Full text of Commercial and Financial Chronicle : June 13, 1957, Vol. 185, No. 5646

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PUBLIC UTILITY INDUSTRY FEATURED IN THIS ISSUE

Volume

Number 5646

185

New York

EDITORIAL

We

See It

Pont-General

Motors

decision

dence that its fibre is
to accumulate and to

Pressurized atomic

^s plain evi¬

that have

many

years—and, of
There

The

case

from that Court in recent

U235 separation plants for considerable time, and sees

from the halls of Congress.

this

question, of

no

course,
a

Section 7 of the

In

point of view, with emphasis
are making in
developing a selfsupporting atomic power industry.

was

enacted in 1914

PICTURES

met by
careful
financing in advance.
Large amounts of capital have been

relations

virtual government monop¬

been

for

is

States.

obvious

to

reasonable.

public have
member companies

their

communities.

projects have been started

development
of
electric
using nuclear energy as fuel.
being made to install everincreasing amounts of capacity in
the future, in anticipation of a con¬
f

power

Passage of the 1954 Act has done
in the United

in

and

the

the

Flans

power.

much to accelerate the atomic
power
program

new

low

with

our

well

Great

responsibility for the commercial de¬

acceleration

good;

stand

The 1954 Act permits and
encourages
free enterprise
to assume .greater

velopment of atomic

on
the free market.
Despite
costs, the price of electricity

rising

both the military and com¬
aspects of atomic energy.

Gen. K. D. Nichols

This

are

tinued increase in the

use

of electric

1/UAicUU

J*

jvennedy

by the American people. As
in the past, this expansion will be financed

anyone

power

who

honestly and objectively compares the progress
made in the development of commercial atomic
power

market.

subsequent

high

to

the

the Act

of

passage

with that

Continued

45

of

IN

THIS

address

Edison

by

Electric

Gen.

Nichols

before

the

25th

ISSUE—Candid

shots

taken

made

page

Continued
♦From

of

occasion

appear on pages

on the free
This industry has continued to live up to its
engineering standards as we have continued to

40

Convention

1957.

the

on

on

Annual

Institute, Chicago, 111., June 3,

Day of THE BOND CLUB OF NEW YORK

DEALERS

been

continued

:>An

page

have

Demands for power have
"de¬

These

planning and

Our

mercial

beginning.

increase.

has

a

over

subsequently—to gain prefon

mands

to

existed

requires no showing
stock interest—either at the

Continued

continued

raised

oly

the Court

or

terized it from the

subsequently under the Atomic
Energy Commission as prescribed by
the Atomic Energy Act of 1946, there

nouncement is further evident from the fact that

a

the progress

on

and

Court, in accepting both of these conten¬
tions, disregards the language and purpose of the
statute, 40 years of administrative practice, and
all the precedents except one District Court deci¬
sion. The sweeping character of the Court's pro¬

acquisition

During the past year the electric light and power in¬
dustry has continued the rapid growth that has charac¬

Prior to the 1954 Atomic Energy Act,
under the Manhattan Project

"The

misuse of

to

first

sought to apply it to a vertical
integration. Likewise, this appears to be the first
case in which it ever has been
argued that Section
7 is applicable to a stock acquisition which took
place many years before.

of any

plan

we

far-reaching. Although

Clayton Act

time of

I

power,

the progress we are making from a technical and

economic

40 years ago — this is the first case in
the United States or the Federal Trade

case

discussing the status of atomic

cover

over

make its

the ultimate supply system for future

as

atomic power.

troublesome

Commission has

to

output

that this

dissenting justices didn't overstate the
they said:

"The Court's decision is

which

electric consumption, the coming years will
develop an average of V-/% new appliances per year. The
key to the solution of the socialistic power problem, he
also advises, lies in telling the facts to the people who
react favorably once informed on the facts. Mr. Kennedy
praises increased output efficiency attained; summarizes
atomic energy developments; and is confident the Ameri¬
can
people will continue to finance future expansion.

retention

when

—

residential

Government-free enterprise partnership; finds advisable
of Government control over development of

of

come

du Pont-General Motors decision is
one.

utility head predicts present total electric
of $33 billion will rise in ten years to
$65-$70 billion and, indicative of increasing trend of

variety

a

f

investment

recounting

course,

be

can

In

economic—reasons.

Chairman of Board, Oklahoma Gas & Electric Co.

Mid-West

the encouraging power progress made since 1954, Gen¬
eral Nichols: advocates continuing and
expanding the

it is fortunate
one

development for

power

of—nonsubstantive

indeed that such is the fact. This latest obstacle

presented by the Supreme Court is but

accelerate atomic

to

urge to produce,
obstacles lies deep

in the breasts of business men, and

President, Edison Electric Institute

water

plants of two to four hundred
thousand kilowatts competitive with coal-fired plants in
the New England area within the next two years is
predicted by atomic energy consultant in urging utilities

tough. The
overcome

Copy

By DONALD S. KENNEDY*

rendered

by the Supreme Court of the United
live with and over¬
many previous difficulties which were need¬
so

a

And of Power for America

Consultant, Washington, D. C., &, former
General Manager of the Atomic Energy Commission

States. It has found ways to

less. That it has been able to do

Cents

Future of Power Business

Atomic Energy

last week

come

857

By K. D. NICHOLS, MAJ. GEN., U.S.A. (Retired)*

Without doubt American business will survive
du

Price 40

1957

Statos of Atomic Power

As
the

7, N. Y., Thursday, June 13,

JU" 11

of

the

the

talk

a

on

page

38

by Mr. Kennedy before the 25th Annual Convention

Edison Electric

Institute, Chicago, HI., June 3, 1957.

Field

Annual

33, 34, 35 and 36.

State, Municipal

in

and

U. S. Government,
State and

pPJ

Municipal

'$fe

,^

STATE

Securities

AND

MUNICIPAL

Public Housing Agency

*{ss tsv

Bonds and Notes

COPIES OF OUR
telephone:

HAnover 2-3700

BONDS

THE

CHEMICAL

"MARKET REVIEW"
V ''

VIEW

BURNHAM
MONTHLY

ON

LETTER

bond

department

ST.,N.Y.

i

REQUEST

THE FIRST NATIONAL CITY BANK

Burnham
MCMBERS NEW YORK

and

YORK 5, N. Y.
'•

COBURNHAM

•

Dl 4-1400

Bond

120

Dept. Teletype: NY 1-708
34

TELETYPE NV 1-2262

Net

from

Commission

Orders

Stock

Exchange

YORK

coast

CANADIAN

to

Chase Manhattan

,

bank

5

coast

$200,000

Brokers

Executed

for California

Quebec

Municipals

Guaranteeing Quebec

On

Hydro-Electric Commission
4

All

Due

Canadian Exchanges At Regular Rates

Exchange

cq

Maintained

and

SECURITIES

New York Stock Exchange
Stock

Banks

CANADIAN

1832

Members

American

Markets

offices

&

NEW

York

BROADWAY,

Province of

T. L.Watson &Co.
ESTABLISHED

Active

Dealers,

New

Members

CXCHANGES

To

BANK AND

Harris, Upham

OF NEW YORK

Company

AND AMERICAN STOCK

15 BROAD STREET, NEW
CABLE:

INSURANCE STOCKS

"

BOND DEPARTMENT

THE

BANK
30 BROAD

AVAILABLE

NOW

ARE

CORN EXCHANGE

Payable

DEPARTMENT

Price

Vi %

Debentures

December

in

United

97.75

to

1,

1981

States

yield

Dollars

4.40%

Teletype NY 1-2270

MUNICIPAL BOND
25

BROAD

STREET

NEW YORK 4, N. Y.

FIRST

<SoMtkt0€At COMPANY




DIRECT

WIRES TO

MONTREAL AND TORONTO

Goodbody

&

Dominion Securities

Co.

Grporatiom

DEPARTMENT

of America
national

savynos association

MEMBERS NEW YORK STOCK EXCHANGE

BRIDGEPORT

•

PERTH

AMBOY

115 BROADWAY
NrW

YORK

1 NORTH LA SALLE ST.
CHICAGO

40

Exchange

Place,

Teletype NY 1-702-3

New

York

5, N. Y

WHitehall 4-816'

300 MONTGOMERY

SAN

STREET

FRANCISCO, CALIF.

Commercial and Financial Chronicle

The

ljt.
2

.

.

.

Thursday, June 13, 1957

(2726).

The
For

Banks, Brokers,

Security I Like Best

Dealers,

A continuous forum in

Institutional Investors

in the investment and

different group of experts
advisory field from all sections of the country
which, each week,

they to be regarded,

Louisiana Securities

Securities

and

Miami

Listed

.

.

.

Atlas

Sold

—

Quoted

—

erates

retail

stores

The

share. The company has no

leased

and

New York Hanseatic

growing South and West.
sewing

machines

and

Corporation
Stock

120 Broadway,

Exchange

1954

their

New York 5

BOSTON

•

CHICAGO

PHILADELPHIA

•

SAN FRANCISCO

to Principal Cities

Wires

own

opened
retail

first

only

store

Members

company's products are sold
to the consumer and the
accounts
receivable
installment
direct

had

growth factor, Atlas Sewing Cen¬
ters, Inc. common stock, which is
now available at around $8.00 in

York Stock Exchange

Stock

Exchange

BROADWAY, NEW YORK 5

120

TEL.

REctor 2-7815

Over-the-Counter

the
an

Net

and

Industries

Furniture

Bassett

1955

year

Furniture

were

73

at

cents

to

per

STRADER and COMPANY, Inc.

year

$1,093,543
$1,984,874

$5,457,160
$7,474,183

$432,592
$631,914

$2,875,401

$7,820,588

$593,432

'

increase

Falcon

Seaboard Drilling

McRae Oil

of

65Tc.

the

Recently
in

a

park

new

East

Texas.

was

The

ded¬

Artists

light of the ceremonies came as
time capsule was sealed, not to

Corp.

be

&reewecmdCompcmi\
ESTABLISHED

years.

it,

Tel. HAnover 2-4853

bits

away.

of

duces

shares

heart

,

Y.

Exchange

Lone

Star

the

oil

stock.

try

it

and

mate"

of

reported,

^

Sterling Oil

shares will be

worth

Seminole Oil

Livingston Oil
Acoustica Assoc.
Western States
Herold

Refining

Radio Pfd. & Com.
•

•

•

•

100

the

"that

over

$1,000,000 by
the

the

time

R. Daniel

ambitious
estimates
been surpassed to
thought to scoffing now.

many

have

give

already
any

Lone Star Steel is a

CAPPER & CO.
(Members

I

Salt

Lake

Stock

Exchange)

Exchange PI., Jersey City, N. J.
N.

Direct

Teletype JCY 119
Y. Telephone Dlgby 9-3424
private wire to Salt Lake City




Littlejohn

capsule is
opened." Just Texas-talk?
May¬
be, but to those of us who follow
this interesting situation closely,
too

completely

integrated steel company.
It is
a government
and RFC stepchild
turned dynamic by some aggres¬
sive Texas businessmen, most of
whom
steel

had

plant.

Germany,

a

from its
miles

30

Its

the

behind these facts.

oil

and

gas

75%

drilling activ¬

ity in the country lies within 500
miles of its door, and it is the

newspapers

^

rS>

ore

than

producing indus¬
fascinating fu¬

gas

serves.

ture lies

the

iron

less

150

than

Strategically located in me
the oil country, it pro¬
principally tubular goods for

"Bankers esti¬

Orders Executed on Salt Lake Stock

less

of

Steel

37 Wall St., N.

fields

deposits

items,
placed

were

from its

its coal comes

coal

never

seen

inside

a

Among them is E. B.

former oil man, who

only steel plant in the area pro¬
ducing this
particular
type
of
product. Lone Star currently sup¬
plies just 15% of the market in
this area, and could easily cap¬
ture
a
bigger share
if supply
could

increased

be

All

mand.
served

of

its

to

meet

customers

de¬
are

by short-haul truck freight,

giving it

a

transportation advan¬

tage over its competitors of $8 to
$10

*-

Lone Star's

port or
Here

the

we

found

On

are

and

in

even¬

in

more

the

Inc. com¬

Centers,

The company's

emotional
such

projec¬

factors

of

Securities

the

TRANS-CANADA
LINES

PIPE
,

'J

Limited

WISENER

COMPANY

AND

73 King

Toronto, Canada

St. West

Trading Dept.

EMpire 3-8204

-

possibili¬

INC.
37 Wall Street,

outstanding
2,yu*,oU0
snares
of
common with $o6,oUU,000 oi mort¬
trades

stock

The

ment.

Dealers

the

in

New York 5, N. Y.

Underwriters—Distributors

indebtedness to the govern¬

gage

Over-the-Counter Market and has
had

Investment Securities

1957 range of 26 to 43.

a

at

arrive

To

the

about

conclu¬

valid

a

stock, these

facts

weigh importantly with me. 1956
earnings were reported at $3.84
per

Canadian and Domestic

share, more than double the
year's
$1.80.
This

previous

amounted
sales

an

leaders

a

as

on

eacn

50%

the

than

return

better

profit

impressive

lie

to

dollar,

industry

obtained, and

group

singularly the best return of any
company in the industry.
Obvi¬
ously good management, both pro¬
duction and executive, and this

*?

s

||3lS £

mm a

management says even more

same

be ef¬
show they
mean
what they say, first quar¬
ter earnings were a record $1.25
operating

per

economies will

this

fected

To

year.

share (13c per sales dollar)
President Germany states,
successive quarter indicat¬

with,
each

ing even higher earnings than the
previous one. Giving effect .to a
10% stock dividend paid April 1,
earnings of $5

wards

per

for

now

share are in¬

1957

as

a

gonna

you

earn"

lawyers

not
me,

Quotation Services
for 43 Years

with estimates varying up¬
considerably from there.

"If I told

"the

Over-the-Counter

mini¬

so

let's

what I think we're

Mr.

Germany

might

say

get

National Quotation Bureai
Incorporated

says,

mad

Established 1913

at

something hedgy.

reports.

April 1, 1957 there became

Burns Bros; & Denton

headquarters

Miami, Fla.

located in

mum,

can

concerned with

earnings

AH

vacuum

seen

future,

tions

amazing growth

in the annual re¬
statistical service reports.

readily be

Maintained

Trading Markets

Firm

States. For

interesting

offers

dicated

ton.

a

of

sion

the dollar."

on

Today

own

other

100

1930

In

ovens

Price: "less than two-

miles away, its

among

coke

and

which formed the nucleus of the

own

opened for

100

furnace

operation.

high¬

when

was

blast

Bankers

low-priced growth
above-average
quality,

.

Presidency

to

machines and

Sewing

ties.

company

group

a

United

organization

sewing

mon

was organized.
His
the highest bidder for
government built, World War

tne

II

the

Investment

Broadway,N.Y.6 COrtlandt 7-5680

LIMITED

are

increase of 55';

Branches

70

goal of this young and

stock

$593,432$

over

<&

Ltd.

1897

—

those seeking a

$383,675

iAn

took

Longview, Texas

icated

Radiation, Inc.

-

cleaners in the United

$7,820,588f

*An increase of 487r.

LITTLEJOHN

Lone Star Steel

& Gas

earnings.

of

$5,286,930

$1,747,218
$2,875,401*

Stockbroker

■

Industries

approximately 5%, and it is avail¬
able at about 5 Mr times estimated

Atlas

DANIEL

Brokers

111

Tokyo

Office

the cash dividend of

upon

tually become the leading retailer

$102,294

'"An

Trading Markets

based

aggressive

$3,393,576

months) 2/28/57

Established
Home

levels, Atlas Sewing Centers, Inc.
common offers a generous income

660,951

R.

Advance

the "common, and
1957,.- a 10% stock
was
paid.
At present
on

dividend

Net Earnings

9 Mos. Ended 2/23/57.__

TWX LY 77

share/

of

Net S-'les

$

Yamaichi

Securities Co.,

January,

problems

Net Worth

/'

write

re¬

the annual rate of 40 cents

at

in

FINANCIAL STATISTICS

COMPARATIVE

or

Dividends Z currently

$4,636,735.:

It is the

9 Mos Ended 2/29/56___

Lynchburg, Va.

Atlas

1957,

28,

Feb.

of

As

and a simplified
products to offer to an
ever-increasing
market in
the
most rapidly growing cities in the
country, Atlas is not only engaged
in a growth industry but is also
conducting a business that has

share

$1.00 per share for the

Call

economy

ing

the

Year

Commonwealth Natural Gas

and

years

economy.

ported working capital of $4,195,000 with current assets of $8,832,535
and
current
liabilities
of

per

1957 (9

Insurance Co. of Va.

LD 39

improved Japanese

partments for its 40 stores.

chandising that have been proven
successful.
With no manufactur¬

is

efficiency

to

handling the company's grow¬
ing collection
and auditing de¬

are

1956_____

Life

uted
in

of mer¬

issued and out¬
reported for the

shares

Uni¬
vac
equipment to be installed in
Florida. This system has contrib¬

practically

at

he stirring due

For current information

management

large-scale punch-card

lo

appear

in its Miami admin¬

line

adjusted

earnings

standing

American

Market,

in methods

trained

been

interesting speculation.

present

Trading Interest In

now

electronic computers—the

Univac
first

The

10

Atlas

alert

The

and

lina; Tennessee; Texas; Utah;
Virginia.

Baren

S.

During 1954 when the
15 retail outlets, a
paper is financed through a re¬
planned expansion program was
volving credit loan of $5,000,000
initiated; By fiscal 1956, 28 stores
with a leading New York bank
were in operation and, during the
and 35 Southern banks.
present fiscal year, 12 new outlets
The management has created a
have been added to the chain.
sound
organization
of regional
For the investor that is seeking
supervisors and experienced store
a
young company with a strong
personnel. and these people have

frfcPONNELL&fO.

remaining

stationary levels for three

istrative offices Remington Rand's

company

SCRIP

constantly.

on

Carolina; Oklahoma; South Caro¬
Win.

years ago.

American

Georgia; going

STOCKS
afler

to

has installed

who

New

the
following
Alabama; Arizona; Arkan¬

Florida;

offices

JAPANESE

Testing,

cleaners.

vacuum

siana; Mississippi; Nebraska: North

their

Since 1917

advanced fea¬

most

modern styling that are

improving and re-styling of mod¬
els to keep pace with advances
in this
competitive industry is

in

Colorado;

branch

our

also

products

company's

tures and

Indiana; Kansas; Kentucky; Loui¬

has

g g r e s sive
management

&

The

combine the

and

sas;

wires to

Direct

been

a

RIGHTS

Birmingham, Ala.
Mobile, Ala.

available in both sewing machines

States:

growth

New Orleans, La. -

penses in these days of climbing
living costs is growing steadily
throughout the country.
«

current year, 12 new
and the

departments

NY 1-1557

HAnover 2-0700

both as a hobby and as
means of reducing family ex¬

a

American Stock Exchange

19 Rector St., New York 6, N. Y.

sewing

expansion - minded
management
now operates 40 stores and leased

fostered by an

Specialists in

Members

depression proof charac¬
teristics.
The
interest
in
home

of this busi¬
ness

Private

Steiner, Rouse &Co

certain

the

in

During the

trade-marks.
The

Longview, / Texas.

outlets have been opened

under

sold

Teletype NY 1-40

WOrth 4-2300

to

specifi¬
cations
and

Member

Associate
American

Daniel

—

Members New York Stock Exchange

is considered the
retailer of sewing
United States.

largest

machines

their

Established 1920

funded

no

third

man¬

ufactured

R.

Bought—Sold—Quoted

Co.

Steel

Star

(Page 2)

Today, Atlas

vacuum

cleaners

(Page

'

Littlejohn,

year

preferred and a single
class of 1,000,000 shares of au¬
thorized common, of which 594,000
are now issued
and outstanding..
debt,

company

retails

the

1957, net earnings
will total $1.35 per

taxes

after

op¬

departments in 19 States through¬
out the

that for

Fla.

Beach,

ended May 31,

Sewing Centers, Inc.

40

estimated

is

Miami

Lone

28, 1957, net earnings after
were
$1.00 per share, and

it

Sewing Centers, Inc.

Atlas

Bought

Inc.,

taxes

Feb.

Inc.

Comnanv,

Beach, Fla.

S. Baren, of Atwill & Co.,

,2)

ended

For the nine months

1956.

WILLIAM S. BAREN

Atwill

Unlisted

liam

are not intended to be, nor
offer to sell the securities discussed.)

as an

Alabama &

Inc.—Wil¬

Centers,

Sewing

Atlas

(The articles contained in this forum
are

Participants and

Their Selections

a

participate and give their reasons for favoring a particular security.

Public Utility

Week's

This

Forum

46 Front Street
CHICAGO

Continued,

on

page

58

New York 4, N. Y.
SAN

FRANCISCO

Volume

185

Number 564G

.

The Commercial and Financial Chronicle

.

.

(2727)

3

r

Factors

Affecting Availability
Of Capital for Electric Industry

Articles and News
—Isaac B.

Business

Partner, Kidder, Peabody & Company, New York City

The

utility industry's outstanding

growth record, averaging 8% per year as against 7% for
chemicals, and the excellence of the industry stockholder-wise,
but

warns

no

should be

one

'i"v

inflation than utility management and stockholder. » The
investment banker refers to losses in past two-three weeks in
sale of new bond issues, when step-by-step retreat in
declining

I "Ai

Implications

market

not fast

was

weakness

growth

of

to

earnings

compulsory competitive bidding.
share of

Securities Make

Population

and

Income

>

increased

9

tive engineer recruitment.

,

ig

_

nearly

vestment

four

We

in¬

the

years

in the

investment

industry had
to listen to the charges the Gov¬
ernment
brought against us ior
•allegedly mo"

have

nopolizing the

performance.

financial

customers to whom

e r w r

banking

Mr.

excellence

Commodities—Roger W. Babson___

17

Surplus

fited

iting

18

18
19

._

PACIFIC

•

19

URANIUM

LISBON

tional

vig¬

the

orously com¬
petitive
at¬

But

to

demand

URANIUM

suited

get

AlUtl

(

A

1

the

would

not

Government.
ourselves

have

After

and

to

as we were

-to

ourselves

speak

about

in years,

[dismissed

the

about
the

for

for

case

lack

of

going

whom

chasing

buy

also

do

well

stocks from

more

endeavor

to

appraise

I

us.

For
the

ability

shall

And

of

turn

to

now

the

main

the

to

ability of capital for the electric
industry. The industry has come
age.
The improvement in its

of

financial
years

status

in

the

last

20

is graphically illustrated by

^the

substantial upgrading of
^ratings of your bonds. For

the
ex¬

ample, in 1937, Moody's classified
20%

of its

and

22%

Ba

bonds

as

ratings

as

substandard,

Baa; by 1957 all the
had disappeared and

with

87%

of

electric

now

rated

with

58%

A

in

utility

or

better

bonds

are

compared

1937.

"An

tric

address

by Mr. Gordon

before

the

pur¬

dollar

A/-.

I

guides

and

purchasers,

with

of

our

about

purchases of Soviet .bonds'.
Incidentally,
these
mandatory
were paid for through
rate

of

month's pay for every

thoroughly
boasted

that

indoctrinated

that

wonderful
in

the

this

boon

it

system

for

the

provided

for

about

12. The
guides

had

few

a

Khrushchev

they

weeks
in

clared interest

a
on

was

their

a

old

must

have

ilwhen

de¬

wonder

how

guides will explain the bond

situation

Annual Meeting of the Edison Elec¬
Institute, Chicago, III., June 4, 1957.

now

National

Still

Do

It?

that

their

Continued

See It

Business

Man's

on

dreams

page

Spencer Trask & Co.
Members

New York

Stock Exchange

TELETYPE N. Y. 1-5

•

!

•

Nashville

Boston
•




•

Chicago

Schenectady

•

•

Glens Falls

Worcester

Sprague Electric Co.

37

Singer, Bean
&

53

72
67

____

Recommendations

Mutual

NSTA

Current

Business

News

.__

___________

Funds

About

Banks

and

8

;

—

Bankers

Observations—A.

Wilfred

Our

Reporter

Direct Wires

Our

Reporter's Report

Public

Utility

May—_______—

4

Prospective

—------

Security

-■—-

—

Offerings

^

—

Corner—

Market

Security I Like Best

The

State of Trade and Industry..

Washington

.

and

You—By Wallace Streete

Twice

Copyright

Reg. U. S. Patent Office
B.

Park

DANA

Place,

COMPANY,
New

REctor 2-9570

__

York 7,

N.

as

Possessions,

in

statistical

state

and

Other

Chicago

issue

corporation
city news,
Offices:

3,

111.

—

market
bank

news,

quotation
clearings,

etc.).

135

South

Pan-American

Union,
Canada,

La

of

Other
Bank

$40,000

Salle

St.,

2-0613);

and
per

Note—On

the

(Telephone STate

Prospectus oh Request

rate

m V. FRANKEL & CO.

Rates

United

Territories

Dominion

records,

3;

25, 1942, at the post office at
New
York, N. Y., under the Act of March 8, 1879.

Other Countries,

Every Thursday (general news and ad¬
vertising issue) and every Monday (com¬

Uranium

second-class matter Febru¬

Subscription

1957

Pacific

Eng¬

Y.

WILLIAM .DANA SEIBERT, President

13,

C.

ary

to 957G

SEIBERT, Editor & Publisher

Thursday, June

E.

by William B. Dana
Company

Subscriptions
HERBERT D.

Radorock Resources

1957

Reentered

Publishers

4
72

1
Diapers' Gardens, London,
land, c/o Edwards & Smith.

FINANCIAL CHRONICLE

Sabre-Pinon

2

—_——_—

Weekly

Quinta Corp.*

64

20

—___

You___

and

Universal Transistor*

69

53

The

.

Corp.

60

The

.

Isle

49

Registration

Salesman's

Belle

71

—__——

Securities
in

Dallas

'

....

51

Securities.-.——.

Securities Now

Security

Chicago

to

Los Angeles

14

;

Governments—

on

Exchange PI., N.Y.

Philadelphia

68

Notes

inc.

•Teletype NY 1-1825 & 1-4844

13

Activity.—

40

8

Sterling Weakness"

70

of

Mackie,

HA 2-0270

12

plete

Albany

Pet.

\

Cover
___

From Washington Ahead of the News—Carlisle
Bargeron.___

ST., NEW YORK 4, N. Y.

TELEPHONE HAnover 24300

45

Indications

25

BROAD

San Jacinto

v

71

Bookshelf

Einzig: "Unseasonal

WILLIAM

25

Corp.

>

32

(Editorial)-.

Dealer-Broker Investment

PREFERRED STOCKS

specialized in

215

Pacific Uranium
12

Coming Events in the Investment Field-

Published

have

Belie Isle

Conference

(Boxed)

The COMMERCIAL and

For' many years we

Industrial

_

the bonds would
I

JCY

49

21

\
Bank and Insurance Stocks____^____

Mr.

short ukase,

discontinued.

be

ago

Industry—Owen Ely

HEnderson 4-8504

Teletype:

Regular Features
As We

Railroad

shock

a

Exchange PI., Jersey City

31

____

Analyzed at

Forum

They

workers

age.

What

1

to

interest

statements

interpreters

at

Salt Lake City Stock Exch.
Spokane Stock Exchange

DIgby 4-4970

Unconvincing Retort (Boxed)

purchases
one

'•■■'

Boni,

Can

their

check-offs

'

Members

28

Watkins, Jason & Company_

An

businessmen

listened

satisfied

'•

request

Wholesale

of

bond

on

J.F.Reilly&Co.,Inc,

26

Trend to Risk-Cushioning Joint Subsidiaries Not
Accelerating
Despite Potential Advantages, According to Study by

de*

potentially thrifty
not saving at all. i
%
of

24

,___

Labor

of

'

»* •

Kennedy Re-Named President of Edison

Inflation

Board

•"; •

Consumer

on

Helping Undermine

Electric Institute

Wage

'■

i''

v

•

Donald S.

meas¬

as

Bureau

other

50

the

the
25th

his

savings.
the

1939,

Index

are

Russia,
to

the

percentage of Baa bonds had
shrunk to 12V2%. In other words,

the

of

seen

of

since

Speaking

obtain

subject—the avail¬

capital

pardon me for mentioning a per¬
sonal incident. Last Fall, in a.trip

funds.

stream

supply

who has

power

by

people

opinion

to

for

rities and many

inves¬

the

that

on

Trends in the Electric Power

inflation

of

demand

the

Statistics

tors' opinion of the electric utility

industry.
depends

securL

Prices, is being discouraged from
investing in fixed-income -secu-i-

will

and

the

57%

crease

customers, to
electric industry

sell

we

securities,

threat

the

saver

ured

retail

our

fixed-income

-X-

•

22

___

The Uneconomics of Public Power and Hoover
Commission Views—S. C. Hollister

Americans

many

.

Power

Redressing State Regulation and Preserving Private
Enterprise—H. Lester Hooker
L___

inhibit

''

*Prospectus

Power

Branch, Jr

pro¬

this country as well as others,
it
has not
correspondingly

The

life.
Every
week
we
are
underwriting and distributing its
,securities; if it does well, so do

and

that

increased

ness

we;

in

so

not

METALS

QUINTA CORP.*

3

5

Government

Depends
Attitudes—Kinsey M. Robinson

Let's Face It: Businessmen Are
Private Power—Harllee

but

busi¬

our

invest

in

to talk further

important part of

dollar do

the

increased

industry

an

energy,

of

Zealots—Edwin Vennard
-

today
in practically
all
parts of the world. It has greatly

about ourselves other than to
say
that the electric power
Js

electric

-

RARE

n

Best Asset

The Private Utility's Future

exists

.

not

of

size

Judge Medina

evidence.
am

i'or

ever

*

D'Arcy Brophy___

Uninformed Public

ties through their selected invest¬
ment
channels.
Let me empha¬

our

legal bill had reached nearly $7,-

first time

;

to supply
increasing

necessary

the custom of

we

after

'000,000 and just

I

Cover

Nichols______

Generating; Dividends—Ira U. Cobleigh
Combatting the Propagandists for Socialized

of course,
inflation
and
the resultant continued deprecia-v
tion

answer

defended

'

Cover

^

Affecting Availability of Capital for the Electric
Utility Industry—Albert H. Gordon_____

vided,

business.
that

funds

seemingly

INDUSTRY

Factors

The
excellent record,
if con¬
tinued, insures the electric ^ in¬
dustry's ability to obtain the addir.

the

our

/

ELECTRIC UTILITY

The Status of Atomic Power—K. D.

its
our

have sold

we

—Thomas

Department

tempts

high quality of
Though we tell

Inflation Reduces Savings

could
told

your

by tne

had

utility
cutives,

about

URANIUM

System

Future of Power Business and of Power for
America
—Donald S.
Kennedy

stocks, that we have
them, confidentially
we admit that
they should thank
the electric industry and not us.

asked

rthey

ABOUT THE

We have been bene¬

done well for

Department of
Justice

have

WALL STREET, NEW YORK
Telephone: WHitehall 4-6551

business

common

If

Truman's

e x e

99 Wall!

Shortage?

or

Defending the Independence of the Federal Reserve
Carl E. Allen___________^____.__
-i

knowledge of 'the
the industry stocks

of

holder-wise.

un-

business.

direct

f

happier after

even

visit to

SABRE

For

.

-Obsolete Securities Dept.
99

*

"d

1

14

^

—George Cline Smithy—

<"■

Gets
a

jq

World Supply of Lead and Zinc—Richard H.
Mote

common;

"

THE HAPPIEST MILLIOHAIRE

7

Wedel

Attractive Investment Medium

an

What's Ahead for Housing:
\

healthy regulatory:'climate;
continuous education; competent management; and competi¬
per

"P*———• AND COMPANY

Reshaping Our Financial System—E. Sherman
Adams-—_____

For effective

recommends:

investors,

more

Expected

Hoadley, Jr.__

'•—James L. Sheefran

Outlook for

enough, and states this illustrates inherent

attract

of

Elusive Airline Dollar—T. Carl

Railroad
"s

■"-llCHTfHSTflH

g

Effect of Tight Money Upon
Municipal Borrowings
—Hon. Arthur Levitt
____i

of

i-r

Page

Prospects for Petroleum Both Here and
Abroad
—Augustus C. Long

u'

interested in the containment

more

^

^

Grainger

Changes—Walter E.

Mr. Gordon discusses the electric

«

Commercial Banks Offer
Interesting Growth Prospects

By ALBERT H. GORDON*

5

I N DE X

S

I

States,

and

U.

S.

Members

of

$60,000 per
$63,000

year;

per

in

year.

WHitehall

$67,000 per year.

—
Monthly,
<For6ign postage extra.)

account

of

me

of

fluctuations

Direct

PHILADELPHIA

wires

to

DENVER

in

exchange, rerasttances for for¬
eign subscriptions and advertisements must
be made in New York funds.

3-3960

Teletype NY 1-4040 & 4041

Publications

Quotation ^Record
year.

INCORPORATED

39 BROADWAY, NEW YORK 6

SALT LAKE CITY

The Commercial and Financial Chronicle
4

.

.

.

Thursday, June 13, 1957

(2728)

yield on the Average of 30
dustrial Stocks declined from

In¬
4.70

to 4.51%.

Observations

But

medal

By A. WILFRED
OF THE

THAT FACTOR
Once

more

—

IMPONDERABLE

rather twice the

or

decision's

mandate,

imple-

within the fortnight—are we

ket

as

well as

medical-wise
—of the Presi¬

dent's

series

indisposio n s,
it

of
t i

demonstrates

the

anew

vulnerability
short-term

of
A.

Wiltred

ments

*o

process,

off-

of confinement of longinvesting policy.
we again see, imponderabil-

vantage
term
As

ity has two facets. One concerns
the
unexpected nature
of the
actual occurrence of the event,
The second is bound up with the

the investing
community will react to the event
after it has actually occurred. In
the case of this week's Eisenhower

manner

which

in

such as has discouraged

liquidation in the

this . entity's
past,

and the ad-

the-calendar events,

the

And it is apart

greatest values that ever ex¬

First, because they're Amer¬
and
second
because
they

isted!

And consider the continuing represent
imponderable impact in the American

broader area of finance and

in-

dustry.
To what extent could
other existing mergers be affected?
The dissenting justices
warn that the Court is subjecting
"a good-faith stock acquisition,
lawful when made, to the hazard
that the continued holding of the
stock may make the acquisition

illegal through unforeseen developments. And that hereafter
every corporation which has ac-

quired a stock interest in another
to
corporation after the enactment of
prevail—those, who like the pro- the Clayton Act of 1914 and which
fessionals rushing to liquidate on has had business dealings with
Monday, are ill guided by the gen- that corporation is exposed retroeral thought of "loss of confidence" actively to the bite of the newly
and "uncertainty"; or on the other discovered teeth.
Future policy
hand, those who may reason that by the Government via its Antieven in the unfortunate event of ^rust Divisions policy concerning
premature change in the Presi- }he institution ot further prosecudency, continuing welfare spend- tions constitutes another, a thirding and inflation, would prevail degree, set of imponderables,
question remains as
which school of thought is to

a

stocks look like

common

skill

'drive'."

American

conviction

A

not invalidated by any
of

freedom,
and

American
productive

attribution

"cornyness."
*

*

*

Which item reminds us that the
Administration's
to

objection

strong

permitting more of the Khruinterview broadcasting here,

schev

whether

not endorsed by Sena¬

or

Knowland

tors

based

Johnson,

is

theory that this
precedent for similar

the

on

might set

and

a

activities in other of the free na¬

tions,
which because
of their
greater vulnerability, might result
infiltration.

in successful

LEADERS

THE TWIN MARKET

With

market's

the

strength

flowing in the utility and now
more particularly in the oil sec¬
tion, long-range justification is
derivable from the extraordinary

And lastly, for the stockholder growth in the nation's demand for
of alternatives being worrisome of Du Pont as well as all other energy. In the post-war 1946-'56
(according to data pub¬
to the short-term hut not to the companies, there is the market period
confident long-term investor!
imponderable of psychological lished by the Federal Reserve
World Oil and Edison
'change in the public's attitude Board,
THE UNEXPECTED FROM THE toward the market in general. Electric Institute), the nation's in¬
LEGAL AREA
This will control the ratio at crease of 59% in industrial pro¬
as

logical bullish factors. This set

Again, the primary significance
Court's ruling that
the Du Pont Company's stock inof the Supreme

terest in General Motors has vio-

lated

lies

laws

antitrust

the

in

its reminder that imponderability
remains as an ever-present overhanging factor.
With

Federal

lower

a

previously

having

Court

dismissed

the

government's charges after seven
months of hearing, how could

which earnings are capitalized,
a|>art; Jf01?1
great difficulties
of. Predicting the said earnings,

duction has
rise

of

and

been

exceeded by a

oil

a

80%

in

consumption

gain of 170% in electric
use.
Citing these data, David L.
*
*
*
Babson and Company, Investment
BEAR ARGUMENT OBSOLETE?
Counsel, point out
that these
The
bearishly
inclined,
but- above-average growth rates stem
tressed by last week's tight-money
basically from the expanding en¬
demolition of equities in Switzer- ergy requirements of our highly
land, are calling renewed attention mechanized civilization. Also that
to the ever greater competition to the year-to-year increases in elec¬
stock yields offered by the con- tric use are more uniform than in
stantly higher return obtainable the case of petroleum demand.

the
ruling have been other than from bonds. Within the past year What will be the impact in this
a
complete surprise?
And the ..
.
u
^
^
r
/
area, and between the two indus¬
company's future uncertainties the yuild on the Dow Jones Aver- tries, from the atomicizing of
involved are only beginning. How ago of 10 Highgrade Bonds has commercial e n e r g y
during the
will the lower court, pursuant to risen from 3.71 to 4.46%, while the next decade?

new

SPLIT

DECISION

ON

1 NO END IN SIGHT —
Limited

by man's imagination alone—that's the, future

for electronics.

An

eleven biilion

dollar

that could double in volume within

a

a

year

industry

decade.

Opportunities for investors?
Here

are

some

of the stocks

we

make markets in, or

find markets for—

Ampex Corp.

p. R. Mallory £ Co., Inc.

Collins Radio Co.

Packard-Bell Co.

Electronics

Sprague Electric Co.

Associates, Inc.

Giannini (G. M.) & Co., Inc.

Topp Industries, Inc.

Varian Associates

For

current

quotes,

simply contact—

Marketing Department

Merrill Lynch, Pierce, Fenner & Beane
70 PINE STREET




NEW YORK 5, N. Y.

Offices in 112 Cities

of

investing

actually

faced

with

the

The most noticeable increases took
place in industrial building and private mass housing.
Figures relative to unemployment in the latest period show
that the number of newly laidoff workers claiming unemployment
insurance declined by 7,700 to a total of 204,800 during the week
ended June 1, the Bureau of Employment Security reported.
Insured unemployment dropped by 77,400 to a total of 1,286,800 during the week ended May 26, continuing the decline that has
been under way since February, the agency stated.
ing News Record" reports.

total

The

of

Insured

212,800.

claims

new

for

employment

at

like

the

this

"Everything is said except how
page

period

last

last

time

year

year

was

stood

at

Steel

users

be cutting back on inventories for the rest

may

At least that's the way some mills are beginning to
size up the market. These mills say their customers' stocks of
steel and finished products made of steel are still high and accord¬

of the year.

ing to "The Iron Age," national metalworking weekly,
don't look for a bottoming out on inventory correction

51

and they
until the

fourth quarter.
The dismal outlook for July is pointed to as

proof that unless
part of many buyers, July
output will go into the record as one of the lowest in several
years/ Vacations and maintenance slowdowns will drag down
July production nearly as much as customer complacency.
By the fourth quarter, automotive and other major users will
be back in the market and an upsurge in metalworking activity w
will reverse the trend and swing the pendulum from inventory

there's

a

sudden change of heart on the

buildups in many industries,-declares this
The auto companies already have placed trial
model production.

cutbacks to inventory
trade

authority.

orders for new

companies are supporting current output
backlogs. For some mills, the strong
products — plates, structural and seamless pipe — are holding
operating rates at high levels. Mills heavy on sheet and strip
capacity are bearing the brunt of the easier market.
Meanwhile, steel

with incoming orders and

Steel operations in

better than in
who are pushing the

^Tune may be a few points

May, reflecting price hedging by some users
mills for delivery of July orders in June.
The looked-for comeback in

the fourth quarter .is more

than

the last four months
of the year have been exceptionally strong for metalworking. For
this reason, the mills expect a strong upsurge of orders by midSeptember. These orders, "The Iron Age" adds, will be reflected
in shipments for October and subsequent months.

wishful thinking.

For the last several years,

Iron and steel scrap

prices moved still higher

this week. The

apparently are straining to lay in a good supply of the
better grades of scrap. A strong export market is another factor
in the continuing rise in scrap prices, concludes this trade weekly.

mills

Manufacturers', wholesalers' and

retailers' sales were slightly

April while total inventories edged higher the United
States Department of Commerce noted in a current report. )
in

lower

It

stated

that

seasonally-adjusted manufacturing and trade

$55,500,000,000 in April. This was a drop of $*>00,000,000 from the previous month's level. Most of the decline centered
in sales of durable goods by manufacturers, which slipped $300,-

sales totaled

WE ARE

$89,200,000,000 at the end
Continued on page 54

PLEASED TO ANNOUNCE

WE HAVE

BEEN ELECTED

THAT

MEMBERS OF

SALT LAKE STOCK EXCHANGE
Direct

Private Wire

to

Salt Lake City to

CHRISTOPULOS & NICHOLS BROKERAGE CO.CORRESPONDENTS

CAPPER & CO.
Members

1

EXCHANGE

Salt

PLACE

Lake

•

Stock

Exchange

JERSEY

CITY,

N. J.

w

Telephone HEnderson 2-8570

on

qjx>ve that of :■'

preceding week and 76.9% higher than a year ago, "Engineer¬

overpro¬

duction already.

Continued

lifted total dollar volume of contract awards 48 %

selectiv¬

ity,
along
with
exceptionally
forthright explanation of policy
by managers of "other people's
money" is currently demonstrated
in the completely divergent ap¬
praisals of titanium metal and
uranium stocks shown by the Blue
Ridge Mutual Fund. Badgered by
its stockholders as
to why
the
portfolio has no investments in
new glamorized titanium industry,
President
Milan
D.
Popovic
frankly contradicts the acclaimed
prospects - on the grounds that
with commercial uses negligible
and
likely to remain so unless
costs are greatly reduced, the in¬
dustry is almost entirely depend¬
ent on defense buying; that its
uses,
already limited, are con¬
stantly being threatened by nick¬
el, molybdenum, thorium, mag¬
nesium, and beryllium; and that
is

expansion tne past wee* in the
major segments of industry following a let-down in output in the
Memorial holiday week.
.
<
In the automotive field, the industry is scheduling 517,000 !
cars for completion in June or an increase of 20 % over the 430,373 >
units turned out in the same month a year ago. This step, "Ward's »
Automotive Reports" states, "is in keeping with the goal to bring
the January to June auto building for the United States plants
6% ahead of the year-ago pace." In the construction industry a ;
sharp rise in awards for both private and public construction

000,000 during April.
Business inventories inched up to

URANIUM-TITANIUM
Exercise

Failures

1,206,300.

■

v.

Business

J

mental advantage

the

Industry

Index

Industrial production showed

ing race.

American

Trade

Production

Auto

and

given an additional push by
Republican-Democrat spend¬

now

the

Retail

Commodity Price Index
Food Price

souring experience capitalwise of that area's investors as a
result of that very yield rise. And
this is apart from the inflationhedging advantage of equities in
contrast to fixed-interest—a trend

ican

^

the

illness,

V;/;;Carloadings

from the funda¬
of ownership in
American industry; a factor un¬
derlined by the reaction of any
fare/ Sening at $14,000 per share, interested observer going abroad.
will Christiana now be liquidated,
Typical is the comment of Ralph
and if so will the market price's
E. Samuel, senior partner in the
discount of 11% from asset value
Stock Exchange firm bearing his
be closed up to the gain of the
stockholders?
And if so, will name, reporting on a recent trip to
Russia, "Behind the Iron Curtain
there be an extra tax levy in the

market move-

May

from

Production

Electric Output

State of Trade

the

very

ment the decision? Also taking
reminded that an imponderable into account the tax factor, will
may confront the stock market at there
be a spin-off of General
any time.
Motors stock?
May segregation
While
this possibly turn out to help increase
week's stom- Du Pont's sales to GM? How will
ach upset con- the
shareholders of Christiana
stituted a mild Securities,
the family-controlled
version-mar- entity holding Du Pont stock, now
version
mar
more

of

ensuing

market

bond

MAY

the

is

de-popularization

nent

Steel

The

other side of the
intensified perma¬

the

on

Direct

Wires to N.

Y. C. DIgby

Teletype JCY 119
9-3424-29, DIgby 9-3486-89

Volume

Number 5646

185

.

.

The Commercial and Financial Chronicle

.

Again in the growth depart¬
ment, we'd like to cite Texas
Utilities Company common which
in the 1949-56 period increased its
energy
sales
148%,
revenues

Generating Dividends
By IRA U. CORLEIGH

Enterprise Economist

Some lines

V; Motivation is now such a fash¬
ionable word that we just had to
it

use

to

you're

a

start today's article.

If

conservative and presum-

rather moderate

one.

on

Most of the

above pay out 80% or more of net
in cash dividends.

So

now

switch.

we

We'll

northeastern central and western
move

'

ably prudent
investor, what

I

to sections of the

is

!

.

panding

moti¬

your

vation for the

purchase

of

utility

c o ra

mons?

This is

thesort

-

of

question

w e

dote

be¬

on,

it's

cause

easy

an¬

logically.

swer

Sensible
r

and

esourcefu1

people
Ira

U.

kilowatt

CoDieigh

the

buy
com¬

because

mons

of

so

to

income

presently offered,
and the quite predictable pros¬
pects for enhancement of that in¬
come

by dividend increases in the
With
utility commons,

future.

dividend stability has come to be
taken

It's

much for granted.
rapidly and frequently

pretty

how

dividends
marks

.

be

can

increased

that

the

preference for, arid
popularity of, certain issues. And
this capacity to raise dividends
with some regularity has had a

country where
population and industry are ex¬
more

111%, earnings available for com¬
stock, 190%; and dividends
common
194%. That's pretty
nearly par for the course! Through
three subsidiaries, Texas Utilities
serves 72,000 square miles and a
population of over 2,500,000 in
mon

electric

utilities, selected particularly for their
capacities to pay, and increase, their dividends.
on

(#29)

rapidly.

Florida. fills this bill and there

Texas. The present
is $1.44 and quite

dividend rate

certain to be
increased this year.
The present
market j3rice of -47 indicates a

South Utilities.

at least two advances in cash div¬

retrospectively in any year of the
past quarter century.
We

special situation in utili¬

all

idends.

It is

on

As

the legitimate ex¬

an

one

ket, at these yields; and with full
knowledge that there are sure to

selling; at; 28.

in the South and Gulf South, the
West and certain industrial areas

stock in each

be

further

offerings

of

The present divi¬
dend rate is $1.60 but we think
1957 earnings may boost this dis¬
tribution to $1.75—and at 28, a

common

case.

about them

did want to
stress the stability of dividend in¬
come obtainable among the util¬
common,
listed NYSE and now
selling at 28 which, on.a $1.52 ities; and the sustained, growth in
power,
dividends and
dividend, yields currently 5.45%. earning
Of special interest, however, is market value
which has espe¬
the fact that about 20% of the
cially characterized issues of com¬
dividend for the last half of 1957 panies located in areas of rising
will be tax free; and 40% of the population, income, and industrial
dividends for
the ensuing four activity. Good utility stocks are
efficient generators of dividends,
years are expected to be tax free,
being .treated as a return of cap¬ as well as of kilowatts;
but

we

ital.
The

about

extra item we have

couldn't write

today

common

stock

Matthews With Barret

Union

of

(Special to The Financial Chronicle)

electric

utilities

unless

KANSAS CITY,

Matthews

the investment business in Kansas

City for

many years was

All of which suggests that you
at utilities today from one

King & Johnson. EdChapman has also joined

L.

man

the firm's staff.

r

Carter With McDonald
(Special to The Financial Chronicle)

AKRON, Ohio—George S. Car¬
ter has become associated with
McDonald &

Company, First Na¬

tional Tower. Mr. Carter was for¬

merly local Manager for Saunders,
Stiver & Co., with whom he had
been associated for many years.

Merrill Lynch Adds
(Special to The Financial Chronicle)

COLUMBUS,
White has

rill *

Ohio—James

possible viewpoints. Either
field for (1) high cur¬
most often found in
slower growing companies
(and
territories) where a bigger per¬
centage of net may be distributed
because there is less urgency for
enlarging generating and trans¬
mission capacity or (2) lower cur¬
rent yield coupled with a faster
growth rate, a lower percentage
of annual payout from net, but
brighter hopes for rising cash div¬

This advertisement is neither

idend in years to come.
So
if
you
accept this basic
premise which, quite arbitrarily,
divides utility equities into two
groups—the stable and the grow¬
ing varieties—then you're ready

an

The

offer to sell nor a solicitation of offers to buy
offering is made only by the Prospectus,

any

Pierce,

Lynch,

culled

be

New

on
current
selections would

accent
our

formerly with Bache- & Co.

of these securities.
;

NEW ISSUE

June 12, 1957

$75,000,000

':.T.

'uuU i.

v.-v«

Commercial Credit Company
5% Notes due 1977
Dated

Due

June 1, 1957

June 1,1977

rather

England

heavily from
and
New
York.

There's Housatonic Public Service

paying $1.40 and yielding 6.33%
at 22Ya', Green Mountain Power
paying $1 and yielding 6.25% at
16; Maine Public Service paying
$1.08 and yielding 6.10% at 17%;
Niagara Mohawk Power paying
$1.80 to yield 6% at 30. If you
presently
seek yields
approxi¬
mating 6%, about the only other
place you'll find them outside the
New York-New England area is
in the West Central section where
Iowa

Power

and
Light paying
5.71%; Iowa South¬
paying $1.28 yielding
5.82% at 22, and Empire District
Electric paying $1.20 to yield 6%
at 20; and Northwestern Public
Service at 17 yielding 5.95% on a
$1 dividend.

$1.60

ern

Copies of the Prospectus may be obtained from any of the several underwriters,
including the undersigned, only in States in which such underwriters are qualified
to act as dealers in securities and in which the Prospectus may legally be distributed.

yields

Utilities

Now

j

Price 100% and accrued interest

these

have not

been pre-

sented to you as outstanding val¬
ues or exceptional "buys" at cur¬
rent levels.
Nor have they been
offered

as

issues in

The First Boston Corporation

line

for

ma¬

Securities & Co.

Eastman Dillon, Union

jor dividend increases in the next
12

months.

The

sole

basis

for

singling out these is purely and
simply on the altitude of their
current yields.
If you start out
With the investment premise that
you should secure an immediate
return in the oi;der of 6%, then
these may .well prove of interest.
But the growth factor here is a




Merrill Lynch,

Kidder, Peabody & Co.

Stone & Webster Securities Corporation

Goldman, Sachs & Co.

Harriman Ripley & Co.
Incorporated

'

i

'

'

•

'

*.

Blyth & Co., Inc.
Lazard Freres & Co.

Salomon Bros. & Hutzler

Pierce, Fenner & Beane
s

Smith, Barney & Co.

White, Weld & Co.
'

Fenner

&

Beane, 48 East Gay Street. He was

for the selections which follow.

First, the
yield. Here

A.

joined the staff of Mer¬

look

survey the
rent yield,

formerly

with Dewey,

of the middle West.

of two

associated

Barret, Fitch, North & Co.,
1006 Baltimore Avenue* members
of the Midwest Stock-Exchange.
Mr. Matthews who has been in

we

mention, somewhere along the
line, American Gas and Electric
Co. This is the Tiffany, the Cadil¬
lac, the ermine, of the business
and if all I could ever buy and
hold was just one single utility
issue, my vote would go to Amer¬
ican Gas and Electric, this year or

Mo.—James H.

become

has

with

'

geographic origin. The best utili¬
ties, viewed from the criterion of
expanding dividends, have been

demonstrable

a

ties you might also want to ex¬
amine Union Electric Company

;yield of; 3%; - We would expect Electric became publicly held via
fine'electrics .to choose
,both a: higher price, and a higher a distribution in dissolution to
from:
Tampa
Electric
at
34% yield, this year. Of the "Favorite
shareholders of North American
paying $1.20 to yield 3.45%; Flor¬ Fifty" stocks held by investment
Company. Union Electric earned
ida Power Co, at 58 paying $1.80
companies at the 1956 year-end, $1.70 a share in 1956 and should
yielding 3.1%; and Florida Power Texas Utilities was the most pre¬
show above $2 this year, partly
and Light
at 58 %
yielding a ferred electric utility Common.
due
to
a
non-recurring
item
mousy 2.20% on a $1.28 dividend.
Other worthy Southwestern en¬
amounting to 22 cents per share
Here you are offered three ex¬
tries would surely include Gulf deriving from sale of certain coal
cellent market performers, where
States Utilities yielding 4% at 40;
properties.
the main accent is on growth. Of
Arizona
Public
Service
which
Union Electric is a big ($450
these, Florida Power and Light should increase its
$1.12 dividend million) company serving 650,000
is the biggest, serves the most
and rise above its present price of
electric customers and 35,000 gas
populous area and retains the
28; and Houston Lighting and subscribers in St. Louis, South¬
largest slice of net earnings (over
Power which should continue to
east, Central and Northern Mis¬
50% in 1956). All of these stocks
pay occasional stock dividends in
souri, as well as in lower Illinois
today sell at around 20 times cur¬
addition to the present $1.60 cash and a small section of Iowa. Some
rent earnings; but assuming con¬
dividend which is being earned
growth is visible here but the
tinued expansion of earning pow¬
with a dollar to spare.
main attractions are the tradi¬
er at present rates,
today's price
In the Southeast the dividend
tionally high payout, above aver¬
quotations would average but 13
times 1960 per share net. And in boosters this year may well in¬ age yield, and the unique feature
Kentucky Utilities, Caro¬ of partial tax-exemption.
this projected period of less than clude
four years, each issue should post lina Power and Light and Middle
Finally, we dislike to write

entry likely to move up to above
a 6%
yield basis this year.
It's
Rochester Gas and Electric now

and

As

6.25%

a

are three

pectation of expansion of earn¬
ings and dividends that people
buy these shares in today's mar¬

pronounced

yields

$1.75 dividend
yield.
•

~

T

.

i

4

*

-

'

E

v

Commercial Banks Offer
By ISAAC B. GRAINGER*

p

President, Chemical Corn Exchange Bank, New York City

I

Evidence that banking will grow over the next 10 years as it
never grown
before, and that bank stocks are due for a
"new look" and a higher investment rating, is presented by
in

banking and the solution to

and will attract

{

capital

more

career

opportunities,

1

The
seem

1

title

of

now,

have

I

defensive. J

do. not wish

to

selected

assure

the

place

this

In

the

meaning

such lengths that one
metropolitan area merges right $4,000
into the next, creating in effect
one
city. As a matter of fact, ifS-ptOOO
™

In

^nufh

.

has
the

of

b

very

cases

t

e s

H

to

little

a

there

are

just one short

—r

number

of

families

and $5,000 is expected to
With
to S/,50(i are expected to

Boston 'almost quadruple; and families
below with
over S7,500 to more than

now.

roughly

10

onIy

triple Or, takinpll families over

and

» the number ,s expected to

are,

by

years

amount

an

of

in

country

our

have

we

the

Days

200

such

years

1939!

to

up

in

growtn

marketing, it is obvious that both
and

consumer

our

loans,

all

fact

in

commercial

commercial

personal

and

banking

services, as
deposits, will develop tre¬
mendously.

well

as

Money Supply Bound to Increase
fifth and last reason for
that banking will con¬

My

thinking
tinue

growing

anticipated

the

is

increase in the money supply.

In

period

of

monetary re-.
straint like the present, deposits ;
grow very little. Last year
de¬
,

a

r

mand

commercial
1900, our population has
ol metropolitan areas asWeknow irom studies mane ici ■ banks remained almost unchanged.
more
iinn
renchintr lTil
cietincd by .the U. S. Census. Just the Federal Reserve that middle
ttlan rfniihieH
doubled, reaching liO
In such a period we are apt to
jn eflect> almost one-income" families are good bank
million early this year. It con- (|j|nk #f
overlook the obvious, and that is,
continuous city nearly 600 miles prospects. In the $3,000 to $5,000
tinues to grow at a rate of about/
if we are to attain anything like
long!
.'
'.' dd dgroup, nearly 50%
are users of
the
2.9' million per year, or about
predicted
economy
figures,:
serve
Because
they
serve
people, checking and savings accounts. In the money
240,000 per month. It is estimated.
supply must increase..
the over $5,000 group, 70%
use
that by 1965 it will be 193,300,000, banks must grow as the populaIt was interesting to note that
an increase of 17% over 1955,'But
lion increases. However, obviously; J,he.s® services. It is also in the Paul W. McCracken, a member of;
middle income" groups that we
these gross figures don't tell the such growth will not be uniform.
Council of Eco¬
find the heavy users of consumer the President's
The ingenuity of individual banks
whole story.
nomic Advisers, in a speech to the
credit. ' v .'%;:Vv
V;'.'';"'-.
in attracting these new customers
The "baby boom" which began
Mortgage Bankers Association on
will
be
one
of
the
measures.
Obviously as mass millions of
in 1940 continues to exceed the
April 17, suggested that if the,
Another will be the type of in¬ people climb the income ladder
earlier
estimates
made
Gross
National
Product
by
our
reaches,
dividual additions to a community, into the middle and upper income
$565 billion by 1965, a 50%
population experts. Last year the
ex¬
that is whether they be productive groups, banking has a great opbirth
rate
was
the
largest on
pansion of bank deposits would be,:
or
portunity to grow. On the basis
non-productive citizens.
record, and 3% above 1955.
required.
J.,
of the figures just cited, our con¬
I would, however, not want
The
trend
to
you;
larger families
Affect of Income Growth
sumer business should triple, and
to
think
I
was
recommending
continues. The number of families
A
second
reason
for
bank if we improve our marketing ef¬
such rapid growth in our money^
with two children is 100% greater
growth is the tremendous increase forts—for instance, get more than
supply, or that I was suggesting „
than in 1940: with three children,
in total personal income in this 50%. of the $3,000 to $5,000 group
that Federal " Reserve should
or]
to
become
125 % greater; and with four chil- country,
depositors—our con¬
would permit such growth.,
sumer business should increase
by
dren, 110% greater.
Prewar, our economy was typiBut I am suggesting that last
substantially more than 300%. %C
The rapid
year's
deposit situation
is
increase in family fied by the $25 per week family.
not,
typical
and
that
as
we
work;,'
Rapid GNP Increase
towards a higher economy level*
A third reason lor bank growth
our money supply—and hence the;
is
the
rapid
expansion

country's

one

1960

with disposable income of between

another

,

.

deposits

of

Since

economy

banking"

1950. and

and

families. -Between

income

decade —the

middle

of

it

express

nearly equal to the entire growth

-If

number

upper

to the suburbs has

banking is growing be- two stretches-one of 17 miles
the population is growing, .on*-' .*! - I
where you

cause

represented in

the

standard

present

our

To

"middle in- .from Colonial

prewar

Furthermore,
there has been
and will be a: tremendous increase
in

living.

way, we will expand our levels of
consumption
in
a
period
of

come" family.

to

gone

the

as

83%;

of the country,
Atlantic Seaboard,

the movement

"middle income
has discretionary

mil¬

part

Krst,

industries

great

suburban

the

:

spending power over six times as

Stages

resided,

in

ol

of

costs of
.equivalent 1940
living in the neces¬
food,
clothing
and
an

shelter, the
family now

1950, about 44%/

growth—or 11

businesses and

our

United

the
as

population

lion—took

There are indeed many reasons, of
whictu I would like to discuss

this im-

convey

pression because among ail of the

late

of

sities

of the

98%

sumption to

standard

suburbs.

parts of the metropolitan areas.

been growing so rapidly
and why will it. continue to grow?

that

of

rest
as

of the total

years

may

you

the

m

where

vestment

^

the

to

population growth was
in 162
metropolitan areas, and only 2%

the bright growth prospects and existing in¬
opportunities. He refers to pattern of substantially
greater earnings and cites study showing: greater gains in
earnings and dividends than industrials or utilities and their
closeness in current yields; and the fact that bank stocks are
selling much lower in terms of earnings per share than the
other two groups due to greater plough-back of earnings.
it does not

startling change
population statistics

In the last five years,

the market realizes, which

once

creased taxes and present

maintaining

most

by

movement

the

is

and capital problems,

lem since it offers unlimited worthwhile

the

But

Mr. Grainger contends banking will lick its recruitment prob¬

j

Thursday, June 13, 1957

.

The "middle income*' family, for sumption expenditures will be in¬
example, fell in the $1,000 to creased over present levels by
*
year grew by nearly 14.000,$1,500 income group. Now ' the $136' billion. This represents a
increase in our standard of
000, or an increase of 40%. Begin- "middle income" family is in the
'••• %
ning
in
1940,
we
had almost $4,000 to $6,000 income group. living:.
If these figures are difficult to
35.000,000 households; in 1956 the And weekly earnings of those
perhaps
they
become
figure was not quite 49,000,000; employed
by manufacturers in grasp,
clearer if I suggest that adding
and the population experts predict December of last year were $84,
$136 billion in personal consump¬
that the figure will get to 53,600,- or over three times the 1940 level.
significant, tion is the equivalent of adding
000
by 1962, and 58,000.000 by what is even more
after taking into account both in¬ our entire prewar physical con¬
1967—just 10 years hence.
revealed

the favorable factors

manpower

.

formations continues. The number
of households between 1940 and

has

well known N. Y. banker in discussing

.

last

Interesting Growth Prospects
f

Chronicle

The Commercial and Financial

<>

12730) J[

o

_

present.
lieve

I be¬

I

can

state this very

simply.
Con¬
trary
to
the
prevalent
t ho

u g h t,
banking is not
just a
stable

Isaac B. Grainger

business

—

it

is

in

addition

very

.

definitely

tiTnff

growth industry, and

a

pe°ple ale begin-

recognize this.

^as

'An

the

.

banking

address

by

Connecticut

Mr.

in

Bankers

Manchester, Vt., June

recent

Grainger

8,

before

Association,

1957.

This announcement is not

lin

offer to sell or a solicitation of an offer to buy these securities*
offering is made only by the Prospectus.

an

The

and

services.

In

1954,

pointed

President

out

national

$30,000,000

that

Eisenhower
total

our

product

could

gross

conserva¬

tively be expected to rise by 1965
a level of about $500 billion.

to

Two

Michigan Wisconsin Pipe Line Company
First Mortgage Pipe Line Bonds, 6M% Series due 1977

and

June 15, 1957

Due

half

a

as

the

School

Tuck

mouth

points

tically

100%

widely

were

publicized. Now,
Amos

passed

years

since these estimates

schedule

Dated

our

country's ability to produce goods

Dr. Upgren of
at

Dart¬

out, we are prac¬
ahead
of
current

towards

the

President's

expectation.

June 15, 1977

It

is

not
surprising, therefore,
leading
businessmen
and
economists are upping their esti¬
mates. Ralph J. Cordiner, Presi¬
dent
of
General
Electric, in a

that

Pr *ice 102 889% and accrued hiterest

speech before the Economic Club
of
The

Prospectus may be obtained in any State in which this announcement is circulated from only such
of the undersigned and other dealers as may lawfully offer these securities in such State.

New

York

estimated

Slichter, economist, has predicted
a
$570 billion economy by 1965.
And Arthur Burns last

HALSEY, STUART & CO. INC.

he

still

-was

President's

BEAR, STEARNS & CO.

A. G. BECKER

&,

CO.

DICK

&

MERLE-SMITH

INCORPORATED

$550

a

billion Gross National Product by
1965
at
1955
prices.
Sumner

Advisers,

fall, when

Chairman

Council

of

predicted

of

the

Economic

that

Gross

National Product would reach the

HAYDEN, STONE & CO.
L. F. ROTHSCHILD
BAXTER

&

&

!

LADENBURG, THALMANN &, CO.

CO-

SALOMON
~

COMPANY %

BROS. &

HUTZLER

SHIELDS

&.

COMPANY

&

BLAIR

STROUD

CO.

&,

CO.

FRANCIS

&

COMPANY

WEEDEN

INCORPORATED

R. S. DICKSON

&.

I. duPONT

&,

CO.

COMPANY

GREGORY

&

CO.

GOODBODY

JOHNSTON, LEMON &. CO.
NEW

YORK

HANSEATIC

&

CO.

&,

SONS

'

IRA

VAN

CO.

BACHE &.

BALL, BURGE &,

HAUPT &

McDONNELL &, CO.

CORPORATION

&

CO.

INCORPORATED

INCORPORATED

COURTS

whose

accept,

we
can
agree
that
going to be a tremendous
expansion In production of goods

THE

CO.

HIRSCH

&,

CO.

MILWAUKEE COMPANY

WM. E. POLLOCK

ALSTYNE, NOEL &, CO.

KRAUS

&

CO., INC.

and services. As business expands,

banking necessarily will expand
with it, resulting in like growth
for our industry.
Successful Increased

My

fourth

Consumption

for

thinking
that
banking will
continue
its
growth is the increasing ability
of

American

our

reason

business

to

market

fabulously expanding produc¬

tion.
Jnue 13, 1957.




Economists
when

we

billion

tell

us

that

reach the level of

economy,

personal

if
a

and

$600
con¬

deposits

,

banks—will!
i

of

increase.'

Therefore, I believe we can all -;
that banking is not just the
stable industry so recognized tra¬
ditionally but is a growth indus¬
try. It will grow over the next
10 years as it has never grown
before—because of growing popu.-v
agree

lation, growing incomes, growing
ability of business to produce and;
to market, and a growing-moneysupply.
However,
if
banking
is
to"
realize its potentials, and if it is¬
le provide the kind of service to<
the people and business of this '
country
that
they
need
and;
deserve, then banking must Solvetwo important problems. One is;
manpower;
and
the
other
is'
capital.
%
Career Opportunities in

Banking f

It is well known that in

banking;
recruitment:
problems, just as every other in-*
dustry has. It is not only com-*
petition with other banks down:
-

we

have

the

street.

personnel

All

peti ng I for

is that

by

I

crease

that

problems

same

no

*

of;
>

apparent-

doubt will.'
than

they,

said earlier that-

population

to

com-

women.

so

difficult

have

our

14%

be

is

supply

young

not

more

now.

1965

and

may

our

become
are

business

limited

the

men

What

estimates

there is

'

INCORPORATED

F. S. SMITHERS

we

of

greatly

young

level of $00 billion in 1966.

Regardless

djemarid

will

in-,

193,000,000. But in

period, the number of :

people in the 25 to 45 age group:
will actually decrease by 136,000.:
This

is not

an

estimate.

fact, because all
this

They

age

group

were

This

is

a

of the people in

have

been

born..

born for the most part

during the low birth rate depress
sion years. This is a most serious*
problem for banking, and ail of*
business, because at a time when;
we are going to need more people

Continued

on

page

50

Volume

H

185

Number

■

5646

f

.

.

The Commercial and Financial Chronicle

.

«■

.■

IP

J

1

(2731)

agreement that the postwar those among teen-agers and young

our

premium;

almost

are

Business implications 01 txp©cictipopaiationandincomesurgewii1 adpitsi--°n-the- ??? ^and'and the i°-it-yourseif
continue.
/
older folks, on the other.
Dad is under
•

•

Population and Income Changes
Treasurer, Armstrong Cork

-

.

expected changes in popu-

lation
ness

By WALTER E. HOADLEY, JR.*

;

The

will

three

(1) impact on
influence on public
and (3) internal opera(2)

policies;

Forecasting profitable growth and mounting problems in. the
coming decade, well known business economist postulates expected population and income changes, and evaluates what

v

these will

for management in terms

mean

tions.

^

^

of market impact,

on

.

Markets.:

future markets has been wide-

profit opportunities lie in keeping
abreast
waves

dent
most

Refers to infla¬

of

the

various

which will be

over

the

years

spectacular

tion's effect on real gains, touches on
political and economic
implications of rapid expansion of both ends of population age
scale, and notes changed composition of stock holding.

age-group

plainly evi—
ahead." The
will

waves

be

know

quently have
dicting

more

few

a

success

economic

several years

of

into the future than

months

theless, at the

from

level

a

changes, obvi¬

currently

ously

in

$5,50Q-$6,Q00

one

state with

high

any

of

gree

■tainty
the

With

de¬

c e r

If

n a

tribution
:

gement,
is

will

Such

the

course

the next 10 years,

necessarily preexplicit or implicit

some

simply

is

no

forecasting—all of
do

better

a

apologies

-As

job

won't

I

it,

see

to reach

ment

in

with

most

moving

help

the

accura¬

task

our

can

and

further

;

is

agree¬

•

„.

..

..

,

,

forecasts

the_ best

tov

„

and

me

well.

of

slightly

than 170 million persons.

this

habitants

more

In other

is

country

to have about

expected

195-205 million in¬

by

1967.

Attracting

equal attention with this over-all

_

We

probably
start

can

siderable

P_*£ P°Pulatl°n in-

...

rS&h ? £

amnn«

frnnncV

p

g-xu bhp]n?.,

®

i

•

J0 0<rcur

ii/
college
CLer- p®rsoiJs'

ortH
a,,~rQ

Prospectus may be obtained in any State in which this announcement is circulatedfrom only
of the undersigned and other dealers as may lawfully offer these securities in such State.

to

you

HALSEY, STUART & CO.

confidence

keep

BALL, BURGE &

of

r^mS" in

UUP

thp

tfnrth- fj

n

n

f

the most active

*

:
income

.

Turning
which

to

commonly

to

emerge

—

VAN

which

When

graphic
have

tive

growth
next

projections

be less

is
10

eral

but

consistently

many

the

at

also fore-

In-

years.

said

the

latter

conserva-

Neverthe¬

years.

less, there is still

a

economic fore-

just keeps

This announcement is not

fore
ence,

the

27th

Mr.

National

Harvard

tion, Bcston,

COMPANY

offer to sell or a solicitation of an offer to buy these securities.
offering is made only by the Prospectus.

$15,500,000

measures.
*

economic

activity

the

over

occur as

Georgia Power Company

ir-

an

even

First
Dated

Mortgage Bonds, 5K% Series due 1987
Due

June 1,1957

June 1, 1987

Price 102.29% and accrued interest

business
wjn

the

over

be

badly

next

decade

in(latlGJ1

by

upset

These

comments

may

good

deal

of

pessimistic.

