The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
u0£®sgan,
PUBLIC UTILITY INDUSTRY FEATURED IN THIS ISSUE
'
I
Commercial
;V
y.';-.
■>
Reg. U. S Pat. Office
Volume
Number 5332
179
New York 7,
t'.v
■
EDITORIAL
Investor Owned Utilities Can
"What's
the matter with us anyhow?" This
question posed by Adlai Stevenson in a recent
address at Columbia University struck a respon¬
sive chord, we feel certain, in many a mind
throughout this country of ours. Few there are,
probably, who doubt that there is something the
matter with us. So widespread is the belief that
there is something awry, so diverse are current
diagnoses, and so fanatically do many of the
diagnosticians hold to their own conclusions, that
the clamor of the resulting "confused alarums and
Strife" is causing much uneasiness in high places.
It was early last week, also at Columbia Uni¬
versity, that the President of the United States
issued this adj uration to the American people:
"Let us not lose faith in our own institutions,
By WALTER H. SAMMIS*
By JEROME K. KUYKENDALL*
Retiring President, Edison Electric Institute
Chairman, Federal Power Commission
seeking to destroy us."
says
of the electric light and power industry and
achievements have been gratifying. Comments on
atomic power
developments and condemns inroads of
Federal power projects in field of private enterprise.
Accnses government of selling power below cost, and
recites TVA story.
power
shortage is
power
a
Says public investor-owned
myth, and extols record of private
companies in meeting expanding
continued
of
course, a
Columbia.
essayed
the 75th
incandescent
chain
of
Some
observations
his
are
"The
usual
Ignorance
diagnosis
leads
many
on
interest.
I presume
that, by law,
electricity is for sale here in Atlan¬
tic City by one, and only one, busi¬
harnessing of
world.
this program
pay
will
Others
direct tribute
I shall
en¬
As
we
assemble
here
in
this
comparatively
available
98%
to
of
all
butcher,
the
alto¬
is
provided,
of
that
course,
is not given
the
com¬
neces¬
so
the proper functioning of
competitive system, but instead,
is subject to adequate regulation by
the people through their constituted
to
sary
pe¬
occupied
governments.
The Federal and State
governments,
provided the
you
J.
well know, have
of doing this
in
the
♦An
of
address by
the Edison
Kuykendall
With all the technological advancements
utility field, however, we have not
the stage where all we have to do is push a
electric
Continued
on
page
27
42
*An address by Commissioner Kuykendall before
46
K.
means
regulatory job.
reached
page
the baker,
it
an
busi¬
our
It is low in
on
be
most
plete freedom of decision
farms.
Continued
would
for
maker—but
such business
Truly, it is the servant of the American people.
price—the average far all classes of electric
service in 1953 being 1.770 per kilowatt-hour versus
what
nesses—the
business,
riod, electricity has been brought to
about 99% of all occupied establish¬
ments in the United States.
It is
Walter H. Sammis
situation
gether sound for the electric utility
Atlantic
short
intolerable
candle-stick
achievement in service to mankind.
In
That
institution.
ness
on
City to discuss problems and matters
relating to our business we can look
back
upon
75
years
of
glorious
well
page
mental authority in the protection of the whole public,
a
significant
mileposts in the industry's progress.
ends with
confuse
Continued
the
nomic life of the
is ignorance and fear.
to
in
reaction
started
deavor to point out a few
consideration, but frankness constrains us
add that it seems to us that he missed the main
point. In answer to his own question as to
is the matter with us he proceeds:
invention
to Thomas Alva Edison.
worth
to
This
electric energy that has had a pro¬
found impact on the social and eco¬
task at
such
lamp.
1
By nature, the electric utility industry is a public,
calling. It needs special governmental privileges, grants,
and
immunities, and requires regulation by govern-
anniversary of Edison's invention of the first
practical
set "fur:
a
return," but considers relevant facts in individual
Gives data regarding EPC regulation of electric
utility security issues.
cases.
demands. Urges
This year the electric industry—utilities, manufactur¬
and others—is celebrating Light's Diamond Jubilee,
thing to be avoided
some
of
rate
ers
times, but exhortation is not likely to pro¬
vide a means of achieving avoidance, and more
than determination on the part of the rank and
file not to lose faith is required. Far better is it
to do our best to arrive at a sound diagnosis and
to seek a rational remedy.
Stevenson
Federal Power Commission does not have
good and adequate service by power companies
at all
Mr.
power
4
Kuykendall reviews history of public regula¬
tion of utilities and points out while aims of utility man¬
agement are to secure adequate revenues, the responsi¬
bility of regulating commissions is to see that rates
are jnst and reasonable.
Says rate standards are essen¬
tial, and indicates the "investment base" predominates
in determination of just and reasonable rates. Reveals
Prominent utility executive reviews early struggles and
f
♦
Copy
Chairman
progress
citizenry lest we—divided among ourselves—thus
serve the interests and advance the purposes. of
Loss of faith is,
a
A New Look at
President, Ohio Edison Company
and in the essential soundness of the American
those
Cents
Regulation
Supply Nation's PowerNeeds Oi Electric PowerCompanies
As We See It
v
40
Price
N. Y., Thursday, June 10, 1954
Convention
Mr. Sammis before the 22nd Annual Convention
City, N. J., June 1, 1954.
June
Electric Institute, Atlantic
3,
of
the
Edison
Electric
the 22nd Annual
Institute, Atlantic
City, N.
1954.
ISSUE—Candid shots taken at Annual Field Day of Bond Club of
pages 29-32 inclusive.
On pages 33-36 inclusive are pics taken at
Spring Outing of San Francisco Security Traders Association and Security Traders
PICTURES IN THIS
New
York
Joint
appear
on
Association of Los Angeles.
U. S. Government,
State and
Municipal
ALL
ON
*
Securities
HAnover 2-3700
Chemical
bank & trust
company
BOND
DEPARTMENT
All Corporate & Foreign Bonds
American
MABON
& CO.
Chicago
BeU System
and
*
THE NATIONAL CITY BANK
Teletype NY 1-2152
WALL
STREET
NEW YORK
122 Years of Service
to
To
Active
Markets
Dealers,
Banks
Orders
Canadian Exchanges
Raw
—
Refined
—
Liquid
50
DIgby 4-27-27
CANADIAN
Brokers
BROADWAY, N. Y.
bridgeport
Executed
perth amboy
Detroit
Geneva,
•
•
•
Pittsburgh
Coral Gables
Beverly Hills, Cal.
Switzerland
CHASE
THE
NATIONAL BANK
Of THE CITY OF NEW YORK
CANADIAN
DIRECT WIRES TO
MEMBERS
NEW
COMMON
At Regular Rates
MONTREAL AND TORONTO
NEW YORK
YORK
Gas Company
DEPARTMENT
Goodbody a Co.
115 BROADWAY
BONDS & STOCKS
Arkansas Western
On All
Teletype NY 1-2270
Members N. Y. Stock Exchange
Exports—Imports—Future*
Bldg.
Maintained
and
'
American Stock Exchange
Bond Department
CANADIAN
T.LWatson&Co.
I
•
Miami Beach
Teletype: NY 1-708
SECURITIES
•
Trade
Amsterdam, Holland
Commission
SUGAR
of
other Exchanges
Hollywood, Fla.
Bond Dept.
Our Customers
5, N. Y.
Bonds
Inc.
Exchange,
Board
N. Y. Cotton Exchange
Chicago
OF NEW YORK
if
RE 2-2820
Net
99
Exchange
NEW YORK 4, N. Y.
*******
LAMB0RN & CO., Inc.
Exchange
New Orleans Cotton Exchange
^
Members N. Y. and Amer. Stock Exchs.
Broadway, N. Y. 6
Stock
Cotton
Commodity
Sixty Years of Brokerage Service
115
York
New
Exchange
Stock
York
New
Preferred and Common Stocks
*
Municipal
Members
CALL *
State and Revenue Bonds
^
1856
H. Hentz & Co.
MARKETS
ONE
State and
Established
*
Complete Brokerage Service
U. S. Government — Municipal,
*
telephone:
*
★
★
*
*
★
STOCK EXCHANGE
1 NORTH LA SALLE ST.
CHICAGO
Pomeuox Securities
<3rporaxio21
40 Exchange
Place, New York b, N.Y.
IRA HAUPT & CO.
Members
and
York Stock Exchange
Principal Exchanges
New
other
111 Broadway,
WOrth 4-6000
Teletype NY 1-702-3
WHItehal! 4-8161
Boston
N. Y. 6
Teletype NY 1-2708
Telephone:
Enterprise
1820
i
f
The Commercial and Financial Chronicle
2
jJay, June 10, 1954
(2526)
We
The
position and trade in
Groups
the following
Security I Like Best
This
Forum
week, a different group of experts
field from all sections of the country
A continuous forum in which, each
in the investment and advisory
Banks and Insurance
participate and give their
reasons
for favoring
Farmer Bros.
M.
are not intended to be, nor
offer to sell the securities discussed.)
(The articles contained in this forum
Industrials
they to be regarded,
are
as an
Alabama &
Their Selections
particular security.
a
Week's
Participants and
Company
Beringer,
P.
Louisiana Securities
Stu
—
Brooks^&
W.
Co., Inc., N. Y. City. (Page 2)
Bought—Sold—Quoted
Standard Fruit & Steamship Com¬
STUART
Natural Gas
BERINGEll
M.
service call.
P. W. Brooks & Co., Inc.,
New
York
Bros. Co.
Fanner
is
roaster
and distributor of coffee to hotels,
restaurants and institutions on the
New York Hanseatic
it
Established
Associate
120
1920
Broadway,
New York
BOSTON
OFFICE!
Wires
Chicago,
to
84
Cleveland
Philadelphia
and
of
ture
Houston.
1953
the
31st
but
York
120
Stock
Stock
well as several
subsequent recessions and World
War
a
BROADWAY, NEW YORK 5
TEI.
REctor 2-7815
year
be
more
Alabama-Tennessee Natural
times
8.8
tal increased 6.7
Commonwealth Natural Gas
9,500 to about
The
Lynchburg, Ya.
Tele. LY 62
ness
LD 33
company's principal busi¬
consists
of
roasting
and
processing imported green coffees,
and
selling the roasted product
under the brand name "Farmer
Brothers"
to
hotels,
restaurants
and
institutional
users
such as
<°yR
schools, hospitals, plant cafeterias,
smm
ms&m
\
^
rattfl
public institutions, etc. Such sales
accounted for approximately 82%
of the
company's total dollar sales
The company sells its
Ari¬
zona, Utah, Nevada, New Mexico,
m Oregon and Washington to an
*
estimated
19,500
customers,
of
which approximately 80% are in
California.
The
company
also
coffee
in
Texas,
California,
other food
sells
products such
as
teas, extracts, spices, flavor bases,
swine4
and puddings as
sundry restaurant equip¬
gelatine
cocoa,
well
as
such
ment
as
glass¬
chinaware,
silverware, napkins, waiters'
checks, creamer caps and sundry
ware,
silex
and
urn
counted
sales
for
business
ice
and
7.7%
about
the
coffee
of
ac¬
1953
ate being made
volume
of
such
substantially.
As part
Write for Circular
than1
and efforts
increase
to
Food
accessories.
other
products
UNILEVER
of the company's serv¬
at
no
additional
cost
to
customer, the company loans,
services and maintains the coffee
the
urns,
<9j>P£nheinWi &
Members
New
York
Stock
Exchange
25 Bread St., New York 4, N. Y.
Phone: HA 2-9766
Tele. NY 1-3222
The
in
to
stoves
and
certain
related
about
fee
of
$900,000
finest
the
efficient
delivery
roaster, bringing total capacity of
roasted
of
144,000 pounds
roasters to
co"fee
per
8-hour day.
Green coffee is conveyed in a con¬
ers,
and
which are fully automatic
electronically controlled, com¬
pleting the roasting cycle in seven
minutes.
This type of equipment
product.
now
to, the
earnings
of $18,304,717,
profits increased 30% from $416,Turning
picture,
to
1952
in
764
sales
on
$754,015
(a
new
Fruit
1952
and 37.4 cents
of
1954
are
of
the
period.
Earnings for the first four months
1953
to be
believed
results for
the
ahead
comparable
period.
that
of
lic
a
offering
1952
September,
in
quarterly dividend rate of four
cents
all
a
so
ba-
the
n
a
i
s
Id
The
m¬
stantially
in¬
tegrated,
im¬
not
a'lso
It
and
South
as
Central
in
as
interest
in
controlling
a
Fabrica de Manteca-,
manufacturer
of
in Honduras,
income
taxes
in
share of
the
preferred
and
earnings
amounted
to
stock.
$7.53
per
cf
*
to
ber
was
also
1954 the quar¬
the increased num¬
shares was again
raised,
of
on
this time to eight
share.
mon
stock
common
Feb. 2,
On
terly rate
cents
Based
the-counter
com¬
the
on
"inside"
per
over-
offering
price of about 4V2, the yield is
a
7%.
generous
ment
can
take
in which manage¬
justifiable
pride.
Not content with achievements to
date, management is actively in¬
vestigating opportunities for ex¬
every
operations
into
new
(while continuing to exert
effort to
constructive
long-term
program aimed at cost and quality
controls, sales expansion and
sponsibility. While
in
has
1953,
changes
eral
can
only be felt
wholly owned
pu¬
cium
under
a
with
contract
the
ATOMIC ENERGY COMMISSION.
•
.Company
four
$11.40
earned
years.
Dividends
in
past
paid
same
period $2.25.
Memorandum
request
on
Daylon Haigney & Go.
over sev¬
is
cog¬
Incorporated
75
FEDERAL
STREET
the
present
capital
wanting in some re¬
spects and feels that in due course
structure
a
improve¬
Management
that
is
BOSTON
10,
MASS.
steps will be taken to improve this
Standard Fruit operates 14 ships
the
United
States
and
between
Central
secure a
tions, the
of
railroads
1,000 freight
tives.
and
in
acquired
the
Wason
To
cars
with
300
almost
interests such
as
manufacturing
modern
nificant
The
the soap and lard
company,
as
1952,
additional
current
OVER-THE-COUNTER
INDUSTRIAL STOCK INDEX
was
35 Industrial Stock»
POLDER
ON
REQUEST '
provide sig¬
National Quotation Bureau
income.
financial
Continued
14-Year Performance of
well
brewery which
in
N. Q. B.
and 30 locomo¬
The aforementioned outside
yet larger
a
America.
company Owns over
constructed
territory),
South
and
its extensive banana planta¬
serve
its
1954
re¬
already been manifest
the full effect of these
years.
nizant
some
program.
Nelco Metals Inc.,
more
allocation of corporate
proper
com¬
ATOMIC
the
in
rity magnesium and metallic cal¬
in¬
paired natural growth. This past
year
has seen new management
as
April,
and
metallurgical
subsidiary, manufactures high
effectual management policies im¬
share of the available business in
present
•
Until recently, however,
a
1
'
engaged
ENERGY
costs.
enjoyed spectacular
growth during the late teens and
twenties.
A chemical and
pany
company
miles
its
•
quality,
better
'•'
■"!.
per
Organized in the early 1900's, the
42-year record of
consistently profitable operations
and virtually uninterrupted
one
LIME CO.
years
$4.45
situation.
Farmer Bros.'
growth is
prices,
reduced
ment
paid.
over
due, among ether things,
was
higher
and
ten
past
NEW ENGLAND
the
right,
participation
v
1953
Teletype NY 1-4487
After
dividend of $3
consideration
the
Inc.
30 Broad St., New York 4
provision for
common
for
John R. Boland & Co.,
B0 9-3242
after
1953
per
share
REEVES SOUNDCRAFT
lard, and
soaps,
other by-products.
Net
PANTEX MANUFACTURING
SANDY HILL IRON & BRASS
inter¬
America,
INC.
(Prospectus Available)
brewery and sort drinks
a
company
well
native
additional
has
GENERAL CREDIT,
in
those
other
Central
in
America.
Bankers
Trading Markets
plan-
own
tations
from
Divestment
&
Branches
Broadway,N.Y.6 COrtlandt7-5680
bananas
Honduras, but
purchased
Brokers
111
Ltd.
1897
Tokyo—70
Office
only from
its
of 15%
in
Established
Home
sub¬
are
ports
activate
was
Yamaichi
activi¬
whose
Lyons
publications
Securities Co.,
States.
company,
ties
Laurence
write
Japanese securities
on
the
in
United
adopted for
the common stock.
In July, 1953
the quarterly rate was increased
50% to six cents per share and in
December, 1953 an extra dividend
share
per
or
current
our
ported and
ests in
offices
accounts
continuation of outmoded
Coincident with the initial pub¬
for
for about 20%
growers
branch
our
Call
Steamship Co. because it
an
equity in sizeable
and growing agricultural business
The increase in earnings in
for
to
in Japan
&
share.
postwar (1946-53)
wires
represents
averaged
for the
NY 1-1557
La.- Birmingham, Ala.
Mobile, Ala.
Direct
of the Standard
have
cents
New Orleans,
Steamship Ccmpany
(less current preferred
dividend requirements of $14,697),
this is equivalent to 65.7 cents per
common
share,
compared
with
standing
St.,. New York 6, N. Y.
Opportunities
preferred
35.7
Rector
Hflnover 2-0700
City
high) in 1953. Based on the 1,125,640 common shares now out¬
Coffee Co. of Seattle, thereby ex¬
and
&
I like the stock
tinuous stream through the roast¬
tending Farmer Bros.' operations
the
entire
length of the West
methods,
Fruit
(containing
attention to
without
individual
brewing
Allen & Co., New York
Standard
,
its two
19
LYONS
efficient cof¬
most
and
Exchange
Exchange
Investment
LAURENCE
modern,
a
Stock
Stock
a substantial pre¬
obvious growth po¬
its
cost
a
York
American
pay
for
be
charge, on-the-spot maintenance
and repairs of equipment within
service,
to
.
tentialities.
processing units in the United
Recently
the
company
completed the installation of its
second continuous Thermalo
States.
areas
and
having
fee
panding
fast
be
can
100,000 square feet of floor
115 sales-service
men
operate from 36 distribu¬
tional outlets, providing customers
with
plant
processing
about
accessories used by its customers.
Approximately
which
Members
available t o d a y
purchased without
stocks
growth
n
construction at
the
earn¬
ings and with a conservative divi¬
dend providing a fine yield, this
low-priced common stock seems
to be one of the very few genuine
early
completed
company
1952
of
1953.
for
to current
available.
the finished
pattern of growth continues with
first quarter 1954 sales up about
10% over the same period in 1953.
Scott, Horner &
Mason, Inc.
believed
volume
net worth
markedly improves the quality of
to $4,663,-
of customers
19,500. This
000; and (e) number
from
<n
(d)
6.1 times from $770,000
Dan River Mills
£
times from $385,-
$2,578,000;
to
000
Company
from
working capi¬
14,923,000 lbs.; .(c)
Gas Company
dollar
times
8.2
to
$18,305,000;
(b)
coffee sold increased
from 1,695,000 lbs. to
$2,239,000
pounds of
American Furniture Company
results of
(a)
pasty decade:
increased
sales
to the
as
expansion,
this
following
the
the
just
specific
of
magnitude
Trading Markets
was
level.
higher
consider
'
actually able
to raise its business to
but
II,
To
as
relation
in
reasonable
a
on
substantial
with
$1,000,000
space) on a 20-acre plot of land
in Torrance, Calif.
Management
believes this plant to be one of
30's
(Page 2)
Members New
basis
Selling
ex¬
country's greatest depression
each
Exchange
Exchange
of
enterprise is that
Farmer Bros, during that period
not
only successfully weathered
Members
American
about
high.
in the early
frfcpONNELL&rO.
the
1950
one-story, highly mechanized cof¬
this
City.
Steiner, Rouse & Co.
Coast.
tail-pipe assemblies for jet
additional
soundness of an
Since 1917
New
Beringcr
M.
year
the
Rights & Scrip
of
1951, $956,527 in 1952
and $1,973,058 in
1953. Unfilled,
orders
at
the
year-end totaled
consecu¬
new
York
New
subcontractor, com¬
manufacture
the
$414,419 in
in which sales reached
What this means to
investor anxious for growth
concerned
with
the
basic
tive
a
Co.,
mium
pilot ejector seats, mis¬
sile components, wing beam as¬
semblies and other defense items.
Sales of
defense
items tbtaled
Stuart
Specialists in
half
use.
engines,
its
that
still in
were
second
the
haust
be
marked
stoves
In
growth is the
tact
in ad¬
approximately
which
to
menced
point up the
dynamic na¬
Street
State
Boston,
loan totaled $1,226,596 on
on
books of the company,
company, as a
mentioned to
Teletype NY 1-583 and NY 1-40
Direct
gross
and
since
could
that
manufactured by the
As of Dec. 31, 1953, the
book value of such equip¬
and
$400,000 of fully depreciated urns
every
statistic
gle
5
WOrth 4-2300
BArclay 7-5660
signed
dition
haps the most
amazing sin¬
Exchange
use.
ment
prof¬
has installed for
This .equipment is de¬
company.
founding. Per¬
Member
Stock
in
year
their
oper¬
a
In return, customers
company
the
has
ated at
Corporation
largest
Coast
West
and
American
1912, Farmer Bros,
the
today
pany—Laurence Lyons, Allen &
to use only Farmer Broth¬
coffee in the equipment which
the
in
Founded
Co.
Utilities
a
agree
City
ers
Pipe Lines
receiving
after
hours
few
a
condition
Incorporated
46 Front Street*
on
page
49
New York 4, N. Y.
Volume 179
Number 5332
The Commercial and Financial Chronicle
...
(2527)
\
A
Quarter-CenturyForecast of
INDEX
.v
,.
Electric Power in U. S.
Articles and News
—Ray D. Murphy
Company
Electric
i
4
___.
THE LITTER
What's Ahead for Germany's Business and Finance?
Chairman, Electric Power Survey Committee,
Edison
page
Government's Role in Providing Economic Security
By WALKER L. CISLER*
President, the Detroit Edison
—A. Wilfred
May
Institute
AND THE GOLD
5
Will Business Activity and Interest Rates Recover in 1954?
After reviewing progress of electric
—Gordon
industry since its
power
Estimate for 1975
and 367
million
tions involved
in the
may
a
kilowatts.
well
as
Discusses engineering considera¬
into
come
observe
we
Electric
Light's
Diamond Jubilee, and reflect upon
the far-reaching achievements of
electric
the
light
and
in¬
power
during
dustry
the
past "75
it is fit¬
years,
ting
that
should
tinue
we
con¬
looking
ahead—to
electric
than
contemplated
days, when salesmen were
employed to go from door to door
to
convince people that electric
lights were superior to gas lights,
^8F jllfP
tion—the
Pearl
pacity
portedly
e
re¬
to
measure
the
task
that
first
day.
with
a
central
Street
59
served
That
sta¬
Station
in
ca¬
re¬
customers
plant
factor
load
of
its
operated
less
than
In
Power
September, the
hydro-electric station — the
Vulcan
Street
at
debut
same
Station—made
tute
of
of
Appleton,
Wis.
findings.
familiar
are
They
have
tive and
the
gle.
for
The
these
reference,
friendly
their
and
have
by
other
in determining
respective situations.
Today we have, spread across
country, interconnected power
systems that serve more than 50
teenth
Semi-Annual
transmission and distribution
cuits
are
the
Before
cur-
times that length.
many
this
of
end
year,
will receive
power
from central generating
stations having a total capability
these
1954,
of well
over
which
is
the
systems
100 million kilowatts,
more
electric
than
power
40%
in the
all
of
Sur¬
plants use less than three-quarters
of a pound of coal per kilowatthour," a thirteen-fold improve¬
ment
over
the
first
central
thermal
plants.
This growth
and development of
by Mr. Cisler at the 22nd
Annual Convention of the Edison Elec¬
tric Institute, Atlantic City, New Jersey,
♦An addi
June
2,
in
through 1957. This has been ade¬
quate for the purpose because it
is possible to design and construct
generating stations and other fa¬
cilities within a four-year period..
is
It
done
to
these
make
possible.
accomplishments
With
that much
had 1 to be
short-range
however,
planning
true,
long-range
world.
The newest of our thermal power
—Ira U.
intention
the
of
bringing
the
long-range
aspects
of
the
power situation into focus, and to
provide the basic information for
this
"Look
Ahead," the Power
Survey Committtee has recently
completed a forecast of the peak
load
power
The
methods
formation
requirements to 1975.
and
used
sources
were
of
similar
in¬
to
ess
those
in
employed
Continued
1954.
the
on
Supply
Nation's
Sulphur
♦
Cover
Kuykendall_____
Electric Utility
Cover
Cisler
BURNHAM AND COMPANY
3
Members New York Stock Exchange
4
JOHN F. REILLY, Manager
...
Can
Unlisted
Every Year
Cost Controls in
☆
Expansion Period
an
Telephone
11
,
LeBaron
_L
17
Atomic Power and the Utilities—Owen
21
Ely
23
.__
HYCON*
Selling Action Required to Expand Electric Power Use
R.
Teletype
NY 1-3370
Dlgby 4-1680
Edison Electric Institute Elects New Officers
—Sherman
Knapp
24
STANDARD
Guaranty Trust Co. Decries "Underconsumption"
Theory
URANIUM
19
Congressman Patman Urges Audit of Federal Reserve System 40
McChesney Martin,
Jr.
Opposes
Government
LISBON URANIUM
Audit
Reserve
.____
41
H & B AMERICAN
National
City Bank Approves Aims of Tax Revision Bill
41
*
MACHINE*
Regular Features
As We
Bank
See It
and
Business
(Editorial)
Insurance
:|!Literature
*___
Stocki.__.__
We
51
Man's Bookshelf
Canadian
8
Dealer-Broker Investment Recommendations
8
Block"
NSTA
News
of Current Business
Notes
Activity
45
Our
63
Reporter's
Utility
5
Report
Securities
Now
Prospective
Securities
in
Registration
Security
.
.
Lisbon
Mills, Inc.
Uranium
61
Corner
and
44
You—By Wallace Streete
Rohr Aircraft
16
Security I Like Best
The State of Trade and
Reeves-Ely Lab. Inc. PfcL
58
Offerings.
2
Industry
Seneca Oil Co.
5
Washington and You
64
Standard Uranium
*No
38
article
The
specialized in
PREFERRED STOCKS
this
COMMERCIAL
Park
DANA
Place,
REctor
'
Members New York Stock Exchange
i
25
BROAD
•
•
x
Boston
Manchester, N. H.
I
•
•
'
TELETYPE N. Y. 1-5
I
•
Nashville
>
•
Chicago
Glens Falls
•
Schenectady
•
Worcester
1
and
2-9570
York
to
7,
on
Drapers'
land,
Gardens, London,
Edwards & Smith.
c/o
N.
DANA
Thursday, June
Subscription
Subscriptions
Editor & Publisher
Every
vertising
10,
President
Possessions,
Other
Thursday (general news and ad¬
issue) and every Monday (com¬
Offices:
3,
111.
135
South
La
Salle
Dominion
Other
1954
plete statistical issue — market quotation
records, corporation news, bank clearings,
state and city news, etc.).'
Chicago
Eng¬
St.,
(Telephone STate 2-0613);
available
request
-
ary 25,
1942, at the post office at New
York, N. Y., under the Act of March 8, 1879.
Y.
9576
SEIBERT,
C.,
second-class matter Febru¬
as
in
of
$55.00
the
rate
of
S.
of
per
Record
of
the
WHitehall
3-3960
Teletype NY 1-4040 & 4041
—
Monthly,
(Foreign postage extra.)
account
INCORPORATED
39 BROADWAY, NEW YORK 8
year.
Publication
Quotation
$33.00 per year.
Note—On
U.
Members
$48.00 per year; in
Canada,
$51.00
per
year.
Other
and
States,
and
Union,
Countries,
Bank
WM V. FRANKEL & CO.
Rates
United
Territories
Pan-American
WILLIAM
E.
Copyright 1954 by William B. Dana
Company
Reentered
COMPANY, Publishers
New
HERBERT D. SEIBERT,
ST., NEW YORK 4, N. Y.
TELEPHONE HAnover 2-4300
Albany
'
Twice Weekly
Reg. U. S. Patent Office
25
Corp.*
week.
FINANCIAL CHRONICLE
WILLIAM B.
Spencer Trask & Co.
Corp.*
49
Salesman's
.
Dan River
23
Railroad Securities
The Market
MACKIE, Inc.
40 Exchange PI., N. Y. S
Teletype NY 1-1825 & NY 1-1826
8
Bankers
and
49
The
more
52
Banks
Observations—A. Wilfred May__
Our Reporter on Governments
Securities
in
securities
55
__.
.___
About
markets
HA 2-0270
10
Funds
Public
&
44
Washington Ahead of the News—Carlisle Bargeron
Mutual
trading
over-the-counter
250
Singer, Bean
Einzig—"Britain Looks for Peace and Trade with Communist
Indications
Request.
*
._
Coming Events in Investment Field
From
maintain
than
63
Securities
on
Cover
;1
*Prospectus
have
•
15 Broad Street, New York 5
Develop Peacetime Atomic Power
—Robert
Trading Dept.
9
—Stuart M. Campbell____
We
Published
For many years we
Sold
of Electric Power Companies
regular
page
—
Power
Sammis
Cobleigh__
of Federal
Power
Can
Bought
Industry
—George M. Gadsby
William
early April gives
million customers.
These
inter¬ considerable detail regarding ac¬
statistics
for the past few
connected systems include more1 tual
than 150,000 miles of transmission years
and presents the current
lines
operating from 66,000
to forecasts for the years 1954
The lower voltage
K.
the Committee have
the four years im¬
ahead. Thus, the Fif¬
made
vey
Utilities
only
mediately
Electric Utility
on
A New Generation of Electric Power
Forecast
by
Standard
37
Menace of Preference in Sale of Federal Power
reports.
The regular power surveys con¬
covered
Sulphur
26
___,
States—Walker L.
report
Twenty-Five Year Peak Load
ducted
Gulf
25
;_
Quarter-Century Forecast of Electric Power in United
and
nations
own
Request
on
22
__
H. Peterson
—Jerome
A
informa¬
guide
a
as
Prospectus
Providing Adequate Highways
New Look at Regulation
They have established bench
used
Associated Oil & Gas
18
20
____
Needs—Walter H.
period of the Korean strug¬
States.
330,000 volts.
Liabilities in
Investor-Owned
our
rapid expansion and trouble¬
some
O'Brien.
Challenge—L. L. Colbert.
Articles
useful, especially during
These
our
our
Electric
most
V.
—Roger W. Babson
Semi-Annual
with
been
Fear—W.
Some Optimistic Words About Modern Youth
review
Fifteenth
4-6551
14
Without
Future
Bradley
—William
Survey, conducted
by the Committee, has just been
published. Most of you probably
its
beginnings of electric
generation in the United
power
its
the
WALL STREET, NEW YORK
14
The Business Outlook—Robert C. Swanton._i
Electric
its
Committee
to
Obsolete Securities Dept.
99
Tax Revision Revisited: The 16th Amendment
Electric Power
the
were
it
"gold"!
our
Telephone: WHitehall
Buttenwieser
Kennedy-
A
and
—Albert
periodi¬
cally the power situation in this
country, and to advise the Insti¬
been
kilo-
generated.
Assets
A
Edison
Survey
instructed
marks
pounds of coal for each
the
and
cats
your
have
recent
farms.
organized
can
en¬
our industries,.
establishments,
our
1947,
Institute
10
watthour of electricity
first
in
concern
by
homes and
10% and consumed approximately
Later that
steam
power
t h
o n
City—which had a
900 kilowatts and
of
Our
than
were
commercial
thermal-electric
New York
effective
motors
for
i
industry in
fulfilling its
Walker L. Cisler
responsibility.
Seventy-two years ago, in Sep¬
tember of 1882, Thomas Alva
Edison
placed in operation the
first
electric
probable
s
lies before the'
-
that
gines.
J.
M.
years
the future and
R
greater
in
the
power
i
en-
quirements of
m
fas¬
of
of
v
I
been
has been in keeping abreast
the
rapidly increasing need
1
llHaiitoiilL'
has
proportions—far
was
more
13
Electronics:
early
and
Consumer Credit and Prosperity—Donald A.
Fergusson
A Period of Crucial
power
cinating
have
can
you
10
12
—David
challenge to electric
a
we
dogs,
Tax Revision Bill Will Benefit Both Individuals and Business
organizations.
power
As
is
power
L__J
___.
The Outlook for Retailing—Albert Coons
—Benjamin
predicts atomic power reactors
within five years. Holds ever-
operation
If
6
—
Is Aid to Underdeveloped Countries in Our Own Interest?
electric industry, and
increasing requirements for
McKinley
—Ernest Henderson
peak load between 262 million
organizations and business matters
as
W.
Role of Hotel Chain in American Economy
beginning in 1882, Mr. Cisler describes the 25-year long range
forecast of the Power Survey Committee of the Edison Electric
Institute.
3
fluctuations
Direct
PLEDGER
Wire to
& COMPANY
In
exchange, remittances for for¬
eign subscriptions and advertisements must
be made in New York fundi.
LOS ANGELES
INC*
.
V.
.i
4
The Commercial and Financial Chronicle
(2528)
problem has grown larger as the
number of elderly people in the
population has increased. In many
Government's Role in
Thursday, June 10, 1954
..
.
Menace of Preference
directions,
including
the
great
growth of security protection fur¬
nished by private insurance or¬
.
Providing Economic Security
ganizations, the search for
By RAY D. MURPIIY*
al
individual
of
incentives
At such
opportunity
social security
benefits, traces American developments along
lines, and points out their dangers as well as their advan¬
these
theme,
Says American people have not yet come to fully realize
"that more can be given only by taking more" and nation does
not get something for nothing in social security.
Discusses
proposals in Social Security Bill now pending in Senate, and
holds dangers of excessive security seeking can be avoided
experience,
My
over
many
has been in helping to fur¬
years,
with
Americans
nish
of
means
achieving a degree of personal se¬
curity
on
a
voluntary ba¬
sis
and
on
basis
involves
i
n
sav-
applied
g s
in
a
which
advance
to
men,'
surance
have
much
voted
d.
people
Murphy
of
de¬
economy
and
on
government
our
welfare
Life insurance men,
I
sure,
am
have every sympathy with the ob¬
jective of protecting
the
In
their
voted
United
citizens
our
fact, they have de¬
lives to
that
States there
end.
is
In
main¬
tained through private efforts and
private
instrumentalities
precedented
cludes
un¬
of
amount
protection.
an
security
protection
in¬
That
life
insurance,
pension'
plans, individual annuities, insur¬
to
replace income lost be¬
of disablement and to offset
ance
cause
hospital
and
Because
medical
expenses.
their
of
knowledge and
experience in dealing with secu¬
rity
protection, insurance men
take
vital
a
problems
means
and
in
or
perhaps
in
the
security
specific
to
whole
mental
embrace
and
concept
welfare
of
govern¬
provisions
can
wide range of subjects,
a
obviously
I
cannot
hope! to
them all tonight.
Conse¬
quently, I plan to use the Federal
Old-Age and Survivors system,
so-called "OASI," as a focal
point
cover
for my remarks.
It will
serve
as
cient times down
While
each
other hand
to
me
important to
these
two
old-age benefits under our social
security law, because it is evident
that
the
average
American,
al¬
though vitally affected, knows too
little about the real
working and
influence of the plan. Worse
still,
what he thinks he knows often in¬
cludes some serious
misconcep¬
tions.
he
It
seems
thinks
of
quite certain that
the
social
security
plan
as a low-cost
program and
has little idea of what it is
appar¬
lack
minds into
of
incentive
attitudes
are
min¬
a
later point.
The Search for
Security and
Opportunity
But first let me emphasize
that
the means adopted to obtain
secu'
'An address by Mr.
Murphy at the
Dinner Session of the 38th
Annual Meet¬
'
ing of the National Industrial Conference
Board, New York City, May 20, 1954.
through
instrumentalities
the
government.
failures
tion
of
The
excessive
for
of
Rome,
relied
ernment has
of
mental
ancient
measures
govern¬
first
were
adopted for the relief of poverty
social
and
misery,
expedient
and
unrest
primarily
for
curing
of
purpose
increasing
political
stability.
However, as so ioften
happens when political expedi¬
ency is the keynote, one step led
to another, one liberalization to a
and
second
until there
and
what
lief
of
that
was
started
poverty
method
to
one
no
third,
a
stopping place,
modest,
as
turned
substantial
of
tion of wealth.
re¬
into
a
redistribu¬
The consequences
have invariably been tragic. Even
great
joyed at the
whole
for
once
en¬
of others in
to be looked
expense
part
or
upon as a
reason may
beneficence
a
comes
right; and then demands
increased
from
support
the
same
source are
weaknesses of
On
stimulated by the
our
human nature.
the other side,
less
of
and
initiative—lose
the
fruits
create
their
an
labor
economy
predominant
American
I have great
seeking of opportunity rather
the
new
seeking
were
of
security.
being pushed back
land settled.
Millions of
immigrants surged past the Statue
of Liberty to reach the land of
freedom
and
opportunity.
Re¬
being
harnessed,
new industries being started, new
factories
being
built.
Liberty,
freedom, expansion and individ¬
sources
ualism
were
wene
in the air.
During the first half of the 20th
Century, the balance has been
changing despite the fact that the
country has continued to Expand
in
a
great
directions. The
security has come to
many
the forefront and the emphasis on
to diminish. Our
people have been
increasingly gathered
into
urban
centers and greater numbers have
been
employed in industrial en¬
terprises. Job security has become
increasingly important. With the
drift away from the land, and the
greater
dispersion
of
families,
means of support in old age has
become
a
greater
problem.
The
American
principle
people would
t
in
agree
the desirability of a
a soundly
on
social
sound
Developments
confidence that the
order and
in
ple.
the
peo¬
We in the United States
are
fortunate
that our forefathers, in
establishing the Constitution, had
been deeply impressed by the his¬
tory of persecution and of inter¬
ference with what they considered
personal rights.
upon
They
libertv
for
the
intent
individual.
they knew that there
true
were
preserving religious and civil
human
Also,
be
no
rights unless the in¬
the
right j to own
dividual
has
property
as
power
can
well
the
as
to make and enforce
legal
con¬
tracts.
Therefore, they provided
safeguards not only for minority
rights but also for property and
contract rights.
The growth of
our
its
country and the expansion of
productive
powers
largely founded
have been
them.
The adoption of such principles
uoon
in
page
that
for
conscious, and
48
this
aim
to
least, at equality,
tendence,
far
so
avowed,
it is
as
is
not to
Constitution
separate
but
the
fundamental
the
is
is
the
con¬
sumer.
A
all
third
generalization,
the consumers, 80%
now
cut
off from
when
of whom
are
them,
the fight of the in¬
companies on their
vestor-owned
behalf
will
the
In
prise
be
won;'
in
was
-
when free enter¬
full swing, rates
days
to
how
this
has
a
taxpayers?
The
answer
is obivous—
IT'S CHEAPER THAT WAY!
participating
equitably in the purchase of Fed¬
eral power
sold at low prices,
wake up
to the injustice being
done
see
away," etc., etc., whenever some
has the temerity to suggest
that
the
benefits
of
taxpayers'
investments (involuntary though
they are) be distributed among
point in
any
ultimate
let's
one
electricity supply system, the
discriminee
citizen
a
State."
Now
fact, if discrimi¬
be present at
perfect life,
distribute
bearing on the preference clause.
Why do the present beneficiaries
hang on for dear life and yell
"unfair," "power trust," "give¬
still there.
nation
live the
to
laborer for himself and
has
conception
rather
impar¬
tially to all the burdens and a<Ivantages of the State, so that
every
one
shall at once be a
proportions to vari¬
segments of the people. But,
ous
Disraeli said:
"A precedent embalms
ciple."
.
a
prin¬
So the
professional public
power boys have assiduously at¬
tempted to set up the precedent
and
embalm
the
principle that
mmm.
mmmwmmmmmmmF"*
I
varying production costs, taxes
character
and
Now
to
of
| We Own and Offer
loads.
increasing degree,
differences in rates—i.e., the cost
the
to
No
the
an
to
ernment
is
situation
of
the
now
power
of
than
Federal
|
$250,000
ex¬
proof is needed
that
marketing
tax
subsidies
government
further
note
and
due
user—are
seriousness
to
Gov¬
operating and
from 65 hydro
I
I
New Jersey
Turnpike Authority
|
11 thermal
3
generating plants,
tax built but tax free, and is now
adding 32 hydro and five steam
all
stations
Many
Ya. %
Revenue Bonds
Due Jan.
of
large capacity.
hydro and all the
the
of
thermal
stations
are
1, 1985
( Callable)
"incidental"
constitutional purpose—and
should not be so to the non-fa¬
to
no
vored
citizens
who
are
Priced at 108
required
by taxation to give up their hardearned
money
to
pay
for
them.
No investor-owned company
will be
hurt
favorable
or
placed in
comparative
an
un¬
position
if every power producer and dis-
RAND & CO.
'
,
One Wall Street, New York 5
^
•
on
at
use
unequal
*An
the
N.
address
22nd
by
Mr.
Gadsby
before
Annua} Convention of the Edi¬
Electric
Institute,
J., June 2, 1954.
son
Continued
idealisti-
societies
modern
extent
some
disintegrated from "general wel¬
fare" to specific gifts and grants
and favoritism.
by
"All
be
customers
the
over
the
is the out¬
accepted
perhaps
of the
growth of certain basic premises
are
again,
Clause
zation
which
And
cally:
how
or
may
that the motive to becoirie
competent is taken away."
others to
emptions,
order
Golds-
of
Any civili¬
social
Dr.
quote
off a privileged
class
citizens, set free by the labor
functioning economy.
or
result
gen¬
oyer the country were not uni¬
form, but the difference was due
is lost.
to
Dickinson:
of
all
spread
incen¬
produce.
the dynamic
know, discrimina¬
the construction
United
and
happens
character of
their
of
and
in
States, and in their individual ca¬
pacities
are
taxpaying
citizens
standing equal before the law and
entitled to share equitably in all
benefits provided by the Federal
Government.
True, the Welfare
are
A second basic
Why has this tale been repeated
again and again? One
power
These
well
"Every kind of discrimination
a protection of the
incompetent
against the competent, with the
No
be
erated
customer.
worth
where
transmitted, its delivery and
is
at
one
specific location
each
stages,
con-
the
far it
fell.
Rome
that
George M. Gadsby
we
begins
is
may
gov¬
Rome, and
since, modest
As
con¬
is
matter
Let
financing in the
market, pay its fair
own
money
tion
far
so
the
sumer
important lessons for
In
us.
many times
its
cerned.
Mdginot Line.
influence during the 19th Century
in the United States came from
the
local in
own
level.
and
sell
its output
on
a
competitive basis.
In other
words, from here on out give the
Federal taxpayer a break.
service, as
perhaps
nothing
else,
is
entirely
as
its
his
on
tax
taxes
gin with, elec¬
ill-
the
on
open
stand
same
free
con¬
in
will
the
at
TVA do
the
dis¬
tric
atti¬
mental
tributor
To be¬
name.
through Euro¬
the
of
the
ducted
The search for personal security
be
and to
power concerns
whole.
a
feet
criminatory
security
through benefits provided by
the
private
as
per¬
practices
of
that
that
and
preoccupa¬
with the search
starred
all
to
necessary
proper
development
and
wrongs
are
Clause
be traced from the bread-and-
can
as a menace
in
great
When
Some have expressed the view,
it seems a reasonable inter¬
view
to
the
security-seeking
and
opportunity has tended somewhat
standing at
too
on
economy.
turn
subject of misunder¬
place
we
to
seeking of
the
if
us
tives
or
ently going to cost in the future
directly and indirectly. I shall re¬
to
beset
emphasis
those who are
providing the increasing benefits
—receiving progressively less and
dividing line;
balanced,
has the ascendancy,
are
order
spective
mav
but how
which one
can influence
us mightilv.
The maintenance of
a
proper balance will
influence
our opinions individually and col¬
lectively as a nation, with a re¬
sulting effect upon
our
entire
sharp
no
they
and
the
our
gled in varying prooortions with
en¬
of
the
excessive search for
turn
and
Frontiers
discussion
on
of
expansion. Probably in most of
than
wide
an
turn
can
and
or
The
detriment
citizens,
can
defeatism
the
to
fellow
one
produce evils.
opportunity
license
security
of
excess
an
can
for
search
our
motives
goodyesults, unless a
them
the other
into
two
balance is maintained be¬
proper
tween
these
of
lead to
can
taken of
seems
living.
curity, or the seeking of oppor¬
tunity—for each has its place and
its value
should be recognized.
the
It
present.
criticize
either motive—the seeking of se¬
the welfare
courage
an¬
It is not my purpose to
pretation,
tions for the future.
the
to
and in the standard of
an
illustration of more general
problems. Also, OASI is, I believe,
the most important
single issue in
field, when account is
its far-reaching implica¬
cre¬
heroes from
our
They have stimulated imagina¬
tion,
creativeness and courage.
They have generated some of the
greatest advances in civilization
us
the dangers that may lurk in
par¬
ticular proposals.
The
ated most of
achieve protection
alive
have
such action
centives to
A few basic facts
in
consider
carefully the dangers which
which
the taking of risks to
objective, and the in¬
should
we
tude
hardship; and they
peculiarly
now
history, to
to
used to
from want
are
interest
And
pean
an
well
as
the nation
Preference
circuses
that most of mankind has
by the in¬
centive of opportunity to improve
his lot, even if hp must take some
risks to do so. The pursuit of op¬
portunity,
opportun¬
ism.
hand,
pursue
°ur
other
the
on
of
excess
an
coun¬
eco¬
self-reliant
a
know,
from
of the
resources
been deeply influenced
influnece
measures.
from want.
We
thought to the
o n
become
and to
socialism
adopted to protect the people and
Mankind has al¬
sought some form cf secu¬
rity to a greater .or a lesser de¬
gree.
It is inevitable that man¬
kind always will.
The desire for
security is basically good. It can
breed foresight and the desire to
citizen.
I
entire
our
its
ways
save
like
life in¬
upon
nomic structure.
benefits. How-
many
r.
influence
provide future
ever,
human nature and
again.
be called policing laws were
may
upon
as
Reviews preferences given to municipalities in
Congressional acts, and calls these precedents a trend toward
unsanitary foods and
The accomplishments of
the natural
try
built and tax free, and is also adding to these half
tax
much
period were very great in¬
deed, but various forms of what
rity is something which cannot be
considered apart from its influ¬
ence
taxpayers, Mr. Gadsby points out seriousness of the situation
by indicating Federal Government is now operating and mar¬
keting power from 65 hydro and 11 thermal generating plants,
or
drugs.
power projects as a
few," but paid for by nation's
"Santa Claus to the favored
the
voluntary insurance.
on
Condemning preference clauses in Federal
dominant
measures
terated
reliance placed
more
the
was
as
when
had to be taken
to curb the unbridled pursuit of
opportunity.. We have our anti¬
trust laws, conservation laws and
our
prohibitions against exploit¬
ing child labor and selling adul¬
tages.
if role of government is minimized and
We know that
result of the last century,
a
of
liberalization
excessive
Chairman of the Board and President,
Utah Power and Light Company
time it is well to stop
a
and take stock.
warning against destruction
through
By GEORGE M. GADSBY*
security is in evidence.
President, The Equitable Life Assurance Society of U. S.
Prominent life insurance executive,
In Sale of Federal Power
person¬
Atlantic
City,
,
WHitehall 4-3432
Tele:
NY
1-838
I
I
g
|1
Volume 179
Number 5332
The Commercial and Financial Chronicle
...
(2529)
5
\
Federal
What's Ahead for Germany's
Business and Financet
•,/* »V»
To pick up a
phrase of a quarter century
ago, "Let's look at the
fornia> a™* Nevada shall be given
record."
cants.
Constant
establish
efforts
a
made
are
precedent
to
going back
ing and intent of that Act to the
present-day claims of the public
power
^customers
longs in perpetuity
of
the
and
co-ops
tax-exempt
other
Federal
tax-supported
or
„
ever
a
development
for
necessary
lands,
under
taken
the
"The
rights
covered
by
of
When-
is
power
The
RE A
Act
of
1936
the
lease
irrigation of
project under-,
reclamation
10
project,
Interior
for
the
is
law,
not
giving
years,
municipal
power-producing enactment,
its
the Interior and to be paid for
sions
on
the
terms and conditions
same
stringent,
tax
relate
preference
to
Federal
lar contracts made by said Sec-
funds it
the most
from
its
beginning
This conferred
ther
no
other
the
.
users
bought
with
fur¬
no
discrimination
or
of
group
taxes
American
for the
20% of
some
of
users
elec¬
Harbors Act of
1912
authorized
War,
upon recommendation of the
the
Secretary
of
Chief
of
means
for the future development
Engineers,
ential
treatment
tomers
is
The
of
prefer¬
no
certain
of
Water
contained
preference
by the Fed¬
eral Power Commission to be well
adapted
to
the
utilize
and
conserve
public
interest the water
region. No re¬
the
of
resources
strictions here
tion in the
non-favored
favored
classes
of
cus¬
tomers.
1928
is clean-cut
"(c)
Act
Canyon
and
1%
of water
use
a
drop
of
herein
ments
any,
the
view
a
to
for.
provided
In
of conflicting applications, if
conflicts
such
solved
shall
be
re¬
by the said Secretary, after
hearing, with
due
regard
160,000
from
1,999,000 higher than
61,119,000,
521,000
up
000,000.
reach
flicting
and
applications
licenses,
erence
to
water
record
and
applicants
at
the
first,
generation
pref¬
the
production
far
sq
this
rated
or
a
is
use
The
.
relatively sharp
sumers
Some
pickup
to the fact that
biggest
metal-
If this
rate
placing orders
because
they
either
are
have
If
in
production
hedge
a
of
shall
for
a
be
the
elec-
week
in
typically
sees
the
capture
of;; business
through the intelligent extension
says,
levels;
against
settlement.
a
some
possible
con¬
strike.
expect
or
Some
are
ordering
to
receive
additional
question
is
settled
softening of the
no
market
peaceably,
during
you
the
can
hedges
are
good
a
expect
but
summer,
denying the fact that the market has
strength and vigor than it has had for
after all
more
galvanized sheets.
ment exports;
drop¬
/A. Wilfred May
con¬
the economy, which fol¬
the post-armistice slump:
production rose sensa¬ be paid for to the extent of 25%
by 20% '• between 1948 by the German companies, and the
1953, and stood 45% above: balance by 8-year credits extended
and
and in the same period- to the Indian Government.
agricultural
Re-discounting by the Central
production
jumped
from 79% to 114%
of the 1936 Bank has been of some indirect
basis.
help
in
refinancing
long-term
And
.
great
gains
tional
product
follows:
in
credits
gross
na¬
occurred
have
as
This
and
occurs
other capital exports.
after the exporter has
to his own bank, or to the
Export-Credit Institute in Frank¬
gone
Deutsche Mark
(in Billions)
fort.
79.8
1950
EPU Process
90.3
_
In
113.5
1952
126 6
assessing Germany!s future
fiscal
status, her position with
EPU is most
important. Since June
30, 1953, when Germany's surplus
figures are not adjusted stood at $577 million, it has grown
for
price changes, which were month-by-month until at June 1
moderate
in
1949-50; accounted last it totalled $1,071 million, out
1953
.
133.7
These
for
half
and
the
since
increase
1951
have
in
1950-51;
been
minute.
Since 1949 real wages of indus¬
workers have actually risen
trial
80%, albeit they are still "taking"
goodly portion of austerity.
In the area of foreign trade, an
import surplus of $35 million i:n
1951
into an export surplus
$166 million in 1952, $599 mil¬
grew
lion in
1953, and during the first
of 1954 aTone a surplus
$197 million. Since 1948 Ger¬
quarter
of
exports have increased
The
Central
of March,
as
in foreign-
cur¬
of $2,172 million, of which
rency
$1,340
million
dollars.
reserves
of which
and
Bank
reserves-
in
was
gold
The year before
were
badly
need
that this
Not
Declines
so
at
Solution
dilemma
to
doned
paper
home. It appears
balance constitutes
EPU
an
"anqnymous" basis without the
lender's privilege of picking the'
recipients and the risks.
Thus, under the
EPU
arrange¬
ment, substantial export balances
have gone to Western European
countries.
to
make
sition
The arrangement tends
Germany's creditor po-/
extreme
In
by'freezing her
words, she is,
other
large
credits, at the
amounts
same
of
paper
time that she
is
paying for her import surplus
in
cash
to
the
United
States and
Canada.
talk
by
man-American
New
York
Mr.
May
Chamber
City,
June
before the Ger¬
of
Commerce;
19S4.
It assuredly is vitally important
-
10,
(
Continued
—
We take
pleasure in announcing that
strong but improving are standard
Most other products range from
of
steel
the
this
a
steel
week
week
this
composite price 33c
scrap
million
.the;
on
a
unwelcome export of capital on'
discounted.
prices faltered
increases.
is
an
getting
in gold
in gold and
credit, oWed to Germany by EPU;
freezes capital which the Germans
the total
was
Central
German
books. This"remainder
credits.
dollars.
the
received $485.7
and
only $1,246 million,
$719 million
which
dollars, the other $585.7
remaining • as
a
credit
seven¬
,
1954, had
of
Bank
MR.
spotty
JOSEPH M. KELLY
weak, it reports.
Scrap
of
cur¬
real
months
many
it
Strongest demand is for oil country goods, structural, tinplate
to
example, long-term credits
a
*
wage
adds, there's
long-term credits.
For
be
may
the international situation
worried about
received
of
i
over
fold.
it
and
Germans'
prewar;
*A
the
moderate
even
third
100).
hedge against possible steel price
a
wage
a
defense orders.
a
as
as
resulting from
some
the
since
—
is
of goods
tionally
man
after
lowered
11
consecutive
"The
question
wage
If
consumers.
poses
management
a
weeks
Age"
steel
is
now
in
our
associated
with
us
Trading Department
unwelcome
more
than
„
a
STARKWEATHER & CO.
strike, steel prices will
Steel officials have not aban¬
Members New York Stock Exchange
Associate Members American Stock
be accompanied
Rule of thumb in the past has been 40c
ton price increase for each penny
1
an
gives
their belief that wage cost increases must
by price increases.
Iron
ton to $28.25 per gross ton.
likely be raised accordingly.
its
national
score
business is better; inventories of addi¬
placing orders
are
are
the
scheduled at 73.0%
are
have been whittled to desired
consumers
would
below
-
very
of
to
last week.
industry hasn't operated that high
February.
de¬
purchase
$27,500,-
wide variety
a
industrial
of
points from
up
modest wage increase to forestall
State
was
clearly
a
Age,"
Steelmaking operations
capacity,
attributed
in
44
Iron
very
for
.
i
reform
the
trols
at
$26,800,000,000 rate in
through
for Greece and Turkey. Through¬
out the Middle East the visiior
iSlf
|
;|y
largely
helpful element in capital equip¬
for example in the
prospective building of the 350,000-ton steel plant in India jointly
by the Krupps and Demag. This
huge undertaking in Orissa will
1953.
of $26,900,000,000
expected
"The
states
of
plant,
a
" 4
year.
this week
year,
working weekly.
pace
outlays for all 1954
distribution
switchboard
to
placed
States to
•
•
some
1948
total
below May,
That would be less than 4^%
the
or
539,000
to
for
energy,
hydroelectric
given,
for
necessary
and
hydroelectric
livery
con¬
appurtenant works
privileges
generation
that
the
was
The first quarter gait
$28,400,000,000 spent last
Steel
gain
permits
for
except
and
to
as
leaving
gentlemen will realize,
the
rency
and equipment, the United
The two agencies predicted
$27,200,000,000.
pipe and wire products.
policy expressed in the/
Act
but
yearly
a
the subsequent three months.
the
to
:
-
1949
the quarter ending June 30, and drop
with
Power
month,
Employment
As you
from German industry have been
was
expend¬
itures, they estimate, will set
and
the
previous
earlier.'
April,
over
public interest, and in conformity
Federal
the
year
a
This
States Department of Commerce and the Securities and
Exchange
Commission jointly report, is running below a year ago, but con¬
tinues to provide a sturdy prop under the economy. Such
the revenue require¬
meeting
case
with
Secretary
by
due
The United
States Departments of Commerce and Labor reported that unem¬
and
said
farming and other outdoor activities.
ployment stood at 3,305,000 in the week ended May 8.
steel
price fixed
largest number of increases in continued claims.
while the number of jobholders showed a "substantial
rise,"
will
the
.1
Unemployment continued to decline between April and May,
increases
made
ended
to
achieved since
lowed
claims in the week
Unemployment in automotive, textile and-apparel industries
with re¬
sponsible applicants therefor who
pay
.May^5;ihcreasedr^
the preceding week...Initial
accounted for the
tional
be
M
Ruhr
Stimulus
Exports
know-how; applied to trade rang¬
ing from shirtings for the United
%!>>:
:■■■■:$
gateways
ping of
employment, continued claims for unemployment in¬
May 22 decreased by 8% from the level of the previous week."
privileges for the
generation
and
distribution
of
hydro-electric energy or for the
sale
and
delivery
of electrical
shall
Wednesday of last week from that of
on
benefits in the week «nded
The
necessary
x?
Dussel-
the
and
over
erences.
"Contracts for the
195
>•-
Cologne
industries,
It continued about 10% under the output of a
actually achieved the production index will be 108.3 (1947-49
says:
Applicants for purchase of
pref¬
energy
to
,
As for
of
water and electrical energy;
and
jperiod ended
year ago.
of
Boulder
The
dorf
essential change in over-all industrial produc¬
no
the previous week.
the distribution
on
of the power as between
and
was
Business spending for new plant
Act
Power
a
deemed
were
Index
Production
Business Failures
cus¬
to states and municipalities which
applied for licenses to build their
own
hydro power developments
which
There
mentioned.
even
Federal
1920
provide
to
but
power,
Industry
and
Know-How
accomplished
specific
plus-factors
to increases in
water
Price
Auto
as
of the
free
tricity.
The Rivers and
in the
Trade
Commodity Price Index
Food
and
of free¬
interest—power
the
Retail
The
Germany's export boom has been
,
vividly felt;
for example,
Output
Carloadings
surance
normal
Today's visitor to Germany is,
immediately
struck
country's
tremendous
of
course,
with
the
Production
Electric
State of Trade
for
users
reason
and
exclusive benefit of
all
Steel
The
the
supplying
on
lege of cheap—by
market
46
To cite
benefit of others.
from
page
comeback,
."
.
And that's the precedent claimed
for embalming the special privi¬
dom
on
special privi¬
of citizens.
purposes
one
Continued
e
to
to be used first for
was
restriction
against
was in no
economic
surplus
privilege.
Concludes Germany, in absence of all-out war, should
be able to continue reconstruction of competitive
economy able
to stand on its own feet and meet its
obligations.
program.
Act, the Con-
the
process,
lack of capita] market, and dangers in
foreign trade boom.
Believes convertibility is near, but still dependent on U. K.'s
of
one
vulnerability, including defense factors, EPU
present
iniquitous developments
way
the Boulder Canyon Project has
shown
of
RE A
twisted into
was
exceeding
any
lege on any group
Regardless of who
it
municipal
provi-
in the campaign of preference for
dis-
no
Mr. May first details great progress in industrial and
agricul¬
tural production and in the international trade
sector, following
the return to free economy in 1948. Then cites elements of
Later, by ultra-legal
money.
retary.
a
and
loans
as may be provided 1x1 other simi+ mis-appropriations f rom
to
preference
purposes,
power or power
power,
By A. WILFRED MAY*
not
after notlce by the Secretary of
Secretary
authorized
period
a
is
the
any
said
such
any
precedent,
by such State within six months
opportunity is afforded for
development of power under
of
of
a
Norman Thomas said, "The
as
fairest flower of Socialism."
such
preference shall be contracted for
an
the
in
jt embalmed not
as
but
This language contains
.
"Lease of Water Power.
of
such appli-
as
origjmalArteo?1902?^aid:ing crimination among consumers and the few.
However, this
the fault of the
the
or
cqua' opportunity
We'll pass the TVA Act of 1933 '
of additional wage cost.
Continued
111
per
Price
on page
50
Jnne 10, 1954
Exchange
Broadway, New .York 6
on
page
57
6
The Commercial and Financial Chronicle
(2530)
and
Interest Rates Recover in 1954?
Will Business Activity
GORDON W. MeKINLEY*
By DR.
of America
Prudential Insurance Company
Chief Economist,
what has happened and is happening
After calling attention to
phere will be
is
of
interest rates for remainder
today
two
on
adjustment.
could
be
Total
consumer
though not unrelated,
topics.
First, What's Going (to
Happen to General Business Ac¬
tivity
During
separate,
the
of
Rest
These
vital
is not
this
call it
a
of these words has an
none
meaning
sion
associatio
guess
ns
In
what
the
these
services
two
the
of
not
There
Gordon W.
McKiniey
vol¬
of
your
business establish¬
few
are
but the
business.
business
your
profitability
ments in the United
States which
remain prosperous if the gen¬
can
eral
not remain
savings and loan
associations particularly
are
af¬
fected by the important question
does
economy
and
prosperous,
of interest rates.
Before
of
we
what's
business
during
happen
to
the
rest
of
in
clearly
get
what
and
a
to
subject
be
An
a
is
to
the
mind
happening
words
*An
116th
which there
on
great
almost
deal
to
address
Annual
by
variety
describe
to
Dr.
seems
confusion.
of
endless
used
are
McKiniey
Convention
of
the
the
at
of the National
Savings and Loan League, New Orleans,
La., May 11, 1954. The views expressed
by Dr. McKiniey are his own and not
necessarily those of any organization.
are
lay the
intelligent
1953,
and
goods
of all
the
in
States—
United
national
product
annual
an
Since
of
rate
then, GNP has declined
but steadily until in the
slowly
first quarter of
to
running at
$371 billion.
was
billion.
$359
the total
services
1953 it had fallen
In others words,
production of goods and
in
fallen in
the
United
States has
the past nine months by
over
3%.
did
business
been
which
activity,
humming
Why
had
is that total consumer
at
now
ent
to
spending is
all-time high. The pres¬
an
dip is most certainly not due
in
fall
a
spending by ultimate
i
consumers,
Causes
Again the answer is
expenditures
on
plant and equipment
are,like
consumer
expenditures, approxi¬
mately equal to the high' point
equipment?
Business
no.
reached
couraging
business
scurried
the
at
a
activity in the United
States depends on
booms.
ness
of
spending. If we
spending,
If spending
business
declines, busi¬
activity declines.
There
are
of
course
of
spending in the United States.
lots
is
business
in the- present
There was a
business
of
different
government
spending
agent of New York State ThruWay
'
kinds
on
spending,
plant
and
happy to
men
who have faith in
and
that
faith
are
with
equipment
which
housing?
I
.
$225,000,000 General Revenue Bonds, Series A, due July 1, 1994.
subject to redemption by the Authority, prior
any
time
on
certain terms and conditions, including
specified redemption prices.
able at Bank of the Manhattan
Act and resolutions
cial Form of
pay¬
Company, New York City.
authorizing the bonds, Official Statement, Offi¬
Proposal, Notice of Sale, and forms of opinions will be
furnished upon application to Bank of the Manhattan
Company,
Trustee, 40 Wall Street, New York, N. Y.
J. RAYMOND McGOVERN, State Comptroller, Albany 1, N. Y.
Dated: June 9, 1954
this is
timate
During other periods, however,
buy more raw mate¬
businesses
rials and semimanufactured
their
need
to
suppliers
that I
don't
rises above
mate
As
dorse.
is
willing
result
a
to
this
of
en¬
inven¬
accumulation, we therefore
period when 1otab business
tory
have
a
activity is maintained at artifi¬
cially" high levels and the econ¬
appears
it
prosperous
more
actually ism This
first
the
ness
half
of
busi¬
1953
accumulating inventories
was
the rate of about $5.5 billion a
at
In other words, it was add¬
year.
ing $5.5 billion of its own spend¬
addition
such spending as was needed
satisfy consumer orders. Such
ing
accumulation
of
to
to
could
inventory
course,
inventories
rising
were
at
an
began in the last
the year to cut back this
alarming
of
rate,
Bv the fourth
quarter of 1953, business not only
had ceased accumulating
inven¬
tories but was actually reducing
of snending.
tvpe
This
inventories.
sort of
therefore
was
a
negative spending. Instead
along the full volume
consumer orders, business was
passing
living off exiting inventories. As
result,
a
of
bp^is
which
level
the
have
would
activity
business
total
below
declined
one
expected
the
on
them¬
orders
consumer
selves.
In
accentuated.
been
and
the
in this way that our eco¬
nomic system can remain flexible
only
and
responsive
total
have
1954
over a
million
expenditures
residential
a
on
been
year,
non-
construction
first quarter were
almost
in
ex¬
at
of
rate
a
Since
the
billion
$4.5
1953,
of
middle
a
year.
inven¬
tory spending has therefore shift¬
from
ed
billion
$5
plus
a
to
a
$4.5 billion.
This has
meant that $9.5 billion has been
subtracted
from
total
spending
negative
and therefore from our total pro¬
therefore
been
not
activity
due
to
a
of
duction
When
we
goods
add
to
services.
and
this
decline
the
decline in consumer expenditures,
nor
to
a
decline
in
business
$2.5 billion decline in government
spending
total
to
plant and equipment,
on
decline in
a
housing
expen¬
spending
segments
in
the
government spending
—
business
spending on inven¬
glance at the figures
shows very clearly that these two
spending segments are in fact the
culprits. The total decline in gross
natiohal product is just equal to
the
A
total
decline
in
government
spending and in business spending
inventory.
■
■
on
Spending
ernment
from
of
has
Federal
Gov¬
declined
the peak
local
the
$5 billion
rate of 1953. State
government
expendi¬
risen by
tures,
however,
have
$2.5
billion.
Total
government
spending
has
on
therefore
since the
goods
fallen
and
$2.5
high point of
Business spending on
requires
a
services
billion
1953.
inventory
good deal of explana¬
tion, not only because it has been
the principal cause of the present
business dip but because its rela¬
tion to gross national product is
sometimes misunderstood.
spending,
decline
in gross
The
end
we
of
with
up
the
$12 billion
about
national product.
decline
in
total
changing
the
to
wishes of the consumer.
About
What
What
Now
1954?
rest
the
of
inventory
an
adjustment, when will it be com¬
pleted? What is likely to happen
to each of the major spending seg¬
ments in our economy in the next
eight months? Let's take them up
briefly one at a time, and if you
will note my conclusion with re¬
spect to each separate segment,
we
can
total them all up to see
what is likely to happen to
activity
ness
busi¬
whole.
as a
First: Business Expenditures on
and
Plant
McGraw
Equipment.
Hill
-
The
latest
indicates
survey
businessmen .plqn^to
that
spend-
plant and equipment in the re¬
mainder of 1954 at about the same
on
rate they are now
spending. I
must count
of
rate
decline of at least
on a
billion
am
I think we
slightly less optimistic.
annual
the
in
dollars
in this sector.
type of spending by itself
will therefore tend to pull down
total business
activity- a billion
dollars below its present level.
spending
This
Second:
the
Spending
If
Homes.
on
housing bill at present being
considered by Congress is passed,
the current rate of housing starts
be
can
maintained
of the year.
the
for
rest
An increase in fixup
work should offset any decline in
home
prices, so that total spend¬
homes will remain at about
present high level. The hous¬
ing sector will thus continue to
contribute
its
present force to
ing
on
its
total business
tend
to
ness
activity.
raise
Third:
activity but will not
Government
spending
busi¬
lower total
or
further
Any
Spending.
decline
in
Federal
the remainder of
will be minor, and will,
over
believe, be entirely offset by
continued
rise
in
state
spending
to
cease
exercise
a
local
and
spending.
government
ment
Govern¬
will
therefore
the
downward
has exerted on the econ¬
the past nine months.
the other hand, it will
be
rising, i+ will not con¬
pull it
in
omy
Since,
not
on
tribute to any change in the pres¬
ent level of business activity.
Fourth:
believe
major
Inventory
that
we
Spending.
I
expect
a
can
influence
upward
business will start to
cause
the
on
from this sector, not be¬
economy
business
is
1954?
of
Rest
about
this
If
this year
in
A
perspective.
of
sense
our
I
thus far
present
must be prepared to
endure adjustments, even though
individual areas are hurt.
It is
quarter of 1954 this
run-down of inventories has con¬
tinued
lose
one
an
be maintained.
suddenly realizing that
hot,
of
Business,
half
in
inventory,
on
to
situation' as a
mere
adjustment.
On the other
hand, it is important that we not
is what
happened in the first half of 1953.
In
difficult
it
find
will
orders
view
are
level which the ulti¬
a
consumer
particularly hard hit. I know that
of you who come from com¬
munities whose principal industry
has taken a heavy reduction in
some
the first three months of this year
starts
audience
cus¬
building up inventories. They are
not
simply
passing
along
the
spending of the consumers; they
are adding to that spending some
spending of their own.
The re¬
sult of this additional spending is
that business activity as a whole
In the first
on
goods
they
than
satisfy the orders of
In
this
case
they
tomers.
on
mining, steel production, or
automobile assembly, have been
free economy
consumer.
from
heavily
depend
which
areas
coal
total business inventories declined
and
Principal and semi-annual interest, January 1 and July 1,
When
inventory adjustment, I do
to minimize the real
mean
hardship which has come to some
communities.
Those
cities
and
that
tory.,
and
in part at
this
tell
to
and
July 1, 1954. $75,000,000 General Revenue Bonds, Series A,
or
capital
has
sure
es¬
hand
one
not
Thursday, June 10, 1954
.
housing is holding up at an amaz¬
ingly high level. Private housing
major
Bonds, Series A
whole
tremen¬
expenditures
am
the
on
happening,
business at
various
of production are simply
passing along the orders of the ul¬
prosperous economy.
about
is
stages
of
ditures. This leaves only two other
Thruway Authority
as a
econ¬
whole
What
are
establishments.
ness
Business
in
States
replenishing inventories by buy¬
ing raw materials and semimanu¬
factured goods from other busi¬
of
the
all
using up inventories as they sup¬
ply the orders of their customers.
But they are on the other hand
up
The decline in business
serially in various amounts from 1964 to 1979, both inclusive,
upon
—
character¬
postwar period—
and by doing so, business is con¬
tributing its part to a stable and
the
ized
has
due
July 1, 1960,
dollars.
continuing
is
our
willing to back
investment
economy
respective maturities,
Today I am
have a dif¬
we
businessmen
of
1953.
on
$300,000,000
The Bonds will be
that
say
omy
nor
General Revenue
at
an
actly equal to the first quarter of
Authority;
Albany, New York
cellar
storm
of
breed
ferent
the
(Eastern Daylight-Saving Time)
New York State
the
sign
have
would
ing and thus brought on the very
need
There
factors
picture.
adjustment,
and in doing so they would have
cut back their capital goods spend¬
dous
lots
of the most en¬
for
first
1953
of
one
when
time
middle
the
in
This to rhe is
United
an
as
wh,en
During such periods business
tablishments
than
dip, then, due to a decline
in business spending on plant and
today
have
Decline
Is the
cline?
Business
Business
of
the
in
Inventories
holding inventory fairly constant.
omy
phe¬
middle
of 1953, suddenly reverse direc¬
tion and go into this gentle de¬
ahead
nomenal pace up until the
June 16,1954, at 10:00 o'clock A. M.
and after
on
durable goods
on
recession they feared.
What caused this decline?
Comptroller of the State of New York
will sell at his office at
to their
more
The important point to remember
farm
Dated
spending
now
running at
as
have
consumers
services and less
and
The
that
true
shifted the type of their spending.
They
to
product — reached an alltime peak.
In that quarter, gross
business. Surprisingly enough, this
is
production
slightly
what has been happening to busi¬
ness
but
a more
tional
get into the question
going
let's
year,
not
us
what economists call the gross na¬
will de-
only
help
to the future.
second quarter of
as
the
happens in
ume
will
few facts
a
in
sav¬
termine
is
in
periods
are
business
on
only to put the present situation
perspective
groundwork for
areas
would
it
that
so
impossible
ings and loan
because
that
say
to prove exactly
which of them is appropriate. But
I do think that in all this confu¬
be
expenditures
Still others than in 1953. But such shifts in
a dip, a decline, a contrac¬
consumer spending are always go¬
correction, a depression.
ing on in our flexible economy.
Now
are
to
we
say
Reduction
There
truth.
quarter of 1954 were higher than
in the first quarter of 1953.
but an in¬
recession
a
the
further from
adjustment.
ventory
tion,
two
questions
a
exact
Rates?
est
in
are
the Year? Sec¬
ond, What's
Going to Hap¬
pen to Inter-
Some
recession; others
nothing
Yet
goods and services are now run¬
ning at a level equal to the high¬
est point reached in
1953. Con¬
sumer
expenditures in the first
year.
situation.
present
and
rent
It
laik
to
want
sales of
lower
of
spending that has de¬
brought on the cur¬
consumer
clined
government securities
I
accounts
apparel, and other
selected consumer goods, I think
our first
answer might .be that it
favorable one. Points out interest rates on
control other rates, and forecasts low
a
spending has declined in the
past year? Which of them is re¬
sponsible for the fall in business
activity?
If we had to rely solely on pub¬
automobiles,
general business atmos¬
will increase spending, and
consumers
of
lished
holds there is considerable
confusion, Dr. McKiniey finds recent dip in business activity
due to some reduction in government spending, but mainly
to the cutting down of inventories.
Finds as supporting fac¬
tors checking the business dip:
(1) spending on plant and
equipment; (2) home building; (3) continued government
spending; and (4) renewed inventory accumulation. Predicts
business, regarding which, he
to
equipment, spending for the pur¬
chase of homes, consumer spend¬
ing, and finally, business spending
on
inventory.
The question is,
Which
of
these
different
types
...
accu¬
mulate
tory adjustment.
inventories, but because
inventory liquidation.
As
I
have
pointed out earlier,
the.major factor in the decline in
of
business
activity which has occurred since
the
middle
of
1953
is
therefore
inven¬
Of the total fall
$12 billion in gross national
product, $9.5 billion has been due
correctly
to
a
described
as
an
reduction in inventory spend¬
it will
the
cease
since
shift
tory
from
last year
ing, the remaining $2.5 billion be¬
ventory liquidation.
accounted for by the fall in
expenditures.
The
amazing thing about the present
business picture — and the thing
which seems to me very s'gnifi-
the
ing
government
cant
for
the future—is
that, dur¬
ing all this adjustment, there has
been
no
reduction
in
consumer
reduction in business
spending on plant and equipment,
and no reduction in spending on
homes. These important spending
segments — accounting for almost
80% of the total production
of
spending,
no
goods and services in the United
States
have continued steadily
—
along refusing to be panicked into
a
.
pessimistic contraction.
In describing the present
to
of
one
inventory adjustment is
about
completed.
in¬
I believe that
now
Inventories
at
the retail level in most industries
are
already
down
satisfactory
to
levels. The ratio of inventories to
sales
for
example,
low the
1953.
department stores, for
has been cut down be¬
level
adjustment
way
is
at the
beginning of
In many lines the inventorjr
has
carried
all
the
back to the manufacturer. It
therefore
my
feeling that total
business inventories in the United
States will remain for the rest of
the
year
level
that
at
approximately the
have reached in
May.
they
the month, of
Since there will be
dip
(has been
policy of inven¬
a
accumulation
lation
of
inventories,
no
accumu¬
this
factor
\
'
'
■
1
.
Number 5332
Volume 179
will not
exert
.'
•
.
upward effect
But it
any
important to note that the $4.5
is
billion downward influence which
exerted
was
by
quarter
first
the
in
be
liquidation will
inventory
•
than
Finally, what is likely to hap¬
pen to
consumer buying
during
I .believe
1954?
;
•
,
You
also
you
get
on
to
which
you
rates
business,
other
variations
yield that you
and
interest
in
to
year
consumers
were
record.
edly partly motivated by
caution
er
sav¬
of the highest rates mi
This saving was undoubt¬
one
consum¬
the face of the
in
un¬
certain business situation. The up¬
turn in
business which is already
underway will I believe, build
confidence,
consumer
will return to
tribution
of
a
normal dis¬
more
their
up
that they
so
be¬
incomes
tween
saving and spending. This
fact alone will add $2 billion to
consumer
spending.
Gradually
rising employment will account
for the
characteristics
host
of
differences. in
which
add
together
into
loose
a
bundle,
together.
tion
of
The
for
this
interest
and
principal
rates
borrowers,
tive
so
This
announcement
in
This
pay
borrow
Interest
the
United
rates
is the rate
from
end
no
the
of
prime commercial bank rate.
Only
a very long and wide move¬
ment in the rest of the market will
cor¬
to
move
away
-rates,,
rates, we
sticky, slow-moving
rate
spectrum.
Here
a
change in
■
of
rates which
are
there
in
the
can
flexible
find
the mortgage loan
rate, all in the sticky rates. We fre¬
prime commercial bank rate, quently have government securi¬
and, finally, perhaps stickiest of ties moving
up and down with no
all, the consumer loan rate.
apparent effect on mortgage loan
-When an over-ajl movement in
we
is
the
Federal
interest
wiil notice if
ment
rates
is
of
rates.
begins,
course
the
first
This is because
move¬
Continued
reflected
the
on
on
New Issue
billion
one
dollars; there will
probably be no change in total
expenditures on homes; govern¬
ment spending will also remain
constant
local
because rising state
government
will offset
eral
$38,500,000
and
expenditures
minor decline in Fed^-
a
Commonwealth of Kentucky
Government': expenditures;
inventory spending
will have an
upward effect of about $4 billion
not
because
tories
but
of
a
rise
in
inven¬
of
the
cessa¬
because
3.40%
Turnpike Revenue Bonds (Series 1954)
tion of
inventory liquidation; and
finally consumer spending will
rise by about $4 billion.
When
we
add up the chan0^
spending segments, they total a
plus, $7 billion. This means that
total
Payable solely from Revenues
Dated
activity at the end
should be running at
an
annual rate $7 billion above
the first quarter of this year.
If
at
year
these
rect,
the
estimates
prove
a
prior to maturity, on 30 days published notice, either in whole on any date beginning July 1, 1960, to and including June 30, 1962
price of 104, and at diminishing prices thereafter from any moneys made available for such purpose, or in part (by lot) on any interest paydate beginning
inning July 1, 1958, to and including June 30, I960 at a price of 103, and at diminishing prices thereafter by operation of the
Sinking Fund, all as set forth in the Official Statement.
ment
Principal and semi-annual interest (January 1 and July 1) payable at Lincoln Bank and Trust Company, in Louisville, Ky.,
Continental Illinois National Bank and Trust Company of Chicago, in Chicago, III,, .or at Chemical Bank & Trust Company,
in the Borough of Manhattan, City and State of New York, at the option
of the holder. Coupon bonds in $1,000
denomination, registrable as to principal alone or as to both principal and interest. Fully registered
bonds are reconvertible into coupon bonds as provided in the Agreement.
cor¬
national
gross
product
in the last quarter of 1954 should
be around $366 billion.
The
aver¬
age for the year as a whole will
be about $362 billion.
In other
Interest exempt, in the opinion of Bond Counsel, from all present Federal Income
under the Existing Statute and Court Decisions
words,
my forecast for 1954 as a
whole is that total business activ¬
ity will
be between 1% and 2%
below the record year 1953. I be¬
lieve it will be about 4% above
the very prosperous year
July 1, 1994
Redeemable
business
the
of
Due
July 1, 1954
The Enabling Act
made
on
or
at
Taxes
provides that the bonds, their transfer and the income therefrom (including any profit
thereof) are exempt from taxation within the Commonwealth of Kentucky
the sale
The
Department of Highways, as an agency of the Commonwealth of Kentucky, is authorized by the Enabling Act
turnpike projects at such locations within the Commonwealth as may be approved by the Governor.
These bonds are to be issued for the purpose of paying the cost of the Initial Turnpike (Louisville to Fiizabethtown),
and are to be issued under and secured by a Trust Agreement, dated as of July 1, 1954, between the Department and
Citizens Fidelity Bank and Trust Company, Louisville, Kentucky, as Trustee, and are to be payable solely from
revenues.
The Trust Agreement provides for the issuance of additional bonds under the conditions and limitations
1952.
to construct
The
Question of Interest
The
general
Rates
business
atmos¬
phere in which you will be oper¬
ating for the rest of the year will
therefore, in my opinion, be a
favorable
one.
terest rates?
But what about in¬
charge
the
on
referred
as
to
therein.
|
What about the price
which you are going to be able to
money
Under the
lend
you
provisions of the Agreement, the Principal and Interest Requirements (as defined in the Agreement)
interested
for each fiscal year are a charge on.the tolls and other revenues prior to the costs of maintenance, repair and operation,
and if such tolls and revenues in any fiscal year are not sufficient for all such purposes, the Department covenants to
advance from moneys other than such tolls and revenues such amount as may be necessary to provide for paying
the
such
out?
The rate in which all of you are
is of course primarily
mortgage loan rate, and
it
might therefore seem logical that
I
after
should
immediately begin talk¬
ing about housing and the supply
of maintenance, repair and operation, the amount so advanced to. be reimbursed in subsequent fiscal
meeting all current Principal and Interest Requirements and certain reserves.
costs
,
years
,
and demand
for home mortgages.
unfortunately the problem is
But
not
so
may
simple.
have
As
heard
many
me
of
you
in
the
say
Price 100 and accrued interest
past, the mortgage loan rate is
really
not
determined
in
the
mortgage
is
loan
market
determined,
rates in the
like
United
all.
at
all
These bonds
arc offeredfor delivery when, as and if issued and received by us and subject to the approval of legality by Messrs. Mitchell and
Pershing, New York City, Bond Counsel to the Department of Highways. It is expected that' bonds in definitive form will be
available for delivery on or about July 1,1954. Copies of the Official Statement may be obtained in any State from
only such of the underwriters, including the undersigned, as may legally offer these Bonds in such State.
It
interest
States, in the
government securities market.
It
is for this reason that I think all
savings
and
loan
executives
should follow developments in the
government
securities
market
closely, even though you may not
be planning any extensive invest¬
I
The First Boston
Harriman Ripley & Co.
Blyth & Co., Inc.
Smith, Barney & Co.
Corporation
Incorporated
Kidder, Peabody & Co.
Equitable Securities Corporation
Merrill Lynch, Pierce, Fenner & Beane
Goldman, Sachs & Co.
ments in that market.
Let me enlarge a little on this
point and show you just how it is
that
the
market
government
determines
securities
the
yield
which you get on mortgages.
As
all of you know, there is not
just
one price for
money in the United
Phelps, Fenn & Co.
The Bankers Bond Co.
/
but
a
whole
array
of
prices; there is not just one in¬
terest rate, but a whole spectrum
of
interest
rates.
In
your
-
First of
J. J. B. Milliard & Son
•'
B. J. Van Ingen & Co. Inc.
John Nuveen & Co.
f
W. E. Hutton & Co.
Bacon, Stevenson & Co.
|
White, Weld & Co.
Paine, Webber, Jackson & Curtis
(Incorporated)
'
R. S. Dickson & Company
•
Estabrook & Co.
Incorporated
Michigan Corporation
Stein Bros. & Boyce
Byrne and Phelps
Courts & Co.
Goodbody & Co.
W. L. Lyons & Co.
Incorporated
McDonald & Company
busi¬
for example, you find that
mortgage lean rates are typically
ness
Alex. Brown & Sons
-Incorporated
Almstedt Brothers
States,
Shields & Company
R. W. Pressprich & Co.
June
10, 1954.
R. II. Moulton & Company
Rand & Co.
The Robinson-Humphrey Company, Inc.
move-
page
as an offering
of these Bonds for sale or as a solicitation of an offer to buy any of thest
behalf of only such of the underwriters, including the undersigned, as may legally offer
such State. The offer of these Bonds is made only by means of the Official Statement.
State
•„/
be
reflected at
never
circumstances to be construed
any
loan
'
course
movements
many
consumer
■
Now
sensitive
the
to
come
than
that bank¬
the
at
You
these
the
the
cause
porate bonds.
As
we
begin
to each other when they
balances
acceptance rate, and
different kinds of
on
long enough, changes will finally
occur in
mortgage loan rates, and
sensitive, but
flexible, are
paper
rate, the
quite
commercial
bankers
think
States
mercial paper, and corporate bond
rates. If the movement continues
Still less
nevertheless
the
to
flexible
and
Reserve Bank.
these Bonds in
major spending segments. Busi¬
ness capital
spending may decline
Various
Probably the most sensi¬
rate
rate.
ers
from
is under
sensitive
Bonds, and is published hi
the changes
in these, five
in
what is called the Federal Funds
lenders,
move
Next in line of
sensitivity comes
Treasury bill rate. And after
that the rates on all government
the
each
to
a
others.
explana¬
that
is
can
closer
therefore correct
is
more
movement
common
to
that the
spectrum, or bundle, of rates
moving up and down together.
But while rates generally move in
the same direction, some are much
that generally they tend to move
up
expect
we
of
bound
or
forced
are
move
so
Rates
It
se¬
different
related
are
to
securities.
Although ther^ are therefore
many different interest rates, all
interest rates
tend
yield security,
Fluctuations
whole
a
follow this rate in the paper •in the sensitive
end of the spec¬
day, that it often fluctuates trum. The
yields on Federal Funds,
violently from as little as %' %
Treasury bills and other govern¬
up to lJ/a%.
This rate therefore
ment securities will
perhaps begin
tells us the day to
day variation to move
upward. More slowly will
in the very short term market.
follow bankers acceptance, com¬
each
other.
types of loans.
\
let's
the
of
curity, and according to
remaining $2 billion.
Now
rates
rates.
risk, and
according to term, and according
borrowers
7
you
certain type of loan get
a
high relative to other types
loans, then lenders tend to
to the high yield security
the low
different
these
Rates vary according to
tax
on
move
experience in
there are many
your
type of security to another. If
very
mortgages.
addition
(2531)
of
very
above the present level. It should
be noted that in the first quart-*
ing at
.
rates
that
is
governments
from the
that by the end of 1954 consumers
will be buying at a rate $4 billion
of this
I
one
East.
the
and
find that the yield
on
different
get
North
the
in
In
of
-
higher in the West and the South
removed.
the remainder
;
...
The Commercial and Financial Chronicle
.
.
business activity.
total
on
.
G. H. Walker & Co.
53
8
The Commercial and Financial
(2532)
Department, Virginia Electric and Power Co., Richmond 9,
Virginia.
World
Recommendations & Literature
understood that
is
firms mentioned
the
the
Salt
Lake
Best's
area
and
Chase
recommendations—JosephCo., 120 Broadway, New York 5, N. Y.
Earnings
of
Performance
Stocks—In
For Japanese
current
Weekly Stock Bulletin—The Nikko Securities Co. Ltd.,
Electric
Utilities
studies
—Carl
M.
Natural
and
electric
95
on
Gas
Plastics
&
Loeb, Rnoades & Co., 42 Wall Street, New York
5, N. Y.
Corporation of America.
Gustin
Bacon
Madison
&
Avenue, New York
Casualty
Insurance
Earnings—Annual
tion
City Bank Stock Price Ratios.
Materials-Handling Equipment—Analysis with particular ref¬
Devonshire
N. Y.
Wall
New
Hutton
F.
Also in the
Gas
same
Industrial
—
Staff, New Orleans
Street, New Orleans, La.
York
&
Co.,
Oswego
City Bank
Stocks
Nuclear Power and American
Information
Public
—
Service
Inc.,
317
Underwood
New
Electric
Gas
&
and
Haigney
Co.,
&
&
Industry—Study—Smith, Barney
a
Corp., 62 Henry Street,
Corporation—Card
Ill
memorandum—Aetna
Club of Los
field
day
Country Club.
June 11, 1954
Municipal
at
Angeles an¬
the Wilshire
(New York City)
Bond
Club
of
New
York 21st annual outing at West¬
chester Country Club and Beach
Club, Rye, N. Y.
11, 1954
(Philadelphia, Pa.)
Investment Traders Association
of Philadelphia summer outing at
Whitemarsh
June
Country Club, White-
16-17, 1954
(Minneapolis,
Minn.)
Twin City Bond Club annual
picnic cocktail party, Hotel Nicol¬
June 16; field day and golf
tournament, White Bear Yacht
Club, June 17.
June
Secu¬
Broadway, New York 6, N. Y.
—
Report
—
Lerner & Co., 10 Post
17,
1954
(Minneapolis,
5, N. Y.
Pacific
Coal
In the
Oil
&
same
Wall
Webb
&
F.
W.
as
and
Great
Northern
data
Iron
on
Michigan, Indiana, Ohio, West Virginia, Vir¬
ginia, Kentucky and Tennessee—With eight-color map show¬
ing power lines and natural resources—American Gas and
Investors Beacon—Nomura Securities
Co., Ltd., 61
New York 6, N. Y.
Also in the same issue are
Broadway,
analyses of
the Electric Wire and Cable Industry and
Spinning Industry
and discussions of Investment Trusts in
Japanese Economy
and current foreign trade.
Bond
(New Jersey)
Club
of New
Jersey
an¬
&
Co.,
25
Broad
Street,
Club, West Orange, N. J.
4, N. Y.
June 18, 1954 (New York City)
Corp.—Memorandum—Eastman, Dil¬
Lines—^Special review—$2—John H. Lewis & Co.,
Street, New York 5, N. Y.
Knapp—Analysis—Kalb, Voorhis
&
"Syndicats"
5th
anniversary
outing at
the
Echo Lake
Country Club, Westfield, N. J.
and
Co.,
25
June
Broad
24, 1954
Boston
Woolworth
Co.—Memorandum—Herzfeld
Street, New York 4, N. Y.
&
Stern,
30
the
(Boston, Mass.)
Securities
sociation
35th
South
Traders
annual
Shore
As¬
outing
Country
at
Club,
Hingham, Mass.
June
(Cincinnati, O.)
24-25, 1954
Cincinnati
ers
Municipal Bond Deal-,
Spring party.
June 25, 1954 (New York City)
NSTA
Notes
Municipal
New
of
Rock
N.
30 Church Street, New York 8, N. Y.
Pulp Industry in Japan—Analysis in current issue of Nomura's
June 18, 1954
Ore
to
Y.
—
Hotel.
also
are
Co., 15 Broad Street, New York 5, N. Y.
United Air
Club
nual field day at the Rock Spring
New York
&
Club 33rd an¬
White Bear Yacht
preceded by a cocktail
June
16
at
the
Nicollet
outing
Co., 36 Wall Street,
bulletin
Properties.
lon
Twin City Bond
nual
party
13-year period —
Front
Street, New
Sites—In
Electric Co.,
nual
let
report
Street, New York 4, N. Y.
market performance over
Quotation Bureau, Inc., 46
N.
(Chicago, 111.)
Analysts Society of
Chicago annual meeting.
r
June 11,1954 (Los Angeles, Calif.)
marsh, Pa.
Corporation—Annual
Corporation—Data—Bache &
York
Texas
63
—
in( the National Quotation Bureau Averages, both
4,
50
i
showing1 an up-to-date com¬
parison between the listed industrial stocks used in the DowJones Averages and the 35 over-the-counter industrial stocks
York
& Co.,
Office Square, Boston 9, Mass.
Over-the-Counter Index—Folder
Plant
State
Corp.,
Broad
National
Gas
&
Snap-on-Tools Corporation
Industrial
Co., 14 Wall Street, New York 5, N. Y.
yield
York
Falls
rities
14
Analysis — Laird, Bissell
Meeds, 120 Broadway, New York 5, N. Y.
used
Electric
Union Carbide & Carbon
Resources
Development
&
State
Convention at
Investment
June
Company—Report—Loewi & Co., 225
Street, Milwaukee 2, Wis.
Unilever—Circular—Oppenheimer
Upham
Street, New York 5, N. Y.
Baronne
Inc.(,
Street, Boston 10, Mass.
ten-year financial and operating statistical supplement
—New
Co., 61 Broadway, New York 6,
bulletion is a list of long-term divi¬
Industry—Analysis—Harris,
Orleans
New
Memorandum—Hemphill,
Pacific
York
and
&
with good returns.
payers
Natural
—
England Lime Co.—Analysis—Dayton
Inc., 75 Federal Street, Boston 10, Mass.
New
June 10, 1954
Bond
Chemicals—Memorandum—Kidder, Peabody
New
to Yale & Towne Manufacturing Co. and Clark Equip¬
Co.—E.
dend
&
Canada Annual
of
Minn.)
Price
Investment Opportunities in Japan—Circular—Yamaichi Secu¬
rities Co., Ltd., Ill Broadway, New York 7, N. Y.
ment
52
Binghamton, N. Y.
Stock
of New York
erence
Brothers,
Nekoosa-Edwards Paper
Power & Light Company,
Development Service, P. O. Box 3100, Miami 32,
Ratios—Tabulation—Geyer & Co., Inc.,
Wall Street, New York 5, N. Y. Also available is a tabula¬
63
Vickers
—
Railroad—Memorandum—Dreyfus
Broadway, New York 4, N. Y.
Florida.
Insurance
Analysis
1954 (Canada)
&
Hycon—Literature—Singer, Bean & Mackie, Inc., 40 Exchange
Place, New York 5, N. Y.
Resources—Data—Florida
Industrial
—
Hey wood-Wakefield Company—Analysis—May & Gannon,
Comparison—
Laird, Bissell & Meeds, 120 Broadway, New York 5, N. Y.
Florida's
Company
Manufacturing Co.
East Mason
Fire
Hammill
Noyes & Co., 15 Broad Street, New York 5, N. Y.
Statistics—Booklet—General
Telephone System, 260
17, N. Y.
Field
Jasper Park Lodge.
Corporation—Survey—Ross, Lyon & Co., 487
Broadway, New York 13, N. Y.
Missouri
Electronics—Analysis—Thomson & McKinnon, 11 Wall Street,
New York 5, N. Y.
Also available is an analysis of Radio
Financial
Also available
Co., 17 Wall Street, New York 5, N. Y.
161
companies
gas
Investment
Investment Dealers' Association
Street, New York 5, N. Y.
Companies—Comparative
utilities arid 30 natural
&
Fruehauf Trailer
issue
4, 1-chome, Marunouchi, Chiyoda-ku, Tokyo, Japan.
In
•
»
Company—Analysis—Kalman
Co.—Memorandum—Shearson,
Chemical
Durez
Current Recommendations—Switch
&
>
Derrick
U. S. Pipe & Foundry.'
Wall
Stocks—Obtainable
EVENTS
&
Co., 14 Wall Street, New York 5, N. Y. Also available are
memoranda on Butler Brothers, Central & Southwest Corp.
O. Box 899,
through Geyer
& Co., Inc., 63 Wall Street, New York 5, N. Y. at bulk price
of $8.09 (regular list price $10.09).
thai
&
Cork
Armstrong
City 10, Utah.
Digest of Insurance
Hoist
Co., Inc., Endicott Building, St. Paul 1, Minn.
is an analysis of Minneapolis Gas Company.
