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MUN 11
ADM.
ESTABLISHED 1839
LIBRARY
Reg. U. 8. Pat. Office
Volume
167
Number 4706
New
Market Outlook
By EDMUND
Shields &
Retiring
185-187, with im¬
technical correction to
portant
from
come
for
This is devoted to the technical
of the
stock
interpreted
as
graphs
of
from
the
and
picture
1,500
over
various
in'divid-'
ual
market
averages
issues
listed
.
"
,
mention
vari-
the
rometer
Edmund
W.
Tabell
its
thesis
that
best
own
ba-
that
the "varying
supply of stocks
(Continued on page 42) v
*A talk
June 2.
See
by Mr. Tabell before the
Security Analysts,
1943.'
"
PICTORIAL
to say
to
part
want
of
Charles E. Oakes
the
But
economy.
to
first
I
discuss
briefly what the
Institute has been doing and what
it is accomplishing, especially in
laying the foundation of fact, re¬
search and study for the
steps we
must take.
'Jy-.'"
]'/.%
Institute
Activities
[f
The past year has been a
busy
for the Institute, its depart-
■
Field
Day of the Bond Club
f
relatively
(Continued
on
28)
page
:
of New York.
♦Presidential
Oakes
before
This is.
readily
and Our Defenses
stood
about communism and its threat
un-
because
materials
,
for
Chicago has this
con
struction
to the United States:
were
still dif¬
subject during the war
throughout the country and recently we have been hearing period, had
built up liquid
some people'
say that the way to avoid the danger of com¬
as
essential
national
PICTURES taken at the 24th An¬
purposes were
to
"The American people are
ob-;;
rightly concerned these days
tain and many
about the attack on our ideals
by international communism.
companies,,
There has been a great deal of discussion on this
re¬
sponsibility
.■.v:'i,'■■■
issues,
ficult
meet¬
for
—
The President in his recent address in
us,
our
;/-
SECTION
We See It
Communism
one
nual
New
scarce.
we
do
an
or
N. Y. Society of
for
insure
and
demand
enjoy it,
you
of
what
ing
simple
is
comments on "Recent Markets" to the post¬
picture.
During all of 1945 and into the late Spring of 1946,
yields for all grades of public i utility bonds continued down and
prices continued upward under the pressure of investors to
put idle
to
refunding
de¬
should
is
market
hope
devised
to
and
techni¬
the
and
most
hold
r o u p
on
been
As
re¬
what
the future may
ratio
work
I will confine
any
war
for other than
customary
say
cal data. Tech¬
nical
I
us.
what I have to
studies and
other
has
on
<®>funds to work. ■..■!
vote
market
studies,
lines, g
program
address
16th
Mr.
of
Annual
Con¬
vention of the Edison Electric In¬
stitute, Atlantic City, N. J., June
1, 1948.
- :
reserves
munism in
which j
the United States is to
pass a law — a Jaw, for enabled,
them to meet their cash
example, to check certain kinds of political activity.- Some requirements without new finaftcpeople think you can combat communism by outlawing the
(Continued on page 26)
v
.
Communist party.
"It
seems
to
i
me
that such
proposals miss the point,
an idea by passing
>
"You cannot stop the
spread of
law
against it."
'
,
\
'
♦An address by Mr.
Hopkinson
before the 16th Annual Conven¬
•)
tion
a
;
The degree or extent in which communism is a real
threat to the United States at the
present time we leave
for the reader to decide for himself. That
this threat,
of
the Edison
Electric Insti¬
tute, Atlantic City, N. J„ June 2,
1948.
This address was prepared
about
the
middle
of
May and
where "current"
or
"now" is used
they relate to that date.
»
whatever its strength, can not be
or
;
successfully combatted
passing foolish laws is obvious enough.
eliminated by
'
;
"
:
(Continued
on
page
36)
...
"
;
Slate and
.
Havana
Municipal
Franklin Custodian
Lithographing Go.
Funds,
inc. -
A Mutual Fund
j
COMMON STOCK SERIES
PREFERRED STOCK SERIES
Hirsch & Co.
Membert New
York
,
25 Broad St., New York 4, N. Y.
Chicago
INCOME (BALANCE FUND) SERIES
Prospectus
on
request
London]
(Representative) t
1
FRANKLIN
64 Wall
Street, New York 5
Distributors of Municipal
and
request
"
■:
Gordon Graves & Co.
30 Broad
NY
Wires
1-395
NATIONAL BANK
Connect
OF
Montreal
THE
CITY OF NEW YORK
!
Toronto
discount
New
CANADIAN
on
Public Service Co.
bonds & stocks
Railway Co.
1
England
X
?
PLAIN PREFERREDS
■
(when issued contracts)
OTIS & CO.
(Incorporated)
Established
Street, New York 4, N. Y.
Tele. NY 1-809
Private
j
HAnover 2-0980
Corporate Securities
INVESTMENTS
Tel. WHitehal! 3-2840
N. V. 5
Teletype
New York
Central of Georgia
Underwriters and
INSTITUTIONAL
will
profits
Analyzed and Appraised
on
Bell
Bond Dept. Teletype: NY 1-708,.
We
PORTFOLIOS
Information
52 WILLIAM ST.,
»
THE CHASE
THE NATIONAL CITY BANK HART SMITH & CO.
-
DISTRIBUTORS, Inc.
BANK
:
Bond Department
OF NEW YORK
5
Teletype NT 1-810
Cleveland
''Geneva
J
^
UTILITIES SERIES
Stock
Exchange
ana other Exchangee
SLAnover 8-0000
BOND SERIES
-
SUTRO BROS. & CO.
/
1899
Cincinnati
Chicago
Columbus
Est.
1806
">
Members New York Stock
CLEVELAND
New York
,
Advises against
preferred stock and cautions companies build up
V
sound financial structure.
1:.~ iK
sinking funds
EDITORIAL
going
am
port,
averages,
breadth
o f
the
Our
course.
f i
President's
moving
ous
future
j
Hopkinson contends greatest
double taxation of dividends margin
requirements.
problems,
its
'
President, Investment Bankers Association
problem is ability of utilities to market common stocks. Blames cap*
ital gains levies for making common stocks
unattractive, and scores
plants installed. Cites need of $6 billion for expan¬
with equity capital comprising important percentage.
the major questions which confront
n d
it
<$>-
cover
the
to
not
consider
^
Co., Philadelphia
After reviewing utilities trends, Mr.
The Institute welcomes
you to this meeting. You have gathered
here to consider the situation of our
industry, ponder its
and
&
to depart from
the New York
Curb,
power
sion program,
I
and
based
Federal
.
helpful.
Ex¬
change
Notes widespread growing demand for
kept "the
bargain offered today." Wants laws and regulations pre¬
venting useful power interchanges abolished and no additional
York
Stock
record.
greatest
and
the
on
New
"
on
Past
electric power and urges electric
power and energy be
selectivity, favoring specific
side
largest
year,
HOPKINSON, JR.*
Partner, Drexel
;
Mr. Oakes points to 4,600,000 kw. increased
capacity in current
industries that have given Dow¬
like bail confirmations, and those
having formed "long potential
base patterns."
Copy
Institute
Reviewing conditions, problems and prospects of electric utilities,
higher level. Looks
a
Edison Electric
By EDWARD
end at
to
President,
a
President, Pennsylvania Power & Light Co.
de¬
any
Price 30 Cents
Present and Prospective Electric
By CHARLES E. OAKES*
Co.
Market analyst expects
cline
The Electric Industry in 194B
TABELL*
W
York, N. Y., Thursday, June 10, 1948
Denver
Toledo
Buffalo
Exchangk
Domithom Securities
Grporatioti v
40
Exchange Place, New York 5,N. Y.
120 Broadway, New York 5
Telephone REctor 2-7340
IRA HAUPT & CO.
York Stock Exchange
Principal Exchangee
v
Members New
and other
111 Broadway, N. Y. 6
WOrth 4-6000
Boll System Teletype
NY 1-702-3
S
Teletype NY 1-27QB
Boston Telephones
Enterprise 182Q
Thursday, June
FINANCIAL CHRONICLE
COMMERCIAL &
THE
(2522)
2
good look at ourselves
what we are doing.
and at
a
Irredeemable Money: Privilege
Sunray Oil*
The
Without Responsibility
Halliburton Oil Well
Cementing Co. Common*
"Prospectuses
Regarding
a
—
New York Hanseatic
leads them lethargically to accept things as
upon redeemability of paper
tary system
Lonsdale Company
scription
not
Committee
de-
serves
de-
only
Finance
on
Cur¬
and
possible
prepared in support of its
Resolution occupies 11 pages and
relative
cannot
rency
because of the
frjC pONNELL & CO.
Members
120
Exchange
REctor
a
is,
r ently,
Central States Elec. (Va.)
Common
p p a
of the
thoughts
"Lonsdale Co.
*
Members
64
WALL
1923
of
The
New
NEW YORK
5
HAnover 2-9470
erally is viewed as a form o|
Legislation
"Whereas,
Equity Oil
our
tion
the
to
standard
same
is
that
New
York
Security
Dealers
tee
Ass'n
in
Teletype—NY 1-376-377-378
result of studies
Finance and Currency, and
the
of
mittee
the
and
believes
to
such
inadvisable
it
to
standard at the
a
present time; now, therefore, be it
"Resolved,
That
the
In India, Burma, Ceylon, Kenya
Colony, Kericho, Kenya, and Aden
such
of" the
possible
on
the
based
in
gold standard; and, be it
"Resolved,
Paid-Up Capital—
Reserve
system,
.<
one
Fund
£4,000,000
£2,000,000
—£2,500,000
Bank
conducts every
description
banking and exchange business
feels
that
should
of
Trusteeships and Executorships
be
ultimate
world
That
every
taken
attain
as
that
sense
as
justify; and, be
of
"Resolved, That as a step to¬
ward that objective the Chamber
for the United States.
urges
legal
sometimes
are
the
thorizing
an
irredeemable paper money
'
This irredeemable paper money
provisions which
interpreted as au¬
the United States
Treasury and the Federal Reserve
banks.
In short, they issue prom¬
Secretary
ises
the Congress to revoke the
existing
a
irredeemable in so far
as
gold is concerned.
It is this
domestic system that is the para¬
mount issue involved—the issue
it further
also undertaken
The Parker
have
we
currency
that
rapidly
the
international gold-bul¬
lion standard with our domestic
the Chamber
possible step
to
objective
conditions
We have "a form
gold-bullion standard only
system.
a
restricted
Zanzibar
Subscribed Capital
The
monetary
which it believes to be
We do not have
tional relations.
est
Branches
and
of
this nation should have the sound¬
26, Bishopsgate,
London, E. C.
on
gold-bullion standard is one
gold bullion is used do¬
mestically as well as in interna¬
York reiterates its conviction that
Office:
operating
in which
of Commerce of the State of New
Head
in its sec¬
A
Chamber
Bankers to the Government in
1933 has been
form
nation's
of INDIA, LIMITED
Kenya Colony and Uganda
a
generally is viewed as a
the gold bullion stand¬
ard."
It is not clear what this
meant
to
the authors of
that
statement or what it may mean
to readers of that Resolution.
interna¬
present
situation
return
■
j,-:
what
on
view
current fiscal condition, the Com¬
-
;
"Whereas" that "The nation
ond
since
tional
NATIONAL BANK
have
The Chamber states
by the Chamber's Commit¬
made
all
gold-coin or gold
bullion system domestically.
y
could
problem which have been
of the
people
the
for
currency
country despite the fact
gold, $35 per ounce); and
Members
And
has
present
type of
of this
that we
publicly that at the
time it approves of this
being used before 1933 (but
would retain the new price of
a
should
said
the
of
is
issued
to
by
pay
which
do not
they
It
discuss
in
it
such
does
any
not
concrete
V
manner.
(a) The people in general have
lethargic: The people in gen¬
eral seem to have accepted their
been
in
situation
present
to
respect
irredeemable money somewhat as
-iy/iy:
••/■ ;■
helpless, or when they do
(Continued on oage 30)
not
'
of Privileges Freed
the
Corresponding Re¬
Granting
From
'
■
only in an overvalued silver.
Therefore,
this Chamber
was
"Whereas, As
/;
tificates; and they are redeemable
pending before the Congress
(H.R. 5031, known as the Buffett
Bill) which would return the na*
in their effort
banks
a
is irredeemable
of silver cer¬
paper money
even
any
see
2. The Chamber Acquiesces in the
Domestically,
that?
fraternity, these banks, as repre¬
sented by the American Bankers
Association, by their failure to
make
any
concerted
effort; tc
bring irredeemability to an end in
this
country/ really
join
the
Treasury ; and
Federal Reserve
to
seem
involved.
question
hw
with the exception
v•
now
is
not
does
a
as
they accept taxes, dictatorship, :or
standard]
we
and,
death—when they find themselves
it
continue with what we have.
what
the
>
gold-coin
[a
present time."
This
means
that
"Whereas, The nation since 1933
sponsibilities. The Chamber does
not explain the grounds, on which
it justifies this departure from the
commonly-accepted standards of
integrity in respect to honoring
one's promises to pay.
In fact, it
pq-
money
paper
overvalued silver,
and
assume
to maintain
such
to
at the
ard; and
gold bullion standard; and
return
to
standard
has been operating on what gen¬
to
create de¬
payable only in
are
without being called upon
the corresponding re¬
to pay
commercial
irredeemable
money. ;y
"believes
Chamber
advisable
always has insisted upon a
sound monetary system for the
nation based upon the gold stand¬
York
York Curb Exchange
New
ST.
Teletype NY 1-1140
State
in, if not endorsing, the current
policies which permit the Treas¬
ury and banks to issue promises
this system of irredeemable paper
deemable Paper Money
of
Chamber
the
of
this
has
record as acquiescing
Irre¬
Endorsed
Chamber
The
1.
The
"Whereas,
Commerce
a po¬
the
Chamber, reads:
Fiank C. Masteison & Co.
not in
consider care¬
fully just what it is, precisely,
that the New York Chamber actu?
ally endorsed.
-v
York
The Resolution, endorsed by
Established
reveal to the person
Chamber
"Prospectus on request
its
sition to pause and
The Resolution of the New
Hoving Corp.
a
Committee's Report would hardly
and
businessmen
among
the
casual
reading 'of
Chamber's * Resolution
and
today.
others
reasonable to suppose
seems
the
Chamber
York
New
The
put itself on
this country
of
posits which
Endorsed " ^
that
which seem wide¬
attitudes
spread
Detroit Int'l Bridge
banks
It
Spahr
E.
Walter
dollars is fabulous.
sition.
•f'.
typical
and
;
(and dangerous)
Similiarly,
be¬
fairly
this favored
I. What the Chamber Really
it
cause
and
issued
have outstanding in terms of
and
Both of them wish to keep
have been fighting to keep
significant features of each.
this
also
but
ises.
ably clear by an analysis of the
Chamber,
2-7815
But
Report can be made reason¬
and
document,
from
BROADWAY, NEW YORK 5
Tel.
the
since it comes
York Curb Exchange
New
here.
reprinted
be
the nature of both the Resolution
importance of
redeem, do not intend to redeem,
and, under existing laws, cannot
redeem.
In
other
words,
the
Treasury and Reserve banks have
been given the privilege of such
issuance, and, at the same time,
they have been freed from all re¬
sponsibility to redeem these prom¬
have
banks)
commercial
prices other than the established
one of $35 per ounce."
The Report of the Chamber's
which
Prospectus on Request
people
than
any
other two
promise-issuing institutions in this
country.
The volume of nonredeemable
promises which the
Treasury and Reserve banks (and
prepared by its Committee on Fi-
Treasury to buy and sell gold at
Currency,
Bought—-Sold-—Quoted
New York Stock
particularly bad because it ap¬
plies to two institutions that have
power
and
touch
more
and
nance
without
is
'
money
"Currency Reform and the Gold Standard,"
on
promises
more
of the State of New York, on May 6, 1948, endorsed a
The Chamber of Commerce
Resolution
1
required to redeem them.
This case of moral degeneration
human freedom rests
are, not realizing
in gold.
they
their
issue
being
standards of integrity in
Teletype NY 1-583
7-5600
to
Spahr decries Chamber's justification of Treasury and banks' departure from commonly-accepted
honoring promises-to-pay. Asserts people's miscomprehension of our mone¬
Dr.
New York 5
120 Broadway,
doing—for a period of 15
to permit two of our
largest issuers of promises to pay
years—is
Vice-President, Economists' National Committee on Monetary Policy
Executive
Corporation
BArclay
One of the things that we have
Economics, New York University
Professor of
■
in
Re¬
been
By WALTER E. SPAHR
QUOTED
in
deemable Promises to Pay
the Chamber of Commerce of the State of
Return by the United States to a Domestic Gold Standard
Request
on
BOUGHT —SOLD
New York
Practice
the Issuance of Irre¬
spect to
Analysis of the Recommendations of
An
Metal & Thermit Corp.
Current
Acquiesces
Chamber
Our
3.
i%% Cum. Conv. Pfd.
1948
10,
sponsibilities
A
vitally
here:
arises
*
what
Alabama &
question
important
On
defensible
institution or
individual claim the right to, issue
promises to pay and at the same
ground
can
time insist that it
compelled
be
promises?
i
any
or
those
redeem
to
;\y:1■}'
■
Louisiana Securities
he should not
•
Bought—Sold——Quoted
We have built an intricate legal
system in respect to contracts in
this country, based upon
elemental
of
standards
common
the
,
the very
widely-accepted
morals, ethics, and
and
honesty to the effect that
maker
of
promises to pay
correspond¬
must also assume the
ing responsibility.
We prosecute
individuals and institutions when
Steiner,Rouse&Co.
Members New York Stock
Exchange ".
York 4V N. Y.
25 Broad St., New
NY 1-1557
HAnovar 2-0700
New Orleans, La. -Birmingham, Ala.
Direct wires to our
branch offices
they attempt to avoid the fulfill¬
ment of their responsibilities.
Harry
Scherman,
President
of
the Book-of-the-Month-Club,once
wrote
The
a
penetrating book called
Promises
with
dealt
Men
some
Live
It
By.
fundamental
requisites of satisfactory and hon¬
Joseph McManus & Co.
orable social and economic inter¬
When
course.
men's
promises
trade and pro¬
stalled, credit col¬
to be good,
cease
duction
are
lapses, people cannot buy, sellers
cannot and will not sell, chaos
and
social
degeneration
follow
quickly.
These
mentary
suppose
time
to
elemental
are
and
ele¬
Exchange
New York Curb Exchange
Chicago Stock Exchange
39 Broadway, New
York 6
Tele. NY M610
DIgby 4-3122
truths thaU one might
need not take the
discuss in this country.
we
present state of degen¬
respect to these basic
standards
of
integrity is proof
that we need to pause and to take
But
Members
New York Slock
our
eration in
Southern Production
Appliance Company
Common Stock
Manufacturing complete line of
We Maintqin
pre¬
Active Markets in U. S. FUNDS for
,
cision
couplings, fittings and valves,
Company is in position to benefit
Importantly from
program.
expanded
aircraft
Powell River Co.,
-
Abitibi
Pow.
&
Brown Co.
Ltd.
Paper
;
Quoted
t
value
(6-30-47) $19.44
Net current assets
Current
—
y
Canadian Securities Department
Book
Sold
Bought
r
Noranda Mines
Price
about
(6-30-47) $9.60
$8.00 per share
United Kingdom 4 % '90
South African Mining Shares
Established
HODSON & COMPANY,
British Securities Department
1856
H. Hentz & Co.
Inc.
Members
New
York Stock
Exchange
and other leading exchanges
du
Pont, Homsey Co.
31 Milk
St., Boston 9, Mass.
HAncock 6-8200
N. Y. Telephone
Teletype BS 424
CAnal 6-8100
Goodbody & Co.
Members N. Y. Stock
Exchange and Other Principal Exchanges
115 BROADWAY
Telephone BArclay 7-0100"
NEW YORK 6, N.Y.
N. Y.
165
Broadway, New York
Cotton Exchange
NEW
CHICAGO
YORK
DETROIT
GENEVA,
Teletvoe NY 1-672
'!
is:
4, N.
_
Bldg.
Y.
PITTSBURGH
SWITZERLAND
*
Volume
Number 4706
167
THE
COMMERCIAL
&
FINANCIAL
INDEX
»'
and
Articles
Hopkinson,
Page
-
Jr
|
Prominent banker analyzes behavior of utility earnings by
compar-
i
j ing them v/ith those of other
__Cover
—Walter
Investment
Trends Affecting
World Bank
Temple
3\
Seeks Congress' Aid—Herbert M. Bratter__i._^
Who Are Our
The
Kuile„_^__--__-i—1
ter
Oil Industry:
*
,
servative
The Copper Outlook—John A. Danaher__
investors
in
9
:
Looking Forward in Labor Relations—C. E. Wilson'
W.
stocks
12
_
____
American
11
____■
the
13
Babson_u;
Rearmament Program and Money Market—Harold V. Roelse
almost
number
choice
that
14
only to
-
Smith_
E.
___
i
^
j
16
World Recovery and World Bank^-John J. McCloy
The SEC Position
;
World Bank; Bonds
on
(
:
_
1
•'
''';w
dustrial
is
have
p r e
Winthrop W. Aldrich Urges Senate to Restore ERP: Funds*.-.;: 5
A
of
12
.1 Retirement of Old Peru Bonds__a--_—
r»
14
Convention
Plans
—.1—
Capital
^
Outlays
Into
(Boxed)
r?:.
7
■*
-XPl (■;
Bank and Insurance
Business
Man's
-1
24j
20
Bookshelf.
23
Indications of Business Activity.*
....
7
Bargeron..
million
$900
•!,
-
NSTA .Notes-
47
News About Banks and Bankers.^
Wilfred
*
«
fluctuations
net
and
in which
see
much which
Our Reporter's Report......
..I..
satisfaction.
see
nothing which
complacence,
for
the
:
to
47
....
:i,Prospective! Security Offerings.!!.^...
Public Utility
Railroad
Securities
Salesman's
....—..J..............
the
needed
the
capital
to
favor
if
it
is
expendi¬
the
meet
44
eternal
vigilance,
48 '
Dominion
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| WILLIAM D. RIGGS, Business' Manager'
'■'A,
Thursday, June 10, 1948
Every Thursday;/general news'and ad¬
vertising issue) and every Monday (com-
'
and
state
;
.
"Other
city
etc.h
news;
Offices:
135
8.
Salle
-
1926
privatelyutilities, as com¬
electric
Bureau of
BOUGHT
—
SOLD
—
QUOTED
Internal Revenue. The
FIRST COLONY
marked; op the left side, while the
scale for electfic utilities is
right.:,
the
on
CORPORATION
.
This chart brings out two'points.
First,
is
the
rapid rate of
growth of the electric
utilities. Their gross revenues in¬
creased from around $1.4 billion
in 1926 to $3.5 billion kr 1947, a
gain- of 150% over the 21 year
period. The rate of growth was
more
long-term
52 Wall St.
the
Limestone Corp.
period, total sales and
receipts of all U. S. Corprations
increased
from
about
same
billion^ in
mated
1926 to an esti¬
billion in 1947, an
$275
the
chart
is
5, N. Y.
Tele. NY 1-2425
p Bloomington
other
$143
Hew York
Tel. HA 2-8080
4.5%" a-year, compounded. During
,
Bond
Units
Approximate
Price
54
*
To Yield About
Description
on
%%%
request
the
greater stability
of revenues of the electric utility
industry relative to those of busi¬
ness in general. This was true not
excellent
an
set
of
cline
George Birkins Company
40 Exchange Place, New York 5
the
four
years
of
World
.f;- *An address by Mr. Temple be¬
fore
16th
of
Annual' Convention
the
Edison- Electric* Institute; At¬
lantic City, N. J., June 2, 1948.
war.
WHitehali 4-8957
Tele. NY 1-1404
slump
The de¬
the
all business it
>
,
A^nd of All U. S. Corporations
Figure 2
LAMBORN & CO., Inc.
'
49%.
was
Net Income of Electric Utilities,
go back to the
1926. They provide a broad
1930s,
in
utility gross during
the great depression was 13%; in
statis¬
background ,/ for
studying
the
changes that occurred during the
prosperous
period
of the > late
1920s, the great depression of the
reconversion
temporary
99
WALL
STREET
NEW YORK 5, N. Y.
the net in¬
compares
after taxes of electric util¬
come
for Which the scale is on
right, with that, of all U. S.
Corporations; having the scale on
the- left.' /?■
"'■.■r'-," 'v' :'" : .'.f.Y*.This shows, in even more strik¬
ing fashion than" the first chart
on
gross
revenues-;: the relative
stability of utility net: earnings
SUGAR
ities,
the
K
:
(Continued
on page
Raw—Refined—Liquid
Exports—Imports—Futures
DIgby 4-2727
34)
CERTIFICATES
We
are
interested in offerings of
.
-
!
r
The
St.,
f
Chicago 3, 111.
(Telephone: State 0613) r
i 1'.Drapers' Gardens, London,, E. C., Eng¬
land, c/o Edwards & Smith. ' , ; /
Bond &
Mtge. Guar. Co.
Publio
&
High Grade Public Utility and Industrial
Lawyers Mortgage Co;
National
Bank
-
quotation
clearings,
.r
.!
*
La
since
TITLE COMPANY
+
If-
.:•{ plete statistical issue —-market
;! records, corporation news, bank
Corporations
compares
U: S. Corporations in all lines of
tics, most of which
Published
Broadway!
Bell System Teletype N. Y. 1-71A
revenues ;of
gross
owned
,
year
1
And of All U. S;
Figure: f
after the end of the
is
stitute
i
Security Dealers Assn..
2-4500—120
;
only during the great depression
38
! Washington and You......
REctor
of the early 1930s, but also in the
minor recession of 1938 and the
5
.J,
I
.
Gross Sales of Electric Utilities
con¬
Tomorrow's Markets (Walter Whyte Says)......—_—._—
■
f
increase of 92%. The annual rate
leads to
industry
investors
The? Slate: of. Trade and Industry!.^...........
(
Established
Members N. Y.
of growth was 3:2%, compounded:
The second point revealed by
f Fortunately for the comparisons
T; seek to present, the /electric
utility ■ industry has- developed
through the Edison Electric In¬
Corner_._.:i_l_._....!._!.__._l.._. 24:
Securities Now in Registration,
corporations^
may
"
■>
J.K.Rice,Jr.&Co.
1908
,
figures which the - Na^tional City Bank of New York has
compiled for some 25 years from
the published reports of leading
earnings
tion
22
_.......
Finishing Com. & Pfd.
from
growing demands of the
people. > The price of
maintaining the number one posi¬
24
Securities.!.......
Securities
finance
I
American
"
:
ac¬
stantly
46 'i
...
;<■
hold
to
conservative
tures
14
...
continue
must
of
5
d__.
Our Reporter on Governments..!
.
compiled
Hope
utility management
feel deserved
feo1
...
_.I
May..
•
counts for and justifies the favor
which utility securities enjoy, and
23
ir;
^Observations—A.
in
—
■
,.
we
^
U. S.
scale for all/U. S. Corporations is
ties, We shall
41.
.
—_
Kingan Com. & Pfd.
these
the tax returns of all corporations
in the. United States, and upon
make-up
of operating
income, and
pertinent-factors in the in¬
vestment rating of utility securi¬
6
i
...
Income,"
STREET, NEW YORK
business, numbering over 400,000
and" compiled
by the Treasury
relative
8
Einzig—"Is Britain's Austerity Drive Slackening?"
Mutual Funds
in the
other
16
_
Recommendations
> From Washington; Ahead of the News—Carlisle
7%—or
revenues
25
..ri
Coming Events in the Investment! Field
Dealer-Broker—Investment
tics- of
off
Federal Water & Gas
Corp.
Dorset Fabrics
for
or
For
us—
it
hands.
figures we draw upon the Treas¬
ury Department's annual "Statis¬
conservative
seen,
this morning is to
gam-what 'insight we can into the
behavior of utility earnings by
comparing them with those of
other major divisions of business
hi the
different
phases of the
business cycle. Such comparisons
bring, out the long-term growth,
Coyer
-.mt—
whole.
take
for
Comparative Behavior of Utlilities
Regular Features'i
i.
hold
industries
a
is in utilities;
24
Canadian Securities
;
ties
j Our purpose
Joumal'L_._^^..:._^
Stocks.
utility-securi¬
Temple>
as
Today the: total, is $51
billion. Only 6% is in railroads;
nearly 15% *— or $71/2; billion —
60% of National Bank's Profits
See It (Editorial)
which
n
utilities.
Appppp
Capital FundSi.^....^.
'iPPP.:;
As We
attrac-
in railroad securities and
was
only.
20
Wall Street Spoofed by "Bawl Street
the
major
business
will
junk?
of
Texas Gas Trans, Corp.
basic series will be compared, on
liantern slides, with figures for
other
think
Tennessee Gas Trans. Co.
piled by the Institute, and of alf
Equipment Costs_._.__^..._L.__.i.^_j:_. 20
Turned
-
example
the
20%
19 I
and
made
—-—
the
19
Gordon Palmer Reports
have
that
guys
that
you
Telephone: WHitehali 4-6551
War II, and the postwar boom that
still continues. A- number of these
insurance companies. In 1926 these
investments totalled $13 billion;
Emil Schram and Benjamin Strong Honored by NYU-.u.^ 19
...
They
the
sell
him &nd
Obsolete Securities Dept. '
of the investment portfolios of life
18
National City Bank of New York Analyzes Rising Plant
business.
he
forget
99 WALL
£•'**•
Off in*
_______
Balderdash
•
investors is
Elmo Roper Holds,Four Republicans Could Defeat Truman.
.? Physiocratic
your
more
15
Jules BacUman Cites Wide Diversity in Wage Changes-__J_
'■>*
or
16
—
I Federal Reserve Bank of New York Predicts Falling
i
H.
■
Leness Elected'President off Bond Club of New York__J.._.._
.
Alan
National Association of Securities Administrators Issue-
f erred.
n
t io
~
Economy—i_£l
debt
ahead of their
-Y'-V
Principles of American Capitalistic
which
no
•
New York State Chamber of Commerce Sets Forth
i
com¬
panies
^
—Edmond M. Hanraham_i:i,»i____
:
s s u e s> o t a
few prime in¬
17
L__^ _pi________
_
in
field,
second
*
Profits Lost by Neglect of New By-Products
—Harold
one
preferred^—
one
Values—Roger
from
Sees
Stability of return, and a growth trend with which nothing seems
to interfere, have made the fixed
obligations of the operating utility
companies during the past 20 years! the number one choice of con¬
8
____
Steel Supply vs. Demand—A Continuing Struggle
—David F. Austin__
Land
with growth of business.
_____________
Yesterday, Today and Tomorrow
—Gustav Egloff
we're
pace
did
Better
factors, as:
(1) rate increases;, (2) savings in operating, costs; (3) increase in
sales under high load and
larger capacity; (4) decline in level of
fuel and labor costs ; and (5) reduced taxation.
6
State
Why
greater operating income needed
i
4.J
Stockholders?—Harold S. Sutton
Hard-Boiled Utilities Regulation in New York
—Curtis
4
Utilities—Lionel D. Edie..—
"THE BIG CLUCK!"
Notes electricity
ating income has not kept
2
A Look at Utilities Earnings—Alan H.
major industries.
profit margins have been narrowing due to reductions in unit price
services as well as to higher operating costs.'
Accordingly, oper¬
Privilege Without Responsibility
E.
ADD COMPANY
*Vrce-President," National City Bank of New York
>
Irredeemable Money:
3
Ttnsitii
By ALAN H. TEMPLE*
#
>
i__Cover
Tabell
W.
B. S.
1
____Gover
The Electric Industry in 1948—Charles E. Oakes-__-
Market Outlook—Edmund
(2523)
at
News
Present and Prospective Electric Utility Securities Markets
—Edward
CHRONICLE
PREFERRED STOCKS
Trust Company
of
New
York
Miles Shoes,
Inc.
Lawyers Title & Guar. Co.
Analyses available on request
Copyright 1948 by. William B. Dana
1 ■
Company
•;
.
jit:'-'
Reentered as
I
ary
York,
8..1879,*
v
Act
V
.V
'
Subscription Rates
,
Members
office
.
at New
of March
:
:
Subscriptions in United States, U.
Territories and Members
Union, $35.00 per year;
Possessions,
S.
of
in
Newburger, Loeb & Co.
Members
Pan-American
Spencer Trask & Co.
Prudence Co.-
second-class matter Febru-
at the post
under the
1942,
N. Y;f
25,
N. Y. Title & Mtge. Co.-
15 Broad
New:
York
St, N.Y, 5
Bell
Teletype
Stock, Exchange
WHitehaU 4-6330
NY
1-2033
York Stock Exchange
Members New York Curb Exchange
Street, New York 4
135 S. La Salle St., Chicago 3
New
25 Broad
Tel.:
HAnover
2-4300
^
Albany
•
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Boston
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Tel.:
.
FINancial 2330
Teletype—NY 1-5
Glens Falls
—
Schenectady
—
Worcester
C. E.
Unterberg & Co.
Members N.
Y. Security Dealers
61 Broadway, New
Ass'n
York 6, N. Y.
Telephone BOwling Green 9-3565
Teletype NY 1-1666
4
•
••
,
'
<
.
'
.
■,
,
CHRONICLE
FINANCIAL
&
COMMERCIAL
THE
(2524)
ii«y
•
,
..
;
World Bank Seeks
Affecting Utilities
Investment Trends
Thursday, June 10, 1948
;
HERBERT
By
By LIONEL D. EDIE*
President, Lionel D. Edie & Company, New
York City
Mr. Bratter recounts proceedings
because of increasing mechanization, there is close relation between physical pro¬
sales of electrical power, but because of increasing output, along with technological im¬
Congress' Aid
M.
BRATTER
before Congressional Committees
Dr. Edie points out,
relating to proposed legislation to exempt World Bank bonds from
duction and
requirement of registration with SEC.
have been decreasing. Indicates increased electric output has been accompanied
also by lower dollar value, thus requiring dynamic rate structures to cover costs and to invite capital
investment. Holds higher dividends are required to offset decline in dollar purchasing power or sufficient new equity capital will be lacking.
Foresees higher utility rates in offing. i
provement, electric rates
•:
The
It is
remarks today is a controversial one. It is one
that is pointed in a constructive direction at
one
certain
broads :
decade
tiends
require
dynamic
theory of util¬
ity rates, and
by dynamic
stalled power,
a
self,
plus
from
the
I mean
only ia
tneory
not
purchased
power
outside, the amount of
worker, instead
of
increase for the deb-
an
ade, will be just about the same
in 1949 as it was in 1939.
For the
recognition of first time in this generation, in
the
inability other words, even though the elec¬
tric
industry < will
have
gone
of the utility
industry to through a great period of expan¬
operate satis¬ sion of facilities, the amount of
factorily
at
a
tinuously
declining
price
trend
con
Lionel
Edie
D.
'
available
power
American
worker
per
be
will
industry
in
no
bigger at the end of the decade
than it was at the beginning of the
decade.
the unit
product of that industry, I mean ; Now, that is a very remarkable
not
only that the down-trend circumstance and may seem in¬
in the unit price of the prod¬ credible to some of you, but I
uct of this industry has got to assure you that that is substan¬
stop, but that the trend of the tially the fact. ./// i
price has got to turn upward.
Now, along with that fact, I
other
In
nomic
day
for
v
,
in
broad eco¬
country to¬
the
words,
trends
this
and compel an in¬
in the rate structure of the
dictate
crease
electric utility industry.
Now, by trends I have several
things in mind, but first I should
like to speak about a trend in in¬
dustry generally which gives the
great force of demand to the util¬
ity industry, and that*is the trend
should
like
to
another
mention
important phase of the de¬
mand for the product of utilities
at this time, and that is the ratio
of power purchased outside manu¬
facturing and other industry to
very
that, which is self-installed by in¬
dustry, and in that respect I find
that in
1919 the power
outside
was
normal.
in- \ below
by the industry it¬
the
per
showing
~
"
~
-the amount of power,
economic
power
readers
to
and national banks to deal in and underwrite its
purchased
By
31% of the total.
the
means
average
lationship
electricity
payments.
the
and
the
relationship. ^
new
pressure
of
on
That trend
rate
turing and hearly all other lines
writing
Securities Act
effort
,
follows:
;as
The-
Senate
Banking and
C
struc¬
u
C
r
rency
i tt.ee
o m m
held
wholesale.
The dollar will buy at
less
than
wholesale .•'?•' somewhat
what
half
it
bought
before
the
It has
changed at retail. The
purchasing power of a dollar has
war.
shrunk at least 40%
These
permanent
are
money
There
since 1939.
changes in the value of
changes.
people who still
thought that at a
given point here, we shall sud¬
denly see all prices corrected back
to prewar levels, or if not all the
are
entertain
some
the
back, half-way back. It is a
hope.
The price level has
changed permanently and we are
on a
new plateau of prices. I Not
in any of the years of the near
future are we likely to see even
remotely a return of the prewar
level of prices; ,;
'
way
false
M.
Bratter
hour
,-V,
and
f
1934/ and
eligible for
underwriting
and
dealing
o
be
in by
hearing
majority vote the same
day approved the proposed bill,
containing an amendment offered
by the SEC.
In the Senate on
the
1
over"
was
"passed
objections from
measure
because of
The House
both sides of the aisle.
and Foreign Commerce
Interstate
Committee held two long
matter
the
on
Exchange Act
hearings
June 4 arid 5,
on
Banking Act.
be
worker,
man
itself
made
available
for
each
" horsepower
per
applied to manufac¬
more
must be
between
the
trend
of
duction of all physical goods and
the trend of sales of power by the
The index of produc¬
turing, ,transportation,
and
all tion
by another year or two should
other phases of American busi¬
be roughly double the pre-war
ness.
1
level.
In order to bring about a
Now, over a long period of time doubling of the physical volume
there has been a very close re¬
of production, it will be neceslationship' between the trend of ary to bring about a tripling of
output per man hour, the produc¬ the amount of industrial
power
tivity of labor, and the amount of used in American
manufacturing.
power available per worker, and
It takes triple the power to double
in order to keep a steady growth
the physical volume of output.
in the productivity of American
While these physical trends are
industry, there has had to be a going
on, there are certain finan¬
steady increase in the horsepower cial and dollar trends which are
per worker.
:
perhaps
even
more
important.
Now, in the decade from 1919 There has been for a great many
to; 1929 the horsepower per work¬ years a very striking relationship
er
increased
horsepower.
by
one
full
unit of
In the next decade,
same in¬
industry.
between the sales of electrical
ergy to
residential
income which
but in the present decade,
from 1939 to the end of 1949—and
people of this country.
tio
here I
and
crease.
am
year and
a
estimating for the last
half, roughly, of that
between
the
16th
by Dr. Edie before
Annual
Convention
of
the Edison Electric
Institute, At¬
lantic City, N. J., June 2, 1948.
the
the
received by the
This
residential
ra¬
demand
income
distorted
with
f*An address
was
en¬
and
users
'29 to '39, there was the
the
payments has been
during the war period
result that
domestic load
ever
even
though
is higher than
before, the share of the
sumer's dollar that is today
con¬
being
spent for electrical energy is 25%
Stromberg-Carlson Com. 6 Pfd.
Crowell-Collier Pub.
Texas Gas A Trans.*
contradiction between the
price trend in the utilities and the
price trend everywhere else has
been building up an unbalanced
situation which cannot last
very
much
longer.
We are nearing a
point where a change has to come
about, and the only place where
that change could be effected is
in
the
rate
of
structure
the
of
utility industry.
In
the
order
indicate
to
of
some
practical phases of this
should like to try to
make a number of specific points.
First, I would say that attention
should be given to the dividend
more
problem,
dollar.
the
I
electric
been
a
bursed
affair
amount
was
not been
To
was
industry
as
of
in
dollar
far
as
dollars
has
the
power
concerned.
illustrate
this,
as
far
as
of the divi¬
^
'
-
I
have
re¬
cently
examined ten operating
companies that I would classify as
leading
companies,
well-known
companies, and companies whose
stocks
common
would
command
Portsmauth Steel
enabling the Bank the more easily
to
market its securities in this
countries, especially
supplementing the direct aid
by the European Re¬
covery Plan.
aid to foreign
in
rendered
executive
terstate
session
shortly,
seem¬
ingly with the object of working
out a compromise that will give
the Bank
not quite
all that it
seeks,"
proposals, during the course
examination of
Bank's operations and pur¬
of Miich complete
poses
possible
modifications
of
been
Bank's
World
the
tentatively
bill
have
suggested from
House committee sources, and one
offered
Mr.
in
hearing
Friday's
by
Eugene Black, U. S. executive
director
of
Bank
the
following
conferences between him and the
National Association of Securities
Dealers'
scribed
Washington office, is de¬
as
responsible for the fact
that the NASD
for
a
withdrew, at least
(The object
tion
reported in the "Chron¬
was
icle" of June
3,
ment offered
require
Council
how
on
National
the
to
17.) The amend¬
p.
b.y Mr. Black would
biennial reports
make
the
legislation shall
new
have been working,
lar reference
securities
to
report
with particu¬
the viewpoint of
dealers
Mr. Black said.
Advisory
and
investors,
That is, NAC will
the effects of actions it
on
previously shall have approved.
has advised
jection to the proposed exemption,
from its Acts on the ground that
the
National Advisory Council,
comprising
the
Secretaries
of
State, Commerce, and the Treas¬
Wolverton
Comments
Following the hearings, Chair¬
man
Charles A. Wolverton of the
committee
House
"Chronicle"
the
gave
following
,
the
state¬
eration
ercise alternate,
different, control over the sale of
Bank's
securities
in
this
the
country.
,
"The
International
Bank
arguments ad¬
vanced by the Bank in support of
these exemptions and changes so
as to facilitate its sale of securi¬
the
ties.
is
also
Committee
The
ex¬
ceedingly conscious of its respon¬
sibility
loans
to
based
foreign
afforded to
on
securities
which
American
investors by
securities
ent
Committee
are
laws.
well
refer¬
with
particularly
abuses,
ence
safeguard the protec¬
repetition
of
past
to
from
tions
the pres¬
the
While
appreciates
that
argument can be made that
the obligations of the Bank stand
an
the,
of
the
same
U.
stead
S.
as
obligations
and,
Government
should be entitled to
the same exemptions, it is clear
that this is true only insofar as
the total obligations and
guar¬
antees do not exceed $3,175 mil¬
therefore,
for
mitment.
"We are now studying what, if
legislative assistance can be
given the Bank in marketing its
securities and still preserve ade¬
,
x
(Continued
:
r
on page
40)
Reconstruction
Bought—Sold—Quoted
at
„
and
Development
Net Prices
any,
quate protection to American in¬
vestors."
.'
.' '
Rep.
Bennett Summarizes
Views
hearings, Rep.
John B. Bennett (R.-Mich.) stated
First Mortgage 5s
the
position to the "Chronicle" as
below. Mr. Bennett and
Chairman were the only com¬
quoted
the
Central National
Teletype NY
Corporation
ESTABLISHED 1927
105 West Adams St., Chicago
,
under
"The Committee now has
consideration
lion, the amount of the U. S. com¬
ment:
Quoted
Exchange and Other Principal Exchanges
Telephone BArclay 7-0100
and the Economic Coop¬
Administrator, could ex¬
though somewhat
Banks,
Following
Goodbody <Sl Co.
Member* N.Y. Stock
the Chairman of the Board of
ury,
Governors of the Federal Reserve
in
Chairman
*Prospectus on Request
115 Broadway, New York
has been made. The Securi¬
Exchange Commission
us that it had no ob¬
and
ties
two-year test period, its ob¬
jection to the bill.
In¬
these
the
,
Several
on
Foreign Commerce
exhaustive hearings on
and
held
has
Committee
House
"The
his
-
and thus allow it the
readily to render financial
country
more
Bank,
SEC, the Treasury, and the
NASD were heard; and at this
writing it is preparing to have an
Missouri Pacific Railroad Co.
Tidelands Oil
Sold
Bought
.
,
tary of the Treasury, and Federal
Reserve Board support this bill as
the
dis¬
concerned, but it has
stable affair
a
purchasing
dends
-■
utility
stable
nominal
the
dividend
The
'
Chas. A. Wolverton
Secre-
Bank,
at which witnesses from the
Texas Eastern Trans*
Detroit Harvester
That
pro¬
Inter-
"The
national
.
must
national
National
the
by
June
Securities
banks under
one-wit-
ness
and
1933
per¬
functory
Herbert
of
the
one-
a
money
1939, 20 years later, the power
purchased outside was 58% of the
total.
By 1951, assuming that the
But in one direction there has
of business. This trend of mechan¬ present
expansion
program
;is
been an increase in the purchas¬
ization causes the great expansion carried out, 75 % of the total power
of facilities on the part of the used in industry will be purchased ing power of money, and' that is
over
the
services
rendered
by
electric light and power industry, outside industry. : ■'■j'i* V}
Xf the utility industry. The price
which is now in process. It is the
So that in 30 years, we have
per unit of product for this in¬
only way by which the productiv¬ gone from 31% up to about 75%
dustry has gone down while infla¬
ity of labor can be increased and in this important ratio.
tion
has ^prevailed
universally
can be caused to pursue a
steady
One consequence of this is that throughout the American economy
trend of improvement from year
a new relationship has established
and throughout the world.
to year. It means that more power
of mechanization within manufac¬
is
from
provisions
history of
since late May
is in the value
itself.
The value of
money has changed since the pre¬
war
period.
It has changed at
A t
of the truth in
this.
\f
the
guarantees be
exempt
the
•> ,.,'
While this sub-normal position
prevails, - there is a third trend
which lays the groundwork for a
ture.
that its securities and securities it
the
this
income
by this bill (H.R. 6443)
proposes
Council.
Twenty-five per cent
below normal is the condition' in
that
f
Advisory
to
total
o
National
the
of
going
dollar
approval
re¬
share
the
has
Bank
~
historical
between
consumer's
the
"
simply
Normal
securities, etc. In this
the
effort
utility rate structure and the manner in which
I speak of the subject of the
long last.
of the fina'neial pages are aware, the World Bank
has been seeking legislation to exempt it from the need
register its issues with the SEC, to permit state "member banks"
As
this year
subject to which I am directing my
that is in the middle of change.
Gives views of members of
Congress concerned with legislation and indicates bill (H.R. 6443)
is not likely to pass in present form.
1-672
22 East 40th
Teletype: NY 1-2948
who
members
listened
to
testimony June 4 and
Representative
Bennett
distinguished himself as a per¬
sistent
and
inter¬
intelligent
the
5
Street, New York 16, N. Y.
Telephone; LExington 2-7300
mittee
entire
and
rogator,
evoking
(Continued
the
on
admiration.
page
43)
^
Volume
167
Number
4706
THE
COMMERCIAL
FINANCIAL
&
CHRONICLE
(2525)
flldrich
Electric Output
The
Carloadings
Retail
State of Trade
Price
Industry
Index
-
In
On the industrial front last week total production for the couri-
.
try
,
whole suffered
as a
shut-downs
for
slight setback due to the
a
Must Democratic Capitalism Always Appease?
r
Business Failures
J.
;
present worldwide struggle between freedom and col¬
lectivism, it still is only the latter's proponents that give the impres¬
sion of knowing specifically what it is that they want.
Irrespective
of the actual correctness of such impression, the
believers in democ¬
racy and the free market persist in conveying
a
philosophy of appeasement and meaningless
middle-of-the-roadedness.
The latest example oi
plant
numerous
Day week-end. Notwithstanding the
wide-spread cessation of activities in observance of the holiday, bowk
"
this hybrid credo has
ever, output in most lines held somewhat above that of the corresponding period one year ago. In addition to this favorable aspect
•
of industrial
one
of
versed
noted that both insured unemployment
and claims for unemployment insurance continued to decline moder¬
ately, while payrolls on the other hand, were steady and at a ve^y
high level.
"
■
'
|
The labor situation the past week continued to present a corM
; fused picture in that field, since the coal and rail disputes pose two
big hurdles for industry, labor and the government To negotiate.,Mb
the former industry; Justice T. Alan Goldsborough has ruled that
:
John L. Lewis and his miners must negotiate with the Southern coal
activity, it
The
the
Memorial
the
cerning
By A. WILFRED MAY
Auto Production
and
following statement ; con¬
the European Recovery
Program has just been issued by
Winthrop W. Aldrich, Chairman,
Trade
Commodity Price Index
Food
was
the
nation's
group
recently been furnished by
influential
most
of industrialists,
the
and
well-
Chamber of
Commerce of the State of New York.
Last week
,
this
issued its major contemporary credo
under the caption, "A Statement of American
Economic Principles,"! a document compiled after
'
.
,
,
"
group
.
producers as
^
S
order and the
decision
of
months of
.
preparation and released for very wide
and important national consumption.
;
The Chamber declares that its Statement "is
interpretation of the application of
American principles to the economic problems oi
this economic age!"
Nevertheless, despite this
high aim, the document contains the great num¬
ber of errors of commission and omission which
really
unit. Mr. Lewis has agreed to comply with the court's
nation now awaits the outcome of these negotiations.
j
In the latter case a breakdown in rail negotiations has occurred
In which the three railroad brotherhoods have refused to accept the
'
A. Wilfred
May
are
the President's
fact-finding board after 19 other unions
On Thursday of this week the government will seek
injunction from Justice Goldsborough barring a nation-wide rail¬
an
characteristic
the
of
statements
from
those
filling the position of leadership in the battle for democratic capi¬
talism.
Like so many others who have strong convictions about the
an
all-around benefit of free enterprise, and unlike the collectivists.
road strike.
'V
the Chamber comes forth with a set of principles seemingly designed
In this connection; it is worthy to note a statement made last
Such is its indefiniteness,
year
by Daniel J. Tobin, General President of the International to please every one and offend no one.
Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers, that it would no doubt offend neither Wallace, Taft, Chester Bowles
John L. Lewis, Harold Laski, Marshall Field, Premier Gottwald of
; to the local head of that union in the City of Oakland, Calif., in which
communist Czechoslovakia; nor the NAM, CIO, or ADA. ^ In fact
he stated in part:- ;:v
\V v-/
"No general strike has ever yet brought success to the labor as will be shown below, much of the language is practically a replica
of expressiohs of each of those sharply contradictory protagonists.
']■, movement. On the contrary, the only result of a general strike is to
Expediency is perhaps excusable when used by a political can¬
persecute and inconvenience the public and seriously injure the
didate out to garner votes.
Individuals-running for office find it
•; thousands of fair employers with whom we have contracts."
necessary to nail together a collection of planks in a party platform
to enlist the greatest amount of ballots and antagonize the least
f:-:For the month of April, net railway operating income of Class I number of people. But why private citizens, presumably appreciating
g railroads of the United States totaled $53,104,072, compared with the great issues involved in the world-wide struggle, must stultify
$59,459,540 for the same month in 1947, according to the Association
themselves by concentrating on doing a "public relations job" of
P of American Railroads.
Estimated net income, after interest and appeasement is
incomprehensible as well as ominous.
rentals, in April totaled $27,100,000, compared with $35,600,000 in the
As is characteristic of such statements, most grievous of the
like period of 1947.
//;;•>;,■, \.'uf
\.07!;..■-,,rjv.
'i\?; faults of the Chamber's pronunciamento are those of material omis¬
For the first four months of this year net railway operating
sion.
For example, there is not a word about the fundamental ques¬
income of the Class I carriers, before interest and rentals, amounted
tion of what kind of monetary system we should have.
The Cham¬
to $195,750,651, compared with $235,703,475 in the similar month a
ber issued a statement concerning its feeling about a return to a
year ago, while net, after interest and rentals, in the first four months
domestic gold standard a month ago, which is criticized in detail
\
of 1948 is estimated at $100,000,000, compared with a net income of
by Dr. Walter E. Spahr on page 2 of this issue, in which it indicated
$131,000,000 in the corresponding period of 1947.
its satisfaction with our present monetary policy of repudiation.
In the 12 months ended April 30, 1948, the rate of return on
Irrespective of the Chamber's agreement or disagreement with the
property investment averaged 3.24%, compared with a rate of return repudiation in which we have been engaged, surely some affirmative
of 3.26% for the 12 months ended April 30, 1947.
statement of what our system should be, is indispensable in a "state¬
Total
operating revenues in the first four months of 1948 ment of American economic principles," bound up ds it is with the
important concept of property rights and a free democratic system.
amounted to $2,972,210,494, against $2,730,856,100 in the like period
If leaders of opinion like the Chamber are loath to explain to
of 1947, or an increase of 8.8%, while operating expenses in the first
t four months of 1948 amounted to $2,406,596,014, compared with the people how their human freedom rests on the redeemability of
$2,141,716,374 in the corresponding period of 1947, or an increase paper money in gold, and the wide social dangers implicit in de¬
of 12.4%.
bauchery of the currency, who else will?
V;v;Of:-\
In this case this is particularly necessary to give meaning to in¬
:S:'
?!
definite expressions of principle throughout the Statement.
The number of new businesses chartered during April declined
slightly to 9,223 for all 48 states, as compared with 9,346 in March
Profits Overlooked
: S
Dun &
Inc., reports.
The April count
drop
had accepted it.
:
,
a
Urges Senate
To Restore ERP Funds
Steel Production
The
5
•
"
Bank:
"AH
•
of
us
>
who have fol¬
lowed
the
evolution
the
f
o
-
European
Recovery Pro^:';
begin-:
gram,
ning with the
address
of
-
Secretary
Marshall
ago,
year
a
are
dis¬
greatly
turbed by
the
action
the 5
of
W. W. Aldrich
House of Reo-
resentatives
•
v"
'•
in reducing
<
'
'
'
'
t
*
substan¬
tially the funds available for re¬
lief and reconstruction, in
is
It
imperative
as
Europ£.
matter; of
a
good faith that the Senate restore
the full amount called for by the
Foreign Assistance Act of 1948.
"The
Foreign Assistance Ac
<
itself
passed by huge majori¬
House of Representa¬
was
in the
ties
tives
in
and
Senate.
the
financial
of
amount
The
assistance
stipulated in the Act was the re¬
sult of very careful study.
Few
pieces of legislation have had a
comparable background of anal¬
ysis. The impact of a foreign aid
program upon the American econ¬
omy was reviewed in great detail
by the State Department, by the
Harriman and Krug Committees
and by the President's Council of
Economic
Committees
Advisers.
not only held ex¬
tensive hearings but also sought
first-hand information in Europe
of the Congress
itself.
"The
-
■
inase
N ational.
Recovery Pro¬
European
is an integral part of the
foreign policy of the United States.
It represents an effort to build up
the
nations of
Western Europe
gram
so
that
they
become
may
self-
supporting and strong enough po¬
litically and economically to resist
"
all attempts
cess
at aggression. Its suc¬
should not be endangered."
"
..
reflected
Bradstreet,
of
:
5.9%
from
it
year, and
the
was
so
a
the corresponding
month
a
;
year
ago,
bringing the cumulative total for the first four months of the
0-
year
and -it
;
to date to 37,442.
This
was
was
down
22.4%
9.3%
from
the similar
less than the record
1947 period' with 41,272
number of 48,254 company
organizations set in the first four months of 1946.
Compared with
last year, 31 of the 48 states reported fewer incorporations for the
:-v':?£>■£
four months' period
than
a year ago.
A
month last
same
far this year has shown a drop in new busi¬
incorporations from
ness
the
below the 12,469 for April, 1946.
26.0%
Each month
charters recorded in
9,802
second
Economic Principles" is that of a forthright and
the basic need for adequate profits.
While
vigorous affirmation
it is indicated that
sufficient "return on investment" is not sinful, there is no forth¬
right affirmative declaration that profits (as compensating for risk
ventures) are necessary for the provision of the tools of production,
making for our unprecedentedly high standard of living and the wellbeing of the laborer, democratically attained through decisions of
the free market-place.
This being part and parcel of the true
American ideal in the two-world schism, why should businessmen
shy away from its expression?
of
.
.
In the
constitute
Day buying of food and vacation specialties
rose to a very high level the past week.
Numerous promotional sales
helped to stimulate the post-holiday demand for many , types of
seasonal
merchandise.
The total dollar volume of
retail trade
The pre-Memorial
slightly during the week and moderately
corresponding week a*year ago.
increased
of the
STEEL OPERATIONS
s
SCHEDULED
important omission in this "Declaration of American
exceeded that
'
'
!
it
is
not
sphere there is no explanation offered of what should
"adequate" reward for either labor or capital. Likewise
stated who it is that is supposedly obligated to pay the
wage and to guarantee full employment and the
security to which the workers are allegedly entitled.
living
HAST SMITH & CO
Related
to
the
economic
H \nover 2-0980
52 WILLIAM ST., N. Y. 8
Bell
Teletype
Private
Wires
1-395
NY
Connect
Montreal
New York
Toronto
profits question is the characteristic neglect of
And, making
(Continued on page 46)
:
'
the reiteration of the unalienability of property rights.
■K:
-Vr
fFor detailed
listing of these Principles, see p. 12 of this issue of
the "Chronicle/'
••
demand-supply balance is purely academic.
Nowhere has "The Iron Age" found an abundance of steel in con¬
sumers' hands. Everywhere it has been found that inventories are
not relatively large, they are not nearlnormal in many cases and
customers are still screaming for steel supplies, states this national
about
argument
MOTOR
Dravo Corp.
there will not be
enough steel for those who say they need it. They will not be able
to make all the things they say they have scheduled.
•
r:
v
third-quarter
quotas
become
known
.
CORPORATION
Time Inc.
metal-working weekly.
■K.V-
Sun Life Assurance of Canada
same
an
•
.'•V/'*'.. Buyers of steel are mainly interested in prices and basing points
When
Royal Bank of Canada
AT A FRACTIONALLY
HIGHER RATE FOR CURRENT WEEK
and
Bank of Montreal
McGraw
Cowmon
$1 Per
Price
(F. H.) & Co.
Stock
Shar®
Est
,
American Maize Products Co.
answer to
the big questions concerning the industry, "The
Age" states that the steel situation this week looks as strong as
it ever was.
There is no sign of falling demand and things that
looked easier a short time ago are tighter.
Customers will still be
In
Iron
-
shouting for steel next spring and steel prices may be higher next
year.
FREDERIC H. HATCH & CO., IHC.
.
and
longer, except for possible coal strikes and finally, when & fa.llfug off does come, it will come suddenly without any warning
Production
will
be
ties
Bought—Sold—Quoted
Established
at peak levels the rest of this year
MEMBERS
63
N.
Y.
SECURITY
Wall Street, New York 5,
N. Y.
DEALERS
'
(Continued
on page
33)
BroodwuyrNeW
t_i
ASSOCIATION
Bell Teletype NY 1-897
I"'
'
■
V
TEL?^,.Vr°'
42
1888
Dea'ets'
niaby
_
4-4500
.
>:
6
CHRONICLE
FINANCIAL
COMMERCIAL &
THE
(2526)
Thursdayr June 10, 1948
Who Ate Dux Stockholders ?
'
'-;;v
By HAROLD S. SUTTON*
'
Treasurer,
.
'
•v''
V
Consolidated Edison Company of New York, Inc.
.
.
.
.
.
•
Urging regulators of utilities to consider well effect*, af. rate changes.on individual investors, Mr. Sutton
points out stockholders constitute all classes and groups and their interests should be safeguarded.
Notes lack of increased .utilities dividends to jcopf with* higher living costs, and, as a -result, stock¬
holders say industry is .too much regulated and too vulnerable to inflation. Concludes stockholders' inter- i f
ests must be preserved if private enterprise is to enddrev •
V^-.'
-
-
JBy PAUL JEINZIG
•
" "■
,
Noting /recent official optimistic statements in Britain
on
;
.
economic
prospects, despite increase in export deficit, Mr, Einzig sees nothing
in situation to justify a reversal of austerity, drive.' Foresees possi¬
bility of exhaustion of gold
..
*
A
/
of
v;
paramount problem of the day is public relations. American business long ago mas-,
by end of year, and adoption /
resources
series of austerity measures. /
new
'
tered the
widely.
■
job of producing its goods in quantity, cheaply and well, and distributing them
During recent yeafs it has come to realize that it now has another job—to de-
fend
own!'
its
place
'
the
social Scheme,
to justify the
private enter¬
prise
system
in
-
under which it
operates, to
tell the man-!
agement side
the
of
of
Hence I
owners.
to ask you
many
well
were
interests
and
what about the
aware
attitudes,
rest, the in¬
dividual stockholders? As to therh,
we
have wondered whether we
shall have
to bear with me in the
references that must neces¬
re¬
their
but
ing to find out/something about
the
so-
Public
lations,
called, is
counselors—we
has been»making «in the
company
field of' stockholder relations, try¬
labor-
management
story, and so
on.
LONDON, ENGLAND—The publication' of the foreign trade
figures for April, showing a further increase of the import surplus,
was
followed by the issue of an explanatory statement by the
'"1
:—"*—^
—:—
in three successive stages—-first stockholders' letters, and try to Treasury, in which the significance of the increase of the trade
the customers, then the employees do a lot of other little things we deficit during
last
two
.mol orists, even in the absence of
and now the owners. All of these think our job requires and whidh ,the
months was
any
special /justifying
are, of course, but segments of the we hope may help to make them
eircurmf
sought ; to be
stances,
is once more /possible
general public—often overlapping. think well of us.
j
m in imized;
From our contacts with the iiiwithin limits/ The import of films
While I am reoorting to you,
is being resumed. Clothing rations
here are the results of recent in¬ stitutional investors—the banks, The official
arc increased.
No doubt in each
vestigations and studies which our investment: t r u s t s, investment st a tern erit
sarily be made to our company.
our
findings and conclusions
have any value to the light and forts toward.
This is almost
We were like la
too fundamen¬
power
industry, or to business manufacturing concern trying to
tal to bear repetition here.
generally, it 'is by way of a case sell a product without knowing its
'
:
•market.
If we could only know
Lately an outgrowth of this study., .Therefore I shall proceed
to give you the particulars of this more accurately the "nature pf
public relations consciousness has
appeared in the form of a stock¬ case study, and indicate some of stockholders," we could proceed
the conclusions and lessons we much more intelligently, in ^ad¬
holder
relations
consciousness.
dressing them.
Business heads are coming to real¬ think may be drawn from it.
Harold S. Sutton
ize ^'.not only that the stockholders
are entitled to consideration, but
that their cultivation pays off' in
loyalty* interest and cooperation.
as though management
It is almost
had directed their attention to the
sides of the well-known triangle
*An address
fore
16th
'
lahtic
by Mr. Sutton be¬
Annual 'Convention' of
the Edison
Electric
Institute, At-
City, N. J., June 3, 1948.
BOSTON
several
Boston
&
Maine
they do for
they
i
/ /
Empire So. Gas.
Gisholt Machine
Prior Preferred
Power
Walter J. Connolly & Co., Inc.:
24 Federal
were
retired
Byllesbv & Comoany
PHILADELPHIA OFFICE
think
it
they
i
Stock Exchange Bldg. Phila. Z
Telephone
Teletype
RIttenhouse 6-3717
LOUISVILLE
ST. LOUIS
^
!1 BANKERS BOND co;
Incorporated
SECURITIES//
AOO;OL»VE
STREET
off the
of
a
We
on
Members St.
Louis
Stock. Exchange
the
same
e
of
A.M.,
Pac.
Std.
Time:
j'.y'
CORPORATION
Wall Street
Sp-82 at
///;■• /
Members Standard Stock Exchange
of
WHitehall 3-7253
Private Wire System 'between
and Los Angeles
Brokers
the
-
Dealers
-
and
common
were
dyed-in-the-wool in¬
interested primarily ih
Underwriters
-
Yakima, Wn,
same
:..
as
the
///'.;Z
common
:;-///■ >',€*.' 0/
trate
were
pub¬
documents
inclined
to
concen¬
the adverse factors,
on
some r
or
of
speeches
the
and
made
it is certain that noth¬
has happened during the last
months to justify its reversal
in spite of the adoption ol
Marshall Plan, the outlook &'
British balance of payments
wrong,
ing
few
For
seeks
the
-
.•
a
\
•
s
does' ' "
it // ~
the- optimistic views
to. convey
fact
•
Treasury Itself
the
noi share
of payments
•>
is
indicated
by >/
that^some two months
'
when the^ itrade balance be- ;
deteriorate, the publicatibri
of monthly figures of gold sales ' v
by the Treasury was suspended.* /
•>ago,
gan -to
This
fact seems to indicate that,
notwithstanding / the
optimistic
statement, gold losses must be
rather on the heavy side. When
in October, 1947 Mr. Dalton de¬
cided to publish the monthly gold
figures it was in order to provide
a simple indice showing the grav¬
ity of our position.
Why then,
it may well be asked, should Sir
Stafford Cripps have decided to
suppress
this indice
or
at any
rate
to reduce its effect by pub¬
lishing quarterly figures instead
of monthly figures?
The public /
is kept a little longer in ignorance
of
the
This
the
for
/
extent
of the gold losses.
is not likely to help
government in its campaign
again
^
higher output and austerity.
The
too
must
government
well
that
aware
Marshall
its
aid
be
only
spite of
in
gold
/
/
resources
approximately 124,000
which
registered,
108,000
the
common
we
found
names
stock was
that
about
represented/ individuals—
women
or
ness, brokers and other
.
.
(Continued
fiduciaries,
on page
32)
Allowing for all this, there
be no reason for taking
more- optimistic
view than a
seems
a
to
f
few months earlier,
about the
increase of the
importsurplus.
But for the re¬
assuring statement the ^effect oi
the " figures might have been a
salutary response to the govern¬
ment's campaign in favor of higher
outputs, stable, wages and lower
profits. Since, however, the Treas¬
ury-expressed the view that thing?
not
are
so
bad
as
would
ple will tend to be less inclined to
practice
self-denial
than
they
would have been, otherwise. / /
/
any
of
the
case,
U
the
relaxation
of
the
balance
must be over.
now
go
of
payments
once
is
It
as-
perr
:
/
Conceivably the change of policy. may be due to a desire to
counteract
the
excessive
pessi¬
that prevails abroad about
mism
the prospects of sterling. Possibly
it may be the consequence of the
improvement of industrial output,
as
a
result of which the govern¬
ment
may
feel
it
can
afford /to
slacken its austerity drive.
who try to see 12 months
Those
-
ahead
more,
are
tion of
a
new
series of very strin¬
austerity measures
avoided later, if the gold
gent
can
be
reserve
declines below danger level. What,
then, is the object of the govern¬
ment's
present
mism?
"synthetic"
•
opti¬
.
crisis
British tourists
abroad
Plan.
is
disappointing that
should choose to
adopt the opposite .course,
!
as
inclined, however, to shake
their heads with disapproval. For
appear
it is difficult to see how the adop- /
from the trade figures, many pso-
In
plexmg;
the government
_
yet, the government ^weni
out -of /its way to. tell the British
public that .there is no need to
worry
the Marshall
;;
-/
'
And
austerity measures
taken last year is liable to convey
the impression that the worst of
Bulk of Shareholders Are
Of
still/very gloomy.
most
.:•>/'/-///'/.■■ Z-v Individuals
in
is
L'f-
joint ownership.
We assumed that the stock
stand¬
ing in the names of bank nomi-
Branches at
Kellogg, Idaho
actually wa$.
concentrate
stockholders only.
best to
'
men,
Spokane
Peyton Building, Spokane
at
v
STANDARD SECURITIES
CORPORATION
5
question^;
what the: story
thought
stockholders'.
,
BUCKLEY SECURITIES
answers
be about the
Quotes call TWX Sp-43 on Floor
Exchange from 10:45 to 11:30
other hours,
:
these
vice-president wil
a
income, and content
a fixed return.
We also feel
that their reactions to our stock¬
holder relations activities would
For Immediate Execution of Orders
or
.
,
with
SECURITIES
Company
r
vestors,
safety and
Central Illinois Public Service Co.
Seminole Oil & Gas
to
\ '
dogmatic abou t
that, for the present at
least, we could take it for granted
that the holders of the preferred
NORTHWEST MINING
oir
We felt
/
SPOKANE, WASH.
Portsmouth Steel Corporation
Philadelphia, New York
enclosure,
the dro ?
The troiible is that none
hat.
stock
'
in
was
answers
cover
PHILADELPHIA
New York
lished
the
How did
reel
Bell Tele. LS186
44
official
the
the
of them .agree. So we decided to
make a conscientious effort to dis¬
/:■';/
1
Kentucky Home Life Bldg.
LOUISVILLE 2, KENTUCKY
'
Philadelphia 2
PEnnypacker 5-5076
of
didnlt
or
have"any/inter¬
many
1st Floor,
1420 Walnut St.
Indeed some
austerity measures.
the / otheri?
they interested only in t
and
INVESTMENT
*
/; That
'
/
grave
rifiees.
the last.' Did they
in the dividend
the
•
Data bit Bequest
prospects!,
very
canrml last.much beyond the/end
The adverse,
of this year if the dollar drain
trade balance is much larger than
should vcontinue at the present
wa*anticipated. The drain through
rate.. One /should have thought
allocations to Sterling' Area coun¬
that v in ; the t circumstances
the
tries "is also very heavy. Export
austerity drive would be inten-f
prospects are growing worse. By
sified, if only in order to offset
the look of things, closer co-oper¬
the unavoidable unwarranted opation with Western Europe will
timism .created by .the/adoption! of •
involve -for Britain additional sac-'
It is easy to be
Bought and Sold
£1 Paso Electric
What did
annual
Debentures
*
How did the
the bunk,
was
check that
Ashland Oil & Refining Co.
Long Plstance 238-9
ink
people
frighten
working harder-and submitting tc
and
.
were
Bought and Sold
.
marw
The volume of acknowledgements
had been so small as to
suggest
PH 73
Ashland Oil & Refining Co.
;
are
reasons
"Sir" Stafford
care one way. pr
velope?
t
view of the balance
other
too /gloomy picture oi
economic prospects,' ir
to
a
about the management?
1
Tele. BS128
Stock
What did
how
or
they think of the welcoming let¬
ter?' Did they like it or did they
est
Common
public not to take
,
order
-
ally taken the trouble to tell the
'Dr.'Paul Einzig
trier./ Various
a
government's decision. The y
oi these decisions is';!
a reversal of the gov- *>.
ernbient's- whole austerity/ policy^//^;
And now the Treasury has actiil /
,i»enGy. coun-
Britain's
good
a
hov/ever,
ports come
from soft cur-
paint
reversed
total
sum
im¬
surplus
been
/
meas^
be made out in support,/
can
of the
austerity
they like o
report? / Even, we might
ask them, what • did:
they/; think
Street, Boston 10
Tel. HUbbard 2-3790
living,
a
stockholders like them?
Traded in Round Lots
ML M.
ad¬
,
Light
&
they fall, and into
cations I mentioned.
Stromberg-Carlson
Wisconsin
what
of them didn't work at
Dayton Malleable Iron
•
where
have
case
bj
Cripps . and . other
all, because
members of the government were
living ok
income?
;/: ■'■ ■;/*//
v/// ///'/ ; inspired by a high degree of pes¬
For some time we had
been simism./ Whether that /"strength
sending out the various communi¬ through gloom" policy was right
Co.!'.
Botany Mills Com. & Pfds.
BR.
Into
brackets?
American La France Foamite
B<m
investments?
ageigroups did
what income
Boxboard
Bates Mfg..
/an
mean
/
/
of these instances and in other
"arcs
.
.
porations, Consolidated Edison has
been practicing stockholder rela¬
tions quite intensively over the
last decade. •/ For example, some
years ;ago we adopted the wel¬
coming letter to stockholders and
the quarterly dividend enclosure
giving company news' and earn¬
the stock for income and how
ings., We have gradually been
How
streamlining our annual report. many in hope of profit?
We send to all-stockholders fairly many of them owned Consolidated
complete stories on our annual Edison stock only? In how. many
meetings. We carefully reply to cases was it simply one of their
;
import - surplus does not
given in order to reassure t/.e
public. Nor is this statement ar
isolated gesture. It is keeping
What kind of people were these with- the series of Qptimistic state-,
who had bought our stocky and mcnts and optimistic
measure?
why did they buy it? Had they thac,followed each other during
in fact bought it, or how had they the. last month or two. It is inter¬
come -by it?
If they had bought preted in many quarters as an
it, who and what considerations, indication that the government
influenced them to buy it? Were has slackened its austerity drive.
Earlier this year the govern¬
they investors or speculators—
how many of them were holding ment was accused
of trying tc
Like many other American cor¬
/American
instances
groping in the dark: We ditional/ d61-.
didn't really know the kind if
laf dr^in, for'
people we were directing our ef¬ "m Os t of., tne;
If
tool.
cne
were
the
modern
points out that
the additional.
can
even
With Fusz-Schmelzle & Co.
(Special
to
The
Financial
Chronicle)
"
/
:
though they cannot go to every
ST. LOUIS, MO. — Vincent P.
country, and can only spend half Ring, Jr. has joined the staff of
as much ,as- they could before the
Fusz-Schmelzle & Co., Boatmen's
allocation of exchange allowances Bank Building, members of the St.
for
travelers
abroad
was
sus¬
Louis
and
Chicago Stock Ex¬
pended.
The use of petrol fon changes.
;
'
'■■■V/r'/
V"
"
Volume
Number 4706
167
THE COMMERCIAL
Ahead
between Senate
set-to
of the
President Arthur Vandenberg
and
have
bear-
a
j
tices
i
n g o n their, and the like.
Presidential
It is no
mere
impetuousness
or1 deep concern
over
what
might
happen to Eu¬
rope
that
is
*)
ting
romp
But the
|
nominee.
Varide nberg
to
make
a
a
global
minders < have
taken the stand ftorn the beginhing that' not only did Congress
have
to
authorize ' their^ plans
fight
that
up to the last penny but
the
precise
appropriation
,
would have to be made.
ap¬
be¬
pearance
Carlisle
Bargeron
fore
Sen-
the
v-l-'vate Appropri¬
ations Committee to urge that the
cut be
restored.
The
•
gentleman,
in spite of his coyness of the
past
few months, is definitely an as¬
pirant for the Presidency. I don't
suppose
you
could call him a
"candidate"
These
Were
estimates, it is claimed,
worked
out
and
to
16
European nations. They were not.
They: were prepared right: in
Washington by the State Depart¬
ment boys. '.V,
/., /t;, y
/y .?
the
bone '
pared
the experts of
by
because of the strat¬
^
withstanding
accomplished
festly, if
money should be
could be appropriated
more
it
needed
later—the authorization is already
there.
[
the
convention
by
and of
the
Michigan delegation
dis¬
couraging popular activity ih his
behalf. ■/ /;//: ..//[/;/; //////i///;//
/*' But work is being quietly done
for him and money
to put him over. /•
// His
is being raised
'
purpose
his
new internationalism, his
global
thinking, and to emphasize to the
global thinkers generally that un¬
less he -becomes President, the
Marshall Plan is in jeopardy after
the first of the year—and there is
not much doubt in my mind that
it
would, in its present / high-
falutin' state, be in jeopardy with
Taft, Bricker, Joe Martin and
probably Dewey Tin the White
House.
'
Aid to Europe would not be cut
off, certainly not. But our whole
foreign policy would be given a
realistic approach and Heav¬
en knows, it needs 'to be;
/ //.
more
We
would
continue
to "recog¬
leadership and the
responsibility it entails/' but we
would not completely subordinate
our domestic problems to those of
Europe.
And
you
: would
be
i.
nize
world
our
amazed at how
quickly the Euro¬
problems
pean
the
and
crises
would
dissipate. / In short, our
thinking would shift more to the
American
/ because / these
men, Taft et al, have simply not
scene,
ascended to the international
for Their'
teau
vnance.
to
thinkers into
nee.
As
comes out,
fight between Van¬
and John Taber.
Back
it is not
just
denberg
of Taber is
including
a
the House
leadership,
significantly
Speaker
Martin.
Joe
long
know
the
His
that
have
he
nomination
the convention
lock.
friends
.
is
in
have
available
the
gets into
event
dead¬
a
And when and if the leaders
to go
into the smoke-filled
rest assured he will
get <plenty of consideration. /
.
room you- can
!• One thing I
don't understand
about how the fight developed at
this late stage is .that it is'in con¬
flict with the previous strategy of
like Taft and Martin./ Their
men
is doing is
the
global
throw
frenzy of demand¬
global thinker for the nomi¬
He is acting most unusually,
a
Chairman Of the Senate For¬
eign
much
issue
done
it
without
the
of
approval
Martin;
/ It may
be that
a
trap has been
sent for
Vandenberg with a view
settling ; the question of his
to
nomination before the convention
I notice that both Stassen
meets.
and
Dewey immediately ran into
the : global
thinkers'' embrace.
Stassen would be expected to do
nothing else.
Dewey may have
made
a
mistake
as
he has in* the
May¬
camps.
'
be not.
"
v
"
•
,'
,
I But there is this thought: If a
compromise candidate does have
to
be
picked
out
of
the
hat
at
one
closely with either side.
who
has
!/.'[—
mm
identified
been
—
the
sums
has
for
been
the
practice since time
immemorial for the Appropriation
Committees to then come along
and make
a
how much
spent at
a
detailed study of just
of the money can be
given time.
It has long
been understood that just because
a
certain
passing
group has succeeded in
authorization
U. G. Roman Joins Staff
will
for
tion
be
There
is,
example, pending authoriza¬
for
Of F. I. du Pont & Go.
the
spending
ably $50 billion
on
to
esoeclal
of
prob-
dams, postof-
this
be an ex¬
treme view, a
itudy of
Com¬
mission
*.'■
■
..
cases
/
'v.
•
delays in
basis.
au¬
Stubborn
deci¬
sions and pro¬
its
original plant account as an
In 1918 the
Public Service Commission segre¬
unclassified amount.
gated the original figure, classi¬
as valid cost, among other
items, $4,600,000v as water rights.
In; 1943, however, the Commis¬
sion disregarded its 1918 findings,
and ordered that $3,832,171 of the
fying
.
■
$4,600,000 water rights figure be
charged off. On appeal by the
company; the Appellate Division
Of the New York Supreme Court,
on
July 8, 1946, annulled, va¬
to seek
set aside the Commis¬
cated
and
sion's
order, and the Commission
filed
appeal.
no
But
when
Rochester
Electric applied in 1947
j
Gas
&
to issue
preferred stock, the
Commission made approval con¬
tingent on the write-down not
only of the water rights figure, as
noted above, but also of some
$1,007,843 of items having similar
legal background. Again the com¬
pany was forced to resort to the
courts (even though the needs for
funds was'immediate), resulting
in a decision by the Appellate Di¬
vision on Jan. 7, 1948/ annulling
bonds
'|1/
ment
Its Own
.»
At
its
organization in 1904,
Rochester Gas & Electric set up
firmed up". The company has had
Curtis ter Kuile
cedures could
to postpone indefinitely its origi¬
easily lead to
; nal plan to
replace its $5 pre¬
mvf.btors' misgivings. If a utility
ferred with a lower-dividend iSin New York State petitions for a SUe."
"/ '
fate increase, or for authorization
bf
financing,
the management
Infringement on Management's
functions
knows in advance that the pro¬
';
ceedings will require a great deal ■\ Late last year New York State
pf expensive detail work, a long Electric & Gas applied for author¬
period of time, and the possible ization to sell $10,500,000 first
imposition, as a condition to the mortgage bonds and $6,000,000
Authorization, of onerous account¬ preferred stock, partially to fi¬
ing adjustments extraneous to the nance a projected three-year con¬
case at hand. It knows that, unless
struction^ program of $45,000,000.
it desires to be in position to go
j The Commission, however, au¬
to the courts, it may as well dis¬
thorized issuance of only $5,500,pense with any arguments based
000
bonds
and $3,500,000. pre¬
on the need for earnings to attract
ferred. on the basis that only $8,equity capital. It can also expect
000,000 or $9,000,000 would be
to be given instructions on how
needed .during 1948, and that ad¬
to handle its affairs, and it had
ditional funds could be provided
better be able tp support its case
as necessary.
--/,• ■
On a short-term basis, as longj It might be maintained that the
term plans Will likely be given
scant.attention... >'■;///,•; N management of a utility company
is justified in? planning as much
as three years ahead.
It would
Case Histories Demonstrate
In
February,
1947, Brooklyn also seem logical for the manage¬
tJhion Gas applied for a rate in¬
Adherence; to
Mandates
companies considerable amounts
in interest charges. It took Con¬
solidated Edison a long time to
effect its wholesale refinancing;
consequently a large part of it
Was done after interest rates had
may
and
the Commission's determination.
to avoid the detail
and expense connected with sev¬
have been granted, but
creases
all
The
Financial
Chronicle)/■
CHICAGO, ILL.—U. G. Roman
has become associated with Fran¬
cis J. du
Pont & Co., 200 South La
Saile. Street. Mr. Roman was
formerley with Adams & Co. and
prior/thereto for a number of
i*ears with Enyart, Van Camp &
Co., Inc.
,.
'
,
i
Akin-Lambert Co. Adds
(Special
LOS
to
The
Financial
ANGELES,
Stanley C. Northrup
added to
MR. PAUL A. LUDLAM
"is
a
purvey.
/ While
recognition of the
in
Us
a
our
...
com¬
pany's need for higher rates is
helpful, the management is ham¬
pered in its planning by the time
limits on the increases,, and not
knowing when the results of the
study will be. All this comes at a
time when the company is experi¬
encing
associated with
now
trading department
Tweedy, Browne & Reilly
;
52 Wall Street, New York 5, N. Y.
,
Telephone HAnover 2-4694
N
../ Teletype NY 1-2529
huge increase in demand
Since
no
perma¬
is possible until'
the rate study is completed, the
company has had to incur heavy
bank loans for expansion, and has
suspended dividends on its com¬
mon stock—at a time when, it is
doing -the greatest volume of busi¬
in its history.
'■
;/
v
,
Do you
y "
;
•
•
' "■-/-:
-
wish to Sell
merge your
'
'
■
or
business?
,.
/ [
Brooklyn Union is not alone in
predicament. Occasioned
largely by a jurisdictional battle
this
the reorganization of the
Long Island Lighting System has
Chronicle)
CALIF.—
has been
the staff of Akin-Lam-
bert Co., 639 South Spring Street.
INnumber of to our own interest, we well as
addition clients, corporations as have a
individuals, who
SEC,
All
its
We
process
finance its debt or to finance
and
inquiries
will
be
are
basis.
this
In
case,
too,
interested in the outright
without obligation
accorded
also invite
out
on your
/
part
strictest confidence.
inquiries from other principals
considerable expansion on a per¬
manent;
are
purchase of sound businesses for cash.
for more than
three years. Because of this, the
company has been unable to."re¬
in
interested in the
purchase |of
desirable businesses/
large borrowings from banks have
Purchases
The writer
is
a
Uni¬
engineer,
versity*
He has been engaged in
engineering
bus'ness
for
and
Cornell
the
many
involving $500,000 to $5,000,000 pref erred
graduate me¬
chanical
/
/ip/li
temporary basis, pending the
results of the Commission's ;rate
on
been
«
forthcoming."
,
-
..
several
thorizations while minute details
have been examined have cost the
ju¬
between the Commission and the
legislation,
it does not follow that the money
f While
In
financing only on the basis
year's anticipated expendi¬
tures, then operations must ob¬
viously be on a hand-to-mouth,
of one
/
—//.//
authorization
ing
its
risdiction/
ness
.
legislation; authoriz¬
expenditure of specific
specific projects./ But it
•
•
be
;■>/ Congress is frequently passing
earned.
companies
between the so-called internation-. for its services.
nent financing
alist and isolationist
too
,
i)f
term
sequently, no dividends have been
paid On the company's preferred
stocks', although they have been
fo war d the
earning power
and he would not have
now
Philadelphia, he is not likely to
,
York
e w /
public Service
Commission
as
controversy in the party
lation through the Senate.
narily, that would .constitute his
jOb. •
•
' ;
,
'
N
conclusion may be drawn that the
Commission will approve long-
plete utilization of earnings. Con¬
as
.Relations.
Committee
he
piloted the Marshall Plan legis¬
Ordi¬
been necessary, as well as com¬
ttitudp of the
In its decision, the Court pointed
crease," to
compensate for in-'
out that it had already annulled
creased operating costs. The Com¬ eral applications and registrations,
the determination of the Commispossible,- to go along when their
mission thereupon instituted an and to be averse to gambling on
backs were up against the wail of
(Continued on page 38)
Exhaustive study of the company's changes in interest rates. If the
agitation and propaganda,
and
entire rate structure.
appropriate for this and that, in
/ This study is still in process.
the
expectation that after next
Meanwhile. Brooklyn Union has
January they would grab most of
We take pleasure In announcing that
had to revise its original request
the money back.
But Taber has
upward, and to seek two addi¬
precipitated the global spending
tional rate increases.
These in¬
disposition has been to avoid
past in switching back and forth
Vandenberg
designed
a
plasuste-
,
What
ing
political
>/v^v//;/.
Regardless of how it
for
in going before the
Senate committee is to highlight
/
the
spenders that pur global thinkers
have become, they cannot possibly
get rid of $6 billion in the 12month period prescribed;
Mani¬
before
■
^
/ Senator Taft believes that not¬
he has pursued of not per¬
mitting his name to be placed
egy
,
(imdet
r
personal'
.A short time ago the public utility analyst for a large investment trust remarked that
no securities of New York State
utilities, and that under existing circum¬
stances he Would hot recommend
any. He said he was forced into this decision by what
(
the trust held
*
/ y...-... ,
he termed the
rivers and harbors projects /destructive"
well^———-—>'
very
7
utility r earnings • and. cites
Chairman John Taber of the House Appropriations Committee over
.
(2527)
equity, capital in New York utilities. Says Commission refuses to take long-term view of need for higher
Cases in which Commissioit enforces stubborn adherence to its mandates.
Reveals other State Public Service Commissions follow more liberal
policies.
i.
the latter'? cut in Marshall Plan funds will point up a serious divi¬
sion -in the Republican ranks on the eve of their convention.
It may
.
FINANCIAL CHRONICLE
.//_
By CURTIS ter KUILE*
'
Writer contends "hard-boiled" regulation
by New York Public Service Commission is discouraging"
By CARLISLE BARGERON
The
&
investment
years;
is
BONNER & BONNER, in*.
investment Securities
a
member of the Cornell Engineer¬
ing Society and the New York So¬
ciety of Security Analysts.
120 BROADWAY, New York 5
REctor 2-8500
8
The Oil
& FINANCIAL CHRONICLE
COMMERCIAL
THE
(2528)
Industry: Yesterday, Today and Tomwiow
Dealer-Broker Investment
By GUSTAV EGLOFF*
Universal Oil
111.
Products Company, Chicago,
Recommendations and Literature
rapidly expanding oil consumption and describes U. S. oil producing and refining
capacity. Notes increased use of by-products and petrochemicals as well as synthetic fuel oils, and con¬
tends high subsidies would be necessary if synthetic products are to be put on the competitive market
Contends, as an investment, "there is no better buy on market today than oil company stocks/'
Dr. Egloff traces
It is understood that the firms mentioned will be pleased
to send interested
parties the following literature:
<S>
in
one
every
form having an area of over 40,000 square feet.
the shore is also
expansion in the next
One company alone has
announced expenditures of a bil¬
lion dollars in 1948 and 1949.
Petroleum
assumed
the hew loads
imposed by
our
rapidly
increasing
power
present time
the
of
barrels
million
The
5.5
oil
being
and has been,
displacing'
o u r
primary
en¬
ergy source.