You'll

recall

outset, however, that I
cepted some very optimistic
pectations

population

and

a

Prospectus may be obtained in any State in which this announcement is circulated from only such
of the undersigned and other dealers as may lawfully offer these securities in such State.

at
acex-

HALSEY, STUART &. CO. INC.

in¬

gains for the coming decade,

come

I

of

The

seem

certainly don't mean to be pesI'm
merely making a

BEAR, STEARNS &. CO.

simistic.
small

plea

realistic
The

for

as

all

we

general

of

face

outlook

indeed

—

to

US
us

the

is

very

but

in

GREGORY

&. SONS

be

future.

NEW

YORK

Hoadley,
Business

Business

Mass., June

School

8,

Jr.

be¬

Confer¬
Associa¬

1957.




judgment gi"owth
years

anteed

is

not

for

over

my

EVANS

the next 10

automatically

any

business

SALOMON BROS. &, HUTZLER
SHEARSON, HAMMILL & CO.

HANSEATIC CORPORATION

STERN

BROTHERS &, CO.

en¬

&,

CO.

INCORPORATED

by

&

an

The

with

pace

add the almost certain

we

couraging
address

FREEMAN

June 11, 1957.

rates

generally and profit deflation.

J

agreement among
'An

CORPORATION

distin-

bumpy—
a(jvance instead of a smooth and
steady climb, we have little reason to become complacent about
our
own
individual
business

prospects,

dependable than demo-

been

MICHIGAN

CO., INC.

& CO.

+i

work

often

are

forecasts,

for

J. BARTH

10 years,

the

come-

WM. E. POLLOCK &

CORPORATION

prospect that the increase in gen¬

widely than population,

to

H. HENTZ & CO.

DENTON, INC.

THE ILLINOIS COMPANY

ALSTYNE, NOEL & CO.
FIRST OF

conclusion
if population

income advance

ness

much less

the

BURNS BROS. &

& COMPANY

dollars

in

these general economic

bit

over

BLAIR

'projected here, no company is going to qualify as a "growth" busi¬

evaluated and discussed

seen

WILLIAM

COMPANY

this- country

One/ pretty -obvious
seems

are

considerable

&

r

among those

;

&. CO.

INCORPORATED

at a rate which
double .the num-

General business

WEEDEN

AND COMPANY

SHEARSON, HAMMILL & CO.

NEW YORK HANSEATIC

n

compiling

BAXTER

KRAUS

INC;

INCORPORATED

FAHNESTOCK & CO.

COURTS &. CO.

.somewhere in between 40 and 45

are

BURNHAM

HUTZLER

GREGORY & SONS

substan¬

our
perspective, however,
recognize that population is

panies"

BROS. &.

SALOMON

as

10-year

our

growth — even with important
gains ahead in population. Simithp i
ili n P1h e?pansion ' larly, unless income increases are
nrnHnrttw imi*£* +£*" no|]" at least matched by productivity
nf th*> nonnfaHn^Satf
i
improvements, many present
rplativpJv litfil aniage s
e
seemingly buoyant prospects for
y
te gain
25

such

.

tial growth and change ahead. To

aidAcipaJ;€d i next decade will
age dl?tnt?u~ regular—perhaps

ThP

'

The

of population and in¬
trends, therefore, with con¬

-aie
Hnn

mod¬

.appraisal

call lor *an(j

of 15^20% from the current
total

A

their sales every five to

the^next decade (used, for plan-

*purposes in- many ot
known U S. corporations)

words,

June 1, 1987

com,]10IJ y -guished by*their ability to double
tor

population

estimated

Due

1957

and

4?°w doub,5s in
moie than
years. So-called "growth com-

Forecast

a.nse

Bonds, 4Vs% Series due 1987

into

"bulge" of families

...

years.

/

.

offer to sell or a solicitation of an offer to buy these securities•
offering is made only by the Prospectus.

an

likely.

be ex¬
income !;let's

Real Income and Population

'

workers

gradually

in the middle income brackets is

come

today

general

changes

de¬

management strategy. :

A.

,

.

guar¬

despite

June 7, 1957.

WALLACE, GERULDSEN &, CO.

overr_

continued on 'page of

Price 10PA% and accrued interest

These population and income
prospects seem fairly reasonable

Moreover,

population

acceptect

r

reflect

to

from

must try to

of it.

erate

coming decade, and (2).:5now. increasing
to appraise what these
expected
continued will
changes
will
mean
lor
future
ber °t PeoPleu

1

IVIanagements should, not

rate of

a

expected

the

over

(at

Dated June 1,

age

fully

the
new
product "batting
average" in business improved,

Distinguishing Growth Companies

escape

us

some

what

on

pected

more

and

other when that same fiist child
becomes a teen-ager and bath-,
and other space becomes a

First Mortgage

also

Since

cy of cur predictions or the
cisions resting upon them.

(1)

inflation

higher income brackets.

influence
over

forecast of what lies ahead.
there

various

met

Metropolitan Edison Company

ahead..

decade

a

are

families

W. E. Hoadley, Jr.

decisions

suppose

the

be

the broad advance in purchasing
power,

already mak¬
ing decisions
of business

in

will

$4,500

per year) real income
gains/seem likely to be more
modest. Changes in income dis¬

dec¬

however,

which

brackets

at least 1%

ade will offer.

Ma

needs of the changing numbers of

individuals

$19,000,000

perhaps

of

range

a

widely anticipated

.

-

what

next

to

continued

-

.

of

excess

as

available and

20-30%

respondingly, average annual in¬
come per family is
seen to rise

current

economic-

no

are

In other

pace of recent

can

present condinumbers of families

roam

This announcement is not

are in sight by 1967.
words, total personal.in¬
come is expected to increase from
an
annual rate roughly of $340
billion at present to about $425$450 billion 10 years hence. Cor¬

pre¬

developments

long

the "right" merchandising policies
are
pursued.
In this way, the

under

casters that over-all income gains

ahead. Never¬

and

that

tions, large
buy a new home when their first
child reaches 4 to 5 years of age
—just before starting school; add
to their home or move into an-

The

It's known that forecasters fre¬

For example,"right" products

in homebuilding it is important to

.

ly discussed. Suffice it to say here
that
the greatest
market-sales-

well

opportunities for expanding markets.

on

impact of population growth

universally

So

35-40, but this inOnly
the
surrace
has
been terest tends to diminish therescratched thus far in important after until he reaches 55 years of
markets across the country in de- age—unless he's a born hobbyist,
termining
"buying
chronology,"
It will pay real dividends to
that is, to find out more precisely study consumer wants and marat what ages major and minor de- kets even more closely over the
cisions
are
made
to
purchase next decade to insure that-the
goods and services.

The

cludes personal income advances will involve rising costs as
as

"

Impact

public policies and internal operations. Dr. Hoadley foresees
income gains: accelerating demands for something "new" and;
better "quality"}
relentlessly increasing labor demands; shifting of long-term savings into institutionalized funds; and con¬

;

important to busifrom at least

standpoints:

markets;

Company, Lancaster, Pa.

be

managements

fans

7

THOMAS & COMPANY

The Commercial
8

and Financial Chronicle

.

.

Thursday, June 13, 1957

.

(2782)
memoranda

are

a

&

British

Dealer-Broker Investment

•

•

Petroleum

Water

California

Recommendations & Literature
it

understood that the firm* mentioned will he pleated
to send interested parties the following literature:

(i

,

■

J

;

'

'

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

View —Monthly

New York 6,

men's Bank

—

Yamaichi Securities

& Co. anjd ;
Incorporated—Booklet—Kidder,.Pear .,
Street, New York 5, N. Y.

West—Booklet describing in-

Chest in the Growing

opportunities in area service—Utah Power &
Co., Box 899, Dept. 2, Salt Lake City 10, Utah.

Review—Bulletin—Josephthal & Co.,

Buhl

*

$

C. Allen Business Machines Inc.

■"

on

American Bosch
son,

,

Light

J

American Gas

&

Electric

Broad

Co., 40 Wall Street, New York 5, N.

Atlas

Corporation

—

Analysis

—

Laird,

Oil

&

Gas Co.

—

105 South

Bergstrom Paper Co.
207 East

—

Memorandum

—

& Co.,

William

Electric

Company,

-

Harvey,

North

821

&

a

Witt

memorandum

previously reported as-*
Co.
:
• *;'
<
,

.

With Seligmann

Co.

(Special to The Financial Chronicle)

MILWAUKEE, Wis.

Carl R.

—

North

Street.

Water

He

was

for¬

ERADIATION INC. "A"

Stern

& Co., 52 Wall Street,

Also in the same bulletin are data on

•TAYLOR INSTRUMENT

Co.,

650

Corporation—Analysis—Shear-

South

Grand Avenue,

'SEISMOGRAPH SERVICE

An¬

Los

201

Devonshire

study—Western

Boston,

Street,

Company—Analysis—George

Birkins

*

•

Prospectus upon request
Memo

request

upon

Com¬

40 Exchange Place, New York 5, N. Y.
Power & Light Company — Report — Loewi &

straus, blosser
Co.

& Mcdowell
New York

Stores.

Midwest

American

..

,.

TRADERS

CLUB OF

40 Exchange

CHICAGO

at

the

P.

Midwest Country

Club on
11:30

at 8:30 a.m., with lunch

begin

Exch.

Place, New York 5, N.Y.

Phone B0 9-1314

The Bond Traders Club of Chicago will hold their 31st annual
day

Exch.

Stock

(Associate)

NSTA Notes
BOND

Stock Exch.

Stock Exch.

Detroit Stock

Members

Saturday, June 22.
to 2 p.m. and

Tele. NY 1-1385

Main Office:
39 South

LaSalle St., Chicago 3

a.m.

Guest fee $15.

Pollick,

Cook

Investment Company and

Adolph C.

Egner, Shearson, Hammill & Co., are Co-Chairmen of the field
day committee. Golf is in charge of Mr. Egner; baseball in charge
of Charles G* Scheuer, Wm. H. Tegtmeyer & Co.; clubhouse and

TRADING MARKETS

D. Schubert, Bacon, Whipple & Co. and
reservations and hotel reservations, Robert W. Lane, A. C. Allyn

FLORIDA

transporttaion,

Corp.

Producing Co.

¬

become affiliated
with Seligmann & Company, 735
has

Bank of Amer¬

&

Donald

Co.

golf tournament will be awarded for first, sec¬
members; first low gross, guests; first 10 low net

Prizes in the
ond low gross,

(Peoria); special short hole prize; and duffer's prize.

%

SECURITIES
Bank, Insurance Companies,
Industrials

other:

Operating Utilities

DEPENDABLE MARKETS

Northwest Production
/ Florida's

Invest in

Three States Natural Gas
•

was

Schenker &

Organi¬

Conklin

on

reference to Jewel Tea Co. and Red Owl

John

•

firm

•McNEIL MACH. & ENG.

Companies,

Wallace

dinner at 6:30.

and many

opened with offices at 120 ':

Co.

merly with Bache & Co.

Incorporated, 225 East Mason Street, Milwaukee 2, Wis. Also
available is a bulletin on the Supermarket with particular

Milwaukee Company,

Commonwealth Gas

'

Schenker >

Broadway, New York City effec- ;
live
Jtuie
1.
Formation of the •

Company—1956 annual report—

Electric

&

Wisconsin

Events

Southwest Gas

&

Western Securities Corp., 1

Massachusetts Companies—Statistical

Incorporated,;

Trading Markets i

Adolph Schenker Co.

Ray more

5, N. Y.

Massachusetts

120

Also available

Co.

&

The New York Stock Exchange

-

Michigan Street, Milwaukee 2, Wis.

•

formerly with
Francis
I.

and

geles 17, Calif.

field

Firm

—

Company—Bulletin—De

Hammill

son,

—

Lii Salle Street, Chicago 3, 111.

Pont

was

Co.

&

To Be

C. Roney & Co.,

memorandum quoting excerpts on re-

Co.—Data—Herbert E.

York

pany,

Bell & Gossett Co.—Memorandum—Blair

du

Mass.

Meeds,

Barron

Courts

Company—Analysis—Bacon, Whipple &

United States Chemical Milling

Stern, 30

Memorandum—Goodbody & Co., 115

Bulletin

Mr.

—

Adams Express.

Electric

Laird, Bissell & Meeds, 120
Broadway, New York 5, N. Y.
.
-a-'
A a a'Baltimore & Ohio—Analysis—Vilas & Hickey, 26 Broadway,
New York 4, N. Y.
—

Oil

Western

&

and

M. Floyd,
Jr., Vice-President and Secretary.

ica, N. T. & S. A.
Pure

Broadway, New York 6, N. Y.
Bank of New York

Report

President

Eldra

and

member firm of Adolph

Also available is

Motor.

Co.

Broadway, New York 5, N. Y.
Aztec

—

Barron,

W.

Treasurer,

Clark

Oil—Analysis—H. Hentz & Co., 72 Wall Street, New
N. Y. In the same bulletin is an analysis of White

York 5,

Y.

Bissell

to | engage in a
Officers are

business.

Lewis

Co., 36 Wall Street,

City 1, Okla.

Coast

Plymouth

Corporation—Analysis—Glore, Forgan

Electronics

Amphenol
&

&

Streets

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

New

Co.—Memorandum—Herzfeld
Street, New York 4, N. Y.

Gas

Oklahoma

System—1956 annual report—W. J.

Seating

American

Engineering

and

Gas

Oklahoma

Y.

Dept. D, American Gas and
Company, 30 Church Street, New York 8, N. Y.

Coroporation has

securities

Prophet Co.

on

Oklahoma

Arma—Memorandum—Green, Ellis & Ander¬

Rose, Vice-President,

Coit

and

115 Broad¬

Building, Detroit 26, Mich. Also available is a memor-

Pacific

Securities

been formed with offices at Evans

Piney Oil & Gas.

—

61 Broadway, New York 6, N.

dent

Exchange Place, Jersey City 2, N. J. Also available are re¬
ports Oil Three States Natural Gas, Delhi Taylor Oil and Big

A

Boeing Airplane Co. and Eli Lilly &

First Prov. Sees.

"\f\\ quest.

120 Broadway,
Y V v-::

:

fice.

,

—

memoranda

now lo¬
cated at the 200 Fifth Avenue of¬

Carbon

Union

ity of Chicago, $3;

Ill Broadway, New York 6,

Securities Corp.,

at the main office of L. F. Roths¬

.

;

Krasny. previously

child, 120 Broadway, is

Boat¬

Cp,, 135 South La Salle Street, Chicago. ,3, 111. Also available
L.-.is a research study of Port of Chicago & St. Laurence Sea'way—Complete study by Prof. Harold M. Mayer of Univers-

Memorandum—Aetna
N. Y.
American Bosch Arma
Memorandum — Hemphill, Noyes &
Co., 15 Broad Street, New York 5, N. Y, Also available are

U.

,

fandum

5, N. Y.
*

Analysis — Fusz-Schmelzle & Co.,

"Northwest Production— Report

Y.

dustrial

New York

-

-

D.

FLORENCE, S. C.—First Provi¬

-Mid West Abrasive Co.—Memorandum—Win.

....

joined L. F,-Roths¬

Co.

Norman

Alfred L. Vanden Broeck &

Also available is a memorandum on

i.

Machine &

ment.

Financing in1-936 by * Kidder, Peabody

National Association of Investment

Utility

child &

McKinnon, 11

Thomson &

staff

firm also has

Straus, Blosser &
McDowell, 40 Exchange Place, New York 5, N. Y. Also avail¬
able are reports on Seismograph Service and Taylor instru¬

Kidder, Peabody & Co.

Treasure

—

Northern Illinois Gas

New York 6, N.

entire

Building, St. Louis 2, Mo.

Equipment, and

' /,

Companies^rSurvey—
Companies, 61 Broadway,

—

-• -V

..

xork b, N.

McNeil

20 stocks most favored

Stockholders of Closed-End Investment

Report

Quinn. formerly a part¬
Smith, Frank & Co.
The
of the Smith, Frank

in

ner

Co.,

New York 6, N. Y.

isew

by institutional
investors—Harris, Upham & Co., 120 Broadway, New York

body & Co., 17 Wall

—

Lily Tulip Cup Corp.—Analysis—Bache &

4, n. y.

branch of their organ¬

a

ization under the management of

Mitchum, Jones &

—

Quigan—Bulletin—J. R. Williston & Co.,

Fodders

New York 7, N. Y
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 stocks
used in the National Quotation Bureau Averages, both as to
yield and market performance over a 13-vear period —
National Quotation Bureau, Inc., 46 Front Street, New York

Public Utility

a

way,

Current information

Co.

Dunham-Bush, Inc.

Co., Ltd., Ill Broadway,

5, N. Y.

firm

become

Co., 55 Liberty Street, New York 5, N. Y.¬

N. Y.

recently

Street, New York 5, N. Y.

Co

fers—Ebasco

Pocket Guide—Drscusses

the

Julian R.

Company—Analysis—Kidder, Peabody &

Carbon

mem¬

the 200
office of
member
Co., has

announced that
New York,
dissolved
of Smith, Frank &

change,

Fifth Avenue,

Angeles 14, Calif.
Coca-Cola Bottling Company of New York, Inc. — Bulletin—
John Morrissey Gray Co., 51 East 42nd Street, New York 17,

Wall

Help—Outline of services Ebasco of¬
Services, Incorporated, Dept. V, 2 Rector Street,
—

&

Co.,

&

bers of the New York Stock Ex¬

Company — Annual report —
Telephone Company, 300 Montgomery

Templeton, 650 South Spring Street, Los

Story of Outside

Japanese Stocks

Uptown Branch v
Rothschild

F.

L.

I

a

Street, New York 5, N. Y. )<

Columbian

Foreign Letter.

M. Loeb,
Inside

Co., 120

—

N. Y.

Utilities—Comparative study on 97 companies—Carl
Rhoades & Co., 42 Wall Street, New York 5, N. Y.

Electric

Memorandum

Citizens Utilities Company —— Analysis

Washington 7, D. C.

Company, 15 Broad

—

Telephone

&

Water

Aircraft

17 Wall

•:

1

Ltd., El Paso Natural Gas Co., and Daystrom, Inc.—Atomic
Development Mutual Fund, Inc., Dept. C, 1033 30th Street,

able is current

Co.

/
Canadian Superior Oil of California Ltd. — Analysis — J. A.
Hogle & Co., 507 West Sixth Street, Los Angeles 14, Calif.
J. I. Case Co.—Memorandum—Gl C. Haas & Co.# 65 Broadway,

a

(No.-27) —Comments on high energy fuels,
requirements for atomic power, United Western
Minerals Company, Vaal Reefs Exploration & Mining Co.,
Letter

Burnham

Walston &

L. F. Rothschild

Machine

New York 6, N. Y.

Euratom

N. W.,

and McNeil

gStreet, San Francisco 4, Calif.

Cessna

Atomic

Co.

V

Broadway, New York 5, N. Y.

California
;

Radio

Collins

on

Engineering,

Natural Gas Companies

Delhi-Taylor Oil

Transmission & Producing

Big Piney Oil & Gas

Golden

TRADING

Triangle

DEPARTMENT-

TELETYPE MM51
mmmmm&xmmmmmm

Special Reports

TROSTER, SINGER & CO.
Members: N.

74

Y.




Request

ALFRED D. LAURENCE
&

Security Dealers Association ' ~

Trinity Place, New York 6, N. Y.

on

Western Securities Corp.
One

DEMPSEY-TEGELER i GO.

Exchange Place, Jersey City, N. J.

Telephone HEnderson 2-1000
Open-end

phone to N. Y. C. HA 2-0185

COMPANY

INVESTMENT SECURITIES

201 S.E. 1st Ave. Miami, Fla.

Phone: Miami, FRanklin

3-7716

Volume

Number 5646

185

.

.

.

The Commercial and Financial Chronicle

(2733)

problems

The Elusive Airline Dollar

some

As

banker expects

commercial

York

be easy,

airlines' problem of

despite current declining profit margins
and break-in expenses for

of

(I hope)

and

insurance

some

thought
comfort.)

tiful

holders

policies,

Mr. Brown of Airline

large

bank

X,

insurance

(or

cash for debt retirement via depre¬

com¬

switch

airlines

the

ly

going to

be easy—

that

but

of

some

get the money for their jet age
expansion?" I will predict at the
outset that the airlines' job will

lion

graciously
provide
on
long
flights. Because airlines are, ad¬
mittedly, talking about a lot of
money, a tremendous increase in
capacity to be provided by as yet
not
completely
technologically

.

it

$387

in

in

1946

to

in

1947 to

$1.2

over

maturities, and
doubtedly solvent.
The

into

the

that

extent

the

bank's

margins and the imponderables of

to

Louis—or

jet preoperating costs and breakin expenses.
Yet one or two of

money

communities
is obtained.

American

necessary
o

the

from

nancial

been

fi¬

down

11%.

line

in

T. Carl Wedel

150 billion revenue pas¬

1956.

miles by 1970 versus only
will

spend

an

continues

traffic

"Airline

expenses

outstrip

to

profits

may

revenues

shrink

much

financial

airline

need, will form the bal¬
of this discussion.
I might

matter
how "rich"
and
successful they
are—none
of these airlines has,
point

threaten
—
airline

as

those

for

ance

to

earnings fall—losses on
horizon for 1958 some say."
"Mounting

ar¬

lars they

but

soar

successfully

vice-presidents who have not yet
arranged for all the elusive dol¬

esti¬
mated $4 billion for new equip¬
ment in the next 10 years."
"Airlines

trunklines

initial

their

dict

paltry 48 million in 1956."

1'

profit

this, what financial ground rules
they have had to follow, and
what "ground rules" we can pre¬

industry

senger
a

air¬

declining

the

jet programs.
How they have been able to do

1 0 %

the

for

yet

in

large portion of the
requirements of at

a

money

least

even

not

this

scheduled

already

new

fact

have
all

and

steadily

ranged for

income

Net

of

have

rev¬

enues up

built)

face

and,

(in

prototypes

some

especially, the
regula t o r y

"Gross

aircraft

proven

co-

t ion

p e r a

this

at

that

no

sales

he needs and how he plans
it; and (3) prove to them
is feasible

that

he

that

back

which

he

will

be

portion
wants

able

of

to

load

bank

officers

As

themselves

advised to
night's sleep too!)

get

So

that

years

haul

sure

the

air¬

competitive—so

to

dispute

the

Timbuctoo

Los

—

all

magic

Y

is

below

to

especially if he has
"buy"
money
from

—

to

say

Angeles" and it is

a

over

of

tion

so

which

will

be

examined

—

From

depreciation, which,

probably know is

the

nostaglia

—

quizzically by the banker—
attempts to answer the $64,000 (or
better—the $300 million) question
where is the money coming
from? The cash projection prob¬
ably answers the question thusly:

an

which does not require

ment

in

cash

(my

own

airplane) and that to service ade¬

Continued

quately his schedules and meet his

on

the next decade.

over

50%."
Headlines such

newspapers

Perhaps the best

recent

from

pub¬

industry

and

Hypothetical Conference

these—taken

as

verbatim

almost

nancial

the

and

company

switch

ten Seat

in

some

cusses

out

reach almost eager¬

our

Air
the

by

Mr.

May 30,

vention, St. Louis, Mo.,

major

offer

his

bankers

just

he

as

"elusive"

how

of these securities. The offering is made

any

a

or as a

solicitation of

only by the Prospectus.
June 10, 1957

$20,000,000

dis¬

The Columbia Gas

these

example, will be somewhat of

about

six

shall

of,

of

System, Ine.

Airline X, for

are.

the

American airlines

1957.

prepared

offer to sell

no

buy

we

major

—

5^2% Debentures, Series H Due 1982

say,

Dated June 1, 1957

North

J,

comparative study

Due Junc l> 1982

"

all of whose

101.363% and Accrued Interest

Price

We have

circumstances to be construed as an

is under

to

NEW ISSUE

his requirements and finds

composite

a

address

an

finance his airline's jet
is to "wire tap" a hy¬
conference
between

needed dollars

Wedel before the
Transport Association's R'-'aue* f~r
Aviation
Writers
Association Con¬

*An

and

him

want to

the sign that says

cases,

announcement

pothetical

"Fas¬
Belts—No Smoking" and,

on

to

program

investment officers,

investment bankers)

This

success¬

fully

to furnish a large share of
for the jet age (com¬
bankers like me, insur¬

money

mercial
ance

a

airline

licity releases—are of a nature to
make the men who will be called
upon

what the long
vice-president of
must go through

you

#

to show
suffering fi¬

way

on
Copies of the Prospectus may be obtained in any State in which this
is circulated from only such of the undersigned or other

announcement

Electric Utilities

dealers

giving extensive data on 97 companies, with
brief comments

on

Merrill

the stocks of those we favor.

or

brokers

as

may

lawfully offer these securities in such State.

Lynch, Pierce, Fenner & Beane

,

White, Weld 8L Co.(

Equitable Securities Corporation Ladenburg, Thalmann & Co.
v

Copies

on

request.

Salomon Bros. & Hutzler
A. G. Becker & Co.

Shields & Company

Francis I. duPont & Co.

Incorporated

Carl M.

Laurence M. Marks & Co.

Loeb, Rhoades

Underwriters and Distributors

Investment

MEMBERS

OTHER

OF

Co.

Shelby Cullom Davis & Co.
E. F. Hutton & Company

McDonnell & Co.

of

Securities

Granbery, Marache 8C Co.

The Robinson-Humphrey

Company, Inc. William Blair & Company Cooley & Company

NEW YORK 5, N. Y.

42 WALL STREET

AND

&

Burnham and Company

THE

LEADING

Private Wires to Branch




NEW

YORK

STOCK AND

STOCK

EXCHANGE

COMMODITY

EXCHANGES

Offices and Correspondents in 90 Cities

First of

Michigan Corporation

Goodbody & Co.

ex¬

pay¬

budget,

unfortunately, includes few such

moment,

will need

as you

operating

pense

when the most competitive

equipment cost only $400,000 per

and

and

more

jets are going to cost
$5,000,000 apiece (ver¬

understandable

receipts

1960—$300 million—that figure is
easy! The balance of the projec¬

good. Brown then
deep breath and explains

far,

cash

during, at least, the period 1957
through 1961 or 1962. In our ex¬
ample, let us suppose that this
shows the following: Cash needed
for equipment purchases through

St.

or

projected

cash disbursements for the airline

only

days

Airline

be

—

are

explains that his air¬
has competed for many
over most of its major longwith

begun

tried

about $2,500,000 for his
present DC-7s or Super Constella¬
tions
at
this
point
he
may
remember with a certain degree

sus

X,

routes

to

these

well

Brown

line,

worth

Brown

be

factors!

takes

good

a

in

range

$100 million,
disregard the "No
Smoking" sign!

make

will

requirements

$250,000,000-$300,000,000

has

Price of Jets

assignment—
but I think you begin to under¬
stand why Mr. Brown's training
program includes a good night's
sleep.
(Incidentally, as prepara¬
tion for a conference of this kind,
strongly

To

airline

talking about capi¬

expenditure

net

sales appeal that fills up available
seat miles and produces profitable

you can see, an easy

the

will

through 1960 and this banker, at
least, recalling that the airline's

pay

borrow.

to

tal

already

appeal of being able to

funds

the

time Brown is

at least, Brown's and
interests are paranei.

can

"Fastest

his financial plan

and

remains

Neither

to raise

that

he

he

naturally needs
piston engine equip¬

more

arranged for as
of these elusive dollars as it

many

as

here,

out

a

tell them how much

(2)

buy;

that

the

Al¬

table, neatly typed (although we
really don't care if it's typed or
not) a cash flow forecast covering

line

(even in

1960's.

the

must

this

coat

afterthought

an

in

cost

apiece..

bankers before, will then open bis
briefcase and spread out on the

bank

and

certain

if

a

the

■;>

take

and

commitments

tight money mar¬
ket we try to be polite) and sit
down
with him to give him a
chance
to
(1)
explain why he
needs all the equipment he wants

will be done,

some

at

range

able to generate the funds to pay
back these loans
already made,

him

greet
his hat

and

certain

un¬

officers

bank

cordially

still

are

these

the

tend

billion in 1956, have met all their
debt

as

mention

in

outstanding to Airline X which
have helped finance their piston
equipment, whose maturities ex¬

1956) and gross revenues from

$350 million

of

million

most

suddenly

equivalent

40

ment to fill the 1957-1960 needed
available seat mile gap. By this

loans

$600 million

over

and

$3-$4

Cadillac is produced. Incidentally,
the
bank
very
probably
has

mil¬

$1 billion in

over

Joneses
the

or the Convair 880) and he
probably need between 20

from Fords to Cadillacs,
unfortunately perhaps, but
inevitably, one of the Joneses
surely will switch as soon as a

(operating property
and
equipment alone from $165 mil¬

two

our

1946 to

from

the

from

seat

count,
will

and,

increased

have

assets

total

lion in

martinis which
airline colleagues so

the

for

airlines

trunk

their

com¬

of

cost

optimism firmly based

1956

tic

if

even

the facts that the U. S. domes¬

on

now

stewardesses, to remain

own

is

firmly fastened. Brown,
with a hopeful smile, then
bravely
completes
his
equipment
story
by adding that he must also have
a new
competitive medium range
airplane for his shorter
hauls
(such as the Electra, or the Vis¬

jets.
The bank officers cannot
help but agree with the logic of
this—an airline, equipment-wise
must "keep up with the Joneses"
if it is to survive competitively—

a

pany)— armed with a
bulging
briefcase, a good night's sleep and

as

belt

Broyra's

the decade beginning
1960, Airline X must also have

in

typi¬
cal
major
American scheduled
trunk
airline, has come into a

,

are

is

to make certain that his

evexi

petitive in

this

must be of some slight
Now back to our story;

courageous

"How

tnaa

in spite of free martinis and beau¬

(To depositors in many of
banks

our

improving airline equity market to investors and solving the
J
elusive financing problem.

not

airline

aircraft

equipment

-

and/or
service

these

much faster

so

between 20 and 30 of them. Rapid
multiplication tells
the
banker
that
already Brown is talking
about over $150,000,000—and the
banker instinctively reaches down

Air¬

and

ordering jet
equipment to

are

routes—and

champagne

Y

competition, he will need initially

using
(DC-7s,
Super G Constellations, etc.) that,

well as other financial restrictions imposed
by lenders. Contends additional funds needed will be supplied
by allowing airlines to charge a fair price for their services.
Sees as a result better earnings and dividend paying potential
charges,

Airline

a

^ame

tnese

uled.

but believes it will be done if financial and regulatory

convert their assets into

are

of

that the money he
lends will be paid back as sched^

technologically proven aircraft. In explain¬
ing the airlines' financing problems, Mr. Wedel points out that
banks and insurance companies have provided funds for a
substantial portion of initial jet programs and, in doing so,
permitted the airlines to violate the 1 to 1 debt equity ratio,
having probably in mind the rapidity with which the companies
ciation

Z

turbo-prop
these

possible

as

yet completely

can

line

just been given

some

Both

routes.

background to the discus¬

a

has

Z

foothold into

follow, I must point
probably the main ob¬
jective of a bank lending officer
(or an insurance company invest¬
ment man) is to make as certain

and unknown jet operating costs
not

Airline

others.

that

out

obtaining sufficient funds for their jet-age expansion will not
communities cooperate,

acute than

sion that will

By T. CARL WEDEL*

Vice-President, First National City Bank of New York

New

similar— although

are
more

are

9

.

Putnam & Co.

page

52

The Commercial and Financial Chronicle

.

.

Thursday, June 13, 1957

.

(2734)

10

per year.
A remarkable thing

Prospects for Petroleum

of

Both Here and Abroad

these

has

counts:

two

about these

activity

economic

in

have

We

times

been

in

extremely fortunate, thus far, on

offshore

our

having

in

first,

beneath

petroleum

is the fact that in each
countries the rapid rise

statistics

combined.

world

2.4%
dr'':"' """

perity in our history—was

to

the

of

end

equivalent
11 years' demand — the

only

lowest

and second,

reserve

demand*

—

since these calculations

intelligent conservation
laws
and
the
ingenuity, daring
and skill of thousands of men and

through

been

discovered

as we

At the

fields.,

year, our reserves were

land and

our

waters,

the

much oil

as

new

ratio

were

first

published in 1936.
paralleled by an even greater in¬
*■ I am not
crease in the consumption of pe¬
saying that the United
troleum and petroleum products. women, in being able to supply States is "running out of oil." But
During the 1948-1955 period, the the major portion of our petroleum the fact is that oil is becoming
British increased oil consumption requirements and at the same time increasingly
difficult to find in
adequate reserves for this country.
by almost 9% annually, the Swedes maintain
The ratio of dry
.

By AUGUSTUS

C. LONG*
Company

Chairman, The Texas

oil industry investment to meet
increasing world demand in the next five years, but warns that
favorable political and investment climate is necessary for
such investments and, also, profits to provide reasonable return
to induce increasingly large funds needed for capital expendi¬
tures here and abroad. The oil executive projects 1065 free
world consumption of oil rising about five times the level prior
to World War 11 and believes this increased demand will be
met primarily from foreign production, dominated^ by the
Middle East, particularly since U. S. oil reserves have increased
at a slower rate than both domestic production and domestic
Mr.

Long foresees 60 billion

demand.

Reports 100 U. S. operators are now

producing in

analyzing the course of events
since World War II, it seems to
me that there have been two de¬
In

velopments of major significance.
;
•
The first is the
..

the

that

fact

world

in¬

is

.

smaller

deed

than

it

back

in

was

;

'.? "//.y•/;

/

holes to the total number of wells

drilled has. been rising, and be¬
wells must be drilled deeper,
17%, and the West Ger¬ somewhat
different.
30%. In the U. S. Standards are to be; maintained in the cost of bringing in new re¬
over
the same period, petroleum the face of a tremendous growth serves^ is
increasing.
Moreover,
demand has risen by 5.7%
an¬ in population, if the current high experience indicates that the pros¬
nually.
'
level of industrial activity, is to be pects for discovering major new
I do not mean to imply that such
The
sustained, the petroleum requirer fields are not encouraging.

ahead,

Looking

-

picture is
If
living

the

Italians

-

made without

to

sources

could not have been
oil; there are other
of
energy
available, of

Demand

in

course.

But

1956

about 8.8 million barrels

progress

exploring or

cause

almost

mans

than 30 foreign countries.

more

national security,

16%, the Belgians more than 13%,
French
about
14J/2%,
the

the

it

could

'

not

ments of the free-world are

have

increase

was

in

States

United

the

going

sharply.

more

even

rapid or accomplished as a day; by 1960 this will .increase
reasonably with regard to cost. to about 10.3 million barrelsa
the
amazing economic progress I believe the facts make it clear
day;"and in 1965, domestic con¬
that the free world has made dur¬ that there is a direct and close
sumption is expected to reach a
ing the postwar period. Not only relationship
between
industrial level of approximately 12.1 mil¬
have
countries whose industrial
progress, business prosperity and lion barrels a day—almost 40%
machines were ravished
and the
availability of adequate sup¬ above the present level.
wrecked
by the war put these
plies of petroleum products.
An even greater increase will
machines back into working order,
As you may know, 1959 will be
occur among the free foreign na¬
they have pushed them on to new the centennial of the drilling of
tions.. Demand outside the United
heights of economic activity. This the first oil well in this country.
is
particularly true of Western. California had its gold rush in States among these countries in
1956 was some 6.8 million barrels
Europe, but it is
spreading to 1849; Pennsylvania was the scene
a day;
by 1960, this will be about
other parts of the world as well of the first oil rush
only a decade
9.8 million barrels a day; and in
—to Africa and the Far East—
later, and today there is production
and it is spreading despite politi¬ in 29 states. The availability of pe¬ 1965, it is expected to climb to
cal
unrest and what sometimes troleum literally set the wheels perhaps 14.6 million barrels a day
appeals
to be the never-ending of the American economy in mo¬ —a rise of 115% over the current
rate.
;
rise and fall of governments.
tion. As a lubricant and as a fuel,
Since it is difficult to visualize
;
It
is
obvious
that no matter oil played a major role in trans¬
been

as

'

the

'thirties.

I

not mean

sim¬

do

ply

that

we

can

now

get

farther
than

faster

ever

fore;

I

be¬

mean

that the world
has

shrunk in

people everywhere to¬
terms o f the
day are driven as never before by
A. C. Long
affairs of men. the desire to improve their lot and
A statement to
enjoy the fruits of .industrial
on Capitol Hill in Washington can
development and expansion.
be heard on Radio Moscow in a
In Western Europe, where sta¬
matter of minutes; a decision by a tistics of this kind are most readi¬
what else,

manufacturer in Bonn can change

ly available, the economic

the

has been

plans of businessmen in Bo¬
gota; a freedom fighter from Hun¬
gary can find a new life on a farm

*•/;''

'in Montana.
More

and

whether

performed
draft

by

animals.

women
use
of

like

*An
New

6,

it

address

York

more

or

by

—

not—the

Mr.

Chamber

of

lives

of

Long before the
Commerce, June

1957.

tremendous

barrels

and

of

me¬

another

greatly increased
human productivity in this coun¬
try; it brought the people of the
United States the highest standard

of

growth in

terms

put it
free
world consumption of petroleum
will have risen to roughly jive
the

times

oil,

let

By

way.

level

me

the

1965

prior

to

World

War II.

.The big

of

living in history.

two world war$
.

oil

capita basis and in terms of con¬

projected increase
in demand for petroleum will be

stant

met

to

the

Allied

victories.

Thus,

has not only helped create
our
prices—increased as follows: way of life, it has also helped
people are becoming intertwined, the United Kingdom, Sweden and preserve it.
' ■
and physical distance is no longer Belgium more than 2lk % annu¬
During the span of almost 100
a deterring factor.
ally; France and Italy more than
years, the industry has produced
The second development which 5% annually; and West Germany
about 10V2% annually.
By com¬ within our own borders about 55
I believe has special meaning is
parison, the increase in the United billion barrels of oil—or almost
we

this

question is: where is all
Moreover, in
and in Korea the the oil coming from? On the basis
of everything that we know now,
availability of U. S.,' petroleum
national prod¬ supplies was of vital importance there is only one answer to that

growth

During the

phenomenal.

example, the gross

men,
The

chanical energy

from 1948 through 1955, for

uct of various countries—on a per

;

and

years

ferring to machines the work once

States—and

this

the

during

was

greatest period of sustained pros-

twice

much

as

oil

as

has

been

produced by the rest of the free

question.

The

foreign pro¬
principally that in the

primarily from

duction.

Middle East.
He maps
factor

in

international

the

pe¬

World War

the shift to

that part

of

the

of

the world's petroleum.

globe

as

in

the major source
Proven
Eastern

the

discovered

ever

East

was

in

Texas

about 6 .billion

in

barrels.

By comparison, one of the largest

fields

oil

new

discovered in the

United States last year—the Aneth
field in southeast Utah—is - esti¬
mated

to

have

about

100

million

barrels.

Now contrast this situation with

(

that in the Middle East.
mated that

the

has about three
as

It is esti¬

Persian Gulf
times

area

much oil

as

the rest of the free world corn*-"

bined.

In

looking at the world oil
as things stand today
you simply have to face the fact
of
the dominating/position held
by Middle East reserves. ;'■> ; : ' '
Despite this, however, to further

picture, then,

diversify

their

of

sources

crude,

American oil companies are push¬

ing the search for

new

fields into

part of the world. All in
all, more than 100 American oper¬
every

ators are now involved in

tion

/•■:".r

foreign countries. v
This global hunt
troleum

money.

be

""/r/.
new

time,

of

pe¬
a

man¬

and—most importantly—
Not only must the oil be

power,

found

for

necessitates

reserves

expenditure

huge

explora¬

producing in more than 30

01*

and

there

produced,

pipelines

or

tankers

must

to trans¬

port it to established markets, and
manufacturing facilities to process
it.
During the past ten years the
world

petroleum andustry has in¬
more
than $42 billion in

significant the United States and almost
$20

most

troleum industry since

reserves

with

1930

vested

the

II has been

biggest field
country

this

Hemi¬

billion abroad. These total capital

expenditures of

billion since

$62

1946

by

far, than the
investment
program - carried
out
by anyi industry other than public
are

larger,

utilities.

*

sphere—according to conservative
If the
worldwide demand for
estimates
have quadrupled in
petroleum is to be met, it now
the postwar period and now con¬
appears that the industry will be
stitute
about
75%
of
the
free
required to invest another $60 bil¬
world total. By comparison, West¬
lion—not
during
the
next
ten
ern
Hemisphere reserves are up
years—but during the next jive
only about 60% and now constiyears, and nearly half of this must
ture only one-fourth of the world
be invested abroad.
—

jl. Chilian and Company
//

I

Incorporated

total.

This

What

Investment Bankers Since 1912
of

the

has

1946-1956

Municipal

•

Public Utility

•

Industrial Securities

f

our

reserves

share

of

dCo.

domestic
demand.
a

they have
slower rate than both
the

war,

production and domestic
example—

Last year, for

of record producing activity
this country—we consumed six

enormous

commitment

can not

climate

both

conducive
of

such

to

here

abroad

and

overseas

substantial

Exchange (Associate)

funds.

In this

connection, the seizure and block¬

of

ing

the

Fuez Canal

last year

of particular significance. It
only brought a new realization
the importance of the Middle

was

not

of

East to the Western

World, it also

emphasized the need for adherence

Are Your Records

44 Wall Street

122 S. LaSatie St.

Continued

on

page

BOSTON

Incomplete?

30 Federal St.

CHICAGO

Aurora, 111.

Milwaukee, Wis.

"FOR SALE"
Beautifully Bound Set of

Philadelphia, Pa.

"CHRONICLES" from 1938-1950

Portland, Me.

Concord, N. H.

Minneapolis, Minn.

Decatur, 111.

Moline, 111.

Rockford, 111.

Flint, Mich.

Nantucket, Mass.

South Bend, Ind.

Gary, Ind.

Omaha, Neb.

Spokane, Wash.

Kansas

Peoria, 111.

Waterloo, la.

City, Mo.

Madison, Wis.




.

Wausau, Wis.

is

investment

Exchange

NEW YORK CITY

of

be made, however,
unless the political and financial

capital

year

in

Midwest Stock

have consistently in¬

since

done so at a

/jf Member
Exchange

Our

Furthermore, while

slipping.

creased

American Stock

period?

experience
over
the

estimated free world reserves has

still

New York Stock

the

States

slipped steadily downward—from
39% to about 17%—and we are

Underwriter: Concord Fund

tun

been

United

Available in New York City—Write or

Phone

REctor 2-9570

Edwin L. Beck

c/o Chronicle, 25

Park PI. N. Y. 7

56

*

*

r

Volume

■

Number

185

5646

.

.

'

*

<-*

-

The Commercial and Financial Chronicle

.

(2735)

precedented

Combatting the Propagandists

tion,

4,578,000

pers,

"government ownership" for "public

publicly-owned utilities

f
>

:
v

We

all

are

the .."The

familiar-with

and services. It Jias become in

time the motive force behind

;

mass

.

liberate
the

move

makes

r

tional

smear

may

that

say

appeals

The extent to which it

although it must be rec¬
ognized that people respond more
readily to emotional appeals. So

sible

let's consider citizenship.

communication

and

Non-Emotional Appeals

Army, Na¬
Community Serv¬

Right after the

war,

•

•

ahd

created,
that this
served

Con-r

months,

de-

to

a

campaign

was

persuade

was

a

the public
good idfea and de¬

support.

U$0

In

was

less

than

12

household

a

Following Pearl Harbor, the Na,tional War Fuiid came into being.

labor, movement."

remarkable

a

of

our

citizens

far too

were

in the duties of
at

an

all-time

tion—had taken part in rededica¬
tion
exercises built
around
the

citizenship seemed
Following an

ebb.

-

following nine promises of
citizen:

•just

powers

from

the

(1)1 will vote at all elections.

influence

governed," active citizen par¬
ticipation is essential,-so a plap
was
developed to bring about a
of

awareness

the

hard-won liberties to

our

to

accept

that

see

capable officials

•the

greater

public

are

office

serve my

community
try thereby.

advan¬

(2) I will

em¬

develop¬

when

I

~
jury when

l.,

-

*

greatest nation of free
people in the world's history; and
further, to persuade all Americans

I will assist public officials

produc¬

That is propaganda.
When

it

comes

'

'

v

Its purpose was to -coordinate the

to

.

,

*

,

4

■

"*

*

,

""

,

*

i

can

(3)1 will respect and obey the

laws.

ment as the

•"

and

or my coun¬

serve on a

asked.

our y

honest

elected. I will

-

.

good

a
r <.

I will inform myself on candidates
and issues and will use my greatest

of

consent

d

r

in preventing crime and the courts
in giving evidence.
/
"spreading fund-raising activities of all warand our whole
i
(4) I will pay my taxes under¬
that only by active personal par¬
ideas, * the
Communists
believe related relief
organizations. Again
system of high
standing^ (if not • cheerfully). •
ticipation in the affairs of our na¬
passionately in propaganda,'and it the American
people were per¬ tion
employment,
(5) I will work for peace but
can
we
safeguard our free¬
works, I regret to say, in the un¬ suaded to
will accept my responsibilities in
contribute, this time
high wage s,
doms, preserve the liberties from
derdeveloped sections of the world. more than $200 million—a
time of war. > and
stag¬ which these
' * ;
■
, •••-; y: * ■
high But in
advantages flow, and
this country it doesn't get
gering goal in those days—which
sta nd a r d of
(6) I will avoid any group prej¬
continue to demonstrate to
the
very
far!
Dictatorships live on was reached and exceeded,
udice based on class, race, or re¬
living depends
world and ourselves that the way
propaganda, -while democracies
on
mass
~ "
'
j
pro¬
Advertising had an important of free men is best. This program ligion.
;
thrive and flourish and grow on
role in selling these ideas and
duction.
(7) I will support our system of
per¬ was essentially educational. It was
the far more rigorous arts of per¬
free public education by
But can this
doing
suading Americans to support a citizens' movement,
suasion. Here is an example of the
non-parti¬
same power
these great undertakings. And dur.everything I can to improve the
san, and non-political. It was an
difference.
schools in my community.
b e
harnessed
ing the war, the Advertising Coun¬ affirmative effort, opposed
only
T. D'Arcy Brophy
to sell ideas as
(8) I will try to make my com¬
cil marshaled the forces of adver¬ -to that which is
Voters' Response to Voting
antagonistic to
well as goods?
tising to help win all-out public the dignity and freedom of the in¬ munity a better place in which to
About a year ago in our country
live. :.y.
•■
■" :
Does the use of advertising to mparticipation in such efforts as dividual.
(9) I will practice and teach the
fluence the thoughts and opinions George Gallup predicted an ap¬ selling War
Bonds, Nurse RecruitTo focus attention on these ob¬
Of our country have a legitimate pallingly low voce in last Novem¬ ment, the
Salvagd Campaigns, and jectives, we had made available to principles, of democracy right in
ber's presidential election unless
my own home.
<
>
'
•
place in a free democracy? Has it
many others. More than a billion :
us, largely through the good aus¬
been successful up to now? Will it Get Out the Vote groups stepped dollars' worth of
These are the working tools of
advertising space pices of the Attorney
General, a
up
their activities. An alarming
be more widely used?
good citizenship, and the first of
and time .were donated to those '
priceless collection of American
apathy gripped the e 1 e c i or a t e
It may simplify matters if at the
campaigns, and all were spectacu¬ 'historical documents, which were these is to vote, regularly and inthroughout most of 1956. The pri¬
telligently, and in primary as well
outset I propose a very vigorous
larly successful.
;
carried to the
people in every
mary turnout was; down—7% less
as in general elections. - ;
\
\
affirmative to all these questions.
;
bince tne war, there have been state and in 326 cties in a special 1
than in 1952
and newspapers
The most specific negligence on
But it will be an affirmative that
the March of Dimes,
the Heart seven-car "Freedom Train." Sup¬
published pictures of empty poll¬
the part of our citizenry had been
is tempered by an important pro¬
Fund, the Cancer Crusade, Easter ported by newspapers, radio, mag¬
ing places in eities where special
Seals for
viso—namely, that we approach elections were
Crippled Children, tc azines, and other forms of mass
Continued on page 58
being held.
the American public not with
The Advertising Council locked
propaganda, but with persuasion.
ihass

tion possible—

'

mass

their

word and $16 million had' been tages we have in this country,
raised to implement its work. '
f phasizing the relationship of

(J. S.

think,

I

of

community

its
journey of
37,000
taking finished
political
freedoms
for miles, an estimated 50 million peo¬
granted and active participation ple—one third of all our popula¬

many

efforts to help our servicemen and tage Foundation to do something
women in the event of war. The •about this problem.
In a government
United Service Organization was
"deriving its

J'

-

is,

and

pos¬

program

example of how an idea can be
sold to the American people.
When the Freedom; Train had

it became

increasingly apparent that

coiii-

was

to implement this
marshal the forces

action

>■

of

presence

in each

ciples of active democracy, spon¬
sored by civic, fraternal,
religious,
and other patriotic organizations.

these

to

tirely,

ex¬

the

Train

was the signal for a local
week of rededication to the
prin¬

—

a

the

you

been

Freedom

munity

ice, National Jewish Welfare appeal by the Attorney General of
the United States, a
group of citi¬
Board, and Traveler's Aid
de¬
/'%• cided to
zens organized the American Heri¬
pool their resources and

by the enemies of

workers to

the
*

"

Beck

a

is

communication,

which

the heart
rather than to the mind. Not en¬

to mind, but there

Catholic

launched

Dave

gressional -committee

our

consumption
which

of

come

But

have

many others. A year before
Pearl Harbor, five great
groups—
the YMCA, Salvation

■

appearance

'
<

ample to

;

for

raised each

are

by persuasion.

year
.

are

country? V

and his associates before

of advertising to sell goods

power

.

strong."

It happens to be the latest

;
~

simply waiting to be harnessed to a good cause by those knowing how to persuade on the basis of admissible evidence.
Maintains the more industry learns of public relations the more
sound and

.

'

few of the great

causes

disinterested,

passive spectators into active, vot¬
ing citizens. That is persuasion!

special plead-

our

from

a

millions of dollars

were

moved

only

humanitarian

1952.

magazines, on outdoor post¬
in car cards, on radio and

were

ing, the well known advertising agency head avers the U. S.
people possess an enormous latent responsiveness which is ^

'.fsupport it will gain "for the ideas that have made

of

mention

than

television. And millions of citizens

against the "creeping threat of

as

government gobble." Opposing propaganda, and
:

:

ers,

ownership" and public ownership by shareholders in place of
private ownership is recommended by Mr. Brophy, on the basis
of Advertising Council's successful experience in obtaining
support for worthy causes, since it stresses personal involvement, the keystone to a public campaign to win appreciation
for

registra¬

more

inspired to take
on the job and
supported in their
efforts by advertising in newspa¬

By THOMAS D'ARCY BROPHY*

-

that

over

unteers who

Chairman, Kenyon & Eckhardt, Inc.

v

of

v'What brought it about? Primar¬
ily the work of thousands of vol¬

For Socialized Power
Substitution of the words

80,158,000

increase

an

11

4

-

...

arms

What is the difference? Beamed

with

146

national

member¬

organizations in an all-out
effort to get the largest possible
were
the following examples of
number of
informed citizens, to
propaganda:
:
V
register
and
vote.- The
result:
"The poor of America are being More voters went to the polls last
from

Moscow

»*V

.

k

denied

in

recent

r-*

,

Salk

>

ship

weeks

* *

,

vaccine

for

their

Election

children."
U.

"The

germ

S.

our

is

artificial

♦An

address

Annual

Electric
1957.

New Issue

June 12, 1957

in

Day than ever before
history!

$25,000,000

This

was a prodigious achieve¬
especially considering the
gloomy predictions of last spring.

for

developing

are

to

.

hurl

at

r

.-f

an offer to sell nor a solicitation of an offer to buy
of these securities. The offering is made only by the Prospectus. ,

any

ment,

hurricanes

enemy."

an

plans

warfare."

Americans

"The

25th

making

This announcement is neither

Undoubtedly the election eve
:

-

by Mr. Brephy before theConvention

of

Institute,' Chicago,

the

111.,

Edison

June

up¬

rising in Hungary and the Middle
East
some

crisis

were

responsible

Consolidated Natural Gas Company

for

4%% Debentures due June 1,1982

votes, but these events oc¬

'

-

5,

curred too late to explain

-

the

un¬

t

'

Price 101.085%

*

plus accrued interest from June 1, 1957

Copies of the Prospectus may be-obtained in any State only from such of the several
underwriters, including the undersigned, as may lawfully offer the securities in such State.

Public Service of New Mexico
White, Weld 8C Co.

Blyth 8i Co., Inc.

Paine, Webber, Jackson 8C Curtis

Equitable Securities Corporation

Harriman Ripley 8C Co.

1

Incorporated

Kidder, Peabody 8t Co.

*

Lee
Unlisted Trading Department

-

Salomon Bros. 8C Hutzler

L. F. Rothschild 8C Co.

A. C. Allyn and Company

Higginson Corporation

Incorporated

Coffin & Burr

WERTHEIM & CO.
Members New

A

~

-




R. W.

Pressprich 8C Co.

Incorporated

Estabrook & Co.

YORK

Alex. Brown 8C Sons

Dick & Merle-Smith
j

,

Laurence M. Marks 8C Co.

York Stock Exchange

NEW

Bear, Stearns & Co.

Spencer Trask 8C Co.

Reynolds & Co.
The Ohio

Riter 8C Co.

Company

,

The Commercial and Financial Chronicle
12

.

.

Thursday, June 13, 1957

.

(2736)

aid

nomic

has

been

relatively

a

of the money we have
been pouring into foreign nations.
It has been lumped with military
aid and military support.
It is
this last one that has the catch in
small part

From

Washington

Ahead

of the News

By CARLISLE

it.

is

aid

Military

Wage Inflation Analyzed
By Conference Board Fornm

to

assistance

Forum, consisting of eleven distinguished economists, analyzes

friendly nations to maintain mili¬

inflation phenomenon and current price inflation which
despite Federal budget surplus and tight monetary
balance. Summary by Conference Board's chief economist,
Martin R. Gainsbrugh, notes hope placed upon restoration

tary establishments prescribed for

BARGERON

wage

is some¬
It is closely

them.

Military support

occurred

thing on top of this.
Eisenhower, by way ing away from its partnership
related to economic aid and can
justifying his budget, has said policy as fast as it can. The poll constitute
just as much of a give¬
showed the power issue did not
frequently that the Federal Gov¬
figure in the November results. away as aid for building storage
ernment has got to spend this kind
You would have a hard time mak¬ bins, highways and power projects
of money if it
You would think
the
ing
the Administration
believe in Asia.
President

of

the

do

to

is

zation,

demand.

But

Republi¬

can

Senators
been

have

making

some

and

surveys

appre¬

opportunity wjiich they won't;
neither would they vote for any

the

ciable number
of

people
these

sored

particular

their

States; there

mixed up with the "liberals" in
made by re¬
of certain regions support of foreign aid.
It is Mr. Eisenhower's embrace
and others covering the country
as
a
whole. Their aggregate re¬ of the immigration and education
sults were recently placed before issues that is mostly responsible
Old Guard Republicans
the President at a meeting with for the
Congressional leaders. They seem labeling him a New Dealer. There
not to have made a dent on his are other reasons, of course, par¬

others

been

have

search agencies

Con¬

ference

Club, Rye, N. Y.,
for

sale

today

was

(June 13) at the offices of East¬
Dillon, Union Securities &

$1

Street at

Broad

15

Co.,

per

not

does

mean

Indeed,

recent poll of the who
reported the majority Taft.
To

of the voters in that area approv¬

ing the Administration's partner¬

policy

ship

rather

in

power

than favoring

projects,

straight out

him

made

a

Northwest

save

over

his foreign aid program

this year he had to come up with
new

a

aways

give¬
the money for

gimmick,
or grants,

economic aid is

private ownership or Government
ownership. Yet the Administra¬ approach
tion, frightened by the results of
last November's elections, is back¬

President

seems

satisfied

exactly

no

more

but

it

is

not

honest approach. Eco-

an

Halsey, Stuart Group
Offer Mich. Wise. Pipe
Line Co. 6%% Bonds
Halsey,

& Co. Inc. and
offering
today

Stuart

associates

are

(June 13), subject to SEC clear¬

$30,000,000 of Michigan Wis¬

ance,

consin

Pipe Line Co. first mort¬

pipeline bonds, 6V4% series
due June 15,
1977, at 102.889%
to be loaned. This
and accrued interest, to yield ap¬
to have fairly well
proximately 6%. The underwrit¬

Congress

gage

of

award

won

ers

the

The bonds will have

.

.

.....

developments taking place in the

ing public utility industry.

That's why

we

have

separate

a

grow¬

depart¬

prices
Part

keep

more
you

buyers for large blocks of stock

fully informed through

will

find

we

are

our

authoritative

thoroughly qualified

to

or

wish

research

understand

problems and to meet

your most

exacting requirements.

of the

109.14%

to

net

incurred

loans

construction

cordially invited.

for

expenditures.

construction

now




lower

"the

that

upward

has

of both

surge

wholesale and retail

prices in 1956

brought

again

problems
forefront

of

New York 5

Clagu.

tivity:

"The

most

eral

.

a
.

.

from

1910

2%

year.

This is for all pri¬

in

period of Fed¬

vate

He noted that

a

with

if

little

any

period of tight credit policy."
"To what extent,"

clair asked,

of

Mr. Sin¬

"have the continuous
increases

wage

been

per

rose

1947

by

trouble

point.

to

If you

will

the whole period.

paid by all consumers, including

of increase
1939.

Statistics, United States De¬

rent

dollars, including fringe ben¬

efits of all forms,
the

gains

tually

no

year, a
bor

productivity

in

War

World

have outstripped

II.

He

since

significant rise in unit la¬

costs,

and

an

accompanying

In

(in productivity) until

same

as

from 1909 to

On Real

the

line

output" per manhour

of

and the line of real average

ly earnings

are

and in 1947.
up

and

Iowa

and

Missouri,

J

following

are

highlights

of remarks made by partici¬

are

Both lines then go on

not very far apart in

On Costs, Prices, Profits:

Teletype NY 1-319

prices went

up more

unit labor costs;

rapidly than

since 1952, how¬

ever,

the reverse has been occur¬
In manufacturing for 1955-

1956, the rate of productivity in¬
crease was

costs

and

down, while unit labor
prices

were

up.

on

RAILROAD

and

MUNICIPAL

SECURITIES

•

to

Laurence M. Marks & Co.
MEMBERS

NEW

YORK

STOCK

STOCK

EXCH ANGE

48 WALL STREET,

EXCHANGE

(ASSOCIATE)

NEW YORK 5, N. Y.

31,

1957

aggregated $45,-

$3,941,304.

TELEPHONE HANOVER 2-9500

TELETYPE N. Y. 1-34*

These

page

INDUSTRIAL, PUBLIC UTILITY,

for the 12 months ended

661,007 and net income amounted

In the

early part of the postwar period

Continued

AMERICAN

of the

hour¬

identical in 1921

1956.

pants:

area.

Total operating revenues

company

years.

Earnings: When charted,

natural

pipeline system in Michigan,

manu¬

3% annual rate

ring.

rise in prices.

The

a

1939, but we've lost the war

reported vir¬

gain in productivity last

trend

that 2% is good

see

had

low

The trend from 1947 to 1956

is about the

partment of Labor, established a

in cur¬

we

a

look at the

over

the

but

was

you

labor?"

Labor

1947

line,

facturing

Clague, Commissioner of

productivity

annually;

that

about

enterprises.

1956

3.5%
is

1956

to

nonagricultural

From

responsible for the rise in prices

Ewan

Output

creased

surplus,

rounds

P"«UC:

at work in¬

spurt in prices

change in the money policy, and
in

persons

recent

occurred

has

hour of

per

Pipe Line

and operates, a

ities in that

Exchange and Other Exchanges

120 Broadway,

Ewan

of

the

into

inflation

for

property.

in progress.

Wisconsin

owns

March

Phonei WOrth 4-5000

somewhat

Sinclair said

Bal¬

Co.

Members New York Stock Exchange

American Stock

pensation, and

Mr.

session,

Sinclair

S.

em¬

ployee com¬

finance

to

supplying natural gas to 16 util¬

Josephthal&Co.
"

John

for

been

the

on

some¬

than it has

nee

Com¬

menting

ra¬

higher

of the proceeds will be used

Wisconsin,

•

Confere
Board.

was

proceeds from

gas

'

what

financing will be used by the
to pay $25,000,000 in

bank

Michigan
Your inquiries are

from

ranging

It

that

tio

company

ance

your

par.

1956

appears

prices

to

par.

the

studies,

at

102.78%

specializing entirely in public utility securities.

Whether you are seeking
to

to

'dentical.

the bene¬

ranging
from
The bonds will
also be optionally redeemable at

fund

knows the importance of keeping closely

in touch with the many new

ment

1946

the figures are

semi-annual sinking fund

a

For

decade

sue

i|;

;

at

1928.

the

designed to retire the entire is¬
by maturity. The bonds will
be
redeemable for the sinking

Keeping in touch...
manager

bonds

competitive sale yesterday (June
12) on a bid of 100.709%.
fit of

Every portfolio

to

dent of The

which proved that wages,

Pennsylvania's two Senators Action. But as I have said before
would, of course, vote for it but it has plenty of big business sup¬
this is because of the pressure of port. Had Eisenhower turned sour
on
a strong minority rather than rank
it, he would have doublecrossed the Republican influences
and file demand for it.

na¬

in the period 1922

;

clair, Presi-

factual background for the Forum

it.

and

in 1956 the

a

part of his "liberal" streak. For¬
a fact high on the
that the majority of the voters of calendar of the "liberals," such
as
the Americans for Democratic
a State like Pennsylvania support
this

But

tional income)

under the

eign aid is for

only outcry coming from the'

South.

77%

of John S.Sin-

public discussion."

copy.

ticularly his penchant for appoint¬
A humorous satire on invest¬
According to
these surveys ing Democrats to high places, and ment banking firms, individuals
what the Old Guard considers to
which have received no publicity,
and municipal bond
issues, the
be his real attitude, whether mani¬
no
one of the President's "must"
paper is highlighted by a front
fested or not. There is no doubt
projects receives approval of any¬
page cartoon showing the munici¬
either that workers in the Repub¬
thing like a majority of the people
pal bond business as it existed
lican organization have cause to
as
a
whole.
The list embraces
25 years ago when the Club was
liberalization of the immigration be disappointed over the fact that founded, and as the business ex¬
in 1953, in the flush of a Repub¬
laws, Federal aid to education,
ists today.
Advertisements, car¬
lican victory, he did not clean out
foreign aid, the pending budget
toons, editorials, and photographs
the Democratic patronage holders
and even the so-called civil rights
continue the vein of barbed wit
and give the jobs to them. It is
for
which the
legislation.
paper
is noted.
The most reliable and extensive something Eisenhower couldn't do Edited this year by Chester W.
now with the Democrats in control
survey showed 80% of the people
Viale of L. F. Rothschild & Co.,
of Congress
but he could have the
opposed to any change in the im¬
paper concludes its 20 pages
done it in 1953.
of humor with a full page devoted
migration laws.
If a vote were
The Old Guard also looks upon to the ill-fated Jacksonville bond
held in the Senate on civil rights
it would undoubtedly pass with his attitude towards foreign aid as issue,

Employee

property income 23% (of total

man

thinking.

the

Shares:

averaged

chairmanship

(June 14) at the West¬

available

be

compensation

York

New

/V'f

Statistics,

Department of Labor

Income

The Forum

which is a feature of the
Club's Annual Outing being held

will

S.

City, June 2.

paper,

chester Country

U.

Board

in

In

tomorrow

In¬

dustrial

spite of the atmosphere of
gloom pervading the municipal
demands.
bond
fraternity of Wall Street
Carlisle Bargeroo
speaking, to the Republicans so
There
have
these days, the Municipal Bond
there is political justification for
been several
Club of New York has published
the President and his party kow¬
of these surveys, some made by
its 25th Anniversary Edition oi
individual Senators and confined towing to this vote. Conservative "The
Daily Bond
Crier."
The
industrialists and businessmen are
to

by the

National

Satire Selves

Republican candidate. The Negro
vote
did switch back, generally

making

Commissioner of Labor

On

Forum, spon¬

process.

EWAN CLAGI7E

Economic

the

Municipal Bondsmen

they can't find
any

of

bargaining

economists

critics who have joined forces to investigate the
about a change in the question of wage inflation at a

Manifestly, immigration liberali¬ brought
Federal aid to education matter of economic aid would recent session
and foreign aid have their groups want to know just what is being
;v/ V
; %
of articulate supporters. But there done under the guise of military
<
is no evidence any supporters of support.
either liberalized immigration laws
or
of Federal aid
to education
voted for Eisenhower last year or
would do so in 1960 if they had

people which
they

better balance in the entire

a

Congressional

that.

things for the

of

Eleven distinguished

67

Volume

185

Number 5646

.

.

The Commercial and Financial Chronicle

.

cepted

Unseasonal Sterling Weakness
V

(2737)

is

a

of

By PAUL EINZIG

obvious fact.

rise

sterling in part to unpopularelectorate of Conservative Government and the con-

among

i comitant adverse

for/Socialists

^

psychological effect of the increase in votes
by-elections, although discounting possibility
.

at

of early advent of

uptrend iir prices occasioned by uninterrupted
theresultant

'V .*>.

■>.-

rise

trend.-'of

•tag

*

wages,

S

a

hprnmj.

■

Tn

the absence

t

-SkS tarS

;;

iL;

wages

have been

.

devaluation.

Britain

sterling

*

v

this

rtlme

.

developed
:

distinctly

a

weaker; t

-

/.the end of May;
i-arid the begin-

ning

of June,

T,h'a

Wtte.

.

.Honi ot Middle
East

oil

ments

ship-

h

tional

Coal

from

stability

brought

a s

accentuation of inflation. The Na-

Board's

the

and

raise

produced

of

ance

payments, and

Einzig

of price
price of

the

higher

impression.
keep prices down have been
able

to

induce

to

a very unfavorAll efforts to

able

b(a 1

decision

policy

Coal in accordance with the

considerable^^ has
tehef to the

to

e. to.-.acquire during May
was
disappointingly small. As it
is usually during the
spring that
is

reserve

probable
is

of

of

the

-

no

autumn'

for

cause

Owing to the

Im ^Treasury; the

reserve is

pointy Even so, the outlook is far
happy.
•

•

-i;

y.r

un-

Britain

may mean

would

balance

of

have

affected

to

payments

a

the

much

Cause

-

the

P®T

,

unpopular

May

made it clear
is still as

ever.

Even

whether

f»nd

nf

war

'

'

on

In

,

a

thank

wages

way,

we

though

business

cause

in Britain must

the ef>. quently recurrent balance of. payYet it. is ments crises. If it had not been
-

rather than the effect,

prewar year

war year or

the

of

for

depreciation

or'the first post-

now

of

basis

of

ment,

government

or

even

'

■

with

rAmnanv

MrCormiok

Wilshire

37fil

and'

Boule-.

vard.

With Livingston, Williams

A

(Special to The Financial Chronicle)

a secu-

CLEVELAND,

Ohio

&

Co.,

Building. 4

"

'

James

Livingston,!

S. Bishop is now with
Williams

Hallowell,

—

Inc.,

Hanna
" •"

v

\ >

,

t

^

J

;

,

-

This advertisement is neither
;

;

,

„

•/

;.
an

offer to sell

nor a

solicitation of offers to bay. any of these securities*

The offering is made only by the Vrospectus.

I

'■

,

"\7»

the internal

sterling

the

K\n&

M

Lester

;

,

would

;; wv,.5r,;

Not

a

New Issue

June 11, 1957

A.'t

Jbi-

"a''

900,000."Shares

Conservative

government,
to
adopt! disinflationary measures. They resorted

comparison,
That fact in itself should be acour

to

such

measures

from

time

to

Kaiser Industries

Corporation
Primary Markets
with

Common Stock

Complete Trading Facilities

(par value $4

per

share)

i

i* 'tK y

•

Public Utility Securities
Price

BONDS

•

PREFERRED

STOCKS

•

COMMON

$15.75

per

share

STOCKS
Copies of the Prospectus

may

several underwriters, including
in which such underwriters

be obtained from any of the.
the undersigned, only in States

are

qualified to act

securities and in which the Prospectus may

as

dealers in

legally be distributed.

|

Blyth a Co.. Inc.
The First Boston

New York
Boston

Detroit

•

•

San Francisco

Philadelphia

Pittsburgh

Minneapolis

•

Sacramento

•

•




Pasadena

Chicago

•

^
•

•

•

Los Angeles

•

C eveland

Spokane

San Diego

•

•

•

•

Seattle

Louisville

•

Oakland

San Jose

•

Fresno

•

'

With McCormick Co.
(sneciai to the financial chronicle)

at

with

have induced the Socialist goVern-

the year of the advent

Conservative

the

,

x

He

or

than prices, the former must abated, and by

T

offices

of simple arithmetic to for these
crises, inflation would
that, since wages have risen have been alloxVed to proceed un-

more

from

formerly

Sulzberger & Co.

.

lucky stars for the fre-

our

rl^ies
was

Blessing in Disguise

i

;

T

matter

see

'

;

L. A. Mathis Opens

MARGATE CITY^ N. J.
A. Mathis is engaging in
1

211 B North Harding Avenue.

under intermittent pressure

cinpp. tho

.

pro-

now

the

cause

-

last

government
as

V

•
V?

The by-election results towards
of

\.>

■•

fcct of the rise in prices.
a

•

that the emergency resources will be used up, so that

degree. If inflation pro- Britain will not be able to afford
ceeded at approximately the same to face a major strike. The realiextent in most countries, it could zation of this is likely to encourage
proceed with impunity as far as further excessive wages demands,

been

arguing is

the

are

.'

Effect?

or

public

question

demands

Association.

higher

;

i

.

r.ftvpmmpnMTnnnni.hr
•

the

Capper,
graduate of

the College of

the line of least resistance in face
of excessive wages demands. This

On balance the increase of wagek have attained an even more adhas been distinctly ahead :^of "that vanced stage. In itself the rising
of prices, whether we take the trend of domestic prices might not

'

end

;

,

-

.

likely to decline;below danger be the

lrom

that

further accentuated.