Utah-Wyoming-Colorado
—Department M, Utah Power & Light Co., P.
1950-1954—Lamborn
June 9-12,
American
Street, New York 5, N. Y.
Area Resources—Booklet on
Prices—Chart for
Sugar
*
will he pleased
Stocks—Bulletin—Cohu & Co., 1 Wall
Aircraft Manufacturing
Raw
Co., Inc., 99 Wall Street, New York 5, N. Y.
the following literature:
send interested parties
to
COMING
#
Virginia Industrial Resources—Information—Area Development
Dealer-Broker Investment
It
5, N. Y.
Thursday, June 10, 1954
..
.
Wall Street,
Rail Stocks—Bulletin—Francis I. du Pont & Co., 1
New York
Chronicle
Bondwomen's
York
Spring Club,
The Boston Securities Traders Association
Thursday, June '24.
The day's
activities
28th
will
Annual Outing at the South Shore
Country Club,
on
Bond
SECURITIES TRADERS ASSOCIATION
hold
its
35th
Hingham, Mass.,
will
consist
of
swimming, soft ball, etc., and will begin approximately at
golf,
noon.
Dinner will be at 7:30 p.m.
outing at
West Orange^
J.
June 26, 1954
BOST6N
Club
annual
(Chicago, 111.)
Traders
annual
of
Club
field
day
Hills Country Club.
June 29, 1954
Securities
Chicago
at
Nordic
(Detroit, Mich.)
Traders
Association
of Detroit & Michigan 19th annual
summer
outing
Golf Club.
at
V
Plum
Hollow
SECURITY TRADERS ASS'N OF DETROIT AND
MICHIGAN
The
Firm
Sept. 17, 1954
Security Traders Association
will hold its
Trading Markets in
Club
on
19th
Tuesday,
STADAM's
town
with
(a)
June
225
29,
of
Detroit
and
Michigan
Outing at Plum Hollow Golf
along with their local and out-of-
guests, will be entertained for the afternoon
golf, dinner, refreshments
and the
awarding of
and
evening
many
prizes.
Delaney, of
Valley Country Club, Abing-
ton, Pa.
Sept. 22-26, 1954 (Atlantic City)
National Security Traders Asso¬
ciation Annual Convention at the
Sept.
(b)
Natural Gas Companies
Transmission &
David Morris
ftotmrot Securities
Producing
David
N.A.S.D.
Members:
74
Trinity
N.
Y.
Security
Place,
New
Dealers
York
&
Co.
on
without
Y.
Board of Governors of Associa¬
tion
of
Stock
Exchange
Firms
meeting.
NoV.
28-Dec.
3, 1954
(Hollywood,
Fla.)
month's trip to Los
Investment Bankers Association
Angeles, Santa Barbara, and San
Annual Convention at the Holly¬
Francisco.
wood Beach Hotel.
a
j
With Vickers Brothers
obligation
(Special
N.
(Minneapolis
Japanese Slocks and Bonds
Association
6,
1954
Morris, David Morris &
June 22 for
Material and Consultation
23-25,
Minn.)
Trip
Co., 52 Wall Street, New York
City, will leave with his wife on
Broker and Dealer
Troster, Singer
on
To West Coast
Co., Xtct.
-1... Member
Philadelphia 29th
Hunting¬
annual field days at the
Hotel Claridge.
Smith, Hague & Co.
\
(Philadelphia, Pa.)
Bond Club of
ton
1954.
members
The Program Chairman for the
gala day is Roy F.
Operating Utilities
■
Annual Summer
61
Broadway, New York 6, N. Y.
Tel.:
BOwIing Green 9-0187
Head
Office
Tokyo
i
to The
Financial Chronicle)
Joins Calif. Investors
LOS ANGELES,
Calif.
—
Fred¬
RALEIGH,
N.
C. — John
P.
Young is now associated
with
erick A. Clarke has been added to
Vickers Brothers of New
3924 Wilshire Boulevard.
York.
the
staff
of
California
Investors,
Volume 179
Number 5332
.
.
The Commercial and Financial Chronicle
.
(2533)
nies. The days of the "shoe string"
A New Generation of
equity
still
bargain counter, and
A word should be said about the
the coal industry prospect is so
character of power generation. It
black it looks as though it could
hasn't
changed much in recent
never
get out
years, about 85% steam generat¬
of the red, the
ing, 14% hydro-electric, and 1%
light
ies
compan¬
have
gone
blithely
on
their
way ignoring the
"rolling re¬
cession"
and
racking
new
highs
output,
earning
and
er
cial
to
the
country,
become quite nor¬
have
a
shareholder has less than
matter
of
Atomic Commission is reported to
up
require 25 million tons of coal
in
sales,
a
its operations.
year for
if the average Joe Investor had
done nothing in the past 30 years
but buy the commons of leading
operating electric companies, such
as
Commonwealth Edison, Consol¬
idated
beset investors in many other in¬
dustries.
Not
only
have
electric
utility
The
pow¬
finan¬
prestige.
The statistics
U.
Ira
Cobleigh
public power boys are still equities proved their worth his¬
yapping it up, but the climate for torically; they show no signs of
expansion
of
public power in losing their investment lustre. The
Washington is not nearly so favor¬ average householder in 1929
able
it
as
to discredit same!
.7
in
was
the
score
able to make
point about the
usefulness of electric
utility equi¬
ties,
may
our
we
professional
gers?
Among
utilities
are
implead
now
investment
the
mana¬
investment
trusts,
today the second
investment
fa¬
field
(follow¬
ing oils and natural gas); and
somewhere between 11% and
14%
19 5 3
are
States
Utilities, Central and Southwest
Corp., Niagara Mohawk, American
to
catch
power in this way.
At the Edison
Electric Institute annual meeting
recent years.
in
up
Total KW sales 1953
dent's
ties.
Nobody is likely to quarrel
this consensus selection, but
with
Forum
of
Western
York,
head
a
of
as
the
x-exempt
bond
organi¬
'
zation.
Other
offi¬
elected
cers
Vice-
were:
President—
Bush, The Na-
comment has been offered to sug¬
gest that the time honored quali¬
stability of principal value,
ties of
regularity of dividend and capital
growth are, on the record, quite
inherent
that
in
there's
this
a
field.
The
fact
generation
new
of
Security Dealers
Membership
York.
rine Trust Co.
Electric Power.
urgency is given here to
electric equities; but some current
New
Fred D. Stone,
Jr., of the Ma¬
R
No
of
succeeds
might I add my own favorites?
Long Island Lighting and Houston
11 i
o
t i
1
o n a
n
C.
City
Bank;
Secre¬
tary — William
Bank
of
New
Marquette
deBary
E.
Bachert, The
York; Treasurer-
Edwin A. Bueltman, Blair, Rollins
& Co. Inc.
The following were elected
as
members of the board of gov¬
ernors:
David M. Ellin wood,
new
Moody's
Investors
Service; Wil¬
Hall,
Jr., The
Bond
Buyer; Henry Grady Wells, Jr.,
Andrews & Wells; and Charles S.
Sykes of Vandewater, Sykes,
liam
T.
Heckler & Galloway.
Wm. Schwartz Appointed
Sales Mgr. by Grayson
William Schwartz has been ap¬
Sales Manager of A. J.
Grayson, Investment Securities, 82
Beaver
Street, New York City.
Mr. Schwartz was formerly with
pointed
Lehman Bros, and First Investors
(Truman) Materials Policy
Commission
He
Gas and Electric and Texas Utili¬
Elect to
facilities
Municipal
t
include Middle
of
With the generating expansion of
a partner in
the firm of F. S. Smithers &
Co.,
has been elected President of
the
ites
would
Municipal Forum
Marquette deBary,
New
common
NY
distribution
Of
~
stocks held by trusts
today are utilities. Specific favor¬
of
bought 502 KW a year; in 1951, power each year, gives some as¬
years ended Jan. 1, 1953; and the, 2,004; and in 1953 the total was surance that utility equities should
impressive; generating capacity
general public has been more cor¬ way up to 2,350.
As a matter of not fade!
increased from 91 (1952) to 102
rectly
apprized
of
the
hidden fact, what has been called a "cop¬
million kilowatts, a 12% upsurge
costs and the penalty to taxpay¬
per barrier" has appeared in many
in residential use over 1952, nearly
ers, inherent in government power individual homes.
Original wir¬
$6 billion spent on electric appli¬
projects.
ing and circuits were too small
ances, and $4.1 billion, plus, laid
to
carry
the
required new juice
out on capital additions, half of
Atomic Power
load for washers, ironers, electric
that in generation.
The New York Security Dealers
Another item in the headlines,
ranges, and, especially, air con¬ Association
This year, five months on its and deep in the thinking of utility
announces that Lewis
ditioners.
Hundreds of thousands
& Stoehr, Inc., New York
way, shows no evidence of abate¬ executives, is atomic generation of
City,
of homes are candidates for new
and General Investing Corpora¬
ment in the demand for utility electric power. Already Duquesne
wiring;
and
then
look
for
another
service.
Another $4 billion will Light
tion, New York City, have been
Co. in conjunction with new horizon of current
buying.
admitted to membership in the as¬
go to capital expenditures, with Walter Kidde Co. has a project
Finally,
back
in
sociation.
1950,
the
Presi¬
perhaps $1% billion directed into for the development of electric
for
deBary Elected Pres.
'
;777 Trust Favorites 7^7-*7
If we have,
up-terrrOwrbeen^tm^
:
vorite
hard fact,
cold
Edison, Florida Power, Pa¬
cific
Gas and
Electric, Tampa
internal combustion.
About the Electric or Hartford El e c t r i c
steam units, some in the North¬
Power, he'd have received fine
east, have been switching from dividends benef ited by hand¬
coal to natural gas as a fuel source some
capital gains, been vouch¬
(another booting around for the safed many valuable stock pur¬
coal trade).
Against that, how¬ chase rights, and been insulated
ever, the Ohio River plant of the against most of the woes that have
and
power
These
30% slice of the pie.
As
the
on
from 32-38%.
throughout
common
a
Energy Source Unchanged
are
trend, since 1950, has done nothing
are
mal, and there is almost no major
electric utility today where the
electric utilities.
liquors
common
seem
Topical review of the sustained pace of enlarged power
production, and expanded earning power of representative
sag,
company
practice
ratios,
COBLEIGII
Enterprise Economist
Though textiles
power
with the Insulls; and stand¬
suggests a
bonded
debt of 44-48%, preferred 12-15%
and
U.
a
gone
ard
By IRA
in
9
Corp.
H. L. Robbins Adds
predicted that elec¬
Atlantic
City last week, Dr. tric
(Special to The Financial Chronicle)
power production would ex¬
exceeded 400 billion KWHR, and John R. Dunning, Dean of Engi¬
With King Merritt
pand by 1975 by 260%
WORCESTER, Mass. — Leon H.
This col¬
this figure is almost certain to be neering
at Columbia University
(Special to The Financial Chronicle)
topped this year with over 10 bil¬ (and one of the deans of atomic umn is surely in no position to Lovitt has been added to the staff
ORLANDO, Fla. — Henry H.
lion KWHR slated for Atomic En¬ wisdom in the U. S.), stated that
confirm, or necessarily to endorse, of H. L. Robbins & Co., Inc., 40 Kubik, Jr. is now connected with
ergy
Commission alone.
This "peacetime harnessing of atomic this
prediction but frankly the Pearl Street.
King Merritt & Co., Inc.
Commission demand on the hori¬ power had passed out of the pure
zon
is fabulous, and within five science phase and into the engi¬
years, may attain an annual re¬ neering and business phase." He
further predicted that, within
quirement of 40 billion KWHR.
This advertisement is neither an offer to sell nor a solicitation of offers to buy any of these securities.
from 10 to 20 years, most of the
Air Conditioning Demand
The offering is made only by the Prospectus.
electric power companies in the
Not to be ignored is the already
U. S. will have at least part of
impressive expansion of appliance the electric power they distribute
NEW ISSUE
June 9, 1954
demand. What started, a few years
produced by atomic energy,
i
back, as spot air conditioning
From the foregoing, we must
room
units, for home or office, view
the power and light indus¬
with relatively few big complete
try as still dynamic,' still moving
installations
.
~
•
for
fice
buildings,
roomed into
theaters
etc.,
has
mush¬
wide
industry with retail sales
last year of $1% billion, up 40%
from the preceding year.
About
900,000 single room air condition¬
ing units were sold in 1953; yet
the
surface
has
hardly been
scratched with only about 3% of
forward in
nation's
44
cally-connected
tribution and earning power.
Investor Confidence Warranted
Turning
from
now
the
last
viewpoint to the inves¬
tor's Window, we can perceive no
valid
reason
should
sell
week
a
super-modern
completely controlled for
heat or cold by electrical switch¬
systems estimated to cost $80
year for juice.
These are ex¬
over
perimental, but they point to a
promising future for central resi¬
dential
air
conditioning,
pumps,
and
their
more
heat
attendant
and more
de¬
power.
Lack of confidence in
try,
if
an
belief
down, that inventories are at a
dangerous level, or that there is a
menacing competitive threat, or
that growth has ceased.
None of
these negative factors are at all
perceptible
the
electrics,
although the leading utility
and
equities
most
among
have
stalwart
been
white?
TV
will
current
you
know
require twice
as
black
and
I
million
were
dollar
robot
calculating
mon
in
in
to
of
on
com¬
Goldman, Sachs & Co.
$639
million
Lazard Freres & Co.
in
1953.
Across
paid out in dividends in 1953.
was
1.77c against 1.78c in 1951.
Blyth & Co., Inc.
Kuhn, Loeb & Co.
light and power compa¬
from $602 million in 1952
board, about 70% of net
Sound
Great
in the
erating
maturity is
now
power
and
light
Eastman, Dillon & Co.
Glore, Forgan & Co.
Kidder, Peabody & Co.
Harriman Ripley & Co.
Incorporated
Smith, Barney & Co.
Capital Structures
Lehman Brothers
Merrill Lynch, Pierce, Fenner & Beane
Stone & Webster Securities Corporation
White, Weld & Co.
evident
financing formulae for
Corporation
was
more
at an actual reduction in unit rate!
For 1953 the average KWHR rate
The First Boston
rose
ropolitan
All these things
electricity, which the
industry has kept producing, and
Copies of the Prospectus may be obtained from any of the several underwriters,
including the undersigned, only in States in which such underwriters are qualified to
dealers in securities and in which the Prospectus may legally be distributed.
act as
privately owned
the
Life.
/
in¬
machine bought recently by Met¬
mean
,
the
dividend
1953, and, totally,
dividends
electric
nies
number
a
creases
Then, of course, you've been
reading about automatic factories,
run
by electronic brains, and a
Price 100% and accrued interest
the
among
performers
timidity complex respecting elec¬
tric purchases even now.
There
sales, but did
color
June 1,1979
tion, that prices must be brought
electric
much
Due
June 1,1954
indus¬
markets of the last 90 days, there
is slight
logic in developing a
as
Dated
any, should stem from a
that there is overproduc¬
Mention has frequently been made
of TV position as a promoter of
that
%
Sinking
Fund Debentures Due 1979
3
why investors (1)
utility stocks, even
million
were
mands for
of America
homes
home development down in Texas,
Dallas I believe, where the houses
a
Aluminum Company
broad
economic
You probably noticed in the pa¬
pers
-r
production, sales, dis¬
electri¬ though they have handsome gains
boasting therein; or (2) take a timid view
air conditioning units; and almost about buying selected issues be¬
cause they may be selling
at, or
eight million apartments without
near, all time highs.
benefit of same.
the
^
$100,000,000
of¬
and
tremendous nation¬
a
o
op¬
compa¬
Drexcl & Co.
Union Securities Corporation
Hemphill, Noyes & Co.
The Commercial and Financial Chronicle
10
.
.
.
(2534)
Role of Hotel Chain
Economy
tunities
to
(4)
studies
looking
hotel
magazines
The
cost
mathematics
of
this
way,
the
very
broken
such
is
that
few
into
up
large
a
of
ber
num¬
city is involved.
inde¬
with
t
equip¬
and
m o
o
elec¬
as
ment
au-
b i 1
e s
than
the
of
90%
business
is
controlled
by
t h
so-called
e
"b i g
the
in
three."
_hotel
leading chains,
Hilton, Sheraton and
less than 10%
of the total
volume
of hotel sales.
Hilton's
1953 sales volume is reported to
estimated
Statler's sales are
be
to
cities
located
hotels
numerous
Sheraton for the year
$64,000,000.
ended April
it
case
In Sheraton's
single national
advertisement at relatively small
cost
lor each.
When hotel ad¬
vertising budgets
high
as
run
as
$1,000,000 annually, the spreading
expenditures over multiple
units is imperative and only hotel
of the
chains
can
the
afford to do so.
of
installation
The
type
tele¬
connections between all of
units of a chain, a develop¬
originated by Sheraton, has
made possible the channeling of
a large volume of inter-city hotel
ment
business
from
1954 expects to show sales of
$75,000,000.
This compares with
a hotel sales volume for the coun¬
try of $2%
billion. Since the op¬
economies
inherent in
chain
operation are substantial,
it seems ineviable that the growth
made
erating
service
estimates
its
room
one
to
other
group.
reservations
through
its
are
free
now
teletype
hotels, and the
true
for
other
between
must
same
unit
Sheraton
that one-qbarter of all
same
be
chains and groups
of
and
secured,
were
work
com¬
on
the
will
which
rate
structure
the
maximum
create
satisfaction commensurate
satisfactory rates and oc¬
guest
with
the
problems
principal
diffi¬
the
is
hotels
individual
culty of securing adequate financ¬
ing;
managed hotels
this problem difficult
well
Even
often
find
in
because
the
single
often
a
appraise the
management.
of diversification is also a
difficult
it
find
Lack
deterrent
to
adequate
mortgages
of
much better posi¬
a
questions
when
raising
of
have arisen.
money
Sheraton has the larg¬
Because
number
hotels
of
American
more
have
financing
themselves in
tion
with
institutions
and other
found
financial
larger
forms
financing.
dealing
when
chains
Hotel
the
to
and
covers
Canadian
and
either of its principal
cities than
competitors, it has been in a bet¬
ter
position
mum
from
national
ad¬
vertising, channeling business
between
using the same
cities,
as
well
as
from
in coming system. The plus business grow¬ many other advantages of mul¬
ing out of the channeling of busi¬
years will be significant.
tiple operation.
The
principal
advantages
of ness between hotels is1 an impor¬
The principal adverse factor in
tant
element in the earning power
multiple hotel operation include
of
the
large
chains
(1)
Greater effectiveness of na¬
tional advertising.
(2) Inter-city
business between
it
since
the following:
which
the
"extra"
business
the highest per¬
the
of
of a i hotel
Economy in Purchasing
industry
is motel com¬
Motels do to some extent
hotel
business
in
smaller
cities, for they drain off a portion
purchasing and
savings resulting from large vol-
(3) Purchasing economies.
of the transient guests
by1
motor
car.
that travel
Fortunately
the
unfie buying are available, only to
larger cities are not materially
the multiple group | units in our
affected, and, of course, the prin¬
troduction of 'scientific methods. industry.
Sheraton profits very
(5) Opportunity to secure more materially from both and so do cipal business arriving by train
its competitors, Hilton and Statler, and
advantageous financing.
plane is hot affected. Modern
and the other multiple owned and
National advertising in leading
hotels in smaller cities where such
operated hotels in the industry.
competition does exist are taking
♦Summary of an address by Mr. Hen¬
By dividing the cost of central
derson before a group of Boston bankers
Continued on page 53
supervision and the cost of scien¬
and brokers, Boston, Mass., May 6, 1954.
(4)
the
Army.
There
desire
brought up the name of Rob¬
presently imbroiled Secretary of
was
Better opportunities for in¬
a
Vinson said, whose sole
man,
his country.
to serve
was
was
no
not in the
was
public prints at all and frankly
I had never heard of him.
nead
was
an
offer to sell
nor a
solicitation of
an
offer
to
buy
any
needed
blankets
Vinson
said
he
and
them
needed
thit-his
realized
quickly.
Carlisle Bargeron
cherished
called
He
stances.
on
in
Stevens
him
told
and
get the blankets,
to
the price line where necessary, but
holding it the best
that
the blankets had
he could.
due
in
been
time,
Stevens
back
reported
acquired and that only on^ company
line and this
not his
was
own
had broken the price
company, one
of the largest textile
manufacturers in the country.
When
Stevens
of the Army he
for Secretary
nominated
was
publicly groaned over having to give up his interest in the familyheld textile company, saying it meant the family loss of control
of the company. But he gave it up nevertheless.
So, the position he now finds himself in, in the McCarthy dis¬
pute is tragic.
his
being
his
It is ail
gentleman.
a
You
Schine's family,
luncheon, would
of his private plane, would even ask—he denies
to pose with him for a photograph.
would
gentility
well to say that much of it is due to
can easily understand that a man of
very
bread
break
with
Private
would entertain McCarthy and Cohn at dinner or
offer them the
use
it—Private Schine
His basic mistake, I think, was in
of his office.
is
He took it to
misunderstanding the nature
mean
that the Secretary of the Army
appointed to defend the Army.
The fact is that the purpose of
civilian heads
the branches of the armed forces
over
Civilian control
of
over
lives.
our
the
life time I have
my
military who
were,
known
never
but two civilian heads
in fact, heads.
The gaudy braid and
the high brass have invariably over¬
decorative breast cabbage of
whelmed the civilian overlord regardless of how
he may
elegantly tailored
have been, or how authoritative he may have been in his
pursuits. This was true back in peace times. It is more
civilian
pronounced in time of
are living.
'
in such threatening times as we
or
war
One exception was Josephus Daniels who served as a
Secretary of the Navy and who
He
held
was
out
come
cating
as
ridicule
to
up
the boss.
will
and
ships.
the
tell
The
in removing
whether
he
mellow
doesn't
was
was
taken into
cheerfully from
McCarthy at which
camp
right off the reel.
He
meeting with Senators Mundt, Dirk-
a
modus operandi for the McCarthy
a
agreed upon.
Then he read in the
was
cause
he did not stand up and fight for them.
calling him
a
yellow belly.
The Army was not on
trial
nor
that the Pentagon
papers
brass
Associated Oil St Gas Co.
They
sulted by
Capital Stock
(l^ Par Value)
It is
i •
McCarthy and there is
into) the position he is in by
a
grown
man,
record is clear that he
$3
per
contempt for him.
Share
an
He had been in¬
in
compliance with the securities laws thereof.
However,
>.
The
may
have been justified but for
abusive
,
duly authorized by the Senate to make the
entirely different thing.
an
even
will not remain
turn and
oAllen & Company
The
way
His contempt
world he had to do
I
of defending the General.
quite capable of defending himself.
Army General to exercise his contempt before an investigating
investigation, is
t
doubt he had been.
provoked McCarthy by openly showing his
United States Senator,
Copies of the Prospectus may he obtained from the undersigned only in such
States where the undersigned may legally offer these Securities
•*.
The whole im¬
under attack.
utterly ridiculous that Stevens should have been forced
General is
Price
no
outraged be¬
were
broglio turned around Major General Zwicker.
was
here
walk out.
the
when
or
any
was
-
insulted,
and
be subjected
to such
an
Congressional
This is the
other citizen
(
in
all
the
"Sir,
say,
insult," then
This is the privilege of any citizen before an
investigating
nor
committee,
the last.
standing
reason
upon
you
never
of
which
a
General
But when
other citizen does this he wants to make
clean.
mittees.
General
to arise in his full dignity and
McCarthy's is neither the first
are
the
under
committee's investigation of Communist infiltration into the Army
900,000 Shares
1954
intoxi¬
Secretary of De¬
present
Generals and Admirals.
Stevens, however,
away
the end he seemed to
E. Wilson, also seems to have made himself boss
time
only
but in
often
wartime
mighty stubborn character.
was a
At least he succeeded
beverages from
fense, Charles
sen
June 4,
is to insure
the military.
They are supposed to keep the
military brass under foot. There is not the slightest doubt that
this is needed, particularly since it is apparent that we have got
to live with a tremendous military establishment for the rest of
came
offer is made only by the Prospectus.
was
price line would be broken under the circum¬
of these Shares.
NEW ISSUE
division
textile
latter
serving as
Price Stabilizer with orders to hold the price
line.
There carne a time when the military
blandishments of the
The
the
of
when the
Vinson
under
but
This announcement is neither
At the time
public mention of his being con¬
sidered for Secretary of the Army. His name
there
in
affect
Efficient central
group.
hotel
petition.
centage of "net."
channeling
units
is
produces
Stevens,
derive the maxi¬
to
benefits
one
the
clear sky
a
ert
the
effectiveness of
est
of
case
institutions
financial
hotel
talking
were
government positions—member of Congress, member of the
of Appeals, War Price Stabilizer, Secretary of the Treas¬
Stevens
of
One
of
I
and
personalities with whom he had served in his
to be too
cupancy.
Securing Adequate Financing
Vinson
Justice Fred
Chief
late
and finaiiy Chief Justice. He was not one
critical of his fedow men, but out of
ury
formulae, there
calculus
supplying
direct
pricing
to
services
The
months'
six
termining
their
that 28 hotels in 21
means
Court
in
cities profit from a
units of the
30,
hotel.
cost for each
many
rate
have been evolved methods of de¬
the cost
divide
can
respective units giving each unit
the full advantage of the adver¬
tisement at only a fraction of the
Statler, rep¬
resent
$98,000,000.
The hotel chains
of one advertisement among
indus¬
more
be
however, is excessive
single hotel in a single
a
Whereas in
trical
business the three
when
many
tries
Henderson
a
pendent units.
such
£mest
most effective
sales volume.
securing business in
is
The
afternoon about the
scientific
eminent specialists in higher
some
of increasing
of
of the News
By CARLISLE BARGERON
over
best
respect
rooms.
plicated
means
the
the
of
with
structure
of
after
hotel industry is
one of the seven or eight largest
industries in the country it is one
spread
to
determination
advantageous
more
when
which only chains can do.
Sheraton
has - just
completed
units in hotel group.
the
Washington
Ahead
many,
financing; and (5) inter-city channelling of business between
Although
From
The cost of such super¬
burdensome
economies in¬
are
scientific methods;
use
analyses,
work-load
might be prohibitive for an
individual hotel.
It becomes less
substantial, the growth
of large chains seems inevitable. Lists as advantages of mul¬
tiple hotel operation: (1) greater effectiveness of national
advertising; (2) purchasing economies; (3) greater oppor¬
operation of hotels
studies,
vision
Mr. Henderson contends that, since operating
herent in chain
with
connection
in
beverage controls, pay¬
the field.
President, Sheraton Corporation of America
*
and
engineering studies, etc., a large
group
of hotels can secure the
services of the best specialists in
ERNEST HENDERSON*
By
studies
food
roll
In American
'
tific
Thursday, June 10, 1954
hear of
his dignity before
a
sure
his skirts
General
one
or
of these
any
com¬
Volume 179
Number 5332
The Commercial and Financial Chronicle
.
Electric Utility Cost Controls
In an Expansion Period
)
& Hamilton
organization structure;
Your
job
country's
have
of
tre¬
a
anticipating the
requirements. You
power
developed
much
and
constructed
cannot
identify.
district
and
gener-
And
comes
ment
are
you
an
ex¬
of
cellent
job
of
of pro¬
ducing
For
often
power.
the
adoption of
farSi.uart
reaching tech¬
M.
Campbell
im¬
provements,
to
old
along
with
a
very
to
you
in
ing
control
satisfactory return to your
security holders.
a
But in recent years,
rate
rising costs
increases
Your capital
mounting
rapidly
needs
your
plant
neces¬
investment
is
customers.
the
The
higher
labor
to
costs,
meet
tended
to
minimize the favorable factors of
bigger volume
As
and
technical
ad¬
the
in¬
result,
a
further
grows,
more
vision
and
continuing greater demand
New products
add further to
potential.
There
is
every
not
only
will
the
substantial
indicated
that
at
further
capacity
an
volume
may
than that which you have enjoyed
in the past
ten years. This prob¬
able high rate of expansion will
important
changes in management require¬
ments and one of the most impor¬
bring
it
with
some
tant is that there will be
Industry
a
differ¬
plan
generally
has
found
with
it a change in the control meth¬
ods required.
This will be true
of your industry.
More people
will
be
involved.
communication
so
The
will
lines
of
longer.
be
problems can come
many
to the top personnel—they must
Pol¬
icies can be set at the top, but
up
be dealt with down the line.
they
Again, in
it
becomes
will
be
interpreted
by
a
address
by Mr. Campbell before
Convention of the Edi¬
Annual
the
22nd
son
Electric Institute, Atlantic
June 1,
1954.
City, N. J.,
to
up with a
3 times as
larger organization
great moment that
a
of
consciousness
than the
more
ments.
station
A
80.
Thus,
view your personnel
to
reach
work
for
more
rotate
people will make it
from
a
few
change
operation affects
the
a
cost
of
the
in
the
your
the
This
various
in
this
is
over-all
you
ards
service.
of
think
to
in
physical
super¬
Otherwise,
ef¬
revenue
supervision
an
is
funda¬
but
success,
believe
As
spell
throughout the
continue
service,
you
control
of costs
adopt
new
or
good
the
have
you may
approaches to make
sure-that costs
are
as
well
level
to
tion.
Here
(1)
service
as
service standards.
fects your
used to
internal
as
or
of
aspect
the
well
This advertisement is neither
an
(2)
.
In
the
a
light
new
Jt
the
tained,
but
it
we
is
a
often
vital
in
volume of business
quire
basic
some
will
or
Are the top
(3)
people overloaded?^
As you visualize changes in
the
organization structure, will
they make it more difficult to de¬
termine
where
the
for costs lies?
responsibility
Will the responsi-r
bility remain too high
company?
(4) As
with
and
organiza¬
visualize
responsibilites
positions,
will
of
be
you
these
job
ness?
ple take
ment
a
hand in
in
adequate information
tal
are.
of
work
It
is
Will
expenses?
(5)
take
Do
your
into
at
it—partly
that
Your review
clude
a
plan
a
group
gether
from
that
get
transaction.
Your
be
to
re¬
that they
presently
may
not be
larger
a
Your
need
cost information—what is
when do they
Budgets,
departmental
gets
to
it,
of
the
has
You
have
ability to meet
these
remarks
value
as
you
which
types cf
many
may
I hope that
be
of
appraise the
of
your
next
expansion
period.
any
of these
Mortgage Bonds, Series F, 3!A%
Due May 1, 1984
Equitable Securities Corporation
it, who
get
it.
Lee Higginson Corporation
statements, standard cost data will
become
more
necessary.
And as
require that cost control be¬
comes
responsibility of more
operating people, you will want
to
a
review
the
form
of
and
the
r. w. Pressprich
&
Co.
Shields
&
some
some¬
different cost control prob¬
lems
offer to sell, nor a solicitation of an offer to buy,
offering is made only by the Prospectus.
Merle-Smith
it
demonstrated
Copies of the Prospectus may be obtained in any State from such of the undersigned under¬
writers as may legally offer these securities in compliance with the securities laws of such State.
&
~
meeting the de¬
markets
Price 101.537% and accrued interest
Dick
and
maintained
in¬
expense
to¬
to get
supplying it?
industry
expansion problems.
what
easy
organization,
fine record for
the
working
as
of your larger or¬
will
cost
specific provision may have
to be made for
Dated May 1, 1954
look at your provision for
plans
the
consciousness you are getting from
for it.
ganization
be
it
expansion
account
manifesta¬
Partly you
you
organize
op¬
provided promptly?
the develop¬
one
teamwork.
on
budgets, and departmental and
functional
evaluating performance, and
letting them know what the
tion
to
able
erating costs, operating and capi¬
of
plans for doing things,
by making sure that people
throughout the organization are
expected to and do take a hand
the
many
requirements
Southwestern Gas and Electric Company
First
J.
:
develop
you
changes
match
in the
up
/
volved.
get cost conscious¬
You get it by letting peo¬
Do
a different di¬
visional set-up?
Is your home of¬
fice group too inclined to reach
into the district manager's
job?
$10,000,000
Getting Cost Conscious
re¬
you need to create
June 9, 1954
How do you
it
changes?
a
moderate sized group it gets lost
as more and more people are in¬
fore¬
organization.
ily expanded to handle the added
NEW ISSUE
that
note
factor
plan¬
that
of
Securities. The
present at all levels if
right end result is to be ob¬
to
look at your plan
Can it be read¬
maintained
be
top echelon.
of
10 years
management
of
serves.
all-important
viewed regularly to see
becomes
forecasts
your
the next
your
cast, take
as your
You
need
ac¬
suggestions:
some
ning, and the timing of it.w
mands
customer, but service
standards
are
over
on
af¬
talking about taking good
of the
service
creation.
service
relationships.
might want
few points that
you
a
the extent of the probable ef¬
fect
a
on
the
impact of
identify the heed for
Review
growth
considered when you establish
emphasis
situation,
serve
to
out
dissipate
may
from
and regular
involved.
company
render
to
ex¬
peo¬
con¬
need
you
you
it
service standards and make
you
to
This
your
I
that
sure
As
have set high stand¬
about.
external
There
management
ticular
broader
expansion,
specific problem of
a
that
your
of
cost,
guidance of
to have in mind
the fact that you
industry
trol
move
from
service business.
a
raises
neces¬
result
a
stems
in
to
sensibly
are
removed
are
costs
tion
is another I problem
business that is not par¬
but
to
the
who
regard
11
As you review the
implications
of these remarks
against you par¬
provided
there
organizations
customer
of
forward
specifically
tends to become the
the
are
the organization plan.
care
at
for
together becomes
important.
And
this is a time to make
that
in
down
ple
the
that
means
more
need to delegate author¬
point
that
time
ways
problem of
make
stages
elements
responsibility
and
fective
at
a
needs to
area
pulled
and
mental
analysis of
supervision.
supervision
planning function where
This
Growing
better
and
line
the
of
logical
a
these
are
problem.
is
top
of
ticularly
Another specific area to be con¬
sidered
is
move.
a
location to another?
one
are
to
It
year
Now
job evaluation situation. Do
differences in division pay poli¬
difficult
proportion¬
probable
in your
your
it
increase
Costs and Service Standards
to look at your wage and
salary policies, and particularly at
make
what
is
planning
sary
cies
in-,
of.
growth.
for
re¬
need
does
various
certainly
utilization—
The
growth
at
sure
to
flexibility
assignments.
of
due
they
pressed for the
talent,
reappraised
more
calls for 70
will need to
you
'
consideration
not
automo¬
used
analysis
across-the-board
a
finally
but
most mod¬
that
now
men
that
with
that
be
must
you
•An
requiring 2l/z
results
that rapid expansion brings
three
loca¬
generating stations, substan¬
reduce the man require¬
require 250
and
many people in his area.
Obvi¬
ously, this is a wrong conclusion.
by
of cost control.
ent problem
multiply
your
de¬
be
the
improvements,
in
personnel
of
all
tially
need
its
those
as
de¬
ef¬
executive
Each level
such
make it advisable
study fleet costs and
your
on
this
meth¬
service
for
more
area,
the
and each functional
operating
stores
improve
need
improved
mean
ately.
transportation. Re¬
added
top—there
rotation of people in various
of jobs.
should
the number
communications
Technological
vision.
that
more
bile and truck purchase and main¬
tenance policies.
in¬
one com¬
their
excessive
or
of
use
potential
your
up
consider it ad-
possibly to change
de¬
the
up
supervisor came
every
be
greater rate
even
each
as
sizes
would
revenue
these forecasts, but
by
added
the
realized
possibility that
have to build
business
head
times in the next ten years, nearly
where
you
to grow with
avoid
increase
that
further
or
personnel
set
are
supervision;" continued
growth means to each area. As I
indicated earlier, administration
of vehicles may
ity
cost
forecasts for the next
years are still sound indica¬
tors that you have great growth
ten¬
a
to
need
crease in men and
equipment. The
operating budgets have to be built
will
definitely add to your in¬
ventory investment. Larger fleets
ern
the
demonstrated
increased
study
locations
may
will be
at
industry
tions
particular part in it. In
pany
which estimated
spite the present leveling off,
ten
there is always
to
the
the
definite
a
ef¬
Your past experience will have
will
which
will
With
may
to
improved
member
These
planning
You
ods and better
be
added
the promise for the industry. De¬
your
locations
creased business in relation to his
air conditioning and elec¬
as
tric home heating
di¬
organizations.
level of supervision
the
a
the
to
more
to
that it be¬
so
attention
well.
as
stores
to
be
And
in
re¬
you
more
see
headquarters, but first make sure
you have taken full advantage of
dency for each function and each
partment
for electric service.
and
deserve
advisable
of
will
not
important
insure that you do not
the administrative group
as
you
ber of families to be served, adds
volume
to
a
num¬
As
district
Specific
needed
take
considerable increase in the
rapid
more by
report
by personal administra¬
tion,
approaching general popula¬
increase, including a shift in
age groups within the population
that means there will shortly be a
base
men
unduly,
tion
ap¬
you
tion.
increase
The
as
will control
less
dustry
are entitled to under¬
study of it in an atmos¬
phere of optimism for the future.
of
and
decision-making responsi¬
bility
lower
faces, in many instances,
profit margins.
While this change in profit mar¬
gins warrants management atten¬
problem
balance
face
op¬
useful in the manage¬
more
travel.
new
will find it advisable
you
to' pass
and
have
will
decentralization.
You
to
problem—
expansion.
will reappraise the need for
You
operating
costs
the
proper
you
proach
rates and other rising elements of
vancement.
methods
For those reasons, I should like
direct your attention
to the
maintaining
of
numbers of line crews, it becomes
such
differences
output, permitted
of
in
industry's
maintain rates while still produc¬
higher
changes
neces¬
problems that will have
of your
made
will
you
aspects.
to
sary.
plans
your
insure that the added
been
substantial increase in the volume
have
organi¬
change.
keep proper control over a
rapidly enlarging business.
Thus,
the ingenuity you have shown in
the
recent
growth
period will
again be called on to meet some
years,
nological
office-
to
many
such
into
will
in
presentation
means
velopment of executive personnel.
This adds up to more attention
fective
job.
that
tors
volume, with its higher capital
investment, is still handled with
the right profit result.
This has
much
effective
means
make
order
in
what may become
organization,
sarily
investigating
more
make changes
to
they
you expand and change the
physical operations, the cost fac¬
Your
requirements
if
As
run
home
your
managers
area
training.
for
improvement
goes right up to
kinds
of
erating information
As your companies grow and as
you
doing
old
problems.
zation
:
ating stations.
the
of
division
accountants—see
want in this
form
more
more
not
they
and higher costs
Obtaining the answers
partment,
and
You will
does
Don't ask
ineffective
have accounting help lo¬
alongside them, and see if
can improve the timing and
change
physically.
it
costs which
to
larger group that is often widely
separated, both organization-wise
branch
more ei-
ficient
Not
general
the
on operating costs and capital budgets,
(5) be cost-conscious in your expansion plans.
industry has done
mendous
that
and
area
include
you
(4) match job requirements with
the
supplied to your su¬
deal specifically with
pervisors
cated
Sees need of maintaining high service stand¬
important that
information
need
and
,
fective
is
It
become
adequate information
such
sonnel.
cost-conscious."
in
up
sult.
Referring to rising costs in electric utility operations, Mr.
Campbell points out different ways power companies "can get
ards despite rising costs, and gives following suggestions:
(1)
Review forecasts of growth and plan for the timing of it; (2)
take a new look at your organization; (3)' visual changes
I
terminology used in your reports
light of their use by operat¬
ing rather than accounting per¬
in the
their
By STUART M. CAMPBELL*
Partner, Booz, Allen
(2535)
Company
12
The Commercial and Financial Chronicle
(2536)
level off. I would guess that most
of the decline is past. On the other
The Outlook for Retailing
hand, I don't think that we should
expect a very rapid pickup. There
By ALBERT COONS*
still
are
Vice-President, Allied Stores Corporation
•
with biggest reduction in sales in major
appliances, radio and television. Says, as regards profits, pic¬
ture is mixed, but profit margins are fairly stabilized.
Urges
caution on suburban shopping developments, which he likens
to the Florida Land Boom, but concludes "we are now coming
into
ml
.
i
a
a
period which should be a prosperous one, but one of
intense competition/'
«» m m • ' *J«»*"
J*1
.<*
years,
Jp.
k
J?i- *>
•
for the average
retailer, things haven't happened
as
forecast. People are saving a
deal—almost 8%
great
which
—
is
■'
-
! .•>
•
"•
-•
of
v"
•"
soft
.
••
•'
-
•
lines
automatically
increase.
This year,-we've
seen
tough sledding in the automobile
and
appliance
lines
concurrent
of income
with
a
be
worked
so
eluding rent,
educa¬
/Against
how
see
Irl
care
in
other
goods
are
durables
Albert
Coons
a
of
life,
to
with
five
the
transportation
inclu¬
and
bankers,
com¬
must
we
remember that.
Now let's take
in
also down about 1%.
that
a
forbidden
imagine
that
the
little peek
crystal ball. I
conditions we
very
have seen so far this spring are
likely to continue during most of
the year. Thanks to high construc¬
general fallacy to think that
when sales of hard lines decrease,
*An
of
munication. As
Department store sales for the
year-to-date are off about 3%. It
is
necessities
increased
purchases of durable
down 7%, and the non-
are
an
sion
than last year.
So f a r this
the
country, we are living
age
where
the original
food,
clothing and shelter, must now be
higher
year,
this
three
a r e
estimated to
7%
The
this
look
address
by Mr. Coons before the
Annual
Convention of the Pennsylvania
Bankers Association, Atlantic City, N. J.,
May 24, 1954.
let's
the
in
were
be
able
but
good,
very
to
we
closer
come
to
last year's figures during the Fall.
For the year, I would guess that
department store
sales
generally
should be down 3% to 4%. For the
Fall season, even a 5%
be
drop might
hope Allied can do a
I
seen.
little
better
than
although
the Pennsylvania stores might do
even slightly less.
Department
are
still
are
down
this,
inventories
store
bit
high, although, al¬
lowing for seasonal changes, they
last
a
somewhat
Much
compared
to
of
the
excess
investment
in
wider
summer.
tion, liberal plans for capital in¬
vestment, unemployment benefits,
represents
and
tionally slow turning departments
such as furniture, men's clothing
and shoes. In retailing, I am afraid
government budget
which,
even after reductions, is still huge,
I would expect the recession to
a
assortments in many of the tradi¬
that inventories-to-sales ratios are
still
This advertisement is neither
an
offer to sell
nor a
The offering is made
NEW
well
as
picture
mixed.
a
in
this
solicitation of offers to buy
any
of these securities.
only by the Prospectus.
ISSUE
June 10,1954
Gross
high as last year, and in
many instances even higher. Con¬
sequently, turn-over is slightly
stocks
will
decline
very
slightly during the balance of the
year.
Prices in our markets, as
mentioned above, seem to be very
stable. According to our own list¬
Supply
lower than
a
reasonable
level,
ago.
year
any
At such
real
a
break
in prices
is most unlikely and, if
anything, some prices may be¬
3V%% Debentures Due 1974
come
firmer later in the year.
Loss
.•
.
June 1,1974
may
be obtained from
writers only in States in which
any
dealers in securities and in which such
Prospectus
of the several under¬
are
may
qualified to act
again in
are
market,
encountered
in
the
difficulty
a really
retailers
considerable
com¬
the
set
success
state certain wholesale
discounts
price lines
which
allow
a
lose
by
the
A
great
this shift from
suburbia, unless you
Florida
remember
room
land
,
if not all, of the
many,
this
in
men
heads
our
about
cities to
believe in miracles.
Once
boom.
the
it
got
started, people became so wild
that predictions were made that
almost everyone was
there
because 'of
going to live
delightful
the
climate and the "great opportuni¬
ties that existed there.
United
States,
being-
a
county of extremes and fads, and
containing
than the
more
number of high-powered
ers,
for
average
promot¬
speculators, and suckers, went
discovered land of
the newly
Eternal
Youth
shine in
a
what
and
Winter
Sun¬
big way. You all know
happened.' There
sound basis for
some
was
a
development
down
it
there, but as often happens,
tremendously overdone as
time, extent and degree. Con¬
was
to
sequently, huge fortunes
and thousands of
were
lost
people were sad¬
der and wiser within
short time
a
though eventually
Florida grew into and justified the
(quick) over-development of the
thereafter,
even
1920's.
have
getting manufacturers to rein¬
and
pace
not
us
I
might
there
suspect
be
an
analogy between the Florida land
boom
the
and
conceived
suburban
reasonably
premature
and
badly
over-developed
shopping area, especial¬
smaller cities. As bank¬
good
markup.
The ly in our
that, during the next ers, I am presumptuous enough to
the spread between caution you about
backing such
gross margin and expenses can be
promotions unless you know the
chances
two
are
years,
maintained
about
on
the
1953
basis.
Retailing from Banker's Viewpoint
in advance, to a lot of
questions, based on surveys, fac¬
answers,
tual
information
and
common
sense.
Now let
me
take
few minutes
a
discuss
to
the
retailing
from
viewpoint. I
am
banker's
sure
Already
zas"
of these "bonan¬
many
in
are
downtown.
With
the
tremendous
development in suburban housing,
main movement of retailing,
the
many
trouble.
I
know
of
flops
serious, situations in two suburban
shopping centers:
at
least
is
in
in
that
the
larger cities, also
direction.
I
think
that
much
Major Appliance
our
Sales
business
are
cannot get
bus lines to service the
with public transportation
facilities;
so
only car owners can
district. In most cities, suburbs
come to the center to shop. Plenty
tend
to
spread
out in several
directions around the downtown of room, but not enough shoppers.
the
stake that bankers
and
erty
owners
area,
rather than grow in
direction.
have
must
The
result
is
prop¬
in
a
this
center
Both
single
that
it is
of
these
centers
trouble. Some stores
are
are
in
empty al¬
very difficult, if not impossible, ready, others are losing money,
biggest
for any single suburban center to- and in one case all equity money
major ap¬
tap more than part of the popula- in the entire project has been ©r
pliances,
radio
and
television,
tion in a city. Consequently, it is is about to be lost.
where we are encountering mar¬
Strangely enough, the name
kets
which, in most ' cases, are unlikely that cities of less than
Miracle Mile" has been adopted
rather well saturated. Television 150,000 can support outlying shop¬
as a
whole has been doing fairly ping centers with large depart¬ •foe a great many shopping centers
ment
store
and
specialty store, throughout the country. Of course,
well, but this is largely due to the
units (food markets excluded).
the original one in Los Angeles
opening of new stations in new
There is reason for caution on was
properly named. However, if
markets. On the other hand, many
suburban developments, even in
of the home furnishings have been
you don't believe in Miracles, be
cities of up to 500,000. Only in
extremely careful about placing
doing very well. Furniture, floor
the very largest cifties are the op¬
your bets, because in my book it
coverings and miscellaneous home
}>.
such underwriters
in
Sales trends in
Price 99.25% and accrued interest
Copies of the Prospectus
we
let
.
Company
.
by
increasing gross margins. Now
are signs on the horizon that
as
cannot keep
(1) A very large one where so
parking space is provided
when you. are advising a retailer that folks who park on the out¬
side perimeter complain that the
or considering a loan on a
sub¬
ing of wholesale prices in depart¬
urban
location,
several
points walking distance is too great to
ment
store merchandise,
prices
i
f
should be kept in mind. First is the stores in the center,
today average only 2% above pre(2) A relatively small shopping
the basic strength of the down¬
Korea,
although
they
are
2%
area
outside
a
smaller
city that
town district and also, of course,
$12,000,000
Due
and
the advance of operating expenses
can be slowed. At the same time,
petitive
the
2,500,000
year,
and disappointments
everyone here has a fair number
to the owners, to the lenders, to
of loans to retailers and is con¬
lower. These excesses are rather
the borrowers, and especially to
sidering others. Let's consider two the lessees who were either over¬
hard to work out without sub¬
key
questions.
First
is
the
matter
stantial
markdowns.
Since
the
sold, or were too eager to be a
of suburban or outlying stores and
price structure seems to be rather
jump ahead of competition.
new
shopping
centers
versus
Here are two amusing, although
solid, my hunch is that these
markdowns will not be taken and
Dated June 1,1954
hand,
there
as
that
Mountain Fuel
But
-The
regards profits is
as
fected in recent years by the con¬
tinued rise in expenses, on the
one
With
UP
dollar sales.
as
little
of
per
completely
facilities
margin is running
higher than last, year, as
expenses.
Operating, profits
re¬
before taxes for the average store
the
probably
are
slightly
lower than
on
background,
conditions
.
should
be
things,
things, not dol¬
are
less of your needs.
tricity,
services,
Production
Prospects in Retailing
tion,
vacations,
count for the increase of
promoters.
Consumers buy
lars.
actions
year
and
produce
not dollars.
be holding tight to his country,
being tremendous, may1
Instalment credit, at long be making surpluses
of
goods
last, has stopped rising. Thus, 1 even though dollar sales may not
would guess that we would con¬ increase.
Dollar
sales
may
be
tinue at about the present level satisfactory even though we may
of business activity until well into be producing more physical units
the Fall. Probably a general pick¬ than we can digest; thereby creat¬
up should come only toward the ing
another inventory problem.
end of' this year. It m&y not be¬ Therefore,
watch the factor of
come really noticeable until early
physical volume and unit trans¬
1955.
Thursday, June 10, 1954
..
population
to
seems
clothing for the children, regard¬
medical
dollar
money.
travel,
e c
of
amount
Manufacturers
consumer
a
textiles,
far in 1954 in-'
1
The
you
expenditures
e
off.
the
as:
sales.
very poor performance in retail
industry.
First, as
hosiery and apparel. If gards sales, /we expect that
buy a new car this year, ypur trend should continue about
family
doesn't
necessarily
cut the present level throughout the last* year.
down on its clothing and food bill;
There are Signs that the profit
year. For department stores this
and conversely, if you do not buy will mean we will show a
in
a
department
store
fairly picture
durable goods this year, you don't
high sales loss in the period May should be pretty well stabilized.
buy more suits, shoes, dresses or through August, when sales last Profits have been adversely af¬
peacetime
record. On top
of that,
their
for services
'
sales
Unfortunately
of
inventories
of these have to
around and some
Retailing executive points to hard sledding in his business
during last few
plenty
well
as
.
as
legally be distributed.
i
quite
interesting.
losses
have
been
The
in
furnishings are running close to
last year's figures and, in some
cases, ahead. Textile departments,
particularly cottons, towels, sheets
and
blankets, have shown plusses,
although silks, woolens and rayons
The First Boston Corporation
'i
continue
weak.
has
disappointing. Even al¬
been
Apparel
so
far
portunities
for» the
large scale will be a miracle indeed if the
shopping owner, the lessors, the lessees and
centers very bright.
Even these even the bankers make any
should be taken with a grain of
money out of a large proportion
suburban
salt.
stores
Real
and
estate
men
have made of the
shopping centers now being
optimistic forecasts of promoted throughout the country.
or de¬
And P.S.—Perhaps some of this
velopments may expect. We have philosophy or warning may, very
more
than
the sales
individual stores
lowing for the late Easter, dollar frequently found that our own es¬ modestly, be applied to branch
timates of potential first year sales banks
to
be
are
opened
in these
running 3% or 4% be¬
have been half or even a third centers.
hind last year. So far, sportswear
of the figures offered by the real
Another point is that the park¬
and men's furnishings are the real
estate promoters. I do not intend
ing problem has been exaggerated
bright spots. Probably the apparel
to suggest that there are not tre¬ in
business should improve, but we
many of the smaller cities. The
mendous opportunities for well- downtown merchants and the
city
are
going to have to work at it,
located, well managed shopping governments
have
been
doing
and
there may be higher than centers and suburban stores in the
quite an aggressive job of im¬
sales
Eastman, Dillon & Co.
Blyth & Co., Inc.
Goldman, Sachs & Co.
*
Lehman Brothers
Merrill Lynch, Pierce,
Fenner & Beane
Boettcher and Company
Hemphill, Noyes & Co.
Bosworth, Sullivan & Company, Inc.
Moore, Leonard & Lynch
White, Weld & Co.
J. A. IIogle & Co.
Singer, Deane & Scribner
Lester, Ryons & Co.
Brush, Slocumb & Co. Inc.
Number
One
i
Edward L. Burton &
Company
larger metropolitan areas. More¬
over, the trend to the suburban
normal mark-downs.
other
of
Transactions
point that should be
mentioned is the physical volume
stores may
proving parking facilities. This is
a
move
which
should
adversely affect weaker
downtown
stores
in
such
large
couraged
by
stake
downtown
cities.
In line with the
But
stores
in
anyone
be
who
real
en¬
has a
estate.
importance of the
being built downtown store, I think that you
at such a rapid rate, that even the should
recognize the need . for
Watch the number of transactions home production lines which ac¬ their modernization. Many times
of
sales
versus
dollar
volume.
new
are
Volume 179
Number 5332
The Commercial and Financial Chronicle
...
(2537)
will
you
of
choice
of
branch
or
is
which
opening
large stake in
problem
Consume! Credit and Prosperity
facing the;
suburban
a
modernizing
town unit. When
a
the
encounter
store
a
down¬
a
Associate Professor of Finance,
downtown unit,
a
I do not think the decision for the
branch
of
should
be
the
at
Dr.
Each
considered
The
investment should
on
other
its
own
essential part
point
that
I
and the
consumer credit
industry has had a creditable part in
performance, contrasts output and sale of durable goods,
produced under low cost mass production in this country, and
in foreign nations. Says consumer credit
industry will con¬
tinue to be an accepted and
necessary part of our productive
and distributive system. Offers estimates of future consumer
be
merits.:-
this
>
would
like to stress is that when you are
considering
a
loan to retailers
remember that this is
a
you
per¬
very
sonal business. Overall
figures can
actually
misleading.
What
counts, for example, in an inven¬
tory, is its actual physical compo¬
be
sition and
and
wear
resent
also its
fashion
Ready-to-
age.
items may rep-
risk if they are even two
a
months old, which is certainly not
the
case
for
men's ciotning
mens
clothing or
furniture. When considering mak¬
ing'
loan, bankers had better be
a
su£e to get an age analysis of that
item of current assets of a balance
.sh^ety known
as inventory. There
in-probably a great surplus of
unsalable, over-age merchandise
in 'this
kind
of
a
market
which
expenditures based
or
cost of produc¬
tion.
;77.,:
\77,;777:
V
Also, because of ~the addition
of* thousands
of
available
new
background to a discussion
the importance of Consumer
of
Credit to continuing
js
example)
the^ problem of^tobso-
iver becor^s^reaTeTand
greater and
becomes
over
Even
.
greater
greater.
°
mventory
the ability of the
is
re-
taner, nimseii, ana 01 nis organization. Someone who knows the
business,
who
has
flare for
a
it
and the willingness to work hard,
can
be counted upon to make a
profit and overcome even the most
severe
handicaps. On the other
hand,
financial
port
the best
even
status
location
cannot
and
long
sup¬
retailer who cannot do his
a
job.
are
which
but
be
a
peri-
prosperous
one
distribution will rise.
and
to:
should
a
of intense competiThe importance of retailing
one,
tion.
you
coming into
now
I
think
will find it worth your while
study the retail situation in
town and find out the stores
people who are promising,
and help them do a job for you,
present
eco¬
and
and
the
tion
may
be
to
near-term
fu¬
most
ture.
are
presently
gaged
in
a
community,
Donald
subject to short-run fluctuations,
that the level of consumer spend¬
ing depended almost entirely upon
Fergusson
a
New
York
'
-r
'
Winners in the golf tournament were:
Ehrman, Lehman
Brothers, and V. Theodore Low, Bear, Stearns & Co.—74. ^
;
Asiel
industrial productive facilities but
American
consumers
were
also
employment—was
through operations designed to in-
supplied with goods and services
in such quantities as to constitute
the highest standard of living ever
fluence
realized.
At
the
contributions
being made
of
to
Finally,
very
lations
of
piled
same
tures
foreign
were
had
result of
as a
our
also
been
new
automobiles
and
have
point
fallen
other
been
where
off
tion
has
tremen-
semi-finalists.
given
to
that
level
to
&
consumer
for
been
now
a
con-
future
credit
out¬
factors
I
pos¬
This
announcement is
The
new
•
.,
toward which
economy
independent of
of income.
American
Ex-
more
to
sell
business conditions
are
all
.
which
to
affect
,
f
spend
or
consumers'
not
f
1
j.-.
Convertible Prior
,,
'•-•••
our
offer
to
buy
>
high income economy,
savings
share)
P.M., E.D.S.T.,
certain
on
by the Company to holders of its Common Stock of
June L 1954, which Warrants expire at 3:30
June 17, 1954. The Underwriters have agreed, subject to
conditions, to purchase
any
expiration of the Subscription Warrants,
ferred Stock, Series C, 3 K %. at prices
going into debt, or, onthe other hand, spend appreciably
less than their income and still
live welL This volatility of consumer
markets
is, however,
a
short-run phenomenon."
statistics
may
and
offer shares of the Cumulative Pre¬
on terms as set
forth in the Prospectus.
■
Subscription Price
to
Warrant Holders
for
pause
be
our
moment
a
7:
$100
per
Share.
'
the
was
trading
Arthur
assistant
department
Warner
e«'Association
.
manager
&
of
Co.
for
He
is
of
J.
an
New^ork!™
With Slayton Co. Inc.
(Special to The Financial Chronicle)
ST.
LOUIS, Mo.—Roy L. Beckley has become connected with
Slayton & Co., Inc., 403 Olive St.
T
>
during the
years
investment
and
It is thus apparent:
(1)
that
address
the
New
1954.
by Dr. Ifcr^usson
State
New
Consumer
York
y f*
*
iJ.\
Finance
•
:
before
May
,
.
City,
.
,
cause
.7,
of
19,
;
.
..
'■*
'
,>
Copies of the Prospectmo.wuty be obtained many State m which this announcement
from only md• of the underwriters, mcWiwg the under signed, at may
^circulated
'
MSj
.
I**",
,
f
V.
im
legally offer these
compliance with the securities laws of Mich State.
instability in
some
White, Weld & Co.
interesting to observe that,
The First Boston Corporation
Eastman, Dillon & Co.
r
Blyth & Co., Inc.
.
Glore, Forgan & Co.
maintaining high-level prosperity,
Thif. .lncfeasf is expected to be
su^mient not only to provide for
8r°Wth of the economy but^also
Kidder, Peabody & Co.
•
clines in goverament expenditures.
Lehman Brothers
Merrill Lynch, Pierce, Fenner & Beane
Smith, Barney & Co.
Stone & Webster Securities Corporation
during 1954 and subsequent
and
from
expenditures
consumer
York
Association,
>
Goldman, Sachs & Co.
Harriman Ripley & Co.
Incorporated
Lazard Freres & Co.
to offset current and expected de-
ex-
the
remaining one-third. approximately equally divided.
,
i
1948-53; whereas
Government
penditures together have made up
•An
--
7
U-»* r*».
economy.
?s already mentioned, an increase
m consumer spending is now
upon in many quarters as
the. answer to the problem of
important expendiconsumption have been
Exchange.: Mr. Kelly will be in tures on
firm's .trading
department, among total money expenditures
which specializes in public utiliduring recent years. The statistics
ties, natural gas stocks, and indus- indicate that
they have constituted
trials.
Mr. Kelly was previously
about two-thirds of total expendiwith:. Burnham & Co. and prior
tures on Gross National Product
thereto
a
It is
to
consider how
the.
(,
.77':
consumer
on
on
Consumption
Let's
v
unsubscribed shares and; prior to and after the
of its attention
Important Expenditures
Stock
33A%
or
spending and saving during the ■
improvement of na— post-war period- indicate that fitter
tianal;-living
standards."! Thus tuations in
this component
of •
consumer- sperottnr »* now
ex- total expenditures, have
actually *
pected to piay afr-evet* mem in*substantial from year to year '
portent part than prevfawrfy In and everi from
quarter to quarter->
maintaining the level of national Thus consumer
spending fluctua¬
income and employment.
tions may in themselves. at times
members of the New York
of these se.urities.
July 1, 1964
per
to^ a sustained
Joseph M. Kelly
any
Subscription Warrants evidencing rights to subscribe for these
shares have been issued
millions of consumers may,
the one hand, spend more than
their income by drawing down
The
an
spend.
record at 3:30 P.M., E.D.S.T., on
Report:"
to
(Par Value $100
-
"Economic
,
solicitation of
Cyanamid Company
Transferable
"In
nor a
Cumulative Preferred Stock, Series C,
on
January 28, in
these terms; "Our approach to a
position of military preparedness
now
makes vif - possible for the
offer
ISSUE
580,235 Shares
many
Report, of
II. S.-4o- turn
an
The oj/cring is made only by the Prospectus.
This changed attitude is also given
expression
in
the
President's
:
as- We are now ostensibly
moving has
Co., been designated a high consumpCity, tion economy to replace the pre1
viously described high-production
economy. This idea has been given
expression in the President's Eco-
nomic
neither
ex-
price movements and about
decisions
declining steadily
>
* :
several, months.
,;7
Co.
•
sequence,
Wasserman,
Richard
compo-
consumer
reasons
John
were
in the special event were William L. Moise,
Blyth & Co., Inc.; Donald G. Nightingale, Halsey, Stuart & Co.;
C. Noel, Van Alstyne, Noel & Co.;1 George T. Flynn,
Hornblower & Weeks; and Randolph P. Compton, Kidder, Peabody
much
the
tournament
winners
umer
pectations with regard to future
incomes, attitudes with respect to
current prices expectations about
future
As
out
for
has
somewhat.
in-
de-stabilizing influence of
spending. It has been
occur
consumer
satisfied
the
investment
been
the current
housing,
demand
of
tennis
penditures—especially in the area
of durable goods, the purchase of
which is readily postponable—are
subject to sharp short-run fluctuations. These fluctuations may
largely completed (barand bigger war scares)
but consumers' needs for
national
the
Co., and David Evans, Blyth & Co., Inc., with Gilbert
Wehman, White, Weld & Co., and Leonard Frisbie, Frisbie & Co.,
NEW
productivity, not only have
military and industrial preparedness
level
of total
pointed
dous
ring
of
in
&
consumer
;
Thus,
the
nent
sible
accumu¬
inventories
Finalists
expendi-
expenditures!
Recently much more considera¬
countries.
substantial
thus
volatile
more
by the fourth quarter of
up
Robert E. Clark, Calvin
Bullock, and Howard K. Halligan, C. J. Lawrence & Sons.
and
come
time, large
materials
and
—
money
elected
were
G. A. Alexisson, Granbery,, Marache &
Co., and Robert W. Fisher, Blyth & Co., Inc.—78-15-63.
nesian panacea, for maintaining;
the .level of total
been
& Co.^
Dodge & Co. and Wickliffe Shreve
du.ring
that period there
an
was not
has
Cook of Spencer Trask
Christie Cup for Match Play against Par:
extraordinary build-up of
military strength and of our basic
Dominick
members of the Board of Governors
new
three-year terms—Harold H.
the
only
Joseph Ludin
&
Bond
re- the level of disposable income, asoutstandings/'guns suming a given distribution of
antj butter" period in history. For that income. As a result, the Keyas
Joseph M. Kelly has become
Broadway,
Jr.
Candee Cup for Low Net:
period which deserves to be
sociated with Starkweather &
HI
Walker,
Dominick
Ex-President's Cup for Low Gross—Frederick L.
not
was
of
John W. Dayton, Jr. of Clark,
of Hayden, Stone & Co.
w
period of
ferred to
has
Starkweather & Ce.
for
,
consume
Macdonald
H.
place at the Club's annual meeting held in connection
the
Three
in¬
maintained that the
-propensity; to
standing, which had reached its
highest peak at the end of 1953,
Joseph M. Kelly With
economists
stabilizing
consumer
his followers
war
prepared^
durables
your
"new"
the
H.
Club Field Day at Sleepy Hollow Country Club,
Scarborough, N. Y.
G. H. Walker, Jr. of G. H. Walker & Co. was elected VicePresident to succeed Mr. Macdonald. Joseph Ludin of Dillon, Read
& Co. Inc. was elected Secretary and Ernest W. Borkland, Jr., of
Tucker, Anthony & Co. was named Treasurer.
V
expenditures
upon the economy. You may re¬
call, for example, that Keynes and
trans ft ion
1951.1953
the
stressed
fluence of
en-
-frbm the
the
and
of
have
We
tion took
with
level of total money expenditures.
Until quite recently, it is true,
play in the
Gt
elected President of The Bond Club of New York for the coming
year to succeed Wright Duryea of Glore, Forgan & Co. The elec¬
percentage change in the level of
consumption expenditures w i 11
have: a significant effect on the
that consump¬
your
:
role
expected
Ranald
employment in the U. S.; and
(2) that even a relatively small
nomic position
Macdonald
H.
R.
on
mine the level of national income
and
themselves
expenditures
money
currently produced goods and
services which, of course, deter¬
something
say
1953.
We
od
prosperity, it
total
our
ness
wS?fit
to
necessary
by far the largest component
are
of
about
items made possible by man-made
-^md
fibres and plastics, and ever in-
creasing style and color elements
the "Survey of Consumer Finances."
on
As
affects the final selling price, re¬
gardless of cost
Syracuse University
Fergusson, in maintaining consumer credit has played an
in producing a high living standard in U. S.,
expense
maintaining the downtown
store.
Macdonald President of N. Y. Bond Club
By DONALD A. FERGUSSON*
store has such
a
13
thus
prevent
As
economy
continuing and accentuating
its downward
j
our
years
a
,
Union Securities Corporation
course,
matter of
fact,
as
on
page
President's Report points out,
Continued
the
"in
56
4,19^4.
-
14
The Commercial and Financial Chronicle
(2538)
the
Is Aid to
peoples
Undeideveloped
resources and improve their
working and living conditions by
encouraging the exchange of tech¬
nical
the
BEN JAMIN
By
J. BUTTENWIESER*
knowledge
countries
City
Partner, Kulin, Loeb & Co., New York
tions
which
Mr. Buttenwieser, maintaining aid to
well
as
those with
to
as
underdeveloped countries
matured economies is equally im¬
Southeast Asia.
*
>
*
•*... ■« *
•
•
"Shirt-Sleeve
<
•
their
take
$3,497,000,000
requested, of which
was
fense Assistance.
the
$223,400,000 is for
fense Support.
factor
ating
v
short
lo-ng
$131,600,000
is
Cooperation.
or
range
Mutual
for
Der
Technical
$306,400,000 is for Development
country.
$241,300,000 is for Relief
Rehabilitation, and
country,
I
other,
any
gauged
Benj. J. Buttenwieser
be
in
and
other
for
pro¬
grams.
like -that of
must
is
$70,000,000
in such detail not for the purpose
of
(1)
strategic; (2) political; (3) eco¬
nomic; (4) social; and (5) moral
terms. Predicated
each of these
on
five bases, I think it can be readi¬
citing these many figures
am
boring
huge
the
as
is
sum
the
under¬
to
is
countries
developed
that,
overall,
aid
actual
for
amount
but to show
you,
relatively
will revert to this in. due
small. I
course.
ly demonstrated that aid to under¬
developed countries is in our
enlightened self-interest.
First, let
own,
Both
of
Categories
Aid
Equally
Important
clarify what is in¬
volved in this foreign aid, both
from the viewpoint of its purpose
and its magnitude.
us
While I realize that today's dis¬
cussion of our foreign aid is di¬
rected
portion extended
"Underdeveloped Countries," I
to
foreign aid our coun¬ have, nonetheless, cited all of the
try has extended, since it has been above expendituibs. The major
in a position to render such aid, portion
was
to countries which
is far too broad a subject to cover surely are not in that category.
the
considerations
I
adequately within the relatively However,
will subsequently endeavor to ad¬
narrow confines of our discussion
The
this
total
afternoon,
fined
to
sequently,
let
with
focus
us
unless it is con¬
period. Con¬
certain
a
permission,
your
attention
our
only
on
demonstrating that this
our
own
self-interest,
will, I think, apply equally to ma¬
duce,
aid
as
is
in
tured
underdeveloped
or
tries.
War n.
country against the storms of
economic stress is, from a prag¬
U.
S.
foreign aid in this post¬
has; in the main, been ex¬
tended
the
under
following cate¬
gories:
UNRRA
(United
Nations
Relief and Rehabilitation
Admin¬
istration)
(2)
GARIOA (Government and
in Occupied Areas — pri¬
marily Germany and Japan)
(3) Marshall Plan
(4) UNETAP (United Nations
Expanded
Technical
Assistance
Relief
Program)
(5)
(World
Health
Or¬
Administration)
(7) MSA (Mutual
Coopera¬
(Foreign
Administration)
very
their
Operations
knowledge
common
render
programs
agen¬
super¬
fluous any elucidation of the pur¬
extent
or
aid
of
they
rendered.
Now
aid:
to
the
measure
of
this
According to the Randall
(p. 10), "From the end
war
(World War II)
through June 1953, U. S. expendi¬
—
the
tures
in
so
interest
is
of
far
as
help
By
evaluation
the
form
oL
able
aid
are
completely
*
this
of
countries
to
which
those
would
the
cite
very
of
siz¬
matured
well
as
following
as
I
cogent
port (p. 10):
such aid
friendly
forced
chases
to
American
of
and
.
.
.
...
spent.
$7,300,000,000
.
.
has
.
A
ensued
additional
been
made
1954, of
73%, is
which $5,300,000,000,
military aid,
*A
and
talk
by Mr. Buttenwieser before
League of Women Voters, New York
City.
the
goods
chaos
abroad.
pur¬
With
which
posal, they were able to maintain
politically tolerable levels of con¬
sumption; to carry out, programs
and
develop¬
ment needed to restore their over¬
all levels of
production, and grad¬
ually to reduce their dependence
on
our
1950
to
the
assistance; and after June,
speed up their rearma¬
common
this
think
I
appraisal
in the interests of
defense
of
the
of
very
free
objective
foreign
our
aid
is
eloquent testimony toward estab¬
lishing how
vastly
we
would
be
deluding ourselves if
truistic.
aid
to
As
to
is
the
we naively
completely al¬
more
underdeveloped
specific
countries,
the very language quoted below
from the legislative basis of "Point
4" aid
clearly reflects its genuine
purpose:
"It
is declared
of the
U.
S.
to
to be
aid
the
the
the
developed countries
Reserve action in reversing
of
consumer
a
more
than
makes
dependent on
from
foreign
us
and
it
the
upon
have
I
the
materials
raw
Utah.look
the good
times
you have been
having here,
in
population, with in¬
crease in per capita
consumption
of end products, and with inven¬
tion
of
useful
new
products
to
open new avenues
of demand. The
population
factor
alone
25% to
needs if it compounds
our
the
at
rate
of
in
invention
would
be
what
doing
lion
of
coun¬
that
were
think
try, I
1.5%
was
•
David
M.
to
Kennedy
the
try, and I know it was a mistake
work;
but those who review the
of the last half cen¬
cannot weight them lightly.
to leave the
experience
Utah for the hubbub of Washing¬
"We
depend
on
foreign
sources
today for over 30% of our re¬
quirements of copper, lead and
peaceful mountains of
like
about
extent
some
talk
to
to
you
efforts
cf
1,
excise
permitted to
haven't done too good
we
to the public, or to the Con¬
for
gress
a
tax
The
that matter.
Revision Bill
Tax
not intended
was
reduction bill.
as
Our whole
of the tax
system has grown up over the
zinc; over 50% of our require¬ Treasury.
It is not very difficult
years
by tax increase upon tax
ments of tungsten,
bauxite, and for me to summarize quickly the
increase, one upon the other, it
antimony; over 75% of our re¬ aims and objectives.
I think I
has become a hodgepodge of tax
quirements for chrome and man¬ could say that our aim in the
legislation.
ganese; practically all of our nickel Treasury is of economy, our aim
It was the year of 1876 that our
requirements; and all our require¬ is lower taxes, our aim is to re¬
whole tax structure was revised
ments of tin, natural rubber, and
vise the tax burden and our tax
the last time, and this adminis¬
jute."
statutes
so
they will get away
tration
has
had a team of
the
Many of these raw materials from the things that are so irri¬
Treasury working for 16 months
come in substantial measure from
tating and difficult for us now,
in connection with the Joint Com¬
underdeveloped countries.
Thus, and we can do that better at a
mittees of the Congress, to take
It is not
strengthening their economies is lower level of taxes.
the whole tax structure and see if
Of direct, strategic value to the quite as easy for me to talk to
we couldn't put it into some kind
United States today.
This is not you about our problems because
of shape.
merely presently true, but is prob- > we seem to have so many, and I
ably of
importance
standpoint.
even greater
the long-range
from
With cooperative and enlightened
problems
objectives
and
have
to the conclusion there;
H.'*We have had criticism that this
come
is
are
no
easy
the
in Wash¬
problems
Treasury, perhaps none
at
underdeveloped countries of ington.
today may well become the stra-,
This Administration has made
tegic arsenal of tomorrow, when,' real progress in cutting Govern¬
as envisaged in the foregoing quo¬
ment expenditures.
I think the
tation, even our country, pres¬ record there is very good.
Sub¬
ently rich in most raw materials, stantial reductions in Government
will find
itself short of them.
In
this
sense, foreign aid to under¬
developed countries is not benevo¬
lence but insurance.
Importance
From the
defense
to
Strategic
Defense
standpoint of strategic
values, aid to the econo¬
foreign countries who
mies
of
share
our
devotion
freedom
and
cleavage
to
democracy,
cannot
peace
over-estimated.
the
In
between
be
present
the
diabolic,
false creed of communism, on
spending
this
have
If you take
the budget estimate of the previ¬
the fiscal
1954,
billion
for
The
budget deficit was $9,400,-
thodox
weapons
munism
of
not
does
war.
Com¬
thrive
among
peoples whose standard of living
is
high
or
on
the rise.
Therefore,
anything the U. S.
can do toward
helping to improve the lot of un¬
derdeveloped
countries will play
lasting role in strength¬
ening these countries to resist the
a
vast and
I
recognize that, in these times
of armed threat from the Soviet
and
its
fense
satellites,
is
an
Nonetheless,
strike
a
adequate
absolute
I
think,
de¬
necessity.
we
must
reasoned balance between
that
any
country
Continued
on
—
espe-
page
54
viduals because
we
omy,
are
we
one
are
viduals can't prosper
ness
and
prospers,
one
econ¬
Indi¬
family.
unless busi¬
business can't
prosper
unless individuals gener¬
ally
prospering.
are
ing
to
at
that
reduction
lowed
in
for
the
$2.9
billion.
billion
a
excise
in
the
taxes
not
of
al¬
budget estimate
that would push
deficit up to about $4 billion
in fiscal 1955, so the direction has
been
present,
changed in deficits.
on a
Cash Basis
change from an admin¬
istrative budget over to the cash
budget, which measures the cash
this
you
to
the
year
our
economy,
budget, is
find
approxi-
you
*A
talk by
Mr. Kennedy before the
Twenty-Second Annual Convention of the
Edison
Electric Institute, Atlantic City,
New
Jersey,
June
2,
1954.
of
If you
dollars
the
flow
million
directly to individuals, so
billion, $2 billion
$2 billion is largely the Excess
Profits/tax that was permitted to
expire.
add
If
you
over $3 billion, between
$3
$3V2 billion—we hope. Look¬
forward to fiscal 1955 it is
estimated
of
If
The deficit
will be
for the current fiscal year
Budget in Balance
blandishments of communism.
can
$7,400,000,000 will go to
individuals and just over $2 bil¬
lion to the corporations, and that
and
or¬
you
pull out the parts that go to busi¬
ness and the parts that go to indi¬
that of about $5
just
more
don't1 think
I
dividuals.
year
to June 30 and $5 bil¬
up
in my judgment, more potent and
than the
the
lion off next year.
000,000 in fiscal 1953.
armor
not as much to in¬
to industry and
year
is,
durable
Big Business administration,
are going largely
a
that the benefits
take just from the total
that has been given to individ¬
ending this uals and to corporations, if you
June 30, our cut in expenditures
take the $3 billion in January to
is $12 billion. Now that is a siz¬
individuals, that billion of excise
able
cut
in
a
relatively short taxes will
probably largely go to
period
of
time,
that
takes
it individuals; and then in the Tax
through the next fiscal year—$7 Revision Bill there is about $800
administration
other,
improvement
office
took
16 months ago.
hand, and the benign, sound
principles of democracy, on the
economic
since
made
been
Administration
about
the
one
funds
policy
of
job in explaining this tax pro¬
gram
to
and
aims
our
tax that was
Now
a
ton.
would
billion
$1
taxes
Jan.
of
as
expire, and the Tax Revision Bill.
.
I
reduced
includes
Profits
indus¬
power
income
individual
taxes, and it includes also the $2
billion
estimate
of
the
Excess
mistake
a
leave
guess¬
tury
it
i t
somtimes
now
Com¬
mittee, which we hope to pass be¬
long, that includes $1,400,000,000 tax reduction.
The total
of $7,400,000,000 includes $3 bil¬
t
the
is
Finance
Senate
the
are
ou
you
add
will
annually for
15 years. Forecasts of the further
additions through expansion of per
capita consumption and through
new
ab
the
about
fore
think
and
in
year
that
bill
revision
before
are
That includes the
$7,400,000,000.
tax
we
reduced
be
calendar
current
see
as
year.
will
Taxes
I
among
and
you
having this
in
As
such
reduction
tax
a
com-
out
p a n y
acces¬
.
substantially that we can have
so
Mr.
Gadsby's
sources
reasonable cost of
the materials produced. This de¬
pendence will increase with
growth
was
pany,
pre¬
mately in balance on a cash basis.
Now it is only because we have
been able to reduce expenditures
first job
with
the Utah Power and Light Commy
just out of knee pants
This
materials
availability,
"tight money" policy has
by making credit adequate.
special interest in the
a
industry since
power
produces.
and
cash
a
a
vented drastic deflation
beginning of World
II, the United States has be¬
come
on
year,
money" program under an indepen¬
System, and points out recent Federal
dent Federal Reserve
economies:
"Since
War
Says
irritating elements.
attention to the "honest
think
those with
or
its
remove
the
lav/s and in adjusting the tax
and Administration
has made real progress in cutting expenditures. Denies tax
revisions favor big business, and points out pending tax
measure is a tax revision and not a tax reduction bill.
Calls
Ran¬
I
and
to
of
problems
and
aims
basis, budget will be in balance this
eign aid, whether it be to under¬
and
eco¬
American aid placed at their dis¬
reconstruction
burden
ous
might
resources
further ^believed that it
available for all purposes for fis¬
given,
have
degree that
a
political
have
the
been
would
restrict their
services to such
nomic
not
countries
43)
explains
aid.
my
undeveloped,
are
world."
$41,700,000,000
(net). Of
this, $33,000,000,000 was economic
aid and $3,700,000,000 was mili¬
tary aid.
In addition, on June
30, 1953, $7,900,000,000 of.mutual
security funds had been obligated
or
re¬
self-
own
economic development,
to
cal
un¬
me
substantiating
of
way
own
ment programs
not
our
an
parallel.
grants and
loans to other countries amounted
but
dissimilar
not
concerned,' the results
such
of
as
Report,
of
iterate,
well
of these
names
the
and
pose
standpoint,
helping to build up
derdeveloped country. Let
been
Security
Agency)
(8) FOA
The
matic
from
"Had
(Technical
tion
of
words, buttressing
observation from the Randall Re¬
WHO
ganization)
(6) TCA
cies
In
a
war era
(1)
other
coun¬
the period since the end of World
(p.
spokesman
Administration in revising tax
find, clearly revealed,
the major motivation of our for¬
that
to
Treasury
will
sibility,
The security
and welfare of
our
.
imported
program of
any
can
quotation from
Report
matured
$945,000,000 is for Direct Forces
Support.
every
t i
1955,
$1,580,000,000 is for Mutual De¬
must
t h fcr
mo
dall
you
fiscal
For
primacy
over
27%, is economic
or
aid."
overall
concept,
o
$2,000,000,000,
Treasury
such technical
capital
Diplomacy .")
with the following
this
Couple
further
The
paramount consideration
underlying the policy—domestic
or foreign—of any country should
be
its
security and its welfare.
These two, in
Assistant to the Secretary of the
creating new sources of wealth, in¬
creasing productivity and expand¬
ing purchasing power." (p. 270 of
fully justified in strategic, political eco¬
Suggests several billions an¬
needed to fill the need for capital in India and
nomic, social and moral terms.
are
By DAVID M. KENNEDY*
condi¬
effec¬
tively and constructively contrib¬
ute to raising standards of living,
portant, asserts it is
nually
and
capital to
provide
under which
Both Individuals and Business
and
skills
and
flow of investment
assistance
!
Tax Revision Bill Will Benefit
areas
their
Countiies in Out Own Interest?
Limited
economically un¬
to
develop
of
derdeveloped
1954
Thursday, June 10,
..
.
the
Now
we
this
that
feel
tax
in
the
reduction
Treasury
will
help
materially to push the impact on
the
to
economy
a
lower
in this getting back
of government
level
expenditures. Government spend¬
only be cut in two ways:
to lay someone off the
Government payrolls, or else we
have to reduce the supplies we
ing
can
we
have
purchase
are
from
industry.
Those
the two ways we have of re¬
Government expenditures
and in either case, either directly
or indirectly, it has an effect upon
employment and it takes time for
an adjustment in the economy or
ducing
Continued
on
oaae
56
Volume 179
Number 5332 A
The Commercial and Financial Chronicle
.
(2539)
■
y,r
r
■
15
Jg
•
•
t
both from the
same
that would
withstand the strain of
GREATEST
single factor in the surge of air
conditioning into a year-round business
has been the
way to
perfection by Philco of
apply what is known
refrigeration in
"Reverse
the
either heat
or
Ordinarily
means
so
cold
practical
(
reversing the flow of
that the same unit delivers
as
room
a
a
"reverse cycle"
single-room unit.
a
cycle"
refrigerant
as
reversing, without failure.
Philco
years on
ated
worked
(thereby cooling
it), and releases this heated air outdoors. Air
erant,
they could
reverse
the flow of the refrig¬
the unit would absorb heat from outdoor
air (even
in freezing weather), and release this
But
no
one
depended
a
size
had been able
to
work
the development of
ANOTHER
room
This
at an
acceler¬
valve that
a
out
the
a system
than
more
o'f
use.
born, from Philco Laboratories,
air and
it cools,
new
superior
and heats
as
fast
as
fall, without need for
heating.
It is this kind of
fundamental development
that has made Philco the leader in Room Air
Conditioning for 17 straight
the
years.
It typifies
integration of Research and Application
that is
responsible for Philco's dominant posi¬
tion in other industries, as well—Television...
Radio... Electric
Ranges.... and Refrigeration.
And the end is not in
sight!
it cools.
development, coupled with Philco's
system
for wringing moisture out of
replacing stale air continuously with
fresh, filtered air,
dependent
now
on
provides complete
coast to coast
in
year-
areas not
central heating.
And in other parts
single-room unit. The solution
upon
was
round comfort from
heated air indoors.
problem in
valves
Finally, they evolved
than three
designed an
the first air conditioner that heats the "same
conditioning engineers had known for years
that if
to test
more
even
freely and faithfully for
Thus
air conditioner absorbs
room
rate.
chilly days of spring and
central
100,000 cycles—equivalent to 133 years
required.
heat from air inside the
engineers worked
this problem. They
automatic machine
constant
✓
makes comfort
FIRST FROM
of the country, it now
possible for the first time on
PHILCO
LABORATORIES
16
The Commercial and Financial Chronicle
(2540)
age slashing, the theorists are
far from dismayed.
THE MARKET...,AND YOU
*
STREETE
By WALLACE
The long4awaited shakeout the 325-330 level of the
i
in
the
stock
market
came
since
the
bull
mraket
industrials worked out almost
ended
*
For
those
reason
V
*
who
insist
on
Blue Chips Slashed
that
which
forced
much
was
dimension
as
the
tape
four minutes,
the first
lag of that
sincq March 1953.
*
❖
Year's Most
*
a
chips that have led the
on
*
*
From
a
sic
new
seeing 315
lows
new
while
the
16
highs.
others
retreat to
of
technicians
that resistance would
come
in
be
as
as
logical limit
a
concede
low
"normal."
as
that
a
295 would
In
short,
though surprised by the
some
in
a
four
points
matter
of
*
similar
couple of
hours.
sav¬
*
*
The reaction also
ended, at
of the
ladder
was
split. Thh
new shares made
high posting of $23.67
shortly after, and dropped to
a shade above $11
last year.
their
The low
wasn't
by
test
any
subjected to
stock, al¬
the
though it was far closer to
that figure than to the $14.37
high it posted this year.
*
#
*
Diamond T Motors had
erratic time of
when
ance
a
an
it, what with
a
perform¬
it became known
$20 cash offer had been
made
for
terest
of
the
22%
its
stock in¬
chairman
at
a
approximately half that
was
level.
This
spurred
enough
buying to push the issue to its
...that Florida's world-famed natural climate is matched
an
equally
warm
ventures
new
by
and inviting "Business Climate" in which
and private enterprise grow
and prosper!
best level since 1941. But
jection of the offer
the
simultaneously with
general market weakness
the
and
with
shares
conviction.
could well
.
the
IN FLORIDA SUNSHINE!
\
CONTENTED WORKERS
Of HIGH BUYING-
HAVE HIGH
POWER
X\
~
MORALE
the
ex¬
mar¬
the
mid-
dustrial average was some
ventures
can
—
Florida's full advantages for relocation or
entirely new
be
fully realized only through extensive on-the-ground study. If you
will advise you as to the area we serve, assist in securing infor¬
mation from local sources and
help you, in other ways, to get comfortably located.
Address your inquiry to Industrial
Development Service, P. O. Box 3100, Miami 32,
are
interested,
we
Florida.
The
LIGHT COMPANY
those
with
this
at
any
the
of
Chronicle. They are presented as
those
of the author only.]
N. J. Bond Club to
Hold Annual Field Day
The
Bond
will
hold
day
on
of New
Club
its
annual
Jersey
spring field
Friday, Jupe 18, at the
Spring Club, West Orange,
Rock
New
Jersey.
Activities scheduled for the day
golf, with prizes in all classes,
are
and
the
27th
bond
annual
competition
trophy
club
(awarded
to
members
recording lowest net to¬
tal golf score)—greens fee $3.00;
horseshoes
1:30
5:00
to
p.m.
all first round matches
ished
with
to be fin¬
3:00 p.m. — prizes for
finishing 1st, 2nd and 3rd;
by
teams
tennis,
darts;
swimming,
and
horseback riding. A special event
will be a golf exhibition by the
famous
trick
shot
served
from
armed
one
artist, Jim Nichols.
Luncheon
11:30
4
a.m.
be
will
/
be
to 2:30 p.m.; snack bar
the
on
open
terrace
at
and dinner will be served
p.m.,
from 6:30 p.m. to 8:30 p.m.
Members of the Field Day Com¬
mittee
are:
Outwater
Andrew
&
Wells,
C.
Spring,
Jersey City,
N.
J., Chairman; Philip P. Arnheiter, Adams & Hinckley, New¬
ark; Archie C. Barbata, Bank of
Nutley, N. J.; S. Jervis Brinton,
Jr., National Newark & Essex
j
Banking Co., Newark; Frank Cole,
F. R. Cole &
Co., Newark; Henry
Hegel, Federal Trust Co., Newark;
Donald E. Lane,. Merrill Lynch,
Pierce, Fenner &
Harry -I. Miller,
East Orange, N.
Estabrook & Co.,
James
Ransom,
Savings
Norton
Bank,
Beane, Newark;
Nubent & Igoe,
J.; Foy Porter,
New York City;
Harris Trust &
York
New
City;
Adams & Hinck¬
Rogers,
ley, Newark; H. Peter Schaub, Jr.,
Harry
P.
Schaub,
Newark;
Inc.,
Walter Stohl, Fidelity Union Trust
Company, Newark; Jerome C. L.
Tripp, Tripp & Co., Inc., New
Blair, Rollins Go.
Non-Conforming Steels
Steels
illustrated
a
differ¬
story that also describes
the novel recent markets. Far
Blair,
Wall
Rollins
recognizing the swings
the
business
cycle, the
stock world lately seems to
delight in running counter to
the
business
more
in
tions
of the
trend
tune with
money
and
nounce
Issues that
buoyant then
weaker
issue
now.
in
the
&
44
that Fred C. Sloan is now
with
the firm
in
their
Burr, Incorporated.
Taussig, Day Adds
far
Operations in most steel
plants have recovered sub¬
Inc.,
Co.,
Municipal Bond Department. Mr.
Sloan was formerly with Coffin
(Special to The Financial Chbonicle)
the gyra¬
markets.
&
Street, New York City, an¬
associated
from
lier this year.
&
necessarily
*
from the under70% of capacity level of ear¬
POWER
in
expressed
views
do not
F. G. Sloan Joins
*
stantially
£ FLORIDA
ran¬
100
points lower.
in
WE'LL GLADLY HELP
a
two.
price range back in the York; Stanton F. Weissenborn,
1946 bull swing when the in¬ •E'stabrook & Co., New York.
ent
tkFAST GROWING MARKETS
in
up
issue
selectivity of the
*
THERE'S GOLD FOR YOU
This
30's
people of Miami, Florida's largest community, united to provide
overwhelming proof that sound private enterprise is favored by all elements.
.
backed
illustrate
ket since it sold
.
re¬
came more
less
or
treme
a <* a
in all but
or
coincide
time
will
time when the market value
PROOF!
case
[The
the
on
Ashland Oil which reacted to
that
*
al¬
dom
*
situation
evaporate better-than-average
a
properly be described
fabulous
as
article
A
the brunt of the reaction. Du other end
Pont, particularly, suffered.
Recently popular items gave
ground to the extent of two to
four points in rapid order, in¬
cluding Procter & Gamble,
Aluminum Co., Republic
Steel, the recently split Illi¬
shade under
was a
♦
most of the rise would bear
technical
first time in 1954 the 22
weak with
was
$23.
way
dozen and a half points the
viewpoint, previous week as the courts
no special
damage was done approved a division of the
to the basic pattern. On the company into two units—one
traded made it the most lop¬ downside there are plenty of to take over the land
holdings
sided market of the year. Al¬ areas where support should and the other to become an
though it missed by a couple be encountered and from a operating oil division—backed
being the broadest market of chart viewpoint there is lee¬ up rather abruptly from the
the year, it was only a scant way of
nearly a score of 140 level and gave up a major
dozen and a half issues short points before the list would share of its sudden rise. Texas
of equalling the broadest mar¬ cause concern.
Opinions, as Gulf Producing, another fa¬
ket on record. And for the usual, are diverse with some vorite in
past markets, saw
impressive compari¬
built up in the on¬
slaught. Declines in more
than 900 out of the 1,240 issues
were
Predictions
best which
,
Lopsided Market
exceeded
laggard carriers, Canadian could
Pacific is well above its 1946
hazy talk that a fund was liq¬
uidating it. The issue has had
trying times ever since it was
split 2-for-l in 1952. The best
price reached was immediate¬
ly after the split and since
nois Central which backed to then it has lost
some
two points in any test
roughly half
of the 1953 and 1952 highs at a new low for the new stock, its value, which isn't the usu¬
the 112 level. This, while not Kennecott Copper and Beth¬ al
story since the market
too disturbing, certainly had lehem Steel.
adage is that a split issue usu¬
♦
*
*
ally fares well afterward. The
generated quite a bit of cau¬
tion.
Texas Land, which added a stock sold at $46 when it was
Some
sons
of Sharon Steel
want
price level that
the
predictions
that worked out pretty much
to the letter was that the blue
for the turnabout, des¬
mitigating factor in been few rises of such scope
the selloff was that volume, in
history without at least an
while a respectable 2,540,000, intermediate
correction, the
was
fully 150,000 less than rails have to take a good
the year's best which, inci¬
share of the blame. They did
dentally, was achieved with succeed in pushing their 1954
generally higher prices. This peak above that of early in
was
despite an early rush to the year, but then faltered by
as
for
remain
to
Another of the
Chief
late
which,
was far from year's low.
*
*
*
spectacular.
The
1954 high
relatively
made by the issue early in the
Aircrafts were no less re¬
modest. In fact, a year ago it
week was still below the $30 luctant to
suffered a larger decline on a
join the downtrend.
line against the $34 reached But the few
more or less routine shakeout.
points they gave
last year and the better than
*
*
*
up
could be well afforded
$40 Of 1952. Unlike most of after their recent gains which
It enabled the decline in this
index
pite the fact that there have
unload
temporarily, the sudden prominent on the selling side
strength in Canadian in the market turnabout.
new
Pacific
*
Thursday, June 10, 1954
more, justification in view of
Utilities, the haven when specific information, had been
the going is rough elsewhere, explained as being a mutual its halved dividend but ap¬
fund interest to nebulous parently this had been antic¬
lived up to their name and
uranium finds. The strength, ipated enough so that the ini¬
there was a noticeable retreat
Dow
tial reaction held above the
to this defense end of the list. however, left the issue in a
«arly this week but when it perfectly. The senior index
did show up belatedly it was has been
dawdling in that
far more of a stiff
jolt than range for some two weeks
had been expected.
Only in with all the earmarks of being
the climax selling on the out¬ tired after
climbing virtually
break of the Korean War in without interruption for some
1950 was the industrial index nine months over a span of
hit harder and for the rails 75
points.
*
*
*
it was the worst
one-day blow
precipitously in 1946.
*
least
..
.
ST.
LOUIS,
Mo.
—
Theodore
Lrenz has been added to the staff
of
Co., Inc., 509
of
the
Midwest Stock Exchange.
Taussig, Day &
Olive
Street,
Members
Goodbody Adds to Staff
were
(Special to The Financial Chronicle)
are
among
Virtually
division
the
every
was
DETROIT, Mich.—John E. Brick
is
now
with
Goodbody
Penobscot Building.
&
Co.,
Volume 179
Number 5332
..
The Commercial and Financial Chronicle
.
(2541)
supply
We Can Develop
Peacetime Atomic Power
or
weapons.
Fuel costs for atomic
steadily
building
By ROBERT LeBARON*
Chairman
of Defense
to Military
decrease.
be carried
atomic energy
the
defense
unclear
for peacetime
advances
toward industrial
power
in
Presents
growing needs of
blueprint of the atomic
a
sufficient
uranium
energy
use
My purpose in coming here this
morning is to tell you something
about the military and the peace¬
time
atom.
The
development
and
vital
our
of
is
in
country.
come
when
have
can
than
one
tomer
we
more
cus¬
for
the
atom.
that
Today
single
customer
the
military.
There
LeBaron
is
are
people who
say we cannot have atomic weap¬
and peacetime power at the
ons
time.
same
There
some
are
ple who believe that
we
peo¬
do
not
have
enough nuclear scientists.
Everyone feels that we need more
The
address
by
Mr.