In the past 30
years coal has
been a static
Dr, Gustav
Egloff
industry,
petroleum production has
increased nearly six times. Coal
output in 1918 amounted to 636,000,000 tons and about the same
this year. Petroleum production,
however, increased from 356,000,000 barrels in 1918, to 2 billion
in 1948. Thirty years ago coal fur¬
while
of
82%
nished
energy
our
re¬
quirements, and oil only 15. Now
coal furnishes 49% and petroleum
and natural gas-47. The use of
liquid and: gaseous fuels in place
of coal has become popular be¬
cause of convenience in handling,
ease of control, and cleanliness.
Oil
the
industry, 35 billion barrels of
produced, and still
proven- reserves are higher
than they have ever been. The oil
thus far produced would not fill
a hole in the ground of two cubic
miles, an insignificant portion of
our
lon
U.
S;
re¬
of today are over 25 bil¬
for
added to
dicted,
but actually the demand
over 20%. Prewar there
increased
34,100,000 motor vehicles in
the United States, while in 1948
these have increased to over 38,000,000, despite restrictions and
difficulties
in
production.
Not
only has the number of automo¬
were
tive
vehicles
increased
but they
being driven longer distances
are therefore consuming in¬
creased volumes of gasoline and
lubricating oil. Commercial avia¬
tion is also showing marked in¬
creases.
Prewar,
our
domestic
airlines had 359 planes, with an
average of 17 seats per plane. In
1947 they had 810 with accom¬
are
and
modations
for
30
pasengers
per
be
recovered
with
of
certainly be derived from exten¬
sions of present known fields or at
greater depths, nor do they con¬
sider new potential oil fields. The
reserves
are
un¬
doubtedly much greater than the
Petroleum geologists be¬
proven.
lieve
that
in
states
there
miles
of
continental
are
land
United
1,500,000 square
area
favorable
oil
7,000
square
one-half of 1%
about
is
creased from
to
356,000,000 in 1947. Other de¬
mand
trends
are:
increased
mand for kerosene
and
de¬
distillate
fuels instead of coal for heatirig,
increased use of Diesel engines in
busses,
trucks,
and
locomotives,
and increasing demand? for na¬
tional defense.
gines and household heating units
presents problems which are being
met
by
changes
in
refining
methods
as
well
as
increased oil
output. Between 1941 and 1947
OH burning home heating units
increased from 2,400,000 to 3,600,000.;'..
•• ,\.x
Despite
continuing high de¬
mands
the
petroleum
industry
faces the future with confidence,
(liven, the proper economic and
political atmosphere, the industry
will
meet
all
demands
as
it
al¬
ways has. The
industry is finding
producing more oil, providing
pipe lines, tankers and tank cars
ana
for
transportation,
enlarging
its
refineries, and expanding its mar¬
keting facilities as rapidly as steel
be obtained for construction.
The U. S. oil companies are
spend¬
can
ing $4 billion at home
in
producing.
and abroad
1948, and $13 billion is marked
'
*
Address by Dr. Egloff at 57th
Convention of Illinois Bankers
with
waves.
One well in the
Gulf, 10 miles from New Orleans
is yielding 900 barrels of oil a
day
from
depth of 1,700 feet, and
indicates a reserve of 100,000,000
barrels of oil in this area. Another
a
well drilled five miles from land
is down to 13,000 feet, and a well
30 miles out has encountered salt
domes similar to those associated
with producing wells on the main¬
land.
It is believed that there are at
least 2.5 billion barrels of oil un
der the
Cornia.
ocean
The
off Southern Cali-
continental
shelf
at
this point is 100 to 600 feet under
water but production engineers
Association, Chicago, 111., June 4,
1948.
in the
are
operations
Gulf, which is
a
steel plat¬
Co.—Memorandum
Metal
G. Becker & Co., 120 South
La Salle Street, Chicago 3* 111.
Current
Steel
Acme
Forming
bulletin
Corporation
—
First
Colony;;
Corporation, 52 Wall Street, Newt
York-5, N. Y.
—
methods
will
add
of barrels to our
—
New York 5, N.
Also
Y77'7x7
available
is
a
leaflet
Salle Street, Chicago 4* IlL
V
of
7-7
current Railroad
Pacific American Investors, Inc.
refining
a
::7:!77.7
Refining
7 ••
our
1 Wall
crude petro¬
are now
369 refineries
Foods, Inc.—Cohu
Paraffine Companies, Inc.—An
Co., investment study—Dean Witter &
&
Street, New York 5, N. Y. Co., 45 Montgomery
Francisco 4, Calif.
Street,
Also available is a circular on
Studebaker.. ■..77;/. 7 ■: 7
San
77' '7y7
daily Capacity of 6,000,000
Parker Appliance Company —
Bloomington Limestone Corp.— circular — du Pont, Homsey Co.,
to the stills of Description—George Birkins Co., 31 Milk Street, Boston 9, Mass.
which are pro¬ 40 Exchange Place, New York 5,
ducing 2,400,000 barrels of gaso¬ N. Y.
/ Portsmouth Steel Corp.—Data—
About 5,500,000 barrels a
are charged
these refineries,
line
as
well
household
been stupendous since plat¬
forms
for
supporting
drilling
wind and
amounts
day
nave
equipment must be on piles ex¬
tending 30 feet above mean sea
level; to avoid the battering of
enormous
in
barrels.
area
nevertheless planning drilling
on man made islands.
These will be similar to one built
'
For
coastal waters,
hurricane
are
leum there
of Mexico 30 miles off the Coast
of Louisiana. The engineering dif¬
this
,
.,,
Best
geologically have all the
markings of oil producing fields.
Drilling is under way in the Gulf
in
,
world wide service.
using
science, is
going on in the United States. The
lreas being explored include not
only land, but also the continental
ficulties
,
■. v'V-.
-7:,
Developments.
produced is being trans¬
—Analysis—Kitchen & Murpftyv
a
network of 360,000
Bank of Manhattan Company— 135 South La Salle Street, Chi¬
miles of pipe lines, 170,000 tank Circular—Laird, Bissell & Meeds.
cago 3, 111.
cars, and nearly 2,000 tankers in
120 Broadway, New York 5, N. Y.
which
Supplying fuels for the rapidly
increasing numbers of Diesel en¬
—
The oil
ported
exploration,
our
—
■
billions
supply.
all the tools of modern
shelves under
Plant
-
-
manv
.
Widespread
Calif.
qil
"secondary"
The possibilities of future oil dis¬
coveries are enormous.
;
>
•
133,000,000 in 1941,
continental
the
hold from 40 to 80% of the
J. p. Adams Manufacturing Co.
Data
originally present. By represIndianapolis Bond &
Ohio-Apex, Inc. — Circular —
suring oil formations with water Share Corp., 129 East Market Doolittle & Co.,; Liberty Bank
or gas, more oil is produced. Oil
Street, Indianapolis 6, Ind. ^^
Building, Buffalo 9, N. Y,
wells are frequently treated with
acids to increase production. The
Oil
Alleghany Corporation — Study
Exploration Co. — Data -—
amount of oil recoverable by these
•Vilas & Hickey, 49 Wall Street, Comstock & Co., 231 South La
of the po¬
tential
are
&
Blosser, 135 South La Salle Street,
Chicago 3, 111.
still
coming from about
miles. Thus only
fields
Publica¬
Straus
our
oil
to
plane. The miles flown have in¬
oil
to
genous pressure has declined; The
sands and shales in su'ch fields
the underground existence of oil.
The entire current production of
crude
the
still left in fields where
normal
production under indi¬
into account oil which will
undiscovered
—
ness
that
barrels of oil
under
There
present
production methods. They do not
take
are doing—Busi¬
Development
Department,
Long Island Lighting Co., Mineola,
N. Y. "...-7 ■
Memorandum
—
our reserves.
These figures all refer to proven
oil reserves, meaning those which
can
of and what they
—
.
last year over
barrels of crude oil
At war's end
mand
size
.
certain
..
and
barrels,
\
Consolidated
Hearst*
.
tions
Kingsburg Cotton Oil Company:
Card Memorandum
Locations—Map of area
Bennett,;
served! in
Indiana, ■ Kentucky* Spanier & Co., 105 South La Salle
Michigan, New Jersey, Ohio, Ten¬ Street, Chicago 3, 111.
y
;
nessee, Virginia and West Virginia
Lone Star Steel Co^Analysfs
showing; power lines of the com¬
Austin & Waggener, *
pany and principal natural re¬ —Walker,
rights for prospecting; Control of sources—American Gas and Elec¬ Republic Bank Building, Dallas 1,)
oil lands by the Federal Govern¬ tric Co. System, 30 Church Street, Texas.
; '"-.f-V• 7'"77/.;7x:?
ment has always slowed up de¬ New York 8,; N. Y.
-7::' -7: 7;
velopment. If ; they are in the
Los
Angeles
Department
off
hands of private companies, ex¬
Three Ways to Make Money In Water; and
Power—Bulletin onploration' and production would Wall Street—Discussion of Scien¬ current developments-in the met-;
be accelerated.
tific measurement of mass finan¬ ropolitan water district of South¬
;
*7.
v
Deeper drilling in proven areas cial opinion—W. E; Burnet & Co., ern California—Heller, Bruce &
will also add to our reserves. >The 11 Wall Street, New York 5, N. Y. Co., Mills
Tower, San Francisco'4,
,v. x' • v.;:; * >
•
('. „■
' CfcUf7-'77r777:7777average well depth for 1948 is
around 3,600 feet, hut there is one
Abitibi Power and Paper Co.,
producer at 16,500, and many Ltd.—Data
Oppenheimer, VanMaryland Casualty Co.—Analyt¬
wells with important production den Broeck & Co., 40 Exchange ical report—Geyer & Co., Inc.,
deeper than 12,000.
67 Wall Street, New York 5, N. Y7
Place, New York 5, N. Y.
by increased
The
about the
are
shelves,, which .was previously
owned by. the States; The House
of Representatives, however,-has
voted nearly ten to one to nullify
the Supreme Court's decision and
return title to the States, many
of whom
had already granted
oil have been
earth's crust.
oil
the
production and improved refining
Since the founding of
serves as
Long Island Laboratories—Bro¬
chure describing various scienti¬
fic laboratories on Long Island
ad¬
area
Keyes 'Fibre 7- Description—A.
G, Woglom & Co., Inc., 49 Federal
Street, Boston 10, Mass.
Oil Company Reserves and Pro¬
reserves. The Supreme Court re¬
.Also
available
is
descriptive
cently rendered a decision giving duction—Study—Elworthy & Co., material on West Point Manufac¬
the Federal Government rights to Ill Sutter Street, San Francisco, turing Co. and Moxie.
men
billion
100
methods.
ohe
shelf
continental shelves will add over
time the howl has been raised it
has been answered
were
a 20% drop in de¬
oil products was pre¬
the
About every five years in the
history
of
the
industry,
dire
prophecies have been made about
an
impending shortage.
Every
700,000,000
Petroleum Demand
in
During
States.
continental
square miles,
Kentucky.
this year
total production will be about 2
billion barrels. With this enor¬
mous output the question may be
asked—how long can it be main¬
tained without depleting our re¬
serves?
7';
daily
produced
an
jacent to California is about 4,500
is
quirements
United
as
with its neck resting on the ocean
bed where drillers could work.
over
crude
well
as
Production and Reserves
At
re¬
coal as
Curb
Common
Stock
Issues
Corporate Investors LimitedTunneling under With LoUg Dividend Records— Data—S. R. Mackellar & Co., 27
Street, Toronto,
being considered, New York Curb Exchange, 88 Melinda
Ont,,
"inverted bottle" Trinity Place, New York 6, N. YV Canada.
for world
few years.
Nation.
has
1
Attractive Speculations—List of Crouter & Bodine, Packard Build¬
interesting
low-priced
stocks- ing, Philadelphia 2, Pa.
Also available is a circular on
Stanley Heller & Co., 30 Pine
American Optical Company.
Street, New York 5, N. Y.
beginning of the oil industry 90 years ago it has grown to colossal propor¬
tions. It is providing over 5,000 products which are as essential to our mode of life as food,
clothing, and shelter. The progress of the oil industry is a matter of primary concern to
Since the
our
Thursday, June 10, 1948
as
distillate fuels for
heating and Diesel
en¬
gines, residual fuel oils, lubri¬
cants, and special products. The
extreme flexibility of modern re¬
fineries permits the output of
various products to be adjusted to
seasonal and> other varying de¬
mands.
'-7,\ /. ■■'.'7."!
Oil refinery research and. -der
velopment are art a high tempo to
utilize maximum quantities of oil
Bullock's
and refine it with
loss. The industry is
current
scientific
.
a
Buckley
Securities Corp., 1420
Hill Walnut Street, Philadelphia 2, Pa.
•<''
,
minimum of
or
technical advance to improve its
methods. Refiners are not wasting
a drop of oil, even, some
of the
smell being -used to odorize city
'gases. '■ 7v\;. .-v;. .y
One of the amazing develop¬
ments in oil refining is the Fluid
flow catalytic
cracking process
which uses powdered catalyst. In
this process the catalyst is carried
along by the vapors of the gas oil
on page
36)
Illinois
Public
Service
Co*
'Central Arizona Light & Power
:'7r*-:
Co.
Electric
CoT-Analysis—Eastman, Dillon &
Co.; 15 Broad Street, New York ;5, ? Public National Bank' & Trust..
N7Y/7\'--^<77^7 77
;7:, Co.-~-Analysis-~C. E. Unterberg &
Also available. are< analyses lot Co* 61 Broadway, New York 0,♦
the Grand Union* Co.,and Rock¬ Jj.
77* "7
y
^
well Manufacturing Co.
;
Also available is an analysis Off *
:'y;''■■■.
Miles Shoes, Inc.
Champion Paper & Fibre Company^Memorandum-^Sutro .Bros;
&
Servel,
-
Inc. —Memorandum
—
Bendix, Luitweiler & Co., 52 Wall
77x7.' Street, New York 5, N. Y.
Co., 120 Broadway* New York
5, N. Y.
Clearing
•
•
7
.,77"
Machine
letin—Strauss
•
Corp.—Bul¬
Bros.,
Inc.,
bulletin.
Co., 135,
South La Salle Street, Chicago 3,
Skilsaw, Inc.—Revised
O'Connor
32 —Doyle,
Broadway, New York 4, N. Y.
&
Illinois.
:
■
Consolidated Rock Products Co.
—
Memoranum
shall
—
Maxwell,
Mar¬
&
Co., 647 South Spring
to be cracked and is maintained in Street, Los Angeles 14, Calif.
Also available is a card memo¬
a, state of high turbulence in the
reaction chamber. The catalyst randum on Clary Multiplier Corp.
becomes coated with carbon, over¬
flows from the cracking zone and
Continental Diamond Fibre Co.
(Continued
Also available are data on Cen¬
tral
Seminole Oil & Gas, and El Paso
utilizing every
discovery
—
,
.
,
Inc.—Analysis
Richards & Co., 021 South Spring
Street, Los Angeles 14, Calif.
-Data—DeHaven
&
Townsend,
South Carolina Electric and Gas
Co.—Memorandum in "Fortnight¬
ly Investment Letter"-—H. Hentz
& Co., 60 Beaver Street, New
York 4, N. Y;V/7>;.. , - J
In the
Trend
same
in
issue
Bond
(Continued
are
briefs
Prices,
on page
on
Illinois
10)
l
Volume 167
Number 4706
THE COMMERCIAL & FINANCIAL CHRONICLE
»*'rT
i
7'.-
(2529)
between 60 and 70%;
9
Of the creased availability the immediate
11 < years, .three were result;-'.*^.
•;
the 50's, and the average for
Passage by Congress of the Eco¬
the other eight was 36.1%.
By DAVID F. AUSTIN*
nomic Cooperation Act of 1948,
Further, these critics disregard together with President Truiriaii's
Vice-President, United States Steel Corporation
the normal relationship between message to Congress on March 17
domestic supply and demand in requesting additional funds' for
Asserting free competitive enterprise is seriously threatened, prominent steel executive defends steel
terms of per capita trends based defense, reversed this trend. The
industry's accomplishments and notes its rapid expansion in recent years. Decries demands for fanon the same period, After making problem which the
Industry faces
tastic capacity increase, and points to cooperation with government in voluntary allocation program.
a proper Allowance for export or;
today' is no longer confined to
Sees nn necessity for resort to government controls and outlines industry's program of voluntary co¬
ah historical basis, a projection domestic and normal export re-:
of the normal trend of per capita
quirements — it- has become', far
operation to regulate production, distribution and prices.
consumption for 1948 indicates a more complicated. We have tem¬
If the progress of our nation can be attributed to any single factor, that factor Is free¬ consumption of 565 pounds per
porarily become the steel source
dom: freedom of the individual, freedom of worship, freedom of government and freedom person.
This
figure,
although for
the
whole
peace - seeking
is world, just as during the war the
mathematically c o r r e c t,
of enterprise.
Free men have learned that wars of aggression are unprofitable, and that
weighted by the low volume of United States became the arsenal
human
enerConsumption during the depres¬ of the Allies.
!
Steel bidustry's Achievements
time. production in the history; of
gies are more
sion years and excludes wartime
.No further proof of the. inter¬
our nation.
prod uc tive
Much has been heard concern¬
influences.
Against
it set
the national aspect ^ of our problem is
when devoted
ing the need for further increases
figure of 846 pounds, the per cap¬ needed than the simple fact that
Dangers of Over Capacity
to the creation
in
capacity, but far too little
ita
productive capacity of, the in 1937 the United States ac¬
Qur critics today demand al¬
and exchange
credit has been given to the Steel
Steel Industry today.
counted for 38% of world produc¬
:
most fantastic, increases in
of
useful
capa¬
industry for its truly remarkable
tion of steely while in 1947 we
city. It. is one of life's grim iron-/
gooas
and
Normal Trend of Steel
production achievements. At war's ies
produced more than 56%. Experi¬
that we find among them those
services.
Production
end, the Steel Industry found it¬
enced analysts have placed this
who, nine years ago, were equally
Four
years
self with plant and
equipment
Restated, based on the last 48 percentage as high as 59% by dis¬
articulate in criticizing what they
of global con¬
battered and worn by operation
years, the normal trend kne of counting R u s s i a's questionable
termed. the over-built condition
flict—in wnich
at forced draft for six long years;
steel consumption' has risen at an claims. >
7 of the Steel Industry at that time,
we took upon
a battering hardly less destructive
average annual rate of 5.4 pounds
This increase has resulted large¬
If our objective is to
our
shoulders
support per person, while the capacity tc ly from curtailed production, in
than if it had been caused by an
full employment at high wages,
the major eco¬
produce steel has increased at an foreign countries
enemy barrage. Yet without com-*
and only r in.
with production at the highest
nomic burden
annual rate of 8.2 pounds per per¬ smaller part from an increase of
plaint, the Industry accepted the
level in the nation's history, then
of
history's
dual task of rehabilitation and of
son, If we base our reasoning on
15% in our capacity since 1939.
we are nearing the attainment ol
costliest warthis premise alone, it would ap¬
continued capacity operation.
David F. Austin
Germany, with a prewar produc¬
that goal. If, inversely, our ob¬
made
neces¬
pear that the Steel Industry has tion of 25 million tons, produced
In the light of the foregoing,
jective is to create a price struc¬ available today more
sary the temporary sacrifice of an
capacity but four million tons in 1947—
average operating rate of 70%
ture for steel products far beyond than is
certain freedoms in order to as¬
required. But since there 16% of her prewar total. Japan,
during the past two years would the
sure
average citizen's ability to
continuing, all - embracing have constituted a creditable per¬
is considerable evidence to war¬ with a prewar production of eight
freedom. This temporary sacrifice
pay, vast unemployment and ulr. rant- an opposite conclusion, it million
formance. To have performed <at
tons, had dropped by 1947
timate
we made with good cheer during
lowering of our living beconies readily" apparent that we from fifth
the actual) rate of 92% during
place to fourteenth
the war. x
standards, the construction of; a must search further and examine
r>7;7•
"'.7 v,;v■. that period which was free front
place among; the steel producing
^
greatly increased' capacity at toT the abnormalities in the present nations of the world.
The distorted economy of the
strikes, warrants the term *'miIn
unpredictable postwar era; how¬ raculous performance" and the day's costs is the most certain way situation. •;>:; ,7;(
contrast, England, with a
•'
to bring about such a result.
ever, has led some men to believe public's highest praise of man¬
Today, any discussion of the re¬ prewar production of 14,500,000
Those of short ^memory fail to
that a too-quick return to eco¬
lationship of supply and demand tons, achieved during 1947 a total
agement and labor alike.
was
Steel
Supply
vs.
Demand—A Continning Uiuggle
.
remaining
in
,
,
,
^
,
<
,
;
.
"
.
nomic freedom is dangerous. They
believe that our ultimate' supplydemand adjustments can
be fully
attained only under some yet-tobe designed system of controlled
Production records in industries
such
as
the automotive, home ap¬
pliances,
cans
and
implements, and
farm
tribute
are
a
But
economy.
they
to
containers
many
others
those industries
take
into
consideration- the
his¬
toric
which fails
lem in the light of the interna¬
tional situation ignores important
sion that greatly
factors
increased
capac¬
ity is warranted at this time. They
ignore the fact that there was not
a single peacetime year from 190C
to 1939 during which the Industry
was
called upon to operate as
still greater tribute
to that industry which—in spite
view.
of worn tools; in spite of shortages
But my concept of what should o£ manpower, scrap, coal and pig
high as; 90% of capacity. There
be done is not the unanimous con¬ iron; in spite of work stoppages,
were but seven
years, |n which
cept of all American citizens. It slowdowns, and a host of other the
production rate exceeded 80 %
I
&
take 'issue
are a
with this point of
is for this reason that I claim that
retardants—turned
the
steel
system of free, competitive
enterprise, as we understand it,
the
out
basic
unprecedented
employment and the largest peace¬
to
support
tq examine the prob¬
pattern of the demand for
steel when they reach a, conclu¬
nine in which the rate was in the
70's; and ten
more
when the rate
and
erroneous
inevitably
conclusions.
leads
15,000,000 tons.
over
If
tc
!
,
output of 14,200,000, and is now
producing at an annual rate; of
t
abroad
nations
devastated
to be rebuilt
are
on
sound eco¬
a
nomic basis, ^without continuing
practically all students ol subsidy from this country's aresupply and demand forecast a sources, then inevitably the Steel
slackening Remand for many steel Industry must make a major con¬
tribution during each of the next
products during the final quarter.
several years. There is no option!
Indeed, in late February, there
On December 30, 1947, the Con¬
appeared unmistakable signs that
the demand for many consumer gress enacted Public Law No,' 395.
Within the Industry, earlier this
year,.
items
was
diminishing^ with in¬
(Continued
on page
38)
today seriously challenged, j
is
Tempo of World
Affairs
Today, as we look into the fu¬
ture, we find thq tempo of world
affairs at a crescendo unparalleled
our peacetime history.
Unless
prudently handled, the impact of
coming events may well produce
chaos. So that we all better under¬
stand and fully appreciate the
This is not
writers
an
Offering Circular. The Offer of these Bonds is made only by
only in States in which such underwriters
are
qualified to act
as
of the Offering Circular which may be obtainedfrom any of the several under¬
dealers in securities and in which such Offering Circular may legally be distributed.
means
in
NEW ISSUE
June 9,1948
challenge, I should
review for you the
which the Steel Industry
scope of this
like to briefly
$14,000,000
progress
has made since war's end.
Hardly had the tumult of vic¬
tory died away before the Steel
Industry
deleting
The Kansas
about the task of
from its mill schedules
items
those' wartime
no
First
longer
required, substituting those prod¬
ucts best suited to speed the na¬
tion's return to a peacetime econr
omy.
;
;
.....
~
Within
month, peacetime pro¬
duction matched wartime's stride
,
Mortgage Twenty Year V/%% Bonds, Series B
Dated June 1, 1948
'
The issue and sale of these Bonds
,
;
a
Due June 1; 1968
•
a
shipments for the
years 1946 and 1947 exceeded the
total shipments of any like period
in the Industry's peacetime his¬
tory. Discounting work stoppages
in plants and mines, these two
years constitute the longest peace¬
time period since the turn of the
century during which the Industry
operated in excess of 90% of ca¬
pacity. Had there been no work
stoppages, or raw material shortages, this same period would have
yielded an additional 20 million
As
>
City Southern Railway Company
set
result,
'" by the
7
are
subject
to
authorization
7
:
Interstate Commerce Commission.
Price 100.35% and accrued interest
tons of finished steel products, an
impressive total
one-third of
a
equaling almost
full year's produc¬
tion, at capacity operation! Had
this tonnage been added to. actual
production, it might well have
brought supply and demand into
balance—if not in all products,
certainly in many.
—
;
The First Boston Corporation
i
Dick & Merle-Smith
Goldman, Sachs & Co.
Laurence M. Marks & Co.'
*An address
by Mr. Austin be¬
fore the General Meeting of the
Iron and Steel Institute, New York
City, May 27, 1948.
Stroud & Company
Incorporated
Kidder, Peabody & Co.
.
..
.
V
V
_
F. S. Moseley & Co.
Central Republic Company
'
.■
(Incdrporated)
Riter & Co.
.
.
10
COMMERCIAL
THE
(2530)
&
FINANCIAL
CHRONICLE
Thursday, June 10, 1943
t
compared with $970,764,
officers and
$2.15 per common "share, for the
employees entitled to participate year ended March 31, 1947. Cur¬
Illinois Brevities
headed by Halsey, Stuart & Co. Inc
$60,000,000 Illinois Bell Telephone Co. first
mortgage 3% bonds, series B, due June 1, 1978, at 102.75 and interest,
the net proceeds to be used towards repayment of advances by
American Telephone & Telegraph?;
William Blair & Co., H. M. BylCo., parent, which amounted to
$99,400,000
on
May 31,
1948. lesby & Co. (Inc.), Cruttenden &
Other Illinois investment bankers Co., Paul H. Davis & Co., Dempwho participated in this offering sey & Co., Carter H. Harrison &
Co., Mason, Moran & Co., Mc~
were Ames, Emerich & Co., Inc
An underwriting syndicate
Oil
Common Stock
A detailed
and
rata
is
^
<
position in Oil
invite
inquiries.
book
$45.97
will
ceeds
be added
'
On June
Co. Inc.,
award
or before; July 1,
share, and
proceeds from the
to
%
1
icates,
the
$356,000
share
maturing
semi-annually
Dec. 1, 1948 to June 1,1958, inelusive.
immediately reoffered at prices
to yield from 1.25% to 2.35%,
Telephone Co.
The Illinois Bell
,
is
engaged in the largest construc¬
tion program in its history.
The
certificates
#
the
on
share
,
the
on
to
the
with
or
of
number
A
banking syndicate
headed
tion, New York, N. V., and
additional shares of
Harris, Hall & Co. (Inc.), and
common stock at $13.50 per share
including, among others, A. C.
on or before May 24 was under¬
Allyn & Co., Inc., Central Re¬
written by a group of 46 invest¬
ment
firms,
which
included, public Co. (Inc.), Julien Col¬
lins & Co. and The Illinois Co.,
among others, Central Republic
on May 12 publicly offered 800,Co. (Inc.), Bacon, Whipple & Co.
Dearborn 1501
Central Public
Utility
interest.
and
;
Illinois
The
Co.
Corp.
participated, together with five
other underwriters, in this of¬
1
Chicago, North Shore 8c
*
Co.
Common Stock
■.
•.
'
■
4
••
'• -V\
*•:
-v'-,''>;"•••
•
tf
tf
V
announces
Telephone
that at the close of
208,S. La Salle Street
CHICAGO 4
CG 95
—
Nu Enamel Corp.
Common
"
Nu Enamel Oil
v
:
;
-i*.
..
•
•
>•
•••;
_
Included
Corp.
Dairy
William A. F uller & Co.
Members of Chicago Stock Exchange
209 S. La Salle Street • Chicago 4
Tele. CG 146
Serving Investment Dealers
specialize
exclusively in' under¬
writing and distribution of securities,
providing investment^ dealers with at¬
tractive issues for their clients.
taining
own,
no
retail
department
compete
we
dealers,
but
in
serve
no
them
Correspondence invited.
Main¬
of
way
y Y'
who
the
on
group
Boston
27
currently offering 150,000 shares
of its class A common stock (par
$30
million
National
Products Corp. 3% de¬
$1) to its employees, executives
management personnel at
our
with
exclusively.
and
$3.49
G. Becker
inson
&
Sills,
stock,
Co.;
Edison
Co.
at
$26.25
dividends.
and
*
,
*
..
F.
Hall
&
serve
three years.
cellor
Dougall
Paidar,
Goodbody
elected
serve
solidated
net
The
earnings,
after
Nominating
Emmet G.
nett &
M.£ Payne,
Barker, James E. Ben-'
Co.; Lyman Barr, PauML
&
Co.; William
Whipple
Chapman,
Farwell,
T.
Bacon,
Co.;
&
Ralph
Chapman
■
a
decline
in
current
net
in¬
assets
at
March
Dealer-Broker
1 Recommendations
the
Junior
Kansas
new
Net operating revenue of Es¬
quire, Inc. (Chicago) and its sub¬
subscriptions,
tising,
newsstand
sales, commercial calendar, Coro¬
of the
common
stock
City
mortgage issue.
Southern
r
syndicate
headed by Lehman
Brothers and Blyth & Co.. Inc.,
publicly offered 680,000 shares
of $5 par value common stock of
$13,745,072
Buy-Products —* was
ended March 31,1948,
Halliburton Oil Well Cementing
which is within 1V2% of the pre¬
vious year's revenue, the highest
share.
for the year
repay
.
Street, Newark 2, N. J.
Standard
On May 12, an'underwriting
^
.
" j
share.
per
Films and Esky
net Instructional
*
-
*
*
Y ;\'■
in
the
company's history. V Net
Link-Belt Co., Chicago, is of¬ profits, after Federal taxes, were
fering 11,845 shares of its com- $342,388, or 76 cents per common
■
.
■
Co. of Duncan, Okla., at $25 per
The
Oil
of
New
Jersey—
Analysis and outlook—Ira Haupt
■A:
Co., Ill Broadway, New York 6,
N. Y.
'
,
Transcontinental & Western Air,
—
Analysis and summary —
John H. Lewis & Co., 63 Wall
Inc.
Chicago
bankers
in this offering
A. C. Allyn & Co., Inc.,
Bacon, Whipple & Co., A. G.
Street, New York 5, N. Y.
Becker & Co., Inc., Central Re¬
ysis—Crowell, Weedon & Co., 650
South Spring Street, Los Angelesi
Altorfer Brothers Company
•
"«
y
Illinois
&
Kebbon,
ser.
The net proceeds will go to
!
selling stockholders.
(Continued
on
page
Southern
14, Calif,
Co.,; The
McCor¬
.
,
Oil
Co.—Anal¬
•
!
Wisconsin
,
Arcady Farms Milling Company
Booth Fisheries Corporation
'Capitol Records, Incorporated
y\ :y %
Colorado Milling & Elevator Company
1
Foote Brothers Gear & Machine Corporation
Bowser
Chapman
Co.,
Utah
mick & Co. and Straus & Blos-
\
vs.
Electric
BRITISH
Hart Carter Company
Mac Whyte Company
Common
SOUTH AFRICAN
Rath Packing Company
Detroit Harvester
Rockford Machine Tool Company
BONDS—SHARES
./V Snap-On Tools. Corporation
•
:
r
; Uarcp, Incorporated
United Printers & Publishers, Incorporated
Viking Pump Company.
.
MetalsDisintegrating
;
.
Bought
—
Sold
—
Quoted
•
•
..-*v
,
.Common
BOUGHT
—
SOLD
—
QUOTED
ZIPPIN
STRAUS & BLOSSER
New
York
Stock
Exchange
Membera Chicago Stock Exchange
Associate Member New
York Curb
185 South La SaUe St., Chicago 8, HL
Tel. ANDover 5700
Tele. CO 650-651
.
AC.AUSN«»CdMESNY
&
COMPANY
Specialists in Foreign Securities
208 S. La Salle St., Chicago 4, Illinois
Incorporated
Chicago
Telephone Randolph 4696
New York
Boston
Milwaukee
Minneapolis
Omaha
Co.
—Circular—Josephthal & Co., 120
Broadway, New York 5, N. Y.
46)
i
Wisconsin Power & Light Co;
v
1
.
Power
Gisholt Machine Company
Common
Central Paper
j
were:
Farwell,
INDUSTRIAL COMMON STOCKS
-
participating
Co. (Inc.), Julien' Col¬
lins & Co., Paul H. Davis & Co.,
.
Common
.:
Obligations, and
public
■:
-
Common
V
(Continued from page 8)
Central's
810 Broad
$16.47
was
..
Portsmouth Steel
&
$3.05 per common
the
previous
year.
Total
-
1949
Harry
or
substantially to a new all-time
high.
"However," the company
states, "because of increased op¬
erating costs and expenses, due
largely to
rising labor levels,
come."
!
^
elected
were
Chairman, Webster, Marsh & Co.;
year ended
states that con¬
Sales for the year again increased
was
year.1
following
Committee:
shares outstanding, compared with
there
J.
wfere
members of the Board to
one
charges and Federal income fyaxes, Davis
amounted to $2,703,836, or $2.70 Bacon,
per share 9h 1 million common
$3,047,084,
share,
for
Co.
Chi¬
Printing Co.,
1948,
31,
Leonard
&
v..
:
in its report for
March
Sills,
Messrs. Chan¬
and
members of the
!
,
H.
& Co., Inc., were
elected members of the
Board, to
share
per
William
Minton
book value
sidiaries from all sources—adver¬
bank
loans, which at May 26, 1948
amounted to $13 million.
Chicago
Membera
A*
Southeastern Public Service Co,"
—Circular—C. D. Robbins & Co.,
capital.
(Inc.), A.
Co., Inc., William
& Co., Kebbon, McCormick & Co., Ames, Emerich &
Co., Inc., Bacon, Whipple & Co.,.
Julien Collins & Co., The Illi- /
nois Co. and Mitchell, Hutchins
& Co. The net proceeds will be
used to pay for capital expendi¬
&
120 South La Salle Street
*
Baird,
Co.; John R. Burdick; Chapin
Newhard, Newhard, Cook &
Co. (St. Louis,
Missouri); Samp¬
son Rogers,
Jr., McMaster, Hutch¬
liabilities of $4,823,314, with; a re¬
sultant ratio of 2.93 to 1.
The
payable
Central Republic Co.
"■
n,
in
share,
per
G. Becker
to
cumulative
-
Blair
and
o
31, 1948 were $14,135,383,
against total current and accrued
ceeds will be added to working
tures
s
monthly instalments over a pe¬
riod of 10 years. The net pro¬
Halsey, Stuart &
Co. Inc.,
Harris, Hall & Co.
(Inc.), A. C. Allyn & Co., Inc.,
were:
FLOYD D. CERF CO.
,
Corpora¬
preference
offered 162,435 shares
Domestic Credit Corp. is also
r
reelected members
were
$25, of Southern California
par
W.
of
May
convertible
y'v-.
cago,
terest
We
:
e
(par $1) at $8 per share, for ac¬
bentures due 1970 at 102 and in¬
Tel. Dearborn 5G00
*
of Bareco Oil Co. common stock
loans amounted
among
underwriters
offered
Common
»
...
V '•*
$1,800,000 and that "it is the
count of Phillips Petroleum Co.
intention of the company to prey*
{f
* 'J'
pay the bank loans' by issuing se¬
i.JOn May 10, Domestic -. Credit
curities of a permanent character
at "a ' futurev date."
At Dec.; 31, Corp.,; Chicago, entered into hn
1947, there were also outstanding agreement for the private sale of
$5,750,000 of first mortgage bonds, $1,250,000 of its 4% sinking fund
series A, maturing
3%% series, due July 1, 1974. It is debentures,
planned
to
borrow
additional April 1, 1958, the net proceeds to
be used to replace an equivalent
amounts from banks pending the
amoiint of current bank borrow¬
permanent financing.
❖
%
ryyy'^y'y ings.
Brailsford & Co.
—TRADING MARKETS
First
'■■■■
1947 additional funds obtained by
short term bank
.'V
publicly
to
Tel. State 9868
The
000 shares of 4.56%
Kebbon, McCormick & Co.
and associates, including Ames,
Emerich
&
Co., on May 19
;:.;y
y
Commercial
Illinois
Milwaukee Railway
;
by
422,467
and Julien Collins & Co.
fering.
o
Paine,
Webber, : Jackson
S.
-
and Mullaney, Wells & Co. also
Income 5{4*^-l®52
& Curtis
Andrew M.
which pub¬
licly offered $19 million of first
mortgage bonds, series B, 3%,
due May 1, 1978, of The Narragansett Electric Co. at 102.39
Salle St.
Hargrave
&
CHICAGO 4, yJL,
Teletype CG 055
T h
P.
"'
,
common
Comstock & Co.
for
and Reuben
Homer
93 cents per
stockholders of National Gypsum
Co. of record May 10 to subscribe
banking syndicate
Hutch ins &
Co.; George F.
Noyes,; the
Illinois
Co.;
shares, for
the
year of the Board, to serve three years.
ended April 30, 1947. Current as¬ Mr. John J. Griffin was
reelected
sets at April 30, 1948 amounted to a member of the
Board, to serve
$11,232,024, while current liabil¬ one year.. y >.'■y':.; ;•.
Halsey, Stuart & Co. Inc. also
on June 3 headed an investment
231 So. La
Robert A.
now
compares
ities totaled $5,329,620.
offering
Exchange
held, June 7.
Gardne r,
M i t c hell,
shares
same
Annual
the
common
were
according to maturity.
The
the
■
common
outstandings This
a net of $1,419,226,
each
payment of advances from the
company then
out¬
«
the
Election of
ended April 30, 1948, after
charges and Federal income taxes,
was $2,420,931, equal to $2.55 per
Pacific
&
DD,
June 3
year
Chicago,
2% equipment trust certif¬
series
*
•
of
ernors
Net profit of Peabody Coal Co
and its subsidiaries for the fiscal
Halsey, Stuart &
Milwaukee, St. Paul
RR.
.v
the
Chicago Stock
Exchange at
share, which
per
of
Board of Gov¬
invest¬
on
Merrill
Chairman
General Motors Corp.
-,
won
reelected
was
were
of
list
of
Lynch, Pierce, Fehner & Beane,
offered for the account of
were
*
$7,120,000
the
share) at $12,75
pro¬
Working
and associates
of
in
Homer P.
-
partner ;
publicly offered 1,000,061 shares
of
North
American Aviation,
Inc. capital stock (par $1 per
*
sub¬
net
Julien Collins & Co.
ment bankers which
31, 1947 was
The
standing.
Approximate Market %Vi
and
included
of
American
your
Davis & Co., Bacon, Whipple &
shares
share.
per
value
CHICAGO, ILL.
Co., Central Republic Co. (Inc.)
31,1948. The
expires
The book value of
the
the shares as of Dec.
capital.
of such shares toward re¬
Glore, Forgan & Co., Paul II.
of Dec.
as
sell
April 1, 1949.
to apply the
Exploration. Company com-;
and
on
for
to
1948 at par, $100 per
sale
stock
shareholders
to
scription
to interested
Investment Bankers.
mon
offer
the
Hargrave Heads Cgo
Stock Exchange Board
Hargrave,
On all shares sold after
than
March
31, 1948
$4,460,027, asv against
$1,275,220.
amounted to
31, jl948 and prior to April 1,.
1949, the sale price will in no case
less
at
assets
current liabilities of
Dec.
be
shares of its common stock pro
ita River Oil Corporation,
We maintain a
Telephone
rent
Provisional
Compensation Plans of the com¬
pany or its subsidiaries. The in¬
itial
offering price is $46 per
share, which price is subject to
change by action of the board of
directors.
as
or
Additional
the
jCo., 99.31% owned by its parent,
also
intends to offer 389,995
Wich¬
its 'controlled affiliate
available
Bell
infor¬
mation of this company,
now
Illinois
The
descriptive bulle¬
tin, giving up to date
in
Mul- the shares
Co.,
laney, Wells & Co., Alfred O'Gara
&
Co., Patterson, Copeland &
Kendall, Inc., Robert Showers,
Welsh, Davis & Co. and 'F, S.
Yantis & Co., Inc.
Exploration Company
,
&
Hutchinson
Master
selected group of
a
June 3 publicly offered
on
share,
stock (without par value) to
mon
Teletype CG 451
f
Volume
167
Number 4706
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
ideas
1X1
>•:
■
i
\
......
(
i,
(
,
,
.
President of General Motors
r
i
•
lem
t
as
(a)
Leading auto concern executive lists as essentials for efficient production: (1) application of tecEnology; (2) cooperation of employees; and (2) uninterrupted flow of material and parts. Says indus^
;* try faces, among other things, lack of clarity in labor laws and lack of recognized criteria by which'
; fair wages can be determined. Explains General Motors Wage Agreement and says inflation is current
problem in
.
the
The first is the effective
It include
better
of
ployment.
prod¬
ages, this
It
cludes
This
is
ootn
tne
prosperity resulting from the
important,
aftermath of the
ma¬
with
loses
his hour of work will
nation's
increase
industrial
improves.
•
processes.
These proposals are
feel
that
only
employees
ployer lose.
And
the
as
.
the
what
is
/,
hour's work;
designee
these objec¬
them.
Strikes
shortages
;
pioyees and
on
retired persons living
incomes and pensions. ' :, ; •„ >
(
in
guarantee
...
,
the years.
are an
effective
of
steadily increasing
hourly buying power for GM em¬
ployees. .We make them with the
full knowledge that we are placing our faith in the future stability and progress of America; '
consumer
j What
nation's
-
(c)-holding out
higher liv¬
over
,These proposals
ceed if
more
gains of productive effi¬
That is how the standard
only
we propose can
we
suc¬
be assured of sta¬
can
ble and cooperative relations with,
ous
our
l
(10) The problems of bringing
supply ; into line with.. demand nomic demands have been re¬ over the years.
This trend has
through greater production.^ In fused,. no solution reached, and given American workers the high¬
have
to
be such conditions as exist today, work is continuing under a more est standard of
living enjoyed by
C. E; Wilson
done
to
destrikes are recognized. as • being or less temporary basis with labor workers
anywhere.. His hour ol
V1' u
^
v
;
liver finished inflationary as
they create addi¬ dissatisfied, or large and impor¬ work buys more things than an
products to the
tant strikes have been authorized
customer, begin¬ tional ' shortages^:'^^-'/.^.;
v
hour of work anywhere »else Jr.
ning with the raw materials.
and are now going on.
It is clear the world."v
v.V-;-.'
C;The second essential of efficient General Motors Wage Agreement that the men who represent in¬
j What must be questioned and
production is the cooperation of
The agreements recently con¬
dustry are risking much in their weighed quite carefully in the
employees.
Such
ny
to him of a
ing standard
out the
doing all the
things
that
prices;
assurance
During recent months in vari¬ ciency.
bargaining sessions through-^ of living of workers has beer
country either labor's eco¬ brought to new and higher levels,
,.t
fluctuations" in
(b)
against
consumer
prices have
rapidly than theii
hourly earnings. .It has: been the record of the
past that workers share in the
advanced
ana
*
Inflation Factors
,
the fact that
protecting that
standard
contention that GM workers have
been placed at a disadvantage' by
more
inflation.
more
em¬
real for¬
nomic position by (a) making up
losses in the buying power of an
j The facts, as reviewed, may be
interpreted to support the Union's
-country
with
additional
result in
and
whole
along
create
S
they have won.
relative matter as
a
a
step. They would strengthen
and improve the GM worker's eco¬
were
deal with both of
to
is
ward
efficiency
*'
,
worker
time.
The Union has indicated that its
economic demands
the
years
of an improved standard
living;
(4) That the relations between,
management and labor be stabi¬
lized over a substantial period of
consumer
the
.
adminiso
between
as
war
elements of the popula¬
tion, workmen, farmers, stock¬
holders, businessmen,-'and- other
self-employed, government em"
includes
ti
a
various..
improved
org anization
r a
may
bidding up of prices.
,(9) The distortion in relative
which to make
the parts.
It
and-
period of short¬
better
chinery
In
total purchasing power
results in
in¬
tools and
industrial
our
hour
an
tives. v.".
design
the
uct.
t
application of technology to all
of
power
prices.
The problem of assuring the
worker that the buying power oi
*
s
The problem of maintaining
(b)
;
The security, prosperity and well-being of Americans importantly depend on the effi¬
cient production of American industry. There 'are three essentials of such efficient pro¬
duction.
of
work—in
in
period of
assured
other words,
pro¬
tecting the worker from increases
settlements. Offers four proposals to reestablish, protect, improve and stabilize buying
power of hour-of-work, and lays down formula for wage adjustments.
<
a
dual one:
purchasing
of
v/age
yi
of
a
11
(3) Improve the buying power
an hour of work so that over
be
prob¬
■
■
y
*
might
The Union now ahd in the
past
has interpreted the worker's
J
•
think
we
helpful.
By C. E. WILSON*
■
that
(2531)
employees. ■ For. this reason
proposals must hinge- upon
our
willingness to enter into
your
.
an
Agreement to remain, in force for
a long-term
period. Assurance of
.
cooperation and' stability over this,
period is <• essential if our em¬
ployees are to realize the benefits
.
proposals represent.
our
:
We sincerely
eral
cooperation
<be expected
the basis of
on
cluded
can
day's pay for a fair day's work.
It also involves
willingness On the
of employees to
accept and
tools
new
and
processes
be
other.,
.The third
terrupted
flow
free
parts
essential
of
of
.
is
material
interference
the
use
»>
,
prices
am going to confine my re¬
marks today to the second essen¬
tial—employee cooperation.
wages.
the
all
A' complete
• A2)
The high cost of food
to, heavy exports required to
the peoples of Western
,,'V v
.
y
sure
our
on
food
supply
created
mands
.subjects
You
have
listened
of
to
de¬
your
situation
as
you
over
point of view.
ably presented labor's
and
your
have
We
case.
j carefully
reviewed
strikes
such
as
spring of 1946.
to
thing for
us
"No"
say
demands
to
union and
be
leaving all of the
we
should share
of,
Specifically:
our
possible solu¬
a.
as
problems,,
pro¬
cjv;
worker has lost through in¬
in consumer prices during
and since the
a
on
sound
to
be made up
Protect the buying power of
an
hour
consumer
of work against changes
prices,
by
making
cost-of-living
adjustments peri¬
odically during the life of the con¬
the whole situation we-have some
tion
is
If this sugges¬
adopted,- the committee
representing General Motors will
-
consist of four
people!-
be met.
t
<
:,
■.
-
agreement
tinder the Taft-Hartley Law, and
similar matters. *?&;'[* li* ;/r * r/-
side
was
concluded with the
in the early
Tuesday morning, May
25, and with the electrical work¬
of
about
ers,
noon
on
This announcement is not
*'./;♦
-
.
Perhaps the most dramatic part
of
the
settlement
(Continued
-
.
„.
'r
.
_
an
offer to sell
or a
solicitation of
an
Was
-
-
•
;
>
-
.
\
iaillllli'1 $2,500,000 ^ -fMiSffiS:
■
1
other
on
-17) The
importance
taining and improving
ciency of production.
>'iU/(8) The
problems
main¬
of
the
effi¬
;
created
by
of
;
<
The
excess
accumulated
the form of
purchasing-power
during
war
the
war
bonds and
in
other
savings
currently competes" for
goods and services with the n»rchasing .power of workmen cur¬
rently created through their
.
'
'
em-
disagreement.
All
of
-
•
-
labor
k
Commerce, Rochester, N. Y., June
2, 1948.;
have
us
had
experience
with
effect
;
aftermath
and
power
and
strikes
thorize
a
is
the
as
we
many
war.
be
and
of
rieht
and
Likewise,
V'
■■i'fi:
f:
'
v"'
.
""'"K
•
~
v-f
A
ilI*
,A"!
J
Clue June 1, 1978
'
i^. :?■•".
£'•?'' ■ '•*
'/t:r
*:<■■■.
.
'a"
■
v-.'»
J "'•••v.. j
•'
.".1
:•
,v
to
au¬
necessary
men
f.
J
yy
,
.
•
.
Price 100.99% and accrued interesty
-
"'r
7 *•' The Prospectus may be obtained in any State in, which this announcement is circulated only from
ffyff.the undersigned and such other dealers as may .lawfully offer, these securities■ in such State. j
'j" •'
':Ms''
thing
HALSEY, STUART & CO. Inc.
know,
of;, the
over
•'
•
'
know, that big strikes have
Some
•-
the
think that thisyou
Dated-June 1, 1948
r'
r
f,-
Bonds, 3% Series due 1978
strikes..
strike of General Motors
you
First Mortgage
•
f'
have the
responsibility
employees if
r:
Company
first-hand
We know that you men
to do.
-,*An address by Mr. Wilson be¬
fore the Rochester Chamber of
and
'
* .-
'
,
California Electric ^ower
the. economics
on
of the whole, nation.. This is true
whether the next few days' delib¬
erations result in agreement : or
,
inflation
and
the
necessity
avoiding additional inflation.
industries
in fact,
groups;
same - aspects as
a
day the conflict wil)
and one party or
"the
on page
offer to buy these securities.
The offering is made only by the Prospectus,
-
General?. Motors
management on, the other) face
some very important decisions not
(6) The lack of recognized cri¬
teria hy which fair wages could only as they affe.ct-the.-equities
be\ determined in collective bar¬ of General Motors and-Vthe em¬
gaining with unions, especially ployees you represent, but. through
during a period of inflation. y.\' example, the effect of ours action
Thursday,
May 27.
,
the
and
•
automobile workers
*
to the developments in our
country in the last few months it
is now clear that this group (you
men
representing labor on one
over
-
Starting Saturday, May 22, and
in continuing sessions, adjourning"
only for a minimum of sleep, the
"
tract;;
presentations and demands.]";;
CWe realize that time is running
Out, that you have dates that must
UDue
.
•
hours
basis;
in
this responsibil¬
war
orable settlement.
future
We
creases
,1 (2)
your
all ; of
tion of
a
(1)
the
careful review of
a
for ' future
as
Re-establish the, buying
poicer of an hour of work on a
fair basis—in other words, what
,
re¬
ity and after
In order to expedite exploration
of: these ideas
towards
stability,
desirability
the
pose, ■■-
We believe
you.-
and strength.
7
amine into these proposals as well
progress.
disastrous series of strikes.' This
would
of-Ameriea, * :
a
and
the
its members would be
sponsibility with
build the^ prosperity
j
realistic and practical ap¬ as^ other matters, with an equiva¬
proach to the problem as it af¬ lent small committee representing'
fects our employees take into ac¬ General Motors, to see if they pro¬
count both the need for stability vide the. basis- foe a fair and hon¬
for
patient and would not precipitate
a
Junt
in
progress.
work
to
greater
foundation
position
generally taken- by many other
important (employers
and 'hope
that with better crops this sum¬
mer
the cost of living would go
down, that in the meantime your
,
■
force
great
a
The suggestions we have to offer
is
need
-we.
now
economic
your
J
be
we suggest
thf*t your group approve a much
smaller committee to frankly, ex¬
What
Perhaps the eas¬
to do would be
following
v
sensitive to influences, of all types
curred in 4he fall of 1945 and the
iest
the Problem
.
also
type of industrial states¬
manship needed now when, in an
uncertain world, it is the respon¬
sibility of all citizens to help
;j The war and its aftermath have
made
our
economy
extremely
oc¬
gone
such matters as union
security, employee pension and
insurance* plans, union liability
jng
'
disastrous
UAW-CIO
be the
GM's Suggestions for Resolving
mine
not
peacefully con¬
cluded during the next six weeks,
of
the
-
collective
of
the
and
problerp from
by
bargaining, for example, bargain-*
the
and
and
promoting economic stability and
progress in the nation.
It would
„
.
if
who represent labor see the
men
food exports.-
pulsory!
also
have
presentation
your
Our national policies of col¬
lective bargaining.
r
.
.
,
>
ywfljj-The lackiof jclarity in our
labor laws as to what are com¬
*
the
We
.
(4)
/
differences
our
point of view and dis¬
problems as we see
our
them.
,
v
resolve
cussed
(3) The high cost of living re¬
sulting from the shortages of all
kinds of goods and from the pres-
J
to
sented
due
save
.
-
living. We
know that the negotiations
just starting between the United
;
to
reached
how
it
also
Workers
would
this problem and have
certain conclusions or
might be resolved.
A
broad outline of these conclusion*
follows:
'
dy: .".
J J.j.
Vv - '■
eration
agreement
a
contract
that
the relations be¬
tween your union and
General
Motors. ' We have frankly pre¬
Europe
from starvation.
At
at1 controversy
and
agree : on
would improve
real shortages created
by the lack of production during
the
'
groups—is
time
feel that if Gen¬
reach
only be a tremendous forward
step in industrial relations but
as
realization
to
in the increased cost of
;
concerned-
theapproach
to
a
of. these objectives.
I We have given, careful consid¬
labor
same
Mine
all
agreement based
on
these objectives that it would not
well
as
demands, for increased
We subscribe to the im¬
Owners,
by
of
other economic
workers
employees face
effort
Wt.(D The
i
saying. "No"
interests
best
reducing
portance of this point of view.
-
which
cases
real problems the
are
understanding of what "occurred
can
only be obtained from this
y iPresent Industrial ProblemsrvVstatement, so here it is.
\
in developing the subject and
We have had 37 bargaining ses¬
as a background for
my further
sions with your committee in an
remarks, I will attempt to identify
principal problems
industry faces today.
and
their
qn
some
infla¬
realize the very
matters
v" I
the
in
further
will affect adversely all industry
of all
and
the
nation. ; Perhaps jthis
between
about; the ylast
the parties was made possible by group, here has
Chance to reach a. fair and real¬
a statement
by General Motors to
istic agreement of the right thing
the
Unions,
madeon \ Friday,
to do and prevent another round
May 21.
A full appreciation and
artificial
;.
•
me
suffi¬
—
prevent
we
■*'
of materials
on
and labor.:
to
seems
agreements
the; actions of the
particular parties.:; t " J; W * •;y
from
Restrictions
:yy
It
tion
to
influenced
and
or
these
can
efforts
ciently important to discuss them
a
case
example of an effort
to solve some of these problems
at least in part, especially those
problems that may be importantly
;
industry-wide strikes
workers, and
as
unin¬
an
Motors
by the impact
these; 10 prob¬
on
today.
of
that
sibilities of both
management and
labor.
It requires confidence of
each "party in the
v.
have
may
lems
and
qualify for new and different
jobs, y It requires a clear understanding of the rights and respon¬
,
automobile
fairly judged
they
to
-
General
the electrical workers' unions
part
use
the
and
fair
a
between
Motors
can
-
i 1948
the other
t
tr
1
■T
37)
new
_
'
12
THE
(2532)
The
COMMERCIAL
&
FINANCIAL
CHRONICLE
The American
Copper Outlook
By JOHN A. DAN A HER*
■
New York
^
/■/,
s
Attorney, Washington, D. €.
•
;
,-.
Thursday, June 10, 1948
.
American
*-■'
copper demand and consequent threatened shortages of metal, Mr. Danremoval of 4-cent import tax on crude copper be made permanent. Holds we
should import as much copper as possible and thus conserve domestic supply for emergencies in case
of interference with our shipping lanes. Decries subsidy proposals to stimulate domestic production.
aher urges temporary
"
A
of Commerce
"Statement
of American Economic Principles," designed to
specific contribution to. understanding of the American capi¬
talistic economy, was adopted unanimously June 3 by the Chamber
make
a
of Commerce
of
the State of New York at its
65
the situation confronting American industry had assumed
most serious proportions. During the war, approximately 40% of all available copper had
gone to munitions, in one form or other. Our domestic production fell far short of meeting
over
a
year ago,
to all American consumers would
time demands,
la
production
r.„e
have
the
1946,
only
taled
million
Serious
work
cents
stop-
pages
had
the
tailed
-
ourselves/
Under his
industry rallied to the
support of his proposal. Mr. C. E.
Wilson of the General Electric
Danaher
A.
John
cur-
The
govern¬
ment in 1946 from its own
stocks
the
Committee
Ways
on
House
and
informed
Company^
,
production.
The leaders of
pound.
per
American
resulted
in
had
leadership, legislation was intro¬
duced looking toward the repeal
of the import excise tax of four
in
than
less
1945.
Means:
is continued and the
is forced up to
made
it
available
to industry. the world price, plus the present
jHowever, commencing in Novem¬ excise tax, it will not be bene¬
ber of 1946, the Metals Reserve ficial even for the copper indus¬
Company
ceased
making new try, because it will cause substi¬
commitments, and what had been tutions
and
postponements
of
:a
stock pile of 500,000 tons of projects
which
are
urgently
in
American
copper
as
of Jan. 1, 1946, by needed
industry."
March 31, 1947, had been reduced He continued in his statement:
•supplied
657,000
some
tons
"If this duty
and price of
only 7,000 tons.
Incidentally,
particular residue still re¬
mains and is available, but un¬
copper
to
".
.that
obtain the amounts required from
will
doubtedly
utilized
be
as
part of our national defense stock
pile. With an anticipated demand
for
amounting
1947
to
an
ex¬
pected 1,400,000 tons and a maxitnum expected domestic produc¬
tion of
it
approximately 900,000 tons,
obvious
became
that
our
na¬
.
If we
.
.
not
are
able to
foreign sources it will mean cut¬
ting back prodirction-dn about the
same ratio a£ our copper supply
is to our copper requirements
Shortage of copper would limit
the manufacture of appliances for
.
the
home
such
small
and
.
.
apparatus,
controls, heating
devices which
motors,
as
units
similar
and
tional deficit of 500,000 tons of are incorporated in* widely used
popper had
to be eliminated electrical products such as refrig¬
through
imports.
There stood erators, bil burners, farm freezer
the barrier of $80 per ton which, units and machine tools.
These
added
if
would
lowed
to
the
have
promptly
by
import
been fol¬
domestic
the
price,
are
only
which
and
a
part of the disturbance
would
result
from
an
in¬
adequate supply of copper." Offi¬
of theJTord Motor Company
price. cials
31,
1949.
.
once
It is
for there should
tion
be
rier to the availability for Amer¬
ican industrial use of an adequate
supply of
essential
an
mate¬
raw
rial which cannot
produced
for
domestically be
quantities sufficient
in
needs.
our
*
Danaher before
meeting of the Na¬
Address by Mr.
imported cop¬
per was suspended?
The Metals
Reserve Company in the RFC in
March fixed a price of 21V2 cents
the remaining cop¬
per held for sale.
When the Sus¬
on
pension $ Act
became
effective
April 29, 1947, American import¬
ers
began bringing in the sorely
needed copper.
With the excep¬
tion of a brief period when prices
slightly/the prevailing price
throughout 1947 and down to the
rose
present time has been 21V2
cents
the
annual
tional
Association
of
Purchasing
Agents, New York City, June
1,
of
in
the
view
the
of
fact
that
In
maxi¬
our
production of primary cop¬
per in 1$47 was only 871,000 tons,
while we used 1,350,000 tons, it
mum
becomes
of
the
that
obvious
four
cents
tribution
the
of
suspension
excise
imports by Congress
curtailment
production of a million auto?
mobiles.
of
1948.
result
the
The
cumulative
shortage
of
effect
copper
on
and
levy
a
was
highest
on
con¬
order.
will
we
faced
be
with
the
annual
necessity of bringing into
in the neighborhood
500,000 tons of foreign copper.
this country
for
as
will have
consumers
that foreign
the
tries
to
pay
as
much
other
coun¬
copper
in
consumers
willing to pay for it.
our
major industries
find it indispensable.
The auto¬
motive industry, the building in¬
are
Three
Distributors
of
dustry and the electric industry
simply must have copper, and the
latter, of course, will include the
production
Dealers
electric
as
transmission of
and light as well
and
power
the innumerable types of elec¬
and INDUSTRIAL SECURITIES
American
principles to the eco¬
problems of this economic
age," he added.
to
15%
arises
from
"People
safe¬
to
development
the
of
country
consumers
one
of
into
goes
a
the
to¬
unexpected decline, copper
demand will remain high, ap¬
proximately
115,000
to
120,000
tons per month.
tally
A
to
Members New York Stock Exchange
115
Broadway
•
New York 6, N. Y.
products and services,
thus determining what is produced
and the volume of
production.
(7) There should be
able
to
factor
second
our
of
consideration
importance
of
the
con¬
tinued demand for copper derives
from our participation in the Eu¬
ropean
Recovery
Plan.
It is
ex¬
pected that over the projected life
of ERP, we will be called upon
to provide at least between
and
60,000
tons of
participating
copper.
nations
..(Continued
55,000
abroad
on page
39)
made avail¬
the
consuming public an
ever-increasing variety of goods
of
the
most
acceptable quality at
the lowest possible prices.
;
(8)
Government is the servant
of the people—not their
master.
It should be used only to further
(9)
The
cost
of
%
government
should be held at the lowest
pos¬
sible
level
consistent
with
effi¬
cient and economical
performance
The statement set forth 10
below
listed
prin¬
the
nation's
sponsible for the
standing economic
which should
which
of only those functions which be¬
ernment.
be
re¬
out¬
and
the nation's
govern
The
points
needed
emphasis and that
strong
definite
should
abuses
to
be
in
corrected
order
strengthen
it work
make
and
The
the
statement
following
the
even
was
system
better in
signed by
of the
members
chamber committee: B. M.
Grant,
Oil Co., Chair¬
Coppers, President,
National
Biscuit
Co.;
Earle S.
Thompson, President, West Penn
Electric Co.; LeRoy A. Van Bomel,
President,, National Dairy Prod¬
Socony
ucts
Vacuum
George
man;
and/John E. Raasch,
President, John Wanamaker, Inc.
justice in sharing of the burden1,
and
use
Statement of Principles*
(1) Every American is entitled
to the fullest and most
least
serious
rewarding
it does not contravene the broad
(2) An adequate reward, wheth¬
it be wages, salary, or return
on
investment, is the most effec¬
tive
incentive
nomic
continued
to
progress.
/,
:
eco¬
;
/
(3) The worker is entitled to
.
a
fair
should be able to look forward to
economic security in his job, and
when
he
through
in
view to the
a
economic
sions upon overall
repercus¬
functioning of
the economic system.
(10)
:
Except in time of
war
or
other national
emergency, govern¬
ment should not take
regarded
are
over
or
en¬
in activities which generally
gage
within
as
the
ex¬
clusive province of private indus¬
Government
try.
competitive
limited
sorted
the
regulation
business
to
should
and
only in
public
tected in
of
should
be
enforcing rules of fair
to
competition,
interest
be
re¬
in which
cases
be
can
pro¬
other way.
no
7
:
Mannheimer-Egan, Inc.
In New Quarters
/)
;
ST.
of his abilities and services by
engaging in the business or occu¬
pation of his own choice, so long
as
especially with
of those taxes which have the
Co.,
The
use
view
a
greatest possible equity and
progress
economic life in the future.
system's
similarly should
the population with
upon
committee felt that the American
more
Taxes
maintained at the lowest pos¬
to the
through educational processes."
intimidation from any source. He
major
Langley & Co.
different
sible levels. They should be levied
how
guard the continued progress and
activity,
unless
\
(6) Consumer preference should
determine the relative values of
is
therefore,
sue,
are
living wage, to be determined
by individual or collective bar¬
gaining free from compulsion or
but
spon¬
inconsistent
long within the province of gov¬
er
11%
its
or
not
interested
in
pure
fundamental
economics of the theory of demo¬
cratic
capitalism;
their interest
lies in whether the system is the
best system for them. The big is¬
mately 11% of our copper demand
will go to the automotive lines,
building needs, while nearly 50%
of the copper demand is from the
electric industry.
The balance of
our copper demand is widespread,
and copper consumption is closely
form
wholly
the general public interest.
linked with the level of business
W. C.
is
PAUL,
becomes
no
unemployed
fault of his own, and
the most
dustry
productive results in in¬
in
business.
They
and
from
Chamber
are
State
of
New
of
Commerce
York,
Street, N. Y. 5, N. Y.
65
of
Liberty
the
beautiful quarters in the
more
honor of the
is
new
distributing
chain
and
In
offices, the firm
"Redipen"; key
a
ball
point
pen
manu¬
factured by Brown & Bigelow; of
Minneapolis, and also
a
combiMf
tion key and nickel holder marked
for
"her" and
The
firm,
lished in 1931, acts
ing
'
for "him."
which 'was' estab¬
distributors
as
participat¬
dealers
and
;
ir]i
railroad, public utility, industrial,
issues
and
and
investment
bank
tnist
insurance
and
stocks.
With
(Special
Dayton Bond Corp.
to
The
DAYTON,
The
Mann¬
announce
First National Bank Building.
and
^Captions only of each section.
Text of full explanation available
—
removal of their offices to larger
municipal
his old age.
(4) Management, labor, and the
government should do everything
within their power to bring about
MINN.
,
heimer-Egan, Inc.,
public interest.
from
its
of
sorship,
in¬
terpretation of the application of
nomic
strict
conflicts
(5) Unregulated monopoly, irre¬
spective
a
believe.
to
"The statement is really an
tric equipment and appliances for
homes
and
industry, r Approxi¬
PUBLIC UTILITY, RAILROAD
called
"a
was
the future than it has in the past,
stabilized.
the foreseeable future there¬
after
Our
—
been
challenge
of sound business
thinkers to bury their minor dif¬
ferences
in
opinion and agree
upon a broad statement of prin¬
ciples in
which
most forward
looking
business
people
have
Throughout the balance of 1948
of
Underwriters
had
first
committee believed have been
40,000 tons per month.
of copper was
would
the statement,
about
the Committee that the
copper
V
that
ciples,
20,000
of
which
said
tee,
whenever
with the American
way of life.
a
pound.
Our imports over the
intervening months have averaged
informed
tons
Grant
"declaration,"
to the ability
cents excise tax on
Not only were the needs of Amer¬
ican industry met but the price
of
the
.
lack
Obviously, tjie cost of all copper
M.
-/
happened when the four
per pound
year's
commit-
the
B.
come
What
more
a
of
subject.
i
my
bar¬
no
arise.
study
belief
actually
should repeal the excise tax rather
than merely suspend its imposi¬
impartiality
repre¬
/
B. M. Grant,
/Chairman
Of
the
American economy.
that
Congress
our
government should maintain
than
'
Undoubtedly,
date,
to prevent
can
developing and to
clashes of interest. The
sented
sus¬
before
Congress will act
again for the protection of
that
everything they
reconcile
ments,
four cents per pound until March
would find
tons
emergency
Inter¬
on
Improve-
pended the import excise tax of
been pointing
American
industry
the
straits
in
which
we
to
out
serious
604,000,.
tons, nearly a
quarter of a
the
of
by
Commit-
nal Trade and
Congress acted promptly in the
face
do
conflicts from
tee
,
actively in mini¬
mizing the stresses and strains on
the economic system. They should
the
industry all but stag¬
the imagination, the uses oi
being so widespread.
for
months
some
about
Chair¬
Cop¬
Dallas,
and Brass Incorporated,
per
to¬
sources
Donald
of the Board of Revere
man
t i c;s
s
C.
Mr.
from
do me
was
—
should cooperate
sponsored
;
American
gers
The
statement,
copper
creased.
of
fined
copper
in¬
correspondingly
been
monthly meeting at
Liberty^-
which
<$-
war¬
our
"Statement of
a
Principles", designed • to challenge business
thinkers to bury their differences.
Street.
A little
issues
Economic
Formerly U. S. Senator from Connecticut
Forecasting continued heavy
Capitalistic Economy
State Chamber
Spencer
Dayton
is
was
now
Chronicle)
—
Otto
affiliated
R.
with
Bond
tional Bank
he
Financial
OHIO.
an
Corp., .Third Na¬
Building. In the past
officer
I Acceptance Corp.
of
the
Estate
-
*
Volume
167
THE
Number 4706
COMMERCIAL
&
depression
Land Values
>
She
Commenting
on rising land values, Mr. Babson gives as reasons r
buying: (1) mortgage indebtedness is reaching danger i
point; (2) threats of surplus farm and * industrial production;
(3) decline in buying power of farmers; and (4) recovery of j
European fma Action.
ings
year.; "•
.
.The facts
are
that
Government'- "E"
a
bonds. / DON'T
cost of
living.
-
&
j
;
To HeW
dif¬
in
ferent sections
of
the
.r
try.
farm
val¬
fairly
near
ly
their value
but
farms,
divisions,
etc.
This
to
pasture land
There seems to
demand
for
also
be
in
Montclair
dent of the
Golf
your
up
debts.
mortgages
and
so
Then
put
and
machinery
you
can
go
your
other
into
buildings
good
Co.,
shape
Inc.,
who
is
in
charge
Better
than
75
of
activities
dinner in the
eve¬
association, presiding.;
will
sport competition
the
be
awarded
winners
at
that
time.
The group will then enjoy
of the Louis-Walcott fight by tele¬
vision.
the
day's
in
general arrangements.
through the next
younger
The
*
■
-
-
association
sociated
in
partment. Mr.
Ludlam
j'.
G. White &
Co.
and
Rollins
H.
&
Co.
which
.,/• y,;/
however, is
being
land
Laboratory
Of course,
a
value
not
it
of
farm
raise
can
is
penses,
and this of
the
upon
\r>-<
crops
which will pa.y a fair rate of in¬
terest on the land after all ex¬
•irt
•'V. V',
?,
t
? * -h't,
*
'*
\ /•
'
.}«,
,
>
V /
V
'
/. / /
Nation
—Of The
well
as
the wages and other expenses
as
v'
•TV"
depends
course
price received,
.•
t
■y,
which must be paid.
..
>/c a.
City and Town Property
The
-
Federal
Reserve
in
Bank
Washington is especially disturbed
at the
continuous
loans
gage
on
climb
in
mort¬
city and town
prop¬
erty^,This is probably due in part
to the activity of the Federal Loan
and Savings Banks in soliciting
mortgages. Certainly this should
be curbed at the present time.
/Is
for
wrong
A
to
loans on
climbing during
be
zoology—almost anything from,;'/
or
Z—you 11 find scientists working in laboratories
Island
mortgage
real estate to
a
It
Whether it's airplanes, atoms
Long
on
studying how and why things happen.
(
period in which business loans
dropping off steadily and are
being reduced.
./
;;'//■
are
But these laboratories didn't just
happen
Long Island. They're
on
...
These
ings
Federal
Banks
Loan
be
must
and
Sav¬
careful
be
part of a vicious circle
whereby some day the property,
upon which they are now loaning
anteed
bv
hands.
a
houses
at
government,
into
government
policy
will
selling
of
will
vided the right
then
—where
the
tempo
now
pays
even
of business routine is less wearing.
genial suburban
area
?|{
'
which
four definite
are
people
should
consider before further
prices for
In this
owners,
con-
there is ample opportunity
for concentration
on
research.;
.
We
are
preparing
tories located
on
a
.
,
5
«
,
brochure telling about
Long Island and what they
many
are
of the labora¬
doing. We think
v.
you
Reasons for Beingr Cautious
There
of home
$10,-
estate in the '30s could, easily re¬
peat in the. '50s.
will find it quite interesting, ; Send
and
we
us your name
and address
reasons
carefully
bidding up
will be
glad to mail
you a copy.
kind of real estate.
any
These reasons
are
as
follows:
-
(1) The upward trend in mort¬
gage indebtedness, which in some
-
localities is
reaching
a
/
.
products and
of
even
surplus
certain
*/■
farm
higher level of production.
(3) The recent downward trend
:in the buying power both of far¬
mers
due to lower prices of farm
BUSINESS DEVELOPMENT DEPARTMENT
LONG
ISLAND
LIGHTING COMPANY
manu¬
factured goods due to the present
:
ADDRESS:
dangerous
point.
(2)> Threats
*
thinking is clearer, living is happier and healthier and
be
is entirely- possible that what hap/pened to city and small town real
•
pro¬
atmosphere for precise, reliable experimentation
selling in the open
market for $5,000 or even less.
It
//
Along the Sunrise Trail is
these
auction, the houses for
which the veteran
000
reason/
the government's
the
If
adopts
good
in part guar¬
are
the
back
come
a
not
to
and which loans
located there for
MINEOLA, N. Y.,
prior
with
thereto
which they cannot pay
cash, be¬
lieving that sooner or later a crash
is coming,; due to am inevitable
or
was
formerly with
mortgage.
They are
very much opposed, at the present
time, for farmers to buy land for
ultimate
withy
in
on
whether
ii
trading de-y
sub-
decline in farm prices.
d
now as-/;
them
E.
formed
was
lam is
on
the
&
A.,;Ludr\:
of the Ag¬
with
-,
t h a»t
nounce
selling far above
sensible price.
has
St.r eet,New?i
York City, an-J
Paul
Prizes
Montclair; New
Jersey.
The
date
was / announced
by
Stanley Russell, Jr.* of- Blyth &
pay
a
transport
ning with Philip Moore of Schro¬
der, Rockefeller & Co., Inc., presi¬
Wednesday,
on
the
there will be
Brokers
r o v/ n e
abnormal
an
The special concern
riculture Department,
connection
earnings first to
outing </•
23, 'at; the
Club
and
Reillyv 52 IValH
cities.
for "bottom land"
in many cases is
June
Lynch, Pierce, Fenner &
Following
will hold its second
annual
.j
of
(formerly the Junior
and
1947
.
applies
small
near
////,
H
Association
B
as
rather
value
your
to Invest
York
Association)
are
bnorma 1
high. They are
selling not on
speculative
/Use
special event is being man¬
by Sydney Duffy of Blyth
Co., Inc. Roger Gilmartin of
Beane is taking care of
tation to the outing.
,
large cities
producing
How
Qtfiig;
Investment
Investment Bankers
.coun¬
ues
Babson
New
products and manufactured gopds
in order to be independent of lis.
Probably
the
a
.The
of
Twee d y,
A
aged
Merrill
'
,
Spring
other games.
of ' the industrial
due to the increase
big
these
same
in
children
in
KEEP THESE IN YOUR: HOUSE.
(4) The fact that, a large pro^
increases in.
portion of the money now being
land [ values sent to
Europe will be used to aid
.are : not
the Europe * to produce more.farnji
bought
your
:
and
population
,
a
bathroom.
,
May 3 of this products
their
education
give
the
at
festivities, which Vvill begin present about 220 members from
9.&0 in the morning, accord¬
some 90 Wall Street firms. Aver¬
ing to Mr. Russell. Golf will be
the feature of the day for many of age age of the current member¬
those attending and there will also
ship is 31, with approximately
be tennis competition and other
90% veterans of World War II.
games.
Robert Baldwin of Mor¬
gan, Stanley & Co., is handling
golf
arrangements
and
Julian
Hemphill of Hemphill, Noyes &
Co./ is in charge of the tennis.
Arne Fuglestad of White, Weld &
Go./is handling the scheduling of
Be liberal with your
and
in Wall Street will take part
13
at
agriculture,
mechanics or business. Above all,
have a good savings bank account
or
a
safe deposit box of U. S.
against the purchase of more property at present prices.. Readers are
disturbed by the chart which appeared, on page. 79 of "Time
j.
>
Magazine" for<^
Roger
much.
so
useful
also
.
and
church
The Agriculture Department in Washington is putting out
warnjas to the high prices of farm land.
Their agents are advising
..
kitchen
(2533)
in the
patient, and thrifty for
during the hard times; she
is getting older; and cannot
now
do
men
was
you
-for cautious
any mainte¬
this, give your
by buying her a
After
break
a
modern
'
'
'
By ROGER W.BAB SON
wife
without
costs.
nance
CHRONICLE
FINANCIAL
*
Paul
A.
Ludlam
14
THE
(2534)
COMMERCIAL
and
Rearmament Program
FINANCIAL
&
CHRONICLE
from business and other pri¬
vate borrowers; (2) effects on
Money Market
th£
supply
of funds available
thfe
money
And
market
from
to
banks
v'V
and
monetary policy.
on
Effects
be followed in rearmament program, if piling up of
inflation is to be avoided, Reserve Bank official foresees need of
must
is
and also restraints
!
.
-
essarily base
my
discussion largely
on the information that has so far
been made public concerning the
especially,
^Statement
Round
Table
by Mr. Roelse at
Conference on Fi¬
were
fol¬
lowed at the
beginning of the war,
if we are to avoid piling more in¬
flation onTop of the inflation that
immediate situation, the probable
or possible effects of the rearma¬
Consequences of Rearma¬ ment program on the money mar¬
ment, National Industrial Confer¬ ket may be considered from three
nancial
ence
26,
Board, New York City, May
1948.
•
angles: (1) effects
for
:
funds
from
on
the
the demand
government
>-,C~\
-v *
of
.
penditures and the probable level
of tax receipts. The latter depends
one's
upon
estimate
the
of
specrive level of national
I
might
be
somewhat
inclined
take
In any case, I
think
we
.
serve
the
increase
borrowers for
ply
of
centers, it is not expected to increase to
"
,
.
-
•
away
any
appreciable'
* !
long-term obligations, '-tfvv Banks in other v/C-
the intermediate- and
the
available
ifrasand.when>therermightbe>weakness-in;thelongergin'eiTri^U^;-
supr
ment issues.
V
»
V
/•;/.*■
.•
":
,
.
.
investors
volume
to
of
avoid
cash
abnormal
an
attractive and
more
.
.
prices that-wfere higher than those quoted in the
open market, because;
enough bonds to complete their order.
££;•''
Although the government securities markets^were caught in the;
cross-fire between the Treasury and the Federal Reserve Board, in
their recent actions in the money markets, the
general opinion of in- ' ;
redemptions;/ If
the buyers were able to get
the holders of maturing securities
should consider other investments
present their
securities
for. cash redemption in
large volume, new borrowing by
the Treasury might become nec¬
vestors and traders
seems
either direction
looked for in the next few months.
are
to be that
no
decisive price movements in
.
The Treas¬
..
required
by the aircraft industry and other
by keeping the certificate rate at 1%%, prevents any hardening
o.f money rates, and this will mean a good demand for all govern¬
ment securities particularly the higher income obligations.
The,
Federal Reserve Board, by increasing reserve requirements of banks
in New York City and Chicago will offset to some extent the June
redemption of certificates and bonds, the June 15 interest payments
concerns
on
ury,
;
The next question that lias been
raised
is
whether
.
considerable
amounts of funds will be
under
thgt
the
receive
contracts
rearmament
hand,
there
which
no
On
the
other
are
doubt
that
from the
amount
banks,
or
credit
of
is likely to be required at
given time to finance an air¬
craft
building
magnitude
<of
the
proposed
...
,
restraining influence
a
Insurance companies are still
from
of the smaller ones.
some
playing only
connection
quire
likely to
are
.
>...
.
Savings, banks continue to be fairly active wi^h buying
ently now being done
ible; obligations.'; ■, -
rather
concerns,
of
money
than
mar¬
There
of these institutions in the bank
bonds, with the proceeds
going mainly into the 2V4S due 1959/62.
Trust companies have
been switching from governments into convertible
corporate obli¬
gations, but these operations have not been too/large, yet. ...
'
\
As for other
businesses, it is to
be expected
that there will
tinue to be
1956/59.
for
new :,
capital
to
funds already available, or to be
accumulated
from
earnings,
meeting expenditures for
sion
and
and
equipment
modernization
industries.
in
But this
of
.
among; the« most favored;
are
Switches
are
Bank
Treasury
*
being made from the 214^ due 1956/58
bonds
;tion by institutions that
continue
to
under
be
interested in income.
are
.
accumula-^
;
■.■/:-//*/
The
|
2Vh% due 1955/60 and the 2%% due 1960/65 hold the
spotlight in the partially-exempt list with buying in these is-
% sues evidently coming from institutions
in
•
in
tax-free
>nicipal
expan¬
bonds.
securities
.
;
Certain
.
that
had
and
.
of
apparently -
are
putting
are
that
are
holders of
other
been
because of the price decline
plant
number
a
.
.
strong demand still in evidencev?for the ^Its due;"
'The International
<
con¬
supplement
.
a
.
V" into the 2^s due 1956/59 and the eligible 2Vfcs due 1967/72. ;V.,
considerable demand
a
The 2s due 1952/54
,
■^issues; with
ket
conditions, which might be of
little help to such concerns.; \
appar¬
in the restricted issues than in the elig¬
is evidence of some. profit-taking by
more
..
certain
re¬
arrangements
to
meet the financial needs of a few
general easing
minor role in the
a
.
dried up, and no sizable liquidation is expected unless there is a
of attractive corporate securities.
special
individual
U V
.
Selling, however, has pretty well
flood
On the other hand, the insurance
companies could be back in the government market on the buy side'
in an. important way, if there should be a revival of
equity financing,with a strong stock market...
1
<
*>
.
.
this
a
the money markets;..
upon
government market, with scattered buying appearing here and there
during the coming
Any problems that arise in
year.
be postponed for a time, and still
can
money
.
money market
:n:
Central
prolong
markets from easing too much.
Income tax '^
payments due the middle of the month will likewise tend to have J
can
program
far
so
hardly be large; enough to; be
factor of great importance in the
.
,
keep the
concerns
or
to
deposits with member banks
-
will
the
But
the inflow of gold.
as
.
.
the period of effectiveness of the War Loan
T< Accounts, since the tying >jup of close
to. $500,000,000 of funds I,
thattould fce invested or loaned, means that Oalls on government V
Banks
other
require fi¬
nancial assistance, either from the
well
as
Also the larger reserve requirements will enable the
undertake
financing.
the national debt
program.
Some of the principal concerns in
ttfip aircraft industry are well sup¬
any
Railroad
/..
■
requirements of Central Re-
during the coming
pfcrtiall^exempt bbligations^ai:^
fiscal year. Perhaps that assumphfully and shrewdly by many banks, with these buyers not inclined
tion should be qualified, however,
to show too much of an interest unless blocks of bonds are actually - '"
by pointing out that it will require available for sale:
Prices of these securities have been quoted up/:
the offering, in refunding opera¬
sharply in the past, by the trading fraternity when there were reports: ■
tions by the Treasury, o£
new>se¬ thai/ institutions were looking jfor^certain-pf the taxvprotected; secu^5^
curities sufficiently attractive to itiesv-.
v*; Transactions, however, have recently been consummated at §
both.
v.*
•
.
reserve
extent-the floating supply of government securities, especially^1
;
funds
government
Public Utility
in
,
tional
Bonds and Stocks
ldatrT'call
City banks, will take loanable and investable funds
■/money
working capital, and are-able
a
large increase in
their operations
without
addi¬
Industrial.;'*
represented liquidation
could not be
or
war
/
,
.
large
;C from these institutions, and will keep the pressure on the large M//7.
with
State, Municipal and Revenue Bonds
the
ff- localities will not be affected by the new development and they assume
it is unlikely that new
'/have funds that are being put to work in the higher income
U
offerings of Treasury securities
J" Treasury obligations. . . , As a matter of fact, very sizable com- > 1 (other than savings bonds-"and
j/mitinents are waiting , to be made by many^ out-of-town baiiks;^ fc ;
notes) will compete with private
■f:j
to
United States Government Securities
of
.
ban
plied with plant, and I understand
Investment Bonds and Stocks
requirements
reserve
take.care
;
While
receipts-duff
ing the coming year, but it would
not essentially alter the conces¬
sions.
to
'
&
optimistic view of
more
order
in
ascertained.
mcome.
to
the increased
meet
pror
the prospects for lax
back tb the more
come
•
financing by the govern'"; hew requirements were well prepared for it, with cash or
shortest-;
The only room for differ¬ term
'government securities ample to meet' their needs-Tor higher'
reserves-with the Central Banks.
Some selling was nevertheless;'
expansion in government ex¬ noted in the early bond maturities but whether this was done to';
essary,
has already occurred.
But to
!
than
were
*
of opinion relate to the rate
ences
considering what might be said about this topic, I soon found
that it would not be possible to discuss at all adequately the effects
of the rearmament program on the monetary situation without over¬
lapping the field of public debt management. In the existing circumstances, monetary policy and »
debt management policy may be
probable magnitude and rate of
regarded almost as Siamese twins. growth of military expenditures
I am glad, therefore, that Secre¬
during the coming .fiscal year.
tary Wiggins has discussed debt
£ /en though we confine our at¬
management aspects of the prob¬
tention mainly to the near-term
lem first, and I shall have to ask
prospect, however, we cannot ig¬
his indulgence if I find it neces¬
nore
the possibility that subse¬
sary
to invade, his territory to
quent years may bring a further
some extent.
•
t
large increase in military expendi¬
It
quickly
became
apparent, tures. In view of the fact that we
also, that it would be difficult to no longer have the idle produc¬
segregate the effects of the re¬ tive capacity we had before the
armament program from the ef¬
war, and in view of the possibil¬
fects of two other major
develop¬ ity lhat-it may become necessary
ments of recent months—the for¬
to devote
a
considerably larger
eign aid program and the income pre portion of our produtive and
"tax reduction.
financial
resources
to
Finally, I think I
military
should say at once that I claim no
purposes
in
future
years,
we
gift of prohesy with respect to in¬ should be preparing the ground
ternational
political trends and for very different policies, in the
their effects upon the further de-; fields, of monetary and fiscal pol¬
icies
A few thirty-seconds
.
ment.
con¬
« \
,
.
^off guard/ because of the sudden and unexpected tipping-of reserve ,'
requirements.;,..
However, nearly all of the banks affected by the
prospect for d" renewal of
deficit
on ironeces-i
larger reserve requirements for member
quotations of government securities.
.
expansion of credit and monetary supply. Holds monetary
trols should play supporting rather than leading role.
velopment of the national defense
program, and therefore must nec¬
the
of
knocked off bids, with volume very light indicating a quoting down
of prices by professionals, probably in the hope of catching investors
(coupled with the-effects
of foreign aid arid tax reduction)
In
.
tary
'The announcement
banks in New York City and Chicago had only a minor effect upon
program
higher taxation, stimulation of savings, diversion of materials and
labor from less essential purposes,
question that has been
to the mone¬
effects of the rearmament
raised with respect
!
Governments
on
By JOHN X. CHIPPENDALE, JR.
"•
The first
sary
Reporter
j;
the Demand for Funds
on
Vice-President, Federal Reserve Bank of New York
Contending different fiscal and monetary policies from those of the
war
'
i
:
Our
other sources; and (3) possible ef¬
fects
By HAROLD V. ROELSE*
last
Thursday,. June 10,'1948
locked' in
>
^
taking profits
state
those
and
mu-
^
f^
able to get out about even
now
funds
these
into
*
■
obligations.
partially-
the
•
exempt Treasuries/ ;
.
•
■it's
demand pre¬
f!
sumably will be increased only to
/
Canadian and Foreign Bonds
~
the extent that
business'planning
fleliremet!! of Old Perti Bonds
has been affected by the
expected
renercussions of the rearmament
Bank and Insurance Stocks^ *
;{ >
program, plus
reduction,
p■
'if?:-..
*'"
''
»\'v: •*' V'*""' *
'..'i
K
"''"/A;- Uv «>*•?.'ri*?'
outlook.
the
•
Distributor
•
Dealer
foreign aid and tax
the general business
So far there is not much
evidence
Underwriter
on
c
f
abandonment
an
-
>
The
exchange of the various issues
of
policies that were
by many business con¬
cerns
earlier this
year.K It
is
possible that, at some point, the
diversion
of
(
New I
J
ryork Boston Francisco Cleveland ^
Pittsburgh Chicago
Philadelphia
San
-
y.m.yu*
cities
v
I
f
Phil
f
>
,¥,
,
.
Washington
„
.
.
Springfield
i
seme
Private
Priv,
wire
r
system
other
the
materials
to
the
may-
-
industries, and thus lessen
financial
requirements
of
those industries, but that does not
seem
In
to be
other
an
early prospect.
fields
(Continued
of
on
credit, it is
page
42)
follows:
Zs
Retirement
$59,000 April
6s-1960
Balance u )
Outstanding'/'
.