: Endless

gold; position,

course

anxiey.

the

come

replenished,

additional dollar facilities secured
not

a

the

concern about-the ceeding in Britain just

effect

pressure; on ; the
There

"

TSit'S

abstain from

ab

tb€1'e,\s some

■"Mr.

tiie end ot

or 6ther since

difference is merely one of degree;
But for this, wages: inflation in

trade unions its effect on
exchanges and balpressing for fur- ances of payments is concerned,
tional political, situation
appears ther wages increases. Should there
It is mainly because there is a
to have improved. The amount of
be a rise in the cost of living the difference in
degree to Britain's
gold and dollars that the Treasury
wagCS demands are bound to bedisadvantage
that, sterling
has
interna-

gold

respondents of
Capper & Co.

-

these., devices

th
doiia* facilities secured at the
>'the. .'City of
end
last
vear
'New York,
and
earlv
this !
psychological effect of the in-: But as each time they raised their yeap the
-has had 25
cold reserve would have
crease in the percentage of votes prices ^ corresponding, and more
declined bv now to crisis level •
years
experi¬
cast for Socialists at by-elections than
corresponding, -increase' in:
ence
in t h e
the deyice of borrowing had
Milton Capper
is bound to influence the tendency wages enabled consumers to-buy
i nve stment
been resorted to'for the purpose'
of sterling.; All the more so since the goods at the higher.
prices,'of strengthening the reserve^ in business specializingiiroils, min¬
recent Socialist proposals and pro-- there could be no end to the rising
anticipation of a showdown with inS and industrial securities. He is
nounccments have been far from trend.
-tA:/.:.'/ : ; ; V -ifhe trade unions there would have a member of the Society of New
confidence-inspiring.
;
,
; Jt is t
. a similai. situati0n been every justification for it. But York Security Analysts Security
Even more important than the exists also in other countries, not having secured emergency support Trades Association of New York,
Pob^ical factor is the fear of an excluding the United States. Tne to sterling, the government took and the National Security-Traders

depart

through

tne Suez Canal

the

; Salt Lake City
-will be cor-

•

e n~

dency towards,

s

waa

All.

Ex-

change. Cbrist opul os <•&
Nichols of

time .of the -year,: -the

-

Dr. Paul

;

no:

«
LONDON; Eng.—Although the there is no early
possibility of the be able to ssll their goods, would
seasonal factor is usually in favor: advent of a Socialist
government, have" had to lower their -prices/
of

•

" time- through borrowings
the Sale o£ forei«n in"3
'vestments, or artificial controls, or
vestments, or artificial controls, or.

,

-

i

tion on the balance.of. payments

would Ihav*

Iprices

rf>vprcr>rf

Stock

Admittedly, the effect of infla--

Wn

~

increases,- Vcreases", there would
contributing to
•„

in

nf

wage

inflationary economy also
«,• weakness of -sterling. ^

.m ■«- o

IhP ctahPinf

the

JERSEY
of view tbe balance of payments
JERSEY CITY, N. J.—Milton
CITY, N. J.—Milton
as having Capper, President of Capper &
been blessings in disguise—very Co.,
1 Exchange Place, has
it
h
disguised, it is true, but acquired a membership in the Salt
111 the.same/ ™ "
:
v
; La-k.e City

crises must be regarded

»

m^nta^Kd irfdue wursf

Laborite regime.-; Discusses continued

a

months

w

situation. Attributes pressure on

ity

in

lew

Milton Capper Member
Of Salt Lake Exchange

of payments would deplete
the gold reserve. From this point
ance

virion

th?PvnJiS'S fS
the
prices exceeded foi

.

solely for fear that, should
inflation be allowed to
proceed
unhampered, its effect on the bal-

-

/n,™nrt

m-D

contra-seasonal

time

those

of the higher cost

living simply choose to ignore

this

weakness, notwithstanding the fillip to balance
of payments
position occasioned by resumption of Suez Canal
oil shipments, coupled with
improved international political

But

that the rise in wages

consequence

In this week's report from
London, Dr. Einzig cites sterling's

,

conclusive.

as

who argue

til

13

Corporation

Dean Witter & Co.

Carl M. Loeb, Rhoades & C*.

Portland

Indianapolis

Blyth & Co., Inc.

•

Eureka

Glorc, Forgan & Co.

•

Palo Alto

Kidder, Pcabody & Co.

Eastman Dillon, Union Securit

Goldman, Sachs & Cp.

Hea phill, Noyes & Co,

.

The Commercial and Financial

14

aggravated by the Fed¬
policy of genera"

has been

considerable

has

contact with

ties

find

I

spread

continuous

and

communi¬

numerous-

that

the

problems

most

of

wide¬

today

are

the

cost

was

concerned

cessive.
this

we

find

ris¬

a

high
bor¬

1956 because

cost

rowing.

I

the

about

schools,

plight of mu¬
tt icipalities
unde

Hon.

Arthur

Levitt

;

,

present crecnt restraint policies of
our
government. The rising cost
of interest is
some

particularly burden¬
when added to the expand¬

ing cost of. current operations. To
these constitute the most chal¬

lenging problems faced by public
fiscal officers.

r

in
New York
supervising the
fiscal affairs of some 7,000 units
of local government. In the per¬
formance of this activity my office
gathers a great Variety of fiscal

Comptroller

State

data

is

that

and

of

maintains

close 'contact

cial community. Facts reported to
us
make it clear to me that the

is the
tion

high

of

cost

credit

is creating an undue hardship."

Many

larly
*An

municipalities,"

school

With

new

roads,

Certainly

state,

the

outlying

more

of popula¬
the city.

facilities

In

central

districts,

large

a

city.

same

outskirts

instances of

are

increases

in

public'facilities, with little
increase in population.

expect

..The

combined

has

and

effect

of

been

to

increase

'

/

f

v. y •

the

capital.

.

forcapital
outlay far
the available supply of
Unprecedented programs

capital

and

expansion by business
have
raised
the

industry

address

by Mr. Levitt before the
competition in the money market
Municipal Finance Association, St. Paul,
Minn., June 3, 1957. ••
^ % to a high level and the situation
•

;\r

•

,

-•

in

1940

"

*

■"

•

-

v.4t-J

our

-

Mr.

;

California-Pacific Utilities Company
Cascade Natural Gas Corporation

.Nevada Natural Gas Pipe Line Co.

~

has been with Morgan's

1923.

Officer

and ; Trust
a

'

as

Metzman

reliance!.; onf

who

had

Vice-

was-elected

He

in

Senior Vice-President

' X

V

Also announced

nations

•

depart¬

and

of

the

on

Morgan

board since 1945 and 1942, respec¬

.

of „economic" tively..-^" V
S/-

,

d

*
Ivanetic

Sefveri* Have
sistant

been

Secretaries

' '5

f

Chemical

economy,

Continued

56

on page

been

Century

Club.

The

[Focacpi

Edward

elected, Vice-President Xand

was"

Adamo,

dinner party-yvas

Miss

Secretary.
hosted hy

M." De-Luise

Helen

a?

-

trustees

three

of

the

includes
River

East

appointed-Assistant" Treas-

Chairman*

of

the

Board

of

C.

Percy

Magnus,.:Mabee & Reynard, Inc.,
and George O. Nodyne, President
of East River.'*" % :
'
.

®

^

'j".

Stockholders T of v the
Point

National

Bank,

College
College

t

t

PRIVATE

WIRES

■:

First California Company
'

•

.

.UNDERWRITERS

•

'

1

•

TRADING

FACILITIES

(

X

Schneider, Bernet
&

.•'*-»

r"r

.

.

incorporated

DISTRIBUTORS

TO

1

-

I

.

G.A. Saxton

Hickman, Inc.

!

Dallas

>
.

MEMBERS:

PACIFIC
-

COAST

AMERICAN

STOCK
STOCK

EXCHANGE/ MIDWEST
EXCHANGE

STOCK

(ASSOCIATE)

FRANCISCO

LOS

&

Co, Inc.

; Teletype NY 1 -609 -NY 1-610

•

-

-

52 Wall SL, New York 5, N. Y.

ANGELES
'

300

Montgomery Street

647 South

Teletype SF 885
PRIVATE

WIRES

TO




NEW

!

Teletype LA 533
YORK

AND

McAndrew & Co.,

Spring Street

DIVISION

OFFICES

X

*

San

;

Eastwood, Inc.

Philadelphia

v

SAN

&

EXCHANGE

Hendricks

Inc.

the

Lighting Company,
Magnus, *> President 'of

Long' Island

Southwest Gas Corporation

*

Ihe

1956., President ,of r the Quarter
Century ClubU-::*.;
j 1
Active
members
of "the
Ckib

Michael Sayings Bank^Edward.F. Barrdtt,

and

'appointed As¬
of

Supervisor & Appraiser was
President of .the Quarter

gage

elected

total 65. The membership

<.

J,1;

iMirjan

f

••• "■

~

on

Mr.

■';; D'Artagnan

Gustav

Zinsser,

John. S,

served

■?■■

the resig¬

were

Directors"

June 6. * *'
v
,
; ; "
Giosue F. De Giulio, Mort¬

Club,
'

^

Southern Nevada Power Co.

,

\

25'years helped celebrate
Century
Dinher of the Bank, wliich was
held at the New York Athletic

bank's

the

heads

investments

■

has' an' Corn Exchange Bank, New York
uneven effect on both lenders, and*
it was announced on June 11 by
borrowers.
That whole body of ;
Harold H. Helm, Chairman. James
important suppliers of long-termcapital known as institutional in¬ J. Brady and Robert„F. "Ritchie,"
vestors are far less responsive to former Assistant
Managers, have
;

York for

■

and

.

fCstrhfnt,;' "al- *
tliqugh attempting to deal with all

UTILITIES

for

the 18th Annual" Quarter

-

in 1955;v

"Credit* ""

the

"

;•

grrtwth'by,-ignoring* the: -serious

of

worked

have

the East River Savings Bank, New

Senior Vice-President

Hinton

1940 and

•

~

■

nature of individual situations.", V

sectors

who

staff

three

officer..., and

One

members

'

since

mqnetary policy, to curb inflation
is not raising serious obstacles to
maintenance,

in 1955.

ment. He

^

>

•

tionv whether

the

in

Vice-President

•!

a

we

V.

.

;• '

-

and

the

In view of this situation, I ques-

.

York

was

Vice-President

a

Senior

a

trusts

[Questions Monetary Policy
\

General

GROWING

elected

200,000. President

over

in the next two years.

'

demand

was

in¬

not when

—

enrollment

State to increase by

subur¬

intra-city-move¬

*

and

Bank

New

of

Company

Trust

M. Meyer,

w.

given approval to increase its
v'
' vv
Cragin's and Mr. Meyer's capital stock from $2,145,375 con¬
sisting of 85,815 shares of the par
executive responsibilities are
value of $25 each, to $2,188,300
primarily in the general banking
field. Mr. Cragin has been with consisting of 87,532 shares of the
same par value.
^
the Morgan bank since 1928 and

alone, have

favorable

more

school

State

Commercial

Stuart W. Cragin, Long-

are

;

•"

if

if

'

schools

vestment climate

Secretary.

,

if

,non-propertyMr. Meyer" was first• employed"
assessments, have in¬ by J. P. Morgan" & Co. jn 1933,
125%. Local faxes for the. becoming
a ^ Vice-President,
in

a

A.

on

and

wait for

to

Assistant

Mr.

risen 152%. Yet,"we must continue
to build schools. We cannot afford

no

Demand Exceeds Capital Supply

banization

C.

Henry

They

realty;, taxes,

support,. of

new

or

June 6 by
Alexander, Chairman.

announced

In 1955. ;

creased

the

ap¬

an

the Personnel Division.

down.

local

years

Forty-

was

Eversman ; was- ap¬
pointed an Assistant Secretary in-

"John M. Meyer, Jr.

was

are

10

•

the

at

Office

Street

Ruth

•

1946 and

taxes

enor¬

for

need

an

tax

ing

time

of

last

;

Assistant Treasurer.
f
Robert L. Capel at the Rocke¬
feller Center Office was appointed

levies in New York State, includ¬

of building new

the

in

There

mous

of
en-

and at the

program

facilities

;; beyond

particu¬
have

areas

the

„

Mencke

B.

pointed

voters

voted

were

budgets

.

J;

appointed
Treasurer
in
the

'

also being re¬
jected with recommendations for
curtailment of expenditures.

the

in

Assistant

an

5

was

Treasurer's Division.

all

rejected. Last year less

10%

School

New

York,

M.

Albert McDonald

our own

the

of /; the

■

The

of

Trust Company, New

President, announced on June
the following promotions:
:

Jr.

to

meeting

a

Directors

of

Board

$6

In

,

Massie, Chairman of
the Board and Hulbert S. Aldrich,

experiencing a'

now

submitted

than

within

areas

of

are

have been

while the older
city become' de¬
Thus, we have under-

utilization

nrnioii

Adrian

Since the first pf this yean
street Hinton, and John
than 35% of the school bond

issues

of "the

populated.

Longs treet

Cragin

will cause undue
the
already
high!

it

on

we

taxes.

New neighborhoods are created in

sections

W.

York

quiet but effective taxpayer revolt
against the continued rise in local

large cities there

added problem

I

*

#

Following

•

Stuart

«

John

pressure

hospitals,

new

-;v

second

the

exceed

to

a

-

ex¬

local

and

pected

„

September,
'•/

••1956.

billion
level this year, you can readily see
the magnitude of the problem of
high interest costs,

state

'

in

trustee

Hanover

^

costs

by
governments

of

elected

..

mil¬

issues

bond

new

re-

.

the life of these issues.;

-

of credit conditions.

movement

ment

and

in

over

a

In some of the

with local officials and the finan¬

scarcity

additional financing

lion

has

Secretary

as

j, the Treasury. -X > ;
X-'X X
Mr. - Anderson was

scheduled

construction

*

-■

Trustee of The IIan-;

as a

nomination

,...

same*

rise alone will add some $80

.

responsibilities" of

the

Among

this

.

*

Anderson,

Bankr New York in view of.

over

I, his

by districts, outside of New York
City for the next three years, this

and other essential facilities.

the

r

During

school

in

water and sewerage systems

new

| signed

perJod-interest rates on bonds issued by?
Ne\v York State school districts
have increased by a full percentage point. With some $528 million

June.

Population growth and subur¬
ban expansion have created un¬
precedented
demands
for
new

ncerned

'j:

B.

Robert

with

Division.

the Bank's Metropolitan

supply of funds# it be¬

Brady

connected

are

As the volume of state and local,

burden of local taxes.

am

particularly

Ritchie

and

Messrs.

Broadway.

165

.at

the>

comes
increasingly necessary; for-,
governmental units to compete on
a
straight return basis. Already
yields on high grade - state and*,
local bonds outstanding have* in-,
creased 70. basis points since lash

to

of

concern

over

that

of

Co. Incorporated,
have been elected to

P. Morgan &

-

The! Investment

the

deep

the

limited

not

Three Senior Vice-Presidents

J.

of

is

investors;

institutional

exceed tne

minimum' of $350
million of municipal issues were
postponed or withdrawn from the
market in the third
quarter of
ported

sciousness and

me

is

high

long-term borrowing continues to,

Bankers Association, in its Octo¬
ber
1956 statistical
bulletin re¬

ing tide of
budget con¬

co

situation

other

■

Some even have deferred

New York State.

feature

This

banks.

and

their construction plans. Of course,

credit.

Everywhere

Bankers

and

ETC.

limited group

a

on

who receive a' large share: of
nation's long-term savings.

ex¬

with budgets
and

OFFICERS,

urer
and
Assistant
Secretary,
respectively.
New York
Messrs. Ivanetic and Serven are
minor
importance to'V insurance:
that Bank's board of directors, it nvsocia+ed with the bank's Term
companies, mutual savings banks
Loan Division with headquarters

d i f f lc u It y in
obtaining
temporary
financing.
Others have rejected bids on bond
because

centered

cial

countered great

issues

BRANCHES

CAPITALIZATIONS

Federal tax rates and to commer¬

struction bill.

travels

NEW

REVISED

of investors—those subject to

.

my

CONSOLIDATIONS
NEW

govern¬

fea¬
ture, interest in municipal issues

government finance problems arising from
policies are commented upon by Mr. Levitt
in discussing New York State and municipal plight, and in
suggesting new mechanisms for marketing school bonds
through the creation of an authority to purchase school
district obligations and to finance such purchases by issuance
of its own bonds.
The State Comptroller criticizes current
monetary policy for its uneven effect upon both lenders and
borrowers, in noting that business firms "continue to secure
funds with relative ease since they are able te pass on the
higher interest costs to the consumer." Proposes: separating local government financing from other monetary policy con¬
siderations
through voluntary selective credit rationing; £
treating municipal obligations similarly to Treasury! securities—i. e., discounted at 3% ; member banks be required
to hold certain amount of municipals; municipal funds' for
tax
exempt bonds, and passage of H.R. 1 school con¬

In

of

Because of the tax-exempt

local

and

units

ment.

Comptroller, State of New York

;>

State

>

Thursday, June 13, 1957

.

.

News About Banks

evidence '
policy

of

body

local

and

state

credit restraint

i

.

<

a

suggest that this

to

exists

that

believe

I

imposes its most severe burden oi

By ARTHUR LEVITT*

jf

restraint.

credit

Upon Mun'cipal Boirowings
*

Reserve's

eral

Effect oi Tight Money

-

Chronicle

(2738)

WHitehall

4-4970-

Francisco

Trading Markets in Public Utility, Natural Gas and Industrial Securities

Volume

185

Number

5646

.

.

Financial Chronicle

The Commercial and

.

Point, N. Y. and the Trust Com¬

tional

pany of North

fective May 27.

America, New York

have

approved the merger of the
two Banks on June 5. The stock¬

holders
in

Bank

v

of

North

in

1953

America.

the

Oscar

as

Vice-President.

;

Opposition to
given in these

the

merger

columns

The

was

in

on

000 to

:/

,

•

^

.■

r: v:
*

.,

*

.

■" V

v".

appointment of Philip
Greenawalt as Vice-President

and

:

■

The

i

sale

L.

29

in

charge of mortgages of the Brook¬

Trust

announced

by
George- J.
President.
Mr. Greena¬

June 3

'

*

Md.,

of

Bank

increased

its

Marion

Ind.,

from $250,000 to $300,000 by
of new stock, effective May

(30,000 shares,

par

Moseley,

made

National Bank

of Marion,

investment field,

increased from $500,000

was

equipped
religious
He

to

comes

all

institutional
associated

was

more

cisco.

and

handle

well

types of
financing.

with

Rite Way

Petersen

III,

Oil & Inv.

DENVER, Colo.—Rite-Way Oil
and
Investment
Co.
has
been

than 25 years ago.

"

formed with offices at 1640 Court

Reynolds Adds to Staff

was

-

from

SAN

FRANCISCO,
Netland

T.

with

affiliated
425

Marton Sandler Opens

(Special to The Financial Chronicle)

Edwin

by the Board of Directors at the
was

ST.

$600,000 by a stock dividend,
May 29 (60,000 shares,
par value $10).

Assistant Cashier
Bender,
walt, formerly a Vice-President/ to Assistant Vice-President of The
joined the bank in 1934.
Bank of Virginia,
Richmond, Va.,
Announcement

Hannaford & Talbot

'

effective

value $10).

>v.; • Sj{ V- '-r-*■'*,

Donald L Cohin With

Stay Joins

Petersen Firm

April, 1944, Mr. Mose¬

to

-

promoted

Walter A.

He began his banking career in

BALTIMORE,

Calif.—

has

Reynolds

Place

from

business

Co.,

offices

at

in

engage

Officers

Vice-President;
Kaveny, Jr.,

ing

approval

State

to

and

on

the

from

New

Department of Bank¬

open

branch

a

in

Port

Washington.
..V Mr. W. A. Kielmann, President,
said that the new bank will be

located

Port Washington Blvd.
While plans are

on

at Concord Blvd.

almost completed for the new of¬

fice, the date for its opening has
not been decided upon as yet.

With this

;

office,

Port Washington

new

Central^

Bank

Trust

Company will have four

offices,

the others being located in

Great

Neck,

Hyde

East

Hills

and

New

Park.
'

*

Joseph

'

0

.v./.

if

Hughes

E.

elected

Was

June

on

Chairman

of

12

the

;■

Board of Directors of The County
Trust Company in White Plains.He will be succeeded

President

as

by William L. Butcher. Both
will

their

assume

men

positions

new

-

July 1, following the effective
resignation date of Andrew Wil¬

on

Board

present

son,

Chairman.

Andrew

Wilson, after complet¬
ing 23 years as a Director, Presi¬
dent

and

of The

Chairman

of

the

Board

County Trust Company of

White Plains, N. Y„ announced his

intention

to

executive

officer

resign

the

as

the

of

chief

bank

on

June 30.

In 1930 he became

the

Bank

York.

of

Mr.
Wilson
in
1934
and

board

President
is

in

expected

New

joined

the
made

was

1938.

to

officer of

an

Manhattan,

Mr.

Wilson

the

serve

bank

California Electric Power Company

in
Central Louisiana Electric Company, inc.

consulting capacity.

a

action1

Also in yesterday's board
and effective July 1, William

Post

named

and

John

and

Executive

R.

.

A.

elected

A.
to

Kley

'■

Florida Power Corporation

;;

W.
Florida

were

Telephone Corporation (Common Stock)

\

...

serve

Florida Telephone

was

Secretary

as

Treasurer. Mr. Post

in

Green Mountain Power Corporation

is Vice-

now

Corporation (1st Mtge Bonds)*

Honolulu Gas Company,

:

in 1956,

-

;

Ltd.*

/

'Public Power

President

and Secretary and Mr.
Kley is Vice-President.

Jersey Central Power & Light Company

r' Dr. Hughes, County Trust Presi-5

Kansas Gas and Electric

dent

for

the

10

past

North State Telephone Company

town,

now

of

part

a

v./

<

The

County Trust Company. Mr.
Butcher has been executive VicePresident
and

was

the

of

bank

made

1946

Director

a

since

if

Board

former
of

the

age

of 70.

on

Peoples

June

11

'

Michigan Gas Company

at

the

Texas Electric Service

Texas Power &

affiliate

the left.

Company

Light Company

Trust

if

:

You

are

invited to call

Texas Utilities Company

The United Telephone

■

Company

of

United Utilities,

Co.-

its corporate
appears at

or

on us

if

your

corporation requires
capital in 1957.

-

if

if

4 "

Schenectady,

Chairman cf the
Schenectady Trust

Company, died

privately by Kidder, Peabody

if

Edward T. Rice of

Y.,

Company

South Carolina Electric & Gas Company
Southeastern

''if

N.

Sierra Pacific Power

last

January.
'

■

new

utility issues. A partial list of Power
Companies whose issues were
managed, co-managed or placed

Pennsylvania Electric Company

York,

industry through the

underwriting and sale of 72

Company

years,

formerly headed the Washington
Irving Trust Company in TarryNew

Peabody & Co. Incorporated,
helped supply more than
$1,259,000,000 to the growing

Vice-Presidents

Mieczkowski

addition to his present position as

•

Kidder, Peabody &Co. and Kidder,

;

Company of Pennsylvania*

additional

Incorporated

Bergen County, Hackensack. N. J.,

absorbed

First

National

Bank,

♦Placed by

«

v

*

if

W. James Macintosh and Walter
A.

Munns,

of the

elected

were

directors

Fidelity-Phi'adelphia Trust

if

*

Trust

*

Company

of

Wyomissing, Pa., Wyomissing, Pa.,
absorbed

the

Strausstown




Na-

Kidder, Peabody & Co.
FOUNDED

Our

booklet:

in 1956

"Public

by Kidder, Peabody & Co. and
on

request.

1865

Utility financing

Kidder, Peabody & Co. Incorporated",
available

Co., Philadelphia, Pa.
Peoples

Kidder, Peabody & Co.
Incorporated

Oradell, N. J., effective May 27.

JMembers Hew York and cAmerican Stock Exchanges
Jttidwest Stock Exchanges

oMembers Tost on and

17 Wall Street
Boston

Chicago

•

securities
Wilford J.

New York 5, N.Y.

Philadelphia

Aloysius

J.

Secretary-Treasurer.

Company, Great Neck, N. Y., has
York

a

are

Kaveny, President; V. V. Kaveny,

1238

Greenmount Avenue.

Montgomery Street.

to

business.

Marton

—

Sandler is conducting a securities

become

&

Md.

June 5 that Central Bank & Trust

received

15

JOUIS, Mo.—Joseph G. Pe¬
(Special to The Financial Chronicle)
tersen
&
Co., Inc., 1811 South
SAN FRANCISCO, Calif. — Do¬
Broadway, has announced the ap¬ nald L. Colvin has become asso¬
He was elected Assistant Cashier
pointment of Walter A. Stay as
ciated with Hannaford & Talbot,
June 7, 1946, and made Manager
Manager of its Institutional Bond
519 California Street. Mr. Colvin
of the mortgage department.
Department.
formerly conducted his own in¬
J,
*
*
$
Mr. JStay has more than a
quar¬ vestment business
in San Fran¬
The common capital stock of the ter of a
century experience in the

capital stock from $200,a stock dividend

J.

held

'

*

Virginia in the mortgage loan
department.

$250,000 by

Edward

meeting

ley joined the staff of The Bank

Company,
on

National

sis

j

l"'< 1

of

of

;

*

#

•

lyn Savings Bank, Brooklyn, N.Y.
was

•

'

1928 and in

Chair¬

Committee

of 63..

IIagerstownv

the

May 9th issue of the "Chronicle"
2170.

■

,

.

„

Director and
Trust

Second

common

page

*

Laird, who retired

Wilmington

at the age

monthly

7.

.

*

Wilmington, Del., died

Goerke, President of the
College Point Bank, will become a
:

a

the

of

man

regular
June

*

..

Walter Jones

also approved a change
institution's name to the

the

Bank, Strausstown, Pa., ef¬

(2739)

San Francisco

*

The Commercial and Financial Chronicle
16

.

Thursday, June 13, 1957

.

.

(2740)

that

question of truck competi¬
really amusing when one
seriously considers the inherent
advantages of the railroads in re¬
lation to trucks. It is true that in
certain instances trucks, because
This

Railroad Securities Make

an

Attractive Investment Medium
Partner, Dick &

service

Merle-Smith, New York City

purposely avoid rail securities are
advised by Mr. Sheehan that they are overlooking an oppor¬
tunity in many instances to realize greater income and ulti¬
mately important capital gains. Challenging the unwarranted
negative attitude toward rail bonds, the investment expert
details rail's inherent operational advantages and progress,
satisfactory financial structure, increased life insurance indus¬
try's holdings, and grounds for belief that a favorable decision
on
a
pending application for higher freight rates will take
place in late summer which will substantially improve net
earnings and assist further modernization to offset wagesupply cost inflation. Expects 1965 rail-ton-miles to be 880
billion, or 40% more than 625 billion figure in 1955, and that
this gain indicates trucks pose to threat since it is equal to
total traffic handled by inter-city trucks in 1955 and 88% of
total inter-city truck traffic anticipated in 1965,

securities

at

time

a

this

when

essential industry is on the

thresh-

really

trucking

Secondly,* the management must
be

and

properly alert, progressive and
efficient, so that confidence in the
future of the enterprise is beyond

presented as

the

belief that the

the

that the investor will benefit from

many

raiiroad

are

The

the

of

and

industry,
I

ranks

will

as

labor the

not

for the railroad

emergency

is well known—

the

with

military in basic
fact long recognized
by American military strategists.
During World War II, 90% of the
military freight and 97% of all

essentiality,

organized

a

m

i lit

reason

for

railroad

impor¬

244

of

peace.

Fraternal
nar,

of attention

by Mr. Sheehan before the

Investment

Association

Scarborough, Ontario, June 4,

ton-miles.

It

is

Semi¬

19S7.

are

Net Ton-

Millions
of Revenue

Employee

Ton-Miles

of

these

note¬

an

the

Class I

.7

•/.'>

.

•'

1956

.237

trucks

•

i956.

were

1930
of
employee
required' 2.431,023

have

The

by the trucks have been increas¬

those of the railroads

the

basis

ductivity

figures, it is small wonder
that the American Trucking Asso¬
General

Counsel, in out¬
lining the position of his Associa¬
tion before a Congressional

Thus,

$5,107.

on

1930

labor pro¬

the

the

factor

since

a

century there,
many
doubting
who seriously question

wnether any

of

avenues

mid-1920's or

the

of
good:

quarter

a

additional important
savings are open to

managements. They mention
the diesel locomotive, centralized
rail

traffic control, modern yards

We

Offer

a

COMPREHENSIVE INVESTMENT
.

April, 1955), characterized this
Report, especially as it related to
greater freedom concerning rate
policies, as, offering a "hunting
license

AND

ammunition

and

railroads to destroy

DEALER

SERVICE

the

of

principal

sources
mies in the recent

lion in

excess

of actual wage costs

approximately $2 billion more
than the entire operating revenues
for 1956.

mind

man

retains

improvement in operating
performance was largely the di¬
rect result of management's will¬

tion, the railroads in the next 25

will adopt new operational
improvements
as
efficiently as
they have in the past quarter of
a century.

ingness to expand colossal sums to

physical standards and
of technological

raise

the

take

advantage

advancements

of

expended
prove

railroads

advantage of
trucks is

the

over

found in the minimum amount of

ALL CLASSES OF BONDS

AND STOCKS

close

reduce

to

of

1945

costs.

over

$12

capital has been
to modernize and im¬
new

the physical facilities. Dur¬

ing this period, expenditures on
roadway aggregated $3.7 billion
while new equipment costing $8.3

Financial

Structure

The third

requirement concerns
a
satisfactory financial structure.
Most railroads now have a satis¬
factory

financial

structure,

an

including

for

many

would

seem

railroad ;1 securities
to

belie

Continued

are

Particularly Adapted

to

times

railroads

of

With Retail Distribution

Your

P.

F.
120

Inquiries Solicited

FOX &

REctor

2-7760




1-944

compared

as

employees

those

the

In

CO., INC.
&

NY

the

is

(b) Natural Gas Companies
&

Transmission

with

takes

Producing

into

maintain

that

final

the

of

1-945

analysis, probably

evidence

best

ages

railroads

trailers
the

now

rails.

vania

of

of

the

advant¬

is
ever-increasing
over

to be found in the

numbers

Teletypes

NY

(a) Operating Utilities

right of way, a problem peculiar
only to the railroads.

BROADWAY, NEW YORK 5, N. Y.

Telephone

Trading Markets in-

Moreover, the number

railroad

account

output

great in the case of

as

the trucks.

Service Firms

and

manpower

five

the

FOREIGN ISSUES
We

fespect the relationship be¬

tween

trucking

company

riding piggy-back on

Fere

Railroad's

is

the

Troster, Singer & Co.

trucks

Pennsyl¬

experience

in

Members N.

Y. Security

Dealers Association

74 Trinity Place, New

York 6, N. Y.

this

on

to produce
equivalent amount of work. In

this

PUBLIC UTILITY—RAILROAD—INDUSTRIAL

Firm

even

though the recent market prices

necessary

manpower

creative

years

The

the

its

thinking I abilities and its imagina¬

competitors."

A further inherent

the

in

econo¬

past,. They ask,

the

to

and

accounting equipment, etc. as the

in
connection
with
hearings relative to the Presi¬
dent's Cabinet Committee Report
on
Transportation
(released, in

1928

.tV

-

the/ tremendous

1956

and

billion
average

was

of

;

wage /"What lies ahead?" It is my firm
bill would have been in excess of belief that so
long as the patent
$12.4 billion, or more than $7 bil¬ office remains open and the hu-,

Since

downward.

1956 average wage per

of

economies effected in railroad op¬

are

the

;;

committee,

Established

ef¬

also

exclusive of

,/v;/;l:/>; :'V
view

In

Thomases

employee

cheapness of the rail service in
comparison
with
motor trucks.
More particularly, your attention
is directed to the fact that charges

ciation

factor of traffic units
employee and 1956 average
It may sound incredible

ume.

operating
and
service
factors.
However, the figures do illustrate
both
the
absolute
and
relative

above

debt

For example,

last

employees to handle the 1956 vol¬

considering statistics of aver¬
age revenue per ton-mile, I ap¬
preciate it should be kept in mind
that
traffic
composition
varies
considerably as between the two
modes
of
transportation, as do

the

fected.

erations

the basis of say, the 1930

on

would

.216

of

of

ductions

efficiency

261

view

It

while

financed;, out of eash generated
from
operations, substantial re¬

per
,

In

In

>

large expenditures, averag¬

been

of

6.351

.

+57 ft

placed in service.

was

$5 billion with what it would have

.260

trended

expenses

per

5.989

.
.

•/

;

supplies.

efficiency

1.370

-77

18.6

costs .for

increased

and

289,325 traffic units

5.509

while

wage

may
be ob¬
comparing the actual
labor cost of approximately

operating
by

but

5.563

•

by

to all industries, as

.262

1.421

_

increases! in

„

.

wages.

1.478

1.430

J 958-_

i6.8

/>.

ing about $1.1 billion per annum
in the postwar period, were being
made on the property and largely

tained

Trucks

5.099?

billion

16.7

equipment obligations,/ funded
Some /debt of the industry was reduced
measure of the effect of the dollar /by more than $2 billion between
value of the labor economies in the close of 1945 and the end of

Rail to

Class I

t

1.336?

13.8

should be emphasized that

of

industry have been

+•197%

+ 9 ire

df

these

standpoint

the

as

,

Trucks

Railways

the

materials

Comparing rail and truck rev¬
enues
earned
per ton-mile,
the
railroad charge per unit of ti;affic
is only a fraction of that required
to be charged by trucking compa¬
nies, as follows:
Ratio of

4 56

indeed.

common

well

gallons, only

''/•* '

145 Ci

excellent

but

progress

spiraling

costs

in trailer trucks

this volume.

-r

over-shadowed in recent years

one-sixth of what the trucks used
move

only

of the railroad

increase in fuel consump¬

million

—41 %

net
earnings, the magnificant gains in
operating performance on the part

handle the
now
moving

.

>•

f

.;■*

1925

vs.

From

could

the highway

tion of 500
to

674,576

progress

three billion
its volume and

traffic

26,119

534,163

1,042,664

Obviously, these figures indicate

by railroads was also

additional

/: 20,343

1,220,784

not

consumption of live miles per
gallon, from the present three bil¬
lion gallons to 21 billion gallons.
The equivalent fuel consumption

railroads

1,224

1,420

373,253

z;

'/ Change

age

the

588,577

646,976

409,732

1950

would increase, based on an aver¬

gallons to move

14,028

289,325

1956

carriers

over-the-road

849

1,510,688

•//'

11.8

io.836

1,026,956

—

The fuel consumption

billion.

184

v

•

total of

a

744

1940

the freight han¬

Train Speed

8.773

413,814
383,450

1930

Aver. Freight

Miles per

Net Tons

Per Train Train Hour

274,554

1,769,099

1925

1956

105

inter-city trucks in 1955 and 88%
traffic expected in 1965.

regarding inefficiency.

Class I Railways

Number of

whereas

tons,

revenue

inter-city

tions

All

Traffic Units

billion ton-miles, is equal to more
than the total traffic handled by
total

appropriate
to
the operating

of

performance data for the industry
to test the validity of the allega¬

per

ing

the

seems

certain

important segment of our national

be the most

Number of

have

of

it

per¬

At this

roads.

few

a

examine

time

the

in

the

because of

industry

formance of

Employees

be obtained by the railroads alone
in the next few years, namely 255

during periods

This lack

*An addres6

billion

the

can

the

worthy that the gain expected to

ated, is the essential nature of the

industry

Inter-city trucks
anticipated to show a rise to

300

tance, although not generally rec¬
ognized nor, seemingly, appreci¬
railroad

industry represent

billion ton-miles by .1965, as
compared with the 1955 figure of

was

travel

a r y

handled by rail.
•
Of
greater
economic

continue

will

railroads

the
truck trailer

average

eleven

with

trucks combined.
are

facts

conclusion,

one

foreseeable future to

trailer

by

would rise seven-fold to

approximately one-half the total
transportation service require¬
ments
for all inter-city freight
and about three-quarters of the
traffic handled by railroads and

point—

true that some roads
have lagged behind the industry,
I don't think it fair to condemn

namely that in peace or war the

dled by railroads in the year 1955,
the 15 billion tractor-trailer miles

railroads will

1965

that

*

move

trucks moved all

pass

level

only

and the inef¬
railroads. While

progress

be

may

leaded freight car carries
32 tons. Assuming tractor-trailer

industry is abso¬ ion-miles at 880 billion, or 40%
lutely indispensable to the econ¬ fnore than the 625 billion figure
omy in both war and peace. Dur¬ "for the year 1955.
These figures
the

19542

to

average

railroad

ing periods of national

to

The

carries

way
Progress
Institute.
These
organizations in forecasting future

place

it

transportation system and this at

facts.

traffic levels for inter-city freight,

today that more than satisfy these
requirements.

lead

of

lack

I frequently
the

concerning

remarks

to

ficiencies of the

17,439 36,253

incontrovertible

Now let us examine some of

research organization work¬
ing in conjunction with the Rail¬

securities available

listen

—

efficiency.

*

cago

these fundamentals.

Total
The

truck.

into oblivion. This
doubt,
//•:
V; pessimism is unwarranted in the
Thirdly, the financial affairs of light of recent studies made by
the business must be so organized Transportation Facts, Inc., a Chi¬
eventually

over

commodities

merchandise

economical

growth of the
is emphasized

industry

3rd quarter--

concerned

am

and

ness

raw

cialized

-

railroads. 'The

the

investments

7,667 16,227
6,920
6,228
9,145 15,438
.
651
2,809
4,834

4th quarter

the second

for institutional
management, alert¬

basic requirement

1957

1956

1955

quarter
2nd quarter--

materials that move in
heavy volume rather than the
relatively small groups of spe¬

Challenges Pessimism k

competitive.

\
opinion that there

I

here,

with the vast bulk of

and

the welfare; or at least compatible ■In the minds of certain. inves¬
with the tastes of the community, tors, truck' competition >is con¬
at a cost that is both reasonable sidered to be the real problem of

It is my

a

But

over

First, the industry must provide
product or service essential to

a

and

advantage

natural

have

when suddenly the
basic import strikes home. Thus
service and renewed
a. railroad
strike on a national
regard.
There are three important re¬ scale, for any important length of
quirements for any group of secu¬ time, would so paralyze the ar¬
rities to qualify as an investment teries of the economy as to require
medium
for. institutional
funds. drastic public action.
of public
investment

Operating Economies
Here let us consider

Carrier Trucks Handled

1st

trucks, because of their

rails.

a

functioning,

hold of its greatest era

principal competitors.

flexibility and quicker service do

tribute to the unobtru¬
sive
eificiency of this industry,
much like a water system that no
one
thinks about until it ceases
is

It is certainly opportune to dis¬
cuss the railroad industry and its

a

by Pennsylvania Railroad Co.

do

instances

in

1955:

tages of the railroads in relation to
trucks. It is true that in certain

Investment officers who

cost that cannot be met by their

carrier

March,

common

opened

was

Common

flexibility and quicker
have a natural advan¬

their

of

By JAMES L. SIIEEHAN*

since

field

service

is

tion

state-

page

54

Volume

Number 5646

185

.

.

The Commercial and Financial Chronicle

.

differ materially from
year's
record.
Carryover

not

may

Outlook lor

last

stocks

into

the

new

Industrials, Metals and Textiles
Demand for industrial commod¬

will

season

ities

be

sharply above those of a year
These large current and
prospective supplies should mili¬
tate against any sustained price

Commodities

at

ago.

By ROGER W. BABSON

of

analysis

an

supply-demand relation¬
ships prevailing in some of the
major commodity groups. .Sees
possible moderate strengthening
of industrial, commodity prices
later

in

the

by no means heavy. Current¬
ly,
price
strength
prevails
in
feeder cattle, which have been in
good demand. I forecast a rather
are

heavy

cluding feeders,
this
fall,
and
lower prices.
Marketings of the
1956 fall pig crop are now well
out of the way—and will prob¬
ably be followed by temporarily
higher average prices; but prices

and expects

year,

total dollar volume of

new

con¬

despite j housing de¬
cline, to hold at a high level in
struction,
C

the coming months.

:

Total volume of
tion

in

put

basis,
first

hit

place,

four

on

this

of

,

levels,

summer

well

allowing for

the metals group lean more to the

side than otherwise,
shortages are indicated.
domestic

but

no

J.

charge

SAVANNAH, Ga. — Johnson,
Lane, Space & Co., Inc., Bay &
Drayton
Streets, has been ad¬

D.

ant

NYSE Member Firm

the

Vice-Presidents;

Clarke

Hudson

Harrison

and

in

1957,

man

and

Carl

E.

correspondent.
In addition to headquarters in
Savannah, the firm also maintains

Muller

-

textile

industry,
by and large, has been in the dol¬
drums for a long time. However,
I forecast some improvement dur¬
ing the second half of this year.
Cotton and wool perhaps will be
the best performers, although I
forecast nothing in the nature of
a
booming market.
Supplies of
the basic fibers are ample for the
months immediately ahead.
;
y

Officers

Thomas

are

President;

son,

Executive

Julian

M.

A.

John¬

York

New

July

J;

Vice-Presidents;

Stock

will

Exchange

admit

Donald

become

Mr.

Anderson

member

a

change.

of

,y

,

1956, is curbn g
demand
key

items, partic¬
ularly lumber,
plumbing
equipme n t,
terials.

ma¬

I

see

immediate

no

major im¬

Roger W. Babson

provement in
this adverse
situation.
dollar

Nevertheless, the total

volume

of

tion will hold

that

fact

at

will

goodytotal

construc¬

new

high level—a

a

make

demand

materials in coming

for

for

still

a

building
months. Sup¬
-

plies/for the most part, will con-.v
tinue -ample.'P'z .•/.

*

i

•;

',

-

5?

'
••

in

I

nothing to'worry

see

hard fuels.

about

'

.

*

*

,

Production should

These
levels,

hold at
allowing for

will

i"
■■4

■

continue in good balance with re-,

quirements.
satisfactory

-

.

I,?
•

•

.

-

^

tmii

-

;
v."

the/ usual

" seasonal
variations.Liquid fuels also will easily meet
current

and

prospective

needs.

Gasoline

stocks,' thougvi heavy,:
probably wil not prove burden¬
some, now that the season of hkh
consumption
is close
at
hand.
Large imports of petroleum and
heavy fuel oil are causing con¬
cern
in some quarters, and will
'be shaiply curtailed/. I", forecast;;
either voluntarily or by govern-

.

ment decree,

"
for

Outlook

over-all

The

-

.

;

/

Foodstuffs
outlook

food

re¬

mains firm.; Supplies of most ma¬

jor items

will hold at relatively
high levels.
Supplies of meats,
however,
may
be
somewhat
smaller
this
summer
than
last,
largely
reflecting an expected
drop in the supply of pork. With

all

pastures

the

over

country in

Approved by the Board of Public Opinion

excellent condition, milk produc¬

tion, from
mer

through the sum¬
will hold at a high rate. This

should
cial

now

result

in

larger

commer¬

supplies of dairy products but

CCC

heavy

buying
maintain prices.
Looking ahead
that

new

food

a

should

heip

bit, I forecast

crops,

with
conditions

even

only average weather
during ' the
important

growing
periods, will again be large.- Do¬
mestic

>demand

for

products,, both fresh
will continue at

flecting

a

a

most

and

re¬

for

U.

income.
S.

food

products

however, be less aggressive

than it

was

a

year

ago.

Grains and Livestock

Despite
reduce

Motion before

government

them,

our

efforts

to

grain and feed

supplies in the aggregate

are

Early indications

another

grains

large

for

of The New Shape of
you^-the hoard of public opinion,
our

and the
to

cars

them. It's

of The Forward Look
as

simple

as

give it

that.

The styling and engineering leadership of the new* *
Chrysler Corporation cars tells only part of the story.
Behind these cars is a long range program for

consistent

operating results, including:

y

engineering

new

facilities, intensified research, streamlining of

this

manufacturing for efficiency and cost management,

beauty. The fins reduce steering correction as

much

as

20 per cent.

for far safer

All this, plus far more glass
visibility. And they were equally

impressed with the new engineering developments that
kept pace with styling . . . Torsion-Aire Ride . . .
Pushbutton TorqueFlite transmission . . . Total-Contact
brakes. Instantly, the public recognized in all this
beauty and brawn, the newest advance of

as

well

as an

This kind

-,

aggressive marketing outlook.

of program is not only important to employees

and stockholders, it is essential to the kind of progress
in automotive

styling and engineering that will
growing enthusiasm from you—

continue to win

the board of

public opinion.

The Forward Look.

THE

FORWARD

And the result? Across the country,

still

and

more owners

point to

the sn itch is on,
of competitive cars are

know what
car—in style, performance, economy—

of

feed

the

total

they want in

CHRYSLER

LOOK/>

CORPORATION

turning to Chrysler Corporation. People

supply

1957-1958;

fresh, exhilarating exploration.

history. People took to the low, full-finned designeven more so when they learned there was purpose to

as more

large.

as a

all received the most enthusiastic endorsement in

area

dispos¬
Foreign

Corporation, for 1957, aimed for styling that the

Last October, when we put our cars

continued high rate of

consumer

demand
may,

frozen,

high level,

national employment and
able

food

Chrysler

public would hail




a

PLYMOUTH

•

DODGE

•

DE SOTO

•

on

Lee

Norris and Harold O. Anderson to

partnership.

i

and other

St.,

City, members of the

York

Craig

T. Johnson and J. Chappell Sum¬

Assistant

New

Space,

Vice-President;

Barrow, Jr., Allen Crawford and
Freeman
N.
Jelks,
Vice-Presi¬
dents; George C. Kneller, David
mers,

Schry ver Admits

Muller & Schryver, 40 Wall

offices in Augusta and Atlanta.

with

some

d

are

Hill, Assistant

com-

for

a g o o

Vice-Presidents.

ton & Co. will be their New York

year.

pared

H

Clare

Vice-Presidents in charge of the
Atlanta office, with D. W. Hinds-

mitted to membership in the New
York Stock Exchange. W. E. Hut-

However,

the
sharp drop in
housing starts

17

Smith, Vice-President
of the Augusta office,
Boyd, J. J. Slattery and James M. Mason, Assist¬
in

with

letdown.

easy

The

Wiley

Johnson, Lane, Space

maintained

dollar
for the

a

high

months

turn

sharply downward as
marketings of the large spring pig
crop increase.

construc¬

new

record

a

could

>

of grass fat cattle, in¬

run

good

be

Supplies,
for
the
most
part, should suf¬
fice.
Industrial prices may even
strengthen moderately later in the
year.
Supply-demand ratios in

Supplies of well-fed beef cattle

the

should

usual

advances.

Mr. Babson provides

(2741)

CHRYSLER

•

IMPERIAL

•

DODGE TRUCKS

the

will
Ex¬

The Commercial and Financial

18

up,

Reshaping Our Financial System

Thursday, June 13, 1957

.

.

Much of the con¬
fusion
and
disagreement which
have plagued this subject in the
past have stemmed from the con¬
kept in mind.

and Economic
Association

Deputy Manager, Department of Monetary
Policy Commission, American Bankers

education

Crystal

biplanes,

sets,

TV, jets, and motorized tail fins.
How well has
//"A'
m
'' *
our financial
/

system adapt¬
ed itself to
t h i s

w

e

n

How

.world?

isf act only

come

-

the old

development of the
over the past
century,
these
categories
lost whatever significance
the

With

,

their present

sat-

function

the ancient system of
reserves set up dur¬

classifications have lingered on.

requirements are kept at
levels, they will be¬
increasingly
burdensome

If

to

reshaped

of

Reserve System, but

eral

nation's
half
have

they

-

economy

had. Today many banks
doing the same

once

World War II.
For

who

and unfair.
The

basis

only

(a

1 ?

'

growing economy.

Flexibility
Outmoded

An

first

Looking

the

at

structure

'

"

The

of member bank reserves, we find

relic

delight

to

high

required

of

level

reserves

historical accident.

an

burden

antiquarians

and

For one thing, the current

only.

ments

doubled 20 years ago

were

to cope

Require¬

with unique circumstances

arising largely from the devalua¬
dollar

the

of

tion

in

conditions have

These

1933-1934.

long since

disappeared.
Nevertheless, the
reserve percentages are still about
two-thirds higher than prior to

trol

or

for

the

to

address

Money

and

Reserve

11,

Bank

of

upon

an

may

have had some va¬

ligible extent to bank liquidity.

are

the

Banks.

by Dr. Adams before the

Banking

based

premise:

-

which one

on

reserve

Workshop, Federal
Minneapolis,
Minn.,

1957.

overriding significance of
requirements today is the

vital role

part

they perform as a fixed

of the mechanism for mon¬

etary management. They consti¬
tute a fulcrum on which the Fed¬
els

Reserve's credit-control lev¬

Without

rest.

them, there
really good brake on
credit expansion.
would be

no

should

business

b y
t h

higher re¬

carrv

I

the

\ h

stamps

the

between

one

in

situation

and

1942

t

analogy, but
there are some
similgrities. Housing is affected in
.

.

t

a

draw

housing situation in 1957 if I
Unfortunately, there is no

could;

n

„ha,d

s

would

pork-beef

strange

t,
with
money, when
you. wapted to
y .o'u ; s p e n

trol

along

by attempts to con¬

ways

other

.

parts of the

economy;

and housing is very
Dr.

George C. Smith

of

definitely part
shortage situation. Tx^ere is

a

a
good deal of debate over just
f what the
shortage is. Some hold
call, there were red stamps far
that there is a shortage of buyers,
meat, and blue stamps for canned arid there
may well be, in certain
goods, and in the back of the
price brackets. Others argue (hat

"eat.

I

As

re-

ration books

y

yy::;"

y:

were

some

y

structure

serves

mittal

non-com¬

stamps

Plan

The ABA

These defects in our present re-'

of

are,

course,

officials

that

discovered

pork

supplies were more plentiful than
they expected. ^

widely recognized. What is need¬
Being wise men, the rationers
ed is a plan which would correct
them and which would also be. knew just what to do. They would
compatible with sound monetary declare a dividend, by announcing

acceptable

policy,

the

to

with the

ago,

years

banks,

administer.

and not too difficult to

en¬

of the Federal Re¬
authorities, the Economic

couragement
serve

Policy Commission of the Ameri¬
can Bankers Association embarked
upon

this

that

number one
good: for
five extra

be

That, they
care of the

points worth of pork.
figured, should take

surplus

pork

in

a

lished the results of its labors, in¬

concrete program for
revision.
Here, in five

cluding

a

reserve

proposals,

simple

the actions

are

Commission recommends

period of

a

J

years:

Eventually

reduce reserve
requirements for demand deposits
to
10%. For all member banks,
requirements against net demand
deposits -now
average
From 1917 to 1936 they averaged

about 10%. From

standpoint,
demand
well

of

10%

of

serves

deposits
one

as

credit-control

a

just

as

fulcrum

a

of 16%.

-

is evidence enough of
analysts who

year,,

take comfort in

is

rate

peak
low

to the highest
reached in the

ever

we

1920's.

the fact that this

close

very

don't. I think

I

rate,

and

it's

a

^believe

I

it.

prove

very

I

can
-

Whatever is wrong with

building, it isn't due to any falling
in basic demand for housing.

butcher

the extra

for all

beef

red

stamps

all-time peaks.

near

or

In

the

past

year,

for instance,

population of the country in¬
creased by almost exactly three
million people. *This would ordi¬
plus stayed about the same, while
narily
be enough to
make up
beef became scarcer than ever.
nearly
900,000
a v e r a g e-sized
Now, this story may not seem to households, and create a demand
have much bearing on the housing for
an
equal number of new
situation in 1957, but it does illus¬ dwelling units.
Of course, there

they didn't have to use for pork.
The result was that the pork sur¬

the

trate

a

couple of economic facts of

are

life.

One is that attempts to con¬

get

trol

the

results

economy

not

lead

often

to

expected by the con-

Smith before the
Southeastern Mortgage Clinic, Mortgage
Bankers
Association, Miami Beach, Fla.,
*An

address

16.

by

Dr.

1957.

many

such

reasons

growtn
housing.
the

why you don't

exact mathematical
between population

an

relationship

and the need for new
For one thing, much of

ipurrent growth in population
Continued

on

■»

page

(2) Make this 10% requirement

WISCONSIN UTILITY ISSUES

for

all

member

location

bank

make

no

should be abolished.
differentials

these

foreseeable

wa &

ume

&

INVESTMENT

of

to

SECURITIES

with

banks

ments
225 JEAST

MASON

MEMBERS




0

|
tl

ST., MILWAUKEE

NEW YORK STOCK

EXCHANGE

liDWEST STOCK EXCHANGE

Ml

2

or

Years We Have Specialized In

For Many

the

un¬

shift

Underwriting
Sound

Of

re¬

to
a

vary

—

Trading

Securities

high require¬

versa.

Boenning

The elimina¬

therefore simplify the

range

Distribution

Public Utility

from

Members:

this

requirement

of 8% to 12%.

Continued

&

Co.

Philadelphia-Baltimore Stock Exchange; American

Stock Exchange

authorities.

Authorize the Federal Re¬

serve

—

vol¬

excess

"

(3)

The

requirements

task of the monetary

over

mmm r,

less

and

cause

in

deposits

with

tion would

now

bank

higher

vice

upon

sense

Incidentally,,

changes

member

when

serves

hanks

INCORPORATED

banks.

Existing differentials based

on

The

page

44

.

Of this, there can be very little
people obligingly rushed to question. Practically all the indi¬
shops, spent the air¬ cators of housing demand are at

The

May

uniform

.

home-

off

hurry.

comprehensive study of plane stamps for their normal ra¬
Recently, it pub-" tion of pork, and then demanded

a

a

this. There are many

airplane- stamp

would

the

000

problem.

(1)

linlisted

k

o o

|

Personally, I like analogies, and

the problem stems from a short¬
with ,pictures of
age of mortgage money, and 'it
airplanes on them. •Nobody,., in¬
certainly does, in part. A few, in¬
cluding
the! authorities, . knew;
cluding myself, are also beginning
what
the airplane stamps
were
to believe that a shortage of hous¬
for, but it just seemed that they
ing is developing.
' ' '.
nated
from
member bank legab
might come in handy someday.
reserves
in 1917 to meet certain
There isn't any question what¬
v And so they did.
I don't remem¬
ever
that the home-building in¬
temporary conditions. No reason ber all of the
precise details now,
now exists why vault cash should,
but to the. best of my knowledge dustry is under the weather. The
not be counted as legal reserves.
current rate of non-farm housing
and
belief* these special stamps
were first used
when agriculture starts, in the neighborhood of 900,-

taking over

for ALL

b

:

y

*

n t
arid

r'a ti o

far

never

Housing Demand Is Strong

e

poi

a
e

exists, the other is

.

away.-! V: V- /', •;

things)

system,

correspondent

banks doing a large

that the

Market Place

one

ml

rationed

were

to justify this pattern
would be on the theory that city

might try

Three

eral
♦An

inconsistent,

fundamental

lidity, but not today. Since they
must
be
maintained, legal re¬
serves are virtually frozen
assets
and can contribute only to a neg¬

monetary con¬

Reserve

it is

that

premise

provide ample earnings

Federal

A

namely, that
regal reserves are primarily for
liquidity. Once upon a time this

The

amount needed for

May

is

outmoded

1936.

Required
reserves
today
obviously far in excess of

archaic,

ip

inequitable.

fault

Approach

distribution of the reserve

re¬

d ' s o m

n

shortage, like love and hate,
complete opposites; where

aren't

too

to

other

.

for Banking

are

young

of

reason

inappropriate. As our econ¬ serves than other banks.
Two*
ahead?
■:
omy grows, we shall need more
things are clear: (1) that the cx~:r
One
currency and bank deposits and
thing
isting
arrangements
implement
more
bank credit.
Many banks
that definitely
this theory only very imperfect¬
have already depleted their sec¬
needs revision
ly; and (2) that the theory itself
is our set-up
ondary
reserves
and
are
ap¬ is" untenable because it rests on
of membe r
Or. £. S. Adams
proaching a loaned-up position. the obsolete liquidity approach.
If reserve requirements remain at
bank
reserve
A
final
inconsistency
is
the1
requirements. In addition, many current high levels, many banks
ironical status—or rather, lack of
other problems have been devel¬
may be unable to meet the credit
status—of vault cash.- Prior to'
oping. If an impartial monetary demands of their customers. Low¬
1917, vault cash was one of Un¬
commission were to subject our ering the requirements would be
specified legal reserve assets un¬
financial
system
to
searching the best way to enable the bank¬
der the origmal Federal Reserve
scrutiny, what changes would it ing system to accommodate the
Act and, before that, under *'the
recommend?
r.
monetary and credit needs of our
National Bank Act. It was elimi¬
Need

and

,

those

their geo¬
member, meats
graphical location. This is illogical!
by

and

the years

over

be pardoned for raising trollers; when you put your thumb
recollection, I'd like to on one part of the economy, some¬
conjure up the memory of those , thing else is liable to pop. Yqu
little ration books we had during might
also deduce that surplus
dismal

of similar size and

merely

>

If I may

a

type of business are subject to
different
reserve
requirements

-

public.

be.fi

it

should

Inequities

ing the Civil War under the old
National Bank Act.
This pyra¬
midal structure was abolished in
1913 with the advent of the Fed¬

requirements clearly dis¬
courage membership in the Fed¬
eral Reserve System.
They are
grossly
discriminatory
against
member banks as compared with
other
competing
institutions.
Even more serious, they restrict
the flexibility of the banking sys¬
tem
and
impair its ability to
serve
the banking needs of the

have given way to

and tin lizzies

>

present geographical classi¬
fication
of member
banks is a
redeoosited

e

,

1958 is predicted
by construction authority who finds this an encouraging offset '
to past several months' decline in new manufacturing building
contract data. -Dr. Smith avers present underbuilding falls ;r •
short of basic annual demand by half-million, and in ^ his
v
description of concerted .pressure foretelling an extremely 1
bright long-range housing picture calls attention to vacancy ^
rate decline;
annual minimum housing replacement rate of .300,000 units, and the additional 800,000 required for non- 1
farm housing formation.
Warns that continuance of severe
shortage might bring on more government lending, and decries
tight-money as antidote to non-monetary induced inflation.
•

The

vestige

,.,'y!'Iv..y.'b-y.-.v

-

better year for housing construction in

A

sensible solution.
A Heritage of

SMITH*

Economist

and

,

Shortage ?

or

CLINE

F. W. Dodge Corp., New York City

,

,

i

High

Technology has transformed our
economy.

Vice-President

liquidity approach and the newer
credit-regulation approach. When
the
liquidity
approach
is dis¬
carded, the path is cleared to a

inherent limitations.

on

Surplus
DR. GEORGE

By

old-fashioned;

the

between

flict

ability to accom¬
modate our growing economy's credit needs and areas war¬
ranting an impartial monetary commission's investigation are
deaRj^th and resolved by national bankers' Economist. The
ABA^PIan—-to redtice and mak^ uniform deposit reserve re¬
quirements, provide smaller discretionary reserve range for
Federal Reserve to vary, and count vault cash as part of
reserves—is advanced by Dr. Adams to correct what he
considers archaic, unfair, inconsistent structure and distri¬
bution of reserves, and bank classification. Maintains we have
gone too far in sheltering particular users of credit; would like
to see S & L Associations and credit unions regulated more
conservatively; sees no need for regulating nonbank interme¬
diaries; and supports monetary-credit policies but wants more
of the banking system's

Contentious issues

is

.

What's Ahead for Housing:

serve

SHERMAN ADAMS*

By DR. E.

set¬
this primary function of re¬
requirements
should
be

In redesigning our reserves

.

a

Chronicle

(2712)

1529 Walnut
'

•

,

LOcust 8-0900

Street—PHILADELPHIA 2, PA.

Bell System.Teletype
PH 30

_

New York Telephone
COrtlandt 7-1200

46

Volume

185

Number 5646

.

.

The Commercial and Financial Chronicle

.

(2743)

WoiM
V;

Supply—Lead and

v
.

By RICHARD H. MOTE*

:

Chief, Branch of Base Metals
Division

.

of

Base metals expert estimates 1957 slab zinc world
production
should reach record higii 3,141,000 short tons; lead

tities -will

y

be

to

important

-market balance.
This paper attempts to estimate
the
total
world
output of slab'
zinc and pig lead, by individual

countries,

in

known
rent

•

1957,

insofar

"

cur-

rates

States.

The U.S.S.R.

ond

as

of-

the

to

1nrE?P<d

lowed

infor¬
'

mation f

-outside' the
United

France > and

r o m

increased

now

/

_

metal"..;

the
*

11 1S anticipated that

fril

,£ tthe ^

^

amPle

.

^ernal requirements

decade

me€:!j 111-1
well

as

as

ments -of

the

producing Countries were
Australia, Mexico, U.S.S.R., Peru,
Yugoslavia, Spain, and France.r

Canada;:.?ble-

'

permit. Be¬

The

cause

countries

zinc

some

and

ly

:

from the

sphere
Jkichard H. Mote

e r n

European
markets,

and

its

satellite

72%

piiations.

sider

Far less is known, .how¬

ever, of zinc and -lead activities
in these countries than elsewhere

only

The Iron Curtain is

effective

an

tries.

Tpaardc

to

data

Wnd

v

of the

Fed-,

System may not be

current

issue

in

have read

you

the

heard

or

deal about it in recent

a

that

sense

great

a

Australia's Output
Australia

and

lead-producing

coun¬

and

leading

zinc

for

been

s"

sources

the

of

one

lead

of

Slab-;
production in ir Australia is!
limited to the output of the elec¬
trolytic "zinc plant at Risdon, Tas-;
many

years.

.

plant pro-'

nro--

estimating

•

metal

production

in

this very important part of the
world. We do know, however, that

'

•

The estimated world production
of slab zinc in 1957. should reach

groups and partisan political

con-

that it is

.

be discussing
it becomes increaslngly active during periods when

the Federal Reserve follows

pol-

a

We

I think, attribute this
difference in developments here
and abroad .to two propositions;
can,

*

some

zinc

lead

and

The* -financial

country
a

central

almost

history

-

which

has

bank,

and

eve r y

have

moved

that

chapter

on

this subject.

means

in

the
one

Only

re-

'

..

,

n

.,

t

Managing Director of the In-

ternational

Monetary.Fund, and

relatively

tional

Australian consump-t

nomic

banking,

that the

say
,

recovery

a

'interna-

on

eco-

the

record

when
the

•

.

the

Congress

Federal

Reserve

with broad powers of trusteeship
over the nation's
money supply,? it

provided

/with

,us

institution

an

which has proven flexible

enough

Y° me^t tbe changing needs of

a

dynamic, growing economy while,
same time, it provided for
the continuing integrity of management which is so necessary df

lhe *ruJst.ee?tippublic interest, t
is, ,to .b® '^opeOy
in the

handled

,

of

Second,
established

cently, I heard Mr. Per Jacobsson,
now

cby private interests.

had

world, would include at least

auced 117,060. short tons of slab
It is estimated that produc- recognized authority

tion in 1957 will remain

every

has

country

zmc.

unchanged.

of

or

western.

tion of slab zinc does not normally

been
in
high of about 3,141,- from Poland and Russia to West- require more than 65% of annual European nations has
direct proportion ;to the independ¬
000
short
tons, • an- increase of ern European markets in the last' smelter
output.
Thus, approxience of the central banks
in the
59,000 tons, or 2% 'over the 1956. year or two, and the. quantities mately
41,000 tons will be exportoutput.
Smelter
production
of seem to be increasing. Polish zinc
ed, along with the zinc concent several countries.; the greater the
lead in 1957 is estimated at about smelters are currently
producing trates." produced
in
excess
of degree of independence, the more
2,328,000 short tons, an increase of about 14,000 short tons >of: zinc domestic smelting requirements.
rapid the economic recovery.
27,000
tons,
or
slightly
more metal per month.' Although thfe Australian lead production in 1957
than 1%.;>r
/ : ~
rate may fluctuate somewhat from js estimated at about 260,000 tons
Uniqueness of the Reserve
'
month to month, the magnitude .—approximately the same jas in
In the United States, the Fed¬
Changed Geographic Distribution > 0f
change probably will not Joe -1956. Increased output of lead and
eral Reserve System has features
The geographic distribution of significant, so that we may there-' zinc in future
is forecast, however,
world zinc and lead
production- fore expect a slab-zinc output of as a result of a 5-year expansion of vindependence ' which make it
has changed somewhat during the about 170,000 tons this
year.
In- program begun recently at the virtually unique among the cen¬
past ten years. Immediately after creased smelter output will de- Mt. Isa
mine, Queensland. A. new tral banks in the world today.
World War: II, the principal for- pend largely upon an increased
30,000-kw.' power plant, a new
The monetary authorities in many
eign slab - zinc - producing coun- flow of imported' zinc
concenunderground crushing
new

insulated from pressure

serve are

siderations. They are free to act
according to their best judgment
a perennial issue.
Like most per- and they are 'directed to act in
ennials, it has active.and inactive the interest of the nation, as, a
stages. For reasons which we shall whole.
•
r,
;

zinc

;

..

world's

has

.

on

.

a

the political arena.
But the
policy-makers in the Federal Re¬

an

months, but

sense

..

rel1aWeln!tomationfs availZTwSdXt !Tai3-a' which.'1as ?n »nn»lP^
fhi%nviS InW. Most data are 'duCtlv.e 'cap?c,SK2f.-K?M>u,t
,00°
tbe Soviet Spheie.
short tons. In 1956 this

lead

"

.

the estimated output of
and
other
less
important

,ittie

duction, consumption, and stocks
of 7ir»p

Y

Currently Australia is the

barrier

political and military matters, but .lt is almost entirely e£ac

^
thl

t

of

e®^v^' objective oi t e

TT c

now

zinc-

on

fpptivp

objective

paramount

United

these

«
tion

P

t-

eight

of the lead produced outside
States.
Let us con¬

the

not

>

money

.

Russia

countries arc included in the com-,

in the world.

these

Self-sufii-

t

*

/

supply
at a constant annual rate or even underwrite a
continuing
"wild" inflation, and -defines independence as
independent
"within" Government but not independent "of" Government.

/■

*

Soviet

of

Soviets

/

Now that we have dealt first icy of credit restraint, It 'becomes
First, • throughout our history,
less active
second largest
during periods of credit
lead-producing with the . phase of -the subject
people, as represented by the
ease«
"r
country, .followed
by
U.S.S.R.; about which least is known, let us
'Congress,
have
repeatedly
reMexico, Canada, Germany (W<*st), m°ve, on, to the important zincIndependence for the monetary jected the notion that, the moneBelgium, Yugoslavia, and France. aad lead-producing countries in authority has been an issue since.. tary
authority should be ' conIn
1956 these countries supplied the rest of the world.
the
advent
of
central
banking, trolled by either the Executive or
States;

ex¬

ported recent¬

to West

output

comprised 81 % of the
lead produced outside the United

lead

have been

total

the

to

*

Refutes suggestion that the Reserve increase

|

it is current in the

a n d
Government

attention to Federal Re-

of

Committee ibas not maintained any
pattern of prices or yields1
in governments since the end of the bond
support program.

U

ZlllC

various seg¬

industry

features

in ®ulf1"a is qu"? "mited; aB<*:
most of the ooncenti-ates pioduced
aresh'Peed to Soviet smelters or.
The independence
to p°hsb smel'ers ff Soviet aceral Reserve

Poland,1 .Japan^;
A

System's

4

independence, which makes it
unique among the central banks of the world, and rebuts subtle
suggestions to end its independence. Mr. Allen stresses as im¬
portant the independence of the Reserve System and the
/Treasury from each other, and points out that the Open Market

outputs

•

sec-.

as

miintrv

Australia

mine

15%.' combined

Canada)

by

\ (West),/

many

is

serve

handle

increased Soviet metal output aswell .as assist in maintaining or
perhaps-expanding the Polish
metal output.
Smelting capacity

r

United

States

nrndurinfr

Chicago Federal Reserve head calls

,! content in Bulgaria will add to the- -v
;

V

produced

Installed

averaging

France, whose total in 1946
comprised 84% of the'slab zinc

output and
other

■

the

in

President, Federal Reserve Bank of Chicago

'East.

Central Asia. Development of sev-.
Jeral million tons of lead-zinc ore

and

\

•

elements

By CARL E. ALLEN*

from'1"

as

,

stockpiling and barter transactions

our

well

as

\ of zinc and lead resulting from
| new discoveries in Bulgaria and-

Strong evidence is found by Bureau of Mines

continue

'

Central

come

smelting caparity is believed to be adequate

"

official that world output will continue to exceed
consumption

will

from

Considerable quan-;

Defending the Independence
Of the Federal Reserve System

to

2,328,000 short tons, an increase of 27,000 tons
1956; and the U. S. A. will dead the world in both lead
and zinc, with zinc's second place taken
by USSR and that of
over

programs

Germany.

'

tion to reach

during 1957, and that

from.,

come

continue to

Poland, however,

produc¬

lead by Australia.

largely

Asian States.
.

will

within the Soviet Union,/)

probably

Minerals, Bureau of Mines

U. S. Department of the Interior

"

*

v

routput

resources

-

v.

in 1957 is estimated at about 330,000 short tons. Presumably a sub— 1
stantial portion of the zinc-con- 11
centrate

.

19

The

^

heed

r

_

for. independence of

.

the

Federal

nized

when

the

was

System

recog¬

of

was

or¬

Carter Glass, in the

ganized.
port

Reserve

re¬

the

House

Banking

Currency Committee

on

and

the orig¬

inal Federal Reserve Act said: "It

-

•_

.

shaft' and

tries, listed in order of decreasing
production, included Canada,
U. S. S. R., Belgium, Australia,

trates, which in recent years has facilities, a new lead-zinc flota- countries are either directly a
included production from Sweden,, tion mill and improvements to the part of, or
closely influenced by,
Italy, Yugoslavia, .and Bulgaria, existing lead and copper smelters the executive branch of the
gov¬
United Kingdom, Poland, Mexico, Most of the refined zinc obtained are
expected to triple the oreernment, with roots sunk deeply
-.from these concentrates is conoutput rate by late 1961. '
•An address by Mr. Mote before the
gumed within the Soviet Sphere.
•An address by Mr. Allen before the
American
Zinc
Institute
and
Lead
In"

Association

Meeting,

Chicago

•

.

Russian Zinc

•

-

metal

.

Indiana,

The two Canadian zinc smelters

underwriters

distributors

arwl

emphatically stated

committee

Federal

Reserve

tinctly

regards

nonpartisan

whose functions

Board

are

as

a

recovered in 1955.

we

have

for

many

years

been

actively identified with the public financing of the eouhtryVmajor

The annual

15,

wholly

divorcedlrom politics." Today,
Board

President, and confirmed by Con¬

14-year

staggered

gress,

serve

terms.

