branch
Equities, Inc., East Orange, N. J.
(letter of notification) 3,000 shares of $6 cumu¬
July 1
($1
Sun Finance#
June
improvements.
Bids—Bids were asked to be submitted
July T, hut. company postponed sale for twp weeks.
•
stock,
'
second
;
preferred stock and $2.50*'for the common. This stock
is being offered py stockholders' who* are member# of
•the Belt family.
($100 par) cumulative pre¬
—
preferred
No definite plans have been made for utilizing
Aug. 16 the stockholders will vote
ation
shares (50c par) common stock,, of which. 40,000 will be
For working capital.
June 11 filed 200,000 snares
ferred stock.
Underwriters
I
sold and the remainder reserved for conversion. Under¬
writer—White & Co., St. Louis, Mo. Price—$8 for the
Public Service Electric & Gas Co.
:
•
Steak 'n Shake,. Inc., Bloomington, III.
Fob. 2 filed 40,000 shares of 50c cumulative Convertible
R. L.
—
Products Co.
the additional stock.
j
(par $100).
Price, par. Underwriter
—Fidelity Securities
Investment Co., Inc., Asbury
Park, N. J.
Working capital.
*
Metal
American
shares,
.
Co.,
Co., Denver, Colo.
May 11 (letter of notification)f 400,000 shares (100 par)
stock.
•
June 28 stockholders approved an increase in the author¬
ized
common
stock from
500,000 shares to 1,000,000
Squankum Feed & Supply Co., Inc.
Farmingdale, N. J.
May 24 (letter of notification) 1,000 shares $5.50 cumula¬
Powder River Oil
common
To be offered in units of four preferred and one
at $4 a unit. To purchase a tourist court, build
homes and develop a dude ranch. No underwriting.
Portsmouth, Va.
June 23 (letter of notification) $25,000 of 4V2% 10- year
income bonds, due June 1, 1958. Underwriter—Virginia
Securities Co.
Proceeds—For working capital.
Price—
par.
Enterprises, Inc., Prescott, Ariz.
(letter of notification) 60,000 shares of common
shares of 8% non-cumulative preferred
mon
common
Emery, Jr., selling stockholder.
Expected at
•
Southwest
stock.
tixioaay n) iu,u00 shares of common
stock (par $1).
Price—$3.12 V2 per share.
Underwriter
—Baker, Simonds & Co.
Proceeds — To go to John C.
Finance
'
stock and 240,000
vt
Portsmouth
space.
June 29
Plywood, Inc., Detroit, Mich.
June1 UitW
j
to a group
349,930 shares of additional
30, 1948, but the underwriter will not offer this publicly
at this time.)
vi
stock.
shares for each old share held, and the
of underwriters); and (q)
new
fremainder sold
(Company will also sell the underwriter
$25,000 of its common stock at its book value as of June
June 18
Thursday, July 8, 1943
•
Texas
Stockholders
ization from
value to
100,000
in
one
"
Gas,Transmission Corp.
June
on
28
increased
authorized
2.000,000 shares of capital stock of
3,000,000 shares of
shares
or
;
more
of
preferred
series.
commqn
stock
There are
stock
(par
no
capital¬
no
(par $5)
par
anj
$100), issuable
present plans for
issuing the preferred stock. One share of new common
was issued in exchange for each, of the 1,265,383- no
par
shares outstanding.
"J
.
Volume
168
Number 4714
THE
The New
(Continued from
15)
page
the terms of
industry faces—the fact that *
collective bargain¬
ing agreement. That is sound and
good. But to put any question of
the
American
a
and
*
,
"
Let us look at what this
challenge means to individual
Companies in the months ahead.
nies
individual
your
solve
problems
their
make
can
relations
break
or
the
individual
competitive enterprise
system 'by- which all Americans
industry
is* whole¬
have
dverall policy it is to take a
positive and vigorous stand for
the goals of the whole American
one
people—concentrating our efforts
on the practical means to attain
those goals.