Electric
LeBaron
Institute
Atlantic City, N. J., June 3,
before
Convention,
1954.
weapons
power.
or
is
We
iso¬
atomic
used
fire
creates
expensive fuel.
more
we
possibility of converting
amount of useful heat in the proc¬
terial
continue
to
expand.
growing rapidly.
There is little hope of
reaching a
"saturation stockpile" in these un¬
pansion
now
under
way
at
top
priority.
Only
a
-
in
same
small amount of fission¬
The
power
time.
portant
We
at
the
gained
im¬
programs
have
This
fact
was
not true
our
power
in the be¬
day
It is true today.
The Duilding of civilian atomic
power
plants will not impair the
tions
are
remote
economical
transportation
difficult.
military
In
coal
or
time
of
war
is
sales
Who among us here to¬
where this nuclear
see
future may go?
available
to
The stand¬
"crystal
our
ball"
think¬
own
key-break-throughs
likely to
are
super-highways, of the future.
We
know
that
we
cannot
pre¬
dict the future—and
especially the
atomic future.
At the same time
must
mental
continue
stroy them
favor
new
such
terials
the
basic
can
the
with
the
materials
be
this
devel¬
of
used
It is also
ma¬
as
development of
which
can
be
con¬
valuable atomic
more
through the
process
the
people
atomic
of
the
weapons
dignity of
world.
of
These
peace
surely outstrip the atomic
ons
of
war
—
atomic shield
quate
transmuting lead into gold is
the
on
version
of
verge
everyday
reality.
is
the
now
becoming an
The
modern
transmutation
peace
has
will
weap¬
military
provided ade¬
once
this
arp
new
come
of
use
involved in
field, in the last analysis,
the production and
these
tiny neutron par¬
back to
ticles.
our
insurance in
a
trou¬
of
Some
are
these
new
materials
Uranium and thorium
known.
Continued
over
twice
as
on
page
much horsepower at "the
top of the South" for the wheels of industry! VEPCO—
serving most of Virginia and adjoining
Carolina and West Virginia—has
more
areas
in North
than doubled
generating capacity within the last six
New: industries,
established
industries
expand, and those whose roots have been
of the South"
—
years.
wishing to
in the
"top
have found that here Men, Materials
and Markets team together for better production in
those
of
climate, and where fine transportation
access
the
a
pro¬
to the markets of the nation, and to
world
through the unequalled ports of
Hampton Roads.
Here, at the "top of the South/' the people
really friendly to
traditions going
more
invested
workers
can
who
new
are
and expanded industry for, with
back to Colonial days, they know that
capital
realize
fiieans greater opportunities
what
free
American
for
enterprise
do.
Our
A
Area
Development Department
can
find the location you want for your
industry.
the
information
on
sites,
natural
help
you
We have
advantages
and
technical details.
AREA
DEVELOPMENT
DEPARTMENT
VIRGINIA ELECTRIC AND POWER COMPANY
RICHMOND
/.
9,
VIRGINIA
of
garden-variety uranium to plu¬
tonium, an operation which makes
bled world.
Now, there's
ready
of
neutron absorption. The alchem¬
ist's dream of the Middle Ages in
ALL HARNESSED TO 60!
vides
a
con¬
a
do for the comfort and
these
favorable
of
the
growing the
alchemist's
gold
look
like
power-hungry small potatoes even with our in¬
world, who can predict what these flated 1954
dollars.
All of the
new
labor-saving machines will activities which
is
its electric
to
The
in
operation
processing
of neutrons.
cerned
like
manufacture
with
and
which
source
new
would
involved
This
concerned
opment
de¬
leara
blueprint.
a
is
neutrons.
is
I
operation
field
new
these
we
later in
process.
morning
present
if
We
ones.
something in the
This
draw
even
few weeks
a
of
basic
to
blueprints
serve
kilowatt needs of
the
oil
best
living is directly related to
the consumption of electricity. As
this new power source becomes
loca¬
where
of
industry
its
expect
may
come, and which will guide us to
the
verted into
of
we
Out of this
inductive reasoning we draw
per¬
sonal road maps
indicating where
in¬
and
ard of
new
in
can
power
our
plants
its output
medical
power
one
prospects.
striking power for
Navy submarines.
Nuclear
reactors.
Our supply of atomic
power is bringing important ad¬
weapons is not compromised by vances in
merchant-ship propul¬
the
demands
of
these reactors.
sion. Today, small nuclear power
able material is used in
for
electric
naturally
are
the
the mil¬
are
use
defense.
ma¬
important advantages
developing both the weapons
and
birth of
how
ing about the future.
materials
n
There
of
and
Gazing at our
helps us to orient
They
dustrial research.
'
1
all
war
commodity industry.
by-products
large
a
total
Among its cus¬
tomers are also hospitals and re¬
search laboratories.
They use its
Technically, we call this the
"breeding" process.
certain times.
course
producing
basic
new
national
cheap
a
expensive
an
of
to fabricate weapons and to build
nuclear
propulsion
systems
for
ess.
are
Our only practical
is to continue the large ex¬
into
and
time
itary services. They
face the
will
too,
a
expen¬
material
In
Its present customers
burns of the in¬
Thus
country
our
also weapons of war.
We are witnessing the
very
sive fuel than it
have
where
future developments?
are
attractive possibility
that the day will come when the
to
also
able.
its pattern of growth? What
yard¬
sticks
are
available
to
indicate
we
advantages to
all
these activities will be vital.
Our future hopes are stimulated
by the
of
in
One of the questions is how this
industry will grow. What will be
can
transportation
supply to land
these operations will be
substantial as they become avail¬
roaring
a
expand.
They are
growing rapidly. Our military re¬
quirements for atomic weapons
They,
The
wood fire.
large production plants that will
continue
ginning.
•An
tbe Edison
into
peacetime
match to start
a
service
from
stage where
a
plants
power
simpler
armies.
more
cheaper material
will reach
we
atomic
and
use
lighting
whether the uranium
same
made
uranium
itary
of the expensive material
is somewhat analogous to that of
small
a
plutonium are avail¬
production is essential¬
interest
The time has
are
after the
and
the
time.
topes
ly the
to
same
weapons
of the
more
atomic
can
key industries—a "must"
hydrogen age. Mobile mil¬
our
provide
the technology of reactors,
find ways in which we can
Soon,
to
peacetime
operation
entire
atomic
program
and
in
and less of the expensive material.
far enough
are
atomic
our
Atomic
able.
are
we
Stationary
plants
zation of
order
learned
are many and
speed up our
government plans for decentrali¬
about
we
weapons
at the
power
progress in the
field
Robert
along in
develop
of
peacetime
power
But
have
we
air^power
far-reaching
we
sizable amount of expen¬
that
or
power
The atomic fuel which
a
within the next dec¬
sooner. The
implications of
emerge
nuclear
en¬
develop the combustion of the^
cheaper garden-variety uranium.
use
uranium.
reactor
our
fissionable material in
Now
Says
program.
grows,
to
available.
is
ore
to
sive
power-hungry world.
a
can
use in these power
plants does not
need to be expensive. In our first
reactor designs, it was necessary
advantages in
applying atomic energy both in transportation and in station¬
ary power plants. Stresses these developments can be applied
as
weapons of war as well as of peace, and looks for this new
power source to meet
without interference
gineers have increased freedom of
bringing cheap
Lists
uses.
These developments
may be some
time off, but they are real and
can
stockpile of fissionable
our
design.
without interfering with
purposes
reveals
program,
produce
we can now
de¬
activities
oil are not available.
or
Atomic-powered airplanes will
greatly extend our air supremacy.
of
cost
will
ade
As
AEC
material
Defense Atomic Energy expert, asserting
coal
with the weapons program.
(Atomic Energy)
Liaison Committee to
on
The
these
plants could continue to perform
when transportation facilities for
heat will
reactors
new
Both
crease.
Assistant to Secretary
production of atomic
They are not rivals.
17
A
letter postal card
or
telephone calf
will start this confidential service to you.
50
18
The Commercial and Financial Chronicle
(2542)
eral Electric Company
expects
Electronics-A Future
shareowners'
its
Vice-President, General Electric Company
of
like
man.
It is this matter of
our
i
n
the
American
business¬
whether
g
has
the
economy
out of
run
ing.
like
view.
quite
stylish
in
of
"dim
we
this fis¬
V. O'Brien
W.
gained wide acceptance, then
to you today will be
completely out of style. For I am
going to outline a future without
fear
a
future that rings
with
confidence. Specifically, I am go¬
ing to speak of the electrical fu¬
—
dustries
"Pollyanna"
am
approach
indeed
are
to
We
we
ence
in
—
on
and
we
and
company
plot
As of
roadblocks
draw
1953
modernization
a
little
that
of
part
this
General
General
enlarged
pro¬
Again,
as
continuing
program,
invest an¬
other $175 million
during the cur¬
rent year. These capital expendi¬
tures, financed out of earnings,
based squarely upon a studied
analysis of the expanding require¬
ments and capabilities of the elec¬
heritage, the men, the inspira¬
tion, and the tools to meet all ob¬
tric
con¬
fident of the outcome. It is against
*An address by Mr. O'Brien before the
Federation
of
Financial
An¬
utility
industry. With com¬
mitments of this magnitude, you
can
be
assured
utility
that
industry's
the
electric
potential
has
National
been studied with
alysts, Chicago, 111., May 19, 1954.
demic curiosity, and that the Gen¬
more
than
equipment—the
re¬
frigerators and ranges, motors and
mixers—which creates
increas¬
an
ing demand for the electric util¬
ity's services,
load
or
as
it is called.
Then, to assist the utility in meet¬
ing this growing load, the
manu¬
facturer
supply
the
able
be
must
to
electric
generation, transmis¬
distribution equipment
in the right quantities arid at the
right time to meet expanding sys¬
tem
requirements.
Here is the
other side of the interdependence
sion,
and
The
coin.
degree
manufacturer
two
the
these
producing utilization
of
areas
which
to
performs
in
equipment and systems apparatus,
to that degree is the capability of
the
utilities
electric
per
decade,
re-
this
the
riddle
determined.
aca¬
in
the
electrical
future.
For
ex-
ample, there is the heat pump, a
newcomer in
the appliance field,
for
which there
tations.
In
quainted with
great expec-
are
not
ac-
this appliance,
the
case
you
are
heat pump
is a combination home
heating and cooling unit whose
only fuel is electric power. It will
heat
a
home in winter by withdrawing heat from the outside air,
soil, or water below ground:
the
it
the
cool
will
home
same
in
by the reverse process of
expelling the heat to the outside,
Today, this unit is installed in
summer
only a few thousand dwellings,
mostly in the Southern states. But
with
techniques
production
mass
technical
improved
greatly
and
advances already under way, it is
anticipated
that
will, in the
near
the
heat
half-million
a
eauipped
heat
will,
be
by
pumps
mean
of
consumption
power
will
homes
with
This
1964.
Prospects for Increasing
look
the
at
areas—the
6
first
of
prospects
electrical
these
of
load
in¬
through
the expanded use of utilization
equipment in the home, in the
community, on the farm, and in
industry.
those
Projecting
which
ances
a
are
in
home
that
the
this
one
good index to what lies
in
terms
utilties.
of
load
ahead
the
growth for
In the next ten years, we
confidently expect that refrigera¬
tors will approach a
tion,
rising
Home
triple;
from
freezer
ranges
100% satura¬
90%.
today's
installations
and
electric
will
water
heaters will almost double; clothes
dryers will jump almost five times
over today's level; and very sig¬
nificantly,
will
we
room
increase
look
11
conditioners
air
times.
forward
to
By
66
1964,
in
kilowatt-hours
predictions
these
If
years.
MICHIGAN
CONSOLIDATED
GAS
MICHIGAN
JERSEY
COMPANY
WISCONSIN
Gas
Company
CORPORATION
true,
come
will be, in terms of power
consumption, the fastest growing
appliance ever to be introduced
to
the electrical
New
,
In
.
industry
Electrical
Home
Appliances
.
.
addition
the
to
established
anpliances of today and the
already
comers
there
still
is
the
on
new-
PIPE
loads for the
new
decade
ahead.
appliances
in
the
near
the
those
to
today
are
still
Here
stage.
which
few
a
envi-
are
future:
GAS
LIGHT
COMPANY
waste
of
trash
food, and will
well
as
as
sanitize
even
and bottles.
cans
(2) A television
that
screen
only by
television'
concept
"cyber-
of
the
can
thin wire to
a
the; intricate machinery
Factors in Expanding Use of
Electric Power
In addition to this general trend,
there are specific areas in modern
industry where large blocks
of power are going to be required.
are
a
few carefully corn-
Here
puted forecasts for representative
basic industries:
(!) The increased
receiver.
of paper
use
next decade will
electrical
raise the
consumption of the
pa-
industry 100%. This is particularly
significant
when
you
consider that the paper industry
is the third largest user of electric
power in the nation.
(2) Closely related to the paper
per
industry,
wm
tjon
its power
industry
consump-
25% in the coming decade,
(3) The
will
printing
the
increase
industry
rubber
for
account
billion
alone
estimated
an
kilowatt-hours
by
6
1964.
The expanded use of electric heat-
ing
will
processes
for
account
a
g00d share of this increased load,
(4) Despite today's slump, forecasters
a
confidently
forward
look
300% increase in the produc-
tion of synthetic textiles in the
next 10 years. This industry is
another
large user of electric
power in its processing.
(5) As high grade ores become
depleted in the next 10 years, an
extensive program of beneficiation is contemplated. For example,
for
the depleting high-grade iron ores
thawing frozen foods very quickly,
(4) Still another electronic de-
of today can be mined and washed
using 2 to 4 kilowatt-hours per
ton. To use the available lowgrade taconite iron ores in the
An
vice for
of
cooking foods in
examples
matter
a
\.
lare
There
to
serve
that will
such
other
many
course.
expanding
power
device
electronic
seconds
and
COMPANY
vices to
to
An electric incinerator that
dispose'
will
million
refer
I
which
sioned in the
(1)
utilities in
development
just
are
j
MILWAUKEE
LINE
the
of modern industry, and a long
step toward the automatic factory
will have been taken. This step,
needless to say, will, be an electrical step in the forward march
of mechanization.
And it is a
stop that once again leads to the
electric utility industry.
market
another
category of
home appliances which will create
products, of
•
To answer the
production with
progressive mechanization of in-
ten, |n tbe
confident
the heat
pump
appli¬
today gives
use
billion
short
(3)
NEW
more
dustry. As this concept takes on
momentum in the years ahead,
there will be required a vast range
°f electrical equipment which, by
the way, will not have to be invented. As of this moment, we
have photo-electric cells that see,
microphones that hear, gas detectors that -taste, and controls
that can remember, compare, and
compute. Simply add these de-
day's 40 million kilowatt-hours to
Load
the
A
of
pump
future, rival the
any other means of home
heating, anywhere. So much so,
that we are forecasting that over
connected
Natural
period.
same
veloped
of
cost
be hung like pictures on the wall,
American
•
Significant though this increase
is, it does not take into account
appliance will skyrocket from to-
Let's
$141
will
Consider
produces
the utilization
its
Electric
sharply.
manufacturer
more
the
Electrical
invested
program.
of
as seen
logical
my
facilities,
of
knowledge
capabilities,
starting point would
be to define the relationship of
the manufacturer to the industry
A
two
the
and
new
in
from
the manufacturer's vantage point.
Enlarging
alone,
Company
manufac¬
as
confidence
through
—
example.
an
we,
every
of
representing a
$1,100,000,000
ten-year post-war expansion and
are
the years ahead. We have
completely
as
Electric
continuation
that collective experi¬
head-on,
Let
this
duction
the
stacles
con¬
you
million in
can
shall
pros¬
will
own
In
75 years of experience in dealing
with crisis and cycles,
and
grown
in¬
our
just one index
interdependence, using
give
Electric
evaluate
can
large
tinue to thrive in the future.
me
a
our course through
them.
today, the electrical industry has
ruts
in
power
the
substantially
rate
a
fancy words simply refer to
creasing
that
roadblocks
without panic;
heavily
ancestry,
Plant Facilities
obstacles ahead, even in the elec¬
trical future.
But they are not so
formidable.
common
the past, and
accused
stern reality—I shall concede
the
Our in¬
uncommon
have
General
First—and before I
utility
enjoy
we
cousin.
It is because of this close
pered in
ture.
there
member
a
relationship that both of
my remarks
and
a
not
families.
has
'
is
a
not
together, and we have
close interdependence
grew up
that
If this fear¬
them
first
a
of
point
electric
certainly
of
developed
season.
a
we are
immediate
dustries have
ful outlook
of
While
the
status
view" is being
cal
manufacturer's
family,
quarters,
worn
Now, I should
present my credentials to
trical
come
the
business, the electric
industry.
to
future has be-
and
predeces¬
discuss this subject from an elec¬
economic
some
of
they spoke
as
electric
Within
at
lower than the population during
appliances today.
utilities'
about
doubt
my
much
increase
almost twice
using
netics" or "automation/' as it is
sometimes called.
These rather
means
potential
no
panel
their
utility
of
Fear
the
this
on
about
forced land¬
be
as
sets
multiply more than 2V2 times the
total kilowatt-hours used by such
Because of our knowledge
ity industry, and I propose that
come by it through the same
utility industry,
can
qualifications of
sors
is
and
gas
electric
There
coming in for
a
the
high-fly-
the
evaluate
to
color
less labor, industry today has de-
inseparably
are
you
background of confidence in
the electrical future that I should
dence
be
forecast that our labor force will
step-by-step improvement of manthe outcome.
ufacturing operations toward the
those
newly introduced appliances
Today, I would have you share
,°f continuous automatic prowhich will play an important role duction; realistically, this is the
our confidence in the electric util¬
and forecasts its use by half million homes by
expanded use of electric power by
modern industry and in homes, but holds this can come about
only through continued intensive sales and promotion efforts.
this
op-
growth of these and all other wellestablished home appliances will
large
a
futures
turers, have
Looks for vastly
Today there is a noisy contro¬
versy that is testing the confi¬
in
electrical
of this industry,
the heat pump,
1964.
this
of
receivers
eration, 44 million of which will
ceiver.
linked.
Predicting electrical equipment industry in next decade will
do more business than in last 75 years, Mr. O'Brien lists a
number of new electrical devices. Stresses increasing use of
invest¬
television
home
Thursday, June 10, 1954
.
degree,
upon the performance of the utili¬
ties; our financial as well as our
depends, to
goal
By W. V. O'BRIEN*
capital
the realization
But
ment.
Without Fear
confidently
return on
equitable
an
..
But these few
illustrate
uses
come
for
new
electric
from
tinuous pattern of product
con-
a
devel¬
futounr®'.,h0w?,vf' Wi"
to 80 kilowatt-hours per to
tinued
electrical
growth
is
Again,, here
would
another
which^e^ctrifumUy
and
new—caiTbe^x^ressed b^a rather
.
;/ Similar projections could be
made across the entire range of
industry, and the pattern of con¬
prevail.
opment.
70
•
**** wil> ^ a
In presenting these growth projections, you might infer from my
$5,000 of the kind of products sold remarks that there is a certairrinby General Electric.
Today, the evitability or fatalism surrounding
average household investment is the
electrical industry. On the
$1,300.
Certainly, here is strong contrary.
The increased use of
testimony to a bright, electrified electric power — whether in the
future
home, on the farm, in the comdramatic
A
AN INTEGRATED NATURAL GAS TRANSMISSION AND
DISTRIBU¬
TION SYSTEM SERVING A MILLION
AND
WISCONSIN
AFTER
MORE
CUSTOMERS IN
THAN
HALF
SUCCESSFUL OPERATION.
A
to
have
the
elec-
tions win become realities only if
area
something
An upward swing in
can
be predicated on
non-electrical
as
as
sta-
tistics from the Bureau of Census,
During
the
next
forecast that
our
increase
ten
it
years,
is
national populasome
14%,
ere-
t'
*.
1
*
i
1
1 i
4
r >:•:
r?
tremendous i demands
and
-
p
services.
-.i.=
.
for
customers
to
This
win call for the continued) intengjve sajes and promotion efforts
QUr
utility.
growth for the elec-
atmg by weight of sheer numbers
.'i
industry—will' not
^.n electrified
industry.
And
lies anotner
area
of
tre-
nerein
mendous load
tion will
,1
munity' or in
be an automatic, inevitable process.
These forecasts and projec-
MICHIGAN
OF
niece
the
will
companion Piece to tne elec
.ome
trie
CENTURY
companion
1964
By
home
of the future Y-*
-t-
+
t
statistic.
electric
average
jjye
ancj
which
work
persuaded
electrically.
electric
the
electrical
are
utilities
manufacturers
condllcted
co-operatively
in
and
have
the
The high degree of presentday electrification testifies to the
effectiveness
of
past
efforts
in
past
goods
load-building and product promo-
However, it is also
tion. Our projections reflect an iii-
'u
•
.»
.4
'
i
-
j:
•'
•#,.:
I
Volume 179
I
Numbed 533£.;./4 The Commercial and Financial Chronicle
v
(2543)
tensification of these co-operative
efforts as we enier the electrical
future^*.,'
'
,
Potential
Growth
of
Electric
for
the
utilization
equipment and its effect in build¬
ing load. Now, let us look very
briefly at
which
growth
second general
our
area
determine the potential
can
of
men of the electric utili¬ v/ Since 1900, the electrical indus¬
try/has been
expanding/ three
example, The morning fol¬ times as fast as the average for all
lowing the announcement of the industries. And looking ahead, as
first
atomic
bombing of Hiro¬ much electrical equipment will be
shima, utility men were calling built, sold, and installed in the
the
General
Electric
Company, next 10 years as has been built in
inquiring into the peacetime, the entire 75-year history of the
power-producing applications of electrical industry!
atomic energy. They
The significance of this
immediately /
projec¬
saw
opportunity, not fear, in the tion extends far beyond our own
atom. As a result, the electric util¬ electrical
industry; here is a valid
ties
have always looked forward.
the electric
utility in¬
ities realized that the government
manufacturer to supply the power
equipment at the right time and
in the right quantity to serve the
should,
long-range
electric
gram. In
In
other
words,
necessity, permit pri¬
participate in a
vate enterprise to
atomic
energy
Because of its tremendous
capac¬
ity for multiplying human effort,
pro¬
conjunction with electric
electric
is
power
prime
a
cause
can power of the magni¬
anticipated
be
generated,
transmitted, and distributed with
today's technology? Specifically,
manufacturers, the utilities sought
legislation to make this participa¬
tion
possible. And today, many
leading utilities
of
can
the loads of the future be
served by the electric utilities?
grouped
large degree, the standard of
living, the prosperity, the cul¬
tude
First, let
look at
us
the
power
Here
not go into technical details. Since
foresight
expression of not only
and vision, but also of
World War II, the average size of
initiative
on
large steam turbine-generator
purchases has increased from ap¬
tric
is
So
give
day,
the
far,
faces.
try
ahead,
envision
comes
do
play
that
As
far
ment
as
of
systems
also
on
a
has
carry
been
single
a
tower
confident
tems
equipment,
and
as
circuit
false, is
we
distribution
proaches of today
the
loads
the
will
10
years
simply adds
up
to the
enable
them
to
to
dition
that
will
this
favorable
prevail
that
by
recent survey
of
cause
material
of
sense
sense
future—a
tories
declining
cited
as
sufficient
nitude
the
resources,
has
businesses
stocks.
than one-fourth of the total
manufacturer to invest substantial
will benefit
evidence
An
of
are
now
not
and
is
lack
of
of
idea is
un¬
so
purchasing
so
false
often used
governmental
most
would
as
a
more
it
goods than
upon
a
complete
of
100
offers
pure
times
is
and
follow
disregard
money value
commodity is income to
Therefore, goods cannot
as
the result of
a
simple
a
mathematical
failure
loads of the future.
free-market economy.
this.
and
known from
the
very
past experience. By
nature of their enter¬
assumes
of
with
that
reflects
least
•
inventory
push this figure well past
key industrial center
a
an
invitation to
New
Orleans,
industry
combination of advantages.
industry to
opportunity.
in the nation in
enjoys
Here is
a
unique
port—sec¬
a
dollar volume—that
is
host
annually to nearly 4,000 ships—ships carrying the
resources
to
:
industry's door—ships
carry¬
the immediate vicinity of this great port, industry
also
finds
in
abundance
sources
of
supply,
power,
our
country
sugar
cane,
.
.
many
.
of the chief
oil, natural
gas,
re¬
water
sulphur, salt, furs, timber, cotton,
rice.
-
NEW
INVESTIGATE
as a
.«
to
ORLEANS
prospective location for
our
your
Industrial Development
Public Service Inc., 317
assistance at your
.
.
.
business,. A note
Staff, New Orleans
Baronne St., will place its
disposal.
Robert Rankin Now
positive
a
With Hannaford Talbot
,
an
(Special to The Financial Chhoni«le)
SAN
inher¬
continuing tendency in
"This assumption
.
been
of New
soon
de¬
ciples."
fact.
consumption to keep
productive /capacity,
that this failure is
ent and
That this and other research ac¬
tivities will find a responsive au¬
in,the electric utilities is
It
accumulation
pace
area
mass
underconsumption
theory,
however, assumes far more than
>
f
ficiency of purchasing power."
logically that
metropolitan
ing industry's products to world markets. Yet, in
Every portion of the
accumulate
plants have
This record growth proves that
world's
(he productive process and thus
own purchasing power.
someone.
billion dollars of
a
industrial
the billion mark.
ond
:
proper
possible to increase the speed and
power of motors, and the efficien¬
cies of turbine generators. If these
experiments become operational
realities, they will mean for the
electric utilities another step for¬
ward
in
serving
the
electrical
dience
with Hooker
now
1508 Pacific Avenue.
tion plans should
In
the
of every
three quarters of
expanded
locate here has been
creates its
merely compound the
Will not more invest¬
not
and
New Orleans has become
an argument for
intervention.
It
The
to
& Fay,
not
stronger than any ever known. By
crystals
CRUZ, Calif. —Robert
not
were
increasing the strength of metals
alloys, we think it will be
Laboratory
Electric
50
Bradford
SANTA
A. Huddleston is
of the nation because its invitation to
:
rests
of
of
that it
in
the
that the strength of
metals and alloys can be substan¬
tially increased. Scientists are now
are
(Special to The Financial Chronicle)
Orleans since World War II. Announced construc¬
This
power.
not
Does
hope
tiny
E.
built in the immediate
a
the market
crease
that
v
Woonsocket,
York;
Nearly
sense
step is rather to in¬
The assertion that general over¬
purchasing power and capacity exists is
very dubious as
thus
permit
absorption
of
the1 to fact and is even more difficult
goods that existing plants are cap¬ to
reconcile
with
theory, con¬
able of producing?
So goes the cludes
"The
Guaranty Survev"
underconsumption argument.
editorial. "It rests upon the over¬
"Of course,
if underconsump¬ saving, underconsumption hypo¬
tion
means
only that inventory thesis, which is without support¬
accumulation reflects a surplus of ing evidence and flies in the face
production over consumption, it of
elementary
economic
prin¬
iron
Hooker & Fay Adds
;
I.
to
as
underconsumption in
merit attention if it
even
mag¬
state
constant
"In its crudest form, the under¬
consumption
theory
attributes
lagging demand to a supposed
simply add to the already
existing superabundance of plant?
mean.
producing
New
formerly
as
Production involves paymerits to all those who participate
problem?
job of operating the system. Here
is just one small example of what
General
Inc.,
Arthur
was
inven¬
expect
forget that a sub¬
part of aggregate output
consists of capital goods as dis¬
tinguished from consumers' goods.
reducing their
such
remain
significant
inventory
of substantial
to
to
stantial
ment
larly the electric utilities in their
at
Co.,
"Second, those who argue that
inventory accumulation is an evi¬
furnishing by
occurred,
Does
vestment
all
segments of the industry, particu¬
work
Co.,
of
He
son.
Co., Boston;
Darman
I.; Bradford E. Haley of Nichols
new
can absorb?
If so, will
proposals for tax revision de¬
signed to restore incentives to in¬
outlay for research. This willing¬
ness on the part of the electrical
the
Darman
expect any other feature of the
business situation to remain corn-
are
situation
It would be
management.
unreasonable
consum¬
income.
Research
Draper Top
H.
Street.
essential part of general busi¬
ness
ready produced
Current
of
Sutter
connected with Richard A. Harri¬
are
constantly adjusting
inventory positions upward
downward according to their
expectations of demand, costs and
prices. Inventory management is
all
I
Ab¬
Graniteville,
Mass.; Eliot Bicknell, Boston; El¬
liot W. Brown of
Dewey, Gould
& Co., Boston; Edward L.. Burn-
with
Managed Investment Programs. 41
fear.
interdependence, or rather
identity, between production and
research
of
Co.,
Calif.—
now
large degree,
affairs show that industry has al¬
in
Worsted
Morton
FRANCISCO,
Henry F. Siegalkoff is
E. Kent Allen
were:
SAN
Knell, New York,
Elected to the Board of Gover¬
nors
With Managed Inv.
on renewed vigor, when¬
market disturbance."
an
ert J.
a
ated
FRANCISCO, Calif.—Rob¬
Rankin has become. associ¬
with
Hannaford
519 California Street.
is weak in at
was
formerly
&
Mr.
Talbot,
Ranking
officer of Conr
two
important z respects.
.solidated Investments, Inc.
it
ignores the fact that
an
First,
Takeshi T. Ariyoshi has also
much, if not most, inventory ao.
cumulation
is
intentional. Busi¬ .been added to the firm's staff.
r
■
of
(Special to The Financial Chronicle1!
or
do not support it.<
inventory
accumulation
by the U. S.
research, the
machinery industry led
other industries, accounting for
sums
Wednesday,
one-year'term
re¬
projection
without
11M
Treasurer.
&
office
a
of our
core
electrical
more
dent and Frank
R.
for
9,
their
Yet, in
final analysis, experience and
derconsumption.
/
on
lagging
a
market
a
and
"The
industrial
nation's
Gorham's, New York, for
Freeman El
Maltby of Macdonald & Maltby,
Inc., Boston, for 2nd Vice-Presi¬
ham
took
June,
office.
Arthur N. Gor-
Vice-President;
bott
&
of
1st
for
change
industry and in
this
feasible
bright
a
were:
Committee.
nesses
than fully employed.
itself
a
of
common
Electrical Industry Leads in
In
our
is
electrical
a
some
sometimes
Bureau of Labor Statistics
Also elected
ham
today by
Wiedemann, Chairman
Nominating
Brothers
in¬
the
dence
the
re¬
is
Research
the
of
Exchange,
announced
Orvis
of respon¬
a
disturbance.
has
less
::
today.
It
made
stant.
man
being undertaken
electrical manufacturers
the
of
appear
superficial plausibil¬
ity, especially at a time when hu¬
con¬
the extent of fundamental
search
electrical
sense
has
theory, says the editorial,
is a "hardy perennial that takes
on renewed vigor whenever
signs
It
as¬
be found
can
the
is
appear
the
in
signs
The
that is needed
that lie ahead. A further
surance
was
of
"Guaranty Survey," issued by the Guar¬
says the idea, "though
business activity.
manufacture
customers
Inc.,, it
Edward C.
Wigton
Co., New York and John M. Wil¬
liams of Royce & Co., New York.
These new officials of the Ex¬
"Underconsumplion" Theory
demand and lack of purchasing
power
reasonable invest¬
power
their
serve
years
in
a
the New York Cotton
hardy perennial that takes
a
recessions that
systems apparatus that
ship, at
ment, all the
the
sponsibility that, to
of
on
Survey," monthly publication of
the Guaranty Trust Company of
York, attacks the theory put
forward
during recent business
adequate for
projected
and
can
New
ap¬
fact that the electric utilities will
have
ourselves.
the current issue of the "Guaranty
er
this
in
man
sibility that is at the
an
"The
ahead.
All
responsibility touches
confidence in
a
editorial article entitled,
Underconsumption Theory,"
In
power
breakers
system
are
riches, strength, and
dustry. It is this
future
ever
loadings. And in the area of power
distribution, we know that the
utilities'
of
G.
anty Trust Company of New York,
be built to handle these higher
can
have, the more
And out
get done.
can
of
sense
every
out¬
industry
which
higher
possible. Sys¬
such
transformers and
still
that,
Current issue of the
even
circuit loadings are
is
projecting/the
Decries
kilowatts
line,
that
more
& Co., Inc., Green¬
ville, S. C.; Norman L. Sirota of
Co., New York; William
Sirota &
higher
.
installed
million
a
continued
confidence
in
military
The
Because of this chain reaction,
national scale.
keep pace. Today,
330 kv transmission
one
and
found
concerned,
and equip¬
engineering
will
system
is
there
of
the
J. P. Stevens
Philip B. Weld of Harris, Upham & Co., New
York, was elected
President of the Wool Associates
progress.
look for the electrical
a
transmitting
power
example,
are
be
*
blocks
will
growth
be¬
economically justifiable to
so.
for
nuclear
significant role
a
generation when it
But
story
we
of work flow
ap¬
vorable conditions that this indus¬
dramatic
we
a
and
nation.
electric power we
work
electric
blocks of power. And in the years
power
vitality,
security of a
utility industry by
compartmenting the various fa¬
we are building units as large
250,000 kilowatts whenever
they are required to handle large
in
tural
have endeavored to
picture of growth in
I
you
it
electric
world, the availability
power determines, to
a
the part of the elec¬
as
modern
our
an
utility
industry
proaches the future.
proximately 50,000 kilowatts to
125,000 kilowatts—five times. To¬
energy will
of progress, not a
luxury that fol¬
lows in the wake of progress. In
are co-operatively
together, exploring the
potentialities of atomic energy in
the generation of electric power.
generation equipment—and I shall
as
•
of
index to the growth and
potential
of all aspects of our national life.
./Keith of Walker,: Top: Associates,
Boston; W. Gordon McCabe, Jr. of
Of Wool Associates
r
dustry, namely, the.ability ,of the
utility's system.
Weld Elected Pres.
-
Utility Industry
So /much
prise, the
For
.
19
SERVING
i'
'
*
NEW ORLEANS WITH
"
LOW-COST ELECTRICITY,
"
'
'
NATURAL GAS AND TRANSIT
20
The Commercial and Financial Chronicle
(2544)
I think all of
A Period of Crucial
learned,
Challenge
of
President, Chrysler Corporation
sudden
a
not
Sees hope and
viduals under the law.
tific
and
are
living
now
the
response
may
—
In
the
is
business
doing
a
best
is
It
fronts that
these three
on
life
of
is
being, chal¬
sponding to its
our
challenge
the
lenged, and we cannot fail to re¬
spond
America of
challenge
present
1954
1 p
e
our
(2)
is
bold-faced
of
in
us
the form
crisis—and
of
duties,
thought and action.
everyday
our
How
Colbert
to keep its
necessary
healthy
pleasant
someone
had
entation
to
each
of
plans
of
up
you
in
best
our
would
it
drawn
a
it de¬
mands of each of us constantly,
sion
should
it
what
all
national
great
against free
and independent
nations;
do
overt,
in
institutions. It sometimes con¬
fronts
to dis¬
armed
of
the form of in¬
undermining attacks on
sidious,
courage
aggres
of them.
The
from outside our
one
comes
and
danger
(1) it should
discourage or
h
any
form
the
in
to do
things:
upon
three
to
borders and from within. It comes
called
is
way
be
if
for pres¬
today
a
meeting all
and growing—for its own benefit three phases of the great chal¬
and for the benefit, through trade lenge facing us. I'm sure no grad¬
present
could be more
and investment, of other nations uation
domestic
own
—
so
as
to
to
see
economy
demonstrate
for
neat
set
welcome
the
quite
world
address
Colbert at
the
1954
Commencement, University of
Texas, Austin, Texas, May 29, 1954.
an
by
Mr.
of
But it seems
apparent from
that the free way of
papers
♦From
than that.
that
plans
or
no one
reading the
has such a set
is likely to have one
mean,
the
of
time
same
the
are
we
looked
ever
First I would like to remind you
a few of our more tangible ad-
To put first things first,
yantages.
Americans
are
cine.
to
All of you can look forward
longer and healthier lives than
in
were
prospect
the
for
young
likely that
no
knows.
one
have
you
It
and
perhaps,
even,
you
in
confidence
the future
—
love
of
greater
a
that
be
may
greater
yourselves
in
generation
however,
had
ever
pects of making
themselves
the
you
better
no
pros¬
good living for
a
and
their
familiar
made
that
is
than you have today.
I do not propose to
children
facts
and
in
your
know
you
overlooked, however,
the
—
in
patient
done
the
industrial
this
country.
who
have
and
by
our
laboratories
all
concerns
It
is
made
of
tial, commercial and farm
Electric
customers
customers.
installed in the last
for
.
1953
new
amount
to
ten
years.
is from residen¬
96,000, of which 84,000
our
these
people
possible, for
day.
coveries
Of
all
Additions and improvements from 1946
$162,000,000. An estimated $75,000,000 will be spent
ending in 1956.
American
have
basic dis¬
scientists.
developments
greater possibilities for
to
seems
than
me,
those promising new ways of har¬
nessing the
the
energy of
Massachusetts
Technology
down
and
process
into
water
oxygen
sun.
Institute
Lawrence
a
the
scientist
a
of
name
by the
use
At
of
by
the
Heidt
has
of breaking
hydrogen
and
of solar energy
of the
or
New York State Electric & Gas
Corporation
Elinghamion, N. Y.
will
will
help
growing
economy
It
also
be
one
strongest deterrents to ag¬
the part of
on
those who would attack any part
of the free world.
only turns water into a fuel
hydrogen — but simultaneously
would
us
mentioned
have
which
in
ways
few
a
have
we
of
the
and
health
the
of
knowledge
in
weapons
of
in
enough. No
great challenger
a
alone. Equally im¬
the spiritual
are
themselves
in
nation's
a
What
resources
the
question in
the
it
,our
of
looking
The
But
way.
contain
As I
of living, our
at life, is built
human
months
called
ago
to
All of
the
ple.
why it
writer
had
established
able
record
a
have
has
If
been
are
economic
that
we
are
failed
to
this
on
as
the construction of
made
of
converts
strips
useful
a
of
solar battery
silicon
which
of
amounts
the
radiation
directly and effi¬
ciently into electricity.
What do these discoveries
for
the
If
economic
areas
as
future
the
great sections of
the
sun
can
mean
of
think
that
our own
be
put
to
East
West?
work
pumping and freshening the wa¬
ters of the sea, we may have to
rearrange
present
of
a
good
ideas
population
many
about
on
the
the
of
our
pressure
land
re¬
most
evi¬
I
the
of
one
of
inclined to
am
secrets
ability to outwork and
of
even
outfight most other nations in the
world is our ability to work and
light and play together in friendly
groups and teams.
Our liking as
people
getting
for
get things done
together
to
effectively is, no
part of the pioneer tra¬
a
During the centuries when
we were pushing back our West¬
ern
frontier, we learned to be
good friends and helpful neigh¬
bors.
A famous historian has said
that
in
those
Americans
frontier
"reversed
word
'stranger'
the
And
that
us
was
The
to make the
reminds
friendly front
American
an
we
whole
of welcome."
one
historian
same
the
days
the
porch
invention.
nations
and
helpful this country can be in
times
of
disaster,
famine
and
have
lend-lease
II,
many
how
friendly
Winston Churchill, referring
war.
to
of
people
learned
called
act"
in
Of
during
the
it
the
all
World
"most
history of
the
War
unsordid
any
nation.
great human
values
which this country is based,
is more important than the
dignity and self-respect of the in¬
dividual.
This is, after all, the
value
is founded.
the
in
was
drafted
all
produc¬
that
they
Creator
self-evident,
equal,
created
are
endowed
are
with
of
held
they
be
to
men
those
of
Declaration
when
truths
that
our
this
was
minds
the
Independence
"these
which
It
upon
by
their
inalienable
certain
said that in his opinion the answer
are Life,
Liberty and the pursuit of Hap¬
could not be found in statistics of
piness."
national
turies since those deathless words
resources
of
tions
in
or
economic
policies
he said, is that
answer,
descrip¬
methods.
management
and
The
real
some
na¬
tions want to produce more. They
set
high
a
itself and
Let
moral
on
work
on
efficient production.
quote
me
value
two
three
or
"After
all
be said
can
uents
of
has
been
In
on
said
that
productivity,
the
real
answer
secret
of
has been
given. The
American
produc¬
tivity is that American society is
imbued through and through with
the desirability, the Tightness, the
morality
of
production.
Men
serve God in America, in all seri¬
and
sincerity,
through
striving for economic efficiency."
ousness
Now
I
many men
in
think
who
office
an
of
stood
that
earn
or
are
not
their living
factory
a
their work
serving God.
British
there
suppose
as
a
who
way
of
But I wonder if this
economist
something of
hasn't
under¬
our way
of life
have not fully understood
ourselves.
I believe that xcr most
we
the nearly
the
written,
were
individual
preserved
two
rights
the
range
cen¬
the
of
have
God
under
and
been
of
op¬
portunities for individual growth
and
experience
has
been
greatly
extended.
the
From
first
Americans
we
have understood that
the direct constit¬
on
American
rights, that among these
sen¬
tences from this editorial:
such
Middle
world's
characteristic
American traits.
our
the
of
one
a
man
works
and thinks and creates because of
the
fire
brain.
with
the
know
of
and
the
understood
that
feeding
fuel
fire
freedom.
of
only
by
the
for
heart
own
have
that
freedom
we
his
in
We
of
Telephone laboratories announced
bone.
working
the
among
most
and
of the
the Bell
ago
hardest
country
approach. He
the
Americans
two centuries has commented up¬
light alone.
few weeks
in
we
was
coun¬
many
friendliest people.
Every foreign
visitor to our shores over the past
discovery thus makes possi¬
ble,
in
theory,
a
closed-cycle
nower
system energized by sun¬
a
bred
that
the
among
importance
Just
good
a
are
people in the world, it is also true
quality of management, on
the use of machinery and the or¬
ganization of production, on stand¬
ardization, on labor relations, it
is apparent that only a small part
This
to
it is true
remark¬
record which other
tion—a
tries
of
such
the
We
of
central
asking
that the United States
was
lives.
few
was
in
The desire to work and work
well
that
British
many
are
Bible-reading,
church-going, hard-working peo¬
who
The
in
have heard these
our
successors
generations
interesting edi¬
very
of
are
us
verse
passages
us
all of
passages
torial in the London "Economist."
a
of
great
And there
similar
upon
values.
attention
my
all
"That work which
—
thy might."
upon
of
in
All
that
with
Bible.
none
A
of
thy hand findesbto do, do it with
see
the value
itself.
for
and
sake.
own
other
way
way
first of these is
this
answer
common.
fundamental
four
our
suppose
would
answers
things in
some
I
different
a
of
are
of
essence
tradition?
American would
every
lives
daily
and which
nation's traditions.
a
is
American
all
the
people,
preserved in
cultivate
to
health, its wealth history of language
weapons
portant
the
not
are
met
ever
the
all
high regard for work
Ecclesiastes
doubt,
hands. But these
our
its
for
dition.
bodies,
good
a
nearly
religious background that
tend
very
things
heads and
our
our
a
become
the
of
some
that
definite moral satisfac¬
of a job well done.
familiar
a
I
few catalysts., This process
a
not
—
or
many
recent
future, it
sunny
1
Henry Street
by
these
the
sun's
We will be glad to send our J953 Annual Report and T\en Year
Financial and Operating Statistical Supplement on request.
62
good
a
few
are
70% of the Company's property has been
facilities in the three years
keep
healthy.
.
number 400,000—gas
served with natural gas. About
to
our revenue
to
ideas
out
Certainly there is much in our
dent
application
and
scientific
work—in
provides the right amount of oxy¬
gen
needed for its combustion.
70% of the population served live outside cities—the largest
community is under 100,000. Over 65% of
discovery
new
us
this frontier.
on
over
in¬
rapid advances in the
worked out
estimated
all of us to en¬
those with scientific gifts
pioneer
The
distribution
mass
work
Corning Glass is only one of many pioneer manufacturers
which early moved into the area we serve, or began here, during
the hundred years of our history. Industry is looking more and
more to this
region because of its record of business and labor
stability, its uncongested environment, its strategic location for
*
It is up to
tier."
courage
by virtue of its
Within the past year alone there
35% of that of New York State. An
said, science is "an endless fron¬
the great ad¬ and its
these
progress
have been
♦
as
and
in the nation's ability to which are built up over the course
goods and services. You of many centuries, which manifest
idea for an incandescent
lamp, needed a bubble of thin glass to enclose the filament and
maintain a vacuum. He came to Corning, New York, and talked
to Vice President Houghton of the Corning Glass Works. Could
they make it? .. Yes, they could
The very first bulb blown
was chosen—but not till 159 other
experimental bulbs had been
made to be certain
The following fall the first practical in¬
candescent lamp gave light.
•
long
impressive
and
of the great foundations of
one
every
.
As
scientists
nation
physics, and who
are pushing their explorations of
this new knowledge into new areas
.
electronic computers.
or
review for
field of nuclear
on an
knew
next
to
nothing
aircraft, guided missiles,
we
about jet
things alone
during the last half
studied
stance,
Mr. EDISON
And
strong
and
about
year
television
no
was
that
which will keep us strong in terms
scientists
♦
there
agriculture
In
explanation,
the colleges, research foundations
covers
decade
life itself than they had. An easier
painstaking
area
last
and
—-
DDT.
gressive adventures
this
Our service
without
than did the young people of other
recent decades.
Why this is true,
is
,
antibiotics
and
Too often
materials and markets.
the
Just
will marry
younger and have more children
production and
raw
in
come
half.
a
was
greatest resource—human life.
has made it possible for more and
more of our people to
enjoy the
benefits of our economic progress.
.
have
we
and
deep satis¬
a
turning
and
;
a
common
of
economics courses,
.
how
of
get
our progress may be in the years
ahead, it is helpful to see how far
to
how the American genius for mass
.
us
is
there
in
tion out
people of any previous generation.
We
have greatly enhanced our
It is
Americans
fast
the
of
one
and
longest-lived peo¬
ple in the world. We have nearly
have
.
the imagination.
To get some idea
stag¬
we
can
keep our
engineers equipped
with
the instruments they need
eliminated
some
of
the
great and working in an atmosphere of
scourges of the early 1900's, and freedom, we need not worry about
we
have
learned
a
great deal the loss of old frontiers of oppor¬
about diet and preventive medi¬ tunity.
As Vannevar Bush once
we
produce
.
mankind
no
by any nation at any time.
at
century
working
of
faced
vances
In 1878 Thomas Edison,
welfare
ger
easily. This
very
statistics concerning
soon.
very
product,
be
healthiest
vidual citizens under the law.
re¬
future
against the toughest challenge ever
way;
and liberties of indi¬
cient rights
faction
possi¬
industry,
a
big challenge straight in the no -synthetic-fiber
industry, no
lace. And it is my purpose today synthetic-rubber industry. No one
to give you a few of my own rea¬ knew how to seed clouds for rain
or how to split the uranium atom.
sons for
thinking so.
vigilance in safeguarding the an¬
make to that
determine the fate
we
bilities of these discoveries for the
toughest nation that
(3) it should exercise eternal
and
and
of freedom it-
self.
new
generosity.
through
period of crucial challenge
challenge
we
scien¬
have become
in
The
sources
consider, for in¬
stance, that in 1938 medicine had
But
because of high moral standards, hard work,
»'strong1 and great
We
progress
research, and holds
and
discoveries
are
we
or
of the world.
Americans have
pretty
Thursday, June 10, 1S54
..
learning
however, that we
pessimistic about find¬
ing some of the answers to some
of our problems.
We may be up
does
should
living through a period of
crucial challenge, which, to be met, requires: (1) discourage¬
ment of armed aggression; (2) maintenance of a healthy econ¬
omy, and (3) the safe-guarding of rights and liberties of indi¬
execu'ive, asserts
us
are
last, tnat there are some problems
you just don't expect to solve all
By L. L. COLBERT*
Auto
or
.
We
preserving
individual
can
the full growth
the human spirit and the real¬
provide
for
ization of its limitless
possibilities.
Beyond these three values—the
love
of
the
work,
friendliness
and
the
recognition
the
individual
opinion,
tradition
of
generosity, and
of the worth of
—
there
another key
is,
in
my
element in
the American tradition. It is what
I
will
call
the
realistic
to
life.
We
try to
as
it is,
not
as
Starting
the
with
facts,
something
We
have
we
we
a
go
approach
the world
wish it were.
see
straight
on
to
look
at
construct
better than we have.
ingrained way of
an
looking at the world and all that's
in it.as something imperfect, un~
Volume 179
Number 5332
finished
subject to remodel¬
and
.
.
The Commercial and Financial Chronicle
.
experimental.
are
build
bridge
a
mobile
mediately of
changed. In
We never
make
or
don't
that-we
the
Elects New Officers
im¬
they should be
own office, con¬
my
cerning
modifications
in
Harold
our
production methods.
The
of nearly
ern
thinks
American
average
everything good
as
be-
iiig the f'best yet" but -not
as
the
"last
word."
He
elected Vice-President and General Manager
was
Georgia Power in 1949 and two
thinks
was
the
tions and
ern
Quinton, President and Director of the South¬
Company, Los Angeles, California,
elected President of the Edison Electric Institute, at
of
nearly
Institute's
the
City, N. J.,
everything can be changed for the
better
everything except free¬
dom itself, which makes change
Mr.
convention
civic and professional organiza¬
recently elected President of the Southeast¬
Exchange.
\
was
Electric
June 3. ^
on
William
Quinton, first Paci¬
has
A.
M.
announced
Burden
the
fic Coast electric
executive
possible.
to
utility
hold
Hill, Jr.
the
'
A
people whose national life is
founded
Institute
the four values I have
on
discussed is
&
Co.
admission
of
to great challenges.
It
people that will work hard
individuals to produce a better
respond
is
as
Los
of
Mr.
the
EEI follows
improve is to build on the con¬
ditions of the world as you find it
—and not to follow those
who
and
half his election
a
Edison
as
by
a
Harhee
Brancli,
as
month
Executive Vice-President from 1948.
His
asso¬
began in 1942, when he was
charge of finance. Formerly, he
was a
partner for 16 years in Arthur Andersen & Co., cer¬
tified public accountants. Prior to this association with
Arthur Andersen & Co., he was with the Treasury Depart¬
Faiman & Co., L. A.
ment in
Edison
'been
in
has
firm
&
Co., Incor¬
early
of
been
his
1953
as
the
Air
resigna¬
Assistant
Force.
engaged
in
&
Mr.
Field
Club
of
Los
June
11
at
of
will
Hill
Mr.
the
of
Bond
be held
the Wilshire Country
Competitive
noon.
and
Day
Angeles,
to
events
begin
A
dinner
for
conclude this
all
members
ing.
active duty with the Navy
War II.
World
William A. M.
York
existence
ha^
(Special to The Financial Chronica »
limited
after
tended
Joins Williams Inv. Co.
Burden &
Co., a
partnership
formed in 1949, is one of the ven¬
ture capital firms which came into
New
to
World
II.
War
emphasize
;
It
invest¬
JACKSONVILLE, Fla. —Theo¬
dore G.
nected
Buckenmier
with
Williams
is
now
Company, Barnett Building.
since 1949.
community service since be¬
ing identified with the Southern California Edison Com¬
pany is not confined to the electric industry alone but in¬
cludes participation in many important industrial and
He is
activities.
civic
a
director of the California Bank
and Pacific Mutual Life Insurance
Angeles, and is
Commerce.
a
He is
Coast Electrical
Hubert R.
O'Neil,
Calif.—Hubert
has rejoined the
Jr.
staff of Fairman
Association, of which he is a past Vice-
Topeka, Kansas, was Mr. Quinton's birthplace and
boyhood home. He attended grade school, Topeka High
School and Washburn Academy there, and Northwestern
(Special to The Financial Chronicle)
LOS ANGELES,
R.
Company, both in Los
director of the Los Angeles Chamber of
a leading figure in affairs of the Pacific
President and director.
O'Neil, Jr.
& Co., 210
West
University. Mr. Quinton served in the cavalry and field
artillery in World War I.
i
Seventh
Street, members of the
Los Angeles Stock Exchange. He
has
recently
been
with Gross,
of
President
As
Rogers, Barbour, Smith & Co.
Southern
California
Com¬
Edison
Mr. Quinton is top executive officer of the sixth
largest electric utility in the United States, and one whose
growth has been most spectacular. In the years 1949-1953
inclusive, his company headed the list of electric utilities
pany,
N. Y. Golfon Exch.
Elects Officers
-
Edward J. Wade of Wade
&
Co.
the
as
J.
President
Cotton
York
New
Elected
colm
elected
was
in the nation in the number of new customers added to the
period nearly 320,000 new customers woije
by the Edison Company. Southern California Edi¬
son
serves
approximately three and one-half million
people in an area of about 14,250 square miles in Central
and Southern California.
The company has more than
J 7,500 employees and nearly 85,000 stockholders.
of
served
Exchange.-,
Vice-President is Mal¬
York City.
New
Rogers,
John M. Williams of Royce & Co.
elected
was
-
Treasurer. ; Those
elected to the Board
Alfred
are:
In that
lines.
Bros.
of Managers
Boedtker,
Harllee Branch, Jr.,
Volkart
Elected Vice-President
Brothers
Company;
Bernard J.
Coniin, B. J. Conlin & Co.; Alfred
B. Emmert, Dan River Mills, Inc.;
Harllee
Co.,
Tinney C. Figgatt, New York; Ed¬
mund W, Fitzgerald, Hentz & Co.;
Jewell E. Floyd, New York; Frank
J. Knell, New York; George A.
Miller,
D.
and
Abbott,
Proctor &
Paine;
Williams,
exception
Emmert,
of
was
bers
of
i
the
retiring
Board
new
officials
*
handling legal'
,
College in North Carolina and
Emory University that
same -year as
law at
He is
School.
of the
a
Emory University, the Uni¬
versity of Georgia Evening College, and the Atlanta Law
who
re-ellected.
These
'
completed his studies in 1931.
former instructor in
and
Sauer all of the others were mem¬
were
law student and
a
was a
graduated in 1927 with the degree of Bachelor of
-Arts.- He enrolled at
Messrs.
Floyd
in 1949, he
Branch, general counsel for the company. He had been
He attended Davidson
McFadden
& Bra.; Alden H. Vose, Jr., Kohl-*
meyer & Co.; and J. Antonio Zalduondo, Orvis Brothers & Co.
*
MacDougal, Troutman, Sams
-
taVe I. Tolson, Geo. H.
the
power company
;matters for the power company.
Joseph M. Sauer, New York; Gus-*
With
joining the
/associated^ with; the law firm since 1931,
Jr., N. H. Morison; Hugh E.
Baine,
Edison Electric
•.
member of the law firm of
Jr., Robert
of the
-
Before
Mbore & Co.; Nathaniel H. MorL;
spiV
Branch, Jr., President of the Georgia Power
named Vice-President
Institute.
Levy, Anderson, Clayton & Flem¬
ing; John
was
Ex¬
(
Mr.
change take office today, June 10,
for a one-year term of- office.
Branch
worked
as
a
reporter
"Journal" from 192? to 1931 while
on
i.
the Atlanta
attending Emory. From
>
»
\
f
t
1.1
.
ll
•f
!•
M
ft
UL
I
,'j
t' 11
)
r.
;
f
,
<
v
V
i
)
1
I
t
<•
4
I
■
i
con¬
Investment
Washington, D. C. He became a member of the
Company's board of directors in 1945, and has
Mr. Quinton's record of
9
yearly gather¬
member of the executive committee of the board
a
at
a.m., when golfers tee off, with
baseball scheduled for the after¬
Cromwell.
Barker
ANGELAS, /Calif. —The
Annual
He
the
in
natural
Club, will have a complete pro¬
gram of activities for members,
Field Day Chairman Deeb Peter,
of Blyth & Co., reported.
associated
since
previously
were on
President of Southern California
elected Vice-President in
H. R. O'Neill, Jr. With
tion
Both
with the company
ciation
Hill
the
Sullivan
Jr.
Company. He became top executive officer of the
utility company in April, after having
served
pia in their pocket.
LOS
1, 1949,
practice of law with the firm
Mr.
Southern California
road map to Uto¬
Morgan
Secretary
chief of the
as
P.
with
had
of
election
The
Quinton
Quinton
Aug.
porated for about 13 years.
annual convention.
Harold
J.
with
past
inducted
on
since
other
Angeles BondClub
Annual Field Day
T.
having previously been associated
closing day of the 22nd..
to
a
was
President
as
ing build a better life for others;
a
people that will stand together
in times of trouble; a people that
believes in decency, fair play, and
the rights of the individual under
the law; a people that knows that
in this imperfect world the way
claim to have
He
year.
do¬
so
James
general partners.
as
with the firm
industry's trade
association for the
a
life for themselves—and in
the
and
Mr. Barker has been associated
presidency,
had been Vice-President
people prepared to
a
Barker
R.
and
special situations in
the aircraft industry.
—
Robert
oil
resources and
Admits Two Partners
!■♦■>*<
in
ments
Wm. A. M. Burden Go.
Atlantic
at
named
was
-He is active in many,
'
California Edison
conclusion
later
years:
President.
make in
and
trucks
and
cars
im¬
and
provements they want to
our
Quinton, President of Southern California Edison Co.,
named as President, and Harllee Branch, Jr., President of the
Georgia Power Co., as Vice-President, at Convention held in
Atlantic City, N. J.
■
1932 he was publicity director for radio station
During World War II he served as a Lieutenant in
United States Navy.
to
He
of
Harold
to me
constantly
from
engineers
and'
from hourly rated workers con¬
come
21
WSB.
auto¬
an
think
ways
structive suggestions
1930
Edison Electric Institute
ing and indefinite improvements
We
(2545)
.<*
*
r*
22
The Commercial and Financial Chronicle
(2546)
refer
I
Assets and Liabilities in
ing,
only
be
for
paid
off
Trend
Upward
referring to substantial road building activity already
Mr. Bradley enumerates the assets and liabilities
confronting the nationwide movement for adequate roads.
Discusses means of providing adequate highways, and says
financing is the heart of the highway problem.
cludes "adequate roads don't cost, they pay,".
gather
to
to-
struction
has
going to get out of the highway
muddle
until the everyday
seemed
man
good
to
that
me
idea
it would
be
a
draw up a sort
balance
sheet
for
two
'met
the
,the' assets
ing.
or
The
and
on
other
aroused
Albert
years
the
lot
a
of
and,
believe
I
receptive to
now
I
ac¬
has
been
action
is
the
on
plus
That
move.
side
too,
of
the
of
all,
we
have
seen
in¬
fourth
too
little.
I
highway departrnents, where, of course, programs
and projects originate.
Particuiariy
encouraging
increase
range
H7gZr;aur.CroX!
d.
c.,
May
5,
1954.
in
has
planning
nature in
so
been
of
many
There has also been
a
the
long-
states.
more
action
at the legislative level, particularly
with
respect
financing.
to
could
decline.
a
points
peak.
holds,
the
in
1954
the
might
item
the
on
highway
labeled
for
While
always
it
did
World
breakdown.
programs
freed
now
are
of the
mate¬
kept the
which
shortages
brakes
during
on
1951
1952.
and
For the first time in many years,
out of the way.
particular
road blocks are
Plenty of steel is
available.
have
We
sufficient
Interest costs
manpower.
projects
that
need
low
are
be fi¬
to
nanced.-Conditions are, therefore,
most favorable for further action
highway construction front.
said
just
ernment's
that
now
the
position
differed from
importance of high¬
the
ours
on
ways
to national defense.
have said
position
because
Administration
have taken
ways,
I should
"the previous Adminis¬
tration's"
new
gov¬
to
appears
"new look" at high¬
a
at
as
the
number
a
other
of
things.
Eisenhower
President
has
said,
and
I
himself
Last
year's dollar expenditures oh
highways were a record • and
,
double
of
1938;
of
modern
defense
Ebasco is flexible. It
can
concentrate
specific, immediate
problem... or on a whole broad range of operations. It includes
the functions of engineers, designers, financial
consultants, sales
and marketing specialists, cost
analysts—whatever specialized
skills the problem calls for.
Ebasco
men
have
dollars worth of
on a
designed and constructed over one billion
plants. They have built pipelines; made
helped solve production problems;
assisted in developing industrial relations
programs. For nearly
fifty years, Ebasco has served business and industry in all
parts of the world.
can serve
you, send for your free copy
Story of Outside Help." Address: Ebasco Ser¬
Incorporated, Dept. T, Two Rector Street, New York 6,
of "The Inside
N. Y.
INCORPORATED
New York
SERVICES
Chicago
•
•
the
ton,
the
Appraisal
*
f
highway
our
on
other
of
ways.
is
economy
watchword
ledger
in
At
at long
Washing¬
Administration's
aware¬
of
highway needs is par¬
ticularly significant, and indicates
ness
an
encouraging recognition on the
our legislators of the im¬
part of
portance of highways to our
•
Budget - Business Studies • Consuming Engineering • Design
♦ Financial * Industrial Relations • Inspection & Expediting
L Pnnctrnrtinn
& Construction
Pimnrlil
.
.
Insurance, Pensions & Satety
Rates I Pricing
•
TaxeJ
'
"
TraHic
lnrf..o4ri.l
.
D.l.I-
u..
Office Modernization
Research • Sales
Wash'ntfon Office
fc Marketing
.
•
e
r
Jin
Purchasing
Systems & Methods
when V these dollars
into purchasing
but
the picture is quite differ¬
Actually, we were .putting
out no more real dollars for high¬
power,
ent.
*
work last year than we did
way
16
when
ago
years
our'
and
car
truck population of 29 million was
little more than half of today's
econ¬
In
relation
to
total
outlays for
all
goods and services, we are not
putting out as many dollars. In
percentage
Last
year
only 1.44, or
much.
Even
that
comparison doesn't
tell the full story. Because of our
one-half
only
constitutes
does
lar
was
as
standards
changing
not
buy
16 years ago.
of
control
what
to
as
good highway,
a
a
dol¬
high¬
as
much
as
50 cents did
footage today
way
Wider rights of way,
easier grades,
access,
in
1953
The final item
of
our
on
highway ledger is the
high¬
ways.
Urban Traffic
But
let
and
Parking
with
proceed
us
be
must
liabilities
made
some
related
where
tremely serious.
,
miles
on
of
maintenance
an
work.
In
$3,243 million
construction built 50,000
surfaced
in
roads.
Total
1953,
were
including
$5,277 million,
all-time high.
The
public,
be
the projects
was
es¬
that seemed to
highlighted in the
roads
plete
are
by
answer
no
been
few
ex¬
a
critical
solution. There
is
a
moral in this:
by forward
planning let's solve our highway
problems before they catch up
wit'h us—but that is not of much
comfort to
who
see
news.
means
the
Toll
com¬
to the highway prob¬
/
a
t i
our
older communities
the
while
cuts
have
asset side
flow
As
to
the
future
As
to
the
fairness
of
placed
on
the
aroused public opin¬
As
whether
to
to
As
sad but true fact
that opinion is as yet
People
want
diversion
to
But
get them.
A
ago^we in General
a ' contest:
How to
year
Motors
ran
and
Plan
-
Pay
for
the
Safe
and
Adequate Highways We Need. We
received 44,000 essays.
A lot of
were
thing that
about
the
practical
excellent, but one
struck
balance
and
us
particularly
was
unrealistic
the
im¬
nature
is
item
it
confused?
the
for
wonder that the
any
are
\
Another
liability side of
our
"Adequate Roads Don't Cost,
They Pay"
Two
~
favorite words
among
our
highway fraternity are "adequate"
and "inadequate." I use therrrfre¬
quently myself.
Two years ago
our Highway Congress theme
was, '
"Adequate
Highways ;for -a*;
„
Stronger
America." -This
-
it
year
isv ;"Adequate Roads Don't Cost,
They Pay."" *
~
f
That's a good slogan., But I am
wondering whether we should not
begin to cast:about for words thatdefine
" our
highway
vividly and
goals
more
T
compellingly
more
and
convey a clearer picture of
the urgency of the highway prob¬
Inadequate highways are costly
highways, and the cost is tremen¬
dous—one
of the largest
about
ter
has
the
states
of
fact,
It
case.
said
good high¬
has
As
case.
it
the
estimated
that
been
four cents per
ating
and
its
users
mile in lower oper¬
reduced
costs,
fewer
mat¬
a
understates
the modern freeway saves
not all
al¬
are
we
don't have—and tnat just
ways we
time
Obviously,
travel
accidents.
highways
be freeways,
can
but studies indicate that
our
pres¬
highway "inadequacies"
total
a
at
of
which
is
rep¬
out-of-pocket
least $3
of
Don't Cost,
So much
will
billion
summed
cost
All
year.
a
in
up
our :
They Pay."
made
I .think
agree
-
some
is
ress
by
treadmill.
a
illusion
the
merely
achieved
walking
man
on
a
He appears to be mov¬
ing fast when actually he is just
exerting his best efforts to stay
in the same place.
Much of the
current activity we see is merely
a desperate attempt to keep from
slipping further behind.
Highway
Must
Interest
User
Be
Aroused
The question
groups
What
is:
can user
do to help our nation get
highway system commensurate "
efficiency with the rest of its
in
industrial
plant?
First of all, we can
arouse
do
the
some
We
on
man
continue to
the
street
to
talking.
find
that
in
many
nities people put up
commu¬
with inferior
facilities partly because
realize they are inferior
be
they don't
and could
and partly because
improved
they don't know how they could
improved. They figure that it
be
the
in
is
nature
of
particular
a
highway to be choked with traffic
—just as Fibber McGee figures
that it is
to
in the
collapse
opens
do
groping for absolution, it
review:
for
that while we have
progress,
much of
what is popularly taken for prog¬
you
and
needs guidance.
items in
ledger.
Someone
got
many
is
a
ledger.
of the solutions sug¬
gested. While the public is con¬
cerned about the highway muddle
of
is
methods of taxation—
people
better
they have little
conception of what has to be done
highways.
ton-
If the experts are not in agree¬
this must be
the
by
roads,
the
naughty word.
a
Unfortunately,
offset
toll
of
mile tax,
of
channels into
new
already
an
truck
of
o n
"
downtown streets choked
traffic
them
doubt,
of the
no
pecially aware
new
toll
highways under construction dur¬
ing the past yearJ At least, these
were
but
more
We
these
in
has
The
has been to find
the
maintenance,
assets
parking.
problems,
the
the problem, the more difficult it
uninformed.
spent
the
dents
congestion
total of the many miles of new
highways built last year and the
year before, plus the record vol¬
of
1
r e
Congress slogan, "Adequate Roads
our
among
than
traffic and
is urban
two
listed
rather
that most of
alone
the
weight to pavement life,
resent
sum
1953
to
added to the per foot cost of
ion.
the asset side
As
ent
the suburbs.
Construction
Road
ourselves:
among
heavier pavements—all these have
I
for
by the public.
ready paying for the
the
that
What is more, we often disagree
highway expenditures.
with
Outlays
stood
our
commerce
lated since 1940.
words
1938, 2.85%
of gross national
product
was
accounted for by
up
and of the need for making
deficiencies that have accumu¬
use
we
perfectly clear to us — like
"dispersion" and "sufficiency rat¬
ing"—but that are little under¬
lem.
T
55 million.
omy
Washington, D. C.
•
^
it is to
and per¬
Administration
new
expenditures
EBASCO
year
translated
are
have
when
last
ume
To find out how Ebasco
co*»rj|fr
as
new
business studies upon which bankers and other executives have
based important decisions;
vices
is
as
economy
number
a
time
a
roads
safety."
asset
in
fingertips, through Ebasco, is the specialized help of
engineers, constructors and business consultants. In a single
organization Ebasco combines top-flight talent with experience
that penetrates virtually every type of business and
industry.
prewar
still
an
At your
of the
network
I count the
for top management...
those
balance sheet. Another item which
sonal
tap
should label inflation.
suppose we
to
nouncements
decided asset
a
implements of war as a guar¬
antee of peace through strength, a
necessary to
our
national
on
it is
only
close
are
are
ment,
should not be for¬
that
say
who
we
helpful.
public pro¬
Last year
record total of
a
to
sorry
our
year.
a
combined, that is, with
good highways. /
Our second highway liability I
ern
keep help
whole,
a
the manufacture of the most mod¬
we
them is "on the road"
of two hours every
"Next to
quote:
am
often
Only too often in
—when
because
governmental controls and
I
And
even
the problem are not very
balance sheet of the economy
the
War II
Fortunately highway
and maintenance
construction
the
be
fic
been
were
and,
I
too
the
gotten that our skyrocketing traf¬
volume is a liability only on
the highway
balance sheet.
On
I
considered
of lack
of proper maintenance/ were ex¬
pended almost to the poi n t of
highways
expendable
on
might
road.
the
on
Of course, it
from ours during
Korean hostilities
during
^
high¬
a
"motility", of
365 days
piled up
they
that
ently differed
the period of
for
page
list
I
so
as a
liability the
though people want""
better roads, too few know how to *
go about getting them.
as
average
day,
highways con¬
stitute a first line of defense,
the government's position appar¬
these
as
what
is
the
vehicles
an
asset side
ledger—and,
it has
position
rial
foremost
each one,of
subse¬
as
—as
take
right-hand
We now have more than 55 mil¬
lion
of all our ledgers—
"End of the Korean
add,
War."
our
Let's
of
550 billion miles of travel.
Another
is
side
asset
people—which may be
their astonishing ca¬
pacity for spontaneous movement.
ments.
of
and
defined
years
extra
gen¬
American
will provide many
miles of highways and many
other highway improve-
quent
of
traditionally list liabili¬
called
1953,
and
perhaps
out
ledger.
the
at
we
liability
way
The
available
dollars
construction
the
for
highway
First
156.9 for
at
of
a
be
..And
fact that
ties.
Roads construc¬
quarter
much
where
con¬
cannot
and
built
be
They
called
funds.
look
a
arrest¬
9
below the first quarter
If this lower cost trend
when
creased action in
public
Washington,
is
say,
First
Bradley
^n^dudress iy Mr' .Br?dle^ at the
cnce,
been
ledger.
—I—
p
become
also
doing too much of the talkand
has
of
Things have started to
talk
ago, you may recall, I expressed
the opinion that we ourselves had
mg
There
There
first.
been
the
up
tion.
about assets
Two
stir
did—particularly the
we
up
or
problems.
Let's
and
cost
the
more
stirring
can
the
"liabilities
out
we
the grass roots—a
lot of talking by a lot of dif¬
ferent people. Public opinion has
accomplish¬
ments
get
Well,
side
one
starts doing
.
.
never
our
fact, not only
arrested; there
index stood
tion
group represented here this morn¬
last
—-putting
,on
.
And I urged that
grass roots."
years
we
the street
on
"really
:of
'since
.
the talking."
to
been
even
Bureau of Public
never
are
In
costs.
has the trend been
gether the things I wanted to talk
to you about at this Congress, it
.
immediately
So
Stopped
be
that
built
Construction
of
ing of the upward trend in
Con¬
said at that time: "We
.
appropria¬
Still another plus is the
under way,
began
and
service
luxe
de
might
what
where
is heavy.
movement
provide
eral
Users Conference
Costs
I
traffic
the
by
situations
critical
tain
tions, too, have increased.
Executive Vice-President, General Motors Corp.
When
fective
to
Authorizations
By ALBERT BRADLEY*
proper
lem, but they do represent an ef¬
method for relieving cer¬
public-
state during
the useful life of the facility.
Providing Adequate Highways
After
the
to
long-term bond
non-toll highways to
also
but
issues
Chairman, National Highway
not
authority-toll-road type of financ¬
Thursday, June 10," 1954
...
the door.
the
solution
of closets
nature
him
on
whenever he
Or they
haven't
imagination to see the
just as perhaps Fibber-"
really doesn't know what else to
with
In
my
all
that
own
junk.
.
front yard,
every-
•
Volume 179
Number 5332
.
The Commercial and Financial Chronicle
.
to
Route
on
Now
they
say:
Public
trouble at all driving
no idea what
no
difference the turnpike and the
would
Atomic Power and the
have
materialized
years
must
we
man
important,
when
the
he
often
the
aroused
in
the
all
is
of
better bead
tnere
but
We
must
see
state
on
in
Too
is
thing, that he
to make them
in
moves
instead
poor.
one
more
directions.
firepower
aim
it, for
he
direction
or
arouse
Even
must see to it that
we
is
right
circles
continue to
the street.
on
araws
legislatures
responsive to
more
the public's wishes.
It
is
obviously not
up to us to
specific projects. But
recommend
do
lot to keep the popu¬
demand for better highways
we can
on
a
sound
a
course—and
particu¬
by endorsing and
gating sound principles.
promul¬
larly
Our
:
first
agree
is
to
ourselves on a set
principles—broad enough
of sound
to
job,V however,
among
be
generally
applicable
but
the
Utilities
the
industry;
along
the
but
line
some-
their
con-
It
utilities
mean
under; pressure
chain reactions
well
port the heat.. A study is also being made of using "heavy" water,
with
a
double-hydrogen
atom,
The cost of generating electricity
is estimated at around 7 mills, if
the cost of heavy water can be
reduced. (3) The water-cooled re-
of
deal
attention
to
energy,
as
indicated by
the discussions at the recent con-
For
engineers
number
a
have
convenient
years
been using the
that "atomic
remark
10
energy is
of
being tested; this
20 years off." But
large atomic power
plant actually under construction
with
now,
or
a
as
as
eYfY'
now
to trans-
,
power
H.
Scott, Controller
Edison
Company, recently pointed out in a speech before
the
National
Federation
of
dropped Financial Analysts Societies, the
as
though fact that electric output doubles
business, how- about every decade should permit
stitute.
great
a
used
Eldred
Detroit
looks
vention of the Edison Electric In-
ing
Westinghouse Electric, and
in the submarine engines
As
of
managements
idea.
^ the cooperation
federal Government worthtype uses water
results should be obtained
to
control
the W1thin a few years, and atomic
The utility industry is now payatomic
So
lar
where
servative
ago.
a
competitive
By OWEN ELY
If
they had, both the Jersey Turn¬
pike and the Delaware Bridge
to
an
bridge would make."
Of course, they had no idea.
the
in the airlines and proposed to take
active interest in this new and
Utility: Securities
Washington.' I'd
new
23
ing commercially developed some alongside other efficient methods
leading railroads bought shares of generating electricity,
from New York
1
Washington.
"Why it's
a
(2547)
used to grumble about condi¬
one
tions
to
.
then
can
take
its
place
incorporating atomic energy plants
along with the present generating
plants, so that investors will not
have to worry about the factor of
obsolesence.
Mathew Nilssen, of J. A. Hogle & Go.,
On Visit to West Coast
(electricity from which will be
bought by Duquesne Light under actor, - with -graphite - controlling
contract with the Atomic Energy the speed of the chain reaction*
Commission) the time limit for and hente the^ heat' generated;
the
commercial
has
power
duced
However,
of
production
apparently
to two
been
this
does
not
the secondary heat circuit makes
the
re-
three years.
or
soihewhat
process
plicated.
;
•
more
com-
G. E. atomic spokesman
Francis K. McCuhe
(as reported
Week")
estimates
would produce
power at less than 7 mills, thus
mean
that
atomic power "will be commercially profitable for the utilities.
Duquesne will pay a fairly
high price for its power (already
in
"Business
that
this
method
competing with nearly 20% ' of
the large generating' plants installed in the past two or three
fixed in its contract) as compared
wita the cost of generation in t ie
most modern steam plants.- No*
body in the utility industry probably as yet knows definitely the
(4) The homogeneous re*
being s developed at Oak
Ridge National Laboratory, where
To
do
this we must adopt a
cost of the raw material, uranium the reactor is carried in a liquid
fresh and enlarged view of the
or
plutonium, which the
AEC permitting continuous reprocesssubject—in other words, we must
must supply; nobody knows how ing — which * factor
may ^reduce
get up on a high hill and survey
much can be obtained from the eosts.
(5) r'Th'e -sodium-graphite
the whole landscape. We need to
.sale. of radio-active by-products, reactor lpejng developed* by North
not
broad
so
to
as
be
mere
pious
line
with
generalizations.
get fabove
the
timber
years.*
actor
These
products
fall
into
two American Aviation and the AEC.
petty disagree¬
groups:
(1) isotopes of 'various -This type will have high thermal
ment,- preoccupation with details elements
(the
atoms *of
which efficiency and may also "breed"
and undue emphasis on relatively
have
anabnormal i number
bf new atomic fuel, which would re-
its underbrush
of
minor issues.
Two Guiding Principles
In
mapping
take
our course, let us
benchmarks two guiding
as
principles:
First,
concentrate
us
on
attainable
a
ma¬
jor objectives;
Second, let us have sufficient
elasticity of policy to adapt
readily to changing conditions.
In preparing for this Highway
Congress, several thousand high¬
way
users
all
over
to
select
asked
issues
teen
the
six¬
of
considered
most
informed
of
good.
very
opinion
The choices
was
were:
-
Four, Diversion, and
Five, Finance.
That
Number
cuts
nance,
others in
is
way or
of
our
concentrated
it
will
of
to
focus
us
dustrial
atomic
If
these
the
To
my
possible
largely on
for all
it dur¬
gas
with
State
tax
structures and
levels,
and
Credit
and
do
we
no
than
more
tangibTe contribution in
two
years
three
have
make
a
the next
toward resolving these
issues, we shall
financial
for
hearty self-con¬
gratulations in May of 1956.
cause
nf
fv,p
firm>e
offices
to
oartner for J
A
Hoele & Co
wide^our of the lirms offices to partner tor J. A. HOgte at
it."
when
on
The
writer
aviation
was
recalls
first
be-
York
Stock
lyrpp+jrwe
to
<
and
.
operations.,
Exchange
win
hr>
hpiH
nt
thp
f*ili
up,
in
having started
1928
and
as
moving
a
un
page
to his present capacity as a floor
fo™1^ Club.
*
He is also interested
in obtain-
partner.
:
•
the industry if
is
ra¬
Anyone at all
the
AEC
plants,
sludge.
with
that
most
be
of
the
opera¬
conducted
on
a
shielded basis, or by using "robot"
devices.
a
fear
of
ground
to
Disposal of the sludge is
serious problem; it
underground for
contaminating; under¬
streams; one solution is
very
be
buried
encase
it;in the
it in concrete and drop
r
ocean.^^g^l^^^^^.^
There
are
six
some
different
of 'generating electric
power that the AEC is experi¬
ing that closely tied in with the
menting with; to:dbtermine Which
problem of finance is the wise use -is the
cheapest and most prac¬
of such funds as are appropriated.
ticable. Some 500 utility; men and V
In this area, however, while offer¬
atomic experts
recentlyc^ath'dre#5
ing as much intelligent coopera¬ in Washington .tOv
Of
processes
course,
it
without
goes
say¬
tion
as
we
can; we should avoid
unwarranted invasion of the prov*
ince
of
of
realize, of
what
morning
and
still
tion.
no
I
ypu
re-
Argonne National Laboratory:and
actor,.. being
to
say this
have heard before—
doubt many times.
v
various
that much
had
needs iteration
tsese
administrators
course,
have
of
actor types,
which include the.folr
lowing: (1) The boiling water re¬
technicians.
and
I
highway
hear"telitS'by^;■£
proponents
But it
and \re-itera-
r
developed
•
by -the
<
♦
favored by General Electric; steam
generated by the reactor goes dir> \
rectly to a turbine which turns
.
the generator,
water
reactor
(2) The pressurized
(PWR) favored by
..
boy
the ladder
the
major cost problem
for
Meetings will be held at the Call-, pi 1928, and moving up the ladder
Congress passes pendr
must
can't
If
w^p.+niir
process)•;;
"burned-out" but still
as
familiar
also
financing.
Nilssen, who is re-executives of the Los Angeles
sponsible for the execution of J. A. Stock Exchange, including W. G.
Hogle & Co. orders on the floor Paul, President of the Exchange.
0f the Exchange, is on a nationi Mr. Nilssen has been a floor
the handling of the radio-active
material both in its original fprn} V
tions
relations,
Mr.
ing
knows
are:
offices.
information
classified
;; Another
nancial
These
series of meetings
Much will de-
Government
when
a
ners
the attitude of the
available
made
for
j. A. Hogle & Co.'s part-
the floor of the New York
the values are much
on
of
he met with business leaders and
on
Stock
/
by-products
substantial
pend also
Exchange, is in Los Angeles
with part-
and staffs of the firm's local
^jissen>
ner
\
first-hand knowledge about
many of the Southern California
businesses which are currently receiving
increased attention of
Eastern investors. During his visit
ing
manufacturing
(using the latest oil-gas.
dio-active
Federal-state
in
LOS ANGELES, Calif.—Mathew
like
somewhat
is
involved
and
handle
that
small amounts. While
situation
it has de-
way
the assumption that "the utilities can't
might well be glutted with
ing the next two years.
Breaking it up into smaller
pieces, we have three major fi¬
today.
(somewhat in the
veloped hydro power)
by-products, since they are
that
Co., New York City;
ton alone to develop
a
of bombs by the Government) the
market
W. G. Paul, President of the Los Angeles Stock
ping—and doesn't want Washing- better acquaint customers and six years. He knows the New York
atomic power staffs with the mechanics of-New Stock Exchange from the ground"
being
were
power
large scale (in addition to the continued production
amount
particular and
be
can
uses.
generated on
Federal
of
be
issues
which
Some
eight study groups ineluding 31 electric power systems,
representing about half the total
generating capacity of the country, are now working with the
AEC on power research projects.
evidently
the
utility
industry
doesn't want to be caught nap-
radio-
perature for a considerable period), for tracing leaks,m pipelines, and for various other in-
the
attention.
hope
materials
me more
(2)
used to sterilize foods (preventing
them from spoiling at room tem-
another and
thinking, it is the heart
highway problem, and I
way of
of the
active
nevertheless
subject, fi¬
then
and
harder to estimate.
most
across
one
worthy
Five
detected;
used in very
One, Adequate roads programs;
Two, Getting public under¬
standing;
Three, Uniform laws and safety;
are
can
easily
country
five
worthy of being discussed here.
The response from this crosssection
used prin- duce cost.
(6) The fast neutron
cipally in medical and biological power
breeder
being
built
at
research, since they pr o v id e Argonne, which
have low
tracer atoms
whici can be in- fuel cost, but which may take
cluded in a dose of medicine, the some time to develop.
action of whici
let
limited number of
were
wbic i
electrrns)
Left to right:
Exchange; Mathew Nilssen, J. A. Hogle &
J. D. Boggs, J. A. Hogle & Co., Los Angeles.
Columbus and Southern Ohio Electric
Company
24
The Commercial and Financial Chronicle
(2548)
Selling Action Required to
Expand Electric Power Use
ing irons on a single circuit to fry
an ox, and then complain that 15
amp fuses aren't what they used
he's
of
large,
round,
so
thoughts, theories and view¬
points that it is hard to get agree¬
those
salesmen—although
consider
ves
topics
which
enclose
more
resounding
had
figures
hear
all
breeds
the
you
American
vanished
from
the
Yet
after
product
doorbells.
presumably
louder,
ings.
shoe
More
bricks.
follow-ups,
miums,
sales
leather
More
push
and
More,
meet¬
money,
streamers'
pre¬
displays,
gaudy
and
gimmicks.
Maybe.
tool
in
there.
the
But
address
Annual
Electric
June
1,
calls
I
tory,
a
The
kit
as
or
in
a
use
it
company
to
me
of
one
the
highest
in
the
for every
that he has
means
well
hot
and
range
Atlantic
City,
size
elec¬
an
lighting and
his
of
house.
has
It
to
with his full use, and thereby
is
in
that
my
amazement.
not believe that
a
friend
likely
more
check indicates,
power company
to
be
of
one
as
to
And,
promptly.
could
He
do
full
as
citizen.
a
pay
a
his
He
bills
recent spot-
he is quite likely
our
40,000 stock¬
anything remotely resembling holders.
a sales problem.
"Why," he said,
So when we talk of selling for
"everybody has to have electricity,
the future market, in our com¬
they can't buy it anywhere else,
what
so
but
else
make
do
the
have
you
stuff
and
than
kilowatt-hours,
We
are
thinking in terms of creating cus¬
tomers, rather than sales; and of
developing more high-use cus¬
the
meters?"
I suspect
belief
I
in
met
operating
sider
he is not alone in this
even
have
our
some
industry.
engineers and
own
who seriously
men
customers
tomers
On
occasion,
it
customer,
a
very
never
is
tempting
all know,
as we
a
bill
is
too
common
J.,
even
reasonable.
He
can
in
of
electric
on
with
their
living,
in¬
and
it, have more in
their
power
com¬
like
terest, is
He
same
more
likely to share the
beliefs in economics.
At any
love him dearly, and our
sales thinking is hinged on win¬
rate,
or
hook up
ning
we
more
like him.
Does he say,
merchandis¬ just kept this
my
ity
from time to time the beautifully
presented prognostications of
the
partners,
our
manufac¬
electrical
buy.
handle
15,
10,
20
or
I have been
years.
sweat."
than
is a packaged product.
enough merely to make
purposes,
It is
not
DAVIS, Manager
Division of
Area
Development
will include
eight-color
that
later
manuals
in
it
industry, we
capacity now
and
have
we
demonstrate
with
belief
what
our
for
do
can
whether
are
planned, I think
to
they
in
customers
our
housewives,
storekeepers, or manu¬
farmers,
are
lines and natural
The
kind
of
I
selling
attitude—a
an
in which
barber
copies of
is
mean
attitude
company
everything the
company
this
selling ideas. Selling,
in this sense, is nothing separate
and apart.
It has its techniques
and tools, to be sure, but above
all
means
it
must
and
express
approach.
its
It
community,
and
prove
In
our
letters
work
it
im¬
to
includes
trucks
helmets
"CL&P"
the
well
company's
successful
Connecticut
the
the
and
with
as
create
the
citizen in
that community.
trouble
linemen's
the
includes
as a
its
serve
company,
yellow
total belief
a
company's standing
take
off
those
the
the
cards
of
names
Had
he
Actually,
tools.
power
didn't
He
block
the
as
efforts
to
who
use the tool, how to
for it by saving money while
using it. In effect, this real sales¬
pay
made
man
Perhaps
the
say
this
significant
is
the
helpfulness
is
control
and
manners
of
the
meter
advertising
It
program.
and
is
salesman
a
directly
was
responsible,
I
feel, for the initial expansion of
goods and services in the early
decades
of
vacuum
cleaner
the
salesmen
of
the
with
famed
the
in
insur¬
gratitude.
How
would
have
we
insurance
us
man
and kept
approaching
baby?
over,
every
every
re¬
course,
Probably all of
recall
insurance
if
of
salesman
with
man
sometimes
And,
story.
should
us
The
century.
memory.
Example
new
Personal
of
Selling
knew
suffering the transi¬
stores
tion from service selling to super¬
buying.
Part of the pic¬
emphasis from
to
buy a hammer, so
hardware store. You
look for the hammers.
Only if
you don't see what you want do
into
a
look for
salesman, so-called.
want a hammer.
a
You tell him you
"They're right
somewhere."
—maybe.
over
there
He follows you over
You
check
the
price
tags and pick up a medium-priced
hammer.
his tech¬
niques, by which he made it harder
"No." The mod¬
salesmanship, in person or in
print or at the point of purchase,
makes it easier
I
to
more
—
and
"Yes."
say
certainly think
could stand
we
intelligent—
more
person-to-person selling at the
tail
re¬
level.
But, today, person-toselling is only one of the
means
to
the
overall
objective.
The supermarkets sell more spices
person
and housewares
kee
than all the Yan¬
The book clubs sell
pedlars.
books, by giving away
more
en¬
cyclopedias, than the foot-in-thedoor boys
The
dreamed about.
even
principles
of good sales¬
manship, fitted to the needs and
and
changed
of
costs
relative
become
the
the
as
have
selling
to
overall
and operations of business.
goals
For
thing,
one
called
(often
selling
pressure
high-pressure
has given
ing)
sell¬
to what you
way
call "suction selling."
In
this, the sales effort is less in
going out after customers than in
might
You
ask
him
if
it's
a
The book clubs I
insurance.
tioned
another
are
the
supermarkets
new
Great
whole
men¬
example, and
that
White Way
the
are
the
across
country.
This
than
trend
to
pressure,
rather
suction,
selling
is
part
of
the
growing and imperative ne¬
cessity to cut the costs of distri¬
bution.
the
The dollar distance from
to the purchaser is
greater than the distance
factory
from
No, personal selling isn't dead
—it just looks that way
in too
He says,
and
The
salesman,
the getting them to come in. Exam¬
subscription and book ples, painful in some quarters, are
yes — the automobile savings bank
life insurance and
lately invisible, the lower-cost, mail-order automobile
insurance
you
old
selling.
"Suction Selling"
always, I hope, be
Person-to-person sell¬
salesmen.
bought
"Yes."
also
will
here
the
between
personal
new
oldtime
it easier to
aims
the
the
He showed
them how to
ods of selling have
gretful
in
were
electric woodwork¬
.
towns, and the
ing
those
idea by
an
ing around the house.
old
It
sell
sold
Develop¬ ultimate interests of the customer,
Corporation.
It is have not changed. But the meth¬
Credit
You want
two
power
borrowing the books.
the newly remodeled stores in the
you go
COrtlandt 7-5920
tool
woodworking to the local
library, makes regular visits to
ern
selling to buying.
30 Church Street, New York 8, N.Y.
a
and harder to say
ture is the shift in
Company
catalogues and
particular
He gave
shops.
$5 book about
is and does contributes to its sell¬
after
resources.
that
ing; in which everything the com¬
pany sells contributes to the com¬
pany
and the economy.
Mainly
market
American Gas and Electric
for
difference
facturers.
hadn't worked
power
sold a surprised
$200 power tool. The
a
fellow leaves
same
often far
showing
day
homeowner
men
many
map
mortality
stores'
some
much
reply
business
mood for
an
the
birthday,
L. L.
lower
selecting
as
up
ance
available industrial
space. Our detailed
who
to
us
or
Yet
not.
being
If,
load
installed
cartoon and
plant sites
does
talk—only undertakers
for.
stock
•
He
to
The package must be
opened, the switch snapped, be¬
fore it can be consumed and paid
it available.
salesman,
on
of
sold three of them at last account.
salesmen,
Write in confidence for data
off, and the
long-grain
come
made
tool
promotion.
•E'lectric power, for all practical
magazine
Virginia, Kentucky, and Tennessee.
heat-treated
a
On the other hand, I recently
sometimes that there is a
tendency for us to become com-, heard of a hardware store out in
placent in the false belief that our the prairie dog country that is
industry's future growth is in no run by a real salesman. Once, he
a
car
go
by with ,a plank
way related to our policies and saw
efforts.
I am not going to argue sticking out the back. He ran out,
the point, but I would like to say caught the
license number, and
There
Michigan, Indiana, jOhio, West Virginia,
the carpen¬
one
has
hardware
salesmen.
in
price, but
for only a dollar
afraid
readers.
choice of 2300 communities
a
the
hickory pre-seasoned with human
are
how
It
is
we
much the
load is going to grow in the next have a
showing
turers,
tree
AGE offers you a
one
This is the
head that can't
selling in a public util¬
operation. We have all seen
ment
Plant site?
for
need for
public
or a
"Well, sir, that's
hammer
good
ters
reasonable to be¬
seems
lieve, also, that the high-use cus¬
tomer, with a higher mutual in¬
enough heaters, toasters and curl¬
1954.
It
pany.
can
low,
because
their reliance
to
fellow.
annoying
thinks
who
vestment
con¬
unfortunate
an
concerned with more
pany, we are
do
to
read
Edison
N.
who,
them.
more.
cus¬
water heater
the usual
as
and his substance
I have to report
A
the
those
good one. He says it's a mighty
good hammer, they sell a lot of
ing friend, are still not sold on the
shall
agree.
before
are
selling action
of
the
handsomely here .today, there
cus¬
appreciation, of electric power.
I told my friend I was
Furthermore, there seems to be a
for ideas and principles
parallel
between
the
high-use
which might be useful to power
customer's value as a consumer
companies in their selling for the
be
of
so
or
also the low-trouble
For us, a high-use
are
.
snorted
our
with all solemnity that I know of
no
product, no cause, no idea
background, it is
which has won public understand¬
interesting to know that we have
ing and acceptance without that
found that what we call our highforce of active belief variously
use
customers are not only our
called selling, or merchandising,
best
customers
revenue-wise—
It has little to do with
the size of his pocketbook or the
future market.
in
represented
own
ing budget.
practice
by Mr. Knapp
industry
own
our
certainly
and
company,
in
even
this
Against
appliances.
fantastic advertis¬
a
residential
average
course,
looking
wouldn't
the
Convention
Institute,
and
tric
big sales force, and what
a
customers
kilowatt-hours
Of
country.
tomers.
relatively small fac¬
a
household
Our
they
was
"merchan¬
a
in
monthly bill was $6.52, compared
to $5.35 average for the industry,
as
be
•An
22nd
lunch
at
nuisance—and ungrateful to boot.
There is
electric
assignment here in
tomer
with a man who
my
City
heads what he
rubbed
phone calls,
point-of-sale
banners,
Atlantic
day
are
had
thousands of speeches and
on
discussing
the
sales
editorials, is a return to good oldfashioned
salesmanship.
More
off
other
seems
earth.
on
The
air.
What this country needs, we are
thumbs
titudes and satisfactions.
uct; it has
continue to climb.
told in
more
convictions,
and plain hot
product
of
few
business.
Knapp
the
good
packaged consumer prod¬
of
of
a
than
dising"
talk,
salesman
more
makes
To
face
is
full
erroneous
businessmen
that
takes
We
—well ahead of the national aver¬
would help—to create the modern
sales program that deals with at¬
few
are
arguments,
think
It
significant.
are
relatively higher use of elec¬
power.
The average use by
our
the good
make
to
among
sales-minded.
would
instruments
doctor.
There
R.
of
have learned
we
last year was 2,598
office
an
even
the msel
for
tric
selling
of
art
than
more
ment
who
Sherman
the
takes
ought
we
think, salesminded—which makes
sometimes confused with the tools.
It
So
high cost area, which makes for
relatively high rates. We are, we
age.
medicine,
selling is so
fully packed
so
with
anyway,
a
things.
This whole topic of
got.
re¬
things about customers that
I think
modern sales
program to build up and utilize future electric power.
Says
power
companies could stand more intelligent person-toperson selling at the retail level, but points out the best kind
of selling is the company's attitude, in which everything the
company sells contributes to the company, the community, and
the economy.
Emphasizes value of selling ideas * instead
a
very
get to know him better.
some
England utility executive stresses need for
we've
all
a
and
—
In Connecticut
President, The Connecticut Light & Power Co.
New
also be
can
fellow
warding
to
By SHERMAN R. KNAPP*
He
be.
to
Importance of Merchandising
Thursday, June 10,1954
.,.
the
raw
materials
the
to
finished product at the end of
the
production line.
Too many
products simply cost
too much to sell.
