Full text of Commercial and Financial Chronicle : June 12, 1958, Vol. 187, No. 5750

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ESTABLISHED IS39
UNIV'EKSDI I y
OF MICHIGAN

jun 13 13s3
BUSINESS UNDUSTUTION

until

XtC(. V. S. F»t. Office

Volume 187

Number 5750

■i>'i

EDITORIAL

New York 7, N. Y.,

»

Thursday, June 12, 1958

Price 50 Cents

a

Copy

^V-

at
i!

In

the

i.M

•■'at
*

early days of the New Deal it

commonly said that

ours

had got to be

ft')-

was

"mature

a

By DR. ERNST A. DAUER*

economy," that there was little reason to hope
for ftirther expansion, and that our concern must

,

iwepe some .who got inore than their share
this limited output, so the story went, arid far

too many

Here

the real

was

so we

Events

have,; of

problem of the day and the

were

course,

sensical this notion
not

very

told

long

was.

proved how

ago

In

somewhat

again.

over

non¬

point of fact it

long before the New Deal

themselves did

perpetuating. 4;/-.Vvv

,;

for

j

more

cautiods

be

was \

curtailed

and

V —■ -4V-'.

td

"growth!'" has become a fetish with j
the alleged dire
necessity of promoting it is shouted from the
housetops upon all occasions; In his annual re¬
port just made public. Alfred C. Neal, President
of the Committee for Economic Development,
again gnaws on the old file, warning us that "it is
not only for our own convenience and greater
comfort that the economy of the United States
must grow. Growth and better understanding of
how to achieve it are essential if we are to carry

part of the competitive struggle, too.

.'

the front page.

There; is

page

a

week to

the statistics,

a

month

upon

the

any

It is

for

sult, partly, of the fact that analysts,

the potential contribution of direct
intervention in the long-term capi-

portions of the total picture.

address

by Dr. Dauer before Consumer Finance

Administration,

Study Course, School of Business
Michigan, Ann Arbor, Mich.

afforded

Winfieid w. Riefl#r

tal

cumstances be small

Continued

of

address

by

Mr.

complete picture of i sues now registered with the SEC and poten¬
.gistration" Section, starting on page 34.

m

UNDERWRITERS

Municipal

*

v

-

STATE

and

and

MUNICIPAL

HAnover 2-3700
INVI8TMENT

ON

ST.,

IS MOAD

fork amd american

STREET, NEW YORK&N.Y.

•

014-1400

Bond Dept.

Teletype s NY 1-708

To

Active

Dealers,

Markets

Banks

Brokers

CITY OF

Dealer

T. L.WATSON & CO.
1832

ESTABLISHED

Members

CANADIAN
SECURITIES
Commission Orders

New York Stock
w-

Exchange

American Stock Exchange

BANK

to eoost

$200,000

Maintained

and

Chase Manhattan

NEW YORK 5

35 sffiCM from toast

tfutvpinvi4mi

-J

York Stock Exchange

120 BROADWAY,

Net
-

Members New

stock exchanges

Distributor

•

Harris, Upham &

OF NEW YORK

Burnham and Company
homers new

7

BOND DEPARTMENT

REQUEST

THE

THE FIRST NATIONAL CITY BANK

ENT
BOND DEPARTMENT

NT'

Bonds and Notes

ARE NOW AVAILABLE

BANK

Underwriter

of

Capital

3

Due

Executed On All

Canadian Exchanges

the

QUEBEC

Province

of Quebec

3A% Debentures
For

September 15, 1966

Payable in United States Dollars

CANADIAN DEPARTMENT

Price

California

Municipals

97V2 t° yield 4.15%

Teletype NY 1-2270
/

25 BROAD STREET
NEW YORK 4, N. Y.

jFIRST

£<Hltku>€4t COMPANY
'

PALLAS




DIRECT VIRES TO

•

PERTH AMBOY-

MONTREAL AND TORONTO

MUNICIPAL

JbtDooN Securities

Goodbody & Co.
MEMBERS

BRIDGEPORT
,

Housing Agency

FIELD REPORT

• ICURITIBS

CORN EXCHANGE

'

,

LATEST

BONDS

of

chemical

Public

COPIES OF OUR

DISTRIBUTORS

Securities

30 BROAD

31

Workshop,

and

U. S. Government,

telephone;

page

State, Municipal

in

State and

cir¬

REGISTRATION—Underwriters, dealers and investors in corporate
a

undertakings in our "Securities in R

tial

on

Riefler at Money and Banking
Federal Reserve Bank of Minneapolis.
1 Actually "short-term securities, preferably bills."
♦An

any

obstruct the functioning of the market

stances not only

Management

University

would" under

market

and might under certain circum¬

28

page

Report

securities market. It is the purpose
^of this paper-to re-examine this., be¬
lief in the light ef the-actual oper¬
ating experience iof the last five
years. The conclusion-reached is that

re¬

look at different figures, and place
different
degrees of emphasis
on

on

was

that this
policy was ; conducive -to the , best
functioning of the U. S. Government

con¬

the

policy

five years ago in the "belief

result,

or more

which

clusion must be based.

♦An

20

are

is

*

of the Ad- Hoc Subcommittee

patient is, and

This

onlyv*

adopted, by the Federal Open Market
Committee on the: ^recommendation

partly, of the fact that we must wait
from

SECURITIES NOW IN

securities

DEALERS

stead of limiting its market activities
to the purchase and sale of bills. The

real difference of opin¬

a

ails -him,

NEW YORK

6eporatio«

NEWyORK STOCK EXCHANGE

115 BROADWAY

1 NORTH LA SALLE ST

CHICAGO

*

term U. S. Government securities in¬

so-rcalled -"bills

,

BOND'

..DEPARTMENT

Isttlt of America
*

40

Exchange Place, New York 5, N. T.

Teletype NY 1-702-3

WHitehall 4-8161

Nationalising! association
300 Montgomery St., San

Francisco, Calif.

i»:

;

.that the Federal Reserve
System could help check the recession by buying long-

Yet, there has

ion as to how sick the

what

:

-

eoonomy and

Continued

can gain dominance over the
people who live in the non-committed
on

our

.

It has recently been suggested

rarely been less agreement.

If the Soviet Union

Continued

"

Opinions also differ widely with
respect to how long the downturn
may continue, how long we may remain at recession
levels and how rapid the upturn will be. The answers

ment in other areas of the world.

billion

...

,

Governorsiof the Federal-Reserve System, ' *
Washington, P. C.
|

Mitigating congestion in the long-term capital market,
and the recession, by direct Fe^ral Reserve intervention in the market for long-term U. S.^securitieeis not
recommended by Chairman Martin's • assistant who explains why he believes the preferaMe soIntion is the eXisting policy of using ''bills only,^reserve "requirements
and ^discount rate approach.-Mr^Rieier declares purchase of long-terms would obstrnet the market's fnnctioning, slow up responsiveness of Federal Reserve decisions, contribute little to the^absorbtivecapacity of
the market and leave congestion- problem unsolved.

Dr. Ernst A. Dauer

adequate program of economic develop¬

"This is

v

in
the outlook has never been as widespread as in recent
months;
Statements on the subject
have moved from the financial pages,

.VSihCe then

an

-

of

of sales

resumption
goods.

Interest in the state of health of

all too many commentators/ and

on

for

durable

stimulating and

■

Notes -recession,

credit-wise;

looks

managers

4 „.4/;

;

slighdy affected total of goods and services produced and
consumer, intomesit Doubts, soft
goods expenditures will

■

complete about-face and began

a

shout about the "need"

to

and

over

;

comprising tbff heaviest users of consumer
are how
getting; their Hfirst taste of widespread;
prolonged unemployment and' that this may make them

who got much less than was their due.'

future,

;

attitude,; and predicts an upturn in
consumer attitudes and buying within the next three to
six months. Ihr; Dauer says fthit trend, however, will
progress slowly. 'He observes that many young married

seeing io it that {the proceeds of this
of ours? ivere equitably distributed.

Assistant to thefChairman

Board of

.

tance of consumer's

There
of

■'v

•

Household Finance economist emphasizes crucial impor-

be thht of
economy,

By WINFIELD W.RDEFUER*

Director of Consumer Credit Studies •?
Household Finance Corporation, Chicago, 111.4

,

.

'

I { t

\

+

f"

'

2

The Commercial and Financial Chronicle

(2606)

For

The

Banks, Brokers, Dealers only

If it's Over-the-Counter

Security I Like Best

A continuous forum In which, each week, a different
group of experts
fin the investment and advisory field from all sections of the
country

...

Try "HANSEATIC"

participate and give their

reasons

for favoring

(The articles contained in this forum

Because you can

be

sure

of

they to be regarded,

are

Speed

offer

as an

CHARLES E. STOLTZ

Co., New York City
Members American Stock Exchange

Experience
Wire System

Primary Markets in

more

two years ago last month
contributed an article on

I

this

Company

same

medium

the

of

through

the

"Commercial

&

said

New Yoik Hanseatic

time
2

Corporation
;
'

Established

Associate
American

Stock

BOSTON

5131,390

t

annals

of

jf

the

stock

Let
has taken

what

market, it is true there has

been considerable deterioration in

RIGHTS

SCRIP

&

But
I might
add by no
greater percentage than that suf¬

fered

by the
companies.

TfcpONNELL &PO.

.

oil

other

of

selling on
Exchange at
share and had a net asset

In 1956 the stock

was

American Stock
a

value

Exchange

of

share

approximately

$21

a

to put

it another way it
was selling at a 30% discount. To¬
day the stock is selling around $10

BROADWAY, NEW YORK S
TEL. REctor 2-7815

or

share and has

a

of

of

;

significant statistics

the

improving trend in

for

over

and

those

are

the

first <two

1957

period.

February

earn¬

months

those for the

January

and

considered

are

of

1956

same

poor

net

a

asset value

approximately

generated

$84,595

funds

or new

against a profit
the similar period

of
of

as

in

net, loss

a

in

(after

ruary

against
of

Company had
January and Feb¬
d&d)
of
$181,537

loss

a

the

on

only $39,817 in 1958.

proved
trend
March 1958.

basis

same

This im¬

continued

during

'

The attractive speculative con¬
trolling interest of Anglo Ameri¬

$16.25 a share can lies in its
ownership of 1,309,a 40% discount.
This deprecia¬ 435 or
61.21% of the outstanding
tion in its present net asset value
shares of Gridoil Freehold Leases
is due entirely to the depreciation
Ltd.
Gridoil has 522,000 acres of
in

the

hold Leases and

appraised

Life Insurance Co. of Va.

STRADER and COMPANY, Inc.

the

Canadian Willis-

in

the

latter

the

ton

part

of

on

of

TWXLY77

New

reducing its funded debt hav¬
ing retired $275,000. First Mort¬

York

-5-2527—

gage

City

Bonds

Convertible
Let

the

us

$100,000

In

.

of

its

Debentures.

examine

1956

Anglo's ownership
of 1,309,435 shares of Gridoil had
market

a

PENSION FUNDS

value

compared

with

of

market

value

(at $4) of $5,238,136 and its
ownership of 2,514,893 shares of

INVESTMENT TRUSTS

Canadian

INSURANCE COMPANIES
•

had

(

worthy

Call

of

are

investigation.

representative
will be

Options

of

A

proximately $9%
;

firm

our

glad to explain the

subject

to

those

who

are

interested.

Stock

shares

on

Hoiv

to

of

$6,601,594

two

Use

Options

still

crude

iaries

on

its

1,171,503

outstanding.
oil

will

be

producing
further

These

subsid¬

discussed

later in this analysis.

Anglo American
in

February, 1952:.

owns

Ask for Booklet

market value

was

organized

The Company

and

operates a refinery at
Hartell in Southern Alberta, adja¬
cent to the prolific Turner
Valley
field.

Under

an

expansion

and

modernization program copipleted
in 1956 the

Filer, Schmidt *Co.
Members

Put

&

Call

Brokers &

Dealers Assn., Inc.

120 Broadway, N. Y. 5

BArclay 7-6100




half

In

Manitoba

million

within

the Willis-

as

order

to

hold

Gridoil

acres

its

need

only to pay 10c an acre and under
the provisions of their leases they
still
have
on
the
average
two
years

1956

to run.
During
Gridoil drilled 28

of which

1955

and

wells—21

producers." In 1957
Company embarked on a pro¬

the

were

gram to drill 60 wells under

000,000
cost

loan

13
of

1958

from

wells

a

drilled

were

$3,-

individual.

an

at

a

$500,000, and in January,

the

contract

wells drilled
now

were

canceled

was

by mutual agreement.

Two of the

producers. With

advanced by the parent

Company and at a tremendous
saving, Gridoil is about to embark
on

en

are

refining capacity was
increased from 2,500 barrels per
day to 4,000 barrels. Its catalytic
refining unit raised the octane of
the

finished

product

above

com¬

petitive requirements. In January,
1956, the Company had acquired
and developed 814 outlets
includ¬
ing commercial and industrial ac¬
counts and in

March,. 1958 its out¬

lets numbered 917 with additional

Manitoba

turn

j

in

received

now

From

income.

Wil¬

royalty income increased
$3,000 in 1956 and to over
$26,000 in 1957. The 1958 royalty

'

is

estimated

to

be

in

liston's

income

without

tial and
.

within

4

a

of

5

or

cost to

and

petroleum products
Canada.

sales

and

year

after

profits

success

American

above,

pany's leases embrace
most

attractive*

Manitoba,

new

wells

and

tance

and value.

larly

true

rate

of

Canada

chase

from

of

50%

the

havin®
to

60%

tainly

substantially

value

for

come

and

many

crude oil requirements.

therefore,, assured of

a

:

ket for any and all increased
pro¬
duction
from
present or newly

discovered wells.
As previously

vl.*

.

;

mentioned, Anglo

INC.
37 Wall
.

■«•

Street, New York 5, N. Y.:

'•

•'

-

....

" V-

/.

Underwriters—Distributors

the
»

;• /%■-.

;

■».re¬

investment Securities
*

in

years

Dealers

.

■

cer¬

increase

many

*

.•

"

,*

f *

-

"

'

.

•

<•

-

Canadian arid Domestic

to

greater

discount

below

its

;
f

1

:

■

net

asset value than in early 1956. As
pointed out about its loss of asset

Opportunities Unlimited

value

is not due to anything in¬
ternally wrong but is a stock col¬
lateral
depreciation of its con¬
trolled subsidiaries.

To expect the

market value of the stock of
any
oil company to remain stationary
not react in sympathy with an
obviously depressed industry and
stock market is sheer, and dan¬
gerous fantasy.
Anglo American
Exploration Ltd., between $10 and
$11 a share is, in my opinion, an
outstanding purchase for capital
or

,

gains.

•

IN JAPAN
Write

for

our
Monthly Stock
Digest, and our other reports
that give you a pretty clear
picture of the Japanese
economy as a whole.

Nomura Securities Co., Ltd.
61 Broadway, New York 6, N. Y.
Telephone:
This

,

is

not

orders

BOwling Green 9-0187

an

for

offer

any

or
solicitation for
particular securities
,

ROBERT N. TULLER

-Robert N. Tuller Co.
New York

City

Chicago-Transit Authority
The-

Transit

merits

.

The

of

Chicago
Authority securities have
by me and by others

been extolled

in this Forum

on

earlier occasions.

Since

these

that

bonds

and

equip¬

ment
c e r

still

I

believe

trust

t i f icates

will
be

probably
cheap until

called

or

tired,

I

re¬

will

take my med¬
al

for

consis-

tency and
praise them

Over-the-Counter

Quotation Services
for 44 Years

again.
To
Robt.

N.

Tuller

who

its

Gridoil is,
readv mar¬

Burns Bros. & Denton;

thereby give, added
value to the Company's stock.
Anglo American is selling at a

for

nur-

of

.

,

anom

to

where

outlets and refinery will most

nounced in Canada than the United

in

is particu¬

growth of population and
development of its industries
is so pronounced. The Company's

underway.
While
there is a world-wide glut of oil
today, that is probablv m^rp orp
is

-

Bankers

had

of

is

States, Anglo
alous position

Investment

Broadway, N. Y. 6 COrtlandt 1-5680

the

of the

drive

has

dispose of

This

successful

its

&

of

Outlets in depressed
in periods of over¬
production take on added impor¬

producing fields in Saskatchewan
and

111

in

profit.
periods and

Com

some

and

;

\

'

some

of Gridoil

the

Ine.

of

Tokyo, Japan
Brokers

its outlets and refinery for a very
substantial figure and at a hand¬

crude oil producer. True they
have had a temporary setback but
mentioned

York,

Affiliate

.

improved

opportunities to

many

: '

accelerated

an

a

as

record

have

at

year

Anglo

pace.

Its

.

write

Yamaichi Securities Co., Ltd.

Here is the story of a Company
in less than six years ranks

Western

New

„

Anglo.

third in the distribution of petro¬

.

Securities Company ;

period will be very substan¬

year

or

Yamaicht

ex¬

of $50,000. It is increasing at
substantial rate. Canadian Wil-

cess
a

Call

*'

over

income

office*

information

current

lis ton's

stock—j-

as

For

•

to

branch

our

STOCKS

non-re¬

a

Canadian

1955

Gridoil at $4 has had it. I do not
think we need have
any concert
for the ultimate

.

NY 1-1557

JAPANESE

Saskatchewan.

and

Williston

basis

considered prov¬

territory.

..

Birmingham, Ala.
Mobile, Ala.

Direct wires to

petuity in all mineral rights ex¬
cluding coal but including petro¬
leum and gas in approximately 1,436,000 acres in the Province of

stepped up drilling program

a

in fields that

compared with a market value
From a value of $10 in earlv
today (at iy4) of $3,149,616. These 1956 it is now selling at $4—a 60%
figures represent a market depre¬ reaction.
If in
the parlance
of
ciation in Anglo's collateral assets Wall Street there
is such a thing
of a staggering $10,981,798 or
ap¬ as over de-humidifying a

sibilities through the sale of
and

selling at 2%

i.

The additional income pos-

Put

a

Williston

Basin.

$12,767,956 funds

today's

and

referred to

area

Only

little further

a

for the loss in net asset

reason

value.

and

katchewan
the

were

recorded

amount

"freehold" leases checker-boarded

throughout the provinces of Sas¬

mar¬

Company's books. During 1957
Company continued its policy

the

LYNCHBURG, VA.

to

two

1957. by
the General Appraisal
Company at a conservative $14,391,000 or
$4,652,000
over
and
above

Wire

its

of

Company's
keting and refining facilities

Commonwealth Natural Gat

Private

value

ton Minerals. The

Bassett Furniture Industries

LD 39

market

subsidiaries, namely, Gridoil Free¬

American Furniture

an

leum

$60,717 in cash flow

Exchange

Stock Exchange

New Orleans, La. -

This Company has
undivided half interest in per¬

gasoline sales, due to the weather.

or

Trading Interest In

or

Williston

that

January and February 1957,
Anglo American suffered a loss of

York. Stock

HAnover 2-0700

Minerals Ltd.

months for the entire oil industry
in
Western Canada, particularly

1958 and in 1957 the

$15
Exchange

Stock

American
120

Stock

stocks

the

Members

York

New

common

stock.

Since 1917

or

increase

an

In

market value for its

the

1955

as

way

Canadian

of

royalty

three
to put

-

2,514,893 /shares

owns

income

net

American

■,

Canadian

in two years.

1958

place in the past years.' In sym¬
pathy with a general depressed

Specialists in

Its

New

19 Rector St., New York 8, N. Y.

against

therefore,

-

much

ings
Charles E. Stoltz

examine

now

us

1955.
was,

as

(after d&d)

$411,020

To proceed one step further the
most

oil

industry.

in

another

210%

the

Canadian

to

1957

imes

success unsur¬

in

percentage increase
funds generated. Its

a

earnings in 1957

for

for

passed

or

new

imounted

growth and

FRANCISCO

Principal Cities

to

Wires

Private

SAN

•

record

a

CHICAGO

•

PHILADELPHIA

share

net

aegis

Nickle, Presi¬
dent, had made

Teletype NY 1-40

the

>f 28 in

Members

Members

63.43%

In

old—Q uoted

Steiner, Rouse &Ca

of

increase of 28%,

an

B o tight—S

Authority—Rob-

Tuller, Proprietor* Rob¬
Tuller
Co., New York
City. (Page 2)

also

i

un¬

the

sales

Transit

N.

ert

increase in sales in

Its

Louisiana Securities

N.

ert

in 1957 or

Ex¬

of Mr. Samuel

Exchange

120 Broadway* New York 5
WOjth 4-2300

in

ploration,

1920

Member

Chicago

gasoline
has increased from 47,139,152 gal¬
lons in 1955 to 60,349,321 gallons

Anglo

American

der
V

'I

that

years

,

Company had cash flow
(before d&d) of $870,823 or ap¬
proximately
75c
a
share
as
against $1,119,686 in 1957 or 95c

that

at

25%

a

years.

1955

Financial
Chronicle."

or

Alabama &

Stoltz, Partner, C.
E. Stoltz & Co., New York City.
(Page 2)
/■'
v;

products sold in 1955 amounted to

two

>

—Charies E.

to be opened during 1958.
dollar
volume
of petroleum

Its

Thursday, June 12, 1958

.

Participants and

Anglo American Exploration Ltd.

nor

sell the securities discussed.)

to

770

was

that

than 400 OTC Issues

be,

to

$11,885,724 and for 1957, $14,864,-

Anglo American Exploration Ltd.
It

particular security.

a

intended

not

are

Week's

.

Their Selections

outlets

C. E. Stoltz &

Nationwide

Thin
Forum

.

yet

those
have

not

invested

in these securities with their sub¬
stantial tax exempt

yields,

historical facts

Chicago

are

Transit

Natioaal Quotation Boreal

few

a

Established 1313

'

pertinent. The

Authority

Continued

now

46 Front Street
CHICAGO

on

page

41

New
'

York4, N.Y.

SAN FRANCESCO

Volume

187

Number 5750

.

."The Commercial and Financial Chronicle

.

(2607)

INDEX

at

Articles and News

Analysis and Management

Should the

Federal Reserve Buy
—Winfield W. Riefler

By GERALD M. LOEB*

Author-securities dealer blames—failure

1

*

A New Look at Investment
"

giye

Mr. Loeb declares, to

way,

than

realization.

on

follow and to

can only come
understanding and confidence per¬
.

I stock

the

recent

market,

decline in the

investment

records to determine what

:

ing

heavily

man-

;

ing

in their
analysis of

changed. The

to

last

summer.
:

7

\

reason

nve s

ful

tment

] management
in
'

G.

M.

Loeb

education

investment.

"

12

13

The Food Supply of America—Nathan

HYDROCARBON

14

CHEMICAL

—

15

J.F.Reilly&Co.,Inc

:

to

as

Cummings.

Income, Expense and Net Profits in Consumer Credit
Financing—M. I. Behrens, Jr._

HYCON MFG.

Members

Salt Lake City Stock Exch.
Spokane Stock Exchange

O. B. Johannsen Advocates Unrestricted
Private Control Over

the

y

.

Money and Banking (Letter to Editor).-.

18

1

success¬

Seeking

clients

Personal

a

Wrong Answer (Boxed)

DIgby 4-4970

29

_

Exchange PI., Jersey City

the problems inherent in portfolio

management.

Regular Features

Once they become
As We See It (Editorial)

;

enlightened they will also gain
confidence in the decisions made
gree
by management who in turn
publicly owned portfolio. There would become somewhat Iterated
are moral and
legal responsibili- from the shackles of shopworn
ties that simply rule out dramatic principles.
action for most managers. Thus,
In
?V
F
0. crea?;e
relathe greatest deto the management of a vast
in

•

Bank

and

Insurance

Business Man's

1

H. W.

25

Bookshelf...

44

_______

Coming Events in the Investment Field

resort-

to

8

Syntex Corp.

stockholders not solely- In
the interest of stimulating business

action,- more

average

.

I which is bound to bring

average

the

Pacific Uranium
Einzig: "Is Britain's Disinflationary Era Drawing to

but properly for the best interests

years somef rugged' individualist
-defies
convention and goes
his

°* the ynewrinvestors and the
economy as \vell,it is easy to let
.salesmanship outrun realism. We
Possess a profit and loss econoiny.

Once in

results.

while

a

over

?

way. This usually results in
either an outstanding success or a

J own

:

down. It is-only human nature to

Perhaps the handicap of acting
on < someone : else's'behalf
is' not

j just
J

The market goes up and it goes

"

5 nmfound failure

obstacle

the-foremost

It could possibly be

labeled it.

Conclusion"

|
,
1

where

the, aay me-

exists. If, for example, there appears to be a preference for overdiversification, the motivating rea-

;

If

~

Management

#

NSTA Notes

.....

jn

their value in the past rather than
in

Observations—A.

1

r

the

the

for

promise

mistaken

future,

reason

guideposts to

*From

that the

'Cleveland,

Ohio,

May__

4 "

29

Railroad Securities

*

Securities Now in Registration:

Prospective

Security

38

Corner.

The Market

.

and

.

.

The

You—By Wallace Streete

the

of

some

proven

.

4

Refining

Washington and You—

Continued

on

page

.

20

:;:Column not available this week.
•

-

4

-

•

Twice Weekly

PREFERRED STOCKS

Company

Reg.
B.

D

U. 8.

DANA

2-9570

to

M

Possessions,

rJ!,

„

Albany

•

-

Boston

Nashville




H

-

-

-

Chicago

Schenectady

,

*

*

•

.

-

*

Glens Falls

Worcester

'

& Publisher

'

.

'

......

Thursday, (general

.

.

,

.

>

Canada,

-

t
.

records,
state

'

corporation

and

Other

Chicago

news,

city news,
Offices:
135

3,

111.

bank

etc.).
South

■

;

La

clearings
♦

Salle

•

St.

(Telephone STate 2-0613).

.

of

Countries,

{

,

^5-0®

;

Territories
Union,

,

and ad- 1

news

United

Pan-American

vertising issue i and every Monday (com-;'
plete
statistical issue — market quotation (

*

,

i

.

Every

in

Dominion

.Thursday, June. 12, 1958

;

TELETYPE NY 1-5

r

\

Subscriptions

SEIBERT, President

WILLIAM DANA

I

*Prospectus
•

on

request

\

l"

! !
•; (

Subscription Rates

,

9576

HERBERT D. SEIBERT, Editor

Syntex Corporation*

I

Publishers

COMPANY,

X' 25 Park Place, New York 7, N. Y^

-

.

*

al"y 25' 1942' at the P°St 0fflCe
New
York, N. Y., under the Act of March 8, 1879

t

Other

ST., NEW YORK 4, N. Y.

*

Yonkers Raceway Inc.

Reentered as second-class matter Febru-

V^vm
Patent Office

o

n

n

WILLIAM

?•,.-*

•

•

s.

Copyright 1958 by William B. Dana

FINANCIAL CHRONICLE

-

*

'

'

•'

'

t

TELEPHONE HAnover 24300
»

McLean Industries

44

Members New York Stock Exchange

f

.

ti.onal manager ooce told me that

Spencer Trask & Co.
'

Commonwealth Oil

2

REctor

'

.

J

An institu¬

your losses:

,

rr

Uranium

16

Security I Like Best___

The COMMERCIAL and

25 BROAD

Western Gold and

26

i

^

of

specialized in

Sabre-Pinon

34

Offerings.

Salesman's

Securities

Published

have

>

.

show

are:

of another

For many years we

Dallas

43

L_.

Public Utility Securities
,,

to

Los Angeles

Chicago

Our Reporter's Report

The State of Trade and Industry..

believe

Direct Wires

Philadelphia

27

guideposts that should be followed

Mr. Loeb before The
Security Analysts,
June 4, 1938.

Society

-

Guideposts Suggested
j

te by

a

Cleveland

t

•

perhaps

is the same.

yoke

Wilfred

Governments.

on

success,

1

And, finally, if there is a general
reluctance to cut losses it is ap-

parent

then

Exchange Pl„ N. Y.

17

to in-

comes

could

Our Reporter

heeding

speculative

hold

that

issues

8

News About Banks and Bankers______

.Teletype NY M825 & 1-4844

vigor and self-determination
some
of the proven

new

demonstrated

have

that

Singer, Bean
& Mackie, inc.

42
40

HA 2-9000 40

'■;

-

.

However, when it

portfolio is concentrated in

a

issues

..

16

Indications of Current Business Activity

;

vestment,
being
forewarned 'is
being forearmed, and investment
son may. be a fear of being criti-1 results
will be actually tangibly
cized or held responsible for an improved
if clients and stockunorthodox action, rather than a holders understand the difficulties
basic
belief in owning a wide and hazards.,
variety of stocks.

21

;*•> Mutual Funds _'_J.

emphasize the good points and we
e-ustomed to this in every-

high level of competence punctured tire.

a

.

From Washington Ahead of the News—Carlisle
Bargeron

only obstacle to successful invest- ?
It doesn't affect the ownership
ment management—espe ci a 11 y of an automobile to experience a
!

a

....

I ere

as

Lay "A"

Perkins Elmer

8

Dealer-Broker Investment Recommendations-

_

Cormac

Cover

/_

Stocks..

-

they

/ HEnderson 4-8504

Teletype; JCY H60

and should be made to realize

can

general was
handicap of doing something
someone else. This applies in

tionship, and

11

___

i the least degree to a private
,

INDUSTRIES

and institutional stockholders alike

the

i for

ADVANCE

10

Misconceptions About Price Behavior and Administered
Pricing—Jules Backman

reasons

•

hazards and difficulties of

successful
i i

•

■

broaden

to

9

,

Administrative Prices in Recession and Inflation
—Gardiner C. Means—

Now, from a constructive point
bX view, my first suggestion is to

well

as

obstacle

as

Coal—Barton R. Gebhart,

7

—Charles C. Abbott

First Suggestion Offered

] the foremost

6

! and

.

In my opinion,perhaps

WALL STREET, NEW YORK

Banking and Government Policies to Provide Jobs and Growth

completely,

underlying

'

DIXON CHEMICAL

6

___

this

ingrained •• and
probably will prevail. However*
by holding a critical mirror to this
existing condition, someone might
recognize his old weaknesses and
attempt to strengthen his convic¬
tions.
-;v: t ;v
"
"'■; •.
,>
'

overstay their
market

be

can

-

v

5

___________

Outlook for Real Estate Finance—Miles L. Colean

t
whether

-

Telephone: WHitehall 4-6551

Outlook—Martin R. Gainsbrugh________

The Outlook for

to. '

■

.

BELLANCA CORP.

The Economic

is * weighing

doubtful

are> human

i;|

that1'"

them

and
belief

on

______

V

Elusive Electronics—Edgar T.
Mead, Jr.___.___:

the manager's invest¬

on

situation

caused many
of

portfolio

is

It

reason-

be due to a
stocks held

decision,

ment

miss-1'

was

:i conditions
,j

stale portfolio,

person's

jagers have been assessing their
,

and

averaging

wonders whether refusal to sell stocks may
that dollars have a lower reputation than the
Since

—Philip Cortney

' ★

Obsolete Securities Dept.

5

_____________

Nuclegr Power- Plants: Today and Tomorrow
—Robert W. Hartwell_______b___________+

professional managers to liberate themselves from the
shackles of shopworn principles and orthodox practices. Out¬
lines six guideposts to market profits including the admonition V '

diversification,

■

99

This, the writer points out,

those gagsters

3

Development in World Trade and Monetary Policies

mits

against

laugh off obsoletes!
:

anticipation rather

on

even

can

Management and Analysis

L.oeb___L_________.,___

—Ira U. Cobleigh.

•

about when better investor

i

—Gerald M.

convictions

courageous

buy

JOURNALISTS
—Cover

.

Steel in General and Wheeling in Particular
.

to lead rather than

THE BAWL STREET

Not

protective umbrella of the current "favorite fifty." Window
dressing considerations or fear of what the client might think
must

Page

.

--_^__r_Cover

_

_____

professional managers' temerity and resulting below aver¬
market performance that comes from staying within the

age

...

A Look at 1958 Economy and Consumer's Attitude
—Ernst A. Dauer

educate—investors

to

*

Long-Term Securities?

_________

Partner, E. F. llutton & Co., New York City

for

3

.

$72.00

*
Othey
.

_

and

$65.00

U.
Members

States,
per

$68.00
per

-

ol

'

*;

INCORPORATED

year

,

.

39

BR0ADWAYt NEW YORK 6

^

Publications
.

W* V. FRAHKEL & CO:

lr

year,

per

year*

S

.

„

J

and Quotation Record — Monthly
pert year.--(Foreign Postage extra.)

Note—On account ol the fluctuations ii.
the
rate of
exchange
remittances
for
foreign subscriptions and advertisements
must be made in New York funds.

,

WHitehall 3-3960

,

Teletype NY 1-4040 & 4041
Direct

PHILADELPHIA

Wires

to

.

•

<

-

i

SALT LAKE CITY

4

The Commercial and Financial Chronicle

(2608)

represents

form

a

of

savings

.

.

Thursday, June 12, 1958

.

or

investment which may or may not

suitable—all

be

be

to

geared

to

Steel Production

The

individual circumstances. Also the

Electric Output

Carloadinsrs

is indicated, for determining
whether existing policies should
be retained, converted to annuity
way

By A. WILFRED MAY

income,

in

surrendered

or

THAT CONSUMER

1958 FUND BIBLE

SHOT-IN-THE-ARM

The long existing gaps in education concerning the relationship
j insurance, to individual invesing now gets major fulfillment by
way ol full treatment as a new
feature
of
the
1958
edition
of

1.

.

,

.

„

to sales of
instalment
be drastically

What would happen
consumer

should

terms

if

durables
now

,

question,

This

re-liberalized?"

raised at
"

"*

"

M..

'.of

"ml

inaus-

try,

was
vealed
,

.

r

hers

as
...

response

of

effect

would

result,"

which

1958

N.

Stock

Y.

Protection

ema-

Exchange,

nan-" fUs combined treatment is

...

th
na.teairo.mtne

the

())1.

principle

basic

/

whose natural

A. Wilfred May

has

2

:

.

bias would lie

v,

.

in the opposite direction, strongly

substantiates the position of those
who oppose the vigorously pushed
anti-recession
proposals for a
shot-in-the-arm.

consumers

In

other words, it is clear to experts
"on the firing line" that a dose

additional

of

purchasing power,
whether from credit easing or an
income tax cut, would be inade¬
quate to overcome the existing
buyers' holiday, whether it be
rooted

in

saturation

consumer

distribution

faulty

or

insurance

j^ed

techniques

and

investing

elements

of

the

are

re-

basic-

same

problem—that" of providing ade¬
quate financial resources for fu¬
ture needs arid wants.

rated

insurance

is

both

under¬

and

over-rated," Mr. Wies¬
a Stock Ex¬
change firm expertising in mutual

enberger, who heads

*Hnc*s' realistically^points out.

as

many

today

people

are

paying too much for too little in¬
surance

of

effectiveness

any

con-

protection.

And

they're

pump-priming device would PayinS too little attention to takto depend on the propitious- mg proper financial care of themof the concurrent business selves if they hye, as most of them

sumer

seem

ness.,

and
is

environment.
with

the

billion t^x cut, of

beginning

resulting,

bulge

between

1954

of

The

$7.4

a

which $3.8 bil-

lion went to individuals

mid-1955.

This

through

accompanying,

or

in auto sales to

million in 1955 followed mod-

eratd sales of 5.7

million

in

1953

and 5.5 in 1954. Now,

however, we
must overtomei the
"backwash"
from the 7.2 million cars of 1955,
and

million

6

1957.

'

in

rr

.

both

W1"»

in lieu of exercising the higheryielding cash-surrender privilege,
is often just kidding himself.
i nsurance-inves

housekeeping
incidence

the

this

tment-financia I

include: pro¬
family buaget;
inflation; U. S.

area

related

tection

in

covered

Other elements

to
of

Bonds; Social Security;
financing
college
costs;
family
budgeting, the retirement years:
with continuing over-ail attention
devoted

to

individualized all-

an

inclusive financial

excessive

no

tended
which

the

to

industry

with

program,

"plug"

authoritatively

1956

and
-

;

to

a ripe

fund

being

is

in

the

insur-

for this purpose than they
now carry"—he wisely offers this
sensible compromise to people
with capital: "They should live a
double life, with proper protection for their families, on the one
hand, through the right kind of
insurance, and proper provision for
ance

Fund

Boom

The current boom in the invest¬

industry, reflected
launching of some giant

company

the

in

worthwhile the en¬
by this year's edition

particularly

largement
the
treatment

of

of

closed-end

companies, with an exploration of
their

from the

differences

end funds.

open-

How the securities of

companies, which

the

closed-end

now

number about 50 in the United

States and Canada, offer

interest¬

themselves, on the other, through ing opportunities for growth of
the right kind of investments. An capital, and "discount-fattened"
to the previous norm would cerintelligent combination of both yield, to the investor willing and
tainly support the conclusion that will provide more funds for their able, the varying factors relevant
a
consumer's bonus at best is families, in the event of their death to the valuation of the different
merely a temporary shot-in-the- —more for themselves, while companies, is clearly and suc¬
In any

in

car

event, the sloughing back

volume from the 1955 peak

they're alive."

cinctly

By way of detailing additional
insurance education that is called
foi% Wiesenberger gives pointers

nies, mostly of the leverage type
(i.e., having senior capitalization
which enlarges the swings both

"What's the matter with me?" Un-

f°r distinguishing among the

up

fortunately, our body politic is not
yet making many strides along
that desirable change of direction,

riety of policies now available;
a"d for understanding of how
much of each pblicy truly repre-

arm.

'

'

In bygone

days, the patient was
doctor, "When do
get well?" Now that query is

wont to ask the
I

★

★

sents

*

protection

and

how

va-

much

described.

These compa¬

and down) which had been so
highly popular in the late 1920s,
suffered

after

particularly heavy losses

the

1929

The after-glow

persisted,

as

market

debacle.

of "bust" disfavor

manifested by the

from asset
value at which their stock issues
substantial

discounts

sold in the market.

to

But in recent

years, according to a key chart,
the average discount on 15 such

Like

companies declined from a peak
of 40% in 1940 to a 25-year low
of under 10% at the present time.
Consistent therewith, their num¬

sell

to

"Steel" magazine. 7-;

t

automotive

the

.....

.

last

week

output rose by 11%
above the Memorial Holiday week and the expiration of union
contracts at General Motors, Chrysler and Ford failed to impede
In

industry

cars and trucks. According to "Ward's Automo¬
Reports," the weekly gain in output followed a month-end
burst in auto buying which carried total new ear sales for May
3.5% above April, setting a new monthly.record for the year.
the

production of

tive

The
eased

latest forecast

on

1958 outlays for plants aii,cl

on

equipment

joint survey by the United States Department of Com¬

a

and the Securities and

Exchange Commission, indicate that
businessmen have again cut their 1953 plans ibr spending for the
above purpose.
"
s
;
The Government put the new spending estimate for the, cur¬
rent calendar year at $31,000,000,000, or $1,000,000,000 lower than
a similar forecast only three months ago.
The lower figure, if it
stands up, would be 17% below the record $37,000,000,000 spent
merce

.

_

last year.
On

quarterly basis, the report indicates

a

to

an

Ol

of about

rate

1958.,

annual

The

estimate

new

a

continuing slide

$30,000,000,000 in the fourth quarter

7.7',. ■
; :"7;'--,.7
bolsters the almost universal view of lop
in plant and equipment

Government policymakers that the slack

outlays, considered
tinue

the

for

rest

a

key factor in the current recession, will con¬

of this year and, perhaps, into 1959.

As concerns the current

whole, the

a

but

open-ends and the discount nar¬
rowing of the closed-ends, renders

more

25%

than

better

a

Continued and modest improvement, through June is likely,
operations after July is less, certain, according

ago.

as

there is, of course, nothing better

fact, most people need

ber

employment situation for the country

Government reported unemployment dropped

of

shareholders

This renaissance

large

end

has

uary.
As a result of the decline from mid-April, the seasonallyadjusted rate of unemployment also fell—from 7.5% of the work
force in mid-April to 7.2% in mid-May—the first decline in the

rate since

July, 1957.
joint report by the United States Departments of Labor
1,154,000 in
the month to mid-May to 64,061,000. However, most of the im¬
The

and Commerce also showed total employment rose by

construction. Employment in
15,000,000 in mid-May and
the report said two-thirds of the drop was in durable goods indus¬
tries, the hardest hit by the recession.
Fewer layoffs in automobile and automobile supplier plants
in agriculture and

provement was

manufacturing declined

resulted

in

a

by 67,000 to

in

decline

10%

insurance in the week ended

initial

claims

May 24. This

for

was

unemployment

the lowest weekly

level since mid-November.

In the steel industry this week the rush to beat

the expected

July steel price boost is jamming mill schedules, "The Iron Age,"
national metalworking weekly, declared yesterday.
It noted that steel users who were late in placing orders for
June

Some orders will carry over
the mills are expected to hike prices about $6 per
ton as an offset to higher wage and fringe benefits.
Some steel buyers are having trouble getting the mills to
accept business for June delivery, as for, example, a plate user
who is endeavoring to get on a June 16 rolling schedule, but has
been told the best he can have is a June 23 rolling with delivery
delivery will be disappointed.

into July, when

in July.
The

.

7.

;

%

metalworking magazine

contribute to the expected

adds that the June

July letdown.

rush

Many steel users

merely moved up their July orders into June, which means

Ctf//

•

•

1

of the closed-

Continued

on

yage

HEGEMAN & COMPANY

company

300 Main

Other valuable material in this

MRS.

Marketing Department

Merrill

Lynch, Pierce, Fenner

70 PINE STREET




with detailed portfolios; full cov¬

&

Smith

NEW YORK 5, N. Y.

Offices in 112 Cities

the industry in Canada;
general appraisal of management,
comparative past performance; tax
aspects; a glossary of technical
terms; and full dividend, income,
and expense data.

Stamford.

Conn.

ARTHUR W. HEGEMAN

WILL CONTINUE

THE INVESTMENT

BUSINESS OF

HEGEMAN & COMPANY
ACTING

384-page reference work includes
full individual analyses of the 275
closed- and open-end companies,

Street,

DAvis 3-2186

to favorable tax factors.

•

will
have
their

July requirements will be that much less.
This trade weekly pointed out that the expected summer lull
in steel demand probably will boost chances for a fall and winter
pickup, barring a strike in the automotive industry. -Steel user

risen

Wiesenberger at¬
tributes, in addition to the quan¬
titative value factor, to improved
public education ("public rela¬
tions") efforts, to a spill-over of
popularity
from
the
open-end
movement, and in a few instances

block?

a

tpp official indicated little change in the job situation is
expected through the year that starts July 1.
The mid-May total was the first under 5,000,000 since Jan¬
a

steadily.

a

this

but the outlook for

so

ment

matter of

wees

in

paying full tribute to the function
of insurance — "lor protection,
as a

any

ex¬

device,

author
involved.
the

Closed-Ends

The

old age.

than life insurance;

tor

more-than-seasonal 216,000 in the month to mid-May to 4,904,000,

On the over-all approach, after

1954-1955

experience which followed

7.2

necessary,

,

economic

consistent

the

become

to

Savings

"Life

:

"Too

the "soft sell."
The

cividua! requirements and should
Be integrated with all other assets
having; present or future value;
and, more specifically, that life

ceased

the highest

was

at 60.5% of capacity, up 4 points. This
gain since the low point six weeks

operated

mills

reflects

the insured who keeps

as

paying premiums after protection

program, to be
.sound; must be designed to fit in-

last week

output

This kind of holder

nothing.

well

as

V?*, .™ajorltY that ah i a vestment
this group,

ol

,

Failures''3

XJ)
Steel

crease,

explanation is
given for the calculation of the
savings element in insurance pol¬
icies, with the significance of cash
surrender
value,
with
realistic
recognition of the real cost of both
the savings and
protection ele¬
ments.; This includes demonstra¬
tion bf the frequent fallacy of
leaving a "paid-up" policy un-

him

Index

Production

standing at about 1,630,101 net tons.
Responding to im¬
proved demand and hedging against a possible July 1 price; in-,

valuable

Very

Price

Business

year,

About Savings and

384
pp., $25).
It is fortunate for the
furthering of objectivity as well
as
the proper weighting of the
twin investing and insurance ac¬
tivities, that the author, per his cashed on the unchecked suppo¬
own
disclaimer, is "no insurance sition that the insurance is costing

the

"no

COMPANIES,

Arthur Wiesenberger & Co., mem-

sigr
For

(IN-

Arthur Wiesenberger,

e(jiti0n,

re-

.

.

cant.

business

fund

VESTMENT

consumer.

"bible" of

Wiesenberger's

mutual

the

„,ncnmo,

credit

,

Arthur

in

leaders

the

l#

a re-

conclave

cent

Too often to retain policies
only for their insurance features,
ways.

through misunderstanding, l is
needlessly wasteful.
-.
?
Realism

Auto

and Industry

value in other

Trade

Commodity Price Index
Food

order

■

to invest their cash

Retail

State of Trade

PARTICIPATING

AS

AND
RAILROAD.

MUNICIPAL,

erage of

AND

THE
IN

DEALERS

PUBLIC

AND

BANK

FIRM WAS

DISTRIBUTORS
IN

UTILITY, INDUSTRIAL.

INVESTMENT

AND

TRUST

INSURANCE

ESTABLISHED

1932 BY THE LATE ARTHUR

IN

ISSUES

STOCKS
STAMFORD

W. HEGEMAN

30

Volume 137

Number 5750

.

.

.

The Commercial and Financial Chronicle

5

(2609)

to

$2 at 60% ; and at 70%, perhaps
and at 80, $6.25. Seventy
percent does not seem a particu¬
larly wild target for 19ob, and it
would provide comfortable cover¬
age for the indicated $2 dividend

Steel in Genual and Wheeling
Steel in
By

DR.

IRA

U.

$3.80;

COBLEIGII

rate

(reduced

year).

Concluding that the steel industry may now be modestly on
the upgrade; and that cash
flow, rather than the flow of molten
metal has been the more

from_ $3.40
last
Moreover, there seems to

be

Enterprise Economist

;

particular

the

The

great

problem

in

an

en¬

economy
is
found
in
maintaining the proper balance
between the

expanding

duction capac-

ity, and the
variations in

of

pro¬

I

fj

demand

W

ex-

World
II

a r

in

we

in

ingot

capacity. Steel

actual
tra

U.

Cobleigh

tion

over

capacity
in the 30's, were
long reluctant to
embark on major
expansion; but
in the 1950's plant expansion and
improvement
programs
brought
annual

capacity up to 141 mil¬
lion tons. Against that we
actually
produced only 117 million tons in
best

think

than

more

1955, and only the

year,

optimists

we'll

90

turn

out

tons

this

million

We produced but 24 million

year.

in the first four months. So there's

doubt

no

at

55%>

current six month

managements,

the

black

companies
charges including
manage to show

mindful of

our

the

many

100 million

tons

about

present

over

ca¬

cash

and

dollars

from

depreciation
share.

a

Jones

flow

For

But the $3 billion of plant ex¬
penditure in the industry (mostly

modernization

and

So much

improved

that many
used to break even
so

operation

now

can

make money at 55% or better.
The

steel

position

today

other phenomena.

sents

several

example,'

pre¬

The big¬

and

to

$11.33.
Now there is no market analyst
we've run across so intrepid as to
suggest a roaring upsurge in the
steel trade, beginning now. There
is, however, some fairly respect¬
up

the

motor

small

in

1953

car

contrast with

industry where

a

outsider, American Motors,

has turned in the best

1958

earn¬

ings statement and the best

mar¬

ket

performance.! Elegant as U. S.
is, and attractive both on
profit margin and times/earn¬

Steel
a

ings

ratio,

think

we

also

deserve

with

sweet

others

look—Youngstown

a

cash

Loughlin with

that

flow,

Jones

&

wonderfully new
and efficient set of plant layouts
and

one

a

of the

eagerest manage¬

ments in the business.

market

zeal

for

steel

is

logical.

this

"

~

■

1,1 ■'

■

'

e

d

n

u

ficult

e
.

-

ages, may ex¬
a

pro¬

found
for

on

eration

the

generate.

the siz¬

This, plus

that

be

in

leaders.

all
The

has

the

fanfare

case

have
team

It's

the

the

with

farm

the

clubs!

of blue chips or
For them, today's refer¬

to lower

ences

truck

no
or

bluest

nothing.

magnitude Wheel¬

ing Steel is just

much irrele¬

so

vant chatter.

unless

prediction

a

been

little

stocks,

for

be amiss.

not

may

for Wheel¬

volatility in their
look at Wheeling Steel

more

a

may

The stock

at

38% yields over 5% and there is

of

the

of

fate

,,

to

we

ev^nts, there

Press

reprieves

mistaken

from disaster

tenuates

change
when

for

victories.

when

one

the
rigors
controls; we

labor

a

demands for

its

Thus,

union

new

country
of its

nation

latest

its

of

of

the

other

Wheeling might prove
underpriced as it is unsung.

as

■■

V.aV,

.

i

achieved.

mate

of

A reasonable

Wheeling cost

esti¬

point is

WE

A

and

Confronting Us

world-wide

shows

is

no

bound

to

national trade

even more

somewhere around 55%.
be able to show $1.75

ATLANTA, Ga.—John H. Cole¬
Jr., is now with Interstate
Corporation,
Fulton

should

(2) A monetary problem, char,....

,

...

.

difficulties exchange cont
lack

of

international

Continued

TO

Robert

F.

on

ANNOUNCE

THAT

Seebeck

IS NOW ASSOCIATED WITH OUR

(Special to The Financial Chronicle)

are

pleased to

announce

ALTON, 111.—Samuel R. Tingley

the election of

has

beenj added

Fusz-Schmelzle

the

to
&

SYNDICATE

DEPARTMENT

staff of

Co., Inc., 2503

Brown Street.

FREDERIC C. COLTRIN

Joins

Dempsey-Tegeler

(Special to The Financial Chronicle)

as

Vice President and General Sales

CHICAGO,

Manager

Mueller

is

111.

now

Michael

—

with

N.

Dempsey-

Tegeler & Co., 209 South La Salle
Street.

Smith, Barney & Co.
Members New York and American Stock Exchanges

Hugh W. Long

and

With R. F. Griggs

Company, Incorporated

20

(Special to The Financial Chronicle)

WATERBURY,

Westminster at Parker

Conn.—John

S.

Broad Street, New

Philadelphia

Chicago

York 5, N. Y.

Boston

San Francisco

Michna has become affiliated with

Elizabeth, New Jersey




page

June 10, 1958

>

Fusz-Schmelzle Adds

the

R.

F.

Griggs

Company,

Leavenworth Street.
5

viouslv
Co.

with

George

He

C.

was

37

pre-

Lane

&

Albany
Hartford

•
•

.

„

ols,

liquidity,

conflicting national credit policies

man

National Bank Building.

inter-

than it

acterized by balance of payments

u

PLEASED

abating

contract

(Specisil to The Financial Chronicle)

Securities

XXc

recession

sign of

has already.

,

ARE

live

problems
confronting
and monetary sys-

,

With Interstate Sees.

structure

can

three main and fun¬

percentage of capacity opera¬

tion

our

political

the free word.

(1)
which

en-

United

whether

better

times.

\

economic

tems

it is to live with such daily
and to
ignore the real
question of whether or not the
free world is showing the neces-

u-

are

damental

the

How

wisdom and courage to

the

and

There

events

•

rt"v

these conditions,

seen

Three Problems

increases;

ordeal.

•

to this challenge.

up

Chicago" AM«i.HonM.ri

sunshine

des¬

democracies of the world

ex¬

reduces

leadership
can ensure

remains to be

pleased

are

wage

.

the

The

clear—to

cause.

orous

at¬

that
the
institutions
we
expectation of sure
dividends within 12 cherish will prevail — or even
months.
The
capitalization
is suLYive*
There is no area in which the
leveraged, the enterprise enjoys
good management, and has grown relevance of this question is more
at a faster rate than the industry
as
a
whole. This may not be a
big year for steels; but the current Industry and Export Managers Club of
doldrums may be presenting buy¬ Chicago, Chicago, 111., May 21, 1958.
ing
opportunities
which will
in

their

serve

states

easy

sary

is

unity of purpose,
strong determination and whole-

will be relieved and happy if
French
democracy manages
to
survive

aim

currency

world.

hearted cooperation. Only the vig-

the Reciprocal Trade program has
not
been
completely destroyed;
cheer

and

free

worid wju need

may

tend to celebrate the tact that

we

trade

the

To meet this challenge the free

..

,

little time tor perspective. Even

be

bring

unwilling allies, they

Western civilization.

higher

vanish

of

to

can count
the narrow-minded, the selfish
and ignorant within our nations

legitimate

some

diligence

can

with

on

Philip Cortney

ac¬

•

in the fields of

work

international

As

it
an

is

many
us

the underdeveloped coun¬
tries of the world into their camp.

prove

minor

Soviet
words "de-

absorb

taken

,

!;

the

troy the western alliance and to

soon

_T

i

so

on

to

communist

that

meas¬

are

and

system

funda¬

mental
ures

.

con¬

me

them

on

we

But for stock buyers of a more
imaginative turn of mind, and
persons who are willing to accept

point of plant investment,
capacity, since 1948, has been in¬
creased
by 1 million tons; and,
totally, about $150 million has
been spent on capital
improve¬
ment in the past decade.
In actual production Wheeling's
best year was 1955 with 2,057,000
tons; and for 1958 the quite satis¬
factory total of 1,829,000.
This
year is another story, and conjec¬
ture as
to profitability depends

It

chemi¬

These clients of customers'

brokers

In

on

In

buyers.

name

second

ten

WHX

o n

vinces

are

they

Steel.

producer,
with a
2,400,000 ingot capacity,
Wheeling Steel Corporation.
It
could

who

buy duPont, in oils
Standard of Jersey, in railroads
Union
Pacific,
in steels, U. S.

inspection, not of the

number

t i

their

-out? present abil-

know,

Union has in

not dif-

are

rely
cunning
about a
i breakdown in the present shaky

nations

curate

:

folks

are

u a

all

we-

Nor

;

;

.

As

problems

are

production and trade. We

truth

•

cals,

biggest companies in the business
the

'

there

strictly

On the assumption
that steel
has, indeed, bottomed out then we
an

need it.

case

Now, of course, in every board

leverage

propose

ear¬

collateral, in

room

rise toward capacity op¬
can

gets within

of the conversion

you

additions to share net which

1%

stock

have around for

passed; in which event enthusiasm
able

if the

analyze.

clared war?

.

press

to

•

international

here

us

^ .solutions beyond
.

th

in

affairs.- The

H pities.

d

re

through

than

economic

destroy, they first,

Outside of its literal

line which has

points, pp, the bopds.
Incidentally, the bond is nice to

would suggest that its break even

It would appear now that some

meaning,

be worth two

ing is not without merit.

in

that confront

to

wish

make mad."

price, you
may expect lively market action
since one point on the stock will

able evidence that the bottom may
have been reached and possibly

equities

is

immediate

Gods

,

the stock; sec¬

on

"

Centuries ago, the Greek tragedian Europides wrote, "Whom the

shot

inflow

cash

the

by buying U. S. Steel.

detractors in the world.

total

buyers who have

steel

leaders entered

.

get this call

'

heartening experience wherein Europe's finance and banking y*
a gentleman's
agreement to end deficit spend- 1
ing by governments, and explains why we have so many
;

,

ondly, the bond insulates you- and societies.
quite well against any significant My analysis of
market loss;
the world sitand thirdly, when

and institutional

situation

tary stability and currency convertibility; and (3) our con¬
tinued concessions to high tariff advocates.
Reports on a recent

by $35 mil¬

in $5 preferred stock selling
to yield 5.55%; and $41 y2

90

Loughlin for 1957 re¬
ported net earnings of $5.65 per
which, with depreciation
of $5.68
per
share, brought the

neglected

This

leader details the telling-effect of: (1) our recession and
propensity for inflation; (2) lack of Free World disciplined mone¬

;

million in

to

The well known international business

<

company is the most effi¬
cient and most of those individual

have led off

sheet

y/iJ.l

,

,

Western Civilization.

first of all you pay very little
in the debenture price, and
yield,

share

but

gest

purchased

c o m m o n

a

as

existing
in many
financed out of retained earnings capitalizations, animates the hopes
and
depreciation) in the years for higher dividend and higher
1951-57 did not all go into added share prices.
And without high
capacity. A major slice went in-' hopes, who would ever speculate?

65-70%

at

J,

A-

Cortney descries three challenging international economic
problems which, if unsolved, are said to spell the fate of

year

and

■"

,

Mr.

"

tender of

&

each

at

this

3314

the balance

lion

amortiza¬

of

to visible and foreseeable demand.

plants which

of

on

better

or

for steel shares is based

efficiency.

ranged

S\. S

de¬

$50 in debentures plus
And, of course, $7.50 in cash. Now with conver¬
that, after all sion, 19 points away ;it might be
taxes, still will' argued that there's no hurry about
a profit in the; purchasing. - That
v i e w point
period, have an might prove, errpneous, however,

pacity. We've got it—and a rather
high percentage of it in relation

to

be

between a
high of 39%.
There
are
1,936,029
common
shares (listed'on NYSE) preceded

cars.

operating levels.

below

were

not
W

long term debt; /
:.;
Of debt securities, considerable
attraction lies in the 3%%
de¬
bentures of 1975.:;They sell pres¬
seems in -order
now, particularly ently at 94% to yield 4%.
They
with a new and higher cost of are
convertible; into
Wheeling
labor in prospect and the fact that * common at 57
%, with actual conso many companies can now
stay version to be effected by the

ample, in
steel, at, t h e
of

of

would

Pricewise, Wheeling

looks like
a
60%
month,
partly due to buying in anticipa¬
tion of a price rise in
July, and
partly due to orders for the next

series

are

dividends

has

.:v

Moreover,
whereas other major dips in steel
demand have been accompanied
by price declines, nothing in the
way
of
general
price
decline;

this

For

.

June

model

capacity is designed
to

end

earnings

By PHILIP CORTNEY*

Chairman, U, S. Council of International Chamber of Commerce
President, Coty, Inc., and Coty International
Corporation,
».

why, if
there, higher

reason

clared.

low

terprise

meet.

no

cash

important stabilizing factor in the

market for steel shares.

,

Developments in World Trade
And Monetary Policies

Allentown

•

Cleveland

Milwaukee

•

Minneapolis

24

6

The Commercial and Financial Chronicle

(2610)

best

Nuclear Power Plants:

diversity in

electric

the conventional

industry in
proceeding
diligently with the development
of atomic or nuclear energy for
the
produc¬
United

utility

States

tion

The

Depends

ment

,

It

seems
our

G. C. Haas & Co., New

to
v

Plant

the. fast

reactor

care--

design

can

-

/

neutron

which;'

Development As¬
has developed

satisfactory balance' between industrial-commercial ; and
analytical and military output. He reports that those in the
non-military category are expected to more than double their
a

(APDA)

/

-

Enrico Fermi Atomic Power Plant.;
The

fast

be

installed

duces

7 ;/

heat

verted
also

assume

most economical conven-

„

neutron

to

has

breeder

-

reactor'

7

*

plant pro¬
may
be con-!

which

electrical

market: within
and warns,

the

in

a. fairly
reasonable length of time.: Cautions
however, to buy carefully and be a slow seller

in the electronics field.
sent

may then is electronics, if indeed it can be
tional fuels are being extracted at
systems, present, and that as mine shafts be realized from the sale of heat called an industry, and even more
equipment must be deepened and other op-. and from the sale of new fission¬
baffling, the
manufacturers erations
able
material produced. The
smaller elecextended,
future
fuel
and other in¬
Atomic Energy Act of ,1954 re-.
tronics comcosts will trend
ppward. Coupled
dustrial
orwith increased cost of extraction. quires that this fissionable mate¬
panics. More

i

g a n

ations

z

conduct-

are

ing

research

and

develop-

m

nt

e

p r o-

aimed

grams
at
Kouert

vv.

* .an

well

making

nu¬

clear energy a
c o m

p e

titive

of heat at the earliest
prac¬

source

ticable time.

;

Conservation
production

of

of

two

are

fuel

lower

important

which

hiotivate

the

spend

millions

of

and

cost

the

power

objectives

industry
dollars

to

each

for nuclear development and
to assign highly trained engineer¬
ing and scientific personnel to this

year

work.

y./V/ ;:%%///

The

United

States

is

not

con¬

fronted with the urgent need for
nuclear energy that exists in
many
countries

where even now substantial quantities of conventional

is

increased

transportation

ex¬

rial

be

must

turned

will

derive

approximately

the earnings record as reported,
basic, a management which
merely churns money isn't really
More

getting anywhere and we are interested in earnings even in/a
growth company.

be

regarded

the

as

(3) Satisfactory financial condiObviously, a company which
has built up a good cash flow and

common

ti0n.

denominator

40%.

of

conventional fuel costs will result- of its annual revenue from plutonium credit and the balance from,
in nuclear

dif-

many

ferent

has cash in the bank is in

devices

position to

industry,
laboratory,

coming

or

♦An

as
coal, gas and oil,
imported at high cost to

address

by

Mr.

Hartwell

panel

discussion

Credit

in

a

Congress, Detroit, Michigan.

at

the

62nd

Annual'

..

•

■

,

struction

for

the

Presden

quite another category, since
until now it appears ,that,the
radio-TV business has>.depended

Plant,

cupy

near

York

broad

and

Massachusetts.

program

This

suggests that the

up

chiefly

/Work

plant

on

under

way

1956,

when

an

V.it/Mirtbl

.

1,

w

,

the

major reactor components

which

building

The

1958

j

Utility Issue will
to

the

cover

pertinent

Utility Industry

as

well

proceedings of the Edison Electric Institutes

Annual Convention.

installed

in

are

fabrication
the

site.

stainless

CHRONICLE

factors relative
as

be

of

Get

your

in the

The

r'

Don

t

miss the

opportunity to advertise

Firm, Corporation

or

Bank

in

the

issue

June 19, 1958
.

■
.

your

of

building.

under

placed

construction

-PRDC

the

the

of

ator

plant

Detroit

:

more

The

of

the

exclusive

in

excess

of

research

first

work.

of

'

and

large

not be

breeder

devel-

reactor

this

will

competitive, but much will

learned from

the

construction

operation of- the plant. This
*im1i
knowledge will -make

imnnrtant

important

second

and

of fast reactors
In

addition

seaich

third
more

to

expenditures,

Continued

generation

competitive.

the

APDA

PRDC
on

re-

will

page* 33

the analyst may give up in despair

an-

if he tries to

8t

al

/n%

course

a

a

to

Derhans

or

JL

the

top^^^^^

0r

j applied

should

be

new

for,
aware

biSher

although

'

:

.

remain

muLtiple,.

although^ onfe
«

Specifies Certain Firms

,

Let's

look

and mdke

at

some

a

few

companies

choices:

f

,

Electronics Associates, Inc. sells

;

■-

.v

..

'"Li?®

s ^bere ls'a Pre^y.S°od r

one
-

natents in order; to

competitive.

sin-

a

electronic

discoveries must remain ahead of
actual

occupies

draws shy of paying 30 times un-

patents granted
that

se-

Partlcular field- A S°od systems
maker may be worth 20 times anticipated earnings. Perhaps the top
companies in systems deserve a

in

engineers scan costv less: and
produce more. It is well to observe
the number of

company

Sul®f'y

an

research

lesser amount in

reaUv

most

electronics

.worth about 10 times earnings, un-

less the

of saies

for

used

profitable

A

component maker, in the opinion
of many analysts, is probably

^-ativitv

e

of

apply the punctilious

measurements

curities.

of

Detroit

from

^5) statistical evaluations. Here,

easy

themost

*

hands of

than

$51,000,000

Power

no

are

progressive, company spends

/

plant is esti-

of

to be

which

to

Th„

excesq

reactor portion

while

n\

A

Edison

building."

spend

seems

as

helpful:

the

Company's turbine-gener-

section

then cost

the

Place, New York 7, N. Y.

com-

include

this market within a fairly reasonable length of time,

attractive among the Small components and system/manufacturers, but the following are a few
guideposts
which have
proved

position

to cost in excess of
$14,000,000. The 100,000 kw plant'will

and

The Commercial & Financial
Chronicle

swer

mated

be




will

.

by reliable spokesmen seem to
indicate more than a doubling of

/"

/

There

is

PRDC sodium storage and purification building, control and office

opment

25 Park

in

Detroit Edison has

and

-

us

pro-

.

100-ton

vessel

...

Regular Advertising Rates Will Prevail
For Space in This
Number.

i

been slower than the optimists
forecast, the projections given to

Investment Considerations

pleted the plant service facilities, including water, sewage and
heating services. Other structures

Edison

9

large

reactor

$37,000,000 for the

Utility Industry.

ducers.

within the capsule-shaped reactor

building

perspective of the business conditions

competitive components

this

stages
completed and

turbine-generator
»

in

advanced

or

steel

being

now

•

to

are

at

THE

onlAlir

ical aspect seems of the greatest
interest, and while growth has

newly filled

.

v

Kntnrf

...

sold to other electronics com pa-;
pies; Hence, in the long run, the
ing, 120 ft. high and 72 ft. in; system maker is the purchaser and
diameter, has been erected and the one who stands to dictate
successfully pressure tested. Marly* prices
among
the "increasingly
of

OF

consumer

.

site. The large steel reactor build-

"ANNUAL UTILITY NUMBER"

of

since Aug. 8,' an
ancillary industry and the of government work generally.
inaugural /cere- .bulk, of components are usually'' The industrial-corn mercial-analyt-

mony was held at the

PON T MISS IT

the flow

.on

spending/and /consumer whims,
which is another matter. The mill-tary business will evidently be
with us for a long time/and, on
the/ plus / side, a great deal of
important
research / has /beeil

PRDC.

been

./././'/V:''

better

new

its

,

such

be

move

reorient

into

a

fields
ultimately be-?
products than/a
the sale of steam. This breeding
economically competitive
company
which
is congenitally
c o mmerciaK
without so great a reduction in. potential, coupled with other ad-s
strapped for cash. We have seen
cost
as
would
be
required
at- vantages inherent in this type of
and'military; some/unfortunate
examples
of
present.
requirements.; small
companies
which
nearly
./"..y reactor, has motivated APDA to
spend some $13,000,000 on fast re-/ Jtagar T. Meaa, J«"A heavy duty went
To those not engaged in nuclear
bankrupt because of an inactor research during the last five
power trans- sufficient treasury.*;
/ - '7.;« >
power development,
the numer-years and to commit $5,000,000 for former
is obviously
a
piece of
ous, somewhat different types of
(4)
Sales
balance/
The
reactor test equipment including electrical
equipment, yet its prin- industrial'"commercial-analytical,
reactors under construction or in
full
scale
components
such
as ciple
is based on an electronic entertainment and
advanced
stages of engineering
military sides of
pumps, piping, reactor vessel and- phenomenon.
and design seem to represent a
electronics are all apt to grow fast
control
rods.
Most of
this 4est
v This
"hit
or
miss"
analyst's long-term prefer-/in the future/, but'the farsighted
program
hardly
?e m?/e a.v^mutually supporting. This is not
ences lie with the electronic sys- analyst might well prefer to cast
to PRDC for integration into the.
terns
the case.
It is true that a pres¬
companies.,. Most-ot These his lot with the company, which
actual plant.
:
have shown* large, gainsun/sales, offers a satisfactory balance besurized water reactor has been in¬
Construction of the plant is pro-stalled in the Shippingport Plant,
although; perhaps-nofeyet.-accom- Aween the industrial-commercial-^
at
a
site
in
Monroe .panied
near Pittsburgh, that a large boil-; ceeding
by--similarfdmprovements'analytical, and the military. The
ing water reactor is under con¬ County, Mich., approximately- 35 in / net earnings. Recently/;-.many entertainment field seems, to oc-»
for

power

miles southwest of Detroit/-The of
these companies/have. tbeen
reactor, a full scale developmental;obliged to; curtail ••expanSioti'and
Chicago,
that
a
sodium-/
meet current industrial
demands. cooled, graphite-moderated reac¬ breeder, with a design rating of research activities when-cash rc-r
While this nation has
300 mw of heat and 100 raw of sources ran
relatively tor will be built in Nebraska and"
dry. The recession and
large fuel reserves, they are not that the nuclear plant here in electrical power, is being built on budgetary cuts had an ill effect
land leased from The Detroit Edi- 011
inexhaustible. Demands for elec¬
many of them, and " at. least
Michigan
will
include
a
fast'
son
trical energy are
Company.
Detroit
Edison; some-/of the weaker ,companies
increasing every breeder reactor. There are other
will construct, own and operate;
year and it is apparent that a new
were obliged to cut to. the bone or
important
reactor
types
under
ad jacent turbine generating
source of
energy will eventually consideration.
facili-; to seek, /some means kpf. survival
Modified and im¬
be required to
ties and will purchase steam re-,
supplement that of proved pressurized water reactors
such as. merger with a financially:
: -fnAm
are
under
construction
in New quired for those

fuels,

must

,a

tronics should

Today nuclear power is not government for credit. PRDC eco¬
nomic studies, based on the pub¬
economically competitive with the
government
schedule
of
cost of power produced from con-, lished
ventional fuels.
It would appear, credits, indicate that the company.
pense.

however, that possible increases in

still

is

likely, elec-

the

to

over

earnings

net

as

highly significant factor. On a new
financing, for example, the pricing
of the new issue may depend on

Revenues

consumes.

•

and

energy

the

potential of produc-,
Perhaps the most baffling of all
ing more fissionable material than industries to the financial analyst

it

York City

Wall Street partner canvasses elusive smaller electronic firms
inf terms of investment opportunities, criteria and advice./In

naming and briefly describing specialties of some of the Ameri¬
firms, as well as those in Canada, and possibilities of
/"offbeat" products and companies and those in the, military
field, Mr. Mead expresses a preference for companies offering

Develop-/'/

and has started construction of the '

in meeting

to

By EDGAR T. MEAD, JR.*

:

designs.;'*,

Atomic

Reactor

Power

sociates

Conventional Fuel

reasonable

New

analyzed

Atomic

power

that

which

Company (PRDC) has

breeder

demands.

Costs

power.

Our

on

with

desirable

Power

fully

to

elec¬

of

tric

fuels

the nation's energy

is

y

con-

operation data will '!;

more

Describes

plants
will be in service in U. S. A. by 1960-1962, keeping us in the
forefront of peaceful atom development, and that nuclear
power will become economically competitive with conventional
N
/
power with increases in conventional fuel costs.
The

comparative

'

Mr. Hartwell concludes that many large nuclear power

the

and

select the

Power Reactor Development Company
Detroit, Michigan

-

-

*

the

available

be

soon

in

that

struction

By ROBERT W. HARTWELL*
General Manager,

reactor

development proUnited States

our

here

indicates

Today and Tomorrow
-

Thursday, June 12, 1958

.

type has not yet been found. The
gram

'

economical

most

or

.

.

around

.

40

and

over-the-counter,
—

~

(2) A management that knows satisfies practically all of the re-Jto make money. It is com- quirements mentioned. As you may
to build.up sales year know, EAI occupies about 70% of
.?y^ar»
one should perhaps
analog computer field, and this

^

about

the

creation

Although there

are

of

cash

flow.

countless other

might
.

.

reach

_

around

$30
m

_

million within five

This

years.

f-A"mugn uiere aie couniLiess oxnei
■+^«uri«
^
*actors. the amount that the com- suggests a possible tripling of
pany cbooses to report and repre- company sales during this inter♦From

an

address^ by

Mr.

Mead

be-

VwkC^JSeBrf9M^A,"^tio^

val, and since the

company

Continued

is

on page

one

43

Volume

187

Number 5750

.

.

The Commercial and financial Chronicle

v

t(2611)
---<f.

facturing

its

and

satellite

indus-

ditions, the correction phase could
through 0,6 year'

ity

in

turn

suggests

last

New York City
vV '
?
leading business economist supports his statement that

stronger

case can

be made showing the recession is at

Iron
a

or near

these

Business statistics

the past

over

month

have in general been far
favorable than at any time
since; the recession began,
The

this

of

combination:/
of sharply cur-,

are

tailed

bookings

facturing out¬

is

put and strong
final demand
to

seem

led

to

inventories

further

but

construction

awards

f

ta

a c

could

Smith, Barney & Co.

mean

no

longer be declining,
,

Summary
By

of summary, the
after nine months of
way

omy,

econreces-

so encourag-

"

_

„

Reasons

year,

Government
spending,
buying and foreign de-

consumer

mand

for Decline
were exces-

in

was-cut

n-

dustry after industry. New orders
were filled from stock as much as

for

been

_

well

drastic
for

American

cuts

inventory

The

has

goods

maintained
in

has

despite

business

and

contraction

spending
capital goods,

in

hard

goods

Robert F. Seebeck

not

seriously affected conoutlays either for soft goods

P°ssible; materials purchases were sumer
Smith, Barney & Co., 20 Broad
below current rates of con- 0r services. In the aggregate, pur- Street, New York City, members
:|^mP':lorV.
much as half of all chases of goods and services by of the New York Stock Exchange,

have

w<7

^

.

.

in manufacturing re- consumers and government are-announce that Robert F. Seebeclc
fleeted the need 1;o_bring mvep- only $1.5 billion below their 1957 has become associated with them
Jorms into balance.-The dechne m peak.r Federal spending in the in the syndicate department. C
business t investment -from this months ahead will begin to rise,
for highways and other state and s°urce may .well be behind u^ by reflecting the acceleration in deFrederic C. Coltrin
local .facilities and for residential ^e end of summer. A neutral in- fense-contract
placement earlier
building 2,, ventory policy, if not,active.ac- this year.

omy into bet¬
ter balance.

In

strong is

sive,. employment

as

.

stronger

so

.Because inventories

re-

moved^up steadily toward last
year's highs. What-was lost earlier
in private ^contracts as the boom
in plant expansion ended has now
been replaced by rising awards

steadily, bring¬
ing. the econ¬

outlays,

that by year-end the total of
pri-

vate investment in goods would

demand.

„' Two

Construction awards rising.

Heavy

be

process

B*~B
"
B
Robert Seebeck With

decline in business outlays
for
plant and equipment.
And
this, coupled with a modest rise in
construction

our

*

con_

sion, still continues to show surprising strength of end-product

•

being slowly altered.
(3)

liquidation

ing for the outlook later this

bettered this policy

are

the

has been

an

still under instructions to

duce

manu¬

itself before year-

cure

than that

no more

necessary. That in turn
is why the fast that final demand

have

Purchasing- agents

-year.

of

becomes

unprecedented rate of inventory
liquidation in the opening months

more

One

inventory,

inventories, begin

reversal of the

capacity.
output

As

manufacturing

reasons.

excessive

was

may

in

.

ize> if

m(J" tirjuin'g

payrolls

.on,
■

two

Still *he reversal of inventory far less widespread than in
liquidation could at least neutral- earlier postwar experience,

to approach bedrock requirements in
a growing number of
instances, a

Ascribes recovery-lag to

curtailed

for

end.

spending

purchases.

a

workers

year ago.

This

that prospects for modest upturn late this
year depend upon
reversal of inventory liquidation, increased Federal
continuance of temporary excess

W€,
a

cut

r was

^

VMr

'-r*2
industries, finance, and

Employment

began. Mr. Gainsbrugh hastens
add that this does not mean a quick or full recovery, or
prosperity-around-the-corner, is in the offing, and also adds
to

consumer

a

more,

.

an

its end than at any time since it

and continued

was

cPrvioJ

thA
the service

Economist, National Industrial Conference Board

;'y.V.;y.
A

it

ac

By MARTIN R. GAINSBRUGH*

.

Chief

unturn

•

■

,1 I

the

7

case

,

can

be

now

made that the

other

recession is at
or near

than

its end

M. R. Gainsbrugn

at any
since it began.
.

fime
4!

^

ui

has

Among

u-

-.ii-

u

the
•

u

risen j'steadily

for six months,

farm/employment

?as

and

pur-

favorable^signs which have .be-

chases iof ttfarm •: equipment^ ^are
- v ^benefiting
therefrom.
Hours of
(1) The firmingr-up of personal work-in manufacturing (seasonincome and retail trade. Personal ally 'adjusted) have been' about

9f^e .^vldent are:

income in the first four months of
1958

never

unchanged for several months. The

dipped below its -lengthr'«of the?work-week is no
level a year earlier. In fact, con- longer declining in manufacturing.
sumers
now? have
just about as
''
Seps No Quick Recovery
inuch income to spend or save
once

after /taxes

they had on the
average in 1957. 'Retail Sales, deas

These -favorable
recession

purchases, were $0.5 billion higher
than in April, 1957. The most recent flow-of consumed income, if
maintained, is ample to support a
level of consumption expenditures
throughout tfhis year, somewhat
higher than that which was maintained during the first half of 1957.

orders"1 flowing

suggest that
.

nation's

factories

least" stabilized

and

.This

corner.

just

outset:

around

has-been

goods /-recession

.

right

*

.

20%: from

Output of basic
been

cut

Stable

to

*From

address

an

tion,

New

and

n

York

spending could be stepped

rsaving

Mr. Gainsbrugh
Supply ConvenMay 26, 1958.

ects earlier

cellations

•

is

+uo+

hot'surprising,

y

•'

V

This is under

no

offer

metals

L

149

'

to

1956

167-

:160

1956

148

134

NOT A NEW ISSUE

250,000 Shares

& CO.

G. D.

Common Stock

(Par Value $2 Per Share)

Price $45 Per Share

;

be obtained from the undersigned only in those States
may legally offer these securities in
compliance with the securities laws of such States.

Copies of the Prospectus
in which the

141

138,

1956

157

152

1953

216

19.6

.*•

—11.7

20.4

—16.9

—41.9

—35.8

-—14.2

—12.3

125

—20.4

—17.8

—21.8

—13.8

169

.

may

undersigned

Apr. 1958

—14.1

86"

„

1957

.

—12.5

1956

223

216

Aug. 1957
and. glass_____f May 1956
Lumber, and products
Aug. 1956

174

172-

130

*115

*109

—16.2

Furniture

Aug. 1957

123

120

110

—10.6

Oct.

1956

146

128

—12.3

Nondurable

- manufacturers
mill products
Apparel and products

Aug.

1957

'132

"130

Textile

Feb.

1956

110

*101

*91

—17.3

Oct.

1956

117

*il2

: *98

—16.2

R- hber Products

Jan.

1956

147

*145

*116

—21.1

Feb.

1956

111

+104

+98

—11.7

The First Boston

^

Blyth & Co., Inc.

Corporation

—20.0

Leather

Smith, Barney & Co.

—12.5

Instruments'

—

fixtures.—

and

Miscellaneous

manufactures

'

products...

Aug. 1957

163

'

Dec.

1957

142

*•

Chemicals

Aug. 1957

186

products

Petroleum and coal
Food

and

Jan.

1957

146
114

127

*114.

114

*111

132

...

gas

Mar. 1957

Feb.

Metal, stone & earth minerals Sep.

fFebruary.

SOURCES:

Federal

—

—

•

i

v

8.1

—14.8
—

—

—

6.1

—

—

*

1957

1956

92
154

143

131

.

,

*-114

"tll2

-

87
151

-130

.

109

*

The

Conference

—

—

r

—-

Eastman

5.2

Dillon, Union Securities & Co.

8.3

9.2
4.6

Glore, Forgan & Co.

9.9

Goldman, Sachs & Co.

Harriman Ripley & Co.
Incorporated

Kidder, Peabody & Co.

5.8

5 1

Incorporated
-

Merrill Lynch,

Board.

Pierce, Fenner & Smith

■

,

Stone & Webster Securities Corporation

"

0
+

0 9

—16.8

—32.6

—13.9

—18.9

—10.8

White, Weld & Co.

-r-28.7

—15.6'
v

116

Lehman Brothers

Lazard Freres & Co.

2.1
2.2

—10.6

0
1.8

17.4

*130

^Preliminary.

 Reserve Board;


—

62
:

—

3.5
4.3

—13.0
-

1957

1957

natural

—

8.6

137
*178

.142

Dec.

and

—

*149

140'.!:

Sep.

:

♦March.

.

*'182

Mar. 1957
oil

—18.1

9.2

—13.5

'124

•

*157

beverages

Minerals
•Crude

'

141

manufactures

"Coal

—

155V" T32-

162

Printing and publishing
and

'158

•

end products

anu

—20.6

177

„

•

clay,

Tobacco

.

,

,

Apr. 1957-

121

.

Nov.

—

Peak-

—14.3

133

>

machinery—.. Dec.
machinery.
Dec.

Paper

or as an

or as a

The

June 11, 1958

Dean Witter & Co.

Inc.,
mem-

Midwest Stock Ex-

manu-

128

Transportation equipment— Dec.

;

buy,

'

' i26

145

Sep.

1

1956

Dec.

metals

Electrical

;

the

be construed as an offering of these securities for sale,
solicitation of an offer to buy, any of such securities. :
offer is made only by means of the Prospectus.

circumstances
to

-

therefore,

Apr. 1958

.

144'

147

Dec.

manufactures

Stone,

of

;

Apcil—-V
'.1957
21958

Index

195G

Nonelectrical

J

bers

con-

COrG of unemploy—

;

Dec.
—

Fabricated

-

Miller,

can¬

ila

ment continues in durables

•

Month

-

production

Manufactures

,

the

&

Union Commerce Building,

form

nose

thflt th6

1956-1957 Peak

Industry—

'

may

basis for recovery,

most-

approved, so that
markedly.

__

joined the staff of

*

,-Per Cent Change^

'

these

has

Mellen

even ""der such con- tinuance of temporary overcapac- change.

1956-1957
.

,

the

While

Joseph,

the

its peak.
Nondeclined by only

..

CLEVELAND, Ohio—Harold ML
Thorman

Changes in Industrial Production, 1956-1958

;

Primary

stability of consumer purchases of soft goods and

for

up

continued

and

and * modernization services.

j(Seasonally adjusted indev number^,<1947-1949'=="1.0©)

Durable

,

instances to eliminate proj¬

some

low.

.

Industrial

,

inventory liquidation, the

^

by

City,

of

-of months. Such investment

the

from

The "Conference' Board's

sharply

Industrial

/

..

Long & Co., Inc., Westminster at

recent survey of capital appropri-

at

It

!

