Full text of Commercial and Financial Chronicle : June 1, 1944, Vol. 159, No. 4286, Section 1

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Final

Edition

ESTABLISHED

100

In 2

O
YEARS

Sections—Section 1!

omm

Reg. U.

Volume 159

Number 4286

New

Pat.

S.

Office

York, N. Y., Thursday, June 1, 1944

Price 60 Cents

Copy

a

Ichnston Given

Post-War Problems—Can They Be
Memorial Award
Solved Only By One?
Eric

A.

Johnston, President of

By DR. IVAN WRIGHT

-the Chamber of Commerce of the

Professor of Economics, Brooklyn College

United States, has been selected as
this year's recipient of the Captain
Bobert
1

Effort to organize post-war economic problems and analyze their

Memorial

possible management and solution leads

Award. Selec¬

that there is

tion of the

multitudes

?

made

1 comprising. 41,
i members rep-

for

resenting
every
section

failure

unless

appointed*

such

efforts

for

the

pur¬

by

the

j unction

with

A

nomic

prob¬

lems

up o n

d

w a r

eign

the

,

of

the

eco¬

For¬

which any one

Trade

problem will
Eric

The

A.

Johnston

depend and in

Chairman of the Committee, J. D.

cooperation

Fletcher, Vice-President of the
Caterpillar Tractor Company;
made the announcement on May

with

25
in

"

New. York's

with

National
The

affecting ;t h e
solutions

other

Dr. Ivan Wright
Trade Week,
presiding.
1
sions of society.
which takes the

Foreign

James S. Carson,

Award,

a

for

ohe is not pos¬
sible without

of

observance

which

solution

0 the World Trade Luncheon,
te' -Hotel Astor, in connection

of

main

economic divi¬

,

on page

2272)

No organization

Bit This Issue
Special

material

Interest with
activities

in

of

items
to

dealer
OF

appears

on

might

run

But

brief

a

c en

2280.

on page

subsidiary prob¬

into
t

many

volumes.

classification
r a

1

of

divisions

miliar

be

as

a

war

economy to a peace time economy.
This problem is so large and com-

(Continued

on page

2262)

City Bank of
York,

who

Buy War Bonds

Dealers

B. DORAU*

ship—Says Under Socialization Prices Are Not

Based On

tional

Costs And Therefore "An Honest Price
System Requi¬
site To Free Enterprise"
Disappears, So Socialization

under

During the last quarter century the people of this country have
become increasingly preoccupied with the distribution of their wealth
and income

:

;

:

><$——

and alarming-

ly

unco n-,

cerned

not

about

In

academic

if

it

previous

taken to scalp¬

the

which
for

a

volume of

a

to mock all

as

of

high
well-being.
a

of the

one

more

camouflaged and sur¬
reptitious means employed to ac¬
complish the economic scalping of

more

one

goods
*

make

higher
of well-

level

time

peace

conceptions

Socialization is

services

..

into

over

cultivated,

selves to pro¬

ducing

have

war

misemphasis,

standard of material

ing each other
rather .than
devoting our¬

t>f

carried

goods and services

have

we

this

would result in such

might be said
that

corrected

although we have given a dra¬
matic demonstration of the possi¬
bilities of full production which

a

vernacular

—-——1

Even the necessities of

Herbert

B.

Dorau

being.

class by another.

Address

It is

delivered

a means

before

R. H. Johnson & Co.

Exchanges
Rep.

na¬

debt;
viz: (1) keep¬
ing the debt
by

W.

R.

control

halting

government
deficits

Burgess

after the war,...
and (2)

preventing the increase ih.'
debt from unduly increasing the

volume of bank deposits and thus
promoting inflation. "A few years
ago," remarked Mr. Burgess in
discussing this two-fold problem,
"many people shook their heads
when Secretary Morgenthau said,
in

reply' to a question put in a
Congressional hearing, that he
would

not

be worried

to

the

see

national debt go to 50 billion dol¬
lars. At present, the debt is 185
billion
ceed

dollars, and is likely to

250

billion

before

the

exwar

is over."

Continuing, he said, "it is not
(Continued

on page

2257),

the

Institute of Transportation, at the
Waldorf-Astoria Hotel, May 23,
1944.

THE

(Continued

on page

CHASE

.

2264)

NEW YORK STOCKS, INC.

OF THE CITY OF NEW YORK

Bond

Brokerage
Broaden your customer

Service

*

Prospectus

HUGH

INVESTMENT SECURITIES

25 Broad St., New York 4, N. Y.
2-0600

two

prob¬
arising

out of the

Will Mean End Of Private Operations Of
Transportation
Services And Creation Of Government Monopoly

Established 1927

Chicago

to

lems

and Dealers

Member $ New York Stock Exchange

HAaover

the

ciation, point-

Means Of Subsidies Rather Than Government Owner

for Banks, Brokers

Geneva

of

prime

Hirsch, Lilienthal & Co.
-

dent

Presi¬

Bankers Asso¬

VICTORY

London

-

ed

for

_

other

also

is

Vice

NATIONAL BANK

Distributors

and

o I

National

New

Professor 6f Public Utilities and Transportation, New York
University

and

follows:

1. The reconversion from

Underwriters

which

the mind of anyone fa¬
with current
discussions

would

)

the

to

comes

General index

of

lems and related problems which

main

2258.

classification

economic problems
complete without enor¬

detail

mous

Convention of the Maryland Bankers
May 26, W. Randolph Burgess, Vice-

on

American

less

post-war

would be

STATE

the

PENNSYLVANIA
page

and

reference

or

Baltimore,

Transport And

'.'",'7By HERBERT

duction.

Classification of Problems
of

of

Chairman

increased pro¬

'

(Continued

address before the

Association

c o n-

n

all other

1 Council.

:

i

Trustee of the

National

.

a r e

Impetus Toward Inflation
an

is

of the country

Board

.v

them

are

In

the

doomed, to

and

pose

;

post-war economic problem, but that there

Socialized

by

Committee

a

one

move

quickly to the conclusion

of post-war economic <&problems and,, like all the economic structure, each is part and
parcel of the others. Any attempt
to segregate one main problem or
one main line of problems arid de<: "/■
- r
- ; - vise
solutions

re-

annual Award

; was

no

To Increase Bond Sales To Investors And Thus Re¬

ers

Sometime Special Executive of the New York Stock Exchange

Dollar

cipient of this:

,

National City Bank Executive And Vice-President Of
The ABA Discusses The Problem Of The National Debt

64 Wall

Teletype NY 1-210

W. LONG

PHILADELPHIA

Troy

Albany
Buffalo
Pittsburgh
Williamsport

Syracuse

Request

and COMPANY

INCORPORATED

Street, New York 5

BOSTON

Cleveland

oa

15 EXCHANGE PLACE

634 SO. SPRING ST.

JERSEY CITY

LOS ANGELES

Dallas

service with Chase

correspondent

HARDY& CO.

facilities

Members New York Stock Exchange
Members New York Curb Exchange

30 Broad St.

>

Tel. DIgby 4-7800

New York 4

Member Federal Deposit

Insurance

Corporation

Tele. NY 1-733

I
Actual

Trading Markets, alway

Central Soya Co.

BOND

ELECTRONICS"
RAILS

BROKERS

New England

COMMON

Public Service Co.

■

A. E.

INDUSTRIALS

Staley Mfg.

ALL ISSUES

COMMON

Analysis

Bought—Sold—Quoted

BULL, HOLDEN & C2
MEMBERS NEW YORK STOCK

Kobbe, Gearhart & Co.
INCORPORATED

EXCHANGE
Members

14 WALL ST.. NEW YORK

5.N.Y.

TELEPHONE-RECTOR 2-6300




N.

Y.

Security

45 Nassau Street
Tel. REctor 2-3600

Dealers

Ass'n

New York 5

Broadway, New York 5, IT. Y,
Telephone:

REctor 2-7400

Teletype N. Y. 1-576

Philadelphia Telephone;Enterprise 6018,

HART SMITH & CO.

•

Members

IRA HAUPT & CO,

REYNOLDS & CO.
Members New York Stock Exchange
120

Bell

Teletype NY

1-635

upon Request

New York
52 WILLIAM

Security Dealers Assn.

ST.i'N. Y. 5

Bell

STew York

HAnover 2-0930

Teletype NY 1-395
Montreal

Toronto

Members of

111

.

Principal Exchangee

Broadway, N. Y. 6

REctor 2-3100

Teletype NY 1-1920

(

Thursday, June 1, 1944

CHRONICLE

THE COMMERCIAL & FINANCIAL

2250

:Trading Market$ in::

U. S. FUNDS for

We Maintain Active'Markets in

Nu Enamel Corp.
CANADIAN INDUSTRIALS

Differential Wheel

v

,

Power and

CANADIAN BANKS

Triumph Explosives

Goodbody & Co.

Established 1920
Members

40

Security

York

New

Exchange PI., N.Y. 5 HA

2-2772

Telephone

;./•/;

"B"

By CLYDE 3ITUTE*

4's & Stock

And Labor Costs And Heavy

II
Stock Exchange
120 Broadway. N. Y. 5
Baltimore

WOrth 2-4230

d

1919

the

of

tribution

con¬

struction

will

make to a sue-

Curb Exchange

cessful

"Hard

Bell

7-4070

System Teletype NY

v

•

econ¬

forward

1-1548 ■;/;

will

be

tant
to

National Oil Prod.
1955 &

|

In

who

to

was

com¬

respects

the

1957

Clyde Shute

demand.

Price inflation

both

price and rent controls
important factors af¬
fecting construction demand.
; :
It took six years after World
War I to satisfy the accumulated
construction demands, but the sixand

1944

H. G. BRUNS & CO.
New York 5
V

period—1919 through 1924—
however, was not a period of con¬
tinuous recovery. As you all know,
year

Telephone: WHitehall 3-1223
Teletype NY 1-1843

i

all industry suffered an interrup¬
in

tion

late

by

a

Nu-Enamel Corp.

ing care of the accumulated de¬
ferred construction demand was

Punta

Alegre Sugar

Co., 7's, Pfd.

U. S. Finishing
Vicana

Sugar

a

on

clining

Members

N.

Y.

after

address

Divis'ion

o v

Smith & Co.,

CO., 'InC.

Hanover 2-4850
& 1127

1-1126

Members New York Curb Exchange

65

Broadway

WHitehall 4-8120

Bell System Teletype

Inc., and before that

NY 1-1919

i'K

.

Detroit Int'l Bridge
Common, 6V2S & 7s

Of Congressman Bloom,

meeting

the

before

the

in

made

and

Capital

Markets

of the New York Chapter

of the American Statistical Asso¬

ciation, Hotel Sheraton, New York
City,

on

May 24, 1944.

(Continued

on page

y

2272)

for

prices

at

metals

two

nese

lism the currency is

mand

In¬

of

based

and

person

any

the two metals.

deemed upon

argu¬

demand in either of

Thus, with gold-silver bimetal¬
F r a n c is
H.
lism in operation in any country
B r o wnell in
or
countries, miners and other
Herbert M. Bratter
sellers of, silver and gold would
support of
international
be assured of a fixed price for
bimetallism., Mr. Brownell, who unlimited quantities of each of
is Chairman of the Board of these metals, and holders of the
American Smelting and Refining national currency or currencies
concerned would be assured of
Company, appeared before Con
gressman Bloom's Committee op obtaining
from the government
April 28 and presented his .views, either metal 4hey might desire,
the substance of which was pub¬ upon demand, at the fixed price,
lished in the "Chronicle" of May and without maximum limit as to
11, page 1920.
quantity.
/: :
subsequently ad
letter to Mr. Bratter,

63 Wall Street, New York 5,

the

—

*

Brownell's views."; In his

Mr.

his

-

Bimetallism Defined

*

date

?

Bimetallism may be defined as

governmental maintenance of an

on

on

as

his

,

Great American Industries

6s, 1952

*Bartgis Bros. Common
United States Lumber

*Memorandum

of

testimony

on

request

F.H.K0LLER& COMPANY
INC.

Foreign Affairs; on

prepared

—

analysis is based

Brownell's

Committee

randum, which we publish in full:

TRADING MARKETS

Indiana Limestone

*

The following

r

'

Wires to Philadelphia & Los Angeles

Direct

Arguments
For Bimetallism Analyzed

"reaction

latter's

N. Y.

WHitehall 3-7253

Mr. Brownell's Recent

reply, Mr. Bratter submitted the,
April 28, 1944, before the House
following supleme'ntary 1 meriio-

>

t

Bloom

on

:*/

BUCKLEY BROTHERS
Members New York Stock Exchange

Mr.

requesting

5

con¬

recent

a

YORK

de¬

upon

currency

versely the currency is freely re¬

dressed

NEW

HAnover 2-9470

liBONDSt"

the

on

ticmi,
analyzed the

Mr.

York Curb Exchange

RAILROAD

These metals are con¬

into

vertible

of

of

New

ST.*

Teletype NY 1-1140

same

two metals.

r m a

ments

WALL

demand at

upon

with

in

Economic

Members

each

prices and the exchange
of either metal for the other at
the official ratio. Under bimetal¬

Gov ernment

fo

Frank C. Masterson & Co.

other, coupled with pro¬
vision for the unlimited sale; of

the

Bureau

Tudor City Units

each

of

the

Chi

§

fixed in terms of the currency and

and

China

metals

tary

1921-

was

the

unlimited market for two mone¬

silver

on

who

Bloom, Chair¬

Great Amer. Industries

64

Security Dealers Assn.

St., N. Y. 5
Teletypes—NY

Members New York Stock Exchange

C.

■

-

monetary

2 3

■

ex¬

and

to Mr.
*An

Securities

&YeeTie<mAGompanu

But instead of
plateau, or even de¬

some,

G

a

pert

four years.

about

riding

Bell

1921

and

Preferreds

England Public Service

37 Walt

1920

depression that accompanied the;
deflation of all prices which had
risen so wildly during 1919 and
the early part of 1920. Therefore
the actual time consumed in tak¬

Diana Stores
New

Ad¬

ministration at Washington, D.

Affairs Committee, Herbert M. Bratter

/y ears

matters,

period
World

deferred

sev-

ernment

also became

Bell

Procure¬

the

Redistribution

and

the Lend-Lease

Division of

/

Bay way T erminal

Money" Examined

the House Foreign

for

.

al

er

War I, because
during World War I, as. now, a
system of government regulations
almost stopped all normal civilian
building and thus created a large

U. S. Realty Imp.

20 Pine Street,

Control

memorandum addressed to Congressman Sol

a

of

man

following

SHs, 1949

6s,

of

Director

the

Analyzes Proposals To Establish International Bimetal¬
lism—Monetary Expert Holds Silver Advocate's Con¬
tentions Confused, His Assumptions Unwarranted, And
His Conclusions Unconvincing

parable in
many
impor¬

3%s,

been ad¬
mitted as a general partner in the
firm. Mr. Smith has been serving

Herbert Bratter, At Request

The post-war
period we are
all .looking;,

New York 5

Telephone COrtlandt

that J. Ryan Smith had

as

Pfds.

7%

&

Du Mont Laboratories

announced today

since- 1933,

6%

Emerson Radio

St., New York City, specialists in
United "States Government securi¬
ties

England Pub. Serv.
Plain

Co., 30 Broad

omy.

York Curb Exchange

New

present

tually
deter¬
mine, the con¬

Vanderhoef & Robinson
New

branch offices

<$>-

data

fect, if not ac¬

^Russian Government

|

presentation of post¬
give you some back-

.Rather than devoting a lot of time, to the
building volume estimates, I want to try to

which will af¬

3-6s, 1956

Nassau Street

R. W. Proctor &

Corporation

Disposals OF Government

problems

Members

In R. W. Proctor Oo,

Vice-President of C. J. Devine &

some

31

our

:

-

Billions At Pre-War Price Levels, Or About
Twice The 1930-1939 Volume

a n

Y.

J. R. Smith Partner

Prior to entering the Government
service he was President of J. R.

ground

N.

NY 1-1557

La.-Birmingham, Ala.

Direct wires to

2-7815

ment

.

on

New Orleans,

Properties May Retard Construction. Estimates That
Total Construction Volume In Decade After War Will

war

♦Traded

REctor

New York 4, N. Y.

HAnover 2-0700

York Curb Exchange

Tel.

Be $9.6

Teletype N. Y. 1-1227

6VZ s,

Members New York Stock Exchange

25 Broad St.,

Exchange

BROADWAY, NEW YORK

120

Proceed Immediately And Rap¬
idly Under Government Controls In A More Orderly
Fashion Than After Previous War. Higher Materials

Schenectady Rwy., Com.

Bell

N. Y.

Post-War Building Will

'V

Mayflower Hotel, Common

Members

Quoted

—

Steiner,Rouse&Co.

Members
York Stock

New

.

Assistant Vice-President of F. W. Dodge

Des Moines & Sou.

4's, 1991 & Common

La France Indus.,

'v
• New

/'

Teletype NY 1-672

7-0100

■.

,

Ft. Dodge,

BArclay

Sold

y

fvfCflONNELL&rO.

B

r

Post-War Outlook For Building

UtiL, Com.

Axton-Fisher Tob.,

NEW YORK

115 BROADWAY

—

1-423

BE1L TELETYPE NY

American States

Bought—Sold—Quoted

Principal Exchanges

Members N. Y. Stock Exchange and Other

Dealers Ass'n

Bought

request

on

\

,

V CANADIAN UTILITIES i

KING & KING

Mallory & Co. Inc.

Analysis

Light

COMMON

CANADIAN MINES

Du Mont Laboratories

P. R.

Delaware

statement

distributed

pamphlet,

of

that

the,-press;

to

Hard

111

Broadway, New York 6, N. Y.

NY 1-1026

BArclay 7-0570

Money,

(Continued on page 2260)

Bagdad Copper

Trading Markets in

Railroad

Public Utility
Industrial

FASHION PARK, Inc.
In the

opinion of authorities

the

industry, the demand

in

for men's

circular




Simons, Linburn & Co.
Members New York Stock Exchange

St., New York 4, N. Y.
-

Tele, NY 1-210

St'd. Coated Prod.

INCORPORATED

Troster,Currie&Summers

HAnover 2-0600

Select Theatres

Wm. J. Mericka & Co.

Write for

N.

Y. Security Dealers

Ass'n

Members
Union

Cleveland

Commerce

Stock

Bldg.,

Teletype
Private

Cleveland

-

Buffalo

Pittsburgh

-

14

MORRIS STEIN & CO.

HA 2-2400

NY 1-376-377

Wires to

Detroit

St'd. Comm. Tcb.

Exchange

Telephone MAin 8500
Place, N. Y. 6

74 Trinity

Zinc

General Tin Inv.
Laird & Co.

unparalleled.

25 Broad

Electrol, Inc.

Mfg.

demobilization period will be

Co.

Footwear

Evans Wallower

Henry Holt Common

Members

Teletype NY 1-609

Eastern

Deb. 5'. 1969

Stromberg-Carlson

clothing during the

STOCKS & BONDS

G.A.Saxton&Co., Inc.
170 PINE ST., N. Y. 5 WHitehall 4-4970 I

Cuba

HENRY HOLT

-

Cleveland

St. Louis

Established
29

.

Broadway, New York 6
WHitehall 4-3640

Direct Private

Wire to

Cleveland

50

Broad Street, New

1924

York 4, N. Y.
2-4341

Telephone HAnover

Thursday, June 1, 1944THE COMMERCIAL & FINANCIAL CHRONICLE

The COMMERCIAL and

f

[FINANCIAL
Reg.
•

!]

U.

William

CHRONICLE
Patent Office '

S.

B. Dana

Company

25

f'

;yy.;v'\;

3'As, 2000 (reg.)

\y

'

1st

Herbert D. Seibert,
Editor and Publisher

William

William

Dana

D.

Seibert,

Rlggs,

Thursday, June 1,

y

Published twice

4i/2s, 1957

Manager

Boston &

1944

Sp

Albany

Telephone HAnover 2-4300

Issues

Members

32
S.

135

Salle

La

St.,
Chicago 3, 111. (Telephone: State 0613),
Western Representative;' 1 Drapers' Gar¬
dens, London,
E. C.,
England, c/o Ed¬
wards

Smith.

&

'■

■

1944

Reentered

by
as

■.'

William

B.

}

;

..

Dana

Bank

Dealers Ass'n

\

•

!

CHICAGO 4

DIgby 4-8640

Harrison 2075

Teletype CG 129

.yy:M/y;;'y: We Buy

MORTGAGE

'v.' '•

'

'

'

City Bank Farmers Trust Co.

issued by "

y'

And A Gold Inflow. Sees Banks Using Excess
Acquire Government Securities. Looks For
Little Change In Interest Rates And Says Banks Are In

Chase National Bank

."-y'".:

Sound Condition

yr.

B

in New

York

Members

40 Wall

Bell

funds.

New

York

St., N.Y. 5
Teletype

Stock

Exchange

II

WHitehall 4-6330
NY

||

1-2033

a

11 i

m o

as

re,

Government
banks

well

as

the

as

volume

of

their

Finance

at

ratio of capital assets to total de¬

i

n

York

v e r s

ity,

deposits will increase.

posits

will

while

continue
volume

the

loans

hood of

New York

ex¬

pressed^

the

constant

early hearing before the SEC on the "5% spread
by the NASD.
:; ■
This presents some interesting speculations.
an

^

anyy

Did these organizations confer on this subject at all?

If not, there was gross stupidity somewhere, since the SEC
has supervisory power over the NASD, and appellate juris¬

diction with respect to its
y

disciplinary proceedings,

We do not incline to the view that stupidity is the long

'

suit of the officials of either the SEC

the NASD.

or

Hence, our belief that such conferences did in fact take
place.
Who spoke with whom, and what was said?

y

,

Consult-

-

\

remain,

ing

the

re¬

the -' war

pe-

.

decline

the

in

ratio

of

gold'and cash reserves of the fed¬
eral Reserve banks to notes in
circulation ar\d

Remand deposits,

|

Dr. Marcus Nadler
banking
developments
- yyy:.
will' be approximately the same

OpeningjOi Venture Capital Maris
Measure Would Curtail Markets For Securities Of Small

in the volume of currency

crease

(Continued

advices

to

"Wall

the

Journal"

Street

from

"I

,

■

British

"The

added, is determined to
that

the

external

see

value

of

the

pound sterling conforms to its in¬
ternal value, as set by domestic

policies,- and
to

other

way

Government

also

the

not

The

around.

control

retain

of

the

"Finally,

of the National Association of Securities Dealers.

its

London

bureau

Keynes

argued

it would be disastrous to discour¬
age this

(Continued




on page

2274)

.

-

Christy

Clay Products Co.
COMMON
Listed St. Louis S. E.

Memorandum

oil

Request

as

yJt \

Est. 1926

riutWi
170 Broadway
Bell

"He

told

his

that

listeners

COrtlandt 7-6190
System Teletype NY 1-84

in

waging war'without counting the
cost, Britain had burdened itself
with

a

mon-

cause

than

more

com¬

it

can

afford, and must try in any post¬
war financial pact to make sure it
can carry

the

SECURITIES
i

its burdens.

"Britain and its colonies'
in

SUGAR

huge foreign indebtedness.

It already has given to the

ably

($1,300,000,000),

or

than

Britain

(Continued

Panama

double

will

hold

on page

Coca-Cola

•

■.

share

proposed
international
fund
will
be
£325,-

more

serves

beginning of international

prob¬

DUNNE & CO.
Members New York Security Dealers Assn.

the

re¬

at

the

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

Tei.

WHitehall 3-0272

>

2273)

Bottling*

American Cable & Radio
Warrants

Coca-Cola Bottling Co. of N. Y.*

Secututiei

*

Wyeth

&

Public National Bank

Coca-Cola Bot. of Los Angeles

That this

arbitrarily imposed by officials of the NASD, will
have a detrimental effect on the further development and
growth of small business, a major source of venture capital
and bulwark of the nation's economy, would appear to be
irrefutable.
For evidence of this factj we need only refer
•

Laclede

25

Lord

any program or

measure,

System Teletype, N. Y. 1-2480

national collaboration.

he
to it

Government,

000,000

important, -however, that attention be called to
policy calculated to add to existing diffi¬
culties, such as the recently promulgated 5% mark-up rule

Assn.

,

influences.

is

Dealers

REctor 2-5288

say

monetary

almost continuously since 1929 has been
unwillingness of so-Called venture capital to come out
of hiding.
The effect of this condition in terms of minute
production and large-scale unemployment during pre-war
years is still too fresh in mind to require detailed discussion
in this space.
Neither is it pertinent to the purposes of this
discussion to dwell on the vital necessity for a
change in
attitude on the part of the tax-gatherers and other sources,
such as the Securities and Exchange Commission, toward
that type of investment.

Security

Broadway, New York, N. Y.

Bell

-

should

deflation at the dictate of outside

the

York

2276)

on page

saying:

the

It

Ill

expressed in the House of Lords that the latest version of
the proposed international monetary stabilization plan might mean a
return to the gold standard were disputed by John Maynard Keynes,
author of Britain's original monetary plan, who was reported in

nation's economy

of

Members

■h

New

Fears

.

domestic rate of interest,

characteristics

Request

in circulation and by the moder-

he said,
and while it means to prevent in¬
flation at home, will not accept

unfavorable

on

J.F.Reilly&Co.

Monetary Plan Does Not Mean
Return io Gold Standard: Keynes

intends

Business, Dealers Say
most

Circulars

,

NASD Mark-Up Rule Impediment To

the

Loft Candy

NET MARKETS

quote:-: '• ■ y'■?]: y. ?■ yy;*! y .y., -

of

Laboratories

brought about by the constant in¬

riod

-

One

Allen Du Mqnt

the whole, unchanged.

on

this plan is the<S>pity of it is that no official of the NASD has
exact opposite," Lord Keynes de¬
cooperation, or to meet it with
ventured to deny that such conferences took place, or to
clared during the debate on the
'carping suspicions or in a cynical
mood,' when there is so much to
;iv':y'yyvyy>'' '::^y "y (Continued on page 2269)' /\''yyyMi:'y-vyyj y'.yy scheme.
V From
these
advices
we
also be done in the way of inter¬

:.

& Television

The Reserve Ratio

view that dur¬

The

-

Majestic Radio

ing Economist

mainder of

of NASD and SEC

f}

'

Teletype NY 1-1203

will

"One of the problems which is

thing, transpired between the respective representatives
on the subject of the "5% rule" prior
»to its promulgation.
Unfortunately, our editorial inquiries have met with no response, hence the necessity
for speculation,

39 Broadway
New York 6, N. Y.

decline

to

of

receiving considerable attention
in banking circles today, is the

have asked what, if

Members New York Security Dealers Assn.

^

& Trust Co. of

we

Information

L.J. GOLDWATER & CO.

The

Hanover Bank

On several occasions

'

Statistical

of

Ty s In our last issue we reported that due to the efforts of
the "Securities Dealers Committee" there was every likeli¬

;

Complete

"the holding of
by
the

of the Central

.

V QUOTED

SOLD

-

''

securities

Hearing On NASD "5% Spread"
limitation rule" established

BOUGHT

during the last few years. Con¬

tinuing, he said,

and

f

Dept.

CERTIFICATES

HAnover 2-8970

Professor

U

.

y

Md., on May
25] Dr. Mar¬
cus Nadler,

New

.

Securities

STREET, NEW YORK

Hotel in

more

^ewburger, Loeb & Co.

In the rate of exchange, remittances for
foreign subscriptions and advertisements

•

on

•

post-war banking prospects before the 49th Annual
Convention of the Maryland Bankers Association at the Lord Balti¬

Irving Trust Co.

NOTE—On account of the fluctuations

made

us

quote

we

In discussing

t

-

Bank and Quotation Record—Mth. $20 yr.

Monthly Earnings Record—Mth..,$20

Reserve

Reserves To

'

Guaranty Trust Co.
Publications

ySignificance
And After
TheRatioWar
In
De¬

rency

PARTICIPATIONS

V

....

Continental Europe (except Spain), Asia,
Australia and Africa, $31.00 per year.

be

writes

tell

TITLE COMPANY

cline Since Currency Is No Longer Redeemable In Gold.
Holds Post-War Period Will Be Marked By Less Cur¬

Central Hanover Bank & Trust Co.

must

recovery

Telephone: WHitehall 4-6551

Exchange

Dr. Nadler Sees No

•

Company

It Subscriptions
In United States and
Possessions, $26.00 per year; in Dominion
of Canada, $27.50 per year; South apd
Central
America,
Spain,
Mexico
and
Cuba, $29.50 per year; Great Britain,

Other

Obsolete

WALL

Developments Dnring

Board of Trade Bldg.

Teletype NY 1-832, 834

y^ yy -y-..
'■

'

Security

second-class matter Feb¬

b, 1879.
]£'

York

NEW YORK 4

ruary 25, 1942, at the post office at New
York, N. Y„ under the Act of March
'

New

Broadway

•

•

Copyright

when

the junk.

Teletype NY I-S

;:

Members New York Stock

up

my

stock"

brokers

)

.

STRAUSS BROS.

quo¬

records,
corporation,
banking,
Clearings, state and city news, etc.)

',-! '

hopped
of

up

junk

Other

F

J

.T.-v,

hopped
some

Monday

(complete statistical issue—market

Offices:

some

25 Broad Street, New York

Baltimore & Ohio

tation

Other

&

encer

99

y,

on

broker.

we're

:

'

y

bid

value

week

a

advertising issue)

and every

PREFERRED STOCKS

a

-

and

news

HOPPED UP
"Your

Lehigh & Lake Erie

r /

Thursday

every
(general

AND COMPANY

High Grade -'Vy

.

1959

4s,

yy

r

President

Business

Immm

"

'}

offerings of

Public Utility and Industrial

BEekman 3-3341

y

interested in

are

Spmce Street, New York 8

ij V

y

We

is &

/•]

•

Publishers

'

2251

Co.

Circulars

on

& Trust Co.*
*First quarter analysis

WRITTEN

available

Request

C. E.
NEW YORK 5
40 Wall St.

LOS ANGELES 14
647 So.

Members Los Angeles Stock

Spring St.

HoiiRsseSTrsster
Established

Exchange

74

1914

Trinity Place, New York 6, N. Y.

request

Unterfoerg & Co.

Members New

61

on

York Security Dealers Assn.

Broadway, New York 6, N. Y.

Telephone BOwling Green 9-3565
Teletype NY 1-166Q

Thursday, June 1, 1944

THE COMMERCIAL & FINANCIAL CHRONICLE

2252

BOSTON, MASS.

OXFORD. -:PAPER:^§J

A Low-Prieed Stock, in an;

With

,

a

—1—r~;r

11

Botany Worsted

Industry j

Bright Future

!

,

Common & Preferred
Bought

-

Sold

Circular

Quoted

-

Warner Swazey

On Request

/. C 0:

Goodbody & Co.
Members N. Y. Stock Exchange

6% & 7% Pfd.

N. E. Pub. Serv.

115

Wickwire

Spencer Steel
Lawyers Mortgage Co.
Pollak Manufacturing

»

TELETYPE

7-0100

NY

'

Moxie Co.

\

LERNER & CO.
10 POST OFFICE SQUARE ;/
/ //
BOSTON 9, MASS.

,

■v;:

1990~;v,!" Teletype BS 69

Tel. HUB

Consolidated Textile & Bonds

J. F.ReiHy&Co.

i

v

1-672

I

-

2-2%

Gtfs.-17%-18i

Circular Available—Send for Copies

CHICAGO

BARCLAY

Stock

v

lDiv./ Arrears;

!

105 WEST ADAMS ST.

BROADWAY

TELEPHONE

:

•

and Other Principal Exchanges

NEW YORK

Cliffs Corp.

;

Giant Portland Cement

"

\'

Purolater Co.

'i.i-j'.v-'.i "Hv*»''■?

*

:

Dealers Assn.

Security

New York, N.-Yi

Ill Broadway,

f1 !

REctor 2-5288

ST. LOUIS

Axton-Fisher "B"

Members *

r'l
York

New

Bell System Teletype. NY 1-2480

t

*

,

Crowell Collier Pub.*

Mallory*

P. R.

Polaroid

/////:

;

,

,

Nu-Enamel

'

Butterick Co. Inc.

*

|

Cole, Hoisington & Company

Title Guar. & Trust

Incorporated

Standard Coated Products
120

Liberty Aircraft

-

.

;

■

,

509 OLIVE STREET

Telephone: COrtlandt 7-2575

ty

«

.?'/,■

;tV

Bell

Public Util. SV&s

Cent.

Whelan

United Cigar

Com. & Bonds
& Wrnts.

;.'/•■

y

// // Franklin Cole

;//

;

-

■■

''

"

./1//•:

y

-

Thomas B. Comstock' ~/

/

Herman U. Clark

INDUSTRIALS

; y

D. Fremont

bLarer

y

Trinity Place, New York 6, N. Y.

SALT LAKE CITY

i .:/•
"

-

■*

Specializing in

Candy

Defaulted & Low Income Paying,

Lumber*
"A" and Pfd.

AMALGAMATED SUGAR

_

Botany Worsted

Real Estate Bonds & Certificates

Explosives

Individual

Car

Auto

Sugar

Alegre

Punta

,■!.//."

UTAH-IDAHO SUGAR/

Responsibility Alone

Analyses Upon Request

Remington Arms

Can Provide Post-Waf Jobs I

Corporation
Magazine Repeating Razor
Eastern

—benefiting from industrial speed-up.

BELL

Butler

Radiator

Enamel

Nu

Drill

United

"A" & "B"

Industries*

American

Great

Petroleum Heat dfe Power
Vertientes

Bird

&

Sugar

Camaguey

Son

for transition from
ered at

in

ner

a

a

co-author with Bernard M. Baruch of a plan
war to a peace economy, in an address deliv-

AIR LIN6S

the

"Pabst

Post-War EmExport Airlines*
Chicago & Southern Airlines

American

Inland

p

National

Airlines*

Airlines

Northeast

V,

Airlines

o y m. e n

'
>

as

464

,

are

16

&. EL 6s,'.I960
and Com.

Illinois Power Div. Arr.

Conn, Light & Power

Light & Power Pfd.
Utilities Service Pfd.
Elec. & Gas Pfd.

Peoples

American
Cons.

Iowa Southern

&

Nassau

Util. Com.

Suffolk Ltg. Pfd.

Queensboro Gas & Elec. Pfd.
Puget Sound Pr. & Lt.
Mass. Power & Lt. $2 Pfd.*
United Lt. & Rys. W. I.
Scranton

Springbrook

Water

Pfd.

Stromberg Carlson
Emerson Radio

Du Mont Lab. "A"*

■:

employment we are going to
the
position of having
thought about the problem in ad¬
vance. We will not be plowing in
war

International Detrola

be

Majestic Radio & Tel.*
Magnavox Corp.*

PHONE

OR

WIRE ORDERS

AT OUR EXPENSE
*

Circular

Request

on

strange

field.

for

circles

W\UH&Co
%

*

tffc

Members N.

120

1926

Y. Security Dealers Assn.

]

BROADWAY, NEW YORK 5

REctor 2-8700
Direct

NY 1-1288!

Wires

to

BOSTON—HARTFORD—PHILA.




lem

now.

of the

The

nation

planning

^gre^tjndoor sport
has

during

been

post-war

the!

past

six

j

fifteen

of their 500 Fifth Ave.
office, and will continue to write

writings,

market letter

them.

for

current

alyses and write up of undermarket

Mr.

time

associated
with
Lilienthal / &
Co. ; for
was

general
a
part

and

deals

seeks

/issues,

connection

ultimate

with

possibilities.
Box
L 24, Commercial & Financial
permanent

^.'•;/■//'/*;'

.

background, includ¬
experience in an¬

Excellent

Chronicle,

r«.—,—i

Street,

Spruce

25

New York 8,

N. Y.

;/>, / -/,

Seeley 1 Lindley To
Be Formed In N. Y. C.
Daniel

Allen

Lindley, member
of the New York Stock Exchange,
and de Benneville K. Seeley are
forming the Exchange firm of
Seeley & Lindley with offices at
61 Broadway, New York City, as
of June1 8th. Mr. Lindley was re¬
cently a partner in Bates & Lind¬
ley.
// '//V-w, : '
v.-V

Stewart Back At Desk

With Karriman Ripley
R. McLean Stewart,
dent

Interesting Growth Stock
Panhandle Eastern Pipe Line
Company offers
an
interesting
growth stock according to a de¬
tailed circular op the situation is¬
sued by Arnhold and S.; Bleichroeder, Inc., 30 Broad Street, New
York City. Copies of this compre¬
hensive discussion may be had
on request from
Arnhold and S.
•

Bleichroedef, Inc.

J

i1. ■ *—r—... 1
-

—7— • y ■

Western

•

Light

&

Harriman

& Co., Incorporated, 63
Wall St., New York City, has re¬

Ripley

sumed his activities with the firm

work

his

special

Executive Director of

the

Aero¬

Civil
in

Wash¬

More than 200,000 mem¬

ington.
of

United

as

with

Administration

nautics

bers

of

completion

upon
war

•

the

armed

forces

of

the

their

received

States

initial training as pilots in
schools
operating
under

flying
•
Mr.

Stewart's direction.

/

+

;•

Norman J. Powers Is

With Leason & Go.
(Special to The .Financial .Chronicle).

Attractive Situation

Telephone
! common. offers
interesting possi-.
bilities, according to a memoran¬
dum being distributed by Buckley
Brothers,
1529
Walnut
Street,
Philadelphia, Pa., members of the
New York and Philadelphia Stock
sent facts. Having lived for some
Exchanges. Copies of this memo¬
time facing this barrage of words, randum may be had upon request
from Buckley Brothers. "
(Continued on page 2278)
.

Vice-Presi¬

of

Director

and

training

Those

,

%.

SECURITY ANALYST

the author of the widely

several years.

ance in a 'plan.'
Today 'national
planning' takes the same place in
public thinking as 'industrial effi¬

ciency' and 'organization methods'
who are have taken during the past thirty
interested will have gone through years. Of course, to develop these
a great course in mental gymnas¬
plans people must have the fig¬
tics.
I see still many
signs of ures on which to base them. This
diversity in the plans. It would explains the -great thirst-for fig¬
be strange if this were not the ures on the part of the entire pub¬
and
fact with the multitudes of peo¬ lic
the
somewjhat
ready
ple and organizations working on acceptance of Such figures just ais
post-war employment plans. With if they were facts. Those of us
who
have -been
some 36,000 people, two big army
sjpending some
divisions, occupied in this one, con¬ time in Washington have to gejt
test, one may well wonder how we into a foxhole when we face thfe
can win the war, though we can
barrage of figures. Everyone seems
readily understand why, with so to have a figure at the end of his
many
busy on post-war plans, tongue and few seem concerned
there is no unemployment prob¬ about whether the figures repre¬
a

General Instrument*

in

6

St., B'klyn 2, N. Y. TR. 5-5054

Court

,

Washington Gas

over

Security Adjustment Corp.

ing

Messing
Hirsch,

that there
need for a res¬
will
be no
one
plan, but there
toration of in-should be many, elements which
dividual
re¬
will be agreed upon. I can fore¬
see only -a great tug-of-war of all
sponsibility in
an
enterprise
of the ideas that could form a part
economy, and
of a complete post-war; employ¬
called ' for
a
ment plan.
Many of these : ideas
return to "the
will be pulling in opposite direc¬
old
proven
tions and no one is going to know
economic
how much of a pull each will ex¬
principles
t o
ert, leave alone knowing in all
bring about
cases in what direction any indi¬
the results
John M. Hancock
vidual idea was tending.
After
which can be
reading over the Winning manu¬
brought about in no other way." scripts I thought the
problem
"When the time for writing and seemed so simple for ; the cures
>
talking ends," stated Mr. Hancock, read so smoothly.
"For some reason the human
"when the time for action is here,
when we start to deal with post¬ mind in these days puts great reli¬
probabilities

SU

quoted "Reading the Charts." has
joined. Herzfeld; & Stern as co-

his

"With the multitude of planners
the

TELETYPE

manager

ette

t

Awards," em¬
phasized the

Airlines

Mid-Continent

1

years as

park benches—in Lafal¬
Square and elsewhere—can
again be used for the purpose.

soon

large

show

now

PROFITS and INCOME

-

Messing, well known

financial

in
months and I surmise it will again
become the great outdoor sport as

of the winners

of

Arthur J.

din¬

honoiL

SYSTEM

<

With Herzfeld & Stern

John M. Hancock,

Maryland Casualty
Douglas Shoe, Com- & Pfd.
Bendix Home Appliances
Tokheim Oil Tank & Puipp^;

bonds/

These

•

ESTABLISHED 1899-

Talon

obtain

to

Northern Pac.-So. Pac. -B. & O.-M. K. T.

';//'/

Believes /'First
8c COMPANY
/;
Step Securing, Post-War Employment Is To Get More
.160 main Street //;//
Salt lake City 1, Utah f;
Employers"—Holds National Prosperity? Can Be Re¬
stored Only "On The Basis Of The Enterprise System"
And That "The Congress Alone Can Provide The At¬
mosphere In Which Our Economy Can Again Become Arthur J. Messing Is
Dynamic."
y' y^-'v/■:;//_/
yy;y ■/,■?./ - ;/.i//.

Com. & Pfd.*

used

Rail Bonds Paying Income

EDWARD L. BURTON

Co-author Of Baruch-Hancock Report

MOXIE

Pierce

be

can

Brockway Motor*

Triumph

May li, 1941

repeat our adv. of

We

June 1, 1944.
*

.

Established 1914

/
74

Merchants Distilling*

Long Bell

.

■

Harland W. Hoisington

/:;//:

Loft

5%

WRITTEN request

on

Members St. Louis Stock Exchange

Amer. Gas & Power

Derby Gas & Electric
Consolidated Dearborn

Circular

PRICES

16—Common

Preferred
*;•

"

"

SELLING

APPROXIMATE

System Teletype SL 80.

share

per

Common— 2.26

Investment Counselors and Economic Consultants

Southwest Pub. Serv.

Vicana Sugar

Preferred—$8.56

..V."

ST. LOUIS 1, M0.

/-

:/

,

1943 EARNINGS

/

:

Broadway, New York 5, N. Y.

Hearst Pfd.

I

'.

Announcing the formation of

V;

■■■

.

.CHICAGO;

Powers

has

-

ILL.—Norman

become

with Leason & Co.,
La Salle

Street.

.

...

-

.

J.

associated

Inc., 39 South

Mr. Powers

was

formerly with Kneeland & Co. in
their, stock
past he

was

department.

In

the

with Adams & Co.

and Brown Brothers Harriman &

co.

;

Volume

Number 4286

159

BOUGHT

THE COMMERCIAL & FINANCIAL CHRONICLE

SOLD

-

QUOTED

-

American Gas & Power Company

Deb.

American Gas & Power Company*

Deb.

Central States Power &

Consolidated Else. &

Light Corp.
Gas

Co.

5
6

'

due 1962

>' 6

?

due 4976

Deb.
1st

South Bay Consol. Water

Company

Southern Cities Utilities

Louis J. Groch
Bulolo Gold

due 1945

has been appointed
Resident

*

,

1st & Ref. 5

due 1954

1st & Ref. 5

-due 1950

5

Deb.

of

J', Incorporated

'

Electrolux

•

?_■

"r!"

Lawyers Mortgage^ Corp.

Detroit Office

Noranda Mines

Royal Bank of Canada

Steep Rock Iron Mines, Ltd.

HORNBLOWER & WEEKS

due" 1958

5

our

Dredging

Corporation

International Utilities Co.

Manager X;

due 1958

;

Sun Life Assurance

A,CALLYN«®COMEANY
'

CANADIAN

SECURITIES

BOSTON

:'v'J.': "'J'.

that

announce

5% due 1948

Co.X1st Coll.»

Telephone Bohd and Share Col

pleased to

are

due 1953

3.6-6

Deb.

Public Utilities Consolidated

Seattle Gas Company

We

due 1953

Coll. "A"

Pennsylvania Gas & Electric Corp.
Corp:

3-5

2253

NEWYORK

ESTABLISHED 1888

PROVIDENCE

PHILADELPHIA

v--

V

PORTLAND, ME.
BANGOR

:

C0i

HART SMITH &

CHICAGO

'

CLEVELAND

52

WILLIAM

St., N. Y. 5

HAnover 2-0980

'
'

■'

Chicago

New York

Boston

Milwaukee

-

'V.l¥

l'(\

!

Bell Teletype NY

Minneapolis

Now York

1-395

Montreal

Toronto

SUGAR SECURITIES

American Cyanamid, Pfd.

Favorable Current Earnings

($1.50 Cum. Conv. Class A Pfd.)

We

Prospect of Large Post-War

Eitingon-Schild Co. Inc.

-''

*

I
We

are

principals—Brokers
for our account.

f

pleased to

Ohio Match

that

announce

.

NICHOLS

Petroleum Heat & Power

•

J

TEL. HANOVER 2-9612

Tokheim Oil Tank &

&

'has become associated with this

firm

CO.

as a

Pump Co.

Universal Match

:

Vice President

Members New York Stock Exchange

^

Frederic H. Hatch & Co.

Specialists in Sugar & Sugar Securities

Telephone WHitehall 4-7544

Mortgage Corporation, Com.

.awyers
DONALD E.

MR.

t

*New York Coffee & Sugar Exchange

Y.

6, N.

V-\

Teletype N. Y. 1-2123

2 RECTOR STREET

York

1

FA It It

S.R. Melven & Co.
New

Sugar Demand

Quotations Upon Request

trade

may

...

.

are

120 WALL ST., NEW YORK 5

'■

Incorporated

;

Ames, Emerich &. Co., Inc.

63 Wall

Street

Bell

New York 5,

Teletype NY

N. y.

1-897

105 South LaSalle Street, Chicago 3

Xr

X/'LX

X'X X:X'X^

" Telephone State 5300

WE BUY

,:f, By HERBERT STEIN
J;;,.
Chief of Economic Analysis Section, War Production Board
.

t

i'

Winner; First Prize, Pabst Post-War Employment Awards

-

BONDS

;

First Prize Winner Offers An Immediate Five Point Pro¬

Comprising (1) Prompt Disposal Of Government
Surpluses; (2) Prom p t j Sale Of Government War
Plants; (3) Centralization Of Disposals In Single
gram,

Agency; (4) Maintenance Of Wartime Level Of Taxa*
tion; And (5) Termination Of OP A and WPB Within

XX;,Xx/

Post-War

Employment Must
4 Provide For 45% Increase In
Labor Forces: Henry A. Theis

Coupons Missing
Guoe, Winikill & Co.
Members New York Stock Exchange

Year After Hostilities—Long Term Reforms Cover Tax¬ Guaranty Trust

ation, Fiscal And Monetary Changes
establishment of

The

r

the

war

high,'stable level of employment after
of output at a level much in excess
level ^

a

will require maintenance
of
;

a

any

11

i

a

n

ed in

peace-time

—

40%

perhaps

above the 1939
;

1

Frailk C. Moore Forms
Own Firm in New York

i; There

e v e

two

basic

'methods
which
level

a

of

-

tional
may

by

high
nar

output
be
at¬

requires

a

level of
rnment
.spending. The
g o v e

operation

of

this method is

Herbert

visible during

\

Stein
.

...

.

the war, when

X national

-

out¬

put reached record levels under
the impetus of a huge volume of
government spending. The second
stimulation of a

method requires

high level of private expenditure.
The plan

set forth here proposes
measures for solving the employ¬
ment
problem by this method.
This method is chosen as the only
consistent

one

with

the

ment of other national

achieve¬

ernment

of

controlled

spending

of

ment

as 'an

economic

fundamental

:more

*This

is

the

gov¬

instru¬

stabilization,

policies

Und

that

was

essay

.awarded the first

by the
ment

prize of $25,000
Pabst Post-War Employ¬
551 Fifth -Avenue,

Awards,

'New York

,

City.;

(Continued

tion

Vice

6%

"Preferred

Stock!

Guide," containing quotations andi
comparative data

preferred

and

on

public utility

common

*

stocks,

be had from G. A, Saxton &

may

Co. upon request.

'

'




pointed
t h a t if
is

to

ndertake

full

em¬

ployment that

t h e Govern¬
failed to accom¬
plish "in the 30's, business must
find work for discharged soldiers,
redistribute workers now engaged
directly-, and - indirectly in war
work, and find employment for
the
growing
generation
as
its
„

-j

ment

tried

•

A '
and j

According to

a

detailed circular

.'

become of age.
"A conservative estimate of the

work

the situation

prepared by Ira

Haupt & Co., Ill Broadway, Newi
York

City, members of the New

York

Stock

Exchange and other

tor be

offered

labor forces

war

45%
order

to

the

post¬

will have to

be

greater than that of 1939, in
to
provide full
employ¬

ment," Mr. Theis continued.
"There has been striking

dence in recent months to indicate

upon

be had from Ira Haupt & Co.- fore-accepting

request.

:

-

•*'

(Continued

'

thec

on page

of

May

.

■'

5'As, 1951

Provident Loan
...

Society of N. Y.

Certificates

J'_

.

Tyler Building (N. Y.)
6s,

1953

Stock

decided

27,

1

'

in
Incorporated

which

New York 5, N. Y.

63 Wall Street

Bell Teletype NY 1-897

also

'■

.

tinue at the, present rate of com¬

pensation

for

Mr. Schram's term
at

which

term

a

is

being negotiated.

now

as

President

salary of $48,000 a year ex¬
pires on June 30 and the board of
governors had made application to
a

the Treasury

Department for

mission to increase his

OF POST-WAR RADIO...

per¬

remunera¬

tion to
been

net.

$55,000, which would have
equivalent to a 10% raise

Mr.

Schram

has

been

paid
non-member president for the last
three years and the new contract
be

announced

pected to

cover

a

shortly, 'is ex¬
similar period.

For 25 years
radio..
portant

Hoerlein in Syracuse

Utah has worked with a miracle—i

making loud speakers and other imJ

.

parts.

When victory,

comes,

again will be in the forefront of the radio
field
its

leading national Exchanges, New!
that the public is turning away
England
Public
Service
Co., from the
politician to the business
offers
attractive;;, possibilities.; man to solve the post-war em-

Copies' of this interesting circular | "ployment problems. Business, be¬

York

been

;

Exchange officials replied
promptly that,-regardless of this
decision, Mr. Schram would con¬

to

evi¬

has

1946

East Coast Public Service

zation unit .of .the Bureau of In¬
ternal
Revenue,
on
May
26,
according to the New York Herald
said:

period the job

New

the

Exchange,

Tribune

post-war

6s,

'

X.X,X'.
X 4s, 1948 .XV)...'X'
Eastern Minnesota Power

the negative by the salary stabili¬

the

members

Utility Attractive

may

2278)

■;

New

successfully in

of.

Electric Co., and the current issue

the- firm's

York,

Com¬

of

of

--'-i

1975!

Community Water Service

application for an increase
Schram, Pre¬

Trust

u

Henry A. Theis

The

the

of

business

Co., inc., 70 Pine St., New York:
City.
Copies of this memoran-.
dum,
a
circular, on Associated!
of

-

Of Internal Revenue
sident

the sit¬

on

Salary Rise
Refused By Bureau

in the salary of Emil

put

issued by G. A. Saxton &

Schram

Guaranty
pany

Associa¬

cumulative

detailed memorandum
uation

and
Presi¬

-

dent

preferred
stock offers attractive apprecia¬
tion possibilities, according to a

,

on page

England. Power

Bankers

tion,

~

on

the plan recommends a number of

•

New

Amer¬

Associa¬

Appreciation Possibilities

political

effectiveness

ican

Was

objectives

democracy, personal
liberty and efficient satisfaction
of wants.;. While recognizing the
—

Mr. Moore

the

of

the

of

partner in Frazier Jelke & Co.

a

high

.

dent

Trust Division

One

tained.

i

v<

42-Broadway,-New York City,In the past

Teletype NY 1-955

American Water Wks. & Elec.

Speaking before the Wartime Banking Conference of the Cali¬
Pasadena, Cal., on May 25, Henry A.
;
I
Theis,
Presi-<^

to engage in an investment busi¬
ness.

St., New York 5, N. Y.

DIgby 4-7060

fornia Bankers-Association at

Frank- C. Moore Co.-, with officesat

1 Wall

5s,

f.;

Frank C.>Moore has formed the

*

are

Company Official Holds That Before
Accepting The Challenge To Make This An Accom¬
plished Fact, "Business Should Insist That It Be Freed
From Unreasonable Laws, Rules And Regulations" ■

with

...

war

and

even

better

experience,

pleasure,

your

to

Utah
parts

trained, because o!
contribute

education,

your new

to

your

radio life.

SYRACUSE,[N. Y.—R. George
Hoerlein 'is 'en^agihg in a securi¬

challenge,

ties

2280)

Jame? St.

t

busies* If&m
pi

ljo-JU
-*.{•},)

?.uf

offices at 600
no

BAPIO PRODUCTS CO

Chicago, III,

Thursday, June 1, 1944;

CHRONICLE-

THE COMMERCIAL & FINANCIAL

2254

Tomorrow's Markets
CENTRAL ILLINOIS
PUBLIC

Northern States Power

NO. STATES

POWER

Com.

6 & 7%

(DEL.)

Bought—Sold—Quoted
—

Sold

Walter Whyte

V

Com.

SERVICE OF INDIANA

DELAWARE POWER & LIGHT

6% & 7% Preferreds
Bought

Com.

GAS

ELECTRIC

Says—

Pref.

'

!

,

drums take effect

II Bear, Stearns
Paine, Webber, Jackson

State 0933

Tel.

ESTABLISHED 1879

T

,

-

-

„

,

! !

,

Y

;;;|;;By

WALTER WHYTE

That Of Other Nations": Nelson

Industry's Use of Electric Power
Commission recently issued a 177-page study
on "Electric Power Requirements of Industrial Establishments" from
which have been compiled the figures in the accompanying table.
The largest war-time gain in use of electricity was registered by
"the transportation equipment industry, which in 1944 used nearly
;sixteen times as much current as in 1939. This of course was due to
the transmutation af stagnant in-3>on figures reported by some 21,000
dustry,
with considerable idle
establishments for 1939-42, with
capacity, into one working
estimated use for 1943-44. These
practically all plants twenty>four
hours a
day. Non-ferrous companies use over 90% of all the
metals showed the next largest electricity consumed by manufac¬
turing and, extracting industries
^Increase, probably due to the
in the United States.
huge demand for aluminum; and
Turning to the - Commission's
chemicals third, because of their
table of "Electricity Requirements
.close relations with munitions and
;the drug industry. The 217% gain. by States" we find that in T944
tin the machinery

expected, but the increase of
100% dfor
steel
was
perhaps
smaller than might have been an¬
be

ticipated.
i The figures here cited are not
on
the same basis as those re¬

light and
the Edison

ported for the electric
;

industry

power

Electric Institute.

by

slightly over

New York State used

industry was to

They are based

of the nation's total, Penn¬

10%

sylvania 9% and Ohio 8%; Mich¬
igan and Illinois were about even
with 6%; Washington because of
its aluminum plants used 5%, and
Tennessee and Texas about 4%.
For those interested in war-time
shifts of industrial activity, these
V

Chemicals
and

Iron

9,811

....—..

steel

__

_____

"11,941

;Machinery, except electrical.
Automobiles

6,437

33

6,296

82

6,254

217

4,668

90

J

.1,238

____——

'Miscellaneous

Y

1,584

-

859

_;

'

.