For
some
prod¬
pennies saved in the
factory have literally become the
ucts,
the
For others,
only pennies earned.
the
economies
achieved
in
manufacturing
lowed
joke
design
have
been
and
swal¬
by the rising costs of dis¬
tribution
terns.
efficiencies
and
modern
in
the
old
market pat¬
In such companies, the old
about,
"we
lose
money
on
item but make it up in the
volume," is no joke—even when
every
Continued
on
page
44
Volume 179
Number 5332
.
.
The Commercial and Financial Chronicle
.
(2549)
of despotic inroads on the
rights of property and on the con¬
would
ditions
ever,
means
Tax Revision Revisited:
-
}
■
The 16th Amendment
WILLIAM H.
By
Graduate
School
of
New York
Commenting
University
tents
and draws the conclusion from it that the 16th Amend¬
tax
who still be- tax which discouraged either the
us
freedom
is
best,"
Governor J. Bracken Lee of Utah
in
foreword
a
to
production
says
wealth
is
Frank
Chodo-
would
be
rov's
newly
to
released
Root
E
Tax—
All
of
i
1,"
"t he
way
is
clear:
v
must
we
the
1913.
ment
Mn +
will
Dr. W. H. Peterson
v
light, it becomes clear
13 founding states re-
to
tax
in
be
the
Articles
"States'
jeopardized
in
1819—"the
War
voided
of
power
to
destroy."
lnfant nation remained feeble,
Greater financial sustenance
u
was
^^4 V give^thfc'ento!
governmerit The delegates to the
constitutional Convention of 1787
or, tyy
we Treasury Department
House Ways and Means
the
and
Bill,
Committee
to
eliminate
tax
understood this.
in-
,
the
the income tax per se is
■est
st°od that the seizure of property
the great-
under the guise of taxation would
sPe11 the end of the great experiment in responsible self-government- A compromise was necessary but how?
I
inequity of all.
Frank .Chodorov, Editor of the
right-wing periodical "Human
Events,"
has
1776
that
contends
undergone
.and
America
The sage men at Philadelphia—
Washington, Madison, Franklin,
Hamilton, and others—devised a
revolutions:
two
the first positive
1913,
delegates also under-
that
hold
taxers who
and
constructive, the second negative and destructive; the first re-
remarkable formula.
Spelled out,
■suiting in freedom, the second in
subjugation.
Significantly,
both
the formula reads (Article I, Sec-
revolutions
rect
The
first
back
Revolution
the
to
revolution—the
tax
American
tion II) "Representatives and di-
revolutions,
tax
were
—
losing
began
tax
their
in
colony
the
Currency Act
and the Sugar Act stirred rebellious sentiments among the colcolonists'
taxed
the
deeds,
Bryan
marriage
licenses,
resentment
A
broke.
etc.,
Movement
radical
the
a
189-3
publicans
in
1906
by
and
Re¬
declaring
level off
inheritance
.
.
ac-
the
the
Franklin
D.
months
became
Act
Thus
was
the
signed
wealth."
tion without
proportionality,
representation." PatHenry, delegate from Vir-
threw
the
down
gauntlet:
*Tf this be treason, make the most
•of it."
the
The British backed
Act
Stamp
down;
repealed
was
in
1766.
of
But
British
the
their
learned
They set
way.
taxes upon the colonists—on
paper,
tea.
hard
glass,
The
straw.
painter's
tea
tax
"Indians"
to
Constitution
protect
property
a
legislation here
introduced
early
and
income
1907.
as
abroad.
tax
He
speeches for Senators.
weakened.
was
prepared
Bracken
it
the
would make
S.
that the tax
The
would
rise
a
Amendment
fact.
and
one
previous
of
undone.
was
Said
"The Congress
have
to
power
1913
lay
and
the
shall
to
do
.
collect
did
Union
in
would
enough to
repeated
Adams
in the Fourteenth.
the Ameri-
The tax revolt became
can
Revolution.
1776
British
was
in
,
turning point to the
still other ways.
In
a
that year Adam
course,
pro¬
Some
1943.
The Tax
confisca¬
incomes
above
billion,
$4.7
The
the Federal estab¬
run
meration."
had
said
President Wilson, who
in
the
1912
campaign
from gov¬
ernment" and "the history of lib¬
never come
four
income
mum
no
were
to
a
maxi¬
a
taxes
public,
all in¬
and
the
increase
of
it," assured the nation the use of
progressive income tax legislation
of
20%?
based
Tax
on
The
table,
figures supplied by the
sented
by
come
taxes, records of which
to
Biblical
stitution places
times.
HAS BEEN OUR SCORE
Yes
.
average
is
.
when
.
of nearly
our score
shareowners
no
As
years.
ran
as
similar income
we
of additional partners
.
.
known
as
average
the
it,
see
partners in our business
Since
doubled.
.
.
...
we
have
and also the more
the better.
we
Build¬
believe, builds
to over 85,500 or
grown
Of these, three out
...
or
our score
..
showing it represents.
day all of
our
better still,
owners.
more
make
broad
:i
and the investor-
Our hope is that
shareowners will be customers
all of
For it is
.
our
customers
will be share-
through the wide acquaintance¬
ship with Company practices and policies
such
than
residents of
our customers.
Yes, we're proud of
some
are
with two out of three of these
...
Pennsylvanians also
customer
of four
.
Pennsylvania
gressive income tax. It was a
means to their end of communism,
its political
.
local people
.
Marx and Engels recognized the
revolutionary potential of the income
tax, particularly the pro-
use
people
more
■
hands of those of another. ... If
property cannot retain the political power, the political power will
draw after it the property."
will
new
early 1946, the number of partners in our
Company has
experiment than to
place property in the hands of one
class and political power in the
premacy to wrest, by
of almost 20
positive public relations.
Taxes too harassing,
dangerous
mercantilism with tariat
an
day
-
an
.
ing ownership with local people,
offered by
ownership that much can be done to
understandable
to
the public the inherent
advantages of business management of the utility
industry.
Smith challenged In their "Communist Manifesto"
statism of that (1848), they wrote: "The prole-
publication of his "Wealth of
a
business day for the past eight
per
these partners are
tax restriction upon the States,
But the States had to compete for
talk about shareowners,
you
a score
really "big league11.
That's
The Con-
■
-.
su-
degrees, all
Nations."
In this book,
Smith capital from the bourgeoisie. . . .
called for a free market economy Of course, in the beg
ning this
and warned all nations that any cannot
be effected , • "pt b"
the
pit
professional
a
orchestra.
Foundation, is revealing:
PENNSYLVANIA
POWER
&
LIGHT
COMPANY
the
will be pre¬
last few months and
following
George III and the
era
all composed by the
were
employees themselves within
taxed at the flat rate
erty is the history of limitation on
government—not
num¬
show, which will be open to the
Suppose there were
progressive
comes
rates
tax
of 25%.
approved
have
32
necessary
eral
"Collateral"
of
cast
people, with a pro¬
duction staff
of 40,
headed by
Arthur E. itavanagh, a member of
the Bank's Comptrollers Depart¬
ment, The 17 songs used in the
weeks.
Along these lines, 28 states out of
a
pre¬
bers about 60
proposed amendment to limit Fed¬
enu¬
but
for
be
School, 67th Street and Second
Avenue, Manhattan. The script,
music, lyrics and sets were all.
created by the players, members
of City Bank Club, social organi¬
zation of The National City Bank
of
New
York
and
City Bank
Farmers Trust Company.
knock
say
will
"Collateral"
by the City Bank Club
Dramatic Society on June 10 and
11
at the
Julia Riehman
High.
income
dangers to liberty, particularly in-
people and property would move
to a more hospitable state. The
raised
the rallying cry of "Life, liberty,
and property!" which was originally drafted into the Declaration
of Independence
and later embodied in the Fifth Amendment
and
the
add
original musical comedy en¬
sented
without regard
or
all Americans.
concerns
An
lishment
to census
case •
City Bank Group to
Present Comedy
incomes, from whatever
source derived, without apportion¬
ment among the several states and
on
cen¬
examination.
titled
answers.
individual
the Constitutional fathers must
have reasoned, are fraught with
population.
Sam
the
and
Foundation says a 100%
of
this
of
case
the trend to
on
Whatever the answer, what hap¬
pens
the
revolution
has, of
Constitutional tax theory may
and
have been amplified later by Danregiments to Boston to quell the iel Webster: "There is not a more
'But
that
constituted
about
different
$10,000
A Com¬
tralization and socialism. The
merits
taxation, leaving
substantially proportional
taxa¬
tion, which, surprisingly, the So¬
tion
I
l
Repeal of the 16th.
The
hinges
group
-Hence,
contention
leave it alone. Some
viet
taxation altogether.
Amendment.
out_ progressive
quarter centuries
a
Amendment:
taxes
say
t
resolution in the House (H.J.R. 16)
calling for the repeal of the 16tb
of
costly
root of all evil."
duced
The protection the
fathers
had
pro¬
Constitutional
vided
to
He
to- 91%.
up
situation
tax
i
de-
last
his "Sons of Liberty"
16th
Chodorov-Governor J.
Lee
American
What
down in derision.
16th
became
"a
revenue
I J 1
in' Beverly
Hills,
Rep.
Frederick
Coudert
(R., N. Y.) has introduced a joint
"states' rights" have
Centralization
has
Amendment
"the
One Senator pro¬
confiscatory level of 10%.
shouted
16th
warned
U.
Frank
second
?
Individual tax rates for
range
the
Resistance
and
tested
the
1954
He
measures
charged the tax
"communistic"
was
that
A few
advanced.
i
Calif.
cation.
Since 1913
(
headquarters
young
deteriorated.
i i /,<
i
Amendment has been formed with
The chief actor
nessee,
s
i
come
for farmers. Public hous¬
Grants-in-aid to the States
for highways, hospitals, and edu¬
on the stage was
Congressman from Ten¬
Cordell Hull, later Secre¬
t
mittee for the
ing.
of tea into Boston Harbor,
the British dispatched four
"'insurrection."
A
than offset the
ji » v>
Some go
i'u
proposition to abolish Federal in¬
In
host
pros¬
further than merely
calling for proportional taxation.
They endorse the Chodorov-Lee
new
the
a
Industrial
loss.
.»
program
Tax
cargoes
and
by
produce from leveling
rates.
may more
of
power.
to
tax
perity and individual well-being
"In
up
other federal "services."
from
and
whole
down
A SCORE A DAY
the
dumped
centive
directed to
lead,
was
said:
provided
Founda¬
Tax
figures is neces¬
The figures do not take into
the result of revitalizing
capital accumulation and the in¬
Deal,
a
released
to the
*
loss
revenue
sary.
President
public
of
would conflict
with the Constitution. All taxes,
back
history the
new
A footnote
"redis¬
have built
expropriation and minorities from
laration of Rights was issued by, exploitation. An income tax, since
the Congress condemning "taxa- it would conflict with population
ginia,
and
,
Protection from Minorities
Congress backed by nine colonies
was called in New York.
A Dec-
rick
New
Roosevelt
Amendment
inequalities of wealth.
Hull Fathered
$171,000,000
1,076,000,000
3,691,000,000
5,354,000,000
26%
account
a>» means
rich"
we
hands
revenue
to
taxes
75%
50%
tion
people's govern¬
ment the power is wholesome and
proper." Incomes were taxed to
provide "social security." The vast
himself in favor of graduated in¬
come
"soaking
tributing
the
President
shocked
It
instruments
free silver
campaign.
Roosevelt
the time of the
taxation.
30
Populist
strongly endorsed the
income tax along with
Revenue
20%
incomes to $500,000.
on
in
the dam of
Stamp
its
Supreme Court
the
Loss In
Tax Rate
;
exemptions had fallen.
Corporations paid.
Revenue no
longer was the sole end of income
But William Jennings
and
Maximum
,
personal
a
carried
later
income tax rates had climbed and
was
were
was
and
be taken [every 10 years]."
newspapers,
the Stamp Act of 1765,
the
"'All bills for "liberty has
British^ meration hereinbefore
the
when
Then
onists.
.
raising revenue shall originate in
the House of Representatives";
and, apparently repeated for
greater emphasis, (Article I, Section iX) "No capitation or other
direct tax shall be laid, unless in
proportion to the census or enu-
The taxes imposed by
by tax.
Parliament
apportioned
the several States
cle I, Section VII)
The British
prize
be
cording to their numbers"; (Arti-
reaches
preceding the American Declaration of Independence.
shall
taxes
among
immediately
years
which
nation of liars."
,,
equities," will far from satisfy the
anti-income
One
By
The restriction against Federal tary of State during the New Deal.
He made studies of income tax
taxation waa t0° sev«reThe
the
Revision
by
what
culmination of a year of joint ef-
Tax
the
Amendment
1913.
tax,
later.
year
as
S75-page
16th
when
1913
Texas
"Soak the Rich" Doctrine
set for the second
of
to
to 6%
up
Rights"
by
tax involves the power to
w
a
Civil
Chief Justice John Marshall later
htrfJ
rfn"' -rifnf
..
the
described
it is clear that
-
this
a
.ownj terminating
provision;. f and
the other was in 1894, which was
Theodore
would
be
must
prior
in
Confederation.
The
tried
countryman Edmund Burke stood
power
Amend-
revolution
for laissez faire government.
why
correction
16th
people
the ability
and
fused the Federal Government the
on
of the mistake
of
The
tax.
poorer
pay
in
con-
cent rate
bad
a
taxes correspondingly diminished. Smith and his fellow-
"The
Income
the accumulation of
or
be
/
^
\
was
emergencies
during the New
successfully introduced a
bill carrying a normal tax of
1%
and a progressive surtax
ranging
graduated
or
passed. Two income tax laws
,:v
that
stage
income tax
Cites movements under way to accomplish this.
] "For those of
progressive
The
repealed, and Federal income taxes abolished.
from
Deal,
income tax."
con¬
John
gressman
Nevertheless in the most advanced
heavy
in
Weeks later, bowNance Garner, Con¬
Vice-President
...
Tax—Root of All Evil"—Dr. Peterson reviews its
lieve
course,
the following will
pretty generally applicable
Administration, /
come
ment must be
production.
will, of
used
only, if at all.
be different in different countries.
book by Frank Chodorov—"The In¬
recent
on
bourgeois
measures
countries
PETERSON
Business
of
These
.
be
25
26
I
(2550)
The Commercial and Financial Chronicle
both down again but
production
The Business Outlook
at
Buyers
Director
of
Repeating Arms Co.
Purchases, Winchester
business trends- a^reported by the Business
After reviewing
business
Agents, Mr. Swanton lists "bad points" in business prospect
as:
(1) threat of war and wartime restrictions; (2) threat of
big steel strike; (3) gloomy predictions for political purposes;
(4) government tinkering here apd abroad, with basic com¬
modities markets; and (5) pressure to apply government
stimulants for boosting the economy. Counteracting these, he
lists as "good points":
(1) orderly transition to a buyer's
market; (2) speedy readjustments; (3) a high level of public
confidence; and (4) population growth. Says survey on busi¬
ness is "conservatively optimistic."
as
ception,
industrial business indicator
an
ventories
A.
A.
P.
Survey
economic
study,
that
and
is
narrowed the
previously expand¬
ing gap between lower orders and
lower production.
rent
survey,
not
poll,
a
pure
facts,
November—Still
Dr.
ward pace.
Down
Luedicke,
sis
published
December
analy¬
our
drew
the
and
fallow
are
bound
we
pet economic theories
by
seasonal
a
at
November
of
month
And
In
cal
sharp
until
then
the
face
sharp
decreases.
our
forecast
of
Held
middle
rather
stuck
we
our
showed
pattern.
levels
and
then
with
out
any
statisti¬
or
Activity
—
and production
Employment down.
approach
We do not
target rifle.
nor
lower.
been
not
order
shot
scatter
a
of
more
of
last Fall,
the apt comparison between
polls
and
surveys
as
the
difference
between
has
expected to be.
or
in his magnif¬
down¬
Prices soft
Employment
trend
the
necks
for
1954.
prevailing
series, nor do we try to prove
disprove any of them. Remem¬
ber, we are engaged in and re¬
gloomy forecasts, some politically
inspired Purchasing Agents were
more
optimistic
port
been
for
or
only
on
ments of
of the many seg¬
one
vast and
our
better than
complicated
that
economy.
The Survey
In
ing
reported:
May, 1953—Soft spots—fall¬
orders—static
inventory
employment—
reduction
Orders down
—
prices
—
and
be
Winter usual
a
inventory conscious.
allel
with
1948,
those
when
for
*An
the
1949
address
National
Agents
almost
of
stage
by
Mr.
Swanton
Association
Convention,
The
of
as
were
tion
ex-
of
busi¬
from 3% to 15%,
majority between 5%
Plans for capital ex¬
May
1954.
were
large
as
earmarked
facilities
to
moderniza¬
for
cut
costs, rather
January
picked
end
of
Started
—
us some
the
slow
and
momentum at the
month.
Orders
until
government stimulants
the economy.
are not many of the bad
the
end
predict
the
of
in their business.
tistics
are
Only
falling off
year.
further
a
Now these sta¬
impressive,
sidered
alone
timistic.
No
would
boom,
indicated
and
be
no
con¬
over-op¬
I
gap
in
about
was
balance
quick up¬
the com¬
out-balanced
de¬
report for the first
May.
The indi¬
our
last
large
not
were
was
cline had abated and levelled out.
began
show
to
some
strength.
April
the
For
orders
month
second
business
and
gradual im¬
through
the
second
quarter.
Prices stronger — in¬
ventory correction continued —
and employment turned up a bit.
provement
not changed
buying
policy
months.
many
The
talks
and
scare
conservative
the
of
war
steel strike had
a
May Survey released yes¬
terday and which will be in your
Bulletin
will
week
this
activity
moderate
same
is
I
at
rate
reported
about
last
as
the ma¬
jority of the N. A. P. A. Business
Survey Committee. For the third
consecutive
ber
pro¬
reported decreases since last
June.
Industrial
firm
are
but
trend
to
April.
Hie
be
report¬
orders and
top decreases by a com¬
margin. The lowest num¬
fortable
basic
material
the
condi¬
appear as
(1)
The
which
boom of
ket.
orderly
have
we
failed
1953 into
By
the
is
country
in
manner
from
the
way,
buyers' mar¬
if a buyers'
for
business, this
bad
a
thrived
has
and
grown
great on poor business, because
we have had
many more years of
buyers' than sellers' markets.
The speed with which ad¬
justments have been made. Man¬
has
agement
strong
tant,
control.
panicky
Think!
itself
proven
in
and
Twice
floundering.
or
within
six
('49 to '54),
we
and
recessionary
out
of
years,
have moved into
collapse
a
alert,
Not hesi¬
periods
Orderly. I
—
like that word.
(3)
Then
dence
in
great
had
of
(4)
Just
the
other
day Wash¬
ington reported we had passed
the 162 million population mark.
of
care
just
that
number
maintain
to
of
standard
(5)
lot of business to take
a
And this is
For
talk
asked
we
mittee
see
of
the
people
present
living.
terday:
the
fresh
as
yes¬
purpose
of
this
as
the
members,
Survey Com¬
"What do you
ahead? How far? What do you
anticipate?"
In analyzing statis¬
tics, trends and opinions as I have
for
so
many
be
when
to
opinion.
inventories, though still
we
months
at prices they can afford to pay
—the American way to progress.
is
than
several
ize, bring down costs, make more
available to more people
to
Purchased
made after
were
goods
in
more
confi¬
manage¬
declining business, and most
is being spent to modern¬
the
items
the
of
it
of
show
materials.
'53,
as
experienced
reported
appears
is
future
ment, bankers, investors.
Those
plans and commitments for 1954
capital
expenditures, almost as
the
softening
there
the
most
questions
a
years,
conclusion
I have
that
the
analytical work, but
our
cided
bias
toward
conservatism.
be
to
Right
now we seem
conservatively optimistie.
Allen & Go. Sells
Assoc. Oil & Gas Shs.
Allen
&
Co.
on
June
4
offered
publicly 900,000 shares of capital
stock of Associated Oil & Gas Co.
at
$3 per share. This offering was
quickly oversubscribed.
Of the total net proceeds from
the sale of the stock, the company
plans to use approximately $330,000
to
repay
short-term
bank,
loans and about $630,000 for the
presently planned development of
its properties. The balance of the
proceeds will be added
to the
company's general funds to be
used for working capital.
Associated
Oil
&
Gas
Co.
corporation
amended
was
to
and
others
machinery and equipment
drilling and operating oil
and gas wells. As of May 1, 1954*
the company owned working in¬
terests in oil and gas leases under
approximately 31,906 acres, in¬
cluding 29,980 acres in which it
owns the entire working interest.
All acreage is located in South
Texas along the Gulf Coast trend,
except 1,982 acres of wildcat hold¬
ings
in
Franklin
and
Medina
in
used
Counties, Texas.
skeptical of the facts
there
The
are
predominant
is unanimity
of
replies
of
these
divided.
There is
opinion
and
it
is
good.
MINNEAPOLIS,
Twin
down
business for
in
STOCKS
including
PUBLIC
FOREIGN ISSUES
to
Your
'
Inquiries Solicited
For
City
Bond
Minn.
Club
—
Telephone
REctor 2-7760
Picnic will be held June 17 at the
White Bear Yacht Club.
Headquarters will be the Nicol¬
Hotel, Minneapolis. A cocktail
party on the evening of June 16
let
will
be
held
at
the
hotel
for
members and guests.
Market Place
that
date,
a
has
the
and
from
recession
that
indications
for ALL
WISCONSIN UTILITY ISSUES
peak.
are
for
on
the
...
my
part,
Committee,
be
based
that
I
would
things
hazard
are
not
a
going
too
bad—'might even be
good.
We know there are
points and good points. Let's
how they weigh out.
real'
bad
INVESTMENT
225 E. MASON
Bad Points
Teletypes
NY 1-944 & NY 1-945
The
Annual
voluminous reports and comments
of my colleagues on the Survey
see
BROADWAY, NEW YORK 5, N. Y.
to
up
production
gradual
a
present
what?
to
120
us
yearl
a
And
guess
p. f. fox & CO.
of
contraction
or
Service Firms
With Retail Distribution
brings
to come."
Outlook
of all-time
sales.
The
.1
.
Particularly Adapted
review
peak
UTILITY—RAILROAD—INDUSTRIAL
We Are
That
time
some
Future
ALL CLASSES OF BONDS AND
en¬
able it to engage also in the busi¬
ness
of owning
and renting to
"Over-all, the statistics and the
DEALER SERVICE
isr
primarily in exploring,
acquiring interests in, developing
and operating oil and gas proper¬
ties and in purchasing, gathering
and selling natural gas. In 1953*
the
company's certificate of in¬
engaged
comments show
purchasing ex¬
ecutives, barring strikes and war,
to be optimistic for steady, grad¬
ual
improvement
in
industrial
AND
and
time
correction has been
a
COMPREHENSIVE INVESTMENT
de¬
a
caution
materials exists.
We Offer
sur¬
come
trend, indicate that
Hedging as to steel strike
completed by and/o# war, the forecasts fall into
majority of this class of in¬ some very interesting brackets.
ventory, as 64% report holding Ninty-three percent see moderate
or
moderately increasing stocks. improvement continuing through
Employment trend is slightly up. June. Seventy-two percent, adjust¬
Buying
policy
of
conservative ing for industrial plant closings
short-range, expected to continue
as long as
present availability of
on
Luedicke, in that fine
he made of us, said he found
constant bullish or bearish bias
vey
(2)
to
to
Dr.
in
moved
descriptive of the fore¬
©hanges.
cast
no
prices
material
strength
fabricated
in
in
through the reports the words
"gradual," "moderate," "normal"
economic
Good Points
by
those
month
ing increases in
adjust
Others may be tempered by
growing strength and stability
of our free enterprise system.
It takes
summary*
improvement in gen¬
industrial
the
and
says,
only quote the
"Gradual
uncer¬
to
and
production
increases were
higher than de¬
creases and again they were not
large in proportion, but did in¬
dicate
a
firming up of indus¬
Indo-China
of
the
without
—
industrial
cloud
tions.
market
order
and
not strong enough to indicate a
sharp upswing. It was quite ap¬
parent the industrial business de¬
of
normal
more
by
efforts
a
the
over
men¬
and the reversal of the trend
trial
to
cast
do
tainty
is
surge
the
than for capacity expansion.
before
111.,
estimates
optimistic — al¬
1953. Again, as
in 1953, the capital expenditures
Purchasing
Chicago,
10%.
most
being
was
large
penditures
par¬
September,
recession.
the
statistics
all the way
and
improvement—
appeared
but
the
lag
changes
duction
contraction in 1954 from 1953
ness
the
September—No
24,
then,
ran
very
quar¬
that business would be good,
did not mention
did
as
points. The
during the decline was
shown in September.
since
month,
upswing would
conditions
the
as
Fall
in
creases
what, beginning in the first
slow starter—orders down—
industry
set
that
industrial
number
same
increases
both
increases
eral
I
brisk
as
Opinion
—
they estimated
production
and
though less than 1953.
;';
August—Pickup not
anticipated
By
1
to
since
orders for the first time.
orders would halt the gradual de¬
cline and even strengthen some¬
was
levelling—production high.
Skipping July—
had
going through the second
quarter of 1954.
No sharp up¬
swing. The predominant opinion
buyers' market.
June
2
they
months.
ter and
entering
—
than
several
in
new
time
March—Production
Production cuts closed
static.
to
opinion.
icent
slow
a
There
down to 2
was
Prices
that gap a little more.
policies
and
Corrective
beginning to take
were
effect.
of
hasing
with
time
measures
the
The
points,
vidual
the fact.
cur¬
was
first
order
Production
Prices showing more weak¬
try
a
spot
the
'53,
widest gap
cutbacks
for
ence
to boost
sive sales plans now under
way will
continue the
upward movement
7%
The pressure groups' insist¬
(5)
in any month since Janu¬
tioned
from
to
of
1953.
than
Production
demand
commodities.
vacations, carry this trend
through the third quarter. Fortyeight percent believe that aggres¬
All
ary,
Employment
tinkering,
abroad, with supply
of important basic
for
ments of the committee members.
For
creases
contin¬
strike.
predic¬
strikes
bright
one
reported
in¬
Governmental
both here and
and
steel
purposes.
That
ness
strength.
on
decreases, and that number, 30%,
was
the
highest
reporting
in¬
shape.
trend
report
(4)
a
big
economic
political
Some of them may never
happen, though threats of war and
ued.
cutbacks.
far
industrial
Robert C. Swanton
better
we
Gloomy
tions for
points.
March
We
make
survey
in
were
October —Down
an
as
material
factors
orders.
Expected business would taper off
during the 4th quarter.
by business analysts and econo¬
mists, many people think of the
N.
unworked
into
(3)
the survey except one were down
at about the same rate as January.
15
its wide acceptance
of
transition
February—All of the industrial
Survey Committee of the National Association of Purchasing
Because
the
pessimistic,
buyers' market had so far been
orderly.
Still believed a level¬
ling off would come in the first
quarter, with an upward trend
possible.
Chairman, Business Survey Committee
National Association of Purchasing Agents
(2) Threat of
December.
not
were
that
found
ROBERT C. SWANTON*
By
slower pace than
a
Thursday, June 10, 1954
...
(1)
Threat
of
more
MILWAUKEE 2
war
with
its controls, restrictions and scar¬
cities—taxes.
ST.
Milwaukee Phone: BRdwy. 6-8040
SECURITIES
TELETYPE
MI
488
Chicago Phone: STate 2-0933
all
Volume 179
Number 5332
The Commercial and Financial Chronicle
...
(2551) .27
Continued
from first
reasoning. It was rooted deeply, wise enjoyed unprecedented exby analogy, in the law of eminent pansion from 1943 to 1952.
During
page
do^ain'*
The
fair
•
A New Look at
Regulation
Of Electric Powei Companies
button
a
to
get the correct answers to our regulatory problems,
In this legal-economic-social area,
still have to search for the
we
an-
tried
free
-
-
-
.
hard way, by thinking of opinion, not only as to the rates
aided and assisted, but themselves, but also, as to the
not always expedited, by debate,
standards to be employed in deThe early attempts in this coun- termining them.
^
try to regulate utility rates were;' ;•
through direct action by legislaRate Standards Essential
them out,
.
IfterT^wa^hlfwLnThV^at^
Stetcs,
Ritcr the
between the
wsr
^barfslro?dsoatmSiehTerUna0sbasis of
much
the
per
the
franchise
this
method
casionally,
of
means
also
was
while
did
still
not
pas—
tried,
but
used
oc-
obtaining the desired
From
last
small
a
half
there
tury,
larly
during
m
first
current
form
years
century, the
of
of the
regulation.
size
of your
difficulty in concluding
that rate regulation by the direct
by the inflexible franchise has no place in
the: modern scheme of things
The
task
process,
calls
cails for
for
or
specialization.
It
impartial agency, ade-
an
""
quately
is the
ie theory, perhaps not
always
realized
lzed in pracuce,
practice, ci
of our moumodern
public utility
One
utility
what
the
of
commission.
primary
management
it
considers
revenues;
is
to
of
one
that
the
which the
are
just
Two
aims of
to secure
be
the
rates
adequate
main
re-
according
revenues
and
are
to
collected,
reasonable.
Unjust,
unreasonable and unduly discrim-
inatory
far from
the
1920 s,
of the
an
.1
horsepower
in-
•
55,000
the
business
excellent
or
It
so.
..
_
of
this
natural
well
as
the'last
in
one
was
.
during
&
pipe
gas
has
been
compressor
decade
this
*
oeriod
f/vi iv/u
that
r-
was
rather
quesuon
™bnn^tftnHnnsimSrW
Thi rlmft
aS„.^?
j1^.1952
as
to in
»; *hey amounted to $1.9 this
billion.
inflation.
severe
During
period electric utilities have
prospered
and
their
rates
have
The Srdwth of the natural gas been remarkably firm even under
-;The.Committee on Progress n pipe line business has been phe. great fafIat,onary pressures. In
National Association
of Railroad
nomenal ln the last decade. It is my opinion, the record shows that
™in
pp
rtnfivA
bee!
has
than
Tlrose
f^nin
it h?i^ hepn
parts
in
tminni
criticized
HpfpnHoH "3
Ihe F^a 1
of
S3Xj£°
SS
crsi Jrower c
Commission
commisson
has
njis
worked'welf'*
well«
meth°d
worKGd
a
jurisdiction
wholesale interstate rates of
over
th6
uses
Ac.cordin!ly1 eome
to these
on offheTates^/nitural
of the rates,of natural conclusions,
(1)
reasonable
§5&^
de^siZt Sg« /"iT
PoWwerCCoWmh^ir jSS £?
Company
Edison
approximately
miles of pipe lines and four mil-
commisions lion
utility and
™
the
field
regulation.
94 y
s
of
public
In "Munn
allowed
Case,
the
Commission
the
commodity value of
gas produced by the company in
utility
rate
Illinois"
vs.
xnese
the
acis,
wnicn
are
pracucany
same as to rate-making stand-
it
it?nn^tinn
pifbiic utilh? p?oberties
,
to the
B
polls not the courts."
degrees,
the
Su-
Since the decision in the Hope
'from
this
case, regulatory commissions have
shown by a great preponderance
of opinion that they favor the in-
however,
preye cgourt'departed
holding that no standards of ratemaking were required as a con-
stitutifnal
of
test
according to the Commercial and
ter of constitutional law.
reasonableness,
vestment
(sometimes
lif
protection of the otilitv
torsi^
eenelllv ^ iA Si
called
the
Finally in 1898, as you know well, "prudent investment," "net innrnir|
pff^tivplv rpvprspH
its vestment" or "original cost"! rate
cour^
effectively reversed its
vestment" or "original cost") rate
held
in
that
to
the
rates
yield
Munn
must
and
case
fixed
be
so
is
It
that
true
state
some
tribe
its invec
,
-
nubTo
'
value
a
of
in
„
b
It shows what
fact
wp
that
hac
£ d\artrof
th
t
4 Issue
„
u.sed .and
J1 the, ?ubllc s.er7lce> Plus [
required working caPltalFn.v n
i
n?
A}
Fair Rate of Return
-
1
;
i
-
The second element in the rate
standard is fair rate of return. The f
Federal Power Commission, in
spite
of
statements
to
the
contrary, does not have a set
of return, i It considers all
rate
many
the
bafora reaching
S«en case,
of
May
10,
know
1
economic
or
social
Continued
1* 54.
on
page
,
of
evaluating
determine
Smyth
v.
Ames
169
U. S. 466.
by
about
32
facilities to
base, is used
rate
out
of
49
responding
to
a
commis¬
question¬
In addition, some of the
commissions which purport to use
the
fair
value
base, appear to
treat
fair
value
as
OF
justment to cost figures in reach¬
ing the value base.
I believe it
can reasonably be said, therefore,
our
offices
70 NIAGARA
BOwIing Green 9-2070
STREET, BUFFALO 2
Teletype:
INDUSTRIAL and MUNICIPAL
SECURITIES
rate
base
has
greatly
W. C.
pre¬
dominated in the determination of
WAsbington 8060
1-2827
PUBLIC UTILITY, RAILROAD
that in the last decade the invest¬
ment
Private Wire between
Dealers
few others
make only a relatively minor ad¬
INVESTMENT SECURITIES
BU 122
Distributors
—
synonymous
a
UNDERWRITERS AND DISTRIBUTORS
—
Underwriters
utility
the
just and reasonable rates for pub¬
utility service.
It might be
noted that this, generally speak¬
ing, has been a period of high
lic
Langley & Co.
Members New
115
York Stock
Brpadway
Exchange
New York 6, N. Y.
Tel.
BArclay 7-8800
prices when fair value
would
quite naturally be expected to
exceed
Advantage of
Changing Markets
Thus
test
our
at
regular
the
of all
end
panies
which
"CURRENT RECOMMENDATIONS"
stood
through
its
timely
switch
at
utility
Class
and
own
business
recommendations,
plant
$14.8
the
Josephthal&Co.
Industrials
lion
$6.5
to
5
of
from
billion
stock
from
at
Canadians
Preferred Stocks
$25.7
to
Bank
electric
$3.4 bil¬
during
the
dividends
in¬
Acceptances
$285 million in 1943
$595 million
billion
The
to
in
in
1952.
this
period
$2.1 billion.
Salomon Bros.
Surplus
from
&
$1
Members New York Stock
natural
gas
industry
like-
2 Southwestern
Bell
Telephone
Co.
.
(
Teletype NY 1-319
Equipment Trusts
period.
increased
Exchanges
Railroads
com¬
billion;
amounted
increased
to
Members New York Stock Exchange
120 Broadway, New York
Public Utilities
figures, such
revenues
utilities
Common
American Stock Exchange and Other
Municipals
plant
B
1952, the last year for
Operating
creased
U. S. Governments
billion.
up-to-the-minute
same
Phone: WOrth 4-5000
1943,
have
we
utility
your
of
Class A
the end of
stimulate
principle.
try has enjoyed its greatest ex¬
pansion during this period. Thus
r
and
reasonable
First, the electric utility indus¬
by changing markets, we supplement
utility reports with short and concise
guide
a
investment
the
of
Base
have had
we
What has that test shown?
advantage of the opportunities afforded
Provide your customers with this
"Investment"
the
of
Rate
Take
To take
investment.
net
Tests
Hutzler
Exchange
Sixty Wall Street, New York 5, N. Y.
/.
,,
v.
Public Service Commission 262 U. S. 276.
3 National
Utilities
Association
of
Railroad
Commissioners,
53rd
Proceedings (1941) page 370.
and
Annual
Boston
,
Philadelphia
,
.
J
a
*•
—
than
!
hppn
to use the
the
|
vJ
course, students of regulado n0^ exPec^ to find a wide
capHal to flnan« If'T oI rates o£ return allowed
exDansiP
in lltiiitv fa
\
arge electnc and Sas utilities,
p
n n utility fa- jn 0ur recent natural
gas
cases
showing
commissions which have attempted
investment base have
been enjoined by the courts on
and useful in the public service.1 local
statutory
grounds.
These
Thus in 1898 a judicial standard— decisions were based on statutory
fajr value rate base
emerged, law, however, and not constitui would
like to emphasize that tional requirements,
this
was
a
judicial as distina study now in progress by the
guished from a legislative stand- Federal Power Commission indiard.
It
was
based
upon
legal, cates that the .investment method
as
fair
fair- return on the
properties used
base.
™cfmonf
SSftTl ?n JLP,Er
fnZtcd
C'r nnireleyan? facts
of lhl total
This
i T sn!Pnd,1 co"c*uslon "> a
tbe
with investment and
NY
PatCuUra{^ reLurce
a
invesTment bas^wL
SCH0ELLK0PF, HUTTON & P0MER0Y, INC.
Teletype:
of
(1877), the Court held ards, do not require rates to be stronglv affirmed
tw
ratemaking was entirely a fixed with reference to a fair the net
allegislative process which was not value rate base.
In the leading
together approoriate for normal
reviewable by the courts. I am case of "Federal Power Commissure
that all of you have heard sion vs. Hope Natural Gas ComT
+u
..
*
many times the oft-quoted state- pany," 320 U.
S. 59, decided in
n
e QI1 ve;Zf0ar+Pe"od _ended
ment of the court in that case: January 1944, the Supreme Court on
AJec; V*.» 195y>
new
«For protection against abuses by held that the fair value rate base corporate financing in the Umted
legislatures the people must resort was no longer required as a mat- States amounted to $31.7 billion
naire.
STREET, NEW YORK 5
problem oeculiar to thn nrodnr-
tioPn
that
utility, the con-
—
a
113
sions
63 WALL
line
authorizing
/>nwiw»
by
the_electric light bulb, the electric utilities became law in
rates are generally proby law. In the field of rather
rate making one would not expect
hibited
the views
In
ktr
divided on lofj
uie
.rower
before
years
holding
sponsibilities of commissions is to
see
was
during
/
Thus the record of the electric
Cominission issued certificates of
public convenience and necessity
;
mnrp
woSffi
been*so.
^
m
25
industry—with total assets of some
$25 billion—and when I ponder
the complex regulatory problems
in this complicated economic age,
legislative
But
Power
beginning
the
When I think
no
was
years.
services
The'Vvestment Tate'base had '
^der^^Ivv'Sag^o/h 1Acc,?rdhl^ *° its greatest recognition in actual
£hd £.fnrpmlcnfi
wfn' A^ff ?
Publ}cf.tl0n of ihe practice. I Its use in this period
in 1wh^n it HaHHpH Sp
American Gas Association, natural was widespread. The method has
?Southwestern
bouthwestern
Case"2
Bell
Case ^
was
/i S whereas
"l
h*d an adequate test in a Period ;
amounted to $623 million
of
abs?lutely procedure
regulatory
are
competent
u
™
vented
developed,
the
commission
I have
principle
40
Federal
and
the
of
or
so
criticism.
regulation
iQ/11
utility
services
npoccarv if
re¬
sult.
to
the
P.erl°d
^
In my opinion,
stamftrds for and Utilities Commissioners
tiiA IavpI nf rofpo fpi'
ripiprm'inind'
the
provide
value
close
voftnl ntinn
when
the
swers
of
lirViAn
and the regulatory commission exactly to coincide, As a
matter of fact, in this field we
frequently find wide differences
-
•
during this period it
sumer
-
for
i
cilities
period.
Cleveland
Chicago
^
San Francisco
<
28 *
■i\
23
(2552)
The Commercial and Financial Chronicle
Regulation
Of Electric Power Companies
rate
reasonable has ranged from 5^2%
to
the
not
have found
6V4%. Because of the similari¬
of business, growth and fi¬
of
essary
ties
ously,
nancing among these companies I
would not expect to find such dif¬
ferences in the financial facts and
economic situations as would call
it
wide variations. To re¬
iterate, however, the Commission
does not have a standard percent¬
for very
age
all
as
the fair rate of return in
out makes its findings
cases,
from the facts of record.
In addi¬
expect the rate of
with changes- in
financial and economic conditions.
The Commission has been criti¬
tion
we
must
return to change
for
cized
attention
much
money
of
paying
allegedly
the
to
return.
return, is certainly
ingredient thereof.
utility could
no
is
of
measure
permitted
not
a
the
Obvi¬
to
if
its
earn
includ¬
ing fair amounts for the commpn
equity.
There is nothing novel in em¬
phasizing cost of capital, in fixing
the
of
rate
clear
in
return.
1953
a
This
is
made
a
com¬
report of
of
judg¬
improvements
it
is
interesting to note the
The
re¬
1953
hundreds
in
1945
of 5.6%
in 1951.
1948
returns
1946
and
to
and
low
a
For
In the five years
the percentage
and
1952
different
6%, 6.2%, 6%, 5.6%,
and 5.8% respectively.
It is also interesting to note the
earnings on common equity (com¬
solidated
sales
net
Other
divisions
industrial,
chemicals,
1949
years
made
the Public
of
Utility Sec¬
of return
.
.
,"5
5
to
Report of the Standing Committee
Survey and Report as to Developments
During
the
Utility
Law
Year
the
in
1953,
page
Field
of
x.
Public
<
stock
mon
and
also were,
able level.
period,
from
in
1953.
sales
$237,730,655
surplus).
-^•• \
•.
*
•
*
r'
■
Public Utility securities.
I believe, at
Commission's
Sales for the
March
three
31, 1954
earnings
months ended
were
were
$98,205,113
$7,203,476.'
With King Merritt Co.
(Special to The Financial Chiionicle)
1953.
VISALIA, Calif.—Caryl C. Tur¬
ner
has become connected with
manufacture
(Special to The Financial Chronicle)
American
laws of
sues
reason¬
authority
which
its
regulated
are
the
does
security is-*
by a ' State /
Z
.
The Commission has
tive
of
"utility organized;.
in a State under/
a
operating
the
a
commision."
.competi- ;
respect to security
It grants exemption from*/
a
rule with
issues.
this
rule
only
showing of good
BOENNING & CO.
fine
and
For the
49%
not- extend to
and
■
upon
genuine
a
Coast to coast retail
►
I believe *
cause.
distributing facilities
the rule has worked well.
In
Philadelphia 3, Pa.
in
last
the
the
it has
year
Commission's
certain
unreasonable
through 23 offices
to
come
attention
that,'
sales, in-.r
negotiated
dentures restrict
located in
Distribution
,
principal
financial and business
refunding for an
or
prohibit
centers.
period
refunding unless the interest rate
the
on
refunding issue is
the
as
rate
funded.
high
as
the issue to
on
I believe these
be
re¬
provisions;
inimical to the public interest,
and should not be approved.
As
are
Organization
far
I
as
"
ties
in
indentures
under
sold
they
learn,
can
included
foremost in serving
PUBLIC
securi¬
competitive/bid- 5
"
We
(holding and operating)
have
changes
last
it
to
the
that the
me
best
a
fair* price for debt se¬
competi¬
through the
tive bidding procedure.
.
Bonds
Markets in
Preferred Stocks
Common Stocks-
way I
is.
secure
curities
in
rates
Primary
*
Under these conditions
year.
seems
to
interest
Public Utility
ZV
'
substantial
seen
in
not
are
of
ding.
UTILITY COMPANIES*
in the U.S.A.
The electric utility industry as a ;
whole is in a strong financial con- T
dition.
It is doing
rendering adequate
good
a
job of
Complete Trading Facilities
service
at •'
what appears, again on the whole,
to be reasonable rates. I am sure
♦electric
gas
telephone
DUDLEY
water
I
speak
I
say
for
all
regulators
will do
keep it that way.
KING
F.
I
Proxy Soliciting Organization
MAIN OFFICE:
70 Pine St., New
York, N. Y.
Tel. BOwling Green 9-5550
we
congratulate
when
utmost
our
New York
to,
on your
reasonable
Louisville
75th
on
Cyanamid Co.,
stock
on
Common Stocks
($100
par
of
of
ferred for each 15 shares of
mon
held
of
Transferable
3:30 p.m.
record
June
warrants
(EDT)
Weld
White,
nationwide
on
&
group
65
Corporation
Broadway, New York 6
-»•'
Prior
to
common
#
'
buffalo
•
philadelphia
•
*
cleveland
•
syracuse
The
is
stock at
121
1,
1964
the
pre¬
convertible
into
$50
per
Carl M.
added
to
30
the
Natural
stocks
of
Ei.reka
••
Sw Diego
Gas
Companies,
those
on
favor.
we
request.
.
the
new
Loeb, Rhoades
Underwriters and Distributors
Investment
:
.....
*
members
of
NEW
the
new
&
Co.
of
Securities
42 WALL STREET
share -of
'
be
and
on
Copies
invest¬
net proceeds from the
will
♦
at
'
issue
Oakland
•
Pasadena
pre-:
com¬
expire
common.
boston
hartford
July
stock
Utilities
comments
banking firms underwriting
the offering.
ferred
•
1, 1954.
June 17, 1954.
Co.
heads
a
of
Electric
brief
ment
Union Securities
Spokane
Portland
•
Indianapolis
value).,
par
share
one
95
with
stock,
series C, at
at the rate
.
•
We have prepared comparative studies
giving extensive data
rights to subscribe
for 580,235 shares of 3%% cumu¬
lative convertible preferred
and
i*
Jose
Seville
•
Cleveland
Natural Gas Companies
of
one
June 3 offered to holders of its
common
SaJj
•
•
Electric Utilities and
the largest chemical and
pharma¬
ceutical firms in the United
States,
Preferred
Minneapolis
•
Fresno
•
Los Angeles
•
Pittsburgh
•
Group
Gyanamid Offering
American
Chicago
•
Philadelphia
Detroit
•
Sacramento
Underwrite American
Bonds
San Francisco
•
Springfield.*
rates.
White, Weld
Utility
•
'
,
you
Boston
birthday.
I wish you, in the;
language of my calling, many
happy years of adequate service
at
Public
to
Cyanamid also owns
outstanding stock of. r| SANw JOSE,; Calif. — Boyd; S.
Southern Minerals Corp.,1 South-/ Eckard is now with Paul C. .Ru¬
FPC and Securities Issues Jr "
ern
Petroleum Corp.; arid' South-, dolph & Company, Bank of Amer¬
The Federal Power Commission. ern - Pipe
Line Corp. and 50% ica Building.
has limited jurisdiction over -the
security issues of electric utilities ':
engaged in interstate commerce.:
The
have specialized in the
underwriting and distribution of sound
A National
to
capital
net
expended
same
products
during
organic,
being
this
and net
various services. The
renders
Co.
$380,393,340,
and
net
earnings
from
$16,149,513
to
$27,472,697.
largest division, Lederle Labora¬
tories, accounted for 25% of con¬
were:
five
company
increased
manufacture^ and sells
of
Chemical
(Japari), Ltd.
the
the
346,969
ing by 50 cents per share annu¬
ally to June 30, 1962, and there¬
after at $100 per share.
Through various divisions the
6.9%
.
Arizona
additions of $190,206,312 with $67,-
1955, thereafter at prices decreas¬
company
Inc.,
Lederle
During
plants
preferred stock is call¬
new
operating income of Class A and
Class B companies amounted to
5.9% in 1943, reached a high of
from
existing
able at $104 per share to June 30,
stability in electric
utility ipcome in the decade from
1943 to 1952. Expressed as a per¬
centage of net invesment, utility
i
to
and research laboratories.
tion of the American Bar Associa¬
a
For many years we
exercising
Co.,
and
agricultural- King Merritt & Co., Inc. He was
plastics and previously with Davies & Co. and
years
1948 to 1952 respectively', resins, pigments, surgical sutures James Ebert Co.
tion
in which it is stated that
they were as follows: 9.9%, 10.6%, and ligatures. Chemical Construc¬
"The cost of money continued to
10.6%, 9.5%
and 10.2%.
These tion Corp., a subsidiary, designs
be a major factor in fixing rates
With Paul C. Rudolph :
earnings were not only stable, but and constructs chemical plants.
mittee
too
cost ;
in
markable
nec¬
prosper
reasonable cost of capital,
fair rate
Cost of money, while
in arriving at
exclusive
considered
ment.
Thursday, June 10, 1954
.
of the stock of Jefferson Chemical
cor¬
determination; the porate purposes, including capital
cost of money is not an exclusive
expenditures for new plant facili¬
test, but it must necessarily be- ties for extensions, additions and
A New Look at
we
capital and for other general
judgment
a
the rate of return
necessarily
The rate of return is
Continued from page 27
.
.
york
stock
YORK 5, N.
exchange
"
Y.
*'
*
and
other
leading
stock
and
commodity
exchanges
cash
funds of the company and will be
available
as
increased
working
Private W ires
to
Branch
Offices and Correspondents in 80 Cities
-•
Volume 179
Number 5332
...
.
(2553)
The Commercial and Financial Chronicle
29
The Bond Club of New York
Wright
Glore, Forgan & Co. (retiring President of
Club); Ranald Macdonald, Dominick & Dominick
(incoming President)
Duryea,
Bond
Ernest
W. Borkland, Jr.,
Richard
A.
Tucker, Anthony & Co.; Duncan R. Linsley,
Harold H. Cook, Spencer Trask & Co.
Walter F.
Blaine, Goldman, Sachs & Co.; Wickliffe Shreve,
Hayden, Stone & Co.
First Boston Corporation;
Merrill Lynch, Pierce, Fenner & Beane; John Wilson Dayton,
Dodge & Co.; William M. Cahn, Jr., Henry Herrman & Co.
Woods,
Clark,
Eugene
the
Bashore, Blyth & Co., Inc.; Lee M. Limbert, Blyth & Co., Inc.; George S.
National City Bank of New York; Lloyd S. Gilmour, Eastman, Dillon <& Co.
I
Moore,
Hudson
Theodore
W.
B.
Lemkau,
Murphy and Edwin L. Beck, Commercial & Financial Chronicle
Morgan Stanley & Co.; Paris Scott
Ralph Hornblower, Jr., Hornblower
Wertheim & Co.: Richard C. Noel,
First
Boston Corporation;
George T.
Hawes,
Caldwell,
Hal E.
Van
Russell, G
& Weeks
ore,
Alstyne, Noel
Flynn,
Hornblower
Forgan
& Co.;
& Co.; William
&
Weeks
R.
Jansen Hunt,
Gordon B. Whelpley,
Gpldman, Sachs <ft Co.; Brooke L. Wynkoop, Fahnestock <ft Co.: E.
White, Weld & Co,j
fwn W. Valentine, White, Weld & Co^ Boston; Thomas McPhee, Drexel & Co.
30
(2554)
The Commercial and Financial Chronicle
30th Annual Field
Edgar J. Loftus, R. S. Dickson & Co., Inc.; Joseph Ludin, Dillon,
Read & Co., Inc.; Robert J. Lewis, Estabrook & Co.
Robert
Nowlan, Stroud & Company, Incorporated; Elmer
Dieckman, Glore, Forgan
Schluter, First National Bank of Chicago; Francis B. Bowman, Chase National Bank
Austin
Brown,
Lee
Raymond
W.
Dean
Witter
Carroll
&
&
Co.,
Co.;
Lee
W.
Carroll,
Albert
C.
Purkiss,
Newark, N. J.
t
W.
Y.
Walston
First
D. Stitzer,
Ernest
Boston
Equitable Securities Corporation; Walter W. Wilson, Morgan
Stanley & Co.;
Borkland, Jr., Tucker, Anthony & Co.; J. Raymond Smithu'^Weeden & Co.;
-.*.1
Eai"l K. Bassettj W. E. Hutton & Co.
.
_
..
..
.
...
.
Edwin
Co.;
of N.
W.
C.
&
Urban
.
.
..
A.
Thursday, June 10, 1954
Robert G. Dillon, Dean Witter & Co.; John P. G. Moran, National
State Bank, Newark, N. J.; Sydney G. Duffy, Blyth & Co., Inc.
Laffey, W. C. Langley & Co.; Frank E. Gernon, Carl
Curran, Singer, Deane & Scribner; Frank M. Stanton,
Co.; Francis
Corporation
..
Day
Dean Witter, Jr., Dean Witter & Co.; Wendell R. Erickson, Stone &
Webster Securities Corporation; James D. Topping,
J. D. Topping & Co.
E.
Harold J.
.
Cannon,
James
B.
M.
Whitley, Halsey,
Devlin, Blyth
Paul
Loeb, Rhoades & Co.;
Boston Corporation
First
Stuart & Co.,
& Co., Inc.
Inc.
D. Mooney, Jr., Blair, Rollins &
Co., Incorporated; Joshua A. Davis, Blair, Rollins &
Incorporated; Emmons Bryant, Blair, Rollins & Co., Incorporated; Brittin C.
Eustis,Spencer Trask & Co.; Charles F. Bryan, Spencer Trask & Co*
.v-
>
John
Volume 1^9
V/
Number 5332.,.
V
.
The Commercial and Financial Chronicle
'Q
>\
At
Frederick
A.
Krayer, E. W. Clark & Co.;
'^O
(2555)
V
\y
''
Dudley F. King
■
John S. French, A. C. AUyn and Company, Inc.; W. J. Brookes,
Clark, Dodge & Co.; F. Donald Arrowsmith, J. R. Willislon & Co.
Craft, American Securities Corporation; Maurice A. Gilmartin, Jr., Chas. E. Quincey & Co.;
George P. Rutherford, Dominion Securities Corporation; E. F. Dunstan, Bankers Trust
Company; Walter W. Wilson, Morgan Stanley & Co.
H.
''')J. V.
Sleepy Hollow Country Club
Robert H.
Arthur
31
Kiendl, Guaranty Trust Company of New York; Jonas C. Andersen,
Edward
R.
Greeff, Adams & Peck; Braman B. Adams, Adams
Kuhn, Loeb & Co.;
&
Peck
Joseph C. Nugent, Mabon & Co.; Arnold Tschudy, Bank of America
Joseph F. Patten, Bear, Stearns <ft Co.; H. Lawrence Bogert, Jr., Eastman, Dillon & Co.; Charles L.
Morse, Jr., Hemphill, Noyes & Co.; C. Russell Lea, Reynolds & Co.;
Joseph S. Nye, Cosgrove, Miller & Whitehead
Ira
B, MacCulley, Equitable Securities Corporation; John L. Gaerste, Cooley & Company, Hartford,
Conn.; Arthur Jansen, W. E. Burnet & Co.; John L. Cronin, Jr., Shearson, Hammill & Co.
W,
1
Eugene P. Barry, Shields &
Canady, W. L. Canady
Company; Fred
£
Co.,
Inc.;
M. McClelland, Kidder, Peabody & Co.; William
Oliver
M.
Whipple,
Union
Securities
Corporation
L.
Joseph O. Rutter, Rutter & Co.; Frank L. Mansell, Blyth & Co., Inc.; Harry A. Jacobs, Jr., Bache &
Co.; Edward F. Swenson, Jr., First National Bank of Miami, Fla.; Allen C. Du Bois, Wertheim <ft Co.
S
32
(2556)
The Commercial and Financial Chronicle
.
..
Thursday, June 10, 1954
Friday, June 4, 1954
George E.
Bullock;
Clark, Adams Express Co.; Robert E. Clark, Calvin
John S. Linen, Chase National Bank of New York
John
W.
Carleton, Eastman, Dil'on A Co.; D.
Barton, Eastman, Dillon A Co.
Spencer Phillips, Emanuel, Deetjen A Co.; William H. Long, Doremus A Co.; Hugh Bullock, Calvin
Bullock; R. W. Pressprich, Jr., G. H. Walker A Co.; David Van Alstyne, Jr., Van Alstyne, Noel & Co.
William
M.
Rex,
Clock";
Clark, Dodge A
James J. Lee,
Co.;
W.
Roxannc Roddy—"Beat
Hutton
<6:
Co.
E.
the
George
Frederick
Edwin
F. Peet, Burns Bros. A Denton, Inc.; George E. Nelson,
Bonner A Gregory
John B. Roll, J. B. Roll & Co., Inc.; Alfred H. Hauser, Chemical Bank & Trust
H. Robinson, Schwabacher & Co.; Hubert F. Atwater, Gammack A
K. Coggeshall, Schoellkop.', Hutton A Pomeroy, Inc.;
D. Bartow, Jr., Bartow Leeds A
Co.; Malon S.
Andrus, J. G. White A Company, Incorporated
Francis
Middleton
Blyth
A
Rose,
Co.,
Co.; Edward
Co.
Laird, Bissell A Meeds; Robert W. Fisher,
Inc.; Clarence W. Bartow, Drexel A Co.
•1
George
R.
Charles
J.
Waldmann, Mercantile Trust Company; Eugene G. McMahon, Helier, Bruce A Co.;
Waldmann, Kean, Taylor A Co.; L. Eugene Marx, Bear, Stearns A Co.; Ellsworth S.
Bankers Trust Company; David H. Callaway, Jr., First of Michigan Corporation;
Fred D. Stone, Jr., Marine
Trust Company of Western New
York
McEwen,
Hubert
Clarke,
General
Manager
of
Sleepy
Hollow
Country
Club,
•?'•/■
Scarborough,
N.
Y.
Volume 179
Number 5332
Joint
...
33
The Commercial and Financial Chronicle
Spring Outing Held May 21st-23rd in Fresno
l/'J'/Jfo &4ssssm
John
S.
Cnstello, American Trust Company, San Francisco; John Bu:ck, American
San Francisco;
Graham Walker, Joseph McManus & Co., New York
Sidney Holtzman, Joseph McManus & Co., New York City
;#!$?#■[# V'S$ \
WW# -/;w ;v %>>>»•
z
<
Trust
>2-y>x W&M,
^
Company,
D.
City;
Call, Revel Miller & Co., Los Angeles; Frank Link, Harris, Upham & Co., Los Angeles; Albert
A. Hewitt, First California Company, Incorporated, San Francisco; Pierre Kosterman,
Zilka, Smither & Co., Inc., Portland, Oregon
?
9
r
i
J
-/
I
,
■
!
r
in
%*
4
*
t:
^ Vv'' *' \ilRv
VMmmMJi
,**4
Si:
mmm
■
*'
iili
*4 ||
,>
4
SP- M;
f.
;•: ••
pipililfll
h
m-w
>
tm
?
Msffl
-
1$
|
/'%
4>.
% $
rll |4
IP a
$
■m
l-v4
Phillip J. Clark, Amos C. Sudler & Co., Denver, Colo.; John
Hecht, Dempsey-Tegeler & Co., Los Angeles; Walter Vicino,
Blyth & Co., Inc., San Francisco
Herbert
Loa
C.
A.
'4
Gordon
Tuttle,
Crockett, Crockett & Co., Houston, Tex.; Gordon B.
Gross, Rogers, Barbour, Smith & Co., Los Angeles;
& Co., Los Angeles
John R. Nevins, Lester, Ryons
Irish, F airman & Co., Los Angeles; Chester M. Glass, Jr., William R. Staats & Co.,
Angeles; Collins Macrae, Wulff, Hansen & Co., San Francisco; Brooks D. Weber,
First California Company, Incorporated, San Francisco
C.
W.
Co.,
Elliott, J. Barth & Co., Los Angeles; Paul E. Isaacs, Sutro &
San Francisco; A. J. Bellizzi, Walston & Co., San Francisco;
Livingstone, Marache, Dofflemyre & Co., Los Angeles
Charles
Hugh R. Schlicting, Wm. P. Harper & Son & Co., Seattle; James M. Stewart, Wilson, Johnson
& Higgins, San Francisco; George^V. Hunt, McLaughlin, Reuss <ft Co., New York City;
Henry Perenon, Henry F. Swift & Co., San Francisco
|Mmm
4-i,v 1
||>J
lit
>
>
if
Max
Hall, Dean Witter & Co., Los Angeles; John J. Quinn,
(. Patten, Jr., Blyth & Co., Inc., Seattle;
Paul G.
William
f
'■'
A
Stone <& Youngberg, San Francisco;
Johnson, Blyth & Co., Inc., Seattle
Jack
H.
Forest
Alexander,
Kerr
W. Shipley, Morgan
Bell, Los Angeles; R. Brown, Stone & Youngberg, San Francisco;
<ft Co., Los Angeles; Houston Hill, Jr., J. S. Strauss & Co., San Francisco
&
The £ommerciai and Financial Chronicle
34
San Francisco Security Traders Association
Kimball
Brush, Slocumb & Co., San Francisco; Benjamin Robertson, Jr., Schwabacher & Co.
B. Stone, Blyth & Co., Inc., San Francisco; William Dondero, First California
Company, Incorporated, San Francisco
Palm,
Emmett
San
San Francisco;
Rudolph Sandell, Shuman, Agnew & Co., San Francisco; Nicholas
P. Kirwin, Dean Witter & Co., Los Angeles; Verner Kraft,
Oscar Kraft & Co., Los Angeles
John
C.
William
Inc.,
.
William
Bank
&
Zimmerman, Bingham, Walter & Hurry Inc., Los Angeles; J. E. McClintick, Wells, Fargo
Union Trust Co* San Francisco; Robert D. Diehl, Paine,
Webber, Jackson & Curtis,
Los
Angeles; Harry L. Arnold, Goldman, Sachs .A Co., New York City
..
Thursday, dune 10, 1054
and
A.
Larkin, A. G. Becker & Co., Inc., San Francisco; William Murphy, Holt & Collins,
Francisco; James R. Imhoff, Frank Knowlton & Co., Oakland; Leslie J. Howard, Jr.,
Brush, Slocumb & Co., Inc., San Francisco
Farrell, Irving Lundborg & Co., San Francisco; H. Hodge
Davidson, Davidson & Co., San Francisco; Thomas Price,
McAndrew & Co., Incorporated, San Francisco
Hecht, Dempsey-Tegeler & Co., Los Angeles; Robert M. Green, Pledger & Company,
Los
Angeles; William Ginn, Dean Witter & Co., Los Angeles; R. Dahl,
First California Company, Incorporated, Los Angeles
.
Maury Kessler, Wells Fargo Bank & Union Trust Co., San Francisco;
Milton Reiner, Wells Fargo Bank & Union Trust Co., San Francisco;
William
Belknap,
William R. Staats & Co., San Francisco
Donald
&
E. Summerell, Wagenseller & Durst, Inc., Los Angeles; Charles E. Jank, Frank Knowlton
Co., Oakland; G. Tapp, Pacific Coast Company, Vancouver, B. C., Canada; Timothy Spillane,
J. A. Hogle & Co., Los Angeles
Kenneth Fazackerly, Irving Lundborg & Co* San Francisco; Stewart Barker, Crocker First National
Bank, San Francisco; William Wright, jLester, Ryons & Co., Los Angeles; Nieland Van
Arsdale, Blyth A Co., Los Angeles
Volume 179
Number 5332
...
The Commercial and Financial Chronicle
(2559)
35
Security Traders Association of Los Angeles
Edward
San
Clifford
J.
Bourbeau,
rrancisco;
D.
Shipley,
Daniel Reeves & Co., Beverly Hills; J. F. Finnegan, Hannaford &
Talbot,
F. Sullivan, First California Company, Incorporated, San
Francisco;
Chambrean, Merrill Lynch, Pierce, Fenner & Beane, Fresno
E.
F.
Hutton
Gifford English, E. F. Hutton &
William Brown, E. F. Hutton &
William
A.
James B. Powell, Harris, Upham & Co., San Francisco; D. Reynolds, Walkers Manual, San Francisco;
Frank M. Whitney, Whitney Investment Company, Salt Lake City, Utah; R. Whitney,
Whitney Investment Company, Salt Lake City, Utah
John
&
Company, Los
Angeles;
Company, San Francisco;
Company, Los Angeles
Kenneth
Omber,
Inman, Francis I. du Pont & Co.,
Revel Miller & Co., Los Angeles;
Revel Miller
Lippman, Jr., Holton, Hull <£ Co., Los Angeles; James Brum, Shearson, Hammill
Angeles; Del Bakerink, Paine, Webber, Jackson <& Curtis, Los Angeles;
Clinton Perkins, Crowell, Weedon & Co., Los Angeles
&
&
Fresno; A. Shane McA. William McCready,
Co., Los Angeles
Co.,
Richard
Los
Walter
Schag, Davis, Skaggs & Co., San Francisco, Calif.;
J. Spuller, Jr, Elworthy & Co., San Francisco
Louis
Lynch,
Pierce,
A.
Fenner
&
Morrill,
Francis
I.
Walston
&
duPont
&
Co., San Francisco; Jackson Palmer,
Co., San Francisco; C. Sheedy,
& Co., Los Angeles
Lestef, Ryons
E. Owen, Crowell, Weedon & Co., Los Angeles; Robert F. Bates,
Los
Angeles; Paul Modrell, Blyth <fi Co., Inc., Los
C'aude,
George G. Kammerer, J. S. Strauss & Co., San Francisco; J. B.
McMahon, Merrill Lynch, Pierce, Fenner & Beane, San Francisco;
H. E. Beebe, J. S. Strauss & Co., San Francisco; Frank J. Ward,
Merrill
Clifton
Beane,
Los
Angeles
Crowell,
John
Weedon
&
Co.,
Los
Marache Dofflemyre & Co.,
Angeles;
Angeles
J. Keenan, Morgan & Co., Los Angeles; Emmet K. Whitaker,
Davis, Skaggs & Co., San Francisco; Hubert J. Quinn,
Hooker & Fay, San Frant>SC0
i
36
The Commercial and Financial Chronicle
(2560)
Attended by Coast
...
» I-,
■ i(ii
wwA"1..**™ I
Thursday, June 10, 1954
Traders and Out of Town Guests
liil
MM
A.
Leh,
Boston Corporation, San Francisco, Calif.; James A. Reeves, Akin-Lambert Co.,
Angeles; Sidney Knoblock, Crowell, Weeden & Co., Los Angeles; Thomas W. Borden,
Weeden & Co., San Francisco
First
Los
Roy
Inc.
C. Warnes, Shearson, Hammill & Co., Los Angeles; John E. Wheeler, Hill, Richards & Co.,
Los Angeles; Sam Green, Pledger & Company, Inc., Los Angeles;
B.
Bourne, General American & Canadian Securities, San Francisco
#r"«W
Charles
L.
C.
Ebner, Bateman, Eichler & Co., Los Angeles; William
Faulkner, Wulff, Hansen & Co~ San Francisco;
Ackridge, Harris, Upham & Co., San Francisco
William
William
Alan
D. Brassington,
Farmers & Merchants National Bank, Los
Angeles;- J. Foster
Paisley,
Weeden & Co., Los
Angeles;
James
Fraser, Stern, Frank, Meyer & Fox, Los Angeles
Dorroh, Shearson, Hammiil & Co., Los Angeles; T. North, Walkers Manual, San Francisco;
O. Stendal, Crowell, Weedon & Co., Los Angeles Kenneth J. Barsmian,
Dempsey-Tegeler & Co., Los Angeles
,
Clemens
Lucker, Hill Richards & Co., Los Angeles; William Bailey,
Wilson, Johnson & Higgins, San Francisco; George F. Carson,
Reynolds <fi Co., San Francisco
Richard Abrahamson
on,
Gorey, Walter C,
.
Weeden
John
T.
Weller, Wagenseller & Durst, Inc., Los Angeles;
Larzelere, William R. Staats & Co., San Jose;
Pat
Joseph
Sheedy, Fairman & Co., Los Angeles
Richard Payne, Walter C. Corey Co., San Francisco; James F. Jacques, First Southwest Company,
Dallas; Elmer Weir, J. Barth & Co., San Francisco; D. Garroway, Francis I. du Pont & Co., Los Angeles
&
Co.,
San
Francisco;
Walter
Gore^ £
Co.,^San^
Francisco;
Frank L. Moran,
Co., San
Francisco
C.
James O. Jordan, III, Hill Richards & Co'., San Francisco; Conrad
O. Shaf>t, Shafft,
& Cahn,
Brush, Snook
Slocumb
& Co.,San Francisco; Ernest E. Blum,
In^., San Francisco
Volume 179
Number 5332
.
.
.
The Commercial and Financial Chronicle
(2561)
The
Some Optimistic Words
of
Regarding Modern Youth
.
•
By ROGER W. BABSON
Mr. Babson, commenting on pessimistic side
/
of the "modern
youth" problem, sees some good points in present day high
school graduates. Holds one of best tests which an employ¬
ment
manager
can
use
on
applicants
is
their
record
of
my
wish
the
brains than many of the textbooks
to tell
me
optimistic which I studied.
side
the
oi
Automobiles
story. There is
I
much newspa¬
the
talk about
delinquen-
cy
of ju
per
-
am
with
scared
one
of
my
when
Yet, he
me.
accident.
The auto¬
generation
which
to
to
be
developed
alert,
by
:
bes^we have°ever hacTan
.
.,
d1ovJL
.J
,.
.
mav
^s^
f
we
DiaL'
well
.
once
as
auick>
In fact
couW
0f the best tests which
one
employapplibe to ask for the ap¬
riding
ment
manager
grandchildren,
cants
may
can
an
use
on
formation
of Standard
With H. A. Riecke Co.
Pa.
H.
—
A.
40
the-counter
Philadelphia-Baltimore
funds has been announced
Exchange,
Stock
the
announce
associa¬
tion with them of Joan K. Fisher
and
Jay
F. Fisher as registered
representatives in their Doyles-
town, Pa. office,
Street.
110 North Main
/,
-
.
ALLENTOWN, Pa. — Reynolds
Co., members of the New York
Exchange, announce that
Charles F. Harrison has been ap¬
pointed resident
manager
office
Allentown
-
the
Americus Hotel Building.
have been active in the Street for
many years.
Douglas Casey, President of
the A. C. Allyn & Company, In¬
corporated and a member of the
National Can Corporation Board
of
Directors,
was
elected
Committee.
v e-
college
Casting wheel at the Raritan Copper Works houses
and
12 water-cooled molds made of copper, used
stand¬
casting
ards.
Of
;*'•"?
*
o
\a/
u
n
w. Babson
t h
copper
cakes
up
for
to 3,000 pounds.
course,
destruc-
e
tion ;0f schoo,
'
or
property should
any
'•the
severest
criticism;
be
given
but
some
;feel these
1
.
ural reaction from the moral
'down that
lei- *
always has accompanied
*
periods
of
great
So
wars.
has been written
by me
*
the pessimistic
side
much
regarding;
of
the "mod¬
ern
youth" problem that I really
should pass along some optimistic
words, especially
at
now
gradua¬
tion time.
>
Hours
and
Wages
Stores
-
are having some trouble
stealing by employees; but
from
this, has
been
due
partly to the
stores' carelessness. When it comes
;tp
>the
industry, initiative and
loyalty of the honest ones, I must
high-school gradu¬
admit that the
ates
today
'traits to
may possess some
good
greater extent than any
previous generation. Modern youth
a
wish
•may
but
■
to
with
work
fewer
hours;:
calculating
telephones,
^machines and
dictaphones,' they "
more inka 40-
^may accomplish
"hour week than I did when work¬
ing 50 hours
t
five .times
Now
kof
week. They claim
per
priuch!
as
to
as
On
wages;
the wall
store adjoining my Wellesley
is a tin
sigh dated 1904
a
office
reading: "The Boston Herald, Price
One
Cent."
newspapers
One of the leading
of New England, "The
Boston Herald"
cents. We
the
at
now
youth" ask'; but
than
more
paid
c
h
What Is
COPPER CAKES HAVE PUT ON WEIGHT
times
o o
1
Bigger CAKES
wages
what
we
graduates
is
the
for longer COILS
science
of
.
life.
Recently,
Doctor
Barnum Brown, Curator Emeritus
of the American Museum
ural History,
ogist, told
than
abler
is
The
its
more
tions.
This
one
is
of
which
predeces¬
than offset
our
due
to
many
which
is
the
fruits
more
matics.
When
teacher
that
I
these
subjects,
reply,
'These
day,
from 1,800 to 3,000
the
pounds
are
regularly produced
casting wheel illustrated above.
means
that The American Brass
Company,
an
Anaconda
fabricating subsidiary, is able
its
customers
with
larger and heavier
to
supply
copper
plates; also with longer unjointed coils of
strip
users to
diet
I
would
would
This
has—more
and
the
never
use
very
thin
new
—
taught
to
help
develop your brain." Yet, to¬
psychologists tell me that
driving automobiles through traf¬
does far more to develop the
brains of modern youth than did
fic
These
their machines
more
with fewer interruptions.
casting plant, the largest of its
Another 2,000 kw
to
the
provide
power
more
diesel-generator set has been added
program to meet
industry's
requirements for
copper
exacting
evermore
and
copper
alloy products.
plant of the Raritan Copper Works to
current for its electrolytic
copper
refinery.
The American Brass
the teacher would
are
gages.
kind, is another example of Anaconda's continuing
vege¬
tell
in
operate
economically
factors—
better
copper
longer coils, in demand by industry, enable
objec¬
tables, and especially a greater
variety of food.
,
When I attended high school, I
despised such subjects as Latin,
Greek and certain higher mathe¬
you
But
improvement, he
each generation
protein,
subsidiary of Anaconda.
new
which
claims,
a
now, with the recent completion of a new casting
plant, parallel-sided copper cakes ranging in weight
prove
generation may do
things which we oldsters do not
like; but it has other qualities
sor.
Copper Works of International Smelting
Refining Company,
This
of Nat¬
normal gener¬
every
the Raritan
and
on
leading paleontol¬
that the facts
me
conclusively
ation
a
at
Heretofore, the maximum weight was 840 pounds.
50
Paleontology?
Paleontology
ancient
these
are
five
high-s
ago?
years
sells for five
employers are disturbed
wages
which
"modern
Company
Anaconda Wire & Cable
AnacondA
Andes
Chile
Company
Copper Mining Company
Copper Company
Greene Cananea
Copper Company
Anaconda Aluminum
COPPER MINING COMPANY
Anaconda Sales
International
a
mem¬
ber of the National Can Executive
care-
.'school
^
Mr.
"lesshess of
youth, and the*
lowering
of
by Jed
Hamburg and Melvfn
Cantor, Secretary and Treasurer,
the
of
in
Hamburg, President.
Both
J.
Stock
firm's
mutual
and
Casey Elected
New Branch Manager
&
L.
stocks
A
nil.es, the
In¬
Corporation with offices
Exchange Place, New York
City, to transact a general invest¬
ing business specializing in overat
Riecke & Co., Inc., members of the
in
ters who cannot
visualize
The
DOYLESTOWN,
Pm-
them
Standard Inv. Corp. Opens
vesting
oppor-
WJ
pprhar)e
It may tell
high-school marks!
I
than
do not know.
belonged. t J
I
Furthermore, instead of urging
youth to drive slower, we should
perhaps be content to urge "care¬
ful driving." The best brains are
ly'es
Teachers
as
stiff
more
an
Therefore, I should say that 1954
graduatesr—who avoid liquor and
recent
a
plicant's auto record.
astonishes
careful driving.
young friends feel any of those' high-school subjects
pessimistic column which were taught us. In fact, it
,of mine will handicap them in get- may be that automobiles are today
.ting a good position. Hence they doing more to sharpen high-school
Some of
that
he drives "in and out"
has
mobile may make the present generation superior to the pre-auto
said
automobile driving.
1
way
traffic
never
37
Company
Company
Smelting and Refining Company
38
(2562)
The Commercial and Financial Chronicle
Continued
from
Should
3
page
the
Quarter-Century Forecast oi
Electric Power in U. S.
surveys
that
But
and minimum
lim¬
atomic
load forecasts.
have
of this discus¬
would
than specific peak
the
sion,
have
we
last
of
purpose
the
that the
assumed
of, the fi^st
quarter
century
look
us
first
at
Figure
depicting the peak loads that have
occurred since
statistics.'
EEI
this
of
1920
shown
as
by
In the earlier years
period,
load
growth
million
1953
kilowatts
double
that
pertain
to
of
entire
the
plying
than
regular
The
in
sup¬
by
Power
Survey
mates
that
the
tween
157
and
This
watts.
load
of
mately
Committee
something
dicted
which
shown
as
times
many
load
the
25
next
Our
pre¬
the
fa¬
least
peak
1975
the
load
estimated
growth
shown
as
the
rate
seem
aware
of
the
to
our
of
minimum
from
1955
to
5.4%,
pounded annually, while the
in
max¬
the
have
rate of 6.8%.
These values may
be, compared with the 7.8% an¬
nual growth for the
past 115 years.
power
Of
course
what
in
creases
cur
to
new
loads
and
existing loads will
bring
advance
do not know pre¬
we
in
about
power
this
in¬
oc¬
large
requirements.
importance
national
lack
a
The
power
had
been
of
methods
because
we
of
of
the
of the
devices.
Obviously,
not
been the only fac¬
advance
it
literally
consuming
of
certainly
our
has
key factors.
varied
of
in
adequate
an
indus¬
our
emergency,
demonstrated
World
War
II
d
u r
the
and
i
as
n
g
Korean
The margins of generat¬
capacity
Electric
Its
-
-
(December 31, 1953)
Debt
•
-
$30 Million
Common Shareholders'
Equity
.
-
$32 Million
wholly-owned subsidiary
which
the
power
,
#
.
9
t
periods
adequate
were
permit the prompt and steady
and
military produc¬
our
thus
maintain the
to
establish
was
necessary
additional
capacity
to
meet
generating
defense
and
other power requirements in
many
but
areas,
available
when
the
capacity
hostilities
began
did meet the needs of the interim
with
a
Julius A. Krug, Director of the
Office
of
War
Chairman
Utilities
of the
War
later
and
Production
Board, rightly stated, "Power
too little
World
effort
War
II.
factors
in
but
not
but
serves
123,000
customers in 55 cities and towns in four
western
counties of Massachusetts
•
•
had $77 million of Plant
(1953)
had $22 million Gross
Revenue (1953)
OFFICES
in
Springfield, PittsReld, Greenfield, Turners
Falls, Boston
others
were
defense
our
supply.
power
during
likely to
the
sat¬
isfactory except in comparatively
areas
riod
during
when
short
one
hydraulic
pe¬
conditions
far below normal.
were
Our
country's
strength,
national
our
standard
national
industrial
of
security
in
economy,
living,
and
our
have
large
been
measure,
through the ability of the electric
industry
power
ly.
to
meet
that
in certain
occur
Our
future
ply of
larely
the
shock
depends
certainly
to
much
as
cilities
serve
these
so
will
expanding
require¬
items
dling,
transmission lines,
tions,
distribution
including
and
fuel
In
the
this
between the maximum
isted
for
as
the
50
90
to
If
to
or
the
we
a
maximum
analyze
of
outbreak
flict,
there
greatly
minimum
are
estimates
for
new
for
the
was
the
for
need
GENERATING
of
the
two
three
thus
and
years
addi-
equipment, this capacity can be
fully effective oniy. when orders
for equipment are placed
far
enough in advance to permit un!
CAPACITY
j
ADDITIONS
I
1950-1953
Hydro
Capacity
Capacity
Millions of Kw.
4.8
Millions of Kw.
1.0
5.8
1.2
6.9
4.9
1.6
6.5
8.7
1.5
24.1
5.3
7
\
i
,
Capacity
Millions of Ivw.
5.7
»
>
Total
,
10.2
j
29.4
'
'
-
'
j
TABLE II
SCHEDULED PROGRAM
1954
,
"
and
Later
i
Thermal
Hydro
Capacity
Total
Capacity
Millions of Kw.
Millions of Kw.
12.6
1.3
13.9
10.0
1.6
11.6
5.5
0.7
6.2
2.0
0.4
2.4
30.1
4.0
34.1
TABLE
REQUIRED
i
Capacity
Millions of Kw.
L
t
j
/.
.,,
'
V
J
'
*
j
!
III
CAPACITY ADDITIONS
j
(Millions of Kilowatts)
{
Required Capability
Average Yearly
Addition
Minimum
33.1
____
Maximum
Minimum
43.5
i
;
Addition
Maximum
6.6
42.0
61.2
8.4
53.0
84.9
10.6
1970-1975
67.0
119.5
'
;
8.7
j
12.2
„
13.4
,
17.0
23.9
j
,
j
TABLE IV
|
HYDRO
|
Percent of Total
Million Kw.
ex¬
Installed 1950-53
Scheduled 1954-57
,
size
tions in other years.
While our
heavy power equipment manufacturers have a very large capacity
for the production of power plant
1965-197Q
i
the
above-average
1960-1965
1
of
requirements
average
or
necessitate
Thermal
5-Year Period
,
plant
power
TABLE I
ESTIMATED
1955-1960
eon-
amounts
out
programs
orospect, there is the possibility
capacity additions may fall
below
this
Korean
out such programs,
carry
that
for
Total Scheduled
that
forecast
schedule
The
expansion
in
1975.
the
increased
capability
are
1954
carrying
Thermal
and
This should
year.
1965-1975 indicate high an-
sible to
comprehend
projected
expansion
requirement
further,
however, and compare it with the
industry's accomplishments since
1950, the problems become somewhat
commonplace.
Following
Power
have
the
capacity.
million
of 423 mil-
301
fa¬
1954 through 1957
by the Power Survey
shown by Figure 3.
years
revealed
Reports
1948
and
serious
margin."
since
as
of
difference
The conditions which
a
an
overly difficult problem
in view of 1953 accomplishments
kilowatts in
lion kilowatts by
of the interconnected
systems and
the peak load has been termed
"gross
for
not be
by
a
equipment outages. (2) Leeway to
permit system control. (3) Un¬
loads.
perhaps
the indicated need for
systems must have not only
generating
capacity
to
carry the peak loads, but also a
margin of capacity to provide for:
(1)
Scheduled and unscheduled
Reports,
somewhere between 7 and 12 mil-
lion kilowatts
years
optimistic
enough
Survey
III
gives the estimated
capacity
requirements
by
five-year periods. Up to 1965, the
capacity additions should average
It may be difficult for even the
most
power
foreseen
Table
new
the
kilowatts
reason
additional
han¬
industry
doubt that these programs can be
carried out substantially as now
planned.
kilowatts.
recognized from the
the
to
lion kilowatts. With adequate advance planning, it should be
pos-
by
substa¬
other
capability of 11.6 million
kilowatts in 1955. There is little
pre-
of
132 units
a
nual capacity additions, averaging
from about 11 to nearly 24 mil-
the
power
other
loads
Total 1950-1953
ample to
for service in 1954, and
gen-
1957, and
1965 it will have to be raised
Our first thought, quite
naturally, concerns generating
capacity, but there are a host of
of
areas
127 million
sup¬
be
Table
ex-
with
and
were brought
1954
years
:
milion
capacity of
a
The present expansion program
will
bring the capability up to
ments.
beginning
in
possibility
218
milhon
ydro umts; Wlth
int0 service.
country-wide generat-
1965,
gives
thought.
heavily
with
do
the
a
when
a capacity
kilowatts, and 54
and 1955, shown
by
II, is also impressive—191
generating units with a capability
of 13.9 million kilowatts scheduled
occur
peak
kilowatts
its responsibility.
has
of
ye^F w^s,
1-5 million kilowatts
ing capability of at least 181 million
Engineering Considerations
ahead
,
dieted,
these
capability
values
may
not be too surprising, but
Our next consideration in look¬
ing
,
kilowatts,
a
than
more
2err^?A uniJs with
8*'
?
of
the peak load forecasts, the required capability can be estimated
as shown by Figure 4.
Now that
you have perhaps recovered from
econ¬
been
^
,
capability of
The expansion program for the
hydro
on
units
with
this
conditions
dependent
eration.
industry, in looking to the future,
must plan and proceed
courage¬
ously to fulfill
119955470362
will
serv-
generating
,
0
of
yet
hydraulic'units
miUion
i
and
in
the power sys-
years,
thermai
159
cornbined
29
1953
because
likelihood
with
and
little
new
com-
actually brought into
473
and
in the event of ad-
hydro
verse
The electric power
power.
is
cept perhaps
power
continuing adequate
a
areas
the
through
indeed
shortages,
four
tems
to represent de-
appears
curtailment
adequately and economical¬
upon
those
ice
1950
years
difficult
material
country.
Fifteen
per
cent
margin for the country as
whole
a
the
equally
was
The
were
that if the gross margin for the
country as a whole falls below
10%,
moderate
curtailment
is
gross
ac-
best be illustrated
which shows the new
sho\ys
much
require
expan-
capacity now scheduled for
pletion in 1954 and later,
for
or
power
vast
a
What has been
can
by Table I
Power Surrey Committee indicate
an
in
period
was
late," dur¬
There
situation
power
Korean
too
or
one
electric
installed in the years 1950
through
1953.
Table
II
The studies of the Electric
more.
the
undertook
generating capacity that has been
Commit-
gross margin as low as 5%
less
or
and
sion program.
systems can be deterSome systems can operate
need for
period.
small
17.5%
Applying this value of 15%
Naturally, it
build
and
required defense ef¬
It has been
•
any
there
The
systems
power
t
WESTERN MASSACHUSETTS ELECTRIC COMPANY
for
margin
conditions
and
power
There is
foi mula by which the
optimum
no
gross
cilities.
.
Survey
sirable
to
gross
mini-
and the Korean conflict.
electric power industry must con¬
tinue to expand its
physical fa¬
Consolidated Capital Structure
Power
margin
those
fort.
a
to
complished
of
tion,
from
1948
systems had built up prior to both
to
the
years,
in
1953.
engineering matters involved. The
Western Massachusetts
Companies
6.6%
The matter of gross
margin has
been
studied
at
length by the
mined.
importance during
national
conflict.
supply of
power
power
maladjust¬
gives
power
greatest
needs
adequate
and
but
omy,
here
regardless of
particularly hurtful.
achieved,
fortunate
relatively low cost. We
power has
in
re¬
living
comparatively high.
strength which
clearly
power
living
six
has
all
times
be available at
States
an
at
of
use.
United
thousands
one
of
econ¬
maintaining of
have been able to utilize
tor
are
permit its practically
have
imum peak load growth is at the
cisely
We
low
trial system and national
economy
our
which
We
com¬
meet
country
our
past.
standard
unrestricted
by Figure 2, is at
only
what
quires that
costs
looking
to
where
economic
are
supply of
ing
and fully realize the signifi¬
high
our
large
of
the
electricity
omy,
kilowatts.
in
prepared
find
available,
areas
occur,
The
ing
last
ganizations, during World War II
ments
never
Considerations
in
mean.
Indeed,
foundations
for looking ahead
needs
of
may
and
assume,
will
we
power.
the
of
the
margin
tee, the Federal Power Commission, and other governmental or-
costs,
is
In
Also, in those
where periodic shortages of
power
which the
years.
be
cance
million
these
past
consider,
can
thought
to
have
we
all
262
is
power
as
industry.
at
first
ahead
would
'367
have
by Figure 2 point
us
high
as
We
.
best
National
years,
by those
be
to
million kilowatts, and possibly as
Although
i
will
available
peak
For 1975 it is estimated that the
peak
industry
in
cir¬
generally have
inadequate
areas
the
mum
areas
is
are
expansion of
pre¬
They
industry must
the
to
kilo¬
been
miliar with the power
been
the
the responsibilities
provide
approxi¬
twelve
has
in
power
those
limiting
be
in
have
systems.
be¬
be
that the
will
doubled
esti¬
million
190
means
1953
will
peak
easily bring
can
their best judgment concern¬
power
Electric
the
improved
therefore, that the peak load fore¬
ex¬
somewhat
seem
and
responsibility is that
ing the future.
out
1965
ekpected pop¬
our
men
pected for future years, shown by
For
when
their experience of the
and
power surveys.
Figure 2, at first
which
uses
growth
power
used
casts
startling.
the
heat¬
space
looking ahead for their individ¬
ual
use
are
industries,
other
of
approximately
loads which
peak
metal
very
the
ing,
and
tremen¬
power
industry, in
whose daily
the industry represented
of
in the
the
to
and
years
in
of
chemical
pared
data
public
for
power
rather
steel
the
requiring
These forecasts
electric
engaged
amounts
than
more
These
•
large
cost
similar
about the peak loads indicated.
load—81.6
is
—
1945.
industry
power
97%
peak
in
foresee
can
living standards
mid-thirties the increase has been
The
We
advances
largest
our
developments
occur
dous
ulation
comparatively small, but since the
rapid.
to
a
energy
Other
consuming
combined with
was
of
consumers.
ahead.
I,
atomic
one
as
could
one
no
that
be
now
likely
are
'
Let
forecast
power
United States is from 1950 through
1975.
project,
in
Undeveloped
first began
we
elsewhere
examine
closely,
that
standards
development
energy
.power
.
industry in the
power
1942, when
military
peak load were given, rather
For
in
with the exception
the maximum
its of
and
cumstances
A
look
we
world
Thursday, June 10, 1954
..
.
—.
,
•
:
v.;
-•
Capacity
Hydro
J
Total
Million Kw.
24.1
5.3
29.4
30.1
4.0
34.1
v
t
Hydro
Million Kw.
L.i.>
% of Total
'
.
13.0
,
; V,
.
11.7
'j
*
*
yolurite 179
Number 5332
•
..'
interrupted
.
.
^
■
If
oper¬
ations.
The
production of large steam
Figure 5,
kilowatts in
1953
12 milion
With
orders
tions
should
kilowatts
Similarly,
as
for
hour.
actual
The
duce
at
their
a
pro¬
high rate during
1954,
current
orders
units
for
a
small part of their present pro¬
ductive
They
capacity.
now
are
occurred
will
in
constitute
This is because
practically all the economic hydro
sites have been developed in areas
reasonably close to the heavy
population centers, and particu¬
larly in the eastern part of the
country.
This is illustrated in part by the
,
fact
hydro
18%
in
that
units
of
the
the
have
new
last
four
years
accounted
for
generating
ca¬
beginning to reduce personnel and
pacity,
this
even
of Jan 1, 1954, the 114 hydro units
year.
definitely
reduction
more
become
will
extensive
this
later
the
total
FIGURE
as
shown by Table IV. As
scheduled
for
installa-
capacity
then
operation prior to
for
the end of 1957.
EEI
in
used
1945
the
the
statistics
which
Figure 7 show that since
gradually
trend
will
decreased.
continue
in
This
the
years
ahead.
million
kilowatts of atomic gen¬
eration
only
in
1975
would
If
extent for base loading,
this capacity in atomic fuel
plants
could generate less than 25% of
the total power needs.
The con¬
will
build
and
building
now
will
There is, of course, much con¬
jecture concerning the role atomic
energy will
have in our power
supply within the next 25 years.
Based
the
upon
technical
and
their
out
serve
The
the
We
continually
are
about
the
atomic
direct
other
it is almost certain that
make
obsolete
large atomic
will
be
built
power
within
sev¬
ception of the
next
ergy
10
and it will not be surpris¬
if their total capacity is one
years,
ing
or
two
even
kilowatts
or
This, however, will be only
small part of the 180-220
more.
a
million
very
million
kilowatts
of
is
of capacity
required to
needs in 1965.
foreseen
the power
as
a
our
present
con¬
of atomic
use
of
source
heat.
tium
battery,
a
of
which
only
has
features,
and
en¬
best
at
their
problems
century
limited
to
additional
the
are
installa¬
generating
of
FOWES SYSTEMS
watt.
similar prob¬
today, in part, by resorting
transmission voltages.
is likely that 400,0C0-volt Jines
lems
Obviously
do not know what
we
the future may bring
to
It
in the mat¬
will
ter of scientific advancements but
scientists
tell
us
that
higher
be
reasonably
common
Continued
"direct-
no
on
a
FIGURE
VI
FIGURE
VII
page
eco¬
justification probably will
marginal.
It
seems
likely,
be
therefore,
will
time
first
re¬
permit testing
atomic
reactors
will be widely accepted for power
use.
A considerable
number of
additional
should
atomic
power
into
service
come
plants
in
the
1965-1975, but it is not possi¬
years
II
these
to
before
opment
FIGURE
considerable
after
built
are
evaluation and further devel¬
and
*«ra« i«4o mm u%
that
elapse
actors
ble at this time to make any fore¬
cast
the
concerning
ity which
is
may
total
capac¬
be involved.
If it
assumed, for example, that one-
third of the
new
capacity required
period 1965-1975 will
atomic fuels, then we might
during the
use
have
watts
1975.
at
from
of
65
to
million
power
time,
when
Hydro
is
voted
III
to
the
development,
about
bring
startling results.
ever,
On
may
other
the
;
j?am»rc-#g
how¬
rather
40
to
'x
mmimm.
.
^
,
r\r
»
''*<&<
ts^m
.4:igaps<l
i':;xj
•
<••:•
,;y
-: ^
%-i-?
4*"
Wv'M;:i;>••
hand,
k
not
atomic
plant, and there is so much ques¬
tion concerning the ultimate eco¬
nomics.
The
very
great world¬
wide interest and effort being de¬
FIGURE
A Percentage of Total .Capacity
as
visualize
there
commercial
one
kilo¬
plants by
is difficult to
That
this
even
40
atomic
./
a
:V;■
■
?:■• ms
•*
«
*•
> "
^ «'
* -
'*''*
:^'V:; :A
65
(J
r*
;W r i;■ •:;: ■::;••
::
=:--
^N-':": :.#
tw£ 10m {SMWUTY AND gross katm-H
■;/
:
•
JOHNSTOWN
Yea after fear
1
•
m0Xi W*
*4J>
:■ :
W&TZ"?.
„
'«i,
'
PlATTEVIllE
'
;?*f Tr '"3K
SSf ■':% ,
t|
•
KEENESBURG
11
IN A RAPIDLY
FIGURE
IV
GOLDEN •
EXPANDING,
•
•
STABLE
ENGLEWOOD
LITTLETON
AREA
RECORD
THE
Cross Income
Gross
Year
V
Before
Kilowatt Hour
Depreciation
Customers
Served
Sales
and Income Taxes
Revenue
*1953
FIGURE
108,512,000
22,832:
$2,842,257
$985,526
1952
2,472,534
889,117
95,032,000
21,427
1951
2,177,446
682,425
82,235,000
1950
1,862,459
562,018
67,193,000
20,138
18,640
17,002
1949
1,641,764
497,363
57,847,000
1948
1,421,286
369,895
48,966,000
15,749
1947
1,233,828
303,584
41,674,000
14,286
1946
*1850
the
and
of
512
water
Evergreen
customers
Public
12,427
34,775,000
238,078
1,046,834
electric
purchase
added
were
Service
April
15,
1954,
wDh
Co.
Colorado Central Power Co.
"The
3470 SO. BROADWAY
ca¬
adequately high
nomic
'
of
by
standards is costly.
We are meeting
of
as
incorpate
of
struction
ca¬
a
quarter
the, matter of transmission and
distribution, particularly in the
heavier populated areas. Even to¬
day, difficulty is encountered in
obtaining rights-of-way for over¬
head lines, and underground con¬
One
one-millionth
an
in¬
in
recent announcement is the stron¬
pacity
t,o
The greatly increased use
of power will present a
challenge
of
may
be
power
pacity.
and
which
devices
reactors
the
conversion
is
energy
engineering
next
means
tion
hearing
electricty,
to
energy
about
eral
economic
life.
engineering information available
now,
mormal
atomic
Other Engineering Facloms
hy¬
in the future
up
promise
dustry within the next 25 years,,
it will be
primarily through the
use
of the heat released by nu¬
clear fission, or
possibly fusion.
possible
fuel-burning
real
any
important factor in the
for the interconnected
power sys¬
tems.