;v *'
But monopoly
.
is
horse of
a
an¬
many
times
ment's
responsibilities subjected
arbitration as a result of out¬
to
side
pressures, misinformed pub¬
this issue if
on
the
tasks
We
and branch.
now
And
destroys
bargaining.
life
shall
of
by replacing the flexible,
adaptable system of free enter¬
prise by a government-controlled
lastingly continue to do
so.
So
stand convinced that every de¬
cision of management in the field
of
labor-management; relations
we
must
on
a
stand the test of its effect
competition.
the' imperative need for increased
productivity must not be allowed
sound thinking • and a
positive stand
principles.
fundamental
on
Muddled Thinking on Labor-
#
Management Issues
recent years there has been
good deal of muddled thinking
and
divided
counsel^ on certain
labor-management
The
gradual expansion of the area for
collective
its
in
closest
our
issues.
■
bargaining has brought
wake
heart
of
the
results
that
demand
examination.
For
Industry has made great
strides in this direction. But there
is much more that needs to
be
done.
Individual companies have
I
refer
to
industry-wide and mass bar¬
gaining, Which have led to the
shattering experiences of indus¬
try-wide and nation-wide strikes
in industries that critically affect
the public health and safety. This
continuing responsibility of
doing
everything
within
their
power to
provide
an
ever-increas¬
ing degree of regular work and
pay for their employees. Many
ways have been worked out and
used
successfully
by
individual
companies to eliminate or modify
seasonal factors. Through this
ap¬
proach many short-term layoffs
have
already been eliminated.
I
think of few greater contribu¬
tions that any company can make
to America's greatness than
to
can
study its
demands public attention and the
operations and
rect every factor within its
most careful examination. Should
trol
this trend continue and the public
be left at the mercy of such, crises,
and setady pay the
year round.
we
can
cal
and
results
as:
(1) Prohibition of the right to
strike.
Compulsory arbitration
with government setting wages
and imposing its decisions in the
field of employer-employee rela¬
tions.
And
(3) Rapid extension of
intervention
ment
economy.;
and
govern¬
control
of
,
con¬
prevents steady work
Another
area
trial management must take
action
is
that
of
con^em¬
ployee behefit prbgrams and in¬
dustrial
health
measures.
companies have done
a
Many
fine
and
constructive job of providing pro¬
tection to their employees against
the hazards of
sickness, disability,
old age and death. But
you know
as well as I do how
much more
.
AH of these are dangerous. They
threaten the very fabric of our
economic life. To avert such dan¬
gers we must safeguard the
of each individual
right
company
bargain
with
its
to
people, or
with the union that its
employees
have* chosen of their free will to
own
represent them.
Another
agement
issue
must
devote
headed 'thinking
The
fundamental
arbitration
as a
which
on
is
man¬
hard-
arbitration.
principle
of
device for resolv-
ang\industrial disputes has much
to contribute
Bui"r
to industrial peace.
it. is. essential that manage¬
ment
and
understand the significance
implications
of
arbitration.
Properly safeguarded, and limited
to
the
interpretation of
an
exist¬
ing labor agreement, it is a tool
that has much to offer both labor
and management.
•
Properly safeguarded, with the
jurisdiction
of
the
arbitrator
clearly stipulated, it can clear up
needs to be done.
;For one thing progressive man¬
agement is concerned with the
welfare
and
health
ployees. Plans
are
of
its
em¬
needed to help
employees to weather their
per¬
sonal emergencies.
One of the fundamental desires
of employees — one that looms
very large in their thinking—is
the quest for security in
sickness,
in old age, and for their families
when
death
health
and
programs in individual
and
medical
companies,
attention to the conservation
of employees' health are essential
to good industrial
operations.
J These
prompt
handled
are
issues
which
attention. 'They
need
can
be
who
took
Sell
Utility Issue
Stuart
&
Co.
planning
of $30,000,000
Nashville
&
3%%
first and
week's
of
RR.'s
shares
Louis¬
last
offering
ville
Service Co.