Lefoi'e Triple

capital
ya^nai

may

postwar

demand

major
mojyi

more

6% durihg the-same period (see
table). .- t -«vy
.

materials has

new

a

final

some
wure

years scheduled rise in defense outlays,

seasonally

raw

for
iui

a- matter of roneror more

have
since
number of major

than

more

recovery

industries. That correction is

ations still suggests that for the
capital gbodsyindustries this may
February. In a
well be the longest-lived contracindustries the rate of production tion in two decades. It foreshadhas for many months been well ows a'continuing decline in capital
below the chew-up rate of their goods spending by manufacturers
customers: * Steel inventories, for well into 1959. • Dwindling profits
example,: have been off far more and, in/sofrie cases, deficits have
sharply^ in the first quarter of not bnly 'led many companies to
1958 than in'-any' quarter of 1957.rpostpone expansion, but even in

risen

,

capital

a

As

durable 'output

>

„

its (purposes, given proper tax incen-

'compared with a 13%
in-total industrial output,
durable goods output is off by

fully

..

.

decline

into

have

near

or

" n0t mM

v

Si TeT<wSy,y ^that iives" Bui

prosperity'.is

{2) New-order situation improving.
Official and unofficial data
the

at

v

Hugh Long V.-P.

ELIZABETH, N. J. —Hugh W.

But excessive inventory of goods goods producers.for many months Parker> announce the election of
was °nly one of the reasons for tof come. The second major im- Frederic C. Coltrin as Vice-Preslthe ,d^ine in business invest- balance,' excessive inventories, is dent and General Sales Manager.
ment. The second reason, was ex- rapidly being corrected. Prospects
cess.lve inventory of plant and for a'modest business upturn late
With Joseph, Mellen
fquiPJuyJP :^ian^ °^.our. biaior this year depend upon a reversal
(Special to The Financial Chronicle)
\

the "cost

signs that

be

may

and^excludTn^automotive qufcf

April

^

A major depressant, excess ca¬
pacity, still overhangs the market
at midyear. This may well retard

6

The Commercial and Financial Chronicle

(2612)

Kodak

man

Milwaukee Company. 207

Company—The

East

Michigan Street, Milwaukee 2, Wis.

Dealer-Broker Investment

Selected Food Stocks—Review—James Richardson &

it

understood that the firms mentioned

if

•

send interested

to

will be

Options—Booklet

how to

use

Bosch

Arma

^ y'-,

;

■

-

,■

Corporation—Analysis—Joseph Faroll

growth of civilian nuclear projects,
planned new uranium-milling capacity to be allocated by
AEC, and developments affecting Algom and Pronto Ura¬
nium Mines—-Atomic Development Mutual Fund, 1033 Thir¬
tieth Street, N. W., Washington 7, D. C.

ciation

Co., 29 Broadway, New York 6, N. Y.

Building Outlook—Analysis—H. Hentz & Co., 72 Wall Street,
New York 5, N. Y.
Burnham

Cleveland

Automatic

outing

Stores, Inc. and Standard Brands, Inc.

Street, New York 4, N. Y.

Also available is

Phillips Petroleum Company, and

a

an

memorandum

>

able

Chance

current Foreign

Letter.

Canadian Economic Outlook—Analysis with a discusion of the
final report of the Gordon

Commission—Burns Bros. & Com¬

pany,

Limited, 44 King Street, West, Toronto 1, Ont., Canada.

Cement

Industry—Analysis—Reynolds & Co., 120 Broadway,
Also available are reports on International
Company, and American Sugar Refining Company.

New York 5, N. Y.
Harvester

Fire & Casualty Insurance Stocks—1957 earnings comparison-

Laird, Bissell & Meeds, 120 Broadway, New York 5, N. Y.
Inflation and the Stock Market—Discussion in the current issue
of "Market Pointers"—Francis I. du Pont & Co., 1 Wall Street,
New York 5, N. Y. Also in the same issue are analyses of

Biscuit-Bread

Bakers,

Soft

Drinks,

and

a

list

of

selected

companies-with extreme liquidity, and two selected portfolios,
conservative, the other aggressive.

one

Insurance

Stock Survey—Annual

comparative analysis of 109

of the country's leading insurance

companies—Blyth & Co.,
Inc., 14 Wall Street, New York 5, N. Y.

Investors

Favorite .Stocks—In

change"—"The

Exchange,"

the

Wall

11

issue

current

Street,

of

"The

New

Ex¬

York

5,

N. Y.—$1 per year. Also in the same issue are discussions of
book value vs. market value, and American Motors Corpora¬
tion and MIP.

Japanese Stocks

—

Current information

—

Yamaichi Securities

225

East Mason

Metals

Marine

& Fire Insurance Industry in Japan — Discussion in
"Monthly Stock Digest" — Nomura Securities Co., Ltd., 61
Broadway, New York 6, N. Y. Also in the same issue is a re¬

view

of

Japanese business conditions and data on Isuzu
Motor Co., Nihon Cement Co., Mitsubishi Electric Manufac¬
turing Co., Toyo Electric Manufacturing Co., Tokyo Gas Co.
and Fuji Precision Machinery Co.

Over-the-Counter Index—Folder showing an up-to-date com¬
parison between the listed industrial stocks used in the DowJones

Averages and the 35 over-the-counter industrial

used in the National Quotation Bureau

yield

and

market

performance

over

stocks

Averages, both
19-year

a

as

period

Wis.

& Co.,

-• • •

Co., 55 Liberty Street, New York 5, N. Y.
circular is

an

l

Also in the

same

Great Northern Paper

Company—Analysis—Herzfeld & Stern,
Street, New York 4, N. Y.

Corporation—Analysis—William R. Staats

& Co., 640 South Spring Street, Los Angeles 14, Calif,
Hoskins Manufacturing

Co.,

Buhl

Building,

memoranda

Breweries,

Inc.,

The

Prophet

Co., Shatterproof Glass Corp., Tecumseh Products Co. and
W. J. R. (The Goodwill Station) Inc.
/
La Salle National
La

Bank—Analysis—Bacon, Whipple & Co., 135

Salle

Street, Chicago 3, 111.

on

Also available is

a

United States Life Insurance Co. in the City

of New York.

34, N. Y.

Parker-IIannifin
South La

Corp.—Memorandum—Doyle, O'Connor & Co.,
Salle

Street, Chicago 3, 111.

Peabody Coal Co.—Memorandum—R. W. Pressprich &
Co., 48
Wall Street, New York
5, N. Y.
Penick & Ford, Ltd.—Memorandum—Green Ellis &
Anderson,
61 Broadway, New York 6, N. Y. Also available
is a memo¬

randum

on

Standard Brands, Inc.

Oil—Data—Herbert E. Stern & Co., 52 Wall Street, New
York 5, N. Y. Also in the same circular are
data on Diners

Club.

Reynolds

National Quotation Bureau,
Inc., 46 Front Street, New York
Preferred Stocks Most Widely Held in 245 Common Trust Funds

—Harris, Upham & Co., 120 Broadway, New York 5, N. Y.
Also available is a special Atomic
Energy Review, a study
of

security purchases and seles of 53 investment management
groups during the first quarter of 1958, and a discussion, in

the "Pocket Guide" of 20
companies with sizable stock port¬

folios.

Rails—Discussion of prospects for appreciation—with
particular
reference to Atchison, Topeka & Santa
Fe, Baltimore & Ohio,

Railway—Dreyfus & Co., 50

Tobacco

Co.-—Analysis in current "ABC" letter—
Amott, Baker & Co., Incorporated, 150 Broadway, New York
38, N. Y.

In the

same

issue

are

analyses of International Tel¬
ephone & Telegraph Corp., Columbia Broadcasting
System,
Inc., Ryder System, Inc. and Thrifty Drug Stores Co., Inc.
Available also

are

the current Amott-Baker Real Estate Bond

Stock Averages.
Southern Nevada Power

Company—Analysis—G. A. Saxton &
Co., 52 Wall Street, New York 5, N. Y.
Tenney Engineering, Inc.—Report—Milton D. Blauner & Com¬
pany, Inc., 115 Broadway, New York 6, N. Y.
F. W. Woolworth

Co.—Memorandum—Woodcock, Hess, Moyer
Co., 123 South Broad Street, Philadelphia 9, Pa.

Stocks

—

Discussion

with

financial institutions

...

Investment Dealers' Association
of Canada annual convention at

Manoir

June

following

investments at this time

.

.

are

Richelieu, Murray Bay,

19,

.

.

(Minneapolis-St.

1958

Paul)
City Bond Club annual
picnic and outing at the White
Bear Yacht Club, White Bear
Lake, Minn.
Twin

June 20, 1958

(Philadelphia, Pa.)
Traders Association

Investment

Philadelphia

summer

at

Overbrook

Country

Radnor

NSTA

Notes

Township, Pa.

Securities Traders Association of
Detroit & Michigan annual sum¬

at the Lakepointe
Country Club.

outing

mer

Golf
June

27, 1958

Bond

(Detroit, Mich.)

Club

Detroit

of

outing
Country Club.
June 27, 1958

Association of New

York

outing at Sleepy Hollow
Country Club, Scarborough on
the Hudson, Scarborough, N. Y.

June 27, 1958

Syndicats

(New York City)

June 27,

1958

(Philadelphia, Pa.)

Philadelphia
ciation

at

Glen

Country Club,
Cove, L. I., N. Y.

Securities
Asso¬
outling at the

annual

Overbrook

Golf

Club,

Bryn

Mawr, Pa.
(Chicago, HI.)

Aug. 21-22, 1958 (Denver, Colo.)
Club

Bond

Mountain

INVESTMENT TRADERS ASSOCIATION OF PHILADELPHIA

Red Owl Stores

outing

summer

of
Denver - Rocky
Group IBA 24th an¬

frolic

summer

The Investment Traders Association of
Philadelphia will hold
their Summer Outing on June 20,
1958, at the Overbrook Country

Club, Radnor Township, Pa. Jack Christian of Janney, Dulles &
Battles, Inc., is Chairman of the event, assisted by Bill Radetzky

at

the

Co¬

Country Club.

Sept. 18-19, 1958

.

Metals & Controls Corporation

annual

Lakepointe

at

(New York City)

Investment

lumbine

attractive

Mallinckrodt Chemical Works

outing
Club,

June 24, 1958 (Detroit, Mich.)

nual

We suggest that the

r

Security Traders Association of
Chicago summer golf outing at
the Woodridge
Country Club,
Lisle, 111.

particular reference to

Standard Steel Products
Manufacturing Company and East-

For

outing

June 18-21, 1958 (Canada)

June 28, 1958

Broadway, New York 4, N. Y.
Recreation

Investment Club

Essex Country Club.

at

;

(Boston, Mass.)

18, 1958

Nassau

&

&

7"/'"-

June

summer

Pure

to

of Newr
day at

of

Old Republic Life Insurance Co.—Memorandum—Richard
Gray,
3626 Kings Highway, Brooklyn
135

field

Westchester Country Club, Rye,,
N. Y.

Quebec.

s

Co.—Memorandum—Wm. C. Roney &
Detroit 26, Mich.
Also available are

International

on

annual

25th

Boston

& Trust Co. of New York—Bulletin—Laird,
Meeds, 120 Broadway, New York 5, N. Y.

30 Broad

Bond

York
<

analysis of Texas Natural Gasoline Corp.

Hoffman Electronics

Club

Municipal

65

Federation Bank
Bissell &

(New York City)

June 13, 1958

Emery Air Freight Corp.—Data—Alfred L. Vanden Broeck &

—

4, N. Y.

Southern Pacific, and Southern

C. Haas

annual

Club

Bond

outing at Oconomowoc Lake &
Country Club,
Oconomowoc,

Supply Co.—Bulletin—De Witt Conklin

Associates, Inc.—Analysis—G.
Broadway, New York 6, N. Y.

South

Report—Harris, Upham & Co., 120 Broadway, New

Milwaukee

Electronics

memorandum

N. Y.

&

-

(Milwaukee, Wis.)

June 13, 1958

Organization, 120 Broadway, New York 5, N. Y.

New York.

York 5,

52 Wall

Street, New York 5, N. Y.

Ducommun

(Los Angeles,

Coronado, Calif.

-

Cluett, Peabody & Co.—Analysis—J. R. Williston & Beane, 115
Broadway, New York 6, N. Y.

Company of New York, Inc., Ill Broadway, New York 7,
Latest Field

Street, Milwaukee 2, Wis.

Vought Aircraft—Analysis—Halle & Stieglitz,

Club
spring
Kirtland Country

Security Traders Association of
Los
Angeles
annual
Spring
Party at the Coronado Hotel,

Bergstrom Paper Company—Report—Loewi & Co. Incorporated,

is

at

(Cleveland, Ohio)A;-...
Bond

Calif.)

Plough

letter — Burnham and
Company, 15 Broad Street, New York 5, N. Y. Also avail¬
investment

outing at Salem

June 13-14-15, 1958

analysis of
on

-

Club.

Canteen—Analysis—Hayden, Stone & Co., 25 Broad

Incorporated.

View —Monthly

June 13, 1958

to Best Foods, Inc., Campbell Soup Co., Jewel Tea Co.,

Kroger Co., Safeway

annual

Country Club, Peabody, Mass.

Distilling Company—Analysis—Thomson & McKinnon, 11 Wall Street, New York 5, N. Y.
Also available is a
survey of Food and Food Chain Stocks with particular refer¬
ence

(Boston, Mass.)

Boston Securities Traders Asso¬

American

Atomic letter (No. 38) on

Field

Investment

them—Filer, Schmidt
June 12, 1958

&

parties the following literature:

on

Co., 120 Broadway, New York 5, N. Y.

American

pleased

EVENTS
In

Stock

Recommendations & Literature

COMING

Sons, 173

Portgage Avenue, East, Winnipeg, and Royal Bank Building,
Toronto, Canada.
&

Thursday, June 12, 1958

..

.

(Cincinnati,

Ohio)

Municipal Bond Dealers Group
annual outing — cocktail and
dinner party Thursday at Queen
City Club; field day Friday at
Maketewah Country Club.
Sept.

29-Oct.

1958

3,

(Colorado

Springs, Colo.)

National Homes Corporation
Mine Safety Appliances

National Security Traders Asso¬
ciation Annual -Convention at
the

.

Broadmoor.

Oct. 6-7, 1958

Association

Firm Markets

Firms

(Boston, Mass.)
Stock

of

Exchange

of

Governor!

Board

meeting at Somerset Hotel.
Nov.

Troster, Singer & Co.
Members New York

74

Security Dealers Association

Trinity Place, New York 6, N. Y.

HAnover 2-2400




Teletype NY 1-376-377-378

30-Dec.

5,

1958

-

(Miami

Beach, Fla.)
Investment Bankers Association
of

at

America

annual

convention

the Americana Hotel....

Nov. 2-5, 1959

(Boca Raton, Fla.)

National Security Traders Asso¬
ciation Annual
Convention at
the Boca Raton

Club.

Volume

187

Number

5750

.

.

The Commercial and Financial Chronicle

.

(2613)

homes

The Outlook for Coal

of

tion

or

^

opments.

a

present-day - difficulties now facing the
Mr. Gebhart concedes, despite his conviction

some

industry.

coal

,

more

nomically

V
•

,

the waste in¬
',

*

♦

seven

nomics

h

i'/"
Verne

a
t
i
and Jules

a

a

;

-

Therefore, I bring

building

a

j

you

a

para-

dox: This

supersonic age of barely
predictable miracles will be based
to

increasing

an;

old.

predominant
and heat

industry
mediately

fuel

the

irv

decades

ahead will

coal.

1

■

that
lm-

bitunii-

be

■

h

,

This may seem a bold statement
to make to purchasing agents who

trained

are

in

think

to

of

terms

of

economy,

materials

efficiency,

,

reliability and ample supply. That
is exactly the kind of thinking we
let

bituminous

about

want

talk

me

bit

a

look for coal

about

Lin

Basis for

cpaV so
the out-

the space age,

111

™

,

^

i

Bright Coal Outlook

children, plan to linger
we
can
on
the planet
while

And

will be

with

we

long

as

here

are

buying and using

as

know

we

ancl
and more electric

ical

eommercial-s

c a

1

e: ;■

1S

usually
subsidy,
but

reactors,

power

government

the

sources

produced

of

coal.

.

Dr

c

G

s

ite

General

u

research lor

Company,1 re»
600 utility ^cutives

hnri/on

to renlarp

100

the

increased

on

the

1

e

*.

nn«

nmmH

nf

of

electric

and

sistance
fuels
for

■

is

utilities

the

coal

burned

by

produces power
Major alu¬
minum companies are locating in
to

the

make

aluminum.

tons

said

coal

of

the

Products Corporation of

time, labor

and

fuel.

That

investment

just four

making — more
appliances and chemical wonders

the western

outskirts of Chi¬

the big Hillside: shopping
center, completed in 1956, burns
cago,

coal at

an estimated annual
saving
$26,000 below the price of com¬
peting fuel.
'

would

automobiles and aircraft and

highways and a thousand other
things. To make these things—
including missiles and satellites
and eventually space ships — requires vast amounts of energy,
And

is

coal

abundant

States

nation's
of

source

coal

of

reserves

the

The

energy.

in

enough

most

United

the

last many
hundreds of years—long after the
are

last drop

to

of crude oil

Institute,

to

the

who

men

combustion

construction

new

as

an

other

equipment
of course,

was,

hard facts of ehgi-.
But here is an¬

factor

they

Ask sidered—and

■.

probably

which

buyer might well

in

Coal Reserves

Price

and

Stability

r

_

Proved reserves of oil and natu¬

the

assist.

to

More

committeemen

than

from

thousand'

a

the

coal

What

in¬

cal

BCI shows industrial
coal burned in

users

that

in

way—on a

the

most

basis

as

records

serves

modern automatic

of

reveal,

the

As

Institute of

why
industrial
firms
should use coal, and use it in up-

a

United

coal
States

much

automatic

amounts

reserves east of the

concludes

of

coal

at

that

years

Let

from

an

me

cite you some

BCI

examples

Continued

cases:

offer to sell

or a

on

solicitation of an offer to buy these securities»

offering is made only by the Prospectus*

,

He made this
prediction: "Not only will the use
of

coal

the

why the coal industry

reason

look

the

beyond

future.

bright

present

Coal

does

can

to

difficulties right now and

want

to

look

us

The
now

those.

discuss

few

a

But

years

a

have

some

let

I

first

ahead.

largest customer for coal is
electric

the

Coal

generates
all

than
power

utility industry.

electricity

more

other

fuels

and

water

combined. Electric utilities

used some 160 million tons of coal
last year,

tion is
the

and their coal consump-

constantly increasing with

booming

energy.

utility

use

of.

The projected

growth,

the needs

of

address

our

by

its

Due

June 1,1958

June 1,1988

share of power

production

electric

predicated

upon

rapidly expandMr.




utility
js

way>

Price I02.655%o and accrued interest

In

coal.

age

The

efficiency in the
it took

1946

In

10

reduced

more

to 0.70

years

an

use

Prospectus

may

circulatedfrom only such
lawfully offer these securities in such State.

be obtained in any State in which this announcement is

of the undersigned and other

dealers

as may

aver¬

of

that

elec¬

figure

0.94 pound,

to

of 27%.

crease

in the

a

FRANCIS

home

F.S.SMITHERS4C0.

heating
q

p

president

jump

for

Qnly

MacDonald,

marketing

penn p0wer

STERN

a

nOW
,

BURNS BROS. 4. DENTON. INC.
CLAYTON

BROTHERS A CO.

last

Vice-

INCORPORATED

WM. E. POLLOCK 4 CO., INC
SECURITIES CORPORATION

of

year>

INCORPORATED

CUNNINGHAM, SCHMERTZ A CO.,

,

figure that will

rise

to

one

million

INC.

STEELE, HAINES A CO.

jje said "coal by

heats 380,000 homes—a

ALLISON-WILLIAMS COMPANY

RAFFENSPERGER, HUGHES A CO.

the

Company, said

THOMAS A COMPANY

MULLANEY, WELLS A COMPANY

thig may reqUjre another 375 mil-

wire"

WEEDEN 4 CO.

STRO"?o,£>.S2oMPANY

of coal-fired electricity

use

jjon ^ons

I. duPONT 4 CO.

bring it down

years may

pound.

mon^jlj

HALSEY, STUART A CO. INC.

de¬

Some experts say

Not far ahead lies another

for

the

by

example

kilowatt hour

one

tricity.

10

industry,

of 1.29 pounds of coal to pro¬

duce

was

least

at

outstanding

an

of increasing
of

to

.

The

pattern of

Gebhart at the
National
Association
of
Purchasing
Agents Convention, Chicago, ill.
♦An

but

years,

66.5%."

is

this,

terms,

Dated

Bonds, Series H, 4%>, due 1988

threefold in the next

over

sus¬

annual

broad

utility industry)

(by the

increase

England Power Company

First Mortgage

boiler fuel by 1975.

June 10, 1958.

"large

reasonable

$10,000,000

New

are

prices will be available for many
in the eastern region." He

removal.

west)

slowly than prices for

more

re¬

Columbus, Ohio, after

study of coal

Mississippi

equipment for
coal handling combustion and ash

present

generation will rise from 55% of
or

pected.
In

the

at

years

already

the

convincing sultant to the Battelle
Memorial

solid dollars-and-cents

—

to-date

coal?

government geologi¬

enormous, enough for many hun¬
dreds
of years.
One authority,
Harlan W. Nelson, economics con¬

equipment is economical, efficient,
clean and trouble-free. It demon¬
strates

about

stated and

dustry help in this work.

whiff of

or

known

now

300

fuel
mind:

engineering designs, velopment ■ and pf • recovery, is
equipment cost figures and other steadily climbing. This inevitably
information
pertinent to -every means price increases for coal's
job in which they are permitted principal competitors.

The

oil and natural gas. In some sections of the country, he said, natural gas will all but disappear as

18

reserves

in

reserves

last

con¬

every

bear

as¬

select

for

the

on

neering studies,

equipment
or

and

based

BCI provides engineer¬

and

fuel

sales

supportVa

Coal

of

by these companies

organization : called

,

Choice

have

consumption rates. And he forecast that coal prices would rise

natural gas has been squeezed out

of

vast

are

-

-

Mississippi River alone (and there

and

-

equipment.

On

east of the

reserves

pays

years.

surveys,

This announcement is not

billion

152

Motor

Detroit replaced outmoded
equip¬
ment at a cost Of
$205,000 and
saved $54,000 a year in

modernizing and
improvement ral gas in this country are being
of existing plants. Qualified BCI used
up at a rapid pace. While it
field
engineers
in
15
districts is true that more reserves are
throughout the nation, plus the being discovered at a rate which
technical
staff
in
Washington barely keeps up with consump¬
headquarters, furnish fuel cost tion, the cost of discovery and de¬

Ohio

Valley where abundant
coal supplies move only short dis¬

;•*

ing services, information and

Speaking of metals, a growing
amount

is

for

of coal.

manufacturers,

„

Black

steam

of

sociation.

as

-

'This'

fields

affiliate of the National Coal

i«

About one Pound of coal

tons.

fertile

fact, to service such indus-v

engineering

steel industry, which used

Ahrmt

r

use

Bituminous

—

will be "the predominant factor in
the fuel picture between now and
1975." He said, incidentally, that
fusion power might be 50 years
away, not 20.

generating

increased

generating efficiency from 65 to
82%, at a saving of $3,000 a day.

off in

established

coal-based chem¬

industry.

million

most

-

At the same session, in Boca
paton> pia>> fhe utility executives
heard
this
prediction
from
Fischer Black, editor and pub-

major

:

equipment

'

least 20 years away.

It

ore

trial customers, the coal
industry
related interests
including

future

Mr.

-

steam

equipment/

and

near

power

their

Explains Proof of Economy
In

wfjnel ™
ladfeai
future," he said. Dr."chnololies bemy„ •'^vestigated
Suits predicted that fission power
m
thG
foie^eaWe
is not yet economically feasible,
^hiLe the^noshiofofcoal the
and fusion
the housefoundation Sf steel nLduction
broken hydrogen bomb
is at ±oundatlon °* steel Pioduction.
the

•

,

of

one

?°al's, second largest customer

cu

steam

on

j„

-

nearly

right now, like much of our
highly integrated economy, but
this is obviously temporary and
its long-range future appears se-

qiat there is nothing on the technowirai

hauling

eco¬

30-year-old

t

Steel is somewhat in the doldrums

vice-Presi-

Electric

cently told

sounder

Goodyear Tire ;.andRubber Co.
Akron, Ohio,... modernized its

eco-

B

hearly I15 million tons last year
^ coke... ovens and otherwise,

they operate at far higher cost.

we

—

demand

PrpHW.

arP

Usher of "Electrical World": Coal

In the first place, we aren't all
going out of this world. Most of
us, and our children and grand-

best.

atomic

a

American

power

nous

on

experimental

dent and director of

Thp

will

extent

rnnmarile*

is

plants,

coal-fired

more

®

T

is

a

com¬

at

"Other

-

Zincar
conservative

than

markets.

•

rock-ribbed reactionary.

this

The

the continent to their

across

.

a
a

amounts

from the Gulf Coast to the
power
dams of the Pacific Northwest and
then
shipping the metal back

seems

suppose

hardly
pick
up
a
ing population, seems least sus- A
commission
spokesman
has
newspaper
these
days
without ceptible to swings in the economic stated his opinilon that coal conreading a story about the United cycle, and thus provides a steady sumption (for this purpose) will
States launching a newy satellite expectancy for coal.
probably double during the next
or
long-range missile—-or explain-r
•
•'
•••' ■'
15 years.
/
'
ing why the latest attempt fizzled.
■ What About Atomic Energy ,
v
Ag fQr
satellites, it Is not farWe are- told repeatedly that we
This brings up the inevitable fetched to suggest that the first
stand at the threshold of the
space question from persons entranced
rocket to the moon may be proage. It may be relatively only a
by the glittering developments of pelled into space by coal. Another
few years before we are
advised,'the space age: What about atomic General
Electric
official
has
to make reservations
quickly if we energy? Won't a few pellets of stated that solid and liquid chemwant to see Mars before the toururanium solve all our power prob- ieals burned as rocket fuel are
ists spoil it.
•'
.*
"
lems cheaply and easily?
now being produced from coal
The technological feats of this
and that the missile program ex¬
The utility industry has furpansion will place an even greater
"ished
its
own
It

aluminum.

of

panies find

can

answer.

stations

vast

It takes about

pounds of coal to make

pound

Energy Commission
through its various operations being one of the nation's largest single purchasers of bituminous coal.

.

.

•

You

the

Industrials," along with
These are modernizations. How
the cement industry, which is a
about new installations?
Well, the
large, important and growing user ultra-modern
here arises another paradox: The of
41-story Prudential
coal, represents my industry's
manufacture of enriched uranium
Building here in Chicago, recently
third largest consumer classifica¬
requires huge quantities of coal,
completed, burns coal the modern
tion, requiring last year, in total,:
the Atomic
way ,with
automatic
from

moved

latter/. Expresses gratification that prices for
standard coal grades have now pretty well stabilized.

generating

furnish

of power required.

earlier than anticipated, al¬
though most likely in areas re¬

►

volved in the

to

to

which

scene

,

and, paradoxically, atomic energy age, that present
competition from imported residual oil and natural gas sold
at "dump rates"; is
proving to be a "bad headache." Urges

It therefore

j; unreasonable

roads

over

tances

not
that
commercial, unsubsidized atomic
power may grow on the American

•

coal will be needed with every passing year
by utilities, steel,
cement and other industries, export and domestic
sales, rail¬

limitation- of the former and FPC control

include

modified by unforeseen devel-

*:

gal executive paints and completes the picture with descrip¬
advantages a bright, long-run picture of coal's prosand

will

homes by 1970.

Predictions of experts have ac¬
quired a habit of being changed

Vice-President, Freeman Coal Mining Corp., Chicago, 111.

cts

1960 and
new

Cites Another Paradox

~

By BARTON R. GEBHART* ~

\

by

40% of all

9

FIRST OF

IOWA CORPORATION

WALTER STOKES A CO.

page

27

10

The Commercial and Financial Chronicle

(2614)

series

Outlook ioi Real Estate Finance
, By MILES JL. COLEAN*
Consulting Economist, Washington, D.

j
,

\

I
C.

;■

■

ceeded."

Notes

teed mortgages
recent

even

Amid

one

—

range

insured

situation

,

^

clear.

will

There

be

1 e n t y o f
for fi¬
nancing real

the ratio

when

1953

gages were
to the total

for mort¬

years

when it fell to about
in both these years
restraint was being put upon the
Since

53%.

estate opera¬

expansion of credit, it is easy to

tions.

conclude that monetary

rates

Miles

L.

that

not

or

is

true

was

considerable
is

there

But

argument.
question that

little

today real estate is a principal
beneficiary of an easier monetary

policy.
at

the

I

arbitrarily ad¬

interest rates on FHA

the

general movement
the level of ad¬

ministered rates
the

or

characteristic

the

a

either the up-

on

The other

downswing.

is

lag in changes

in

mortgage
interest
rates
in
comparison
with
interest rates

generally.
Neither

of

circumstances

these

is directly attributable to the ef¬
fects of monetary policy; and it is
safe to

It will be worthwhile to take

look

that

of interest passes

ago.

to

open

reasons

mortgages which causes

whenever

Colean

prevailed

Whether

two

are

sharp changes in the availability
of
funds
for
these
mortgages

to

At that time there
were complaints that real estate
was
the principal victim of the
so-called
tight
money
policy.

•

com¬

Economic

Adviser

stocks

changes

and

bonds

reached

a

sjhigh point of $22.3 billion in 1955
and remained stable at

lower

assume

that without

them,

the year-to-year stream of mort¬

level

for

two

slightly
years—$21.9

1957.

Within this

i

total, however, not-

able shifts took place as between

i

j mortgages on the
| stocks and bonds
i The mortgage part

one

hand and
the

other,
rose from $9.9
(billion in 1953 to $16.2 billion in
; 1955
and then fell off to $11.6 billion in 1957.

i

mortgages

;

on

For those who think

the step-children
of the investmeht market, it may

j be

are

noted that in each of the years
mortgages accounted for

covered
more

than half the

capital outlays
in the included areas.
In
19o5,
mortgages accounted for nearly

j

fluctuations of that financed with

insured

and

guaranteed

a

billion in 1956 and $21.7 billion in

t

73% of the total and in 1956 about
67%.

the

to

months, when
is

♦An address by
of

sponsored
Real

Mr. Colean

Real

by

Estate

May 22,

showing

seasonal increase, pective market.

a

conducted

greater than

volume of bank

enormous

How

does

of

re¬

are

a

the

gages.

mort¬

were

other demands

of
on

course

many

the money sap-

ply during the past few

years

than

those mentioned. Consumer credit
climbed

precipitately

standings of $38.7

from out¬
billion at the

beginning of 1956 to $44.8 billion
at the end of 1957. Inventory ac¬
cumulation during this period also
exerted
the

strong pull

a

whole,

seen
—an

such

no

On

undoubtedly

restrained

diminish.

only when the combina¬
high prices and reluctant

was

of

consumers
excess

*of

revealed

temporary
productive
capacity,
a

Estate

National

Boards,

before

the

Management

Association

Washington, D.

1958.

.

been

by..

re¬

The

-

loans

1

of

con¬

dwelling

when

easier

the

money

to

come

uptrend
*.

.

con¬
.

..

is

trend

same

building

widely true
construction,

which

in many places has yet to
full stride. Last year shopr

a

„

ping

centers

mercantile

their

and

other, types • of

building fell

to

high money
profit margins.
dences that
so

are

nancing

pickup of

last..

are

now

tion

of mortgage :fi¬

of

out

certain

this

we--had

as

this

than

year
we

appear

close

have

to

volume of

same

certain to have

we are

arranged

And

also

low
evi¬

There

larger volume

a

victim

a

and
are

-

of projects
going ahead.
likely to follow.

All in all

unsold

costs

number

a

held back

More

last, bas¬

commercial

on-

1955

year

office

hit

Prospects for other types of real
activity are also good. Con,?
*

This

of

estate

ventional

in

much

tinues.

to, the

private construc¬
a

ago,

year

with the promise of a

Van

-

securities.

In

other

the

words

main effect of credit relaxation
far

has

been

to

bring

new

so

com¬

petition into ; the long-term in¬
vestment market at the very time
that the volume of

issues

faced

new

corporate

decline.

a

in¬

The

stitutions

normally in that mar¬
ket, already contemplating an in¬
in

the

to

crease

look

supply relative to
demand for funds, are being

the

forced

around

the

and

—

only place to look is the mortgage
market.

along

still better

some

they might look
a

feel that

may

little faster

a

or

little harder.

Many may won¬
why, with high grade corpo-

der

rates down from peak yield of 4.12
to
3.55
and
long-term govern¬
ments from 3.66 to

interest

gage

perienced

3.14, that mort¬

rates

have

similar drop.

a

not

ahead

of

their

situations

ing

end'of the first quarter,
dollar amount
of
contract

of

real

reported by the F. W.
Corporation, had
fallen

than 10% behind the volume

en¬

banking,

ing.

the

first

quarter

sharp

contrast,

mates

for

increase

of

1957.

18%

over

house

a

corporate

financ¬

long been identi¬

cles.

In 1945 he activated and ad¬

ministered until 1956

April.

contracts

and

fied in real estate investment cir¬

esti¬
general

last

estate

Mr. Fund has

In

preliminary

April show

of

Apartment

were

and

13%;

commercial
buildings
18%; while the year-toyear drop in the volume of indus¬
trial building contracts had nar¬
were

continu¬

to

,

previously-

investment

estate

real

as

Dodge
more

addition

The Fund

,

awards,

in

activities

Inc., it has been announced. Mr.
Fund was formerly President of
Company, specialists iri

'At the

the

the

last- year's gaged in by The Fund, Company,

performance.

corporate

ment

a

read estate

financing

Vice-President

as

depart¬
with

the

up

Joseph J.
in New

Garibaldi Organization

Jersey.

Harold Cook President of Bond Club of N. Y.
Harold

ex¬

Part of

collaborate in. private place-ments, underwritings and special

Not only are, they at
showing a strong—an unusu¬
ally
strong-seasonal- ■?, movement;
they have also jumped substan¬

tially

Alstyuu, Noel

will

upturn.

ous

last

up

I know that

the

President of

H.

Cook

The

of

Spencer Trask

Bond Club

of New

Co.

&

York

to

has

been

succeed

elected

Sumner B.

are

as

so,

that, as soon
they were convinced this was
the Reserve authorities went

into

reverse

action.

Through

a

is that mortgage rates
sluggish.
In the absence of
anything comparable to the bond
answer

Special Opportunity for You:

Emerson

of

Morgan

H.

Cook

Stanley

&

Co.

The

election

and

annual

market, day by day quotations
are
impossible.
Mortgage rates
are reached
by private negotiation
rather than public trading, and
the

Here Is A

86,000

had

sales in the past few weeks.

in

number

amid

Paul A. Fund

And it may be noted

of

C

noticeable

a

the

of

renascence

started in apartment build¬

and

five

of

number

mild

a

andapartment * property remain year ahead. - If our troubles were
eliminating discount controls and in a favored class with many in¬ confined to those that confront
us
in giving some flexibility to .VA
vestors,*- and the safrie is true of iri our own ar£a, we should have
interest rates, has brought insured-; ■i sale-lease
backs,:especially ..where very little to perplex us.
•
:
*
and guaranteed mortgages within
there is-" a single- tenant with a
the range of the market.
Second/ high credit standing.! And again
the so far modest drop-off in new
there
is
accumulating evidence
corporate issues has helped the that the available ffunds. are- not
■v:
competitive position of mortgages,, going begging.
By
far
the
greatest
impact, y;. r After a disappointing first quar¬
Paul A. Fund, has joined the Nexy
however, I am sure has been the ter in. which business uncertainty
remote
one
coming
from ri"the was aggravated by about as bad a York Stock Exchange firm of Van
heavy infusion of bank reserves.. stretch of weather as, construction Alstyne, Noel & Co:, 52 Wall St.;
What has happened
is that the has endured in. many-,years, con¬ New York City, members of the
New York Stock Exchange, and
banks, in face of lowered demands tract awards have taken
a/-vigor¬

previous period has

an

but could not
It

funds.

outpouring of credit
outpouring which monetary

actions

tion

on

reduced

houses and

interest rates, combined with the
sensible action of the Congress in

M

There

ally

num¬

decline

ex¬

the gener¬

on

mortgages,

ings reached nearly 119,000 com¬
pared with less than 83,000 in 1956

the great major¬
ity feel that sales will be as good

their impact is

First,

units

,

better this year than

insured

to be in the, midst of

year's

ditions,

uation and that

or

with

credit

operations
for
1958
change in the credit sit¬

ing this conclusion

houses.

Even

indi¬

of

out

^

news.

restricted

pros¬

Builders

three

good

building.

A recent survey

Home

be

individual

of

as

least

rise.

have: expanded

since the

real

affect

There

and

ways

increasing.

this

all

estate finance?
ber

builders

been

has

of

their

■

plenty! of 'business

apartment

the National Asso¬

by

that

cates

in

j.

Building

last

that

the

on

be

appear

more

cheering is the

more

are

ers

customary, has been much

not

is

only

example, despite the contin¬
weak showing of projects fi¬

we

vived confidence that home build¬

Board, "The total increase in five

that the credit boom slowed down.
Institute

Even

built

should

will

at

easing of credit in

be

to

this

nanced

guar¬

even

upsurge

The number of sales of

houses

According to Woodlief Thomas,
the

the

the

to
,

done in the development
financing of large properties

ued

isting houses is obviously step¬
ping up and the number of new

year.

in circum¬
gage
finance would run much
stances that have brought about
more
smoothly. All we have to
this happy prospect.
Last year do for evidence of this is to look
brought to .culmination a three- at the remarkable
stability of
year period of vast capital expan¬
residential construction financed
sion. Rising from a total of $16 6
for consumer loans
and normal
with
conventional
loans, where
billion in 1953, net investment in
business
credit,
have
invested
interest rates ar^ free to move
l'eal estate mortgages and corpo¬
with the market, amid the frantic heavily in securities and loans on
rate

1954.

period of the previous

same

serves

v:.

VA

and

the situation

year

conditions

of the relative dis¬

One is the effect of

This is quite

a

followed

pared with a growth of $1 billion
in the

than

created, interest
rates—from
October through
January—have fallen further and
more sharply than in any similar
period, and the credit made avail¬
able has been rapidly absorbed.

ministered

downward.

that

dramatic

scheduled

There

is

contrast

anteed loans has been

■

_

and Apartment

well

For

transactions

applications for insured and

An

cause

think account for this appearance.

eral years and

in

beginning

billion

$7

gener¬

The recent increase in

assurance.

riods.

sev¬

trend

-to
the;

character¬

be

to

as

affirma¬

an

to

■

'

-

♦

♦

,A11

and

involving home purchase or build¬
ing, there now appears to be real

May the total loans and invest¬
ments of commercial
banks - in¬
about

"As

answer.

ciation

they have

the

tive

vestment found itself in these pe-

than

been in

I have little doubt of

this

From

one.

credit

;

\s'

There

Will the borrowers appear?

might occur in one
year."* Monetary policy in a re¬
cession obviously has succeeded.

the

were

are

lower

stiff

a

ally.

advantage at which mortgage in¬

More¬

mort¬
interest

gage

been

raised

50%

V Uptrend

be

been

about

v

Office

in respect to the enlarged
supply of mortgage funds that has

general decline is

a

•»

-

may

the

recent

months,
8% from April to April.

ease.

question

same

istic1 of

raised

ex¬

of

just under 60%

"was

money

over,

have

creased

;

and last year

:

p

roughest

of

midst

end of November to the

:

r

Roughest Mortgage Years
The

skepticism has been

"•

The

Successful

Found

Ease

like "pushing on a string."
In
instance
the
string
appears

of the market. Finds cheering
and guaranteed loaiw and^

that

cloudy, at least one
a
very
encouraging

and

is

—

in

the

cheering, revived confidence of home builders.

business

still is fairly

thing

within the

increases

more

a

Much

slowly downward, and

expects sluggish interest rates to move

the side of credit

Thursday, June 12, 1958

.

from

rowed

open

pressed about the effectiveness of
monetary policy in a recession.
You have heard the expression
that the relaxation of credit Mn

a

praises Congressional action in bringing insured and guaranthe

Monetary

recession obviously has suc¬
plentiful supply of mortgage money on hand,

"monetary policy in

states

beginning with not think that the full impact of
market op-, the past Federal Reserve actions
erations last October, the net vol- has yet been
registered on the
ume of member bank reserves has
mortgage market; 3and I doubt
been increased about $1 billion, that the Reserve lias yet come to
with a resultant potential credit the. end of positive measures on
in

expansion of $6 billion.

consulting economist anticipates larger volume of
mortgage financing this year than last and calls attention to
encouraging prospects in store for home and other types of real
estate activity.
Disagreeing with common belief regarding
effectiveness of monetary policy during a decline, Mr. Colean
A leading

-

actions

of

increase

an

.

.

is

result

cumbersome

a

and

insensitive process.
More Mortgages and Lower
Rates Ahead

"FOR SALE"

By

the

rates

token,

same

mortgage
declined more

have

may

than is revealed to outer observa¬

Beautifully Bound
Commercial & Financial

tion.

Set of

Chronicles, 1914-1952

Available in New York
City—Write

Certainly

taken

or

place.

National
Estate

Association




c/o

Chronicle, 25 Park Pl.

N. Y. 7

of

change
at

a

can

be

quarter

fairly safely
a
point.

of

Changes of as much as one-half a
point in the rate offered for at¬
tractive commercial properties are
no

longer

some

tincommoii.

further

drop to

I

Harold

W.

B.

Chappell

Allen

Real

spring mortgage
market
report,
the
trend
is
clearly downward and the abso¬
put

Edwin L. Beck

I

Board's

lute

Phone REctor 2-9570

change has
interpret the

some

As

expect

occur.

I do

meeting took place as one of the main events of the Bond ClubField Day June 6th at the Sleepy HoHow Country Club.
William B. Chappell of The First Boston Corp. was elected
Vice-President

include

Allen

to

J.

succeed

Nix

Sikes of Shields & Co.

Four

of
as

Mr.

Riter

Co.

The
as

new

Secretary

officers

and

also,

Macrae

Treasurer.

members of the Board of

Governors, elected today,,
Tucker, A thony & R. L. Day, Allen
Avery Rockefeller, Jr. ^f Dominick
Dominick, and Earl K. Bassett of W. E. Hutton & Co.

are

new

Ernest W.

Borkland

of

C. DuBois of Wertheim & Co.,
&

Cook.
&

Volume 187

Number 5750

.

The Commercial and Financial Chronicle

.

.

(2815)/II

governmental process.
It cannot
be" blamOdrdn the mistakes or sel-

/.fishhess of individual persons

•i

business concerns, whatever

To Provide J obs and Growth

r

Distinguished economist and writer on Federal debt suggests to
Senator Byrd's Finance Committee immediate measures that
can: be done to increase jobs without any outlay of public
/ funds. Dean Abbott discerns no cure-all value in public works
.!
program, designed to check unemployment, and discusses three
major economic ailments now afflicting us. In listing factors
responsible for price inflation, he refers to mutual security mili¬
tary and foreign aid expenditures that generate purchasing
power not matched by goods flowing back into domestic
civilian consumption. Would limit normal, fiscal policies to
three specified objectives and give to monetary authorities the
job of acting as economy's balance wheef.
■

;

.

-

"

'

compared with the very high
levels
of
1955, 1956 and 1957.
These are the immediate causes
for the rise in

decline in

a

unemployment, not

consumer

an

inability

sumer
•

sipn

on

the'part of the

to spend.

So-called

scribing

designed to bolster
spending are like pre¬

a

weight-gaining diet for

heavy

,

decline has not been

nessr

Danied bv

toward

trolling

costs, adequate

i

.-v.-

,

Charles G. Abbott
economic growth
that i^ necessary to give our country a rfring standard ©f living and
mbre important—ensure^ the economic - and ^military; safety of the
to provide for
W.
arid foster the

PtnuhiipV:..-,.

^

.

.

J 'inMC

particular, V public,; policy>*■; should
seek To vv encourage: the kinds .' of 'S iSf
businesk^penditure OripIahLaria:V x-xfe.
equipment ?That will reduce costs
-an(j incFdase -ipi'Oductivity.'
-T
Hhai
.v..

T

T

r

^

•

i.

e

First,

reasons.
business

the

reduction

expenditure T since

.

,

one

-

•

,

m

rent

the raise

suggest

in the

tries.
;

x
...

,

of

the

chief-

causes

of.the

perrditpre just to increase capacity

.

—in several -lines of-business :We

dentally—this

stemming from technological ad-

/

may

not

label

it

the

tell

vou

whv

I

nut

the

^ n*\,eu yo" wpy 1 put the

matter this way. To the course m

the

..

.

■ Courageous

a n

ought

to

persons

,

-

.

_

where

.

unem-

relief, in the
should not

form of public works,
-

.

,

...

by Dean Abbott before

Senate; Finance Committee on Financial
of the United States, Washing-

Digitizedd. .c„for FRASER
ton,


made

pursuit' of

full

not

an

to

excuse

use

for

do

national

a

General

objective.

the

deficits,

the

increased

na¬

dollar cost.
One

cause

;

of inflation to which

I

give weight in my own think¬
ing is the appreciable fraction of
the national output that has been
absorbed by the military services

sent

or

abroad under foreign aid

During the postwar
period at least 12% of all our
production can be accounted for

prices to fluctuate in accord with
dictates

at! least
interest

as

view

In

of

free

markets, is
the public
is "full employment."

asmuch
of

the

in

decline

at-

that

both

Currently the economy suffers
two—perhaps three—major
First, since at least as

objectives will
long as one
of the Feedral
Government and trip other does
not.
Amendment of the Employ¬
ment Act so as to make price
stability an explicit goal of public
policy would greatly strengthen
the basis of an expanding econ¬
omy, and it would require no out¬
lay- of public money.
^
<
not

be

has

the

Let

The

achieved

so

blessing

me

give

second example.
already taken by

a

measures

the Federal Reserve Board to

re¬

requirements

©i

duce

reserve

member

banks

and

make

more generally available are
goods aimed at hastening recovery. Bills
bought in foreign now before the Congress looking
aid programs places purchasing
to a change iri reserve require¬
power in the hands of persons
and
companies making these ments are a further step in this
goods. But this purchasing, power direction. These measures are de¬

and

of

is not
back

goods

matched by goods flowing
domestic civilian con¬

into

signed

both

to

hasten recovery

and: to serve as long-term

Continued

"

on

any

of these securities.

offering is made only by the Prospectus.

June 12,195*

$50,000,000

General Mortgage

Bonds, 3%% Series due June 1, 1988

Price 101.335%
plus accrued interest from June 1, 1958

Copies of the Prospectus may be obtainedfrom any of the several underwriters,
including the undersigned^ only in States in which such underwriters are qualified
dealers in securities and in which the Prospectus may legally be distributed.

to act as

The First Boston

Corporation

Eastman Dillon, Union Securities & Co.

date. The dollar is now worth less

than half Of What it was in 1939.
This disaster is
L__jifLr

partly attributable
JL

to war, partly to an inadequate

Carl M. Loeb, Rhoades & Co.
Salomon Bros. & Hutzler
A.C Allyn and Company
Incorporated

reforms

page

Lehman Brothers

ailments.

three postwar* waves of advancing
prices—1946-48, 1950 and 1955 to

credit

in this way.
-The production of military

NEW ISSUE

Kuhn, Loeb & Co.

the

these

Refer to Three Economic Ailments

from

in

value of the dollar it seems clear

the

the

em¬

a national policy/ but
not make price stability

did

it

for future expansion and the gov-

Fourth,, public tempting

communities

ion

1946

ployment

sion and reinforce the foundations

as

matter of relief. But

Condi

First, consider the relationship
"full employment" arid price
stability. The Employment Act of

of

eral

ment
ought, now, to take the
steps that it and it alone can take
to encourage the types of private
spending that will end the reces-

ernment

a

,

d

plovment brings hardship to -in- - far back as 1936 there has been
dividuals, the hardship should be a steady and persistent tendency
alleviated at the local level as a for prices to rise. There have been

*A- statement

in

they do not constitute

—

program.

price stability, leaving individual

The

*

of

some

.

recession

million*

to

prices that has
taken place since the 1930s. Fed¬

:.',,

imaginative
leadership could initiate several
measures of the
type I have in
.mind, that would - be aimed at
making the economy work better.,
Most of them would not require
the expenditure of public funds.
presently I shall make two or
three specific suggestions. But my,
essential point is that the govern-

,,

"

-

increase

try to move some of this type of

spending forward.;

unemployed at the time of Pearl
Irr

inflation

elements that have contributed to

depression of that decade and there
9-16

turn

now

,

things that
private initiative, free
markets
ticable-scale would probably not and
the
private sector Of the
curethe
recession;
The
great economy can do better than it
public" works expenditures of the can.
1930's
did - not ' cure
the ' great
purpose.

^

of

solved through. mone¬
tary and fiscal policies alone.
Ther.e are, of course, many other

ffw

deepens, I would
question whether* economic

me

1

works expenditures on any prac-

Harbor.

type

cannot, be

tive

_

spending pf-a cost reducing type,

.

an excuse for creating deficits
arid spending the public's money
pri projects of doubtful value.. X
say this for several reasons. First,
if I
read
Secretary Anderson's
remarks correctly, we are going
to have, deficits anyway.
There
urill be plenty of deficit spending,
Vrithout deliberately creating it.
Sbcorid, larger government spendirigj irrespective of whether it
helps some of our present problems will certainly make others
Worse, It, is not a cure-all' for
every ailment of the body politic,
Third, the time-lags involved in
settirig Targe public
works
in
iriotion are
typically such that
these
expenditures
don't come
quickly
enough
to
accomplish

still

the
today

we

as

were

have

increasingly referred to as. a
"wage-push" inflation and — inci¬

thl ^nnnniv
the monopoly

first union-made depression in our

Vance, may begin on a. consider-.
;*This current check to economic able scale, in I960 and 1961. If
expansion, should not be seized on that is so, it would make sense to

their

is. why

we

have too much capacity now—but ^ industrial relations in. the Gradu-. sumption. Military items and" for¬
do^ need investment ; of , the atei School of Business Adminis- eign aid goods are, as you might
;type that will dmprovetefficfericy/.^^
>•
and cut .costs.
Third, -persons
better informed than I rtelK me,
This advertisement is neither an offer to sell nor a solicitation of offers to buy
heavy goods indus- there . -are f reasons
to
believe '

No Cute for Public Works

,

inflation

programs. •

recession
a

I declinenn business activity. Sec- history.
ond, we-do not need business ex- >
me

recent' figures

that. national
output has thus far declined only
.abbut 4% from its all-time peak,
that 'employment
is * only 2-8.% less- than it was a yean agn and
tHat= personal income may be 2%
below the peak of. last August,
Unemployment is largely concenseen

of

is

SrinS

stem from
pOWer of labor unions. If the cur-

ithe; current recession m business fourth quarter-of 1957 has/been /historians
,

and

•«£«

that

xi

I make^isrTast point for three

,

~

activity?
J*-- 'The * most

kind

bust

ISSTtaSRTta
j?i
«?+*
i^
n?
tKes^V the Tedlrll Sate

,

+
u
t v
+*
W,
,(£) What part should the Fed*

supply. .That

money-

money.

private spending that are needed;
not toward'--using public
money ^
in piaee <0f .private money, r In'

era! Government play iri checking

-

accom-

armreri-

or

KM?,? ^ijS5ffe-'8t^msr.frbirir:,the great expansion of
stimulating the kinds of 'economv LtTc^Th^ m™"/

f.

try, are our;
hietbads rfpit

trated

general

apy general or appreci-

burner

periple's say-/
irrgs in; indus¬

have

anv

Let

the

things the Federal Govern¬
ment might do to increase jobs,
threat ' of strike unions
extract hasten
resumption of economic
wage increases and other benefits expansion and improve the out¬
from the economy that are in ex¬ look for the future. None of these
cess of increases in
productivity. measures I shall mention require
These wage- increases
I
inevitably an outlay of public funds.
push up prices when, as is the case' should say also that they are
in this country, there is a flexible essentially meant to be illustra^

tional
debt
and
the
expanded,;
It ought to be... This last consideration
suggests credit base thereby provided have
the
occasion
lor
instituting re-;,vhaf
played their part. The rise in the
may be a third ailment of
onus
that deserve enactment on
^ ecdnomy-a growing inflexi- turnover of bank deposits since
own- which,
merit
and
if
bility in cost-price relationships 1945 has been a factor. So has the
enacted, , .will , not only provide a„,j'an
jncreasing inability to incredibly wasteful policy of the
lous but wilhalso strengthen the
bring costs, into line with chang¬ government in supporting agricul¬
es for increased production in lng
tural, prices and so has the in¬
demands and
national
n®Ss Conditions. This inflexibility creasing volume of services bought
by the average family—at a rising

//(I) I s o u r
banking sys¬
tem, are our
procedures for
irrVestingthe;

,

JJ°'tw:ijltondmg a little price
a
^le'
busi-

oppoitunny ror enacung reiorms apie fall m prices. My impression
that wrtl
malce^ economy ^lr,is tl,stvt;he consumer price index
!"*!. aavn„1°*":I1'15 just made a new all-time high.

self.

-

lie

as

■

.

spending

ri

con¬

reces-

measures

consumer

t iA/ n
/
<1 ne
two ,,
s:expansion -ought to be used as an
genera 1 q u,«oODortunitv for enacting reform*?

co

spending—

which has held up very well—nor

•

in

as

most

we are

as

My remarks deal broadly with the be disguised as a cure for declin/
17.questions included with Senator ing
business
activity,
since > it
Byrd's letter of Jast Feb. 17. These won't cure it.
:"V ■■
; ;
"
questions and the Senator's letter >■ The current check to
S

tions

the

began in the final quarter of last There is general agreement on the
year arid by a cut back in business process through which these diffi¬
Under
expenditures in this current year, culties'are generated.

-

raicp a
r qu s ea

of

our
universities.
Ten
of
these their production, however, stays
currently suffer¬ guest lecturers have thus far ap¬ at home and compete in the do¬
ing a modest decline in business peared: I have been, impressed by mestic market for the remaining
activity. A slackening of demqnd the extent to which they ascribe portion of production — and bids
began to show up during the many of our present economic dif¬ up prices.
ficulties to!.the exercise, of monop- ;
summer of 1957. This was followed
Federal Job Creating Measures
by a reduction in inventories that olistic powers by trade unions.

Second,

Dean, Graduate School of Business - Administration
University of Virginia

«

their

say, shot away or sent abroad.
speakers a They are not available for pur-,
distinguished chase or consumption here. The
economic analysts to be found in purchasing power
generated in

series

-.faults may be.

By CHARLES C. ABBOTT*

'

or

tration at Virginia, we have, this

past spring, invited

Merrill Lynch, Pierce, Fenner & Smith
Stone & Webster Securities Corporation

Equitable Securities Corporation Dean Witter & Co.

2&

12

The Commercial and Financial Chronicle

.(2616)

Administrative Prices in
Recession and Inflation
By GARDINER C.

f

-

of excessive

At this

poii^ulteni for

Committee for Economic Development

of 1956

,

ient

hold

to

full

at

employment.

modern
engineering lan¬
guage, we could say that accord¬
ing to the classical theory, flexible
prices and wage rates provided a
cybernetic mechanism tending to

point, that is in the Fall

or

relaxation
policy was

early 1957,

a

money

However, the great bulk of in¬
dustrial, prices
rates

and

administered

are

needed to reestablish the trend of

immediate,
the first
bracket personal income tax and, also, Federal deficit financing
I through the banking system, after pointing out administrative
prices"

urges

the

of administered

prices in recession and inflation. Ordinarily
we think of the two conditions of
recession and inflation as two difrole

Perhaps stimulated by

and much of 1957.

price indexes were rising steadily
though the prices of such
flexible priced industrial raw ma¬
terials as copper and rubber were
declining, and those of farm prod¬
even

stable.

a group, were relatively
(The rise of food prices in

recent

months

ucts,

as

and

later

came

mostly from reductions in supply.)

money

of labor, it looks as if business was

administrative

this

with

Faced

the

inflation,
I have been asked to discuss

has

increases developed in 1956
As a result, the

wage

'supply.

'

'

supportable

demand and

sizable increase in

mand. Once

continued

tight

the

there

and

were

•

Two Types of Inflation

Actually there are two types of
inflation
in which
administered

quite different roles.
First, there is the traditional type
arising from an excess of demand

prices play

from

inflation

—an

much

too

chasing too few goods. I
will call this a monetary inflation,
Second, there is what I have called
money

which
wage
excess

administered

prices and

rates are raised without an
of demand. The different

role of administered prices in
two

in

inflation

administrative

an

types

inflation

of

striking.

corrective.

this

done

was

in

though

real

stopped

by

expendi-

consumer

a

tight

policy
But for
an
ad-

money

both price and wage increases, are which shrinks demand.
adjustments to price or wage much the same reasons,
changes elsewhere in the economy, ministrative inflation in the abCertainly there is a lot of hen and sence of excess demand cannot be
egg in an administrative inflation,
stopped by a tight money policy
Fortunately we do not need to set- without creating unemployment.
tie the issue here. What is impor- in my opinion the use of a tight
tant is that we can have an infla- money policy to control an adminfrom

tion

a

in

rise

administered

prices without an excess of demand—without too much money
chasing too few goods. It is this
kind of inflation which

in

even

isn't

can

enough

full employment.

out

entirely in a fall in sales, em?
nloyment, and incomes and a fur¬
ther

fall

.

'

,

•

Prices

and

and

a

pent-up demand for goods
big increase in the money

supply. As a result, there was a
much larger stock of money than
the community would choose to
hold for long at full employment
and the existing level of prices.
The resulting excess in demand
shot

market

rapidly
prices and
wage rates slowly spiraled after.
In fact, when the average of prices
while

prices

into balance with the money

came

durable goods demand does not
appear to have been a product of
a

general excess of demand, but

rather of a special excess of deJ^1.
heavy goods industries. This special demand not only
put Pressure ori the productive
an

up

administered

order

In

trative

to

time

how
I

see

inflation
we

how

can

adminis-

in

occur

a

also have to under-

adm inistered

recession.

a

introduced

tered

the

mark

adminis-

and

and wage rates had
reached balance with the
money supply.
As a result there
was quite a period in which flexible prices were falling and adprices

not yet

ministered

Thus

prices

from

arises

were

rising.

monetary inflation which

a

is

demand

excess

dominated

by a rise of flexible
prices with administered prices
and wage rates acting as a brake.
In

contrast,

an

administrative

inflation is dominated by a rise of

administered
rates and

prices

does

not

PY(,P« nf apmanH
excess Of demand.

of view of

trative

being

come

forced

looks

by

nressure
p

From

•An address

York

the

as

labor
for
.

tional

from

Frnm th*
From the

■

creases.

wage
an

nmnt

point

business, and adminis-

inflation

excessive

and

if

it

is

through
in

wapp

™ f

.

point of view

by Mr. Means before Na-

Industrial

Conference

City.




Board,

New

'

recession.

Would

it

this

/

the

Here

In this situation, a tight money

^ ^

*° raise interest rates so as to

ivin?"

^

t

^apd:al fuiids aiid sitl^J^tetsa^g

role

of

spiral

outside
stop, 01* would
some

automatically?

is again

money

As sales, employment,

declined, the desire
balances would also

to hold money

decline.
in

If there

the

viduals

stock

and

money

hold

and

of

contrac¬

no

indi¬

money,

enterprises

later

or

much

were

would

find

they had
they wanted

as

as

to

stop

spending.
spiral to a
prices and

contracting their
This would bring the
halt. Thus, with fixed

rates, there is an
automatic mechanism which would

ultimately
ral.

wage

stop

spi¬

downward

a

But this would not automati¬

cally produce

since this

recovery^

sufficiency

of the money supply
itself depends on the reduced level

the

of

sales, employment, and demand.
no

outside influence

into

came

prices
the

At

"ad-

term

sion

would

at

stable

a

be

employment.
no

brought to

level

of

less

halt

a

full

than

But there would be

may

be suggested that, since
and intermediately

inflexible

flexible

prices

are

changed

from

time to time, the initial failure to
fall is just a matter of lag. This is,
of course, what the classical econ¬
omists

assumed.

But

careful

a

study of price behavior in
sions

shows

evidence

no

ill

s0

{bat

a

so ™at a

the

dence that, in time, the inflexible

employment.

prices would

forces which

would

The bagig of thig automatic

employment theory

was

full

quite sim-

tbe total demand f0r goods

fell below the amount

necessary

employment, prices

would drop more

less a11 alanS the line. This, in

itself,

wouldn't

be reduced

to

any¬

thing like the level of the flexible
I am reminded of a recent

prices.

executive

that

in

report

news

his

business

a

quoted

was

because

had

which

as

volume

saying
of

sales

fallen, he woultjj have to in¬
his prices so as to maintain

crease

because, to just the extent that

his profits. This is undoubtedly an
extreme case, but for such a price

prices and wage rateg Went down>

administrator

incomes would go down and

ment

create

recovery,

so

downward adjust¬

a

of

prices is obviously not a
matter of lag.
And the same ap¬

^°bteyo"PP y* •^ha^n^'rtnd
^hit moiley Policy in that period
was very effectively used.
by

late

there would be no direct increase
in demand But the effect on the
value of the money supply would

apply to the intermedi¬
ately flexible administered prices
which fall to

If the

actual

stock

t mnn^v of money remained constant,
Hmit wS Sed buying power would increase
^as needed the

°n the normdl growth in the

But

1956,

the

its
as

prke level dropped and this
would> in
the ciassicai phrase,

make money redundant, that is,
individuals apd enterprises would
their money holdings more
than they wished to hold at the

find

capital

boom had

sufficiently subsided so
was no longer serious
pressure on either the heavy in-

that there

reduced level of prices and would
start to speiid more. Under this

theory the price-wage level would

dustries or the capital markets, drop to whatever level was necUnder the impact of tight money, essary to make people just want
new

contracts for residential hous-

to hold the total money supply at

ing had declined substantially; full employment.
contracts for other

new

construe-

And, of course,

the classical inflation

was

the

re-

to

pears

an

intermediate de¬

gree in a recession. One must

con¬

clude that the classical cybernetic
mechanism does not work even
with

a
considerable lag.
Where
prices range from flexible to in¬

flexible, an initial drop in demand
would produce a downward spiral
of

recession

reflected

partly in
falling prices and partly in falling
employment.

the

price-wage

level

would rise to the extent necessary

tial!y; auto sales were much lower; to shrink the real value of the
business

Was

nance

much

a

in

a position to filarger part of its

Supply to just the amount
the community found it conven¬

money

will bring a reces¬
stop when employment

a

be

reached

when

the

hold money balances

duced

the point

to

satisfied
of

sufficiently

The stopping point will

reduced.

to

demand

has been

re¬

that it is just

by the outstanding stock

money.

(3)

When the stopping point is

reached

there

automatic

are - no

forces

necessary

making

for

re¬

covery.

These

conclusions

do

that every recession
on

factors

new

Some
seeds

not

mean

must depend

to bring

recessions

can

recovery.

the

carry

of

recovery because of
character of the initial drop

the
in

dgmand. .Consider, for example,

inventory,, recession.

pure

conditions,

average

business

is

adding

a

Under

of

growth,

each

to

year

its inventories and this constitutes

part

of

the

goods.
to

But

rapid

total

demand

business
rate

a

overstocked.

and

reduction

Then

though

find

the

total

demand

normal

duced

at

itself

of

process
means

demand

from

a

even

all

other

continues to expand at the
trend of growth. The re¬

sources

the

in

for

add

may

working off inventories

total

usual

demand

recession

will

create

spiral of

re¬

duced

production,
employment,
incomes; a spiral which will

and

be

halted

either

by the resulting

reduced demand for cash balances
or
the
completion of

liquidation.

When

liquidation
recession

inventory
completed, if the

is

has

business

not

would

been

serious,

presumably

re¬

its trend of

sume

inventory build¬
ing thus again adding to 1 total
demand, and the spiral of recovery
be expected to re-establish
something like full employment.
Here

it

nism,

is

not

such

which

cybernetic mecha¬
price

as

reestablishes

adjustment

full

employ¬

ment, but the fact that the initial
of

source

is

decline

in

demand

self-reversing.

deal

good

a

the

the

in time

was

of

recession of

There

evidence

1949

was

that

largely

of this sort.

There is another type of reces¬
which may bear the seeds

sion

of its

own

create
is

not

recovery, but may also

downward

a

spiral which

self-correcting.

recession

due

to

a

This
of

wave

is

a

gen¬

eral

uncertainty such as can be
generated by an outstanding busi¬
ness

failure,

collapse,
abroad.
can

or

lead

or

stock

a

market

by the start of

Here
to

a
a

a

war

lack of confidence

postponement

of

investment and to inventory con¬
tractions on the part of business
and
postponement of purchases,

particularly of durable goods by
consumers.

If

no further
alarming
developments occur, and the re¬
cession is
mild, confidence may

return
sary

and

level

reestablish the
of

even

greater

stock of money remained constant.

total

neces¬

and

The reduction in the

prices

would

more

increase

flexible

the

real

and

down: substan-

which

to

a

ble; new orders for equipment in ployment,
were

sion

such

buying power of the money sup¬
ply. The reduction in employment

terms

anism

and incomes have been

However, the automatic mech¬
anism would still bring a reces¬
sion spiral to a halt, provided the

tion were down in real terms verse. If total demand exceeded
fhough tha dollar value was sta- that necessary to support full emreal

in

could
reces¬

that

be corrective.

£JS0' tne use m^ 1 merest 1 ates

^ark^t

Conclusions

analysis I draw three

inventory

automatic recovery.

It

the

maticany tend to reestablish full

*iJmm!iv,or

®

halt

a

incomes

and

a

of
/;

difference in behavior is primarily
a matter of lag.
There is no evi¬

Up

exLsTdemand foJ to sustain full
and

?avl"ff

to

r

downward

going until

come

spiral

auto-

ge^

wage rates

supply, market prices had greatly
overshot

demand—a

play, and there were no change in
prices and wage rates, the reces¬

Recession

contribute to

Recession

ex-

recession,

our present

Administered

stand
Current
.

.

is the chief

b001J. of

a

in

If

planation of

recession,

•

The

•

inflation

go on

recession when there
demand to support

a

istrative

in

demand would have to work itself

important.

And

wage

cybernetic mech¬

difficult, if not impossible, to say

In a monetary inflation, flex^his brings me to the current minjstered prices" back in the
ible-priced commodities respond recession. To discuss it, we need 1930^ the traditional economic
quickly to the excess demand,
g0 backthe caPh-al
theory of that era held that the
while administered prices operate
lyoo.yln tnat year, and extending ec0n0my was self-adjusting so that
to slow up the general price rise. int0 190b, there was a great ex- it
W0Ldd
automatically tend to
This was true, for example, in the Pa"sian. ln the demand lor new maintain full employment.
Acinflation which occurred just after industrial
plants, lor residential COrding to this theory any deparWorld War II. The war generated 5ouslu"g' and for automobiles. This ture from fup
employment would

both

The

brought it to

summer.

and

couldn't work/ The fall

anism

force

these
most

is

prices

prices by seeking too policy with the announced intenlarge profit margins. But in any tion of curbing the inflation, twistconcrete situation, it is extremely ing the screws another notch last

ties

up

today

recession.

in

v

rates, there would be no automatic

sooner

a

fall in total demand

a

fall

no

on

may

presence.of

Draws Three

conclusions:

growth. Now a classical monetary
inflation which comes from a general excess of demand can be

we

supply was
depended in
part on the reduction in sales, em¬
ployment and incomes.'
about .and

20%

tion

think

the

and

brought

without producing a
(1) Because of the inflexibility
price or wage reduction. We can of administered prices in ouf-'modagree that this is inherent in mod¬ ern economy, there is no automatic
ern
mass
production.
But look mechanism tending to maintain
what this inflexibility does to the full
employment,
y
/
classical cybernetic mechanism. If
(2) There is an automatic mech¬

authori-

monetary

ad¬
full

restore

occur

tures were lagging behind normal

I

balances

mand of five, or ten, or even
may

find that admin- rowed by previous wage increases
istered prices'are an' important or wage increases are needed to
key to - understanding not only narrow profit margins that have
recession, but also the kind of in- been too much widened by previflation- that
can
occur
in
the ous' price increases.
Or perhaps

to

seem

compound

not

since, in fact, the
equating of the demand for cash

From this

spite of the absence of any general excess in demand and even

But

this

would

employment

wage rate

or

decline

a

keep

can

you

—

other.

the

or

But

justment

de¬

set,

money

pushing

rela¬

changes

decline in de-"

a

price

a

and

particularly

supply.
•

in

been

have whether particular price increases
we are necessary to widen profit marhave both simultaneously, gins that have been too much nar-

situation

ferent
one

to

wage

1958

had reduced the demand for
money
balances to the level of the actual

•

excess

achieve

But
was

price and wage increases in
the heavy industries growing out
of the capital boom, a broad pat¬
tern
of administered
price and

Mr. Means claims administered inflation in the absence
demand cannot be stopped by tight money policies
without creating unemployment, and that the absence of down¬
ward revision of prices and wages during a recession prevents
monetary policy and public works from succeeding except
after considerable delay. Hence, the economist recommends a
"buying power expansion program" consisting of personal tax
cut?, and Federal debt-monetization via commercial banks to

f

re¬

the

power.

of

comes

underway.

price-wage characteristic of our economy prevents automatic,
'self-correcting recovery in the absence of expanded buying

*

-

inflexible,

when it

supply

quired for economic growth.
an
administrative inflation

suspension of the 20% withholding tax on

temporary

tively

increase in the money

Originator of the term "administrative

most

Thursdav, June 12

.

combination of these two

Using

keep employment full.

the tight

of

Fund for the Republic

Currently Consultant to the

demand or over-em¬

ployment.

MEANS*1'' !

of Research flnd

Formerly Associate Director

retained

of

out

investment

new

earnings; and the banking system
was no longer having to sell gov¬
ernments in order to make busi¬
ness loans. There was no evidence

.

.

incomes

would

contract

the

recession

demand.
may

lack

of* confidence

produce other demand-reduc¬
ing effects such as a contraction
the money
supply and so the
recession feeds on itself.
This is
1
think haPPened in
the
1929 to 1932 depression.

in

On

the other

real buying power the community
would choose to hold in the form

may

of

carry no element of

money.

would

The downward spiral

come

to

a

halt

when

the

But

engender

be

caused

hand, a recession
by actions which

Continued

self-recovery.
on

page 23

Volume

Number

187

5750

.

.

.

The Commercial and Financial Chronicle

(2617)

prices

sell

their own
finished
administered prices.

products
All retail

Behavior, Administered Pricing
By JULES BACKMAN *
•

i

"i;;

of Commerce, Accounts

School
'of

t

and Finance

study of overall prices and administered pric-

and of

characterized by unchanged

were

and

Professor

defines

Backman

offers to meet all demands at that

price, does not have

unique in

un¬

the

■>. '

<

,

consider

host

a

of

investment

of

exit.

quires such

capital

in

there

an

is

restricts

Modern

industries

many

brief duration.

ease

that

sult

effective barrier to the.
firms to enter

new

-

an

,

administered

be

•,

.

focused

mer

the

Kefauver
his

public

of

nature

steel

surprise

that

attention on
pricing. Mr.

"discovered"
,

■

.

much

to

.

stee 1:

prices

were

administered.
In

terms

of

novelty, th i

s •

ices

with

not

covered he

method by

mined.
ers

ministered prices are not.

price administration for steel
and other industrial products was
major cause of the price infla¬

tion

Which

sons

at about that time.

concerned

Kefauver

the

before

many

per¬

However,

Committee

report, the economic
changed markedly. Re¬
cession, rather than inflation, be¬
came
Public Problem No. One.
Mr. Kefauver then became con¬
cerned with how it was possible
its

wrote

climate

prices to remain un¬
in the face of falling
output and demand. In light of
this background, it is useful to
review the nature
of price ad¬
ministration and steel price be¬
steel

changed

havior irr periods

of recession.

Defines Administered

Pricing

price is established by
executive action and the company
When

♦

a

address

An

important,

is

It

pricing.

therefore, to understand what ad¬

that

National

Agents,

a

found

fauver

for

as

trial

ob¬

politicians have used the
condemnation of indus¬

and

term

uncov¬

vious, Mr. Ke¬

a

primarily to describe the
which a price is deter¬
Unfortunately, some writ¬

is useful

was

the

ering

"administered price"

term

dis- z

talking prose
all
his life.
After

by

Dr.

Association
Chicago, 111.

Backman before
of
Purchasing

tions

The most recent illustra¬
found in the modest

are

cessions

of ,1948-49

and

re¬

49.53-54.

(5) Students
of the:, business
for which production is-highly concentrated often fluctu¬ cycle usually attribute oui4 period¬
ic recessions to a wide variety of
ate a great deal in price, while
causles including excessive expan¬
other products with many
products

,

pro¬

ducers'

often

sion of credit, excessive inventory

record

only small
price changes.
In fact, there is
little relationship between the be¬

government

controls,
and
po¬
The local grocer

reactions,

These would be arid

industry finds
mean

may

a

and

sometimes for
are

years.

this

With

the most

nature

and

background
role

of

the

administered

of

rigid and inflexible administered ;

prices.

rials

mined by small retailers and often

if

The

does

term

not

involve

a

their

prices

not

are

also

performed by the market

process

there is

between ad¬

as

ministered

prices
and
market
prices for the overwhelming ma¬

jority of products.
sites

The prerequi¬

for

perfect competition and
market price determination just
are
not present in our economy.
The
term
does
not
indicate These prerequisites include large
whether prices are fair or unfair, numbers
of
buyers and sellers,
whether price behavior is good or sale of identical goods by different
bad, or whether prices are too producers, ease of entry into and
exit from
the
high or too low.
industry, perfect
Administered
prices
are
not knowledge by buyers, and that
standby of economists, "all other
monopoly prices.
things being equal."
They are not prices set only by
industries

Most

They are not identical

with in¬

such

and

flexible prices.

large

a

that

sellers

do

number

throughout

economy.

our

typical
Com¬

petitive market pricing as postu¬
lated in economic theory is ap¬

omist
means

that

term

the
so

no

many
one

have

not

of

buyers

market

a

could be determined.

Administered prices are

To

"large

an

price
econ¬

in which large numbers of sellers

are

competing in an idealized
market, .would destroy

In

connection

criticisms

with

made

both

could

of

the

ized

the

various

During the 1923-24 recession, steel
output fell by 55.4% while the
maximum drop for finished steel

administered

prices
In the

pricing in

was

steel

'

11.6%.

1926-27

tion fell by

(1) Administered
prices have
always been the major type of

'

:

recession, produc¬

31% while .finished

prices declined 7.2%.

the post-1929 depression, steel
production
fell
84.7 % , while
steel prices fell 18.8%.

In

our economy.

(2)

Nevertheless,
despite
pe¬
interruptions to the longterm trend, our economy has ex-,

.

riodic

In the

1937-38

decline, production
fell 68.3% while prices fell 7.6%.

perience'd

a rate of growth and a
In the 1948-49 recession, steel pro¬
rising standard of living which is
duction
declined - 27 .7 % ' while
the envy of the world.
prices rose 2.9%.
T
\
(3) The interruptions to this
In the 1953-1954 recession, progrowth, namely, recessions and
Continued on page 22
depressions, have usually been of

the

influence

Mow

for

buyers
approximate

toady ...

The Insurance Stock Survey

and
the

'

■

'v

'

*
{

i

:

■

'•

.

j

-J

I

..

theoretical requirements of a mar¬
ket

price economy? Or could the
industry be so splin¬
as to meet the requirement
large numbers of buyers of

automobile

Our annual

tered

of

o'clock Noon

past experience

auc¬

pricing, several points must be
kept in mind in order to maintain
some
perspective concerning the
significance of such pricing:

'

rails

sellers

June 17, 1958, at 12

~

buyers and sellers

can

.

will sell at his office at Albany, New York

deter-

number"

price. Suppose, for example, that
plicable in an extremely small it were possible to "pulverize" the
proportion of the economy. Ap¬ steel
industry into the required
proximately nine-tenths of the large number of sellers (of course,
wholesale price index is in the
technological requirements make
administered price category. This
this impossible), would or could
means that with minor exceptions
the railroads similarly be reduced
all buyers of administered steel
in size so that the market for

Comptroller of the State of New York

are

tion

his

in

choice

no

un¬

judgment that either ihe process
or the price charged is wrong.

big business.

Yet the prices

may be summar¬
briefly as follows: t In each
pricing as
instance, the maximum swing in
some persons have insisted.
machine
which
has output is compared with the maxi¬
He is industrial
narrowly
circumscribed
in
his made America great, Such motion mum change in price,' although
freedom of action by the broad would lead to a significant decline the two series
may have
made
forces of supply and demand af¬ in our standard of living. Clearly, their peaks or lows in different
it is an impossible alternative.
fecting his products.
months.
Moreover,

But he does not have

limited freedom

steel

The

been

inflexibility of administered

price will change significantly
over
the
business
cycle.
Many

months

place.

The

gentle¬

who

man

and

administered

wages.

liere's

have

prices, it is instructive to review
the past behavior of steel prices
and the accompanying changes in
its capacity to do so) at that price, raised. The railroad must be con¬ for products which are produced
output during periods of recession
in
the price is administered. This is cerned about the trucker and the by small firms in industries
or depression.
For this purpose, I
which there is little concentration
so whether the
company sets the airplane.
Natural
rubber
loses
have analyzed the changes which
price for one week or for one markets to synthetic rubber when of output.
occurred in the several recessions
year.
In the broadest sense, prices prices are set too high. ;
V! - ; - It is clear that administered in the past 35 years. This study
include wages which also are ad¬
prices cannot be eliminated from - reveals little relationship between
No Unlimited Freedom
ministered. However, today I will
the economy. Any attempt to cre¬ the magnitude of changes in the
be concerned only with adminis¬
The price administrator cannot ate in
real
life
the
theoretical indexes of composite steel prices
tered prices of products and serv¬ and need not duplicate exactly the world of economists, namely, one and in total steel
production. This

discovery
of Mo-

recessions

been converted
into deep
depressions because of the alleged

its

ural gas. The steel
that higher prices

offers to meet all demands (within

ranks with
that

Most

prices.

loss of volume to substitute mate¬

The Kefauver hearings last sum¬

accom¬

have

whether

or

dislocations

depth and in duration. It
not. true that small declines

is

few.

a

the

small in

r

companies is not, the primary fac¬
tor determining whether a price
will

of

(4)

Concentration of output in

major depres¬

panying those Wars (for example,
the 1870's and 1930's).

industry—or to leave it.
Concentration Not Significant
Requisite
- i
:
>

The

sions have usually followedinajor
wars and have been the direct re¬

re¬

amounts of

enormous

of

freedom

the

technology

to lose volume to fuel oil and nat¬

'

our economy.

On

tal

accumulation, the relationship be¬
tween
savings
and
investment,
havior of administered prices and underconsumption, Wars, and other
litical pressures.
factors. 'Administered pricing is
concentration.
"
*
soon finds out that when he sets
not given
much significance in
We find many small items in a
prices too high he loses business
lists of casual forces of the busi¬
drug store, hardware store or sta- ?
to the chain store and the
super¬
ness cycle.
'< "
'*/*'•
market. £ The
coal
industry has tionery store for which prices may
change
over
a
found that higher prices cause it not
period
of
Steel Prices and Production

freedom nor occur primarily in concen¬
trated industries. Concludes: price cuts do not always stimulate
demand; there is a lack of relationship between price and pro¬
duction during recessions; and administered prices are neither
new nor

profits. •;

competitors'

limited price setting

;

determine

not

determine.

product,

administered

an

an

including demand, costs,
capital investment, prices of sub¬
stitute
products, nature of the

established by executive action in which the firm

as one

in

as

factors

1953-54, and notes upward rise predominates food

services.;

price

price

In setting the price, the admin¬

Turning to present price pattern, he finds it has been similar
that of

sellers

and

an

does

istrator must

rising prices and two with moderate price declines—in one
of which die index rose the first seven months before declining.
or

to

determining the
market,

capriciously

popular belief regarding their respective behavior.
moderate recessions in past 35 years, the economist

explains, contained four that

buyers

contrary, the penalty for errors in
judgment will be a loss of sales

with

The six

of

this price in a vacuum. He cannot
set the price at-any level he may

ing, and emphasis paid to steel, reveals conclusions at vari¬
ance

Instead of the interplay of large
numbers

ministrator

University, New York City

;

Dr. Backman's

administered.

are

administrator
or executive or a
group of officials
determine the price. But tne ad¬

'

New York

prices

auction

Professor of Economics

•

■

at

13

steel sheets?

comparative analysis of 109 of the country's

leading insurance companies is
A copy

To state these sup¬

will be sent to

now

available.

you upon request.

-

'

positions is to show how unreal¬

(Eastern Daylight Saving Time)

istic they are.

and maturing

the

additional

re¬

quirement of homogeneous prod¬
ucts (which is met in the steel

STATE OF NEW YORK HOUSING (SERIAL) BONDS
Dated July 1, 1958,

will

How

$49,000,000
as

follows:

We

satisfied for furni¬
ture, automobiles, women's clothes,

purchase and sale of insurance company stocks.

industry)

be

specialize in and offer

our facilities for

the

canned

peaches, toothpaste and
of other products which
predominant in the American
way of life?
And the problem is
further complicated when the vari¬
ous services in the form of credit,
the host

$1,000,000 annually July 1, 1960 to 2008, inclusive.
Redeemable by State on
any

Notice,

on

July 1, 1998,

or on

interest-payment date thereafter.

Principal and semi-annual interest January 1 and July 1

payable at the Chase Manhattan Bank, New York City,

are

research, and other forms of nonprice competition are considered.
The apparel industry can qualify
for another

prerequisite of perfect
competition, namely, ease of entry

upon

ARTHUR LEVITT, State Comptroller,
Dated: June 10,1958




<

v

application to

Albany 1, N. Y.
,

■

into

and

But

Descriptive circular will be mailed

how

met in

exit
could

from

this

an

industry.

condition

be

steel, aluminum, and auto¬

mobiles, where a huge capital in¬
vestment is required to enter the
business and large past sunk capi¬

Blyth & Co., Inc.
New York 5, N.

14 Wall Street

San Francisco
Boston

•

•

Chicago

•

Los Angei.es

Philadelphia' Pittsburgh

Detroit

Pasadena

•

Minneapolis

•

San Diego

•

•

•

Cleveland

Spokane
San Jose

Seattle

•
•

Louisville

Oakland

•

•

•

Fresno

•

Eureka

Y.

Portland

•
•

Indianapolis

•

Sacramento

Palo Alto

•

Oxnard

,

12

The Commercial and Financial Chronicle

.(2616)

Administrative Prices in

in

ernments

Recession and Inflation
By GARDINER C.