.
fl
„
157,500 May
301,000 April
$1,245,500
2,483,000 May
230,000 April
718,000 May
/ 8,060,500
:
re¬
require
curtailment of operations in
program
as
Total
Exchanged
Issue
7s-1959__——
.
armament
are
Bonds
cautious
adopted
:
According to latest advices received from the New York Stock1
Exchange, American holders of the old bonds of the Republic of Peru
have exchanged $13,353,500 for the new bonds
up to the end of May;.
•'
-
$7,482,500
,
.
i
-
'
es-1961
—
•
The American
'
-
owners
/
>
40,322,500
4
20,422,000
/
,
4,047,500
,J
of the
exchanged bonds who have accepted
of unpaid interest and to accept a re¬
Peru's offer to skip 16 years
duced return of 1% for the first two
years, 1%% for the second two .
years, 2% for the third two years, and 21/2% thereafter;-represent*
about 17% of the total
outstanding issues when the offer
by Peru in December, 1947.
/"
:
^ ;
.V'Z
.
was
v
made
-
Volume 167
Number 4706
.(2535)
all
Securities Administrators Report Ghanges;
National
Association
of
Securities
Administrators
changes in securities administrators.
Paul H.
'
reports
:r
k
•">.'/
Brown, Secretary of the State of Texas, announces the
Darley as Securities Commissioner and the ap¬
resignation
of Leo
.-new
Commissioner.
t\
Stapp has
been
Mr.
appointed to the
and the
named at the
Licensing of Dealers, Brokers and
vention.
Salesmen
Committee
In
of
the
Na¬
77/y
that
State, replacing Wilfred J.
Begnaud.
Mr. Brock has been
appointed as a member of the Oil
Securities
In
ald
the
A.
of
became
tion
hours
their
Vermont, Don¬
Hemingway has been
ap¬
pointed Commissioner of Banking
in place of Charles E. Burns. Mr
Hemingway has been appointed
a
to
during
the
conven¬
carrying
These
work.
facilitate
to
the
to
of
on
committees
have been named at this
as
neces¬
their
time
duties
so
prior
opening of the convention.
has
beCn
all
the
of
Julien
men
of
dress
is
Frank
for
following is
partial
a
on
,
helpful
messages
the
in
the
subjects
A
in¬
.
One
the
two
or
Securities
curities, Virginia.
Response to address of welcome.
The Convention
comprised
of
member of the Securities and
ing
Exchange Commission. Hon. John Hall, Governor of Ore¬
Trauerman, Secretary and
gon.
•
.
,
.
an
effort .to "make
outstanding
tion.
.
.
every
meeting
the
ad¬
ministrators
might
arrange
tc
assemble in Chicago and take the
same
mittee.
Association Convention July 19-22
There has been some activity to¬
In
7;y777
■
the
bert
State
;
of
W.? James
!"
Delaware,
Al¬
train
,
Attorney
General, replacing C. J. Killoran.
Mr. James has been appointed a
ward' the
member of the Membership Com¬
write
mittee.
to
Association
The
\
is?; the
following committees have
been; appointed to carry out the
work of the Association at the
!
Nominating
this
Committee—Edwin
M.
Daugherty, Chairman, Cali¬
fornia;
D.
D/ Murphy,
ViceChairman, South Carolina; Poyntelle Downing, Illinois; Clarence
for
the
obtaining of special
If any desire to joh
it
is
suggested
the Investment
to
of
cars.
party like
that they
a
Bankers
America, 33 South
Park Street, Chicago, Illinois.
It is recommended that travel
be
for arrival
arranged
land
Portland meeting:
Portland
in
Port?
Sunday, July 18.
This
permit registration in the
on
will
afternoon of the 18th and the get¬
acquainted,
ting
facilitate
which
would
the
starting of the pro¬
the first thing on the morn¬
gram
H. Adams, Connecticut; Robert F.
ing of the 19th.
Brown, West Virginia,
The tentative program of the
Portland meeting is as follows:
V
Resolutions Committee—John F.
Hueni, Chairman, Michigan; John
L. Carter, Arkansas; Thad Eure,
North Carolina; J. Myron Honigman^ Pennsylvaniai Ti C; Thomp¬
son, Wyoming.
*
•.J
'
souri;
Goorge
F.
Richardson,
Kansas; William Cv King* Vir'
ginia.
the
.
V
,
-S
7
afternoon ' and
in
evening.
Monday, July 19
Morning session will be devoted
to the usual convention-opening
proceedings for about one hour.
This will be followed by about
thr^e, prominent speakers.
it is
Nooxl-t- LuncheonAddress of
the .Nominating welcome.
Response. 7 An f out¬
„
Under
1
;
Sunday,; July IS
Registration
.
',!Auditing
Committee.~rM.> D.
Campbell, Jr., Chairman, Mis¬
j
•
Small «in size, but
constitution
mandatory
that
Committee
of
five
members
be
convention.
In
; The entire
afternoon
confined to open forums
selecting
committee due
been given of
the geographic location of the va¬
this
consideration
has
rious members.
cial and industrial
will be
covering
all of the securities subjects de¬
sired to be discussed.
A definite
unusual opportunities to its citizens, its busi-
this
'
Brown Re-Elected
'
;'
Evening—Social hour and din¬
"{ '•'( i.
f
ner.
has
been
elected
ident
MD.-J.
Mackubini
Legg
On "Tuesday- an
be had
re¬
A
Stein
J.
&
<
J.
Dorsey
Brown
Governing Committee for
two-year terms.
Governing Committee will
June 14 for organization and
of
'' '•
■*»,/.
'
*'/?'*• *'77..' •'**<
7
v
*
1
»
*«"
'• v'*; 7
:L'>1
'.I.
ings 4and
other -officers
of the
new
Loan
public
f'r-'
/
f
!v
r'.
,'j
"•
•
'
<
of
servant
/
v
t
''3
\
i/t
s■'
;
*v>
-
<
'
'i1
i
\'
-
"
'
V
4?
•
v.'v*^j••"v
1
.
contributions
to
proud of its
great state, is
a
'.-r-'.
1
the
'7
•
.
^
>■
•-
*','.;.7:0'Air'•7."'
'i'V1:.)..:- k1...'y.
*7'
r-',\
••
'■
'*
-
,v
.
-7 v:;'
/
;''j
•
"
••
1
t
-'-»#■/•*7*'-7
,".--1
/
v
.*«
residential, commercial
r
and industrial welfare of New
Jersey.
'
•
Noon—-Luncheon
torium of the
the
at
audi¬
Equitable Sav¬
Association
-as
guests of Mr. Ralph Cake, Pres¬
There will be a luncheon
ident.
of
speaker
i : The
election
-y
\
•
Wednesday; July 21
portant messages.
also re-elected
meet
-
We
late
a
[Morning-—Several very -good
speakers will bring :.us some im¬
a n d
Walter,- M.
the
salmon cannery.
return to Portland in
yjy
&, C a.,
to
'r
,
;'
naval
-
Miller
were
the
afternoon'or evening, 7
Boyce;
W.
Carroll Mead,
Weilepp,
include
also
base and
Will
Bros.
77 '^
' \t
*•.
'•>T;"-.rv.';
^" ,l
•
Public Service Corporation of New Jersey, the
We will be addressed
.:-*•
tr ong,
Mead,
will
This
,
r m s
-'
'
motoring to Astoria, Ore¬
will be taken on a conducted tour
of interesting and historic places.'
cutive
(Edward
i
J
a very able speaker at the
luncheon program. After that we
to
third
term.
\
:
'
r
4
■ *
i
and its manufacturers.
>r\ 7 "
>
'
by
Ex-
c o n s e
.'*7"d'
V
*
r
''l' '-V.'V* V/
1 "
gon.
for lunch.
the
a
'
We will be guests of the
Astoria Chamber of Commerce
Co-
change,
serve
all-day trip will
Dorsey
Baltimore
Stock
V
v..
jl*:v-;-c77777' 1'-
&
Pres¬
of
/"•
nessmen
Tuesday, July 20
Head of Bait. Exch.
BALTIMORE,
commer-
growth, New Jersey offers
v
program will be arranged for
Brown,
large in residential,
standing speaker will address, the
appointed prior to the convention.
Mr.
outstanding
Cake will take
ducted
num
tour
of
us
their
on
new-
ability.
a
con¬
alumi¬
building, the first of its kind
'''
i- y ^
" '
Exchange.
in America.
Kenneth Johnson V.-F.
be
Of
Evening—Social hour and ban¬
quet followed by a colorful pro¬
•Afternoon
Indianapolis
Bond and Share
INDIANAPOLIS,
Corp.
IND.
—
Ken¬
S. Johnson has joined In¬
dianapolis Bond and Share Corpo¬
ration,* 129 East. Market Street,
neth
as
Vice-President.. :=He; formerly
conducted
hisj^wh --investment
business in Indianapolis under the
name of Kenneth S. Johnson
firm
&
Co.
the
Session
executive
This
session!'
will
of
Association for the members.
gram.
■
„
;.
.;
.v
-
the
7
'-!
Thursday, July 22
-
-77
This
complete day will be de¬
voted
to
a
trip to Timberline
Lodge. K A conducted tour will be
had.
A luncheon will be served
at the Lodge..- Each will then be
given a ride on • the. ski .lift.' 1.;We
will return to Portland in the late
afternoon.
'
-
' V
,
v
7".
All guests are invited to attend
Committee,
Hudson,
Maurice
by some
that representatives of the indus¬
member of the Membership Com¬
of
Adminis¬
William C. King, Director of Se¬
suggested
try in' the eastern part of
country and also securities
nom¬
Governorship
trators.
,
Walker,
'
volving the securities business.
Carl J.
Association
for
Oregon.
t
Oregon; Edwin Daugherty, Cali¬
Truslow, President, New
fornia; E. F. Haworth, Idaho;
Exchange.
- '
\
Ralph Cake, President, Equitable John J. Holmes, Montana;, Law¬
Savings and Loan Association, rence Taylor, Utah, and George C.
Portland, Ore.
Starlund, Washington, are exert¬
speakers who will appear
deliberations' of
Bankers
In¬
York Curb
the program and bring
impor¬
tant
inee
Collins, President,
15
Francis
list
the
Douglas McKay, Republican
Emil Schram, President, New
.York Stock Exchange.
and optional for the ladies.
The
Mining Asso¬
partner of Dean
Witter & Co., San Francisco.
W. G. Paul, President, Los An¬
geles Stock Exchange. '
to
of
the
of America.
social,
informal
H.
vestment
and dinner
trips
of
ciation of Montana.
Astoria and Timberline Lodge.
con¬
that the committee members
sary
It
Committee.
State
opening of the
then
devote their time
Louisiana, J. S. Brock is the
Banking Commissioner of
new
It
attend
functions,- including the
Type
Heretofore, the Resolutions and
Auditing Committees have been
Oil Securities Committee
tional Association.
to
recreational; luncheon
pointment of William E. Stapp as^
the
Treasurer
except the
executive meeting on Wednesday
vited
,The
'
sessions
afternoon which will be confined
to members.All guests are in¬
Committees; Convention Plans
several
the
of
PVBLICEWSERVICE
this
conven¬
16
THE
(2536)
COMMERCIAL
Profits Lost by Neglect
Of New By-Products
management and the research de¬
partment are suddenly asked what
has happened to them.
When the
furore is over they can always go
back to that shelf with the clean
bottles and say, "Well here it is,
we
knew about it, but we just
By HOWARD E. SMITH
didn't have the time."
Director, Ceiitro Research Laboratories, Briarcliff Manor, N. Y.
This
present ma¬
could profitably mami-*
will never see the light
Personnel of industry's research organizations are too busy
In the race to meet consumer demand, and improve
jor lines, many new products that industry
facture from by-products of their research,
of day.
to
explore
possibilities
the
is
scientific
ing
chemicals could
of the
far-seeing industries
turning over these chemicals
are
more
and
compounds to outside inde¬
pendent laboratories for research
and
development to determine
their
practical
uses.
However,
there
exists
huge economic
loss through failure to
explore
these by-products potentials.
now
a
The oil and other industries
fertile
fields for
are
going
urgently on specific problems and
projects. They just don't have the
time necessary to screen some of
for
usually they
chemicals
these
for
possible
and
uses.
compounds
A
and its technicians can
this
much Y and
>
laboratory
only do so
for
products.
extra
research
might prove a boon to the
industry often is slighted.
It is at this
this
is
development of
the present
side
At
due
the
to
that
fact
the research laboratories
and
re¬
personnel on these unknown
undeveloped chemicals.
In
these
all
shelved
specific
cides,
probability:
use
chemicals
such
as
insecticides,
or
of
many
have
for
or
turned
search personnel are so busy with
immediate
problems that they
cannot always spare the time or
a
fungi¬
back to the client's labor¬
atory for further study, and the
independent laboratory will once
again go back to tackling the
thousands of bottles
Many
on
industries
the shelf.
have
found,
much to their chagrin, that sud¬
denly fa
competitive
company
with
emerges
ing
a
about
product
new
by-product
a
knew
expellents,
who
have
time and
years
which
The
ago.
us¬
they
top
COMING
as
offering of Public Utility Securities
Club, Montclair, outing at the Inverness Country
ViV} .v, Club.
:
'v;;.
,
Association of Securities Admin¬
25, 1948 (New York City)
Bond Club of New
York Annual Meeting at Sleepy
Hollow Country Club, Scarborough-on-Hudson, N. Y.
glad to discuss
the present market for such
Investment Field
June 10,1948 (Minneapolis, Minn.)
Twin City Bond Club 27th An¬
National Security Traders Amo*
station Convention.
Investment Bankers Association
1948 convention at the
Beach Hotel.
i
at the White Bear Yacht Club.
June 11, 1948
(Atlanta, Ga.)
Georgia Security Dealers Asso¬
ciation annual outing and dinner
And
V
George
Outing Held
J.
Leness
on
Merrill
of
June 4; Leness Elected
Lynch, Pierce, Fenner
& Beane
at the Druid Hills Golf Club.
June 11, 1948 (Baltimore, Md.)
Bond Club of Baltimore annual
y
outing at the Elkridge Kennels.
June 11-12-13,1948 (Los Angeles)
Security Traders Association of
Angeles Annual Spring party
at Arrowhead Lodge. « ;
Los
June 11, 1948 (New Jersey)
*
Bond .Club of
nual
New Jersey An¬
Field Day at the Montclab
Golf Club.
lune 11, 1948
(New York City)
Corporation Bond Traders Clut
Spring Outing and
Dinner at the Wingfoot Golf Club
Mamaroneck, N. Y.
)i New York
meeting held at the conclusion of the Club's Field Day at the
Sleepy Hollow Country Club June 4. He succeeds T. Jerrold Bryce
June 11, 1948
(Pittsburgh, Pa.)
Club of Pittsburgh An¬
Bond
of
Spring Outing at the Chartiers Country Club.,.
12, 1948
Bond
Club
of
Chicago
Country Club.
(Canada)
Investment Dealers Association
of Canada 32nd Annual Meeting at
Richelieu, Murray Bay.
;
of
St.
were
you
with
position. Similarly, 4
glad to place at
,
your
the
Board
Austin Brown of Dean Wit¬
&
& Co.
;•
t
(St. Louis, Mo.)
Robert
Municipal
Dealers
Outing at the Norwood
Trust
E.
\-v .>•,:; ;;>•
v1 •
,v.*;;
.
Governors will be
Broome
of Guaranty
the President's Cup
of 73. C. E. Grasmueller (Lazard y Freres & Co.)
won the Candee Cup with low net
&
Co.)
score
(Boston. Mass.)
Forgan
Christe
match play
against
Co.)
&
in
Cup
the
par.
,
record
Street
number
to
—
attend
deserted
the
Field
Wall
Day.
(Philadelphia, Pa.)
Lowshe,
station
Shields
&
Co.;
Fred
to
wagon
a
Ford
Brand!,
T; Jerrold Bryce, President of the
Dillon, Read & Co., a Pontiac to
Philadelphia Securities Associ¬
Bond Club, and Charles L. Miorse,
annual outing at Llanerch
Louis D. Rieder, W. E. Hutton,&<
Jr., Chairman of the Field Day Cb., and a television set to Ger-Country Club,. Llanerch, Pa. V
Committee, headed the Wall Street aid B. West, Stone & Webster Se- <;
June 21,1948 (Omaha, Neb.)
'•
Investment
Nebraska
Bankers
delegation bound for Scarborough,
curities
Corp:y;Y*j. i')■}/■
Upon arrival at Sleepy Hollow,
the guests were
TRADING MARKETS IN
greeted with free
•copies of the "Bawl Street v Jour* ^
:
nal," the Bond Club's famous pub¬
Public Utility Preferred
lication lampooning
,
The Public Utility Stock Guide on request
politics.
Distributed nation¬
ally this year and also on sale in
the
Merrill Lynch. Pierce, Fenner & Beane
set
financial
a
new
district,
high
mark
lation.
G. A. Saxton & Co., Inc.
i
70 Pine Street,
WHitehall 4-4970
New York 5, N. Y.
Teletype NY 1-609
the outstand¬
ing events in the world of finance
and
and Common Stocks
Offices in 96 Cities
(Glore,
the
took
F. Ken¬
Enos Curtain (Blair & Co.) and
Stephenson
of
Goldman, M. S. Glidden, Jr. (Glidden, Mor¬
Sachs & Co.; Joseph A. Thomas ris &
Co.) won the tennis doubles
of Lehman Brothers; Clarence W.
against
Benjamin
Buttenweiser
Bartow of Drexel & Co.; Raymond
(Kuhn, Loeb & Co.) and Marvin
D. Stitzer of Equitable Securities
L. Levy (Lehman Brothers).
Corp. and G. H. Walker, Jr. of
Willard Lynch, W. C. Langley &
G. H. Walker & Co.
Co., was awarded a Cadillac; a
More than
500
bond
men—a
Mercury was awarded to Emmett
j .'.V
STREET, NEW YORK 5, N. Y.
of 65, and Paris Scott Rus¬
Jr;
Co. of New York;
v
Underwriters and Distributors of Investment Securities
Brokers in Securities and Commodities.
won
with low gross
ation
^
I V
.
(Bear, Stearns
neth
Municipal Bond Club of Boston
annual
outing
at the Country
Club, Concord, Mass. To be pre¬
ceded by parties at the Hotel
Statler on the evenings of June
16 and 17 from 9:30 p.m. until
midnight. "
98 offices.
<
V. Theodore Low
sell,
Continuing
Louis
18, 1948
of
Co.; Harry C. Clifford of
Kidder,
Peabody
&
Co.
and
Thomas T. Coxon of Hallgarten
Summer
Party at the Plum Hollow
Annual
members
of Governors to serve three years
ter
Detroit
Y., for a full day of sports and
entertainment.,
N.
,
Elected
(Detroit, Mich.)
Club
Hemp¬
Several
hundred members
of
hill, Noyes & Co., who was Chair¬
man of this year's Field Day Com¬
the club took part in the annual
mittee, was elected Vice-Presi¬ golf
tournament.
Divided into
dent, succeeding Alfred Shriver of three handicap classes, the play¬
Morgan Stanley & Co. C. Cheever ers competed for three Bond Club
Hardwick of Smith, Barney & Co. trophies—the Ex-President's Cup,
was elected Secretary and William
the Candee Cup and the Christie
B. Chappell of The First Boston Cup—and for more than a dozen
individual prizes.
Corp., Treasurer.
■
Annual Golf Party at the Acacia
June 12-16, 1948
President for the past year.
Charles L. Morse, Jr. of
(Chicago, HI.)
Traders
Clark, Dodge & Co. who has^
been
nual
Tune
C. Cheever Hardwick
C. L. Morse, Jr.
George J. Leness
'
Hollywood.
elected President of the Bond Club of New York at the annual
was
disposal the distribution V-'f
facilities
70 PINE
5-10, 1948 (Hollywood, Fla.)
Dec.
Bond Club of New York Annual Field Day
nual Golf Tournament and Picnic
June 18, 1948
whatever information you need about
our.
Nov. 15-18, 1948 (DaHas, Tex.)
New York Stock Exchange Golf
...
*4"
issues.
securities, and provide
■of
istrators at the Multnomah HoteL
Association 49th annual golf tour¬
nament at the Winged Foot Golf
Hills Country Club.
municipals, railroads,
and other £prporate
•'
July 16,1948 (Toledo, Ohio)
Bond Club of Toledo
annual
Club, Mamaroneck, N. Y.
In
June
■
Golf
June 29,1948 (New York City)
EVENTS
June 17, 1948
Underwriters and Distributors in the
shall be
Montclair
of New
Municipal
■
Golf Club.
closely identified
we
Club, Haddonfield, N. J.
23, 1948 (New York City)
Investment Association
,
apologetic shrug after it is
too late.
Golf
have been
their statistical
June
June
an
Bond
with you
Philadelphia Annual Summer
Outing at the Tavistock Country
the shelf before hand rather than
with
June 15,1948
We will lie
at
1948 (Cleveland, Ohio)
Bond Club of Cleveland spring July 19-22, 1948 (Portland, Oreg.)
Annual Convention of National
outing at Country Club.
annual election.
as
Outing
June 25,
14, 1948 (New York City)
Municipal Forum of New York
well
Annual
Woodland Golf Club.
geared to do this work, then
perhaps they will be taking down
those bottles of opportunity from
are
June
as
of
29th
N. J.
Manoir
We
July 9,1948 (Philadelphia, Pa.)
Investment Traders Association
ciation
which
point that the out¬
independent research lab¬
time
the
majority of products oratory can come to the aid of
marketed by oil companies are
the industry.
No longer is it
used for the development of en¬ necessary to sacrifice
time and
ergy, both motor and fuel.
In the personnel from the normal process
The regular important
process of improving their prod¬ of work.
ucts there are developed many work continues but the indepen¬
chemicals
and
dent
research organizations are
compounds.
In
most cases these chemicals and patiently screening these chemi¬
cals.
When a possible use is dis¬
compounds are placed
upon
a
shelf in clean labelled jars and covered they can continue to ex¬
then forgotten.
The main reason plore
its merits or it can be
new
June 22, 1948 (Boston, Mass.)
Boston Security Traders Asso¬
laboratories
a
kept
are
Cleveland Security Traders As¬
sociation summer outing.
York second annual outing at the
applied practically in industry, no
doubt many new products could
be developed and old ones im¬
Many of these unused chemical
compounds are gathering dust in
jars on laboratory shelves. Given
at a
more
economical
research attention and study by proved
level.
y;yj^
Qualified scientists many of them
could be turned into profit-mak¬
Actually neither the research
ing valuable insecticides, fungi¬ departments nor the research per¬
cides, medicines, dyes, etc. Some sonnel can be called to account,
July 9, 1948 (Cleveland, Ohio)
Club.
used for and
be
and
quite general prob¬
If
industry will farm out such prob¬
lems to the independent research
of&
dyes, medicines, plasticizers,
modifiers, etc.
If time could be
of taken to find out just what ^hese
investigations
frolic
Field Day at the Omaha Country
r
thousands of chemical compounds,
the by-products that accrue, dur¬
their main products.
Thursday, June 10, 1948
annual
Association
lem which industry can meet.
Mr. Smith
points out industries are losing profits because of neglect
to develop new by-products, due to present stress to supply con¬
sumer demand for existing goods.
Sees outside independent re¬
search laboratories as aid in developing profitable by-products.
FINANCIAL CHRONICLE
&
the
in
circu¬
y:";vYYYy. rY.Yy-y
Frederick Peirce Dead
Frederick
Peirce, President of
Co., Philadel¬
phia investment firm, as dead.
Frederick Peirce &
<
paper '
THE
167 : Number 4706
Volume
COMMERCIAL
&
CHRONICLE
FINANCIAL
(2537)
have very
large sums available to
it, rums which far exceed any of
these which are presently avail¬
World Recovery and World Bank
able to the International Bank and
they
By JOHN J. McCLOY*
used for
to be devoted only to the
are
relatively small
though important section of
the world.
It is naturally asked
of
recovery
Asserting Europe's productive capacity, with outside help, is not far from recovery plateau, if present
is maintained, World Bank executive contends chief war damage was paralysis of nerves and
sinews of trade rather than property destruction. Says U. S. must assume leadership in remedying
cooperation of World Bank in recovery plans.
resulting from excessive nationalism.
a
even
progress
these ills, and assures
cue-
it is necessary to obtain in
order to make good on the Bank's
own obligations!
It can never be
President, International Bank for Reconstruction and Development
;
call must be met in whatever
what role the International Bank
intends
Decries economic distortions
tion
fill during
to
of
the
the
European
opera¬
Recovery
Program.
rency
lending
there is
Thus
purposes.'
great world
a
guarantee
fund behind the obligations of the
Bank, and in addition there, are,
of course, as further security what¬
and
capital the
accumulate
in
the
of its operations. Roughly
reserves
ever
Bank
may
course
speaking, the Bank has had avail¬
The
question I
am
frequently asked is whether I believe the European Recovery Pro¬
end of the four-year period Europe
gram will work; that is work in the sense that at the
will be able to fend for itself without further appeals
"Though
in
I
position to
answer
this
question
not
as
it
is
/probably
a
many,
-fair
fects
re
is
who
If at
farmer
sponsible
in¬
part of an
ternational institution
voted -Vto
the
figures which pur¬
I hav* seen
to
that the
program
will succeed and those which pur¬
prove
port to prove that the sums are
grossly inadequate.
Personally, I
;do not believe either conclusion
established
be
©an
statistics.
On
,
his
franc
In
by figures or
other occasions I
liave
trade
on
and de¬
If restrictions
for sale.
removed, if borders
are
to
man
and
cross
©f Europe
©ne
as
it was in 1945 that
is encouraged to believe that
aid
continued
be
•
as
the progress could
great in the next three years
it has been in the past three the
as
me
clime all hopes
every
attached
were
the
to
power
and
the influence of the United States.
I said and felt then that the pres¬
be removed from ovbr Europe and
what it
can
do
The Interna¬
an
institution whose
stockholders consist at present of
the members of 46 different coun¬
Its authorized
tries.
capital is $1G
billion and its subscribed .capital
to date is something over. $8 bil¬
lion.
The capital subscription of
of
each
into
countries
the
three
is
categories.
divided
The
those
have
who
chief
the
re-;
Europeans and Americans
determined to make it
gram,
are
work with what
they have I
No nation could
/
ture to predict it will work.
and
desires.
this
those transports have
ven¬
With
and uniquely
external aid
unprecedented
form of
generous
boon there is
a
which
its amount
to
as
left within
area
no
cavil
mayproperly
one
either
or
as
to
minor crudities of administration.
War's Chief Damage
The war's chief damage was in
destruction
We
I venture to suggest,
of
im¬
these
all
can
all be
sure
that in the
standard
predetermined level or
of living will ; not be
achieved
but
end some
is not
this
the
an¬
Time alone, without any
States, and elsewhere throughout swer.
the world the production levels external aid, would probably bring
which Europe can reach and sup¬ about some form of economic ad¬
port with the help of the Euro¬ justment but every indication * is
Recovery Program are not
vastly above her present levels
as
sometimes we are prone to
think.
I do not mean by this to
pean
£o
imply that Europe is close to her
production - figure
maximum
all time.
for
For to survive she must,
that if all
in dollars.
or
The next
18% may be paid at the option of
the country involved in its own
but it
only be used
for lending purposes with the con¬
sent of the subscribing country.
The remaining 80% of the capital
subscription including that of the
currency,
can
United States is callable only if it
should ever be necessary to meet
left to time to ad¬
Since then
erated;
fortunately
United
States
painful
without disaster.
the
to endure
I firmly believe
Program
European Recovery
will
greatly
when
an
the time
accelerate
adjustment
can
be
and
signs
accumulating
that adjustment will reach
a
war
level
only endurable but one which
will afford
real opportunity for
plateau if with outside help
her present rate of progress can the continued economic and cul¬
be maintained.
A moderate but tural development of Europe.
But
above
all
these,
the
displayed them.
the
and
-
of
racial
for
those
McCloy be¬
fore the Foreign Policy Associa¬
tion, Cincinnati, O., June 1, 1948.
It is obvious that if the Bank is
impression on the
receive
must
its
of
most
it
world
the
of
needs
money
capital subscrip¬
through the
bonds in the various
other than
from
This
tions.
of
sale
its
it
does
capital markets of the world. Thus
far the Bank has successfully sold
1 have indicated $250 million
It has lent or com¬
as
of its bonds.
mitted to lend $513 million
and it
vy";
narrow, na¬
United
States
home
at
Electric
Associated
subsidiaries
its
the
including
pany
prejudices^ in
;■
earnings
v..
V..; ,_,V
are
of
earnings
and
Company
,
Amount
Amount
'
•'
unbalanced with what force
$.61
$.64
deficit
financing
frequently
deplore. If we rebuff international
trade with what persuasion do we
trade
applaud Mr. Churchill's
or
crusade in support of a European
economic and political union.
:
,
In saying this, I. of course, asimprovement in the Ger¬
position so that trade with
sume-an
man
the
German
area
can
be
stimu¬
the next four years will as much
determine
ropean
liable gauge.
There
eastern
and
western
parts of Europe will, agairl take
place and in the long run that we
the
as
the
was
;
materials
a
are
ills
to
were
wise
us any re¬
be
through
on
national
Bank.
the Bank
Very fortunately
and also
the world
has been created
public contemplation
seems to occupy this hopeful role.
This is the European Cooperation
agency
in
Administration.
It
has
and
,
and
highest levels
the
realized
later
this
year
when
generating stations total¬
new
ing 100,000 KW. go into operation.
rate increases
■i/h
.•,}">i''
■■
■ ■ :'
A temporary electric rate increase
.
has
been
York, Penn¬
obtained in
rate
whenever
a
case
is apparent.
will
1,
1946, has
$5,351,200.
to
•'
'*
income after interest,
expenses
and taxes amounted to
$1.02 per share in 1947. Of this, 80c
per share was paid in dividends and
the
balance, together with other
funds, was used for debt reduction
Corporate
or
investment in
subsidiaries.
~
"
eighteen-
Company has arranged an
months' commitment with
a
total of $8,000,000.
banks for
f
investments
subsidiaries
in
Investments
were
1947 and
by $470,000 in the first four months
increased by $3,095,000 in
of 1948.
*
financing
subsidiaries!
!
The 1948 construction program
subsidiaries
the
financing
have
sidiaries
expected
is
of
to
$68,600,000. Several sub¬
to
amount
programs
The proceeds of which
together with additional cash invest¬
ments to be made by this Company
under way.
retained by them will
and earnings
construction
the
The
program
and part of 1949.
1948
i.
stockholders
preferred
of
Rochester Gas and Electric Corpora¬
approved
have
SEC
the
and
tion
financing by that com¬
by borrowing up to $16,000,000
banks.
The
SEC's
order
temporary
pany
from
approving this borrowing requires
this Company to increase its invest¬
ment in Rochester by the amount of
dividends which Rochester may
its common stock while sueli
borrowing is outstanding.
any
pay on
("Aelec")
Electric
not
may
the SEC
account
and
on
Associated
effect
of
certain
indenture.
markets.
by the public
the possible
of
Plans
provisions
for
this debt have been
pending
dividends
of the large debt
held
because
also
Company
pay
restriction imposed by
a
of
debt
aelec
the
Associated
because of
dividends
requirements
operating subsidiaries for ad¬
common
stock equity, this
ditional
increases will be sought
good
April,
in
of indebt¬
January
sincfe
sylvania, and this is expected to be
made permanent. Other
gas
and
a
distribution
the part of the Inter¬
of loans
for
cured
at
fuel
ihey have ever been and are still
climbing. Substantial economies will
electric
time when people
beneficient
but
of
prices
v:
Eu¬
billions
.'
:
and
"Wages
y; ';-v
borrowed
reduction
net
In order to meet the
of the
for
1': ,'t-"expenses
felt that all the world's economic
which
the
of
course
today cannot give
ures
another
tween
the
recovery
Congress will or can appropriate
and here again we have one of the
great imponderables of which fig¬
lated to something well above its
that trade be¬
over
edness
finance
alter the situation.
we
urge a revival of intra-Eqropean
war
course,
Com¬
months
was
The
1948.
$15,077,282 $14,443,432
depression conditions could easily
or
the
$1,637,200 during
of 1948, but
by
four
amounted
growth. Of
satisfactory
speak to the world whose
we
reduced
first
$1,050,000
$4,879,408
Ending March:
—
of
,
$4,602,384
Per Share-12 Months
1947
1948
,
—
reduction
reduction
net
pany's debt amounted to $2,959,850
during 1947. Indebtedness was fur¬
ther
shown below:
Months:
Three
First
and
what dishevelled leader.
come
Stockholders
debt
,
the
abroad, in spite of all our own
shortcomings, the United States
remains today a mighty if some¬
do
Corporation
The
Consolidated earnings of the Com¬
v.
spite of the quite malicious propa¬
ganda regarding the motives of
the
(Continued on page 22)
1
the
who
in spite ol
But
re-emergence
tional
present levels and
*An address by Mr.
Bank.
the working capital of the
At the Annual Meeting May 3, 1948
three
too
not
help.
purposes
been mod¬
both
for
as
of
some
haviior of the United States
be
Europe is not far from her recov¬
An increase in east
their
of
part
but in
the main it is the capital subscrip¬
tion of the United States Govern¬
ment which has thus far supplied
for lending
18%
Condensed Report of the President to
would
indicate that short of another
isting gaps.
available
making
General Public Utilities
aspirations
he
improve. But I do mean that based
upon
sheer productive capacity
and west trade would also greatly
securities.
of its
obligations of the Bank itself. This
The
social, economic and political be-
were
reached
substantial ; G e r m a n . recovery
would contribute much to fill ex¬
Bank itself raised through
recovery
just the processes and the result
like all the rest of us, expand and
ery
plus $250 million which the
the sale
There have been
minor instances of other countries
poses
to make a real
overwhelm¬
an
accumulation., of
the
war.
this amount having been
the consent of
the United States for lending pur¬
States,
made available by
in
gold
purposes
capital subscription of the United
2% must be paid by all countries
hope by it¬
ever
self to fulfill such
ing
Judged in terms of out¬
however, that with production in¬
creasing in Western Europe, in
Eastern
Europe,
in the United
lending
for
it
$1 billion.
This is made
up of the 2% capital subscription
of all the countries plus the 18%
first
put and physical capacity, today's
Per Share—
/ $1.98
$1.90
The role of world
leadership
figures show that Western Euro¬ ponderables, in the paralysis of
the nerves and the sinews of trade
The decline in first quarter earn¬
is not a happy one, particularly
pean nations have, as a whole, ap¬
rather than in the -destruction of
in an election year.
It exacts a ings was due principally to January
proached if not exceeded their
prewar levels.
They have done property. Property itself can certain behavior of the one who storm losses, to smaller hydro gen¬
this in the face
of some very usually be replaced, repaired and occupies it. In this perturbed world eration in January and February,
restored in
a
surprisingly brief of
severe «handicaps;
a
much dis¬
inflation, restrictive trade regu¬ and to higher fuel prices and other
turbed
political
condition, bad period, particularly if external aid lations, unsound government fi¬ operating costs.
is at hand to help. As an example
croos and an extremely deep cut
nancing and fiscal systems it is
sales
of this I think one can point to
in German production which prior
extremely important
that the
the
restoration
of' the
French United States with her predomi¬
Prospeets are good for continuing
to the war was the hub of Euro¬
pean
economy,
indeed, far too railway system after the war. nant influence and leadership in sales of gas and electricity at a high
forms
of
international
aid level. Prices of coal and oil for
much so considering the warped Throughout Europe there are ex¬ all
amples of plants which though should continue to furnish an ex¬ domestic and industrial use have
purposes to which Germany ap¬
rated as totally destroyed or near¬
ample of righteous economic con¬ advanced to a point which gives gas
plied her economic position. With
md electricity at even moderately
the diminution of German pro¬ ly ao by our Air Forces were again duct herself. ;' The United States
at full war capacity today does nothing which is not higher prices a very great competi¬
duction the levels of other Euro¬ operating
within two years of the close of reflected in the chancelleries; of tive advantage and this will, we
pean countries will probably have
the war.
to be higher than they were' be¬
think, further tend to sustain the
every country. If our budgets be¬
fore the
to
around
tige of the United States was terrifyingly high. Terrifying because
so many looked to it for so much.
if
European future would look very
healthy.
I happened to un¬
war
mission which took
a
as
fear
repair which the Marshall Plan affords
his fortunes after disaster, coupled the obvious thing is to take hold
of it and make it work. With such
with some external aid, does bring
great and very definite re¬
sults.
If one could feel that with
United
Just at the
around the entire world. At every
man's indefatigable urge to
very
the
of
can
If the pall of war
2 to 1.
alike,
from the rubble
prestige
shore, and in
■
habilitation since the close of the
nificant advance
At the close of the
was enormous.
dertake
sponsibility for the recovery pro¬
These' represent such a sig¬
the
close of the
physical
capacity, will contribute factors
that no figures can faithfully ap¬
praise. '■
.' TV
The moral is to the physical
ex¬
affected by the power of
are
States
which is the multiplier of
emphasized the really amaz¬
ing strides which Europe has al¬
ready made toward her own re¬
war.
tional Bank is
or
business, in every com¬
in every group we fpel
every
war
trade
recross,
position and the
the leadership.
made easier for the business¬
are
feature
ample of the United States itself.
and
more
Leadership
the greatest influence of them all.
munity,
liver
•:
of
other
one
I refer to the
kets and he will produce
objectives of world recovery such
as the International Bank.
port
French
is
granted but it probably embodies
goods will flow to the city mar¬
John J. McCloy
de¬
the
in
dence
Position
element in this play of forces that
I have rather ignored or taken for
the actual material
given moment the French
again gains some confi¬
a
S.
There
send to Western Europe.
may
a
U.
able
in connection with the European
Recovery Program.
treble
or
to outline
matter
recovery.
machinery which this country
or
question
double
well
may
worth of
the
to ask of any¬
one
important ele¬
to both European and world
ment
imponderables which cannot
be measured by statistics.
There
are
forces or attitudes whose ef¬
well
as
,
equipped
extremely
an
other
indeed
and
ing
redevelop¬
a
of Asiatic trade; the last be¬
ment
Figures cannot gauge that confi¬
dence and there are many, many
than
others,
many
look forward to
can
growth of a sense of confidence in
the European future would put us
in closer sight of our objectives.
better
no
for similar aid from this country.
<S>-
am
World Bank
The
First, let me tell you a little
something about how the Bank is
organized, how it gets its money,
and what its general policies and
objectives are.
For when these
are
known it is a rather simple
of its
of
repayment
held in abeyanee
improvement
in
security
COMMERCIAL
THE
(2538)
18
The SEC Position
on
From
World Bank Bonds
.
questions asked
Chairman of Securities and Exchange Commission
4
members
the
of
committee
yes¬
of
interested
are
whether
question
the
in
bill before Congress would trans- j;
National Advisory Council powers granted to SEC. -Opposes y
in '
provision giving SEC discretionary power to exempt World Bank
bonds from registration.
yi
making
the
sion
representative
has
mittee
bill
R.
H.
to
6443
in
troduced
Senate
the
has
anteed
as
bill
been
re¬
ported out
favorably,
with
modi¬
a
fication
sug¬
gested by the
SEC
w
E. M. Hanrahan
hic h
Ife*.-
YYY
v
had the effect
of
providing for exemption
issued
securities
of
and
only
fully
guaranteed by the International
Bank as distinguished from any
securities issued or only partially
guaranteed by the Bank, as.. is
possible under the Bank's Articles
of Agreement.
;
;
On May 6,
a
full
1948,
statement
letter
a
is
letter
was
the
will
of
signature
record
and
neither
are
in
Further, should
form, become
,
of
its
fact
nature
that
we
rule-making
is
.
clear from
have
the
exercised
bill
both
under
power
We
our
past
have
if
it
amended
of the
Exchange Act to facilitate
distributions of its bonds.
bill
depends,
guaran¬
teed by the Bank in the same Class
with
other
securities 4 exempted
involves
Y;aY
from
relative
sought by the
reflected in
bill
approved
by
Senator
Tobey's committee, would put se¬
curities issued
the
and fully
Securities
Act
of
1933
weighing
considerations
standards
of
han
on
before
the
Interstate
House Cimmittee
and
Foreign
Washington,
merce,
D.
Com¬
we
the
C.,
June
5,1948.
our
-
the
the
bill
the
SEC
discretionary
erations
Telegraph CompanyY
would
be
cisions
■<
'
May 1,1950
-1
■
;
tween
V'-f
Notice is hereby given that The Western Union
Telegraph
Company invites tenders of Bonds of the above issues, for purchase
by it, and that tenders will
be received by the
Company, at
Hudson Street, New York 13, N.
Y., until 12 o'clock noon,
Eastern Daylight Saving Time, on June
30, 1948.
60
Copies of the Invitation for Tenders, which sets forth the terms
relating to such tenders, and copies of the Form for
Tender, on which all tenders must be made, will be
supplied by
the Company upon
request addressed to the attention of its
and conditions
at
the above address.
■;Y-'...''■■' HJ-'
No price
ceiling has been fixed by the Company, and accord¬
ingly tenders may be made at any price.
.Y.YYY'Yt vcY
Y
By the terms of the Invitation for Tenders, Bonds, the tender of
which is accepted, must be delivered on lor
prior to July 20, 1948,
against payment. Interest upon such Bonds Jo said date will be
paid
as part
related
that
the
foreign
to
the
Bank's
disclosure
a
any
do
•would
industry: will
for
are
have
new
-
ful-*
spent
plant
considerably ;
costs, while-new
equipment are valued
spent
manufacturing and other
1946, 4947, and early
on
facilities in
1948,
the Federal-Reserve index
of
industrial production (season¬
ally adjusted) has risen only 6%
from
the
1946
peak
of
183
in
November
(1953-39—100) to the
peak of 194 (in February).
Thus,, it appears that the very
1948
large
output
of
the
plants in postwar as
with
prewar
much
or
the
more
country's
compared
has
years
been
result
of
as
the
fuller
utilization
of
productive
capacity than additions to its in¬
dustrial
facilities.
"Judging
for
the
Y YvV
from
data
corporate
available
of
sector
busi¬
the
bulk of the financial
requirements of business organi¬
ness,
zations
have
retention
dends
of
and
drawals,
r
been met through
earnings, after divi¬
entrepreneurial
from
and
allowances.
with¬
depreciation
According
to
esti¬
mates of the Department of Com¬
merce, retained
profits and de¬
preciation charges of all nonfinancial corporations were about
larger than external sources
of
financing
or
securities in 1946 and twice as/
through bank
large in 1947.1
corporations
loans
In 1946, however,
financed
a
larger
part of their needs through the
sale
of
Government
securities
(which represent in part retained
earnings of the war years) than
in
1947.
and
impressive total represents
merely reconversion and replace¬
ment
be¬
facilities.
of ; wornout
or
obsolete
the
heavy
reliance
current
on
earnings, has been the large de¬
pendence on debt financing. When
tion of
can
pro¬
already
under
guides
study;
with
added
such
throw
our
Acts
powers; issues
in favor
We refused exemptions,
ments of the Secuirties Exchange
To go further would
Act of 1934.
of
require
legislation
yond
us
our
to consider factors be¬
'usual
concerns
which
upon
power, ex¬
perience, and information to make
policy decisions in the field of
foreign finance could we admin¬
might have to be made.
"
We
any
now
have power to exempt
the extent we
ister such legislation with assur¬
that
we
could
administer
securities to
ance
deem it
w-teoiv
lic
would
consistent With the pub¬
interest under the Securities
Wislative function
delegate,
:
it
ascribable
stock
primarily to
the depressed condition which has
prevailed
in
the
stock
most of the time since the
market
summer
of 1946 and has severely restricted
this
source
of funds.
Since
stock
flotations
tend
mon
crease
tained
substantially
periods
of
com¬
during
rising
sus¬
stock
market, if maintained,
may even¬
tually increase the contribution of
this
source
of corporate funds."
■
i
1YU U'\
.
*
,
AA
A-.-
Y.Y* YY
A
■
"A.".;'
.A
:
.
'A
:A-
.-':A;
Y-rAAVAY.;(vy.Y YY: YY'yUY-
A5
t;
'
s
III.
S. Department of Commerce, Sur¬
of Current Business, "Business Fi¬
nancing
in
the
Postwar
Period," by
vey
Friend,
March
1948,
p.
-10.
,
'
'
in¬
to
prices, the recent upswing in the
Irwin
u
v
is
of
example, from the anti-man¬
ipulation
and
margin
require¬
con¬
field
the
for
be done with
Moreover, in
the
exercised
both
the Bank.
we
and of necessity in the staff or¬
ganization
of
the
Commission
Telegraph Company,
York, N. Y„ June 10, 1948.
plans for 1948
the Commis¬ might over-balance the
provisions
sion, .there -would Lave to be con¬ of the Acts we administer.
Only
sidered also the possibility that
by making of the Commission an
material changes in the nature,
agency with sufficient
.
New
it
responsibility
or association member making
the acceptance in whole or in part of the
tender of another person will be
paid by the Company $2.50 per
$1,000 principal amount of Bonds delivered.
Y\
/ <
v
business
result
in
of this
hope of procuring legislation
nection
securities exchange
>
not think
in /this session.
upon
By W. P. MARSHALL, Treasurer.
undertaken)—
well
may
billion
de¬
investors.
set of
association, arrangements must be made for the delivery /of ihe
Bonds, in the event of acceptance in whole or in part of the tender,
by a bank, trust company, securities exchange or association
member, unless the Company waives such requirement. The bank,
The Western Union
the
common
To formulate such
or
delivery
of
original
■'The outstanding feature of the
equipment in the first three cal¬ financing of
corporate capital in¬
endar years after the war.
Much vestment since the
war, aside from
pro¬
and
would require care and
a
basis
lower
requirements
operations
United States
tecting
of the purchase price.
trust company or
$47
enforc¬
and
Where the person making a tender is not a
bank, trust company,
insurance company or member of a national securities
exchange"
such
filled,
gov¬
make
be
to
"If the
op¬
conflicts
program
the
''A'A"/'
5% Twenty-five Year Bonds, due December 1,1951
Treasurer
of
part
obligated to
ing
;
..
the
Allowing for deprecia¬ bond issues and loans from banks
plant and equipment (con¬ and insurance
companies (includ¬
servatively estimated for 1946-48
ing the indirect form of debt
we would be thrown into the field
at roughly 18 to 19 billion dollars),financing
whereby corporations
of international financial
policy. net additions to capital assets
sell
capital-assets to insurance
That is not now our field, either
appear to have been comparatively
companies or other institutions and
by law or by virtue of any spe¬
modest, * particularly in view of rent them on
long-term leases)
cial competence derived
through the growth of population and reare
taken into account, debt fi¬
experience or ready sources of
nancing has far exceeded equity
specific information.
Exchange Act of 1934 to do so. We financing (including common and
Furthermore, unless this sug¬ have a more limited rule-making
preferred stock issues).; For all
gestion is materially expanded
power under the Securities Act.
non-financial
corporations
net
beyond its present apparent scope The
-concept. of public ^ interest equity issues came to approxi¬
or
intention, we would be with¬ under both of these laws
gathers mately
20%
of
total
external
out any guides to the factors
we
its content from the provisions
financing through security issues
should weigh or the weight to
and purposes of those laws and to
be given to various possibly rele¬
and bank and other loans in 1946,
the maximum extent we deemed
vant factors in making the nec¬
it proper and consistent with the and to more than 15% in 1947. ;
essary choices between facilitating standards of those Acts we have
The dearth of new
tyl% Funding and Real Estate Mortgage Bonds,
"
a
overall
equity fi¬
stimulate
perhaps
optimistic appraisal of future
capital needs.
<,
To the extent that the SEC
gram.
of Invitations for Tenders of
due
are
ernment's
com¬
more
consider
Bank's
rising
(Which if main¬
facilitate
and
conditions
Exchange Act
The
en¬
for sustained prosperous
to
Act
unfortunate for
reasons.
of
outweigh the unfavorable
factors.
The
improved
outlook
to give
power
would
we
will
otherwise
seem
or
guaranteed
Under present cir¬
provision
a
develop¬
capital projects that might
some
not
of
and
stock prices
nancing
issued
by the Bank.
be
may
subsequent
increases,
wage
which
Securities
Securities
securities
-,
the
latter
be
fense expenditures, reduced taxes,
tained
to
was
by
should
developments—enactment
which
ways
problems
the
It
On balance, the favorable-
ments.
is
1948.
larged foreign aid, increased de¬
suggestions
from
several
Notice
changed
Congress.
is addressed
the
and
such
-
and
concerns
alternative
cumstances
The Western Union
on
scope
Provision Granting
a
to
exempt
they fall within
competence,
said,
the
after
that
and
have heard and discussed with
meeting
explore the relevant consider¬
as
of
the
all the Interests affected. We will
be glad to help your Committee
ations insofar
by the
Exempt Bank Bonds
respect
law,. That is a problem
for the Congress in the light of
to
recalled,
however,
that
these
figures merely measure intentions
mon
One
eign lending policy against those
the
decline
To the SEC Discretion to
present
♦Statement of Chairman Hanra¬
matter for the
a
the
Decision
have
beyond
statutory
our
relative to the government's for¬
to
,
the
was
bill.
I
as
considerations
Criticism of
legislation
with changes
as
broad issues raised
guaranteed by it. The decision as
to the wisdom of this legislation
The
objections to
no
is
companion Senate
the Securities Act and the Secur¬
ities
the
1948
,
of
Bank,
in
law,
some
However, -the Bank h^s felt that
broad
legislative exemption
is
necessary for securities issued and
my
outlays
..
goes
present -statement.
Bank
capital
strictly in the character of Amer¬
ican governmental securities nor
are
they strictly similar to the
ordinary private and foreign se¬
curities which are subject to our
statutes. We have recognized that
and
mining
Undoubtedly
the
NAC
would the- manufacturing
the United States representative
make such provisions as part of industries, while the rate of ex¬
on the Bank has full veto power
its formulation of general policy penditures in all other industries
over any borrowing by the Bank
remain
in guiding the United States' rep¬ will
substantially
unY
in
this
country and over the
changed, and the railroads are
resentative on the Bank.
making 'of guaranties on loans
That would be emphasized fur¬ expected to spend more than in
sought in this country and that ther by this very hearing—espe¬ any previous postwar half-year
that representative cannot
give cially in view of the questions period.
• ♦
'
his approval except on instruction asked
by you, Mr. Chairman, and
"From the trend of estimated
of the National Advisory Council,
the members of your committee.
outlays for the present year, it
consisting only of representatives The record of this
hearing would would appear that in a number
of
United
States
governmental constitute
significant legislative of industries postwar capital ex¬
agencies.
•
■
<
background in considering the pansion plans may be approaching
That we have felt the Bank en¬
purposes and
effects of the ex¬ completion and that the demand
titled to special treatment in view
emptions provided for in the bill. for industrial capital goods may
points
it
into greater detail on some
than
in
views
McConnaughey,
with me today.
yesterday made
present
of
part
sent to you
our
the
over
who
we
of
Commissioner
That
bill,
the foregoing.
the
by
"Although the dollar volume of
business
plant and
this is expected to exceed 1947 ex¬
-at the much higher prices of the
penditures, both in the aggregate
postwar period, it would appear
I think it would
be the NAC's and in most industry groups, it is
that the net physical additions to
clear
obligation
and
exclusive expected to run below the rate for
domestic capital
equipment in the
responsibility to provide substan¬ the fourth quarter of 1947. The
tial equivalents to the protections rate of planned outlays
in the postwar period have been of much
smaller proportions than might be
1948
is in
turn
afforded under present law which second half of
suggested
by the ; gross
dollar
would
be
rendered
inoperative expected to fall somewhat below
second
Y
YY;Y "
because of the exemptions pro¬ that for the
quarter of figures. ': a-6;. YY;.
"It is interesting to note, fur¬
vided in this bill which the NAC, this year. The decline in the last
thermore, that despite the billions
as well as the Bank, is
sponsoring. half is likely to occur chiefly in
decisions.
The securities issued and guar¬
The
2636.
S.
Senate
of
mentality
in¬
was
the
consider
the
including securities issued
or guaranteed by
the United States, any State or
subdivision thereof or any instru¬
knows,
that the NAC
us
to
power
"Monthly Review'-a.
>, ;■<
\
following conclusion duced
investment
the
during
regarding outlook for future ex¬ depression years.
When further
penditures
on
new
plant
and consideration is given to the fact
equipment:
f
;
a Y
Y-< that depreciation is calculated on
to' the
comes
investor, not only from
point of view of disclosure
but also of safety, in making those
Securities Exchange Act
securities issued
companion
full
the
analysis,
Luxford
and
American
of 1934;
As the Com¬
a
the
and
Black
have indicated to
International
Bank.
Messrs.
"Monthly Review of Credit'and
Conditions" of the -Federal Reserve Bank of New
York,
analyzes the postwar capital outlays in domestic industry and present
capital re-equipment and expansion programs. As a result of its
reading of the Bretton Woods
Agreement Act and the testimony
of
be approaching completion,
may decline after 1948.
may
capital goods
Business
Our
the Bank.
on
plans in number of industries
The current June issue of the
which
own
here at the invitation of your
am
Falling Off in Capital Outlays
and demand for industrial
guide the conduct of the American
Committee to comment on
H. R. 6443, a bill to amend the Securities Act of 1933, the Securities
Exchange Act of 1934 and the National Bank Act to provide exemp¬
tions from these laws for securities issued or guaranteed by the
I
10, 1948
Federal Reserve Bank of New York reports postwar capital expan¬
National
decisions
the
Thursday, June
Predicts
your
Advisory Council will be con¬
cerned with tfte American investor
Chairman Hanrahan says present
fer to
the
CHRONICLE
terday of Mr. Bladk it appears that
some
By EDMOND M. HANKAH AN*
& FINANCIAL
.
['
i
.Yv/;lJY
t
YY
•
•
•
.•
Y c
tY
v
i
'.A:
>
Volume 167
Wide
Number 4706
THE
COMMERCIAL
strably
Diversity in Wage Changes Found by
;>Backman
k"'v<''
■:
"
;k:
Free Economy I
•
"Uniform wage
patterns
.
either
Hali $
Town
"An
3,
Dr.
of
past
changes in
——.
A.
■■ ■■
17%c
hour.
an
Backman
was.
;k,
-
poipted out that
were
im¬
more
thanv wage increases "be¬
portant
conclusively
diversity
cause
everybody
price
reduction
rather
level of real purchasing
is expanded. While some
companies
c o u 1 d - undoubtedly
:aise
wages
without4 increasing
that
if
u n
than
o r m
have
of
c
;k:V' kk
verse
rise
in
and
wages.
fall
in
the
inventions, changes
in population,
differing rates of
gain
in
productivity,
changing
as
price
General
mand, and
with
The
de¬
impact upon differ¬
ent companies and different in¬
dustries.".; *
'
•,,
i A special study made of the
postwar
showed
wage
one
movement
15.8 million production work¬
that
in
It showed
only
3.7 million employees
industries received an in¬
43
of
crease
which
I71/2C
would
to
the
cover
national pattern.
proximately
20c
six
There
an
so-called
million
ap¬
workers
the 49 industries in which hw
in
creases
hour
~
were
.and
wbrkers
>a:
in
than
more
similar
20c
an
oi
industries
the 61
number
ex¬
from
the
in
Chancellor.
Chase
the
marketing.
.
York
chological side of the
do
pot
yet
surveys; we
fully understand the
which slight changes
by
wording of questions
process
in the
the
of
Strong
Honored by N. Y. U.
New York Stock Exchange Presi¬
rising prices^ while. Other
popularity, but there is
no
Association
is the
on
surprising warmth of feel¬
ing for Eisenhower despite his dis¬
avowal 'of candidacy. There has
been no such popular enthusiasm
for a man in a long time; his sup¬
port
comes
from
all / groups—
The
wide
made
by
Mr. Roper's
orga nization
showed
that
young and
Democrats,
if the election
we re
borers.
being
held
who
today,
Dewey, MacArthur,; Stas-
would
Republicans and
businessmen
is
the
get
from
la¬
only k per son
more
union
and
votes than
labor.
His
non-partisianship is most popular
with the public, who this time
denberg would
each ;
to get
old,
He
Truman
and Van-
sen
Elmo
to
seem
Roper
be able
better than 40% of the votes
will
desire
a
candidate
who
rise
This
above ' party
politics.
atitude also helps Vanden-
compared with less than one-third
berg,
because of'his "statesman¬
for
like
Truman- and
approximately
6% for Wallace; the remainder of
the
voters
However,
would
still
undecided.
President
Truman
are
get 41% of the votes in
a
contest against Senator Taft, who
attract only 30%
jOf the
would
votes.
Similarly
defeat
33%.
>,
A
Governor
/k-.; k
Truman
Warren
would
36%
to
,
factor likely to enhance the
an
extremely lively campaign is the
tendency toward wide swings in
Truman's
popularity,
both up and down. ' At the present
he
appears
approach" to foreign policy,
vote for Wallace is fairly
constant for any combination of
Republican and Democratic can¬
didates, running from 5 to 7% of
the total, which would probably
indicate 2 to 3V2 million votes.
Surprisingly enough, his strength
k The
to
seems
come
both
interest in what promises to be
President
to
be
TJnited
Voorhis
*
States. Trust
Co.
Harold
Mr.
Treasurer
.O.
Strong,
the
presented
former
Univer^
of
,
sity, for the degree with the- fol¬
lowing citation, v
; /
k k
A "Benjamin
of
umnus
Strong,
Exeter
father,
is
United
States
dent received honorary degree of
Doctor of Laws. Same honor also
hand
Trust
less
"
of
President
bility
officer
as
various
affairs
an
of
'
trustee
and
philanthropic,
of
public
religious
organizations, including
chairmanship of the finance
icommittee
Board
of
of
the
National
Presbyterian
Missions.
All
this, and President of the Board
of
Union
Theological -Seminary
jtoo!
Even so, to us and every¬
body else* he -is jut plain Ben
Strong.
Today,
therefore,
we
-
would reiterate our
sense
ify, for all time his status
released
'
John C. Montgomery Dead
Colonel John Carter Montgom¬
ery,
U. S. A. retired, ar)d a-for¬
mer
Vice-President
Boston
Washington,
D.
illness, at the
age of
in
was
his
imore needy
missionary
areas,
First
in
Va.
association
Boston
long
a
66.. His home
During
with
Corporation
Wilson With Conrad, Bruce
(Special
,LOS
to
The
in
work
our
;,A 7.
'
Financial
Frederick
J.
with
Wilson
CALIF.—
has
become
Conrad, Bruce
530
was
Co. and R. F. Ruth & Co.
IN A SYSTEM SERVING
2,193 COMMUNITIES
declining
in
parties,
were
asked
would
vote
fairly evenly from
since, when voters
which
for
if
ticket
they
Wallace
were
not running, 38% said Democratic
and 31%
*
On the
said Republican.
Schram
nities in the States of Indiana,
porkers
and in bossing brokers.
and schooled in Peru, In¬
Born
diana, he advanced his education
as
handyman and bookkeeper in
the
local
and
and
coal
went kon
training
to
-
on a campus
thousand
acres
postgraduate
of some five
where, in epic fashion, he
gathered /. the waters
'into > one
*
and
let
dry
land
>'.<•-i
Hi.
Virginia, •-kz-kk'kkkk",
'k*
'■
;
'%
-■1
-
'
I'
•
k>
/'
/
•'":/■
-
'•:
.k'k
.•
'
'
apeer.'
Confidential inquiries for information regard¬
Vk;
ing; plant ^ites, I natural resources, labor supply,
r
housing facilities,, and other data desired for in-
:
kk dustrialists seeking favorable location should be
addressed to:
From this arable Eden, so created,
he became head of the National
Drainage
commu¬
igan, New Jersey, Ohio, Tennessee, Virginia and
k\. -West'
of Illinois swamp¬
land
place,
2,193
Kentucky, Mich¬
yard,1
lumber
T
t
tp*
X
" w'A
L, L. Davis
Association, and was
called to Washington in 1933 as
chief of the drainage, levee and
irrigation division of the Recon¬
;
.
Director Industrial
Development
struction Finance Corporation. He
to the overall chair¬
AMERICAN GAS AND
manship of that Gargantuan Cor¬
poration in 1939, serving collater¬
ally several other important gov¬
ELECTRIC COMPANY
succeeded
offices,
ernment
later
was
and
here
and
drafted
he
years
SYSTEM
'•V,/-
An
Yet,
incredible
merely
the
He
that
was
changed,
brought
the
here
world's
not
the
the
market
is
man.
incumbency,
a
winning
public
of his
universal
'
%■
^/.
«"
;
.
•'
'
•
-t
V
"
map
the
.•
■
i\
-
.
•
...
"kCOrtlandt 7-5920
:..k-
,
.
New York 8, N. Y.
^
v
■
f
9
t
t
<
■
,
On request, we
conviction
years
\.j.
•
V
1
seven
k '
.
?
largest financial
essentially
utility, and in
k
.
30 Church Street
v.
job
-
by Wall Street,
is.
transmutation.
two
;
subject of election fore¬
casting in general, Mr. Roper said
that such polls did not demon-
Affiliates of this company serve
Benjamin Strong
-
.
'
■
'
1
-*
7
..
■
'
principal natural
our power
resources
•
r
••
C
will send industrialists
in eight colors showing
&
West Sixth Street.
He
formerly with First Califor¬
Co.,
nia
Chronicle)
ANGELES,
PLANT LOCATIONS
Etnil
The
which
Bronxville, N. Y.
one
indelibly with the matrix of
,
after
C.
7
Hospital,
terminated last year he had lived
-
as
by labeling him
Doctorate of Laws."
died June
Alexandria,
long
associated
for
The Firtt
of
Corporation,
at Walter Reed General
who has simply been
own
Arnold
of gratis
jtude for his good deeds/and clar¬
oLour
Vice-
a
&
City.
a
|healthy musical,; educational and
the
of Kirchofer
the
is no
civic responsi¬
in
Arnold, Incor¬
as manager of the New York of¬
fice at 37 Wall Street, New York
corporations,' and
immersed
4-
&
porated, has been elected
(variety of other financial and in¬
dustrial
"
,
Associates, Inc.,- and will continue
Co/," has'
in .the
Gleason
W.
'
Kirchofer
al¬
President
now
Thomas
with
Princeton,
zealous
and
who early mastered in the baok-
k Another aspect of the campaign
poll
hon¬
telling
Statistical
-
the
Public opinion analyst evaluates significance :v
of poljs.
k
k
the
27,
of
ing realm the use of the "seventhe !
league boots of his distinguished
or
Schram and
where he will be in November./
May
-
/
recipient
Vice-Ghancellor
active
ef¬
American
nation
Woodburn
degree of Doctor of Laws,
Benjamin Strong,. President
Whereas several months ago it appeared that President Truman
could defeat any Republican
candidate, the latest poll results now
show that four Republicans might be able to beat
him, according to
Elmo Roper, public opinion
analyst, who spoke before the New York
District Chap<$~
of
that
formerly
the-degree with
University."
Another
•
ter
made
first, importance.
It is a pleas¬
ure to admit "you
today- to the de¬
gree of Doctor of Laws of New
But continuing swings in Truman's popularity promise enlivening of k;
-
is
Gleason,
Schram, you have dis¬
charged your high office with a
keen sense
of public
responsi¬
bility which "is an asset of the
liiiiiiiiii Finds jiiiiwiisie ■
election, campaign,
W.
"Emil
Four Republicans Gould Defeat Truman, Hoper
k.
Announcement
'
At present statistical
need for perfection is in the psy¬
■
Harry
conferred
Thos. W. Gleason, V.P.
Kirchofer Arnold Assoc.
A Thomas
?
following remarks:
was
this
insulated
torate of Laws."
19
orary
through employee-attitude
and'(4) they have many
useful applications in the field of
order in which they are asked can
To the
American economy. We would say
more power to him with our Doc¬
and
.
hour,
were
management
ployees,;; and many white collar
given Benjamin Strong, President
workers, must bear the full im¬
of United States Trust Company
pact of any-inflationary spiral."
k of New York.
*
Dr.
Backman
pointed out that
"Canadian
wartime
Emil Schram, President of the
experience
with.the
cost
of
living - bonus New York Stock4; Exchange, re¬
showed the danger of the wage- ceived
the
honorary
degree of
price spiral when such a bonus is Doctor of Laws at the 116th Com¬
mencement
of
New
York Uni¬
widely used. In fact; it is like a
dog chasing its tail. There is no versity on June 9.
k '
A- Vice-Chancellor
Harold A O.
reason, why wages of all workefs
should change together according' Voorhis presented Mr. Schram fdr
to some common measuring, stick the
degree with the following
such as a cost of living index. .If citation;
vk;k:. A • -Ak.
this
"Emil Schram, Indiana farmer
principle 7 w e r e •> widely
adopted, it would ignore the fact rand President of the New York
that wage relationships are dy¬
Stock
Exchange, he is equally
namic and always changing."
ideft
and
tender
in
butchering
place,
salaried workers.
>
groups, including those living on
fixed < incomes, government em¬
actually there
was a
wide diversity of changes
This study covered 153 industries
ers or
between
responsibilities with most con¬
structive -insight,* to the unques¬
tioned enhancement of the whole
labor
policy is followed,
group, namely wage earners,'
becomes
people
believed
uniform
adjustments of 18 or >18%c an
and
k;
-
t recently announced by
Motors has usually been
that
fects of
conclusively that although
took
„
(2539)
favor, he has discharged his high
surveys;
An
speaker
was
tent
many
hour
increase.
•
unacceptable to labor.
uneven
first
man
articulate;' (2)
they
blueprint the, areas of ignorance
among the people and show which
groups lack
information or are
pointed out that
the tying of wages to living costs yield entirely different results.
other factors fall
many
wage
a
those recently awarded."
public
New
relationships, shifts in
mon
gap
outstanding illustration would be
the railroads if they had
to-pay
any wage increases in addition to
by;■' di~
Indus¬
tured
changes
tries
favor.
accompany
economy
should be fea-
Jules Backman
/?,
a
i
m
through
are
It is in¬
a
candidates,
discouraging the
•
prices, the. fact remains that there techniques have been refined to
many
marginal
firms
and a point where further perfection
marginal/ industries in which a would affect the results by only a
price' increase would inevitably few percentage points. The great
the 1 econ¬
d y n
of
misinformed; (3)-'they bridge the
tiie
;•
power
been
evitable that
hence
general
i t y
characteristic
omy. \
shares * in-the
and
choioe
.Public opinion polls in general,
•Mr; -Roper said; serve' four useful
functions:' (I) they make the com¬
A
■
postwar | increase
"Price reductions
shows
wages
this
less than
examina¬
tion
<
which
1943.
vote.
candidates whom the polls
showed 1 might
win
instead
of
otherwise qualified men,; y
"
June
popular
select
are
free economy," Dr. Jules Backman, Associate
a
the
candidacy of men whom early
polls showed to be trailing, 01*
through inducing conventions to
:
incompatible with the functioning
Professor rof EcoA
momics, New York University School of Commerce,
Accounts^ and
Finance, told the Society for the. Advancement of Management" at
of
affect
the
ence
"';kk A
.
FINANCIAL CHRONICLE
There might, however, be a ten¬
dency for election polls to influ¬
Uniform Wage Patterns Held Incompatible With
l"'
&
a
large
lines and
of the area served.
I
20
COMMERCIAL
THE
(2540)
CHRONICLE
FINANCIAL
&
Thursday, June 10, 1948
for
or
Physiocrafic Balderdash
Bank and Insurance Stocks
"First, the Congress should provide a perma¬
system of flexible price support for agricul¬
tural commodities.
This Week
Bank Stocks
—
City bank stocks, this
Four years ago,
early in June, 1944, the index was hovering around the same level*
In view of this it may be interesting to compare the earnings, divi¬
dends, book value and market prices for the two periods of a number
of leading New York City banks.
For this purpose the following
The American Banker Index of New York
first week in June,
stability of farm income
encouraging desirable adjustments in production.
Earns, per Sh.
Dividends
—Dec, 31—
"A
1947
1943
1947
1943
1947
Bank
Manhattan
$2.01
$2.06
$25.04
$32.24
$0.90
$1.20
,
Bank of New York—
24.42
21.83
358.97
456.06
14.00
14,00
;
Bankers
Trust
*41.80
50.25
'1.17
1.80
M4%
Central
Hanover
4.00
105
■
of
*3,16
Corn
National
Exchange
-—-
99.15
121.46
2.51
36.87
43.52
1.40
1.60
40'/a
*2,73
2.61
*32.98
43.26
21.44
1.80
243%
3.66
49.10
58.81
5.03
49.34
58.12
2.40
2.80
87-66 1,246.60 1,367.46
80.00
80.00
3.61
4.63
106.16
♦First National
Guaranty Trust——^
Irving Trust ——
*16.61
11 49
1.00
126
2129
Trust-
4.86
4.72
2.44
3.25
"Manufacturers
'National
New.
York
Public
i
Trust——
;
6.51
-
fioao
42%
281
360.67
*10.80
12.00
*304
22.90
0.60
0.80
16
60.03
2.00
2.40
52%
48.18
1.00
1.60
37%
42%
96%
"As
92
107/33
85,34
48.30
,
4.00
3.50
54.25
1.50
35.00
35.00
17 %
■>
42%
585
740
'Adjusted retroactively for 20% stock div. Dec. 29, 1944, for comparison purposes,
"^Adjusted retroactively for 25% stock div. Dec. 24, 1945, for comparison purposes.
"Adjusted for 5-for-l Split.
V,<
,J.
v
■■♦Total..'net, .earnings.,:
I
"Adjusted retroactively for 11.1% stock div, Feb. 15, 1947, for comparison purposes.
"On 1,649,922 common shares in 1943 and 2,062,500 in 1947, after conversion of
preferred; no adjustment made,
"
-
City Bank Farmers Trust.
"Adjusted for 2-for-l split Dec. 27, 1945.
1
1
•
'Includes
.
develop
•;*:
-
-
;
"The tabulation brings out a number of interesting comparisons.
For example, net earnings, exclusive of security profits and recov¬
eries, were moderately higher in 1947 than in 1943 for 10 of the 16
banks, as follows: Bank of Manhattan, Central Hanover, Chase,
Commercial, Corn Exchange, Guaranty Trust, Irving Trust, National
V
.
,
s
■
,
,5/
have grown substantially, except in the
of U. S. Trust
which, in 1947, transferred $1,600,000 ($40 per
share) from undivided profits to the Employees' Retirement Plan.
Inasmuch as this growth has been brought about, in the main, bv the
plough-back of earnings, it bespeaks the conservatism of dividend
policy in the majority of cases. The degree of this conservatism can
be appraised by comparing in the table the 1947 dividends with 1947
earnings. In only two instances, viz. First National and U, S. Trust,
is dividend coverage narrow. Dividends in 1947 were > earned more
than twice by the following banks: National City and Public; and in
excess
of 1.5 times by: Bank of Manhataan, Bank of New York,
Bankers Trust Co., Central Hanover, Chase, Commercial, Corn Ex¬
change, Irving Trust, Manufacturers Trust, and New York Trust.
^y£y;V';"
to
now
prise
total
—
y;
y
»
corporations to offset higher replacement costs.
in
1947, based
annual averages,
the year-end
approximated
four million. This represented an
average investment in assets of
$10,000 per employe. The capital
stock was owned by more than
five million registered sharehold¬
ers, a considerably larger number
than
the
total
of
employees.
^
upon
the article:
:
y
"The
sharp rise in plant and
equipment costs has created in¬
creasingly
acute
problems
for
business* since the
war
in financ¬
ing the record program of repairs,
improvements, replacements, and
expansion of productive facilities.
Many corporations in their 1947
annual reports devoted consider¬
able space to these problems, and
cited
figures showing replace¬
or
around the
above
same
rate for 1948.
needed to build
■;
INCORPORATED
67
WHircHAU. 3-0782
Walt Street
NY 1-2679
BOSTON 9
CHICAGO 4
LOS ANGELES 14
SAN FRANCISCO 4
10 Post Office Square
231S. LaSalle Street
210 West Seventh Street
Russ Building
Michigan 2837
YUkon 6-2332
LA-1086
SF-573
1
PRIVATE WIRE SYSTEM CONNECTING: NEW
YORK, BOSTON, CHICAGO,
CLEVELAND, PHILADELPHIA, ST. LOUIS, LOS ANGELES, SAN FRANCISCO
TELEPHONES TO: Hartford, Enterprise 6011
Portland, Enterprise 7008
Providence, Enterprise 7008
Detroit, Enterprise 6066
,
holders
or
purchase simi¬
against earnings
an
causes,
overstatement
of
in
net
a sense,
income.
What happens is that business is
selling out piecemeal its low-cost
productive assets and taking the
'profit' into operating income.
"At the same time, the carrying
of fixed assets in the balance sheet
own
in
stock
more
than
these
of
companies, many a
registered shareholder is a fi¬
nancial
institution
or;
nominee
holding in trust stock for numer¬
one
■
lar assets today.
This inadequacy
of depreciation currently charged
beneficiaries.
ous
"Although
able
for
avail¬
means are
no
accurate
an
estimate of
how
present-day costs of plant
equipment of a large group of
companies such as this compare
and
with
the
book
values
which
at
they are carried on the balance
sheets, an adjustment of the latter
figures by changes in the index
of industrial building costs com¬
piled by the 'Engineering NewsRecord' should afford
proximation.
a
useful ap¬
;
v
"This widely-used index, based
at
labor and material costs, ob¬
viously would not measure ac¬
curately the change in costs of all
types
of
Book
valuations
original cost less accrued de¬
preciation, or far below prevail¬
ing costs, results in an under¬
---the
book
■Costs yy, ;,yy,;
value
of
total
less total liabilities and
assets
reserves,
upon
the
diversified
assets
industries
of
in all
used
represented.
fixed
assets
also with the dates, in some
running back many years,
at which they were originally ac¬
quired, as well as the rates at
which they have been amortized.
vary
represented by capital stock and
surplus account.
Consequently, a
high return of net income on net
worth may be misleading unless
consideration is given both to the Valuations often are affected by
possibly inadequacy of deprecia¬ adjustments in connection with
tion charges, and the fact that net purchase and sale of plants, dis¬
cases
worth at book value is based to
a
extent upon costs before
World War II, and in many cases
going back to World War I or be¬
fore.
Because of recent changes
in the price level,, figures of cur¬
rent earnings and net worth are
no
longer
strictly comparable,
since the former is expressed in
large
current
dollars
largely in
Provision for High Replacement
NEW YORK 5:
plications to the extent that many*
individual and institutional share¬
valuation of the stated 'net worth'
ranging 50 to
original
;
more
largest, expenditures in their
history in 1947 and are projected
GEYEft & CO.
holders of the group includes du¬
inflationary prices.
T h em¬
bank estimates replacement costs '
versally accepted practice, upon
now
range from
50% to 100% original costs, they are in most
above original costs. According to cases at a rate -far below that
the
v
com¬
substantial portion of the
production and employment
a
or
.
fiscal
nearest
or
of all manufacturing corporations.
Their total number of employees;
.
"In the manufacturing and min¬
ing industries, expenditures have
been particularly heavy for de¬
ferred maintenance and postwar
reconversion, followed by
im¬
provements and increased capa¬
city to meet the unprecedented
demands
for
steel,
chemicals,
petroleum,
textiles, \ and many
other products. Most of the rail¬
roads and the utility industries—
electric, light and power, natural
and manufactured gas, telephone
and telegraph, water, traction and
bus—have programs for growth
and improvements that involved
WHOLESALE MARKETS
IN
CG-105
calendar
lion at the end of 1947 and
from
BANK and INSURANCE STOCKS
FRAnklin 7535
statements of
,
y
Th& June issue of the
"Monthly Bank Letter," published by the
National City Bank of New York, contains a review and analysis of
provisions taken by leading American business corporations to ac¬
count for higher replacement costs of plant and equipment
resulting
costs.
BS-297
the
given in the accompany¬
ing list (Table I).
There are of
course other ways
of measuring
size, such as total volume of sales,
capital funds, number of em¬
ployes, etc.
"These
companies, which in¬
clude the largest organizations in
numerous
major industries, had
total assets aggregating $41.6 bil¬
National City Bank of New York reports provisions being taken by
100%
Hubbard 2-0650
of
present-day
analysis has
an
year, as
practical plan for safeguarding the diets
of low-income families. We should have such a
plan
ready all the time on a stand-by basis, to be put
into operation on short notice in case of need. We
must never again allow Americans to
go hungry
while agricultural surpluses are going to waste."
ment costs last year
Truman
Analyzes Rising Plant and Equipment Costs
-
case
and
While the total number of share¬
Dividend increases since 1943 have been made by Bank of Man¬
hattan, Bankers Trust, Chase, Chemical, Commercial, Corn Exchange,
Guaranty Trust, Irving Trusty Manufacturers Trust, National City,
New York Trust, and Public National. With Chemical and Guaranty
Trust, the increase Was brought about by stock dividends, as shown
in the footnotes to the table, but Bankers Trust increased the rate
cases
President
'
stock dividend.
made
1947
ma¬
farmer, of course, is always a court favor¬
voting time approaches, but really, had we
better not come to our senses about agriculture
before we "go broke" in pursuit of current physio-
that, marketwise, Chase was 3V4 points
ahead of National City, whereas today it is 4% points behind. ;
Book values in all
some
manufacturing cor¬
porations, measured by the total
assets reported at the end of the
ite when
It is of interest to note
and also paid a
assets
fixed
been
a
cratic balderdash?
giving
the 100 largest
The
City, New York Trust, and Public. Percentwise, the best gain was
by National City (33.1%), followed by Public (28.4%) and
Irving Trust (26.0%), Despite these gains, the market value today
is higher only in the case of Bank of Manhattan, Corn Exchange,
Irving Trust, National City and Public; Central Hanover, Chase,
Commercial, Guaranty, and New York Trust are lower today than
*"
of
should also start
we
view to
replacement costs,
*
—President Truman.
made
four years ago.
*
third element of
"I believe that
r
t
■
.
a
a
general idea of the difference be¬
tween the balance sheet valuation
jor importance to agricultural
prosperity, we must take steps to maintain adequate
markets for farm products and to improve the
methods of distributing them to consumers.
53%
39%
2.00
731.82
•
758.75
*
,/
1,385
Corporations
"With
57
51%
1,610
higher replacement costs.
V
second
extended.
44%
50%
2.00
38.29
4.25
36.56
1.60
38%
.
41.74
6.51
3.31
43.54
National
"U. S. Trust
v-',
-
City
42%
93
6.68
2.33
& Tr.
Chemical Bank
^-Commercial
4.00
338
6.54
National
Chase
3.00*
25%
22%
410
the
important pro¬
gram for the future of American
agriculture is that of soil con¬
servation. Our present soil con¬
servation program must be vig¬
orously supported and rapidly
1948
1944
J£43
»
small if any special provision for
,
The 109 Largest Manufacturing
—Asked Price—
June 3
June 4
Book Value
of companies have thus far made
while
,
Net Operating
;
able
1948, is hovering around 41.
tabulation has been prepared:
,
expected losses, etc.
It appears,
however, judging from the pub¬
lished reports, that the majority
need price-support legis¬
reason-
ear¬
may be applied to fixed assets as
weir as high-cost inventories, un¬
For the benefit of farmers and
of the whole nation, we
lation which will assure
and
purposes,
to be retained until the
time for such replacements.
Still
other companies created or added
to
contingency reserves, which
nent'
By E. A. VAN DEUSEN
other
marked
"Last
and
prewar
year
a
latter
the
dollars.
•
number of
com¬
principally
among
the
"The increase in replacement larger
manufacturing organiza¬
costs over original; costs of plant tions^
made special charges in
and equipment creates not only their income statements to pro¬
the problem of providing the ac¬ vide for accelerated depreciation
tual funds to finance such re¬ or for high-cost replacement of
placements as they become neces¬ fixed assets. In some cases these
sary, but also accounting prob¬ charges were made against oper¬
lems in the preparation of finan¬ ating earnings, and thus reduced
cial statements to reflect this ad¬ the reported net income corre¬
vance.
Since annual depreciation spondingly.
In other cases the
charges to amortize the value of charges were treated, not as de¬
fixed assets over their estimated ductions from but appropriations
useful life are based, according to of net income,
unavailable for
long-established and almost uni¬ paying out in dividends, wages,
panies,
posal of government war surplus,
reappraisals, recapitalizations, re¬
organizations, and mergers. Cor¬
responding reductions in capital
and
surplus account for many
companies
have
resulted
from
writing down fixed assets as well
as intangibles.
;
"The 'Engineering News-Rec¬
ord' and similar indexes, however,
trace the rising trend of costs, and
,
the effect if all fixed assets should
be
replaced at prevailing prices.
They
indicate
the
competitive
conditions
company
under
which
a
new
would start in business.
(Table 2.)
-
,
"Total sales and other revenues
of these
companies, including es¬
preliminary figures for
companies in which com¬
plete operating details are not
available, increased from approxi¬
timated
a
or
few
mately
$20.6
billion
in
1940
to
$39.9 billion in 1945 jand $50.6 bil¬
lion in 1947.
"Net income after taxes totaled
%
^Volume 167
to $3.7 billion in 1947.
The
in
of
widely-used
rate earnings, the large
year
last
income
net
was
ex¬
pansion in volume of business and
not
to
an •
profit
ceptions)
in
widening
of
which in most
important ex¬
margins,,
(with
cases
than
unusual
ported net income in 1947 repre¬
sents an average return of 8.8%,
some
were
at
should
emphasized that
be
this attempt to adjust
for changes
in replacement costs should not
be taken too literally, but is illus¬
trative of the upward price trends
and the problems they have cre¬
ated. This matter of replacement
expanded to $12.6 billion and were
7V2 times dividends.
'
4
costs is but one of the many fac¬
to
tors
actually narrower
years of active
The
from the
actually lower than in 1940.
former
apparent
gain arises
under-valuation of assets. A
business.
"Upon the book net worth to¬
com¬
parison between return as re¬
ported and as adjusted is given
taling $26.1 billion at the end of
1947, the net income represented
an average return of,
14.3%, com-
ift the chart
below:
rise during
Bureau
to be
replaced. By the same token,
however, there is an obvious dan¬
companies, having
expenditures from then
and borrowed money for ex¬
pansion
plant
of
have
capacity,
been criticized, in the same quar¬
REPORTED
ters,
15
\
and
domestic
insatiable
apparently
meet the
to
order
in
still more
for not spending
foreign
The retained earnings oi
further.
designated on
prior years, though
sheet
balance
in
not
are
"surplus,"
as
of cash but
the form
in
invested
been
have
already
1945
Worth
Net
of
100
"For this group
1947
v
Largest Manu¬
upon
Reported,
;'
TABLE I
i
100 Largest Manufacturing
-/•
■
Corporations, Based on Total Assets •;
Reported at the End of 1947
.
;
Liggett & Myers Tob. Co.,—$366
Mid-Continent Pet. Corp
116
Aluminum, Co. of America— 430 Monsanto Chemical Co
199
250
business. Total
approximated
billion and were about 4%
in ;; 1940
payrolls
payments,
dividend
the
Nash-Kelvinator
Corp
138
National Biscuit Co
Amer. Rad. & Std. San. Corp.. 153 Natl. Dairy Prod. Corp
Amer. Smelting & Ref. Co.__ 256 Natl-. Distillers Prod. Corp
American Sugar Ref. Co.—_ 133 National Lead Co
—
647
American
Viscose
Corp
American
Woolen
National Steel Corp
201
Ohio Oil Co
164
Owens-Illinois Glass Co
Anaconda
162
251
i 439
Copper Min. Co.__ 637
Armco Steel Corp. i
l
249
Phelps Dodge Corp
Phillips Petroleum Co
Armour & Co.
421
Pittsburgh Plate Glass Co.___ 207
Atlantic
Refining Co
Bendix Aviation Corp
Bethlehem Steel Corp...
Borden Company
,44Borg-Warner Corp.
Burlington Mills Corp.
Caterpillar Tractor Co.__
Celanese Corp. of America—.
Chrysler Corporation
330
Cities Service Co.
900
Shell Union Oil Corp—— 534
192
Sinclair Oil Corp.—.——
207
Continental Oil Co.—4.4™ 209
Skelly Oil Co
Socony-Vacuum
Corn Products Ref. Co
Standard Brands,
______
Coca-Cola Co.
44._;
Continental Can Co.
...
Crane
Company
Curtiss-Wright Corp.
Procter & Gamble Co
123 Pullman, Inc.
'4
949 Pure Oil Co
222 Radio Corp. of Amer
4'
151 Republic Steel Corp.___—___
125 R. J. Reynolds Tob. Co
4
122 Reynolds Metals Co..--.^.—4
212 St. Regis Paper Co
—
487 Schenley Distillers Corp...
146
242
197
245
216
455
458
112
133
318
591
129
1,262
Oil Co
Inc
135
Stand. Oil Co. of Calif
876
166 Stand. Oil Co, (Indiana)—.1,268
229 Stand. Oil Co. (N. J.)__.
2,996
129
.......
Deere & Co.
tries
con¬
A d
ac-
y
-
Distillers Corp.-Seagrams—.4 267
E. I. du Pont de N. & Co.—1,438
Stand. Oil Co. of Ohio.—
Eastman Kodak Co.
360
Swift
324
by Charles E.
Wilson, Chair¬
present
earnings
tained
Sale of
new
business lead-
ing will repre¬
sent
investment
the
runs
Benjamin F. Fairless, President of
U. S. Steel Corporation, and Rob¬
ert
L.
Warren,
President
of
Brockway Glass Co., have
the Committee.
The
upon
ness,
and
alternative
of
nance
sources,
to
required
earnings
good
justify
the
investment."
;
Sales and net income
>4
tising Council, to advise on Coun¬
cil
campaigns affecting specific
cil in raising its
Results
loan
.
1945
1947
7.4c
Committee have not as yet made
their reports and
not started soliciting
3.3c
4,
Special impetus has been given
by the Industries Advisory Com¬
mittee to the campaign for a bet¬
equipment, net worth, and rate
based upon reported balance 4
, 4'rsheet book values of plant & equipment., 4
4
,
,
Plant and equipment, 1940 total..--—
L 24,448 / 24,448
of return,
Gen. Amer.
&
242
Economic
3,748
1946-47
24,448
3,748
6,225
pledges
of advertising support
fromleading
industries.
This
campaign will be launched in the
Tide Water Assoc. Oil Co.—?
Co.4.4—_1,027 Union Carbide & Car; Corp._
Union Oil Co. of Calif—4
General Motors Corp.
2,473 i United Aircraft , Corp....
General
263
649
272
160
Transp; Corp._4_ 132
Electric
General Foods Corp.U-y—— 207
B. F. Goodrich Co—
247
United
Fruit Co
24,448
11,701
28,196
16,145
34,421
17,745
Net total to date
-4 12,747
Net worth end of year—18,701
12,051
22,227
16,676
26,093
8.7%
14.3%
Total to date
——
Less: Reserve for
depreciation.—
Rate of return—net income
—
to net worth._ 10.0%
Street.
38,386
Members of the firm are: Presi¬
3,990
5,386
7,140
dent, Dudley D. Rockwell; Treas¬
urer, Willard L. Gould. Both have
had several years' experience in
24,448
32,430
11,701
16,145
50,912
17,745
;j:
Less:
929 U. S. Rubber Co
__
348
Hearst Cons. Publications—— 161 i U. S. Steel Corp
....2,163
Inland Steel Co.—..—44.—^— 244 Walker-Gooderham & Worts. 134
Inter.