They must be representa¬

tive of the
industrial

financial, agricultural,
and

commercial

Continued

on

inter-

page

UNDERWRITERS and DISTRIBUTORS

Industrial, Public Utility and

ca¬

Railroad Securities

approximately
261,000 short tons and with con¬
tinued high-level output of zinc

Municipal Bonds
■

from recent

,

zinc-lead discoveries and develop¬

Our Unlisted

Trading Department

individuals

in

curities

executed

are

facilities.

-

the

serves

dealers, institutions and

Over-the-Cdnnter market.

promptly through

our

Orders for listed

,,

•

-

Bank and Insurance Stocks

ments, it is felt that slab-zinc out¬
put will be maintained at virtually

se¬

regular stock exchange

the

level

same

cent months

as

in

1956.

In

re¬

Unlisted Securities

Canadian lead-metal

output has been averaging 13,000

"

We maintain active

short

Maintenance

tons.

of

this

rate

trading markets. Your inquiry is invited.

through the remainder of this
year will put the Dominion lead
output for
no

A. G. Becker & Co.

record

pressive gain
The

Chicago 3




Broadway

New York 4

over

significance

in Canada is

60

Russ Building
San Francisco 4

ly apparent.
wick
and

area

Laird, Bissell & Meeds

1957 at 156,000 tons—
production but an im¬

Members

120

1956.
of

new

becoming increasing-'
In the New Bruns¬

the Heath

Steele mine

1,500-ton-per-day mill
Continued

on

are

page

in

47

New

York

and

DU

PONT

American

Stock

Exchanges

BROADWAY, NEW YORK 5, N. Y.

Telephone BArclay 7-3500

zinc-

lead discoveries and developments

INCORPORATED

120 So. La Salle St.

the

members, appointed by the

1957.

these two plants is

concentrate resulting

utilities.

«

the
dis¬

organization
to be

Trail,

British Columbia, and;
Flin
Flon,
Manitoba,
produced
256,000 short tons of slab zinc in
1956, slightly less than the all-time high output of. 257,000 tons

Utility Securities

May

pacity for slab-zinc production at
As

the

Indiana Bankers Association, French Lick,

Canada

production
at

Public

that

'

.

dustries

cannot be too

..

..

PHILADELPHIA, PA.

WILMINGTON, DEL.
44 WHITNEY AVE.

NEW HAVEN, CONN.

Bell Teletype $Y 1-1248-49
PHILADELPHIA NATL. BANK BUILDING

BUILDING

10

WALDMANNSTRASSF.

ZURICH,

SWITZERLAND

160 W. BROADWAY

SALEM, N. J.

48

20

\77ie Commercial and Financial Chronicle

(2744)

resulted/in. a further, crease in the- average amount
rally, with prices on Tuesday of funds loaned, increased by*
vigorously rising> to -their 16%sto $4.70 over, those of
1955. At the current price of
highest level of the year.
'
66 Guaranty stock sells at 14
Market Shrugs Off
" *
times;;these earnings, and
/
- Disquieting News :
'
yields 4.9% on the current
The evidence from these:
$3.20 dividend rate."
two recent striking incidents
Reinvigorated Chemical
seems to be merely a major
Olin Mathieson seems to be
version of previous proving
of its ability to stand-up an issue with a fresh lease-onagainst ordinarily disquieting life shaking off a price-drag
outside factors. Recurrent re¬ stemming from its having been
dubbed a flabby
industrial
ports of earnings declines and
covery

THE MARKET... AND YOU
STREETE

By WALLACE

starting the new market presently is quite in¬
reactionarily, the mar¬ vulnerable to "bad news."

After
month

•

.

ket by the end of last week
Adverse Reaction Brief
recouped* its "second wind"
This durability of the mar¬
and got onto a stable-to-rising
ket was seemingly recon¬
level, until hit by news of the
firmed by its behavior follow¬
President's indisposition,
ing the Presidential stomach
The newest Eisenhower "ill¬
upset.
With the news an¬ profits * squeeze have taken
ness-market" is- regarded in
nounced on the wires at 10:15 little market tolL
And the
some quarters as having pro¬
a.m., Monday, a violent sell¬ long-continued. rise in money
vided the second of two useful
ing wave quickly ensued, ac¬ rates and in the traditionally
and significant market tests
companied by heavy volume competing bond yields have
on • successive Mondays.
The
reflected by a 13-minute de¬ left the equity averages un¬
previous unexpected incident,
layed ticker. But even at the scathed. This in striking con¬
the
Supreme Court's quite
height of the liquidation the trast to last week's striking
sensational and surprising rul¬
losses were extremely irregu¬ performance i n t h e Swiss
ing in the Governments anti¬
lar, and by noontime half of market, where the tightening
trust suit against the du Pont
the lost ground had been re¬ of money caused
a record
company, caused only a tem¬
covered, and thereafter slump in share prices.
porary
selling- flurry and showed further
good rises
International Blue-Chip—
merely, a mild amount of prof¬
throughout the rest of the
Over-the-Gounter
it-taking activity. In the light
trading session. The net loss
of the broad and varied im¬
.

u

.

pact on industry: and/finance
that

Dow

could be read into the

but 0.37, leaving it ips' • Gloellampen fabrickenjj
level of has emerged as/an interna¬
The President's quick re- tional Blue Chip arousing
fast-growing, interest on the
part of U. S. dealers and pub¬

age, was

decision, the conclusion seems

comfortable

still

at

stock 504.

to be warranted that the

An Over-the-Counter issue,
day, calculated via the
Jones Industrial Aver¬ Philips Lamps (N. N. V. Phil¬

the

on

lic. Traded here in increasing

the American cer¬
tificates
representing < the
Dutch guilder shares in Am¬
activity

CENTRAL TELEPHONE COMPANY
and Subsidiaries

are

*r

sterdam.

.

SUMMARY OF CONSOLIDATED EARNINGS
Year Ended Decem ber 31

is

Now

the

nation's

1955

$15,826,417

Operating- Revenues
TDtker Income •..
Net

Earnings

y...

Net Income before

pany

,/

..

2,482,331 ' '!
650,838

;

1,831,493
531,571

1,742,214

1,299,922

r

,

155,406

147,415

$ 1,586,808

Common

Stock

Common Share

per

?

Com¬

of

$ 1,152,507

on—

$2.49

Number of shares

$1.96

$2.20

Average number of shares outstanding

$1.91

outstanding at end

of year

glamor stock after the com¬
speculative stiihulant of
split and rights are out of the

way.J-"

electronic

and

;

"Still

a

■

Buy"

Despite its market -trebling.
the past two years,

during

Schering in the "VO's is still
regarded with "favor. / Sales
have risen
in 1954 to
to

s

from $20 million

$46 million in 1955

$55 million last year. Even

strikingly,-> earnings
from 89 cents in

more

have grown
1954 to

$4.71 in 1955 to $6.04

To
insure
the
long-term
lophane, paper and forest permanence of this "superproducts, and nuclear and growth" situation, research
high energy fuels. Already activities are being vastly
having experienced sizable broadened, new production
gains in sales and assets since facilities are being planned,

pharmaceuticals, metals, cel¬

formation via

a

consolidation projects are being undertaken

of Olin Industries and Mathie¬

Chemical in

August, 1954,
the enterprise is now engaged
in a progressive stage of in¬
ternal growth. It is expected
by interests close to the com¬
pany that, particularly stim¬
ulated by a major move into
primary aluminum produc¬
tion, earning power will fur¬
ther be doubled by 1960—
surely an outstanding achieve¬
ment even in a growth in¬
dustry.

son

A Blue
; >

advanced

to

in

the

drug and veterinary

fields, and operations abroad

being expanded. :With the
selling at barely 10
times this year's prospective
earnings, < < its growth ■ char¬
acteristics seemingly are not
are

stock

over-discounted.

Promising Utility
Also

having growth char¬
one in
the
utilities field, is West Penn
acteristics, > this
Electric at 28.

Chip's Pros and Cons

serving

International Business Ma¬ company

active stock of the week.

y-

;

.

is

Penn

West

a

holding

broad area

a

covering parts - of Pennsyl¬
vania, West Virginia, Mary¬
land, Virginia and Ohio

—

a

territory with' great natural
resources ; includingr bitumi¬

limestone, /glass
and with a

coal,

nous

sand and timber.,

widely diversified group of
Whereas the issue seems,
With its
industries. Modernization, and
long-time pre-eminent position high to many on the basis of automation of the industries
and experience, it is felt to statistical standards of anal¬
already served, along with
be in a position to capitalize, ysis, the issue is still liked by
the addition of new compa¬
nuclear

apparatus.

vast international

on

Central

Telephone Company
Earnings

s

633,725

^Preferred Stock Dividends.

for

,

702,134)

....

-

Balance

;

V 2,375,939

Minority Interest..;
*

Central Telephone

Net Income for

; 3,078.673

.

.

Interest and Other-Income Deductions.

Minority Interest.

16,889

27,685

7$l 77.777'.

.,.........

$14,186,385

.

Thursday, June 13, 1957

in 1956; with $7, not counting
largest chemical, com¬
pany, Olin's major fields of $1 a share additional from
interest besides chemicals in¬ unconsolidated; foreign
sub¬
clude arms and explosives, sidiaries^ expected this year;

.

1956

.

fourth

widely-diversified
industrial complex, operating chines, up in the 300-price
not only in Western Europe range, continues on as a high¬
but also in every country of ly-favored trading vehicle,
with a market volume of 77,the free world. The company's
800 shares registering in as
products range from ordinary
the Exchange's eleventh most
light bulbs'rand Components,
a

.

bined

/

This "Dutch General Elec¬

tric"

omelette.

.

a

on

this

scale,

long-term investors nies in the field of aluminum
wholly apart from the current
production and electronics,
tomation, atomic energy and split and rights factors. The
give an added push to the is¬
the resulting higher Jiving
potentials internationally and sue's
prospects. And in the
standards. 1956 profits showed via defense demand at home
residential sector, the com¬
an increase of 6.7% over 1955
are
the
main
factors
now
pany's main subsidiaries have
results to
$3.57 per share, stressed to fulfill the targets
recorded gains considerably
with $4.00-$4.25 expected in
appropriate to justify the cur¬ above the national average.
1957. At its present price of rent
stratospheric price-earn¬
At 28 the dividend of $1.50
38, the stock yields about 5%. ings ratio.
era

many

of electronics, au¬

1

CENTRAL TELEPHONE COMPANY

By this and various other sta¬
tistical criteria, Philips com¬

$1.47

604,019

strategic position in¬ point to the steady climb of
is Guaranty the price-earnings ratio to a
Trust, the nation's seventh multiple of 37, with the im¬
largest bank on the basis of plied assumption that sales
deposits, and the fourth larg¬ shall multiply each six years;

(including dividends from

subsidiaries)

558,095

1,394,292

369,783

360,809

1,033,483

155,406

.........

490,917

1,649,264

1,279,481

Net earnings

147,415

Interest and Other Income Deductions...
Net Income
Preferred

Stock

Dividends

Balance for Common Stock

Earnings

per

Common Share

$ 1,124,075

of

shares

Central

886,068

$1.76

$1.51

outstanding at end

of year

Number of

$

on-

Average number of shares outstanding
Number

$ 5,389,932

$ 5,916,425

Operating Revenues
Other Income

$1.56
Shares

of Common

In

Stock of

Telephone Company outstand¬

December 31, 1956

720,593

1955

est
NOTE:

Since

Fort

Dodge

Telephone

Company

Telephone Company on July 31,

phone
Fort

Company
Dodge

have

Telephone

been

was

merged

into

for

to
the

include

the

applicable

operations
periods

of

since

September 30, 1954, date Central Telephone Company acquired control.




a

on

the

basis

of

Central

1956, the earnings of Central Tele¬

adjusted

Company

in

a

generous

yield of

5.4%, which is considerably

of this in¬

above the average

dustry. With earnings on the
increase —to $2.15 last year

$2.06 in 1955—a rise in

from

dividend

and

expected

in

near

all the -way

$1.15 in 1946.
views

[The

r

share
from

\

expressed in

this

not

necessarily

at any

coincide

with those

of

article
time

reasonably

future. Income per

risen

has

yield may be

the

do

the

"ChronicleThey are presented
as

those of

the author only.]

vestment-wise

ing at—

December 31,

IBM bulls further

point out,
rebutting the statistical
pares most favorably with its
frustrations, that long-term
American industrial counter¬
investors
who
bought the
parts.
stock at a high of 14 times
earnings in 1947, at 25 times
Beneficiary From Rising
Money Rates
earnings in 1955, and at 34
Also off-the-Exchange, bank times earnings in 1956, have
become
well
rewarded.
stocks comprise another cate¬ all
gory eliciting increasing in¬ The stock recently rose to a
vestor
attention.
Here
the level 17% from its 1956 high,
immediate fillip is provided 83% above its 1955 peak, and
by the all-over rising course 850% over its 1947 top.
of money rates.
Bears, on the other hand,

SUMMARY OF CORPORATE EARNINGS

affords

funds.

Net

operating
a

the

rate

average

earned and in

Fla.—Mary E.

and call attention to the dwin¬

Coffey, Norman J. Duval,

earn¬

dling of the dividend yield to

A.

of interest

part to

MIAMI SHORES,

capital

sizable rise in 0.8%.

ings, due to

Join K. B. Stucker
^Special to The Financial Chronicle)

an

in¬

be
the

In any event, it will

most

interesting to note

market

course

of

this

Samuel
Rob¬

Goodman, and Robert F.

inson have become

Kenneth " B.-

affiliated with

Stucker

Investment

Securities, 8922 Northeast
Avenue.

Second

Volume

Number 5646

185

.

.

.

The Commercial and Financial Chronicle

(2745)

21

1

Chicago Inv. Women
'

Donald S.

Re-elect Mrs. Burhans

hans

of

Dean

Witter

•

-

'*

.

&

Co.
1

re-e

The

was

e c

First

Witter

Electric

t e d

industry's trade association re-elects Donald
S. Kennedy as President, and J. Wesley McAfee

President of
Women.of

Chicago for

Vice-President

as

•

25th

at

Annual

a

Wo.'--

"t

'nv

v

a

t'ftu

t

a

Convention.

.-wi

* 7**

*

r.

Co.

of

of

group

and

Carl

M.

underwriters

stock

Net

Loeb,

making

North-

-

(par $4) at $15.75

per

7v

~

earnings of the company for

$21,340,000. ? Comparable figures
for. the first quarter of 1957: were

*

W* net learnings; and
$5<996>000 Pquity in affiliated company ®arnings*?■...■ : - ;
i

-

-

•

'

,

mar¬

sedated affiliated companies Tor
the Period from March 16 through
Dec* 31, 1956 was approximately

Twenty-fifth Annual Convention of the Edison
frrmV ^ > ,7 ^
;ern
Trust Co.Electric Institute; held in Chicago, .installed Donald S.: the stock will be received
by s<bllL was also, reKennedy for the second consecutive time as its President;, ting stockholders. Of the 900,000
.elected
Vice-;
•Oii June 5th. Elected to the Vice Presidency was J. Wesley; ^shares, some 759,800 are owned by
Presi de n,f.
r * ;
v '-'vi V
McAfeeMr' Kennedv
'v
Kaiser interests'^ and the remain-Other officers;
^ing : shares -were
" ther of

aggregate

an

June 7, 1957 of over

the year ended Dec- 31» 1956
amounted to $14,971,000 after a
?redit °n Federal income tax and
its equity in-earnings of uncon-

Dean

June 11 headed

on

share.

-

Corp.,

on

$483,000,000.

public offering of 900,000 shares
Kaiser. Industries Corp. com-

mon

/The

&

Boston

Rhoades & Co.

1957-1958. Lu¬
cille B. Guen-^

ket value

Common Stk. Offered

Institute

CHICAGO, III.—Agnes C. Bur¬

companies had

Kaiser litduslries

Kennedy Again

-

"

"

VivianV

were

R.VJ

h

e s

of

r

Reynolds

,

&

-

o

i:

'

II Co., Recording,;
Agnes

c.

na.UJU«

Sec

-

r e

t

a r

^

Gas & Electric

.the Union Electric

.

•

St. Louis.

The

Uunaiu

of

the

W. C.

associates offered yesterday (June

plus

accrued

interest,

The
group
of the issue June 11

bid

100.1599%;

of

1957

in

the

part

construction

mated

to

cost

McAfee

J. W.

of

100%

owns

the

of

Willys

Motors, Inc.

former conducts

gineering and
is

and

ness

To Be Hirshon,

The

substantial

a

construction

New York

New York Stock Exchange

will be

to Hirshon, Roth & Co.
Emil J. Roth, member of the Exchange,
will become a general
changed

Kaiser

are

44 Wall Street,
City, members of the

of Hirshon & Co.,1

en¬

busi-

a

The major affiliates
Steel

Roth

Effective June 10, the firm name

major producer of
sand and gravel in the San FranCisco Bay area.

partner in the firm, and Eva B.
Ungerleider and Selma UngerCorporation, 45% controlled; and leider, limited partners. They were
Permanente Cement Co., 39% con- formerly partners in E. J. Roth &
trolled. Kaiser interests in these Co. which will be dissolved.
Corporation, 80% controlled;

Kaiser

Davenport, Executive Vice-President,

Angeles, Calif.
T. W. Delzell, Chairman, Portland General Electric t
Company, Portland, Oregon.
C. S. Dinwiddie, President, New Orleans Public

Aluminum

Chemical

&

,

$74,000,000.

CENTRAL ELECTRIC & GAS COMPANY

Service Co., New Orleans, La.

company's

program, * esti¬

Willis Gale, Chairman, Commonwealth Edison Co.,

;

The

the

funds

and Subsidiaries

•

Chicago, Illinois.;:'y ;;
%/v;."/
;7
v'/V;..':
M. L. Kapp, President, Interstate Power
will be secured from additional
Company,
:
financing and from general funds
Dubuque, Iowa.";
7-V •'V.7r n
; :77";v''
of the company.
v
W. T. Lucking, President, Arizona Public Service
Co.,
A sinking fund will retire $20,Phoenix,. Arizona.;
;/':"
7 ;7' *»'.'5'
'W 7:7 %%77*;"7.''
000,000of:the debentures prior
W. W. Lynch, President, Texas Power &
Light Co.,
to maturity.
The debentures are
redeemable1 at optional redemp¬
Dallas, Texas. 7 "w ;./;7;.r: /; 7-/:-*-;
tion prices 'ranging from 105.96% •; V; L7 L. C.
McClurkin, President, Savannah Electric & ^
to par/ while; sinking fund
re-r 7 Power Co.,; Savannah,
Georgia^;
^ '■£7^•>
; demption:
1
prices
range ; from
t
John J. McDonouglvPresident, Georgia PowerCo-v-/. ;
100.96%- to par,;
/V *
:
/v '
Atlanta, Georgia;
7* /" ."/ ^/^7^"V"7,':"^"""7;777'7,V' ;>
Consolidated Natural Gas Co. is
7
A. R. Schiller, President, Public Service Company of / •
engaged through five operating
New Hampshire, Manchester, N. H;
companies
in
the
natural
gas
- *r
business;; The subsidiaries con¬
G. W. Van Derzee> Chairman, Wisconsin Electric
stitute an interconnected natural
Power Co., Milwaukee, Wisconsin. 7
•'777.'; ,/'--7:
gas system engaged in all phases
J. Theodore Wolfe, President, Baltimore Gas &.
of
the datural
gas
business
Electric Co., Baltimore, Maryland.
production, purchasing, gathering,*
* 77 / 7
balance

It

bond business.

and

/

proceeds from the sale of
debentures will be used to

finance

Reeves was

stock of Henry J. Kaiser

and

Imperial beauties.
Mr.
formerly in the stock

Chrysler

Corp.

'

Net

the

ex¬

Southern California Edison Co., Los

a

Industries

York

Inc.,- New

was present at the Bond
Club of New York outing*with his

city»

Co.

Bell, President, The United Illuminating Co.,

James F.

to

won
on

Manhattan" Co.;

corporation's

common

Cocke, President, Duke Power Company,
Charlotte, North Carolina.

Company de¬

4.80%.

terms

Reeves, 7 now special
representative -'for \the> Chrysler'

stock.

companies.

N. A.

bentures due June 1, 1982 at 101.-

085%

Insti¬
Direc¬

New Haven, Conn.

$25,000,000, of 4%% Consoli¬

yield

of

With Forward Look
Sims

R.

18,680,643 shares,
the

>;

McEachern

direct and indirect controlling in¬
terests in a number of affiliated

Walter

White, Weld & Co. and Paine,
Webber, Jackson & Curtis and

award

of

Kaiser

pire in June, I960, are:
Beckjord, President, Cincinnati Gas and Electrict Co., Cincinnati, Ohio.

Gas Debentures Sold

Gas

whose

tors,

Kennedy

o.

sifyi

newly elected

members

Consolidated Natural

Natural

own

81.3%

common

New Directors

tute's-Board

dated

continue to
or

:

secretary;

sistant Treasurer.

12)

Co.,

"

>

■

A.

"Investment Co.* I o 1 l o wi n g its
/merger into the corporation in
"May, 1957. After the sale of these
shares* the' Kaiser interests will

Co,/Mr.

McAfee is President of

y

Audrey F.;
Miller of Wellington Fund, Treas-urer; and Marjorie H. Rosen of
Mullaney, Wells & Company, As-,
sponcung

stockholders of J.

B(0jard, 6f the pklaHoma '
.

J ; Ruth T. Miller ,:
of Hornblower & Weeks, Corre-,.
v.>f:

as".Chairman of the

*

R. Sims Reeves

/acquired "by

.

required

SUMMARY OF'CONSOLIDATED

EARNINGS

Year Ended December

31

1955

1956

.

*

/
.

Operating Rtreaieii'
"
'Telephone
.....;....i.....•.•

••

-

Electric
'7

'

„

T

"

■

e^'e

•

e

•

•

e.e

•

f

• •

•

• • •

•

•

•

•

957,514

^

Operatinf Income ..,. ....«. Mit##i*

$ -5,325,639

Net

,

$ 4,490,202
62,020

••

7U37

Net Earnings

............ .a.. .

.....

$33*341,868
-28,851^666

31,032,222

Other Income

(

^

$36^57360

Operating Expente*"a£<l Taxes—see Note

-

$17,339,120,
15^85,962
916,786

15,887^27

•.

*
r.z. •••ti'wi •'
♦•#•#•••••♦ e a • » • • • • •

©1®I

7

$19,512,419^

'Cae-i'.......'.»»»«••«•«.•••••»•••»»...

■

$ 5,396,975

$4,552^22

'

" 1,249,798

1,174,031

$ 4,147,177

$ 3378,191
1385318

■

Interest and
*

uct

operations.
at

served

Akron,

Warren,

Principal

retail

The

Cleveland,
Canton,

are:

Youngstown,
Massillon,
Niles

Marietta

Mr.

cities

Minority Interest
Net Income

.

Ohio; Pittsburgh (a
portion), Altoona, Johnstown and
in

Clarksburg,
mont

and

Pennsylvania; and
Fair¬
Parkersburg,

Morgantown

in

West

Virginia.

Joins C. D. Cevaal
(Special to The Financial Chronicle)

urer

he

LAKE

WORTH, Fla.—WilliamA. Lockwood has joined the staff
•

of

Calvin

Securities,

D.

Cevaal

810

Mr. Lockwood

and

1949 when he

so

He

was

a

Jerry Thomas

-

-

Net

Operating Income..
Other Income (including dividends from
subsidiaries)

With First Florida

Collins,

(Special to The Financial Chronicle)

are now

-

—

.

a

'

»

Preferred

14,633,858
$ 1,368,890

669,661

Stock Dividends
.

.

536,480
$ 1,905,370
399,195

445,721

$

$ 1,736,631
246,272

Balance for Common Stock..;

(Special to The Financial Chronicle) '

$16,002,748

15,332,750
$ 1,512,691

Deductions...

Net Income

With Lakewood Sees.
..

$15,085,962
916,786

$ 2,182,352

Earnings

Interest and Other Income

-

EARNINGS

$16,845,441

Total

-

p-

$1.36

$15,887,927
957,514

Operating Expenses and Taxes—see Note

—

:

$1.37

$1.59

Electric"

Net

(Special to The Financial Chronicle)

$1.59

outstanding at end

Gas

elected

activities throughout the

many

$ 1318307

per

Operating Revenues:

was

driving force in

$ 2,148,098

of Central

SUMMARY OF CORPORATE

could

he

Stock

Company..

CENTRAL ELECTRIC & GAS COMPANY

entire State.

PALM BEACH, Fla.—Ernest M.

Stockton, Sr., Ernest E.
Sr., and King R. Thaxton

Treasurer

$ 1392,873
;
173366

of year

y

elected President of the company and
Chairman of the Board. An avid booster of Oklahoma, he

was

has been

'

as

Common

Number of shares

director and held these offices until 1947 when
duties

246,272

;

Common Share on—
Average number of shares outstanding

Earnings

Executive Vice-President in 1947 and held that office until

Avenue.

previously with
Frank B. Bateman, Ltd.

Join

a

relieved of his

was

for

Indiana

in

Gas
$ 2^94,370

Electric & Gas

educated

devote full time to administrative work.

Investment

Lucerne

was

&

Company
Balance

public schools, Butler University and the University of
Arizona, and was graduated from the latter with a degree
in accounting and economics in 1923.
He joined Okla?
homa Gas and Electric Co. in July of that
year as a book¬
keeper in the accounting department and progressed
steadily through various positions to that of traveling
auditor. In 1940 Mr.
Kennedy was named assistant to the
treasurer at the
company's headquarters in Oklahoma
City. Two years later he became Vice-President, Treas¬

and

in

Monessen

President

*1,752,807

;

for Central Electric

Preferred Stock Dividends.;...........

Kennedy's Background

re-elected

,/-

.

Net Income before Minority Interest....

—

transmission,, storage, and distri¬
bution, together with by-prod¬

Other Income Deductions

•.

$ 1,490,359

"

1^75
173,566

'

with

Jerry

Thomas

&

Co.,

Inc.,

ORLANDO, Fla.—John R. Barna

238 Royal Palm Way.

has

been

added

to

the

staff

of

First Florida Investors, Inc.; 51-53
East Robinson Avenue.

Joins W. G.
-

—

Earnings

LAKEWOOD, Ohio —Mark M.
Morelli

rities

is

with

Lakewood

Corporation,

Avenue.

Detroit

14714
.

.

.

.

of

-

Houston

(Special to The Financial Chronicle)

Common Share

on—

Central

/

ing. member of the MidwestStock
Exchanges Mre; Chip was previ¬
ously with'A. G. Edwards 8c Sons.

John Harrison Adds/ 7

V
;

-

(Special to The Financial Chronicle)' ;r *•.'

-

r

Joins Central States

-

7.

^Special to The Financial Chronicle)

ORLANDO, Fla.—Rufus Barring
| MANSFIELD,, Ohio — Harry P.
ger is ftow with JFohn If. Hfedriipm^Snydfer has /joined the* staff/" of
& Company, FIorida National Central
States. Investment: Co.,
Bank -Building:
;
.771 271^ Poplar.Avenue;"/;t:.
,

*

.

'

_

$1.11

Electric &

Gas

standing nt
7- December 31, 1956.
.

/

$1.00

$U0

$ -99

1,351,951

year

Number of Sharea of Common

7 QUINCY, m—Dorothy L. Culp
has: joined
the staff of W. «G.
^Houston & Col, Mercantile^Build¬




pet

Average number of shares outstanding
Number of shares outstanding at end

Secu-

^

Stock of

Company out¬
,.•

"

.December 21, ISS5.

»

.

NOTE: BKlttdCB gaa

yearns.

purchased ot $9,386,032 and-$9,517,737

7

'

7

-

,

1

s.

,

'"7-,

•

in- the respective
——'7./

22

The Commercial and Financial Chronicle

(2746)

in

Here

By EDWIN VENNARD*

Institute

continued

attributes

director

•

are

solution

but

be •'

will

difficult;

surveys

people

the

of

ation

groups

hies have done in,the past give us*
reason
to believe that there is a
nomical

ard

government

of

living in America because

here, man has largely freed him¬
self from domination by govern-,

things that

available

solution

industry

if

—

the

pursue

The

some

to

us

as

tional

an

of

these

efficient to

and

communicating

use

na-

priedia

•

to

those

present
those
facts
arid
issues that were-common

are

course

activities

compa-

willing.to
it indicates.-. -

we

business

power

of companies that
were
working together quickly :
learned that it was more ecoThe

certain

did, that man was created
God and that he should be
free to work out his own destiny.
We have reached our high stand¬

the '

changed.

its

by

field, despite excellent record and

encroachment in the power

power.

Obviously, the problem we
discussing is complicated and

and authority of the state.
believe,
as
our
founding

Thursday, June 13, 1957

.

showed that when
had the facts, their
attitude toward government oper-

these

socialized

fathers
».

Electric Institute

Edison

Electric

'

.

the dangers inherent in

We

Managing Director

and

national therefore largely indifferent to—

our

power

Of Government Power Zealots
Vice-President

America,

philosophy places emphasis on the
dignity and importance of the in¬
dividual as distinguished from tne

Uninformed Public Best Asset

.

.

r

all}

to

companies. The participating comment, and has taken an active part nies had their-beginnings in the panies began using those medial
despite substantial opposition, to a strong correlation between
'thirties. At. that time the electric because they were more efficient,
in .working out his own destiny.
knowledge of facts and opinions. Mr. Vennard recommends;
Over the past 25 years -there industry was faced with a scarcely;;more economical and. more effec- *
going to the public with the economic facts of life now that
disguised all-out effort of public ..five on this kind of issue.
i
has been an increasing tendency
the curious habit of the American people, to believe in
on
the part of many Americans power advocates aimed at govern- r Illustrative of the-kind of re- }
ment operation of the power busi- suits they obtained is the response ;
collectivism when uninformed and to believe in free enterprise
to call upon their government to'
do for-them more
and more of ness. It had many fronts,, it took;; to one survey on the question of ;
system when informed as to the facts about our economy, is
it was partly rates, made in 1943. At.that time, '■
those things which the individual many forms," and
established.
In recommending an information program for
successful.
V
;
1
only 19% of the people questioned
citizen can and formerly did do
During, the early 'thirties anew expressed faith in the companies' employees, stockholders, opinion leaders and the general
for himself. This is not a party
sampling} public? ability to deliver electricity at a
matter; in a free society where technique; of
public, the industry's spokesman warns of the difficult task
government is subject, to the will opinion came} into being. / Two reasonable price. During the next
ahead in order to preserve for posterity the benefits of freedom
scientists in the field of opinion eight years, there was a steadys
of the people, when men call upon
America's
electric
misunderstanding
over, their government for services or research, Dr. George Gallup and increase in the number of people .
light
and prevent
Dr. Claude Robinson, developed a who- thought local electric
rates »
for money, the government will
we talk
of social,
power companies face a challenge words.; When
formula under which the sampling were reasonable.. About the end and political systems, attempt to supply it.
—a
challenge
presented
by
a economic
„
„,
could be carried on with a high of that period, the Mutual Life
often
run
into
confusion
problem that has been with us for we
i
No Popular Demand
}
degree of accuracy.. Here was a Insurance Company made a sur-;
caused
by
the
different
terms
many
years.
The irony in the case of gov¬ new-tool to assist power compa- vey to find out what commodity,
people use to describe these sys¬
Although it
tems. \ Basically,
there are only ernmental encroachment in the nies in their public and employee people thought gave them the
may have a
relations activities. By this sam- most for their money. The overtwo systems. At the risk of over¬
new paint job
power field is that thefe has never
was
electric
from time to
simplification, we can say that been a genuinely popular demand, pling process, it became possible whelming choice
there is fm the one hand the sys¬ for Federal power. However, for to find out what people liked and service. A survey made this year
t i me,
the
what they disliked, and to find by Opinion Research Corporation
tem under which people rely On ; a
long time there has been
a
ever-present
knew and what shows that 68%
of the people
their government to do for them small, dedicated band of public put- what - they
threat of gov¬
not know
about
the asked feel that electricity gives
those things which they can and
ernment
enpower zealots who have worked they-did
good value for the money.
should do for themselves. Under, tirelessly in promoting it. Whether power business.
c r oachment
compa-

-

.

.

.

„

„

,

•

.

.

into the power

systems

business

what

has

kept the
old

same

and

driving

Government

takes

order

business is but

a

bigger problem
concerning man's freedom. This
bigger problem has to do with the
kind of

men

As

a

society in which
Americans, we have
fellow

our

citizens

The

live.

pork-barrel

between

objectives

but

maintain

to

no

from

find

our

own.

effective

solution

'
*'•

to

;

"

'*

'

-

an

'

All

these

all r history, perhaps
beginning of time..
those systems under which,

first
*An

the
son

5,

of

all

clear

address

25th

Annual

Electric

1957.

by

Mr.

the

air

Vennard

Convention

of

us

and
before

the

in

mind:

that

there

many

Edi.-

Institute, Chicago, III., June
;

is

absent

—

where

to

govern¬

This is not to say that those in
believe in so-called

America who

"public

the

:

power"

communists.

socialists

are

Most

of

them

or
are

companies
this

of

use

decided
tool.

They

their

own

new

opinion

in

must

rely

for. their

upon

personal

govern¬

not; most of them

security

icans.

But

there is

is the

essence

tio'ns.

■;

of
...

they

" made

to

in

favor

half

"To

of govern-

get

,

in

continues to expand steadily and
substantially

the

center

of

the

prospering Great

"

Southwest.

1956

1951

% increase

$48,228,000

$29,255,000

65%

}

Operating Revenues

$ 9,429,000

$ 4,960,000

90%

.

ating Revenues

19.6%

1

,

.

Decern-

price of

320,195

_____

_____

277,596

15%

$222,106,000 $133,763,006

of

728,900Kw

66%

'

342,301Kw 113%

620,000Kw

343,800Kw

80%

.I.,'*

Write for

our

information of

our

service

more

complete

area.




Harvey, Oklahoma City 1, Oklahoma
KENNEDY, President

not

was

price

and

aware

companies

embarked

toward

might
to

answer

number

favor of

some

of

of

social, economic and
principles espoused by

same

political
socialists
seemed

and

communists.

be

to

the

on

in

were

of

part

There

strong tendency

a

people

many

to

look with favor upon government

operation and control of the econ-!
omy—a tendency on the part of
the people to call upon their gov-'
ernment

take

to

care

of

them;

*

Lack of Economic Knowledge

previous

belief .that

experience

with

these

attitudes

could

found

pie

of this

wondered

on

government

change. To find
question they

this
a

of

program

designed

about

the

to

ad-

let

power

people
business

it did about 20 years

From

the

they

surveys,

other instances where peo-

were

uninformed

about

designed

machinery has to earn

our

information,

or

misin-

business.

programs to

too.

a

fair re-

turn in order to encourage people

^iefon"to

of

and its price record. In this advertising they repeatedly used the
phrase, "the average family now
gets twice as much electricity for

this

DONALD S.

the.

~earcb was ca ricd on
this was so.
People

half

operation

formed

North

average

gen-

The

ago."

OKLAHOMA GAS AND ELECTRIC COMPANY

substantial

a

people

to use their savings to buy more

a

its money as

321

ever

high, apparently the

attitude

know

1956 Annual
Report for factual and

that

at

product—electricity—

living is two

as

vertising

•

r

rates
any

whether, if people knew the facts,

the

System Demand

or

declining steadily

eral public

the

Generating Capacity

electric

since the birth of the industry.

trend.

Electric Plant

our

been

times

__

aboutthe

and

philosophical
questions.
answers
to
these questions
given in the late 'thirties showed

The

household electricity is only 34%
of what it was in 1916 while the

17.0%

live

we

also b€ traced to a lack of knowiall?"
Only 13%
said they had edge of facts—in this case facts:
been
said about our
American capitalistic
reduced, while 60%
they had not, or that they had system, about how wealth is prorisen. Twenty-seven percent had duced, about profits, division of
no
opinion.
Apparently
people income, the place of machinery in
didn't
realize
that
the
average
our economy, and the fact that

cost

Served

ber 31

the

Although the

Percent Net Income to Oper-

Customers

"Have

the

came

were'The price issue gave reason lor the

people

survey,

the

important
to light
kind of society under
some

The

the

want

here been reduced much

had

Net Income—

one

asked,
-

People

,

best price they can get.

In
.

,

asked why.
the people replied
lower
rates."
This
is

of

understandable.

about

tained

this,
discovery,

the interviewer

ness,

business,

,

research

this

attitudes

preservation of freedom. The pub-,
lie
opinion
surveys
often
con-;

Lack

doing

were

of

course

pertinent facts

which

another

was

the

public

and

.

they

informed,

in

power

■

While

Fully

•

>

on

\ '

ment operation of the power busi-

.

are

good public rela-. about

Unfriendly Attitude Due
< \.
O}
of Facts

said he

•

make

areas and
in larger areas
covering. many states. By doing
so, they learned
that they were
doing some things that people did
not
like, and they did less of
them; they found out the things
they were doing that people liked
and they did more of them. That

grave

OKLAHOMA GAS AND ELECTRIC COMPANY

problem. It is not enough to^
the price fair and reasonable. The fact must be told. The;
results show how fairly the Amer—
ican people respond when. they,

our

service

good Amer¬

are

This price story illustrates ant
important point in the analysis of

to

They learned that many people
were very poorly informed about
danger the
power business. They learned
—have in common the fact that that without
fully realizing what
at the same time that a large share
the government either owns or they are
doing, these people may
of the unfriendly attitude toward
operates the machinery of produce fall into the same trap that has
the industry could be traced to a
tion. In all such cases the govern¬ cost many nations their freedom.
lack of knowledge of facts.
ment owns or operates the power
By'far the greater number'"of
-. '
For
example, when a person
business as part of that machinery.; people are still unaware of—and
citizens

ment

seeking that solution, let

doubt

two; and there are others who have an
interest
in
continuing to enjoy

the

freedom

,,.

Opposing Systems
In

is

people who are sin¬
cerely
convinced
that
"public
ownership of power" is desirable;

are

throughout

problem. We will be helping when
we

there

nations everywhere today. It is an; the subsidies granted
ment power users.
issue
that
has
faced
people

ourselves to help solve this bigger

of

sampled

It may be that some have political

a

fair

choice

-Some individual companies and

groups
make

systems is the issue that is facing

to

as

with

men.

duty to

well

as

himself,

government

and

whether they view the

or

"■

ping stone to changing our form
of government, we cannot :judge.

is the

play. Under sys¬
tems of this kind, man retains his
freedom from domination by other

much

a

of

care

limited

power

of

part

motives,

system under which the individual
Vennard

Edwin

encroachment
the

they have the purest of altruistic
federalization of power as a step¬

On the other hand, there

hanism.

into

kind, no matter
people give them, the

individual is not free.

chassis

m e c

this

of

names

They
give people
.

were

tions

about

much

are

asked

fact

ques-

economy: How
Profits? How much
our

they be? How is income

should

divided between the employees
and the owners? Are you for or
against machinery? Do machines
Put people out of work?- Does
government produce wealth? Analyses of the answers given to
tbese questions of fact revealed
a great lack of knowledge on the
Part
many people,
The results showed that when
people are informed as to the

about our American econthey tend to believe in the
free enterprise system; but, when
people are uninformed as to the
facts

omy,

facts about the capitalistic system,
they tend to believe in collec.

tivism

—

the

system under

which

Measurements of knowledge and
attitude
were
made
before
and

government operates the economy,

after the programs.

the

t

In every case

This
'

one

was

a

situation similar to

encountered on the price

Volume

.

.

people

Uninformed

issue.

5646

Number

185

The Commercial and Financial Chronicle

.

were

thinking in terms of government
operation of the economy. This
fact gave reason to believe that if
they

informed, they would
principles of free enter¬

were

favor the

prise.
if

see

valid,

V:

y

To

this

all the taxes

panies

that power

com-

was

experiments
were
con¬
here
and
there, in this
and in that one, in this com¬

and in that company, among
this group of employees and that.%
They tried various means of com¬
munication—advertising booklets,
lectures, conference techniques—
pany

clause is

preference

a

de-

,

..

do

to

our

tax-free groups. Now,, Tennessee Valley and navigation
government expendi- on the Tennessee River.- All but

tures are at

a

.

plants
The
(i) TVA Has Changed. The com- generation of power for sale is a
piexion of TVA has changed over 'business, and, like all businesses
the" years. Originally, it was in- in America, is a function of its
tended to be a project for the citizens and not of the govern.

shall
have
determine the relative effi¬ and ;■ cooperatives
ciency of the different ways of preference in the purchase of this
government
power,
communicating with people. The subsidized
interesting fact is this: In every,, Thus, the preference clause tends
case, as people learn more about
to perpetuate and expand the evil,
our American free enterprise sys¬
It
encourages
the formation of
tem, they tend to become more
strdngly in favor of it, and they
tend to refrain from calling upon
government

more

record level, a wide 1% of TVA's electricity was hydro
vice under which the 80% of the
and equitable sharing of the na- power in 1939. Electric power
American people who get their tion s tax load seems imperative, generated at these dams was to be
power
from
taxpaying
power
TTnfnrr>«PPn tva
rhan^c
"incidental'' to the primary funcer ompanies
are
discriminated
tions because it was believed then
against in favor of the 20% who
rV A is a good example of a that under our Constitution, the
get their power from a supplier government]power project.
An Federal Government could not
exempt from Federal taxes.As analysis of the TVA power busi- build power plants for the sole
will be shown later, government nesf W\V s"°)v now the factors purpose of generating and selling
subsidies
e n a b 1 e * government
nnder discussion enable govern- electricity. The incidental electric
power projects to sell power benient encroachment to continue power was to be sold to the
low cost at the expense of the despite the fact that it is against people of the area.
;
nation's taxpayers. The preference the will of the majority of the
The TVA Art Hop? nnt nnthnviyp
clause states
that public bodies people. .
V
TVA to build steam
The

tp

the

even

when

pay.

.

reasoning

ducted
town

of

(2747)

building

of

a

series

of

dams

ment.

primarily for flood control in the

(2)

Changed
75%

Since

A

efforts

of the
risen

of

to

the

voted

82%.

to

old

as

time itself. This philos¬

as

ophy

"government

of

me"

the. loss

and

inherent

in

kind

agencies

Atomic
(AEC>-

tory.

It is

take

thing.

»mi

v

•

•

Energy

of

Many
efforts

then

us

to

'

began

* "•"

earnest

explain the facts about

Iff

£

this

theie

reason

is

optimism about what
the

in

future.

indicated

tion

hands.
have

be done

can

This

for

rcom

research

has

that

to

possibly the solu¬
problem is in our

our

We have

the facts and

various

the

'

'

wavs

of

1

w

•
•

-

A £

I 'J.«

t 'fv#

*%- M * .#, .«■:«

£ £ a

£

the

business con¬
excellent

power

record in the

jfinance,

of

areas

sales,

£ £

£ £

M M

<^> ^ ®
%\
it £ • £ £ £
•]•*;■&
1»'4

i

:■

:>-x

:<■>; *

«:««(

»;£•■• • £ •
\

•

#• £ £ £

£'££.£ £

•••••

•''■#' A •

ft

«>»i

£

'«

» > (

t

*«»>

•
m

i'

*(>&

:

?<*■**

rs

3

XASK

;<

v

'4

engineering,

economics,

price,

and service? Why does it continue

despite the fact that

majority of

substantial

a

people don't want

our

it?"

/

'...Perhaps

is

to

say,

basis of this research

the

on

has

i+

that

been

now

safe

that it continues
majority of the
American people are unaware of
done,

because the great

basic facts:

'these

■;

-

jV,(l) Government gives
money

power

tax
without interest to Federal
projects, which are purely

commercial operations.

(2)

Government

money

cial

to

further

power

lends

these

operations

tax

commer¬

at

in¬

an

terest rate below the

market.price.
(3) Tax discrimination.
•
(4) Preference or discrimination

and the giant punch

the sale of government power.
In
the
case
of
TVA, for ex-

This is

.

in

,

'

ample, the Federal Government
has
given $1.4 billion of tax¬
payers' money for the building of
power facilities. The government
charges no interest and TVA pays
interest

no

other

cases,

on

this

money.

In

the Federal Govern¬

a

nuclear reactor^ And

neu-.

trons from the tons of pure

uranium
metal inserted in these hales produce
radioisotopes-r-the strange and won¬
derful prizes of the atomic age."
While these man-made radioactive
materials have been available for only
a short time in commercial quantities,

lends
tax
money
for the
building of power facilities and
charges an interest rate which is

they have already found a wide range
of uses—in industry, in agriculture

less

and in medicine where

ment

the

than

the value

of

the

use

of

money.

Government power projects pay
Federal

no

In

most

projects

income

cases,

taxes

pay

government power

no

local taxes.

projects

of local

.




the treatment of

cancer.

by Anaconda at its Bluewater, New
plant, have made Anaconda
America's leading producer of ura¬

being found
for uranium in nuclear power devel¬
opments. To meet these present and
future needs, Anaconda has developed
Every day

nium concentrate.

products are also
contributing to the expanding use of
nuclear energy. Many are used in the
actual production of radioisotopes,
while lead—another metal produced
in large quantity by Anaconda—is em¬
ployed as radiation shielding whereever radioactive material is present.
Anaconda's role in nuclear energy

new uses are

is

typical of the

way

in which its

ex¬

tensive line of non-ferrous metals and
metal

um ore.

These reserves, together with

new ore

processing methods pioneered

progress.

of millions of tons of urani¬

AnacondA

Other Anaconda

products—the broadest combi¬
nation offered industry today—is con¬
tributing to America's growth and

reserves

The

*

all.

Only
pay anything in lieu
taxes, and those payments
are
considerably less than the
taxes paid by companies. On the
basis
of
percent of gross plant
investment,
TVA
for
example
pays in tax equivalents about 1/22
two

I

at

radioisotopes
have practically replaced radium in

board

Mexico

C7280B

Company

The American Brast Company

;

Anaconda Wire & Coble Company

Andes Copper Mining Company
Chile

Copper Company

Greene Cananea Copper
}

Company

Anacdnda Aluminum Company
Anaconda Sales
International

;

WM

£.'£'£?

aft fft jjl,

w#m

J.T <■ ,T*

-j

£ •

•"Why does government encroach¬
in

m

fj*

we.

tinue today despite our

*

A.11 £ £

..

•

•

••

£■££•#. £,£;£ • t £

»:

m

.f £ £ f; •

^

com¬

municating them to others. For
people in the power indus¬
try have been asking themselves

1

*i

■

years

ment

i

a ••

Will

£ £ £ § '£ £

mm mm*

began

we

«

on

Ob A A
A

£ £ £ £ £ £ £

economic system.
that work, we
have
been
encouraged
by
the
gradual but, significant improve¬
ment which has been taking place
as
revealed by regular surveys.
Much has been accomplished. For
Since,

f

,

\

*

as

de-

to

the

Commission

Continued

I

American

our:

such

IJt-»;A

research, was to
be found a possible means to keep
that plague from striking America.-,

part

is

And so we have in TVA now a
project whose dominant purpose
is the generation and sale of electrie power. The Federal Govern-

•

this

power

power

"-•a4ia a 11
MM ;£;§ £ £
$ |

•Mm®

care

freedom

of

plagued man¬
beginning of his¬

evil

an

Here,, in

of

a,a.»'a

has

it

the

since

sale

Si 'mmi

1" §•*
,cX

in

substantial

established

as an industry are faced with
philosophical problem which is

has

investment

the

:

or the lack of it, and
philosophical beliefs. Today

only

Not

was

Federal

How the TVA Project Has

we

of

A

power

information

a

1950.

investment

unshakable correlation between

basic

the
oc-

facilities. In 1956, that figure had

Mi

have

of

has

power

Correlation

Curious

These
an

steam

relative size of the power portion
has grown as well. In 1939, 59%

-V;'

y,

Now, about
generation is

Most

the project as a whole been grow¬
ing in size at a rapid rate, the

those things which they can do

themselves.

plants.

since

curred

them
for

for

1939.

TVA's total

of

by
steam
growth of

23

Company.

Smelting and

Refining Company

J

page

30

The Commercial and Financial Chronicle

(2748)

24

of public power. Freedom
speech they assume is for them¬
selves, and for them alone. De¬
mocracy is interpreted as public
ownership. Truth is upheld only

Utility's Future
1
Depends on Consumer Attitudes

The Private

By KINSEY M.

ROBINSON*

utilities is

little over a year ago, showing
side to start with." Mr. Robinson calls
attention to the paradoxical - voters' opposition to socialism
and to public power, and growing acceptance of back street

public is

pensions and other* welfare
suggested recommendations of getting
closer to the public and acquainting them with the facts of
private utilities, the author advocates standing up, challenging,

spotlight

It

of propaganda

1

forcing

waste

for

our¬

elementary

them

to

si¬

that

Magazine"
Congressional ac¬
The April magazine openly
numerous

utility influence peddling and dis¬
advertising," The magazine
went

to

on

say

that

resolutions

which floods the ports day after day; to hear were passed at the last meeting,
This question calls charges of private utility greed first, to "ban dishonest advertising
and
ence

corruption; to catch the infer¬
that private utilities are re¬

y

does the elec~

is not being

survival."

done regarding

tarding

they

that

progress;

wasting

there is

<

information?

adverse

by

why

better understand

can

Fair Trade laws;" sec¬

under the

Do our

.customers nod in agreement when

customers

without

hear

and

believing

read

some

all

this

of it?

use

of

ultimately give
ownership. ( ,
•

us

gov-'

On another occasion, after testi-;

arrogant

ondly, to "amend the Federal

and

biased and J.

.

seemingly ; to me
unfair." This legis¬

lator went

on to say that all pri¬
utility people could not be asv
bad as the public power represen-;
tative said they were, and it was;
remarked that .it would be some-;

vate

to forbid the cost of

Revenue Act

the

had been given before a,
capable governmental committees
by a public power witness, one of
the Congressional members made
similar comment. He said, "I have
heard a lot of testimony in my
time, but I believe I have never;
heard one that has been quite as;

of propaganda as an expense
chargeable
to
customers;"
and
thirdly, to/"amend the Internal

our

ask, how

*

honest

in America—to read

attempt"

deliberate

a

mony

occasions called

investigation of private

for federal

impres¬

of

ernment

electric leaders

that "Rural

sad '

a

somewhere.

which will

Electrification

demands

on

infer

that this appears to be part of a
studied effort to establish policies.;

tigations." The April issue of.

says

integrity

taxpayers'
money to create and publish prop¬
aganda regardless of /the facts, i
which will result in destroying pri¬
vately owned, in establishing pub- i
lie ownership of, electric facili-',
ties." The report went on to say.

by what was termed "pitiless pub¬
licity and by Congressional inves¬

have

say.

The report leaves an

.

through

private utility program
stopped and forestalled

be

to

him directly,

remarks

of

.

sion

public power groups have

the

could

his

".

urged Congress to silence private
management.
A recent issue of
"Public Power" magazine asserted

tion.

utility
poisonous re¬

to a few simple book¬
and distributed by

because

Propaganda

Certainly it is well-known that
extreme

"Rural

the

across

as

prepared

I would like to quote

V

;

natural
resources;
that
manipulation going on in
finance; or illegal influence upon
Secondly, I would ask, to what
public officers—I say, cam our
extent is the public itself affected

5

lets

Power Act to forbid the deduction

us

more

our;

hearing,

the

Thursday, June 13. 1957

.

absence

j;'

One-Sided

also

Flow of News

.

private private utilities, had this

are

of

trie industry
stand with its

ask

we

in

a

the businessman in his office—all

is exempt, then the rest

m a

and

of them customers of every

introspection; for if any

we

climate of

a

Jones liv¬
street, or the at¬
tendant at the service station, or

company

and

means

Is it possible for Mrs.

ing

for spme

well

the law. And

of

/V;;

,

nation today.

consideration;

It

unsuccessful, these zealots

question
psychology.

the recurring

customer

industry.

came

enemies constantly smear

our

selves

is quite natural that we inelude in the list of serious subjects

problem of the consumer.
Therefore, again we wish
to give the

utilities

take

to

But, if propaganda fails, if it

arm

falsifiers who spread misinformation.

on

is

who seem to thrive in

....

of

lence.

time

of

intimidating

purpose

these

which

benefits

private

proves

mixed-economy,

Among

and putting

propagandists
for

of

discord would resort to the strong

on our

of

socialism

objectives.

formula

The

cause.

us.

Stevens County a

rience in

"the

ist

that

on

hours

when it is favorable to the social¬

from

the up-grade, though
stormy, according to water power executive who cites an array
of evidence, including his own firm's important election expe-

The road ahead lor private

countless

credit

Water Power Company

The Washington

some

of

skilled

Chairman of the Board and President

premise, and

shoddy

vocates

.

propaganda ill competing corpora¬

thing to.worry about, if.the TVA;
spawned the f type of arrogance,

tion income taxes."

It must not be forgotten that
Of
course,- it
may
be coinci¬ which •
articles or
this public power; repre-:
public? Do latthreats in radio repeat some dam¬ former President Truman received dental that present investigations sentative advocated.
/ ■;
f ; >
est barometer
24,000,000 votes when he last ran and the public power demand for
aging half-truth? Does the conI have still; another comment I
for the nation's highest office. And them occur at this particular time.
readings show:
sumer/see through this glitter oL
should like to read. It conies from
when he stood erect—as straight All I will say is this:. If these com¬
fair or stormy?:
propaganda, or is he slowly acas he
could stand—and said that mittee inquiries, and others prob¬ a representative from the State of
Are the winds
;v cepting it?
1 .
Iowa and isin answer to a letter
o f
consumer
V The third question I would dis¬ the private utilities were spending ably
yet to
come,
are
seeking
millions of dollars wrongfully, and after truth; if they are honest of from the local president of the
sen t i m en t
cuss has to do with private utility
should be investigated under the intent, then both sides of the ques¬ National. Hells Canyon Associa¬
mild, or is it
efforts to counteract this adverse
tion. Here is a tongue lashing that
Kinsey Robinson
possible that
propaganda. Has private manage¬ corrupt practices act; when he tion should be looked into. There
should be given wider publicity.'
adverse groups
ment made progress toward a uni- said that his heart bled for people is no other possible way to arrive
I quote: "Normally, I would not
'
^
have lowered attitude a few de- fied viewpoint? Now and then the whose life was "being skinned out at the truth..
^
One Congressman, after a re¬ waste my time in answering a let¬
grees?
Have we made headway advice is given that we should let of them by private companies," I
am
quite sure that someone was cent, and I may add, expensive ter so full of errors and misstateoyer the past year, toward sur- well enough alone. Some leaders
vival; or like Napoleon's historic say that the disparagement of listening. And the sixty-four dol¬
retreat, are we now compelled to others only worsens matters. Some lar question is, just how many did
listen? v
pause at a new position in order
may believe that the consumer is
to reappraise our manpower, and not taken in by this dense cloud,
Last week I picked up one of
to again take stock of our re- that he
accepts it for what it is— our western labor papers.
With
sources?
sheer propaganda. Others may be- customary
bitterness, the paper

millions

of

newspaper

'

.

*

,

There

be

to

seems

absolute

no

these questions.

to

answer

Actually, as the years go by,
Father Time has contributed both
gains

and

0

losses.

It

is

,

the

long

_

haul

we

few
_

of

as

plishment,
For

concerned

are

us.
"

—

-

result

a

feel

may

with.

of

A

accom*

satisfaction.

myself, however, I must ad-

mit

that despite the blessings of
growth and opportunity, there are
sufficient signposts pointing ten

ahead

years

make

to

each

of

us

disturbed. I do not stand alone in
this conviction.
|
When I chance

to

meet

an

ac-

c o ns u m e r does apparently endorsed an
amendslowly accept it.
Therefore, our ment to the Federal Power Act
third question asks, is it better to which would
regulate powers of

lieve that the

I!11™
1"on
'? 11 UZLZ 10
the Commission, so as to prevent
® /"A
Iun; Whet would hapPen if this great 4 assembly resolved another Hells Canyon decision
r\n
here an.d now to cl° more alD.ou^ favorable to private utilities. The
our serious problem of survival article did not mince words.
But
there are other kinds of
1 \vue ^ yesterday, and much
™°re than we are doing eyeii here propaganda reaching our custom¬
•

r»m«r

4L

Ml

M

<<

•

J

M

vnnro

r\

•»

/«

vt/-l

QhAiir

mi

tvi « >1

toclay.

ers.

Freedom of Speech
Does propaganda leave
tomers

convinced

or

our cus-

confused?

It

is

unfortunate, in a way, that we
live in an age of propaganda, and

that

the

population

can

be

ma-

For example, a series

Affairs

lic

of Pub¬

pamphlets

are
being
consuming
public.
I
counted
ninety-one
pamphlets on the list, and on the

offered for sale

cover

for

of

one

to

the

entitled

Competition

"The

in

||g:

Case

Electric

neuvered by a few master minds, Power," there appeared this dis¬
from the steel
industry; or when Public opinion is no longer formed arming paragraph, and I quote:
"For twenty years Public Affairs
I meet a railroad
executive, or one by the slow process of shared exengaged in manufacturing, a ques- perience. A small group with brih- pamphlets have stood for the best
quaintance

tion

on

the street, such

as

is

usually asked. It is this: liant minds and aggressive spirits
things going with you, > often conceives a plausible goal.
Kinsey?" And somehow I sense an From this humble beginning, the
"How

are

that the other fellow is

awareness

idea spreads. Slogans are formed,
and the public is deluged with
catch-phrases and benefits. It is
only natural that hand in hand
the United States, private utilities with active propaganda, an
aghave already been
destroyed. Most gressive enemy will try to silence
of our business associates know
all the opposition,
too well that we face a fire that
is
the State of Washington this
not under control. And
though the Past session of the Legislature, a

referring to the controversy which
seeks to destroy the electric industry. In two sizeable areas in

handshake
there

is

of

one

tc

seems

friendliness, few

exist

a

real

con-

cern

regarding our conflict; and it
always comes—well—it comes as
a

dash

how

of

bitters.

For

critical

many

no

matter

situations

I

have passed through, and some of
them
successfully, the fact remains

that

road

our

ahead

is

the

on

up-grade and stormy, just as
it has been in the past, if we care

law-makers

in

a
reach the socialist goal

hurry

to

(which is
death to the private utility), introduced a bill which would make it
illegal for any employee or official
of a private company to criticize
a PUD. It would be illegal to criticize either electric rates, or to
infer that the PUD might be so-

in

public service. You can rely on
accuracy,
timeliness,
and
readability. They have long been
utilized
by
organizations,
civic
groups, churches and schools."

their

The

first few pages of this dis¬

arming
and

approach

fair.

But

were

the

next

readable
twenty-

,

eight pages were something else
again. They told of monopolistic
conspiracy;

failure

of

The

commissions

to have jurisdiction;
people's revolt against corrup¬
tion and monopoly; the coming of

TVA

which

led

the

entire

Future

of high rates;
in public
the corrupt propa¬
ganda of private management to
prevent the blessings of a high
Hells Canyon development. There
efficiencies

power;

.

_




..

as

Future

the move!

on

was

.

.

.

TREMENDOUS!

and
the
industrial area! From a
bustling little river town to an industrial behemoth . . . that's a capsule
story of our area and the tremendous growth of our company in supplying
a cavernous, ever-expanding appetite for gas and electric power.
future of Cincinnati

fantastic

and this great

cialistic,

Even

recently as 1946 one would have hardly dared to predict our
250% increase in electric and gas needs by 1956. Yet, that is the
requiring ajxmt $200,000,000 in additional plant investment
during those 10 short years.

may cause

as

area's

record

.

.

.

And 1966?

Already Greater Cincinnati has a solid start on a quarterk voted itself last Fall... slum clearance,
street and sewer improvement, new expressways, new building. Mush¬
rooming new plant, commercial and residential construction augers well
a
bright, new Future more stupendous than anything We have ever
billion dollars worth of progress

..

d

...

Back in 1837 when the company which is now The Cincinnati Gas
Electric Company was founded, no one could possibly envision

inherent

and

,

.

is

nation

out of their bondage

behind.

.

city that's

the

or to say anything that are
literally thousands of such
discontent with present blasts flooding the nation.
customers, or which might cause
But even
more
serious is the
And it occurs to me that there the voters to reject the formation flow of news releases
coming from
are
three principal questions °f a new PUD under consideramany sources, including govern¬
which may be held up for consid- tion. The
penalty was to be two mental groups.
;
eration.
These questions are as years in prison, and up to $5,000
Personally, I would hesitate to
follows:
fine for both employee and for
say that the many Congressional
company officials. And while I am investigations into private utility
Principal Questions
glad to say this bill did not get operation today are motivated by
First, I would ask if any single very far, it does give us something political objectives. I dislike to
company is exempt from the type to think about.
admit even to myself that men ...
777 2aa
*«. 'u'
I*
"* T*le
principles of Araeri-. elected to public office, supposed :
Edi!
the ; foundation stones to- be honorable and- having in-;
Mm
Electric Institute, Chicago,
111., June UP°Q Which Our COUntry. WSS built, tegrity, .would spentf .thousands
s, 1957.
seldom bother these extreme ad- taxpayers' dollars- to
investigate to look

CINCINNATI...

regulatory

witnessed!

.

•

Serving The Queen City and America's Industrial Ruhr Valley

•

%

r The Cincinnati Gas & .Electric-Company
104 years

of unbroken dividend history

.

ments

Number 5646

185

Volume

.

The Commercial and Financial Chronicle

when

However,

facts.

of

.

.

people like you solicit and collect
money to pay for the issuance of
misleading and erroneous state¬
ments to the public for the pur¬

in

Washington State, and Oregon

states.

In

the

months of

tric

companies

six

first

investor-owned

General Electric Company, and so

voters are likewise sound in their

1956,

thinking.

defeated government power in ten
out

Public

opinion surveys can oc¬
casionally be wrong, however, but

elections.

thirteen

of

Commission

Power

Federal

EEI

and

rec¬

ords show that 4,298 towns have
of influencing elections, and certainly not elections. President
tried municipal ownership at one
promotion of federal power Eisenhower and his partnership
time or another, and that by 1955
empires, I feel an obligation to the policy, which attempts to restore
only 1,991 had survived, by the
American people to present the the
power business to a sensible

pose

the

true

facts.

oi^ basis, with all

if your er¬

*T wonder

misrepresentations

and

rors

are

typical of the literature used
throughout the Northwest in ef¬
forts to elect candidates favorable
Hells

to

Canyon

empire

power

I

proud of having
been elected through such efforts."
would

be

not

much one-sided propa¬

P With so

may

we

now

does the consumer himself react to

it?

speaks

partici¬

for

itself., The opposition

ticket failed to carry a single one
of

so-called;

the

public

power

states.

In

two

service

from

a

In

-During

a

1946 to 1956,
cut

Is

On

Our

ten-year

there*

elections

on

Side

207 clear-

subject

of

power, and private utility
operation won 173 of these elec¬
tions, ranging over thirty-two

to

one

election.

Ogdensburg,

to

of

receive

from the

free

a

New

York,

the

voted
service

Members

Sandy ' Cooperative,
571

sim¬

Niagara Mohawk Power

Corporation.

voted

a

election

electric

to 99 to

in

•

'1 ■'

Portland

ership

company.

sioners,

Perhaps one of the clearest and
strongest '*examples of consumer
preference for private utility serv¬

even

the

of

people

public

to

Stevens

of
,

learn

the

;

took

facts,

Now,
the

vote.

a

This

ers

to

give lower

voted 71.4%

rates,

the

and

have

in

been

against

They

us.

Three

was

effect
are as

working
follows:

Socialist Rules

First, never call an idea or pro¬
gram socialistic. Talk about pen¬
sions, compensation, health, insur¬
ance,
welfare, but not socialism.
Rule
Number;. Two—launch the

the people

for private operation.

One precinct in a municipal own¬

sell their elec¬

people getting

aspect of public power
I must say that private
industry is not doing so well.
Three
important socialist
rules

election day, turning deaf ears to
promises by the PUD commission¬

Oregon,

are

progress,

in Washington. On

new

ask,

we

facts?

As to this

and nothing else
forced the PUD commissioners to

something

in

selves.

pressure

put the issue to

the

for

cincts, didn't have a chance. Once
people knew the facts, they
were fearless, in
expressing them¬

came
from
Stevens
County,
Washington. Here the law actu¬
ally prohibits the dissolution of a
PUD once
it is organized.
The

trouble

88%

PUD commis¬
their own pre¬

the

ice

the

voted

town

private

t -

■

time, if it wants to stay there. But

that community

their

the

to

\* *'i

PUD is in the saddle to the end of

private company.
Minnesota, the

In

properties
•.T \* •

con¬

Falls,

Northern States Power won

citizens

period from

were

the

Granite

to

on.

have

South Dakota,

voted

at

Public

Canton,

sumers

ilar

public con¬
public
ask, how

for

released

ganda

sumption,

segments

pating, produced a vote count that

a
federal
personally

and

...

choice.

consumers'

The letter goes

."

.

follows:

as

25

(2749)

Continued

,v

>

on page

32

Level-Headed Consumer
truth

The

is,

the

consumer

is

not too much concerned. I am con¬

vinced that these consumers whom
about are not enemies of

talk

we

big business, and are not inclined
to

The

such.

become

customer

private utilities. He
is not turning into a socialist—at
least not while in his right mind.
does not hate

it

lor

s

than one occasion I
have expressed the belief that the
American people are basically fair
and honest, and that they can be
Upon

more

depended

make sensible
possession

to

upon

you
Three

decisions if they are in
all

of

is

But

People are inclined to
feel
helpful and kindly toward
others about them. They value the
institutions they must live with.
in

peace.

or

sulted

firm

business

a

than

more

has
in

once

they

contributes
To

efforts to create
prejudice, to create revolution, are
often seen through as flimsy and
dishonest affairs.
Open hostility
Irresponsible

against

a

busy

mean so
more to

woman,

much, for nothing is
your

A 1955 survey

the

that

.. ♦

personal,

businessman, speed and efficiency.

a

Wherever you are,

re¬

more

daily living than the telephone.

the telephone means convenience and

time saved. To

adds

sym¬

whatever

you

do,

telephone

your

immeasurably to the pleasure and
business of

pathy for the besieged. I repeat,
the public will not be deceived
if given the facts.
showed

simple words

tendency

a

part of the public to live

the

on

It

facts.

the

living. Use it

more.

of public opinion
favorable trend

business management had

toward

increased

the

during

dozen

past

opinion regarding
government ownership had gone
while

years,

been

deaf

entirely

public

of

blings

public

the

True,

down.

to

power.

would like continued

;

t

has

the

not

rum¬

People

government

regulation. There is still some sus¬
picion, some doubt. But a great
majority say that rates are reasonable; service is good; and peo¬
ple are overwhelmingly convinced
that
socialism
would be- a bad

thing;';

;■■</

•

-I;.

careful surveys

Two

conducted

in

Oregon

have been
and Wash¬

ington, following the last .election,
learn
if. the
voters actually

to

public power.; A rumor
started somewhere—perhaps
"by public power election winners
wanted

got

;

themselves—that a majority vote
was

a

mandate

of the

people for

public ownership/ This viewpoint
nation.

has been echoed across the
The

company

truth

about

report

can

tainly

did

wanted to get the
question, and I

this

that the survey cer¬
not bear out public

power's typically inaccurate prop¬
aganda. In Washington, lor, ex¬
ample, only 16% of the voters said
that
for

power
U.

influenced their vote
Only 5% said

Senators.

S.

influenced their choice of
This survey showed
that
only
20%
of the voters
thought the Federal Government
should do all the dam building in
power

Congressmen.

One
,

phone to

a

home is

no

longer enough.

One of the handiest places for an

telephone is the kitchen

Pacific Northwest, while fiftythree in each hundred favored pri¬
the

additional

...

the most

popular kind is a wall type in gay color.

industry's going ahead with
construction programs. In the
State of Washington, 85% of
voters considered the cost of elec¬

vate

its

tricity

satisfactory,

while

only

To the straight¬
question: 4 Do you favor

11%? were critical.
forward

private ownership, or government
ownership of the electric indus¬

GENERAL TELEPHONE SYSTEM

try?" -only 15% favored govern¬
ownership, while 45% were
favorable
to
private
operation.

ment

The

PUD

cause

was

favored

by

only 2% opinion. Certainly there
was no mandate for -public power




ONE

OF

AMERICA'S

GREAT

COMMUNICATIONS

SYSTEMS

•

260

MADISON

AVENU

E,

NEW

YORK,

Is*.

W

The Commercial and Financial Chronicle
26

.

.

Thursday, June 13, 1957

.

(2750)

paid
nearly
$1% billion in Federal, state and
local taxes. These tax payments
amounted to 23.7% of their total

Let's Face It: Business Men Are

Helping Undermine Private Power

used

tough

utility President states the battle is a

The

a word about taxes.
In
previous address, you heard the
startling assertion that the Ameri¬
can
citizen has already lost onethird of his freedom of choice in

ob¬

has

man,

that:

served

be

to

spending of his income dollar
today's tax take is onethird of all earned income. Wo
the

run

by the people,
it

the

is

owned
of

have

peo¬

ple who must

buy

so

think. And we

Not

too

need

not

do
to

put

choice

on

sackcloth

and

work

the

a

some principles
ment and morals, if

discontent

Tp should like today to

challenge

responsible American cit¬

you as

and

of

leaders

as

great

a

industry to do a bit of

and useful

—

history and the
our
republic; and*,
all,
thinking
which
frankly and fearlessly faces up to
shadows

well

as

shine of the

the

as

is

limit

no

to

desire of

will

people

some

tueir

in

know

there

people

After

contemporary politi¬

many

to

under

sun¬

of knuckling
groups,
the

years

pressure

people, and at least some of their
political leaders, are wondering if

cal and economic scenes.