If used to the maximum
ventional
holds
now
3»
for the foreseeable future.
no
These reactors will
sL mmMrnaw
to
small part of the expected
total capability of 301-423
million
kilowatts which wil be
required
and
Energy
conversion" device discovered
be
a
draulic plants we are
Atomic
still
great many new and complicated
PEAK LOAD
u.
been
interconnected power systems
has
meet
'
have
the hydro-/electric portion of
total generating
capacity of
which
I
new
scheduled
same
quarter century.
to
be shipped after 1954 occupy only
units
tion, with a capacity of 4 pillion
kilowatts, amounted to 11.7% of
capacity to be instaled in the next
pro¬
to
the
create
upwards of 90% of the generating
of steam
per hour annually.
1
While the steam generator man¬
continue
can
It is almost certain that thermal
about 115 million pounds
will
han¬
The situation in the tur¬
generating
duction in 1952 and 1953 averaged
ufacturers
to
generatqr manufacturing
shops is also pressing.
by Figure 6, the full
manufacturing capacity is now es¬
timated as 145 million pounds of
per
This
1950-52.
shown
steam
opera¬
bine
generators,
steam
it will
manufacturing
situation which
tense
1954.
in
sufficiently
placed
in advance, the production could
be as much as 14 million kilowatts.
continues,
the level needed
to
ments.
ex¬
(<£000)
the power industry's require¬
dle
11
and
process
__,
'
-W
long time to restore steam
a
generator
shown by
million
as
nearly
was
.
,
this
take
turbine-generators,
ceed
-
■..-*
•
manufacturing
"
The Commercial and Financial Chronicle
.
'
Friendly People"
ENGLEW00D, COLO.
40
}
The Commercial and Financial Chronicle
(2564)
40
Continued
from
The sale of securities is depend¬
39
page
ent
A
changes
systems
now
limited to 60,000 and 150,000
volts
many i
transmission
will adopt higher voltages to sup¬
plement their present facilities.
This type of transmission line
expansion permits great economy
in
that the
newer
high-voltage
lines provide the main transmis¬
sion circuits while the existing
lines become in effect the second¬
than
now
the
and
possibility
volt service
small
and
few
a
satisfactory financial
matter
quire
the
of top management.
The matter of finances
effort to keep
requirements.
ahead of the power
next
Organization
Business
and
Matters
industry and
the engineering problems of the
next 25 years have been discussed
first because they are predictable
and in many ways point out the
tasks that must be accpmplished.
There are
many
other matters,
however,
which
may
be
even
perplexing and difficult to
more
and the
increases,
population becomes
dependent
must
of power
use
it,
on
power
more
systems
increased respon¬
assume an
ment
plant
power
$2.6
billion
sale
of
in
1952
ly
the
look
to
at
the
into
will
business
future
it
fully
is
ex¬
growth to continue
With
the
industry
power
have
to
and
more
a
of
use
being.
The
industry must
power
was
ity by continuing to develop new
and
and
improved equipment and op¬
erating practices.
It must con¬
tinue to
meet peacetime
power
requirements
maintain sufficient
in
used
the
addition,
in
and,
be
to
reserves
national
of
event
emergency.
(3) From the estimates of logd
growth presented, the industry
will
built,
investment will be
are
need
to
install from 7
of
kilowatts
million
ating capacity each
greater.
and
now
is at
now
the
the
was
gener¬
between
This
1965.
1953 and is
achieved in
After 1965
requirement for new capacity
increases may
be
as
11 to 24 million kilowatts
These programs can be
as
year.
achieved only if
well in advance.
GROWTH...
year
of
expected for 1954.
high
a
new
they
are
(4) Atomic power technology is
progressing rapidly and a few
Keystone of Progress
A long period of develop¬
ahead, however, before
years.
lies
ment
the
engineering
problems a n d
economic justification of atomic
units can be brought into focus.
The
Company's service area — principally in the
Puget Sound region of western Washington — is one
of the fastest
growing and most promising economic
sections of the United States.
After
this
The
population growth
in the area has been
impressive. During the ten years
ended 1950, the population of the
eight principal
counties
served—excluding the cities of Seattle and
Tacoma
—
increased 61.2%—as
of
a
of
power
years
energy
supply
the use of
for a part
become
may
unusual
directed in
a
of
problems for the electric
industry.
power
should
take
avoid
a
The
leading
unrealistic
and
industry
part
to
wasteful
results.
The
territory
served
sified.
The
basic
served
economic
activities
in
the
Conclusion
territory
are:
lumbering, diversified farming, fruit
growing, dairying, manufacturing, commercial fish¬
ing, shipping, and those connected with all branches
of national defense.
Major industries include the
building of airplanes, ships, freight cars, trucks and
logging equipment, the manufacture of pulp, paper,
and
other
The achievements of the electric
75
of
eries
gas,
now
in progress,
building of two large oil refin¬
and the introduction of natural
will further stimulate and
diversify industrial
were
the
brought about by
responsibility of providing
ice which contributes
to
our
continually
standard of
1
ter
of
great
living.
the
first
promise
vancements.
of
The
a serv¬
importantly
improving
The last
century
PUGET
AND
SOUND
POWER
ahead
and
a
an
electric
unrivaled
ad¬
power
years
opportunity
a
FRANK
quarters of
challenge.
a
this
Re¬
System,
the
Federal
Reserve
the
mittee and the
12
chise tax (or
Banks.
ernment's
Wright
"The
a
bad
very
precedent has been set by
per¬
mitting the Federal Reserve Sys¬
tem
to
operate
independently
and from
government
gov¬
the
Reserve
System
Dec. 23, 1953.
During these 40 years, the Bureau
of
Engraving and Printing has
old,
years
prepared
distributed
and
Federal
Reserve
to
System
the
about
$140
billion
the government to the extent that
notes
Congress
(printed money). About $30
billion
has
had
not
an
oppor¬
tunity to become acquainted with
its activities and the way its
funds,
which are public funds, are ex¬
pended.
To
involves
a
mind, this matter
fundamental principle
my
of government.
the
"If
tem
tinue
lose
to
Sys¬
to
continued
same
when
other
titled
permitted
has
the
to
and
the
Reserve
other agencies
many
titled
if
be
it
as
past,
con¬
in
the
are
en¬
privileges; and
they
are
agencies
granted
equally
to
en¬
them, the Congress will
effective
e r n m e n
t
control
and
the
of
gov-
particularly
its
pursestrings.
"The
the people and is in
daily cir¬
culation, except some of it that is
of
hoarded
Article
I,
print
the
Constitution,
Court
has
held
that
to
coin
money;
is
money
the
to
therefore, the power includes the
printing of money, including Fed¬
eral
as
Reserve
notes. ...Most
of
our
an
of
banking
agency
the
or
govern¬
ment, and it operates solely on the
government's credit through its
power to create money, which in¬
cludes
the
the
of
determine
to
power
volume
its
money,
value,
interest rates and is charged with
the duty of performing a public
service, not organized for profit.
"Contrary to reports, it is not
private
private
used by
operations.
its
central bank owned
the
by
and
member
not
are
in
tem
by the
Investments
the
of
in part
or
banks.
banks'
power * * *
money, regulate the value
thereof, * * *'). Under this pro¬
to coin
destroyed.
Reserve
instrumentality
reserves
Supreme
been
Federal
Congress shall have
of
has
or
"The
owned in whole
Constitution,
Reserve
these notes is still out¬
of
Section 8, Clause 2, provides: ('The
vision
Federal
system is set up
Federal
should
in
standing in the pockets and tills
the
Sys¬
It
is
a
and operated
government,
central
as
banks in all countries
are
so
con¬
ducted.
"Under
form
our
which
ment,
Democracy
govern¬
consider
I
in
of
is
a
Republic, it is
that the House of
a
money in use is in the form of
Federal
Reserve
notes
(paper
Representatives, which is close to
money).
the
in
pursuance
of
this provision of the Constitution,
has
delegated
the
power
over
money and credit to the Board of
Governors and the Open Market
Committee
serve
the
of
Federal
Re¬
System.
"The Board of Governors is here
Washington, D. C.
The
Open
Market Committee is operated in
the Federal Reserve Bank in New
York
City.
The
12
Federal
Re¬
banks in the 12 Federal Re¬
districts of the United States
the agencies used as vehicles
serve
contemplated
people—not
of
trol
the
"All
departments
ment,
including
and
those
and
the
secure
to
carry
out the
or¬
"The most important powers in
the
System are delegated by the
Congress to
the
Open
Market
Committee.
composed
of
the
It is this
of
the
Board
of
Committee,
seven
members
Governors
and
five Presidents of Federal Reserve
of
the
within
money
the
Executive
branches, must
in the form of ap¬
for
their
activities
every year.
"The
officials
the
of
System
the
the
Executive
government,
Federal
that
deny
it
admit
but
is
of
branch
it
is
an
agency of the Congress of the
United States — the Legislative
branch.
However,
the
System
having the power to create money,
without cost, and buy government
interest-bearing
securities
has
plenty of money of its own to pay
its
and
expenses,
years
of
its
during
existence
the
has
banks, who were selected by the
private banks, that conduct and
carry on the most important func¬
been forced to call upon
for an appropriation.
tions of the Federal Reserve Sys¬
not
tem.
the
"This Committee has the power
govern¬
Legislative
operations from the Congress
within
facilities
this
of
Judicial
propriations
and
are
of the Board of Governors
and the Open Market Committee.
pursestrings
nation.
Reserve
ders
its Mem¬
of
appointed, all elected by the
people every two years—has con¬
serve
or
one
bers
40
never
Congress
"The fact that the System does
need
appropriations deprives
Congress of the privilege of
being informed annually about
operations.
Not only has the
to trade
its
ernment
Congress been kept in the dark
during these 40 years about what
the System has been doing be¬
non-interest-bearing Fed¬
eral Reserve notes (printed
money) for interest-bearing gov¬
obligations.
It has
quired in this manner about
billion
of
such
securities.
ac¬
$25
This
cause it did not have to get
any
appropriation from Congress, the
System
est-bearing obligations among the
made
experience to meet
gov¬
of
use
Federal
40
was
"It is my belief that
interest) to the
the
credit.
Patman
Committee distributes these inter¬
chrHenge.
for
ernment
Patman:
the
paid,
which
$135 million,"
about
United States Treasury as a fran¬
Re¬
According to
Congressman
within
were
to
was distributed
10% to the surplus funds of
banks and
90%
to
the
about
Com¬
Federal
obliga¬
and the remainder
Open
Mark,et
of it from
government
System
amounted
century of the Elec¬
the necessary
Federal
on
tions
so
purchased — aggregated
$513 million. The expenses of the
And the first three-
trical Age has given our industry
bG
interest
the
serve
holds
deep responsibility. This is
LIGHT COMPANY
Mclaughlin, President
quar-
continued
industry has before it in the
activity.
past
ing together, and devoted to their
steel and iron
from Canada and the
years
during
the efforts of many people, work¬
wood
products, chemicals, light metals,
products, cement, and the processing
food products. The construction of an oil
pipeline
industry
power
System—practically all
the
of
ernors
in
(5) The ever-increasing re¬
quirements for power will place a
heavy burden on the management
and operation of power systems.
These organizations will have to
be expanded in order to meet in¬
creased responsibilities effectively
and efficiently.
by
Puget is compact and
choice. It has many
advantages which make its fu¬
ture rich with promise,
among which is the valuable
combination of salt water
transportation and abun¬
dant fresh water. Its
economy is dynamic and diver¬
,
audit
Board of Gov¬
steps which could have disturbing
for the entire United States.
Comp¬
troller General
to
banks keep these bonds
the Open Market Committee
buys for them with costless money
collect the interest
annually.
Last
year,
the earnings of the
"The Congress,
rational manner, should create no
compared with in¬
and
the
reality.
This development,
37% for the State of Washington as a
whole—33.9% for the Pacific Northwest1—and 14.5%
creases
perhaps 10
source
our
"The
sup-
measure, H.R.
7602, to direct
planned
large atomic power reactors may
come
into operation within five
concerning
the sale
purchase of U. S. Government
and
that
12
to
slightly lower average rate
a
meet load
to
end
Government Operations in
Committee
securities.
port of his
important responsibility for
accept and meet that responsibil¬
the Board of Governors of
mittee and the Federal Reserve Banks.
industrial and economic well-
our
support of his bill to direct
System, the Federal Open Market Com¬
Congressman Wright Patman
(D.-Texas) on June 2, presented a
serve
greater
the
come
more
than
the
whose
electricity,
for the
1956,
required
confident¬
can
undiminished rate.
an
(2)
slightly in
they inevitably
must increase again to keep pace
with
the
power
needs.
When
plants using atomic fuels rather
even
those
pect the load
Expendi¬
and equip¬
than conventional fuels
We
that
expect
but
decrease
may
and
the
by 1965, power
will be double that
present time. Beyond 1965,
the situation may not be as clear,
While the expenditures for new
plant
in
power
consumption
securities.
new
sum¬
at the
nearly
nearly
$2.9 billion in 1953. About 75%
of this has been financed by the
systems
be
may
of
use
rapidly.
crease
concern.
new
the Federal Reserve
on
United States will continue to in¬
by the investor-owned elec¬
tric
1955
solve.
As the
for
tures
The growth of the
States
The
(1)
quarter of a century will be
continual
of
United
Government Operations in
Comptroller General to audit
statement to the House Committee
marized in the following manner:
operating procedures. This
of organization will re¬
more
and more attention
finements to existing facilities in
never-ending
the
hours
fective
These changes will come as re¬
That
investors.
thoughts concerning the
25 years of electric power in
next
work-hours,
is
customers
being actively discussed.
challenge indeed.
Summary
been
toward
longer , vaca¬
tions, and more and more bene¬
fits. There is nothing to show that
this trend will change. The indus¬
fewer
by
These
has
years
many
securities
alone is a
Reserve
presents his testimony to House Commit¬
on
the
Thursday, June 10, 1954
..
Urges Audit of Federal
Congressman
condition
which encourages the purchase of
for
oped to provide efficient and ef¬
for residences,
power
trend
440-220
farms
ago
years
of
The
advance.
however, must operate 24
each day.
Ingenuity will
be required to meet this situation.
Competent personnel must be
recruited and
carefully trained.
Lines of authority must be devel¬
Jn the matter of distribution,
higher feeder voltages are being
used
in
well
tee
The
to be expected.
are
be planned
which must
problem
try,
subtransmission lines.
or
ary
public. Organiza¬
tions must be expanded to meet
these new and enlarged respon¬
sibilities. That in itself is a major
the
to
Texas
and
main problem will be to maintain
a
sibility
Patman
and
The
practices which
are involved have changed greatly
in the past 25 years and future
Electric Power in U. S.
that
management
condition.
financial
procedures
Qnaitei-Century Forecast of
within the next 25 years, and
good
upon
sound
a
.
12
Federal Reserve banks in pro¬
portion to their size, the 12 banks
being required to comply with all
instructions
of
the
Open
Market
has not
adequate
United
States
ter—as
to
during this time
reports
to
Congress—its
what
it
was
the
mas¬
doing
or
the extent of its operations. Oth-
[Volume 179
erwise,
it
Number 5332
would
not
.
be
„.
The Commercial and Financial Chronicle
paying
dized up
Federal annual salaries of $25,000,
ination
$50,000
way
clear
and
the
taurants
proportion.
food
ficials and
which are
Neither
$60,000,
of
out
would
for the
bills
employees in the
and
cafeterias
of¬
res¬
subsi¬
be
(2565)
to 50%. A hasty exam¬
by this Committee of the
and manner public funds are
expended
the
by
Martin
Approves Aims of Tax Revision Bill
June issue
in shocking dis¬
probably result
of
too vital to
closures."
to
of Federal Reserve
Government
tfn
Board tells
House Committee
Operations, adding Comptroller General to
existing auditing agencies covering Federal Reserve Banks
would make for duplication and needless
.4,
constitute
entering wedge in encroaching
an
aims
and might
expense,
out
their inde- >s
upon
On
June 2, Wm. McC. Martin,
Chairman of the Board of
Governors
serve
the
Federal
Re¬
System, appeared before the
House
i 11
m
of
Come e
"The
.
Board
Congress
that
the
in one agency, which
necessity
is
thoroughly in¬
of
Operations
formed
in
concerning
Federal
Re¬
Bank
serve
bill
(H. R.
7 6 0 2 )
would
which
operations, not only
authority to examine and
audit, but also the power to put
direct
into
the
a
the
Comp¬
troller
eral
Gen¬
to
the
need
make
audit
an
effect tnrough its
authority
for which
further
of
Federal
by
audit
another
Reserve Board
would
needless
eral
Fed¬
Reserve
31,
made
w-McC*Martin-Jr-
1953.
to
In
the
his
House
statement
committee,
Chairman Martin stated:
"The functions and responsibili¬
ties of the Board of Governors
and
the
are
such
Federal
Reserve
Banks
that
Congress has
they be carried
independent discretion
vided
pro¬
that
with
judgment.
Federal
out
and
Accordingly, the
of
penses
the
Board
Reserve
and
Banks
ex¬
the
of
not
are
subject to the budgetary and aud¬
iting control of any other agency
of
Government.
Governors
disclosed.
these
of
operations
Government
make
for
and
Moreover, the
expense.
is
The
the
Board
of
and
impartial credit
monetary policy.
some
system,
the
over
reserve
banking
another
ernment
which
the
of
If through
of control
measure
finances
agency of Gov¬
restrict operations
could
the
System deemed
neces¬
in performing its statutory
functions, the resulting substitu¬
tion of judgment could
only result
in
growing loss of effectveness
a
of the
Reserve
System.
meeting its statutory
"In
re¬
supervisory agency of the reserve
banking system and as such has
sponsibility of exercising general
responsibility
Banks, the Board constantly
strives through budgetary meas¬
for
general
super¬
vision!
over
expenditures at the
Reserve Banks (which include the
bulk
great
tures).
of
It
System
also
sponsibility
has
for
expendi¬
direct
re¬
expenditures
at
the Board.
supervision
and
similar
effective
resentatives
branch.
partments
Federal
tating
to
basis.
avoid
the
on
question
of
as
these
Board
de¬
a
ro¬
order
to the
audits,
in
engaged the firm
of Arthur Andersen & Co. to audit
its accounts.
The certificate of
the
audit
for
1952
included
was
in
the Board's Annual Report for
that year. The firm has completed
an
audit
of
the
Board's
records
for the year 1953 and a copy of its
report has been sent to the Con¬
gressional Banking and Currency
Committees.
"Manifestly,
Federal
Reserve
operations should be conducted
with
maximum
efficiency
and
that end Congress
the Board of Govern¬
ors, which is a part of the Gov¬
ernment, direct responsibility for
general supervision and periodic
economy.
placed
To
upon
examination
the
of
Banks.
serve
The
Federal
Re¬
Federal
Re¬
serve Act also provides that each
Federal Reserve Bank should have
a
board
of
directors
chosen from their
of
nine
respective dis¬
identified
with
industry,
com¬
agriculture, banking, and
professional life, who bring to the
merce,
Reserve Banks their personal
ex¬
perience in applying high stand¬
ards of efficiency in their fields
of
private enterprise.
been
It has thus
aptly said that the Federal
combines advantages of
Reserve
Governmental
control
with
ad¬
annual
par¬
structure
that
balanced budget, progand prosperity without
clipa
ress
..
ping anything more off the value
of money. Barring
wars, we have
realized those objectives in the
past.
We
can
have little chance of
off
to
studies,
increase
examination
Reserve
highest
risk
a
in
business
the
the
ought
to
to prosperity we
way
the
try
remedy
reform.
of
tax
•
"These matters
too vital to
are
be made the prey of partisan politics. The Secretary of the Treas-
testifying April 7, reminded
ury,
Bank
of
and
that its
procedures meet the
commercial
of
auditing
procedures
and
tech¬
niques, the Board has adopted the
policy of engaging a nationally
recognized public accounting firm
to accompany the examiners on
Federal Reserve Bank
one
ination
exam¬
each year for_thp- purpose
of
reviewing and observing
procedures in actual use.
"The
Federal
Open
the
"
'The
fact
that
revision
tax
our
is
system
not
something,
incidentally, that the Republican
Party has just suddenly proposed.
"
'For years congressional com-
mittees, with Democratic Chairmen
and Democratic majority member-
ship, have recommended revision.
And
Democratic
minority
1947-48
in
mem¬
when
does
not
handle
However, the annual
amination of the Federal
Bank
bank
tem
market transactions for
Committee,
includes. a
comprehensive examination of the
accounts relating to these trans¬
actions.
"The Board believes enactment
poses
the
fundamental
"
'The
not
con¬
San
He
agement.
can
with Dean Wit¬
Co,, 45 Montgomery Street,
members
of
the
Francisco
New
Stock
York
and
Exchanges.
formerly with the Ameri¬
Trust Company.
was
t
Fenner & Beane, Robert Westervelt, Bell & Farrell; Lyle W.
Club of Milwaukee will hold its Hamann, Central
Republic Co.,
annual field
day and picnic on Jack Baumann, The Milwaukee
Friday, June 11 at the Ocono- Company; Oliver Julien, Thomson
Lake
mowoc
Club
Ocono-
and
Country Club. Harold A.
Franke, The Milwaukee Company,
mowoc
general
will be
Chairman.
served
fee
Luncheon
12:00
at
to
7:00
2:00
p.m.
$10.00.
Activities
ball
from
dinner
and
p.m.
scheduled
Hamann,
Central
McKinnon, Clement Stock, InCo.; William Martin,
The
Milwaukee
Company,
Mat Gonring, B. C. Ziegler & Co.;
Frederick Jenkins, Brew-Jenkins
Co., Lloyd Secord, The Milwaukee
Company.
Base-
are
(Committee:
&
vestors Service
Lyle
Republic
W.
Joins Boettcher Staff
Co.
Matthew
and
Gonring,
B.
C.
(Special to The Financial Chronicle)
Ziegler & Co.); Bridge (CommitDENVER,
Colo. — James
C„
tee, Fred Newton, Loewi & Co.,
Blickensderfer has joined the stSffi'*
and Ed Levy, Straus, Blosser &
McDowell);
Thomas
L.
Golf
(Committtee, of Boettcher and Co., 828 17th
Mosher,
The
Mil- Street, members of the New York
Comply, and Emmett
Sheridan, Paine, Webber, Jackson
& Curtis).
gtock Exchange.
With Cantor, Fitzgerald
i<he Chicago-Milwaukee Team
Championship
match
will
be
(Special to The Financial Chronicle)
played
between
Richard
WerBEVERLY HILLS, Calif.—Rob¬
necke, Ames Emerich & Co., and
ert M. Park has been
added to
Richard Vermillion, Smith, Bar¬
the staff of Cantor, Fitzgerald &
ney & Co., representing Chicago,
and
Robert
Johnson
and
William
Co., Inc., 232 North Canon Drive.
and
as
more
items
tax
revision bill
proposal of this
major
Most of its
have been developed
objective study and—in
the absence of compelling political
reasons
to the contrary — have
over
the years been supported on
both sides of the aisle in both the
the Senate.
House and
'With most sincere
I say
that
a
conviction,
modernization of
our
tax
structure, as provided in part
by the present tax revision bill, is
something which this nation must
have
for continued growth and
prosperity.'
"The Secretary emphasized that
the Tax Revision bill is only a
part of a program involving $7
billion tax reductions.
itself he made
On the bill
three main points:
form of the tax
a
re¬
structure and
not
reduction
tax
a
bill.
as
We
must
keep this in mind as we hear the
is
it
on
which
are
the misinformation
that
against
cutting taxes
it
in
what
some
people think is "the wrong way."
It is a reform program which has
been proposed for years and years
needed
as
"
been
plagued by unjust and unfair
hardships over many, many years.
[Third—and most important of
will
all—it
help
our
economy
all
so
help the creation of more and
better
jobs, and better living for
everyone.'
objecting to income tax re¬
in
on
1947
the
Democratic
the House Ways and
'The
sound
approach
toward
postwar tax revision is to make a
comprehensive study of the entire
Federal tax system, including in¬
dividual income taxes, corporate
income taxes, estate
Why arc so many leading indus¬
tries around the country showing such
a
population. There's high interest, too,
in
Very likely for the
that
other
same reason
nation's top com¬
of the
panies have—in the past two
alone—invested
plants
and
$97,154,240
and gift taxes,
the
to
years
in
Certainly, in these competitive
days when distribution costs arc under
scrutiny, there's high interest in
Cincinnati's strategic location—close
to the geographical center of U.S.
The CINCINNATI
the
new
capital improve¬
ments here in this great and
growing
"Ruhr Valley of America."
other
GAS
the
fact
that
such
basic,
heavy¬
weight materials as coal and steel are
right "next door."
high interest, today, in the Greater
Cincinnati Industrial Area?
close
Means Committee stated:
"
high rate of interest?
a
to
it will help new businesses
start, old businesses to expand,
businesses to modernize, and
duction
Why such
reform.
'Second, it helps millions upon
of taxpayers who have
millions
minority
FRANCISCO, Calif.—Earl
now
Co...
provisions
to
(Special to The Financial Chronicle)
C. Borton is
&
after long
"In
ter &
general
arbitrary
an
pur¬
Joins Dean Witter Staff
SAN
dividends
Administration.
grow;
which Congress has sought
and, therefore, would be
trary to the public interest."
Fuller
before you, in other words, is
now
con¬
to achieve in the Federal Reserve
Act
A.
the
"
with
William
Co.; Brent Rupple, Robert W.
Baird ? &.Co.,
Robert
Johnson.
The Milwaukee Company; Sandy
MacRury, Merrill Lynch, Pierce,
needing prompt consideration.
based
Market
flict
of
depreciation
arguments
the 12 Federal Reserve Banks, as
directed
by
the Federal Open
bill, H. R. 7602, would
ler,
specifically listed double
taxation
flexible
ex¬
Reserve
York, which is the
designated to carry out Sys¬
of the
sion and
any
of New
open
Loewi & Co. and Robert Haaek,
R°bert W. Baird & Co.; Jos. Fnl-
Republicans were the majority in
Congress, also recommended revi¬
'First, it is designed
Market
by statute is exclu¬
policy making body and,
funds.
W
*
Teams entered in the Calcutta
Handicap are: Edward Slezak.,
Day
bers of the House Ways & Means
Committee
3
"
Committee
sively a
therefore,
Annual Field
the Senate Finance Committee:
needs
on tee shot, and
18, second or third shots
tee); high gross, least number
MILWAUKEE, Wis.—The Bond
Guest
take
"
standards
Milwaukee Bond Clufe
to
wherewithal for doing so. Before
swallow the poison that infla-
pin (Hole No. 3
&
is
we
for low
be awarded
Richard Wernecke, Ames, Emerich
succeeding if we make it the central object of fiscal policy to take
away from people who can afford
•
examination
vantages of private business man¬
methods
Federal
men
tricts.
They are outstanding men
in their communities, prominently
cost
"In order to be assured
nearest
seven
Banks
However, in
any
impartiality
1952
the
of
Reserve
auditing
Reserve
economy and efficiency of opera¬
tions.
In addition, its staff of ex¬
aminers conducts a thorough and
each
the
the
over
comparative
ures,
"For many years the Board had
its own accounts audited by rep¬
of
too
are
of
sary
governmental
.
execution of
give
tax
a
,
agency
duplication
need
a
independence of judgment which
Congress has sought to safeguard.
Such independence of judgment is
indispensable in the determination
and
"We
can
tion is
might constitute an entering
wedge in encroaching upon that
ended
year
thus
audit
Banks for the
Dec.
is
Legislation to superimpose
and
the
supervisory
improvements the
any
the,principles involyed
Com¬
pu^s.' &uest prizes for low gross
points
article states:
has
combining
on
and
measure
Concerning this, the
provided a sound,
pruaent, and adequate means of
achieving efficiency and economy
in Federal Reserve operations by
Government
opposition to
believes
the
vital to be made the
prey
tisan politics.
pendence of judgment which Congress has sought to safeguard.
Jr.,
of
Milwaukee
Hole No.
be made prey of partisan policies.
"Monthly and excise taxes. Such a revision
Bank Letter," monthly
publication should aim at equitable adjustof the National City Bank of New
ments, incentive effects, and sound
York, in an article discussing the administration
under
peacetime
Tax Revision Bill, passed
by the conditions.'
House of Representatives and now
"The present Tax Revision bill
pending in the Senate, praises the has these aims."
Opposes Govt. Audit of Federal Reserve
Chairman
the
gross, low net, long drive, nearest
The June issue of the
Martin
of
representing Milwaukee.
Prices will
the
"Monthly Bank Letter" of the Natiqnal
City Bank of New York says proposals for tax reforms are
will
System
pany,
41
The solid American qualities of
people, here, continue, of course,
a
powerful attraction. So does
fact that
this area has always
be
had—and
will
continue
to
have—a
plentiful supply of electric power and
gas to offer new and expanding indus¬
tries. A forward-looking $200,000,000
expansion program, begun at the end
of World War II by the Cincinnati
Gas and Electric Company is now
nearing completion. And our eyes arc
still looking ahead.
1
,
&
ELECTRIC Company
Serving Cincinnati—the city closest to America—with an adequate supply
oj gas and electricity Jor its growing domestic and industrial consumption
'I/'
•
42
Continued
which
issues
from first page
appear
owned
the
be
to
Investor Owned Utilities Can
Supply Nation's Power Needs
2.160 in pre-war 1939. For resi¬
dential service the average price
paid last year was 2.740 as com¬
(Incident¬
ally, it was 240 in 1883, the .first
year for which data are available.)
pared with 40 in 1939.
household
only
today
user
spends about 1% of his
disposable
personal income (i.e., the money
he has left to spend after taxes)
for electric service.
In industry
only 6/10ths of 1% of the cost of
the aver¬
the finished product on
spent for electricity last
age was
year.
;
These exceptional records have
been established during an era of
inflation, when the pur¬
unusual
of the dollar has
dropped 50%, when construction
costs, Federal taxes, labor rates
and the price of fuels have more
chasing power
economic
These
doubled.
than
changes have made rate increases
necessity, but through engineer¬
a
achievements, improvements
operations and well directed
sales efforts, prices for electricity
ing
in
+4 are lower
today than they
were
before World War II.
formance
After
a
early progress of the electric busi¬
ness was marked by the struggles,
trials and tribulations of devoted
to convince
men
a
doubting pub¬
lic of the advantages to be gained
from
the
service.
Then
and
widespread
First
came
the
came
of
use
the inventor.
always
difficult
of fi¬
ventures.
nancing unproven
Simultaneously
there
followed,
step
by step, developments
in
electrical equipment manufactur¬
ing and in the design and con¬
struction
of
generating
plants,
better
the
to
people to spend their money
various types of electrically
operated equipment to utilize the
service. At the beginning, the fi¬
nancial man,
the designer, the
constructor, the operator and the
salesman
were
usually all one
person.
But these entrepreneurs
set
in
motion
a
process
im¬
of
provement and expansion that has
continued to this day.
>
The
operating engineers,
stub¬
We
convinced that
are
the
have
we
opportunities
for progress and the same need
for struggle,
courage, hope and
the
us
will
his
same
Edison
that
win
to
and
colleagues had.
And we exfor intelligent,
sustained effort.
At the
same
time, we also can expect
vigorous opposition to every adpect
be
to
rewarded
We
must
just
these
overcome
the
observant in diagnosing
troubles, in seeing what could be
improved and how to accomplish
it, consulting with their colleagues
in the business, applying cut and
dry methods, demanding improve¬
ments from the designers, both in
the manufacturing establishments
The initiation and
hardy
Federal
a
power
arose,
solve
new problems as they
with the determination to
them.
Undoubtedly,
they
were inspired
by the philosophy
of the great Edison, who
said:
"You know, I've been in the in¬
ventor business for
and
over
33 years,
experience is that for
problem that the Lord has
my
every
made for
me
He has also made
a
solution."
It
is
a
to
the
essential
faith of these early pioneers in the
American way of business that
they did not give up. The profit
motive, of course, was a major
factor in keeping them and their
,
.
associates
constantly
at
work
.overcoming obstacles, improving
t their
.products,
and
seeking
^wideping publit acdieptance.;
Gratifying Achievements
The
past achievements of the
electric industry are most
gratify¬
ing to those who have had any
part in it.
It stirs one's pride of
Pride of per-
accomplishment
tomers of
This
Federal
the
amounted
to
Incidentally,
government power
the other hand are
exempt from paying through their
agencies
on
costs
were
doubtful*
The
I call to witness
outstanding
our
in steam
progress
genera-
power
tion, in transmission and distribudesign and practice, all of
tion
which
has
price
helped to reduce the
electric service.
I also
of
Government
to
in
put the* Federal
the
undertaken
tional payrolls and more business
owned
peared
the horizon the possi-
on
We have not minimized this
possibility.
new
of
one
science
as
Our
determination
and
Sflo"
is
fast
as
engineering
may
m'oro "ni
oth^r
from
power
attitude
that
souses
new
™werScom"
com-
tocedbv&emanv
denced by the many power
panies that
actively engaged
are
eareh
energy
■
because
nor
of
that
These
so-called
number
of
companies among others bid competitively for a contract wth the
Atomic
Energy C o m m i s s i o n
(AEC) to build the first utility
Sonib" of
the
from
of April
"A
in-
alone,
AEC
and
the
urged
amendment
eral Government's
ors
with
their money
speed
may
the development and utilization of
atomic energy for power purposes
for the benefit of the
public.
I
president,
took
I
office
stated
I
at
every opportunity make-known to
the
American
people the facts
about the unfairness and
equities
of
competition
tomers
of
the.in-
government
as
power
they affect the
the
cus-
investor-owned
utility companies.
them
should
with
the
going
in
monies
of
compete
to
business, certainly
an
equal basis
be
on
investor-owned
business,
charging to such business the true
of
costs
doing
business,
and
not
base its prices on subsidized costs
at the expense of the customers of
the
investor-owned
utility
com¬
panies and other taxpayers. ^
"
The
Federal' Government's
operations
power
on
basis cannot match
true
a
cost
record,
our
if
the government included all costs
in
its
prices for
in prac¬
resulting
prices would be greater than the
market value : of
pov/er
in the
tically
same
every
power,
that is
area
the
case
could be pro¬
or
duced
by
electric power com¬
panies under the regulation of
public service
trolling power
commissions con¬
rates. ■-
company
"Give-Away" Argument
the., people
of
licenses to develop
hydro-electric
projects or to participate in the
power portion of a multi-purpose
water
development,
resource
of
advocates
the
ever-expanding
an
"Congressional
Record"
13, 1939:
obtain
license
a
to
develop addi¬
tional power on the Snake
proposal from
a
great
asso-: It
ciation
of Tennessee says, in ef¬
'Let the TVA property be
subject to taxation the same as
when
fect,
cific
everybody else's property,' On my
desk
now
there
is
a
printed
on
five
in
companies
Northwest
permits
River.
quite recently
raised
been
has
have
develop
to
the Pa¬
asked
two
for
projects
Clearwater River
forks of the
in Idaho. It has also been made in
the
taxpayers in other sections of the
the
provides that all property
TVA shall be subject ;to
taxation
country
local
everywhere
laws
taxation.
of
of
~
Tmnpnrh n^rfr
If
TVA
the impression that investorui~
„
adequateVcLer
^
t
see
raise
for
was
therefore required
to
area,
percentage
*
Selling Power Below Cost
Roughly, it appears that the bait
used to extend the government's
power operations was to price
power at about one-half what the
to
sources
Federal,
and provide additional
of tax revenues for the
state and local govern¬
interest in receiving the full ben¬
the
efits from
all
such
power
projects
is
produced at
amply pro¬
I
tected.
The
of this industry
with respect to sound water re¬
tion-rrTVA and rits ^distributors— sources development was clearly
is only 4.95%* A comparison based set forth
by the Institute over
on mills per kilowatt-hour sold is
four years ago in a presentation
even more striking—electric util¬
to the President's Water Resources
ity companies pay 1,7 mills per Policy Commission. The statement
kilowatt-hour to states ard local of
principles announced then is
governments. TVA pays 14/MM)ths just as.sound today. '
position
the'total for the combined opera-
of
1
mill and the combined TVA-
operation
38/100ths of 1 mill.
none
of them
*
pays
ApdhoLcouKse
pay'Federal taxes.
Another subsidy I wOuftHike
ities
from
resulted
fo
and
to build power facilities in
such
additions
need¬
expenditures,
tax burden,
duplication
of
discrimination i aeainst
substantial
taxpayine
vate
participation has
substantial
in
-to* the* nation's
Government..p^uye r 'operations
utilitiescharge
escape paying interest or return
whicli was also
on
the capital supplied by Con¬
gress
is
pursued in the past
attempting to exclude the util¬
less
briefly
mention
-The course
of
that ^Federal
for the service,
about one-half .of its. true cost to
the government. The latest REA
so doing add some¬
regional
growth
and
by
and
thing
utility companies pay. In ments? Their systems are inter¬
1953, TVA's total payments in lieu connected with the power suoply
of taxes,,were 3.26% of
revenue^.. systems of the area and are under
Compare this with the percentage regulation, so that the public's
distributor
PniB.._
coni-
electric
too
IS* for, Sr„ivate industry and the
cc^craI Government hiu£t-$lCP m.
«pl,,
?
power
panies do with these assets other
them to work for the
benefit of all the people in the
than to put
its
these
can
of
the- but present ^payments are far from".
supplying the being comparable with* what" the
Propaganda and .these (Maims.
What
out
temporarily
Niagara
rate of payments in lieu of taxes,, .prosperity
defenS S
is
case
prepared to undertake.
go
we
can
business in three months."
a pe
wer
the
under
Propaganda has been for years, to that extreme, Senators
disseminated skillfully, often by that the TVA would be
of
redevel¬
the
your--investor-owned
as
would
with
it
is
opment, which five utility com¬
panies in New York State are
forms of Federal taxes—to inform
them of tlle real facts and the
harmful effects upon.tfcerm of thjs
Energy Actsupplementing the Fedactivity, invest-
that,
so
Federal
if
up,
with
citizens
which
rectly through income and other
of the present Atomic
its
of
this program. ^
Institute
has pledged its cooperation to the
it
sum
amendment intended to be offered
Electric
upon
To
Government
results from subsidies made
possible at the expense of the
,
Edison
the
taxes.:'"'
instances, when utility
that; companies have sought to obtain
cry
at^the time .TVA took
- Experience lids' taught us to,r4- ■?
Sard aU such $tatemenis~Wittf con- - of 8;66^o to state and local gov¬
ernments by the investor-owned
cern because, in general, 4hey -are
power plant that will use atomic
designed to disarm, the proponents companies. The distribution sys¬
tems in- the TVA area also pay
energy from a nuclear reactor as and supporters pf /t&e free pntera
source of fuel.
The Duqtie?he Prise system. It Is our duty to our sqme "in-lieu of" local taxes, but
The
many
income
,
low-cost
nation's power requirements
power
in
state
enterprise had "give away" of the nation's re¬
The proposal was op¬ sources, they claim. This charge
posed vigorously by the late Sen¬ has been made in the case Of
ator Norris, father at the TVA Hell's
Canyon, where the Idaho
Act, who declared, and I quote Power Company is attempting to
area
any
from
displaced private
addi-
that
Fed¬
and
taxes
free
than
from
been doing.
advocates,
low-cost power
the
fear that the job of
a
sustain
income
eral
other
free
power
nattenal.
Atomic Power Development*
Recently
areas.
thus
however, never divulge
dustry rarely locates in
will do everything possible to
we
the
in
and
also
are
Federal power business have
Congress should amend the: TVA- charged the investor-owned com¬
Act so that the Authority would
panies with attempts to grab or
pay taxes on the same basis as: steal
national
assets.
This is .a
have
industries
projects
power
Federal
Tennessee strongly advocated that
busi-
power,
ment
In many
generation, and transmis¬
sion facilities, of private power
companies in. the State of Ten¬
frequently beek^preceded or accompanied fcyfa flood
0f propaganda aimed at' Creating
the impression that government
can
produce and sell electricity
m0re
cheaply, and that once the
power
plants have been
pieted the availability of so-called
low-cost power will attract newness
the
recall
may.
up
nessee,
efforts
Story
the
over
to be
call to witness the spirit and steps
by
the
investorcompanies when there ap-
You
went
.
The
The securities issued by govern¬
The
TV A
The
projects naturaliy has always had very strong
popular appeal in the areas,where
criminatory legislation and discriminatory interpretation of legislation against the customers of
the investor-owned utility com-
would
cripple TVA.
in
monies for such
are
House Rules Committee this
,
clearly
inadequate,
spending
of
Federal -tax
spent.
panies.
and
com¬
little, jf any pgjbrnents in lieu of
state or,local taxes.,.,
;
•
c&ses
some
poWer
and
erV goes for thb support of state
and local governments, but gov¬
ernment Z power
agencies* make
.
true
lighj.
panies collect froip theif*custom-
an'd often with resource
developments
where
the-real
benefits
as
compared with -the
the construction monies
overcome
electric
resources,
dis-
When
tribute
of
support
prior to 1932 it was less than 3e
of every dollar collected.
Cus¬
practically always been 'tied in
the development, of natural
Light Company of Pittsburgh was customers, employees ^<i.*secuand
in the
power
companies, the successful bidder and
along rity holders, all of Whom pay
eagerly seized each new advance with the AEC
and the Westing- Federal taxes—indirectly through
in
science,
overcame
hurdles, house Electric
Corporation is now their electric service bills and di¬
broke through or around barriers,
em barked
[ and tackled
from
collected
$809,000,000 in 1953.
with
,
"
the
Government.
expansion of
business has
pio-
as
did. We must
neers
and
-'\vkeenly
is
dently,
the
deeper
and
more
widespread the Federal Governbusiness
operations
be-
the
before
bing their toes, barking their shins
skinning their knuckles
against hard physical facts, men
business
ment's
cus-
the
for
^
service
our
tion.
distribution
for
proprietary
dollar
every
investor-
(
to
tomer.
sys¬
tem work and salesmen to induce
and
lines, operators to make the
.
ca-
serve
bility of an even lower-cost source
of electricity through the use of
atomic energy for power produc-
transmission
ment
of
the
of
customers
.brought me in contact with elec- come, the greater this apprehenelectric bills this share of the cost
tric companies in many parts of si0n becomes and the greater the
of
the Federal
Government,' as
the United States, I can say that people's desire to live under the
government power* operations do
as a group we are not complacent,
philosophy of free enterprise. "
not pay Federal taxes.'
y
*
We
are
striving to improve, to
;
j * Another
make further advancements and
Public Power Propaganda
8.6c Of every, dollar
the
often insuperable task
to
of duties that have
year
obstacles
Industry's Early Struggles
Like many other industries, the
them in their electric service bills
freedom and personal liberty. Evi-
}n the years to
efforts
our
pably.
the big subsidy.
prietary operations on a large
Many believe that govern-
scale.
pect of relaxation
in
Federal taxes are, of course, the
The
Thursday, June 10, 1954
..
instances
owned utility companies pay 13.7c
ment as a
there cannot long remain political
come
no
.
i
the Federal Governresult of being in pro-
im-
of
have
'
big differential,
from
come
provement that afford us no pros-
standards
business—it would
hold
appeal.
surveys.
threat to all private business and
that
without
private enterprise
vance.
;
have arrived and have no
we
Because stripped
Why?
of subsidies it could not obtain or
Apparently they have an inborn
of the domination that can
commendable, providing we do not let self-satisfaction stop effort and that we do not
relax under the false assumption
that
subsidies.
fear
is
further to go. !
We have set
nationwide
in
any
or
government
proprietary
business that is divorced from big
This preference has been
supply.
revealed
business
power
other
significant.
People generally prefer not to
be dependent upon the Federal
Government for their electricity
more
The
Financial Chronicle
The Commercial and
(2566)
group
one
of citizens (the
customers of the pri¬
who constitute 80%
utilities
some
instances.
You will recall of the users of electricity) in fa¬
report (for the
that only a few weeks ago* when vor of another'and smaller group
June 30, 19,52)£
the Hoqse Appropriations Com¬
(the customers of .governmentis one example of this, It shows
mittee proposed that TVA should,Downed
power? systems who pay
that the various Federal power
pay interest>on,the monies appro¬ little or nothing in the way
of
purchased
fiscal,
power
year, ended
..^agencies sold electricity ^.Hhe
priated by Congress, supporters .pf taxesnn their electric bills).
?
^EA C65dps*in fis0al [1952 at *an
TVA staged a frantic and «UcC£ssNever at a
loss for an issue,
endeavored: to fulfill .tbUjaledge. average price of ~4J9 mills" a; "Kilo-•
fuL-proseure-^rive-tokill-the
pro-=
The experience in so doing.
however, the propaganda therpe
^wattchour? knd that the price
posal, even though the suggested more
sharpened my understanding of charged the Co-ops by the private
recently emphasized by the
rate^ oJL interest
lower. than.:
the force? that motivate the ac- companies
In
tions
talks
of
those
and
those
0
,•
.
I
have
supporting
the issues
opposing1
fronting our business.
like to
*
articles
touch upon
a
I
few
and
con-
would
of
the
averaged ~ "ffctT rriills,
average price charged
the
full
cost
of
money
to
the
"public"'poorer-.advocates is
that
enterprise and the
to Co-ops by REA generating staFederal Government are needfd
press reports, Congressmen from to develop power—that the
tions was 13.7 mills
'^
' "
job
You never see a government- Tennessee and Mississippi told- the can best be done by both. At lopg
whereas the
Treasury.
Why?
According
to
both
private
/
Volume 179
Number 5332
.
The Commercial and Financial Chronicle
(2567)
'
43
'
'
*
last this in itself is somewhat of
concession
for them to
wjth the effectiveness of
a.
needed
is
demolished
markable
record
industry
power
by the
the
of
both
re-
dered
-
_
and
since World War II.
A
are
suasive.
Record of Private Companies
vent
The
pared to meet them.
The pioneers of this
record
of
electric
the
investor-
of
recent
pre-
bomb
atom
two
it
were
might have been
four
to
for
not
and
years
TVA's
ability to
produce an extraordinary dmount
of power for production of our
atomic
bombs, atomic bombs
would have been dropped by now
the United States.
of the last
war
in
ment for all private industries in
:
The facts
are that the kilowatthours sold by TVA to the AEC at.
the country since the
service to
during the fiscal year
1944-45, the peak year of war
production. were 6/10ths of 1%
billion, which indicates that
the electric utility companies' expansion accounts for l/12th of the
est
of
Construction:-expenditures
of the investor-owned electric
light and power companies in 1954
?.re es'ima'edu
be about $3 biln
highest of any year.; ,
the.,total Jcilowatt-hours
by the electric light
sup-
plied
industry, land
power
sales
all
to
Federal
and
TVA's
the
agencies
cluding the AEC during the
in-
same
guide
war have management.
a™u"!,e,<? to ""'V sllj>M1/ over
the
Oak Ridge
to
compass
the
of
customers
and broad
a
fair return
There
is
we
of
some
at, least 95%
maturity.
The debentures
are
103
if
at
re-
deemed
to
par
on or prior to June 1,1955
after June 1, 1976 and for
sinking fund
at par.
purposes
1952, Alcoa financed its
prospective capital expenditures
of $410,000,000 through public sale
of $125,000,000
of 3Vb%
debentures due 1964> and issuance of
$100,000,000
loans
talents and
ment
to
due
of
3%
serial
The
1956.
subsequently
smelting facili-
existing Point Comfort,
T.ex" pl?nt;
at
a new alumina plant
Bauxite, Ark.; expansion of
ex-
is.tinS alumina facilities
at Mobile> Ala-5 a new fabricating plant
at Lancaster, Pa., for aluminum
rivets., nails, fasteners and screw
machine products; a new plant at
Bauxite, Ark., for production of
chemical products from alumina;
and expansion of fabricating fa-
-
cilities at Vancouver, Wash,
Now in its final stages, this
pansion
program
ex-
is
currently
scheduled for completion in 1955.
Expansion of the company's fasince
1950, a' substantial
cilities
portion of which has been done
under contracts with the Govern-
ment, has resulted in
an
;
increase
in Alcoa's annual
In early
our
?ex-:
mansion of
ties at the
re-
purposes
from
ranging
prices
further
must
of the issue prior to
deemable for general
enough.
concept of
our
America
25-year debentures, which
priced at 100% and accrued
interest, have a sinking fund, beginning in 1956, which will retire
not
broader
a
service to which
contribute
is
debentures
The
Ade¬
the value of
on
of itself
fund
1, 1979 of Aluminum Co.
are
quate electric power at the low¬
possible price consistent with
property
$100,000,000
was
made yesterday
9) by a nationwide group
of 177 investment
banking firms
headed by The First Boston Corp.
both
in
sense.
sinking
of
(June
of
course
offering
due June
We must give good
our
narrow
3%
of
providing-new facilities to meet
the ever expanding requirements cule and skepticism, by dint of
of the nation is probably un- hard labor they justified the trust
equalled by any other segment of of their associates and financial
backers and brought the age of
our economy; Total investment in
their electric facilities has in- electricity to the world. We must
creased from a little over $12.5 be equally resourceful.
billion in 1945 to about $26.5 bilManagement's Task ^
lion today. According to the U. S.
Our course in the face of the
Department of Commerce, expen- opposition is clear. The true in¬
ditures for new plant and equip- terest of the public must be the
example
Public
industry,
too, were beset with many prob¬
lems and opposition. Despite ridi¬
companies
power
"
MV*KUII
UIIvlS ftlCUa O /O if vDSa
We must be pre¬
issues.
new
H«1
Off Arc Air Ail 1% Italic
skillful, aggressive, per¬
They will continue to in¬
since the close
delayed
on
prise
First Boston Groirn
tflivup
■
enter¬
specific
posterous claim that, if it had not
been for TVA the production of
own
de-
Misleading Propaganda
misleading propaganda is the
the
local
„
owned
.
occasional
anxious, willing and.
able to do their part.
But the enemies of free
ren-
Jiiciencies less and less likely,
private
during
these
will be found
power
make, but systerti interconnections, has
this contention that botn are
even
1
v
bank
manage-
it
deemed
primary alumiproduction from 353,500 tons
in 1950 to 611,000 tons in 1953.
During the same period, the com-
num
pany's consolidated sales
$47-3,248,000
income for
rose
from
to
$707,538,000. Net '
the respective years
Increased from $46,856,000 to $48,848,000. \
We should further utilize
efforts.
8/10ths of 1% ot the :
Last year there was installed'by
adyisable to add new projects toAlcoa, the largest of the three
supplied. During this same.-all fegments of the electric utility our great planning §nd adminis¬ taling $50,000,000 and to raise ad-r domestic producers, accounted for
trative
abilities
for
sound
com-.
ditional
funds
for
period the electric light and power industry
working capi- nearly 49% of U. S.'output of
(investor, -' co-operative
industry had a reserve of generat- a«$ government-owned) 10 mil- munity betterment and area tal and other corporate purposes. Primarjr aluminum in 1953, inTo
growth/
for
fostering
industrial
date
the
augmented program eluding production from tempoiqg capacity of 20%.
V
lion kilowatts of generating caand for improving has heen financed with $75,000,TVA actually delivered 158^500 Pacity.
rarily deactivated facilities using
Atlhe end of 1953 the development,
those things that go to make the 000
of
short-term
bank: loans,
kilowatts to Oak Ridge ."during total generating capacity was 95.5
high-cost power. Other than govt £
"home town" i a better place ^ in which will be
repaid
with
part
of.
tlie- month
ernment business, sales of alumiof
December, 1944, mUUon kilowatts and reserves of which to live.
Progressive, enter¬ the proceeds of the proposed sale niim fabricated
vufKir'H
ji nnrny? rn ji tp]vf ^6n6rstlD^;
C H p 3 Cl,ty GXCCCCiGCl.,
products used in
prising, understanding, tolerant— of $100,000,000 of debentures due
such industries as transportation,
additions scheduled we must truly be "a citizen
•V
capacity of the electric light and
yef ,.are
construction, electrical, appliance"
wherever we serve."
This calls
Chief items included in the ex—,,
power industry.
'
,
By June, 1945, k/Jowatts and cfor 1955, 11.6 mil- for able
leadership and a sound
this percentage bad reached a lit- llon kilowatts.
Electric company program to go with it.
pension*program begun in 1951
a«ount
»
tie less than 6/10ths of 1% and by managements will build generatare new
smelting:
plants
at
Wemajor
portion
of the company 8 ,
I realize that there is a limit to
1949 the kilowatts under contract
^ capacity even more rapidly if how far we can go in matters of natchee, Wash., and Rockdale, total volume.
to Oak Ridge represented 4/10ths
potential rate of :mcrease in this nature, but certainly the elec¬
of 1% and as of the present time * e 1186 0
electricity warrants,
tric companies are well equipped
represent approximately 1.8% of
It is obvious from the above to help in such endeavors to the
the industry's generating capacity, that there is no
neecL^or the Fed- benefit of all segments of the
year
were
total
,
4
tnmHs ™ of rSS
fbls
*
abputa^T^ion
?
-j*
„
'It
>
was
official,
high-ranking
a
who
had
Federal
deal
to
with
supply during World War
H, who made the statement that
power
"power
too
was
too
never
little,
or
*
"Power
Shortage" Myth
'power shortage."
propaganda
public
In spite of all
out about it,
put
this country has never known the
meaning
of
the
shortage." One
with
fa'miliar
"power
words
would have to be
the experiences
.
of
-
other countries
to find
its
mean-
irig.
/World
II
War
kilowatts
r
of
about
generating
capacity were taken by the Fed¬
eral Government from investoroWned
utilities, -some
going to
Russict, - some -going to .in ustrial
iiv, this
operations
self-generation
for
country
and
some agoing
foY the atomic energy program at
Ohk-Ridge.
pacity
A portion of this
ca-
obtained by removing
was
the foundations in
machines from
companies' plants in this
country, the remainder by divertutility
-
ing equipment
companies
-
which
had
on
In addition
manufacturers.
1,250,000
kilowatts
capacity,
which
had
panies
facturers,
ferred
in
on
the" utility
o/der with
of
the
generating
utility
order with
com-
many.-
cancelled
were
about
de-
or
manufacture until after
hostilities,
thus
ink
delaying
by
time
idly
when
expanding
economy.
•
And
the
demand
mounting in the
was
power
■
postwar
for
rap-
comnanies, onlv occasionally have
shortages materialized and then for relatively short
particular
Usually they
the
for
from
electricity
have built
^
;
Theory
should be plain that if the
responsibility were left to it,
prjvate enterprise would continue
provide this country with an
ampie supply of power for all
It
jieeds at reasonable rates
mined
bv
deter-
regulatory, authorities,
that fundamental and
Where there has been any
£jmpie.
question
en
as
just'
itV
on
because
has
ment
have
resulted
areas,
from
business.
will ln
analysis be re¬
solved, as all such problems are
resolved, in the court of public
opinion.- You may have told your
story time and again, but it needs
to be told continuously. We are so
apt to forget that
concerned
too
affairs
sonal
of what
we
with
to
There
its
own
remember
per¬
much
say.
In
conclusion, I ask this ques¬
country going to con¬
tinue to place its reliance in the
free enterprise system? The rec¬
tion: Is this
shows that
ord
far
as
electric
the
as
pro¬
is con¬
cerned, the American people can
wisely and safely
entrust
this
business to private enterprise.
If
such
power
their
is
confident
Federal
it
verdict, and I am
is, the policies of the
Government
shaped
should
be
help, and not hob¬
private utilities.
I am
to
so
ble,
the
sure
that when all of the facts
thoroughly
understood
on
come
by
to hut
are
our
one
the basis of 75 years
That
the
Federal
almost
tion, transmission and distribution
of electricity in competition with
the investor-owned electric utility
over
power
to
tax
is
the
(Special
SAN
in the
case
of economically jus-
multi-purpose water reprojects, the best over-all
solution will come when private
enterprise is given full opportu-
source
nity to participate in the developwith
ment
tion
of
each
i
an
function
am
owned
enuitable distribu-
responsibilities
Sure
of
each
that
companies
accorded
project.
*
investor-
the
have
been
Hodge
is
by
member of the
Exchange,
&
Co.
with
Harrison,
him
will
Charles
be
were
with Bailey &
Certainly
the
power
of
in
,
Interior,
companies
It promises to
be
a
bright one...
subscribers, our employees, our investors...
entire system.
Our new
booklet,"Financial Statistics",
for the asking. Write for your copy.
Davidson.
General Telephone
OKLAHOMA
System
TELEPHONE
CITY,
Okla.—
Northwest 22nd Street, to engage
.....
—
growth story of General Telephone-
is yours
Leterman & Leterman
formed-
Department
our
en-
outiined
states added
more
Harvey H. Shields, Jr., and Wil¬
liam L. Warner.
All previously
of
the
our
Glenn H. Nielsen, Leland F. Scott,
sPeec*ies by responsible officials
...
months, 2
Hector
administration
and
for
with
Kirchen,
F.
—
largest independent system.
The future?
Stock
forming Davidson
sociated
-
,
America's
Calif. —H.
offices at 155 Sansome Street. As¬
the
participation
policy announced by the. present
.couraged
Davidson,
Francisco
San
last six
That's the
to The Financial Chronicle)*
FRANCISCO,
nearly $400 million.
earnings more than quadrupled
bringing the total we serve to 21.
Davidson & Co., in S. F.
destroy."
—now
$22 million for 1953.
In the
H. Hodge Davidson Forms
"The
power
to
capitalization, too,
tripled
In six years, net
companies.
The growing percentage of
steam generation in nearly every
section of
the country, coupled
In six years,
should not engage in the genera¬
taxation.
government
plant and
Government
is genuine cause for the deep fear
have of the destructive force
six years,
equipment almost tripled.
drought
conditions in areas heavily dependent on hydro-electric
power.
In
of experience, namely:
power
element of fear.
an
audience is
our
constantly changing and that it is
citizens, they will
the
supply in
certain
areas
and by its unfair
taxation policy and its failure to
charge its customers the full cost
of producing
power,
has introduced
final
conclusion
Govern-
mixed
and
stock...
The jroad blocks we face
the
the
Federal
let's take
more thing and it is im¬
portant—we must keep the public
informed of the' facts about our
this point, it has aris¬
divided
responsibility for
power
in
tn
tifiable
.
yet
periods
1 c
fu^
civilian
despite this diversion
of equipment, materials an^i manpower,
thanks to t'~e ingenuity,
the foresight, and the engineering
and operating know-how of the
people who man America's powerl
local
onH
urog
economy.
f One
duction of
of
the
iitilifiofi
i
The "Fear"
we
beyond
even
is
money,
he power plants they
nd are building.
installation
and
this
job of the i utilities was and is to
find
and
create
non-subsidized
several years their completion and
to
supply
to
generating about 11% of themafmnj* power productmn, ipcludin£ generation by industrial
for their own use. ^Twenty years
a£° P°wer production fromrFedcral Plants was only 3/10ths of
£%• At that time, and for years
before, and again today the big
markets
During
750.000
and
Treasury
taxing American business and the
Another favorite rallying cry of
the
public
power
advocates
is
the
from 4,the
billions
late "
i
eral Government to.;.appropriate
money now, or at any other time,
*assure an adequate^power sup^or this country. The Federal
Government, after spending.many^
.
for,
and ™<*inery,
Leterman and Leterman has been
in
a
with
offices
at
260
400V2
securities business.
1
MADISON
AVENUE.
NEW
YORK.
N.Y".
*
44
The Commercial and Financial Chronicle
(2563)
merchants and businessmen.
They
told that millions in trade a
Britain Looks for Peace and
were
year
Securities Salesman's Corner
Trade With Communist Bloc
was
now
elsewhere,
being
large
a
>
attracted
portion
of ./
which
could'readily be retained !
locally providing they went after
By JOHN BUTTON
PAUL EINZIG
By
Thursday, June 10, 1954
...
it.
Twenty-nine experts in vari¬
phases of merchandising par¬
ticipated in the conferences. The
ous
1
Dr. Einzig, commenting
y
holds
for
.prospects
on
in Far East,
peace
The Investment Business Could Do It
development toward this end would be of importance
affecting world commodity markets, industrial activity, the
as
a
balance of payments situation
'
and the Stock Exchanges of a
Notes items of improvement in world¬
number of countries.
wide economic
conditions.
firms,
suggested
//'
that
investors
LONDON, Eng.—At the time of
the prospects of the
writing
Geneva
with
negotiations
viewed
are
last
week
May
of
the ^sit¬
uation
ap¬
peared to im¬
and
prove,.
fears
negotiators,
On
the
the
least,
genuine
the
time
these
lines
appear
stiffen
may
the
Communist
hand,
it
possible,
of June
is,
that
to
say
the
first
witness
may
towards
progress
Far
The
pos¬
attempts at an
settlement may fail.
other
fortnight
In the
to
'and
acceptable
peace
East.
is,
how
Geneva
at
would
affect
the
Much depends on whether
settlement
a
lowed
by
would
similar
a
Bloc
be
fol¬
understand¬
and
the
Democratic
countries,
and whether the two
settlements
would
lead
to
an
agreement
disarmament,
on
rate
any
the
on
armaments.
or
limitation
There
versed
has
(6)
phere
for
other
directions.
be
can
tion
unsound
(7)
at
been
a
The
in
progress
settlement
three
Nevertheless,
unwarranted
opti¬
the
that
those
as
the
a development of im¬
importance, and would be
the
modity
markets,
tivity, the Stock
world
com¬
industrial
ac¬
Exchanges,
the
balance
of payments position of
various countries, etc. In a word,
a Geneva
settlement would be a
major factor in the
situation
business
reached
after
soon
fire" in Korea
the
it might have pro¬
duced
grave repercussions in, the
Western world. As a result of the
Korea
boom
Stock
and
levels
commodity
Exchanges
markets
reached
at which
they were highly
vulnerable. Industry in the United
States, Britain and other coun¬
tries, was heavily engaged in re¬
armament.
The
cancellation
of
orders might have produced
slump, especially as there would
arms
a
have
been
sudden
mand
little
likelihood
increase
of
possibility of
The
of
civilian
a
de¬
slump.
the
consequences
of
settlement
has
meantime
undergone
more
(I)
than
a
one
the
Western
to
conditions
cases
is
ficers have dealt
and
owned
instead
of
tion.
' v-;-;;--
goods and
might
of
in
iteslf,
standing
the
■
course
how
payments
of
the
currency
absence
of
a
in
this
men
are
the
in
and
investment
book
of rules that would promote hon¬
est, competent management. Un¬
less a corporation's management
complied, listing would be refused
reputable
dealer-brokers
could and should refuse to handle
the
rights
at
it's
do
from
page
securities >of
not
measure
that
companies
factory
too
great,
find
cash
register
cut.
to
We
some
We
the
discount
but
indignation will not wipe out
the
facts
houses
their
of
realistic
part of the
much
existence.
In
the
drastic
countries.
Their
three
had been
overall
obsolescence
is
the
whole
preaching and, to
least, practising
area
development
of
community improvement for
quite a while.
Up until a year
ago, however, no way had come
to our attention of putting these
a
they are
adjustment.
it
is
disease
a
of
mental illness
a
a
growth,
is not
feet
or
business.
that affects
body
of business. As
its elimination is mainly a
such,
matter
of attitude,
understanding.
•
We,; know
that
of
of
intent,
i
the
purpose of
just manufac¬
turing, not simply lower unit cost,
not even sales at a
price. The pur¬
pose of production is consumption.
production
is
not
Not
making, not selling, not buy¬
ing—but using.
/ ; * : In our business, we should know
best
and
most.
In
one
way,
lucky that producing elec¬
tric power is linked so closely to
we
are
consuming it.
patchers
mand.
Day and night, around the
clock
the
We have load dis¬
adjust output to de¬
to
and
the
calendar,' we fly
patterns — and the
of
people and of the
steady
whims
well.
—
we
We
know
the
patterns
Regular size
or emergency,
able to adjust much more
are
quickly than other industries with
satisfaction
that
It's
lag of years, between
a
design section of
bile
of
a
automo¬
an
the
and
company
owner
com¬
long cir¬
a
proud
car—not to
new
men¬
tion the last, honeful owner of the
trade-in.
time they get
model, it's
late for the next question.
the
too
But
the
By
to
answer
a
new
sometimes
think
I
mediacy of this end* of
at
extent
gospel
service
our
love them.
we
have
we
wars,
a
the hands
It
thing
one
in
blinds
ness
that
the
im¬
busi¬
our
to the broad forces
us
continuously affect us as they
affect
all
market
business.
is
forces.
The
future
Our
conditioned
by
these
realities of sell¬
same
ing
bear impartially
on
butcher, the baker—and the
dle-power maker. On us.
the
can¬
They did. not create the situation, ideas to work to .help our com¬
rather they illuminate!
tit. They- mercial customers retain the busi-;
All Business Is Competitive
dramatize, in the selling field, the ness that was naturally theirs. (
Europe there same situation
For competition,
like produc¬
that is easily rec¬ Certainly here was an opportu¬
would be practically no reduction.
ognized in the manufacturing field nity to demonstrate how we could tion, is total. Like General Mo¬
Even a settlement in
Europe when
tors
and
General
Baking,
and
production costs show the help ourselves by helping others.
would not necessarily be followed
General Foods, a public utility i$
overload of obsolete methods and A plan of action was developed
by any marked cuts in arms ex¬
equipment.
We know what al¬ by the late Bob Ely who was then constantly engaged in proving its
penditure unless an agreement is
ways
happens in this situation; sales Vice-President, and this plan utility to the public. If we are to
reached
for disarmament.
the
latter, its possibility is
mote that it is pointless to
late
It
on
ever,
of
for
so
re¬
specu¬
reasonable to.
hope, how¬
that the world-wide effects
any
such
balance
on
As
its economic consequences.
seems
activity
What
settlement would
favorable
rather
than
to
be
business
otherwise.
matters
from
practical
a
no
future
to
reason
effects of
a
is
fear
that
the
there
is
economic
settlement at
Geneva.
George N. Patrick
George N. Patrick, limited part¬
in H. T. Carey, Joost & Pat¬
rick, passed away on May 28. '
ner
somebody makes
dong.
a
cheaper ding-
is the gradual
town- residents
from
their
com¬
in
Analyzed
It started off with
how much business
.
an
was
munities.
When
the
^
analysis of
being lost
by merchants in the smaller
munity stores to the big stores in
oped
the cities.
more au¬
tomobiles and the natural aggres¬
shown to
siveness of the
enlisting
disers
are
Better
roads,
big time merchan¬
positive/and
factors in this shift.
powerful
But the nega¬
.
merce
from
facts
com¬
devel¬
had
we
little
their
determine
what
and
trend.
accelerating force in this
Since
rural than
took
a
we
an
dim
are
more
of
a
urban company, we
view
of
this
buying
were
com¬
difficulty in
cooperation.
the small town merchant has also
an
.
Sur¬
made of local residents
like about their
what
analysis
local- chambers- of
veys were
to
this
tive, "what's the use" attitude of
been
do
more
to
are
Lost Business
shift
in the buying habits of the small
direc¬
than meet demand, if we
create demand,
the
honest
it must be
that
awareness
a
*
One example of this obsolescence
which
has
become
increasingly
us
under his
out
tion last fall.
in, rigor mortis is not far behind.
obvious to
carried
was
And when obsolescence sets
-
point of view regarding the im¬
change
respect:
is
continuous
city cousins,
our
and
sense,
process of
as
publicity
long time lag between product
design, and ultimate use, and the
from
of
that
to
area
gets
going
flowing
power
may view
with alarm,
somebody's
short
a
harshly
ex¬
settlement would
the
incidental
pletes the circuit.
"profitless prosperity."
to
a
Area.
would depend on the
called
and
being
to keep the ball
are
a
up.
24
Whenever the distance from the
area.
of
a
weather.
and
law unto
up a
Selling Action Required to
Expand Electric Power Use
strongly adverse trend in Ster¬
ling Area exports to the Dollar
a
and
big
balance
development
to which
there
but
very
essential
de¬
couple of booms, and
half-century of lurching but
pression,
that
'
is
Individ¬
admission.
of
there
learned
cuit, with
slump in the United
States/however, there is no need
the
subject
industry that could set
indi¬
If
the
particular
In the
any
or
it
As
are
the
time"
settlement
a
affect
the
be
then we
a nation of
is
year
The
eventual
Continued
difficult
very
would
return
America.
wie
now
country
cannot
the
above
in
favored
rights of
a
fair
a
objective,
begin to build
broad
stockholder.
pro¬
in
a
to
investment
his
This
Management
become
cases
stockholder
sirable objective.
corpora¬
the
by
stockholder.
these
of
much-dreaded
a
be rectified
vidual
secu¬
even
effects
country
Much
usually
the
legally enjoy
and that the
only working
around the fringes of such a de¬
of¬
price
would
not
of projects
which is created by these confer¬
ences is in
my opinion worth the
investor
stockholders
said,
planned this
holders,
could
controlled by themselves
of
guar¬
it
as
point
can
we
score
conferences
rolling.
of
paramount
corporations
conditions/
would
a
follow-up
that
on
a
with each other
detriment
that
rules
of
although
better than
further
it is most
Exchanges
attempt
times
/
directly traceable to it.
play toward the stock¬
so that every American
the
isolated
Wolfson
other
These
optimism would
toward encourag¬
would
fear
or
the
to
been
step
followed
be
with
correc¬
to
all
position,
left
company's
a
needed
much
to
even
they
didn't
cortamunity stores
should
be
done
to
im¬
them. The next step was
the organization of conferences in
prove
eight
were
areas
of
Connecticut which
attended by several
hundred
4
;l~^'(x
It is too early yet to
adequately
appraise this store modernization
antee fair
stands
Mr.
again
and
do little to bring
also
Stock
could
secret.
no
individ¬
us
have the protec¬
right and his due.
If people could be convinced that
predatory and selfish management
as
by
was
in
exist
of
tion that is his
and
much
of the total net earned
these
each
But
can
this
set
a
He gave
as
the
recommend
and the
non-member firms could compile
cor¬
officers
have drawn
Moreover,
situation
Rearmament passed its peak
the
where
cases
to
tion in the cases where
a much larger percent¬
of the net earnings after taxes
time
fa¬
more
have
"peace-in-our
a
mediate
today would
incomparably less destructive.
In
in
grave
economic
peace
be
in
a
ually
Mr.
are
they should receive.
wish
The
deterrents
but
have cost several
ual
and dividends are
things in their minds. I
required.
investment,
Wolfson stated that there
been
progress
last
about
for expansion and dividends. That
a
important
way
foresee
tent
these
stock
common
ually,
much.
ries;
clients.
There Is Another Reason
prospect. It would have been
impossible to give each of these
prospects the same story individ¬
:
per
would
have
which
expense
entirely by our com$2,500, or about $3.30
was
program,
don't
investor
borne
those
stocks of such corporations to my
ship of American business. (
This
of
is
to
for
out-of-pocket
was
foregoing description very
are
sitting pretty,
management is drawing fat sala¬
the
the only
timidity re¬
garding investment in the owner¬
40%
to
replace the government
purchases.
There-was at-least a
a
for
■
would
Indeed it
Geneva
of
corpo¬
of the past are not
errors
reasons
who
to
be. followed
by a reduction, of
been ;arms
expenditure. In the absence
"cease¬
of a settlement in
settlement
a
to
on
corporation and the rest
slump.
international
and
outlook.
first
excessive
It
be
affect
be
it would
demand for
rities.
future.
near
Even so, the termination of hos¬
in the Far East would in
such
call
taxation
earnings; but in the opinion
directors
inherently
not
would
peace
long
a
ing
high personal taxes
Wolfson, high personal
taxes, capital gains taxes, and the
than
Ex¬
ago.
years
others.
go
the
down
Insiders
well.
Mr.
specific
Stock
This latter consideration is par¬
tilities
Had
ration
of
age
psychological effect of
vorable than
by
of
law
the
fit
obtaining
persistently
months, the situa¬
ticularly important.
Rightly or
wrongly there, is now a feeling
no
The 1929 crash still lingers
excessive
and
the
laid
managements
others have
bought tax-exempt securities be¬
cause
se¬
guilty of abusing their positions of
trust.
I know of companies that
porations where a few top execu¬
tives, directors and associates are
opped up, purchasing
remains plentiful.
(8)
boom
-
re¬
m
and Austria, and especially
controlled disarmament, could be
economic
became
high level.
a
power
shape
to
of
Even though
much of the postwar inflation has
are
duce
liable
the
been
does
stocks.
demand and pro¬
for civilian requirements
duction
Ger¬
mense
and
and
Civilian
of
*<$self
of
balance
considered
many
that
is
selling
are
total
pany
bring about some
very substantial changes in this
picture if we ever got together
in fixed dollar assets because they
haven't confidence in common
a
at
many
.
not
reason
Sells
who
us
Know
could
curities
not
are
Admitting
though
recent
is
difficult
in
after
effect
situation
Those of
Corp.,
than
of
one
making
expect
achieved
been
the
on
have
in
firm
that
be
slump
a
have
Even
changes
toward
the
such
of
position.
sphere,
right atmos¬
to
rather
consolidated its exchange
now
major settle¬
would
been
the
1951-52, and the Ster¬
ling Area having weathered the
crisis resulting from the reaction,
a
_
in
in
in
reached
create
problems
have
war
payments
that, should
mism
in
disas¬
any
conditions
States
Korean
be
it
no
absorbed
prolonged boom.
v(5). The artifical
ment
would
are
prices.
would
doubt
it
be
without
likelihood
there
ing in Europe between the Com¬
munist
of
Business
United
a
economic situation in the Western
world?
fall
Scott
buying common
they have a fear
complex. They invest their money
stocks
reaction.
question
settlement
could
markets
most
the
of
Wolfson
E.
&
Should
He
What
in the minds of some,
less
forces
of
world
Needless
in print /here
complete change for the
the military successes of
attitude
in
artifically high, and any
selling brought about by a peace
settlement
(4)
a
worse;
the Viet Minh
factor
pronounced.
quite
sibly by
\my be
dominant
a
longer
be¬
less
say,
4',
be
to
subdued during the last 12 months
or so.
As a result there is much
tinctly
Or. Paul Einzig
Stockpiling has long ceased
commodity markets.
(3) Commodity prices
trous
dis¬
came
prosperity is no longer
on it to anything like
extent.
same
(2)
a
of
deadlock
such
the
certain amount of guarded
a
optimism.
During the
the
industrial
dependent
Louis
Mr.
Merritt-Chapman
Sells
Who
He
Recently the Chairman of one
of the nation's leading contracting
kilowatthour
is
in
direct
compe-s
tition withfew - slices of
three -miles
of
bread,
gasoline,/ifLmin^.
utes of movies, and a*short beer-.
Because "the
public" .is only an
label.!-for.
anonymous
our
members of the human
measure
Their wants? in
living. 7 People
amount
How
a
who
Terms.-of
definite
only of time and money.
spend
both is deter¬
we
mined
by
motives,
our
and
Let
future
us,
interests
hungers
our
satisfactions.
nite
have
fellow
race
These
more
and
and
our
our
less defi¬
flexible.
therefore,
market
are
in
appraise the
knowledge
the
Volume 179
Number 5332
The Commercial and Financial Chronicle
...
that electric power is not separate
from other products; that demand,
on
the load dispatcher's
dials, is
not
desire
for
electric
that
agree,
market,
to
how
tools.
to
do
we
Let
that
We
us
may
erate
future
the
conditions.
same
selling methods for the
market
must
ized to take into
happening
to
be
modern¬
account what is
selling
in
other
industries.
I
the
rough
But
I
—and
doorbells,
of
know
sales to
that
calls.
television
thousand bells at
a
consume
a
in
few
once
kilowatt-
hours while doing it.
I would
like to
see
I have
Jng is not
A
a
to
come
believe
point
a
sell-
that
mutually
is
a
rewarding.
steady
of
What
"the slow
push
and
for
the
pitch."
York, it
try must
Trust
all, I think
indus¬
our
the kind of
assume
cor¬
porate attitude in which planning
announced
was
John
Advisory Board of the
footing
will
we
the
devote
same
thoughtful understanding to sales
that we devote to calculating fu¬
ture demand, we will have a mar¬
gin of merchandising also a little
bigger than we think might be
needed
for maximum
operation.
If we will devote to "selling for
the future market" the
for costs
will
be
devote to the
we
facturing
same
of
electric
able
to
care
manu¬
power,
we
compete success¬
fully in the total market for that
grand prize we all seek—the sat¬
isfied
the far side
educated
go
The
customer.
on
the meters whose
of
hands
desires make the
kind
The
'round.
whose
people
attitude
adds
of
up
people
to—and
receive
Main
Irving
York,
Trust
Company,
of
New
9
the
B.
Joy
June
on
Frederick
van
Assistant Vice-President in the
Personal
cialist
Division.
Trust
for
handling of estates, he
Irving in 1953.
Four
Assistant
spe¬
in
the
to the
came
also
been
located
at the
Secretaries:
Irving's 51st Street
with
the
of
the
Irving's central
personnel department.
G.
Brandon
Smith, with the
Company since 1948, is associated
with
the
Irving's 21st Street
Branch
joining the
Hickox,
Crocker
Philip
E..
Nevin, and
Assistant
Neary
Treasurers
as
Marine
The
of
Mid¬
land Trust Company of New York
announced
was
James
G.
lowing
a
1 June
on
7
by
Blaine, President, fol¬
meeting of the Board of
Hickox
Mr.
mezzanine.
new
associated
are
*
*
1
as
of
*
of
*
Bank,
City
of
Bank
Reading,
2
Fox,
Secretary
the
the
\
Joseph
York,
3
June
G.
Sav¬
was
Mr.
Fox
the
specialized
will
with
8
trustee.
a
been
in
tax
and
(Special
a
ST.
H.
John
T.
Wiggin
Sutcliffe
are
now
and
#
Dime
The
Harold
the
Bank
and
conduct
12,
C.
(Special to The Financial Chronicle)
western Gas I EL ids.
BEACH, Fla. —Richard
W. A. Davis is with A. M. Kidder
&l Co., 316 South County Road.
headed
-fA -A' •''.
Standard In v. Adds
a
1,
1984.
awarded
sale
indicated
to
the
Trust
issue
wa^
the group at competi¬
to
the
bonds
The
on
a
bid
of
rate.
at
be
used
ing
of
bank
loans
for
and the bal¬
SAN
to The
of
Savings
hold
will
advanced
M.
Francis K. Bottomley has
affiliated with
&
become
Eastland, Douglass
Co., Inc., 100 Bush Street.
than
more
of
Title
in
of
a
branch
Bank
of
open-house
modern
bank¬
$22,425,000 in the ac¬
depositors, is at
15,366
from
a r a
corner
it
Saturday,
9
t i
to
a.m.
7
have
o n s
of Mermaid
17th Street.
will be open
West
and
p.m.,
been
and preomade
for
greeting 10,000 visitors, according
to
Edward
Secretary
King Merritt & Co., Inc., 578 First
Manager
Branch.
L.
of
of
Watson.
investment
appointments
by Paul
a
Goodrich,
joined
Trust
and has held
W.
di¬
were
•
:
Waddell
Chicago
Company in 1931
number of posts in
administrative
division.
For
past three years, he has been
working
in
the field
of
research
and methods.
Mr.
has
Bull
been
associated
with the Company's trust
division
1930.
1950
Finley joined the staff in
a
security analyst in the
as
investment division.
Mr. Finlayson has held the
posi¬
security analyst with the
company since 1948.
tion
of
*
The
*
*
Union
Hackley
Bank
of
National
Muskegon, Mich, has re¬
completed
businessmen
modernizing
a
shareholders
and
previewed the quarters
formal
The
June
there
5.
on
opening
the
At
formal
June 3.
was
on
opening
orchids for the ladies;
balloons and comic books
youngsters and somewhat
unorthodox, a sample of the
were
candy,
for the
bank's
of Directors of The
Board
Simmons
*
*
V
The
CENTRAL AND SOUTH WEST CORPORATION
merchandise.
National
Bank
of
Pine
,
Wilmington, Delaware
CENTRAL POWER AND LIGHT COMPANY
Bluff, Pine Bluff, Ark., announced
on
May
Lara
the
17
Finley
election
Hutt,
of
Chairman
Mr.
Board; Mr. Charles A. Gordon,
President;
and
Mr.
Wayne
A.
Stone, Executive Vice-President.
*
*
By
May
a
24
the
*
dividend
effective
Mercantile
National
stock
PUBLIC SERVICE COMPANY OF OKLAHOMA
of
the
Assistant
Dime"
and
Coney
Island
"The
the
THE GREAT SOUTH WEST
Assistant
named
the
The
and
Trust
remodeling program at their
Muskegon Heights office. Local
behind-the-scenes
southwest
Serving
division.
Bank of Miami Beach, Fla. has in¬
SOUTHWESTERN
t-
Calif.—
Man¬
Finley and Ranald A.
were
Treasurers
Mr.
to
trust
•<
Financial Chronicle)
FRANCISCO,
named As¬
and
of
Co;
/
(Special
represent¬
borrowings
purposes
Z.
Calif.—Romon
Investment
With Eastland, Douglass
this
temporary
Standard
California, 571 East Green Street.
to
financing will
prepay $7,500,000
in
to
PASADENA,
Serbay has been added to the staff
The
101.537,
yield 3.17% to maturity.
short-term
>
(Special to The Financial Chronicle)
101.057, for
interest
priced
were
C**
and
*
it was announced by George
Avenue, North.
of $22,469,263.
the offering are:
Merle-Smith; Lee HigginCorp.; R. W. Pressprich & Co.,
PALM
on
Assis-
of
to
was
the
Johnson, President.
Branch, with
Next
R.
in
net
total oper¬
Bull, Assistant Trust
The Coney Island
Avenue,
with
revenues
Associated
on
Texas.
had
division.
C.
Finlayson
cently
Brooklyn, N. Y., in Coney Island,
counts
Samuel
affiliated
the
Secretaryy since 1946.
establishment
the
of
associated
PETERSBURG, Fla.—Wil¬
Foster, George F. Hilt,
liam
ating
and
company
Ham¬
of
ing systems next Saturday, June
to The, Financial Chronicle)
Bank,
Vice-President
ministrative
since
Vice-Presi¬
and
1939
Mr.
officer
an
jemonstrations
King Merritt
the
service, in
Joins A. M. Kidder Co.
department in the Company's ad¬
the
by Robert A. Barnet,
E. Aken, was
since
Bank
the
Four With
stock
Louisiana
1953
Electric
&
Dick &
son
of the methods and research
ager
the
Marking the fourth anniversary
'
a
Gas
electric
and Shields & Co.
M.
transfer his office
counting Officer,
Harold
has
mett
of
Goodbody & Co., 512 Tenth
Street, Wgst.
supplies
income of $4,228,270
capital stock
$75,000 to $300,000 by
debt retirement prices be¬
Southwestern
Co.
For
dividend.
at
ginning May 1, 1956 at 101.48 and
declining to par at maturity. '
Arkansas,
*
.
common
Proceeds of
future
near
sistant
T.
Savings
Irving
*
become
#
redeemable
*
#
the
elected
also
Zilka, Smithers Adds
has
.
Effective May 28 the First Na¬
tional Bank of Turlock, Calif, has
tive
Department of the Bank at its 206
an¬
John
by
general accounting.
of
dent and
BRADENTON, Fla.—Herbert B.
Edwin
position
President.
Vice-President
President.
Wheeler
of
Trust Officer.
Harold
Industrial
New
has
he
June
on
(Special to The Financial Chronicle)
of
the
of
additional
tapt
in
Bank, New York, was announced
Goodbody Adds to Staff
*
and at
a
Company
announced
election
Officer
President of the Bank.
has been in the employ
since 1936. In recent
trustee
Tiffany Building.
''
are
prices begin¬
ning at 104.54 if called during the
12 months
beginning May 1, 1954
and declining to par at
maturity,
was
Bank.
bonds
Equitable
Bank
Trust
Pa.
June
the
Election of John H. Hammett as
Co., Inc.,
ef¬
The
regular redemption
type,
been re¬
*
and
with
Madden,
Executive
Wise
,v":
National
ditions to generating, transmission
and distribution facilities.
Brook, N. J. has increased
Mr.
Oreg— Robert J.
Calif,
branch
pro¬
Through Dec. 31, 1955 the
contemplates expendi¬
tures! of $21,600,000 for new ad¬
old
National
was
on
%
Eugene,
The
\ V
First
Officer,
nounced
matters and
is with Zilka, Smither &
A
Securities. Corp.
banking group which
offered yesterday (June 9) a new
its common
capital stock from issue of $10,000,000 first
mortgage
$400,000 to $500,000 by sale of, bonds, series F, 31/4% of South¬
new stock effective May 24.
western Gas & Electric Co., due
The
Mr.
Assistant Comptrol¬
an
Emigrant
year,s
Chronicle)
Lincoln
high teller cages have
placed with modern, low, friendly
banking counters.
and
of Emigrant
Financial
24.
part of
..
Mr. Reilly
to The
the
construction
Irving in 1953 after several years' North Fifth Street Branch.
experience as a security analyst
and oil economist, i$ a member of
Four promotions were an¬
the Irving's Investment Division,
nounced
by
Chicago Title and
*
*
Trust Company, Chicago, 111.:
The election of Charles"F, 5:
John
Waddell, Assistant
Ac¬
ings,
(Special
of
ing floor and the construction of
in
Office.
John G. Van Deusen,
ler
La
s»s
Los
Torrance,
May
Torrance
May
Burns, starting
Company in 1926, is a
member
Reilly
the
Bank,
pay
renovations to the main bank¬
ers
Bound
George J. Boslet, j!r., a member
of the Irving's staff since 1945, is
Appointment
of
tional
to
construction
that this program cov¬
announces
i
have
men
A
years
many
'
Hooper, President of The Lincoln,
V
announced
"
«s
■
Bank,
used
company
capital of
a
Angeles,
has absorbed Torralice Na¬
fective
of
extensive banking floor
modernization program. John W.
Reeled Miss Richardson
Women.
*
an
announced
President
*
Office
vision.
Street
ladies'
pen or
Calif,
increased its
*
%
California
every
An Open House will be held at
ment.
re-elected
May
County,
established in the former location
*
the
'
a
compact.
La Salle St. Women
Salle
while
rose,
ball-point
a
Lending Division of
the Bank and Mr. Neary, with its
Business Development Depart¬
CHICAGO, 111.—Joan Richard¬
son, Glore, Forgan & Co., has been
given
from
Commercial
Richardson
be
tion of
Nevin
Joan
will
Company, New York, Mr. Flani¬
gan, announced on June 3.
Directors.
makes possible—the future.
visitor
Savings Bank, Brooklyn, N. Y., on
June 12, celebrating the comple¬
Ellsworth J.
equal
Dallas
The Bank has
Real Estate and Mortgage Depart¬
ment
of
Manufacturers
Trust
planning for generating ca¬
pacity we now figure so carefully
to fit general economic growth.
has
Texas.
opening a savings account
renting a safe deposit box will
or
also appointed a mem¬
was
of the
ber
•
If
June 7
on
Butt, President of the
Seamen's Bank for Savings, New
Branch Office.
the
New
D.
with
sales
for
Company,
by Horace C. Flanigan, President.
elected
of
Dallas, Dallas,
-
Each
been
person
tomorrow's
business.
Most
has
ufacturers
process.
continuously
oldtimers called
the
Warner
long-stemmed
election
but
development
relationship between buyer and
seller
of
'
A.
appointed Vice-President of Man¬
But
that
on
C. H. Wise is' Cashier.
Bradford
as
never-ending
Bankers
and
sales¬
more
charter
a
be
company's
gram.
.
$300,000 and a surplus of $200,000.
George I. Fetzer is President and
*
manship at the point of sale.
V.
•■)!
CAPITALIZATIONS
York,
in
ratio
also
ring
can
OFFICERS, ETC.
•
believe
still
V
NEW
REVISED
as
under
our
Currency issued
the
use
«
will
ance
the
25 to the Industrial National Bank
BRANCHES
not know, or
must
we
capital stock
common
The office of Comptroller of the
CONSOLIDATIONS
NEW
the
everybody else. That
have the same goals and. op¬
That
News a(bout Banks
future
know
its
$1,000,000 to $1,500,000.
4!
ought to do
we
it.
that
is
tools
same
what
What
accept,
we
creased
must first build it.
we
We know
and
living.
sell
(2569f'45
from
thing apart from the public
a
'
GAS & ELECTRIC COMPANY
WEST TEXAS UTILITIES COMPANY
'
.
46
The Commercial arid Financial Chronicle;.
(2570)
1%
were
authorization, of
*
|{ rectly applied in< tfie economic domain;
We Se
As
itself rather than
to great
a means
Social
and noble ends. This, I
suggest, is the peril of our hard-headed, pragmatic attitude
that has helped us so much to achieve our vast social and
economic transformation, for if we ever succumb to mate¬
rialism the meaning will go out of America.
"And ignorance begets fear — the most
force of all. If America
she will retain the confidence of
her chance to be
And at
a
subversive
loses confidence in herself,
ever
no one,
and she will lose
free, because the fearful
somewhat later
are never
free."
point in his address he has
this to say:
"And
in
time in spite
of our devotion to the
religious and secular humanism, I wonder if we
are in danger of falling
into a spirit of materialism in
which the aim of life is a never-ending increase of mate¬
rial comfort, and the result a moral and religious vacuum.
"Is this leading, as lack of faith always must, to a
deep sense of insecurity and a deterioration of reason?
And I wonder, too, if today mass manipulation is not a
greater danger than economic exploitation; if we are not
in greater danger of becoming robots than slaves."
now
our
shall be given to the
■
of
to act as though material progress were an end in
means,
ideas of
The
.
Security, Too
story is about the
social
as
with what is
same
security. In Europe the notion
known
now
the
was
customer to
myriads of
Practical
is another
ways
that
politics has
become
now
obtaining
things of life,
to
seems
to lie at the roots of
us
fusion and internal strife
preferential character and
them
always been a favorite
theme of moralists, and not infrequently of politicians. We
gladly leave the whole question of the role of religion
and spirituality to others more competent to study and
present it. We must, however, express our doubt as to
whether materialism is at the bottom of our shortcomings
of this day and time. We have no doubt at all, of course,
Contracts
-
con¬
today.
-
^
that in the minds of
good many what are usually termed
the material good things of life are uppermost. It may be
that this is to be regretted. What we are certain of is that
this emphasis upon the material things has always been
prevalent—and we suspect as prevalent as it is today—
with the
for
us
a
great rank and file of the people/It is difficult
to understand
why it should be
particularly divi¬
a
sive force at the present
time—certainly
non-materialistic
have
forces
been
in
no more so
past decades
than
and
centuries.
What
v
seems
to
most
to
to make these times stand
us
of the
other
of
themselves.
eras
out
in
The seekers after
special protection via
were not slow to take
advantage of the
opportunity then offered. And the general attitude spread
like wildfire.
••
were
came
upon
us
subsidies
spreading, and the Republican leaders were outdoing
to find ways and means of
providing ever
largesse to the farmer. When Franklin Roosevelt
along with the suggestion that the farmer should
themselves
more
came
himself decide what the Federal Government should do
for
him, the proposal,
seems
to
those
nonetheless but
It
was
one
more
it seemed and still
was
step along a road which had
than one preceding admin¬
more
the New Deal which
an
transformed
effort to attain
the
some
labor
sort of
-
and
for
whom
who have-to
bilities
for
under
idea
the lia¬
advances
Act.
The
made
cross-loan
conceived
was
planned
passed
was
assume
the
the
it
by the
welfare - state
in
power
in
economy,
-
protagonists
then
Washington.
The
REA
Act
confers
no pref¬
of power
The REA cooperatives can
erence
upon
users.
any
group
buy and sell power from and to
anyone of their choosing without
preference.
Bonneville
is,
of
Project Act
course, a New Deal
and goes all out for
enactment
ice
of
serv¬
area.
One
the
of
sequiturs
greatest
all
in
non
legislation relat¬
ing
to electric power is in the
general preference clause of this
Act.
"(a)
for
the
generation of
electric energy at the Bonneville
project shall be operated for the
benefit of the general
public, and
particularly of domestic and rural
consumers, the administrator shall
at all times, in disposing of elec¬
tric
generated
energy
at
said
project, give preference and pri¬
ority to public bodies and co¬
operatives."
We
the
Ickes turned his back
tistics
to
ignore
all sta¬
on
the
consumer
records of Washington Water
Power Company
and the' other
Pacific
Coast
companies
volved.
investor
serving the
These
coverage
tial
and
of
use
sales
owned
-
were
in
as now,
rural
in¬
areas
companies
outstanding then,
area
residen¬
and
electric energy.- Their
promotion
has
been
tops.
Even the sales efforts to socialize
the power business in the Pacific
Northwest
Dr.
Carl
conducted
D.
the Socialist
the
BPA
by the late
Thompson,
Vice-Presidential
former
a
candidate
on
ticket, and others
payroll
were
on
inferior
the results of those local
com¬
promoting "the benefit
of the general public, and
par¬
ticularly of domestic and rural
customers."
In
the
Fort
Peck
of 1938, the same
as
ice
Project Act
language occurs
in the BPA Act.
"for
the
public
and
mestic
been
benefit
and
of
Those words,
the
particularly
rural
found
general
of
do¬
consumers"
effective.
To
had
quote
The
have
To
to
had,
and
ever
,
new
the age."
suited
serv¬
Reclamation
of
Act
saddle.
to the outright socializa¬
inherent
an
Act
of
national scale
the
of
purpose
and
intended
v/as
put the Federal Government in
all-controlling position in the
the
of
1944,
attempt
was
made to restore
balance
for
the
an
some
of
customers
the
development
of
the
na¬
Proof of this is
vored
industrial
carve
the
seven
power
would
have
Bills
concerns.
introduced
repeatedly
to
entire
country
into
authorities which
dictatorial
supreme
authority
over-riding
all
state
regulatory commissions and put¬
ting in control men appointed by
the
President and holding office
during his pleasure. Fortunately,
not only for power users, but for
the
whole
Congress
It
A
national
refused
crowning
permit
the
this
into dictatorship.
move
back
move
toward
economy,
to
truly time for
was
a change.
freedom
and
to
impartiality
American
system
the
under
of
enterprise
has been made.
To begin with, it has been made
that the Federal
Govern¬
clear,
does
ment
»
enactment
Control
Flood
moving from
for municipal
power
apparent, not
only in the preference for public
power, but for the selection of fa¬
1939
public
REA's
with no reference to tail-end pri¬
vate companies. By this time the
public power advocates were in
have
not
and
never
has had the responsibility of pro¬
viding
electric
extent
everarea
service
to
what¬
needed
by a given
particular classes of
by
or
distributors
and
consumers.
investor-owned
companies, but
the pressure of the Administra¬
tion was too great, so the Act as
passed provides flatly that "Preiference
in the
and energy
lic bodies
of such
sale
power
shall be given to pub¬
and cooperatives."
Jan.