Corp
Bus.
....
Machines
Corp.— 184
Inter/ Harvester Co.^4_44— u 620
International Paper Co.—
Johns-Manville Corp.
_
.
—115
Jones & Laughlin Steel Cp.__
Kennecott Copper
r
279
Corp
341
541
are
Wheeling Steel Corp———4 158
for the years going back to 1940, including American Car &
Foundry .Co., Crown Zellerbach Corp., Dow Chemical Co., > Ford
Motor
Co.r General Mills, Inc., Philip Morris & Co., Ltd., Publicker
Industries, Inc., Remington Rand, Inc., Singer Manufacturing Co., and
-
•
'
,
'
business
investment
The
in
the
territory.,
Elmira
principally will sell
insurance
firm
16,285
26,461
33,167
stocks
42,584
curities.
income to net worth— 10.0%
7.3%
8.8%
——
Rate of return—net
over-the-counter
and
se¬
Formation of the firm was pre¬
viously reported in the "Financial
Chronicle"- of May 20,
|
*Plant and
equipment adjusted by changes since 1940
in the En¬
of Building Costs (1913=100) from
242.2 in December 1945 and to 326.9 in De¬
gineering News-Record Index
208.2 in December 1940 to
applied to the total plant and
cost of 285.0.
•'
■'-j
.
DonaM G. Babbitt With
Keaie S Go.,
(Soecial
to
The
Detroit
Financial
DETROIT, MICH.
—
Chronicle)
}
Donald G.
associated
Griswold Street, members of the De¬
troit Stock Exchange. Mr. Bab¬
bitt has recently been with Baker,
Simonds
& Co.,
specializing in
Babbitt
Wilson & Co.—______4_
140
Youngstown Sheet & Tube... 260
year, or
the
12,747
18,701
datei——
Net total to
equipment in December
Western Electric Co——— 771
Westinghouse Elec. Corp.44— 602 1940, plus the additions during 1941-45 at an assumed average cost
Weyerhaeuser Timber Co
195 of 227.5, plus the additions during 1946-47 at an assumed average
a number of large companies whose
not yet available for the 1947 calendar or nearest fiscal
J. P. Stevens & Co.
depreciation.
Net worth end of year————
cember 1947,
The above list excludes
statements
Reserve for
.____
mutual funds, bank and
Goodyear Tire & Rubber Co. 408 U. S. Gypsum Co.—.4—_ 132
Gulf Oil
_JlU—
Total to date
f
Rockwell-
—
28,440
——————
Additions 1946-47
4
N.V-Y.
ELMIRA,
Gould, Inc., announce the open¬
ing-of theirs offices in the Rob¬
inson
Building,
159-167
Lake
equipment, net worth, and rate 4,
of return, adjusted to approximate re- .
''1
,
placement costs of plant & equipment.*
Plant and equipment, 1940 total.
—_ 24,448
1941-45
j
Inc., Opens in Elmira
Plant and
Additions
~
Rockwell-Gould Co.,
'419
______
«
Fall.
444- 437
Co
understanding of the American
System
by
soliciting
ter
189
—
still others have
their respec¬
tive industries.
Texas Company—.-—1,115
_________
Firestone Tire & Rubber Co._
Sun Oil Co.
the
1,668
•~r 3.0c
1941-45
$173,477
3,730
4
Additions
to
thirty industries represented
Committee. Other mem¬
bers of the Industries Advisory
Plant and
Additions
Committee
the
of
amount
$50,600
4.9c
._
.
the
$39,900
1,943
1,208
1940
>
annual budget.
the fund-raising ef¬
of
to date
received in
or cash and pledges toward the $650,000 necessary for the '48-49 Coun¬
cil operation. This figure includes
contributions from only nine of
forts
on
__________$20,600
Net income after.taxes
—4-4 1,875
Dividends (preferred & common) paid1,198.
Net income per sales dollar
:—
9.1c
Dividends paid per sales dollar..
5.8c i
was
if industries; and to aid the Coun¬
,>
Total sales and revenues
Committee
suggest new public
service campaigns to the Advert
to
formed
still
.•
the committee com¬
36-top flight business
The
leaders.
mainte¬
is
busi¬
on
of
posed
from these
the
will repre¬
members
the rubber industry, the iron
steel industry and the glass
industry
against
Even
funds are raised in part
new
joined
sent the investment banking
policies of the
.authorities.
monetary
Collyer,
Goodrich Co.,
John
F.
of B.
President
generally un-
far
credit control
firms
banking
that
announced
Borrowing has the ef¬
and if carried too
Harding
throughout the country. ;• ■.
At the same time,' Mr. Wilson
increasing the debt ratio,
of
Charles B.
Mr. Hard¬
ers,
receptive market for new equity
fect
which
of
- flight
36 top
preferred or common
stock is limited by a
Com¬
mittee,
lower
relied
the
is composed
conditions, re¬
are
member
a
of
the chief source of new capital.
as
Co.
Electric
As
food distribution costs, and so on.
"Under
General
of
of pub¬
to
super-markets
the
President
and
mechanization of coal
lic utilities,
mines,
of*
man
Committee
petroleum produc¬
greater
steel,
t
nounc e m e n
Business is
being called on to raise capital
for financing the expansion of fa¬
cilities for increased output of
tion and refining, growth
joined the Indus¬
Advisory Committee of the
e rtisirig
an-
needed.
capital
v
cording to
chasing power of their income.
"If business is to continue its
new
senior
Harding,
Council
payments
(In Millions of Dollars)
292
118
Co.,__
^
of
"As the dollar total of
TABLE II
4
154
277
210
163
American Cyanamid Co.— 207
American Tobacco Co
index
v::74>-4?-4100 Largest Manufacturing Corporations
'•/
202
American Can Co.
paid to the share¬
holders owning the
$5.5
wages
proportionately than
more
have dividends
j
■
Allied Chem. & Dye Corp.___$575
Allis-Chalmers Mfg. Co
much
of
fact increased
and salaries have in
times
(In Millions of Dollars)
Y;
of large corpo¬
payments
the
rations,
'•
Balance Sheet Book Values
and upon Plant and
Equipment Adjusted to Approximate Current Replacement Costs,
facturing Corporations, Based
Plant and Equipment as
of
same
Labor
securities.
fixed and working assets.
I
I
f
on
the
of
B.
New York, has
prices, amounting to 59%.
dividend
sumer
rates
also for not increasing wage
the
and
products,
their
for
demand
Return
than the
period in the
replacement costs long-term growth trend, to pro¬
wage rates
and duce more
goods at reasonable
pricing policies.
prices for; the American people
"The 1947
earnings of many
and to provide more jobs at high
companies have been criticized, ir, wages, then good earnings are es¬
some
quarters, as excessive; yet sential to build and attract the
own
of
Charles
partner of Smith, Barney & Co.,
ger in ignoring
in determining
made vast
20
Rate
from $1,800 in
rose
Harding on
Advisory Committee ;.!
$3,100 in 1947, an increase
of 72 %, which was more
earnings. It is not an argumeni
for companies* to write up
the
book value of their assets to cur¬
often the same
PER CENT
Average
employe
1940 to
considered in judging
be
annual compensation
"Average
per
21
Charles B.
increased
only
39%
plying the changes since 1940 in
from 1940 to 1947, despite an in¬
the
general index of building
crease
of the same percentage in
costs,
the
valuation would
be rent costs as a new bas.s for com¬
Shareholders'
equity
from
re¬
lifted by $16.5 billion to $50.9 bil¬ puting 1 earnings,
since no one
tained earnings arid new stock is¬
lion, and book net worth would knows what the trend of prices
be lifted
by an equal amount. may be in the future or at what sues, the shareholders as a group
lost ground in terms of the pur¬
Upon this enlarged base, the re¬ dates the various assets will have
corpo¬
enormous
purcnasing power.
plant and equipment, car¬
$34.4 billion (before de¬
preciation) at the end of 1947, had
been adjusted to 1947 costs, by ap¬
dollar to-v
tal
chiefly to the
dif¬
"If
ried
presenting
of
are
"It
1947 total payrolls had
while by
Earnings and New Capital;
10.0
and
income is expressed
dollars, but net worth
of much greater
declined
earlier this year when
our
annual tabulations
due
1945
is based largely on prewar dollars
measure
of
in
the kinds of dollars
in current
from 9.1
cents per dollar of sales in in 1940
to 4.9 cents in 1945, and rose to
7.4 cents in 1947. As pointed out
earnings,
8.7
In this comparison, how¬
ferent—net
margin of profit, which to¬
gether with return on net worth
the most
1940.
ever,
aver¬
age
is
with
pared
approximately $1.9 billion in both
1940 and 1945, but rose sharply
(2541)
FINANCIAL CHRONICLE
&
COMMERCIAL
THE
Number 4706
w
has
become
with Keane & Company, 645
With First Cleveland Corp.
-
(Special
to
The
Financial
Chronicle/
CLEVELAND, OHIO—Jack K.
is with the First Cleve¬
Elwood
land
Bank
Corporation, National City
Building, members of the
Cleveland
Stock Exchange.
r
A. Lepper
(Special
to-The
& Co. Adds
Financial
1
Chronicle)
CINCINNATI, OHIO—A. Lepper
National Bank Build¬
of the Cincinnati
Exchange, have added Wil¬
& Co., First
ing,
members
Stock
liam D. Duble to
their staff.
municipal securities.
In the past
he conducted his own investment
business in Detroit.
.
!
22
(2542)
THE
COMMERCIAL
CHRONICLE
FINANCIAL
&
Thursday, June 10, 1948
World Recovery and World Bank
-
i reconstruction is in great need of
(Continued from page 17)
I
and
there are
other
hay presently available some $470 financing
very
large areas, South
million for lending purposes with¬ | areas,
out further borrowing. In spite of America, Africa, and the Far and
Middle &ast, wnicn are in need oi
the fact that there are numerous
One of the
major forces working toward the restoration of railjroad credit over the past eight to 10 years has been the adoption of
-
the
to
properties
largely
merely
the
for
refunding
on
refunded.
or
fi which has been, or will be, paid
•Following the depression, when;
very few
roads failed to covertheir operating costs but many;
found it difficult, if hot impos¬
sible,
to
support
their
debt;
charges, there was a pronounced;
change in policy throughout the
industry.
Most railroads, includ¬
ing some whose debt structures!
off.
of
!!,.•
.!• ;!!'!!..
Of far greater import than any
the above is the reported in-;
tention
of
& Nashville
LouisvillO
of
selling $30 million of term debt
to reimburse the
ital
treasury for
made-
cap¬
the
oh
industries, public and private,
for the favor
the capital mar¬
of
It is bound by its Charter to
ket.
follow certain standards.,
Its
loans
must
be productive
which
prove
but except for
new
equip-!
ment
these
and
better-'
additions
have
ments
earnings
financed
been
and
out of!
not
capitalized.
improvements ac¬
Heavy Capital
companied by sharp cuts in out¬
standing debt, contrasted with the
industry's earlier history
of
mounting debt, has been one ofi
the most favorable aspects of the;
railroad picture.
It is small won¬
der, then, that evidence that some
■of the carriers are reverting to
-the earlier policies is not being
•viewed enthusiastically
by rail-!
xoad security analysts.
;
:
;
;
:
Chesapeake
&
Ohio
in
recent
years has spent substantial funds
on
extension of lines into new
coal
coal
the
a
territory, improvement of its
handling facilities, etc.
At
same time, it has maintained
liberal
dividend
combination
left
This
policy.
the
in
road
tight financial position. The
-
a
man¬
agement has apparently not want¬
ed to capitalize the
property ad-j
•ditions and betterments with long!
-term
has
mortgage
debt.
Instead,
recently adopted
selling
equipment
it
policy of
a
trusts
obliga¬
tions Up to practically 100 % of the,
cost of
the
new
usual
equipment rather than
75%-80%.
While
this
has the result of inflating the debt
structure
effectively to
cover
the
non-equipment capital
cost of
ex¬
penditures it
at least has
the ad¬
fully
pea red
road'S
tries
n e e ds.
of closei to
and
The
issues and of providing for serial
repayment.
gations
ments
•The
The equipment obli¬
mature
over a
in
equal
10 year
financing
of
instal¬
period.
Kansas
:
City
Southern earlier this week is in
different category, as is the
templated financing of
phia,
Baltimore
&
a
con¬
Philadel¬
Washington
Guaranteed Stocks
no
debt
than-' regular
ments
-maturing until 1955. Last
serial equip-;
for
the
the loans
of
of the loans
approved.
As the
have for making loans
dependent
the confidence
upon
investors, that is to
investors,
to
are
for which
purposes
were
sources we
are
private
the Bank is designed
so
stimulate
investment
the
into
say
flow
of
private
productive pur¬
throughout the world/ It is
hope of its management, as
poses
well
as
have
the Bank
its
definite
and
reports
serve
Special Securities
of
adopted
the
the
objective, to
as a
bridge
in
is
members
As
enormous
deficits
countries
debt would offset
a
iarge
part of
Teletype
New York 4, N. Y.
NY
1-1063
9-6400
•'
*, i
postwar
night,
moots
million of term:
s
world
*
devel¬
oped, due to many causes which
it Is not necessary to recount to¬
the
in
United
It
de¬
each other.
great
luted
that
pends
upon
Western
from
The
Europe during the
the.
of
course
it
more
things but the
many
European
do
can
program
the
greatei
will be the relief to the American
Moreover.. I
taxpayer.
not
am
un.
mindful of the lact that the extent
to which the European Coopera¬
tion Administration
makes grant
and even loans to Western
Europe
of 3*ums to bg used for productive
working capital;; and machinery,
by! that much are the loans which
the International Bank may make
to- Westerp Europe better secured
;Wcu have
loans.
Four of
struction
were
date
these
made
five
were
recon¬
in Europe.
loans
They
made to France, The Nether¬
lands, Denmark, and Luxembourg
Another was made to Chile foi
development purposes. To France
many items of capital equipmen.
were furnished, including 100 hew
locomotives
tional
for
the
French
Na¬
Railways, > bulldozers anc
earth moving equip¬
arose
Western
ment
is
ships
placed in-the
were
between! service* of; the Dutch 'merchant
These deficits were so' marine as a result of the Bank'*
may,
produce economic distortions
but
the condition remains.
I don't want to give you a trav¬
elogue of South America but ecoT
nomically speaking my trip con¬
firmed
fact
which
haVe
us
that
both for its
.area
the
the
of
most
welfare
of
believe
an
welfare and
own
the
1
here is
world
should
be
brought as rapidly as pracT
jticable to fuller productivity. It is
encouraging to see so many men
in
the various countries of South
America
nomic
conscious
social
and
at work
of
the
forces
eco¬
that
are
in their respective coun¬
tries,, and
the earnestness; with
they approach their prob-.
which
lems.; The problems
and
complexv but
there
are
'serious
are
with
them
V
all
energies being
many
ap¬
plied to their solution.
'/
!!;!•'-:
;
v
s
—
■
We-found that those responsible
were interested in
many different
types
of
productive! enterprises
certainly / in the main they
were not laboring under
any fan¬
P:'
but
tastic
consider¬
were
ing seriously what needed to be
done in the!way of sound agri¬
cultural
improvement,
port
velopment, communication
tems,
power
projects
and
.
In
some
South
serious
*
settlement
to
M
de¬
I!
sys¬
the f:!r:
countries
American
'";
in
i!
Continent
consideration "was
to -schemes
be
'
v
of the governments
member,
our
the
'
development schemes. 'Of¬
ficials and others
of
cargo
and
praise¬
and probably will,
apparent
worthy. It
ment for the work on the GeneSiav
States -and
institution
ing with a radio and a motion
picture at hand.
The desire to
telescope the period of develop¬
like.
Of
Europe and
tinent, steps have to be taken un¬
the intimate knowledge and
pressure of what is going on else¬
where in the world. It is pioneer¬
der
other types of
pay-! Dam in the Rhone Valley, sout'r.
between the of the City of Lyons. Fifty nev
balance
place in the North American Con¬
given
immigration and
for
whose
receive
object ] wotild
into
their
coun¬
mi-1--.' •*
Mi
loan.
Agricultural machinery wag tries from the over - populated
reduction z of $50yas
the International Bank mbde available for Denmark; Luxareas of the European Continent
751,000 the company made in its could pqssibly cope with them and j em lourg is receiving new stee! immigrants and settlers of the
mainly ' from type who could be relied upon to
non-equipment obligations; More¬ have any funds available for re¬ mill- equipment,
construction, an.d I development! Pittsburgh. Many machine tools carve out their homes and their
over, during that period equip¬
either in Europe or in other
parts, and: •ptfter.i equipment! are being Opportunities in new lands;
ment debt increased almost $14
of the world. These deficits were' pur chared in
Cincinnati out o! Schemes of this sort in these days
million, •
■
* * 1!
symptoms of fundamental ecQ~. funds received from the proceed
require careful preparation and
noni.ic disorders and represented
of loans from the International
organization and they also require !!!'!
trends with which the Bank- was Bank: - There' is
no
limitaiior some financing. The North Amer¬
never
designed to deal, at least placed" upon where* the proceed.' ican Continent could and did rely
singlehandedly. If the Bank is to of the loans may be spent and our on the natural flow of economic
maintain the confidence of its in¬ records" show that the
proceeds forces to provide settlers.; Those
vestors, to do, its duty toward v its are in'fact, spent in various parts who came to Cincinnati after 1848
1
-The Kansas City Southern Rail¬
stockholders, it is necessary that of!; the" world usv well as in the game largely" , UridCir , their own
way awarded June 8 to an under¬
its energies and resources should United States. To South
America, power.!! But! today ! dislocations
y,v
writing group'headed by The First be devoted to. the creation
for example, we can trace some¬
arising from the war and other
or;
Boston Corp. "a new* issue of "$14",- maintenance
of
fairly
definite! thing around $50 million of the conditions make it necessary and
000,000
first
mortgage '20-year productive projects whose
output, $300 million which have thus far desirable to assist these forces, it ;'!!!'■;
bonds, series B> due June 1, 1968. in whatever form, Is
something of been drawn down* on the Bank's is afield in which much can and
The group submitted at competi¬
which the particular country- or loarr.
Should' be dohe, in. my j udgment;;
tive sale a bid of 99.40 for. a 3%%
the. world
stands
in economic
t shall leave any further quesf and is one in which the Interna* ;?;-v !
interest rate.
Subject to approval
,!!! !;V !!■!* !!'!>!
tional Bank with the
cooperation]
of the
the
1941-1947
,
no
consti-j
,
v^li:
Kansas City So. Bonds
tions; regarding
Interstate Commerce Com¬
mission, the group is offering the
securities
at 100.35
and
accrued
yield 3.60% to matur-
Offsetting Economic Imbalance
With
the
advent
ditional sums
-
Proceeds
will ;be
from
the
financing
by the company to
from the; Louisiana &
used
purchase
of
the
Euro¬
Recovery Program large ad¬
pean
were
made available
which, if providently used, should
substantially
of
some
the
check
if
forces
not
tending
its first mortgage 4%
bonds, series
imbalance in the wo.rld.
to!create
alter
which'.were
Arkansas; Railway $14,000,000 of
this
economic
In large
May 1, 1969.!The latter part its funds are made available
company will, in turn, utilize the* for the supply of "food,"fuel, raw
D, due
proceeds from its sale to redeem
a
like amount of its-1 % % ■ promis¬
sory
notes due-May-28, 1949.
issue,
of
Louisiana
&
The
Arkansas
first
mortgage ; bqnds ;; will
be
pledged under the first mortgage
of Kansas City Southern
Railway,
Associated with The First Bos¬
Corp. in the Offering are: Dick
& Merle-Smith;
Goldman, Sachs
& Co.; Kidder,
Peabody & Co.;
F. S. Moseley & Co.; Laurence M.
Marks & Co.; Stroud & Co.
(Inc.);
Central Republic Co.
(Inc.), and
materials* for the general rehabil¬
itation of Western
European
It will also have some funds
available for the supply of capital
goods and reconstruction items to
Western Europe.
It is in this lat¬
ter
field
that
(8pecial
LOS
to
The
Chronicle)
ANGELES,
Oscar
F.
Sixth
Street,
rence
Financial
Kraft
&
have
Go.,
CALIF.—
530 West
added
Strom to their staff.
Law¬
organization
European program to the question
period but speaking
of South
America. I would like to say a
word
two about
or
America
which
from
cently returned.
from
the
trip to South
a
A
have
I
small
Bank; visited
re¬
group
Colombia
Charter
of
the
we
spoke with representatives of
number
other
of
Latin
Amer^
icaii countries including Paraguay
and Bolivia while we Were on tile
.
way!„; !!!''!!
>
^
tion
and
Europe
world
There
is
development.
but
which
are
one
the
other
Bank
in
of
from
which
another.
If
one
can
that all of the countries that
.visited
alert and
of
their
With
all
Continent
the
serves.
r-
great; desire,
countries
of - most * of"' those
at. least, for .technical
assistance
and
advice
in ^connec¬
largely
seemed
sensitive
economic
its
as
it
can
make available in this con¬
nection and it has many contracts
which
we
are
behalf
on
of
prepared to utilize
member coun¬
the
tries, should they so desire.
dare to generalize it would be to
We
Western
part
areas
varied
re¬
quires that its funds be equitably
distributed between reconstruc¬
;! Another phase ! of ! our South
American trip brought to light the
! • It
Economic Distortions of
say
-
Bank
.v.:,
■!;
involved' may be
Peru,
the
economically productive projects,
of the countries
ahie to help.- A discussion of this
subject marked one .oL the mosjs
interesting phases of bur trip. ;: 'f i
Chile, Argentina, tion with their development. The"
Bra2ily;;;Uruguiiy^,.y.enezuela and Bank has certain, facilities which
Ecuador,
International !
;••!.;;*■Nationalism
Bank wishes particularly to assist,
is difficult, if not impossible,
and supplement the efforts of the
to generalize about a Continent,
European Recovery Program. The
and one of the chief impressions
Bank, in the closest cooperation
I received from our
trip was the
Wiih the European Recovery Pro¬
manner
in
which
one
country
gram, will continue to search for
.
which meet its standards and the
Oscar F. Kraft Co. Adds,
the
of the Bank or the types of loans
it has made, or.its relation to the
a
econ¬
omy.
The
telephone BOwling Green
which
longer in need of its
-
the
various countries needs.
25 Broad Street
as¬
Charter,
no
services.
i
it reduced its non-equipment
Riter & Co.
6BARAHTEED RAILROAD STOCKS-BONDS
Con-
the
legislative
at least due to the Bank
by only $347,000. As a matter;
ton
Bonds
debates
gross and the other
debt
of fact^ sale of $30
degree, of exactness.
that the proceeds
used
year
ity,
equipment
has
other
terest
of
than $37
more
road
possibly cope with such
problem." Bu.t the Bank can
select
the
various
throughout
areas
projects which
give
the
Bank does not intend to withdraw
het Working capital]
(in part
$41 million with cash efforts)
equivalent of
million.
interest to
typical
Recent
that could
a
any
the- Bank
balance? justifies its full existence precisely
at the moment when the world
sheets showed
vantage of getting the lower in¬
cost
for; the
adequate
'
institutions
group of
reasonable prospect of repayment
and the Bank must be satisfied
ap-; semblies
years
or
definitely
been
sive
debt
retirement
programs.!
"This is particularly true
Ambitious property improvements; week.
have been undertaken in recent inasmuch as finances haye
cahnot
They must be for things greatest promise of wide economic
value. How much 0f its funds wih
benefit or im¬
be
made
available for
Western
the economy of the coun¬
involved; there must be a Europe it is impossible to say with
loans.
properties.! Press reports to this between the flow of government
pared drastically in re¬ effect came as considerable of
and private capital. As I read the
a;
organization, embarked on aggres-j
surprise to railroad analysts last Charter, as well as the committee
had
The Bank
and
the
expenditures
development financing.
institution
obligations the Bank still
to
compete with the high
grade obligations of governments,
.
be extended
the
has
a
through the issuance and sale of term basis of the bank loans of
"bonds.
Except in the case of the subsidiary, Louisiana & Ar¬
equipment securities there was kansas,, already existing. There
rarely any provision made for the was no increase in the debt. The
systematic repayment of the prin¬ purpose of the Philadelphia, Bal¬
cipal of this debt. Adequately timore & Ohio $17,570,000 issue is
maintained the railroad plant was to pay in cash bonds held by the
considered permanent so the debt lessee.
Pennsylvania's need for
thereon was treated the same way. cash stems at least in part from
The bonds did Jiave a maturity the maturity this year of direct or;
date but when that date arrived it
guaranteed nOn-equipment debt
was
anticipated that they would in the amount of over $35 million
behind
guarantees
finance all of the worthy
projects that exist throughout the
world.' Indeed there is no single
Bank's
The greatest weakness of the
vast majority of railroads during the depression era was
Jheir heavy
debt structure.
It had long been <i;
the practice in the industry to
(leased line pf Pennsylvania) on
capitalize improvements and ad¬ June 22. The first of these was
ditions
and
sums
conservative financial policies.
more
"the development for here, unlike
the ' developments * which
took
great
a
particularly
to
the
needs
development.
advances the
whole
undeveloped.
is
There
still
is
a
certain impatience to get on with
was
!*!!;,
encouraging also to meet
'w-'irrV
with many
who realized the lim¬
ited role that lending can play in
the development of a Continent!
Ceitainly in most, if not in all,
countries we visited the greatest
interest
of
was
steps
induce
shown the discussion
that
the
might be taken to
of capital gen¬
flow
erally into the area. No Continent
be developed entirely by debt*
can
it
as
takes
venture
investment
capital
capital to
as
^well
make
a
To put it another way,
I think one can say that no coun¬
country.
try was ever satisfactorily devel¬
oped solely through class triple A
investments. It takes some wijd-
•'
■
.
Volume 167
Number 4706
...._THE COMMERCIAL & FINANCIAL. CHRONICLE:
.
catting, some speculating^ the will"
ihgness to take real risks. It re¬
quires equity as: well as debt finarvcing. - Moreover,, -sole- depend¬
ence -upon governmental; grants,
oil keeping abreast of the accel¬
public agency lending, is bound
in th*j long run to prove unsatis¬
factory. Trade and commerce gen¬
erally does not lend itself to the
rigidities- of such, .procedures.
A
dependence upon legislative wills
and political fashions is not a sub¬
stitute for a wholesome flow of
attention
erated developments of research."
28.5%
st
;
far
oh how to invest $100,analyzed the' 801 entries that received
indulged i.r considerable lending
and some borrowing.. Early in its
it
career
lias
welcome
with
met
a
very
competitor in
terms of
Cooperation Ad¬
the
European
ministration..
There
ore
many
problems before it but T think it
has already afforded to the world
an
of
example
international
an
institution which can apply itself
objectively to the solution of some
of its members' problems. It has
day to day tasks to perform and
I think if you visited the offiees
of ch e Bank you would find little
to distinguish it from the interior
of other banks or insurance com¬
10
•'=
panies,
enterprises which you
would be apt to visit in the City
of Cincinnati. I think you would
he
particularly impressed with
the staff of the Bank and its di¬
or
;
(3) General Electric.
markets)
28.5%
for the
,
an
of
the
stocks
above
>
ap¬
peared in 300" or more of the 801
entries
analyzed — entries
subr
mitted for. the most part, by in¬
formed stiiclents of securities; prolersional
cult
Counsellors and the like.
a
was
successful
age,
any
\
,
be
to
investment While
analysts,
! "At Labor Party
investor.
share
of
failures, during this period' of vig¬
orous development, the amazing
vestor. who attempts: to select in¬ progress of the many enterprises This index
j The; difficulties besetting the in¬
dividual securities- are indicated tihat
>y the results of an equal dollar
nvestfnent in each of. the above
did "succeed
certain
its
of 181
level
in for
August
errors
request from
or from
deafer,
A
SECURITIES
CORPORATION
Conference last
shows
trial
production
10%
more
above
British
RUSSELL BERG FUND
•.
INC.
Capital Stock
indus¬
Prospectus
is running only
1938
■.
,
,
on
Request
with
compared
greater because U. S. pace of 94% above its '35general'and so '$9 average. Moreover, if '3T is
it often compensated substituted for '38/ British pro¬
of individual judgment. duction today is only 2%; higher
August 1939. Despite the Expansion
{act that the "Dow" is currently. rapid that
above
the
was
upon
investment
NATIONAL
and. the
docks in
15%
than offset
more
Success
the losses.
your
120 BROADWAY, NEW YORK 5, N. Y.
Week, Minister Bevan applauded
'the
fecundity' of socialism in
the field of industrial production;
fcjut, unfortunately the economic
service
(London
& * Cambridge
"Economic Service") released its
index of today's production, com¬
pared with the prewar period.
not diffi¬
its
has
Prospectus
increased
"Dow"
lows:
"In this young, vigorous rapidly
■
S,
compared; with 14.9%
during the same
as-
Seemed Impor¬
tant," published by Selected: In¬
vestments* Companyi quotes from
the "Wall Street Journal" as fol¬
for the manufactured products of
the East.
growing country, if
I.
.
"These/ Things
»
frontiers moved
our
May 15, the
and
of D
British Production
INVESTMENT
;MANAGER AND UNDERWRITE*
was so
1939,' the widow's five
"Ours is a more mature country.
'Blue
Chips" have appreciated Our
economy is still growing but
only 11% on the average. Fur¬
gt the slower tempo that comes
thermore, we know of no com¬ with
age. When the fertile lands
mon
stock mutual fund that has
Were settled; and the natural re¬
rectors.
They are objective, ex¬ made as poor a showing during
sources put to work, American
perienced and knowledgable about
|he past nine years - as the five Enterprise sobgftt new frontiers to
economic and financial matters.
most popular stocks- selected for,
Conquer.
Business is still grow¬
Their loyalties are to the Bank
Lha widow-..
w
^.■. ,,
ing, but its growth is often less
and it is rarely that a
purely na¬
and' more selective.
tional point of view is expressed | A common error made by many spectacular
conservative investors, is to Con¬ The frontiers of today exist in the
in connection with the many in¬
ine their purchases of common research laboratories and in the
ternational tra nsact ions with
locks to the largest company in 'brain* and resourcefulness of the which they have to deal.
■
any given industry.
Such: com¬ managers of our industries.
/
■
issued
RESEARCH
westward, they saw the building
of great industrial plants to meet
the constantly increased demand
(5) General Motors.
Each
;
As
low
asset value
In August, 1939, "Barron's" ran a contest
000 for a. widow. "Barron's"
J (4) International Nickel.
'48
ruary
The Widow's "Blue Chips
.
"
but it has thus
4
J
has
Long
diversified Industry Shares.
It
points Out that between the Feb¬
By HENRY HUNT
'
The International Bank is still
'■
■
W.
arresting folder citing
tihe volatility of the portfolio of
private capital between countries preferred ratings and published a list rof the common stocks that were
and this is a generalization which most generally chosen. The top five .in order of 'popularity jwere:
is by no means limited to La tin
(1) Du Pont., ■' '
lantic and Pacific coasts as they
America.
'
;
(2) American Tel, & Tel.
reached out to service these new
very youngf
1
-
■
Hugh
■
>
,
ih 1937 there
and
lion
fewer
Tfhis
were
workers-
Investment Counsel
mil¬
one
in
Russell, Berg & Company
Britain.
75
:::
Federal Street, Boston
TELEPHONE LIBERTY 2-9550
„
:
r
means productivity per mantoday is about 13% below
year
,'/■'
ptea'^.y
i Calvin
V,'
BuHockV
Securities
Natioh-Wide
reduced1
its
common
sjtock position from 49% of assets
March
on
1948
31',
May 20.
to. 39%
■
.
on
-
■
National;
..
You who
are
here
are
presum¬
ably Interested in the operation of
foreign relations. 1 do not mean
to ascribe
loo much- to what-
the
Bank may contribute7 to the solu¬
tion of this world's ills but I do
believe it has already afforded an
example of international dealing
which embodies real hope for the
future/,;
'
panies
v
potential
ities
growth
the profit possibil¬
seldbm- offer
or
that
smaller
the
selected
However,
carefully
a
company
does.
.
it generally requires an intimate
knowledge of. the smaller com¬
pany's-affairs and wide diversir
ication of risk, to invest success-
tully "off the beaten path." Many,
mutual
funds
limate
investment
provide such in"know-how"
alus wide diversification at mod¬
.
erate cost "to the investor.
California Elecfri* fids;
...*
Halsey,
Stuart
&
Co.
Inc.
on
June 7 offered $2,500,000 Califor¬
nia Electric Power Co. first mort¬
,
v
King Merritt Sells for Keeps
^
'Merritt, who! as
sales
Investor's Syndicate,
trained: over 20,000 salesmen, has
(
King
manager for
'
"From
the
brains
of
enlists have come suchas
penicillin,
nylon,
atomic
energy;
Frorh the brafns. and
industrial
sci-
j
Securities
and,
Re¬
search
Corporation has issued; a
bulletin on its "Steel Shares."
new
products
Ih vestment
Commonwealth
television, Company*, of San Francisco re¬
even
cently declared a dividend of; 6c
and many
startling are certain to
more
our
our
come.
a
INC.
share, its 62nd consecutive quar¬
k ;. .,
ingenuity of terly dividend.
leaders
come
new!
manufacturing, ■" new j Wellington Fund's new pros¬
methods of operation, new sales pectus; includes illustrations and
methods.
As they -develop new Enjoys the unique distinction of
feeing in keeping with the '"new
Industries and spur the growth of
lbok" age.
* "
'
existing enterprises, the achieve¬
ments of technology and manage¬
ment offer opportunities to the
investor who is prepared to take
advantage of them.
^
V V v''
ways
,
of
,
•{"The Investor Has
been
a
Task Today
HUGH W. LONG & CO.
INCORfORAttb
48
Difficult'
building, up a retail sales or¬ !
'
ganization of his own during the
{ "New industries are being born
past 21 months, Offering only
End established. industries are
ihares of selected mutual funds,
continuing to expand. But, with
the firm on its bid of 100.2699%/ King Merritt's sales are currently
older industries levelling off and,
running in excess of $500,000 a in some cases, going into decline,
The net proceeds from the sale
month. Mr. Merritt recently told
of the bonds will be used to re¬
the possibilities of profit are less,
as that he expects to hit $1 mil¬
tire $2,000,000 notes, issued to as¬
while the hazards of loss remain.
sist in completing the company's lion a month before the end of
"Complicating
the
investor's
1947 construction program and to the year. Less than Vi of 1% of
task today is the fact that poten¬
finance in part the Company's 1948 his sales have come back through tial
growth is not always easy to
That's what
program, and the balance will be redemptions to date.
recognize; It is difficult for the
used to finance in part its further we call selling for keeps.
average investor to obtain infor¬
construction program. <
;
' t
>
mation on the practical results of
Frontiera v
:
1
'
The company's total operating
research.
Even if the investor
j One of the best written pam¬ does know the value of some dis¬
revenue in 1947 exceeded $8,500,phlets that has reached our desk
000i and after all operating ex¬
in a long time is "Frontiers" by covery; he cannot' be certain that
another research group has not
penses, including depreciation and
Woodford: Matlock, President of
all taxes, there remained $1,853,Broad Street Sates Corporation. already found a product to* sup¬
000; maximum annual interest re¬ We
plant it. -Technical research is
quote, in part:
quirements on all bonds now out¬
pot only a strong force, but in
; ■ "Our grandfathers and fathers
standing, including this issue, will
addition ? industry > continues1
to
lived in days when it was easier
total $555,000,
;
step up the rapid pace at which
.
Prospectus from your Investment Deoler or;
WALL
SlfifcET, NEW lOft'K 5, N Y.
bonds, 3% series due 1978, at
100.99%, yielding approximately
ZM%.
The bonds were awarded
gage
-
Bretton Woods Eh
'
.
ionaal
Monetair
Itokvis—Debet
ilet
Bestel
Interna—
H.
-
J".
eystone ;
H. E, Stenfert
aan
Kroese's Uitg.-Mij n v.,
Breestraat
vustooian
i4, Leiden—paper-^irig. i: 11^-;
JS:;:/;:/!-;;:/'.
geb. f. 12.75.
.
'''irf;
■<r.
,V.
'
■/f.
.
to
> The
is engaged princi¬
pally in serving electricity in ex¬
company
tensive
areas
in California and in
sections of Nevada.
factures and
of
It also
manu¬
sells, ice in portions
Imperial and Riverside Coun¬
California and through a
subsidiary supplies telephone and
telegraph service principally in
the territory in'which it supplies
electricity. Among the larger cities
ties in
served
side and
San
Bernardino, River¬
Palm Springs. v •
are
be
a
successful
is
(Special
Merrill Lynch Firm
to The
_> BEVERLY
Financial
HILLS,
ChronIclrI
CALIF.
- •
—
Lowell L Hall has joined the staff
of Merrill JLynch,
sources—a
period of? rapid growth
years.
the United
States-
a
tional
Bureau
of
saw:
.
of
Mississippi. River: multiply million.
wealth
as
they-
developed
1948 is
farming, cattle, lumber, gold,: oil lion to
other
valuable
resources.
They saw railroads link the At¬
alone.
The
similar
budget for
investing tkeir capital
V"
;
IN-:,
j Issue
Compulsory
of
Health
and
Lewis
ver
(Series B1-B2-B3-B4)
Meriam —The
Building, Atlanta, Ga.—paper.
Two-Way
-
BONDS
;
Insurance, The—George W. Bach-
Street
—
History of
$770 million plus $118 mil public relations—Eric F. Goldman
be spent on atomic energy —Bellmari Publishing Co., Inc.,
16,
The investor today has a 83 Newbury Street, Boston
difficult and additional task—that
Participation in *
INVESTMENT FUND5
23, N. Y.—paper.
man
that
Certificates of
Economic Re¬
search; 1819 Broadway, New. York
whole.
period than $25 million for this purpose
the: vast; rich territory weit an<l in 1947 this had risen to $625
of the
our
as
Fun Js
Cumulation of Economic Knowl¬
edge, The—Arthur-F. Burns—Na¬
f, "In 1930 industry spent on rer Brookings Institution, Washington
Naturally it required brains and search an estimated $116 million
&, D. C.—cloth—$4.00.
ingenuity to build this rich indus¬ and in 1939 $120 million, but the
trial country. It was not accom¬ replies to a questionnaire, of the
Southern Company, The—Book¬
plished without risks and losses. National Association of Manufac¬
turers indicate that ,$740 million let prepared for information of
But they received substantial aid
was spent in 1947. In addition, the
the
customers of the Southern
from (the rapid growth that reFederal; government entered the
system and others—
suited as- our frontiers were, set¬ Research, field with considerable Company
tled.
•
force. In 1930 it appropriated less Southern Company, William-Oli¬
of
Pierce, Fenner and
& Beane/j454J£o; Camden Drive.
than
today.
investors
V With
investor
our
frontiers, through research,
Theirs was :an era
have been expanding in recent
Df frontiers, and undeveloped re:
it
♦j
Mass.—cloth—$1.25;
PREFERRED
-1
STOCKS*
(Sen.* K1-K2)
COMMON STOCKS
(Series Sl^S2-53-54)
»
|
Prospectus from
"
your local
investment dealer or
Tke Keystone Company
of Boston
50
Congress Street'
Boston 9, Massackusette
•
24
THE
(2544)
COMMERCIAL
FINANCIAL
&
CHRONICLE
Thursday, June 10, 1948
Into
Securities Salesman's Corner
for calendar years
millions)
(in
Reports 60% of National Banks' Profits Turned
follows:
as
$3.9
1947.
Capital Funds
4.1
1946—_
Gordon D. Palmer, head
There
could
has
been
never
time
a
when
chandise that the public needs at a time that
in summer clothing in June, a bargain in
they want it. A "scoop"
housewares during the
time when spring housecleaning is in full swing; moth proofing sup¬
plies in May, and plum puddings before Christmas; that is the way
it is done, and the reason it is this way is that experience has proven
that the time to sell people what they want is when they want it.
People do not walk into a broker's office and buy securities just
because they have some idle cash, or because the weather is lovely
and they feel like putting some nice new paper in their safe deposit
boxes.
But the only difference between the advertising and sales
promotion that is needed to stimulate business in' the investment
business and that which is used by successful retailers in other
lines, is that in the investment business STRONGER MOTIVATION
is the key to suocess.
A simple illustration of how this works can
be compared to the department stores which inaugurated winter
overcoat and fur sale£ during August some years ago.- The very
thought that any one would be willing to walk into a clothing store
on a
hot sultry day and buy an overcoat must have been quite a
hurdle for the first advertising executive who tried to convince his
boss that he could sell overcoats during dog days.
But when that
first ad appeared illustrated by wind and snow swirling around a
warmly coated fellow with his collar turned up around his neck,
and it read "Winter is coming, get ready now and SAVE money
by doing it," people stopped, looked, and bought overcoats in
August.
Today the August overcoat sale is a fixture with most
successful department and specialty stores.
*
"
j ,
.
,
.
That is the way it is in investment advertising and sales pro¬
Most people know that they should save money.
They
motion.5
that
idle
dollars
lazy
are
dollars.
They
know
that
money
that
brings them in little or no income at all SHOULD be working
They know that money can grow if they buy stocks
m
companies that also have "growth" possibilities.
They know
that when stocks are low that they should be bought and that
large
profits can be made in this way.
They know that the dollar has
been losing its purchasing power for the
past 15 years.
They know
that this depreciation in the value of their
savings in the savings
banks, life-insurance companies and their investment in United
for
4.2
of national banks.
them.
1943.
per
ciation,
suit
and
President
of
these
of
changes
was
a
de¬
Na¬
1947
1.4% in the average
volume of loans and discounts and
tional Bank,
investments, and their failure by
the
First
1.5%
Alabama.
the
the
Gross Earnings Up—Net Profits
the
tional
Net
Na¬
the
national
banks
did
members, Mr.
Cordon
D.
not
earnings, in spite of
brought
rate
000,000 by the year-end 1947. The
shows further that assets
improvement
report
he
considerable
a
said,
"in
the
in
and
the
(which,
any
in
are
explained in Note 2 on page 70. ;
of
11.3%
penses.
these funds. Average holdings
of
payments.
The
investments, based
condition
the three
upon
reports,
recoveries
decreased
ties
10.4%, while loans and discounts
advanced
26.8%. The overall
re-
losses
and
profits
securi¬
on
could
LENT
down
with
what
is
the
most
unattractive
of interest charges and
preferred dividends is about 1.64
times.
Complete conversion of
the new 5%% preferred (there is
also an old issue of 5% preferred)
were
up
of
excess
re¬
sharply."
into
IN
WHAT
NOT
The
IS
CALLED
HIGH
GRADE
BONDS—GOVERN¬
following advertisement illustrates the
of
use
a
sound
and
constructive investment idea, such as the effects of inflation
upon
boarded cash to MOTIVATE interest in the
acquisition of securities.
WHAT
South Carolina Electric & Gas
ABOUT
YOUR
DOLLARS?
hold
you
surplus
cash
today?
If
have
so,
you
Your
1948
dollars
they did in
as
will
a
in
in
We
have
and
compiled
stocks
that
history has
selected
request.
Ask
for
list
a
should
deflation, which
we
our
YOUR
been
followed
stocks
common
Variations
time
the
to
offer
cash
to
look, and
sell
of
this
campaigns.
contracts
ply of
have
of
fare
shall
well
be
in
pleased
both
to
inflation
send
it
good
common
buy^them
THINK.
now
That
is
securities.
is
be
can
used
there
never
stocks
to
in
a
more
:
J-
:
.
.
to other firms, which
expense.
Thus the drought
forced
to
310
and
direct
propitious
have
share
earnings
compared
with
900
for doing when
,
we
again dropped sharply to 370 vs.
970 in the previous 12 months'
period.
However, with
a
plentiful
water supply in the latter
part of
1947 and other favorable
factors,
earnings
$1.13 in
•
quickly
the
rebounded
12
and
months
to
Over-the-Counter Quotation Services
liberal
of
signed
of
NATIONAL QUOTATION
BUREAU, Inc.
Established 1913
46
Chicago
•
«
-
v i"
i
■
South
company
San Francisco
all the outstanding
Carolina
Power
stock
Co.,
somewhat smaller adjacent prop¬
erty.
Fron\ Street, New York 4, N. Y.
1
buy
of
the
Due to local opposition and
necessity
of
getting
al¬
to be
Com¬
on
the
ca¬
new
steam
near
plant
the
the
on
Charleston, the
was
management
joint
opera¬
improve the earnings of the
tem
because
benefits:
'
of
;
sys¬
the/ following
erating the most efficient units
3.
the
ap¬
base
operations of ' both
systems will not necessitate any
sion
facilities
use
of
of transmis-
both
com¬
panies, reducing power loss and
improving service.
The prospectus on the new
se¬
proval of the State PSC, the SEC
curities shows combined gross in¬
come
FPC, the
sale
Each
was
not
the
year
fun
ing
before Federal income taxes
pok-
foibles and
This year's
large insur¬
own
clients.
its
of
those
its
at
satirizes
Bawl
its denizens,
Street and
the
front page
.
-;
tells how a
company is going to make a
charge each time a bond salesman
ance
phones to offer it securities; an-:
other story relates how President
Truman dedicates his new back
porch with the aid of Dr. Kinsey„>
Young
Girl Should Know."
the author of "What Every
Advertisements
make the
1948
Kuhn Loeb & Co.
Bawl sparkle.
proudly announce that its private
elevator
is
older,
smaller and>
and
Peabody's,
of a Puritan man,
Kidder
than
slower
while a picture
Indian girl advertise "the
an
operation
research
In
America."
in
with
the
keeping
current theatrical
_•
hit, Harris Hall
advertises
Co.
Street
a
Named Desire to tie in its
Car
interest
Chicago Transit financing.
in
'
and
W.
John
Editor John A.
Valentine
Straley have-
year's
announced that sales of this
Journal have
generating capacity.
More efficient
pub¬
Club
Chairman
increase in the present reserve
4.
Journal,"
connection with
in
York
New
the Club's annual field day..
loads.
Combined
Stock.
4 by The Bond
Street
"Bawl
lished June
&
and
the
the*
of
^
steam generating plants by op¬
million
four
and the other draft
every youth of 18 for a period of
two years which he must spend r
selling
securities — chances
are
thev got their information from
/ the hydro plants during good
More efficient utilization of the
bills
new
Exchange,
A fuller utilization of water at
on
Street
New- York
the
on
oldest
<
two
of
volume
shares
-
water periods.
discussing
trading
placed in
In the opinion
tion of the two companies should
Commonwealth & Southern Corp.
to
a
operation Dec. 1.
purchase agreement with
a
to
generating
first unit of which
*
the
The
prove
company
paid
appears
side.
"Bawl
passed by Congress—one of which
would
insure a minimum daily
common
should
the
price
Ashley River
2.
the moderate divi¬
October
the
pacity of South Carolina Power
(the new subsidiary) has been re¬
cently increased by construction
(500 in 1947) detracted
investment interest in;,the
Last
to
the
monwealth
dend rate
from
of
acquisition
though
Spoofed
of
Sales
If you've heard radio commen¬
tators
ended
stock.
For 35 Years
holders
beneficial
ings,
as
to
stock, and the offerings were un¬
derwritten by Kidder, Peabody &
Co. The preferred was offered at
par and the common at 6V2.
1.
well
(par value $50)
shares
of
common
(par $4.50).
Subscription
for both stocks were of¬
rights
fered
(630 being earned in the
first quarter of 1948 vs.
240 last
year). This erratic trend of earn¬
March 31
as
stock
404,293
The
elsewhere) at considerable
1945
preferred
stock
supply have
the company again. encountered
low water, and in the 12 months
ended /; Sept.
30 share earnings
public—and they
get paid
sup¬
in the previous
year; they recov¬
ered to 800 in 1946 (Standard &
Poor's adjusted figures).
In 1947
S. A.
newspaper
was
your
we
wholesale
higher
too—you just have to make them stop,
what
the
power
upon
Obligation V
U.
idea
area,
necessary to run its in¬
steam
plants ■ (or buy
efficient
in
No
—
for
power
made
attractive(investment
INVESTMENT DEALER
Certainly
It
in times of low water
ANYTOWN
mail
an
principally
hydro-electric property, with
standby steam generating facili¬
ties.
Unfortunately it has had
bulletin
Charge
Gas
Columbia, almost
Carolina.
down
No
&
in the exact center of the State of
always benefited during such periods.
common
served
company
South
as
--r;/;//.••'
carefully
Electric
a
prolonged inflation.
Investors
about 50%
1940.
Every postwar period
by
buy only
now
Carolina
centered around
noticed how these dollars have been
shrinking in value?
much
South
cur--
Journal" at Bond Club Field Day
was originally a
subsidiary of
General Gas & Electric in the Associated Gas & Electric
System. On
the breakup of General Gas it became a
subsidiary of Associated and
the shares were distributed to
stockholders of the successor company,
General Public Utilities, in 1946.<8>The stock was placed on the Big
consummated until recently.
The
Board and has had a subsequent
purchase - funds
of
$10,200,000
range of 5%-9 (1948 range 5%- were
obtained
through sale of
m).
80,858 shares of 5^2% convertible
The
Do
Record
reduce
;
earnings to around 820."
Wall Street
investment
EXCEPTED.
would
common
rent share
they
possibly hold today, and that is CASH AND ITS EQUIVA¬
MENTS
con¬
com¬
coverage
government securities has today reached the
of about 50% of their value in 1940 when measured
loaded
seven
51^ to yield about 5.35%, and the
is
around 7.
Over-all;
States
alarming rate
by the purchas¬
ing power of the fiat dollars we now use in this country.
They
know these things just as they know that winter is
coming and they
will someday need a coat to
keep them warm.
But it is the secur¬
ity dealers' job to bring these well accepted ideas FORCEFULLY
BEFORE the great mass of the
people of this country who are
stock,
shares of
preferred
is currently selling around
mon,
considerably; and
loans, in
on
little higher;
common
down
were
coveries,
were a
new
vertible into
salaries and wages increased
15%;
Taxes
dividend
conservative
continued
in operating ex¬
of
somewhat
are
interpret, but for the'
to
present it would appear a sound
policy for the Company to build
surplus to a higher level through
1944)
employment
restrictions
difficult
attributable largely to an in¬
crease
change, too,"
de¬
are
of the prospec¬
page 47
on
These
rate
to
in¬
rate
tus, and the restrictions on use of
surplus for dividends are
lower
was
prior
year
the
earned
In¬
slight
a
loan
nevertheless,
than
national
banks expanded
to $88,000,000,000, a
exceeded only in 1945. "There
was
scribed
steady gross
a
investments
on
nearly 4.2%
sum
net.
no
the
restrictions
dividend
8.4% lower. The reduced net
were
increases
into
over
on
to record
28
There is
whether
to
as
payable
June
17.
eventually be raised. Certain
may
improvement, however,
carry
the capital funds total to $5,407,-
the
dication
stead, net profits before dividends
Palmer
dis-
closes that the
of
national
1947, despite
gross
1946. This
which
Division
Palmer
the
in
gross
earnings.
earnings, Mr. Palmer
shows, "were 9.6% higher than in
than 5,-
are
of
holders June
increase
The
Division to the
000
profits
stock
common
banks went down in
Bank
more
dividend of 250
has been declared
Down
President
of
In
1948.
31,
A semi-annual
an¬
nual report of
ended
months
12
the former
period 810 a share was earned on
the new common stock, and in the
latter $1.01.
of 76.5% to total assets."
In
the
and
March
to maintain their 1946 ratio
Tuscaloosa,
3.0
—"
Complete pro forma figures are
given only for the calendar year
of
crease
3.8
——
1940——
s
4.6
——
1941™
<?>-
Bankers Asso¬
4.6
—
1942—
cent of the total net profits of the national banks of
continental United States in 1947 were plowed back into capital
funds to add strength to the banking structure, according to Gordon
D. Palmer, President of the National Bank Division of the American
Sixty
campaign is timeliness.
Watch your newspaper advertisements.
Notice how the successful department store promotions present mer¬
know
1944
over
good merchandising idea
a
The essence of every successful sales
business.
stimulate
not
3.2
closes increase to
By JOHN DUTTON
1945——
of National Bank Division of ABA, dis¬
$5.4 billion at end of 1947 in capital funds
records,
a
passed all previous
total
of/
more
having been sold.
25,000
than
A few-
additional copies, at $1 each, may
be
had
from
at
Merrill
&
Beane,
York
5.
Mr. Norman
Smith
Lynch, Pierce, Fenner.
70
N. Y.
Pine
Street,
New
Volume
THE
Number 4706
167
COMMERCIAL
1889,
has
Avenue,
231
News About Banks
Si«
*
Sanford
REVISED
at
and
Assistant
of
National
The
New
York.
Mr.
has
been
Vice-President
Bronx
Bank
b
Coordi-
e
nator
Company of New York announces
the
election
rectors of H.
of
ner
its
to
of
Board
Di¬
Clayton Smith, part¬
firm
estate
real
the
of
Tankoos, Smith & Co., and George
in 1907 to become President of the
Banks
he
merged
rector,
Nov.
on
tional
16, 1914, to join The Na¬
he
1919
held
1932
from the
bank
Dec.
Mr. Roberts has
which
he
1940.
sobriquet by
is perhaps
long-time associates
is
"Father
National
the
of
H. Clayton Smith
George C. Meyer, Jr.
National City
period the
C.
Meyer, Jr., Secretary and a
director of Cord Meyer Develop¬
ment. Both
were
men
directors of
of
Bank
Boulevard
the
Forest
Hills, L- I., the business of which
as noted in our issue of June 3,
2434 was recently acquired
by Sterling National Bank and is
page
its
now
Office.
Boulevard
Mr.
semi
During this
nearly 25 years.
-
countries.
traveled in 14 European
Letter
■
became the most
in which and other
diplomatic
positions
he
Conference,
Economic Letter" which he edited
for
War I, and
subsequently served as American
Executive Secretary and Financial
Officer of the Inter-Allied Dan¬
ube
Commission of the
Peace
best known
and that
City
to
Director.
He is an over¬
veteran of World
seas
widely read pub¬
0:'
i;.r
>■:
a
notable stage of indus¬
development. It requires lit¬
tle imagination therefore to con¬
ceive
the
heights of industrial
power that can be reached when
Dominion
the
fully exploits
untapped* reserves
enormous
*
Federal
its
of
in
inadequate labor strength and
the convenience of
1
wealth
cessible
arable
of
lands, and
her
forests,
and pre¬
base
cious metal mines.
Moreover the
great industrial provinces of On¬
tario and Quebec being lavishly
endowed
by
unlimited
with
almost
of
nature
hydro¬
reserves
coal
on
oil
or
for
founded in 1929. He also is Vice-
President and
director of Estate
a
of Bradish Johnson, Inc.
and is
a
Leduc
New
York
and
Long
Island.
pioneer
Hills,
is
Secretary and a director of DickMeyer Corp. and a Trustee of
Kidgewood Savings Bank.
The
Boulevard
Bank
begap
functioning as the Boulevard Of¬
fice of Sterling National on June
1. The arrangement gives Sterling
four offices in Greater New York,
developer
which
of
Forest
of
two
located
in
added
Roberts, Assistant Cashier of Na¬
tional City
Roberts Springett and
children.
v •' " ->'w ' 1
fy
five grand¬
'
...
on
June
18,
1948 to
at the same
agency
v.
and maintain a branch office
Bay Parkway, Brook¬
open
at
application
an
•
Bank Tru§t
The .Corn Exchange
an
sistant
by Richard
A.
Carl
and
Secretary,
drain
if
*
if
of
Bank, 34th Street and Broadway,
station
tional Bank. Peter Schwoebel and
New York,
Harry L. Durland, formerly offi¬
cers
of
Boulevard
Bank, have
been elected officers of Sterling
ing of 3,750 shares of $100 par
each, to $400,000, consisting of
Co. of New York.
■
if
and
of
the
former
will remain in charge of the
Boulevard Office.
'
Frank A.
Klingsmith, and Ed¬
mund F. Ebert were elected Vice-
Presidents
Bankers
of
of
Company
Charles F. Salkeld
Assistant
who
named
on
an
Klingsmith,
Mr.
Assistant Vice-Presi¬
dent, became associated with the
Bankers Trust Company in 1907.
will
He
his
continue
present
duties in the metropolitan division.
Mr.
the
Ebert,
title
previously
who
of
held
Assistant Vice-Presi¬
dent, has been a member of the
Banking Department staff for the
past
20
will
and
years,
assume
direction of the Bank's business in
the southwestern area. Mr. Salkeld
has
been ;
years.
He
with
was
in
Secretary
the bank for 33
made an Assistant
1930
and
1941.
He
Assistant
from $375,000, consist¬
4,000 shares $100 par each.
An application of Macy's Bank
for permission to open branches
at 1007-1009 Flatbush Avenue and
Tilden
2145
also
Brooklyn
Avenue,
filed with the New York
was
State
Department.
Banking
'■'00'
an
it was
June 2 by S. Sloan
President.
was
was
Banking
State
York
New
Department announced on June 4
and
Vice-President,
announced
Colt,
Trust
York
New
The
-
jp'
*•••
Savings
City
Empire
of
Bank
plans to increase to
2% the dividend rate on amounts
New
York
of $300 or more
which have been
deposit for one or more con¬
secutive years, if its earnings con¬
tinue
at
currently
satisfactory
on
levels,
June
on
dividend
creased
President,
Diehl,
Charles
announced
it
is
stated
is
balances
1, 1948,
which
rate,
to be paid on
maintained
after
July
expected
would
in¬
The
1.
make
Empire
City the first Manhattan savings
bank to announce plans for re¬
sumption
of
2%
a
dividend
on
savings deposits. The 2% rate is
the maximum now permitted for
banks
in
New
York
State.
The
York
New
The
State
1
144
Mount
Mount
Vernon
Vernon.;
:i:;;
of
Bank
the
Trust
on
of
Company
June
Huntington
since
1934, died
Hunt¬
at his home in
5
and
ington, L. I., in his 73rd year.
;
Born in Huntington, a member
of
an
old
Long Island
family, he
graduated from Huntington
High School and began working
for the bank at the age of 18.
He was a former President of
was
the Suffolk County Bankers
ciation.
:.
iV"--
"■■ K
Sammis, and a daughter,
Frederic J. Albert Jr.
W.
*
Mrs.
State Bank
:00
merged into the Manufacturers &
Trust Company of Buf¬
of
Park Avenue
*
i'
:V;>
will
con¬
position
Office.
*■*.
in
v
:;'0
George E. Roberts, former VicePresident
and
Economic
Adviser
of The National City Bank of New
York died
on
June 6 at his home
in
In
appointed Di¬
rector of the U. S. Mint by Presi¬
dent William McKinley; later he
1893, he
was
bank is
a
rate
or more
November
Savings
1,
on
deposits
of
would take place on
Empire City
incorporated in
next.
Bank,
tained there
Merchants
as
a
the
serious ob¬
Unques¬
overcome.
"Times
Union"
of June 3,
Smith started to work
Mr.
the
as
Free
the
November Domin¬
redemptions.
of
With the
demand
for
purposes
widen
November
as
a
result of
offerings.
Stocks
regard to the prospects of the con¬
tinuance of a bull market, espe¬
-
for
cially in
1914
and in
messenger
a
Canadian
throughout the list registered de¬
clines but the longer range opin¬
ion still remains optimistic with
the old Traders National Bank in
1903
the
market.
a
eries should
which
■',v,"0
with
of
free
paper
the oil, base-metal and
issues.
•
became Assistant Cashier. He held
1924 when he
that position until
was
made Cashier of the National
of
bank
was
Union
In
Rochester.
Bank
1928
with
consolidated
Trust.
He
that
the
named
was
CANADIAN BONDS
a
Vice-President in 1929.
*
*
if
■:
'
-
The Howard Savings Institution
of
Newark, N.
J.,
June
on
1
Managers to
larged its Board of
GOVERNMENT
en¬
by adding six members, ac^
cording to the Newark "Evening
PROVINCIAL
21,
the
bank
were
MUNICIPAL
:
Frederick
CORPORATION
W.
Birkenhauer, President of Wagner
Baking Corp.; George A. Brakely,
Vice-President and Treasurer of
College of Engineering; Ralph R.
Rochester, N. Y., in charge of the
week
some
are
be
to
stacles
issues.
The
comparatively
little affected by
the spot rate is
likely to display further strength
but the margins on future deliv¬
branch
nection with the merger a
at
dividend
in
bond
tourist
Princeton University; Dr. Allan R.
rate which
$300
fluctuations
dollar
intensification
under the title and charter
latter institution. Jn con¬
the
in
present
steady and were
the
ion
"Elected at the noon session at
Ebenezer
of Ebenezer, N. Y., was
Traders
falo,
if im¬
exchange position would
be revolutionary.
Before this objective can be at¬
News," which added:
Effective May 29 the
provincial
nadian
Asso¬
Surviving are his widow, Mrk
Kate S, Sammis, a son, Bertram
in
tion
Sammis, President
in his 91st year.
his
dollars, whereas
added:
W.
Addison
week there was
in the external
internals remained
ports were replaced by exports of
these items the effect on the Ca¬
Avenue,
Larchmont, N. Y., following a
lingering illness. Mr. Roberts was
the
in
S.
U.
cially
funds after
reserves
Central tionably the greatest impediment
South West Street to Canadian economic progress at
was established at Ebenezer. The
present paying V/2%;
foregoing announcement was made
is expected to con¬
by the Board of Governor of the
tinue on all accounts of $50 and
Federal Reserve System on May
over, which do not meet the re¬
29. An item regarding the pro¬
quirements for the higher divi¬
posed merger appeared in our is¬
dend. After July 1, the bank will
sue of May 6, page 2001.
also change its dividend payment
*
it
dates to November 1 and May 1
Chester J. Smith, Vice-Presi¬
instead of January 1 and July 1 as
dent of the Union Trust Co.\of
at present. The proposed increase
in
Treasurer
tinue
the Dominion's
on
of the New York
Railroad to
and
the
activity
period of persistent
strength weakened slightly under
pressure of offerings in connec¬
1936.
since
During
greater
vast virgin
part. They now constitute a heavy
Mr. Smith has
Dengel, formerly Assistant Trust
Officers, have been made trust
officers of the
Fiduciary; Trust
for external expansion are
becoming increasingly important.
been with the bank
the
of
of Brook¬
lyn, N. Y., it has been
Clooney, formerly As¬
the
south,
maturity
scope
all
efforts directed
exploitation of her
power
the
to
nomic
announced
A. Brennan, President.
been
has
Smith
-
Bank is retained by Sterling Na¬
staff
this side
section of the bond market espe¬
Brevoort Savings Bank
J.
John
her
toward
". ;■*
.
Vice-President
elected
lyn, N. Y.
Street,
and Lexington Avenue. The entire
on
riches of iron, oil and
coal. Within the scope of the Do¬
minion's new policy of greater
economic independence the cur¬
tailment of imports of these es¬
sentials can play an invaluable
P.
Terence
6629-33
maintain
location."
*
«
^
its approval to a certificate of in¬
crease of capital stock of Macy's
New York, and an office
is also maintained at 42nd Street
interest
Canada's eco¬
will come ap¬
propriately at a period when this
country is reaching a stage when
external sources of supply and
bor
■
"This
Bank; a daughter, Amy
Boulevard
Queens. The main office of the
bank is at Broadway and 39th
Que¬
deposits alone
enormous
iron
incited
have
group
1
Depart¬
ment of Banking on June 4, an¬
nounced that on May 28 it had
authorized the County Trust Co.,
169 Main Street, White Plains, to
change the location of its branch
office
from the Mount Vernon
are
the
and
bec-Labrador
motive-power,
a
,
member of the Real Estate Boards
of
new
Credit
This situation however is rap¬ of the border sufficient to sug¬
States, if not in the world, with a Bank of Prague, Czechoslovakia idly changing. On the one hand gest its early solution.
to maintain an agency at 67-69 the depletion of' U. S. reserves of
circulation today of 150,000.:
Thus
the
next
and
possibly
Surviving besides his widow, William Street, was surrendered iron and oil is beginning to cause greatest era of Canadian economic
on May 20,
according to advices serious concern, and on the other development is now in the proc¬
Georgena Kirkup Roberts, are his
made available on May 28 by the hand the world demand can no ess of materialization.
sons George Bassett Roberts, ViceFollowing*
President of The National
City New York State Banking Depart¬ longer be satisfied on the basis of some 50 years later the similar
Bank of New York, Henry Allison
ment, which in its weekly bulletin the present supply. The point has course taken by her great neigh¬
license to the Prague
A
its kind in the United
lication of
May
was
settlement
of Dutch,
agricultural workers, and the ad->'
mittance
of a large number of
European displaced persons.
An¬
other vital prerequisite is the at¬
traction
of
fresh
capital espe¬
cially from this country. Happily
as far as this problem is concerned
the spectacular oil discoveries at
2, with the New York State Bank¬
ing Department for permission to
it
the
Isles,
farms of
border has concentrated on
the development of the readily ac¬
thp
York filed
since
Bank
British
the
convey¬
air of immigrants from,
by
on
Cord Meyer, founder and
Boulevard
director, of
a
tak¬
ply of these commodities south of
Company, 13 William Street, New
been
is how
this connection is the
ance
of sup¬
sources
constructive the
Government
of would-be settlers. Notable?
sage
Canada hitherto mainly in view
of
immigration
drastically relaxed,
more
ing active steps to assist the pas¬
iron, oil and coal.
Mr. Meyer, a grandson of the late
had
on
rigid
The
and what is
that:.V*-'- 'k--. ' now been reached where plans
license
surrendered in for reconstruction and new devel¬
connection with merger of Prague opment have to be curtailed for
Credit Bank into . Zivnostenska lack of
adequate supply of these
Banka National Corporation. New basic essentials.
Canada also has
license: issued
to
Zivnostenska now a further compelling reason
Banka
National Corporation on to stimulate by every means in
Smith
"
policy.
laws have been
electric power do not have to rely
*
modem
of
trial
"Home
stockh older
31,
a
the
and
S. Sanford Model
retired
He
of
News"; also a
when he became
Adviser.
Economic
In
Vicewhich he
position
a
Credit
and
Bronx
of
dependence
in this respect Canada has at last
instituted a vigorous immigration
Ed¬
itor
York,
appointed
was
President,
until
New
President.
the
Assistant to
as
of
B&nk
City
roots
present
tained
Manager
Business
bulk
her
the present time is the Dominion's?
population deficiency. Fortunately
Promotion Di¬
reappointed to the Mint Director¬
for the
sources
the
and
power
notwithstanding
requirements of these essen¬
tials, has nevertheless already at¬
many
ship by President William Howard
Taft resigning
four years later
Canada,
industrial
her
Adver¬
tising
and
was
of
country has been largely founded
iron, oil and coal, which still consti¬
of
resources
life-blood
external
Officer,
for
the
civilization.
years
Continental
mercial National and
National
was
1910 .when the Com¬
Chicago. In
tute
Rela¬
tions
of
Bank
National
Commercial
and
its vast natural
on
Ac¬
Public
resigned
but
Roosevelt
Theodore
The economic greatness of this
New
tivities
President
by
reappointed
of
Business
mm
was
By WILLIAM J. McKAY
of
Model, who will
CAPITALIZATIONS
Sterling National Bank & Trust
Canadian Securities
$
Model
(2545)-. 2*
Park
Two
Street,
West 125th Street.
S.
Bankers
and
OFFICERS, ETC.
at
33rd
elected
NEW BRANCHES
CHRONICLE
FINANCIAL
offices
at
<
CONSOLIDATIONS
NEW
&
is
East
Ave.
banker.
office,
this
his 45 year
Said the Rochester
celebrating
Cullimore,
President
of
Newark
CANADIAN STOCKS
Layte,
President
of
Purolator
Products, Inc.; Jesse B. McCullen,
Vice President of N. J. Bell Tele¬
phone Co., and Bernard M. Shan-
ley,
senior partner of
Young,
Shanley, Foehl & Fisher, Newark
A. E. AMES & CO.
INCORPORATED
law firm.
Savings, said Waldron
Chairman, increased its
board to 21 according to the pro¬
visions of the new banking code
which
fixes
the
limit at that
Howard
M. Ward,
number."
(Continued
on
page
39)
TWO WALL STREET
NEW YORK 5,
WORTH 4-2400
N. Y.
NY-1-104$f
26
THE
(2546)
COMMERCIAL
&
CHRONICLE
FINANCIAL
bonds, fell in Group A; Group B
to the extent -rated,
Present and Prospective Electric
companies,
of lxmole A crecins, wniie
and Baa credits uniformly fell
back to 1919, I commend this sur->
(Continued from first page)
ing.
Triple A bonds were selling
close to the level of Governments,
and the differential for slightly
weaker
issues
was
historically
relatively narrow until you got to
public
utility pre¬
ferred stocks follow a generally
similar pattern, reaching a peak
in market price and a record low
in
yield in the early Summer of
1946 when, for a number of weeks,
Moody's high-grade average stuck
a 3.40% basis with the me*
around
dium grade average at 3.69, a dif¬
of less than
.30
basis
ferential
points. The change toward higher
yields started in the later months
of
1946,
and became particularly
acute toward the end of 1947. The
lowest
prices
highest yields
came in February, 1948, when the
high-grade average was 4.07%,
and
with the medium grade at
differential
of
almost
50
points.
been
4.56,
a
basis
Since that time there has
considerable improvement
a
in the preferred stock market and
the same average, about the mid¬
dle
of
May,
medium
ential
As
of
grade
at
almost
matter
a
3.90%, with the
4.48, a differ¬
was
grade
of
60
basis
fact
the
points.
medium
reached
average
its
high
yield ooint in 1947 at 4.59.
Utility common stocks advanced
sharply in 1945, as a successful
outcome
clearer
of
the
later
and
became
war
in
when
sold
off
100%.
low
the Baa classification.
High-grade
quoted 99y2-100y4, to yield 3.11%.
new
offering was slow and
syndicate restrictions were
removed on April 6th, the bonds
The
the
in
anticipation of the repeal of the
excess
profits tax for the year
year
1946. A strong equity market con¬
tinued until the Summer of 1946
when sharp declines
on
and were quoted 100%They continued down to a
April 16th of lOOVs-%, a
yield of 3.23%, but have since re¬
covered to 100-101%, a yield of
3.16%.
Also in March,
Power
40 million Ohio
Company
(rating
"AA"),
3's
due
offered
were
compared
44
in
with
the
a
high of almost
Spring
of
1946.
The
present recovery has carried this
average to almost 36.
v;f\oK :■
The
to
averages
referred
which
I
have
for
all classes of
utility
securities, representing yields on
seasoned
outstanding issues,-, do
not
by any means reflect the
prices
of
marketing new issues,
particularly those of other than
the very highest
grade, after the
turn
New issues to be
came.
cessfully distributed had
suc¬
to be of¬
at
Securities
and
traded
in
provide
sufficient
market."
the
price
syndicate
restric¬
tions remained in force until their
He
expiration by limitation
May
1st, by which time the general
improvement in the market had
bailed them out, and they are now
quoted
101%-101%,
to
yield
on
2.91%.
the
In
there
preferred
given
be
can
a
stock field,
number of
illustrations:
,
,
In
July, 1947, Florida Power &
Light attempted to market 150,000
shares Preferred Stock by com¬
petitive bidding, but no bids were
received and
the
offering was
withdrawn.
In
September, 1947,
100,000 shares Florida Power &
Light 41/2 % Preferred was offered
as
a
negotiated deal by under¬
writers at par.
The price looked
attractive at the time
the month it
and, during
kept in syndicate
was
with price restrictions maintained;
four-fifths were sold. On
almost
October
tions
the
30th
price
removed
were
90-91.
Y
there
stock
re¬
day when
were
re¬
as low as
sagged to
is quoted
17%
nine
of
much
September, 1947,
shares
Gas
Tennessee
Transmission 4%% Preferred was
offered
by underwriters in
gotiated deal at
103, to
ne¬
a
yield
4.13%.'
60 per cent
as
these
of
nine
had
same
selling at 105,
yield 3.90%.
When price re¬
strictions were removed, the new
4.25% Preferred dropped to 93%,
to yield 4.56%.
The current mar¬
company was
to:
ket
offering
yield 4.36.
is
about
97 %,
to
25%
equity.
books, and,
much
This ratio
t
'water'
was
now
per
eliminated
by
regulatory action.
:
;
; "In addition, the
ratios, per the
of 1935, were also over¬
pre*
company.
Examples of Price Trends
Some
of
examples, both in the
bonds
and
preferred
point this up:
market
is
was
quoted
The
101%-102%,
as
current
yield
to
4.11%.
A very recent issue is Oklahoma
case
stocks,
'
•
April 1st, the stock
low
as
98%-98%.
Gas
&
Electric
company
In
Preferred.
originally
The
asked
for
January of 1948 Southern
California Edison
Company sold at
competitive
bidding
to
under¬
competitive bids for 65,000 shares
on
March 30, but the date was
postponed to April 5, and then
writers 40 million
cancelled. On April 8, these shares
were offered as a
negotiated deal,
(rating "AA").
3%s, due 1973
The underwriters
purchased them at
102.02, with the
intention of
and with
102%,
would
very
At
dicate until April
re-offering them
which
at
represent a
that time the
Southern California Edison 3's
of
1965 were
2.975
Even
yield.
selling to yield 2.83%.
before
the
formal offering
the underwriters found
a
chilly
reception and the
offering price
was
ing
reduced to
102.187, represent¬
3% yield.
At that price the
a
bonds
though
were
promptly sold, al¬
underwriters
lost
the deal, after expenses.
the
money on
The
current
moved up to
market
has
now
a 5%% dividend
rate, at
104, td yield 5.05%. While it sold
slowly and remained in
.
.
.
8.75%
depreciation
about average and
much as 15% was
reserve
a
was
reserve of as
rather
excep¬
tional.
Today the average com¬
in our 70-company sample
has depreciation reserves amount¬
ing to 22.5% and the reserves of
pany
only
seven
even
a
companies fall below
15% level."
same address
MciLntire
sioner
Commis¬
satisfactorily
stocks
that
the
common
of
companies having the
weaker capital
ratios,; sell at a
lower price
earnings ratio and
usually at a higher yield than the
stocks
of
companies
Of
more
con¬
same
stock
the price earn¬
course
ings ratios of particular
common
stocks
may
be distorted by an
unusually high or unusually low
percentage of earnings paid out
in dividends, as the
yield factor
is probably of more
importance
relation
companies
to
the
capital
best
are
If electric
going
to
utility
to
current
market
104%-5%,
an
105%-1053/4,
constituted
third and had
new
earnings
*
it
equity
with
compared
as
agreed
effort should be madeto encourage the letter as part of
any
long-run financial program.
The
increased
flow of puolicV
is
generally
that every
insurance, the greater:
saving into
role
played by the government—'
reflecting in part a cnanged world-
situation, and the related changes
in the rates and structure of taxes,
all
help to intens-fy a problem of '
long standing, that of ra.sing risk
capital. No workable solution to'
this
problem
is
likely
to
be
reached which does not recognize
these
other
and
institutional]
changes in our economy
past few decades."
V
the
upper
median debt ratio
a
37.5%, very little preferred
stock, and common equity includ¬
ing surplus of 58.7%. At June 30,
;1947, the
common stocks of these
companies sold at
an
average
of
16.4 times
earnings and 20.5 times
dividends. Group B showed only
slightly higher ; debt ratios, the
median
being 40.8%, but due to
greater
use
the
of
average
40.1%.
Earnings
average of 13.1
earnings at June 30,
sold
and
of
an
stock,
equity was
this group
common
valued at
were
preferred
at
17.5
1947,
times dividends.
Group C had
the median
stock
less prominent than in
was
Group B,
amounted,
of
a larger debt burden,
being 54.2%. Preferred
and
common*
the
on
equity
average,
to
the
capitalization. The
average
Group
C
equity
was
priced at June 30, 1947 at 9 times
earnings and 15.4 times dividends.
The
used
names
by
of the 70 companies
Commissioner
McEntire
have not been
average
disclosed, but their
market
price
probably
corresponds pretty closely to those
of
the
Dow-Jones
Public Utility
Averages, to which
already referred.
Common Stock
I have
t
Commissioner McEntire-further
demonstrated
in
the
that
sample
>
all
companies
Obv.ously
pective
to
those
the
over
the
new
form
money
Convertible Debentures and
gen¬
Preferred Stocks
/.-•
the
New
*
!
;The
of
Capital Requirements
United
States
Commerce
,
Department
has
recently made
a study entitled "Business Financ¬
ing in the Postwar Period," in
which it is pointed out that "capi¬
tal requirements amounting to $51
billion for non-financial corpora¬
tions in
led
to
1946 and
business
for
in
the
of
preferred stock convertible into
the
to
stock
direct
over
the
Edison.
the
of
worked-
for
years
Telephone &
Commonwealth
'and
The
principal
disadvan¬
of mechanics involving
of
bonds
in
hundred:
one
dollar
pieces, and the problem of
the small stockholder who usually
receives only fractional rights to
subscribe
and
to
the
whom
sub¬
many
years
on
Two recent instances of the use'
possible
of
convertible
the form of the
liquidity built
war
years,
,
ex¬
during the
up
but a-good deal of this
disappeared in
1947,
it
as
shown by the very substantial in¬
crease in security issues
in that
Over
two-thirds,
amount of net
ing 1947 took the'form of bonds
was
with
the
distributed be¬
preferrec
and
common
much
former
th(
important of the two. The
of
net equity issues
ir
1947, i.e^ both common and pre¬
more
about the
was
1946, but there
was a
same
as
ir
much largei
rise in bonded indebtedness.
Life
insurance
companies absorbec
nearly four-fifths of the increase
in debt securities
during 1946 anc
individuals
bought
while
stocks and sold
bonds
on
3%,s
In
each
offered
and
par,
in
offered
stantial
March
this
of
debentures
case
stockholders
to
at.
selling for sub¬
premiums: Baltimore at
are now
105%-I06%, and Virginia Electric
The
eonversioh'vift the Virginiaf casej
& Power quoted at 109%-9%.
the 'was. right
of
security issues dur-'
the remainder
were
$16,677,100 Consolidated Gas
of Baltimore 15-year 2%'s, offered
in April; 1947, and the 11,753,800
Virginia Electric & Power 15-year
were
in
cess
debentures
the
year.
1947,
period
a
one
use
alternative
an
This has
American
Telegraph
tage is
as
marketing of their
stocks.
common
sources
investment
■
ferred,
both of debentures and'
use
common
available
stock
stock market has led'
common
to the
deficiencies in th£ supply of capi¬
tal, particularly equity capital.'
During .1946 a very substantial
part of these requirements wa.<
tween
v
suited with its low interest rates.
the available
upon
year.
.
scription itself is probably hardly
—focusing attention for the first
had
,
inevitably-
funds
time
,
grow.ng pressure of de¬
a
mand
1947
-
The unsatisfactory condition of
well
volume
of
finance
advantage their
requirements, they must
a yield of
intermediate high make every effort to maintain or
build up sound capital structures.
a 2.80% yield.
The cost of money has a direct
In March, 45 million
Columbia
relationship to this factor. It can
Gas & Electric 3%s, due 1973
(rat¬
ing "A") were offered at 101 y4, also be demonstrated that the
to yield 3.18.
At the time the harder the going in the money
Columbia 3y8s, due 1971, were
market, the more difficulty will
2.82%, after
of
A
34.2%
Certain experiences of the past
may be relied upon as some guide
for the future.
Group
.
Structure
,
*
>
of
.In the
times
Must Build Up Sound Capital
debt
financing,
both
stated
because of inadequate de¬
preciation reserves.
In 1935 an
addition
in general.
books
syn¬
20th, it is now
currently quoted at a premium
over
the original
offering price,
104%-105%. :v
within
industry itself
through depreciation reserve ac¬
cruals, debt discount and other
reserves
and
retained earnings.
In this competition for the in¬
vestor's dollar, there is the tele¬
phone industry, the natural ga<
industry and commercial business
know, reflected
as we
in
erated
of nearly a third of these
companies showed less than
70
Commissioner McEntire divided
the 70 companies referred
to, into
three groups.
The companies in
was
future
books
offered at 101 %, representing
outstanding shares
a yield of 4.15%.
Only about 50%
quality, and, in
many cases, particularly preferred of the stock was sold, and when
stocks, substantially higher than price restrictions were removed on
comparable
securities
or
"'Second, in view of the dangers
in
marketable at a better price.
of the last year and
only nine
others fell under 25% in this re¬
spect.
At the close of 1935 the
With
1
may
dressed up with various wrinkles
in an effort to make them more
preferred
that common
yields.
the
it
investors' ap¬
stocks
common
debt; five
4.10%
of
that
so
favorable
a
praisal of its securities, whethei
they be bonds, preferred stocks
no
servatively capitalized. The
thing is true of preferred
Stock
balance
sound
way for some
the pros-*
offerings oi1
stock outstanding, so
?
particular companies will take,!
equity accounted for the remain¬ f. * ou are more familiar than any whether senior or equity financ-i
one
else with the huge sums oi ing, will depend on the situation 1
der of the capitalization.
Only two
of these
70
*
companies had an money which must be obtainet. within the particular company.
equity of less than 20% at the end from investors over the near-term
as
Immediately prior to the
offering the outstanding issue of
Preferred
Baa
realize
stock and surplus.
Only
these companies carried
demonstrates
,
A little later in
100,000
restric¬
and
in
com¬
prices than the times
factor,
v
~
the
yields of outstanding
ferred issues of the same
improvement
in
the
rating. *
:
;
foregoing it is obvious
that it is enlightened self-interest
for any utility company to keep
its structure, as nearly as possible,
averaged about 50% debt,
preferred stock, and 33%
common
least
From the
to
On March 22,1948, 50,000 shares
at
yields ; substantially
West Penn Power 4.20% Preferred
higher than those represented
by
of
the
panies
"At the end of 1946 these
2.88, 2.98, 3.08 and
May 13, to 2.74, 2.8-3, 2.93 ana
respectively. You wjll note
weaker
reported:
quoted 102%-103%, to yield
2.80%. These bonds proved sticky
fered
the averages of
of
are
quantity
reliable
a
stocks
year
3.27
study "for a
group of 70 companies, which con¬
stitutes
nearly
all
the electric
common
tne
respectively. The recent mod¬
improvement in the bond mar¬
ket nas lowered these yields, as
SEC
utilities whose
At
est
in the Summer of 1947, de¬
veloped some interesting statistics
a
3.05%.
3.29
ers,
upon
at
end tnese were
before the National Association of
Railroad and Utility Commission¬
based
Baa
and
Exchange Com¬
missioner McEntire, in an address
were
and
basis; Double A on
2.60% basis* A on a 2.72% basis
tne
tnereoi,
marks:
average yield
a
capital structures.
*
100.99, to yield 2.95%. At the time
the same company's 3's, due 1971,
occurred, ac¬ were
21,000 shares of
counted for in part, at
least, by
maining unsold. On the
the pressure of new
offerings as the
price restrictions
the need for equity capital
by all
types of industry became urgent. moved, the stock traded
93% and subsequently
This trend toward lower
prices
88.
The-current price
reached a low
point in February
and March, 1948, under 32 for
the
Dow-Jones
utility
averages
as
1978.
be experienced by the companies
with the weaker
paragraph
Group C. At June 30, 1947,
Moody's Triple A sold on a 2.53%
my
the survey by quoting
to
A
in
reference'
tne last)
which paves
of my later re-J
I will conclude
vey.
weie
Utility Securities Markets
1948
Thursday, June 10,
balance
on
the
market
at
time; of the offering.. The
Baltimore conversion was some¬
the
what
under
based
on
first
the
a
the
and
market
sliding scale by which
conversions
at
were
a
attrative rate. Also, the con¬
more
version privilege in the Baltimore
case
did not operate until some¬
a year from the
thereby protect-,
ing
the
outstanding
common:
against immediate dilution before
the money raised through the de¬
bentures might have been put to
work and begun to produce earn¬
ings.
''
•
•
**
thing,
date
more
than
of offering,
-
in
both
1946
and
1947.
According to the Department o'
Commerce
half
of
issues
approximately
in security
1947 was attribut¬
survey,
the
increase
during
able to the industrial and miscel¬
laneous
industries, primarily man¬
ufacturing, while the other hah
is almost evenly divided betweer
the
telephone and electric and
gas utilities.
Manufacturing cor¬
porations, as a whole showed less
dependence on outside sources of
funds
in
1947
than
corporations
billion of ne'
issues
raised
through the
capital markets in 1947 by cor¬
porations other than investmen'
companies, seems to be above the
new
levels of the late 1920's and prob¬
ably was the highest in history
Corporate bank loans increase*$3 billion in 1947, nearly as high
as in
1946, and was equaled pre
viously only, in 1919-1920 follow¬
ing the first World War.
For any one interested in a com¬
parison of bond and stock yield
and other data
of
convertible
the
having relation tc
having Triple-A various types of securities going
debentures
during
of 1947, were
those of
Public Service Company of Colo¬
summer
rado
Service
Public
and
of
*
Inidiana, both of which were con¬
vertible slightly below the market
for the common at the date of
offering,
of which
both
and
are
selling at premiums, reflect¬
the value of the conversion
now
ing
privilege
as
related to the current
market for the
The
generally.
The estimated $4
Two other instances of the use
most
-
common
recent
stock,
offering
of
convertible debentures to common
stockholders is. that of
Consolidated
New
York
Edison
3's.
$57,382,600
Company of
This
offering
to
stockholders-was underwritten
on
the
same
basis
as
that
of
Public
Service
Company
of
Colorado:
bidding took place 011 May 18
and only one bid, in the sum of
$1,000 was received for the priv¬
ilege of underwriting the offer¬
ing and selling any of the con¬
The
vertible debentures not subscribed
for
by stockholders, sharing any
profit with the company over th$
original offering price
on
a
.slid?.
Volume
167
ing scale. The debentures
are con¬
vertible into Consolidated
stock
common
in
the
at
debentures
Edison
of $25
rate
each
for
THE
4706
Number
common
share. At the time of the offering
the
common
stock
was
quoted
24 y*.
the
-The-possibility of profit for
underwriters
depends
upon
tutional purchasers, some
believe
of
company,
with
that
was
electric
an
This
for one reason
another, do not
rights. The rights
not expire
until June 8. In
exercise
do
stockholders,
or
their
view of the premium of over 6%
immediately
tures, the
elight but,
bid for the deben¬
risk
involved
seems
the other hand; the
on
sinking fund
Program oh
the
Almost
on
Dec.
($25
*
■-
10,
nominal.
■
'
•
-
•••'
•
Several companies have offered
recent issues of preferred stocks
•
convertible
into
In
common.
-
January, Northern Indiana Public
„
Service Company offered 272,694
shares .4 % % preferred stock <par
$20). to its common stockholders
fit
18.
The
common
then
was
quoted 15JA-16V2, and the
convert
sion price was 20. Common stock¬
holders of Northern Indiana sub¬
scribed for 16,685 shares,
the .rights, period,^ .the
During
under¬
offered - about
writers
publicly
,70% Of the" shares, or .190,893
Shares,, at Z the offering price to
stockholders^ of 18- less 85 cents
Obtained- through exercise of war¬
rants; acquired by them, leaving a
balance; of 65,116 shares, which
weired taken ,;.,up
by the underwriters at the expiration: of the
subscription period,and placed by
-Ahem, also at 18, without organixzation of
a
,
selling group. The-pre-;
ferred,js-mow jquotfd fractionally
hbov'e the offering price, to
yield
about 4.90%,
*
*
r
x
1
Two very recent convertible
preferred issues are the 800,000
shares Southern/California Edi¬
son
4.56% (par $25), which was
would
retire
16,000
shares
and
annually beginning in 1949, provided they could purchase it at
exceeding the original offer¬
ing price of 26.25; Three other
Preferred
Power z &
\>k%
(2%), Indianapolis
Now
tors
the
the
offering the market
was quoted
217*
cently quoted at
moderate pre¬
a
mean
inflationary
of the
one
maximum
some
the
national fiscal policy.