Committee for Economic Development

prices"

immediate,

or

the money supply re¬

by tight

'

;/

a group, were relatively
(The rise of food prices in

recent

months

of labor, it looks as if business was

pushing up prices by seeking too
large profit margins. But in any
concrete situation, it is extremely
recession and inflation as two dif- difficult, if not impossible, to say
ferent situation — you
can
have whether particular price increases
one
or
the other.
But today we are necessary to widen profit marseem to have both simultaneously,
gins that have been too much nar-

prices in recession and inflation. Ordinarily
we think of the two conditions of
of administered

role

I think

may find that adminprices'are an important

we

istered

to understanding not only
recession, but also the kind of in-

key

flation-'that

of

presence

in

occur

can

recession.

a

the

'

.

•

Two Types ol

Inflation

Actually there are two types of
inflation in which administered

prices play quite different roles.
First, there is the traditional type
arising from an excess of demand
from

inflation

—an

an

inflation

administrative
administered

which

in

prices and

rates are raised without an

wage

The

of demand.

excess

increases are needed to
narrow profit margins that have
been too much widened by previous' price increases.
Or perhaps
both price and wage increases are
adjustments to price or wage
changes elsewhere in the economy,
Certainly there is a lot of hen and
egg in an administrative inflation,
Fortunately we do not need to setor

different

wage

What is impor¬

tie the issue here.
tant is that

much

too

chasing too few goods. I
will call this a monetary inflation.
Second, there is what I have called
money

increases

rowed by previous wage

tion

from

we

rise

a

without

prices

have

can

administered

in

of

excess
too much

an

mand—without

infla¬

an

de¬

In

inflation

of

is

even

in

there
support

when

recession

a

demand

enough

to

full employment,

eral

This

brings

recession.

To

current

the

to

discuss

it,

in

ministrative

the

in

ah-

creating

unemployment.
opinion the use of a tight
policy to control an admin¬

money

need

we

istrative inflation is

the chief

ex¬

recession.

our present

Administered

Prices

and

In

order

trative

to

see

inflation

how

1930's,

recession.

a

the

prices"

the

in

occur

administered
to

introduced

I

adminis¬

how

can

a

also have to under¬

we

ministered

The

resulting

shot

market

excess

prices

in

demand

rapidly
while administered prices and
wage rates slowly spiraled after.
In fact, when the averageiof prices
up

into balance with the money

came

Ple-

iTi? fel1

^nctrv

prices

j?°licy; ™interest1so
to raise interest rates so

to

as

to

as

for

supply, market prices had greatly

dan?P, ,<l0™

overshot

capital funds and stimulate saving.
Also, the rise in interest rates

tered

the

prices

mark

adminis-

and

and wage rates had

not yet reached

balance with the

supply. As a result there
quite a period in which flex-

back

traditional

"ad¬

in

the

economic

was

ible.prices
Thus

prices

from

dominated
prices

rising.

were

excess

by

with

rise

a

demand

of

is

administered

prices

inflation is dominated by
administered
rates and

prices

does

not

rise of

a

and

come

wage

from

an

ba}ain£es, at lea:st for those m con£ct with, the shmoney
™r.K", so tnat a limit was needed

de

view

of

.

—

being

forced

excessive
creases.

York

i—«

looks

by

pressure

From

♦An address
tional

From the point

^business, and adminis-

trative inflation

the

as

labor
for

if

_.A

it

is

through
wage

in¬

point of view

by Mr. Means before Na¬

Industrial

Conference

City,




In

m0nev smmlv

mv

Board.

New

oohiion

the

suPPAy» An m.y opinion, xne

"Lid

was very effectively used.
But

by

late

^

capital
boom had sufficiently subsided so
that there

was

1956,

no

the

longer serious

pressure on either the

employment, prices
drop more
along the
in

|n

heavy in-

£ne<°£his

legg
itself, wouldn't

create

recovery,

because. to iust the extent that
prices and

incomes

t

wag

would

in demand.

no

t down
down

go

there would be

of the

new

impact of tight

money,

contracts for residential hous-

and

so

direct increase

But the

effect

the

on

money supply would
If the

actual

stock

of mone
Remained constant, its
buying power would increase as
the prlce

would'
make

in

level dropped and

the

monev

this

tlassical Phrase-

redundant

that

is

individuals and enterprises would
find

their money holdings more
than they wished to hold at the
reduced level of prices and would
start to spend more. Under this
theory the price-wage level would

dustries or the capital markets, drop to whatever level
Under the

exce

necessary

d wage rates would

be corrective.

flexible

and wage rates acting as a brake.
In
contrast, an administrative

of

demand

monetary inflation which

a

arises

falling and ad-

were

If the total demand for goods

below the amount

Ahf^value

money

ministered

the

was

nec-

to make people just want
to hold the total money supply at
essary

ing had declined substantially;

full employment.

contracts for other new construetion were down in real terms

the classical inflation

though the dollar value was stable; new orders for equipment in

that necessary to support full

real

substan-

would rise to the extent
necessary

much lower;

to shrink the real value of the
money supply to just the amount

terms

were

tially; auto sales
business

was

nance

much

a

down

were

in

position to filarger part of its
a

and

wage

rates, there would be no automatic
The

corrective.

cybernetic mech¬

couldn't work. "The fall

anism

in

demand would have to work itself
out

entirely in

fall in sales,

a

em¬

ployment, and incomes and
in

fall

ther

a fur¬
spiral of

demand—a

recession,

verse.

If

ployment,

total

the

And, of course,
was

demand

the

price-wage

the community found

it

re-

exceeded
ena¬

level

conven¬

.

Conclusions

it

to

come

downward

halt

a

role

the

Here

spiral

of

incomes

the

sooner

much
hold

were

money

and

desire

of

contrac¬

no

indi¬

money,

enterprises

would

find

later

or

the

balances would also

stock

and

viduals

is again

money

declined,

If there

in

tion

automatically?

As sales, employment,

important.

decline.

they had
they wanted

as

stop

contracting

as

to

their

spending.
This would bring the
spiral to a halt. Thus, with fixed
prices and wage rates, there is an

ral.

stop

spi¬

downward

a

this would not automati¬

But

cally produce

since this

recovery,

sufficiency of the money supply
itself depends on the reduced level
of

sales, employment, and demand.
no

outside influence

sion

would

at

stable level

a

be

into

came

to

brought
of less

halt

a

full

than

But there would be

employment.
It

be suggested that, since
and intermediately

may

•' •

'

v

-

(1) Because of the inflexibility
of administered
ern

prices in ouf'mod-

there is

economy,

mechanism
full

no

automatic

to

maintain

tending

employment.

(2) There is
anism
sion

automatic mech¬

an

which

to

will

bring a reces¬
employment
sufficiently
The stopping point will
stop when

a

and incomes have been

reduced.
be

reached

when

the

demand

to

hold money balances has been re¬

duced

the

to

satisfied
of

point that it is just

by the outstanding stock

money.

(3)

inflexible

When the stopping point is

reached

there

automatic

are

forces

no

necessary

making for

re¬

covery.

These

conclusions

do

not

mean

that every recession must depend
on
new factors to bring
recovery.
Some

recessions

seeds

of

can

the

carry

recovery because of the
of the initial drop
in

character

demand. £ojisider, for example, a
pure inventory j:ecession.L Under
conditions

average

business

is

adding

of

growth,

each

to

year

Its inventories and this constitutes

of

part

the

goods.
to

total

But

rapid

demand

business
Then

the

though

total

demand

normal

from

trend of

duced

means

demand

a

even

all

other

continues to expand at the

sources

the

in

of

process

working off inventories
reduction

for

add at
find itself

may

and

rate

a

overstocked.

total

growth.

The

will

demand

re¬

create

usual

recession spiral of re¬
production,
employment,
incomes; a spiral which will

duced
and

be

halted

either

by the resulting

reduced demand for cash balances
the

or

automatic recovery.

no

the

analysis I dravy three

,

this

Would

keep on going until some outside
force brought it to a stop, or would

the

At

term

to sustain full

als° c'eated an excess demand for
favi"Ss to finance the expansion,
*n this situation, a tight m01}ey

prices

play, and there were no change in
prices and wage rates, the reces¬

Recession

.

SS5F'eh_J

fall in total demand

a

fall-in

If

planation of

Jo go back to the capital boom of theory of that era held that the
? -iJL 55 year' a
extepcung economy was self-adjusting so that
into 1956, there was a great exwouid
automatically tend to
pansion in the demand for new maintain full employment. Acindustrial plants, for residential corc[jng to t^is theory any deparWorld War II. The war generated bousing, and ioi automobiles. This ture from full
employment would
both a pent-up demand for goods durable goods demand does not get
up forces whjCh would autoand a big increase in the money appear to have been a product ot
matically tend to reestablish full
supply. As a result, there was a a general excess of demand, but employment.
much larger stock of money than
.°f ,a spvfocaial
The basis of this automatic full
the community would choose to mpd m the heavy goods indusemployment theory was quite simhold for long at full employment
and the existing level of prices.

were
no

ultimately

demand cannot be
tight money policy

a

I

.*•••

Draws Three

If

automatic mechanism which would

without
my

and

and

be

look

classical cybernetic mechanism.

to hold money

can

But

inflexibility does to the

excess

stopped
In

inflation

production.

mass

by

of

sence

ern

gen-

a

S;

.

without

occur

even

tight money policy
which shrinks demand.
But for
much the same reasons, an adby

contribute

Recession

me

demand

of

excess

stopped

time

a

done

was

though real consumer expenditures were lagging behind normal
growth. Now a classical monetary
inflation which comes from a gen-

recession,

Current

The

this

spite of the absence of any
eral excess in demand and

stand

most

monetary inflation, flex¬
ible-priced commodities respond
quickly to* the excess demand,
while administered prices operate
to slow up the general price rise,
This was true, lor example, in the
inflation which occurred just after

And

summer.

kind of inflation which can go on

isn't

the

money

role of administered prices in these
two
types
striking.

continued

em¬

'

conclusions:

authori-

monetary

the reduction in sales,

on

ployment ar»d incomes?"

20%

decline

a

producing a
price or wage reduction. We can
agree that this is inherent in mod¬

'

the

tight money
policy with the announced intention of curbing the inflation, twisting the screws another notch last
ties

It is this

chasing too few goods.

administrative

this

with

Faced

inflation,
I have been asked to discuss the

and

later

came

mostly from reductions in supply.)

'supply.

'

as

part

mand of five, or ten, or even

there

ucts,

power

since, in fact, the
equating of the demand for cash
balances
and
the
supply was
brought about and depended in

rate

wage

or

ad¬
full

employment

From this

set,

what this

stable.

expansion program" consisting of personal tax
cut* and Federal debt-monetization via commercial banks to
achieve sizable increase in demand and supportable money
"buying

price

a

supply.
But this compound
justment would not restore

decline in de¬

a

changes

balances to the level of the actual

de¬

price indexes were rising steadily
though the prices of such
flexible priced industrial raw ma¬
terials as copper and rubber were
declining, and those of farm prod¬

after considerable delay.

to

particularly

combination of these two

had reduced the demand for money

in

been

may

even

policy and public works from succeeding except
Hence, the economist recommends a

monetary

comes

developed in 1956
and much of 1957. As a result, the

unemployment, and that the absence of down¬
of prices and wages during a recession prevents

ward revision

when it

price and wage increases in
the heavy industries growing out
of the capital boom, a broad pat¬
tern
of
administered
price
and

without creating

most
wage
and rela¬

inflexible,

has

wage increases

and

tively

mand. Once

Perhaps stimulated by

employment.

administered

But

the

policies

money

prices

are

was

underway.

administrative
price-wage characteristic of our economy prevents automatic,
self-correcting recovery in the absence of expanded buying
power. Mr. Means claims administered inflation in the absence

full

However, the great bulk of in¬
dustrial

rates

inflation

administrative

an

through the banking system, after pointing out

demand cannot be stopped

over-em¬

or

at

modern engineering lan¬
guage, we could say that accord¬
ing to the classical theory, flexible
prices and wage rates provided a
cybernetic mechanism tending to.
keep employment full.
Using

quired for economic growth.

suspension of the 20% withholding tax on the first
bracket personal income tax and, also, Federal deficit financing

excess

demand

needed to reestablish the trend of

temporary

of

evidence

no

is in the Fall
early 1957, a relaxation
the tight money policy was

of

urges

busi¬

make

to

was

hold

to

ient

At this point, that

of 1956

,

increase in

Originator of the term "administrative

retained

of

ployment.

Republic

to the Fund for the

Currently Consultant

excessive

of

id

MEANS*-''

order

There

loans.

ness

Research and Consultant for

Formerly Associate Director of

out

investment

new

earnings; and the banking system
was no longer having to sell gov¬

Thursday, June 12, 1958

.

.

completion of inventory
liquidation.
When inventory
liquidation is completed, if the
recession

has

not

been
serious,
presumably re¬
inventory build¬
fall is just a matter of lag. This is,
thus again adding to total
of course, what the classical econ¬ ing
demand, and the spiral of recovery
omists
assumed.
But
a
careful
flexible

prices

are

changed

from

time to time, the initial failure to

business

study of
sions

price behavior in

shows

evidence

no

difference in behavior is
a

matter

of lag.

dence that, in

could

the

primarily
evi¬

no

time, the inflexible

be reduced to any¬
thing like the level of the flexible
prices. I am reminded of a recent
prices would

report

news

executive
that

in

which

quoted

was

because

his

business

a

saying

as

volume

be

expected to re-establish

reces¬

that

There is

would

its trend of

sume

of

sales

something

like

Here

not

it

nism,

is

such

full employment.
cybernetic mecha¬

price

as

which

reestablishes

source

of

adjustment

full

employ¬
ment, but the fact that the initial

is

decline

in

demand

self-reversing. There

deal

good

a

the

the

in time

was

recession

of

of

evidence

1949

was

that

largely

of this sort.

There is another type of reces¬
fallen, he would have to in¬
sion which may bear the seeds
crease his prices so as to maintain
his profits. This is undoubtedly an of its own recovery, but may also
extreme case, but for such a price create a downward spiral which
administrator a downward adjust¬ is not self-correcting.
This is a
ment of prices is obviously not a recession due to a wave of gen¬
eral uncertainty such as can be
matter of lag.
And the same ap¬
generated by an outstanding busi¬
pears to apply to the intermedi¬
ately flexible administered prices ness failure, or a stock market
which fall to an intermediate de¬ collapse, or by the start of a war
had

gree

in

a

recession. One must

con¬

clude that the classical cybernetic
mechanism does not work even

with

a
considerable lag.
Where
prices range from flexible to in¬
flexible, an initial drop in demand
would produce a downward spiral

of

recession

reflected

partly in
falling prices and partly in falling
employment.

However, the automatic mech¬
anism would still bring a reces¬
sion spiral to a halt, provided the
stock of money remained constant.
The reduction in the

prices

would

more

increase

flexible

the

real

buying power of the money sup¬
ply. The reduction in employment

abroad.
can

Here

lead

to

a
a

investment and

lack of confidence

postponement
to

inventory

of

con¬

tractions
and

on
the part of business
postponement of purchases,

particularly of durable
consumers.

goods

by

If

no further
alarming
developments occur, and the re¬
cession is mild, confidence
may

return
sary

such

and

level
a

reestablish
of

total

recession

the

neces¬

demand.
mav

But

engender

even

greater lack of .confidence
and produce other
demand-reduc¬
ing effects such as a contraction
in the
money supply and so the
recession feeds on itself.
This is
what

real buying power the community
would choose to hold in the form

I
think
happened in the
1929 to 1932 depression.
On the other
hand, a recession
may be caused by actions which

of

carry no element of

and

incomes

money.

would

would

contract

The downward

come

to

a

halt

the

spiral

when

the

Continued

self—recovery
on

page 23

Volume

187

5750

Number

-

.

.

The Commercial and Financial Chronicle

(2617)

prices

their

sell

products
All retail

Behavior/ Administered Pricing
By JULES BACKMAN*
*'

v

f

'!*

Professor of Economics

'

1School of Commerce, Accounts and, Finance
'

New York

Dr. Backman's

study of overall prices and administered pric¬

defines

offers to

Backman

soon

the

consider

including

a

host

demand,

of

grocer
finds out that when he sets

nature

his

of

steel

Mr.

pricing.
much

"'discovered"

to

found that

higher prices cause
to lose volume to fuel oil and nat¬
ural gas. The steel
that higher prices

steel

prices

rials

its

raised.

capacity to do so) at that price,
price is administered. This is
whether the company sets the

the

for one week or for one
in the broadest sense, prices

price

surprise

t hat

offers to meet all demands (within

so

vear.

industry finds
may

mean

a

be

However, today I will
adminis¬

ministered.

terms

of

discovery
anks with

man-who dis¬
covered he was

all

prose

life.

his

the

pricing.
It
is
important,
therefore, to understand what ad¬
ministered prices are not.

Jules Backman

found

fauver

that price administration for steel
and other industrial products was

major cause of the price infla¬
concerned

tion

which

sons

at about that time.

the

before

many

Kefauver

per¬

However,
Committee

does

term

The

not

involve

does

term

The

whether

prices

are

Problem No. One.
Kefauver then became con¬
Public

came

possible
for
steel
prices to remain un¬
changed in the face of falling
output and demand.
In light of
this background, it is useful to
review the nature of price ad¬
ministration and steel price be¬
havior in periods of recession.
cerned

with how

indicate

not

fair or unfair,

whether price behavior is good or
are

the

report,

it

was

a

judgment that either the process
or the price charged is wrong.

economic bad, or whether prices
climate
changed markedly. Re¬ high or too low.
cession, rather than inflation, be¬
Administered
prices
its

wrote

Mr.

indus¬

trial

ob¬

vious, Mr. Ke¬

a

.

"administered

term

term as a condemnation of

After uncov¬

ering

.■

■

,,,

price"
is useful primarily to describe the
method by which a price is deter¬
mined. Unfortunately, some writ¬
ers and politicians have used the
The

gentle¬

talking

•'

wages.

that of Moliere's

concerned only with

tered prices of products and serv¬
ices
and not with administered

novelty, this
r

if

their

prices

not

also

The railroad must be

con¬

are

cerned about the trucker and the

airplane.

Natural

rubber

are

too
not

monopoly prices.

They are not prices set only by
big business.
They are not identical with in¬
flexible prices.

typical

Administered prices are

Com¬
petitive market pricing as postu¬

throughout
in

lated

our

economy.

economic

is

theory

ap¬

plicable in an extremely small
Defines Administered Pricing
proportion of the economy. Ap¬
When a .price is established by proximately
nine-tenths of the
executive action and the company wholesale price index is in the
administered price category. This
♦An address
by Dr. Backman before
means that with minor exceptions
National
Association
of
Purchasing
all buyers of administered steel
Agents, Chicago, 111.
„

prices

high."

set too

are

-

of New York

will sell at his office at Albany, New York

June 17, 1958, at 12

o'clock Noon

The

price administrator cannot
and need not duplicate exactly the
process performed by the market
place. But he does not have un¬
limited freedom

and maturing

as

follows:

$1,000,000 annually July 1,1960 to 2008, inclusive.
Redeemable by State on
any

on

July 1, 1998,

or on

interest-payment date thereafter.
•

»

Notice,

his

pricing

as

persons

there is

no

choice

as

between ad¬

ministered

prices
and
market
prices for the overwhelming ma¬
jority of products. The prerequi¬
sites for perfect competition and
market price determination just
are not
present in our economy.
These prerequisites include large
numbers of
buyers and sellers,
sale of identical goods by different
producers, ease of entry into and
exit from the
industry, perfect
knowledge by buyers, and that
standby of economists, "all other
things being equal."

f

Principal and semi-annual interest January 1 and July 1

payable at the Chase Manhattan Bank, New York City.

omist

term

the

means so

many

that

one

no

upon

applicationTo

"large

Dated: June 10,1958




.

v

.

,

<

(4)

Requisite

i

r

>

\

Concentration ofi output in a lew
companies is not the primly factor

determining whether

will
its

be

administered

a

t

price will change significantly

I

over
the business
cycle. Many
products for which production is
highly concentrated often fluctu-

concentration
We find

small

'item*

in

factors;

»bd 4*>3-54.

„

Administered pricing is

£ot given much significance in

a

store,stat

U?1
,

\*

-

of
.

,

,

:

L

v

/

^

steel Prices and Production

SfSi>
*?d

•'

: (?) Students, of .the: business
cycle usually attribute out period1C recessions to a wide variety of
causes including excessive expansion of credit, excessive inventory
accumulation, the relationship be¬
tween savings ancf investment,
underconsumption* wars, and other

•

*

manv

bee„

rienresskSs becmSfwrf the aliened
inftexibHitv of ^
ni.irp! fh? mniSnL -H
?iolsirefoum?in'tiiom'riw 2"
cessions of 1948-^ Ld 1953 54~

price'

whether

or

Most recessions have

fmall in depth and in duration. It
1S n?* *rue that small declines

With, this background

.

lof

the

?a nature and role
administered
nrieesYet£JffwaSm?
prices. Yet the prices are deter— Prices, it is instructive to review
h

•

x

f

+iyQ

mined by small retailers and often
for mWhintc
for products which are produced

by

small

firms

in

industries

is

rvri^es

or

SS

output.
It

steel

of

output during periods of recession
depression. For this purpose, I

in

is little concentration
of

oast: bfihnviot*

nnd the accompanying changes in
mia wi«.^wmpanymg cnanges m

occurred in the

clear

that

several recessions
in the past 35 years. This study

administered

reveals little

the economy. Any attempt to ereate in real
life the theoretical

the magnitude of changes in the
indexes

relationship between

of

composite steel prices
world of economists, namely, one and in total steel
production. This
in which large numbers of sellers
past experience may be summarare competing in an idealized aucized briefly as 'follows: t In each
tion market, .would destroy the
instance, the maximum swing in
industrial
machine
which
has output is compared with the maxirnade America great. Such action mum
change in price, although
would lead to a significant decline the two series
may have made
in our standard of living. Clearly, their
peaks or lows in different
it is an impossible alternative.
months.
In

connection

criticisms

with the

made

of

various

During the 1923-24 recession, steel
output fell by 55.4% while the
maximum drop for finished steel
prices was 11.6%.

administered

pricing, several points must be
kept in mind in order to maintain
some
perspective concerning the
significance of such pricing:

In the

1926-27

recession, produc¬

tion fell by 31% while finished
steel prices declined 7.2%.

(1) Administered prices have
always been the major type o£
pricing in our economy.
.

In

the post.1929

depression/steel
while

production
fell
84.7%
steel prices fell 18.8%.

(2)

,n

r

^.

number"

influence

the

Suppose, for example, that
it were possible to "pulverize" the
steel industry into the required

large number of sellers (of course,
technological requirements make
this impossible), would or could
the railroads similarly be reduced
size

in

that

the

both

market

for

Aaia

neadtf....

The Insurance Stock Survey

for

so

rails

buyers and
sellers
could
approximate
the
theoretical requirements of a mar¬
ket price economy? Or could the
automobile industry be so splin¬
tered as to meet the requirement
of large numbers of buyers of
To state

Our annual

comparative analysis of 109 of the country's

leading insurance companies is how available.
A copy

these sup¬

wilt

the

additional

research, and other forms of nonprice competition are considered.
The apparel industry can qualify
for another prerequisite of perfect
into

and

exit

how could

from

this

an

will be sent to

you upon request.

;

-

'

*

re¬

quirement of homogeneous prod¬
ucts (which is* met in the steel
industry) be satisfied for furni¬
ture, automobiles, women's clothes,
canned peaches,
toothpaste and
the host of other products which
are predominant in the American
way of life?
And the problem is
further complicated when the vari¬
ous services in the form of credit,

met in

Comptroller, Albany 1, N. Y.

It.,

Concentration Not Sighificant'

price.

But

ARTHUR LEVITT, State

industry—or to leave

buyers and sellers

can

competition, namely, ease of entry

Descriptive circular will be mailed

sions have usually foIiowedTna jor
wars and have been the direct resuit, of the dislocations accom-

Nevertheless, despite periodic Interruptions to the longIn the 1937-38 decline, production
term trend, our economy has exfell 88.3% whiie prices tell 7.6%.
penenced a rate ot growth and a T«
,nAO
risiru? standard nf lfvincr whieh is Dl the 1948-49 recession, steel prorising standard of living which is
duction declined * 27 .7 %*' while
the envy of the world.
Most
industries
do
not
have
prices rose -2.9%.
such a large number of buyers
(3) The interruptions to this
In the 1953-1954 recession, proand sellers that a market price growth,
namely, recessions and
Continued on page 22
could be determined. To an econ¬ depressions, have usually been of

How

STATE OF NEW YORK HOUSING (SERIAL) BONDS

brief duration. The major
depres-

re-

effective barrier tof
thewpanyingthbse Wars (for example,
new firms to enter an
the 1870's and 1930's)
-

positions is to show how unreal¬
istic they are.

$49,000,000
Dated July 1, 1958,

in

have insisted. He is
narrowly circumscribed
in
his
freedom of action by the broad
forces of supply and demand af¬
fecting his products. Moreover,
some

steel sheets?

(Eastern Daylight Saving Time)

ease

prices cannot be eliminated from
No Unlimited Freedom

steel

Th® Comptroller of the State

is an

loses

markets to synthetic rubber when

include wages which also are ad¬

were

administered.
In

the

technology

drug
tionery store for which prices may
not
change pver a > period, of
it

loss of volume to substitute mate¬

the

there

freedom of

to the chain store and the
super¬
The
coal
industry has

lack of relationship between price and pro¬
duction during recessions; and administered prices are neither
new nor unique in our economy.

Kefauver

restricts

Modern

such enormous amounts of
capital in many industries that

costs,

market.

a

The Kefauver hearings last sum¬
focused public attention on

investment
exit.

quires

prices too high he loses business

limited price setting freedom nor occur primarily in concen¬
trated industries. Concludes: price cuts do not always stimulate

mer

tal
of

ate a great deal in price, while.
other products with
many procapital investment, prices of sub¬
ducers often record only small
stitute
products, nature of the
price changes. In fact, there is
pro d u c t, government controls,
little relationship between the becompetitors' reactions,
and
po¬
havior of administered prices and
litical pressures. The local

established by executive action in which the firm
meet all demands at that price, does not have un¬

demand; there is

determine.'■-.-On

istrator 1 must
factors

administered

an

buyers and sellers
price as. in an
auction market, an administrator
or executive or a
group of officials
determine the price. But the ad¬

In setting the price, the admin¬

as one

Professor

of

determining the

contrary, the penalty for errors in
judgment will be a loss of sales
and of profits.

Turning to present price pattern, he finds it has been similar
to that of 1953-54, and notes upward rise predominates food
services/

are

Instead of the interplay of large
numbers

capriciously

popular belief regarding their respective behavior.
The six moderate recessions in past 35 years, the economist
explains, contained four that were characterized by unchanged
or rising
prices and two with moderate price declines—in one
of which die index rose the first seven months before declining.

price

prices.
administered.

does
not
determine
this price in a vacuum. He cannot
set the price at any level he
may

with

and

prices

finished

own

admimstered

ministrator

University, New York City

ing, and emphasis paid to steel, reveals conclusions at vari¬
ance

at

13

industry.

condition be

steel, aluminum, and auto¬

mobiles, where a huge capital in¬
vestment is required to enter the
business and large past sunk capi¬

We

specialize in and offer

our facilities for

the

purchase and sale of insurance company stocks.

Blyth & Co., Inc.
New York 5, N. Y.

14 Wall Street

San Francisc6
Boston

•

•

Chicago

•

Los Angeles

Philadelphia' Pittsburgh

Detroit

Pasadena

•

Minneapolis

•

San Diego

•

•

•

Cleveland

Spokane
San Jose

Oakland

•

•

Fresno

Seattle

•
•

Louisville
•

•

Eureka

Portland

•
•

Indianapolis

•

Sacramento

Palo Alto

•

Oxnard

14

The Commercial and Financial Chronicle

(2618)

tially

The Food Supply of America

shortage of water
which

By NATHAN CUMMINGS*

At

our

than

water

within

the target

were

torrent

of

private

it if

food

for

abuse

.

public

.

.

increased

factor

is

which

work

farmers

apparent that

water

our

we

build

can

have been devoting an
share of their income to food purchases.
If this
trend
continues

that.,our. farm
continually declin-

Through the selective breeding
of livestock, better feeding ,practices, and use of chemicals, major

farmers

are

the

the, land

census,, and
leaving all the time. ;

On

up our watei

left

have

1950

farms, this industrial-

some

jzation
Hjo

is

process

point

carried

where

to

out

machines -plow

h^vest

and

Some machines milk cows,
others
feed
animals, and

crops.
whiie
till

more

others

and

sort

fruits

grade

|ie^onfcaUy
Evidence
creased

that's

exactly

of

this

greatly
inmachinery is

Unfortunately,

.

what's

been

.

_

.

-

.

...

,

happening
to
U. S. agri¬

to

culture.

Con¬

attempting to find

stant criticism

Much

How

is heaped upon

it

from

every

quarter.

Be

The

street

Nathan

Cummings

if

even

—

the

it

this question

of

the

Carolina.

.

food

by
primarily

Based

1956's record production
cast

that

states

need

a

25%

increase

0UWhen

this

figure

the
on

down

example, do today's critics

it

reflects

in

necded

large

their

.

.

>

increases
and

today's critics realize that in
spite of this internal conflict, U. S.

1975 our requirements for
poultry and meat animals
be up 35%.
On the other

eggs,
may

machinery

trees and to help harvest

'efficient,

more

a"d m°re productive..^'"towards

the

farm

?u^t^"|^biy

mente te to produce fresh water
a cost ol 25 t0 50 cents per thou"'col>ter 4 '
"and gallons. , .
In addition

token, large

same

and a 20% ln"

HeSre againP needed

JJSM 3 nearly doubIcd U- S'

-

Further'
realize

do

that

U.

complished
less

W..
-on
<

ro-

\'hclu

c
to furthering the dc-

^

.

of

irrigation water generally pay
Use of Uheinistr-y
from one-half to two cents, and
One ofithese fields Jsithe
inindustry, five cents per thousand
creasing use of chemistry to solve
gallons.
:
J
;/: V,
problems facing agricultures
From these figures it is

last

30

laborers

veaia
years

over

These

are

with

fewea!?d

fewer

past

,

.

.

be m order.

creases
■Can

We

Meet

provided our people
sufficient food during two

merits—for
the

most

accomplish-

they represent
glorious

history.

one

in

pages

of

x

It

future—a
*

"

must

future

on

new

our

all—that

Increasing Population

with

and Food

Expenditures Require More Food
Basis

for

this

need

for

moi*c

more

is this
country's rapidly expanding population
.a
trend
.

.

4

in

the

...

for

no

pessimistic—f

e e 1

i

to

n g

^

come.

to

all

of

grassland
which

of

or

could.be
.

addition,

many

marshland

-

millions: of

or

land

sub-

ject to flooding could be reclaimed4
out
rent

be" wffl

that

of

this

vast

estimates
need

to

meet

requirements,

acreage

yields

are

cur-

that

about .25

acres

additional
f0Od

reserve

indicate

only

we

million

our

if

1975

present

maintained.

•

.

productivity sufficiently

to

The
U. S.

„

Advances

why only 25 million acres?
answer

lies in the fact that

develop-

ment and

application of improved
technology.
•

Requirements?

.

According to
the

Bureau

_

the

total

..fhe

projection by

one

of

Census,

population
in
1975
will
range between 206 and 229 million
persons.

dictions

By
are

the

year

that

2,000,

pre-

will

have

we

approximately 300 million people,
*An address by Mr. Cummings

before
the Research and
Development Associates
.

Food

and

Container

institute,




Chicago,

one remaining question is:
„

.

How will agriculture

our

,

Because

-

meet

of

this

technological

these

progress, agriculturalists feel. that
demands? In order to answer this five-sixths of 1975's increased reQuestion .it is necessary to examine quirements will be obtained from
the natural resources and tech- greater yields and better effin°l°gy available and how they are
ciency.
•
being utilized for the job ahead.
How
can
technology produce

Natural

"

Resources

T

111
our

*»

process

yleldS ^

^
.

of inventorying

natural resources, one poten-

CienCY:
.

task in

a

can

cated

by

in

the

production

and

p,i

•

of fertilizers, helped

addition,

eration,

it

will

forage

a

provide

farmers

testing laboratory.

farmer need do is send in

a

and

in

turn

he

ceive recommendations

will

re¬

how to

on

or

results.

^
Another
effort
at
increasing
livestock productivity, still in the
experimental stage, is a new-feed
additivS:'
•
■■■ -• .

to

give

additive is

new
such a

calve*

head

start

maturity
from
three
to
months earlier than .usual.

four

i

,

Along this same, line, scientists

are h°PmS to discover hormones.

which wiU synchronize the heat

new

mettiod of

increasing egg
'

duction.
Results

this

of

pro¬

""i

which

system,

.

.

...

chickens will lay about 2fj> dozen
™nr*

fppH

nn

am-

on

^

■>,
chemistry

its " relations

soil 'and

is

pro-

•

>

•

.

A

country s added requirements for

the'' quirements which dictate

with

a

increase by

Some idea of how u- iS. agnculture is increasingly utilizing

Technology is active in still another field—that of endeavoring

chemistry's

to discover new farm crops suit-

contributions

to

pro-

duce more food is obtained jn the

able

1975.

country.

feidf!4zer6-

on,

the

use

,ot

cultivation

,

this

in

*

.

,

Actually, this search began back

^'r

.

for

*•

in

1819.

Since

that

time,

For instance, at present this
country is using a little more than 250 000 collections of seeds
-than six million tons annually of and vegetative plant stocks have
more

.

the

primary plant

nutrients,

ni-

been brought into this country for

trogen, phosphoric acid,-and pot- screening.
ash.

1975,

annual consumption
is expected to.reach from ten to
twelve million tons.'V" ; ""
This represents a further continuation of the trend towards

fertilizers,

since

even today's usage is four
the. 1935-1939 average. '

greater

use

of

~
r
"
•:
During recent years, approximately 7,000 plants have been
screened annually. Of this num^

.

ber, over 95% have been breeding
stocks, screened as possible
sources for improving our exist-

ing crops.

times

However, since its establishment
1819, this program has given
the increasing knowledge us a number of new crops, includand assistance provided by chem- ing such commodities as navel
istry, agriculture stands on the oranges, avocados, durum wheat,
threshold of a wast multitude of and dates.
- ;
•
nature's secrets . . . secrets which
Since the end of World War II,
hold ihe key to man'.s increasing agricultural technology has been
needs for food.
..."
employing a new weapon in its
For example, several years ago, fight to produce more and better
in

.

scientists

successful in mak-

%

—thus

unlocking

photosynthesis.
And
,

'

were

ing sugar from
without the vaid

hailed

accomplish this

number of ways.

_-.j

i__x

Once the project is in op¬

nesota.

All

being

now

ihe'ifniversitV

^

x_

with

project

a

blanned at

yiding. j™?™ knowledge of the. more Jivestock^and poultry—re-

effi"acid
t

Actually, it

7;:

,

With

agriculture has been making

tremendous strides in the

n/r

We Meet

"ow

'

Now

meet

future demands,

5-year period from 1950 to

Technological

possible.

manner

step in this direction is indi¬

following figures

ample

seems

^

to

devoted

acres

achieved

appears

^

cultivated

In

that

•

group

supply

years

woodland,

problem at

be

can

many

now

^
is

our

present, we have approxi-.
mately 200 million acres of land

to how

as

studvinu

in

A

plant.

-

the

^

is that the experts do agree—that
U. S. agriculture can increase its

and another 13 million

1955.

needine-

J'

gained
considerable
momentum, since 1940.
Indicative of what lies ahead is
the fact that our nation's
population jumped 19 million from
1940

to 1950

countrv"

the

sec-

resources.

Here,

considerable effort will have to
he expended to boost production,
However, the important thing

.

has

are

they

second

to

aided

In

desalted

Dumn

cient

moie eggs
•
011 less teed'
is-11531 nutrition, the eradication of
Through activities such^as the
111 weed^ and the control of ..pests foregoing, agricultural technology

it

smnetime

pipelines

Ts *found

situaUoii

.

ease.

A

food

WiiJ
which

pr°"

we reach fthese
.

objectives

to

nower

of

that—

+

O^e school of thought

creased food production.

that

through

jand

dlvlded ln their opinions
difficult the task will be

the

Dossible

lowered

A welcome contrast to the water
water

Authorities on this subject agree
that we can. However, they are

which presents
demands for in¬

'

challenging

focus

is

cost

is

use

rluSTwl XuTm

a

DUl iney .ao more man tnat
also trigger another impor-

goals.-'

But—time marches on. Agriculture can't afford to rest on its
past

laurels.

°Ur

than

more

ant Question. Can

its

i

this

ut

+u

•

us

duction goals in 1975.

do

t'onLimje

j

^

tions

figures give

world-wide conflicts

they

uuite
solar

°f

But

•

water.

The foregoing

and a major
depression. U. S. agriculture may

musi

x

water

These

Requirements?

have

well be proud of these

Once

.

achievements*

—

y

are required for many iood grairis'"
and in certain categories, de-

with
farm

50

years?
magnificent

truly

j

of conversion

moderate Srises
mocleiate llses

only
....

aurum

and

...

•

the

achievements
which

acreage

SSJSSS
one-third

*

Conversely"1
y'

during

aciuave

eimiLs

+

feat

spectacular

i.ai vesiuu

almost

.

this

iiihl

op-

feed-

employs increasing amounts of
light each week the chickens are
Through chemistiT,;,agricultuie" laying, indicate that in 12 months

appar¬

em

convert

*•

iopdv needs.

>u.8ers

cr?ps wiU vary' with substantial ent that efforts must continue to.
"
"
V
gams necessary for feed ?rains to f uexerted to I"
be
bring down the cost

critics

acriculture^ac-

harvested

lras

the

today's
S.

increases in

to

Purpose of the
of

••

.of this century—thus meeting

reared

eration

n?nt in many other fctivwies dc^ breeding »f beef cows and hogs.
A
third technological innova¬
signed to...boost production ato meel
tion, recently inaugurated, is a

average U. S. home pays from .10
to 20 cents for a thousand gallons,

By the

technology's

en- that heifers will reach breeding

*

area

For example, the U.S.D.A.

that in

.

Do

power-driven

Looking

that

manufacturing

a

or

,

faster, easier,

mg

production

supplement a specific lot of hay
silage. By following the labors*,
tory s directions, the tanner will
air
be able to correct forage deficienequipment in- c*es
and obtain better feeding
to-spray

crops,
plus
many
other
* '
J
devices to make the job of farm-

.

evident

is

It

ultimate goal is to make livestock

modern

many

used

crops fror^ tjle
Other mechanical

prune

oper-

MWnTStt8 quired°in™h^ed
atremendous revolutionary
process.

airplanes,

by cen-" t!?e 'futur^ ^e 'agritiiltufal
forc7 ow7a heated
.visualize mechanical
TheobTect'ive^ of both Expert 'botf domg the work inl-he

broken

categories

some

.

standard

gelding0 sl^water ^ut

a

is

satisractoiy

triiW

total

in

equipment,

eludes

a

rnost

£he
a%77ooo™?dt,V. is de
dizcdby a ?75,U00 grant fu!^

will

we

under

tne

„

this fore-

1975

in

^es.e $200,000 giant to
col'Lo6111,? c?l}~

A

ducted

this

iTdustdanzed "faVmr'own''The*ir
own

Sains have been made in the
amount of livestock products obtained per unit of breeding'stock.

samples

to,six-fold.

to

-

for
standard
ating
conditions
manufactured equipment

is

recent

more

published

S.

For

one

U.S.D.A.

gross misunderstanding
agriculture — its past
triumphs—and future problems.

U.

in

own

Tfyjs is wrong! Terribly wrong!
of

to

answer

found

mean's

supplying

man

farm

tests
Hat

on

four.

.addition

Island, located oif the coast of ;dust

find

The

the

for his table.

It shows

expanding population and
increasing
expenditures
for

food?

...

politician uses
farm problem to further his

hurting

government-subsidized

our

its

clever

Ln

around

methods concentrated

bor

food must U. S. agricul¬
produce to meet the demands

center

from

creased

water.

sea

efforts

,

farmer

aims

tw°
on

Noith

of

fwants something for nothing — a
fiandout at the taxpayer's expense.

selfish

Present

economical

an

of desalting

means

ditional

lazy

The

Will

ture

thinks

the

Food

This brings to the fore a highly
important question: How much ad¬

in the

man

More

Required?

;

,

eration, geared, to the most effi-7
in convert-feed-

of farm

use

i

stuffs into food

measures
nke fourf(| j,n the fact that between
these won't prove sufficient, ui- 1940 and 1955, the numbers of
timately, we will be forced.to tap trucks and tractors
used on farms
.".
and there is every indication - the oceans.
vrtripled.
that it will
we will experience
With this end in mind, the OfDuring this same period, the
still greater demands for expanded fice of Saline Water of the Deamount
0f
milkingmachines,
food production.
.
.partment of the Interior, has beep COmbines,
and-corn, pickers in-

not!

k

stock.

since

method which reduced evapora-

t

role in the development and improvement of poultry • and live-

lion

tion from 20 to 40%.

people
ever larger

,

f*1 vecent years, technology has

only

Cai"e
as

,,

carbon "s dioxide
of green tissue

the

mystery
^

.

.

of

..

recently, gjbberellic

iqt°

the

i

ac>playgd 311 ever more important ,;..J

fact

is

*.

•'

^ n

0

growing
infewer-and fewer,

ing. Over four and one-half mil-

possibility,
recently
tested, is the use of fatty alcohol
films on the surface of the water,

our

*' •"

required,-1which

the

population

supply—a

V;^'7

,

this

are

for

counts

_

a

years

becomes

/

with

dustrialization,

10 to 15 years.

tag more reservoir* to catch flood
water
■ ..~-.--.Vi
Anothei

popu-

at

double

4supply. One is through constructs

food. This factor is consumer

During recent

would

Yet

..

to

.

spending.

political?
You

,

another

it

will

needs

And

supply which is vital to the
irrigation of crops in many seer
tions of the country.
There
are
several
ways
in

contributing to the need for
more

—

and

—

.....
addition

In

lation

continuous

a
.

,

your

industry

,

industrialized.

water

shortage problem.

like

you

the

its

increase

to

Offers high hopes for
technological developments in farm yield, food processing and
distribution, and looks to economical way to de-salt sea water.

of

country uses
gallons of

billion

prompt action is urgently needed

Mr. Cummings concludes we have the neces¬
facilities to lift production 25% to meet our growing food
needs providing we overcome our most serious obstacle, i.e.,

How would

.

.

daily.

the next

Thus

sary

segment

this

260

that

•mates

future problems.

water

year.

..

Industry uses
nearly half of this total, and esti-

—

the growing

a

.

possibility
reality for 1,000
a

...

Thursday, June 12, 1958

.

A striking example is found in
Eventually, chemists
may
be
the^ growing trend towards larger able to make agriculture cornbut
fewer
farms. .- With
larger pletely
independent
of
climate
farms,
economic v application
of and
adjust, it to man's: needs. r.
automation and mechanization is Once that day arrives, man may. j
possible. Through these processes, well have his food requirements v j
farms
are
gradually \ becoming solved for all time.
j

threat emerges.
possibility of a

last

present,

more

fresh

expanding population's food require¬
ments and summarizing natural resources and latest technology
available to meet these demands, Consolidated Food head
rebukes those who unfairly indulge in abusing — and grossly
misunderstand
American agriculture's past triumphs and
detailing

became

communities

Chairman of the Board, Consolidated Foods Corporation

Prior to

dangerous

That is the strong

.

.

spotlight,
^X11?

the forerunner of a-host

of chemicals which will speed up
or slow down plant grovdh.

food,
Atomic

That

weapon

Energy

-

.

is atomic

,

energy^

Since 1949, the effects of nuclear
radiation

on

tion

trees,

of

grasses,

|een

an-

extensive

collec¬

shrubs,

flowers^
vines, and vegetables has

studied

at

Brookhaven

Continued

on

page

Na-

24

Volume
jt

187

Number

5750

.

.

.

The Commercial and Financial Chronicle

(2019)

t

the end of the year was more than

Income, Expense and Net Profits
In Consumer Credit Financing
'..'■I
By MANFRED I. BEHRENS, JR.*

v

:

i

,

f

.

Management Consultant, New York City

.

make

profit on instalment financing in
itself, if such high unit sellers as
automobile
auxomoDiie

dealers
dealers

feient

fiom

finance
many

dif-

consumer

but tnere

for

examine

1955

excepted.
ouite

are

Arl
and

companies,

To

ence.

In"

banks

reasons

evreoted

are
are

In this resnect thev

their

them:'

to

the

*

+„

nearlv

the

to

figures

this

it

V

which

demon-r

reouisite

seems

'1J

qirloua! abomaiyThere

to

(2)
of

Legal

country

confronted

Expenses

attorneys'

the

out

allocation

proper

bookkeeping payroll.

retail

is

credit

with

proposals
for
designed to re¬
strict
it
in
many
ways.
Most
urgent for our instant purpose is

state

consisting

retainers and fees
in securing collec¬

legislation

ap¬

the trend

a?

,

expenses, an
and

tions

it

must

that

be

relative

p

therefore necessary

higher

in

soecialtv

repossessions

*

of

the

mer¬

regulation,

or, more

accurately,

finance field are, of course,
to
legislation. The rates

sumer

fees.

(3)

inured

Collectors

Men's

Car

and/or

Allowances.

include all

Special

This

is

they are allowed may not be what
they would wish but, judging by

to

allowances made to

car

reeent

financial

statements* .> at
profit; so do the
Merchants, on the contrary,
(4) Public Liability and Prop¬ are
losing money now in
the
erty Damage Insurance. Premiums credit
operation and are threatened
on
cars
used by employees men¬
in many areas with restrictions on
tioned under (3).
rates which will throw them still.,

any
Collection
ployees.

lower

average balance per

study is heavily

^.Ahe h^h
Even

furniture stores.

(5)

stores

eraDAy Pigner in specialty stores
a

or

the

*

bl

x

expenses

Department

em¬

least

they make

a

banks.

....

are many

published services which
many merchants
the
figures,
—*
1—
""•••
*
average
loan
bal- '
give t'jree" of charge, such as deance
at
consumer
finance comlivery, a liberal return and ex-panies was $263 and in the personal
change privilege, and so on. Why?

within the

be observed.

.

v

Charges paid to credit bu¬

further

and

reaus

of

other

outside agencies.

(6)
Interest
on
accounts receivable
annum

study group, wide variations will

■

rate.

•

5%

'r

■

t(7) Premiums

on

kinds.

per

the red.

merchant

alternatives,

-

segment

will

will

realizes

his

continue

tn

good money after bad?

throw

Bonds of all

No

be served by such a
least of all the consumer.
can

process,
Once
the

outstanding
at

-

into

society

Or

he

he

discontinue

service, which the

banks

P?r

ments, including
of

incom_ to _ovftl.
income tl cover, wollM be pnnsi/
would hp consid

li!vL° Wlth

.

reverse

mltWeVe^,
again
OUt

all merchants

costs, neany an mercnanib

strate

ac¬

the
:

to indicate strongly that its
are entirely valid, cer¬
tainly for New York and probably
for the rest of the country as well;
there are geographical differences
in costs, of course, but it is hardly
likely they would be of a magni¬

lose woney,; However, before we
g0

per

and

limitation
of
credit service
chandise, including summons and
filing fees, Marshalls' and Sheriffs' charges. Our friends in the con¬

So, in the direct relationship of " shown.
charge income to appur- «ohdpd
i.—
„vi
i
pointed
;

year,

from 4 to 26.

and

service

exoeri-

of

some

according

are

during

range was

tude sufficient to

tenant costs

was an average

transactions

conclusions

A Curious Anomaly

a

count

16

pear

philosophy of price regulation — calls upon merchants to
obtain and make available facts to authorities concerned.
merchants

about

plied, its absolute size would

the

no

of

Office
Help,
including
Legal customers incontrovertibly prove
Clerks, Cashiers, and Inside Skip they continue to want.
r \ Tracers, and any others devoting
their time to the affairs of the
Acting on Accurate Information
Credit
and
Collection Depart¬
But, more importantly, through¬

sample used. Although apparently
no; tests for significance were ap¬

% against state regulation to restrict or limit retail credit based
on insufficient cost
information, the author—without going into

Almost

$55 to $144. There

These statistics should be suffi*
cient to show the scope of the

Behrens recapitulates findings of studies made showing
that merchants, unlike banks and consumer finance
companies; "
lose money in their instalment credit operations, Cautioning

<V

and the average balance
about $90, with a range from

,

,

Mr.

.

900,000
was

15

f

,.
"

his

credit

consumer

needs;

(8) Postage on all matter mailed
was Presumably .beeause by so doing
Shows Average Operating Loss
or; raise his cash prices to all,
bt
Mthe^ fibres would they hope to increase volume, and
The average income from credit hy Credit or Collection Depart¬ including those who pay cash, in.
•'
'
\ :
'
order to close the gap between
E?r. 1
J today\ A confidential particularly the extra profit ob- service charges and recoveries of ments.
iwv+a s"bstantial group of tainable from plus volume, vol- bad debts was 7.38% of sales; the
(9) Telegrams and Telephone income and expense?
!
r

.

IS?To2?ni» furniture stores in
rtS^OW«on ailA avera§e+
pnceoi

oniy ^yu.

An

S23w,flrf^VlF•
«

•

asryet-unr

g

fh

the break-even point;

Ume .beyond

this r will, they trust, more than 4.20%. to

unlike

the

.

..

services

•

.

i

of

price of the. goods; but why must

many^ of the costs it be sufficient to

handling instalment receivables priate expenses?

are

decidedly

most
size

constant

the

of

debt,

agewise-they

larger

sticky, remain alregardless of the

that percent-

so

considerably,

prove

on small accounts. One
quickly of bookkeeping,

thinks

credit and

^collection payroll, sta-

tionery and supplies, rent and
on*

so

maximum of 11.96%.
expense for' credit

a

purposes.

within
take

a

these

all appro^

cover

While it is not

here to underhilly exhaustive answer to
our .scope

was

2.00%;

implied theory was always
dubious, if not downright faliaci0Us.
Guesswork' is
no
longer

(10)

for

collection department

-

accurate

Stationary

-

Therefore, the dissemination of

credit

and

and

collection

-

information

of

costs

Supplies

extending

about

the

instalment

credit in retail stores would be

depart¬

a

the range was from 1.15 to 5.30%. ment. •
.
..
;
r,
genuine
public service at
this
Credit and collection department
(11) B^ntals of Telephone time. The philosophy of price
costs averaged 5.24% and ranged
Directories used by Skip Tracing regulation per se is a controversial
from 3.60 to 10.90%.- Bad debt
suoject, and not within the pur¬
Department.
.

,

losses averaged

from

range

direct

1.91%

0.94

expense

to

had

and

a

Total

averaged

<

3.80%.

9.15%

questions, it is evident that, and ranged from 6.80 to 17.78%.

the

•

or

Thus
was

the

operating loss
Operating loss figures

average

1,77%,

(12) Insurance
ceivable.

on

view of this discussion. Neverthe¬

Accounts Re¬

less, it, is, surely not open to
question that, if there is to b&
(13)
Storage Warehouse Bills
regulation, it ought to be based on
paid on repossessed merchandise, fact and ..not surmise.
Merchants
f

;

'V"1.

.

and the costs of recovery,

have, it is firmly believed, an
(14) Rental of Special Equip¬ obligation
to a make, such
facts
in yiew of the recent balance out, since the individual ment such as Recordak, I.B.M., available to the public authorities
performanceyof the discount statistics come from different Addressograph, etc., used for Col-, concerned.
houses. 'The percentage net profit stores,.but the range was from 0.26 lection
Department ' records
or
margin*"of most retailers has his- to 6.50%: The actual rate of follow up, or depreciation.
torically been small; still,, the dis- charge at the time of the study
(15)
Taxes
and
Welfare
on
counters have consistently found ranged from 7.2 to about 13%
per Credit and Collection Salaries—
for minima and maxima will not

necessary,

..

V"

u,

'.Consumer finance companies, in
general, have been able to obtain
much higher rates than banks—
and need them. / They, like the
merchants

who

weight

the

to

must- give
good

great

will

factor*
take on many risks which would
be entirely unacceptable to banks,

.

Two New V.-Ps. for

themselves

lecho^

methods

Yet

thef^

rates

largely S°verlled by
competition.

Merchants

generally remit all
charges if the customer

service

pays the entire balance in 30 (or
sometimes even in ninety) days.

They must meet the competition
of the

traditional

charge account

for which, traditionally, no charge
all

has

been

made.

Also

do not usually assess a late

they

or

de*

to

able

at

sell

lower

prices than their competitors following

more

stereotyped methods,

simply; by eliminating services of
sort

one

or

another.•

1and

In

at

for credit

minimum

a

first- and collection salaries

n?"!bAa c ains m f
cited, credit extension usually has
ios
aveiage indebted- carried a charge separate from the

elucidation that

of

from

was

offset the. exfra expense involved... The-average

True,

pess at $25 or less. It haidly needs

range

again

in

1956,

;the initial unpaid balBeai^ in mind that, as in the

annum

ance.

on

previous survey, not
showed

profit

a

accounting
a

'

was

Now there is

a

single store

when

a

a common

misap-

substantial group ofindepartment prehension, that stores do make a
and. furniture stores
New York

profit

on

the instalment operation,

payments,. There

is a

limit to what

reasonably be expended to
bring in two or three or four dol-

lars.

Then, too, there is a psychological factor. The consumer seems

to.feel

a

greater moral obligation

to repay borrowed cash than to
pay for merchandise.
; Finally, just as it is relatively
expensive to collect a small
balance than a large one, just as
it costs more relatively to deal

more

with

studies

of

between-expense

relation

the

income

and

in

thejr instalment credit operations,

single store

and chain in
showed a loss, de-:
spjte the' fact that charges, had
been increased during the period
Every
both

surveys

between.the two studies.
cated

above, the ready

As indi-

sion.

First, it must be recognized

-

to

-

example, in the field which is the

wear

convenient to include most credit

ment

and

companies, let alone departstores or banks; charges
which may 'run 12 or 43% and
more of the net original time balf0r

ance

months
*

-

a

or

\

less.
>

'

^

•

collection

categories,;

of

payroll.
-

-

*

Sometimes

separately,

as

"other income,"

without' attemotine

any event,

to

reoro-

Gf
the

of

-

w




far
use.

many
a

1956 survey mentioned above,';

the entire

picture.

which

great

a

covered

will

in

the

York

make'

firm's

Joins R. J. Steichen
(Spcoial to The Financial Chronicle)

MINNEAPOLIS,
Rolstad

staff

has

of

been

J.

R.

Minn.—Alfred
added

Steichen

Baker Building.

offer to sell

nor a

solicitation of

an

v

340,562 Shares

Elsin Electronics
COMMON

Corporation

STOCK

($.02 par value)

-

PRICE

$.875

,

by circumstance,

per

share

over

,

ceivable was almost $82 million,
the number of active accounts at

:; (T) Salaries of Investigators,
Collectors, Tracers, Special

Men,

•
.

LEE

CO.

Underwriter

•

135

Broadway, New York, N. Y.

620

his

Los

office, 550 South Spring

New Issue

,

and

Exchanges*

offer to buy any of these securities. The offering is made only
by the Offering Circular. This is published on behalf of
only such of the undersigned as are qualified to act
as dealers in securities in the respective States.

$710
million, including cash and credit;
look more than 108 million sepwas

an

New

Stock

Street.

many

This advertisement is neither

of.I^rfrcn^stinc^8 316

as typical
The total sales

Angeles

of them. At least credit is

service

the

of

Coast

Wakefield

headquarters

with competition which eliminates

been dearly indicated and go
bardly ev^ realized until

.

state

has

the true relationship be-

-

K^'cZJ&'%diPS£t2£2Ohio
University.

material

purely academic

Mr.

so

Second, these truer figures are
not too easy to eome by in the
proportionate- to the time, yet the
usual retail accounting system. It
co6t of handling a 12-month transarate sales transactions to do this Will be valuable now to take a
action is certainly not double that
business, with an average sales-look at the classifications which
of a six. The-important point here
check of $6.57. The range of sales careful review has found it requiis that many retail accounts are
checks w$s from a minimum aver-''kite to include in direct instalment
scheduled to pay out in less than
age of $4.58 to a maximum aver-^^ credit expense. This is the scheda year, a large number in five or
age
0f $Ji04.92,
The instalment ule used for the 1956 survey: (Note
six months.
sales volume was above $119 mil- that bad-debt losses were added
-TS-'-i,
lion,-the year-end accounts rer later as a separate figure.)
t

a

duce

volume

-

this

than

that it appears to be all profit. In

significant role. The trade habit
is to make a charge for credit

-

Today
more

Pacific

,

Recapitul|ates Salient Findings
every detail, here are
the
most
salient findings

1 Frank B. Haderer,
Pulliam, Jr. and Reginald

Ben H.

members

occupied.

in other
bookkeeping
the service

as

six

..

July

expense

such

charge revenue is shown on the
V-'"*;profit and loss statement entirely

time-extension

which may be taken

-

space

that all people tend to do certain We shall not dwell here on the
things for their own convenience, fact
that
perhaps
traditional
even if the results are not strictly merchants
ought
to
know
the
scientific.
Economists 4 a n d accountants, despite occasionally ex-* actual net costs of the services
pressed doubts, are people. For they provide, faced as they are

nance

low-^it transactions so the
length of time-extension plays a

•«.

relation of space used to the total

and it is appropriate to inquire
highly competent auditors,-ex- into the reasons for this impreshaustive

On

<16) Rent for Space occupied by L. Wakefield will become viceBookkeeping—Credit & Collection presidents of Walston &
Co., Inc.,
Department, Value this space in 74 Wall Street, New York City,

City anade, -with the supervision of

subject of this conference, we
linquency charge, unless the ac- chains have asked a prominent commonly' speak of "consumer"
count
is very
bad indeed.. This accountant to review their
joint credit as applied to the purchase
policy again reflects the need to experience; unfortunately, this in- of "fconsume,r" gpods, as if they
maintain customer good will. But
vestigation has not been completed were literally "consumed" at the
the gap between promise and per- as
yet
However, it can be stated moment of purchase; yet the bulk
formance may average as much as
now that these chains struggle to
of these goods is not consumed at
a fifth
to a third. Not
only con- break even * on the credit scene* that time at all, but remains, often
sumer acceptance, but plain ecoand most do not, in spite of charges
for years, in the "consumer's" pile
nomics,
plays a dominant part sometimes
higher ' than those cus-*°f stored-up satisfactions. Similarhere; if balances are small so are tomarily made by consumer fi- ly, accountants have often found it
pan

Security; ; Disability; Un*emplpyment. Insurance;' (Welfare
Benefits; Compensation."

correct

made.

Walsfon & Co. Inc.

Social

High Street, Pottstown, Pa,

Copies of this Offering Circular

COrtlandt 7-3708

•

•

FAculty 6-0159

may

be obtained

from the above underwriter.

•

to

the

&

Co.,

16

(2620)

The Commercial arid Financial Chronicle

generating capacity in 1958
is in
1957; to the company's
emarkably- broad diversifi¬
cation; to its vital participa-

THE MARKET... AND YOU
By WALLACE

in the

ion

STREETE

tronic

atomic
of

areas

elec¬

and

the

From

its pre-1958 steady
growth in earnings; and fi¬
program;

After

world

largest
gain in two months to chalk
scoring

the

interests

include

Brit¬

ish
Petroleum, Gulf, Royal nancial strength. While first
high for the 1958 Dutch, Shell, Socony, Stand¬ quarter earnings sloughed off
"rally," the market has this ard of California, Jersey and to 53 cents from 73 cents in
up

a

new

week

first

into

run

Texas.

"hesita¬

1957, resumption of their
Particularly highly concen¬ ward trend, irrespective

tion"

and then definite,
though moderate and volume- trated in the Middle East is
light decline. From its rally- British Petroleum, which, in¬
peak of 469.60 at which it cidentally1, is expected to turn
closed last week, the Dow in
increased
earnings this
Jones Industrial Average has
year.
Striking is its major
sloughed off to 467.93 at participation in the consorti¬
Wednesday's finish.
um
that is managing Iran's
In the face of the
persis¬ nationalized, but dynamic,
tent "bad news"
economic, petroleum industry. Its con¬
industrial, and financial — vertible bond issue is held to
market participants are em¬ offer an
interesting specula¬
phasizing the bullish impact tive entree to this situation.
of the liberal supply of inAmong our domestic enti¬
vestible funds; the increasing
ties, Gulf affords the largest
support from the mutuals,
participation in the Middle
both existing and newly form¬
East, albeit Standard of New
ing; persistent "inflation"
Jersey undoubtedly continues
psychology; along with some its
reign as the prime favorite
brighter spots on the business for the
community of both
and international
—

scenes.

optimistic
ficed

to

atmosphere
counterbalance

The

spectators

suf¬
the

skepticism

concerning the
industry's pick-up based

steel
on

the fear that

it

is

consti¬

tuted

by hedge buying in an¬
ticipation of the price rise to

and

Drugs to

"

investors.

stitutional
in

buyers,

favorable

reflected
action

market

the ethical

are

with

drug shares—
issues showing

several

become

of

Insurance Stock Deal Creates
Interest

|

Naturally interpreted as
having broad investment im¬
plications is the news that

effective July first. net
gains in the face of the
rails, with C. & O. in decline in the market aver¬
the forefront, acted somewhat
ages
over
the
past
year.
better, apparently stimulated Merck, despite its
high price
by growing expectation of earnings ratio of 20 related
legislative relief.
Emerging to estimated 1958 profits, is
through this week's declines, high on the list of the fund
the liquors were
outstanding¬
managersj' favorites, as re¬
ly strong, with some of the vealed in their portfolio
oper¬
issues, as Schenley and Walk¬ ations. Other well-like com¬
The

see

at

with

its recent

of 21.

market

price

The conclusion is sug¬

gested

that the shares of
many
other un - mutualized
companies in the industry are
available

prices

over-the-counter

at

substantially below
real "going business"

views expressed in this
article do not necessarily at any
time coincide with those of the

"ChronicleThey
as

those

are presented
of the author only.]

Maitland Ijams to Be
Partner in Langley
On

will

July

Maitland

1

become

T.

partner

in

a

Ijams
W. C.

estimates

8-year limit); and the

of

earnings.
Coppers

higher

current

air

transport companies.

In the face of the
but

are

still serious

recognized

adverse

fac¬

were

outstanding tors, the optimists here
point
in their market
strength late to
signs of improvement of
Tuesday and Wednesday, on the
competitive situation, the
the news that the
Govern¬

ment

will

buy 150,000 tons

increase
in

in

fares

as

and

products in foreign countries.
As offsets to
jitters recur¬

rently ensuing from

A

Surviving Blue Chip

"The Blue

Chips:—perma¬

recurrent

nently debunked
or
now
Middle East
disturbances, ready to go again?" Whatever
bulls point to the
trebling of the answer to this, one of the
the
of

cost

domestic
War
tial

developing

reserves

new

since World

Two, and the differen¬
from

the

lower

—

market's

current

$64-ques-

tions, General Electric
a

favorite,

is still

and, incidentally,

far

finding
out-performing Westingabroad; the steadily in¬ house market wise. GE's
creasing domestic demand, Street friends are
pointing to
overseas

consumption the assured further growth in
fast; and the the use of

rising twice as
electricity,
inadequate development of firmed by the
utility
domestic reserves.
Highly fa¬ panies' announcement of
vored

issues

with

diversified




ultra

Senator's

country is not to be turned over
to the AFL-CIO, men of his cali¬

plans to add twice

as

con¬

com¬

their
much

ad¬

of

a

realized

live,

This

It won't

good because labor

grained Democrats. It will simply
lessen what chances the Republi¬
cans
had.
Their chances lay in

the conservative voters
a show-down, I am con¬
vinced, outnumber the laborites,
the radicals or the so-called lib¬
arousing

which, in

a

Knowland's

better

failure

being

is

showing

to

largely attributed to his espousal
of
the
right-to-work
or
anticlosed shop law. There are many
other factors such as unemploy¬

Republican

in

dissension

ment,

he

It

Knowland.

did not

when

haye long

asked to step into his
Republican Senate leader.
does

have

not

Taft's

other

every

re¬

ranks and the Senator's remaining

than taking
time off to campaign in his state.
But his pronounced views on the
right to work law are given most
publicity and this is what other
Republican candidates are giving
most attention to. It is mellowing
in Washington rather

like

that

means

Taft

he

thrive on adversity. For one.
thing, the primary results may
bring the contentious factions to¬
gether. Governor "Goodie" Knight

may

has

been

smarting under the

ar¬

rangement whereby he had to

run

for the

Senate this time in

could

Knowland

that

run

order

for the

governorship. He went through
the primary taking frequent slaps
Knowland.

at

make

of

than

better

done

spect he is the image of the Ohioan,

Carlisle Bargeron

leaders with few exceptions are in¬

Senator

office.

whom Taft,

brilliancy but in

ap¬

any

as

Knowland

the labor leaders.

them

do

have

to

opponents in
to

man

Knowland

shoes

the

the

Taft, trying to
of his own image,

selection

his

of
if

in

retained

be

he

ocratic

efforts

not

iii

publican

pease

a

could

was

and

Senator

name

the ten¬
dency of Re¬

e m

late

The

ries,

D

should

bre

right-to-work
law, a fact that
unquestion¬
ably hurt him
in the prima¬

the leader

is

conservatives

even

land

and

the

he will be

he

But

made

an

showing than Know-

poorer

expectation is that
inclined to pitch

more

for the team from now on.
In

to

1950

organized labor set out
the scalp of Senator Taft.
result, support for the Sen¬
poured
into
Ohio
from

get

As

a

ator

throughout
the
country.
Some
such support would seem to be in
order

for

Knowland

now.

Goodbody & Co. Opens
Ft. Worth Office
FT.
&

WORTH, Texas—Goodbody

Co., members of the New York

Stock

kowtowing to labor bosses,
his attitude is that he may as well

Exchange and other prin¬
cipal securities and commodity
exchanges, have opened a new of¬

be counted out.

fice

There had been little

that

pect

of

New

&

New York

Ijams

is

Stock

in

the

Exchange.
Mr.
syndicate

firm's

the

After

Knowland's poor

showing in the
primary does not mean that he is
counted out in the Novem¬

chances

W. R. Tucker, Jr. With
Texas —W.
Roy
Tucker, Jr. has joined the Invest¬
ment
Banking firm of Parker,
Ford & Co., Inc. as a Vice-Presi¬
dent, it has been anounced.
In addition to

handling regular
securities, Mr. Tucker
will supervise all of the munici¬
corporate

transac¬

tions executed by the firm.
Mr. Tucker has been active in the

Investment
Dallas

for

Banking
the

business

in

10 years, re¬
cently with Dittmar & Company,

past

Parker, Ford & Co., Inc.
in

1955

has

offices

organ¬

in

Fort

Worth and Brownsville with the
home office in the Fidelity Union

Life

Building, Dallas.

Joins

BOSTON,

Mass.

has

—

Wendell

become

a

may

determination

and

yet bring him through.

He deserves better treatment at
the

hands

of

constituents. I11

his

him the Californians have
the

hardest

workers,

spected and most honest
the

United

States

one

most

Club

well

and

known

field

curities

Arthur

for

in the local
25

about

se¬

years.

Krensky Opens
Chicago

Own Office in
CHICAGO, 111.
Krensky,
York

member

and

—

of

Midwest

Arthur M.
the
New

Stock

Ex¬

changes, is continuing his invest¬
ment

business from offices at 141

West

Jackson

formerly

Boulevard. He

president

of

was

Arthur

M.

Krensky & Co.

of
re¬

men

Senate.

Worth

Fort

in

Even

Eisenhower, whom he has opposed
on
several occasions, has
great

Eisele, Raynor &
Redelfs, New Name

OMAHA, Neb. — Wm. J. Ray¬
formerly of Walter V. Ray¬
& Co., Inc., has joined Eisele,
Axtel & Redelfs, Inc., First Na¬
tional
Bank
Building, and the
nority leader. In the first place,
Eisenhower couldn't succeed and, firm name has been changed to
Eisele, Raynor & Redelfs, Inc.
secondly, he has implicit confi¬
dence in the Senator's integrity.
There are
no
shenanigans with
him.
He is completely forthright
and there is never any question as

respect for him and has paid no
heed to many suggestions that he
should try to replace him as mi¬

nor,
nor

to where
has

had

Bankers Bond & Sees.

he stands.

that

For

matter

reason

to

the

give

President
a

lot

of

(Special to The Financial Chronicle)

ST.

LOUIS,

Mo. —George

E.

N.

affiliated

Shearson, Hammill & Co., 75
Street. He was formerly
Schirmer, Atherton & Co.
F. S. Moseley & Co.

Gessler has become associated with

"moderate Republicanism." Some¬
time ago he was talking to a group

Bankers

408 Olive Street.

of

Shearson, Hammill

Gustafson

but he is

the

thought recently to his efforts for

(Special t> The Financial Chronicle)

with

bad

in

Building. The office, will be un¬
der the management of Arthur L.
Roberts, a native of Fort Worth

George E. Gessler With

Inc.

ized

look

stubbornness

DALLAS,

bond

do

His

slightest.

redoubtable fighter and his sheer

Parker, Ford Co.

corporate

California

all.

ber elections in the

and

to

primary there are no prospects at

to be

department.

pal

re¬

this

at

nothing

Congress,

committee.

Co., 115 Broadway,
City, members of the

York

labor

enacted

be

pros¬

really correct the abuses revealed
by the
McClellan investigating

Maitland Ijams

Langley

or no

serious

any

would

session

costs

with

Because of the

upon

the

right direction, the
of the red metal at
prices up traffic
growth expected from
to 27cents.
the introduction of
❖
*
*
jet air¬
craft and favorable
aspects of
Considerable stress is per¬
the first quarter
earnings. Fa¬
sisting pro the international vored
issues include Ameri¬
oils, as well as all petroleum
can, United, Eastern, North¬
units
marketing substantial
west, Delta and Capital.
proportions of their crude

nonplussed

was

answer.

an

Knowland

them, to say the least. About the
only exception is that hardy soul
from Arizona, Senator Barry Goldwater.
If his re-election depends

start

a

"

'

President

The

for

erals.

[The

consider to be ultra conserva¬
where would you get your

moderation?"

shivers up and down

to out-do their

1,200,000 shares of
Casualty of Tennes¬
$34 a share compared

you

tive,

publican polit¬
ical spines.

forms

years,

will be
Re¬

in the California primary
to send

bought

Life and

ijs

Perking up a bit marketwise, but still selling substan¬
to warehouse
whisky without
tially below their mean prices
tax for 20
years (in lieu of of the
last several

experience

can¬
didates will be

hitting new highs for the panies in this field include
year.
Highly helpful were Parke, Davis at 12 V2 times
the active consideration
by 1958 earnings, Pfizer, Smith,
the Senate Finance Commit¬
Kline & French and Eli
Lilly

the present

One of the most serious effects
of Senator Knowland's

Murchison interests have

er,

tee of the Forand
Bill, al¬
ready passed by the House,
which would permit distillers

of the News

By CARLISLE BARGERON

vocacy

bets.

sure

their

of in¬

run

of
timing, is almost univer¬
sally regarded as the surest

the

value.

the Fore

Popular with the

up¬

Thursday, June 12, 1958

.

Washington

Ahead

defense

.

.

been

Republican members of Con¬
gress. One asked him, in so many
words:
"Mr.

a

Bond

&

Securities

Co.,

Mr. Gessler has

partner in E. A. Gessler &

Son since

its formation.

*

President, there are
of Congress who

145

Federal

members

with

their election to the AFL-CIO.

and

there

were

not

some

of

us

Rejoins Leason Co.

CHICAGO, 111. — Stanley
If Gardyas has rejoined Leason

owe

whom

J.
&

Co., Inc., 39 South La Salle Street.

Volume

Number 5750

187

.

The Commercial and Financial Chronicle

.

.

National Bank of Brattleboro, the

burgh,

additional Common Stock and the

proposal

Preferred

News About Banks

Warrants have been sent out evi-

NEW

BRANCHES

OFFICERS, ETC.

rights to subscribe
Shareholders. The
rights for Preferred Stock will
expire on June 16, and the Common Stock
rights will expire on
of the present

Bankers

and

REVISED

CAPITALIZATIONS

John

Chase

the

of

New

*

*

,

C.

Adam

announced by

Vollmer,

♦

formerly

Treasurer and Assistant Secretary,

Donaldson is in the United States

national

Bank's

the

At

the

time

same

that

nounced

the

the

of

it.

was

an¬

following were

E.

William
G.
Hansen,
Howard
Palmer.

Gorman,

Jr., Wayne G.
Robert J. McDonald, J.
McGloon, and Langdon

Gridley,

J.

Robert

O'Keefe

electronic planning

i

Y. announced the
election of Mr. Walter A. Mohr to
Mohr

Mr.

James

its role in this
creation of two
positions.

strengthened

*

Daniel

D.

has

who

trans¬

been

Hu

of

Bank

stock of

New York, with common

$1,448,545, have merged, effective
as

of the close of business

consolidation

The

of

charter

the

under

was

JVIay 23.
effected

Security

Real

under the title "Security

from

the

Department

Southern District.

Bank

Mr.

-

Amend, as experienced at¬
torney,
will
handle
the docu¬
mentation and legal coordination
of

mortgage

who

Mr. Dickey,
closely
with

loans.

worked

has

banks, will assist
and
other
cus¬
the financing of real

correspondent

correspondents
in

tomers

estate enterprises.
Both
'

with

will

men

associated

be

Harry A. Yoars, Vice-Presi¬

dent in charge of the

The

Allen

department.

tf

%

Its

-

Assistant Vice-Presi¬

an

Long Island."

of

York

New

pany,

announced

was

by Horace C. Flanigan, Chairman
of the Board.

the

sentative Office in

Tokyo, Japan,

since 1953 but is returning to New

this

York

Allen

Mr.

summer.

the Bank's International
Banking Department in 1946.

joined

-

of

Joseph Singer, a Vice-President
the Bankers
Trust Co., New
6 at the

died June

York,

Mr. Singer began

57.

President

of

Bank

Trust

&

joined

Co.,

ant

Vice-

*

*

and Trust Company,

subsidiary of Marine Midland
Corporation, statewide Bank hold¬

a

ing company, and the State Bank
of Pearl River, N. Y., have ap¬

proved plans for a merger. The
proposal must be approved by

M.

from

New
Assist¬

Vice-President to Vice-Presi¬

Horner

in

business
of

in

Division

Banking
area

is

the Domestic

handles

and

mid-continental

the

United

the

States.

He

joined the Irving early this year
after many years of experience in

.

the

banking field;

in

named Assistant Secretaries

the

International

Banking Di¬

$

Vermont

the

of

Paul H.

D.

'

*

W. Buek

Johnson

were

and

■

.

Berkeley

elected

Execu¬

tive Vice-Presidents of the United
States

Trust
«

-

Benjamin

elected

a

Colonial
York.

of

Co.

S.

*

New

Mr..

tt

-

A.

Louis

Brattleboro,

National
Vt.

Savings

joint
the

released
June

a

that

boro,Vt.,
on

9

state¬
Share¬

Vermont-Peoples

the

of

holders

Brattle-

Bank,

ment

and

of the

National Bank of Brattleboro and
the

Corporators

of

the

Vermont

Savings Bank, at Special Meetings
on June 9, adopted resolutions by
the required two-thirds majority
of the outstanding stock of the
Vermont-Peoples
Brattleboro

of

National

and

the

Bank

required

two-thirds of the number of Cor¬

National Charter of the Ver¬

mont-Peoples

National

Brattleboro and the

Bank

name

*

Haggett has been
Company,

of

L.

8,000 Shares of Common Stock
$25 to $10 by way of a 2J/z

from

8,000

a 50% Stock Divi¬
will increase the
shares
to
30,000

shares.

The

Shareholders

split for 1 and

which

the

authorized

sale

additional

of

shares

of

also

55,000

Common

as

the

New

will be in
charge of the Bank's branch at
149
Madison
Avenue. He
was

.s

Par Value, to be sold
share and the sale of

to

be sold at $50 a

Under
of

the

holders

the

Pre-emptive

present
of

share.

Arthur

wards,

Trust Company,
on

June

the

Common
Vermont-Peoples

7

at

and

Chicago, III. died

the

of 54

age

-

Mr>

Cormac

wens joined the bank in 1939 and
was
elected
Vice-President
in
.j.

By

a

Director

dividend the

stock

L.

Maynard

Unification,
it
planned that the Officers will be

the

*

H.

Paul

Chairman of
William I. Tucker,

Ballou,

Board;

Trust

&

Fred

Officer;

C. Adams,

Vice-Chairman of the
Board;
William H. Richardson,
First
Vice-President;
John
H.
Hepburn,
Vice-President
&
Cashier;
Albert
F.
Marshall,

By the sale of new stock, the
common
capital stock
of The
Union National Bank of Wichita,
Kansas was increased from $600,000 to $720,000 effective May 27.
(Number of shares outstanding—
72,000 shares, par value $10).
*

*

Vice-President & Secretary; H. T.

.

have

yoted

the

Starrett

the

increase

to

a

Corp.,

17th

The

annual

issue

of

the

"Daily Bond Crier" is being pubUshed today. This satirical paper
js printed each year in connection

the

w^h

annual

outing

of

the

Municipal Bond Club to be held
June 13 at the Westchester Coun-

Included

lampoons on the investment

are

Trust Company> Kansas City, and

&
Mo

of

ma¬

also

is

try Club, in Rye, N. Y.

*

Directors of City National Bank

Osborr^ Vice-President & Mortgage
Officer and Valentine C.

copying

Daily Bond Crier
Pnblished Today

*

*

Corp., manu¬

office

Seagrave Corp. and B. S. F. ComP311^

First

$50,000 to $150,000 effective May
28. (Number of shares outstanding
3,000 shares, par value $50).

follows:

as

of

Mr.. Globus

chines.

...

...

Morton Globus

Photocopy

facturers

National Bank in Gibson City, 111.
and increased its common stock from

the

After

banking fields and of regular

newspaper

features such as book

Morehouse, Comptroller.

surplus account from $9,000,000 to reviews, sports, etc.
that all Branch $10,000,000
through
a
transfer
Charles E. Weigold,: Chas. E.
Managers and personnel will con- from undivided profits. J
Weigold & Co., Inc., retiring Presitinue in their present capacity.
They
also voted the regular dent of the Municipal Bond Club,
is

It

planned

of Unification, semi-annual dividend of 400 per
Peoples
National share payable July 3 to stockBank
of Brattleboro,
Vermont's holders of record June 19, 1958.
oldest commerical bank, incorpo;
*
*
*
rated in 1821, and the Vermont
The National Bank of LumberSavings Bank, Vermont's oldest fon> North Carolina increased its
Savings Bank, chartered in 1846, common capital stock from $200,Under

the plan

Vermont

the

under

the

-

of Vermont Na-

name

tional and Savings Bank,

Southern Vermont Counties.

ordered from
Weeden &
New

York

William

E.

Simon,

Co., 25 Broad Street,
City. Papers will be

by a stock dividend ready on the 12th floor at
May
27
(Number of opening of business June 12.
shares outstanding—30,000 shares,

The

par

value $10).
*

*

occupied by the Vermont-Peoples
National Bank of Brattleboro and

the

Joseph Olmsted Joins

*

stock dividend, the cornnion capital stock of The Midland
the present office of the Vermont National Bank of Billings, Mont.
Savings Bank will be continued increased
its
common
capital
a

This year's

editor is Berger Egenes, Merrill
Lynch, Pierce, Fenner & Smith,
Copies of the "Crier" can be

effective

Main Office will be the office now

as

is listed as publisher.

000 to $300,000

Brattle-

boro, will have 11 offices in three

By

branch.

Richard J. Buck & Co.

a

stock

$750,000 to $1,000,000
May 26
(Number of

from

Joseph N. Olmsted, formerly
with Lehman Bros, and Tri-Continental Corp., has become asso-

dated with Richard J. Buck &
shares outstanding—10,000 shares, Co., 39 Broadway, New York City,
Peoples National Bank of Brat- par value $100).
members of the New York Stock
Exchange,
as
Director of Retleboro—Assets—$11,754,000; De*
The status of the two banks

of

effective

as

May 31,1958, showed: Vermont-

posits—$10,323,000; Vermont Savings Ban k—Assets—$31,534,000;
Deposits — $27,506,000.
The pro¬
posed

merger

was

,

By

a

stock dividend, the com-

•J;

v

All

'!•

of

these

shares

appears

The
N.

J.

Union

Bank

Wildwood,

Union

New

charter

under

Jersey,
of The

Wildwood,

of

Bank

.

*

New

been sold, this

announcement

matter of record only.

Issue

300,000 Shares

North American Merchandising

.

*

of

a

N.

Co.

♦

Plainfield
Trust Co., Plainfield, N. J., the
State Trust Co., Plainfield, N. J.
and the Plainfield National Bank,
Plainfield,
N.
J.
approved the
cnosolidation of the three institu¬
tions to he called the Plainfield
Trust State National Bank.
The
Stockholders

having
as

Wildwood,

Trust Com¬

Wildwood

and

pany,

of

search.

in the

given

"Chronicle," page 2516.

June 5

the

Common
(Par Value

Stock

$.25 per Share)

OFFERING PRICE:

$1.00

per

Share

bank will have total re¬
and is ex¬

of $100,000,000

pected to start operation June
*

#

30.

*

Byerly, President of
Fidelity Trust Co., Pittsburgh, Pa.,
and
H. R. Hosick, President of
Potter Bank & Trust Co., PittsJohn

rights
Share¬

#

#

American National Bank

^

Horace G. Ripley.

merged

a

abNational
was

Henry R. Brown, Leslie S. Ed-

sources

$20

in

bank.

Kenneth R. Wells, Vice-President of the industrial division of

following will be continued
Honorary Directors:
-

Stock of $10

16,000 shares of 5Y4% Cumulative
Preferred Stock of $50 Par Value,

addressed

be

Towson, Md.

The

tion of the Par Value of the pres¬
ent

should

liquidating bank
by The Second

J.
changed to Vermont National and and new title of Union Trust
Savings Bank, Brattleboro, Vt.
Company of Wildwood, N. J.
A
was
established
in the
The Shareholders of the Ver¬ branch
mont-Peoples National Bank of former location of Wildwood Trust
-Brattleboro authorized the reduc¬ Company.-.
1
'* -•
r"

Haggett




The

12

Woodward.

of merged

will be

JftSS5«J?35rd3

business

the liquidating

of

care

G.

C.

McClary,

B.