Cleveland

not

right

In turn, I hope you will be en¬
couraged to challenge others —
your employees, your customers,

Grover

your

investors,
your
neighbors
governmental officials—
to
also think along these lines.
For if there is any
one
lesson
we should
have learned by now,
it is the uselessness of meditating

through the form of taxation than

and your

is necessary to meet

in

private

ourselves
dations

life.

of

our

basic

the

American
'

'

the

During

only

talking

and
about

past

to

foun¬

of

way

year'

highly

significant developments relating
to our industry and our relations
with the society in which we live
have taken place.
Some of these
developments have been favor¬
able

investor-owned

the

to

util¬

ities; others have constituted seri¬
ous

setbacks in

preservation

our

battle for the

the

It."

subject of this

chosen

have

the title

paper,

"Let's

I

Face

I

hope this suggests to you,
as it does to me, our need to view
objectively the events which
affect

garding
colored

ing,

industry,

our

undue

neither

them through

the

through

pessimism.

a

gray

rose-

fog

garding

taxes,

today

territory

tyranny—for I feel that these
three

and

of

I want to talk

particularly

you

T's

our

that

spell

real

re¬

and
are

danger

industry in the months

years

such

tration,

ahead.

people

our




and

uninformed

a

fact, however,

still largely
hence generally

are

apathetic about another aspect of
American
taxation, much more
serious in its implications than the
mere
size of today's tax levies. I
refer to the way in which tax dis¬
criminations and tax inequalities
have made

our revenue

vice for socializing

the

many

electric

laws

a

de¬

the economy.,

years,

and I in
have been

you

industry

as

it

.

has

inadequate job
public to it.
Calvin

alerting

of

the

sensing
the
America,

Coolidge,

warned

us

years

that

ago

taxes,

and

particularly tax discrimina¬
tions, can become a potent weapon
the

destruction

of

our

free-

to

able

tric

not

believe

that

the

government

should ask social legislation in the

guise

of

taxation.

If

we

are

to

adopt Socialism, it should be pre¬
sented to the people of this coun¬

try

as

Socialism and not under the
a

law to collect revenue."

In 1955—the last year

governmental

for which

been

This tour, so far as I know,

well.

marks the first time

a

leading in¬

dustrialist has openly assumed

they

.

friends, and one whom I know to
be a devoted and patriotic free-

enterpriser, convinces me that the
illusory "profit" implicit in public
power subsidies is so potent and
insidious a lure that unless it is

quickly

and

effectively stripped

of its mask, more and more busi¬

struggling with today's

nessmen,

Early in May, a leading Ameri-*
metals manufacturer, now op¬

rising costs and narrowing profit
margins, will find themselves
taken in by it.
/'

major plant in the Mus¬
cle Shoals-TVA area, played host
erating

a

to an impressive group of indus-

New York
Ftate who had been invited, ac¬
trialists

from

upper

cording to the New York "Times,"
to see "the pot of gold at the end
of the rainbow," which could be
achieved by North Country indus¬
trialists willing to "pull together"

"The visitors
learned," according to the news¬
paper,
"how
profits have

with

public power.

.

.

.

only

"profit" is
elements on
and
is *• competition.

illusion

the

But

can

of

the

of

one

which subsidized power feeds
grows. /
When

Another

one

manufacturer

to reduce the

because he
a

is

able

price of his product

purchases power from
and
politically-

tax-exempt

favored

utility at an artificially-

computed

cost,

we

surprised

greatly

cannot

if his

-he

compe¬

titors seek to do likewise.
weeks ago, a

A few

manufacturer in my

organi¬
/..

»dvmta<»e

.

thes^uprganizations are
any

efficiently tb,an the investorcompanies; and the claim

more

that

their

rates

constitute

a

true

"yardstick" of power
costs is absurd, as General Vogel,
of TVA, has candidly conceded.
or

measure

Within the past few

months, the

Public Service Commission of In¬
uncovered

diana has

in

economy

or supply elec¬
cheaper or any

generate

power

CENTRAL-EAST
VXFI I •V"'"
r\V,
East

.

Ri„

things are

taking place in

Cen|P';f*

TEXAS

For many years
continues to go or-

Texas.

area

^Stly agriculturta.tto^K^^,
ward in farm
processing

developing as a

together with

res

y j,
and manufacturing

activities.

^y
plan

expanded oil ana g

special fi¬

a

nancial

gimmick by which some
governmentally-subsidized power
groups maintain their pretense of

Cotton,

"cheap public power" and enrich
their members at the taxpayers'
expense.
Reviewing the annual
reports filed with it by the rural
electric cooperatives of that State,
the

Indiana

Millions

corn, to-

matoes,

.

peaches, plums,
berries, potatoes,
beef and dairy,
cattle,
turkeys.

of dollars

invested in
medical and healthresort centers.

chickens,

discov¬

Commission

ered

that through tax exemptions

and

by borrowing from the Fed¬
an artificially

Vegetable, meat,,.,

eral Government at

these organizations have accumu¬

mills, flooring
furniture,
basket mills, boxes,

lated

pressed wood.

low

are

interest

of

rate

2%,

some

Saw

of

mills,

surpluses which they
pay off their gov¬

large

using, not to

ernment

loans,

but

purchase

to

government bonds at interest rates

considerably higher than the same
cooperatives pay to the Federal
Government

the

as

borrowers.

And

realized is com¬
pletely free from Federal income
profit,

thus

erations

of

that

the

and

their

high

made

but

Is it any

subsidized

is

one

President

will
wonder
grouos

scream

whenever

made—as

by

som°

power

champions

heaven

gestion

time,

our

American taxpayers

hardlv condone.

and

enterprise system. He said: "I do

already

other governmental subsidies,

nopeupf

that the

drift toward Socialism in

-

governmental operation of metal
plants and other manufacturies as

painfully aware of this disturbing
This is certainly one of
feature of present-day taxation— taxation!
but as a group we have done an the most ingenious financial ^op¬

complete

1957.

violation

principles of

We must face the

June

5,

becomes

a

government."

guise of

*Ab Address by Mr.

and

of the fundamental
free

Branch before the
Twenty-Fifth Annual Convention of the
Edison
Electric
Institute,
Chicago, 111.,
*

exaction

ruthless extortion

for

with

for

re¬

glasses of wishful think¬

nor

the just obli¬

gations of government and the ex¬
penses of its economical adminis¬

For

in the electric business.
As

people's sustenance is exacted

enterprise

free

of

was

declaring that: "When more of

the

that

.

.

in

governmental

of the matter is that

their tax

for

except

American economy

illustrate what I mean:

The point

power
' *■'{: ';v; -> -

if*

'

The truth

and

our

favoritism

Two recent events will serve to

owned

government.

of

most

for
that

what

of

traditions

they

desire,
hearts

of

lessons

the

amounts

even

grounded.

are

beneficiaries

subsidized

zations.

if

of

gener¬

in other countries—for the

made

made to see
contravene the basic
concepts upon which our nation
arid our free-enterprise economy

that

a

thrr,uah

America

thetic citizenry can be

discriminatory

the

pay

as

persistent
questions, ^regarding the theory
that
government
should
spend
money for whatever purposes and
whatever

of

tissue

part of their electric
bills—only to have their tax pay¬
ments, in part, used to supply socalled "cheap government power"
to a minority of 20% of the people

and

searching

tions,

in

thinking of the kind suggested by
Mr. Hoover—thinking geared to

the

who

They are beginning to ask ques¬

cated."

the

ers

taxes

expense

sarne argument can be made and
in
due
coarse
will be made in

is infected unless a presently-apa¬

of American power consum¬

80%

from
laborers,
farmers,
business and
professional mtn alike.

preserve the rights and dignity of
men to which this nation is dedi¬

izens

its

that

and

the

the
cannot, role of a
public power propagan¬
and will not, be limited either in
dist: and the fact that the indus¬
geography or in number of bene¬
trialist in question is one of. my
ficiaries. Like a cancer, they will
long-time and most respected
grow and grow until the whole
governmental

doubt whether

fully aware of it.

at

of America

produce cheap electricity, the

has Jong been
not merely to

namely, that these tax discrimi¬
and the other forms of

generally glossed over by advo¬
cates of government power expan¬
sion and generally overlooked by
the public, is that this discrimination operates not alone against the
electric companies and their in¬
vestors but directly against the

heard

being

are

segments of our citizenry

would

we

and

bite

tax

are

subsidies

taxpayers

ally J

Case Histories

the rank and file of its

"profits"

operatiqn vOf, electric facilities
through these devices may be said

the rankest sort of tax

is

favoritism, and I

throughout the land and from all

of govern¬

tory,

the

of

size

for

time

long

a.

become sensitive to

This

awake and the rumb'ings of their

with some lessons of his¬

square

taken

paralyzing effect and mischievous
potentialities. But thjey are finally

t

m us

has

It

only

records

thinking

Our

sunshine.

like

we

citizen with taxes taking

Americans to

minds

sundial which

•

before

pay

less than 5%.

Nor should

itaruee joranoi, or.

our

much as a loaf of bread.
long ago the freedom of
was
95
to
98%
for the

average

ashes to think.

our

of

the

nations

cluding municipals.

government"

"big

to

given

one-third

ment

in men-

overlooked

been

the

that

industrialists through the

of public power are the result

of tax discriminations and govern¬

by members of our own industry—

utilities, representing 70%
non-Federal systems, in¬

all

them, is

sometimes

contrast, the governmentally-owned and governmentallysubsidized
power
organizations
paid no Federal income taxes at
all, and their total taxes—includ¬
ing what some of them conven¬
iently term "pajhnents in lieu of
taxes"— amounted to only 1.9 %
of electric revenues in the case of
TVA;
and to only 2.82%
and
2.89%, respectively, for the rural
electric cooperatives and the socalled class A and B publicly-

because

"If America

is

Subsidized Power

a

States¬

elder

use

point out their magnitude or their

By

First,

of

aware

TVA-land

to

both¬

one

no

point out to these visitors

made by

inequity but to underscore a fur¬
ther fact which I am afraid has

which

audience,

to

ered

anj go™^

Paralyzing Taxes

Herbert

President

Former

purpose

Apparently

power.

tax■ discriminations

$1.53 per share.

and leadership it can be won. Advises
electric power heads that it is useless to meditate in private
and talk only to themselves about the basic foundations of
our American
way of life, and dissects the real dangers of
taxes, territory and tyranny. The author praises newspapers
for agreeing that utilities have the right to publicize their
views on public power.
Hoover,
who
has
lived
long
enough and proved himself wise
enough to be considered a true

these

for example, tax
represented $2.54 per
Share of common stock, whereas
net
earnings amounted to x>nly
payments

but with

one

soared since the advent of public

post-

pursuant to

constructed

primary

My

optimism

courage,

mere

a

openly-debated and nonparti¬
supported Congressional pro¬

tionint'

-

corrtpany,

own

"federalization" of the utility industry.

for further

demands

san

Gen¬

owned utilities. In.the Case of my

the basis for

as

an

operating expense of the investor-

reports that efforts to prevent governmental
encroachment in the electric power field continues, while new
Branch

technological developments are being

relatively
facilities

granted

of income taxes on a
small portion of their

erally speaking, taxes constituted, gram of accelerated amortization
—as
they have for a number of applicable to all American in¬
years—the largest single item of dustry.

President, The Southern Company

Mr.

were

pon'emCnt

companies

electric operating revenues.'

BRANCH, JR.*

By HARLLEE

which

available—the investor-owned

are

electric

it

to

the

sug¬

has

beer

Fisenhower

Congressional leaders—

that the Federal Government
leivhnf? money to these

ceas°

organisa¬

tions at less than the governroer»t\<own

cost of money:

or

is it diffi¬

cult to understand why these

groups—enioying

a

same

complete free¬

SOUTHWESTERN ELECTRIC SERVICE CO.
John

dom from Federal income taxes-

should

from

seek

their

to

own

divert

attention

favored states bv

statistics attacking investor-owned utilities
1

Executive

T. Shewmake, President

Offices; Mercantile Bank Bldg., Dallas, Texas

milk and
poultry,
processing, pacKing and canning,
j ;

Number 5646

185

Volume
Y

...

r'%

'

•

.

state

own

reported to be

was

gotiating
with
an
electric
operative in Indiana for the
struction

in

that

state

of

The Commercial and Financial Chronicle
'

'

ne¬

co¬

con¬

large

a

metals

plant and the joint financ¬
ing of a huge electrical generat- ing
station to supply its power
requirements as well as those of
the
Co-op's
members
at
rates

,

tax-paying utility could
match, assuming the Co¬

no

afford to

obtains its funds from the govat a- 2%
interest rate.

op

ernrnent

The

manufacturer

in

question is

of my State's most

one

successful

industrialists.

younger

large

and

respected

is

He

customer

a

of

one of our companies. He tells us
that while the deal has not been

,-t
<

consummated,

virtually

he

had

cho7£"but t<r*seek "some s'uch
arrangement inasmuch

ber

.

,

•

y

num-

a

principal competitors
are already receiving power from
tax-exempt and governmentallyfinanced
power
suppliers
and
that, because of these subsidies,
they
are
underbidding
him —
in

even

and

sales

to
'

'

achievement

Let's

face

it.

able

through

sion

to

happening

.■

power

geratest

Unless

America

its

to

are

we

what

to

Today,

customers

to the

investor-owned

the

years

starryparlor-pinks

and

reluctance

sidies

and

to

accept

sub¬

their^

knowledge that
government ownership of power
facilities poses a dangerous threat
to all free enterprise.
And pres¬
will

also

come

from

state

governments which

see their ter¬
being raided and disadthrough
the
"cheap
power'Mure of states which have
traded political and economic independence for Federal hand-outs
ritories

vantaged

1

and tax exemptions.

:r

Let us move now from taxes to

the matter of territory. -Over the
I years, the electric companies of
I America have spent billions of
1 dollars on plants and facilities to
'

the

serve

in

areas

whicn

have assumed utility

they

responsibil-

j ity. These billions of dollars have
been obtained from the American

j

..j. public through the sale of stocks
'

bonds.

and

L

million

I

owners

j

<

Today

nearly

Americans

of

these

three out of

four
direct

are

securities

allocations

indirect

status

weeks

a

state

a

their

or'

from

rate

Within

the

has

co-op

past

commission

to

the

was

can
pay for their extensive
tivities
through the

vention

in Chicago

and

ago,

which

still

\

just

brainwashing,
to retrieve

own

Treasury

now

this money would not only be just
and

but

fair

small

great help to the

a

taxpayers

who

have

been

bearing the burden of the cost of
government." ;
•-.-' •••;
Senator Kefauver loftily ignores

the fact that the small taxpayers
for

whom

*

■

he

feels

-

such

'

concern

sure

am

have

seen

this

and

and

•

argue

substantially ahead

th*
nf

inquiry and

without any pretense whatever of

public

a

hearing.

Chudoff's

blast

you

which

undertakes

last

no

for

views and their

all

the right of the

at

the

anti-utility bias-

taxpayer's

exoense

who refused to permit

■

others

responsibilities,

:

of

this

on

page

.

entitled

protest of the

investor- "

utility responsible for
bringing
the industry into the
state, and also over the protest of
municipal and other local officials
of the

even

industry itself! In

state,

same

a proceeding has
looking toward; a
general division of territory be¬
tween
cooperatives
and
utility '

been

started

-

companies, with the cooperatives
insisting that extensive areas of
the rstate

without
areas

be

regard

assigned to -them
to whether such

rural

are

urban and irre-

or

spective of the ability, willingness
and

desire of investor-owned

and

taxpaying utilities to provide

any

and all electric service which may

? w

MomV

'5®+r?f«
recognize
this a

rtf

i

vn,.

famir

pattern famil¬

in

iar to your own states. The ques¬
tion is whether it is a pattern the

implications-of
understood

fully-

are

the American
who have borne and
by

taxpayers
continue

which

the

bear

to

burden

of

subsidizing these organizations—
including millions of American
citizens whose savings are directly
threatened
by this type of en¬
croachment. You and I have

sponsibility to

re¬

a

that the pattern

see

is understood.;
If

we

to fulfill that respon¬

are

must not only have the

we

investments

these

that in America,

assurance

our employees, our
customers, our investors and the
public
generally
of
the
issues

which

stake—but

at

are

fectively state

must

we

position and all

our

the facts which bear upon it. Any¬

from stat¬

us

our side of the case, while the
opposition is uninhibited and un¬

restricted, and some of its propa-'
ganda even publicly financed,, is

repeatedly

dom

or

given

REA

in

the

debates

legislation

during the
time, for ex¬
ample, Congressman Rayburn de¬
clared: "We are not, in tnis bill,
intending to go out and compete
with
anybody. By this bill we
hope to bring electrification to
people who do not now have it
mid-30's.

bill

This

that

At

written

not

was

the

on

theory that we are going to punish
somebody or parallel their lines
,

or

enter

into

them."

And

"There

will

ganization,
it, for the
a

rural

competition

Senator
not

be

and

set

up

with
said:

an

or¬

loaned to
of electrifying

money

purpose

area

Norris

which

is

now

sup¬

a

denial not only of our own free¬

of

of

ment

ciple

serve

basic

so

to

our

American

concepts of liberty and democracy
as

to require no elaborate exposi¬

tion

defense.

or

those

who

there

Yet

would

like

to

are

see

us

completely "gagged" and silenced
in order that their efforts to governmentalize the electric industry

will
-

"Why do

longer be challenged.

no

That

brings

to

me

the

subject

just take

of tyranny—for any such effort is
tyranny regardless of where it oc¬
curs

how

or

justified.

-

exemptions

subsidies

Power

and

As

it

is
■

,

•

sought
■,

.

to

can see

we

a

do business with Pandick Press? That's simple—

look at the annual report they printed for us!

why! It's

so

smart and attractive—and

could

their

were

only

own

Claude

Dr.

be

members




on

the

still

well

not

activities

citizens of
of what

of

22 THAMES ST., HEW YORK

Robinson

our

we

informed

our

of

the

the

71 CLINTON

NY

1-3167

ST., NEWARK, N. I.

MArket 3-4994

Established 1923

The
Annual Reports

Brochures

Prospectuses

•

Registration Statements

Dividend Enclosures

doing in the field

of atomic energy. They

entirely

of

companies.

WOrth 4-2900

hndccp/press, Inc.

has

country know little

are

You

readable!"

be

pointed out, the American public
is

so

•

SSjk

govern¬

justified, as
justified, on
the basis that these organizations
were "not utilities, in the ordinary
sense, seeking to compete for markets and territories but only to
they

also

public's rignt to have any
proposition, needing its support,,
fully aired. Surely this is a prin¬

Informing the Public

Spreading Public
Tax

denial

a

the

plied."

—

but

speech

unaware

are

almost

Cases & Briefs

Leaflets

•

Price Lists

•

Catalogues

•

Direct Mail Literature

of the inequality

preference provisions and

LEADERS

IN

FINANCIAL

PRINTING

SINCE

me

—

and

industry to testify

Continued

,

held by

be

the

public forum

government power zealots to
their political and economic

air

to

a

customer i:

an

sur-

toured

summer

country furnishing

customers

^rial customers and to assume
utility

as

chafr^n "Tlhe^subcoSttel

and

rural cooperatives to serve indus-

ritorial

Congressman

came

been

address, in which

Administrator

assert

of

many

employees

your

the

that

on

bills and

rWrA«ma«:'

in'

off ioineH

electric

bv '
nartp r,,iw
thlvIa
e/al Power C
eial Power Commission which was
based solely on a mail

coqntry under government frank.
I

come out

Last wppk

few months

a

has

ac-

savings

their subsidized

« distributed throughout the'

two

destroyed either
by government itself or by agen¬
cies
financed
or
subsidized
by
government. This assurance was
over

\\

the

ment

govern-

expense.

eovern*

for

agencies

power* such as the Citizen*
for TVA and the Tennessee Vallev
Public Power
Association,' which

have the freedom to fully and ef¬

.

ily preempted

;U

com-

charging

been

tions, for their

industrial

serve

the

have

For the

are

service

been

f at least, the markets of the electric
j companies would not be arbitrar¬ ing

.4

industry

our

Ponies

relative

and

thing that prevents

I

expenses
relating to the

douM in my mind that these

terri¬

others

and

America.
Underlying

>

to

_

propaganda^

will to inform

electric

the

I

_

meht frank at public

—

and

insurance

\

proponents

power
.

of

being

five Americans sibility,

every

opment,, all too willing and able
to lend a hand with the propa-

ganda Distributed through

havValreadyac:

to their demands for

owners through their
investments,
making
.industry
the .most
publicly-owned enterprise in

are

,

cates of government
power devel-

have certain advertising

Some

ceded

that

their

of

exclusion of the

torial

and

petitive position, notwithstanding

f

government

Con-

few other

and
a

that

owned

in

not from

come

Kefauver

Chudoff and

_

95%

companies.

state legislatures

for

America

Socialists

with

however,-

Senator

gressman

originally-avowed pnr. Public and private . power issue
An example
of
tax-financed
pose
thus largely achieved, we disallowed as a cost of doing busi- propaganda in favor of governfind many of these organizations ness, not only for rate purposes ment
power
expansion
is
the
address of the
demanding .extensive allocations hut for tax determinations as well, elaborately printed ^
of territory and the right to serve Senator .Kefauver
Rural Electrification Administra¬
said in the
even
urban and industrial power -Senate on April 11: "There is little tor, delivered at the NRECA Con¬

over

■'

■

of

27

Senator Kefauver also overlook*
there
are
numerous
other

our

thur

and

cal businessmen who find it de¬

t

pur-

the farms of the nation electrified

is" to

the
socialized

sirable to join the procession for
the sake of "profits"- and com-

i

stated

•

but from hard-headed and pracci-

sure

their

of

.

economy,

pressure

in

ahead will

j.

tax discriminations which favor

minority of

frequently at considerable
expense to themselves.
-

regulation.

and' cohe¬

courage

alert

v

;

not otherwise

was

pose

sidized

,

Must Alert the People

eyed

where

areas

a
have been bearing the cost of taxcitizens, including subsidized power in his home state
available. Most investor-owned some of our wealthiest corpora- of Tennessee for
nearly a quarter
™«—
nt*"
to of a
utilities—including the companies tions.
Now . it
is
proposed
century. He ignores the fact
I am associated with—sought to silence what small voice we have,
that the payrolls - of government
assist these organizations in the
You are familar with the efforts agencies
are
loaded with advo-

freedom

!

rural

in

electric service

persistently pressed to do
so.
Regulatory commissions are
continuously being urged to de¬
clare
these
groups
full-fledged
utilities
but, of course, not to
investor-owned' disturb their tax-exempt and sub-

,

utilities!

\

as

his

of

.

;

.

farm

.

which

1

(2751)

*

1923

42

The Commercial and Financial

28

Chronicle

,

.

Thursday, June 13, 1957

.

(2752)

of the American

mands

economy

for utility service continues. How¬

been

been

most

unfortunate jas»'to have had?-to

been

a

affairs.
so

You

who may have

significant, but, it has
important factor in

most

only the financially strong deal with this red tape know what the growth and material progress
of this Nation.
company can secure the money to a headache it is, A headache that
adequately meet these heavy and neither aspirin nor "Bufferin" will
Deplore Federal Encroachment
exacting public demands. One of relieve.,
No
the important responsibilities of
industry has
contributed
It behooves every citizen to take
more to the alleviation of
a regulatory Commission, it seems
toil, to
an intelligent look at what is go¬
the increase of commercial activ¬
to me, is to realize that regula¬
ing on and what appears to be
tory Commissions, as well as utili¬ contemplated in national affairs. ity and productiveness, and im¬
ties, must have a long-range plan. We know it has been called New proved the standard of living, than
has electricity. One of the greatest
We are woefully mistaken if we
Deal, Fair Deal, and now Modern¬
get the idea that regulation begins ization, a so-called middle-of-the- factors in the rapid changes which
have taken place within the recent
and ends by whitling down the road
position for the administra¬
rates which a utility should
be tion of our rights and liberties. past is attributable to the electric
permitted
to
charge.
Only
a These
attractive names
do not light and power business.
healthy utility can develop new change the facts. The facts are
I am satisfied that private own¬
service, expand its business, and that the present trend is no differ¬ ership and operation under proper
get the capital to properly extend ent from what the trend has been public regulation is the best sys¬
the service that is required to for the
past 20 years and more. tem for conducting the business of
adequately meet the reasonable It has not been changed under public utilities, in order that the
needs of the public.
the present Administration. Budg¬ public may receive the best over¬
The Commission
that fails to ets get bigger and bigger and our all benefit, This method- encour¬
ever,

;

Preserving? Private Enterprise
By

HONORABLE II. LESTER HOOKER*

Commissioner, Virginia

State Corporation Commission

Thirty years of experience provides Virginia Utility Commis¬
sioner with these observations: (1) need for balanced view

rather than only the cost of service
(2) consumer's interest is linked to utility's
financial soundness; (3) exercise of regulatory power requires
due regard for reasonable and fair return to avoid taking pri¬
vate property without just compensation;
and (4) States'
rights and freedom of private enterprise are inescapably inter¬
woven.
In developing the latter observation, Mr. Hooker
toward utility expansion
the

to

public;

deplores "the encroachment of the Federal Government upon
the reserved police power of the States • » • [which] began
many years ago"; and seeks redress of balance between the

,

permit
earn

several States and the Federal Government.
to me that it would
be well for me to discuss briefly
something of the setup and duties
of the Virginia Commission. The
State Corporation Commission of
Virginia is a cohstitutional agen¬
cy, having been created by the
1901-02 Constitution. The author¬

tor the regulation and
control of public service corpora¬

duties

ity for its creation and its

set forth in the
Constitution of Virginia, and in
many
statutory provisions.
The
General Assemby of Virginia at

and

are

powers

almost each session adds some ad¬

ditional duties.

manner

and to the

matters

Looking back over my experi¬
of more than 30 years in the
field of regulation, especially as
to

public utilities, I am convinced
that it is very important to keep
theme is simply this:

agent for the Governor in
taking over and operating utilities
result of labor disputes.

Our jurisdiction also includes
banks, building and loan associa¬
tions, small loan companies, insur¬
ance companies, issuance of secu¬
the

"Blue Sky" law,

issuance of charters of incorpora¬
tion
to
all
corporations doing
business in Virginia,
of

all taxation
public service corporations, and

other less important matters.

In connection with the
Commission
tional

exercises

governmental

its

""An address, by Mr. Hppker, before the
25th

Annual

Electric

of

Convention

Institute,

Edison

the

111., June 4,

Chicago,

1957.

'

of service to the

able service.

Utilities

Healthy Utility

'

regulation

where

easily

can

go

astray, we must hot lose sight of
the fact that the fulfillment of our

the public can be
is

to

obligation

achieved only when the utility
in

consistently sound financial

a

The Interest of the con¬
inescapably linked to the
condition of the utility.
position.

sumer

is

Under

State regulation, private

a major part in
amazing expansion of utilities
since the end of World War II,

industry has had
the

85% growth in gross
product. In the telephone
industry, 3,400,000 telephones
were
added during 1955 (nearly
half again as many as in 1954) so
that at the beginning of 1956, over
56,000,000 telephones were in
pared with
national

service.

vate
out

property for public

use

with¬

just compensation or without

due

alarming

looking for new
spend the
taxpayers'

to

This

This is

of law.

process

the

trend

will

not

stop

until

the full rights of the States have
been restored and private enter¬

I am a firm believer in complete
regulation of the electric light and
power

industry, and I

strongly

protected, fall prey to some who
for
personal* or
political gain
might disregard the utility's in¬

State

vestment.
It is

State

to

regulate public utilities

or

to

Under the pres¬

Federal.

ent system of

is

rates

that the right of the

seen

or

am just as
government
operation, whether

opposed

ownership

lic

$25 billion of new capital,
nearly
one-half of the capital
raised
publicly by corporations
of the United States in this period.
about

outstanding job,

yet the almost overpowering de-

ages to the fullest extent business¬
like operation of utilities. Private

ownership
ducted

money.

legal safeguard for the protection
of utilities which might, if not so

regulation the pub¬
fully protected as to the

which

these

companies

are

charging, and the history of the
industry is the best evidence of

and

under

operation

reasonable

con¬

regula¬

tion

having due regard of the
fact that the industry is of a dual
nature

private,

—

stockholders

public,

as

made

America

preeminent in the field of public
utility service. A learned jurist
has said that, "It has been found
better to let the natural laws
and society prevail

economy

.

public utilities

ctontrol

and

ownership and operation
public utilities under proper

of

regulation, in the hands of men
lives have been spent in
the operation of these utilities,

whose

whose

and

education

and

long

practice have fhade them expert
this

in

highly specialized

busi¬

.

much under the

so.

operation

private

of

of private enterprise un¬

progress
der

State regulation.

the

As

we

look

satisfactorily in the public's mind

truly say
live rep¬
resents the most marvelous period
of progress and development of

that

the human

continuation

the

of the pri¬

State

under

regulation

served

the

I

tion, light and power, communica¬
tions by telephone and telegraph,

has

ably well.
has not

This excellent record
been due entirely to regu¬

lation.

It

the

is

the

manifestation

of the free

success

of

enterprise

radio and

system.
Links

State

television has

not only

It is

jealous

seen

people

was
on

than

the

preservation

of

affairs.

Means

The American

must assume

a

people toward the
rights
of
the

the

of

States.

think

it

can

be said, without

successfully

attacked,

ener¬

surrender of the police power

or

reserved
worked

of

system

the States
beneficially to our

rights

of

enterprise.

private

to

Western Massachusetts

Companies

Sole Owner of

,

WESTERN MASSACHUSETTS ELECTRIC COMPANY

be

.

in

itml business

means

homes, farms

grows, so

and

the

use

of electricity

industry.

too are we with new

As

.

.

preparing for

enterprise, the

We

this

great.

growing New Hampshire!

a

very

Private

cessful

COMPANY OF NEW HAMPSHIRE

'

.

.

-

Executive




*

K

-

'

'

-

come

world.

AND SUBSIDIARIES
C

*

Offices: Manchester, N. II.

*

"

<

author¬

industry

country

has

*

that this

the

upon

grown

enterprise

State regulation has been

PUBLIC SERVICE

m

inescapably

infringement of

Federal power over state

which
are

are

The

ity inevitably weakens States
rights, adversely affecting private

power

plants, substations, and transmission lines.

enterprise

interwoven.

state

our

facilities,

.

are

preserved.
The rights of
the states and the freedom of pri¬
vate

,.

American way of life,

the

to

An

integrated electric system serving 132,000

customers in 55 cities and towns

—

of which

under

so

suc¬

Springfield and Pittsfield are the largest.

country has be¬

industrial

envy

of

the

Private enterprise, saddled

■**

with Federal burdens of red tape

'*

and

restrictions, is greatly handi¬

capped in the achievement of its

Note:

For

a

I

have at all times stood steadfastly

getic role in the affairs of govern¬
ment if these rights, so important

Business!

that

no

people

renewed and

so

indifference

of

attitude

an

the part of

invasion

Rights to Freedom

the rights of the states to regulate
and
control
their
own
internal

that

Unfortunately, at that time, there

being

that

our

public

It is difficult for

still

more

a

aptly sensed the situation that was
at that time beginning to creep
into our American way of life.

portation were unknown.
The development of public utili¬
ties such as those of transporta¬

admitted

men

for

Rights.

former President Coolidge

remark¬

actual performance,

be

of

race.

we

motor vehicle and airborne trans¬

by

must

results

can

we

which

country
States

the

the

in

Judged
over-all

past

of

system

is

best interest of the public.

it

over

that the age in

the

regard for the fast fading doctrine

living to recognize the
world as the same place in which
they spent their early manhood
when the telephone, radio, tele¬
graph, television, electricity,

vately owned and operated utility

There
is
no
more
important
governmental and economic prob¬
lem
confronting
the
American

Hampshire

of

and

to leave

Of Enterprise

New

the

concerned, and
as
the public is

far
have

so

concerned

far

so

are

the
efficiency of service under
ness."
private management, publicly reg¬
The encroachment of the Fed¬
This
is
fected with a public interest, is ulated.
quite different
eral
Government
upon
the \ re¬
based on the general police power from
government ownership
served police power of the States
of the State, but the exercise of which is not regulated by any im¬
has not just begun. It began many
such power must be reasonable partial agency.
Former President
and avoid
a
Those who claim that the com¬ years ago.
taking of private
property for public use without parison of such operations is a Coolidge, in a speech during his
administration delivered at Wil¬
just compensation. These funda¬ fair and reasonable yardstick, in
liam and Mary College, cautioned
mental principles
are
necessary my opinion, have a strange and
the country against the perilous
essentials in the plan of utility peculiar quirk of fairness.? Such
enlargement of Federal activity
regulation.
opinions give me a depreciated
in state affairs, the trend toward
The impartial student of regu¬ value of their views, and might
centralization of power at the na¬
lation is struck by the fact that well lead to a devaluation of their
tional capital, and made an appeal
r
- r?*s.
; ;
only in the United States are the ? sincerity, r
to the conscience and judgment of
-Let's take a brief look at; the

have

Utility industry has raised

an

places

more

time—

required to prise given its full freedom and
serve the public without just and
rightful place in the economic life
reasonable compensation.
To do of our country, unshackled
by
so amounts to the taking of pri¬
Federal interference.

it have grown ownership, which is a strong indi¬
cation
that
State
regulation of
much faster than the average; for
owned
and
operated
example,
145%
growth in the privately
electric industry's KWH com¬ public utilities has succeeded so

This has been

the

be

cannot

and some parts of

The

obligations become
all

or public s e r V ice corporations
whose business is monopolistic, af¬

public.

Moreover, and here is the point

constitu¬

authority through which the

State

,

Virginia

the

being

cost

pansion rather than only the

as

under

It is neces¬

to regulatory commissions to
take
a
balanced view looking
toward stimulation of utility ex¬

sary

of
emergency (such as strikes, acci¬
dents, want of coal, etc), and act¬

rities

That

central theme in mind.

one

ing of utility services in cases

as a

court

a

not, in my opinion, properly
protecting those who use and de¬
pend on regulation to see that
they receive efficient and depend¬

ence

other utilities in Virginia, ration¬

ing

and has the
of record of
under its jurisdiction.

of

power

extent as

same

with Legislative, Judicial

and Executive powers,

The more impor¬

coming under our
control and supervision are: all
transportation
companies,
rail¬
road, motor vehicle, aviation, all
telephone and telegraph compa¬
nies, the issuance of securities of
public utilities, transactions of
affiliated interests, licenses of hy¬
droelectric
power
developments,
acquisition or disposition of utility
properties or assets, granting of
certificates of public convenience
and necessity, jurisdiction over
REA
cooperatives in the same
matters

tant

tions, it might be well to point out
that
the Commission
has been
clothed

continuously

to

reasonable and fair return

a

is

powers

It appears

'utility

a

,

,

detailed statistical study

icrile to 201 Devonshire Street,

of these companies,

Boston, Massachusetts.

Volume

185

to

opposed
Federal

.

.

.

The Commercial and Financial Chronicle

overlapping of
over any right
authority.
It "has

any

jurisdiction

the

of

Number 5646

states'

velopment is to be used as a yard¬
stick against privately owned and

character

operated utilities, in the

been my consistent view that Fed¬

all

name of
is fair, just and honest,
development and operation

such a

jurisdiction

should

begin

where state jurisdiction ends. For
than

more

20

have

I

years

ap¬

The

create

opposition

to

any

proposed

legislation that would
duplicate or encroach upon state
jurisdiction. The so-called Hold¬
ing Company Act of 1935, in my

should

Government

re¬

Elected to Board

the

Of J. P.

right to enjoy the fruits of one's
by

regulation,

J.

It is time,
therefore, for all of us individual¬
ly and collectively, to take stock
of our national government as it
functions today.
So-called Good

never

preference in favor of any busi¬
ness, nor favor one section of our

<

and

the

private electric industry

have

been

greatly

handi¬

capped in any plan it might have
had for substantial development of
its
business, and
public power
would have been in
able
over

our

most favor¬

a

position

its

of

to spread its wings
national economy in all

imaginary

public

benef¬

icence.

a*

Mr.

in

heads

Hinton

bank's

the

depart¬

He has been with Morgan's

directors, it was an¬
by Henry C. Alexander,
Chairman.
They are Stuart W.
Cragin, Longstreet Hinton, and
John M. Meyer, Jr.
Mr. Cragin's and Mrs. Meyer's
executive
responsibilities
are
primarily in the general banking
field.
Mr. Cragin has been with
the Morgan bank since his grad¬

Vice-President in

1955.

Also announced

were

uation from Yale in 1928 and

was

board since 1945 and 1942, respec¬

1940

tively. Mr. Metzman is the retired

since 1923,

the year he was grad¬
College. He

uated from Williams

Vice-President

elected

was

Trust Officer in 1940 and

Vice-President

elected

a

and

senior

a

in

Vice-President

directors

served

had

chairman of the

in

of

S.

on

Zinsser,

the

John

and

who

Morgan

York Cen¬

New

tral Railroad Co., and Mr. Zinsser
is vice-chairman of Merck & Co.,

.1955.

defend their preservation.

as

Metzman

and

senior

the resig¬
Gustav

,

nations

a

Inc.

Mr. Meyer was graduated from

'."v

Former President Hoover refer¬

ring

to electric power as being
essentially a local problem and
ought to be exclusively under
local control

"There

said:

are

the

most

weighty reasons against Fed¬
eral regulation. Power is, by ne¬
cessity.

bound

districts

to

local

be

in

its

to its service, its gen¬
and
distribution.
Local

as

eration

acquaintance, local valuation and
Fifty Year Limitation Held Unfair
Section 6 of the
Act

contains

Federal

the

Power

limitation

licenses ''shall be issued for
riod not

exceeding 50

license

such
.upon

shall

that
a

pe¬

Each

years.

be

conditioned

acceptance by the li¬
of all the terms and condi ¬

an

censee

public

opinion can operate upon
to
their
fullest
extent.

power

Nothing will produce
ice than to
attempt
local

racy

stand

the

and

acceptance

thereof

shall be expressed in said license."
'•

It has

never

'sensible to

investing

that private capital

to

money

develop

and
should be

sell hydroelectric power
to 50 years, but

"limited

that

any

•limitations imported should be by
reasonable and proper regulation
to

that

see

its

'Conducted in

business

a manner

is

not

that would

be detrimental to the best interest

;of the

public. The constant fear
that at the expiration of 50 years,
the license might not be "renewed
or

extended

certainly acids to the
financial hazards making the se¬
curing of capital for such project,
and

expansion that might be
required,- more difficult.
There
any

does

not

to

seem

for such

reason

a

be

be

of

Federal

the

in

Gas Sales

more

a

centraliza¬

Revenue

State

The

Utility Commissions and State re¬
sponsibilities."
More

recently

Senator

speaking to

the
in

Commerce

of

distinguished
public official,

William

H.

Junior Chamber
Richmond, Va.,

In

let

under

our

So let

at the time of its enactment, that

is

possibly there might be

a

future

determined

more

three

•y.

E
of

-

»*•:.

•

(exclusive of oil
and gas reserves)
*

>

v..

•: <

••

..

^

.

:

2,865,827*£
&
/.

:

•

'-v.-

g V ,•• :

Oil a»dGas

'

.....

growth

you

will readily

your company has ex-

to

woe.ws ]Ms-.

-

1955.

for

government

.........

•

(2) 'Company policy rx to expend estimated
,

^

f

converted

./♦ basis of

20 md

of gas equating 1

barret

of oil;

recovery
of

to

t^tal

oil

We are

doubled

of December 31,

owner¬

race

hearing much these days

discrimination
color by

or

ernment,
being

of

the Federal Gov¬

there

yet

said

because

about

is

nothing
dis¬

economic

crimination among its citizens and
localities.
TVA furnishes cheap
power

to its customers.

velopment
meant

by

much

Tennessee

public
that

to

This de¬

funds

has

section

of

Federal

Government

alarming extent, and in my
opinion a national awakening is
needed to restore the proper func¬
tions

the

of

to

government

country, which

locating
this

are

contemplating

elsewhere,

section

the

because

deciding
of

this

on
eco¬

nomic advantage.

Large sums of Federal funds

•appropriated bv Congress

are

almost

-annually for maintenance and

op¬

erational

needs

ment and

expansion of TVA. Tax¬

for

the

task. This
ment

bottom
just
like
private
enterprise has to do? If such de¬

*own




new

had

their

State

rightful

James R. Wendover
President
Annual

Report mailed

on

request.

The

be

an easy

power

alarmingly in
and in adher¬

adherents

of

this

new

government are not
confined to any single group or
class of people. They come from
all walks of life.
In many in¬
of

stances

the

msii

concept of govern¬

grown

concept

adherents

of

this

philosophy vigorously condemn it
while supporting it by their deeds.
In conclusion I wish to empha¬

develop¬

payers' money *— the' business of
private utilities is taxed along
rwith the/general public- to support
•it. Why shouldn'.t it stand, on its

and

This is not going to

ents.

of

Federal

equilibrium and sphere.

strength, in

sections

that

an

located

other

.over

of the several states has grown to

by it.
It has
it is claimed, for
substantial industrial development
in
that
area,
and
for industry
in

over¬

lapping of the jurisdiction of the

served

been the reason,

The continual

to the nation.

size

that the

idea has takep. root

in the minds of many
you can
-so

long

,

people that

get" something for nothing
as vou

ernment.

get it from, the gov¬

This idea of government

has-caused

many

people to aban¬
qualities of

don such fundamental

NOR TEX OIL anil GAS CORP.
T'%
DA

LIAS;

Tfc*#,*

the

also

oil ia, process

development/

The third

as

oit

reserves

-

about

::V>/

Nvtem "
"'*.
'
/
'
"' * "
t '• •"
"y.v>....
?
11) Before deduction. of. depredation.. rlepletUm.. abandoumeo.tv-.and

$495,

3,076,608 barrels

,

-

+' % dri|liog - operation^ *
*
\ ^' 'f/y
detfuctibn for depreciation^ add -d

$747,803 in 1956,

reserves,

:•.>•$

ajtt'e.eoa IMs.

$588,

increased from

:

r

understanding of the accumulated
1955 to 6,106,669 barrels as of Decem¬
ship and operation and therefore consequences of the Federal Gov¬ ber 31, 1956. Of the total reserves,
the door was left open so that if ernment's continual expansion of
3,017,669 are considered proven pri¬
it appeared at the expiration of statutory and administrative agen¬
mary, and 3,089,000 are considered
and
activities
which
are
any such license that it was op¬ cies
portune for the government to gradually eating into our State¬ Vas secondary recovery reserves.
step in and take over such opera¬ hood, thereby destroying that bal¬
tion, it would not be necessary to ance between the several States
The outlook for 1957 is excellent and
go
back to Congress to secure and the Federal Government,
further substantial increases in all
which the Constitution so pains¬
"such authority. >
three of the above categories should
takingly tried to create in order
be realized.
Economic Discrimination
to give stability and pei'manency
demand

v y

•

fix■ iwswves ii),

/*•

115% gain over 1955.

serious

and

the

increased

sentiment

a

415,171

experienced
all

which amounted to

economy

hope that

us

in

periencCd. Crude

beginning to crystallize in

now

company

Summary, opposite,"
see

Redressing the Balance

"thought behind it must have been,

,

/>;■/•;

may

The

Income

Total Assets

s
By checking the Comparative Progress

not get out from under
them again in our lifetime."
-"
we

your

these vital categories.

slip
such controls in peacetime,
ever

1956

substantial increases

by any group in Washington.

we

1,158,089

Equipment Rental

sales; (2) cash
earnings; and (3) oil and gas reserves.

said that in each of his
12 years in the Senate, "I have
become a stronger advocate of the
rights of the States.
It is my
strong belief that this nation of
ours
is too large geographically
and too complex economically to
be either effectively or efficiently
If

important factors in

most

of crude oil and gas

Knowland,

March 23,

run

three

evaluating the worth, growth and pro¬
gress of a crude oil producing com¬
pany are (1) the amount and trend

a

well-known

275.818:

<('<..

Drilling Contract

To the Stockholders:

Government

than to thus undermine the

and

159,626

responsibil¬

could

extension

outlook*.*

good

any

limitation.

a

Nothing

tion

appeared logical or

me

the local

upon

hideous

tions

HWsi

Washington. If our democ¬
will stand at all, it must

ity.

prescribe in conformity with this
-Act, which said terms and condi¬

and

transfer

to

problems to asbsentee solu¬

conditions

the Commission shall

progress

serv¬

tion at

tions of this Act and such further
as

worse

a

1955.

investments

and

ment.

of

1940 dnd

in

Vice-President

trusts

bank's

that

beepming

.

Vice-PrfesiaPnt

senior

nounced

Samaritans are steadily moving in
obligation of private on our personal liberty and free¬
opinion, was originally proposed industry by its initiative, ingenu¬ dom, If that freedom and initia¬
with the intention to leave to the ity
pnd business acumen to serve tive are destroyed, our, nation
states a mere Skeleton of authority its customers as economically as will most likely fall into decay
over
electric utilities.
If it had possible, and the Federal Govern¬ and disintegration.
not
been for
amendments
that ment should not be a party to any
It behooves everyone who be¬
were
adopted, State control of plan that would prejudice the
lieves in States rights and private
electric utilities would have been' public against private industry, in
be
at all times
emasculated, and the electric its sincere endeavor to serve the enterprise to
power industry would now be pre¬
public needs adequately and at eternally vigilant to protect and
dominantly under Federal control, reasonable cost.
")vv-Vf
would

s

Morgan & Co. Incorporated

board

the

is

P.

have been elected to

country over the other.
It

.Mqj gan,

Morgan Go.

Three senior Vice-Presidents of

circumvented

and

by excessive taxation.

assist in promoting any

or

self-reliance,
ingenuity and

labor have been steadily restricted

should be placed on an equal and
identical basis in every respect.

committee

as

sourcefulness,

that

peared before "some Congressional
in.

the University of Chicago in 1927.
He was first employed by J. P.

will to succeed. Incentive and the

eral

29

(2753)

The Commercial and Financial Chronicle

in Stevens County a

tant election

Continued from page

23

know

ago.

so

Uninformed Public

big way, operating on

this

companies had
no standing to maintain the suit.
A very small number of people

subsidies

that

throughout

the

Stevens

the

knew

issue.

tax

But

County

formed

as

facts

solution

about

better

campaign. About 43% of the

Let

question

taxes just as the power com¬
panies do, instead of enjoying an

exemption from Federal
taxes.
These taxes, like all other costs
of doing business, are ultimately
•paid by the consumer. Let us
make
a
theoretical
adjustment
that would enable the people of

customers

of

the

nificance

that if

We find

Cost

have

make these

order for it to break even—except

the

rate

charged

Same level as the rates that power

correlation.

companies charge the AEC. Thus
the
taxpayers,
who own AEC,
subsidize TVA but get none of
the subsidy back in the electricity
they buy from TVA. All the other
users
of TVA power are getting
it at about half-price—at the ex¬
pense of the nation's taxpayers.)
The government has found no new
way
to make electricity. It is
simply that the government sells
its electric
power
at less than

knowledge

true

will

people

only

a

TVA

experience indicates that
few people know that the
has

been

never

declared

the

decided
Court.

In

TVA

the

by

the

have

U.

S.

been

formed

Ashwander

case,

lines

transmission

in

company

which

order

the

from

power

from

had

been

World

War

to

power

transmit

Wilson

Dam

constructed

defense
"19

I

measured

as

dur¬

In

national

a

1938

in

the

Companies" case, the Supreme

Court dismissed the

case

the

the

facts

to

The

in

will

when

a:

Company went through

an

In

of

issue

plants

the

generating
not

was

do

on

valuable

we can

tools

Also, there

with gov¬

cope

in the

where

into

the

are

more

im¬

we

government
for

trend toward

people
and

not

task

First
our

ure

have

we

them¬

well-

these

at

be

to

the

given

which

will

subjects:

to

the

.

.

.

intends

(1)

,

the

to

it

for

the

with the

Butler

commented,
the power, do

assert
O'Brian replied—"No;
you

"I

-

The

(3)

History

of

ployees

we

to

come

.

power

should give our
information on both
of

of

state.

The

following is

a

condensation of operations since 1930:
Per Cent

'

\

1950

1956

Increase

$15,197,276

187%

could

the

em¬

Utility

vs
Both

are

essential to

At periodic intervals

employees
our

a

knowledge of our
the basic facts about

300

WATER

We

about

should

the

strive

MONTGOMERY




•

SAN

FRANCISCO

4

•

CALIFORNIA

of

re¬

If

our

Georgia Power Co. at 102.29% and
accrued

interest, to yield 5.10% to
maturity. Award of the bonds was
by the underwriters at com¬
petitive sale June 6 on a bid of

won

'

101.48%.
The

deemable

*

bonds

new

to

are

be

re¬

at

^regular redemption
prices ranging from 107.54% to
par,
and at special redemption
prices receding from 102.29% t&
par, plus accrued interest in each
case.

1

,

Net

the

proceeds from

the

reason

to

be¬

We
task

.

have

we

received in
additional

from'the sale of

1957

shares

common

to

its

parent organization, The Southern

will

be

used

permanent

by

Georgia

improvements,

sions and. additions

exten¬

its

to

utility*
purchase of ■shares of capital stock of Southern

plant,

and

for

-

the

Electric Generating Co.

Georgia Power Co., an operating
subsidiary of The Southern Co., is
engaged in the generation, pur¬
chase and sale of electric energy
within the State of Georgia, at re¬
tail in 631 communities, as well as
in rural areas,

and at wholesale to
municipalities and 39 rural co¬
operative associations; the pro¬
50

duction

of

sale

and

heating

purposes

for

steam

in the main busi¬

district of Atlanta, and, pend¬

ness

ing the

required

transportation
in

buses

disposition,

of

Rome.

the
by

passengers

The

is

company

participating

with
a
group
of
companies, including other
companies in The Southern Sys¬
other

tem

and

headed

by The Detroit
the building of a
"fast breeder" type nuclear power
plant in Michigan.
Edison

Co., in

For the year

total

1956, the

$111.413,000/and

company

revenues

operating

of

income

of

net

815.442,000.

Haight Hill Go.
5
Research Firm
,

Formation

of The Haight Hill
Company, has been announced by

Frederick
of

the

Stein,

"American

York.- .The

associate editor
Banker," New

firm, located
at 32
New York, will spe¬

Broadway,

cialize in business research for

or¬

ganizations who do not have their

facilities,

that

ig¬

This

surveying and resurveying,
sure

that

should

also

measure

the

knowledge of three other

133%

stockholders, opinion leaders and

94%
316%

101%

the

general

make

every

public.

We

effort to

understanding

to

up

groups—

should

effort is not

our

well

best.

at

We

with

difficult

a

know

what

provide

better

or

The

leaders
have

society

in

a

in

go down

composite

himself

this prob¬

will

answer

nation

we

as

a

into darkness

as

have all

millions who

whether we shall
our
posterity
the

power

we

to
live—a

esponsibility greater than that of
businessmen

ask

about

before

the

because

we

post May 31, but con¬
tinue to serve in an advisory ca¬
pacity. /V
The Haight Hill Co. will devote
itself

to

us,

or

for

we

And therein lie the

challenge facing us today.
May
God grant us the wisdom and the
courage

to

meet

it.

served

areas

and small business. It
offer informational services

on

area

banks'

and

supplement

to

economy

business development pro¬

grams as well as

marketing

provide business

information

to

business firms.
Mr.
War

Stein,
is

II

World

of

veteran

a

graduate of Fordham

a

and

attended

University

Seton

the

and

New

School of Social Research.-He has
Ohio.

daily newspapers in
his native New
New York where he

on

Virginia,

Jersey, and
worked

the

for

Journal"

"Wall

the

and

Street

York

New

"World-Telegram." He joined

the

"American

He

Banker"

1949.

in

bad also worked for the Lockwood
Trade Journal Co. He is
of the
ers

member

a

Association.

\

Form Harris Securities
N. Y.
Corporation

BROOKLYN,
Securities
formed
27th

.

New York Financial Writ¬

came

great benefits of freedom that
have enjoyed.

in

research

banks

by
will

worked

of

the uncounted

responsibility

which

must

do

determine whether

preserve
as

business

other

lem.

us

will

way

satisfactory

level.

'he

of

what he

as

we

must do; there seems to be no dif¬
ferent

as

shareholder and public

University
faced

are

bring their

a

counsel jji

editorial

also

dealing
lieve that they'will want to keeu
with our problem. Thus far, there
that system and that they will
! is only this one solution avail¬
want to do the things
necessary able to us.
to keep it.
We

:

of

sale

bonds, together with pro¬
ceeds already received and to be
new*

Hall

and about American

economy

built

wasted.
.

facts about these issues and about

freedom,

have

we

is to ask them.

way

to make

employees have the

our

that

We know that the only
to find out if people think a

means

reach

240%

COMPANY

loss

a

way

power

to

1,556

& TELEPHONE

the

remember

us

certain

goal of 80% in realization of the

facts.

We

CALIFORNIA

mean

about this.

the
on

system and

issue.

should

we

10,673

Employees

ques¬

a loss of politi¬
freedom; that in

purely mechanical process for
doing this; but doing' it means go¬
ing through all the details of that
We know a great deal
process.

good basic

a

Let

is

undertanding of the problem.

171,649

Stockholders

of

is
not
eradicated
by
merely writing letters, mailing out
booklets, or giving speeches. There

the

65,042,337

Plant

Customers

A lack

part of many

economic

norance

business

power

5,353,2-10

Operating Ineoinc

bonds,
of

1987

1,

relations. Mr. Stein will leave his

Each

Operating Revenues

June

own

;

business-managed
politically-managed power.

remeasure

one

the

loss

of

and the issue of

With

on

basic

on

the

here in America.

the

we

economics

the most highly mechanized
telephone systems in the
nation, and with water operations of the liighest efficiency, our Com¬
pany provides two important utility services in America's fastest growing

$15,500,-

a g e.

ligious freedom and disappearance
Christianity — even loss of the

American

The Power Business

business,

I do not."

Extraordinary
Expansion

of

the basic

mean

allowed to continue.

turn

When

•

not?"

mmumn of

on

75%

company's whole property

the

could

cal and economic

Economic

tg

civilization

(2)

know,

you

have

we

people uninformed

people

Freedom

purpose

generating power for sale, and I dis¬
avow
any such intention at this time."
Justice

the Chief

tions could lead to

American

due

on

underwriting

offered

m o r

series

Inc.

Co.

&
an

say

Here

information

following

of

but

and

that

if

.

use

for

us

of

courses

System

.

on

We should find out

issues

v'

,

The

first

of

51/4%

uninformed.

situation.

TVA's

use

our

these

"Bring me a
plan to correct this," because 75%
losses would present a dangerous

employees

our

cover

in

would undoubtedly call

that progress can be measured
in the future. We should then set

series of information

Also,

operating company experi¬
75% losses, the President

an

Engineer

lay down

we

issues.

people know the facts and
are

enced

so

impor¬

to

mark | which

000

had

/.If

system
and
on
the
power business. This will be the
bench

are

whether for example only 25% of

the American

on

business

interested

about these

their service.

obligation to

an

community
our

facts, since they depend

employees. We should meas¬
the extent of their knowledge

and information

re¬

decision.

to the

are

discussing here. The opin¬

are

customers

clear.

seems

our

entitled to know the facts that

and

depend

personal

their

peo¬

the stockholders;
they as the owners of our business

.

Ashwander

as

community

enterprise system.
They too might want to inform
their employees in the same way.

75%

to,

power

onr

American free

Employee-Information Program

Power;

presented

the

among

have

leaders who might like to know

being and security. Knowing this,
our

Case, Justice Butler
lawyer, John L. O'¬
of steam plants.
O'Brian said: ".
That steam plant is
not in this case
There is nothing in
this record to show that the Authority

Brian,

will

encroachment

system

up a

for

We

leaders
in
the
same tools can help- ion
dealing with the bigger prob¬ want to know about

upon

stop-

we

Water

other groups which

are

also reach.

can

friends

decide

must

business. What is

selves

Washington Water Power Election

1 The

But ihere

economic

Washington

it.

we

It is to tell

he

hands

lem, involved

/ f.

Court

what

our

power

solve to tell them.

steam

for

encroach¬

people.

the

want

informed

here

us

with which

key.

y

The

of

within

problem is

our

on

become better Americans because
ol

en¬

reasons

our first duty to in¬
employees as to the
these issues, They will
own

our

facts

these important matters. We have

stop it. They will want to stop it
when
they are informed. They
be

the

government

himself

for

to this tax
they are in¬

facts.

of

responsible.

ones

Having realized our responsibil¬

dustry has had in informing
ple
about the
benefits
of

Each

American

American

when

questioned

a

also

the

Stuart

headed

syndicate which

Co.,

Our duty seems clear.

the tax
evidence;

the

opposed
to

surveys

7

Power Co. for the construction of

■

portant, these

lack

a

on

discrimination

This

ever

ing

as

telling

Supreme

decided in 1936, this court upheld
the
right of TVA to purchase

is

that

1o the solution

Constitutional. Only two cases re¬

garding

are

is

fact

discrimination when

cost.

Our

indicate

be

are

will

so

about the experience that our in¬

any

There

there

question;
to

alarm but who failed to do

a
lack, of knowledge of
.the part of a substantial

on

ernment

of

had

majority of the American people.

Here again we observe a strong

(This rate is already about the

blame will not

Rather, those of us
the power to give the

coming.

who

people the facts.

be

duty

those who did not know it

on

was

oy%V;

ours.

and

trace

to

to

facts

titled to them?

AEC.

the

to

there

studies

us

ment

four-

where

:•> The

ity it becomes

continued

uninformed

were

fall

form

able

stronger
evidence of the relationship be¬
tween
knowledge of facts and
opinions? We have those facts.
Are not the people we serve en¬

rates would
nearly doubled in

be

to

Over

one.

achievement, the

have

These

pay

lead.

will

are awarp of what is happen¬
ing must always da more than ou r
Share.
If- we fail, if as a nation
we drift into patterns which spell
the
end' "of
our
freedom
and

survey

people

yet realized

not

who

opposed to the

aie

have

course

we

resting upon the few who do know
therefore becomes greater.
We

idea. The reason we
preference is that we
haven't informed people. The fault

as

same

tion

this

still

asked:

was

plants

the

them

of

Can

TVA's

when

find in
It seems that most
of thought and ac¬

by the situation

preference

misinformed.

or

we

question

this

to

answer

com¬

that

informed, 69%

gov¬

exempli¬

as

of the leaders

this

cn

toward

business,

bur industry.

fourunin¬

are

misinformed

or

shows

Fed¬
private
companies do?" Only 17% of the
people
asked
knew
the
right
taxes

fifths

adjustments,

pay

fied

trends

of
in

ernment

Only

over

that there

discovered

have

June

Few

a

oil

relatively few people in this
country who are aware of the sig¬

questioned

Again,
people

is not theirs—it is

this

city-owned

eral

r

Less Than True

people

our

question. Furthermore, the

"Do

to pay

power

the

of

Sells Ga. Power Bonds

hands.

our

are

electricity

formed

Then

panies do.
■■

not

taxed?

their full share of these taxes just
as

should

or

of

We

.

of
in¬

cus¬

project?"

panies do?" Of those asked, 54%
say
it should. Twenty percent
have no opinion. What would their
opinion be if they knew they
were
being
taxed
more
than
otherwise
because
TVA
is
not

pays

the Tennessee Valley area

should

TVA

18 %

fifths

buy

to

Federal

a

knew the facts.

asked: "Do you think

was

chanee

from

taxes the same as the power com¬

TVA

that

also

assume

us

equal

pay taxes the same as the power
companies. Sixty-four percent do
not
know
this
fact.
Then
this

building
of
rower facilities to serve their cus¬
tomers, electric utility companies
borrow money on the free market.
Let us assume that TVA raises its
funds in the same way, in the
traditional free enterprise fashion.
the

finance

To

Halsey, Stuart Group
Halsey,

result of the election

a

is in

Duty Rests

the^ taxpayeis realize that the Federal Govern¬ tomers in Stevens County were
money.
To get an idea of the
ment is lending money to other, correctly
informed about taxes.
extent to which TVA is subsidized,
Why do we have to wait to have
power projects at an interest rate
let us see the effect of removal of
a
Stevens County election to in¬
below the market price.
two of the subsidies, namely, cost
form
people on this
important
In a survey made this year by
of money and taxes. Considering
question?
:ao
other subsidies, let us apply Opinion Research Corporation, this
People are also uninformed oil
to the power operations of TVA question was asked: "Does TVA
the
question, of preference.^ In
exactly the same rules that are pay taxes the same as private
this year's survey, this question
applied to Ameridh's power com¬ companies do?" Only 36% of the
was asked: "Do all groups have an
people know that TVA does not
panies.
with

provided

We

with it.

cope

have evidence to indicate that the

the

the people

were

to

means

of its

only 23%

company,

customers

statement that the

business in

in the power

whole

Zealots

Of Government Power
/nent is

found

and

about the problem. We

more

have faced it; we have developed

The issues there
clearly presented on both
sides. The company had some sur¬
veys made to see how it stood,
or

year

were

a

Thursday, June 13, 1957

...

(2754)

*0

with

Street

offices

to

rities business.

—

has

at

engage

Harris
been

723

in

a

East
secu¬

Volume

185

Number

5646

.

.

The Commercial and Financial Chronicle

.

31

(2755)

hibited the building of dams in
navigable waters without the per¬

:

i.

•« »

,

<

»

,

y».

,: .i

j...

.j,.

...

■'

,

,

■

paralleled views of President Eisenhower and those inde-

pendently arrived at by the bi-partisan Hoover,, Commission J
on sound
long-range Federal power policies are presented by, > Cornell Engineering Dean after decrying the uneconomic and
inequitable extension of Federal public power programs. Dean ^
Hollister depicts extent of subsidized public power costs and/* J ■
observes 80% of the people are paying, a quarter to a third '
of the light bill for another 20%. Claims largest block of*'
/
subsidized power goes to business and industry, not to home¬
,

:

/

and, contrary to politicians' claim, shows kilowatthour

owner,

residential-price has

declined.7.from

5.6

governments in lieu of such taxes

was

3.3%

2.69 cents in 1954.

v-'

electric bill

your

that 3o%

'v/' -O'-/.

1

t

e c

could

t h

e

r

•

do

now

The

.

of

taxes

and
cost

the
of

capital? This
what

biggest

the-

for

>.

stallation

of

facilities.

Who

is

which

this,,

How

Dr.

-V

that

on

someone

Hollister.

do with the

It taxes you

/
bill saying

has been added

so

you newr nearu or

that

»••

-.:

<

of us, but it isn't being so marked
the
bill.-: About 80% of the

on

.

third

paying a quarter to a
light bill for the

are

of

the

.

other 20%.
r

/./>,/■/;

In 1953 the

second

Congress created the
Hoover Commission, a bi¬

partisan group of 12 men, headed
by former President Herbert

Hoover, to examine into the effi¬
ciency,

policies

and

function

of

the Executive Branch of the Fed¬
eral

Government, and to report
Congress in the spring

back to the

of 1955 with recommendations for

(a) reducing costs, (b) increasing
efficiency, (c) getting the Federal
Government out of business enter¬

prises.

Half of the members

were

from

government, and half from
private life. The Commission has

interests

address

the

25th

son

Electric

4,

by

Annual

Dean

Hollister before

Convention

of

the

Edi¬

Institute, Chicago, III., June

The

streams.

great Keokuk Dam
Mississippi, completed
was
one
of the power
that / were ' thus ,con¬
by
private
enterprise

the

across

in

1913,
projects

Federal

under

em¬

construction

When steam

constructed

Congress
authorized
electric power . at
constructed
for
irrigation

der

purposes,

surplus

the

struction

purposes.

Defense

President
of

and

from

power

municipal
National

the

1916

of

storage

of

dams for

a

it

of

plants

and

au¬

has

for

water

the

such
Un¬

Act

directed

of

con¬

development.

Thus the TVA has shifted in
pur¬
pose

from

developing hydroelec¬

tric power as a component of the
river development, and has moved

directly into the

1906

water

sale

license.

power

business

on a large
scale, and without
propriate regulation.

In

recent

years,

ap¬

Reclamation

and the U. S. Engi¬
Corps of the Army have en¬
gaged in large development of

Federal power projects.
TVA

the -manufacture of fertilizer. This

1954,
In

rec¬

project

was

.to

provided

non¬

a

agencies-in this field.

first

The

great Federal Power
Development was the building of
Hoover

Dam, authorized in 1928.
This large multiple-purpose struc¬
ture

was

to be built by the Secre¬

owned

navigation,

trol,

reclamation

con¬

and

making

addition, their stockholders

paid.

taxes

on

all
'

-

The

Federal

bonds

•

•

,

Government

must
on

long-term
financing.
Money furnished the TVA or any
other

Federal

project, therefore,
Treasury 3% interest,
so furnished, it could

the

costs

since if not

have been used to reduce the

terest

In

1953

the

on

vestment

the

annual

would

in¬

power

TVA

in¬

been

$27

have

million; in 1956, it would be $57
million; and in 1958, $90 million.
In 20 years of existence TVA has
returned

lent

Escapes Costs

installations.

1956 the total

only $81 million, equiva¬
but

to

the

three years' interest
investment in power.

1953

$2.1

an

enues

tal

at

3%;

taxes;
on

and has not
its invested capi¬

the

TVA, during the fiscal year 1953,
had a deficiency resulting from
costs

in

excess
of operating rev¬
of 29% of revenue, when
computed as for utilities. This of

1962 the total will reach $3.4 bil¬

enues,

for power.

is

for

Hoover Commis¬
sions' Task Force showed that the

of

property

as

utilities

equal to only 3% of
instead of 23% of rev¬
paid by investor-owned

paid interest

lion, of which $3 billion will be
Federal

Continued

normally

on

page

the project self-supself-liquidating.
At

half of 1 %

of the total generating that time its cost was beyond the
capacity of the country. By51953 resources of private, capital. The
it owned over 10%. Adding what Federal Government, therefore,
is authorized but not yet installed, was to advance the money at 4%
there will be a total of nearly 35 interest and the original cost re¬
million kilowatts capacity, bring¬ turned
out
of
earnings to the
ing the Federally-owned and op¬ Federal Treasury;' The act"also
erated
total
capacity to nearly provided that charges for elec¬
one-third of what the total in¬ trical energy sold should be read¬
stalled capacity in the country is justed
from ./ time
to
time
as
at present.
justified by competitive conditions
at distributing points. In 1940 the
Traces Federal Power
Congress abandoned competition,
:
as
a
basis for power rates and
/
■*'■•:
Development
> V
How
did, this
situation
come
changed the 4% interest rate to
about?
Congressional action re¬ 3% during a 50-year period. It
specting waterpower, and the Fed¬ also specified annual payments of

A

Growing Public Utility

California-Pacific

tric,
of

w

gas, water

hich is

Utilities

interest there¬

in, began in 1879 when
Secretary
of
.War/ was
thorized

,

to .lease

developed

power

dam
the

the
* au¬

mechanical

at

navi¬

a

at -Moline, 111.

Congress
the

In

specifically

construction

of

a

private power development

on

Mississippi

Cloud,

In

River,

1890

at

St.

the Congress

the

pro¬

each

$300,000
Nevada
rado

one or more

experienced 47

in the most recent

per cent

census

increase of 14 per

increase in population

decade, against

a

national

cent—and this trend continues.

Arizona

and
the Colo¬
Development Fund.
to

and $500,000 to

River

operates elec¬

provided in 69 communities in California,

.

eral Government's

Company

and telephone services,

Oregon, Nevada, Idaho and Wyoming. These five
states

CUSTOMERS

REVENUES
MIUIONS Of

DOLLARS

NET
THOUSANDS

INCOME
OF

DOLLARS

Power

production at Hoover Dam
began in 1937. Congressional ac¬
tion of

1940 has slowed down the

originally intended rate of

amor¬

tization of the Federal investment.
The

real

Federal

introduction

Government

into

of

the

active

production of electric power on a

KEEPING AHEAD IN THE WATER RACE
California Water Service
been

engaged in

a

Company's planners and engineers have

spirited

race

with the water demands of 29

growing California communities during the

years

of this state's

dynamic post-war expansion.
To

Between

keep ahead of the water requirements of

tomers

added to

for additions and
ment

totals

our

system since

123,000

new

cus¬

1945 has required $52 million

improvements to plant. Today's capital invest¬

creased from




374

West

Santa Clara

Street

San Jose, California

to

$2,531,520
$250,789

customers

61,492; total

revenues

in¬

in¬

to

$8,808,386;

to

$757,382. Customers in¬

net

income

103 per cent; revenues, 248
per cent;

earnings, 202

CALIFORNIA WATER SERVICE COMPANY

1956, number of

30,222

increased from
creased

$7^1 million.

1946 and

creased from

and

per cent.

California-Pacific Utilities
SAN

$179

amount

revenues,

investment in TVA

billion,

total

Since TVA pays in lieu of taxes

During

which $1.6
billion was for power, about half
of which was for steam plants. By
was

na¬

tional debt and thus stop the pay¬
ment of interest on an equivalent

of which $924 million is allocated
power

its

for

inception in 1933, to Up to June
30, 1956, the
June 30, 1953, there has been in¬
repaid
was
slightly
over
vested in the TVA $1,263 million,
million.
to

pay

dividends

currently pay 3%' interest

its

other purposes, with the installa¬
tion of power facilities as a means
of

amount greater than their

additional

on

Since

an

payments for salaries and wages).

amount.

the Bureau of

neer

nitrate

porting' and

Minn.

1957.

being

the

on

now

electric utilities pay about
of gross revenue in taxe3
(they paid $1.4 billion in taxes on
$6 billion sales to customers in

Appropriations have been running
about a quarter billion annually
for the years
1951 to 1954.
By

series of

Federal> Government

authorized
*An

the

upon

steam plants.
now

It has

Federally-controlled in steam of three times that which

on

the

1884

of

barked

licensing and control, thorized are completed, the TVA
by private will have a generating capacity

tary of the Interior for flood

searching

made

Tennessee River.

the'
Congress until 1925.
Subsequently it was
collectively to a absorbed into the Tennessee Val¬
recommended policy. ley Authority System. ' ;

a

paying to local

was

23%

that period TVA has returned to
the
Treasury only $81 million.

The

a

gation

ever

hydroelectric development

of power development

generating capacity of
232,000 '"kilowatts.
By /1953 '.it
owned
and
had
in / operation
nearly "50 times the capacity of
1933—10,500,000 kilowatts. In 1933

made and reported upon the most

review

Govern-,

•

area.

In 1933 the Federal Government

owned

like to receive

light

and

control,
navigation,
and other purposes. The
Authority has substantially com¬
pleted construction of all feasible
power,

delayed by the First
World War and was not completed

thus

was

offices

get his light bill reduced 35%?
This, is what is happening to most

people

Federal

partisan basis for judging the poli¬
cies and functions of the Federal

■

the deficit.

your

sum

a

C.

S.

v

would you

note

power

amount

There

flow does it do this?

a

> the

statement of

/

iproduc er ?v
Your Federal

to make up

on

ommendations

Government.