One school of
thought has more
or
less y
consistently - advocated
monetary and/or price controls tc
inflation.-1
cure
there is
number of
no
In
gas
opinion
my
magic formula to hall
for
business activity and full employ¬
While
some
firming ir
rates
money
be
may
President of The Federal Reserve
Bank of New York, before the
House-Senate
Committee,
I
disturb
need
do
Economk
think
not
this
considerably
basic
rates around
present levels. As pointed out b>
Mr. Sproul, "Prior to 1930
,
short-term
interest
were
rates
long-term
In
.
commonly above long-term
than
the
reverse.
.
theory at least
firm
are
in
long
so
we
as
of the
2V2% rate for long-term govern-1
ment
bonds
demand
a
support
our
have
we
rate
made
there
and
that
is
the
only
opinion, the inclusion of which
will
create
healthy
a
at¬
mosphere for business and stimu¬
a
late
greater
production, so as to
more
nearly bring into balance
the supply of goods with
high
demand, which is a. natural corol¬
lary of full employment at high
gree a
public
wages.
permanent
enterprise
will require expansion as
long as the population of this
country continues to grow. There¬
ing the
trol
*
•
1
Great
which
the
x'
:
a
that
or
mighl
course
stop
we
dur¬
inevitable.
supply
One other factor
might disturb
rates and the prices of securities
and that is
the dislocation of the
law of supply and demand by in¬
dustry
pushing
out
securities
faster than the market
them.
If
of
Qan-
money/, is
absorb
can
industry exercises
restraint
in
its
self-
construction
pro¬
does not flood the
grams and
have
orderly
an
reasonable
to
finance;at
and
market
chance
for
may
2
everybody
reasonable
cost
a?
now in the hands of our fiscal and
he goes along.
original offering fore, to obligate yourself to retir¬
If, on the other
price, jxxx■}■*xx ing what should ; be permanent monetary authorities, not the com¬ hand, each fellow tries to beaf
capital creates an obligation,; if mercial banks of the country. The the other to it, then you may pro¬
'(. On the same day, South Caro**
balance between inflation and de¬ duce
a chaotic situation in which
jhna Electric & Gas Company of- you have the earnings, just as real
flation will depend upon the wis¬
as any other debt but without
re¬
buyers will hold back for ever?
jfered to its common stockholder?
dom with which the authorities
ceiving eitjier the lower; interest
greater concessions and a disor¬
X330,858 shares
mium
liie
over
•
§xk%•preferred at
$50
share.
a
ferred
was
Each
share
of
convertible
.
pre¬
into
7
shares of common, representing a
price of approximately $7.14
per
share. At the time of the offering
the• common
was
quoted' frac-
tionally under this price. The
rights period does not expire until
May 25,fan& at the^ tirne; of pirei
.
paration tit this paper the result
; of the
offeritfg
was
not available.*
rate
Preferred Stock
To nssist ih
Sinking1 Funds'
friarketing preferred
stocks, 'some ; utility companies
have recently included provisions
>for sinking or purchase funds. -'x-X
•;
sorhe IhduSfHat
preferred stocks, particularly : in
the Case of smaller and less known
Companies, have had various types
cf
sinking or purchase funds.
These have served
;X(1> to create
dual purpose:
a
some
market for the
securities themselves, and (2) to
gradually retire the issue. During
the low-yield period in 1946, a
number of large institutional pur¬
chasers, recognizing the unlikeli¬
hood
of
the
permanent
nance
of
yields,
many
mainte¬
such; preferred
which
of
stock
were
as
low
as 31/2%
began to insist on
Sinking funds, particularly in is¬
sues
privately placed or where
the-market
sufficiently
ready
was
not
broad
likely to be
to
furnish
a
of selling. Some ex¬
amples of low dividend industrial
having sinking funds
brought out during this period
arc:
X';• XXV x::x: Xr" x g'.x ■ V-'x.0" ;/'x/:
.
;
,
•
■
••j
H. J. Heinze Co._-._-.
Borg-Warner Corp.
Jewel Tea Co. £
irZ
3.65%
3V2%
3%% 'X
Scovill Mfg. Co.___x____3.65% ?.
Late in 1947, to meet this posi¬
tion of some of these large insti¬
X
wisdom
and
not
was
cau¬
exer¬
cised in 1920, 1929 and 1937, with
public utility company
will be
better advised to pay, if
necessary,
somewhat higher dividends with?
cipitated
the result that deflation
a sinking fund
because, after
all, the rate of return in a regu¬
lated
As
financial
stock
.
serve
money.
expense
bearing
rate, with
a
a
having
the
half
present
the
rates;
would
to
a
2%
action
to
-
such
be
as
ment and
savings at
this period,
tion in
an
to
create
re¬
by
consumers' disposable in¬
The food
issue.
our
unemploy¬
indiscriminate reduc¬
come before it could
approximately
of the
aggressive
general credit restriction, it must
tax
to
take
essary to increase production.
To
bring about deflation
sinking fund
issue, and
47.2%
or
continue to
disastrous check upon the expan¬
sion of business enterprise so nec¬
the
over
amount
$3,541,000
As
to
the; Federal Re¬
System should
duce the existing supply of avail¬
able funds; might well produce a
net savings in service charges on
the debentures after giving con¬
sideration
firmly
pansion of bank credit, but for it
also
of
would retire
am
com¬
the
a
sinking fund: on the basis of a
$7,500,000 issue in both cases; the
operation
that
I
preferred
4 V2%< dividend
of
of
2% sinking fund, and
debenture bearing a
a
25-year
3V4% coupon,
pre¬
follow its present policy of modest
action to restrain a further ex¬
illustration
an
was
once
history.
convinced
industry has relation to the
cost Of
and,
started, was
hard to stop, as has been proved
in those disastrous episodes in our
out
most
be effective.
price situation is one of
serious problems and
alternative, if the annual continued
high or rising prices
savings resulting from the lower
foi? food makes much more likely
an
servicing cost *. of the debentures
were
applied tc the further re¬
duction of the
principal
would
while
be
retired
mately
amount
debentures
in
22
reduction
in
the
agregate
de¬
mand for food (or other consumer
same
"date
Assumptions
x';;,;';X:x;'
As to
there
Business
My greatest concern is in the
ability of companies to marke'
common stocks to keep the capi¬
talization
morrow's money market.
published by
Of
ance.
of
ratios
the
in
bal¬
good
return
capital raised in the first
of ,1948, approximately
$2% billion, only about 10% rep¬
resented the proceeds of common
stock financing.
conscious
stocks to
common
the
as
still
out of the
come
public
of
asset
in the world;
securities, when on most
other forms of wealth/not nearly
so
liquid, he can borrow practi¬
cally whatever the lender is will¬
ing to let him have, I cannot un¬
Schmidt Wins Pfcila.
Bond Club Golf Match
PHILADELPHIA, PA,—Walter
Schmidt, Poole & Co#
honors in the golf tour¬
Schmidt of
took top
portfolios
requirements of
companies them¬
capital. •vXxX'■,,/;/
new
On new offerings of commor
stock, the yield has had to be, and
will probably continue to have to
be, exceedingly attractive.
The
spread between the yields on sen¬
ior securities and
stocks
mon
are
of
those
com¬
probably
now
much wider than they have been
most
past periods.
Indeed, at
times the yields on common stocks
been lower than those on
have
fixed return securities, re¬
flecting
the
hoped-for
future
growth factor.
many
The
narrowness
of
the market
for large issues of common stocks,
over
the recent past, can be well
when
you
consider
understood
unattractiveness to
;
their
relative
investors
high surtax rates, the capital gains
taxes
and
by reason of the
The re¬
other factors.
cent revision of the
tax law may
little way to improve
this situation, but to broaden and
go
held
nament
Z3ra
tne
nual
in
conjunction with
An¬
Field
Day
the.
of
Club
Bond
.
of
P
Philadelphia
held
xii'
1
.
the
at
I-
Philadelphia-
3
M
Country Club.
Mr. Schmidt
played with
a
m /1
handi¬
seven
and cap¬
tured the Low
cap
Award
with
a
Net
was
I
76. Low
won
by W i 11 a r d
Walter
Boothby of E.
H.
Rabbin*
A.
Schmidt
*? ....
Sons, Inc. The popular "Kicker's
Handicap" was won by K. J. Huttlinger of F. P. Ristine & Co.
*
H.
K.
Lloyd
of Drexel
&
Co.
and Laurence A. Brown of Jenks,
Kirkland & Co. captured the ten¬
nis
honors
in
the
round-robin
with
finals
Norbert
William
and
W.
Fleming,
Marcus
of
both
Smith, Barney & Co., winning sec¬
place.
ond
A
1948
Dodge Automobile was
jointly to
William J.
awarded
Wright of Blyth & Co., and John
H. Blye of
Wurts, Dulles & Co.;
A television set was awarded to
and
nated
&
Mosley of Stroud & Co.,
Playboy Automobile do¬
a
by the
Co.
courtesy of Tellier
York
New
of
Francis
to
Kemble of W. E. Hutton & Co.
activities
These
were
followed
some
make
stock
some
by an Aquacade at the Club pool
featuring
a
diving exhibition and
a
water ballet by the lovely Aqua-
delphians.
featuring
a
The Annual Dinner
variety show com¬
pleted one of the most successful
outings in the Club's history.
company
large
production and employ¬
ment, and, therefore consumers'
disposable income.
/ Under present conditions, a gen¬
eral railroad strike would have
been disastrous to the accomplish¬
ment of the necessary greater pro¬
duction to balance the attempted
inflationary
pressures.
A
coal
strike could have the same result,
shoe-string
of the
operating
selves for
are
large blocks of
divestment
utility holding
well
Investors
the
of
enforced
at
to
new
quarter
as
not
speculation but why an individual
can borrow only 25% on the most
amount?
enormous
reduced
Fiscal Policy
government fiscal policy, both of
are vital factors in any at¬
tempt
at an appraisal
of to¬
should
a
R. Victor
•'
credit, unless the policy were car¬
ried to a point that substantially
and
which
" /'
Federal Reserve sales to contract
x /xxx
Any "Look to the Future" must
include certain assumptions as to
business activity and, indeed, as to
A recent bulletin
dered market will result.
years,
(58%) of the 4Mj% pre¬
ferred issue.
X
of
a
goods) by^following a policy of al¬
lowing government security prices
be
remaining
approxi¬ to seek
their own level, or by
$4,350,000
principal
forcing security prices down by
at, the
would
another round of wage increases,
on.
But we cannot expect
and so
debt, all but $93,000
amount
means
preferreds
tion
This
advantage realized from interest
paid. I think, in the long run, a
parative
-r
exercise these controls.
the important Federal tax
or
quirement.
there is no
75% margin re¬
Of course I agree we
mar-
ket with securities destined to pro¬
duce cash way beyond current re-r
we
a
prices,
good reason for
Gross
Question of Supply of Securities
quirements, then I think
inflation
monetary
war was
of
require
lower figure."
suggest
at
theory of
deflated
ent
nc
why rates on shorter-term
obligations could not approach thif
figure. The facts as distinguishec
the
least
the
vestments without any substantial
credit fqr losses. Certainly at pres¬
reason
from
at
capital gains
purchaser is not
frozen in by the amount of the
capital gains tax on successful in¬
money
.
that
so
be
the
derstand.
anticipated, as indicated by the
recent testimony of Allan
Sproul
Joint
tax
also
of
listed
ment.
short-term
should
modification
27
marketable
therefore, ihis equilibriurr
disturbed, we should look
a
continued period of higl
not
in greater enter¬
company preferred stocks do have prise and in greater production.
sinking fund provisions,, but there If this is the right answer, then
the measures which
is definite logic in;
should be
providing a
sinking fund on all senior issues of encouraged by government, and
natural gas companies,
by private enterprise^ are those
x \
X
distributing
If,
is
There
-
real answer lies
a
in
gradually make some reductions,
may be justified by a decrease
in the cost of living.
rales
inflation, and I believe
electric
reductions
some
as
more
standing. Most : of the natural
utility is
wages
although these latter do
importantly reflect themselves
not
important fac¬
shares at any time issued arid out¬
In my
made
and
on
It is
com¬
prices,
pressures.
in
handle
commencing in 1949, at prices not
exceeding the initial public offer*
ing price thereof, not less- than
an
common
rearm¬
is.
is
should be adopted only as a last
resort. As far as can be
foreseen,
of
own
making any assumptions
regarding future security markets
how wisely the Treasury and
a
pur*
Federal - Reserve
effect of which, the
System
there
share; and convertible into eomhioti at $28.50 per share: At the
27 V2. The offering was successful
and the preferred stock was re¬
for
issue of Consumers
new
the
our
production,
increase in
will be to require the
company
erideavorxto purchase annually,
of
total
our
5%
Preferred
Florida Power Cor¬
fund,
preparedness
ament, while they do not repre¬
sent an important
percentage of
Convertible
Light
Power Preferred
chase
own
Program and for
(2V2%) and
poration 4.90 Preferred (3%).
In the
;
goods required for the European
-
Service
our
war, if need be, is the best
way
to minimize the likelihood of
war.
True enough, the added foods
and
electric
utility preferred - issues
recently offered had a : sinking
fund provision: Northern Indiana
time
•
iidence in the future and
certainly
reconstruction of Western
Europe
not
Public
panies have held the line
Presi¬
The adoption of these measures
should strengthen our own con-
sinking fund (or to a lesser de
contingent purchase fund)
is
an
expensive procedure and
ior the
the
over
,
(2%)
offered to the public at $26.25 per
!
of the tax
passage
measure
pro¬
by overwhelming ma¬
are all; in my opinion,
sinking fund but the directors,
by resolution, stated that they
2%
rearmament
Company 4.88% preferred jorities,
offered.»Here the preferred, constructive steps
forward..
was
•
non-partisan basis,
dent's veto,
Edison
.
r
relief
1947, 800,000 shares
Southern California
a
likely* be
a
corollary
gram and the
immediately thereafter,
par))
although in a lesser degree.
encouraging that the steel
forecasters
begins in 1948.
writers
will
and
maximum shares outstanding and
;r.
more
(2547)
econ¬
in the current cost of living. Ex¬
thought cept to correct
inequalities,
1
probable,until
recently.
The think we must have the courage
adoption of the European Relief to hold the line on
wages ana
stock contract did not provide for
get
Slump That Never Came." I
omists
4, 1947.
2% of the
amount of stock which the under¬
may
entitled: "1947: Year of
was
tivity during the year 1948
unlikely than some of our
Dec.
is
CHRONICLE
think recent events make
any im¬
in business ac¬
palachian Power 4.50% preferred,
on
FINANCIAL
portant recession
utility
a
and
some
the
sinking fund,
75,000 shares Ap¬
of
&
Philadelphia Federal Reserve
Bank
the first publicly offered
preferred
which was offered
that
the
electric
utility companies adopted sinking
fund
or
purchase provisions. I
(1) that the offering is successful,
(2)
COMMERCIAL
more
active
market
the
there
elimination
of
common
should
the
be
double
taxation, first paid by the corpo¬
ration on^ earnings and then by
the individual on his dividends.
Phila.
Field
:
Ass'n
Sees.
Day Committee
PA. —Com¬
PHILADELPHIA,
mittees for the Annual Field Day
Philadelphia Securities As¬
of the
sociation, to be held Friday, June
18, at the Llanerch Country Club,
Llanerch, Pa., are announced by
Dudley R. Atherton of F. S. Moseley & Co., President of the Asso¬
ciation, as follows:
Chairman
General
—
Frank
L.
Ford, Jr., E. W. Clark & Co.
Co-Chairman—D.
R.
Atherton,,
Co.
F. S. Moseley &
Committee—Wm. A,
Reception
Lacock, E. W. Clark & Co.; Walter
Hongler,
John
F#
Brooke, Stokes & Co.;
Macomber, First Boston,
Corp.
-
•
Golf—John D. Foster, Real Es¬
tate
Trust.
Entertainment—Lew W.
Fisher,
Sheridan, Bogan, Paul & Co.
Prizes—Russell
Stroud
&
Co.;
W. Ergood,
Wm.
F.
Jr.,
Crowell,
Girard Trust Co.
Publicity—E. Howard York, 3rd,
Doremus
&
Co.
FINANCIAL CHRONICLE
&
COMMERCIAL
THE
(2548)
28
plants cannot augment the
of power because then it
power
The Electric
Industiy in 1948
supply
will
be
a
new
of
case
government
or
investment rather than
and, private invest¬
private
capacity added dur¬ consumption. Constantly increas¬
ments and its committees. I com¬ ing the year.
It now appears that ing wage levels calls for greater
mend to your attention the many for the country as a whole the and greater use of electric labor
-engineering discussions and pa¬ margin of reserve in December, saving devices. New processes re¬
pers which have been made avail- 1948, will be only slightly larger quiring electric power are being
-asble to the industry through the than it was last year. The power developed.
In the farm and rural classes
Institute and by its publications. supply this year will be tight, but
They give to all the benefit of adequate. The consensus of opin- of service the rapid expansion in¬
the special knowledge, investiga¬ inion seems to be that it will be creases. The farm customer is ex¬
tions and advanced thinking of three more years before normal pected to double his present use
in a very few years.
Residential
the various utilities—constitute a reserves can be restored.
forum for discussion and the ex¬
Obviously, we cannot add gen¬ consumption, averaging now about
change of ideas so necessary if eration faster than the manufac¬ 1,500 kilowatt-hours per customer
we
are
to
keep abreast of our turers can make it.
In the early per annum, is also expected to
continue rapid growth. Household
rapidly advancing art.
part of World War II the Produc¬
New
Industry problems having to do tion Board diverted to military help is prohibitive in cost.
with accounting, rates, personnel, use
2,200,000 kilowatts of steam concepts of comfort and conve¬
sorb the
(Continued from first page)
Thursday, June 10, 1948
government
ment.
situation is not crit¬
it will improve
the new equipment on
and
now,
rapidly
as
is delivered.
oraer
>'/ Financing;"
insurance, material supply, trans¬
portation
equipment,
operating
methods, design, power sales and
the many
other matters which
concern
have had careful
us
sideration
b.y the
Ifae Institute.
con¬
Committees of
Committee members
have been liberal with their time
■and skill in making the work they
have
undertaken
successful
fruitful, and I know
and
will all
you
join
with me in expressing
gratitude for their efforts.
our
As you know, the Institute con¬
ducts joint research and commit¬
tee
with
work
ciations.
other
trade
asso¬
Substantial
and impor¬
has been made by
these
joint undertakings, - espe¬
cially in the heating field, and in
tant
progress
standardization.
The
Institute
is
looking ahead
towards
the day when we must
again sell electric service.
is
sponsoring
sales
training
courses,
planned
a
lighting
pro¬
gram and a national sales program
electric
on
in
are
kitchens.
the
You., will
•
Other steps
making.
to
as
from
reports
the,findings and
-
•
...
turbine
Steam
booked to
ahead.
manufacturers
capacity three
to
capacity is being in¬
5V2 million kilowatts
per annum
for central stations and
for
kilowatts of
of the results of their activ¬
aome
ities during the talks which
he made before you
convention.
-done
during this
much
is
being
So
these
by
forward
will
varied
of
groups
looking and devoted
the scope of a
this
In
the
single address such
begin to cover it all.
to
narrow
companies
the
are
direct
bene¬
ficiary of their activities, but
customers—the
ing
the
electric
housewife
efficient
our
enjoy¬
service
the
range,
of
an
manufacturer
increasing plant production with
infra-red
electric
or
furnaces, and
the farmer who
produces more
with the aid of his electrical hired
hands—these
beneficiaries
of
the
are
of
information
the
at
ultimate
interchanges
the
Load
of
and
to the
nation
is
supply
power
the
business-
managed,
taxpaying utilities of
the country. Last year
they gencrated 81.4% of the
power, and
made 86% of the sales to ultimate
exclusive
consumers,
the'
of
en¬
ergy
not
producedby industrial plants
contributing to the public sup¬
ply. Their responsibility therefore
Is great.
•
,
at
this
tremendous
before
the
a
Other
companies'
suitable
situation
supply, but the
improving steadily.
is
performance of the manufac¬
turers of power supply equipment,
in my opinion, is beyond any com¬
parable achievement in peacetime
industrial history and they are
entitled to
tion.
hearty commenda¬
our
I
take this occasion to pay
tribute to this, their latest of many
achievements.
.//
.
_
•
The Growing Demand for Electric
Power
.v.';.:-/.
I want to
give
We
are
continuing
customers
1946
at
record
high
1924
to
record
a
tomers added.
The
demand
tinues
Hew
to
and
for
electric
rise
power
month
expanded
us.
by
uses
con¬
month.
of
elec¬
tricity are developing, labor costs
industry and in the home are
placing a - constantly increasing
b£
premium
on
greater applications
of electric power. Last
year's pro¬
duction of electrical appliances is
illuminating
on
this point.
It was
three times the prewar production
ia volume.
Thus, despite the fact
that additions of new
generating
capacity this year will be much
larger by far than in any previous
year in the history of our indus¬
try, the growth of power demand
in 1948 is expected to
nearly ab¬
case
of
present pro¬
and as to its adequacy in
.there should arise a state
■'*'
war.
There
to
will
be
new
The
addition
adequate
out the present
carry
power
rearma¬
ment
program, although the high
civilian consumption of aluminum
plus
the
mand
increased
military de¬
possibly require some
may
adjustments
of
case
again
in
that
the
war
be ,confronted
from
production.
regard.
nation
with
civilian
to
In
would
a
con¬
wartime
We would again have
around-the-clock
operation
>
of
much
consumes a
of man¬
shortage
of
materials,
shortage of transportation.
'
If I
of customers topped the 1946 rec¬
ord, and the first quarter of 1948
view
has
of
run
last
ahead of the first quarter
year.
We
approaching saturation
ings
however,
are,
93%
are now
programs
far
so
establishments
are
as
con¬
occupied dwell¬
of
served, and service
under
Construction
will
close to
way
this
carry
latter figure
100%
in another three to four, years so
that further increase in customers
must
depend entirely
tion growth and
For the
dustrial
new-
on
popula¬
housing..;
•
use
of electric power has
This in¬
dicates that the available supplies
of important materials and labor
and economic considerations have
for the present at least leveled off
the general industrial expansion.
other
electrification
of
industry
and
continued expansion of electricity
the
basic
supply.
power
for
as
outlook
elements
electric
favor¬
more
for
of
these
wartime
In other words, electric
generally is-'not regarded
the critical
as
'
limiting factor,
of the capacity situ¬
or
A summary
ation may be reduced to the fol¬
lowing points:
.
The
the
/•"•••
;
supply
reserve
has an-ade-
at
margins
remarkably high de¬
of system coordination to get
most
out of all generating
facilities
within
and between
different
areas,
areas.
Everything is being done that
practically be done to add
new
capacity.
can
The turbine factories
to
are
loaded
capacity.
Because
struction
curities
obtain
to
terest
rates
of
money
market.
this
fact,
additional
the
con¬
Federal
the
lower
the
The
in¬
prevailing
industry fi¬
nancially is in the soundest
con¬
dition in its history. Fixed charges
use cf capital in our indus¬
for the
per.
must be equity securities or
year
their
these must
equivalent, and
of such attraction to investors
be
they will find a ready mar¬
it is impossible to, market
utility equities without good earn¬
ings, present and prospective.
In
addition, the securities must be
especially attractive if the indus¬
try is to win out in competition
with
other
vestors'
for
business
dollars.
far
So
the
in¬
have
we
done
well with this problem.
In
the first five months of 1948, new
capital funds in the amount of
millidn have
$646
been
sold
by
utilities, bonds providing
$513 million, preferred stocks $62
million
and
stocks
common
Reported
$71
temporary fi¬
bank
loans
has
$68 million.
I
believe our future prospects
good. Electricity is a great bar-*
gain, and gets to be a better one
are
relatively
every
for
growing
it
is
day.
The demand
rapidly.
New
for power are
uses
constantly be¬
The high cost of
ing developed.
labor in home and factory prompts
use
of
cheap labor-saving
tiie
try have, over recent years, been electricity.>/•;/>;'
1"/r
sharply reduced. Capital invest¬ ,/T e c h n 01 o gical
improvements
ment, financed largely from earn¬ and superior management are inings, increased $1.7 billion in the creasing efficiency and lowering
10 years ended 1947.
Long-term relative qosts.
Money * rates are
debt
reduced
was
Writedowns
$2.7
for
of
billion
count
reserves
million.
account
made.
for
accrual
ol
$580
plant
were
of
Annual
depreciation
from 1.7% of plant ac¬
2.4%, while depreciation
on
balance sheet
our
from 11% in 1937 to 22% in
rose
1946.
Long-term debt in relation to
utility plant was reduced from
,
50%' to
41^;;v^^Vr;:.;,^- //.//;
The financing, however, of a $6
"
billion
an
program
in
four
years
is
undertaking of such magnitude
that
we must turn to
the
investing
low.
The
proportion
of
our
re¬
latively low when compared with
many other businesses,
So
far
We
have coped with the
we
inflation
which
the
are
has
taken
place.
in the
only business
country that has not raised prices'
again and again. I fully appreciate
that
continue
cannot
we
this
on
for long should the infla-»
tion spiral continue or prices
re-?
course
main at current levels.
is
danger that
no
ourselves
out
of
we
But there
will
price
market, as
doing. I am;
our
to the consumer in relation to his
tained earnings and other sources
other
will
probably exceed $2.1 billion
four-year period, leaving
$3.9 biliion to be raised by the
sale of securities to the general
public. - If we apply to our capital
in
the
the
needs
theoretical
but
well
balanced
capital structure ratio3
of 50% bonds, 25% preferred stock
and
25%
common
stock and
sur¬
plus, the division of this $3.9 bil¬
would
be ; debt
and
bank
loans, $2.2 billion; preferred stock,
$1.1
billion;
stock/$600
and
retained
million would
common
Surplus
earnings
of
$500
provide ; the
remainder
V
equity capital.
Let
us
relation
billion
$200
a
these
the
re¬
whole.
as a
level of
gross
na¬
about
$22 billion cash for capital expen¬
There
this capital.
are
two sources
earnings,
sale
of
the
reserves
and
new
for
One is cash genera¬
tion within business itself
depreciation
the
through
and retained
second
securities
is
and
the
bank
At current business levels,
of
cash
generation
amount
from
$14 to
$15 billion, so that approximately
$7 billion must be provided by
private
the
that
sure
are
of
cost
is
expenses
electricity
going
to
runs
investors.
Thus,
the
$1
-
We have much greater
of
earnings than most industries.
We
have
W3 sell
inventory problem.
no
service essential in
a
and
peace.
the
householder,
Its
cost
and
of
consequence to most businesses. ; /
/ Our
facilities
and the greater
built at pre-inflation prices.
were
Over the
shown
$4.
10
past
account per
of
are
long-lived
portion of them
years
dollar of
Even with
an
plant
has
our
revenue
from
reduction
a
$5.50
prices, at the end
of
/'//'J
revenue.
A
inflation would be
runaway
ruinous to all alike.
Like
every¬
else, I believe that further in¬
But if
it is not, all business will be in
one
flation should be stopped.
the
same
the
utilities
boat.- The
businesses will not
worse.
On
We
local
change for the
■
///;/.'//•
in the main local indus¬
are
We
can
demonstrate
character with
great
be
-competition
us.
for
serious
There will
the
limited
supply of capital to be available.
our
effec¬
tiveness. Every dollar of our plant
investment
is
in
the
area
we
Every customer must
a
of
other
to
the contrary it should
improve., /-/v/
tries.
situation
in relation
be
have
1951
of
investment per dollar of revenue
should still be under $5 per dollar
force
we
to
increase by 40%
plant account at present in¬
our
area.
Obviously-
to
minor
total
dustry.
war
is trivial
serve.
requirements of all in¬
,
stability
billion required by the electric
utility industry each year is ap¬
proximately one-seventh of. the
new
con¬
tinue to be lower and lower.
that to support
us
tional product will require
ditures.
industries
some
flated
to
quirements of industry
Economists tell
the
•
examine
now
in
amounts
of
•
;
ex¬
exposed to inflation is
penses
public to supply most of it. Cash
generation within the companies
frcm
depreciation reserves, re¬
problem ahead of
of
of
on by
earnings. Fi¬
nancing operations were confined
largely to refinancing existing se¬
within business
a
its
on
some-*
than $400 million
exceeded
present,, loans.
are nar¬
■•
There is
gree
r
»
States
power
quate
row.
•
United
although
For
the longer range, however,
the prospects are for much
greater
outlook
generally
able vthan
past several months in¬
remained about constant.
the
great task
a
The remainder of
more
nancing through
am
power
is
a sum
cash generated from
million.
consideration—shortage
thing
of construction was carried
would
power,
market.
million.
lion
boil down to relative
senior securities, of which
approximately half a billion dol-
electric
greater volume of electricity with¬
out materially increasing the de¬
mand. The question of shortages
soon
business.
is well known. During the
period 1937-1946 the greater part
ranks and
correctly advised, gov¬
ernmental authorities atJ present
" existing
The
pace.
1947
is available to 97%.
of
add
broke the previously
record for new cus¬
great
all
gram
factories, which
few figures to
a
own
the country.
years
con¬
for carrying out the
.
version
cerned.
to
;■
in short
The load and capacity situation
has been, and promises to
be, of
concern
estimates
reserve.
our
in
industry that stands
an
rate
among Washington authorities as
to the adequacy of electric power
interruptions,
any
equipment and materials
continue
The
however, it will be
question in
large
for their capital
programs.
So will
money
The ability of the industry to
finance the cash requirements of
its construction program over past
ditions and this country's adopted
rearmament program have raised
of
child
feet, without benefit of tax
exemption or government subsidy.
be eliminated, so
The troubled state of world
a
manufacture,
1951, barring
indicate
rate
convey a little more clearly the
growth picture for electric service.
Capacity Situation
key
the
Even
committee
conference tables and the
studies,
the reports and handbooks which
the committees produce.
The
by the utility
companies and about 4V2 million
by various governmental agencies.
the electric
sense,
for
Question of Rearmament-w'.
service
•
•
billion if 40% of the plant
industry at the end
1947. It is $42 for every man,
has risen
kilowatts will have been
into
put
men
who are the backbone of the Injstitute that it is impossible within
as
million
have
own
effective scale.
,
-
Raising such
*/ •'
plants and otherwise
prepare; to
integrate' and inter¬
change just as they did during the
last war, but on a larger and more
gen¬
utilities
which is being
during an inflationary
and
and
the investment
Our
ket.
way,
woman
both with other utilities and with
.
other
that
of
-v
industrial
isolated
industrial
plants.
From V-J Day to the end of 1951,
the
$6
limit useful power inter¬
or
con¬
account of the
as to permit the utilities to further
improve
their
interconnections
erating capacity will have been
installed, of which amount 18V2
of
' ;V //
•
changes should
Their
creased
committees.
hear
//;
Coordinated Operation
vent
years
recommendations of these various
will
SO.
you
obtain
to
period.
orders, at a time when / It is
gratifying to observe the
they were struggling with recon¬ smooth
running and well estab¬
version and shortages of material
lished
practice of interchanging
and
labor.
Although deliveries
power between companies of the
are very
slow, they are steadily same
general region wherever sig¬
increasing in volume. The utility nificant
advantage in the public
industry expects to install about service can be
gained. Many parts
4,600,000 kilowatts of new gener¬ of the
country are served by soating capacity this year.
Only called
power pools, operating on
once, in 1924, when 3,800,000 kilo¬ a
basis which materially reduces
watts were installed, did the rate
the amount of
reserve
capacity
approach
anywhere
near
this
formerly considered desirable.
year's figure. Construction for the i In the interest of national de¬
first quarter of 1948 was 115,000
fense and of economy, it is im¬
kilowatts ahead of the schedule
portant that restrictive laws and
for that quarter.
regulations which in effect pre¬
are
how
about
carried out
more
of
sums
business-managed
the
greatest bargain offered today in
these United States. We must keep
it
of
one
that all of you are
sure
under
postwar
about 23,000,000
You
and
more
be calling 011
market at the same time for
$6 billion that will be needed for
the expansion program that the
Electric power and energy is
We
have.
to
another one-half million kilowatts
f
receive
time to time
allowed
for
will
annually, are
especially attractive for insurance
companies and will find a ready
has
financing recently.
I
every
some
cerned
electricity.
swamped the manufacturers with
cnce
It
capacity
were
we
call
nience
ordered for
utility use. We have not yet re¬
placed the shortage of reserve ca¬
pacity caused thereby. During the
conflict we put in every kilowatt
generating
Nearly
done
industry
tne manufacturing industries
lars must be placed
,
am
telephone
and
gas
and
improvement
The power
ical
The
All
our
employees
are
local
citizens who live and work in. the
a
resident
of
the
per¬
area.
Many thousands of our customers
are holders of our preferred and
common
ing
stock..
The
list is
grow¬
daily. When the divestment
program of the Holding Company
Act is
THE
Number 4706
167
Volume
completed
few short years
a
hence, over six-sevenths of all
outstanding electric utility oper¬
ating
will
in
stocks
common
company
be
hands
the
of
in¬
the
vesting public and the remainder
will be holding companies set up
on
local
a
and
rities have
under long term contracts without
of
utility
the
the power could be wholesaled by
the
government
to
distributors
„
investor.
discrimination
The elimination of dou¬
taxation
dividends
on
ditions.
would
investment
in
our
chal¬ encourage
opportunity.
We equity and would enlarge the base
.should enco urage widespread from which equity money could
/
ownership in - our local areas of be drawn.
our equities.
To do so we must
(3) The tax structure of the
pursue a reasonably conservative
country, as now set up, has dried
policy to assure continuity of div¬ up the major sources of capital.
idends at an established rate. This It has ended the savings of peo¬
will
attract
the permanent in¬ ple who ordinarily invest in bus¬
vestor.
We
may
well consider iness. Insurance is the only form
and
an
.
sale
of
equities to our cus¬
instalment basis,
our
tomers
an
on
the
For
just
securities will re¬
attractive
savings most people have today.
We most earnestly hope that this
situation
to
investors, and
than hold our
that
we
can
more
own
in
the
competition
for
did
not
taxes may
peace
ness
political and economic instability.
We in the utility industry, as in
all business, recognize the neces¬
sity for defense preparedness and
pledge our facilities and organiza¬
tions to its accomplishment..
W We are called upon to aid Eu¬
rope while we are hard pushed to
take
care
of the needs of
On the present
destroy
Capitalism
In
to our country. Busi¬
recognizes the world-wide
bring
in the
corrected
be
basis,
of life
our way
more
completely than would a
revolutionary movement to the
left.-;/
the
funds of investors.
>
The end of hostilities
will
future.
near
have
I
reasons
utility
given,
main
local
increasing
thereby further
ownership.
of
addition
minds;
a
this
we
are
battle for men's
a
struggle to prevent Com¬
munism
from
from
within
upon
us
win
this
or
overwhelming us
imposing its will
conflict
and
'
The regulatory authorities hav¬
ing jurisdiction over the various
utilities would, Of course, see to it
that
fees
rates
and
fair, and
are
that whatever benefits may result
distributed
properly
are
where
applicable, passed
We must
of
the
and,
to the
on
The
ment dams that is under way
sections
There is
ing.
of
need
no
'
»■•••
and
(10)
But
of
basis.
in
country.
the
the
economic
we
or
result
failure
The
of
industry finds itself today
in a position which is truly amaz¬
ing. Each of us in our local areas
other
A job well done is
If
to meet
a
the
boost
part hurts every
utility.
customers.
are
detrimental
changes
in
eco¬
our
\
If
we
to think
are
success¬
the
light of what it
the
industry
should
a
hori^
the
to
We
may mean
the
|VA 25% tax on the national prodi tict is not a tax on industry and
business alone, it is a tax directly
or
indirectly
million pro¬
walk of life. Ten
on
ducers in every
60
years hence the number will be 65
million. They will need jobs. New
productive facilities must be pro¬
vided;; outmoded processes re¬
placed by new; new plants built
to place new products and inven¬
tions oh the market.
This means
the investment of risk-money
This
industry
cerned in two directions:
someone.
is,
by
con¬
(a) New production facilities is
•Synonymous with
• an
market for electricity. '
;
■
'
"v
.
centage of the total equity capital
meeds. '
;■
steady flow of equity capital
iinto industry is the most impor¬
tant insurance of a high level of
productivity. This industry should
-align itself with other industries
;and other public spirited citizens
"to remove the road blocks to the
;generation of equity capital, We
-mention only a few of these road
1 blocks.
V
With government expendi¬
:(1)
tures equalling one-fourth of the
*penditures taking one-eighth, it
is apparent that government ap¬
propriations in all other directions
: should
be stripped of all but es¬
sential spending, thus providing a
'base
for
the
reduction
of
taxes.
job.
7;7 v
of
cornerstone
very
its ilk.
and
.
Communism
So the utilities
are
in
the forefront of the battle
against
companies have
already been lost. Others are in
the midst of the struggle.
Still
others while presently somewhat
removed from actual contact will,
if
socialization of our industry
Statism.
•
;
Some
continues,
maelstrom
it
as
into
drawn
be
nears
your
the
door¬
step. In the end, we will win, lose
or draw as an industry, not as in*
dividual companies.
"
:
All of us, I am sure, favor flood
prevention and control and recla¬
mation, and that electric generat¬
ing facilities should be installed
at the government dams where
economically feasible.
I believe
that the public wants flood control
and reclamation.
It must be made
clear to them that there is no
cial
or
Federal
economic
need
for
so¬
the
Government to enter the
in
competition
utilities
under
supplying water to farm¬
ers
or abating
high water.
The
existing distributors of electric
power in the area should market
the power from government dams.
business
taxpaying
power
with
cover
/national product and defense ex:
the
Socialization of electricity is the
increasing
t
(b) Our needs yearly for equity
•capital
are
an5 important
per¬
A
do
'
of
There
in
are
which
handle
several
the
practical
distributors
ways
could
the
marketing problem.
One of them, or a group, could
build the power house and install
the generating equipment at each
government
'The incidence of taxation should
Power
ibe changed so that there will re¬
under
pay
least $7 billion per
:year which will provide the nec¬
essary equity to insure the present
high level of production with con¬
taxpayer
at
license, pay
on these facilities, and also
the government for the use
of falling water and the dam.- The
government in each case would
retain full
control
over
the
dam,
and
operate it for its primary pur¬
of flood control, reclamation
or
navigation, or a combination
of these purposes, as the case may
tinued
employment at present
levels, and the insurance of em¬
ployment for those who are reach¬
pose
ing the
be.
(2)
age
of wage
Double
earners.
taxation
of
dends should be ended.
discrimination
works
equity financing.
divi¬
This tax
against
It tends to
en¬
This method would afford the
greatest
relief
to
the
taxpayers,
and be of maximum aid to recla¬
no
where
for
:•
i
larger daily.
of employees
joined our ranks during
and postwar years and
experience in peacetime
:
Our indus¬
local
stand.
growing
operation.of the business.
There is a great need for a pub¬
lic information program at the
a cohesive phil¬
osophy, a creed, and a unified
policy program to guide our acr
tions so that everyone will know
,,i
level
inform
to
custo¬
our
mers, employees and our invest¬
ors
of the policies of the local
cohnpany, its plans and prospects
the
future,
and
Suggested Policies
I'outline
May
a
;
'
of these
few
issues and policies.
We should take our place beside
others who are striving to bring
about—
[■
(1) A full understanding of the
sociological
effects: of
government in business, the with¬
ering results of a planned econ¬
omy and the delineation between
individual rights and statism.
adverse
(2)
The
sound
tax
allow
and
establishment
tion of the
; a
designed to
the forma¬
capital needed for
program
encourage
new
free economy.
our
of
J
7
(3) The elimination of tax ex¬
emption
for
proprietary
busi¬
nesses, both public and private,
and the other valuable and unfair
special privileges enjoyed by gov¬
ernment
of
pense
in
business
at
the
ex¬
else.
everyone
The utilities of the United
should continue to accept
(4)
States
full
responsibility for meeting the
present and future electric power
requirements generally of the ter¬
ritory they now serve, and of such
other areas to which they can ex¬
tend their power lines from time
to time,
"V
.
(5) Each utility should improve
interconnections
its
both
with
of the
it
area
serves.
discriminatory, preferential taxa¬
tion.
There
is
lack
a
of
under¬
standing, as an industry, of our
accomplishments in'.the postwar
period and of/our plans for the
future. We find ourselves, in com¬
mon with other businesses, but in
the forefront, subjected to a drive
for the socialization of industry.
There is too little understanding
than dur¬
ing the past war. /
The
(6)
water
the
we
resources
control
of
of
the
of the nation and
floods
through
projects soundly conceived, well
engineered, economically justified
and administered so
as
not to de¬
stroy private business, and includ¬
ing, where warranted, the instal¬
lation of generating facilities to
utilize the falling water.
(7) The promulgation of a
structive
power
policy by
con¬
the
Federal Government which would
define its functions in relation to
mation, flood prevention and con¬
the
trol, &nd navigation.
its
power
business,
4
Bucher Heads Comm.
On
Foregin Banking
The
Committee
;
Foreign.
Banking, a group of officials rep¬
resenting 40 financial institutions
in
New
on
York, Boston and Phila*-
delphia,
announced
today
the
National Bank, as Chairman. Alsp
elected by the Committee for the
ensuing
year
were
Philip
F~
Swart, Jr., Second Vice-President
of
the
Guaranty Trust Co., as
Vice-Chairman,
and. Elzear
E.
Leger of the Americaa Express
Co., as Secretary. This Committee
meets monthly at the New York:
Clearing House to discuss foreign
banking problems and procedures.
New York Stock
Exchange
Weekly Firm Changes
The New York Stock Exchange
has announced the following firm
changes:
standardize
practices, delimit its activities
-
Interest of
...
the
late
Arthur
Broderick in Bache &
F.
Co., ceased
May 31.
Interest
of
the
Guion in Scholle
May 20.
Interest
of
late
the
late
Dickinson,
limited
Smith,
Barney
&
May 28.
John
A.
Philemon.
partner,
in
Co.,
ceased
-
Boston
*•
Club
Outing ;
Have Large Attend.
To
of
,
Brothers ceased
BOSTON, MASS.—The outing
the Municipal Bond Club of
parties
June 16 and 17 at the
on
Hotel
Statler.
Joins
Walston,
'
.
V
to The
(Special
SAN
John
.
Financial
Chronicle)
FRANCISCO,
R.
ciated
A
3
Hoffman Staff
CALIF —
has become asso¬
Page
with
Walston, Hoffman &
Goodwin, 265 Montgomery Street,
members
operation of the capitalistic
particularly the benefits
derived therefrom by the indi¬
vidual. f
We
//.,t"">?'•'
:
v/.
facts
are
are
on
private
by
side.
our
We
electric
that
demonstrate
business
is
and best for the nation.
must
service
superior
the
We must tell
fact
ized.
a
business-managed
vital part of private
cannot
We
hope
public, busy with its
will
understand
our
the
story
social
that
own
un¬
to every segment
political struc¬
This is the way
industry.
to make friends for the
Good
service; abundant power;
rates; improved public rela¬
tions; cooperation with regulatory
bodies;
security for employees
and investors; improved efficien¬
cy;
engineering
advances;
all
these we expect to give in full
low
measure.
But
.we
'
'
v 7
must do
York
and
Irving Lee Adds
to
The
Financial
Chronicle)
SAN JOSE, CALIF.—H. Irving
Lee & Co., First National Bank
Building,
have
added
David
H.
Wilson to their staff.
With A. E. Weltner & Co.
especial
to
CORAL
Florence
The
Financial
GABLES,
E.
Brown
ciated with A. E.
of Kansas
Chronicle)
FLA.—Mrs.
is
now
asso¬
Weltner &
Co.
City.
Rotan, Mosle Incorporates
GALVESTON,
TEX. — Rotan,
and
Moreland, Inc., has
Mosle
been formed.
Offices
are
located
in the Anico
and
at
Building, Galveston,
806 Rusk Avenue, Dallas;
another office
is
also
maintained
in
Beaumont, Tex.
.
Officers of the corporation are
Arthur C. Cooper, President; Es¬
ter M. Hock, Secretary-Treasurer;
Edward Rotan, J. Ludwig Mosle,
and J. Marving Moreland, direc¬
tors.
'
more
than that
difficult days. We must
work with others to sell and resell
in these
capitalistic system and
vent the spread of socialism.
our
H.
fSpecial
We must
and
again.
over
New
Stock
Talbot.
the
ture of this nation and do it over
and
the
affairs,
position
tell it to them.
less we
of
our
ford &
the retell
that
are
of
Francisco
We must
join with others to strengthen the
opposition to socialism and com¬
munism.
San
Exchanges.
V. He has recently been with Hanna-
badly in need of a broad
public information program at the
grass
roots i and on a national
level.
It has been too long de¬
layed. We have an excellent, even
inspiring story to tell. Economic
i
tell
should advocate—
development
industry think straight,
wisely and talk effectively.
system,
business and should not be social¬
I think
we as an
act
of the
utilities
manner
if
a larger number
V'At the national level, this in¬
of out-of-town
guests, including
dustry, in common with other
businesses, is facing the problem municipal men from New York
City and Philadelphia. The out¬
of a shortage of investment capi¬
tal due to operation of our income ing to be held at Concord, Mass.,
on
June 18 will be preceded by
tax laws. We find ourselves sub¬
traditional
two-a-day
highball
jected, as other industries are, to
enter - into
interchange
agreements,* and otherwise pre¬
pare to fully integrate their oper¬
ations on an area basis, in an ever
plants,
effective
principles
Boston will have
other utilities and with industrial
more
our
free people.
as
can,
we
must, meet the
challenge of these times. We will
interde¬
the
pendence of the local utility and
Federal
taxes
main in the hands of the investor-
dam
Commission
war
had
try badly needs
we
is
who have
We should keep
towards them.
list
We have; thousands
aims before us, and shape our
courses
of the word.
do in
a
whole.
objectives and
local areas and on
national basis.
every sense
of
.•
our
stand fast to
beliefs
We
Millions of shares of the securities
our
our
We find ourselves fac¬
operating companies are held
by thousands of stockholders and
as
outline
policies in
our
we
try, we should broaden
zons, and revalue what
nomic system, • our way of life,
Taxes remain high. The and our standard of
living.
;V:
ol inflation rises.
The
This complex and bewildering
need for huge Federal revenues
situation is a challenge to every
continues.'
Federal
expenditures
one of us; to do our full duty and
continue to absorb One-fourth of
more, to think clearly, and to hold
our national product and defense
steadfast I to the principles upon
expenditures is one-eighth. • The
v/hich our, nation was founded,
paramount problem in this coun¬
and which have guided us to our
try is the maintenance of a high
present position of strength, free¬
level of industrial production and
dom and material prosperity. The
business
activity to insure the
challenge is especially great to the
continued working of
our
eco¬
utilities.
Adequite electricity is
nomic system, which still has the
essential in peace; it is of vital
maladjustments
imposed
on
it
necessity
in
war.
The utilities
<during the depression and war must
provide it in abundance.' If
years. How are we to insure con¬
they do not, the Federal Govern¬
tinued high productivity?
ment must shove them aside and
dustry in
indus¬
an
pressure
ex¬
of
our
as
people.
vast
a
demands
and
needs
ing the greatest need for financ¬
ing in any period of our history.
The industry is today a local in¬
ideologies
decisively;
defeat fully the challenge of the times,
we must think, act and talk as an
our liberties; a
compromise victory industry which is part and parcel
in far-reaching and of American life.>V;: /v,: 7::
we
with
confronted
are
and
pansion program to take care of
utility
one
Information Program
This
an
v
our own
taxpaying utilities.
Public
struc¬
are
the end of
half-way
ex¬
isting regulatory bodies to Public
Power, so as to place these gov¬
ernment enterprises as nearly as
possible under the same rules
-•
country,
our
its
do
We
must
2&
election of L. Allan Bucher, Sec¬
ond Vice-President of the Chase
th
should advocate
extension of the authority of
industry. On national issues and
policies, we will be judged by our
accomplishments on a national
to
'
■'
in the main local utili¬
are
ties.
have as¬
the industry
the
be
may
area,
surrendered.
of this happen¬
•
We
the
it
any
this
of
Government
should stand ready to assume
electric power, obligation to
proposed means that under our
present laws, socialization of our
industry
will
spread
to
many
other
in
sumed
vast and widespread pro¬
of construction of govern¬
gram
Federal
responsibility
consumers.
for all.
from without.
cleanly
means
may
all
to
confronted with
"
A
ture
Statism
or
to price or con¬
as
the in¬
reassure
dustry.
■ ■ '
(8) Our utilities should absorb
and market power from new gov¬
ernment
dams
by building the
generation and transmission facil¬
ities, or leasing the facilities, or
purchasing the power output un¬
der long term contracts.
(9) 'Should the Congress decide
to halt the growth of any Federal
power undertaking or to divest
leased to the local distributors. Or
appeal to the small
an
(2549)
and stabilize and
government power house
generating facilities could be
industry is
generally to put their common
stock
on
a
sound, conservative
dividend basis. Our equity secu¬
policy
Thus is presented to us a
lenge
CHRONICLE
The
corporate borrowing. The
courage
ble
basis.
area
COMMERCIAL/Sr FINANCIAL
pre¬
We
Hubert Brennan in NYC
in
Hubert H. Brennan is engaging
a
securities business from of¬
fices at 115
Broadway, N, Y, City*
30
(2550)
THE
COMMERCIAL
FINANCIAL
&
CHRONICLE
gold,
Irredeemable
Money: Privilege
Responsibility
Without
(Continued from page 2)
understand,
know
such
or
wnat
spirit
of
develops
hopelessness
not
abou»
do
tan
'there
and
i
opponents
to
even
proper
ac¬
correc¬
entitled;
the clear
the
of
Reserve
the
both
the
Treasury
banks set aside
what is wrong with our monetary
tive
books
gold the
banks
-
gress that
had these
Federal
should
notes
have
issued
been
Reserve
applied
bank
notes
as
right
exchange
to
,
.
dom
by the destruction of the
right of private property in gold
is not
often
that
if
world
the
\ ™\
to
Chamber
to
suppose
knew
conditions
return
our
redeemable
a
reasonable
seems
how
the
impairment, in a multitude of di¬
rections, of human liberty.
The far-reaching ramifications
of the impairment of human free¬
prop¬
It
use
fruits of one's labor for gold is a
sacrifice that involves the serious
It is almost incredible that
this liberty-loving people could
have
apparently
approved
its
government making it a criminal
offense, punishable by confisca¬
tion and fine, for an American
citizen to own or hold gold in his
Reserve
and
other
can
one's
of
and hold
own
same as any
put our currency on
basis domestically.'
against their gov¬
ernment
to
control its prodigal
spending, and that the sacrifice
the part of any
on
that such redeemability is
only ; instrument which the
people
erty.
tax law of Con¬
a
right
American citizen to
$660,000,000 of fiat paper
money, to which they were not
entitled, to their reserves; and
lethargic acceptance of things
they are.
Since the people in
general do not quite unaerstanc
they become docile and
the
on
added
t
system, or believe it hopeless to
try to correct the situation, or
fear that they may be in error in
proposing a plan for rectification,
deposits
Reserve banks to which they were
tney do not
wnen
tney
matters,
of
tne
Thursday, June 10, 1948
just
prevented
redeemable
a
cur¬
it would have explained. It
explanation to the pub¬
rency
owed such
lic. The fact that
tion
it
such explana¬
no
forthcoming suggests that
was
unable to provide it.
was
This suggestion rests upon good
ground
simply
because
world
conditions
provide
no..." reason
discussed
today, and whatever to the effect that we
it obviously is not widely under¬ should not or could
not, return
stood. The general public clearly, to a redeemable
currency domes.-
in
possession, and this in spite of the
examples of shattered econ¬ confuses the convenience of paper tically.
Indeed the ..converse is
omies, poverty and suffering di¬ money and of the checkbook with the -case.
The widespread chaos
rectly attributable to irredeemable the basic and most important, in world conditions provides ad¬
Currency notes outstanding (un¬ paper money."
little-seen, and p o o r 1 y-under- ditional reasons why our mone¬
der the heading of "Federal Re¬
Mr. Frost is everlastingly right stood, functions of gold—those of tary
system should be of the best
serve bank
in what he says, and there are a
notes").
clearing agent, of a reserve —why jt should not involve the
These fiat notes and all oui other 'outstanding
bankers who against promises to pay, of a store¬ disease of irredeemable
accordance
with
the
law.
On
many
March
31, 1948, there were still
.*370,000,000 of these fiat National
_
tion.
is for these
It
reasons
government dictatorship
can
that
take
hold
so easily and, in a very short
time, reduce the mass of people
to
state of general helplessness.
a
It is also for these
that it
reasons
other
irredeemable
constitute
domestic
the
paper
great
hold
mone^
bulk
of
is
and
Chamber
important that alert, vigorous,
fearless leadership be pro¬
vided by those, such as officials
Chambers
of
of
Commerce,
who
should be able to understand what
is
happening and who should
avoid drifting with a popular tide.
(b)
Our
politicians in general
have not been helpful: Most poli¬
ticians have given relatively little
attention to this particular de¬
generation in
nomic, moral,
political,
our
eco¬
and social fabric.
Most of them apparently have no
clear understanding of it, and the
of the
essence
issue involved ap¬
pears to have escaped their atten¬
tion
almost
altogether. •
Their
interest in it, like that of the
mass
of people, seems
negligible. They
tend to wait until great harm is
done or untij a catastrophe pre¬
cipitates a political issue.
Then
they become active.
But it must
be a political issue first of all.
A
helpful, wholesome bill in the
field of monetary
reform, unless
pushed by the Executive Depart¬
ment, can lie till doomsday in a
Congressional
Committee
if its
Chairman hapoens
to
be
attuned
solely to political pressures and
if the bill does not seem to him to
be part of
important political
an
agitation.
; Our politicians in general have
not provided the people of this
country with good leadership in
respect to the sin of issuing irre¬
deemable promises to pay.
They
have gone along with, and in fact
have been responsible in great
degree for, this soecies of degen¬
eration
in
the
behavior.
standards
:
'"/V; /'
of
our
V'■
5
The question is: How much in¬
fluence did the inactivity of the
majority
our
or
politicians
respect to this issue have
New
Ycrk
merce?
Chamber
of
on
in
the
Com¬
.
(c) The responsibility of the
Treasury and Reserve banks in
this
picture:
The
Treasury and
Reserve banks/aided by the pas¬
cooperation of the commer¬
sive
cial ; banks,
have
played
an
important part in leading a con¬
fused Congress
zation of such
into
the
a course.
authori¬
And since
they got the right to issue prom¬
ises to pay while being permitted
to
the
escape
corresponding
re¬
sponsibilities,
they have fought
turn and in every way
to keep these special privileges.
at every
(
They have gone even further:
Some of the Reserve officials have
argued that the Reserve banks
should not be required even to
maintain
reserves.
That
is
an
attempt to reduce responsibility
for meeting promises to1 a very
low level indeed!
Still
further, and by way of
the Treasury and Re¬
authorities have even failed
in their responsibilities as to the
example,
Commerce
(d)
The
wittingly
such
notes
By
Treasury
were
this
gave
authorized
transaction,
by
the
itself $660,000,000
are
house
The
question
as
the
New
to the
York
of
the Treasury, Federal Reserve au«
the
American
of
Chamber
Bankers
was
American
respect
all
nance
of
an
the mainte¬
ment
paper
along with
maintain
to
the
money
in this country.
In other
by their passive inaction
and cooperation, they also in ef¬
ability of
words,
is
fect
-
reveal
meet
the
principle of
responsibility
Treasury. They
themselves
their
paying out
money just
satisfied
satisfied
as
liabilities
deposit
irredeemable
as
they apparently
have
to
their
pointed to an ex¬
tremely important danger in what
the
banking fraternity
in this
country has been, and is, doing.
to
paper
have
re¬
own
banks
paid to them in irredeefti-
Reserve
able paper.
paper
is
5.
The Chamber Is
Over
coin
able number of outstanding and
greatly concerned bankers. As an
example of the latter, Mr. J. H.
Frost, Chairman of the Board,
Frost National Bank, San
Texas, in
Texas
address
an
Bankers
lic
on
May 25
and
Financial
nity supporting irredeemable pa¬
per money, seeking special privi¬
leges for themselves while avoid¬
ing the assumption of the corre¬
sponding liabilities, and, as cus¬
Chronicle
27), said in part: "It would
seem
that bankers, as the cus¬
todians
of
the people's money,
be
the
in
more
interested
than
maintenance
of
'
that
are
the
liabilities
of
the bankers
depositors
or
or
of
basic
to
step
that
terminate
the
obligation
to
at-
of
a
was
ings,
that
by
rency
redeemable
in
gold,
with
a
gold.
safe
If
the
saver,
place for his
sav¬
he
must
an
use
this
respect
the
supporters
system.
6.
silver
one
has
or
irredeemable
paper,
discovered -throughout
cannot have.
<
!•
the
.
::
Representative Howard Buffett
of
Nebraska,
of
the
most
penetrating commentators on the
fundamental and far-reaching im¬
one
The Chamber
That
able
The
or
other commodity. But gold,
of the safest investments man
ages, he
•
in
a
nation
Have
An
should
states
have
the
to
be
one
jective
ditions
rapidly
justify." ;;
as
as
time
prove
us
the
the
vague
an
Chamber should use
"world conditions" as
for
excuse
con¬
the
not
foreign
through
under
same
our
we
institutions; and,
them,
these
allowing
rights that
some
same
foreigners,
"world
condi¬
tions," is not clear. *///;;;
As a. part of this
picture, .the
question arises as to whether the;'
Chamber considered the
arresting
fact that we tax our people ta
give
foreign
banks
on
">;> *
and to foreigners,
Is; Willing to
Foreigners, but Not Our
people
which
.
and at
mutually ad¬
People, Access to Our Gold
soundest
world
detract from
Chamber
Why
"this
plications of the loss by the people /•Now just what, precisely, do
of the United States of a domestic world conditions have to do with
gold-coin standard, has brought the adoption domestically in the
the matter down to the basic is¬ United States of a gold-coin or
sues involved.
He has correctly gold-bullion standard? The Cham¬
and repeatedly pointed out that ber does not explain what the
human freedom
rests upon the connection is, ,or just what world
redcemability of paper money in conditions should be before we
.
The
Give
Irredeem¬
attain that ultimate ob¬
not
better
a
same
vantageous to
with
based
no
currency
7.
Require
that
exercise
people
a
the 'gold standard" and it "feels
that every possible step should be
taken to
could
accord
monetary system,
believes
could
as agents.
merely give our
the
/
Chamber
possible
it
We
Money
latter
lions for which they act
govern-
:
given the same
their claims
In fact-it would
Alleges, Without
Reason, That
Conditions
the
currency
Good
or
be
respect to
rights given foreign institutions or
foreign individuals or corporaT
;?/•//;:
World
irredeemable promise to
some
itself
of
.
Proof
overvalued
an
aligned
the people of the United
to
maintain
not
rights than they have had.
Giving our people a redeemable
montally-managed economy and
against the free private enterprise
pay, a bank deposit which is re¬
deemable in nothing better than
en-'
finally effect a return
this country to a sound cur¬
in
should
silver,
leas*
mand and
this
decide that he pre¬
ferred to invest in gold, he can¬
not do so.
His government says
the
entrusted to him by the depositor.
I don't think that this is too much
of
-eeking
monetary system, the
country are de¬
the right of private
our
of
■
gold
the
would
free private enterprise system./:
The New York Chamber has in
known
to
the
more
a
which
to
that
and
the economy and
people. The advocate of an
irredeemable paper money is a
instrumentality
Allowing
not exercise rights
belong¬
ing to'these foreign institutions^
the
with
not.
could
dictatorial ' government
man.
banks—
that foreign treasuries and, banks
have had ail the time. Our
people
It; perhaps
instrumentalities,
best
could
rights
basic
The Chamber Acquiesces in the
property
not
be
friend, wittingly or unwittingly, of
governmentally-managed econ¬
omy.
Conversely,
a
domestic
gold-coin system is apparently the
people
prived
to be able to* return money
the same intrinsic value and
as
a
per ounce and get gold
from us at that rate. This
arrange¬
ment' prevailed
during the war,
when the world was in
turmoil,
and
it" prevails now.
In other
States
governmentally-
erty in Gold
as
power
is
maintained on «. that
They could send gold to us
held by the
change in any
rights of foreign counT
tries and banks to get
gold just
as they have been
getting it all
along. The only difference would
power to control
Under
make an effort to influence events
purchasing
money
re¬
$35
at
way
governments use and abuse
public purse. .♦
so-called
"managed" irre¬
a
(with
been
basis.
access
of the
A-
international
an
standard
Treasury would
over
Continuation of the Destruction
money. iSomehow, it seems to me
that the custodian should feel an
implied
power
of the People's Right of Prop¬
custodians, but the
owners
this
of
gives»/
4.
impossible to make
during a period of rising
prices produced by monetary in¬
flation.
The people who suffer
are
the,, people
depreciation'of the people's mon¬
restoration of the obligation
almost
money
he
Chamber, by its
as being
unwilling at this time to change
a
monetary system that deprives
their
went on
Now the point is this:
pay
event
we
the people of the United States
as
well as foreign countries to have
economy.
most
taken
it: Ever since the
devaluation " of4 our
the
.
time
States
The New York
all other
all
depreciated
the
of
Treasury
the/ United
vote, has expressed itself
ey—a
losses
from
in
managed
the
be
dealt with
treasuries
and. central
could get gold from our
but " the
people of
question the free¬
to redeem
"Another contributing cause for
the bankers' complacency is that
is
•
to
above
monetary and car
be discharged by payment in the
monetary unit no matter how fa1
the depreciation of its purchasing
power may have progressed.
it
holds
of
promises fo pay. /;
past indicates that bankers
It. is also disturbing to see the
have usually been quite compla¬
Chamber of Commerce of New
cent—and often have cooperated
York joining hands in this un¬
in producing monetary inflation!
sound and dangerous enterprise.
This seems to .be largely due to
fact
he
reason
requisite
could
the
banks
which
sisting
sound
Curiously enough, how¬
ever, the history of most, if not
all, of the disastrous inflations of
some
.
re¬
demption of the promises to
deemable paper
money.
the
demand
to
power
todians of the people's money, re¬
other class of the population
any
an
'
this
words, from 1934 up to date, for¬
eign / countries — that - is,
their
dom with which the Treasury and
banks are issuing such promises.
arresting and disturbing
picture to see the banking frater¬
of May
should
the
finds
It is
(published in The Com¬
mercial
and
crashing down on the heads of the
bankers is something that they
themselves are inviting.
the
Association
Public '.Purse
a
and the retribution that may come
Antonio,
before
can
Willing to See
monetary standard and sys¬
place in every individual's
hands
the general pub¬
become aware of the facts,
deal.
we
Perhaps
;
have
tent
depreciation.
course
which
strictions), all our monetary rela¬
tionships
with
other
countries
It has been pointed out repeat¬
edly in this country that a gold-
are.
'/ In due
economy becomes an Clement
strength to other countries with
of
gold-bullion
GovernmentallyManaged Economy to this Ex¬
the river of currency
consider¬
the
Supports
banking fraternity in general; it is
a
of
the People Deprived of Power
tem
of
defenders
Chamber acquiesces in the contin¬
uation of its destruction./
people down
characteristic
vigorous
case of pri¬
property in gold—surely one
of the most vital of all rights in
private property—the New York
to sell the American
not
might
vate
commercial
of
One
the conventional rights in private
maintain
appropriate responsibilities,
as Mr. Frost says, cus¬
todians of the people's money and,
as .such
they have been helping
they
tide
money
the
to
our
gold-dollar price of an ounce of
gold,/at which time' the rate of
$35 was adopted, and at which
their
>.
characteristic
seeking
understood.
therefore
the fact that they
to
can.
ber
privileges for themselves
to be excused from fulfilling
and
This going-along with the irre¬
deemable
been
our
it
monetary system is of the
;; best; the resulting healthfulness of
point
deserves
further attention; because of
the manner in which the
Chamr-
special
deposits
the
addition
In
are
serve
with
easy
Mr. Frost has
by
an
money,
to understand how invit¬
ing the Chamber apparently found
without
for banks and the
.
.
it property. But in the
it to drift with the tide.
endorse
domestic
our
•^
-
as
da te
move-:;
irredeem-
the
/'*'■■■•
'
avoided,
ber of Commerce of the State of
New p York
understanding
and
banks,
and
the
Bankers
Association,
going
-
<
be
can
weii expect to find in the Cham¬
and
thorities
in
privilege
our
poorly
in¬
by the general behavior
banking fraternity.
With
the
banks
irredeemable
this
If
of this destruction of this particu¬
lar object of
property are but
fluenced
Association, has also gone along
with the Treasury and Reserve
to
Commerce
currency
if
That
under
arises
which
to
extent
irredeemable
an
cies
.•
of a standard of
standard for deferred
vaiue,
a
payments.
in this country.
banking
fraternity also goes along: The
commercial
banking
fraternity,
particularly as revealed in poli*
of
of
private property in gold,
present monetary sys¬
tem, has been destroyed should be
clear even though the implications
to
respect
currency
commercial
type and nature of promises they to ask and expect from the men
were authorized by law to issue.
at the head of American banking
By a sleight-of-hand manipulation and I believe that, if the bankers
beginning in December, 1942, the of
America
really
understood
Treasury and Reserve banks, in what has happened and is hap¬
cooperation; issued 4660,000,000 of pening to the people's
money, they
"National Currency Notes."
No would arouse themselves and de¬
law.
and
value, of
unwittingly endorses.
or
so
serve
of
views
same
in
it is this
type of money that the New York
and
money;
the
deeply disturbed over the general
attitude of the banking fraternity
oui
they have
,
the
and
against us which
right to convert into
a
gold while
on
governments
claims
our
other
abused taxpayers,
hand,
must
accept
j irredeemable
paper currency .and''
silver in payment of.
i overvalued
their/claims.
has
New
in
escaped
York
effect
That arrangement
disapproval by the;
Chamber.; That body
insists
that
our
people,"
but not foreign treasuries,. banks,
and rpeople, should
wait before
their claims are made redeemable
until/'world conditions justify". '
Let it oe emphasized:
World
.Volume 167
conditions have
return
'our
to
THE
Number 4706
no
bearing
cur¬
beyond providing additional
reasons
why we should rid our¬
selves promptly of irredeemability.
If there is any reason why both
foreigners and the people of the
rency
"
r
.United States cannot have
to
.
their
,
claims
of
say,
.
runs
should
erence
on
banks—the
our
arises
{question
access
in accordance with
against it—because,
gold
our
to
why we
people pref¬
as
not
The
upon
redeemable
a
give our
over foreign treasuries and
banks which have had the rights
Report
Committee
of
the
Chamber's
Finance
on
COMMERCIAL
and
Cur¬
sion
&
FINANCIAL
that
by
Committee
according to
really have
things stand
Dr.
is
CHRONICLE
we
in dealing with these pow¬
a
gold standard as
the Secretary and of the
and that therefore
President to alter the weight of the Chamber had
very good au¬
the
dollar,
reveals
confusion. thority for urging that the present
After mentioning the President's system not be
changed.
There are some things here that
power to alter the weight of the
gold dollar under the Gold Re¬ need to be set straight. Dr. Kem¬
rency,
ers
of
serve
Act of 1934, the Report says
(p.
"That authority has not
used again since that time,
13):
been
and
informed
some
tend that it
sources
con¬
has been revoked by
fought
merer
present
our
irre¬
deemable paper money system to
the limit of his capacity. He was
president for ten
his
death
of
and until
years
the
The Chamber's Committee then
that
Kemmerer
Economist
Na¬
(2551)
reach
this
"The
conclusion:
na¬
denied
our
people
ever
since Jan.
implications involved in the
issues
which they were endeav¬
on
tion's present monetary standard
oring to render
is serving the purpose at the mo¬
ment." Who's purpose? And what
6.
of the best interests of the
of
the
United
people
what
On
States?
defensible grounds can the Cham¬
ber's
Committee
insist
that
an
irredeemable
money
paper
can
the people well?
serve
Because the banks and Treasury
not required to redeem the
are
promises
forced
people,
upon
legislation, especially tional Committee on Monetary these. institutions have been able
legislation ratifying the Bret- Policy which for the fifteen years to issue an excessive amount ol
Woods monetary agreements of its existence has been dedicated
; 31, 1934—and under those "world
such promises, interest rates have
conditions"
which
the Chamber and that making provision for the to the restoration of the redeembeen
driven
to
extremely low
.would
have
the
United States' participation in the ability of our currency in gold
public believe
levels, and the purchasing power
coin or gold bullion.
have some pertinent, or myste¬ International Monetary Fund.
'
'
In
of the dollar and of the people's
Dr. Kemmerer's classification of
rious, bearing on why our people the absence of clarifying legisla¬
savings has declined sharply.
should be penalized still further tion, however, there still is room varieties of gold standard requires
1 as against foreign claimants.
for doubt as to whether the Presi¬ an interpretation that differs 4. The Committee's Defense of Its
The sole questions that arise as dent, and the Secretary of the greatly from that provided by the
Action
to our restoration of retieemabii- Treasury by
delegation, do not Chamber's Committee. He, like
The Chamber's Committee goes
;
and
subsequent
the
ton
.
31
The
an
Serious
opinion.
Implications
in
Seeking
Privileges
and
the
Avoidance of Responsibilities
The
seeking and gainin'g of
privileges without the willingness
to assume the
corresponding re¬
sponsibilities is a serious piece of
business.
bring
It invites and tends to
retribution.
disturbing to
see
It
is
deeply
the Treasury and
banks engaging in the practice of
claiming special, and most unde¬
sirable, privileges, while fighting
to avoid their,
corresponding re¬
sponsibilities.
It will be surpris¬
.
ing if
,
tunate
policy.
It
also
does
serious day of reckoning
a
not
is
flow
from
this
unfortunate
unfor¬
that
an
•
ity
.
(a)
these:
are
Do
have
we
enough gold to permit resumption
*of gold payments, and (b) can we
>
;
yank ourseives back to the
v
ventional
.and
standards
good
sense
of
con-
integrity
in respect
to
;
dollar within
We have enough gold to resume
gold payments any time Congress
the
limits
[50-60%
weight]."
is¬
promises to pay—that
; is, in respect to matching respon¬
sibility with privilege.
of
suance
still have the power to make fur¬
ther changes in the weight of the
The facts
of
the \
are
of
two
the
these:
President
to
prescribed in accordance with the purpose to
preceding be served—a thoroughly scientific
procedure. One may characterize
The power a gold standard in terms so broad
alter
the or so simple that it will include
weight of the gold dollar expired
July 1, 1943.
His power to alter
the weight of silver and other
coins to the same degree that he
ending irredeem-, altered the weight of the gold dol¬
ability of our money. The ratio of lar continues. The Bretton Woods
'Our gold stock to our paper
money Participation Act of July 31, 1945,
and
deposits
has
been
much can bear only upon the
Treasury's
I higher during the last , ; several power under Sections 8 and 9 of
: years than it ever was during the
the Gold Reserve Act of 1934 since
;
will pass a bill
-
•
5
most authorities in the monetary
field, classified in different ways
all
variations in
which the
word
"gold" is used—just as one may
say that the
"constituting qual¬
ity" of an automobile is a motor-
propelled vehicle
with
four
or
wheels.
classification such
a
motor
But
as
a
a
car
broad
"motor
car
with four wheels" will not inform
one
a
as
to whether the machine is
Cadillac,
Ford,
a
a
sedan,
or
a
in which we were on a gold the President's power had already truck. Similarly, the maintenance
of a domestic currency at a par
Standard. Indeed, we have heard expired.
;
with
much about our excess gold holdgold internationally is a
'ings, about being - flooded with II. The Report of the Cham¬ "constituting quality" of a gold
gold, about the uselessness of our
ber's Committee on Fi¬ standard, but it is a quality so
broad
and
elemental in nature
igold, and so on; but, if one raises
nance and Currency
,the question of resumption of gold
that it; provides one with very
This Report is supposed to pro¬
payments, then there are protests,
little information as to the nature
years,
,
.
of its non- its array of distinguished men
12): "With should see fit to endorse this
the European Recovery Program course now being pursued by the
It amounts
(Marshall
Plan)
getting
under Treasury and banks.
effect
to
way, and with the International in
participation in a
Monetary Fund in operation, but national sin which promises to ex¬
still confronted with a number of act, some day, severe penalties for
to say, in defense
corrective program (p.
on
worked
to be
remain
which
problems
to
be
out, the present appears
most inopportune time to
a
take
precipitate
might complicate
which
an al¬
action
further
remonstrances, expressions of fear,
vide
the
justification
/allegations;;regarding scarcity of
Chamber's
;gold, the argument that "world
/conditions wjll not permit," the
members
contention
.
f
that
the
"premature," and
proposal
so on.
Resolution.
of
the
for
the
In
it the
Committee say
(p. 11) that "There is considerable
is •difference of opinion as to the
type of standard this nation has
ivv'The authors of these conflicting
been
\ arguments rarely attempt to offer
Gold Reserve Act of 1934."
•factual data to support their
then
con-
on
since
quote
from
R.
G,
of
the
They
Hawtrey
[the
to the effect that "the nation
teptions or observations, regard\Jess; of whether it is said that we United
;
States]
purposes
to
standard."
permit redemption. But
all
rones
T of
observations
these
in
among
the
prize
opposition to resumption
gold payments seem to be that
proposal is "premature" or
the
must wait till "world
for, all
has been
have too. much gold or not enough
'
enactment
on
a
of
a
nation's
monetary
-;C.
the
cumstances,
is
course
to remain
the
for
on
most
feasible
United States
its present monetary
standard for the time
used
that gold-bullion is
(
The
preceding paragraph is in
nature
mere
which
words
mean
nothing and signify nothing be¬
yond the fact that the Chamber's
Committee proposed to do nothing
about correcting our irredeemable
on
provide
an
means
,
that
well
as
currency), the
gold exchange standard, the gold
bullion-exchange
standard,
the
gold coin-exchange standard, the
gold coin-bullion-exchange stand¬
ard, the foreign exchange stand¬
can
ceptance
that
of
the
correspond
•
responsibilities4
with
our
priv¬
ileges.
Now
Corporation
a
OAKLAND,
CALIF.
—
An¬
nouncement is made of the forma¬
tion of Frank Knowlton & Co., a
corporation,
,
,
Frank Knowlton & Co.
with offices in the
Building, to take
Bank of America
over
ness
the general investment busi¬
formerly
partnership
Officers
conducted by the
the same name.
of
are
Eugene
V.
Flood,
President; Charles E. Jank; Hor¬
ace R.
Williams; Edw. S. Goetze;
the situation except to
John W. Evans, and Dora McClel¬
additional reason why
the Marshall Plan would have no
bearing
deemable domestic
present standard in this country
as
a
'new type of gold-bullion
standard <.*V
which meets the
situation.
The Committee did not explain
in¬
as
,
practical
late "Dr. Kemmerer describes the
paper money
-the
international
standard
(which
a" country has irre¬
domestically
ternationally)
bullion
gold
we
being."
what bearing the Marshall Plan
following have this com¬
has on ridding ourselves of irre¬
quality but each differs from
deemable currency.
If we want
the others:
the gold-coin stand¬
an honest currency in this country
ard, the gold bullion standard
means
belief that
damental verities in life as those
involved
in
the
importance of
All the
(which
apparent
complicated
mon
full gold
They also state that the
standard
and system.
our
challenge with impunity such fun¬
maintaining standards of common
international honesty, in the proper fulfillment
financial situation. Under the cir¬ of our promises, and in the ac¬
ready
.
:
organization such as the Chamber
of Commerce of New York with
we
should not have
able money.
The
out
irredeem¬
v;(;'(
Committee
what
an
the
did
.-v";
£/•
land.
Frank B. Knowlton will be
associated with the corporation.
not
operation
point
of the
With
Herrick, WaddelJ
Monetary Fund has to do with a
& Reed, Inc.
resumption of gold payments. The
Fund, they say, has problems.
Presumably it will always have;
"constituting quality" of a gold ard anchored to gold in a foreign
standard.'" They then quote from
country.
(Special
to
The
Financial
CHICAGO, ILL.
Chronicle)
Wilfred E.
Kleine and Vincent E. Schomaker
—
problems.
Perhaps it might behave been added to the staff of
;
ditions justify." Both, it may be
pointed out that one of the Fund's
Herrick, Waddell & Reed, Inc.,
Dr. A. W. Crawford and from this
The differences in these varie¬ greatest problems is irredeemable
I supposed, ; sound impressive to
332 South Michigan Avenue.
| their authors; but when one at- author, producing what they seem ties of a "gold standard" are im-' paper money. The Fund's prob-'
1 tempts to find what substance lies to suppose are fundamentally dif¬ portant. The Chamber's Commit¬ lems should become less as hon¬
.behind
such- words,
he > finds ferent views as to the nature of tee missed the significant point, esty in the issuance and redeem-'
With Nathan C. Fay & Co.
our monetary standard and sys¬ and its treatment of this
particular ability of currencies increases.
i nothing-r-for
the simple reason
(Special to The Financial Chronicle)
tem.
matter
that there is nothing to find.
;
.
probably would mislead
The members of the Committee
PORTLAND, MAINE — Philip
the uncritical reader and give him
It may be noticed that the New
say that "the present appears to; H.
1. The Nature of Our Monetary
Hansen has become associated
York Chamber did not attempt to
the impression that because our tbe a most inopportune time to
Standard and System
with Nathan C. Fay & Co., 208
demonstrate, nor did it even al¬
monetary standard has what Kem¬ take precipitate action."
What Middle Street. He
Now the
was-formerly
point involved is a merer
called
the
"constituting would be precipitate action and
lege, that the United States does
with R. H. Johnson & Co. and J.
matter of accurate description. In
quality" of a gold standard we who is recommending it? Do the Arthur
^not hold sufficient gold to per- our r international relations
Warner & Co.
'
v
I( we have all that is
.'mit resumption of gold payments
necessary or im¬ Committee consider it "precipitate
in an easy way-—and under highly operate on a gold standard of 35 portant in a "gold standard"—and, action" to end irredeemable cur¬
I favorable circumstances. The eas¬ gold dollars per fine ounce of furthermore, that our present sys¬ rency in this country after four¬
Joins J. Arthur Warner
iest year would, have been 1940 gold. But the restrictions thrown tem met with the late Dr. Kem¬ teen years of not taking "precipi¬
(Snecial to The Financial Chronicle)
around the use of gold in inter¬
"when the'ratio of our gold to
merer's approval, which Ss con¬ tate action"?:? It is never an in-i
PORTLAND, MAINE —Albert
national relations are numerous.
our paper money and deposits was
trary to fact.
;
opportune time to terminate the; B. Collins has rejoined the staff of
Domestically, all our paper and
'at its peak.
It obviously needs to be em¬ issuance of irredeemable promises J. Arthur Warner & Co., Inc.,
metallic money is irredeemable in
phasized that our monetary sys¬ to pay, when a nation has the Clapp Building. He was recently
8." The
Chamber's Constructive so far -as gold is concerned. We
tem involves an irredeemable pa¬ means with which to do it—as associated with K. H. Johnson &
have a system of indirect conver¬
'i
i
Reeommendalian
we
certainly
have—and
that Co.
•
per money domestically and that
■
,
/ '
sion which maintains the parity
The New York' Chamber says
Dr. Kemmerer fought it at every Committee provided no valid rea¬
of our domestic currency with
/that* "as a step toward that obturn.
That Committee's use of son as to why we should continue
; jective
Wm. C. Roney Co. Adds
[the : soundest
possible gold. Thus our system is an in¬ Dr.
Kemmerer's
"constituting with our dishonest irredeemable
ternational gold bullion standard
(Special to The Financial Chronicle)
monetary system] the Chamber
quality" would seem to be com¬ money..
;
r..»\ ((;
of a highly restricted type.
'
'urges Congress to revoke the exDETROIT, MICH.—H. Weston
parable with an attempt of an
; isting legal provisions which some5. Did the Committee Understand Hoyt has been added to the staff
2. Varieties of a Gold
Standard owner of an old model T Ford
What It Was Endorsing?
times are interpreted as authorof Wm. C. Roney & Co., Buhl
and the "Constituting Quality" to convey the impression that he
The members of that Committee Building, members of the
•izing the Secretary of the Treas¬
New
has the latest Cadillac because he
The
Committee- say
(p. 10): had the
and / Detroit
Stock
Ex¬
have chosen to put themselves on York
ury to buy and sell gold at prices
"constituting quality" of
•? other than the established one of "There are three generally recog¬
record as defending irredeemable changes.
a motor car.
U,
nized types of gold standard: (1)
$35 per fine ounce."
paper money for the people of
the gold-coin or gold-specie stand¬ 3. What the Chamber's Commit¬ the United States, as defending
The
Chamber
is to be
comtee Endorsed, and Its Conclu¬ the granting of the privilege of With Jones B. Shannon Co.
mended for this constructive rec- ard, (2) the gold bullion stand¬
(Special to The Financial Chronicle)
sion
'<Y'.V
? ommendation. Our safety regards ard, and (3) the gold exchange
issuance of promises to the Re¬
standard."
DETROIT, MICH. — Edgar W.
They then go on to
What the Chamber's Committee serve banks and Treasury without
ing the fixed nature of our goldAverill is with Jones B. Shannon
state that Dr. Kemmerer main¬
endorsed was not a good or a at the same time requiring them
> standard unit would be increased
& Company, Buhl Building.
tained that gold coinage and re•if Congress
to
thorough-going gold standard and to assume the appropriate corre¬
that
we
con-
'
•
<
_
.
.
'
'
.
repeal
were
Sec¬
tions 8 and 9 of the Gold Reserve
'
Act
of
'
power
1934
which
repose
the
indicated in the Secretary
(the approval of
of the Treasury
the
President
is
required
under
•
Section
8
which
is applicable
purchase of gold). 7
to
deemability in gold are not neces¬
to
sary
a
gold standard and that
maintenance of the currency at a
par
with
what
he
quality" of
The
internationally is
the "constituting
gold standard, v
gold
calls
a
implication of this discus¬
as
as a domestic gold- sponding responsibilities, and
gold-bullion standard and defending all the other implica¬
With Capital Securities
system, but a domestic currency tions of an irredeemable paper
(Special to The Financial Chronicle)
mentioned above.
The
composed largely of irredeemable money,
OAKLAND, CALIF. — Willard
of course, is whether
paper money with our gold put question,
J. Hammel is with Capital Secur¬
at the disposal of foreign treas¬ that Committee understood at all
well the fundamental principles ities Co., 2038 Broadway.
uries and banks.
system, such
coin
or
&
COMMERCIAL
THE
(2552)
32
CHRONICLE
FINANCIAL
"Under
Who Are Our Stockholders?
(Continued from page 6)
in fact the property of indi¬
was
pattern of whom
would follow generally the pat¬
tern of the shares in individual
the
viduals,
The insurance companies,
investment trusts and other
names.,
the
so-called
did
not
their
so
pose,
investors,
sophisticated
us
concern
for this pur¬
too
names
were
of
that
than
adult from,"
nation's
the
population, as was to be expected.
other
The
come
is that the annual in¬
some
the
did un¬
facts and
important
surprising ones.
Possibly
the most interesting was that only
the conven¬
they are
accustomed to getting it.
tional
form
in
to get the in¬
wanted concerning
The obvious way
formation
we
which
5%
stockholders are ours
In answer to the question,
Majority of Stockholders Are
alone.
another thing.
Con
owners
other stocks beside
Edison?" Ninety-five per cent
Of these, 12% said they
owned several (2 or 3), 37% a
few (3 to 10), 51% over 10.
say yes.
We
out-and-out investors.
are
have
number
a
We
this.
convinced us of
A majority of our
asked
of
angles
on
the
recognizable type of citizen,
ceivably
ence
inertia
known
inherent
in
pferverseness
human race. It
the
to prove
people.
goes
holders
and
are
answers
to
that
stock¬
the questions to
obtain stockholder opinion on our
president's welcoming letter, our
dividend enclosure, our annual re¬
stock¬
holder relations efforts, are not ol
any particular significance here,
but certainly the endorsement of
each of these by the survey has
and
port
other
company
have
to
come
an
con¬
influ¬
regulatory author¬
upon our
ities?
an
The
The survey has
com¬
stock."
such
Investors
of the
of the
Why, in the face of
attitude, they continue
to hold their stock can only be put
down,
I suppose, to the wellmon
only
some
"Do you own
left out.
financial
a
toward holders
tude
people want and in
is higher.
On the other hand, we
earth
we must be sure
information
the
conditions whatever,
complete change in atti¬
no
without
the money
to include
"where
and
went,"
Thursday, June 10, 1948
Stockholders Are People
These
stockholders
class apart.
They
have become
a
are
are
not
people.
_
a
To
stockholder in the
first
place, presupposes some de¬
gree of self-denial and saving ef¬
fort, and presupposes confidence
in
an
make
economic
system that will
self-denial
and
saving
worth
while.
cated
to
the
In
a
country dedi¬
individual
private
enterprise
system, these citizens
deserve all consideration, encour¬
agement and applause. They de¬
serve the right to be heard and^to
question,
stock¬
"Are you holding the stock pri¬
of the
From this data alone it might marily for income, for apprecia¬
modern business tool, the public
or
both?" Of those who
be deduced that our stock is owned tion,
have their interests safeguarded. .
opinion survey.
We called in a
been sufficient to convince us we
answered this question, 64% said
But consider the implications in
leading firm to advise us, and by a group of wealthy investors.
should
continue
them, substan¬
this quotation from a recent an¬
However, this is disproved when they were holding the stock pri¬
followed throughout the
estab¬
tially as is. In certain cases we
nual report of a State
lished techniques of the public we turn to the income figures marily for income, 35% for both
regulatory
shall
adopt recommendations
and find that the median yearly and only 1% for appreciation. We
body:
'*
opinion polls.
made
for changes.
It was cer¬
of those reporting was were able to pursue this further,
You may be interested in learn¬ income
"During the year, the Commis¬
tainly gratifying to learn that 88%
$4,700. But, as might be expected, too, for we had listed on the ques¬
sion continued its efforts to bring
ing exactly how we, proceeded.
tionnaire a number of suggestions of those-who expressed an opinion about further rate
reductions toFor reasons of both speed and it was found that the greater the
said that the company was giv¬
as
to factors which mignt have
the millions of utility consumers
economy, we decided to use a mail income, the larger the holding of
ing its stockholders, enough in¬
influenced the stockholders' de¬
our stock.
■' r;:;v:'
in the state, with unusually sue—
f;
survey, followed up, for checking
formation.
j;
v;.;, cessful results. The services ren¬
A look at the distribution by cision buy the stock.
Some 33%
purposes, b(y personal calls on a
said they had been influenced by
dered by the various utilities are
:•
number of those
who did not occupations likewise disproves the
.•
The $64 Question
the
company's dividend record,
essential to the life and activities
respond. The experts told us that wealthy investor theory. The most
I suppose the $64 question from
27% by faith in the public utility
of nearly every individual in the
if we mailed a questionnaire to frequently mentioned occupation
our standpoint was the one, "How
was
housewife—this by 24% of industry,,; 18% by the company's
state.