55-year
mand for the
This
which
three
it
into
the
had
Inc.
to
is
market,
firm
is
the
Public
stock.
expected
registration
which
for
would
opened
indicated
be
Illinois
common
close
to
the
on
of
the
month
that
mean
go
block
bids
would probably be solicited and
offering
been
would
groups
Central
before
de¬
obligations.
was
of
The
refunding mort¬
foi?
gage bonds on their lone bid
the issue encountered a brisk
workmen's
on
com¬
can
fluoroscope
basic and
for
pay
in
about Aug. 17 next.!
on or
the
imposed
high position
guard at
a
of
management.
we did
We
ing at
sure
did.
we
as
all
which
that
ment?
soon
as
paid
we
base
on
me
su¬
manage¬
on?"
But
one.
"Whom
formation from about any
change
in their rate of
pay, hours and
working conditions? Do they get
it first from their foremen?
Or
from the
I- can say now that we have an
ironclad agreement with the union
that
change
no
centive plans
in
the
hourly
conditions,
are
or
before the employee's
announces them.
I
in¬
to be announced
fore¬
own
man
>
also point with most im¬
modest satisfaction to the
front
page of our little company
maga¬
zine. There we list the
directors,
and the various arms of
manage¬
can
ment—including
our
foremen—all
together.
These
that
the
can
buckle
that
kind
of
things
up—and
American
go
the
leadership
requires today.
spot.
pace
one
big; boss.
ex¬
and
the
"all
only
moved
selling
out
group
bonds"
of
reportedly
more
teamwork
roots up. '
Leader's
Guide—:
E. .Fisher—Industrial
Section,
of
in
California
Technology,
Re¬
Insti¬
Pasadena
initions, Interpretations, Construc¬
tions, explained and clarified—
almost
the
pro¬
issue
new
to
a
Glenn L. Shinn—Simmons-Board-
Publishing Co., 30 Church
Street, New York 7, N. Y.
man
complete halt this week with only
handful of
a
issues, including sev¬
railway
equipment
trust
eral
loans making
Largest
bids
offering
for
due
Co., 200,000 shares of $100
which
Strange
fact
preferred stock,
two
bids
were
DIVIDEND NOTICES
New
Jersey utilities
pretty much monopolized the new
market, what with New
Jersey Power & Light Co., open¬
ing bids for $6,000,000 of new 30year first mortgage bonds.
AMERICAN;
More
Active
v!:.
June
29,
1948,
quarterly dividend
a
seventy-five cents per share
in the way of activ¬
ity, not so much by reason of the
number of issues in
prospect but
because of their larger
more
COMPANY
CAN
COMMON STOCK
On
Week
Next week gives promise of
pro¬
viding underwriters with consid¬
erable
D.
of the
Dynasty —
M. Josephson—Chedneyr
Press, 127 East 69th Street, New
York 21, N. Y.
•
money
Next
Franklin
of
The—History
Emanual
scheduled.
In
Death
Roosevelt,
Roosevelt-Delano
for
up
Public Service Electric
was
& Gas
the roster.
up
declared
was
Of
the
on
Common'Stock of this Company, payable August
1948, to Stockholders of record at the close
16,
business July
of
Transfer books will
22, 1948.
remain open.
Checks will
:
EDMUND
be mailed.
HOFFMAN, Secretary.
propor¬
tions.
THE
ATCHISON,
SANTA
Westinghouse Electric Corp.'s
$80,000,000
of
debentures,
a
negotiated deal, tops the list for
the period with the proceeds to
be applied
to
loans.
plans
to
The
offer
receipts from
added
to
also
company
to
900,000 shares of
employees
common
which
general
of
stock,
would
be
The
clared
Cents
142,
FE
Board
of
($1.50)
AND
COMPANY
of
One
1948.
has
this
day
de¬
Dollar
and
Fifty
per
share, being Dividend
Common
Capital Stock
of
the
on
Directors
dividend
a
TOPEKA
RAILWAY
New York, N. Y., June 29,
••
No-.
this
Company, payable September 1, 1948, to holders
said
Common
Capital Stock registered on
the
books
of
the
Company at the close of
business July 30, 2948.
of
.