•

.

_

_

—

;.

402
353

454

115

153

70,869

158,793

3,523

5,408

2,912

4,380

813

1,291

mining
:____

____—__

;Wonm.etallic .mining —'
■

Petroleum

;

837

and natural gas

Totals extracting industries„
all

Totals

we

are

com¬

ing

to

close

of

civilians.

to

1

"make

•

de-

;

..

12,017

contribution to

78,954

170,810

As

first

>

days

:

soon

50

12

Yv

50%

"

;

115%

"

I

(Special to The Financial

ANGELES,

LOS

Chronicle)

CALIF.

—

Eugene C. Baldwin and Floyd C.
DeLap have become associated
with Cruttenden & Co., in their

office at 634
South Spring St.
Mr. Baldwin!
was
formerly with Sutro & Co.,
opened

recently

and

prior thereto was assistant
of the bond department
the
California
Bank.
Mr.

manager

of

Huff, Geyer & Hecht, 67 Wall
Street, New York City, have is¬
sued an interesting discussion of
the

prospective earnings on bank
1944, and 1945.; Copies

stocks for

of this discussion,
da

and memoran¬
The Chase National Bank

on

of New York,

sulted in
the

being set aside

a

table

r e

bile

Employers' Group Associates. Y

V

com¬

panies.
cluding

Ford,

have

e a r-

marked

ex¬

;;

lars

Crescent Public Service 6s .1954
•

S

1

'

•-#

'

for

this!

purpose.;
The
Leo

H.

transi-;

tion from

Rich

to

5'

American Gas & Power 3-5s 1953

382
dol-;

million

Associated Gas & Electric issues

war

peace-time

production is not a sudden break,
gradual and

but rather a series of

Lincoln

Building Corp. 5V2S 1963

overlapping

steps.

along in the first of

of

We are well

these phases

at the dinner

York
29

BROADWAY,
Direct




NEW YORK 6, N. Y.

Wire

i
to

Chicago

Mr. Rich

meeting of the New

Chapter,

American

Statis¬

tical Association, Hotel Sheraton,
New York

City,

on

both

are

being

because

of

is

is

the

that

May 24, 1944.

the

Dow

rails

accumu-,

,

for

the

ordnance

,

depart¬

the

ing through to a new high.; In
cases it failed. Now they
are back to across the 40 fig¬
both

effort;
from war production, it has been !
possible to do designing and en- i
gineeering on many new and im¬
proved products. Our own organ¬
ization, while largely engaged in
any

cases

(when it made those
levels), looked as if it was gor¬

.

diverting

a

The first

high of about 41;
mid-April high of

group

numbers

Without

overcome.

March

a

averages

stumbling

about 40.50. In both

Reemployment of
of
demobilized
service-men has proceeded with-:
out disruption. ;Our military pro-;
gram now is one of maintenance ;
of production* rather than initial,
building- of -plants
for making,
■war equipment.
Construction
now .constitutes
only 5% of_ the;
1944
war
production
program,
compared to 38% in 1941.
,!
;

on

second is

increased

than expected.

work
*An address made Joy

Gilbert j. postley & Co.

Fact of

let down.

a

matter

blocks to

The

is not inevitable.

materials

lated

automo-; large

seven

was

Incorporated.

were

the rails have two

this; output
and because the losses
conversion.' through attrition have been less

For* example,

of

with Crowell, Weedon & Co.; in the past he was an comparative issuance stock values
officer of Hartley Rogers & Co.,' and. a detailed memorandum on

DeLap

people

against a tech¬
nical, obstacle that precluded
any further
advance. It is
possible that the group can

of

costs

request from Huff, Geyer &
-'•!Vv" ;
!

the

meet

to

Hecht.

are

about

have been up

Teague, Industrial Designer ;

An Economic Pearl Harbor after, the war

National City Bank

available

many

so

said

long of them, or favor¬
ably inclined, that their in¬
ability to show anything re¬

prolongation of hostilities is giving .management .the opportunity to
plan for the 3
now that the peak of war produc¬
rec onversion
tion has been passed.
of plants and
Cut-backs
e q u ipment.
and contract cancellations are be¬
Reserves
are
coming more frequent. Surpluses

Company, and Glens Falls
Insurance Company, may be had

Also

been

So

rails.

the

in

had

either

"Risk Capital"

ance

upon

back to

And Unemployment
Industrial Engineer Urges Immediate
Start In Redesigning And Retooling For Post-War Needs. take the hurdle but based on
Looks For Larger Consumer Demands For New And Bet¬ present and recent action,
ter Products. Advocates Change In Income Tax System signs point the other way.
To Encourage

Bank Stock Earnings

the
fractionally,

to believe,

us

was

;

Based

Join Staff
Of Cruttenden in Los Ang.

Baldwin & DeLap

no
ac¬

The disappointment of the

week

(Continued on page 2273).

In Reconversion,

59

by
first

!yOvYYY;'.Y
„

To Avoid Serious Production Gap

54%
:

But as
showing

yawned, and: went
sleep again.

By LEO H. RICH*
of Walter Dorwin

mar¬

was

easy; as

market declined

Peail Haibor After The War?
Associate

going

as

counts led

faced tnis

we

the

means

15

123%

-

clarified,

them,

34

>

advanced.

news

that

had to
civilian

We Have An Economic

29

*

news,

the

the over-all war
as

The

corner.

the

much

32

"

industries________

produce

ages

effort.

the

immense

an

goods for our

r

50

.

938

8,085

around the

ket, acting in sympathy with

could dislocate their wartime
economic life and weaken their

Y

in the world."

"From

played up so strongly that a
great many people saw the
It
beginning of the end right

goods for export. We had to help
our
allies and friendly neutrals
avoid v serious civilian shortages.
For it was clear that such short¬

Na¬
all

to

that

begun was

had to look

In addition, we

;

find .means

the

and

we

volume of essential

Govern¬

had

drive

look beyond our

And

provide

to

enough

grips with the
enemy," . for
ments

the

quantities of weapons for our
fighting men and for the fighting
men
of our Allies.
It was not

when

time

a

"at

cisions^ which* ■}
wilj totich the life of

'

.

|

.

.

531

Extracting industries:
,Metal mining

need,

ate

by the Allied forces.

The first announcement

the full

beyond direct military needs.
was
not enough to i provide vast

immedi¬

the

had to

we

strategy.■.> yy.

important news of the
Italy

made

of the United Na¬

power

borders.

own

______—

—____

Totals

:Coal

:

—

Apparel
Tobacco

•

:

904

-

—.—

:__

tions

emphasized

115

989

—

605

■Furniture

Produc¬

Board,

..

1,005

466

_

.Leather

War
tion

36

1,668

—

*

the

fighting

-31

2,075

.

The

War Production Board has recog¬

nized that in order to tap

war

week is the advance in

172

3,895

1,432
s.'-v

'Printing

t

1,490

4,852

2,467

__________

______

,

31

7,635

3,440
1,985

;»

'Electrical, machinery
Lumber

-8,386

"

'

economic

27

' ;

9,977
...

' 482

__

_

Ttubber

of

man

rals

100

:v 47

_

coal—

and

speaking before the Conference of Commissions of InterDevelopment at the Waldorf-Astoria Hotel, New York City
on
May
17
«>
war,'.' continued Mr. Nelson, "the
Donald
M.
In

American

-

custom¬

room

finding the action dull are ,
either staying away or, if they
do come in, are busy discuss¬

Volume Of World Trade"—Views Compli¬
ing
Perplexing World Economy" After The War

Nelson, Chair-

Board

alarms.
ers

On "A High

cated And

friendly neut¬

380

•

'

"

6,388

__r

232%

28,560

,=24,329

9,394
6,805

__

Textile

.Transportation equipment ______
Stone, clay and glass______
Petroleum

1

12,235

-Paper
iFood ''___i-i_

Undeveloped Regions To Build Up Sound Industries—
To Disappearance Of Isolationism As Favor¬
able Factor In Effecting International Trade Agreements

United

Increase

32,636

«

,

5,956"

metals

Nonferrous

[■:

night. It had a few starts but

Aiding they all turned out to be false

Points

tions

industries

Manufacturing

Chairman Of War Production Board Advocates

the

valuable.

figures should prove

Millions of Kilowatt-Hours
1944
y ;.:
1939
'

s

Day holiday and the warm
weather, the stock market
didn't do much of anything in
the week ended Wednesday

"Our Welfare Is Bound Up With

The Federal Power

jj

Memorial

the

with

What

Securities

up

Teletype—CG 1279

.

NeW York Office: DIgby 4-8500; NY 1-633

^

facing

industrials

Y^r.Y.V YY'VY

135 So. La Salle Street, Chicago

)

double barrier;
against three
or
four. Break-out signs, in
either direction, lacking.
V

Rails

Co.

&

Members New York Stock Exchanse

.

Public Utility

holiday dol¬
on market.

Hot weather and

!

'

'

Quoted

—

and

ure

the

beliefs

and

There

is

a

old hopes
being heard.
chance that this
same

are

time the rails will go

with

through

zip. But buying stocks
when they're butting against
previous highs is seldom the
wise thing to do. Rather than
getting in here, I would ad¬
vise waiting to see if they
have enough get-up-and-go to
take 'em through.
:>
a

if

But

the

rails

are

up

and'Navy, has: against a double barrier, the
new models and
industrials are confronted

ments, of the Army

designed

many

products which our civilian clients. with
hope to have ready when the war
stops.

;

(Continued

on page

a

whole slew

Last March's 141.43

•_

2275)

>

of them.

figure is

(Continued on page 2277)

Volume 159

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4286

"

Regulated Monopoly Or
Competition In Transportation
V

2255

Delaware, Lackawanna

Old

Colony

4s, 4y2s, 5s, 5%s

'

& Western Railroad

*

New York, Lackawanna

By SIDNEY L. MILLER*
Professor of Transportation, State University of Ohio

Bought & Sold

& Western Division

1

Transportation Expert Rejects Monopoly As Wasteful
And As Leading To Government Ownership—Favors

1st &

pflugfelder, bampton & rust
Members

61

New

York

Stock

Refunding 5s, 1973

Income

*

latory Body, With A Co-ordination Of All Types "To
Recognize And Preserve The Inherent Advantages Of
Each"—Places Efficient Public Service As The Supreme

■-

5s, 1993

(When

Issued)

v

Exchange

Broadway

New York 6

Telephone—DIgby 4-4933

Bell

Teletype—NY 1-310

;Test In A Transportation Policy

The Post-Way Period

The transportation problem, like the poor, is with us always.
The nature of that problem and emphasis shift; upon occasion it has
1

{been acute,
•'crying for
i

positive

"1

i

i

occasion it has

mild

11

'

1

1

but

An expansion of brokerage and

v

correc¬

I §|1

the

develop¬
of

ment

[traffic,;
b

a s

i

the

the

,

was,

11 y,

c a

on

Should

ner

shrinking

Club.

an

size

-

celebration in:>• that. it marked the

transport
able

time, adapting

same

old and

forms of transport to

new

anniversary of .the. opening
of the Chicago and Schenectady
branches of the firm, in addition
to honoring the admission of new

traffic,

and, at the

the pattern of

25th

plant to avail-

*

Sidney L. Miller

members.

today's need in an

effort to utilize

of the Bache Quarter Century
The event was > a double

i't!V" ^

r

the

Among

special guests was
Arthur F. Broderick, senior floor

to' the maximum

the

particular merits of each form.
Post-war, it is quite certain that

of

partner

the

firm

former

and

except

as

we

determined

are

to

essential if the public is to bene¬

fit from the most effective utiliza¬
tion

members

were

Chicago,

Schenectady, Troy

In

of transport

— constructive
action
against a continuation of "mud¬
dling through." Lacking such ac-

as

*

*An

address

delivered

before

the

Transportation

at

Astoria

New

Hotel,

City,

York

May 23, 1944.
(Continued

,/

'Laird,

Bissell

&

120

Meeds,

Broadway, New York City, mem¬
bers of the New York Stock

Ex¬

change, have prepared an inter¬
esting
bulletin
discussing
the
current

situation

Trust Co.

in

York

New

Copies of this bulletin

be had from Laird, Bissell &
Meeds upon request.

may

cast¬

e

ing

■;,

Revenues

for

Class

an

expansion

of

brokerage

banking activities after this

and
war.,

and small business
out the

be

men

through¬

country will undoubtedly

seeking profitable investment

when peace conditions return.
the

demand

to be

for

side, there promises

unprecedented requirements

new

this

On

capital from business in

well

country,; as

sources

as

from

throughout the world."

.

;

be-

iions.^' V-v

has
rel

G

So.

LaSalle

St., Chicago 4, 111.

SEABOARD AIR LINE

COJIPANY

Specializing in

Underlying Mortgage

and

'■"it

•;1,134

Leased Line Issues

862

1936

,

1935
the

of

903

.

_

/"Influenced,

found

Van Tuyl & Abbe

858

.

unnaturally, by
the
1938'year's depression.

im¬

•7

'#

a

repetition of
influences,
showing, it is
year's
result

72 WALL STREET

NEW

1930-34 in¬

years

that.

«

1

that.

YORK

IN TERMS

Baltimore & Ohio

timates,
be- > W. Wendell Reuss produced.
It has been estimated variously
lieving that
the figures { are reasonably con¬ that the backlog
of automobile
servative; however, fault is found production is in the neighborhood
with the failure of most estimators of 26,000,000 units; proration of
1929
to give any approximation as to the
peak production rate
the duration of such revenues es¬ (4,587,000 units)
would indicate

Baltimore & Ohio

timates.

the need of such level of productio for very close to six years.

V.;/!:%(.>
is

the

speaker still
holds to his basis for forecasting
the

why

Post-War

level

for

Class

Revenues, which em¬
use solely of the Auto¬
mobile Industry's Production Rec¬
ord.- Not only does THIS basis
braces the

accord with the

an

' ■' ' ?

reconvert

into

extra

auto

5/95

Chicago & Alton

3-4l/2/57
3/49

.

Chic. & East. III.

5/95

Chic. Mil. & St. P.

5/75

Chic. Mil. & St. P.

5/2000

Lehigh Valley
Lehigh Valley

4l/2/03

4/03

Seaboard

6/45

St. L. San Fran,

5/50

St. L. San Fran.

4/50

St. L. San Fran.

4l/2/78

STOCKS

manu¬

facturing facilities, on the basis of
annual output of possibly
as high as
6,500,000 units might be

Boston & Maine Prior Pfd,

which

volume

4v/2/B0

Buff. Roch. & Pitts.

y

However, it is possible that the
auto
manufacturers, with their
prospective excess plant in the
Post-War period, would desire to

1

Freight

reach

•

BONDS

of each passenger car

That

,

5

Buy-Sell-Quote

equalled $1,052.
Thus, we have a CONSTANT of
roughly $1,000 in freight revenues

t e n t i a 1
esti-

•/.*

such depression year's
and taking the 4929

the

Rev-

•

;

1,428*

clusive because of

of' the;

r o s s

RAILWAY

■

quar¬

en u e s

.

Skipping the

..

with

.

pacts

speaker

no

1.939
1937

7.

$51/2
$7J/4 bil-

and

1919,

Broadway, New York 5, N, Y.

231

957

V 1938

"

tweem

p o

of

"

for

ranging

branches

spring

120

$1,184

1940

•

1

h '. period

range

the

MEMBERS

Ne^w York Stock Exchange and other
leading Security and Commodity Exchs.

V'vA-..'

;j-

1941__

I

commenting oil the opening

in

duced.

Gross Operat¬

of the Chicago and Schenectady

cumulated by millions of workers

N. Y. Trust Co. Interesting

r

The

The record savings now being ac¬

2270)

on page

o

ing' annual

and

Bache said: "There will again be

of

Waldorf-

the

f

admitted from the

following the first World War, Mr.

Mr.

by

Institute

Other

of service.

years

club

.V

Billions Annually—

Able economists are more freely appraising the Post-War pros¬
pects for the railroads and, using Gross National Income (Product)
as a base, are
more
IN TERMS of passenger cars
readily *
pro¬

Buffalo offices.

of each of the several forms

Miller

25

J the

$5 and $7

V

Exchange,
after

continue obvious wastes; and it is
certain that constructive action is

{

sue

joins

Between

Efficiency,
While Debt Reductions And Refundings, Together With
Excess Profits Credits, Will Enable Fixed Charges To Be
Met Even With Greatly Reduced Earnings

R oads

who

Be

Post-War Wages Will Be Offset By Greater

Goverhor of the New York Stock

shrinkage will again be in point,

Bought—Sold—Quoted

:

Highest In Peace-Time/Since 1929. Believes Increased

war;

L.

the occasion, of the annual din¬

two-fold:

over

.

last

Harold

1

{Basing Estimates On Prospective Post-War Automobile
Production,: Broker Says The Post-War Rail Revenue

that experienced after

was
predicted by
Bache, one of the se¬
nior partners of J. S. Bache & Co.,
36 Wall Street, New York City,

war

problem v

•

similar to

5

By W. WENDELL reuss* -v
Partner, McLaughlin, Baird & Reuss
.

banking activities after this war

Prior to

0£ The Railroads
.

*

tives.

Class A & B

'

.

Activities-After War

aski

for

;

.i

Expansion
Of Banking, Brokerage

/ been merely
ing

'

i

Bache Sees

ac-

tion, and upon

•'chronic,

i.I

Chic. & Eas. III. CI. "A"

figures arrived at by use of Gross
Income
(Product), but arrived at, the backlog thereby
the results—to the speaker's be¬ theoretically being equal to four
lief—are much more convincingly years' production.
•./ ■ ■ ■

Chic. & Eas. 111. Common

National

Lipe-Rollway Class "A"
Pollak Manufacturing

>

*

..

arrived at in the eyes

BESIDES

man,

Bond Brokers

measure

"

of the lay¬
Thus, we have a minimum and
providing 'some maximum potential output rate

of duration of the Post-

range of 4,500,000
and 6,500,000
units
annually, good for six to
Division of the annual rate of four years!
U. S. Passenger Car Production
Multiplication
of
the
CON¬
of
into U. S. Freight Revenues for STANT
roughly
$1,000
in
Class 1 Roads for the years 1935 freight
revenues
per
car
pro¬

War

level of traffic.

148 State

Vilas & Hickey
Members

New

York

Stock

#

Exchange

>

;.,//

•.

/•.>-

through 1941, results in the fol¬
lowing freight revenues annually

New York 5, N. Y.

49 Wall Street

Telephone: IIAnover 2-7900

/

Teletype: NY 1-911

v:"

Address

made

before

the

possible
of

results

annual

:

Teletype BS 259

N.Y. Telephone IIAnover 2-7914

production

4,500,000-6,500,000
in

possible

units,

Post-War

Statistical Association FREIGHT REVENUES (as distin¬
from. Gross
Operating
Sheraton, New York City, guished
(Continued on page 2268)
May 24, 1944.'
•':,/,•/;

American

!'t

^

:

duced under the minimum-maxi¬
mum

rate

*An

St., Boston 9, Mass,

Tel. CAP. 0425

;

at Hotel

Grand River

Valley R.R.
Discussion

.c

of

We maintain active

'

trading markets in:
1st

"THE POST WAR PERIOD

4s, 1959

SEABOARD-ALL FLORIDA

•1r:"

and THE RAILROADS"

6S, 1935

'/

•

Copy

on

request

BONDS AND CERTIFICATES

,

■

Mclaughlin, baird & reuss
Members New York Stock

-■

V

"p;

1. h. rothchild &

Exchange
.

ONE WALL STREET
TEL. HANOVER 2-1355




NEW YORK 5
TELETYPE NY 1-1310

.

.

co.

52 Wall Street

HAnover

2-9072

n.

Adams & Peck
63 Wall

specialists in rails
y. c.

5

Tele. NY 1-1293

Street, New York

BOwling Green 9-8120
Boston

Philadelphia

5

Tele. NY 1-724

Harttord

THE COMMERCIAL & FINANCIAL CHRONICLE

2256

Thursday, June 1, 1944

A. E. Higgins

With

Gole, Hoisington Co.,

Nat'I Sec. & Research

SPECIALISTS

Investment Counsel

Vice-President

Laird,

Douglas

in Charge of Sales of National Se¬
in

TRADING

v.

IN

MARKETS

curities
120

Real Estate Securities

REAL ESTATE

Since

that organization as
representative
in
Mr. Higgins
was
formerly
associated
with
Bond & Goodwin, Inc.
'

Bell Teletype

Seligman, Lubetkin & Co.

Exchange

Incorporated
Members

Dlgby 4-4950

TUDOR CITY UNITS

C. H. TIPTON

inately

CORP.

a

for the

sharp
for

WOrth 2-0510

As far

as

is not the

reason

alone

Despite

price, we feel that many is¬
sues
are
still selling far below

the

their intrinsic value and that cur-

bids

renLprices are only a partial cor¬
rection
of the
unequitable low

Savoy Plaza, Inc.

prices at which this type of secur¬
ity has sold in the past. There
are
some
issues of course that

We solicit your

2d Mtge.
With

offerings

or

have been carried up

3%-6% Income Bonds
or

corrective

this

without Stock

move

higher

selling

now

These

should.

can

in price by
which are

than

they

easily

be

simple study of
in rela¬
tion to the value put on its mort¬
weeded out by a

the value of the property

AMOTT, BAKER & CO.

by the market price of the
mortgage securities. Our sugges¬

Incorporated
•; 150

gage

Broadway, New York 7, N.

Y.

tion

Telephone BArclay 7-2360
Bell System

of

rather

Teletype NY 1-588

caution

with

•

Inc.,

Co.,

by

Ill

firm

believes

appears

at

current

levels.

circulars

as

and

be

may

United

had

on

States

Bartgis
Lumber

from

request

upon

F. H. Roller & Co.

■

stances that

New York Stock

Exchange
Weekly Firm Changes

suggesting an

or

The New York Stock Exchange

retire

to

;

depreciation

for

deduction

tax

an

adverse

effect

on

Williams,

general

special partner in Tucker,
Anthony & Co., New York City,
retired as a general partner in the

Washington Dodge withdrew as
present real estate ventures. For a partner in Arthur Wiesenberger
instance, let us consider tene¬ & Co., New York City, On May
Some

ments.

claim

estate experts

real

is "bread and butter" realty.

own

31st.

■

•

that the best real estate to

circum¬

depression, enough people will be

especial

require specific recog¬
' ■■■■'■

:/7,.;\

W.

and

some

situations of

itself

changes:.
Rodney

Franklin

just out of the goodness of their
hearts.
Imprqved real estate does
become obsolete in time and an
firm as of May* 31st. He continues
investment in an issue that doesn't
as a special partner.
Mr. Williams
amortize its debt is not as good
will no longer act as alternate on
as one that does.
the floor of the Exchange for Page
Caution also suggests the ad¬ Chapman, Jr.
John D. Warren retired from
visability of considering the effect
of new construction after the war. partnership in Gammack & Co.,
New
construction
is
bound to New York City, on May 31st.
have

Franklin

Cole

W.

H.

Hoisington

has announced the following firm

your debt.
The Government does not allow a

used

being

They place tenement property in
this category on the theory that it
caters to the very low wage earner
and that no matter how great a

concerns

several

and

peculiar
•

Bros,

real estate $>-

advice of caution.

our

the

well

as

pre-requisite when investing

necessary

they have had a very
increase in market value.

This fact

N.Y.

announced

Copies of this interesting analysis

most

securities go,

BROADWAY

economic

and

is

and rightly so.

investment.

Security Dealers Ass'n

NEW YORK 6,

Column

securities

&

Roller

attractive

part has been bullish on real estate
Individual issues which we recommended
have in the majority risen in price after such recommendation. Occar
sionally, however, we have interposed a note of caution; Caution is
one of the fundamental elements in security buying.
It is predom¬
This

AND

H.

which

CAUTION

Stocks

counselors

consultants

Broadway, New York City, have
prepared a comprehensive anal¬
ysis on Great American Industries

By JOHN WEST

*"

SECURITIES

ment

New York.

Situations of Interest
F.

HAnover 2-2100

Real Estate Securities
.'V

all

ill

v-y "

Security Dealers Association

Broad Street, New York 4

41

We Are Interested In Buying

Members N. Y.

York

New

NY 1-953

FRED F. FRENCH

joined

Greater

Members New York Curb Exchango

)

Formation of the firm of Cole,
Hoisington & Company, Incorpor¬
ated with offices at 120 Broadway,
New York City, to act as invest¬

Corporation,
York City,

wholesale

SHASKAN & CO.
40 EXCHANGE PL, N .Y.

New

that Arthur E. Higgins

announces

has

1929

SECURITIES

Members New York Stock

Research

&

Broadway,

of

ber

to retain their tenants.

their

Harland

and

former

W.

a num¬
associates in

the investment counsel organiza¬
tion of Lionel D. Edie &
■

Co., Inc.:

Mr. Cole for the last eight years

has

served

Executive

as

Vice-

President of Lionel D. Edie & Co.,

Inc., his association with that firm

dating back to 1933.
he

for

was

ten

Prior to that
years-with the

Baltimore

investment

banking

firm

W. Lanahan

&

of

W.

Com¬

recently merged with Alex¬
ander Brown & Sons of that city,
Educated at Johns Hopkins Uni¬
pany >

versity, Mr. Cole served
in "the

necessary

Cole

Hoisington, together with

serve

United

in

the

States

last

as

ensign

Naval

Re¬

He

has

war.

-

interested himself broadly in tax
of bonds in this locality
should, therefore, be careful to legislation and foreign and domes¬
buy only those whose earnings tic economic conditions and has
gained recognition as an author¬
are sufficient to stand unusual ex¬
ity in these fields.
penses after the war or at least

Buyers

Mr. Hoisington has been active
locate and live in hous¬ those where the financial condi¬
ing if the price is cheapr enough. tion of the ownership corporation in the investment banking and the
Lack of help and materials has Another feature of this type of
investment counsel business for
is good.'
?
' <;•
V
ivt: a
become
a
serious factor in the real estate is thatisome of it con¬
more than twenty years,
serving
Some
operators of properties
operation of improved real estate. sists of "cold water flats" elimi¬ have had the foresight to improve as manager of the Pittsburgh and
KANSAS CITY, MO.—The fol¬ Depreciation charges have here¬
nating the expense of furnishing their properties to compete with Newark offices of the Guaranty
lowing are officers and commit¬ tofore been considered a book¬ heat and hot water. Title certifi¬ almost
any ; condition.
For in¬ Company of New York, and for
tees
of Bond
Traders Club of keeping item to be used as an al¬ cates secured by mortgages on this
seven years was with Lazard Frestance, the operators of London
Kansas City for 1944:
lowable tax deduction. Incidental type of property have been popu¬
res &
Co., supervising sales and
Terrace, whose bonds are paying
Manuel
R.
Mouber,
Stern painting and minor repairs were lar and have been commanding
research. He joined the Edie or¬
2% fixed interest today, in addi¬
Brothers & Co., President; Knee- formerly made when necessary fairly
good prices despite the tion to the regular .fixed interest, ganization two years ago.
land Jones, A. E. Weltner & Co., and charged to current operating
Also associated with the organ¬
questionability of the security. have been continually furnishing
Vice-President;' William B. Prugh, expenses.
ization
of
the
new
firm
are:
Some
of
these properties are as the
Now?; in many cases,
apartments of this property
small
details f are
being much as 40 years old and their
Thomas B. Comstock, Herman U.
Prugh, Cobest & Land, Inc., Sec¬ these
out of current income. A furnish¬
retary-Treasurer.
w
;
Clark, D. Fremont Bearer, Ray¬
neglected or put off because of obsolescence is decidedly appar¬ ed
apartment is
usually more
mond
Membership Committee: Leon¬ the help or material situation. No ent. After the war, many of these
Ziesmer and
Edward
S.
saleable
than
an
unfurnished
ard A. White, Whahler, White & longer can the axiom of "a stitch
properties and the title certifi¬ apartment and the percentage of Flash,Mr. Comstock was associ¬
Co.; Edward L. Meyer, Harris, in time saving nine" always be cates secured by them are bound
ated with Calvin Bullock before
occupancy of the apartments in
Upham & Co.; H. H. Hunter, Baum followed and the result is actual to be injured by the competition
joining the Edie organization nine
this house
has been conclusive
Bernheimer & Co.
years ago, while Mr. Clark was
depreciation.
of
low
cost; "slum
clearance" proof
of
this
wisdom.
Proof
with Halle & Steiglitz for seven¬
Program Committee: Earl W.
Indentures of many real estate projects scheduled to be erected
enough, to make the extra inter¬
teen years.
Price, C. W. Price & Co., Chair¬ issues provide for the payment of by the large insurance companies.
Mr. Bearer and Mr.
est distribution.
Ziesmer will represent the firm
man; T. F. Wagner, Harris, Upham
interest to the bondholders from This new modern housing will not
Another example of this method
& Co.; A. W. Sawyer, H. O. Peet
in
Pennsylvania and California,
net
receipts
of the properties only outmode the properties men¬ was used by the operators of 1088
& CO.
respectively, arid will be located
before depreciation has been de¬ tioned above, but will also out- Park
Avenue, another bond issue. in
Publicity Committee: Harry L.
Pittsburgh and Los Angeles
ducted. These issues are generally advantage them with tax exemp¬ The situation here is
quite differ¬
Coleman. H. O. Peet & Co., Chair¬
where they were with the Edie
the result of a reorganization and tion.
7 .7 /,
.■/, ■■. ent than London
Terrace, because
man; William J. Dyer, E. W. Price
organization
for
a
number
of
in many
cases the
bondholders
Real estate bond issues secur¬ the suites of this house are large
.&
Co.;
Edward
Mader, B. C. are also the actual owners of the
years.
those
at
London
Terrace
ing properties in the Garment and
Christopher & Co.
property securing the bond issues. Center section of New York City small. Because of their size, the
Finance Committee: Emma: M.
It would behoove present bond¬ have recently moved upwards in apartments at 1088 Park
Avenue
Attractive Situations
Hall, Commerce Trust Co., Chair¬
holders of these issues to give price because of the demand for were difficult to rent.
It was im¬
Panama Coca-Cola Bottling and
man;
Russell E. Siefert, Stern serious consideration to their sit¬
this
type of space resulting in possible to reconstruct them into Coca-Cola Bottling Co. of New
Bros. & Co.; H. G. Appel, John
uation and think about setting up higher rents and better income smaller
apartments
because
of York offer interesting situations
Nuveen & Co.
a
cash reserve for depreciation for the bond issues.
In this sec¬ war priorities. While it is the in¬
according to circulars being dis¬
so
that
after
the
war,
funds tion, we would also like to call tention of the management to tributed
by Hoit, Rose & Troster,
would be available to rehabilitate attention to an ."after the "war" make such an alteration
after the 74 Trinity Place, New York City.
their property for their ultimate caution.
A group of enterprising war, they were resourceful
enough Copies of these «irculars may be
benefit.
A new investor in the real estate men, a short while ago to furnish
some
of these
large had from the. firm on written re¬
same
securities
would
exercise purchased a very large plot of
apartments in the interim.
Their quest.
caution were he to assure him¬ ground in this locality. It is said
Also
CHICAGO, 111.—Announcement
interesting
at
current
adroitness was successful in re¬
self of one of two things; either that they plan after the war to
is made that Donald E. Nichols
levels is Butterick Co., Inc.
A
to make sure that a cash reserve construct an ultra-modern mer¬ ducing the vacancies to the extent
circular discussing this situation
has become associated as a Vicewas being set up should necessary
cantile
building that will have of paying carrying charges of the mav also be had from
President, with the Chicago in¬
Hoit, Rose
repairs be postponed, or if an ex¬ three features not currently en¬
vestment firm of Ames, Emerich
building and making small inter¬ & Troster on written request.
amination of the financial state¬ joyed
by the present buildings
& Co., Inc., 105 South La Salle
est payments on the bond issue.
ment of the property reveal no constructed here.
The features
Street, members of the Chicago
cash surplus, then,, either make, or are:
Hotels
are
currently
having
Rails Offer Interest
complete air conditioning,
St^ck Exchange.

Officers Of The

Kansas City

nition.

found to,

Traders

,

.

Donald Nichols V.-P.

Of Ames, Emerich Co.

Mr.

tive

Nichols, who has been

on

ac¬

La Salle Street for the past

twenty-two years, was formerly
President of Ryan-Nichols & Co.

have

an

of the

a

it

made, a personal inspection
property to make sure that
was
physically being kept in

first

class

Real

Dernbach in Chicago
CHICAGO,
Dernbach

is

ILL.—William

engaging

in

an

vestment business from offices

122 South Michigan Avenue.




A.

in¬
at

securities

and
underneath the build¬
ing for the tenants cars. We doubt
if

shape.

estate

usually

interior loading platform

garage
the

able

present
to

buildings will

make

the

be

structural

offer

changes to compete with the latter

other

two

yields higher than that of
corporate securities.
But,
when the yield seems too high,
caution would suggest5 an inves¬
tigation to determine j that part of
the earnings of. the ..property are

features

of

this

proposed

building, but they will in all prob¬
abilities

be

conditioning.

forced

to

install

This will be

an

air
ex¬

pensive proposition, but no doubt

such
ness

able

over-abundance

an

to

reduce their funded

considerably. This is
situation.
for

of busi¬

that most of them have been

an

debt

attractive

Lower interest charges

the future

as

a

result of the

reduction of debt should make ex¬
tra

funds

available

for necessary

in the

future

replacements.

Gary Railways
common
and
Memphis
Street
pre¬
Railway
ferred offer interesting possibili¬
ties,
according
to
memoranda
issued by Bittner & Co., 80 Broad
Street, New York City.
Conies
of these memoranda, into which
are
incorporated news of recent
developments in
the situations
and earnings, may be had f»om
Bittner & Co.

on

request.

mm

.«iwa^>v#l'^

Volume 159

Number 4286

THE COMMERCIAL & FINANCIAL CHRONICLE

tioning cannot work without the ates bank deposits. It is not a
cooperation of the people, and healthy
thing
for
the
banks,
there are many prices that are
either, to be so swollen with gov¬
largely beyond government con¬ ernment bonds. In the long run

(Continued from first page)
strange that many people are seri¬ meet this post-war budget will act
ously concerned about this debt,—- as a damper on ' enterprise and
how we can ever pay it, and what employment. The character of the
it will do to
This debt is

us

a

meantime.

in the

dominant feature of

the economic landscape,- It is the
central element in the relation of

the

banks

and

/Discussions
from

of

the
the

government.

subject range
fear to the

terror-stricken

,

happy nonchalance of
theorists

who

there

practically

is

of the

some

to

appear

believe
limit

no

to

debt expansion.
■''*;•
"The problem of the debt even¬

taxes will have to be

of carrying the debt is the danger

big debt involves of a tremen¬
dous! increase, ip the outstanding

course

an

and

the

first' of

have

these

the

succession

long

of

after the war, and thus

is

to

halt

deficits

check the

growth of debt.

past experiences, such an

on

increase

inflation unless

means

"Government debts

of

the

is

differ-!

are

private debts by

fact

controls

That

we

careful and wise indeed.,

very

ent from

common

determination

money—principally of
in the form of bank depos¬

increase

Based

Y

The

of

This increase in money means
in purchasing power.

its.

questions..

we

•■

a.

are

whether

v

.

"The second part of the question

tually boils down to two principal

sense

judged from

this., point of view.

volume

that

the

the

creation

the

reason

reason

government
of

money.

why

govern¬

Already we have
had nearly fourteen years of run¬
ning a deficit, and we .have to

ments

look

increase the amount of money in
the country and pay their debts

out

deficit

that

don't 'get

we

habit,

Placing

.

the
restraint

spending will take a lot of
guts, and may disappoint a good
upon

they

very

find

seldom default when

themselves

debt, .instead

of

heavily in
doing that, they

this

extra

money,

usually depreciated in value. This

people, but it's got to be is the old familiar process of inif we are to keep the debt
ilationY;YY yY/Y Y Y Y !Y" .• y/y
problem under control, hold our ;
"The whole operation of gov¬
currency sound,: and inspire peo¬ ernment finance in these days is
ple with confidence to do business so gigantic, and apparently so out
and give employment.
• •'YYv •><;! of our control that most of us feel
•"The second question has to do pretty helpless about it.- But
the;
with carrying the debt we shall real fact is that we are not
help¬
many

have.- There are two parts to this
question—(1) the question of pay¬
ing the interest, and (2) the ques¬
tion of the effect upon the volume
of purchasing power, and henco
upon prices.

"As

to

Y

.

(1), interest

V

■

at present

rates may be

something like 6 bil¬
year; and that is not
sum,
though
it
larger national budget

lion dollars
an

means

than

a

impossible
a

we

cially

like to

in

view

,

contemplate,
of

the

maintain oUr armed
care

of

war

espe¬

need

to

services, take

veterans, and

run

the

For

example,

there

is

the

price of farm land.
Since 1939
price of farm real estate in

that is not a normal

States has

the United
and this

risen

36%,

is exactly the same per¬

centage increase
1914 to 1919.

as

in the

years

While it is true that

the rise started this

time from

a

lower

level, the trend lately has
been accelerating, and will bear
watching. The farmer went broke
after the last war largely because
he went in debt to buy land at
constantly rising prices. It would
be a good idea this time to buy
bonds instead of land.

"That

great

leads

in which the voluntary
people is supreme,

area

action

of

the

and that is the sale of

the

To

bonds

extent

war

bonds.

sell

can

we

investors

to

second

war

avoid

we

the

increase in bank deposits which is
the great cause of inflation. Here

committee

the

of

Amer¬

methods

that

our

Loan

with

the

effective.

be

may

A

gram has been worked out

committee,

the

of which

essence

is that every bank
to canvass its own

pro¬

by this

will be asked

depositors and
as possi¬
ble, this should be done by face
sell them bonds.
to

face

As far

interviews.

The

Bankers

is

sending to every
bank a plan of action, which we
believe will be generally followed.

"Every bank will be asked to
£ix a quota for itself in the War
Loan

and

report

then

several

will

bfc

times

asked

during

collected

part in the sale of

Treasury Committees are bankers.
The Treasury tells us that some¬
thing like 80% of the bonds sold

nance

These figures will be
by the local War Fi¬

Committee

who

will

send

debt

will

spends
and
huge
government

unbalance

our

erations of issuing

"From

economy, or whether we take it
in our stride, as this great coun¬

the

try has in the past taken

ers

stride

in

its

extraordinary eco¬
developments.
"There are, of course, certain
so many

nomic

things which
do

government

has

to

with

the

beginning of
Treasury has con¬

the

War

sulted with
in its

a

committee of bank¬

war

financing

and

I think

our

recommendations

it

is

fair

to

program,

that

say

have

been

peacetime government. The budget
prospect is not hopeless but it is
bad enough, so that every added
proposal for government spending
ought to be put to the acid test. make the decision. Let
A most serious danger is that the tion' a few. "•.•
'Y'/.'-Y
high level of taxes, necessary to Y "First, price controls

me

"While

every

our

corner

boys

are

the

of

when banks

ra¬

Loan

drives,

also,

that

is

bigger than the economic effects.
They

are

more

than

an

effort

to

raise money.. They are an oppor¬

tunity to stimulate and

renew

the

to

in which there is

in

which

there

no
can

minority; and
be

complete

unity of feeling and action.
are

a

vital

They

expression of patriot¬

ism.
We bankers can be proud
This is because
buy the bonds it adds that we have a leading place in
the fuel of inflation, for it cre¬
this great enterprise."

buy

..•

and

War

Gener¬ loyalty of the American people to
ally, speaking, the program of their
country and to its ideals.
great war bond drives has been a
They are one national enterprise
magnificent success.
•'./ YY
'Y

men¬

as

"big busi¬

people who perhaps lose sight
big business makes;
possible the existence of thousands
our

of the fact that

of small businesses.

But that's not what I started out

is the acceptance of post-war re¬

Helpful to the Treasury.

preventing inflation. Its
whole
policy
of pcice
control,
"In. the
spending, method of financing,
Fifth War
Loan, the
taxes, all these arebasic to re¬ banks want to do a finer'job than
sisting inflation, but over and be-" ever before. We want to sell inore
yond them, are many fields of ac¬
bonds to the people, so it will not
tion where the people themselves
be necessary for us, as banks, to

I have avoided the term

ness" you may have observed YThe
term is anathema to quite a few of

tion in service.

"There is something about these

the bonds.

very

,

to talk about. What

•

whole

some severe

participat¬
ing banks/ It will be a competi¬

government
this

bump of optimism (that's
phrenologist calls it) has
contusions; if
you feel discouraged re. the future
of the world in general and of your
own country in particular—well
j ust go around and listen in to a lot
of meetings these days. I mean post¬
war planning conferences held
by
important trade and manufactur¬
ing groups, and by America's most
important industrial concerns.
suffered

the results back to the

fighting in
world, this
will be our primary task toward
in
the
last
drive
were
sold
through the banks, either by the winning the war, for our success
in selling bonds will go far to¬
efforts of the banks themselves,
ward determining what kind
of
or by the efforts of others whose
less at .all.
It is we, the people,;
world our boys will have to live
who really determine how much work was made easier because the
in when they come back.
Y
banks handled the mechanical op¬
the
whether

If your

what the

to

the

through it.

our

series.

Treasury

most effective war effort.

bonds. A substantial proportion of
the State and County chairmen of

a

of cooperation, in order
work in the Fifth War

drive the number of sales and the
dollar
amount
of
sales
made

pride in

thirty-four of

SCHENLEY DISTILLERS CORP., NEW YORK

ican Bankers Association has been

discussing

is where the banker c&n make his

"As bankers, we can take great

NOTE—From time to time, in th is
space,
there will appear an article which we
hope
will be of interest to our fellow A mericans.

This is number

"The

Association
the

to

me

banking busi¬

advertisement

ness.

the

which is

done

.

trol.

,

with

2257

many.

buoys

me up

sponsibilities by American business
the all important task of con¬
verting men and machines to peace¬
time pursuits. And,
invariably, first
on the list of
musts—expressed in
every meeting this writer has at¬
tended—is providing jobs and op¬
portunities for the returning boys
of our armed forces. Business—In-0
dustry—makes no bones about it.;
There just wouldn't be any of our
.

.

.

vaunted

"American

Free

Enter¬

prise" were it not for the jobs these
boys are performing—away from
home.

,

So American

Industry is planning
"home-coming"
for the
adjustment of young lives to peace¬
ful pursuits. And this adjustment
may not be precipitate
may
take a little time, and
tolerance,>
and patience. But leave it to

for the

.

.

.

.

.

America.

We

broke

the

.

world's

record gearing up for war—we'll
break another record re-gearing for
Peace!

And, don't

you worry—you guys

over there. Just you finish
your job
and—COME HOME! And after the

Victory^Parades—ive'll get down to
business!

'

MARK MERIT
of schenley distillers corp.

This advertisement appears as a matter of record
r

only and is under

no

circumstances to he construed

offering of these securities for sale, or as a solicitation of an offer to buy
Y'.'V.'y Y: ; ' y *
The offering is made only by the Prospectus.

any

as an

of such securitiesy

FREE —-A booklet containing reprints
of earlier articles in this series will be
sent you on request. Send a post-card to
me care of Schenley
Distillers Corp.,
350 Fifth Avenue, New York 1, N. V.

Louis Groch Becomes

:vY:YY;YYYY 57,337; Shares YYY//

Res.

-

Y^adio>Keith>Orpheum Corporation

Mgr. In Detroit

Of Hornblower & Weeks
DETROIT.

Groch has

Y;^Y'!YYYYY'6^:;Frcferred Stock, Cumulative
(par value, $ioo

YYYY >YYYYYyYvY/ Convertible

on or

per

: YvYY;'!;Y';/;YY/''-

share)

before April

n, 1947

MICH.—Louis

J.

been

appointed Resi¬
dent
Manager
of
the
Detroit
Office of Hornblower & Weeks,
Penobscot Building.
Mr. Groch has formerly managed
the
Detroit
and
Albany
offices of J. S. Bache & Company.
Have

started

in

1916

with

an

Ohio

Price

Copies of the Prospectus

may

be obtained in

undersigned,

as may

$91.25

any

per

Share

State from such of the several Underwriters, including the

lawfully offer the securities in such State.

municipal firm Mr. Groch
has had a broad experience! in
the securities business including
the handling of stock accounts,
the underwriting and distribution
of corporate and municipal issues.
After
returning from France
where he was in the Army Air
Services in WorlC War I, he re¬
presented
securities
firms
in
Minneapolis,
Duluth,
Chicago,
Philadelphia, and most of the past
15 years in New York.

Hornblower
the

first

New

&

Weeks,

York

among
Stock Ex¬

change houses in Detroit, opened
their office here in 1908 aftd have
been

Lehman Brothers

Goldman, Sachs & Co.

located

Penobscot

firm

in

was

Since

been in




the

years.

Perrigo.
June 1, 1944

in

Building for about 35
established

The

1888.

January, 1943, Charles R.
a
Chicago partner has
charge of the office dur¬

ing the absence of the Resident
Partner, James J. Phelan, Jr. who
is a Captain in the Army Finance
Corps and now serving in India.

,

FINANCIAL,CHRONICLE'»

THE COMMERCIAL &

2258

FACILITIES

CLEARANCE

H. H. Robertson

Company

Our facilities are of

For

Philadelphia Stock Exchange
Members New York Stock Exchange

Insurances

COMPANY
r

-

$20,000

Bonds

I, 1950 1.25%
1, 1952 1.40%

'

A. Webster Dougherty &
"■<

Co.

1421 CHESTNUT

Corp,

Municipal
PHILADELPHIA

■

STREET

s

Philadelphia

Teletype

Rittenhouse 2580

PH 70

,

Federal Deposit Insurance

Federal Reserve System

April
April

.

)YVYY.

■

Member

Member

PH 265

N. Y. WH

Phila. RIT 4488

■

PHILADELPHIA

Philadelphia 2, Pa.
—

Lives and Granting Annuities

on

15th and Chestnut Streets

'Y.

o''::■'

Members

Bell Teletype

■

30,000

THE PENNSYLVANIA

Walnut St.,

mbderate.

Inquiries Invited

BUCKLEY BROTHERS
1529

Farrell, Pennsylvania
■

4%% School District

the best and the cost is very

request

Memo on

'experi¬
security

Y<

■Y/--

transactions.

Pennsylvania

Tax free in

for

department

enced

and Security Dealers " an
handling the clearance of

Brokers

to

offer

We

New York

BOwling Green 9-8184

3-7253

-i-

"

:<X

3
We

specialize in

By EDWARD W. KLING
Association of Philadelphia will hold its
The Pennsylvania Market, ^particularly with respect to newer
Outing at Manufacturers' Country Club, Oreland,;
Now and again a new issue comes
Penna., oq June 16. Golf, softball, tennis and swimming will com¬ issues, has been rather quiet.
prise the afternoon activities. President George J. Muller,1;!Janney; out and bidding is terrible. If it is small and reasonably short, it
& Co., announces that competition in golf will center in a contest for! disappears almost immediately, but if large and long, about twothe I.T.A.P. Cup, offered this year for the first time.
Alfred W.j thirds sell fairly rapidly and the balance drags on and on and even¬
tually peters out.
There is no weakness on the part of the banker
Tryder, H. T. Greenwood & Co./f
In
approving the issue the Com¬ and also no lack of patience, but<3>is chairman of
the Outing and
mission
held
that
a
fee
of
$87,500
rather
William J. McCullen, F. J. Morapatl^y on the buyers' part, dealer jockeying, large retail or¬
ders have come into-the market
rissey & Co., is in charge of res¬ to be paid Kuhn, Loeb & Co. for, By and large, the latter yearns for*
names,r besides ■ > Philadel¬ and taken a great many bonds. i
ervations.
About
400
are
ex¬ services is,/not-; excessive.". PayY other
Pennsylvania
Turnpike Com¬
ment of the fee had been pro-: phia's,
Allegheny's,
and Pitts¬
pected.
":'yY
Delaware
River
tested by a stockholder
of the; burgh's, and- when' new ones ap¬ mission, and
The Investment Traders

Bank and
Insurance Stocks
local

Inquiries invited on
securities

H. N. NASH & CO.
Philadelphia 2

Chestnut Street,

1421

Locust

York Phone

' New

Phone

Phila.

HAnover 2-2280

1477

Spring

annual

Teletype PH 257

„

,

they are generally well re-, Bridge bonds have advanced with
ceived.but the supply is woefully a meager amount of activity. As
small.
v.;:. Y-YYY'Y YYY Y.YY'YY hindsight is perfect, it seems
George H. Pabst Jr.,
doubtful, if the Bridge Commis¬
dent of the Pennsylvania RR., in >r> There seems to be some wid- <
sioners did so well on the 2.70%
defending the fee of $87,500 paid
ening in the field for premium i
rate.
A little waiting might have
to Kuhn, Loeb & Co., stated that
bonds.
One
thousand dollars
been
more
profitable.
In any
this was less expensive than com-;
invested
at
\lA%
brings in
case, now buyers are looking at
petitive bidding would have been.;
$12.50, no more and no less.
the yield to the call date, rather
Mr. Pabst stated that Kuhn, Loeb
Fourteen hundred dollars may than to maturity; and if present
& Co. did not fix the fee, but left;
bring in $40 or $45, and the
'conditions prevail, a call is in¬
this to the issuing concern.
The
difference of tangible cash is
evitable, >■.;;YY- Y'Y.Y-"j."Y.
.!',
information was submitted to the
something worth
while these
Pennsylvania RR. and by Senator.;

Philadelphia Bankers and
Bowling '..League
com¬

The

Amer. Insulator

& Co:

Lehigh Valley Transit 5s 1960
Southwest Pub. Serv. Com.
Citizens Utilities 3s 1955

W. H. Bell &

Col

•MconPoaArce

1500 Walnut St.,

Philadelphia 2
Phone

Teletype
PH

Pennypacker

16
N.

Y.

CA«al

Phone

8328
~

WASHINGTON

BOSTON

executive

4s & 4

loans

Federal Water and Gas'Common

213 So. Broad St.

Philadelphia 7, Fa.
Bell System Tel.

York Phone

New

WHitehall

PHLA 591

4-2300

this

the

about

-

underwriting
worried

seriously

of

problem

Priorities eliminated the

supply.
possibil-

(Continued on page 2259)

company ;

service,

$35,000,000

an

Passage Of Boren Bill

through
amount

League,

resolution urg^ing Congress to immediately act on the Boren Bill.
This is H. R%
1502, introduced on January 23, 1943, by Lyle H. Boren, Representa¬
tive in Congress from Oklahoma, which specifically aims to remove
dealings in State and municipal securities from the possibility of

of securities for sale

broker, the customary
commission
would
to
of 1%, or a total of
a

brokerage

regulatory
action by the SEC^
be subject to restriction or regu¬
under Section-15 (c) (1) of the
lation by any bureau of the Fedhad been sold, to an investment Securities and -Exchange Act of
eral
Government; and any re¬
1934.
The
bill
would
simply
house, With or without competi¬
striction or regulation by any bu¬
tive bidding, the spread to the amend this section by adding the
reau of the Federal
Government
investment
house
would
have words "exempted securities" do would interfere with the financing
been largely in excess of Vi of 1%. the clause which lists commercial
by States or political subdivisions
Moreover, if the notes had-been papers, bankers' ; acceptances and or instrumentalities thereof, and
sold at a public offerings-requir¬ commercial bills as excluded from
would materially increase the cost
ing registration yith' the Securi¬ the prohibition against., "the use of such financing;
'
manipulative,
deceptive
or
ties and
Exchange Commission, of
NOW, THEREFORE, BE IT RE¬
the preparation- of a registration other fraudulent devices; or con¬
SOLVED BY THE BOARD OF
statement " "and
prospectus, the trivances" in dealers' transactions.
OF
THE
KEN¬
In
addition, however, the • bill DIRECTORS
listing of the securities, etc., the
would eliminate from the above TUCKY MUNICIPAL LEAGUE:

$87,500.

"It is obvious that if these notes

W. Bothwell

.

President

as

of P.B.A.:

Y:.Y

.

'

According to Roy G. Bostwick,

GERSTLEY, SUNSTEIN & CO,

were

The Board of Directors of the Kentucky. Municipal
brokerage commission on sale of
securities.
If the company had1 meeting at-Lexington, Kentucky, on May 16, passed a

unnecessary

succeeded Charles

the

would be less than the customary

guarantees

and

to

should not offer, as
for

"but ac¬
tually contrary to sound finan¬
cial
p o 1 i c y,"
T. C. Swarts,
Woodlawn Trust Co., Aliquippa,
only

said: < "It
that. it
the minimum
amount that

Several years ago

houses

Mr. Pabst in his letter

seemed'

the

credit risks and will make Gov¬

hot

Delaware Pr. & Lt. Common, W. I.

the

Association,

nation's banks
are planning tremendous credit
pools to meet post-war financ¬
ing needs, which will provide
their
own
insurance
against
ernment

Yz& of 1988

of

manager

Bankers

American

stated ,that

Akron, Canton & Youngstown

;

Montgomery, Scott
"A," E. H. Rollins & Sons,
Butcher '& Sherrerd, Reynolds &
Co. and Montgomery; Scott & Co.
"B." Harry Strickler, Buckley
Brothers, was elected president of
the League for the 1944-45 sea¬
Commission- after the protagonists
days.
son.- ;''YYYY
Y'Y::-.::yYYY Yy;
of competitive bidding had com¬
The belated recognition of Phil¬
plained of the fee of the banking adelphia credit has made its bonds
At the closing session of the
house, and reached the Commis-r
a fairly; bright spot in an other¬
golden anniversary meeting of
sion close on the heels of that,
wise drab setting. Besides interthe Pennsylvania Bankers As¬
body's decision, May 10, requiringsociation,
held in Pittsburgh
competitive bidding for most rail
last week, Dr. I Harold Stonier,
security issues after June.'30.
Y

Hecker & Co.,

Pfd. Stks.

General Acceptance

pear

jVice-Presi-'

pleted its ,1943-44 season with a
banquet last week. " Teams fin¬
ished
in
the
following
order:

Autocar Com. & Pfd.

t Y

Shipstead of Minnesota.:

.

Brokers

Pittsburgh attorney, who is rep¬
resenting public security holders
of the Pittsburgh Railways Co.
system, the Philadelphia Company

.

is

approximately 30 days behind

schedule in collating data to form
the basis of tentative bids for pub¬

American Investment
Securities
Maine Co.
Bought — Sold

—

Quoted

licly held issues. The delay was
occasioned by the illness
of a
member
of
Philadelphia
Com¬

arid'

fees

pany's legal staff. In a letter, Mr.
Bostwick assures security holders
that Philadelphia Company is still
highly desirous of concluding ne¬

of

$40,000." Y

AND
1923

Established

gotiations.

Members

CO.

'

the

Philadelphia Stock Exchange
Land

Title

Building

PHILADELPHIA

10,

PA.

Telephone Rittenhouse 3940
Bell System Teletype

Lukens

PH 380

Co.,

property
Steel

Co.

cluded

since

the

1923.