The cost of these servicesabout 8% of the list, and tabu¬
would you express your opinion
all stockholders responding to the financial condition and 12%
by
constitutes an important element
lated the answers we received,
ofv the management of the com¬
in the family budget as well as
questionnaire.
The
next
two the territory served.
we would have
an adequate sta¬
These answers all seem to boil pany?": As you sit there, try to in business and
tistical sample of the mail re¬ classifications at 19 and 18% re¬
industry."
guess how your own stockholders
spectively were proprietors, in¬ down to a desire for stability of
Actually, as we all know, thdsponses. The names were selected
would respond to such a question.
cluding managers and officials, income and security of invest¬
cost of these services DOES NOT
by pulling every 12th name from
What
percentage do you think
Professional ment. Of course, some will argue
constitute "an important element
the alphabetical list of common and retired persons.
would say very favorable, what
and
semi-professional
workers that no common stock should be
in the family budget," or in the*stockholders, unless such name
percentage favorable, what per¬
large majority, at any rate. Fur¬
happened to fall into one of the comprised 16%; clerical, sales and bought for stability of income and centage uncertain, what
percent¬
Further¬ security of investment.
Possibly
^eliminated classifications, in which kindred workers 13%.
thermore, and again as we al^
age unfavorable, and what per¬
so.
But the fact is that a tre¬
more, we knew the median hold¬
case the 12th following was taken.
know, except for heavy industries,,
mendous amount of it has been so centage very unfavorable?; How it is NOT "an
To each of these names we sent ing of Con Edison common stock
important element'*
many would you think would re¬
to be 34 shares, representing capi¬ bought, in the case of this com¬
in business and industrial budgets^.
a questionnaire in the form of a
spond at all to such a question? I
tal at today's market of about pany at least.
Certainly there is
But, aside from that, what about,
four-page folder. The front page
am going to be coy and not give
the contribution of dividends td.
contained a letter over the fac¬ $800, which again indicated mod¬ little or no indication of the spec¬
you our percentages now.
If you
ulative
"in-and-outers"
in
our
est means.
* .■
the family budget of the stock-fsimile signature of the president
are
interested, see me after this
Does not this fact, that only 5%
group.
holder? As far as our company isb
of
the
company,
explaining
On one question we really stuck meeting. But I will say one thing
of the stockholders are exclusively
concerned, the typical (medianjf
briefly that we were interested
that
probably will not surprise
our chin out.
Looking toward the
individual
in the opinions of our common ours, emphasize that we are in
stockholder
owns
34 j
you: those who acquired the stock
competition for favor with the future necessity of selling more
shares.
That means he is now
stockholders
on
many
matters,
at
market
prices
considerably
securities,
we
asked.
and asking for their cooperation stockholders of a large number of equity
receiving $54.40 a year in div¬
higher than the present were gen¬
other companies?
Does this not "Would you buy more common
idends. We found that he is theby way of as complete and candid
mean
thatthe
impression we stock in Con Edison?" We real¬ erally much less favorably in¬ owner of several stocks, so it isn
answers
as
they were able to
clined toward us than those who
ized that this was a wide-open
safe to assume that his dividend,
give. We told them we expected make upon our stockholders may
acquired th^ stock at prices under income
to make use of the results in as¬ well determine whether, if they question and,; one om which we
may be several hundredv
the present market. This we were
have to sell some of their holdings, would not get anything very defi¬
dollars a year.
Surely dividendssisting us to better serve' their
able to tell by relating the re¬
nite.
We were looking rather for
interests as stockholders. No place they decide—values, of course, be¬
make a far larger contribution tothe expression of an attitude. Ob¬ plies to the age of the account.
ing equal—to sell someone else's
was provided for a signature, but
his family budget than his utility
There had
been
some" feeling
each questionnaire
services cost him.
bore a code and keep ours; or, conversely, if viously, if you ask a man if he before we undertook the
survey
would buy more stock in a given
we and other companies happen to
number to enable tabulation as to
Says this same report:
that it might turn out to be a hot
be offering rights to subscribe for company, he is pretty likely to
geographical location and size of
"The reductions in the cost o£"
ask you under what conditions it potato —that stockholders would
new stock at the same time, they
holding,
service during the >. war
say that we were prying into their utility
will
buy our stock instead of is to be offered.. If you mean to
The experts said we should ex¬
affairs, and would take it as an years are of special significance^,
someone
else's?
We
think
the issue rights to purchase jit at a
pect around a 20% response. Ac¬
occasion to sound off on all sorts as they have been accomplished'
answer is
price under the current market,
yes, and we have ac¬
tually we got over 27 %.
in a
period of rising prices of
of grievances.
I will not deny
'We trained a group of our pub¬ cordingly a new concept of our that is one thing. ; If you mean,
that there has been some small practically all other necessities of
lic-contact employees and, after competitive position with respect will you buy it on the market if
Recent studies by various,
evidence of this—according to the life.
the mail questionnaires had come to securing funds in the invest¬ the price declines, that is some¬
poll experts we set off the normal governmental and private agen¬
thing else.
?
V
v ■
j:
back, sent them out on a per¬ ment markets.
number of discordant notes. Sev¬ cies indicate that the cost of liv¬
sonal canvass of enough of the
Possibly the next most interest¬ ; Well, of those who answered the
eral
stockholders
suggested, for ing since the start of the war has non-respondents
to
find
out ing finding was how these people question in the form we put it,
increased by about 30%."
example, that the size of their in¬
whether or not their failure to happened to become stockholders. "Would you buy more stock in
comes was knowledge for the in¬
What are the regulatory author¬
respond had been because of any Not all of them purchased their Con Edison?" ,74% said yes, and
come
tax collector
and nobody ities doing to help the stockhold¬
prejudice. As it turned out, the stock—only 87%; 3% acquired it 26% said no. But of those who
else; quite a few of the ladies ers to cope with this rising living
results of these
interviews fol¬ by gift, 9% by inheritance and 1% said yes, we were not at all sur¬
lowed very closely the pattern of by
distribution
from
another prised to find that 38% condi¬ wrote, opposite the age blanks, cost—today far higher than 30%
"None
of your, business."
But, over prewar at that time? Div¬
our mail responses, and bore out
tioned their reply by.'indicating
company.
'.J*' ;',v
at that, some 83% answered the idend increases have been fairly;
How did those who bought it they would
the conclusions arrived at from
do so if they had
common among the industrials, as .
questions on age and income.
the mail responses.
happen to buy it?
What influ¬ funds available.
j
:-i'-s.
'
On the whole, I would say that our stockholders are quick to re¬
The results were carefully en¬ enced their decision?
The replies
A very interesting line of com¬
mind us, but very, very scarcetered on punch-cards and
tab¬ show that some 58% acted on the ment was developed by those who the responses to the questionnaire
;
•
were
candid
and
conscientious. among the utilities.
ulated in accordance with the best basis of personal recommendation.
these
individual
108,000
holders
was
by
the
use
•
.
,
-
.
-
-
,
.
,
.
,
,
.
said
statistical
techniques.
of breakdowns
was
as
were
A number
made.
One
to geographical location—
These
Brokers
in the lead with 34%
they
came
recommendations
from many sources.
Con
Edison
were
the very logical reason that
they would prefer to diversify—to
and bankers
that
would NOT buy
stock.
Of
these
more
23%
Friends and make their further investments
is, whether in New York City accounted for 10%.
or outside, and for the total U. S.;
relatives, however, accounted for in companies other than this, or
another, as to size of holding—one 23% and 22% of the recommenda¬ in stocks other than public utili¬
to four shares, five to nine, 10 to tions, respectively.
We have no ties.
A fairly substantial number
19, 20 to 29—and in blocks of in¬ way of knowing this from the sur¬ commented upon the fact that the
creasing sizes up to 5,000 shares vey, but we think it is safe to industry was too much regulated
and over; another as to income assume that some of these 45%
by the government; that the regu¬
brackets—under $3,000; $3,000 to of friends and relatives may also
latory bodies were not granting
$4,999—up to $20,000 and over; be bankers, brokers or members prompt rate increases; that they
another, as to age brackets, an¬ of the financial community. At any did not like the political situation
rate, the 34% of brokers and 10% surrounding
other, as to sex.
utilities; that they
of bankers—nearly half of those felt the
industry was vulnerable
Analysis
of
Questionnaire
whose
recommendations
influ¬
Study of these breakdowns has
given us a lot of angles, and from
enced the purchase
them
cial people, and this points quite
we
have
drawn
clusions.
of
us
number
had
that stockholders
that
our
con¬
/
Conclusion
some
our
one,
long
are
is,
as
suspected,
people, and
is, in the
stockholder list
were
of the stock—
surely identified
as
finan¬
clearly to the desirability of mak¬
ing friends within the financial
community and keeping them.
This
information
is
extremely
helpful in determining the format
analysis, just a cross-section and content of our annual report.
of the body politic, with two gen¬ It
says to us that, however much
eral exceptions.
One is that the we
may glamorize it with pictures,
stockholder group is older, the charts
and col<?r, and tables showmedian
age
being 40% higher : ing
"where
the
money
came
final
Many
highly gratifying; a
quite flattering.
All in
all,
we are
tabulations
from
these
data.
fact, it would look as if the-
stockholder couldn't possibly win,,
the
if
glad we did it.-
We have made dozens of differ¬
ent
In
were
number
gave
regulators had anything to-
about it, for we read in thesame report:-.
>;<•$: r
■
say
"In
the
early thirties, wherjv
for an hour giving
you interesting sidelights.
But it prices of commodities were going:
all comes down to proving one down,
the Commission insistedthing — stockholders are people that utility rates should also beThey come from all walks of life, reduced, and important savings,
from
all
occupations. • Being were accomplished in those years~
I
could
go
on
Toward the close of the dec¬
of several stocks,
people who are invest¬ ade, when the economic pendulurm
ment minded, interested primarily began to swing the other way andl
in security and income.
That we many prices began to rise, the in¬
creased earnings of the compa¬
to inflation.
On the; whole, the
have proved.
\
: j
■: '".j ry
attitude expressed was fairly opti¬
On the other hand, admittedly nies, together with various oper¬
economies,
made furthermistic, we feel, as to the sale of this is only a scratching of the ating
reductions possible."
additional common, stock to our
•
;
surface of a big subject. If these
present stockholders...
Now I am not naively suggest¬
findings are typical of our indus¬
But this question did give some try
and
further
investigations ing that the regulators of our in¬
of them a chance to take a swing
tend to corroborate them, and if dustry are going to throw over¬
at the management.
their
In the ex¬ they could be given circulation board
"original cost less
act words of one, "There is an and gain wide acceptance, they straight-line
depreciation"
doc¬
indicated
exert
a
tendency to consider could
profound
ef¬ trine,/ or their "prudent invest¬
primarily the rights of employees fect upon the industry's future. ment" doctrine, or whatever doc¬
and management, and to let the
For example,; could not the re¬ trine they may be basing their
stockholders
be
the
hindmost moval of the stockholder from the rate-making practices upon.
I do-
devil."
Another
sample
was,
mostly
they
owners
.
.
.
are
misty haze of the unknown, into a
not
suggest, either, that they are
1 ■»
Volume
to be expected to adopt a
light of the current money
I certainly do not think
feasible
be
relate the return
(Continued from
it
industry,
utility
the
in
would
attempt to
the securities
is
But it does seem that there
ample
an
tory
in the regula¬
the exercise of
scope
for
process
enlightened judgment based
upon a new look at the owners
an
of
the
properties, and who they
are,
and their place and their
equities in the social scheme. To
be specific, I am suggesting in all
seriousness
that
the
regulators
should consider, and consider well,
the effects of every rate change
upon
the war.
;,
directly to the cost of living in¬
dex.
the individuals whose money
week
at
Already,
least
attention
utilities have
fact that the
public duty to continue to ex¬
their
facilities,
even
at
present high prices, in order to
provide adequate service for their
customers, and that the consumers
must
be prepared to pay rates
reflecting such high costs. This is
progress
Would
in the right direction.
it be too much to hope
that some day, somewhere, some
regulatory body, conscious of the
owners
that
check
holders
faithful
to ', its original conception as a
quasi-judiciai body—would it be
people,
be
but that, based upon recent studies
by various governmental agencies,
the
of
cost
pany's
tute
service
average
no more
to
user
that
com¬
will consti¬
important element in
the family budget
than it did for¬
merly,
considering the
recent
rapid increase in the average fam¬
ily income."
That is the end of
my imaginary quotation.
Fantastic? Utopian? Well, may¬
be, so. But now that we are be¬
ginning to know who the stock¬
holders actually are, we ought to
Bissell
&
Broadway, New York City, mem¬
bers of the New York Stock Ex¬
principal commodity
and
change
exchanges, announce that Schuy¬
ler A. Orvis, Jr., has become as¬
sociated
with
its
in
firm
the
commodity department.
J'-Richard B.
rate
a
■
and Exchange Commission for
expire June 5, 1953.
term to
ingots and castings
pacity
name
of
N/
Ryan
&
.
^
'
„
J.-^-The
Moss,
5
i
firm
Com¬
Street, has been changed
Ryan, Moss & Co. Partners are
John J; Ryan* George G. Moss,
and R. EI L. Lewis, Jr.
merce
:
Robt. C. Jones Co. to Admit
; ;
r
•
WASHINGTON, D. C.—Charles
C. Morgan will be admitted
limited partnership in Robert
to
C.
Jones & Co., Metropolitan Bank
Building,, • members of the New
York
Washington Stock Ex¬
changes on June 17.
year
one
Lewis B. Hall Dead
B.
Hall,
Jr.,
partner in
Dobbs & Co., New York City, died
May 29.
-
Other
weather
against
as
Advances
ized
on
\
:
:
v
sponding
in
week
coal
and
loadings
were
in
of
was
.k
which
bidders.
reduced by labor
Day,
and
an
week in 1946 when
same
troubles in both the railroad
holiday.
below 5,000,000,000
22 weeks that production fell
due mainly to the observance of the
However, when compared with the week
was
holidays.
7, 1947 (which did not include Memorial Day), the turn¬
out for the June 5, 1948, week showed an increase of 210,240,000 kwh.,
or 4.5%.
The current figure is also the lowest reported since that
for the week ended Jan. 3, 1948, when production totaled 4,868,011,000
kwh. (this latter period included the New Year's holidays).ended June
Many
of
Production
new
a
trucks in the United States and Canada
of cars and
low last week
result of
as a
an
18,000-unit holiday loss
Output
98,499 units and, in the like week of 1941,
units.
*
.V
-
consisted of. 49,370 cars and 21,024 trucks
in the United States and 3,450 cars and 2,115 trucks made in
week's output
This
made
a year ago was
133.645
was
Canada.
v
'
„
.
Commercial
week
and
industrial
ending June
Dun
-
-
;
1
&
to
in
91
one-third
to Dun &
Bradstreeet, Inc. in its latest survey of trade.
sought in many areas.
Bradstreet,
;
with
.-
and
This
concerns
trade
week's decline
was
off from 91
with
nine, only
manufacturing, where 21
preceding week, and in wholesale
sharpest in
failed against 38 in the
half as many
as
a
week ago.
mortality dipped from 45 to 40; this compared with 29
increase in casualties appeared in both construction
commercial service with 10.
FOOD PRICE INDEX CONTINUES TO CLIMB
Retail trade
last year. An
with 11 and
v;;
helped
eager
stimulate
to
post-holiday buying
for bargains.
print dresses continued to sell well with demand for lingerie,
hosiery and fancy blouses remaining large. Moderate gains in the
purchasing of some types of men's clothing were offset by declines?
in
the
many
demand for haberdashery in some stores. .Unit
instances dropped below the level of a year ago.
There
volume in
slight increase in the demand for food with picnic
specialties, soft drinks and beer generally popular.
was
a
While the buying of fresh meats decreased
and processed meats were
Fresh
vegetables and
somewhat, canned
frequently requested.
sold
fruits
along with canned
well
and
Fresh
fish, poultry and dairy products were steadilypurchased.
The demand for confectionery and baked goods was
somewhat below the level of previous weeks.
Response to promotions of Summer furniture was favorable with
slip-covers, draperies and bedspreads selling well. Nationally adver¬
tised furniture and major appliances remained in .large demand,
though a slight decline in the buying of radios occurred.
Used car
dealers reported a slight increase in volume and a moderate increase
in the buying of automobile supplies and accessories.
Retail volume for the country in the period ended on Wednesday
of last week was estimated to be from 8 to 12% above that of the
a
year ago.
,
*
-
.
^
increase of 14.4%,
COMMODITY PRICE INDEX REFLECTS SLIGHT
Regional estimates exceeded those of a year ago by the followering percentages: New England and South, 5 to 9; East, 6 to
10; Middle West, 10 to 14; Northwest, 12 to 16; Southwest, 11 to
15, and Pacific Coast, 3 to 7.
:
,
CHANGE
--v.-.
change in the level of wholesale prices
r>:
Buyer attendance at the wholesale centers dropped substantially
in the week, resulting in a slight decline in wholesale volume. Whole¬
sale dollar "volume continued to compare favorably with that of the-
J
similar period of last year,
the 1947 level.
- - •
but unit volume in many lines was below
,
f;
v
While buyers continued to stress quality at moderate prices,
.
}
they were generally less cautious than-a year ago.
Department store sales
on
a.
country-wide basis, as taken from
ended May 29, 1948,
the Federal Reserve Board's index for the week
increased by '"18%
with
an
This compared
For the four weeks
from the like period of last year.
increase of 7% in the
preceding week.
May 29, 1948, sales increased by 9% and
by 7%.
The wholesale food price index,
FOR WEEK
sales
shoppers
Beach and- vacation apparel was sought by both men and women
total clothing volume increased moderately.
Cotton, linen and.
ended
-
compiled by Dun & Bradstreet,
Inc., gained another three cents last week to put the June 1 figure
at $6.97.
This marks the second consecutive rise for this index,
following the slight downward movement of two weeks previous.
The current level compares with $6.09 at this time last year, or an
v
many
silk
Inc., reports.
Both large and small failures
more
Picnic foods
and Summer sportswear were
corresponding week
mortality level in the past five years, casualties were only
as numerous as the 279 in prewar 1939.
> '
•
'
or
preparation for the long Memorial
period ended on Wednesday of last week and continued to compare
favorably with that of the corresponding week a year ago, according
the holiday-
Although down from the preceding week's 112, they were a third
heavier than in the comparable week of 1947 when 66 occurred and
seven times the 13 in the same week of 1946.
Despite the sharp rise
from the
in
.
failures fell
3,
•
encouraged to increase their purchasing;
were
Retail dollar volume increased slightly during the
Day week-end.
frozen foods.
DAY
estimated at 75,959 units from 92,772 (revised) units the
previous week, according to "Ward's Automotive Reports." The pre¬
vious low was 82,717 units in the week ended Feb. 7, last.
its
$27,871,000 for shipment to
at
SHOWS SLIGHT VARIATIONS
consumers
seasonal merchandise
some
!
AUTO, OUTPUT THE PAST WEEK ADVERSELY AFFECTED
BY MEMORIAL
valued
cotton
X
WEEK
Memorial
included
44.3% above the
or
falling off
Day
reflected replacement
.
distributed by the electric light
and power industry for the week ended June 5 was 4,845,458,000
kwh., according to the Edison Electric Institute. This was a decrease
of 230,567,000 kwh. from the output in the preceding week and was
This
week
Buying activity in the western range States was reported slower
some
manufacturers showing increasing resistance to higher
prices for fine wools.
Foreign wool sources reported still higher
prices for all grades and types of wool with Russia one of the chief
The amount of electrical energy
kwh.
the
of
persistent demand for fine grade wools from the
Promotional
Memorial
half
announcement by the ECA that it had author¬
an
purchase
There
9% ABOVE YEAR AGO
coal industries and by the Decoration Day
first week in
latter
the
with
ELECTRIC PRODUCTION OFF, DUE TO HOLIDAY OBSERVANCE
the
and
RETAIL AND WHOLESALE TRADE ACTIVITY IN LATEST
1947,
increase of 277,963 cars
crop
from the South and reports of some further cur¬
mills in the Boston market last week.
•:
'
optimistic
included
factors
.
,
1,730,400 tons last week, 1,-
„
the
;t
1,695,700 tons, or 96.9% of the old ca¬
and 1,281,210 tons for the average week in
.
same
Mill demand for the staple continued rather slack with buyers
showing little interest for new crop cotton. ,The mid-May parity
price for cotton was announced at 31 cents per pound, up 12 points
from a month ago.
Demand for cotton textiles remained relatively
slow with a general weakening noted in prices of print cloths and
olher gray cloth constructions.
•
Mon-
^
prewar year.
smaller, totaling 38,00(5
was
participating countries.
ago,
ago
markets
with 58,300 bales a week earlier, and
week last year.
depressing
news
buying following
the indicated
ago
the
tailment in cotton mill activity.
Loadings for the week ended May 29, 1948, totaled 904,848 cars,
according to the Association of American Railroads.
This was an
increase of 25,690 cars or 2.9% above the preceding week. «They
also represented an increase of 74,643 cars or 9% above the corre¬
V.;:.v;r
Here in New York inclement
for the year to date
'
V,
weather and the Memorial Day
holiday worked to cut into the sale of seasonal
merchandise.
Reserve Board's index, department;
store sales in New York City for the weekly period to May 29, 1948,
increased *23% above the same period last year.
This compared with
an increase of 8% in the preceding Week.
For the four weeks ended
According
to
the
Federal
May 29, 1948, sales increased by
10% and for the year to date by
6%.
during
; *The large increases over last year reflect in part the fact that
the past week.
The daily wholesale commodity price index, com¬
this year stores were open for six business i days whereas in the
piled by Dun & Bradstreet, Inc., finished at 285.53 on June 1, as
corresponding week last year stores in most districts were closed
against 285.30 a week earlier and compared with 255.71 on the cor¬
cn Friday in observance of the Memorial Day holiday.
There
on
A month
and
Lewis
47,700 bales in the
declined, with those involving
a week ago to 77 and
with those involving liabilities under $5,000 down from 21 to 14.
to
s
month
a
CAR LOADINGS RISE
-
•k NEWARK,
Sales volume in the ten spot
week's operating rate is equivalent to 1,732,200 tons of
;
liabilities of $5,000
"Ryan, Moss & Co.
Cotton prices trended mildly upward last week following
slight downward movement of the preceding week.
bales for the week compared
Institute announced
0.1%, from last week.
94.3%. f
was
prices averaged slightly lower with demand for cash larct
Trading in cocoa was
rise of the preceding
week.
,
V
Steel
0.1 point, or
y,
shortened
v
McEntire of Kansas
.has been confirmed by the Sen¬
ate to be a member of the Securi-
»l! ties
consumption
94% of the steel-making capacity of the industry will be 96.1%
June 7, 1948, an increase of
-•v-jy''--'
McEntire Confirmed
>
steel
.
FAILURES LOWER IN HOLIDAY WEEK
™
Lard
with output
120
Meeds,
other
>
limited and stocks reported on the increase.
more
active and prices continued the sharp
of capacity for the week beginning
touched
Laird,
Hog receipts at Chicago last week were more than twice the
day of this week the operating rate of steel companies having
try to make out a case for them.
Laird, Bissell Co. Adds
in
con¬
number for the same week last year.
industry is trying to fill is holding up deliv¬
American Iron and
The
1940, the highest
of stockholders have been receiv¬
wide area."
Livestock markets were irregular with steers
tinuing to trend higher, while hogs and lambs moved lower.
a
"
equipment.
ery on new
reductions
ing regularly for the past X-number of years, the commission per¬
mitted a prompt and substantial
rate increase. But we would point
areas.
Harvesting of Winter wheat was reported under
in Texas and Oklahoma and the movement of the new crop
was gaining momentum.
Weather advices from the corn belt were
mostly favorable with planting said to be virtually completed over
way
were
When changeovers are complete there will
steel demand which the
699,700 tons
dends which its X-thousands of
southwestern
truth in
no
oil
port, "During the past year, this
Commission brought about no rate
the divi¬
made last
industry is still hard put to get anywhere near what it
says it needs.
The freight rate advance has cut off hundreds of
users from regular sources in the past two years.
These customers
are
"industrial orphans" wandering around the country trying to
establish regular sources—at any cost.
;
V/yy-Vvay;
-In answer to the steel industry's chance of easing things up a
little, the magazine adds, it is running everything it has without
thought of when it will break down.
Overtime is freely paid to
keep maintenance to the point where equipment can be held at maxi¬
mum output.
Plans are being rushed for expansions—but the very
J
and hence the safety of
.
t
.
survey was
failing, that inventories
was
on the Chicago Board of Trade, however,
dropped to a daily average of 20,500,000 bushels, from 28,000,00(5
previous week, and 40,000,000 in the like week a year ago. Wheat
and corn prices held in a narrow range, the latter grain leading if*,
volume of sales.
Trading in wheat was light and prices somewhat
depressed as the week closed due to reports of unexpected rains if*
of
end
33
the
reports of shutdowns-because of steel shortages.
i steel
pany- in the state, where rising
costs threatened earning power,
a
this trade authority points out.
The
mission might say in its annual re¬
whatever, in view of
costs of operations.
Indeed, in the case of one com¬
the
''
'
■
since
>
Grain markets generally displayed a firm tone last week.
Auto makers, because of the coal strike, will be steel hungry
too much to hope that such a com¬
rising
warning
the steel situation
on
.
by the editor of "The Iron Age" and he found
groups,
and
are
.
been
ably priced and is needed.
'
What is true in appliances is true
,
the
•
.
.
have
5)
page
■
(2553)
Trading in grain futures
being made which has picked up sales and created new backlogs,
(4) the appliance field as a whole is roaring to a new high level,
but only because makers and distributors have found that the public
will not buy unless it can be shown that the product is good, reason¬
stock¬
the
CHRONICLE
were hard to make.
What he found was (1) no
appliance maker is getting the steel he wants, (2) there is no excess
inventory in appliances except possibly hot water heaters and they
are still moving,
(3) sales forces are being used to sell the product
of the
business—realizing
nature of
FINANCIAL
large and that sales
the
of
one
called
has
pand
true
who
for months to come.
commissions
a
those
reports that the* appliance field
utilities.
to the
,,
To double
the shares of these
is invested in
from
except
to
on
&
The Stale oi Trade and Industry
markets.
that,
COMMERCIAL
rate of
unrealistic
return wnich would be
in the
THE
Number 4706
167
was
responding date
little
a year ago.
34
THE
(2554)
COMMERCIAL
A Look at Utilities
relative
(Continued from page 3)
relative to all corporations. The
latter
into
plunged
as
of
earnings of all
a
cor¬
com¬
bination of the varying figures of
all the innumerable kinds of busi¬
and that it also combines the
ness,
deficits of the corporations losing
with the net
those making money,
incomes of
money
This chart
shows
another
com¬
parison which is not so favorable
to the electric utilities, and that is
the relatively low rate of longterm growth in net income over
the period, which will be referred
to later.
Worth
of
Utilities, Manufacturing, Trade
And Transportation
Figure 3 carries
us
net
equity
worth,
after
Use of this
the
„
of
debts.
enables
to
us
make comparisons among
industries,
various
the
wide
showing
variations in the record.
Most of
these figures come from compila¬
tions made by our own bank. This
chart
summarizesfrom
1926
through 1947 the relative rate of
ireturn on net worth of leading
corporations in electric utilities,
trade, and transportation.
What
two
this
chart
show
and
the
particularly
other major
simliar
the
the
we compare
turn
the
re¬
Figure
completes
5
its
22
the
fluctuations
been
for
figure
re¬
In all
has not
the utility
years
mind
as
you
their net worth
manufacturing and trade
corporations. They have earned
substantially more than transpor¬
tation corporations, and more than
based
on
manufacturing
on
S.
the
upon
The
cor¬
latter
Treasury fig¬
ures, including some 80,000 manu¬
facturing
corporations,
through
1945. The
1946
and
1947
plottings
estimated from the published
are
reports of leading companies.
For
many
the
reasons
lines
obviously
able.
The
not
are
utilities
three
compar¬
have
much
a
larger investment per sales dol¬
lar,; or conversely a much lower
rate
of
capital turnover, than'
manufacturing, and hence must
a substantially
higher profit
margin. The chart nevertheless is
have
interesting in indicating the trends
in
these
different
industries.
Manufactluring
in
red,
But
has been
utilities never.
the
would
be
hard
to
turing,'which is clearly the
in utilities.
Indexes
U.S.
of
'
Vv.;
;
Cost
of
Living
as¬
and
Cost of Electricity
This
narrowing of electricity
margins has come about
profit,
reproduction
of the re¬
from pressure
calculation
book
on
Labor
on
Electric Utilities, Railroads, and
All <U. S» Manufacturing
called
the
The
•
the
utilities'
the
;
margin
per
living
(now*
electricity produced by
private utility industry. Both
indexes are based upon the 1935-:
39'average as 100.
the
income
net
had not increased proportionately
with its gross revenues. This re¬
flects
of
hour of all
previoqs charts showed that
electric
cost
"Consumer's Price In-:
dex") and the price per kilowatt-
Corporations
these charts show that the
increases in return during
At the present
narrowing of profit
sales dollar, as shown
ALL us;
GROSS SALES
$ BILLIONS
cost of
time, the general
living index is 68% above
whereas the price of'
the average,
NET income:
CORPORATIONS
ELECTRIC
i
•
•
ELECTRIC
$ BILLIONS
«
UTUTIES;
x
•
■
20
':-£m
I
■
Z
4f. |
—
LECTRIC
EST
u TILITIES
r
M " ".r;
."•'•*"v.
t
,
300
v-
"
;
Est
'
ALL
10.
/
US,
CORPORATIONS
Ylii
200
Hs
100
v
-4
'
4
*
V
ALl
-
;
.
u.s.
Y.v--.
)RATIONS ;
^ CORPC
*
•
\-'
-J>i f :':;>v Y
1
1
,
•
•
.IMI
•.
*
•
•
»
•
*
••««•
•
•
•
•
/•
b
•
•
«
«
.
Jill
-J- J
1
1
—Ft
.
I
1
Ht
»
•
••«•»•••#
•10
-I
1926-30
J
♦
Dcncit
*
>•*••••••
»
—i~]
•
\
.
1931-35
1936-40
1941-45
1946-50
FIGURE m
jh?6Iarg! Pr°P°rtion of
■
r
,
' P
electric
rate
utilities
would
of return
be
lower
FIGURE IV
;
RETURN ON NET WORTH
the form
investment in
on
total property
than that on net worth
(PERCENT
FIGURE V
RETURN ON NET WORTH
capital investment in
only.)
W,
PERCENT
25
(Due
of
to
funded
electric
the
large
debt^
utilities
rate
proportion of capital
of return on total
would
be
lower
than
investment
on
in
the
form
investment
property
that
worth
net
:
;
in
only.) vf;
PERCENT
I
}
,
'
RETURN ON
i
rmt*
of r»turn
on
total
PER CENT
20
TRA DE
-/
w
V
r
I
1
i
i
/
\
-
PERCENT
V
/
\y
\
I
A'
EL ECTRIC
"CITIES
uj
15
f
>''
rJ '
fundod
;•>
dabt,
oe
.
MmBi:
15
COTTON
GOOOS
ft
electric
10
UTILITIES
fi'T V
\
\
/
V
V
> JU-*
Vi
STEEL
/
\
\
,
transporta TION
:it
W8&.DEF,C
v
PETROL .euM
10
V
.*
tha form of
-
=r
%
|
.
MANUFACTURE
r
'
20
15
A/
*
In
etlr.)
■
KW
'
Investment In oloctrle utilities aouli
proparty
loaoe tbu that oa-not oortb
20
NET WORTH
i.
1.
L i' *
*
"c
1
.-'v '> * *.
(Du« to ths lore* proportion of capital invaetaant
'
'
\
'
'
L
\LL
\
~>'4
.
I
\l±
1931-35
KVn
-„1
ELECTRIC
UTILITIES
f
■
0£
*
>>5 i-t
-5
1926-30
,
"
J'.V
-5
;
jp
J
EFiciT
SjSpfSp
K.
V
10
f
1936-40
1941-45
case
.t
:
FIGURE
ALL
it
that there
say
is any long-time downward trend
in the profit margins of manufac¬
FIGURE I
CORPORATIONS
the
Profit Margin per Sales Dollar of
'
by the manufacturing and trade
corporations and not by the util¬
ities. The
showing iri'manufac-
com-*
of
based
everything else. This is shown in
Figure 7, showing indexes com*,
puted by the U. S. Department of
Shifting our viewpoint from the
longer to the shorter term, how¬
big
values
is
yW*
chasing powersof the consumers!
manufacturing. They also show
greater stability than any of the
ever,
based
all
dollar.
certain major industries included
in
groups listed. V '
book
is
for
porations in the U.
upon both sides of
the profit-and-loss statement. Om
values therefore
ignores the rise in the "corporate the revenue side, there has been an
reduction
in
cost of living," or the shrinkage uninterrupted
the
in purchasing power of the capi¬ average unit selling price of your
tal dollar, which is as much of a services,
despite the substantialproblem as the shrinkage in pur¬ upturn in the prices of almost i
turn
than
a
sheet
The
costs.
in summary, show that the utili¬
ties have earned on the average
on
worth
Figure 6, which gives also the
margin for the railroads
and
gross understatement of the
a
worth
charts, 3 4, and 5,
somewhat less
that net
balance
sent
substantially greater.
These three
it must be borne in
cases
in
average
sets. These values currently repre¬
have
see
these boom years have been made
period did it earn a rate of re¬
turn above that of the utilities.
the
the
over
rate of
quite as good as
average—6.9% against 7.3%—and
utilities
of the
It operated at a deficit in 5 years,
and in only 5. years out of the
next
is
in
been
all
manufacturing industries and for
the
steel
industry
specifically.
Against the utilities' long-term
average return of 7.3%, the manu¬
facturing industries have averaged
8.7%. But in five years of the pe¬
riod the manufacturing return was
lower
than
the
lowest
point
leached in any year by the utili¬
ties, and in one year, 1932, the
manufacturing industries operated
at a deficit. The steel industry
ranks among the premier indus¬
tries of this country, but it aver¬
aged only 4.7% over the 22 years.
from dollar
deduction
any
net worth
on
with
stockholders'
measure
Figure 4
turn
figures of net income to percent¬
age figures of the rate of return
on
uations
average
In
Net
on
brings
into the picture the petroleum and
industrial group.
Leading Corporations in Electric
and it
cotton goods industries. The. fluc-
that trade corporations gen
earning less than
.v.;.;
Rate of Return
turing and trade may be described
roughly as the result of selling
more
goods at advancing prices,
and reaping inventory profits. The
utilities, selling electricity at de¬
clining prices, do not enjoy this
source of profit. The point to
be
net worth
on
show
Thursday, June 10, 1948
—
porations it is important to keep
in mind that this total is
CHRONICLE
earnings of these noted at this time is that the util¬
erally have earned more on the industries are truly feverish. Steel ities are competing in the capital
markets
with
industries
which
stockholder's dollar
11.4% on is
to
as
frequently
referred
the average over the 22 years
"prince or pauper," but the ups temporarily at least are making
a more brilliant earnings record.
against 7.3 for the utilities — but and downs in cotton goods are
Before leaving these charts we
that the utilities have held their even more extreme, for this in¬
earnings rate much more consist¬ dustry has operated at deficits should remind ourselves of the
ently. The range between their even in some, years when steel limitations of return on net worth
as a measure of earning power. In
best year and their poorest was and railroads made money. From
roughly from 9% down to 5% and 1926 through 1940 its return was comparing utilities and manufac¬
back
again. The transportation lower than that of the utilities in turing, for example, we must note
.line consists principally of the every year. Since then it has been that the former have a larger pro¬
portion of capital in the form of
Class I railroads, but includes also higher every year. But its average
air transport,
shipping, traction over the years is only 4.1%, and funded debt. The rate of return
on
total property investment is
and bus. The 22 year average re¬ only since 1940 has it earned a
therefore a more significant fig¬
better return than the utilities.
turn of this industry has been only
ure in the case of utilities, and of
3%. In four years in the '30s it
The petroleum industry shows
course it is lower than that shown
had a deficit and in three others
a
deficit for only one year, and
on net worth only. We have never
it was almost on the line. In the of course it has
made remarkable
first two war years it earned more
compiled such figures for groups
earnings during the past year or
of manufacturing companies.
than the utilities but today it is
two. But its
1947. When considering
and
total
of return
which I shall
compared with other divisions
Chart 3 it will be
seen
Treasury
by the dotted line, indicate a soar¬
ing to establish new peaks in both
1946
parisons
stock¬
the
of business. In
figures available are for the year
1945, but estimates made by the
Department of Commerce, shown
the
of
FINANCIAL
Earnings
holder's return in electric utilities
deficit in
1931, 1932,
a
each of the three years
and
1933.
The
latest
stability
&
1946-50
n
M
isI7
v
Wimk wxjxjx
•Xv//!vXvX
DEViciT-&&
ipli WWm
1931-35
1936-40
Wmm
1941-45
1946-50
Number 4706
Volume 167
electricity is 30% below. This re Electric Utilities- Expenditures for
New. Construction, Compared
duction in the price of electricity
With Depreciation Charges
is a stupendous achievement.
It
is a triumph of management, en¬
Figure 9 shows another, section
gineering .skill,"
technological of the utilities financial picture
progress and marketing policy. It that is
directly related to earn¬
is both cause and consequence of
ings, namely, the* heavy expendi¬
the growth of the industry.
At
-the same time, however, it must tures now being required for' ex¬
be viewed with relation to the de- pansion of plant, add'
equipment.
cline in profit margin just shown;
It will be seen; that the annual
to the effects of. that decline in
depreciation charges, also shown,
; inhibiting improvement in 'net in*,
come
and in rate of return on on the slide, represent an internal
,
;
.utility capital.
■:,•'"r
■■■,;•;. ■
Major Expense Items of Electric
■
■ '
'
•,
Utilities
'' *
*.'
source
arid
of
fraction
of the total
Pressure
c
the
to
ing corporations.
figures used-cover
a
1.8
coyered
increase/-has vbeen
in
doubtless surprises
if
•
used in
the
changes. (1937-1947)
as
for the two
making for
and
most in
over
Look
first ht
the
right fof all
the
corporations.
columns
on
call
increased^-Iheir
those equipment
Rate of
turn was maintained.
represent
•
plant
gross
48%;
they
the uses and sources: funds ren
quired by these utilities;insl947;
outside. your;
.
■m
The peak of taxes,
-years...
how-
They, needed) $2; 100 • milliens,
as
simply
growth
in
costs; (5) a decline in
earnings record of the in¬
dustry over the past twenty
re¬
is
Meanwhile,
years
tribute to its engineering,, its
a
management, to its
and
success
in de¬
/
during
margin of profit is in
up
sense
a
should
cause
of progress,
period
a
effects of rising Costs and
the
industry
requires
overhead
and
as
the
declin¬
;
;
Fortunately, the growth is not
ceasing
need
nor
we
hensive that it will
is
favorable terms, to support the
increased
They i increased their gross
long
growth.
a
attract this additional investment
on
as
ing margins can be absorbed in
high utilization 6f plant.
Now
real
a very
of strength and a
source
cause
now
industry
done better
of such
covered
rates'.
reducing
and
Paradoxically, the decline in the
possible,
as
should
The
concern.
increased have
and
To put the
volume
trends; which
Now lookiat the utilities on the
of left.
decline
a
efficiency
matter
sequence... *
;
factor of
use
growth in business.
normal and
a
sales
electric
high
a
veloping growth by increasing its
electric,uaiteb with ;rising:prices, they increased
control, and they
are
by con¬
electric sales;.
income did not keep pace with the
expected ~pf Ofit- showing, follow¬
were the principal cause of the
.decline in margins-.during the war
•
in
present high level of fuel
The
to outside
recourse
capital*
taxes since
•,;'
case at
taxes.
manufacturing however, the growth of operating
These
<,
shiouid
what I
of
sources
the
and labor
1940 .-have pecatise.
thefiguresicome-irom^he their total-revenues 137%. Their substantial amount of outside cap¬
'been -larger than any other ex,-f
Department of Commerce-a«d''di'f- ^efcrincome:'improved by nearly ital, perhaps $3 or $4 billion for
vpense- item, even larger than total
fer* in some: -details; > i Theyvshow- 300%*
Thi$; I submit, is a logical a five-year period 1947-1951. To
wages, -and salaries paid;
Taxes
:
accompanied
growth
Plant has increased the added capacity; (4)
ings without
ing logically: upon certain given
' developments. These corporations
..
be the
may
end to periodic rate
further increase In
Revenues
grown.
only moderately,
groups.* •
Figure 10
same
Outside of the utility industry, do. gas utilities with the
; learn, that
tinued
address ourselves,
now
has
ten-year pe¬ have grown.
last,, because they includaUheir .physical output 66%;
people
most
.
(a's
an
decreases,
only 31%.
supply of the earlier; charts, and that the of the period it was financed out
/new
bars, simply^represent percentage q£ depreciation and retained earn¬
.
not quite
It
taxes.
billion.
The figures
"•bytheoharhthemostsensational
:
present)
physical output, or
Net income increased
should
Business
riod father than the twenty years
of
slowfer rate.
a
we
Note that the
a
creases or
increased
utilities
the
following;
actual rate in¬
It is to the implications of de¬ (2) savings in operating costs aris¬
clining selling prices, rising costs ing from the replacement of less
utilities and declining profit margins that efficient generating facilities; (i)
compared with all manufactur¬
as
account
Per: the- entire period
t
of
enues
less than their
own
circumstances:
rev¬
Finally,; Figure 11 is an attempt
sum up
significant aspects of
the record of the electric
-
'i
its
still less, or
•-
•J: rising; but at
investor^
protect
only 71%.
expenditures at the current* rate.
side
other
the
on
profit-and-loss
to
ing of its obligations.
Looking back .at the period
has
1926-1930, expenditures for new
come from the rapidly mounting
costs, which are shown in Figure construction average almost $800
8; r These, figures are shown not million
annually.
In 1947 expen¬
in index numbers^ but in millions
ditures for construction were in
•i of- dollars per year, and must, of
the neighborhood of $1,3
billion,
course, be considered in relation
I;*, to total revenues, which were also and for 1948 are estimated to rise
•
need
physical output the
of
crease
capital deeded to finance
*
.
,
its
in operating income have to come
from one or more of the
the in¬
creased twice as, much as
of
health and the investment stand¬
.substantial
is
steadily rising, yet is only
small
of
of funds that
mesaure
to appeal to lenders and
"
property; and in its general relaf
tion to the problem of raising new
a
its current problem, of its need
,
,
That is
it needed.
•
the revenues of manufacturers in¬
than one-half of the money
more
; -
CHRONICLE
& FINANCIAL
COMMERCIAL
THE
likely to stop it.
may
slow down or
appre¬
Nothing"
However, it
even
stop tem¬
Conservative investors
porarily.
capital
feel
cease.
which $ 100 million was "to finance plant and equipment (as reported) charges, and to maintain a favor¬ are attracted
by the industry's
reached in 1943 and
This is after write¬ ably credit position, operating in¬ growth and stability.
But they
.1944, and wages and salaries have increased materials .and supplies*- 'jOhly ;14%.
f now caught up. The increases in $ 100 million for increased receiv¬ offs of intangibles, and the in¬ come for the industry as a whole cannot feel entirely free of con-*
|
ever,
this
•
was
item
fuel during the
ables, and $1,900 million for plant crease in generating capacity was
have been sensa¬
and equipment.
The sources of actually 26%. However, they had
tional.
Depreciation charges have
the funds include $200 million of an 88% increase in total output.
grown steadily, along with the in-
/past two
crease
and
in
years
in
total
plant and equip* retained earnings, $500 million of
will have to increase. Plant addi¬
cern
tions financed not from retained
gins.
earnings but from the sale of
approach
words, they made a much curities
In other
must show
a
se¬
induced
declining
by
Should the
industry
mar¬
ever
saturation point, a con¬
a
tinuation of this long-term trend
rate of return
1
ment, and, of course, must grow depreciation, $100 million through
The
more.
reduction
charges
(at
bankers
and
securities)
if
even
crease
the
in
minor,
been
in
offset
of
new
on
security issues. The indus¬
•
at
to
get
a
little
been
NET INCOME
PER
DOLLAR
tive.
To maintain the attractive¬
ness
of utility securities for con-^
competition with the require¬
ments
An
of other industries.
addition
to
net
plant
The
selling
utilities
purposes,
product
REVENUE
/CENTS
40
PRICE
1935-39=100
should
and
not of itself provide increased op-
but such addition does
erating income.
margins would prove destruc¬
servative
in*
£F£ases the Base for rate making
.
investors,
be
made
every
effort,
by the industry
by regulatory authorities to
check
the
decline
in
the
profit
Actual increases margin on sales.
FIGURE VII
Or GROSS
FIGURE VIII
MAJOR EXPENSE ITEMS OF ELECTRIC UTILITIES
INDEXES
8 MILLIONS
200
1ST. QTR.
i
>
PRICE INDEX
:
/
TAXES
I
CONSUMER
*
UTILITIES
ELECTRIC
of
in
declining unit prices. Whereas
FIGURE VI
CENTS
inten¬
their
sharply.
diverges
have
market
more
the showing of the two groups
security
penses.
relatively
sufficient to attract further capital
ing corporations. From that point
ahcT$l,000^ million
try had to go to banks and to the
in practically all other ex¬
—
available
of
use
sive than that of the manufactur¬
libilities, $200 million
of-bank loans)
in¬
the
to
creased tax
utility
welcome,
a
securi¬ capacity
the ties, $100 million held against in¬
of
expense
investors
has
sale of V. S. government
interest
intensive
more
f
^
WAGES
&,
SALARIES
20
RAILROADS
•"
.«
t
ALL
/
"
-
:y.'-
MANUFACTURING
■"'•i.V-VV.'v..'"
"
CORP
-
"*
,
ELE CTRICITY
HOUR
PER KIL OWATT
INTEREST ETC.
4
/
DEPRECIATION
DEFICIT
1926-30
1936*40
1931-35
1
1946-50
1941-45
,>•
H
II
i
1
J LI
1
1 i
1
1
1
1
1
i
II
i
i
I
1926-30
1931-35
1926-30
i
'
i
1931-35
1936-40
1941-45
1946*50
FIGURE XI
FIGURE X
FIGURE IX
i
PERCENT CHANGE
1937-47
V
+ 300
■•
8 MILLIONS
ELECTRIC
;
UTILITIES
:••
USES AND SOURCES
OF FUNDS
eY.iELEeTRIC-'yW^OAS UTILITIES IN
2,000,
1947
DOLLARS
□
RETAINED NET INC.
RECEIVABLES
DEPRECIATION
/
+
200
PLANT & EQUIPMENT
fill
TOTAL OUTPUT
HH
TOTAL REVENUES
IH
INVENTORIES
V
NET INCOME
U.S. GOVT. SEC.
INC. TAX LIAB
PLANT
AND
EQUIPMENT
BANK LOANS
CONSTRUCTION
EXPENDITURES
+
100
NEW. SECURITY
ISSUES
DEPRECIATION
1
1926*30
1931-35
«
'
'
1936-40
'
-
1941-45
'
USES
CHARGES
I
'
'
»
'
'
I
1946-50
SOURCES
'
CLECTRIC UTILITIES
ALL MANUFACTURING CORP.
36
(2556)
THE
COMMERCIAL
dent
As We See It
•
We
are
the
(Continued from first page)
which
—
CHRONICLE
incidentally is nothing
which would
The
income, and
Upon
Washington
himself and undertake in
providing for his
vide for their
is
philosophy underlying all such reasoning. V
prescription:
agents
the
political activities of
of
menace
communism
a
lies
few isolated individuals.
"If
of
some
The
-
<
;
v
of
some
people are forced to work at substandard
"wages and nothing is done about it, that is an invitation to
our
communism.
"If
to vote
"If
or
in
<,
.
people are arbitrarily denied the right
deprived of other basic rights and nothing is done
or
about it,
.,
,,
of
some
our
that is
of
some
an
invitation to communism.
/
"And
an
are
:
the
"homes
they need."
program becomes merely
would be a proposal that
"with
"Let
by working together to
improve the welfare of their
strengthen themselves. If they can meet and
on its own
ground, surely we can do the
adopt legislation that will provide
us
our
citizens
the homes
they need, the opportunity for universal
good health and universal free schooling, the extension of
social
security, the full rights of citizenship,
for good jobs at fair
wages and a brake
"will hold the
purchasing
an
on
equal chance
inflation that
of these wages at
:/|.Y\V':-Y >
power
level."
high
a
1
j
Now, what is to be thought
a defense
against communism,
abroad or boring from within?
of warding off communism
by
;
of statism
of all this? Is this really
whether attacking from :|
Or is it at best
a
means
substituting other forms
quite conceivably advance rather than retard the
growth
of communistic notions in
this country? It is undeniable
that totalitarian
philosophies, yes, even
are
have for years
/ What the President
a
little
more
dent
process
has
continuously
the
no
having charging' capacities
2,500 to 30,000 barrels and
being designed to process
42,000 barrels of gas oil a day.
Sixty thousand tons of catalyst
menace
of communism lies
around in
units every
have
for
a
and
year
20,000,000 gallons
gasoline
oil
billion
being
are
cracking
barrels of
•
Today's
primarily in those
areas o^
fuel
motor
dreamed
when motor
of
cars
democracy promised only that neither
individuals
' supposed
government
nor
<
other
groups of individuals would restrict
any cit¬
own affairs
that, so far
as
government is concerned or as
respects other citizens,
each member of the
body politic would remain free to work
out his own salvation
subject
—
only to such restrictions
are
to
necessary
members.,
,/.
ensure
|
the
same
•
ing higher ratios.
be
that
Fischer-Tropsch
pounds
of these
of
oxidation
compounds. The
annual
products from
yields of these
the
two
plants
is
shown in the table:
Estimated Production of
Chemicals
(000
Organic
Z
|
•
:j
lbs.
year
chemical industries. For
some
and
refinery
gasses
na¬
have
provided alcohols, aldehydes, and I
has
spent over $35;000,000 in the past 20 years on
synthetic fuel projects. Utilization
of
coal
our
oil
and
shale
will
naturally follow when, as, and if ✓
our
petroleum reserves face de-*
pletion,
which
is
certainly
not
imminent.
The
known
U.
S.
of
reserves
coal iii
3,200,000,000,00(1
are
98%
Thus
of
fuel
total
our
coal
ulti¬
can
liquid fuel supplies foh
years.
Utilization of
us
thousand
process,
coal is
treated with oxygen and steam to
produce
mixture
a
monoxide and
carbon
of
hydrogen which is
then converted to liquid
products
Fischer-Tropsch process/;
may
be mined
and
processed above ground or the?
gas mixture may be made by con¬
by
the
coal
The
trolled
hydrogeneration,
to
and
high
pressures- are
it
convert
to
<
synthetic
»
-
,
shale
Our
reserves
constitute
synthetic fuel
It is estimated that they
another
enormous
furnish
can
combustion."
underground
coal
something
like
300
billion barrels of oil. "V Good shales
yield
gallons
30
oil
of
per
ton.
The oil produced is low-grade fuel
oil containing large amounts of
sulfur
nitrogen compounds,
"secondary"
refining • pro-*
and
and
.
must be
employed to pro¬
duce gasoline and Diesel oil. ;:sv'
At the present time large-scald
units for converting coal and oil
shale into synthetic fuel; as
pro-^
posed by the government, are not
justified.
The U. S. Bureau of
Mines has been alloted $60,000,000
to conduct fundamental research
cesses
study on pilot plant scale
commercial
possibilities of
and
to
synthetic
fuel
froth
production
A number of
It will Joe>a,>bum-t
struction stage.
before the
projected by the Bureau pf
and oil companies will bp
pleted and it is logical-tp
ber
of
-work
years
Mines
'5,500
the
attempting " .the construction., and
operation
of
commercial V si^e
plants. A $4,500,000 experimental
Methanol
>
Methyl ethyl ketone__:
Ethanol
-
9,560
127,360
n-Propyl alcohol
n-Butyl alcohol
n-Amyl alcohol
Acetic acid
;
49,400
.
coal.
These
plants, 1
one
this
work
',•••/
'j,:-;.v
studies
has
at
a
the
'
Reconstruction
bill which would
empower
Finance
Cor¬
poration to construct and operate
one or more commercial synthetic
Brownsville, Texas and the other fuel plants having ah
arsregate
are being
capacity not to exceed 30,000 bar-i
primarily for the pur- rels a day, using .a maximum
of producing synthetic fuels i outstanding fund of $350,000,000.
at Garden
City, Kansas,
constructed
pose
before
and <;the
operation of experimental pilot
plants constitute the orderly and
systematic method for developing
synthetic fuel processes..; How¬
ever,
Representative
Wolverton
304,400
two
.
Fundamental
Propionic acid_^____„ 17,400
Butyric acid
/
8,400
Methyl propyl ketone.
1,200
"
of
rels
8,740
2,120
Fuels
results
corn?
await
plant will produce only .80 barr
of synthetic fuel a day.frprq
28,800
founding
time oxidation products from
tural
alone
22,400
1,460
3,860
'
and systematic fashion; One com¬
pany
18,200
Synthetic
is
oil
car¬
orderly
an
Acetone
General Motors
industry
in
Acetaldehyde
Propionaldehyde
n-Butyraldehyde
-
Total
oil
reasearch
others
Estimated
Petrochemicals
The
syn¬
and
pilot plants are in operation and
are in the design or con¬
/*'
omitted)
gine increases mileage 40%.
new
of
coal
our
coal and oil shale.
' /:r - /r
Production
coming out with motor cars
having engines with ratios of 8.5:1
'•
out
the
v
industry. In
.
greatly expanded by
the
en¬
an
;
American
estimated
hav¬
aviation gasoline for fuel. This
as
illustrations
ago
which will increase mileage 15 to
20%. An engine with 12.5:1 ratio
is undergoing road
tests, using
manu¬
-
production of petrochemi¬
duction
is
privileges to all other
President, Indeed, the program
suggested by the Presi¬
as
many
*
If this is the true
promise of democracy, and if it
has not been fulfilled, then the
cure for the
infirmity is
radically different from any of those suggested by the
<•
be given.
transportation stage. In 1905, 78,000 motor vehicles used 420,000
gallons of gasoline a day. Now
that
or
izen in the lawful
pursuit of his
other
any¬
on
many
products yearly from natural gai.
This
auantity represents
about
9% of the total United States pro¬
crude
years
appeared
basis
plants, which will produce about
American life where the
promise of democracy remains un¬ more than 37,000,000 are consum¬
fulfilled."
ing over j 100,000,000 gallons a
WHERE THE PROMISE
OF
DEMOCRACY
day
of
gasoline.
Compression
&EMAINS/ UNFULFILLED!! ! And
what, - pray, is the ratios of engines have increased
promise of democracy ?
from 4.5:1 to 6.5:1 with
We t had *
always
ried
resource.
surpasses
40
make
is the
-
thing
to
industry for
tetraethyl • lead
300,000,000
yearly by
which more
quantity and quality
used
whole
w
both in
from
gas
years
shale, the industry has also
used
two
refined.
closely at what the Presi
thetic fuel
20
over
production
fuel. '
cals will
than doubles the yield of gasoline
from every barrel of crude oil
Proposes
the
temperatures
The
saved
processes,
is
polythene which has
could
to 80 in the last quarter of
century, and because of the
resulting increased mileage are
saving the motoring public over
$1,000,000,000 a year. Two arid
of
synthetic fuel production
proceed
by
the v Fischer^
Tropsch
process 1 or
by hydrogenation,
or
both.
In ; the
most
production. It
many
a
one-half
-
producing
natural
can
anti-knock compound in gasoline
is based upon ethylene. There are
from
from
coal for
widely
is ethylene from
of f petroleum and
It
gas.
facturing
50
-
studying
The
have raised
processes
are
five
over
of research by the oil
In'
day.
a
is
plants: for
fuel
results
compound for
the manufacture of synthetic rub¬
bers such as GR-S and .Thiokol.
a
from catalytic crack¬
of
the
are
a
in radar and electrical insul¬
ation. It is the base
over 30,000,000 tons of
catalyst during that time, which
has resulted in the production of
180,000,000 gallons of gasoline. At
present 20% of all gasoline pro¬
ratings
two
uses
circulated
or
The
synthetic
called
half without shut-down and have
comes
gas preserves
consumption
for'anti-freeze -liquids such as
Prestone. Polymerization of
ethylene produces the new resin
of the larger
some
day,
a-
Fischer-Tropsch
of/the
cracking
entire
24 hours. Some units
operated
natural
gas
$100,000,000.
over
be our largest source of
fuels.
With
increasing
population and increasing con¬
sumption per cap.ta, coal could
100,000,000 gallons of ethyl alco¬
a
year; which is half of'our
is
move
The
mately
liquid
hol
tion
one
chemicals.
natural
reserves.
chemicals
natural
in opera¬
are
One
used
and oper¬
at.-a uniform
temperature. Units
of
cost
tons, over
8)
page
acids.
internal moving parts,
ates
feet
assure
(Continued from
off.> The
and
trillion annually.. Natural gas dis¬
the
.
been its most vocal advocates.
carried by a stream of air to a
reactivator where the carbon is
Cracking
apparently wants us as a nation to do to
safeguarc
ourselves against a
particular form of statism, jL e., com
munism.
First, let it be noted that he feels* certain tha
the
us.
The communists of Russia
s
octane
.
look
are
Industry: Yesterday,
III Today and Tomorrow
ing,
communistic
us
Now either these
.
The Oil
aurned
by
and
/are V greater/ than. our
consumption./;//
* ♦'
referring, and his entire
the rest of
This compares with 2% in 1941.
notions, are much stronger in this
country today than
they were 15 years ago when the New Deal
began to
"save" the
country from "revolution." A drop of blood
on a
tiger's tongue is said to do
strange things to that
animal.
fH"v /;
But let
1
silly
type of social philosophy?
duced
but little if any less undesirable than
com¬
munism itself?
Or, again, would not such tactics by
giving the notion of extreme paternalism a foothold
;-
upon
country, and the "we" who must provide them
with their needed homes
fuels
Our
the
— since
his program then
the citizens provide themselves
with the homes they need but which
they are not able to
provide themselves—or else they are only a portion of the
citizens of the
monoxide
close to 170 trillion cubic feet and
or
from
;vv
: v
~;V /;\
'
all citizens to which the President is
depriving some of our
nothing is done about
defeat communism
same.
,
na¬
coveries
*'.*.
,
carbon
to
will
and
Where did the President and his advisers learn this
checked the spread of communism
build up their
•
•
cubic
security. This '
which is based
carefully the trend of the President's reasoning:
that "communism succeeds only when there is
with
//,m
"Communism succeeds
only when there is weakness, or
misery, or despair. It cannot succeed in a strong and healthy
society. The nations of western Europe, with our help, have
so
■
gasoline and Diesel fuel. The
gasoline and Diesel oils will be
of high quality.\ The two plants
will : process . about
200,000,000
;
fair field to look after his
a
natural gas. Together they
will make 15,000 barrels a
day of
thesize
planning and
misery,' or despair. - It cannot succeed in a
strong and healthy society/' So, says he, we must "adopt
legislation that will provide, our citizens with the homes
;hey need." So? Who, may we ask, is "we"? He is saying
oy plain implication that "citizens" can not provide them¬
people of the necessities of life and
it, that is an invitation to communism.
peoples, and
own
from
oxygen
invitation to communism.
finally, if high prices
economies,
says
weakness,
our
it, that is
wants.
_
people do not have proper medical care,
opportunities for a good education, or adequate assistance
time of sickness, or
unemployment, or old age, and nothing
is done about
their
1943
hydrogen, and the catalytic Fluid
Flow process is then used to syn¬
He would provide for the
wants and
own
10,
tural gas is partially oxidized
,
our
people are living in slum housing and
nothing is done about it, that is an invitation to communism.
"If
future.
own
precisely the opposite of any
the expectation that each individual will rely
Note
primarily in those areas of
democracy remains un¬ selves
'
American life where the
promise of
fulfilled.
<
;
line of action
a
program
own
He
"As far as the United States is
concerned, the menace
of communism is not the activities of a few
foreign
or
a
fundamental questions about
Here in the main is the President's
<
less than
"underprivileged" by taking away from those who,
despite it ail, have provided or are endeavoring to pro¬
are so closely similar to those the President now
enunciates for home use, it seems to us that this is a
specially
the social
wealth,
the individual from
excuse
President, however, does not stop with eminently
sensible comment on the
subject. He has a cure, or cures,
of his own. It is at these
points that the thoughtful man will
begin to have doubts, or so it appears to us. In very broad
general terms, the procedures for combatting communism
in Europe and elsewhere so
ardently being promoted in
some
more or
same
redistribution of
,
appropriate time to raise
Thursday, June
tionally known it in this country. What he demands is
not a fair field and no favor, but at bottom a forceful
happy to give full support to the
President when he tells the people plainly that such is
the case.
1■': l."U
,V,|;
,
FINANCIAL
old New Deal pot pourri — is the
very antithesis of the prescription of democracy as we have tradi¬
than
more
&
Volume
If
the
THE
Number 4706
167
of the Interior,
Secretary
12 months after the passage of
the
bill, does not consider that private
industry has taken the proper
steps to assure the development
of a synthetic liquid fuel indus¬
try, he is required to certify to
the
RFC
"shall
who
undertake,
tracts
by
promptly
under con¬
and
with
private industry, the
construction and operation of such
plant or plants
:
.
Not satisfied
.
,
with the
Wolver-
ton proposals, our government is
asking for the construction in the
next five to 10 years of synthetic
oil
plants " to
barrels
produce
oil
of
2,000,000
day.
a
Although
have
re¬
COMMERCIAL
cases
for
constructing .huge chemical
plants for catalyst manufacture.
An extremely important consider¬
ation is the need for establishing
cities
new
sites, since much of
oil
shale
is
i'n
the
near
the
semi-arid
economics
of fuel
shoes
produc¬
tion from petroleum, coal and oil
way
shale should be carefully weighed.
The actual cost of the proposed
took
plants for producing 2,000,060 bar¬
*
The
side
government
the
of
considered
;
Bureau
struct
and
in
branches
all
until
the oil industry pilot plants.
exceedingly important: phase
of v the ,; 2,000,000
barrels-a-day
program is that it would require
over 16,000,000 tons of steel which
shale
would
;"V"
One of the chief obstacles in the
of coal for liquid fuel produc¬
at the present time is the
additional
have
to
tonnage
that
would
for synthetic
*
mined
be
To produce 2,000,000 bar¬
rels per day of synthetic fuel from
coal 7 would
require 470,000,000
plants.
tons
;
about three
quarters of our present produc¬
tion.
Furthermore, there is a
of coal
a
year,
Waste of 60% of the heating value
in
manufacture
the
he. used
synthetic
of
Coal could still
fuels from coal.
mined wherever pos¬
as
sible in order to utilize its, full
more
self.
through high
competition against it¬
t
' ;' *
i >
;■
to
,
industries.
■
much
be
to Y contribute
ing
taxes
most
more
expansion in all branches of
tion
the
maintenance
and
aircraft
engines, and
production of aircraft
The
oil
business
stable
sources
of
one
and; well
Its
are
is
our
organized
raw
material
The industry
large.
is
progressive both in its search
for new sources of petroleum and
its constant development of new
products.
Should
shortage of petroleum
and
processes
real
arise, the Industry would pot col¬
lapse, but as a result of its inte¬
any
research
grated
would
program,
supply liquid fuel
requirements from other sources.
As an investment, there is no bet¬
ter buy on the market today than
the oil company stocks. They are
at comparatively low prices.
The
records of steady dividend pay¬
be
ready
to
ments over the years
and the in¬
heating value instead of consum¬ creasing demands for their prod¬
ing 60% in the manufacture of ucts establish oil stocks among
liquid synthetic fuel. ,
.'YY the top-ranking securities.
The
:!& There are other important oil industry deserves full support
items to be' considered in syn¬
as
a
vital part of our national
thetic fuel production. One is the
economy.
*
questiop of technical and operat¬
the
pressures
competitive
market.
Such a program is hardly an in¬
centive for private industry; to
develop
and
market
low-cost
products.
The oil industry would
be in the unfair position of hav¬
for
use
of
later,
' the
upon
profitably be used by
the i oil
industry. ;; One of the
reasons for recent spot oil short¬
ages: has been
the lack of steel
\(
repair
The
An
<■
first,
over,
The
costly than fuels from petroleum.
High subsidies would be necessary
if the synthetics yrere to be put
and
the industry.
billion.
$20
oil
vastly more information * is ob¬
tained from the Bureau c-f Mines
could
about
is
con¬
units
commercial
a
It
highly \ premature.
unwise to design
seems
havfc
parts.
This was resisted by the
management although all kinds of
out¬
Mines
of
We
plants would produce
only about one-third of the total
petroleum output of the U. S.
Synthetic fuels from coal and
-
program
Denmark.
over
,.
brought
were
Germaris
deered
the
right
bear,
that
of
cost
annual
aircraft
parts
en¬
using
lieve
had
in
the
same
time selling our cars for
Neither do they take the
position that it is deflationary.
hundreds of dollars less than they
knew the market was willing to
have been taken several years ago
eight
years
for them?
pay
no
An
position
a
-
talked
to.
'
the
to again
essentials
this
of
up.
had
getting
Danish
repair the damage
complete the tooling of the
workmen
and
blew
difficulty
great
to
machines.
It
almost
took
a
year
uniform
parexitly
to
forced
follow
them
then
in effect have national
came
out of
Collective
bargaining
have failed
ana
like
other
Scandinavians
are
in¬
will
have
mining
(2)
v
we
the
1940
I
sive resistance and sabotage. From
experience
our
with
Danish workmen I
the
same
current
that, if the Danes had wanted to
do so, they could have learned
as
how to
this
extreme
example of
happen when the work
men,are totally out of sympathy
with'the policies and objective «qf
the management.
as
what
an
can
f
wages
of
cost
living
per
as
a
a
1940
a
relation
the
war.
base
certain
in
and
1
Motors
Agreement
Not
Prejudicing
Other Wage
Negotiations
I
realize
the terms
that
with
met
' ,'/•
our
the unions have
immediate
perhaps
approval,
of
unani¬
in
part
formula
they
as
are
well
not
as
the
non-eco¬
the most-reliable
and
measure
of
the
changing cost of living.
(4) We thought it was reason¬
able to maintain the purchasing
of
power
the
hour's labor during
an
of the
term
desire of workmen
ral
as
a
as
(5) If wages were permanently
tied to the cost of living, then the
of
standard
living
of
noting that
agreements could only have
bined effort of
a
great many peo¬
importance of cooper¬
the employees of a
ple;; The
been reached in an atmosphere of
ation
mutual confidence.
corporation perhaps is underesti¬
mated by many people.
It is a
fundamental
requirement
of
a
successful business. For example,
am sure
that those of you who
especially interested in unionmanagement- problems will find
these agreements very interesting
reading as much for what they
leave out as for what they con¬
tain. J
,
<'
;
'
.
are
u
Copies of these agreements can
be attained, as soon as they have
beeii
by request to Mr.
H. W. Anderson, Vice-President in
printed,
Personnel
the
of
Charge
Staff,
General Motors Corporation, De¬
;> /•
troit, Michigan.
;
/
f
;■
-We
/
that
these
agree¬
approval of
involved but
ments not only have
the
Union
leaders
among
it is easy enough to define a wage
terms of cents per hour or in
in
week. It is difficult
to define the effective work done
dollars
per
ficld
and
unwilling
to
deliver
a
and
the
management, it is very
Indeed, or almost im¬
to
establish
efficient
operation. As any of us who have
difficult,
possible,
enthusiastically
accepted by the workmen in our
had the experience
plants. We believe the whole Gen¬
with in manufacturing operations
eral
is
that
they "were
Motors
organization, includ¬
ing all employees, is now pointed
•«0»"
v.: ;•
-r
-
-
have been quite favorable, a few
ness
amount at all.
critical.
For
example, "Barron's Financial
Weekly" and the "United Mine
Workers' Journal" both promptly
objected to the "basis for deter¬
mining far wages adopted by Gen¬
eral Motors, the UAW-CIO and
the UE-CIO. I am sure that they
did not object for the same rea¬
V' ><
been
frankly
Frankly, I am personally en¬
for the money. Quality as well as couraged by criticism from such
extreme points of view, and I feel
quantity is involved. This is espe¬
thrt perhaps we have found a safe
cially true In .the case of progres¬
middle ground and have developed
sive manufacture in mass-produc¬
workable criteria for establishing
tion industries.
If the workmen
in
collective
bargaining
in a particular plant are dissatis- wages
day's work, if they are noncooperative with the supervision
»Y'
Motors
believe
settlement and £
clear understanding of both tbf*
problems involved and the essence
of the agreement:
Y
•
"It
would
be
a
good
deal less
than
accurate to say that, from
standpoint of national eco¬
nomic yvell-being,
the General
Motors settlement has produced
the perfect formula. The perfect
workmen
we are thinking in
antidote for inflation,
if
an
relate
increases di¬
wage
nroduction rather than
to the cost of living.
But as an
instrument of company-wide eco¬
nomic and social justice it has a
great deal to commend it."
rectly
to
Union workmen
would be frozen.
have
sons.
agreements.;;-Y:';;
I
fair
What Is Expected by General
S>
edi¬
an
"Times"
nomic
.
these
a
our
York
It seemed tomie to indicate
ing.
would
of all other citizens.
,
New
going to read it to you in clos¬
terms of
natu¬
well
paragraph in
a
the
formula,
agieement.;> Se¬
curity of earning power is
periods of high,
the
provisions are understood, as well as others can properly ex¬
benefits will accrue from these
determining fair wages for two
agreements not only to employees it will be found that perhaps some pect to participate in the pros¬
years, and the current wage in¬
real progress has been made in
but to stockholders, dealers and
perity of America.
The annual
creases
resulting from this for¬
mula.
Perhaps what may ulti¬ customers. We expected to make establishing principles. Each cor¬ improvement factor of 3 cents an
poration, each union and each in¬ hour
(approximately
2%)
we
mately be the more important re- important progress in all direc¬
tions during
the two years of dustry can apply if they wish though we could reasonably un¬
suit was the development of a
these principles to their own par¬ derwrite for the people employed
stabilized operations underwritten
better understanding of the rights
ticular set of facts and conditions. in our business for the two years
and responsibilities of the parties. by these agreements.
The principles should not embar¬ of the agreement. Others may
We are hopeful that this under¬
Many people have talked about
rass anyone. YY Y... .?W/.Y:YYYY.-Y Y;
agree on a different improvement
standing represents real progress. the importance of cooperation In
While press comments generally factor as applying to their busi¬
The agreements-speak for them¬ any matter
involving the com¬
selves but it is worth
am.
Price Index of the Bureau of La¬
available
in
referring to
certain
companies.
As far as we were
concerned, the Unions end our¬
selves thought it was fair as ap¬
plying to our situation. * Y
(3) We adopted the Consumer
;
read
torial
bor Statistics as
General
and
employment.
Perhaps the validity of
might be challenged in
industries
food
are so
for such items in
used
was
economists
some
reason
one
mal proportion of the total Na¬
tional income that is usually spent
base for wage control during
this
produce quality parts and
satisfactory aircraft engines in a
relatively short time. I am citing
average
the
-
high is be¬
cause
the production and prices
of durable goods are relatively so
low that expenditures for these
items are not absorbing the nor¬
wages.
Such
convinced
am
and
heard
that
clothing prices
sound basis from which to project
hour
have
state
rela¬
dependent, determined people, had
beaten the Germans by their pas¬
our
Ap~
now too late to
anything about it, especially in
such a political year.
of union workmen,
wages
prices.
national policy coidd
do
deter¬
We adopted
of
costs and
our
Apparently it is
means
tion
have
war¬
The
opposition of unions
generally and of some manufac¬
turers prevented a clear under¬
standing of the merits of this idea.
bargaining.
will then
be found for
to
could
close to
fect.
will
other
some
to-
changed rapidly enough to
put/such a practical plan into ef¬
through
powerful union pressure,
week
not be
through the years such patterns
are set by a few of the
large cor¬
porations
and
all
industry
is
and
nothing
worthwhile
the plant. The Ger¬
mans
who were trying to run it
became frantic. They finally gave
The Danish workmen, who
up.
na¬
patterns.
wage
in
creases
cents
We do not believe in
national
could
time levels without important in¬
for*
hour.
-
from the
work
been maintained at
muJa.
a
war-time
of' workmen
power
point out
wage
measure
the pre-war 40-hour standard, la;
this way the relative purchasing:
Essentials of Wage Formula
I would like
necessarily infla¬
get back
to
years
48-hour
anyone else
I
is
effective
eral
reasonable and fair to the
employeesY nor could
it
tq avoid the inflation that has oc¬
curred. We should have taken sev¬
I could think of
of making such
way
appear
that
tionary.
at
were
For me, this was
$64 question.
a
we
They
accountably
power
the General Motors executives
lowest standard of living they had
If
the
of
threats
who negotiated the agreement be¬
per
operate,
and
nor
them to accept the
asking
ready
plant un¬
to
Neither the union leaders
were
was
machinery
strikes
strikes.
living, how
could we explain to 275,000 Gen¬
comman¬
completely
understood.
I am sure that they
have not unfairly prejudiced the
collective
bargaining
in
other
companies and industries. If the
direction and
the
in
crease
the time the
because
in
.
(1) It did not establish
tional pattern of so many
mous
(Continued from page 11)
so
Danish workmen under the super¬
vision of Germans.
Just about
not
Labor
increased as 4#ie years when demand exceeded supply*
that they reasonably would lead such a student of th&
share in the prosperity of Amer¬ past to conclude that present high,
ica?
Can they only accomplish wages were more the result of
this
by strikes anc| threats of fundamental inflationary pressures
strikes?
created by the war than of un¬
^3) If we said "No" to the re¬ reasonable pressure of powerful
quest for wage increases at this international unions of which the
time in face of the recognized in¬ public is as conscious due to the
by
go
in equipment from Germany and
attempted to repair
gines and produce
37
real wages
the new plant and moved
settlements with
formula adopted by the parties for
to
finally
(2557)
eral Motors workers that while we
Germans
Germans wanted the plant to take
investment
now
$30 billion.
the
war
rels per day of synthetic oil from
and snale is greater than the
synthetic
as
the
their
total
coal
is
experts in the oil
industry estimate the cost to be
purpose/
much
a
about
came
plant in Copenhagen, and a new
addition to it was just being com¬
pleted at the time of the war. The
this
as
and
unaccountably found
into the machinery.
During
the petroleum industry, which
officials
shoe,
the
meaning
the factories in France where they
wore
wooden shoes, the wooden
re¬
of
government
from
comes
"sabot'*
word
from the fact that many years ago
when the men were dissatisfied in
gions of the West.
The
sabotage
French
and
coal
our
word
wooden
plant
quested from $8 to $9 billion for
■■
outright sabotage the effi¬
ciency of ' the operation is de¬
stroyed. As a matter of fact the
ing manpower, of which there is
a shortage.
Another is the need
whole
CHRONICLE
FINANCIAL
&
the
most
a
difficult
deliberate
passive
know,
one
things to
slow-down.
resistance
and
in
of
cope
By
some
of
would
like to ask the editors
these
publications the same
questions that I have asked many
executives, both inside and out¬
side of General Motors, during the
last few months.
Only if these
editors
feel
can
answer
that there
their
them would I
is any
validity in
criticism.
or
been
has
not formalize the
Something like this
may
going
at
on
varying
a
rate for at least 100 years. Other¬
wise
standard
the
workmen
American
of' living of
would
not
for the past 10
with Bacon, Stevenson &
Co., New York City, died at his
home at the age of 52.
Y
Otto
Culman,
years
Mrs. ^ Saul
M
Schwamm Dead
rs,Y ElizabethLichten
Schwamm, a partner in Schwamm
Co., New York City, died at her
&
home
Mrs.
of
a
thrombosis.
coronary
Schwamm, the wife of Saul
Schwamm, the senior partner, was
41 years
old.
,
,
have increased as it has and nor¬
working hours could not have
mal
reduced
been
60
from
vYY
to 40.
or
;
It is well to remember that this
annual
on
be-
improvement factor based
technology and better tools can
dissipated
featherbedding,
by
inefficiency
and
work
made
that it cannot also be
paid out
as
It
not
addition
to
be overlooked that in
the annual
ment in real wages
for
improve¬
a
particu¬
individuals have full op¬
portunity to further improve their
economic status by qualifying for
better and higher paid jobs.
lar job
Y In the absence of
ments
wages
are
than
when
they
John J.
Gerdau
will become a
partner in Schoile Brothers, 40
Wall
Street,
New
York
City,
members of the New York Stock
Exchange,
on
June 18/
so
additional wages by employers.
should
Schoile Brothers to Admit
more
'■
union agree¬
flexible
more
determined
(1) What is a sound basis for for definite periods by such agree¬
ments. A study of the past, particudetermining wages?
(2) How do workmen get their
Culman Dead
Otto
Y
are
]y of periods of full employment
J. S.
Hope Partner
SCRANTON, PA.—J. S. Hope &
Co., First National Bank Building,
is now doing business as a part¬
nership, with J. Stanley Hope and
C. K. Hope as partners.
Hamlin & Lunt Admit
N. Y.—Thomas W.
a partner in.
Lunt, Marine Trust
BUFFALO,
Mitchell will become
Hamlin
Building,
&
members
of
the
New
York Stock Exchange on June 17.
38
(2558)
THE
bought |t at
your profit
points.
This leaves you with Lock¬
heed bought at 15,'stop at 21*
which is still okay;
United
Aircraft bought at 15 with a
stop at 27 V2. In case the stop
Markets
Whyte
Says—
is
Market
points to mild
broken
important than
This
*
*
If there is
act better
market.
*
or
With
the
States
tified
President
to
enter
ages exist
and
meeting
of
A
of
yet
lihood
Commerce,
Harriman.
Mr.
The
W.
Advistory Com¬
subsequently endorsed by the In¬
*
58.
Dresser
at
should have half stopped at
the bells
24^, buying it back at 22 or
with the news that we
A few weeks ago
rang
in
were
a
bull market.
new
car
better.
requirements
program
familiar
wired
had
at 32
the
freight
take
it is under this
better.
or
units
be avoided is
departmental
of
within
steel
the
; Third,
obtained
pro¬
allocating
signed
Government.
that
legal
for
to
the
the
clearance
whatever
several
If
be
profits
buying.
readers
this
To
too
More next
take profits un¬
less you buy. Regular follow¬
ers were
already long, so the
talk of profits wasn't mysteri¬
ous.
In any event the advice
to
sell
was
specific. Only
trouble
was
the
prices at
which
profits were to be
taken were too optimistic. So
later I changed a few by rais¬
ing the stops.
:
;
*
you
[The
During the past week
these
stops
This is what
*
a
happened:
had Douglas at 52.
half at 61 and
few
taken.
were
You
You sold
bought back
the half at 59.
your gross
In the first lot
profit
was
to
55j
When
stock
■
subse¬
quently broke 57^ and you
were
stopped out the profit
was
a
gross of 2
points.
G. L. Martin also
when it broke 18 V2.
>
-
IBA Appoints Boehmler
Dir. of Pub. Education
CHICAGO, ILL.—The appoint¬
ment
of
Public
Erwin
W.
Education
Spring
Boehmler
was
sold
Having
as
Director of the
Bankers
of America
Association
announced at the
Meeting of the Board
Governors
of
the
of
Association
by
Julien
H. Collins, Julien Collins
Co., President.
Prior to join¬
ing
the
IBA
staff,
Boehmler
served
director of training and
public relations for George Fry &
ment
He
as
ture
consulting
engineers.
;
was
manage¬
and
manager
of
the
statistical department of
"Chicago
on the
Journal of Commerce"'and
staff of Sheridan, Farwell & Mor¬
rison, Inc., investment counsellors,
Past President of the Invest¬
a
ment
Analysts Club of
and has been admitted
Chicago,1
to the Ill¬
inois Bar.
Illinois Central R. R.
part
time
/
in
college teaching
administration in the Chicago
sorial
Due each October 1, and
April 1.
from October
1948-April 1956
1.35%-2.65%
or
area, and is
Certificates
To yield
'For the past 18
years Boehmler
has been
engaged either full time
and
2%% Equipment Trust
continuing
lecturer
Northwestern
of
of
profes¬
as
finance
University
Commerce.
co-author
in
He
a
is
text
School
editor
on
at
and
financial
institutions that is, being
prepared
by members of the finance de¬
partment at Northwestern Univer¬
Schwabacher & Co.
New
Members
New York Stock
Exchange
York Curb
Exchange {Associate)
Francisco Stock
Exchange
Chicago Board of Trade -
14 Wall Street
New York 5, N
Y.
OOrttandt 7-4150
'
Teletype NY 1-928
Private Wires to
Principal Offices
San Francisco
;
Mrnterej
—
—
Santa Barbara
Oakland
—
Sacramento
Fresno
sity.;,;,:;
,_.v.
.
alternative
methods
The first is the
method
which
im¬
partment
to
of
Public
Law
provides
the
in
use
tech¬
the
De¬
Commerce, designed
the
out
carry
voluntary
follows
nique already in
395.
provisions
This
of
procedure
channel through which
a
claimants may qualify for special
assistance.
It provides for
study
of individual
programs,
screening,
authentication, certification and
finally allotment on an equitable
basis to all producers.
This
method
is
essentially fair.
is practical first, where a lim¬
It
ited
tonnage is involved; second,
tonnage is diver¬
as to product
mix; and third,
where the total
sified
the
any one
total requirement of
product is well within the
Industry's ability to produce that
particular product.
Just so long
tonnage takemoff-the-top
leaves
sufficient
for
practical
the
as
operation of
civilian economy,
be made to work.
our
the plan can
Admittedly, there is always the
possibility that the number and
size of the programs
may in time
necessitate
cutting
of
a
large
number of consumers of a
product
or
producing
single
shutting down certain
units
semi-finished
for
in
steel
order
may
that
be used
The 1948 Convention of the In¬
vestment Bankers Association of
will
Beach
Fla., Dec. 5
r
1
sixteen
is
sure.
make
<
required to
other
that
hand, it. becomes r
might as a na-:
our
a
decades, *
must
again be thrown against the;
powers of aggression, I am
certain,
and I know each of
you
certain,
that
the
.Our
is equally
Steel
will again become
forces of right.
a
'
Industry ;
citadel of the
\
:
-
<;
stewardship carries
1
<
.
.
grave
responsibilities.'
'However
early
these
sobering
re-'
sensibilities may be, they consti¬
following:
nations
tute ail; inspiring challenge.
;
essential products. Then,
and not until then, should we even
consider
the
second •
At
present
no
method—
;
be
held
Hotel,
to 10.
on
tin, tin products, anti¬
at
Holly¬
to
control
for
mate¬
export;
and
to control materials necessary for
the manufacture and
delivery of
Hollywood, materials,
-
and
required
required
for
export.
These requirements must be
cer¬
*
trusion
comment;
„
.
"The reasonable exercise of the
of
powers
to
seem
the Commission
require
this wide
arately
it
would
pass
variety of subject
rather
proper
that
than
of
request
to
depreciated
on
properties
that since
sep¬
grant
utility
a
pany
by
the
without
proper
I
Markets
will
not
or
bonds,
ned. in 1947.
as
permit
plan¬
was
It has had
to
Approval for
SEC
was
granted
on
these
stock dividends
mon
pany's
parent
to
the
com¬
com¬
cal
be
limited, while
notes are outstanding, to the
amount of capital contributions its
parent might make.
Contempla¬
further increase
a
secured
in
unsecured
borrowing,
of
sets
the management had
In
proceeding with the -Long
case, the Commission has
Island
again
run
into
an
adverse
decision.
Practically
points
at
are
court
the
issue in the
same
of
case
Kings County Lighting, also un¬
dergoing recapitalization, almost
on
w,ithout
all
the
that
as
planned to do.
un¬
limits
property in the Sys¬
that this factor be given con¬
sideration
indebtedness necessitated
charter
-
tem) has been demonstrated to be
greater than that of the two sub¬
sidiaries. It would seem only logi¬
was
the
tion of
*
a
the electric
by the
necessary, which
the condition that
determi¬
proper
earning; power of; Long Island
Lighting, it?e}i,(which has most of,
incur
substantial bank loarts for expan¬
sion/
a
preferred stock¬
will /now; .be ex¬
of
whose
owned
by
In March
stock
common
Long
Island
is
Lighting.
the U. S. Circuit Court
ceeded. ;;• • 'ik;
of
Long Island Lighting, in its pro¬
posed reorganization,, has sought
to consolidate its
subsidiary com¬
overriding those of the Commis-1
.
•
on
a
to
allocate
new
sionv
earning
value
similarly, to
power,
termining; allocations, ingan iza tion.;;..
securities
but' also
to
the
but that earning power con¬
a
fair value basis for de¬
stitutes
■
basis giving weight not only
to;: property
Appeals in New York ruled not
that the SEC has powers
only
panies, Queens Borough Gas &
Electric and Nassau & Suffolk
pro¬
a -reor-.
' J.1....
■
[ The opposing views of ;the
and,the
battle
for
layed .the
Commission, »and
«
SEC
their
jurisdiction, have de¬
Long
Island
Lighting
procedure approved by the SEC in
reorganization to the point of
other recapitalizations: ;
haustion, of ./the preferred stock-
r.:
?
1
:
i
|;.c1v
*
*
property, where, under more set- •;
tied market
conditions, high rates /
may encourage the use of com¬
petitive -/fuels.
In this case the
the company to refund some of its
outstanding
on
prop¬
satisfactory rate of return,
particularly in the casa of gas
requests."
now
based'
property,
v
earn
punitive conditions attached to the
granting of reasonable
the
argued
that certain types of
property cannot
under
optimum
conditions
borders
coercive
to
recourse
It
Manifestly this contention gives
no
weight whatever to the fact"
the performance
utility ;of
of
cost,
are
nant of value.
con¬
cerning an extraneous matter. The
penalty in the statute seems ade¬
quate to enforce
rates
erty is the only
only upon its consent to ob¬
the Commission's order
original
concerned.
rate of return on
a
com¬
serve
.
in
the case, and has insisted that new securities be al-v
located solely on the basis of the
.....
posed
rials
/
qther intangibles, and made; this
President the
priorities
'
•
The Commission, however,has
apparently resented the SEC's in-
Lighting./ The management
authority to assign
the
write-off of the water rights and
holders,
authority exists
-
(Continued from page .7)
to; dirfect
purporting
consent
to proceed in this
manner, except
that granted under Title III of the
Second War Powers Act.
-
sion
company's
complete Government control of
production and distribution. ;
•
,
mony,
and several non-metallic
products.