SSgSMS

shareholders

its

of whom

F, Barber, John
W.
Gibson,

Gould

.

in

Bank

were

ien' ?a,ul

d

_

vilODUS Director

*

of the

Ernest

W

at

York.

Vice-President
Trust

Peoples

-

Ballou, President

Vermont

dend,

Charles

%

Tucker, President of

•

*

.

*

William I.

present

vision.
•

May

of

Brattleboro,

.

Robert P. Hegeman, Andre F.
Python and Augustus L. Putnam
,

were

of

resources

about $26,000,000.

the

dent.
Mr.

have

would

tion

Savings Bank, to unify the two
banks by the acquisition of assets
and
assumption of liabilities of
the Vermont Savings Bank by the
Vermont-Peoples National Bank
of Brattleboro.
Under this plan,
the two banks will unify under

promotion of

Horner

State Bank¬

stockholders and the

porators in office of the Vermont

*

the

Nyack, N. Y„

the

when

Company,

Trust

Bank

Nyack

the

of

Directors

*

*

and

Y.,

merged in 1955.

announces

William

a

National

N.

Trust

*

Irving

of

his Banking

Public

the

Bankers

two banks

York

age

in 1926. He became

career

„

*

*

*

the

April 17 issue on page 1722.

Bank

Mr. Allen has been assigned to
Bank's Far
Eastern Repre¬

;

T?/rmS+
Merton

President

Previous article appeared in

dent of Manufacturers Trust Com¬
*

National

ing Department. The new institu¬

appointment of Dwight G.
as

dated

unification..

Bank,

Burgess,

Howard

Na¬

National Bank of Huntington and

Loan

^3

S.

of

c)ose

in

0rpa1» 1958.

H. Ballou,

Seaford.

Seaford,

ferred to the Bank's Mortgage and
Estate

v

Savings

value

effective at the
on
May
26
Liquidating agents or Committee:
A
Menaris
France, Harvey M.
Hale and R. Parke Plowman, all

continue

Bank of

n

The Fort Neck

and

871,110;
tional

Dickey, Assistant Vice-

President,

of

Bank

t i n g t o n,
Ne w
York, with common stock of $2,-

Huntington,

Amend, who has been promoted
Assistant Vice-President,
and

to

resolution

sorbed

and

par

$100).

^volu^Sion*bH

Park, Jr., C. W. Reed and F. H.

Filling these positions are Daniel
G.

sis

*

iU

*

National

Directors of the Vermont National

0n

standing—2,000 shares,

rarkton Maryland with cQmiitien Sutro Bros. & Co members of the

of the
Vermont-Peoples National Bank
of Brattleboro, to take office as

Graves,

National

Security

through the
executive

new

Inc.,

Talcott,

factors before his retirement Jan.l.

*

in demand for
financing, The First
National City Bank of New York
field

Senior Vice-Presi¬

was

of

dent

estate

has

Bank.

the Board of Trustees of the

With the upturn

real

Jr.

-

$100,000
to
$200,000,
effective
May 28 (Number of shares out-

surviving

*

elected by the Shareholders

N.

Brooklyn,

will

Brattleboro

following Trustees
Vermont
Savings Bank

Bank,

Savings

Roosevelt

the

of

o

a

The

ft

Schneider

Adam

T-. ■

office under the

Wylie, Assistant

*

*

President

officer.

«

*

named

was

Bank,

°f

Treasurer, has been elected Treas¬
urer and Assistant Secretary.

appointed Assistant Treasurers of
the
Bank:
Roy T. Abbott, Jr.,
James

Savings

Dock

Dry

New York. Robert

territorial organization.

.

mon
capital stock of The First
National Park Bank in Livingston,
Montana
was
increased
from

a

institution.
The
Bank would have total
resources in excess of $325,000,000
and deposits of about $280,000,000.

present Directors of the
Vermont-Peoples National Bank

has been elected a Vice-President

department,

„

'
The
_.

announced

a

merged

Securities, Inc. will act as DealerManagers in marketing the new

*

George Champion, President. Mr.

the

^^son'&Curtis^and' Vermont

Company.

Bank,

Manhattan

York, it was

Vice-President of the

a

Commercial State Bank and Trust

Vice-President

Assistant

to

urer

formerly

Treas¬

Assistant

from

been

has

Donaldson

E.

promoted

for

statutory merger
via an exchange of stock. All outstanding Potter shares will be
exchanged for stock in Fidelity,

the

dencing

CONSOLIDATIONS
NEW

Stock, will first be ofShareholders,

fered to the present

have

Pa.,

A.

McDonald, Holman & Co. inc.
70

PINE STREET

N. Y.

NEW YORK 5,

\

J.O

me

THE EDITOR:

TO

LETTER

On the other hand, unfortunately,
State has injected itself into

,

commodities

the
the

Advocates Unrestricted Private

lower and

/

uniform fractional

more

^

A

Social

,

'

v

sciences
away.

"

The

;

rately

port on "Member Bank
serve

based

Re¬

the

Require¬

ments"

found

•

a

ceptive

1 i

c

-

it

would

thrills

to

alyze
the

in

of

un¬

derlying; the

revolve-

report*
The

pal

U<

princi¬

D|

recom-

JUilauuncll

.

;

_

that

ages
should be reduced over a
period of years from the present
average level of 16.5%

of net de¬

mand

deposits to 10%and that
eventually there should be a re¬
duction in "reserve requirements

deposits to 2%."

v

<•. The
report apparently assumes
that any questioning of the com-'
position of reserve is beyond; its
purview.
It is unfortunate that
such a position is taken as by so

doing
ities

it-ignores economic real¬
adheres, instead, to a
juristic path.;'
1* *

and

narrow

-•

After

all, the Commission is
properly concerned with the fact
that the "present system of mem¬
ber bank reserve
requirements is
not well adapted to

present-day

conditions.'1- It points out that "the
chief function of member bank re¬
serve

of

sun

was

requirements is not to

around

our

<

con¬

surprising that it

ap¬

parently did not feel that this is
the

time

to

make

intensive

an

study whether this change in the
function of reserves, from that of
protection to that of being a ful¬
for

crum

is

a

wise

monetary manipulation,
one

or

not.

Banking

^

;

Certainly,
that

it does seem
certain
fundamental

tions

should be studied,

is

the

proper
of

nature

as.

time
ques¬

What

composition

and

reserves, who should
control and maintain the
amount
a

bank

should

carry,

and

what

functions, if

any, the government
should have in the field of
bank¬

ing.
to

Possibly

these

"the

needs
;

of

The
are

definitive

queries

meet

might

answers

help

to

monetary and credit
growing economy."

our

fact

not

that

the

the

the

most

social

sciences,

the

such

questions

J

analogous

one

that

Had

were

initiated

by

banks only

make

of law, and

prise

exist

forests Where

in

private

enterprise,

be

out

in

exchanges.

should

Private

regain

enter¬

control

over

the

coining of money. A step in
right direction is the return
to the gold coin standard.
That,
after all, is really a means of de¬
fining the monetary unit, and at
the same time binding the hands

no

would

"of

easier^to

actually

definition

the

the

of

business.

manipulate

of

function

were,
no again for the simple natural
rea-7
been
created' son
that
it
made
it

have

government

be

Unfortunately, it is a tendency
man in seeking to correct con¬

remembered,

government

it

so

is

will

But,

money.

not

it must

whenever

concerned

the

with

a

ditions caused by man-made laws
to pile more laws on top of the

thing, it has a tendency to build
an
empire of it.
Therefore,; as

original

soon

the

ones

instead of removing

;trouble-making -laws

gether. 'Such
with

has

been

the

as
possible, even the defin¬
ing of the monetary unit and
coinage should be taken from if
and put back into the field of
pri¬
vate enterprise.
'
V
^

altocase

banking, wherein- the Hocal
trouble in

laws which causedth'e

,

the first place were succeeded by
iaw& of higher legislative bodies

Banking

and

credit

also

are

functions
of
private enterprise.
by the government of that \intil
finally the Federal Govern- and they, too, were the natural
money, banking and credit which
should be private enterment stepped in, and it has com¬
actually revolve around the indi¬
outgrowth
of
the
unconscious
prise.
;
'/ ;• >
pounded
all the errors which actions of men who were seeking
vidual, and he controls the mon¬
,
etary
mechanism ." through
to put their money in a secure
the y Unfortunately, the report does have gone before.
v Those
medium of the marketplace. This not seem to recognize that our
who assume that money place.
Putting their money
means
that money and banking banking system has been social- ancj
banking must be managed by safekeeping with goldsmiths
lzed
although it is obvious, as SGme
are
functions of private enter¬
small group of presumably -to the issuance of certificates of
most
of
the
banking fraternity dedicated
prise, and under the control of the.
men,
operating 'under deposit, which led to the issuance
individual through his patronage are in the unenviable position bf man-made
directives, probably do of promises to pay money, noW
or lack of
patronage in the mar¬ having all their actions prescribed, not appreciate the true grandeur called banknotes, and the gradual
ketplace. The interference of the by the government's bureaucratic and scope of the world in which creation of banks.
i
agent, the Federal Reserve Board. we
State
does
not
alter
this
fact,
iiVe, not the wisdom With
It
cannot
be
emphasized too
It is precisely because of the which
though it does. restrict the. indi¬
the wdrld is ruled by Distrongly ..that there is only one
vidual so. that his control is weak¬ bankers' subservience to this bu- Vine
Intelligence. T h a t Intelli- efficient, sound and just system of
ened and becomes less efficient as reUucracy that
they are forced to gence, knows how: puny men's banking, and that is one
which is
a
result
of
the
confusion
into prepare this elaborate report, brains are, and
that, therefore, composed of strictly independent,
which he is thrown
by the State's which amounts to little more than, men Cannot trace to their ultimate private
banks, answerable only to
manipulations. ' 1.; a petition humbly begging that
conclusions; nor comprehend, the their stockholders, as all busi-^
It is no more a function of the changes be' made in reserve re- total : effect of their actions on nesses are.
Under such conditions,
quirements.
State ' to- regulate
It. is., undignified other men.
the banks are
money " and
actually under the
'
banking that it is a function of the that the bankers should be ptit
control of the man in the
>t
~
•
..
.V j
street,
StateV to regulate- the growing in such a position. The question . Conditions of Perfect Freedom
who by his
patronage or lack of it,
of how large a bank's reserves f
and marketing of onions.
The only way men can live in
determines which banks will exist
Possibly
had the report shifted its atten¬ should be is one which the in- society in perfect harmony with
and which will
rection

that

-

.

-

.

..

•

•

,

*

,

.

.

.,

„

dividual

today.

It has

-

the
-

*

na"
•

-

instituted

concerned

should

one

another is when

they act and

{

.

-

■

istic controls

been

estimated that the
initial half point reduction in re¬
serves

not.

bank

-

.

tion which are
sweeping
tion

^

Enough time, has elapsed to
determine, not some centralized react in spontaneous unconsciousdemonstrate
to
those
who sin¬
authority, just as the amount ofness under conditions of perfect
cerely thought banking and credit
inventory a businessman carries freedom.
Their actions and recould
Operate- efficiently ' a& a
should be determined by himself, actions in
society can no more be socialized
institution What a iernot
some
meddling bureaucrat, under them conscious, deliberate,
'rible failure it has been.
As a re¬
\V;hat a- ghastly mess things would - planned r control
than
can
the
sult of its
socialization, such a
be in, and will be, if Such socialbeating of a man's heart be under
ing

as we

have in bank-

business.

\

;

; sound commercial procedure as a
bank putting its

his planned control. The activities

permitted to permeate all

are

of

men

in, society

are

too

corn-

worthiness

back

superior credits
of
short-term

Plex and too far reaching for men
self-liquidating commercial transd¬
Reserve Board
It should be
recently, released
apparent now that 1°.-be able to ^direct them conuctions, in the form of banknotes
a
half billion dollars in credits with the
inception of the Federal sciously. But, in the furtherance or demand
deposits, has been per-j
which when they work their
way Reserve System, America adopted of ih.eir Dwn aims> as. lon§ as ih.ey verted into an
ektremely subtle
through the banking system will a system dealing with a phase of. a.c* ln accordance with .the prindevice
to
create - irredeemable
amount to six times as
much, or private enterprise totally differ- c*ples of justice, their actions will
purchasing media. Thus it is that
$3 billion.
This and subsequent ent from that under
which-most *ePd *> ** in- perfect harmony the Federal Reserve
System has
actions of the board have been other -businesses
-are
conducted. ;wlth their fellow"men s- ;Thls ls been called an
engine of ihflation
bad' enough, but
the expansion Manufacturing, mining, trade are because,
though - they are - not though it might more
under the Commission's
accurately
proposals carried on by private individuals aware of it, they: are really acting be described as a gigantic prints
would be rhuch" more fcerious. -all seeking to make a
profit with
accordance with the directions ing press
poUring out money-sub-:
Our nation is- at a crossroads the customer as
the King. -• No ar-v of
Divine . Intelligence,.-which stitutes in the form of 'Federal
too serious to permit the
easy acr
bitrary Commission, or group of makes no mistakes.
Reserve Notes and demand de-i
by

the

Federal

'

r

.

-

-

•

-

,

ceptance of old modes of thought.
On the one
hand, in the field of

the

natural

veloping

sciences

tools

and

we

obtain

the

life.

men, - or bureaucrats
determines
who shall make cars, what
cars

shall be

de¬

man

shall-

tremendous

be

16Y2%

to

material requirements

Our

made, what prices shall
asked, what reserves of ears

be

instruments

which make it easier for
of

are

or

be-

inven¬

'

maintained,
whether
10%, nor how they Shall

distributed

proach
lacious

our

Society's

approach tb the whole problem of
banking and credit.
It
may be that this erroneous ap¬
is

important

marketplace where they could do

anddi-

telligence to arrive, at answers is
permitted, unencumbered with the

in

would

could

State

money,

may be in¬
dicative of the fundamental
phil¬
error

laws.

business, being
merely devices for unscrupulous
men
to
make
profits ' through
chicanery.
The only banks that

important
sciences is

geographically,
This is all done by private individuals, and they are guided by*
th'ey are conducted 'under the King
Customer, who directs them
aegis of private enterprise, where¬
by-buying or not buying. ? 1 ■

entertained

osophical

money

and
coining, money,
which many assume was always a
function of the State, actually was

businesses

they could do

natural

control

which

existed .hidden

a governmentally centralized
banking system is a socialized
banking system, as the essence of

the

The

wild
resulted in

for .further

other

which

But

is

banking,

within the

has, to
the limit that it could, gathered
money,
banking and credit to¬
gether into one centralized ijanking. system Controlled by itself,

socialism

as

stamping

banks

sci-

■

mechanism

-

Would Keep Government Out
of

of

of

social

requirements which, quite likely,
will add fuel to the fires of infla¬

little

a

is'

social

wonderful

of

banking been let alone to develop

grow

the

or

consciously, much less control it.
It
is, indeed, a gift of the Al¬
mighty.

as

the monetary science. In keeping
with the trend to intervene in the

State
must,
therefore,
monetary affairs through
political action. But the truth is

is

.

a

but

When

subordination tof

phases

ual, it might not have .come up
With recommendations on. reserve

liquidity

as

can

can

weight.

treatment

man

of men.

particular goods and services they
wanted. No group of grey-beards,
flanked on every side by statist
ticians, monetary experts, econo¬
mists ad infinitum, came up with
this commodity we call money as
the
solution.
It
is
beyond the
capacity of man to create such a

started

demands

break

OneJ

;

the

the mechanism of
monetary man¬
agement." That being the case, it

bank

serve

sciences

own

any

They did this because they knew*
they could then more easily ex:change this commodity for the

entire

structure

erroneous

cat

the growth of the

on

interest in pursuing them.

and

fixed part Of

to

wait

sciences to the State, but lack of

tion from the State and
placed it
where it belongs^ on the individ¬

tribute

rather to

social

the

the center

the estate

adventure

whole

of

local laws led to excesses, as

of

down, the ensuing
wars,
revolutions and disorders
which occur not only bring about

control

•

mendations uf that report are that
member bank "reserve percent¬

for time

center

vistas

new

the

cements

not the cdn-

was

in earlier days
when local legislative bodies un¬
wisely established laws controlnng banking and credit.
These

for the
civilization

our

and

much

ences

Analogously, the Commission
apparently accepts without ques¬
tion
the
fundamental
principle
that money, banking and credit

funda¬

mentals

the

not for

was

private enterprise to-

Our

space

aborning

of

that

freedom.

of

universe, and the descrip¬
tion of the circuits of the planets
then became the relatively simple
formulations used today.

an¬

some

accu¬

which

banking

travel
imagination of

the

die

such

so

of

only
when operating under conditions

of our

ap¬

be

to

pear

the

Their whole system was

truth that the

being the case,

order

was

It

be made to fall of its

;,vV

growth of the social sciences. And

properly thrown into discard when
Copernicus demonstrated the basic

re¬

That

mate.

earth

binder

natural sciences a$ they do on the

planetary motion
premise was
the false assumption that

universe.

have

business.

It

creation

Men naturally ex¬
changed the special article thfey
produced for the most marketable
commodity
in
the
community.
group

that Karl Marx in the
Communistic Manifesto advocated
the centralization of banking and

gether—the

/

■

■

complexities

describe
on

scious

nothing

structure of

will

man

their fundamental

as

jsm

Thursday, June 12, 1958

and services.

which private

upon

...

goods and services for other goods

an

system is the precursor of social-

.

■

State that the nat-

prospect

which

not

re¬

j

.

nimity,

ural sciences

Editor, Commercial and Financial der to describe the motion of the
Chronicle:
planets, they constructed ingeni¬
Recent events indicate that the ously complicated cycles and epi¬
which while they gave
recommendations of the Economic cycles,
Bankers Association in its

is

cannot look with equaas
a
socialized banking

have, or the natural
will
begin
to
wither

dom from the

j;

can

»

the social sciences obtain the free-

knowledge

not

have

we

and
of
restriction
and credit in the hands of the State,
retrogression in the social sciences Jle knew .this was the easiest way
long continue. One of to socialize all enterprise for by
the other must give Way.
Either diluting money and credit —the

are

could

alarming fact

—

This

—cannot

wherein it would define the monetary unit.

answers

x

money

socialism.

they»enterprise

Natural and

in

Sciences

—

financial Chronicle

ences,

with "the fundamental philosophical
error in our Society's approach to the whole problem of money,
banking and credit." Mr. Jobannsen prefers that we dispense
entirely with our central banking system and declares "it is
no more a function of the State to regulate money and banking
than it is a function of the State to regulate the growing and
marketing of onions." Writer terms what we have is a "social¬
ized banking system" and a "precursor of socialism in all busi¬
ness." Recommends private enterprise should regain control
over the coining of money and operate under a gold standard

some

adopted

Sciences,

V '
This
dichotomy — of freedom
and progress in the natural sci-

for failing to part company

Policy Commission of the Ameri¬

Social

Sees Dichotomy

behind deposits,

reserves

the

of

which is the principal reason
are in such a mess.
"

Control Over Money and Banking
Contributor condemns recent ABA report, which recommends

field

commercial ana

to

the

fal¬

astronomers

adopted before -Copernicus. In




or¬

tions, discoveries

are

in

the

result

of

and

the

production
fact; that

the free exercise of man's

bureaucratic

interference

of

in¬

the

■omnipotent and omniscient State;

*
.

~

:

-

.

A Precursor of Socialism

Unfortunately; in
which

has

as

its

material the most

' b a

n

k i

principal

<

-

-

•

•

politically: appointed
monetary scious creation of man, but rathei*
authorities, who are ho better "the result of Divine
Intelligence
equipped to determine what re- working through man. As
such',
serve requirements should
be, nory money, banking and credit are not

-to foretell the future than any of

them.

-:

v

...

fnere

mundane aspects of man's
but rather contain within
themselves A bfeauty and grandeur
which is the product of the
same
Author Who cteatCs ihe
ihdesCrib-

life,

-

Trie

n:

simple fact is that money
g," is a function of private-enterprise;

raw

important of all*

v

* Some
comprehension
of
this -posits.' •'
' ' iv i
fact is dimly perceived by men at
Even
the
most
perfunctory
such times as when they feel how study should convince
one
that
undignified arid frustrating it'is the
gradual
evolution
of ' the
that they should wait with bated world's
delicately precise mone-breath upon the actions of some tary mechanism was not the con¬

It

came

into

men- -wished

existence
to

because

exchange^ their

4

able

beauty Of

a

Tlaming

sunset.

land Power-common stock, Will be

demand

to

here

and

of man,

and

there

-

is

supply,

-

darting

example of the Harmonious
Spirit ruling all as is the fault¬
less harmony of a nightingale's

an-

song.
Man

the

touches

mirh

at^

Almiehtv

tinker

creations

his

of

nerii

To

the ?nnntaneons
uiefcpoiiwncuuh

with
wnu

uiuvei

New

fit -the" needs'

to

exquisitely graceful

as

iiar-

har

England fur. Go.

Offered to Investors

to the

100%.

short

delicacy with which money*
arid credit fluctuates in response

prices

applied first

The

note

-

terip

payment of
indebtedness;

ranging from

102.66%

to

,

any balance will bemused forcapital expenditures or to reimburse

Blaclc Exhibit

Baron

„„

T

T

o

CORRECTION
In the "Finattcial Chronicle" of
'May 29 in reporting that EmUO A;;

Legros had. been elected a? direc-

w-V«

.BEVERLY, BILLS, L a U f.. —; tor of Textron,; Inc., because a line
Baron, Black; Kolb & Lawrence,, of type was inadvertently dropped
Offering
of
$10,000,000
New
New England Power generates Incorporated,
253 North Can on from the item it was' indicated
England Power Company 4% first an^ sells electricity in wholesale Drive, have taken space in the that First Cleveland: Corporation,
mort§age bonds > due 1988 was quantities to other electric utU-.gaUfornia ..Home--Show,- at the Cleveland, of which Mr. Legros is
made on June 10 by Halsey, Stuart ities doing > a retail distribution Pan Pacific Auditorium, June 12 president, had become a division
& Co, Inc. and associates at business and to large industrial through June 22 for an exhibit to of Textron. This is not the case,
io2.655%

and accrued

interest, to

the

for

treasury

such

expendi-

lures

consumers

It

has

no

residential

emphasize the tremendous growth

The

item

should

have

rend*

"Mr

*ield 3J55%- The Bering group ^SESkcW customedOpe* of America and stimulate greater
f^dom
al wasi awarded the bonds June 9 on ating revenues in the 12 months interest in American industry.
' ' V
P. ®\^,d*"
it
would
he
to * tinker
with
a ^
■ ended March 31 totaled $53,581,706
Some of the unusual features an^ ^lrec^or
^ e
hidhtin«ale°s i itS-JL
Net Proceeds from the sale of and net income amounted to $7>- of the exhibit will be five foot land Corporation, Cleveland, Ohio,
.^sSle A
Sh fS£ the bonds, togetiier with approx- 958,325. Fixed charges during the models of the Nike and Thor and was formerly Chairman of the
eral Reserve System is a tribute
redmLfn'Sffi
pe£?dy"erf *fntd 6,<S tln??s;
^ided missiles, the new DCS jet Board of Fanner Manufacturing

banldi^

a

as

th*»

to

iffnorancc-

~ignorant

maii

arrocranco

or

not

he

i

? common stock issue to be ^md

of

The bonds will be optionally re-

km^ that y the company to New England deemable at ordinary redemption
a^perfect Electric System which owns all prices ranging from 106.66% to

to

has
been
given
monetary mechanism if he Will currently
only let it alone to develop natur:;ally; arrogant to -think that he
could improve di\ the
workings of- :
the Almighty "by invoking the aid.
i
t>f the State./
' y. V j *•

outstanding New Eng- 100% and for special purposes

passenger plane, a solar radio and
an
exact model of the Satellite

^ fhn qo^uh«
Explorer in orbit over the exat hibit.

a

^

Company, which became a division of Textron, Inc. on Jan. 13,

-

-

•
Sooner or later our socialized*
system of banking must come to
an end.
It will either suffocate to

,

death

it

as

is

with

bound

_

more

socialistic red tape, or it
will break out of its fetters to useand

more

; ful life.

If banking is to become
healthy force for
the banking profession

live,

a

virile

growth,

"cannot continue to submit

■„

meekly

to the rule of the bureaucrats.

.

..

It

must

- stand
up and fight for its.
freedom, and in. so doing it fights
for the freedom of all of us.

.

1

Rather than dissipate its energies
On such reports as this one of its

Economic

,

1

Policy

Commission

.

,

in

vain endeavor to adjust itself to
the control of the State, it should
a

boldly proclaim

its

aim

to -free

-

itself from the shackles of social¬

ism.
To

implement

j.should institute

this

action,

it

great educa¬

a

tional

campaign.
The
bankers
V themselves must learn the full im"plications of unrestricted private

s

control of banking, and must not

I
v

;
.

,
'

Be afraid of it. Possibly they will
have to unlearn a lot which they
have accepted uncritically. Above
all, they must educate the people
the

absolute necessity of pri¬
enterprise in money
and
banking if our civilization is to
progress.
"
/

to

vate
'

•

It will not be

great

,

-

fight. Too
vested interest in social-

a

an

easy

istic control has been created not ;
/ only in the government but within
;

,

the banks themselves.

be done if we

;

grade.

Our

'

system is

a

are

But it must

I

not to retro¬

socialized
cancer

banking
spreading its

fibers throughout, so-t
jciety,! which it ; will . help ultimately to destroy if allowed' to

*

cancerous

.

'

1

*"

continue.
'

.

Visionary to dream that money,
can be taken

there's

banking and credit

from the hands of the State? Was

;it visionary to believe that tat¬
tered Colonials could wrest their

The newscaster who brings a summary

'

could rule themselves and trans¬

appears

form this land into the mightiest
all

to Cities Service

than meets the eye!

freedom from mighty England?
V^Vas it visionary to believe that
'. Simple farmers and merchants

of

more

civilizations?

the TV audience—are

Visionary?
Freedom is always visionary, but
.' freedom can. always be won if
;;pien will but fight.

made his program

.

of the day's events

alone on this screen, but behind him—unseen

by

thousands of men and women who

possible. They include the people who

designed and built the facilities of TV

transmission, cam¬

'

f

O. B. JOHANNSEN.

eramen,

;

825 Walnut Street,

!

Roselle Park,. N. J.

technicians, script writers, directors, producers,

newsmen
,

.

V *

.

:

-

throughout the world, and many others.

provide the motor
a host of people
who must find and produce the crude oil, refine it, test it
in laboratories, transport it to distributing points, and
finally deliver it to the station tanks to await the cus¬
Producing gasolene is like that. To

fuel/which flows from pump to car

:;

Phillips-Gakney Co,

.

Formed in Jackson
JACKSON,
Galtney

Miss.

—

&
with

formed

Company
offices

in

Behind the

Phillips^

has
the

even

been

show is

are

Nichols, Jr.

and Robert

Mr. Galtney

was

/formerly with Kroeze, McLarty &
skCo.
7

Mr. Phillips was with Scharff

& Jones, Inc..




In the

case

of Cities Service, one of the

oil companies,

—to say

William F. Galtney,

Secretary-Treasurer;

tomer's order to "fill 'er up."

Writer,,
-

more

nothing of the fantas¬
equip¬

tic network of electronic
ment

President; Logan Burch Phillips,
G.

at least one

producer, director, camera
crew, prop man and engineer

in the securities, business.

Officers

performers on
simplest television

De¬

posit. Guaranty Bank Building to
engage

the

"

that transmits

efforts to you.

<

their

requires

nation's leading

all this required a capital investment of

is

well
vital to
living-second only in importance to food itself.

than

$179,000,000 in 1957 alone. It

money

invested, however, for petroleum products are
modern

£

Continued from, first ppge

We See

But

Asia, Southeast Asia, and the Near East, tjaey
Will feave won the battle for the wprW ;
V \ V
!

-

;

There is pne

is that

.

'proved

-mote true economic

system has inherent advantages over our traditional free ::
enterprise. We—or some of. us—fear the competition of ^

that
if

world

and

convince

soon

are

to

more

and

markets

.

ourselves

everywhere. :We

has any -better- system.

.

our

may r.est assured

that

no

effectively than any sort of socialistic or com¬
If we lag,,it will be because we refuse to

%.i% ;■'

■

in

result

3

page

r

;

but

A New Look at Investment
he always felt he could not admit

It

to

seems

its

volume of

output.

value.. I

of

worthy,
secondary

neglected

now

10%

/n.

client

a

until

expect

you

will

hands later at

the

r

and

thus

also

foster

their

he

must

be

The

take it off your

An

a

permanent

a

and

static

stock

of

considered that

doubt that Russia has been successful in
producing
huge amounts of armaments. It appears about as well
established that great
progress has been made in what is
known as the industrialization
no

r

a

measure

Too

principally what we are eonsideling here, are owned by sornebody- Who owns them when you

WQy&pP■PQpf&'P&l.bpuijlate
and his realized profit.
The question.
at

a

i? -p.pt bothered by
retail profit as re-

in -.the-

js

of bonds

case

was

Much Keeping

dis-

disparity

forced by

It

that

appears

muchTi^keeDinc
^neSes,
"Favorite

p^tective

and

where

there

is

too

with tho Dow

a

common

umbrella.

and

The

group's
is yastly myerratftd;
issue
is
exceedingly

an

oonular

ud

■/

-

V finding Z

Fifty"

$. p^upafy- gignificauce

-Yet I do not think jt is
the
training

^textbooks,

Up With

Dow Joneses

.

of

over

selling

the

are

p^-'aQcumulate "and who you expect
fprmance. We would look at .what will
eventually take them off your
he sells and how. much of
it-We hands
wh;en ypu .are • ready to
Wl®®

Eco-j

public regulatory authorities,

W"»ry QiwstwmRaised
All listed seasoned stocks, which

goods and marked it up and down
as
a
price levels changed, and

particularly one which is managed by n small
group of men directing all economic effort,
might well
grow spectacularly over a period of years and leave, the
people less well off rather than better off. There can be

of

riskier ones — to their o\yn
advantage. Mimh of this
in

storekeeper who laid in

Bureau

have similaily overvalued high
grade bonds and undervalued the

,ir

riot*1as'anafysts'tbhik1 very

much of

National

profit. Remember hemic Research has just puplished
there—he must
be a study that reveals that investors

have

..

;

a

a

as

m

would

economy,

the

and

classes

nosition

is

verv

thguatw
in the sch&ols. big it often
placement / priee^.
of the country. The real
a^vanpp. Ifc. In fact,, jt is one of THE primaiy
fs 0ne issue that did
parficuquestion is, though, how rn#cfr progress has been made re.ahzes the value pf ,keepnig b^ nue.stions.
;
- larly well
anci was not Uquidqted.
stock tresn anq. popuiaki fi
m
supplying the rank and fite wife what they really
As an ideal example, imagine a Its
position seems large due to the
wapf •
4s we see it, it is people themselves who decide and
ought to depute through the free oiarhet
jdaoe what is to
be
produced and in what amounts. 4od ?t *s ^ fee OPOOf ;
omy ivhich is capable of
reading fee mouhing pf what ^

Xirsi^ifietS

.

\

,

takes
place in these free mafeefs and of auppjyii^g goods
and services hj the. quantities- feat -fee
consunw.s feomselves docide is required op neededAdd the. tnoaaure of

fhps secpoty

..

w

Wgarded

triio ego^iomic
.grpwfe
opts are brought into

is fee degree fe wliiph £UP'h MM-:
being add plaopd iu die hands of fee /
pooffe There my or may not he good dm} eomid military
t-easona for ummmss
ahoutvthe rafe of what is eahed
econonfe advance in Russia, hut fee growth of fee econ-;.

•

porffeji^ should

-'tkmr
Sf>mepitnu^ Id Md

jn/gjc^fly-Uid'

it
;Uiato ih
wifS

there

sinli

are"mTinlv

inrestment

rP&f9rimi<tes\'during -The

fundamental greater. p.aft of ihe\bulJ market
a^bauge. ;It may ^vere * .very good* Hb\vew,
be ngw,
feabfie pfPlitable action occurre^;feirIng
possibib^s .ahead:
fee eemioniie situation,-,or oiie h paTipular perioch and
thepeT?
omy of that country measured in
>^
¥ ;W£,-#mafiy ipa^dhs- ; 1 • '
no reason fe befieve that the
fen.
output of goods fee
people would lihe to have may be
'
Tf ybju. aie rigfe, fee develop- fimhentafii economic factors
quite afwthcr story. e^ops
|h^
within the eompa^ -whieh caused ^situationtwillhoMkm
That governmental or
political iideridrence—to say 'antkipaied will.tgdfe plaee <or in.the,fetnre-.
.*<«
?
nothing of ^ernmgntal or
b^kVO feat
i^lifeal control^nay
" kfWter Imaking large if yntf feb fe begiq fe, he- ' Anticipated by " a' The "JEayori^ Eifty" 6f .l9jS4 are
aim at
does often
profits, you
bring the wrong products, into.being is clear
.;wideiiing numberi.Tney will* buy, not, going to be the^game VFavorite
w>U 'Tarely keep your capital'
Safe., _i_the.
price will advance—activity
enough in the history of This country
Fifty "-we know in j9p7; '.41b one
during rccept,dec¬
(5).
ades. We boast a
0ye?d|ypjpsify:v Large \vill< -increase. ^Others > will, be. has to dp is to. look
bapk ;% few
29f)% ^•growth" hi fee national income
fOffehe^
f- built.7 on^' attracted one by one.^^Tape readers
of the
years to 1S50 fe get an
of the
diversification. .This
country, from 1929 to 1956. What we sometimes
practicefand chart, readers, fipor traders,4^ of ^changmf
fail to realize is the fact that
T^o-ffeha, or
breeds .average results, and aver^ the sppcialist, board
national ingome
room feaders,
origlhafuig
^I<rofeievTiet..fe feose
in
fdp
^success in :*an4.so forthi Tbp -uRim.atie nuyer dayaiis
agriculture — that is, the net product of ' our' farms
the
.

ifinited

r

■

,/OV_

.....

*'2Ltimisf

^

%

,

..

,

.

measured

elements

in

in

what
the

is

stock market.

known,

as

factor cost

as

all other

/.„•
wbo ^iU -take your stock off yoyr 6f e«>uise;
feat, means that almost
(6) Consider the ultimate con- hajgids at a profit,may. be:aiiy one>
baif of'fee Tayorfies A04«y TWO
aiifeey of yow stock: There js *a
4 Aumber of these..
good enough' b»ck
finm tested vmaxipuiin fe- Wall
..vySituat^uS'like,-feis#}bvary. Not in fe50.
^
Street feat. I ir?F0n't
b^ard. men-MnfrenuO.utly you m»y hdy anon- v
IVi.
»
tioned in recent years.^NoivhaS'it
diyiden^ payfeg;stQck and ^feui- •» j
■>
•
been given any spotlight of imdate #t as a dividend pi»ynr^ to - The apn^pf ^ feye^fineut manin
portange fe I foppnf - feye^tment
bujqers \yho seek fecome.
^ - % agers _and ,advisers sfe>u|d bg .fe
,H
°
ing.
And- thp
fee
saying
is,
y,, a' nuisheU, sucggs^l f^yest- 'ea4 ratb£r than
V$tocks were made to sell."5
follp\yr and to
inejit oy suct.'s^ful luauug^'Jneut or buy on uuticib^tion r^thgr thai,
>

.

are

measured

—

:

rose'

nearly 95%, and that a very large part of this increase in
output has been unwanted either at homo or
abroad at
anything approaching true market prices.
4 substantial
part of our growth oyer
those years js thus represented
by the production of articles
worfejess, or, nearly worth¬
less. at least in
these amounts.
-

.

.

'

cjx

„

us not forget
either
national income also
included

"service"

thaf this 290% growth in
labyrinth of govern¬

-

a vast

Could Jt

received

-

f

he

from

'

succps^ul s^urity analysis

.

^fer^nce to

feat
stock

be' supported by

should

realization.

/ -. ;

-

""

•

;

gr^afei underWe/should adopt' a new apstanfehg offee market on fee part proach and jg new freedom
fewafe
fee;. dollarst of investors,7ja»4l ^Pa^ wfeing-, accepting fegses.i Losses
feould hes
a

-

.

sales

have

ness oh
mdmg&s. to. aooopfed .'.on -an investment basis
fellah fefe siuSi few repute that steer
away from the popular and when situations do not
deyefep ar
sfeyks are being held for no the orfebhox. " " ' "
; •:
• anticipated*, not on', the basis
o;
better reason than that the Towner
s
'•
how a miblished nortfolio or reci
bow a published portfolio ,or -rec*
does -not -want dollars?- v."-M.I.P. Purcliascr's Record Found
ofe mifet appear^ or wh^t a elfenf
It is far worse to own a
: j
Setter 4....
bad. ;
"might think. Jf we do not hawe
shapk #jan ,a h,ad dollaf. Dollars
As an e^mpie/let us examine the courage-of our own
conyicy
}0 rpcent yeare h,aye b,een deprethe
groui, of icu^ties known as twos we are never going to bi
ciatmg at a rate pf abput .3;to..-4^-^ji« ^Favorite
FiftyI think "it
to truly use our. abilities! J
A year,
^tock values can

many

~

• -

.




y

JJWWS.r

which enriches no one unless it is
political appointees. If
we take only the
wages and sala¬
ries paid out by
goyernment, we find an increase of 700%
9Yer
span, of years. Of course, a substantial
part of
this
increase reflects the
larger defense organization
wmch we must maintain
in these perilous times but fee
increase in the number pf
men and women and
the salaries
they drgw for ah sorts pf
governmental activities and
supervision of fee citizens pf this land of ours is
startling
to say the least.. Nor
must we pyerlooh the fact that
through various kinds of
"insurance," "guarantees" and
the like,
government in this
country in recent years has
,

.V-.

WW W

Marc Government
Let

mental

-

-

.

national- income

,,

;

.

It
would
indirectly
increase
liquidity
and
foster
reasonable'
cost
financing for smaller corpo-

usually thought willing to pay a price that to you
good place to start is high because you expect to sell,
retreating, but actually each case You can not intelligently leave
has to-be judged on its own merits." that to chance.

that

us

to

security jn question had lost half

might
outstrip free enterprise.
But does such a concept of
growth have any very valid meaning? Is it not essential
mere

mistake

a

doubt it at least over a considerable
period of time—that some sort of collective effort

is involved than

for

many

,

we

right things be produced?

ratios

faster growth.

But what is this
thing we call "growth"? Is it merely
expanded volume of production? Is it simply larger out¬
put per capita? If this were all that is involved, it is pos¬

more

*

them

veer

PE

for

shares.

rations

that the

lower

ratios

proved

What Is "Growth"?

much

that

n

of the old leaders and im¬

many

traditional system free rein.

sible—though

-

somewhat away from their stand¬
ard choices. This would in time

one

survive the

munistic system.

give

A

'iSfbfy

competition. For our part, .we,,
have not the slightest doubt that the free
Continued from
enterprise sys¬
tem promotes
growth—healthful, beneficent ; growth—'
far

most

as"gilt-edged W' many" c>hie>;
^fe.-believ.e.V;v %%

growth is simple enough—and effecStockholder-c d u c a tip
t'ive enough. It i? to leavp the economy as free as may be
',V^te^fltu^SSS
to respond to the demands of the
people exerted m free. I broaden their field

r

ourselves must become at least semi-communistic

we

we

the

r

,

-

.themseiyps

any other system of providing us all with
fee goods and services we really want.- The way to prp-

stock?

other; institutional V investors.

natural processes of a;free
economy which thjuugh many
decades and 'even- centuries -Vhave

capable beyond

oO

trusts^ funds and

primary reason was no doubt the ;
excess
conformity and unity .of
action that caused excessive
pric- ;
ing I of the institutional grqup;-;
Another
factor
was%feaf' fdter '
earnings figures showed t)i«y iyfere

,

,

:

the

widely held by

"

socialism and communism and thus thwart the
normal,

.

to match the Soviet Union in
future growth, or even,.perhaps, insure continued growth :
at all. 1 Much of .tbe concern over this matter
appears to
conceal'a suspicion that the socialistic or communistic ;

in

we

lj.0%y for

we

;

socialistic state in order

communism

worfy about future growth hi
ourselves attach- real value
and only one reason for
worry about it.
are inclined to
use the techniques of
we

output of the goods

That

It would be difficult to say which has less to
support j
it, the former denial of the possibility of furfejer growth 1
'or the idea that we must convert
pprselves into a s,emi--;

>

why should

the
to?

of

areas

.

:

■

,

evapo-

.

surprised a lot of people-when the t"-1 can not help but feel thai
favorites of fee |!ifoofely fevest-. many of fee staudard
parison.
approafeej?
-ment :Rlan, ; purchasers
in T956, bre applicable more in theory
tha§i
In
evaluating a stock for pur- which represents the smallest and in
practice." For .ekafep.% I
chase it is essential to check the
hay^
least, experienced
group * in "the received in the mail a most caref
character of its present
ownership market, declined-less the follow- felly, compiled analysis of a ceH
and consider the
type of buyer ing year than the pick of. the tain
corporation.

-m* vaf

fe?

speed fe com-

be

„

T^e

staternedi

Volume

187

estimates
sible

5750

-Number

1958

deficit

as

satisfying
floating voters that it is de¬
termined
to stand firm against
inflation, Britain will be doomed

pos¬

a

dollars

four

In putting the analysis-in my
binder I paused before destroying

/

former

which

statement

Era Drawing to a

I

dated about six months earlier

tionary

es¬

larger earnings. -'

even

I

must

Where

ask:

in¬

the

is

his

based

price

i

ap¬

praisal on the earliest and highest
estimate? He would have felt the
stock

was

a

.bargain

higher prices.;

reminds

It

I

;

of

me

V

in

some

Francisco.

San

very

In

class

days I did pot know enough not
to be impressed with the "ratings."
However, it did not take, many

'

..

LONDON, Eng.—There are in- dends.

:

.

.

of

member

Morgan Stanley & Co., 2 Wall
Street, New York City, members

f

■

of the New York Stock
on

Pacific

the

run

partnership.

Forms J. B. Dawson Co.

Coast

,

..

Division and will

Francisco

Exchange
July 1 will admit Robert H. B.

Baldwin and J. Sheppard Poor to

Exchange
through
pur¬
chase of a membership in the San

SKILLMAN,
Dawson is

business

privileges of his membership on the firm. This is the sec-

.

.

.

firm

Mr.

cific Coast Stock Exchange within

with

of James B. Dawson &

name

Co.

The capital goods mdusr
are »> particularly
under a 1

•

a

,

vpa«

y

dications that the disinflationary tries
years to learn that these ratings; drive initiated with the increase cloud of uncertainty, and fears are
ware mostly historical, and not in
of the
Bank rate in September entertained about export prospects,
This would change the moment
last is draw¬
any sense prophetical.
the Government succeeded in se¬
ing near its
/;
: v Coirclusion
'
curing the additional dollar facili¬
end. The Bank
With the trend .more and more rate is now
ties.
The conclusion of such, an
towards investors turning their 51/2% : and' it
arrangement would be a signal
for investors and speculators to
fupds over to professional man-, seems prob¬

\4

•

'r. "

Rocky

on

Hill-Blawenburg Road under the

firm

Honolulu; securities

securities

a

offices

from

acquiring membership in the Pa-

ond

N. J. —James B.

engaging in

con¬

fer the

satisfying the middleof its determination to stand firmly
against inflation.
;

floating voters

those

-

,

Hines,an officer,
voting stockholder of
the Cooke Investment Company,
Inc., of Honolulu, has become a

Labor Government in the not too distant future

a

"

H.

Alison

unless the present regime succeeds in

early market experiences I had in
1922

that in the long

entry of

.

Y

4

director and

Sees, as the final result, the

a

at

even

^

.

"

*

Stock

if will have

weakening effect.

Admit Partners

Govern¬

New Coast Exch. Member

securities.

favorable effect upon the economy, but

'*•

•

•

The writer comments on current
efforts to secure additional dollar credit and concludes thatsuccessful recurrence of dollar facilities will at first have

~

who

Labor

ment in the not too distant future.

.1

-

in Britain, and depicts likely effect upon equities-

era

and gilt-edged

*•

*

vestor

;

explains why he foresees the ending of the disinfla¬

Dr. Einzig

«,

timated

v

another

have

to

Conclusion

By PAUL EINZIG

placed in my book. It was dated
just three months before. Its esti¬
mate of earnings then was $7.25
per share. - I believe an analysis

Morgan Stanley to

these

Is Britain's Disinflationary

per

share.

the

21,

Government succeeds in

earnings

of

(2625)

The Commercial and Financial Chronicle

.

Dawson

Texas

formerly

was

Securities

and

Corp.

W. E. Wetzel & Co.

,

. .

-

,

.....—

—..

-

-

,

'

:

fore very long

that inflation

indirectly through

it will be

re- -

sumed. Needless to say, they

stored

its

portance of
to teach

a

able

fund, the im¬
far flung campaign
a

investors not to be back

seat drivers, or to

thp

.

to

ber 'level

5%.

-

E

v

.degree of recovery
and in the

n

Promotes Two

:

'

1

the motor indus¬

as

working to capacity and

try

are

are

CHICAGO,
111. — William
H.
Cooley, President of -Television
Shares Management Corporation,
135 -South La Salle Street an-

^ble

to

raw

material

of The

are

of

much

absorb

the

unemployment in other industries,
At present the banks do not find

Exchange Magazine
;

the

:

thanks

to

As
.

•

...

able to its employees appears

.

in

a

gift to

a

MIP

.

Freeman

A.

Porter,

L..

jonn

nounced this week two

Jr. '

important

of this nation¬

fiction should affect the Gilt- wide survey of investors in all
edged market unfavorably. 1 No
walks of life appear exclusively
doubt it would in the long run,
in the June issue of the ex¬
there be further demand, the aur for the resumption of inflation on
thorities would not insist too rigv- the scale it was proceeding m rechange. For example: the top
idly on the letter of the rule they cent years' would
mean a re- 25 selections for each
objective;
laid down in September that; the sumption -of the flight from flxed
volume of credit is not to exceed' interest-bearing' securities..
But the 5 stocks named in each clasits figure for 1957.
'
~ '
taking'a short view a dollar credit
thp o stocks selected
;
Admittedly, the'effect of the would tend to cause a further rise :sihcation, the 6 stocks s
disinflationary efforts has been a in the Gilt-edged market, owing
for each of 4 objectives,
distinct slowing down of the rise to the psychological effect of the
,
•
. ,
,
;. ,
in wages and prices, but the muchimprovement of sterling s Pr°s- See for yourself this revealing
desired
stability of wages and pects. For one thing, the threat
picture of basic considerations
prices has not been achieved. Pro- of another autumn crisis would be
influencing these investors'
duction has
been more
or
less removed, and the Bank rate could
static, and the increased produc- be reduced further. Even at 5 k %
preferences, their aims and
tive capacity achieved in. recent Jt is abnormally high, and-there
Twr inr-nmM ind necnyears through capital expenditure
can he no doubt that the Treasury hopes. Th ir . ;
,
has remained largely unused. Nat- would take advantage of the pospations are also shown,
urally enough the Government is sibility of reducing the burden of
.. .
.
anxious to resume expansion of the public debt if it could lower ,
The value of Book Value
production, as it duly realizes the .interest rates without endangering
unpopularity of stagnation. Many sterling.
What is book value? How is it
industrialists, too, are now inThe immediate reactions to the
clined to believe that, if the choice conclusion of a dollar credit would
figured? Does it help determine
is between stagnation and infla-; be doubtless favorable.
Taking a the intrinsic worth of a common
tion, the latter is the smaller evil.,-long
view, however, it < would ,

management promotions.
John L. Porter, Jr., Assistant to
Mr. Cooley for the past year, was
named. Vice-President of the com¬

"

pany.

Mr. Porter is also a mem¬
Committee

of the Investment

ber

corporation, which is the
investment manager and princi¬

of

the

underwriter for TelevisionElectronics Fund, Inc. Mr. Porter
has had some 25 years of active

pal

Evidence Seen in Dollar Loan

Midwest Stock Exchange.

on

'Freeman,
Assistant
the formation of

A.'

Fred

era

in 1948, was named
Treasurer,
taking
over
duties
which have been performed dur¬
Corporation

the
Cooley.

/

<

past

10

years

Mr. Freeman entered the

secu¬

Prior to
joining Television Shares Man¬
agement Corporation he was con¬

rities

business In

nected

with

.''

well

''

v

Government loans

have

Jos.; Walker Changes

failed

to

-

range

derive

adequate




infla-

.

;

long

;

.

,

.

-

,

stock?

See

Boole

Value

and

Market Value. This brief,

crisply-

written article lists 25

stocks

selling above book and 25

selling

ployee levels.

„

'

'

c

.

-

Common stocks—
:

how much in common?

often-asked question

An

determines the

of

the

price of

—what

stock

a

under the editorial eye

—comes

Too

Magazine in

exchange

High Or Too Low. Twenty-

two common stocks

at

the

about

tive regime another chance at the.
next general election. But many •
people of the middle classes are
now inclined to take the view that

possibly
a - Labor ; Government
might be better placed for resisting inflation. Unless the present

co-

.

rt,

all selling

price

-

are

They're in the June issue.
There's

in this issue of

more

the

exchange

still

more

to come.

Magazine

and

-

in.the monthly issues

Helpful ideas and fresh

won't

facts about investing you
want to miss.

What does a

.

.

year's subscription

to the exchange

Magazine cost ?

Only $1.00. And you start your

subscription with the fact-filled
June

number.

mail

the

Just fill

coupon

and

in

below. T>o it

today! the exchange Magazine
is not sold at newsstands.

n
1

tb-10

Magazine, Dept; 7.

11 Wall Street, New
OfFTS ro MfNORS

—

same

reviewed. The conclusions?

THE EXCHANGE

-

demands. On —which now include the more
highly paid classes
of skilled
workers — to give the Conserva-

The

;
'

run.

the other hand, equities have been
under the influence of the uncer-r

tainty whether disinflation would

the-plan has sparked

interest in investing at all cm-

beneficial - below. It shows how to figure
Possibly the th.e book value of a stock and
termination of the very slight reoffers cautions to new investors.
- cession
might increase the Government's
popularity.
But
this
effect would soon be offset by the
An investment plaice for
effect of a further rise in wages,
employees
and prices.' The attitude of the
middle classes is entirely deterAn interesting account of how
mined by the Government's ability to arrest inflation. So far there a major corporation made the
has been very little indication of
apy revival of confidence towards >
the Government's economic policy,
the

Middle Class Will Turn to Labor
;i£ the Government were to conresuming inflation on its preyipus; tinue its effort to resist inflation,
scale as a result of a weakening it might induce the middle classes

continue.

and how.

transaction likely to be
in

effects MIP might have on

management-employee relations

-•

.

continued rise in
mitted as
wages might cause,'in the absence
Stuart H.
of an expansion of consumer der-'
yice-President of National Aviav •mand, r a contraction ; of profit;
tjpn Corporation, has become as¬ '-margins; Already there have beefi
sociated with the firm.
some important reductions of divi*
*
ad¬
a general partner and
(Ctemenf;, Jf., formerly

through; the

-

benefit from the lower Bank rateand the improved petition of stetf:

of resistance to wage
.

ljmited partner.
Thomas J. Farrelly has been
;

economy

introduced,; how it's

xu

ling, because of the possibility of

change, announced that Edward S.

•

Exchange has
time devoid of any

distinct trend.

known

piagden has retired as a general
partner but will • continue as a

j

"i

-

been for some

.

-

succeed

a

The London Stock

;

Joseph Walker & Sons,-mem¬
bers of the New York Stock Exr

conclusion,

'

»

;

disinflationary

Government

the

achieving

i

1

tionary forces.
•
Nor is the political effect of the

earnest

additional

secure

the

that

.to resist.

1927.

several

securities firms.

to

•

distinct weakening of the

a

British

Government

considerable reinforcement of its gold and dollar
reserve
the temptation to risk a
re-expansion would be too strong
in

Mr.

by

the

is drawing near its

Should

•

ing

effort

an

dication

Management

Shares

Television

that

embarked in all

now

dollar facilities is in itself an in-

since

Treasurer

fact

The
has

1

'weakening of resistance to

Efforts

member of the

was a

n

,

...

mean

experience in the securities field
and immediately prior to joining
Television - Shares
Management
Corporation

T

—

,

tells why

Corporation,

was

working. He writes of some JongAdvance findings

bythe Government; ; But it is
widely expected that should the
eeijing be reached and- should

Fred

J
issue.' George

same

Motors

son or

daughter?

Securities-

Logically the prospects of a re?-

the

Romney, President of American

.

Effect on

ceiling-fixed

.

„

under the Monthly Investment

dollar

a

„

growth? for accumulation

credit.
,

.

:

•>

; •

Monthly Investment Plan avaji-

,

dividend income? For future

would be
Government's ability to stop

disinflation,

and why

-

^

,,

.

For safety of principal? For

the Stock Exchange

011

it difficult to maintain the volume'-■.
of credits within the

liable to affect the trend

is

that

favorites with readers

_

/idle to expect ^ British boomi But
the most important, single factor

Inziff

television Shares
,

stocks

of some

.'producing countries, it would be

.

sucn

re?-

in the United

r-States

yardsticks, will benefit though unem¬
concerned.
'
V *
ployment is
still increasing "
slightly, cer?.
tain / key15 industries

would now be

For in the absence

kets.

of
e

on

would
still have to keep on eye nri Wall
Street and on the commodity mar¬

proper

-(everyone

buy

pre-Septem-

criticize results

Without actually understanding

be¬

that

equities,

the assumption

agement, be it their broker, an in-r
Vestment counselor or banker or

York 5, N. Y.

„

.

.

.

(check, | cash, money
order) for a year's subscription to the
exchange Magazine.

Enclosed is

$1

1

1

1
1
1
1

«

NAME.

1

1

AOURESS-

1
1
CITV

.

STATE

|

22

The Commercial and Financial Chronicle

(2626)

Continued,

In

from page 13

Misconceptions About Piice ^
[ Behavior, Administered Pricing
auction fell 34.8%,

while prices

prices
are
determined,
by administrative deci¬
sion or by market determination,
or of the precise change in prices.

•

prices

whether

recession,

Thus far in the current
steel production has
while
steel prices

fallen 43.2%
have risen

Specifies Steel Behavior

7.6%.

interesting

is

It

despite

price

7.2%

from

to

declines
18.8%

that

note

to

ranging

in the four

like

should

I

illustrate this

to

lack of relationship by reference to

declined

steel

the method by

is not the result of

which

8.8%.

rose

•

the 1948-49 recession, factory
shipments of passenger cars in¬
creased
by
30.7%
and gross
shipments of cold rolled sheets
increased
by
6.6%
although
prices rose 6.9%.
In the 1953-54 period, there was
a
decline of 9.2% for automo¬
biles/Shipments of cold rolled

by 14.0%
only 1.2%.,

rose

price index fluctuated
narrowly
slightly
above
the
July 1953 level which prevailed
just before the decline in eco¬
consumer

nomic

the

If

drawn

be

for

other

the

activity started.

1.9%.

steel

In summary,

in the six moderate

recessions during the past 35 years,
the
consumer
price index
re¬

mained

unchanged

times;

it
declined
moderately
During one of the periods
of decline, the index rose for the
first seven months before turning
downward.

I submit this is

behavior

tional

use

can

obtained

be

while

of

inforced carbon bars

With

price rise

a

gross
rose

by 1.5%.
almost 8%,

rose

of

shipments of carbon skelp
by 3.5% while those for cold

rolled

ing

during

there

were

gross

54

price

strip fell

by

17%.

substitute products are
important than the absolute
of .steel
prices over the
longer term. What I am saying is
that the price of steel is one of
the less important determinants
of demand for capital goods and;
and

wire

level

durable goods dur¬

woven

similar.

of

wire fence

by 22.0%.

There

With

about

shipments
by
17.1%

fell

more

during the 1953-

was

increases

gross

of

4V2%,
barbed

while

for

they increased
nine cate¬

were

gories of steel products for which
prices rose between 4.1% and 5%
in

1954.

The

shipments

changes

for

these

in

gross

items

were

follows:

as

ing periods of recession and that

Per Cent

these

types of goods provide the
most important ultimate markets

Woven

wire

Structural
Barbed

for steel.

in

'

;

for

In the 1937-38

index

.

5.3%. '

fence..

+22.0

shapes-carbon.

—

wire

9.8

proceed

incurred

"As

the

S.

current

recession

Let

me

Recession
turn

to

now

<
an

examina¬

general

rolled sheets-carbon—
Plates-carbon

—23.6

tinued to rise.

—37.8

—28.2

alloy bars

Cold rolled strip-carbon
Tie plates-carbon

based

—42.5
...

of the

—44.6

has

tion of price-production relation¬

level

of

mainly

is

that

consumer

the

to

its

price.

a

product is to reduce

However,

generalization

loses

this
much

simple
of

its

meaning when an attempt is made
to apply it to particular situations.
Small changes in price would have
little effect
many;

upon

the demand for

products./ And

major

changes for many prices are ruled
out by relatively high and
rising
labor costs.
Studies of the changes in price
and In ^production of individual

products
'

during the^l930's re-relationship between

vealed little

the two. 'Studies I have made of
the manufacturing

and-mining in¬

dustries
for
the
1948-49
and
'1953-54 recessions also show little

relationship -between the magni¬
tude of the changes in price and
the
changes in production for
specific products.

Differing patterns of change in
production
nomic

are related to the eco¬
characteristics of the in¬

dividual

products.

Diverse

perience with changes in




ex¬

output

corded
A

of

the

these recessions

little

-How

re¬

unusual

is

a

of

5%

steel. production

and

shipments

point

may

be

illustrated

1937-38,

and 1953-54 recessions.
mobile industry is the
chaser

of

cold

rolled

194(3-49,

To

answer

this

shipments of passenger cars fell
by 48.6%, gross shipments of
rolled

! declined

as

follows:

moderately

when the

In

During the 1937-38 period, factory

sheets declined by
40.9% and prices declined 4.9%.

and

products
six

that

rose

recessions

that

:

recession reached

bottom, the index

was

its

still 0.7%

•

higher
peak.

than

"

at

the

previous

unusual.

In the past, there has been no
relationship between the changes
in steel output and in steel prices.

This

lack

of

relationship

in which steel is used.

The rela-

tor.

It

also

consider

must

political

pressures.

There is
factors

no

be

can

-

•*

/

in which these

way

combined

into

a

a

computing
yield the right price.
The steel price maker must use
his judgment to determine
the

machine

to

each

of

weight
these

weights
this

is

to

change
not

be

factors

each

}

"

to
the

and

time.

to

news

given

—

But

With

you.

exceptions you do the same
things
in
your
pricing.
Thus,
steel industry in the same manner

they

1953-54

administered in
The details

are

company.

the

broad

approach

your
vary

the

is

same.

reces¬

C. J. Devine & Go.

Observing 25th Year ;
C. J. Devine & Co.—the nation's

leading firm specializing in U. S.
Government

securities

and

a

major underwriter and distributor
of

municipal bonds—is today cele¬
brating its 25th anniversary. *.
Founded by Christoper J. Devine in the
depression year of
1933, the firm almost immediately
became

factor

major

a

consumer

of course,

Florida

of

some

connection

in

with

price index.

I refer,

to the poor weather in

and

in

the

Middle

which has contributed to

a

West

2%%

of

obligations,

Chicago,

U.

in

,

the

Government

S.

quickly '

establishing

Philadelphia

and

St.

period

its

Louis.

During

the

business has
volumes

25-year
soared

from modest«

initially to hundreds of

millions of dollars in

rise in food prices and to the wage
inflation which has been reflected

in the continuing advance of 2%
in the cost of services. The retail

and

an

■

;

Beginning with

the

!

average

working day.
seven

partners

small number of employees,
firm set up business on one
a

While
prices of goods other than foods, floor of 48 Wall Street.
still -.headquartered at the same:
have risen by only 0.3%
since
last August. V
address, the firm now occupies;
•
four floors, has 11 partners and
Wholesale Price Index ;
the number of employees has in-:
-

.

i While

ten-fold.

net/ changes in the
wholesale price index have been

creased

rather

of offices in

the

small,

.

.

.

,

...

..Today the firm has a network
principal -cities from

of price
weakness have
appeared. Thus,
between August 1957 and March

with thousands of banks, corpora-

1958, price indexes have declined

tions,

insurance

for the

other

institutional

every

one

areas

following major commodity

groups:

parel,

some

textile

hides,

products

skins,

and

ap¬

coast

to

coast

of

and

does

business

companies

the

investors

48

states

.

and

in;
and

leather, and abroad.
Daily at C. J. Devine,
fuel, power, and hundreds of millions of dollars in
In
the
1926-27
recession, there
lighting
materials,
rubber
and these securities, and millicns more
was a net decline of
1^>%.
rubber products, lumber and wood in
municipal bonds are transacted
During the 1937-38 recession, there products, and metals and metal
—many taking place in a matter
was
a
net
decline
of
1 *£%. products.
Increases have taken of seconds—as the firm provides
However, during the first seven place for chemicals and allied
close, primary markets and swift,
months
of that
recession, the products, pulp, paper, and allied sure service to its clients.
-

'

costs,

and last but not least,

pressures,

within the first year five branch
offices in Boston, San Francisco,

leather products,

,

;

flows

from the fact that the demand for

marketing

the

*

so

.

-

in

and

6%.

significance

reces¬

During the first six months of the
1923-24 recession, the consumer
price index rose 2.2% and then

pur¬

sheets.

note

factors which have been

the

'

1957, about 52% of the shipments
of this product went to the
auto¬
mobile industry.

cold

summarized

jority of all goods and services in
this country. Price administration
steel products is typical, not

for

price indexes during the current
recession is not as unique at many
people believe, despite the special

question, I have

reviewed the six moderate

new nor

This review of past experience
indicates that the behavior of the

tivity?

The auto¬

major

farm
these

that during the
sion.

during periods of recession reflect
1923.- The experience
the varying characteristics of steel in the 1929-33
period has been
consuming industries rather than excluded because that was a major
steel price behavior.
depression. The changes may be
This

of
of

to

to

sions since

by the differences in the changes
in gross shipments of cold rolled
sheets -in the

interesting

current recession has been similar

the
con¬

in

administered prices
unique in our
economy. This is the method used
to price the overwhelming ma¬
neither

but

However, in the
1953-54 recession and during the
current period, changes have been

lationship between the magnitude consumer price index during a
of changes in prices and in
ship¬ period of receding business ac¬
ments of individual steel
products.
The different rates of
change in

0.2%.

period is not unusual. The declines
in nonfarm-nonfood prices in the
first four recessions were between

upward

rise

In summary,

are

rare

declined in three.
Thus, the rise
in farm prices during the current

Price Raises During Recessions

experience in

reveals

is

three

during that recession.

review

ten¬

as

prices

behavior

inch

these

the prices are administered in the

It

price index which

continued

reflected

again
dencies.

relative

Present Farm Prices

This conclusion is
upon

prices

consumer

to

lag. Experience
during' the current recession has

own

losses

prices has

activity,
tended

clined

Clearly, the magnitude of price since last summer. During the
ships during a period of recession.
changes alone was not the deter¬ same period, the wholesale price
The statement is frequently made"
has
recorded
mining
factor
in
the
overall index
only small
that the best way - to stimulate
change in gross shipments re¬ changes.
demand for

the

Commerce has suggested, the psy¬
chological effects of a spiral of
declining prices cannot be ignored.
fractional. Thus far, the behavior
It is frequently stated that one
of the overall price index in tne
of the unique characteristics of

—17.2

ness

have

overall index
has risen 1.1%
while nonfarm-nonfood has de¬

could

Department

and

index fell

0.3%.

by

U.

6.5%

During the current recession, the

price declines."
(Italics added) (U. S. Department
of Commerce, Survey of Current
Business, Washington, D. C., April
1951, p. 10)
•

the

—17.1

purchasing
without fear of

declined

nonfarm-nonfood index fell

product

business

that

raw material prices
changes in the busi¬

to lead

formula and fed into

recession, the total

In the 1953-54 recession, the total
index
declined 0.4%
and the

remained unaffected meant

group,

the

fell

5.2%.

business

steel

and

index

nonfarm-nonfood

trial

and

While basic
tend

.

In the 1948-49

early

Hot rolled

j

on

purchasing for inventories and of
capital expansion programs which
accompanied the upturn in indus¬

iron

10.4%

nonfarm-nonfood

.

the renewal of

there

diverse movements.

I*"- especially labor costs, competitive

recession, the total

declined

index

.

factor in

nonfarm-nonfood

prices fell 6.5%.

stability of these [inflex¬
ible] prices
was a bolstering

Hot

'

comment

V

.

has

index

"The

Standard pipe-carbon

Price-Production Ratio During

its

indexes,

each of
have been

■

these trends:

portant

recession

the

Commerce

of

these

bever¬

within

course,

happened to whole¬ tive
importance of steel costs is
prices during these reces¬
usually too small to be the decisive ;
sions?
The record may be sum¬
factor in pricing final products or
;
marized as follows:
in determining demand for these
In the 1923-24 recessions, the total products
by the * ultimate :conindex fell by 6.0% while fin¬ sumer,
This does not mean that
ished
goods
prices
declined a steel company can charge anys ;
6.2%.
price it desires without adversely
In the 1926-27 recession, the total affecting demand. But it does not
1 index declined 3.1% while the give sole consideration to this fac- *
,

production in late 1949 and
1950.
Realization that the
downturn in prices was limited in
the
1948-49 period,
four
products
for degree .and scope and that many
shipments were in¬ prices, such as those in the im¬

carbon

Even though prices were increas¬

The experience

the demand
for steel. It is probable, however,
that price relationships between

consumers

shipments

of hot alloy
by
25.2%
concrete re¬

creased.

significant factor in

for

about

gross shipments
rolled
bars
declined

which

from

their existing stock. Several studies
have indicated that price is not a

steel

11%,

of

Of

steel is essentially a derived de- "
mand and depends primarily upon
periods of moderate the
demand for the end products

in

recessions.

What

bottled

and

ages.

sale

,

increases

sig¬

a

nificantly different picture from
popular belief concerning price

the

;

price

four

rose

or

twice.

■

With

meas¬

August 1957, the con¬
price index has risen by

sumer

.

example, it is difficult to sell
machinery even if prices are cut.
This is so because at such times,
the profit visibility is poor and it
is the profit outlook which is the
primary determinant of purchases
of machinery
and other capital
goods.
Similarly, when the job outlook
is clouded, consumers are reluc¬
tant to buy these products, such
as
automobiles, for which addi¬

manufactures

onpe

recession is

current

ured from

termining the demand for that
product.
Similar illustrations
could

machinery and motive
furniture
and
other
household durables, and tobacco
products,
products,

During the 1953-54 recession, the

,

1

price index fell by 1.9%.
This decline followed the postwar rise of 31.2%.

;

changes in the price of cold rolled
sheets was the primary factor de¬

has

27.7%.

sumer

happened to the prices
products.
prewar recessions, production fell and shipments of steel in several
more than 55% in three of them.
recent
recessions.
For example,
Price Stability and Recession's
In the three postwar recessions, in the 1937-38
recession, the prices
Depth
with price increases ranging from of nails and staples, galvanized
The failure of prices and par¬
2.9% to 8.8%, production has de¬
sheets, and cold rolled strip all
ticularly
of some
administered
clined between 27.7% and 43.2%. declined
about
2.8%. However,
Thus, there have been somewhat gross shipments fell 9.9%, 25.1% prices, to record large declines
during recessions often leads to
smaller
decreases
in production and 47.5%
respectively. In other the criticism that this
situation
generally during the postwar pe¬ words, with the same percentage
results in deepening or prolong¬
riods when prices rose than during decline in
prices, the decline in
ing of a recession.
Purchasing
the prewar periods when prices
production was almost five times
agents know that patterns of price
felL I hasten to add that I am not as
large for cold rolled strip as behavior
vary widely for different
suggesting that the way to limit for nails and staples. If price were
products. Some products fluctuate
the decline in steel production is the sole or
primary determinant less
in price than do others. Prices
to raise prices. I am merely not¬
of the volume of shipments, we
ing the fact that price change as would not have such widely vary¬ represent income to the seller as
well as cost to the buyer. In evalu¬
such has not been the primary
ing changes in the volume of
ating;'the significance of price
determinant of the level of pro¬
shipments.
\
changes both sides of the price
duction. The demand for steel is
Let me next illustrate this point coin must be examined.
Thus, in
affected by many factors
other,,
by reference to the changes re¬ the 1948-49 recession, inflexible
than
price.
Consumer buying,
corded in the 1948-49 recession.
prices fell less than did flexible
profit
expectations by buyers,
Although the prices of each of the prices—having risen only about
prices of substitute products, and.
following products increased by one-third as much in the preced¬
numerous other factors often are
about 7%, gross shipments changed
more important than price in de¬
ing inflation. That this develop¬
as follows:
"
j;•'
;i
ment may have contributed to the
termining the demand for steel.
Per'Cent :
shallowness of the 1948-49 decline,
Cold rolled carbon sheets
+
5.7
When Price Cuts Are Not Helpful
instead of accelerating it, has been
Cold
rolled stainless strip
—
7.0
Carbon tie plates—
—23.9
suggested by the U. S. Department
During a period of recession, for
what

not

In the 1948-49 recession, the con¬

while

rather than

did

decline although industrial pro¬

Clearly, the level of demand for
automobiles

index

price

consumer

duction declined by

Thursday, June 12, 1958

...

Volume

137

Number 5750

.

Commercial and Financial Chronicle
The

.

.

"

<2627)

Continued

from

mand

12

page

23

for cash balances as well
the supply. The combination of
reduction and monetary ex¬

as

tax

Administxative Prices in

Doctor of Laws Degree for Mrs. Charles U. Day

pansion could be expected to have

continuing effect of higher de¬

a

mand.

Also such a program could
be expected to reduce the
govern¬
ment deficit over a
period by in¬

Recession and Inflation
Thus

big contraction in govern¬
without a com¬

a

ment

tight

wrong time
recession which no

have them remain inflexible than

mensurate tax reduction

or a

policy at the

money

could create

of

amount

a

creasing tax revenue in the
months after the tax reduction
by
than the tax reduction itself.

full-employment level of ac¬
A great body of adminis¬
tered prices are already so inflex¬

spending

waiting would convert

a

tivity.
ible

to

that

it

would

to make

try

be

better

them

flex

more

From

the point of view of the
Government alone, it would be
good business.

to

with

into

stituted,

Once

fluctuations in demand. Of course,
any prices that have been raised
too high in relation to costs should

recovery except as new
measures
for recovery were in¬

such

tax

as

reduction

on

monetary
expansion, or as
some
popular market innovation

to

seems

but

-

downward

of

1953-54

tered

prima¬
big cut

bring

recession

to have been

me

rily of this type—with
in

defense

is

perhaps a
priced new

-

The

car.

aluminum

as

developed such
sized, low

medium

be adjusted downward

a

prices

and

general

a

of

adminis¬

rates

wage

to

seems

recovery

,

on

revision

me

ance

to
the

and

a

wrong way to go at it.
!
The
basic problem

classical

mechanism

■

of

auto¬

nism

breaks

down

because

of

ery

administrative

inflation.

has been achieved.

'

With J. A. Overton
(Special to The Financial
Chronicle)
.

CORONADO, CalifJames

Graves
with

J.

has
A.

become
Overton

money supply — demand deposits
and currency — is something like

Mutual Fund Assoc. Add

$6 or $8 billion less than the in¬
dividuals and enterprises of this

(Special to The Financial
Chronicle) "

i

FRESNO, Cal.—Mary V. Thomas
has

been

Mutual

added

Fund

porated,

the

staff

of

Associates, 1 Incor¬

419 • 'N

Street- ?,

to

o r

t h

Mrs

H.

associated

&

Co., 1134
Orange Avenue. He was previ¬
ously with James Kyle Company.

price and wage inflexibility, As country would choose to hold if
we had full employment at some¬
a result, any one of a large num¬
ber of changes in our economy, thing like the present price-wage
level and current short-term in¬
or a combination, could create a
reduction in total
V-.
demand and terest rates.
institute

of

should be sought as the first order
of economic business once recov¬

—

matically maintaining full em¬
ployment. The cybernetic mecha¬

buying

Non-monetary methods for con¬
trolling
this; type of inflation

is to in¬
tight money policy when there crease demand at something like
was no excess of demand.. In that
present prices and wage rates. And
case recovery was brought about
because my analysis indicates that
in large measure by the effect of the tight money policy has been
tax reductions, a $6 billion mone¬ the main cause of the contraction
after all, it was
tary expansion and the success of of demand
the new car models.
planned that way — monetary ex¬
What is important is that the pansion seems to me the crux of
According to
inflexibility
of
administered the recovery job.
prices make inoperative the my crude estimates, the total
expenditures

temporary

measures alone could
bring com¬
plete recovery and maintain rea¬
sonably full employment, though
they could not prevent a continu¬

perhaps
point —

—-

in

case

a

dependence

this

expansion program is com¬
pleted, I believe that monetary

power

Calaveras
,.v

-

Charles

Ulrick

Bay

(center),

Chairman

Executive

of

dent

of A.

Exchange,

M. Kidder
was

&

awarded

Syracuse University

Co., Inc., member of New York
an

honorary

Doctor

of Law

Stock

Whether

at the 104th commencement exercises,

Mrs.

v

Bay is the widow of the former United States Ambassador to Nor-'
Others in the picture are left, Dr. William P. Tolley, Syra-

way.
cuse

University

brother

of

Chancellor

President

and

right,

Milton

Dr.

'

Eisenhower,

Eisenhower; and President of Johns Hop¬

kins University.

:

The reversal of the tight money

recovery
would ensue
without
external assistance would depend

v

degree at

*

recession.

-

Committee, American Export Lines, Inc., and Ctiairman aiid Presi¬

£ *V

'

•

policy which has already occurred
is a step in the right direction. But

a

-

whether

on

decline

demand

seeds of its

In the
not

the

of the present reces¬

my

contain

initiating

carried

reversal.

own

case

sion, it is

the

not

or

in

opinion that it does

the

seeds

its

of

own

low short-term interest rates and

ample

funds.

You cannot push

contraction of the money
supply
when
normal
economic
growth required normal expan¬
sion, then it is not self-correcting.

balances

major

no

action

is

taken

to

curities

is

increase

the

likely,

in

demand

well

as

for

the

as

policy is likely to produce a de¬
layed and long drawn out re¬
The

is

same

likely to be true

creased defense expenditure.

the money supply, such
place after 1929, and no

took

as

de¬

new

pressing events occur. Some peo¬
ple seem to think that the reces¬
sion

is

already bottoming out,
though the figures on employment
don't

to support this conclu¬
When it does bottom out,

seem

sion.

there is

likely to be

employment
recession

subsides

reduction shifts
accumulation.
there is

some

rise in

of

and

But

inventory
long
as

as

serious

deficiency in the
supply of money, full recovery is
not

a

likely to

tive steps to

effect

take

slowly and

in¬

or

WE GIVE

They
have

may

STOCK EXCHANGE

their

primary impact after recov¬
has been achieved.

ery

Even

duced

government deficit

a

sulting

of

•

NEW YORK STOCK EXCHANGE—STOCKS

BOSTON STOCK

•

PACIFIC COAST STOCK EXCHANGE

•

DETROIT STOCK EXCHANGE

•

MIDWEST STOCK

•

NEW YORK STOCK

•

recession-re¬
only damp the
recession and not

AMERICAN STOCK EXCHANGE

•

re¬

can

the

BANKS AND TRUST COMPANIES-

EXCHANGE

EXCHANGE

without posi¬
bring it about.
occur

Producing Recovery

„

PITTSBURGH STOCK EXCHANGE

•

EXCHANGE—BONDS

by borrowing from the
GENERAL

public.
Proposes Two-Fold Program
this

In

PHILADELPHIA-BALTIMORE STOCK

•

EXCHANGE

produce positive recovery if it is
financed

QUOTATIONS

•

the

from

revenue

extent

inventory

to

over

public works program,

a

further

fear

as

RECORD

covery.

of

further contraction in

BANK & QUOTATION

supply.

a

no

to

money

spiral

there is

se¬

part,

Reliance solely on an easy money

induce

recovery,
the downward
will undoubtedly come to
halt—assuming, of course, that

SUBSCRIBE TO OUR MONTHLY

string.

a

ply through bank purchase of

If

QUOTATIONS

And expansion of the money sup¬

recovery.
If I am correct in be¬
lieving that the recession has been
caused
primarily by the tight-

money

FOR HARD TO FIND

will not increase

reserves

bank loans and the money supply
if business has no need for the

situation, I recommend

what I will call

DOMESTIC

QUOTATIONS
•

MUNICIPAL BONDSDOMESTIC

>

CANADIAN

"buying power
expansion program."
It consists
of two parts: (1) a quick, tempo¬
rary,
and
sizable
tax
reduc¬
tion which will be quickly spent
a

CANADIAN
•

•
•

by the recipients, and (2) the
financing of the resulting deficit

•

v

.

•

EQUIPMENT TRUSTS (RR.)

•

PUBLIC UTILITY STOCKS

EXCHANGE SEATS

•

,

PUBLIC UTILITY BONDS
RAILROAD BONDS

•

RAILROAD STOCKS

•

REAL ESTATE BONDS

REAL ESTATE STOCKS

BANK BONDS

FEDERAL LAND

FOREIGN GOVERNMENT BONDS

,

INDUSTRIAL BONDS

•

through

•

INDUSTRIAL AND MISCELLANEOUS STOCKS

•

UNITED STATES GOVERNMENT

the sale of government securities

•

INSURANCE STOCKS

wait

to

•

INVESTING COMPANIES SECURITIES

•

UNITED STATES TERRITORIAL BONDS

bring re¬
have indicated why I
think such a policy is not likely

of

to succeed.

would put $5 billion of extra buy¬

What then should we do to get

recovery?
One

proposal

is

that

we

for automatic forces to

I

covery.

.

,

monetary

by

the

expansion

banking

ample,

first

For

ex¬

tax

come

complete suspension
personal in¬
for just three months
bracket

administered
rates

tem

OTHER STATISTICAL INFORMATION
•

possibility is

major
government drive to bring about
sizable

a

so

downward

as

a

revision

prices
and
wage
to simulate the classi¬

cal cybernetic mechanism.
a,

price level reduction

or

less

of

was

Such
more

successfully accomplished

in Australia after World War II,
but there the purpose was to ad¬

just

the

Australian

so

supply
have

as

to

a

billion,
sizable

demand and a
in the

It

doubt

that

a

administered

forced

prices

reduction
and

wage

monetary supply.

should

be

tax cut without

•

to

and employment.

to

should be encouraged to keep ad¬
ministered prices stable at a rea¬
sonable relation to the costs at




FOREIGN EXCHANGE

•

TIME LOAN RATES

•

MONEY MARKET

•

VOLUME OF TRADING

■1

noted

-

r

-

.

an

25 PARK PLACE

:

NEW YORK

that • .the

increase in the

supply could be expected
give only a temporary stimulus
demand, much like the Soldiers'

cs

WILLIAM B. DANA CO.

SUBSCRIBE

subscribe

*;

7, N. Y.

wish

i

I
for

one

to

year

;

•

-

the

for the sum of $45.

.

a.

&

Bank

Bonus

of the

1930's.

A monetary

expansion alone would fail to the
extent

that

it

increased

the

de¬

1

[
;

,

to

^
Quotation

•,

< i

-

>

"

«

I
I
I

TODAY

I
Name

—

1

money

rates would increase real demand

Rather business

SECURITIES CALLED FOR REDEMPTION

supporting increase

to

in

PRIME BANKERS' ACCEPTANCES

•

we : would
increase in

monetary expansion in this buy¬
the
international
value, of the ing power expansion program is
pound and not to achieve recovery just as important as the tempo¬
from a recession.
I very much rary tax reduction., A temporary
economy

•

DOW, JONES STOCK AVERAGES

increase the money

by $5

both

CALL LOAN RATES r.

•

ing power in the hands of the
public in that period. If the re¬
sulting deficit were financed by
borrowing from the banking sys¬

Another

SECURITIES

the

the

system.

•

»
Address

City.

f
Zone

State

.•

a±

The Commercial and Financial Chronicle

,(2638)

Continued

from

in

14

page

the

The Food

out

Supply of America

tional Laboratory in Upton, Long

the

at

control

Island.

or

processing

food

level.

neighborhood

If1*

i

r.

,

.

of

100,000

store

a

be

spread

.

might

complete, a group
in oroducine and manip¬
in producing and maninulating plant mutations to im¬

be dominant factors in the future
tivities of manufacturers.
x.

that

show

approxi¬

mately one-third of the foods now

thus

Results

<-

u

x-

Statistics

the various species for man¬

kind's benefit.

that on the

indicate

far

shelves of super markets

Developments in Woild Trade
And Monetary Policies

three stories high.

In ^ event this merchandis-

mg marvel will be a shopper's
Paradise, equipped with such fea-

Research and development of twes'as customed lounges, talking
of botanists is new products will also continue to gtore directories and air curtain

.

Continued from paae 5

floor—or could be two

one

on

work, which is far from

engaged
engaged

prove

doors.

'

.

Beautifully
schemes,

♦
color

.

blended

light, will cast

restful glow over

a

world-wide precarious and

a

(3)

Barriers

the entire market.

lem

^ Let us analyze these problems
in

light

of

the

recent

ments.

are

such techniques as radiation preservation, dehydration, dehydrofreezing, and treatment by anti-

Iowa State College.
■»
Fart of this work has centered
around
using radlo?isotopes as
"tracers" in problems of feeding

dairy cattle.
.

.

tracers,

According to some

radio-active

these

sh0uld

ardous

several

see

it^ is P°^ble to follow pr0Cessed foods

on

sources,

1960

radiation

carts.

These

For

than

f

huge markets will have
variety.

in the —
food sec-

example,
,

—

tion, the shopping list will include

irradiated

the market.

of shopping

method

motor

endless

biotics.

.

.

of

Because

equipped
moving floors^-a less haz¬

frozen

foods,

meats,

and antibiotic ^ treated foods, etc;
certain nutrients through an aniThese same sources prcuxct that
Jn fin/i /Mif
fhov
J.ncse same souices predict uiai
f
In addition, you will be able to
within 20
years' 5.t010% of our
shop around the clock, as bat¬
! A few days after an animal eats
may
*rradjated. ^
i
teries of push-button vending ma¬
the

how^much

element,

nutrient

"tagged"

of™Sss]£^ty e si^ce ^he Armv^

chines

will

be

at

your

service.

animal° absorbed
w^^mfnS^

Office of the Surgeon General has .Experiments are presently being
W
mirnh
now cleared more than 100 ir- conducted with this type pf oper-.
^stenTaterial
elmunaW *s radiated foods for human testing, ation.,... .
.
In addition, it is also possible
Much depends on the outcome
These machines will offer a
to teti which part of the animal's <£ thfrse tests, being conducted by fairly extensive assortment, inbodyused the nutrient.
the u* s* Army Quartermaster eluding meats, butter: milk, cof-.
Through research of this nature, c°rps.
fee, tea, crackers, bakery goods,
researchers are learning funda-°ae good omen is that for 12 cookies, and paper items,
The new king-size markets will
mental facts about the functions weekV human
volunteers conthe

>

•

.