Dividend
of
checks
Common
able orders
will
be
mailed
Capital Stock
who have
therefor at this office.
D.
corporate
Close
behind
comes
C.
WILSON.
120
to
holders
suit¬
filed
Assistant Treasurer. :i
Broadway, New York 5,
N.
Y.
New
Jersey Bell Telephone Co. with
its offering of $55,000,000 of 40debentures up for competi¬
tive bidding. At least two bank¬
year
from
It wants
us
the
to
grass¬
set
the
in,
two
ways.
One: pace
full steam ahead
right
through cumbersome, impersonal down the middle of
the big road.
—
The
Board of Directors
Manufacturing
Company
has
HELP WANTED
wanted
by high-grade,
over-the-counter firm.
man
be
with
offered
weekly
basis.
"ACF"
a
a
Address
our
Room
2800,
*
clientele
will
drawing
aeainst
New York.
well capitalized
An experienced
established
an
declared
twelve
TRADER-SALESMAN
account of $150
liberal
commission
Advertising Agency:
55 Liberty Street,
>'
of
Wentworth
ing groups, headed by dyed-in-
our
more
4,
Calif.—Paper—$1.00.
Freight Rate Applications—Def¬
of
our
production, *
'
,
Conference
tute
Kans.-^
small
market
slowed down
Lawrence,
*
lations
out
Relatively Quiet Week
united, whole¬
The public is our
And there is no
land. It
freedom—more freedom. It
—
have
Rates—Mignon
University
of
Kansas
Publications,
Waldo
balance
Evidently because
tracted
holiday the
the
teamwork, clear-cut responsibility
and
this
Railroad
—
Paper.
Friday.
as a
mistaking its voice
wants
only
its hands
Class
Morton
funds.
public has put us on
The American people
times require
hearted team.
wants
to
was
leaving
bank
are
beyond—everlastingly hitting
The
had
on
prepayment
we
pace
have
Tuesday
par, cumulative
was:
get their in¬
wage, working
to
Complicated ABC's of Changes
in
amounts held by dealers.
two
fixed that up—fast.
His second question
do your employees
soon
almost
work
that
reported
quickly
—
Or does their pay
stop as
there is a hitch in the de¬
off
was
the
out in good
long holiday
selling group
at the close of business on
arms
and
like
the
$4,500,000 remaining
said
sent
foremen
your
are
livery of material to
I
was
moved
to
and
was
said, "How many of you
say with complete truthful¬
ness
weekend
off
He
pervisors
issue
prior
on
Then he asked
more
questions
hotfoot home.
can
style
ness
did
Bookshelf
figure of 100 to yield the
a
buyer a return of 3.75% to matur¬
ity in 2003.
treated
were
—
Man's '■ i
bonds in, proceeded with reoffer-
meeting like this and
thought
bidders by the rail¬
on
very
me
asked how many of us
foremen and-supervisors
of the restrictions
With the resumption of busi¬
a
took
once
Business
syndicates
Paying the company a price of
98.26991, the group, which bid the
The
sent the company.
Someone who now holds
two
road.
with
obvious that it is
that
because
ness
lot
a
equipment
so
developed
more
Management pect both management and labor
can help to provide
this protec¬ to stop squabbling, get down to
tion. It is &
responsibility that workable human principles, for¬
management cannot Ignore.. get any
petty differences and rise
Closely allied to this problem" is to the new productive
Expanded
few for both issues.
a
reported
$17,000
strikes.
the matter of greater health
pro¬
tection for industrial
employees.
already in the
for bonds, some for
some
Halsey,
than
saved
we
shop stewards?"