Sale

Bethlehem

$1

the

,

stock

com¬

stock, announced that the

pire at 3 p.m. on June 12.
should be presented to

in¬

Scrip

building, the old charcoal boiler

r

the com¬

tube plant, Corey Field and ap¬

railroad

including

tracks

first quarter

and

estimated

storage yards.
Buffalo Creek C'l & Coke Co.

Kittanning Coal Co.
Logan County Coal Co.
Page Coal & Coke Co.
Pemberton Coal & Coke Co.

Stonega Coke & Coal Co.

after
The

Pennsylvania Co. has been
authorized by the Interstate' Com¬
merce
Commission to issue $35,-

—

SOLD

—

QUOTED

Established

1919

Lafayette Building
PHILADELPHIA 6, PA.
Lombard 6400

*

Teletype PH 240




for

the

of 1944 reported an
profit of $17,797

net

taxes,

depreciation,

amortization

tion

and

hold

equities.

of

deple¬
lease¬

The corresponding

figure in 1943 was $65,188.

■

The Rheem Manufacturing Co.,

redemp¬

maker of sheet steel products, has

funds

required

for

lic

companies

offering.

v

without pub¬
• Y
V •'*
.
.

large stock

,

sold to banks and the latter to in¬
surance

a

the Platt-Le Page

$15,000,000 series A and $20,000,000 25-year 3%%
sinking fund
notes, series B, the former to be

.

of the United
enact the
the aforesaid bill (H. R. 1502) in order
That the Congress

be

States

that

public

urged ' to

fraudulent."

-

■-

-

Hearings on these amendments
are scheduled to be held in Sep¬
tember. The full text of the reso¬
lution

as

and

the

financing

by

States

subdivisions

ambiguities of the
ute; and

BE"
that

IT

the

existing stats
"

FURTHER
Secretary

RESOLVED
of the Ken¬

passed by the Board of tucky Municipal League is hereby
Kentucky Muni¬ directed to send, immediately, a

Directors of the

copy
of this resolution to the
in¬ Representatives and Senators rep-;
troduced a bill in the Congress of resenting the State of Kentucky in
the United - States
(H. R. 1502) the Congress of the United States.
WILSON W. WYATT,
amending the Securities and Ex¬
President
change Act of 1934; and
>
WHEREAS, the purpose of said ATTEST:
bill is to eliminate ambiguities in CARL B. WACHS,
Executive Secretary
that Act and to .make clear the
intent of Congress to deny to the
Adopted May 16, 1944.
Securities and Exchange Commis¬
The action of the Kentucky Mu¬
sion the power to regulate secur¬
nicipal League in endorsing the
ities issued by States or political
subdivisions or instrumentalities Boren Bill follows similar action

cipal League is as follows:

WHEREAS, There has been

interest " in
Aircraft Co. of
Eddystone, Pa., and by arrange¬ of States and transactions in such of the Municipal Securities Com¬
ment with other large stockhold¬
securities; and
mittee of the Investment Bankers
ers is taking an active part in the
WHEREAS, public financing by Association, referred to in the
management
of
the
concern.
States or subdivisions or instru¬
Platt-Le Page has produced two
issue of the "Chronicle" of March
mentalities thereof are matters of
helicopters for the United States
purely State policy and should not 9, 1944, on page 996.
(Continued on page 2259)
bought

Aug. 1 of $44,779,000 of 4%%
bonds now outstanding.
The new notes are to consist of

tion

secured

WM. W. FOGARTY & CO

Corp.

Coal

000,000 of secured notes, proceeds
to be used to provide a part of
the

BOUGHT

Horn

Elk

proximately 1,523 acres of land

sentence

and instru¬
devices
or
contrivances as are mentalities thereof may be freed
manipulative, deceptive or- other¬ from the adverse effects of the
wise

pany's transfer office, 900 Sanr.
som Street, 'Philadelphia.

office

-

purposes of this sub-section, by
rules arid regulations, define such

prefer-,

and

the

section

Y
' "
v
^
"The Commission shall, for

Electric Co.,
holders of

dividend

mentioned

which reads:

"YYi-V'".

privilege of exchanging such •
scrip for whole shares will ex¬

of a Coatesville
formerly .owned and
by
the
Bethlehem

purchase

operated

for

common

mon

announces

to

notice

a

scrip
Steel

-

The Philadelphia
in

ence

KENNEDY

incidental

expenses

thereto would have been in excess

Volume 159

Number' 4286

THE COMMERCIAL & FINANCIAL CHRONICLE

2259

Pennsylvania Brevities
(Continued from page 2258)

Army and has orders for others,
which Rheem is helping to de¬
velop, it was learned.
As a part
of

voted

the

arrangements, Rheem is
to use .the patents and
designs of the helicopter company.
licensed

Once

;

t

by

standards

the

Federal

Commission,
the

have

have

will

$16,307,000 filed, and all of the

REVENUE BONDS

set

claims

favored

the

Power

&

Reed, Lear

Light

Members

Co.

has > declared a dividend of 20
cents
on
the common, payable

Rambo, Keen, Close

as

television station just as quickly
transmitter deliveries can be

pany's 1,162,600 shares of

made at the end of the war, it was

stock

This is

an

initial dividend

on

1518 Locust

com¬

Co.

&

Stock

Exchange

Kerner, Inc.

&

Street, Philadelphia

*

Private telephone wires to New York and Baltimore

common

presently outstanding.

Pittsburgh

Investment Securities

July 31 to stock of record July 1.

a

\

,

....

Delaware

NEW YORK CITY

•

plan, Mr. Lewis

his

plan.

major city in

States

the

and

in

unsecured

Communications

every

United

been

for

report; $15,520,000
of debentures out of a total of

said

DIRECT PRIVATE WIRE

STATE, MUNICIPAL

%

•

PITTSBURGH

This

predicted

May 26 by James H. stock was issued as a result of
Carmine, Vice-President in charge, merger and recapitalization of the
of

merchandising for Philco Corp.;

in

an

the

address

Poor

Club

the

at

provement Co.

Franklin Institute, Philadelphia.
1
It may be possible to produce
and sell table model television re¬
ceivers for
the

Mr.

war,

Larger
giving
inches,

little

as

was

Carmine

pro¬

ceedings to comply with require¬

said.

Philco

major

was

of

one

companies

in

the

was

re¬

development. It began
Work in this field in 1928, almost

recog¬

nized the fact that recapitalization
of the
company on Oct.

simultaneously with its entry into
radio.
"■
v;vY!.,!.
--<

Since 1928 Philco has spent sev¬
eral million dollars in television
and

development,

Carmine said.

Mr.

With many of the

outstanding research and develop¬
ment engineers in the
country on
its staff, Philco has pioneered in
a

large number of the major de¬
velopments in television. /

Among the major Philco devel¬
opments demonstrated to the Poor
Richard Club was the "Plane-O-

Scope,"

a

kind

tube with

a

also

invention

"ion-trap" which
blemish

from

as

of

screen

The

Autocar

Co.

announced

crued

the

pany

dividends

a

in

convertible

com¬

Trucks, Inc.

into

Co.

s

10

shares

of

stock;

common

through June 16.

'

of

taxes.

This

with

compares

a

profit of $415,864, or 64 cents per
common
share, for the similar
quarter

in

1943,

$1,175,000
taies.

after allowing
Federal
income
1'v.'YY!/;:Y.'v!

for

The directors of The Bald¬
win Locomotive Works, at their
;

meeting held May 25, declared
dividend

a

share

on

of

75

cents

per

the $13 par value com¬

mon stock, payable June 30 to
shareholders of record June 15.

This is at the

June

on

30

and

rate

Dec.

as

paid

20,

last

A

successful

offering

of

two

issues of debentures for the Fed¬
eral
was

International

Credit

Banks

concluded May 16 by Charles

Dunn, New York fiscal agent
The financing con¬
sisted of $14,900,000 0.80% con¬

and

its

four

Reading

by the comoany
major bondholders

Of the proceeds,
used to retire a

par.

$32,875,000

was

like

amount
of debentures
due
June 1,1944, the balance, $605,000*
being new money as of June 1,

1944, the total amount of deben¬
tures outstanding was
$285,040,000.

Delaware Power & Light Com¬
mon

at

offers

an

the present

attractive situation

time

of

the

Philadelphia

New

final vote,

orandum

a

and

Stock

Exchanges.
interesting mem¬

firm upon request.,,

of

York

this
may

be

had

from

the

,

_

Also available for the
asking is
list of corporate bonds regarded

issues

quite

session

of

act

an

of

super¬

The

**'

I

is

matter.

of supply in the
decidedly different
When
Germany
is
a

tion
than

by
the

Congress, showed
legally required

more

two-

thirds in favor of the plan.

This
was

Outstanding
refunding
bonds
amount to $24,411,866; debentures
total $29,148,000, in addition to

"Thomas

Morgan

W.

&

Lamont

Co.

Chairman

the

of

acted

as

that

\yhich there

unsecured claims

of $787,116.
of $19,367,700 refunding

against the
Out

are

Co., 25 Broad Street,

New York.

Copies of this inter¬

esting study

may

company

be had from the

come

Memorandum

the

bonds

increase to

could
some

BOENNING & CO.
1606 Walnut

probably

Pennypacker 8200

-

will

be

aifif

but

•

.

•* 1

welcomed

bankers

radical

no

orderly

and

$16,475,100




firm

upon

request.

PH 30
to

N.*Y. C. *

COrtlandt 7-1202

that

will

by investors and

together.

Pennsylvania
and New

Jersey

Municipal Bonds

as

in

arranged

$45,000,000

1922,
from

to

the

still

by Edward L. Burton & Company,

fiscal agent

agreement
had received
;

Mexican

the

mittee
sisted

was

dis¬

bondholders

ex¬

These funds

deposit here. : The

on

thus

the

has

of

the

160 South Main Street,

City, Utah.

Bell System

Teletype—PH 299

Salt Lake

L.

may

be

had from

&

Company

Burton

Distributors

request.

upon

are

ALLAN N. YOUNG & CO.

re¬

Mexican

the funds.

Lewis Tower Building
PHILADELPHIA, PA.

LEGAL

Government to obtain control of

"The action

>

New York-—HAnover 2-9369

Copies of these inter¬

esting studies
Edward

■

Philadelphia—Pennypacker 4640

Sugar

com¬

successfully

effort

Amalgamated

connection

bond¬

Telephones:

Sugar Stocks Attractive

Government.

Government, all of which
tributed

as

Mexico,

on

in

deposit

a

PHILADELPHIA 9

P.'

committee

a

Mexican'

committee,

Dolphin & Co.
Fidelity Philadelphia Trust Building

52

concerns

the claims

INVESTMENTS

200,000

individual

A List of

Wall

Street

NEW YORK CITY
Private Phone to New York Office
HAnover 2-4960

of

than

more

holders

of

Mexican

railway bonds.
Lamont's

Government

In upholding Mr.

claim

valid,

as

it also

CORPORATE BONDS
So Regarded in Pennsylvania

Primary Markets in all

Available Upon Request

philadelphia

supported the findings of Charles

Poletti,

official

referee,

which

confirmed by

were

nan

faults

effort

on

to

Supreme

clear

Mexican

up

de¬

bonds,

ternational
an

Committee

agreement

as

entered

of Nov.

5,
on

the basis! of .about. 20 cents to the
some

Members New

classifications

York

and

and

philadelphia

Philadelphia

transportation co.

Stock Exchanges'

the

1942, providing for settlements

dollar ,on

bank stocks

NEWBURGER &HAN0
N.

Y. Curb

Exchange (Associate)

1419 Walnut Street
LOCust 6200

securities

(2)

Race 7951

New York

Harrisburg

^Lebanon

Baltimore

Atlantic City

Scranton

F. J. MORRISSEY & CO.
1510

securities, and

more

on

others.

Chestnut

Rittenhouse

Street, Philadelphia 2
8500

PH

279

New York Phone—WHitehall 4-1234

of
.

bonds filed to vote,

St., Philadelphia 3

Private Phone

•;

healthy readjustment
be

Request

very

that
they would be more
attractive 1 to ifivOstors. * There

change

on

degree

so

Company
and Utah-Idaho Sugar Company
offer attractive possibilities, ac¬
cording to detailed financial an¬
alyses of the situations prepared

his

holders and not

with

J.

International

trustee for the

a

the

of

Incorporated,

into

Simons,

&

to

reasons

*

cial circular prepared by.

Linburn

time

some

$7,000,000 to holders of defaulted Mexican bonds.
reported in the New York "Times" of May 27, iri which it

was

Mexican Government and the In¬

detailed

& GAS
Common Stock

be

municipal and quasi-

on

easily

will, probably

obvious

further stated:

study of Fashion
Park, Inc., is contained in a spe¬

A

FEDERAL WATER

even

tribution of about

"I

Fashion Park Attractive

REctor 2-0040

utilities

Appellate Division of the State Supreme Court unanimously
on May 26 a decision of the
Supreme Court of New York
dismissing a claim by the Mexican Government involving the dis¬

Court Justice Ferdinand Pecora.

••

an

of

The

later

,

be

N. Y. Phone

375

affirmed

legal investments in the State
.

PH

Supreme Court Dismisses Giaien By Mexico
Aneni Distribution Of $7,BOO,OSS To Creditors

Pennsylvania.

year

Packard Bldg., Philadelphia 2
Teletype

K- V-

of

a

will

municipal

!

question

future

Members Philadelphia Stock
Exchange

In addition,; there

for

very

yields

Utilities

1

successors.

Samuel K. Phillips 8 Co.

oc¬

termination

conversion

bonds

steady

a^ well

his

Stetson Pfd.

While the market in Govern¬

for

they insist that the project ben¬
efit the present taxpayer
as

gainfully

the

from private to public ownership.

Au¬

as

than

greater

The

by

more

nicipalities.;
undoubtedly

This probably accounts for the lack, as no doubt

*

soldier

between

military career and his ab¬
sorption into our general indus¬
trial life.
Industry must have a
breathing spell to reequip and re¬
tool for peacetime articles, and
this period can be and should be
taken care of by the various mu¬

Legislature

Public

B.

Scranton Springbrook Wtr. Pfd.

of his

ment

putting all

the

cupied

/

thority bonds under the
vision

discharged

been

while.

a

the

John

least of which will be to keep the

in the off¬

the uncertainty of the outcome .of
tax legislation under considera¬

delayed for

ws

the money to purchase
them for various purposes, not the

have

some are

new

passed

quite

was

time, but although

a

cept $7,000,000.

eree,
reported in Upited
District Court May 22.
a

for

no

last

placed at

Copies

Mr. Lewis said that

issues

new revenue

offered for

The

committees June 1, 1942, Howard
Benton Lewis, bankruptcy ref¬

States

en¬

borrowings
period.

new

war

apparently

for

members

&

in

Pennsylvania, the amount

brisk

tures dated June 1, 1944, and due
March 1, 1945.
The issues were

mitted

jointly

In

for !..the

compensate

Committee of Bankers

Coal & Iron Co. have accepted the
amended reorganization plan sub¬

Philadelphia

million

contended

majority of the refunding

the

revenue

1944, due Dec. 1, 1944, and $17,975,000 0.90% consolidated deben¬

according to
a detailed memorandum
prepared
by Nemburger & Hano, 1419 Wal¬
nut
Street,
Philadelphia,
Pa.,

of

new

many

solidated debentures dated June 1,

Utility Stock Looks Good

first mortgage holders and deben¬
ture owners and general creditors

and

many

All of which has served to

during the

R.

for the banks.

v-/.

year,,

The

same

FIC Banks Place Debs.

of

stock, after charges
$1,400,000 for Federal income

good

a

great

a

largely

connection

plan to merge the

and Autocar

Autocar

'fy.i

common

to

dollars

projects

,

with

each share of preferred stock is

on

so.

Government issues

in

amounted

million

May 26 that it will call all out¬
standing
preferred
fstock 'on >
July 1 at $115 a share plus/ac¬

the

a
profit
84 cents per share

stayed

Commission.

According to the announcement,

reported

or

has

....

a

The Island Creek Coal Co. for
the first three months of the cur¬
year

investment

as

■

have

answer, of course, was that
strength of the market made
refunding
possible
on
a
large
scale; institutional selling for re¬

to the
dates and amounts of future divi¬
dends."
<V ' i;'
•'.< v.,>
y-

the ion

removes

would

the

ing,

:

some

The

directors,
deciding upon this initial divi¬
dend, pursued a policy which in
their judgment will assure as far

■»

$534,900,

rials and

same po¬

the

explained

picture tube. "*v

rent

market

of

known

the

industry shoul(| be definitely al¬
leviated. Municipalities who have
been holding off will want mate¬

in

regularity

Philadelphia 5.8-1960

Rittenhouse Plaza Stock

military

demands for the products of heavy

forced ' lull

possible

knocked out of the war,

cases,

the accounts of the
company and
its subsidiaries of. all
surplus bal¬

as

in

even

already started, had to be
held in abeyance.
The outlook
looked
bleak, and in a falling

work

of

.

Carmine

getting materials for fu¬

ture work and

sition in respect to earned
surplus
as a
company starting its business
new on that date.
The

acteristic of all older-type bulbous
tubes, and eliminates light reflec¬
tions.
Mr.

of

15, 1943,
resulting in the elimination from

ances,^placed it in the

face, which allows the television
picture to be viewed from any
angle, avoids the distortion'char¬

Philco

ities

more.

picture
completely flat sur¬

new

„

this dividend the directors
recogJ
nized not only the uncertainties of
the immediate future inherent in
the present war
economy and its
related taxation, but also

search and

research

Utility Holding
This' distribution

completed May 18, 1944. The
states:
"In . declaring

company

first

States to undertake television

Public

Company Act.

United

the

of

ments

"projection-type"

sets,
a picture 24 inches by 18
may cost up to $400, he
indicated.
•
"
.:

subsequently distributed by

Hotel

(Continued from page 2258)

A large part of it

that company direct to its stock¬
holders as one step in UGI's

$125 after

as

Pennsylvania Municipals

company on Oct. 15, 1942, to its
sole stockholder, United Gas Im¬

television before

on

Richard

..

Boston

Phone—Enterprise 2050

'

'

Bought'—-Sold

ANALYZED

—

Quoted

REVIEWED

-

Royal Bank of Scotland

Stocks

Insurance & Bank

COMPARED

Inquiries invited.

OF

210
'

CO.
Angeles

West 7th St., Los
PRIVATE WIRES

New York

Chicago

•

TELETYPE

L.

-

San Francisco

A. 279

Seattle

-

currency. In peaceful and
orderly timesv it is different, i 74 •
Consider the United S t ate s .
paper

Stocks

Bank and Insurance

r

'Stocks

This Week—Bank

-

V;;::777774

A- ;T4'7
%7:774;

VAN DEUSEN

ByE-

gold coin was still freely
obtainable here, most people pre¬
When

to

ferred

use

with

period New York City bank stocks, as meas¬

Over the same

3.7%.

the other hand,
points or 6.4%.

Standard & Poor's Weekly index, have, on
moved up from 95.3 to, 101.4, an appreciation of 6.1
The percent divergence between s>
these two classes of stocks is also
ured by

quite pronounced when their cur¬
rent prices are measured against
the April, 1942, lows, as the fol¬
lowing
figures indicate:
The
Dow-Jones Industrial Average on

and, as be¬
and silver

gold-and-silver-mining

be

south of the border—they do

not

bimetallism,; and ..have

re¬

want

.

HEAD

.

side

of,

since

say,

part or

Bishopsgate, E. C, 2

:

49 Charing Cross, S. W. I
:

Burlington Gardens, W, I

64 New Bond Street, IV. I •/

.,

-U c V

:

'

'

-I,,

YC TOTAL ASSETS
£115,681,681

Y

•

:

be
Y

:

;

Associated Banks:

; ;

Deacon's

William a

country, out¬

Bank,

Ltd.

Giyn Mills & Co.

Arabia, and
most of the money
be

L

,r

Saudi

therefore

must

used

any

3

S..8 West Smithfield, E. C /

enough "hard money" on hand to
effect more than a. fraction of. the
transactions, of

LONDON OFFICES i

:

■

paper

is

accepted

BAnFoF

in this country,-

severe

gold con¬

of the currency was
In part that run reflected

ended.

anticipation of official suspension
of the gold standard as an; .eco¬
nomic fillip, rather than a desire
to have and cherish gold per se.
The traditional respect for gold,

Trust Company

Branches, throughput Scotland

r

jected it again and again.
Marty countries, indeed, are

check-book money?
Since
there
cannever

OFFICE—-Edinburgh

our

neighbor

still - today
Australia and New Zealand
on trust in the issuing power, this
preferred,* w h i 1 e - silver-dollar
coins are rejected: When, in 1933, plausible talk about "hard money"
addressed to modern people has a
Y
the run on gold and flight of cap¬
distinct counterfeit ring.;
i:-./,
ital to foreign countries became
NEW SOUTH WALES
certificates,

vertibility

New York

April 28, 1942, was 92.92, thus its
present gain from that level is
47.56 points or 51.1%.
Standard
& Poor's Weekly bank, stock in¬

paper;

dollars

tween-silver

Industrial Average has been in a secondary de¬
since July 14, 1943, on which date it stood at 145.82, compared
140.48 on May 24, 1944. This represents a loss of 5.34 points or

The Dow-Jones

cline

should

it

tries—unless

coun¬

,

'7'1YY;

L. A. 280

-

occidental

other

eral points, this one .seems to bfe practically devoid of both -gold
and silver for international trad
the easiest to agree with. Yet it
needs careful examination when ing purposes, and for this, reason
alone are not candidates for bi
it is used as an argument for; bi¬
metallism. Where, indeed, is;there
metallism.
In
times
of severe
a country that, does not want vtq
stress, certainly, people anywhere
have more faith in metal than in manage its own money, including

'

'.V.'

his

(1) Preference
for "hard
money,"—Of Mr. Brownell's sev¬

^ 7'7

CALIFORNIA

on

pamphlet, International Bimetal¬
lism, which was the basis of his
press release of Sept. 27, 1943, ,,

Orders solicited.

BUTLER-HUFF
..■v

and

committee;

the

of

Service to Dealers & Brokers
to, to 5 p. m. (P. C. T.)

for

As

members

which he distributed to

Special Bulletin and Booklet
Trading daily 7 a.

Incorporated by Royal Charter 1727

(Continued from page 2250)

1

-

Thursday, June 1, 1944

FINANCIAL CHRONICLE

THE COMMERCIAL &

2260

premia at
which bullion has sold in the East,
As

for

cited

by

the

wartime

Brownell,

Mr.

premia are in terms of
currencies : artificially pegged at
The

out.

£8,780,000

:

Reserve

Fund

Reserve

Liability of Prop.., 8,780,000 ;

\

high "official" rates of exchange.
There, are no free international
movements of bullion and the

is so ingrained that
many Americans
still are com¬ prices Mr. Brownell cites reflect
local situations.
It may not be
Bulletin on request
forted to know that the Treasury
without significance that during
holds the yellow metal, even
World War I the price of silver
dex on April 29, 1942, was 59.3,
though citizens cannot get any of
soared when demand in India and
and its gain from that level is
it. But for everyday business Use
Laird, Bisseli &
China
increased,, but after the
Members New York Stock Exchanre
42.1 points or 71.0%.
Americans distinctly prefer papers
war
collapsed, notwithstanding
120 BROADWAY, NEW YORK 5, N. Y.
;
In
order
for the Dow-Jones
currency and bank checks rather
the subsidy which American Pittindustrials
to reach
their 1937
Telephone: BArclay 7-8500
than hard money, as the Treas¬
man
Act purchases gave to the
Bell Teletype—NY 1-1248-49 ■
high of 194.40, they must advance
ury's hoard of $1,500,000,000 in
silver sellers until 1923.
:
:
: :
L. A. Gibbs, Manager Trading Department)
53.92 points or 38.4% from their
silver in reserve against outstand¬
Mr. Brownell, like other silver
present position. In order for New
ing silver certificates proves.
' *
advocates, makes frequent use of
York City bank stocks to reach
At the other extreme from the
their 1937 high, they
must ad¬ appreciation to the 1937 level is American attitude toward hard the term "silver-using countries,"
52.4%
against 38.4%, or 36.5%
and since that has a direct bear¬
vance
53.1
points to
154.5 or
money are those peoples abroad
better.477;
7-777
ing on the question of a prefer¬
52.4%.
Thus despite the latter's
Turning now to individual bank who know from sad experience ence for hard money, we may
71.0% advance from the 1942 low
the losses that may come from
stocks,
the
following
table
should
take a few moments to examine it,
as compared with 51.1%' for the
paper currencies and who there¬
be of interest:
;
Pr o b a b 1 y
no
country is a
industrials, their potential percent
fore prefer coin for their daily
Appreciation to
Asked Price
greater silver-using country than
Asked Price
use
or
for
hoarding.
In
such
Reach 1937 high
Feb. 1937 (high)
5-24-44
the United States, with millions of
78.5%
countries, therefore, it is correct dollars in subsidiary silver coin
v.";.; $41% ■ :
$23
Bank of Manhattan..,
;
35.8
-"550 —
405
to say that the masses prefer hard
Bank of New York,__,„_——
65.6
in circulation and tons of other
86%
>, 521/*.;
Bankers Trust
4-—
money and, as Mr. Brownell cor¬
48.0
153%
silver in the Treasury vaults.
In
103%
Central Hanover
4-,-—_v—■:7'-. v'7 61.7
65%
rectly states, the particular hard
•40%
Chase National
peacetime every modern .country
<7'7i; :; 66.6
86
7'
51%
money usually., sought is the
'Chemical B. &
uses
much silver in its coinage
53.0
77% ; •
so y2
Corn Exchange B. T
cheapest one, silver.
68.3
2,710
system. The United Kingdom is a
1,610
;
First National
19.4
7', 394
From the facts that gold is still,
330
great
silver-using
country. In
Guaranty Trust
.31.7-.,—.
.20%
•
1534
highly esteemed in the Occident modern coinage systems, silver
Irving Trust
37.2
51%
•y,,:7:'7 7 71
777 7;
Manufacturers Trust
for monetary reserves if not al¬ coins of varying fineness are used
61
y
V '
66.8
%
•t
367/s
National City
.73.5 7v7:
164 \ 7
7 /
94%
ways for coin and that silver is in without regard to the fluctuating
New York Trust
46.4
7
7
58
39%
demand among the masses of con¬ value of their silver content, pro¬
Public National
44.3
2,150
1,490
;
U. S. Trust—4——
tinental Asia we are told, in ef¬ vided only the market price of
however,

Capital

Paid-Up

Two facts stand

could be written.

1817)

(ESTABLISHED

much

'V

'

6,150,000

•

?,

;

4.

30th
£187,413,762

Aggregate
Assets
Sept., 1943 j;

DAVIDSON,
General Manager

George Street, SYDNEY ?

Office:

Head

;

K.B.E.,

ALFRED

SIR

■

£23,710,000 7

.

.

The Bank of New South Wales is the oldest

Meeds

and

largest bank in Australasia.

800

branches

in

all

Zealand, - the Pacific
London, it offers the most

and

complete

and

and

traders

countries.

,

E. C.

Street,

Berkeley Square, W. 1

47

arrangements with Bank*

Agency

throughout

.

7.;

LONDON OFFICES:

■

Threadneedle

29

"

in

Islands,

banking
service
to
investors,
travellers interested in thes«
7 / ■ 7/4

efficient

i

With over

of Australia,

States

New

the

U,

S.

A.

;4

NATIONAL BANK

1

,

Commercial

-

,

Office

Cairo

Register

No.

I

Cairo

—

--

-

of EGYPT
Head

:

—

FULLY PAID

CAPITAL

FUND

RESERVE

...

£3,000,000

.

£3,000,000

.

.

.

AGENCY

LONDON

4.—

and 7 King William Street,

6

E. C,

-

.....

•

——

all

the

Branches

in

principal

Towns

EGYPT and

in

the SUDAN

--

In addition to these
operating profits, very
and
Government
securities
of substantial security profits have
been realized and also recoveries
these 15 banks aggregated as fol¬
on items previously written down.
lows:
Deposits,
$11,655,352,000;
It is also of significance that their
earning
assets, $9,359,592,000;
Governments, $4,058,587,000. Cur¬ capital funds have expanded from
rently, with the market for their $1,434,355,000 to $1,643,831,000,, a
shares 34.5% lower, their aggre¬ growth of $209,476,000 or 14.6%.

the 1937 highs,
deposits, earning assets

At the time of

the

total

gate figures are as follows: De¬
posits, $21,818,561,000; earning as¬
sets, $18,670,596,000; Governments,

From

$13,381,989,000.
it will be

ures

these fig¬

observed that de¬

posits are 87.2% higher, earning
assets 99.5% higher and Govern¬
ment securities 229.7% higher.
assets have been
also have the net

While earning

moving up,

so

operating profits of these
despite rising costs and
taxes. In 1938

ating

profits

while

in

954,247,

aggregate net oper¬

1943

an

banks,
higher

were

they

$82,474,086,
were

$110,-

increase of $28,480,161

New

Jersey

34.7%.

or

regular

On

average

31,

being 1.04.

1944,

First Na¬

tional sells at the highest

premium

1.29, and Irving
at the maximum discount with a
ratio of 0.74.
Four other stocks
with

are

ratio

of

at a discount, viz.:
0.98; National City,

also selling

S.

U.

a

Trust,

Established

2, N. J.

MArket 3-3430

N. Y. Phone—REctor 2-4383




international bimetal¬
provide a bridge for

trade between West

bimetallism
the

to

do

and East. For
this, however,

people of the East should be
to;, part with their silver
those of the West should be

silver is

not

so

the coins to the

"silver

by

does
or

high as to drive
melting pot. But,

stocks, this appears to be a very

yield,

the favorable

is

especially when

post-war outlook for

also taken into

con¬

With Kingsbury & Alvis
NEW

ORLEANS,

LA.

Henry Cotten is acting

Mississippi
for

sales

—

as

Lee

South

representative

Kingsbury & Alvis, Hibernia

Building.

NATIONAL BANK

using," Mr. Brownell

not mean

the United States

of INDIA, LIMITED

He means
China, India,
We may in passing

the United Kingdom.

willing

such

and

and

countries
Mexico.

Bankers

as

from the record that China gave up the
payment of trade obliga¬ silver standard a decade ago, In¬
tions; and conversely the East dia in 1893, and Mexico in 1905.
should be willing to take gold
Mr. Brownell states that China
from the West. It is not enough to "still uses silver predominantly."
pass a law on the subject.
Unless None of the news from China in
the people are willing and inter¬ recent years substantiates that
ested, it won't work.
Moreover, statement. China, unfortunately,
there must exist in the countries is
suffering from paper-money
of the world adequate supplies of
depreciation. The severe inflation
silver," adequately dis¬
tributed in amounts and places
where they may be needed. .Mr.
and

gold

lets

the

reader

is

depriving China's pa¬
of all value. What¬
may conclude from that

Brownell

vail.

!

to

Government

the

and

Colony

Kenya

Office:

Head

willing to,,receive silver
East in

in

Uganda

Bishopsgate,
London, E. C.

'

'

26,

in India, Burma, Ceylon, Kenya
Colony and Aden and Zanzibar

Branches
•i.

•

Subscribed Capital,,
.

Paid-Up
Reserve

The

Bank

Capital

-£2,200,000

conducts

banking

and

Trusteeships

£4,000,000

£2,000,000

Fundevery

description

of

exchange business

and

Executorships

also undertaken

rapidly

per currency
ever

one

does not prove

1891

18 Clinton St., Newark

will

3.8%, and ranges from
2.7% for Bankers Trust and Na¬
tional City to 4.8% for Corn Ex¬
change and 5.0% for First Na¬
tional.
In view of the generally
conservative investment character
of choice New York City bank
averages

banking

Rippel & Co.

'

fact, I have seen no evidence that
that these conditions will prevail the
Chungking Government in¬
if bimetallism is enacted, but he tends ever to
return to a silver

sideration.

J. S.

lism

0.96; Bank of Manhattan, 0.92 and
Public National, 0.81.
The
current
dividend
yield

attractive

Bank Stocks

these 15 stocks are

selling
at
approximately book
value, the average ratio of cur¬
rent market to book as of March

that

fect,

Louisville Bond Club

assume

that they will pre¬ standard. All the evidence rather
Y
V'v
indicates its intention to manage

Annual Outing June 9
LOUISVILLE, KY.—The Louis¬
hold its an¬

ville Bond Club will

nual Summer outing and election

after the war,
of officers on ; June 9th at the
for ill.
Louisville Country Club.
Out of
the Treasury is surplus and that
Representative of the viewpoint
■
of educated Chinese, Dr. Henry C. town guests are welcome.
no more is needed or wanted. We
N. Allan Watts of W. L. Lyons
might sell it to the Orient, except Chen of the Bank of China in the
for the restrictions which the sil¬ course of a long article on the Co. is President of the Club.
ver bloc has put in the law.
Our post-war stabilization of China's
gold stock far exceeds our need currency nowhere even mentions
Interesting Situations
for a settler of balances. In terms silver.* Dr. Chen merely suggests
The
first
National
Bank
of
of hard nioney, Uncle Sam is a that China start out afresh with
Boston and Providence WashingCroesus. Mr. Brownell argues, in "a new currency or new unit of
ton Insurance Company offer at¬
spots, that gold is unsuited to the accqunt." He adds that "the eco¬ tractive
possibilities according to
needs of Asia. If this is true, then nomic ills of the world cannot be
summaries of these situations pre¬
a basis for workable "international l laid
entirely at the door of the
pared by Butler-Huff & Co. of
bimetallism as between ourselves1 monetary system" and that
"it
California,
210
West
Seventh
and Asia is lacking: for how can
1 Henry C. Chen, The Prospect for the
Street,
Los
Angeles,
Califor¬
we
use
our
gold tp IbuyJ goods Stabilization of the Chinese Dollar, in The
nia.
Copies of these summaries
from the Orient, if gold is not Commercial and Financial Chronicle, Dec.
may be had upon request from the
suitable
to
the
Orient, as Mr. 16. 1943.
firm.
Brownell states?
(Continued on page 2266)

Speaking for this country, it is
that the silver already in

clear

China's

economy

for good or

;

Volume

159

'

Number 4286

THE COMMERCIAL & FINANCIAL

CHRONICLE

2261

wmmm

|g, W CHa$f W^ATlSj

'iVAV^IVW\

In the port

of Balboa

the Pacific terminus of the

at

functions of this Chase
outpost.

most

Since Pearl Harbor the tasks of

important single military installation in the Western Hemi¬

sphere—the Panama Canal—stands
bank

which

is

bringing

a

branch of

touch of home to

a

Thousands of members of the reinforced gar-

Atlantic and the Pacific have

come to

rely

on

an

of the branch is

American
at

men

preparing cash

war.

>

this

now

pay

those

a

and

out

its

daily

stream

contractors on war

gifts

have

in

doors, cashing checks, transmitting

to

loved

ones on

PANAMA

fleets,

Chase branches

are

in addition




to

the regular wartime

Panama

two

THE

i
.i.

who

the Atlantic side.

man

.;WOV/j 3

j

'i'Ol

'

I

T

OF

NEW

YORK

bfojj 'li.

~u.

.jnehO

which

great

ago

could scarcely

modern fortress guard¬

between

two

coasts, two

part

in furthering this military

making life

more

pleasant for those

the Pacific side;

on
on

on a scene

wars! The Chase feels privileged to

effort and in

the Isthmus—Balboa

Cristobal and Colon

"'id

OF

on

City

few decades

passageway

play its small
Comparable activities obtain in all four
and

profit,

a

imagined—a

ing the

Main Street, U. S. A.

personal services, performed without

projects and facili¬

struggled with the torrid jungles of

the Isthmus

CITY

These

as

serving

Today's Panama looks down

funds, arranging for the delivery of flowers and
other

military activities such

Exchanges, caring for Company Funds,

those who

commercial bank.

Soldiers and sailors of all ranks

to

tating vital shipping through the Canal.

personal services beyond

normally rendered by

directly

rolls for the Army, meeting the banking needs

of Post

office—one of the four Isthmian branches of the
Chase—for countless

related

-sit

■

'

the

new

ramparts

of

an

old land.

Post-War Problems—Can They Be
Solved Only By One?

Mutual Funds
Income

vs.

Thursday, June 1, 1944

CHRONICLE

THE COMMERCIAL & FINANCIAL

2262

Capital Gains

published a new folder on Low Priced
(Continued from first page)
Shares, a class of Group Securities, Inc. The folder contains a chart
plicated that the able report of version;, problems and cost-price
showing the present market position of the 55 stocks held by Low Messrs. Baruch and Hancock, only adjustments. In fact, jobs depend
Priced Shares as compared with that of several higher priced shares
upon bringing about a balance be¬
Distributors

Group has

DuPont,

Standard Oil of New Jersey,
Business Machines.
covering letter point out®

including

Motors,

General

Eastman Kodak and International
The
that:

risk

Shares

Low Priced

in

of war surpluses; the
resumption of peace time produc¬
tion;
providing
for the,, many
needs of the returning soldiers,

STEEL

favorably witn
high-priced stocks.
(2) On the up-side the appreciation possibilities in Low
compares
that of

Shares

Priced

]

V

.

three

over

;

A Class of Group Securities, Inc.

in the

Prospectus

the fol¬

The letter then makes

DISTRIBUTORS

lowing point:

{"Under present tax laws, the
pays at least twice as

investor

amount
of dividends
as he does on the
same amount of long-term capi¬
tal gains. And if he has a large
income the tax savings on capi¬

63 wall street—new

With

"It

gains worth so
dividends under

capital

present tax laws, the attractive¬
of
securities with largerappreciation possi¬
bilities is greatly enhanced.

ness

than-average

comparing interest coverage and
bond prices over the past seven
years on the issues included in
the four Keystone Bond Funds.
The chart shows that all classes

enjoying / interest
coverage of from 2.17 to 3.81 times
—the highest in years.
It is also pointed out that a
large majority of the companies in
all
classes
have
(1)
reduced
currently

and

.

and' fixed

debt

charges

'(2) 'substantially improved
working capital position.

"Despite these improvements

position

fundamental

in

interest

generous

three

of

bonds

are

vestors

and

coverage,

from

discounts

par

7% to 32%."

current

The

issue, of

in which Merrill
man

of

Brevits

"A Statement of Policy"
the

Griswold, Chair¬

Board of Trustees of

a

In¬

very

high percentage of the assets of
the Trust in high-grade common
stocks of the type which would be
considered as suitable investments
and

managed by individual

corporate
the

what

Trust

trustees.
That is
offers its share¬

predomi¬

Participation

holders:

nantly in sound companies whose

ithe high qualities

shares possess

investments."

of trustee

points out that

Mr. Griswold

produce the

this policy will not

capital appreciation in times of
good business that is generally
available in the more specula¬
hand,
be

periods

in

business

to

"On

securities.

tive

of

or

the

other

declining

of

depression, it is

expected' that the shares

of Massachusetts Investors Trust
will

show

to

ance

lower

far

a

Mr.

dividend

Securities

National

total

reports

Corp.,

National

of

Jr.,

Simonson,

Securities

Series

at $9,802,026 on April 30,
1944, the fiscal year-end, com¬
pared with $5,012,896 a year ago,

increase of 96%.

an

manufacturers have made it clear

in busi¬
present costs unless prices

that they cannot continue
at

ness

are

increased

large industries: as
Steel Corpora¬

duced.. Such

States

the United
tion

last

costs greatly re¬

or

year

had

Substantial

a

decline in net earnings,
a

in spite of

large increase in the volume of
As a result,-this cor¬

business.

lions

and, unfortunately, was un¬
able to set aside any satisfactory

Republic
Investors
:A

Fund, Inc.

taxes

the

will

and

down

come

prices of imported raw materials

down, or will the prices of
products have to be in¬
creased to bring about the neces-

come

_

o

point." The subject of the article is
"New Drugs," and the conclusion
states that: "Following a period
of readjustment, as inflated war¬
time demands are replaced by ex¬
panded civilian consumption and
the exploitation of new markets,

newcomers

in

are

drug

prospect

manufacturing

earn¬

leading
concerns."
for

W. R. BULL MANAGEMENT CO. Inc.
40

Exchange Place,

tin

contains

showing

an

interesting * chart

Keystone

of

-

the

in

Trust Funds

series

follows:

.

NATIONAL
Securities Seines

V

.

r

.LjiS

*

*

*

:

Co.—A

&

S-l, 2, 3, 4 in Common Stocks
Prospectus
your

may

National Securities &

be obtained from

local investment dealer

or

Research Corporation
ISO
LOS

BROADWAY,
ANGELES,

BOSTON,

634

£0 CONGRESS STREET,

BOSTON, MASS.




S.

YORK,

Spring St.,

10 Post Office Square

CHICAGO, 208 So.

The Keystone Corp. of Boston

NEW

La Salle St.

(5)
(14)
(9)
(4)

new

folder, "The Automobile ^Inves¬
tor," to be available soon? ; jv;
Lord, Abbott & Co.—The current

and

costs

between

balance

-

prices. - This is the hard way and
the; uncomfortable way to solve
this problem. Is it the only way?

World/prices dominate ' domestic
prices. It is not possible for us to
hold the prices yof products of
which we have a surplus above
prices in world markets., Of
we can hold the prices up
for domestic consumers and sub¬
the

course

but this

and it

unsound

taxpayers'
enough
without much of this sort of thing,

would

would

the

large

be

prices rise or decline

world

Will

that

seem

burden

For a short
due to scar¬

in the post-war era?
time they may rise,

city in certain areas, but if past
history is. any guide, the trend of
world prices Twill be .downward.

coursej, world prices may be

■

indicate that our fed-;

sources

era! debts at the end of this
will

be

about

eral ; debts,

World

of

end

the

at

war

of the fed¬

1000%

farmers

la¬

and

of

issue

"These

,

t

The cost of servic¬

interrelations.

ing the debt alone may be almost
as. much
as
the national budget
and total tax collections in an av¬

Things

With

in

crease

1000%

an-almost

revised

bocker Distributors. Inc.—A prQSnectus

on

'

the

Fund revised to

Knickerbocker

April 1, 1944.

needs will be about $20 bil¬

lion

a

In order

year.

to

collect

this amount of taxes it is claimed
thatvwe need

national in¬
come of at least $125 to $150 bil¬
lion a year.
How can such na¬
a

income

tional

gross

be maintained?

fail in this matter, we

we

collecting

national

the

the

service

debts

and

taxes
pay

Government's bills, and if we
these

in

we

most

and in

to
the

fail

assuredly will

fail in managing the
uation

If

fail in

banking sit¬

providing employ¬

would

seem, therefore,
inkling of evidence
restriction, price or
wage condition that restrained or
affected production and trade un¬
favorably would be removed, and
such impediments to raising our
national production and income
are menaces to our whole system
and to our very economic exist¬

ment.

that

It

every

that any law,

ence.Some

of

us

are

still

anx¬

iously waiting to understand how
this national income is going to
be.; produced in peace time.
It
seems not worth the space to take

the foolish proposals, such as
suggested by those who would re¬
the interest on the national
up

move

to

those who say we
spend and not
and further increase the debt.

ourselves,

must
save

or

continue

to

Unfortunately, however, these
doctrines
which
would
destroy
our

whole economy have a

large

in¬
at

what

will

price
Can

for?

we

protect
of;the

ment',
and

bonds

hold

Bonds

banks

price

the
up

and other

of

institu¬

would ,be the effect

institutions

to

Government Bonds at par,
less

of

to par to

proposed, Thomas amend¬
which would allow banks

other

their

price?

7.

International

exchange.

and

Our international
trade problems with the rest of
bearing
the
world will
be conditioned

Government Bonds,

tions?,.. What

Corp.—A

.

remain with

Estimates claim that the mini¬

us.

mum

-

.

folder, "Ten Securities, That Sat¬
isfy a Wide Variety of Invest¬
ment Requirements." v.
Knicker¬

.

the

post-war

year

Government

.

its

will certainly

needs

.

following World following, and it seems highly im¬
War
I.
In
1920 Liberty Bonds portant/that sound national eco¬
nomic policies be promulgated.,
bearing, a 4%.% coupon sold below
good

erage

Keystone
edition of the

Important."

and

Government

finance

and

debt

national

>:■

service the

to

debt, or those who say the debt
makes no difference—we owe it

Vk %, 2% and 2 V2 % coupons sell

rent

Taxes

Taxes.

6.

debt, or even cancel the national

from

lected Investments Co.—The cur¬

.

t

failure

;

taxes, money
add credit^ prices and costs, ex¬
change stabilization, capital for
business, and all their economic

inseparable

80.

.

mean

This monstrous problem is

War I.

of Abstracts, discussing ' life
companies' investments, the high
cost of living and taxes.
Se¬

issue

Seemed

Series

a

tive

Woodford Matlock of the Broad

.

Prospectuses upon request

Series

Will

them?

declining pro¬ large problems will
bring about in all of them.

and

,

Hugh W. Long

B-l, 2, 3 and 4 in bonds

K-l, 2 in Preferred Stocks

employment

must

Mutual Fund Literature .C; - fa

r-f

sell

duction take place to

Of

enterprise?

then ,we

,

Certificates of Participation

as

encourage
to take their chances

10

Custodian Funds

The

academic.

than

;

worse

If prices are raised
increased in terms of cheap money,
lose by post-war
but that would not necessarily be
readjustment all that is claimed to
a -rise
in world prices.
It would
have
been
gained by
holding
be a depreciation in the value ol
prices down during the war.-v|? - t
money, ; and the countries
that
/ 3. Jobs and employment -*, are maintained sound- money would
definitely tied up with the recon- still
buy products on the interna¬
tional markets at declining prices;
with 38.4% in bonds and 18.7% in
4, The
national ,f debts./ 1 Esti¬
real estate.'■
mates generally from - authorita¬

in

'«

investing their capital

ahd

going

composite
invest¬
Street Sales Corp., in the current
leading universities.
Items gives
one
answer 1 to The
Harvard,. Princeton, Yale, Johns
question:
"Is 150 FRB IndexHopkins, Dartmouth, Cornell, Chi¬
Postwar Wishful Thinking?" The
cago, Northwestern^ Stanford and
conclusion expressed in the mem¬
Vanderbilt make up the list. -As
orandum is /that such, a level of
last reported, 42.9% of their com¬
industrial activity after this war
posite investments were in stocks,
is not unreasonable.
y
; *
ments

Will

after this war,, be prepared
to repeat the experience following
World War I, when both the Gov¬
ernment
and private enterprise
loaned billions to Europe for re¬
we,

that costs must come down or un¬

•

Calvin Bullock's current bulle¬

NeW York

to finance reconver¬

come

sion and business expansion?

domestic price

sidize foreign consumers,

ployment

increased sales volumes and

little

so

is ^economically

for post-war reconversion
employment. Will wages and

opments from the Investor's View¬

ings

Distributing Agent

ital to

to

reserves

™

Prospectus

confi¬

that in¬
construction and to make a mar¬
operate
Unfor¬
without a loss and provide expan¬ ket for American goods?
sion for newcomers. These prob¬ tunately, much of this has never
been
repaid.
Will
we
accept
the
lems are so interrelated that any
attempt to
separate
them'" and goods of foreign countries in pay¬
solve them one by one is clearly a ment for the goods we wish; to
prices

continue

dustry, can

and

Timing contains the fourth article \sary balance between prices and
^
1
in its series on "Scientific Devel¬ costs to
keep production and eiri

Send for

without

From where is the new cap¬

ress.

.

domestic

The current issue of Investment

and

people;

dence business never makes prog¬

.

poration of course was required
to pay less taxes by many/mil¬

*

J.

of

Research
assets

payments."
*

Henry

President
&

greater resist¬

declining earnings and
*

four classes of
stilll available to in¬

at

maintain

vestors Trust to

net

contains

established policy of

the

is

these

value ranging from

*

the trustees of Massachusetts

for funds

Keystone Corp. presents a chart
in The current issue of Keynotes,

bonded

general investment

the

discusses

Trust,

Investors

Massachusetts

york

greater." philosophy of MIT.

tal gains becomes even

much more than

Incorporated

GROUP#

much taxes on a given

net

Request

on

chart.

tween costs and

on

the

borers demand protection for their
situation seems to
jobs and shut out foreign goods?
cupations.; ; ■
■,j have a great variety of complica¬
5. The money, credit and bank¬
tions involved in it. Prices have
2. The readjustment of, prices
been held down while costs have ing problem. What is the money,
and costs to restore balanced eco¬
credit
and banking problem? The
risen.
Capital and reserves for
nomic conditions. It is well known
principal assets of banks to pay
post-war
reconversion,
expansion
to every business man and trades¬
and employment seem entirely in¬ their demand depositors are Gov¬
man that when costs exceed prices
ernment debts. Bank deposits and
The huge government
businss declines. Producers with¬ adequate.
cash exceed all peace time needs.
draw.
Newcomers
wait. *. Those surpluses to be disposed of will
A very large part of bank deposits
not help domestic prices. One cop¬
who remain in the business lose
have been created out of Govern¬
per producer estimates the gov¬
money, avoid any expansion'; curb
ment
debt to
finance the war
ernment surplus in copper will be
employment,-„cut down their vol¬
needs.
The
money,
credit and
adequate to meet industry's needs
ume, and the result is depression:
is,
therefore,
for three to five years. It is well bankings problem
At the present time the' malad¬
debt
known that the condition in alu¬ tied up with the national
justment between costs and prices
minum' is even more excessive. problem and its related economic
in most peace timb business has
The situation in machine tools has aspects. A solution to one of these
not been exceeded since the read¬
been estimated to- be a surplus problems cannot be forthcoming
justment period following World
and succeed without a solution to
War I, in spite of the efforts at production adequate for eight to
the other.
While we have held
ten years.
Recent trends in the
price control.
Costs have -risen
prices of agricultural products in¬ prices down, inflation of bank
sharply
in
such
essentials as
dicate
the possibilities of i great credit and the currency have run
wages, taxes, services, imported
wild and
every
rule of sound
surpluses occurring in many lines.
raw materials and the regimenta¬
For some time the market
has banking has been thoroughly vio¬
tion costs of compliance with gov¬
Now it must be set right,
been throughly demoralized and lated.
ernment requirements. Represen¬
or the consequences endured. This
prices well below ceiling prices
tatives of the motor car industry
in eggs, fish, potatoes, and there is not a problem alone by itself.
have indicated that post-war cars
has been great spoilage in butter, It is a part of the economic and
will be priced from 25% to 50%.
Canned milk and meats.
These financial organization of problems,
higher than in 1940.v 'Manufac¬
conditions are not conducive to all of which are interdependent,
turers in electrical industry have
prices
upward, even and success in managing one will
announced that post-war prices adjusting
though
costs
may exceed present necessarily mean success in man¬
will have to be 33 1-3% to 50%
prices; - It seems clear, therefore, aging the others. Failure to suc¬
higher than in 1940. Many other
cessfully manage one of.these

tion of workers in peace

of the high-

priced shares shown
:

readjustment and reloca¬
time oc¬

and the

SHARES

from
over

range

times to

nine times that

are

,

the disposal

(1) On the down-side the price

.(

pretends to be' an outline of some
more important aspects. ,i;It
includes such vital problems as
the termination of war contracts;

of its

the confidence of

be the effect

carry

regard¬

What would

trade problems.

upon the solution of our domestic
economic problems and how other

countries solve their money, debt,

price and tax problems. Liquid
capital will seek safety and quick¬
ly* flow where it can buy most
and have the greatest security.
The rest of the world cannot buy
from

us

unless we buy from

them.

Volume

Our

159"

Number 4286

'

purchases

tries,

or

our

THE COMMERCIAL & FINANCIAL CHRONICLE

from other

coun¬

sales to other

coun¬

PACIFIC GAS AND ELECTRIC COMPANY

tries will be very definitely deter¬
mined by the purchasing power
of

the

respective

relationships,

I

moneys,; price

tariffs

2263

SAN

FRANCISCO, CALIFORNIA

and

trade
regulations. The international gold
standard will
■

be

restored, but its

working

depends

dom

the

of

.that

wish

the free¬

upon

markets.

to

sell

their

surplus
goods must be willing to buy, and
country thaAprovides for it¬
self an advantage for a short time
by cheapening its money is an
in the

-

international

duction and civilian

and trade relations.

nomic

be solved

can

on

as

separate from the general scheme
The

problems as

interrelation

of

whole.

a

all

of

these

economic problems bars the solu•

tion

of any one of them, either
with'respect to the United States
-

alone
,

Do
i

economic :f
have

we

and

how

the

pendent
;

under-

solutions

each and all of them
one

are

the

upon

to

interde-

other,

Sales of electric energy
totaled

soundness

trial customers,

which

structure

system

of

the

by 19.3%. One-half of this

the

economic

every

to

and

employment.
almost any

vote- on

a

delivered to

distributed

commercial

customers

believe

tural power

be

to

in

almost

would

contrary

to

be

in

interests

has

writer

their

the

taken

votes

run.

/

customers.\With

re-

bej

best

noted that

The

more

than

farms located within

by simple
problems and
public audi-

Company's

power

a

lines

business societies, college students
and even college faculties.
The

SOURCES

conclusion quite evidently is that
we
do not have any national or
clear

international

policies which

cut

:

*

i

Electric

Is this

lion

A

true

of

Department.....

Steam Sales

other
I believe it is not
true of such countries as England
be

may

many

§;

2

o

w

op

<J>

-c

B

2

2

2

I

es-

present

;

gas

have increased 15 bil¬

cubic

feet

annually

as

a

«

2

2

result of the

2

war

f

program.

/

DISTRIBUTION OF STOCK OWNERSHIP

JDECEMBER
$97,429,110
39,629,387

..........

Department.

-

;;

.,

Department

Miscellaneous Income

countries, but

a

requirements of existing

customers

A".

Department..................

Street Railway

military

with

beginning of 1940. In addition,

OF GROSS REVENUE

Water Department

countries?

of other

true

Gas

BILLIONS OF
CUBIC FEET

connected tq out-lines since the

the

economic

generally understood by the masses of the peo¬
ple and recognized by them as
sound principles upon which we
can
depend.

an

produc-

feet of gas annually, have been
i

1943

are

war

tion. Industrial and

including well known clubs,

'ences

It

mm
hi i

v

■

gas,

consumption of 12 billion cubic

are now

receiving electric service., A

!

Natural

electricity, plays

tablishments,

98% of all
mile of the

as

important part in
;

agricul-j A

spect to the latter, it may

this

in

38,000 1

1934-1943

.1.0

and other

case

inter-

their

to

long

tried

statements of these

has

best
every

and

SALES OF GAS

BILLIONS OF

KILOWATT-HOURS

was

132,000

well

as

approximately

812,000 domestic customers,;

hydro plant in California

amounted to 119,-

7.0

chiefly for. war %

If

problems, the majority of
people would vote for what they

7-0

A

any

480,000,000 cubic feet, an increase

6.0

of

these

ests, ' but

to

Sales of gas

1934-1943

of 11.3% over 1942.

energy V:

27,000 indus-

production. The remainder

eco¬

relationship of production,

distribution

put

dominate

and penetrate

nomic

-

;v

hours, exceeding those for 1942 j

was

SALES OF ELECTRICITY

in 1943 A-

6,870,000,000 kilowatt-

elementary economic principles of
money, credit, price and cost rela¬
tions, exchange relations between
countries, and other fundamental
whole

POWER HOUSE,

5

PIT NO.

with largest installed capacity of

a large percentage of the
people do not well understand the

~

added

or

are we economically unschooled
in the management of these prob¬
lems in a democracy?
Unfortu¬

nately,

..