On
21, 1954, the Solicitor
of the Department of the
Interior,
when before the Senate
tee
the
on
ing
the
Commit¬
Judiciary, after recit¬
pertinent
parts
the
of
acts
relating to
Federal
projects, most of which I
already discussed, summed
many
power
There ~
of
was
gesture
a
toward
duplication
wasteful
transmission
lines in language
providing for the building of
"only such transmission lines and
related facilities as may be nec¬
essary in order to make the power
and
energy
generated
at
such
projects available 'in wholesale
quantities for sale on fair and
reasonable
terms
conditions
and
to facilities owned
by the Federal
Government, public bodies, co¬
operatives, and privately-owned
The Department of
companies."
the Interior, however, paid little
attention
to
this
provision and
spent large' amounts of money
building
unauthorized
lines
to
form
a
widespread nationalized
power
check
the
system until brought
by an irate committee
House
which
called
the
in
in
Sec¬
retary, the Commissioner of Rec¬
lamation
and
some
of-
his
field
have
the position of the
Government as a power
planation
the
out
was
An adequate ex¬
to account.
was
never
made,
but
building of unauthorized lines
of
carry-over
appropriations
stopped.
The
whole
as
Department
Ickes
exposed
in
of
the
the
plan
of
Interior
notorious
Memorandumvo£ 1546, the
first paragraph of
which stated:.
supplier
follows:
"
There
>
*
.
is,
constitutional
grave
of
course,
question
a
in¬
volved in the unlimited extension
of the Federal Government in the
business.
power
that
.
.
It
.
is
true
subsequent to that time (Su¬
Court decision
preme
in
the
As-
wander
Case) the Congress has
authorized, under limited circum¬
stances,
tric
some construction of elec¬
works
as
such,
particularly
Valley, but cer¬
Congress has never
in the Tennessee
tainly,
the
passed any legislation authorizing
the Interior Department to
engage
generally in the electric business,
and, therefore, the repeated state¬
ments
of
the
Department's
witnesses
power
that
policy
the
was
defective because it 'denied
utility
responsibility'
policy
or
'abandons ' the
of
taking care of the
growing needs of the rural sys¬
tems'
to
or
look
needs'
that it 'tells co-operatives
elsewhere
are
for
growing
fallacious
state¬
the standpoint of the
powers of the Department.
very
ments from
legal
socializing
Federal
up
old
men
was
words, well
of electric
use
ates
the
preferences for
ownership,
co-ops,
and
will
leave,
coin
of
of power on a
were
discards all pretexts and enumer¬
the
ever
age!
domestic and rural
consumers
throughout the State
is
proof enough
that the real
motive
back
of
the
preference
clause was to promote the welllaid
plans for a I public power
system over-riding and duplicat¬
ing the systems of the investorowned taxpaying companies.
Wentworth Dillon:
"Man
oft
are
among
the
consistent
sale
dustrial
The effective work done by The
Montana
Power Company
in
spreading the
neces¬
agencies and co-operatives."*
This
tion.
right
the
words
the
to
preventing
only conclude that Mr.
can
of
Before ^-the
In order to insure that the
token,
same
suited
well
It reads:
facilities
the
By
as
field of electric power and energy
and thereby in control of the ih-
y
combination
modifica¬
to insure preference to pub¬
sary
an
.
panies in
equality in bargaining between wage earners on the one
hand and employers on the other into a determined effort
to use political and
governmental means to enrich the
laboring population at the expense of other elements in
the population. It is a fact,
however, that the way had
been prepared by so-called intellectual leaders for decades
prior to the rise of Franklin Roosevelt. Only the virile
leadership of Mr. Roosevelt was required to give the
movement popular support, and to add one more
powerful
element in the population to the
growing number whith
./-
which passed the Act, or the
gress
farmers
to
f
movement so-called from
•"
as
steeped in the American tradition,
already been laid out by
istration.
outlandish
as
;•»
preferences within its local
our
the tariff route
Even before the New Deal
V
-v
secure
power.
provisions
or
government
New-Fair. Deal
In Sale of Federal Power
1937
history is not
worship of material things so much as a new idea as to
how these material things are to be
acquired by the in¬
dividual. Time was when, by and large, the individual
expected to have only those material comforts and pleas¬
ures which he
provided for himself. To be sure, there were
the fringes who were always on the alert for special favors
or
dispensations from government but mostly the emolu¬
ments of life were expected
only from one's own initiative, ingenuity and energy. Struggles for special privilege
assumed a relatively minor role in our national life.
How vastly all this has now changed!; A quarter of a
century ago or more agricultural elements which had
been traditionally against special tariff
privilege gave up
the ghost and moved instead to ask additional
privilege
for
i
The
Difference
The
contrast
Menace of Preference
shall contain
cancellation
purposes
^
assure
to
Federal
privately - owned
shall
be
limited
in
tion by the
lic
of
with
and
the
for
was
Continued from page 5 "
opportunity
benefits
tion
>
full
the
time
our
from
from the govern¬
power
project. Contracts with these
organizations shall recognize their
a
struggle among these various elements for an ever increasing share of governmental handouts. This state of
affairs, rather than a simple desire for more of the good
!
public
co-operatives
and
companies
more
;
ment
unsuc¬
and
more
(f),
foreclose
to
operate
agencies
in point.
case
forward and of¬
come
"(f) No contracts shall be made
security" was coined. The idea
popularity when Mr. Roosevelt adopted it.
The policy of "soaking the rich"—which should read soak¬
ing the successful, for it is less the rich than the successful
which feel the real burden—for the benefit of the
co-opera¬
And again in paragraph
mushroomed in
cessful in
public agencies and
fer to purchase the power."
"social
term
project,
tory objectives are not attained
by merely waiting for a preferred
spreading
that somehow society owed to certain individuals, or
per¬
haps to all individuals, something more than tjiey actually
earned for themselves. Minimum wages, pen&ons of vari¬
ous
sorts, sundry free services, and much more of the
same
general order were notions that had come to be more
or less
accepted as a "right" by a great many long before
even
a
organizatipji
tives for the distribution of power
in each project- area. The statu¬
to
The "curse of materialism" has
.
actively demanding more from society than they «- u„ "(a) Active assistance, from the
beginning of the planning
supplying or could obtain byv their own efforts di-*' very
and
were
Continued jrom first page
Thursday, June 10, T$>54
f
It has
do.
never
been authorized
so
.to
No money has been
appropri¬
enable it so to do, and it
ated to
is
not1
should
ment
appropriate that criticism
be made of the Depart¬
the ground that it has Aot
on
Volume 179
Number 5332
.
.
.
The Coinmercial and Financial Chronicle
fulfilled
obligations which it is
to perform."
Every time a move is made to
keep the functions of the Federal
procedure takes the place of prop¬
aganda.
In
the
May
3,
1954,
Government
sue
authorized
not
1'
field,
their
in
prescribed
"Electrical World" there appeared
article entitled "Preference Is¬
an
bills
the
keting
few, but well organized,
cial
beneficiaries
and by means of
become
spe¬
vocal
carefully planned
introduced
and
Senate
to
Rio
hearings
right
I
no oppo¬
these
hearings
were
closed, Clyde T. Ellis, Executive
Manager of the National Rural
Electric
Cooperative Association
submitted
V Mr.
or
statement which went
a
the record without
opposition
comment
-apparent
that
dynamic Federal
the
seems
heretofore
of
gram
the
developing
pro¬
coun¬
try's rich hydro-electric resources
and selling power in such a way
that the people get the benefits
is going down the drain, one li¬
amendment be
an
and
cense
contract at
one
time."
a
(Electrical World 9-21-53.)
Again, "Interior's new power
policy means 'less power for the
people, higher prices and further
vide
that
from
this
if any power is sold
project to non-prefer¬
customers, that it be sold by
marketing agency upon the
the
condition that the preference cus¬
tomers
such
shall
have
the
right
investor-owned
companies to the
form of organization of the power
distributors, but they do not
with
the
advocates
cows"
out
PUD's,
low
in
such
any
The antidote
fair play in taxes.
On
the
for
"It
Was
was
the
on
Judiciary,
criteria
keting
strong
tee
and
port
program
is
—
of
the
to
be
now
dismembered
stunted,
credited."
(Statement before Sen¬
on' the
Subcommittee
ate
United
starved,
and
dis¬
Judi¬
ciary, March 2, 1954.)
There
is
basis
no
proof
or
of¬
fered for these conclusions of the
witness,
the
but
just
same.
of those
ranks
ized
voice
familiar
in
the
advocating social¬
is that of Mr. Leland
power
Olds, who stated in the "New Re¬
public" magazine, Sept. 14, 1953:
"So
the
nation's
water
power
is to be turned back to the private
companies traveling under
power
Eisenhower
"The
sents a complete
"approach.
policy
repre¬
reversal of this
dp-
local
nomical
discrimination
expanding
public
Newly-organized
needs.
or
co¬
operative systems will apparently
be deprived of Federal power sup¬
ply altogether."
Again by Mr. Alex Radin, Gen¬
eral
Manager, .American Public
Power
'
"If
were
preference
no
clause, and if Federal
power were
sold at the dam site to those who
could
that
find
and
come
get it, we would
all
practically
of
this
would be going to the pri¬
vate power companies, with very
little
to
the
public
agencies."
power
Subcommittee Hearing,
March 4, 1954.)
(Senate
Again there is
advanced
to
proof or facts
the conclu¬
witnesses.
sion of the
these
no
support
of
cries
The list of
distress
at
being
Federal
power sources or at least being
required to share their place with
moved
80%
other
the
now
sumers
could
aside,
from
away
indefinitely,
of
the
electric
con¬
being shouldered
extended almost
be
but
be proven except
nothing would
the human char¬
acteristic—shared with
some
other
will
be
ments
and
conclusions
state¬
attempt
adversely to influence public
opinion and thereby the cause of
justice in the halls of Congress.
At other
times really smooth
of
cry
"un-
know
we
is
or
worth, all proceeds
therefrom to be paid into the Fed¬
eral Treasury.
If revenues thus
produced
preference clause
the
(R.-S. D.)
He succeeded in holding up
report
language
make
containing
the Ellis
Interior could
until
study and comment
a
"If the Ellis
it.
possibility
it would seem to ban
it can,
a
firm contracts for the sale of
any
Federal
power
first
to private utilities
power
industries.
lic
on
had succeed¬
move
ed, and there is still
that
into the
came
It
would
and
give pub¬
and
groups
continuing
Federally
co-ops
a
priority to
produced
This
establish
would
much
preferred
permanent title in all
for
the
customer
a
from
projects with the further
Federal
be
terpreted
of
not
power
having
to
pay
reserved until it could
resold
by the publicly-owned
distributors. The readi¬
and co-op
ness-to-serve
charge during the
waiting period would be paid by
the taxpayer. Nice going for the
public power boys but they never
hesitate
ask
to
or
demand
even
special privileges.
Considering the minority status
of the favored few, it is amazing
how preference in selling Federal
power has taken root and grown.
Perhaps
one
is
answer
will
be
the
low
equal
the
from
projects
erate
as
such.
The
co-ops
can
which
for
companies are
not and
cannot be even
loosely
organized
into
political
groups
having equality in government
power sales as their objective.
In
fact, the small part of the budget
represented
the
and
by the electric bill
good quality of service
tricity to
place outside the field
a
interest
pany
the
;average
com¬
r^A
consumer^Xny
corrective
approach
some
of
must,
other
therefore,
course
follow
which will
interest
to
the
customer
as
Recent opin¬
support this conclu¬
surveys
sion.
may
which
cated
are
can
and
appealing.
be
definite
principals
vigorously advo¬
whose fairness will
be
the
of
members
Board
son,
gust
Chicago: Walter J. Buhler,
Member; William E. Fergu¬
Thomson & McKinnon; Au¬
I.
Jablonski,
Floor
Mem¬
ber; Thomas S. Koehler, Floor
Member; Robert A. Podesta, Cruttenden & Co.; Myron F. Ratcliffe,
Bache
Co.
&
From
Cleveland:
W.
Yost
Ful¬
ton, Fulton, Reid & Co.
v...
With Stewart, Eubanks Co.
(Special to The Financial Chronicle)
C.
From
Roney,
Roney & Co.
Kansas
City: Frederic P.
Barnes, H. O. Peet & Co.
Milwaukee:
From
G.
Minneapolis:
McKendrick,
ated with Stewart,
Eubanks, Meyerson
& York, 216 Montgomery
Street, members of the San Fran¬
cisco and Los Angeles Stock Ex¬
changes.
Louis:
Edward
&
James F. McMahon Opens
BOSTON, Mass. —James
McMahon is engaging in the
curities
business
J.
and
cities repre¬
new
Board.
following
the
BOSTON,
1955
elected
Nominating
electric
to
nor
constitute
service
in
or
do
we
in
some
ask
this
is
U.
treatment
rights
of
should
not be
because
Joseph
securities
the
Mr. Conroy, a member of
Stock
Boston
formerly
&
Exchange, was
partner
a
in
Louis
Co.
Diversified Utility System
Company
and telephone services,
operates
electric,
of which
one or more
California, Oregon,
Nevada, Idaho and Wyoming. These five states experi¬
enced 47 per cent
cent
census
they
as
percent
—
increase in population in the most
decade, against
re¬
national increase of 14
a
and this growth trend continues.
compa¬
form; what
all
A.
under
ficient
a
business from offices at 653 State
Mott
California-Pacific Utilities
custo¬
either
other
that
S.
mem¬
come
how
suggest
themselves
voluntary investor-owned
nies
Mass.—M.
Conroy is engaging in
Street.
were
A Growing
these
customers
receive
the
TOTAL
ANNUAL
REVENUE
equal
law.
The
citizens
and taxpayers
adjudged to be de¬
they elect to do
business under the free enterprise
system instead of by use of tax
TOTAL REVENUE
favored or government subsidized
organizational mechanisms.
New York Stock
Exchange
Weekly Firm Changes
The
New
York Stock
Transfer of the
bership
to
of
Exchange
Gaines
Exchange
David M.
mem¬
Minton,
by
the
Exchange
1941
1942
1943
1944
1945
1948
1947
I
1949
I
1949
1951
Between 1939 and 1953, total revenues
E.
Davis
partnership
Jackson &
I
I
1951
I
1952
I
1953
in
Paine,
Webber,
Campbell
$603,000
from
appliance merchandising, tank
utility
sources rose
gas
sales and other
from $66,000 to $979,004.
Invest¬
California-Pacific Utilities Company
securi¬
offices
Spring Street.
and
$7,110,831. Revenues from utility operations
Calif.—The W.
Business
ment Co. is engaging in a
business
to
increased from $537,000 to $6,131,827, while gross
Curtis, June 2.
LOS ANGELES,
increased from
from
retired
W. Ross Campbell Firm
Glass
1940
on
June 17.
Ross
1939
Gwathmey, Jr. will be
considered
James
I
Jr.
at
Officers
712
SAN
are
Robert
Jr., Vice-President,
L.
McCourt,
and- John
R.
Glass,' Secretary-Treasurer.
/
F.
se¬
own
(Special to The Financial Chronicle)
is maintained in 67 communities in
mers,
his
Exchange, !-> N
partner in
he
was
formerly a
Louis P. Mott & Co.
A.
Committee:
availability, price
provisions.
To sum it all up, it is not our
purpose to work hardship on any
of
from
ber of the Boston Stock
Gard¬
City
Kansas
are
of
Arthur
Reinholdt
the
on
members
previously with
Joseph Conroy Opens
St.
The
was
Johnson-M cKen-
Detroit;
sented
He
Blyth & Co., Inc.
drick Co.
ner,
Calif.—Al¬
become associ¬
offices at 53 State Street. A
Edward
Slezak, Loewi & Co.
From
FRANCISCO,
bert B. Howe has
(Special to The Financial Chronicle)
From Detroit: William C.
Wm.
Co.
SAN
Floor
to
as
J.
Ainsworth, Metropolitan St. Louis
Co., Cleve¬
were:
From
H. Morgan Craft, President; C. C.
There
which
Other
elected
be
a
&
land.
contractural
relegates any problem about elec¬
of
Prescott
ination
of
the investor-owned
the
gas, water
op¬
customers
of
under
changes:
and
chard
citizens
PUD's,
municipalities
of
that there
has announced the following firm
political entities and
Vice-Chairman
citizens have to pay.
This should
be accomplished without discrim¬
and
Leslie
eliminated
so
American
benefits
Cleveland:
the
presently in¬
be
opportunity
for
Bur-
consumers,
as
should
the fact that the customers of the
are
elected
Board, succeeding Lloyd O. Bir-
everywhere in the nation to share
in
in
found
all
to
from Federal statutes
group
power."
very
justice
R.
Exchange, at the annual Fahey, Fahey, Clark & Co.
election of the Exchange.
From Minneapolis: Rollin G.
Bert H. Horning, of Stifel, NicoAndrews, J. M. Dain & Co.
laus & Co., Inc., St. Louis, was
From
St.
Louis:
Walter
W.
are
and
Case
John
Stock
Milwaukee
value
From
of the Board of the Midwest
man
From
$o\yer should be sold at mar¬
Chicago:
Floor
Thorson Chairman
all
ket
dick,
Member, Chairman;
Emmet G. Barker, Francis I. du
Pont &
Co.; George E. Hachtmann, Floor Member; William M.
CHICAGO, 111.—Reuben Thor¬
Martin, Floor Member; Sampson
son, resident managing partner of
Paine, Webber, Jackson & Curtis, Rogers, Jr., McMaster Hutchinson
& Co.
Chicago; was re-elected as Chair¬
Christophel,
South
privilege,
the
From
Midwest Stock Exch.
all the taxpay¬
not just those within the
magic circle of preference clause,
ion
special
of unfounded
and
profits"
For the sake of
ed
from
customers
ers,
ties
use
com¬
"hogwash."
citizen and taxpayer.
by
fair
conciable
animals—of squealing when pull¬
away
at
by each applicant. Rates
charged by the distributors sub¬
ject to state and local regulation
of
than
and
commercial
cis
those
Association,
there
retail
nodded approval when Sen. Fran¬
generating stations
their
meet
available
insufficient,
the
corporated into the report which project will require an outright
would accompany this bill to the. tax subsidy which should be dis¬
closed to the taxpayers who have
Senate floor.
"The
committee
had
already to pick up the check. In fairness
advantage
small
late
tation of the preference clause in¬
for power
own
matter
As requested by Ellis, Morse
to have the Ellis interpre¬
uneco¬
their
build
to
either
must
on
from
or
REA
and
higher cost power supply
competing private systems
pend
asked
purchase
(The 1946 Ickes directive.) Ex¬
isting municipal electric systems.
PUD's
tion.
or
interests'."
the alias of 'local
The
committee
that
point, Sen.
Wayne
(Ind.-Ore.) moved into ac¬
room.
Another
-
registered
they
full
re¬
last month.
"At
power
It
favorable
prepared.
the
to
Morse
States
the bill.
on
tentative
a
was
came
evi¬
are
held
were
approved by the subcommit¬
dences that the Federal wholesale
—
-
"Hearings lasting only 10 to 15
minutes
eral!"
March 2, 1954.)
And again, "I therefore, submit
that Interior's new policy and mar¬
of
pensatory prices in proportion to
in the Senate that the 'the number of rural, Residential
suggestion was nearly adopt¬
by the Senate Public Works
economy
"Subcommittee
all
sales contracts:
the
of our country in gen¬
(Statement before Senate
since
is
from Federal projects with¬
subcommittee.
to
and
allocation
an
ers' electric co-ops and power dis¬
particular
side
this
stand
equal under our
government, fair play again calls
and
in
positive
to
citizens
served
tricts
government
freedom and
tax
system.
ed
mo¬
of
prefer¬
type of public ownership
whose target is a socialized power
Ellis
company
other
the
nopoly—a body blow to the farm¬
power
"sacred
clients, the
inadequate cost allocations is the
motivating force in the hands of
the champions of preferences and
out
clauses'
to
agree
profes¬
making
price
due
the
their
co-ops
The
withdrawal
upon
of
of
and
distributors.
ence
to
power
efforts
sional
power
power
the
few:
a
paid by the preference customer
—or by
TV A—is made up out of
tax money paid in part by the
people of your community. If they
knew this and were given an ap¬
proximate idea of how much it is,
they would not like it.
No objection is made by the
showing a need
in the future, and
that this right i shall be protected
by
the
so-called
'recapture or
for
encroachment of the already over¬
whelming
pro¬
enumerate
me
The deficit in the power bill not
power
"First that if
ence
Let
Ellis
testimony.
asked:
adopted to the bill it should
"It
_
Dam
Brief
.
"After
into
said,'
mar¬
the whizzer and
came
quote:
the following are typical:
Clyde T. Ellis, Executive
Manager of the National Rural
-Electric Co-Operative Association,
House
River.
held with
were
sition. Then
the
provide for
Falcon
Grande
demonstrations have thus far been
successful
in maintaining
privileged position.
When
the Power Policy was enunciated
by the Secretary of the Interior
in August of last year, it was met
wiA screams of dismay of which
into
from
power
the
on
their
-
Debated," which refers to the
equalize the benefits
among all citizens and taxpayers,
to
or
47
(2571)
FRANCISCO
from
non-
P.
48
The Commercial and Financial Chronicle
(2572)
Continued from page
Another fundamental misunder¬
4
standing among many of our peo¬
ple has been that social security
taxes are a form of saving being
Government's Role in
seeking
those
of
create their own
opportunity to this question.
betterment, ,and such old-age
the individual who
also protected
seeking his own
security
through productivity and savings,
These principles
did not mean,
was
however, that there should be any
lack
of interest,
sympathy and
help for those who suffered from
hardship and want.
Indeed, the
noblest motives of mankind have
the purpose of
or
relieving destituour
great
spiritual
always embraced
preventing
tion.
And
out in connection with
We cannot consider
benefits by them-
ability brought
selves. They are part and parcel
of our whole econ°niy+ and
changes m one will affect the
other. It^is obviousthat ^ our
leads to inflation whic
depreciates the dollar, then
same dollar pa^onts for
- g
benefits will ^ meffwtive in
economy
furmsl^
Sain,1"!™, itrSlliS'"."
As
means
a
hardship, voluntary insurance has
provided
Interest
the
a
of
great service in the
the public.
It avoids
governmental
it gives tjie individual
compulsion
measures,
of
free choice to suit his security to
>is individual needs and desires,
it relies in large measure on
sav-
them-
y
.r
0pghas
and I would .Bo «»gtable
n
of guarding against
We cannot
aged, for ex-
money.
to
distribute
the
the financial means of
purchasing goods beyond what the
production of industry will proyide
If we should attempt to, do
SQ
infiated prices caused by excegS demand for goods would rob
the cash benefits of much of their
vaiue>
if we consider the nonample
ings rather than current taxation
for current benefit expenditure,
to keep
them from want in old age.
Des-
X>ite the dangers involved, it was
generally felt that the time had
come
to deposit the problem on
the Federal doorstep.
The idea
of a Federal system, systemati-
worker in his
the
of
In effect we have set up
sufficient
for
present has risen to 4%—2% from
the employer and 2%
from the
incr0ase |n benefit level can read-
about 8%
possibly 10%. Necessarily,
figure is uncertain since
ily rise eventually to be
the
old-age
benefits
minimum
support,
certainties.
again
repeated
since.
and
depends on many unThese
when, say, an older bene¬
ficiary, having paid $150- in taxes,
Essentially the OASI system
operating
as
a
is
pay-as-you-go
plan with a moderate contingency
fund available to act as a buffer
to cover any temporary
benefit
payments
ceipts—an
occur
in
excess
over
excess
tax
of
re¬
such as might
business recession. To
a
upproval.
centives
and
taxes
As
on>
so
elderly to retire,
go
as
up,
necessary to
benefits to their fellow citi¬
pay
zens
benefit
the
on
rolls.
The
active workers now covered under
for periods of no
Still further reasonable ch^ges
the
OASI
proposed
are
the
governing
provisions
retirement
in
his income
crease
much
as
he
as
after age 65.
can
these
All
changes I have been
discussing
would
useful
more
nishing
as
a
OASI
make
of
means
fur¬
floor of protection for
a
for periods of no
administration
the
be
freed
Unsound Proposals in H.R. 7199
The chief unsound proposals
in
those which would
increase maximum benefits out of
tion range.
the
I
am
proposal
to
floor-of-protec-
thinking here of
again liberalize
the OASI benefit formula,
partic¬
ularly as it applies to those at the
higher wage levels. And I am also
thinking of the proposal to take
account, for benefit and tax pur¬
of earnings up to $4,200
instead of $3,600 a year.
*
poses,
year
liberalizations
Past
sufficient
have
a
been
increase benefits
to
ac¬
tually beyond what has been the
proportionate increase in consum¬
ers'
my
(1) We have been moving into
age of renewed emphasis on
an
security-seeking through
mental
govern¬
trend
means—a
which, if
high¬
whole econ¬
ly
dangerous to
our
omy.
(2) Most of the dangers of
cessive
security-seeking
mized,
and
and
if
insurance
much
voluntary
no
possible
as
as
the
on
means
asked is, how far should
this
sys-
tem go
in providing benefits? For
much of a man's security
tiow
should government take responsi-
bility?
Unless there is
to
can
this
sound
a
question—one
we
firmly adhere to—social
se-
answer
curity
is
almost
certain
be
to
(3) For these and other reasons,
security benefits should be
maintained
at
a
modest
floor-of-
protection level.
(4) The pending social security
proposals which would operate to
strengthen OASI as a floor-ofprotection system merit support;
but the proposals which would
break away from the
floor-ofprotection
principle are highly
dangerous indeed.
Finally, let
confidence
We
me say
in
the
I have great
good
sense of
people.
Once the
the
basic
issueSi
social 'security, I feel
American
grasp
by
wise decisions will be made.
are a
generous people; we will
put the aged, widows, and de¬
pendent children
on
starvation
not
rations.
good
But also, we have enough,
that we will not cut
sense so
down the
living standards of selfsupporting people in order that
excessive, unneeded, or incentivedestroying benefits may go to de¬
pendent
elements
in
the popula¬
tion.
The spirit of looking for
oppor¬
tunity—of seeking to better one's
self—is still quite alive in Ameri¬
And I believe the American
people still place a high value on
the
right
to
spend
their
own
ca.
money as
they choose.
clear
the new proposals
clearly beyond the basic
principle we must cling to, and
clearly invade the area in which
private savings, insurance,
and
contrast,
would go
pension
plans
should
The
mqst cogent answer I have
comes
from the pen of Lord
Beveridge, when he wrote:
«
,
.
in*/
'
nsurance
for
6
more
subsistence
should
.
compulsory
needed
than
is
is
an
should be confined to a subsistlevel>
n°t attempt to melude provision which can and
e,nc®
unnec-
with
in¬
more
in contributions
tion.
That
means
or
taxa¬
departing
from
the principle of a na¬
tional minimum above which
in
reiief
J
of
for
measures
which
need
are
special
more
properly administered locally by
municipalities and states.
Misconceptions About OASI
A dangerous
security
in
United
review—as
We may well take those words
to heart.
A
few
can
Beveridge
the
proposals for amending
OASI, now pending before Cougress in the bill, H.R. 7199. I will
begin with the proposals which I
believe merit support.
States,
I
fully realize
be
said,
given,"
"only
as
by
taking more'" The nation simVly
does not get something for noth-
other
points should
be
ing in social security.
let
illustrations—some
of
First
is
the
proposal to extend
OASI coverage to some 10 million
think, is that the American people jobs not
"More
security
With these thoughts in mind,
us
have not yet come to
that
inherent
operate.
and certifications necessary
all
pressures
rates
simply
plan
Injustices de¬
of the nation's
working force is under the system
and a part excluded.
Similarly,
if
a
part
no
rise
indictment of
is
one
thing
sharply.
I mean
people. It is
our
common sense to
recognize
the fact that people mostly act in
their own interest where there is
a
legal right to do
All
the
of
if
seem
efficiency of OASI is impaired
large numbers of persons are
there
subjective side as well. In times
when
good
jobs
are
plentiful,
rates of disablement are very low,
but when jobs are scarce disable¬
ment
admitted at all.
If
is no simple problem of objective
physical measurement. There is a
if the social purposes of the
are
complaints and
against adverse deter¬
minations.
the
the
RED
CROSS—
of
which insurance companies know,
it is that determining disability
now covered.
This pro¬
posal is reasonable and desirable
velop
sorts
Your
under
this proposal is to open Pandora's
box. Coming out of the box would
be
money
Lord
expansion
government
any
citizens
shall
spend their
freely and adopting
instead the principle of regu¬
lating the lives of individuals
by law."
-
Desirable Proposals in H.R. 7199
thing about social
the
over
scheme.
s|Qn pians> individual savings and
b
cases
interference
essary
dividual responsibilities. More
can
be given only by taking
be made by private pen-
toward
so
proposed
law relating
new
to
sections
disability
quite unnecessary in view of
to
social
break with the floor-of-protection
or subsistence principle.
generation of active workers
proposal in
pay? If they do, can we obtain
to pay the taxes out of which the pending bill would leave out
such an increase in individual the retirement benefits will come. of account, in
determining bene¬
production as to maintain existing
It is important that these facts fit
eligibility
and
the
benefit
price levels? These are pertinent and these relationships be under¬
amount, any periods in excess of
questions and grave questions, stood for otherwise we cannot six months in which the
govern¬
The fact that they exist should treat intelligently the recurring ment adjudicates the individual to
caution us to adhere closely to proposals to amend the OASI leg¬ have been totally disabled. To
Lord Beveridge's injunction, islation and avoid the tendency start on the medical examinations
which I quoted, that benefits
pushed too far.
seen
they will with no
as
security.
further increase the
system must look for their Such a- shift would have fartion—and it is clearly here to stay in general benefit levels, will inold-age benefits, not in any large reaching effects.
With no prin¬
—It is incumbent upon all of us dustry recoup by raising prices,
measure
to the Trust Fund, but ciple remaining to adhere to, very
to understand what is involved, will
worker press for higher
mainly to the willingness of the serious dangers would lie ahead.
The first question that should be wages to maintain take-home
next
Another undesirable
Now that the plan is in opera-
be
savings
relied
are
The system now pro¬
vides more adequate benefits than
it ever did before. However, up to
this time there has been
ex¬
can
avoided if the role of government
as
the security-provider is mini¬
prices.
In
ex¬
Conclusion
posed
security.
or
will
turmoil
conclusion, let me sum up
remarks in four short points:
sure
the subsistence
OASI
additional
In
yond the range of what is needed
are
of
vexatious
pense.
people
7199
from
substantial
and
the
H.R.
earnings, what¬
the particular cause for the
lack of earnings. Substantial jus¬
tice will thereby be done.
And
ever
all, but none of them would oper¬
ate to push maximum benefits be¬
to furnish basic
earnings, and I
trust Congress will be content to
let that proposal suffice to care
carried to extremes, can be
test—the so-called "work clause."
proportion of the
tributing the taxes
population at elderly ages, the inthe
periods.
together with $150 from his em¬
While some work clause is abso¬
ployer, receives an old age bene¬
fit worth $15,000 he says "Social lutely necessary, if social security
funds are not to be dissipated in
security is a wonderful bargain."
providing
needless
benefits
to
People do not stop to think that
regular employment,
the remaining $14,700 must come, persons in
the work clause should not operate
in one way or another, from their
to interfere with casual employ¬
fellow citizens in taxes.
On the
ment or to induce people to with¬
contrary, they are apt to say,
draw from the labor market. The
"Let's have more of this cheap
"work clause" provisions in the
insurance."
bill might be improved somewhat
And that brings me to the point
with the objective of making it to
that such use of the word "insur¬
the individual's advantage to con¬
ance"
is
very
objectionable to tinue to be
productive and to in¬
those in the insurance business.
changes in the
to
such
of
again
No wonder, therefore,
that
employers, had great popular appeal and met with widespread
:
bill
Thursday, June 10, 1954
the proposed "drop out" provision
work in
reason
been
uncertainties
put it another way, OASI is a sys¬
4»nd maintained by special taxes embrace employment conditions,
tem under which the active work¬
t*aid by active workers and their wage ievels, changes in longevity,
ers and their employers are con¬
Danger Ahead
the
in
when
riods
crued liabilities.
or even
proposal
they were unable to
regular, full-time enplovment.
This so-called "drop-out"
a savings account for the old age
proposal will largely prevent in¬
of the worker."
adequate benefits in the future by
This
same
misconception has
benefit
the
old age.
The tax rate at
takes.
it
wbich
top
the result
providing
-eally
Another
contributes vidual's benefits) the four years
of lowest earnings or of no earn¬
one dollar of premium for every
Many OASI beneficiaries
dollar of premium contributed by ings.
the worker; but both dollars are have had their benefits sharply
reduced
because of limited pe¬
held by the government solely for
'
sources,
job to job.
"Here the employer
empi0yed population as a whole,
it is fundamental to the preven- The words "social insurance" slip
and it avoids forcing one man to
tion
of
hardship that inflation
easily from the tongues of many
provide another man's security. be avoided and that production be
people, but the word "insurance"
Thus it avoids the temptation to efficient and in large volume. Any
suggests an individual equity re¬
repeated liberalizations which measures
that
seriously
lower lationship which simply does not
can
be made in public measures
productive efficiency, or reduce exist in OASI. Neither is OASI
and which, as I brought out, can the volume of production, are thus
based on commonly accepted in¬
ultimately destroy everyone's se- the
very
negation of welfare surance principles.
curity.
From another point of measures.
Moreover the incorrect impres¬
fewbe
seen as serving
Qne
the great dangers in sion that OASI taxes are insur¬
both the individual who seeks opdeali
ith the level of benefits ance premiums
or
savings has
portumty and the individual who .g tha® it .g politically attractive
doubtless misled ihany into think¬
aeeks security.
t
increase the formula for beneing that the government has suffi¬
Despite the advantages of vol- fU and tQ emphasize the expectacient money stored up to meet
wntary insurance over govern- tf greater benefits in the fu- the benefits becoming payable in
ment-provided compulsory social ture rafher than to stress the
the future from wage credits al¬
security, it is understandable why greater taxes that will be necesready acquired. The uninitiated,
the provision of old-age benefits °
in
the
future to
pay for when told that the OASI Trust
was enacted
by the Congress in theJn
This is the easier to do Fund holds some $19 billion in
1935.
The great depression of the
becauSe the rise in the tax rate
government bonds, may have such
1930's showed us that industriali- is
considerably deferred due to a belief strengthened.
Little do
zation and urbanization had made the full
weight of increased bene- they realize that some $200 billion
it increasingly difficult for many
fits bejng deferred.
But in the would be needed at the present
wage earners to count enough on end the g0vernment has no benetime
to cover the
system's ac¬
their savings, or to draw enough fits to
give except from the taxes
belp from other
and out
into
system as they change from
up
for the future and that seems reasonable, and in fact
guaranteeing their future bene¬ beneficial, is the idea of dropping
fits. In 1936, when the plan was out
of
the
"average
monthly
initiated, President Roosevelt said wage"
calculation
(and
hence
in a campaign speech:
from the computation of the indi¬
ever
other hand, old g
pushed ^toolig,
sel.ves be the ca
and aspiration.
of the
stored
Providing Economic Security
fostered the incentive and
continually moving
...
must carry
onl
yolume 179
Number 5332
...
The Commercial and Financial
Chronicle
Continued
Our
Reporter
Governments
on
By JOHN T. CHIPPENDALE, JR.
A
Gulf, Mobile & Ohio
One of the lower priced
equities
that has been attracting consider¬
ably
attention at advancing
more
prices
recently is the common
Gulf, Mobile & Ohio. Last
stock Of
week it sold into
for
high ground
appreciably
top. Apparently
new
the year but' still
below
the
many
analysts
pressed
1953
have
been
im¬
with the recent improve¬
ment in the traffic trend.
Through¬
benefits
growth
is still
car
loadings along the southern
lines of the system have been well
maintained but business north and
west of St. Louis
This
was off sharply.
particularly true of the
was
Chicago
attributable in large
area,
measure
the rate
to the
sharp reduction in
of steel mill operations.
The rate of decline in
load¬
car
ings accelerated month by month
during the opening months of the
year, reaching a peak of 16.2%
for the month of April. Since then
the
going
important
iron
ore
was
level
of the
1953
period.
While
it
is
only
like
still
from
these
most
recent
figures,
there is considerable
feeling that
the worst has been
from
here
earnings
in
and
that
revenue
and
seen
both
comparisons
much more cheerful
will
make
reading than
those of the first four months.
Fundamentally Gulf, Mobile &
Ohio has long been considered to
be in
a
strong traffic position.
Over
period of
a
erty,
which
purely
local
dependent
on
years
the prop¬
originally
a
largely
was
carrier
,
agriculture and the
lumber
industry, has been ex¬
panded by the judicious acquisition
traffic
One
sources.
through
Mobile
to
Bir¬
'
improvements
to
roadway
Mobile & Ohio is
entered
in
that
at
of the most
one
the
select
country.
It
of rail
group
Among
figure of 28.6% last
the major carriers
St.
Louis-Southwestern,
only
Western
the
a
Pacific
coal
better
this
and
carriers
one
were
two
or
able
to
showing.
While maintenance outlays have
been
high, in line with the com¬
pany's program of improving the
property and equipment, the road
last year was able to
report earn¬
ings
of
somewhat
better
than
$7.00 a share. As mentioned above,
traffic
off
was
sharply during the
first four months of the year, and
maintenance
expenditures
were
kept to
relatively high level. As
a
result,
net
income
was
off
nearly 40% and common share
earnings dipped to $1.65 compared
a
with
$2.96
ily, which ordinarily
activity.
•
be
means a very
..
.
liquid government issues is as sizable as ever,
and for the moment there appears to be no
let-up in this pressure.
are still on the easy
side, and with some minor help
from the monetary
authorities,
ket could be relieved.
a
year
likely that 1954 results
it
seems
as a
whole
of Mexico and with lines to Kan¬
City and Birmingham. It has
participated
completely
in
the
sas
adequate protection of
the regular $2.00 dividend and, in
the
opinion
of
many
analysts,
might
well
justify repetition of
$0.50 yea^-end extra.
last year's
Nationwide investment
making
commitments
Inc., reoffering
new
issue of 3.40%
amount of
comprising
group
than
more
50 members and headed by Blyth
It
buying.
concerns
been
seem
bit heavy
a
to be
willing to let out the near-term obligations
in order to get a larger return in the
notes have been
cates and
Savings banks, although in
Turnpike
ered in the
Co., Inc. was awarded on June
in competitive bidding, $38,500,000 Commonwealth of Ken¬
bid
a
Turnpike
was
ing
bonds,
revenue
The group's winning
98.35% for bonds bearing
1954.
3.40%
interest
net
a
rate, represent¬
interest cost of ao-
proximately 3.4765%. The bonds,
due July 1, 1994 are being pub¬
licly reoffered by the group at
100%
and accrued
The
bonds
the
nance
were
interest.
issued
construction
have disposed of
tions. Corporate
fairly sizable
to
of
scale
of
have
not
the
Kentucky
been
projection of
from
103%
They
to
are
the
Equitable
Securities
The-First
Boston
It
is
indicated, however,
un¬
Payment
lien
on
on
of
principal
Elizain¬
and
the bonds will be
a
prior
the gross revenues Of the
Turnpike, coming ahead of main¬
Corpora¬
Corpora¬
jected
earnings,
according
engineers' estimates, indicate
good
coverage
to
an
for
the bonds.
This estimate of coverage is on
the
basis
of
the
Turnpike's
con¬
out of the 3%s of
The
Alex.
Bankers
Brown
Hilliard
&
Co., Inc.;
Sons; J. J. B.
John
Nuveen
&
& Co.: Bacon, Stevenson
Co.; R. S. Dickson & Co., Inc.;
Estabrook
or
&
Son;
Bond
Hutton
&
connecting highways
Beane;
Co.; Paine, Webber, Jackson &
Curtis; Almstedt Brothers; W. E.
&
gan
&
to take
ness
out-of-town
-
doing
a
Bonds
earnings.
showing inclinations to
1978/83 into the longer-term 2%s.
a
demand
General
good, and except for
seasonal fluctuations, is expected
to increase, particularly as a re¬
sult of new sales policy. Medical
of
bananas
dilfcfc.
in
for coeliac children has made
of
use
many
daily
commonplace in
bananas
homes.
Additional interest¬
ing and varied ways to serve ba¬
nanas, highlighted by menu plan¬
ners
in women's magazines and
increase consumption
point to a new demand for
newspapers,
and
age-old fruit.
Standard Fruit & Steamship Co.
stock
common
is
listed
the
on
New Orleans Stock Exchange
and
also traded in the Over-the-Counter market.
F. Bleibtreu Firm
Anniversary
F. Bleibtreu &
Street,
Co., Inc., 79 WaR
City,
York
New
exchange
specialists,
their
anniversary
20th
For its
first
poration
seven
acted
as
foreign
celebrated
June
years
the
special
cor¬
repre¬
sentatives in New York of Banquer
de
TUnion
Parisienne,
of the
one
leading French banks.
In reqent
its activity has been prima¬
concentrated
problems
small amount of switching
ones
sells about 3.7
stock
common
times
years
,
resulting
conversion
on
from
the
fi¬
nancial upheaval following
War
II.1
It is
fair amount of stability to
they have shown the willing¬
certain of the 2V2% bonds which have come into
on
the market for sale.
U. S. TREASURY]
Also, it is indicated that the prices at which
these bonds have been obtained have been considered to be favor¬
able, since there has not been
very
much in the
way
of supporting
f
STATE
and
bids around for these issues.
MUNICIPAL
Life Companies Sell on Balance
Life insurance companies, according to advices, continue to be
sellers
on
balance
far
as
been allowed to mature.
sales
of
the
longer
been of important
as
government securities are concerned.
On the other hand, there have been some
maturities but these
size.
SECURITIES
instances, when money is needed,
disposals have not yet
It is evident that the life insurance com¬
panies still have enough private deals and corporate issues avail¬
able to them
the
of
so
that they will not be interested
in the buy
side
government market for some time yet.
Lower Reserves Still Awaited
tant
there has been
in
financial
there will be
tant future.
will
the
come
a
certain amount of cooling off as
Even though
far as changes
requirements of the commercial banks are concerned,
reserve
the
policy continues to be one of the most impor¬
topics of conversation in the money markets.
Co.; First of Michi¬
Corporation, and Stein Bros.
Boyce.
the
government obligations.
distant maturities because
more
Federal Reserve
nection with
existing highways.
Any improvements made to feeder
of
and the balance coming from
evident that these funds have given
the
Co.
roads
or
&
W. Press-
Company;
B. J. Van
Ingen & Co., Inc.; White, Weld &
tenance and operating costs. Pro¬
exceptionally
that certain
in this classifica¬
minor commitments in the Vit's,
money
Short-term issues have in most
Lynch, Pierce, Fenner
Phelps, Fenn & Co.; R.
prich & Co.; Shields &
Smith, Barney & Co.;
terest
some
this being new
re¬
in
bethtown to Louisville.
declared.
present market prices (27%>
principal
otherwise
tion; Goldman, Sachs & Co.; Harriman Ripley & Co.,
Incorporated;
Kidder, Peabody & Co.; Merrill
from
amounts^of the longer-term obliga¬
available for investment with the larger banks
consid¬
revenues.
Principal members of the
derwriting group include:
tion;
At
the sell side of the market
with mortgages seem to be taking the bulk of the funds that are
deemable after June 30, 1960 at
prices ranging from 104 to par.
fi¬
the
the participating preferred and
the common $1 per share, the
20th
bonds, preferred stocks, and common stocks along
also, with both the private and public
The bonds have a sinking fund
provision, effective July 1, 1958.
Sinking fund redemption prices
amount.
participating preferred stock
outstanding which is callable at
$110 and 264,504 shares of $10
par common stock. Dividends for
the year 1953 were $4 per share
ac¬
though there have been instances in which these institutions
Pension funds appear to be
"Initial Turnpike," a portion of
the projected Kentucky turnpike.
It will be approximately 40 miles
length, extending
on
$5,-
instances so that
switching mood, have not,
a
being
to
to 1 $2,875,000.
There
106,234 shares of $3 cumula¬
Savings Banks Mostly Inactive
switches out of short-term
obligations at
terminals
8,
tucky
many
Certifi¬
the 2V2S which are available under the 100 level may be taken on.
with part of
the ultimate completion of pro¬
posed turnpikes with the north or
&
series
longer-term issues.
disposed of in
amounted
tive
an
also reported
is
current
amounted
were
prescription
that certain fire and casualty companies,
on the liquid side, have shown a
tendency to stretch out maturities. Yields on certain of the more
distant governments appear to be approaching levels where these
par.
south
the inter¬
adidtion, the 2J/4S of 1959/62 seem to have appeal for cer¬
tain of the deposit banks, with indications that most of these
purchases have been made by those institutions which have rather
sizable savings deposits. Other banks, according to advices, have
been picking away at the eligible 2lks with the bulk of this buy¬
ing being done in the September 1967/72 maturity. There has
been however, scattered purchases in the 2V2S that mature from
18-32/67 through 1965/70.
move
A nationwide investment bank¬
both
In
which have
with the
to
923,960 and book value was $69.31
per share compared with $29.50 in
1943, ten years ago, reflecting a
constant growth in equity. Longterm
<iebt at the end of 1953
rily
revenue
Cash
1.
dividends
Although the 1 % % due
2/15/59 appears to be the leading issue in these purchases, it is
indicated that the 21,£s due 12/15/58 have also come in for a fair
headed by BIyth & Co.,
group
price of
ing
in
Pension Funds Bolster Long
banking
to
assets
participating
preferred
sharing
equally with the common in any
mediates and the longer-term Treasuries.
tion.
Bonds Marketed
3.6
for bananas is
been
j
of Dec. 31, 1953
as
institutions
savings banks have made
$38,500,000 Kentucky Turnpike
liabilities
the
more
than
current
Despite the strong demand for the near-term government
issues, there is a not unimportant amount of maturity lengthening
being done by the commercial banks. According to reports, these
a
complete through system
running from Chicago to the Gulf
of
ratio
on
Maturity Lengthening Underway
have
2
page
of the company is strong,
on
it
be held to $5.00 and
be higher. This would afford
jrom
The Secnrity
I Like Best
money mar¬
ago.
favorable
more
the indigestion in the
cording to reports, been too much
is
.1
„
Interest rates
even
they
,
.
The demand for
will at least
when
to
in a rather important way
despite the big play which is being
given to the short-term securities.
may
railroads
appears
being moved about very read¬
thin market without too much
■,
in financial difficulties. Now
other
money mar¬
However, in this instance, there has been a fair amount of
activity resulting largely from switching operations. There has
also been some rather sizable trades
reported, aside from the
swops, even though this has brought about slightly lower quota¬
tions than had been prevailing.
Lengthening of maturities is going
With in¬
dications that future comparisons
will
are
were
of
a
indigestion,
prop¬
carriers with transportation ratios
below
30%
in
1951
and
with
further improvement since then
year.
normal amount of
middle and longer-term issues
erties. With respect to
transporta¬
tion
costs
the
record
of
Gulf,
impressive,
a
carving out resistance levels from where there could be favor¬
able developments in the not-too-distant future.
Prices of the
on
ations, another element of strength
in this situation is the
high degree
of operating
efficiency that has
been
attained through complete
dieselization and through capital
too
early to draw definite conclusions
this
as
Aside from the traffic consider¬
of
traffic
and
it is expected that
on
new
mingham.
are
below the
south
just getting under
way,
and which
should expand
rapidly during the balance of this
year, is the movement of import
arrived
available,
industrial
of these that is
year
to
year
comparisons
have been improving steadily and
by the week ended May 22, the
latest period for which statistics
1.5%
the
the
than
more
be
the road will continue to
open up
out the
period of general economic
readjustment it is understood that
of
highly professional government market, and
ket, with
from
4Q
(2573)
district is
a
still
as
strong as ever in its belief that
lowering of these requirements in the not-tco-dis-
The
new
fiscal year is not very far away and with it
the need for borrowing by the Treasury.
answer
as
to what will
happen to
reserve
This will give
requirements.
Aubrey G. Lanston
& Co.
INCORPORATED
15 BROAD
ST., NEW YORK 5
WHitehall 3-1200
231 So. La Salle St.
45 Milk
St.
CHICAGO 4
BOSTON 9
ST 2-9490
HA 6-6463
50
(2574)
The Commercial and Financial Chronicle
Continued
from
feeling
17
page
At
We Can
familiar to all who read about
atomic
Zirconium,
energy.
bis-
muth, hafnium, and boron are
emerging in our atomic energy
.
vocabularies.
What
these
quirements
nuclear
new
will
do
re-
the
to
eco-
nomics of many chemical elements
be
interesting
"Clues"
to
First, the physical plants today
are valued at approximately five
billion dollars. In addition, there
six billion dollars ininventory and experi-
are some
vested in
on
temporaries
be found in
can
unique
properties of
tron-source materials.
these
the
neu-
First, the atoms which package
these neutrons provide a concentration of energy on a scale that
L dSicult
to
comprehend
We
speak of one pound of uranium
being worth roughly three million
pounds of coal.
is
true
be-
the neutron unlocks the in-
cause
side
This
of
the
atom
and
produces
amounts of energy that
available from the burn-
enormous
not
are
physicists
scientific
sound
explanation for this great energy differa
In
ence.
volts,
their
world
chemical
of
electron
transformations
measure only a few electron volts,
The splitting of an atom registers
millions of electron volts of en-
The layman may not comprehend this tremendous increase,
ergy.
'
but
the
scientists
have
already
learned how to put it to work and
to
it
use
in
°gy*
nuclear technol-
our
:
has °Pened its doors to Private
customers.
Wh<sn we turn to the raw-material Situation on which this new
industry is based, we are equally
dustrial
and
new
problems
complex
the very existence of these
trons.
New kinds of health
ards must be guarded
We
are
in-
created
are
by
neu-
the North and South
American Continent.
us. ln
total
most 15,000 trained American citizens who work in these laboratories.
The
atomic
weapons.
When
we
with
facilities
the
of
find
that
this
total
effort than
represents
the
a
combined
about
its
inherent
leading scientist at
concern
dangers.
One
great Eastern
a
?thdiAted "WholMale
v
i
Avenue
j
we
versification
private
think of the great diof interests of our
industrial
corporations,
being
and then compare the effort
solely toward the
atom
and
its
use,
of
the
peace-
get
we
a
in
in
echo
lar
th»
Sen-bomb tests
f
recent
in
and
ship them
that
do
we
in
barrel
a
these
neutrons
stnnps
nf
Thlre
mere
tries
the
same
of
way
Yet
corner-
ocro
!
I
many
arp
are
that
important to
facilities
are
communication fields
depend
No
a
largely
us
we
radio
on
now
waves,
has yet been able to find
of packaging this commodIn the world of today we live
tion
feel
It
many
gadgets
through
nor
means
which
func-
neither
we
see.
takes
imagination
to
talk
sive relation
For
j
ment
understand
very
it.
real
They
in
are,
terms
of
scientific time.
In future time,
neutrons will appear in our industrial cost
predecessors
a?; ?
worth
m
;
today?
at
some
in
this
reasons
is
in.
the. $6 bl]'10n '"Vest~
inventory and
experience,
of
its
the energy field,
bound
up
with
new industry
political, mili-
tary and economic problems of international importance.
There
that
are
people who
today
bombs have
the
say
take
component
a
look
parts.
the
for
There is still
years time.
In the hydrogen age
this saving of time may well^save
the nation. ■
^.
p-did
not
advocate
"crash"
a
Which, would»waste
program
the
is
better
a
VI
ti^e)nuclear powe^.
*
rivals"
not
are
"™^^iearp^
the best way of
to
the
largest number
of
people,
before the Congress.
In addition, there is
a
now
growing
"out" for the steel consumer.
Dress
new
"token" wage package.
a
^.j": '
sales in May paralleled
car
v
Anril's nine-month
of 1954 in that week.
>
~
-
-
>
.
,
May sales at the 490,000-unit level
"Ward's" placed
;
510,000 during April.
against
\
however, that because of May s
The statistical/ agency added,
selling day, sales over the two months averaged to
almost identical 19,600 daily. The rate in March was 18,200.
one,less
<+
an
r ;
leveling off in demand, according to "Ward's'-',
has prompted, speculation that peak monthly sales for 1954 has
already been established. It added, however, that the factories
remain optimistic regarding prospects for their third-best yearly
-output in 1954.
1
„•
v
Domestic dealer sales, "Ward's" explained, represented 99%
of the cars shipped to them in April, 97% in March and 94% in
This apparent
,
,
v
.
The
February.
figure
May
domestic dealer stocks of
at 99%.
As a result
have increased only 10% since
estimated
is
cars
new
the end of January.
The reporting service counted a 21% decline in United States
production this week to 111,588 cars and trucks from 141,089 last
week. It noted that while the decline was due to the Memorial
holiday Monday, Dodge, DeSoto and Chrysler worked only three
days, while Kaiser and Willys were completely idle and Pontiac
showed, an unexplained drop.
Meantime, Ford again scheduled
Our country
already
pos-
sesses a multi-billion dollar atomicinheritance in manufacturing fa-
cillties and trained personnel.
(3) The future
this
(4)
must
all
power potential
new industry is enormous,
We must go forward.
We
the
use
American
pattern
proven so successful
in
industry.
our
Americans uncompetition.
We have
never had any sympathy for monopoly — even Government mo-
nopoly!
(5)
All-out
from
stems
tivity
—
atomic
basic
one
the
strength
atomic
production, of
ac-
these
neutron-source materials. As
new
this industry grows and our basic
industrial atomic capacity grows
larger
reservoir
our
of
national
strength for atomic weapons and
peacetime nuclear power will both
emerge
from
the
same
parent
plants for assembly last Saturday.
Steel Output Set at 2.8% Above Previous Week
;
Steel production continues its moderate
uptrend, says "Steel,"
metalworking. In the past week "Steel's"
of capacity, highest level since late
February. That is an increase of 0.5 point over the preceding week.
While ingot output is still around 30 percentage points below
this time a year ago, operations currently are on the upgrade,
whereas a year ago they .were beginning to decline to the lower
levels prevailing for the last 12 months, states this trade journal.
The improvement in ingot output stems from continued com¬
pletions of inventory reductions of steel and the generally
The
neutron
take
their
source
materials
place alone with
other basic commodities. These
old-Iashioned
macje
national rate edged up to 71%
commodities
the United
in
country
States
the
world
leadership" in
years
ahead
rirh-
world.
the
well
mav
have
the
Our
'difficult
rest
on
these neutron-source materials
It is of key importance that
business. ' Practically
none of the strengthening
buying against a steelwcrkers' strike, it
adds. The slightly improved demand for steel is not felt equally
in all forms cf steel or by all producers, it further points out.
Standing out sharply as a strong taker of steel this year is
the construction industry. Demand for structural shapes is fairly
strong. Fabricators of structural note an increasing amount of
stronger tone of
comes
from
protective
inquiry,
new
steel
over
which
likely
will
be
translated
into
demand
for
the next few months, comments this trade magazine.
Warehouses,
suppliers of steel to small users, are receiving
a
substantial number of orders, but they are small.
One ware¬
houseman commented that consumers' placement of orders in
small but frequent lots has exhausted his supply of invoices three
times this year. Already he has used as many invoices as he ordi¬
narily uses in six months.
Warehousemen say the extra work involved in handling small
orders and the keen competition they are encountering are cutting
profits.
commodity.
our
V
the weekly magazine of
'
Some of
the
small
warehouses
are
reported
to
be
in
a(
tight financial squeeze, "Steel" notes.
The
American
Iron
and
Steel
Institute
announced
that
the
operating rate of steel companies having 96.1% of the steelmaking
capacity for the entire industry will be at
an average of 73.0% of
for the week beginning June 7, 1954, equivalent to
1,740,000 tons of ingots and steel for castings, as against 1,674,000
capacity
tons and
70.2% (actual)
a
week
ago.
The industry's ingot production rate for the weeks in 1954 is
now based on annual capacity of
124,330,410 tons as of Jan. 1, 1954.
For the
produce atomic weapons and civilian nuclear P°wer a* the' same
like week a month ago the rate was 70.9% and pro¬
1,690,000 tons. A year ago the actual weekly production
was placed at 2,208,000 tons or
97.9%. The operating rate is not
comparable because capacity was lower than capacity in 1954. The
percentage figures for last year are based on annual capacity of
time
117,547,470 tons
understand
the growth
twfnew
atomfc Sstrv
^
atomic industry,
We
we
determine
aetermine
of
can
we can
*
if
we
pattern
that
mat
this
mis
duction
V11
I would like to leave with
you
my
conviction that atomic
weap-
ons
and peacetime nuclear
power
are Partners
enterprise
of Jan. 1, 1953.
in our struggle for
be organized and
out the job.
This must be done*
The amount of electric energy
and
was
distributed by the electric light
industry for the week ended Saturday, June 5, 1954,
estimated at 8,246,000,000 kwh.,
according to the Edison Elec¬
power
tric Institute.
carry
.
The current figure represents a decrease of
187,000,000 kwh.
below the preceding week, but an increase of
150,000,000 kwh., or
1.9% over the comparable 1953 week and 1,241,000,000 kwh. over
the like week in 1952.
Car
can
stimulated to
as
Electric Output Reacts to Lower Level
-
Loadings Rise 1.1% Above Week Ago
Loadings of revenue freight for the week ended May 29, 1954,
increased 7,325 cars or 1.1% above the
preceding week, according
to the Association of American Railroads.
every
Adequate legislation is needed
to promote the American climate
an
high, states "Ward's Automotive Reports," on Friday of last week.
It added that the industry completed its 3,000,000th car or truck
?
a d shou d be develop
States.
as
Domestic
three
if our American system of free
this military trend will afhome in the United
chance for
A.
atbmic weapons have
far-reaching
effects on the composition of fu-
In the long
,
that it will settle for
These facts stand out:
Atomic bombs
and
as instru- peaceful atoms are not rivals. We
ments of national policy.
Military need them both.
We need them
people recognize that tactical nowwe can have them both—
ture military forces.
...
,
some
"
v
survival.
of competition
^
peace,
than a
.
cause
Tbal
dilemma is this.
management is able to convince the union
its expensive demands too hard in a year
when steel demand is weak.
So far the union has given no sign
it shouldn't
that
for any straw that promises
where
neighborhood
That would be if steel
peaceful atom', we could «ave five
hydrogen
eliminated major wars
sr a:,orT!lc, industl*y As you know, this matter is
Lets
by a
Age" points out.
was
organizefthis
effort
will probably be in the
lines might be
strike if management doesn't budge enough, "The Iron
must happen,
increasing the value of the indusaccounting just like their try and bringing the most benefits
.
only
national
The future of this
is
run,
we
could
We
-
feet
however,
securitv
j
•
Yu
V
elec-
as
above, includes the
stockpile and its impresto national strength,
weapons
have any permanent existence in terms of time
nor
of
None of the
course, neither neutrons
waves
if
all-out
est
years some $250
taxpayers' money has
been expended in this field alone,
million
elec-
Of
it
year
always the chance that their steel supply
cut
in the shortest possible time?
wm
specifically toward the de-
pbout neutron factories and
tromagnetic wave factories.
tromagnetic
even
meet here today.
in
one
with
we
°{ knowledge,
Included in this research and
development
are the activities directed
way
ity.
and
trained
personnel
"going concern"—adding to
a
ouur.1 store
every-day life where we do not
package the basic commodity. In
our
the
peacetime atom.
It
is impressive to realize that these
i
SnJ,,,
indus-
major
are
of
ment
ing the last five
oil.
the
are
th*»
enormous
y„eI0Pume^ ?f "uclear power-
the Pacific.
The cost of
a pound of neutrons
is
something to conjure with. We
cannot put them into a
package
>
idea
amount of money and effort which
New while
in
D^dictfonfh^vreref"8^*
fa^echo
.t3.the
stories of
Similar
If
in steel this
The other horn of the steel consumers'
there's
inspired
an
easily have required 25 years
timfe; is it not more important to
build our peacetime power future
derstand
When
the Government has already spent
in connection with the develop-
great
the
Commission;
that
into five.
years
corporations in America.
practical
was
10
which has
long been familiar with such problems. In the early
development of
tetraethyl lead for improving gasthere
of
industrial research efforts of the
first four or five of the largest
Mich has health-hazard
properties. Chemical manufacturers have
oline
,
5
page
of 5c to 8c per hour.
peacetime effort, adequately supported, could compress the work
private industry it is surprising to
fui
material
these atomic
compare
laboratories
development
new
of
program
out
of peace
five-
the
on
Energy
pointing
total
operating costs
per year are approximately $250
million. This does not include the
facilities for the development of
directed
a
Atomic
proposal
capital investment in
laboratory facilities
is
not
far
from $300 million.
There are al-
With this problem of radiation.
There is nothing unusual in the
of
this
reactor
Thursday, June 10, 1954
in the Mid¬
immediate
peacetime atomic future?
IV
haz-
against, but
steady progress
making
based
year
from
.
an
imPress?d- The estimated reseryes taxpayers' mortey. I did emphaof unanium ore are approximately size that much more could - be
25 tlmes the total heat value *e--done and should be done on an all,o£
out basis'. We are n0 longer con"
Wlth al1 a"d
cerned Ivlth the "if" in peacetime
rouShly 10,° times this amount, power, but only the whem, where,
We know that increasing amounts ancj how. At a time when all the
f thes?
peoples of the world are grasping
greater
.
Second,
Continued
.
new
a
This totals about 11 billion important to build an -atomic
dollars of taxpayers'-money that, bombT in three years, when the
has £°ne into atomic energy.
ordinary course of efftkt- could
The
The chemists and
West, I proposed
of
ence-
ing of carbon.
have
atom
all-out national effort for the
pro¬
duction of peacetime power.
I
speculate
how this baby industry will be different from its con/
peaceful
dedication
recent
a
dle
The total assets of the United
on.
Up to now most of the ele- States Steel Corp. are something
ments with significant nuclear less than three billion dollars. The
properties
have
been
chemical total assets of the DuPont Co. are
curiosities in our scientific mu- roughly
two-and-a-half
billion
seums, and not articles of com- 'dollars.
Tho atom is already in
merce.
'
7 'the supermarket stage before ft
may
the
key to world survival.
industrial laboratory
Develop
Peacetime Atomic Power
are
that
the
holds
.
Loadings totaled 689,292 cars, a decrease of 97,463 cars or
12.4% below the corresponding 1953 week, and a decrease of 7,568
or
1.1% below the corresponding week in 1952, which was
In Investment Business
(Special to The Financial Chronicle)
LONG
BEACH,
cars
Calif.—Walker
& Lee, Inc., 4100 Bellflower Boule-
vard,
is engaging in
business.
Officers
a
are
securities
Robert
K.
Walker, President; Dewitt R. Lee,
Vice-President; and Ruth P. Shepherd, Treasurer.
'
affected by the Memorial Day
U. S. Auto
The
automotive
according
to
holiday.
Output Drops 21% Under Previous Week
industry for the latest week, ended June 4,
Automotive Reports," assembled an esti¬
"Ward's
mated 95,003 cars, compared with
119,007 (revised) in
week.
The past week's
production total of cars
the previous
and trucks
Volume 179
Number 5332
.
.
The Commercial and Financial Chronicle
.
(2575)
amounted
to
111,588 units, declining 21%
below last week's out¬
put of 141.089 units.
Last week, the agency reported there were
16,585 trucks made
in this
country, as against 22,082
1,217,300 have been repaid, leav¬
ing loans outstanding on 5,613,100
bales.
(revised) in the previous week
and 14,601 in tne like 1953 week.
1953 week.
Business Failures/Rise Slightly In Holiday Week
,
Commercial and industrial failures
rose
day-shortened
slightly in the holi¬
were
218 casualties,
week ended June 3; t'nere
compared wit.i 206 in the preceding week, reported Dun & Bradstreet, Inc. While casualties were about even with a year ago
when 217 occurred, they exceeded
considerably the toll of 120 for
the comparable week of 1952.
Compared with the prewar level,
however, failures
down
were
12%
from
the
249
recorded
in
the
Perceptible Rise Above Week Ago
week ago and 36 in the
of the failing concerns
corresponding week of last
had
liabilities
in
against 20 in the previous week.
Mortality
of
excess
Sixteen
year.
$100,000,
as
v''V;/..V;+:'V+;T-V.':
heavier during the week in all industry and
The only marked increase took
was
trade groups except retail trade.
place in
construction
where
casualties
to
rose
37
from
The
27.
contrary decline in retailing brought its toll down to 99 from 103
last week. Neither retailing nor service had as
many failures as a
year ago, but a mild uptrend from. 1953 prevailed in construction
and
Wednesday of
last
week
increased perceptibly
from that of the preceding week
and was slightly above the
yearago figure for the similar period.
manufacturing,, and wholesale trade held steady..
moderate upturn raised
a
the toll to 32 from 26.
tinued at
14, while
Middle Atlantic
In the South Atlantic States, failures con¬
declines occurred in four areas, notably the
which
had 59
and the West Central where
businesses
regions.
succumbed
Only
the
States reported
than
New
compared with 81
as
a
week
mortality dropped to 8 from 19.
last
England,
six
in
year
Middle
of
the
Atlantic,
and
ago
More
nine
major
Pacific
fewer failures than in the similar week of 1953.
Wholesale Food Price Index Turns Down
Sharply
From Record Peak of Week Ago
f
A
of
reversal
weeks carried the
favorable
was
due
sharply lower last week.
the
record
high
level
with
compares
of
The
31
the
week's
ping last
$6.56
of
The index for June 1 fell to $7.38, from
$7.46 a week ago.
The current figure
the
on
corresponding
date
This Week
to the
fact
usual
that
on
last
year,
or
a
to
report slightly better business last
week
than
ment
stores.
did large
index
represents the
sum
total
of
the
price
pound
per
general use and its chief function is to show the
general trend of food prices at the wholesale level.
city depart¬
■
Continuing the mildly lower trend of the preceding week, the
daily wholesale commodity price index, compiled by Dun & Bradstreet, Inc., declined to 274.00
on
and 275.94 two weeks previous.
June 1, from 274.95 a week earlier
On the corresponding date a year
ago the index stood at 276.85.
The
tail
total
trade
dollar
in
the
volume
week
of
re¬
.
Grains
unsettled
were
with
prices
generally
harvest
in
prospects
the
Southwest
and
the
recent
by Dun & Bradstreet* Inc.,
to be unchanged to 4% above the
level of
a
timates
varied
Regional
year ago.
from
the
es¬
the result of ample moisture
as
much
over
in
crop
of the
belt.
clined
later along with
other grains.
Trading in grain and soybean futures on the Chicago Board
was substantially lower last week.
Average daily sales
42,400,000 bushels, against 54,103,000 the previous week, and
51,700,000 bushels a year ago.
of Trade
were
h
sales
separates,
beachwear.
of. clearance
coats,
lingerie f * and
4
Purchases
of
men'#4
new
crop
movement
in the Southwest.
Following early strength, cocoa prices fluctuated
irregularly and declined sharply on profit-taking and liquidation
in the latter part of the week.
Selling
was
mid-crop above
prices
induced by private
the
official
estimates
forecast
and
placing
fears
that
the
Brazil
recent
high
to 3%
d,
m p r q v e
as
did
clothes vand. ^neck¬
for,children's cloth¬
the
past
their
week
to
in
demand.
Tea
These
of
weather which
is
likely to curtail consumption.
April imports of coffee, according to the Bureau of the Census,
amounted to 252,860,000 pounds, only slightly under the March
total of 255,458,000 pounds.
The raw sugar market weakened
somewhat under pressure of nearby arrivals from the Philippines.
The lard market developed a firmer trend in the latter part of
warmer
the week.
Spot cotton values gained some ground
although movements
Sustaining influences included mod¬
erate mill price-fixing and scattered
buying induced by con¬
tinuing favorable export trade.
>
were
<
narrow
There
ening
was
pace
to
irregular.
some
selling at times
of withdrawals of cotton
Reported
fell
and
68,700
as
the
from
result
the
of the
quick¬
government
sales of cotton in the ten spot markets
loan.
earning assets.
improved
bales, from 104,100
above the 36,900 for a year ago.
a week earlier, but were well
Loan repossessions for the week
ended May 21 totaled 111,300 bales, the highest for the season thus
far.
Of the
6,830,400 bales of 1953
crop
cotton in the CCC
loan,
two
or
rapidly
more
Thus,
steady
than
Department
store
as
tabulation
below
sented
con¬
quarter of last year
a
City
last
Corn
First
a
year ago,
According
sales
index
in
this
using
year
whereas
year
on
in
stores
year ago
be
morial
Day
comparisons, allow¬
made
for
the
fact
published
*$0.62
York—
Trust
—
Bank
the
+
2nd Quarter
1954
4.8%
*$0.66
8.01
7.04
-f 13.8
7.46
1.18
0.96
-f 23.8
0.83
1.04
0.84
+
8.1
0.89
0.98
+
6.1
0.96
.1.32
+
9.8
1.33
+
5.4
*6.23
Guaranty Trust
$1.23
0.98
+25.2
0.97
Hanover Bank
*1.37
*1.26
+
8.8
*1.26
—0.41
0.39
+
4.6
0.42
1.42
1.37
+
3.8
1.44
4.74
4.37
+
8.5
5.18
1.03
+
9.1
1.01
2.14
+
4.2
2.22
Trust
—
J.
Trust—
P
City
1.12
——
2.23
+
Public National —0.84
U.
Trust
S.
♦Indicated
0.80
*4.87
earnings.
*5.23
+
4.8
0.90
—
7.0
*5.28
.
'
;
^Partly estimated.
in
most
in
districts
observance
holiday.
were
EARNINGS
COMPARISON
NATIONAL BANK
of INDIA. LIMITED
Bankers
to
the
Government
Office:
26,
FIRE & CASUALTY
in
Kenya Colony and Uganda
Head
INSURANCE STOCKS
Bishopsgate,
London, E. C. 2
Branches
in
India,
Pakistan,
Circular
Ceylon,
Aden, Kenya, Tanganyika,
Uganda, Zanzibar, and Somali-
on
Request
Burma,
land
Authorised
Paid-up
Reserve
Protectorate.
Capital
£4,562,500
Capital
£2,281,250
Fund
£3,675,000
that
six
days
week last
closed
of the Me¬
stores
were
open
the corresponding
Saturday
share results for the second
per
*5.40
ended
should
have
quarter operating earnings is pre¬
1.45
Federal Re¬
department
1953, while for the four
May 29, 1954, no
change was reported.
For the
period Jan. 1 to May 29, 1954, no
change was registered from that
of the 1953 period.
ance
rates
in New York
year.
In the preceding week, May
22, 1954, a drop of 5% was re¬
ported from that of the similar
week
through
*5.69
National
;
above the like period of last
weeks
and' interest
Manhattan—*$0.65
New York Trust
20% below
City for
the weekly period ended *May 29,
1954,
registered an advance of
15%
down
guide for the figures to be
as a
Manufacturers
because of the
the
to
Board's
serve
store
are
first
Exchange
a
Day holiday.
the
National
Irving
New
suffered
week
decline of from 15% to
burden
changes will not be reflected in the
National— 1— $0.91
Morgan,
York
tax
Change
of New
1953.
in
volume
Although only
profits taxes a year
Percent
Bank
May 29,
1953.
trade
though
cases.
excess
1953
Chemical
registered a decrease of 3%
below the corresponding period of
Retail
a
i
decrease of 2% was re¬
For the period Jan. 1 to
29, 1954, department store
May
many
—1st Quarter—
of
Chase
vious
in
even
1954
Bank
Bankers
the
week
loans
/
for the week ended *May 29, 1954
increased 8% above the level of
similar
of
first part of next month.
sales on
a
taken from
For the four weeks ended
income
minimize the
together with the
the Federal Reserve Board's index
that of the
of
pre¬
preceding week.
In the pre¬
week, May 22, 1954, a de¬
crease
of 5% was reported from
reverse
■:
A
year ago.
country-wide basis
to
effect of these
shown.
siderably below the volume of
the
the average we would expect a slight gain in
operating
although in individual instances a slight decline may be
On
trading in the period
Wednesday of last week
generally declined from the
ceding week's level and was
*
,
quarter results.
new
Wholesale
on
favor¬
has been a better deposit trend over
the larger banks and this has helped
measures
though
even
the full
second
results
ended
so
security losses, etc.
during the week with used models
moving
is almost
helped in
actually increased
banks
Others took
ago.
selling
were
'
.
which
Tax changes have also
one
eased
sales
have not been
are
currently aiding
considerably lower.
one year.
There also
the past year for many of
slackened.
Automobile
strong.
Also, reserve requirements at Central Reserve cities were re¬
by two percentage points last July providing the banks
a larger volume of
earning assets. These funds were invested
at favorable yields and have been providing a good return for al¬
below last year's figure.
popularity of aluminum fur¬
remained high and televi¬
Household linen buying
very
duced
were
their
year
<
.
situation
a
are
and
retained
far this
returns
most
♦In
last week
better
present yields
con¬
position.
a
This
did sales of
The
was
substantially improve the rate of earnings on investment holdings.
was particularly true with
respect to government securities.
atten¬
instant coffee.
Memorial
vent
have
we
purchases remained
unchanged from the week before
as
so
earlier this year.
with
expand,
would-
stabilize
or
Even so, year to year com¬
ago, -There are several redeeming features, however.
Last
year the banks were able by engaging in switching operations to
warm
sales
course.
we
year
and
picnic fare.
Cold
cuts, poultry, eggs and fresh fruits,
particularly berries and peaches,
tinued to
earnings
its
in
Thus
.
weather
were
run
1953.' In contrast to the strong demand for credit a
the seasonal liquidation of loans has been substantial.
Also, interest rates have eased and the prime rate was reduced
-
ing gained during the week, as
plans were made for vacation and*
camping activities.
that of
curtail sales of chocolate products.
may
Coffee prices turned easier in moderately active trading last
week.
R (faster demand for green coffee tapered off with the ad¬
,
moderately i
slacks, work
sales
the
Operating conditions
•
ago,
The call
operating
.
r
as
wear.
in
year.-Nevertheless, the gains made in the second quarter of last
year may modify the comparisons of the current period with a
year ago. >+;+
V+ +
X'\-: V/v'/'1+ ■'y-'/: v:
n ■
year
wheat
the proximity of
trend
To some extent these factors were reflected in second
quarter
operations with most of the banks showing gains over the earlier
period. Howevqr, the full impact was not felt until later in the
able
1954, a
ported.
and
upward
several years has about
time interest rates
same
cord, silk and other Summer suits
Bookings of hard wheat bakery flours were held mostly to
small-lot replacements for nearby use. Although the supply posi¬
tion of most bakers and jobbers was said to be at a minimum,
buying interest was negligible owing to persistent firmness in
premiums
the
were rising. .The prime rate was
during March and the banks were adjusting other
rates accordingly.
+ 1 to —3; South 0 to —4,
Southwest —1 to —5.
'
Women's apparel registered in¬
to
be practically finished in the main producing areas and the
receipt of good moisture in the Midwest acted as a deterrent to
prices. Oats and rye showed strength in early dealings but de¬
for
raised to 3Y4%
*
Seeding of Spring wheat in the Northwest was reported about
completed uncer favorable conditions. Planting of corn was said
March
prevailed for
liquidation in loans and the demand for credit
At the
compar¬
west
creased
quarter
customary sea¬
sonal
able 1953 level by the
following,
percentages: East-and Pacific
Coast +5 to +9; Northwest
+2 to
+ 6; New England Q to +4; Mid¬
cotton
second
A year ago, the major banks were
benefitting from
favorable set of circumstances. There was not the
mated
working lower.
improvement
has
that
are
parisons for the second quarter should be favorable.
esti¬
was
ones.
The decline in wheat reflected the approach of the Winter wheat
last
which
indications
in the first period, will show gains over last year.
may not average so large as in the three months
as
increase
ended
current
moderately below the current level.
sion sets, air conditioners and fans
Mildly Lower Trend
•
basis
Barring some major change in operating conditions,
expect operating results eventually to decline slightly
niture
Wholesale Commodity Price Index Holds to
this
earnings,
The
Household
foods in
On
■
year.
continued
Bank Stocks
clearly established.
a
some
heavy shop¬
stores
—
of the current year have now been
pretty well determined. While
final adjustments for taxes or reserves
may alter current expecta¬
tions slightly, the
operating results, which are the most important
determinant of final figures, seem
yearly comparison
part
Day in 1953 fell
Saturday, which eliminated
Housewives turned
rise of 12.5%.
of
in
Memorial
tion
the sharp upward trend of the two
preceding
Dun & Bradstreet wholesale food Price index
JOHNSON
Operating earnings of the major banks for the second quarter
and
regions accounted for the week's increase, in¬
tte Pacific States where casualties jumped, to 74 from 39
and the East North Central States where
on
The
Four geographic
cluding
ended
Suburban
liabilities of $5,000 or more climbed to
193 from 168 last week and were
slightly above their 1953 total
of 181. In contrast, a decline
appeared among small failures, those
with liabilities under $5,000, which turned down to 25 from 38 a
By H. E.
The volume of retail sales in the
period
similar week of 1939.
Casualties involving
Bank and Insurance Stocks
Trade Volume Registers
/
"Ward's" estimated Canadian plants turned out
7,581 cars and
1,437 trucks last week, against 6,418 cars and 1,149 trucks in the
preceding week and 7,954 cars and 2,867 trucks in the comparable
51
The Bank conducts every
banking
and
Laird, Bissell & Meeds
Members New York Stock Exchange
Members
120
exchange
Telephone:
Bell
business.
Trusteeships and Executorships
also undertaken
American
BROADWAY,
description of
(L.
A.
Stock
NEW
Exchange
YORK 5, N. Y.
BArclay 7-3500
Teletype—NY
1-1248-49
Gibbs, Manager Trading Dept.)
Specialists in Bank Stocks
52
(2576)
The Commercial and Financial
Chronicle
amounted
A MUTUAL INVESTMENT FUND
SECURITIES
EIGIITY-EIGIIT
FREE INFORMATION
vestdrs
FOLDER AND
securities
reach
reacn
PROSPECTUS
interested
are
because
snccific
specmc
stability, reported the following changes during the period:
in
they
buying
want
ncr<?nrial
personal
mutual
CORPORATION
,;t
120 Broadway, New York 5, New York
funds.
refill net assets.--- $21,644,010 $21,725,168
Shai.es
States
and
fiscal year ending Sept. 30,
J954. Largely as the result of
In-
favorable
diversified
egg"
selected
for
long-term growth of
capital and income
Prospectus may be obtained
from investment dealers or
The
200
Parker
indicated
for
retirement
uppermost
_
Corporation
Berkeley St., Boston, Mass.
investing
about
sys-
regular
on a
riodic basis.
pe¬
urban
areas
distribution
desires.
both
Samplings
types of
stantially
showed
areas
identical
3+.
terest./
from
sub¬
investor
in¬
its
10
covering
Portfolio
Funds
of
Oct.
current
31,
fiscal
Parke,
whose
of
April 30 port¬
45
stocks
held
lor
capital growth in rising mar¬
kets, accompanied its report of a
six months' gain of 23% in net asset value with
ance
of
mon
stocks
Please send
your
ten
me
the
the
the
the
perform¬
speculative com¬
average
210
from
which
prospectuses describing
D-9J
are
a?sets___
$5,976,438
$5,460,640
Shares, outstanding
712,154
net
shareholders
733
3,592
.
534
'
Fund
"B-2," whose April 30, 1954 port-
State
Dow
Davis
Co.
&
Chemical
New
Jersey
Standard
Series
of
&
of
J.)
the
for
and
and
Corporation,
sponsors
moderate
the
LARGEST
a
month
at
year ago
MAY
Fund
r*
*
l
+
23.18 r
Twelve months to 4/30/54
Since June 1949 low_-__--
-|-
17.60
Six-months to 4/30/54i
.
i
+ 125.96'
sales
8-8 Class
31,
r
of
+
7.49
+
9.05
;
+90.39
+35.57
assets
Fund
stocks
a
diversified list of
selected
for
their
a
free copy
of
or
more
of
the
than
Fund
months
sales of
of
an
treble
The
me a
investment
PROGRESS
joined
mark
staff
ment
&
investment
the
of
Research
its
1,
fiscal
were
National
Henry
This
Jr.,
serve
year,
Com¬
Policy
mittee and the
Investm
e n
Committee
the
of
a
as
member of the
also at
history.
the
corpora-
tion
which
and
the
manages
sponsors
•
r. M.
New York
..National Se¬
steinburgh
curities
Series
total
.
Educated
at
the
Massachusetts
Institute;of Technology and Ohio.
State: University, Mr. Steinburgh
has had
a total of 22 years of exV
perience in security analysis, eco¬
nomic
research
investment
and
>/• jr
$37,926,846" a year management.. *v-'
ago, equal to' $2T2!f peir~shar& enb He previousiy was in charge of.
1,389,690 shares then outstanding.
research at Tucker, Anthony &
assets
of
STEVENS
assets
of
&
Clark
Inc., reports
$6,320,251
on
a 1 uFy sfj
w+tttMT fcirriT tr Lynch?
Pierce, Fenner- and Reane.
1954, compared with $4,--' ing World War H, he
a year ago.
value
is
Per share net
$16.85
on
374,979
ficer in the
-
Dur¬
of¬
was an
Army Corps of Engi¬
neers.
Affiliated
Diversified Growth Stock
Fund, Inc.
Fund
A
X+w
I
PROSPECTUSES
AVAILABLE
free booklet-prospectus
Dividend Shares.
Name
YOUR
ON
Common Stock Investment Fund.
Investment
hJl JUlife
LOCAL
are
THESE
MUTUAL
INVESTMENT
FUNDS
DEALER,
OR
San Francisco
Prospectus
Hugh w. long and company
•
Angeles
Westminster
at
objectives of thi6 Fund
long-term
capital
and
income
for its shareholders.
growth
CltvtlanJ
Chicago
upon
request
Incorporated
Parser, Elizabeth 3, Hew Jersey
Lord, Abbett & Co.
New York
—
Chicago
—
Atlanta
—
Los Angeles
•I
t
of
of Mutual Funds.
with
compares
by
St-
J.
Mr. Stein-
first
SCUDDER, STEVENS & Clark
Fund, Inc., reports total net assets
of $43,922,236 on June 7,
1954,
equal to $31.12 per share on 1,411,475 shares outstanding on that
date;
.
President.
today for the first time in
the Fund's six-year
was
monson,
year.
shares
it
announced
amounting to
increase of 34%
of
manage¬
Securities
Corporation,
$6,996,430 in the like
number
has
STEINBURGH
M.
burgh will
for the
BULLOCK
Address.
*
were
Manhattan Bond Fund, Inc.
Lot
'
PERSONAL
ROBERT
Fund outstanding in the hands of
the public topped
the 5,000,000
asset
FROM
Please send
Fund
1953, and the net asset value per
increased
from
$34.24 to
the
*********
on
Stock
Growth
as¬
of the booklet-pros¬
One Wall Street
stated, would
than $3,280 today.
share
Common
6%
$478,070 in May, 1953.
510,743
Established 1H94
:
1944,
dividends
common.
pectus by mailing this advertisement to
CALVIN
in
$3,021,774 on June 7, 1954 as com¬
pared with $2,209,229 on Dec. 31,
the
Learn the facts about this mutual fund.
Send for
was
more
ELECTRONICS
-
Common Stock Fund;
-
Diversified Investment Fund, Inc.
quality and income possibilities.
*
Price
months
793,679
net
(mutual fund) offering
company
profits, it
reported May sales of $1,-
June 7,
investment in
of
Capital Growth Fund."
our
total'' net
ment
The
about
period of the preceding
of
V^.-f
mutual invest¬
of
and
$9,385,462 for
of Benefit
-
recent
sales of
over
Margin
-+15.69
+ 8.55
in
which begins Nov.
an
all-time high
said May sales
Change
increased
SCUDDER,
a
reinvestment
worth
Funda¬
of
made
our
a
and
_
Dividend Shares is
shares
TOTAL NET ASSETS of T. Rowe
average,
just
in
Investors,
$41.99 during the same period.
seven
were
Fundamental Investors, Inc.
on
years.
a
S-3 Fund's
%
less,
are
common
largest steel
our
TELEVISION
reported
here by W. Linton Nelson, President.
:
% Change
S-8 FHnd
of
working capital in
Fund
shares in the 16-year history of
return and relative
10
be
the amount those companies
Sales
May sales set
level 30% ahead of
Mr. Nelson
of
sets of
managers of the Funds.
Delaware
mental
have
general outlook shows steady im¬
provement. Despite generous div¬
Stock
all-
an
search
THE
mean
steel
with
10%
or
Re¬
for
of
cross-sectional funds. They
presently comprise 7% of assets
of Fully Administered Fund, about
high for the period, accord-
record
inevitably
Sales
and
in
Securities
Funds
1.953
said
bracket.
recently been increasing and the
been
inS to E- w^ln Hare, Vice-Presi¬
Hare
steel.
:
"HcHdings of steel stocks have
(N,
dent of National Securities &
Mr.
vestment
population
past 15
rise of $2,790,698
months
our
and
Inc.
Co.,
13% from the volume for the first
time
"Demands for higher standards
of living as well as the increase in
Entitled
"Preparing for
Col¬
lege—The Parents' Problem," the
survey warns that parents should
be prepared for the possibility of
even higher costs in years ahead.
Preparation by parents for pay¬
ing education costs, say^Jhe sur¬
vey, should begin early" and in¬
clude investments that- can help
keep pace with changing college
costs.
For example, a $1,000 in¬
family with $10,000; 14% of the
a family in the $15,000
income of
have plowed back into their plants
Y.
five months ended May 31 totaled
five
"In the past seven
years sales of
four leading steel
than
Co.
.
Mutual
a
a
Co.
Co.
$24,244,208,
had
such
an
impressive
growth," states Distributors Group,
sponsor of Group
Securities, Inc.
companies
Co.
Zinc
Oil
have
stocks
Edison
Montgomery Ward
22% of the inconje after taxes of
idends, recent prices for
Co.
Fidelity-Phenix Fire Ins. Co. of N.
folio consisted of 39 issues selected
for
I.) de Nemours & Co.
total net assets on May
1954, "Exceeded $170,000,000."
Oct. 31
Medium-Grade; B0n d
..
fol¬
"
.
Addren.
as
1953
...
ADDITIONS
Kodak
a
more
follows:
Commonwealth
S-3
1953
of
first
family with $5,000 of earnings;-
mentioned, steel is not likely to
to mind, yet few industries
disposable income.
fiscal
that
April 30
'
No.
I
the
lows:
Total
Name......
current
are
come
respec¬
ELIMINATIONS
new
Changes in the Fund
Organization and the shares of your
Funds.
following table
Fund's perform¬
portfolio is drawn:
Company
50 Congress Street, Boston 9, Mass.
,
with
ance
the
SALES of the National
consisted
comparing
$12.96
ending
year
Speculative Common Stock
folio
(E.
Eastman
these
1954.
Fund "S-3"
and
,
of
+
amounted
operations
the March, 1953 fig¬
values
should
be
60%.
Average yearly costs of sup¬
porting one child at college to¬
day, says the Long firm, absorb
38% of the income after taxes of
companies have increased at a
much faster rate than the increase
in national
**For
changes for the
year were as
two Funds for the first six months
the
.
six. months
$247,182,000 on May 27, an allhigh.
The Trustee simulta¬
of
The Keystone
J
duPont
of
1954.
1,
more
years.
Fundamental
over
sales and net income of these steel
stock
'
KEYSTONE Custodian Funds, Inc.
reported that the combined net
assets
**$12.46
200%
share
per
:-'"v
;v>v
24c
$11.66
Jan.
adjusted to read $11.11
tively.
1,751
23c
reflect
to
effective
these
ure, i
appar¬
ently do not differ in their invest¬
ment
adjusted
■true, comparison with
,
and
rural
1,600
per share...
"Flgures
Results indicated that investors
in
ers
■COMMON STOCK FUNDS
of shareholders-
industries
and
more
the
Investors, points
minimum college
costs per year have increased six¬
fold, from approximately $300 a
year in 1900 to $1,800 a year in
1954.
Since 1940, costs have risen
f'-.
GROWTH
become
out that average
companies have
increased approximately 65% and
their net income 190%.
And over
a
long period of years both the
stoltXndmi:: $4«!s5? $5«2^2?
no.
Value per share——
information
the results:
are
;
asked
tematic
ending
*Mar'3153 Mar-31''54
neously released its Semi-Annual
Reports to S-3 and B-2 sharehold¬
BOND, PREFERRED AND
These
Inc. divs.
for
months
-
time
Custodian Fun J;
six
ing, 86% of those responding
to
eystone
the
March 31.
for invest-
reasons
in
minds
investment.
an
a
^
value
a
years
their
in
considering
Whatever their
that
to
$82,119,000.
"WHEN
high-
has
a current survey of the costs
learning and living at five well
known colleges,
Hugh W. Long
and Company, Inc., underwriters
same
"
*
hat
In
1954 were 5% above the same
pe¬
riod of last year. Total net assets
as of June 1 were
during
showed
stocks
common
record.
new
college graduations.
privilege of wearing this
of
repurchases for May
were 72% above
May of last year,
and for the first five months of
5.04% net gain over the class, and
a
17.29%
increase in net asset
a
of
portfolio
securities
grade
is
advertisement
when
action
the
over
the
and
at
worn
But
gone out
never
is the mortar board
costly through
month last year. Total
gross
sales for the first five months of
1954 were in excess of
increase of 11%
style
tassel
Sales less
the period, the Fund's 41 "blue
chip" stocks selected from the 110
preparation for re¬
the goal most
fre¬
quently sought. More than 65%
of the people who replied to the
nest
market
usable issues in the class of
Financial
last month.
over
same
a
the
Inc. a mutual fund with
$190,000,000 of assets.
of
up
period last year, which established
of
ad-
recent two and
than
was
months
newspaper
a
of
were
$6,500,000,
Gr&de Common Stock Fund "S-l"
based
was
ONE HAT that has
month
any
-
sales
THE GEORGE PUTNAM Fund of
Boston reports sales of new shares
an
re-
Fundamental
to
responses
tirement
with
9,185
THE TRUSTEE today also
covering the first six
United
vestors,
fund
8.19,834
9,317
tire
more
mutual
902,813
leased its Semi-Annual Report to
shareholders of Keystone's High-
vertisement
A
outstanding
of shareholders
v;
Long Company's sampling of investors and
potential investors covers the enon
f; INVESTORS:,
No.
The
one-quarter page
INCORPORATED
i233
•
May
and
year
outstanding shares, compared with
$13.81 per share on 326,625 shares
outstanding at that time.
Delaware
during May were more than $1,000,000, 50% higher than in the
Oct. 31
April 30
1V
to
financial
nnanciai
that
largest for
this
about 5%
price
every
potential in-
or
goals,, according to statistics re-.
leased today by Hugh W. Long
and
Company, underwriters of
NATIONAL SECURITIES &
established 1930
of
out
hundred investors
far
The
added
the
were
By ROBERT R. RICH
WRITE FOR
$227,660.
executive
thus
SERIES
,y
of
year
Mutual Funds
NATIONAL
RESEARCH
to $420,000 for an in¬
of 84% over May sales
last
crease
Thursday, June 10, 1954
...
*
i
•
1 \ t
8
i'
Number 5332
Volume 179
Continued
jrom
.
The Commercial and Financial Chronicle
.
,
of
middle
7
page
(2577)
easing in
Will Business
Activity and
*«•
long enough
and is not drastic enough to work
its way into the sticky part of the
spectrum.
is
***'
be
persistent,
moving
will
rates
money
each
States
other
related
are
that, because
relationship, movements
this
of
in
ket will
sooner
;
the
which they shoulder.
But it
certainly fair to ask whether
rates turned
sufficient
course
to
justify
loan rates.
gage
do
loan
I not
rates
Why, for
that
say
determine
that
the
action
between
and
is
it
the
true
effect
conditions
loan
in
think
hold
there
that
securities
is
good
is
it
the
to
to sell
tence
of
one
ernment
either
act
can
lender,
so
been
market
as
gov¬
which
borrower
or
purposes,
for
no
is the Open Market Com¬
mittee
of
the
out
Federal
new
commercial
works
money
one
whole
a
A
loan market
of
series
borrowing.
The
and
consumer
course
of interest
is
down
actions
designed
other loan markets.
easing
the
in
Reserve
government
spreads in
widening scope out
money
markets
of
goes
The
ever
all the
United
into
the
States, causing all rates to follow
government security rates.
exercise
fairly tight
a
money
situation de¬
veloped. The demand for business
loans was very heavy, construc¬
government security
prices if they chose to unload any
appreciable part of their holdings.
on
tion was
of
and
-
T
that rates will remain low for the
of
the
indicate
market is
money
to
where
you
to
must
we
want
we
know what is
to
rates, including your own
mortgage loan rate, will be deter¬
mined less by the course of hous¬
ing and general business activity
in
1954
than
of
Board.
forecast
the
In
the
interest
'
EATON & HOWARD
Dividend
b
EATON & HOWARD
STOCK FUND
ers
Quarterly Dividend
June 25 to sharehold¬
of record at 4:30 P.M., June 15, 1954.
Dividends
payable
24 Federal
rates
-
21 CENTS A SHARE
9l#t Consecutire
Street, Boston, Massachusetts
In
all
of
,
kinds
ness
situation.
Federal
It made
into the
market
Federal
Reserve
cau¬
a
drastic way.
holdings of gov¬
in
the first
market
sum
of
The effect
was
rose
over
Reserve
Board
mainder
of
immediate
during
past
the
Federal
into
circulation
ing of
rapidly,
climbing
versed
direction
cellar.
spread
from
The
suddenly
and
reversal
re¬
for
quickly
the government se¬
market
to
the
corporate
the open market
in commercial paper,
sensitive
headed
and to other
rates.
Now, it is true that business ac¬
tivity also turned down about the
the
Reserve
reserve
over
the
re¬
May,
has
1953,
poured
$800 million
requirements, and
lowered
furthermore,
that
their
the
rediscount
have
left
intention
doubt
no
has
been
not
simply to prevent a tight money
market, but to actively pursue an
easy money market.
At the time
"aggres¬
sive
ease"
easQ."
It
rather
seems
than
"active
me—and
to
I
would like to
I
heartily in agreement with
am
the
use
of monetary policy
in
fluctuations
an
in
general business activity. I also
support the use of general credit
controls such as are being em¬
ployed by the Federal Reserve. I
agree further that the present sit¬
attempt
offset
to
calls
uation
for
an
easy
money
policy. But the extent to which
that policy is now being carried
seems
to me completely unjusti¬
fied.
\
Effects
of
active
an
election this November.
With
re¬
Continued
10
of
one
you
share
full
a
from
page
of
the continued prosperity which
in store for our great
country.
''
■
is
j;j!■
■
i:;L
In American
interesting and effective steps Jo
minimize this competition.