Re¬

and

dams

All of these acts had to

flood

,

Commission made

its

customers.

aid

the

on/ Water

Force

ment's functions in this

the business
do

a

made

power

producer in
can

Task

with

i

1

u s u a

Commission,

au¬

plant, a
sources
and Power, made up of steam-electric
power
plant, and
26 distinguished citizens under the the Wilson Dam at Muscle Shoals,
able chairmanship of Admiral Ben Alabama./ for the production of
Moreell, made the most compre¬ nitrates and other products needed
hensive
fact-finding report ever for munitions of war and useful in

pay

full

is

recom¬

War might

non-Federal

Na¬ "dams/

being deducted be¬ mendations made to the Congress,
utility furnishing your none; was determined by
vote
icity
r "
/ >/ ,/"//'' along party lines.

having to
.

Of the 314

history.

TVA

owned

of

development
of hydroelectric power in streams
under
Federal
jurisidiction.
In
1910 Congress fixed a limitation
of 50 years on licenses granted
by the Secretary of War for in¬

In

the

1953

of its gross power revenues.
It pays no Federal taxes. Investor-

;

in

was

without

so

tion's

notation

a

Branch

the

cause
e

with

Executive

This Authority
authorized to construct proj¬

ects in the Tennessee River Basin

production
//' ' How -would you' like to receive the

Valley

for

structed

1932-to <^ '

in

cents

Secretary of War.

Congress established

Secretary

thorize

Dean, College of Engineering, Cornell University

•/

Authority in 1933.

the

1906

Tennessee

the

By S. C. HOLLISTER*

The

In

the

terms and conditions under which

And Hoover Commission Views
'

exempt from State and local taxes.

lishment of the

of

In

':«%%» V

large scale began with the estab¬

mission

The Uneconomics of Pablic Power

FRANCISCO

Company

42

The Commercial and Financial Chronicle
32

.

.

Thursday, June 13, 1957

.

(2756)

Trend to Risk-Cushioning

Continued from page

Joint Subsidiaries

the door open to

allies.

Diversification Institute finds only 242 such "semi-mergers"
in

industry; generally they are working out to
market vulnerability.

shield parents

potential friendly

In the first place, new alli¬
and new supporters are re¬

ances

Utility's Future
Depends on Consumer Attitudes

Accelerating Despite Potential Advantages The Private

Not

advantages. We must leave

many

25

shuffled

so

often

these days, that

cannot afford to widen the

we

of

resentment

that

comes

knows

never

the

and

gulf

distrust

by name-calling.
whether

a

One

vote

for

bit at a time. Do not something about rapid tax write¬ public power yesterday will favor
management
tomorrow.
frighten the people by showing off, or tell our customers that private
Jointly-owned subsidiaries have
to this device."
them the whole program at one comprehensive development is a Our object should be to work with
been
set
up
by diversificationThe Institute cited two factors
good thing; and that private com¬ everyone who will sit down with
time. Rule Number Three—assure
minded but otherwise independent
as mainly responsible for renewed
development us.
the common people their rights panies ignore such
and sometimes competing compa¬
for selfish reasons, there is bound
interest in joint subidiaries: High will be
Challenging: Falsifiers
nies to spread costs and cushion
protected. Tell thern what¬
to be some kind of prejudice.
cost and risk of technological re¬ ever
A
When it comes to the extreme
is done will be done for the
risks in a wide range of indus¬
search and of exploring for new further well-being of the average false
impression is being given, advocate of public power, how¬
tries, according to a survey by the
and it is up to somebody to
Diversification Institute. The sur¬ sources of supply, and ever mount¬ man, the little fellow.
ever, I will be the first one to rec¬
ing pressure for diversification so
straighten it out.
ommend that we take him on. I
So the public power advocate
vey disclosed that 242 such incor¬
that "not all a firm's eggs are in
believe in calling a spade a spade,
porated joint ventures were oper¬
conceals his true
motive today.
Links U.S.S.R. to Public Power
one basket."
and I have never run away from a
ating in 1956.
Rather than talk about socialism,
Advocates
The joint subsidiary method also
good fight yet. I believe the in¬
he talks in terms of comprehen¬
Despite their potential advan¬
I think we should not overlook
"is likely to prove less vulnerable
dustry itself should stand up and
sive river development, about the
tages,
however,
they have not
the fact that extreme public power
to anti-trust attack" than
direct
challenge
ihe
perfectly
foolish
become appreciably more common
global race for power, with Amer¬
promoters, have the support
of statements that are
merger and acquisition, the Insti¬
ica lagging behind. He talks about
flooding the
in recent years.
Approximately
tute said, and it facilitates market
many
radical groups, and that nation. I believe we may go one
low-cost electricity to attract in¬
the same number were in opera¬
their strategy goes hand in hand.
penetration by using the combined
step further. I believe we should
dustries;
and
about democracy,
tion in 1948, according to an ear¬
prestige of both parents. Also, in which restores resources to the The un-American Activities Com¬ put the spotlight upon the individ¬
lier survey.
Of those currently
research it promises more rapid
mittee has reported that it un¬ ual that
promotes untruth, and ex¬
people.
"working for their parents," 141
covered a mammoth nation-wide
progress on the theory that "two
plain just why he's doing it. One
are owned by three or more par¬
In these respects, the consumer
campaign of political subversion.
heads are better than one."
thing is certain to my mind. The
ent companies, or in unequal pro¬
is being led astray. I am sorry to
The Soviet Union alone is soendThere are, however, dangers of
longer we let these falsifiers get
admit
portion by two, and so are not
it, but the fact remains.
"divided counsels" and certain tax
ing something like $1,167,000,000 a by with misinformation, the more
"50-50"
subsidiaries as
is com¬
While the voters express strong
disadvantages, the Institute added.
year on propaganda, while the East
monly supposed, the survey found.
opposition
to
socialism and to European satellites spend another courageous they become. If a man
For example,
if organized on a
is a socialist, if his operations are
The Diversification
Institute, 50-50
public power on one hand, thev $529,000,000, with America and its
basis, the domestic subsidi¬
unethical and evil, then I believe
are being led down the back street
founded by the Wall Street man¬
power supply the number one tar¬
ary that distributes all its earn¬
we have every right to draw pub¬
agement and economic consultant ings will find the government tak¬ to socialism by other means. There get.
A harmless incident taking lic attention to such facts. Pre¬
is pronounced growing acceptance
firm of Boni, Watkins, Jason &
place in Oregon, or Vermont, or liminary inquiry into the back¬
ing 50% oh th6 subsidiary's net
of "mixed economy" today, espe¬
Co. to do research in the diversi¬
in Texas, is hastily doctored up to
income and a modest bite out of
ground of some of them convinces
fication field, made no effort to
cially among the farm and labor fit into the great socialist scheme
each
me
parqnt
corporation's 25%
that they are vulnerable. It
groups.
Only a small percentage of things. TTie once harmless in¬
appraise the performance of these share.
"However, earning power
may clear the air it we do take
offspring of corporate marriages might well be less should either in each hundred customers have cident is quickly made to carry
them on.
v
•
ever heard of the preference law.
of convenience, but said that "in
an
evil portent for the popula¬
So now, in conclusion, I will re¬
parent go it alone," the Insti¬
Only a small percentage under¬ tion. It is given catch phrases, and
general they seem to have worked tute said.
affirm what I have said before.
stands the inconsistency between it covers the nation in the matter
out to reduce the parent compa¬
The public is on our side to start
hundreds
of
millions
spent
on
nies' vulnerability to
shifts in
of days, and ofttimes in the matter with. Our customers desire secu¬
Weil, Roth Co. Adds
;
TVA and so-called low rates in of hours.
demand."
Teachers and writers
(Special to The Financial Chronicle)
rity and peace. They are not un¬
that area. People see no discrep¬ and
"Companies go this semi-merger
many
commentators unwit¬ grateful for the many advantages
CINCINNATI, Ohio — Waldon ancy regarding TVA's slow indus¬
route to avoid direct merger, out¬
tingly reflect the prepared social¬ which? the
great
industries
of
Jones has been added to the staff trial
growth, and the political im¬ ist philosophy. We simply mUst
right acquisition of smaller com¬
America ^ have
provided.
They
of The Weil, Roth & Irving Co.,
plications of a bureau which is reach these influential people. We
panies and the risks inherent in
desire us to carry on. Therefore,
Dixie Terminal Building, mem¬ now
maneuvering for unlimited cannot afford to let experts in
venturing along into new and un¬
it seems to me that our one big
bers of the Cincinnati Stock Ex¬
power. Truly, it is a tragic reflec¬ hatred'toward the profit system
charted- fields," according to the
problem is to get closer to the
change.
tion upon all of us that the con¬
have their say, without some kind
Institute.
As a means of grow¬
public,
to
let
our
customers
sumer, who is on our side to start of answer.
ing and expanding, this technique
know, first, what we plan to do
Two With Central States
with, has been left in the dark as
dates back to the 19th century."
At this point, I would like to in order to advance their security*
to what is going on. The consumer
Petroleum, with 75, leads the list >:• i r(Special to The Financial Chronicle)
recommend three simple steps and
well-being; secondly, we must
has listened to the siren's song and
of the joint subsidiaries counted
MANSFIELD, Ohio — Loretta
which, if followed, can and should talk to them face to face, as well
has moved perceptibly toward staby the Diversification Institute, K. Derr and Jay B. Morris have
improve consumer understanding. as to the nation's leaders of
which sought to find out how often joined the staff of Central States tism in the past several years, and
I will briefly name them. It is not
thought, and explain our goal in
we have not made sufficient effort
private businesses "voluntarily re¬ Investment Co., 271 Poplar.
my intention to
disparage other simple terms. If we will do this
to halt it.
v
sort to this form of enterprise."
industry activities which are being conscientiously, I believe I am
When
it
comes
to
the third
Forty-six were found in steel, 35
carried on for the common good. safe in
With J. P. Lewis
predicting that all will be
in chemicals, 23 in insurance, and
question—should the electric in¬ I do not think it possible for us well with us. I believe we can and
(Special to The Financial Chronicle)
12 in atomic energy.
dustry make
greater effort to to overdo our public relations job. should work
together. And I and
MILWAUKEE, Wis.—Mrs. June achieve
public
understanding— But in my opinion, and coming
Examples of recently organized
my associates in the Water Power
K. Kumbera has become associ¬ there are two
important consid¬ from the day-by-day experience
joint subsidiaries are Dow-Corn¬
will stand with you in your ef¬
ated with J. P. Lewis & Co., Inc., erations. The first has to do with
in a very rugged part of the coun¬ forts.
ing
Corp.,
Olin-Revere
Metals
735 North Water Street.
aggression against our enemies. I try, I would like to suggest that
Corp., Chemstrand Corp., Bruns¬
do not think anyone in private in¬
wick Pulp and Paper Co., Titan¬
we give specia,L,emphasis to three
R. W. McGinniss Opens
Form Investors Trading
dustry wants to say or do any¬
ium Metals Corp., and Arabianthings, as follows:
thing which will reflect unfavor¬
American
Oil
Co.
WASHINGTON, D. C. — Robert
"They have
JERSEY CITY, N. J. — Inves¬
Recommendations
W.
McGinniss
is
conducting
a
expanded markedly in certain tors Trading Corporation has been ably upon the many honorable
i n
government
securities business from offices at
fields, particularly technological formed with offices at 101 Fair- representatives
First, I urge each utility to pay
who come from areas of public
1415 Tuekerman Street, N. W.
research, but have declined in oth¬ view
is

no

evidence of increasing resort

program

a

.

~

•

Avenue

ers,

the

such

as

joint sales agencies,"

Diversification

Institute

said.

"In the field where joint subsidi¬
aries
raw

are

most

common,

namely

materials procurement,

there

securities

to

engage

business.

in

Officers

a

are

I do not think we should

power.

splendid friends
Schachner,
president;
who happen to live in areas of
Frieda Schachner, secretary; and
public power. We have no quar¬
Samuel
Wertheimer,
treasurer.
rel with them; we believe there
Mr.
Schachner
was
previously
is a place for the beliefs and hon¬
with Berry & Co.
est opinions of everyone in this
great land. Municipal ownership
the

slur

Samuel

many

has

first

in

been

the

existence

since

1882,

of modern electric
Surely we prefer to live
years

service.

the wishes and

closer attention to
needs of our
of

makes

us

customers.

service,

be in the matter of

munity
hearts

is

no

first

one

or com¬

building, or through rhe
of our employees.
There
But surely our

answer.

one

in order.

They

are

bitter.

They are hostile. The public is not
learning the truth. Even Hitler is
credited with the saying that a lie
told

often

minds
ard

of

of

enough becomes in the
people a stand¬

honest

truth.

Henry

Hazlitt has
counter-at¬

said

that

tack

against the fanatic is to adopt

to

make

no

losing strategy. Therefore, can we
afford to sit quietly and allow un¬
truths about the industry to flood
the nation?
of

name-calling and charges against
utility are falling upon deaf
ears.
Little by little, the drop of

'ELECTRIC

the

GAS

TELEPHONE

WATfR

Specialists in the field
psychology aie not so sure that

F.

Ttl.

KING




70 Pine St., New York, N. Y.

BOwling Green 9-5550

would

hands,

each

cult for

a

utility with its own
is extremely diffi¬

It

customers.

at

of

our

survey

reports,

I

convinced that unless we are
willing—and that means all ox us
am,

—unless

we

willing

are

personally

to

take

talk with

time

out

more

people about our problems—

talk
can

their minds

|

vocates
——

of

today. If extreme ad¬
public power start

Walter
a

secu¬

from offices at

71

Opens

CITY.

Mo.—Sex¬

has
been
securities
business from offices in the Cen¬
Securities,

ton

to

formed

tral

Trust

Russell

W.

Inc.

conduct

a

Building. Officers are
Sexton, president and

treasurer; V. M. Sexton, secretary;
and Edward H. Bolten.

vice presi¬

dent.

busy officer of the com¬

interview. But after looking

some

business

Sexton Sees.

to appear before a PTA, or
before a television audience in a
news

N. Y. —
engaging in

Maple Street.

pany

face
never

to

to

with

face

achieve

them—we

understanding,

Form S. E. Sees.
HATTIESBURG, IMiss.—South¬
eastern Securities Corporation is
a
securities business
Magnolia State
Officers are Robert C.
Cook, Sr., president, and Richard
T. Dodder, secretary. Mr. Dodder
was
previously with Kroeze &

conducting

from offices in .the

Building.

McLarty.

at least not in the lifetime of any¬

persuasion,
water will wear away the hardest
stone. Someone must start to chal¬ visiting with our customers face
to face, is a must, if we want the
lenge the radical. People are com¬
pelled to think and act tomorrow public to understand.
with thoughts that are planted in
Thirdly, I am inclined to believe

Proxy Soliciting Organization
MAIN OFFICE:

I

immediate effort to literally shake

one

DUDLEY

rities

is

JEFFERSON

Secondly,

live.

let

HORNELL,
O'Donnell

obligation is. to continue to
right, and to keep our houses

live

recommend
that every utility resolve here and
However, the question of what
now
to place less reliance upon
we
should do about the extreme
programs
the other fellow has
advocates of public power is an¬
started, but rather to make some
other
matter.

and

Walter O'Donnell Opens

things. It may

doing friendly

by

Each

warmest friends

our

here

today.

Oral

With Cruttenden Firm
(Special to The Financial Chronicle)

OMAHA,

with many of you

ta

ous

Street,

that promiscu¬
name-calling does not gain too

Neb.

—

Delmar

W.

Girard is with Cruttenden, Podes&

Co., 204
t

South Seventeenth

Volume

185

Number

5646

.

.

.

The Commercial and Financial Chronicle

(2757)

33

Bond Club of New York

Calvin

M.

Blancke

Cross, Hallgarten & Co.; Milton C. Cross, First Boston Corporation; Edward H. Ladd,
First Boston Corporation

Noyes, Hemphill, Noyes & Co.; Robert J. Lewis,
Estabrook

Oliver

J.

York;

Col.

Lloyd

&

Co.

G.

H.

i<a!

Walker, Jr., G. H. Walker & Co.; William S. Renchard, ChemExchange Bank; Edwin H. Herzog, Lazard Freres & Co.

Troster, Singer & Co.; Delmont K. Pfeffer, First National City Bank of New
B. Hatcher, White, Weld & Co.; Barron Rockwell, Halsey, Stuart & Co. Inc.;
W. L. Canady, W. L. Canady & Co., Inc.

W. Fisher, Blyth & Co. Inc.; Allan
C. Eustis, Jr., Spencer Trask & Co.; Dudley F. King;
Caryl Sayre, Merrill Lynch, Pierce, Fenner & Beane; John C. Newsome, Tucker, Anthony & R. L. Day




Hayden, Stone & Co.; Sydney Duffy, Blyth & Co., Inc.; Robert Gardiner, Reynolds
& Co.; Avery Rockefeller, Dominick & Dominick

Corn

Troster,

Robert

Wickliffe Shreve,

Walker

W.

Clarence
Hutton

MacCorkle, Dominick <£
Dominick:
Lee
M.
Limbert,
& Co., Inc.; Austin Brown, Dean Witter & Co.

Latcur,

Bartow, Drexel & Co.; Joshua A. Davis, Blair <6 Co. Incorporated; James J. Lee, W. E.
Co.; Orin T. Leach, Estabrook & Co.; David B. McElroy, J. P. Morgan & Co. Incorporated

W.
&

C.
Blyth

Hemphill, Noyes & Co.; Nick Carter, John H. Lewis & Co.; Wallace
Lynch, Pierce, Fenner & Beane; Robert E. Clark, Calvin Bullock, Ltd.;
Maitland T. Ijams, W. C. Langley & Co.

Stevenson,

Merrill

Robert

Financial Chronicle

The Commercial and

34

33rd Annual Field

Walter

F.

Blaine,

Goldman,
W.

John

.

.

.

Thursday, June 13, 1957

(2758)

E.

C.

Sachs

&

Langley

Co.; Clifford Hemphill, Hemphill, Noyes &
Co.; Edward F. Coombs, Asiel & Co.

Co.; Paul F. Hay,

&

Arrowsmith, Van Alstyne, Noel <6 Co.; Augustus J. Martin,
United States
Trust Company of New York

F.

Hubert

Atwater,

Wood,

Day

Walker & Co.;

Arthur H. Kiendl, Guaranty Trust Company; Harold W. Davis,
Laird, Bissell

Walter V. Kennedy, Cof'in & Burr, Incorporated; Everett

Frank; Thomas V. Brcoks, Dillon Read & Co.

& Meeds

Arthur

E.

Allen,

Inc.; Edgar J. Loftus, W. E. Hu':to;i «L Co.

Jr.,

F. S. Smithers

&

Co.;

Edward

B.

de Selding,

Spencer Trash & Co.; Richard W. Baldwin, Reynolds & Co.

...

Carl

T.

George

Naumburg, Stern, Lauer & Co.; Conrad H. Liebenfrost, Stern, Lauer & Co.;
Templeton, Dudley F. King; Jansen Noyes, Jr., Hemphill, Noyes <fi Co.;
James W. Wolff, Zuckerman, Smith & Co.

E. Clark, Adams Express Co.; Egerton B.

John

H.

C.

Vinson, De Haven <6 Townsend, Crouier & Bcdine;

Frank Charles Rader, W. E. Hutton & Co.; William Morris, Salomon

F. Donald Arrowsmith, Van Alstyne, Noel & Co.


Bros. & Hutzler;

Philip W. Carow, Jr., Harriman Ripley & Co. Incorporated; Proctor Winter, Harriman Ripley & Co.,
Incorporated; Harding C. Woodall, Harriman Ripley & Co., Incorporated; Edward R. Greeff,
Adams & Peck

Dudley

N.
E,

Schoales, Morgan Stanley <£ Co.; John de F. Buckingham, Richard W. Clarke
Patterson, J. P. Morgan & Co. Incorporated; John Wasserman, Asiel & Co.;
John Raiss, Burnham and Company

C.

&

Co.;

Volume

185

Number

5646

.

.

.

The Commercial and Financial Chronicle

(2759)

35

Held June 7th, 1957

David

J.

Lewis, Paine, Webber, Jackson & Curtis; Clifford Hemphill,

Fred

L.

Heyes,

Laidlow &

Hemphill, Noyes & Co.

Brown Brothers Harriman & Co.; Frank L. Lucke,
Co.; Reginald Auchincloss, Jr., Courts & Co.

Hal

Murphy and

Edwin L. Beck, Commercial

&

Financial

Chronicle

3

,

A

i

'

m#-

'

f

Itpl

a

m

%

PIP Pill

M- f,
iSte# JBy;.. fiyZtfo
m
m

jl§lfe> till

itI' gip

SSaiiSSKV-

ir
,

mm

Arne

Fuglestad, Barns Brcs. & Denton, Inc.; Edwin F. Peet, Burns Bros. & Denton, Inc.; H. Keasbey
Bramhall, Bramhall, Falion & Co. Inc.; J. Raymond Smith, Weeden & Co.; Raymond D
Stitzer,
White, Weld & Co.

Alfred J.

Stalker, Kidder, Peabcdy & Co.; Brittin C. Eustis, Spencer Trask & Co.; Mathew Dean Hall,
Co.; Allen J. Nix, Riter & Co.; Ralph Hornblower, Jr., Hornblower & Weeks

Huber, Spencer Trask & Co.; John L. Gaerste, Cooley & Company; Charles M. Litzell,
White, Weld & Co.; A. Peter Knopp, Auchincloss, Parker & Redpath; John Kirk Hopper,

August

Alex.

Malcolm

Sedgwick,

L. A. Mathey &

Home

Brown

&

Insurance

Sons

Company; David H. Callaway, First
Marquette de Bary, F. S. Smithers & Co.

of

Michigan

Corporation;

'

«vf:
s/s.wzws.

'6 1

,

v.

.

V

m

A*#''

Eugene/G. McMahon, J. Barth
G.

H.t Walker

&

Co.;

George




&

R.

V

'

'

%

^Edward Cobden, Kean, Taylor & Co.; Frederick M. Grimshaw,
Waldmann, Mercantile Trust Company, New York; Gene Marx,

Co.;

7ear, Stearns <ft Co,

Harold

J.

York; H. Albert Ascher, Wm. E. Pollock &
Co.; Joseph S. Nye, Cosgrove, Whitehead <fi Gammack;
French, A. C. Allyn A Co.

Schluter, First National Bank of Chicago, New

Co., Inc.;

Darnall Wallace, Bache <£
John

S.

The Commercial and Financial Chronicle
36

.

.

.

Thursday, June 13, 1957

(2760)

At

Roland Merrill, Lee Higginson

Sleepy Hollow Country Club

Corporation; Brooke L. Wynkoop, Fahnestock & Co.; Edward H. Nelson,

Fred D.
Co.

Gregory & Son

Arthur

C.

Turner,

Kerr,

New

York

Central Republic
Salomon

Hanseatic Corporation; Kenneth
Company; Edward L. Holsten,
Bros.

&

A.

F.

A.

Trust Company of Western New York; Emil C. WFliams A. M. Kidder &
Harley A. Watson, Eldredge & Co., Inc.; Chas. J. Waldmann, Kean, Taylor & Co.

Stone, Jr., Marine
Inc.;

Willard, Reynolds & Co.; Bledsoe C. Pinkerton,
Co.; John D. Baker, Jr., Reynolds & Co.

Reynolds

Andrew

&

G.

Curry, A. E. Ames

Hawley,

Lionel
Lee

Hutzler

W.

D. Edie

&

Carroll

&

& Co., Incorporated; Arthur L.
Co., Inc.; Lee W. Carroll,
Co., Newark, N. J.

tt,

George P. Rutherford, Dominion Securities Corporation; Schuyler Van Vechten, Lee Higginson
Corporation; Mason Starring, A. C. Allyn & Co.; Rudolf Smutny

Ernest

K.

B-rkland,

Jr.,

Tucker,

Anthony

&

R.

L.

Corporation; James F. Colthup, Freeman & Company;




Day;

Ira

B.

MacCulley,

Equitable

Securities

Richard H. Marshall, Laurence M. Marks & Co.

Robert

W.

A.

Brauns,

Homer

Jan

Hunt,

Chemical

White,

Corn

McDonnell

O'Connell

Weld

Exchange

&

&
Co.

Co.;
Inc.;

Braman
Hudson

B. Adams, Adams & Peck; Homer
B. Lemkau, Morgan Stanley & Co.

J. O'Connell,

Co.; Emil J. Pattberg, Jr., First Boston Corporation; Isaac B. Grainger,
Bank; Frank J. Humphrey, Jr., Kidder, Peabody & Co.; Robert L. Harter

&

First Boston Corporation;

Elliot Bliss, Morgan Stanley & Co.

Volume 185

Number 5646

Continued

from

.

.

The Commercial and Financial Chronicle

.

3

page

(2761)

In any

event, let

me

state in

no

uncertain terms that the investors

convinced

are

Factors Affecting Availability
Of Capital for Electric Industry
of

retirement

have

the

on

Black

Sea

evaporated.

While

satisfaction

at

the

liquidation of the Soviet bond
market, we should take heed of

our

own

the

bond

position

when

market

we

see

deteriorate

in

countries like England and France.
It
is
more
than
happenstance

that, though the yields on your
newly issued A bonds today are
than

more

were

1%

higher

similar

on

than

they
issued

newly

bonds 12 months ago (from 3.70%
to 4.75% plus), the yields on elec¬

tric

common

by

mon

Dow

creased.

Jones

Let

granted

not

us

that

take

30-year

it

for

will

money

always be available at

some

rea¬

sonably reasonable rate, whatever
that

Witb

is.

least

at

one-half

utility capital funds being derived
from

issuance

the

debt

securities,

no

interested

more

ment

managements
In

rates

supply

is

to

demand

in

move

of

to

and

inflationary
in

result

the

rate

pressures

a

of

ar¬

the

rates,

reappear¬

depreciation

which

took

place

Administrations.

And

that would

not

only for the industry
but for the great majority of the
people.

annually

ap¬

amount

same

of

from

better

busi¬

from kilowatthours,

cigarettes, before any
demagogue shouts "give
away"
let
me
point
out
that
though Dow Jones utilities aver¬
political

have

ages

advanced

1939, the stockholder has gained
only 25% in purchasing power.
But
in

to

return

recent

cated

years

to growth, only
has the sophisti¬

investor

begun to realize
that the electric industry is one
of our outstanding growth indus¬
tries.

Earlier

been

of his fears had

one

dissipated

learned

when

he

from experience

industry

able

was

to

had

that the

protect

it¬

from

rising costs by modest
increases,
including
auto¬

matic operation of fuel clauses in
some

^areas, and by improved opcrating efficiency.
For

many

the

years,

chemical

industry has been regarded as our
outstanding growth industry. With
as

risen

base, its production

a

about

70%

faster

than

industry as a whole. Some ana¬
lysts estimate that the Federal
Reserve

Board

index

the

for

production of industrial chemicals
will rise at

annual rate of 7%

an

through 1960.
of

But to the surprise

the

many,

rate

average

of

growth for the electric utility in¬
dustry has been in excess of 8%

it

as

is

to

industry
tain

be

Wall

must

Street

that

fail

not

the

main¬

to

its

present good standing in
competitive money markets

the

if it is to continue to obtain funds

advantageously. A status
be

cannot

the

as

quo ante
passively
experience of the

maintained

credit

railroads
Three

demonstrates.

factors

weighs

in

the

least

the

investor

considering

in

invest¬

an

opinion, if the growth
utility business is to be
enough to attract more

my

the

effective

stock investors, it must
accompanied
by
increased
earnings per share of common.
Since expansion involves risk, the

stockholder feels that he

entitled

to

Fortunately,
shows
even

with

The growth and development
of

have

been

the

business,
Regulatory attitude.
And management incentives.

earnings

should

m

I

like

their

and

discuss

to

impact

them

ability

on

to

selling,

and

to

Development

of

-

unsubsidized

would

capita. The

of

sumer

the

manufacturers

effectively produced and
vigorous promotion of new

by

so

of

electric energj.

lyst knows that
ficiencies

as

and

a

The

result of ef¬

the

of

ana¬

economic

service

the

average

kwhr

2.60

price
has

in

price

money.

the

paid

fact

He

that

each

for

by domestic consumers has

decreased
to

for his

of

from

cents
a

4.67

in

from

as

for

steam

record
cost

spite

lack

to

more

the

the

of

of

con¬

inflation.

political

has

not

been

the

case.

chicanery and out¬
misrepresentation involved
in the Memphis steam plant case,
the preference clause struggle at

Niagara

and

clearly

case

public

power

intention

of

the Hells Canyon
indicate
that
the
have

partisans

abandoning

no

their

campaign.
It

has

c2 us,

be

full

disclosures

of

their

shocking to many
during recent days, to read
opinions
emanating
Washington

accelerated

regarding

amortization

granted

Company

that

would

for

Now

ticated investors in their appraisal

been for

which each company operates. For

companies

capital
is




seem,

to

rates

of

areas

them
which

to

their

secure

will

result

to

the

the

certifi¬

Idaho

Power

Brownlee

and

plants.

The

national

the hope of political gain

in

some

entrenched

self-interest.

To

the

them

common

book

value.

and

of

even

few

a

hurri¬

For example, punitive,
doctrinaire, and/or political 'regulation led nearly to financial dis¬
canes.

in

aster

sults

part of Florida. The

were

choice

alarming

so

had

to

be

remedial action

urgently

made

or

needed

are

growth

not enough. To

added

be

Without

competent
such

man¬

agement, the industry cannot
tinue

to

resist

make

as

lobby,

of

the

and
of

as

the

take

try is doing enough in competition
with

other industries to
obtain,
develop and retain the services of

of
promising and/or
out¬
standing ability.
Let us study the questions: Are
salaries adequate and does the in¬
dustry offer enough incentives to

and

atomic

full

ad¬

tech¬

that

the

age

are

industry has been fortunate

in the number of

in

management

gone days some

posed

the

high caliber
positions. In

men

by¬

of those who op¬

Public

Company

Act

Utility Holding
argued that much

superior management was sup¬
plied to the operating companies
from the central headquarters of
„

holding

there

would

company
be

a

and

serious

that

not

prove

hold

top

managerial

Executive Salaries Below Average
,

Statistics indicate that the elec¬

tric

industry

with

has not kept pacej
industries in the pay¬

other

ment

of

executive

haps this is

so

salaries.

because

too

Per¬
many

a

industry should not
salaries comparable to those
paid in non-regulated competitive
industry because of possible dis¬
favor

case,

by the public and the

com¬

mission.

This reasoning does not
impress the sophisticated investor.
I strongly recommend consider¬
.

ation

of

the

National

Industrial

Conference Board Studies in
Labor

Statistics, No. 17, "Compen¬

sation of Top Executives." Accord¬

breakup, this did

to be the

regulated

pay

break¬

down in the management chain if
this link were destroyed. After the
company

and

Boards of Directors have felt that

making practical.
The

attract

personnel?

power

tremendous

improvements

electronic

it has the

subsidized

cannot

con¬

cannot

progress,

successfully

attacks

prevailed, there have been
of cloudy skies, of low pres¬ holding

sure,

investor, sound

must

management.

the

climate has gener¬

good

a

sufficient

prices for their

above

While

ally

for

return

in market

stocks

attract

advantageous terms, it

on

essential

for the

heads of

the operating companies
challenge of independence
successfully.

met the

ing to it, the
of

pensation
officer

in

a

average annual com¬

$67,000
large

for

the

group of

utility companies supply¬
ing either electricity or electricity
Continued

on

page

re¬

that

a

between

curtailment

expansion.

of

For¬

its utilities have acquired
huge sums they have needed

quence,

the
at

relatively advantageous rates.
The analysts of

of

whom

there

themselves

utility securities,
many,
keep

are

well

informed

as

to

the

regulatory climate by study¬
ing the significant rate cases. If
they are made uneasy by the im¬
plications of a particular decision,
they may well decide not to
further

recommend

until

the

There is

investments

attitude

is

modified.

escaping the fact that
analysts direct the flow of

the

much
Let

no

utility capital.
me

certain

strongly urge that utility

that

such

no

conditions

exist in its

ever

industry. It is im¬
not only that your

portant now,

are not
eroded, but
they are adequate in re¬
lation to present-day money cost.
Money costs today for bonds and
preferred stocks are far higher
than they were a few years ago,

that

and rates appear to be headed up¬

ward at least
boom

ness

tinue. A 5%
now

no

6%

on

long

as

and

rate

on

an

cases,

positions

to
of

This is Basic Source Land

the busi¬

as

the inflation

con¬

for the Great Chemical

available, is not considered

new—fresh—virtually untouched

exces¬
The

sive.

catalog of

Chest"

An

important

maintenance of
turn

is

a

essential
a

for

the

fair rate of

re¬

continuous education

of

the public, of the regulatory com¬

missioners,
informed

of

and
as

to

commission

the

fully

facts

and

trends. At this point permit me to
pay

tribute

to

the

Irving

Gulf

before

States

he

Utilities

joined

the
later, under the direc¬
Childs, now VicePresident of the bank, the forum

bank, and

tion

has

of

John

made

a

real

raw

materials occurring in "Treasure
enormous quantities—lists prac¬

land—mostly in

element in the atomic scale. Here in the vast
Utah, Idaho, Colorado and Wyoming area served by

tically

every

Utah

Power

&

Light Company,

many

already begun to dig into new,
fresh, almost unlimited sources of wealth. But they have
barely scratched the surface. The potentialities merit the
careful
for

study of

any

contribution

to

the welfare of electric consumers,

AREA RESOURCES
BOOK

well-known

American firms have

industry seeking larger opportunity

Explains why the
area
so

to

we

serve

offers

much

opportunity
industry.

today and the future.

Trust

Company for its achievement in
originating and carrying on the
Irving Trust Forum. Under the
leadership, first, of Tom Walker,
of

Age...

A bond is

longer disrespectable, and
preferred stocks, if it is

Write for Free
Box

UTAH POWER & LIGHT CO.
A

top

representative

tunately, justice and the public
interest prevailed; the State Rail¬
road Commission was given juris¬
diction over the electric utilities,
and in early rate cases, it adopted
reasonable and constructive poli¬
cies. Florida regulation today if
constructively fair. As a conse¬

a

it/ may

time and still is the

some

regulatory climate of the State in

•

and regulation

of

utility securities and, more par¬
ticularly, the common stocks, has

in¬

regulation

to the future. They question
whether the electric utility indus¬
as

men

nological

regulation, the factor
weighed most heavily by sophis¬

discuss

of

Management Incentives

vantage

Regulation

to

as

scale in

perhaps,

us

interesting

very

State

12.5

and

of

statements

reading, particularly as regards
the fees, the interests,
and the
prerequisites of the promoters.

President

hydro

maintain

Many

such

make

Company

Oxbow

as investorprior to the sale

securities.

believe

over¬

a

just

owned utilities do

to

problems

and finance.

requirement that subsidized
bodies will have to make

a

staff members to keep them

been

biased

cates

formally

power

is to keep

cents

education.

and

Speaking of education, let us
hope that in the future there will

all objective evidently

1936

package to 24 cents. The compari¬
of cigarettes and kwhrs is not
nonsensical

personnel in order

the issue stirred up on

in

son

as

in¬

formation

while the
of cigarettes

cents

1956,

package

increased

that

zealots

right

from

more

in

The

is

satisfaction

less

at

such

the

getting

great

But

facts of the industry, the consumer
takes

of

out

run

hoped

power

public interest because of the

has been carried through to
earnings available for dividends.

which

subsi¬

—

Power

had

subsidized

industry's

They know that the healthy
growth trend has been stimulated
by
aggressive
promotional
and
sales efforts of an ever-increasing
number of time-and-labor-saving

bankers,
utility
commis¬
sioners, and commission staff

ment

rates of return

investor

investors have been impressed by
the fact that some of the increased
gross

taxpayers

Subsidized

increased amounts per

for

the
ag¬

Though investors generally be¬
utility manage¬
is good, some of the more
farsighted ones are not so certain
lieve that electric

ment

management be vigilant in making

power.

The

electric

the

the

uses

substantially

and

by a continuous and
gressive program of public

also

growing
population but also to sell greatly

have

slock

of

outstanding stocks.

a

devices

by

of the book value of the

excess

dized

produce

required

energy

share

common

they have in most cases,

as

Over the past decades, investors
have been attracted by the ability

only

per

briefly a subject
which should be unpopular to the
Business

not

able

issues

new

fixed rate of return,
to increase their

a

Now to discuss

raise capital.
Growth

some

the postwar record
regulated
utilities,

that

in the electric industry are:

ment

participate to

degree in the benefits of growth.

guard

battle

enemy

be

common

its

industry

and workers, by bring¬
ing together, at regular meetings,
utility executives, institutional in¬
vestors, commercial and invest¬

to

common

is

not

of those

importance

In

of

the

the

carry

since

190%

annually and, for some of the
more
rapidly
growing
electric
just as obvious to companies, the rate is double this
the State Regulatory Commissions
amount.
should

It

lower

not

should

not

has

an

spends

mean

1947-1949

recreate

interest

dollar

bad

I

funds

But

during the Roosevelt and Truman
be

ness,

if

for

out.

made

low

well

the

stock¬

to economic factors, the

increased

of

allowed

and

attempt

ance

their

the average Ameri¬

stockholders

opinion, if inter¬

balance

tificially
may

utility

on

pay

As to the benefits to the

money.

rate

contain¬

$1,500,000,000, and

family

should be

than

of

proximately the

self

the

and

my

are

response

should

in

taxes

of them

can

long-term

one

inflation

of

holders.
est

of

them

of

than

each

stocks,

as measured
Utility Com¬
Stock Average have not in¬

the

each

more

take

we

for

must

that

investors

37

Growing Company in the Growing West

Salt Lake

Utah.

Copy

899, Dept. 2,

City 10,

38

38

The Commercial and Financial Chronicle

(2762)

Continued

from

are

37

page

Factors Affecting

Availability
Of Capital for Electric Industry
$20,000 lower than the

for the 28 groups analyzed
and is fourth from the bottom. As

average

one

line,

descends the managerial

the

relationship

becomes slightly
average salary of

the

for

worse

the number two and number

of the
in the industry

top men

average

the

is

the

but three of

for all

lowest

the

Perhaps

studied.

groups

acted

Boards of Directors have

on

that, because of
increasing taxes, higher salaries
become increasingly less effective.
the

assumption

salaries of the junior
geared to the salaries
of the senior officers, the effect of
non-average
salaries at the top
undoubtedly
influences
all
since

But,

officers

are

salaries.

in this paper.

stock

about

how

option

senior and junior of¬
policy of the industry
toward them appears to be almost
negative in spite of the fact that
an
increasing number of indus¬
trial companies are adopting such
plans. In the investors' opinion,

ficers? The

the

stockholders
are

and

Directors

of

Board

and

these

of

acting in their
The

self-interest.

the

companies

long-run

own

results

of

an

analysis by the New York Stock
Exchange
of
the
stock option
plans of listed companies are re¬

vealing. The box score may be of
interest.
Industrial Cos.

Electric Cos.

Adopting Plans

Adopting Plans
1947-1951

0

Recruitment

sub¬

1

record

1954-1955____

3

136

1956 lllrst

0

tli

4

404

of

the electronic,

missile and other
companies probably are offering
starting salaries to able young en¬
gineers considerably in excess of
those your industry is offering. If
the

continues,

this

the

"What Electrical
Engineering Seniors Think About
tion, the
Jobs"

study,

tives

Stanford

of

representa¬

by

prepared

Insti¬

Research

Michigan State University
and the University of Pennsylva¬
nia. A questionnaire was answered
in March, 1956, by 3,433 senior and
graduate students in electrical en¬
gineering of 129 colleges. The stu¬
tute,

dents

asked

were

their opin¬

for

pany,

Power

advisable

are

for

others.

The

Board of Directors and the stock¬

holders of the Cleveland Electric

Illuminating Company must have
thought so, for recently they put
into effect such a plan. 96.5% of
the

stockholders

the

of

Company

Voting (80% voted) at a recent
meeting approved a plan wnich
provides for the granting of 10year options to managerial per¬
sonnel on 200,000 shares of stock.
The Company, I am told, readily
obtained the approval of the plan
from the Ohio State Utility Com¬
mission.
its letter to its

In

the

stockholders,

Company wrote:

"The

future

company

ability

to

of

progress

the

is directly related to its
secure
and retain the

and

ness

occupations and the

equaled 50% of all the
graduates of electrical engineering
mately
in

1956.

conclusion of

their general be¬

was

electric

the

utility
that

below

far

companies

in

electrical

and

the

elec¬

illuminating point de¬

veloped in the survey was the fact
monthly starting

that the average

salary in the electric utility field
twelfth in the list and next

was

the Government service which

to

at the bottom.

was

We know, as a

an

effort to

secure

and

re¬

tain such employees, industry has

widely

adopted the practice of
granting stock options as a supple¬
ment to compensation.
To enable
the company to meet this type of

competition, and to keep its

over¬

all compensation plan comparable
to

good

industry

practice,

be

in

the

best
to

interest

dents

realize

to

presents

case

in

his

own

self-interest.

It

should not be difficult to convince
the regulatory

a

that

such

challenging

is

the

oppor¬

tunity to convince them.
In

commissions of most

business,

our

as

in

many

know

how

ably

to

use

a

slide rule

a company

by its of¬

ficers, and other personnel would
result from V stock
option plans.




stock,

and

These

figures

prices.

It

to

answer

the

I

as

authorities, to attempt to
educate the Washington inquisi¬
tors, to defend itself against the
demagogic attacks of the public
power mongers, not to mention the
interrogations of our own profitseeking security analysts. And all
the facts, figures, and opinions are
available to all and sundry.

latory

Recent Bidding Losses

us

to

from
the

fact

have

stock

in

to

new

and

market

enough.
is not in

The
our

has

not

been

electric

fast

industry

debt for these losses.

fact, utilities should adversely
us for them, for they (our

bad luck.

prices might bring

NY Cotton

re¬

was

Exchange.

Re-elected

Anderson, Clayton & Flem¬
Williams of Royce

John M.

Co.

&

re-elected

was

Treasurer.

Those elected to the Board of Man¬
agers

Harry B. Anderson of

are:

Merrill

Lynch, Pierce, Fenner &

Beane;

Edward
Co.

&

Volkart

Alfred

Brothers

of

Angelery

C.

Boedtker

Company;

of

W.

Oscar Cate of Central Cotton Co.;

Tinney C. Figgatt, New York City;
Clayton B. Jones, Jr., New York
City; Frank J. Knell, New York
City; John D. Miller, Jr. of Robert
Moore & Co.; Hugh E. Paine of
Abbott, Proctor & Paine: Fred K.

Perutz, New York City; Joseph M.
Sauer, New York City; Gustave I.
Tolson

Bro.;

of

Geo.

Robert

H.

McFa.dtn

Vincent

K.

of

T

&
e

Kendall

Company; Alden H. Vose
Kohlmeyer & Co.; and Albert

of

With

of

Irving Weis & Co.

the

has
kw

kw

lion

increased

all

of

of

the

exception
others

the

retiring

of

Messrs.

members

were

Board

who

were

re-elected.
The

new

1916

in

in

1956,

8.2

from

mil¬

120.4

to

of

increase

an

1,371%.

officials

of

the

Ex¬

change take office Thursday, June
6, for a one-year term of office.

McCabe Forms Own Co.

capacity
keeps well aheiad of the demands
for
power.
Power companies
make
their
plans
in
advance.
They anticipate the requirements
of the people of the areas they
serve.
Even during the crucial
generating

period of World War II, the pow¬
industry was able to meet all

er

demands made

the

it for both war

on

Electricity is

needs.

commodities that

few

rationed

during the

war.

would

the

be

most

part

who

those

from

came

to

shortages.
these predic¬

power

government
plants built at the expense
taxpayers.
The predicted
shortages have failed to material¬
ize except in certain areas where
government-planned power is
predominant.
more

see

power
of the

America's

Power

Capacity

Com¬

pared to the Rest of the World

next

more

the

countries of the world

combined.

have

We

four

about

much power

capacity as
ranking country, Soviet

as

next

Russia.

electric

American

The

light and

power

installed

have

has

capacity than

power

seven

times
the

States

United

companies alone
new
capacity in

the past five years equal to all
the present installed capacity

America's

Russia.

power

of
in

com¬

panies will build in the next five
years

more

the

lhan

capacity

power

new

total

in

installed

now

Sometimes

between

race

of

kilo¬

a

America

and

We have already

ether countries.
won

hear

we

the kilowatt

race

and

ex¬

we

pect to keep on winning it by in¬

stalling new power capacity to
keep America ahead.
In Russia,
the

where

plans,

government

and

operates all the power
facilities, there is a total installed
capacity of 32 million kw for 200
million people, as compared with
owns

million

170

people.

Under

serve

McCabe has formed W. E. McCabe

these

&

hardly be any comparison of the
state of development of electric

—

William

offices in the
First National Bank Building, to
engage
in a securities business.
Officers are Mr. McCabe, presi¬
dent; V. V. McCabe, vice presi¬
dent; and Gladys Burge, secretary.
Mr. McCabe was formerly man¬
ager of the corporation and trad¬
ing departments for E. A. Hanifen
&
Company,, with which
Miss
Burge was also associated.
Co.,

Inc.

with

power

Donald
a

Brady Conlin, formerly

general partner of B. J. Conlin

can

The
myth.

in the two countries.

so-called

The

is in reality a

race

reason

America's
as

there

circumstances

faith

for
in

this
our

is

that

industry,

expressed by the action of free

in
to

1947

the

in¬
utility plant of
the
investor-owned
companies.
Investment presently is $33 bil¬
lion. Ten years from now it is ex¬
pected to be between $65 and $70
had

vested

in

about

$14

billion

electric

firm with 35 offices coast to coast

been

Cotton

New

York

forced

a

because he

owner

taxpayer.

a

project.

er

Sales

During the past

year

con¬

we

to

tinued

push our sales to new
Our past record of resi¬

peaks.

dential sales has been one of con¬

of

forecast

Our

increase.

loads in 1965 indicates an average

kwhr per resi¬

of nearly 6,000

use

all-elec-

The

customer.

dential

tric home is becoming increasing¬

ly popular as more and more uses
of electricity are being developed.
As an example of the new uses
which
are
being developed for

electricity, in the residential field
alone there are 15 appliances in
today

use

the

in

were

which 10 years ago
experimental stages.
manufacturers

electrical

The

developing

To name just

appliances per year.
a

that have

few

lar

into

come

last

the

during

use

are

of IV2 new

average

an

popu¬

decade,

TV, both black-and-white
the new high-speed
dryer,
two - zone
refrigerator,
electronic range, room air condi¬
tioner, heat pump, built-in oven
and
counter-top range, and the
there is

and

color,

quick recovery water heater.
of all electric appliance

appliances that

sales today are for
not

were

estimates

manufacturer

One

that 60%

the market 10 years

on

In forecasting our loads, we

have

to

the "phantom"

allow for

appliances which will inevitably
be developed in the coming years;

that

indicate

nothing to

is

there

will not continue to develop an

we

of IV2 new appliances per
year—appliances that no one has
thought of yet.
average

its

through

Electricity,

use

in

industry, plays an important part

bringing about the widespread
of machines responsible foi

in

use

the

high

that
Last
work in

living

of

standard

enjoy here in America.

we

98Vz% of all of

America
and

only 1%%

mals.

machinery

ani¬

by men and

working

working

alent of 279

our

by

of this machinery,

Because

every

has

done

was

man

for

him

in America
the equiv¬

helpers.

sales

activ¬
and
more to cooperative selling
tech¬
niques. For example, we have the
highly successful HOUSEPOWER
program which aims to eliminate
the bottleneck of inadequate wir¬
In

our

ities

ing

the

is

Better

"Live

program,

a

selling effort to manu¬

distributors,

utilities,

facturers,
dealers

premises.

enthusiastic

Electrically"

combined

more

customer's

the

on

There

promotion

turning

are

we

—

all

those interested

in

making the benefits of electricity
more

nual

generally available. The an¬
National
Electrical
Week,

and

the

provjed

carry on

in

of

the

power

effective

another

its promotional activities

the lighting
The

Anyone
record

operation

be

to

nationwide promotion. The Better

of

field.

Price

looking
the

Record

the price
light and

over

electric

companies must describe
It speaks well for our
system, under which the business
is
done
by businessmen,
while
power

it

as

men

good.

in

government
It

is

act

the result

as

of

business

lators.

member of the New York

our

Exchange since 1954.

individual

regu¬

bination of many factors.

Exchange.
a

the

Mr. Conlofr has

is

He is not free to sell
his interest in a government pow¬
is

Light Better Sight Bureau started
23
years
a®o
and continues to

In

In this factf of course, lies the
principal difference between the
operation of the power business
under the free enterprise system

of

not he wants to be an owner.

or

He

American

needed.

billion.

members

of

organized only two years ago, has

our

&

Co., has been appointed a regis¬
tered representative with Harris,
Upham
&
Co.,
120
Broadway,
nationwide investment brokerage

a per¬

share

a

putting their savings
business, has permitted us
build facilities when they were

investors in

people

Harris, Upham Names
Conlin Registered Rep.

er

year,

Russia.

E.

Colo.

or

ago.

The

electric

America's 120 million kw total to

(Special to The Financial Chronicle)

DENVER,

bond

a

price. When the government owns
and operates a business, the indi¬
vidual is not free to decide wheth¬

stant

America's

watt

Angelery, Cate, Perutz and Weis

inherent

competitive bidding for bonds

million

tions

Vice-President is William K. Love,

Stock

sory

capacity

wanted

Rogers

owns

stock, he is free to sell or not to
sell it at any time at the market

the same period,
the electric industry's generating

there

elected President of the New York

ing.

170

to

around

of

increase

an

If

to invest in the business.
son

During

67%.

For

Cotton

million

102

about

from

million,

during this past quartercentury we have heard predic¬
tions
from
some
quarters that

Exchange

J.

more

Often

Elects Officers
Malcolm

much

population has increased

our

not

and

of

1916

civilian

stock

has

capacity

power

increasing

been

of

us

power

rapidly than its population. Peo¬
ple are using more and more elec¬
tricity, with a resultant increase
in their standard of living.
Since

was

prices for forthcoming issues.
weaknesses

America's

one

and

of

amounts

enormous

capacity
to
serve
the growing
needs of the American people.

and

losses) will not help obtain higher

The
compul¬

add

preferred

bond

of

all of

losses in bidding during
two or three weeks for

utility bond issues. Our stepretreat in the declining

And of Power for America

prices. To discuss the rising

tough for

by-step
bond

here,
office, the

the

common

take; the red ink resulting
our

last

new

is

readily

to have to discuss

me

downtrend

in¬

numerable questions of the regu¬

One

are

stock

available to all. It would be pain¬
ful to

There is prob¬
in the world
prepare so many sta¬

has

bond, pre¬

common

to

criticize

stock of

statistics about

ferred

industry

no

the

mon

In this discussion I have not in¬

cluded

get sound answers.

In

consumer.

they could avoid deciding was to
put it in competitive bidding."

oth¬

the question most frequently
asked is, "What's new?"
Now to
tell you anything new is difficult
—and by that I do not mean to
imply we are like an ambitious
bureaucrat who, though he adds
000's to every equation, does not

States that they are of benefit to

Increased ownership of the com¬

and

M. Weis

ers,

the
pro¬

posed Employee Stock Option Plan
for key employees."
The investor, I am certain, is
convinced that stock option plans
are

the

that

your

of

the

approve

fiutility

our

industry offers a great future for
well qualified college graduates.
The apparent failure of the stu¬

board of directors believes it would

shareholders

result of

business

rancial

tistics.

"In

equipment

them¬

of

that
they could get rid of that in¬
carrying on of hearings
attempt to decide things that

Felder

Another

ing ability.

must compete with all other
industry.

upon

people

public
bodies
in¬
the only way they

volved,

Jr. of

which has to

pany

urged

these

cessant

po¬

they finally accepted. The
number of respondents approxi¬

of

nuisance

a

various

felt

sitions

services of employees of outstand¬

To do this, the com¬

have

some

ions about different kinds of busi¬

Company,
Service

that

the

consequences

industry

tronic

Public

defendants

raising these ructions with

was

Montana Power Com¬
and American & Foreign
Company,
perhaps they

the

selves

number of jun¬
ior engineers to be the managers
of tomorrow. At the present time

lief that the financial opportunity

Company,

might be some¬
thing in what various lawyers for

obtain each year a

fields.

"Southwestern

seem

there

though

such

404

Light

to which

have

made

industrial companies and for Kan¬
&

17 investment firms,

of

trial

me;

in

Power

the

Anti-Trust

the

of

course

quoting Judge
during the

dicta

bidding:

increasingly

be

obiter

re¬

engineers

new

time will

in

who

the

resist

cannot

important to the industry? A tech¬
nical industry that obviously must

the students

If such plans are sound for

I

Medina's

"But the fact is that it does

of

Future of Power Business

given to this controversial
subject by the record and not by
the pundits of the SEC and/or the
fpc.
;

as

cruitment

to

already alluded, on the
origin of compulsory competitive

Managerial

of

the

is

The most striking

12 j

sas

from first page

will be

I

Personnel

what

NOw

77

1951-1953

half)

have

stantial stock interest.

will be grave. I
recommend, for serious considera¬

for

plans

directors

officers

cult

Thursday, June 13, 1957

.

As and if bond

becomes increasingly diffi¬
obtain, definite judgment

money

investor,

companies in which the

to

Option Plans

Stock
Now

the

please

tected in

three

try in relation to the salary

would

This

for he believes that he is best pro¬

electric utility indus¬

in the

men

Continued

the subject is too
cuss

and gas is

becoming apparent, but
involved to dis¬

now

.

.

by government.
Under
free enterprise system, every
is free to invest

or

not

Interconnection and

a

com¬

pooling, for

Volume

185

Number 5646

example, have enabled

advantage

of

the

.

.

The Commercial and Financial Chronicle

.

to take

us

efficiencies

gained through operating on a
larger scale. These moves toward
increased efficiency have resulted
in an increase in the maximum
size

of

generating

units

in

We do not stop to think
Americans, with only 6% of
the world's population, use 41%
of the world's electric power. The

countries.

opment,

that

panies

for this is the

reason

world's

the transmission
voltages have been rising stead¬
ily, as well.
The trend toward
larger generators has sparked the

world's

the

need

years;

for

and

increased

at

pressures

plants operate.

temperatures
which
steam

All these develop¬

As

30 years

or

result of constant gains in

a

operating efficiencies, a careful
watching of all expenses, and the
constantly increasing use of elec¬
tricity on the part of the public,
the

average revenue from resi¬
dential
customers
per
kilowatt-

hour of electricity is

what

it

1916.

the

about

what it

only 34% of
By way of
cost of living is

in

was

comparison,
now

and

two

times

half

a

in 1916.

was

This record speaks well for the
free

enterprise

system,
under
compete
with
each other for incentives provided

which

free

men

the consuming public at the
market place.
It speaks well for
the system of government regu¬
lation
of
the
utility
business.
by

State

and

Federal

regulatory

helped to insure that

have

bodies

the

both

the

pany

of

and the investors in it have

tomers

cu

has been

misused

cause

may

the

a

It is

an

on

said

Government

Federal

that

way

confusion

some

com-

monopoly''

in

point.

important

that

should

be in the power business, at

least

extent, in order to pre¬
vent the private power companies
from having a "monopoly" in the
some

The

this

to

answer

argument

the fundamental

found in

be

ect.

of

the

panies have

they

nu¬

economically or
economically than with fos¬
as

sil fuels.

should

We

are

also

mind

in

keep

well

to

known

executives.

In

basic that to

company

they

fact,

are

it may seem

us

talk

to

necessary

power

so

un¬

them.

about

to

low-cost

be able to finance the

population,

same

working

1 /16th of the earth's

about

half

of

on

surface, pro¬
the world's

f

research

and

study groups

individually under
Energy Commission

or

the

Atomic

access

permit

cerned.

14

reactor

insofar

capacity

power

is

as

con¬

What we want and what
in this country is an

have

we

supply
of
relatively
electricity.
We
have
electric capacity than the

more

next

nations

seven

combined.

program.
Of the

situation

overall

A

world

the

of

announced

program

the

nounced thus

projects an¬
either

by several European nations, call¬
ing for 15 million kw of nuclear

ing goods and services is conduct¬

under construction or in the im¬
mediate pre-construction s t a g e,

while the other

capacity by 1967, represents a
significant addition to their gener¬
ating capacity, but it should be
brought into perspective by point-,
ing out that the U. S. will add

The

is that in America

reason

government does not operate
business. The business of produc¬

by the citizens. The govern¬
ment acts only as a referee and
peace
officer to
maintain
fair
play.
Despite
there

nation's

our

achievement

great

this

under

system,

those who say that we

are

ought to change to another sys¬
tem. Strangely enough, these peo¬
ple have found support among
Our

many.

studies indicate

that

the reason for approval of the
preference clause and for tolera¬

outside

friends

our

these

facts

the

unknown. Learning them will add

greatly to their understanding of
the reasons why it is customary
for only one company to supply
power to any

particular

area.

companies are care¬
fully regulated—by the state com¬
missions for intrastafe operation,
by the Federal Power Com¬

and

mission

sales

interstate

for

electricity

wholesale.

at

have three

commissions

of

These

main

re¬

(!) To insure adequate electric
service.

(2) To prevent unjust discrimi¬
nation among users, and

establish

To

(3)

the

fair

a

price

of both
customer and the investor.
from

standpoint

'

regulatory

our

system met these responsibilities?
As to the first, this system of gov¬

regulation

ernment

worked

has

well because all demands for/elec¬

few complaints
concerning discrimination. As to
the price, the record speaks for
are

itself.
These

facts

elemen¬

seem

may

tary to us, but they are unknown
most

people.

must be
of the

They

learned before the position

companies

power

Once

stood.
about

our

can

can

business

system

in

the

against

and

measures.

solution

of

enter¬

free

our

these
key to
problem lies
The

telling the facts.
is

strong evidence for
the belief that public respect and
recognition of the industry's at¬
tainments
in
supplying electric
service is presently at its highest;
thus, the public is probably more
receptive to learning the facts
now
than at any other time in
the
past.
It also appears that

of

us

realize

of

to

train

fuels.

scientific

technical

and

personnel, and to determine which
of many possible reactor types are
most promising from the stand¬

point of producing economic

1 foresee

we

for

the

have

learned how

in

way

a

public.

will

expansions

future.

to

We

do business

that is pleasing to the
appreciate their con¬

We

fidence and we will do everything
in our power to maintain this con¬

fidence in the future.
that

We believe

through

continued research
and economic planning, we will
be able to keep the price of our
service low.

We believe that

our

system of government regulation
will

continue to

forward

the

do

the

We
into

confidence

with

ef¬

same

it is doing today.

future.

ture holds far

more

than the past.

Form

the future needs of their custodi¬

will furnish the capacity

and

ers

their

sales

DENVER,
Investment

Colo.

—

Hathaway

Corporation has been

formed with offices at 900
Pearl Street to engage
rities business. Officers
M.

in

South

a

are

secu¬

Claude

Hathav/ay, president; Charles
Wendt, vice president; and
J.
Knuckles, secretary-

L.

will

companies

power

continue

America's

Hathaway Inv. Corp.

(Special to The Financial Chronicle)

Thomas

and

treasurer.

efforts

will continue to promote the idea
of

living

believe
of

electrically.

better

that

the

increase

We
the

in

Form Albanese, Kesselman

electricity

in the future
will be even greater than in the
past.
This increase in use will

Inc. has been formed with offices

bring

to engage in a

use

more

leisure and

comforts

Albanese,
at 79 Wall

Kesselman

Co.,

&

Street, New York City,
securities business.

nu¬

clear power.
We

believe

the

of

minds,
the

problem

actions of
they know the
and

responses

when

people

in the

rests

ward

that

comprehen¬

a

country with all

our

consistent

with

ex¬

sound

scientific and technical considera¬
tions and in
with

prise system.

compatible

manner

a

traditional

our

the

facts.

in

pedition

free

enter¬

In this development
of

resources

industry should

be utilized to the maximum extent

Extension

of Service

Rural

and

Electric Cooperatives
The

past

service

has

extended

to

virtually every home in America.
About
99%
of
the
people
in
America

have

available

to

the

50.7%

nation's

service

electric

them.

farm

served

are

930

the

Of

by

Electric

Rural

Cooperatives, 43.4% by the power
companies, and 5.9% by various
municipal
plants
and
districts.
About 46%

by

the

of the electricity sold

cooperatives

electric

purchased

from

the

There

is

need

is

com¬

power

for

further

en¬

largement of the benefits that the
farmer
In

receives

from

electricity.

this effort, there is room for a

good deal of cooperation between
the companies and the co-ops.

sales

is

field

work

one

and

together.

in

which

companies

There is

The
both
can

bright
of elec¬

a

future in increased usage

thereby

enabling gov¬
expenditures to be held

ernment

quarter-century

electric

seen

possible,
to

minimum.

a

cal

of

The time,

and

manpower

devoted

to

the

techni¬

funds

present

electric power

being

programs

companies, and

the progress being made, are sub¬
stantial evidence of our industry's

competitively

economic

specialized

Foreign Countries
have

Some

the fact

over

have

expressed

concern

that certain nations

scheduled

construction

that because of this, our nation is
"behind" in nucelar development.

shortage

of

fossil

with

fuels,

attendant economic disadvantages,
makes nuclear power capacity al¬
most

immediate

an

necessity in
Large amounts of

these countries.

nuclear capacity are planned be¬
cause these countries expect that
it will be economic. The same nu¬
clear

plant that would be
petitive in these countries,

furnish electric service to them.

ever,

the farm, both for the
suppliers who

on

would

competitive
Atomic

No

discussion

Energy

because of

of the

industry's
future would be complete without
mention of the new and growing
field of atorruc energy. It was not
until the latter part of 1954 that
industry was permitted for the
iirst time to develop and construct
its own nuclear power plants. To¬
day, exploring and improving the

of

the

everyday

activities

of

necessarily

not

in
our

com¬

how¬

the

United

be

States

abundant supplies

of relatively low-cost conventional
fuels and the advanced state of
our

conventional

It

ogy.

that,

is

once

comes

as

power

reasonable

nuclear

to

fuels

shall
of

this

benefit of the public. At the pres¬

the

tremen¬

ent

political

one-half

time,

mitfed

to

a

little over two
since
first

years

undertake

this

and
per^

devel¬

in

this

as

country,

tremendous

with
we

quantities

capacity.
country we are under¬
comprehensive program

of nuclear

development, exploring
great number of ways to gener¬
ate heat with nuclear fuels, and

improving
most

The modern

approach to solving

special business problems is to call in

specialized help. That
divert your own

way you

don't

key personnel from

Ebasco gets to work
the

promptly, gets

job done right and economically

while

normal flow of routine

your

operations continues.

regular duties. You don't overburden
your

regular staff. And you

maximum of

Ebasco

business

save a

payroll dollars. Backed

your

specialists

by long experience in solving similar

need them, for

problems for other organizations,

small in any

at

are

call anywhere and anytime

you

assignments large

or

line of business.

a

a

a

directions?

expect

nuclear
In

our

add

of these

technology

tricity with nuclear fuels
fossil

technol¬

in any

is
point where it be¬
cheap to produce elec¬

advanced to

taking

our

help

of

larger quantities of nuclear capac¬
ity than has the United States, and

A

■■

nuclear

power.

farmers and for the

tricity

\

Need

determination to help bring about

seeking to lower the
cost of power for the continuing




conventional

proj¬
ects are being undertaken prima¬
rily to advance technology, to
study methods of cutting costs,

industry in

system over the systems of other

cheaply with nuclear

as

with

as

The present nuclear reactor

industry been so conscious of
necessity for practical, wellconsidered, fruitful work in the

the

discuss

&

advantages

ventional power plant technology,
nuclear power technology must be

fuels

merit this confidence and

velopment should be carried for¬

to

T^e Benefits of Free Enterprise

our con¬

will continue

sive program of nuclear power de¬

leaders

are

monopoly question.

Few

and the advanced state of

confident

are

we

power business and of power for
America? We believe that the fu¬

erating capability will continue to
rise, becoming ever steeper in rate
of growth.
As in the past, the
power
companies will
forecast

relatively low-cost fossil fuels

We

predicting that

go

of the

future

abundant supplies

our

in this business.
in

The plotted curve of industry gen¬

in

before have the

never

facts <hse of nuclear energy as a power
understood, source has become an integral part

the

the

for their construc¬

reason

With

what is

electricity

prise

socialistic
the

for

basic

these

proceed

under¬

be

primary

kilowatt

real

Future

The
And

While these projects will add a

are

power

industry in the past by investing
billions of dollars of their savings

fective job

million

dollars.

substantial amount of capacity to
the nation's total, this 1s not the

the

in

We

race.

to meet these demands.

tricity have been met by the reg¬
As to the sec¬
there

ahead

capacity in

alone.

electric

ulated companies.

ond,

far

1957-58

before it will be possible to make

vote

cooperatives

has

well

How

the

years

highly developed in this country

to

panies.

sponsibilities:

400

over

the

tend

customers,

The power

of

an

about 25 million kw of

projects is, basically, a lack of in¬
An analysis shows that
when people are informed on the
facts concerning these issues, they
formation.

power

largely

are

expenditure

of

power

in vari¬

seven are

1.5 million kw and to involve

tion.

operated

-

seven are

stages of planning.
When
completed, these reactor projects,
involving several different types
and designs, are expected to have
an
electric capacity in excess of

of

government

far,

ous

tion of tax discrimination in favor

However, we must remember that
business,

the

abundant

This

sets.

field of communication. The solu¬

nomic

in

confidence

of

TV

reason

tion

principles
underlying
business. These eco¬
facts
and
principles are

power

shown

world's

world's

of

the

dous

announced

fuels

the home; it will result in an
expanding industrial use of ma¬
chinery to enable the people of
America to produce more, and by
producing more to have more.
The
American
people
have

explains why Americans,
who comprise only l/16th of the

the

and

of

economic

we

more

one

the

our

field.

to

thermonuclear research proj¬
Two other groups of com¬

produce electricty with

clear

39

to

electric

There

been treated fairly.
Tne
term
"power

to

to

us

type

enable

ed

today than it did 10, 20
ago.

can

of

and

projects

will

the

shown by the fact that

it takes much less fuel to gener¬
ate a kilowatthour of electricity

to

construction

and

reactor

that

undertaking nuclear
projects, and in addition
a
large number of companies have
been
actively following nuclear
power
development as members

goods.

as

nuclear

types—ones

or

considering

radios,

duce

ciency,

14

the

as

50%
75%

cars,

world's

ments, and others, have resulted
increase in generating effi¬

development

the best nuclear reactor

for

reactor

passenger

the

in

an

electric utility com¬
participating in the

80
are

of

same

they, have 56%
telephones, 71%

reason

use

over

(2763)

methods

promising.

We

that

appear

are

looking

For

a

complete outline of the services

Ebasco offers,
"

write for

The Inside Story of

our

booklet,

^

Outside Help."

Address:Ebasco Services

Incorporated,

Dept. V, Two Rector St., New York 6, N.Y

NEW YORK
DALLAS

*

•

CHICAGO

PORTLAND, ORE.
• WASHINGTON. 0.C,

SAN FRANCISCO

40

The Commercial and Financial Chronicle

(2764)

Continued

from first

prior
to
1954.
The
1954
Act,
although it permits and encour¬

enterprise

free

ages

to

assume

to

commercial

or

supply

Immediately after the

greater responsibility for the de¬

the world.

velopment of atomic power, does

war

many

not turn the job oyer

had

doubts

completely
to private utilities but, in effect,
requires a partnership to exist
between government and free en¬
terprise. There are those who do
net like this

the

partnership.

Some of

public power advocates would

like

revert

to

to

government
monopoly. There are some in pri¬
vate enterprise who would like to
eliminate
the
government from
the power

field.

The facts of

that

such

a

the case, however,
not

military effort but

our

could

ence

that

ore

an

atomic

power

if

even

supply

to
real influ¬

adequate

developed

be

make

individuals

informed

a

technical

the

and

Act

require

a

the atom.

Our technical objective for

de¬
should be to
obtain the lowest cost electricity
at the earliest practicable
date.
the

veloping

atom

believe

not

do

To

do

we

should resort to either

public

this

I

power program

a

that

large

which tends

to socialize the atom or to a strict¬

development.

private

ly

achieve

to

maximum

To
I be¬

progress

it desirable to continue

lieve

and

expand the partnership between

the

government

we

free

and

enter¬

At the same time, however,

prise.

redouble

must

our

have

free

much

responsibility

enterprise
as

efforts
assume

of

establishment

a

continuing its development of an
problems pertaining to supply our gaseous diffusion plants government.
powered
aircraft. These
These plants are owned by the atomic
of atomic power for production of U23g and our
three military efforts will continue
could be successfully soivedf How¬
Plutonium plants for the produc¬ government and operated by in¬
ever, continued
exploration and tion of plutonium for weapons. dustrial contractors. It is ques¬ to push forward the frontiers of
continued aggressive government The plants are government owned tionable if it would be practicable scientific and engineering devel¬
support of the ore program have but operated by private industry to transfer these large plants to opment and will assist technically
in
achieving
economic
atomic
established a uranium supply that under contract.
Last year, how¬ private enterprise because of the
So much for that part of
appears to be adequate for many ever, the Atomic Energy Commis¬ large capital investment and be¬ power.
our
atomic progress which is
cause
of military considerations.
a
decades to come. This adequate ore sion
successful took steps to start
supply has been established as a the transfer of this function to pri¬ Hence, I think we should assume by-prcduct of our defense effort.
that this segment of the industry
result of an appropriate partner¬ vate
enterprise. As a result of com¬
economic

the development

let
we

us

take

are

Ore

a

States

Canada

look at the progress

Concentrate

essential

toward

a

an

adequate raw material supply.
a

result of the wartime atomic

we

and

the

as

that
each

United
will

be

producing more than 15,000 tons
of U;1Oh annually by
1959.
The
free world annual production will

is

As

project

and

continuation

of

military effort after the war,
have developed a uranium ore

supply that is adequate not

only

plants.