,

..

.

,

10

is furnishing us with valuable information
Which may help build better live-

fun\ed a
diet
irradiated
f°od without any adverse physiological effect. However, before widespread

stock rations.

consumer acceptance of irradiated

of certajn elements.

Thus/atomic

.'

i

energy

f have presented our expand-

goods

be

change-controls and other restric¬
on trade are imposed as the
result of monetary difficulties. If
the monetary chaos in the world
were
ended,
the
rationale for
many barriers to trade and par¬
ticularly
to
exports
from
the

terials and hence
health of the

clude,- of

*

that

ican

in¬

Z

dustrialized

countries of Europe
watching with an anxious eye
for their exports to be seriously
are

reduced. '
■

of

Because

economic
the
us

"

-

of

the:impact

affairs

the

on

,

of

world, the other nations expect
to manage

light at joy-riding
they expect

us

They

pf

de^J

booms but"

pur

avoid depres¬

to

.

sions:

the

At

sameJ

the

seen

time;

evils

inflation in their
warn

of

us

the

those

of

reserve^ and lack of international
liquidity' Jbe found in the same

dire

pi£Tat

we have the necessary
facilities needed to produce food
for our future population,

.

let

turn

us

them and make some foods avail¬

able

in

giving the

several processed forms—
consumer a

wider

selection from which to choose.

Processing
Now

methods now being used,
Instead, they will supplement

attention

our

developments in
the processing field.
Technology hasTtaken a firm
grip on this segment of the food
industry also,
Because of this, we can expect
to
see
greater production and
warehousing
efficiency
through

Future

forthcoming

Changes

in

a

mented

continued inflation in the United

closing,

I'd

tion will be

a

much

greater use

of electronics.

Through the
we

will

see

use

of electronics,

trend towards auto¬

a

matic warehousing

.

.

warehous-

.

ing which employs "live" storage
systems instead of today's stacking

operations.
One such warehouse is

in

already

utilizing an elec¬
tronic
case-routing system that
features the latest memory-circuit
operation,

controls.

.

•-

,

During the

course

of the day,

than 80% pf the plant's pro¬

more

duction

is

shipped

directly from

Ifive"

balance

storage, with the
placed into floor stock.
:l

The future will aiso

mpre use

much

see

of automatic data proc-

epsing to accomplish closer contrpl
at sales and inventories

tjppl which is vitally

,

fast-moving

today's

.

.

pon-

necessary

in

business

world.

experience

of

the

past

Several years indicates that Amer¬
ican consumers are willing to pay

evidenced by the popuof

such

products ;

as

Wch

a

the

of

counsel

prolong

recession.
to

conies

Guaranty

Trust

us

re¬

of

gold reserves and total world
clearly that the ques¬
tion of international liquidity to¬
day is a critical one. In 1937, the
gold reserves of the free world
were
equivalent to 49% of the
value

Inflation

trade.

world

of

The

growth of trade has re¬
duced that percentage to 19%. To

from

make matters worse, reserves have

and

the

depleted in key trading

severely

Co." Survey

""The basic need
is for lower
This, then, is the "store of the
future"
as
visualized
by many real costs, especially labor costs,
with correspondingly lower prices,
industry leaders.
to tempt buyers into the market.
In addition, work is also pro¬
If this need cannot be met by
gressing on two electronic stores,
reduction of dollar costs, the de¬
also proposed as possible stores of

iood distribution system.
Here, too, we can see more
advanced methods, brought about
by applied technology,

second line of

form of short-term
London to all
of the globe. A comparison

trade shows

the

our

Great

countries.

of May 1958:

Britain, for ex¬

ample, with only 4% of the world's
reserves, now finances 40% of the
world's trade.
toration

Therefore the res¬

of the free convertibility

pound is both vital and ur¬

of the

There is no way of assuring

gent.

distribution of gold re¬
countries according
Conclusion
to a plan.
Any country can ac¬
of more inflation. If the demand
prompter service to customers.
quire gold reserves if it puts its
In conclusion, I'll just say this: is
granted, the way is automati¬
For example, in the wholesal¬
mind
to
it and has appropriate
Barring unforseen circum¬ cally paved for a repetition of the
ing field, fully automatic wareeconomic and monetary policies.
stances, our food supply seems boom-and-bust cycle, with an¬
The depletion of international re4
houses will most probably domi- ample for many years to come.
other inflationary 'cure' to follow.
nate tomorrow's food distribution
serves by inflation has, of course,
Thus inflation begets boom, boom
In
addition, there is every pos¬
picture.
removed a great safety factor for
recession,
and
recession
sibility that we will have a wider begets
Actually, designers today see no
some nations but truly sound mon¬
begets the demand for more in¬
technical obstacles to push-button variety of processed convenience
etary policies might diminish the
flation.
foods
foods
which
will
be
warehouses.
need for large reserves. We should
"Where is the means of escape
distributed to us more rapidly, in
do
They claim that they have all
everything we can to help
from the vicious circle? Shall the
pleasant places to
the material available right now. comfortable,
Great Britain restore urgently the
economy 'sweat out' the recession
The only point on which they shop.
free convertibility of the pound.
on the
basis of rigid costs, how¬
This paints a very pleasing pic¬
differ
is
in
warehousing
pro¬
I would like to" be optimistic
ever long and painful the process
ture—and I ask you—gentlemen,
cedures.
may be?
Or shall cost flexibility about the possibilities of achieving
else
but
in
the
United
One designer visualizes a robot where
sound monetary policies.
be restored?
The first alternative
My re?
order
picker,
commanded
by States could you paint such a would be economically deplorable cent trip to Europe, where I par¬
punched cards, touring the ware¬ picture today?
ticipated in the sessions of the
and, in all probability, politically
house,
selecting the
necessary
impossible.
The
restoration of 1 monetary commissions and the
merchandise, and then assembling
cost flexibility also is difficult to governing
body of the Interna¬
Bertram Alanson
it at packing stations.
envisage in the present climate of tional Chamber of Commerce, has
Another concept is a computerBertram E. Alansort, partner in
public opinion. Yet from the eco¬ given me some reason for optjl?
controlled warehouse.
Alanson Bros. & Co., San FraiW
nomic standpoint it would be far mism/ In my opinion jt would be
With this system an operator cisco, passed away May 25 at the
preferable to prolonged and se¬ tragic if at a moment when Eqplaces the customer's order on age of 81. Mr. Alanson was the vere depression on the one hand "rope seems about to adopt sound

future oprerations, assur¬
ing faster handling of orders and
govern

a

mand arises that the Government

tomorrow.

provide

...

proper

serves

substitute in the form

a

among

.

.

'

something

similar

to

punch card, puts it in

an

a

IBM

At

a

oldest active

machine,

Francisco

impulses

Pacific

releases the required articles from
a rack.

demand




the

duration

merchandise, pay your
and wait for your packages

and

scribe the coming changes in

TV

requires greater scientific

wisest

require

to be delivered.

this

point the. articles arp
directly into a waiting

member

of the

San

Coast

Exchange (now
Stock Exchange)*

he had served as
its

'

President of the
member of
governing board three times.

Exchange and

Brod

&

currency -

other."

-

monetary

debasement

States

V

_

should

r

.

?

,

War II
come

A. T. Brod to Admit
T.

chronic

the

-

was a

"

A.

policies," - the - United
be seduced by. the
cheap money men and embark on
*
Ending Monetary Difficulties : • the type of inflattonaixppUey that
•"
The international monetary dis¬ has - brought ; so- many
ills to
order that has existed since World Europe.
^

or

on

-

Stock

Co., 120 Broadway, New York City, members of
the New York Stock Exchange, pri
One of the primary
changes is July 1 will admit Jules Frank to
much larger store—somewhere limited
partnership.
*
-

...

corners

so-called

de-

rs,: frozen
pies, and cake carried
vehicle and deposited on a rackjnixes.
untouched by human hands.
h There is every reason to expect
popularity to increase.
Prophets of the future depict a
Because of this, food processors regular
fantasyland jas the super
engage increasingly in cater- market of tomorrow.
f

>-this demand

a

to

f$r the built-in services contained and through electrical
jed ponyepience foods,

would

bill,

of automation.

use

do not believe that

select your

As in the processing industry,
Key to this increased automa- electronics and automation will

the

one

a

the

credits extended by

projects being stud¬ creeping inflation would prevent
ied is an ^electronic
eye, which unemployment.
Quite to the con¬
would add up the cost of your
trary, it may well increase it
purchase.
above what a normal readjustment
system being contem¬
plated is one whereby you would

Food

like

you on your way.

by
in

serves

One of the

Another

Distribution
Before

speed

j

„

1914, the Bank of Engr
land could run the gold standard
with a gold reserve that seldom
exceeded Pds. 40 millions supple-?

...

,

thus

Future Developments in Food

to

.

,

Before

conse-*

spending. They also realize that

wav

;•

causes.

run¬

own -coun¬

of large doses of deficit

quences

reimposition of disci¬

during World War II and abuses
credit thereafter, so <jan the
responsibility for the depletion of

with

economy

our

foresight and wisdoms

against Amer-r

/*.}■'"

pline on r governments. r Just as
{he roots of the present recession
can be found in the great monetization of debt that took place

our

rest

,

The only- way .in which mone¬

the painful

-

v

products.' *

tary stability, and hence free con¬
vertibility of currencies can be
restored to the world, is through

>

...

valuable

the

and discrimination

,

pro-,

countries

mendous educational program and ./,,lre experts nave tneir way, States would inevitably spread
h
% %
H
the check-out counter will run abroad and would further weaken
selling jod win nave to oe aone.
th1
f
the foundations of individual lib¬
natural resources and technology
summary, it is my opinion
>
•
.
> ' '
v
V"
available to mjpet these demands. that
no on? °f these newer
PJ0P°se. to accomplish this erty. '•
i
From this discussion it is obvi- Processes
will
replace
present with electronic devices which will
What are we to do then? I for"

nnnulatinn's retirements for
lng populations requirements ior
more food and a summary of the

4ntf

disappear.

would

States

machinery of
the General Agreement on Tariffs
arid Trade would be truly useful

course, most of South
and Asia.
Even the in^

America

tries

meir

the economic

on

countries

them. ^These

duce

cut,

nave

United
+ Then

has a great and a direct in causing governments to aban¬
impact on the prices of raw ma?- don restrictionist trade policies

away

exneris

billion in

economy

who have

f°°ds can be obtained, a tre-

imports

our-

vital part of

a

you a

ypur
clothes, and provide - you
with almost any service you wish.

properly linked
if .should always
remembered that quotas, ex¬
but

trade

tions

the pro-,
duction of many of our allies'and
underdeveloped countries, t T h e
condition of the United States
are

contain shoe repair

services, give
beauty treatment or a hair¬
do your laundry, dry-clean

and

which amounted to $13
1957

ways

•

world's

Some markets will be
with

exports

countless

often and

is

with

develop¬

no,.,

being conducted performance in the next 10 years,
with atomic energy at the agriFuture food processing will un~
cultural
experiment
station at doubtedly make increased use of
Other tests

American

in

balance
payments problems. This prob¬

of

trade.

ra4iation has started to produce didn't even exist 10 years ago.
In order to shop these mam¬
I The one question on everyone's
that are either sturdy
Although the fight for in-store moth
supers,
planners visualize
lips in Europe is what is happen¬
enough to hold their own against shelf space is terrific, you can customers
riding motor carts
some of the most virulent scourges depend on manufacturers to equal
...
.
ff.
..
* . intersections ing to the United States economy?
wnn iranic ngnis at intersections Our nation consumes
40% of the
or are immune to them.
or better their past new product
to avoid collisions.
—

restricted

by nations afflicted with

international

to

that

knows

er

are

•

-

electronic

in.

bathed

and

unstable monetary system.

mutations

...

Thursday, June 12, 1958

.

feet.

square

Such

In this

:

:

h

and

such

even

part of

some

liyes that
to be a norHowever, the
poisons claim thdir

faster

than Mothers * dees

a

it sometimes
"

our

seems

mal state of affairs.
fact that

victims

not make the slowerr-acting
less effective.

.

before has be-?

fines

Every foreign trad¬

Heartening European Voluntary
Agreement
<
/
.

v.The most heartening evpnt that
I encountered in Europe wasthe

adoption

-

by;

the.

Inter national

Chamber of,Commerce pf an his?
toric

resolution calling on the na-

tions. of
follow'

the

a

common,
market to
path of 6ooperati6ri and
on
monetary policy. This
-

restraint

gesorufmp was drMed.by

offers.amexplanation. The United : (IaiimahaU
States ik continuing1- its reciprocalVUTpOUnt
trade pplicy,
we seem to have <~li
>
"'-V

-

.-

mppy pf .
leaders in finance

Europe s great

^e^ver/thipg. pOs^le
it
thatfwe

appear

are

to hialte^
doing

so

ship of Maurico Frere,

President

or

awareness

of the Bank for International Set-

as

a

tlements and fprmer
Governor pf
the National Bank of
Belgium. It

pahs; initially for

world.

,

of

'

-

..APRImJS,
-American Society of

w

W!j'

responsibility

our

By ABTHUE B. WALLACE

Inc;., elected

major factor in the interna-

ifjopai tra^e. network

gehtleipan^

-a

df

'

'CTTrmrS?

wmw

^d«kan!^b£Upder" tog chairman- be^ydgingly,^tthout eonyictipn

Vv€l6ldfl6$
a«m

EWfit Off t€6TS

-rv

This Week

BeiJfam.M. .putsch, of .New Yorh,
^

the free'

.

Pm J^cenf; abbprrgnlr attgcks.gp

passed

v

fhe

six
agree
not
borrow
money
the central banks unless a

horn

on

hi advance, that

circumsctances

Council summarizing the
views of foreign business leaders
—surely our best friends abroad

quired such .loans. .The effect of
this proposal would be to put an

American trade policy. These
views ranged from lukewarm approval to outright cynicism about

—on

end to deficit

ments.

At

spending by gewernsame
time .these
agreements wouldn't hamper the

our

normal

intervention

world

the

of

each

cen-

professed

desires

trade.

tral bank in its market. If the nations of Europe accept the advice

need for

to

'

v

'

-

and

they will

turn

best

of

International

Chamber

it difficult to

voices

deaf ear to the views of the

a

to the

find

banking and financial experts

the

world:—the

in the

common

weakest

been

corrected

and

important

the

of

postwar

taken place.

world

will

again, I am disheartened by what
happening in the United States.

is

.

_

have

_

expressed

J

concern

cannot, agree

Important

mojo

.

to

use

our

re-

most efficiently

sources

a

poUcythat. in general, has

served this nation-well.

voices

with
either contention but would tilte
to make it clear that |f the first
weTe tihe, it would be all the

problem facing the free world is

and

not

that peed the greatest tariff pro-

we have begun
to chip tectum 'Foi«V, M United
at that trade policy. This States js still a low cost nr.odueci
Wit. seems-ihat wo shall retreat pf WWW products Jr. J9.5? wo ex-

away

our

ported nearly..$9 bHhon

detri-

own

t

-

u

n

.

lopping elsewhere

Let

us

see

of Title Guarantee

&

Trust Go.

P3ny><picyeland; Sheldon F. Hall,

Flushing National Bank.
mercial

Qhp^anUf

Secretary

creased

York,

of

Trust

The

absorbed

Counsel

Conn^JameT
secretary
of

the

"of'

New

to

taken

over.

Co.

of

business

In

1953

Backers

10p%

a

iVi^

•

Staten

-

,

stock dividend, and

merged Bank

Island Bank & Trust Co.

an

pf

being aiy extra.

Manhattan;

In

1957

December,

1956,

Dividend went from $J.44

$2.40.

-

•

Com

Exchange

Stock dividends of 10%

and

,

in¬

was

Bank—Jn

■:

njergfed National

19,51

1954 merged Corn Exchange Bank l^ast:

each in

195$ gild 1955.

„

v

Gas

LaiidomSecretary

.♦

121/2%

;

Co —1951,

1953, .11 1/9.%

stock

dividend

1957, 4%; 195$, 4%>

;

dividend rate has increased from

of

-1952,1

14 2/7%;

Adjusting, the cash ~

$2,19 to $3.

T

;•

v

-

FiwM; National City Bank—1955 merged First National Bank V

...
'

Whgm Are We

Protecting?

of

pf ab the cprrent issues ,0/pubr increase hi productivity, we wi'fi
PPbr
in
9#d
wc «.»
e>~4*«w~
o"
v
- v fu
lie lrnporlance, I can think of none guffer in -our international trade. B°beet E.Njyeir, §$cF<&tary pf fbe
so
cleaiy^cut o,as-. flmi -W United However,*' we will suffer • even
.States tmde poliey.
-.mote at. home though inflation,; ¥>?.
fnitrkrl
Cl"ntric»
A# ithA
In
*
United States Couneii of top to* The answer »is,^ of course, not # ^PI-IA .principal nnAnh/1
The
speaker at the an„

New York

|ernatjwf Ghambef. <4

v.

-iariffs'tout

•

of ourbing

son\e means

dual

-

hieetiiig

wgs

Maxwell

M.

rade Ag-reements &$.■
fresen4ed >a proposal foe aUmodefU the power gf-faborrises andtotoforce 4uw firm jof Strop.ck & New Y(ork
unions
Tt^bb, J^rjper .ot: the Stroock .&
\ Unjustified Wage
en-

propo§^ .to. brihg
fh©relin Ijhe with fhe

busiuessraento resist such Leyan, mid pntil -May 20, 19.^8,
present,-^y demaiidsv'Tn the -16h& y^nl howf Fresidentiaj. AsSistadt ahd SAc.reeconomic -ppsitign.
Un#e4 ever, 4t* is essential that We -opr tary to the Cabinet. *!The topic on
II-—
ua
States end eyr posdien Of wortd prate our economy efficiently and which he spxalte was "The World's
leadership- H. wgs hpt a #fep tfiWe eohtinue"to improve our industrial Most Important Board of Direcpojicy but a practieaf vw&im to machine-that is still the envy of tora^r-The Cabinet."
^ /^O^'ernn^ot .aa the world. Wc will not do this by : The second speaker was James
courage

xi

'

pinch.ag

possibl^rn

-

....

p, -Selvage, President of Sefyage &
those industries which may appear Uee, IncM New YorkV public jEelar

.Y'hon-. the. ^dnimistiatioi} ignored
fwpu^ndations. and renueste# instead a eonthiuatiop pf
the present Act with f,urpW cop-

efficient but which do not

.&&*>

"pay-off.''

a

1954

rights to buy

new

stock at

Dividend increase

from $2 to $3.

was

Guaranty Trust jQot.-rl957

-

'

20% stock sUvidend.

Adjusting,,.

get .an increase from $^,33 to $4, 80 cents of the later

\ye
an

a

extra.

being J

/"

The,#ajiWfir Bank has-indeed been good to its shareholders.

.

Startjng

-

whh

1950/there

these

wore

stock

i4^7%5:l»54,
1955 there was a two-forgone

gpUt.' Cash dividends in Jbe.pprjpd

irieas-tions cowisgfors, whose topic

from ,$iD5 to |2, about 90%.;

rose

:

.

Irving Trust Co.-r-1958, %% in stock.

Manufacturers Trust

„

'

.

-

^

-

gorged Bropkl/n Tuist

1953 purchased Peoples Industrial Bank; 1956, £-for-i split. :PiyK
dend went from $1.18

to $2.

-was

1957 16%'% to stuck, advancing dividend from $5 73 to $l£iA?
Morgan js disbui'sing only about 43% of its operating earnings,

cidentally, I would like to add at

there is room for

fgr tagh people of the United Stdtefe,
.

jtbe four and P half imhipn AmeHT
who dgpend on foreign trade

cans

as t6
'%h€thcr we shall play a great part
-tn' the vmrld.c That has been der
termined for

for their livelihood. They are proT
■play it well
'
tecting, at he^t, the rpn-competir
•

-

tive

industries that tend :to

-

use

whether

we

shall

^

,

»*

*

*..

i

others.;

trade

lfef

^

.

.On. June 19 Benjamin Malnmth

will become sgcretafy and Gepfge

yige

-

president

of

plane, New York City,
the New York .Stgtch
Exchange. Mp. M#meth has been
^^sistaht secretary of the corn-

toe fate of pur in Abbots Prgctpr & Paine, passed
policy, we have seen that away May 24.
pauy.

quested

a

bare minimal program

from the £ongre§6, the

inevitable

eomprorbises tbattuM Place

mtf&

;

a

•

This is not

a

Trust—In 1950

450% stock

a

J

bad record for the investor who wants to see bis,

investment grow, while at the same time g|ve him,

sepprity of
have
mons

a

sprt that is pot

-relatively,

common in m ipdyslrigi

been scares of ,divi4en4TedUpttohS-niPUUg
»
in recent months, but none among these bang payments, p

and with the low payouts it is difficult to visualize any.

our

successful

Pa.=^The te).-

Jaffee, Leverton, Reiner Co.,
39 Broadway
Mfew Xprk Cijy,

iviss.oi C, V. Converse .& Co, njem))«s ot the Nm York Stack
JCoiupiomvealth
...

.,

-.

,

.

Program hut

.

.

-

it

-

opr^lyes
fWhy»r desplto, hul*i generosity, do
we hato SO:
mahy.to^^Gtors in the
world.
Perhaps

the

trade' pto-




Naw

d"

x

'•

1

On June

on

4k, Co.

r

Leslie

G.

*

Eugene Rosenfield,
Schoenharf, Sr. gnd

The firm name of Pasternack, Richard t). Weinberg will becmxie
Roberts & Co., 92 Liberty Street, partners In Stearns & Co., 72 Wall
;New York, City, has been changed Street, New York tity, members
to

Pasternack

& Co...

-

,

'

-

of the New York Stock Exchange.

1957 EARNINGS

eOMFJRiSO#

-

^

„

19

AMI

MMUi*
FIRE « CASUALTY

and Grind/ays Bank

""

U SJSRpPSGATE,

is

compromise will host tim- prestige
of- toe / Unltedf^atos : /
Nearly. Vfe pften dsk
:oach

OVERSEAS

GBINPLAYS PANS

,

New York securities dealers, it Morris Leverton, Harold Reiner
riddled with demeahing compro-~ h^s been announced by the lattoi
mises. Wje hope protectionists.will
'S'-' Js P^Qyerf e 'W4*- he
Stearns Partners
mot gain much frpm hi^bill but Manager of the Allent.own office.
(ppecjpl W THE rfNAjjcua Chhonicle)
Trade

NATIONAL

Bufldipg, wtlj Pscjiange, wjU pe lo/npd_gs-of
boocetorth. - be .operated; as a July 1. Partners will he Wilton
ftecip- branch office of polkin & Por fj. Jaffee, Jha Exchange member,

biJJ as pagSfE^ i)v too^ Hpnae Ways
bill as nassed by the House Ways
and Means Committee is'in the

tradition of

Form Jaffee, Leverton

were

certain to cut intp the very in—
at our Wade policy'.sThe present

rocal

p.o.-^1955, 1QQ% §tock diyMepd.. ^Sb divir

the Administration had rer.

Golkin Co. Absorbs
.' C. V. Converse & Co.

<

dividendj in 1956
5-to?-i split, thp diyidepdgotos itm ^6# to $330,
- '

Henry

change

stocky:

further dividend increase.)

c3^d wp^.frmn $2.^ to $$,75, .the latter containing g
United "States

members of

W^tori^B^e, Timitpd partner

a

New York Trust

-

IVJontor Asspci^tes, Inc., .40 Ex¬

t

Returning to
once

WitMrfi

n?WW9 m
Mfliinf ■llMltlli' Igfflif

Colan

ill"

or
'

byifate. All that

Walter A- Bpne

Capital and labQr less efficiently
than

us

we can decide is

-

,

.

Phi#

I, p, Morgan ^ Pp,—I95i, ^5% in stock; 1954, 2p% to

,ure up

tJl(? Wovds of Theodore Roosevelt, _ ;«*
iMPlHVwim said ^We have ^of ^hioieei to# STA Bfi

the label: '^rothctiomst^
tariff- advocates/

r

dividendec -1051,

to the rigorous standards /'SharehoWers-r-Eriend or Foe.v ;
of • an-\.uncompromising twentieth '
tha' mrrfinc
k„
century
■- <"
meeting was attended by
cessions; t6 the protectionists.' Ininclusion I am mindful of 450 members, .wives and guests,

this

]

..

eaterihg. to- the selfish -needs

pmtter^.;^We: \viere

by

521/2; rights in 1957 to buy new stpch at 60 .(now in 66-67

-

mi

•

-

po. VJanuary, 1956, issued rights to buy new stock at 44 (now sett¬
ing around 51-52); in 1957 issued .rights to buy new stock at 454/^. I.

The

MMSMS" J*S fiMK*5£ifcWS!
world.-

,.

absorbed

.

1955

Manhattan—1955

Empire Trust
S, Whitney

the

May, 1951, the bank merged Com-

Trust

of New York—In

Chemical

the rest,of the

Y

Bankers merged

year,

acquired

During this period the dividend

Safety Bank & Trust .Co.

Britain

Tennessee

In

&

same

1950,

issued rights to buy new stock at 47.

Marine

Company of New

Works

Bank

The

in

50%, from $2 to $3,

Chase

Directors elected for three-year
terms were:'John S. Black
Jr

Stanley

Again

tal) of 100%—from $8 to $10, $2 pf the latter figure

elected Treasurer.-

was

Co.

increase in cash diyidend (after allowance for the
change in capi¬

of

poration, New York, was elected
Secretary, and Frank C. Straat, Jr.,
Midland

was

Bank

the National Dairy Products Cor-

Vice-President

Trust

National

& Trust

O'Brien, Secretary of
the Air Reduction Company, New

Caliri,

increases, starting with 1950;,

or

Bayside National, and in 1955 the important Public National Bank

Stanley

Joseph.. L.

for growth items.

Bankers Trust—1950, acquired banking portion of the business

.

Lawyers

:

/

•

what, among the leading New York £ity banks,

has happened in the way of extras

yice"Prosident and Secretary of
the Burroughs Corporation, Detroit; Thomas C. Moroney, Secretary of the Honolulu Oil
Corporation, San Francisco, and

"

"

...

r
Lot us say that t#e institutional portfolio manager regards
them more in the
light, generally speaking, of fixed income media
than of growth securities. In other
words, he uses the bank stocks
for yield and stability,

Bertram M. Betsch

u

^

•

s,

Jo aquondgy'.the# to iheindust^e? Secretary/and

In recent

■years,

further—at

n

Secretary of

York.

land

PPPorts.

that posed by trade barriers. Here

trade

These

.

have

followed

o

T.

.

/

1934,-we Jiave

new

that the United States is becoming
a
high-cost produced and must
therefore resort to restrictions on

The third fundamental economic

Since

Program.

11 i

C

the

the

of

the

which

economic1 events

one

that have claimed
protection for years,

have recently been added
opposition of the Reciprocal

Trade

Harlan

B.

have come from some of
the most substantial industries in

link

market will have

most

Presidents
were

*

caS° and St. b.ouis Railroad Com-

■>

In addition to the old cries from

—-

;

run-of-mi|l

on

held lpng term.

firm

Named Vice-

3re hmK-^eit
~on*PaiUVChmago; John N. Dillen,
expand Pecretary of The New York, Chi-

industries

of

the

ment

States

re-

-

b<?;' Jf)rQ W
^^^JpTftvest-

.

the

that have been

greatly of what once \yere "neglected blue '
chips." Their action of late has been better
than that of many r
industrial blue
cbips, probably because pension and trust, funds
recognize them as suitable back-logs for equity lists that will be

^

ohc
inter;

violence. 1 If

anyone
doubts jth is, they should read p re¬
cent report issued by the United

has
with

...

exceptional

;mood' of

com¬

petent ; international
body
determined. in
accordance
criteria agreed

threats of; restrictions op
lead and zinc to inflaine mobs

or

•

/nyestors still Rartake

Then.

that

urges

Bank Stocks

to the stockholders in recent years.
Jt is true npW/ p.f
pourse, that they are acting well marketwise \even in the mcp "
Pf declining interesj; rates and lower volume of loans; but to many

;

economy.;

—

■

,

-

cies or making
the
private

"

•

Bank stocks have sp long been anathema for
investor, that sight has boen |ost of the -benefits

.

■

INSURANCE STOCKS

;

JPONUON, I^CS

Bulletin

on

Request

London Branches :
13 ST. JAMES'S

SQUARE, S.W.1
54 PARLUMENT STREET, S.W.1

^

Laird, Bissall SU««ds
Members New Tark

Backers to the Government in •' adejj, kenya,

Sto^k Eiohuil
Rrnbaf#i,;

Members Amerksan -Steeb

HOANDA, ZANZIBAR A SOMALILAND PROTECIORA9

ICO BROADWAY, NEW

Branches (ft:

.

aden, somauland bpoybctoraik,

BOi reHtpju-rrNr
JL. L'Ws, WPW
■

NORlUpiN AND SOUTHERN KHOI^HA.

fOW ft, ».«.

Telepbonet BArelAf S-0500

wuhk, pakistan, ceylon, burma, kenya,
ianoanyjka, zanzibar. uganda.
~

.

v

WW"**
^
Trqmg pep*)

SneeiaUH* it* 90#

*V

\OMU)

Continued

jrom

page

11

Banking and Government Policies
To Provide lobs and Growth
they >vill not cost the tax¬

—-and

payer -a

dime. ':V;; /

Let

fax Policy

Depreciation

Revamp

make

me

v.

.

third suggestion

a

One

of this same general nature.
the

of

sion,

chief

as

it

of

causes

was

of

the

the

reces¬

preceding

boom, has* been the behavior of
business expenditures for plant

Such expenditures

equipment.

management—should not attempt
to usurp this responsibility. The
often-repeated policy oL the Fed¬
eral Reserve, "to lean hgainst the
wind," is its proper function. Part
of the "wind" against which the
Reserve System must lean is the
effect of the financial operations

,•

What Is Confidence IN YOU!

Deficit

financing creates infla¬
As a fifth type of undertaking tionary pressures. So does inept
debt management. It is the job
that could stimulate the economy
and which would not require the of the Federal Reserve to counter¬
outlay of the public's money, let act pressures that arise from these
me
say
that, despite improve¬ directions just as much as it is to
ments in the tax structure made offset the consequences of over¬
the Revenue Act of 1954, it
is generally admitted that tax re¬
form is urgently needed.
Revi¬
sion of the tax structure offers
by

spending

or

speculation by private

and business concerns.

persons

During the last 10 years or more,
effectiveness
of
monetary

the

enormous

ulations

immediately, with its reg¬
defining the amounts of
depreciation
on
buildings
and
equipment that may be charged

particular proposals, but gener¬
ally speaking tax reform should
be
directed toward encouraging

off for tax purposes

saving

away,

and let busi¬
ness
management use
its own
judgment — so long as practice
was consistent from year to year
—a great stimulus would be given
to business investment, one of the
major keys to increased employ¬
ment.
This- step would not re ¬
quire any public expenditure nor.
in the long run, do I think the
Treasury would lose any revenue.
On the contrary, if it stimulated
business, spending as much as I
think
it
might, * the
Treasury
would probably gain.

-

.

'

.

If

we

look

for

particular

in¬

dustries that need additional cap¬

ital

investment

the
present
industries do,
let me suggest as a fourth point
that
we
look
carefully at the
transport industry. In the phrase
"transport industry" I include all
fofms of transportation — rail!* roads, trucks, airlines, transit sys¬
tems in metropolitan areas.
It is
a basic industry and one essential

time,

and

not

at

all

'

'

for national

defense.

been

and

.Nor

economy.

should we

enues

well lead to increased rev¬
even if tax rates were re¬

Fiscal-Monetary Policy

Senator

memorandum

Byrd's

to

something regarding the rela¬
of
fiscal
policy ; and
monetary policy. By fiscal policy
1 mean the tax structure of the

say

tionship

Federal
tion
ment

its

of

collec¬

the

Government,

its revenues, the

of

manage¬

balances,

cash

the

expenditure of its funds and the
management of its debt. By mone¬
tary policy I mean those opera¬
tions

Federal

the

of

Reserve

the quan¬
tity and availability of credit.
that influence

System

finances.

.

penditures

Enormous

in

this

capital

Reserve

System monetary policy,
markets for

is the development of

in times of
crisis fiscal policy should

extreme

in

this

I think it is worth

essential

in¬

As

a

means

10-20

years.

{

of encouraging

been

made

base

and

the

forms

of

in¬

vestment

government

sizable

would

any

such

an

this

Federal

financial operations on the private

this

your

is

a

basic, fundamental foundation for
all
successful
relationships
be¬
tween
"seller" and "buyer"
in

{through permitting

more

flexi¬

sector

of

the

Robf. Morris Assoc.

phase of human activity, records have taken losses, and the
especially true in those most successful investors in every
land throughout history have had
areas of personal service such as
the
law, medicine, engineering, some losses but they took them
and investments.
Following are and they did not let it upset their
Some" ofthe: attitudes - that are viewpoint nor their objectives.
v J "•
r *:': 'A s: V*. ■..
?
essential to such a successful re¬ »i -. : *
What the Investor Owes Himself J
lationship between an investment
;
The investor '• shbuid recognize
advisor (salesman of securities)
and his clients; and even as iin^ the-truths that are evident in a
portant the attitude of the client sound approach to his problems.
toward his advisor,
if a sound How can you diagnose a client's
be investment-needs unless he opens
up and tells you the facts you
need to help him determine aii
lished,.*•,
objective investment program? If
What the Advisor Should Offer
you can make this objective clear
His Customers
to your clients you can also work
with them to their best advan4
(1) He should determine objec¬
This means taking profits,
tives.
No investor has the same tage.
problems. Some people should in¬ paying taxes, taking losses and
vest for income, others for capital reinvesting, and if, after a period
agreement

that

can

to the investor's individual needs,

the

and

times

in

which

we

dustry should be allowed to

Elect Officers
J.

B.

Reboul,

Assistant

Vice-

President of the Chase Manhattan

Bank, has been elected President
New

Robert

York

Morris

Chapter of the
Associates,
na¬

ficers and -credit men.

./

;.

-

V

"

the

cuff opinions."

It is amazing

The

fiscal

firm

name

of

Prudential

,

!

,

the grounds that it would

pro- tive branch of the government—
vide jobs and that it would entail through the
handling of its finan¬
no expenditure by the
Treasury.

op




cial, arrangements

or

.

.

With Mutual Funds

taxes) and make deci¬
what amounts to prac¬
tically no more than haphazard
"guess work."
Certainly no inr
"hunches"

tual

Fund

firm.

or;

Golf

a

No.

1

•

is

his

hobbyi

with bowling a
close second. A
former

Office?

of STANY, he
is■ -still

very
active {in the

MrWlS

A*.

organization,
and

heard

can

be

raising his voice with the

STANY Glee Club.

Grabosky, Diamond Join
Montgomery, Scott & Co*
PHILADELPHIA,

Pa. —Mont¬

gomery, Scott & Co., members of
the New York Stock Exchange

and other leading exchanges, an¬
nounce

Allen

that

Jack

Grabosky and

Gr Diamond are now asso¬

ciated with them in their Phila¬

delphia office.

•

-

Mr: Grabosky has been associ¬
ated with the investment secu¬
rities business for the past

three

prior to which he was Vicein Charge of Sales of
Grabosky Brothers, cigar manu¬

years

President

facturers.

Mr. Diamond has been

active in the investment business

financing affecting
existing capitalizations, and other

in

similar

years.

s

t

a n

considerations

11 y

affecting

are

con-

relationships to profits (taxwise)
and dividend and interest income.

Supervision

is

a

constant

and

Incorpo¬

his clients should not hesitate to

never

ending

refer both

Philadelphia' for the past 2Vi
\
;

investments.

Losses must be considered in their

with Mu¬

through debt rated, 506 Montgomery Street.

25th

the

"guesses," yet
greater or lesser degree this
i$ done by: practically every one
who buys or sells securities. What
to

with

his

vestor should make decisions basec

now

Blayne L. Ahseris

Calif.—

ing his 50th
birthday. This
year is alsq

sions upon

Associates,

FRANCISCO,

on June
17 is celebrat¬

City,

punitive

upon

York

New

to accumulate a reserve of
assets
(after
today's

if you
want to keep your earning assets
healthy
in this
fast
changing
world. Every salesman who values

(Special to The Financial Chronicle)

SAN

H.
(Hank)
Serlen, of
Josephthal & Co., 120 Broadway,
Lewis

investible

mergers, new

earn ward

dustry will benefit. As things are
It is the task of the central
going now, both the consumer and bank, the Federal Reserve
Sys¬
the industry are suffering.
Fi¬ tem, to act as a counterpoise in
nally, this proposal is advanced economic fluctuations. The execu¬

For Hank Serlen

live.

how many investors will work for
years

policy can be directed to¬ Investors
Company, 33 .West 42nd
accomplishing the goals of
Street, New York City has been
;more revenue through
providing mohetary policy without in some
changed to Richard-Morris Com¬
more and better services, so that measure failing to fulfill its own
pany.
} +.
'the consumer as well as the in¬ special responsibilities.

bility in its. operations, the in¬

busi¬

the

it is

(2) He should refrain from "off

economy,

It is also a mistake to think that

est

in

advisors

have had losses, the strong¬
mutual funds with the best

every

but

Other officers, elected at the oiv
particu¬
the
Federal Government imme¬
larly the price level and the level "ganization's annual meeting, were I am conscious of in this connec¬
diately suspend all the. regulatory of employment. Monetary policy the following: First Vice-Presi¬ tion is that the
securities salesman,
powers of the
Federal agencies should serve as a balance wheel dent, William E. Scott; Assistant
is sqpietimes placed in the
posit
of
counteract
regulating the transport industry to
excessive
Irving Trust tion of
expan¬ Vice-President
being asked for an opinion
except those having to do with sionary or depressive tendencies, •Company; Second Vice-President,
regarding an investment
about
safety.
I
suggest this
these
arise
from
the Prestley E. McCaskie, Vice-Presi¬
step
be whether
which he is very poorly informed.
taken in addition to, or perhaps private or the public sector of the dent
of
Schroder
Trust
Com¬
(To understand and evalutb se¬
in place of, the various aids now economy, whether
they stem from pany; Treasurer, Howard J. Po- curities and their relative market
being considered in the Congress. fluctuations in public spending or duska, Assistant Vice-President
valuations is a very involved and
of the Bank of New York; and
This suggestion is advanced on in private spending.
difficult
procedure.)
Certainly
several grounds.
With the national debt in the Secretary, Gaius W. Merwin, Jr.,
First, the regu¬
any securities salesman
that
latory powers of these agencies, neighborhood of $275 billion and Assistant Vice-President of Manu¬ "guesses" or "hunches" an opinion
generally speaking, were origi¬ governmental expenditure close to facturers Trust Company.
when he is asked to commit a
Governors newly elected for a
nally enacted on the assumption one-quarter of national income,
portion of a client's holdings to
that
transportation
companies the impact of Federal financial period of two years were Eben N. the results of his verdict whatever
Blake, Assistant Treasurer of Fi¬
were monopolies and could
prac¬ operations is inevitably large ahd
it may be, is doing himself and
Union
Trust
tice discrimination in rate-mak¬ the administrative problems in¬ delity
Company, his customer no end of injustice.
Newark; Albert K.
Greatorex, If
ing, For the most part this broad volved in managing the govern¬
you don't know something basic
assumption is no longer, valid. ment's affairs exceedingly severe. "sub-agent of the Swiss Bank Cor¬ about a situation, except a super¬
Second, this step would encourage If we are to look forward to an poration; and S. Whitney Satter- ficial opinion,'then certainly you
lee of J. P. Morgan and Company.
capital investment in an essential economy based on free markets
should admit it* and ask for time
Charles F. French, Jr., retiring
industry and capital investment and individual liberties, it is; an
to try and find out what makes
must increase if economic expan¬ illusion to think; that—^except ;in President of the chapter, becomes the score add
up.
•
:
He is ex¬
sion is to be renewed. Third, the times of extreme crisis—Federal a governor ex-officio.
(3) Once a portfolio is placed in
Vice-President
of- the
intent of tbe suggestion is not financial operations can in some ecutive
the hands of a client there ate
that the transportation industry way be manipulated to serve ends First National Iron Bank of Moralways intermediate decisions that
*
should get more revenue for pro- more socially
useful
than
the ristown, N. J.
must be made. Changes in politics,
.viding the services it now pro¬ economical and efficient manage¬
tariffs,
inventions,
competition,
vides. Rather, the intent is, that ment of the government's affairs.
Now Richard-Morris Co.

industry to rebuild, I suggest that

„

investment
ness

arrangement.

tional asociation of bank loan of¬

of

that

Two Anniversaries

lose

through

revenue

of the

effect

of

confidence

believe

Losses are

profits in a well
managed investment account.
Every investor should realize this
fundamental fact of life. The best
as

of 10, 20, or 30 years, you and
gain; some should lean to high
grade and sound securities; others your customers can still go out to
look at a
should look for speculative, situa¬ dinner together and
modest amount of the estates of
tions. The amount of capital that healthy portfolio of investments*
all decedents—say $10,000—free of
you have a client and your cus¬
should be placed in bonds, preestate taxes to the legatees if $10,tomer has an advisor.
v;.
ferreds, common stocks, and the
000 of the assets of an estate were
I now expect someone to write
quality ratings that should be ob¬
in the form of government securi¬
a note to Dutton as follows: "Come
served
vary in
every
case.
No
ties that had been held a minimum
on down off the cloud fellow, this
analysis can be helpful and no in¬
of seven years. Such an arrange¬
vestment advisor can do a sound isn't that kind of a world,"
ment might provide a substantial
job of meeting requirements un¬
new market for long-term Treas¬
less he has the facts upon which
ury securities and I doubt if the
to build a portfolio that is geared

(i.e. types of Treasury
obligations) needed by the econ¬
omy; and
(3) so far as possible
the

the
I

inevitable

as

sidering,
however,
whether
it
might not be desirable to make a

minimize

dustry are necessary if it is to
•'carry the foreseeable burden dur*ihg the next

credit

clients.

exists at the time such in¬

formation is available.

con¬

has

direction.

primarily endeavor to do three
things:
(1) protect the govern¬
re- ment's
credit; (2) provide, through
and debt
management, the- type of
ex¬

needs, both of

perhaps,

Except,

hold

to

it

as

•

One of i the great

Treasury debt management and of

progress

In closing, I should like, in ac¬
cordance
with
the
request
in

business and that is to have and

them and to evaluate the situation

successful for both is to be estab¬

Placing Bonds Outside of Banks v

Treasury obligations outside the
banking system.
Considerable

duced.

is a general agreement
successful investment men
that there
is only one way to
achieve
lasting success
in this
There

among

working

enhancing flexibility

forget that tax reform, if it really
stimulated
the economy, might
very

of

segment

accumulation system.

capital

toward

the

in

lodgment of a large
it in the banking

debt and the

^ .'Generally speaking, the indus ¬
try is in very poor shape as
/•gards
equipment, facilities

in the Federal

the increase

.

and

By JOHN BUTTON

of the Government itself.

Reforming Tax Structure

opportunities lor en¬ policy has been handicapped by
couraging the initiative and en¬ two major changes in our situa¬
tion. The first, which space pre¬
that
they may be 13% less in terprise of individuals, and in the
last analysis termination of the vents discussing here, has been
1958 than
they were last year.
the rise of important financing
Until such expenditures turn up¬ present recession ancl the stimu¬
lation of a new upswing must de¬ institutions, often governmentally
ward,-1 do' not expect to see a
sponsored, not; subject
to the
renewed expansion in the econ¬ pend on the initiative and enter¬
credit policies or influence of the
omy.
If the Treasury were to do prise of individual persons. Space
Reserve System. The second has
does
not
permit
discussion of
very large in 1955, 1956 and
1957,
It
is
currently estimated

were

Securities Salesman's Corner

obligation

good and bad news to

1

Melvin Gordon Opens
.

-

(Special to The Financial Chronicle)

REVERE, Mass. — Melvin Gor¬
is engaging in a securities

don

business from offices

at

10 Pines

Road under the firm name of Mel¬
vin Gordon
was

Company. Mr. Gordon
formerly * with Edward E.

Mathews Co.

Continued

from

9

page

of the year.

On this basis, prob¬
produc¬

able 1958 bituminous coal

Our

Reporter

tion

Governments

on

The Outlook for Coal

Government

market

is

continues: "Improved

a

niques

looking to the future with the

opinion that money rates and credit conditions will continue
follow

to

refunding operation
a long-term bond,

which appeals
the debt

mainly to ultimate investors, gives a new tinge to
management program/It seems to give substance to the

opinions not yet in too strong ascendancy, however, that the infla- .
lion problem is still upmost in the minds of at least some of the ;

.

economic conditions.

have

included

rates

The

is

now

1948.

and

good home among

savings-type of investor, in spite of the fair amount of specu¬
lative interest which was generated in this issue.
Subscriptions

new

offset

the

in

loans

which

offering

of the

on

-

2%s of 1965 Deemed

T

operations.,

refunding and new money raising

Treasury Borrowing Needs
". ~

.

Will

.

to

.

;

"

-

Kidder, Peabody Co.
AJNGELES, Calif.—Alfred
J. - Stalker*
resident partner - of
Kidder Peabody & Co., has announced te appointment of
Thomas B. Drummond as head of
the Los; Angeles investment de¬
partments
•
Mr. Drummond has been active
in investment banking circles in
Southern
California since' 1925
when
he
was * associated
with
-

utilities, steel, and cement
industrials, among coal's

remain substantial.

::

Retail coal merchant deliveries

in

1957

were

estimated

at

some¬

thing oyer 35 million tons. This is
the hard residual core of off-track
commercial and domestic business

remaining after the heavy post¬
war inroads by oil and gas in the
domestic

heating
market.
The
of
attrition
here
has
slowed, and the retailer market
is expected to hold now as a fairly
stable and very valuable part of
coal's business. Coal consumption
process

dropped to about
tons last year and
probably will decrease further.
/ So far I have painted a picture
of coal's prospects and advantages,
mainly bright and all of which is
by railroads
eight * million

To

true.

complete

,

picture,

the

must, paint
some
darker tones into the foreground

I

however,
—

some

coal

the

present-day difficulties
industry faces. These

problems must be solved today if
coal is to help fill the nation's
vital need for enery

tomorrow.

the
sticky flood of imported residual
fuel oil which is diluting coal's
Los normal
markets on the Atlantic
%
Coast.
This is a thick, gummy
of

One

these

problems

is

,

member firm in
Angeles. *'
V
Kidder,
Peabody & Co. was
founded in 1865 and is one of the
largest and best-known invest¬
banking firms of the coun¬

susbtance

in home

which

cannot

be

used

heating, but is displacing

coal under industrial boilers.

Im¬




the

residential

We coal

vide reasonable return

believe America's

natural

of

reserves

consumer.

men

gas

are

ment.

a

It

is

boiler

as

is

sheer

is

of relative

areas, noticeable around the turn
of the year, the prices for stand-*
ard
grades
of coal have
now

pretty well stabilized.
Along with other basic and

economic

abundantly

sential

And
the
rate-making
sleight-of-hand which permits
"dump"
sales
of
natural
gas

its customers and

the winning of
understanding and support from
public and from Congress ori
its immediate problems of hational
scope,
the industry will
mow through the rest of its crop
the

of natural gas and drive up
price of gas in the field. We
think the Congress and the Fed¬

of

'

Joins

in

Bennett-Manning.

coal

production

and

miners and

ment

for

tion

workers,

employ¬

LOS

D.

;

Grant

but

a

transporta¬

troubles

bright

should

correct this situation.

es¬

coal will
prob¬

and

ably better than those before it.
of

the

Commission

recession

With the continued confidence

serves

Power

industries,

weather this

purpose.

eral

fully aware of this,
a period
price weakness in some

are

with the result that after

a

coal

fuel

when

pro¬
invest¬

Happily, not only coal's
but its principal cus¬

tomers

premium
fuel particularly suited for certain
purposes such as cooking, home
water heating and certain metal¬
lurgical processes—but to use it
uses.

on

managers

about.

and

future

into

move

I v have

v

the

talked

America needs its eoal in¬

,

dustry, and it will heed it more
problem is the need with every passing year; We in
for expanded research. Notwith¬ that
industry are determined to
standing coal's tremendous post¬ serve the nation well.
war increase in productivity and
efficency of use, to which refer¬
Form First Idaho
ence has been made, much more
needs to be done in discovery and
BOISE* Idaho1—First Idaho Cor¬
Another

and more ef¬
mining, trans¬
porting and using coal. There is
a
proposal now before Congress
to establish an independent re¬
search agency for this purpose*
augmenting the work being done
by the industry itself. We in the
coal industry
are doing every¬
thing we can to get this legisla¬
tion approved* and we invite your
assistance
because, in the long
run, the benefits will be realized
by the industries you represent.
The coal industry has not only
the tax
problems which afflict
most businesses but some special
development of

ficient

new

of

means

troubles of its own.

ural
ance

It

10%.
a

poration has been formed with of¬
fices

at

engage

906

in

Officers

Jefferson 'Street

Earl I).

are

modest

President; Ernest H. Tucker,
and fcobert G. Hall.

Treasurer;

Secretary. Mr. Hall
with

Wegener &

Coal is
tomer—I

increase,

to

am

sure

is

freight rates

been

no

coal.

growing

that

it is being

deficit.

service
of

one

tion on

know this
longer recip¬
in

coal

saddled

unfair share of the pas¬

the boom
of

cus¬

you

feels

it

rocal—and

senger

the

This

reasons

has

behind

in water transportation
believe there is a

We

awareness of the situa¬
the part of the railroads

themselves

and

a

desire

to

take

freight rate action which will pre¬
serve and promote the movement
of coal via rail. Such action will

fix

through relief sought

needed, and freedom
passenger
service
where it is unprofitable.
rates

as

abandon

to

I suppose a talk on the outlook
for coal would hot be considered

without a venture at
prediction.
This nat¬
urally involves the state and im¬
mediate prospects of the economy,
on which subjects you
are prob¬
ably better posted than I. It seems
complete

short-term

reasonable
we

to

Co.

Mr,

Stanley and Mr. Tuekef Were with
Western Securities Corp.

15%—the
other

the railroads' best

arrangement

an

formerly

was

Daly

allowance given many
minerals.

with

Broadhead,

President,' Cecil M. Stanley* Vice-

/

,

Oil and nat¬

same

to

believe

that

what

eall the recession is beginning

flatten out, and that ah upturn
by or before the end

may occur

to

business.

securities

a

get a depletion allow¬
27^%; coal gets only
has asked Congress for

gas
of

by the railroads including a check
on
featherbeddirig, the right to

threat to
ANGELES, Calif.—Edwin
needed coal productive capacity.
has joined the staff of
ten yekrs has been affiliated With
Bennett-Manning Company, * 8417 We believe such imports should
a?: prominent
be > limited' iti accordance
with
• * ~
•
New York Stock Beverly Boulevard.

the past

,

be fostered

porters ship it here, principally
Over the past 93 years, the from the
Caribbean, and since it
firm has played an important part
is a waste product, price it in
in financing many of the nation's
times like these juts low enough
leading corporations.
Kidder, to
capture coal's customers. Re¬
Peabody & Co. holds memberships sidual oil
imported to this couhin the New York, Pacific Coast
try, or refined here from im¬
and
other
principal stock
ex¬
ported crude oil, displaced about
changes and maintains offices in 56
million tons of coal last year;
23 cities coast to coast.
There is not only a resulting loss

(Special to The Financial Chronicle)

selling business and for

It is caused by the
of a recession. Since the capital
of natural gas under industrial
cost of a modern coal mine with
boilers, and its sale for this pur¬ its
complex preparation facilities
pose
at "dump" rates.
Pipeline has reached the
range of $10 bv
companies sell gas to industrial more per ton of annual
output,
consumers
on
an
interruptible attraction of adequate
capital to
basis when the home heating de¬
preserve the nation's needed proT
mand
is low.
Sometimes these ductive
capacity makes manda¬
sales are at—or below—cost until
tory the preservation of price and
they can capture the market. They realization levels for coal that will
often pass their losses along to
sustain the wage rates and

try.

PeabodyV original West
correspondent. Later he was

engaged hi the investment coun¬

headache.

a

ment

Kidder,
Coast

'

opportunity

More Stable Retail Market
;

active

Exchange

T. Dnrnunond Joins
LOS

>

the

,

Likely

...':

welcome

we

is expected to

liquidation is supposed to be slowly com-

/

of

production last year; although this
market will fluctuate, the tonnage

.

These figures serve to underline

coal's immediate problems which
is the price pressure characteristic

seriously injured the coal indus¬
try but has helped deplete the re¬

economy

a

classifications,

use

fuels and this is readily recog¬
But there are thousands of

come the
export mar¬
ket, retail coal merchants, and the
railroads.
Exports, chiefly to
Western Europe and to Canada
took over 75 million tons of U. Si

ing to a halt. Existing conditions means that more deposit bank
money
will be available for the purchase of Treasury issues,
mainly the short-term ones.,

economy

customers

tightness, Accordingly, it would not be out of the ordinary
continued and important open market operations by the
as well as a further decrease in the discount rate.
The decline in bank loans is showing no signs of a let-up yet
though inventory

complex

our

and other

see

even

450

probably the most important of

merely aids and abets this waste.
This unwise policy has not only

(

the money market picture as an

headache.

gas

and

Central Banks

-

In

is the right and economical

to discover these together.

.that of
.

be of help.

used the modeern way, now
and for the future, is outstanding,

participant because of the large Government deficit which will
have to be financed, along with the need for funds by corporations,
state and local Government entities, it is not expected that the
trend of interest rates, or the availability of credit will be towards

'

can

wherever

coal

...

Further Cut in Discount Rate

they

applications where the

-refunding" operations but also because of the hew money raising
which will have to be done. To be sure, there is not too much
disagreement as to the indicated size of the Government deficit
in the 1958-1959 fiscal yfcar, since it seems as though the consensus
is that it will be in excess of $10 billion. These funds will have
to be obtained in a money-market which will still have competition
from private source^ even though there may be a minor tapering
off in the amount of securities that will be offered by corporations.
On the other hand it is not expected that the flow of tax-exempt
issues will decrease very much, if at all. The elections in Novem¬
ber might even add to the neW tax-free obligations that would be
coming in for sale.
T
' ;

With the Treasury in

services

nized.

Diilring the iiext fiscal year, it is evident that the Treasury
be active in the money market,-not only because of the

;

in¬

word about the Bitu¬

more

After

Tremendous

you,

availableand well suited for the

as

-

"

wage rates of any

application for oil and natural

few instances, believe that
the 2%% bond due 1965 is a very attractive obligation and will
have considerable attraction for the commercial banks. It is their
opinion 1 at the deposit institutions will continue to fit this
short-bond into their maturity schedules since it is not expected
that the 1969 maturity will be used by the Treasury in the coming

'

some¬

and

gain in the utility
a de¬
for the year in all the rest.

cement

crease

over¬

waste,

there

Money market specialists, in not a

i

same

highest

jective.

the non-Treasury

Highly Attractive

strides unequalled

BCI's approach is factual and ob¬

V

Treasury will have

Together,

other major industry, at
time paying its miners

any

and whenever

extinguishes

long-term money market, which is concerned with the financing
of projects that are attempting to bolster a sagging economy. ;' "

mines.

an

and

if it doesn't
will give you a bad
The coal industry has

engineering

offering of the 3*4% of 1985 for new money will help
to extend the average maturity of the Government debt. However,
it will take a bit of time to determine the effect that this long-term
bond

its

in

postwar

One

The

-

at

429

tong, compared with the
This esti¬

mate reflects

gas,

minous Coal Institute: It provides

All other subscribers were given

allotments of 25%.

mining machinery
of the

of natural

kill

cooperation

dustrial workers in the world.

This kind of purchasing and

decrease

in

invest¬

It is well known that

dose

wasteful

the

is
in an upswing or in a boom.
In the amount that the 3%% of
1985 was taken by the commercial banks (40% allotments), there
was an increase in deposits and purchasing power, which will irr
measure

the

Presi¬

great national asset, and one that
should
not
be
squandered
in

by

Government bond issue is the non-inflationary

deposits and purchasing power.

of

the

type and is most generally used in periods when the economy

some

the

was

new

the

of

dent's

make

approximated $21/2 billion, with $860 million of this
coming from tne savings-type of investor, $530 million from com¬
mercial banks, and $1,180 billion from all other subscribers. The
Treasury in making allotments gave the savings-type investors
60% of what they put in for, in an attempt to get more of the
a

tremendous

recommendations

these factors have permitted coal,
in terms of labor productivity, to

for the bond

long-term bond into strong hands.

higher than it

no

workers

the

allotment of

wage

This is the result of the in¬

ment in modern

Long Bond Well Taken
a

in

costs: in

of 50 to 150%, the average
price realized for coal at the mine

Short- term offerings are used mainly during

3j/4.% bond due 1985 is finding

new

increases

material

and

dustry's

/

estimated

between

million

Advisory , Committee on
also Energy Supplies and Resources.

range

periods of recession, whereas long-term bonds are generally used
; when inflation is in the driver's seat.
New

coal

the inflationary
that period, which

of

pressures

that be are looking at the future course of

powers

~

mining tech¬

efficient

more

Notwithstanding

^ruling echelon of the money managers.
The pattern of financing that will be developed in the coming
/monetary operations of the Treasury will give definite clues as

;;to how the

and

transportation systems are
expected to aid in holding'the line
on delivered coal
prices."
We in the industry and those
who purchase coal know that its
price pattern has been remarkably
stable during the last 10 years.

pattern of ease. This is currently being borne out by the

fact that the just completed hew money and
has been so well received.
The offering of

where

490 million tons of 1957.

By JOHN T. CHIPPENDALE, JR.
The

be

can

Final
ever cancer

will

victor^

come

frost

the research laboratory. But
there

are

Many

cancers can be

when

victories

detected

todayy
cured

early and

treated promptly.

Vigtlane$

b the key to this

victorjft

There

signal!

which

are

seven

might

mean cancer*

Vigilance in heeding theol
could
cer

victory over can*

mean

for you.

1. Unusual bleeding or dlschargH
2. A lump or thickening in thd
breast or elsewhere. 3. A sort
that does not heal. 4. Change

bowel

or

bladder

5. Hoarseness

gestion

or

or

id

habits*

cough. 6. Indf*

difficulty in swallow*

Ing. 7. Change in

a

wart or mol*

If your signal lasts longer than
two weeks, go to your

learn If it means

doctor

cancer.

AMERICAN
CANCER

SOCIETY

1

The Commercial and Financial Chronicle

28

(2632)

ing of well being and a high de¬
of confidence on the consum¬
er's part in his own future.
Al¬
back upon an

depend not only upon how bad the
maladjustment is, but also upon

businessmen

consumers,

way

government react at vari¬
No one can, with pre¬

and the

stages.

cision,

maladjust¬

the

measure

ments, or forecast the reactions.
Some think that the down-turn
Is

completed

way.

right, then this recession, lasting
only 10 months, will be one of the
shortest on record. Some believe
that business activity will continue
to decline throughout all of 1958
will

and

into

turn

serious de¬

a

nonsense!

That is sheer

pression.

the decline
time this year; but

Most forecasters expect

end

to

some

difference of

there is still a wide

opinion as to whether there will
be a rapid improvement, or a sig¬
nificant period of lower activity
with

only

developing

recovery

back their orders even

salers cut
In

more.

sense,

a

the process spi¬

throughout the manufac¬

rals back

that

primary

metal manufacturers and

the nhin-

so

process,

ing industry feel the most

This is the usual pat¬

fied impact.
in

tern

magni¬

recession.

a

tories; business investment in new
plant and equipment; and lastly,

uct, has sustained very little de¬
cline from the all time record rate

reached in the third

of $440 billion

quarter of 1957. During the first
quarter of 1958, gross national
product was at about a $422 bil¬
lion annual rate, or 4% below the

February

Through

the effect of action by the govern¬

of last

in

August, and then increased
and April.
Salary and

March

March are
which has
higher so¬
and by in¬

disbursements in
3%%, one-half of
offset, chiefly by
cial security payments,
creased unemployment
wage

off

maintained

economy

a

trend for more
than 10 years, interrupted by two
recessions: one in 1949, the other
from the middle of 1953 to the
marked

upward

middle of 1954.

Neither was dras¬

by

both were followed
newed expansion.
tic;

re¬

de¬

had

this

clined less than 2% from the peak

ment.

Where We Are Today

increase

average for

over

4.4%

been

compensa¬

Even in the re¬
rela¬
tively few consumers proportion¬
ately were affected. What is more

1955, the 4.2% average

profits reached their

Corporate

peak in the fourth quarter of 1956
and declined almost 20% by the

important,

what government
and business together do.

as

Inherent

been

drop

in

employment

concentrated

tional

to

an

has

excep¬

as

Stability of Consumer

Spending.

The

There has been

high

a

degree of relationship between the
amount

of

consumer

income

and

in manufacturing consumer spending, and between
and mining. Employment in whole¬ variations in those aggregates. The
degree

sale and retail trade showed little

obvious and the correct

decline

the

(2%).
The number of
workers in government, in finan¬

cial

fields

and

in

indus¬

service

tries, actually increased.* Within
the manufacturing field, the du¬
rable goods industries—particular¬
ly steel and other primary metals,
metal products, machinery and
transportation equipment — have
been

the

hardest hit.

Soft

goods

industries, except textiles and pe¬
troleum, show practically no de¬
cline in
This

employment.
provides us with

to the nature of

our

a

clue

recession.

as

*

The biggest single factor was a

shift by retailers,
manufacturers
up

wholesalers, and

from

the

building

of inventories to the liquida¬

tion of inventories.
ers, or

When retail¬

final sellers of goods, make




expect consumer income

I do not

from last fall's

total of about 3%

general.

Aided

deferred

goods,

by

a

backlog

of

durable

for

demand

expenditures con¬
high level. Thus ac¬

consumer

tinued

at

a

cumulated

inventories

soon

were

rable

struction, this has been inevitable
but other business executives gen¬

erally have followed the same rea¬
soning. Thus, we have had a major
investment

boom

of

increasing

strength reaching its peak in the
last quarter of 1957.
During

1957,

impressed

came

purchases in line

7/». \
fV-'//v

Variations

the

families.

businessmen be¬
with the decline

tudes.

While

sumers

was

throughout
there

outlook of

the

strongly
optimistic
the postwar period,

variations

were

con¬

in

the

de¬

gree
of
optimism
determined
largely by
actual
or
expected
changes in employment and in¬

variations in

These

come.

degree

of

optimism, while not strong
enough to affect total spending,
were
an
important
factor
in
changes
goods.

in spending for durable
On the whole, even those

fluctuations

were

within

a

nar¬

spending for
durable goods was between 11%
and 13% of consumer income after

row

range. Consumer

taxes in nine of the 12 years

since
because

reason

for

high

relationship is the fact
relatively few people are

that

blessed with

an

of income.

excess

Thus the total amount that
sumers

will

spend

mined

within

limits,

under

stances, if
their

we

income

can

con¬

be deter¬

reasonably

narrow

ordinary

circum¬

know the amount of
after

taxes.

In

the

postwar period that has been true

spending for services
al¬
without exception, for over

20

years,

this

ing

by the so-called spend¬
binge for durable goods, it
94.2%.

The

high degree of stability of
spending in recent years

consumer
was

the result,

basically, of

a

feel¬

•

-

policy, beginning in No¬
has reduced the cost of
term money more rapidly
in any previous similar pe¬

vember,
than

operations and the reduc¬

as

provided

The backlog of demand for con¬
sumer

durables is gone.

sumer

has bought cars, homes and

The

con¬

other durable goods at the highest
rate in history over the last 10

He

years.

is

supplied

well

and,

generally speaking, can postpone
replacement.
This is precisely the situation in

requirements have

reserve

banks

commercial

with

additional loanable funds and they
have reduced the prime rate. Thus,
both
are

long- and short-term funds
available

cides

to

when

business

inventories

expand

de¬
or

capital expenditures.
The Government Sector

durable goods were not

the automobile field. Close to

one-

available, it

half of the families in the country

is clear that the government sector

1950

War

and

high

II.

was

in

In

generally
only 10.0%.
In

1955,

consumer

1946,

both

years

optimism,

it

of
ex¬

own

now

model
men
more

The variations

can

be related to

changes in consumer attitudes. The
Survey
of
Consumer
Finances,

and

is

'55

a

Last

fall, spokes¬
from Detroit expected to sell

ceeded those limits and was 13.9%

respectively.

which

car

a

later.

or

in

cars

than

1958

lion.

Current

sales

ning almost 30%
that the

indicate

State and local expenditures

1958.

totalled

$36

billion

have

mil¬

billion each year.

run¬

figures

below last
consumer

will increase its total purchases in

1956

for

year

construction

the

1957 figures of about six

not

is

increased

school

local

and

in

1957,

and

since

1953 by $3
With the needs

other

community

evident,

expenditures

state

and

be

ex¬

can

with the 1958 models;
impressed with their

pected to rise by about the same

but that he is

amount in 1958.

higher prices and with his net out¬
after deducting his trade-in.

purchases moved up in
quarter of 1956 and contin¬
ued to
rise through the second
quarter of 1957, when defense out¬
lays began to taper off. However,
in the light of the latest budget
estimates, both defense and non-

impressed

lay

Estimates

of

total

year now range

outlook for

The
is

sales

the

for

from four million

to about five million

up

cars.

home

building

subject to similar influences. In

the

first
at

were

a

quarter, building starts
seasonally adjusted rate

Federal

each

defense

Federal

expenditures

expected to rise in the next

are
sev¬

eral quarters.

of about

900,000 homes a year. Ap¬
In addition, both political par¬
plications for FHA appraisals have
increased
sharply from
earlier ties have increased pressure for
levels and
the easing in credit anti-recession measures that would
leads many to believe that sales either cut taxes or increase Fed¬
for the year will be higher than eral spending.
These proposals
tHe following principle:
in 1957.
Nevertheless, sellers of 1
new homes will have to overcome
government expenditures in ex¬
the

reluctance

commit
riods

at

of

themselves

consumers

to

for

long pe¬
time when misgivings

a

with respect to future

incomes

are

cess

of taxes

purchasing
firms and

collected add to the
power

business

of

consumers.

It is argued

that this added purchasing power

will be quickly spent and thus re¬

strong.

lieve
The Business Sector
The argument that the

unemployment.

hower

recession

has

Administration

The Eisen¬
has

coun¬

selled

wisely,
in
my
opinion,
against hurried, rash action, warn¬
ing that there is greater danger
from doing the wrong thing than
from doing nothing. What the Ad¬

ended, or will end very soon,
is based primarily on an improved
January-February 1958, there was outlook for business inventories.
a
steady deterioration from the These had increased
$6 billion in
exuberantly optimistic consumer
1955, $7 billion in 1956 and $2 bil¬ ministration and Congress will fi¬
attitudes of 1955. In February of
lion in the first eight months of nally do is anyone's guess.
this year, 26%
said they were 1957, to a peak of $91.3 billion.
We
should
point out several
making less than a year ago, 30% Inventories were reduced
$2 bil¬ economic facts: First, any govern¬
said they were "worse off" than a
lion
in the six months
through ment spending or tax reduction
year
ago,
and 11% expected to
February. There have been indi¬ should be directed so that - the
make less a year from now.
An cations
that, in some fields, inven¬ added purchasing power will be
increasing number felt that it was tories
may have reached a mini¬ spent on the goods where unem¬
"a bad time to buy" cars, houses
mum level.
As soon, therefore, as ployment now exists. How to ac¬
and household goods, chiefly be¬
defense orders increase or as con¬ complish this is not clear. Second,
cause
"prices are too high" and sumers
buy more liberally, some the stimulated spending by con¬
"times are too uncertain." Definite
rebuilding of inventories will be sumers or business must occur
plans to buy new cars and houses
promptly to be effective. If it is
necessary.
were
substantially lower than a
Business expenditures for new deferred and comes only after an
year earlier.
plant and equipment have shown upturn, it will add to inflationary
Consumer Spending —1957 and increases after after year without pressures. Third, any government
1958.
Consumer
income
after exception during the postwar pe¬ action must bring about desirable

sumer

acterized

increase.

credit

tion in

ter taxes in

went up to

an

The reversal of Federal Reserve

market

of expenditures
other items,
normally occurs in a recession.
down-grading

rate of

char¬

show

of

first

year,

billion on new plant and
equipment during 1958, a 13% de¬
cline from last year's record $37
billion.
The public utilities are
the only major group expecting to

for food, clothing, and

and 93.3% of consumer income af¬

that

businessmen expect to spend

that

riod of time. Federal Reserve open

(1)

In

Commerce late in March indicates

long

The

each year since 1951,

published by

Department of

While demand from the private
sector appears to be receding, it

World

even

1955.

Consumer

States

fected, although there is evidence

riod.

except

spending in

United

spending for non-durable goods is
largely of a non-postponable type
and will also not be materially af¬

been:

an

consumer

will increase.

area

the sta¬

as

It is safe, therefore, to

that

assume

far back

as

tistics go.

greater degree than taxes, which amounted to $270.2
previously.
In
fact,
consumer billion in 1955, increased by 6.5 %
spending has been between 92.0 in 1956 and by another 3% in the

to

"

has increased in every quarter,
most

Atti¬

survey

$32

/

Consumer

■

Consumer

in

with

the

Thus,

services. Some of
the
higher cost of living, and larger

absorbed, and merchants resumed

inventory

goods and more for non-du¬

rable goods and

this is the necessary result of

and 13.2%

tion.

for 1956, and the 4.3% average for
1957.

spending—to a greater
degree in the durable goods area

after taxes to decline more than a

prosperity.

cessions of 1949 and 1953-54,

fourth quarter

the

This has been reflected in reduced

sonal

year

of 1957. The lower made
by the Survey Research
Since the late summer of 1957, profits reflect not only the reduced
Center of the University of Mich¬
we have again been in a recession,
rate of activity in some areas; they
igan for the Federal Reserve Board
the
most
dramatic evidence
of also reflect the continued rise in
showed that in February of 1949,
which has been the increased un¬ hourly wage
rates during 1957, 17% of U. S. families expected
employment. Last September and amounting to an average of 5% in their income to decrease in the
October, there were 2 xk million building construction and retail
year ahead. Again in February of
unemployed, which was below the trade and 2V2 % in manufacturing.
1954, 15% expected their income
1955-i56 average.
The increased Let us now look at the outlook for
to decrease in the year ahead. Un¬
unemployment in the fall and win¬ the key sectors.
der such circumstances, they hes¬
ter—particularly the sharp rise to
itated to make large purchases and
The Consumer Sector
41/2 million in January and 5.2
particularly to buy major goods
The consumer is always the most
million in February—attracted the
on the instalment plan.
Thus in
most attention and has had wide¬ important single factor in deter¬
those years, consumer purchases
mining whether business is good or
spread political implications.
of durable goods were at a notice¬
bad. The only purpose of economic
Unemployment usually rises in
ably lower level. By way of con¬
the fall and winter, largely as a activity is to satisfy the consum¬
trast, in February of 1955 only 6%
In our type of econ¬
result of seasonal fluctuation in er's wants.
of consumers expected their in¬
agricultural employment and in omy, in a peacetime period, con¬ come to
decrease
in
the
year
of
goods
and
outside
construction
activities. sumer purchases
ahead, the smallest percentage re¬
Thus a significant portion of the services amount to 70% or more
corded since World War II.
The
February unemployment was of the total output of the nation
highest percentage in the postwar
purely seasonal in character. Dur¬ (technically called "gross national
period, 40%, expected their in¬
Even during World
ing March and April, the number product").
come to increase in the year ahead.
of unemployed remained virtually War II, consumer purchases ac¬
This attitude certainly sheds light
unchanged whereas there should counted for more than one-half of on the
booming durable goods
In recent years of
have been a significant seasonal total output.
sales in that year.
decrease.
April unemployment, high defense expenditures, they
Subsequent Surveys showed that
have been 60-65% of total output.
seasonally adjusted, of 7.5% of the
civilian labor force reflects a con¬ Thus, what consumers do is twice throughout 1956 and 1957 and in
siderable

1957

declined

than elsewhere.

each

and

sales/--'.;- .'''

Yet, the total of all goods and
services produced in the country,
known as the gross national prod¬

slowly. Before reaching a decision, peak. This indicates that some in¬
dustries
have
gone
on
to new
let us appraise our present situa¬
tion and then look at the key sec¬ highs, partially offsetting the areas
which have declined.
tors; consumer demand for du¬
Another indicator of overall ac¬
rable goods, particularly automo¬
biles and homes; business inven¬ tivity
is total personal income.

Our

Thursday, June 12, 1958

.

appraisals of future
peak of $303 billion. Unless con¬ in corporate profits which began
sales, or decide that they are car¬
in the fall of 1956, with increasing
sumer attitudes deteriorate further,
rying too much inventory in pro¬ important, their temporary unem¬ I would expect them to continue costs generally, particularly the
portion to sales, they cut back on ployment or the reduction in hours in 1958 to spend close to 93% of increased cost of borrowing money,
their orders.
This usually has a worked did not affect the basically income after taxes. I expect con¬ and with the existence of excess
cumulative effect because whole¬ optimistic outlook of consumers in sumers to
spend even less for du¬ capacity in some fields.
less optimistic

that improve¬
turing
If they are

and

under

is

ment

he was able to look
improvement in his

August
has

come

he has
looked forward to improved per¬

income,

And Consumer's Attitude

consumer in¬
less than 2%.

consumer

gree

A Look at 1958 Economy

the

Since

most each year

Continued from first page

ous

.

.

i

nine

months

of

1957.

Con¬

spending increased proporspending for durable
goods declined almost 5% in 1956

tionatelv but

and remained below the 1955 level

throughout 1957. Thus the increase
in consumer spending was directed
to non-durable goods and, to an
even
greater degree, to services.

V.

reasons

for

this

have

the tremendous growth

consumer

and

business

reaction.

Namely, it must promote private

activity, (2) the rapid confidence if it is to increase total
technological improvement, spending. <
The Administration has taken a
and (3) the fact that businessmen
of
set
their
steps which are in
sights,
generally,
on number
building productive capacity, ade¬ keeping with these facts. To trans¬
late authorized expenditures into
quate not only for current sales
but
for
the
large
population employment at the earliest possi¬
growth expected in the early '60s. ble date, for example, it has asked
For the public utilities, where it for a speed-up of road building
takes so
long to complete con¬ and all other construction projects

in business

Volume

187

Number 5750

.

.

.

The Commercial and Financial Chronicle

(2633) ;29 ;

already under

will determine when business will

crease

in

Defense

shift from inventory liquidation to

passed

on

way. Similarly, the
Department announced a
speed-up in awarding contracts for

trucks

and

trailers.

signed

to

improve

particularly
field,

one

in

of

-

fected) by
chases.

This

The

af¬

most

areas

reduced

civilian

pur¬

Administration

has

pro¬
en¬

able state unemployment compen¬
sation funds to borrow from the
central

Federal

fund

in

crease

business

and

extend

the period during which unem¬
ployment payments are made. This
would relieve the dire suffering re¬

sulting from protracted unemploy¬
ment.1 This has the advantage of
being
limited
to
the
current

could be
in the form of higher
prices to the consumer. However,

in¬

An

investment

in

in

plant and equipment also awaits
business confidence in a resump¬
tion

of

profitable

utilization

out

In

in

industries

union

cost-of

Jan.

the company should be able to continue
earning 7%
this basis.
'

are

of

both,

or

by government, management and

with

the

public works

or

soon.

labor will result in

minimum of

a

built-in

inflationary
Sound economic growth

increases and

exceeded

a

pressures.

be

can

re¬

sumed before the end of this year,
but it can be sustained only with

in¬
in¬

Public

come

which,
generally
speaking, would result in signifi¬

they
do

that

such

projects,

while

relieve unemployment,

may

not

experience of the

add

to

confidence

and

hence do not stimulate expansion
of

business purchases.

consumer or

Tax cuts

preferable to pub¬
lic works programs. They should
are

be designed to improve our pres¬
ent tax structure.

be

limited

to

the

To

brackets.

be

must

promote a
fidence
which

spending by
ness.

They must not
lower

climate
will

will

merely

of

con¬

stimulate

and busi¬

consumers

Otherwise, the

ceived

income

effective, they

money

be

re¬

hoarded,

i. e., added to cash or savings, and
will then have an unwanted in¬

flationary

impact

when

spent

at

future date after the upturn

some

Summary
is

It

desirable

in

not

to

attempt

another

rolling

to

very

sharp

very

the

Natural

goods

railroads,

industries,

steel

Prior to

continue to be, the crucial
question is that of consumer atti¬

ably

The

tude.

consumer's

confidence

(in his own future well-being) has
.been sufficiently shaken to cur¬
tail his purchase of durable goods

significantly. Unless it is shaken
further, he will probably not cur¬
tail his expenditures for services
and for soft goods. When his con¬

to

years

On Aug. 1, 1957, the company made another
important pur¬
chase, acquiring the properties of the McCarthy Oil & Gas Corp.,
thus more than doubling the
scope of its producing operations and
adding materially to estimated reserves. The company had for¬
merly owned whole or partial working interest in leases covering

area

ments.

Its

intrastate character

obtain adidtional

reserves.

for

should

make

it

relatively

easy

to

gas

to any great

extent, due to the

While Houston
now

Natural Gas

has to compete

with United Gas

favorable terms in
The

April
has

1958.

been

as

1955 for

stock

common

was

a period of 17 years.
split 3-for-l in 1948,

—

in

*Common Stock Record

(Mill.)

Earned

Dividend

w

July 31

1.958

2-for-l

*

SApprox. Range

V$1.87

:j:$ .80

$26.7

1.42

.75

1956

16.8

1.13

.50

19

1955

15.2

.91

.50

141/2-11V2-

1954

14.9

1.08

.50

14

-IOI/2

.50

11

-

91/2

.40

10

-

8V2

'

.40

1949

7.1

.73

.40

9

-

if

6.5

.71

.37

9

-

.65

.33

81/2- 61/2

rate

long-term

on

to buy homes

and

durable goods on time, and to seek
cash loans to clear up his accu¬
mulated
This

bills.

upturn, I think, will

within

the

months
There
mind

next

will

and

is
as

also

three

he

willing to commit himself
in the future
recent

credit

with

been

the

will
as

be

freely

he has been in the

The

past.

consumer

have

as

six

slowly.
question in my

whether

to

come

to

progress

a

chief
in

users

recent

"young

of

years

marrieds"

growing families.

Generally
speaking, they knew nothing about
the long depression of the '30s.
This

is

their

first

S!As

contracts,

reported

^Estimate

and other

cars

_

_

^Calendar

taste

of

well,

up

we

are

not

to

system is really beyond recall, and

play sedulous

it will

more

financial

make

cautious

them

in

commitments

Poor's.

ended April 1958 by President Wimberly.
following split-up.

years.

more

in

first task

the

The

company's future expansion will probably follow a more
of growth.
President Wimberly has estimated that
$36 million may be spent for construction over the five
ending July 1962, which would be financed about as follows:

normal
about

years

rate

Debt

the

breach

seems

than

course

of

consumer




buying

in

the

observance.

Our

to be to release ourselves from the

was

wrong.

$10,000,000

Advisory Gouncit
Alexander C.

Muir, Manager of

the Research & Statistical Depart¬
ment of B. W. Dyer

& Co., Sugar

Economists and Brokers, has been

stock equity was only 13%.

Futures, Inc., stated that Mr. Muir

stock will have

will

Preferred

Common

Stock
Stock

3,000,000

Options

Internal Cash
As of

July 31, 1957, the

\

common

been converted

into

2,000,000
21,000,000

common

shares,

on

the basis

specialize

in

sugar

for

Other

Fund.

Futures, Inc. Adds to

appointed a member of the Ad¬
visory Council of Futures, Inc.,
the commodity mutual fund.
In
making the announcement
Richard D. Donchian, President of

on

fu¬

to communism,

strange notion that whatever was (in years past)

an

first

some¬

taking
in

ape

sort of hybrid system which can hardly en¬
indefinitely.
It will not help to "pass the buck" to "experts."
They would not be able to find a better basis than
"the old, world-wide, self-regulating international
trading and investment system" — which, as a
matter of fact has often in the past been honored

81/2- 71/2

average of 234 million cf per day having been sold in
four months this year compared with 246 million last
President Wimberly is optimistic regarding the development
of gas air-conditioning. The combined heating-cooling appliance
which is being developed by Arkansas Louisiana Natural gas
(which purchased the Servel model and facilities and is adapting
them to mass production) has met with a good industry reception
and is thought to have excellent promotional possibilities.

the

should propose

year.

wide¬

ture.

The

&

we

dure

months

rate

....

to foreign materials is growing in

access

By 1962, it is expected that the $10 million convertible preference

think

what

Standard

1Z

Steven*on

some

91/2- 71/2

Favorable weather conditions probably had something to do
with the recent good showing.
The industrial load in holding up

spread, prolonged unemployment.
I

by

for

^Present indicated

steady

Adiai

trade abroad and

^

71/2

5.6

1957

-

then upon what basis should the experts build?
The world now seems to be operating within

7

1948

secure

If the older

-111/2

'

.40

:

Experts be set

191/2-16

_

Communist

—Adlai E. Stevenson.

251/2-19

1957

___•

of

-

should be their responsibility to prepare an
agenda for the regeneration of the free world econ¬
omy upon which the nations can agree and act—
joint measures to secure sustained growth, joint
negotiations for a low tariff or free trade area,
joint undertaking of a long-term aid and invest¬
ment program, and joint agreement on adequate
working capital fo^world trade and convertibility."

follows:
Revenues

Yrs. End.

and

we see,

It

Adjusting for these two split-ups the growth record

.53

mal

plans
although

.

that a Committee
comparable to the group which
laid the groundwork for the Marshall Plan in 1947.

of the Houston market compared
Its operations in the industrial mar¬

.75

a more nor¬

large issue of

immediate

Exchange

t'fi

about 43%

serves

7.2

too, commit himself at

Stock

Wiong Answer

a

it recedes,

as

"I believe

of

.9.2

then,

the

no

in the world's wealth.

climate.

warm

1950_.

will

an

stock,

proportion to our soaring population and diminish¬
ing resources. Moreover, the change comes at a
time when the emerging peoples. of Asia, Africa,
the Middle East and South America are
demanding
with more urgency than ever before a larger share

The 1,200-mile pipeline system obtains

1951

He

with

split

are

time,

need for

The company now has gas reserves (owned and controlled) of
2.1 trillion cf. or nearly 20 times present annual
require¬

the goods

rate.

of

has

give this crisis its
full dimensions, it is occurring
just at a time when America's

about

.66

normal

the

on

"And to

oped leases.