*

.

standing of these economic prob¬
lems

j

placed in operation in April A
19.44, added another 214,000 horsepower of gen¬
erating capacity to the Company's vast facilities
for supplying electric service in this strategically
important area.
A" A'A- ;.A:A;; A: A.-'

relationships.

natfonal

a

.

A Pit Plant No. 5,

with respect to the inter-

or

national

•

-

ability to meet wartime demands rests largely
resources of electric and
gas supply made
available through a long-range construction program,
upon which more than $ 152;000,000 was spent in the
past five years. -The' installed -capacity of the Com¬
pany's electric generating, plants was - increased v
400,000 horsepower during- this period, and an ; ;
additional 200,000 horsepower was contracted ■?
for from other producers.A j
V

eco¬

democracy. It has been the

of economic

Operations

The

for

/purpose here to try to indicate
'. that' no - one of these > large - eco-

.

!/V

use. •

again suecessfully met the requirements of greatly expanded industrial and
military activities in the territory served, as well as the needs of a
rapidly mounting civilian population now estimated
to exceed 3,500,000,
! /?'"% ; •
>'

'

education

nomic problems

1 9 4 3

In 1943 its interconnected electric and gas systems

com¬

munity, and sooner or later economic maladjustments will prove
this, as it has to every country
that has depreciated its currency
or otherwise
manipulated its price
,8. Public

of

The Company continues to apply, itself vigorously to its
vitally
important task of supplying power, light and heat for war pro¬

any

enemy

Summary

.

Countries

31, 1943-AAy

Men Stockholders............,,.

37,728

Women Stockholders........ A.

53,219

.

.

..

.

.

.

.

.

726,479*

Joint Tenants ...............A-

502,419

Investment and Other

305,290 A

Insurance

388,671

and

23,157

Corporations, Partnerships,

Companies, Educational, Charitable
3,179

Religious Institutions, etc...

"

Total Stockholders

Total Gross Revenue A.............. .$138,981,356

^ind Canada, Sweden and Switzer¬

117,283

land, and I know that before the
it

war

tries

not true of such

was

*Street

coun¬

Railway System sold in October, 1943.

Denmark, Holland and
It is highly important
at simple, clearcut principles which the masses of
as

Norway.
that

Year Ended December 31

people will understand and which
know

we

to

past

hundred

tries

that

nomic

years

have

For

those

based

Gross Revenue,

coun¬

their

lieved

have,
such

eco¬

i....

...........

A

.....

Avv.AAA

Stuart

of

Gross Income..........A.

have had no such
economic knowledge.

;

we

least, none have left their im¬

Grande
&
Co.,
Incorporated.
Hoge Building, Seattle, Washing¬
ton, have issued a very interesting
and comphrehensive pamphlet on
Weyerhaeuser Timber Company,
which

offers

ionary

an

hedge

attractive inflat¬

with

tremendous

78,626,525

.

.

.

.

.........

A:.

$ 55,802,491

$ 48,487,655

■,,

on

Income.A.;Avv..

Provision for Federal Taxes

.

:

11,368,984

10,810,407 ;

Dividends

.on

$ 44,992,084

$ 37,118,671

22.645.080

14,851,079

A.,........

$ 22,347,004

$ 22,267,592

„.AAA............

8,409,820

8,399,508

$ 13,937,184

$ 13,868,084

12,523,808

12,524,168

aa,?a a;;AA.. a: A. V,
on

SurplusA

Preferred Stock

Income.A..A..-.

.; A
.

..;

Balance.......... A'A A .......A

Dividends

on

Balance.

Earnings

per

Common Stock........ 'A
...............

.........

*.......

■»......»«

Dividends Paid per

$

1,413,376

.,...

$2.23

Share of Common Stock......

$2.00

Share of Common Stock .-.......

.

The Company views with confi¬
dence the postwar prospects

of the

territory served. It is apparent that

long established

of the foremost

distributing

areas

is

to

destined

national

as one

agricultural, and

of the country,

increasing

assume

importance

as

a

manu¬

facturing center.

Net Income before Provision for Federal Taxes

/■;%'f;

★★★★★★★★

this region,

........

Net Income to

"

83,178,865

Bond and Other Interest, Discount and Other In:
come Deductions..
;

print so firmly upon society and
Upon government policies in this
country.
'■ '•■

Timber Stock Attractive

$127,114,180

preciation and Other Reserves..........A...

by and large, fol¬
principles as those
by Adam Smith, John
Mill and David Ricardoi

leaders

$138,981,356

Maintenance, Operating Expenses, Taxes (except
Federal Taxes on Income) and Provision for De¬

down

Apparently

1942

1943

the

in which they have be¬

lowed

At

sound.

policies and practices upon

doctrines

laid

be

★

SUMMARY OF CONSOLIDATED EARNINGS STATEMENT

arrive

we

$

1,343,916
-

,

Without in any way

relaxing

our

efforts in the all important task of

helping to win the
now

planning

program to

continued
ern

a

war,

we

are

comprehensive

aid and stimulate the

development of North¬

and Central California.

$2.21
$2.00

post-war possibilities, the firm be¬
lieves.
may

be

Copies of this pamphlet
had upon request from

Copies of the Company s 1943 annual report rhayhesecured on application to E.J, Beckett, Treasurer,
~
■

Grande & Co.




245 Market

Street San'Francisco

6, California.

President,

THE

2264

Thursday, June 1, 1944

COMMERCIAL & FINANCIAL CHRONICLE

In

ness.

Socialized

Direct Private Wires to

ization and undesirable soclaliza-:
tion.

cost of goods

ity, the Port of New York Author¬

making
that goods and services

ity, which has paid its own way
arid successfully resisted efforts to

of obscuring the true

and services, a device, for

Toronto & Montreal

it appear

socialize its services.

less than they actually cost
again by discriminatory tax¬
ation make it appear that the cost
of some things is greater than it
actually is, and in general a hocus
pocus by which the people as a
whole are misled into thinking
that they are getting something
for nothing.
It is probably true that social

Wood, Gundy & Co,
Incorporated,.

Winnipeg

Montreal

Toronto

New York 5

London, England

Vancouver

Canadian Secnities
By BRUCE

WILLIAMS

figures on Canadian

Some interesting

'

:

7. /,•>

It is high time that

;/;■%-/

bank earnings were pre¬

tional American system pf

private
enterprise, free themselves of the
fixation which the bogy of gov¬
ernment ownership is to so many,
and become aware of the fact that

the ends of socialization are being

achieved under many other forms
and

the achievements of the few have

government

been shared by the

many; but the

ranged

4.56%

to

Scotia

for Nova
for the Royal

equity

CANADIAN BONDS

Bank of Canada.

GOVERNMENT

in in¬

Minister Ilsley,

Finance

troducing the bill to revise the
Bank Act, estimated the share¬
holders' net income at 5.09% of
total shareholders' equity over the

PROVINCIAL

figure was

those

basis: from

different

CORPORATION

relation
in

war

5.50%

In

1939.

earned

of

that

6.61%

the

total

year

most

V

TWO WALL STREET

is

There

lieve

that

good
this

reason

to be¬
and

protracted

war-induced downtrend has
about
the

run

its

course

characteristic

and

that

stability

of

Canadian bank earnings is about

to reassert itself.

A

welcome

development
to
investors in Canadian

American

equity securities, is the important
decision by the Supreme Court of
the Province of Ontario, denying
the right of the province to levy
inheritance

taxes

on

Canadian

registered

and

located in the United States.

The

shares

corporate
position
the

that

bated

taken by the court was
wills of both deceased

of

owners

the

outside

shares

were

pro¬

the

province and
companies in
question tnaintain 'registrars and
that

the

NEW YORK 5,

Canadian

transfer agents outside the prov¬

ince, giving evidence that
legal "situs" of the equities
outside

the

R ECTOR

of shares

Co. of

N. Y.

NY-t-1045

2-7231

of International Nickel

the

benefit5 of American
Canadian'

of

securities,

to

holders

particu¬

larly those of the Province of On¬

tario, but they

likely to have
some influence on the interpreta¬
tions of Federal and State taxing
authorities in this country.
are

It is

expected that the case will
appealed and will be reviewed
by the Privy Council. In a 1942
be

decision, this highest tribunal
tablished

the

precedent

es¬

that

shares owned and transferable in
New

York

not

were

subject

to

"succession duties" in Ontario.
While these decisions help to
clarify the Canadian estate tax
muddle

it

as

affects American

investors, they do not offer a
satisfactory solution to the prob¬
lem. It is to be hoped, however,
that the action taken by the On¬

at work

vision

of

on

estate

an

over-all

taxes

to

re¬

push

off en

$50,000

City of Toronto ;
5s, due April 1, 1945
Payable in U. S. and Canadian funds *

Priced to yield 1.25%'

Taylor, Deale

&

Company

64 WALL STREET, NEW YORK 5

WH«»*iaff3-t874




We have

tinction dawns, it will be under¬

as

and

traditions.

as

have

it takes the form of Government

large scale, It is
foregone, conclusion
that extensive Government own¬

ownership
not

on a

even

a

ership in form will be the even¬
outcome

of

nomic life of the
The

increased

Gov¬

the eco¬

people.

of

art

politico-economic
revolutionizing has developed re¬
markably in recent years.
The

a system of private respon¬
sibility and freedom from eco¬
nomic. choice.
(7,'

We

method

indirection

of

the

for

substituted
ward

has

been

straight-for¬

proposals of the original
party.
The purposeful
York area. /
managers of our transition from
has been socialized under both the horse-and-buggy era, in which
private and public operation. On we thought that cost and income
the other hand we can here pay should stand in a respectable rela¬
our
respects " to the' management tion to each other, to the planned
of a great public transport facil- economy,
in which cost is an
afterthought,
do
not
confuse
in

good illustrations of
metropolitan New
Subway transportation

the

their efforts through to
factory conclusion.
ffc

sje

a

means

ends

ion

broad demand for Domin¬

a

internal

cannot

issues

here which
be filled at'the moment,

top

prices

are-

The fact that

bid
a

for

satis¬

factory supply of Dominion inter¬
nal issues cannot be found at

1/16

off

the

official

of

the

rate

even

is

and ends.

one

is

the

means

are

Government ownership

longer

no

Their aims and

fixed but the

are

alternate.

'• ,•■■',

Turning to
the
market
last
week, activity in Canadian bonds
was small with prices firm.
There
exists

-

Socialist

satis¬

*

an

is

end

end—it is

a means;
socialization.
In

recent

political practice the
highest respect has been shown

more

.

for

the

old

axiom

statesman¬

of

ship which the. successful found¬
ers
of tyranny have understood
and
acted
upon
in
all
ages,
namely, "that great changes can
best be brought about under old
fOrmS."

,,

The true nature of socialization

conviction 7 of

investors that the discount in the

is

Canadian

question. Those whp had; most at

.

dollar

will.

sooner

,

a

now.

ing momentum of the drift toward
a
socialized society, to acquaint
themselves with its characteristics

and

manifestations and to forego
opportunities of selfish gain
special advantage when the
opportunity
comes.
Otherwise
business, one by one, will fall be¬
fore the temptation to fatten at
the: public expense, not realizing
the

and

that

what is

or

of

been

out

doled

with

socialization

forthcoming

the

ness

their

in

men

has

because

not

busi¬

interest

own

and citizens generally in the com*
mon interest have not been able

to recognize the substance of so-,

cialization in the forms in which
it appears; have been scanning the
skies on the watch for a cataclysm

mic change while the rising tide

slowly engulfs them.
rAfter the substantial socializa¬
tion* of enterprise, it will prove to;
be a relatively simple matter then
to eliminate the shell, according
to the best of Marxian prescrip¬
tions.
Only by a critical aware¬
to the essential nature and
character of the devices of social¬
ization can those who view such
ness as

ultimate changes in the character
of our economic organization with
alarm

defend

yet but little Govern¬ •American

as

ernment interference in

from

both

in the long run. but
question of whose ox is
It certainly behooves
the business men who fear the ris¬
good

simply

gored

So

the'... traditional

.

of

system

•

freedom.

economic
/v

/.

much

for

the

necessity of
socialization of all transport has
"distinguishing between the form
gone a very long way already and and the substance of socialization.
may proceed much further before What if
any are the discernible

tual

the less easily detected
resisted means of departure

well

indication
We

and

ment ownership in the transport
industries in .this country, but the

although

now

forms

favorite

these issues.

authorities

old

commun¬

socialization

is

under

ulate

Canadian

the

tion, but the full implication and
true nature of socialization as, the

tario Supreme Court will stim¬
the

toward

trek

method

the

ism

Canada, Ltd.* and of Lake stood that socialization is the m ore
Not only will important, the far more pervasive

was

the province also..
This decision involved two blocs

American

Shore Mines, .Ltd.

these decisions tend to operate

of

such
is no longer the sine qua non of
socialism.
In
the
step-by-step

of socializa¬

means

cost

Government ownership as

transport probably
government ownership to

common

the

of

service.' 7:

political legerdemain of
our times can only be appreciated
if it is understood that, (1) social¬
ization may
and
does proceed
without government ownership or
operation and (2) that govern¬
ment ownership and operation do
not of necessity mean socialization
of the goods or services produced.
And when the import of this dis¬

INCORPORATED

one

Canada.

Peter

because

anymore

people and obviously. gov¬
ernment ownership is one of; the

and another
shareholders'

equity and six of the remaining
eight banks earned between 4%
and 5%.
In contrast, as stated
above, the highest figure last year
was 4.56% for the Royal Bank of

socialization

robbing of Peter to pay

most

equity since the outbreak oL the
bank

disappear; on the other
hand,
much opposition to the
assumption of certain public func¬
tions • would
also
disappear
if

sidized

this

means

shareholders'

total

would

Socialized

A. E. AMES & CO.

for that form of organization

Paul and then Paul won't be sub¬

CANADIAN STOCKS

V7':7\■

to

vor

has given up the economic ghost.

significant feature of Cana¬
dian chartered bank earnings, as
revealed by the figures presented
by Mr. Abbott, is the rather sub¬
stantial decline in net profits in

>

,

people were assured that public
ownership and operation were not
going to be used as a means of

in

A

7

vented much of the socialist fer¬

eventually there will, be a slip up

re¬

administration.

and

small scale but

a

on

organization

economic

of

7- If socialization under Govern¬
ment
ownership could be pre¬

This sort of
for

larger loss.

or

awhile and

sley's figure included the earnings
set aside for losses less the amount
actually required to pay those

',.77'

form

a

social check kiting may work

ported by Mr. Abbott, whose fig¬
ures show the published net prof¬
its after making full provision for
bad and doubtful debts. Mr. II-

.Tosses.

when it becomes the unavoidable

buy,

a

com¬

right hand must be recovered out

income which will

equal

MUNICIPAL

However, this higher
arrived at on a slightly

last 15 years.

that

ownership

but redivides, and the real

thing,
loaf of
bread. The real social gains from
improved efficiency and increased
economy are not excusably con¬
fused with the gross make-believe
gains which are offset somewhere
else in the economic system by an

ofv total

3.36%

from

shareholders'

be

to

of the

-

goods and services. They are as
different as night and day, as dif¬
ferent as a stock dividend which

.23% is not rep¬

whose figure of

few

for

seems

is
not
of the pockets of others with the
necessarily synonymous with so¬
left, with a fat commission for the
cialization, we can free ourselves
service of taking and giving,
of stupid resistance to
govern¬ :
The business mind, not trained
ment ownership where and when
in the tricks of the semantic shell.
the totality of all circumstances
game by which old isms are sold
make it the only alternative, and
under* new names, is peculiarly
apply the same energy and atten¬
handicapped
in discerning his own
tion to seeing to it that unneces¬
and the public long-term interest
sary socialization does not occur
Effective resistance to the onward
under
government
ownership march

Commons recently by Douglas C. Abbott, phony gains by the method of so¬
cialization must be clearly dis¬
Parliamentary Assistant to the Minister of Finapce, during the debate
on .the Bank Act.
Mr. Abbott's figures show the net profits of the tinguished from the real social
10 Canadian chartered banks in recent years m relation to total dividends made possible by the
successive and large reductions in
shareholders' investment or equity.
^
the actual social cost of desired
Aside from Barclays Bank,
resentative, earnings of the nine
chartered banks last year

Also

in" many other ways.
and if it is realized

when

in the House of

sented

those who

fear for the future of the tradi¬

progress at all times has been
measurable by the extent to which

mon

,

'

and

It

matter of principle or

(Continued from first page)

cost

14 Wall Street,

among
other citi->

among

to be the basis of dis¬

zens seems

The

Provincial
Public Utility

Municipal

cupidity

fact,

men as

tinction between desirable social¬

Canadian Securities
Government

business

no

longer merely an academic
have .unfortunately treated
In fact,: so effectively

earmarks and
of

identifying features

socialization?

not

Socialization

is

two front attack; its
manifestations are numerous and
a

one

or

its variations endless, and that is

probably the explanation
siren appeal on one point

of
or

its
an-

note the substantial lack
hesiveness of business in
resistance

mon

to

reduction of the
freedom.

co-

com-;
relentless

the

area

of
a

of economic

The explanation is not

only in ordinary apathy but in the
fact that each step forward in the
socialization of one industry af¬

fords

promise of special ad¬
other
industrial

some

vantage

to

groups; everyone for himself, and
the devil take the hindmost re¬

mains the code of business action.

To

the business

two

kinds

which

of

hits

:

there

mind

him

and

that

are

that

socialization:

which

hits the other fellow, and the lat¬
ter is of no concern and may in¬
deed have

some

short-term favor¬

by-products.

able

The use of the

favor and finances of Government

by one industry to improve itself
in the indirect competitive strug¬
gles with another is the kiss of
death for individual initiative and
private enterprise.
One

circumstance,

in

my;

opinion, is always present in
scheme

form,, of

or

-that

any

socialization,-

later be, removed and its pre-war

stake

parity with United States dollar

it

restored.

have depressions and wars served
^is false fires and diversions that

lesser degree, from the
responsibility of meeting., the full
cost of production, of goods
or

there

services.

There

:

.

7.

........

.

good demand for
Quebec and Saskatchewan bonds
at firm

was

prices.-

A bloc of -British
Columbia
5s
was
disposed
of
quickly at' the offering side of the
market.
Nothing in the pres¬
ent

situation

can

he

-perceive*

such.

as

is

little

public realization
bow. far .we.have been following
fellow-traveier as ^ a, guide.
There is
no

by

no

fixed

simple mark of .identification'
which socialization. < can be

which is likely to alter the trend

easily recognized.

of

man

recent

firmness
with

Ply.

a

weeks

in

a

toward

market

steadily

general

confronted

diminishing4 Siip-

pattern and

The business

is often confused.

.

Often also

•

other to almost every industry. It
is amazing to one who
stands
somewhat aside, if not aloof, to

and-

greater

is

-

a

7

departure,

to

a

or

•

It is

the

stubborn

fact

of cost that stands in the way of

making the land of promises come
true.
Cost is the awkward un¬

yielding fact that makes it im¬
possible,
dream

to

bring

the

economic

world into reality.

Those

who promise miracles ultimately
feel
the
pressure
to
deliver.

he lends his support particularly
when
the proposal appears ad¬

Knowing, probably

vantageous to his particular busi¬

better than we do,

as

well if not

that cost

can

Tmm
swAWwwwWw^inKU1-. t'H

"i>

Volume 159

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4286

-

only be reduced by improved
efficiency and increased economy,
and that total cost will have to
foe covered by total revenue, and
that there is after all
coal

fired

into

boiler

owned

or

higher B.t.u.

a

value in oil from

magic in

no

Government-

a

Government-

a

subsidized

pipe line, some method
be found for getting out of

must

the dilemma.

cialization
and

the

The

in

its

for

means

employment is
form

the

of

answer

broadest

so¬

sense,

effective

its

.

is

at hand in the

now

unlimited

spending

power of Congress, unlimited as
to amount and purpose.
> The essence of socialization is

subsidy.. The

of subsidy
is to avoid the restraining disci¬
pline of cost on the character and
amount of goods and services pro¬
duced.
that

purpose

Since

all

total

cost

the

admit

would
of

all

goods
and services must be covered by
total

price, we can
that socialization is a
the cost
of some^goods in the price of other
goods, and balancing out with a
tax payment which it is wholly
impossible to trace or allocate to
revenue

or

easily

see

means

of making us pay

any

particular

It is

a means

goods

service.

or

for making us think

things are relatively cheap
and other things are relatively ex¬
pensive, As a means of economic
obfuscation, the theory of social¬
ization is nearly perfect and its
some

cessful and continued operation of

knows,

no one

no one

find out, and possibly no one
will care, whether the goods and
services we want are the ones we

.can

are

getting or whether

are

our

of materials

resources

limited

and labor

being directed to the produc¬

tion of the relative amounts of the

goods we want most.
;
Coming at our subject some¬
what in reverse, We have probably
;

made
clear
why
Government
ownership as a form of enterprise
organization is so popular in some
quarters. The appeal of Govern¬
ment ownership is certainly not

end but because of its

an

as

fulness

as a means

of avoiding the

stubborn fact of cost.

in

attraction

est

use¬

The great¬
Government

^ownership is. its availability as a
'means of socializing goods and
services by not recognizing their

is private ownership in theory and
in fact, public policy resists inte¬

of free enterprise;1 for
a system of free en¬
terprise is the freedom of choice
among consumers as to how .their

demonstrably desir¬
able and economic integration, but

claim

agency

a

system

the heart of

social income shall

the

gration,

the

about

not

are

tive

effects

really

merits

as

of

socialization

of

to the compara¬

when Government interest in any

the

scalped or
"scalpee" or the ethics of legal¬
ized robbery, but with the effect
of the destruction of

pricevsystem which operates to achieve the
largest overall economy and the
a

substitution therefore
which

have

meaning

no

social

monopoly.
Govern¬
ments,
like
gods,
are
jealous.
Government
ownership of one
means of transport is most .likely
followed by Government owner¬
ship of all competitive = public
means of transport or the impo¬

prices sition of such restraints

of

as

re¬

trols

steps in, enterprise steps out. No
business can compete with gov¬
ernments of unlimited spending
power, and no business can long

subsidies of private enterprise in

form, with all the Government in¬
terference which such

partner¬

a

of

ownership and

public

tion.

k

/

/

/ '/

cal

■

,

Socialization

industries.

■.

X

and

not-to-be-seen costs.

the

Witness, for

the

almost desperate
of publiclyowned utility operations to avoid
responsibility for the full cost of
example,

efforts of the sponsors

the service
able

to make

so as

comparison

as

a

to

favor¬

rates

charged.
You may recall the
testimony of a director of a large
Federally financed electric under¬
taking in answer to the question:
do you include interest on the in¬
vestment in calculating your cost,
to the effect that interest was not

included because
.

no

interest was

paid—the United States Treasury
paid the interest.
Private

enterprise, in contrast,
its most critical and
severe master, the cost for which
the consumer is willing to reim¬
must respect

Private en¬
under
considerable
pressure to try to remain solvent,
to balance cost and income.
In¬
burse the producer.

terprise

is

telligent

private

enterprise' at¬

tempts to recover its costs from
.the purchasers of its products in
such a manner as to interfere the

possible use
and services
be made to pay their

least with the widest
of

those

which

can

products

i.e., to meet cost but let cost
interfere as little as possible with
the widest range of .social eco¬
way,

nomic service.
.

;

.

in¬

dispensable requisite, to the suc¬




where Government

demonstration, in which more than 5,000 employees
Long Island City, N. Y., participated in protest against the recent
by the Navy of its Corsair fighter contract with the
Brewster Aeronautical Corp., and which lasted for two days, ended
on May 30 following Government assurance that new work would
be;
sought for the corporation, an Associated Press dispatch says. Approx¬
imately 3,300 workers employed^
in the Brewster plant at Johns- before terminating contracts af-,
ville, Pa., also obeyed an order of fecting whole plants, and that
their union representatives to end steps be taken to "insure adequate
in

cancellation

their "sit-in" demonstration.

James
the

F.

Byrnes,

Office

ordered

War

of

the

Joint

Director

Course,

moral

is

of

that

the

V/k/k

story, of
industries

those

poration, according to the Asso¬

curement

further added:

that

Brewster
vise

ing by Brewster
economic reasons,

the

given.

sity,

are

early demise,

but

that

;kk

1

■

plant meanwhile
con¬
tinued in operation with workers
not scheduled for layoffs staying
their

at

posts

on

their

regular

shifts."

k-

Further

of

ation

reference

Navy

to

contract

will

;j k/

page

2159,

Henry B. Sawyer, Trustees

V

authority of the United States District Court for the District of Connecticut under Court
Order No. 748, and subject to the terms, conditions and reservations contained in that Order, funds will
be available on and after JUNE 10, 1944, at IRVING TRUST COMPANY, ONE WALL STREET, NEW
YORK CITY, for the payment of interest for the periods and upon the issues shown below;
to

Dates of Coupons'

Amount per

To Be Paid

$1,000 bond

economy,

N.Y.N.II.&H.R.R. 41/28 1st & Ref.
"

4s

314s 1/1/56

.

(Tax Free)

"

have

of the

4s

.

(Tax Free)
(Tax Free)
(Tax Free)

1, 1941

$45.00
40.00

(Tax Flee)

Jan.

40.00

1, 1942

35.00

Jan. 15, 1942
Mar. 1, 1942

60.00

-

40.00

Mar. 1, 1942

35.00

Jan.

40.00

1, 1942
Jan. 1, 1942
Jan. 1, 1942
Apr. 1, 1942

40.00
40.00

40.00

35.00

Apr. 1, 1942

COUPONS MUST BE COLLECTED THROUGH REGULAR BANKING CHANNELS. Checks for pay.
ments of interest on fully registered bonds will be mailed to holders of record May 29, 1944. #Scrip cef*
tificates must be forwarded direct to

N.Y.N.II.&H.R.R. 6s

Treasurer, 71 Meadow Street, New Haven 6, Conn.

Two

4/1/40

(2)

semi-annual

installments

of

interest due Oct. 1, 1943 and Apr.
1944 amounting to............
and

cost

a

1,
$57.58

PAYMENT ON PRINCIPAL

.

OF:.

of

transportation, by whatever
achieved, can have more
far-reaching results than similar
developments in any other indus¬
try. We are all aware of the great
sensitivity of industry in general
to changes in relative transporta¬
tion costs and therefore realize
that relatively minor changes can
have large-scale economic reper¬
cussions in general industry.
*
The very dependency of indus¬
try on transport calls attention to
the possibilities of economic regi¬
mentation through
socialization,
means

without Government

1941 and Dec.

1941 and Nov. 1, 1941
1941 and Jan. 1, 1942

l.
July 1, 1941 and
July 15, 1941 and
Sept. 1, 1941 and
Sept. 1, 1941 and
July 1, 1941 and
July 1, 1941 and
July 1, 1941 and
Oct.
1, 1941 and
Oct. 1, 1941 and

(Tax Free)

1/15/48
3/1/47"
"
31/28 3/1/47
Consolidated Ry. 4s
7/1/54
4s
1/1/55
"
k
4s
1/1/56
"
V
4s
4/1/55
N:Y.N.H.&H.R.R. 31/28 4/1/54

adjusted themselves may be better
than the perfection of a change
which
disrupts relationships of
long standing on which the value
of large past expenditures de¬
pends. All of that simply means
the socialization

June 1,
May 1,

6s

"

old rate structure to which busi¬

markets

12/1/67

5/1/56,k, ,//.,

4s
"

and

and

New Haven, Connecticut

.4".

•

k/,;

$32.50

Bonds both registered and bearer form must be presented to IRVING TRUST
ONE WALL STREET, NEW YORK CITY for stamping

When presenting coupons from tax free issues,
is

required

to cover

only

one

of

payments

COMPANY,
when collected.

ownership certificate Form 1000

or

1001

the entire payment.
-

//;/;'■ E. L. BARTHOLOMEW,

-k/S//

"'/"'■i V'-\

/

,'k

Treasurer

own¬

ership, of the agencies of trans¬
portation.
Now that we have a
firmly established monopoly of
credit in the Federal

Government,
perfect the
means of general industrial regi¬
mentation is a monopoly of trans¬
portation.
all

that

remains

Socialization

to

in

of the major

transport,

means

SERVING

YORK

AND

THE

RHODE

or

of trans¬

port, leads readily to transporta¬
tion monopoly.
As long as there

NEW

4.

.

YU?l/fcL'TU?i"

GREAT
ISLAND

INOTSTRIAL
AND

be

found in last week's "Chronicle",

May 29, 1944

Pursuant

■■■.

own

NOTICE TO HOLDERS OF CERTAIN BONDS AND DEBENTURES OF THE
■" :■

N.Y.N.H.&II.R.R. CO.

■

termin¬

•WM.'i

pos¬

"The

neces¬

arranging for their

build¬
taken ,for

was

Treasury Department

possibly also un¬
derstands that a less than perfect

or

canvassed

force of

comes per

which
declared

sible insufficient notice had been

requirements of all procure¬

ment agencies first be

;

the action in halting plane

procedure for handling such
cases in the future.
He further
asked the. board to see to it that
a

Howard S. Palmer, James Lee Loomis,

This audience does not need to

with

dispatch,
Roosevelt

"President

and also to de¬

concern

Press

,

important
to
our
but no other
industry of the pervasive and in¬
tense significance of transporta¬
tion. ; // k////k'/v;/,

that

ciated

agencies have contracts
might be placed with the

of

Therefore what hap¬

location

whether they could give further
contracts to
the Brewster cor¬

mination Board to meet on June
1 to determine whether any
pro¬

industries

ness

of

Ter¬

opera¬

/;-/'

dustrial group, but to all business
and all industry. In the same way
we
find all types and kinds of

structures

President Roosevelt said he had
asked the Navy and other govern¬
ment
agencies
to
determine*

Mobilization,
Contract

ership

The

notice" to such plants upon con¬
tract termination,
i

contract for production
Corsairs will be terminated at
both plants as of July 1.

of

benefit of socialized cost.

to transportation is not only
and merely important to that in¬

national

The

Brewster

effectively compete with other
industries
operating
with
the

or

pens

any

-

An honest price system is an

Rocsevelf Asks New Oontract
The "sit-in"

which, with the benefit of social¬
ized cost, undermine the inde¬
pendence and integrity of com¬
petitors so that Government own¬

• ■
/:
transport is a
particularly significant aspect of
the general trend away from a
free economy in this country.
In
some sense all economic activity
is interdependent, but upon no in¬
dustry, is all othef industry so
substantially and continuously de¬
pendent as on the transportation
V

old adage of politi¬

an

economy,

production, as a means be told of the significance of the
services ap¬ cost of transportation to industry
pear to cost less than they actually and businesss in general or of the
cost.
Government
ownership even greater significance of stable
serves as a heavy curtain drawn
and
non-discriminatory
rate
to-be-seen

same

of view I would view public con¬
duct of essential services on the

full cost of

the

will amount to the

con¬

thing. It is

of making goods and

between

as

and

flectors of comparative social cost.
From the long-term public point

business basis of meeting all costs
with less alarm than a widespread
system of subsidies and counter

Brewster "Sif-lis" Protest Ended As President

strained and restricted in favor of

the

2265

even

of transport becomes pro¬
be met.
Prices which do not re¬ prietary
the attitude
changes.
flect the present comparative cost Assume, for. instance, Government
of goods and services available to ownership actual or in effect, of
the consumers are economically the railroad industry;
How long
dishonest prices because they mis¬ might the other agencies of trans¬
lead consumption and destroy the port expect to enjoy the freedom
ability of prices to function as the of competition with a Govern¬
guide posts or quotation boards of ment-owned railway? I know of
the
economic
system, directing no country in which Governmentconsumption to the more avail¬ owned agencies are willing to face
able goods and away from the less the
competition
of
alternative
modes of transport; often, indeed,
available more costly goods.
private
transport
is
re¬
Thus the true social concern even
on

practice affords almost unlimited ship brings.
There is, however,
opportunity for political plunder¬ little probability that we shall
ing of industry, and with particu¬ have such an option, for Govern¬
lar ease if one segment of indus¬ ment
ownership without socializa¬
try
allows itself to be played tion of cost will evoke little en¬
off
against .others
until
our thusiasm and keep
very little sup¬
entire
economic
system
is port, and the ultimate outcome of
shot
through with subsidy and extended
socialization
of
cost
counter-subsidy
a nd
we
a re under private
ownership in form
all
subsidizing and being 'sub¬ will be an extension of the area
sidized until

/;,(HAMKfe^flMwV

STATES

CONNECTICUT^

OF

MASSACHUSETTS

The

"Hard

Money" Examined

afterward

they can acquire.

more

'■

quite easy to supply this,

is

It

without putting

silver

for

desire

currencies

the silver standard,

on

pegging the market price
without introducing
international
bimetallism.
For
without

of silver, and

such

any

arrangements.

It

given wide circulation by
Brownell during the silver

was

Mr.

agitation of the 1930:s. It is not a
argument.

new

Whether there is "enough" gold

grant Mr. Brownell that the Chi¬
nese
Government after the war

19345

(2) The "shortage of gold."—
"shortage of gold" argument
now being used featured the
sil¬
ver discussions of the last century.
The

.

,

of the Argument,

sake

the

For

In¬

bought silver
governmental

Chinese

and

dians

the war

before

years

many

without

trade.2

standard

depends
mind.

in

the purpose one has
Certainly there is not

on

enough gold to supply a 100% re¬
serve for every dollar of United
States currency outstanding and
for every bank-deposit dollar sub¬

and
seeks to acquire silver. Would it
not be throwing obstacles in her
path for us to adopt Mr. Brown- ject to check. Outside the United
ell's policy of making silver States this is equally true, for
goes

on

silver

a

dearer and harder to get?

Would
China get sil¬
lowered
our
selling

not rather help
if

ver

we

silver,
the silver,

if

countries

some

little

have

or

no

gold at all.
Can there ever be
"enough" gold1 to satisfy anyone
who has a "good as gold" sub¬

lent
China
or gave China stitute to sell?
silver? Perhaps this is in any case
Mr. Brownell supports his con¬
beside the point, for when this tention of the
inadequacy of phy¬
war ends China will probably be
sical gold by quoting some 1930
less
willing to devote precious predictions of the League of Na¬
foreign exchange to buying silver, tions gold delegation as to a gold
and more desirous of buying re¬
shortage. What the gold delega¬
habilitation
and
reconstruction tion's unrealized
predictions
supplies.
mean to this writer is, chiely, that
For whatever it is worth in this
predictions are risky, The gold
connection, we may note
that delegation could not foresee the
China is one of the countries resteps that would be taken to eco¬
ported as subscribing to the nomize gold, including the in¬
United Nations currency-stabili¬ crease in
price enacted by various
zation plan of April 1944, a plan
governments. /Similarly, we can¬
for

price

which

fix

values

par

we

the. intention to

expresses

the

or

of

members'

units in gold.

currency

citing the traditional Chinese
liking for silver, Mr.
Brownell lays special emphasis on
Indian

the

fact

that

those

peoples con¬
great part of the world's
population.. After telling us that
the peoples of not only Asia, but
stitute

today rely too much

Mr.

on

Brownell's predictions.

tion of gold here, is certain to fol¬
low the pattern of the Silver Pur¬

unavailable

enacted. But the above

chase Act of 1934 and concentrate

ternational

Mr.

law

wanted

was

a

for

or

for

monetary reserves
international payments.

In

the

late

twenties

there

was

accompanying table com¬
pares the 1930 predictions of the
gold delegation, covering world
gold production, including the im¬
portant gold-mining U. S. S. R.,
and 1943 estimates of the Federal
Reserve Board for the same years,

as

well,

•.

.

■

Gold
Estimated
•

duction,
1944

in

,.

production—Forecast

world

gold'

and

.

.

t

,

fact

pro-

millions

dollars,,

.

.

Estimated

of

1944

in

gold

financial

Federal Re-

committee,

serve Board

League of

(excluding
U.S.S.R.) 2

,

financial

/,

Federal Re-

committee,

serve

League of
Nations, 1930

Year

(including

Board

(excluding
U.S.S.R.) 2

(including

U.S.S.R.) 1.

1930

of

according

Gold delega¬
tion of the

tion of the

Nations. 1930

pro-

millions

dollars,

to—.

Gold delega¬

Year

world

duction,

according

'to—

U.S.S.R.) 1

683

432

1936

671

1931-...:

1,153

679

461

1937

662

1932

1,229

693

498

1938

649

1,320

1S33_____

tion,

1936

In

1939_____

625

1,384

958

1940_„i

625

1,437

673

1,050

85, and here converted into dollars of the present weight, i.

Mr.

some

Brownell

himself

predictions when tes¬

tifying in Washington in behalf of
silver-purchase
legislation.
H e
then stated:

convinced

gold

ounce

the

will

today.
of

the

And
fact

that
that

is
in

regardless
the

next 1,
2, or 3 years the production of
gold Will increase to some ex¬

tent.

more

uation of

that

Institu¬
1

Banking and Monetary Statistics, 1943, p. 543.

1932

The

e.,

c>»5o,

2 From

made

525

fig^res ***** from C' °- Hardy's Is There Enough Gold?, Bookings
p

ecjucUs

gum

688
681

studies the sit¬

one

gold, the
of

the

future
not

anything like

more one

grave

danger

production
be

as

in

much

is
of

quantity
as




it

is

And

as

to

China and the silver

standard Mr. Brownell

predicted:

It is

highly improbable, if not
impossible, within the next 100
years, to get India and China to
abandon the use of silver.

silver

The price of gold.

(3)

Brownell
in

the

that

states

of gold would be
equivalent, in dollars, to an in¬
crease
in
the
supply
of
that
price

metal, but he is opposed to such a
course
for the present.
Perhaps
has

he

date.

mind

in

that

for

a

later

He gives us

this impression
when, in discussing an increase in
the price of gold, he writes that
it
"should only
be done when
clearly necessary." He seems will¬
ing enough to have the price of
gold increase, once bimetallism is
established, "should that [gold
price increase] still seem desir¬
able for the purpose of affording
sufficient

a

of

amount

hard

money." From the viewpoint of
gold-and-silver mining company

a

this is ah understandable flexibil¬

ity? ofv attitude.

:

a

metallist

elsewhere

who

the

But from
theoretical

standpoint - of

bi-

argues,

that the prices of gold and silver

writer

elsewhere indicated

has

his grounds for

conditions

the

under

even

concluding that
that

existed in 1925-30 the facts did
not

warrant

hension.

such appre¬
case it is clear

any

In any

that such

apprehensions are not
likely to revive within the next
decade

two, unless the whole
level of incomes and prices rises
far above present levels. In the
past decade the monetary gold
or

stock of the world

as

measured

in dollars has

trebled, partly by
upward revaluation, partly by
transfer

of

into the

reserves

of

amounts

large

gold from the hoards of

India

of the western

world, and partly by an enormous
Increase in the scale of
production. In 1930 thd gold re¬
.

of central banks and gov¬

serves

amounted

ernments

to

some¬

As

"pegged," this flexibil¬

about

over 10 billion dollars, or
17 billion dollars at the

present

now they
billion
dollars.

price;

32

over

production
pared

amounted

dollars in

million

with

to

1941

about

total
Gold

as

1,250
com¬

million

600

1926-30.

The

most

noteworthy

increases of output were

United

States,

in the
produc¬

where

tion doubled between

1934

and

1940, in Canada where the in¬
crease was nearly as great, and
in Russia.2

-

a

future of

long

mankind

gold. He asks how
will preserve its

belief in the value of gold if it is

arid in
common
use as money.
The fact
is that almost everywhere a gen¬
eration has been growing up that
has not seen a gold coin in use—
in the United States, in Britain,
in Europe generally, in the Union
of Soviet Socialist Republics, and
longer

no

in

of

change

countries.:

the

their

of

what

circulation

other

most

people

in

world

views

If

the

indeed
about gold,
do

of

Most

it?

in

us

this

country have discarded red-flan¬
Should

nel underwear.

law

we

pass a

making red-flannel under¬
compulsory for all, just be-

wear

cause

a

few

change?'\/■ /;•

do

not'wish

to

v.■ -.v

„

use

settle'in-:

to

under

transactions

a

If we adopt a,
materially lifts the

that

States-controlled

United

The, fact is

that, with us, gold
practically but one real re¬
maining monetary use, the "set-

1

e v e

1,*

foreign silver coins may be melted:
down again and shipped here, but
only if they are replaced by frac¬
tional money of some other kind,including perhaps paper notes,:
the disadvantages of which MrBrownell carefully detail s.
If:
there is

a

,

abroad

in

great amount of silver
monetary use as sub¬

sidiary coin, either it will remain
in such use, or it will be attractedIn neither event will it

here.

tribute

to

con-;

international

true

metallism.

>'

bi-;
V.

1

-

(5) One-country "international"*
bimetallism.—While the
of

aim

nounced

an¬

prosilver'
proposals is international bimetal¬
many

lism, their advocates are usually'
quite ready to accept something:
short of it, provided only the price'
of silver is enhanced. "Bimetal-'
lists" have various suggestions as,
to the ratio at which they want
silver pegged to gold—16 to 1 or:
the like—but I cannot recall one
who suggests taking as a bimetal¬
lic ratio the existing market ratio.-

Rather,
ratio

always

they

that

silver

lift

will

if you could not

the

at

current

readily

as

demand a
price of

the

its current

above

at

a

price, as
have bimetallism

price of silver
higher price.

as

%

Throughout his recent pamphlet,
I n t e rnational Bimetallism, Mr.,
Brownell

special emphasis,
"international," and,
pamphlet, Hard
Money, he develops at length a
line of argument which he calls
"supplementing gold by interna¬

on

the

in

newest

bimetallism"

tional

Yet,

lays

word

his

when

[bold

mine].'

I see it, the give-away is

as

he

that the

the fact

states

job can be done "by one or more
prominent nations." He suggests
States

United

the

Britain.

has

few

Just

as

and

Great

1930's the

in the

and

bimetallists

avowed

sil¬

quite content
mere subsidy to

advocates were

ver

in the end with a.

silver sellers, so in my opinion
important they today seek merely to insure
psychological value when men¬ and improve the existing, subsidy^
tioned in connection with mone¬ for they are well aware of the
tary and banking statistics. But congressional attempts to repeal
in this country gold is no longer the silver purchase acts now on
the individual's medium
of ex¬ the books. What in reality is be¬
tlement

thing

n

mining man Mr. Brownell
is rightly interested in the longrun

coin and therefore,

as

for

Mi\. price of silver above the present-

—

increase

an

use

bimetallic system.
course

ity is utterly inconsistent, v :/■

within a few
dwindling supply, of
gold, combined with rigid
reserve
requirements, w o u 1 d
put deflationary pressure on all
the monetary system si- The
a

..

_

world's

the

years

new

"silver using,"

are

of

more

here.

should be

Since the last real use for gold
omitting U. S. S. R. data. Despite
this important omission and de¬ is to settle adverse international
he states:''
spite the retarding effects of the balances, of which we have none,
The average Asiatic does not war on gold mining, the actual and since our gold stock is sev¬
aspire to the possession of gold, output in 1940 was 130% greater eral times as valuable as it was
which is beyond his reach. Sil- than the gold delegation had fore¬ when
gold coin still circulated
ver
is what he wants, because cast.
; ••
here, our $22,000,000,000
gold
silver is the gold of the masses.
stock ought to
last us quite a
Any post-war monetary system book data
while.
Foreign Commerce YearAfrica

still

much anxiety lest

(at the present price of gold) in

The

In

and

not

demand

internal

soon

silver-purchase

Brownell

predictions were not realized. The
(Continued from page 2260)
mine
production of gold was
must recognize the situation of
would be folly if we sought the
greatly increased by early de¬
these - people,
who constitute velopments Mr, Brownell could
panacea for the deep-seated in¬
approximately 1 billion human not foresee. And, within 3 years
ternational
economic
disequili¬
beings, or nearly one-half of the of his
brium
solely through monetary
prediction, China gave up
estimated
population of the the silver
policies."
standard, being driven
earth.
off it by the very American sil¬
Notwithstanding these views
Not
only
can
the
Chinese
and
Dr. Chen, this writer is quite will¬
ver-purchase legislation for the
Indians more readily supply their
enactment of which Mr. Brownell
ing to grant Mr. Brownell that
silver
wants
at
a low if fluctuat¬
there exists among the uneducated
so
busily worked. Only a few
ing
price
than
at
a
fixed
and
high
masses in India, China, and vari¬
years
later the Government of
one such as Mr. Brownell's $1.29ous
other peoples —such as the
British
India
found the people
an-ounce plan, but they can do so,
Indians of Latin America—a de¬
willing to accept a large reduc¬
in the future as in the past, with¬
sire to own silver. Some may de¬
tion in the fineness of the silver
out international bimetallism.
If
sire it as currency or as a store
coins.'
of value; others, primarily in ar¬ they do not ask for bimetallism or
Dr. C. O. Hardy, the well-known
for the silver standard, it is not
ticles of personal adornment.
economist who in 1936 wrote for
up
to
us
to
adopt
it
for
them.
In
Such
people, however, are ac¬
Brookings Institution a study
customed to changes in the price any case, Mr. Brownell seems to called Is There Enough Gold?, in
overstress the
economic impor¬
of silver and I am not aware of
1944 has the following to say on
tance of the Asiatic half of the
this question:
any demands from them that the
world's population.
In 1936—the
price be pegged through bimetal¬
All fears are over with re¬
last pre-war year in Asia—their
lism or otherwise.
The cheaper
spect to the adequacy of the to¬
international trade constituted
and more plentiful silver is, the
tal gold supply to meet- total
only 13% of the world's foreign

we

Thursday, June 1, 1944

THE COMMERCIAL & FINANCIAL CHRONICLE

2266

ances."

international

of

It still

has

bal¬

an

change or store of value, Even in
jewelry and dentistry it has been
losing out to other metals.

ing suggested, then, is protection
of these acts.
They are suggest¬

Mr. Brownell states that bimetal¬

ing not enhancement and stabili-■."«
zation of the price of silver by
true international action, which is

lism

unobtainable,

Stocks of silver

(4)

can

abroad.—

be launched with

an

esti¬

but

stabilization

and

mated

enhancement
of

the

world

6,000,000,000 ounces of
price by the United States Gov¬
monetary silver in the world, plus
an

estimated

5,000,000,000 ounces

of

nonmonetary silver that at a
sufficiently attractive price might
be sold by its present owners and
so become monetary silver.
As to
the theory that there exists a very

ernment

idea.,

alone.,

would

States
'

'•%

.

We have had
ence

Only the United
such an

entertain

one

recent experi->

with international

action

on

behalf of silver: The London Siln

Eight
old* silver which ver Agreement of 1933.
melted down and governments were parties to that
turned into money, Mr. Dickson agreement, which was devised by
H. Leavens, long a student of the Senator Key Pittman, of Nevada.
For the United
States, which
silver question and author of the The purchase of silver by five of
supported a great boom in the
book, Silver Money, in March this these governments tended to raise
1920's
on
a
$4,000,000,000 gold
year expressed a contrary view. the price of silver over a 4-year
stock, our present holdings cer¬ He
sees
no
"great likelihood of period.4 Most of the silver bought
tainly are not too little. Besides,
large additions to monetary during those 4 years was bought
since the 1920's we have found
stocks" from such a source.
by the United States Government.
various devices for economizing
also
Mr.Brownell
estimates
that The Mexican Government,
the use
of gold. 'So when Mr.
a party to the agreement, bought
ounces
of
Brownell says there is not enough there is 6,000,000,000
the second largest amount. And
gold, he surely canot mean here. monetary silver in the world. when the 4
years were up, the
There is in this country alone—
Have
we,
then, too large a
United States Government bought
according to the Treasury De¬
fraction of the world's monetary
from the Mexican Government its
partment — 3,193,000,000 ounces.
gold? Putting an increased value
full 4 years' accumulations, and
Compared with the
latter, we
on
the' world's
silver,
as
Mr. have
Leavens' estimate of mone¬ paid it a profit of 9 cents an ounce
Brownell desires, whether by in¬
to boot.
An international agree¬
tary silver in the world in 1933—
ternational or by United States
ment on silver could be obtained
4,940,000,000 ounces. On this basis,
action alone, will not correct the
apart from any changes in the today, only at our expense and
concentration of gold here.
would leave us holding the bag
past decade, there is only about
Rather, it will increase the exist¬
There is no demand from
I,750,000,000 ounces of 'monetary again.
ing idle concentration of the, bulk
silver abroad.
Most of our stock foreign governments for bimetal¬
of the world's silver here, a con¬
consists of bars or $1 coins stored lism, unless perchance the Mexi¬
centration itself the result of
can
Government has made one,
indefinitely in Treasury vaults.
earlier
silver-purchase acts.
In The smaller
unannounced.
part of our vast sil¬
other words, a higher United
In connection with Mr. Brown¬
ver
hoard
is
in
circulation
as
States Treasury price for silver,
fractional currency, plus a sprin¬ ell's willingness to see the United
under the device of bimetallism,
kling of dollar coins. Abroad no States institute bimetallism all by
far from correcting the concentragovernment I know of holds an itself, it is worth recalling that in
great

store

of

could be readily

-

3 From

the

Post-War

Role

of

Gold,

by

Charles

O.

Reserve

Bank, Kansas City, pp. 12-13., The

Monetary

Hardy,

Vice

Standards

York, January, 1944.

Presidents Federal

Inquiry,MN6;'*8,tINew

idle

silver

amount

of

hoard.

Whatever

monetary

silver

the

held

4 For
ver

abroad

may

be,

practically

the

whole of it is sure to be in active

details

Agreement,

Episode,
omy,

in

concerning the London Sil¬
see my article. The Silver
Econ*

the Journal of Political

October and December 1938.

Volume

159

Number '4286

THE COMMERCIAL & FINANCIAL CHRONICLE

the last century, while there was
still a chance to get an interna¬

tional agreement
the

States alone; ever since 1934, has
maintained- a
pegged minimum

price

bimetallism,

on

of

fact

western mining
interests and their willingness to
pressure

this

see

country do it all alone
European nations to step

led the

aside and let

The

.

argument
to

seems

for

the

silver."

and

the

world

The

price

of

silver has been controlled by the
United States Treasury ever since
it

commenced

operations

under

Amer¬

Congress can legislate into
the people of the world a desire

matically pegged the price of sil¬

for

silver.

really

If

this

meant

ously,

good

a

tained in

to

seri¬

to it is

con¬

in

editorial in the Wall

Street Journal

of

September

1942, which states:

)

The cessation of free coinage

;

i

United
■

a governmental action. The
rejection of silver as an ulti-

was

■

'

mate

price unit

the cause
action and

was

of the governmental

-

s

was

instinctive

an

reaction

of

the

people itself. The people
detached silver from gold as a

;

full

I

monetary

governments
that

and

metal

the

merely registered

decision.

*

*

*

#

Governments, in short, do not
make

-

k

metal

a

metal;

sciousness

..

a

true

monetary
people's con-

the

only

do that.

can

(6) A higher price of silver
through bimetallism. — That Mr.
Brownell has in mind a higher
price of silver is clear from his
pamphlets.". In(J Hard Money he
suggests $1.29 per ounce for sil¬
because

ver

readily

it

"would

fit

most

various United
States statutes." It would also, we
jnay note, help the
earnings of
"

the American

ing

Co.,

Smelting & Refin¬
Mr. Brownell, its

but

chairman of

the

board, does

not

mention that. The present price of

silver, which

was

established

by

Government and which rules

our

In the world markets because
the

are

we

residual

45 cents

buyer, is."only
ounce.. For years be¬

an

discount

a

States

dollar.

paper

high

on

It

the

and

movements

local

situations

the

The

as:

time.

limited

market's. estimate

—

but

not

should

pect the price of bullion or

ex¬

any¬

thing else in wartime to be the
all

whole

the

over

areas

when

world,

isolated.?

are

Referring to Britain's adoption
of the gold standard in 1816, Mr.
•

Brownell
rect

He

a

wants

the

land

adopted

bi¬

obvious

more

Government

sub¬

sidy, value which that metal does
hot unaided obtain in the market

place, is just
the

a way

We

dollar.

of cheapening

make

the

dollar

easier for silver sellers, including
"silver-mining interests to acquire.
If we are to supplement our al¬
ready immense gold stock arti¬
ficially, why not frankly inflate
in

that will not limit the

a manner

benefits of the dollar

cheapening

to

just those who have silver to
'sell?, (I am not here advocating

cheapening the dollar.)

Mr.

■;,

Brownell

to have

com¬

plains that the American Govern¬

metal.

■

•'appease* the
.bloc,

forbids

-under

Silver

passed

to

silver

unappeasable
the sale of

silver

present. conditions. To ob¬

tain the silver bloc's consent to

-temporary

war

measure

—

a

en¬

dorsed

by the Arrhy and Navypermitting the sale of only some
;of the Treasury's idle silver-buL
lion

metal-starved

to

tries

took

more

indus¬

war

than

year

a

of

.t'ons

occa¬

so

regretfully

were

by the greed of silver in¬
and

terests

its

aftermath.

'"the

orice

stabilized

tion.''

Yet.

silver

of

nor.

was

never

negsred by any na¬

within

three

nara-

rgraphs he admits "that the United
;

5 Sne

H°nrv

B.

Russell.

International

Mone^a^v Conferences, New York
don.

action

face

as

value.

Such

full-

"necessary.',' The obvious fact

are

is that people pay no attention to

intrinsic

In

value

Coins

sidiary

of

their

sub¬

in
this, country,
only country with

the

need

be

to

concerned.'

country a certain mini¬

every

amount

6 Mr. F»vy,,ne11 himself came. to

"rbierted t,o the price"

nnrt

ury

had recommended.




We

more

"value"

in

than is necesary would be
simply wasteful. If some back¬
ward people in a foreign country

them

do

trust

not

their

own

with

ness

to

step

in

matters. That is

and

or-

paper

could

and

and

other

for the nation concerned.

1878, 1890, 1934, and 1939.
followed our example.
;

No

of

one

Brownell's arguments for bimetal-'
lism is that it would protect the
of

the

"poorer classes,"

but his reasoning here is hard to
follow: The "poor man" argument
is

an

old

one

and

then

safely

loans

to

them

currencies"

thropic

enough.

tallism

Mr.

would

Brownell

says

we

avoid

"depriving most of
classes of the protec-

the poorer

Washing¬

7 See my article on
the Commerfial
and
of

Apr. 27, 1944,

the gold nremium in
Financial

a

Mrs.

Roosevelt, at her morning
conference, was asked her
opinion of Mr. Churchill's theory
that Spain's attitude in ignoring
preparations for the North African

factory

press

as

have

similar
not

with

course

been

as

satis¬

Britain's with Spain.

Although she was not comment¬
ing on Mr. Churchill's speech, Mrs.
Roosevelt

discussed

the

effect

on

Spain, and I
change."

either Great Britain
and

or

Germany

of

the United

fears

I

make

other

of

cannot

we

super¬

nations,

stabilize

to

'Ittink,

to

their

follow.