Ill be hanged if I wasn't
caught
which indus¬
flatfooted on that one too.
But
in
preferred stock
groups
and
had decided to forego the busi¬
alone
.
structive
(2)
our
which
cor¬
Employee Benefit Programs
expect such drastic, radi¬
undemocratic
own
running,
year
cluding foremen and first line
supervisors must be given the
support that they need to repre¬
ment.
five
stock
That
principle
management, in¬
.
Co,
through competitive bidding, soon,
its
entire
noldings
of
574,087
Bankers
one
This is the fudamental
that all arms of
sive campaign to
help companies
and
eliminate
wide
swings in production and employ¬
Power
running. But as time for open¬
ing of tenders rolled around it
so
two; years now the NAM
driving ahead an inten¬
States
no-par cumulative
Report
too often overlooked.
has been
Northern
Bankers to
use¬
something
free enterprise system
steady work and steady
moderate
proved its
hilt. Why for
the
Let's close this list of
manage¬
ment's next moves with
our
provide
second
Role of Foremen and
Supervisors
people's hopes and fears there is
a question
by which all that we
believe in stands or falls. This is:
Can
the
had
we
pensation. You
American
the
In
a
the
By
that kind of
money.
pay?
The dust kicked up by past in¬
stances .of industrial strife, and
to obscure
At
fatigue
erating
of
economy.
ever¬
eyestrain and
lead directly tc
are)
(Minn.) will open bids for its
$10,000,000 of first mortgage 30year bonds and 200,000 shares of
stretch of 275,000 hours of direct
working time we operated with¬
out a single lost time accident.
,
It threatens Americans'
way
as
accidents.
fulness to
practice.
genuine collective
It
factors
competi¬
one.
Reporter's
in¬
year in which our program of
health examinations had been
op¬
Concerning compulsory arbitra¬
Providing Steady Employment
it root
oppose
we
serious
tion I need say no more than
that:
other color. We have always been
against it.
physical
a^nd responsibilities demanded by
principle.
for
since
bidding made its debut,
with
remember
rivals
47
expected to fight it out for this
Our
is
progress
I
almost fired
was
even such
bur nation.
It is unsound in
It has failed in
This
rapid.
process
industry is to
unprecedented
and
—
had any occupational
hazards, we
wanted to know it—at once. And
I was convinced that in the
very
nature
of
a
repetitive
opinion, or government inter¬
Management must stand
fulfill
dif¬
dynamic republic
and of our
intensely human, free
competitive enterprise system.
augurating twice-yearly complete
health
examinations,
including
fluorscope equipment, for O'Sullivan employees. I felt that if we
we
basic issues of manage¬
seen
and
tive
indiscriminate
an
progress.
when I
the
reputation of being
against. You will find that if this
ever", was true, it is no longer
characteristic of us.
If we have
trial
ability to
efficiently or
business
which
the-wool
our
personalized, localized, hu¬
identification of their
employees' well-being with indus¬
management's
the
run
of
a
real
firm
it shows its ugly head. It is
sometimes said, and. perhaps witn
reason, that in the past the NAM
earned
staggering to the left or jib¬
ing, to the right, but in the full
current
legislation
into
(143)-
Not
manized
vention.
heartedly against monopoly wher¬
ever
to
destroy
lic
live and thrive.
■American
;
successfully. Too
compa¬
labor
CHRONICLE
grab bag. Or, two: through indi¬
vidual companies
leading the way
ward the business. This
may well
ring¬
ing
restrictive
ferences
tration is to invite decisions
by a
third party who is
unqualified by
experience or responsibility to¬
,
,
Challenge to Individual Concerns
How
FINANCIAL
lumps individual needs
public' trusts industry
to show the
leadership it takes to management's responsibility, ob¬
lift productive
teamwork
to a ligation, duty or function in ques¬
great
new
levelof - human tion through the process of arbi¬
achievement.'