1.01

more

conversion

company

the New York

on

power.

McCarthy proper¬
producing oil and gas
together with 7,800 acres of undevel¬

13.6

he will begin to resume
purchases of durable goods at a

The

reinforcement

.

11.1

values,

cents

plain dumping, all bent to a
single political purpose — the

run.

1952

good

80

1

and

or

arranged, which still has

nearly two

1953

are

of

25^

around

trade, aid, barter, technical as¬
sistance, raw materials at cost,

debentures to institutions and sale of convertible
preference stock
to the public. This more than doubled the
capital structure. A $6
million revolving bank credit was also

fidence is somewhat restored, and
when he becomes convinced that

being offered

rate

price

expanding, eager to take its
place, the new Communist tech¬
niques of grants, gifts, loans,

ket, in this area, also compare favorably with those of United, both
companies selling at the same spread. The company's franchise in
Houston, which would have expired in 1957, was renewed on

incomes

stock.

listing its stock

same

doubling of unemployment above
what may be called a normal level.
consumer

minimum

witnessing,.! believe, the last stagesv r ';
of the old,
world-wide, self-regulating,; interna- ' ■
tional trading and investment
system which we inuhv\
America have largely taken for
granted." vAt the
jr

company bought most of its gas from
Houston Pipe Line Co. and was the
largest customer of that com¬
pany. On Nov. 1 it bought the entire capital stock of the
pipeline
from Atlantic Refining Co. for some
$38 million (including debt
outstanding). This amount was raised through sale of bonds and

industries, and despite the virtual

total

preference

"We

Noy. 1, 1956, the

Corp., it

well maintained and will prob¬

a

The stock is selling at 13.7 times current esti¬
times the adjusted earnings of

Seeking

entirely within the State of Texas.

with 23% some 20 years ago.

Since

dividend

earnings of $1.87, or 16
after allowance for future

j

primary metals, and certain other

are

equity financing to
:

over-counter

is 3.1%.

supplies natural gas to the Gulf Coast
area of Texas, serving a
population of 1,750,000 including portions
of metropolitan Houston. Other
important cities served are Corpus
Christi, Texas City and Baytown. In these days of severe regula¬
tory problems for gas companies doing an interstate business, Hous¬
ton enjoys a considerable
advantage in that its operations are

other

and

recent

current

Gas

slightly, despite the
impact on the con¬

durable

sumer

the

At

indicated

company's sales are about 42% residential, 10% commercial and
48% industrial. Deliveries are not subject to seasonal fluctuation

consumer

hold

this step may be considered in the future.

incomes have been

the total of
goods and services produced and
affected

always endeavored to

by plowing back earnings.

from 82 producing fields.
Principal industries in the area include oil production and
refining, petro-chemicals, food processing, farming and livestock
raising. The petro-chemical industry is a heavy buyer of gas. The

Nevertheless,

total

Houston Natural Gas Corp.

;

Houston

>

We

read¬

justment, affecting only a few in¬
dustries without having widespread
implications. We are in a reces¬
sion.

;

wells in the Gulf Coast

draw these threads together.
are

has

about 13,500 acres with 46
producing wells. The
ties added whole or working interests in 110

has been resumed.

on
'

By OWEN ELY

expenditures

only after the
has passed. It is also

to 7^2%'

Dividend payout in the past has been on the .conservative
side, and this policy is expected to continue since the .company

for

Utility Securities

authorizations

the

Natural Gas has been earning a return of about
its average net plant account and in the 12 months ended
31, the indicated return was 7.43%. If:is conjectured that

51/4%

has

strongly against "make work
projects" and against public works

emergency
clear from

Houston

on

$1.59

Administration

1930's

6-8%

mated

out

cant

years

the yield

price stability.

emergency.
The

Utility regulation in Texas is largely in the hands of the
municipalities and is generally regarded as cooperative, encour¬
aging utility growth on favorable financing terms.
In recent

the private sector is arrested very
It is to be hoped, that action

which

living formula. For

which

of common for each share of
preferred. Including
optioned stock and plowback Of retained earnings,
equity ratio should improve to 30%, it is estimated.

of

is inevitable unless the decline in

number of years, annual wage
creases

the

government action in the form of

contracts

assured annual wage

particularly,

shares

5.8

also-sales

of

volume has declined the most
those
which set
the
fashion

the

election year,

an

of

point

me

long-term

type of competitive econ¬
the consumer calls the turn.

tax cuts

connection, let
the

that

our

omy,

such facilities.
In this

which would

measures

inventory accumulation.

"

,

posed

de¬

automobile

the

the

is

employment,

productivity

•

members

of

the

Futures, Inc. Advisory Council are
Dr. Warren F. Hickernell, econo¬
mist and financial consultant, and
John

M.

search

Manager, Re¬
of Greene &
New York Stock

Westcott,

Department

Ladd, members

Exchange.

With Central States
^Special to The Financial Chronicle)

MANSFIELD, Ohio
Smith is

now

—

John M.

with Central States

the Investment Co., Walpark Building.

c*

W

The Commercial and Financial

(2684)

Continued

First Boston Group

The State oi Trade and

Niagara Mohawk Bonds
Aw underwriting group headed
by The First Boston Corp. is of-

feriqg publicly today (June 12) a
"issue

new

of

$50,000,000

Corp. The bonds are priced at
101.835% and accrued interest to

3.80%

to

The underwriters bought the is¬

-

June 11 at competitive sale on
bid of 100.58999 for the indi¬

sue
a

cated coupon.

Niagara Mohawk will use the
net
proceeds from this sale to
finance in part the 1958 construc¬
tion program. Last February the
company received from the sale
of preferred stock, about $24,000,000 which is also being applied to
construction costs.

The 1958

$102,000,000, and it is expected
a
slightly smaller amount
will be needed for such costs in
that

1959.

The npw bonds, which are non¬

refundable

prior to June 1,

on or

1963, are redeemable at general
redemption prices ranging from
105.21%
12

for

those

called

in

the

months ending May 31, 1963, to
after May 31, 1987; special

•

Niagara Mohawk produces and
distributes electric power and dis¬
tributes

natural

western

gas

in

in

areas

and

central New York
company's
electric
territory has a population
of
about
$,300,000
and
about
I,500,000 are served with natural

State.

The

service

About

gas.

80%

of

consolidated

operating revenues is derived from
the sale of electricity;
the re¬
mainder from the sole of gas.
Total

.

t

consolidated

operating

revenues of the
company

and sub¬

sidiaries amounted to
$257,990,000
in the 12 months ended March
31,

1958, compared with $254,969,000
in the calendar year 1957
and
$249,326,000 in 1956. Net income
in
the
respective
periods
was

that labor

on

Dec, 31

leaders

worried

are

about

the

of

special

"We
we

are

For the like week

duction

Hague,

,

for

said

much the

trade

or

ten million

same

r

thing.' Unions must

lose power.

of

the

company

1957, adjusted to

II,556,420 shares of

adjustment for

sea¬

common

stock,

value.

Elsin Electronics Corp.
Common Stock Issue

Offered to Investors
Lee

Company, New York City,
June 12 offered 340,563 shares

of Elsin Electronics
Corp. common
Stock at 87% cents per share.

Approximately $100,000 of the

proceeds will be used to pay off
obligations and tp expand per¬
sonnel and
equipment. The bal¬
ance of $145,000 will be
added to
working capital.
The company manufactures

ious

components

for

var¬

microwave

applications which are used - in
radar assemblies. It also
produces
test equipment and certain carbon,
products
other
f

*

used

in

transistor

and

semi-eonductors.

extensions of credit, it was further reported".

r

> :/ ;'/■

,

of electric.-energy distributed by the-electric
industry for the week ended Saturday, June 7,

power

Holiday, week.-

week ended

-

?

'

June

7, 1958, output increased by 526,-;
000,000 kwh. above that hLthe previous week, and was 131,000,000
kwh. higher than that of the comparable 1957 week- and by 730,000,000 kwh. above that ?ofTthe week ended June 9, 1956.
■*
:...

Loadings Fell^7;2% Below Previous Week and

Loadings for the week ended. May 31,. 1958, totaled 529,547
decrease of .141,498 cars, or 21.1% belpw the corresponding

week, and a decrease jpf 189,662 cars, or 26.4% below the
corresponding week in 1956.•/,,/.:, *;
:
;•
.

'

automotive

industry expiration of union contracts at
plants of General Motors, Chrysler and Ford failed to stymie
automotive production the past week, "Ward's Automotive Re¬
ports" declared on Friday last.
The statistical publication
called for

an

11%

added that programs

jump in passenger

car

a

week

production to

an

Automotive Output

ago

Last week's

66,574

car

and

cars

of 9,057 units
states "Ward's."Last week's

c'ar1

trucks amounted to 90,669

above-that of the

units, or an in-r
previous week's output,

J

McKelvy

PITTSBURGH, Pa.

Drass, Jr, is

now

— Jamas
H.
with McKelvy &

Company, Union Trust Building,
members

of

the

New

York

and

Pittsburgh Stock Exchanges.
formerly with the First
to« Corporation.

Bos-




He

;

■./', /<>

/- //'<•

;&utpu'Hncii6a'sdd

'abovO that of the previous
output'rose by 1*609 vehicles

week .by

7,448 units. vVhlle'truck
during the week. In the'correSponding week last year 129,517 cars
and 23,370 trucks were assembled.
'- s
"
/
, ■

inventory paralleled the

Last

week the
agency reported there were 16,647 trucks made'
in the United States.' This compared with 15,038 in the previous

55,000-unit cutback in April, paring the count to an estimated
755,000, a 49 days' supply.
However, 14 of the industry's car assembly lines were halted
all last week because of
inventory adjustments.' Included were
six Ford Division plants, four
Mercury factories, two Buick-Oldsmobile-Pontiac units, a Plymouth plant and
Chrysler Division's
Detroit works. Continuing on a six-day
scheduling were Amer¬

week and

23,370

a

j(ear' a&o'.P* *
r'
figures',for .'last week

Canadian output
will be given

Lumber

Lincoln, plus one Chevrolet plant.' '
'
Truck output last week was
programmed at 16,647 units com¬
to the prior week's total of 15,038, "Ward's" further re¬

unavailable and

were

next.-week//^/'/.^;//,/-./V;■</.

/.

.///:,■

■

'/

Shipments; Rose ;1L1% Above Output in the
Holiday Week Ended May 31, 1958 /

ican Motors and

Lumber

shipments of 471 reporting mills in the week ended
wereCtll.l % above production, according to the

May

ported.

National Lumber Trade 'Barometer.
?ame period new or¬
ders were 0.7% aboye production. -Unfilled orders amounted to

Steel Production This Week Estimated at
63.8% of

31,

and

new

week, "Steel" magazine stated on Monday last.
Steelmakers operated their furnaces at 60.5% of
capacity, up

Higher • Than Like: Period

points from the previous week. Output was the highest for
any
year,
About 1,630,101 net tons of steel for ingots and
castings was produced.
This reflects a better than 25%
improve¬
ment since the low point of the
year six weeks ago.
District production was
spotty, ranging from 97% of capacity
in St. Louis to 35.5% in Cleveland.
District ingot rates in St. Louis

74,
up

7.5

Commercial and

there

with

liabilities

from

46.

The

tailing failures

Sea¬

rose

tion and service tolls

talk

is

about

Five

consumer

I

,

geographic

among

manu¬

Meanwhile,

28

from

23.

a year

More trade

re¬

regions accounted* for

all

ago,

but construc¬
*».;■

of

and

•

.

the week-lo-

The Middle Atlantic States reported an up¬
turn to 119 from 89 and the js'outh Atlarifie a jump to 35 from 18,,

in

baged th 65 'from 64.

No change -occurred

regions, including'the "East North Central States which
The New England and West North Central-States re¬
ported the only declines during the week. Trends from a year
ago were, mixed. -Mortality
^ran above 1957 in five regions, whereas
dips prevailed in four region^.3 There was a marked decline in the
Pacific States, contrasting"^th^considerable increases in both

prospects for higher

cut base prices on most of its
prod¬

two

held at 51.

durable goods will stay near
present levels

through 1958, this trade weekly declared.
labor, materials, freight and taxes put

<

,

more

week rise in failures.

City, 111. In effect, this reduced
the company's geographical
price differential from $4 to $2 a ton.The company made the move to
discourage shipments into the
St. Louis district by outside
producers.
+ ._
Prices of

or

ftdl'TMow their 1957 levels.

/ while the Pacific total

the

the

mildly* fb 169 -from 145, wholesaling to 35

manufacturing conqerns sufeciimbed than

observed.

all

...

.

week's/sharpest increase appeared

from 27 and commercial service to

hedging against a price increase on July 1.
Continued and modest improvement
through June is likely,
but the outlook for operations after July is less
certain, "Steel"
when

;

of. $5,000

facturers whose casualties climbed to 61 from 37.

and that buyers are

time

in

All industry andtrade groups-suffered higher failures dur¬
ing the week except'ebnstrucfion,'where the toll dropped to 32

improvements in construction and farm buying are
spurring
plates, structural, reinforcing bars and wire products

a

325

to

climbed to 283
from 250 .in the previous wefek iand 251; last year.
An increase
also occurred among small failures with liabilities under $5,000,
lifting their total to 42 from 28 a week ago and 38 in 1957. Forty
of the failing concerns, had liabilities in excess of $100,000 as
against 19 in the preceding, week.

demand for

At

rebounded

257 in' the comparable week.1' Continuing above the
level, business mortality exceeded by 16% the total of

Casualties

points; Cincinnati at 61, down 2 points; Mid-Atlantic at 58, up
points; Pittsburgh at 57.5, up 2.5 points; Buffalo at
53.5, up 7
points; Youngstown at 49, up 4 points; New England at
40, no
change and Cleveland at 35.5, up 0.5 point.
May's output of 6,350,000 tons surpassed' April's
by 800,000
tons. For the first time since last
September, we had a monthto-month rise in the ingot rate. Furnaces were
operated at 53%
of capacity, compared with
47.8% in April.
Industry observers attribute higher production to the fact
sonal

.

Year Ago

were

pre-war

9

buying to fill out impoverished stocks.

failures

.279 in the similar week'of J939.

97%, up to 10 points over the previous week; Wheeling at
to 0.5 point; Far West at 71, down 1
point; Chicago at 68.5,
4.5 points; Birmingham at 67, up 0.5
Doint; Detroit at 65, up

are

industrial

a

from the low of 278 in the preceding holiday
week, Dun & Bradstreet, Inc., reported. Casualties were notice-'
ably higher than a year <Tago when 289 occurred or in 1956 when

at

consumers

.

week ended June 5,

up

that

.

Business Failures Rose in ^Latest Week and Were

the sixth straight

were

Production.was 7.8% below; shipments 2,8% below
were
S7.4.% below.jhe previous week and 16.4%

orders

below the like week dn J.957.

Responding to improved demand and hedging against a possi¬
July 1 price increase, steel output last week inched up for

4

1958,

35% of stocks.

Ingot Capacity
ble

the Middle Atlantic^and East VNorth'.Central States;

..

;

.

'

r

•

Mountipg costs such
pressure

oh

'.vshr.*

as

There

>

,

"

^

Wholesale Food Price Index Eased Somewhat

makers"? to

elevate quotations.
But they are restrained
by slow. business*
rugged competition, overcapacity and anticipated * customer resistance,

\

output totaled 74,022 units and compared with
in the previous week. The past week's produc¬

crease

previous peak of 380,000 set in January. In the period
May 21-31 purchasing scored a 13% improvement over May 11-20
to record the best 10-day effort since December.
new

11% in Post-Holiday Week

car

(revised)

tion total of

the

May reduction in 1he

-

,

esti¬

74,022 units. In the week preceding, the Memorial Day
holiday limited output to 66,574 automobiles.
The weekly production gain followed a
month-end burst in
auto buying which carried entire
May new car sales 8.5% over
April to a new monthly record for the year. "Ward's" counted
May auto sales at 394,500 units compared with 363,700 in April

The

Advanced

-

,

-

Automotive production :for the week ended June 6, 1958,
according to "Ward's ('Automotive Reports," rose by 11% follow¬
ing declines in the. Memorial-Day week occasioned by observance
of the holiday and. shutdowns, for inventory adjustments.
' <
/

mated

and

weekly production

average

1957

ucts by $2 a net ton, f.o.b. Granite

.

on

.

the

prices, Granite City Steel Co.

*

'

Now With
>

s

cars, a

purchases of automobiles and personal loans accounted for most

In

pro¬

-

21.1% Beloiv Like 1957 Period

week this

r

137.8%.

Loadings of revenue freight for the week ended May 31,
1958, which included the Memorial Day holiday, were 41,123 cars
or 7.2%
below the preceding' week. /

re-

bonds
thq sale in February of pre¬
ferred stock, consisted of:
$466,305,000 pf long-term debt; $1,450,000
shares
of
$100 par
value
preferred stock, in six series; and

on

amount

For the

Car

sonal factors, the Federal Reserve Board
reported. A continued
rise in the repayment of the old debt offset a
slight gain in the
new instalment
debt during the month.
Increases in credit for

new

or

*87.9% and

the actual weekly production

was estimated at 41*681,000,000 kwh., according to the Edi¬
Electric Institute...Output gained ground the past week above

.«

manufacturing, virtually
manufacturing.

The Consumer instalment debt outstanding declined in
A.pril
from the prior month by $123,000,000, after

of the rise in

ago,

1958,
son

noted that during the last ten years some
workers poured into the labor force. But it added

that most of the addition was outside of
all of it outside the production phase of

of

•-'/.! \

month ago the rate was

A year

}.V,riV;,

.

that of the Memorial

paper

new

to

Output Picked IJp Ground in Post-Holiday /Week

The

>

This

1947-1949.

Electric

maintain

Woodcock has

of steel

equivalent

1958,

wefek ago."

*Index of production is based

•

light and

attract white collar workers

9,

work force, while today

get office and technical people into the union if
our
bargaining position," admits Howard
Vice-President of the Steel union.
The' autoworkers'

Leonard

a

1,412,000 tons.

placed at 2,214,000 tons,

was

must

to

''107*3%

average

June

*

the union,

into

beginning

140,742,570 net tons compared with actual production of 62.4% the
week before.
-;
'■

drive to lure aluminum white cellar workers

new

"

utilization, of the Jaii. 1, 1958 annual capacity

63.8% of the

rapid growth of white

metalworking magazine stated that this is why unions
are
stepping up organizing drives among white collar workers.
Within the next three weeks, it reported, the United Steelworkers
a

week

$1.67.

up

Output for the week beginning Jpne 9, 1958 is equal to about

The

will kick off

the

ton,

gross

Sjteel Institute announced that the

capacity, and 1,685,00p tohs.

It noted

industry while the number of blue collar work¬
virtually standing still.
/
-vVv
"

labor represented 40% of the non-farm
it speaks for only about 30%.

for

capacity

scraping

a

•

1,723,000 tons of ingot and steel eastings (based on average weekly
production for 1947-49) as compared with an actual rate of *104.9%

"Top leaders know very well that labor is really losing
ground if it marks time while the rest of the economy expands,"
"The Iron Age" commented.
It observed that in 1950 organized

and

par

is

ers

fleet the current sale of

no

are

Iron -.and

pared

! Capitalization
t

users' stocks

some

American

operating rate of steel companies will

collar workers in

$27,840,000; $26,430,000; and $28,397,000,

dropping and

Industry

Meanwhile, "The Iron Age" reported this week on
study of the effect of automation on union membership.

100%

redemption prices over the same
period range from 101.34% to the
principal amount.

still

are

advance^ for the fifth consecutive week. "Steel's"

composite advanbed>.fol$36vl7

The

the bottom of the barrel.

con¬

struction program is expected to
require
expenditures
of
about

„

inventories

general

mortgage bonds, 3%% series due
1988, of Niagara Mohawk Power

yield
approximately
maturity.

Scrap prices

4

page

scrap

Offers $50 Million
1

from

Chroni
Thursday, June 12, 1958

<

slight- decline last week in the wholesale food
price index, compiled by 'Bun & Bradstreet, Inc. On June 3 the
index registered $6.60 for a decrease of 1.2.% from the $6.68 of
was

a

$

•,

;

the preceding week, but it exceeded the
$6.20;of the corresponding
date a yieai;-ago
■■
/'X,':'X{Xv

Higher in price
sale

cost

were

coffee,

sugar,

oats, bellies and lard.

were

flour,-wheat,: corn,

-

coverings and linens improved somewhat.

rye,~

The index
of 31

tion

represents the sum total'-of the price per pound
foodstuffs and meats in general use and its chief func¬

raw

is

to

show

sale level.

general

trend of food
"<••• •«"

X. .jV->

prices at
v*-:

the

!•

'""'X

.

There

was

decline*

fractional

a

ported.

.

in the general

2%

commodity price
level last week.
Price; decreases in coffOe, sugar and hogs offset >
increases in steers, lard-and most grains.. The
daily wholesale
commodity price index, compiled by, Dun X&£ Bradstreet, Inc.,
slipped to 280.75 oh June 2 from 231.01 a J week
earlier, and was
below the 286.59 of the
corresponding date a year ago.
Reports of dry weather in growing areas stimulated the buy-

Retail

and rye

reports that

Continued

Whole¬
fractional rise in soybean prices, but transactions
remained close to those of a week earlier.."X
<
-

buying

was

somewhat.

moderate

a

Sugar

amounted

to

decline in sugar trading, prices

distribution

159,762

short

prior week and 175.326

a

during

the "Week ended May 24
compared with 152,981 in the
ago.
Purchases of coffee declined

year

also

slow

of

ness

tons

slacken.

to

There

page

trade ob¬

was

At

the responsive-

up

Federal

cized

time

was

Reserve

the

on

Reserve
term
•

that

adopted,
basis

misconception

Although

System

the

it

of

that

current

criti-

a

the

Federal

System influenced shortrates primarily by
selling short-term U. S.

or

interest rates by buying or selling

long-term
fact

U.

S.

ber

only

to

together

when

securities

were

move

short-term

short-term

to

might

being close to'that^'of both the prior

week .and the.similarrt957 period. Moiie sales^promotions stimu¬
lated sales of new '.passenger
cars, but volume was again consider¬

Central

States -0

to

-f-4-%;-Middle

Atlantic

tion

*

girls' clothing

was

week

a

ago.

There

was

a

money

not

so

Long-term

have been anything
even

result,

a

nobody

any

longer

doubts, in the way they doubted in

the Systems ability to inlong-term intei est rates

1953,

Vol¬
close to that of

moderate pickup from the

is

markets

lethargic,

As

fluence

decisively
vention

in

without direct interthe long-term market*

,In fact, in the most recent period,

; starting

in

mid-November,

the

prior

in the call for television, sets and

System has been

one

bedding held total furniture 'sales somewhat below

year

System to the

this implies.

as

though System
market operations have been
confined almost wholly to bills,

comparable 1957 week, v Men's stores reported appreciable
gains in sales of sports jackets, slacks'and lightweight suits.
Although the buying of summer outdoor furniture and case
goods advanced during the week, declines in' upholstered mer¬
that of

of events since

open

and

the

chandise and

course

interest rates
-but

sportswear and moderate year-to-year, gains prevailed.
in fashion accessories and

a

capital

simple

-fl and East North Central and Pacific-Coast States —4 to 0%.
Women shoppers were .primarily interested in summer dresses
ume

of the

a

1957,
factor in

,

on

rates, both long and short,
record. In this case, the initial

drop in rates followed the lowering of discount rates without any
marked change in either short or

,

•

long-term holdings of U. S. securities in the System,
been

.

.

portfolio. It has

widely noted that the basic

'

In

contrast

Retailers

to the

those
in

of

a

nationaL

Philadelphia

and

St.

Louis, reported

a

in vqlume of air conditioners from the
New

styles

stimulated

marked

previous week.
at numerousXfall apparel

introduced

wholesale

,

•,

;

close to that of

Initial

a

week

orders

earlier, bookings

for

were

An

immediate




.

earning

or

from the reserve

subtracted

or

Since these impulses toward

base.

the supply of loanable funds relative to the demand. It may also

expansion
or
contraction
arise
a change in the availability
0f reserves, their effects are riot
concentrated on the security that

in

useful

review

cent

this

actual

connection

experience

of

to
re-

years,

from

oped

the

behavior

the

of

happened to be bought or sold by
the

provide perspective with which to

Reserve.

They

are

tvnes of assets

commonlv'found

in

bank portMios

market, the relative importance of
different System operations in affecting the cost and availability of

Federal

directly dispersed, rather, over all

f,irthprmnrp
,

h

£

f

'

reserves

takp

change

matter what factor is resnonsi-

* *

th

+h

rent recession might be mitigated

by

direct System

the

long-term

intervention

market

for

U.

in
S.

Capital and Credit

;rrGa^ctive 0f

and

on

All

Reserve

System

exert

an

effect

upcm

the capital and credit

kets.

It is not proposed, however,

to

analyze

which

here

Federal

the

mar-

manner

in

discount

Reserve

in

the

an

basic

markets

short-term

in

or

term

the

demand

purchase

(3)

policy actions of the Federal

the

in

the longmarkets, they are the same
irrespective of whether the re¬
sponsible factor is a change in re- *
serve
requirements, a change in

money

Interest Rates

«

conducted

are

for

currency,

or

ja

sale of gold.

or

Finally, System operations'

U. S. securities markets affect

in

.

.

.

prices and yields m the securities

markets, particularly in the short
run, according to the expectations
to which they give rise, especially
expectations of

the

dealers and

market professionals. The System
covered in detail in the recently holds the largest portfolio of U. S.
released
Annual
Report of the securities by far of any investment
Federal Reserve Board for 1957. institution. It is not restricted in
Nor will the effects on the money its operations by considerations pf
anci capital markets of changes in profit. When it enters the market,
the reserve requirements of mem- it always operates fox a purpose
ber banks be reviewed in detail. a)?d *t has very great means at its
Rather, the analysis will be fo- disposal to accomplish its pur-^
cused on open market operations, poses, far greater means than are
p0iiCy

This

operates.

jn

has

Federal

focus>

been

Reserve

gyS^em operations in the governmen^

gai(j

securities

fpt'pnf

Xices
,

market

be

can

exeir three strikingly diftvnps

and

,' X.o £

influence

of

vields

y

of

on

outstanding

at

the

vidual

disposition
operator

in

of any indi¬
the market.

Finally, it operates from the very
center

of

the

-

any

market

with

more

knowledge by far than
other transactor of the tota"

complete

-

any other transact01' of .^e total
of investment and financial trans¬
investment and financial transactions currently taking

place.

(1)
Open market operations
Under these circumstances, mar¬
bring about a change in the vol- ket transactors, particularly the
ume of issues outstanding in the market professionals including "the
market that are
available for dealers, go to great lengths to try
trading and investment. Federal to ascertain the significance •©£ all
Reserve System purchases, for ex- System policy actions, but.partieuample, withdraw securities from larly the significance of -operations
the market.
They tend, consethe security markets. As pxoquently,

to

raise

the

prices

of

fessional

participants in the mar-

itet> they are, of course, imme#iately aware of the occurrence of

securities add to the total volume practically all such transactions,
of

investments

for

which

pur-

|s -vital

to

them t©

assess

ear-

chasers must be found in the mar- rectly the potential impact of Sysket.

,

Reserve

consequently, tern operations and to govern thOir
own
operations accordingly,
fn
deciding on their own operations,
they will not be likely to try *tq
"buck" any trend or level of rated
withdraws or adds a dollar of se- they think the System is trying ito
curities to those that are available establish. Rather, they will try to
in the market. These effects are anticipate such trends, both toy
registered most strongly on the closing out positions they expect
particular issues that are bought \0 become less profitable and toy
or sold, but, as is noted later, the establishing
or
increasing peciforces of substitution and .afbi- tions they expect to be fayored toy
trage in the market or anticipa- the trend. As a consequence, reSte-*
tions of such effects are such that tively small operations by $xe
they will also be reflected in some System Account can have major
sales,

System policy actions

affect

the

.

<

ac-

availability of
interest;
(b) the manner in which these
actions permeate the various sectors of the money and capital mgrkets; and (c) certain aspects of the
organization of the long-term open
capital markets that create dangers when expectations of lower
or
higher interest rates are not degree throughout all
firmly based on actual changes in sectors of the market.
tually

funds and market rates of

,

Such

In view of this record and these tend to depress the prices at which
developments, it may be worth securities can be marketed. The
while to set down in detail (a) the relationship is one to one, i.e., each
various ways
in which Federal dollar of securities bought or sold

.

tablgs,-'and

than

rather

increase

.

below those of last

chairs and metal
the. pasf.'week, while volume
a'id ease goods, -slightly exceeded that
of a week, earlier. Purchases of air conditioners, laundry
equip¬
ment and refrigerators reflected Tittle
change, but interest in floor
,

furniture

member

the

banks for investment.

of

upholstered

policy

'

in woolens and worsteds

in

for

of

supply of reserves available to the

bagk-to-school merchandise
1957, periocL
;
X *X
.;
There was further improvement in
textile trading last week.
upsurge in purchases of carpet wool occurred and transactions

expanded appreciably. Increased buying
print cloths, broadcloths and; sheetings"boosted over-all cotton
gray goods volume ^noticeably over thgXprior
-yyeek. New England
dyers and finishers reported marked gaips .in incoming orders.
X

for this dramatic shift was

monetary

k

openings

children's

,.X Re-orders for summer lawn
dinette sets climbed substantially

po¬

demand

assets, either
investments,
by
an
equal to a multiple of the
sales.
In other words, the rela¬
tionship of this type of impact is
not one to one. The impact effect
is a multiple of the dollars added

complete turnabout in market those that remain.
Conversely,
expectations as to the direction of Federal Reserve System sales of

buying ofwomen!?, fall

failed to equal those of the similar.

oper¬

sys¬

tential

a

rise

dresses, coats and
suits. Volume matched that of a'
year ago, scattered reports show.
Re-orders for women's summer sportswear and beachwear slack4
ened. Although interest in men's
summer, clothing was sustained
year.

reason

trend,._%ales of household goqds
Isfew York City and Boston.

agoXin

year

discount
we

reserve

tem, these sales decrease the

sharpest breaks of in¬

terest

radios, but interest in air
conditioners, deep freeze, units-, and refrigerators lagged again.
Sales of linens, floor coverings and .draperies, fell
slightly below1
a week earlier and last
year. v.
X' X
X
;
;
-Housewives stepped up their bpying of.
picnic specialties,
canned juices, frozen foods and baked
goods the past week, while
interest in poultry, some dairy:
product^ and, fresh produce showed
no improvement from the
prior week, -r
►
'
surpassed

System's

fractional

a

amount

so

the

of

and

Mountain —Z to 4-2; New England and West South Central —3 to

and

in

The actual

year

.

South

or

that time has shown that this rela-

ago,-according to-scattered reports. /
"
•>
The total dollar volume■ '.Gil' -retail -trade in the
period ended '
on Wednesday of last week was from
2% below to 2% higher than
a
year ago, spot estimates collected1 by" "Dun • & Bradstreet, Inc.,
reveal. Regional estimates varied from the
comparable 1957 levels
by the following percentages: West North' Central, South Atlantic
East

work

arbitrage
recession

slowly as
to leave us with a capital market
position where high interest rates
impeded
the
desire
to
borrow
long-term capital funds.

buying of men's and womenVsurrtmer apparel dur¬
ing the week offset sluggish activity irf household goods and re¬

and

securities

might work

'not

crisis

..

Increased

a

the

reserves

on

long-term securities tended in

general

Trade Volume in Past WeekHeld Close to Level of

ably less than

borrow

Again, because

ate under

purchased or sold was ascribed to securities.
111,000 bales by the New; York Cotton'Exchange Service
the magic of "arbitrage" and there
Bureau, compared with 116,000Xiri the previous week and 164,000
Impact of System Open Market
were
expressions of fear that if
a year ago..
Operations on Availability of
X ./.TO. '„'4> •
vX
/■ X the System confined its
operations

retail, trade

Con¬

from

reserves

to

the

window.

mated at

sulted in total

free

banks

through

pities -The Judge the the severity of the currates
short tion that rele=o£ thesugges-

that " interest

and

and total sales thus far this .season totaled
759,508
Total cotton exports in the week "ended June 2 were esti¬

Similar 1057xPeriod

total

the

market, frequently causing mem¬

i.e., to assess on the
prevalent basis of empirical evidence devel-

was

interest

buying

another

Prior Week and

much to

as

earning assets, Including

withdraw

be

the

policy

540,003 bales

X

reserve

versely, System sales of securities

'■

•decisions.

moderate rise-in lard futures prices.
Cotton trading on the New York Cotton Exchange strengthen1
at the end of the week,
inducing prices td rise 'moderately. Sales
by the Commodity Credit Corporation for
export amounted to

bales.

from first

reserves.

we

from
but

hog receipts in Chicago fell
from the prior week, they were
sharply higher than in the similar
week a year ago.
While the buying of steers Tagged, prices rose
fractionally, reflecting the moderate decline in salable receipts.
Turnover in lambs was sluggish
and-prices' turned somewhat
lower.

ago,

Buy Long-Term Securities?

falling

prices dipped below those of the previous week. At the end
the week cocoa volume slipped and prices declined
fractionally.
A slight decline in
hog prices occurred in Chicago, causing

transactions

year

times

to

com¬

and

of

one

free

of

both loans and investments.

was

Should the Federal Reserve

.

steady and prices were unchanged from the
Commercial sales of flour for export amounted
was

preceding week.
to 35.300,000 bushels in grainequivalent so far this season,
pared with 42,500,000 during the same period last season.
There

seven

a

..

Flour

level

banks.

potential demand of the member
banks for

City last week

member

fractional

a

loans

harvesting had just started in the Southwest.

salers reported

volume in New York

volume

banks

prices advanced slightly following a moderate rise
Buying,slackened at the end-of the week following,

trading.

sales

the

operate
system,
they add roughly between six or

According to the Federal Reserve Board's index, department
City for the weekly period ended May 31,
1958 showed no change from that of the like
period last year. In
the preceding week, May 24, 1958, an increase of 4% was
reported.
For the four weeks ended May
31, 1958 a decline of 1% was re¬
ported. For the period Jan. 1, 1958 to May 31, 1958 no change was
registered from that of the corresponding period in 1957.

Purchases of

Wheat
in

trade

the

under

decrease of

a

to

Consequently, because

store sales in New York

during the week and futures prices rose notice¬
corn
expanded,, boosting futures prices mod¬
erately over those of the prior week. .Commercial stocks of corn
fell noticeably in
Chicago and export buying picked up, especially
from Spain.
v
■I':. !;'vX
...
ably.

For the period Jan. 1, 1958 to May 31, 1958,
reported below that of 1957.

sWas

unchanged to 3% higher than the
servers report.

.

ing of oats

to

ceding week, May 24, 1958, an increase of 3% was reported. For
the four weeks ended May 31,
1958, a decrease of 1% was re¬

■

$$

Reserve

System purchases of securities add

'

XX.

.

available

| in rice, coffee and baked goods was sustained at a high level.
v, X Department store
sales on a country-wide basis as taken from
X>the Federal Reserve Board's index for the week ended May 31,
1958, declined 1% below the like period last year. In the pre¬

.X

whole¬

,

Wholesale Commodity" Price Index Registered
;
'X'tT Fractional Declines Last Week \

;
•

the

,

'

Federal

System v
open market operations affect the X
prices and yields of U. S. Govern-!:
ment
securities because they,
change the volume of free reserves

While the call for fresh meat and dairy products equalled that of
the prior week, volume in poultry was down somewhat. Interest

-

.

(2)

\ Retailers noticeably boosted their purchases of canned orange
juice Jast week and volume sharply exceeded that of a year ago.

.

Lowerin whole¬

barley, beef, hams, butter,
potatoes; steersand "hogs. X;
U

cocoa, eggs;

IxXiXy-

Another increase pre¬

vailed in the buying of hardware, building materials and" paint.

maturity

09

i^oniinuea on page oc

32

The Commercial and Financial Chronicle '.

(2636)

Continued

availability

from page 31

v,

Should the Federal Reserve

Buy Long-Term Securities?
short-run effects
tations

firm

when

professionals
It is
that

rise

give

they

expectations

direction of

market quo-

on

to

market

among

with respect to
System policy.

the

important to note, however,
effects are essentially

these

short-run effects.

Market

profes¬

sionals, including dealers, do not

^Hrrfnn'to

cnvintre

eunnliPQ

or

nf

WnSahiP rl.nrii
dn thiv nrif/'i
,£«for inWrnpni
nfionir miririiPTTiPn
SprfS fhfS If thi markPt
nnr

Tin+n

Anm

»n

their

v'S fh"

Jess

use

borrowing extensive amounts in the long, the
intermediate and the short-term

those

costs

sectors

Public

where

bodies

financial

reasonable,

most

appear

and

governments

typically present as heavy
borrowers in all maturity sectors,
both for new money aild for re~
financing. Because they enter the
markets for large amounts, they
are

alert for signs of congestion

are

„TavipiLl th'.t as between the different maturity
fill!L;fhomnri-pt Nntinf^ sectors and are careful to offer
^u»ntif Lnlmpntw the Healer* their issues in sectors which apthl11^1 pear capable of readily absorbing
i!nifinuthe offering.
csumaie
me
signmcance 01 oysIt ig thege fact0rs of broad sub-

rem moves.

foiven

«

purcnase

•snaaows

for

and

or

jsaie 101 ecnanges, say,
m

larger

establish

.yields

iney may assume mat

period,

a

the

actual

cannot

the
mc

Svstenr's idoDtion
Dystems
auupuuii
and

bills

are

ot
a
uia

the

in

long-term

tors of the market.

be

reasons -

policy of nonintervention
intermediate

to

repay

bank

provement in the loan ratio,
,

supply sides of the

market, one
would expect the market in general to move as a whole, i.e., one
would
expect
that .the
broad
movements
in the
amounts
of
funds loaned in the long, intermediate

.

Organization of the Long-Term
Market

There

is

capital

and

money

third

a

bears mention

in

and

aspect

markets

that

be in the

turity

this connection,

the

in

would

areas

direction,

same

broad

rates

movements

the

various

of

ma-

would also be in
direction.: One would

sectors

same

namely, the much greater signifi- expect that divergent movements
cance

that attaches to any decision

to borrow or lend when it is taken
in the long-term market as comPared with a decision covering an
equal dollar amount when it is
taken in the short-term market,
This increased significance is, of
course, a mathematical truism resuiting purely and solely from the
fact that the commitment undertaken runs longer in time and,
therefore, commits both parties to
its terms through a longer interval. This is one reason why short-

as between maturity sectors would
.be less frequent in occurrence and
of shorter duration when they occurred. This is completely in accord with observed market be-

haviour.
(b) If the effect of arbitrage and
portfolio activity is primarily
to establish
prices
and
yields that will clear bids and
offers in the different maturity
sectors of the market, it would be
expected that yield curves would
be continuous rather than discon-

the

between

as

various

This expectation also ac-

professional

these /

sec-

Operations in

much less subject to com-

a°£.Pu°f

Fftr exampH It Is generally from time to time, reflecting the

...

W,Ith refPect to thls asPect of realized tjiat a fluctuation of, say, presence ot differential supply-

markets

therefore,

rejevant

lwo

There is

we

make

can

observations.

(1)

considerable amount of

a

interchangeability
or
substitutability on both the demand and
^ie SUppiy side of the organized

1% m interest rates on one-year demand
securities would normally be asso- tors of
ciated with

tuation.

much smaller flue-

a

in "the

interest'yield

on

30-year bonds.

pressures in various

sec-

the
market.
In
other
words, substitution and protes¬
sional activity have the effect of
linking the various maturities sectors into an organic whole but not
of
obliterating completely
dif-

It is also generally
realized that the relative change
turn than operations in longer sem0ney and capital markets that in capital values of the securities
curities.
They
are
less
likely, tends to
generalize pressures or in the two maturity areas would ferential
pressures
as
between
consequently, to give rise to false availabilities from
any one sector be reversed, i.e., that the market them.
expectations.
to
all
sectors;
(2)
commercial price of the 30-year bonds would
(C) jf commercial banks with
Fluidity, Substitutability and
y'
bantaiare Particularly important swing over a wider range than the their ability to create money are
in
this
responsiveness
because market
price
of
the
one-year
Arbitrage
.in this responsiveness because market price of the
—
fundamentally important factors
they operate, and also finance the notes. It is less generally recog- in the
supply of funds for investment

and

possible misinterpreta-

It is impossible to obtain direct
eration

,

tne

by
as

a

maiKet

101

securities, are characterized
high degree of responsiveness

between the various

the

sectors, in

that fluctuations of any

sense

srehtoiois. Actually, how large
in all major this swing
nized, however, just in the peoptions

sectors of the markets.

This casts
on

in

a

little different light

the generalization that changes
the tone or direction of the

intPPJt rates
pected to be highly

mcnt>

responsive to
wars, the swing changes in the reserve position of
cycle in prices of the commercial banks. This prop-

ldod between the
credit

markets

money

are

likely to

triple

ap-

^ ,c^POrate bonds of 30-

osition is in accord with empiri-

senfe Xtit

W1thdraw it at will without loss,
and prices originating in the most Tf
follows
that
anv
phane-P
in
—a
^11
in3^ 31y .cnan£,e
censitive and liquid sector of the

proaches

are

markets

In
general
annroaehes
i
S,P
in general, approacnes i)0nds, mortgages, etc., and day-

market, the bill market,

to-day developments are analyzed
jn terms of these changes in demand for and supply of specific
congestion.
Investment bankers categories of issues. Yet, if the
bringing out new long-term bond abstract
propositions set forth in
^sups -^7* .,y. to. schedule them, t|ie above analysis are correct, a
11 a* a11 feasible, to be offered on change in the aggregate volume of

trans¬

are

mitted to other sectors of the
with

without

or

mar¬

much

be

likely to
immediately in the

reflected

bill market.

It

delay through the
ation of arbitrage.
ascribes

availability of funds
.

oper¬

too

much

does

not

t.txv:

w..u

in

nrhih<nop

Mnph

gage in aioitiage.

Much

moie

im

are

nrofessionals

as

riprrrpp

that
that

of

nftunl

pvkfs
exists

for
foi

im-

hieh

<snhQtitiiinhiihv

mnnv

lpnHpr!^

a

11H

many.lenders ad

borrowers in

many

the

is

tne creait

ana
ancl

capital markets. Forexample.commercial
and

banks

operate
actively
positions for their own

hold

account

all major areas and in

in

all major

maturity sectors of the

money markets.

i»°§SeU,Zl<^

area^

and
areas and

In

various

sectors
sectors.

addition,

ment

managers of invest-

portfolios

insurance

and

They also finance

such

companies

trust

funds,

as

those

of

and pension

in

seeking

to

maximize

income,
can
operate
with very great
flexibility as between different categories of in-

vestments and, if it pays, between
aitfcrent maturity sectors.

Among

borrowers,
that can

cial

also,

are

many

adopt

a variety of finanto meet their financial

Plans

needs.

there

If

necessary

they
to

permanent

think

obtain
funds

the

more

will

terms
or

less

improve,

free
implies

increasing,

fje tbe.reby rendered un-

available for investment
Kacres or

portant and basic to their operations

however,
say,

reserves

v;n-

mnra

follow,

that the fact that funds have been
committed to bills when,

importance to the transactions of
flnitp

is

certain

a

amount of

This

in mort-

long-term bonds

Rather

baX havTexcess reserv^
excess reseives,

funds are available for lendlng or commitment in any area in
offered

and

due'regard'to'balance "in The

with

bank'rportfolio.
whether

or

while been

not

It is

Xced
pa

biUs

SaTerial

they have

mean-

temporarily in

xempoiarny in

SFeed with which changes

the

two

P01l!tin! i!Ll!

clogged with competing issues. To

the extent that long-term borrowing is postponable this has the ef*

*

*

..

a sense

.

of rationing

01

tailoring demands for long-term
borrowing to
currently

inUnd

b ,la«'"gib °
relative return

the

to

postpone

coming

to the

kct It

he supply of funds

Jtvailablp
Jtvailable

acts^o

of

response

the

market to given open market op-

erations,

such

since

operations
of influence

various types
simultaneously.
On

exert

hand,

they

the

•

to

one

subtract

or
volume of free

the

from

add

reserves

available to the commercial banks,
the

At

add

time, however, they

same

to

from the

subtract

or

vol-

of securities to be carried in

ume

particular sector of the mar¬
In i addition, as was noted
earlier, the fact that the Federal

some

ket.

Reserve

System

has

the

entered

market may

give rise to expectawill be reflected in
quotations in the securities marwhich

tions

At times these quotations
reflect professional expectations fully as much or more than
^

they do changes either in the re¬
serve position of the banks or in
the amount of market-held

secu-

rities in the various maturity sectors. This would become progres-

sively

important if open
operations were conducted
the intermediate or long sectors
more

market
in

of the

is

It is most

market.

nearly

impossible,"by studying

open

market

operations alone, to
entangle these three effects,
ThPro

nthPr

nrP

dis-

however

wave

o£ developing empirical data that
are
both eomparable and valid.
For

exarriDie

soning

if

would

abstract

as

rea-

suggest, something

like seven-eighths of the response
of the

in

market at any one

money

time to

market operation,
of funds,
the effect of that op¬

an

open

of availability

terms

represents
eration
the

on the reserve position of
banks, while only one-eighth

reflects

the

fact

that

bills

simultaneously put into

were

with-

or

j market
drawn from the ^

it follows

in
in

thp
the

refiected

in parallel changes
individual sector of the mar-

are




more

or

S

bonds

rrmnicinal

ayailable at prevailing yields.

This characteristic

available

reserves

banking
nortPH

system

"tn

hwP

to

mnrh

the

be

would

ex-

pffppf

mnrp

avaSlbUUv

consequently, upon interest rates
in all thc various maturity sectors
of the market

than would be
*
^
u

cx.

^

1

1° „r®fU 1

any

fered

in the light

of the risk in-

volved, and

(c) on the liquidity
position of the banking system,
i.e., the size of its highly liquid
asset

holdings

and the position
deposit ratios. Ease in
positions will not quickly

of its loan
reserve

be

reflected

commercial

in

an

increase

of

of

issues

on

the

I

„

.

.

,

..

...

occasions

comparable

when

changes
This

reserves

e
0
*
snouia be true regardless10 tne
course of the change in the level

for example,
brought about by
open
market operations,
which
simultaneously change the volume
reserves

whether it

of

—

was

securities

to

be

carried

in

the

securities to De carriea in me

market

by changes

or

reserve

in

requirements which have no efi'ect whatever on the volume of
securities

to

be

carried

in

the

market.

This comparison offers a
truly objective empirical test of
the validity of the principles un¬
der examination.

The

System

has

».

requirements

reserve

changed

now
on

five

sep-

1Cb;:lvc iequiicineiut, on nvt scp

TaS1°nS SlnCu
a-CC°Id*
occasion, changes in the

each

availability

Lxest

rates

of

funds

have

resultingfree
xvsuxuxig
uce
A.cc

and

in

in-

reacted

to

the

position.
posmou.

reserve
reserve

certainly
of what
w
have been expected if the
famG fuGG rffuVG Pn°Sltl°n had
^

the

"

former

imnact

is

multinle

a

wWeas^ thl^latter rSlects

a

wnereas the latter reflects a been achieved
on

interest rates

or

secur-

when

effective

required

reserves

alsP

strongly

suDDorts

the

con-

thft wou^bl suggested

clusion
bv

through open mar-

more

abstract analysis

There is still another source of
empirical data that may throw
light on this problem, a source of
data

moreover

free from

any

that is completely

complications aris-

pounded

of

almost

(a)

If

part of the Federal Reserve Systern. It arises in connection with
Treasury refinancing operations,

only one-eighth the fact that the

The Treasury recurrently under-

operation

takes

yields should reflect the
change in the volume of free re-

com-

innumerable

substitutability

available to the banks and

market

..

Empirical verification
Actual market behavior is

investments in
capital market if

dispensable to allow the increased

various

were

the calendar clearly indicates the average one-seventh of demand ing from changes in market extrue nature of the basic supply- deposits, something like seven- pectations such as are frequently
demand position.
eighths of any resulting effect on induced by policy actions on the

bank

long-term

there

in the level of free

securities^an-ied i^nethe0lmarket^
roughly
trTs would be exoecled because wlth^ seve»-eightbs

'oVthe'o'rgan- reugh^enerel ^Ih^relSivt

prospective

for

same
aculK-

,That !eac"?"' 'ur/hermore.k1has

can be
als in

volume

roughly the same,
seven-eighths of the

within

or

aS %
On

troublesome. If profession- ity yields of these two factors
the market misjudge the should be
proportional to the reket, such as the long-term sector, magnitude of shifts in the supply serve ratio of the commercial
will depend basically (a) on the of
or
demand
for
investment banking system.
strength of demand in that sector funds, there may be a delay in
For example, if the Federal Rerelative to other sectors, (b) on the response of interest rates as
serve System
buys or sells a givthe attractiveness of the
yield of- quoted in the market until the en dollar amount of bills at a time
in

that changes m the gcneral aval1of funds and in interest

rates should be

upon the avaiiaointy of funds ana,
tne
01 tunas

mar-

variations in prices and yields in
the capital markets by limiting
the amounts of long-term funds
sought to the supply of funds

:

iree

m the availabilty of reserves will ization of the long-teimi markets impact
be

U

that chances in the general avail-

,

minimize short-run

.

companies

certificates

long-term markets are
carefully
timed,
with
an
eye
among
other things to avoiding

,1Cj

which the bank choose to commit

the

to

made

,

maiKeis.

strands, so much so that it is difficult to muster direct empirical
eapital
^a^et and meet imme- the banks are worried about an proof of these specific proposimate needs by
running down their insufficiency of short-term
liquid tions. Nevertheless many of them
uquiaity or by borrowing at short assets or a
high loan deposit ratio, can be subjected to a considerable
rm at DanksUnder these conditions, time is in- degree of factual verification.
nnance
tney can

the

of

op-

from

would be ex- ability

ycar maturity appears to have cal evidence.
/
any one sector are
pear first in the bill market*and averaged
nearly seven times
likely to be paralleled by similar
then to snread to the other sectors larger
than
the
corresponding . W in current market reportfluctuations in other sectors. Tins
the market
The generalization fluctuation in prices of one-year >ng, discussion and analysis is conphenomenon is often loosely deis true ln the
fc securities.
scribed as resulting
,hangcs in the demand for and
These differences are reflected
fjom arbi- usually easy to put money to work
trage.
It is often said, for ex- bl the bill
supply of investments in the varimarket and
also to
amnle
that movements 01 vields
111 tbe manner m which ap- ous individual markets for bills,
ainpic, xnai movements of yiexas
magnitude in

ket

principles

.

,

Ue^\arttr4fl?ThemrarLffor
Keis, particuiauy
U. S.

these

of

study

a,

•

_

verification of the

empirical

may

dealer

money and capital markets that er rates fluctuate so much more tinuous
accoimt
fundamentally for
the widely than long-term rates—less sectors.

of

the

that

interest

the

of

short

and

usually

is inconsistent

^sfbUit^s'one oHhe
fOr
JO!

both sides of the

on

markets

tween different maturity sectors
of the market is characteristic of
the behavior of important elements on both the demand and

specialists.
It is interest rates carry implications smooth and consistent
yield curve,
professionals'- operations, and consequences out of all proparticularly in. the U. S. Governhowever, that account for the portion to much larger fluctua- ment
securities
market.
This
supply-demand .smoothness of the yield curve at tions in short-term rates.
'
curve, however, changes its shape
that

prices

sustained because it

with

level of

a

stitutability

these

any one

time, they are free to shift the
major impact of their borrowing
to

build

to

reserves

in bank

loans and thus bring about an im-

continuously

markets. Within limits, at

of

liquidity through
inholdings of liquid
assets.
Time is also indispensable
to permit borrowers, such as finance
companies, with access to
the short-term open markets
to
bank

up

creases

Thursday, June 12, 1958

.

.

as

be-

serves

an(j

was

therefore

volume

of

bills

executed
also

.in

bills

changed

available

vestment in the market.

for

The

standing

in-

mature.

same

principles would apply if the open
operations were executed
in the long end of the market.

market

to

the

refinance

debt

as

its

huge out-

various

issues

Each year more than $20

billion of market-help certificates,

notes,

and

financed

issues.

bonds

are

thus

re-

by exchange for new
Frequently
intermediate

Volume 187

Number 5750

.

.

.

The Commercial and Financial Chronicle

securities, and sometimes long se- eurities involved, the effects both
curities, have been included in the on interest rates and on the voloffers for exchange.
Such occa- ume of new securities absorbed
sidns,J consequently, furnish a were distinctly limited. They sug-,
prime opportunity to develop em- gest that the Federal Reserve
piricai!;data with respect to the System would have to undertake
effects bn the availability of funds very
large swapping operations
and on interest rates of changes indeed if if wished to use this dein} the maturity
composition of vice to affect* appreciably the
market-held debt.
1
availability of funds in specific

(2637)

improve and not impair the mar- tial supply of bank funds availket effectiveness of Federal Re- able for market investment, and
serve System policy actions. This
the resulting pressure on the supconfidence has been justified by ply position of the banks led,
the record. Experience has proved first, to a clearing up of the conthe wisdom of operations designed gestion
and,
subsequently,
to
to affect credit and capital mar- lower interest rates.
;
ket conditions primarily through
in summary, the System brings
effecting changes,ih the volume aid to the economy iri a time of
of .bank reserves.
recession primarily by increasing

In thp big refinancing of early
maturity^ Sectors of the .market.
The great danger of direct Sys1958,Jfor example, nearly $10 bil- This evidence also overwhelming- tern intervention in the longlio.h of market-held debt was re- ^ verifies the proposition that term securities markets at the
financed, more than One-third into Federal Reserve operations in the present time is that the effect on
th£ 3k1 of 1960 and more than one- °Pcn market achieve then* impor- interest rates, arising out of a shift
si^ith;into? the 3 V2S of 1990. This tant responses primarily through in market- expectations, would
refinancing, in the course of a t»eir effects on the reserve posi- probably be disproportionate to
very few days, effected a huge tions of the commercial banks.
any
changes simultaneously
redistribution in the market supinduced in the actual supply-deply of investments as between the
rhand position of the capital marshort, the intermediate, and the
The foregoing analysis indicates kets, The existence of such dislong maturity sectors. More than the nature of the problems that proportion, furthermore,
would
$31/2 billion of securities were ^ouI!dibe raised should the Sys- not be readily or immediately apshifted out of the very short to 'tcm ihtervene• directly in the mar- parent and might not be quickly
the intermediate sectors and more ket for long-term government se^ corrected, For a time, the flow of
than $14 pillion additional issues-curities' To ?ecaPltylate:
securities offered in the investwere shifted from the very short
(a) System actions affect quoted ment markets would tend to be
to the very long maturity sector, interest rates in two major ways: rationed tp the absorptive papacThis shift in the distribution of (1) by altering the supply of ity of the market.
This might
securities as between the various funds relative to demand avail- well lead to an erroneous reading
sectors of the market was exactly uble
in the credit and capital of the economic situation.
The
analogous to the shift that would markets; (2) by inducing a shift failure of offerings to grow in
have been induced had the Fed- hi
expectations among market spite of sharply lower interest
eral Reserve System Open Market professionals.
rates would require explanation. „
„

.

..

ping

a

huge swap-

operation in which it pursome
$5 billion of cer-

chased

tificates

in

and

market

the

sold
some
$3^ reserves available to the commerbillion of issues maturing in 1969, cial banks for loans or investarid in addition some $11<> billion ments, or by changing the volume

in 1990.

of securities in the market avail-

able for investment. As between
these two, the effects of the former ar,e, all Important as compared
with the latter. Under present reserve requirements, abstract reasoning would lead one to expect
that something like seven-eighths
of the interest rate response to
any given open market operation
would reflect the effect of that
operation on the free reserve po01 the banks and only^oneoperations of the Treasury, con- eighth would reflect the fact that
sequently, provides concrete emopen market operations had
pirical evidence on two problems. the additional effect of changing
As already noted, the

such
had

subtractions

market

from

held

-

debt and bow much of the impact
of

such

changes
absorbed by the

is modiifed or
high degree of

fuiditv and substitutabilitv

tween

various

the

as

maturity

be-

sec-

tors that pervade both sides of the
market?

-

Second

how large would

direct

onerations bv the Federal Reserve

Svstemh? l^g-fenn

tiefhTve

to

bf

cant influence

U

on

seoiri-

a

signifi-

the availabUitv

S inn^ tplm fnnil

Int nlT

S

to exert

than

w
anv

^

that miffht rpi?int from changes in
might result from nhampb

Thes^ee^

?£nfare^frlccord wifh thrfm
ISal develonments
pineal developments.

The really difficult problem for

the

System always

the behaviour of free
market interest rates, particularly

covering

long-term rates, read against the
background of data covering the
volume of bank credit and of new
offerings in the capital markets,
a most valuable guide to
such determination. This is an-

furnish

other reason, and a very impor—
tant one, for abjuring direct intervention by the System 'in the ions?
•

•

•

fn,

tf ia

G

ottne market. It is important
to preserve the trustworthiness of
that guide.
———:

Today and Tomorrow

case

a lesser extent in
of those who are par-

$4,450,000 will be performed in ticipating in the financing
their laboratories.
project.
~

Development problems confronting engineers responsible for the
design of nuclear power plants at an annual interest rate of
are
often very numerous
and 4.35%.* Of this amount $9,750 000
complex. Solutions to these prob- has been:"taken-down. The loan

lems are found only after exten- has been guaranteed by 13 of the
help to clarify this point. The sive research programs have been participating companies and is to
suggestion earlier in 1958 that the undertaken and many times this be repaid over a seven-year peSystem engage in direct interven- research requires elaborate, costly riod commencing in 1964. Repremay

5^

llSn^w ^ 7

^
of congestion

that had developed

long-term

canital

market.

long-term market, the System
helped clear up the situation by
lowering discountj rates; and cutting r^^ve requiremen^ This
term rates» to Persist for a time at poses the question of which was
lower levels than would be ^us" the Preferred approach to the
,

1

tified by for investment.of In this problem
the volume
funds
available
Had the

_

investment

was

.

.

.

Conclusion

diriiin-

billion. They did
not, however, drop to levels that
usually prevail when free reserves
are above $500 million. Long-term
bond yields concurrently, which
had also been dropping rapidly,

The 1953 decision of the Federal Open Market Committee to
confine open market operations
to short-term securities was governed primarily by the desire to
minimize any disturbance to the

these large volumes
of additional securities were absorbed in the intermediate and

functioning of the government securities market that might result
from its own operations.
Since

leveled off

as

the bill market was very much
was, however no sharp reaction broader than any other sector of
upward. Concurrently with these the market, it was clear that the
long sectors of the market. There

reactions, the capital markets continued to absorb new issues in

possibility
could

of

such

be held to

a

disturbances
minimum

to

record volume.
the extent System operations were
Now, these responses were cer- confined to bills.
While these
tainly tangible and definite, as Committee decisions were made
would be expected on
abstract for operating reasons, they were

grounds. At the same time, con- taken in
full confidence that
sidering the huge amounts of se- operations confined to bills would




bf the

PRDC has entered into a loan
agreement to borrow a total of
$15,000,000 from certain banking
institutions during 1957 and 1958

^

Development Problems

.

System directly inter-

lab°rat°7 facilities. Designing sentatives from these banks will
nuclear fuel elements, is an ex- learn, in a general way, about the
ampJe of this.. type of develop- design and construction of a large
ment problem; Uranium must be reactor
plant

-.iri+v,

niisv.,d

cnamd

in

will

and

:

have

a

xi..

.

alloyed with special metals, to clear insight into the
strength

provide

when under

and

stability considerations

irradiation. Usually

economic
the plant is

once

in operation.

,

.

protective coating or cladding
By 1960-1962 numerous large
is reqUired to eliminate or reduce nuclear power plants will be in
a

corrosion.

Proof testing of fuel service in the United States add-

must then be accomplished first
by irradiation in test reactors and
then by analysis in hot caves,
other developmental problems
confronting the designers of nuclear plants delude (a) the reduction of uranium flouride gas
to metal, (b) reprocessing of ir fuei

radjated

to

separate

the

that el?CTPc
J?lles 1^°Jn
F
interestea mine pro] ec

for

'

Nuclear Power Plants:

appreciably in changes in interest rate quota- pearance of a relatively small volshifts in tions that are out of all propor- ume of System purchases in the
tion to the changes justified by long-term market. Little actually
ing as between the various matu- the volume of reserves absorbed would have been done, however,
rity sectors of the market. In this or released.
These rates would to increase the absorptive capacity
case, for example, bill rates, which not reflect
the true supply-de- of the market. Now, those lower
had been dropping for some time mand position in the market and long-term yields might well have
previous
to
the
refinancing, in a situation like the present acted to induce an increase in the
dropped appreciably further as the would lead to congestion.
desire of entrepreneurs and others
volume of short instruments availto borrow long-term funds. Such
ished by Over $5

:'

:

P 9

ing to our knowledge in this new
field. These plants, of different
types and designs, will serve to
keep this country ahead in the
development of the peaceful atom.

Chicago Analysts

wastes from the reusable fission-

able

—-

ft

This would create great support of the project. The Com- is true, but to

°PfJati,9"s m bllls- "
id) The money and capital marKtS arf s0 °rSam*rd as to permit
Jnterest+ rat.es' Particularly long-

mitigate

closely

as practicable the volume of rethat are most appropriate
to the economic climate.
Data

interval, the volume of capital vened at that time to purchase
The answer to these two ques- offerings coming to the market long-term bonds, strong expectations, as provided by the response tends to be rationed to the level tions of further reductions in bond
to the Treasury refinancing, ear- of market demand.
The shift in yields would certainly have been
lier in the year, is that substitu- expectations
induced
by
direct roused. The chances are that the
tability is a very important mar- System operations in long-term yields of long-term bonds would
ket phenomenon, sufficiently im- securities are apt to be reflected have dropped sharply on the apto

pe-

serves

difficulty for System policy for- mission work, estimated to cost the

thf»

the volume of securities outstand-

as

should serve them well as this
new industry develops. The same

,Tb? major fundamental ef- m the loi^-tom
™aFk.et*
fect of direct operations in long- At that time, offerings of new isterm securities would reflect the sues had been exceptionally large
fact not tbat long-term securities and unsold issues particularly
were purchased but that reserves state and municipal issues, were
were supplied or withdrawn. This at high levels. Actually, instead
same effec.t ^!°uld result from of intervening directly m the

the effects of very large

in

periods of

extra effort gives these manufacturers important experience which

market expectations.

portant

both

and

boom, is to determine

research will be conducted by the
Atomic Energy Commission in

mation. To the extent that, Jong-?
term interest rates become dominated by expectations of the future course of System policy
actions, rather than by the current
supply-demand position, the Systern is deprived of the most 1mportant market indicator of the
adequacy of its operations.
,
Another resort to the^ record

First, what is the nature of the

nana

creditworthy

tempted to borrow

spirit of business enterprise, or to
a
cautious.,, spir# -among entrepreneurs.

the
System
would have given rise
to market expectations that would
have
affected
quotations
independently from any effects arising
orit of changes in the volume of
securities outstanding in the different
maturity sectors
of the
market. A study of the reaction
of the market to such refinancing
by

market response to additions to or

J

^

•' "■——

are

spend another $5,000,000 on research and development. Further

been

undertaken

ContmiiPfi irrvm

1

are

but to an absence of creditworthy
borrowers or to let-down in the

effects of
huge swapping operation,

a

it

'

^

actions influence
investment funds

simultaneously

of issues maturing

.

additional

riods of recession

tbus helping to finance active demands in the market for. men and
materials. .We must never forget
that this is the ultimate aim of
our monetary policy rather than
the achievement, say, of a predetermined level of long-term interest rates. In other words, the
achievement of lower interest
rates in these circumstances represent a means to an end, not an
end in itself. The effective monetary stimulant- to the economy
m times of recession is always an
increase in the availability of reserves to the member banks. Such
reserves increase by a multiple

Such lethargy in the capital
markets, for example, might be
relative to demand, in two ways, ascribed not to a deficiency ol'
either by changing the volume of reserves in the commercial banks
(b)
System
the supply of

which

enterprises

.

^

funds thai

competing for existing loans and
investments
and
also
help
to
create a financial environment in

actual flows pf.)oanable funds and

,

Account undertaken

factor the supply of

33

abie materials and (c)
uge

of

radioactive

Elect Officers

disposal or
Many

wastes.

CHICAGO, 111.

nrnhlem* could be listed

p

.

r

f

...

Vice-Pr

PR ra¬

There

dent of

® /Ji
°Sa^eJJ

.

c.,

dent

a

w

s

Presiof

The

10

Investment

Analysts
So¬
ciety of Chi¬
cago for the

a

aesire

n

Co.,

assist in the development 01 tne
peaceful atom and to learn^wnat
type of plant snouia oe consiaered for systemaaaiuons piannea

is

common

I

G.

A.

Becker &

elected

E.

J r.,
e sji-

Torrey,

A re.Y_Jv xiwSrJoJLe

®JJpp0Ft

Clarence

-

for 1965-1970. wnue rKUt maxes
its knowledge available to anyincreased
borrowing,
however, one who may properly request it,
would have had to be held off the the participating companies remarket because not enough re- ceive^ important technical knowserves had been added to increase how,
have^an^ opportunity jo
appreciably the volume of funds assign engineers to tne
oavailable for investment. Had this group and to the plant for trainhappened, the existing congestion ing, and become acquainted with
of unsold issues in the long-term the administrative considerations
market would have been increased, involved in designing and operatnot diminished, by direct inter- ing a nuclear plant today,
vention.
This desire to learn from parThe decision to lower both re- ticipating^ and doing has been
serve requirements and discount evident
in our relations with
rates, on the other hand, tended equipment manufacturers, reto clear up the congestion and at search organizations and financial
the same time to promote in- institutions. Because of the unique
creased borrowing because it put conditions under which many of
its primary emphasis on an in- our plant components operate,
crease in the supply of reserves the equipment suppliers are called
available to the banks. This in- upon to do considerably more
creased by a multiple the poten- engineering work than usual. This

1958-59 year
the annual

at

meeting.
Neil

Heikes,
C.

E.

Torrey,

Jr.

monwealth
Edison

elected
p

Vice-President

Chairman*

e
enson

Th

TrGasu*.

E.

ComCo.,
and

William

A

Northern Trust Co

and

*

james C. Bard of

Miami Corn

Secretarv

With Kidder, Peabody
(Special to The Financial Chronicle)

CHICAGO, HI.—David T. Mur.

.

...

,

Phy is now associates wt
der, i^eaDooy sc <^0.,

^
^ °^&un «

^

oouta

r_

.

a

1

Continenml Illinois iNationai isa K
& trust company.

3*

The Commercial and Financial Chronicle

(2638)

.

.

.

Thursday, June 12; 1958

* INDICATES
5

Now in

Securities

/'"

V;

PREVIOUS

ITEMS

v#

.

ADDITIONS

SINCE

ISSUE
"•

June

oversubscription privilege). Prjce—$15 per share. Pro¬
ceeds—For property additions and improvements.
Of¬

can

Retirement Plan for employees

fice—Fayetteville, Ark.

Proceeds —For

★ Abbott Laboratories, North Chicago, III.
10 filed 800 participations in the company's Stock
of the company and its

subsidiaries, together with 30,000 shares of common stock

(par $5) which may be acquired pursuant thereto.

_

★ Air Craft Marine Engineering Corp.
May 28 (letter of notification) 300,000 shares of common
stock. Price—At par ($1 per share). Proceeds—For op¬
erating expenses for one year; manufacturing expenses;
expenses for materials and retirement of loans and bal¬
ance
for general fund of the company.
Office—15759
Strathern St., Van Nuys, Calif.
Underwriter—None.
★

Paper Manufacturing Co.,
(6/24)

Albermarie
Va.

June 3 filed $3,500,000 of
due

debentures

1978

to

Richmond,

subscription

offered for

be

by

company's class A and class B common
rate of $100 of debentures for each 20

holders of the
stock

the

at

shares

June

of

A

class

or

class

B

held

common

record

of

by amendment.
In addition to the debenture offering, Albemarle Paper
and two of its subsidiaries, Halifax Paper Co., Inc., and
Seaboard Mfg. Co., have agreed to sell privately to two
insurance companies $10,500,000 of new first mortgage
refunding bonds. Proceeds—To be used in part for re¬
funding of debt and payment of bank loan, and in part
for new productive facilities.
Underwriter — Scott &
Stringfellow, Richmond, Va.
20,

Price—To

1958.

be

supplied

★ Allied Laboratories, Inc.
June 6 filed 65,000 shares of common stock to be offered
in

exchange for all

stock

of

Campana

the

outstanding shares

Sales

American-Caribbean

supplied by amendment.

(par 200).

Proceeds

American

To
Un¬

—

discharge current liabilities and to drill ten wells.
derwriters—To be named

by amendment.

Durox Corp.,

Englewood, Colo.

May 1 filed 2,500,000 shares of common stock (par $1).
Frice—$2 per share. Proceeds—For construction of new
plant and establishment of the business at Tampa, Fla.,
including payment of the balance due on a plant site.
Underwriter—I. A. I. Securities Corp., 3385 S. Bannock
Street, Englewood, Colo.

if American Heritage Life Insurance Co.,
(6/24)
941,564 shares of common stock (par $1)
to be offered for subscription by common stockholders
of record June 24, 1958, at the rate of one additional
filed

5

share for each

one

and one-half shares then held.

Price

—To be supplied

by amendment. Proceeds—For work¬
ing capital. Underwriter—Merrill Lynch, Pierce, Fenner
& Smith, New York, and Pierce,
Garrison, Wulbern, Inc.,

Jacksonville, Fla.
cumu¬

convertible

preferred stock. Price—At par ($10
per share).
Proceeds—To improve the company's net
current asset position.
Offiee—South Aubrey & East
South Streets, Allen town, Pa. Underwriter—None.
American Mutual Investment Co., Inc.
Dec. 17 filed 490,000 shares of capital stock.

Price—$10.20

develop shopping centers and build or purchase office
buildings. Office — 900 Woodward Bldg., Washington,
Underwriter

—

None.

Sheldon

Magazine,

1201

Highland Drive, Silver Spring, Md., is President.
Anderson Electric Corp.
(letter of notification)

Dec. 23

common

—To

go

class B

(par $1).. Price—$12 per share. Proceeds
selling stockholders. Office — 700 N. 44th

Street, Birmingham, Ala. Underwriters
Cruttenden,
Fodesta & Co., Chicago, 111.; and
Odess, Martin & Herzberg, Inc., Birmingham, Ala.
—

Anita Cobre U. S. A., Inc.,
Phoenix, Ariz.
Sept. 30 filed 85,000 shares of common stock. Price—At
par ($3.75 per share). Proceeds—For investment in sub¬
sidiary and working capital. Underwriter—Selected Se¬
curities, Inc., Phoenix, Ariz

★ Arden Farms Co., Los Angeles, Calif.
June 4 filed $3,000,000 of 5% subordinated
debentures,
second, series, due July
1, 1986 (convertible until July 1,
1968), together with 172,162 shares of the company's
common stock (par
$1) to be offered for subscription by
holders of outstanding common stock at the rate of
one
share for each five shares held
of this registration statement.
new

on

the effective date

Price—To be supplied by
amendment. Proceeds—To pay off an
equivalent portion
of the company's current bank
loans which, at May 15,
1958, amounted to $8,450,000.

Arizona

Public Service Co. (6/18)
filed 240,000 shares of cumulative

May 28
stock, series A (par $50).

eight

shares

amendment.

July

on

Price

the

on

held

basis of

of

11.

Underwriter

one

new

record ;June

Price—To be supplied by

convertible debentures

•

vH'

'-

'

common

shares.

Price

—

$1,000

preferred

held. .Price—At

'Pro¬

par.

loans, for addition to plant and
Underwriter—Drexel & Co., Phila¬

114,030 shares of

,./.,; '

stock

common

1983

and

(par $2.50), the deben¬

tures and 42,000 shares of stock to be offered in units
consisting of a $100 debenture and six shares of stock;
the remaining 72,030 shares to be offered separately.
Price—$130 per unit; and $6 per share. Proceeds—To

•

purchase from Eastern Shore Natural Gas Co.,. a sub¬
sidiary, its $350,000 of 25-year 6%; convertible subordin¬
ated notes, $245,000 of its 25-year
subordinated^ notes,
and additional shares

per

at

an

(unspecified) of its

common

stock,

aggregate price of $1,215,000 plus interest, if any,

the notes. Underwriter—Harrison.& Co.,
Pa"
.,.,/ ' •:
■
'//»<;/ i -i,i •
on

Philadelphia,

:
■
A:
Georgia, Inc., Billups Petroleum Co. of N. C.,
Inc, Billups Petroleum Co. of S. C.,In<3$ Florida Friend
• Colt Park Associates,; New York
Oil Co., Inc
and Your Friend Oil Co., Inc.
Office— I June 4 filed $1,080,000 of Limited Partnership Participa¬
tions in the company. .Price — At par ($5;000 per unit).
Jacksonville, Fla.
Underwriter — The Johnson, < Lane,
Proceeds—For purchase of land and the balance to be
Space Corp., Augusta, Ga.
~
added to working capital. Underwriter—None.
Blake & Neal Finance Co.

leum Co. of

May 26 (letter of notification) $300,000 principal amount
of 6% promissory notes in denominations of $500 each
and multiples thereof. Price — At par: Proceeds — For
working capital. Office—1939 E. Burnsider St., Portland,
Ore.

• Columbia Gas

System, Inc., N; Y.
participations in the company's
Employees' Thrift Plan, together with. 375,000 shares of
common stock which
may be acquired pursuant thereto.

June 6 filed $7,078,125 of

Underwriter—None.'

-

Bonanza Air

Lines, Inc., Las Vegas, Nev. (6 18)
May 29 filed 470,000 shares of common stock (par: $t)%
Price—$2.50 per share. Proceeds—Together' with pro¬
posed borrowings, for repayment of loans,. for working .
capital, and other corporate • purposes. Underwriter— >
William R. Staats & Co., Los Angeles, Cal. v«s;
Brockton

Edison

'

Commerce Oil

Dec.

16

each 12 shares of

common

stock outstanding.

Rights ex¬
pire June 24, 1958.
(Total offering 21,664 shares and
Eastern Utilities Association,, a single majority
holder,
will purchase unsubscribed shares as well as its prorata
allotment). Price—$65 per share. Proceeds—For pay--

offered in units as follows: $1,000 of bonds and 48 shares
of stock and $100 of debentures and nine shares of stock.
Price—To be supplied by amendment.
Proceeds — To

refinery. Underwriter—Lehman Brothers, New
Offering—Indefinite.

Underwriter—None.

June 17 (with

an

York.

Community Public Service Cv. (6/17) '
May 15r filed $3,000,000 sinking fund debentures due
June-1, 1978. Proceeds^—Tcr repay bank loans and for
construction

by

Stuart
Weld
up

•

$1,320,000 of 6%

Builders

Loans

serial preferred

shares.

Underwriter—Shearson,

Underwriter—To be determined
bidders:

H

l sey;

a

Co.

&

Inc.; Kidder, Peabody & Co. and White,
Co. (jointly).
Bids^Expected to be* received
11 a.m. (EDT) on June 17 at 90 Broad Street,

&

to

New

Price—At par ($10 per share).
Hammill & Co., New York.

program.

competitive 'bidding.- Probable

June

filed

Refining Corp. * J ; <Vv A-^vV/V
$25/100,000 of first mortgage bonds due

Sept* 1* 1968, $20,000/10 of subordinated debentures due
Oct, 1, 1968 and 3,000,000 shares of common stock to be

if Budget Finance Plan, Los Angeles, Calif.
10

filed

construct

"

Co.

(letter of notification) 538 shares/ of common
stock (par $25) to be offered to minority stockholders
of record June 2, 1958 on the basis of one new share for

York,N. Y..;

Continental

May

filed

26

\

.

.

Air

Lines, Inc. (6/18-19> $12,000,000 of convertible subordinated

debentures due June 1, *1973. Price—To be supplied
by
amendment.: Proceeds—To finance expanded operations

Inc.

March

resulting from additional routes and services, and up to
$1,750,000 will be used to repay short-term indebtedness
due on or before Aug. 15, 1958 to
Vickers-Armstrongs
(Aircraft) Ltd. Underwriter —1 Lehman Brothers, New

erly Hills, Calif.

York.

27 (letter of notification) 40,000 shares of 17V2C
preferred stock (par $1). Price—$2.50 per share. Pro¬
ceeds — To selling stockholder.
Office — Los Angeles,
Calif. Underwriter—Daniel D. Weston &
Co., Inc., Bev¬

"

if Calidyne Co., Inc.? Winchester, Mass.
June
These

€ filed
shares

230,875 shares of
are

issuable

common

upon

(par $1).

stock

conversion

of

an

gregate principal amount of $923,500 of 10-year 3%

ag¬
con¬

vertible subordinated income notes of the Calidyne
Co;,
a limited partnership, which notes were assumed
by the

Dec. 31, 1957. The notes are convertible at
any time: after July lr 1958, until the maturity or prior
redemption of the notes at a conversion price of $4 per
share.

Office—Toronto, Canada.

Un¬

derwriter—None.
f Canada Southern

<

.

-

-

;

•

(6/17)

May 21 filed voting trust certificates for 400,000 shares
of capital stock (par $1—Canadian). Price—To be related

•

•

,

.

.

capital and other corporate pur¬
Underwriters-Netherlands Securities.Co.,. Inc0 30

Broad St., New York.,
Counselors
Feb.

5

cent).
Louis.

.

!

Research

Fund, Inc., St. Loufsr Mo.
filed 100,000 shares of capital stock, Cpar one
-Price—At market.- Proceeds—For investment.
—-

Counselors

Research

Sales

Robert H. Green is President

Cuban-Venezuelan Oil

Gorp.r St.
.

Voting Trusts,

'

Havana, Cuba
March 31 filed 767,838 units of voting
each certificate representing the
of

common

Cuban
ment.

stock

companies.

trust certificates,

ownership of one share
(par one-half cent) in each of 24
Price —To be supplied by amend¬

Proceeds—For

capital expenditures, exploration
Underwriter—None.

costs and other corporate purposes.

if Davis Brothers, Inc.
June8 $ (letter of notification)

Petroleum Ltd.

■

loans and-for working
poses.

Underwriter

Underwriter—None.

Campbell Chibougamau Mines Ltd.
March 10 filed 606,667 shares of capital stock (par $1),
of which 506,667 were issued in connection with the ac¬
quisition of all the assets of Yorcan Exploration Ltd

selling stockholders.

-

Cosmos Industries,

Inc. (6/2S)
' *
April 16 filed 280,000 shares of common stock.(par 10
cents). Price—$2.50 per share. Proceeds—To pay bank

company

To

on

stock

bank

Chesapeake Utilities Corp. (6/17)
May 26 filed $700,000 of .6% debentures due

Proceeds—To acquire all of the: assets of Orlando
Fuel Oil Co., Inc., Florida Service Corp;,r-Billups Petro¬

Arkansas Western Gas Co.
May 5 filed 55,774 shares of common stock
(par $5) to
be offered for
subscription by stockholders of record
May 28, 1958, at the rate of one additional share for each

—

expire

Common

repay

•

unit.

(latter proposes to distribute said shares ratably to its
stockholders of record Dec. 16, 1957).
The remaining
100,000 shares are to be sold for the account of the Estate
of A. M. Collings Henderson on the American and To¬
ronto Stock Exchanges.
Price—At market. Proceeds—

10 shares then

offered for subscription by

be

to

the basis of $100 of debentures for each

working capital.
delphia, Pa. ./
... •
v-.7,/..

Billups Eastern Petroleum Co. (6/2S) v' '
May 29 filed $2,500,000 of 7% debentures" due July 1,
1993, and 650,000 shares of common stock (par $1) to be
offered for sale in units, each consisting of $1,000 of
20

of

ceeds—To

•

debentures and

on

for

' •*;

:•/"'

shares

40

W::J'*t\ •//:>■"/

To be supplied by
amendment. Proceeds—For construction
purposes and for
payment of loans incurred for construction.
Underwrit¬
ers—The First Boston
Corp. and Blyth & Co., Inc., both
of New York.

held; rights to


stockholders

Bankers Southern, Inc.
April 14 filed 8,934 shares of common stock. Price—Ar
par ($100 per share).
Proceeds—For> general corporate
purposes
Underwriter — Bankers f Bond Co./ Louis-

ville, Ky.

1901

•
Chesapeake Instrument Corp. (B/17)
April 30 (Icaer of notification) $275,000 of 5% 10-year

Management Corp. '(7/1.4)/'.Feb. 10 filed 400,000 shares of common stock (par 2t
cents.) Price—$1 per share.
Proceeds—To reduce out¬
standing indebtedness and for working capital. OfficeHouston, Texas. Underwriter — McDonald, Holman &
•

—

& Smith and
Stone & Webster Securities Corp.
(jointly). Bids—Expected to be received up to 11 a.m.
(EDT) on June 24 at 300 Park Ave., New York, N. Y.

anc

Bankers

)' •'..

Proceeds—

ner

$1/

133,740 shares to employees pursuant to stock purchase
options. Price—To public, $6 per share. Proceeds—Fo.v
expansion and other corporate "purposes.' Office — Ai-

Co., Inc., New York.

(in multiples of $100).

for

bidding. Probable bidders: Halsey, Stuart & Co. Inc.; The
Kidder, Peabody & Co.; Eastman Dil¬
lon, Union Securities & Co.; Merrill Lynch, Pierce, Fen¬

Fidelity Life Insurance Co.

Underwriter—None*.^?*

—

Webber,

First Boston Corp.;

.

Feb. 28 filed 258,740 shares of common stock (par
of which 125,000 shares are to be offered publicly

lanta, Ga.

Office

Central Illinois Light Co.
(6/24)
May 28 filed $12,000,000 of first mortgage bonds due 1988.
Proceeds—To repay bank loans and for construction pro¬
gram.
Underwriter—To be determined by competitive

1958;;

First Boston Corp., New
and Robinson-Humphrey Co., Inc.,
both of Atlanta, Ga.
V
:
f .> v
Bankers

purposes..