We

could do that quite as

safely

the

assist

to

United

States

in

solving the
very difficult problem
of London's blocked sterling for¬
eign balances." If it is so utterly
simple, why did not the British
originate the Brownell plan?
I
otherwise

relationship between the
proposal and the
questions of post-war reconstruc¬
see

no

bimetallism
tion loans

blocked balances.

or

Political

Mr.

pressures.—

Brownell states that silver "would

gold"

real

hard money as good as
and not subject like man¬

aged

currency

to "political and
pressures."
Well
of
all
things! And this from such a

When

close and-active friend of silver!

Long Distance Says-

Conclusion
;

The

one-country "international

congressional
this:

A

action

boils

in

down

unilateral

the

to

last

"Please limit your
That's

a

war

at

a

high, in
white

stabilization

of

the

price of silver sufficiently
my

metal

only

the lines

out

desire to own
stead

to

of

some

attract

to

the

who

reach
may

good suggestion to follow. It means
to

of

of it and in¬

the vaults

can

silver-mining

scrape, up

and sell.

are

crowded.

friendly, thoughtful act that helps the

other fellow—and then

some

day turns right

around and

helps

you..

of

silver the outside world and

our : own

Chronicle'

a

war-busy centers

still

the United States Treasury what¬
ever

It's

judgment, to put the

peoples

a

call to 5 minutes

simply

the world silver market after* the

sounds

philan¬
Through bime¬

relations

Jr

Bimetallism and security

analysis

"Poor man's gold."—One of Mr.

States took

relations Argentina. American-Argentinean

our

would have this country adopt by

matter

officials

aid.

rearrange
a

has

do

bimetallism" which Mr. Brownell

entirely

our

particularly irritated
who, it was
learned, gave Britain a free hand
with
Spain,
while the
United
Spain

American

political

busi¬

our

change in

Great
toward

are

the Silver Purchase Acts

govern¬

subsidiary coins

to
no

attitude

example, we need
sad experience

our

recall

other

put

the

lenient

but

lend-lease

will follow

only

value.

To'

of

answer

Also

quarters.

many

Britain's

As for the argument that, if we
adopt bimetallism other nations

be

up

may

and Lon¬

the Treas¬

sometimes

or

alone.

in

cost

to that minimum the
be made of any metal
at all and they will pass at face

iness; and

•coins

issue

an

in

,

of

subsidiary coins
is indispensable for everyday bus¬
mum

make

question that there had been

attitude

important

of

reason

adds, "It would become

value"

to

Minister's

Spain—his apparent lack
of interest in Spain's internal pol¬
icies—has been severely criticized

the foreign-exchange value of
the pound sterling in terms of
the dollar today, but only at much

18PS,

ton

by

for

interests

Again. Mr, Brownell states that

this

possible

currency,' surely it is not

raen-

that

Brownell

ment's

price of silver Mr. Brownell

note

the

.interests, and then the price was
fixed more than 40% higher than
the Treasury Department had re¬
commended.5 The changes in: the

should

makes

a novel* and special point of
supposed virtue, under his
plan of bimetallism, of subsidiary
coins having the same "intrinsic

want

Prime

most, because Russia has been oc¬
cupied, whereas we have not." '

We

successfully
or
unsuccessfully without bimet¬
allism.
Under
bimetallism, Mr.

'[■struggle* with congressional silver

sioned

•*..

(7) Other arguments—Subsidi¬
ary coins.—Mr. Brownell's treatise
.

we

the

that

of .1934,

the people's

The

toward

ma¬

States

enable

away

Although movement of

She did not define just what she
meant by Mr, Churchill's think¬

vised

again take

acteristic of Mr. Churchill."

the

don't think he wants to

and

which

note

I

general, she said, was "very char¬

over

in

the way he thinks

Sam would later change his mind

is

Act

issued,

coins

neutral

a

ica and many other nations would
tend to tie their currencies to the

"could

the

should

poor

that with bimetallism in force

gold

as

adopted bimetallism, Latin Amer¬

should continue fearful that Uncle

which

Purchase

the

protest
man.
In¬
a

loans.—Mr. Brownell's contention

and

the; buying
price? and has
'changed the buying price at times.

-at

of

any

voked

value subsidiary coins, he asserts,

strangely

offered

us as

that

gold and silver coins? Even if the
nationalization of gold were re¬

ment "will not freely sell [silver]

We

opportunity to hoard

an

dissatisfaction

role

peg

'

me

—

between inde¬
pendent countries they cannot be
tied by mere unilateral legislative

.

Or does Mr. Brownell want

behalf

recall

not

relationships,

.-

out.'

do

economic

the

us to confer upon silver, by
the device of bimetallism or any

Spain's

with Spain.

I

took

ing for 60 years, but she spoke
forthrightly with a slight touch of
sarcasm.
The Commons speech in

Spain," President Roosevelt

indicated

eign countries

with this situation. Currencies

"in the horse and buggy age." Yet
Mr.'Brownell wants us now to go

,' For

about

essential

drawn to the

conference

Tribune"<®>

"Herald

a

linked

right back to the horse and buggy
war
this
Government
age by adopting bimetallism.
kept the price of silver artificially
Mr. Brownell argues that sooner
high.',
or later "over centuries of time"
;
Incidentally, the suggested price
governments
and
their
paper
of $1.29 an ounce, high as it is,
moneys end,
but that gold and
is
modest
compared
with
the
silver survive
allsuch?vicissi¬
$1.75, $3.50, and $5 an ounce,
tudes.
If
bimetallism
is
being
suggested by Mr. Brownell last
offered as insurance against "the
fall in his pamphlet, International
demise of this nation,count me
Bimetallism.''"
fore

York

Washington bureau:

point, he remarked in

were

press

already the case in many in¬
Adoption of bimetallism
by us would have nothing to do

generally;
wars, Eng¬
gold standard,

the

At

1935.

his

is

prevailed
Napoleonic

after

and

1934

at

stances.

history."
1800

New

Whereas Mr. Churchill had said,
"I am here to speak kindly words

the price of silver until the silver
coins of more than a dozen for¬

dollar.

"cor¬

to

now

before

that

tells-us

metallism

us

accident of

mere

the

from its

that time this Government boosted

on

30

Churchill's

stead, when China officially pro¬
the threat of unconditional sur¬
tested, Senator Key Pittman invasion
compensated
for
the render of the Nazis. She said that
simply wired
Washington that shipments of wolfram shipped to
regardless of the terms of the sur¬
nothing must be done to interfere Germany. Mrs,-Roosevelt's cryp¬
render, the Germans feared more
with the prosperity of the western tic comment on Mr, Churchill's
than anything the rage of the per¬
silver States.
general attitude toward Spain sons freed from the now occupied
Bimetallism and a dollar bloc. was, "Mr. Churchill has thought nations.
Russia, she said, "will be
—Mr./Brownell says that, if we that way for 60 years and that's more bitter toward
Germany than;

United

the

on
one

in

bimetallist then

post-war depreciation of the ru¬
local discount on the naper
States dollar. No

May

on

Minister

the

for

bullion.

pee—a

rupee

Roosevelt

conciliatory attitude toward
the Franco government of Spain as voiced in his speech to the House
of Commons on May 23. Mrs. Roosevelt also at her press conference
the same day likewise dissented from the views of the Prime Min¬
ister, as to which we quote the following from advices May 30 to

war.-

melting pot and exported to

the

of

President

issued with Prime

Brownell is

Mr.

China

on

supply of
gold available on, the market;, the
abundance of rupee fuhds created
by expenditures of British and
American forces in India; agricul¬
tural, political, and military de¬
velopments; and the like.
One
might even conclude
that
the
price of bullion iif Bombay is the
local

everjt, the price of sil¬

Roosevelt Takes Issue With Churchill On Spain

today con¬ terial, such as wolfrani, to Ger¬
silver-using peo¬ many from Spain has been re¬
ple of China and India, I wonder duced, the President said in his
what he thinks of the depression judgment
Spain had not suffi¬
and distress which the greed of ciently reduced the volume of the
the American silver bloc inflicted shipments.
Saying he did not

For example, a premium on gold
in Bombay reflects, such develop¬
ments

I

the statute books.

If

represent

of

In any

cerned

reflect the, wartime
restrictions on bullion, trade, and
prices

other

Mr.

Americans.

already is being stabilized un¬
der the indefensible silver-pur¬
chase legislation which continues

the

on

classes"

to

possible

no

ver

abroad

needs to be understood that these

same

into

elsewhere

equivalent to

as

28,

and

refers

see

ver.

taken

India

the price

relationship
between their welfare or happi¬
ness and a stabilized price of sil¬

borders.

own

Instead,

stabilize

"poorer

by

can

Mr. Brownell cites the high re¬
cent quotations on gold and silver

ansewer

an

within its

ver

is

argument

be

If

1934. Moreover, every country
that ever had bimetallism auto¬

ican

gold."

and

Brownell

of

bimetallism

that

assume

gold
that

of

would

bimetal¬
of
thereby "satisfy the
needs of the poorer classes and of
silver-using peoples." This is all
rather meaningless.

the wasteful Silver Purchase Act

do it all alone.5

us

of
is

tion

lism

silver

2267

interests

BELL

TELEPHONE

SYSTEM

her

<

& FINANCIAL CHRONICLE

THE COMMERCIAL

2268

Thursday, June 1, 1944

-

then be approximately. $442 mil¬ tance toward offsetting the an¬
nual Serial maturities; as a: matter:
;
v..
retire¬ lions.--:
Earnings available for r Fixed of fact,.the Road might even be irt
ments of property and equipment
are
factors of no small impor¬ Charges for the lean years since- the position of retiring the entire
issue without .'recourse to" f inane-:
tance; use- of the capitalization 1929 equalled $528 millions, for
not without some

are

its

from

relief; cred^

abandonments

or

-

computing. Excess Profits 1938, $687- millions for 1935, $665
millions for 1934, $685 millions for
a cloak of consid¬
:erable relief; ability to purchase 1933 and $550 millions for 1932.
and retire debt at a large discount
Thus, it can be seen on the basis
from parity TAX-FREE through of present annual fixed charges*
the year 1945 is an allowance of plus the future effects only of
great significance; permission for known I.C.C. or Compromise' Re¬
Tax

(Continued from page

Revenues)

of between

billions!

,

a

.

2255)
from

rose

enues

to

-

.

$4%-'$6%

a

low of 40.8%

high of 59.9%.

Credits is

..

the

Aviation

Post-War

enthusi¬

by the early influ¬
of the succeeding Business

interrupted

the

Exemption the ability
draw down a portion of those

Profits Tax

reduction

in

Coast

Substantial

serial maturity needs
Collateral

issue

were

used as the

vehicle) could: be met
from "the
saving
in interest
financing

charges; as an alternative, in view
excellent' state: of finances

of the

and earnings

prospects, a series of
block-by-block redemptions could

light of the debt retire¬

and

ment

Atlantic

operation whereby a
portion of the annual
(IF a Serial

refunding

.

In

of

case

Line,1: the -Road's • approximate
$30,000,000 of Collateral Trust 4s1952 lend themselves easily to a

arriving at the Gross Oper¬
(2) Following the return of
ating Revenues level for the Post¬ railroad operations to private
war Period, consideration must be hands, the ratio quickly declined reorganized roads to figure their organization Plans, that a return
given to Mail, Express and Dining to 50.1% for 1921, and for subse¬ Excess Profits Tax based on the to ) the "low" earnings level of
and
1938
C&r
Revenues,
Incidentals and quent years 1922 through 1929 investment: of the predecessor 1932-1933-1934-1935
Passenger Revenues. In order to NEVER EXCEEDED 47.7% NOR company is a.boon enjoyed by the would show the total requirements
comfortably earned. Naturally this
carriers solely until this year;
pe ultra-conservative, let us leave FELL BELOW 46.1%. :. ,VA
but entirely ALL Mail and Ex¬
(3) This eight-year record of : Looking to the future, when observation is purely an "overall"
-4Vy
control was naturally earnings drop below the Excess condition.
press Revenues (ceding them to excellent
In

the

In

f

;.V

ing!: :

base in

annual

to
very easily eliminate the entire
asts),, at the same time discarding ences
Dining, Car Revenues and Depression, wherein for 1930 the large Excess Profits Taxes here¬ fixed charges so far experienced, issue within the reasonably near
note
the
Incidentals.
In connection; with ratio rose to 48.3% and further to tofore paid, in many cases results
outstanding growth in future, thereby resulting in a $1,v-"- '•
■«"
"■
x-J,-: y
;;:
;.V\y.r,.,v in many roads being able to show cash resources::■' J'..''.V•
Passenger Revenues, let us deflate 5.0.0% for 1931;
12-31-43
12-31-41Fixed
the current approximate $1.7 bil¬
(4) But, in 1932 the exercise of
Charges - COMFORTABLY
lions level to the 1938 level of control once more made its In¬ EARNED, even though the bal¬ Fixed and contingent

ALL

•

,

$500 millions — thereby
giving heed to the Aviation and
Omnibus Post-War zealots! •
around

*J| Thus, we would discard COM¬
PLETELY all Mail, Express and
Dining Car' Revenues, together
with Incidentals, and also yield
$1.2 billions of the present level
of
Passenger -Revenues, thereby

leaving only $500 millions (the
1938 depression-year rate of Pas¬

Traffic to be added to the
previously - arrived - at <. Freight
senger

minimum-maximum of

"Revenues

$41/2-$61/2 billions.
in other words

a

t

Post-War level

of Gross Revenues for the Class 1

of

Roads

between

,

the

limits

of

$5.0-$7.0 billions finally results."
See how this
amount checks
with other estimates, reached by

„

other bases of Statistical
approach! v
I\
•? ■
v;.
speaker holds. that
the

using

V-- The

-

MEAN of his minimum-maximum

levels, of $6.0 billions, is a figure
that should be used in future cal¬
culations, since it is held. to be
conservative—especially in
the light of the knowledge that

most

Mail| Express and Dining

not ALL

Car

Revenues

will

be

lost;

fur¬

thermore, it is inconceivable that
Passenger
Revenues
IN THE
will

Period
near

of

PART

EARLY

sink

the
to

Post-War

anywhere

the 1938 level!

j Comparison of such
potential
$6.0 billion level of Gross Rev¬
enues
with "highs" for years to
date since 1926, shows clearly the
fallacy of any doubt concerning
the

vitality of the railroad indus¬
try in the Post-War Period:
A

annual
approximate the

$6.0

would

billion

Gross
four-

fluence and

fluence of

a

—effective

together with the in¬
10% wage deduction

during

—the ratio dropped

.1932 and 1933
back to 48.4%,

following which the range for

"throwback"
or

prior to such
barely equal to

available

ance

even

much

as

\

Time

does

•,

•

permit

not

below

25%

as

the requirements.

the

Annual

Cash,

was

/

:
a

temp,

■

cash

invest,

Current

assets

Current

liabilities

current

assets™

and

spl,

depdsits^._^_i._^—

;

1™---.™--*

L

•

:

620,000,000

$3,011,000,000 "

$1,100,000,000

$4,468,000,000

$1,914,000,000

2,917,000,000

1,0.98,000,000

$ 1,551,000,000

$816,000,001

..A—

thor¬
Net

$11,200',000,£>0O

debt^______„_„,_____--riri_,?$l(i,100i00(),000
\ ..>547,000,000 '

fixed

1933-1937 inclusive never ough analysis of this subject, but
■"Estimated.
fEstimated on an annual basis currently.
■"
'■%
beyond 47.7%-45.4%,: de¬ let us examine just two Roads
In other words, notwithstanding «■
spite the return of 25% of the with a record for large past Ex¬
wage deduction on July 1, 1934, cess Profits Tax payments, as an a slash of $1.1 billions in funded 200,000 .annual reduction in inter-*
another 25% on Jan. 1, 1935 and example:. ■'
debt in the two years, net cur¬ est: charges,.; currently ;
running
the remaining 50%
As the first illustration, your rent assets have increased by $735 around $5,200,000: ■
on April 1,
;H:. ;
1935;
:
a
speaker uses the Chicago, .Burling¬ millions, while, cash has jumped
New York, Chicago & St.;Louis,
(5) In 1938, yet another recur¬ ton & Quincy:'for 1943 earnings $1.9 billions; "y looks to be in a
specially advan¬
This
brief
discourse
on
the
ring depression year, the ratio fell available for fixed charges before
tageous spot to be able to accom¬
"out of bound" for just the one all taxes covered Fixed Charges "Post-War Period and the Rail¬
plish a major refunding program;
'would
not
be
year — to 49.0% — influenced, no 9.05 times; coverage after all taxes roads"
complete a total" of
$47,746,000 of Combirted
It is indicated without I some; - comment; about
doubt,by the 7 % : wage rise ef¬ was 4.15 times.
First 31/2S, "Clover Leaf" 4s -and
fected in late 1937;that 1944 results will be approxi¬ what appears to be an inaugural
Refunding' 5 V2S, with 'annual in>
(6)
But
in
1939, the ratio mately; the same, if not a trifle tion of a refunding trend for rail¬ terest requirements of
$2,225,000,
dropped back to 46.6%, followed higher. If the earnings in 1945 road securities.
might reasonably be expected to
I do believe that the Pennsyl¬
by 45.7% for 1940, 43.7% for 1941, or 1946, or both years, decline to
be refunded, whereby IF a possi4
annual
Fixed vania Company "showed the way"
39.3%
for
1942 and 39.0%
for the extent that
ble
cohibinatiom-'-of serials and
1943—the1; latter showing notwith¬ Charges are just covered, the car¬ by refunding $46,000,000 of 4s into lower:
coupon
mortgage issues
a
combination of $20,000,000
standing the- wage increase : and ryback provisions of the Revenue
were used, there would result not
retroactive wage awards granted Act of 1943 would entitle the Road and $15,000,000 serials, carrying
only a sharp reduced annual in¬
late last, year!
to a refund of an amount which an average coupon of 1.96%; the
terest requirement but also pro¬
Certainly, this ability — outside would result in a coverage of annual saving in interest of ap¬ vide for
a; substantial portion of
of
occasional
lapses
until the Fixed Charges oil a recalculated proximately $919,000 (net of. tax the
seriaF4naturitiesv;::
"reins had been pulled in" — to basis after Federal Income Taxes effects) goes a long way towards
These; are just, a .few of the
govern the ratio of wages paid to of about 1.75 times. On the other meeting'
the
$1,500,000
annual
POSSIBILITIES among the non•>
gross revenues for the past
28 hand, were the earnings to de¬ serials. ■ ' ^
reorganization
issues;
there
is
cline for <:either or both of such
years is no mere "happening," nor
Then, the Burlington announced
even the prospect that among the
"chance showing"!
its program of refinancing $56,<
years so substantial that the avail¬
Contributing factors include a able balance for fixed charges 773,000 total of 1949 maturities, reorganized group, Wabash First
4s (currently selling around 104)
more intensive use during the re¬
equalled only 75% of the Fixed carrying 4% and 3%% coupons,
and
Erie
First
Consolidated
4s
cent years of Centralized Traffic Charges
(before recalculations), with a combination of $30,000,000
around
105)
Control, aluminum-alloy freight the carryback provision would al¬ 3V2S. and $10,000,000 of five-year (currently.; selling
might eventually be refunded into
cars, Diesel engines, together with low for a Fixed Charge Coverage Serials, carrying 1%%-' interest —
lower coupon-bearing issues. . 4 .
intensification
of the
policy of showing of nearly 1.50 times.
resulting in the substitution of a
r
Your speaker feels that the best
eliminations of curves and grades,
The Nickel Plate is used as the $1,200,000 annual interest require¬
example:
for
1943 the ment for $2,105,000 formerly. This summary of the Post-War Out¬
laying of heavier rail and treated second
ties,, strengthening of roadbeds Road showed-earnings available $905,000 annual interest saving look for the Railroads can be
and buttressing of bridges. Greater for fixed charges before all taxes
(again net of tax effects) goes a given by repeating the observa¬
years

varied

—

.

,

.

.

.

-

•

.

.

<

concentration along these lines

is

confidently expected in the Post-

Period; moreover, in this
connection, your speaker could
devote
an
hour
alone
to
the
War

sufficient to

cover

Fixed Charges

6.6

times, with the showing after
taxes equal to 2.64 times; on
the same basis
of recalculation.
all

long way, likewise, toward meet¬
ing the $2,000,000 annual matur¬

tions made

ities for five years.

tion

•

at

an

some

four weeks

ago

address before the Associa-^

of Customers Brokers at the

New
York
Stock
Exchange,
1945 or 1946, or
redemp¬ wherein he summarized:
"things to come" in the realm of both years, reduced to the point tion late this year of approxi¬ : "With no reconversion prob¬
innovations
in
passenger
travel where Fixed Charges were just mately $25,000,000
of debt, of lems,
no
inventories
which
OF
ANY
YEAR
TO
DATE
which he has witnessed with his earned, then the credit as a re¬ which
roughly $16,000,000
ma¬ MIGHT have to be liquidated in
SINCE 1929, excepting the two
own
sult of the
carryback
provision
tures
in
1949
and
eyes,
aside
from
that
which
$9,000,000
in
the
Post-War
Period
at
a
loss,
nor
War-Influenced years of 1942
he has heard about from qualified would show Fixed Charge cover¬ 1954.
This, no doubt, is part of excess plants which MIGHT have
and 1943! As a matter of fact,
informers, concerning the speed, age after Income Taxes of 1.40 that System's step-by-step pro¬ to be disposed,* of at a sacrifice;
such a $6.0 billion Gross show¬
comfort
and
probable
lowered times. By the: same token, if the gram of coping with its nearby with the prospects for as much as
ing would be somewhere near
fares in the Post-War Period.
earnings decline for either or both debt maturities, which include ap¬ four-six years of traffic levels
midway between the 1941 and
Management which in 1943 han¬ of such years was so drastic that proximately $24,000,000 of San somewhere between the 1942 and
1942 levels!!
dled DOUBLE the number of pas¬ the coverage was only 75% before Francisco
Terminal
4s
of
1950 1941 showings and earnings re¬
Naturally, the question will
senger miles carried in 1916, did recalculations, the carryback pro¬
(callable at 105) and $90,000,000 sults at satisfactory levels and, in
arise,
granted such
a
"Gross" so under the handicap of operat¬ vision would allow for a refigured of Central Pacific First 4s of 1949
keeping therewith, a further in¬
showing, how about the effects of
ing with only 44,000 passenger Fixed Charge Coverage showing (non-callable before maturity) — flow of cash,
concurrent with
higher costs
(especially wages) carrying cars (including Pullman) of 1.25 times.
a
total of $114,000,000 debt due added
debt reduction, the rail¬
and taxes on "net"?
in
1949-1950.
1943, contrasted with 62,606
In connection With the prospect
road industry seems possessed of
A real study of the factors con¬ SMALLER
CAPACITY units in for 4-6
I feel confident that it is not a continuing optimistic outlook.
years of Gross Revenues
tributing
to '! efficiency,
among 1916; more than which manage¬ at at least the 1941 levels, with too much to expect refunding ac¬
"In fact, the speaker can con¬
'others, will disclose the following ment also learned in 1943 HOW labor costs attuned to gross as in tion in the ;not-too-far-distant fu¬
fidently foresee an ..eventual; re¬
<-♦>
selected observations:
the past and tax rates being no ture on a total of as mdeh as $94,turn
of investor
confidence in
LocoRev. Ton
Avg.
worse, there is
the concomitant 000,000 of combined Louisville & railroad securities, to the extent
motives
Miles in
Capac.
No. of
Ton Miles
Miles
Collateral
3V2S - 1950,
influential factor of past debt re¬ Nashville
where once more they will com¬
Frt. Cars
Billions
Operated Frt. Car Employees Per Employee
Year
Operated
tirement and that yet to be ex¬ Collateral 4s-1960 and Refunding
65,595
40.9
1,647,097
220,000
2,329,476
362,444
mand the same high respect and
1916
254.037
*41,907
50.8
1,355,129
536,000
*1,746,995
727,048
perienced, the weight of attendant 4s, 4V2S and 5s of 2003—along the
1943
229,085
*As of Oct. 1, 1943.
of
the
Pennsylvania and compensatingly low yield as that
fixed charge reduction and, not¬ lines
<*>in the yesteryear;
financing
program, experienced
withstanding, effects of substantial Burlington
This efficiency should be very
to handle DOUBLE'the ton-miles
whereby present annual interest naturally,. war developments will
upbuilding of cash resources.
closely correlated with the record
transported in 1916, with only
Since
for 1916-1943 iof the Annual Aver¬
1941, * debt retirement requirements thereon of roundly provide occasional interruption in
1,746,995 freight cars (as of Octo¬
(net) has been an estimated $1.1 $4,000,000 might well be cut as this general direction
age Compensation Per Employee,
but the
ber 31, 1943), or 75% of the 2,329,much as possibly 50%.
which discloses:
billions,
the
current
total
of
overall trend appears positively
475 freight cars available in 1916,
With
the
splendid
Post-War
Funded Debt being estimated at
Hourly Wage Wage Per Year
at the same time using (as of Oc¬
onward!"
1916___^
28.3c
$892
$10.1 billions, vs. $11.2 billions at outlook for the automobile indus¬
tober 31, 1943) only 63% of the
1943—.
92.5c
$2,605
the
close
of
1941; in keeping try and thus the steel industry

showing of the pre-depression years 1926-1929, inclu¬
sive, AND BE THE HIGHEST
year

...

Were earnings in

The Southern Pacific last week

announced

call

the

for

.

.

,

•

._

The

greater

,

offsetting influence of far
efficiency of operations

against steeper hourly and annual
wage
payments, is INDELIBLY
proven by the following observa¬
tions:

period of 19161920,
inclusive,
which includes
Government operation, the ratio
(1)

In

of wages

the

paid to annual gross rev¬




locomotives in service in 1916!
This

new

will not
quickly!...

experience

have been forgotten so

therewith, fixed charges are down

Concerning taxes, much empha¬
sis has been laid on the steep inincrease.in accruals by the carri¬
ers
of late, and the stupendous
rises shown are perfectly true.
Debt
However, the speaker maintains
that

the

carriers

as

an

THEREBY

and

iron

the

ore

in¬

$620 millions to roughly $547 dustry, plus the present excellent
millions
(on an
annual basis) position of its treasury, what is to
now.
Great Northern from
Giving effect to only the stop the
known I.C.C: or Compromise Re¬ contemplating the substitution of
organization Plans —. and to .no possibly a relatively small amount
further debt retirement
Fixed of low-coupon serials for a total

Petersen With H. R. Baker

from

will

industry the annual Fixed
-

ip in the
pili.ioiis^ and

reduced

be

neighborhood of $8.0'
'

•

;Ch|'f|qs'^piiid
-I.N.q'J3,

-.id't

V'

-

of

$25,139,000 of Series "G" 4sthe annual interest saving

1946,

going a long dis-

(net of taxes)
v

:

t

r

j

:

(

■

-

(Special

LOS

to The Financial Chronicle)

ANGELES, CALIF.—Fred

J. Petersen has become associated
with R. H. Baker & Co., Bank of
America
was

Building.

Mr. Petersen

formerly in business for him¬

self in Los Angeles.

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4286

Volume 159

Hearing Oil NASDyv5% Spiead/f

!

:

(Continued from page 2251) •'

-

give a statement of the facts. We are,
pelled to resort to conjecture.

therefore, com-

Suppose a representative, or representatives, of the.
NASD conferred with a representative or representatives of

:

.

2269

Secretary Half Plans Discussions With Britain, Lehman Bros. Offer
Russia And China Gn World Peace And
Announcement

Security

made by Secretary of State

A

Hull on May 29
that the United States is ready to open informal conversations with
Great Britain, Russia and China on the establishment of an inter¬
national peace and security organization.
Secretary Hull indicated
that he was proceeding with the approval of President Roosevelt,
was

r

RKO Preferred Stocks
banking

group
headed by
Brothers and Goldman,

Lehman

Sachs
& Co. is making public
offering today of 57,337 shares of

Radio-Keith-Orpheum

Corp. 6%
preferred stock, cumulative, $100
sions would follow with Govern-'®*-———
par, priced at $91.25 a share.
7
ments of other United Nations.
Committee, swung to support of
Amounting to 44.7%
of the
In United Press accounts from the Secretary's program.
Radio-Keith-Orpheum
preferred
Senator Warren R. Austin, Re¬ shares issued and outstanding, the
the interrelation between the SEC, the Maloney Act, and the Washington May 30 it was stated
that Secretary Hull has never de¬ publican, of Vermont, said he was offering represents the preferred
NASD/ the interlocking duties and responsibilities, we don't scribed specifically the type of "very much pleased to have the stock holdings of Atlas Corp. in
think so.
r
^oV'AA'Aa
■■■'.;a\.
■: post-war
international organiza¬ announcement that Mr. Hull is go¬ the movie company and does not
i
.When so radical a step as the "5% spread limitation tion he is planning. But other of¬ ing to proceed with his negotia¬ represent new financing.
Atlas
tions and make the American pro- will
get the proceeds, less the
rule" was contemplated, in view of the supervisory power ficials in the Department have re¬
vealed that it is similar to the one posal."
aaaaa7- . .7'
commissions to the underwriting
of the SEC, we believe there was a duty on the part of the outlined
Senator Wallace H. White, .Jr.,
May 24 by British Prime
group, and it will still remain the
NASD to get some expression of the latter's views on the Minister Winston Churchill — a Maine Republican, said he ap¬ biggest single holder of R-K-O
subject.'/, * '.;■■■WV x-;
vau/aKaa.
a-'"'1" League of Nations armed with proved Mr. Hull's program so far securities through ownership of
"overwhelming military force" to as it had been explained to him. 1,329,020 of the corporation's com¬
Supposing further, the representatives of both
keep the peace.
These advices "I fully approve of the Secretary's mon shares, or 46.26% of this

"5% phi¬
losophy." Subject—the manner of such promulgation. ,
V
Is this supposition far-fetched? In view of the set-up,
the SEC.

Time—prior to the'promulgation of the

,

with full knowledge that a prospective "rule"

groups,

/

under its by-laws had to meet the test of a vote by the
NASD membership, agreed upon the establishment of
the "5% philosophy" as an

.

a

"interpretation" rather than

"rule," because all felt that the "rule" would not sur-

vive such test. ■ v,,;'

/

countries named, informal discus¬

.

.*•

;

and tha* in addition to the three

'7'aaa''a-'

.a

added:

tion

the

follow

•

outlines

7 ";aa

League: '
world

council

endowed

nations

Supposing this by-pass was the subject of a sub-rosa
understanding in the hope that the facts may not come toy
light.
Continuing our speculation on future events, if these
suppositions have any foundation in fact, then the hearing
on the
"5% spread philosophy," when it comes, promises
some interesting possibilities and we believe more than one

and
maintaining

powers

A

of

of

the

to arrange for

cussions good will
Senator Guy M.

in

would

which all
equally
as a world
be

court of international

justice.
the

as

of

machinery" which
the new international organization
face will be red before all of it is over.
should-have. The key to it will be
We have already been notified by the attorneys for the
the
allocation of power
to the
"Securities Dealers Committee " that our Poll on the "5% world council making it possible
rule" will be subpoenaed. We have no objection to giving for such a body to call upon the
the result of that poll for the nation and by state, but, will military forces of the great powers
for the suppression of future ag¬
claim privilege with respect to the individual ballots, so
gression.
77v7Va'V-.-'
that there may be no reprisals, and so that the balloting may
Pointing out that it was made
be secret as intended.- We, however, will be prepared to known by Mr. Hull that the "first
phase" of his talks with the Sen¬
give competent testimony of the safeguards taken to insure ate Post-War
Advisory Commit¬
accuracy of the results.
tee on Foreign Policy has been
*
Our task as a witness will be a simple one.
concluded, Associated Press said:

5% set-up,

of whom participated in the
have reason to believe, will meet with

we

considerable

discomfiture.

There will be

a

lot of tall

explaining to do, and it requires no expert crystal gazer
to foresee, that the subject matter of some of it will
deal with our current "suppositions."
"

;

How about the Securities and Exchange Commission?

■

crat, of Iowa, said, "I think the
rather
clearly
sum¬
to

ences

the

are called upon to hear and determine
5% controversy took part in conferences, if any, which

that "philosophy" and had a share in advising
clearly they are disqualified from acting in an
appellate capacity. To do so would be to sit in appeal on
one's own judgment.'•
•'■■S
>

gave rise to
its passage,

Here is the evil of SEC and NASD inter-relations.

As

auxiliary policemen, they have the duty of cooperative
strategy, whilst one has appellate jurisdiction over the other,
in matters where the policy involved may have been fixed
by both. '■
■.*■
f • ; :• •.■:,
■ ./•.'>aa.-;'.V
:v'"•' ■ -a a
THERE IS YET TIME FOR TH(E EXERCISE OF
,

COMMON SENSE.

THE FEELINGS OF SOME WELL-

INTENTIONED, BUT SHORTSIGHTED PEOPLE MAY
BE SPARED, AND THE ENTIRE SECURITIES IN¬
DUSTRY SERVED BY THE REVOCATION Ot THE
"5% SPREAD PHILOSOPHY."
THE

BOARD

SHOULD

EFFECT

OF

THE

NASD

PROMPTLY.

FORESIGHT, AND
DEMAND IT. THERE WOULD THEN
BE NO NEED FOR AN EMBARRASSING HEARING.

FAIR DEALING,
,

its

ciety

of

Failing in this, the Board of Governors in the future
by hindsight, that it had exercised more foresight.

White & Company, Mississippi
Valley Trust Building, St. Louis,
Mo.
issued
an
have
interesting
comparative table of insurance
and bank stocks, giving liquidat¬
ing value as of December 31st,
1943, approkimate offering price,
indicated annual dividend includ¬

ing '"extras, approximate yield at
offering price, age of company,

Attractive Situations
-

Ward & Co., 120 Broadway, New

York
lars

City, have prepared circu¬
on

several

situations

which

offer attractive possi¬
bilities, the firm believes. Copies
currently
of these

circulars, on the follow¬
ing issues, may be had from Ward
& Co. upon request.,
Du

Mont

Laboratories

during which

dividends have been paid.




Merchants

for

each

The

share.

done

has

option of the corporation's board
of directors, in whole or
at any

time at $105

in part,

share

a

accrued dividends.

tion has set up a

10%

of consolidated net earnings

after

Post-War Financial Conditions in

England."

preferred stock dividends.

'

:

■

On

meetings

held

are

at

of shares for retire¬

acquisition

sion will speak on jet-proppelled
aircraft.
■■
a,a 7-7777
■

at

ment

$100

56

a

maximum

a

price

THE

EQUITABLE

LIFE ASSURANCE SOCIETY
OF THE- UNITED STATES
393 Seventh

When-

international

an

Avenue, New York 1, N. Y,

Notice of Nomination of Directors

submitted

be

to

for

Notice is

agree¬

at, that will have

•

approval on
A

its merits.

.

Hull's
May 29 follows:
Secretary

hereby given that in accordance with the provisions of the
lnsufance Law of the State of New York the Board of Directors of The
Rquitable-Lifp, Assurance Society of the United States has nominated the
..following named persons as candidates for election as Directors of said
Society:

of

statement

HENRY M.

of the informal
conversations with the eight sen¬
ators has been

FRANCIS B.

on

the general

principles,

an.

J. DODDS, Pittsburgh, Pa.
; /
a
,• . aa.7aaY; :aa.
Member, Reed, Smith, Shaw & McClay.
' - av
v

international

FRANKLIN SPENCER EDMONDS, Philadelphia, Pa;
Counsellor-at-Law.

.

accordance

contained
nation

the

in

declaration,

the

?

Connally

am

definitely encouraged and

discussions

with

Great

on

this

Britain,

sub¬

v

Russia

FRANK R. McCOY, Lewistown, Pa.
aa

'

and China and then, with govern¬

:

"Meanwhile,

ther
the

I shall

discussions

"The
will

a

and

a'a

a'

•

door

of

\

be

wide

Chicago, 111;
Investments. '
''aaaa;

■

President of the

a

/'

.

^"'a-a'aa'

i
;
:

A certificate of nomination of the said candidates has been
■

tion."

with the Insurance

'

•

'

duly filed

Department of the State of New York.

The annual election of Directors of The

Press

A.

Society.

York, N. Y;
President, The North American Company.

at the Department of State,
especially when any phase of the
planning for a post-war security
organization is under considera¬

Associated

"

EDWARD L. SHEA, New

open

here

From

.

THOMAS I. PARKINSON, New York, N. Yi

non-partisanship

to

a

Counsellor-at-Law.
'

V

continue

v

a; :

JOHN LORD O'BRIAN, Buffalo, N. Y.

both-parties in
Houses of Congress, and

with others.

Maj. Gen. U. S. A., Retired.
:
President, Foreign Policy Association.
STERLING MORTON,

have fur¬
these

of

leaders

two

with

7A;7.

:

RICHARD W. LAWRENCE, New York, N. Yj
APresident, Bankers Commercial Corporation.

proval of the President, with in¬

ject

'

KELLOGG, New York, N. Y.
President, Edison Electric Institute.

ready to proceed, with the ap¬

formal

CHARLES R. HOOK, Middletown, Ohio
President, ,The American Rolling Mill Company.

CHARLES W.

larations made in this country.
"I

Member, Edmonds, Obermayer & Rebmann.

a

four-

Moscow

resolution and other similar dec¬

am

Counsellor-at-Law.

A,;;'

a-

and security organization in
with
the
principles

peace

Company.

ROBERT
a.-Aa. v'-A.

questions and plan§ relating to the
establishment of

'

DAVIS, Jr., New York, N. Y.

Chairman of the Board, United States Rubber

concluded.

"We had frank and fruitful dis¬

cussions

ALEXANDER, New York, N. Yi
Member, Alexander & Keenan.

Counsellor-at-Law.

"The first phase

Equitable Life Assurance Society

of the United States will be held

advices

New York 1,

May 29 as given in the New York
"Times" we take the following:

N. Y.,

on

at its Home Office, 393 Seventh Avenue,
December 6, 1944, from 10 o'clock a.m. to 4

o'clock p.m.,
at
election
Class of the Board of Directors, are to be

ayd

Collier

•

said

twelve Directors, constituting
elected for

a term

from

January 1, 1945. Policyholders whose policies

force

on

one
of three yeais

or contracts are in
the date of the election and have been in force at least one year

prior thereto

are

entitled

to vote

in

person or

by

proxy or

ALEXANDER McNEILL,

May 31,1944.

....

of

accrued divi¬

share plus

dends.

Broad Street at 12:30 p. m.

This

by directors for

fund may be used

Monday meeting, Geoffrey
Smith of the British Supply Mis¬

All

preferred stock

continue with it.'

ment is arrived

plu£

The corpora¬

retirement fund, consisting of

Behrens, President of Ocean
Trust,
speak
on
"Present and

to

him

desires

and

pre¬

be redeemed, at the

may

ard

evi¬

"A";
Distilling;
CrowellSecretary Hull's discussions with
Publishing; P. R. Mallory;
Senate
subcommittee
were
Copies of this table and also a General Instrument; Long Bell the
year-by-year accumulative record Lumber Co.; Great American In¬ generally frank and as detailed as
of
Home
Insurance
Company dustries; Mid-Continent Airlines; p.lbhs, can be at this stage, it was
showing assets, premiums written,, Massachusetts Power & Light $2 learned*.'tonight. A clear majority
losses
paid, and dividends for preferred; Majestic Radio: Mag-. ;q3f; tbb01ejkMfman group, headed
ninety-one years may be had from navox Corp.; Brockway Motors,5 b^fch^fmmn Tom Connally, Tex.,
of the Senate Foreign Relations
White & Company upon request.
and American Export Airlines.
and number of years

vote

will hear Leftenant Colonel Edw¬

that it approved
generally of the preliminary work
he

en¬

are

understood,

other

Ins, & Bank Stock Data

holders

confer¬

our

meeting to be
New York So¬
Security Analysts, Inc.

did not commit itself to
specific line of procedure or
to any particular kind of organi¬
zation but rather told Mr. Hull, it
is

con¬

the basis of one

on

luncheon

ments of other United Nations.

will wish

Preferred

1947.

N. Y. Analysts To Hear
At

is

share

before April ,11,

or

on

dently

THIS REVOCATION,

OF GOVEHNORS

stock

titled to vote

present time."

any

If its members who
the

Committee

Senate

:<

mon

statement

marizes the results of

preferred

vertible into eight shares of com¬

Gillette, Demo¬

.

The

Each

come."

held June 1st, the

That has been described

Other witnesses, some

issue.

na¬

from the dis¬

ferred

body

states

"minimum

tions and I hope that

peace.

represented to serve
assembly of nations.
A

old

the

77.7.; ■ *
major
with adequate

means

general

member

organiza¬

being considered would

now

A

plan to discuss it with other

;

of the

structure

The

by mail.

Secretary.

2270

competition

Regulated Monopoly Or
Competition In Transportation
(Continued from page 2255)

tion, confusion and inconsistency

flying certain to expand sharply,

must

post-war. And both pipe-line and
water transport have been ma¬

persist,

at heavy

even grow,

cost to all.

Fundamental to that action is

a

clear understanding as to what in¬
terest is, basic in transport. There
times when

are

that

emphasis suggests

the

prime purpose of trans¬
port is to provide profitable em¬
ployment for capital—that of first

terially extended, commercial and

private services being offered. If
we choose monopoly, it would be
essential that all for-hire services,
at

least,

be

to a single
regional or
must obviously

subject

control—so monopoly,

national in scope,
at

minimum

a

embrace

all

rail,

significance is a fair return.
highway, air, water, and pipe-line
Again, there are times when em¬
facilities devoted to public use.
phasis suggests that the most im¬
But could such monopoly permit
portant end to be served is low
even the I private
carrier to con¬
rates to users, quite without re¬
tinue free of major restraints—or
gard to the effect of such rates
refrain from strong and harrying
upon
other groups at interest.
And there are times,;increasingly efforts, at least,, to impose those
restraints?
frequent in recent years, when it
Management of a transport
might appear that the basic func¬
tion of domestic transport is to monopoly,
even though but re¬
provide employment for more and gional in scope, would experience
more
at steadily rising rates of great difficulty in its efforts to
utilize each type of transport to
pay.'
■
;oC
maximum advantage, alone, and
What is the basic function of
in conjunction with others. Except
our system of transport, then? The
as such enterprise evolved slowly
answer
to
that
is
surprisingly
and
experience in management
simple: public service. Be it in
were accumulated, it is quite cer¬
peace or in war, transportation is
fundamental: its importance is un¬

likely to be over-stressed.

Stated
broadly, the public is entitled to
that

maximum

service

at

mini¬

rates

which, with due re¬
gard to the state, of the art, is in
mum

the

long-run feasible., Rates
as to
deny an adequate

low
turn

so
re¬

capital invested or an

upon

for a
period serve the interest of . a
major segment of the public, but
a day of reckoning comes.
Such a
day is inevitable, too, if investor
or worker, or both, profit exces¬
sively at the expense of the users.
The body politic, not one nor sev¬
eral special-interest groups, must
adequate

be

wage

scale

may

served.

.

vr

This is quite as true, when ap¬
plied to types of transport as those
special-interest groups. Too often,
in discussions of policy, the mat¬
ter of vital concern might seem to
be preservation and promotion of

transport by rail, or by highway,
or by water or
air, even pipe-line
—that all other considerations

are

but

secondary.
Yet here again
public service, not special inter¬
est, should control; except as a
particular form of transport serves
that public interest, it loses its
for

being. No modern form
of transport has more of a vested
reason

interest than the Conestoga wagon,
the stage coach, the pony express,
the flat boat and batteau.

or

I

Thursday, June 1, 1944

THE COMMERCIAL & FINANCIAL CHRONICLE

am

asked to consider regulated

monopoly

versus
competition —
and, in event I reject monopoly,
manner in which competition
should function. Obviously, choice
again must be made upon the
basis of broad public interest. Pre¬
liminary to judgment, let us ex¬

the

amine the forms which monopoly

and competition may take.

operate in great numbers.
mercial air

attained

a

Com¬

transport has already
considerable

with both commercial and

it has in the
over

past, in losses to all
period of years.

a

alternatives

As

the

to

current

policy, I shall mention two other
quite diverse plans. One would
involve unification of particular
types of transport agencies—the
regional consolidation of railways,
perhaps, and unification by type
of motor, of water, of air.
This

line,

or

For

air.

me

the

choice

upon

eco¬

nomic grounds between monopoly
and

competition

stature,

transport

private

upon




result in demon-,

may

wastes.

sometimes be

so

convenience

of

That

waste

may

great, or the in¬

competition
so
public, as to justify
resort to monopoly with its dan¬
ger of stagnation, its threat of in¬
creasing inertia. Because of the
serious to the

excessive

wastes

and

inconven¬

iences of competition in the local

utility field, monopoly has there
been accepted as proper,' as
in
telephone
and telegraph: mon¬

in

the

field

of

falls, unhesitatingly,

the latter.

I recognize that

who

stood

that platform,
public life, now ad¬
heres to the principle: Rather, he
seems to advocate competition so

sharp

to approach, in the minds

as

But
and

perhaps the

one

advocates

of

ship

operation

and

one

later ones,

has attacked the .rail¬
bitterness characterdays or. of Popu¬
lism. The gamut of his charge is
broad, and skeletons are vigorously rattled, but of concern here
with

ways

quoted,
of the most distinguished
most

government

owner¬

of

railways
was the late and beloved Joseph
B. Eastman. Appointed to the In

'■!

Vice-President, specifically
address and incidentally in

The
in

;

7

••..

the

under

trade

of

Sherman Act.

'many / destructive.

of

restraint

as

upon

and is still in

,

a

istic of Granger

touch

that

assertions

his

are

competition. Briefly
stated,
he
asserts
that" public
with
a background
as public ad¬
transport is again being brought
opoly, subject generally to close
under
monopoly
control,
and he
regulation to protect public in¬ vocate, with accurate knowledge
of Morgan-rMellon exploitation of enumerates specifically the
terest.
'
"
evil
No
convincing
evidence
has [the New Haven, and approaching consequences; excessive rates-;
been adduced to show that, under the problems as an idealist,-Mr. control of rates that denies to the
Eastman was for many years the public the benefits of more effi¬
competition, the wastes in the
cient and cheaper forms of trans¬
field
of
transport
exceed
the respected spokesman for the ad¬
vocates of this program. Yet, after port; discrimination against major
gains.
Furthermore, it is clear
that many of the wastes, to which years of experience and the bene¬ geographical areas; extension of
fit of a broader knowledge, he're¬ rail control over newer forms of
attention is drawn by those who
challenge a competitive policy, fused as Federal Coordinator of transport to create a "transporta*
to
recommend tion monopoly"; and development
could be reduced sharply by Transportation
of industrial monopolies, fostered
changes in that policy falling far government ownership and opera¬
"monopolistic conditions * in
short of monopoly. As against the tion of railways as a solution of by
the "railway problem" when the transportation."
The essence of
wastes condemned by many, and
:

even

those

under

a

regime,

Commerce

terstate

curbs

upon

Commission

...

that

more

are

might continue
logical competitive

the gains that may be

expected to flow from competition

through the years: gains to pro¬
ducing groups, gains to consumers
of goods, gains to the public at
large, Simple it is, and this has
been done by the many who de¬
tain serious errors would be made,
light in the finger of scorn, to
the
public "paying the piper."
picture the evils of competition;
But
monopoly in the field of discrimination
among persons and"
transport would raise soon, per¬
places and duplication of services
haps at once, the question of own¬ are
conspicuous charges. Less evi¬
ership.
Should that ownership
dent, but highly important among
continue in private hands, or be
the gains, are reductions in the
vested in government? The reso¬
level of rates, stimulation of en¬
lution
of
that
question
cannot
terprise, and improvement
of
with certainty be known to us, but
service.
;<y.■!::?7;v: ■':7.
assuredly a long step would be
Perhaps most obvious of recent
taken toward government owner¬
ship of transport if the principle gains is the advance in railway
service under the spur of highway
of monopoly in that field were ac¬
cepted.
While regulation might competition. A steady but slow
advance in railway service re¬
accomplish much to overcome and
sulted under the stimulus of intercounter certain dangers of private
monopoly, it is improbable that railway competition. Spurred and
major goals could be attained ex¬ inspired by highway competition,
cept as the regulatory body as¬ however, railway service has im¬
greatly within h
brief
sumed broad managerial functions proved
—with a consequent deterioration span of years: quality of service
as
well
as
speeds
have
been
in the strength of management
and further drift toward public sharply advanced. Highway com¬
ownership. Monopoly of modern petition has been financially
transport presents some particu¬ costly to the railways, an eco¬
nomic "hair shirt," but it has been
larly disturbing problems.
helpful, too—not the least of its
But what forms may competi¬
services being to make a larger
tion take? Obviously, it may con¬
portion of the rising generation of
tinue
along present lines with
railway executives more defi¬
little modification: some hundreds
nitely transportation, instead of
of railways of varying economic
merely rail, minded.
and financial strength, thousands
Upon economic grounds,
we
of
for-hire
operators upon the
have rejected monopoly. What, if
highways of even more widely
varying strength, water carriers, any, is declared public policy with
pipe-lines and airlines may con¬ respect to monopoly as against
tinue without major change the competition in the field of trans¬
struggle of the past fifteen years. port? To that question the answer
Such continuance will result, as is unmistakable: monopoly stands

Mon¬
opoly, as here used, I interpret to
mean
monopoly in an economic
would
be
followed
by
unre¬
sense,
rather than to
connote
"bigness," or to constitute an epi¬ stricted, even compulsory, com¬
thet. Such monopoly of transport petition among types of transport.
A second plan would, in sharp
might be built upon a regional
basis, or it might be national in contrast, instead of arraying type
against type, permit and encour¬
scope; some, who stress the wastes
of competition and the possible age a coordination of types, thus
savings of unification, envision an making possible a transportation
increase in those savings as the service to users, as against the
unit is enlarged; others, fearing specialized and restricted service
that excessive size will occasion any single type of transport may
offer. Under such a program, the
inefficiency or being merely
timid, believe monopoly should be competitive transport systems de¬
veloped would be built largely
limited in scope geographically.
about the railways, and logically
Thirty, even twenty-five years
so; our railways are today, and for
ago,
the one form of domestic the
predictable future promise to
transport of consequence was rail;
remain,
the
major
agency
of
no
effective
competition
was
domestic
transport, and private
faced, except in restricted areas
capital invested in them materially
served by water. Today that situ¬
exceeds that invested in for-hire
ation is wholly changed.
Active
and aggressive competition func¬ service by highway, water, pipe¬
tions upon the
highways, where
..both for-hire and private'vehicles

strable

rails

were

nadir.

in

sore

straits and the

for

outlook

In

private control at its
answer
to a question

concerning his stand, Mr. Eastman
me some years ago, "Gov¬
ernment ownership and operation
said to

does not

seem

tion now."

to be

a

sound solu¬

Then he added with

a

smile, a smile both humorous and
wry, "But I'm afraid I've been a
great disappointment to some of
my friends."
•/
While
never
disavowing for¬
mally his belief in government
ownership qpd operation of railways, he ceased to become an ad¬
vocate, and the small group of
adherents to this plan have in re¬
cent years had no genuine leader.
.

.

,

Indeed, I think it can be safely
said

that

this

group

grows

pro¬

gressively smaller as other forms
of domestic transport develop—as
competition
has
sharpened,
as
regulation in public interest has
become more effective, and as the
problem
of
transport
becomes
progressively complex.
The advocate of a national rail¬
way

monopoly under private

own-*1

ership ahd operation who has won
hearing was one Nathan
Amster.
Some twenty-five years
widest

his so-called Amster Plan
gained adherents among both po¬
litical leaders and economists, but
ago

it

was

brushed aside without con¬

sideration when action

taken

demand

Vice-President's

the

in

competition upon a
broad front, with, seemingly, all
those forms of cooperation barred
compulsory

which have contributed to stabil¬

ity of rates and all coordination of
different types

ities-suspect.
,

77

of transport facil¬
/./v, /;:■ 7
■

An influential member of Con¬

gress/in

a

menting

upon

upon

which

recent address, > com¬
those limitations
uncontrolled competition
the

from

flow

certificates

of convenience and

necessity, said,
"I think there is a very serious
question as to whether or not such
(as imposed by adminis?

limits

trative

action) have not already
rigid and whether we
need more transportation

become too
do

not

enterprises, rather than less. . . . f
simply suggest that possibly the.
Interstate

Commerce

Commission

have gone farther than nec¬
essary "in discouraging the entry
of new blood into the body of our

may

transportation system." :
7 /
Multiplication,
not consolida¬
tion, would seem to be the de¬
sired goal—and specific comment
by this gentleman upon proposals
to
consolidate railways suggests

opposition.

underlying

Sharply

is he, too, of any
ment toward coordination
critical

various forms

of the

of transport under

ownership

common

move¬

—

though

by the Congress in 1919 and 1920,

friendly to such coordination un¬
der
voluntary
agreements that

and

safeguard

soon

was

More re¬

disappeared.

cently Mr. Carroll Miller, member
of the Interstate Commerce Com¬

public interest,
to' how such

albeit

indefinite

as

ments

to be effectuated.

are

agree¬

Two

proposed the consolida¬ attitudes seemed to dominate this
tion of railways upon a national speaker: a fear of monopoly or ap¬
basis under private control, but proach
thereto in the field of
the proposal made no strong im¬ transport, and a belief that, in
public interest, more competition
press.
" V.
U'"-,
Consolidation of railways into is desirable rather than that now
a
single national system, under existing, or less.
condemned—even the word is one
Another member of Congress in
private ownership and operation,
with which the demagogue can
a
position of importance urges
may well be dismissed as unac¬
effectively-conjure. True, during ceptable to the public, and there is legislative action that would bar
the half century past there have no doubt but that a
monopoly of any one type of transportation
been strong advocates of mon¬ all
types
of transport in
the agency from control of another
opoly in the form of government United States under private direc¬ type. Not only would he apply
ownership and operation of rail¬ tion would be even less accept¬ this principle in the future, but
ways.
Some advocates of this able, hoWever much regulation. he would revoke all actions al¬
policy were influenced strongly, Similarly, there is small likeli¬ ready taken to unify diverse types
doubtless, by the seeming success hood of public willingness to ap¬ of operation under common own¬
of government ownership and op¬
prove government ownership anfl ership. A third member of Con¬
eration in certain European coun¬
operation, upon any basis or un¬ gress in a position of equal im¬
tries; some were actuated basic¬ der any plan, of all forms of portance has introduced a bill to
ally by self-interest, perhaps, as in domestic transport. In principle bar all other types of transport
the case of the Plumb Plan, ac¬ and
as
a
practical possibility, from common-carrier air opera¬
tively advocated by the railway therefore, a monopoly of trans¬ tions by making it unlawful to is¬
Brotherhoods

some
twenty-five
Still others were led to
advocacy by resentment
against conspicuous abuses, by an
idealistic approach, or by a mere
bookkeeping judgment that ig¬

mission,

port

may

well be dismissed un¬
by some unforeseen

years ago.

less

its

circumstances.

revived

as

a

force operating in

public in¬
presentation is pre¬
by time, so certain con¬

terest. A full

cluded

An

early champion of govern¬
ownership and operation of
railways was William Jennings
Bryan. Whether intellectual con¬
ment

viction

helpful

or

desire

political

to

discover

a

issue

prompted
his advocacy, we may not know,
but his' proposal gained accept¬
ance
from
a
mere
handful, so
failed completely to gain status, as
issue. Later, government own¬
ership and operation of railways
a major plank in the plat¬
form of an independent candi¬
date for the Presidency! There is
no
evidence, however, that one
an

became

monopoly,

it remains to examine competition

nature,

clusions

must be

offered without

detailed analysis upon

which
those conclusions rest. But, first
I desire to draw your attention
to some significant statements and
the

actions which merit consideration
in

connection

certificates ' to

Aeronautics

With the rejection of

nored essential elements in human

sue

with any

study

of

Board

And>
the Civil

them.

without mandate in law,

certi¬

refuses

air operations to
operating surface
rail,
highway,
or1

ficates covering

carriers

now

transport
water. 7 7 7

—
.