&
in Industrial Relations
'
••
COMMERCIAL
and
a
one
dividend
-
half
of
cents
(12V2c) per share on the out¬
standing common stock of the
Company, payable on August
20, 1948, to stockholders of
record
ness
at
the
close
of
busi¬
August 2, 1948.
Checks
will
be
JOHN E.
mailed.
McDERMOTT,
":
Secretary.
48
(144)
>
THE
'
COMMERCIAL
FINANCIAL
&
CHRONICLE
Thursday, July 8, 1943
under the
BUSINESS BUZZ
V'V.'A
•h f
relatively conservative
construction standards of FHA.
.v.
\
•
'
.
/
v.
Veterans
still
can
GI
get
loait
to make it
possible for them to finance the
guarantees,
purchase
of
lenders
will
FHA
WASHINGTON, D. C.—If one were prevented from having the
slightest chance of winning the half mile race because he had a slight
case
of tuberculosis, the
additional handicap of a broken ankle
is
too
the
the
week that the Southern
revolt, in
opinion, is not serious. Should
there
develop a
close election,
his
the
revolt
would
be
to
prove
the
Southern
something, perhaps
that
would
actually
thing
his first elected term
On
the
other
business
swing
and
hand,
from
toward
not
if the whole
represents
away
New
problem.
their
of
trying
policies, the Southern revolt could
Eisenhower
become
left
the
and
to
tease
the coup
more
the condemned man after the po¬
litical firing squad had finished,
v
It
is
too
early, nevertheless, to
write off the Southern revolt.
tween
Presidential^
nominated
ready
Alabama
large
and
electors
in
that
votes
al¬
primaries in
Florida
prospect
electoral
Be¬
and
the
Mississippi
will
be
for
cast
but Truman, there at this
.anyone
writing,
to be 52 electoral
votes pledged against Truman.
If
the
appear
Southerners
next
Philadelphia take
inate
a
week
walk and
on
General
the life-
have
didate,
the
number
of
To those who
pooh pooh the sig¬
nificance of the Southern revolt,
knowledgeable
a
can¬
taking
which
circuitously
in
the
be
York
the prospects
to
seem
.
where
the' other
On
hand, should the
election become
of those big
one
Africa, in
moment of weakness,
a
him back here
as
It would just'make
the defeat greater.
Southern
which
is
revolt,
far
possible effect upon
The
significance
than
an
is
that
If
of Southern Democrats at Phila¬
delphia
next
nominate
week
their
own
and
they
"Southern
Democratic candidate for Presi¬
dent,"
open
stood.
then
the " split
will
be
and unmistakeably under¬
The split is there, never¬
theless,
even
if there is
no
all
four states,
two
or
of
three,
and
they
more,
my
assistant.?'/
control
means
the
course
of
voutly
consummation
a
to
be
desired
de¬
by
the
Democrats and much to be ab¬
.
tribes against Congress.
across
two years of the Hoover Admin¬
istration,
when
controlled
the House.
members
and
San
Mejia, Russ
of
the
Francisco
New
Stoclc
the
Democrats
Under
the
to
The
Financial
\
Chronicle)
1
that maybe
the
the running mate for Mr. Truman
next week. Former House Major¬
did not have superior judgment
to
the
500-odd
men
of
Con¬
ity Leader John
gress.
FRANCISCO, CALIF. —»
Olga M. Poulsen, formerly with
Hannaford & Talbot, is now with
Wilson, Johnson & Higgins, 30$
Montgomery Street.
of
C.
W.
McCormack
Massachusetts, Senator Joseph
O'Mahoney of Wyoming, Rep.
Mike
Illinois
of
Tydings
of
and
Millard
Maryland,
Supreme
Court Justice William O. Douglas,
and
former Senator Jackson of
Indiana.-
Belle Isle
Mr. Truman is thought to
taking
with
Texas Gas Transmission
President
the
a
same
U. S.
political
chance
kind of an of¬
main
timers
campaign
recall
Mr.
lit
•
It is
ing
becoming clear that
now
was
some
war.
lapse.