Economy!
ally has fixed assets that
haps
Many
"Easy Money" Policy
of
those" most
with
the
have
agreed
problems
that
familiar
of
substantial
readily
particularly those having
wide geographical diversification,
represent one of the most effective
hedges against inflation. This situ¬
most
are
than
per¬
the in¬
manufacturiog,
enterprises,
particularly
whli%
"work in progress" represents a
inflation
tions,
"liquid"
more
corpora¬
of
hotel
'i
■..
Role of Hotel Chain
tress
part.
salable
Hotels
and
are
very
at
dis¬
not
prices, but for at least and
sometimes
their
than
more
cash value.
fair
The down payment is
ation is in part attributable to the
likely to be 20% of the purchase
price and another 50% is usually
leverage
financed
debt
afforded
the
by
senior
characteristics of most hotel
In
properties.
the
where
continuing in¬
an
likelihood
economy
of
flation is far greater than the dan¬
extended
of
ger
shares
equity
the
such
deflation,
of
companies
those owning large hotel chains
should normally sell at a premium
as
through first mortgages..
The intermediary financing, ordi¬
narily
the
in
form
of
second
a
mortgage, is also readily market¬
able for cash but at
usually
discount that
a
varies from
depending
on
to 30%*
25%
the terms and
ma¬
turity of the obligation.
Chain Hotel Ownership
above asset value.
Still iBt
Infancy
Actually, the securities of such
;
^
;
Chain
ownership and operation
of hotels is in its infancy at the
siderable discount from the indi¬
cated asset value.
In the case of present time, compared to other
industries in this country. It is a
Sheraton the common shares listed
relatively recent development, be¬
on the New York Stock Exchange,
companies
selling
to sell at
appear
around
value of
$8,
$22
over
a con¬
have an asset
share, accord¬
a
ing taken on its present serious
aspect only within the last decade
It is
hardly yet adequately
by the financial com¬
the management are conservative munity, with fortunate exceptions^
or
the
investing public.
Their
can be judged from the actual ex¬
conception of real estate securi-^
perience with some dozen or more
ties and equities, and the securi4
sales of Sheraton properties in re¬
ties of hotel chains are classified
cent years in connection with a
in that category, is derived from,
program of relinquishing certain
the collapse of such securities
ty
hotels when larger or better ones
the depression of the 1930's. They
have become available.
In such
ing to the estimates of the man¬
agement.
That the appraisals of
instances, the properties were sold
for
amounts
in
of
excess
praisal values,
the ap¬
after provid¬
even
second
part pay¬
ment, which must ordinarily be
allowed when selling for cash —
discount
the
for
ing
on
mortgages accepted as
which
discounts
of
course
were
taken into consideration when the
selling
price
wps
established.
Sheraton believes that the $22 as¬
set
value
low
side.
if
errs,
all,
at
the
on
or
so.
understood
think of S.
W. Straus and
misfortunes.
chain is
as
But
of
amounts
failure
ratio
of
to
of
the
for
frequently
of large
lack
working
show the
current
liabilities
capital
usual
assets
which
manufacturing
is
2
or
to
over
1
cur¬
expected
merchandis¬
similfiS.
hotet
today's
different from
an
&.» W.¬
Straus financed property as
from night.
day iff
The securities of ho¬
tel chains not
only represent con¬
servatively; financed real estate
also
but
agement
tages
scientific
with
and
ly
the
efficient
great
man¬
advan¬
which
possibilities
have outlined.
I
All of this is slow¬
beginning to be recognized. I
see
a
very healthy fu¬
therefore
ture for chain
Hotel companies are
criticized
rent
purpose
of
an
easy
money
policy should be to insure a sup¬
ply of loanable funds adequate to
meet all sound demands at
able rates.
reason¬
We have had that ade¬
quate supply for some time now,
certainly rates cannot be de¬
as
high.
When
the
easy
is
pushed beyond
the point of adequacy and is used
deliberately to knock down inter¬
est rates to extremely low levels,
it seems to me to have passed the
money
policy
point where it is being used as a
stabilizing device. It then consti¬
tutes a device for forcing lenders
subsidize borrowers.
tutes
they
operated hotels.
Joins A. C. Karr Staff
r,
.1
'
♦
(Special to The Financial Chronicle)
LOS
ence
ANGELES, Calif.
—
F.'LeBaron has become
Laur¬
asso¬
ciated with A. C. Karr & Co.,
523
There have been West Sixth Street. Mr. LeBaron.
maiiy instances where hotel com¬ who has been in the investment
panies have operated very suc¬ business for manv years has re¬
cessfully with current assets ex¬ cently
been
with
Professionalceeded by current liabilities, and Service Plan and First California
for most purposes a 1 to 1 ratio is
Company.
considered
adequate.
The hotel
business is substantially
a
cash
With Perry T. Blaine
or
ing enterprises.
The
to
confidence
have exhibited in the past in our
institutions. Savings will be high,,
each
and
course
of
Federal Reserve spokesmen,
rate.
scribed
dras¬
of the United States will continue
operate will be favorable. I wisht
of
its
policy
there is of
Actions
Since
year.
twice
savings and
With rising 'em¬
industry.
ployment and incomes, the people
ventories
Reserve
the
has
pros¬
a
the
The Fed¬
to
direction
A clue to Federal Reserve pol¬
icy in the period head is provided
by Federal Reserve actions during
and
and
for
modifying
Effective Hedges Against Inflation
billion
the money
on
orJfc
perous
eral Reserve gives no evidence of
1954?
Federal
by the
a
Money rates, which had been
curities
Street, Boston
few
a
securities
bond market, to
50 State
in
three weeks of June
the
FVTMam Fund Distributors. Inc.
strongly.
rose
purchases. Then
suddenly, in the first part of June,
the Federal Reserve banks stepped
tic.
^7jc4ton
ap¬
now.
Despite this slightly unfavorable
outlook, I believe that
the housing market will continue
strong, and the geheral business
atmosphere in which you will
remainder of this year.
Re¬
attempting
future
policy. What sort of policy
be expected from the Federal
can
in
interest rate
serve
tious open market
dollars.
FUND
was
the Federal
Reserve
apparently changed its
mind about the underlying busi¬
tremendous
PUTNAM
Reserve
however,
May,
ernment
£J/ie ^/eorae
accord
parently of the opinion that the
underlying situation was infla¬
tionary, so that it took no action
to ease this tight money market.
As
might be expected, interest
30 CENTS A SHARE
■i
in
contract
Federal
The
BALANCED FUND
89th Contecutiee Quarter!]/
to
with normal seasonal patterns.
"
the best guess would appear to be
rates, we must therefore
to forecast Federal Re¬
attempt
rates
they will be by the
deliberations
serve
are
to- evidence
recovery.
ment
consumer
gold from the United States
by the failure of money in
circulation
Dividend Announcement
***■
booming,
activity is show¬
The , principal reason why I
have briefly traced the 1953 move¬
emphasize that I am
loans
speaking for myself alone — that
On the buying side, their ability were rising rapidly, and state and
the
Federal
Reserve
has
gone
is also practically unlimited. Since local governments
were
in the
completely overboard in its easy
market
for
large financing. - In
they pay for the government semoney policy.
I can see no jus¬
curities with
drafts
drawn
on addition, the Federal Government,
tification, for instance, for driving
themselves and since these drafts faced with receipts somewhat be¬
Treasury bills down to the point
low
what
it
are
had
anticipated,
was
eventually
deposited
with
where corporations choose to keep
themselves,, they do not operate doing considerable net new bor¬ their short-tOrm funds in idle
rowing. The money market was bank balances rather than
buy the
further tightened by the outflow
bills.
.
booming,
Returning, then, to the question
you
downward effect which they could
stable, construction is
wages
are
rising, and
are
of the outlook for interest rates—
(,
loan
loan
these rates.
know, the Federal Re¬
of the most recent change in the
What Has Been Happening to
serve banks are authorized to buy
discount rate, it was announced
Interest Rates
or
sell government securities in
that
the
reduction
was
in
line
the open market, and they can, in
Let me trace briefly what has with the continued
policy of "ac¬
been
practice, buy or sell in such vol¬
happening to interest rates tive ease" being pursued by the
ume that they can completely con¬
during the past year in order to Federal Resprve.
trol this market.
At present the show you the power of the Fed¬
Everyone is of course entitled to
Federal Reserve banks hold over eral Reserve in controlling all in¬
his own particular choice of words,
$24 billion of government securi¬ terest rates in the United States. but I would call the
policy of the
ties. This gives you an idea of the
In the first few months of 1953,
Federal Reserve one of
1
is
an
mortgage
prices
ing good signs of
Reserve
knock
responsibilities
to
the full year 1954 will be
Federal
to
Reserve,
spect
particular, I would not be sur¬
prised if they were slightly lower
at the end of the year than they
aggressively easy money policy is
appropriate to a situation in which
over-all business
the
securitieshsqriarket thus
great
rates has been the direct result of
in¬
effect
further
securities market
System.
As
the
purchases, investors tend
into
initial
all practical
limit.
This
agency
business
reflection of
a
money
ment
whose resources are
great that it can borrow or lend
which,
have
lessened
simply
high price, and less I of new money through open mar¬
flows to governments ket purchases of government se¬
because ^«f\the
declining yield. curities, released over $1 billion
Monqy^fornmHy in the govern¬ of bank reserves through a lower¬
new
and
amounts
.
in the
agency
securities
new
governments to take advan¬
of
tage
is found in the exis¬
reason
into cir¬
money swells
money
into
rates.
Reserve
controls
all the other money markets. This
good
govern¬
produced by the fact that, as the
prices of government securities
rise in response to the Federal
government
which
market
eas¬
Federal
the money
buy the
of
As this
terest
the
reason
This
force down
government securities market. But
I
and
they have sub¬
declined has not
of
and then into another, it begins to
in
have
market
conditions
on
further
the
It thus pours out
new
its way first
rates,
money
that
mortgage
some
all
inter¬
some
a
banking system and puts pressure
on
them to
get these funds to
government
course
to
reserves
work.
of
this
creates
uses
much
culation.
exam¬
mortgage
security rates?
There is
Bank
to
addition
ment securities.
curities market determines mort¬
ple,
in
effect, there is
effect because
which it
my
down
which
to
the
of
Interest
But
political
and
ease,
price
well aware of the
pressures on the Federal
going to happen to interest rates
during the remainder of this year.
the
wealthy individuals
in¬
which
in
manner
look if
Reserve
statement that the government se¬
de¬
not
are
am
strengthen
ing
mitted to all the other parts. But
this relationship alone is not of
I
fect of this purchase is of course to
first
later be trans¬
or
The first and immediate ef¬
market.
part of the total money mar-
one
money
of goveriy
ment securities, thus forcing down
yields in the government security
to
and
make
to
it buys government securi¬
ties.
What I have been demonstrating
"so far is that all interest rates in
United
wishes
Reserve
follow
easy,
the
to
respect
theo¬
exercised
week. If the .Federal
almost every
suit.
>
with
These powers are not just
can
we
have
retical powers; they are
that eventually the slow-
sure
I
whom
—must subsidize all borrowers.
sequently
money.
But if the flexible rate
movement
and
you
the
has
drastic
course
ment is not continued
of
part
the
extent
under the usual difficulties which
A
cline in the demand for loans. But
terest
Interest Rates Recover in 1954?
1953.
money market
been due to some
the
therefore
53
a
device
It consti¬
whereby
the
de¬
positors of savings and loan asso¬
ciations
and
life insurance
the
policyholders of
companies—most of
business and
need
be
due to the
sales
of
large
no
carried.
This
inventories
is
hotels
Since
these
fixed
assets,
are
rooms.
represented
are
no
their
inventory
by
has to
be carried for the purpose of
note that
a
M. Winger
Ohio—Raymond
is now connected wifh
Perry T. Blaine & Co., 4519
„
Main
Avenue.
Joins
is
interesting to
company like Sheraton
it
ASHTABULA,
mak¬
ing room sales.
Actually,
(Special to The Financial Chronicle)
largely
fact that the principal
Goodbody Staff
(Special to The Financial
Chronicle)
CHARLOTTE', N. C. —Paul W.
boojk value of
DeLaney is now with Goodbody
$80,000,000
and
estimated
fair
market value of $125,000,000 actu¬ & Co., 217 South Church Street.
with fixed assets at
,
54
The. Commercial and Financial Chronicle
(2578)
Continued
jrom
Is AM to
Ondeideveloped
cially underdeveloped countries—
can
allocate toward defense, as
compared with expenditures for
economic
purposes.
Let us not
forget that Communism must be
guarded against from within as
well as from without. Here again,
this is particularly true
among
Abroad" in the April, 1954 number
underdeveloped
savings
countries
where,
through the seeming irony of fate,
populations are large and present
resources
in
a
small.
are
This
results
woefully low standard of liv¬
ing. It is among such under-priv¬
ileged peoples that the apostles of
Communism seek to plant the evil
seed of their seemingly beguiling,
but actually vicious doctrines.
In the light of these circum¬
stances, I fear that, in the ultimate
analysis, it is unsound to propa¬
gandize for increased arms out¬
lays among such countries to the
derogation of their expenditures
for
constructive,
economic
pur¬
However timely and laud¬
able may be our dedication to re¬
poses.
sist,
almost any cost, further
communist aggression, we must be
vigilant lest, in encouraging coun¬
at
tries
build
to
costly
bulwarks
against it, we
lure
them into
sacrificing their domestic develop¬
ment, which is the soundest safe¬
guard against the spread of com¬
munism from within and which,
by every test, is the most effec¬
tive
fertilizer
for
the
growths of
democracy.
So
for
much
the
strategic and
political aspects of our foreign
aid. Now let us appraise the eco¬
considerations
nomic
To
cast
it
in
of
such aid.
perspective,
may I revert to the earlier cited
recapitulation of our total, overall
foreign aid from the end of World
War II through the U. S. fiscal
year, 1955. You will recall that
this total is $52,497,000,000 or, in
round figures, $52,500,000,000 for
the 10 years in question. Of this
amount, $16,750,000,000 was for
military, not economic, purposes.
Thus, the amount expended for
economic aid to all countries, un¬
derdeveloped or not, totals $35,750,000,000 or at a yearly average
of $3,575,000,000.
proper
of
Affairs," Harold E.
Stassen, Director of our Foreign
Operations Administration, whose
words should carry weight on the
subject, wrote "At the present
"Foreign
time the United States is the only
national
Viewed
total
in
.
.
Importance of Building Up
World Trade
is
There
only
further
one
time
before
audience
as
was
is
It
trade.
your
own
League position on trade which I
quote from your "Tips on Trade"
where
;k'k.
1954,
February,
state:
you
policy should aim
to expand world trade rather than
contract it. Such a policy for the
U. S. means an increase of imports
U.
which is a pre¬
requisite to a continuance of a
high level of U. S. exports in the
absence
of
government
foreign
S.,
aid."
be
bold as to com¬
ment on the last phrase of this
statement, I think I can demon¬
strate that there is a fallacy im¬
plied, or, in fact, expressed, in
your
words "in the absence of
government foreign aid." Those
so
words advance the thesis that with
a
continuance of U. S. Gov¬
mere
ernment aid
could continue to
we
export more than we import. As I
indicated above, I think this is
economically
impossible
for
the
I there stated. If time per¬
reasons
mitted,
think
I
demonstrate
could
I
how
even
would
there
be
informed
* an
how important foreign trade
is to
economy; and we can only
hope to enlarge such trade by
raising living standards through¬
out the world. Even now, save for
artificial,
corrective,
economic
measures, such as foreign aid, we
are in an untenable trade position.
I am alluding, of course, to the
our
fact
that
a
vast
a
creditor
our
favorable
submit
are
Simultaneously, we ad¬
policy of maintaining
country.
here to
we
that
of
balance
these
trade.
I
two
for
To
ensure
high
level
accept
continuance
a
of
U.
S.
of
exports,
a
the
imports;
countries
with
increases
of all these
process
the
purchasing power
countries and thereby redounds to
the advantage of our trade.
know
of
specific formula
determining the amount of
for
no
American aid
is
required
or
for
investment which
this
constructive
purpose; nor, so far as I am aware,
are there any
reasonably accurate
for
means
evaluating the precise
which
our
foreign
overall economy is
benefited, dollar for dollar, by
such aid. I do know, however, that
the converse certainly paid off in
princely sums; namely, when we
were
an
underdeveloped country
—and that was not so very long
ago, measured by the time factors
of history — monies
purveyed to
help develop our vast territory
brought 'rich rewards to those
amount
trade
by
and
our
who
world
can
we
are an
only
pay
exporter. The
us for our ex¬
ports in either capital or products
which they ship to us. Since we,
who
constitute
only
7%
of
the
world's population, have approxi¬
mately 45% of the world's assets,
it is patent that we are the vast
storehouse of capital.
In fact, in an article entitled
"The Case for Private Investment
matured
more
economies. This
I
I
made
available
appreciate
that
to
us
this
confronting our young,
oped,
underpopulated
undevel¬
the
natural
means
resources,
country,
was
by
completely parallel to
confronting under¬
situation
developed
Thursday, June 10, 1954
.
"Social
Statics," said "no one can
perfectly free till all are free;
be
be perfectly
moral
moral; no one can be,
perfectly happy till all are happy."
no
one
till
all
In
can
are
our
our
own
genuine
self-interest, and for
national
own
the
of
United
Na¬
tions), he said:
countries of today.
I
submit, however, that the situa¬
tions are sufficiently similar to
support the thesis that money ad¬
".
.
;
.
over
national self-interest.
on
"For
tries,
the
industrialized
as
particular, and to our country,
general, in gauging the value
and endorsing the extent of our
in
economic
aid
particularly
still
to
all
First Boston
poverty
need elsewhere,
or
long
own
which
it
inter¬
run
ests to aid in the economic growth
areas whose productivity is still
of
Group
port picture, it does not
to
me
be
of
the
tude in which
ternationally
izens
000,
view
to
seem
magni¬
less in¬
our
fellow
it.
cit¬
For
1953
totaled
$15,755,000,military aid ac¬
which
of
of
minded
exports
our
colossal
some
to
seem
for
$3,504,000,000.
Our
exports,
t herefore,
normal
amounted
to
$12,251,000,000,
imports totaled only
$11,831,000,000.
This
illustrates
again how important it is for our
foreign trade, for our entire econ¬
omy, and for the world in gen¬
eral—especially the underdevel¬
oped countries—that economic aid
whereas
be
our
available
made
by
country which is in
it.
than
inveigh
against furnishing such construc¬
tive aid, we may well be proud
and grateful that it is our coun¬
try which is in the blessed and
purvey
pose
the
more
lofty
than
we
should
opportunity
our
own
welcome
furnish
to
that
aid.
It
would, I think, represent
unfair
and
myopic
national
our
an
reflection
tradition
science to end
and
"Those
them,
of
con¬
fundamentals,
as I
both economic and
are
litical.
is
simply
whether
to
be
before
a
women
even
more
regrettable
body of women; for to
attribute
we
a
greater
re¬
spect for the finer sensibilities of
life, be it personal or national.
Consequently, let us focus our
vision
the
the
on
fourth
and
fifth
of
major standpoints, from which
I stated at the outset, the secu¬
rity and welfare of our country—
or
any other — must be gauged,
namely the social and moral as¬
pects.
It has been well said that
this
generation
world."
I
concept.
live
we
in
of
"one
fully subscribe to this
I might add my firm
conviction
that
we
if
cannot
we
would, and we should not if we
could, live in a world of "half
riches
and
half
rubble."
Conse¬
quently, from the social and moral
standpoints we, who have been
blessed
by destiny—not inconsid¬
erably enhanced through our own
efforts
to
enjoy
the
highest
standard of living the world has
ever known, should be
willing to
of
some
less
throughout
reiterate
to
our
bounty
fortunate
the
the
world.
thesis
with
brethren
I
Let
me
endeavored
develop earlier in this discus¬
sion
our
that, in figuratively "casting
upon the waters, we
bread
will
find
and
these
filled
it
with
rived from
after
will
the
be
many
days";
days
justly
satisfaction
sharing
our
de¬
blessings,
The debentures
redeemable
are
at regular
redemption prices rang¬
ing from 102% through May 31,
1955, to 100% after May 31, 1972.
A sinking fund will operate to
the
Proceeds will be applied toward
of
prepayment
$7,500,000
a
with the prospect of a gradual ex¬
pansion
the remainder of 1954.
isting
of
areas
are
satisfied
within
trade
structure
of
the
trading
ex¬
duces and
markets
western
which
available
would
through
an
become
increase
of
productivity,
and
therefore
of
levels,
throughout
underdeveloped world. This
in
is
the same question, on an in¬
ternational scale, which all the in¬
dustrialized
nations
have
faced
and
the
in
answered
their
of
course
"On the
political side, the
of
properties
and
during
purchases gas in fields
Colorado, south¬
Wyoming and northeast¬
Utah, and distributes gas in
Utah and
Wyoming.
company's gross
The
revenues
March
operating
for the 12 months ended
31,
1954
$15,779,000
were
from gas operations and
from
non-utility
and
net
$1,186,000
oil
income
operations
amounted
$2,949,000.
national development.
own
bank
construction
northwestern
ern
consumption
the
for
Mountain Fuel Supply Co. pro¬
rela¬
tionships, or wish, as a long-term
matter, to enjoy the much wider
^
to
:
ques¬
tion is equally clear. It is whether
the advanced countries really beleive
their
the best
lies
oft-stated
creed
long-term hope for
the
in
spread
of
that
peace
democratic
institutions. For surely democracy
needs for its vitality an economic
climate
characterized'by hope and
despair. It is only in an at¬
mosphere of economic growth and
opportunity that we can
real¬
istically expect development of
not
the
kind
of
community
which
rights of the individual
values the
above
the
^£, the
powers
democracy
It
is
not
are
ttf
inspiring
with
Investors Realty Fund. • He
formerly manager of the trad¬
ing department for Marache, Dofflemyre & Co. and prior thereto
was
easy
(Special to The Financial Chronicle)
.translate
the
Harris is
specific
terms.
B.
,
over
capital each
year
national
and
year,
amounted
{-.$heir
(Special to The Financial Chronicle)
FRANCISCO, Calif.—
Ralph H. Nishimi has joined the
staff
444
only>$#,000,000,000
a
of Mutual Fund Associates,
Montgomery Street.
Two With Reynolds Co.
(Special to The Financial Chronicle)
savings
leaving a deficit of some
$14,000,000,000,
most
of
it
in
South and Southeast Asia. These
4"
I
SAN
a
year,
.
t.i
ir£prder to raise
incomes by 2%
that
to
\
..
en¬
arefifk as a whole
$19^000,000,000 of
with Dean Witter &
now
Equitable Building.
Joins Mutual Fund Assoc.
"Shirt-Sleev# Diplomacy?
needed
Company.
Joins Dean Witter
com¬
(p. 157), "In 1951, !a-group of ex¬
perts appointed by the U. N. Sec¬
tary General estimated that un¬
derdeveloped
with Hannaford & Talbot and
was
First California
btdj£ generalized Co.,
observations- into
their
CSpecial to The Financial Chronicle)
LOS ANGELES, Calif. — Robert
F.
Bates has become
associated
State.
Yet, according tc^kJonathan
Bingham, in his recent book
titled
Investors Realty Fund
PORTLAND, Oreg. —David V.
difficult
above
SAN
FRANCISCO,
Calif.—
Le Grande A. Gould and Malcolm
D.
MacGregor have become affili¬
ated
with
Reynolds
&
Co.,
425
Montgomery Street.
thj&en
severely
criticized
as
beings-exaggerated,
Sutro Adds to Staff
but one could cut them by % or
estimates
have
problefo
%
and
be
enormous."
I
our
consciences $hd to genera¬
comedo
yet to
that problem
generously
power so
power,
outline
cope
I
and
as
intelligently and
as
& lies within
our
hav^4 endeavored to
substantiate
it
here
today, makes the.;'problem, enor¬
though it be, appeal to me
as
being readily susceptible of
solution, if we but-jace it with
mous
courage,
with
determination
able
Sutro
C.
Hall
is
Calif.—
now
with
Co., 407 Montgomery St.,
members
of
the
New
San Francisco Stock
York
and
Exchanges.
with
George B. Garland Opens
(Special to The Financial Chronicle)
HOLYOKE,
Garland is
Colo.
—
conducting
George
a
B.
securities
business from offices at 606 South
Belford Avenue.
With Cantor, Fitzgerald
BEVERLY HILLS, Calif.—Paul
E. Hartz has been added
to the
andv$ith a reason¬
staff of
dedication.
Cantor, Fitzgerald & Co.,
Spencer in his essay, Inc., 232 North Canon Drive.
degree of
Herbert
intelligence,
FRANCISCO,
Alaistaire
with
to do; at)d, I repeat, this
as
(Special to The Financial Chronicle)
SAN
that.vlfbwever enor¬
probl&rak we of the
Statess owe
i|;to the world,
tions
as
still
would
J0-
the
United
to
the
suggest
mous
—
share
3.175%.
ing June 1, 1958.
panions."
to
seem
publicly $12,000,000 of
debentures, due June 1,
1974, of Mountain Fuel Supply
Co.,
priced
at
99.25
to
yield
loan, and
acquisition
industrialized
a
is
10)
retire the bonds at par commenc¬
self-interest.
This would
(June
see
Economic stagnation and political
me
Corp. heads
today
po¬
viewing of to¬
day's subject in the light of mere
our
which
offering
On the economic side, the
question
one
position to
a
Rather
the
come
First Boston
3V8%
I think the time has
fundamentals of the problem.
dimension. Even in
the perspective of our import-ex¬
are
Supply Go. Debentures
The
unduly low.
whicii
Offers Mountain Fuel
group
their
countries,
those
to
underdeveloped.
the issue is not the extent
in
a
in
coun¬
but rather the extent to
is
and
nation, I
philosophy to you,
this
commend
considerable
any
period national policy must be
based, and must be known to be
based,
welfare
happiness
(Economic and So¬
Council
year average of $3,575,000,000 in
foreign economic aid shrinks con¬
our
situation
rich in
be¬
$236,600,000,000.
In propor¬
tion to any of these figures, a 10-
^
the
no
cial
address
when, in their own inter¬
ests, the industrialized countries
must really come to grips with the
self-interest,
vitally needed capital.
as
income
able balance of trade.
extent
phenomena
continue to prevail side by
national
annual
enviable position of being able to
furnish it; and, even if for no pur¬
means
directly
cannot
side.
As an ancillary point, I should
add that, for the continuance of
our
economic
prosperity,
our
world trade is a basic necessity;
in turn, we can only carry on
world trade if we are prepared to
be an importer to;at least the same
interrelated
calendar
remitting this aid
in the face of our continuing to
insist on maintaining our favor¬
no
annual
so
hasten to
me
nine
erage annual gross national prod¬
uct was $278,700,000,000 and our
counted
If I may
the
siderably in
"A U. S. trade
the
for
1945 through 1953, our av¬
years,
world
but in addi¬
tion, it requires U. S. capital, be
this in demonstrating
that
average
into
recent
a
fore ECOSOC
of the
Consequently, let
add
authority I would like to quote,
especially to this audience, on the
importance of building up our
of
In
Bank.
.
.
ihcome.
to
the
the
or
product which, for 1953,
was
$367,200,000,000; or our na¬
country with surplus
tional income which, for that year,
available for foreign in¬
was $307,700,000,000.
Inasmuch as
vestment.
Such investment—
I used a 10-year average figure
if done wisely—increases our na¬
to reflect this aid, I think it is
tional income, raises our level of
only fair that I should likewise
employment, increases the flow to
use an average—and not the sin¬
the United
States of necessary
gle largest year—for measuring
primary raw materials, and raises
gross national product or national
our standard of living."
absolute, either
expendi¬ it in the form of government aid
ture appears to be colossal. How¬ or private investment, of the type
and
of
the
magnitude contem¬
ever, when gauged in relation to
plated
our gross national product, or our
by
the
quotations
and
national income, or our foreign figures cited above.' Such capital
trade, I think these figures as- is required to help develop the
,sume
relatively smaller propor¬ underdeveloped countries and to
tions. I need
not
devote rriuch raise the standard of living in
the
day
-
important
world needs American willingness
Expenditure Reasonable
the
for
present
Countries in Our Own Interest?
'
development of even in this relatively small de¬
underdeveloped gree.
countries may well produce many
Lest you feel that I am sacri¬
of the
well-nigh incredible re¬ ficing hardheaded economics and
sults
accomplished by develop¬ business judgment to sentimental¬
ment
monies
poured
into this ity, permit me to quote views
country in years gone by.
which, I think, are quite similar
Moreover, to frame this pic¬ to those I have sought to expound
here today.
ture in its proper setting, let us
They come from no
revert once again to the amounts impractical
sentimentalist
but
from
involved: an annual average ex¬
Eugene R. Black, President
of
the
largest financial and eco¬
penditure of about $3,575,000,000
for foreign economic aid is not nomic enterprise ever conceived
by
the
mind of man, the World
large when compared to our gross
vanced
14
page
.
Volume 179
Number 5332
.
.
.
The Commercial and Financial Chronicle
The,following statistical tabulations
Indications of Current
Business
latest week
week
Activity
Latest
AMERICAN
IRON
Indicated
11
steel
or
month available.
month ended
or
Previous
Week
INSTITUTE:
STEEL
AND
operations (percent of capacity).
(2579)
Month
Week
on
Ago
AMERICAN
Crude
§73.0
*70.2
70.9
97.9'
June 13
§1,740,000
*1,674,000
1,690,000
2,208,000
May 29
6,431,350
6,434,850
6,621,600
6,356,150
output—dally
condensate
and
May 29
(17,020,000
6,969,000
6,675,000
6,047,000
Crude runs to stills—daily
Gasoline
(bbls.
average
May 29
May 29
23,063,000
23,353,000
22,567,000
23,131,000
2,336,000
2,030,000
2,199,000
2,346,000
Kerosene output (bbls.)
Distillate fuel oil output
.
May 29
May 29
9,459,000
9,153,000
9,067,000
9,781,000
(bbls.) .4
Residual fuel oil output
,
8,564,000
(bbls.)
average
!
(bbls.)
Btocks at refineries, bulk terminals, in transit, in
Finished
unfinished
and
Kerosene
(bbls.)
gasoline
8,293,000
8,261,000
7,918,000
May 29
172,855,000
175,552,000
177,058,000
150,810,000
pipe lines—
at
May 29
23,416,000
22,263,000
19,680,000
22,948,000
^
Distillate fuel oil
(bbls.)
at
May 29
71,224,000
68,329,000
61,405,000
70,550,000
f
Residual
(bbls.)
at__
May 29
46,433,000
45,766,000
43,583,000
41,425,000
•
(bbls.)
at
oil
fuel
May
—.—
_____
U.
S.
IIIIIH
-IIIIIIIIII
Federal
OF
GOVERNORS
SERVE
short
Yn millions
Total
OF
SYSTEM
mated
FEDERAL
Revenue
freight loaded
Revenue
freight received from connections
(number of cars)
May 29
lay 29
.
~
CIVIL
(no. of cars)
681,967
592,719
599,311
Y
647,925
786,755
576,827
663,285
term
Private
Public
3
June
3
June
3
.June
3
construction
construction
State and
municipal—
Federal
COAL
3
OUTPUT
Bituminous
coal
lignite
and
Pennsylvania anthracite
■
$288,432,000
$493,968,000
107,377,000
152,246,000
362,130,000
86,799,000
97,010,000
136,236,000
131,838,000
128,448,000
66,724,000
'116,583,000
104,276,000
82,787,000
30,286,000
19,653,000
27,562,000
45,661,000
consumer
(tons)
(tons)
May 29
7,175,000
7,150,000
6,675,000
8,835,000
Vlay 29
569,000
457,000
403,000
757,000
—_____
AVERAGE
SYSTEM—1947-49
=
RESERVE
COTTON
(in
output
105
May 29
100
FAILURES
(COMMERCIAL
106
112
97
AND
INDUSTRIAL)
—
DUN
5
8,246,000
Y-
8,433,000
8,438,000
8,096,000
&
Received
steel
(per
Pig
(per
gross
Crude
3
218
206
206
217
June
1
4.634c
4.634c
4.634c
4.417c
....
^....-...June
1
$56.59
$56.59
$56.59
$55.26
June
1
$28.58
$28.25
$27.25
$38.83
Scrap steel (per gross ton).
(E.
M. J.
&
QUOTATIONS):
Electrolytic copper—
Domestic refinery at-
at
29.700c
29.700c
.June
29.625c
29.650c
.June
94.500c
93.500c
.June
14.250c
14.000c
COTTON
OF
SEED
COMMERCE—Month
mills
.June
14.050c
.June
10.500c
April
30
(pounds)
(pounds)
Stocks
(pounds)
April 30__
(pounds)
HI
_
Consumption (pounds)
Cake
and
Stocks
(tons)
U. S. Government Bonds
.June
Average
99.25
99.18
100.25
91.55
.June
109.97
110.15
110.70
102.46
Stocks April 30
.June
114.66
114.85
115.63
105.86
Produced
Aa
.June
112.00
111.81
112.75
104.48
Shipped
A
.June
109.79
109.97
110.34
101.14
.June
104.14
104.31
104.66
98.73
.June
108.70
108.88
109.24
100.65
Produced
I
.June
110.34
110.15
110.70
102.13
Shipped
IIIIIIIIIIIIIIIH
.June
111.07
111.25
112.19
104.66
___.
at
corporate—
Baa
Group
Industrials
Group—
Group
corporate
Railroad
Group
Group
ASSOCIATION:
PAPERBOARD
NATIONAL
Production
Percentage
at end
(tons)
STOCK TRANSACTIONS
Number of shares
Dollar value
Customers' other sales—
•
3.49
3.47
3.83
3.23
3.71
3.21
239,769
215,487
251,496
226,810
241,709
249,190
230,314
247,581
91
91
87
97
364,150
371,568
369,140
459,811
107.24
107.06
109.37
106.18
May
May
May
May
22
22
22
22
dealers—
'
"
1,014,227
$45,526,035
1,002,577
Y
993,442
1,007,553
$45,767,558
$46,952,871
-
*'
993,976
705,238
$31,857,987
FOR
BERS
626,354
1,015,148
Total
-
,
-
5
}®
VAa,y AO
}|
if
JJay 5
—.May 10
transactions initiate^ off the floor—
vrav1c
May
1&
May 15
—
__May 15
'
__
..May 15
members—
JJ y 10
Short
sales
—
LABOR
—
(1947-49
SERIES
SERIES
100):
NEW
NEW
=
—
All
~~
H___,
Meats
'
fNumber
([Includes
vuiciuuc
of wdm
not reported since
149,749
188,968
118,630
150,138
175,851
169,461
983
914
394
1,269
1,172
325
1,430
2,211
7,717
8,751
11,904
2,440
3,328
2,372
3,474
3,045
3,934
573
*<."
'■
r'
'
I
$2,330,000
$2,062,000
554,000
584,000
543,000
479,000
513,000
664,000
$3,187,000
$3,427,000
$3,269,000
29.700c
29.700c
29.683c
29.658c
29.520c
29.710c
13.904c
14.000c
12.750c
13.800c
13.713c
12.550c
£93.544
£82.166
Jf1Three
£92.792
1 £85.250
£79.769
37.970c
months,
London
(per
__
long ton)
31.970c
31.970c
28.500c
28.500c
29.000c
29.000c
35.000c
Platinum, refined (per ounce)
Zinc (per pound)—East St. Louis—
ttZinc, London, prompt (per long ton)_
$84,000
$84,000
$90,000
10.286c
10.250c
£79,527
£79,644
£69,028
ttZinc, London, three months
£79,247
£78,816
£69,316
$1.70000
$1.70000
$1.72000
$1.72500
$2.07500
$1.75000
$1.75000
$2.15000
$2.60000
$2.60000
$2.40000
85.250c
85.250c
tCadmium,
refined
(per
(per
$24,900,347
320,340
390,722
194,390
320,340
390,722
1941390
Cobalt,
long ton).
pound)
$45,950,953
...
V
319,370
292,910
368,247
233,790
354,430
375,930
288,390
9,978,370
9,996,970
414,920
5,734,780
10,332,800
10,372,900
,703,310
5,968,570
pound)
97%
.;
and Sterling Exchange—
Silver, New York (per ounce)
Silver, London (pence per ounce)
Sterling Exchange
§§New
York
(Check)__
—
Straits
York,
99%
34.500c
11.000c
$2.00000
(per
)
pound)
—
Bismuth
73.550
74.000
$2.81824
$2.81464
93.620c
96.269c
97.295c
$35,000
$35,000
$220,231
$195,000
21.500c
21.500c
20.500c
27.000c
27.000c
27.000c
60.000c
60.000c
60.000c
$2.25
EARNINGS
CLASS
I
ROADS
96.295c
95.269c
$35,000
$248,800
pound)
(per
85.250c
72.750
$2.81859
92.620c
min
""Nickel
$2.25
(AS¬
581,730
919,980
1,100,400
1,090,160
224,130
220,070
172,830
97,900
934,070
889,270
723,460
437,550
Total
1,158,200
1,109,340
896,290
535,450
Operating
Total
operating
revenues
operating expenses—
—
765,963,152
802,533,700
905,622,513
611,773,147
629,993,270
673,718,570
79.87
78.50
74.39
73,428,825
82,172,416
111,579,340
ratio
Taxes
176,710
Net
railway operating
14,400
19,800
16,000
10,300
Net
income
283,330
282,530
271,920
173,800
297,730
302,330
287,920
184,100
358,742
364,215
308,182
219,730
279,290
312,200
296,690
UNITED
after
STATES
income
charges
GROSS
GUARANTEED—(000's
40,390
28,010
33,600
60,690
384,047
361,250
325,083
240,405
424,437
389,260
358,683
301,095
1,771,342
1,733,665
,524,852
978,170
168,890
278,920
267,880
222.430
1,601,447
1,533,050
,320,463
851,755
1,880,367
1,800,930
,542,893
1,020,645
General
MOODY'S
fund
100
annual
COMMON
Industrials
Banks
June
110.8
111.0
111.0
109.7
..June
98.9
99.8
99.6
96.6
June
106.3
107.0
106.2
104.9
97.7
99.9
96.5
.96.0
114.3
114.3
114.5
113.5
June
§Based
on
new
^ n7 547 47Q tons_
Introduction of Monthly Investment Plan.
annual capacity Of 124,330,
410
tons
as
77,000,000
$273,555,234
$271,126,620
$266,572,224
5,486,781
4,787,069
3,638,668
$268,068,453
$266,339,551
$262,933,556
omitted):
2.347%
rate.
STOCKS—Month
of
L___
Amer.
Tel. & Tel.)
(24)
.•_!
(10)
♦Revised
______
figure.
and
Port
quotation
at
tBased on the producers' quotation.
platers'
or
Colborne,
morning
St. Louis
quotations.
more
U.
2.401%
4.86
5.53
6.27
6.59
4.86
4.96
5.34
4.62
4.66
4.60
2.94
3.08
3.40
4.88
4.94
5.51
6.15
tBased on the average of the
§Average of quotation on special shapes to plater.
§§Price for tin contained,
but less than carload lot, boxed.
S.
tt Average of daily mean of bid and ask
Metal Exchange.
ttDelivered where freight
duty included,
session
exceeds
.
May:
4.81
!
(not incl.
2.380%
|
OF
YIELD
AVERAGE
(125)
(25)
[[Domestic, five tons
E.
101,509,342
(15)
producers'
**F.o.b.
69,628,457
49,000,000
AND
DIRECT
DEBT
Average (200)
from
60,041,257
39,000,000
before charges
(estimated).
balance.
WEIGHTED
Railroad
Utilities
farm and foods
_____
676,000
barrels of foreign crude runs.
.
^
147,673
£94.396
$44,272,117
.
June
fiaure
figure
II
Common, New York (per pound)
Common, St. Louis (per pound)__
$43,666,483
15
commodities other than
'♦o—iRpd
*Revised
226,576
ttPrompt, London (per long ton)
Insurance
commodities
Farm productsProcessed foods-
71,640
226,187
Lead—
(per pound)_____.
U. S. DEPT. OF
Commodity Group—
All
'
May 15
Total sales
PRICES,
80,855
(per pound)—
Computed
transactions for account of
Total purchases
WHOLESALE
93,139
126,650
QUOTATIONS)-
(per
Total sales
Other
94,588
132,752
89,329
SOCIATION OF AMERICAN RRs.)—Month
of March:
the floor
Total purchases
Total round-lot
J.
Electrolytic domestic
refinery
Electrolytic export refinery
RAILROAD
M
sales
112,223
106,964
"
Total sales
Other
181,730
213,552
Average for month of May:
Magnesium ingot
——-—-•*VLay 10
sales
Short sales
M.
&
—
15
Short sales
Other
(E.
(per ounce, U. S. price)
Quicksilver (per flask of 76 pounds)
Aluminum, 99% plus, ingot (per pound)—
sales
on
278,124
256,898
•"
Gold
~ay
initiated
PRICES
tCadimum
319,420
!J[ay
purchases
Other transactions
178,690
219,851
209,425
of April
Total
METAL
New
FOR ACCOUNT OF MEM-*
DEALERS AND SPECIALISTS:
specialists in stocks in which registered-
-
167,313
IIIIIIIIIHIIIIII
SCadmium
298,180
,
-
Total sales
92,053,000
177,739
$2,154,000
4,988
Y. STOCK
Short sales.
Other
159,289,000
Ordinary
621,366
TRANSACTIONS
of
197,063,000
167,032,000
INSTITUTE
—
Month
—
6,940
EXCEPT ODD-LOT
Transactions
INSURANCE
1,008,208
iay 22
"aav
Total sales
178,107,000
176,259,000
omitted):
8,070
298,180
sales
ROUND-LOT
881,275,000
115,605,000
Silver
Short sales
Other
PURCHASES
985,906
^ay 22
ay
sales—
(1,000
4(685
AND
Total Round-lot
1,140,315,000 1,166,643,000
HI-II
IIIIIIIIII
pounds)—"
997,892
,
ROUND-LOT STOCK TRANSACTIONS
ACCOUNT OF MEMBERS (SHARES):
EXCHANGE
'
3.50
(000's
Copper
I
STOCK SALES ON THE N.
ROUND-LOT
170,533,000
([Antimony, New York Boxed—
Antimony, (per pound) bulk, Laredo—
Antimony (per pound) Laredo.—______
Number of shares
Other
Group
415.7
sales
Round-lot purchases by
TOTAL
Industrial
3.68
435.2
Short sale.
Other
3.48
3.15
437.1
shares—Total sales
Number of
3.02
3.17
439.0
sales) t—
sales by dealers—
Round-lot
3.07
3.62
value
LIFE
3.16
3.47
—■———
OF
3.06
3.13
Customers'
INSURANCE
3.60
3.05
____-—May 22
May 22
—
by dealers (customers'
shares—Total sales—
short sales
133,124,000
211,435,000
IIIIIIIH
IIIIHIHIIII
Grabbots, etc.
April 30
3.40
ACCOUNT OF ODD-
Odd-lot purchases
Dollar
3.12
v
—
184,799,000
200,632,000
Stocks
3.13
3.16
SPECIALISTS ON N. Y. STOCK
EXCHANGE — SECURITIES EXCHANGE COMMISSION:
Odd-lot sales by dealers (customers' purchases) t—
Number of
2.48
3.10
June 4
FOR ODD-LOT
Motes,
2.87
AND
DEALERS
LOT
613,790
191,274,000
30
■.
3.16
3.15
PRICE INDEX—
OIL, PAINT AND DRUG REPORTER
1949 AVERAGE = 100
27,705
376,581
(1,000-lb. bales)—
2.91
3.24
May 29
——-*——________ May 29
of period
—May 29
activity
of
Unfilled orders
2.56
3.11
^fay
(tons)
56,278
597,568
129,705,000
,_I
I
IIIIIIIIIH
Produced
Hull Fiber
3.17
June
(tons)
Orders received
6,688
161,955,000
April 30
(tons)
April
2.92
June
June
INDEX
COMMODITY
MOODY'S
1,435
4,004
•
1,332,089
!
■'
June
Group
Utilities
Public
Industrials
2.55
June
June
U. S. Government Bonds
Average
Stocks
LIFE
YIELD. DAILY AVERAGES:
MOODY'S BOND
(tons)
Shipped (tons)
Linters, (running bales)—
Shipped
MOODY'S BOND PRICES DAILY AVERAGES:
Utilities
1,760
I__
(tons)
11.000c
Public
1,740
(tons)
13.050c
Railroad
2,682
1,750
April 30
10.250c
at
Louis)
2,246
2,438
5,217
Meal—
13.800c
(East St.
2,073
2,566
9,111
'
.
Oil—
10.400c
Zinc
2,105
28,265
13.800c
at
at
6,251
890,521
Produced
Louis)
6,421
469,833
13.250c
(St.
4,326
__
27.800c
Lead
4,369
(tons)
95.000c
(New York)
1,554
April 30
14.000c
at
York)
1,554
19,767
•
of
94.250c
(New
5,220
PROD¬
29.625c
Lead
:
—I
Stocks
refinery
5,188
II
I
29.675c
tin
9,800
Hulls—
-
29.700c
Export
$26,455
20,900
9,798
I
(pounds)
Produced
Shipped
.June
Straits
$27,151
20,909
loans—
(tons)
Produced
METAL PRICES
■__
credit
AND
(tons)
Produced
lb.)
ton)
$27,330
I_I
IIIIII
III"
Oil-
Refined
June
BRADSTREET, INC
Finished
97,747
Cotton Seed—
Shipped
IRON AGE COMPOSITE PRICES:
iron
goods
modernization
UCTS—DEPT.
Stocks
—June
kwh.)
000
102,032
RE¬
credit
SEED
Stocks
EDISON ELECTRIC INSTITUTE:
Electric
350,969
104,335
April:
SALES INDEX—FEDERAL
STORE
464,906
Charge accounts
Service
Crushed
DEPARTMENT
448,716
410,363
Personal loans
$215,247,000
OF MINES):
S. BUREAU
(U.
$204,387,000
635,079
566,938
April 30:
Single payment loans
June
June
construction
S.
$1,083,795
872,503
514,698
credit
Repair and
NEWS-RECORD:
Total U.
3)
$1,439,441
942,244
credit
Instalment credit
Non-insialment
ENGINEERING
CONSTRUCTION
ENGINEERING
689,292
Ago
SERIES—Esti¬
intermediate
of
as
THE
REVISED
and
consumer
Other
Y
Month
CONSUMER CREDIT OUTSTANDING—BOARD
AMERICAN RAILROADS:
Y
Year
Month
$1,456,942
~~
II11.111
municipal—.
Automobile
ASSOCIATION OF
Previous
of
construction
and
of that date:
are as
Latest
.
construction
State
Month
—
omitted):
construction
Public
either for the
are
CONSTRUCTION—EN¬
NEWS-RECORD
(000's
Private
of
(bbls.)
output
ENGINEERING
Total
INSTITUTE:
PETROLEUM
oil
CIVIL
GINEERING
42 gallons each).
*
of quotations,
cases
Ago
.June 13
(net tons)
ingotB and castings
in
or,
Year
Equivalent, to—
Steel
production and other figures for the
cover
Dates shown in first column
that date,
55
0.5c.
of
London
!
■*
66
The Commercial and Financial Chronicle
(2580)
Continued from page
eral Resorve
system, free to exer¬ Continued
cise its statutory duty, to restrain
inflation, or to assist in combat¬
ing deflation.
In other words,
gearing their credit operations to
the economy rather than to facili¬
tate treasury financing.
recent years
li
Both Individuals and Business
is
That
made.
be
to
inflationary impact on
Under varying condi¬
tions it could have a very defla¬
feel that returning to the
individuals part
of the money that the Government
«s saving, is going to aid in an or¬
economy.
derly transition to a lower level
©f government expenditures.
It
will help make new jobs for peo-
economy
jpie who previously received their
income from the Government.
it would contribute as little to
why
we
businesses and to
is
It
the
favored
before
this
of
because
that
we
reduction even
a
complete
tax
attained
we
balance in
budget, which is so
our
desirable,
and
yet
tinuing to work almost day and
•light toward reducing Govern¬
ment expenditures and bringing
the budget into balance.
further
But
reduction
tax
can
only come when our level of ex¬
penditures has been reduced
further, and as the Government
does
cut
further spending,
we
biope to
to
and
along to the public
for themselves,
that the Government
save
or
money
through reduction in expen¬
ditures.
Not
New Tax Measure
other
large public
very
a
deflation
or
in¬
possible, in
as
would have
words, that it
in¬
rather neutral effect on the
impact
flationary or deflationary
the economy.
on
This
we
have
debt
out
over
time
among
holders
or
accomplish it
got to spread the
a longer period of
if
means
that
we
larger
a
of
group
individuals.
We
ap¬
preciate in this power and electric
industry what you are doing in
the way of selling Savings Bonds
to your employees at a cost to you,
but we feel it is very important
that the debt be widely owned by
a
large number of people in this
great country, and that they will
have
then
vital
a
and
interest
themselves
country
is doing.
also
It
Bill
Reduction
of
determined to work it out
we
flation
a
effect on the economy,
realizing the effect on the
the debt would be managed, so
so
Tax
a
so
debt
pass
spend
«aves
tionary
con¬
are
we
We have
what
the
market
the
that
means
important
in
financial
and
others,
that is owned largely by
banks
The Tax Revision Bill, now be¬ institutions,
ing considered by the Senate and should be moved out into some¬
what
longer
maturities.
Since the
bhe Finance Committee, was never
took
office
we
intended as a reduction bill.
It administration
was
intended as
a
tax
reform have had 10 major financing op¬
Congressional
Congress
and
For years
measure.
the
-Committees,
erations.
In
of
seven
10
those
operations steps have been made
to push the debt out into longer-
public bodies have been advocat¬
This year we
ing a complete revision of our tax term securities.
Aiase.
Now we find that some of have had two major financing op¬
erations.
In
February we were
ihose people who
advocated so
-strongly are objecting to some of successful in selling $11 billion of
Hie things that we are proposing, 8-year bonds, largely to the banks,
blowever,
will
be
there
bill,
that
under
of about
tax reduction
a
but
to
cently
others
of
well.
as
finished
we
eration
$1,400,000,000.
where
Just
re¬
financing op¬
sold $5 billion
a
we
13
see
part of 1953
we
the Federal
saw
Reserve
holding back and not pro¬
viding the banks with sufficient
reserves to provide a base for all
credit
the
that
needed
was
by
individuals and all forms of mort¬
gages,
credit, any kind
think of was be¬
This heavy de¬
consumer
of credit you can
ing
demanded.
mand, bidding against
supply, not
Federal
an
an
existing
onstrated
a
ference
to
have
lysts
government
example,
substantial
more
costly.
Then in the spring of last year,
the money market became very
tight, and
as
business
the estimated needs
were
for greater
credit, the Federal Reserve began
supplying reserves to the market.
In the latter part of the year, after
the economy started to turn down
a
business
consumers
first
and it made it
little, and there
shown some
for a greater
was
need in the economy
the
first
few
pessimistic about
conditions, forecasting a
business
based
of
during
For
generally
were
it
as
expenditures.
on
10
decline.
much
were
about
increased supply of
activity, caused "Survey of
people to get
ana¬
Sometimes
months of 1949, businessmen, gov¬
ernment officials and economists
timistic
you
indif¬
business
say."
to
Reserve
difficult for
remarkable
what
they have acted contrary to ex¬
pected movements in business and
the interest rates to rise and made
money
as
have dem¬
consumers
the
more
future.
Finances,"
during the
1949, and pub¬
of
May
and
June
of
that
included the following state¬
year,
ments:
proportion
felt
at
was
than,
their
least
of
consumers
financial
position
good as, or better
as
jsrill help businesses to get started be ample opportunities for us to
and encourage existing businesses extend the debt and to get it in
4o
expand,
modernize,
and
to better shape, but it presents a real
because the march of
create more and better jobs, which problem
The Sec¬
only an expanding economy can time runs against us.
It will be most helpful,
I have indicated earlier, in the
provide.
as
retary
likes
problem
to
talk
"The
as
this
about
Little
nomic
I'd
After
The
system.
like
ment,
period
to
turn
for
just
Secretary
this line and
a
mo¬
to Treasury fnancing.
all, that is my principal in¬
now,
was
one
talking along
of the
girls
was
taking notes (as I see notes are
being taken here) and she called
after
up
the
talk
and
said
that
terest at the Treasury.
I came in
she couldn't understand
Secretary
largely to work on financing the
Humphrey at all, he talks in rid¬
government and management of
dles,
he
talks
about
running fast
debt.
and
This
Administration
inherited
standing still—she didn't
derstand
our
not
only a budget that was com¬
pletely out of balance, out of con¬
trol, but we had a very large pub¬
lic
debt
over
that
had
two World
been
depression. The debt
large but it
short-term
centration
In
was
was
the
debt
long
not
only
This
so
short-term securities
in
con¬
largely
has
is
had
moving
the
debt
into
the
short-term category.
up
a
concentrated
securities.
of
built
Wars and
it
un¬
Little Alice program,
Monetary Policies
I'd
for
cies.
our
a
like
now
One of
to
to
moment
the
turn
with
you
^monetary poli¬
cornerstones
of
honest money program at the
Treasury, is
a
independent Fed¬
on
Housing
construction
ex¬
was
pected to hold close to 1953 levels
according
port."
gram
the
to
"Economic
Re¬
The Administration's
of making credit
more
home
con¬
available
for
pro¬
have some favora¬
ble
effects.
Actually total con¬
struction expenditures for the first
may
quarter of 1954 have exceeded the
fourth
quarter of 1953 by $1 bil¬
annually. This is the one very
encouraging factor in the present
lion
situation.
And
to
the
housing
extent
that
have
starts
been maintained demand for other
durables
consumer
be
may
ex¬
pected to follow suit.
of
of credit exceeded
a
lessened de¬
would be lower.
for credit.
mand
We
find
now
look
we
over
possibility that con¬
expenditures may move
sumers
contrary
credit
in
in
all
fields,
with
the
Treasury there is ample credit for
in the
to be
municipal market
expected
expenditures
seem
little congested, but there
a
to
Investment
individuals, for businesses, home garded.
builders, purchasers, for states and
Factors
municipalities — and periods like
now
nomic
the
Thus
as
the credit structure there is ample
under
the
policy
of
the Federal
Reserve.
This
change in direction of pol¬
icy has been criticized by some as
being a return to the easy money
policy of the 20's, or the war easy
money policy.
Actually, it is not
that.
It is a flexible policy de¬
signed by the Federal Reserve to
promote the public interest, not
dominated by the Treasury or any¬
one
else, but those men using
their best judgment in the policy,
would
the
tees
eral
the
have it follow the lines of
two
that
Congressional commit¬
investigated the Fed¬
and the Treasury—
Reserve
Patman
Committee
the
and
movements
Government
and
cannot
disre¬
be
in Future Development
I spent a
Federal
number of years at the
Reserve,
some
16
years,
and I knew the secretaries of the
treasury from Morgenthau on, per¬
sonally, and I have never seen
the relationship between the Fed¬
eral Reserve and
a
better
it
is
at
the Treasury
businesslike
the
likelihood
conclusions
about
basis
on
than
that
consumer
declines in government
and busi¬
spending during 1954, infor¬
mation
is
on
several different factors
required:
(1)
On
up defi¬
expenditures,
apparently be in the $19-20
billion
with
in
Even if
area.
our
we
would much
the
$8-9
dispense
growth estimate,
more
may
deficiency
billion
which
than offset any
base year
our
have-
1953,
still
an
re¬
mains.
shall
We
consumers'
determine
an
have
to
resources
investigate
and plans to-
likelihood
the
increase
in
of
consumers'
such,
expen¬
ditures.
The Preliminary
1954
of
Survey
Findings of the
Consumer
Fi¬
have been reported in the
nances
annual
rate
of letin.
On the size of expected de¬
It
must
stressed
findings with regard to
sumers'
financial
positions
their
ment
tained from
expenditures.
be
these
clines in Investment and Govern¬
(3)
other
March, 1954, Federal Reserve Bul¬
growth of the economy.
(2)
will
existed in
tentative
ness
growth and make
ciencies
over-employment that
However, in order to reach any
even
spending |; plans
a
were
thatcon¬
and?
ob¬
rather small sample,.
On the current financial re¬ This sample consisted of 2,800 in¬
of consumers.
terviews in January and February *1
attitudes of this year in 66 sampling areas:
sources
(4) On the current
and plans of consumers.
With respect to (1), the annual
of growth of the economy,
rate
based
Douglas Committee.
Alice
to a lower Problem"—little Alice in Wonder¬
level of Government expeditures. land, because you have got the
volume of debt, as time passes,
If I were to summarize for you
moving nearer to maturity.
Last
our tax program
in this admi¬
year a total of $22 billion of debt
nistration, I would say it is first a
moved
into the one-year cate¬
♦eduction of taxes as rapidly as
gory from beyond one year, just
can be justified by reductions in
by the march of time, which
expenditures, and secondly, it is
meant we had to move out $22
a revision of the tax laws to give
billion to keep where we were.
.■nillions of taxpayers rblief from
This year $14 y2 billion moves into
-hardship and inequities, and to
the one-year
category, so we have
lessen restrictions which present
push $14%
out just to
laws impose on the growth and got to
stand still.
expansion of the country's eco¬
^transmission
expenditures
quarter
producers' durables were down
$1.3 billion on an annual rate.
reserves,
the Federal mobiles, other durable goods, and ble—for a reduction of $2 billion
inaugurated what they houses at the outset of the year in inventories is expected as com¬
term a policy of activity, that was
increase of $2%
were, on the whole, about as large pared with an
intended to give a climate from a as buying plans reported early in billion during 1953, a total decline
credit standpoint that would en¬ 1948." As events then turned
out, of $4.5 billion. As an actual fact,
courage business to go ahead and the business leaders and econo¬ during the first quarter of 1954,.
provide the jobs and the goods mists were wrong about a major the reduction in inventories was
that we need to keep the economy
downturn, largely because con¬ at an annual rate of $5 billion.
going. In those circumstances we sumers continued to buy even
The total increase required in
have seen the interest rate de¬
though they believed prices were consumption expenditures during.
cline very sharply as the supply then at a
high level and that they 1954 to provide for regular eco¬
supply
spending will be at sufficiently
high levels both to provide for our
economic growth and to offset the
■than
from
Actual
Reserve
ever, through retaining the corNow these two operations, while
f^oration tax rate of 52% rather
permitting it to go down to they were largely in the banking
47%, will supply about $1,200,- area, tended to extend maturity
000,000 of revenue that would of the debt and get it in better
biave gone off and that just about shape, but it also tended to leave
pays the entire cost of the Tax money in thei hands of financial
institutions, largely for mortgages,
tievision Bill.
for corporate
financing and for
Now the provisions of that bill,
municipal financing,
which we
providing for flexible depreciation
felt was very important in the
.allowance and partial relief from
present
state
of
the
economy.
double taxation on dividends, we
In the months ahead, as we look
feel will aid business, particularly
forward
to the future, there will
small business, and these benefits
notes.
3%
year.
year earlier, was larger
With respect to the final com¬
beginning of 1949 than in ponent of Investment expendi¬
any recent year.
tures—change in inventories—the
"Consumer plans to buy auto¬ situation is not nearly so favora¬
the
notes,
down
a
try it seems, to take care of that
corporation side of it, how¬
5-year
mar¬
retail
year,
the
at
is ample credit through the coun¬
nearly
been
residential
"The
who
this
far
period last
same
first
increase in
an
so
have
sales
the
struction
lished in the Federal Reserve Bul¬
letins
And
readily
Consumer
of
kets.
op¬
interviews
weeks
Prosperity
they expect
But
The
1%%
The
\
this
policy of the
Federal Reserve in operation.
In
the\ the last part of 1952 and the early
an
page
Consumer Credit and
Tax Revision Bill Will Benefit
transition
from
..Thursday, June 10, 1954
.
on
the recent post-war ex¬
including
politan
the
areas.
12 largest metro¬
The results are, of
subject to sampling and*
response variations.
In addition,,
course,
a 3% mini¬ consumers' expectations and plans
which alone would require are subject to change as new con¬
ditions develop, which may bring,
an increase of approximately $10
billion in total money expendi¬ about substantial difference be¬
perience, is forecast at
mum,
With
respect to Govern¬
ment-expenditures, Federal Gov¬
ernment
expenditures
are
expected to decline by one-half
billion dollars during fiscal 1954
tures.
tween
actual
consumer
behavior
throughout the year and theur
proposed behavior at the begin¬
ning of the year.
Consumers' Spending in 1954
and by $6.1 billion during fiscal
trying to dominate the other, each
Keeping
these limitations
im
1955. At the same time, state and
sitting around the table discussing
what were the financial
local expenditures are expected mind,
common problems.
I believe that
to rise by $1-2 billion per year. positions and spending plans of
is the way we should run this
A reasonable estimate then of the consumers for 1954?
government.
overall
decline
in
Government
(1) As to actual financial posi¬
The aims and objectives, as I
expenditures during calendar 1954 tions of spending units (a) thesaid in the beginning of my little
would appear to be about $4 bil¬ Survey indicates that increases im
talk, are fairly easy to state and lion. According to Department of income were frequent in 1953 but
summarize: economy, lower taxes
Commerce figures just released, not so frequent as in 1952. Fortyand honest money. I believe these
the actual decline during the first one
percent
reported
receiving:
aims are being accomplished. The
quarter of 1954 as compared with more income in 1953 as compared
transition to a lower level of gov¬
the fourth
quarter of 1953 has with 48% in 1952, while 23% re¬
ernment
expenditures is taking been at a $3y2 billion annual rate.
ported receiving lower income as
place rather smoothly.
We find
The best estimates available on compared with only 16% in 1952,
public response and support of
The higher income level is indi¬
this program most reassuring to us planned business expenditures for
cated in the fact that the most
new plant and equipment indicate
at the Treasury.
a
decline of 5% in 1954, $1-1% frequent income bracket was at
A foundation based on free en¬
the $5,000-7,500 range, which in¬
billion less than in 1953. Most an¬
terprise, removal of handicaps and
cluded 20% of the spending units
alysts suggest this as a minimum
restrictions, and sound realistic figure since plans may well be as compared with 17% in 1952.
However 37% of spending units
programs are laying the ground¬ adjusted downward as sales pros¬
still reported income before taxes
work for the healthy long-term pects deteriorate. Producers can¬
of
less
than
$3,000 while 10%
not be expected to increase capac¬
growth
and
showed less than $1,000 income.
prosperity of our
ity even though tax incentives
country.
We look forward to the have been provided in the Ad¬
(b) The cash position of con¬
present time,
neither
,
future
with
confidence.
ministration's tax program, unless
suming units at the beginning of
yolume 179
1954
is
Number 5332
The Commercial and Financial Chronicle
...
another
important factor
regarding their finan¬
cial position.
The survey shows
that
liquid
asset
holdings
in¬
to consider
creased
during
1953
contin¬
and
ued to be
indicate
that
sound
weakness
basis currently for expecting that
consumers' expenditures will be
consumer
have
we
no
higher in 1954 than in 1953.
experience
gests that
of
1949
cash
holdings
than
at
riod.
is
beginning of the pe¬
apparently a matter of
running fast
in
order
to
to
(The high level of savings
ported
by
the
Department
is,
of
not
course,
finance
purchases since
re¬
of
all
consumer
substantial por¬
a
tion of it represents funds
already
used to purchase housing and life
insurance.)
A
able
with
factor
Credit
Under
these
further
unfavor¬
respect
the
to
and/or
debt to finance
consumer
both housing and other durables
has increased steadily during the
As a result, the net liquid
position of consumers
is
susbtantially in real terms.
Consumers'
attitude
with
will
slightly smaller per¬
(36% vs. 38%).
a
cent felt better off
(b)
Consumers'
always
are
expectations
important motivating
their
expendi¬
influences
respect
ing 1954,
in
1953
ing
(29%
the
at
34%)
vs.
centage
incomes
dur¬
smaller percent than
they would be mak¬
a
felt
more
to
end
of the
year
and
a larger per¬
income decline
expected
(15% vs. 10%).
(c)
Consumers'
attitudes
re¬
garding current prices may well
have
a
significant influence on
their
decisions
pecially
to
spend now,
es¬
postponable purchases.
The survey indicated that more
than
V3 expected price declines,
on
larger percentage than in 1953.
(d)
Their attitudes regarding
a
whether
or
time
purchase
to
not it
goods showed
was
now
major
expenditures
to
pears
change.
However, the mosLfrequent
sons
for
time,
were
good
rea¬
stating it was a good
that prices were stable
lower whereas last year it was
or
good incomes.
(3)
We
now
critical factor
sales
the
of
to the most
come
far
as
durables
estimating
as
is
concerned-—
actual
plans of consumers to
purchase in 1954—
(a) New autos—the proportion
planning to purchase new autos
was
lower than in 1953
and
these
plans
the latter part of
(b)
Used
proportion
(7.8
the
9)
year.
autos—no
planning
vs.
largely for
were
change
to
in
purchase
used autos—but at lower prices.
(c) Furniture and major house¬
hold
appliances—plans
chase
at
were
lower
level
siderably
(26.8
to
vs.
31.9).
planned
fewer
pur¬
significantly
a
Con¬
to
refrigerators and TV sets
plans to purchase washing
chines held up well.
(d) Homes—6.8
vs.
buy
while
ma¬
8.8%.
direct
connection
with
consump¬
tion expenditures but preferences
with respect to
risk
and
give
non-risk
attitude
re
be
in
1954?
This
the
thesis
advanced
ap¬
1949-52
had
shown
assets—common
1953
estate.
saw
sal of that trend.
a
some
process
55% increase
run
outstanding
be readily borne by consum¬
Accepting for the time being
concept of discretionary in¬
Mr.
ers.
his
come
as
a
credit
consumer
can
connec¬
adequate
an
consumers'
measure
of
further
I
guage
rather
real
Risk assets
were
indication
of
con¬
that
a
careful
sis of these various factors would
as
character¬
in
military lan¬
Big Switch
Operation
Little
Operation
Certainly
if
the
transi¬
tion does take place promptly and
successfully the consumer credit
industry can be expected to play
its
and
full
part.
But other more
adjustments e.g. in pricerelationships and in capacity,
basic
cost
well
as
liquid assets. But cer¬
tain questions suggest themselves
ing
immediately
credit
in such
nesses
indicate
to
thesis,
a
weak¬
liquid and other
erably higher cost than the yield
on many of their
investments, e.g.,
government bonds. We cannot as¬
this
would
ers
of consum¬
to be such un¬
group
prove
In the
meantime, what attempts
attempts might well be made to
strengthen consumer purchasing
power
and
carry, us
over
this
transition
period
without
the
proof that all that
is needed is increased selling ef¬
forts,
suffering substantial loss
economy
of
output?
that the
It has been estimated
additional disposable
being
tion
might ask why these
not purchased by con¬
during the booming 1953
period.
(3)
need
to
what
know
we
consumers
credit
consumer
finance
to
their purchases and the extent
which they have
limit
in
its
Finances
survey
of
instalment
reported most fre¬
quently by younger moderate inwere
families
c o m e
($3,000-$7,500)
18 years of
with
children
age.
Most of these families have
under
relatively little in the way of
liquid assets which could be used
in
meeting
repayment
obliga¬
tions.
In 1952 10% of the families
using
consumer
term
credit had shortoutstanding equal to
debt
or
And
more
this
of
their
percentage
incomes.
very
likely
during the rapid increase in
rose
credit
consumer
quarter of
1953.
the last
The rise in the
to
up
rate on automobile,
appliance and other loans, as re¬
ported in the March 24 "Wall
Journal,"
is
another
evi¬
dence of the extent to which
con¬
have
already been loaded
up with debt.
Corroboration of
this situation is given by Mr. Gor¬
sumers
Ha/ttersley, Vice-President of
Sears-Roebuck
who
his
on
pearance
before
would
mum
of
time,
a
ap¬
the
and
the
in
the
original
amount
$2.7
to
billion.
to
pro¬
maxi¬
a
Since
that
further $1 billion has been
/added by cuts in selected excise
Thus,
though
the
Gross
National Product and personal in¬
have
come
the
first
both
consumers'
income
declined
quarter
during
1954, botn
of
of
that
tion
plied
statistics
segment
which
with
is
of
are
the
already
trust¬
popula¬
well
sup¬
home
automobiles,
furnishings, and appliances, and
satisfactory housing.
ulus to retail trade
in
extra
Major stim¬
over
spending
be
that
most
in¬
effective
would
raise
in¬
encouraging gain al¬
from
the
near
by
this
group does not appear likely."
A
further
indication
of
the
credit
consumer
outstanding that
place by mid¬
year, and with the increases in.
consumer
purchasing power re¬
sulting from present and further
tax cuts, if they are enacted by
will
the
have
taken
Congress, the
industry
credit
consumer
should
forward
to
in
of
end
—i
Continued
ex¬
able
be
look
to
the
power of personal
the
■!
substantial
a
its
business
better¬
before
the
1954.
v
,■
5
page
What's Ahead fox
taxes, has remained
Germany's
Business and Finance
to
Germany to- reconstitute the
regulations forthwith to get
credits paid out.
The
EPU
the
Despatches from abroad within
the past few days indicate that
effective progress is being made
in working out a repayments sys¬
tem
benefit
to
all
the
creditor
countries
Convertibility
what about
And
is
This
Question.
convertibilityfthe
properly
topic
separate two-hour talk,
only refer it
superficially.
it
to
so
of a
I Will
ami
briefly
Germany is most anxious for
convertibility and is now well on
the
way.
But how
soon,
and!
(Belgium, Switzerland,
Netherlands, as well as Ger¬ whether Dr. Adenauer's
recently
many). 80% to 90% of the debtor reported statement from HambU£Lr>
countries' debt would be settled that "German
.currency
will be
under a special arrangement, of
put on a 100% gold and dollar
the
which one-quarter would be sub¬
immediate payment. The
at once get these
ject to
basis by
able
payments promised by the debt¬
ors, and later on a sizable with¬
tinues,v
which
of
surely
the
open
question.
to
con¬
premature,
chronic
previous
$50 million.
development
not
was
is
Nearer
point may be Dr. Adenauer's
Germany's share would
be about
next August if the favor¬
economic
creditors would
to
answer
the
"convertibility—when?" question,
Some
Doubts
About
Her
of "One hour after sterling." With.
Foreign Trade
Britain's
her
Despite
foreign
rapid
out to
trade,
even
it
it
share
still
turn
West
Ger¬
may
world
in
trade
the
in
is
years.
prewar
And the
high proportion of her
to
South
America are
exports
vulnerable
highly
factors
well
as
pression.
Regarding
as
political
to
future de¬
any
imports:
they
of gold and ster¬
reserve
in
scarcely half of what
now
was
advances
insufficient.
be
many's
are
ling
having reached the $3
now
billion
level, and with the Inter¬
national
Fund
Monetary
tially available for
and with
the
some
poten¬
subsidy,
mounting indications ©f
country's
of
con¬
its
owix
realization
benefit
vertibility's
for
self-interest, the U.K.'s keynoting
zero-hour
not be so far ofJL
may
•
*
only 57% of prewar; and there is
the further discouraging fact of
their
excess
dollar
area,
exports
over
resulting in
a
in the
dollar
Perhaps
bodied
the
competitive
and future, may be em¬
progress
Economics
to
key
the detailed fac¬
about Germany's
.
The Impact of Defense
*
*
apt
an
weighing of all
tors
gap.
disposable income, i.e.
after
the
in
saying-
following
encouraging to see con¬
sumption expenditures thus main¬
outlook, one making the rounds in Western
must
include
the
fillip to the Europe: "The Germans go in for
economy currently
derived from work but not austerity; the Brit¬
defense expenditures
of various
ish
for austerity but not
ha
kinds. First, there is the spending
on
occupation personnel, the cost work; the French for neither."
In any event, a fair conclusion,
of which is only partly borne by
the Germans, $250 million coming
about Germany's outlook might be
from us, $210 million from per¬
tained.
sonnel and the balance from P-X
nual
at
rate
the
fourth
annual
ex¬
maintained
during
as
quarter of
billion
It
been
level
same
an¬
consumption
penditures have
at
billion
$250
a
and
1954—at
the
$230
a
figure.
is
this
But
tax
is
program
dently inadequate to the
of
maintaining total
penditures since the
and
Government
evi¬
purpose
money
ex¬
decline
Investment
in
ex¬
penditures is not being made up
nor
is regular economic growth
being provided for. What further
government action is needed?
It
lief
clear
seems
to
further
that
consumers
would
be
re¬
more
helpful in facilitating the required
switch
than
the
in
lower
brackets
come
relief
Concentration
ducers.
lief
would
is
pro¬
of this
re¬
middle
in¬
where
spending
greatest,
income
and
to
needs
highest and most debt
already
found,
would be most stimulating to the
overloading
is
At the
economy.
least, com¬
very
t
a c
that
be
even
k
theory
ent
the
on
Democratic
"trickle
at-
down"
some
justification under pres¬
conditions.
Let
Professor
Sumner
Harvard
this
"There
has
prosperity
of
economic
the
on
is
po
me
quote
Slichter
of
Second, although their own
sales.
that
the
quickest result in halting the re¬
that her
trees
will
that
but
sky;
share of occupation costs has been
should
heavy, they have had no rearma¬
ment effort to finance. Third, there
reconstruction
be
able
to
of
'stimulant
there
from
is
indirect
the
world
tension,
countries
item production,
their
ing
civilian
and thus lessen¬
competitive efforts in
items
the*
activity
de¬
pendent on the continuation of
world tension is vulnerable, is, of
course,
anybody's guess.
Lack of Capital
in
the foreseeable future.
Edward G. Webb Opens
Firm in
Lynchburg
by
a
capital market, for financing
common
stocks
in lieu of
bonds.
sight
of
The end of the road
now
nancing
is in
ner
&
their
-Mr,
with
Webb
has
Scott, Hor¬
Mason, Inc. as Manager of
municipal department. Prior
thereto he was with Merril
Lynclv
Pierce, Fenner & Beane.
ploughing-back
is the need
profits. Not only
holding back individual
world mar¬
country's position in
kets.
business.
associated
been
Edward G. Webk
to engage in a secu¬
for necessary capital fi¬
through
for capital
Webb is forming
rities
Market
fly-in-the-ointment is
constituted by the country's lack
Chronicle)
LYNCHBURG, Va.—Edward G~
.& Company
Another
of
its ow»
barring war, meet her obligations*
in export trade.
extent
on
subsidy—and,
(Special to The Financial
what
competitive
in
pre-occupation of other NATO
with
military defense
the
she
able to stand
economy
feet without foreign
also
war,
continue
a
is the indirect benefit from NATO
then
not reach the
barring
expenditures on the sinews of war
and quasi-war equipment. Fourth,
there is off-shore purchasing, and
industries, but it is weakening the
point:
doubt
appraising the
are
disposable
of
In
To
elimination of all excise
which would add another
worthy, a
large proportion
of $1V2 billion to consumer purchas¬
liquid pavings is now in the hands ing power, is justifiable. It may
available
short-
may
ready reported in construction
penditures during the first quar¬
ter of 1954, with the reduction of
ment
With
1 expira¬
adjustments
gram
in¬
available
rates
Administration's
delinquency
don
tax
unchanged
According to the 1953
debts
to
already gone the
use.
Consumer
20%
further
taxes.
important of all,
Most
tax
war
were
sumers
use
of
made
by the Jan.
as
we
items
would
.
bath tubs and other durables
is mentioned
be¬
consumer
be expected to resume.
consumers
new
of
debts
comes."
have been made and what further
the great needs for
When
of
Strengthening Consumer Credit
come
thinking investors.
(2)
sell¬
necessafy
are
expansion
can
danger
pressure
drawal from the fund's resources;
savings choose to finance their
purchases on credit at a consid¬
that
better
e.g.
Why should individuals in
upper income brackets who
sume
the
of
use
methods,
fore
(1)
have substantial
the
as
after
kind of tax reductions
purchasing
difficulties.
Nourse
ability to incur debt,
term
analy¬
G.
than
Switch.
plete
rever¬
substantial
as
is
prepayment
the
economy
easily realized
izes the situation
taxes,
uncertainty.
believe
into
there
is
re¬
57
credit, provided that
so
Edwin
"If
and
be
income
deflationary
those
are
recession
has
his approach is entirely an aggre¬
comes
consumer
May
expect and that during the
the economy may well
nomic Report, Feb. 9, 1954 stated:
distinct
in
period
consumption
not
period
preferred
sumers'
high
Joint Con¬
gressional Committee on the Eco¬
by only
16
vs.
24%: savings bonds by 42 vs. 38;
and savings accounts by 22
vs.
20—a
be
may
con¬
stocks
controls
that
term
tion.
busi¬
a
credit
the
which
credit
since
the
have
following the removal of
consumer
of
growing
trend toward the purchase of risk
now
by
future
The
conditions.
ness
investments
indication
some
sumers'
1953 purchases of
automobile
personal
from
crease
great increase
present
that
con¬
passed we may well expect an im¬
provement in retail trade financed
by Mr. Arno Johnson of J. Walter
Street
(4) Investment Preferences—No
payments
the
on
1952,» When
Thompson Co. and in this
durable
overall
no
a
defla¬
This discussion suggests that the
shift from a high production to
the
With
This
credit and thus make up the esti¬
mated deficiency in total money
on
tures.
final
made
consumer
an
26%) while
months.
the
economy
does
not
in
the
meantime suffer serious contrac¬
gative approach. It may be true
important factor influ^ that such an increase could be
"carried
by all consumers if it
encing
their
consumption
de¬
cisions—(a) slightly more felt were spread among them in pro¬
worse
off
portion
to
their
increased
in¬
than
1953
(30%
vs.
is
influ¬
during the
economy
two-year
of
credit terms
deflationary
until
been
current
respect to their financial positions
now
tinue
has
selling efforts be
likely to bring about any great
expansion in consumers' expend¬
itures
financed
by
consumer
in
(2)
three
credit
consumer
tionary influence will likely
greater
tion he states that
down
last
the
conditions
consumer
fact that
asset
the
Terms?
liquid assets position of consumer
spending units arises from 'the
period.
the
in
on
of
changes in
to
help
a
ence
granted
no
liquid assets.
Commerce
to
exerted
situation.
indicates that)
26% of all spending units have
available
expected
in
that
so
the
of
tax
principal fea¬
and
cannot be
consume
a
taxes
What About Changes in Consumer
also
survey
propensity to
Since
lation
dissi¬
be
increase
be obtained from
can
reductions.
1954
remain
place.
same
The
,
now
the
It is
in the
higher
no
assets
cession
the low level of retail sales in
pated.
an
to
ture
mulated
liquid
that
answer
the fact that consumers have actu¬
chasing
Thus
the
ally been paying off debt during
ing steadily since
1946, the pur¬
of
accumulated
argument
continuing prosperity is found in
uncertain¬
as
the
sug¬
ties continue it is unlikely that
savings will be reduced or accu¬
long
so
of
credit is
The
well
as
widely dispersed. How¬
ever, though statistics show that
liquid savings have been increas¬
power
(2581)
-
'
Joins Lee Higginson
(Special to The Financial Chronicle)
BOSTON,
Mass.
—
Lewis
Paine is with Lee Higginson
50 Federal Street.
R.
Corp.r
Chronicle
The Commercial and Financial
(2582)
58
.
.
Thursday, June 10, 1954
.
if INDICATES
Now in
Securities
if Air Express International Corp.
2 (letter of notification) 2,000 shares of common
stock (par 50 cents) to be issued upon exercise of war¬
rants. Price — 50 cents per share. Proceeds — To two
June
Office — 44 Whitehall St.,
Underwriter—None.
New
selling stockholders.
York, N. Y.
American-Canadian Oil & Drilling Corp.
May 12 filed 1,500,000 shares of common stock.
Price—
At par ($1 per share). Proceeds—For drilling expenses
and acquisition of additional properties for development
and exploration, and related activities.
Office—Dallas,
Tex. Underwriter—None.
• American
Cyahamid Co., New York
May 5 filed 580,235 shares of 3%% cumulative preferred
stock, series C (par $100—convertible prior to July 1,
1964) being offered for subscription by common stock¬
holders of record June 1, 1954 at the rate of one pre¬
ferred share for each 15 shares of common stock held;
rights to expire
ceeds
—
increase
To
corporate
June
purposes.
17. Price—$100 per share. Pro¬
working capital and for general
Underwriter—White,
Weld
New York.
:
■
Co.,
&
-
share. Proceeds
Underwriter—None.
per
—
personally owned stock of Van Robert
McKay, Secretary, director and promoter.
Price—10
cents per share.
Proceeds—For mining expenses.
Un¬
derwriter—None.
• Central Illinois Public Service Co.
(6/15)
May 24 filed $5,000,000 of first mortgage bonds, series
F, due June 1, 1984. Proceeds—To finance part of con¬
struction program. Underwriters—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart &
Co.
Inc.; Kuhn, Loeb & Co. and A. C. Allyn & Co. Inc.
(jointly); Blyth & Co., Inc., Kidder, Peabody & Co. and
Merrill Lynch, Pierce, Fenner & Beane (jointly); Leh¬
man Brothers and
Bear, Stearns & Co. (jointly); Salo¬
mon
Bros. & Hutzler; Equitable Securities Corp.; The
First Boston Corp. and Central Republic Co. Inc. (joint¬
ly). Bids— To be received up to 10:30 a.m. (CDT) on
June 15 at 20 North Wacker Drive, Chicago 6, 111.
Central Maine Power Co.
outstanding
the basis of
of
common
stock and 6% preferred stock on
preferred share for each 50 shares
stock held and one new share of preferred
common
one
new
stock for each
10 shares of 6% preferred stock held on
4; rights expire June 14. Price — At par ($100
share). Proceeds — To reduce bank loans. Un¬
Jurib
mon
per
Bank
derwriters—Harriman Ripley & Co. Inc. and The
Boston Corp., both of New York; and Coffin &
•
Building,
Denver,
Colo.
Underwriters
—
M.
A.
Co., Newport, Del.
May 12 (letter of notification) 5,467 shares of class A
non-voting common stock being offered first to stock¬
holders of record June
for each two
1
the basis of one
on
share
new
shares held; rights
to expire on June 30.
share; and to public, $20
per share. Proceeds—To improve and expand water dis¬
tribution
system. Office—501 Newport & Gap Pike,
Price—To stockholders, $18 per
Newport, Del. Underwriter
Wilmington, Del.
—
Central Soya
8
stock
(letter of notification)
(par $1).
holders in
fractional
of
4,316 shares
Natural
Gas
May 27 filed 99,000 shares of common stock (no par) to
offered for subscription by common stockholders of
15
the basis of
on
one
shares
in
connection
supplied by amendment.
Proceeds
par
if Buckeye Mines, Inc., Albuquerque, N. Mex.
May 28 (letter of notification) 50,000 shares of
Price—At par ($1 per share).
com¬
N.
E.,
ISSUE
11
105,000 shares of cumulative preferred
Price—To be supplied by amendment.
—
if California-Utah Petroleum & Uranium Co.
May. 28 (letter of notification) 1,000,000 shares of
mon
stock.
Price—At par (10 cents per share).
(Paul
Colotah
C.
Uranium
(J.
W.
(EDT) on June 21.
if Century Acceptance Corp. (6/14-18)
May 27 (letter of notification) 58,000 shares of class A
common stock
(par $1). Price—$5 per share. Proceeds
—For working capital. Office—1334 Oak Street, Kansas
Underwriter—-Paul C. Kimball & Co., Chi¬
City 6, Mo.
cago, 111.
","v
Charge-It Systems, Inc.
May 24 (letter of notification) 230,000 shares of common
stock (par 10 cents).
Price—$1 per share. Proceeds—
For working capital and used to reduce current bor¬
rowings and to extend operations. Office—60 East 42nd
St., New York, N. Y. Underwriters—Milton D. Blauner
&
Co., Inc. and D. Gleich Co., both of New York City.
Cherokee
Industries, Inc., Oklahoma City, Okla.
May 10 filed 5,000,000 shares of class B non-voting cpmstock (par 1 cent). Price—$1 per share. Proceeds—
mon
For
construction, operating expenses and1 working capi¬
tal.
Underwriter—None.
-x>v"--
if Cherokee Uranium Mining Corp., Denver, Colo.
Maty 27 (letter of notification) 2,000,000 shares of cpmstock
one cent).
Price—15 cents per share.
exploration expenses. Office—438 Equittable Building, Denver, Colo.
Underwriter—Tellier &
(par
Proceeds—For
Co., Jersey City, N. J.
Chicago, Aurora & Elgin Ry., Wheaton, III.
I
(letter of notification) 5,000 shares of common
May 18
Price—At market
stock.
Earl
Proceeds—To
Rodman
(estimated at $8.87V2
sh.).
per
C.
Nagels, President. Underwriter—
Renshaw, Chicago, 111.
&
CALENDAR
Pro¬
Underwriter—Gammack & Co., New York.
(Tuesday)
.Bonds
11
Class A
Kimball
Co.)
&
$10,000,000
EDT)
a.m.
Common
Inc.)
Bonds
$300,000
(White,
Common
Utah
Ryons
&
Weld
Co.
&
and
(Wednesday)
Preferred
11
$6,000,000
EDT)
a.m.
(Underwriter
?
Preferred
amendment)
by
$25,000,000
•
Common
Smith,
National Uranium
{
$5,000,000
Pacific Gas & Electric Co
$2,500,000
Co.)
EDT)
a.m.
Duquesne Light Co
(Bids
Southern Utah Power Co
(Lester,
11
June 23
$290,000
1
Co.,
&
Bids
•
Polian
Co.)
&
June 24
$170,755
Mining Corp
Common
'■
$299,900
.
,
(Thursday)
Maine Public Service Co
(Merrill
(Carroll, Kirchner & Jacquith, Inc. and Cromer Brokerage Co.)
.Preferred
I
Pierce,
Lyncn,
Fenner
&
Beane
and '
•
Peabody & Co.) $2,000,000
Kidder,
'
>
'
'"■•/A
Central
Illinois
(Tuesday)
Public
(Bids
10:30
Service
CDT)
a.m.
Connecticut Light & Power
to
stockholders—no
June 25
f
Co....
Bonds
$5,000,000
(Paine,
Webber,
underwriting)
Curtis)
&
G.
Becker
&
Co.
Inc.
Hornblower
and
(Bids
&
Weeks)
114,954 shares
Lily-Tulip Cup
11
EDT)
a.m.
11:30
(Hill
Richards &
Bonds
Corp
Co.
and
Radio
&
June
Duquesne Light
Co.)
99,000
by
Goldman,
June 17
Staats
R.
&
11
Florida Power &
(Bids
(Thursday)
Chas.
W.
&
...Preferred
Scranton
Co.)
&
Co.;
Panhandle
(Kidder,
Beane;
Eastern
Peabody
and
&
Carl
M.
&
Co.)
Mesa
Uranium
Bonds
$16,000,000
EDT)
a.m.
11
Common
Merrill
Loeb,
Lynch,
Rhoades
&
Preferred
.Common
Light Co
11
245,000 shares
EDT)
a.m.
(Thursday)
Common
Corp...
&
Co.)
$300,000
(Tellier & Co.)
Debentures
July 6
18
United States Sulphur & Chemical Corp.
(Vickers
(Dallas
{(Friday)
Brothers)
June 21
Rupe
&
,
,
Oil Ventures, Inc
Basin
Pierce, Fenner &
Co.) $35,000,000
$5,000,000
EDT)
(
Common
$50,000
.t
(Tuesday)
Class A
Byrd Oil Corp
June
t
(Wednesday)
a.m.
(Tellier
Williston
$299,898
Pipe Line Co
Co.;
*■
$475,000
(Tuesday)
July 1
and
$10,000,000
..Common
Williston
R.
Co.)
Light Co
(Bids
Co.) 130,000 shares
Nortex Oil & Gas Corp
(J.
29
June 30
shares
Connecticut Light & Power Co
Co.;
Rice &
95.000 shs.
...Common
Pierce, Fenner & Beane) 577,551 shares
(Merrill Lynch,
Common
and William
&
Co.)
Common
Corp.
Estabrook
Staats &
R.
Co
Florida Power &
(Putnam
William
Fairchild Engine & Airplane Corp
(Wednesday)
stockholders—underwritten
Sachs
Hoffman
V
-
#
Common
(living J.
.Common
shares
Central Soya Co., Inc
to
Debentures
$40,000,000
EDTi
Telecomputing Corp.
(Bids
(Offering
a.m.
$6,000,000
(Offering to stockholders—underwritten by Blyth & Co., Inc.)
88,000
sh$.
(Monday)
Western Plains Oil & Gas Co
Jersey Central Power & Light Co
(Bids
Common
about 285,027
Columbia Gas System, Inc
$4,000,000
Common
28
June
$7,526,198
Hammond Organ Co
(A.
underwriting)
stockholders—no
.Common
Co
Debentures
Jackson
(Friday)
Merritt-Chapman & Scott Corp
(Offering to
June 8
(letter of notification) 7,500 shares of common
(par $2.50). Price—$7.25 per share.
Proceeds—
selling stockholder. Office—70 Summit St., Brook¬
22
Co
Power
(Bids
Inter-Canadian Corp.
(Blyth & Co., Inc.
if Carman & Co., Inc.
Gulf
(Monday)
Co., Inc
Hicks
June 16
com¬
exploration costs. Office—c/o Frank Wells,
Moab, Utah. Underwriter—None.
lyn 31, N. Y.
ler; Kidder, Peabody & Co.; W. C. Langley & Co. and
Hemphill, Noyes & Co. (jointly); Baxter, Williams &:Co.
Bids—To be received up to 11 a.m.
June
Common
Century Acceptance Corp
ceeds—For
a
due June
Washington Gas Light Co
(Offering
To
redeem two issues of $2.50 preferred
(par $50), totaling 98,800 shares, and, together
with proceeds from proposed issue of $8,000,000 of new
first mortgage bonds, to redeem $8,000,000 3%% bonds
presently outstanding.
Underwriter — Merrill Lynch.
Pierce, Fenner & Beane, New York. Offering—Tem¬
porarily deferred.
To
series E,
May 28 filed $4,000,000 first mortgage bonds,
(Gardner F. Dalton & Co.) $97,500
_
stock
stock
i:
(6/21)
Central Vermont Public Service Corp.
(Friday)
General Acceptance Corp
(par $50).
Proceeds
—
Co
June 15
California Electric Power Co.
stock
Investment
Proceeds—For
mining expenses. Office—709 Central Avenue,
Albuqerque, N. Mex.
Underwriter—None.
April 22 filed
June
Smith
June 14
($10 per share). Proceeds—For
mining expenses. Address—Box 172, Skykomish, Wash.
Underwriter—Louis J. Stiles, Secretary-Treasurer, P. O.
Box 197, Skykomish, Wash.
stock.
Price—To
From sale of
NEW
Corp., Santa Fe, N. Mex.
if Beavertail Mining Corp., Skykomish, Wash.
May 27 (letter of notification)'4,700 shares of common
mon
each
stock, together with $6,000,000 from long-term borrow¬
ings, to be used to pay for expansion, for working capi-
with
(letter of notification) 748,000 shares of common
stock (par five cents). Price—40 cents per share. Pro¬
ceeds—To acquire properties and leases. Office — Blatt
Bldg., Santa Fe, N. M. Underwriter—Hunter Securitief
Corp., New York.
Price—At
share for
new
shares held; rights to expire on June 29.
ten
be
June
of commbn
Dec. 23
stock.
Underwriter
Proceeds—To stock¬
2%% stock dividend paid on May 28, 1954. Office — 25
Broad St., New York 4, N. Y.
Underwriter—May be
Reich & Co., New York, N. Y.
Basin
/ ^
Laird, Bissell & Meeds,
Price—At market.
lieu
(6/16)
be
record
•
mon
Co., Inc., Ft. Wayne, Ind.
if Barium Steel Corp.
June
First
Burr,
Inc., Boston, Mass.
Water
Artesian
ISSUE
1, 1984. Proceeds—To redeem $1,956,000 series
I 3%% bonds, and $797,000 series J 3%% bonds, to re¬
pay bank loans and for new construction. Underwriter—
To be determined by competitive bidding. Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutz¬
from
$100).
Cloek and J. Russell Tindell, both of Spokane, Wash.
REVISED
bonus
To increase capital
if Apollo Oil & Uranium Co., Denver, Colo.
May 27 (letter of notification) 12,500,000 shares of com¬
stock.
Price—At par (one cent per share).
Pro¬
ceeds—For mining activities. Office—602 First National
ITEMS
tal, and other general corporate purposes.
—Goldman, Sachs & Co., New York.
May 20 filed 50,423 shares of 4.6% convertible preferred
stock being offered for subscription by holders of
March 17 filed 20,000 shares of capital stock (par
Price—$150
and surplus.
•
PREVIOUS
if Central City Uranium Co., Central City, Colo.
(letter of notification) 202,500 shares of common
stock, of which 135,000 shares are to be offered publicly,
each purchaser of two shares to receive one share as a
June 1
•
American Transportation Insurance Co.,
Kansas City, Mo.
Registration
ADDITIONS
SINCE
Sons and Straus, B'.osser
260,000 shares
&
McDowell)
-
-
Common
$760,000
July 12
United
(Monday)
Gas
(Monday)
Improvement
(Bids
to
be
Co
invited)
Bonds
$10,000,000
Central Vermont Public Service Corp.______Bonds
(Bids
Continental
New York
Boston
Philadelphia
Pittsburgh
San Francisco
Chicago
Cleveland
to
all
offices
a.m.
EDT)
$4,000,000
11
a.m.
EDT)
$800,000
Rothchild
&
Co.)
Boston Edison
(Monday)
.Bonds
Co
(Bids
to be
invited)
$18,000,000
*
Bonds
August 24 (Tuesday)
$25,000,000
Transportation Development Corp..
(L. H.
July 26
Preferred
Tennessee Gas Transmission Co
(Bids
Private Wires
11
Commercial Corp
(Van Alstyne, Noel & Co.)
$600,000
Common
Arkansas Power & Light Co
(Bidis
to be
invited)
'
Bonds
$7,500,000
Volume 179
Childs
Number 5332
...
The Commercial and Financial Chronicle
Inc.
Food
Stores, Inc., Jacksonville, Tex.
5,000 shares of class A
common stock (no par).
Price—$13 per share. Proceeds
—For working capital. Underwriter—Moroney, Beissner
& Co., Houston, Tex., and
Eppler, Guerin & Turner,
Dallas, Tex.
April 26
(letter of notification)
stock
com¬
of
5342 No.
$1).
(par
7th St.,
Phoenix, Ariz.
stock (par one cent).
Price—10 cents per share.
Proceeds—For mining expenses. Office—107 N. Turner,
mon
W. Hicks
&
it Columbia Gas System, Inc. (6/28)
June
7
filed $40,000,000 of sinking fund debentures,
series D, due 1979. Proceeds—To repay bank loans and
construction.
new
by
Underwriter—To
be
of
determined
stock
common
(no
par—
scription by commoin stockholders of record at 3
on
June
10
shares
$12.75
1, 1954, in the ratio of
one
held; rights will expire
share. Proceeds—For
Underwriter—None.