It
also
vests
in
the
To Be HeH Dec. 5-10
wood
the
will
tion, for the third time within
period of less than four
and
approval of preferred stockholders
at
a
special meeting, since the
more
controls
IBA Convention
America
to
an
avoid-
be
Hatd-Boiled Utilities Regulation
I
In New: York Stale sfc'SS
v>
| This section of the Act provides
#
San
Two
where
formerly financial fea¬
editor
export
Cooperation
^
mediately
present
themselves—
the
voluntary method and the
method of complete Government
&
is
was
V
control.
reduced
was
Superiority of Voluntary
j
not
9 points. Associates,
With the repurchase
your cost
of the entire lot
eocpressed
time
Investment
of
Whyte
in this
necessarily at any
coincide with those of the
Chronicle. They are presented qs
those of the author only.]
do
likely to make
appearance includes the
to
may
referred to the Steel
Industry. ;. ;
views
article
only those items war¬
special consideration are
ranting
—Walter
sounded like double talk. For
can
In¬
to in¬
necessary
Thursday,
have
•
how
in
group
any
This is
that
sure
casual
must
from
or
dustry.
made in selling,
were
the
not
ment
excuses.
sacrifice
the
on
essential
<
back and advised readers that
nation
our
produce that state of preparedness »■
not too little nor too late.»
as¬
tasks
1
—and
clearance be given the
That
essential.
wisdom, a
by itself,
preparedness,
conflict, you
Steel
Industry
the
is certain to result in lost
companies
buy. Every¬
by whom these men are now em¬
motion from
overlapping of func¬
thing was lovely. The only I If from the above, you
ployed.
tions and
get
duplication of effort.
questions left were what to the impression that I'm not Another essential is to establish a
Finally, that a Screening Com¬
mittee be established to
pass on
buy.
wildly enthusiastic about the single qualified group capable of the validity of the claims for
%
>is
*
spe¬
studying, screening, authenticat¬
cial help.
market, you'll be right. Tech¬ ing and
3
certifying each claim¬
It was all very easy. In fact nical
A
reactions are nice ex¬ ant's
study
of
those
programs
request,
be
it
submitted
it was so easy that I stepped
which have
already appeared and
cuses.
But I like profits, not through departments of Govern¬
those most
their clients to
enable
another
defense,
individual
of
shall
staffed by experienced
personnel.
mul¬
a
of all
programs,
care
state
foreign and domestic.
; Second,' that the Division, be
procedure that other programs are
being given similar assistance.^-
averages
ket; forecasters
of
...
Anaconda, bought at 32 V2
had
What must
penetrated the ; closely has an old stop at 35 for half
tiplicity
of
If broken, repurchase
watched high points; the mar¬ a lot.
cedures
and
The
pro-;
new
the
22,
energy
Who today dares predict the
de-v
mands the
Industry will face to--,
morrow? v If, in God's
First, that the Steel Division,
operating under Public Law 395,
be enlarged to a size
adequate to
that freight car
currently secure from
steel producers, on a
voluntary
basis, the steel needed to meet
atomic
gas;
grams are authentic and
Secretary of Com¬
merce, Mr. Charles Sawyer,'that
the following steps be taken: '
procedure
at
performed, the
builders
Stop half at 61 and buy it
back
*
*
the
and
The
Industry long since ex¬
pressed its complete willingness to
attack this problem.
It awaits no
further word than that the
voluntary method must be used.
In recognition of this fact the In¬
dustry has already recommended
to
quali¬
Army, Navy
Commission; freight
proximate four million tons.
If the task is to be
talk, I know. But any¬
Bethlehem, bought at 31, dustry, the procedure by which
body who's been in the mar¬ should have half of it stopped deserving programs may be ap¬
proved and activated.- It is under
ket for any length of time will at 32.
Caterpillar bought at this
55.
;
mittee caused to be
prepared and
double
know it's true.
'
,
conditions, there
necessity for such legislation.
no
so
the
uses is estimated at some
13 mil-'
iion tons annually. Hence the
total
foreseeable dislocation will
ap¬
of
Under present
is
of
mately 17 million tons, to be.
shipped during the next twelve¬
month period.
Total tonnage cur¬
rently flowing to the same end;
no
willingness to
action, and political ob¬
recesses.
Averell
oil
cars;
believe there is little like¬
it before the Congress
servers
In¬
needs
projects, and housing.;
The total
tonnage required for
the foregoing amounts to
approxi-"
signified
take such
Committee was
by the then Secretary
appointed
the advice applying to
which
that there is nothing certain them
appeared here
about it.
This sounds
like May 13 still goes.
mover,
Steel
our
basis
November 17, 1947 and, again, on
Jan. 7, 1948.
The Congress has as
Industry's willing¬
cooperate.
fying;
and Maritime
economy
to a
requires legisla¬
tion.
This authority has been re¬
quested by President Truman on
two separate occasions—first on
controlled
The Department of Commerce,
was delegated to
carry out
the provisions of the
Act, was in¬
to
qualifying for help
under
the
European Recovery Act; export to
nations other than those
To- return
♦
emergen¬
which
exception dustry
Advisory
Secretary of State
by the Secretary of
No Need for Government Control
immediate and constructive action.
of the
the
Commerce.
whiph affect our national
economy.
The Steel Industry took
formed
by
and approved
into
cies
back
Thursday, June 10, 1948
Demand—A Continuing Struggle
vs.
flation in those fields where short¬
of Avco, which will be a slow
anything certain
about the market it is the fact
United
ness
the
CHRONICLE
voluntary agreements with Indus¬
try for the purpose of curbing in¬
than the
worse
Supply
authorized
the
re¬
ever.
FINANCIAL
(Continued from page 9)
Anaconda,
Avco,
Bethle¬
action.
But
it can become hem, Caterpillar and Dresser,
more than that.
Stops, now, are still alright. They don't
more
&
Steel
(it applies to only
half your lot) you buy it
at 25 with a stop at 24.
By WALTER WHYTE=
=
15
about ZV2
was
Tomorrow's
Waller
COMMERCIAL
«..
)
As,
i.i
>
t
ex-
V
,
,
rff,
.
Volume
167
THE
Number 4706
holders.
creased
to the point where it
longer fair and reasonable,
we
are
required to see that the
rates charged to the public are
Recently; a new preferred
stockholders group was formed to
attempt to effect
is
separate re¬
organization of Long Island Light¬
ing itself because of continual dif¬
a
ficulties encountered
in
solidation.
the
com
Retroactive Depreciation
Prior
to
1938, utilities in New
York State
uniform
carry
were
based
given
by
by such
the
on
on property
As
reserves.
these
after
accounts
as reserves
for
depieciation,
basis
same
charges
to
that
equity
it is unnecessary and
v;
undesirable that
many cases
costs, since
a
slavishly
other
many
Public
Service
cision
last
Commission's
in
year
*
there is
.
of
proof to estab¬
no
service classifications and the
ous
rate blocks in each
the
The
Commission
the
is just and
one
question
.
.
is
.
before
not
alone
is entitled
company
to increased revenues but whether
the
schedules
new
propose
able;
.
.
which
just
are
and
they
reason¬
The Commission has
.
no
alternative but to provide for tem¬
which will
rates
porary
produce
and give (the
further opportunity of
meeting the statutory burden of
proof and, through our own staff,
increased
revenues
company)
make
an
analysis of the company
costs to determine to what extent
the alleged increases prove to be
in
how the increased
(Re Lynn Gas & Electric
to
de¬
case
lish that the proposed distribution
of increased costs among the vari¬
eration
addition
the
Brooklyn Borough Gas Company
(Case 12994. Aug. 6, 1947):
costs."
in
that
ing quotation from the New York
needed
rates
viewpoint involves the incentive
or premium price
plan. On June
30, 1947, the subsidy program de¬
veloped during the war came to
ts end, and
Congress passed s
citations from that of the follow¬
factors must be taken into consid¬
In¬
thereafter,
dif¬
some
by actual experience and
be raised."
revenues
;■
should
,v-.-
decided
never
existed.
The Rhodesian and African
tations of domestic production oi
set this up
lated
the
stated
(Continued from page 12)
tons.
mines
"Unearned Sur¬
account,
value
of
(
only
down of
some
Of
amount,
this
:
*,
;V ■
needs
seems
they
the
■■■
me
the
■>the *
historic
United
to
na¬
token,
we
to
to
The Com¬
notice
of
ap¬
peal, and it is hoped that the final
adjudication will settle the matter
the
thai
needs may be met,
and it seems to me that there are
two
New York
utility
terfered with in the event of war,
retroactive
and for all.
depreciation
once
.
Other Commissions Are Different
^
Jn contrast to the situation of
State Electric & Gas,
companies in many other
States have been permitted to fi¬
plant expenditures in ad¬
sometimes
investing
in
nance
vance,
Government bonds until the funds
*
arc actually needed. For example,
I Public Service of Indiana has re¬
cently completed financing its esti¬
mated requirements through 1950.
It is of interest to note, furtherin
>re,
a
half
that less than a month and
elapsed between the date
of its last
application for approval
financing and the actual offer¬
ing of securities.
of
•
The comments of the Massachu¬
setts
Department of Public Utili¬
ties.
in
various
during
cases
the
Ipast year, are interesting to ex¬
amine:
'
"
(i)' "In general, except in so far
certain rates may be basically
unjust or inequitable, it is not the
function of a regulatory Commis¬
as
sion to substitute its ideas of rate
;
structure for those of the
ment.
.
Within
certain
manage¬
limits,
of
the decision of those most
course,
familiar
must be
with
final,
so
local
long
conditions
as
the
over-
there
still
will
remain
supplies. In the
place, there is the factor
of the need for an adequate de¬
fense stock pile. While the Stock¬
piling Act of 1946 made provision
for stock-piling under the direc¬
tion of the Army-Navy Munitions
Board- whenever
practicable in
the light of
the needs of American
industry, the Board until recently
done
little
lating such
has been accorded to civilian use.
It is
entirely possible that ArmyNavy stock pile needs will receive
priority attention for a consider¬
able period ahead. In addition to
the sum of $200 million in appro¬
priations available for stock-piling
needs
previously provided, the
President in April sent a message
to the House calling for contract
authorizations of $375 million ex¬
tra. The message expressly stated:
"This contract authorization is re¬
quired
permit the Bureau of
Supply to enter into long
for strategic and
to
critical materials
(2)
1
D. P. U. 7709. July 25, 1949.)
"This
quired to
■
a
see
Department
If
re¬
that capital receives
fair return, and no more,
property.
is
that
return
on
is
its
de¬
accumu¬
stock pile of copper.
The needs of
industry and for
consumption generally have been
so great, top priority, so to speak,
Federal
v pany.
toward
a
company's prudent investment."
(Re Springfield Gas Light Com-
;
to
second
all net revenues do not represent
more
than a fair return on the
•
access
available copper
had
term
the
contracts
so as
to increase
available for stock¬
piling and other essential needs."
Testimony before the House com¬
supply
mittees
indicates
of
67
the
that
the
to
end
•
important factors which jus¬
tify comment in this particular.
In the first place, our own se¬
curity demands that we take steps
to conserve copper resources in
our
hemisphere so that in the
event our shipping lanes are in¬
of
effective
are
such
military secrets, bu,
procurement will have
be doubted.
of
own
buying program will be
and how urgently it will become
have
There
our
the
which
is a very delicate
adjustment involved
in European supply as well as in
continuity of the flow of copper
that
sive
How exten¬
its impact upon- the available sup
ply from foreign sources cannot
problem
future.
anties to producers in the Belgian
from
imports
copper
available,
ever sources
import
same
sources
States
important
meet the
participating
continue
provided
most
continue
tions.* By
should
to
the facts the Commission's deter¬
mination of a $10,669,749 "short¬
has served
au¬
guar¬
greater stabilization be assured in
mission
stock-piling
Congo and Rhodesia.
through which
have been met,
sources
Gas & Electric case, the
Appellate
Division annulled on the law and
in depreciation.
our
to
unreasonable
to the
that
In its decision in the Rochester
age"
that
not
even
demands of
than $43,-
represents retroactive de¬
preciation arrived at by an engi¬
neer
employed by the Commis¬
'•
expect
is
point of long-term contract
and it
000 000
sion.
it
thorities will enter the world mar¬
ket and seek copper from what¬
European
$70,000,000 be taken.
more
anticipated in¬
copper
historic
write¬
a
the
In view of the limi¬
sources.
equipment purchased through
the Recovery Plan. These are the
given recently
on the condition that
meet
ern
Commission approval of Niagara
Hudson's proposal to consolidate
was
to
crease
common
stock by a
corresponding amount.
It is
interesting to note that
its subsidiaries
undoubtedly be stimu¬
can
eign
in consumption in Europe
by furnishing their properties and
transportations systems with mod¬
reducing
its
ing to subsidize the output of cop¬
per, lead and zinc, and that we
cannot regard
this plan
as
a
as
and other
are necessary
at the time of the plan's termina¬
tion, whenever it occurs, can be
more
readily and with less
hardship in a period of high em¬
ployment and business activity,
such as the present, than at
any
time.
Consequently,
to
the
making
be
this
best
adjustment."
can
:
;
be
a
supplies, there
serious shortage.
Viewed
Washington,
the
is tight—and it
from
copper
situation
be
can
tighter.
foi
postwar
'
con¬
this
time
inevitable
lead
will
price
to reduce available
made
other
import
If all factors remain
well.
stant, if all production continues
on schedule, at best there will be
just about enough copper to go
around.
At worst, if some un¬
foreseen circumstances shall occur
He
the
adjustments which
seems
the
to increases of the domestic price
per¬
manent part of .our
economy.
concluded: "It is clear -that
changes in employment
that
News About Banks
,
The House Committee on Public
Lands has brought out a measure
And Bankers
to
provide for a Mine Incentive
Payments Division in the Depart¬
ment
(Continued from page 25)
Interior, to handle the
premium price plan for^ copper,
lead, zinc and other metals. De¬
critical
of the
directors
of
board
The
of
'
minerals
Lincoln Rochester Trust Company
has promoted
Assistant Vic6-President Luke T.
Smith to the office of Vice-Presi¬
of Rochester, N. Y.,
of the Roches¬
dent and Manager
that
strategic
materials required for
some
and
90%
critical
the national
It
is
>
ter Trust Office. It is learned from
Board advise
stock pile are obtained from for¬
plus-Special"
The President vetoed the tion of the tax from four cents
sill last August
saying that there, per pound to two cents per pound
is no adequate reason for continu¬ affords no
adequate answer in
except those which the Munitions
In the
certainly in a deficit status, esti¬
mated at something over 820,000
an
certain
is possible, as cheaply as pos¬
sible, as soon as possible. Out¬
right repeal or a long-term sus-.
pension of the excise tax on cop¬
per imports is essential.
Reduc¬
additional 2-yeai
an
One
much copper
as
as
pay¬
ments would be made by the RFC
of
in
providing
import
we
plan.
for strategic and
Consolidated Edison, for
example, the engineer employed
by
the " Commission
estimated
^.'shortages" in depreciation ex¬
ceeding $160,000,000; the company
case
bill
price.
39
is open to us, and that is
course
velopment and conservation
in?
property
sizable
that the Commission has
amounts
now
which
its financial stabil¬
assure
to follow
vestors prior to 1938 were led
by
Commission sanction to consider
as
dividend
a
rate schedule be designed
accruals
appears
pay
(4) ".
in
been made with the Com¬
mission's sanction. ■*'■.
\
it
the
(Re New England Telephone
Telegraph Company.
D. P. U.
7750. July 24, 1947.)
had
Therefore,
finance
to
&
despite
earlier
of
ity "
be ap¬
surplus,
that the
absence
is here
as
capital
to
would
plied retroactively to reserves ac¬
prior to 1938, causing siz¬
able
the
meet
to
appear
find
(2559)
posal which currently may enter
the scene from the
Washington
ferences in the tenor of the above
whether
crued
the fact
The reader will
reasonable.
pany
straight-line" basis.
that the
In
present
acquisition of the new plant necto give adequate service to
the public.
Such relief is neces¬
sary in order to enable the com¬
However, the Commission then in¬
sisted
its
essaiy
companies were required
thenceforth to make accruals on
"age-life
not
CHRONICLE
May 19,
D. P. U. 7642.
venture
such
and the
the
Company.
sought, the
petitioner will be handicapped, in
our
judgment, in seeking new
reclas¬
were
,
.
that
do
such relief
reduced
Jan. 1,
of
such
are
needs.
those
rate of return
earnings
reservations,
sified
revenues
retirements
accounting. Naturally,
they charged the public
we«-e
1933
tioner
for
of
the rates
;\
FINANCIAL
&
1947.)
"Future needs of the peti¬
(3)
the "retirement reserve"
on
method
1947.)'
required, by the
of accounts, to
system
reserves
based
...
no
correspondingly increased. These
propositions are firmly imbedded
in the organic law of this coun¬
try."
(Re Worcester Gas Light
Company. D. P. U. 7643. May 29,
;-.v
<t,
COMMERCIAL
the
not
are
needed
for
stock-piling,
and
the
program
include exploration pay¬
would
ments in addition to
development
and conservation payments.
Pay¬
ments would not exceed $80 mil¬
lion per year under this
program,
designed to terminate on June 30.
1952. Proponents of the bill point
out that when
a
mine able to func¬
possible that such factors
to operate.
and brass mill and wire and cable
mill
products for domestic re¬
quirements and foreign aid. It is
quitp likely that these will create
a
supply-demand
require
may
position whicn
the expansion of
a
series of controls.
Controls, how¬
designed so as to
sufficiently flexible in- order
must be
ever,
be
to
permit prompt variance to meet
export conditions. It is quite prob¬
able that the current price for
copper
will hold firm in 1948.
Copper buying programs by dol¬
lar-enriched
countries must be
cost
of
event of
a
before a mine can be dewatered, be properly shored ana
equipped with hoists, shaft houses,
compressors and other equipment.
Thus, it is argued, it is good insur¬
ance for the government to keep
such properties in productive Sta¬
tus.
However, the discovery and
development
will
of
new
bodies
in exten¬
known to
ore
most
sion
likely occur
already
As is so often the
veins
of
exist.
case
would not exceed 5 or 6% of our
rals,", '
dustry would not benefit from the
Domestic industry, whether as
producers, .fabricators or consum¬
ers will unquestionably insist that
"controls" are not required in this
country. The evidence would seem
to justify opposition to domestic
plan
am
confident that
Congress contemplates no reimposition of powers in this field.
Foreign controls, through export
licenses or through other devices,
over
the beneficiaries of Ameri¬
can
economic
aid
well be
; may
considered appropriate. Free and
unlimited use of our own funds
in the hands of such nations could
easily lead to derangement of the
price structure. It is my personal
belief that
unmindful
our
authorities
are
not
of this phase of the
problem and that the needs of the
peoples of many nations simply
,
survive
to
are
much
more
cogent
than the possibilities of their con¬
stituting
us.
One
an
economic
cannot
help
threat
to
pondering,
however, what the results will be
over a
gram
period of years if
our pro¬
really succeeds.
The only
other legislative pro¬
much
so
ernment
other do¬
case,
in¬
would the gov¬
as
itself if faced by emer¬
conditions, and in any such
event, we might sadly need pro¬
from
available.
whatever
source
production of primary
copper will greatly exceed 875,000
tons or that scrap be available in
amounts much greater than 120,domestic
Our continued
000 tons per year.
trial
his
He
the
started
as
In
fense.
While
there
have
been
technical advances in exploration
takes years and
and discovery, it
large
capital
to
improve output.
the
amount of
Labor
conditions,
water
available, and many other
factors enter into
production and
as
:
April, 1942, he went with the
Federal
of
Bank
Reserve
Phila¬
bank examiner, and
in October, 1945, was elected As¬
delphia
as
a
sistant Trust Officer of the Union
Trust Company
1947,
he
here. In January,
elected Vice-Presi¬
was
dent and Trust Officer of the bank.
Edward N. Stanley, 89 years
of
dean of bankers in New
Britain, Conn, died on June 2. In
age,
a
sketch of his
career
the Hartford
"Courant" of June 3, said in part:
"Since
Mr.
1937,
Stanley
had
been Chairman of the board of the
Savings Bank of New Britain and
until
year ago, when he was
ill, he had been active in
banking institution which he
rejoined in 1907 as Treasurer,
a
taken
the
"He began
years
his banking
career
70
ago as a runner and office
with the Savings Bank «f
Britain
left
and
there
two
later to become a book¬
keeper and later a discount clerk
years
at the New Britain National Bank
He then
made Cashier, hold¬
was
ing that post for 12 years before
repoining the Savings Bank as its
Treasurer on March 1, 1907. In
1922, he became the bank's Presi¬
dent, holding that post until 1937
when he
elevated to the board
was
as
*
*
Thomas
of
The
nounced
C.
Bank
on
the
*
Boushall, President
Virginia,
of
bid
offices in Norfolk,
for
the
erection
the building of The Bank
ginia
Charlotte
at
an¬
June 5 that Doyle and
Russell, with
won
Noah Lucas be¬
President.
increased because of possible ex¬
stock-piling needs of national de¬
in
head
now
in October, 1927. He
appointed Assistant Trust Of¬
was
came
the
messenger
a
President,
enough be
certainly through
as¬
about
ficer Tn 1936.
front will likely
and
duties
will
he
bank
Chairmanship
port
and
1.
July
the indus¬
deficit
3
the
succeeds
new
on
foreseeable
June
Addition
Harry L.
New
no
of
Journal
Mclninch
"Mr.
•
,
summary,
respective in¬
which added:
clerk
-
expert in gov¬
ernment or in industry with whom
I have talked expects a slackening
in the demand for copper for years
to come. None expects that our
In
Hills¬
June 3 advices in the
on
"Providence
gency
duction
the
Savings Bank,
of Manchester, N. H., at a
stitutions
on
highly controverted matters of
policy, there are arguments both
ways on the subsidy plan. It seems
to be the fact, so far as copper is
concerned,
that
possible
yield
annual production from
mestic sources. In any
I
of
County
meeting of the board of directors
national emergency not
safeguarded in order to forestall
a recurrence of world price spi¬
controls and
Co.,
Vice-President
sumes
enormous
years
certainty the order
of
magnitude and demand se¬
quence in 1948 for copper, copper
Trust
borough
late
The
the
of Providence,
R. I., was elected President of the
Merchants
National
Bank
and
timbered.
cease
of
Officer
Trust
and
Union
It may be
kept in a stand-by condition or
allowed to deteriorate completely.
If it be kept in a stand-by status,
the mine -must be pumped and
may
forecast
with
Ralph A. Mclninch, Vice-Presi¬
dent
and trustees of the
subsidy, the mine
a
V
*
*
prices without
report in its Domestic
Trade Digest: "It is too early to
to
1
of
"
:.v-; ■' "
1
*
both
only could not be borne by the
particular owner but, as a practi¬
cal fact, it might be a matter of
merce
1.
tion under the premium price pro¬
gram cannot compete at present
dewatering various mines in the
actuated the Department of Com¬
"Times-Union"
Rochester
June
and
of
of Vir¬
Boush
Streets. Erection is to
as
rapidly
cupancy
as
gp forward
possible and oc¬
is expected late in 1949.
40
COMMERCIAL
THE
(2560)
&
FINANCIAL
CHRONICLE
—
Thursday, June 10/1948
next six to twelve
Investment Trends
hear about
(Continued from page 4)
the interest and attention of any
typical investor. I find that among
ten
operating companies
those
there
and
had
their
creased
rate
five that between 1939
were
1947
either slightly in¬
per-share dividend
had held it at least
or
But
there
the
ten
dividend
than it
were
in
also
which
rate
was
five
the
of
out
per-share
lower
in
1947
For the
in 1939.
was
even.
en¬
tire ten companies,
the average of
dividend changes amounted
these
to
a
decline of 6% in the per-share
dividends paid in 1947 over 1939.
Now, if you take into account
the
fact that the persons who
dividends
these
received
were
subject to the same change in the
value of money as I have men¬
tioned
previously, we find that in
real value the stockholder in those
operating companies
to 50%
was
from 40
off in 1947 than he
worse
in
1939, although the actual
number of dollars
paid out in
dividends,
the nominal dollars,
had not changed except to the ex¬
tent
of
6%.
The
purchasing
was
power
It is
changed.
was
to
in
stocks
common
Well, if
-
practice in invest¬
refer to utility
common
circles
ment
r
this
manner:
want a good steady
you
income, utilities are all right. Buy
a good utility common
stock for
a steady income.
You don't have
to worry about income; they will
keep on paying a dividend. That is
fully true.
I don't question it in
the least.
But there has not been
been any
stability in the purchas¬
of the dividend, and
ing
power
hence the real value
dend
has
lacked
of the divi¬
this
element
of
steadiness which is supposed to be
fundamental to the utility com¬
mon stock.
r. /
That
be all right for the
past but it is not all right for the
future.
It is not all right when
a utility undertakes to raise new
equity money and goes out to the
may
stockholder
the
or
in¬
prudent
vestor today and
tries to make an
■appeal to that investor to put new
capital into a stock offering, be¬
cause that prudent investor has a
right to ask some very penetrat¬
ing questions.
He has a right to
know
whether
■«
the
in
company
question is interested in trying to
give him a dividend over a period
of years that will have stability,
not
only in the nominal sense
but in the
chasing
The
,
sense
of the real pur¬
power.
time
has
believe,
by the equity route.
There
are
which
severaal concepts and
stand in the way of
accepting this point of view, and
one is the fact that for
years now
leaders in the utility
industry have
been
pointing with
pride,
justifiably
ord of this
to
lower
and
to the splendid
so,
rec¬
industry in being able
the
period of three or
four years.
I hear about all of
the things that are being done
bordering on a miracle of in¬
creased facilities for power of all
kinds.
But/' says the prudent in¬
gram
over
vestor
show
a
"will you , please
what extent all this
today,
to
me
expansion benefits me as a com¬
mon
stockholder in an electric
light and
power
dividend, but stable only in nomi¬
nal dollars, not in the purchasing
power of the dollar.
That is no
longer enough to attract equity
capital in adequate amounts in
the utility field.
; ■/
■
Who does get the benefit of this
As
great expansion of facilities?
far
fit,
investor
the
as
the
I
of the power.
consumer
has
stockholder
The
see,
can
gets the bene¬
consumer
had
not
an
equitable share of the benefits of
expansion period in the
utility industry, and therefore the
stockholder is ready to issue a kind
this great
unit
price^ bf
the
product
at
a
time
when
all
other prices were
going up; I say
it has been a fine
believe
I
that
that because I believe that
one
be
and
faced
be
must
from the
that has prevailed during the
different
a
answer
last few years.
Let us consider
what
//;///\///\
the
question,
the stockholder to
expect to count on? What is fair
for
ought
him
to
seek
the future
in
order to feel that
in
utility equity
attracts him if he is going to put
a
new capital for that utility?
First, he ought to see a prospect
up
not
only of a stable dvidend but
increasing dividend to com¬
pensate for the risk of the chang¬
ing value of money.
of-
an
,
Second, he ought to see earn¬
ings sufficient in a utility so that
the coverage of his dividend is a
generous coverage and gives him
confidence
in
the
that dividend.
continuity
■'///
of
\
Now, the kind of earnings
cov¬
erage that he has, has got to bear
some relation to the earnings pro¬
tection that is found in other lines
of
industry.1 For
instance,
in
manufacturing industries gener¬
ally today, the corporation is pay¬
ing out about 45% of earnings,
but in many of the leading operat¬
the pay-out is 75 to 80% of earn¬
ings,
and
in
than that tf.-ra
higher
cases
some
^ S:///-
//■•■;'//
Now, the utility which seeks to
new
capital in the equity
raise
market is in competition with all
these
other
lines
of
business,
a
of
eration at
of
time when the value
a
has
money
been
changing,
industry
brought
affairs
has
us
am
criticizing the
not
way
has
Well,
might
one
this
bad
when
the
generous than that which applies
in a typical operating utility com¬
pany.
And it is
meet
that
very difficult to
competitive situation
unless the utility is permitted to
earn more money so that the
pro¬
behind
the
procession
improvement
is
utility industry
stop
pointing with
pride to this deflationary trend
in the price of its
product.
The
can
on
no
that
service
come
when the
industry
longer afford to operate
basis, render the right
to
its
customers
and
do
justice and play fair with the in¬
vestors who put up the
capital for
the business.
"
,
In other
words, a change of at¬
titude has got to come with in
the
industry itself on this question of
the price trend of the
product of
the industry.
.
To put this in a
slightly dif¬
ferent way, I find
among investors
today a tendency to challenge the
right of the utility industry to ask
for
new
equity
the investor will
capital
say,
■
because
"This is
jppriod of wonderful expansion.
a
I
because
I
technologi¬
going to be
sufficient to solve the problem for
great
a
of
many
companies.
the
is
more
/
I say that is what the stock¬
holder is entitled to ask for, that is
what he is entitled to get, that is
what he should receive,
if an
appeal is going to be made to him
to put up large quantities of new
equity capital.-' '•'/•
-,,
■;.■■■,
;; ■!
i;•
Now/as against this I find many
people are
blaming the
small
amount of new equity financing
on
various scapegoats, of which
the principal one is taxation. It is
be
attack
an
sole
beneficiary of this great
riod
of
light and
//
.
tem,
and the
other
faults
with the tax sys¬
utilities can't
raise
equity capital because taxes
are
wrong. Well, I will happily join
with any group who want to criti¬
cize the tax system. There is a
lot of (truth hi
blapiiqg the ^short¬
has
to it.
•
been
in
trying
balance," and
violated
to
to
where
get back
,
if
Now,
the
utility
tive, I should be
that
others
would
companies
much afraid
very
outside
the
industry
criticize them and perhaps
try to force such a lead on
I noticed over last
even
operating
/-'•/://;:,/
stop it, cut prices rather than in¬
with
crease
which
the
wages, fight
line.
But one
inflation, hold
leading auto¬
mobile company broke away from
that pattern.
It created a situa¬
suppose
.
more
an
industry,
applica¬
increases, the feeling
that "'one
of
the
New
to
be faced
and
if it
the
a
economic
common
is to
protection to
stock is entitled
appeal to the prudent
we
must have in
investor,
and
mind
only
not
our
ability to sell
the stock but to keep it sold and
to
keep it sold to
dent investor.
to the
a
And
satisfied,
we
have
pru¬
come
point in this great post-war
period
,
rate increases are
in order to give the
investor
the
protection
where
I
entertained, and
believe it is fairly fair to say
that if there is going to be a third
equity
which he needs if he is to put up.
something rather
dangerous in public relations if a
round of wage increases
following
substantially the pattern now in
the
company goes to the Public Serv¬
ice Commission and explains
the
well-balanced financial position.*;;
it
necessitates the first round of rate
reluctance
tion for rate
that
there
to
make
is
why
needs
better
always be
is
a
smear
public
and
people
into
that.
I
There
can
third
industry, that the
of
round
are
campaign
relations
—
problem
timid about getting
'
The
industry
absorbed
the first round of wage increases
and the second round of wage in¬
creases
think
utility
took
and
it
very
Summer
attitude
one
on
the
right now, in
of
1948,
going
important transi¬
are
rate
question
to
of boldness and initiative and
leadership
think
we
on
are
transition
4,
we
Now,.ap
the rate question. I
in the middle of that
now.
we move, along .oyer,
in
stride
efficiencies,
growth and expansion of
automobile
absorbed
industry,
by
the
by
by
Diamond, Turk Co. Admits
*
Diamond, Turk & Co., 30 Pine
Street, New York City, members
of the New York Curb
have
the
in
of
the
those
Detroit
cannot
/
now
be
.
are
Thaler to
'
(Special
to
The
Financial
Chronicle; * •"
WILMINGTON, N. C.—Charles
J. Bekaert is with Allen C. Ewing
&
Co., Murchison Building.
-
of
estab¬
With Amos Sudler & Co,
;
(Special
to
The
Financial
DENVER. COLO.
—
Chronicle)
George S.
will
Casey is with Amos C. Sudler &
pressure
Co., First National* Banks Building.
area,
sppqd, PP apd ,.put great
r
Joins Allen C. Ewing & Co.
utility industry
assuming that they
nature
Exchange^
admitted Harry J.
partnership,
So the third round of wage in¬
creases,
capital and to keep the
industry in a sound and
new
utility
revenues
under present rates.
lished
tjie
by
necessary
.increases
wage
counterattack—propa¬ increases for the utility industry.
a
ganda attack,
it
rates.
automobile
through a very
tion from the timid and reluctant
various
it
will be will¬
one
part
weekend
„
There
found
his
The ;• telephone
the
are
do
maintain that
ing capital.
what is in effect double taxation.
are
ing to
taken quite a
if it is to be similar in scope to the
precedent now established in the
that
ciding that each
management.
I think that
surtax
from saving
dustry just becoming conscious of
the problem of balance and de¬
tion with rate structure and rais¬
equity capital. It is said that cor¬
porate earnings are- subject to
individual
be changed—not
got to
themselves don't take that initia¬
—they absorbed the first and the
second rounds, but the third one,
the
has
industry.
'
r
thing that has to hap¬
pen is a new kind of emphasis,
that is, on the positive side; the
emphasis has got to be in connec¬
power
The next
far or become very wide¬
spread up to the present time. But
that
that
in any revolutionary way, but in
the sense of leaders in this in¬
pe¬
expansion in the electric
light
and power industry and the price
level, price structure, throughout
all the rest of the economy.
And
of power should be the
consumer
economies,
rates prevent people
rate structure in the electric
the idea that the
on
that explains why this
movement
has
not 1 progressed
said
dustry the balance is being rather
seriously challenged at the present
time by the discrepancy between
a
tion that leaves us today in a very
obviously uncertain frame of mind—the pos¬
there is another reason
why this sibility of a third round of wage
movement has not taken on
a
any increases,
bigger/round than
great force just yet, and that is seemed at all necessary, now has
Now, I
the
dividend
serves
..
the present time.
the
it
industry
has York papers carried a statement—
strong lead in* the this was a quotation from one of
of an active trend toward a dif¬ development of this type of think¬ the SEC Commissioners—I assume
The basis of application in this was
correctly
reported; I
ferent style of rate adjustment?" ing.
the telephone industry for rate in¬ haven't verified it; but the CormI
think
there
are
: several
creases during the past
missioner is reported to have said!,
year has
reasons
why it hasn't happened
very largely been the necessity of "The
only reason investors did
thus far. One of these reasons is
such
rate
adjustments for pur¬ not take more common stock of
because up to this point the econ¬
utilities in 1947 is that more was
poses of capital raising.
omies that management has
' ■
Now, the introduction of this not offered."
*4
brought about in operation and new
idea, this new logic, requires
Now, it is possible that that is
the growth factor, the expansion
a
great deal of imaginative and not merely an invidious remark.
of revenues, have tended pretty
creative thinking.
I think that it It is possible that that carries a
well to absorb the higher operat¬
is on the way in the electric
light lot of implications that would be
ing costs,
higher labor costs, and
power field, and I think the well worth exploring.
I can well
higher coal costs, and so on. So
precedent that has been estab¬ imagine that more utility equities
jiar these have been absorbed, but lished, the trail that has been could be 'Sold if more were
being
we
are about at the end of that
blazed by the telephone
industry, offered, but I am not at all sure
rope.
Moreover, a great many is
it would be a good thing to sell
very important and will have a
managements have been very re¬
very considerable effect on
the more
utility equities today be¬
luctant to make any move as yet
mental processes employed in this cause I think that the investor has
because they have counted on the
industry.
got to be considered not only as a
technological improvements in the
Now, if there was doubt about source of money but as a source
new capacity that was installed to
this, if there was some legitimate of good will.
Of what avail is
keep
lowering their costs and reason for
saying, "Oh, well, don't it to put over a deal, to say yes,
keep them one jump ahead of the
we
get excited about this.
After all,
put out a hundred thousand
inflationary trends that were al¬ this
will get straightened out," I shares of common stock, we got
ways worrying them on the cost
think/ that v doubt was rudely away with it—then a year or two
side.
•:.v'-v
brushed aside last week when one or three years later find that the
Now, I pay a great respect to of the leading automobile com¬
people who bought that common
the technological improvement in
panies sort of shook the world stock are not happy with the deal
the new capacity, but I think the
with its wage deal, its wage set¬ they made?
people who have been depending tlement.
Up to that point a con¬
Now, I say that if we are going
on
that
to
save
them
from
a
siderable amount of very con¬ to try to sell more common stock
wholly different attitude toward structive work had been done in in the
utility field, we must do
rate
structure
are
going to be the electric equipment field and all within our power to make sure
gravely disappointed. I think they the steel industry to hold the line that that stock has been sur¬
are
going to find that they are on wages this year—no
increase, rounded with proper safeguards,
the natural inertia of
in which the
"Why
started?
Why hasn't it started more ob¬
viously, more aggressively? Why
can't we see signs more generally
tection- of
better
time has
say
movement
thoroughly assured than it is at
way
point has been made in the past.
But I say I think the time has
come
juncture of
a
in
any
has
great,
so
to
something has to
And I say the rate
to give way,
way,.
hasn't
been
now
where
accomplish¬
ment, and I
at
time when the expansion of the
a
cal
more
where
regulation, and I believe kind of influence that accumulates
that philosophy in op¬ at certain times—there has got to
rate
and;
is
under heaven has reached
that with
don't believe that this
dividend
number of
a
harmful
where the earnings coverage over
above
would find
a point
negative and
has the equity capital available,
purpose
in getting the
but it is a question of whether utility industry to take a realistic
be wants to put it in this partic¬ and constructive approach to the
ular type of equity. It is a ques¬ rate problem of today and to mor¬
tion of the quality of the equity row.
The second thing is that it is
that is being offered. And I be¬
lieve that the shortcomings of the necessary to make an attack upon
equity in the utility field today a school of thought that has more
or less power in this country, some
are due to the heritage of the last
10 years or more in the philosophy of the political power, some of the
problem here is not merely
question of whether the investor
give
must
con¬
the
structure
sion
is
utility field would be with us and
would be just about as acute as
it is now even if the tax question
were
pretty fully taken care of
and pretty fully solved.
j ;
of
given
alibi
tax
siderably overplayed, and I think
the
difficulty and problem
of
raising new equity capital in the
new
challenge that if he is to put up
equity capital, the question of
equitable sharing in the benefit of
future growth and future expan¬
bad taxes,
on
but in the present state of affairs
I say
got to have some pretty
definite sign that he gets a bene-r
fit.
Well, he has the benefit of
the time-honored axiom, a stable
think the
of equity capital
age
company."
He has
ing companies in the utility field,
I
come,
when this will prove to be a vital
factor in the raising of new capital
ideas
Affecting Utilities
six billion dollar pro¬
a
months, I think on the trend toward a new and
things dynamic theofy of rate adjustment
developing
which confirm this in the electric light and power in¬
new
trend in the rate structure, dustry.
and I shall mention just a few of
Well, let me make very clear
these things that I think I see in that I am not advocating this af¬
the offing.
ternoon any reckless scramble for
First, I think that management rate increases, and I certainly
itself is going to change the whole don't want to suggest at all that
public relations approach on this the electric light and power in¬
question of the trend of the price dustry should go out and add to
of electrical energy; this boasting all the inflationary pressures that
about the down-trend in the price exist—not
at
all—but
there
is
of power as against the up-trend
strong need to keep a great many
in the price.+ of everything else things in balance, and in this in¬
we
Volume 167
COMMERCIAL
THE
Number 4706
FINANCIAL CHRONICLE
&
(2561)
Indications of Current Business
The following
are
Activity
production and other figures for the latest week or month available (dates
either for the week or month ended on that date, or, in cases of quotations, are as of that date) :
statistical tabulations
shown in first column
#1
cover
Latest
AMERICAN
Indicated
steel
Month
Year
Latest
Previous
Year
Week
Ago
Ago
Month
Month
Ago
June 13
Equivalent to—
and castings produced (net tons)
Bteel ingots
1,732,200
AMERICAN ZINC INSTITUTE, INC.—Month
96.9
94.3
96.0
96.1
June 13
(percent of capacity)
operations
Previous
Week
INSTITUTE:
STEEL
AND
IRON
Slab
1,695,700
1,699,700.
1,730,400
zinc
of
smelter
•
Crude
INSTITUTE:
PETROLEUM
Stock
(bbls. of 42 gallons each) —
Crude runs to stills—daily average (bbls.)
Gasoline output (bbls.)
,
oil
May
May
May
May
May
output—daily average
.
„
Kerosine
'
Gas oil
;>
oil
Residual fuel oil
(bbls.)
5,570,000
14,956,000
BUILDING
(bbls.)
2,144,000
2,129,000
2,236,000
2,066,000
ATION
7,106,000
6,932,000
5,774,000
—U.
9,508,000
9,284,000
9,343,000
8,953,000
107,185,000
106,934,000
111,632,000
95,326,000
15,250,000
13,394,000
12,509,000
May 29
38,641,000
14,885,000
37,333,000
55,146,000
54,452,000
.
All
at
AMERICAN
OF
45,550,000
CONSTRUCTION,
■7V '"RECORD:
Total
'
U.
Public
construction
S.
Private
./•;
.
•
ENGINEERING
,•
NEWS-
879,158
891,638
A. t^A'
fo':.;,t v;
710,489
residential
698,067
722,781
689,318
Total
U.
'"A'
3
$135,055,000
3
June
(U.
S.
BUREAU
OF
Beehive
coke
"
91,229,000
99,513,000
48,691,000
48,970,000
64,626,000
72,107,000
COKE
3
43,826,000
90,390,000
3
37,338,000
70,636,000
41,353,000
39,297,000
Oven
3
6,488,000
19,754,000
23,273,000
32,810,000
Beehive
SALES
May 29
13,815,000
*13,720,000
1,198,000
1,183,000
13,870,000
1,128,000
11,996,000
May 29
May 29
r-,
RESERVE
INDEX—FEDERAL
AVERAGE=1<)0
138,100
*148,200
91,300
(net
*5,976,748
5,652,540
5,820,509
4,490,766
246,146
*324,208
437,739
(net tons)
646,281
715,527
651,671
4,736,912
'
;
tons)
(net
FAMILIES
295
296
May 29
300
■
15:
169.3
V>A, A,
products
Eggs
4,635,218
;
,
FAILURES
(COMMERCIAL
STREET,
.
INDUSTRIAL)—DUN
AND
INC.
:
&
.
BRAD-
June
—:
A/.A'
/ '
;
AGE. COMPOSITE
AA
112
91
108
June
1 Scrap steel
Electrolytic
(E.
M.
&
S.
21.200c
21.200c
21.800c
21.450c::
June
...
21.425c
21.425c
23.000c
Stocks
94.000c
94.000c
80.000c
June
17.500c
17.500c
17.500c
17.300c
17.300c
17.300C
12.000c
12.000c
12.000C
Crude
10.500C
Cake
*.
8
113.31
101.56
104.34
112.56
116.80
118.00
118.20
;.v
100.88
113.31
101.50
8
.Tune
,
S.
117.60
122.29
Shipped
120.22
115.82
116.02
112.56
111.81
116.41
106.92
106.92
105.69
109.24
June
8
108.70
108.70
107.62
111.44
114.27
114.27
113.89
118.60
Shipped
8
Group
117.20
117.00
116.22
•<>V
112.56
;
V
Stocks
(tons)
—June
8
June
8
June
Bonds.
-Z
2.39
8
;
;•
A-/,:'2.39
i
3.03
2.75
.
'< ,V-
■
2.84
2.85
2.86
8
3.03
3.03
—June
8
June
8
3.34
3.41
3.34
'
.
'
Group—
Utilities
3.24
June
.
—
Group
8
2.94
8
2.79
—.——June
£
*
*
j
■426,8
8
3.09
2.72
Stocks
2.61
Produced
ft
2.84
] 2.80 ;.y;
t
426.4
;
.
-
V
V It * 267.6
265.9
f
236.4
'
June
June
S
Textiles.—
Metals
:
—a—
——
Building materials—
Chemicals and drugs
266.6
1
materials.—<.—;
240.4
257.1
259.2
All
groups
175.2
158.4
,,h..213.7
214.2
213.5
216.4
?
165.2
165.2
M
.
229.9
134.2
t
ft
Orders
;
155.6
136.3
124.2
<
,
(tons)
Percentage
of
139.4
139.4
:
223.3
•
219.9
PAINT
OIL,
;
....
(tons)
May 29
fl
i
/
352,013
.June
————L—
4
146.9
147.2
I
102
f
;•
#i
WHOLESALE PRICES—U.
98
511,918
';tt
146.7
>
.May 29
Hides and leather
products...———.—
—..—
163.5
193.0
.May 29
.May 29
products——_
164.4
.May 29
commodities
Farm
178©
f
Building materials.
Chemicals and allied
187.6,
...
materials
Manufactured
figure.
133.8
133.7
156.6
156.6
•ft
132.6
138.5
'104.1
157.2
196,6
195.2
178.0
135.6
133.7
126.4
144.7
144.7
144.4
121.0
121.4
121.3
,
"
':
134.8
,
A
116-1
—
May 29
180.8
176.8
178.6
161.1
May 29
152.6
152.5
153.7
143.1
May 29
^
159.1
158.7
157.9
142.5
May 29
158.1
157.8
157.2
140.7
148.7
132.3
May 29
149.3
v
308
*303
291
297
*287
280
1935-39 Average=l«0)
May:
v
variation—™
adjustment
(E.
&
M. J.
,r
—
QUOTATIONS)—
month of May:
■
,
,
,
22.105c
21.534c
17.212c
17.300C
17.012c
14.800c
74.625c
72.512c
'
York
(per
;
21.200c
21.554c
;
21.200c
17.500c
domestic refinery—
export refinery——
pound)—
: v!
/
23.591c
15.000c
—
London
per ounce)
(Checks)
pound)—
'
—
45.000
44.143
$4.02738
$4.02614
$4.02500
-
Straits
York
74.625c
45.000
(pence
Exchange,
93.500C
80.000c
94.000c
94.000c
:
York,. Chinese or 99%—,——.
—
Gold
(per ounce U. S. price)—;
———
Quicksilver (per flask of 76 pounds)—,
llAntimony (per pound)
(E. & M. J.)
—
Antimony (per pound) bulk, Laredo—
Antimony (per pound), in cases, Laredo
Antimony (per pound), Chinese, Spot
Platinum, refined, per ounce
'
tCadmium (per pound)i—i——;——
XCadmium (per pound)—,
———
SCadmium (per pound)——,
—
Aluminum, 99% plus, ingot (per pound)
" 93.500c
,
*,
78.900e
$35,000
$35,000
t>35.00©
$74,160
$75,462
$84,462
36.120C
36.722c
35.940c
33.560
33.000c
33.000c
34.060C
33.500c
33.500c
Nominal
Nominal
$98,000
$92,923
$59,260
$1,750
$1,750
$1,775
$1,775
$1,775
$1,800
$1,800
$1,800
15.000c
15.000c
15.000c
20.500c
20.500c
20.500c
12.000c
10.500c
9,223
9,346
9,803
$728,968,958
ingot (per pound)—pound)—East St. Louis
—„
Magnesium,
Zinc
(per
NEW
INCORPORATIONS—DUN &
Of April-—.
BUSINESS
BRADSTREET, INC.—Month
149.2
-•
EARNINGS—CLASS
RR.
OF
Total
AMER.
RRS.)
operating
—
I
ROADS
Month
of
$776,616,109
618,759,345
$690,334,954
585,625,470
80.34
79.67
78.74
$75,356,189
$82,163,688
$72,741,743
53,104,072
27,100,000
60,724,331
59,459,540
35,200,000
35,600,000
Nominal
:
$1,750
12.000c
(ASSOC.
April:
revenues——
Total
operating expenses
Operating ratio—per cent-.———_—
"
——
24,089
(FEDERAL RE¬
129.5
196.9
36,039
29,379
142.3
.
.May 29
products—
All commodities other than farm products and foods
All commodities other than farm
•Revised
—-—-—
38,866
33,746
166.5
148.1
"
articles
products—
147.4
.
.May 29
--
.
Semi-manufactured
162.6 r
186.9
188.0
149.5
.May 29
A'/" A A.;
v
•
/
»;
143.6
.May 29
.——
products
goods..——i—
commodities..
Bpecial groups—
Raw
;
188.6
.
.May 29
;
Housefurnishings
Miscellaneous
144.6
A; ; 178.4
■'■tA-A 161.6
177.2
.May 29
materials—
—
products
——-—
and lighting
Metal and metal
x
177.5
189.2
:
.May 29
Fuel
!•
S. DEPT. OF LABOR—1926=100:
'"'■Y'
13,680
41,748
r.:——
30-.
SALES
seasonal
for
Sterling
177,998
;
397,407
,
"J
..
to Apr.
1
30
20,.000
18;515
—
1 to Apr.
•.
Tin
181,398
-*
192,731
V
100
^ 363,959
PRICE* INDEX—1926-36
AVERAGE—100
All
16,518
17,611
(per pound)—
Silver,
196.7
201,340
,
189,359
100
May 29
REPORTER
170,701
i
191,650
May 29
—
—-—■—
at.
DRUG
AND
180,297
17,758
15,455
——
:—^_
Silver and Sterling Exchange—
Silver, New York (per ounce)
—••
125.3.
138.9
224.0
—.—May 29
15,867
bales)—
(500-lb.
etc.
New
«
activity.
Unfilled orders
for
Louis
St.
134.6
143.7
143.8
143.8,
650
713
466
STORE
of
iper
New
154.7
136.1
.-
Lead
ASSOCIATION: '
(tons)...—
Production
842,995
16,683
Electrolytic,
187.2
232.2
158.6
June
combined
PAPERBOARD
received
911,741
1,019,293
30—————
Electrolytic,
150.6
163.5
..
232.9
-
158.6
?.
* *4
f
New
NATIONAL
161,285
1,100,834
—
Apr.
1 to Apr. 30
Aug.
PRICES
Copper
172.2
177.2
228.6
t
June
—
103,800
149,342
1,166,425
1,096,827
—-——
to
SYSTEM
Average
'
228.6
175.5
'
machinery
Farm
METAL
259.2
,231.4
June
June
—
646,080
•
227.6
'
June
——
'
Fertilizer
bales)
1
seasonal
Without
347.7
349.4
263.4
June
June
—June
commodities
Miscellaneous
666,024
785,822
245.4
358.5
;
Livestock
Fuels
i—.—
43,100
793,114
833,192
30—
30
Apr.
Adjusted
214.6
254.9
-
,
216.3
290.7
238.0
279.2
'
\
266.1
I
Apr.
to
30
grabbots,
Motes,
DEPARTMENT
-.'if 357.5
5
45,860
42,084
839,468
——
398.3
415.0
,
•
238.8
'7 v ''285.4
June
products
J
:
June
Fats and oils
.*
1,252,316
1,156,773
'
Aug.
—Month
June
Farm
1,630,288
1,591,169
to Apr. 30—
1
1 to Apr. 30
to Apr. 30—
1
Shipped Aug.
3.21
f
2.96
?
COMMOD¬
: Foods
4T
to Apr.. 30
1
127,171
86,060
92,080
1,725,662
1,680,523
30_——
bales—
(500-lb.
Apr.
Produced
*' 2.83
'
c
Stocks
2.64
SERVE
t
804,679,000
GROUPS—1935-39—100;
BY
INDEX
ITY
ASSOCIATION—WHOLESALE
FERTILIZER
NATIONAL
211,855,000
933,610,000
30
Aug.
1
Shipped Aug.
INDEXt^AAiAA-AA..—
MOODY'S COMMODITY
182,206,000
1,024,431,000
—————
to Apr.
1
30
Aug.
3.30
'
3.24
2.94
June
i
Group.
Aug.
Aug.
Aug.
Fiber
Hull
2.54
3.07
-
2.81
•;«
2.77
8
June
Industrials
887,523,000
'
2.74
June
Public
48,039,000
890,605,000
168,750,000
30
Aug.
(tons)
Apr.
Shipped
x.-'./. 2.21
2.44
,;-vfvW-
7';2.99
2.99
v..
•'
—.
87,096,000
1,149,107,000 1,066,578,000
30—
1 to Apr. 30
Aug.
Apr.
(tons)
Produced
.
._
58,472,000
1,156,619,000 1,089,080,000
i
to Apr.
Hulls—
Llnters—running
—
Railroad
139.2
120.84
corporate
Baa
146.2
COM¬
OF
Aug. 1 to Apr. 30
Apr.
(tons)
Produced
8
Group
Aa
i
182.5
147.8
Apr. 30—
(tons)
116.22
8
—June
z-
194.9
—
PRODUCTS—DEPT.
(tons)
8
Group
Govt.
1434
194.7
—
I
(pounds)
Produced
Stocks
U.
92.5
166.0
——
Meal—
and
Stocks
MOODY'S BOND YIELD DAILY AVERAGES:
Average
93.8
w
(pounds)
8
Baa
X Aaa
ice
—
(pounds)
June
Utilities
1184
93.9
Oil—
Stocks
-June
Public
and
(pounds) Apr. 30
(pounds) Aug. 1
Shipped
DAILY AVERAGES:
_.June
Industrials
130.3
Oil-
Refined
_
Aa
Railroad
109.©
130.7
14.800c
June
at
Bonds
corporate
1844
116.3
—_
Produced
15.000c
103.000c
June
at
BOND PRICES
Govt.
179.3
196.3
—
—
:
SEED
21.200c
8
U.
Average
227.4
166.7
Ice
electricity
fuels
\ Produced
MOODY'S
and
Miscellaneous
■
June
(East St. Louis)
191.7
174.4
MERCE—
at
(St. Louis)
Zinc
1.—.——
Housefurnishings
$31.17
$40.42
and
Other
COTTON
'A v-,A''AAf,: i
at
Export refinery at
(New York)
Lead
(New York)
at
Gas
8
$40.66
$40.66
1
electricity
Fuel,
$33.15
QUOTATIONS):
AA;'
189.5
191.4
19C.4
2.85664c
(
$40.11
..$40.53
$40.53
1
"3.24473c
*3.24473c
3.24473c
1
June
Btraits tin
f Lead
J.
^r.fAA
copper—
Domestic reiinery
f
June
(per gross ton)
METAL PRICES
»:
June
—
204.4
173.6
—
66
PRICES:
Z Finished steel (per lb.)
f: Pig iron (per gross ton)
200.4
204.4
——
a
—
176.3
206.9
-.*116.3
A:Af.
3
-
IRON
178J9
186.3
217.4
:———
sweets
and
Sugar
202.6
201.1
184.7
oils
and
Fats
153,&
224.7
—
vegetables
A.
Beverages
v
AAA •' AAA* AA AA aaaA'A'
;
—
and
188©
171.0
205.8
—
.
156.2
202.3
171.0
233.8
bakery products
J 66.9
207.9
—
—
and
250
-
5,087,264
April
foods
Dairy
5,076,025
4,845,458
5
CITIES
LARGE
IN
of
5,382,83©
FOR MODERATE
t.
\
159,373,000
—
tons)
1935-1939=100—As
SYS-
..June
■.
223,644,000
64,522,000
—
-
PRICE INDEX
Fruits
_
$535,184,000
247,018,000
288,160,000
i
(net tons)
INCOME
835,000
ELECTRIC INSTITUTE:
;L:
72,642,00©
JA.-a- t
Municipal
coke
Cereals
—
^ Electric output (in 000 kwh.)
232,015,00©
114,886,000
—-
124,500
•
EDISON
282,328,00©
385,891,000
271,005,000
Month of
—
,
coke
CONSUMERS
.
STORE
TEM—1935-3«j
$514,343,000
391,268,000
64,924,00©
CONSTRUCTION—EN¬
-
Production
All
DEPARTMENT
$777,159,000
111,004,06©
(BUREAU OF MINES)—Month of April:
June
(tons)
207,987,000
81,406,000
$121,077,000
MINES):
Bituminous coal and lignite (tons)
Pennsylvania anthracite (tons)
i
f
$384,815,000
212,728,000
141,188,000
60,423,000
221,840,000
1
Oven coke stocks at end of month
OUTPUT
$414,339,000
S.
construction
and
June
i
municipal
Federal
COAL
$627,942,000
'
of
._
construction
Federal
$113,317,000
U.
—
construction
State
V
$189,903,000
THE
OF
LABOR —Month
alterations, etc.
S.
Private
June
and
51,418
:
ENGINEERING
A
June
:
construction
71,691
May:
830,205
*
construction
State
AREAS
OF
non-residential
Public
ENGINEERING
71,018
VALU¬
PERMIT
GINEERING NEWS RECORD
904,848
._May"2g
May 29
of cars)
166,86*
(tons) —
period
construction
building
Additions,
RAILROADS:
Revenue freight loaded (number of cars)
Revenue freight rec'd from connections (number
CIVIL
URBAN
DEPT.
New
34,120,000
35,224,000
50,829,000
IN
S.
New
CIVIL
ASSOCIATION
70,803
42,910
:
—
March:
May 29
at
of
72,649
43,934
324,696,000
end
at
71,718
....
(tons)
CONSTRUCTION
7,054,000
29
pipe lines—
—
lbs.)
2,000
5,034,000
16,681,000
29
May 29
—
distillate fuel oil
and
5,587,000
17,248,000
orders
May 29
(bbls.)
(bbls.)
Stocks at refineries, at bulk terminals, in transit and ip
Finished and unfinished gasoline (bbls.) at
Kerosine (bbls.) at
Gas
5,715,000
17,827,000
Unfilled
May 29
output (bbls.)
distillate fuel oil output
and
Residual fuel oil output
5,024,350
5.413,450
5,439,200
5,451,650
29
29
29
73,97©
70,330
72,742
(tons of
end of period
at
(tons
grades
all
output,
lbs.)
2,000
Shipments
AMERICAN
of
May:
T&X6S
Net
Net
'
—
—
Income
railway operating
income after charges
before charges
(est.)——
543,564,82©
tBased on the producers' quotation.
fBased on the average
of the producers' and platers' quotations.
SBased on platers' quotations. ^Domestic,
five tons or more but less than carload lot,
packed in cases, f. o. b. New York.
*Revised
figure.
42
THE
(2562)
COMMERCIAL
Rearmament Program and
sary
likely that the principal effects of
ances
with
the Reserve Banks,
the rearmament program, for the
wh.ch in recent weeks have variea
near
term, will be more largely
between
about $1.1
billion and
a
result of the programs effects
$1.6 billion.
When the Treasury
on
public
psycnology
than
of
balances in the Reserve Banks
tangible effects on the production
are drawn
upon to meet govern¬
and distribution of goods. For ex¬
ment expenditures, the result will
ample, a number of people appear
have
to
been
curtailment
duction
is
in
have
used
believe that
to
automobile
pro¬
early prospect
be¬
of the rearmament program,
cause
and
led
of
rushed
to
buy
new
or
anticipation of later
sort of spending
may result in a more rapid ex¬
pansion in instalment credit than
otherwise
may
sumers' durable goods will not be
materially affected, so that there
need be no rush to buy, or if sup¬
plies of such goods actually are
reduced substantially.
stimulation
any
or
But, again,
dampening of
the demand for instalment credit
is not likely to be of such magni¬
tude as to be a very important
factor in the money market. Fur¬
thermore, the income tax reduc¬
tion
should, to
duce
extent,
some
the need for other
credit.
consumer
/
re¬
types of
■
In the field of state and munici-
pa1
borrowing, also, it seems
likely that the rearmament
un¬
pro¬
gram will have material effects in
the
near
future, the only question
being whether the program will
later be expanded to such an extent
that
possible
projects must
j
post-]
be
for
the
Federal
bility
of
importance
some
of
funds
available
on
was
the money
interest
rates—that
be the
to
that
funds,
bank
of
so
be absorbed
credit.
of
only in
facilitated
rise in
as
to
*
the
interest
if
.
were
indefnitely at current lev¬
it
is ' highly
questionable
whether it would be possible for
the Reserve System to carry out
an
effective credit
policy.
No
has yet been found to restrict
the availability of credit in a pe¬
way
riod
active
of
without
demand
making it somewhat more ex¬
pensive,
Qn the other hand, if
the Reserve System should press
greatly changed budgetary situa¬
tion outlined by Secretary Wig¬
gins, there is little prospect ,of
carrying forward the TreasuryFederal Reserve program of the
past two years, which has been
based largely on the use of sur¬
plus cash receipts of the Treasury
for
its
sible
se¬
to achieve
regardless of the
necessary
purposes,
on
security
prices and
it would become impos¬
yields,
for the Treasury to conduct
reduction.
be
may
drain
The
expected
on
the gold
first
to
of
have
relieve
the
eign countries, and therefore, will
undoubtedly mean a reduced flow
of gold to this
country. Gold in¬
flows affect the money
supply in
two ways: th£ expenditure of the
down
hold
interest
rates,
harmonized
be
to
on
a
which, unless offset by reductions
drains
or
to
its
meet
re¬
reserves, provide
multiple expansion
of bank credit and
deposits. Thus
by reducing gold inflows, the for¬
eign aid, program may be ex¬
the basis for
a
continue the process of
funds added to
a
since
count on net
facilitate
our
in
supply
foreign
far this year, the gold
So
sources.
from
inflow has been less than half the
amount
in
the
corresponding
riod last year, and for
it fell to a trickle.
a
pe¬
few weeks
Recently it has
increased, somewhat, but it is rea¬
sonable to expect that it will be
substantially less, for
indefinite
period ahead, than if the European
recovery
program
an
and other for¬
eign aid had not been approved.
The tax reduction should
.
to
tend
have
may
the opposite effect.
It
be expected to result in some
increase
in
the
amount
of
sav¬
ings available for investment, and
it
will
tend
to
relieve
pressures
the incomes of
taxpayers, and
thus lessen the need for
dissaving.
on
At
the
will
same
time, however, it
increase the purchasing
power of the
to
public and
may
tend
increase the rate of turnover
of the money
supply.
•Ck-
bank
we
longer
as
can
Treasury receipts to
the
Increases
process.
requirements have been
suggested as a mechanism for off¬
setting such additions to bank
reserves.
But, aside from the fact
that the System is now without
authority to do much along that
line, it is questionable whether
that procedure would constitute a
reserve
rearma¬
the
and
resistance
tendencies in
to
inflationary
fields.
some
Looking farther ahead, if gov¬
expenditures
ernment
greatly expanded
should
be
the levels
over
contemplated, either for na¬
tional defense or for any other
now
strong
additions
the
bank
be
reserves.
feasible
to
be
It
in
change
requirements
reserve
.
no
the
of
be
for
required to prevent an active
inflationary tendencies,
slack
such
before
was
economy as
the
The
war.
new
country presumably would then
require curtailment of other de¬
prevent
credit
the increases in
mands, and would point to
reserve re¬
such
quirements would have to affect
ures
whole classes of banks
stimulation
(if not all
shared
in
the
reserves
increases
in
additions
or
not.
reserve
essential
to
aid expenditures, and the tax
banks,
of
require¬
In
while
at
the
same
time
in
higher taxation,
savings, diversion
and labor
from
less
state
of
a
part to play
resisting inflationary
than
a
a
pressures,
supporting, rather
leading role.
V /
the
were
bear
never
machinery,
biles and coppers.
automo¬
During the
pe¬
riod from September to December
of
1946
the industrial
average
formed a sufficient base to indi¬
element.
carried to highs of 184.96 and 53.65
in February of 1947.
It will be
Of
course,
the
over
longer term, this is not true. Stock
prices ultimately reach their ap¬
proximate true value.
However,
the
distortions
due
psychology
mass
,
possible rally to the 185-195
a
level,
The
v
next
rallying
phase
noted that the industrials reached"
the logical resistance
point,
the*
temporary
bottom of the 213-185 distribution
sometimes
to
area,
are
but the rails failed to reach1
the
quite fantastic,
In order to understand the
equivalent 59, the bottom
the 68.59 distribution area. •,? -
pres¬
of"
.
•
ent market
93
and
the
rails
market
had
been
of
by
the
1946
around
23,
the
high
the rails
on
average
68.42.
This
Feb¬
was
decline with the averages
reaching lows of 184.05 and 59.86.
the
the
lagging.
This
per¬
formance..,
'
the
market
in
to ^previous
was-*-contrary
-"Since
ral¬
averages
industrials
rails
in
had
inception of the bull
early 1942, the rails
the leaders in each ad¬
been
40.43,
3.57
During
;
issues
new
were
These
issues
new
issues
immediately bid up
several points above their origi¬
nal offering price.
During this
were
same
period
the
advanced
age
industrial.aver¬
with
but
much
a
smaller rate of volume than in the
first
the
ber
to
three and
bull
of
one-half
market.
highs reached
new
keep
pace
rate and
years
Also, the
with
the
of
num¬
failed
previous
the number of advances
and declines began to show an un¬
favorable pattern. The industrials
penetrated their February high in
late April but the rails failed to
conlirm.
It
-
other
\
was
f
this
*.
accessories, chemicals," ficompanies and oils held at
their previous lows.
volume
indications
above, that prompted
textreme
caution
to advise
me
and
and
noted
to
predict,
in my talk to this group in July,
1946 that the potential distribu¬
tional area built up in early 1946
there
the
on
lows and
new
between
advances
was
better ratio
a
f-j
declines.:
and
enlarged the base
on
the industrial average to indicate
potential
a
210-215
if
both
the
industrials and rails succeeded in
-
Divergence in Julyl947.
The third instance of
divergence.^
at the July,
occurred
1947, highs.
penetrated
of 184.96 to
The industrial average
the
February
reach
failed
high
187.66.
to
rail
The
average
confirm,, however, by
attaining a high of only 51.92 against
the
February
high
of
53.65.
A subsequent decline car¬
ried the averages to lows of 174.02
for the industrials in September
cember, 1947.J
,
in
De-
divergence
January of this year at 54.17. The
industrial average failed to reach
1947 high of 187.66 by-.
July,
5.84 points at 181.82. Thus, in 17 i
months, on three widely separated
occasions, the industrials declined";
to
trial
bounded
area
an
160-165 in
the
by
roughly
Dow-Jones
indus¬
1948 brings out some interesting
points. As noted before, the tech¬
stressed this
nical action
in
the
a
major
proven
same
buying
to
be
170-160 area as
range.
such
for
It', has
the
past
the
decline
that
continue
with
the
action
of
above the February high of 207.24.
The rails, however, could do no
of
the
market
during the May,. 1947
was
more
favorable
than
of
October, 1946. This ten¬
dency continued in the third de¬
Volume
decline
1948
the market in early 1946, the in¬
dustrial average reached a high
of 213.36 in late May, 6.12 points
A
averages.
action
cline.
Market in Early 1946
To
*
*"
- -
that, the fourth instance
occurred in early
After
of
rails
for. the
46.00
and
industrial
possible decline in the
area
average.
•
v
penetrating their February, 1947,:
highs.
Ever since the Septem¬
ber, 1946 break I have consistently
170-160
a
V
reaction,
comparison- of
during,
tiiese declining periods of October,
1946, May, 1947 and February,
indicated
-
Also, during
decline
second
The decline
the
divergence,
technical
of
Other groups, such as auto¬
in the consumer goods field,
companies which had enjoyed un¬
precedented prosperity during the
war
period due to high incomes
and the inability to purchase hard
jgobds such as automobiles, refrig¬
grabbed for by an
optimistically minded public. All
sorts
of frozen foods, distilling,
merchandising, costume jewelry
.
tiles.
smaller
etc.
phase
mobile
fewer
avidly
second
aircraft manufacturing,
building, coal,- electrical equip¬
ment, household products, invest- 1
ment
trusts, > machinery,
officeequipment, paper, steel and tex-V
brought out. Most of these issues
were
this
rails,
this
erators,
below the Oc-t
a large number of
groups
reached their ultimate lows.
In-*
eluded in; this category were the
dous
were
points
decline
nance
of
di¬
by holding above the previous
October low of 160.49. The
May.
-1947 low was 161.33.
;
*
'
vancing phase. During this period,
the early part of 1946, a tremen¬
amount
of
average, however, failed to con¬
firm a renewal of the downtrend
by the sharp
the
instance
In May, 1947 the rail
average declined to a new low at
vergence.
In February
high of 207.24 and the
followed
second
decline-
tober low of 44.00. The industrial■■
upswing
occasional
only
a
the
was
intermediate
an
in
industrial
reached
was
The next
it is necessary to go
back to January, 1946. Ever since
April of 1942, when the industrial
average reached a low of around
unnecessary
those circumstances,, monetary
for
cate
20 months.\
purposes,
on
but probably
,
meas¬
a
of
controls would have
some
they would create hardships for
the
in
low
investing and specu¬
lating public is the predominating
and also re¬
expansion
j
credit and the money supply
straints
Thus,
of
reserves
as
of materials
banks), whether they individually
had
our
there is
becoming the basis
expansion.
Further¬
to
from
total bank
in
that
expanded government demands on
the
productive- capacity of the
desirable
more,
measures
view of the fact
there
banks from week to week, or even
from month to month, as would
reserves
that
be
to
approached" in the subsequent" 18
months. Among these groups were
mind of the
might
renewal of
to
not
additions to the
aid
purpose,
would
security and
44.00
which
•
ereater
and
the rearmament
program, foreign
re-
of
use
But there
doubt that the
no
satisfactory
instrument for offsetting current
effective
very
the
neces¬
the
restrain
together with for¬
tax reduction
already ' had
a ' powerful
influence on public psychology,
so
that it is not safe to adopt a
complacent attitude, on the
strength of the leveling off in the
commodity price index during the
past few months and the signs of
eign
has
absorbing
reserves
no
to
call for strong
or
ment program,
Finally, the combined effect of ments might not fully offset the
ductionJs_likel.y_to_make it
program
in other fields.
be
can
lower
result of gold inflows and other
factors,
pected to reduce the additions to
money
certain, that the
will neces¬
yet
future
near
credit
interest rates undoubt¬
But the problem now is how to
other
bank
on
not
measures
than they were two years ago.
in Federal Reserve credit
is
rearmament
market
flooded with
gone even
in evaluating the price ol
factors
con-,
and
proved
lows
lows
agricultural
and
System
the
edly would have
of
At times, it seems that earnings
and balance sheets are but minor
lead
It
money
been
psy¬
factor
to
averages
phase of the decline..phase some groups -
thL
market,
chology.
Reserve
not
have
public
important
with
outstanding has been reduced by
approximately $4 billion since the
end of 1945, and that, if that had
funds and
very
lied
sarily have ;strongly inflationary
effects, at least for some months
nor that it will necessarily involve
heavy demands for bank credit in
would
the
Subsequently, both
appar¬
proceeds results in direct addi¬
tions to bank deposits; it also re¬
sults in additions to bank reserves
into consideration
takes
59.86
160.49
for the first
the
basis that will permit the Federal
ently do not realize that the vol¬
ume": of
Federal Reserve credit
occurred, the
over
continue
these
holdings of for¬
a
ruary
,
Reserve
is
This
reached' their
valuable
That means, then, that monetary
policy and debt management must
partly
(and
recently
solely) to redeem securi¬
it
aver¬
February,
The
downtrend.
a
both
the
and
That
technical corrections.
System has been
sponsibilities for credit" control
any appreciable and early direct able, not only to offset the effect
and
the
Treasury -v to meet
its
effects, although it is conceivable of its purchases of Treasury se¬
responsibility for managing the
that it might have indirect effects curities
for
market
stabilizing
public debt.
An uncoordinated
of considerable
but also to absorb a
importance.
The purposes,
monetary policy coul^ make the
principal direct effects are likely large part of the additions to bank
management of the debt very dif¬
reserves that have resulted from
to come from the other two
major
ficult; and an uncoordinated debt
developments of recent months gold inflows and other factors.
management policy cbuld inter¬
which will affect the
budgetary Incidentally, our critics who seem fere seriously with
monetary poli¬
position—the adoption of the for¬ to believe that the main effect of
cies, having as their chief aim the
eign aid program and the income Federal Reserve operations since
promotion of economic^stability. ,.
the end of the war has been to
tax
will
program
to
October.
refunding operations success¬
fully, unless it adjusted interest
rates on new issues promptly to
the levels resulting from Federal
Reserve operations.
into the banking system. Through
As
for
the
supply of funds1 this procedure, and through sales
available in the money market, if in the market of particular securi¬
ties that were in demand, the Fed¬
see no reason to expect that the
rearmament
declined
Briefly,
this
world.
interrupted
its
Supply of Funds
eral
was
effect
least
at
sale whatever amount of
curities
184.05
of
firm
During
In other
rates
.
lows
num¬
aver¬
extremely,
change in. i
Subsequently,
penetrated
speculators
country but all
past
two and one-half years because it
future
of interest rates.
trend-.
ticularly
interest rates,
the two
proved ta be an
important signal of a
method of approach has been par¬
at least
by
penetrate the Febru¬
petween
vergence
and
study of supply and demand.
funds, risk, liquidity
maturity considered.
That
be
investors
the
over
that makes
banks'
moderate
a
in
ages
ber
basis
than
ages
not
a
the
ingness to sell of countless
ex¬
be
on
study
of
technical data
of
evaluate
that
If
nigh of 68.42 by only a small
fraction to reach 68.77.
This di¬
ary
strength of the buying and selling
pressures which
cause
the fluc¬
tuating willingness to buy or will¬
into
come
surplus
to
better
moves.
future
the
amount
accomplished, the Re¬
System must be able to sell
to
els,
ties held by the Reserve Banks, so
that the funds would not get back
the
of
1948
govern
extent,
relative
a
well
may
banks
mat the reserves can
frozen
most
poned because, of unavailability of
on
to
possession
important
aspect of the whole matter.
Obviously,
in
view of the
prove
materials.
Effects
System
words,
general
almost
;
vast
Course
situation—the size of
supply and the course
monetary
of
the
of
requires
order
uncertainty
rearmament, together with
foreign aid and the tax reduc¬
tions, may affect materially the
ability of the Federal Reserve
System to carry on an effective
monetary or credit policy.
From
viewpoint
It
circum¬
especially for short-term securi¬
ties, and the maintenance of some
that
the
these
large
a
market's
the sale of government
would
money
What I had in mind
market.
the
more appro¬
by the Federal Reserve
a
the supply
the
in
to
securities
the
to
method
10,
(Continued from first page)
will,
stances is
and
that the rearmament pro¬
might have indirect effects
gram
addi¬
them competitively attractive, as
against other alternative uses of
earlier to the possi¬
referred
priate
Thursday, June
Market Outlook
obtain
not
opinion, the
securities
Policy
I
In my
serve
Credit
or
did
reserves.
pansion
government
Monetary
on
that
tional
is
securities from its holdings.
Effects
banks
before they result in further
to absorb the re¬
selling
by
serves
That
have occurred,
later result in less de¬
mand for such credit, either if it
appears that production of con¬
but
is
it
in
cars
scarcities.
would
be to add to bank reserves, unless
Reserve System
FINANCIAL CHRONICLE
Money Market
before many months for the
Treasury to draw down its bal¬
(Continued from page 14)
&
number of
ing
the
was
new
in
in
1947.
;
the
The
lows reached dur¬
declining
much
lower
was
than
phase in 1947
than
those
greater
reached in the February, 1948 de¬
cline. The number of daily de¬
clines
in
the
1947
period
was
,
Volume 167
much
Number 4706
THE
COMMERCIAL
February, it would be about the smallest
1948.
On
the
other hand,
the percentage rise in any bull market
number of daily advances in the
lor the
past 50 years. The ob¬
face
of
a
falling
market was jective in the rail average is some¬
larger in February, 1948 than in where between 75-85. In terms of
May, 1947. These signals indicated the other averages, it would mean
that the market was losing its
about 165 to 170 in the New York
momentum on the down side and
"Herald-Tribune" and 185 to 190
than
greated
lation
was
phase- that
lowed
^
would
by
fluctuated in
New
York
"Times"
of other committee
ernment
One
mented
that
-
a compara¬
in
a
187
will
occurs
to
185.
Any
from
come
a
skill
To
ability and
"shooting from the hip,'
in
the
"Chronicle"
How¬
Act
of
1933,
and
groups and,
ual issues.
February, 1948. All during this
Standard
face
a
tremendous barrage of bearish
prognostications on the business
weekly
over
outlook. These forecasts, it turned
prices
out,
a
highly V. inaccurate.
Neverthelcss, " these dire ; predic¬
tions so dampened public specula¬
tion, in-securities that stocks sold
?'at
were
•
fantastically
low
prices
-
to
\
earnings: ratios. Seldom in modern
'financial
history did stocks sell
high, a yield basis in relation
on as
to
bonds
they did during this
relatively easy to
lind stocks to yield 6% or more.
The public* psychology was just
the
was
of the unbounded
reverse
opti¬
mism of early 1946 when all types
of new issues were unloaded on
:_-the public::"-
'
the industrial
of
six
formed
averages
weeks.
Then
March
on
a
period
a
20
the market broke out of this long
line formation with a "gap" open¬
ing. This proved to be a very im¬
portant change in trend signal. In
April, the rails penetrated their
previous highs and in May the
industrials
firm
did -likewise
a new
to
this
inject
-Dow
be
-
point I
word
a
would like to
two about the
or
theory? I do not pretend to
expert
an
this
on
theory and it is only
-many
tools that I
famous
of the
one
in my tech¬
use
nical work.
However, I do want to
draw
attention to the
popular
fallacy, that all followers of the
Dow theory entered the market
when
the industrial
penetrated
this
187.
at
sort
ficial
75
price
'
-
Poor's
price
figured
publishes
indexes
of
groups
are
stocks.
on
The
the basis of
on
percentage; of
1939 range.
show
a
knowledge
average
was
Statements
rather
of
of
Dow
prices. For
example, the long line formation
between, roughly, 165 and 170 in
the Dow-Jones industrial' average
in. February and -March of this
while the rails were holding
considerably above their previous
lows,-was an indication that the
probabilities
favored
that
the
year,
market
This
v
turning point.
confirmed by the pene¬
was
tration
near a
was
by "both averages.
Even
;
;
.,
of
the
tech?'
-
mittee
merce
about
legislation
cant. In
rail
aver
under
The
Banks
a
b
i
r
c a
t i
con¬
fact
powers
50-Year
back :
Going
years,
.
»
14th.
over
the
vance
from
average
mar¬
makes
price
confirmation
50
past
have had 13 bull
The
.
History
This present market
kets.
the
we
to
ad¬
bull
market peak was 69 % . This,
case of the present market,
mean
a
price of
industrial
over
average.
in the
would
300 in the
The
smallest
rise in the 50-year period was
9Vz% in the short-lived 1939 bull
market. That would be about 205
in
terms
the
of
present.^market.
The
largest advance was about
1923-1929 market.
300% in the
That
would
worthwhile
My
ultimate
Dow-Jones
indicated.
somewhere
average
between 250 and
is
260.
Percentagewise this would be a
comparatively small rise in rela¬
tion to past bull markets. In fact,
is
National
given
Advisory
certain
with respect to the
of
the
veto
issu¬
Bank's
se¬
quire spending
,
.
I
.
so
."
.
argued
Loss said
issuer to peg
an
cipal Congress sought in the SEC
the protection of
"Yet from -the stand¬
point of the public it's been a
most satisfactory piece of legis¬
lation,
so
when you come
to
change it we're anxious to know
basically good reasons for chang¬
ing it/' Thus he voiced the House
legislation
the public.
was
evident
Committee's
distrust
of
ficult
sell
will
it
be
for the
Bank
to
debentures
beyond the limit
of the U. S. $3,175,000,000 commit¬
ment in the Bank, because the
officers of the banks and others to
whom the debentures must be of¬
fered
"hard
are
Wolverton
boiled,"
Rep.
whether
asked
the
not
were
these
"hard boiled"
same
bankers who had dealt in the for¬
eign
which had cost in¬
heavily in the 1920s and
bonds
vestors
so
This Mr. Black admitted.
1930s.
cited
Black
Mr.
,4
theoretical
a
study
by
the
Bank's research
department to show that, had the
Bank
'20
been
existence
in
'30s
and
in
in
investors
would
"They
wouldn't have lost
have
lost
the
foreign
bonds
nothing.
in¬
as
vestors, but they would have lost
taxpayers," Rep. Bennett inter¬
"That's right," Black was
again forced to admit. And Wol¬
as
jected.
verton wanted to know about the
wisdom
of
substituting NAC for
saying: "The
certainly don't surpass in
hardness of the boiling" the bank¬
ers cited by Mr. Black, who Rep.
Wolverton
was
saying are the
same
ones
who sold the foreign
bonds
of
the
pre-depression
period.
Inescapable Fact
SEC
in this matter,
NAC
At
the bill (H. R. 6443).
this
time, when the World
get easier ac¬
the
private savings of
Bank is seeking to
Contrast Between Senate and
.
House Hearings
to
cess
Americans entrusted to insurance
Persons interested in the details
companies and savings banks so
will do well to that it may make long-term loans
in distant places, it may be worth
request
copies
of
the
printed
transcripts from the Senate Bank¬ pondering again just how the risks
ing and Currency Committee and should be divided between the
the House Interstate and Foreign individual and the Government.
of
the
hearings
It will be
Commerce Committee.
noted
at
hearing
once
: that
was very
the
Senate
perfunctory, be¬
illuminated
only
by
Mr.
faux pas in
alluding to Ohio's supposed atti¬
ing
Black's
unfortunate
While Mr. Black has testified that
the Bank will not lend
more than,
$500,000,000 a year and that it
must make only "sound" loans,
say,
the
Bank
under
pressure
to
which, in fact, cannot
otherwise floated.
That is, the
be
rin
Bank
ways," an indiscretion which
gave
Senator Bricker
(R., O.)
offense;
(Bricker
refused
Mr.
Black's request to strike the inter¬
change from the transcript.)
is
make loans
tude toward "furriners" and "fur-
feel that such securities needed
regulation.
.
"Passage
of
Since the World Bank is
cials.
Congressional
intent, the NAC would naturally
the
.7'
;
•
no
.
legislation
would also give the International
the unregulated right to
created
is
risks.
to
unusual
take
Not
only must it lend to
Governments with bad defaults
like
records
bigger
Chile.
It
face
must
dangers
international body,
this
was
most
contrast the
House
hearings
revealed close interest by the few
Committee
of their national incomes prepar¬
ing for the next war."
unusual procedure.
In
...
...
an
members
who
were
The
S.
U.
needs
water
Engineers,
estimated
Army
Washington's
planning
the
in
2000,
year
rightly makes allowance for the
deal of
fact that "there's been a war every
work by the Committee's staff.
deal in its own securities. This
20 or 25
years.". World Bank
Unfortunately for attendance, the
right to manipulate the market in
loan director Iliff, in a speech,
June 4 hearing coincided with the
its own securities is a dangerous
makes the same point and links it
Bank
ad¬
This, may re^
more
able to attend, and a good
House debate
on
the ECA appro¬
priation. Other facts are that the
Senate Committee is headed by
Chas.
Sen.
"Brett on
Senator," himself a
delegate to that 1944 Conference
and .an active supporter of the
Fund and Bank; and the: filing
Woods'
Tobey,
own
Ifabilitating ? our foreign policy.
Apparel, • Auto Tires
this Bill is
Rubber; Banks, Brewers, y.Con-r Therefore, :yunless
tainers,
Drugs, ?; Baking,
Dairy drastically modified, I shall op¬ of the above-mentioned NASD
pose it in the Committee and on
Products, Foods, Leather, Print¬
May 26 telegram of protest only
ing and Publishing, Sugar, Motion the floor of the House."
after the Tobey Committee had
Pictures, Tobacco, Utilities, Tele¬
acted.
The delay is explained by
SEC Was on the Spot
y?
cation:
.
to defaults.
Bill
Still
;
7
Must Pass
v
Hurdles
Mr. Black, in answer to a ques¬
tion, said the Bank must have not
part but all of the changes sought
in the bill.
Congressman Wol¬
verton and
members
of the committee
some
seem
in a mood to "clean
up" the bill, give the Bank part
'
phone and Telegraph.
.
The hearings were attended by
-
ing issues in these groups for the
last 18 months in the 1704160 buy¬
ing range in the industrial aver¬
age. For new purchases for those
who
missed
tunities
half,
of
it
be
oppor¬
year
that
seem
concentrated
is
and a
they
in
classifications.
two
selectivity
buying
past
would
should
first
the
the
the
Some
required
at
this
stage because some of the stocks
in
;
the groups
fication
in the first classi¬
have
reached
already
their intermediate objectives. This
is particularly true of some of the
issues
groups.
in
the
oil
and
However, there
aircraft
are many
groups that indicate considerably
higher price levels.
industrial
securities
extension of power—even if- pro¬
time around perly /used. ,1 refuse to deny the
the
fullest
present price levels while other Auierxciari ' investor
nrptectipn of our security laws for
groups move ahead. The foilawfhg
Rje' purppse
of
expediting
or
groups are in this?jthird classifi¬
is
vance
objective for the
745
such
Bonds.? Following
that have relatively un¬
favorable patterns as compared
issues in this first classification of
about
present market.
and
Mr. Black tried to show how dif¬
.
Railroad
Trade, Shoes,
g,
in
mean
terms of the
43
in putting out
curities is little more than a sub¬
for
a
quarter
century.
The Senate Committee's report money
terfuge because if Congress passes
Thus, Sir John Boyd Orr of the
was largely .-the work of Mr. Ansel
this legislation it automatically
FAO
says:
"The whole human
Luxford, of the World Bank, the
places the securities of the Inter¬
race
is rumbling on to destruc¬
writer has been informed by three
national Bank in the same pre¬
tion.
The nations
are in¬
diffirent U. S. Government offi¬
ferred category as Government
sane, they are spending one-third
The third classification consists
a.
the
and Sale
ance
of groups
of
that
Council
Equipment, Retail
Soap & Vegetable Oil, Woolen.
indication
in
deal
denies the investor the ; protection
to which he is now entitled. The
following
n
to
nook and corner of the
United States. Thus, while it pro¬
vides for a more widespread dis¬
tribution
of
such
securities,1 it
tillers, Soft Drink, Confectioners,
Building
Materials, • Chemicals,
Finance,
Meat
Products,
Gold
Mining, H o u s e h o 1 d Products,
F
Ex¬
every
groups are in this classification:
Air Transport, Auto Parts, Dis¬
Metal
and
Bank to channel its securities into
sists of groups that have formed
long potential base patterns but
have not yet given an upside
confirmation.
Securities
;and thus enable the International
•
classification
the
change Act, and in the second
place, it would permit National
Machinery, Aircraft Man¬
ufacturing; Automobile Compa¬
nies, Coal, Copper, Cotton, Elec¬
tric Equipment,
Fire Insurance,
Fertilizer, Investment Trusts,
Lead & Zinc, Marchirtery, Office
Equipment,
Paper,
Oil, ? Radio,
Rails, Rayon, Shipbuilding Ship
The >second
particularly signifi¬
place, it would
are
the first
denying to the American investor
the protection now afforded him
cultural
ping, Steel, Textiles.
.
before the NAC.
permit, banks to sell securities
Based upon foreign loans while
The following groups have
such a confirmation: Agri¬
fication. I have been recommend¬
'<
"Two things
the
JJ
of groups that have already given
a bull market confirmation simi
lar to Dow-theory confirmation
and
for two
days.
The first classification (consists
ages.
and
Foreign Com¬
-John B. Bennett
given
In¬
on
chart patterns fall into three
gen*
eral classifications.
?';? .; .4/•
,
'
?;;???.<* Specific " Conclusions
the
Com¬
terstate
firmation.
„
the Bill
stock
the
over
.
.,My;' recommended list consists
largely of stocks in the first classic
V1*'
advice
their
that it is bad for
House
in the past the sub¬
profits have resulted in
waiting for a Dow theory con¬
so,
stantial
Securities
before
theory. Ther,p is a great deal more
to the theory than just the prin¬ with the general market. In most
cipal of confirmation. True : stu¬ instances, they may have already
dents
of
the
Dow
theory had reached their lows but they need
to form base patterns before any
numerous indications to enter the
market at much lower
Bennett
price-indexes of individual groups
and have found that, roughly, ;tbe:
super¬
the
the
on
the <19354
•:?;'?% 4,.
.1; have checked
iiical implications
con¬
bull market.
*
At
&
stock
by the industrial
>
Following the February decline,
long line " formation for
for
asked Mr. Loss to give at
Exchange
1934, is prices; that the Bank wants to be
an
extremely free to buy in its own bonds and
dangerous have no question raised.