Underwriter—Paine,

working capital. Office
Winter St., Superior, Wis. Underwriter—None.

—

.

Price—At par

notes.

share

26,

corporate

Curtis, New York.

To retire notes and

York, Courts & Co.

ment of notes to banks.

14,700 shares of

stock

to

stock

common

each

&

Cooperatives, Inc.
May 26 (letter of notification) $250,000 promissory notes
consisting of 4% 6-year notes and $150,000 of 5% 9-year

.

share. Proceeds—For investment in first' trust notes,
second trust notes and construction loans.
Company may

C.

standing

:>

or

Central

• Atlanta Gas Light Co. (6/27)
•
filed 121,317 shares of common stock (par $10)
for subscription by the holders of the company's out¬

for

general

Alia.,. Canada.

Jackson

June 5

May 20

per

D.

Co., Asotin, Wash.
May 20 (letter of notification) 500 shares of 5V2% cumu¬
lative preferred stock.
Price—At par ($50 per share).
Proceeds—For construction of lines and increase of plant
necessary to extend the service.
Underwriter—None.

<■

quotations on the Ameri¬
Exchange immediately prior to such offering.

Stock

Calgary,

Asotin Telephone

•

★ American Houses, Inc.
June 3 (letter of notification) 27,575 shares of 5%
lative

*..

prices

,

Jacksonville, Fla.

June

Underwriter—None..

common

(N. Y.)

Feb. 28 filed 500,000 shares of common stock
Price—To be

of

Co.
Oil Co.

,

rights to expire

5V2% convertible subordinated

to the current market

«

REVISED

'

■

1,400 shares of $6 cumu¬
stock. Price^At par ($100 per share).
working* capital. Office—501 West 44th
Ave., Denver, Colo. Underwriter—None.
lative* preferred

Proceeds—For

Number 15750

Volume 187

The Commercial und Financial Chtonicle

.

..

(2639)

05
•v

Co.

(jointly). .Bids• To be received up to 11:30 a.m.
(EDT) on June 17 at 600 Market St.* Wilmington 99, Del.

Daybreak Uranium, Inc., Opportunity, Wash.
Jan. 29 filed 1,156,774 shares of common stock (par 10
cents) f of which .630,000 -shares are. ita be offered for ac¬
count; of company and 526,774 shares; for selling stock¬
holders.

Price—At

■

Acceptance Corp., Denver, Colo.
May 19 filed 1,000,000 shares of common stock (par $1).
Price—$2 per share. Proceeds—To engage, through one
or more subsidiary companies to be formed Of
acquired,
in the business of writing life insurance and annuity
policies. Underwriter—DAC Securities Corp., Denver,

Proceeds—For exploration

market.

and

.drilling costs and other corporate purposes. Underwrit'Cr—Herrin Cof^ Seattle, Wash.
/
Dayton Aviation Radio A Equipment Corp. (7/1)
May-28-filed 500,000 shares of .common stock (par 50
cents),

Price—$1

share..

per

Proceeds-^For general
'

V"

Co.; New: York. '

.<

Ar DeKalb«Ogle Telephone Co.
'
May 29 (letter of notification) 22,024 -shares of
1958

to
on

be offered

the

basis

bf

share

one

common

of record June

to stockholders

16,
eight shares

e&eh

for

held.

Rights expire- July 16; 1958. Price—At par
($10 per share). Proceeds—For a construction program.
Office—112 West Elm St., Sycamore, 111., Underwriter—

now

1"7

None.-

■

corporate purposes.

Office—Toronto, Canada, and Em¬
Underwriter—None.

porium, Pa.
•

Dewey Portland Cement Co. (6/25)
May 29 filed 79,000 outstanding shares of the com¬
pany's class A non-voting common stock (par $7.50).
Price
To be supplied by amendment.
Proceeds — To
selling stockholders. Underwriter—G. H. Waiker & Co.,
—

St.

Louis, Mo.

due 1988. Proceeds—To refund $15,000,000
bonds due 1987 and to repay bank loans and for
construction program. Underwriter—Td be deteraained
by competitive bidding. Probable biddefs: Halsey, Stuart

capital.

June 2 (letter of notification) 500 shares of capital stock.
Price—At par ($100 per share). Proceeds—For working

bonds

of 5%

Office—923

Omaha, Neb.

Farnam St.,

Under¬

writer—None.
Dixon Chemical &

& Co. Inc.;,White, Weld & Co. and Shields & Co; (joint¬
ly); Eastman Dillon, Union Securities & Co.; The First
Boston Corp. and Blyth & Co, Inc. (jointly); Merrill
Lynch, Pierce* Fenner & Smith and Kidderj Peabody &

Research, Inc.

Dec. 24 filed 165,625 shares of common stock (par $1) to
be offered for subscription by common stockholders at
the rate of one new* share for each four shared held

NEW ISSUE CALENDAR
(Thursday)
_

f

i

^
New

'

CLee •CO-.),' $298v424^vJ

!-;i

;

Lazard

16-;(Mond^::u:;5;^.

June

England Telephone & Telegraph "Col-i-Com.

•;

:

.

Co.)

$40,000,000

;

'

.Preferred
Corp.,

Standard Oil of. Calif
Debentures
; ,,;Wfilyth'^s Co., .Inc. and Dean Witter & Co.) $150,000,000

.

.

United Gas Corpv...!:^..-.

>

Northerit Virgihia Doctors Hospital Corp-Common

&

Wachob-Bender
and Cruttenderi, Fodesta & Co.) $250i000'

v

Northern Indiana Public Service^Co.L
Common
(Deair Witter '&• Cb:* 'kijttfr'dr Co.; mc.^aiid'Mferrill Lynch. "
f
is:,-Jtanner-'&;-emlthi-v3.74r,'500r5)iare&ii.i;.v:*, ";vr'.:
t:

Freres

Securities Acceptance Corp.
(Fifst Trust Co. of Lincoln, Nebr.;

'

(Offering to stockholders- -rid underwriter L 735,245 shares

•<.»';; 1

■

Debentures

(Bids noon ;BE)T>

-

$40fp00,000

^

^

(

Juitie;^6gtThur9day)
;r ;

r;;

I7>

;/:^-:-:.-.-' ;iune

Tuesday)

'

■

.

Canada Southern Petroleum Ltd.L^i:.:Conimon
:i

■

/''■«■* "<■ (Pained Warier,•JaekfrdztrSs 'Curtis)*40CT,000 Shades
.
.

*

Chesapeake Instrument Corp.

_ _ _

Debentures

:

-.Common

' /;;(taaardCo.)' $37,500,000

,

v

•'

vr:'-:--.:'Ju«S:;27^( Friday)
Gas^Light-''Go'^i =..Common

h'

v. f

Atlanta
:

.

■

(First;; Boston •CorpV CdUrts & Co., and Robinson-Humphrey
V.'Co.;■ Inc.); 121,317 shares'

(Offering to stockholders—underwritten by DrexCi & Co*)
.*

$275,000..

;,v.

June 30

...

.

Com. & Debs.

Chesapeake Utilities Corp
.

V

■*.v

'(Harrison. & Co.);.r«

■

■

,

V

.

Delawarefcower & Light

I-..

■.

,■

..Bonds

(Bids II a m. EDT) $10,000,000

(Tuesday)

July l

Chicago, Purlington;
v

EDT) $25.000.000

/Bids 11:30 a m

-

.-v'yr'V

(Bids 11 a.m, EDT) $3,000*000

r

■-*

;w

(Monday)

Orange;&~R6ckland Utilities, Inc.—^^.^

Debentures

Community Public Sei vice Co*

&vQuincy

Eq. Tf. Ctfs.

RR.
$4,650,000

(Bids to b?. invited)

,

Rhodesia and Nyasalahd (Federation of) ^^Bonds
;
(Dttfbn. Read &.CO. Inc.! $10,000,000

Radio Ac Equipment Corp.—Com.

Dayton Aviation

(McDonald, Holman & Co.) $500,000

.

'

Walnut Grovd Products Co., Inc.-^—.Debentures
Tfust Gb.-of Lincoln,

'

18

June

Neb.)

$500,000

(Wednesday)

Air Lines, Inc..—

....Common

(Williatn R. Staats &

Continental- Air

$1,750,000

Co.)

Lines, Inc

Fall Bivetf Electric Light
(Bids 11

& Co.,

(Blair & Co., Inc.)

Bonds

;

Debentures

$4,000,000

(Glore, Forgan & Co.)

Tennessee Gas Transmission
(Dillon,

Read

Mountain Fuel Supply

Jetronie

Albemarle

Common

Northern States Power Co.

(Bids to be invited)

Central Illinois Light Co

G.

Becker

Inc.)

San Diego

a m

A.

Hogle

&

Billups Eastern

July 16

H.

Walker & Co.)




Electric

Com. & Debs.
inc.)

New

Common

$2,340,000

(Thursday)

it Evergreen Gas & Oil Co.
June 2 (letter of notification) 1,500,000 shares Of cbmmon
stock (par five cents). Price—^15 cents per share. Proceeds^-For working capital.
Office—-E. 12707 Vdlleyv/ay, Opportunity/ Spokane, Wash. Underwriter—Pennaluna & Co., Spokane, Wash. 4
r*

Fall River Electric Light Co. (6/16)
May 16 filed $3,000,000 of first mortgage and collateral
trust bonds due April 1, 1988* Prbceeds^-Together with
other funds, to purchase at par $1,110,000 of debenture

taup Electric Co., and to* repay $2,050,000 of short-torm
bank loans. Underwriter — To be determined by com¬
petitive bidding. Probable bidders: HalsCy, Stuart & Co.
Inc.; Estabrook & Co. and Stone Webster Seeurttieg Gdrp.
(jointly). Bids—Expected to be received up* to 11 a.m.

(EDT) on June 18.
Fall River Electric Light Co.
May 20 (letter of notification) 411 shares of capital
stock (par $25) to be offered to minority stockholders
of record June 2,1958 on the basis of one share for each
12 shares outstanding.
Rights expire June 24, 1968.
Total offering 18,771 shares of which 18,360 shares being
subscribed by Eastern Utilities Association* the single
majority holder and also will purchase unsubscribed
shares.) Price—$48 per share* Proceeds—To make par¬
tial payment of notes to banks. Office—85 North Main
St., Fall River, Mass. Underwriter—None.

Famous Virginia

Foods Corp.
(letter of notification) 19,500 shares of common
stock (par $5) and 390 common stock purchase warranto

Jan. 30
to

be

'Bids

Bonds

Co

to

be

$17,000 000

Montana

Power
(Bids

stock

and one

Fidelity Bankers life Insurance Corp*
stock (par $1)
to be offered for subscription by holders of outstanding
stock on a pro rata basis: thereafter the balance remain¬
ing, if any, will be offered to the public. Price—$5 per
share to stockholders; and to the public at a price to be
determined.
Proceeds — For expansion and ^ther cor¬

Office—Richmond, Va.

Florida Power Corp. (7/1)
May 29 filed $25,000,000 of first mortgage bonds due
1988.
Proceeds—To pay off temporary bank loans of

$16,000,000 incurred to meet costs of the company's con¬
struction program and the balance will be applied-to
the 1958 construction program. Underwriter—To be de¬
termined by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Kidder, Peabody & Co. and
Merrill Lynch, Pierce, Fenner & Smith (jointly); Leh¬
man Brothers and' Blyth" & Co., Inc. (jointly); Eastman
Co. Inc. (jointly); The First Boston Corp.
Bid»—Ex¬
pected to be received up to 11:30 a.m. (EDT) on July 1.

Fluorspar Corp. of Amorica
26 filed 470.000 shares of common stock (par 19
cents).
Price—$3 per share. Proceeds—For exploration
and

working

capital.

Office

—

Portland. Ore.
Sol Gold¬

berg is President

(Thursday)

•

Forest Laboratories, Inc.

26

filed

(par 10
For sale# nro-

150 000 shares of capital stock

cents). Price—$2.50 per share.

Bonds
be invited) $20,000,000

Underwritciv—

None.

Underwriter—To be named by amendment.

$40.000 000

Co
to

shares of

Federal Commercial Corp.
%;
May 21 ■ (letter of notification) 300,600 shares of common
stock (par 10 cents). Price—50 cents per share. Pro¬
ceeds—To make loans, etc. Office — 80 Wall St., New
York, N. Y. Underwriter—Dumont Securities Corp., New
York, N. Y.
/

March

September 4

units of 50

in

Price—$500 per unit. Proceeds—For equip¬
working capital. Office—922 Jefferson St.,5
Lynchburg, Va, Underwriter — Whitney & Co., Inc.,
Washington, D. C.
*
/
and

work

(Tuesday)

invited)

offered

warrant.

Dec,

England Telephone & Telegraph Co.—Debens.

$700,000

79,000 shares

Invited)

period of the corpora¬

Dillon, Union Securities & Co.. and Harriman Ripley &

Equip. Trust Ctfs.

(Bids to be Invited)

Common
Co.,

Common
$400,000

(Wednesday)

August 26

$2,500,000

Portland Cement Co..
(G.

Tampa

Wednesday)

Securities

be

to

July 17

Co.) $15,000,000

Industries, Inc.
(Netherlands

Dewey

(Bids

Debentures

Petroleum Co

(Monday)

Co.

Norfolk & Western Ry...

Preferred

(f*« Johnson, Lane, Space Corp.)

Cosmos

Management

$700,000

& Co. Inc
June 25

Bankers

$20,000,000

(Smithy Barney & Co.; Glore, Forgan &

Debentures

(McDonald, Holman & Co., Inc.)

Bonds

CO.)

$25,000,000

(Bids to be invited) $30,000,000

Co.) $5,000,000

PDT)

Corp.)

Common

Imperial Corp
(J.

Wilson

9

Boston

Southern Natural Gas Co

$7,511,400

Pacific Power & Light Co.
(Bids

First

July 14

....Debentures

Missiles-Jets & Automation Fund, Inc
(Ira Haupt &

(The

Preferred

Co.

Edison

Bonds

—

Co.,

&

Boston

$6,000,000

EDT)

a.th.

Mansfield Tire & Rubber Co

expense during the development
tion. Underwriter-^None.

porate purposes.

Bonds
$65,000,000

(Thursday)

July 10

Common

Insurance Co

Pierce, Fenner & Smith, and Pierce,
Carrison, Wulbern, Inc.) 941,564 shares

Lynch,

(A.

July 9 (Wednesday)

(Tuesday)

Paper Manufacturing Co—Debentures
Stringfellow) $3,500,000

(Bids 11

.....Bonds

$30,000,000

New York Telephone Corp.

(Offering to stockholders—Scott &

(Merrill

$10,000,000

(Minn.).

EDT)

am

Laboratories, Berkeley, Calif.

March 7 filed 450,000 shares oi common

Bonds

(Bids 11

shares

American Heritage Lijfe

Preferred

(Bids to be invited)

(MorMmer B. Burnside & Co.)

24

(Monday)

Laclede Gas Co

Industries, Inc..

June

shares

July 8 (Tuesday)

Pacific Gas & Electric Co
Common
(Offering to- stockholders—^underwritten by Blyth & Co., Inc.)
853.781

1,084,054

$8,000,000

^

$16,000,000

(Monday)

June 23

July 7

Debentures

Corp.)

Ethodont

Feb. 20 filed 300,000 shares of common stock. Price—
At par ($5 per share). Proceeds—To cover operating

■„*

Common

Co

Inc.)

Laclede Gas Co
i

Co—

Boston

First

(The

Co.,

&

(Lehinan Brothers and Merrill Lynch, Pierce, Fenner & Smith)

(Thursday)

19

JUie

$25,000,000

(Smith, Barney & CO.)

.Debentures

Corp..

(Wednesday)

July 2

$39,587,000

Standard Financial

..^——Common

Martin Co.

and dominion Securities Corp.)

Inc.

Elsin Electronics Corp. (6/12)
May 1 (letter of notification) 265,266 shards of common
stock (par two certts). Price—$1.12 V2 per share. Pro¬
ceeds—To repay bank loan; to purchase new equipment
and for working capital. Office-^-617-33 Brooklyn Ave.,
Brooklyn 3, N. Y. Underwriter—Lee Co., New York, N. Y.

ment

$12,000,000

Co

$2,000,000

(Blair & Co., Inc.) $281,250

Municipality bf Metropolitan Toronto—Debentures
(Harriman Ripley

Stock

^.Debentures

...

Salem-Brosius, Inc.

EDT) $3,000,000

am

Bonds

ami. EDT) $25,000,000

Salem-Brosius, Inc.

Debentures

(Lehman Brothers)

11:30,

(Whitney & Co.) $115,000

—

'

(Bids

Potomac Plastic Co.^———...—^Debs. &

Arizona. Public Service Co
Preferred
(The First Boston Corp. and Blyth & Co., Inc.) $12,000,000 {
Bonanza

Cbrp.i-^^1——

-Florida Power
.

V'.

exchanges will be made unless the exchange Ofier
holders of at least 80% of the out¬
standing Elgen common, and Dresser will' Hot be obli¬
gated to consummate any exchanges unless the offer
is accepted by the holders of at least 95% of the out¬
standing Elgen common. The offer will expire On Jftne
17, unless extended. Underwriter—None*
is accepted by the

bonds and $950,000 par Value of common stock of Mbn-

Lazard':-F.und,:'.|^

1

: " (Bids 11 a.tn.*;EDff $15,000,000

;

Industries, liic.'

At European Coal & Stool Community (High
Authority of)
(6/25)
June 5 filed $25,000,000 secured bonds dud July 1, 1978
and $15,000,000 serial secured notes maturing July 1,
1961-1963. Price—To be supplied by amendment. Pro¬
ceeds—For iron and coal loans. Underwriter—First Bos¬
ton Corp., Kuhn, Loeb & CO., and Lazard Freres & Co;,
all of New York* Offering—Expected- June 25.

European Coal & Steel Community (High
Authority of)
—^ .x jik a m j. .Bonds
.(First Boston Corp.]vKuhn. Loeb & Co., and

Electronic^ Corp.____ __„i_:.:-L.Gommon
•

Dresser

No

350,000 shares of common stock. Price—-$1
share. Proceeds—For new equipment, repayment of
loam, acquisition of properties under option, and other

per

^ Dieterich Field, Inc.

12

Underwriter—P. W. Brooks & Cft, fife,
Offering—-Indefinitely postponed. Other fi¬
nancing (nay be arranged.
New York.

June 5 filed

Light CoV\( 6/17)J;'!^; ;
May 21 filed $25,000,000 of first mortgage' ah'd collateral

June

expansion
Clifton, N. J.

A" Derson Mines Ltd*

Delaware Rower &

trust

1

supplied by amendment* ProceeiBM-Rqr
and general corporate purposes,
office—•

be

Feb. 28 filed 128,347 shares of common stock (par Sdg)
being offered in exchange for outstanding common stock
of the Eigen Corp. on the basis of one share Of DreSfter
Industries common for 3.4 shares of Elgen's Cdmmbn.

Colo.
-

Underwriter —J McDonald, Holman, &~

porate purposes.

stock

cor-

Denver

Price—To

Continued

on

page

36

86

The Commercial and Financial Chionicle

(2640)

Continued
motion

&

Telegraph Co., and for property
provements. Underwriter—None.

from page 35

of

company's products, working capital, addi¬
tional inventory and accounts receivable, for researcb
And development and for other general corporate our
poses. Oifice—Brooklyn, N. Y. Underwriters—Statement

Industro Transistor

Pierce

Port

&

Terminal

of

$1,425,248,

the

and

Co., New York.

Co.

balance

will

be

added

to

Office—Fort Pierce, Fla. Underwriter
—Atwill & Co., Inc., of Miami Beach, Fla., on a best
•

■;

>.

General Aniline ft Film

par) and 1,537,500 shares of common B stock (par $1)
Proceeds—To the Attorney General of the United States

\

Corp.
(jointly);
Kuhn, Loeb &
Co.; Lehman
Brothers, and Glore, Forgan & Co. (jointly). Bids—Had
been scheduled to be received up to 3:45 p.m. (EDT) on
May 13 at Room 654, 101 Indiana Ave., N. W., Washing¬
ton 25, D. C., but bidding has been postponed.

lebenture and

Devices, inc., Princeton, N. J.
(letter of notification) 40,000 shares of com¬
stock (par $1) to be offered for subscription by

and for
ment

•

Underwriter

Underwriter—Buckley Enterprises, Inc.

:

Lancer Industries, Inc.
May 26 (letter of notification) 75,000 shares of common
stock (par 10 cents).
Price—$4 per share. Proceeds—
For purchase of equipment, raw
materials, inventories
and supplies and for other
working capital. Office—
None.

Corp.

June

for issuance upon exercise
sold at 25 cents per warrant

of 6%
par

To

—

primarily in the development and

engage

common

Foprth St., Las Vegas, Nev. Underwriter

Mountain

amount

mortgage bonds series C in units of $500
each. Price—Par per unit.
Proceeds—To be used to pay
cost of constructing an addition to
warehouse. Under¬
writer—None.

Statement

to

be

Inn

Corp.

—

Office—Beverly Hills, Calif.

Underwriter—

None.
•

Mansfield Tire

&

Rubber Co.

(6/24)
June 4 filed $5,000,000 of
sinking fund debentures, due
July 1, 1973, and $2,511,400 of convertible subordinated
debentures, due July 1, 1973. Convertible subordinated
debentures
of $100
mon

to

be

offered for subscription by com¬
record June 24, 1958, at the rate
principal amount of debentures for each 22 com¬
are

stockholders

mon

of

shares then held.
to

be supplied
deem and retire

first

ities.

Price—For

assessable

common

stock.

Price—At

par

Proceeds—To

outstanding debentures and otljer

(two cents per

None.

Bell

Telephone Co.

May 9 filed 870,792 shares of common capital stock be¬
ing offered for subscription by stockholders of record
May 29, 1958, at the rate of one new share for each six

shares held; rights to expire on June 30.
Minority stock¬
holders own 5,934 shares. Price—At
par ($100 per share).
Proceeds—To repay advances from American
Telephone




..

■

-.v./' -.<'■•

■.

Canada
v:. i

•/-•-'•.

"
,

May 29 filed $3,800,000 of instalment debentures, ma¬
turing from 1959 through 1973, and $35,787,000 of sink¬
ing fund debentures, maturing in 1978. Price—To be
supplied by amendment. Proceeds—For public works

improvements. Underwriter — Harriman Ripley & Co.,
Inc., and Dominion Securities Corp., both of New York.
Murphy Corp., El Dorado, Ark.. '
May 5 filed 71,958 shares of common stock (par $1) be¬
ing offered in exchange for outstanding common shares
of

Superior Refinery Owners, Inc., and Lake Superior
Refining Co. (both of Superior, Wis.), at the rate of six
shares of Murphy stock for each share of Superior Re¬
finery and Lake Superior stock; also in exchange for

outstanding- negotiable j promissory notes and second
mortgage notes of Superior Refinery, and for outstand¬
ing negotiable promissory notes of Lake Superior, at
rate

of

four

such notes.

shares

Underwriter—A.

G.

Becker

&

Co., Inc., Chicago,

• Martin Co., Baltimore, Md. (7/2)
$25,000,000 of sinking fund debentures, due
July 1,-1978. Proceeds
Working capital and general
June 11 filed

ment.

purposes.

Price—To

be

supplied

by

amend¬

Underwriter—Smith, Barney & Co., N. Y.

Metropolitan Hotel Corp., Portland, Ore.
May 27 filed $3,000,000 of 4% 25-year sinking fund de¬
bentures due July 1, 1983.
Price—At par. Proceeds—
For construction program and
tion Agent — The

Ore.

working capital. Subscrip¬
Hockenbury System, Inc., Portland,

Mid-America Minerals, Inc., Oklahoma
City, Okla.

June 3 filed $199,000 of
working interests in the Buffalo

Prospect.

for

each

$100 principal amount of

Offer is conditional upon its
acceptances by
at least 95% of the outstanding shares and

hdlders of

notes of both companies and will
expire on June 9, un¬
less extended, but in no event later than June 23.
/
„

Mutual Securities Fund ot Boston

May 27 filed 200,000 shares of beneficial interest in the
Price
At market.
Proceeds
For investment.
Underwriter—Keller Brothers Securities Co.,
Inc., Bos¬
—

—

.

ton, Mass.

-•

_

National Beryl & Mining Corp., Estes
Park, Colo.
May 16 (letter of notification) 2,916,000 shares of nonassessable

stock (par one cent). Price—10 cents
Proceeds—For mining expenses. Underwriter

common

share.

per

—Birkenmayer & Co., Denver, Colo.
^ National Educators Finance Corp.
4 (letter of notification) 50,000 shares of common
Price—At par (50 cents per share);" Proceeds—

June

stock.
To

train

out

the

and

procure

projected

Office—1406
Western
•

Pearl

Securities

Natural

Gas

to implement and carry
development and operation.
Boulder, Colo.
Underwriter-

persons

plan of

St.,

Co., Boulder,

Colo.

Pipeline Co. of America

Nov. 19 filed $40,000,000 of first mortgage
pipeline bonds
1977. Price—To be supplied by amendment. Pro¬

due

Read

&

reduce

Co.

Inc.

bank

loans.

Underwriters

—

and

Dillon,
both

Halsey, Stuart & Co. Inc.,
Offering—To be made in July.

May 5 (letter of notification) 150,000 shares of common
stock (par one cent). Price—$2
per share. Proceeds—To
pay loan; to acquire fishing tools for leasing; and for
working capital. Office—931 San Jacinto Bldg., Houston,
Tex.

Buffalo Prospect consists of all the
rights of
Mid-America under a certain farmout
agreement be¬
tween the company and Shell Oil Co.
Agreement covers

Underwriter—T. J. Campbell Investment
Co., Inc.,

Houston, Tex.
New England Telephone & Telegraph Co. (6/16)'
May 16 filed 735,245 shares of common stock to be of¬
fered for subscription by stockholders of record June
11

on

the

basis

of

one

new

share

for

each

five

shares

held; rights to expire on July 11. American Telephone &
Telegraph Co.owns about 2,547,411 shares (about 69.29%)
of the

outstanding stock. Price—At par ($100 per share).
Proceeds—To repay advances from parent and for cor¬
porate purposes. Underwriter—None.
Norfolk ft Carolina Telephone &
Elizabeth City, N. C.

re¬

secur¬

111.

corporate
non¬

share). Proceeds — For mining and
milling expenses.
Office—504 16th Ave.,
Lewiston, Idaho. Underwriter—
Illinois

(6/iB)

sinking fund deben¬

by amendment.

—

Idaho Mining &
Milling, Inc.
May 19 (letter of notification) 15,000,000 shares of

•

.

Nedow Oil Tool Co.

ing capital.

tures

* H.W.I. Building Corp., Ft. Wayne, Ind.
June 2 (letter of
notification) $180,000 principal

Co., Salt Lake City, Utah.

and 20 common shares.
Price
$200 per
Proceeds—For construction, equipment and work¬

stock.

—None.

Underwriter—The First
~
V, ;
•
v'

Municipality of Metropolitan Toronto,

ceeds— To

unit.

•

of

'

..

•

:

of New York.

debentures

Co.,

5%

debentures, at

common

debentures due 1968 and 70,000 shares of common stock
(par $5) to be offered in units consisting of $100 of

acceptance by holders of not less than 68,330 shares of
the General Trading stock. Offer
expires June 25. Office
—Culver City, Calif.
Dealer-Manager—Kalman &

of

Price—For

May 20 filed $350,000 of 6% subordinated sinking fund

the basis of (a) three shares
(b) $12 principal amount
$5 in cash, for each of the 85,412

outstanding shares of General Trading common stock.
The offer is conditioned, among other
things, upon its

fice—710 South

Un¬

Securities

convertible debentures.

Mammoth

on

Price—At par
($1 per share).
Proceeds—For
supplies, advertising, furniture and working capital. Of¬

1958.

Municipal Investment Trust Fund, Inc. (N. Y.)
May 9, 1957 filed 5,000 units of undivided interests in
Municipal Investment Trust Fund, Series A. Price—At
market. Proceeds—For investment. Sponsor—Ira Haupt
& Co., New York.
■'
1
/
"
-.0/"

amended.

common

Inc., St. Paul, and Minneapolis, Minn.
+ Houston Chemical Manufacturing Co.
May 26 (letter of notification) 300,000 shares

in

v..

Hogle &

to be offered together with cash in
exchange for the outstanding common stock (par $20)

Trading Co.

program

Corp., New York.

operation of various properties, including shopping cen¬
ters. Office—Salt Lake
City, Utah. Underwriter—J. A.

Inc.

etock (par 10 cents)

of General

Insurance

(in $1,000 units); and for

ness

—

May 9 filed $1,024,944 of 5% collateral notes, <?ue June
15, 1968 (subordinated) and 256,236 shares of common

of American Machine
of 5% notes, and
(c)

(par $1).

stock, $4.50 per
share. Proceeds—For contractual
obligations, for work¬
ing capital, and other general corporate purposes. Busi¬

None.
14. & B. American Machine Co.,

like amount of bank loans; and the balance for

a

Fund.

•
Magna Investment ft Development Corp.
May 26 filed 56,000 shares of common stock and $500,000

organizers, incorporators, management, and/or direc¬
tors. Price—$10 per share. Proceeds—For
working cap¬
Underwriter

Inc., N. Y. (6/26)
2,500,000 shares of capital stock

Corp.
March 28 filed 1,000,000 shares of
capital stock (par $1).
Price—$5 per share. Proceeds—To acquire stock control
jf "young, aggressive and
expanding life and other injurance companies and related
companies and then to
jperate such companies as subsidiaries." Underwriter—
First Maine Corp.. Portland. Me

to

purposes.

Boston

Underwriter—

Fund,

filed

Life

Guardian Insurance Corp., Baltimore, Md.
Aug. 16 filed 300,000 shares of common stock, of which
200,000 shares are to be publicly offered and the remain¬

corporate

5

St., North Miami, Fla.

..

per share.
Proceeds—For investment.
derwriter—Lazard Freres & Co., New York.

*

to be

144th

Price—$15

try and Finance"). A Belgian Investment Co.

reserved

E.

.

• Lazard

50,000 American Depositary Receipts for
bearer shares of Compagnie D'Outremer Pour L'lndustrie Et La Finance ("The Overseas
Company for Indus¬

general

N.

1827

filed

and

a

Carlstadt, N. J. Underwriter—None.

^ Guaranty Trust Co. of N. Y.

ital

on

shares held, with additional subscription privileges sub¬
ject to allotment.
Price—$1.50 per share. Proceeds—
To repay outstanding debts to purchase real
property
and for working capital.
Office — Broad and 13th St.,

(letter of notification) 150,000 shares of class a
stock (par 10 cents). Prtce—$2 per share; Pro¬
ceeds—For general corporate purposes.
Office—1 E
35th Street, New York 16, N. Y.
Underwriter—James
Anthony Securities Corp., 37 Wall St., New York 5, N. Y

are

Co., Inc., New York,

redeem

construction

.

common

ing 100,000 shares

&

Lancaster Chemical Corp.
May 26 (letter of notification) 122,115 shares of common
stock (par $1) to be offered for subscription
by common
stockholders at the rate of one new share for each two

Feb. 12

of warrants which

Burnside

best efforts basis.

Getty Oil Co., Wilmington, Del.
April 11 filed 2,170,545 shares of common stock (par $4*
being offered in exchange for capital stock (par $5) of
the Mission Development Co., on basis of one share of
Getty stock for each 1.2 shares of Development stock, of
five shares of Getty for six shares of Development stock
£>ffer to expire on June 25 at 3:30 p.m. (EDT).

10

....

—Mortimer B.

Georgia Casualty ft Surety Co., Atlanta, Ga.
May 6 filed 450,000 shares of common stock (par $1)
Price—$6 per share. Proceeds — For general corporate

June

>

.

130,000 shares of common stock (par 10
Price—$3.75 per share. Proceeds—For research
and development and for working capital. Underwriter

suant thereto.

Qlassheat

Industries, Inc., Philadelphia, Pa.

(6/23)
May 27 filed

/".••

>

Mountain Fuel Supply Co. (6/19)
May 27 filed $16,000,000 of debentures due 1983. Price—
To be supplied by amendment.
Proceeds—$14,000,000 to

\

cents).

June 5 filed $11,500,000 of interest in the company's
Employee Savings Investment Plan, together with 200,©00 shares of common stock which may be acquired
pur¬

*

For purchase of land, construction and
working capital.
Underwriter—Southeastern Securities Corp., New York.

working caiptal, etc. Underwriter—None. State¬

......

^ General Foods Corp.

purposes.

:I''

10

•

Underwriter—None.

Motel Co. ot Roanoke, Inc.,
Roanoke, Va.
f: ■
Nov. 18 (letter of notification) 60,000 shares of common
stock (par 40 cents).
Price—$5 per share. Proceeds—

(par $1).

effective.

Jetronic

etockholders at the rate of approximately 18.5 shares
for each 100 shares held about April 15; unsubscribed
chares to public. Price—$3.50 per share. Proceeds—For:,

.

eral corporate purposes.

Opportunity Life Insurance Co.

•rovements; for retirement of present preferred shares

General

Community Developers, Inc.,

Princeton, N. J.
\
May 27 filed 15,000 shares of common stock. Price—
$100 per share. Proceeds—For working capital and gen¬

shares of stock, or a $100 debenture u
and one share of stock. Price—Par for debenture, plus
$2 per share for each 10 shares of stock. Proceeds—For
onstruction of a shopping center and other capital im- '

March 31

—None.

Modern

•
Janaf, Inc., Washington, D. C.
July 30, 1957 filed $10,000,000 of 5J/2-8.% sinking fund
debentures due Aug. 1, 1972 and 100,000 shares of com¬
mon stock (par 20 cents) to be offered in units of a
$1,000'

ton

expansion, equipment and working capital.

writer—Ira Haupt & Co., New York.

writer—Columbine Securities Corp., Denver, Colo.

Underwriter—To be determined by competitive bidding
Probable bidders: Blyth & Co., Inc., and The First Boa-

gas leasehold in a total of approximately
in Harding County, South Dakota.
j

Missiles-Jets ft Automation Fund, Inc. (6/24)
May 8 filed 500,000 shares of capital stock (par $1).
Price—$10 per share. Proceeds—For investment. Under¬

Price—$5 per share. Proceeds—For working capital and
other corporate purposes. Office—Denver, Colo. Under¬

Corp., New York

and

acres

Thursday, June 12, 1958

.

•

June 2 filed 5,000,000 shares of common stock

-

Jan. 14, 1957 filed 426,988 shares of common A stock (no

mon

(N. Y.)

Offering—Being held in abeyance.

International

oil

1,600

^ Inland Steel Co.
June 6 filed 500,000 shares of capital stock, to be offered
under the Inland Stock Purchase Plan to eligible em¬
ployees (including officers, whether or not directors)
of the company and its subsidiaries.

working capital.

efforts basis.

the

28 filed 150,000 shares of common stock
(par 10
jents). Price—To be related to the market price. Pro•eeds—For working capital and to enlarge research and
ievelopment department. Underwriter — S. D Fuller &

May 23 filed 2,138,500 shares of common stock (par $1).
l*rice—To be supplied
by amendment.
Proceeds—To
pay some $174,000 of outstanding indebtedness and to
complete phase one of the port development plan, at a
cost

im¬

Feb.

to be amended.
Fort

Corp.

additions and

.

.

Telegraph Co.,

May 22 (letter of notification) 3,000 shares of common
stock to be offered to common
stockholders on the basis
of one share for each four
shares of common stock held
on June 5, 1958 at
par ($100 per share). No
is involved.

The proceeds

term open notes and for
•

underwriting

are

to be used to retire short-

working capital.

Northern

Indiana Public Service Co.
(6/16)
374,500 of common stock to be offered for
subscription by common stockholders of record at 2
p.m.
on iJune 16,
1958, at the rate of one additional share for
June 2 filed

each 10 shares then held. Offer
expires July 7. Price—
To be supplied by amendment. Proceeds
For working
capital and other corporate purposes.
UnderwriterDean Witter & Co., Blyth &
—

Co., Inc., and Merrill Lynch,
Pierce, Fenner & Smith, all of New York.
Northern

States Power Co.
(Minn.) (7/8)
May 29 filed $30,000,000 of first mortgage bonds due
July
1, 1988. Proceeds — To refund $18,000,000 of 5%
bonds

and for construction
program.

Underwriter—To be deter-

Volume 187

Number 5750

mined by competitive

.

.

The Commercial and Financial Chronicle

.

bidding. Probable bidders: Halsey, /

Stuart & Co. Inc.;

The First Boston Corp. and Blyth &
Co., Inc. (jointly); Merrill Lynch, Pierce, Fenner &
Smith, Kidder, Peabody & Co. and White, Weld & Co.
(jointly); Lehman Brothers and Riter & Co. (jointly);
Equitable Securities Corp. and Eastman Dillon, Union
Securities & Co. (jointly). Bids—Expected to be received
up* to 11 a.m. (EDT) on July 8. Horthern Virginia Doctors

Hospital Corp. (6/16)
April 4 (letter of notification) 30,000 shares of common
stock (par one cent). Price—$10 per share. Proceeds—
For building fund. Office — 522 Leesburg Pike, Falls
Church, Va. Underwriter—Whitney & Co., Washington,
a c.

^Northwestern

Co., Huron, S. D.
of common stock (par $3) to
be offered for subscription by common stockholders at

Service

Public

June 6 filed 59,532 shares

the rate of
record

one

is

date

share for each

new

to

be

supplied by

10

shares held.

amendment.

The

Price—

To be supplied by amendment. Proceeds—To be applied
to the payment of $900,000 of short term bank notes, the

funds

which

from

were

used

for

the

1957

construction

will be applied to the
program.
Underwriter —

program, and the balance if any,

company's

1958

A. C. Allyn

construction

the public.

Price—To be supplied by amendment. Pro- ~ * Securities Acceptance Corp.
(6/25)
..v.
May 23 (letter of notification) 10,000 shares of 5% cumu-l
selling stockholders.
Underwriter—Market
lative preferred stock. ■ Price-r-At par ($25 per share).,
Securities, Inc., Salt Lake City, Utah.
Proceeds—For working capital. Office—304 South 18th *
Paxton

ceeds—To

(Frank) Lumber Co.
May 26 (letter of notification) 15,000 shares of common
stock (par $5) to be offered to employees. Pricje—$12.80
per share.
Proceeds—To redeem common stock. Office 1
St. John Ave., Kansas
None.' v-:# :t, '• •• t •
Peckman Plan

May

Oil Inc., Salt Lake City, Utah
April 4 filed 597,640 shares of common stock (par $1)
to be offered for subscription by common stockholders
of record March 24, 1958 at the rate of 1^4 new shares
for each share then held. Employees may purchase 50,000 shares of unsubscribed stock. Price—To stockholders,
$K75 per share; and to public, $2 per share. Proceeds—
For mining, development and exploration costs, and for
working capital and other corporate purposes. Under¬
writers—Harrison S. Brothers & Co., and Whitney & Co.,
both of Salt Lake City, Utah.
Oil & Mineral Operations, Inc., Tulsa, Okla.
April 14 filed 200,000 shares of common stock. Price—
$2.50 per share. Proceeds—For payment of loans, various
equipment, and a reserve for future operations. Business
—To acquire and operate mining claims and oil and gas
properties. Underwritcr-r-Universal Securities Co., En¬
terprise Building, Tulsa, Okla.

16

Gas & Electric Co.

filed $15,000,000

of

incurred

loans

first

Potomac

bonds

with

the

due

held; rights to expire

Enterprise, Inc., Wichita, Kansas
May 5 filed 125,000 shares of common stock. Price—$10
per share.
Proceeds — To be used to organize, or re¬
organize and then operate companies in foreign nations,
principally, but not exclusively, in the Far East, Near

company's

East and Africa.

Rand

B common stock

two

shares

(par 50 cents) to be offered in units of
A and one share of class B stock.

of class

Price—$4.50 per unit. Proceeds—For expenses incidental
to drilling for oil.
Office—llV/2 E. St. Peter St., New

Iberia, La. Underwriter
Orleans, La.

—

T. J. Feibleman & Co., New

Rhodesia and Nyasaland

(Federation of)

(6/17)

May 8 filed $10,000,000 of external loan bonds due May
1, 1973. Price—To be supplied by amendment. Proceeds
—Together with a loan of $15,000,000 from World Bank,
to

be

used, mainly for capital expenditures, including
Underwriter—Dillon, Read & Co.

railroad development.

and for construction program. Under¬
& Co., Inc., San Francisco, Calif., and

New York, N. Y.

on

March 31 filed $2,000,000 of 5% notes, due Oct. 1, 1963
to be offered in two types: (a) interest-bearing notes
with interest payable at the rate of 5% and at an

offer¬
ing price of 100% of principal amount; and (b) capitalappreciation notes, at a discount from maturity value so
as to yield 5%
compounded semi-annually. Proceeds—
For making investments

and loans in companies or en¬

terprises that the corporation is already financially in¬
terested in, or
—None.

for other corporate

Paradox Production

purposes.

Underwriter

Corp., Salt Lake City, Utah
April 18 filed 767,818 shares of common stock (par $1),
of which 100,000 shares are to be offered by the company
in exchange for oil and gas properties and 3,000 for serv¬
ices; the remaining 664,818 shares are to be offered to




(New Jersey)'

.

'

>

✓

>v <

/

ard Oil stock for 10 shares of International stock.

;

Offe*

July 1, 1958. Statement effective May 23.
Underwriters—Morgan Stanley & .Co,, in Upited. States;
and Harris & Partners, Ltd. in. Canada./ v /
/
^Standard Packaging Corp., New York
4 filed 225,385 shares of the company's common

June

stock

(par $1), such shares are to be issued ;to Johnston

Foil Manufacturing
an

Co.,

a

New Jersey corporation, under

agreement pursuant to which Standard acquired sub-

lantially all of the assets of Johnston.

and

,

Rockcote Paint Co.
March 21 (letter of notification) 14,250 shares of 7%
cumulative preferred stock (par $10) and 10,000 shares
of common stock (par $1). Price—For preferred stock,
$10.25 per share; for common stock, $8 per share. Pro¬
ceeds—For working capital. Office—200 Sayre St., Rockford, 111. Underwriter — The Milwaukee Co., Milwau¬
kee, Wis.

^ Salem-Brosius, Inc., Pittsburgh, Pa. (7/1)
10 filed $2,000,000 of convertible subordinated de¬
bentures, due July 1, 1973, and 112,500 shares of common
stock (par $2.50). Price—To be supplied by amendment.

June

Proceeds—To

be used

beneficiate manganese

to

Southwest Shares, Inc.,

Underwriter—
A
•

ores.

Austin, Texas.

t

in connection with the proposed

,

\ ;
•
April 22 filed 15,000 memberships in the Stock Purchase
Plan for the employees of the company and its sub¬
sidiaries, together with 188,000 shares of common stock
(no par) which may be purchased by the trustees of the
plan during the period July 1, 1958, to June 30, 1959,.
with respect to the 1958 plan. Registration also covers
243,288 shares of outstanding common stock whith may
be offered for possible sale by the holders thereof during
the period July 1, 1953 to June 30, 1959. Underwriter—
Sun Oil

Inc., Philadelphia, Pa.

None.

ic Sunday River Skiway Corp., Bethel, Me.
5 (letter of notification) 14,357 shares of common
—
At par ($10 per share). Proceeds — For
working capital. Underwriter—None.
June

stock. Price

^ Surety Oil Co.
May 28 (letter of notification) 1,200,000 shares of com¬
mon stock.
Price—At par (25 cents per share). Proceeds
development of oil and gas properties. Office—290
University Ave., Provo, Utah. Underwriter—None.

—For

North

June 20,

Bond Fund, Inc., Washington,
1957 filed 40,000 shares of common stock.

D. C*

Trice

Proceeds—For investment. Underwriter
—Equitable Securities Corp., Nashville, Tenn. OfferingHeld up pending passing of necessary legislation by

—$25 per share.

Congress.
Technology Instrument Corp.
27 filed 260,000 common shares

"best efforts" basis.

Pacific Power & Light

Palestine Economic Corp., New York

Co.

Tax Exempt

Miami, Fla.
May 15 filed 750,000 shares of common stock (par 10
cents). Price—To be supplied by amendment. Proceeds
—For working capital. Underwriter—James H. Price &
Co., Inc., of Coral Gables, Fla., for 250,000 shares; balance
Riddle Airlines, Inc.,

July 8, 1958.

Co. (6/24)
May 20 filed $20,000,000 of first mortgage bonds due
July 1, 1988. Proceeds—Together with other funds, will
be used in carrying forward the company's construction
program through 1958 and in retiring bank borrowings.
Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Lehman
Brothers; Bear, Stearns & Co., and Salomon Brothers &
Hutzler (jointly); Eastman Dillon, Union Securities &
Co. and Kidder, Peabody & Co.
(jointly). Bids—To
be received up to noon (EDT) on June 24 at Room 2033,
Two Rector Street, New York 6, N. Y.

<?.'•

1.1.

May 5 filed 2,246,091 shares of capital stock

Inc., New York.

share for

Price—To be supplied by amendment. Proceeds—To re¬
pay bank loans
writer — Blyth

Underwriter—None.

Drilling Co., Inc.

May 12 (letter of notification) 100,000 shares of class A
common stock
(par 50 cents) and 50,000 shares of class

(par $25)
stockholders of

on

',

>•

* Standard Oil Co. (Calif.) (6/25)
' ;
June 4 filed $150,000,000 of sinking fund debentures duo
July 1, 1983. Price—To be supplied by amehdment. Pro¬
ceeds—To refinance a bank obligation of $50,000,000 duo
this year to provide additional capital for the company's
overall program.
Underwriters—Blyth & Co., Inc.,; and
Dean Witter & Co., both of Sail Francisco, Calif,; and
New York, N. Y. Offering—Expected, June 25. ^' sT

Process

Private

stock

new

Forgan & Co., New York.

Underwriter—None.

(6/23)

subscription by common
17, 1958 at the rate of one

' "

(6/18)

Price—At par ($10 per share). Proceeds—For the
purchase of the manufacturing assets of another com¬
pany. Office—436 Commercial Square, Cincinnati, Ohio.

and operating expenses.
Office—2502 N. Calvert
St., Baltimore 18, Md.
Underwriter—Burnett & Co.,
Sparks, Md.

June

Corp.

Strategic Minerals Corp. of America, Dallas, Tex*
$2,000,000 of first lien mortgage 6% bonds
975,000 shares of common stock (par 10 cents). Price
—For bonds, 95% of principal amount; and for stock $3
per share. Proceeds—To erect and operate one or more
chemical processing plants using the Bruce r William*

tion

record

Financial

March 31 filed

20,000 shares of common

(letter of notification)

stock.

Enterprises Inc.
March 6 (letter of notification) 23,200 shares of com¬
mon class B stock (par $1).
Price—$5 per share. Pro¬
ceeds—For completion of plant plans; land; construc¬

to be offered for

and

ic Printing Machinery Co.
June 4

O. T. C.

each 20 shares then

Manitoba,. Saskatchewan

Canada.

Bids—To be received

common

of

Alberta and to
residents of the United States "only in the State of North
Dakota." Price — $2.50 per share. Proceeds — For con¬
struction purpose.
Office — Saskatoon, Saskatchewan,
Canada. Underwriter—Allied Securities Ltd., Saskatoon,

up to

Electric Co.

Standard

May 29 filed $4,000,000 of 15-year first subordinated con¬
vertible debentures due June 1, 1973. Price—To be sup¬
plied by amendment. Proceeds—To retire $725,000 Of in¬
debtedness and for working capital. Underwriter— Glore,

Standard Oil

Prairie Fibreboard Ltd.

also to purchase 20,000 shares of Rockland
Co., a subsidiary. Underwriter—To be deter¬
mined by competitive bidding. Probable bidders: Halsey,
Stuart & Co. Inc.; The First Boston Corp.; W. C. Langley

&

purchase of receivables secured by Mobile Homes, or
other collateral; and $275,000 for working capital, re¬
serve, etc. Office—Raleigh, N. C. Underwriter—None.

(7/1)

Feb. 28 filed 210,000 shares of common stock (par $1.50)
to be offered for sale to residents of Canada in the Prov¬

decessor)

Gas

May 15 filed 2,000,000 shares of common stock (par 50
cents). Price —$1 per share. Proceeds — $1,525,000 for

will expire on

Electric

Pacific

.

V 7

ital. Office—1550 Rockville Pike, Rockville, Md. Under¬
writer—Whitney & Co., Inc., Washington, D. C.

program

Co.; Equitable Securities Corp.
11 a.m. (EDT) on June 30.

*

(par $7)
being offered in exchange for common shares of Inter¬
national Petroleum Co., Ltd., of Toronto, Canada, and
Coral Gables, Fla., in the ratio of nine, shares of Stand¬

Inc.

in connection

Underwriter—None.

City, Tenn.

Southern Frontier Finance Co.

(letter of notification) $57,500 of 6% subordi¬
nated convertible debentures and 57,500 shares of class A
common stock
(par one cent) to be offered in units of
500 shares of stock and $500 of debentures. Price—$1,000
per unit.
Proceeds — For equipment and working cap¬

inces

mortgage

Plastic Co.

March 31

For construction program and

May 27 filed 853,781 shares of

Co.

—

and the retirement of preferred
stock of The Orange and Rockland Electric Co. (a pre¬

&

Underwriter—Wiles

capital and for development of district offices in the
states where the company is currently licensed to do
business.
Office—Jackson, Tenn.
Underwriter—None.
R. B. Smith, Jr., is President and Board Chairman.

(6/30)
May 29 filed $10,000,000 of first mortgage bonds, series

construction

the note to Mr. Harroun.

Johnson

Under¬

(par $1),
consisting of 62,000 shares of class A-voting stock and
248,000 shares of class B-non-voting stock to be offered
in units consisting of one class A and four class B
shares.
Price
$75 per unit.
Proceeds — For working

(6/16)

Orange & Rockland Utilities,

bank

on

Peoples Protective Life Insurance,

Halsey, Stuart & Co. Inc.; Equitable
The First Boston Corp.; Kuhn, Loeb &
Co., Merrill Lynch, Pierce, Fenner & Smith and White,
Weld & Co. (jointly); Harriman Ripley & Co. Inc. and
Eastman Dillon, Union Securities & Co. (jointly). Bids—
To be received up to 11 a.m. (EDT) on June 16 at The
First National City Bank of New York, 55 Wall St., New
York 15, N. Y.

—

(par $1).

& Co., Dallas, Texas.

Securities Corp.;

Proceeds

stock

investment.

13

est due

Probable bidders:

1988.

common

Proceeds—For

Valley Land Co., Carlsbad, N. Mex.
filed 2,000,000 shares of common stock (par
10 cents), of which 300,000 shares are to be offered for
sale by the company and 1,700,000 shares by the present
holders thereof.
Price—$1 per share. Proceeds—From
sale of the 300,000 shares, to be used to pay 6% mortgage
notes and interest and to pay back tax claims, and inter¬

June 1, 1988. Proceeds—For construction program. Un¬
derwriter — To be determined by competitive bidding.

F due

market.

Pecos

March

>j

.jjf

City, Mo.

writer—Investors Investments Corp., Pasadena, Calif.

,

May

19 filed 20;000 shares of

Price—At

Underwriters—First Trust Co. of Lin- '
Neb.* "

St., Omaha, Neb:

coin, Lincoln, Neb.; Wachob-Bendejv Corp., Qmaha,
and .Cruttenden, Podest&& Co., Chicago, 111;-I
'
/

* Southeastern 'Mines,' Inc.'"' '
"'v'
Underwriter—
.....
•.
r-. v,.... May 28. (letter of. notification) 3,000,000 shares- of com*!
mon stock.
Price—At par (1Q cents per share). Proceed*:
Fund, Inc.; Pasadena, Calif.
—For mining expenses. Address—P. O. Box 3034, North/

—6311

March 27 filed 310,000 shares of common stock

& Co., Chicago, 111.

Oklahoma

(2641)- 37

March
which

(par $2.50) of

shares are for account of

204,775

stockholders and 55,225 shares are

three selling

for account of com¬

pany. Price — $10 per share. Proceeds — For working
capital and general corporate purposes. Business — De¬
velops and manufactures precision potentiometers and
other precision electronic components and measuring in¬
struments. Office—Acton, Mass. Underwriters — S. D.

Fuller

&

Co.,

York, and Scott, Horner
Statement effective June 3.

New

Lynchburg, Va.

& Co.,

Tele-Broadcasters, Inc.
March 31
mon

stock

(letter of notification) 40,000 shares „of com¬
(par five cents). Price — $3.25 per share.

acquisition of Alloy Manufacturing Co., Inc., and to re¬
tire indebtedness and working capital.
Underwriter—

Proceeds—To complete the

Blair &

construction of Station KALI.

—Sinclair Securities Corp.,

•

Co., Inc., New York.

San Diego

Imperial Corp., San Diego, Cailf.

ible

70,000 shares of 5V2% cumulative convert¬

preferred stock.

Price

—

Proceeds—To retire $550,000 of

At par ($10 per share).
promissory notes. Under¬
City, Utah.

writer—J. A. Hogle & Co., Salt Lake

^ Sears, Roebuck & Co.
June 9 filed 25,000 memberships in the

Tennessee

Gas Transmission Co.

(7/2)

1,084,054 shares of common stock (par $5)
to be offered in exchange for common stock of Middle
States Petroleum Corp. at the rate of 45 shares of Ten¬
nessee Gas common for each 100 shares of Middle State*

it is a condition of the exchange offer that it
accepted by holders of not less than two-thirds (1,606,005 shares) of the outstanding 2,409,007 Middle States
common.
Underwriter—Dillon, Read & Co., Inc., New.

common;

be

company's Sav¬

ings and Profit Sharing Pension Fund together with
2,250,000 shares of common stock which may be acquired
by the fund.

e

St., New York, N. Y. Underwriter
New York, N. Y.

June 2 filed

(6/24)
June 2 filed

Office—41 East 42nd

York.

t

,

Continued

on

page

38

38

<2642)

The Commercial and Financial Chionicle

Continued from page

of

37

New

York, N. Y.; Dagget Securities, Inc., Newark,
J.; Bauman Investment Co., New Orleans, La.; and
D. Morris & Co.,

N.

{ Texas Calgary Co., Abilene, Texas
April 30 filed 2,000,000 shares of capital stock (par 25
cents). Price—To be supplied by amendment. Proceeds
—To selling stockholder.
Underwriter—Thomson Ker-

Walter Sondrup & Co. and Thornton
both of Salt Lake City, Utah. "

naghan & Co., Ltd., Toronto, Canada.
Canada only.

Feb.

To be offered in

the basis of

on

one

unit for

(500 of the shares

are

being offered to the President of the company). Price—
$60 per unit. Proceeds—For working capital. Office—
543

Whitehall

St.,

S.

W., Atlanta,

Underwriter—

Ga.

None.

Office—1120

Timeplan Finance Corp.
March 25 (letter of notification) 27,272 shares of 70-cent
cumulative preferred stock (par $5) and 27,272 shares
of common stock (par 10 cents) to be offered in units
of one share to each class of stock. Price—$11 per unit.
Proceeds
For working capital.
Office — 111 E. Main
St., Morristown, Tenn. Underwriter—Valley Securities
Corp., Morristown, Tenn.
—

Oakleigh Drive, East-

York.

Tip Top Oil & Gas Co., Salt Lake City, Utah
April 15 filed 220,000 shares of common stock, of which
200,000 shares

to be publicly offered. Price—$5 per
Proceeds—To drill two new wells and for general

share.

—

Andersen-Randolph

Price—At market.

cent).

Office—Short

Proceeds

Hills, N. J.
Gorp., Denver, Colo.

—

one

For investment.

Underwriter—FIF

Manage¬

Trans-Cuba Oil Co., Havana, Cuba (6/27)
March 28 filed 6,000,000 shares of common stock (par 50
cents) to be offered for subscription by holders of out¬

standing shares of capital stock and holders of bearer
shares, in the ratio of one additional share for each share
held or represented by bearer shares of record May
28, 1958; Tights to expire on Aug. 1, 1958/ Price — 50c
per share.
Proceeds—For general corporate purposes,:
including exploration and drilling expenses and capital
expenditures. Underwriter—None, r
'
so

,

named

by

Portland,

is

Underwriter—Walter

Pres¬

per

share.

Office—203

N.

Price

Proceeds—For drilling for oil and gas.
Main

Street,

Coudersport, Pa.

Under¬

writer—None.
Tuttle

($1

per

May 7 (letter of notification) 58,600 shares of common
(par 10 cents) and $293,000 of 6% five-year con¬
debentures due June 1, 1963 to be offered in

Stock

vertible

units of 100 shares of
tures.

Price—$510

other notes

stock and

common

May

per

unit. Proceeds—To pay bank and

payable and for working capital.

Office—

4251 East Live Oak

Avenue, Arcadia, Calif. Underwriter
—White & Co„ St. Louis, Mo.
4Jnited Employees Insurance Co.
April 16 filed 2,000,000 shares of common

stock

(par $5).
For acquisition oi
personal, including

Price

—
$10 per share. Proceeds
operating properties, real and/or
office furniture, fixtures, equipment and office
space, by
lease .or purchase. Office
Wilmington, Del. Under¬
writer—None.
Myrl L. McKee of Portland, Ore., is
—

—

President.

^

United Funds, Inc., Kansas City, Mo.

June .3 sfiled {by
amendment) an additional $4,000,000
of Periodic Investment Plans Without
Insurance and an

Indeterminate number of underlying shares of United
Accumulative Fund, and $1,200,000 of Periodic Invest¬
ment Plans With Insurance and
of underlying shares of United

indeterminate number
Accumulative Fund,

an

t

United Gas Corp. {6/25)
May 22 filed $40,000,000 of sinking fund debentures due
1978. Proceeds—To prepay a like
principal amount of
4% notes due Sept. 22, 1959 held
by eight commercial
.

banks.

Underwriter—To be determined by
competitive
bidding. Probable bidders: Halsey, Stuart & Co.
Inc.; The
First Boston Corp., Harriman
Ripley & Co. Inc. and
Gcfldman Sachs & Co.
(jointly); White, Weld &

Co.,
Corp.

Morgan Stanley & Co. and Equitable Securities
(jointly). Bids — Expected to be received
up to noon
(EDT) on June 25 at Room 2033, Two Rector St., New
York 6, N. Y.
United Hardware

Distributing Co.
1,475 shares of 5% cumulative preferred
(par $100), and 11,750 shares of common stock
(par $10) to be offered to retail hardware dealers

May

5 Hied

stock

who

6re

stockholders of the
Price—For preferred

company to

equalize holdings

stock, $100

per share; for common
Proceeds—For working capital to
be used to increase
inventory of hardware items. Office
—Minneapolis, Minn. Underwriter—None.

stock, $50

United

per

stock at the rate of

share.

Perlite

Corp., Santa Fe, New Mexico

mining. Underwriter—Watson

&

-Co., Santa Fe, New Mexico.

'

United States Lithium
Corp.

May "5 {letter of notification) 580,000 warrants
bearing
rights to purchase 580,000 shares of common stock
(par
10 cents),' warrants expire Oct.
18, 1960. Price
At
—

market:
Proceeds—For mining
Walker Bank Bldg., Salt Lake

expenses.




Office

504

City, Utah. Underwriters
Co., Inc., both

«-3Peter Morgan & Co. and Greenfield
&

new

($5

share for each

in

three

Underwriter—None.

common

stock.

30

one

of

'

Jefferson,

tures.

Smith, Barney & Co.,
Glore, Forgan & Co., and Hallgarten & Co., all of New

York.

Winter Park Telephone Co.
May 19 (letter of notification) a maximum of
6,619
shares of common stock (par $10) to be offered to em¬

company's

Employees' Stock Plan.
Proceeds—For
extensions, additions and improvements
of telephone plant and for
working capital. Office—132
East New England
Ave., Winter Park, Fla. Underwriter
•

was

&

reported that the company will offer
stock" to stockholders, and then to

*

common

Louisiana

Z

Electric

was

-r

Probable ^bidders:

J
.

Hal- '>

" /

V

„

was

—

!

25 it was announced
company plans to issue and
$45,000,000 of sinking fund debentures. Underwrit¬
ers—To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co.; White, Weld & Co. Z
and Paine, Webber, Jackson & Curtis
(jointly^ Morgan j
Stanley & Co. arid First Boston Corp. (jointly). Offer¬
ing—Expected in 'Juiy.
'

'

Consumers Power Co. /
Feb.

21 Dan E. Karn, President, announced that
$100,600,000 has been budgeted for expansion and improve-

ment

of

service

f

,

facilities

during 1958.. Indications are r
may be involved.
bonds, to be determined by com- Z
petitive bidding. ' Probable bidders: Halsey, Stuart &"
Co. Inc.; Morgan Stanley & Co.; White, Weld & Co. and
Shields & Co. (jointly); The First Boston Corp. and
Harriman Ripley1 & Co. Inc. (jointly). An offering of T
$35,156,700 of 45/s% convertible debentures, offered to
stockholders, was underwritten in October, 1957, by Morgan Stanley & Co. vj*
~
that

$60,000,000' of senior securities

*

Underwriter—For any

★ Deere & Co.

.

.

1

will vote on July 29 on a plan providing
exchange of .the present preferred stock into *
25-year debentures on the basis of $500 of debentures for

k

•

'

the

„

each

14 shares held.

Dixon Chemical
March 10 it

nancing,

'

..

V

■

Prospective Offerings
Co.

March 21 it was announced that the
company plans addi¬
tional financing this
year, in the form of common stock,
preferred stock, or a combination of the
two, including.
bank loans.
Proceed^—For expansion program, work¬
ing capital and inventories. Underwriters—Blyth &
Co.,
Inc. and Merrill

Lynch, Pierce, Fenner & Smith.

,

.

industries, Inc.

reported company plans to do some flthe type of securities to be announced later.
was

Proceeds—For expansion.

Underwriter—Harriman Rip-

ley & Co. Inc., New York

later

to issue and sell additional securities, probably preferred stock, to secure approximately $5,000,000
of additional funds.

Proceeds—Together with $7,000,000
bonds, to repay short-term

private sale of 4V2%

bank loans and for construction program. Underwriters
—May be The First Boston Corp.; Kidder, Peabody &
Co.; Merrill Lynch, Pierce, Fenner & Smith; and White,

Service Co.

.

.

4.

March 24

it was reported that company plans to issue
$11,000,000 of first mortgage bonds later this year. No de¬
cision as yet has been made as to the procedure the com¬
pany will follow.
Proceeds—For repayment of shortterm

.notes

Underwriter

and

loans
If

and

for

determined

construction

.program.

hy competitive bidding,
probable bidders may be Halsey, Stuart & Co. Inc.;
Merrill Lynch, Pierce,
Fenner & Smith, and White,
Weld & Co. (jointly); Blyth & Co., Inc.; The First Boston
Corp.; Lehman Brothers.
—

•

1

\
company expects

in the year

from

,

..

Equitable Gas Co.
April 7 it was reported that the

Gas

Steel

•

Telephone Co.

Weld & Co., all of New York.

Acme

'

"

-

Stockholders

supplied by amendment: Proceeds
—To prepay $7,500,000 of term bank loans
due 1960 and
to retire bank
borrowings, including loans of $5,304,000
for the payment of the
company's first mortgage bonds
which matured on April
1, 1958. Price—To be supplied
by amendment. Underwriters —

the

'

Reported company plans to issue and sell ~
250,000 additional shares of common Stock. Under- Z
Dillon, Read & Co. Inc. and The Ohio Co.
(jointly). Permanent financing not expected until late
in 1958 or possibly early in 1959.

for

$15,000,000 of 20-year sinking fund deben¬

under

R.

William

•

r

39 '

-

Price—To be

ployees

through

^

sell

are

(6/24)

-

Underwriter—

on.

Consolidated. Natural Gas Co.

Wilier Color Television
System, Inc.
April 2 (letter of notification) 72,035 shares of common
stock (par $1) of which
10,000 are to be offered to stock¬
holders at $2 per share and the
remaining 62,035 shares

—

'

Feb.

debentures of record March 24 at rate of five
shares for
each $1,000 of debentures then held.
Price — $60 per
share.
Proceeds—For working capital.
Underwriter—
None.
:

Broadway, New York 6, N. Y.

Water

semi-annual instalments.

writers

in
by four; also
5% subordinated

to be publicly offered at
$3 each. Proceeds — For
general corporate purposes. Office—151 Adell
Avenue,
Yonkers, N. Y. Underwriter
Edwin

-

about

shares divisible

outstanding

»

Columbus & Southern Ohio Electric Co.

holdings

number of

it

Dec. 9 it

Price—At

rate of one new share for each four shares
held and
additional share for the balance of such

June 5 filed

-

Interstate Telephone Co.

Stuart & Co. Inc.: Salomon Bros: & Hutzler.

sey,

Westland Oil Co., Minot, N. Dak.
April 17 filed 7,799 shares of capital stock to be offered
for subscription by stockholders of record
March 24 at

★ Wilson & Co. Inc.

-

White1 Weld & Co.; Kidder, Peabody

Chicago, -Burlington & Quincy RR. 1(7/1)
May 14 it was reported company plan§ to issue and sell
July 1 $4,650,0t)0 of equipment trust certificates due

derwriter—None.

holders

-

on

Mining Co., Inc.

May 26 filed 564,000 shares of

offered

f

,

($1 per share). Proceeds—For capital expenditures
and exploration costs. Office—Santa
Paula, Calif. Un¬

be

*

purposes.

Co., Inc.
announced that the company's financing
program for the-year 1958 anticipates the sale of both
debt and equity securities (probably preferred stock)
aggregating approximately $5,000,000. Both issues may
be placed privately.
; "

per

conversion program.

•—None.

May 27 (letter of notification) 300,000 shares of
common
stock {par TO cents).
Price—$1 per share. Proceed*—
For expenses incidental to

one

27

Central

par

to

Business

St., Stamford, Conn.

Power Co.

issues placed privately
Co., Los Angeles.
•

March 28 it

The record date is to be
supplied by amend¬

of the

Electric

Ludlow

•
•

Underwriter—Blyth & Co., Inc., New York.
Offering—Expected later this yearM,.r , Z
/

share). Proceeds—To be
applied to the payment of $700,000 of short-term bank
loans incurred in carrying forward the
company's con¬

excess

.

the public.

89,391 shares of common stock to be of¬
fered for subscription by holders of
outstanding com¬

and

^

offering has not been decided

additional,

Car.

Western Pacific

Office—391

bidders:

California

filed

struction

:
%

was

Staats &

★ Western Carolina Telephone Co., Weaverville,

$500 of deben¬

sell

issue and

450,000 additional shares of

Previous

—

Price—At par

may

-

complete line of livestock feed supplements minerals
and pre-mixes.
Underwriter
The First Trust Co. of

shares held.

.

company

Laboratories, Inc.

about

of "the

Proceeds—For expansion program and working
capital.
Business—The formulation, manufacture and sale of a

ment.

Engineering, Inc.

(7/10)

announced

President Willard Wade announced June 9 the company
enter the capital market late this
year,'but nature

★

mon

■

/'

will

Walnut Grove Products Co., Inc.
(6/17)
May 26 filed $500,000 of 6% sinking fund debentures,
series A, due 1968. Price — 100% of
principal amount.

6

'/"''/-V

it

★ California

■

share). Proceeds — For
development of oil and gas lands. Office—574 Jefferson
Ave., Rochester 11, N. Y. Underwriter—Frank P. Hunt
& Co., Inc., Rochester, N. Y.

N.

Offering—Expected b^fort

Co.; Merrill Lynch, Pierce, Fenner & Smith; Carl M.
Loeb, Rhoades & Co., and Bear Stearns & Co. (jointly >.

York, Inc.
May 6 (letter of notification) 300,000 shares of capital

June

share for 10 shares owned.

S.

20

Probable

Lincoln, Neb.

new

«

Lehman

and

reported company may issue and sell in
common stock.
Underwriter—To be determined by competitive bidding.

•

one

Co.

Hutzler

1958

Utah Oil Co. of New

the basis of

&

March 10 it

Sondrup & Co., Salt Lake
.,

Trans-Eastern Petroleum Inc.
Feb. 27 {letter of notification) 7,500 shares of common
stock {par $1) to be offered pro-rata to stockholders on

^

&

City, Utah.

At par

Edison
was

'California

(letter of notification) 900,000 shares of com¬
mon stock. Price—At
par (10 cents per share). Proceed*
—For mining expenses. Office—305 Main
St., Park City,

—

Salomon Bros.

working capital and other corporate

April 11

Price

—

—Electronics.

amendment.

Ore.,

.

was reported
that company plans to issue
and sell about $500,000 of common stock. Proceeds—For

"v/:;

stock.

«

be

of

G.

March

Utah Minerals Co.

Utah.

Townsend International Growth Fund, Inc.
May 14 filed 1,000,000 shares of capital stock (par

Griswold

ident.

are

corporate purposes. Underwriter
& "Co., Inc., Salt Lake City, Utah.

Underwriter—To

ft

*

Registration—Scheduled for June 20.

C.

and the balance for other corporate
Underwriter—None.

Albert

4

„

250,000 shares of cumulative preferred stock (par $100)<
Proceeds. —: To repay bank loans and for construction
program.
Underwriter — The First Boston Corp., New

Uranium Corp. of America, Portland, Ore.
April 30,1957 filed 1,250,000 shares of common stock(par
16 cents).
Price—To be supplied by amendment (ex¬
pected to be $1 per share). Proceeds—For exploration

Graham

•

,

.

Boston

Underwriter—None.

purposes.

'

1.

May 27 it

of properties,

purposes.

/

Investment Co.
reported company plans to issue and sell

Brothers, both of New York.

★ Universal Oil Recovery Corp., Chicago, III.
37,500 shares of class A common stock. Price
—$4 per share. Proceeds—For exploration and develop¬
ment

^

additional debentures (amount not yet determined)

some

Underwriters

July

Druggists, Inc.
May 27 (letter of notification) 5,000 shares of preferred
stock. Price—At par ($25 per share). Proceeds—To
pur¬
point, Ga.

'

was

-

Wholesale

chase merchandise.

23 it

:

Underwriter—

Amos Treat &
United

'

.l

Associates
Jan.

June 4 filed

'

ment

Office—Salt Lake City, Utah.
Co., Inc., of New York. '

•

(par $1;

per

purposes.

is consider¬

ing plans for. longrterm refinancing. Proceeds—For pay¬
ment of all notes payable and provide the company with
additional working capital.
r
;

'

share. Proceeds—To purchase equipment
and supplies and for working capital and other
corporau

Thomas Paint Products Co.

each -two shares of stock owned

United States Telemail Service, Inc.
17 filed 375,000 shares of common stock

Inc.>

March 6 it. was announced that the company

-

Price—$4

May 26 (letter of notification) 1,250 shares of common
stock (par $10) and $37,500 of 6% serial subordinated
debentures series 1958, to be offered in units of one
share of stock and $50 principal amount of debentures
to be offered to stockholders

Alco Products

Thursday, June 12, 1958

;

,

;
•

Volume

187

Number 5750

.

• General
Acceptance Corp.
T.May 21-stockholders authorized 1,000,000 shares of pre-'.
ferred stock"(nonpar);' of which 80,000 shares are to be

60-cent series...

.....

General Public

April

7

approved

directors in connection with

* MacMillan & Bloedel, Ltd.
a special meeting June 17

Stockholders will vote at

a

to

Jan. 27

■

Pacific

Lighting Corp.
May 8 Robert W. Miller, Chairman of the Board, an¬
nounced that it is likely the corporation will sell some

years.

Fund, Inc., Fairfield, Calif.

it

newly organized invest¬
plans to offer to bona fide residents of

ment

com¬

of capital stock (par $1). Price
—$10 per share, less an underwriting discount of 8^»%

panies.

Clearing- Agent—Merrill Lynch, Pierce, Fenner
& Smith, New York. ;
;
\

within

the

next

months

several

(proh^

ably to stockholders). Proceeds—For new facilities and
equipment Underwriter—Blyth & Co., Inc., San Fran-*

California 10,000 shares

company

stock

common

announced this

was

same

stockholders, also to offer certain shares on the
terms, to employees, including
officers, of System

38

ding. Probable bidders—The First Boston Corp. ani
Halsey,Stuart & Co. Inc. (jointly); Blyth & Co., Inc.; (2)
For preferred stock; Blyth & Co., Inc.

on a

proposed issue of $32,500,000 of sinking fund debentures
of which $10,000;000 would be sold in the United States,

Master

plan authorizing the
offering of common stock

an

(2643)

bearing 4%% interest and due in 20

Utilities Corp.

stockholders

Chronicle

The Commercial and Financial

.

.

Cisco and New York.

Proceeds—For investment/

Pacific

Telephone & Telegraph Co.

'

.March 20 it

dent,

that

.$21,000,000 of

March

announced

was

the

company -

by Lewis A. Lapham, Presi
plans to issue approximate^
insured

government

bonds

secured

—

Grand

Union

convertible

into

common

stock

issue

of

in

&

Webster

ders—

Utilities Co.

&

Inc.; The First Boston Corp.; Kuhn, Loeb & Co.
Brothers (jointly). Bids—Expected to be
received up to 11 a.m. (EDT) on Aug. 20.

both

and

New York.

sell

Power Co.

April 7 it Was announced by the company that it plans
to sell some additional bonds during the latter part of
the >ear.

(9/4)

used

reported that the company plans to issue

$20,000,000 of first mortgage bonds

due

plans to sell

.pany

1988.

some

President, said that com$7,000,000 in new securities by

bidders:' Halsey, Stuart & Co. Inc.; Lehman
Brothers; Merrill Lynch, Pierce, Fenner & Smith, and
Stone & Webster Securities Corp. (jointly); White, Weld
& Co.; Eastman Dillon, Union Securities & Co.; Kidder
Peabody & Co., Smith, Barney & Co. and Blyth & Co.,
Inc. (jointly). Bids—Expected to be received on Sept. 4.
Moore-McCormack
March 24 it

.

plans to register

com-

derwritcrs—Blyth & Co., Inc.; Lehman Brothers; Allen*
& Co.; and Scharff & Jones, Inc."
£ *
V'-'

:

Indiana Gas & Water Co., Inc.

;

March, 2& it

was

issue and sell

.

announced

for

new

J:

*.

Lines, Inc.

r

^

19 it

Parker

was

a

&

Washington, D.

Redpath,

like amount of 41/2%

bonds due 1961.

Underwriter—To

bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; The First Boston Corp.; Mor¬
gan Stanley & Co. Bids — Expected to be received on
Aug. 26.
New

'
York

March 7 it

State

Electric and

announced that

was

from additional financing

will be required for construc¬

tion

this

Light Co.

1

14 it was announced company plans to issue and
$10,000,000 of first mortgage bonds due 1988. Proconstruction program.
Underwriter—To be
determined by competitive bidding.
Probable bidders
Halsey, Stuart & Co. Inc.; The First Boston Corp.; Glore
Forgan & Co.; Harriman Ripley & Co; Inc.; White, Weld

Co.; Blyth & Co., Inc.; Equitable Securities Corp.

loans and

for

new

construction.

-

Underwriter—To

by competitive bidding. Probable bidders
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.; Lee Higginson
Corp.; Equitable Securities Corp.; Eastman Dillon
Union Securities & Co. and Merrill Lynch, Pierce, Fenner
& Smith (jointly); Kidder, Peabody & Co. and
White,
Weld & Co. (jointly); Kuhn, Loeb & Co. Offering—Ex¬
pected in September or October/
Jan.

21

it

was

also

reported

that

company

-

stock

to

its

common

stockholders

on

a

offer

may

approximately 165,000 additional shares of its

-

common

l-for-15

basis.

Underwriters—Blyth & Co., Inc. and J. J. B. Hilliard &
Son.
•

Laclede Gas Co.

May 15 it
sell

$25).
tion
_

was

(7/7)

announced

plans to issue and
preferred stock (par

company

320,000 shares of cumulative
Proceeds—To retire bank loans and for
program.

Merrill .Lynch,

Underwriters

—

-

•

construc¬

Brothers

both

of

and

New

;

Laclede Gas Co.

May 15, it

Lehman

Pierce,. Fenner & Smith,

York.
1

was

(7/8)

•

New

York Telephone

Underwriter—To be determined by competitive bidding.

; Probable bidders: Halsey, Stuart & Co. Inc.; The First
; Boston Corp.; Blyth & Co., Inc.; Lehman Brothers, Mer-

sell

1,300,000 shares of common stock, par $100 (the latter
American Telephone & Telegraph Co. on or about
Dec. 31, 1958. Proceeds—To retire short-term bank bor¬
rowings. Underwriter—To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
to

Stanley &

Morgan
on

or

Norfolk
Bids

Bids—Expected to be received

Co.

about July 9.
&

Western

Ry.

•

Northern

by the company

on

June

10

it

Salomon Bros. & Hutzler.

Illinois Gas Co.

was

announced company will sell this

Sep¬

tember $20,000,000 mortgage bonds providing new gas
supply from Northern Natural Gas Co. is approved by
Federal Power Commission. In event this project has to

will likely issue $10,000,000 bonds
year.
Company's 5-year construction pro¬
gram calls for $90,000,000 outlay.
Underwriter—To be
determined by competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; First Boston Corp.; Glore,
Forgan & Co.; Blyth & Co., Inc.
be

deferred,

later

in

company

the

Public Service Co.

reported that the company is considering
an offer of additional common stock to stockholders on
the basis of one new share for each 10 shares held on
June 3 it

or

was

about June 9;

A. C.

rights to expire June 24. Underwriter—
Allyn & Co., Inc., Chicago, 111.

Pacific Gas & Electric Co.
March

undetermined

Lynch, Pierce, Fenner & Smith and Reinholdt &
(jointly); Eastman Dillon, Union Securities &
Co.: Stone & Webster Securities Corp. Bids—Tentative¬
up

May

21

voted on

to 11 a.m. (EDT)

on

July 8.

20

it

was

reported

amount

the latter part of

and

loans

for

construction

program.

■

Tampa Electric Co. (7/1/)
May 14 it was reported company plans to issue and sell
$17,000,000 of first mortgage bonds. Proceeds—For con-i
struction program.
Underwriter—To be determined by
competitive bidding. Probable bidders: Halsey, Stuar^
& Co. Inc.; Stone & Webster Securities Corp.; Kuhn,
Loeb & Co.; Merrill Lynch, Pierce, Fenner & Smith;
Goldman, Sachs & Co. Bids—Expected to be received on
/

Union Electric Co.,

March

28

it

was

company

plans

sale of an

of bonds and preferred stock

in

this year or early 1959. Underwriter
—(1) For bonds to be determined by competitive bid¬

,

St. Louis, Mo.

announced

company

plans to market

$30,000,000 of common stock in the latter part of
this year or in the first quarter of 1959. Proceeds—For

about

construction program.

* United Artists Corp.
June

5

it

was

announced that the company is planning

public offering of additional securities before the mid-r
of

York.

July. Underwriter — F. Eberstadt & Co.,
Registration—Expected to be filed shortly.

New
"*//

Washington Gas Light Co.
A.
May 26 it was announced company plans to issue and
sell about 300,000 shares of new preferred stock (no

Proceeds—For construction program. Underwrit¬
Johnston, Lemon & Co., Alex. Brown & Sons>
Auchincloss, Parker & Redpath and Folger, Nolan Inc.
par).

ers—

Offering—May be early in Summer.
March 17 it

(7/16)

July 16 for the purchase from it of $2,340,000 of series
equipment trust certificates. Probable bidders: Halsey,
Stuart & Co. Inc.;

bank

Wisconsin

expected to be received

are

Gardner




(7/9)

Co.

$65,000,000 of refunding mortgage bonds, together with

rill

ly expected to be received

on

by competi¬
Probable bidders: Halsey, Stuart & Co. Inc.;
Smith, Barney & Co., Glore, Forgan & Co. and Blair
& Co. Inc. (jointly); White, Weld & Co.; Equitable Secu¬
rities Corp. Last preferred financing was done privately.

die

announced company plans to issue and

was

Northwestern

,

:

stockholders

tive bidding.

a

Corp., New York.

-

annouunced company

plans to issue and
; sell $10,000,000 of first mortgage bonds due 1983. Proceeds—To refund 4%.% first mortgage bonds due 1982.
i

The First Boston

D

Kentucky Utilities Co.
•

of banks and expects to sell equity securities later
or in early 1959, depending upon prevailing
market conditions. Underwriter—For any common stock:
year

June 4 it

Kentucky Utilities Co.
Jan. 21 it was reported company plans to issue and sell
$10,000,000 of first mortgage bonds. Proceeds—To repay
bank

The

increase in bonded indebtedness of

an

July 17.

Gas Co.

approximately $7,500,000

group

&

$6,500,000 in bonds or preferred stock "sometime

summer."

authorizing

C.

Feb.

Power

be determined

a

this

New

expenditures for the balance of this year. The man¬
agement intends to negotiate a new line of credit with a

&

*

market

announced by this corporation that it

ceeds—For

.

April

Underwriter—For bonds to be determined

sell

.

„

Joseph Light & Power Co.
'J
15 it was announced that the company plans to

St.

;

be determined by competitive

program.

Eastman Dillon, Union Securities & Co. and
Stone & Webster Securities Corp. (jointly); Glore, Forgan & Co., and Goldman Sachs & Co. (jointly).

:

—

plans to issue and sell 120,000 shares common stock (par
$1).' Price — $5 per share. .Underwriter — Auchincloss,

Brothers;

:

by competitive bidding. Probable bid¬
Halsey, Stuart & Co. Inc.; The First Boston Corp.;
Blyth & Co., Inc., and Kidder, Peabody & Co. (jointly).
Bids
Tentatively scheduled for July 10 at 90 Broad
St., New York, N. Y.
determined

ders:

England Telephone & Telegraph Co. (8/26)
April 11 it was announced company plans to issue and
sell $40,000,000 of debentures.
Proceeds—To redeem a

Kansas

$30,000,000

short-term

Corp.

Chairman, announced that company plans to sell some bonds originally scheduled for
mid-year, but which sale may now be deferred until
late 1958 or early 1959. Proceeds—About $8,000,000 foi
Underwriter—To be determined
by
competitive
bidding.
Probable
bidders:
Halsey,
Stuart & Co. Inc.; Kidder, Peabody & Co., and Merrill
Lynch, Pierce,
Fenner & Smith ' (jointly); Lehman

,

(7/10)

500,000, and an increase in preferred stock from 25.000
shares to 50,000 shares. Proceeds — For repayment of

construction

.