1932
!
Seatex Oil
supports enacted since the
Title VI, which provides for
cost,"
was allowed
M. S. WlEN & Co.
to
ESTABLISHED
The secondary market
by
Congress
for
1919
was
Members N.
again.
<
all but cut it clear of the
retained
Stopped, frustrated, and stulti¬
>
Lonsdale Co.
*
;
what the Congress did with hous¬
Tru¬
strategy,
Finishing
fensive.
sary current
with
Corp.
Dorset Fabrics
FHA insurance of loans at "neces¬
connection
man's
old
be
even
only
40
Y.
Security Dealers AsYn
Exchange PI., N. Y. 5
those loans which finance housing
Teletype N. Y.
HA. 2-87S0
j
1-1397
leadership of
one of the country's
political artisans, John
most able
Nance
Garner, then Speaker, the
Democrats made
the
HAnover 2-0050
monkeys out of
Administration
by
Hoover
the
He would nominally run for Pres-
!
CALIF. —4
in 1932
In
then
President
and
candidate
Trading Markets:
Ralston Steel Car
FOREIGN SECURITIES
.
-
Oregon Portland Cement
<
Riverside Cement A & B
All Issues
Spokane Portland Cement
■
P.ARL MARKS & TO. INC.
r
FOREIGN SECURITIES
-
v
n
.
/
SPECIALISTS
■
>
LERNER & CO.
Investment Securities
50 Broad Siree!
Also, when in opposition—up
until
selecting a new Presi¬
dential
Teletype—NY 1-971
Firm Trading Markets
substi¬
Democrats, the sanest
tuting their own program. It was
hope was that, anticipating defeat, John
Garner's skillful maneuver¬
the Northern left-wing and the
ing probably more than the late
Southern conservative wings of
Charley
Michael son's
political
the party could get together on a
propagandizing, which gave the
leader.
It was not so important
impression Mr. Hoover was a man
that this leader win th,e election as
without a program and with no
that he be able to bring. about
ability to act—because Garner had
some unity in the
party so as to
Hoover, as it were, hog-tied.
develop its strength in opposition.
Chronicle)
Event¬
ually the idea got
horred by the Republicans.
Republicans remember the last
by the
Here is a list of those who have
active hope for being selected as
Lucas
organization
his programs
Mr. Hoover took to writing dia¬
lic housing fight), Senators Scott
the
Senate, which
is
}
Mejia
Financial
SAN
Garner leadership of tjhe House,
tees
control
and
The
FRANCISCO,
(Special
I promised I'd bring
fied in all
if
con¬
tests in the/border states.
burying everything requested by
the
even
the
that
rump
convention.
For
tie. If the
a
one
or
one
Monroney of Oklahoma
(leader in the House for the pub¬
This
dis¬
party, but it will be a
party in opposition.
there is a rump convention
member¬
out
legislation in the 81st Congress.
the
disunited
Senate
up
three
losing
Democrats would head commit¬
goes
united
won
picked
of the
its "
election.
Democratic party not only
into
the
1948
election
a
come
would
however,
greater
the
also
significance to the!
a
some
Should the GOP lose all three,
Democrats
nificance to the election would be
in
are
jeopardy.
seats then
superfluous.
There is
seats
in
Virginia,
West
ship would
for the GOP, then the sig¬
sweeps
and
three
to
defeated
Wilson, Johnson Adds
"In
be
somewhat larger.
In a close fair that Democrats will hold
seats
this could be important. in
Democratic States and Republi¬
Right now Democrats and Repub¬ cans
in
normally
Republican
licans alike don't think it will be
States, barring a big sweep. The
a close election, but Nov. 2 is too
three border States are Kentucky,
far away to make it a gilt-edged
.
the
appears to
Republicans have
election
security.
cost,|
commit¬
proposed
or
by
done
Exchanges. He was formerly with
Schwabacher & Co. and Dean Wit~
ter & Co.
i
majority of six in the. Senate.