7

'.

-

.

With the acceptance of competi¬
tion

as

a

controlling principle in

the field of transport, a

basic ques¬
depend¬
ence be placed upon competition
to safeguard all parties at inter¬
est, or is regulation in some form'
essential? Regulatory cdntrol was
forced
upon
the railways: the
forty years from 1870 witnessed a
continuous struggle, with only an
occasional and brief truce,- be¬
tween the railways and a deter¬
tion

arises:

shall

entire

field of transport.
The Anti-Trust Division, United
States Department of Justice, has
been of late most aggressive in its
attacks upon all evidences of co¬
operative action among agencies i mined public,' with the former
of transport and upon all other-1 being driven steadily backward
arrangements affecting transport J until by the Mann-Elkins Act re¬
that might be interpreted by them strictive control was largely compolicy in the

*

Volume

In striking contrast, how¬
have been extensions of the

plete.
ever,

Interstate Commerce Act to

cover

other types

of transport. Said the
Interstate Commerce Commission
in 1938, 'The Motor Carrier Act,
1935, was favored by the organiza¬

tions

of

both

the

truck

and

bus

portunity for the effective utiliza¬
tion of each type of transport falls
short

of

public

interest.^ And,
since the program here sketched
does fall short, it should be re¬
jected.
A

■

*

second

that

course

be

may

industries, and since its passage
our
rate-making power s have

has been
followed during years just past—
an
ill-defined
course,
lacking

been invoked much

clear

the

motor

than

more

often by

themselves

carriers

pursued

is

which

that

and marked by con¬

goal,

fusion and conflict.

Under the In¬

by the shippers.

Commerce
Act
as
Similarly, terstate
the air carriers were urgent in.
amended, provision is made for
their support of the Civil Aero¬ the consolidation of railways and
nautics Act of 1938.
These two for the unification of highway op¬
acts provide for the motor car¬ erations—yet with respect to the
riers
and
the
air
carriers, re¬ latter, at least, the Department of
spectively, a system of regulation Justice has shown clearly an un¬
which is, if anything, more com¬ willingness to accept Commission

prehensive

than

that

which

has

been

provided for the railroads."

And

it

riers

*was

by

the

established

that

water

gave

car¬

strong

support to the timid extension of
Federal

interpretation

of

public

interest.

Provision

is made, likewise, for
acquisition of highway operations
by rail, express, or water carriers,
•but
special restrictions are im¬
posed which impede such action—

control to
under the Trans¬ and even the conservative policy
portation Act of 1940.
.V \i of the Interstate Commerce Com¬
regulatory

water transport

Shipper demand made railway
'regulation a reality, yet the
strongest opponents of compre¬
hensive regulation of highway and
water transport were, curiously,
•shippers, actuated by the fear that
regulation
here
might
deprive
them of advantages hitherto en¬
joyed. But, once adopted, there
are
few in any group—shippers,
carriers, labor—who would elimi¬
nate regulation or materially les¬
sen its scope, and regulation
has
strong public support. Whatever
the manner* or ^degree in which
competition may function,v com¬
prehensive regulation should be
continued under a strong regula¬
tory body—one, not several. Ex¬
cept as this policy is- followed,
conflicts, wastes, abuses, confu'sion, are certain to become evi¬
dent, to the ultimate loss of all.
indeed, it is only when public
interest is safeguarded by strong
and comprehensive regulation that
certain paths may be opened to
agencies
of transport under a
■competitive scheme.
;
,

Assuming a continuance of reg¬
ulation, how should competition
operate? An infinite number of
variations

can

here be conceived;

'for the sake of simplicity, I shall
comment only upon the three def¬

inite, and contrasting plans previ¬
ously mentioned, however. Under
one, as indicated, a definite pro¬
hibition would

ship
ities

or

of

another

rest

upon

^w+tr*.

;Vi«^^

fr»ta«*ww at^tJr^ftiWtuMrjVw

wwwmM»"n«^5inffi'WJ,lw,Ma,ivv;;lj,w,;<i:

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4286:

159

r%^/Krww-*w^awwa«wisrtuua!Ur«^^

owner¬

operation of instrumental¬
one type
of transport by
type, and, to spur com¬

petition, voluntary coordination
might well be held at a minimum,
barred. Under this plan, con¬
solidation of separate corporate
'units of like type might be en¬
couraged or atomistic competition
compelled,!" but
consolidations
even

mission

in

"acquisition of
applications has been

trol"

con¬

sub¬
jected to sharp criticism in influ¬
ential quarters because it alleg¬
edly "abets monopoly." The Pan¬

regard to types or combinations of
types serving. The elimination of
wasteful
competition would be
sought, with regulatory authority
empowered to* act upon a broad
front to give to the public the best
possible service at minimum cost.
Essential to the development of

policy for which
exists.'/•!.!<-s

basis

Under laws

now

statutory

no

". >:

,..;;

*

For

mini¬

each, separately and in

of

con¬

junction with others, may serve
public most effectively.
In the development of this pro¬

highway,

by

maximum

carriers

air,

and

authority.
by rail/- by
by

water

minimum

and

rates

strictions

that

are

wholly

justi¬

the allegation of monopoly
often being wrongly made to dis¬
fied,

credit.

wasteful

.

v

of transport.

This opposition pro¬
primarily from three fears:
deep and underlying fear on the
part of many that coordination
ceeds
a

prove,

as

a

of

consequence

monopolistic controls; a fear that
coordination of older, estab¬
lished forms of transport and the

the

newer

forms will result in retard¬

ing growth of the latter, particu¬
larly where that coordination
comes
through common owner¬
can be fixed.
Broad controls also
exist with yespect to service by ship; and, finally and perhaps bas¬
ically,
the
fear of the newer forms
rail, by highway, and by air. Other
controls T-e side
in
regulatory of transport that through coordi¬
bodies, as a consequence of ex¬ nation the railways will come to
dominate all fields,

VA
•
monopoly has been
characteristic of our people from
interlocking directorates, certifi¬ colonial days and "monopoly" has
cates of convenience and neces¬ always been a word to stir public
sity,
and
securities.
Speaking wrath. Yet, if a plan with com¬
broadly, I believe that these con¬ petition as its corner stone were
trols over competition have been developed and a strong regulatory
exercised wisely by Federal regu¬ body enjoined to administer that
latory bodies, and should be con¬ plan, the fear of monopoly should
tinued.
With
few
exceptions, no longer be justified—though the
those regulatory actions subject to cry would undoubtedly be raised
question are a consequence of from time to time not only by the
statutory defect rather than > of demagogue but . also by such as
regulatory unwisdom or desire to might disagree with regulatory
>
trespass upon the legislative pre¬ judgment.
permissive

powers

—

rogative of policy determination.

v

Fear

Fear

of

that

coordination upon

a

the

grettable, as is regrettable the an¬
tagonism shown by the railways
generally toward highway oper¬

have

ations.

Various

mutual

Earlier

in

statement

this

was

which

single
with

staff.

the

is

price.

types of transport, is a
Federal regulatory body
an
adequate and trained
This body must, to meet its

responsibility be composed of men
not only of unquestioned probity
but of high capacity, also. Present
broad powers over all forms of
domestic transport must be con¬

im¬

discussion

made

it must be recognized*,
of competition f

benefits

Essential to healthy competition
effective coordination of the

antagonism,

greatly and greatly
proved public service.

a

and

-

This

clear, applications should

denied:

point of the public this fear is re¬

so

tinued with

opposition is most likely to obvious, yet of which sight is so
proceed from two sources. The often lost in the welter of de¬
shipping public, even when close mands and counter demands from1
control is exercised as to rates interested groups, that the pur¬
charged by all agencies in the pose of transportation is public
field, often opposes reductions in service, not the advantage of par¬
competition that' are socially ticular groups. Except as one chal¬
wasteful because of a desire to lenges that proposition, I see no
hold service competition at high possible basis for opposition to
coordination
of
pitch: it is this opposition which that
types
of
prompts .many political and or¬ transport essential to maximum
service.
Such
coordination
may
ganization leaders to decry re¬

be set; for contract operators
by highway and water minimums

among those being provisions that
relate
to
consolidation, pooling,

be

that

gram,

may

tensive

able and

un¬

stand¬

wastes

at

coordination

the

in effect com-' may

with/regulatory
common

and

the

that

service

the

is

cost

mum

petition is subject to certain lim-! manipulations that are "devious
and dark," but another name for
its, the determination of* which
rests

From

all available forms of transport so

maximum

that

-

a

real

both

is

derstandable.

stemming from fear, has served
as a significant bar to that coordi¬
nation of highway and rail which
would have reduced competitive

Yet,
in
the long run,
competition will react to
the disadvantage not only of the
ama Canal Act remains in effect,' carrier but of the shipper and the
sharply limiting the coordination public also..
A second point at which opposi¬
of inland and coastwise transport
with other competing types. And tion will continue strong is against
a limiting
provision of the Civil the coordination of various types
Aeronautics Act has been used by
the Board as a means of enforcing

domination

2271

particularly

certain extensions

—

with

respect to co¬
ordination.
And, that there may
be no uncertainty as to what is
public policy, the Congress should
by statute define with clarity the
desired
goals and indicate the
paths to be followed by the ad¬
ministrative authority in reaching
them.
This statement of policy
should be
formulated upon the
basis
of
broad
public
interest
alone; bias, group interest, politi¬
cal advantage, and other objec¬
tionable influences cannot safely

be secured

through voluntary co¬
operation
or
through
common
ownership. Because I believe
strongly in the social value of in¬ be given weight.
Then, under
dividual enterprise and that indi¬ strong leadership, genuine prog¬
vidual enterprise should therefore ress should be made toward a so¬
be preserved insofar as possible, lution of problem's of transport
I have a definite preference for now pressing.
Before closing, I believe it der
coordination by voluntary cooper¬
ation. I am certain that, if those sirable,
to minimize confusion,
who determine policy in the vari¬ that I comment briefly upon the
of
terms.
ous
fields of transport approach use
Coordination, as 1
this problem with an honest de¬ here employed, concerns service,
sire to develop plans for effective and in this discussion involves the
coordination
in
public interest, utilization of two or more agen¬
material progress can be made. In cies of transport of different types
such negotiations, regulatory au¬ to render a complete transport
thority and shippers should have service. Coordination may be se¬
a Voice—and
can
doubtless con¬ cured in any one of three ways;
tribute
much
by
counsel
and by voluntary cooperation, by or¬
guidance. Given by statute ade¬ der of regulatory authority under
quate powers to compel coopera¬ statutory enactment, or by com¬
tion among all types and agencies mon
ownership.
By
some
the
of transport

it to

in

be

term integration has been used in

along lines found by
public interest, regu¬

the

by willingness to act positively as
necessity arises.

But, though I prefer voluntary
cooperation as
an
approach, I
have

doubt but that under cer¬

no

tain circumstances resort must be
had
ous

to

consolidation of

vari¬

best served.

that I have used

common

own¬

ership—an opposition which stems
from the old fear of monopoly. If
the use of the term integration be

ownership,- if public need is

be

sense

such service under

types of transport under com¬

mon

to

the

same

coordination; by others it has been
used as the equivalent of coordi¬
nation
by
common
ownership.
This confusion in meaning and use
has made it possible for those who
fear coordination by any means to
bring into disfavor with many the
broad concept of unified service,
when opposition
is basically to

latory authority can do much to
stimulate
voluntary
cooperation

There will be

situations in which voluntary ac¬

regulatory authority fall continued, I suggest that stress be
sometimes because of the put upon service, with the manner
recalcitrance
of
those
carriers in which integration is to be at¬
whose cooperation is in a particu¬ tained to be determined by regu¬
lar instance essential to effective latory authority upon the basis of
coordination, sometimes for eco¬ facts in the particular situation.
I recognize that the statements
nomic reasons. A properly coor¬
dinated system of transport will made herein concerning competi¬
tion and

short,

constitute
at times be of greater worth to tion and coordination
society than a continuance of a no detailed blue-print for future
multiplicity of independent trans¬ action. In" no one mind and in no
reasonably be expected in time to port has some basis in theory, but
of minds, does the
I doubt if any basis in fact can be port undertakings. Belief in indi¬ combination
yield acceptable results—a system
vidual enterprise does not compel wisdom reside to determine today
"would be restricted within a sin-' of transport capable of rendering shown for such fear. Even though
coordination were possible only me to insist, for example, upon the detailed pattern that competi¬
'gle field, if approved—as rail and that service to which the public
retention of the village shoemaker tion or that coordination should
rail, highway and highway/ The is entitled at reasonable cost. But through common ownership, there
or
the
hand weaver toiling
at follow tomorrow. Goals can be set
;basic purpose
of
consolidation it represents a course plotted by is little reason to believe that one
and general principles stated by
would be to increase the power of "rule of thumb," slow, * fumbling, type of transport would stifle and home. Yet, under common owner¬
;one type of "transport to compete circuitous^-in sharp contrast with retard another utilized by it. ship/with supplementary services the Congress for guidance, how¬
directed
by
those
who ever. Decision in each particular
Furthermore, it is certain that ex¬ often
a course clearly drawn and fixed
,'against others,
clusive control of air transport, or formerly operated independently, case must then be left to regu¬
Such a plan is weak, I hold. in accord with principle rather
Heavy depend¬
many of the advantages of indi¬ latory authority.
Thus to array type against type than expediency. Progress toward water, for example, would be not
vidual enterprise can be main¬ ence must be placed upon that au¬
a system of transport
capable of vested in or closely coordinated
would stimulate rivalry, it is true,
thority
in
developing
a program
with
another
tained,
while
the
public
benefits
type of transport—so
maximum service will be delayed
but it would tend to increase the
there would be
important seg¬ from that complete transportation designed to give maximum public
costs of competition through en- by conflicts and antagonisms,^ by
benefit; upon the sound judgment
innumerable efforts of parties at ments free to function without in¬ service to which it is entitled.
.couragement of duplications,
In passing upon all applications of that body and its faithful stew¬
interest to serve selfish ends,, and terference and spurred to maxi¬
.through burdensome rivalries in
mum
endeavor
by
competitive intended to effect coordination, be ardship we must rely through the
.'the fields of both service and the cost of progress will be heavy,
they rested upon voluntary coop¬ years more largely than upon a
in terms both of wasteful duplica¬ rivalry.
rates.
Furthermore, such sharp
:
mass
of detailed and
That those engaged in highway eration or common ownership, and growing
tions and of a transportation serv¬
competition would make any con¬
legislative enactments,
ice that falls: far short of 'that and water transport should fear in weighing any proposed orders complex
siderable degree of voluntary co¬
that have coordination as a goal, giving small latitude for judg¬
ordination
of types difficult to which the public might reasonably railway encroachment is not
strange. The record of the rail¬ regulatory authority should at all ment.
obtain, yet it is an admitted fact expect under a considered plan.
Long years ago, so the story
ways
in relation ? to competitive times seek to maintain healthy
A third and, in my judgment,
'that each type of transport has,
water transport is a record of bit¬ competition. There will be situa¬ runs, an old painter, who so mixed
with respect to particular traffic, preferred J'way" under a competi¬
his
paints that they adhered to all
ter conflict, with right not all on tions, of course, where the volume
advantages over other types.
A tive regime contrasts sharply with
surfaces, was asked by a rival
one side—but, until Congress acted of traffic or other considerations
clear' and inescapable result of the first suggested because it en¬
with what he mixed
to safeguard water operations, vic¬ may not justify competitive serv¬ workman
competition of types would be visions the close coordination of
those paints to yield invariable
failure to meet one* of the ele¬ all types of transport, in contrast tory was invariably with the rail¬ ices; there^re today many limited
Came the testy reply,
many
communities
and success.
The i relationship between areas,
ments of a national transportation to a plan:' which would pit type ways.
traffic sources, served by but a "With brains, sir!
With brains!"
policy, as stated in the Transpor¬ against type. It contrasts with the railway and highway operator has
And it is a generous measure of
tation Act of 1940: so to act with second course, with procedure un¬ likewise been one of conflict, with single carrier. Furthermore, regu¬
most railways too long blind to latory authority should not hesi¬ that same ingredient which the
respect to all modes of transport der existing statutes and existing
tate to modify terms under which American people and regulatory
lack of plan, in that action would the worth and future of highway
as "to recognize and preserve the
an
application to coordinate was authority must mix with toler¬
inherent
advantages
of
each." be in accordance with an accepted transport, too long determined to
This

course

second,

and. our

present,

is a feasible one and may

might retard the prog¬
of the newer forms of trans¬

broad scale
ress

t

Technical

program;,

types

would

progress has given us
of transport particularly
adapted to various needs; there is

no

reason

nated
or

:

use

retard

to believe that coordi¬

to this program
preservation of com¬
petition in all areas where de¬
mand for service justified the op¬

will in any wise lessen

eration of

further

rier—but '

progress.

transport plan which denies




Any
op¬

Basic

be

more

than

a

single

car¬

if actual performance ance, with knowledge, with deter¬
existing terms is found mination, with faith, and with
well as of the individual oper¬ prejudicial to public interest. And, purposeful action, if from the con¬
ator's natural desire to maintain always, unless the gains expected fusion of today is to emerge a
flow from the reduction or system of transport capable of
upon an independent basis an en¬ to
terprise established by him, the elimination of competition in a serving the public as technical
destroy rather than to utilize.

consequence

competition in trans¬
port would be the goal, without highway

In approved,

of this antagonism, as

industry's

fear

of

under

rail particular

case are

both consider- progress
■

and

experience permit.

THE COMMERCIAL & FINANCIAL CHRONICLE

2272

Post-War Outlo )k For Building
/

(Continued fr

deferred

demand,
building in¬
creased sharply and was at record
volume for
the
following four
occurred

2250)

page

because

new

building demands arose out of the
of general economic expan¬
the
country
experienced.

wave

sion

Outstanding, of course, in that pewas the rapid growth of the
automo¬

jiod

automobile industry. The

ernment's program of disposal of
this
and
land
making
suitable

be considered.
to

discourage investment in

acreage
available ,for peacetime
development will affect construc¬

various

types of private construc¬

demand and that

highly desirable for bal¬

is

tion

Un¬

questionably Government author¬
ities
may
be expected to give
ample consideration to the claims
of the industry for raw materials
in programing all phases of the
transition. 7'.-7.
:-.What will be the policy toward
release of price, wage and rent
controls?
Naturally, none of us
know today, but again I say that
it is expected that the release
will be gradual in order to ease

in the affected

ues

early resumption of construc¬

an

addition

In

val¬

and real estate

demand

tion

construction

of

ancing our whole economy.

years—1925 through 1928.
This

>m

Thursday, June 1, 1944

localities.

transition

the

to

problems I have already referred
to there are several other prob¬
lems that will be receiving much
at the

attention

One of the

time.

same

problems I have in

mind is the matter of emergency

Federal spending

tend

tion such

as

These tax burdens

tion for

global war to cause this
figure to be
equalled or exceeded.
Well, there is the Dodge esti¬
mate—but if you want a bigger
one
you won't have any trouble
finding it. We won't argue about
the tightness of advance estimates;
because estimates are not predic¬
tions
and
therefore
argument
would be futile.
All we say is
that:
;7 ■
V '

utility improvements,

industrial

plants, commercial
buildings and rental housing, just
they discourage investment of
risk capital in new enterprises.
The program and policies Con¬
gress will adopt with respect to
as

Federal taxation in the post-war
period will greatly affect the vol¬
ume of such private construction
as
represents new business ven¬

.

in the post-war
tures of any kind.
Unnecessary Federal
Well, enough of the "problems"
spending at that time would in¬
for the moment, and let me tell
crease the inflation pressure that
you
about our post-war construc¬
will exist and aggravate a major
tion volume estimates and why
economic
problem
rather than
we think they are conservative in
solving any. I think we can agree
that inflation control will be a ma¬ spite of the many problems fac-;
period.

.

,

tion in the post-war

perhaps 75% above the 1939 aver¬

period.

of age by the end of 1946. Others
transition, and this is an impor¬ have estimated the increase as
tant post-war factor, because if high as 100%. A few anticipate
First, We have the problem

in¬

do not handle it properly

we

not have a running
start for the big job and we may
will

dustry

with

ourselves

find

unem¬

mass

ployment that will not augur well
for the

private-enterprise system.

I do not believe that the construc¬
tion

industry

has
such

a

conversion
because the

problem as
members of the industry
customed

to

are

ac¬

switching from one

type or size of project to another.
The switch from wartime projects

peacetime projects is just
routine adjustment.
77.777'
to

a

lower

prices, although I cannot
reconcile myself to this viewpoint.
The program followed in re¬
leasing controls, I think, will de¬
termine
whether
the
post-war
price level will be reached in an
orderly manner or, as after World
War

I, by way of spectacular in¬
flation, deflation and reflation.
At all stages the relationship
between
construction
costs, in¬
volving both material prices and
wage rates, and general commod¬
ity prices and, to an even greater
extent, the relationship between
construction

There will be,

will

rents

to

costs

commercial expansion.
(d) Anticipated needs for com¬
munity developments and
public improvements.
(e) Prospective post-war na¬

working and possibly to some ex¬
by payment of unemploy¬

tent

Whenever restric¬

benefits.

ment

tions

lifted, purchasing

are

will continue to be

power

it is today,

as

tional

greatly in excess
of available
goods and services, and therefore

(f)

the threat of inflation will be far

greater after the
the

war.

sition

are

war

If the problem of tran¬
considered as constitut¬

ing an emergency, it will not be
a purchasing power emergency to
be met with lavish spending but
an emergency whose solution will
depend upon good managementgood management by Government
and industry in making the speed¬
iest possible adjustment to peace¬
,

time

v

than during

conditions.

Awkwardness

dence today that Government will
adopt policies that will stimulate
construction

activity and all other
7
:7
strongly that the
post-war economy will hold op¬
portunity for broad economic ex¬
pansion after wartime shortages
have been caught up, but that we;
do not see at this time any clear
business activities.

We believe

2.

indication

as,

what set of

to

eco¬

nomic factors will dominate such

expansion
and

or

volume

to the character

as

of

de¬

construction

mand that will accompany it.
3.
We believe that given the
adaptability and flexibility of con¬

struction

industry, programs made

for

the

post-war period, onmoderate estimates,
can
later be stepped up if nec¬
essary much easier and with Jess

now

of

basis

the

danger of trouble than would be
the

if plans were laid for a
larger,; volume than later

case

much

realized.

income.

check) comparisons
with the post-war decade
following
World
War
I
(1920-29) with careful con¬
(As

post-war

We believe that there is evi¬

1.

transportation
and extended the daily traveling
radius of the average man from
5 to 15 miles.
The expansion of
the auto industry carried along
with it the need for new factories, the transition. to a free economy
jor post-war problem. In both the ing the industry which I have just
for service stations, for garages and avoid, if possible, a period of
related to you. 7 / 1.
7
7
transition period and in the post¬
Whenever
ceilings
are
and for highways. Also, due to chaos.
As we see it, a decade of highwar
period the biggest problems
the extension of the daily travel¬ finally lifted, I believe that, the
volume construction activity is in¬
of the
Federal Government,
in
demand for construction as well
ing radius of the individual a
dicated by a realistic analysis of
managing its
fiscal policy
for
much larger area was subject to as for practically all classes of
the following factors:
maximum benefit to our economy,
urbanization. People were decen¬ consumer goods will tend to rise
will be controlling inflation and
(a) Measures of deferred de¬
tralizing and this movement cre¬ and reach a new peacetime level
mands.
controlling the post-war boom.
ated a demand for many types of substantially higher than the pre¬
(b) Housing needs of new fa¬
war level.
One well-known econ¬ Purchasing power will be distrib¬
community construction.
milies
and
uted through systematic redemp¬
probable
re¬
estimates
conservatively
Now I want to discuss some of omisttion of war bonds, by ordinary
placement demand.
the factors that almost assuredly that the BLS index of wholesale
distribution of income to persons
(c) Prospects of industrial and
will affect the volume of construc¬ prices of all commodities will be
bile revoluitonized

a

assumed

7'-777:.;7

...

77*

a

sideration
and

Eric Johnston Given

Dollar Memorial Award

similarities

of

differences.

(Continued from first page)
Against the prospects of much form
of
a
gold
plaque,
was
national income and the founded in 1937 by the family of
carryover
of greater accumula¬ the late Captain Robert Dollar, to
tions of purchasing power than
be
presented
annually
to
the

higher

after

World

anced

War

I

be

must

bal¬

American

by the fact that 1920-1929

citizen

chosen

his

for

"distinguished contribution to the
advancement of American foreign
trade."
The
recipients
of
the ^
Award in previous years were: the
Secretary of State Cordell Hull, »
James A. Farrell, Thomas J. Watson, Eugene P. Thomas, the formers
Under Secretary of State, Sumner
Welles, and Juan T. Trippe.
V 7..,
In making the announcement,

the decade of largest numer¬
ical increase
in population this

was

however, during
affect
Current construction de¬ and delay in effecting the tran¬ country ever had, and it was also
certain def¬
sition could result in distress sit¬ the decade of
mand either favorably or unfa¬
largest increase in
inite problems affecting the rate
uations
that
would
strengthen urban
population.
The
decade
with
which
the
industry
will vorably. The importance of these
political" pressures" for* unsound 1940-1949 will have
only half the
switch over to its full peacetime relationships cannot be overlooked
relief measures contrary-to
the numerical increase in total pop¬
because confusion as to probable
volume.. It
may
be anticipated
actual economic necessities of the
ulation that actually took place
that transition to peace will be in price trends was a principal fac¬
situation.
between 1920 and 1929.
Ac¬
two stages. The first stage will be tor causing hesitation about new
Another
problem that is being cording to
the Department
of Mr. Fletcher said in part:
immediately following the end of building ventures directly after
World War I, and it is most likely given considerable attention has
Commerce estimates, new family
"This annual Award had its in- ;
hostilities in Europe or possibly
to
do
with
the
that
the future post-war construe-:
large-scale re¬ formations - will ./be one-sixth less
earlier when- the determination is
ceptiori in a -resolution passed -at *
habilitation
of
in
tion
market
will
be
number
blighted areas in
very sensi¬
during the current the Twenty-fourth National For¬
made that the end in Europe is in
tive to disproportionate rises in cities and towns because it is a decade than in the decade 1920sight, and the second stage will
eign Trade Convention of the Na- •
construction
1929.
These
costs.
In
that
major
real
estate
problem
of
long
previ¬
population factors tional Foreign Trade Council, held
be the period following the defeat
have
a direct bearing on residen*
ous
standing.
Some
are
approaching
post-war
period
construction
of Japan. On the assumption that
in Cleveland in 1937.
The Na-.
this problem as a post-war con¬ tial building demand and an in>
the second stage will follow the costs moved further, percentage¬
tional Foreign Trade Council, by
struction opportunity while others direct bearing on construction oi
first by about a year, it has been wise, above pre-war levels than
resolution of the Convention was »
did general commodity prices, and see it as a convenient vehicle for facilities
that supplement horn*
unofficially stated that probably
appointed Trustee of the Award.-;
it is doubtful that this can happen large Federal spending. The ear¬ building. •
; The Award Committee, appointed
80% of the necessary reconversion
liest attack on this problem was
The F. W. Dodge Corp. has es¬
of manufacturing industry will be again without serious affect on
by the Board of the Council, com- f
with the program of Federally- timated
construction demands.
that
total
construction
completed at the start of the first
prises 41 members, selected from ,
subsidized public housing—some¬ volume in the 10 years following
full peacetime year. The period of
Now another question involv¬
all sections of the country.
this transition period

,

.

,

transition

ing

trolled

will

will
be
largely con¬
by Government, and I do

not

expect, nor do I think, that all
wartime economic controls will be

suddenly abolished the day after
first phase starts.

the

trous post-war
ter

The disas¬
price inflation af¬

World War I is well

bered

and

there

that

agreement
be

must

remem¬

the

general
repetition of it

avoided.

Thus

yoii can

speed with
construction industry

appreciate
which

is

that

the

the

Government decision — how
sufplus properties be dis¬
posed of? Not only will the pro¬
gram affect the construction mar¬
ket, but until the policies and the
program

are

will

hang

will

cause

knovm, uncertainty
the market and

over

hesitation

as

how such

disposal will affect prices, values
and

the

actual

construction

als

demand.

Manufacturers

trate:

be

may

of

extent

To

or

local
illus¬

individu¬

inclined

to
delay
plant in the hope
war plant adapt¬

get into high gear will depend
mainly on the program of relaxa¬
tion, of government controls. 7

building a
of picking

What will be the policy toward
release of critical raw material?

houses might be reluctant to pro¬
ceed with new projects in some

can

areas

maintain

a

restrictions

on

up

a

able to their purpose;

At present WPB is determined to
wartime

new

if

builders of

housing has created
due to elimination of

war

surplus

non-essential civilian construction

second and third shifts in the fac¬

without relaxation,

tories

ception of

with the ex¬
slightly little more

a

liberal attitude toward the release
of materials for deferred mainte¬
In

nance.

view

of

the

fact

that

total construction volume for 1943

50%

was

below

the

1942

peak,

if

they didn't have assur¬
ance that the war-housing which
was
of
temporary
construction
would
be
removed.
This,
of

the intention in many
when the houses were built,

course, was
cases

but

the builders will want

and for 1944 will

statement

below

there

probably be 75%
1942, it is obvious that the

strain
has

on

been

critical

materials

war

greatly

relieved, how¬
ever, the manpower situation is
still critical—and you can't build
without labor.
It
may

is

quite

possible

further

tions
ations

erated

of

war

and

WPB

modify its restric¬
tempo of cancell¬

the

as

that

contracts

more

is

accel¬

of

the

is

the

policy.

a

re¬

Then

question of disposi¬

tion of Government-owned inven¬

tories

ocnstruction

of

Will they be released

materials.

for civilian
of con¬

recognized that there is

a




"slum-clearance."

stages

struction revival, when new pro¬
duction is low, and through nor¬
mal

trade
land

channels?

owned

by

And

then

dispositidn
the Federal

England States

area.

The Gov¬

be

approximately

decade.

the real estate

on

re¬

habilitation side and philanthropic
the

on

family

to confusion in

welfare

side)

led

It has be¬
blighted
property should be redeveloped
for purpose other than housing.
To this
end, some States have
enacted legislation which will en¬
courage the rehabilitation by pri¬
vate capital, but the existing lows
policy.

evidentthat much

come

should be studied further in order
to

assure

their workability in the

post-war period.
One

:'

pertinent problem
worthy of the most intense study
relates to taxation.
But public
and private construction demand
are strangely affected by local as
well
as
by
Federal
taxation.
States
and
local
governments
seeking
to

desirable

estate

these

sources

new

offset

real

sources

of

revenue

are

the

since

and

urban

post-war
the

Within

this Increase, residen¬
building volume is expected
triple the 1930-1939 period and

to

would

be about 8%

ahead of the

1920-1929

period; non-residential
building would increase probably
70%

'30s but would be

the

over

about

under

20%

the

would be

decade

both

the

approximately 50%

the

decade

of

of

which

estimated

shown
are

on

by

rates
our

the basis

by

Government

The impact of high income
surtaxes, high taxes ort corporate
income and. capital * gains1 taxes,
upon investment incentives;-must

exhibited

man

so

United

has been chosen
recipient of thejj£.
by those who are qualified
to
represent the foreign trade
opinion of the nation.
States,

this, year as thq

Award

Johnston is

"Mr.

of the 37

the entire
would have an annual
volume for the post-war

we

cussion

of

national

affairs

tional

ac¬

interna¬

of

*

the

spirit and initiative he has dis¬
played in his successful business

presentatipn, of the Award

The
to

Johnston will be made at

Mr.

the

World

Trade

Dinner

of

the

Thirty-first National Foreign
Trade Convention, to be held in
the
Hotel Pennsylvania, New

York, on October 10.

June Rail Prospects
Vilas & Hickey, 49 Wall Street,
New York Stock

annual

issued

years

and

something

$9,200,000,000 and of
$4,800,000,000 for the decade of
the '30s.
The assumed post-war
of

of

man

of

1920-1929 of

and

a

tion who has infused into the dis¬

$9,600,000,000 as com¬
pared with the annual average for

each

average

the

1929

was

boom

and

exceeded
in

of 1941 and 1942.

in

of

1925

the

war

years

also

It

reached in any other year.

was

not

There¬
taken, up to the pres¬
ent
time, either a construction
boom accompanying a great wave
p£ economic expansion or a vast
Government program of prepara¬
fore it has

r

previous

in

selections for this high honor

a

in¬

States, are applied to the
Department of Commerce figures,

ar¬

will continue, to

of

estimates,

eastern

decade

keeping with the sound

career."

the

crease

One

that

and

'30s.

If

preempted

redevelopment

over

'20s

the

average

is,

terms

tial

country,

period

Federal

in

which purport to cover

most

gument being advanced for heavy
Federal subsidies for local public
in

is

volume

cost levels.

pre-war

of

the Federal Government.

works

post-war

"It is in

judgment

that
outstanding in the busi¬
ness-life ofrthe nation,, as- the j
of President for the third term of the <;
Chamber
of Commerce
of
the.

5% ahead of the prosperous 19201929
decade.
The
estimate
for

in

reductions
find

taxes

This total would be about

*?/ the '20s; heavy-engineering work

other

get.

early

will

war

(economic

of

the

the

twice the volume of the 1930-1939

there is the matter of

in

become

backlog

called

preempt most of
the tax revenue, the only hope for
States and local governments is
to lobby for as generous hand¬
outs from Congress as they can

use

Government, which, by the way,
available, because it js generally, is .said to exceed the entire New
men

times

The dual purpose of the program

New

York

an

cussing

City, members of the
Exchange, have

interesting bulletin dis¬

possibilites

during

of several rail situations.
company

by company synopsis of

prospects

in

field

also

this

are

June

A brief

bulletin

the

reorganization

given.
may

Vilas & Hickey on

be

Copies
had

request.

of

from

Volume 159

Number 4286

THE COMMERCIAL

to

"Our Welfare Is Bound Up With
That Of Other Nations": Nelson
(Continued from

expansion, a healthy ex¬
pansion growing naturally out of

part in decisions which lie at the

and

heart of

relations

our

in the past

seen

few years has convinced

that

me

great change is taking place in

the outlook of the American peo¬

ple

has made

us

aware

fore that

our

is

up

bound

other

We
of

resources

must look to

ticularly to

sphere, for
that

see

we

that

see

our

materials

raw

We

see

that

we

foreign sources, par¬
in this hemi¬

sources

many materials.
We
must have dependable

if

markets

overseas

be¬

future welfare

own

not unlimited.

are

war

never

as

with the welfare of

nations.

own

The

world economics.

on

increase of the world's wealth

an

purchasing

"It

is

that

/"What I have
a

sustained

with other

countries.

we

are

to

power.

becoming

the

best

can

is

to

aid

undeveloped

of

and

find

other

ened

have

areas

the

nation

strength¬

be

sound

industrialization,

national¬

economic

last

war

led directly to world-wide misery
and strife.
Increasingly we rec¬

ognize that unless we build the
world economy on the basis of
sound and expanding trade among
the nations, we must expect the
next generation to reap such an¬
other harvest of
in

time.

our

"As

learned,

in

tionism

has

come

what

we

have

■

result

a

as

war

of

judgment, isola¬

my

is

rapidly ceasing to be
a
major issue in American life.
The good neighbor policy itself is
a
clear sign of the change.
Our
people know that we must have
trade with other countries. And
they
world

in

that

know

the

between

trade

modern

nations

re¬

quires clear understandings as to
the

and

nature

volume

of

ex¬

credits and methods of
payment. There is no theory about

change,

There is

this.

sentiment about

no

It is

it.

plain business sense. The
question that the United States
must face is not whether to have

isolationism

It

is

only

question

a

of

character

internationalism.

or

of

.the

international

the

which we, like
other people in the world,

agreements
every

make

must

order

in

in

interest,

own

our

to

get the things - we
get a fair return and
for the things we

need, and

active markets

:

"I

want to stress the words 'in

our own interest.'

of

the

United

The prosperity

well as
that of the rest of the worlds is
closely bound up with the character
and extent'of our foreign trade. The
States,

as

periods of good business in Amer¬
ica, when everybody who wants
a
job can get one, are also the
periods when our exports are
large, and when we import great
quantities of materials and prod¬
abroad.

from

ucts

in¬

Every

formed person agrees that widely

spread purchasing power in other
countries, and a high volume of
world
trade,
are
bulwarks
of
America's industrial welfare.
"The

ford

United

to

States

of

that

her

the

wise

cannot

af¬

own

have learned

now

say

with

certainty how great a cut in war

production will follow that col¬
The essential points is that
Germany's collapse

good example.

our

industries.

own

ability to

prepared.
now

war

its impact
must be
Only wise preparation
we

prevent a serious post¬
business depression, and a
can

of

great

wave

which

would

unemployment

inevitably

spread

throughout the world._
"In preparing our internal ecnomy to withstand the shock of
large cutbacks in war production
we

have vital need for a backlog

of orders from abroad.

orders need

to be of a

And these
kind that

Will aid in creating not a tempo¬




a

Today

we can

their

to

mutual

collaboration

real¬
these

along

lines will enable the Governments
the

world

to
bring about a
expansion of trade and
peaceful solutions to their
difficult economic problems. For

sustained

after the

war we-must expect to
complicated and perplexing
world economy.
You will have

see

a

one

or

socialist

more

side with capitalist

coun¬

tries, while in yet other nations
there are deeply-imbedded strains
of feudalism.
vate

You

will have pri¬

international

cartels

operat¬
ing abroad side by side with free

will

have

industrial

nations

and

will

have

victorious

conquered

nations

nations

and

and

neutral

nomic

our

eco¬

leadership but rather

insure

that

work

leadership when
friendly nations

with

bring about

sound

a

used machinery and

which

pur¬

they

can

rials, goods

pay

sup¬
new

equipment

othercountries

which

to
in

We have much to

power.

gain and nothing to lose by
plying the materials and the
or

we

increase

their productive wealth and

chasing

we

needv and

for in mate¬

services.

or

experience has al¬
taught us techniques by
which
export
sales
of
capital
goods can readily be arranged.
We

have

learned

that

make

we

when, instead of consid¬
ering separate, unrelated requests
for industrial goods, we put our
progress

heads together with the informed

representatives

of

another

unified,

a

coun¬

compre¬

hensive and carefully worked-out
program of industrialization.

first- such

our

The

to reach us
only two months ago from

came

program

good neighbor Mexico.
Working in close cooperation with
our
Department
of
State,
the
Foreign Economic Administration
very

and

the

Coordinator

American

for

Inter-

Affairs, the War

gram.

Each
was

time
we

on

its

for

approved
projects could be produced with¬
out interference with

our

own

es¬

sential production. Orders for ma¬
terials approved in the final- ar¬

be

placed at ap¬
propriate times by business con¬
' in

cerns

Mexico
in

"Perhaps even more important,
they will need all their good-will.
I

with

business

this country.

that

convinced

am

is

peace

the

attitude

who

negotiate
agreements
riod ahead.
Only an
fair play can succeed.
men

powers

with

willing

are

each

other

this
an

ment

of

on

fail

cannot

war

era

a

to

usher

constructive
world scale.

/

::

,

countries
an

whom

in

we

"There

whose

equal

no

dream.

mere

action.

will be
can

be

and

I have

I have

other

United

Nations.

all

no

question

of

the

advantages of building healthy
industries abroad, not only for the
foreign nation concerned, but for
the United States.

Because of the

tremendous demands of
forces

and

power

in this

war

short supply.

our

armed

industries,

man¬

country is now in
In Mexico and other

countries, however, manpower is
available, and these countries in
fact have
generously responded

PROPERLY PREPARED

PAIGN, THERE IS
Then

there

ADVERTISING CAM¬

NO BETTER WAY TO BUILD UP A
BUSINESS.

is

the

convenience of such a
campaign. If lead
attracting advertisements are used, it is
only necessary to prepare
the copy, turn it over to
the local
paper, and the job is done until
the leads appear. When it
comes to
comparing the simplicity of this
method of attracting leads with
the use of direct
mail, the elimina¬

of mailing list
preparation, mimeographing, stamping, sealing,*
sending out letters, the newspaper ads are made to
order for

these times of office

help shortage.

-

It is not necessary to use

copy, attention

interesting

large space to attract attention. Human
arresting headlines, special situation prepared in an

manner,

of

use

coupons to be clipped and returned
for;
information, these are the basic principles of successful
advertising. Incidentally, we know of one dealer who has

additional

newspaper
taken up newspaper

advertising and kept at it consistently for the

past several months.

advertising

The

direct results that he

could

trace

to

his

negligible. However, several weeks ago he receivedi
telephone call from an investor who said he would
like to come in
to this dealer's office
and, of course, an appointment was made. It
developed that this investor had been prompted to call
were

a

by the

paper ads.

news¬

He has become an excellent account and
this dealer feels
that the business he will receive from
this one source alone will more
than repay him for the cost of
his campaign. It was not so
much
what this dealer said in
any particular ad which impressed this cus¬
tomer. When asked what caused him
to telephone in the first
place
he said, "I have been
reading your ads in the paper and somehow
they appealed to me, so I though I would come in and see for
my¬
self if you could do

anything for me."

Newspaper advertising should not

be used
exclusively nor to
campaigns. Both have their place. In.
fact, direct mail campaigns if properly prepared should
pull a greater
percentage of inquiries than newspaper ads. However, a good news¬
take the place of direct mail

its

inter¬

best

own

served by the wellbeing
The result is that

are

problem,

every
even

of

made

solution.

reasonable

which

agreements
with

we

another

one

have
not

are

wishful

mere

promises
but
straightforward statements of

workable

which' are
fully and effectively carried out.
"After
the

programs

the

war

ments.

emotional

pressures

relaxed, it will
harder to reach

are

It

will

tax

ingenuity.

our

We must

our

iBut

see

agree¬

patience

it must be

to it that the

attitude of natient fair play

which has characterized the rela¬
tions

of

wartime

the

is

United

carried

Nations

over

into

right side

of the

ledger.

fair

tained

play,

and

expression

neighbor

policy

Keynes Disputes View That Monetary Plan
Might lean Return To Gold Standard
(Continued from page 2251)

given

of
in

a

the

sus¬

good

terms

of

close

the

transitional

period.

the

main

tween

large addition.

operation.

"One

major

improvement now
said Lord Keynes, is
share of the re¬
sponsibility for maintaining the
equilibrium of international pay¬
in the plan,

that

a

is

squarely placed

shoulders

of

Americans,
to

be

said,

creditor

who

affected,

countries.

most

are

have

likely

offered,

far-reaching form of

a

tection

the

on

he

pro¬

against the recurrence

of

deflation

This is

wars.

extension

of

a

be¬

tremendous

international

co¬

"He said that during the
post¬
war

proper

ments

of

cause

Separate quotas for the remainder
of the sterling areas will make a

transitional period he hoped

Britain's

policy would be to de¬

velop the field wherein
would be

idly

as

sterling:

freely available

possible.

This

as

rap¬

could

be.

done under the plan without in¬

curring any charge of action
trary

to

general

any

con¬

obligations

plan."

in
the

post-war period. Given that spirit
of

THIS STORY WEEK AFTER WEEK FOR THE NEXT SIX
MONTHS.
If your ads are right—your profits will surely be on the

controversy,

every

the most serious, has proved

capable
The

of

$1,000 to $10,000 available for investment seem to be looking for
today. Tell them you can help them select the right ones NOW—
tell it to them in a short, concise, and
interesting ad. Put a coupon/
on it for reply AND LET YOUR HOME TOWN PAPER
TELL THEM

the

of the others.

same

happy to work.

AND THE CERTAIN AMOUNT
BUSINESS AND DIRECT LEADS
THAT COME

these

In

discussions each country has rec¬

other
we

it in

seen

it during this

seen

of the United States with

done.

with

£J??;a9t0NSTANT ^PETITION,

in the economic discussions

war,

a

welfare

interest

w

"To me this conception of fair
play in international relations is

and

have

in

achieve¬

rangement with Mexico fulfill
for

The first and most
lasting benefit that a security dealer can
obtain from the
proper use of publicity that gets his name and his
PHILOSOPHY OF DOING BUSINESS before the
public is that it
paves the way for his salesmen. In
communities ranging from 10,000
to 150,000
population, the newspaper rates are not high. If dealers
used one ad a week and
kept it up for 52 weeks—even if they did no
more than put their name in
the space and said WE BUY AND
SELL STOCKS AND BONDS—there
would hardly be a person who
owned securities in their
locality who wouldn't have an idea of who
they were and what they did. This means a lot to a salesman.
It's
the difference between
trying to sell a nameless product against one
that everybody knows.
After Ml, in this
business, we don't sell a
security—we sell a service—a reputation—in fact we sell
ourselves.
It is true that sometimes
salesmen have found it worthwhile to use
a
big name security to open an account.
They do this just because
they have to overcome their own lack of
reputation or that of the
firm whom they
represent. For the small cost
involved, the PRES-

paper campaign will also bring in leads if that is what
you are after;
differences, and if they are Industry ads—electronics, railroad bonds, household
equipment, firewilling to play fair with the insurance stocks,
plastics, automotive stocks, air-transport companies
weaker nations, then the end of •—these
are the industries and securities the investor
who has from

international

action

People read every other type
every product under the sun
have found that
CONSISTENT, intelligent advertising PAYS, it
will also pay the
security dealer—and the field is wide open.

their

workable

ex¬

the

play fair
they adjust

"Although its scale is relatively
small, if the results of this ar¬
indicate

of

to

as

be

may

the

the world's
in the pe¬
attitude of
If the great

economic

undoubtedly

line

of

one

main keys to a protected and last¬

pro¬

war¬

post-war merits. Then
determined how and when the
required

all their
practical intelligence to put that
puzzle together in a pattern of
peace and prosperity.

ests

and

materials

world will need to pool

ognized that

industrial

proposed

considered

engineeing blueprint.
Rather it will look like a jigsaw
puzzle.
The
statesmen
of
the
an

Pro¬

duction Board analyzed this

project

look like

ing

"Wartime

ready

The world order will not

war.

this country are located in prac¬
throughout the land. In most

every city of any consequence,
of these cities there is a
daily paper.
of advertisement—and advertisers of

and

the

jeopardize

The retail security dealers of

tion

agricultural nations, each with
their special interests; and you

"

Opportunity In Your Community To Make Your
Firm The Place To Go To Buy Or ftell Securities

tically

enterprise, and

an element of gov¬
regulation as well. You

■*

<

,

ernment

their trade with the United States.
not

•

.

™

side by

We

do

-

countries

nations, with intricate emotional
relationships carried over from

it

whatever

is

many

and the volume of

pay,

for

economy,

time

plainly see that as Canada's in¬
dustries grew, so did the demand
for goods among her people, their

sound

and

Canada

one

trialization of Canada would hurt

pectations,

our

help

we

Americans feared that the indus¬

whenever

upon

when

At

lapse.

comes,

We

well.

as

tomers for America.

concerns

cannot

the

encourage

that

know when the Nazi collapse will

We

States

other peoples build healthy indus¬
tries we make, them better cus¬

rangement will

come.

to

but of other nations

of
the war the problem of insuring
post-war prosperity. We do not
put off until the end

United

not only
undeveloped regions

try to consider

and make and sell.

grow

whole.

a

as

Moreover, the evidence is unmis¬

is

taken

long-range advantage.
"I feel deeply that only

».

An

will

Orders and jobs in

us.

The Securities Salesman's Corner

the

as

industries will be made
promptly available for our
returning
soldiers
and
trained
workers, and over the long term
our foreign trade
position will be
strengthened by steady improve¬
ment in the purchasing power of
friendly peoples. At the same time
the status of private enterprise is
preserved. The Governments con¬
cerned need provide just enough
regulation to make sure that the

rising standard of
living and the growing purchas¬
ing power of the people in that

employment. Moreover, it is plain
to all that the years of high tariffs
extreme

have

We

the

to

soon

more

istic'

how

As

further benefits

over

heavy

its

industrial resources.

war,

resources.

is

accrue

action

seen

over-all

output and
thereby relieve the strain on our

In the past 10 years the
development
of
the
Tennessee
Valley has taught America how
swiftly a great area can be im¬
proved through intelligent use of
own.

takable

which followed the

regions

build up sound industries of their

would

ism

clearer

ever

method

by which
promote a sustained and
healthy expansion of foreign trade
we

maintain high production and full

and

greater

2273

to work

men

our farms and
railroads.
By
increasing industrial facilities be¬
yond our borders we can achieve
on

war

boom in foreign trade but a

rary

requests for

our

own

2254)

page

problem, questions of international
supply forced themselves on us,
and we had to penetrate' deeply
into them, and to take an active

& FINANCIAL CHRONICLE

of

Oxford Paper
Oxford Paper

Post-War & Railroads

Attractive

offers

an

attrac¬

McLaughlin,

Baird

&

Reuss,

tive situation, according to a cir¬

One

York

City,

cular

members of the New York

Stock

Co.,

prepared
115

Goodbody

by

Broadway,

New

&

York

Wall

St.,

New

Exchange, have prepared

an

in¬

healthy industrial development, I

City, members of the New York

teresting discussion of "The Post¬

believe

Stock

war

of

we

can

lay the foundation

security, freedom and economic

democracy for
the earth."

all

the people

of

cipal

Exchange and other prin¬

Exchanges.,

.

Copies

of this

circular maybe had upon request
from

flooVJRrtil

ir'JS!)

Co

Period

and

the

Railroads"

Copies of this discussion may be
had

from

McLaughlin, Baird

Reuss upon request.

&

&! FINANCIAL

THE COMMERCIAL

2274

Thursday, June 1, 1944

CHRONICLE

syndicate managers or promoters in handling large
The NASD would find themselves with

all become large

OUR

blocks of stocks and bonds.

NASDMark-UpRuIelmpedimenftTo
REPORTER'S Opening of Venture Capital Marts

this 5%

the reader to the

The Wall Street Division of the
Finance

investment houses of

large number of expressions on the sub¬

''

Drive.

boston, mass.;

rule

a

new

:

7;•
Such

of New

Committee

.

entirely halt the issuance through
securities of the smaller corporations.
*

It will definitely deter if not

ject which have appeared in these columns in each issue since
These views were made by dealers in;all parts
York is getting off to a flying April 13.
of the country and the overwhelming majority contend that
start in its preparations for the
approaching Fifth War Loan the 5% rule will seriously interfere with the marketing and

War

Perhaps that is what some of them are working for.

rule.

;7.7.'7 7' vV. v,UTICA, N VY;-'.'/V

(Continued from page 2251)

REPORT

100% all members in

if they examined

much lower membership

a

would naturally

V'-'-

markets.

■

■

■

drastic limitation on such

place

'7." ''; 7'7

:

7-:

CHICAGO, ILL.

"

7

V;,•;/>„7;;::/'

A(From firm • favoring rule) ,v7. ./77': 77,■ '■;
'
" vV.iv"-' ' v
' "■ •' 7'7,7 7;'' '77' 7v.7''7
•7:.v7'.,i7 < 7'7

None.

' ••;

,

/ >

.

retailing of the capital issues of the nation's smaller enter¬
boston, mass. 7 7 77;.,7;^
Out
to
surpass
their per¬
prises.
Accordingly, small business, which is expected to
Decidedly adverse.
Due to lack of broad market and hence
formance during the preceding
shoulder a large share of the task of maintaining full em¬ probably slowness of distribution it is necessary to inventory for a*
campaign,
which
drew com¬
mendations of the Treasury De¬
ployment and a high national income in the post-war period, larger period and cost more to distribute. Definitely it should have;
much wider spread to encourage dealers to make markets profitable.
partment, the leaders of the
will be largely deprived of the very ingredient essential to
Did you ever see fur coats, diamond rings, etc, within the 5%:
Wall
Street
aggregation are
its functioning, namely, ability to obtain capital accom¬
mark-up?
hard at work and have been for
modation.
In this connection, we give herewith some more
MINNEAPOLIS, MINN.
■;y'-:^
several, weeks
getting along
comments of securities dealers on the subject.
with the preliminaries.
;
/
v
777' Believe small dealers will be unwilling to work on unknown1
items
with
consequent market difficulties in small situations.
Such;
It should be noted that the name of the city or town preIt is to be a race of teams again
the competition
extremely keen goes with¬

cedihg the dealer's comments was obtained from the post¬
appearing on the envelope in which the questionnaire
out saying.
As a matter of fact
was returned.
In cases where publication of the name of
banks, underwriting firms, bro¬
kerage houses and the Street in the community would tend to identify the firm (as in places
general are now in process of where only one firm exists), the point of origin is indicated
will be

clearing their decks.

emphasis this time
more than ever on sales to in¬
dividuals, the
financial com-!
munity's teams might well adopt
as their slogan that famous pas¬
the

With

NEW YORK

will

banking
have
been hard at it in the matter of
instructing employees of various
houses which will make up their
groups. They have been moving
Irom firm to firm holding lectures
and giving "pep" talks.
So when the whistle blows on
June 12 next the financial dis¬
trict groups, as they have been in
the past, will be found toeing the
barrier and ready to go.

Ordered to Competition

potential deal was

Another

lip-

set, at least temporarily, when|the
Securities and Exchange Commis¬
sion late last week denied the; re¬
quest of the Capital Transit jCo
of Washington, D. C., for exemp¬
tion
of
its
proposed financing
from competitive bidding.
The

is
Washington

company

the

of

affiliate

an

I think the 5%

i|

The program

$16,000,000

of

sale

year

4% first mortgage bonds to
outstanding debt, as

refinance

suggested by financial advisers.
Unless the

company

decides to

let the matter drop for the

time

it will, of necessity, have
to call for bids under Bule U-50.
being,

Another Issue Deferred

Reports were current this week
the financing contemplated

SALT LAKE

Corporation

Greyhound

the

would be

permitted to go over un¬
til early next Fall.
Bankers

understood

are

to

and these factors,

j

Besides all these1 pertinent
way of trying

!

j
and opinions of a;!

to force upon a majority, the apparent ideas
minority supported by a bureaucratic agency, which in turn is

Only
sibility

one

in

NEW YORK

Wider

was

scheduled

to

open

bids late

yesterday.
Several

to

be

in

groups

were

running

known
for this

piece of business and it was ex¬

pected that barring any unfore¬
seen

the

developments marketwise,
successful

bankers

would

public
offering
subject, of course, to formal ap-

proceed

with




governmental agency which attempts to;

dealer

or

V-

CITY

quotations due to lack of interest.