Co.

of National common for 2.4 shares of American Encaustic

March

March 31; G. W. Evans,

/

be

I Of latter company, offer calls for exchange of 1 share

Naxon Telesign

Kansas Gas & Electric Co.

i

and

Gas

of sinking fund debentures due 1978.
Proceeds—For construction program.
Underwriter—To

Gypsum Co.
Company plans to register additional common stock in
connection with proposed acquisition of American En¬
caustic Tiling Co. Subject to approval by stockholders

Company plans to

$3,000,000 of first mortgage bonds. May
repay bank loans and

construction..:

,//

Natural

common.

■

thev

that

be placed privately. Proceeds—To

;

sell

National

June 2 company announced that it

,,

19 it was announced company plans to issue

Southern

May

plans to issue and
$24,000,000 of government insured bonds secured by
a first preferred ship mortgage on the liners S. S. Brazil
and S. S. Argentina.' Underwriters—Kuhn, Loeb & Co.
and Lehman Brothers, both of New York. Offering—Ex¬
pected this Summer.

mon stock and debentures to be issued in connection
with acquisition of the Coastal Transmission Corp.Un-.

an

(par $50). Underwriters—Stone & Webster Secu¬
rities Corp. and Paine, Webber, Jackson & Curtis.
\

announced company

was

Power Co.

reported stockholders will vote May 9
additional 100,000 shares of preferred

was

stock

sell

• Houston Corp.
;

April 21 it
on
creating

Probable

privately. In event of competitive bidding for bonds oi
debentures, bidders may include: Halsey, Stuart & Co
Inc.; The First Boston Corp. and White, Weld & Co
(jointly); Stone & Webster Securities Corp.; Blyth &
Co., Inc.; Drexel & Co. and Dean Witter & Co. (jointly)
The First Boston Corp. and White, Weld & Co;
(jointly)
underwrote last common stock financing.
There is no
preferred stock presently outstanding. Private sale of
30,000 shares ($3,000,000) of preferred is planned.

Proceeds — Together with bank loans, to be
$16,000,000 construction program. Bonds may
privately through Kidder, Peabody & Co.
' • <

Southern Colorado

—
For exploration and construction program.
Underwriter—To be determined by competitive bidding.

the end of this year in the form of first mortgage bonds
and preferred stock.
Recent bond financing was made

for

be placed

Proceeds

Hackensack Water Co.
March 12, George H. Buck,

Lehman

South Carolina Electric & Gas Co.

Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.;
Lynch, Pierce, Fenner & Smith and Kidder,
Peabody & Co., Inc., (jointly); and Blair & Co., Inc.
was

(8/20)

Co.

and

Merrill

Montana

Underwriter*—
Probable bid¬
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.
($137,000,000 in 1958),

Public Service Electric & Gas Co.

bidders:

until

1959

May 26 it was announced that the company plans
early registration of $60,000,000 of first refunding mort¬
gage bonds due 1988.
Underwriter—To be determined
by competitive bidding. Probable bidders: Halsey, Stuart

Securities

reported the company plans to issue and

was

1958 and

To be determined by competitive bidding.

first

undetermined amount of first mortgage bonds in

an

May 12 it

of

subsidiary
to

Corp. and White Weld & Co., both of New York.

July 15, 1968. Proceeds—To reimburse company treas¬
ury for cost of 48 stores acquired June 2, 1948. ' Underwriters—Morgan Stanley & Co. and W. E. Hutton & Co.,

<

permission

the latter part of this year or in early 1959. Underwriter
—To be determined by competitive bidding.
Probable

holders in the ratio of $100 debentures for each 23 shares
of stock held on July 1. Rights to expire on
July 21. Debe

for

Underwriters —Stone

000,000.

Montana-Dakota

"

to

this

mortgage bonds, unsecured notes and common stock.
Proceeds—To build pipe line system to cost about $111,-

sell

to register an issue of $10,450,000 subordinated
debentures, due 1978, to be offered to common share-

bentures

that

announced

was

Commission

March 24 it

Co.

Plans

■

Power

eral

Eberstadt & Co.. all of New York.

.

it

24

Tennessee Gas Transmission Co. has applied to the Fed¬

by a
first preferred ship
mortgage on the new "Santa Rosa'
and
"Santa
Paula."
Underwriters
Merrill Lynch
Pierce, Fenner and Smith; Paine, Webber, Jackson & *
Curtis; Smith, Barney Co.; White, Weld & Co.; and F

;

Jan. 8 it was reported company plans $300,600,000 capi¬
tal outlay program. Proceeds—For construction program

Midwestern Gas Transmission Co.

!;Grace Line Inc.

Power

was

&

<

Light Co.

announced that company plans to issue

$10,000,000 of first mortgage bonds. Proceeds—
To retire bank loans and for construction program. Un¬
derwriter — To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.; Smith,
and sell

Barney & Co. and Robert W. Baird & Co.,
Equitable Securities Corp. and Eastman

Inc. (jointly);
Dillon, Union
Securities & Co. (jointly); White, Weld & Co., Kidder,
Peabody & Co. and Salomon Bros. & Hutzler (jointly);
The First Boston Corp.
Offering—Not expected until
late

in

1958 or early in

Wisconsin

March 4 it

1959.

Public Service Corp.

was

announced company plans to sell about

$12,500,000 of new securities in the last half of the cur¬
rent year.
The type of securities has not yet been
decided on.
Underwriter—To be determined by com¬

petitive bidding. Probable bidders: (1) For any bonds—
Halsey, Stuart & Co. Inc.; White Weld & Co.; The First
Boston Corp.; Kidder, Peabody & Co.; Merrill Lynch,
Pierce, Fenner & Smith; Eastman Dillon, Union Secu¬
rities & Co. and Salomon Bros. & Hutzler (jointly);
Kuhn, Loeb & Co., and American Securities Corp*
(jointly). (2) For any preferred stock—Merrill Lynch,
Pierce, Fenner & Smith; Salomon Bros. & Hutzler and
Eastman Dillon, Union Securities & Co., (jointly); Leh¬
man Brothers; Kuhn, Loeb & Co. and A. C. Allyn & Co.
Inc. (jointly); The First Boston Corp.; White, Weld di
Co.; Kidder, Peabody & Co.
• *.
— -

40

(2644)

The Commercial and Financial Chronicle

With Nolting, Nichol
(Special to Tm. Financial Chronicle)

,t

*

,

Over

By ROBERT R. RICH

A MUTUAL

INVESTMENT

Variable Annuity

FUND

The

New

proved

a

permitting the

measures

issuance

variable

of

insurance

policies in the state under regula¬
tion of the New Jersey Depart¬
ment of Banking and Insurance.
.

These

measures

will go

now

to

the Senate lor approval.
The

WRITE FOR

act

to

this type of legislation for

FREE INFORMATION

upon

FOLDER AND PROSPECTUS TO
YOUR INVESTMENT DEALER OR

the past three previous years.

Established 1930

120

Broadway, New York 5, N. Y.

:

.fi../-'

tnterested

Assemblyman LeRoy J. D'Aleia
(Dem.), Essex County and Paul
M.
Saulsberg,
(Rep.),
Atlantic
County were the sponsors of the
three
measures • under
debate,

in Chi¬

the discussions

variable
slow start

on

annuities

got

since

industry member
appearance prior to the

only

put in an

off to

a

one

sub-committee's executive session.
The

We will be

glad to send

you a

free

prospectus describing Atomic

Development Mutual Fund, Inc. This
fund has

more

than 75

holdings of

stocks selected from among those
of

companies active in the atomic
objective of possible
growth in principal and income.

field with the

'Atomic

Development Securities Co., Inc. Dept C
1033 THIRTIETH STREET, N. W.
WASHINGTON 7, D. C.

Stock

Fund

two

hearing

principal

bogged
points

down

on

of

issue,
whether variable annuity should
be a special regulatory problem
and whether this type of annuity
is really insurance in the accepted
term. In regard to the latter point
it was generally agreed that the
U.

S.

Supreme Court would have

to render

decision.

a

A,t this time there

three life

are

insurance

companies which are
variable
annuities.
The

selling
Variable

Annuity Life Insurance
Company of America, Inc., the
Equity Annuity Life Insurance
Co., and the Participating Life
Insurance Company. Variable and
Equity have their home offices in
Washington, D. C., and Participat¬
ing Life is located in Arkansas.

of

far

there

has

been

determination

un¬

the

on

part of the U. S. Congress to leave
the insurance business in the con¬
trol

of

the

States.

The

income

additional

of National Securities & Research

and

sponsors

This

total

established

the

on

almost

third of National's
of record

owners

Commenting

the

in¬

an

date last

same

includes

and

year

represents

of 12,802 over the number

crease

one-

158,205 shareof

as

April 30.

these

on

figures,

Chemical, 2,000

Putnam Growth

is

The

ports

Up 10%

Putnam
an

Growth

increase of

Fund

re¬

10%

over

quarter

come

value

in

National's monthly investment
plan is of the voluntary type with

initial minimum investment of

an

$40 and subsequent minimum in¬

rose

on

Nov.

6

Fund

S-3

reached

highs

new

net asset

of

the

12-month

period,

2,620,594. Net new capital in¬
jumped to $12,745,650 as

vested

Net

1,300

to

$179,000 and was
supplied principally by the Trus¬

Management Company.
During the quarter the Fund in¬

resented

72%

According to the proposed plan, investment,

investors

of

value

asset

common

of

the

Fund's

total

with

49%

compared

would

the

value
to

was

creased its investment in

plan

incorporated mutual fund pro¬
viding diversified, managed investment in
Canada. For free prospectus mail this ad to

| CALVIN

BULLOCK

Established 1894
ONE WALL STREET, NEW YORK 5

to

$3

been

ing
The

Addre*s~




was

abandoned

after

a

—

and

the

planholders

had

given the option of accept¬
non-insurance arrangement.

rate

is

now

$5 for those few

still carrying the old insurance.
It

Mam*

which

insurance rates had risen from
$1

is

surance

tain,

or

expected

that

requirements
even

rate for the

stricter
will

in¬

main¬

reduce, the starting

new

plan.

ously,
but
tomorrow's
growth
portfolio should also include a

discriminating choice of
less well-known
The ten largest

was

first

has

half

net

year,

increased

asset

another

5%

$11.

holdings of the Fund
included

on

younger,
stock¬

April 30, the S-3 portfolio

consisted

of

industries.

48

Oil

securities

in

15

holdings, boosted

by the addition of 25,000 shares of
Shell Transport and increases in
holdings of Halliburton Oil Well
Cementing and Skelly Oil, con¬
stituted

12.8% of the portfolio.
Chemicals and office and business

equipment

also

were

while drugs, machinery
were
shaved.

craft.

&

Co., Diners' Club, Inc., General
Corp., Peoples Water &
Gas Co., Dominion Stores, Ltd.,
Royal
Dutch
Petroleum
Co.,

ton, Inc.

Eliminations

Smith

Inc.,

and

will

one

-v

;;

of the best

Wall

Street

invest¬

A reader of recent dated finan¬
cial pages, for example, would have
noticed that Lazard, among other

things, will be
managing
ties

of three firms

one

syndicate offering in¬
$40,000,000 in the securi¬

vestors
of

a

the High

European

Coal

Authority of the
&

Steel

Commu¬

of two firms heading a
syndicate which offered $50,000,one

Owens-Illinois

bentures

heading

and

Glass
of

one

syndicate

a

Co.

two

which

keted
$20,500,000 Tulsa
Okla., airport bonds.

de¬

firms
mar¬

County,

Just over a year ago, a Wall
Street syndicate headed jointly
by

Kuhn, Loeb &
Corp.

Co., First Boston
Lazard Freres & Co.

and

underwrote

Shul-

$35,000,000

Steel

Last
of

fall, Lazard

Paris

china
tors

and

the

marketed

Freres

Bank

of

to French

&

Co.

Indo¬

inves¬

$40,000,000 in the common
Repfrance — Compagnie

stock of

Francaise

Pour

le Financemte

Recherche

et

developments

in

France

de

de

l'Explotation
due Petrole—a recently organized
holding company to finance oil
oil

new

strikes

and

in the Sahara

the
re¬

gion.
It
cial

was

one

of the largest finan¬

transactions

of

its

kind

in

increased,
and steel

were

an

underwriting was
.instantaneous
success.
Rep¬

france has

an

interest in

Eurafrep,
by
Lazard
Freres, the Bank of Indochina and
a

company

started

the Campaignie Francaise du Sa¬
hara to participate with French
and American
interests in joint
petroleum projects in various parts
of the world.

a

The Repfrance offering itself was
sensation in Paris, with crowds

of

1,000 persons waiting outside
the offices of Lazard and the Bank
of Indochina in Paris alone when

Cerro de

(A.

O.);

Schering,

and

Wheeling Steel Corp.
April 30/58

April 30/57

Total Net Assets^.

t$27,366,764 $20,301,177
Outstanding.
2,620,594
1,471,455

Shs.
No.

of Sharehldrs.

Asset

America

Society,

from 7,/fe to 0.89%-.

Pasco; Clark Equipment; Garrett;

May 31

American

Photocopy,
Phillips' Gloeilamp, N. V., Merck

Grolier

shares.

France and the

As of

companies."
common

100

charges

firm, with headquarters in
town at 44 Wall Street, has been
a
prominent participant in inter¬
national financial dealings
carry¬
ing widespread significance.

la

share
$10.13

per

make
regular on Feb. 28. In commenting on the
Portfolio changes included the
monthly purchases of Axe- Fund's current investment policy,
addition of Haloid
Xerox; Houston
Houghton Stock Fund shares for a Mr.
Werly
said,
"We
believe
Natural Gas; KLM Royal Dutch
period of 10 years with the insur¬ strongly that the best capital
gain
ance
guaranteeing immediate com¬ opportunities in the years ahead Airlines; Kelsey-Hayes; Litton In¬
pletion of a planholder's payments will not necessarily be in the
dustries; Pennsalt Chemicals; Ray¬
in the event of his death.
leading growth issues of the past.
mond International; Shell Trans¬
Certain of the old leaders will
The new plan would
replace an
port & Trading, and United Air¬
earlier
Axe-Houghton Stock Fund continue to move forward vigor¬

-A U. S.

which is

Lazard Freres is

,

000

share.

from

of

commission

known investment banking houses
in the United States today?!. The

nity;

per

stocks, while continuing its policy
vestment plan which contemplates
of
investing in a compact list,
insurance protection up to
$30,000 Charles M.
Werly, Trustee, said.
at the rate oil 75 cents a thousand
On May 31, common stocks rep¬
a
month.

The

ment

ended

of 5 cents per

Further shares will be of¬

publicly at prices ranging
from $15 to $14 a share, depend¬
ing on the amount purchased, the

blue-ribbon

share during compared with $4,087,710 in the
Total net
May 31, from preceding 12 months.
$10.28 to $11.32, after payment of assets rose approximately 34% to
a
dividend from investment in¬ $27,366,764.
asset

the

now

completing details of a new
monjthly-payment mutual fund in¬

shares.
fered

an
offering here of
European
Coal
and
Community bonds. It was
number of Keystone S-3 share¬
.the first public marketing of the
holders
more
than
doubled
to
securities
in
this
18,708 and number of outstanding Community's
shares increased 78% to a total country.

Fund Asset
Value

5

<

they are
associated with have already in¬
dicated they will invest somewhat
over
$35,000,000 in the new mu¬
tual fund by buying some 2,500,000

overall financial planning."

During

tees and members of The Putnam

Corporation

occurs.

plans, along
accounts, un¬
derlines the important role
many
long
range
investors haveN.assigned to mutual funds in their

in
value, number of share¬
Deere & Co., 2,000 International
holders, and number of shares in
Harvester, 3,000 U. S. Plywood, the last 12
months, President S. L.
and 300 Westir.\~house Air Brake.
Sholley points out in his semi¬
annual report for the period ended
April 30.
Agricultural

can

than
2,000.
The
original
starting investment of the Fund

Securities

it

The partners and those

Cites Record Gains

more

Axe

and

reinvestment

were

shareholders

Life I its nr. Plan

mindful of changing condi¬
secure capital appreciation
growth, while taking income

ways

tions to

range

investment

undertaking—-the

new

a

investment of the fund's assets, al¬

Keystone S-3 Fund

variable

mtempla les

clients in

monthly

with

Total net assets of the Fund in¬ $10.44
compared with
six
type of insurance can be and is creased
more
than
50%
from months earlier. The volatility of
being sold in Arkansas, District of
$2,360,000 on Feb. 28 to over the market is indicated by the fact
Columbia, North Dakota and West
$3,550,000, and the number
of that in the month since the end
Virginia.

Axe C<

jointly with that of the part¬
of Lazard Freres & Co., their
close
associates^; and

minimum

of selected

creased positions were 500 Ameri¬

month,

families,

Mr. Hare remarked, "We feel the
substantial gain registered in new

vestments of $25. The shareownthe common stocks ers are under no obligation to con¬
Utility, Food and Re¬ tinue the plan and may stop or
tail Trade companies.
Added to postpone
monthly
investments
existing positions were 1,000 Con¬ without any penalty being in¬
tinental
Baking, 2,000 Marshall curred.
Field, 2,000 May Dept. Stores,
2,000 Northern Natural Gas, 1,000
Public
Service
Electric
&
Gas,
1,000 Southern Natural Gas, 1,000
Union Electric, 1,200 United Bis¬
cuit, and 3,000 West Pcnn Electric.
Other purchases reflecting in¬
Keystone Growth Common Stock
chases

tal

man¬

agers of the funds.

ings of 1,000 General Electric. All
other purchases result from new
money
received
from
investor
purchases of the Fund's shares.
A 6,000-share purchase of Wool-

this

ners

as

Corporation,

only sales from portfolio were
the elimination of 1,700 Sherwin-

represented

quarterly

into

of

beginning of a new investment
company—The Lazard Fund-^-will
create an opportunity" for inves¬
tors at large to commit their capi¬

re¬

by E. Wain Hare, Vice-President

The

worth

of

the

or

shares according to April 30, 1953
fiscal year-end figures released

Securities,
Inc.,
in
the
just ended was a substan¬
buyer of equity investments.

net

Thus

mistakable

investment

month

tial

Securities

investments

distributions

Group

only new
position taken during the month.
The Fund increased its holdings
Measure (A. 330) permits the issu¬ in Banking & Finance through the
ance
of variable
insurance con¬ purchase of 500 Chase Manhattan,
200 Chemical Corn, 900 C. I. T.,
tracts; measure (A. 331) regulates
the
reserves
which * must
be 2,000 Commercial Credit, 500 First
National City, 1,000 Hanover, and
carried by insurance companies;
and
(A.
332)
stipulates
the 1,000 Manufacturers Trust. In the
regulation of this type of policy Rails, 3,000 Chesapeake & Ohio,
Norfolk &
Western,
and
by the banking
and insurance 2,000
2,000 Union Pacific were added to
commissioner.
existing positions.
At the National Association of
Also favored among May pur¬
Insurance Commissioners
cago,

ATOMIC

Common

National

mutual, funds * have open
accounts
providing
for
either
monthly

end

the

Series

Williams and the balance of hold¬

refused

has

Senate

The

50,000

of

owners

Group's Common |;
Stock Fund
Heavy
Buyer During May

Jersey Assembly ap¬
vote of 31 to 12 a

by

series of

RESEARCH CORPORATION

Lazard Fund
the

Toward

A record high of 50,145 share-

,

Progress of tlie

NATIONAL SECURITIES ft

Coming

*,. ' 4

Open Accounts

■Garden Building.

Stock Stiieik

Thursday, June 12, 1958

.

National Securities The

*v

PENSACOLA, Fla.—Thomas E.
Young has become affiliated with
Holting, Nichol & Company, West

si®

.

.

18,708

Income
(6
,

Per

8,766

t$10.44

Value

$13.80

$0.16

$0.16

Per

Share
Share

months)

tDoes not include capital gains distribu¬

tion

1957,

of
■

98

cents

totalling

per

share

$1,786,041.

paid

Oct.

15,

roapectua from your dealer or

Selected Investments Ce.

-.

135 S. La Salle St., Chicago 3, 111.

Volume

the

Number 5750

187

doors

.

.

for

opened

were

.

The Commercial and Financial Chronicle

busi¬

Early

Lazard Freres
international subsidiary of
this

and

an

the

Chase

dis¬

Bank

they

investment

warding to

And,
to

two

over

years ago,

di

Banco

nanziario, known
which

interest

substantial

a

Italian

in

Credito

Fi-

"Mediobanca,"
organized as an
banking
house
by

itself

as

was

investment

growth of the mu¬
tual fund industry from $1,300,000,000 in assets in 1946 to $9,-

786,000,000 today has been one of
the remarkable financial phenom¬
enon of the postwar
years, so the
entry by Wall Street's old-line in¬
vestment banking houses into the
mutual

'field

fund

of

one

the

viewed

is

as

most

velopments

significant de¬
far this year in

so

ed

of

custom

Brothers

requirements

companies

in

tion of

through

the

reten-

portion of their earnings
a growth fac¬
their equities."
a

in itself tends to add

tor to

Freres

in

founded

was

July 1848 in New Orleans by three

brothers—Alexander, Lazare, and
Simon Lazard
as
a
dry-goods
business after they arrived in the
United States from,

a

small town

'

in Alsace.

mutual

handles all public transit

lock,

Ltd.,

and

Authority,
delivering

tern,

it

e s

In

realized
was

1

tal

their

more

and

Grayson Kirk

field

of

<

international
career

prcsidency

relations,
began in

Columbia

,0f

important

business, de-

state

in

Department in the Political

Studies Division.

In

1944

he

institution

an

of tax

exempt
reasonable portion of
such a portfolio could be invested
in these bonds for purposes of ima.

proving yield.

debt

j

do

.

.

not

classify the bonds as
being; conservative enough for

since

listed

are

on

$15,230,000.- Exchange,

serial bonds

are

ma-

Over

the

-

the American Stock

the

major

Counter

-

trading

in

the

is

same

tunng 1958 to 1972 and equipment

A specialist in the

academic

the

aver-

or

broad list

a

securities,

deprecia-

retirement
been

Corp. and of
Socony-Mobil

holds

rec-

before

bonded debt

While there

1953, Dr. Kirk is considered an aumembers thority in the field of government,
banking business From 1942-43 he served with the

the mercantile

sys-

shows an
maximum

of

1.87

Business

firm's

destined to be

than

efficient

individual

an

AA(?0r ^
^ must Trust Funds and persons
$132,687,000 on Dec. 31, needing an unusual
degree
of
is now
$119,770,000. To- safety. While the 3%s due 7-1-78

,

of Internation-

Northwest.

the

at

•

1953

—

1876,

(1948-1957)

leached

director

a

ity are typical' "business man's
law risk" type of investment,;'Where

by

This 10-year rec-

coverage

service

Dr. Kirk also
;

In my opinion,
the revenue
bonds of Chicago Transit, Author-

transporta-

dent.

is

ii\ Chi-

operations

an

age

i-

m

the Pacific

now

decade.

a

ord

1925 when he was a history pro¬
the
purchase of fessor of Lamar
College in BeauOregon in anticimon^ Texas, and, carried him to
pation of the country s expansion the

days

early

has

ord of

by Hugh Bul¬

P r

charged
mass

well-maintained

a

Machines

of

transactions

land

This

announced

lock,

and

.

lending.

mortgage

cabs

tion at lowest cost consistent with

of Calvin Bul¬

was

''

that handled by taxicommuting; railroads,

cago except

with

funds

operations, mostly in the woolen Oil
Company.

business

to

By that single offering, plus the
absorption of the $37,000,000 Au¬

of

under
the
management

a

i

,

Moving to San Francisco later,
the
firm
engaged in financing

One

Fund, Inc.—
was able to raise $185,000,000 after
commissions has made a deep im¬
pression on Wall Street minds.

directors

«

—

860,000 acres

Street

of

in

varying degree to finance capital

notable

The fact that Lehman

boards

41

The Security I Like Best

University, has been electthe

to

Co;, \ twb

"The

—in offering the public shares this
month in its new mutual fund, The
William

lumbia

is

whose

; *

Wall Street.

re-

This

confidence

upon

Lazard

the

as

most

the Dividend
Shares, Inc. and NatioriWide
Securi'
tries and its industrial technology,
ties,

three Italian banks in 1946.
Just

the

be

the investor.

Grayson Kirk, President of Co-

growth of the country, its mdus-

joined with Lehman Bros,

buy

the

little

a

based

will

Continued from page 2

Two Bullock Funds

"believes that a longpolicy emphasizing equity

owned

Lazard

Grayson Kirk Dir. of

of the fund,"

say,

range

closed plans to set up a privately-

development organization
in Iran to provide that country
with both debt and equity capital.

objectives

,

"The management

year,

Manhattan

investment
policies.

proposed
and

ness.

(2645)

was

manner

InSc

tax exempt bonds. The size of the

1966, ,the
m

maturing 1958-

trading interest

main

is

the term S. F. 3"As of 1978 and

term 4/2S due 7-1-82,

What's
hasn't

good

been

record,

thus

emphasized?

have

the

r

issue, coupled with interest
major center of populaa good
measure of marketability;
in

tion, is giving the bonds

in this picture that

new

already

Earlier writers

the

stressed

growth

of

the

:

A. B.

and have also not overlooked

area

and degree as with other

term

the loss of riders, which of course
has occurred, nationally in large
centers of population since World
War II.
To me the real meat of

Young Pres. of

Phila. Gh. of Commerce
PHILADELPHIA, Pa.—Andrew
B. Young, a director of Wellington

ciding to devote their energies to a member of the United States
Fund, has been elected President
'Ai
Dnmhnrtnn
late has been a ver^ Perceptible
the
first, and in that year the delegation
of the Greater
staff
realization on the part of the re¬
banking house of Lazard Freres Oaks. In 1945 at the San FranPhiladelphia
sponsible
public
that
Chicago
is among the top ten in size in the
opened its doors in San Francisco, cisco conferences he was execuChamber of
Transit Authority is vital to this
country.
By 1880, they had moved to New tive officer of the Third CommisCommerce
area
and must be sustained
Aside from Lazard, two other York, and 1903 became a member sion which established the Secu¬
and will take
sound condition.
This attitude is
of the New York Stock Exchange. rity Council for the United Na¬
well-known Wall
Street
invest¬
o f f i c e* on
recognizable in the press, locally
ment firms, one of which is al¬
tions when it came into being.
In
July 1st.
1933, when legislation re¬
and
nationally;
public
officials
ready closely-identified with the quired the separation of banking
,(A iiative
He is a member of the Council realize it; and even many private
mutual fund business, are consid¬
and investment banking, the firm on
Philadelphian,
Foreign Relations, the Acad- motor car operators admit it.
Mr. Young has
ering the organization of mutual decided to remain in the invest¬
emy
of
Political
Science,
the
The value and necessity of The
funds this fall.
been a partner
ment banking field.
American Political Science Assosince
1935
in
Investment companies, it's said,
On several occasions, tire firm
the
the
law
firm
a
chief role in
were
born well in The Nether- played
curbing for international Law. Dr. Kirk's
by
Complete°shutdown
of
Stradley,
lands, bred well in England, and money
panics ,for
its facilities books j„cIude "Philippine IndeRonan,
Stev¬
put to work in America.
The enabled it to ship gold from San pendence"
published
in
1936;
'n
this would be a most
ens and
Young,
to
New
York when
earliest-known was begun at the Francisco
International PoC
Corp.. assets, Lehman Broth¬

rora

created

ers

which

mutual fund

a

Saitohand

•

AmS^n

SSfiSS
i

!/bTC wSTvS

Contemporary

start of the

19th century

by King

needed.

itics"

(with W. R. Sharp) in 1940;
National Policy, a Syllabus" (with R. P. Stebbins, 1941);

William I of The Netherlands.

"War and

where they have had a
turbulent history before evolving
ill lO llltJlX
into their piCbCXlL IUII11, cllllUJUg the
present form, among U1C

25% Gain in Share

first

nlllCS

Here,

the

were

ones

sonal

Boston

Trust,

Property

Per-

in

begun

1894, and the Railway and Light
Securities
These

Co., started in

were

1904.

so-called closed-end

investment

companies,
with
a
fixed capitalization. Their shares
often can be sold only at a discount from net asset value in the

the

contrast
°

Rv

shares

of

wl

mu-

fiiHH

o

which have a fluid
capitalization, are redeemable at
net

funds,

The first of the

value.

asset

mutual

funds,

vation

for

an

the

American inno¬

investment

The

1924.

funds

mutual

assets • of

those of closedcompanies in 1945.

surpassed

end investment

Both offer investors professional

supervision

of portfolios

versification—where
invested

sum

can

securities

many

Study of International
American
Colleges

in

■

JlY W ClllllfftOll

and

Universities,"

in

published

1947 by the Council on Foreign
J
Investor purchases of Welling- Relations. Also he has contributed
Political
Science
Quarterly,
ton Fund shares for May 1958 to
were the highest for any corre- Foreign Affairs, American Politi¬
cal Science Review, International
sponding month in the Fund s

history and more than 25 Jo above Organization, and the Yale Law
Review.
He is a member of Phi
May 1957, according to A. J.
Vice-President

Wilkins,

Di¬

and

even

value

sional
ents'

continuous

of

and di¬
a small

profes¬

their cli¬
programs."

investment

The

total

The

of

orie

uncij

®

of

assets
,

Wel-

America's

^

ifu^S^™e-reia2i

|.a,r£

~

540,000 at the close ol May lyaB.

Comparative gross sales figures
as

follows;

many

indus¬

there

that

does

not

to

car

complete

such

At New

an

emer¬

dertaking.

It

most,

for

would be

"shank's

and

that usage
for long.

catastrophe would show

a

and

all

that

faster

and

for

moved

people
more

can

effi¬

public transporta¬
tion than by the use of any other
would

available

show

that

no

months

of

the

fiscal year ending

30,

the

in

Net

of Broad

assets

.

^

Street In-

jt

j!

.
-*

►

on

were

dollars

$21.27

these

and

„

jn

holder has

mutual

_

-

_

jmatched by its conservatism.

{

An

_

nin

__

_

/•

a

on

Freres
rreres

is
is

a

firm whose

John

xnorougniy
thoroughly
own

American

growth has par-

xi/ul

-p

*wo

C

WL

"ll" "MlUtl!, Ivamsay

(Special to the financial Chronicle)

alleled and been

caught up by the
growth of the United States econ¬

on

subjects.

McDonald, Holman
Sells North American

Merchandising Co. Stk.
An

offering of 300,000 shares of

common

stock of North American

Merchandising Co. was made on
June 6 by McDonald, Holman &
Co., New York, at $1 per share.
The

offering

The
under

was

oversubscribed.

company was incorporated
the laws of the State of

Delaware

on

April 11, to engage

present

to the greatest number. Its presence in that area has slowed down

times

has been coddled
by having services
provided which bring him into
congested loop areas at great pubpast

he

and pampered

cost.

jic

problems

The

transit
i

are
j

.

.

i

metropolitan

of

just beginning to be
i

a.

/-^i

•

m

understood, but Chicago Transit
Authority is ahead of others in
such
local
understanding. The

is primarily engaged
merchandising of greeting
cards, gift wrappings, gift acces¬
sories and

stationery.

Harry Brager Opens
WASHINGTON, D. C. —Harry
E. Brager has formed Harry E.
Brager Associates with offices at
1218 Sixteenth

Street, N. W. to

en¬

gage in a securities business.

Martin Morfeld Opens
ROCK

SPRINGS, Wyo. —Mar¬

tin B. Morfeld is engaging in a se¬
curities business from offices at
119 Bank Court.

First Southern Adds
(Special to The Financial Chronicle)

ATLANTA, Ga. — Gordon W.
Axe, Chairman, and future will show that no longer Darden Jr has been added to the
Templeton,
President, can any one agency, public or pri- staff of' First Southern Corporasaid that "investment through a vate, pre-empt the lucrative gateb£im Ulct1,
luluu&" " vcic, pic-uiipi
iuum »c
|jon> g52 Peachtree Street, N. E.
Fund like this provides mutual ways, be they tunnels, streets or
benefits for both U. S. investors bridges. It is an overall problem
Merrill

Emerson

the end of April.

Despite the French name, Lazard

lecturer

and

finance

the

in at cross purposes with the public
April 30, the responsibility of the greatest good

average

_

and

at

$4,171 invested vesting Corporation, the diversi- from $3,028,606 to $2,928,841
fund shares, and the ffed
fund of the Broad Street Canadian dollars,
accumulation plan holder, Group of Mutual Funds, reached
The Fund, formerly Templeton
$1,890, 10.2% of the regular ac- $109,517,939 on May 31, Francis F.
Growth Fund of Canada came uncount :holders
have
$25,000
or Randolph, Chairman of the Board
der
Axe
Securities Corporation
more invested, and 25% have over
and President, reported.
uwu
This is more than *
$10,000 m luiiu wiaics.
in fund shares.
This is more ^ — $3 million sponsorship last Aug. 30 when it
While Lazard as an entity is greater than the previous high of was renamed and shareholders ap47
y\r*r\\tc*A
thh
OAntiminilQ
nt f Print*
Hi
proved the continuous offering of
very wiell-known today, less may $106,318,431 as of April 30
shares to the public.
be known about Lazard's history,
Per share asset value on May 31
In their letter to shareholders*
ifor
the
firm's
sophistication is was $21.92—up from the $21.41 at
count

ac-

author

an

taxation

in

feeder and periphery areas, but in

American

shares.

regular

and is widely recognized

fair place in the congested loop
areas.
Its costly presence there is

or

the speed and efficiency of trans-

average

Well¬

ington,
as

the private car has no reasonable

P°rt for thousands of citizens and
workers. The automobile operator
and his private car belong in the

the

coun¬

for

primarily in the business of marketing and merchandising, through
Axe-Teippleton Growth Fund of job. And most important of all, retail super-markets, products of
Canada rose 10% in the last six it would dramatically ftrove that a diverse nature. The company

amounts

While

general

means,

$19.52, respectively). Total net assets changed
only slightly in the half year—
*

six—own mutual fund

Young

especially
The net asset value of shares of the
private car, could nauuxG the
^A vuwuiu
handle

day of the fiscal year, as
against $18.75 on Oct. 31, 1957 (in

High Total

B.

sel

mass

It

means.

last

Fund's Net Assets

Today, of an estimated 9,000,000
stockholders, 1,500,000—or one in

enough

gency job. Automobiles would be
backed up for miles and probably
wouifj be abandoned in the un¬

other

Canadian dollars

tries

exist

street space for the private motor

The shares were worth $20.62

be spread across

in

long in local memories.
Transit
engineers will tell you

ciently by

1958, according to
Fund's annual report.

$9,256,000
$7,360,000

May 1957

wonderful

(ruths would be driven home and

be

Rises 10%

Andrew

set

remain

once

Share Value

April

May 1958

somf

service

Such

Axe-Canada

management for

..

£Ta

mare"

Beta Kappa.

1

the

and

go

would not stand up

< 0ne of the reasons for this'"
Mr. Wilkins declared, "is the recintmetmont ricniprc of
ognition by investment dealers of

are
-

"The

and

Relations

11*

wr

com¬

idea, was Massachusetts Investors Trust which AVcis formed
Trust,
was
pany

in

"I

*1

rector of Distribution.

market-places.
tual

O

XstatFon""Iv" iT CWcago
evef had to
to work
J0 the iob and tome agL^n withlut

W.

M.




T.

BRIDGEPORT, Conn. — Arthur and for Canadian industry. This
Carllson and Doris E. MacDon- form of investment, rather than

Lynch Adds

probably involving subsidy, but if
(Special to The Financial Chronicle)
the public good is kept paraPORTLAND, Ore.—J. Dou<?1as
This lends considerable author- aid have joined the staff of Smith, investment by subsidiaries of U. S. mount, then even subsidy is not
—.
..
,
-ity to the statement by the firm, Ramsay & Co., Inc., 207 State corporations, is the most welcome a horrid word. As I see it, Chicago MacyJias been addedI to
which will be investment man- Street. Mr. Carlson was formerly type of investment to a nation Transit Authority is out m front of Mer 111
y
agers of the new fund, about its with George C. Lane & Co., Inc.
such as Canada."
with these basic understandings.
& Smith, Executive Building.
,
omy,

,

.

42

The Commercial and Financial Chronicle

,(2646)

Vs

"

'
■

.

.

y

r

The following statistical

Indications of Current

latest week

Business Activity

week
Latest

.

Week

that date,

(bbls.

average

52.3

§1,723,000

>1,685,000

1,412,000

86.5

BUILDING

BRADSTREET,
of April:

2,214,000

VALUATION

PERMIT

England

6,256,485

6,241,635

6,227,035

fl 7,487,000

7,331,000

7,078,000

8,132,000

26,438,000

25,679,000

24,892,000

27,476,000

;

1,569,000

1,714,000

1,698,000

11,853,000

11,037,000

13,055,000

6,857,000

6,607,000

6,298,000

8,003,000

30
30
30
30

193,355,000

195,753,000

202,515,000

195,285,000

21,469,000

87,858,000

20,709,000
84,464,000

76,266,000

25,020,000
97,019,000

61,383,000

60,353,000

58,050,000

529,547

570,670

533,004

671,045

480,084

503,096

491,171

589,199

„„

w

;

,

$29,108,450

.....

•

.

4——J1-—
1..4—-i

—

$15,940,184
96,493,439
41,089,088

93,135,873 '

;

.

63,484.670

-

-

—

106,310,553
97,929,325

v
,

bulk terminals, in transit, in pipe lines—May
Kerosene (bbls.) at..
,——.....May
Distillate fuel oil (bbls.) at.
———
—..—May
Residual fuel oil (bbls.) at—
May
Finished

v

unfinished gasoline (bbls.) at

and

131,698,857

51.427,308
114,149,048
82,445,303
36,470,442
20,335,961

100,967,461
33,126,565

/

18,703,000

CONSTRUCTION

Outside

Total

U.

S.

construction

June

5

—June

5

.-June
June

Public construction..—...—
State and municipal—...—

—

Federal

5

5

$481,351,000
4

$423,990,000

$380,569,000

Wholesale

155,564,000

147,240,000

173,876,000
135,755,000

268,426,000

233,329,000

209,170,000

178,108,000

181,574,000

186,655.000

90,318,000

51,755,000

Total

22,515,000

May31

Pennsylvania anthracite (tons).—....—...—.........—.May 31

7,140,000

FAILURES (COMMERCIAL AND
BRADSTREET, JNC. —

6,350,000

8,831,000

395,000

357,000

128

132

11,681,000

5

325

*11,155,000

Louis)

(St.

Lead

June

3

3
3

11,315,000

11,550,000

2791

289

278'

5.967c

3.967c

5.967c

$66.49

$64.56

June

24.425c

24.475c

24.450c

31.275c

—...—......——June
June

22.550c

22.225c

22.075c

11.500c

12.000c

—June

10.800c

11.300c

11.800c

14.800c

—June

10.500c

10.500c

10.500c

NEW

11.500c

—

at——.......——,

15.000c

June

10.000c

10.000c

10.000c

24.000C

24.000c

24.000c

X-t

>•..

i-v

June

94.500c

94.500c

.94.250c

In

month

—

DEPARTMENT

Lintel's—Consumed

month

of

„•

94.26
98.25

Spinning spindles in place on May 3

••

.

COTTON

i.'-

"/

Active

Baa

June 10

87.99

87.72

87.05

87.45

June 10

92.06

91.62

91.48

92.35

June 10

97.94

97.94

97.62

95.47

Railroad Group
—.—.....
Public utilities Group.......

—

—

Group..——.June 10

99.68

99.68

99.04

2.86

2.84

2.88

3.49

....June 10

3.97

3.98

4.00

4.12

—

.............June 10

3.55

3.56

3.57

..June 10

3.77

3.78

4.01
4.56

+
..........

—...

..June 10

...

,

......

June 10

—

Group

MOODY'S COMMODITY INDEX_.__„

*119
116

3.78

3.94

seasonally adjusted—

118

4.01

4.03

4.07

4.58

4.63

4.60

126

128

144

127

130

145

4.31

4.04

3.81

4.08

398-7

400.6

396.8

LIFE

264,648
247,209

242,408

286,b35

381,000

259,071

246,385

272.124

31

83

85

31

348,600

333,870

::

81

ACCOUNT

FOR

109.82

POLICYHOLDERS—INSTITUTE
INSURANCE—Month of March*.

493,679

109.92

Annuity

110.20

Policy

■_

1,711,330

1,537,800

17

389,200

—,May 17

1,303,430

1,269,700

287,810
1,273,340

j^y

1,636,320

1,658,900

1,561,150

_jXv

—

Other sales ..—.......—....-.....—....
Total sales..——...
Other transactions initiated on the floor—
Total purchases

May 17

Short sales

—„—

.........——__——

385,960

501,880

532,740

424,660
584,915

658,420

162,030

195,630

138,060

659,370

685,850

561,629

881,480

699,689

May 17
•xfOTMnmr-May 17

2,655,755
562,720

2,727,620

'2,561,405

2,748,720

625,230

464,570

2,396,880

2,447,890

2,220,929

2,959,600

3,073,120

2,685,499

DEALERS

members—

—May 17
May 17

.......

...........May 17
Odd-lot purchases by dealers (customers' sales)—
Number of orders—Customers' total sales..
May 17
....................

short

INSTITUTE

■.!.

$3,457

$3,860

563

944

1,158

$5,688

$4,860

$5,653

*$30,266

,509

—.

——

.

(DEPT. OF COMMERCE) NEW SERIiS"'
Month of March (millioris of dollars >:
.

NondurablesT—

;

.

•

22,159

^

1,357,465

1,201,302

1,424,509

$51,128,097

$57,441,121

$51,370,713

$53,334

25,117

*25,542

28,426

$30,666

Sales

$76,726,917

1,090,383

1,180,818

992,714

27,661

18,868

18,837

1,062,722

1,161,950

$44,958,526

$48,156,212

973,877
$42,521,298

Number of shares—Total

Short sales

May 17

343,960

327,950

267,160

374,080

—.—...May 17

—

May 17

343^60

337~950

267,160

439,990

501,140

492,670

487,490

TOTAL .ROUND-LOT STOCK SALES ON THE N. Y. STOCK
EXCHANGE AND ROtlND-LOT STOCK TRANSACTIONS
FOR ACCOUNT OF MEMBERS (SHARES):
Total round-lot salesShort sales

$30,554

,

WHOLESALE PRICES, NEW SERIES
LABOR — (1947-49 = 100):

—

,,

994,170
13,218,230

953,240

805,550

13,952,700

11,871,490

14,905.940

12,677,040

13,610,440

-All

„

Farm

.June

119.1

119-3

119.3

96.2

97.4.

97.7

90.6

.June

113.0

113.2

112.0

106.5

.June

commodities other than farm and foods

1®58> as

113.0

115.4

111.7

95.7

.Juno

125.2

125.8

125.4

125.3

(I Includes 869,000 barrels of foreign crude runs.
§ Based
against Jan. 1, 1937 basis of 133,459,150 tons.
tNumber

one^h^f cent8alpound



of

of

on new

of

annual

orders

not

capacity

of

140,742 570 tons

reported, since introduction

Western Zinc sold on delivered basis at centers where freight

of

from East St. Louis exceeds

.

OF

4,35

4.05

£22,693,000

f20,998,000

$2,869,355
134,440
322,244

$2,776,150
-110,741
313.395

214,039,579

U.

115,750,571

listed shares,.,
listed bonds.!.

on

I_

S,

—

IN

HOME

114,816,119

449,420»

,

other collateral,,,. :

FINANCING

984,558

954,350
207,795,213.

.

6.34

1,995,649

,

275,253.
1,941,152.

,

$2,820,197
27.802
>

318,625
-807,352

221.593.121
*100,657,111
67,583
.

2,204,6.75

NON-FARM

LOAN

BANK.

—

Individuals

Total

2.91

£30,242,000

BOARD—Month of March (000's omitted):
Savings and loan associations,
"
Insurance companies
Banks and trust companies.. _•
Mutual savings: banks
Miscehaneous

3.08

4.27

—

borrowings

ESTATE

3.82
:

BRITAIN

to customers.^.
hand and in banks In U. S

value

AREAS

117.5

.June

■;

GREAT

DANK LTD.—Month of April

Market value

Member

4.77

:——

——•

Member borrowings on U. S. Govt, issues

REAL

'

figure.

Market

U. S. DEPT. OF

4,69

4.76

3.08

Total of customers' free credit balances—_

13,034,650

14,212,4QQ

4.46.

4.58

extended

on

4-38

4.4Q

NEW YORK STOCK EXCHANGE—
As of April 30 ( 000*s omitted):
Member firms carrying margin accounts—
Total customers' net dehit balances.

575,790

17

..I May

Commodity Group—

.vised

MIDLAND

4.19

6.06

■

—

(24)—

1,—...

IN

*

•

4.12

—

& Tel.)
——

CAPITAL ISSUES

-•

May:

!

(15)
Insurance (10)

NEW

of

*—

—

Banks

Cash

sales.—

*—«*..

(not incl, Amer. Tel.

Credit
Mav 17

$30,585
>

OF

'

—May 17

Other sales—...—„

Meats

Utilities

YIELD

STOCKS—Month

COMMON

Industrials (125)
Railroads
(25)

374~08Q

May 17

—.........

commodities—.
products—
Processed foods—.

100

AVERAGE

WEIGHTED

Average- (200)
sales...

Other sales
Round-lot purchases by dealersNumber of shares

Total

MOODY'S

1,313,262
14,739
1,298,523
$67,472,968

Round-lot sales by dealers-

22,149

*$52,445

f'

1,206,601

......May 17

—

$31,185'
•

*22,179

$52,040

Total

MONEY IN CIRCULATION—TREASURY DEPT.
As of March 31
(000's omitted)

.May 17

....

$3,932

459

1,319

—..—.—

Inventories—

2,418,650
2,897,260

May 17

sales

Customers' other sales—.—
Dollar value

3.19,400,000.

„

$567,908,000 $575,100,000

478,610,

AND

SPECIALISTS ON N. Y. STOCK
EXCHANGE —SECURITIES EXCHANGE COMMISSION:
Odd-lot sales by dealers (customers' purchases)—t
Number of shares—.—
Mav 17

Customers'

168,300,000

"

—-—,—

Dollar value

i

111,200,000
100,300,000

STOCK TRANSACTIONS FOR ODD-LOT ACCOUNT OF ODDLOT

9,900,000
43,600,000

.

IVfonth of M^arch

Total

716,760

.....

—

48

MANUFACTURERS* INVENTORIES AND SALES

584,170

821,400

...

—

.

Group

132,590

May 17

Other sales ...—u
Total sales

PURCHASES

Industrial,

399,960

549,980

for account of

$641,500,000

,

$8 5°0. 000

9,800,000

376,960

556,505

........

round-lot transactions
sales

23,000

" 131,100,000

....

INSURANCE

LIFE

126,600,000

^

—

(000,000's omitted):

389,380

38,700

May 17

Total purchases
Short

438,690

—....——May 17

-——

.

466,310
40,400
492,340

the floor—

Total
Total

491,120
67,800
434,080

May 17

,

Total purchases

Short sales—
Other sales
sales

dividends .tJ

INSURANCE

.OF

1,730)540

May 17

Other transactions initiated off

LIFE

1,457,520
e

1—

49,9.;«, jO

58 20b <KKJ

V

$29,881

—May 17
..._.__.._._May 17

—.—....

Other sales
Total sales

1,700,920
323,020

_.i *

values

>

.

10,000,000

payments

$323;800.900,

$239,700,000

!$262,700,000
01.200,000

payments.——«

Total

1,608,130
332,890

LIFE

OF

'—.——_—^__,_

endowments..h

Surrender

Mnv 17

—.—...

benefits

Matured

BERS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS:
Transactions of specialists in stocks in which registered—
Total purchases.—
Short sales...—...

"";.V i-V,

INSURANCE—BENEFITS PAYMENTS

Death

MEM¬

OF

.

Disability
109.82

.

.

'

93

365,246

-

Unadjusted

OIL, PAINT AND DRUG REPORTER PRICE INDEX—
TRANSACTIONS

OF
THE FEDERAL. RESERVE
SYSTEM—1947«49=:^1IM)—Month of April:

ERNORS
.

Seasonally adjusted

427.6

31

daily),

(average

INDUSTRIAL PRODUCTION—BOARD OF GOV¬

4.25

3.90

6

v;

->v
115

4.30

June

100—Month of Apidl:

=

*127

3.77

100

SECOND TED- T
p IS T RICT, FEDERAL

.113

3.88

31

426.7

3,533,000

121

4.27

...—.........—......

18,246,000

399.2

378.0

114

3.77

May
(tons).
May
Percentage of activity.............
May
Unfilled orders (tons) at end of period.........—May

21,406.000

17,682,000
7,984.000

'

11G

3.88

NATIONAL PAPERBOARD ASSOCIATION:
Orders received (tons)..—.—.—

20,942,000

9,451,000

Sales

.—June 10

....

18,246,000.

3.86

June 10

...

,—

969,225

956,789

Sales (average monthly), unadjusted——•
Sales (average daily), unadjusted..
—__

June 10
..June 10

..................

—

,

Average

104,243

88,716

.

-

SALES

BANK OF NEW -YORK,—)947-1!)

RESERVE

Bonds

-

17,6^2;000

(000's

STORE

RESERVE

ERAL

MOODY'S BOND YIELD DAILY AVERAGES:

809,727
1.515.192

11,895.544

■

DEPARTMENT

94.86

June 10

'

632,022
1,746,865

10,516,327

omitted) May 3 '
spindle hours for spindles in place Apr. *
,•; !
C
c
spindle hours
;

23,700

$89,900

17,602,000

Spinning spindles active on May 3

95.01

Active

24,300
$89,300

/

•

•

SPINNING

12.800

17,602,000

96.07

102.96

97.00

ROUND-LOT

$53,300

"

88.29

96.38
103.13

95.62

x=*

'"'

•

20,942,000

(DEPT. OF COMMERCE):

95.54

96.54

99.52

AVERAGE

-

$52,500 V
,12,500

;

$88,500

.'

95.92

1949

;V.

9,338,619
75,043
941,177

a"!.

99.52

—

i

1,722,973

7tpril_!

95.92

Production

12,312

OF

May 3.—
spindles active as of

99.68

Railroad

s

729,546

June 10

Public Utilities Group
Industrials Group

v:,j.

Cj

BALES(>|

103.30

95.97

•

of April—

June 10
June 19

—

,

_

Cotton

-—

Baa

■

12,400
24,100.

•

consuming establishment as'.'of "May 3__.
public storage as of May

In

98.375c

95.82

LINTERS

AND

COMMERCE—RUNNING
Consumed

June 10

A

J-

$52,100

'—^

'H 'Mi". *-'■*>

•

A

Aaa

11,670

t\i

' /

?

June 10

Aa

*

/

—

COTTON

25.000c

—....

corporate

$57,103,000

11,329
>

i

;

Total

11.000c

—.——June

U. 8. Government Bonds—.—
Average corporate.

Average

3)878,000

$71,555,000

'

IN THE

t—

Wholesale

$54.83

Stocks

U. 8. Government

9,090,000

4,470,000

29.075c

11,000c

$32.00

MOODY'S BOND PRICES DAILY AVERAGES:

Industrials

15,994,000

,

11,921,000
.

—

(MUions of dollars):

Retail

.

•

at......

Aa

118

■

(NEW)

DEPT. OF COM¬
SERIES — Month :.of March

INVENTORIES

Manufacturing

'

$35.33

Aluminum (primary pig. 99% ) at...
Straits tin (New York) at—........

Aaa

$83,977,000

.

(East St. Louis)

Zinc

23,5314)00

,9,612,000 *

/13,497,000

liabilities;^!;:

INCORPORATIONS

BUSINESS

5.670c

$66.49

$66.49
$36.00

(delivered) at

tZinc

service

V'.,

QUOTATIONS):

at—
Export refinery at..—.
Lead (New York) at

7,b73 000

23,657,0.00

•—-ti

liabilities

liabilities—:

MERCE

refinery

172
-

1,495
1,175
$23,311.000; $16,286,000
8,322,000
11,855.000

$29,538,000

r_——

UNITED STATES—DUN &■ BRADSTREET,
INC.- Month of April- —_!l———

Electrolytic copperDomestic

121

580

♦

r-r;

.—........

(E. & M. J.

METAL PRICES

115

202

1,458

-——

117

DUN &

.....—.....June
—.
June

pig iron (per gross ton)—
Scrap steel (per gross ton)..........,

190

141

750

209

—

—2_._ '

liabilities

545,000

116

7

June

(per lb.)

Finished steel

281

<•

'

"

Commercial

COMPOSITE PRICES:

IRON AGE

139

116

—~

liabilities—!^1.——

Total

June
—

257
'

737-

__

Whclesale liabilities

BUSINESS

INDUSTRIAL)

::£-.V

number—

number

Construction

*5,570,000

339,000

DEPARTMENT STORE SALES INDEX—FEDERAL RESERVE
SYSTEM—1947-49
AVERAGE — 10O_.
....
May 31
EDISON ELECTRIC INSTITUTE:
Electric output (in 000 kwh.)

>:'

.

—.—

—

service

Manufacturers'

COAL OUTPUT

Bituminous

BRADSTREET,

:'"VVr

number

,

233,529,000

Retail

(U. S. BUREAU OF MINES):
coal and lignite (tons)....

83,437,287
504,668,981

number

Commercial

$442,699,000

171,720,000
309,631,000

53.723,840

510,322,516

—

FAILURES—DUN &
INC.—Month of April:

5

53,726,893

536.821,090

.4--

City

York

Retail number——i

June

—«...

-;

$588,106,268

City

New

Construction

construction...——

Private

128,291,173

$564,040,356

—

Manufacturing number

ENGINEERING

r-

York

New

States

21,249,138
154,423,117

$590,547,983

—

BUSINESS

Revenue

CIVIL ENGINEERING
NEWS-RECORD:

United

22,589,537

r121,366,793

'—

,

——

Total

ASSOCIATION OF AMERICAN RAILROADS:

1

$23,288,176

100,757,364

56,622,773

Mountain
Pacific

Stocks at refineries,

„

Ago

40,067,000

freight loaded (number of cars)
—May 31
Revenue freight received from connections (no. of cars)—May 31

•

.

Central

West

2,119,000

11,964,000

.

—

Central

South

Year

Month

&

..4——

Central

East

DUN

...—

Atlantic

South

7,418,465

—

Previous

CITIES—Month

INC.—315

Middle Atlantic

r,._May 30
Crude runs to stills—daily average (bbls.)_„———,_May 30
Gasoline output (bbls.)
May 30
Kerosene output (bbls.)
May 30
Distillate fuel oil output (bbls.).,—,—_
May 30
Residual fuel oil output (bbls.)..—„
.May 30

of that date?

are as

Month

Ago

*62.4

of

43 gallons each)——

of quotations,

cases

"

either for ths

are

Latest

New

AMERICAN PETROLEUM INSTITUTE:
Crude oil and condensate output—daily

in

or,

Year

Ago

§53.8

Indicated Steel operations (per cent capacity)—,——June 15
Equivalent to—
Steel ingots and castings (net tons)—
June 15

on

:

production and other figures for tht

cover

Dates shown in first column

month available.

or

month ended
Month

Previous

Week

AMERICAN IRON AND STEEL INSTITUTE:

or

tabulations

Thursday, June 12, 1958

.

*'

r

;

-

115,207

334/410

86.922

89,048

252,673

$93,188

318,355

351,136

$1,700,652

$1,936,502

94,483

269,858.

$1,866,073

$743,513

100,707

304.411

108,334
345,058-

343,811

lending institutions....

$637,584

$704,551
-

<

Volume

Number 5750

187<

.

offerings

the bulk of the

uIq age

thai;, is.' of

do

up

well geared for the long term as
far as research and experience are
concerned. The company's best
known products include gyros, but
systems for all sorts of commercial,
business or industrial activities

Two foreign dollar loans are due
out with the Federation of
open bids for $15 million of bonds. Rhodesia & Nyasaland
slated to
Tuesday: brings up $25 million of offer $10 million bonds on TuesiSnriHc. nf^plawarp Pnwpr Rj T iuht
da^ and the Municipality of Metw ;v
f
ropolitan Toronto due * to offer

giant:sized; syndicates.

-irQn Monday, Oklahoma Gas will

™

ai

mddmg and on Wednesday

$39,587,000

debentures

of

seems to be the area of greatest
management concentration. Earn-

on

.Arizona Public Service Co. plans Wednesday.

ings

recent1

Results of the Treasury's

.operation proved fully up to the
the

its

of

case

long-term,

new

'

than had been anticipated

better

«i?

-

CM

notlent much stimulas to the seamarkets

soned
rate

to

nor

the

corpo-

This

-

of

not

does

any
new

.the-broad

in;

really serious backing
isues m syndicate hands,

field

"

p

is

°f

'important applicatgions

a

word, the manipulation of

oratory-

rates-by Federal managers

afld

and these are

Bood

variety

testing,'"

refining processes. The population

out buyers

ri.iHnti' thP

process
fisral

ex-

.A secondary offering of 250,000
common stock of G. D.

shares of
Searle

laby_ with the U. S. and size^compared
tanow about 10% in glowing at

ln
control

guidance.
guidance.

military
military

Secondary Common

a

vpar

now

seems

Co.,

offerings

corporate

chiefly

the

for

purpose

„

,

priced at $45

the

shares

shares

share,

a

180,000
owned by trustees of

were

offered,

000

ghareg

by

John

which

industry

of facilities al-

growth

financing

ready completed or under way.
This has
small

linear accelerator produce charges
in the millions of volts and that

industrial and military laborato-

a

,

'

banking
syndicates
entered bids for the Vir¬
five

which

There

the

on

during the next few years.
'
Varum Associates, a West Coast.
.

.

.

.

„

,

,

successful sroup

issue
a

down on

37s%

group

cents

was
per

highest

second

62
$1,000 lower, while the

last of the

99.823,

The tender

rate.

the

by

entered

to

bid of 100.152 fo

a

coupon

100.0899'

or

a

mere

four unsuccessful bids,

was

only

about

$3.29

a

thousand under the best.
Priced for reoffering

ai?d sa!es in the ^!cm^
°i $17 million, is endowed with
of the finest available research

same is true of many others,
as
Consolidated Electronics
the electronic

departments. The company makes
klystron tubes, microwave tubes
arid a broad variety of supersensi¬
tive, devices used in both industrial
and
military applications.
Earnings for the fiscal year endbut

future

the

potential

Sharpe

company you

seems

quite favorable and the fiscal 1959

report could make far better readyield of 3.82%, ing.,
the bonds were reported meeting \ Teleohrome is a small company
fair demand, but without attract- located in Amityville, Long Island,
customers.

and at first

the hasty

Ltd.

DIVIDEND NOTICES
NATIONAL SHARES CORPORATION
Wall

14
A

quarterly

share

and
a

capital

and

June

30,

1958.
JOSEPH

Vice President
June

9,

T

September

The Garloc£

television.
This is of course imThe biggest single deal on'the# portant to thenv and if you have
roster for next w<*ek, New Eng- decided to be bearish forever on

appears

traordinarily fine
company

meetin g

of the Board of Direc

to

of

1958.

1958

15,

to

close of business

August 15, 1958.
The

WAGNER

Goodyear Tire & Rubber Ce.

By Arden E. Firestone,
Secretary

June 9, 1958

RUftBER

BAKING,

CORPORATION
Board

The

declared

IHC GREATEST NAME IN

share

a

of

July

J. V.

field, Radi¬

The

has

Directors,

dividend of 31.25 per

the 7% Preferred Stock

on

payable

1,. 1958, to stock¬

1958.

STEVENS, Secretary

INTERNATIONAL

is capably managed, anG

the type of products

A

holders of record. June 29,

to hold an ex¬

potential.

Jm*4»1958

stockholders of record at
the

^

profitable as it

In the U. S. military

Secretary,

dividend:

U. S. Military Suppliers

ation Inc.

STOUT,. " f

and

60 cents per share on the
Common
Stock, payable

a

has been, the earnings should keep

conclusion that the sole

8.

1958

The Board of Directors to¬

the company may more
than double its sales during the
next 12 months, and if the com-

glance one might form

a
cents

day declared the following

is growing,

^

(12o)

four

of

have
stock

H. B. Pibrgb, Secretary.

Just
to show how Canadian electronics

Pany remains as

York

been declared this day, on
payable July
15,. 1958". to
stockholders of record at the close of business
share

(4c)

the

business June 13;

bonds

,

....

New

twelve cents

dividend

extra

such

is

heard ot, but
and stock are m public hands.

Street,

dividend of

an

pany,. payablev June 30* 1958,
stockholders of record at the close

have probably never
convertible

products are associated with color

Sanc TTndprwritPr
Sans Underwriter

now

held this diay, a quarterly divi¬
dend of 25$ per share was dedared
on
the common* stock of' the Com¬

operations of A. V.

Instruments,

.

at 100.977

ing any major rush of prospective

PARK, Fla.—Schuyler
with White, Weld
& Co., New England Building.

At

Roe.

high, '

ing Sept. 30 may not be very

WINTER

Pardee is

tors,

—a

+i

aii!'0U"d

an.indicated

for

if„+

g

<■,

With White Weld

•

operations
Canadian G. E. is

one

thinking pretty much alike
pricing.

rr,

u

by

-

,

COMMON DIVIDEND No. 328

but the st0ck is owned
Generai Electric. The

important

1278 North

Packing Company

assembly

Curtiss-Wright.

.

T.

Fla.—Stephen

(Special to The Financial Chronicle)

manu¬

'in^the Domimon, anci the balance
^i !on,_ibarf.s5.e_f.e„c^
aircraft

very

hesitates to put a

ure

in the matter of
The

of

number

a

concise figcompany's potential

a

million
were

are

SARASOTA,

facturers, most of them owned by
XL S. or European organizations

Electric & Power Co.'s $25"
varuma west
of new bonds obviously organization
with stock selling

ginia

market,

dsotope products, one of the more
advanced scientific manufacturer,

one

; Bidding Is Close

.

their benefit.
The selling shareholders stated

S.

large commercial potential exists in oil refining, and

that

The;

the U.

Hardy, Hardy

Olds has joined the staff of Hardy,

Searle familv or helrl in trust for
Searle family or held in trust for

t.n beto hp-

wprp
were

as

been developed so far, such as the ^ ^
Canadian Curtiss-Wright
sterilizing of sutures
ineie is
widespread
however, is
^^d°f feeling, by Ethicon. A of which uanaaian uuruss wngnt,
800,000 shares represents

ventory-building, etc.
;

large

as

Joins

(Special to The Financial Chronicle)

gearle>

Q

President and director of the company.
After sale of the 250,000
shares, approximately 51 % of the
company's 4,425,220 shares of out-

which would
be around $110 million. What com- that the decision to sell a portion
of their holdings of the company's
panies would benefit?

Jies have been the chief outlet. A
few commercial applications haye

long period of weeks. Such
repayments' have been sufficient
repayments have been sufficient
over

10%

electronics

sustained

the

in

downward trend in business loans
•

come

reflection in no

found

measure

electronics

Canadian

indebtedness alysts are probably aware that the
had incurred in Van de Graaff generator and the

funding f I o a t i it g

Glasser

Company, Ingraham. Building.

the Marion Searle Trust and 70,-

«'radio and TV represent about 60%. standing common stock will be
occur if owned by the members of the

ha^ search,quality of ma potential.t, An- Consider elprt.rnnirs
m the
ageme
re- r»pnnHinn what might
Of
and pioduct

and

manu-

facturing company was made on
c<
June 11 by an underwriting group
June
headed by Smith, Barney & Co.
headed byis
The stock
0f

Fla.—Bernard

has been added to the staff of Sills

Hardy & Associates,
research Palm Avenue.

medical

pharmaceutical

.

•

(Special to The Financial Chronicle)

facturing

fltb tlle U* ?* and growing at a
fa?tei* percentage rate. Couple to
J^ter
this the proposition that under the
_^ ur^_er_ b_e
administration
m
Canada,

EarnEarn-

&

and ethical

*

Recent

Searle &■ Ca

was

Sills Adds, to Staff

careful buyer

Offers 6. D. Searle Go.

quickened the pace of new offer-

been
een

D

totaled!i

1957

MIAMI,

ings* during the fiscal year now new
to have. ;COming tb a close may not be too
greater efforts are being made to
far changed from the $1.15 of last
"Buy Canadian."
i ings up to this point.
year">>•. but one
might foresee a
Canadian Prnsnerts TTnrovprpd
Canadian Prospects Uncovered
True, it has evidently induced doubling of this rate sometime
;
some pickup in foreign sorties into- during the next two or three years.
There is very little literature on
'.the money market^ here, but cor-High-Voltage Engineering at 30 the Canadian electronics industry,
porations still appear to be biding manages to sell significantly above and
it may not amount to more
their time in reshaping their ex- actual earnings, but the important
than
$35-40 million, of which
pansion plan&
it

than

more

any

fa,

net income

.

Smith, Barney Group

a

the great Pot^'a1 customers in
electronics, not only for the discovery of oil and ore but in the

are

'„Se"VfraredHas agreat

money

is not tending to scare

Net sales of G

,

you.

huge country with
many borders which must be pjjfttected by electronic and other
vices.
Mining and petrole

sales

mditarv

® .®

funds available for investment,
In

uanaaa
Canada

research

in. the way-of return

can.

.

namely, the Dominion of Canada.
To start out with a few premises,

20

the

infrared

of

-tion of

they

be.

work.

simply reflects the disposipotential buyers to get all

but it

MCI* llVli AVd

Perkin-Elmer, which sells overthe-cqunter around 24, is largest

there

that

mean

■

t

mnrp

abIy Wtes
position in
time's earnings category,

bdrag their feet as far as new corporate offerings are concerned.
is

facture of pharmaceuticals in 18ML

relatively

$8,922,787; equal
Naturally, there are far too to $1.58 per common1 share. Diwcompanies among the small dends of $1.05 a share were paid
electronics organizations
to de- in 1957. In the current year quarvelop more than superficial con- terly dividends of 30 cents each
elusions in the short time avail- were paid on Feb, 2a and May 20.

KlPf1 IT ATI ICC

The company prob-

be Visualized.

inclined to

„

J

¥11

lilllClVA

nr

Invest-

capital market.

new

ment interests still are

been

which has demonstrated the abil- show you what is meant, however, able. One word of advice and cauity to make money, earningsmiefht consider what might bepipnimninc electronics field and a slow m the
of at imnmhohip dIqpa fnr termed an
a
cViorp*
seller,
least $5 per share or more might improbable. place for electronics,
Give them time to work for

i twT

■

■

U1

over--;:i;!:7%tl";
perhaps:j;',

"subscribed 2.5 times, was

far

so

meaningless.

.

..

have

of some diversification of holdings
in connection with plans to meet
the taxes. 1 The. business of the
company has been underthe mmasb
agement and control of the Searle
family since it began the manti*

many

which were

bonds,

money

-

-

and,

officials

-expectations: of

A *'"
•
Continued from page 6

Tele- of the prospective impact, of gift

ply Co. has $16 million of deben- computing on the West Coast is an estate and inheritance taxes-on the
of tures due up for bids.
interesting companyr and seems- Searle family, and! the desirability

which

dimensions

46

The and laboratory testing, industrial shares resulted fronr consideration

to sell $12 million of bonds.

schecl-

on

of so-called "Street-Size," following day Mountain Fuel Sup- systems and other fields.

mot^xejiUjre.; the rounding
:

(2647 )

Commercial and Financial Chronicle

The

.

.

SHOE

manufactured

}ta"di
color TV, this is not your com- clearly show that the toughest
nghts^ offering of 735,245 shares pany. However, you will find that type of military electronic instalot additional stock, will be hank

Telechrome is engaged

without

died

the

of

assistance

underwriters.
.

The bulk of the outstanding

.

is-

in

an

tensive variety of endeavors

ex-

hav-

ing applications in all of the major
electronic fields.
More than this,

69.29% of the\ total, is you wjn find that the company
American Telephone
j^as struck a fine balance between
Telegiaph Co., parent firm. These the one-shot product and the longholdings entitle A. T. & T, to sub- term assembly run. The result of
scribe for about 509,525 shares of this extraordinary policy of desue,

some

owned by

new

veloping products for medium and
short runs when these products

stock.

parent company exercises
all its rights, remaining sharehold- are crucially needed has resulted
ers
would have the opportunity in some extremely commendable
If the

of

subscribing for the balance of

about
share.

225,700'
Full

shares at $100- a
subscription would

profits.

The stock is around 8. of electronics
"offbeat"

part of the study

involves the discovery of

bring the issuing company upward
of $73 million, of new equity capi-

products

tal.

mendous

Plenty/ of Competition
The corporate new

should witness a run

and

electronics,

Most

companies.

students

view

a

tre-

can

petition in the week ahead since sine qua non in

be essayed.

One

can

COMPANY

be

by
the
position
oi
Epsco,
Inc.,
located in Boston.
Just
recently, Epsco, which

impressed

primarily been in military data processing and telemetry
acquired Edin. a Worcester maker

St. Ueb

189™

A

CONSECUTIVE DIVIDEND
Second Quarter

jts sales.

the road to recovery.

The new

president seems to be doing a good

job> and the new plant on Route
No.'128 is a vast improvement over
the odd collection of lofts formerly
inhabited
in
downtown
Boston.
The

caliber

research

at

of management and
Baird-Atomic seems

especially high, and although

Dividends

Common Stock

apparatus, to diversify
Tracerlab appears to be

Gf medical

on

Diversified Closed-End
Investment Company

bas

potential for Consolidated company

Electrodynamics in the instrument

issue market, systems field and they perhaps feel
of keen corrw that Texas Instruments is the.




iation

30 cents
A

quarterly dividend of

per

payable on

share

1,1958 to stockholders
ord
June

at

dose

of

rec¬

of business

13, 1958, was

by the

the

the

4
July

on

67 Vr cents a

share

STOCK

share on the

$2.70 PREFERRED STOCK

dedared

Payable July 1,1958

Board of Directors.

Record Date June 17,.

ROBERT O. MONNIO

suffered reverses from
cut-backs, the. ma-

a

the COMMON

1958

Kenneth H. Chalmers

Vic+Pmid»nt and Tnotvrnr

■

Secretary

Government

chinery is present at Baird^Atomic
eventually ta participate success-

semiconductors. To fully in equipment for military

Junn

3,1958

65

Broadway, New York 6,

N. Y»

44

The Commercial and Financial Chronicle

(2648)

Thursday, June 12, 1958

.,.

Dirlam—Before Joint Economic

1

BUSINESS BUZZ

,

Committee of the United States

Senate—paper.

Washington...
A

Behind-the• Seen® Interpretation*
ban the Nation'*

Turkey

r

i

:

Development
—

Annual

Turkey,

JL l/M'

i

Statement

Istanbul,

Turkey—pa-

Economic

Yearbook—Ori¬

ental

ask

to

define

answers.

•

•

.
.

-

The program, as

to

fiscal

new

■

Dismal Fiscal Outlook

ing July 1 will be approximately
$80 billion, most of which will
be spent through policies and
orders
of
the
Pentagon,
the
world's

biggest

the

$68

billion.
isn't bright.
If there

were

would

they

run

Chair¬

billion.

Ways- and

feels that the
remainder

good

economy,

the

of

to

points

individual

that

out

this country

in

The

Gasoline

in--

cents

has been

still t* has

■

All

ahead.

Schedule

called Korean tax

the

so-

the

up

legislation

general

the

of

the

so-called social

sooner

is because

even

to

benefits

for

son

lives.
been

for

tire.

the age has been surprising. The
average retirement age for the
women

under the program is 67,




unfortu¬

said

Attorney
Brown,
industry which has ren-

such

cost,

great service, at
could

be

so

/

i
;

about 95%

of all banks operat¬
ing in the country are insured
by the agency.
These insured
banks

held

96

all

of

bank

de-

posits.

The

insured

of

78

from

Dec.

31,

A total of 88 banks opened
closed. All but five of

166

the banks that ceased to operate
were absorbed by other
banks,

and 145 of these

were converted

into branches.

"There
671

;
,t

was

%

a

branches

net

Dec.

branches

31,

1957,

of

the

year,
number of

totaled

Banks

22,907
representing

on
an

.

creased

to

year

all

banks

$6

billion

a

crease

the

Arbitration

The 2% in¬

smallest

uals.

Only

Island

business

and

in

and

Utah

a

de¬
Area

of

business

and

341 Ninth

individ¬

South

Dakota

and

Of the total loans in all

Texas.

banks,

those of Illinois had the highest

of

commercial

and

than one-half the total loans in
New

savings
trate

on

seven

banks,
real

states mutual

which

estate

concen¬

loans,

are

particularly strong.

[This column

Is intended, to

Avenue, New York 1,

Authors Wanted

Special Bookbook-length manuscripts sought — fiction, nonfiction, poetry—Vantage Press,
120 West 31st Street, New York
1, N. Y.

let
-

CN

—

on

Board of Trade of the City of Chi¬
cago

J— 100th annual report

—

Board of Trade of
cago,

City of Chi¬
Chicago, 111.—cloth.

Economics—Paul A.
McGraw-Hill

Samuelson—

Book

Company,

Inc., 330 West 42nd Street, New
York
Florida

Real

Estate

Business

Analyzer

—

En¬

and

—

Letter,

Thirtieth

the

Howard

S.

Piquet—The Brookings Institu¬
tion, 722 Jackson Place, N. W.,

Washington 6, D. C. —paper —
$1.25. •
7:
What's Happening

to U. S. Busi¬

Today and Where

ness

We

are

Heading? — Jules Backman—
Birk & Co., Inc., 22 East 60th
Street, New York 22, N. Y.
(paper).

wh"„Iesale
dexes

Prlces

and

Price

1954.a95&_u. s. Depart-

ment of Labor Bureau of Labor

Statistics, 341 Ninth Ave., New
1, N. Y., $2.

York

World Health

Organization

Global Battle

Albert

Its

—

Against Disease—

Deutsch—Public

Affairs

Committee, 22 East 38th Street,
New York 16, N. Y.—paper—
25c.
You and Management
Davies

and

—

Daniel R,

Robert Teviot

Liv¬

ingston—Harper & Brothers, 49
East 33rd Street, New York
16,
N. Y. (cloth)—$4.50.
ar.a

Par

™

years'

186
Street,
Miami 36, Fla.—paper—$5.
Southwest

Act

Interest

You andof our €ar—Revised
1 two
basis

36. N. Y.—cloth—$6.75.

Florida
re¬

In-

N. Y.—$1.75.

20%

in Alabama, Florida, Louisiana,

kota,

Guidebook:

Characteristics,
Employment Trends, Labor Supply
U. S. Department of Labor,

registered increases in time de¬
uals. The advance exceeded

Manpower

dustrial

largest

of any state. Banks in each state

posits

Arthur M. Ross—Insti¬

paper.

Arizona

5% increase, the

Happens After Reinstate¬

California Hall, University of
California, Berkeley 4, Calif.—

Rhode
the

were

clines greater than 5%.
had

Cases:

tute of Tndu~+HJil Relations. 201

individ¬

Oregon,

Discharge

What

showed decreases in demand de¬

of

of

ment

since

1949. Three-fourths of the states

posits

Tool

of

Agreements

National

total of $234 billion at

was

Mr.

38, Mich.—$7.50.

last

the end of the year.

of

Washington Square,- New York
3^ N. Y.—$3.95.. > 7 V "

Trade

in¬

nearly

William

—

Account

gineers, 10700 Puritan, Detroit

savings banks.

of

An

American Society

eluded 13,165 commercial banks
and 239 mutual

Challenge

;—

groups,

on

the

by safety
classes,
and
L. Bete Co.,

use

driving

others—Channing
Inc., Greenfield, Mass.—paper—
25c (quantity prices on
request).

Government Policy Toward Competition and Private Pricing—

Myron W. Watkins and Joel B.

TRADING MARKETS

A. S.

Botany Mills
Campbell Co. Com.
Fashion Park

•

Indian Head Mills

United States Envelope

Morgan Engineering
•

,

National Co.

Flagg Utica

«

increase

during

bringing the total
bank branches to 8,777.
and

,

American Cement

says at-the end of
1957. there were 14,130 banks
operating in the United States,
1956.

-,,,-

---JCesY;.vYork University Press,

The Federal Deposit Insurance

decrease

■:

Tooling for Metal Powder Parts-

.*

in

banks

pretat.on from the nation's Capital
and tnay or may not coincide with
the "Chronicle's" own
views.}

and

j

7
7

misleading and
damaging publicity, as a result
of charges which, at
best are
anemic and unjustifiable."

a

|

Business

The fdic records show that

flect the "behind ihe scene" inter-

subject

\ Corporation

Then too, many thousands

Actually, the number of women
retiring since the lowering of

only "big business"?

(paper).v,

Bentonjs trip to the Soviet Union

.

to

1

rea¬

more

the Eis¬

j FDIC Report

heavy outgo. >

women are
retiring at
age
of 62^ since Congress
lowered the eligible age from 65.

say

harassment and
.

However, that has

the

can

indictment

shocking and

an

dered
little

Many thousands of farmers,
after paying in the
program just
a few
years, have begun to re¬
©f

is

"that

money

paramount

the

of

Conference, 176 West
Adams t;Street, .^Chicago 3, 111.

.

that in these

nate"

start, drawing
the
the remainder;; of

the

the

spurred

Now, who

"It

gram, before they would become

eligible

year.

Jersey and the six New
England States. The fidc said

many conserv¬

'•

more

Department

;

,

•—Facts about Time Buying for
Mass Consumption -^ American

Benton

'

during the

tion favors

ample, that they had to work
only 18 months under the pro¬

not

companies,

D./C,—paper—50c.

paper—35c.

enhower Republican administra¬

security. The

is being
paid out than is being taken in.
Many thousands of self-em¬
ployed people, learned for ex¬

their

oil

the

of

In

—

Progress, 1001 Connecti-

This Is the

banking offices

industrial loans, 52%, and New
Hampshire the lowest with 11%.
Real estate loans comprised more

Justice

ative authorities predicted. The
reason the program is in trouble

;

the

However, the anti-trust

division

program
is in
The trouble is coming

than

v

proportion

of life.

on.

top drawers of

filing cabinets!"

for in the face of economic facts

House

security

trouble.

in the back of the

'

-

dictment appears to be uncalled

must

social

Inde¬

are capable of de¬
fending themselves, but the in¬

important things

agenda

-

Mississippi, Montana, North Da¬

Certainly

on

originate under the
constitution, are some hearings

on

the

Association

of America.

Committee, where all tax mat¬
ters

for

Petroleum

big and little,

of

the

From June 1953 and

counsel

pendent

Social Security Headaches
One

excluding state

dustry increased six times, and
oil industry wages rose on five
occasions, said Russell B. Brown,

June 16.

on

gallon,

a

steel tubular goods to the oil in¬

will

islation designed to aid "small
business." The House is expected
take

a

January 1957 while crude prices
remained
unchanged, price of

be expended by Congress.
The
Committee, which has been one
of the busiest in this Congress,
is nearing completion of the leg¬

to

attorney for

today costs about 21

inevitable.

busy

a

of

letters

are

according

price of a couple of cups of
coffee, and appears to be a good
bargain.
The price increase in
crude oil was long over due, and

handled

measures

financially

vague,"

the

the controversial reciprocal trade

legislation,

the

and Federal taxes. That is about

House--Ways and Means
whictn has

out

come

informed

one

Cause and Cure

Policy?-—Eustace Seligman and
Richard
L.
Walker—Foreign
Policy Association, Inc., 345 46th
Street, New York 17, N. Y.—

^

"It reaches

Deposits

tiigher each month this year than
ihe corresponding month of 1957.

Committee

say

petroleum trade association.

cor¬

responding period in>1957. r'He
come

will

to know what

seem

and

—

Should the U; S. Change Its. China

However,

Actually, the charges

"flimsy

will be

year

to

ahead.

for the

better than the

or

cases

....

talking about,

are

ones

Committee

Means

long.

defense lawyers will be the only

Wilbur Mills of the House

man

us

people who

had ad-i

some

deficit

the

from $17 to $18

,,

Arlington County, Va.,
the Potomac.

before

711 Fifth Avenue*
22, N. Y.—paper. "*"

Finance
•/

increase of 593

$5 billion tax

a

;;

across

start

x

„

the

and

nomic

' 6,

returned

were

The trial of the oil

deduction, which
vocated,

just

fiscal picture

The

Manu¬

-Sales Financing an^Better Living

Alexandria, Va., the home of

uated in

about

run

Laws—

of

cut Avenue, N. W.y Washington

;

Washington
National Airport, which are sit¬

Potomac.

the

income will

,

;

George Washington, which today is as much a part of Me¬
tropolitan Washington as is the

building

office
of

banks

Recession

than two weeks

more

Pentagon

D.

111.—

Perspective of Our Long Range
Problems—Conference on Eco-

indictments

The
at

Labor

Association

velopment,

ago a

The level of expenditures start¬

the

in

New York

in 1960, and again

Federal grand jury, under
the prodding of the Department
of Justice, returned indictments
$280 r against 29 oil companies on
i charges of conspiracy to fix
prices of crude oil and gasoline.

country from the present

Lusk—Richard

Role of the. Soviets in the
World Economy—'Michael Sapir
—Committee for Economic De¬

annually which is ap

A little

F.

Business

New
-

„

Oil Indictment

Come next Janu¬
when a new Congress con¬
venes, the law makers probably
will be called upon once again
to raise the debt ceiling of the

on

many

year

ary

The tax

drawing

are

raised again
in 1965.

starts July 1.

billion.

bonds

*

Real Estate

facturers, 2 East 48th Street^
New York 17, N. Y.—paper.

)

plied to the trust funds. [ The
social
security taxes will be

But the deficit
is going to be tremendous, prob¬
ably ranging from $10* to $12
The

National

.

The

millions

the country.

billion.

the

Loopholes

ment bonds that are earmarked.

stantial degree on the economy
of

now con¬

*

sub¬

a

it is

paid out now than is being eollected, the Social Security Pro¬
gram has $22 billion in govern¬

'

The size of the 1959 fiscal year
deficit of the United States Gov¬
will depend

of

Nihonbashi,

Irwin, Inc., Homewood,
cloth—$6.60.

stituted,
is actually unsound.
Although more money is being

•y

ernment

Law

.

—Harold

different

12
• :

get

to

the

of

age

Economist,
Tokyo, Japan—$5.

Program Unsound

business you

small

a

likely

are

average

is 69.

men

dozen well informed men

a

the

while

c.—with
the possible exception of "small
business," there is absolutely no
chance of any tax reduction for
anybody this year. And if you
d.

—

per.

.

Japan

u-Washington,

of

Bank

Industrial Development Bank of

V^m

gM
JLM.II/IM/

Capital

Industrial

LERNER ( CO.
Investment

Securities

II Put Office Square,
Telephone
-fUbbard 2-1990

•

Bestan 9, Mats.
.

Teletype
BS 99