Price
proposal in pegging and price raising is un¬
my judgment. lawful and "I would as a member
I
say
th is of Congress oppose it."
after listening
This prompted Mr. Wolverton
to
testimony to say that the fundamental prin¬
as
period. It
agencies
Act of
further, into individ¬
A
Mr.
and
it is not possible to buy the
ever,
downside objectives as late
to
had
said:
higher
200-205.
about
:
demonstrated unusual
im¬
cated
had
com¬
Bennett
Congress looks to the Government
have .exemption
been
averages and so it is necessary to
break down these
averages into
market
privately
Mr.
SEC's testimony pointed out that
that is all well and good, but that
Bank to circumvent the Securities
has
early as October, 1946 and
other stocks? reached their indi¬
the
gov¬
otners
"This proposed legislation which
would, permit
the International
market
level-—say
as.
period
and
prominent gov¬
more
ernment witnesses
aver¬
members,
witnesses
the
of
least his
personal advice to Congress.
Mr.
Loss, commenting that he could
not speak for the SEC, said with
reference to the anti-manipulative
provisions of the law, "there's no
justification
for
any
issuer to
The
support-at
narrow range between 167181. Some stocks made their lows
'
(Continued from page 4)/
it
~
1
tively
as
(2563)
World Bank Seeks Congress' Aid
consolidating phase for the past
15 trading days in a
range be¬
tween, roughly, 192 and 188. I
would expect any decline to meet
during these 17 months the
averages
CHRONICLE
portant technical correction when
fol¬
be
sharply
;
the
age.
Bearish Barrage
v
All
in
17
accumu¬
an
eyentually
•higher prices:*; v
FINANCIAL
in
that the long trading range of
months .duration
&
Individual
classification
issues in
of
the second
groups
should
turn out to be advantageous pur¬
chases although some
may
not
be
time may or
required until they
battery of SEC members and
staff, ! including
Chairman
Edmond
Hanrahan, Commissioners
a
NASD's Wallace Fulton as due to
the
fact
that
the
NASD
had
no
of what it seeks,
but without quite
escaping
supervision.
SEC
The
opportunity to formulate fact that only about half a dozen
its position.
Mr. Fulton expects committee members made any
that the pending bill will be modi¬
appearance
during the hearings
McConnaughey and McEntire, So¬
fied by the House Committee as
licitor Roger Foster, Chief Coun¬
Will slow up matters. Beyond the
a result of consultations this week
sel Loss of the Trading and Ex¬
by the staffs of the Bank, SEC, committee, there is still the House
change Division and Special
NASD, etc., as suggested last Sat¬ as a whole to be "sold"; and on
Counsel on Corporation Finance
urday by Chairman Wolverton.
the Senate side opponents such as
Michael Mooney; as also by World
If legislation is to be passed this
Senator Bricker.
Bank, Treasury, Federal Reserve
lose.
staff members. The position of the year, there is no time to
It might have been wiser for the
But no early offering of World
SEC all along has been that mat¬
Bank debentures is looked for. In Administration to have made the
ters of high foreign policy are not
fact Mr. Eugene Black, who's job desired exemptions in the original
within its assigned duties and it is
at the Bank as he describes it is Bretton Woods
Agreements Act,
not equipped to determine or im¬
to sell the
debentures, will be
for in 1945 the skeptics in Con¬
plement them, but that this is abroad for about two months com¬
gress were less numerous.
something for Congress to decide. mencing June 8, since the Bank is
sending him on a trip around the
Chairman Wolverton during the
world.
The past two weeks have
With Herrick Waddell
earlier
-
the uptrend. They have
potentially
favorable
technical
patterns and appear to be behind
confirm
the
kept Mr. Black busy, visiting Con¬
gressmen
and others, in connec¬
& Reed, Inc.
(Special
tion with H. R. 6443.
to
The
GRAND
market.
Would avoid
cation until
a
the
third
classifi¬
larger base pattern
has been built up.
Ilard-Boiled
Bankers
The hearings were noC
humorous
moments.
without
Thus, when
Financial
Chronicle)
ISLAND,
is
Stanley
Gross
Waddell
& Reed,
with
NEB.—
Herrick, t-
Inc., 55 Liberty
Street, New York City.
44
(2564)
THE
COMMERCIAL
Securities
•
•
Aircraft Radio Corp.,
Boonton, N. J.
May 25 (letter of notification) 1,000 shares of common
stock (par $1).
Price (approximately), $4% per share:
Stock will be offered by
F.'Eberstadt & Co., Inc.
selling stockholder.
-
ceeds to
•
Pro¬
Alabama Textile Products
Corp., Andalusia, Ala.
(letter of notification) $150,000 first preferred
Price—$100.
Debentures in amount of $71,500
will be exchanged par for par for preferred and cash
June
2
.Stock.
realized from the balance will be used to retire current
Bosch
$78,500.
Corp.,
Springfield,
Mass.
($1 par)
common
by com¬
Glore, Forgan & Co.
and Lehman Brothers (jointly); Blyth & Co., Inc., and
Merrill Lynch, Pierce, Fenner & Beane (jointly).
The
Attorney General (successor to the Alien Property Cus¬
todian) as holder of the stock, directed the sale. •
•
American
June
1
(letter
stock (no par).
To furnish
•
Probable bidders:
Minerals, Inc.,
of notification)
Price—$100
capital for
American
Plan
Midland,
312
share.
per
of
corporation of above
new
common
stock.
No underwriter.
paper,
making
of
For
small
expenses.
name.
com¬
incidental
and
Manicuring Co.,
Oakland, Calif.
(letter of notification) 29,000 shares of common
per share.
In addition 29,000 shares
•will be. issued to Merrill Kessler for
patents.
"writer.
No under-
Bankers Fire & Marine Insurance
Co.,
June
of
each
t
30.
Barlow &
24
record
two
March
31
on
basis
of
one
new
shares held.
Rights expire 5 p.m.,
To increase capital and
surplus.
No under¬
writing.
May
\V.'."
Seelig Manufacturing Co., Ripon, Wis.
(letter
stock.
common
of
notification) 8,820
Price—$8 per share.
shares
($1 par)
Underwriters—
McMaster Hutchinson & Co. and Charles W. Brew &
Co.
Beneficial
Industrial
Loan
Corp. (6/17)
(no par) cumulative pre¬
ferred stock and an unspecified number of
shares of ($10
par) common stock with scrip certificates to cover the
conversion by July
1, 1958.
Underwriter — Eastman,
Dillon & Co., New York.
Price and dividend rate
by
•amendment.
Proceeds—General funds, v '
May 27 filed 100,000 shares
.
Berry (D. N.) Co., Denver, Colo. v;.
May 27 (letter of notification) 133,000 shares of common
stock. Underwriter—John G.
Perry & Co. For working
capital.:
:;•/
Borderminster
•
,,
Exploration
Co.
Canada
•>
June
2
filed
500,000
common
Ltd.,
Ottawa,
shares
($1 par). Under¬
writer—Mark Daniels & Co. Price—40c
per share Cana¬
dian funds.
Proceeds—For exploration of
properties.
•
British
Outlook,
Inc.,
June 7
Washington, D. C.
(letter of notification), 1,500 shares
$4.50 noncumulative preferred ($10
par), 2,250 shares of class A
(par $1) and 500 shares of class B common stock
$1), and transferable option rights to purchase
•
(par
750 shares
share in next two years.
Offering—To public in units of one share of
preferred
of class A
common
at
$10
per
and one share of common for
$100 but number of units
-offered will not exceed
1,500. No underwriter. For ex¬
penses.
•
stock will be purchased from
Ralph C. Roe, controlling
stockholder, and sold to employees of
company at exact
price paid therefore to Mr. Roe.
Central
Vermont
Public
March 30 filed $1,500,000 Series
and
an
Service
E first
undetermined
Co.,
Cincinnati
—
Television, Inc.. *
(letter of notification) 100,000 shares of pre¬
100,000 shares of common stock.
Price
unit of one share of each.
Underwriter—H. B.
18
ferred stock and
—$3
per
Burr & Co. is exclusive
selling agent. The selling agree¬
ment requires Burr to sell 40,000 units within 90
days,
an additional
30,000 units 180 days thereafter and a fur¬
ther 30,000 units within 210 days thereafter.
Proceeds—
Will
be
to
used
manufacture
(100
par).
number1 of common shares
(no
Underwriters of common—Coffin & Burr.
Bonds
placed privately. Common stock will be
offered to
common stockholders
through subscription rights and to
common and
preferred stockholders
through
Duesenberg,
Mining Co.,
Salt Lake
Offering—1,303,733 shares
Indianapolis,. Ind.
2,499 shares of participat¬
Price—$100 per unit.
No under¬
writer.
To develop the Duesenberg marine
engine, the
Duesenberg automobile and an automatic transmission
for use together with and for
licensing separately from
the.marine engine and the automobile. ■,
\
Equitable Gas Co., Pittsburgh, Pa.
May 6 filed $14,000,000 first mortgage bonds, due 1973.
Underwriters—Names to be determined by
competitive
bidding. Probable bidders: Halsey, Stuart & Co.,
Inc.;
The First Boston Corp.; Kuhn, Loeb & Co. and
Smith,
Barney & Co. (jointly); W. C. Langley & Co. and
Glore,
Forgan & Co. (jointly); Harriman Ripley & Co.;
Weld
&
Proceeds
to
be
accepting, the offer.
Underwriting—None.
exploration and
development work.
For
—
White,
Co.
Proceeds—$14,000,000
Community Loan
Finance Co.,
La Crosse,
Wisconsin
/;•.
./
June 1 (letter of notification) 2,000 shares of 5%. cumu¬
lative first preferred (par $100) and 731 shares of com¬
mon
stock (par $100).
Price, par for each class. No un¬
To reduce bank loans and loans from others.
derwriter.
Consolidated Edison Co. of N. Y., Inc. '
v:iT
March 1 filed $57,382,600 of 3% convertible
debentures,
due 1963.
Convertible into common stock at $25.
Offer¬
ing—Common stockholders of record May 20 were given
right to subscribe for debentures in ratio of $5 of deben¬
tures for each share held.
Rights expired June 8.; Un¬
derwriters—Unsubscribed ($4,322,500) debentures under-*
written by Halsey, Stuart & Co. Inc. and ^associates.
Proceeds—To redeem 273,566 shares of
outstanding $5
cumulative
preferred stock and to
expansion expenditures, etc.
for
reimburse
treasury
Consolidated Vultee Aircraft Corp.
May 5 filed 1,159,849 shares ($1 par) common stock,
Offering—Stockholders of record May 28 are given
the right under a firm
subscription to subscribe for the
stock at rate of
share.
per
share for each share held at $9
Rights expire June 14. In addition stockhold¬
one
Gas Co.
•
Feez Manufacturing Co.,
Spokane, Wash.
May 28 (letter of notification) 20,000 shares of
common
stock ($1 par).
Price—$1 per share.
No underwriter.
For company expenses.
•
stock
($25 par)
stock.
will be given the
for any shares
ers
right to make contingent subscrip-/
not subscribed for by exercise of
subscription, subject to allotment.
Atlas Corp.,
holder of 11.4% of
outstanding consolidated stock, will
exercise its subscription rights to
purchase enough stock
tions
firm
to
assure
stock
Consolidated
of
$7,000,000 from the
Underwriting—None.
Proceeds—Added
offering.
to general
return
a
funds for manufacture of commercial trans¬
'v
A.
port planes.-
Consumers Power Co.,
Jackson, Mich. (6/22)
May 18 filed 200,000 shares of cumulative (no par)
pre¬
Underwriters
—
To be
determined under
competitive bidding.
Probable bidders: Harriman Rip¬
ley & Co. and The First Boston Corp.
(jointly); Morgan,
Stanley & Co.; White, Weld & Co. and Shields & Co.
(jointly).
Proceeds—To acquire property, construct and
expand facilities.; Bids—Bids for the purchase
of^the
stock
will be received
up
to
&
11
a.m.
(EDT) June. 22 at
(N. Y.),- 20
Southern Corp.
Mines
Nevada
Co., Virginia
City,
May 14 (letter of notification) $100,000 first lien
sinking
fund
mon
convertible
•'
5%
bonds
shares reserved for
$1,000
per
.
'a
due
1953
conversion
bond with 1,000
of
common
and
of
300,000
bonds.
shares.
'
Flotill
com¬
Price—
Underwriter
I../!-•
,1
.
shares
common to
preferred.)
($1 par)
reserved
be
Underwriter—None,
com¬
/
»V
Products, Inc., Stockton, Calif.
(par $1).
Underwriter — Floyd D. Cerf Co., Chicago.
Price—preferred $10; common $6.
Proceeds
Stockholdefs will sell 260,000 preferred shares and
250,000
shares
common
and
75,000
used for
and
common
Private
Exchange
Honolulu Stock Exchange
14
WALL
and 5,000 shares of Class B stock
Exchange
*
LOS ANGELES
'
treasury stock ($1 par) offered to members of the selling
Price to public—Class A, $2.50 per share; Class
B, 1 cent per share. Underwriters
American Trustee
Share Corp. and Young & Co., Inc.,
Pittsburgh. To pay
note, for construction and working capital.
- «
—
•
General Telephone Corp., New York
(6/30) )
; •
(par $20). Under¬
common
writers
—
Paine, Webber, Jackson & Curtis, Stone &
Webster Securities Corp. and
Mitchum, Tully & Co.
Of¬
fering—Holders of common stock and 4.40% preferred
stock of record June 16 will receive
rights to subscribe
on
before June
or
one
share
new
at the rate of
for
29
to
the
each
six
new
shares at the
common
rate
of
shares held and
share for each 4Vfe preferred shares
held.
Proceeds—To make additional investments in the
common stock equities of its
subsidiaries.
•
Glass
May
28
common
Ariz.
one new
Fibers, Inc., Waterville, Ohio
of notification) 3,500 shares
(letter
stock
on
($1
par)
behalf of
Home-Ship Corp. of Tucson,
Underwriter—Kebbon, }VlcCormick & Co., Chicago,
•
Gyrodyne Co. of America, Inc., N. Y.
(letter of notification) 204,000 shares of common
stock, class A (par $1) and 24,000 shares of 5% cumula¬
tive convertible participating preferred stock
(par $4);
Price, par for each class. To be offered through direc¬
June 3
tors, officers and others. Proceeds for development,
ganization of corporation, etc.
/'■,/ v" ;•
A'
•
Hastings
(Mich.)
or¬
Manufacturing Co."-./A-j"A
June
4/(letter of notification), 750 shares common ($2
Price—$11.25 per share.
Underwriter—First of
Michigan Corp. Proceeds to selling stockholder.
par).
•
Holan
4
common
(J.
(letter
stock.
H.)
Corp., Cleveland, Ohio
r
notification) 29,723 shares ($1 par)
Price—$3.25 per share.
Underwriter—*
of
Cunninghajm & Co. For construction and
•
Household
Service,
new machinery^
Inc., Clinton, N. Y.
A
7 (letter of notification), $8,400 5%
sinking fund
10-year serial debentures, series C, due June 1, 1958,
June
DEALERS
:•
UNDERWRITERS
HONOLULU
($1 par), reserved for
group.
BROKERS
STREET, NEW YORK
shares
conversion of Class A shares in ratio of 20 shares of Class
A for one share of Class
B; and 3,000 shares of Class B
Exchange
Los Angeles Stock
preferred
general corporate purposes.
Co.
San Francisco Stock
125,000
Company's proceeds will be
Form
Wires
Telephone BArclay 7-4300
SAN FRANCISCO
company
shares.
Effective May 5. /i
Moulding, Inc., Marion, Ind.
June 7 (letter of notification) 100,000 shares of cumu¬
lative convertible participating class A stock
(par $1)
•
.
MEMBERS
the
March 6 filed 385,000 shares of 60 cent convertible
pre¬
ferred stock (par $5) and 325,000 shares of common
stock
v.'v
Dean Witter
Offices in other Principal Cities
cumulative convertible
172,000
a share for the preferred and $10 for the
Business—Investment company. "
PACIFIC COAST
New York Stock
to
and
Price—$25
mon.
June
Dayton Consolidated
Direct
Private Wires
Corp., New York City
(72,000 shares of
conversion
HAWAIIAN SECURITIES
Chicago
' /
First Guardian Securities
new
I,
Pittsburgh
common
June 4 filed 208,260 shares of
and
Boston
new
—
•
-
New York
of
proceeds, plus
stock, will be delivered
to the Philadelphia Co. in
exchange for natural gas
properties now under lease, outstanding capital stock of
Equitable, notes and other claims owed to the Phila¬
delphia Co. and to the Pittsburgh and West Virginia
563,000 shares of
common
common
cur*
ing preferred stock.
for
are
To receive
Inc.,
June 4 filed 36,000 shares of 5%
exchange for a like number of shares of Utah
Ophir Mines Co. on a share-for-share basis plus one cent
per share to be
paid Commonwealth by Utah Ophir
par).
subscrip¬
•
offered in
mortgage bonds
to be
purchase
sets,
City, Utah
May 27 filed 2,000,000 shares of non-assessable
stock
1948
June 3 (letter of notification)
preferred
Lead
office of Commonwealth
Pine Street, New York.
Corp.
television
test and production equipment for plant.
ferred stock.
-A.;,
Burns &
Roe, Inc., New York
June 3 (letter of
notification) 10,000 shares of class A
common
stock
(par $1). Price—$2.75 per share. The
/
May
stockholders
Birmingham, Ala.
April 27 (letter of notification) 25,845 shares of common
stock.
Price—$8.
Offered—Offered for subscription to
share for
Electric
May 21 filed $15,000,000 first mortgage bonds, due 1978.
To be determined by competitive bid¬
ding. Probable bidders: Halsey, Stuart & Co. Inc.; Mor¬
gan Stanley & Co.; W. C. Langley & Co.; Blyth & Co.,
Inc. and The First Boston Corp. (jointly); Union Secur¬
ities Corp.; Lehman Brothers; Merrill Lynch, Pierce,
Fenner & Beane; Glore, Forgan & Co. and White, Weld
& Co. (jointly).
Proceeds—Construction program.
Underwriters
Commonwealth
Price—$10
stockholders
|
Columbia
purchase of
loans
:
'•
&
Cunningham & Co., Pittsburgh.
obligations, working capital, etc.
rent
Fund,
Gas
—S. K.
,
Inc., New York
June 4 filed 669,975 shares of common capital stock, ($1
par)."
;
'•
:
Aristocrat
June 3
Chemical
common
No underwriter.
Discount
mercial
stock.
•
10,
ISSUE
construction program
Underwriter—Edward D. Jones & Co.
Texas
shares
Corp., Baltimore, Md.
June 4 (letter of notification) 100,000 shares of Class B
non-voting, non-convertible common stock, ($1 par) 10,000 shares of 6% preferred
cumulative, non-convertible
($10 par) stock and 25,000 shares of voting ($1 par)
•
a
Thursday, June
Registration
PREVIOUS
SINCE
Champion Shoe Machinery Co., St. Louis, Mo.
May 26 (letter of notification) 10,000 shares of common
stock and 200 shares of preferred stock. Price for com¬
mon
$3.50 per share, and for preferred $30 per share.
Cincinnati
Underwriters—Names to be determined
petitive bidding.
ADDITIONS
privileges. Proceeds—For
repair of flood damages.
and
No underwriter.
June 2 filed 535,882 shares of class B
stock.
in
CHRONICLE
.
bank loans in amount of
American
Now
INDICATES
tion
FINANCIAL
&
Volume 167
THE
Number 4706
1948
Chicago Rock Island & Pacific RR.
11:30 a.m.
__Equip. Trust
(CDT)r
June
■
June
Kansas
Kerr-McGee Oil
Ctfs.
—.
—Common
Industries, Inc.
and
Straus
Price—$15 each.
Durham, N. C,
(6/16)
expansion, etc.
ness
——Bonds
Kool-Aid
ferred stock ($25 par).
Underwriter—Names to be de-,
termined under competitive bidding.
Probable bidders
Proceeds—Com¬
include Blyth & Co., Inc. Offering—Holders of preferred '
and common stockholders of record June 15 will be given-
rights to subscribe
Montana-Dakota Utilities Co.—
ferred
Common
Kerr-McGee Oil Industries Inc.-——
;
June
Price—$6.50 per share. Underwriter—Loewi &
Co., Milwaukee. For working capital.
1948
Southern Natural Gas Co.—
June 22,
Consumers Power
Co., 11
June 25,
Underwriters —For
'.y//
June 29,
unsubscribed
shares
Blair
&
Paper Art Co., Inc., Indianapolis, Ind.
May 27 (letter of notification) 2,000 shares of 5% con¬
vertible sinking fund debentures. Price—100 and, inter¬
est,
Underwriter—City Securities Corp., Indianapolis.
To pay in full outstanding bank loan, construction cost
of an addition to present plant and the remainder for
working capital.
Co.,
Illinois
June
.
•
---Common
Telephone Corp.——
•
Pepsi-Cola Bottling Co. of Memphis, Tenn.
1 (letter of notification) 58,000 shares ($1 par)
common stock.
Price -r- $5 per share.
Underwriters—
Leftwich and Ross and Bullingtori Schas & Co., Memphis.
Proceeds—To retire notes, to purchase stock of whollyowned subsidiary (Bottling Co. of Greenwood, Miss.),
and to purchase equipment and supplies.
3
(letter of notification) 1,335 shares ($25 par)
common stock.
Price—$35 per share.
No underwriter.
For additional working capital.
;
Bonds /"
Masco Screw Products Co.,
Detroit, Mich,
June
r
(letter of notification) 141,600 shares ($1 par)
common stock.
Price—$1.75 per share. No underwriter.
June
4
To repay a loan and for working capital.
^nd 420 shares of
common stock (par $10).
Price—$150
unit of $100 of debentures and five shares of com¬
mon.
Underwriter—Mohawk Valley Investing Co., Inc.,
JJtica, N. Y. Expansion of gas distribution system.
-
;
Airlines, Inc., Kansas City, Mo.
May 19 (letter of notification) 6,000 shares of common
stock ($1 par).' Price—Market ($8.to $9). Underwriters
—Kitchen & Murphy. Chicago.
For working capital.
,
♦
Hunt
Foods, Inc., Los Angeles
Montana-Dakota Utilities Co.
,
Idaho-Montana Pulp & Paper Co., Poison, Mont.
May 17 filed 100,000 shares of 4% cumulative preferred
stock ($100 par) and 500,000 shares ($10 par) common
stock.
Underwriter — Tom G. Taylor & Co., Missoula,
Mont.
Price—$300 per unit, consisting of two shares of
preferred and 10 shares of common stock. Proceeds—To
•erect and operate a bleached sulphate pulp mill with a
200-ton per day capacity.
Iris Oil Co., Denver, Colo.
^
•
'*•
•June 4 (letter of notification) 20,000 shares ($1 par) cap¬
ital stock.
Price—$2 per share. No underwriter. For
•drilling expenses, equipment and supplies and general
operating expenses.
v
<•
Irwin-Phillips Co., Keokuk, Iowa
-June 1 (letter of notification) 10,000 shares of 5% cumu¬
lative participating preferred stock ($10 par) to be sold
on behalf of three stockholders.
Price, par. * Underwrit¬
ers—Slayton & Co., St. Louis, Mo., have been employed
ias agents to sell the issue.
Joy Manufacturing Co.
(6/21)
filed 51,500 shares of common stock (par $l7,
of which 36,200 shares are being sold by Adams Express
June
1
Co. and 15,300 shares by
American International Corp.
^Underwriters—Hallgarten & Co. and R. W. Pressprich
«$C Co.
Kansas City
/■/
//•'"/'
(Mo.)
""r.-1"-.!'1 V-';.
■'/^
Power & Light Co.
(6/14)
may 14 filed $12,000,000 first mortgage bonds due 1978
•'and 80,000 shares o£ cumulative preferred stock (par
i$100).
Underwriters — Names will be determined by
•competitive bidding. Probable bidders: Halsey, Stuart
'& Co. Inc. (bonds only); The First Boston Corp.; Kuhn,
Xoeb & Co.; Salomon Bros. & Hutzler and Union Secur¬
ities Corp. (jointly); Lehman Brothers; Glsre, Forgan &
Co. and W. C, Langley & Co, (jointly); Shields & Co.,
"White, Weld & Co. and Central Republic Co. (jointly).
Proceeds — To acquire and construct additional prop¬
erty and retire $3,860,000 of 1%% notes issued for in¬
terim financing.
Bids—Bids for the purchase of the
securities will be received at Suite 2200, 105 W. Adams
Street, Chicago, up to noon (CDT) June 14.
Kearns Gold Mines Co., Auburn, Calif.
June 1 (letter of
'
notification) 150,000 shares of common
capital non-assessable stock ($1 par).
Price — $1 per
share.
No underwriter. For mining business.
?
•
Republic Aviation Corp., Long Island, N, Y.
general funds,
•
National
capital,
Fuel
shares
of
United
Natural
Co.
Gas
common
additional shares
'v'-'.•
National Homes Corp., Lafayette, Ind.
June 1 (letter of notification) 2,500 shares of 6% cumu¬
lative preferred stock, series A of 1948.
Price—$100 per
share.
Underwriters—Kiser, Cohn & Shumaker, Inc.
and Raffensperger, Hughes & Co., Inc., Indianapolis. For
working capital.
///:,'////v/://.'; /;.'v.// i..<
•
National Securities Series, New York City
stock ($25 par), and to purchase 48,500
of Iroquois Gas Corp. , <
-///^
.
June 4 filed 21 series of securities.
Underwriter
—
Na¬
invest¬
ment manager.
Price—To be based on the value of the
net assets applicable to each series.
Price is to be de¬
termined twice daily.
Business—Investments.
tional Securities & Research Corp., New York,
•
/ New
Jersey Power & Light Co.
June 8 filed $6,000,000 first mortgage bonds, due 1978.
Underwriting—Names to be determined through com¬
petitive bidding. Probable bidders: Halsey, Stuart & Co.
Inc.; The First Boston Corp. and Kidder, Peabody & Co.
(jointly); Lehman Brothers; Harriman Ripley & Co.;
W. C. Langley & Co. and Glore, Forgan & Co. (jointly).
Proceeds—For construction and improvement of prop¬
erty..
v.""
/,
Telephone Co. (6/29)
May 28 filed $90,000,000 refunding bonds series F, desa
July 1, 1981.
Underwriters—To be sold through com¬
petitive bidding. Probable bidders: Morgan Stanley &
Co.; Halsey, Stuart & Co. Inc. Proceeds—To reimburse
the treasury for capital expenditures already made, to
retire bank loans incurred in plant expansion and to
finance future construction.
Expected June 29.
Northern States Power Co.
(of Minn.)
June 3 filed $10,000,000 first mortgage bonds, due July 1,
*1978, and 200,000 shares of cumulative preferred stock
(no par).
Underwriting—Names to be determined by
competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc. (bonds only)! Smith, Barney & Co.; Lehman
Brothers and Riter & Co. (jointly).
Proceeds—For con¬
struction and to pay off bank loans.
,
Nuera Products
:
/
,
/Reynolds Brothers, Inc., Sturgeon Bay, Wise.
May 28 (letter of notification) 10,000 shares Of 20 cent
non-cumulative preferred stock ($5 par)*
Price—$5 per
share.
No underwriting.
For working capital.
:
:•
Riley Stoker Corp., Worcester, Mass.
June 3 (letter of
notification)
mon stock.
Price—$11% per
rahan & Co*
•
Co., Denver, Colo.
May 10 filed 100,000 shares ($10 par) preferred stock,
and 20,000 shares ($1 par) common stock.
Underwrit¬
ing—None named.
Price—10 shares of preferred and
two of common will be sold for $100. -Proceeds—To
7,000 shares ($3 par) com¬
share.
Underwriter—Han-
No purpose given.
Savoy Oil Co., Inc., Tulsa, Okla.
(250 par). Under¬
writing, none.
Offering—Stockholders are to be given
rights to subscribe to 100,000 new shares at the rate of
.
June 8 filed 150,000 common shares
of
two-thirds
a
share for
each share
held.
The other
50,000 shares will be issued to officers and others upon
the exercise of warrants.
An unspecified number of
shares may or may .not be offered for sale to the public;
Price by amendment.
Proceeds—To be added to the
general funds of the company.
(6/16)
convertible sink¬
ing fund debentures, due 1963. Underwriter—Floyd D.
Cerf Co., Inc.
Price—95 (flat).
Offering—Offered to
stockholders of record May 4 on basis of one $100 deben¬
ture for each 100 shares held.
Rights expired May 28
Proceeds—For repayment of two notes and general cor¬
Segal Lock & Hardware Co., Inc.
March 24 filed $2,000,000 15-year 6%
porate purposes,
•
Schuyler-Wilson Co., San Francisco
May 26 (letter of notification) 15,000 shares of ($10 par)
preferred A stock (with warrants) and 90,000 common
shares (par $1), reserved for warrants. Price, par for
each
class.
Underwriter—Hannaford
& Talbot, San
Francisco, \yill act as selling agents. Each purchaser of
one preferred share entitled to buy six common shares
at $1 per share. For working capital and expansion.
•
'
New York
•
•
,
petitive bidding. Probable bidders: Halsey, Stuart & Co.
Inc.; The First Boston Corp.; Harriman Ripley & Co. and
Glore, Forgan & Co.; Goldman, Sachs & Co. and Leh¬
man Brothers (jointly).
Proceeds—To purchase 320,000
additional
stock, exercisable at $7.25 per share, are held by eight
individuals and the estate of another, now deceased. For
'//V,1/'■■/'•.' '■//.' '
Gas
Co., New York
;
June 4 filed $13,500,000 sinking fund debentures, due
1973.
Underwriters—Names to be determined by com¬
■June 4 filed 389,995
<
Salt Lake City, Utah, For working capital,
,
(6/15)
June 4 filed 42,000 shares ($1 par) common stock, issu¬
able upon the exercise of stock options.
Options for this
For working
■
shares of capital stock (par $100).
"Underwriter, none. Offering—To be offered pro rata for
subscription by shareholders of record June 2. Ameri¬
can Telephone and Telegraph Co. (parent) will purchase
387,295 shares. Proceeds—To pay advances from Ameri¬
can Telephone and Telegraph, its parent; any remainder
of proceeds will be used in improving telephone plant.
(letter of notification), 400 shares capital stock
($1 par). Price—$27 per share. Underwriters—Ralph S.
Young, Colorado Springs, Colo., and J. A. Hogle & Co.,
property. ^:>/;.■.///
•
Musser Marimbas, Inc., Chicago,< III.
June 7 (letter of notification), 500 shares of 4% cumula¬
tive preferred (par $100). Price, par. No underwriter.
|>% preference stock ($10 par). To be offered in ex¬
change to holders of common stock of Harbauer Co.,
{Ohio) on the basis of two shares of Hunt for one share
pf Harbauer common stock. No underwriter. To increase
istock ownership of Harbauer.
///.- /y/./'</;./
Illinois Bell Telephone Co., Chicago, III-
Realty Co., Denver, Colo.
June 3
May 18 filed 150,000 shares ($5 par) common stock. Un¬
der writers—Blyth & Co., Inc., and Merrill Lynch, Pierce,
Fenner & Beane, New York.
Price, by amendment. Pro¬
ceeds—To be used in expanding electric and gas utility
June 2 (letter of notification) 30,000 shares of Series A
«•
•
>,
;
Mid-Continent
per
'
•
Marquette Cement Manufacturing Co., Chicago,
1948
Telephone Co.———
;June 30, 1948
General
on the floor of the New, York Stock Exchange,
specific persons, firms or corporations," in sales
outside the Exchange. '
%
"to
or
v
--Preferred
•
New York
to time
Inc., and Maxwell, Marshall & Co., New York. Price—
$3 per share. Proceeds—To be applied to the purchase
price for an existing textile firm known as Lonsdale
Co., a Textron subsidiary.
-
3y'/
1948
Offering—To be offered by the own-;
er, J. Paul Getty, President of the Company; from time
May 24 of Textron, Inc., at 'rate of one new share for
one held. Rights expire 3 p.m. (EDT) June 10.
An
additional 100,000 shares are offered to officers, certain
directors and employees of the newly organized company.
a.m..(EpT)-j; —Preferred
Southern Union Gas Co.—--
derwriting—None.
each
-Bonds
——
1948
(
I. (6/11)
April 26 filed 1,132,631 shares ($1 par) common stock.
Offering—Offered to holders of common stock of record
Joy Manufacturing Co.—- --Common
share
per
shares of pre¬
Proceeds—To retire bank loans
Pacific. Western Oil Corp., Los, Angeles
May 21 filed 450,227- shares ($10 par) capital stock. Un-:
Lonsdale Co., Providence, - R.
17, 1948
June 21,
4
Laboratories, Inc., Milwaukee, Wise.
(letter of notification) 1,000 shares of common
stock.
Beneficial Industrial Loan Corp—— —Preferred
y
Lakeside
June
Common
Segal Lock & Hardware Co.——..Debentures.
before July 7 at $100
share for each six
held.
Pacific Telegraph & Telephone Co., San Fran*
May 28 filed *601,£62 shares ($100 par) common stock.
Underwriting, none. Offering—To be offered for sub-;
scription at $100 per share by stockholders on the basis
of one new share for each six shares of preferred or ~
common held. Proceeds—To reimburse company's treas¬
ury for additions, etc.
,
•
on or
one
or common
and finance further construction.
($1 par) common stock.
Underwriter—Heronymus & CO., Sheboygan, Wis, Pro¬
ceeds—To open and equip bottling plants in California
cities.
Price—$1 per share..
!
June 16, 1948
the extent of
to
,
Bottling Co., Inc. of Calif., Sheboygan,
March 22 filed 1,500,000 shares
-Equip. Trust Ctfs,
purposes.
Pacific Gas and Electric Co., San Francisco
June 4 filed 1,000,000 shares of redeemable first pre-;
Wisconsin
June 15, 1948
Underwriter—First Securities Corp.*
Proceeds—General business
•
term notes and remainder will be used to finance busi¬
—
,
Old North State Insurance Co., Greenville, N. Cm
March 15 filed 100,000 shares of capital stock ($5 par).
will use part of proceeds to retire its secured short'
Blosser.
45
build, furnish and tool a factory and apply close to $500,-*
working capital.
Brothers
&
(2565)
000 to
pany
City Power & Light Co.
Chesapeake & Ohio Ry.
Noon (EDT)-™-;
.
CHRONICLE
man
14, 1948
Noon (CDT)
FINANCIAL
May 28 filed 300,000 shares ($1 par) common stock, of
which 200,000 shares is in behalf of the company and 100,000 shares for selling stockholders.
Underwriters—Leh¬
11, 1948
Lonsdale .Co.*rr.T,«r—
&
Keller & Co., Inc.,. Boston, Mass.
May 28 (letter of notification) 9,300 shares Of cumulative participating preferred stock and $200,000 of 20-*
year 5V2% debentures, due 1968. Underwriter—General
Stock & Bond Corp.
For working capital and other
corporate purposes.
NEW ISSUE CALENDAR
June 10,
COMMERCIAL
Shackleton
Piano Co., Louisville, Ky.
(letter of notification) 10,000 shares ($10 par)
common stock.
To be offered first to stockholders and
June 2
any
per
unsubscribed shares later to the public.
Price—$10
share. No underwriting. For additional working
capital,
;
Sierra
Pacific Power Co.
March 26 filed $3,500,000 first mortgage bonds, due
Underwriters—To be determined by competitive
197*.
bid¬
ding. Probable bidders include: Halsey, Stuart & Co*
Inc.; Blyth & Co., Inc.; Stone & Webster Securities Corp.
Proceeds—^Construction costs and the payment of $650,000 to National Shawmut Bank of Boston for construc¬
tion notes.
On May 15 company asked California P. Ua 60-day extension of time in which to
securities due to a possible revision of the ;
Commission for
issue
the
amount of bonds to be issued.
Southern Natural
Gas Co.
(B/2JL)
May 19 filed $28,000,000 first mortgage pipe line sinking
fund bonds. Due 1968. Underwriting—Names to be de-*.
(Continued on page 46)
iJ
46
(Continued from page 45)
by competitive bidding. Probable bidders in¬
Blyth & Co., Inc. and Kidder, Peabody & Co.
(jointly); Halsey, Stuart & Co. Inc.; The First Boston
Corp,
Proceeds—$14,000,000 will be applied to the
payment (exclusive of accrued interest) of 1%% notes
due 1956; balance for construction purposes.
Expected
•
Virginia Iron, Coal & Coke Co., Roanoke, Va.
shares of 4% preferred stock ($25 par)
stock, to be sold by
Mrs. Esther Buchman of New York City.
Underwriter
—To be filed by amendment.
Business—Iron, coal and
coke.
7
'' .7
'7; V- "■'/•'
.
:■
25,000
•
tive
Standard Oil Co.
of
stock
mon
•
no
par
International Petroleum
value
Underwriting—None.
national,
Tube
Class B
at
Co., Chicago, III.
*
May 24 (letter of notification) 22,000 shares common
stock (par $1). Underwriter—Wm. C. Roney & Co. Price
by amendment.
common
shareholders of record June
share of
one
Corp. of America,
and
an
option to purchase 101,112 shares.
*
■
$5,340,000
May
5
(letter
assessable
of
common
half at 40 cents.
Underwriter
The under¬
United
8,888 shares
General cor¬
&
Inc., Chicago
*
ent comomn
'
each five
now
ment and
Offering—To be made to pres¬
stockholders
on
the
basis of
one
share for
held.
Proceeds—Expenditures for equipfacilities, retiring bank loans and debentures.
shares
*
June 8 reported
&
new
•
/
com-
£
com*
f
Ohio
Prob¬
Hall &
Room 501, Transportation
Richmond, Va.,
ders:
the
same
/
(Continued from
:
mistake
as
do
page
Communists of the Kremlin or the
collectivists of contemporary India, when the
promising of greater
material; benefits, of
neglecting the crucial question of the preser¬
vation of freedom.
Surely, this problem of the rights of the indi¬
vidual should at least be recognized and stated.
-ivy-,;
■■/
Likewise is the Chamber's document
appeasing in its treatment
of the labor problem^
There is no valid reason for businessmen to
soft-pedal their advocacy of an open shop, nor to be
unspecific about
how far they would go toward
subjecting unions to anti-trust legis¬
lation (such as forbidding
to
noon
&
28
California
company
the rate of
one
has applied
Gas
Texas
over
well
plans under consideration for
a
definite position
them, as are corporations foresworn, from
engaging in joint, collective, industrywide, nationwide
action).
' 7
'
Even, more important than the Omissions cited above as well as
others (such as tariffs and other basic
elements of foreign economic
policy), is the Report's pervasive vagueness, characteristic of so
many
middle-road pronouncements.
Section
7, in full, states: "There
should, be made available to the
consuming public an ever-increasing
variety of goods of the most acceptable Quality at the lowest possible
pricest*
Surely, this is no more than a pious hope for "the wel¬
fare
state," and adeptly follows both the precepts of Mr. Laski
(as restated in his new work, "The American
Democracy"), as well
as the typical slogan of one of our
industrial corporations whom he
is so fond of excoriating, "more
goods for more people at less cost."
But IIow Much Intervention?
reaUy significant vagueness, which justifies the writing
of this column, lies in the
characteristically ambiguous conclusions
the proper role of
government and the necessary degree of
planning. For here the Chamber's credo exemplifies the stultifica¬
tion characteristically
attending efforts to follow the supposedly
about
innocuous
"middle-road."
Government
should
be
caption of
is
Throughout it
the
run
such
expressions
their master.
as
servant of the
people—not
It
to further the general public interest" (the
8); "Except in time of war or 'other national emer¬
used> only
sec.
gency the government should not
and the government should do
take over"; "management, labor
everything within their power to
bring about the most productive results in
industry and in business";
and
there should be resort to
governmental intervention only in
those
cases
in which it is found
necessary for the safeguarding of
the public interest
Surely such breadth
of
statement,
as
reflected in the lack of defi¬
'
f
our
own-
7 (Continued from
page
7
10) 7
For the fiscal year ended March
31, 1948,
Hammond
Co., Chicago, showed
pleasing the moderates like Morrison and
socialist, extremists, Hugh Dalton and Aneurm
Instrument
net profit
a
of $1,381,909 after Federal income
taxes/
This
equal, after pre-'
ferred dividends requirements, to
$3.67 per common share, and com-|
pares
with
$2.30
per
common'
t ,i
course, assume that these
compromise thoughts are part
of the current "middle-of-the-roadism"
by which believers in democ¬
racy sincerely think they can avoid tyranny and dictatorship of both
the "right" and "left."
The tragedy is that although believing they
are thus
fostering social, justice and capitalism, their embracing of
share
year.
was
for ; the .preceding
77/ 7.',7*-1:/:,/7Z /,.. - .;//•■
On
fiscal'
A:/;7/
/:/7?7*7v77:v
m
this
"fantasy of the middle" can only lead to the tearing down of
what they are trying to preserve.
Actually,, as is being demonstrated
throughout the world* the indefinite and disguised interventionism?
they advocate produces a state of affairs to which they are funda¬
mentally opposed.
As we are seeing in- Britain, if a government*
/
~
Illinois Brevities
subsidies,
in
:."7r'7-;^ '7/7;777 •/■>">■ -7- -7
We, of
'
7
shares would be issued in series when necessary.
-
•
Pacific Light¬
is 2,000,000 shares of capital stock, of which
1,265,383 shares are outstanding. It is proposed' to use
1,265,383 shares of new common for exchange for exist¬
ing capital stock outstanding and to sell privately at $8
a
share 625,000 shares under an arrangement already:
made subject to shareholder approval./ The
preferred
.
the
P/ U.
authorized
Co., Inc., Indianapolis, Ind.,
as
California
Transmission Corp. *
as well as Chamber of Commerce members and
other complacent free-enterprisers. Such statements are all too often
facing two? ways*- like the British
Cabinet,' which >: is * simul¬
as
the
to
99 % of outstanding shares.
New Deal planners
Be van.
v.:
Co.
June 28 stockholders will vote upon an increase in the
authorized stock to 100,000 shares ($100 par) preferred'
and 3,000,000 shares ($5 par) common. Existing capital
the what-and-when of price
controls, allocations, and
catch the votes of the British Labor Government and
Bevin
Gas
share for every three held.
ing Corp. owns
RR.
engaged
.
Commission for authority to sell 384,000 additional com»-'
mon shares to present stockholders at $25 a
share, at
/
taneously
Building, 201 W. Broad Street,
(EST) June 22. Probable bid¬
Co. Inc.; Salomon Bros. &
.
Southern
May
asked SEC permission to sell 60,000 ad¬
($10 par) common stock at $12.50 per >
share,, the proceeds to finance, in part, a construction
program.
Prior subscription rights are due to be offered1,
to existing stockholders, entitling them to purchase one
7^ 7
5)
77777:. ;7:
o
•
company
the
up
Halsey, / Stuart
Hutzler.
nition of "national emergency*? and the absence of
'
7
fj.
^
RR; <
Bids for the purchase of $2,400,000 equipment trust cer¬
tificates will be received at office of H. S. Wood, Treas., ;
ditional shares of
can
& potomac
/v.';'/; (6/22) 7Y;l7/77/ -777-7 *77/7
•
money purposes.
on
Richmond Fredericksburg
.
„
,
•
bonds, the proceeds to be used, for
Indiana Gas & Water
June 4
cumulative
petitive bidding. Proceeds will be used to finance
pany's business.
/.v./,:, 7* v.,7U
,*
company
sale of $7,000,000 of
Reclaiming Co., Inc., New York
May 25 (letter of notification) $300,000 4%% subordinate
convertible debentures, due June 1, 1962.
Price, par. Underwriter—Ladenburg, Thalmann & Co. Offering—
Offered for subscription by stockholders at
par.
Rights
expire June 22.
Complete new plant facilities.
Gulf Mobile
asked SEC permission to sell 200,000 ;
preferred stock.
Dividend rate;7
company
of
offering price and underwriting terms will follow
(Inc.); Salomon Bros. & Hutzler; Harriman Ripley;
Co., and Lehman Brothers (jointly); Kidder, Peabody,
Co., and Dick & Merle-Smith (jointly).
•
Business—Air line.
U. S. Rubber
J-
Co/ :f
Public Service-Electric and Gas
June 8
(6/10) 77,.—
equipment trust cer¬
tificates, dated July 1, 1948, due semi-annually Jan.
1949-July 1, 1963, will be received up to 11:30 a.m.
(CDT) June" 10, at office of company, Room 1136, La.
Salle Street Station, Chicago.
Proceeds will be used
in connection with the purchase of equipment to cost
$5,733,220. Probable bidders: Halsey, Stuart & Co. Inc.;Salomon Bros. & Hutzler; Harris, Hall & Co. (Inc.); Har¬
riman Ripley & Co., and Lehman Brothers (jointly). ^7
June 7 filed filed 369,618 shares ($10 par) common stock.
Underwriter—Harriman Ripley & Co., Inc., New York.
Price—By amendment.
•
\
^
Bids for the purchase of $4,590,000
notification) 50,000 shares of non¬
stock (par 100) half at 25 cents and-
Lines,
Corp.
,
Chicago Rock Island & Pacific RR.
Corp., Denver
Underwriter—Forbes and Co., Denver.
Air
Metals
equip¬
its first
Co.
To drill mining claims.
•
\
Proceeds will be usedito meet 80%
equipment trust certificates,
of the cost of 1,000 box cars and 500 hopper cars.
able bidders: Halsey, Stuart & Co. Inc.; Harris,
&
Minerals
Permanente
•
Chicago & North Western Ry.
May 28 company requested approval from the ICC of
ment trust of 1948.
common
porate purposes.
Uintah
Corp.
Philadelphia Baltimore & Washington RR. /7r
The company has issued invitations for bids to be re¬
ceived up to noon (EDT) June 22 at. office of Geo. H.
Pabst, Jr., Viee-President, 1811 Broad Street Station.
Building, Philadelphia* for $17,570,000 in general mort¬
gage bonds, series F, maturing May 1, 1979.
Probable v
bidders: Kuhn, Loeb & Co.; Halsey,- Stuart & Co. Inc.; I
The First Boston. Corp.; Kidder, Peabody & Co. and Mer- ;
rill Lynch, Pierce, Fenner & Beane (jointly); Harriman f
Ripley & Co.
•^
«
'
1
|
(6/15)
receive bids until noon (EDT) June
15 at 3400 Terminal Tower, Cleveland, for the sale of
$3,500,000 of equipment trust certificates. The certificates
will mature from July 1, 1949 to July 1, 1958.
Probable
bidders include: Halsey, Stuart & Co. Inc.; Harris, Hall
& Co. (Inc.); Salomon Bros. & Hutzler.
y/
Philadelphia
stock (par 15c).
Price—$1.50 per share.
—Wm. O. Duntze, 60 Wall St., New York.
writer has a firm obligation to purchase
Securities
registration or some 500,000 to 700,000
shares/ Expected at early date, with Dean Witter & Co. and The First Boston Corp.; as underwriters.
Chesapeake & Ohio Ry.
per
Sterilseat
Union
•
10, in the
May 26 (letter of notification) 110,000 shares of
and
common
The company will
stock for each three shares held
new
Hutzler
June 5 reported
Detroit
share.
Rights expire 3 p.m., June 25. Fort
Industry Co., owner of 122,757 shares of Standard Tube
stocky expects to buy $250,000 of the new stock, with
the purchase price to be credited against the $250,000'
loan previously made by Fort Industry to Standard.
$3
•
Zonolite
May 14 filed 136,667 shares of Class B common stock
(par $1).
Underwriting—None.
Offering—Offered' to
ratio of
Bros.., &
(jointly); Kidder, Peabody & Co. and White, Weld & Co.;
(jointly).
Purpose—To gain control of Inter¬
Co.,
England Power Co., Boston, Mass.
Salomon
Canadian corporation.
a
Standard
New
i
Halsey, Stuart & Co. Inc.; The First Boston '
Corp.; Kidder, Peabody & Co.; Lehman Brothers; Mer¬
Lynch, Pierce, Fenner & Beane; Kuhn, Loeb & Co.;
Proceedsr—Retire $400,000 of bank loans, and for
construction purposes.
Business—Utility.
Co., Ltd., at the
'-TV■'""
RR.
rill
each.
rate of three Standard shares for 20 International shares//
Nashville
bidders:
Charleston,"
June 7 filed 8,000 shares of $5 preferred stock (no par).
Underwriters—To be filed by amendment.
Price—$100
com¬
&
due 1978, the proceeds to be used to purchase the utility
assets of Bellows Falls Hydro-Electric Corp.
Probable
West
capital stock.
s
June 4 company asked SEC authority to sell at competi- '
tive bidding $11,000,000 first mortgage bonds, series B, r
,
Virginia Water Service Co.,
Virginia
,
Louisville
•
Inc., Walla Walla, Wash.
preferred ($10 par). Price—$10 per share. No un¬
For development and expansion of the news¬
business.
.;
West
Indiana Gas has
hidders include Morgan Stanley & Co.; Halsey, Stuart &
Co. Inc.
vy,.,v '7- •..vi
paper
(New Jersey)
par)
•
•
,
held.
June 3 reported company plans- the sale, possibly before 4
the end or June, of $30,000,000 in new bonds. Probable
derwriter.
Feed & Supply Co., Inc. ■
Farmingcfale, N. J.
May 24 (letter of notification) 1,000 shares $5.50 cumula¬
tive preferred stock (par $100). Price, |>ar. Underwriter
—Fidelity Securities & Investment Co., Inc., Asbury
Park, N. J.
Working capital.
now
1948"
„
June 3 (letter of notification), 10,000 shares 6% cumula¬
Squankum
May 11 filed 1,265,255 shares ($25
Offering—To be offered holders of
Walla Wallan,
share for each 10 shares
new
and 15,000 shares ($10 par) common
Gas Co., Dallas (6/25)
shares of 5% cumulative preferred
stock ($100 par).
Underwriter—E. H.-Rollins & Sons,
Inc., New York.
Price—By amendment.
Proceeds—To
repay bank loans and finance additional construction.
Business—Utility.
filed
Thursday, June 10,
600,000 shares of outstanding common stock, of which
Public Service Co. of Indiana, Inc., its immediate
parent,
holds 267,010 shares.
The company is a subsidiary of
Middlewest Corp.
•
Southern Union
4
CHRONICLE
FINANCIAL
June 7 filed 3,750
about June 21.
June
&
Upson Co., Lockport, N. Y.
May 24 (letter of notification) 250 common shares (par
$10). Price—$16.50 per share. Underwriter—J. W. Gould
& Co., New York.
Proceeds to selling stockholder.
termined
clude:
COMMERCIAL
THE
(2566)
>
May 25, A. G. Becker &
•
Co.
*
Inc., Central Republic Oft.
(Inc.), Cruttenden & Co., Keb-
bon,
McCormick
Co.
&
-
and
Mullaney, Wells & Co* partici¬
after its first
intervention, is not prepared to undo its interference
pated in the public offering of 7
and go back. to a free economy, it alternatively
120,000 shares of Gambie-Skog- »
must unceasingly and cumulatively
keep on piling on ever more
mo,
Inc. 5% cumulative
preregulations and restrictions, finally, all the economic freedom of
7 ferred stock at par ($50 per I"
individuals disappears
,7.
7 7-7/
with
the
market
..
7/
"limited" price control as
satisfactorily in a market economy.
Take
an
share) and dividends.
example.
It cannot
work
-
Either the" government must
abstain entirely from the temptation to keep a
ceiling on prices-or
it inevitably must go on to substitute complete and all-over
planning
for the free market economy.
Either prices
are
set
on a
free market
by a free public, or else they must end in being arbitrarily deter¬
mined by some government central board of production management.
Any half-baked in-between compromising can only lead to confusion
and
social and political strife. /
7. 7
r
7
:7;;\.7;'v^7
;
'/7'7 —7/7.
The issue.
oversubscribed..
Vas
shares
are
convertible
July 31, 1958.
*
These
prior
to-
The net proceeds
/
used to reduce short-term
were
bank
loans
which
aggregated
$14,550,000 at April 30, 1948*'the
:
spring seasonal peak, i
:
>
•
,7:
;
The Russian. course of
experience with planning is relevant and
highly significant.. It was begun, by Lenin in 1920 in the form of
separate disjointed moves in separate parts ot the economy and:
intended for the improvement of particular industries or'the fulfill-*
ment of limited aims.
But it was only a, question of time when the
The
balance
Coe &.
iaries
sheet
of
Faber,
Gregg, Inc., and its subsid¬
as
of Feb.
29,
1948
shows-
Policy (NEP), marking a current assets of $3,107,311, com-'
continuous struggle between complete nationalization and apoeasepared with current' liabilities of
ment of the peasant, must, as it did, would give
way to complete
$1,295,872.
Surplus amounted to
planning on a global scale.*
7 "
$2,323,061. Total assets were $3,period
of
the
Soviet's
New
Economic
-
p.
*Cf. E. H. Carr, "The Soviet Impact
25 et seq*, Macmillan, 1947.
on
the
Western
World,"
107,311.
2,203
There
shares
df
are
outstanding
preferred
stock,*
THE
Number 4706
Volume 167
COMMERCIAL & FINANCIAL CHRONICLE
each, and 30,000 shares $2.54 per common share, com¬ which also was reported in good
pared with $1,753,536, or $3.50 per demand, though not entirely sold
value common stock.
*
*
*
oh thb first day.
common share, for the year ended
Feb. 28, 1947. There are approx¬
A. G. Becker & Co. Inc. also
Five banking groups bid for
imately 3,500 stockholders.
this issue which was sold as a
participated in the public of-
end that the
par $100
of no par
11
•
fering
.
of
32,834
cumulative
/stock,
preferred
\
Lake
Superior
Co, at
was
an
$20.75
issue
of
share.
52,800
Co.
Power
shares
at the
pre-
,
common :
price.
pany
;
to subscribe expired
"
i-.'.
;;
'
United
-
same
*
*
Bights
May 3.
on
*
Printers
&
3%%
Inc.
and
associate
ified
Publishers
tion
(Inc.), Joliet, for the year ended
Feb. 29, 1948 reported net sales of
$14,443,743, as against $14,142,443
[ in the previous fiscal year. Net
income amounted to $1,271,482, or
;
rights to the
expired
The
coupon
paid
group
gram.
the
More Stock
Equities Moving
to
on
in which bank¬
manner
able
were
ers
to
Public
Co.
place the huge
blocks of North American Avia¬
tion,
Inc.,
brought out late .last
Sponsors
share
of
block,
this
sold
the
latest proposals, projects
ac¬
of
000
count of General Motors, were
10,000,-
bonds, plus 200,000
new
announce over
the week-
Hudson Bay
and
A
/ Tryouts for the STANY team will be held at Richmond County
X Country Club, Staten Island, on June 23 (boat leaves at two o'clock).
i
one
dollar
($1.00)
s;
Stock
of
this
&
York
New
record
of
15,
-
'
request our members to assist
Honduras
us
Board
.
of
E. W.
June
30.
1948.
W.
•Will this be
1X
"if
we
you?—-Via
f V *':X' 'V' * :'X *
J
ATKINSON, Treasurer
HAROLD B. SMITH, Chairman '
.
r
•
GAS AND ELECTRIC COMPANY
The Board of Directors of Louisville Gas and
Electric Company (Delaware) at a meeting held
June 4, 1948, declared a quarterly dividend
thirty-seven and one-half cents (37%c) per
on
the Class A Common Stock of the
Company for the quarter ending May 31, 1948,
on
of
share
payable by check July 20, 1948, to stockholders
els of the close of business June 15,
of record
1948.
At the same Meeting a dividend of twenty-five
per
share was declared on
Common Stock of the Company,
(25c)
B
quarter
W. KNOUREK, Treasurer
second
New York 5, N. Y.
-
share or three per
value of the shares
of The Texas Company has been declared
this day, payable on July 1, 1948, to
stockholders of record as shown by the
books of the company at the close of busi¬
ness on June 4, 1948. The stock transfer
cent
(3%)
on par
L. H, Lindeman
Treasurer
I91$i Consecutive
Quarterly Dividend
Treasurer
The Directors have declared
share
THE
from
the
Stock, payable
the Common
on
June 30, 1948," to stockholders of record
at
the close of business on June 14,
COLUMBIA
•••
ROBERTSHAW-FULTON
CONTROLS COMPANY
Youngwood, Pa,
will be mailed.
COMMON STOCK
a c, ALLAN,
Secretary and Treasurer
PREFERRED STOCK
share
the following regular quarterly dividend:
'A; ?A'-
■
payable
on
No. 54,15^ per share
.
RADIO
:
-
Dividend
Dividend Notice
of the
issue,
or
At the meeting
COMPANY
entered
orders
for
that
^amount,;
ot Directors
Board
Western
have
X
The
Gas
cents per
i
City Southern
'
good powers .of absorp¬
The only other sizeable offer¬
tion 'although^ of course, it was
ing involved $14,000,000 of first
not* called upon this week to take
up any substantial amount of of¬ mortgage, 20-year bonds of the
ferings.
^-a a-!'' ./;■ ■■■<"'■
' ;. "Kv Kansas City Southern Railway
to
new
issue market continues
Kansas
show
;
be
for
sustained
cheer in underwriting circles.
■*.
of what
illustration
pricing and yield means at
the ' moment,
with
institutions
proving the major outlet for highgrade bonds, was seen in the cir¬
proper
30,
30-year
bonds
Bankers
paid
the
102.10999
or
company
for
a
years' experience doing order work
trading listed and unlisted secur¬
Desires
position with Stock
Exchange House. Box B 610, Com-,
mercial
&
Financial
Chronicle, 25
Park Place, New York 8.
20
and
ities.
L. L.
thinking
same
cessful group
terms.
in
pretty
The
suc¬
reoffered the issue
Familiar
with
listed
Canadian
Write,
giving full
and
un¬
details,
to
At
a
held
one
Saieway Stores, Incorporated
on
Stores, Incorporated, on
1948 declared quarterly dividends on
the
The dividend
Series A of the Com¬
payable Aug. 2,. 1948,"to stock¬
New York 6.
.
Stock Is
and
■
Company, payable
Aug, 2,1948, to stockholders of record
ot the close of business July 6, 1948.
Checks will be mailed,
RICHARD ROLLINS
June
1,1948.
Company's $5 Par Value Common
Preferred Stocks.
and 5%
Convertible 4%
Series B of the
N
T 10
Drive, Chicago
were
declared by the
Board of Directors
May 27, 1948,
as
Secretary
the
on
the Common
of 25c per
share
is payable July 1, 1948 to stock¬
at
rate
holders of record at the close of busi¬
ness
Cumulative Preferred Stock ;
Stock is
and is
at
the
on
rate
$5.00 Par Value Common
.
payable June 30,
1948, to stockholders of record a* the
close of business June 18, 1948.
Both dividends
the 5 % Preferred
are
Bankers Trust Company
of $1.25 per share
Vice President and Treasurer
June 17,1948.
MILTON L. SELBY, Secretary.
of New York.
Robert P. Resch
payable July 1,1948 to stock¬
May 28,1948.
Stock
Regular Quarterly Dividend of
Forty Cents (40c) per share.
holders of record at the close of busi¬
ness
Regular
Quarterly Dividend of One Dollar
($1.00) per share.
Checks will be mailed by the
June 17,194$.
The dividend
on
follows:
25th Consecutive
Safeway
May 28,
meeting of the Board of Directors
June 1, 1948, a dividend of
.
A
R
★
Dividends
4%
Stock Dividends
DIVIDENDS
dollar ($1) per snare was declared
the Cumulative Preferred Stock
Charles King & Co., 61 Broad¬
way,
o
20 North Wacker
BAXTER, President
At the same meeting a dividend or
ninety-three and! three-fourths cents
($.9375) per share was declared on the
Cumulative Preferred Stock 3.75%
securities.
P
General Offices
■>'..;
July 6,1948.
WANTED
OR
about June
holders of record at the close of business
HELP WANTED
listed
MINERALS & CHEMICAL
c
1948
1948.
;
pany,
a
31/s%
TDTTLE, Treasurer
New York, N. Y., June 4,
The Board of Directors of
ARBITRAGE TRADER
with the first four bidders
apparently
much the
Chicago on
PREFERRED
of the
Florida Power & Light Co.
coupon,
A. B.
15, 1948. Checks will
the First National
from
Trader Available
cumstances that attended the of¬
of
of
June 14, 1948.
Preferred and Common
fering of $11,000,000 of new first
mortgage,
of record) at the close of business
ers
made
A'forceful
price
mailed
Bank
with
equities
share, for the period April J,
Stock, payable July 1, 1948, to hold¬
declared"
quarterly dividend of twenty cents
(20c)
per
share, payable June 30,
1948, to its holders of common stock
SITUATION WANTED
the apparent renewal of
strength in the field of seasoned
Secretary & Treasurer
»
June 2, 1948
the $3.50 Cumulative First Preferred
THE ATLANTIC REFINING CO,
But, those that reached mar¬
ket encountered good reception
and the overall results, along
87 V2
a
of record June
The
will not be closed.
The transfer books
1948 to June 30,1948, was declared on
of Arkansas
Company has
at
June
15, 1948.
of the Board of Direc¬
held today, a dividend of
tors
Common Stock
at least to
the close of business
WAITER H. STEFFIER
ance
000
record
stockholders of
on
First Preferred Stock
ARKANSAS WESTERN
companies reported to have
taken down a total of $10,000,-
Con¬
Stock
both
payable July 1, 1948, to
102.4613 to yield the buyer a
return of 3%.A-A;; ^AA "-'•&>
tion with three of the big insur¬
Preferred
have been declared,
OF AMERICA
at
CAS
20$ per
Common
regular
Cumulative
vertible
CORPORATION
Secretary
Meeting the yield ideas of in¬
stitutional buyers this proved a
real "out-the-window" opera¬
the
quarterly dividend of 2911/16$ per share on the
Dale Parker
p."
of
the
and
4 3A%
August 14, 1948, to holders of
AAA
on
Stock
A
record at close of business July 20, 1948.
dividend
A
Philadelphia 32, June 4,1948
The Board of Directors has declared this day
June 3,1948
>
Its
A dividend of 75^ per
»
"
"
-
paid
and
predecessor.^
of
quarter
LANGLEY,
COMPANY
TEXAS
>
-
payable
OFFICE OF
LOUISVILLE
Common Stock
* i
T
1948,
15,
dividend of seventy-five cents ($.75) per
v
Yearbook. Committee, NSTA
V
Collin, Norton & Co.,
;
r
%}.XXp,pXXP'X'■ VXX120 Broadwayi: ,X-AA';V ;
,p
June
P. L. BONNYMAN. Treasurer.
company
GAS SYSTEM, INC.
,
on the Common Stock
stockholders of record at
May 27, 1948
of this Company;
day,
declared
an
Accumulated Surplus of the Company a
"■*
With the above in mind let's not be like the pessimist who says,
don't try, we can't fail." < Let's be the optimist who says, "if
don't try, we can't win."
?
>■. ^
to
business
June 30, 1948. Transfer books will not be closed.
the Electric Storage battery
1948. Checks
*
;
we
«-»
C.
of
books will remain open,
1948.
383
would suggest our members
discussing this type
of business with the
partnersof their firms or with directors they may
p- bp acquainted with.
We would indeed consider it a privilege to an¬
nounce in these columns the member securing the first corporate ad.
["■V:t'V
the
Company
per share
Company
The
Rosario
1948, of Sixty Cents ($.60)
a
share on the
outstanding capital stock of this Company,
payable on June 26, 1948, to stockholders of
■record at the close of business on June 16, 1948.
•
we
cents
close
the
stock'
stock transfer books will remain open.
June 9.
NO.
Directors
this
at
a
Meeting
held
interim
dividend
for
ads. We think this type of advertising would get, plenty of recognition
in-our issue and
the
183rd Consecutive Dividend
to
129 Broadway, New York 5, X. Y,
The
in securing corporate
advertising for our 1948 "Chronicle" NSTA Convention Year Book.
Many of our members are close to companies, either by financing or
trading and this year your committee is most desirous to obtain such
<
50
of
by The Texas Company
1948,
Mining Company
DIVIDEND
*AD LIBBING"
we
above
of
THE
fioK 8. 1948
.A A
"May
The
Com'
payable July
holders
H. E. DODGE, Treasurer,
Those wishing to try out should contact Gerald Kane, Luckhurst
& Co., Inc., or Theodore piumridge, J. Arthur Warner & Co., Inc.
Co.
DIVIDEND No. 97
has declared a dividend
the
for
ending May 31, 1948, pa>ao.e uy
cneck July 20, 1948, to stockholders of record
as of
the close of business June 15, 1948.
;■
-
•
ital
pany,
and Boston started
some years ago.
V
^However, it is hoped a second foursome can be arranged with
[Philadelphia which would not have anything to do with the STANY
Cup,' which. New York won last year,
pacific
ft
STOCK
been declared on the Cap'
shareholders of record at the close
of business on August 13, 1948.
Unfortunately, this year the team will consist of four members
only, getting back to the original competition with Philadelphia
NOTICES
Mountain
Raton, Now Mexico, May 25, 1948.
COMMON
the
divi¬
hast
A regular quarterly
,
to
,j
Rocky
dend of. 7 5 d per share
(Canadian) per share has been de¬
on
the Capital Stock of this
Company, pnyabto September 13, 1948,
^
sell,
stock
of the total, and
COMPANY
Mining
clared
The team will compete against Philadelphia and Boston at Philadel¬
phia on July 9.
*
f
Louis,
G.
Smelting Co., Limited
Dividend of
to
This
HON OIL
DIVIDEND NO, 35
f
St,
Class
DIVIDEND NOTICES
DIVIDEND NOTICES
SECURITY TRADERS' ASSOCIATION OF NEW YORK
plans
mid-July.
naturally carries control.
cents
NSTA Notes
able to
are
& Gas
Electric
Service
Office
around
N. J. has filed to market
States Power Co. of Minn., in its
1,000,061
for
of
a
200,000 shares of cumulative, pre¬
ferred to finance, in part, its ex¬
pansion
plans.
And,
Northern
week.
;
General's
DIVIDEND
portion of their
capital needs through preferred
stock once again.
are
nancing took real encouragement
from the
at least
raise
looking forward
broad revival of equity fi¬
a
underwriters
shares of common stock of Ameri¬
can Bosch Corp., which
Attorney
Appearing
Spurred by the apparent change
in the investment situation, cor¬
porations, particularly public util¬
ities, are inclined to attempt to
ly early placement for the loan.
stockholders
par pre¬
represents 77%
yield 3.60%,
Those who
no
■
Meanwhile
making ready to bid for 535,882
99.40 and reoffered the
at 100.35 to
bonds
laney, Wells & Co.
.
that
with demand indicating relative¬
Dempsey & Co. and Mul-
were
winning
shares of cumulative
ferred.
company
June 8. Other Chi¬
cago investment bankers partic¬
ipating
in
this
underwriting
,
Two
payer.
3%% rate.
a
completed
Marketing of this big secondary
naturally, enjoyed a propitious
"backdrop" in the shape of re¬
vival of activity in the aviation
industry under the impetus of the
while the remaining three spec¬
under¬
offering, at $12.75
share, had been
and books closed.
a
47
country's vast new defense pro¬
interest
bid
for
groups
were awarded the priv¬
ilege of underwriting an offer¬
ing by Consolidated Edison Co.
of New York, Inc. to the latter's
common
stockholders of $57,-.
382,600 of 3% convertible de¬
bentures, due June 1, 1963. The
group bid $1,000 for the under¬
writing privilege. The subscrip¬
of
stockholders, of the utility com-*
;
♦
writers,
:
This
the unsubscribed portion
*
On May 18, Halsey, Stuart &
of
$20,
District
per
❖
5%
second
par
viously offered to the
j
of
shares
convertible
(2567)
★
.
Mining and Manufacturing
Phosphate
*
Potash * Fertilizer •
Chemicals
48
COMMERCIAL
THE
(2568)
FINANCIAL CHRONICLE
&
could
If
A
Interprelitions
be
must
asserted
"isolationist."
general
consider
would
was
that
he
iso¬
It
was
would not accept
if Senator Van-
GOP nom¬
the
became
denberg
the
an
not revealed.
nomination
the
an
whom
Just
lationist
stated
nominates
party
Republican
inee.
;
•
condition
Second
that Mr.
candidate
renomination. * The general
hower's
for
is
acceptance
"Truman withdraw
as
a
against his former
will not fight
for
of
in¬
this
that
subject to the two "ifs."
r 1
for
one
of
establishing
house for
a
one-half of
But
if
even
double
a
on
a
only costs plus
overhead—hardly a paying
•
>
house.
There
the
move
is
probably not a
capable contractor in the vicinity
willing to undertake the job. Even
if
contractor
a
would
be
were
required
found,
to
he
undertake
specific items, from bulk mate¬
rials to number of farm tractors
would have to negotiate with tele¬
and
and
number
of
variety
the
job.
will not
It
for
be ready
communities.
who
of
'
has
been
veterans
buy
take
double
two
weeks.
they have to
the
•
20
plunge.
pre¬
Then;
they have to deposit 10% with
wide
pretty
who
have about
to
pare
a
single houses and
In two weeks
foreign aid.
There
buy
houses,
habilitation phase
core
tape of
for themselves*'12 veterans
ness
even
beginning to the industrial re¬
which is the
a
-
going into the real estate busi¬
will
have to sift and confer and cor¬
be
...
To arrange all the red
where ECA
can
veteran
authorities, to lift telephone and
lines and obtain permits to
get. the house moved through all
Then the whole business will be
relate before there
the
power
couple of weeks.
a
bodily,
phone companies, power compa¬
nies, county road authorities, town
and
types of
steel.
OEEC is
at
present moment in the midst of
tools, to quantity
anyway
moved
were
This word was obtained after a
belief that the scale which Europe
the government. If they are not
within the last
suggested last September for her
able
thereafter
deal,
then
conference
secret
of Democratic bigwigs industrial rehabilitation exceeded
with
the
Columbia
University any realizable physical possibili¬
President.
These
Democratic ties.
OEEC will come up for the
few
days
leaders say
has been a
Truman's western trip
flop. He will be beaten
first
time
(officials hope)
the first, concrete, coordi¬
schedule
of
just
what
with
badl.y, and his defeat will threaten nated
the Democratic party Europe wants and
for years.
FIRST:
is
Now
the
good
all
of what the
Washington, for, at
least so far as the Congressional
open forum is concerned, this is
most
intense
in
period
the
regular quadrennial political sea¬
To swipe a little of the lingo
of the bill-drafting lawyers, pol¬
son.
iticians
this
for
to include
construed
foreign
retaries,
trators,
foreign
i d
a
sec¬
adminis¬
Senators
and
be
may
purpose
Even
pol¬
iticians say in
the
since
plan talk.
for
time
beware
to
men
*
<!
«
running
covertly for President as well as
thundering herd of President,
Cabinet members, and Congres¬
sional politlcos.
nomic
tion)
Marshall
-'T
V-
granting unusual speed
the
upon
this
part
ECA
of
(Eco¬
0
then,
it
and
still
is
rials.
ECA's
Until
just fuel,
fertilizer,
plus
Here
food
pur¬
less than $300 million.
*
*
:
vid outpourings from Washing¬
ton over the weekend on foreign
aid, it is suggested that
no
one,
In reading official statements, be
without
sign.
such
What
little
a
"beware"
are
supposed
you
to believe is that Johnny Tabei%
aided and abetted by a House
majority,
snipped
Uncle
Sam's
boys streaming
while
over
something
Railroad
Congress
*
Other'
down.
any
time
same
Congress, or at least the House, in
making the "cut," has committed
itself morally to consider raising
the
appropriation if the actual
need
develops
Hence,
for the
Europe shows
if
profitably
and
use
industrial
S.
shows
more
can
it
can
machinery
materials
it
money.
and
spare
the
same,
more.
was
disposition
Certainly if the Reds break
again on a binge of taking
over countries, a
larger appropri¬
ation is a certainty next Winter.
loose
■
.
alarm
1949. At the
until
Congress in effect says it will
authorize, or rather appropriate,
■
It might be added that outside
those
who
professionally view
with
30,
expenditures
Thus
to
model,
age payments.
then
all Europe
or
June
U,
suspenders and in effect invited
Uncle Joe to send his unwashed
the
tax
for
vignettes of the
government
of
the
1
runs.
Congress has appropri¬
:
.
for
cut
a
management
in
the
unemployment
workers,
its
railroad
among
credit" with
Treasury for this
is
ing accumulated to $934 million.
Congress worked out
provided
railroad
of
the
workers
from
creased
per
that
a
a
bill.
pensions
should
$120
in¬
$50
of
Increased
buy
unemploy¬
compensation
credit
tions, between now and the time
Congress returns next January
and
boys who
foreign aid
are concerned with
not worried
are
and
here is why:
First,
it
to
is
openly
acknowl-
check
again.
Senate
the
Herbert H. Blizzard & Co.
into
That is
is
There is
the
a
a
factual
"full"
period
of
an
of
years
a
^
double house.
Weddings
has
been
or
High School Graduations
Cause
you
to neglect
Your market operations.
dough.
his
basis
to
the
If he is able to buy
or
thru—Montgomery, Scott & Co.
New York St
Philadelphia
has
maintain
actual
been
trying
control
.
Thus when the ERP
(as
a
a
lot
as¬
that
zoning
particular lot.
Y.
1-1397
house
on
all the myriad of local govern¬
fore he knows he
deal.;
ahead* r
/.
No
can
swing the
'■:
bank
Oregon Portland Cement
Riverside Cement A & R
Spokane Portland Cement
the
ment and union regulations be¬
•
Ralston Steel Car
;
He must satisfy
could
■'/>.•
lend
him
T
LERNER & CO.
"
,
Investment Securities
10 Post Office
Square, Boston 9, Mass.
Telephone Hubbard
1990
Teletype BS 99
the
Teletype—NY 1-971
Empire Steel Corp.
Firm Trading Markets
On the other
free from strings
possible.
tion
Teletype N.
Susquehanna Mills
FOREIGN SECURITIES
'
likewise
as
j'1;
HA. 2-8780
Exchange PL, N. Y. 5
some
of
to
All Issues
distinguished
as
•,
Hill, Thompson & Co., Inc.
FOREIGN SECURITIES
...
...
■,
authoriza¬
50 Broad Street
SPECIALISTS 1
;
the
*
New York 4, N. Y.
AFFILIATE: CARL MARKS & CO. Inc. CHICAGO
from
.
fARL MARKS & pp. Inc.
much
*
,
ex¬
penditures whereas the Adminis¬
123 South Broad St., Philadelphia 9, Pa.
1919
Secutity Dealers Ass'n
double house
which to put it. He must
HAnover 2-0050
tration has been trying to get the
Ciear
40
arrangements to
own
"demountable"
railroad emanagement drops an ;!
hand, it is also true that the House
money
ESTABLISHED
Members AT, Y.
,
trying to chip off
of the ERP
,
M. S. WlEN & Co.
Trading Markets:
assertion that the House all
along
Don't let June
Co./"-*'*"-
Seatex Oil
must
veteran
a
regulations
will permit the location of this
3%
indcter-
a
certain
From $200
rate
Vz of 1%. For
Lonsdale
to
single
on
in
present
minate
kick
to
higher.
up
the
situation
sure
$450 million.
million
can
minimum. The
pretty
amount
than
buy
single house, he must find
this,fund to $450
million, the tax varies between
above
$5.9 billion,
more
;
he bliys.
remains
be spent under optimum condi¬
less than
5
sale
move the
Ms of 1% until
the unemployment
the
ciphers
Tidelands Oil tvt
heater and fixtures. Looks
a
make
allowed to reduce
pensation tax to
as
■
.
for
For $500 or $600 a vet¬
However,
the rate of unemployment com¬
such time
few
a
;
Dorset Fabrics
,
In this compromise bill man-i
was
U. S. Finishing
T
like a good buy. For $800 he can
ment compensation was denied.1 v:
agement
-
offered
(are
can
with
$144; with the
lump sum death
restoration
of
single "demount¬
able" home of small living room,
two bedrooms,, kitchen and bath*
to
payments.
matter
a
offering for sale.
eran
month to $60, and a maximum
from
¬
2
veterans.
[of
of
T.
Texas Gas Transmission
h;;i
These
It
be
minimum
is
enactment
"demountable" houses which PHA
the
hav¬
purpose
$4 billion
the
deal
a
Adjacent to the national capital
is the Naval Powder Factory at
Indianhead, Md. At that installa¬
tion are 12 single and 40 double,
the
not
of
is
That is the law.
/■/,
3%
to
pays
over
one
this
to veterans and to sell them fast.
vignette
concerns
the
Publics Housing
Administration,
which sells used war housing.
Federal Government to support
ated
even
that
veteran
probably couldn't
swing short of three months. PBA
a
Sorry.
public or investors
have any stake in this issue, one
way
or
another, is beside the
point.
When both management
and labor agreed, Congress moved
with alacrity to pass it.; Its final
No.
asked
from the foreign aid blank check,
snitch
which
net gain except for
days,
;
:
management
<
Congress has appropriated $5.9
billion for foreign aid, a figure
available
are*two
Congress this year demand¬
ing increased pensions, higher old
chases cleared since April 7 total
government.
knows
Whether the
/'rv"
•
a
corporation taxes.
upon
mate¬
raw
authorized
revenue,
No. 1: Railroad labor descended
small
a
i$»,
ij;
U. S. A.,, 1948,
bulk.
amount of industrial
lettuce
a
annual tax of $100 million on its
appropriation)
was up, the Administration asked
for $6.8 billion for 18 months, or
from April of this year through
way
in
again—everybody's ordering
a
glars of water!"
and
current
begin
move
as
is told by Congress to offer them
pending,
ton's bureaucracy, it will be fall
of this year before ECA goods
the
After listening to the perfer-
leaf
and the rest of Washing¬
to
the
the
to
PBA
"It's income tax week
June of next year.
Cooperation Administra¬
swing
lose their 10%
"liquidated
dam¬
ages"
handle, the
can
all
to
they
deposits
soon
to submerge
,
a
he
by contract not to discriminate
against Negroes or Communists in
moving the house.
If. the house
and Commerce Department
indicated
house,
double
a
European Economic Cooper¬
to compile estimates of
needs for thousands of
ination.
was
he
the
actual
sent to Washington,
It
on
find
to
Then the veteran must
ation)
Commander in Chief for the nom¬
telligence may be quickly denied,
for the new prospect was not said
to be a firm commitment, but an
indication of what would happen
bid
proposition.
Organization
the
to
order
of
a
veteran he sold to
job of the
(executive
the
is
committee
Paris
committee
machine
Eisen¬
for
It
guesses.
nomination, is that the
cept the
in
veteran.
5%
little better than informed
were
chieftan would ac¬
Former Army
Most
separate lot, he could charge the
edged by most In authority that
the
estimates for
foreign aid
before the
met
lots.
located
^
condition which it is
double house,
a
two
second
specified conditions, it was asserted here by political authorities
highest level who, nevertheless, insisted upon remaining
first
he
Then the veteran is in the busi¬
ness
LUNCH —
the
The
that
themselves.
B0SIA)€ SSMCAJS
JL Cr U
WASHINGTON, D. C.—General Dwight D. Eisenhower will be¬
the Presidential candidate of the Democratic party under cer¬
anonymous.
buys
find
forced
are
come
tain
he
house
—
of
knew
veterans, in order to buy
V/iji
XjL I f/U
*
-
it
swing the deal.
must
Washington...
from the Nation'* Capital
before
money
BUSINESS BUZZ
Behind-the-Scene
I
Thursday, June 10, 1948
Markets and
Situations for Dealers
120 Broadway, New
Tel. REctor 2-2020
York 5
Tele. NY 1 -2680
;
*■
Volume
167
Number 4706
'
_
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
.
,
l
Pictorial Insert I
Bond Club of New York 24th Annual Field Day
Hal
Murphy, Financial Chronicle; Geo. J. Leness, Merrill Lynch, Fenner & Beane,
incoming President of the Bond Club; William H. Long, Jr., Doremus & Co.
Jansen
-
■■
Russell Lea,
Reynolds & Co.; Russell Welles, Central Hanover Bank & Trust Co.;
Richard Newell, Dillon, Read & Co.; David L. Skinner, Harriman Ripley & Co.
Noyes, Jr., Hemphill, Noyes & Co.; H. C. Clifford, Kidder, Peahody & Co.;
Willard I. Emerson, Hemphill, Noyes & Co.
r.'iyim
,
-'-v
■
1
William P. King,
Harris, Hall & Co., Inc., New York; Durwin D. Algyer, Goldman,
Sachs & Co.; John C. Maxwell, Tucker, Anthony & Co.; Allyn W. Maxwell, Central
■••■Tr,--.1':^v
Hanover Bank & Trust Co.
.
Walter
E.
Sachs, Goldman, Sachs & Co.; Robert E. Broome, Guaranty Trust Co
Co.; J. F. Burns, Harris, XJpham & Co.
V. Theodore Low, Bear, Stearns &
Frank E. Gernon, Carl M.
Loeb, Rhoades &
Chauncey L.
Arrowsmith, Arrowsmith, Post &
Colket & Co.,
John Arrowsmith, Cohu & Co.;
Don
;
.
Co.; John P. G. Moran, Irving Trust Co.
Waddell, Herrick, Waddell & Reed, Inc.;
Welch; J. A. de Camp, Penington,
New York
'
Edward Glassmeyer, Jr., Blyth & Co.; Paris Scott Russell,
Jr., Glore, Forgan & Co,
Edwin H. Herzog, hazard Freres & Co.; Clarence Goldsmith, White, Weld & Co.
Gurden
B.
W. Pizzini & Co.; J. W. Rutter, Rutter & Co.; B. W. Pizzini,
Co.; Col. Oliver J. Troster, Troster, Currie & Summers;
Everett T. Tomlinson, Merrill Lynch, Pierce, Fenner & Beane
Halsey, B.
W.
Pizzini
&
V1
Pictorial Insert II
THE
At
COMMERCIAL
&
FINANCIAL
H.
.
,,
/
Edward Vollmers, Morgan Stanley & Co.; Gordon
Duval, Guaranty Trust Co.; Charles L. Morse, Jr.,
Hemphill, Noyes & Co.
:
W. Grindal, Reynolds & Co.; Louis
Fetzer,
Hayden,
,'
James D. Topping, J. D. Topping & Co.
.
Marks, Smith, Barney & Co.; T. J, Bryce,
Clark, Dodge & Co.
,
Stone & Co.; R. Inslee Clark, Spencer Trask & Co.
Paul Si?P> First of Michigan Corp.; Walter Dempsey, B. J. Van Ingen & Co.;
Dlck Rand> Rand & Co.; L. Eugene Marx, Salomon Bros. & Hutzler;,
r
Edward H, Nelson, Kidder, Peabody & Co.; Arthur W.
M. B. Stitzer, Hill & Co., New York; Lester Powers, Dominick &
Dominick;
Walter Cooper, F. S. Smithers & Co.; John J. Nolan, G. H. Walker &
Co.,
New York
1
■-
H.
Thursday, June 10, 1948
Sleepy Hollow Country Club June 4th
Robert L. Harter, First Boston Corp.; E. H. Robinson, Schwabacher & Co.;
Reg Jarvis, McLeod, Young, Weir & Co., New York; Ted Hawes, Wertheim & Co.
.
CHRONICLE
John
C. Cheever Hard wick, Smith, Barney
Leverett F. Hooper, First National
& Co.;
Bank;
Francis P.'Gallagher, Kidder, Peabody & Co.
John J. Clapp, Jr., R. W. Pressprich &
Co.;
R. W. Pressprich, Jr., R. W. Pressprich &
Co.; W. Manning Barr, Barr Bros. & Co.; Ernest J. Altgelt, Jr.,
Harris Trust & Savings Bank
Straley, Hugh W. Long & Co., explaining jokes in
"Bawl Street Journal" to Terry DeDeo
Harold
W.
Davis, Laird, Bissell & Meeds;
Elmer Dieckman, Glore, Forgan & Co.
Volume
167
Number 4706
THE
COMMERCIAL
&
FINANCIAL
Pictorial Insert III
CHRONICLE
Drew Record Attendance
Arthur H. Kiendl, Guaranty Trust Co.; F. A. Krayer, Harriman Ripley
Theodore W. Hawes, Wertheim & Co.; Charles E. Robinson,
& Co.;
William
B.
Chappell, First Boston Corp.;
Halsey, Stuart & Co.;
William L. Canady, W. L. Canady & Co.
T.
Holsapple, Holsapple & Co.;
Taylor, Bankers Trust Co.;
Hubert F. Atwater, J. G. White & Co.
Louis
A.
F.
J. T.
Foster, Lee Higginson Corp.; M. G. B. Whelpley, New York;
Allen Du Bois, Wertheim & Co.
Veit, Shields & Co.; Charles Hazelwood,
E. H. Rollins & Sons, Inc.
G. H.
John
Mahoney,
Geo.
Darnall Wallace, Coffin & Burr, Incorporated; Robert T.
Hawley, Lionel D. Edie & Co.; Eugene Scarborough, Central Republic Co.;
Starring, Jr., Graham, Parsons & Co.; Paris Scott Russell, Jr.,
Glore, F org an & Co.
Mason B.
Vanderhoef & Robinson; Alfred Shriver, Morgan Stanley & Co.
Earle
Arthur
Wilson Jones,
Linen,
Chase
National Bank; James
G.
Couffer,
B. J. Van Ingen & Co., Inc.; Geo. Holzman,
Chase National Bank
Federal Reserve Bank (retired); Adolph E. Gehrung; Frederick
Clarkscn, Auchincloss, Parker
Walker, Jr., G. H. Walker & Co., New York;
Joseph A. W. Iglehart, W. E. Hutton & Co.;
James Lee, Lee Higginson Corp.
H.
& Redpath; W. Murray Lee, Hannahs, Ballin & Lee
Clarence E. Goldsmith, White, Weld & Co.;
Geo. J.
Gillies, First Boston Corp.;
Edwin H. Herzog, Lazard Freres
& Co.
THE
Pictorial Insert IV
VH
M
V V
For Full
F. A.
John
COMMERCIAL
MP"
^M|
&
FINANCIAL
m
'
V
Valentine, Harris, Hall & Co.; F. Kenneth
Goldman, Sachs & Co.; Lee M.
Stephenson,
Fred
C.
■■
Thursday, June 10, 1948
_
a
H
Day of Sport and Entertainment
Willard, Reynolds & Co.; Grosvenor Farwell, Hitt, Farwell Associates;
Geo. W. Bovenizer, Kuhn, Loeb & Co.
Limbert, Blyth & Co., Inc.
CHRONICLE
"
B. C. Eustis, Spencer Trask & Co.; M. D. Hall, L. A. Mathey & Co.;
A. Stanger, Jr., Riter & Co.; J. L. Richmond, Reynolds & Co.
W.
John McMaster, Great American' Insurance
Co.; Herbert
W.
Marache, Granbery, Marache & Co.; Egerton B.
Vinson, De Haven & Townsend, Crouter & Bodine
Rummel, Burr & Co.; Jim Colthup, Freeman & Co.;
Reitenbaugh, Goodbody & Co.
W. Arthur
Frank Wood; John S.
Adrian M. Massie, New York Trust Co.; Egerton B.
Vinson, De Haven & Townsend, Crouter & Bodine;
David L. Skinner, Harriman Ripley & Co.
/•••<-•■
Grotz, Geo. H. Reeves and A. D. Lane, all of Chase National Bank
*"
y
J. William Smallwood, Carl H.
Pforzheimer & Co.;
Walker W, Stevenson, Jr., Hemphill, Noyes & Co.
\v*# %.
Arthur Nelson, Burnham & Co.; Jacob C.
Asiel & Co.
Stone,
^r' y
\
William S.
Geo. P.
;
-
-v*•
WilsonMontgomery, Scott & Co.;
Rutherford, Dominion Securities Corp.
•
*
@FedFRASER