•

all

securities

in

is to

limited

be

to

as

his

business

j

,

:v^;;

NEW YORK CITY

.

so

obviously biased, by large houses, and unfair, that I have
express my feelings unless I wrote a book.

words to

NEW YORK CITY

There is in my opinion no doubt that the 5% mark-up rule will
have not only a tremendous damaging effect on the market of se¬
curities of the smaller corporations, but also on all the over-the-»

securities.

counter

r

■

"

•

•

Under the 5%

tailer to do any

In my

mark-up rule it simply does not pay for the re-1
extensive and necessary merchandising and selling

belief it will kill it. In fact if present conditions and con- !
job, involving a lot of time,'travelling expenses, and so on and so
am pessimistic.
There won't be any securities market
forth.
*
v
as we have known it in past years and free enterprise in every line
The 5% mark-up rule in my opinion can only mean one thing*'of business will cease to exist.
And permit me to add, although it is
to kick the thousands of small houses out of business, whereby not,
getting away from your question/ that while the NASD is supposed
only the bread of the little fellow is being taken away, but in the
to be an association of over-the-counter dealers it is too much under
course of time the small corporations which depend on the over-the- >
the direction of N.Y. Stock Exchange members through the Board of
counter'market, as well as the few large wholesale houses will suffer,
Governors of NASD.
a tremendous damaging effect.
I definitely underwrite all the various comments in the "Financial Chronicle" against the 5% mark-up rule.
A SMALL PENNSYLVANIA TOWN
In the interest of the smaller corporations as well as of the entire
I am positive it cannot help the market in any way.
Security Industry I hope that the retail firms unite and do away with

trol continue I

-

A

SMALL

the autocrats of NASD.

PENNSYLVANIA TOWN

This mark-up

rule, in conjunction with other rules and regula¬
tions of the NASD and the SEC will result in ruling out the smaller
corporations and the smaller dealers from the investment markets
and thereby deny the investor the service and protection on his in¬
he has had and expected.

SEATTLE, WASH.
Feel

convinced

would

it

become

7

.

almost

impossible to do new
financing because of lack of incentive unless the remaining large
houses are going to do all the business after the smaller operations
are forced to quit business.
7'7''K7;"
.

NEW YORK

CFTX.':^^

777-

Adverse, I favor 10% to 12x/2% spread especially

;;7;:7;;v,

unlisted and

on

A SMALL INDIANA TOWN

It will ruin the market for smaller

SMALL PENNSYLVANIA

Drastic (lack of incentive).

We

What

TOWN

dealers in business for?
and be in the

are we

;-;';'777 .7'

7;.

,

would be a

can't all be New York Stock Exchange members

Why can't the dealers all over the coun¬
break on commissions for business turned over to
Exchange firms? They want this business, but the dealers can't exist
on "thanks yous."
They have to act as "principal" most of the time—
unless their volume through prestige advertising, etc., is such that they
can easily afford to act as brokers.
be given

This 5%

a

V7,;7V7;:A:

figure is asinine

on

small transactions.

merce

by

the Interstate

Com¬

Commission.

Guaranteed by the Texas & Pa¬

Railway and Missouri Pacific

Railroad,

proceeds from the
applied to re¬
demption on Sept. 1, at 107x/2 of
an
equal amount of outstanding
first 5s due Sept. 1, 1964.
the

issue would be

prices,

?

substantial in
,

find

•

several
'

the

■

':

in¬
• '

situation

>-

■;.;7;77:7/v;;-7

4, Will eliminate

of any sizeable corporate

cleaning
Utah

and
up

report

corporations securities.
setup.

under¬

loose

ends

-

.

who

are

7';: 7;.:;:

77-7

y%77/7

77

7/777 7; .7'
77; 7v\7>

the

markets

•

for ' smaller

Am opposed to the entire crazy New Deal

7'7; •7-";

/■■

'•'•;,:7"

7 77 '7

WALLACE, IDAHO

•;''7-:/

7

'

It would kill the effort.,

MINNESOTA, MINN.

(From firm favoring rule)

&

Light 3%s due
1968, have proven the star per¬
Recent Issues Strong
formers, in the grouping, com¬
By and large the majority of manding a premium of practically
recent new issues; are command¬ a full 6 points over the offering
ing premiums over their offering price of 100%.

broker

.7.;.

nicely.

Power

" 7

yakima, wash.

small

aided materially by the absence

takings

SPOKANE, WASH.

7

Believe it would be unfavorable.;

We dealers can't

stances.

Dealers

SMALL NEW JERSEY TOWN

7 As dealers in unlisted securities, operating almost entirely with a.
organization working on commission, it has practically forced
us out of business.
*
' "
" -"7
• ' "
'
"
7

sales

■

proval

cific

,

7,"'' :';7/777;.

There just would not be any market and if there
market true value would not have any consideration,

select chamber of Finance.

try

7;t/7;.

;77v7

corporations.

LITTLE ROCK, ARK.
A

new

the

trader

then

It is
no

ELMIRA, N. Y.

issue loomed as a pos¬
the corporate market

week, namely the $6,040,000
of
30-year mortgage bonds on
which the Texas-Missouri Pacific
Terminal Railroad of New Orleans
this

;j

lation.

Com¬
in handing down its ap¬

One Issue This Week

any

restrict anyone's profits.

the

ex- 5

ceeding the powers and anything granted it by congressional legis-

evidently delay on the part

proval of the undertaking up to
this time, and the proximity of the
new
War Loan Drive, have re¬
sulted
in pushing the
business
back into the "futures" list.

rules by

any

or

profits

have to be compensated for as well as a reasonable

profit to the salesman and'the dealer/

of the Interstate Commerce
mission

opposed to the enforcement of the so-called 5% mark-up

are

or

If

facts, it does not appear to be the American democratic

securities.
But

CITY

eventually decline for lack of sponsorship.

over-the-counter securities.

well

We
rule

and professions should likewise be lim-;
ited as to the gross mark-up they could take.
You cannot legislate
NEW YORK CITY
honesty. The dealer or broker should be required to investigate all
prospective salesmen, customers men and closely supervise their'
It will limit the channels through which capital can be raised by
j
Only by careful investigation and constantthe smaller corporations.
After all, the distribution of securities can- j activities at all times.
not be accomplished without an outlay of time, effort and expense,
j supervision after employment begins can our business be safeguarded.'
It must

vestment funds that up to now

pretty

CITY, UTAH

NEW YORK

completed
plans for the marketing of this
operation which was to have in¬
volved some $10,000,000 of new

have

why we should all suffer for the mistakes of'
The competition today is too keen and the public are'

.

limit

that

by

CITY

market with little demand of the issue.

outlined

and

few.

a

becoming too educated to be taken advantage of to any great extent
and responsible brokers are too interested in the welfare of their own'
clients.
I have been in the brokerage business over 30 years and am'
doing business with the same people that I started to do business with:
20 years back.
I congratulate you on the stand you are taking and
believe you are 100% right.
!
.\ 7:7;-:7;7';

CITY

It is my belief that if
with the NASD it would be better for all concerned.

A very narrow

a

issuance
of 20-

projected

Capital

by

and do not understand

possibly

PITTSBURGH, PA.

subsidiary of the North Amer¬
ican Co.

take out social security and other taxes, '

I, personally, do not believe many security dealers have deliber¬
ately overstepped in charging excessive commissions for their services

mark-up rule will hinder the smaller corporations

Rail way |&

Electric Co. which in turn

we

;/

Any regulation must have a bad effect.
away

By the time

there is nothing left to make it interesting for a salesman to spend
his time working; 7,777;7;.; ;7:7
:/ - ■ \'7' • ■ \,:;V
'■■■■:.v.-/

CITY

NEW YORK

opinion in regards to markets on smaller corporations will*

the 5% rule.

from getting money.

they did

my

:

KALAMAZOO, MICH.

inactive and dead for the simple reason it will be impossible to*
hire salesmen to work and travel on a commission basis according to •

securities of smaller corporations

NEW YORK

brokerage house teams

In

v

■

;

be

practically cease to exist.

Leaders of the various

and

;

by using the phrase, "A Small Maine Town," as an example,
or its
equivalent.

"None Shall Escape."

sage

f

mark

I believe that the market for

;:;7.r'7,

companies will probably go to R.F.C. for relief.

this time and that

None.
los angeles, calif.
Definite

lack

of

interest

on

spread and hard to find markets.

part of dealers resulting in wide-'

-iWn

Volume 159

Number 4286

THE COMMERCIAL &

•';;,.-.v city not known
In time it would

.

for

goes

either

American

.

Can

cause

large
and

or

General

Kreuger and Toll

memory,

-v..

,.

.

fold-up of the securities markets. That
small corporations.
Within my memory
a

Motors

big.

was

small.

were

Within

Look at it

the

same

I'm going to
fall.
Great

now.

scramble

some eggs: the bigger
they are the harder they
oaks from little acorns grow.
'

she'd prefer the maid.

will have to do this if they have
been
allowed
materials
or

not

tools

the

for

preparation of

If the SEC and the NASD

ing

quantities

•intends to fix prices then something definite and far reachihg should

find

be

them, and

determined, and that definitely,

know what to do

and what to

so

the

of goods.

It must
markets for

necessary

dynamic selling pro¬
gram must be prepared at once.
All

the

and

new

a

plants,

new

"'.-vV" [^>0chicago, ill. ' V

There will be

no

_

market for such securities and

possible growth possibilities for such companies.
-unconstitutional.

■

It will

cincinnati, ohio

less kill the market.

more or

'above type of

security, but

can't

often

we

'

done

be

■

."interest"

no

or

on

a

5%

:

do know they need
mark-up.

market and'it

a

-

*

buffalo, n. y.

Neglected with a consequent drop (a precipitous drop) in market
value regardless of intrinsic value.
t

Will restrict distribution and limit markets.

-

m -mm:syracuse,

^

'

V;

vsml

It will adversely affect the markets for securities of smaller

;

porations,

as a

discriminating

a

Instead of

I don't believe there will be any market left.

.

time

wild

a

to

spend its wartime earn¬
ings.
Of course, there will be
folks desperately in need of trans¬
portation and equipment.
They
will buy any old model, and along
with their rush for nylon stock¬

demand

is not

demand

and

'

>

only

this

same

affords

be carried

on

momentum

a

with

might

and better

new

Our

post-war

markets

services

be

long as Europe
we shall have

rebuilding,

armed

will

Our

men

stationed

in the
08

in

countries and scattered through¬
advertising,, overhead and sales expense put ; the world are
introducing
market for the sale of securities of small corporations. American
products to an extent
Without a market and the interest of the
public in the purchase of never known before. Russia is in¬
securities of small corporations
through advertising and personal quiring already about the
prod¬
solicitation the distributions, of these securities must go out of business.

*

obtaining

a

philadelphia, pa.
am

uncompromisingly'opposed to the 5% mark-up rule.

prove ruinous to individuals such

as

myself.

Jt will

■

average

,

most

.

:

Actually, I do not believe the 5% rule will have much effect on
prices. As you note, we are not members of the NASD so that the
expressions of opinion that you request on the other side of the sheet
are purely academic with us.
It happens that our, firm ceased to be
member of

the NASD when the head of the firm
thought he was
going into the armed services, and in the light of the way in which
the 3NTASD has harassed its membership
during the last two years, we
have never seen anything that would cause us to wish to become
a member of the
organization.
It is our belief that our business
should ultimately become a
profession, and that it should be composed of men of good education, and that under these conditions, it,
as a
profession, should be just as capable of determining what its
compensation should be for services rendered as any other profession.
a

■

*

We have also felt that the whole procedure that the NASD has used
has been very un-American and that there was
could possibly be in mind and that

dealer. '■ '

■'■■■'

was

only one purpose that
to drive out the small private

'■-

-v..-

new

A very depressing and limiting effect.
concerns to finance themselves.

Would be impossible for

Will We Have An Economic

I

Pearl Harbor After The War?

:

fji ;W:''

(Continued from

However, two stumbling blocks
to furthering reconversion should

The slight amount of

be removed.
materials

models

new

be

and

released

tools

have

should

in

the

will

we

bottlenecks

started.
for

men

can

ease one

in

be

machine

released

If this work

work.

how,

to •»'

dies

and

Cut-backs

field

for making
samples should
industry.
New

necessary

of the chief

readjustment

our

Baruch

-

this

be started

program.

The

tool

Hancock

";
report

says:,"Reconversion will be quick¬
ened and possible unemployment
offset
proportionately if
those
Industries which have retooling
problems
in
connection
with
peacetime output are permitted to
tools in advance of the end

secure

of the
tities

war.

of

wanted

.

.

.

Reasonable quan¬

materials

for

testing

that
new

will

be

products

should be released.''




page
A

old

2254)

readjustment policy based
models

of

on

durable

consumer

goods may hamper the transition
from

to peacetime production
and lead to unemployment. There
war

be considerable resistance to

may

these old models if the

consumer

feels the manufacturer is
back.

efficient

war.

The

program

of

holding

reconver¬

sion facing the automobile indus¬

spent four times

During the
low-income
ers'

bring out old models.
The public, aware of the
'mag¬
nificent reeord of industry

during
wants prompt advantage

the war,
of the recent
and

technique and the

materials.
any

advances

4of

,

While

the

drawn from

not

fantastic
thin

in

skills

many new

expecting
fantasies

air, it certainly

does expect some progress.

However, unless the suggestiohs
in the Baruch-Hancock
report are

thousand

sand

That

ing

and

and

stockbrokers before the war,

today
tion

experts in radar, avia¬

are

or

ordnance.

handling
not

be

The young

Flying

a

satisfied

pilot

Fortress

with

will

inefficent

office equipment or farm machin¬

The soldier familiar with the
Walkie-Talkie will want the lat¬
ery.

in

est

radio.

The

G.

I., wearing
clothing and shoes which fit him
as

well

his job in every

as

climate,

will expect the same comfort after

the

Men who have had

war.

ex¬

perience with planes expect to

en¬

the

great

business

may

bring about

after
a

the

and

war

produc¬

mass

more

income

thou¬

per

year.

constitut¬

group

market

mass

than

money

statis¬

their

ever

has

before for

the purchase of consumer goods,
but it can't get many of them be¬
In the post-war period, the in¬
of these people may not

comes

be

Overtime

large.

as

counted for

has

ac¬

of the war-time

some

increases: overtime in 1943 totaled
billion

In

dollars.

1943

But

these

accumulated savings.

alone"' these "

savings

amounted to 37 billion dollars and,
for the four years 1940 through

1943, according to the SEC, they
totaled
$125,400,000,000,
which

ilies
for

like

to

have
the

whale

a

a

first

of

lot

a

of

Many of these fam¬

me.

nest

egg

time

in

put

away

their

lives,

have earmarked funds for spe¬
items.
And it is interesting

or

cial

to note that

private in the Army
getting $600 a year is just as well
off from the saving angle as* a
family with an income of $3,000
a year.
It seems to me that after
the

war

spend

a

when people have time to

this

of

they
are going to apply their wartime
education and be discriminating
in their selection of products.
some

However,
intend

money,

people do not

many

to

spend all their money
products. Recently a survey

for

tion of planes.

made by the Citizens Union Bank

To get a clue, recall the influ¬
ence
of
a
much
smaller army

of

after the last
for

They accounted

war.

the

acceptance by men of
wrist watches, ready-made cloth¬
ing,
and
cigarettes
(the three
brands

that

Louisville, Ky., covered wage
earners and found that, after the
war, 30%
of this group intends
to invest their savings in ways
that

will

for

additional

earn

them.

They

expect

profits
to buy

most popular
namely Camels,
Lucky Strikes and Chesterfields,
are still the
leading brands). Ac¬
cording to John Shepherd of "Es¬
quire," they squashed a 23 million
dollar stiff-collar
business, and
changed underwear from the BVD

only 17%
of this
group intends to buy new auto¬
mobiles, and only 29% plans to
purchase
new
refrigerators
or
other home furnishings after the

type

war.

were

with the soldiers,

shirts

to

and

shorts.

The

service men were introduced to
the- automobile and brought about
the boom in that industry. These

changes
cause

took

place- quickly

the armed services offered
to

sample and
Imagine what

chanical and scientific
to

As

-

a

test

new

this

me¬

war

will do

post-war products and

our

kets!"

be¬

mar¬

-■'

stocks and bonds
rent

is

Mollie

the

friends

in

machinist
the

know whether

war
a

woman.

and

her

plants

will

vacuum

cleaner

is well made and looks

others.

even more

This

,

real estate to

30%

figure

impressive when

desire
a

contructive

part of wage
Our

or

That

you

that

share indicates

tax

invest

to

and

forward-looking
attitude

on

the

to

me

tween

there is

been

a

comparison be¬

tools

policies
which

redesigned.

controls placed out of

The machine looks both

reach.

complex

cials who have grown up with the
machine and are accustomed to its

-

began, will look for
saving, time - saving and
features

—

although

to young workers.

appearance

and

leads

to

Along with high levels of em¬
ployment in the post-war period,
there should

be rewards for tak¬

ing risks. It is the expectation of
profits which makes the wheels
of

industry

around, and ade¬
needed for high

go

quate returns

are

peacetime employment. Under our
present income tax system there
is

double

taxation—first

corporation and then
vidual.
who

the

on

the indi¬

on

It is the small stockholder

suffers

most, for the same
percentage is first taken from his
share of the earnings as that taken
from
the
large
stockholder's.

Without

set-up

giving

the

some way

eliminate

this

to practically
corporate tax and

the earnings

pass

corporate

undue advantage, there

any

should be

to the stocks-

on

holder.

Management could then
plan more efficiently and this'may
mean price benefits for the con¬
sumer, and more money for the
worker.

Financing will

be

needed

for

productive facilities to bring
increased purchasing power, and
new

in existing securities
bring this about. Balance

will not

sheets appear substantial, but un¬
der the increased price level there
is some question whether
corpora¬
tions have sufficient working cap¬
ital. However, private industries

going

are

concerns and their bal¬
sheets should not be looked

ance

by

upon

banks

and

investment

companies

as if they
liquidated.

be

to

The

desirable

about

were

shift

to

more

equity ownership will be slow in
coming; most people still prefer
income-bearing securities.
Mil¬
lions

of

workers

who

buying War Bonds
want to

may

are

continue

sibly

some new

nominations

now

month

every

this

of investment after the

form

Pos¬

war.

bonds in small de¬
be issued month¬

can

ly for private financing of public
improvements and benefits such
as housing and
transportation de¬
velopments. The carrying out of

these projects should be done by
private industry in keeping with
regional plans, but the money in¬
vested by the public

tected
ment.

by local

might be
State

or

pro¬

govern¬

In this way, people can not
desired form of

only have their

investment, but participate in the
building of better communities,
and they will be conscious of the

expenditure of their money. Fi¬
of
individual
homes

nancing

shpuld be made
ing

a car was

simple

as

before the

antiquated fees and
the

initial

stages

as

war.

buy¬
The

in
purchase

expenses

of

should be eliminated.

The

shift

from

to

war

peace¬

time production can be made with
a
minimum
amount
of friction

under adequate preparation. Ma¬
terial should be made available
for

making

models

perimental
dies

for

started.
for

their

and

for

ex¬

Tools and
products should be

purposes.

new

The desire of the people

better

things

desire

for

is

symbolic
better

a

of

world.

Will

they fulfill these desires
through some Government agency,
or

will

industry

better goods

get

more

and

into the hands of

a

greater number of people; thereby

maintaining
raising the
Will

we

employment
standard

of

and

living?

adjust our tax and fiscal
that there will be in¬

so

centive for all?

To meet this challenge requires
full creative energies in peace
as well as in war.

our

Brtehfc Possibilities

the

of many years, gadgets and
accessories have been added and
course

and involved and does not

automatic

worker;

and

since the

labor

the

to

greater productivity.

have

Over

right. Mrs.
Housewife, who hasn't had a maid
war

gadgets, and places controls within
easy reach. It is a source of pride

policy

fiscal

present

our

machine

some

new

more efficient.
It correlates the parts, eliminiates useless

earners.

and

policies
should be designed to meet the
needs of this generation. It seems

not

always, there's the

to

realize

and

makes it

of war-time restrictions.

cause

phases of the avia¬

tion

or

means

the

more

than

earn¬

dollars,, two

dollars,

sounds

were

rather

ticians'— increased
one

changes. A successful redesigning
simplifies the machine and

job

investment

several million

war,

families—wage

families

»

con¬

a

as

for these goods.

money

things.

to

products

Fellows who

much for

as

family with an
income of less than $1,000 spent

soda

chance

excuse

goods

sumer

jerkers, truck drivers, statisticians

not be used

as an

pronounced effect

out post-war

upon

markets.

try does not apply to manufactur¬
in many other fields and must

ers

by them

equipment, cannot
a

ter the various

south bend, ind.

family with a yearly in¬
$2,000 and $3,000

people have

supply after the

can

products

between

come

ers

The 10,800,000-men in tjie armed
services, handling the latest and

consumer

industry, whether automobiles,
electrical equipment, home fur¬
nishings or food; and then the

12

help but have

portland, maine

of

of less than $3,000 per year.
Yet this group bought three quar¬

ucts which American manufactur¬

•

I

•

war

40%

as

when they do, they will want ad¬
vanced and efficient housing and

Will provide no funds for

in

were

many

these couples have not established
homes of their own to date, and

as

things, and some of the post-war
goals might then be realized.

little competition.

newark, n. j.

the

production started.

However,

needs

'

>

As

of

world wide, and as

birmingham, ala.

.

two-thirds

ters of all the

cor¬

larger mark-up than 5% is needed to distribute them
in competition with the securities of the
larger corporations.

<

be

chance to get

chicago, ill.

•

and

marriages.

its freedom of choice when it has

new

Very bad.

*

'

n. y.

riages

scramble, the public will exercise

ment
■

changing habits and tastes.
During the war we have ex¬
perienced a boom in marriages.
In 1942, there were 1,800,000 mar¬

comes

will

ings, they will cause the first
flurry in the market. But replace¬

cincinnati, ohio

caused
and is

market

buyer's market.

;

We do not often handle the

economical

more

buys.
Rationing has
sampling of new things

placement boom, which is apt to
be short-lived.
The big post-war

We must not be misled by a re¬

,

The rule is legally

often

are

better

home furnishings.
Let's look at another angle. In
the middle thirties, 85% of all the
families in this country had in¬

1

■

••;

:,i

■.'

the prod¬

can move

ucts.-

:J■ :V

models

new

materials won't be worth

much unless it

expect.

se¬

priced lines, she has found that
higher quality and higher-priced
goods

transaction.

her to

terminated, it is absolutely neces¬
sary to start production quickly

and

on any one

cause

lect products which stand up bet¬
ter. With the elimination of low-

new

contracts

war

much.

that people engaged in the busi: ness would know what to expect and how to proceed in their opera¬
tions.
If people engaged in this business are to receive a commission
then state the commissions definitely on everything so that we will

*

critical and will

5

profits should be

/

The inconand her
unsatisfactory
experience
with
Victory models, have made her

are

When

The effect of 5% mark-up of securities will not affect us very in order to maintain employment
That is, if we understand what the 5% mark-up means.
In and increase the flow of civilian
running a business what one makes on anything he sells is after all goods.
Management has achieved a re¬
expenses are paid and what is left from the gross sale is his profit
'Which I dare say is not 5%. We object to it on account of the lack markable record for wartime pro¬
of agreement on the part of any two firms agreeing as to what the duction, and can produce stagger¬
.

2275

venience of repairs today,

delay pro¬
products.
They

neW

of

/

FINANCIAL CHRONICLE

carried out soon, many manufac¬
duction

wmW»

«v.>

turers will be forced to

models.

,>"!■ 'V/s':..v

birmingham, ala.

■

,ut-

appeal
Company offi¬

Giant

Portland

low-priced

stock

with

Cement

in

an

is

a

industry

a bright future and offers in¬
teresting possibilities, according
to a circular prepared by Lerner
&
Co., 10 Post Office Square,
Boston, Mass. Copies of this cir¬
cular may be had from Lerner &

hestitate to make any Co. upon request.

v

22 76

THE COMMERCIAL & FINANCIAL CHRONICLE

Bank

Churchill Sees Need Of World

Developments During

Powers And

And After The War
(Continued from page 2251)
ate

reduction

the

tinue during the wai* it is
certain

that

the

almost

will

ratio

con¬

ment

into

them

"When the reserve ratio of the
Federal ' Reserve < banks
ap¬

nance

limit of
.40% in 1920, it was followed by
'the adoption of credit restrictive
; pleasures by the Reserve authorcities and a sharp increase in the
statutory

the

discount

Reserve

the

of

rates

banks, followed in turn by a ma¬
terial decline in prices of high-

{

bonds,: including Govern¬
ment
obligations.
Anxiety has
been expressed that if the ratio
grade

Should

again approach the statu¬

tory limit the consequences will
be the same as in 1920.
"There is

"

•conditions

similarity between

no

they, exist today and

as

shortly

prevailed

which

those

At

after the end of the last war.

by the banks.
"The

The member banks

heavily indebted to the Re¬

were

banks

serve

there

and

dence that bank credit
abused.

that

at

being

was

restrictive

Credit

imposed

ures

evi¬

was

meas¬

time

and

should

,;

ments will lead to

increase in

an

the volume of deposits as well as
excess reserve balances.
Since

of

the

banks, particularly
in the
larger cities, have learned to oper¬
without

ate

will

success

reserve

bal¬

it is quite likely that they

ances,

use

their

funds to buy

excess

Government

short-term

the

opportunity to reduce
their holdings of short-term Gov¬
ernment obligations.
"The economy of the country
at the end of the

war.

liquidity

Hence the

demand for bank credit cannot be

is generally expected.
Furthermore, the needs of the
Treasury to control the money
great

so

there must be

war

who

keep

;

as

Churchill

"There

;

tion

world

the

of

volume

in
earmarking of
gold for foreign account. It would
merely bring about a rise in in¬
currency

the

or

short-term

be

bounds

which

and

a

moderate increase in the

turn

of

obligations.

Since

eliminate

not

which

reserve

Would

be

only

Government

"

unnecessary

unwise.

,

"In all likelihood, therefore, the
decline in the ratio will not affect

bodies

continued.

"Efforts will undoubt¬

edly be made to establish finan¬

medium-sized

the disposal
authorities to

at

monetary

either increase the ratio

or

to pre¬

vent it from

declining further, the
suggested so far are
palliatives.
If the ratio

measures

merely
should

continue

institutions

cial

finance

to

business

Efforts will also

be

the

to

in¬

the banking facilities of
country and there will be a

crease

the

demand to widen branch banking
laws.
The country will also be

decline, as in
all probability it will, the most ef¬

confronted with the task of pass¬

fective solution would be for the

stabilization

to

Congress of the United States to
pass

legislation which would

thorize

the

Board

of

au¬

Governors

#>f the Federal Reserve System to

ing

legislation
of

establishment
this

dealing with
currencies,

of

institutions

the
the
for

well as with fi¬
reconstruction
of
the

purpose,

nancing

as

battle-scarred

countries

of

raise and lower the ratio require¬

world. This legislation will have a

abroad effect

the range of 20 to 40%. The ratio

the

of considerable

importance at

the time when the world at large
was on the gold standard, when
the currency was freely redeem¬
able
into
gold, and when' the
amount of gold held by a -country
exercised
considerable influence

the

on

expansion

of

power

its

banking

system* as well as on
rates. At present the cur-

money

•rency'of

the operations of

on

It

banks.

is highly

desirable
that
the
banks, through their
various ^associations,
give these
problems
careful
thought
and
evolve ways and means of

solving

them along sound lines.
"The huge public debt and the

possibility that

the

their

these

relations

with

formidable

foes

we

are

one

to try to prescribe in
precise detail exactly what solu¬
tion should be found.
The mere
power

attempt

for
forward

put

for

on

us

our

to

us

do

what

so

is

and

arguments when the time

and I shall not even at¬
tempt to parade the many ques¬
comes,

tions

and

arise

and

in all

difficulties
which

at

will

present

minds."

our

The Prime
dress

which

are

Minister

asserted

in his ad¬

the

that

"Atlantic

Charter remains the Guide Post,"
stating in his remarks that "con¬
always

proceeding

are

three

mon

the

interest ser¬
vice alone thereon may amount
to 5 or 6 fciillion dollars and the
fact that'about one-third of the

country of importance total debt may be held by the
into gold and. the •banks of the
country will un¬
metal is used primarily doubtedly stimulate agitation for
no

agreement.

have already

A

few

things

become

quite clear
prominent at the
conference just concluded.
and

were

very

"The first is that

fight

Nazi Party is

tinuing
is

the

mains

stripped of all con¬
of doing evil. Next

power

that

Atlantic

Charter

re¬

the

guiding sign-post, ex¬
pressing the vast body of opinion
among all the powers now fight¬
ing together [against tyranny.
"The third point is that the At¬
Charter in no way binds

lantic
us

It

about the
has

future of Germany.

quality of

no

contract with
no

offer

to

render.
that

our

the

If it

offer

was

a

bargain
It

enemy.

Germans

had been

to

or

was
sur¬

offer,
But the

an

rejected.

principle of unconditional surren¬
der which has also been promul¬

adhered to as far
Germany and Japan are
concerned, and that nrincinle it¬
self wipes away all-idea of any¬
will

gated
as

be

Nazi

thing like Mr. Wilson's 14 points

yellow

paying for the
exnorts

over

and for hoarding purooses.

For

a

nation which still holds 21 billion

the purpose of relieving the debt
burden
at
the
expense
of the

dollars of gold to worry over the

blood
banks

erate

outflow

of

gold,

mod¬

is, to

say

ihe least, highly academic.

V

bt

Banking Develonments After

!;;

the War

•

"Banking

in

the

ernment

by

an

securities

post-war

ne-

that

accompanied

increase in the volume of

bank deposits.
the

It is almost certain

deficit

pf

the

Govern¬

ment will not end with the

tion

of

hostilities.

of

cessa¬

Furthermore,




should

nation

a

not

and

be

the life

credit is

that

the

the cells through which
this life blood flows. Any tinker¬
are

ing with

the public

effort

solve

of

the

to

banks

it at

debt
the

or

aster.

exoense

or

measures,

.

"There is only one way of solv¬

ing

the

public

debt

burden

and

that is through increased produc¬

tion,

enlarged

national

income

and the practice of economy

miblic bodies.

that

a

cial

by all

The fact, however,

large portion of the public

banks

of

the

the

commer¬

country

will

dangerous
for them if thev should individ¬

make

country's provisional
'is

exceedingly

it

because

Soviet

V

"He

wish

commit

of

the

French

France, which

control, without
than

we

now

"But

he

France.'

emphasized

who

they

allege

have

betrayed

them—that cannot be imagined or
forecast.
All I can say is we shall

vited
to

utmost to make the ordeal
and

little destructive

as

General

'pay
From

c

Charles

visit

us a

also

the

Associated

possible. We have great hopes
that the city of Rome will be pre¬
served from the. struggle, of our

marks of Mr. Churchill:

armies.

deal

"

"From Italy one turns

naturally
Spain, once the most famous
empire in the world and down to
this day a strong community in
a
wide land with marked per¬
sonality and distinguished culture
among the nations of Europe.
,
*
to

"We

"I

today
to speak
about Spain.
Let

words

this hope, that she will
strong influence for the peace

add

me

be

here

am

a

of

Mediterranean

the

The

•

after

the

internal

political
arrangements in Spain are a mat¬

war.

ter

is

for Spaniards

not for

affairs

as

themselves.

It

advices

from

London;

24:v;:yyy:Py.;:;y:' yy,' -/

"He told Commons that the Al¬

lies, after giving Turkey $80,000,?
000 worth of American and

ish

arms

ous

United

Brit¬

'have

suspended
the
process of trying to exhort Turkey
to range herself with the victori¬

Turkey's

Powers.'

recent

He

called

suspension

of

chrome shipments to the Nazis

'generous

gesture,'
would

it

not confronted with an

but

made

it

her

'a

win

not

strong position at the

a

embody a great
gaine'd for
the world by the structure and
form of the League of Nations.
all

We must
tion

arm our world

and

the

have

we

make

limits

assigned

organiza¬

that

sure

to

within

it,

it

has

overwhelming military power,
"We
all

must

be

remember

y

shall

we

hard

put to it to gain a
repair
the
devastation
been wrought and to

living,
which

has

give all that wider life and
comfortable

life

deeply desired.

which

P

.

''

more

is

so

;

,

."We must respect the

thoughts

and opinions of others while hold¬

world for the happiness and pros¬

perity

of all, and in the end it
capable of giving happi¬
prosperity even to the

must be

ness; and

guilty;

and

vanquished

;

There

must

great

world

be

nations;

■«

within

room

this

organization for an
organism like the British Empire
and

Commonwealth,

call it,

and

.

as

we-

now

I trust there will be

also for the fraternal associ¬

room

ation

of

the

British

Common¬

wealth and the United States."''"'

table
Attractive Situation
which she would have had had
yuy
she joined the Allies.' ..PkV
Laclede-Christy Clay Products
y.yy.i
Copy
"He
common, which is listed on
proclaimed
the; British
Commonwealth., and
Empire in the St.* Louis Stock Exchange,
offers
an interesting situation, ac¬
complete unity to go on with the
Allies 'to beat the enemy as soon cording to a memorandum issued
as possible.'
by Herzog &. Cm,' 170 Broadway;
:
:
"In

touching

Russian
ister

peace

British

on

and

relations, the Prime Min¬

said

it

seemed

to

the

be

New

York

City. C-Copies of

memorandum
from

Herzog & Co.

this

be

obtained

upon

request*

mayv

great desire of the peoples of both
countries to be friends, and re¬
ferred to

Attractive Situations

'marked departures

the

from conceptions which were
ago for

years

reasons

we

held
can all

understand.'
"He reported that peace terms
been offered to Rumania by

had

Russia and described them

as

're¬

markably generous' in many re¬
spects, saying they 'made no sug¬
gestions of altering the standards
of society in that country.'
Simi¬
larly, he said, the Soviet had been
'very patient' with Finland.
"As for Greece, where the Brit¬

The

and 'all parties
represtented in the new
to

national army,
bands be

illa

which

formation

will
of

a

in which all guerr¬
incorporated.'

Loft

in

Laboratories offer attractive pos¬
sibilities according to a memoran¬
dum issued by J. F. Reilly & Co.;
Ill Broadway,; New
York City;
Copies of these interesting memo-

pnda

mav

be had from the firm
'
P "■}

upon request.

■;

;

'yy;.-'. ;i;

Interesting Situation

ish have been

trying to end inter¬
strife, he reported 'complete
unity' was reached at the Leba¬

situations

current

Candy, Corp.,. Majestic Radio and
Television, and /Allen du Mont

nal

if.

Common stock of Federal Wate#
&

Gas offers

attractive

an

by

a

Boenning

situa-fl

memorandum
& Co., 1608

Walnut

Street,.-Philadelphia, Pa;;
Copies of this interesting memo¬
randum

may

ning\Sc Co.

be had from Boen-?

upon

request.

"He told. Commons he had re¬

inventory

ceived a message from King Peter
Their as-: of Yugoslavia saying the Prime
Cabinet
had
re¬
perhaps sounder and more Minister and
liquid today than ever before in signed and a new Cabinet was be¬
ing
the history of the nation.
formed
to
assist
all
active
re¬
They
or

'
our

structure

of

itself

conversion problem.

sets

re¬

undoubtedly in

Government,

are

we

the

to meddle in these ing firmly to our own faith and
There must be room
Government." yfyyy1- conviction.
in this new great structure of the

Other points brought out in his
we
note
in
Associated

May

Press

us

a

address

Press

must

world

.

kindly

Gaulle

further from

quote

Greek

They

de

here in the

over

future.'"

near

devote

favorable position.

our

knowledge

of the situa¬

possess

tion in interior

upon

fall under

more

further

a

thi$

committee

may

issued

in

not

at

stage to imposing the government

tion, according to

"The banks of the country are

coun¬

do

ourselves

conference

debt bur¬

'we

that

argued

to

be

increasing the

not

'

,

will

the country.

gov¬

are

their

represent

tries.'--'

non

den of

we

as

ually or collectively endeavor to
increase
interest rates,
thereby

any

through sleightis bound to
lead to economic and political dis¬
of-hand

jriod will be marked by a further
increase in the holding of Gov¬

fact

overlooked that

decline in the ratio

or over a

The

banks.

debt will be held by

the

Committee

on their way out; tainted with
that association,' and
in the way of destruction to a
disclosed
that r with
President
people they hate and despise, and Roosevelt's approval he had in¬

clear

must

we

all

together until Germany is
forced
to ; capitulate
and until
Nazidom is
extirpated and the
on

,

.

recognize

Germans will do

to

majority
this and that might prej¬
in gaining consideration
a

.

to

Liberation

that 'we
Allies, but that
shall have no dealings with the
moving battlefronts; and what the; Vichy' Government
or * anyone

as

only be settled af¬

can

of

the

have

represents
the
French
the
governments
of
Great Britain, United States and

Italy by the
will happen on

us

redeemable

for the purpose of
excess
of imports

able

Mr.

reason

Britain

and

it

sure

will be driven out of

our

;

of

consideration
#

short

facing have been beaten and
reduced to complete submission.
It would be presumption for any

the

ments of the Reserve banks within

was

to

proper

in

.

as

now

concerns.

made

equipped with
future wars or

those 14 points."
y
i;
v ■
Im part, Mr. Churchill also said:
"It is clear that the Germans

do

will also
witness
considerable
important
legislation dealing with banking to resolve difficulties and to ob¬
and finance in general," Nadler tain the
greatest measure of com¬

various

measures

and

each other
ter

are

surrendered

the

great powers
and others, and every effort is
being made to explore the future

capital requirements of small and

the

or

outside

establishment

between i the

"The post-war period

the credit policies of the Reserve
authorities.
Although there are

l>f

stepping

sultations

Banking Legislation

causes

ratio their adoption

not

short-term

on

re¬

measures

the

brought about the decline

in the

but

restrictive

credit

tiould

and

obliga¬

executive

,

allies.

our

"The

tions will be somewhat narrowed

by

terest rates and increase the cost

borrowing by the Government.

medium

and

Government

long-term

whose rela¬

power

should

period. There is, however, a possi¬
bility that the spread between

circulation

world

a

for the purpose
of maintaining peace I am in no
position to define.
If I did I

tion of the
fect

the

to

controlling

view

siderable changes in the post-war

be

powers

udice

rates will not undergo con¬

also

must

assembly of

One may,

therefore, conclude that

of preserving peace." Mr.
went on to say C.\ v

purpose

market will continue to be great.

same, credit restrictive
in 1920 could not af¬

coun¬

will
be
obligated to
within
certain
minimum
standards y armaments
for
the

particularly the sharp increase in

.measures as

world

a

cil

.the discount rate were intended
to break the speculative forces.
£Jut at the present time the adop¬

money

the

as

the

secur¬

This will offer the Reserve

will be marked by great

been

not

the

said

States

National

intend to set up a world order and an organization
all necessary attributes of
power in order to prevent

comprising the greatest states
' which
emerge victorious from this

by a return flow
of currency from circulation as
well as by an inflow of gold or a
release of the yellow metal from
earmark.
Both.1 these > develop¬

banks

of bank loans.

period

post-war

United

nation

wars

be marked

also

ities.

of

wave

a

war

In all likeli¬

production.

Churchill

"For

fi¬

to

from

by corporations will be absorbed

speculation
and a rapid increase, in commod¬
ity prices, accompanied by a sub¬
stantial expansion in the volume
of

order

in

conversion

Guiding Post

ject of French relationships,

Addressing the House of Commons on May 24 on the British
foreign policy, Prime Minister Winston Churchill declared that "we

planning of them in advance by restless and ambitious nations."
this purpose-of preventing wars," he
said, "there must be a
world-controlling council.
I am *
not talking about our purposes, being
brought up by the Germans
but for the purpose of preventing after their
defeat, claiming they

convert

will

Declares Atlantic Charter Remains

the

hood the securities thus redeemed

that time the country was in the

midst

cash

the

to peace

Govern¬

short-term

obligations

tinue to decline.

proached

of

amount

Assembly Of
Controlling Council To Keep Peace

ernment

y

monetary j it is reasonable to assume that a
of
stock of gold in this country. Since number
corporations
which
accumulated a
substantial
these tendencies are bound to con¬ have
in

Thursday, June 1, 1944

Mallory Interesting.

are

in

have the resources not merely to

sistance

finance all the

Churchill said he understood

legitimate business
needs of the country but to con¬
share

tribute

their

sound

international

financial

conditions

the world."

in

restoring

trade
-

and

throughout

that

country.

Mr.
this

meant severance of .General Draja

Mihailovic,

War

Minister

Chetnik leader, from

and

the Govern¬

ment.

"Swinging into the delicate sub¬

P. R. Mallory & Co., Inc., offers
an interesting situation, according
to an analysis prepared by Steiner,
;

Rouse

& Co.* 25 Broad St., New
City, members of the New
York Stock Exchange. Conies of

York

this' analysis

may

Steiner,; Rouse

&

quest.

-

•

had

be

Co.
■ y;

'

from

upon

re¬

Volume 159

Number 4286

THE COMMERCIAL & FINANCIAL CHRONICLE

Tomorrow's Markets
Walter Whyte

Savs

Two large syndicates, including
them most of the im¬

'7::

(Continued from page 2254)

>

banking and
dealer firms of the country, sub¬
mitted bids yesterday for $41,533,000 bonds of the Consumers
portant

September 1943 is an¬
And
going back to
July, 1943 we see the tough¬
est one of all—the 146.41 fig¬
ure
from which they nose¬
dived sixteen points. In order
to take';care of.these levels a
other.

volume

more

has

Public

sented

#

:<«

invasion

of

,:7.yr7:77;

>

Harriman
Lehman

6.

will

Bids

be

only for the full amount of

each

lot

the

ders

May £9,1944

have also

in

the

of

sale

the market

hold. In

as

a

as

Sale of the

making a new high is usually
good for an additional five to
seven
points, and quickly too.
Jn a market, between hay and :
grass, as it were, the Along <
term

effect

of

the

able
the

move

starting in a stock
registered a new
high' we see dullness, - fre¬
quently followed by a minor

Currently

have

you

stocks, Crane

22W

at

Revenue

bonds,

$805,000

City

Electric

Plant

of

Los

Au7

status

bonds

rather

county bonds

decision

County

eases

columns

in

the

in

the

optional

The

in

available

because

restrictions

current
at

comes

of

new

on

borrowing.

being distributed by B. V. Chris¬
two tie &
Co., of Houston. The anal¬
(now ysis was prepared for the bond
house by Messrs. Vinson, Elkins,
Weems & Francis, municipal bond
attorneys of Houston.
.
,;

ably remain substantial balances

A

issued

by
sets forth the

memorandum

bond

house

type of county bonds, according

of

other

from

several
are

In addition,
undertakings

issues.

important

scheduled to reach the market

today,

$41,533,000
Consumers Public Power District,
Neb., refundings, and the $6,040,000 Chattanooga, Tenn., electric
power refundings.
7
7 ,
7
such

the

as

,

which

are

and

able

limitations preclude

SUGAR

the

full

our

of

text

dum today,

Exports—Imports—Futuret

s

authority,
believed to be call¬
non-callable.
Space

statutory

and

sue

our

the

at 93/4

Established 1854

:

Aferoberi

.7 New

York

Stock

New

York

Curb

New
•.

York

Commodity

.

•>.

Cotton

it will he given in
5.

v

New

Orleans Cotton

And

other

Corporation

Exchange
v*

-7

Trade-

Exchange

<

Exchanpet

CHICAGO
,

DETROIT

GENEVA,

to

pay

board will be

PITTSBURGH

SWITZERLAND




show

' 77";v:

7-7

THE

"

'

ATCHISON,

7

*

*

.

*

Thursday.

—Walter
[The

•••:.-■

Whyte

views

expressed in this
article do not necessarily at any
time coincide with those of the
Chronicle.

They

are

presented

those of the author only.]

-

■

as

been

'

a

substantial

.-,'7'.-

RAILWAY

of

Directors

New

clared

dividend

a

Oepts-.4*2.59)
91,

declare!

COMMERCIAL

the

on

share in cash

Common

Stock' of

INVESTMENT

stockholJers of record

June' 10,

The

1944.

July

TRUST

1,

1944,

the close of

at

transfer

books

7

dose. Checks will be mailed.

of

AND

has

Two

May 25, 1944.

COMPANY

York, May 23,
this

Dollars

share.

per

holders
tered

of

of

on

said

•

...

•

,

and

No.

Dividend

Preferred

June

Capital

will

Capital

Stock

regis¬

Company at the close
■'
mailed

v

be

•

-

.

to

of
who have filed suitable
office.
*„

Stock

therefor at

orders

the

1944.

30,

checks

this

holders

COPPER

25

New

York

The

.Board

4,

MINING

N.
of

May

25,

\

...

1944.

7

144
the

Anaconda

Cbppef Mining Company has: declared

a dividend
its Capital

,

Directors

Of

Fifty Cents (50c) per'share

upon

Stock of the par value of $50 per share, payable
June

26, 1944, to holders of such shares of
at
the
close of
business at 3 o'clock
M., on June 6, 1944.
JAS. DICKSON, Secretary & Treasurer.

record

CALUMET

AND

HECLA

COPPER

dividend of

twenty

cents

48

mailed

from

July 10, 1944: also $1.25 a share, as the second
"interim" dividend for" 1944. on the outstanding

.Common Stock, payable June 14. 1944,. to
stockholders of record at the close of business on
May 22, 1944. : 7't7,"

share

per

the

Old

Colony'Trust com¬

Boston, Mass.
A. D. NICHOLAS;' Secretary.
Boston, May 25, 1944.
•
,
,t ,

pany,

A. HOLLANDER &

Likes Liberty Baking

j

cumu¬

share

declared

on

the

Com¬

has been

Stock

payable June 15, 1944, to

stockholders of record at the close
business

of

Checks

5,

June

on

1944.

be mailed,

will

ing situation at the present time
memorandum

Newark, N. J.

Albert J. Feldman

May 22, 1944

Secretary

is¬

by Caswell & Co., 120 South

Street,

Salle

Chicago,

111.

Copies of this memorandum

may

THE

had

the

from

(send

firm

attention
7

-■

upon

of

re¬

Harold

7.'.-77.7.'

UNITED

Board

The

of

STATES
Directors

LEATHER CO.
at

a

meeting

The

National

31,

New

York, May 31,

1944.

Chesapeake and Ohio Railway Co.

Bank and Trust

Company of New
York offers interesting possibili¬
ties for investment, according to
a
memorandum issued by C. E.
llnterberg & Company, 61 Broad¬
way, New York City.
Copies of
this memorandum
outlining the
situation may be had upon request
from C. E.

Uiitefberg & Co.

A dividend for the second quarter

of 1944 of seventy-five

share on $25 par common stock will be paid
July 1,1944, to stockholders of record at close of business
June 8,-1944. Transfer books will not close.
cents

per

H. F. Lohmeyer, Secretary
0

,r.>B*f sriT

.

held

1944, declared the regular quarterly
dividend of $1.75 per share on the Prior Pref¬
erence
stock, payable July 1, 1944, to stock¬
holders of record June
10, 1944.
7
C. CAMERON, Treasurer..:
May

Merit, in care of Schen¬
Corporation, 350

Public

!

N dividend of 25c per

/ZgsogSk.

lative preferred offers an interest¬

be

"" '■

-<m-

.

Liberty Baking Corp. $4

a

•

SON, INC.

COMMON DIVIDEND

'

to

•'

'

W. F. RASKOB, Secretary

'

,

($0.20)

1944, to holders of the
outstanding Capital Stock of the Calumet and
Hecia Consolidated Copper Company of
record
at the close of business June 10, 1944.
Checks
be

a

CONSOLIDATED

NO.

will be paid on June 20,

will

dividend of $1.12#

COMPANY

DIVIDEND
A

194f

has declared this day a
share on the outstanding
Preferred Stock, payable July 25, 1944, to stock¬
holders of record at the close of business on

The Board of Directors

:j

Y.

Wilmington, Delaware: May 15,

CO.

Broadway,

DIVIDEND NO.

'

,

P.

& Company

WILSON, Assistant Treasurer,
120 Broadway, New York 5, N. Y.

ANACONDA

of

E. I. du Pont de Nemours

D. C.

Distillers

the

7

1

de¬
Fifty

Fifth Avenue, New York 1, N. Y

of

not

1944.

day

Dividend

Preferred

the books of

business

quest

Stock

to

business
will

the Preferred Capital Stock of this Com¬
pany, payable. August 1,-1944, out of undivided
net profits for the year ending June 30, 1944, to

Barclay).'

Public National Attractive

V
77

.

cents per

on

have prepared an attractive book¬

containing

7;

/:

-v

dividend of 69

CORPORATION,, payable

1944.

TOPEKA

FE

Board

let

-

/

has

W. C. KING, Secretary

SANTA

The

sued

■

Schenley Distillers Corporation

,

•

,'7;
A quarterly

JOHN I. SNYDER, Treasurer.

according

ley

Common Stock, Dividend

1944, to
stockholders of record at the

ing liens.

Available On Request

anything., Yes, they look
good, But they always look
good near a top. •
■

Exchange Bldg.

NEW YORK 4, N. Y.

doesn't

itself

7,77

.

Broadway, New York

close of business June 10,

was re¬

the
first
arti¬
cles in the series they have been
the latter stop of 9J/2 still ap¬
running in the "Financial Chron¬
plies. 7
vv;7,v .*
,; <- icle." Copies of this booklet may
be
had upon request by writing
I
don't recommend new

More next
N. Y. Cotton

power

.

Secretary-Treasurer

(OMTCRCIAL jNVESIMENTpJSI
77>7 coPvPKtmcN
:

Company, payable June 20,
common

premium in order to call exist¬

to Mark

;7'7

Beachley,

May 23, 1944

■

of One Dollar and Fifty Cents ($1.50)
share on the Common Stock of the

La

new

market

Exchange'.,

of

required

(now 10%). Both have

buys at present because the

Exchange

Exchange, •'•.«Inc." Y

Chicago -Board
■

municipal

E.

per

re-

241/2) and National Gypsum

DIgby 4-2727

H. Hentz & Co.
-

refunding of debt which

giving

highs but neither
acts particularly spry now. In
the former the stop at 22, and

,

it involves the

as

1944.
7

mon

funded only six months ago. As
in the previous instance* the

memoran¬

'■•■'.'v ;

;

latter is particularly in¬

teresting

issue of Monday, June

made

.

The

17,

June

on

19. 1944

.

of is¬

to popular name, purpose

NEW YORK 5, N. Y.

■•":

May 31, 1944

rather

est

the $2,50
payable on

on

Stock,

C.

Allied Chemical & Dye Corporation
has declared quarterly dividend No. 93

offering, however,

these, the $56,000,000 Cal¬
ifornia
Toll
Bridge
refundings
were
readily placed, there prob¬

The

61

7

overhanging the market
large as a result of re¬
cent large awards. While the larg¬
is

share

per

stockholders of record at

business

of

close

to

ALLAN,

Allied Chemical & Dye

time when the volume

a

Vi cents

Preferred

1944,

Secretary and Treasurer

Philadelphia 32, May

of bonds

Jefferson

(referred to in these

on

v

i,

recent

of activity not

source

war-induced

light of the State Supreme Court's
recent

numerous

State and local

of

7

c-

77

,

analysis
Texas

a

otherwise

Analyzed

day declared the regular quarterly

Checks will be mailed.

June 9, 1944.

on

Checks will be mailed.

Angeles :

tax-exempts and the latter find¬

Optional

of

the

Stock, payable June
stockholder? of record at

30, 1944, ,to
the close of business

$840,000

particularly when war loan
in the offing. They
have been proved profitable to
both sellers and municipal dealr
ers, the former cashing iifi on ex¬
tremely high prices prevailing for

District, consisting of eight

Texas County Bonds

the

WALL STREET

outstanding

this

dividend of 62

the Common

on

Metropolitan

ing them

LAMBORN & CO.
99

all

has

July

May 18) and its ear¬
lier rulings in the Cochran County
and Bexar County proceedings, is

reaction.

.

en¬

COAL COMPANY

Accumulated Surplus of the Company a
dividend of fifty cents ($.50) per share

programs are
,

redeem

to.

J!

Secretary

(Incorporated in Delaware)

Quarterly Dividend

years,

for

bonds will

J- p- TREADWELL, JR.

company

394,000 City of Detroit, $2,000,-

been

"divisional" issues.

catches up with a stock and
knocks it off. So instead of a
new

new

presently

averages1 •Status

after it has

2.25%

j

CONSOLIDATION

bonds, $605,000
City of San Francisco and $500,-

due

7:

District

the

of the

to

1972.

^

The

1944.

of the

turities

1955,

9,

\

i|

Both

The Board of Director#

State of Illinois Highway bonds,

maturities

January,

declared.

payable July 1, 1944, to

are

777

•

Cumu'ative

tric

bonds due

.

a r

transfer books will remain open,

The Directors have declared from the

Boston

follows: 3V2 %
«January,
1946,
through July, 1949; 2%% for ma-;

stock

stock

The Electric Storage Battery

000 State of Louisiana Highway
bonds, $1,800,000 City of Chi¬
cago
Water Works,
$1,000,000

The bonds of both Systems will

whole takes

a

bull market

a

dividends

been

holders of record June

$2,-

bonds. \ Both issues will be dated

bonds

30, 1944, and

May 24, 1944

bonds

are

July 1.

for

have

Stock

mon

175th Consecutive

District,
$1,000,000 Nashville, Tenn. Elec¬

1.80%

\

the Preferred Stock for the

on

;

a

states

company

blocks

the

included

financing is divided into
issues—$36,324,000 of Con¬
solidated Eastern System bonds
and
$5,209,000 Western System

"from

(llA%)

quarter ending Jtme

,.•

had July,

get through the stodginess of

^

quarterly dividend of 75# -per share

Secretary

i

000 State of Tennessee Highway
January, 1950, ■ through
bonds.
1961; 2%
January, 1962,
7. '7^.77 7 7 77
The offering is the largest single
their false starts. But unlike through July, 1969; 1%% January,
2V4% for bonds due January, 1972., transaction of its kind ever an¬
the averages they manage to
nounced and is being undertaken
All of the bonds due 1946get through their old highs 1954 are reported to have been
by the Mutual Life presumably
without too much trouble. But
for
the purpose of permitting re¬
placed with institutions.
The
investment of the proceeds in the
getting through such highs remaining bonds are being pub¬
coming Fifth War Loan offering.
licly re-offered at prices scaled
isn't enough. For once they
to provide to maturity yields ! Operations of this character have

meanwhile,

Common Dividend No. 137

^*V''

dividend of 20# per share an the Com-

W. M. O'CONNOR

each lot.

on

Among

are

coupons

A

m"

and individual bids must be

made

The

carry

declared
Preferred Stock
was

pany,
payable August 1, 1944, to
stockholders of record at the close of
business July 5, 1944. Checks will

associate

and

i

dividend of

a

share

per

Convertible 4% Series A of the Com¬

consid¬

ered

and

May 29, 1944,
dollar ($1)

the Cumulative

on

delivery will be made in that
city on June 13. No good faith
deposits will be required of bid¬

two

stocks^ in7the:

lots,

held
one

Preferred Dividend No. 153

cash payment in New York funds

making public
re-offering of the issue today.

for

Individual

Brothers

individual

meeting of the Board of Directors

a

and

7'777

Ripley & Co., Inc., and

underwriters

a

Company
At

that all awards will be made for

district

Smith, Barney & Co., Blyth &
Co., Inc.; The First Boston Corp.,!

a

June

on

like amount

*;.7 .77V7■'7 7

40

company's offices, 34 Nas¬
St., New York 5, until noon

sau

Jan.

a

which opens
in the announce¬

at the

2.32%.

presently outstanding

of

33

drive,

on
which sealed bids will be received

repre¬

about

1,1972.
nancing is to refund

and election,
will
major role in the mar¬
ket trend. But all the pushing
and prying in the world won't
give us the answer to either.
The market taking its cue
from the lack of important
news is
acting accordingly—,
by doing nothing. For unlike
many of us it doesn't have to
be
doing something every

r:

sists

1, 1946, to
Purpose of the fi¬

Jan.