As

result of

a

wartime

government

the

quirements,

almost

invested

dollars

billion
sion

our

and subsequent defense re¬

needs

two

in

and

gaseous

a

has
half

diffu¬

plants located at Oak Ridge,

Paducah

Portsmouth.

and

These

only
will
produce
enough material for our military
effort
but President Eisenhower

plants

has

not

fit to release

seen

some

40,000

high point kilograms of U236 for the use in
The de¬ production of power both here and
velopment of this adequare ore abroad. Their capacity is so large
supply in the United States exem¬ that we do not need to consider
plifies what can be done when a enriched U23r, a scarce commodity.
reasonable partnership is set up The supply is adequate for some
dropping

reached

healthy atomic power industry is

the

1956

probably exceed 40,000 tons. More¬
over, the price of U308 concentrates

Uranium

first

double in

1955 and will more
than double again prior to 1959.
The Atomic Energy Commission

as

Production

The

than

more

indicate

making.

and

tion

compared to

predictions

Now,

will

under the control

remain

a

from

the

few years ago.

between

government and private
enterprise.
I am confident that

equally

good

r.

suits

would

have been obtained if

we

time

to

the

get

re¬

It

come.

is

questionable

where

area

able.
were

tucky,
cheap

and

these

Ohio

rive

States

the

and

in

by utilizing U23B produced
area.
Separation of U236
very well bear a similar re¬

this

may

lationship

to

industry as
gasoline does to

power

industry.

than

dollars

at

are

and

one

and

the

pro¬

for

These plants

Hanford

levels is

essential to

our

both

friendly

to

Investment

state

and

local

business develop¬

capital is not only

increasingly sound and expanding
There are no state income,

economy.

duplicating inheritance
...

no

or

ad valorem

punitive tax levies.

result

Equally important, skilled workers
are




filling jobs

under Florida's
and
no

same

industrial

as

fast

as

open up

continuing commercial
expansion—there

labor recruitment

And, of

they

course,

problems here.

for

you

and

your

lamily, there's the priceless
"plus" of Florida living!

up

as a

plutonium produc¬
tion effort which gives us knowhow

in

reactor

control

design,

remote

health

techniques,

and

safety criteria, methods of opera¬
tion of plants, and the develop¬

&

LIGHT

Miami, Florida

COMPANY

best

interests

be

program

of

the

cooperative

continued

that

and

insure

that

ultimately

will

we

have developed the most economic

type

of

that

the

various

over-all power

our

I would like to mention

program.

briefly

for

reactors

applications in
various

of reactors
being pushed

types

presently

are

aggressively.

more

Pressurized

The

first

mention

is

the

The

reactor.

reactor is

Water

the

Reactors

that

I want to
pressurized water
pressurized
water

type

type for which the

United States has the most experi¬
in

design, construction, and
operation. The Nautilus is a pres¬

ence

surized

reactor

water

the

and

principal part of the Navy pro¬
gram is now based on further de¬
velopment of pressurized water
The

reactors.

scale
for

reactor

world's

first

designed

large

primarily

producing electricity will also
a
pressurized water reactor.
being built and

be

In

This is the reactor

of special reactor materials.
addition, as a result of this
great effort, we have developed
in the United States engineering
and

dustrial

the

scientific

organizations

and

in¬

capable of

designing, constructing, and oper¬

ating reactors.
reason

that I stress the U235

continuing asset to an
industry and do not
include the plutonium
plants is
that the cost of producing U 2.36 iS

plants

as

a

atomic power

low

so

as

to

aid

in

the

power

development, whereas
produced
other than

plutonium
as
a
by¬
product from a power industry is
too costly to fit into the economic
picture.
In

POWER

the

United States that this

the

field

of

development of

owned

by
the
government
at
Shippingport, Pa. The contractor
producing this plant is the
Westinghouse Electric Corp., and
the Duquesne Light Co. will oper¬
ator the plant for the government.
This plant should be in operation

for

late this year.
A commercialized and

nomic

more eco¬

pressurized

with

tion should start this

Atomic

search

for

the

tions

As

a

and

Volta

The

is
with re¬
development
funds.
Edison
Company
of

this reactor

letter contract
plant. Negotia¬
also under way for sev¬

Italy has signed
a

summer.

Commission

Energy

supporting

to

of submarines.

the

Yankee Atomic Electric
Westinghouse, design is
essentially complete, and construc¬
Co.

part of our progress is due to the
Navy effort to apply atomic power

propulsion

of

water reactor has been contracted

The

result of this military objec¬

version

for by the

atomic reactors for power, a large

FLORIDA

free enterprise system.

personally convinced that it

to

ment

The
are

gratifying dem¬

con¬

this

of

talent

m

Sa¬

military effort

knowledge has been built

welcome, but it flourishes in the state's

taxes

and

Although the plants

tinuing contribution as the U23-,
plants as a part in the ultimate
supply system for an atomic power
industry. They do contribute, how¬
ever,
to the industry from the
standpoint of aiding in the devel¬
opment of reactor technology.' A
vast
amount of
experience and

The Hon. LeRoy Collins, Governor of Florida

at

in¬
half

a

reactors

in

facilities

located

also

has

government
more

am

is

our

Our present program for reactor
development is based on advanc¬
ing on a broad front in order to

Costly Plutonium
The

I

of

future
atomic there be no backsliding toward
the refining of the government monopoly that
the petroleum existed previously.

a

they do not make the

Government

de¬

power

are

ment.

world

advantage of this cheap

some

vannah River.

says

most

a

United

duction of plutonium.

Golden Business Climate"

private enterprise in this program
have been

onstration of the merits and bold¬

separation

"You'll like Florida's

The response of private enterprise
and the responsibility assumed by

ness

tremendous

Yes, Mr. Businessman...

the

In the future it will be

area.

cooperative program be¬
free enter¬

a

tween government and

plants prise have) been most successful
in accelerating our power program.
Ken¬
of

because

ment of

possible to let other parts of the

appropriations
plants

necessary

build

is avail¬

sources

electricity available both
TVA and private utilities in

from

this

electricity

cheap

Our gaseous diffusion
located in Tennessee,

lbng it would have taken to

how

not

had

to

an

from conventional

billion

an *

Cooperative Program

the government for a

vested

""

Praises

of

Now let us look at the progress
considerable
period of time. But, regardless of being made in commercial pow^r
Under
the
1954
ownership, the existence of these development.
plants is a great asset and a major Atomic Energy Act the Atomic
stepping stone toward the devel¬ Energy Commission generally is
operating on the principle that
of
can prospector and the American
responsibility was excellent, opment of economic, competitive
the
government
should
take
a
atomic power.
Enriched uranium
mining industry have done such a and from all I can gather the con¬
most active part in the research
price
compares
favorably has certain advantages for produc¬
good job that today the uranium tract
tion of power over natural urani¬ and development aspects of reac¬
resources
of
the
United
States with that in the existing govern¬
tor technology and
that private
um, and the combination of ex¬
appear
to be adequate for our ment plants.
perience
and
studies
to
date enterprise should be encouraged
needs.
The mining and milling of
the
Demonstration
Re¬
indicates
that
enriched
uranium through
Policy for Uranium-235 Plants
uranium is almost completely in
actor Program to take the
respon¬
The next major item which I reactors will be more economical
the hands of free enterprise, and
sibility for prototype atomic power
than natural uranium reactors.
the
industry is expanding at a wish to mention in the develop¬
This is particularly true if the plants. This division of effort and
tremendous rate. * Ore production ment of our atomic power industry
the
uranium-235
and uranium concentrate produc¬ is
separation Uy.tr, separation plant is located in responsibility and the establish¬

to

is consist¬

ent with the state of the art.

power

than
the
primary
meeting our defense requirements, at Arco for a considerably longer
long
rangK government buying with recognition given to the fact period. This application of atomic
that at some date in the future power has been so successful that
"program.
The next step Th-the- develop¬ the plants
could also meet our the Navy is developing power
ment of an atomic power industry atomic power requirements. This plants for a complete atomic Navy.
In fact, there are more than 30
pertains to .feed materials.
In marriage between military objec¬
or.der to supply military needs for tives and peaceful application of power reactors complete or on
order for the Navy. The Army has
uranium met£l and uranium hfexa- the atom has been advantageous
also completed its first package
14uoride, the United States Gov¬ to both developments. It has, how¬
ernment has invested more than ever, put a large and important power plant which was placed in
a
of
the
future
atomic operation at Fort Belvoir in April
quarter of a billion dollars in segment
of this year.
The Air Force is
feed material plants." These plants power ^industry in the hands of

the

only does the
working relationship
of some type between government ship between government and free petitive bidding, the Commission
and
free
enterprise, but many enterprise. Government has done has contracted with a chemical
other considerations make it de¬ its part by supporting a buying company for processing approxi¬
sirable to continue a cooperative program
that
extends
through mately 5,000 tons of uranium hexafluoride a year. The response of
partnership if we are to make 1966.
maximum progress in developing
In the United States the Ameri¬ private enterprise to this transfer
are

atomic

enterprise solely to itself

without

also to supply a power develop¬
mentfor the United Stated and

Thursday, June 13, 1957

.

of the motivation had ben solely

ownershipf program

left free

The Status of Atomic Power

.

tive, the Nautilus has been in
rather operation for almost two and one
objective of half years and the prototype out

sorted to dither an exclusive gov¬

ernment

page

.

a

Yankee type
are

eral other plants

of this type. The

Volume

5646

Number

185

.

.

.

The Commercial and Financial Chronicle

pressurized water type of reactor

very "

is

with

competitive with the Calder
Hall type of gas cooied reactor if
uses
the same type of
analysis for both systems.

one

well tend to drift together
advantage being taken of the

York

City. The Consolidated Edi¬

Co. will finance and

plant

has

and

Babcock
atomic

contracted

Wilcox

and

this

own

for

Co.

There

reactor.

is

with

no

the
gov¬

ernment assistance for this

project.
Likewise, the reactor to be pro¬
vided by the Babcock and Wilcox
Co. for

sion

first maritime propul¬

our

plant

will

water reactor.
Power

also

Plant

be

Fort

at

pressurized

a

Although there
cepts for

pressurized

a

The Army Package

Belvoir

water

reactor.

many

are

is

con¬

reactor design

that ap¬
at this stage of their develop¬

homogeneous

power

It

presently; further

reactor.

Atomics

son

the

than^some of .the

graphite

New

—

The third approach is the sodiumv types that are
advanced. "
•:

cost

of

has

economic

can

vicinity

solution

reactor

coal

structed

the

their

being

of each/*-

chief merits

Another version of the pressur¬
ized water reactor is being con¬
in

(2765)

more,

\

now

As

known

as

Reactor Program

been

cooperative program

a

the Atomic En¬

Commission,

with

has

part of the Demonstration

a

ergy

International,

engaged in

•

Atomic

The

Energy Division of North Ameri¬

Aviation, Inc.,

possibilities of

various

in

cooperation

utilities

and

de¬

signers, is also presently engaged
time for the development of the on, or is giving consideration to,

with

the

for

government

some

sodium

graphite^ reactor.
A re¬
experiment has just recently
critical in California.
The

several

reactors

periments

reactor

and

ex¬

covering

liquid metal,
gas
cooled, plutonium enriched,
gone
Consumers Public Power District organic moderated, etc.
Just re¬
of
Nebraska,
North
American cently three Florida electric power
companies have proposed a large
Aviation, Inc., and the government
will construct a large scale version scale electricity plant using nat¬
ader

this

of

type

reactor in

of

reactor

Nebraska.

may

have

Tnis

better

ural

In

thermal
use

efficiency because of tae
liquid sodium as a means

of

uranium

as

the

field

fuel.

a

water will be used

as

of

a

Heavy

moderator.

new

types

of

is competitive in such good

areas

the Ohio Valley.

fqr >areas .blessecWwith
cheap;power tliati.we should be in?
a
rush to develop atomic power.
first in
fuels

Atomic power will make it pos¬
sible
to
more
nearly level the

ber

of

available

reactors

permit

more

better

fuel

will

rapid development of
assemblies

rod

which

assist Walker Cisler with the proj¬

ect.

To

my

mind, this project is
bold, farsighted ex¬

Chemical
An

Reprocessing

Problem

power

and

life of

greater burn-up.

a

core

Experience

necessary,

periment

than

There is every reason to believe
within the next two years it

that

should

be

struction

possible
of

to

start

con¬

pressurized

water
plant in the order of two to four
hundred

a

thousand

should be

kilowatts

that

it

that promises

consumes.

be

to

Success

of

possibility of assisting the higher
cost

areas

important step in the atomic
industry is the so-called

would

therefore

permit available sup¬
plies of uranium and thorium in
the

world

to

power

needs

period

than

meet

for
if

our

breeding

utilized.

what

a

remote from

areas

good

hydraulic

sources, atomic
will first become competi¬

some

like

areas,

are

England

also

and

the

world

future.

is

due

to

one

of

the

advantages
of
atomic
'that
is,
the
ease
and
cheapness
of
transportation
of
Ua3s: or other fissionable material

transportation, whereas the cost of
transporting Uo3B from a cheap

or

In addition to savings in trans¬

portation

costs, it should be rec¬
ognized that the anticipated world
supplies of uranium and thorium
will support
industry for

a
a

much larger power
much longer time

than

will fossil

oped

hydraulic

fuels

or

sites.

undevel¬

In

if

fact,

did not have the possibility of

we

atomic

nation, in¬
cluding the United States, would
seriously
concerned
at
this
power,

every

be

time

about

meet

expanding

how

ultimately
to
require¬

power

ments.

''Three

Wise

Men"

Primarily as a result of inade¬
quate coal supplies, and the re¬
sulting anticipated increased cost
of electricity due to cost of trans¬
portation of coal, England and.
Euratom
.

i

:

;

-

r

are

planning

Continued

on

large
page

42

problem until you know
have to reprocess. This

you

true in the original plutonium

was

for weapons program and still re¬
longer mains true in the
power program.
is not
Up until recently utilities were

faced with

truly competitive with

coal-fired plants in the New Eng¬
land area or comparable cost area.

cessing

over-all

much

a

recovery,

or

transmission losses. There

of the United States and

power

waste

as

costs

power area, such as the Ohio Val¬
ley, to any part of the world is
fuel reproces¬ an
insignificant cost factor. For¬
most importance in the ultimate
and proven
reliability will also
sing.
The chemical reprocessing
merly one could speak of trans¬
application, of the atom to the end of
permit more rapid extrapolation
atomic energy has always
world's power needs.
porting electric power by coal car
The basic
in size, and
this is particularly
lagged behind other developments. or
by transmission line; soon we
advantage of this type of reactor There
are many reasons for this,
important because increased size
is that a fast breeder promises to
offers one of the greatest oppor¬
the primary one being that you
produce more fissionable material
tunities for decreased costs.
cannot tackle the chemical -repro¬
y <

should lead to longer

cargo

Europe, that presently have good
throughout
sources of fossil fuels
except that
the world.
However, this should
they will be inadequate to take
be done by
knocking off the peaks
care- of
rapidly expanding elecpertaining ^o these high cost power
Here,
areas
rather than elevating the tricy needs in the future.
the governments and utilities are
valleys pertaining to those areas
presently blessed with good con¬ planning on taking advantage of
ventional sources of power. This atomic power to provide for the
electric

reactor that can utilize plutonium.
The fourth type of reactor for
Otherwise, the government buyadvantages
which there is a large scale project
back program for plutonium will as compared to cost of
over the pressurized water system,
transporta¬
under way is the fast breeder. The
be jeopardized. Such reactors are tion of coal.
the fact that so many pressurized
Power Reactor Development Co.,
some time in the future, however,
water reactors are being built will
The
under
the leadership
tonnage of shipping reof Walker because many problems must be
tend to keep this type in competi¬
auired for coal to support a given
Cisler, has already started con¬ solved concerning the fabrication
tion for
the
foreseeable
future.
kilowatt capacity is in the order
struction of this reactor. In fact, of
Costs
will
plutonium and the effects of
be
reduced
through
of one million times that
the
steel
required
sphere is now being radiation
on
plutonium
in reengineering improvements, cheap¬
for U28fi. Stated
erected for this reactor.
I per¬ actors.
otherwise, the cost
er
Ultimately, however, it of
production
techniques,
and
transporting coal is approxi¬
sonally have advocated develop¬ should be expected that plutonium
savings as a result of repetitive
mately one mill per kilowatthour
ment of the fast breeder for many
will be used to produce power.
production. In addition, the num¬
for every 200-300 miles of railroad
years and it is my privilege to
pear

air

areas

energy,

ment to have economic

by

competitive
tive because of the excessive cost
lacking fossil
of transportation of fossil fuels or
good hydraulic potential.

those

or

inherent

a

U.,35

So, for
fuel

power

Atomic power will be

reactors, increased emphasis must

given to the development of

add

can

competitor.

is „not

be

of heat transfer.

as

41

The fifth approach which I wish
to mention
is the homogeneous

a big gap in their cost
concerning the cost of
reprocessing fuel for the recovery
of unburned U.-ar, and plutonium

estimates

Supporting the construction of reactor. This type of reactor is
such a larger size unit is one of not as far along as the four I have produced. After long and arduous
the challenges that face the utility mentioned but has great potential consideration, the Atomic Energy
for the future. Oak Ridge Natinal Commission has finally established
industry, and must be accepted.
Other

I

Laboratory is engaged in the de¬
velopment of this type of reactor.

Reactors

The second type of reactor that
wish to discuss is the boiling

water

reactor.

actor

has

This

type

of

re¬

certain

potential ad¬
if they materi¬

prices for such fuel reprocessing.
The

Commission faced policy dif¬
addition, Foster Wheeler Co. ficulties in establishing these
is developing a small reactor of prices because if they were estab¬
this type and has entered into a lished too high they would dis¬
contract with the Wolverine Elec¬ courage the utilities, and if they
In

.

established
too
low
tric Cooperative of Hersey, Mich., were
they
vantages which,
to build and install one of these would
discourage
the
chemical
alize, will make it worth develop¬
reactors.
Also, the Pennsylvania companies from embarking on a
ing to determine its competitive
Power and Light Co. and Westing- development and construction pro¬
position.
The first power plant
house are working on a joint de¬ gram to take care of these wastes.
of
this
type was just recently
velopment project and hope to
The prices etablished seem to
placed in operation at the Arhave a large power plant in oper¬ favor the
utility side of the argu¬
gonne National Laboratory. Com¬
ation in 1962.
monwealth Edison Co. and asso¬
ment, so the Commission may have
some
ciated
difficulty encouraging the
companies
are
financing
Solving the problems of corro¬
the

construction

actor

of

111., and

this

of

type

a

large

at

re¬

Dresden,

the General Electric Co.

has the contract for

reactor.
the

producing this
This type of reactor and

pressured

water

reactor

may

sion and

related

maintenance

are

difficult technical problems facing
the designer and operator for this

type of reactor but if these prob¬
lems can be solved—and I have a

great deal of optimism concerning

chemical

industry to pick up its
responsibilities in this field. How¬
every

effort should be made

transfer

responsibility to the
companies and

ever,

to

private

chemical

both the utilities and the govern¬
ment

this

should

cooperate

make

to

The utility industry
encourage and aid private
companies to enter this field; like¬
wise the government should help
possible.

should

"Names Make News

.

.

cover

by

some

means

of the cost differential

of liberal research and

development assistance to develop
cheaper methods of processing.

ALCOA

No "Golden Age" Yet

BENDIX-WESTINGHOUSE

One
power

BUCYRUS-ERIE

might

this

ask—is

atomic

adequate for our
This question has

program

national needs?

been raised many times, particu¬
larly in Congress, and the answer
is not an easy one.
If one con¬

WHIRLPOOL-SEEGER

xvitfl a,

siders

only internal economic fac¬
for
the
United
States, the

tors

These

the

are

building
tions in

new
our

types of national industrial leaders

plants

or

expanding present

power

opera¬

considers the
oil

area.

'■

'

I

the

of

Southern Indiana
ELECTRIC




CO.

—

EVANSVILLE

atomic

States

the atom does not
"golden age"
In fact, atomic

any

power.

not hold

prospects

areas

United

the

promise of

power does
ate

and

of coal and

present efficiency of our

thermal plants,

/

hold

GAS

reserves

available to

and
,

adequate. Atomic
is not cheap and when one

program may be

where

for
good

out immedi¬

competing in
fossil fuel is

readily available. Certainly it will
be

a

long

time

before

atomic

tZnourittfy State
1956

Customers Served

Operating Revenues
Utility Plant (original cost)
Kilowatt-hour Sales

System Capability
PUBLIC

1947

357,566
$ 75,451,103

'

263,569
$ 31,081,375

$371,149,993

$117,102,189

4,364,603,000 KWH

1,602,689,000 KWH

1,006,000 KW

304,000 KW

SERVICE COMPANY OF INDIANA, INC.
The

INCREASE

93,997
$ 44,369,728
$254,047,804
2,761,914,000 KWH
702,000 KW

Plainfleld, Ind.

Company's 1956 Annual Report Will Gladly Be Sent Upon Request

The Commercial and Financial Chronicle

43

Continued jrom page

The Stains oi Atomic Powei
atomic

In the
example, the

programs.

power

Euratom report, for

state,

Men

Wise

three

our

.

.

range of
produced by
nuclear reactors of the American

electricity

of

well

of the British type, may

as

14 mills a

11 to

at

estimated

be

the

that

is

conclusion

costs

the cost of
electricity from new conventional
stations which must use imported
while

kilowatthour,

fuel will be

The

The
first

program.

this

I advocate

are:

primary, that it is good busi¬

and

anticipate

to

ness

Sec¬

ploit it when it materializes.

ond, it is only by doing, that we

develop engineering improve¬

can

report

Euratom

also makes another statement that

of

size

limits of this
er,

of

source

new

of

Continued

electricity

of

cost

average

in America is about two-thirds of
what

it

in

is

Europe, so atomic
power
will compete in Europe
long before it can do so ini the

production

new

from page 27

pow¬

and its proper relationship to

two

quotes

and empha¬
size what appears to be little un¬
derstood or deliberately neglected
reasonably

accurate

some
critics of our atomic
program—that economic or
competitive atomic power is a
relative thing and must be con¬

by

power

sidered in

tional

of what

terms

costs

power

conven¬

for

are

any

particular region.
The Euratom
program should assist the United

regarding
the
er¬
claims of these witnesses.

oath

under
roneous

Sees No Political

■1
hydraulic sources. energy sold.
Sale to the preferred customers
Other Federal projects are simi¬
leadership is neces¬
larly deficient in rates adequate is wholesale. They in turn sell to
sary if we are to continue to have
to cover the equivalent of taxes, domestic, commercial and indus->
free enterprise bear the major re¬
and interest on the invested capi¬ trial consumers. The largest block
sponsibility for the electric power
tal. The Task Force prepared an of power to consumers who bene¬
industry.
estimate showing these deficien¬ fit by the subsidized power sup-t
cies to 1953, which, fall on the plied by the TVA goes to business
industry. — not
the homer
taxpayers generally, amounted to .and

and

oil,

-

the

theory

is

in

Men

their

water

report,

our

pressurized

and

boiling water reactors are
for
commercial use.
If

reactors

ready

reasonably

large

these reactors

of

number

be sold abroad,

can

volume

this

production and' ex¬
will do much toward
cutting
costs
for
the
future.
Every effort should be made by
our
government
and
by
our
equipment suppliers to find ways
and means to compete in this in¬
ternational market. Again, a good
working
relationship
between
government and industry is neces¬
sary to meet this opportunity.

perience

1

not

business

a

To summarize the situation, one
might state that atomic power is
rapidly becoming competitive in

Europe, England, and other high
cost areas of the world, and at a
somewhat later

competitive
blessed

in

the

of

areas

date

with

will

those

become

high

United

cost

States

not

fossil fuels

good

but

political

a

This overlooks the fact
that our companies are service or¬
ganizations and that if we are to

or

hydraulic potential. From a poli¬
tical point of view there is a de¬

Columbia Gas System

build and
markets we must

Debentures Offered
Merrill

survive and effectively

of the effi¬

public

Lynch, Pierce, Fenner &
and White, Weld & Co. and

Beane

associates

on

June 7 offered $20,-

ciency and economy not alone of
electricity but of electric service

UuU,UU0 of 5V2% debentures, series

business-managed
organiza¬
tions as compared with our gov¬

Gas System, Inc.,

by

and

ernment-financed

govern¬

For

competitors.

ment-operated

they
are
our
competitors, not
only for existing and future elec¬
tric markets, but for the support
and acceptance of the American
people

well.

their

cannot

let

claims of

as
false

We

greater cus¬
and
cheaper

devotion

tomer

unchallenged or we will
destroyed. If we cannot tell
truth about public power and

power go
be

the

its hidden

subsidies, then

we can¬

real promotional or
public relations advertising at all!
not

do

any

a way, this effort to "gag" us
heartening—for it is a confes¬
sion on the part of the govern¬
ment power exponents that they
cannot
peddle their anti-utility

In

*Summary

is

informed and alert
This
confirms
what
every
opinion poll has shown,
namely, that the growth of gov¬
ernment power has been due to
misunderstanding and ignorance

poison to
citizenry.

an

H, due June

1,

1982 of Columbia

at 101.363% and
interest, to yield 5.40%.

accrued

Award of the debentures was won

by the group at competitive
on a bid of 100.319%.

sale

A

redemptions
may
be
made
prices receding from 106.863% to
par, while sinking fund redemp¬
.

tions may

ing from
Net

the

be made at prices rang¬

ment

derives

would

like

power

who

to

promote
and

program

feel

tional

that

point

maintain

our

from

of

interna¬

an

must

we

aid

pres¬

of

or as a part

economic

must

those

our

program

economy.

from

proceeds

the

sale

of

other funds will be applied to

the

financing of the 1957 construction

assist

It is also heartening that news¬

of them previously

papers—many

friendly
have

to

government

denounced

for what it

this

power—

latest effort

is, namely,

uncon¬

an

scionable and un-American effort
to suppress

these

has

friends

in

areas

developed
tional

if atomic power is not
more

power

rapidly,

costs

conven¬

increase

may

and further increase the differen¬

tial and the advantage of those
parts of the United States having

cheaper
As
I

a

power.

result of all

believe

atomic

the

power

these

factors,

development
probably

further accelerated

will

in the

of
be

United

States

by one means or another.
Therefore, what should
be the
position of the utilities in this ac¬
celeration?
ous—the

The

utilities

answer

must

is

obvi¬

maintain

vigorous leadership in further




ac¬

The

direct

rates

sales

government

on

such

at

a

level

of the corporation's sub¬

spite of inflation and
costs of labor, fuel
and equipment. In 1902 it cost on
the average,* 16.2 cents; in .1932,
5.6 cents; and in 1954, 2.69 cents.

to

be

and silence our indus¬
try.
Surely you and I, as em¬
ployees of a great industry, will
be no less forthright than they.
In

than

closing,
to

I

can

do

obtained

by Gulf Inter¬

state from other sources, will per¬
mit that company to enlarge the

no

better

repeat again what Leon¬

ard

Read, President of the Foun¬
dation
for
Economic
Education,

thereby

of

are

The

the production, purchase, stor¬

transmission and distribution

natural gas.

operations
States

are

of

Pennsylvania,

Ohio,

York,

Maryland

and

plain and support private enter¬
prise). Nothing less is at stake

gas

sonal

obligations

stewards."
This

as

our

per¬

of full

State and local

the

wholesale

New

Virginia. In

addition, the system has
sive

an

equivalent to those, the
Who Pays for TVA Costs?
private utilities would pay." In
meantime, until these matters C JThe Task Force summarized the
are
finally resolved, further ex¬ costs .of - all Federally financed

the

,

pansion of the TVA territory of power projects built, building and
operations should be prohibited. authorized as of June 30, 1953, at
The Federal Power Commission- $9,663 million. It is not possible to
authorized

to issue

period

exceeding 50

is

the

not

termination

licenses for

of

business,

selling
pub¬

lic utility companies for resale to
customers.

at

I,345,000

retail

the

ers.

to

residential,

business

system sells

commercial
Approx¬

imately 70% of the retail custom¬
are

an,

accurate

this

of how

indication

mate

is

adequacy of service, .ac¬
counting procedures and ,s profits

on

electric

energy

cost

All

rates

are

change

subject

to

is; $1,775 million, with no
power,
while thatfor
Tennessee
is, $73 million,
with
Federal.;

and

nearly all its power generated by
the
TVA.
This means that the

in; the

public interest at
any lime by the FPC.
The Com¬
mission has no similar jurisdiction
over

The share paid by the

ample,

interstate

review

may

one

people of New York State, for ex¬

supplied in. in¬

commerce.

shared,

each State.

rates,

State

York

New

of

taxpayers

Federal

paid about $410 per average fam¬

ily, and got no power
while in Tennessee they

in return,
paid only

$75 per family and got the bene¬
fits

the

of

other

paid for by the

power

taxpayers.

There

ceive

,

:

<

.

19 states that will re¬

are

no

from the

power

plants

built, building or authorized, but
will pay, 61%
The TVA sells power wholesale., of the cost of the program if it is
The
and not retail.
Prior to its estab¬ allowed to be carried out.
which have paid, or

preference customers for
eral
agency
generating

any

be

Such

responsible

customers

ally
into

will be used to take their business

Fed¬

would

the local

for

dis¬

tributing
other

agencies have stimulated the

organization

of

cooperatives

for

the purpose of establishing a tax-

of many States are actu¬
being obliged to pay money
the
Federal Treasury that

people

lishment, the law provided that
municipalities wanting power for
municipal purposes constituted

and

prosperity

Such

its
.

s.

the

competes

.ment

away

Federal

re¬

Govern-

in business

taxpayers.

own

from them.

situation

anomalous

an

when

sults

with

.

Politicians and pressure groups,
on
an • apparent
drive to

bent

,

,

nationalize the power industry, or
obtain

to

of all the

eral

privileges

special

constituents

their

located

be

Nation,

at
are

the

for

expense

against Fed¬

licensing of private capital to

contracts

were

entered

into

with

in

communities

fight will not be an easy
one.
We
will
be
subjected to having populations of fewer than
every form of harassment that our 50,000.

1

for

spent

FPC of the Hell's

these

preference customers by the

preferring

TVA

for exclusive

eral

purchase from

A word about these

is in order.
chase

cooperatives

power

needs from

an

utility, they must

pay

cooperative,

which

pays

no

the

more

that -the

sum

power

Fed¬

out

ov»r

pay

and

recover

only

capacity.

Unfortunately, we have had men
whose activities consisted

If certain citizens pur¬

their

investor-owned

a

2%

Canyon Project,

instead

Government

twice

the Federal agency.

rates to cover the taxes that
the utility must pay — Federal,
approximately State, and local. If they now form

The

and industrial customers.

ers

distribution of
the taxpay¬
However, to-get an approxi¬

make

this huge cost among

years,

which

may under certain
take over and operate

conditions

exten¬

natural gas to non-affiliated

their

the customers that get

over

pass

most of the benefit.

gov¬

development
of
free
channel
from
generator to
Retail natural gas consumer, and thus selling the water-power resources. For exam¬
conducted in the power more cheaply. Twenty-year ple, they fought the licensing by

Kentucky,

of

sub¬

engaged

Virginia,

fulfillment

in lieu

payments

to

lines.
The TVA, -the
Department of the Interior and

a

West

the

taxes

operating subsidiaries and
sidiary
service
company.

said, namely, that "It is not
enough for us to be against socalled public ownership. Nor is it
enough to be for private owner¬
ship—every last one of us can and
should make the effort, not half¬
heartedly, not as an off-hour ex¬
ercise, but as an integral part of
our every word and deed
(to ex¬

than

provide

tax-free.

age,

compo¬

ernment

interconnected natural gas system
composed of the corporation, 13

in

the

Yet this small sum is

plus an amount which nent that many politicians use as
will: equal
Federal
exemption a basis'for their claim that - the
based upon the Federal taxes paid citizens are being unfairly charged
by the private utilities; and (c) for their lighting. They smoothly
power,

electric
power; but the TVA Act provided
has
under contract
in southern that cooperatives also would be
Louisiana.
preference customers. These pref¬
Columbia Gas System, Inc. is an erence
customers' are
Federally

operating subsidiaries

increased

of

(a)

.

together with $30,000,000 obtained
or

kilowatthour fur¬

per

the utilities for residen¬
service has been decreasing

steadily in

power

will

as

fur¬

present

at

half that paid for tobacco*

price

tial

Federal Power Commission to fix
the

is

investor-owned utilities*
a
total annual bill: of

nished by

the

agencies,
and
no
to require compliance
sidiaries. This construction
pro¬ authority
by them. At present, allocation of
gram for 1957 is estimated to re¬
quire expenditures of approxi¬ costs and rates for the sale „of
mately $84,000,000, exclusive of power from the Bureau of Recla¬
mation projects, are approved by
approximately $3,000,000
esti¬
mated for portion of hydrocarbon the Secretary of the Interior; and
from Corps of Engineers projects,
extraction plant. In addition, the
corporation proposed to advance by the Federal Power Commission.
$6,000,000 to Gulf Interstate Gas The TVA fixes its own rates*",..J*
program

deliver
additional
quantities of gas which the System

Support of Press

Europe and other
achieving
economic
atomic
power.
Also, from the
point of view of those in the high
cost areas of the United
States,
such as New Ehgland, there is the
possibility of even higher costs
for transporting fossil fuels.
For

we

and

empower

gress

have

about

recom¬

„

debentures, together with

and

public

a

from

view

and

who

leadership for

tige purposes,
over-all

those

from

has

mended, however, "that the Con¬

terstate

to par.

101.35%

capacity of its transmission system

The strength of this move¬

This, is not • so.

Coramission

The

iourfhe entirecountry*

which

of

most

divide it up
the projects. Investor-owned utilir among the States in proportion to
ties are regulated by FPC. as to the Federal taxes paid in 1953 in
at

mately 70%) of the new deben¬
tures prior to maturity. Regular

American

the

take all of the domestic

we

we

sinking fund will be provided
United States
$14,030,000 (approxi¬

ations.

further

If

users'bills

.

"TVA be abolished.

retire

to

United States economic consider¬

accelerate

to

*

nished by

at

Co. (non-affiliated). This advance,

development of atomic energy be¬
yond
that
strictly
dictated
by

>>

It is often said that the Hoover

a

June 6

politically-fostered confusion
and
that, wherever the people
have
been
correctly
informed,
they have rejected this first long
step toward socialization of the

mand

owners.

TVA Recommendation

in

expense.

our

Wise

billion dollars.

a

upon

regarding govern¬
investor-owned power

and

the

three

Expense

ingenious
adversaries
can
im¬
agine. But that is unimportant as
compared with the satisfaction we
will have in knowing we have

facts

true

ment

convince

to

third of

which this done our part to preserve the eliminate the inequities now im¬
move
to gag and intimidate our American way of life as we have
posed upon the great majority of
known it in the past and as we
industry is predicated, is that ex¬
the people; (b) amortize and pay
penses
incurred
in publicizing hope it will be in the future. ...
interest on the Federal investment
The

maintain

efforts

its

are

This vigorous

Helping Undermine Private Power

achieve

in

government, while other citizens
charged more than their share
to meet the total bill?
:

inade¬

Commission has recommended that

competitive atomic power for our
own
use.
As indicated
by the

States

in the

reflected

4

to be

appear

is

of the rates charged for the

quacy

-

United States."
These

And Hoover Commission Views
course

Let's Face It: Business Men Are

advocating a kilowatt
with Europe. Again I quote,

"The

The Uneconomics of Public Power

a

are

race

31

page

,

acquire

ments,

proponents

public power

our

who

jrom

economic

true

the

themselves

Continued

reactors.

present

our

sometimes is overlooked by some

a

Thursday, June 13, 1957

.

increasing

Third, atomic power will be com¬
petitive in the United States in
the higher cost areas within the
next decade and it is necessary
for the utilities to determine for

properly ex¬ coal,

and

it

understand

devel¬

new

a

be in a position to

opment and

11 to 12 mills a kilo¬

watthour."

the

of

celeration
reasons

from

results

economic

the

determine

and

techniques,

41

the

as

.

.

(2766)

elected

largely of selfishly obtaining spe¬
cial benefits for their constituents
at

the

and

expense

who

benefits

have
as

a

of all the people,
used such gained

justification

for

they keeping themselves in office. The
pay
a
lower rate because they electorate themselves are respon¬
avoid payment of a tax component sible for this prostitution of pub¬
in that rate.
Why should some lic trust, by adopting the attitude
citizens be excused from paying that it is right that they should
taxes

on

its

own

operation,

their fair share of the cost of their

get

from

the public treasury all

Volume

185

they

for themselves.

Number

5646

.

.

The Commercial and Financial Chronicle

.

(2767)

the

can

Ethics of

citizens, like charity,, begins at

home.
It

'

v

must

'•"•

i

evident

be

foregoing

that

the

large

involved,

vited

to

cooperate in

power

needs should be based upon sound

prise, and

tween

of

build

of

the

agen¬

Likewise, in the
competiti ve and politically-charged
atmosphere of bureaucratic

ation, there is

a

oper¬

threat to

grave

sound

at

the

solutions

to

the

steam-electric
the

(a)

"That private enterprise be

"That

ponent

of multiple-purpose

steam

dams

Two

the

things

most

politically

thus needed:

^ (1)
continuing,;, nonpolitical national policy respecting

sound

a

water

are

and

and the Federal

use,

ernment's

role

adequate

therein,
machinery ; to

President

to

determined
\

make

Gov¬

and

(2)
aid« the

affective

this."

policy.
President's

An analysis of the Commission's

recommendations shows that they

support to
the policies
time

by

remarkable

a

stated

the

showing

the

degree

President,
intent

offered

the

should

power

sale

to

the

be

private

utilities, the States, or the munici¬
palities and cooperatives prior to
construction, on terms that will

economic

growth, strength, and general wel¬
this

point

the

President

•has said: t
"If

we

continue

to

are.

vance

agriculturally

trially,

we

of every
on

to

and

ad¬

indus¬

must make the best

use

drop of water which falls

soil

our

which

or

tracted from the

There

is

be

can

ocean.

no

ex¬

."

.

completely dependent

Nation

upon

frequently finds
that the funds fail to keep pace
with local needs.
But the impor¬
tant thing is that as Federal power

the

Government

should-be

the

developer

our

sole

resources.

other

and

water

until within

role

a

quarter-century. The Hoo¬

Commission

ver

water

Historically, it did not

attempt such
the last

of

recommends

for

developments

—

nec¬

election)—are

of

should

the

Federal

assume

participation

responsibility when
initiation is nec¬

or

to further

essary

national interest
broad

national

or

safeguard the
to

or

purpose
the

or

means

potential

beyond

Under

the

development

or

multiple

are

the needs of local

or

enterprise.

circumstances
for

where

their size

benefits,

or

private

accomplish

objectives,

projects, because of
complexity

Government

or

other

responsibility

should

be

dis¬

charged by State or local govern¬
ments, or by local organizations,
or by private
enterprise."
On

,

has

this

point

the

President

is

not

properly

Federal

a

responsibility to try to supply all
the

no

needs

power

The

Federal
more

it should

of

people.

our

Government

attempt

to

do

should
so

than

assume

responsibility for
supplying all their drinking water,
their food,

unalterably

believers

tion fail to

oly

is

warn

in

op¬

centraliza¬

that

us

monop¬

exercised

by Government.
Curiously enough, they proclaim
their
fear
of
a
private
power
monopoly in a country, city or

their housing and their
To attempt such a

wide

the

all-wise

directors

of

hydroelectric power in
partnership with State, local and
private enterprise."
In 1954 he had said:4

permit

company

ulation

any

State

or

"Now,

of

the

course,

Government

must

any private
under governmental reg¬
develop such a power

its

obligations by
undertaking projects of such com¬
plexity and size that their success
requires Federal development."
"To

the

couraged

maximum

extent

sources

The

to

construct
facilities."

Valley,

Commission

the




the

the foibles of
are

Opens Inv. Office

as

Ameri¬

exposed

Copies

-

logically
begin plans

a

Avenue, New York
City. Miss Behren was previously
with Bruns, Nordeman & Co.

5 Letter to

York

available

OMAHA,
has

RIDGEWOOD, N. J. — Harry
J. Coyne is conducting a securities
Street.

He

Siegfried Frohlich is
at

900

West

End

MENLO

from

was

PARK, Calif.— John

offices

Avenue,
formerly

in

to engage

Both

the

in

were

a

For9ythe Building
securities business.

formerly

New

Joins B. C.

Christopher *

greater

Bertner

OMAHA,
Neb. — Charles
S.
Knapp is now with B. C. Christ¬
opher &
Co., Grain Exchange
Building.
.

Bros.

Securities

highs again

were

Building, New York City.

established in important phases of
adding further

the

to

postwar suc¬

This continued progress

records.

efficiencies and the effects of

two

coupled with
major mergers has

PP&L, 1956.
1945

its

take

Government

of

the

the

"The

Government

localities

and

with

at

2,3 McNary

solutions

4 Annual

Dam

States,
citizens in

to

clearly-

Message

Dedication

to

Congress.

30,000

Number of

Operating Employees

4,985

5,677

•

Looking

to

program over
million

week,

...

continued
the five

or at

the

a rate even

work

the

private

1,481,500 KW

19,000

rights

President

must

490,550 KW

Pole Miles of Lines

a

closely

$126 million
$550.1 million

1

Utility Plant

rights

has said:

more

$48 million
$181.9 million

Total

without

constitutional
account

subject,

6.5 billion

Electric Revenues

that

laws of the separate States
concerning appropriation, use,con¬
trol, and development of waters

this

690,612

2.5 billion

Generating Capability

believed

and

On

438,679

Kilowatt-hour Sales

following basis:

Federal

1956

Electric Customers

re¬

Speech

progress,

years

rate

the Company's construction

1957-1961 is anticipated at $193

of three quarters

of

a

million dollars

higher than for the 1945-1956 period.

i

PENNSYLVANIA

■

POWER &

Corp.

is conducting a securities business
from offices in the Empire State

brought about astonishing transition from PP&L, 1945 to

en¬

Dean

Bertner Bros. Open

(Special to The Financial Chronicle)

PP&L's business in 1956,
new

with

Witter & Co.

states¬

11-11-54.

of

T1 Price and James E. Ryan have
formed Price, Ryan & Co. with

engaging

business

City. He

Unger

staff

(Special to The Financial Chronicle)

S. Frohlich Opens

offices

M.

the

Form Price, Ryan Co.
j

securities

to

previously

was

with First Investors Corporation.

a

Neb.—Leo

added

Wachob-Bender Corporation, 3624
Farnam Street.

business from offices at 432 Pros¬

pect

been

ERA OF RECORD PROGRESS
•

on

(Special to The Financial Chronicle)

from the broad

Representative Sterling Cole
"Times"

be

Wachob-Bender Adds

H. J. Coyne Opens

in

manship prevails, and whether we
as
vitally interested citizens who

-—New

will

New York 5, N. Y.

engaging in

or

whether

on

municipal bond men
to the stinging barb

240 West End

sound long-range policies?

depends

Bank;

June 13 at Eastman Dillon, Union
Securities & Co., 15 Broad Street,

Janet Behrens is

with L. D. Sherman & Co.

It

Manhattan

of satire.

independently arrived at by
bi-partisan Hoover Commis¬

sion

Chase

publication of the annual lampoon
of the municipal bond business —■
The Daily Bond Crier, wherein

are

York, and offices in other
key cities, by a direct wire system.

and

pos¬

water

9-13-54.

Policy

of

Angeles of¬

New York

"That in participating in water
resources and power development,

Committee

Resources

gold, of Chas. E. Weigold .& Co.;

Vice-President, John W. deMilhau,

connected with the home office in

^

the Federal agencies should main¬
tain relations with the States on

arriving

Water

Los

And at another time he stated:

1 Letter
to
Secretary of the Interior
McKay
in
"Water
Resources
Policy"—Report by President's Advisory
on

The

policies put forth by the President
the

the 1957-58 year:

President, Charles E. Wei-

partnership

own

Douglas

12-22-55.

Coast.

Federal

shoulder

or

to

that

cession of

within their boundaries."

government

For

"The Federal Government should

is

local

West

of equality in this regard.
Consequently, there must either

that

develop

should

They

cers for

The President also stated:

waiving

Government.

ratify the following slate of offi¬

basis

come

at
to

Harrington will be located Secretary, Henry Milner, R. S.
in
the Los Angeles office, 3115 Dickson & Co., and for
Treasurer,
Wilshire Boulevard, and will con-- Robert R. Krumm, of W. H. Mor¬
duct a fully integrated dealer and ton & Co.
underwriting
operation1 on
the
A highlight of the day will be

sev¬

cans,

What will

meeting
expected

are

securities business from offices at

they need for the next

equitably." v:

business

members

Mr.

In the meantime,
the citizens of that region will not
be
deprived
of
the
additional

the Tennessee

Anniversary Outing.

annual

which

prayerful study.

monopoly—so all would be well."

sponsibility always starts a deadly
cycle.
Yet, there are some who
contend that the development and
distribution of hydroelectric power

argue that to

and

of

Arvnual

Fulkerson, Jr., of the

monopoly.
But, of
they also see themselves as

the

Federal

proj¬

Club

its

Bankers Trust Co., retiring Presi¬
dent of the Club, will
preside at

New

a

earnest

Neal

power

centralization of authority and re¬

exclusively the responsibility of

W.

the

fice and other western offices

deihands

hold

Co., is general Chairman

of the Silver

was

should become part of a vast na¬
tional plan. If this is to be national
that

will

State, but urge upon us all a
gigantic, overwhelming, Nation¬

transportation.

the

— implying
a purpose of
continuing this process indefinite¬
ly
in
the
future—is
therefore
wholly
indefensible unless it

leader¬

(before the last

sible, local agencies should be

said:2

"It

present

posed to such malignant growth of
bureaucracy.

course,

"That

Federal

at

such a conversion of local we would have to
regions
into
Federal
satellites for
a
gigantic power develop¬
poses a threat deadly to our libeiv ment to cover the entire nation

ington—and the
ship in Congress

Loeb &

previously
connected with the Municipal De¬
partment of Shearson, Hammill &
Co. Now York City, and prior
thereto, operated his own firm of
Gregory Harrington & Co. in the
municipal business.

a

Federal intervention becomes

and power:

resources

project for

plants

region, local enter¬ be some re-examination of any
prise becomes increasingly intimi¬ plans which would call for the
dated
and
discouraged,
even Federal Government to supply all
though the needs for energy con¬ the additional power capacity that
tinue to grow.
Thus still more might be needed in the future in

"These

why

reason

Federal

this

the

tnat

new

expense

ect

"Parenthetically, may I remark
that a region which lets itself be¬

ties. The Administration in Wash¬
r

believe

building

essary,

fare."
On

■

in general, disapprove of at¬
tempting to place all regions on a

optimum

national

systems."

power

Harrington

policy, it is most certainly

The President has said:3

come

"I

:

for

Mr.

leads by

power

York

Day Friday June 14 at the
Westchester Country Club,
Rye,
Y., commemorating the 25th
anniversary of the Club's found¬
ing. John C. Fitterer, Jr., of Kuhn,

and provide for the' Division of that firm.

President said:5

*

New

Outing

Bond

Field

pal Department of the West Coast

eral years. ...
"I cannot believe

should be de¬

their

assure

the

dams

"That if such capital be not

available,

of

^ Respecting the further building
of steam plants by the
TVA, the

Federal

•

(b)

its

whole

and their maximum contribu¬
to

the

v

or

gress—which Congress represents
not
that
region alone but the

part

political

recommended

resources

veloped to

in

Government.

expands in

tion

*

remain

the

To Hold

Municipal

N.

building

Government

power

his

on
non-

Commission

"Water

use

should

The

ob¬

With Eastman Dillon

national funds provided by a Con¬

that:
:

management of the

1

Gregory Harrington has joined
Eastman Dillon, Union Securities
& Co. as Manager of the Munici¬

to

time

decisions in the equitable interest
of all the people.
The

the

'

/

clearly

from

likewise to establish

•

but

protect the Federal interest."

Views Parallel the

;

neighboring

authorities),

-

than

expedient decision must be made.

plants

Municipal Bond Club

groups,

Gregory Harrington

and

inter-connection with the grids of

resources

rather

plants,

power

cease

{pressure

handouts, dnd the

-

equation of their

and

urgent

water

the

of

jectively and in the best interest
of all the people.

embarkation into
utility field, the Commission

agencies

the*

to deal with this issue

gress

recommended:

offered the opportunity of provide
the capital for the electrical com¬

offset
seekers

consequent

the

following recommendations:

have to pay the huge bill,
give the kind of support that

demagogues, and allow the Con¬

gram

dispose of the power through
problems resoeeting- their own
systems
(they being
that; beset our subject to regulation of rates
by
Nation, in which the right decision Federal and State '
many

,

Referring to the extensive pro¬
of the TVA to build large

—

functions

-

activity."

sources

cies (involved.

arrival

the

for

gen¬

an

the

will

methods

have applied for licenses to

is

com¬

some

will

will

practices.

private enter¬ hydroelectric plants."
In respect to the power
inequitable use of
compo¬
the
taxpayers' money.
of
new
There is" nent
multiple - purpose
lack of consistent policy as be¬
projects, the Commission
made
replacement

economic

needs, and
meeting
such

the

com¬

responsibility,
between agencies,

petition

established

group

areas

there

overlapping

petition with—and in

special

a

belonging to $11 the na¬

eration without the threat of Fed- ' j "The Federal Government should
recognize
the
common
interest
eral power control.
During this of the Nation, the
States, localities
brief period numerous local
pub¬ and private citizens in water re¬
lic agencies and private investors

number of agencies of the Federal

Government

asset

^ tion. Last year, for example, State
the" and local governments were in¬

from

with

capacity, is to give
an

43

LIGHT COMPANY

Commercial and Financial Chronicle

The

and
credit
unions.
should be some cur¬

associations

Continued'from page 18

also

There

,'•*$»<#

;•«

*f •»

«

i ii •Hi* ^1

.

<*

4-«.

t.

,

of gov¬
Political¬

tailment of the activities
ernment credit agencies.

Reshaping Qui Financial System

difficult to accomplish.

City banks would gain
that the liemore from the lower requirement
should have ample
against demand deposits; country
authority to change the reserve
banks would benefit more from
percentage against demand depos¬
the
lower
requirement
against
its to deal with a possible emer¬
time deposits and from counting
gency situation. However, the ex¬
vault cash as reserve.
isting range of such authority, en¬
Another virtue of the plan is its
acted 2Z years ago, is much broad¬
er
than can
be justified under simplicity. It is easy to understand
and would be easy to administer.
present-day conditions. A change
It does not involve any break with
as
small as one percentage point
in

Board'

would

requirements

reserve
mean

now

of about $L

change

a

Lee¬
percentage points in
direction should be ample
in required reserves.

billion

of two

way

cither

to cope with any emergency that
might arise.
•
^

Eventually reduce the re¬
serve
requirement for time de¬
posits to 2%. From a monetary
(4)

against the

discriminates

ly

thrift institutions.

in

would

presumably .be ac¬
complished
gradually,
counting
higher percentages of vault cash
t*s
reserves in successive stages.
gram,

change would
in-and-out ship¬

this

Incidentally,

eliminate many
of

ments

to

currency

to

now

of our financial system
particularly deserve atten¬
if
an
impartial monetary

commission

estab¬

be

to

were

lished, there

liter¬
ally hundreds of questions that
might be placed on its agenda. Out
of this welter, what might actually
emerge
in the way of recom¬
mendations

of

are,

and

course,

concrete

accom¬

policy but the rigidity of the in¬
terest rates on FHA and VA mort¬
which has made them alter¬

two

are

broad

in

areas

Shaw,

these

freeing

.urge

to

encourage

flow

of

credit

housing.

It

estab¬

might also recommend the
of

even

more

a

into

prudent terms

more

deal

to

be

with

this

piecemeal fashion

situation

in

for example,

—

structure

jectives

that

twin

are

should

In

It will
ber

Plan

into

of years to put the

The

nancial

the

lending

should

have. full

being

ord

and there were more
established last year

high,
firms

new

rate of failures is

date

long

have

unlimited;

ous

at

such

extension

sirable.

The

serve

to

be

of

such

would

program

nancial

proves

condition

the

reductions

By

giving

the

Reserve

a

fi¬
re¬

Board

this

complete discretion, the implementation of the plan should

f not interfere in
; monetary policy.

any

to

speed

them

sales

ties.

of

There

monetary

government
ig

no

Bundle

of

that

its.

distributed
the

almost

various

-

would

of




should

long.

does

be

Also,

remem¬

money and
not
appear

capital
to be

decades,

numerous

these

"iappraisals

clearly

of housing
valid, then

devices should be

new

no

used to shelter these sectors from

effects

the

of

In

straint.

general

fact,

even

credit re¬
if it could

have
been affected more than others, it
would still be hard to make a good
ease for
the adoption of shelter¬
ing devices. The sheltering of par¬
be

ticular

these

that

proven

users

areas

of credit would

ob¬

against all
would bring about
more sheltering and

viously

discriminate

others.

This
for

demands

tend to undermine the whole

ciple of credit restraint.

prin¬

<

As a matter of

that

we

already gone

have

in

too far

that the commission would recom¬
mend

some means

of providing for

better coordination of the
of these

agencies with Federal Re¬

Regulation of Nonbank

More

Credit?

What about private credit agen¬

grown

banking,

whereas

respect to

some

area

policies

of

with

other credit agen¬

_

Thorough study of these incon¬

sistencies might well lead to some
corrective action, probably in the

supervision

of

more

savings

adequate
and loan

the great bulk of

of

of

flow

credit.

More¬

credit policies of

the

over,

intermediaries

these

many

are

fected

af¬

only very slowly and un¬
certainly, if at all, by Federal
Reserve policy. What, if anything,
should
tion?

safeguarding the. pub'--

tive standards and

total

the

These have

enormously in recent years

and now control

'

direction of

policies

policy—not the reverse.

serve

cies other than banks?

In general,
and close regula¬

-be ^lic by establishing more conserva¬

member

-

and small business are

chartering,

cies, both private and public, have
been exactly the opposite.

equally among

classes

or

tion have prevailed in the

Virtues

benefits

there
advantages

VV Ifi

-

-

be

about this

selective

are

possibilities: (1)
controls; and (2)
regulation, such as

credit

forms

of

of this decade is how we can

with

prosperity

in¬

without

flation/and this cannot be solved

by credit policy alone.
A mone¬
tary
commission would render
real service if it would focus pub¬

Getting

down

to

cases,

just

whom? The
largest of the nonbank intermedi¬
aries, the insurance companies,
have
been
behaving themselves

of this vital

problem.

what would you do to

like

It is hard to see much

nuns.

excuse

more

subjecting them to
regulation, what form it
for

take, or what it could accompiisn.
As for sales finance companies,
would

might con¬
with a recom¬

commission

study

a

up

them

divorcing

for

If

from'manufacturing concerns.

Problem of Public Tolerance

The

is axiomatic that credit con¬

It

trol

survive and be effective

can

only if it is tolerated by the pub¬
lic. In recent years, this problem
has assumed completely new di¬
mensions because so many mil¬

people who know so little

lions of

monetary policy have now
become users ofr .credit,
Some

about

politicians "and
bilities

groups

pressure

have been quick to see

of making hay

the possi¬
for them¬

by attacking so-called tight

so,
it is anyone's guess as- to
whether this might actually come

selves

about.

Today, in fact, the danger exists
that monetary policy may become

'•

■

instituting variable re¬
for certain

for

As

requirements

serve

of nonbanks, this seems
very unlikely.
Many believe we
should use this device less rather
types

than

money.

permanent partisan issue in
politics. This could lead
the destruction of this essen¬

a

American
to

tial bulwark against

more.

These

conclusion

to the net
the area of

add up

that

in

management, an impartial
commission
would
recommend

continuation of the present

policy

placing primary emphasis on
overall,
quantitative
measures,
rather than on sheltering devices
of

other types of

on

Limitations

regulation.

of Monetary

same

modern

under

conditions.

Al¬

though monetary policy is indis¬
pensable, we could get into seri¬
ous
trouble by relying on it too
heavily.For

one thing, since the mone¬
authorities are not wizards,
they are bound to make mistakes.
They must continually decide not
merely which way to lean but
just how hard to lean under con¬
stantly changing conditions. Since
this inevitably involves an ele¬
ment of forecasting and since our
measurements of the effects of

tary

credit
cannot

policy are so inexact, we
expect the Federal Re¬
to be any¬

of

bors

of

be enhanced. /

In

concluding,

may

even¬

tually be influenced by monetary
policy, the time lags involved are
a serious matter. Even if the Fed¬

*'*

let

empha¬

me

size that here is obviously a task
that
a

we

cannot afford to leave to

monetary commission, especially
that does not exist.
Bankers

one

and teachers of money and

bank¬

ing, ajong with Federal Reserve
officials,
clearly
have
unique
responsibilities to contribute to a
better understanding of monetary

policy on the part of the public.
As might be true of a monetary
commission, this may be the most
significant
make

can

of

contribution
to

that

we
welfare

future

the

American people.

the

With S. E. Dunn Co.
CSpecial to The Financial Chronicle)

DETROIT, Mich. — Marguerite
K. Dunn is now with S. E. Dunn
&

Company, 500 Griswold Street,

Form Lobo & Co.

recent

credit

potential usefulness

its

widened,
can

Lobo

been

nonbank

respect

portance of tolerating its disci¬
plines. If the limits of public tol¬
erance to monetary policy can be

thing like 1,000%.
In

a

hoped

educate the public
to the functioning
monetary policy and the im¬

with

serve's batting average

has

inflation.

that the la¬
monetary commission

be

to

would help to

Policy

time, however, it
is to be hoped that the commis¬
sion would emphasize the limita¬
tions of Federal Reserve policy
the

At

is

It

items

credit

most

two

not happen.

lic attention on the basic elements

years,
this problem
compounded by the in¬
creased
importance of nonbank
situa¬ "credit agencies.
Granting that

-y

-There

new

done

coming that is not likely

a

mendation

Less?

or

financial institutions.

That, then, in brief, is the ABA
reserves plan
and the basic rea¬

is

fact,

Sheltering

strict standards

the

soning behind it.. From a practical
standpoint, an important feature
'•

some

inde¬

the

The number one economic prob¬

live

come.

ceivably come

t

v .v

More

regulation, and
supervision of different types of

; years should be any greater with
the plan than without it.
A

de¬

there is
flow of

the

In

term

it

course,

the

'why

over

inability to obtain the
amount of credit they really de¬

inconsistencies have developed in
public policies having to do with

securi¬

reason

expansion

from

serve.

imply
to

clude

short

Over recent

desired, they can absorb released
reserves by means of
open mar¬
ket

rela¬

strong enough to lead to much in
the way of positive action.

When

up.

that

to be

seem

markets

At times, the
Reserve authorities may decide
tg
defer reserve
reductions; at other

times,

However,

separating the

with

way

objective study would show that
suffering

granting special privi¬
bered that bank credit is already leges to certain groups of bor¬
subject to a considerable .degree rowers, chiefly through govern¬
ment agencies.
It is no secret that
of control by the Federal Reserve.
the credit policies of various Fed¬
Therefore, despite the nostalgia
that some of us may feel at times eral agencies have at times been
for the classic concepts of com¬ directly in conflict with Federal
Reserve policy.
It is to be hoped
mercial
banking,
the
case
for

than abnormal actions.

;

doubtless

It

or semi-independence,
Federal Reserve System.

it will

So.

lem

yet to be created, they

has

aries

fact, an unbiased "or
commission would probably con¬

of

normal rather

as

credit

study.

jeopardize

to

as

the

that

state

equivalent of the Federal Re¬
serve Act for nonbank intermedi¬

mand,

de¬

community to regard

the

tion

When these

dramatically

authors

1948. The

low; and in most

as

control/' Now tins
titillating stuff, to be sure; but
is there actually enough to it to
lead to
new
forms of control?

permitting bank credit to re¬
spond to changes in market de¬

au¬

adoption

Made?

in

by a
time if in its judgment

a

Be

matter of

proportions.

would

thority to extend this date
year

Might

bank credit into the capital mar¬
ket has been approaching danger¬

five

Board

of trouble.

source

little .evidence

with provision that the Re¬

serve

whole

term

serves

with

of

possible

as

tionship between short term and

steps. It believes, how¬
ever, that it would be well to set
target

they do for
Specifically,

as

sometimes cited

are

Changes

This

mediate

tentative

a

What

years,

much

as

term loans

respect to the timing of the inter¬

a

restricted

capital purposes.

Board

discretion

be

distinct

the

from

banks

control

serious recession.

a

by and largo, small business has
been doing right well. The num¬
ber of small concerns is at a rec¬

been

It

"financial

bring on

might also arouse so much opposi¬

Personally I doubt it.

com¬

mercial

recom¬

Reserve

institutions.

should
'sort

they

that

and

economy,

therefore be subject to some

period of credit restriction.
Available evidence suggest that,
this

some changes
the functions

in

made

has

a num¬

Commission

that

be

monetary restraint might have to

degree, that the opera¬ be pushed to a dangerous ex¬
tions of these agencies may have; treme, much tighter than at pres¬
unstabilizing
effects
upon
the ent. Such a drastic policy might

of

of these areas, one

suggested, for instance, that

ob¬

plan into

mends

first

dream

a

pendence,

credit

of

In

in

only

is

performed by various types of fi¬

Effect

.effect.

field

question is whether

be

obviously require

the

intermediaries differ from money

finance it.

to

world, yes; in the real world, no.
a strong wage-price spiral,

from monetary

few small businesses are

the

should

pursued
simultaneously. The Commission's
plan
is designed to
accomplish
both.
Putting the

is

could

To halt

of

control.

simply by dealing with vault cash
alone—would seriously jeopardize
the possibility of achieving the
other parts of the plan.
Overall
reduction in reserve requirements
and thoroughgoing reform of the
reserve

other

Tne

nonbank

on

notion

Reserve

refusing to create the money

by

business?
There is real need, I think, for a
thorough study of just how small
business has been faring during
small

about

What

that

emphasized

claims

that

us

the

,

the

have

Federal

for these mortgages.

which
the
commission's
labors lines, profits appear to be excel¬
Bank loans to small con¬
might be especially fruitful. One lent.
these five recommendations are is the matter of
public policies cerns are at a new peak, and so
not a collection of isolated prop¬
with
respect
to
the
functions, is the amount of trade credit ex¬
ositions.
They constitute a single standards, and supervision of vari¬ tended to them by larger corpo¬
integrated program. Any attempt ous types of financial institutions. rations.
In
all
probability, an
should

tell

Re¬

of

value

/; ;■

people

needed

messiahs,

Brookings'

the

the

stop the wage-price spiral simply

ol'

and

Federal

the

;

the

that

Gurley

of

consumer's dollar has depreciated

Control?

Professors

limitation

inherent

year,
despite
serve's efforts,

of financial insti¬

types

in Wash¬

changed

ing, in particular, industrial wage
and price policies.
Over the past

Some

various

a

its influence
usually restricted to a rela-•
tively
small
fraction
of
total
spending. Its effects may there¬
fore be completely overshadowed
at times by other factors, includ¬

by 4%.

What about direct regulation

con¬

is

really needed.

New Types of

;

would

the wrong di¬
long time after pol¬

been

Another

present

at

have

we

economic ef¬

the

actions

credit policy is that

realistic standpoint,
except under

that they are

with

rates

lishment

than

dence

tutions?

other
types of investment.
An
impartial commission would in all

probability

til we

comparison

in

unattractive

not be

then

Federal Reserve Banks.
It

icy had
ington.

conditions, they will
adopted—not, at; least, un¬
have more convincing evi¬

and

attractive

nately

than in any year except

plishments?
There

in recent

years. However, the chief reason
for this is not Federal Reserve

other

some

indeed

gages

rection for

to

resort

to

with

tinue to operate in

emergency

glutted and then starved

aspects
that

from

and

turn

us

harsn

these

from

way

market for housing credit
been alternately

The
has

method of
meeting the monetary and credit
needs of our growing economy. It

Let

some

reluctant

of

their

of

fects

would seem that

it

their gears promptly

many

ness,

controls; and Congress is

them. From a

enough*, to

fortunate

be

should

authorities

Reserve

each reversal in the trend of busi¬

stand-by basis, over

to these

effects?

would provide the best

tion.

(5) Count vault cash as reserve.
This, like other parts of the pro¬

«

Thursday, June 13, 1957

.

reverse

authorizing
especially on

plainly

notably on

ments of the economy,

inequities in our existing set-up.
It would permit reducing the bur¬
den
of
the
present excessively
high
reserve
requirements
and

sav¬

departments
of
member
banks
in
competing with other

»

.

always

be made for

can

case

selective regulation,

housing and small business. If so,
should these sectors be sheltered

standpoint, time deposits at com¬
would add to the strength and
mercial banks are not money but
flexibility of our banking system
are in the same general category
and contribute to the effectiveness
is mutual savings bank deposits,
of
monetary
policy.
It
would
savings bonds and other forms of
therefore
be
beneficial
to
our
liquid personal savings. The pres¬
whole economy and would serve
ent
5%
requirement is unwarthe broad public interest.
ianled
from
the
standpoint
of
monetary management and clear¬ Other Areas Deserving Attention
ings

eral

requirements,

reserve

to particular types ol
financial institutions.
In academic debate, a plausible
applying

a

inconsistencies and

the

variable

instalment
Is Credit Restraint
lending
and
home
mortgage
Discriminatory?
credit.
Both types of personal
debt have skyrocketed over the
In the area of credit control, one
question is whether, under pres¬ past decade; and either or both
ent-day conditions, a policy of might, sooner or later, cause seri¬
general credit restraint bears with ous economic trouble. However,
undue severity on particular seg¬ some groups are strongly opposed

traditional banking practices.
In short, the ABA plan meets
all of the specifications. It would
eliminate

obviously be

ly, however, this will

banks.

Commission believes
serve

✓

.

(2768)

44

&

Co.

with

offices

New

York

been

has

at

City

99

to

formed

Wall

Street*

engage

in

a

securities business. Gustavo Lobe*
"Jr. and William R.

eral
a

Coles

are

genp

partners and Mario "Morrtoro

limited partner.

Number 5646

185

Volume

.

.

The Commercial and Financial Chronicle

.

(2769)

Continued

from first

the Court in the du Pont-Gen-

page

eral Motors

As

it

from

treatment

the

would have been

acquired corporation. All that regarded
is

required, if this

be

guide,

our

court in

is

is to

case

that

some

future year

some

persuaded that

a

result of the stock interest.

"Thus,

40 years after

over

the enactment of the

Act, it

now

Clayton

becomes apparent

for the first time that Section
7

has

been

sleeping giant
all along. Every corporation
which has acquired a stock in¬
terest in another corporation
after

the

Clayton

a

of

enactment

Act

in

the

1914,

and

which has had business deal¬

ings with that corporation, is
exposed, retroactively, to the
bite of the newly discovered
teeth of Section 7."

Adding to the uncertainty
that

is

thus created

practical business

for

the

as

universally

repugnant to our

constitution

(Ian They Still Do It?

will not-—if

case'

the

marked

has

most

undesirable

A
as

conse¬

Gregory Banos,
Where Is It All Leading?
Where

the

Neither

is

from

stock

all

favor

in

world

was

a

restaurant

his way of
expressing his gratitude to
States for the
opportunities he
associated press

appearing in the New York "Times."
We

wonder

sort of

in how
many other countries this
thing could have happened very often dur¬

ing the past half-century.
We also wonder how often such

a
thing is likely
happen in this country during the next halfcentury! Or has been in process during the
past
quarter-century!

to

of

been successful and to try to

"From the

well be that another

substantially

the

case

of

effect

on

would find

of

Court

ficient to

a
majority of the
arriving at a contrary
decision, although, of course,

the

mere

fact that the Court

has

now

officially ruled in
in this instance

this

way

raises doubt
would very
drastic
eral

to whether it

as

readily make

alteration in

its

reasoning in future

any

gen¬

cases,

at least in those that come to

in

attention

its

the

early

future.

Always Troublesome
These anti-trust statutes,
ever

the

since

first

of them

went to the statute books late

in

the

19th

century,

close

or

and

in¬

sort separable relation to matters

same

interstate

tion

ly

as

merce

to

incidental to

affecting

merce.

suf¬

commerce

justify their regula¬
or

Join Allen Inv.

interstate

DENVER, Colo. — Melvin B.
Stones, William H. Legnhart and
John Gray are now affiliated with
Allen

acts may be

incidental

part of the business of

a

stock

exchange firms but the

distinction is that such inte¬
state

commerce

acts

are

only

incidental to the business of

clause (under the

cases

G. H. Thomas

referred

to)

the

stock

ex¬

change business itself would
to

commerce

tations of these statutes which
not

were

could

and

not

be

by the ablest law¬
Nor can the layman—or
that matter the lawyers

foreseen
yers.

for

incidental

be

and

incidental to it."

Meanwhile

called

gold
into

tracts

the

highest

converted

has

Court

clauses
mere

the

in

so-

of these decisions. What

these

practical

sense

mean

in

a

Halsey,

Stuart

scraps

IMPOSSIBLE ONLY A FEW YEARS AGO...!

$19,000,000 of Metropolitan
Co. first mortgage bonds,
4%% series due June 1, 1987 at
101.50%
and
accrued interest.
Award of the bonds was won by
the underwriters at competitive
sale June 10
Net

bonds

the

on

a

bid of 100.57%.

proceeds from the
will

used

be

sale of
by

the

for its 1957 construction
program and to repay short-term
company

bank loans.

Metropolitan Edison Co. renders
service to all or portions

ance

business,

of four cities, 90

boroughs and 154
townships in eastern and central
Pennsylvania. The company also
supplies steam for heating to por¬
tions
of York
and
Easton, Pa.

Metropolitan Edison is a subsidi¬
ary
of General Public Utilities
Corp.
The

will

be

redeemable

at

regular redemption prices rang¬
ing from 106.00% to par, and at

types

Thirties. Judicial acceptance
of law after law

it

is

which earlier this




as

these before us,

difficult to believe that
most

recent

decision

of

zooming 250 miles into

than

speed of sound;

the

only
unit

case.

H. Munro Gere

Opens

a

a

few

years

So, too,

ago.

space; man

was

a new

over

thought impossible

were

electric generating

an

operating above 3206 psi (pounds

In March, 1957, at the AGE

flying faster

submarine that travels

50,000 miles without refueling—all

interest in each

per square

inch).

System's Philo Plant in Ohio,

electric generating unit operating at 4500

psi not only

SYRACUSE, N. Y. — H. Munro
Gere is engaging in a securities

became

business from offices at 220 Par¬

producer.

With this and resulting technological

the

System will continue to stimulate the dynamic

sons

Drive.

David Handel Opens
BROOKLYN,

N.

Handel has opened

Y. — David
offices at 520

Newport Street to conduct

such facts

A rocket

special redemption prices ranging
from 101.50% to par, plus accrued

and the Lord

knows how many other

*

bonds

rities business.

middle

Foulois Drive.