Oklahoma,
what
at
extensive
to
to
Building,
GOP
In other than three of the border
States,
added
it will
be
can
Cyrus B. Johnson has become af*
at this moment
armor
and
the
When Con¬
January
filiated with Davies &
led
\
chink
in
idea what
included
SAN
Mr. Roosevelt eventually to - take
Harry Truman.
the
result
a
With Davies &
opposition to
again as Vice-
Wallace
President
a
the
an
(Special
Southern
was
As
housing bill.
be President of
It
New York 4, N. Y.
AFFILIATE; CARL MARKS & CO. Inc. CHICAGO
10 Post Office
Square, Boston 9, Mast.
Telephone Hubbard 1990
Teletype B9 99
becomes
necessary—Southern
Democrats
become quite united in op¬
can
Herbert H. Blizzard & Co.
WILBUR SUCHARD
Chocolate
Company
Common land Preferred
position.
The first sign of this
already has appeared. All the
Democrats on the House Bank¬
orciusly
of
had
the
for
they been in
House, and
its
enactment.
that
Clear
thru—Montgomery, Scott
New York & Philadelphia
chances
not
of
as
lose
are
the
that
control
of
& Co.
If
there
they
is
may
a
GOP
the
the
will
Senate.
Republican sweep
pick
up
Susquehanna Mills
BOUGHT—SOLD—QUOTED
"I
con¬
In the
present
the
Empire Steel Corp.
4Cumulative Preferred
(;y
respon¬
main, however, the view here is
St., Philadelphia 9, Pa.
LERNER STORES CORP.
who would have opposed it
vig-
sible
123 South Broad
'
ing Committee backed the TEW
housing
bill,
including
some
trol
*;
probably
here
past South¬
a
revolt Henry Wallace would
the U. S. today."
ern
be the Senate.
votes which might be cast against
incombent President, might
Democrat
said: "If it wasn't for
unused
with
less rapid.
building
be
until
Construction:
building until well
fall.
meets
without
Weakest
electoral
in
felt
be
of
are
gress
however,
building costs will
reversed, even if price
be
rises
fi¬
home
guarantees
the
not
not
year.
housing
sustain
ments
at
nom¬
Southern Democratic
a
throw
will
VI
into
from
i.
,
has
bloom
effects,
the
inflation
wing¬
off
Its
rental
will
preserver.'
important than
de grace administered to
no
to
in
Title
the
Instead
taken
later
.
inflation
the
'probably
1933.
concentrated
revolt
in
ers
1
past if not as high as
nancing.
wings, however, did
on the recon¬
southerners
Deal
conservative
more
two
in the
been
get together
struction
cyclical
a
the
The
,
which
:
'
still insure 80 to 90 %]
can
Thus
even
to the Republican party after
President.
as
—
!
under Title VI.
if defeated, but be the
real active leader of the party.
If
he is defeated, Mr. Truman will
be, while the titular leader, as
lacking in influence in all prob¬
ability as Mr. Hoover in relation
preclude Mr. Truman from getting
1
probably will be much higher
than
politicos^-
ident,
a
loan, and the appraisal stand-*
a
ard
serious—because he couldn't win anyway.
way
view Mr. Truman's statement last
then
of
along
go
will not.
many
That
without
home
a
down payment, provided the price
of the house isn't too high and
FILING DEPT.
wouldn't be
however,
Senate seats
I
iKobbe & Company
INCORPORATED
Members National Association
of Securities Dealers, Inc.
55 Liberty Street, New York 5, N. Y.
Telephone
BArclay 7-2663
:
^
:
.
,
v•
Hill, Thompson & Co., Inc.
Markets and
;
Teletype
NY 1-277
120
Situations
for Dealers
Broadway, New York 5
Tel. REctor 2-2020
Tele. NY 1 -2660
@FedFRASER