Both of the above events,

play

of

instalments from

bonds.

;

basis

a

of the im¬

i

Bank Note I

NUMBER

forthcoming Fifth

12, is seen
ment
yesterday by the Mutual
Life Insurance Company of New
York, of an offering of $17,565,000
of its holdings of State and muni¬
cipal bonds.
The offering con¬

The bonds mature in semi-annual

*

^,5 d.;:$

which

tender'

a

Loan

June

Ne¬

of

Halsey
Inc., and associates,

Stuart & Co.;
offered

is the election.

one

District

War

cost basis of about 2.17%.

generated than has been seen
Tor many a long month. "What
•the spark will be that will set
it off is anybody's guess. The
most popular one is
D-Dayy
Another

Power

Additional evidence

minence of the

NOTICES

American

$17,565,000 Municipals

>

braska, a municipal entity.
A
group headed by Smith, Barney &
Co. was awarded the issue, nam¬
ing a combination of coupon rates
which figured out to an interest

be

to

investment

On

DIVIDEND

THE ATLANTIC REFINING CO.

Mutual Life Asks Bids

between

;

one;

lot

DIVIDEND NOTICES

Municipal News & Notes

'

2277

'

>

'

THE COMMERCIAL & FINANCIAL CHRONICLEVolume

2278

in

burden

A Plan For Post-War

Employment

minimize

the

amount

of

and

ommendations

comment

to

public spending necessary for this

upon any

purpose.

cuts

proposed distribution of
among contractors.

5.

Contractors' claims upon ter¬

Specific
below

to

policies are proposed
provide stable full em¬
some

which

uncertainties

of the basic
repress
the

general level of private expendi¬
ture and particularly private cap¬
ital expenditure.
(2) Removing the powerful fac¬
tors
which discriminate against
the assumption

of risk.
(3) Counteracting some of the
fluctuations in private capital ex¬
penditures.
;
(4)
Preventing such fluctua¬
tions from exerting a cumulative
;

be

given to the transition from war

which will fundamen¬
the possibility of
attaining stability in the longer
peace,

tally influence

It must be demonstrated

run.

in

business.

of the gov¬

demands

The

should

government posses¬
promptly sold at

be

competitive bidding after suffi¬
description of the goods to
be offered has been made public.
This will assist the prevention of
cient

inflation during the

transition. It

will also substitute a clear

ma

what

otherwise
uncertainty.

j or.

2.

might

policy
be a

to

tion

should

retained

be

to

pre¬

inflation.

The

vent

be

Unemployment
will be threatened by the diffi¬
culty of making the economic re¬
arrangements necessary for a ma¬
jor change in the character of pro¬
duction.
For example, although

lined below should be initiated in

there will be

tribution

large.

great demand for

a

refrigerators, producers of refrig¬
erators may
be unable to hire
workers because their remaining
munitions work prevents freeing
one complete assembly line, or be¬
cause
their ordinary suppliers of
refrigerator components are tied
up with war work, or because po¬
tential suppliers of a few specialpurpose machine tools are other¬
wise engaged, or because the pro¬
ducers do not have sufficient liq¬
uid

funds

make

to

necessary

plant alterations. Subject to the
continuing needs of war produc¬
tion, the following policies should
be followed in the transition:

A.

Policies to

neck
1.

prevent

"bottle¬

unemployment."
Cuts

the

in

*

munitions

pro¬

duction schedules of any contract¬
or should be either small
enough
to be absorbed by a

working hours

reduction in

a

run-away

in

reform

should

be

2.

Cuts should

taneously

in

be

the

made

simul¬

finished

muni¬

tions schedules of plants which in

the aboli¬

end within

tion of the workers in such areas

be

young,

women,
many

draw from

4.

the

aged

or

the

of whom will with¬

the labor market.

To

three

implement
the
above
policies, the miltiary pro¬

curement

agencies

should

notify

the War Production Board and the

War

Manpower

promptly
(above a
are

of

the
WPB

any

and

cuts

size)

which

consideration,

listing

contractors

given an

schedule

minimum

under

Commission

the

involved.
WMC

should

opportunity to make




The
be
rec-

national

in¬

the

inate

present discrimination
in favor of debt
financing as against equity fi¬
nancing and would make the eco¬
nomic structure more willing to
of the tax system

better

and

risks

4.

Existing

-3

loopholes

tax

should be closed to permit
sired

to

able

withstand fluctuations.

the de¬

to be secured with

revenue

lower, less repressive tax rates.
Present anti-monopoly

B.

lation

legis¬
vigorously en¬

be

must

forced; the Anti-Trust Division of
the Department
become

of Justice should
the largest and

of

one

most active branches of the Fed¬
eral

Governmer^t. Additional leg¬

islation will be necessary to

the

vent

development

tism by holding

locking
similar

stock

feasible

companies, inter¬
ownership
and

which will be

the

in

than

century,» will

in

The

;

ever

-'i : \

v.<

objectives

post¬

before in
help restore
the
American

period

this

competition

more

immediate

war

market.

pre¬

gigan¬

Drastic reduction

means.

of the tariff,

of

of

monopoly program are

•

fv'v:;i;

the
antithreefold.

(1) To prevent the price dislo¬
which
monopolistic prac¬
tice of maintaining prices at the
expense of output when prices are
declining.

cations and unemployment
result from the

To expand output and em¬

(2)

ployment by stimulating the com¬
petitive flow of new capital, new
enterprise and new techniques in¬

(Continued from

employment to take hold after we
have stopped making war goods.

economic

It

great

pressures

which will develop upon

elimination of
Even

during
the
transition
period beginnings must be made
on
the development of political
and

which

institutions

economic

production and prices as a
means of counteracting monopoly,

vate investment.

C. Government

limits the movement of
eral

fluctuations

of

and

continued

a

low average level

tivity

of economic ac¬
the dangers of cyclical

—•

fluctuations

of

and

secular

stag¬

nation.

The program to develop
such institutions has six basic fea¬
A.

1.

■:.,dr,i

/

Tax

:v

'■

reform.

Surtax

rates

should

in

be

the

highest
the

reduced;

averaging of income over a period
of years, say five, for computation
of income tax should be permit¬
ted; the tax-exemption privilege
of

bonds

government

eliminated.

These

should

measures

the

encourage

sumption

of risk.

duce

artificial

the

persons

who

are

continued
They will

best

bonds to
able, and

against

risk-taking
which is inherent in steeply ris¬
ing surtax rates combined with
the annual calculation of income

for tax purposes.
2. Excise taxes should be abol¬

ished, except for a few which are
long-established on monopolistically controlled goods (e.g. cigar¬
ettes) and the rates of income tax
in the middle brackets should be

increased.

This

policy will con¬
tribute to increasing and stabiliz¬
ing expenditure by reducing the
tax

burden in the lowest income

groups,

where

-consumption

is

large and level in relation to income

and

by

increasing

the

tax

prices, such as the
prices. This can

forward
see

it in

we
probably can
perspective because

going to take time and a
deal of effort before the
idea will gain public urn

is

broad

in

support the price
and
by converse
action
necessary
to restrain the
to

level,
when

liberalized in bene¬

coverage,

unified

and

will

This

basis.

sumers'

Federal
maintain con¬
on

expenditures

a

when

any

appears, s and re¬
of the chief uncertain¬

unemployment
duce

ties

one

affecting consumption at all

times.

d

E. The U. S. should

accomplished by operating at

deficit and relaxing credit when

a

necessary

ternational

support in¬

arrangements for the

settlement of short-term balances

without precipitating

of payments

financial

crises

or

necessitating

the movement of
The deficit should
be created by a combination of funds. Suh a policy, together with
reduction of the tariff, would in¬
increased
expenditure
and
re¬
duced taxes; the surplus should crease world economic and polit¬
stability,
promote
world
be created by the converse meth¬ ical
restrictions

rise of prices.

It

ods.

is

important

to

rec¬

ognize the role of adjusting taxes
in
this
process.
Government
spending

otherwise most likely, to assume
risk.
They will reduce the dis¬
crimination

be

functions

re¬

some gen¬

level of wholesale

be

attractiveness

of

level

will
as¬

and

monetary policy should be di¬
rected to stabilizing within narrow

should

be

which

in

confined

to
government

operation is efficient and clearly
preferable to private operation.
This is a large sphere — including
health and education
not

—

but it is

indefinitely expansible.

■Elimination
the

of

fluctuations

in

level of prices will
eliminate the major economic un¬
certainty which represses expend¬
general

iture on durable goods and the
major factor which magnifies bus¬
iness

fluctuations

and

transmits

them cumulatively throughout the

A precisely stated guide
budgetary policy is essential to
the
full
advantages of

economy.

to

realize

eliminating

uncertainty

and

to

prevent public spending from ex¬

panding to levels which defeat the
goal of

encouraging private

ex¬

D. The
ance

on

trade and stimulate U. S. invest¬
ment abroad.
,

F. The

basis for the successful

operation'of a free market econ¬
omy within a political democracy

insur¬

system should be broadened

who make what

ply it to

willing to

we

want and sup¬

at the price we are

us

With all of our
for our whole

pay.

efforts to level up

people we are going to have to
provide the kind of leadership we

with the kind of reward
leadership deserves. In the
efforts to level up we must be
need,

such

equally careful not to level down.
we persist in leveling down, we
will not add new employers and
we will not have enough new em¬
ployment.
■:/,%

If

"Too much

ing

of

our

time in late

has been taken up in assert¬

years

our

them.

rights and in fighting for

Too little has been given to

thinking about and defining our
responsibilities and our obliga-*
tions. It always seems so easy for
us
to
regulate the conduct of
others and on the basis of my ob¬
servations
over
recent
years
I
have

hope of finding the man
prepare a full plan for
self regulation. Since the days of
who

no

can

NRA, all
codes

codes and

action

the

regulating

attempts at

outlined

have

plans

of

for

others,

but I recall no codes in which in¬

dustries

or

groups

proposed self

regulation, nor have I seen any
attempts in Congress on the part
of any group to propose statutes
which would enlarge or define re¬
business.
The
system
cannot
sponsibilities and obligations.
I
operate
at high levels
if the have seen
plenty of effort to se¬
government makes frequent in¬ cure
legislation to widen so-called
cursions into the market mechan¬
rights. : There will be struggles
ism in pursuit of the temporary
oyer this problem but if we have
or imagined interests of particu¬
good sense we will solve them
lar groups.
The system will not
peacefully.
We should see that
operate
at high levels if the the
underwriting by Government
government neglects its responsi¬ —all the
people—of the wishes of
bility to prevent monopoly and
all classes of our population will
to stabilize the general level of
certainly destroy Government it¬
prices. The only enduring safe¬ self.
guard against such incursions or
"Having lived through the prob¬
such negledt is public alertness,
popular understanding of the
proper and possible relations be¬
tween free government and free

foresight and self-control.
The
development of such qualities is
the great challenge to all who see
that the high operation of a free,

lems

competitive economy is
condition for
the
existence
of political
and per¬

my

sonal liberties.

small businesses.

a

unemployment

short, I believe that on a
individual responsibility
alone can American employment
be widely spread, and on the basis
of the enterprise system alone can
national prosperity be restored. I
know of nothing else which offers
any hope for the post-war Amer¬
of

is

private,

penditures.

"In

basis

To those of going to have to reward the indi¬
a free en¬
vidual
leadership among
those

of its distance from where we are.

fits

.

,.

will eliminate the

closely related
repeated
economic

pri¬

budgetary

dangers

of

principles.

and thus to reduce the uncertain¬

ties and fears which repress

controls.

direct

ten¬

ideas

all

have lived in

who

us

in

monetary measures should be pre¬
pared
to
restrain
inflationary

or

.

terprise system we can see it in
perspective because of its distance
back from where we are.
If we

dency of government to intervene

(3) To reduce the need

own

In
of the plans, not
only among the contestants but
among the thousands who have
expressed their views, I think it
is becoming entirely clear that the ica.
The
boldest and the most
clear trend today is toward pri¬
daring opening of the door to op¬
vate enterprise.
portunity alone holds promise for
"Many of our young people, cer¬ the future. Recognizing that we
tainly ,all of those under thirty, cannot drive Americans but that
know of ; the
enterprise system they can be
led, we are going to
only as a theory. They have been have to abandon the habit of
interested for years in new eco¬ mind which induces whole
groups
nomic theories rather than old to lean
upon Washington. We are

in

Fiscal and

his

bring this about.

about how to

reviewing

look

act.

have

will

Each

still

it is to

2252)

page

derstanding and wide public apV
proval. We haven't found the way
to describe it in ringing words,
"The first step in securing post¬ but in spite of that it seems clear
war
employment is to get more today that as a nation we are go¬
employers. We are out of balance ing in that direction — the right
for we have more employees than direction. The political observers
we
seem
to have jobs for.
Of and the essayists and commenta¬
course,
that mere statement tors all seem to agree. If the pres¬
doesn't solve the problem but I ent trend continues the only ques¬
hope it points it up for I believe tion is whether we will accept the
the only answer to this post-war old
proven
economic principles
employment problem is to induce soon enough to bring about the
men to become employers.
I am results which, in my opinion, can
be brought about in no other way,
sure that the Government cannot
compel men to become employers When the young men come back
from the war they are going to
and I think it is about time that
want the door of opportunity open
we made the attempt to lead the
natural leaders of men to become and they are going to live in the
employers. We cannot make new hope of a profit. I think that plat¬
employers by coercing them to be¬ form will suit most of us who
come
such, nor can we induce have not gone to war. I believe
men to
become employers if we we are all going to be interested
are
going to coerce present, em¬ far more in our liberty than in
any plans of a paternal govern¬
ployers.
1
./V;;:
"No one can know what is re¬ ment to solve our problems for
quired in the way of reasonably us. I hope we have learned to ac¬
full employment for creating the cept the jolts of life if at the same
best economic health in the nation, time we realize the great benefits
but I think we can all agree that of a
release • of the power that
many things have to be done be¬ rests in a free people producing
fore we pan expect reasonably full for free consumers.
and figures," I venture to
come out long enough to suggest a
simple answer.

olized.

which

■t "

ideas,

to markets which are now monop¬

year

of risk-free government

will

the

Responsibility Alone

Can Provide Post-War Jobs

after the ter¬
mination of hostilities.
Prompt¬
ness
in this respect will greatly
influence
business ; interpreta¬
tion of the political environment
one

necks in the production process.
3. Cuts should be made first in

completion of the
remaining military program.
Also, an unusually large propor¬

dis¬

tions of the OPA and WPB should

all

will assist in the

with

liabilities

tax
in

corporate earnings to stockhold¬
ers, but not necessarily full distri¬
bution.) Such a step would elim¬

typified by the func¬

as

peacetime made final assemblies,
components
and machinery,
to
prevent the emergence of bottle¬

the munitions schedules of plants
situated in tight labor areas. This

controls

of prices and production.
5. Regulation of .prices and

brackets

facilities

A high level

tion of direct government

which will force the discharge of
workers without releasing usable

productive

out¬

structure

tax

of taxes will facilitate

tures:

avoided.

the

the transition period.

large enough to
release an entire plant or other
complete productive unit.
Cuts
or

and

profits and income taxes.
(This will require allocation of all

assume

existing options,
government owned productive fa¬
cilities not required for military
production should be sold to the
highest bidder after six months
notice. No facility should be sold
Subject

ernment, of producers, of consum¬
ers and-of foreign purchasers will
very

receipts

cess

Goods in

1.

sion

economy can

mand.

flow into risky invest¬
Also, by placing chief re¬
liance upon the income tax as a
source of revenue/ it will add to
the automatic flexibility of tax
ment.

fluctuations

period that the
provide full employ¬ to a firm which is found to con¬
ment in peace-time and, that the; trol, directly or indirectly, more
political atmosphere will be con¬ than twenty percent of the capac¬
ducive to the functioning of pri¬ ity in the industry in which the
vate, competitive enterprise. Such facility operates. Resale of facili¬
a demonstration would create the
ties acquired from the govern¬
necessary
psychological founda¬ ment to any such firm should be
tion for the maintenance of stable, prohibited for a period of years.
3. Disposition
high-level private business activ¬
of commodities
ity and employment in the future. and of facilities should each be
The transition period will begin
centralized
in
a
single agency.
with any substantial decline in Policy in both programs should be
munitions production, presumably formulated
by
a
board repre¬
following the defeat of Germany. senting
the
procurement
and
The initial danger of unemploy¬
economic policy agencies of the
ment during this period will not
Federal Government.
>
be in the inadequacy of total de¬
4. The wartime level of taxa¬
transition

this

tively larger and where savings do

promptly and finally settled by
come.
negotiation with the contracting
3. Taxation of corporate profits
agencies.
;
■
B. Policies to define the post-, as stockholders' income should be
war
relation
of government to substituted for the corporate ex¬

for

effect upon the economy.
Consideration
must
first

to

should

mination of war contracts
be

ployment by:
(1) Removing

Individual

| groups, where savings are rela¬
not easily

(Continued from page 2253)
would

income

middle

the

Number 4286

159

necessary

of

several

small

businesses

where all of the facts were read¬

ily

available,

staff

were

where

all

of

the

within the influence of

acto, I have felt very modest

about

good

the

possibility of making
plans for these

operating

When I

see

the

Volume

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4286

159

in
the larger
com¬
panies and larger groups I get
very modest about the possibility
of accomplishing much, and I get
positively frightened when I see
some men trying to plan for the
whole country — men who have
undoubtedly great mental agility

the pressure groups are going to
survive in American government

but

this at the price which the world
is willing to pay. Until we can

difficulties

to

:

have

make

work in

been

never

small

even

plans

of

he

thinks

us

group which he joins, to
the goods or the services
which the world wants, and to do

the

or

knows

philosophy that it is
responsibility to

individual

our

what is best for him, but few of
us are wise enough to say what is

make for others

best for

they

do for others

or

what they want

done at the price
willing to pay, we are
immediate
benefits clearly and not going to have a healthy indus¬
we are inclined to grab them. We
try in this country. To sell this
do not see clearly the long-time idea to our people is going to call
programs for at best a long-time for a degree and a character of
gain seems uncertain and remote. spiritual leadership and a courage
J All of us can be depended upon which hasn't arisen as yet. A mod¬
to

all.

Most

what is to

see

but

us

see

our

immediate

our

are

we

few of

so

can

us

be

are

satisfied to

;forego for today when that is nec1
essary to reap tomorrow.
Now,
how is this philosophy of enter¬
prise going to take shape? I can
picture hopefully a good job be¬
ing done by the Congress. Conjgress alone is responsible and it
ialone has the authority,
Even if
it .should do too little and too late,
I think it can be. expected io go
\ in the right direction for that is
s the way America is going now.
In
my mind the place for the Con¬
gress is on the policy level and
*not on the operating level. Oper¬
ations in this field demand de¬
centralization. Unless they are de¬
;

Clear-cut issue.

survive

to

tax rates

on

It is going to aim
its choice of low

high volume,

on

and low volume.

taxes

or

high

The first

plan may win and the second will
surely lose.; The first may release
enough positive drive to provide
reasonably
full
employment,
■enough
Federal
revenue
and
enough profits for the growth of
industry. This ideal can be at¬
tained by our thinking about the
people as consumers. No business
would think of being harsh to¬
ward its "customers.
It wouldn't
be

be

low

which

if

forced to fol¬

we are

allow

to
thinking
plan only of their position in the econ¬
work.
The Congress alone can omy as producers. Every man in
provide the atmosphere in which business knows that there is a
our
economy can again become price which will bring the largest
dynamic instead of remaining de¬ attainable volume, the greatest
featist—where people will be in¬ employment
and
the
greatest
terested
in
producing national profit. America is going to wind
wealth for the benefits which will up this war with the greatest pro¬
ductive
come to them, where industry will
capacity in the world.
be interested in doing a better job Whether or not it is going to be
'than it has ever done before and able to compete in world markets
where it may get as its profit a is going to depend upon the atti¬
:part of the savings it has brought tude of mind of our people. If we
to our nation and where it will are determined to produce goods
pay for its mistakes. I know of no efficiently at low costs we are go¬
other course of action which bears ing to have a great chance, not
even a remote hope of success in
only in our home markets but
"dealing with this problem of post- also in world markets, with bene¬
war employment; in other
fits
to all—labor and industry and
words,;
the first need is to get more em¬ everybody engaged in service, in¬
ployers. Let America put its mind dustries and the professions. If we
*to that problem and marshal its hold up prices or wages beyond
•courage to carry through with its the right price, if we don't accept
the philosophy that it is our indi¬
convictions.
"Nearly every plan which I see vidual job to sell our goods and
our services at the price the buyer
! these days is giving eloquent lip
service to the idea of free enter¬ is willing to pay, we will not last
prise and the open door to oppor¬ long in our home market nor in
world competition.
tunity, and likewise nearly all of

centralized

plan

the

.

will

If the operations are
mented
neither
will
the
Work.

not
regi¬ yield to

we

government

pressure groups

,

.

.

,the

"I believe America can have an

plans embody some ele¬

same

ment of Federal

or State com¬ adventure in prosperity. I am en¬
element of State couraged by the buoyant, hopeful
I see all of the attitude as expressed by the con¬
/difficulties in developing a plan testants for this prize. I wonder
J become more convinced than upon What they base their con¬
oyer that the need of the country fidence. It must be that they are
'is to have each individual accept convinced that the America we
.'the
responsibility
for
himself. knew is better than any other

pulsion

or some

'socialism.

When

;Long ago I learned that what is
.everybody's business is nobody's
business. In spite of many state¬
ments to the contrary I do not
•believe

that

government should
responsibility
of
.providing jobs. Admittedly it can
'do so in an emergency, but gov¬

•take

ernment
'what

the

on

is

never
a

real

seems

to, know:

emergency,

nor

•when an emergency ends. It can;
.only subject itself to every selfish:
"interest in America and in turn:

yield to many of the pressures.;
"As long as we as a people are!
'going to think about ourselves as
producers or in our professional;
^groups we are going to have pres¬

part of the world and that what

,

government is going
to listen to and yield to pressure
groups, and as long as it leaves
itself in the position of doing so,
long

as




to"

tion

($25

R.

for 100,433 shares
par).
Company is
for subscrip¬

stockholders.

common

Holders

of

record May 19 are given right to subscribe
for
one
additional Share for each
four

shares

held

$27.50

at

share.
Rights
expire June 1.
Proceeds, together with
other treasury funds, will be used to re¬
deem
on
Aug.
1,
1944
approximately
29,788
shares
(33 Vz ck)
of
company's
outstanding
$4.25
cumulative
preferred
stock at $105.50 per share.
Glore, Forgan
& Co., are principal underwriters.
Piled
April 29, 1944.
Details in "Chronicle,"
May 4.
;',v
per

PLOMB TOOL CO.—$600,000 10-year

convertible

debentures

due

Jan.

1,

1944,

and

$1

51

Co.

of

V-loan.

in

Offered

May

1944..

filed

$100

ORPHEUM

-

of

6%

11, 1947,
stock, $1

for

associates

1944,

1,

at

$91.25

of

issues

days

ago,

which

on

in

normal

;
y
Proceeds—Will

summation

of

to

&

persons,

by

amend¬

for

general

CO.

specific

has registered 15,000 shares of 5%
preferred stock
($100
par).
Company is offering to holders of its out¬
standing 1% cumulative preferred stock,
series
A,
and 6%
cumulative preferred
cumulative

ap¬

Brothers

is

their

a

14,000 shares
4.% non-cumulative series 2 preferred, par
$100.
Price to the public $100 per share.
Proceeds
for acquisition
of factory and
warehouse buildings and additional trucks.
Filed May 19, 1944. Details in "Chronicle,"
May 25.

>' C'1

ALLEGHANY

CORP.

statement

has

for

convertible

secured

7%

issuance

notes

661,000

of

the

of

notes,' including

20-year

vertible 5s

due June

collateral

at

issue

officials

will

be

S-l.

be

Inc.,

not

sold

HAYES MANUFACTURING
istration

100,000 shares of
value.
\ "

220,078 shares of 5% cumulative preferred
stock, par $100 per share.
Company plans
to issue the 220,078 shares of 5% preferred

convertible into

on

(or

into

Proceeds—Net

lic

and

shares will,

of

Ave¬

by

be

will

received

We

the estimated amount

in
in

below

offering
mined

or

have

dates

or

are

underwriters

to

be

proper scope

of government,

"I do not believe that
to

arrive

at

a

we

v

have

of

hat whose
been deter¬

not

unknown

to

and

for

is

sale

Martha

tion

of

complete restora¬

are

be

need

for

some

those

who have

been

on

to

inclined to

rely upon others, and particularly
those who have wished to rely
upon
government.
I look with
hope to the accomplishment of
this because I believe the

that

Bryan

of

cents.

Proceeds

of

L.

Allen

A.

country
with

to have

a

seen

the utter failures of

common

Cushman

:

CORP.—

cumulative
per

tot 304,075 shares of
which 23,225 are being
through underwrit¬
ers and
180,850 shares by three present
stockholders.
Offering price to public on
204.075 shares is $3.75 per share.
An ad?
ditional ,100,000 shares is reserved against
the exercise of warrants to purchase 100,'000 shares of common, at $4.50 per share,
prior to three years from and after the
effective
date
of
registration statement.
Proceeds for working capital.
Burr & Co.,
New York are principal underwriters. Filed
April 24,
1944.
Details in "Chronicle,"
May 4.
istration
common

statement for 200,000
par value 12%

stock,

Van

Filed May
Details in "Chronicle," May 18,

i

share. 1,717 shares are beinp
currently offered to a group of-officers and
employees at $21.50 per sharebinder a
separate registration and prospectus.
Net
proceeds
($446,000) are to be used for
working capital.
Kirkpatrick-Pettis Co.
are

per

underwriters.

Details in

Filed

March

30,

1944.

"Chronicle," April 6, 1944,

DALLAS RAILWAY & TERMINAL COM¬
PANY

for

has

filed

a

registration

statement

$3,000,000. first mortgage serial bonds
1, 1944 .due each June 1 from

dated June
1945 to

1959,inclusive.

sale of the

Proceds

from

the

bonds,: together with such addi¬
its general funds as may

tional cash from

be

necessary,

statement

stock,

of

issued by the company

1944.

$30

STERLING ENGINE CO, has filed a reg¬

..

will

CARPENTER PAPER CO.—15,000 shares
common stock
(par $1). Price to pub¬

Company also plans to issue
face
amount
of
installment

promissory notes and use proceeds as ad¬
ditional working capital.
A. C. Allyn &
Co., Inc., underwriter.
Filed March 16,
1944.
Details in "Chronicle," March- 23,
1944.
;

sentatives of the underwriters.

11, 1944.

share.

$3,250,000

other

philosophies and even if
they haven't a. full understanding
of what is meant by the America

U-50.

SERVICE

applied to retirement of 5,750 shares of 6%
preferred of Sprague at $100

as

capital

purposes.

going to return to
at the end of the
well-developed re¬
sourcefulness and a strong self
confidence. These men are going

this

rule

shares of Western Grocer Co. 7% preferred,
in exchange of shares and $575,000 will be

Cushman

be used to augment
and for other corporate
Aistyne, Noel & Co., and
Carlton M. Higbie Corp. are named repre¬

working

lic

war

registration

a

shares

of

men

are

exists. I think we shall we knew our enthusiasm will af¬
find' a widespread restoration of fect them and I believe they are
confidence in our people just as going to aid all to go toward that
long as the hope survives that we goal."
profit

filed

in

the services

5,

15,000 shares of 6% cumulative preferred
(par $100).
Proceeds will be used
for the acquisition of a maximum of 8,649

path

will

bidding rule

issued May

SPRAGUE-WARNER-KENNEY

us.

AMERICAN BAKERIES CO.—13,000 shrs.
class B stock (no par).
The stock of¬

fered

"There

opinion
on

ago,

sup¬

selling of these philosophies
the part ,of the self reliant

and

stock

1944.
r

Webster

&

CO. OF OKLA.—$1,6%
cumulative
preferred
stock
(par $100) and $6,600,000 first mortgage
bonds, series A 3%% due Feb. 1, 1971.
Stock is for exchange of $6 preferred of
Southwestern
Light & Power Co.
(sub¬
sidiary) on share for share basis.
Bonds
will be offered for sale at competitive bid-*
ding.
Registration effective Jan. 10, 1944.
Piled Dec. 21, 1943. Details in "Chronicle,"
March 16, 1944.

Price to pub¬

Piled May 19,
"Chronicle," May 25.
;

of

500,000

list of Issues

a

moro

SEC in

by

PUBLIC

OF OFFERING

present

Stone

Company

under

whose registration statements were filed

days

number

May
12
filed
an
amendment with the SEC proposing invita¬
tion of competitive bidding on the stock

UNDETERMINED

twenty

equal

Exemption from competitive
1944.

(5-25-44).

DATES

amendment.

denied

Registration Statement No. 2-5385. Form

con¬

an

Blodget, inc., and Harriman Ripley & Co..
Inc., New York, are principal underwriters
Details in "Chronicle" April 27, 1944.

Underwriting—Porter Associates, Inc.

basis to be filed by amendment
substituted units of collateral as

names

in

of

7%,
and 5%% preferred
the exchange to be on a share for
share basis plus a cash payment to be filed

etc.

$187,500, reimburse the corporation
part for the $200,000 expended by it
purchasing such shares.

a

in

Seventh

of

shares; of the pledged com¬

plied by amendment.
Details

and

proceeds

redemption

shares of its

stock,

by Porter Associates, Inc.
The moneys
paid to the corporation by Porter Asso¬
ciates, Inc., on account of the purchase of

1, 1949, and $19,137,-

provided in the indenture.)1

or

stock,

Offering—To be supplied by amendment.

stock of the Chesapeake & Ohio Rail¬

way

Muskegon

stock to effect the retirement by-exchange

CO. has reg¬

common

nues, Grand Rapids, Mich.
Business—Sheet metal stampings,

A-2.

on

.

TUESDAY, JUNE 13

—

noon

.

(5-23-44).

20-year collateral trust convertible
5s due April 1, 1950.
The notes are to be

mon

a

a

share on the
share on the 6%

sold

$21,-

trust

stock and $2.66%

on

cash adjust¬

a

a

NORTHERN INDIANA PUBLIC SERVICE
CO. has filed a registration statement for

the

of

000

preferred

new

preferred.

business.

will

Co.,

of

of Alleghany within 60 days from the date
of

for

basis, with

through Wegener &
Daly, Inc., Boise, Idaho as underwriters.
Registration Statement No. 2-5384. Form

part

said

filed a regis¬
$30,000,000 3V4%
due
April
15,
1954. Net
proceeds,
together with other
funds of company,
will be used for the
redemption of all of the outstanding bonds

tration

stock

old

offered by
at par.
Any
by company

Offering—Securities
Morrison-Knudsen

.

Trust

The exchange offer will expire
May 20.
Underwriters are
Milwaukee
Co.,
5,750 shares;
Wisconsin
Co., 4,750; Morris F. Pox & Co., 1,500;
Loewi & Co., 1,500; Bingham, Sheldon &
Co., 1,000 all of Milwaukee, and A. C.
Tarras & Co., Winona, Minn., 500.
Piled
April 25, 1944.
Details in "Chronicle,"
May 4.

Address

filed

for

for

MISSISSIPPI VALLEY PUBLIC SERVICE

K

$2 par

WEDNESDAY, JUNE 7

con¬

Topeka; Harold E, Wood Sc Co..
Rauscher, Pierce & Co.; Dallas;
Co. of Abilene, Kansas, and,
Frank & Belden, Inc., Minneapolis, Details
In "Chronicle," April 27, 1944.
■

Address—319 Broadway, Boise, Idaho.

of

of

costs

Underwriters

Co,,

United

a

■

CORP.

defray

,

available

pending

Business—Construction

indebtedness.
Eastman, Dillon & CO.,
principal underwriter.
Piled May 18, 1944,
Details in "Chronicle," May 25."'
r: >

FINANCE

to

expenditures.

share for share

gage

statement

used

are

St, Paul;

CO., INC.,
has
registration statement for $300,000
5% preferred stock and $200,000
series L 6% preferred stock, both $100 par

Petroleum Corp., of Tulsa, Okla.,
Oil Corp., and to retire mort¬

EQUIPMENT

be

Offering
public is

Proceeds from sale of stock

First Trust Co. of Lincoln, Neb,;
Cruttenden & Co., Chicago; Beecroft, Cole

into Sunray

registration

Will
stock

value.'

merger

share,

a

stock, series B, the privilege of exchanging

for

proposed

public at $7 per share.
of the preferred to the

$105

Registration Statement No. 2-5382. Form
S-l. (5-23-44).
;
'

CORP.

the

the

price

MORRISON-KNUDSEN

has filed a regis¬
$13,000,000 sinking
fund debentures.
The interest rate, ma¬
turity
date,
redemption
provisions
and
price to public will be filed by amendment.
The proceeds of the new financing is to
provide the funds required for the con¬

Darby

expire May" 26, 1944.
Un»
will be taken up by the
underwriters at $6,50 a share and offered

named principal underwriter.

filed

statement

share for each four shares

a

shares

ment amounting to $7.83l/3

TUESDAY, JUNE 6

GAS

Rights

struction

of

Lehman

—

at $6.50

subscribed

/a:v.
be

purposes

Underwriting

than

NATURAL

for

held.

general

become

course

OIL

improve¬

plication of such funds.

whose

filed less

Transportation

—

corporate

series

tration

for

(5-20-44).

ment.

v.,:'

SUNRAY

treasury

property and mail by airplane.
Offering—Price to be filed

effective, un¬
less accelerated at the discretion of the
SEC.

reimburse

Business

registration
twenty
grouped according to dates
registration statements will
were

NEBRASKA

-

mon

to

common

Address—Municipal Airport, Jacksonville,
Pla.
VVv/--;

share.

per

Inc., Chicago, un¬
exclusive of accrued

INC.,

ment

NATIONAL AIRLINES, INC., filed a reg¬
istration statement for 113,333 Va shares of
common stock, par $1
per share.

NEW FILINGS
List

statements

KANSAS

CO,,

SUNDAY, JUNE 11

Lehman Bros,

by

107

000,

S-l.

outstanding and owned by Atlas Corp,
and do not represent new financing by the
company.
Lehman Brothers and Goldman,
Sachs & Co.
are
principal underwriters.
Piled May 17, 1944. Details in "Chronicle,"
May 25.
Offered—June

par

Underwriting—Van Aistyne, Noel & Co.,

and

Co.,

Price

1

April 1, 1944.
Proceeds for
construction purposes.
Details in "Chron¬
icle," April 2 V1944.

York, is named principal underwriter.
Registration Statement No. 2-5381. Form

458,696

Republic

derwriter,

Avenue,

Grove

GAS

state¬

interest from

New

shares of common
par, reserved for issuance upon
the conversion of the 6% preferred stock
registered.
The preferred shares are issued

and

stock,

common

Spring

NATURAL

registration

a

Proceeds—Payment of serial promissory
notes $411,045, plant and-equipment $430,-

57,337

preferred stock, cumulative,
on or before April

and

of

5020

has filed

has filed a registration state¬
2,000 shares of $5 cumulative
preferred stock (no par) and 58,636 shares
of common stock
($5 par).
Hdlders of
common stock of record May 12 are offered
the right to purchase one share of com¬

convertible

par,

—

made
$110,000 and for
corporate purposes $1,033,955.

has

CORP.

statement

registration

a

shares

KEITH

-

85,000 shares
share.

NEBRASKA

-

INC,,

Central*

15-year

ments

i

RADIO

registra¬

a

5%.

public is given as 100 and of the
stock $8 per share.
^

by Wyeth & Co., Pacific
and Bateman, Eichler & Co,

Piled Mar. 29, 1944. Details in "Chronicle,"

April 6,

filed

CO.

$1,500,000

Business—Chemical manufacturing.#
Offering—Price of the debentures to the

interest

Calif,

KANSAS
CO.,

ment for $1,500,000 first mortgage sinking
fund bonds 4%" series C, due April 1, 1959;

Cincinnati, Ohio.

at

30

ofr

received

by the company at 2 Rector
St., New York City, until June 5, 12 noon,
the bidders to specify the interest rate.

per

Address

1954/

Proceeds will be used to redeem first mort¬

and

Bids for the purchase of the bonds will
be

sinking fund debentures due June 1, 1959,

gage bonds, reimbursement of company for,;
funds used to redeem preferred shares and
100

DRACKETT

statement

6(6

The
be offered for sale under the

1944.

May 11,

Details in "Chronicle,'; May 25.

THE

tion

mortgage gold bonds,
1951, at 102 and interest;1

to

are

competitive bidding requirements of the
Securities and Exchange Rule U-50. Names
of underwriters, interest rate and price to
the public will be supplied by amendment.
Filed May 3, 1944,
Details in "Chronicle,"

B.

SEMLER, INC., has filed a regis¬
tration statement for 101,300 shares of
common stock, par $1.
Of the total 15,000
represent stock to be sold by the company
and the remaining 86,300 shares to be sold
by
present
stockholders.
Net
proceeds
from sale of 15,000 shares by the company
are to be used for general corporate
pur¬
poses.
P. Eberstadt & Co., heads the list
of underwriters.
Price to public to bs
supplied by amendment.
Piled May 20,

the shares

offering

bonds

THURSDAY, JUNE 8
has filed a

CO.

first

series due

going to continue along the trustees of L. A. Cushman Trust. Names
on which we are now travel¬ of underwriters and price to public by
amendments. Filed March 29, 1944.
again. I don't believe we are go¬ ing in our thinking.
De¬
tails in "Chronicle," April 6, 1944.
ing to build any complete national
"After all the plans are pre¬
BEN-HUR PRODUCTS, INCt —$300,000
plan with all of its operating de¬ sented and all the philosophies
5% convertible debentures, series of 1943,
tails. I am hopeful that Congress are
debated, and after all the pos¬ due Feb. 1, 1951 and 11,400
prior pre¬
with its post-war planning com¬ sible
Congressional
acts
have ferred shares (for purpose of conversion).
mittees will be able to find the been taken, there will still remain Proceeds to retire bank loans and working
capital*
Pacific Co. of Calif, and Wyeth
proper scope of government in the the
responsibility on each one of & Co. named underwriters. Filed Dec.
20,
field of post-war planning. That us to make our own
plan for mak¬ 1943. Details in "'Chronicle," March 9,
is the most important question be¬
ing our own lives successful in the 1944.
fore
our
country
today — the post-war period.
BURRY BISCUIT
CORPORATION has
America has done once it can do

private initiative and a
wide opening of the door of op¬
portunity all at once. Too many
sure groups in government.
things in the existing situation
\
"Until we all give major, atten¬ will have to be changed to bring
tion to our problems from the that about completely and they
point of view of ourselves as con- will never be done in a hurry. I
i sumers where our interests are do believe the
spirit of American
•identical we are not going to get initiative can be restored if we,
the results we want. We consum¬ can see that we are put on the
ers
will
decide
by
our
acts one path to recovery, and if we
•whether we are going to have can see progress being made as
reasonably full* employment in the days go by. We learned long
this
country and V no
pressure ago that confidence exists in busi¬
group is going to decide it for us. ness as long as the hope of a
•As

stock

common

initially

CREAMERY

statement

registration,
of

good business and it wouldn't
good sense. Yet that is the

course

Security Flotations

OFFERINGS
BEATRICE

reduction

crusade is needed.

ern

"At the end of the war the na¬
depended
to take action to secure it, tion is going to face a definite

benefit and
upon

of

567,700

Calendar Of New

In

make

accept this

big way..

a

"Each

i.

who

men

able

and in the national economy.

the end the responsibility is going
to have to rest on the individual,

2279

will be used to redeem $3,-

VERTIENTES-CAMAGUEY
OF

CUBA.—696,702

shares

SUGAR

of

CO.

common

stock ($6.50 par), U, S. currency.

Of shrs.
registered,
443,850 are outstanding
and
owned by the National City Bank, N. Y.
Several underwriters have agreed to pur¬
chase $1,663,500 of first mortgage
(col¬
lateral) 5% convertible bonds of company,
due Oct. 1, 1951, owned by National City
Bank, N. Y. Underwriters propose to. con¬
vert these bonds at or prior to closing and
the 252,852 shares of common stock which
are received; by the underwriters on
such
conversion, together with the 443,850 shrs.
previously mentioned, will make up the
total stock to be offered. Harriman Ripley
&

Co.,

toe., Ni Y., principal underwriter.
Details in "Chronicle,"

Filed Mar 29, 1944.

April 6, 1944,

THE COMMERCIAL & FINANCIAL CHRONICLE

2280

REMEMBER

Teletype—N. Y. 1-971

HAnover 2-0050

Thursday, June 1,1944

New

England Pub. Serv.

Trading Markets

Firm

The Hecht Co.

IT is important to you, that as ive do no business
with the

CUBAN SECURITIES

out whole attention is yours, in making

SUGAR

RAILROAD

GOVERNMENT

SECURITIES

FOREIGN

:

/

OVEK

1L

/

and firm trading

accurate

harl marks & ho. Inc.
'

Axton-Fisher Tobacco "B"

general public,

THE

-

-

Industrial

markets in

M. S. WlEN & Co.

SPECIALISTS

Members N.

New York 4, N. Y.

50 Broad Street

25 Broad

AFFILIATE: CARL MARKS & CO. Inc. CHICAGO

+'■' "

•' '

Members

Governments"

"Our Reporter On

By DONALD MacKLNNON

New

.

/

philadelphia

telephone

2-3600

REotor

YORK
'Bell

telephone

Enterprise 6015

•

.

new

;

5

Chronicle.—Editor.)
Life

Mutual

The

:

of New York yesterday

Insurance Company

tjhat sealed bids had been asked for a total of about $17,565,000 principal amount of various municipal and other fully exempt
bonds.
With the Fifth War Loan opening June 12, the question
naturally arises concerning the possibility of any substantial sales of
partially exempt Treasuries by investors who do not need partially
exempt income, and who would reinvest the proceeds of any such
sales in fully taxable Treasuries available by subscription at par dur¬
disclosed

.

.

.

SECURITIES

BY

STATES—(000,000 omitted)

THE UNITED
of

As

Dec.

1942

31,

(G)

*"490

(D>
*199

(F)

*"5,751

*557

2*4 % Jun.

1954-56

681

399

11

91

34

51

95

2%% Mar.

1955-60 2,611

471

2%% Sep.
2%% Jun.

1956-59

982

320

1958-63

919

237

23A% Dec.

1960-65 1,485

355

(B)

(A)

(C)

;

463

112

445

1,003

41

187

65

184

185

43

332

78

92

137

38

535

125

147

285

''

117
.

,

of Dec.

As

*6,239

(E)

Labor Forces:

Recent

^

NC

48

-

43

36

1955-60 2,611

795 -324

105

—12

252

-

-211

126

1956-59

422

156

2Va% Mar.

446

681

+

+'102

32

—

9

2% 1o Jun.

1958-63

919

368

+ 131

41

—

2

250

-

2%% Dec.

1960-65

1,485

622

+267

88

+50

243

-

2% % Sep.

982

unreasonable

As

of Jan.

"6,290
2 V4 % Jun.

1954-56

468

681

128

-56

69

-23

123 —14

—18

108

-39

317

Henry A. Thies

+

22

10

832

+

37

106

+

1

229

—

982

440

+

18

35

+

3

151

+

2%%' Jun.

1958-63

919

385

+

17

42

+

1 240

—

10

68

2%% Dec.

1960-65

1,485

645

+

23

86

—

226

—

17

105

1954-56

681

466

—

1955-60 2,611

853

+

2%%' Dec.

428

982

396

919

1960-65

684

1,485

—

1

—

+
+

NC

43

2

+

4

175 —10

+32

NC

44

+

5

362

+

1

123

36

23 131
5

70

NC

69

2

109

—

—

6

75 —14

+

1

952 —21

NC

159 —16

NC

114

—

9

1

315

—

2

+

1944

29,

*545

*209

*513

2%% Mar.

2%% Sep. 1956-59
2%% Jun. 1958-63

2

9

—

1

47

1

36

NC

44

NC

78

21

100

—

6

221

8

131

NC

362

NC

944

12

42

.+

7

148

—

3

128

NC

11

41

—

1

221

—

19

73

39

61 —25

211

—

15

103

71

+

1

+

5

69

—

2

109

+

3

—

8

166

+

7

NC

118

+

4

NC

318

+

3

(C) Held by
outstanding. • '.(B) Held by commercial banks,
savings banks.
(D) Held by life insurance companies.
(E) Held by fire, casualty,
and marine insurance companies.
(F) Held by U. S. Government agencies and trust
funds, and Federal Reserve Banks.
(G) Held by all other investors.
*Number of

(A)

Total

amount

institutions in

each

classification.

T;\

•

Thus, commercial banks bought about $1,045,000,000 par amount
partially exempt Treasuries sold by all other in¬
vestors, during the periods specified. . .
It is reasonable to expect
additional purchases by commercial banks as time goes on, because
increasing numbers of such institutions are subject to higher tax
liabilities, and need more partially exempt Treasuries or other fully
exempt obligations.
.
.
It is just as reasonable to anticipate some selling of
partially
exempts by mutual institutions either prior to or during the Fifth

of the five largest

.

.

War Loan.

.

,

.

One recalls that such issues declined slightly
during
of the Fourth War Loan, and then, starting about

the second week

Feb.

1, staged an advance which carried the longestrissues up at
least a full point from their previously established lows of the
year
However, we do not believe that sales will develop to the point
.

.

and

and

labor

reasonable

markets

will

be

affected

to

important

any

tendency to create bu¬
commissions, government
corporations, and author¬

of the probabilities involved, we believe that the
prices of the longest partially exempts will be higher immediately
following the Fifth War Loan than is the case to-day.

Bank

and

Eastern States Pfd.

Insurance

Calendar of New

Stand. Coated Prod. Pfd.

Canadian

5s, 1946

Reporter

Our

Reporter's

Public

W. T. BONN & CO.

of

120

Broadway
Telephone
Bell

Total industrial
employment
34 million
; :
1943

New York 5

High

Total employment

:

Less

firms.




lion

us

engaged in industrial employ¬
These latter
figures in¬

clude

about

16

million

women

In 1940, 11 million
women were employed.
"Proceeding on the reasonable
assumption that after the war wo¬
employed.

men

2V2 million

and

Notes

,...2277

on

Governments...

.

Report

labor forces will be

smaller,

:

employment—45.5%
"It should be further considered

that

the

1939

is

estimated

probably

excess

an

over

under.-state-

per

unit of labor has

terially increased.

ma¬

the

1939

national

Less

Firms, Hanover

employment-—45 million
agriculture,

etc.—11 mil¬

number

of

employed.

a

can

smaller

Further¬

more,

in estimating the post-war

labor

forces, the element of yearly

increment in labor population was
not

allowed

purposely
possible

to

for.

This

army

for

of

one

would possibly be sufficient

year

to produce such

compensation. At

any

rate/ after the possible stand¬

ing

army

sated

has

been compen¬

once

for, the yearly increment

curring

thereafter

would

oc¬

appear

the labor market and compete

on

for

jobs.

"All in all, it is obvious that the

jobs to be provided after the

war,

and expressed

tual

employment in
be

an

Offerings

Specializing in All Issues

Republic of Colombia
GOVERNMENT

-

-

as

ratio to

1939,

is

ac¬

not

over-statement."

Wanted

American Dept.

DEPARTMENTAL

15 Manhattan

Stores 4s & 6s
Square "A"

.

...

.

GRUTTENDEN & CO.

.2254

....2255
2258

Members New

Security Salesman's Corner,...

2273

Whyte
...2254

York and Chicago Stock

Exchanges
LOS ANGELES

CHICAGO
Dearborn 0500

Markets—Walter

Quaker City Cold Stor. 5s

MUNICIPAL

,2274
;

Teletype
CG 35

209

South LaSalle Street

CHICAGO

4, ILLINOIS

a

the

after

The labor increment

war.

done

was

compensate

standing

likely to

lion

/ \

production

be duplicated with

now

of

1939 Average

ment of Membef

Consequently,

foregoing estimate of the number

mate would result:

/

Total

.2280

Real Estate Securities

Says

V

:

....2262

Securities

Tomorrow's

employed—

Post-war labor, industrial
forces
—49 y2 million

the'following calculation and esti¬

member

'

agriculture, etc., this
with a total of 52 mil¬

ment.

should be directed to the Depart¬

2-4200, Extension 272. \

of this discussion may be
employment.

for

leaves

•.

;"■ /■;'■

employment in
approximaetly 45 mil¬
This includes labor engaged
average

was

million

spirit of this ruling applies
speculative purchases of

.

women

tivity

high in 1943 employment,
including the armed forces, was
about
64
million.
Allowing 12

to

and

in

ment, for since that time produc¬

"The

such full payment.

partners

-

powers

called 'industrial'

contemplate sell¬
ing the securities prior to making

members,

.

1939, with recent facts and figures,
a reasonable projection of the

purpose

does not

The

the

lion, leaving 34 million employed
pursuits, which for the

(1) agrees to pay
against such securities
within a period of six months or

also

back

in all other

balance

v

take

agriculture, forestry, fishing,
and so on—approximately 11 mil¬

''-A\
off the debit

'/■'■V

Post-War Estimate

con¬

the facts of the last pre-war year,

lion.

ruled that prior to
Aug. 1, 1944, no member firm may
carry on margin securities offered
during the Fifth War Loan Drive

(2)

—

•

in

has

less, and

.

Total industrial
employment
52 million ^
x\

past. Therefore, it is all the
important that the people

"The

of the Treasury an¬
nouncing
the Fifth War Loan
Drive, the New York Stock Ex¬

unless the customer

12 mil¬

lion

Decline

1939

Secretary

change

—

in the

world

latter.

the

by

64 million

—

agriculture, etc.

Eason Oil Com. & Pfd.

COrtlandt 7-0744

Teletype NY 1-886

issued

statement

—,

and

conformance with the spirit

the

It seems pos¬

problem of finding work for dis¬
charged
soldiers,
redistributing
war workers and finding employ¬
ment for the coming generations,
let us consider a comparison of

Carrying Govt.
Securities On Margin

2264

Utility Securities

Railroad

NY 1-492

which they have temporarily re¬
leased, at the earliest possible mo¬ Estimate industrial
employables
ment.
;; v-''-;
sV.over
1939—15% million
"As an illustration of the mag¬
nitude of the difficulties of the Excess in percentage over 1939

Qn

Security Flotations 2279

Funds

Our

Teletype
>

flict will not end like other wars

should

Stock Exchange Rules

page
Stocks......2260

Securities

Municipal News
Mutual

Cent, of Ga. Mobile

Telephone
>■
;,v
BOwling Green 9-2590

index

Tennessee Products

Co.

&

St., N. Y. C. (4)

1943 Industrial
employment—52
million

more

administrative, and judicial pow¬
ers
has gone too far.
We have
become a nation ruled by man,
instead
of by
law.
The trend
should be reversed, and the legis¬
lative and judicial powers should

In

war.

sible that the present

Inquiries regarding this circular

degree.

Weighing most

Pressurelube

the end of the

industry

to

alike.

.

where

80 Broad

,

*545

1955-60 2,611

2*4% Jun.

6

—10

69

1956-59

*6,398

—

68

*209

Feb.

89

973 —30

107

-

2Vb% Mar.

of

-84

-

31, 1943

*511

As

50
361

+

memoranda

Bittner

laws,

ities; some by legislation, others
by executive order as a solution
for all our ills, and the clothing
of
bureaucrats
with
legislative,

82

31

-

2% % Sep.

"

1

2

+14

fair

owned

-292

-

our

should insist that it be freed from

."The

*546

*209

11

1954-56

developments—earnings

incorporated in

(Continued from page 2253)

reaus,

31, 1943

*510
47

2V*% Jun.

.

Preferred

Post-War Employment Must
Provide For 43% Increase In

.

ISSUED

I

Memphis St. Railway

.

.

; V

1

,

Common

be taken away, leaving only the
rules,
and administrative powers.
"In time of war it is necessary
regulations; capricious, contradic¬
29, 1944. Please remember that under column "C" and with refer¬ tory, and incompetent adminis¬ to give government essential pow¬
ers
of control.
It is incumbent
ence to savings banks, the figures
involved exclude certain banks tration.
;
"The Wagner Labor Relations upon the people to be ever watch¬
which accept demand deposits, and which have been classified as
commercial banks.
The change from "mutual savings banks" to Act has proved to be one-sided. It ful that these powers are not used
management
in a
strait- for purposes other than promotion
"savings banks'" was made in the Treasury survey for Nov. 30, puts
1943.
jacket and prevents it from func¬ of the war. Congress, in granting
tioning normally. It should be re¬ many of the war-time powers, has
SUMMARY DATA FROM TREASURY SURVEY OF OWNERSHIP OF CERTAIN
vised so that its provisions will be provided that they are to lapse at
.

;■

1-576

.

ing the Fifth War Loan.-"'''-..v
The following tabulation reveals the amount of sales and pur¬
chases of certain partially exempts from Dec. 31, 1942 through Feb.

N

..

Gary Railways Inc.

Teletype
york

(Mr. MacKinnon has been kind enough to act as guest writer this
week.
As is true of other contributors, the opinions expressed by
Mr. MacKinnon are his own and do not necessarily reflect the views
of the

1-1397

Association

N EW

NASSA US TREE T,

45

Y.

.

Dealers

Security

HAnover 2-8780

N.

v. .'."V:;,S !

INCORPORATED

■>

York

Y. Security Dealers Ass'n

St., N.Y.

Teletype

Kobbe, Gearhart & Company
,1V.;, '-"

'

COUNTER SECURITIES

(Actual Trading Markets, Always)

v

Rayon

$4.50 Pfd.

634 So.

Spring St.

Telephone
Trinity 6345

Hill, Thompson & Co., Inc.
Markets and

120

Situations

for Dealers

Broadway, New York 5

Tel. REctor 2-2020

Tele. NY 1-2660