June
30.
construction
per
26
filed
200,000
shares of
Price
four
basis of
share for
p.m.
Price—
Office—421
Underwriter—Carl J.
,
-
common
—
.
;
&
Co.; The First Boston Corp. Offering—Originally set
11, but has been postponed because of market
for May
conditions.
No
new
date
set.
6
filed $25,000,000 of first mortgage bonds due
Price—To be not less favorable to company than a
3%% basis.
Proceeds—To redeem at 105.25% a like
1984.
amount
of
outstanding
3%%
bonds
due
1983.
Under¬
writer—To be determined by competitive
bidding. Prob¬
able bidders: Halsey, Stuart & Co.
Inc.; Morgan
&
Stanley
Co.; Kuhn, Loeb & Co., and Union Securities Corp.
(jointly); Harriman Ripley & Co. and The First Boston
Corp. (jointly). Offering—Postponed temporarily.
Continental Commercial Corp. (6/21-24)
1 filed 80,000 shares of £0-cent convertible
June
pre-
ferred stock (par $10). Price—To be
supplied by amend¬
ment. Proceeds—To reduce bank loans and for
working
capital.
Office
Pittsburgh, Pa.
Alstyne, Noel & Co., New York.
Underwriter
—
—
Van
real
estate
notes
(in
multiples
of
$50
each)
and
voting preferred stock (par $5). Price—At
replacement of notes, cash used to
Proceeds—For
tire
mortgage,
real
63
par.
re¬
estate
improvements, and working
capital.
Office—2621 Virginia Avenue, N. W., Wash¬
ington 7, D. C. Underwriter—None.
C,ornbelt Insurance Co., Freeport, III.
Under¬
filed
of Decca stock for each Universal share.
1 owned
344,338
Decca
on
May
672,996 shares (66.2%) of Universal stock, with
shares in hands of approximately 1,783 other
stockholders.
Also there
were
warrants
outstanding for
the
purchase of 79,873 shares of Universal stock at
per
share held by others than Decca, and any
Universal stock acquired upon exercise of such warrants
may be tendered for exchange.
Offer will expire on
$10
June 30.
Soliciting Agent—Georgeson & Co., New York.
Duquesne Light Co. (6/23)
May 26 filed 120,000 shares of preferred stock (par $50).
Proceeds—For construction
program.
Underwriters—To
be determined by competitive
bidding. Probable bidders:
Brothers; Blyth & Co.,
Co., Merrill Lynch, Pierce,
and White, Weld & Co. (jointly);
Kuhn,
Smith, Barney & Co. (jointly). Bids—
The First Boston Corp.; Lehman
Inc.;
Kidder,
Peabody
Fenner & Beane
Loeb
&
Co. and
&
Tentatively expected to be received
on
up
to 11
a.m.
(EDT)
June 23.
preferred stock,
(par $100) and 245,000 shares of common stock
(no par). Proceeds—To repay bank loans and for new
construction.
petitive
Underwriters—To be determined by com¬
bidding.
Probable bidders: Blyth & Co., Inc.
(jointly); The First Boston Corp.;
White, Weld & Co.; Merrill Lynch, Pierce, Fenner &
Beane; Carl M. Loeb, Rhoades & Co.; Union Securities
Corp.; Glore, Forgan & Co. and Harriman Ripley & Co.
and Lehman Brothers
(jointly).
June
Bids—To be received
up
to 11 a.m.(EDT) on
30.
Gamma
Corp., Wilmington, Del.
Feb. 2 (letter of notification) 140,000 shares of common
".stock (par 10 cents). Price—$1.50 per share. Proceeds—
For inventory, capital expenditures and working capi¬
tal.
Office—100 West 10th
Street, Wilmington, Del.
derwriter—Sheehan & Co., Boston, Mass.
General
Acceptance Corp.
Un¬
(6/15)
filed $4,000,000 convertible capital debentures
due June 1, 1984 (subordinated to all other borrowed
funds), with warrants to purchase 40,000 shares of com¬
May
27
mon
and
stock, to be offered in units of $1,000 of debentures
to purchase 10 shares of stock.
Price—
warrants
$1,000 per unit. Proceeds—To redeem $175,000 of de¬
bentures, for expansion and reduction of short-term bor¬
rowings. Underwriter—Paine, Webber, Jackson & Cur¬
General Credit
March 25
Corp., Miami, Fla.
(letter of notification) 74,990 shares of capital
Price—$4 per share. Proceeds—For work¬
ing capital. Office—799 N. W. 62nd Street, Miami, Fla.
Underwriter—Murphy & Co.. Miami, Fla.
be
determined
by competitive bidding.
bidders: Halsey, Stuart & Co. Inc.; The First
Corp.; Glore, Forgan & Co.; Kuhn, Loeb & Co.,
Unipn Securities Corp. and A. C. Allyn & Co:. Inc.
(jointly); White, Weld & Co.; Drexel & Co. and Equit¬
ably Securities Corp. (jointly); Harriman Ripley & Co.
Probable
Boston
stock
held about
writer—None.
Great Western Uranium Co., Denver, Colo.
May 10 (letter of notification) 2,000,000 shares of com¬
mon stock
(par 100). Price-^150 per share. Proceeds—
For mining expenses. Office—704 Equitable Bldg., Den¬
ver, Colo. Underwriter—J. W. Hicks & Co., Denver, Colo.
Gulf
Power Co.
May 26 filed
(6/22)
$10,000,000
of first
mortgage
bonds
due
Proceeds—To refund $6,593,000 of outstanding first
1984.
loans
and
1983
and
construction.
for
repayment
Underwriter—To
of
be
by competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; Kidder, Peabody & Co. and
White, Weld & Co. (jointly); Merrill Lynch, Pierce,
Fenner & Beane, Salomon Bros. & Hutzler and Drexel
(jointly); Equitable Securities Corp.; Union Secu¬
Corp. Bids—Expected to be received up to 11 a.m.
rities
(EST)
•
on
June 22 at 20 Pine St., New York, N. Y.
Gulf States
Utilities Co.
May 14 filed 160,000 shares of preferred stock (par $100).
Proceeds — To redeem 50,000 shares of $4.50 dividend
preferred stock, 60,000 shares of $4.40 dividend preferred
stock, 1949 series, and 50,000 shares of $4.44 dividend
preferred stock at the prevailing redemption prices of
$105, $105, and $105.75, respectively.
Underwriter—To
be determined by competitive bidding.
Probqble bid¬
ders:
Stone
&,
Webster
Securities
Corp.;
Lehman
Brothers an4 Equjtablp Securities Corp. (jointly); Kuhn,
Loeb & Co.; Glore, Forgan & Co. and W. C. Langley &
Cov (jointly). Bids—Had tentatively been expected to be 36*
received up tp 11:30 a.m. (EDT) on June 15 at The
Hanover Bank, 70 Broadway, New York, N. Y., but of-"
fering has been postponed. Stockholders will vote June
11 on approvipg preferred stock financing."
v
•
Gulf States Utilities Co.
*
$24,000,000 of first mortgage bonds due
Proceeds—To redeem $.10,000,000. of 3%% •
first mortgage bonds due 1981 and $10,000,000 -of
first mortgage bonds due 1983, and for general-corpo¬
rate purposes.
Underwriter—To be determined by com¬
petitive bidding.
Probable bidders: Halsey, Stuart &Co. Inc.; Lehman Brothers; Merrill Lynch, Pierce, Fen¬
ner
& Beane and White, Weld & Co. (jointly); Salo¬
mon Bros. & Hutzler .and Union Securities Corp.; Kuhn,
Loeb & Co. and A. C. Allyn & Co., Inc. (jointly); Lee
Higginson Corp. and Carl M. Loeb, Rhoades & Co.
(jointly); Stone & Webster Securities Corp. Bids—Had
tentatively been expected to be received up to 11 a.m.
(EDT) on June 15 at The Hanover Bank, 70 Broadway,
New York, N. Y., but offering has been postponed.
May
14 filed
June 1, 1984.
•
Hammond
Organ Co., Chicago,
-
(6/15)
III.
May 24 filed 114,954 shares of common stock (par $1).
Price—To be Supplied by amendment. Proceeds — To
selling stockholders. Underwriters—A. G. Becker & Co.
Inc., Chicago, 111., and Hornblower & Weeks, New York,
N. Y.
'
,
....
Hilo Electric Light Co.,
Ltd., Hilo, Hawaii
May 10 filed 25,000 shares of common stock to be offered
for subscription by stockholders of record June 5 on the
basis
of.
one
share for each four shares
scribed shares to
held.
v
Unsub¬
offered
to employees.
Price — At
Proceeds — To repay bank loans
improvements.
Underwriter —
May be named by amendment.
par
($20
and
for
per
be
share).
additions
and
Hoffman Radio Corp., Los
Angeles, Calif. (6/16)
130,000 shares of common stock (par 50 ^
by amendment. Proceeds1 ^
—For new plant and equipment and working capital.
Underwriters—Blyth & Co., Inc., San Francisco, Calif.,
and New York, N. Y.; and William R. Staats & Co., Los
Angeles, Calif.
May
19 filed
;
Price—To be supplied
cents).
Inspiration Lead Co., Inc., Wallace, Idaho
May 4 (letter of notification) 2,000,000 shares of class B
(with debenture warrants). Price —15 cents per
share.
Proceeds
For mining development.
Office —
106 King St., Wallace, Idaho.
Underwriter — Mine Financing Inc., West 909 Sprague Ave., Spokane 10, Wash.
stock
General Gas Corp.,
Baton Rouge, La.
March 19 filed 100,000 shares of common stock
Price
—
(par $5).
supplied by amendment. Proceeds — To
selling stockholders.
Underwriter—Kidder, Peabody &
Co., New York. Offering—Postponed indefinitely.
'
—
To be
General Stores Corp., New York
shares of common stock (par $1).
share. Proceeds—To pay part of cost
March 8 filed 300,000
Price—$1.37 Vz
per
of acquisition of Ford
Hopkins Co., Chicago, 111. Under¬
C. Allyn & Co., Inc., Chicago, 111. Statement
• Inter-Canadian
Corp., Chicago, III. (6/14-17)
April 19 filed 100,000 shares of common stock (par $1).
Price—$25 per share. Proceeds—For venture or semi-
venture investment situations in
Canada. Underwriter-
White, Weld & Co., New York.
May 7 filed 46,000 shares of 5% cumulative preferred
stock (par $50), of which 16,000 shares are being offered
in exchange for the 8,000 shares of 5.2% cumulative
Jersey Central Power & Light Co. (6/15)
May 13 filed $6,000,000 first mortgage bonds due June 1,
1984. Proceeds—For construction program. Underwriters
—To be determined by competitive bidding.
Probable
bidders: Halsey, Stuart & Co. Inc.; White, Weld & Co.;
Glore, Forgan & Co.; Kidder, Peabody & Co.; Union
Securities Corp., Salomon Bros. & Hutzler and Merrill
preferred stock outstanding on the basis of two new
shares, plus $4 per share in cash for each 5.2% share
held.
The exchange offer will expire on July 1.
The
Lynch, Pierce, Fenner & Beane (jointly); The First Bos¬
ton Corp.; Lehman Brothers.
Bids—To be received up
to 11 a.m. (EDT) on June 15 at 67 Broad St., c/o General
writer—A.
to be withdrawn.
General Telephone Co.
o^
Kentucky
30,000 shares of 5% preferred stock were
publicly at par by Paine, Webber, Jackson &
Corp. and asso¬
remaining
offered
Curtis and Stone & Webster Securities
Duquesne Light Co. (6/29)
May 26 filed $16,000,000 of first mortgage bonds due
July 1, 1984. Proceeds—For construction program. Un¬
derwriters—To
(6/30)
stock (par $1).
Records, Inc., New York
954,474 shares of capital stock (par 50
cents) being offered in exchange for Universal Pictures
Co., Inc., common stock on the basis of 2Vi shares
10
it Florida Power & Light Co.
Co."
June 8 filed 50,000 shares of cumulative
(par $1).
Proceeds—For investment.
Decca
May
working capital.
Office—434 Trust
Georgia Bldg., Atlanta, Ga.
Underwriter—None.
tis, Boston, Mass., and New York.
March 17 filed 300,000 shares of common stock
Price—$3 per share.
writer—None.
of
•
Cooperators' Properties, Inc., Washington, D. C.
May 27 (letter of notification) $28,000 of second trust
shares of
Proceeds—For
series D
Consumers Power Co.
May
,
share for each five
supplied by amendment. Pro¬
ceeds—From sale of stock, together with other funds,
to be used to retire $403,100 of collateral trust bonds
bonds due 1957 at 100% and accrued interest.
Under¬
new
expenses.
one
common
be
bank
class- B (par $1) to be offered for subscription
by employees of the company. Pricy—$1.75 per share.
Proceeds—For
working capital.
Office—50 Paris St.,
,
Price—To
basis of
class A
determined
supplied
June
*
Inc.; Morgan Stanley
10.
on
or
be
new
it Federal Electric Products Co.
3 (letter of notification) 40,000 shares of
program.
writer—To be determined by competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co.
June
common
shares
one
cumulative preferred v
To be supplied by- Newark, N. J. Underwriter—None.
\
amendment. Proceeds—For- -new construction,
UnderFinancial Credit Corp., New York
writers^rPutnam & Qo., Chas. W. Scranton & Co. and
Jan. 29 filed 250,000 shares of 7% cumulative sinking
Estabrook & Co.
fund preferred stock. Price—At par ($2 per share). Pro¬
Consol. Edison Co. of New York, Inc.
ceeds—For working capital. Underwriter—E. J. Foun¬
April 7 filed $50,000,000 of first and refunding mort¬
tain & Co., Inc.,, New York.
'
;
v
'v**
gage bonds, series K, due May 1, 1984. Proceeds—'To be
applied towards cost of redeeming $27,982,000 New^Yofk • it Financial Management, Inc., Atlanta, Ga. Steam Corp. first mortgage bonds and
$25,000^600 Werftr-; ; June i'^ietter of notification) 230,000 shares of class A
Chester Lighting Co. general mortgage bonds.
non-voting common stock. Price—At par ($1 per share).
Under¬
stock, series E „(par $50).
shares of
bonds due
on
stock,
Connecticut Light & Power Co. .(6/17)
May
Office—2321
Underwriter—None.
'common stockholders
mortgage 4ys%
29
operating capital and operating
Hudson St., New York 14, N. Y.
Bliedung, Washington. D. C.
share for each
new
on
Exchange.
Grant Building, Inc., Pittsburgh, Pa.
May 21 filed 22,069 shares of common stock (par $1) to
be offered for subscription by
common and class A
& Co.
(6/15)
share), to be offered for sub¬
per
Stock
North Bergen, N. J.
Family Digest, Inc.
April 9 (letter of notification) 142,875 shares of class A
stock.
Price—At par
($1 per share).
Proceeds—For
,
May 25 filed 590,290 shares of
(EDT)
held; rights to expire about July 14.
by amendment.
Proceeds—For
additional facilities, machinery and equipment and gen¬
eral corporate purposes.
Underwriter — Merrill Lynch,
Pierce, Fenner & Beane,*> New York.
28.
stated value $10.0625
American
about June
record
each
competitive
Connecticut Light & Power Co.
on
Price—To
bidding.
Probable
bidders:
Halsey,
Stuart & Co. Inc.; Morgan Stanley & Co.
Bids—Ex¬
pected to be received up to 11:30 a.m. (EDT) on June
•
a.m.
it Fairchild Engine & Airplane Corp. (6/29)
June 8 filed 577,551 shares of common stock (par $1)
to be offered for subscription by common stockholders
Co., Inc.,
Denver, Colo.
for
to 11
it Enrico Roselli Accordion Co., Altadena, Calif.
May 26 (letter of notification) 50,000 shares of preferred
stock. Price—At par ($1 per share). Proceeds—To man¬
ufacture, import and sell accordions. Office—402 West
Laun Street, Altadena, Calif. Underwriter—None.
Underwriter—None.
Underwriter—J.
shares
Hudson Blvd.,
it Cojotah Uranium Co., Inc., Hobbs, N. M. (6/14)
May 27 (letter of notification) 3,000,000 shares of com¬
Hobbs, N. Mex.
up
29.
it Duro-Test Corp.
(letter of notification) not exceeding 6,500 shares
of common stock (par $1) to be offered for subscription
by employees. Price—$7.50 per share. Proceeds—To re¬
imburse company for monies laid out by it in acquisition
Price—$2 per share.
Proceeds—
expenses incident to small loan business.
Office—
For
Bids—Expected to be received
June
June 1
\
★ Cold Cash Credit Co., Phoenix, Ariz.
1
(letter of notification) 150,000 shares)Of
June
mon
on
59
(2583)
ciates.
Proceeds—To retire 5.2%
preferred stock, to re¬
bank loans and to pay notes
Telephone Corp., its parent.
pay
it Glens Falls Insurance Co.
due to the General
(N. Y.)
May 28 (letter of notification) an unspecified number of
shares of capital stock (par $5) to be offered to em¬
Stock Purchase Plan. Price—At market
(to an aggregate of not exceeding $300,000).
Office—
Glens Falls, N. Y. Underwriter—None.
ployees
under
Public
Utilities
Corp., New York, N. Y.
Jolly Jack Uranium Co., Salt Lake City, Utah
May 24 (letter of notification) 1,160,000 shares of com¬
mon
stock (par 10 cents). Price — 25 cents per share.
Proceeds
For mining expenses. Office — 620 Judge
Bldg., Salt Lake City, Utah. Underwriter — Coombs &
—
Co., Salt Lake City, Utah.
Kendon
April 21
mon
Electronics
Co., Inc.
150,000 shares of com¬
Price—25 cents per share.
(letter of notification)
stock
(par
10
cents).
Continued
on
page
60
1
60
(2584)
The Commercial and Financial Chronicle
Continued
/.
jrom
59
page
f
...
..
I
•
-:r
Proceedi-^-For
working capita^
i
'
■
'V
and. general
corporate
purposes.- Office —18 Clinton Street, Brooklyn, N. Y.
Underwriter—20th Century Pioneer Securities Co., New
York, N. Y.
Vv-
one
share.
common
Price—$10
working capital.
—Lester
Office—Las Vegas, Nev.
LaFortune, Las Vegas, Nev.
L.
•
offered
June 15
for
subscription
share for each
and for
total
the basis of one
on
new
Underwriter
$25
•
York.
if Maine Public Service Co.
June
(6/24)
filed 40,000 shares of cumulative preferred stock
$50). Price—To be supplied by amendment. Pro¬
ceeds—To
redeem
(par
and
$20)
$1,175,140
to
reduce
5Vi%
of
preferred
loans.
bank
stock
and
stock.
24,000
shares
Price—At
of
($10
and
development
capital.
Business
research
working
electronic
and
par
electric
6%
($25
of
products
new
Manufactures
—
equipment.
and
Office—320
$10)
Water
and
Seward
Streets,
Juneau,
Office
Alaska.
Underwriter—
filed
30
American
voting
common
—To
by
be
supplied
trust
stock
(par
for
named
operations
certificates
be
if Merritt-Chapman & Scott Corp.
five
shares
held
Rights will expire
amendment.
the basis of
(with
one
Proceeds
—
To
retire
$4,050,000
Hospital,
Inc.,
Bronx,
N.
Y.
Mission Indemnity Co.,
Pasadena, Calif.
*^A*6h: 29 filed 600,000 shares
offered
first
to
of
stock/ (par
common
stockholders
and
to
65
gen¬
eral public.
Price—$2 per share. Proceeds—To increase
capital and surplus. Underwriter—None.
Missouri Public Service Co.
April
23
filed
50,000
shares
of
preferred
(par $100). Price—To be supplied by amendment.
Proceeds—To redeem outstanding first preferred
stock
for
repay
offset
$750,000 bank loans and
construction
program.
Peabody & Co., New York.
definitely.
the bal¬
Underwriter—Kidder,
Offering
—
Postponed
in¬
Feb.
2
filed
257,338 shares of
locations.
be
named
common
stock
Exchange,
or
(par $1).
through special offerings
or
secondary distributions. Proceeds—To Lehman Borthers
(400 shares); partners of Lehman Brothers and members
•of their immediate families
(106,480).
planned.
(150,458); and The Lehman
Underwriter—None.
No
general offer
of
common
stock. Price—At par
(one cent per share). Proceeds
—For mining expenses.
Office—1117 Miner St., Idaho
mon
Springs, Colo. Underwriter—Underwriters,
Inc., Sparks,
Nev.
Nash-Finch Co., Minneapolis, Minn.
May 24 (letter of notification) 1,000 shares of
common
stock (par $10). Price—At market
(estimated at not to
exceed $18.50 per
share). Proceeds
To Willis
King
—
Nash,
the selling
Pain & Co., of
stockholders.
Underwriter
—
J.
M.
Natick
mon
Office—401
Zook
by
Building, Denver
(letter of
stock (par $1).
working capital, etc.
Boston, Mass.
notification) 58,800 shares of com¬
Price—$5 per share. Proceeds—For
Underwriter—J. P. Marto & Co.,
'■
'•
Ave.,
S.E.,
Washington,
D.
C.
ratio
of
share for each
one
($100
per
ings..
Underwriter—None.
share).
Proceeds—To
held.
pre¬
bank
and
Carl
(par $5),
shares for account of certain selling
To be supplied by amendment.
167,520
Price
—
Co., Atlanta, Ga.
(letter of notification) 2,565 shares of common
stcck (par $10) to be offered for subscription by; stock¬
holders of record May 31; 1954 on the basis of one share
for each eight shares held (with an
oversubscription
privilege); rights to expire on June 21. Price—$15 per
May 24
1,-
share.
Proceeds—For
working capital. Office—1061 W.
N. W., Atlanta, Ga. Underwriter—None.
;
Marietta St.,
Panhandle Eastern Pipe Line Co. (6/17)
May 28 filed $35,000,000 of debentures due 1974. PriceTo be supplied by amendment. Proceeds—For
construc¬
tion program. Underwriters
Kidder, Peabody & Co.,
Beane
stock
Southern States Chemical
par
if Southern IHa-i Power Co. (6/14)
May 26 (letter of notification) 13,135 shares of common
stock (par $10) to be offered to common stockholders of
amendment.
&
common
geles, Calif.; Hornblower & Weeks, New York, and First
California Co., Inc., San Francisco,
Calif.
Offering—
Expected today (June 10).
tory drilling and development in Slate of Israel, and for
operations and expenses. Underwriter—To be named
by
Fenner
Power Co.
Proceeds—For construction program. Office—Las Vegas,
Nev.
Underwriters—William R. Staats & Co., Los An¬
common stock
(par one cent). Price—
To be supplied by amendment.
Proeeeds—For explora¬
Lynch, Pierce,
Loeb, Rhoades & Co.
and
stockholders.
000,000 shares of
Merrill
Co., Milwaukee, Wis.
Nevada
17 filed 217,520 shares of
pany
borrow¬
Pan-lcrael Oil Co., Inc. of Republic of Panama
March 30 filed American
voting trust certificates for
Dalton &
Southern
of which 50,000 shares are to be sold for account of com¬
shares
Price—At
reduce
F.
ner
May
first
seven
Stanley
stock
*
record
six
about June
shares
Lcs
held.
11
at
rate of
Price—$13
one
per
new
share for
share.
each
Proceeds—To
bank loans.
repay
Angeles,
Underwriters—Lester, Ryons & Co.,
Calif., and Smith, Polian & Co., Omaha,
Nebraska.
M.
Spokane Seed Co., Spokane, Wash.
if Fetala Mining Corp., Santa Fe, N. M.
filed 600,000 shares of cumulative
sinking fund
June 15, 1964,
preference
ern
March 8 filed $600,000 of 5% convertible debentures due
June 9
stock
stock
common
stock, for
to
one
and
300,000
be offered
shares
units
in
of
10-eent
to be sold to pea growers located in East¬
Washington and Northern Idaho. Price—100% of
principal amount. Proceeds—To improve facilities and
par
of two
preference
share. Price—$3 per unit. Pro¬
40,526 shares of outstanding preferred
for
common
retire
line extensions and electric transform¬
power
stock of Strevell-Paterson Finance
Co. on the basis (a)
Corporation stock for each of the 5,000
shares of 5% cumulative preferred stock (par $10) of
the Company and
(b) 23 shares of Corporation stock
•
Philadelphia Electric Co.
May 19 filed 944,952 shares of common stock (no
par)
being offered for subscription by common stockholders
of
7 at the rate of one new share for
each
shares held; rights to subscribe on
June 28. Price—
$34 per share. Proceeds
For construction
program.
Underwriter—None. Drexel & Co.,
&
Co.,
(letter of
notification)
vertible debentures due Dec.
31,
for
(6/11)
$300,000 of 4V2%
3940 Sennott
stock
each
class of
1961 to be offered first
of prin¬
Office—
St., Pittsburgh 13, Pa. Underwriter—None.
stock.
For manufacture of
'■
.•••••
•
'•
i
Price—$100 per unit.
sporting goods.
Office
•
•'
•:
•
■
Proceeds—
—
48
Moody
i
>.
ri
*'
-
\ /
/••
the
25,000
shares of $10
Offer expires
Oct.
Office—Salt Lake City, Utah.
stock
par
common
31.
Underwriter—
Statement effective
(no
par)
to
be
offered
for
possible
common
public
sale
during the period July 1, 1954 to June 30, 1955. Price—
At market. Proeeeds—To selling stockholders. Under¬
writer—None. The shares will be sold through brokerage
con¬
Co., Inc., Chestnut Hill, Mass. v
April 8 (letter of notification) 640 shares of $6 cumula¬
tive preferred stock
(no par) and 640 shares of common
stock (no par) to be offered in
units of one share of
of
company.
Sun Oil Co., Philadelphia, Pa.
April. 15 filed a maximum of 139,662 shares of
subscription by stockholders. Price—100%
Proceeds—For working capital.
cipal amount.
each
the
March 30.
Pittsburgh Athletic Co., Inc.
May 27
shares of
None.
Philadelphia, Pa.,
York, will act as
New
13
for
of
—
Stanley
Dealer-Managers.
Underwriter—None.
cents
York.
Morgan
capital.
stock (par 50
being offered in exchange for the $300,000 par
value
of
authorized, issued and outstanding capital
equipment and machinery, exploration and working
capital. Underwriter—Barrett Herrick & Co., Inc., New
ers,
and
working
Strevell-Paterson Finance Corp.
Feb. 19 filed 640,000 shares of common
houses.
Porta
Industries, Inc., Natick, Mass.
10
Alabama
if Smith Investment Co., Milwaukee, Wis. (6/11)
May 26 (letter of notification) 15 shares of common
(par $10). Price—$6,500 per share. Proceeds—To
Estate of Lloyd R. Smith, deceased. Underwriter—Gard¬
com¬
amendment.
and/or preferred stock
Minneapolis, Minn.
March
Price—At par (in denomina¬
Proceeds—To purchase and in¬
notes
secured
by real estate.
trust
Smith, the selling stockholder.
Office—50
St., New York, N. Y. Underwriter—Cooke and
Lucas, New York City.
Pacific Telephone &
Telegraph Co.
May 7 filed 1,004,603 shares of common stock to be of¬
fered for subscription
by common and preferred stock¬
holders in the
of
Church
12
com¬
deed
P.
of record June
Mountain States
Uranium, Inc.
May 18 (letter of notification) 30,000,000 shares of
$5 to $5,000).
Smith-Dieterich Corp.
May 27 (letter of notification)) 1,775 shares of common
stock.
Price—At par ($2.50 per share).
Proceeds—To
com¬
Company has applied
for exemption from competitive
bidding.
ceeds—To
Price—At the market price then
prevailing on the New
York Stock
Corp.
of
Underwriter-r-None.
shares and
Monterey Oil Co., Los Angeles, Calif.
of
in
Office—4041
—
cumulative
stock
(1*3,475,000), to
Denver, Colo.
(letter of notification) 800,000 shares
Colo.
demand.
on
tions
vest
Underwriter—None.
stock
—To
I
May 17 filed 900 shares of common slock (no
par), irrice
—$1,000 per share. Proceeds—To erect a hospital in the
Borough of Paramus, N. J., and for working
capital, etc.
Underwriter—None.
be
&
ferred stock (par $25).- Price—To be supplied
by amend¬
ment. Proceeds—For construction
program. Underwriter
ex¬
—
to
Wainwright
if Pacific Gas & Electric Co./ (6/23)
2 filed 1,000,000 shares of redeemable
4V2%
of
Corp., Grand Junction, Colo. (7/1)
May 27 (letter of notification) 2,000,000 shares of com¬
mon stock
(par one cent). Price—15 cents per share.
Proceeds—For mining expenses. Office—618 Rood
Ave.,
Grand Junction, Colo.
Underwriter
Tellier & Co.,
Jersey City, N. J. V v
General
C.
June
an
Underwriter—None.
Midland
notes, payable
•
share for each
new
Mesa Uranium
ance
Underwriter—H.
Address—P. O. Box
Underwriter—William E. Conly,
Longmont, Colo.
Longmont, Colo.
June 2
Office—60 State
expenses.
Business—Finance company.
if Rcma Investment Corp., Washington, D. C.
(letter of notification) $50,000 of 8% promissory
of
amount
Price—At par (5 cents per share). Proceeds
mining expenses. Office—1320 Main Street, Seat¬
tle, Wash. Underwriter—None.
(6/25)
notes held by an insurance
company and for further
pansion.
principal
mon stock.
oversubscription privilege).
July 19. Price—To be supplied b,y
on
$400
—For
June 4 filed 286,027 shares of common stock
(par $12.50)
to be offered for
subscription by common stockholders
on
of
• Olympic Uranium Co., Inc., Seattle, Wash.
May 27 (letter of notification) 1,000,000 shares of
by amendment.
of record June 25
units
St., Boston, Mass.
Co., Boston, Mass.
4.
one
Underwriter—To
expenses.
in
related
21
for
cent). Price
Proceeds—For ex¬
amendment.
and
sold
(par five cents) to be offered first to stock¬
holders.
Price—25 cents per share to
stockholders; at
market to public. Proceeds—To drill for oil and
gas on
ploratory drilling and development, in State of Israel,
and
194,
Jr..
10 shares of stock.
April 30
Mediterranean Petroleum Corp.,
Inc.,
Republic of Panama
1,000,000 shares of
be
tion of theater and
mon
March
—
loans.
Oklahoma Oil Co.,
None.
•
pur¬
Price—$500 per unit. Pro- I
ceeds—For actors' equity
bond, royalties, land, construc¬
Front
—
to
notes and
if iJfcMinnville Plywood Corp., Juneau, Alaska
May 27 (letter of notification) 60 shares of common
stock. Price—At par
($4,COO per share)( Proceeds—For
marketing of plywood.
Price—At par
(par
sells
St^Binghamton, N. Y. Underwriter—None.
production and
shares held.
common
North Shore Music Theater,
Inc., Boston, Mass.
Feb. 3 (letter of notification)
$80,000 of 5% notes due
Feb. 1, 1974, and 2,000 shares of common stock
for
and
five
share).
Proceeds—For general corporate
Office—Gibsonia, Pa. Underwriter—None.
poses.
common
financing.
Rio Grande Investment Co., Longmont, Colo.
April 19 (letter of notification) 1,150 shares of common
stock (no par) and 1,150 shares of 6% cumulative parti¬
cipating preferred stock (par $100) to be offered in
units of one share of each class of stock. Price—$100 per
unit. Proceeds
For operating expenses and to make
be
per
stock
Pumice, Inc., Idaho Falls, Idaho
March 29
(letter of notification)
1,170,000 shares of
common stock (par 10 cents).
Price—25 cents per share.
Proceeds—To complete plant, repay obligations and for
working capital.
Office —1820 N. Yellowstone, Idaho
Falls, Idaho.
Underwriter — Coombs & Co., Salt Lake
City, Utah.
Pittsburgh Telephone Co.
to
share for each
preferred
Proceeds—For
share).
'
& Gas
(letter of notification) 2,000 shares of common
offered for subscription by common stock¬
holders of record May
1, 1954, on the basis of one new
stock
—
cumulative
per
Nortex Oil
if Public Service Co. of Indiana, Inc.
June
9
filed
600,000 shares of cumulative preferrfed
stock (par $25). Price—To be supplied by amendment.
Proceeds
To redeem presently outstanding 600,000
shares of 4.90% cumulative preferred stock. Underwriter
—To be named by amendment.
Blyth & Co., Inc., San
Francisco and New York, handled previous preferred
—
April 23
Merrill Lynch, Pierce, Fenner & Beane and
Kidder, Peabody & Co., both of New York.
if Mcintosh Laboratory, Inc.
June 3 (letter of notification) 6,000 shares of
June 24. Of the
on
shares
of
per
North
stock
Underwriters
h^ld; rights to expire
16th
—A.
basis of 0.135
on
York.
1
(par
number
in the acquisition, manufacturing
Office—1511 Fox Building,
and Market Streets, Philadelphia, Pa. Underwriter
J. Grayson, New York.
'
working capital
and distribution of products.
.
Underwriter—Blyth & Co., Inc., New
purposes.
For
Inc.
Corp.
(6/17)
May 14 (letter of notification) 99,966 shares of common
stock (par $1)
Price—$3 per share. Proceeds—For pay¬
ments to creditors,
drilling and completion of well, and
working capital.
Office — Fidelity Union Life Bldg.,
Dallas, Tex. Underwriter—J. R. Williston & Co., New
eight shares held; rights to expire June 29. Price—To
be supplied by amendment.
Proceeds—For general cor¬
porate
Service
share. Proceeds—For property additions and im¬
provements. Office—317 Baronne St., New Orleans, La.
Underwriter—None.
:,v-V
share for each
common
.
\ Product
Development Corp.
May 4 (letter of notification) 300,000 shares of common
stock (par one cent).
Price—$1 per share. Proceeds—
outstanding, 1,059,901 (or
95.255%) are owned by Middle South Utilities, Inc. who
may subscribe for an additional 143,086 shares. Price—
stock (no par) to
stockholders of record
by
Public
stockholders of record June 1
common
Lily-Tulip Cup Corp. (6/15)
May 25 filed 88,000 shares of common
be
New Orleans
Thursday, June 10, 1954
St., Chestnut Hill, Mass.
Underwriter — Minot Kendall
$ Co., Inc., Boston, Mass. i *
*
"■
May 19 (letter of notification) 7,127 shares of common
stock (no par) being offered for
subscription by minority
unit.
per
*
—Mitchell Securities, Inc., Baltimore, Md.
Vegas Continental Hotel, Inc.
May 17 filed 500,000 shares of preferred capital stock
(par $9.90) and 500,000 shares of common capital stock
(no par—100 stated value) to be offered in units of one
Proceeds—To build and operate a luxury hotel
-
ceeds—For mining expenses.
Office—Carrizozo, N. M.,
and 1211 E. Capital
St., Washington, D. C. Underwriter
Las
preferred and
New Mexico Copper
Corp.
April 4 (letter of notification) 600,000 shares of common
stock (par 25 cents). Price—50 cents per share. Pro-
...
■.
if Tally Register Corp., Seattle, Wash.
May 28 (letter of notification) 40,000 shares of 5% non-*
cumulative convertible preferred stock (par $4) to be
exchanged for promissory notes at par; and 10,000 shares
of common stock to be offered at par
($1 per share).
Proceeds—For working capital.
Office—5300 14th Ave.,
N.W.? Seattle, Wash.
U,V.
!'*•>
s'£w.
Underwriter—ftone.
v'1'
*
~
><7* )
.Volume 179
Number 5332
.
f!
The Commercial and Financial Chronicle
..
61
Vni.
Tape Recording Corp., N. Y.
cash by the company in exchange for outstanding com¬
......
May 27 (letter of notification) * 15,000 ^shares'^f;'nonmon
stock of Equitable Office Building Corp. on basis
.cumulative preferred stock to be first offered for sub¬
of $5 in cash and $7 principal amount of debentures for
scription by common stockholders on the basis of oner* each share of Equitable stock. Exchange offer, which
was
preferred share for each four common shares held; rights
declared effective on June 7, has been extended
to expire on July
to expire on June 18.
1, 1954. Price—At par ($1 per share).
Underwriter—None.
Statement
Proceeds—For working capital. Office—201 East 42nd
effective May 5.
St., New York 17, N. Y. Underwriter—None. '
West Coast Pipe Line Co., Dallas, Tex.
Nov. 20, 1952 filed $29,000,000 12-year 6% debentures
Taylorcraft, Inc., Conway, Pa.
i
due Dec. 15, 1964, and 580,000 shares of common stock
April 30 (letter of notification) 150,000 shares of 6%
cumulative
convertible
preferred
stock, of which 100,public and 50,000 shares to
($2 per share). Proceeds—For
000 shares will be offered to
creditors.
Price—At par
working capital.
burgh, Pa.
Underwriter—Graham
,
.
&
:
..
Co.,
,r
• Telecomputing Corp., Burbank, Calif.
June
7
filed
Price—To
95,000
be
shares
supplied
of
by
capital
Pitts¬
..rv.
share of
one
$50 deben¬
Price—To be supplied by
amendment. Proceeds—From sale of units and 1,125,000
one
additional shares
of
stock.
stock
common
and
private sales oi
$55,000,000 first mortgage bonds to be used to build
* .
1,030
(6/28)
(par $1)1'
Proceeds—For
stock
amendment.
(par 50 cents) to be offered in units of
ture and
mile
Weld
pipeline.
Underwriters
—
a
White.
Co. and Union Securities Corp., both of New
Offering—Postponed indefinitely.
&
York.
manufacture of "Point O'Sale Recorders" and for further
oil
crude
West Coast Pipe Line Co.,
Dallas, Tex.
development and production of other units in com¬
pany's automatic business controls program. Underwrit¬
Nov. 20, 1952 filed 1,125,000 shares of common stock (pai
50 cents).
Price—To be supplied by amendment. Pro¬
ers—Hill
ceeds—Together with
Richards &
both of Los
Co. and
Angeles, Calif.
William R.
■
•.
,
Tennessee Gas Transmission Co.
Staats
&
Co.,
1974.
Proceeds—To
construction.
be
new
determined
by com¬
petitive bidding. Probable bidders: Halsey, Stuart & Co.
Inc.: Stone & Webster Securities Corp. and
White, Weld
& Co. (jointly).
Bids — Tentatively expected to be re¬
ceived up to 11 a.m. (EDT) on June 21.
it Texas Instruments, Inc., Dallas, Tex.
May 28 (letter of notification) 30,000 shares of
stock
(par
total
Price—At
market
Office—6000
Lemmon
Underwriter—Schneider,
common
(aggregate
$300,000).Proceeds—To
over
holders.
$1).
not
to
four
selling stock¬
Dallas, Texas.
Hickman, Dallas,
Avenue,
Bernet
&
Texas.
ceeds—For
mining
St., Reno, Nev.
Office—139
expenses.
N.
Virginia
•
Transportation Development Corp. (6/21)
April 26 filed 100,000 shares of common stock (par $1).
Price—$6 per share. Proceeds—To finance the costs of
obtaining contracts for the construction of the com¬
pany's transportation system, for working capital and
other
general corporate purposes.
L. H. Rothchild & Co., New York.
Trican
Petro-Chemical
Corp.,
April 30 filed 500,000 shares of
Price
To
—
offering.
corporate
be
related
Underwriters—
/
Montreal,
stock (par $1).
price at time of
common
the market
to
Canada.
Proceeds—For development costs and general
Underwriter — To be named by
purposes.
amendment.
• Twentieth Century Foods Corp., Springfield, Mo.
June 2 (letter qf notification) 120,000 shares of class A
stock
common
ceeds—To
(par $1).
retire
Office—303
RFC
East
writer—White
•
Price—$2.50
loan
Olive
share.
Pro¬
and
for Working
capital.
Springfield, Mo.
Under¬
per
St.,
Co., St. Louis, Mo.
&
United States
Sulphur & Chemical Corp.,
Carson City, Nev.
(6/18)
April 30 filed 380,000 shares of common stock (par $1).
Price—$2 per share. Proceeds — For acquisitions, ex¬
ploration and development expenses, and for working
capital. Underwriter—Vickers Brothers, New York.
•
•
Western Plains Oil & Gas Co.
May 24 filed
Price—$4.75
of record June 8
six
shares
$17.50
on
the basis of
new
share for each
held; rights to expire on June 22. Price—
share.
Proceeds—To repay bank loans in¬
per
curred for construction
remainder
one
to
be
requirements of subsidiaries and
advanced
or
Underwriter—Kidder, Peabody
invested
&
in
subsidiaries.
($2,500); for purchase
interests, leases
May 27
mon
(letter of notification)
stock (par one cent).
Price—25
com¬
cents per share.
mining expenses. Office—402 Boston
Building, Salt Lake City, Utah. Underwriters — Carroll,
Kirchner & Jaquith, Inc., Denver, Colo., and Cromer
Brokerage Co., Salt Lake City, Utah.
Proceeds
—
For
it Verdi Development Co., Carson City, Nev.
May 27 (letter of notification) 597,334 shares of capital
stock
(par 10 cents).
Price—5 cents per share.
Proceeds
For mining expenses.
Office — Virginia & Truckee
Building, Carson City, Nev. Underwriter—None.
—
it Waldemar Press, Inc., Indianapolis, Ind.
May 27 (letter of notification) 2,000 shares of 5% cumu¬
lative preferred stock.
Price—At par ($50 per share).
Proceeds—For new equipment, expansion and working
capital.
Office—3334 Sutherland Avenue, Indianapolis
18, Ind.
Underwriter—None.
May 27
(letter of notification) 2,000 shares of common
Price —$5 per share.
Proceeds — To
W.
Sams, President, the selling stockholder.
stock
Underwriter—None.
Washington Gas Light Co. (6/22)
May 26 filed $5,000,000 of refunding mortgage bonds due
1979.
—To
Proceeds—For construction program. Underwriter
determined by competitive bidding. Probable
be
bidders: Halsey, Stuart & Co. Inc., and Union Securities
Corp. (jointly); Kidder, Peabody & Co.
to be received up to 11 a.m.
(EDT)
pany's office in Washington, D. C.
Webb &
on
Bids—Expected
June 22 at
com¬
Knapp, Inc., New York
April 14 filed $8,607,600 of 5% sinking fund debentures
due June 1, 1974, being offered together with certain
States and
Rice &
Williston
stock
(par
cent).
one
com¬
Price—Two cents per share.
Proceeds —For
exploration costs. Office — 420 Fidelity
Oklahoma City, Okla. Underwriter—Tellier
Co., Jersey City, N. J.
it Wisconsin Southern Gas Co., Inc.
May 27 (letter of notification) 12,618
stock
mon
$10)
to
be
holders of record June
share
for
Proceeds—To
Broad
235
redeem
collateral
Lake
Street,
trust
Geneva,
None.
Office—
bonds.
Wis.
Price—
share to pujolic.
per
wells, to
pay
indebted¬
and
for working
capital.
Underwriters— Dallas
Rupe & Son, Dallas, Texas; and
Straus, Blosser &'Mc¬
Dowell, Chicago, 111. (latter handling books).
ness
Central
Illinois Electric & Gas Co.
u* |
Dec. 9 it was announced
company intends to
sell around the middle of 1954
an issue of
mortgage bonds. Proceeds—To
new
repay
offer an4
$4,000,000 first,
bank loans and for
construction.
Underwriters—To be determined by
bidding. Probable bidders: Halsey, Stuart
& Co.
Inc.; Stone & Webster Securities Corp.; Kidder*
Peabody & Co. and White, Weld & Co.
(jointly).
it Chicago, Burlington & Quincy RR.
; f?;
competitive
June 5 the company
applied to the Interstate
Commission for authority to issue
Commerce
$7,350,000 equipment
July 1, 1954, and mature
semi-annually to and including July 1, 1969. Probable,
bidders: Halsey, Stuart & Co.
Inc.; Salomon Bros'..'&
Hutzler; Kidder, Peabody & Co.; Blair, Rollins & Co. inc.
trust
certificates to
be
dated
City Title Insurance Co., N. Y. C.
i.
May 20, it was announced that company is
planning ta
issue and sell not to exceed
$1,000,000 of new preferred
stock.
Proceeds—For working capital.
Underwriter—
Chilson, Newberry & Co., Inc., Kingston, N. Y.
f ^'
'■JO'
it Colorado Interstate Gas Co.
June
000
8
it
was
announced
I,
stockholders
will
vote
July 8
increasing the authorized preferred stock from 200,shares to 500,000 shares
(par $100). It is repotted
that company has announced
plans to market some
000,000 of preferred stock and $30,000,000 of new
bonds,
likely to go into registration within the next
Underwriter—If through negotiation,
may., be
New York.
are
fortnight.
Securities Corp.,
..
Colorado-Western Pipeline Co.
March 5 it
announced company
was
Underwriter—
'/v"'"
Wyoming Oil & Exploration Co., Las Vegas, Nev.
April 29 filed 500,000 shares of common stock. Price—
At par ($1 per share).
Proceeds—For exploration and
development of oil and gas properties. Underwriter—
None.
authority to build a $21,500,natural gas pipe line, in
Colorado, to be financed
through sale of about 70% of bonds and 30% of equity
capital.
John R. Fell, a partner of Lehman
Brothers, i*
a
Vice-President.
oj&'W
it Columbia Gas System, Inc.
sell
it
announced
was
Corp., Seattle, Wash.,
company
this year $40,000,000 additional senior deben¬
(in addition to $40,000,000 debentures due 1979 for
which bids
expected to be received
are
June 28—see
on
preceding column under "Securities Now in Registra¬
tion"), Proceeds—To repay bank loans and for new con¬
a
struction.
Underwriter—To be determined by competi¬
tive bidding.
Probable bidders:
Inc.; Morgan Stanley & Co.
Halsey, Stuart &
' *
t
Consolidated Gas Electric Light & Power
on a
"best efforts basis."
1
May 26 it
reported
was
plans, following set¬
$15,000,000 to
Underwriter—For bonds,
to be determined by
competitive bidding. Probable bid¬
ders: Halsey, Stuart & Co.
Inc.; White, Weld & Co. and
The First Boston Corp.
(jointly); Kuhn, Loeb & Co.;
Harriman, Ripley'& Co. Inc. and Alex. Brown & Sons
(jointly).
*
$25,000,000 of
company
securities.
new
the authorized
shares
when
to
common
enable
the
necessary.
a
proposal to increase
stock from
4,000,000 to 5,000,000
compariy to sell additional shares
Offering
will
probably
be
made
programs.«
eral corporate purposes.
New York.
,
,
not greater than
Feb. 22
it
Gas
Co.
sell its
holdings of 1,900,000 shares of this company's stock.
If
sold at competitive bidding, bidders may include Smith,
Barney & Co. and Blyth & Co., Inc. (jointly).
reported Cities Service Co.
was
Arkansas Power &
it
8
was
August,
bonds
(8/24)
Light Co.
probcblj
issue of about $7,500,000 first mortgage
Underwriters — To be determined by
an
due
may
reported company plans to sell,
1984.
bidding. Probable bidders: Halsey, Stuart
<fe Co. Inc.; The First Boston Corp.; Lehman Brothers,
Stone & Webster Securities Corp. and White, Weld &
competitive
Blyth
(jointly);
Corp.
and
Lynch,
Co.,
Securities
(jointly); Memll
Union Securities
Bids—Expected about Aug. 24.
Fenner
Corp. (jointly).
Equitable
Inc.,
Central Republic Co.
Pierce.
Boston
&
Edison
Co.
&
Beane
Inc.
and
(7/26)
000
company
of first mortgage
Proceeds — For
Underwriters—To be determined
by competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; The First Boston Corp.; Lehman Brothers;
Kuhn, Loeb & Co. and A. C. Allyn & Co. Inc. (jointly);
White, Weld & Co., Harriman Ripley & Co. Inc. Bids-r
Tentatively expected on July 26. Stockholders will vote
on June 30 on approving bonds issue.
construction
bonds due 1984.
program.
this
•
Bullard
common
announced
company
stockholders about
stock.
common
Fenner
Co.
was
&
& Weeks.
plans to offer to its
100,Q00 additional shares of
Merrill Lynch, Pierce,
Underwriters
—
Beane; White, Weld & Co.; and Hornblower
new
share for each 12 shares held.
summer.
First
V
.
National
Bank
of
Toms
May 14 stockholders "of record
River, N. J.
May 1, 1954 were given
the right to subscribe for an additional
3,000 shares of
capital stock (par $10) on the basis of one new share
for
each
26
Price—$50
surplus.
•
shares
per
held; rights to expire
on June 16.
Proceeds—To increase capital and
share.
Underwriter—None.1,
First Trust &
Deposit Co., Syracuse, N. Y.
June 2 it
mon
the
was announced
company is offering to its com¬
and class B preferred stockholders of record June 1
right to subscribe
shares
of
basis of
new
one
5%
on
or
before June 22
convertible
preferred
share for each 10 shares of
preferred stock held.
for
254,316
stock
common
on
or
the
class
Price—At par
($20 per share).
this sale, together with proceeds from
private sale of $5,000,000 5% debentures, to retire $8,996,400 of class A preferred stock held by Reconstruction
Proceeds—From
Finance
Corporation.
Underwriter—William
N.
Pope,
Inc., Syracuse, N. Y.
Florida Power Corp.
/
March 27, it was announced that the
company plans new
financing late this summer which would require issu¬
ance of common stock and
probably
Proceeds
common
May 28 it
one
Proceeds—To pay off $2,000,000 of bank loans.
Offering
—Expected not later than Oct. 1, .1954; probably"
early
B
sought permission of Massachusetts
Department of Public Utilities to issue and sell $18,00024
,
April 30 trustees authorized issuance of additional com¬
stock (par $10) to present
stockholders on a basis
mon
Underwriter—None.
Louisiana
Underwriter—Ira Haupt & Co.,
Registration—Expected in June, 1954.>
Utilities Associates
*
f
;
Eastern
to
present stockholders. Proceeds—To subsidiaries for their
construction
was reported 160,000 shares of common stock
publicly offered—100,000 shares for account of
company and 60,000 shares for selling stockholders. Price
—In neighborhood of $10
per share. Proceeds—For
to be
are
American Natural Gas Co.
April 28 stockholders approved
.
Beverage Corp.
May 5 it
Prospective Offerings
Co.
Co.
Co. of Baltimore
.
in
•
plans to issue and;
later
tures
Cott
Feb.
*
^
tlement of rate case, to issue and sell from
Wyton Oil & Gas Corp., Newcastle, Wyo.
April 20 filed 1,000,000 shares of common stock (par $1).
Price—$1.12 V2 per share.
Proceeds—For general cor¬
porate purposes.
Underwriter — National Securities
•
li''
'
has applied to Colo¬
000
March 5
shares of com¬
offered to common stock¬
1, 1954, on the basis of one new
each five shares held.
Price—$11 per share.
(par
new
rado P. U. Commission for
Bank Bldg.,
&
Proceeds—To drill about 21
Union
Oil
Hf„,
shares held.'
common
58.10 per share to
stockholders; $9
Canada and for other corporate pur¬
Ventures, Inc. (7/1)
May 20 (letter of notification) 2,500,000 shares of
mon
class A share for each two
which
Basin
(7/6-9)
it
was reported
company expects to offer-Up. its
stockholders an issue of 260,000 shares of
6%
convertible class A stock
(par $7.50) on. a basis of one
acquisition of addi¬
and royalties in the
Office—Glendive, Mont. Underwriter—Irving J.
Co., St. Paul, Minn.
poses.
May
(no par).
Howard
(par $1).
or
mineral
Arkansas
it Utah National Uranium Mining Corp.
stock
3
common
on
share. Proceeds—To redeem 1,250 out¬
shares ($125,000), to repay bank
per
loan, etc.
United
(6/28)
common
preferred
Co., New York.
(6/14)
1,199,600 shares of
100,000 shares of
standing
United
Utilities, Inc.
May 19 filed 213,261 shares of common stock (par $10)
being offered for subscription by common stockholders
•
West Ohio Gas Co., Lima, Ohio
May 10 (letter of notification) 22,386 shares of common
stock (par $5), to be offered to common stockholders
of record May 15 in the ratio of one new share for each
15 shares held.
Price—$10 per share.
Proceeds—For
general corporate purposes.
Office — 319 West Market
St., Lima, Ohio.
Underwriter—None.
tional
Three-In-One Gold Mines Corp., Reno, Nev.
May 3 (letter of notification) 1,993,333V3 shares of capi¬
tal stock (par one cent). Price—15 cents
per share. Pro¬
for
Underwriters—White, Weld & Co. and Union
Corp., both of New York. Offering—Post¬
poned indefinitely.
'
Securities
bank loans and for
repay
Underwriter—To
be used to build
pipeline.
;
(6/21)
May 26 filed $25,000,000 first mortgage pipeline bonds
due
other funds, to
★ Byrd Oil Corp., Dallas, Tex.
June
—
For
new
construction.
$10,000,000 of bonds.
Underwriters — For
stock
(first to common stockholders), Kidder,
Peabody & Co. and Merrill Lynch, Pierce, Fenner &
(jointly). For bonds, to be determined by com¬
petitive bidding. Probable bidders: Halsey,
StuarJ & Co.
Inc.; The First Boston Corp.; Lehman Brothers; Kidder,
Beane
Continued
on
page 62
The Commercial and Financial
62
New
Continued jrom page
61
& Co. and Merrill Lynch, Pierce, Fenner &
(jointly). Common stock was increased by stock¬
holders on March 25 from 2,500,000 shares to 5,000,000
shares, and the preferred stock from 250,000 shares to
500,000 shares.
Peabody
Hercules Cement Corp.
May 20 it was announced company plans early registra¬
tion of 40,000 shares of common stock to be offered
for subscription by common stockholders on the basis
of one new share for each four shares held. Proceeds—
expansion and modernization.
For
Underwriter—Stroud
Co., Inc., Philadelphia, Pa.
&
........
Electric Co.
plans to sell around
issue of about $16,500,000 first mort¬
Indiana & Michigan
Jan. 27 it was announced company
November, 1954, an
Public
offer for sale
bonds due 1984 late this
Underwriters—To be determined by competitive
Probable bidders: Halsey, Stuart & Co. Inc.;
Equitable Securities Corp.; Union Securities Corp. and
Harriman Ripley & Co. Inc. (jointly); Lehman Brothers:
Kidder, Peabody & Co. and Stone & Webster Securities
Corp. (jointly); The First Boston Corp.; White, Weld &
bidding.
Co.
Thursday, June 10, 1954
Northern States PoweriCo.
Feb. 8 it
was
and sale of
Urmerwriters
—
and White, Weld & Co.
Corp.
(jointly).
about
1984. Proceeds—Foi
construction program. Underwriters—To be determined
by competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; White, Weld & Co.; Kidder, Peabody & Co
and Drexel & Co. (jointly); Kuhn, Loeb & Co. and Salo¬
^ Minneapolis,1 St. Paul & Sault Ste. Marie RR.
applied to the ICC for authority to is¬
sue
and sell $1,950,000 equipment trust certificates to
be dated Aug. 1, 1954, and to mature in 30 equal semi¬
annual installments to and including Aug. 1, 1969. Probable^bidders: Halsey, Stuart & Co. Inc.; Salomon Bros.
June 8 company
.
v
bidding. ~ Probable bidders: 'Halsey, Stuart & Co.
Inc.; Blyth & Co., In«., White, Weld & Co. and Merrill
Lynch, Pierce, Fenner & Beane (jointly); Blair, Rollins
tive
{
Fuel Gas Co.1
reported company plans to offer about
9,108,824
a
stockholders
l-for-10
common
next
basis.
shares.
Fall
There
additional
are
Proceeds
—
common
outstanding
For construction
program of subsidiaries. Underwriters — To be
mined by competitive bidding. Probable bidders:
deter¬
Blyth
Co., Inc., Lehman Brothers and Bear, Stearns & Co.
(jointly); Carl M. Loeb, Rhoades & Co., Ladenburg,
Thalmann & Co. and Wertheim & Co. (jointly); Merrill
Lynch, Pierce, Fenner & Beane, Kidder, Peabody & Co.
and White, Weld & Co. (jointly).
&
New Jersey Power & Light Co.
16 it was reported this company tentatively plani
issue and sale in 1954 of about $3,000,000 first mortgage
Dec.
bonds due 1984.
Proceeds—To repay bank loans and for
construction.
Underwriters—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Kuhn, Loeb & Co. and Lehman Brothers
(jointly); Equitable Securities Corp.; Union Securities
Corp. and White, Weld & Co. (jointly); Merrill Lynch,
Lew
Pierce, Fenner & Beane.-
-
Co.
International
it
8
on
Underwriter—Previous
gage bonds.
Underwriters—Lehman Brothers and Wood,
Gundy & Co., Inc., both of New York.
Transcontinental Gas Pipe Line Corp.
March 16 it
to
was
sbme
do
reported company plans later this year
financing to repay temporary
permanent
bank loans necessary to pay for new construction esti¬
mated to cost about $11,000,000 for 1954. Underwriters-
White, Weld & Co. and
Corp., both of New York.
Stone
Webster
&
Securities
Tri-Continental Corp.
3p stockholders voted to reclassify 500,000 shares
presehtly authorized but unissued $6 cumulative pre¬
March
of
ferred
stock, without
class
possible
of
ta
par
preferred
value, into 1,000,000 shares of a
stock, $50 par value, making
refunding of the outstanding $6 preferred
stock at an appropriate time, when conditions
warrant.
Underwriter—Union Securities Corp.^New York.
*
Ultrasonic Corp.
securitie»"to
provide
j
^
May 17 ft was reported
company plans to offer some new
working capital.
Details
available.,...
May
it
11
Improvement Co.
was
reported
company
$10,000,000 of first mortgage
writer
not
yet
;
United Gas
To
be
(7/12-16)
may
bonds
due
issue
1979.
and
sell
Under¬
determined
by competitive bidding.
Halsey, Stuart & Co. Inc.; Blyth &
Inc.; Kidder, Peabody & Co.; Morgan, Stanley &
Co. and Drexel & Co.
(jointly); The First Boston Corp.;
Blair, Rollins & Co. Inc. Registration—Expected about
June 15 to June 18.
Bids—Tentatively set for week of
awarded that issue in July, 1952, on a
—
Probable
bidders:
Co.,
Resources of Canada
Investment Fund, Ltd.
April 27 the SEC authorized the company to register as
an investment concern and to make a public offering of
July 12.
securities in the United States.
•
Electric Corp.
Western Pacific RR. Co.
March
10 company applied to the ICC for
exemption
competitive bidding on its proposed $22,500,000
debenture issue.
The
30-year 5% income securities
would be offered in exchange for
225,000 of $100 par
preferred stock, of the more than 300,000 shares out¬
standing. The company plans to offer $100 of deben¬
issue and sell this
year some additional bonds and preferred stock.
Pro¬
ceeds— For new construction.
Underwriters—(1) For
bonds to be determined by competitive bidding. Prob¬
able bidders:
Halsey, Stuart & Co. Inc.; Kidder, Pea¬
body & Co. and White, Weld & Co. (jointly); Salomon
Bros. & Hutzler; Shields & Co.; Blyth & Co., Inc.; The
First Boston Corp.; Union Securities Corp. and Equit¬
able Securities Corp. (jointly). (2) For preferred stock,
from
The First Boston Corp.
has been delayed.
reported
company may
tures, one-fifth of
mined
share of
common,
and
an
undeter¬
payment for each share of preferred stock
remaining outstanding W
shares of preferred stock This proposed
recapitalization
★ Western Pacific RR. Co.
Power Co.
April 1, Rockwell C. Tenney, Chairman of the Board, an¬
1954 construction program, estimated
$14,000,000, will require further financing. Common
stock financing to stockholders in 1953 was underwritten
by Merrill Lynch, Pierce, Fenner & Beane. An issue of
$8,000,000 bonds were also sold last year at competitive
bidding, with the following making bids: Halsey, Stuart
& Co. Inc.; Equitable Securities Corp.; Kuhn, Loeb &
Co.; Stone & Webster Securities Corp.; The First Boston
Corp. and Salomon Bros. & Hutzler (jointly); Lehman
Brothers; Merrill Lynch, Pierce, Fenner & Beane.
'*
a
cash
and then redeem the then
Rockland Light &
nounced that the
Sulphur Co.
was
proximately
$292,000,000,
which would be financed
through the issuance of about $36,500,000 each of com¬
mon stock and debentures and
$219,000,000 of first mort¬
„
was
Proceeds—
determined
March 26 it
negotiated basis.
May 17 it
be
Trans-Canada Pipe Lines, Ltd.
was annouced that the cost of the building
of the proposed cross-Canada gas pipeline would be ap¬
Underwriter—
competitive bidding.
Rochester Gas &
to
the Isthmus of Tehuantepec in
financing was handled
by Vickers Brothers, New York City.
was
were
Underwiters—To
construction.
Texas
Mexico.
June, 1952, for the 5.40%
(who
planned
announced company plans soon to file a
registration statement with the SEC to cover an offer¬
ing of common stock to finance a sulphur exploration and
'
England Electric System
April 29 it was announced company plans to offer to
on
•
June
issue, which was re¬
jected); R. W. Pressprich & Co. and Spencer Trask &
New
common
in
is
It
bidding.
Probable
bidders:
Halsey,
Stuart & Co. Inc.; Stone & Webster Securities Corp. and
White, Weld & Co. (jointly).
'
*t
body & Co. and Blyth & Co., Inc. (who made the only
bid
Dillon, Read & Co., New York, handled secondary offer¬
ing in 1943.
stock
competitive
competitive bidding, bidders may include Kidder, Pea¬
i
400,000 shares of capital stock (no par) for subscription
by stockholders later this year or early next year. Stock¬
holders on April 29 approved a proposal to increase the
authorized
capital stock from 4,000,000 to 6,000,000
shares. Proceeds—For new construction. Underwriter—
its
new
b.y
Public Service Co. of New Hampshire
preferred stockholders approved a proposal fo
the
authorized preferred stock from 160,000 shares to 300,000 shares, of which it is planned
to issue not in excess of 75,000 shares. Proceeds—To re¬
fund outstanding 50,000 shares of 5.40% preferred stock
and for new
construction.
Underwriter—If through
increase
Underwriter—To be determined by competi-
was
For
May 7
Moptana-Dakota Utilities Co.- March 17 it was reported th&t company plans to issue
and sell late this year some additional first mortgage
bonds. Proceeds—To repay bank loans and for new con¬
April T it
series H bonds.
and
shares.
$25,000,000 bonds filed May 26 with SEC).
new
.-*■
National
to
reported company plans to finance its
1954
construction program through
temporary bank
loans, with permanent financing delayed until later in
the year. Previously, the company had planned to float
an
issue of $15,000,000 first mortgage bonds, due 1984,
early in 1954. Underwriters—To be determined by com¬
petitive bidding. Probable bidders: Halsey, Stuart & Co.
Inc., Kuhn, Loeb & Co.; The First Boston Corp.; Harris,
Hall & Co. Inc.; Harriman Ripley & Co., Inc. and Union
Securities Corp. (jointly); Lehman Brothers;
Kidder,.
Peabody & Co*; Blyth &-Ca, Inc. and Smith, Barney &
Co. (jointly).
Bros.& Hutzler (jointly).
1,200,000
reported company plans issuance and sale
of debentures later in 1954 (in addition
was
of $20,000,000
Public Service Co. of Colorado
April 12 it
to
Tennessee Gas Transmission Co.
May 24 it
Probable bid¬
Co. Inc.; The First Boston Corp.;
Glore, Forgan & Co.; Kuhn, Loeb fy Co. Offering—Ex¬
pected in July or August, 1954.
$3,500,000 first mortgage bonds due
shares
stock offering to stockholders in 1948; subse¬
quent common stock financing was not underwritten.
ders: Halsey, Stuart &
Metropolitan Edison Co.
'
was reported company may sell in 1954
,
series F
of
development program
To be determined by
Dec. 16 it
& Co. Inc.
refund
To
Registration—Expected about June 16.
issue
common
Peoples Gas Light & Coke Co.
May 10 it was reported company plans the sale of $40,000,000 first and refunding mortgage bonds. Proceeds—
one-for-eight basis.
a
stockholders
an
Pueblo, Colo.; and Boettcher & Co. and Bosworth, Sul¬
livan & Co., both of Denver, Colo.; who underwrote
Calgary, Dome Exploration
(Western) Ltd. of Toronto, and Carl M. Loeb, Rhoades
Proceeds
—For
new
construction.
Underwriters—Blyth & Co.
Inc., The First Boston Corp. and W. C. Langley & Co.
on
■
Power Co.
raise about $3,500,000 through issuance and sale of new
securities.
Underwriters—May be Hutchinson & Co.,
was
& Co. of New York.
shares
in the
were
to approve a proposal to
50,000 shares of preferred stock, (par
$50) and to increase the authorized common stock.from
jointly by Mannix Ltd. of
May 21 company announced plans to offer rights to com¬
mon stockholders early in July to subscribe to 690,062
14
create
Line Co. (Canada)
April 14 it was announced company has been granted
the right to obtain a permit to build a 72-mile pipe
line to transport crude oil from the Pembina Oil Field
in Alberta to Edmonton.
Financing will be handled
Long Island Lighting Co.
struction.
May
Pembina Pipe
Barney & Co,
& Hutzler.
Southern Colorado
Probable bidders: Halsey, Stuart &
Blyth & Co., Inc. and White, Weld & Co. (joint¬
ly); Kidder, Peabody & Co.; Union Securities Corp.;
Lehman Brothers, Bear, Stearns & Co. and Salomon
Bros. & Hutzler (jointly).
competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; W. C. Langley & Co.; Blyth
& Co., Inc, and The First Boston Corp. (jointly); Smith,
(Wash.)
holders of 2,000 additional shares of capital stock
ratio of one new share for each nine shares held.
Co. Inc.;
by
Savings Bank
proposal to approving the issuance and sale to stock¬
a
on
competitive bidding.
Long Island Lighting Co.
V
April 20 it was announced company plans later in 1954
to issue $20,000,000 mortgage
bonds.
Proceeds — To
finance construction program.
Underwriter—To be de¬
in¬
announced stockholders will vote in, June
was
1,000,000
(merged with Pacific Power & Light Co. debt and for
new construction.
Underwriters—To be determined by
mon
May 26 it
|
(jointly); Kuhn, Loeb
J>.8c Co., Salomon Bros. & Hutzler and Union Secuntiei
Corp. (jointly); Glore, Forgan & Co.; Blyth & Co., Inc.
and The First Boston Corp. (jointly); White, Weld & Co.
and Shields & Co. (jointly); Harriman Ripley & Co., Inc.t
Equitable Securities Corp.
Meeting—Stockholders on
April 27 aprpoved new financing.
which
company
Seattle Trust &
To
Pacific Power & Light
it
proposals
stock from 5,000,000 to
shares and the authorized indebtedness of
from $25,000,000 to $50,000,000.
The
company has
no
specific financing program.
Under-'
writers—Previous offering of $24,952,800 3% convertible
debentures, in September, 1953, was underwritten by
Drexel & Co., Smith, Barney & Co. and Merrill Lynch,
Pierce, Fenner & Beane.
*
May 25
approved
common
10,000,000
the
by competitive bidding.
Wertheim & Co.
'
Paper Co.
stockholders
27
creased the authorized
Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Lehman Brothers and
Riter & Co.
(jointly); Smith, Barney & Co.; Glore,
Forgan & Co.; Merrill Lynch, Pierce, Fenner & Beane,
Kidder, Peabody & Co; and White, Weld & Co. (jointly);
Equitable Securities Corp. and Union Securities Corp.
(jointly); Kuhn, Loeb & Co., A. C. Allyn & Co. Inc. and
determined
be
Brothers and Bear, Stearns & Co.
(jointly).
April
approximately $20,000,000 of first mortgage
Co.
reported company may issue and sell
about $30,000,000 of new bonds later this year. Proceeds
—To refund all outstanding Mountain States Power Co.
common
determined
ders:
(Minn.)
bonds due 1984 in October of 1954.
—
new
estimated, will cost $1,661,000. Underwriters—May
by competitive bidding.
Probable bid¬
Halsey, Stuart & Co. Inc.; Smith, Barney & Co.,
and Glore, Forgan & Co./ (jointly); Union Securities
Corp.; White, Weld & Co.; Equitable Securities Corp. ^
be
reported company is planning the issuance
Of 1954 $16,000,000 first mortgage bonds. Pro¬
ceeds
To repay bank loans and for new construction.
Underwriters—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Lehman
termined
it is
Scott
latter part
4
.
Joseph Light & Power Co.
Semrad, President, announced that the
company may raise new money this^year througfr the
sale of $1,000,000 first mortgage bonds or from tempo¬
rary bank loans for its 1954 construction program, which,
York, New Haven & Hartford RR.
May 26 it was reported company will offer and sell $6,600,000 equipment trust certificates due Jan. 1, 1955 to
1969, inclusive. Probable bidders: Halsey, Stuart & Co.
Inc.; Salomon Bros. & Hutzler; Kidder, Peabody & Co.;
Blair, Rollins & Co. Inc.
Kahsas^City Power & Light Co.
March 8 it was announced that company may sell in tn«
.
.
March 30, C. A.
New
(jointly); The First Boston Corp.; Harriman Ripley &
Co. inc.; Kuhn, Loeb & Co.; (2) for preferred—The First
Boston Corp.; Smith, Barney & Co.; Lehman Brothers;
*
.
St.
Inc.
Service
reported company plans to
year.
bonds due 1984 and 40,000 shares of cumulative
preferred stock (par $100).
Underwriter — To be de¬
termined by competitive bidding.
Probable bidders: (1)'
For bonds—Halsey, Stuart & Co. Inc.; Union Securities
Corp., Goldman, Sachs & Co.
was
$6,000,000 of first mortgage
gage
Union Securities
Orleans
Feb. 8 it
Beane
,
Chronicle
(2586)
June 4 it
was
^
announced stockholders will vote June 30
approving a proposal to allow company to sell first
refunding bonds without obtaining approval of
preferred stockholders. It is planned to issue and sell
$6,500,000 of these bonds.
Proceeds —To reimburse
on
.
and
at
for capital expenditures already made and for
improvements.
Underwriters
May be deter¬
company
future
.
—
mined by competitive bidding. Probable bidders:
Halsey
Stuart & Co. Inc.; Union Securities
Corp. and Glore*
(jointly); Blyth & Co., Inc.; Lehman
Brothef&.ancLBear, Stearns & Co. (jointly).
Forgan
.
■
&
Co.
Volume 179
Number 5332
..
The Commercial and Financial Chronicle
.
(2587)
Stores
Utilities
postponed
$16,000,000
and
inclined
date
for
Co.
inarket
DIVIDEND
consider
a
plans
The Board of
to
first
issue
new
market
had
its
really encouraging develop-
ments
in
week
than
more
when
turned
out
■»*
1760 t.
Aluminum
Co.
of
order for investors.
1
Naturally
those
who
have
steadfastly opposed the competi-
y
AUdltlS,7 Jf. HOW
CHICAGO, 111.—Fred E. Adams,
Jr.
has
become
with
associated
to note that this successful operas
tion
Weeks in
tive
bidding
basis
the
as
securities,
new
carried
was
the
for
were
quick
through
by
record
Currency
Swift, Henke & Co., 135 South La
Salle Street, members of the Mid¬
west
Stock
Exchange.
He was
formerly
with
Hornblower
&
sale of
payable
Convertibility
the trading department.
negotiation.
fried Haberler
American
—
East-West Trade
ference
for
Citizens Con¬
—
International
oppor¬
issuer of what
terms it would require to assure
a
really successful financing op¬
eration.
the
That
their
ideas
orders.
The $100,000,000 of new 25-year
and
carried
similar
a
3%
a
yield
coupon
since
they
^ere
priced at par. But in addi¬
tion,
they
carry
sinking fund,
a
starting in 1956, sufficient to
DETROIT, Mich.
Weed has become
William F.
—
associated with
First
of
Michigan Corp.,
Buhl
Building, members of the Detroit
and Midwest Stock
Exchanges. He
to
maturity at 100. They
able
on
a
at
ranging
prices
Foreign Exchange
Britain:
Regulations in
9th
Supplement
—Bank for International Settle-,
scale-down to par
Although it could not be termed
completely
"out-the-window"
deal, the heavy demand for this
issue had the effect, apparently of
a
general market
generating
real
interest
in
big offerings which had
been
lagging since subscription
books opened several weeks ago.
byi
several
Stirring
-Interest
the
In
(Special to The Financial Chronicle)
Huff
R.
of
"Pegs,"
so-
buying was sufficient
bring about a complete clean¬
of this $50,000,000 undertaking.
called, the
to
up
One
Avenue.
with
J.
R.
balh
units
smaller
rolling
and
Co.
&
Co.
with
1023 Second
Huff was formerly
trading
department
of
officer
and
of
Conrad,
premium.
Again, it was indicated that in¬
roads were being made, finally,
of
into
Pacific
and
Gas'
of
$65,000,000
bonds.
refunding
One
of
Luxembourg
C.
in
partner
a
BOSTON,
The
Board
the
clared
of
ment
de¬
Stock, also a dividend of
n»r--har» on the Common
*•—*t«
this
of
Corporation.
payable
July
J.
V.
STEVENS,
Both
1954,
1,
to
18, 1954.
Secretary.
The Electric Storage Battery
5th Supple¬
Bank for International
—
has
Preferred
!
company
Settlements, Basle, Switzerland.
215th Consecutive
Quarterly Dividend
The
Directors
have
(O
declared
INTERNATIONAL
from the Accumulated Surplus
fifty
Company
the
Common
dividend of
a
($.50)
cents
per
share
Stock,
June 30, 1954,
of record
ness
Schedule of Par Values—Interna¬
tional
Monetary
Fund,
ington, D. C. (paper).
Wonderful
on
at
to
SHOE
payable
stockholders
the close of busi¬
COMPANY
June 14, 1954. Checks
on
St. Louis
will be mailed.
Wash¬
H. C.
ALLAN,
173rd
Secretary and Treasurer
Philadelphia, June 4, 1954
Writing Machine, The
CONSECUTIVE DIVIDEND
Bruce
Bliven, Jr. — Random
House, New York, N. Y. (cloth),
$3.95.
—
Morgan
Common Stock
Shea
has
Mass.
become
Eugene
—
connected
AMERICAN
George R. Harris
Gpens in Denver
C.
with
Boston
Inc., 85 Dev¬
members of the
ff
Street,
Stock Exchange. Mr. Shea
previously with Draper, Sears
was
& Co. and Chas. A. Day &
Co.
Sears has been added
Colo.
opened
National
in
engage
George
offices in
R.
—
Bank
•
•
•
•
of
Investors
Planning
Corp.
of
England, Inc., 68 Devonshire
Street.
He was previously with
E. E. Mathews Co.
was
Board
a
Co.
and
Directors
Forms Mathews & Co.
has
-
declared
able June
partner in Gray B.
record
I
15
dividend
quarterly
stock of
40c
per
Victor J.
Lawson
&
1954
the
of
close
June
business
1054
GORDON V.
i
HAGER,
Treasurer
Mrs.
—
June 1,
pay¬
26, 1954 to stockholders of
at
June
GABLES, Fla.
the
on
share,
4
of
*
ANDREW W. JOHNSON
(Special to The Financial Chronicle)
staff
1954,
by the Board of
Directors.
•
of
regular
a
prior
With Victor J. Lawson
CORAL
declared
was
Vice-President and Treasurer
The
common
&
Gray & Co.
New
record at the
DIVIDEND
to
business.
the staff
to
•
to stockholders of
was
Cruttenden
thereto
•
July 1, 1954
the
Building
securities
a
Harris
•
of
J.
Walter
—
has
per
on
payable
close of business June 15,
corporation
formerly corpo¬
rate manager for the local office
(Special to The Financial Chronicle)
Mass.
First
Mr.
With Investors Planning
BOSTON,
DENVER,
Harris
quarterly dividend of 60£
share
ENKA
(Special to The Financial Chronicle)
I
Light
Calendar
SAN
-25-
™
X
4, 1954
EEJ
w
TEXTILE and TIRE YARNS
Co.,
GENERAL
TIME
Daniel Reeves Adds
MARINO, Calif.—Willis E.
is conducting a securi¬
Mathews
Next week's corporate calendar
light
kicking
not
are
to the
Quite
score.
ties
business from
offices
at
2486
underwriters Huntington Drive, under the firm
but
distributors
con¬
trary, this condition should prove
of
name
Mathews
was
Co.
&
Mathews
Mr.
formerly with Dean
Witter & Co.
helpful in'that it limits the supply
- new
material
available
and
turns attention to issues now rest¬
BEVERLY HILLS, Calif.—Mar¬
with
Daniel
South
Stock
New
Reeves
Beverly
&
Co.,
Drive,
loan
will
week
new
handful, of
in
or
en¬
CORPORATION
398
members
Angeles
Dividends
CORPORATION
LOAN
Exchanges.
The Board of Directors has de¬
NOTICE
DIVIDEND
Oppenheimer Branch
bring
issues for
small
a
com¬
petitive bids and a smattering of
limited sized
the
negotiated offerings.
sizable
next
piece
With Walker & Lee
KEY
WEST, Fla.—Oppenheimer
& Co., members of the New York
Stock
Exchange,
branch
office
have
at
opened
613 %
a
Duval
Street, under the management of
Jacob M. Elias.
Dividends have been declared
the Board of Directors,as
(Special to The Financial Chronicle)
LONG
clared
the following
;l
follows:
PREFERRED
•
per
share
of $1.0634
on
cumulative
preferred stock, pay¬
able
(for quarterly period ending
June 30,
STOCK
The regular quarterly dividend
$3.25 Dividend Series of 1946
$.8,1 !4
dividends:
'
by
CUMULATIVE PREFERRED STOCK
BEACH, Calif.—William
T. Cheney is now with Walker &
Lee, Inc., 4100 Bellflower Boule¬
vard.
of
TIME
GENERAL
tin S. Locke has become affiliated
'
ing on shelves
velopes.
^
J5.
(Special to The Financial Chronicle)
of the New Yorfeand Los
of
But
Directors
(Special to The Financial Chronicle)
Forward
The
of
regular quarterly dividend
per
share
on
the
1%
$1.75
Stock
J. H. Goddard & Co.
$5,000,000.
that
LANGLEY, Treasurer.
CORPORATION
—
here with its order for a block of
on
this
5
Foreign Exchange Regulations in
Belgium and the Grand Duchy
Virginia A. Glenn has joined the
is
WAGNER BAKING
407
dividends
First National Bank Building.
and
of
Swiss
large state pension fund was re¬
ported to have opened things up
again
Y.
June 9, 1954.
No.
Directors
'
first
/
N.
5,
stockholders of record June
Bruce
(Special to The Financial Chronicle)
demand
half point
New York
A
spread out with the issue going to
a
associated
Co.,
Williston, Bruce & Co. and
an
&
the
started
soon
&
Mr.
the
was
large insurance company and
several
become
Evans
onshire
the
Vice-President
Rosario
Company
.
Board
W.
DIEGO, Calif.—Robert H.
has
E.
spilled over into some
case
Executive
FLEECE,
—
of the recent laggards among new
Gas & Electric's 3V8S.
W.
the
15th.
June
on
per
June
of
as
1954.
Company, at
a
Meeting held this day, declared an interim
dividend
for
the second
quarter of
1954,
of
One Dollar ($1.0d) a share on the outstanding
capital stock of this Company, payable on June
26, 1954, to stockholders of record at the close
of business on June 17, 1954.
Investor, The
(New
Revised
Edition) — Benjamin
Graham
Harper & Brothers,
49 East 33rd Street, New York
16, N. Y. (cloth), $3.50.
With J. H. Goddard Co.
issues, particularly Public Service
Electric & Gas 314s and Pacific
Broadway,
of the
Interest
of
180.0
Honduras
DIVIDEND
Intelligent
SAN
consolidating the
supplements
francs).
&
v
The
re¬
1976.
1,
120
Union, 345 East 46th St.,
New York 17, N.Y. (paper), 250.
Great
York
—
from 103
after June
cents
payable
Secretary
Mining
formerly
with
Campbell, Industrial Pensions
Charles L.
McCarty & Co. and Merrill Lynch,
Dearing—The Brookings Insti¬
Pierce, Fenner & Beane.
tution,
Washington 6, Q. C.
(paper).
call¬
are
New
nomic
was
tire at least 95 % of the total prior
Thursday,
quarterly
stockholders
M.
(Special to The Financial Chronicle)
were
right is attested to by the manner
in
which investors placed their
debentures
First of Mich. Corp.
a
Parker
1954
June 3,
Eco¬
nine
appraise
an
last
(30)
declared
our
close of business
f
close of business July 20,
Dale
En¬
and
had
met
thirty
was
to
August 14, 1954, to holders of
on
at
of
Association, Inc., 1012
Fourteenth Street, N. W:, Wash¬
ington 5, D. C. (paper); $1'.00.
tunity to "feel out" their market
bankers
GOVERNOR
terprise
ments, Basle, Switzerland—6.50
Swiss francs (complete compila¬
tion, original publication with
Here
share
25th
80, 20^ per share
Gott¬
—
(Special to The Financial Chronicle)
to
*■'
■
directors
dividend
quarterly dividend:
No.
With Swift, Henke Co
of debentures
pretty much made
■
Our
Common Stock
likely
■
month this
a
America's big issue
m
PIERCE
COMPANY, INC.
Directors has declared this day
the following
will go into
registration in the next fortnight.
The
NOTICES
May 27th, at which time
Interstate
announced
some
which
THE
THE COLUMBIA
$30,000,000 of new
bonds and $11,000,000 of preferred
stock
DIVIDEND
GAS SYSTEM, INC.
Colorado
has
NOTICES
new
sale.
Meantime,
Gas
has
bonds
15 might
June
on
to
the
of
of preferred stock
set for bidding:
be
which
Co.,
$24,000,000
1954)
ers
the 4 34
per
cent
July 1, 1954 to sharehold¬
of record June 18, 1954.
business ahead is Panhandle East¬
Lines'
Pipe
ern
debentures
scheduled
.
for
$35,000,000
June
of
tentatively
now
17.
Turning the Tide
/
market
revival
which
the
was
stove
placed on the back of
as
a
result of recent
Consumers
bonds
for
Power
Co.,
a
week
to postpohe indefi¬
sale of its $25,000,000
decided
nitely
the
which
bids
&
Hanly Branch
HUNTINGTON, N. Y.—Edwards
&
Hanly, members of the New
York Stock Exchange, have opened
branch
office
at
8
under the direction of
Elm
Street
Stephen T.
for
had
June
been
3.
on
And
tap
Gulf
With Bache & Co.
COMMON
(Special to The Financial Chronicle)
COLUMBUS,
Ohio
$.60
per
J. Schneider has been added to the
staff
of
Broad
Bache
&
Co.,
30
The dividends
East
Street.
COMMON
STOCK
•
-*
:
are
share
share
William E.
June 2,
Ohio
—
Jack
1954
Palm
from
offices
Road.
with Atwill &
He
Co.
at
4530
was
Sabal
formerly
has
become
D.
with
Gallagher-Roach and Com¬
1683 West Lane Avenue. He
formerly with Merrill, Turben
pany,
was
associated
& Co. and Vercoe & Co.
OVER
800 OFFICES
cents
per
1954.
30, 1954 to stockholders of rec- i
at close of business June
(Special to The Financial Chronicle)
COLUMBUS,'
50
John H. Schmidt
Secretary-Treasurer
15, 1954.
With Gallagher-Roach
Griffith
STOCK
shareholders of record June 18,
payable June
Thompson
|
Secretary
"
June 2, 1954.
1
WESTCL0X
-
MIAMI, Fla.—Griffin McCarthy
is engaging in a securities busi¬
of
payable July 1, 1954 to
ord
McCarthy Opens Office
ness
dividend
A
Quarterly Dividend of
Raymond
—*
Monahan.
(Special to The Financial Chronicle)
glutting.
ago,
Edwards
a
of the new issue
could bring about early
of some of the financing
The resurgence
68
BIG BEN
SETH THOMAS
STR0MBERG
r
•
RECORDERS
HAYD0N MOTORS
.64
The Commercial and Financial Chronicle•...
(2588)
for
BUSINESS BUZZ
Thursday, June 10, 1954
raising
Hence
from the Nation's
Capital
C.
D
WASHINGTON,
characteristic
—
an
audit
Such
Indo-China
going on among officialdom over
the question of U. S. military
is
might is
at its greatest disadvantage and
hence that is the poorest place the
is
U.
the
this
that
fact
Indo-China
in
argument
often
in Korea he thereby
laid himself open to many crit¬
war
upon
icisms, for he brought the war
on
as a fact
and in effect re¬
the
solved
single-
controversy
handedly.
Mr. Eisenhower,
the other
on
sulting with Congress frequently
this
issue, has tended to
-on
behind-the-
make
possible
scenes
discussion of the matter.
There
a
be two
to
appear
en-
points
irreconcilable
•ely
of
view in this Capital.
the
time
that
is
be
must
Reds
stopped some where. The time is
#iow
and
the
place is IndoChina, for this is the key to
house of
Japan. If Indo-China is lost, the
is opened to the loss of the
way
Western World's position even¬
,
tually in just about all Asia.
The above is, roughly, the
dominant viewpoint of the mili¬
tary men. They have long been
anxious to get at the enemy,
and
yveeks
many
eagerly
ago
hoping they would receive
were
the orders to move.
also was, at
recently, the view¬
probably
until
least
point of President Eisenhower.
Capitol Hill believes that the
President was definitely deter¬
mined to ask Congressional per¬
mission for U. S. intervention a
weeks
few
ago,
a
few
the
newspaper
U.
should
S.
Indo-China,
However,
sional
4
it
editors that the
the Reds in
stop
alone if necessary.
is
said,
Congres¬
sentiment persuaded
the
As
a
the
proposal for war was bipartisan.
Say Is Not the Place
This is not the
ing to the irreconcilable view¬
PRIMARY
Arkansas
general rule IF a Presi¬
the
was
Senate
things ,taken out
House, it threw in a
some
warehouse
not
in
Eisenhower
to
the
to
before
enemy
the
United States could actually in¬
so
of
bril¬
brilliant
full
ideas
istration to ask for
Congress May Not Stop
President Eisenhower has at¬
condition
tached
his, way.
intervention, which is that Con¬
On the/
conditions
laid
if
to
One of these conditions is that
France
must
give a clear-cut
of the complete inde¬
promise
pendence
and
of
Viet
Cambodia.
Another
is
that
the
lective."
Mr.
excluded
tion
Dulles,
from
Chiang's
Formosa
and
action
or
however,
invita¬
government
the
Korean
on
to
reach
a
decision
UN, were
be
abandon
without
so
first
On
the
other
President
have
and
from
that,
tion
of
a
of
a
part
pursuance
to
time
statements
suggested
to
both
hand,
bound
to
ment.
This
were
interven¬
joint
action
was
not
a
specific act
treaty or agree¬
point
a
of
view
was
the
hearing to
annual audit
an
Reserve
Patman,
crat,
got
take
up
a
Texas Demo¬
the GO committee to
this project when the
Banking committee, which has
jurisdiction over Federal Re¬
serve
matters, declined the op¬
This was made pos--
portunity.
sible
by one of those political
situations peculiar to this city.
Rep.
Clare
Hoffman
forbidden
committee took away from him
No
Without
New
Funds
committee, is
until
because
of
the
investigating
ber
of
the
same
sub¬
mem¬
committee
is
new
the Democratic Whip and No. 2
change in the international sit¬
party leader in the House, Rep.
uation
some
develops, the Eisen¬
hower Administration
intend
to
military
ask
for
an
does
not
expanded
appropriation
beyond
of
John
McCormack
of
Massa¬
chusetts. The Democrats
ways
up
looking for
ways
cake,
a
the
however,
Senate has made it legally pos¬
sible,
so
to speak, for the con¬
ferees
to
result
should
decide
whether
be
the
chocolate
a
cake with lemon-flavored frost¬
ing,
a
lemon cake,
or
in
ents
or
cheese¬
a
what, mix the ingredi¬
some
kind
of
proposi¬
tion, and then bake the cake.
in
So
the
the
effect
kind
of
housing legislation will be writ¬
ten in conference, which may
not
be for another week
or
10»
days.
Business
Ask
Plateau
on
T
prominent government
a
official
economist
or
what
lication
he
for
pub¬
thinks
the-
business outlook
is, and almost
invariably he will be warm to>
optimistically rosy. Speaking;
not for publication, the majority"
of professional observers think
business
is
full seasonal
lacking so far thepick up, shows no-
present signs of getting
and
probably
a
few
will
months
worse,
along,
rock
with
no
ap¬
the
labor
racketeering. A prominent
It may be stated categorically
that unless and
sore
chairmanship
committee
Intervention
kind
preciable rise.
of
from
something not
by one House or
the other.
By throwing in all
the ingredients of any possible
the
amendment.
Chairman
the
a
upon
for
are
al¬
to show
the "banker Administration"
Mississippi Valley Gas
Mountain Fuel Supply
Northern Illinois Gas
[This column is intended to re»
fleet the "behind the scene" inter¬
pretation from the nation's Capitat
and may or may not
the "Chronicle's"
coincide with
own
views.]
Concession to Members' N.A.S.D.
We suggest to investors
a
liberal
return
seeking
and
potential growth
SNAP-ON-TO0LS
Northern Indiana Public Service
Public Service New Mexico
Southern Union Gas
Southwest Natural Gas
Southwestern Public Service
^6#
Tennessee Gas Transmission
Texas Eastern Transmission
Texas Gas Transmission
CORPORATION
**2
CAPITAL
Carl Marks
West Ohio Gas
FOREIGN
SCHERCK, MCHTER COMPANY
SECURITIES
SO BROAD STREET
TELl HANOVER 2-0050
Member Midwest Stock
Exchange
•
&
Co. Inc.
GArfield 1-0225
X
"
T
STOCK
Report available
SPECIALISTS
NEW YORK 4, N. Y.
TELETYPE NY 1-971
LERNER & CO.
Investment Securities
19 Post Office
320 N. 4th St.
ST. LOUIS 2, MO.
usually
(R.,
Mich.),
Seek
1
Missouri Power & Light 3.90 pfd.
in
Rep.
Operations
tion's objections which resulted
in the
defeat
of the Bricker
\
Midsouth Gas
which
Mr.
the
Gas
Kansas-Nebraska Natural Gas
System,
banks,
the
Open Market Committee,
and the Federal Reserve Board,
to be made by the General Ac¬
counting Office.
underscored in the Administra¬
battle-
Kansas City Public Service
the
treaty, they be¬
sional approval of
principal
Service
in
get advance Congres¬
such
Commonwealth Gas
the
Secretary Dulles
time
issued
past
MARKETS
Natural
getting
Congressional approval.
the
of the
persuaded
Government
Federal
do
under
the
Wright Patman,
House
of
States would like to "unite" in¬
will
Reserve
project,
the
may
of
to in¬
Indo-China, it would
that he does not intend
lieved the United States
future
of
aegis
Audit
That indefatigable foe
Federal
Committee to give a
the long-run hope for
avoiding intervention in the
stead
the
or
the
Reserve
rules
touched upon
cake,
Avoids
GAO
his pet
Thus,
foreseeable
out, however, some new
Soviet aggression of such pro¬
portions as to make obsolete
present planning, it is believed.
appear
Re¬
public, the two fbrces probably
under
Admin¬
expanded
not rule
tervene in
"col¬
the
kind
NATO
to
must be either "united"
has
Laos,
Nam,
mal collective agreement
some
an
intervention. This would
direct
States alone, or, without a for¬
intervention.
of
to
must approve it. This con¬
dition, however, appears to be
qualified. If the President were
to
propose
that
the
United
two
sustained,
the certainty
which,
as
down
further
a
gress
other hand, President
has
is
military establishment would be
keep
Eisenhower
Congressional
conference between two Houses
what has already been request¬
ed.
The
most
likely
change
which could induce the
tervene.
par¬
Indo-China, it is difficult to
a President from having
Under
got it, Senator!—we'll investigate the committee
investigating the investigating committee!"
i
"agreeing"
field
actually WERE so con¬
vinced of the need with respect
Colorado Interstate Gas Co.
in
by
while-the
of its own, many industry feels
will be unworkable.
,
ticular
Central Louisiana Electric
Teletype SL 456
put
liant and
"I've
jElectric & Gas
Gas
And
whole
show-down.
final
President
Western
Central
program
House.
countries with whom the United
place, accord¬
President's
largely decapitated in the
real prospect that the
,
were
use
dent is convinced of the need
for military intervention, and if
that time.
The persuasion'which brought
of
housing program," how¬
wide of the mark..
ever,
Conditions Intervention
fight.
suspension
reports that the
"passed the Presi¬
an
inevitable
willing
this
had
dent's
military decision, whilst So¬
rests for the
President to drop the project at
about
bear
viet military power
weeks
after Vice-President Nixon told
Whether it will
press
Senate
The
material, military, eco¬
nomic, and financial, of the U. S.
can be wasted without reaching
a
Adminis¬
relationship to the origi¬
The
.
of Soviet forces,
ideal Red objective
whereby U. S. military power
can
be dissipated and the re¬
ing the
provides
raise doubts
This
enor¬
an
store¬
goods and
materials for
raw
be
pretty fair chance
a
Eisenhower
nal White House proposals,
however, remains to be seen.
would become
mired. In any case Indo-China
as another "fringe war," avoid¬
materials, and a mar¬
of
source
much
this viewpoint,
would
the
this year.
might
military
Japanese
for
ket
its
and
Asia
Southeast
that
sink-hole into which U. S.
mous
in
tration will ultimately get some
kind of a housing bill passed
in Indo-China.
Indo-China
itself
put
of sharing respon¬
Conference
There is
the
air and sea
power,
without sending U. S.
ground forces, is entirely dis¬
counted
by the opponents of
to
would
Housing Bill Will Come Out in
sources;
these
of
first
The
3<>me
to
be accomplished by
war
it
sibility for operating monetary
policy.
the show-down could
idea that
According
hand, by refraining from Execu¬
tive action alone, and by con¬
s..
a
Reds.
the
on
the
show-down with
Just parenthetically,
stage
?
When Mr. Truman determined
choose in which
S. could
has
reluctance
occurred
the position
military
Federal
the
of
that to audit the Federal
ows
eserve
attempt with its own forces to
largely devoted sincerely to the
merits of the controversy and is
relatively free of politics.
the
American
of
*
intervention
of
mechanization
most serious and intense dispute
situation,
part
the GAO. However, the GAO
with the Reds. In the
the
;!
Reserve.
over
stage the show-down
jungles of
point, to
One
of
ar¬
was
however, was that the General
Accounting
Office
was
most
chary about wanting to take
not
peculiar
hearing
What messed up the
And You
>
f
the
and
rates
poor.
ranged.
on...^
Behind-the-Scene Interpretations
interest
grinding down the
Square, Boston 9, Mass.
Telephone
HUbbard 2-1990
Teletype
BS
69
@FedFRASER