Edison

of

paper.

particular point in time of business always heretofore
apparently remain a
regarded as purely local in
mystery in a very substantial character. And Congress has
part. The many consent de¬ enacted law after law regulat¬
crees
that fill the record of
ing and controlling various
such
cases
do
nothing
to
phases of business operations
clarify the situation, either.
in a degree and in a way quite
But it is not only the anti¬
repugnant to the traditions of
trust laws which have given
this free country of ours. With
torment to prac¬

rities business from offices at 262

fered

at any

this sort of

George

Co. Inc. on
which of¬

&

will

tical business since the

—

ALL THESE ACHIEVEMENTS WERE THOUGHT

con¬

It has broadened the
specializing in this branch of
scope of interstate commerce
the law—always find a con¬
to
include
not
only such
tinuing thread of reasoning
things as security trading and
running through a great many distribution, but the insur¬
laws

LIMESTONE, Maine

H. Thomas is engaging in a secu¬

electric

have have

forward with interpre¬

Opens

(Special to The Financial Chronicle)

June 11 headed a group

above

regularly been a source of un¬ closely related to the further¬
certainty and anxiety to the ance and development of in¬
business community. Time terstate
commerce.
This
is
and time and time again the
quite different from fnerely
highest Court of the land has having some act in interstate
come

Company, Mile

Offers Met. Ed. Bonds

the stock

exchange firms. In
order to bring the stock ex¬
change firms under Federal
control through the commerce

Investment

High Center.

(Special to The Financial Chronicle)

Halsey, Stuart Group

com¬
com¬

Co.

(Special to The Financial Chronicle)

able consequences.

direct¬

Some interstate

the United

h^d enjoyed."—An
dispatch from Syracuse, New York

exchanges and the
stock exchange systems which historically
firms were not subject to the have not been able to come
near
commerce clause of the con¬
competing with us.
Forms Staaten Investors
stitution. Yet such is the fact. Along with this new order of
STATEN ISLAND, N. Y.—Irv¬
It wa$ no longer ago than things comes an increasing
ing Zahler is engaging in a secu¬
depend upon rities business from offices at 291
1933 that a group of leading disposition to
lawyers expressed the follow¬ government for much that the Alter Avenue under the firm
individual should provide for name of Staaten Investors Co.
ing opinion after the most
himself and a marked tend¬
careful study of the facts and
ency to attack those who have
With F. I. duPont
of court decisions:

is the

and former

University, said.

analysis of the take
away from them that
CHICAGO, 111.—Peter H. Cumfact that the majority of this businesses of stock exchanges
mings, Jr. has become associated
which they have acquired.
decision is a minority of the and
stock
with Francis I. du Pont &
exchange firms
Co.,
Only in this setting is it 208 South La Salle
full Court—since three mem¬ heretofore given, they would
Street, as a
possible to understand this registered representative. He was
bers of the tribunal took no appear to be primarily local
latest decision of the Supreme previously with Bache & Co. •:
part in the decision. It could in character and to have no
Court or to appraise its prob¬
man

owner

Mr. Banos, who left school while
in his native
Greece to support his widowed
mother, said it was

of

business

forced to leave school

Tolley, chancellor

of the

the

the

who

hotel proprietor, has
signed an agreement pledging
payment of the fund, William F.

this leading?
leading political
parties nor the great rank and
The concept of interstate com¬ file of the people appear to
have much idea or to give the
merce has been broadened to
the point where it is difficult matter very careful thought.
to find much of anything that After all, we made enormous
is not now to be included in strides through a century and
it. So far has the Court come a half under a system really
own.
That
that it is difficult to realize our
system is
that less than 25 years ago it steadily and, at times we are
was taken for granted, for ex¬
afraid, rather rapidly vanish¬
ample, that the operations of ing from this country if not
away from
the traditions of this country.

man

a

the

thought

Syracuse

youngster because of financial problems has
established a $1,000,000
scholarship fund for needv
students at Syracuse
University.

quences.

years since the New Deal got
into
full swing and turned

be
'reasonable popular

probability' then exists that
an
advantage over competi¬
tors in a narrowly construed
market may be obtained as a

or

principles it embod¬
ies are upheld, in future deci¬
sions—have far-reaching and

We It
See

erential

45

a secu¬

Mutual Fund Service
UNIONDALE,

N.~ Y.

—

Arthur

Deutsch has formed Mutual Fund

Advisory Service with offices at
926 Ditmas Avenue to engage in
a

securities business.

a

reality but also the world's most efficient electric

AGE

growth of the

are^

it

advances

*

cost electric power.

AMERICAN

3
f

through the medium of low

serves

GAS AND

ELECTRIC SYSTEM

Appalachian Electric Power Company Ohi<f Power Company
Indiana & Michigan Electric Company Kingsport Utilities, Inc.
Kentucky Power Company
Wheeling Electric Company
Serving 2321 communities in these great stales:
Michigan • Indiana • Ohio • West Virginia • Virginia
Kentucky

•

'

{

'

*

\

Tennessee

Singer & Freidlander
Freidlander, Inc. is„
securities business
offices at 52 Wall Street,

Singer &
conducting
from

a

New York City.

For

a

copy

of

our

Vice President,

1956 Annual Report write to Mr. W. J. Rose,

Dept. D,

30 Church

American Gas and Electric Company,

Street, New York 8, N. Y.

/

Chronicle

The Commercial and Financial

.

.

Thursday, June 13, 1957

.

(2770)

46

of substandard build¬

of millions

18

Continued from page

ings, many of them unfit to serve
If

What's Ahead ioi Housing:

Surplus

attrition

current

quarter is a

a

basic de¬
mand (and I suspect it is on the
low
side), then very obviously
something
is
wrong
with
the
for

figure

from

away

is

of

result

natural

Second, there is
Congressional

some

needed

badly

in

likely to be
action which

will have the effect of stimulating

busi¬

by

for funds

construct

to

ness
new

economy. The
include an enor¬

political

causes

demand

mous

the

partly

and

causes

slight im¬
FHA ap¬

some

reported

plications.

natural

of

result

the

partly

homebuilding industry because we

although there is
provement

economic

though, that the haven't recently been building and
of the housing selling that many houses. There

I have no doubt,

in age groups that are

takes place

Shortage?

or

million and

a

reasonable

it

taking

shortage of housing money

The

pigsties.

as

then

and
them.

plant and equipment, and a
demand by all levels .of

similar

home-building,

but

have learned from

I

thing

one

some

six years

spent in Washington is that you're

time if

wasting your
forecast

far

too

in

try to
just

you

advance

too old to be
new what will come out of Congress
factors
in household formation. supply is high; it probably would is considerable slippage between government for funds for
facilities
such V as
schools
and in the way of a bill. I don't know
Nonetheless,
population
growth be no exaggeration to say that basic demand and what an econ¬
never
before in history has the omist might call effective demand. highways, many of them also bad¬ what Congress will do, but I think
does eventually result in a corre¬
volume of housing disappearance How come?
they will do something.
;
ly needed. •'
sponding need for housing, and a
The important thing, however,
been greater than it is right now.
I think there are two main rea¬
On the side of political economy,
large part of this need shows up
And with the new highway pro¬ sons for this slippage, both of we have two things: first, the fail¬ is that nothing can contain, for
right away. And in terms of abso¬
the enormous pressure
lute numbers,
our population gram just getting underway, the thern with dollar signs attached. ure, for political reasons, to let long,
either too young or

,

'

volume is likely to go up.

has never been greater
Now, let's try to attach a few
right now.
The total demand for housing, figures to these basic demand fac¬
tors. First, how many houses are
and the demand for new housing,
especially, are influenced not only disappearing? I've just said that
growth

the

Housing Price Inflation

than it is

the number of people, but
incomes.
As standards

by

their

there

by

absolutely

are

For

of figures.
standard

the
about

that

was

guess

annual

no

years,

many

in the present.
Leaving aside trailers and a few
local house-moving jobs, the mi¬

ris¬ competition with other rates; and

First, there's the matter of

second, the policy of tight money
as
a
device to control inflation

ing costs have inflated somewhat
By building costs, I mean
the whole collection of costs that

causes.

faster.

restless; and the numbers of peo¬

have

moving

been
right now.

never

greater than they are

Demand Factors
Here are three

may

well be 300,000

to

be

prime factors in

seem

going up in
partly by general

continuously

price,

boosted

inflation of the economy and part¬

ly

what

by

terized

only be charac¬
persistent housing

can
a

as

shortage.

the

come

living values that families
to

expect in newer housing.

Therefore,
ciation, in
number
from

have a true depre¬
real terms. A certain

our

houses

removed

are

total

housing inventory
for these reasons.

substantial

number

inventory

a

a

units

We are
in household

year.

a

low point

formation, and the prospect is for
larger increases from here on out.
Moreover,

families

cities,

and

waves
a

higher than the increase

in total

households.

and

Sees Million and Quarter Demand
If

we

figures

take

for

this

even

There's

all.

isn't

one

for higher price tags,

reason

that's the .tendency to attach
and

more

equipment to the

more

houses, and also to the mortgage
and the price tag.
A bare-bones
house can
be
sold
considerably
cheaply than

more

one

with

every¬

because

men¬

isn't all. Many

800,000 as the annual
net non-farm house¬

hold

So, for all these

price
In the
home-

reasons,

tags have been going

up.

of

words

a
prominent
large segment of the
home-buying
public
has
been
priced out of the market.
!.

builder,

a

,

There's

that

doubt

no

rising

part, at least

cutting

in

home-building.

a

down

But far

more

im¬

I suspect, has
effect of tight money.

been

the

portant,

a

and

rising standards of living.
While again, there are absolutely
no figures, it would be fairly easy
to conclude

Over

market

programs

of families who

millions

to

ordi¬

narily couldn't dream of buying
house.
cism of

There has been

urban

redevelopment programs,

in connection with
or

In
a

new

in
or

industrial

commercial building projects.
particular, highway building is
principal cause, nation-wide, of

the destruction of

existing housing.

and

a

right

now

quarter

a

year.

than
the

depression and World War II,
homebuilding

industry suf¬
period of doldrums

fered

There

in which it failed

units

on

absolutely no annual
the number of housing

which

every year

from

a

utterly to keep
up with
either growing popula¬
tion or deteriorating housing. The

go
off the market
from all these causes. result is that




inflation,

a wage

distortions

inflation

monetary
in

result

will

economic

severe

including

squeeze on

profit

a

business in general and
cred¬

undue discrimination against

we

have

a

backlog

effective

and

is

demand

due

to

high price tags and lack of mort¬
gage

matter of policy,
seem
to think
that the advantages of spreading
as a

people

In recent

effects

the

months,
of

a

have

we

reversal

ernment-insurance

of

seen

gov¬

It's
policies with respect
housing remain much the same,
programs.

true that the
to

but for various reasons,

to

a

Therefore,

reasonable

a

man

building housing.
Any good hypothesis should

be

subject to test, and there's a sim¬
ple proof for this particular
pudding.
* v
'
-J
If we are underbuilding, vacant

we

have

mortgage

buying public. Hav¬

now seen

of

because
funds.

that
of

housing should be getting scarce.

lack

them subtracted
of

And I'm very

you

thing

going

Just recently, the
Bureau reported that in

Well,

it

investment

much afraid

just can't do
and make it
somewhat

this sort
stick.
It

like

giving

would

be

women

the vote, as we did in 1920,

give.

to

'

There is no use just sitting back

saying that there's a shortage
of home-buyers. There's a surplus

and

them, for housing in the right
and with the right fi¬

of

brackets

They've

nancing.
in

it again. ■;

Closing

us

any

■

.

this

fact

and

to
good,

may

if I

For instance,

harm.

some

h

Banking

eyes

our

do

won't

the

in

;J

Socialized

of

Warns

do

been

before, and they'll be back

market

banker, I would be acutely
of the possibility
of ex¬

were a

aware

panded direct government lending

form of socialized
have said, some¬
thing is going to give before the
tremendous demand pressure; and
if something else doesn't give first,

programs

—

banking.

As

will

there

a

I

be

a

clamor

loud

for

(It's loud

direct lending.
enough, already.) '
bigger

Leaving aside politics, and stick¬

ing strictly to economics, I think
long range future of home¬
building-activity
is
extremely

the

bright. .We are at the low ebb.of
household formations, now; from
here

after

out, and especially

on

there will be substantial
growth in population, in families
and in the number of babies born.
There's no reason to assume that
of

any

the
will

factors

is.

other
be

demand

basic

any

less

strong.

of house prices to go

The tendency

beyond their market is being cor¬
rected

now,

rise

has

of

catch

Vacancy Rate Decline

)

if only because
economy

'

'

us.

As

the

while the
inflates fto

slowed

been

the

;

1

interesting sidelight, our

an

contract figures for. new manu¬
months the available facturing buildings have been de¬
v a c a n c y
rate nation-wide has clining sharply in the past several
dropped from 2.8% of all housing months. While this, in itself, isn't,
units to 2.2%.
This is a drop of a particularly pleasant prospect, it
half a
percentage point, and if does point to the possibility that
demand for investment
it doesn't sound like much, let me business
assure you
that it is tremendous. in new facilities won't be as in¬
First, keep in mind that the rate tense later this year " and next
Census

the past six

close

rock

to

be

pressure.

and any

bottom,

movement

the result of
Second, keep

can

enormous

mind

in

2-point-8, you're cutting the
ber

of

18%—in
As I

home-building
able good, if

we

That would

be

six

in

an

annual

•

in hous¬

will the upturn

When

Possibly : it

activity

come?

will

show

in the contract fig¬

for the next couple of

ing

poiht it's
some

months.
of

rate

in

more

the

up

months;

likely that it will happen

second

half

of

In

1957.

I don't see how 1958 can
avoid being better.
any case,

When you consider

million.

a

a

absorbed, net,

vacancies

competition for funds

eases.

ures

six months.

just

that

num¬

about

by

figure it, this half

250,000
half

houses

vacant

This ill wind could blow the
industry consider¬

year.

whfn you take point-5 from

that

that

during this same period, we
building new houses at a rate
around a million a year, and
still fell short by a rate of half a
million, you can come to some

Nathan Thumin Opens

were

of

startling conclusions about under¬
building. Actually, I don't think
an
exact: mathematical relation¬

ship

of

this

but the facts
Far

from

housing,
for

a

we

severe

large part of the po¬

tential home

up
behind our current
underbuilding. Something

of

rate

is

1962,

money.

might conclude that we are under¬

a

ing added millions of families to
ratg ought to be a lot higher the potential through establish¬
it is.
For 16 years, during ment of the government programs,

Paucity of Replacement Data

figures

my

attempts to treat it like

ordinary

an

means

this,

most

but

closed

This leaves aside any considera¬
of the fact that the replace¬

tion

ment

the

are

that

and

criti¬

some

money
for the
government-in¬
annual sured
programs
has
not
been
housing available except in small quanti¬
is about a million ties. In effect, the door has been

starts

true

with

dealing with

are

only

period of many years,
admittedly opened the
for new housing through
a

have

we

that the basic

line.

sometimes

record on several
belief that we

on

gone

occasions

further downward

demand for hew non-farm

is

have

is

Shortage

Money

home-ownership through the pop¬
new non-farm
housing starts each ulation
outweigh
any
possible
year.
shortcomings.

house is deliberately demolished
long before it has ended its useful
This

de¬

dammed

rest

to pay for it).

years

basic annual demand for 1,100,000

termites, to

time to

velop this latter point here, but I

.

thing from a deep-freeze to a one
month's supply of food
(and 30

FHA and VA insurance

wide

a

few.

But

this

And
more

moving

are

so that the increase in nonhouseholds is substantially

farm

housing

higher

bracket.

temporarily,

at

now

of the effects of fires, floods, hur¬
To this, we ought to add some¬
ricanes,
extra-tropical
cyclones, thing for the extra demand for
airplane crashes, earthquakes, set¬ new houses and for better houses
tling ground, avalanches, tornados, because of population movement

tion

somewhat

a

and 800,000

formation, and 300,000 as the
replacement figure, we have a

removed

are

every year

Houses

up.

prices have played

further

Houses also fall victim to

variety of plagues, and

tidal

tags

ing at somewhere between 700,000

we

of

each year

from

price

from the farms to the suburbs and

Houses
do
deteriorate, physi¬
cally; they also obsolesce in terms
of

non-monetary

don't have

I

even

housing demand: population
ment rate with horror, because it
growth, population movement, and
the upgrading of living standards, figures out at only six-tenths of
all exerting more pressure than one percent a year.
at any other time in our history.
Anywaj,
to
be
conservative,
But this isn't all. There is an¬ let's say that about 300,000 units a
other prime factor in the demand year are required for replacement
for housing, which is overlooked (there ought to be a lot more, of
often even by analysts who should course). On top of that, we need
know better: namely, replacement new housing units to take care of
of existing housing.
expanding population.
This can
Any prudent businessman pays be measured in terms of net house¬
a good deal of attention to depre¬
hold formation. Unfortunately, we
ciation.
If he doesn't, he's very don't have any annual figures on
likely to wind up working for this subject either. You may re¬
somebody else.
But in housing, call having heard such figures,
we
seem
to have developed the but believe me, they don't exist.
silly
notion
that
depreciation But according to the best esti¬
doesn't exist.
Perhaps we have mates of the Census Bureau, the
been lulled into this idea by the number of households is increas¬
fact that second-hand houses

from

stems

built
400,000 a year.
cently have been noticeably larger
First, the basic demand pressure
Ibis
seems
fantastically high, than in previous years. Partly, this
for
housing
is
enormous,
and
doesn't it? But not when you stop
may be the result of higher in¬
growing. Population growth and
to look at the proper perspective. comes and the desire for better
movement, upgrading of incomes,
If we were actually replacing units
housing; but partly, also, it comes and removal of housing from the
at 300,000 a year, it would take from
the
fact that
while tight
market could
easily support an
well over a century and a half to
money was collapsing, the lower- annual rate of
homebuilding right
replace our present housing stock income government-insured hous¬
now
of a million and a quarter
—and as you are all well aware,
ing market, conventional mort¬ units a year.
most of our housing wasn't built
gages continued to be adequately
Second, we are not building and
with the intention of 150 years
supplied — and conventional fi¬
use.
Our
prudent businessman nancing, by and large, operates in selling housing at that rate. The
slippage between basic demand
might well look on this replace¬
or

gration
of families to
newlydeveloping areas, whether they be
new regions of the country or just
new suburbs, requires new houses.
Americans have been traditionally
ple

rate

which

it-dependent industries like hous¬
ing. Now, let's recapitulate briefly
re¬ what I've been saying at length.

even

annual

government-insured

on

ing price tags. While the economy
has been steadily inflating, build¬

living rise, so does the desire for
bigger, better and newer housing. 75,000 units were lost every year. enter into the payments the buyer
Among
And the real income of the aver¬ Then, a year or so ago, the Bureau has to make on a house.
of Labor Statistics made a tenta¬ those which have shot up sharply
age
American family has never
tive guess, based on some of its are construction labor and build¬
been higher than it is right now.
Housing demand is also affected cost-of-living surveys in a few ing materials, land costs, facilities
cities, that 250,000 would be a and utilities, and the cost of fi¬
by the njiovement of people. There
are
many things
that you can't more reasonable figure. The Cen¬ nancing the whole thing, both to
sus Bureau, so far as I know, has
the builder and the purchaser.,
•
take with you into the Hereafter;
never published
anything on this
While
inflationary
pressures
housing is unique in that gen¬
but
some
officials to have been important, they aren't
erally speaking, you can't take it subject,
whom
I
have talked
think the the only factor working to push
with
you

rates

mortgages seek their own level in

sort

can

be

drawn,

do indicate this:

having

a

of

surplus

well be heading
shortage.

may

Now, what about the outlook?
The

Outlook

First, there isn't much

aging on the immediate
Our Dodge construction

the

next

West Main Street.

Jerome Wishner
NECK, N. Y.

business

from

offices

*

.

!

..

-

Opens
—

Wishner is conducting a

Jerome

securities
at 58-29

horizon." 251st Street.
contract

couple
of
months. Applications for VA loans
are in " a dismally depressed state,
for

Opens Inv. Office

FRANKFORD, N. Y. — Lillian
L. Wiltse is engaging in a securi¬
ties business from offices at 111

LITTLE
encour¬

Nathan

—

engaging in a securities
business
from offices at 133-09
Francis Lewis Boulevard.

Thumin is

.

figures haven't indicated yet that
any great upturn in starts is
in

sight

LAURELTON, N. Y.

M. B. Marshall Opens
'DALLAS, Tex.—M. B. Maxwell
is
enased
in a securities
busi-

Volume

185

Number

5646

.

.

.

The Commercial and Financial Chronicle

(2771) J47
Continued

from

19

page

•

,

_

produce approximately 256,000
short tons of metal in 1957. The

production

World

production. The copper circuit was
put in operation in January and

that

is

scheduled

for

in

production

24,000 tons of recoverable zinc and

by the end of this year. The reare large and contain 1.1%
copper and about 6% zinc.
The
annual recoverable output of the
mill
should
approximate
12,500

12,000- tons

tons of zinc.

the

lead-zinc circuit

later.

The latter at

ation will

few weeks

a

capacity

serves

oper-

produce approximately
of

recoverable

lead

annually.
trates

pletion

Shipments oficoncenprobably will await comof
the * 22-mile
railway

later this year.

^

in

Co.

continues

property and work toward
nomic: solution

of

the

metallurgy involved.

.

been reported..

an eco-

complex.

Point Mines, Ltd., property in the
Northwest Territories has contiriued, and it now appears that re-

It is under-!

are
about 100,000,000 tons
containing about 2,000,000 tons of

serves

unknown
estimated to

ago.'are

years

jea(j anci
0f

indicated, largely, within the
1,000 feet nearest the surface.

mill

at

ing

ore

the

is

expected

25,000

to

of

tons

In

shaft
mine

tion

of

and

;

.

this

will

area

become

*

.

Germany and Belgium

imported ores.
rate
of

rent

scene.

Based on the curslab-zinc
output

(which is about 21,300 short tons
a month), it seems reasonable to
assume that Belgian smelters will

mill

tons)

.

Arp«n*ina

i

_

Australia
;

r-

-y

1946

*

1956

1957

2.000

> eig'um

v

Belgian Congo

11,716

14,000

16,000

86,251
221,439

117,000
250,000

118,000

,

41,000

y 256,000
41,000

256,000

255,000

\

_____

Canada
s,

1951

85,473
87,427

—

.___

Spain,

■

Sweden,

Greenland.

some

The estimated

made

production of lead

in

Belgium in 1957 will be about
110,000 tons, virtually the same as

in

1956.

v--.y

,v

...

metal

half

over

smelted

substantial

in 1958 with

in

the

of

zinc

Europe, plus

portion

of

lead.

a

In

Germany about 70%

of the

centrates smelted

of domestic

are

185,680

218,578

continues

con¬

France

34,187

32,185

124,000

125,000

Germany (West)__

16,375

155,029

215,000

Italy

17,313

52,259

205,000
81,000
155,000
62,000

85,000
.155,000

32,000

33,000

to

be

main¬

tained at a high level at zinc-lead
mines in West Germany; and it is

anticipated that, with continuance
of substantial imports of concen¬
trates, German smelters will pro¬
duce

215,000

zinc

and

short

of

tons

slab

130,000 tons of lead in

1957.
In

France,

tons

zinc

close

production is
10,000 short

to

month, principally from the
two smelters at Auby and Viviez,
a

which

are
treating concentrates
Spain, French North Africa,

from

and
in

properties in other countries

which

cial

the

French

interest.

little

the

of

smelter

is

smelter

Zinc

New

Co.

that

Market

the

DMEA

project in Tennessee has indicated
approximately 26,000,000 tons of
zinc

ore

in four

10,000,000
bodies.

major

tons. in

areas

and

smaller

The reserve,

ore

in terms of

zinc.

At
Timberville, Va., the
Tri-State Zinc Co. expects to be¬
gin production soon, with an an¬
nual

output
of
approximately
7,000 tons of recoverable zinc. In
Tennessee

the

Flat

Gap mine of
Co., now being

developed]
producing

production,
in the

is

expected

in

1958,

to

start

a

daily

with

output of 2,000 tons.
output of the Coy mine

American

Zinc

scheduled

was

Co.

of

late

1956

but

delayed owing to floods. It is
expected
to
begin
production
shortly, with an output* of ap¬
proximately
500
tons
of
ore

was

in

day,
the

Two

which

will

Tennessee

be

treated

Mascot

company

mines

Exploration is proceeding at

mill.

that

an

intensive pace

in Tennessee and
Virginia, and additional zinc and
some
lead discoveries are being
made in

excess

of the

mining rate.

Almost every zinc-mining district
in the eastern United States is

maintaining

increasing

or

its

metal output.
In

the

Tennessee

of

for

Initial

tons of recoverable zinc.

the

central

United

States

discoveries continue to be

made,
offsetting in large measure the
already mined. Actually,

reserves

in

1956

the

zinc

mined

Upper Mississippi Valley
greater
1927.

than

in

any

in

the

area was

year

since

Although production in the

Tri-State

has declined great¬

area

be¬

ly and it is generally thought that

significant
contri¬
butions to zinc output in 1956 are

few recent discoveries have been

gan

making

the

Jefferson

New

Jersey

City mine of the
Zinc Co., with its

1,000-ton-per-day

mill,

the

and

Youngmine of the American Zinc

Co.,

which

1955 with

a

producing

began

1,000-ton-per-day

in

made, it is worth noting that since
1946, when the Bureau of Mines
calculated zinc reserves at

50,000,-

000 tons of crude ore, the district

has

mined

and

milled

Continued

po¬

55,000,000

on

page

expected

output. The bal¬
required to ful¬

needs

consumer

be

must

met

by purchases of zinc metal, chieflv
in

em¬

recent statement of

a

American

Southwest

Tennessee

of slab .zinc

ance

fill

finan¬

in

change

rate

have

Although slab-^inc
France is about

consumption

phasized by
the

of

of zinc is

source

concentrate, is 2,000,000 tons of
tons of zinc 60
%) zinc concentrate, or approx¬
concentrate; approximately 40,000
imately 1,000,000 tons of recover¬
toi^s of this will be recoverable able zinc. American
Zinc Co. has
ziric.
New Jersey's Ogdensburg,
stated further that its other re¬
N. J., property has an
anticipated serves in
eastern Tennessee are
annual capacity for 300,000 tons
of
about
the
same
magnitude,
of crude ore, indicating a
large
making a total of roughly 2,000,000
increase in

per

averaging

significance

future

a

annual output of

an

output of recoverable

Germany and Belgium together
produced

are

as

full

Australia, approximately 78,000

Greenland

its first commercial production of

double

(Estimate)
COUNTRY

and

lead-zinc

are some

World Smelter Production of Sla*» 7f«c in
1946, 1951, 1956 & 1957
:
(in short

.V"

include

United, States

Jersey Zinc Co., Friedensville,
Pa.,
property,
which
is
scheduled to begin production late

mill

deposits in Belgium, all metal produced at present is derived from

the

construe-

1,000-ton-per-day

a

smelted

eastern

duction

Although there

area,
Willroy Mines, Ltd.,
completed its Willroy mine
and is going forward with

development

being

the

New Jersey Zinc

international zinc and lead

same

has

the

played

approxi-

zinc.

of

Except for periods during World
War I and II Belgium has always
am important role in the

be treat-

containing 3.5% zinc and
The annual yield of

mill

the

in

the New

origin. Imported concentrates come
principally from Peru, Sweden,
Italy, Yugoslavia, and Spain. Pro¬

f

1.7% copper.
mate

quantity

remoteness

m-oductive

Manitouwadge

summer

The

zinc.

P

Ontario, Geco Mines, Ltd.,
has virtually completed its

which will this

twice that

over

available,

ore

Inc.,

in

output and reached
capacity in April 1956. o
The

will contribute to expanded sup¬
ply of zinc and lead. Among those

transportation facilities become

7,000,000 tons of zinc and
2 800,000 tons of
lead, plus substantial quantities of copper and
silver in the 128,000,000. tons of

3,300-ton

elsewhere

from

Zinc concentrates current¬

world.

ly

concentrates

tential

United States

In the United States many new
mines are being developed; these

property prevents immediate production, but unquestionably when

contain

In

;

-

..

The development of the Pine

-

totally

reserves,

five

in the

Snow Lake area> where ma3°r discoveries of zinc and copper have;

,

.

tonnages
of
Europe
and

zinc and lead concentrates in 1956.

At present the. New Brunswick
area

quantity
going to
But Belgian smelters have made
up this deficit by treating greater

Chisel Lake zinc property

stood that programing of production will be undertaken shortly.
,

1953, has reduced the
of Congo
concentrates
Belgium for treatment.

from

its

develop

June

is estimated at 550,?

year

of

Manitoba, Hudson
Mining & Smelting Co.* is
sinking a development shaft at its

v

to

Northern

Bay

New Brunswick Mining & Smelt-

ing

\ ^

same

000 short tons.

electrolytic zinc in
Belgian Congo, which began

the

Supply—Lead and Zinc

the

Continued. (jroivtL

m

Canada,

Belgium,
and
the
United States. Lead consumption
in

France

metal

The

also

the

exceeds

output of French

French

Japan

12,404

62,104

Mexico

46,277
2,217

64,761

19,253
33,300
1,032

25,301

32,000

32.000

Here

45,002

53,000
10,000

56,000

indus¬

lead-smelting

THE GREAT SOUTH WEST

prospect.

35,000

lead-

smelters.

Netherlands
Northern

Rhodesia

Norway
Peru

:

-

Poland

24,918"

959

62,000

62.406

125,000

Spain

19,365

23,529

172,000
25,000

170,000
26,000

U.S.S.R.

99,207

182,000

330,000

330,000

—

United

Kingdom..

United

States

Yugoslavia

73.379
-

78,100

91.000

728,251

881,633

995,000

90,000

,

1,000,000

3,495

14,576

15,000

16,000

5,359

4,660

22,000

25,000

1,534,400

2,360,000

3,082,000

3,141,000

______

♦Other

try is producing at
70,000

over

short

again,

a

rate slightly
h,

annually.

tons

changes

no

in

are

Other Countries

Smelter

output of slab zinc in
Japan has been increasing annu¬

ally for the past several
is

expected

record

of

output

and

years

establish

to

new

a

approximately

155,000 short tons in 1957. Lead
production will remain unchanged
at

r

'

*

♦Czechoslovakia, Rumania, and China.

approximately 40,000 short tons
1957. The slab-zinc production
approximates
Japanese require¬
in

need for im¬
porting pig lead to meet internal
requirements.
ments, but there is

World Smelter Production of Lead * in 1946, 1951, 1956 & 1957
■

(in short tons)

-

■'

■

The long-range zinc program of

(Estimate)
COUNTRY

1946

1951

1956

17,846

26,167

20,000

153,953

221,346

f263,000
11,000

Argentina
Australia

_

__

Austria
_

Burma

—

Canada

__

China

_

12,287

4,934
26,193

_

Belgium

—

80,271
5,474

—

22,000
260,000

12,000

113,000
16,000
148,000

162,712

165,742

_

1957

110,000
16,000
156,000

the

Cerro de Pasco Corn,

in Peru

has resulted in expanded zinc out¬

put and increased production
tentials

in

that

completion

of

po¬

country.
Recent
the Paucartambo

River hydroelectric plant will en¬
able the company to expand zinc

French

15

5,500

19,000

19,000

35,285

53,970

70,000

70,000

output at its La Oroya electro¬
lytic smelter from a current daily

24,606

31,000

30,000

rate of 120 tons to

after

■:

_

_

France

The Central and South West System

Morocco

Germany:

150 tons

day

a

has

more

than doubled in the past ten years.
The
over

1957

budget anticipates construction of

$70 million to meet continued growth.

by the end of this

East

}

__

West

30,489

j

j 18,500
-

15,729

Italy

33,000

33,000

J 83,845

128,000

130,000

43,000

45,000

zinc per year.

information,

year and there¬
increase to 240
87,000 tons of slab
On the basis of this

40,212

-

gradually

tons per

day,

10 Year

or

1956

1955

Increase

1947

Increase

'

Japan

4,444

Mexico

40,000

40,000

241,524

214,000

_

.

9,227

_

Poland
Rumania

Spain

estimated that
Peru in 1957
will be approximately 35,000 short
slab-zinc

_

15,646

40,210

Rhodesia

48,774

62,000

220,000
18,000
66,000

12,032

Northern
Peru

11,839

151.833

—

20,000
9,900

24,000

24,000

12,000

12,000

of

49,285
10,259

65,000
23,000

65,000

based

23,000

too

3,555

_

35,655

_

17,000

Sweden

12,371

Tunisia

8,265
52,910
2,800

25,250

27,000

27,000

141,500

255,000

255,000

4,583

7,000

7,000

338.094

414,628

542,000

550,000

35,935

'63,214

83,000

83,000

7,583

15,108

35,000

35,000

2,301,000

2,328,000

U.S.S.R.

<

United

Kingdom__

United

States

Yugoslavia

JOther

_

_

_

_

tons,

^Ow'oat

probably
Hungary,

from

3,000

scrap

tons.

excluded wherever possiWe
$Fraz«l,

India, Korea,

Pulp-aria,

Netherlands,




^Excludes bullion exported,

CTe-hoslovakia,

Portugal.

Greece,

Guatemala,

is

compared

with

10,000

the

smelter

output

is

Electric Plant Investment

to

($000)

($000)

524,929

10.4%

202,132

187%

1,291,000

25.1%

462,000

249%

127,799

113,762

12.3%

48,759

162%

22,511

Gross Electric Revenue
Net Income

579,292

1,615,000

Generating Capacity (Kw)

tons

in 1956. It is understood that much

19,765

13.9%

9,105

147%

($000)

be

utilization of concentrate

on

CENTRAL ADD SOUTH WEST CORPORATION

low grade to export.

Other foreign countries produc¬

ing

slab

their

zinc

and

estimated

lead and
outputs for 1957

be noted in the accompany¬
ing tables.
Based

upon

estimated

the

mine

that

Wilmington, Delaware

pig

may

domestic

1,810,000

1,165,100

it

output in

current

rate

production,
the

United

it

of

is

States

slab-zinc output will reach a new
record high of 1,000,000 short tons
in 1957. Smelter output of lead in

Central
Public

Power and

Service

Southwestern

Light Company

Company of Oklahoma

Gas

West Texas

and

Electric

Utilities

Company

Company

48

f

Financial Chronicle

The Commercial and
48

.

Thursday, June 13, 1957

.

.

(2772)

47

Supply—Lead and Zinc

conflicts

purchasing power of
by maintaining a sound

the

the dollar

responsibility

Market Committee is
responsible for all policy decisions
on
System purchases or sales of
Government
securities.
It
has

the

System to use its powers as
the nation's monetary authority to

World

final

have

for its decisions and "for

the

protect

would

Presidents of
Banks,

the

five of the Federal Reserve

incumbent upon

Reserve makes it

and

Governors

the Federal

given

has

Congress

Continued from page

Open

agencies

different

ing

resolving

basic matters involv¬

on

Government."

It is clear that the

the

of

;

-

,

:

.

independence

repeatedly laid down the basic of the Federal Reserve would be
that the develop¬ credit and banking system and,
principles that guide its actions. compromised if not destroyed un¬
underway may ap¬ at the same time, to promote high Since the end of the support pro¬ der
any
such
proposal
which
level employment and economic
original 50,000,000 tons remains.
proximate that goal.
the
Committee
has
not would force the System to share
Lead production in the central
growth. In carrying out that man¬ gram
Although
production of lead
date the
Federal Reserve must maintained any pattern of prices its responsibilities in the area of
United States remains at a rela¬
from secondary sources has been
and
yields in the Government credit and monetary management.
tively constant level, with St. excluded wherever possible in the look to the over-all credit re¬
securities market, and purchases I have tried to show in my earlier
quirements of the economy. In¬
Joseph Lead Co., operator of the
table on lead output included in
or sales of Government securities
remarks that independence of the
evitably, the policy of the System
principal mines in the Southeast this
paper, the significance of this

and most of the

tons of crude ore,

lead belt, developing
properties at a consistent rate
to maintain output at about 120,000 tons of recoverable lead annu-

would

Missouri's

*

.

>^»"*

_

*

■'

will

of raw material must not
overlooked. Here in the United

source

new

allj

appear

ment program

be

Reserve

of copper and 4,000
tons of zinc annually. But the big
development in the West, the one
30,000

tons

considerable

suggests a

that really

potential, is that of The Anaconda
Co. at Butte, Mont.
The under¬

Project,

Northwest

ground

in¬

volving sinking of the Ryan and
Missoula shafts and development

flood

for example, to the

expressed
the head

policy of the Committee to
refrain from buying rights to the
forthcoming issue.
stated

ury

at which the requirements
most
demanding sectors

stage

I have said, the Treas¬
and the Federal Reserve Sys¬
have in recent years inde¬

Now,
tem

as

the

of

numerous

Lexington and

the

years."

increased

by

75,000

(average

II

War

will continue to be im¬

riculture

the

in

market

19

plain because the rates of interest
are higher than they have paid in
many
years.
Some suggest that
the supply of money and credit be
increased to the end that their

tinuing

comparable with

those of the 1930's and 1940's. Now
I

Defending the Independence
Of the Federal Reserve System
country; they must also

ests of the

the geographical divi¬
sions of the country, for not more
than one may be selected from
represent

of the 12 Federal Reserve
districts. After serving a full 14any one

term, a member cannot be
reappointed. Thus job tenure con¬
siderations
that
might tend to
year

assuredly, it is not independent of
Government.
The
Constitution
that

directs

the

shall

Congress

monetary system—
the Congress which
has the ultimate authority. I have
heard it said that the Congress is

provide for
hence, it is

a

jealous of its prerogatives in this
believe

I

area.

that

should

it

be

judgments
on
issues of
Board policy have been deliber¬

jealous of them because those pre¬
rogatives are the companion of

ately eliminated.

that

sway

of

Board

The

serves

as

the

Governors,

Federal

the

of

core

link

the

Reserve,
between the

responsibility which the Con¬
the Congress.

stitution places upon
We may

properly conclude that

the Federal Reserve is intended to
have

independence within

System operations con¬
in the Governors, seven

than

of

Government.

bear

in

mind

for

verges

I have said, for
terms of 14 years. But, about this
core, the 12 regional Federal Re¬
appointed

men,

serve

as

Banks with

their

directors,

that

We

the

rather
should
to

serve

the

observe

Banks

state

of

first

hand

industry, trade, and

agriculture in their areas.
Thus,
while the System is independent

political and interest group
pressures,
it has the structural
of

characteristics

which

insure

its

responsiveness to the needs of the
nation whether they come to light
at

Washington

or

at

the

grass

roots.
Defines Independence
Before

going further, I should
on what I mean by in¬

Federal Re¬
I have heard both friends

dependence
serve.

of

the

and critics of the

System

Federal Reserve

because, and only because, it
permits better monetary manage¬
ment. By; its very nature, it re¬
quires the single-minded attention
of experts whose sole purpose is
to manage the money supply in
the
public
interest. ' It
cannot

in its wisdom would be
extremely
reluctant to
destroy
gress

this

independent of Government. Most

labor and materials to

It

is

to

look

are

users

of special

not the only con¬

potential

independence of

threat to the
the Federal Re¬

indirect, at times subtle,
suggestions are advanced. Every
now and then, for instance, there

serve;

proposals to circumscribe the
authority by way of a
so-called integrated economic

are

Reserve's

policy for Government determined
a proposed
"summit" agency.
suggestions ad¬

Advocates
Another

efficiency of the Federal Reserve
which

mentioned

$10,000

or

building cost

of

new

a

school

or

city hall is the. important
item, not the higher interest cost,
a

new

the

sub¬

stantial increase in building

costs

and

remember

too

that

occurred in times of an abundant

supply and ,J low interest
rales.;. The
policy of credit re¬
straint may to some seem

burden¬
some at the moment, but it is an
essential
part of our effort
to

no

Just

the

of

inflation

experienced when there

restraint.
as

monetary

and

credit

policy may not suit the
monetary preference of state and
local

monetary

matic, regardless of the economic
conditions

governments
industry,

building

or

it

the

of

Most

time.

of

have probably also heard the
idea
proposed that the Reserve
should not attempt to cope with
the threat of mild inflation, and

you

policies, in fact if not in law,
be
to
permit
or
even
underwrite
a
continuing "mild"

its

should

inflationary trend in the economy.
Now, if any of these three pro¬

posals

were

the

and

current

that

vanced

adopted, the authority
and most
the
effectiveness, of

independence,

important

Federal

the

would

Reserve

be

seriously impaired. For that reason
I
should
like
to
spend a few
moments

discussing

with

them

you.

Attacks

general interest for the

I

Bell's Proposal

Elliott

am sure

that

have all heard

we

be

ing World War II until the Accord

has

designed

that

an

it

est

groups

commerce,

The

so

with im¬
and all pres¬
coercion from special inter¬

punity disregard
sure or

environment

or

may

any

whether these be from
finance,
agriculture,

legislative

mandate

and pay

of

the

1951.

quences

unfortunate

conse¬

of other policies.

on

its

own

that

a

have

called

for

some

sort

a

pro¬

and credit would increase contin¬

a fixed rate, compounded,
without regard to the needs of the

ually at

economy.

Based

tory,
fixed

past economic his¬
inconceivable that a

our

on

is

it

increase

of

rate

national economic council. It

proposed that such a
council might be composed of the
Secretary
of the Treasury, the
Reserve

cil

Economic

of

Advisers,

and

feet without

the crutch of the Federal Reserve

other

top-ranking

economic

instance,

in

our

turnover

all

in

supply
time,
in

over

war

when

and

overexpand credit
harmful
in
postwar
years when contraction is neces¬
sary and in order.
If the fixed
rate of expansion failed to result
in the price stability envisioned,
the
issue
would, be
continually
before the Congress for consid¬
eration of future changes.
we

Opposes 3Iild
The

seven

members

of

the

Board

of

"the basic economic

Government."

directly

to

It

the

policies of the
would

President

report

who

Inflation

indirect

third

subtle

or

suggestion, the adoption of which
would threaten the independence
and

efficiency of the Federal Re¬
System, is that the mone¬

serve

tary
or

authority

underwrite

should

a

encourage

continuing •"mild"

inflationary trend in the
There

long

are

business

them

experience

good friends

say

maintain

economy.

people of substance and

of

inde¬

future

very

tion

an

of

application? It would be
impossible to observe in times of

advocate

resumed

period

a

that it should be uniform

or

who

has

of

areas

its

tion. The council would determine

mittee

use

human '.errors
,

eral Reserve's Open Market Com¬

the

of

related • to
money management.
But who is
capable of determining a "proper"
rate of expansion in the money

judgment

of

And

rate

.

eliminate

policy-makers of the Administra¬

program.

or

supply undergo sub¬
stantial changes in rather short
periods of time, and obviously
such changes modify the supply of
money and credit needed.
Those
who advocate the proposal I have
mentioned like to think that adop¬
tion
of
their
suggestion would

Fed¬

support

have" all

we

of the money

been

Board, the Chairman of the Coun^

Since that Accord, the Treasury

has stood

of

frequently been suggested

Chairman of the Federal

Market Is Independent

Open

pendent course. Composed of the

government.

If such

3%.

were

the

only

short and correct definition would

in

is

adopted, it wrould mean
the end of flexible credit policy;
the possibilities for adjusting the
money
supply
to
short-run
changes
in
the
demands
for
money and credit would be ter¬
minated.
The supply of money

posal

seen

cost

$15,000 in those past years,. I
suggest that our municipal author¬
ities take note that the increased

would

has
been
delegated by an Act of Congress to
carry out certain functions in the
public interest with regard to the
quantity, availability and cost of
credit; that it performs these vital

the
au¬

the judgment of the
authority
should
be
displaced by some rigid formula
which would make periodic addi¬
tions to the money supply auto¬

have

would

that has

System

is

that the same labor and materials

the market price for the
funds it requires.-' We know full
well from our experience follow¬

the

mentioned

thority be directed to increase the
money supply at a constant an¬
nual rate—the figure most often

proposals for the establishment of
a so-called "summit" agency. One

that

have

I

suggestion that the monetary

Foi\

Treasury to compete on an equal
basis with other users of credit

more

potential threat to the

ate.

closely

into the meaning of the
word
"independence" when ap¬
plied to monetary management. A

Quantity of Theory

Answers

money' supply would be appropri¬

is in the

worthwhile

credit

from

by

the home
finds the
and effectiveness of the monetary
Treasury paying higher rates on
authority lies with the people .new issues than it has paid for
through the same elected repre¬ many years. Yet I am sure that it
sentatives.

Suggestions

defense

of

interest groups.

We have also had

was

through

Subtle

;

The peculiar interests

bulwark

special

construct a home, when we recall

tion, functions and responsibilities
of the System-lies with the people

speak as though it were labor,




$30,000 for

we

functions
elaborate

enjoy even

But I know that we
less paying $20,000 or

recurrence

insure the continued independence

reaching out into scores of large
and small communities, the Re¬

enjoys

in years past.

which

derstanding and grasp of eco¬
nomic developments.
With roots

and

us

interest on a
home mortgage, when we remem¬
ber so well paying 4% or 4%'%
6%

avoid

their representation in
the legislative branch of Govern¬
ment;
likewise,
the
power
to

and

of

none

or

destroy or to change the organiza¬

power

staffs, add strength
breadth to the System's un¬

officers,

that

sure

am

paying 5^2%

money

System and Congress. The author¬

ity

"tell

to

Government

tant

Federal Reserve and the Treasury.

interest costs be

could be portant elements
and it balance.

tons,

Continued from page

own

1937-39) would be fully met, would surely pendently carried out their
respective
responsibilities.
This
lead mines in the United States
result in unhealthy excesses for dees
not
mean
that
either
is
produced 63% of domestic supply the economy as a whole.
without risk of serious loss of
insensible or unsympathetic to the
and scrap accounted for only 37%.
effectiveness in
operation share
problems of the other; there is
Lead
recovered from scrap in¬
Contending With Pressures
its
responsibilities
with
others
and there must be constant con¬
creased steadily from 1938 to 1947,
whose principal areas of respon¬
In times like these, some seg¬ sultation between them. There is
when it represented 57% of total
elsewhere or whose
ments of the economy are con¬ no joy in the Federal Reserve sibility lie
domestic supply, while mine out¬
actions are exposed to partisan
tinually calling upon the System System when the pursuit of mone¬
put accounted for only 43%. The
political pressure. In this sense,
and the Congress for an expansion tary and credit objectives means
latest annual figures for 1956 show
for the monetary
of
the already large supply of that the Treasury, and the rest of independence
that 60%" of the domestic supply
money and credit. Since they are us for that
matter, pay higher authority simply recognizes politi¬
was secondary lead and 40% came
cal realities. I believe that Con¬
not prepared to compete in the rates for borrowed money. And I
World

This sug¬

gests that annual output

its

fly a kite." Independence for
the monetary authority is impor¬

'

in the next five

authority

it,
of

to go

copper-zinc veins
and west of
Mountain Con
mines, will ultimately add 15,000
from mine production.
tons of ore to the daily total now
market for enough of the existing am sure that there is no joy at
In the light of existing data, credit
being processed. The first unit for
pie to have their fill, they the Treasury when Treasury fi¬
it seems reasonable to conclude are anxious to have the size of
75,000 tons is scheduled to be com¬
nancing operations create prob¬
that supplies of lead and zinc are the pie increased. But it is vital lems for the Federal
Open Market
pleted in 1961. Sinking of the Ryan
adequate to meet all foreseesable that the Federal Reserve's policy Committee. But it is highly im¬
shaft started early this year, and
needs, assuming a free flow in position be predicated on over-all portant that the independence of
raising under the site of the Mis¬
soula shaft from the Alice tunnel the normal channels of trade, such considerations and not those aris¬ the two agencies from each other
as now exist.
There is strong evi¬ ing
is well underway. It may be re¬
from
particular
economic be maintained. For the Federal
membered that F. A. Linforth of dence at this time that the world groups. Yielding to pressure for Reserve System to share responsi¬
The Anaconda Co., in addressing output of both metals will con¬
a bigger pie would spell inflationbility for Treasury decisions, or
tinue to exceed consumption dur¬ caused indigestion for the econ¬ for the Treasury to influence the
the American Zinc Institute's 34th
Annual
Meeting,
April,
1 9 5 2, ing 1957 and that the stockpiling omy at large.
determinations of the Federal Re¬
said
that
"zinc
production program of the United States
would
endanger
sound
State
and
local
governments, serve,
from the richest hill on earth Government and the barter trans¬ for
example, when they seek to monetary and credit management
could be practically doubled with¬ actions of the Department of Ag¬ borrow in today's market, com¬ and the independence Of both the
of

north of the Anselmo

some¬

thing more than, as one critic has

of

an

credit,

monetary authority means

Moreover, during periods
Treasury financing it is the

policy.

refined

source of lead than has
Nation's lead mines.
Before

the

effectuate the

objectives of monetary and credit

interests.

estimated 60% of the
particular lines of activity or areas
soft lead consumed of the
country, its actions may
annually is recovered sooner or seem inappropriate. Independence,
later in
the form of secondary after
all, is not synonymous with
metal produced from scrap. Since
indifference.
Yet, expansion
of
1946 scrap metal has been a more
States

total

States
developments will also lead to
new
sources of zinc
output. In
Arizona, Pima Mining Co. is con¬
prolific
structing a new plant to produce
United

western

the

In

have been solely to

with indi¬
The
Federal
recognizee that for
conflict

times

at

vidual

"controlled"

2%

that

—

a

per

some

of mine

year.

—

infla¬

They

consistently ris¬

ing price level is the best

guar-

Volume

185

Number

5646

.

.

The Commercial and
Financial Chronicle

.

(2773)
antee

against
pression.
Now

there

recession

and

de¬

•

should understand that

we

be

can

controlled

such

no

thing

inflation

as

limited

Public

a

percentage annually.
In the first place the word "con¬
trolled"

necessarily

implies

that

government.

Have

of

year

to

such

of

such a policy?
Dothat your savings de¬
posits would continue to increaseannounce

as

the

past

Would you and I continue to
other

fixed

ings?

dollar

And

ernment

who

forms

would

bonds?

I

of

you

ing such
not

be

an

announcement, I can
that the inflation could

these

avowed

inflation

well

the

sake

that

assume

of say 2%

"mild"

of

could be
If

purchasing
by

about

one-half

ample,

a

65

pension of $100

on a

worker

retiring

at

per

It

ex¬

,

cut

in

half.

equivalent
current

It

of

would

only

$50

prices.

then

good.

well

as

The

in

as

tax

Like the interpretation

harmony with

our

action

which

experience
must

week

be

must

and

be

exercised

by week

or

and

or,,

and

proved

those

the

is vital to

on

modified

Reserve

Federal

Act

We should be alert at all times
to combat and counteract those

who

through lack of comprehen¬
sion of the complicated factors in¬
who

for

use

political

pur¬

or

ified
and
ence

to

are

the

a

fuel

service to

serve

^effort
it.

to pre-

*




to

accelerated

savings will

margin

increases

Gas

over

in

&

Electric

be made for the

for

the

atom

amortization

alone

and

Baseball, Lyle W. HaCentral Republic Company,

Thomas

Ziegler

Twitchell,

B.

Robt.

C.

and

&

Co.; Golf, Hal Emch,
Vmrh
Co., *and Bill Solum,
Paine, Webber, Jackson & Curtis.
In

the

golf

;

pin, hole No.

3

Tee

on

r

With Goodbody & Co.

:

(Special to The Financial Chronicle)

:

prizes
will be offered for 1st, 2nd & 3rd
low gross; 1st and 2nd low net;
long drive on hole No. 18; nearest
to

Westervelt, Bell & Farrell,
Jenkins, Brew, Jenkins

Fred

& Co.

tournament

A

.»

DETROIT, Mich.—John F. John¬

ston is

shot;

with

now

Goodbody & Co.,

Building.

v

YEAR

amounted

of infernal

an

ings
,r/:-

growth

to

United

Utilities,

of

1956

probably decline sharply in another

and

water

Incorporated

16,000

propane

United

was

for

customers

customers

program

ing $ 16,000,000,

net

a

gain in

at

total

a

of

gas,
some

end. The largest

year

in United System history, total¬

completed. Total operating

rev¬

increased 10.9 per cent and net income increased

enues

from

reports

telephones and 2,300 electric,

$2,566,378 to $2,870,047.

/ U

increase of 40%.

The utilities plan on main¬

peak load of about 20%.

generating

is

At present

difference in wage levels in the

(isotopes, industrial testing,

two

oil refining, etc.)

HIGHLIGHTS OF 1956

1956

1955

"

,

System Statistics
*'•'*

OPERATING REVENUES, year
Annual upward ;ate

adjustments of $1,485,000 granted

,v

•

i;'.

\

:

$ 30,832,434

by public authorities in 1956.
CUSTOMERS, end of

V.'

year

f-

15,996 more telephones. 2,330 more power, gas, water

v-

•

+

$ 27,808,048
X

-

425,980

407,654

$ 16,029,543

$ 13,714,075

and propane customers.

■v

CONSTRUCTION PROGRAM, gross additions

history. 20 exchanges with 18,246 tele¬
phones cut to dial service.
Largest in

our

'

NEW FINANCING, system

'
.

Sold $5,279,169 U.U.I. Common

Stock and $2,600,000

$

7,897,169

$ 11,700,000

$104,141,019

$ 92,710,389

5,166

5,008

14,528

12,605

bonds of subsidiaries.
PLANT

*

INVESTMENT,

gross,

end of

EMPLOYEES, end of year
More people for more business.

STOCKHOLDERS, end of
United Utilities Inc.

*

year

common

stock.

Results

SYSTEM NET INCOME, year
Available to parent company stockholders.

$

SHARES OUTSTANDING, end of year
average
United Utilities Inc.

Increased 5c

a

common

for

stock, $10

2,870,047

$

2,566,378

1,760,148
1,633,463

year
par

1,500,621

1,497,705
'

value.

share.

$

1.76

$

$

1.20

$

1.175

BOOK VALUE PER SHARE, end of year
United Utilities Inc. common stock.

$

17.76

$

16.55

higher costs. This applies particularly in California where
have skyrocketed and share earnings are
declining.
as

Niagara Mohawk Power, whose

earn¬

are

justment clauses in their rate schedules, particularly as
regards
industrial business. The Florida utilities, for
example, are well

1.71

DIVIDENDS PER SHARE, year
Paid quarterly to United Utilities Inc. stockholders.

costs

declining for special reasons, are also seeking higher rates.
Many utilities outside of California are protected by fuel ad¬

«on v. F. wmhtmhm;

;

f ~

*

year

$87,005,946 now in telephone plant, equaling $229 per
telephone.

EARNINGS PER AVERAGE SHARE

Some other utilities such

.

by

due

a reserve

must

combat

meaning

the importance of independ¬
- for
the v. Federal
Reserve

System.. You will do

Ziegler & Co., and Harry Madary,
Robert W. Baird & Co.; Jack Baumann, Milwaukee Co., and Lew
Morack, Paine,. Webber, Jackson
&
Curtis;. Hank Schlass, Brew,
Jenkins Co., Inc., and Matthew
Pahle, A. C. Allyn & Co., Inc.;

Co., and
Strauss, Blosser & Mc¬

months

utility stocks are to sustain their market popularity it
is important that they maintain their record of
increasing earnings
and dividends. Otherwise, with junior bonds and
preferred stocks
yielding as much as 5%%, non-growth utility commons might be
degraded to 6-7%. Some utilities will now need rate increases to

unusually well qual¬

understand

12

If

economy propose, either openly or
by indirect means, to destroy the
System's independence. As bank¬
you

Co.,

Dowell;
mann,

and

Lynch,
Fenner & Beane; John
Milwaukee Co., and
Ward,
Merrill
Lynch,

*

the

than the utilities.

because they dislike the
discipline of a private enterprise

ers,

in

countries, the substantial tax savings (British plants are Govern¬
ment controlled), and the fact that the
plants are run primarily for
defense purposes with power as somewhat of a
by-product. It
appears likely that with the widespread experimentation between
different types of reactors in this country,
rapid progress will be
made in reducing costs so that
eventually atomic energy will catch
up with power generated by "fossil fuel."
For the present, how¬
ever, U. S. atomic energy is more of a political football (like
some of the new hydro
projects) than an important earnings factor.
In fact, other industries are
finding greater immediate practical

economy
and
all
that
it
means
in the
way of civil and
economic freedoms.

or

big factor.

required to generate 1 kwh to 65/100 pound, compared with 94/100
pound now required on the average.

ance

our

prise

poses

a

increase

(if constructed) they
would not be competitive with the most efficient
fuel-burning
plants, largely because of high construction costs and the impor¬
tance
of
maintaining the most rigid safety requirements. In
England the claim is made that atomic power now being produced
by the Calder Hall reactors is on a competitive basis, but allow¬

way of life—it is an integral part
and parcel of our private enter¬

volved

(only 4.1%

What about atomic reactors?

im¬

the continuance of

business, is also

taxes

efficiency seem assured.
planning a new 125,000 kw steam
generating plant which will use such high pressures and tempera¬
tures that (for the first time)i water in the boiler will
vaporize
instead of turning into steam. This will reduce the amount of
coal

yet

have

&

chairman.

Newton, Loewi &

prospects

American

meaning of

who

only 3.6% and

Fred

Ed Levy,

excellent.

Further

contemplated by those who

wrote

Horace

Beane,
Harold

426,000

taining

pendence of the monetary author¬
as

to

highest

Increased automation, both in the
operating

1960,

independence
because
I * feel
deeply that the continued inde¬
ity

last year, compared

expenses

tee);

Pierce, Fenner & Beane; Dickard
Vermillion, Smith, Barney & Co.,
and Roy Reed, Marshall
Co.; Roy
Rich.ter, Francis I. du Pont & Co.,
and
Skip^ French,
Marshall
&
Ilsley Bank; Thomas Kenny, B. C.

Events planned for the day are
bridge, under the direction of

-

Peak load is expected to increase 38%.

at times day by
the

is reservations

for continued growth of the power industry
Substantial additional generating units have been
ordered, to provide an increase in capability from 121 million kw
at the end of 1956 to 169 million kw in

-

on

Pierce,
Secord,

Merrill

..

two. The recent agitation over the large certificates granted

The

day?
I have dwelt

Joseph
N.
Austrup,
Lynch, Pierce, Fenner &
is
general chairman;
Madary, Robert W. Baird

construction

seem

action,

based

study

operating

18 (second

no.

off

The
Milwaukee -Co.,
Richard Stoeffel, Merrill

its

Guest fee $15.

five-year amortization

decisions,

for

hold

certificates.

long-term appoint¬
ments.
If not, then to whom or
to what political or other biased
body should the vital decisions
referred

deferrals

year or

by

be

will

Idaho Power make it possible that
Congress or the Administration
may soon decide not to issue additional

devoted to the public
service, and
isolated
from
partisan political

involved

saving in

the amortization

na¬

law, monetary management by its
very nature is a job for full-time
experts, without private interest'

pressure

Country Club.

$116 million; figures are not available for accelerated
depreciation.
The latter savings will increase
steadily from here on, although

tional ideals of freedom and
just¬
ice. Like the interpretation of the

in the outcome of their

Club

31, vs. an increase in taxable income of roughly 6%)
was due largely to tax
savings resulting from accelerated amor¬
tization and accelerated
depreciation. In the calendar year 1956

law, monetary policy must be
impersonal to the extreme if it is
be

over

pin, hole
shots

ended March

of

to

Bond

Lake Club and Oconomowoc

woc

to be "on the crest of

j The gain in net was accomplished
increase of 12.8% in fuel costs,
principally by holding

an

and clerical ends of the

monetary

powerful force for evil

Day

'

annual field day
and picnic on
Friday, June 14 at the Oconomo-

28
33

maintenance expense.

mechanism, like control of the
interpretation of laws, can be a
for

waukee

35

32

appear

■

least number of putts.
" /
Calcutta teams are Robert John¬

son,

22

of earnings. Such discounting is the feature of most
markets, and went to far greater lengths in 1929 when some
utility holding1 company stocks probably sold at 50-75 times
earnings.
■■<•'...
V:

Supreme

our

50

36

utility stocks thus

:

plished in other operating expenses, but probably with the in¬
creasing proportion of new plant it is possible to cut down on

for much the same reasons
that I
would deeply deplore such action
with reference to the
of

52-37

third

or

MILWAUKEE, Wis. —The Mil¬

The increase in fuel costs would have
been even greater if it
had not been for the increased
efficiency of new generating plants.
In the year 1956 the amount of coal
consumed per kwh was re¬
duced 2% and the heat rate
(Btus per kwh) nearly 3%. No break¬
down is yet available to indicate how the
savings were accom¬

hopeful that the independ¬
ence and
dignity of the monetary
authority will not be compromised

Control

27

Light & Power

down the increase in ot^er
the gain in taxes to 4.1%.

am

Court.

34

39

36-27

despite

Impersonal Monetary Management
I

47

42

class A and B electric utilities was
8.5%
with a gain of 6.2% in revenues,

the

in
V

'

50-35
43-33
40-32
_

>

gross;

Annual Field

a

month

be

44

The electric light and
power industry has continued to make
generally good earnings showing despite the obstacles of infla¬
tionary costs. In the 12 months ended March 31, net income for all

age

month

per

59

nearest to

Milwaukee Bond Gtob

bull

equivalent of only
at age 75,
and of only about $67
per month
at age 86. If he lived to one hun¬
dred, his pension then would be
$82

60-41

!
-

<v.:

v

multiples

of

would have the

About

36

>

57 %

selling at price-earnings ratios in a range
of 18-23. This means that
they are discounting two or three years
of future growth. But of course
some of the industrial Blue
Chips
such as IBM and
Minneapolis Honeywell sell at even higher

the

of each generation. For

course

market record.:,-'.-

38

34

the wave"—most of them

suc¬

in

58

33-25

The growth

us

of the dol¬

power

58

60-42
35-25

■

Over I95(j Low

59-37

^

position

upward trend in output. Increased efficiency will continue to offset moderate inflation—but where inflation
gets the upper hand
/as in California, the regulatory commissions must
grant relief.: If
they do, the utility stocks will maintain their enviable
postwar

% Gain

Tucson Electric

figure

you

6/10/57

•'

Southwestern Public Service__

t,;v

controlled inflation

a

per year

Appl-ox. Price

11)50-7 Range

•<-

Central & South West__
American Gas & Electric
Delaware Power & Light

inflation.

discussion let

cessfully pursued.

lar

■/

as

it out, that would not be mild.
would be equal to an erosion

the

,

proponents

advocate

""controlled"

as

For

Houston Lighting
Texas Utilities

controlled.

Now

;

of

Approximate

Tampa Electric^-,

know the answer, and if we acted
as I
suggest we would act follow¬
assure you

V

Florida Power & Light
Florida Power Corp._______

gov-'

sure

r

.

sav¬

buy

am

'

the

expect

market

of the industry seems assured. Increased indusautomation, the growing adoption of the heat-pump for com¬
residential heating and
cooling, the use of color TV and
other new appliances
coming into use all indicate a continuing

-

bought principally for capital gains:

save

they

j

gains—they seem immune from the competition
of high money rates because
yields are disregarded and they are

in the form of life insurance
and

if

present

bined

shown substantial

year?

needed,

their

trial

1957, although a few of the old-line stocks
Consolidated Edison have given
up some ground recently.
other hand, growth stocks such
as
the following, have

as

the

maintain

The growth

were affected
adversely marketwise last
by rising money rates, but apparently this has not been
much

market factor in

a

On

think

they have-in

Industry

Electric utility stocks

what you and your customers
would do if the government were

where

electric utility
as
a
favored'
A series of adverse rate decisions showing that regulators
are unsympathetic might have had bad
effects on utility
prices, and
mean substantially higher costs for
equity financing.
to

group.

Trends in the Electric Power

off
thought

you

promptly

stocks

By OWEN ELY

it would be the announced aim

you

lief

small

some

''

protected and their earnings have not been
noticeably affected by
higher fuel costs. But the regulatory authorities should
recognize
rapidly rising money rates and other increasing costs, and
grant re¬

Utility Securities

to

1

n

49

-KANSAS CITY

;ti™ & HHOADWAY

II, MISSOURI

The Commercial and Financial Chronicle

50

much

6

Continued jrom page

banking should
difficulty in handling

.

.

Thursday, June 13, 1957

relative

problem, if the op¬
portunities in oanking are pre¬
sented properly to me puolic.
It
is most important that banking
recruitment for small as well as

Commercial Banks Olfer

Interesting Growth Prospects

group.

coming
If a student

tion

meet

it is
going to have to tell its story to
the public, just as all other indus¬
problems,

recruitment

What kind of

a

City, the decline

will welcome

turing "per se," he

opportunity to study so many
different types of manufacturing
enterprises.
If
a
student is interested in

Not Prestige

in

specializing

Modern, aggressive banks are
offering competitive salaries to
attract the people they want, for

in¬

particular

a

dustry, we have a place for him.
In the large banks we have indus¬

to

been
1929

from 28%

It

in

rapidly

banks

in

as

some

"Time"
Magazine survey of 9,000 college
graduates revealed, a higher per¬
centage
make
over
$7,500
in
banking than in any other busi¬
after

but

have

as

years,

And

a

stability

But

of

em¬

ployment?

is

banking

because

tinuously growing. We don't have
the
personnel problems created
by gaining a tremendous amount
of business one year, and losing it

for

market

bank

many

Commerce

of

Chamber

degree, we
Study, made in 1955, showed that
banks paid larger fringe benefits ' understand, today's students want
to feel that their work
will be
in relation to salary (30%) than
of
public
service.
What does
any other form
of employment.
What
about
opportunities for banking here have to offer?
A
banker
serves
individuals,
advancement?
businesses
and
his
community.
He must learn to be helpful to
Advancement Opportunities
To

-

Each

1,000

banking needs
presidents and
vice-presidents

year

new

4,000

new

his customers
over

over

and

other officers.

Because

■*

of

banking's

tradition

of

promoting from within, by far
great majority of these new
appointments
come
from
the
ranks.
For instance,
I am told
that in one of the country's larg¬

the

est

banks,

out

of

having
194 officers,

started
way

In

up.

our

extensive

an

but

43

started

out

system,

the

about

bank with

own

branch

of

clerks

as

What

branches,
all but four

no

clerks and worked their"

as

all

officers

544

eduational

pro¬

grams?

Banking's American Institute of
Banking, plus the system of bank
sponsored graduate schools such
ABA's school at Rutgers, con¬
stitutes not only one of the oldest,
as

but the world's largest adult edu¬
cational
organization - affiliated
with

a

single industry.

If knowledge is the goal of the
young

man

banking,

or

woman

certainly

nities and facilities

and,

in

most

programs

entering

the

opportu¬

are

unlimited

banks,
free

are

educational
of charge to

employees.
All

banks

training

have

to

is

he

he will lose

or

out

If

helpful competitor.

more

a

not

leader

a

in

his

com¬

munity life, he will not be living
up to what is definitely expected
of him.

His service is intimate

because

financial transactions are by their
nature intimate.

A banker,

there¬

fore, gets to know and serve his
customers

as

in

almost

no

other

business.

He becomes part of the

lives

individuals, businesses,
This is one of the

of

his community.
banker's

greatest satisfactions.
Finally,, what about challenge.'
banking offer a real chal¬
lenge to a young man entering

Does

trainees.

or

increasing

an

on-the-job

the

business today?

To

the

These

loan

a

has

Since

obvious.

business ideas for

ecution

set

ever

investment desk

or

is

answer

most

their

ex¬

funds, we
have to pass judgment on just
about every conceivable type of
business proposition — and from
every conceivable type of busi¬
ness.
Every business day is a new
bank

require

challenge to

our

resourcefulness.

Furthermore, in the next 10
our expanding economy is
going to present us with a de¬
mand for money the like of which

years

we

have

this

programs.

who

anyone

behind

never

challenge

need

bankers:

seen.

we

are

men

To

meet

going

with

to

train¬

of

vary, of course, by size
bank, from informal training
by advancement from job to job,

ing, ingenuity, imagination, vision
—to
grasp
the opportunities of

to

the future.

highly

organized

comparable to the
industry.
Or

let's

take

a

very

look

programs

best in the
at

the

di¬

versity of jobs available.
If

a

student

is

interested

in

marketing, we have a place for
him.
Banking today, as never
before, has marketing problems,




And

vocational'

limited

op¬

not

to know the;
problem of

presume

which is the better of two courses'

The circumstances dif-'

to follow.

fer with each

banking institution,';

but the fact remains that because"

record of

the

higher retained,

established

so-called

provides

bank

stock

the

in

more

means

at

in

capital

which

a

the need for
growing banks,

most

banks, perhaps

dividend policies should be more;
liberal.
However,
we
must not

after

the

leading

such

fact

that

some

Business

International

as

of

industrials

growth

Electric,

General

Machines -and

money

cash dividends while
their stocks sell on anything but
meager

pay

market, and the arm of monetary
regulation
concerned
primarily
with
the
control
of
inflation,
banks

of

Therefore,, despite

overlook

the

to'

because

of earnings in dividends'
annually,
bank
stock
prices
would unquestionably be higher.

"depression" low of

function

investors

selectivity available to them,

our

to

This in

advantage

centage

Now, with the basic economic
law of supply and demand' per¬
mitted

course.

an

If the banks paid a larger per-*

*

Ameri¬

The

desired

most

the

itself

a

yield basis. .Maybe bank stocks
due for a "new look." I can-

are

last are able to
more normal return

long

1 tot

_

'

a

era

new

I have

in

automation.

the estimated increase in
tion's

like

population,
to

remind

upon

the

but I
that

you

National Product

Gross

that

shows

already commented

na¬

would
if the

estimates

the

over

last

five

utilities.
for

22

Earnings increased 59%
58% for 30 indus¬

banks,

selecteo

are

trials

utilities.

Over

the

banks have raised divi-

anywhere near correct and if
supply is permitted to
increase at anything like, the av¬
annual expansion of recent

erage

then we should see an in¬
in total deposits from $229

years,
crease

billion
year

at

the

beginning

of

this

to more than $300 billion 10

By the end of the next decade
it seems quite likely that Ameri¬

and

industry,

particularly

for

vastly

more

mechanized and nuclear sci¬

ence

will

be

with

much

its

farther

promise

to

ad¬

lift

heights now
only visualized by dreamers. This
economic
progress
will
mean
living

and

same

dends

an

standards

greater

to

employment

of

53%

17

for
the

period,

same

of 42%,-while
has increased

average

two-year
been well

been

reeom-t

study, and - they have
received in supervisory

circles. The ABA

Reduction

recommends:

in

-

required

re¬
serves
of Federal
Reserve Sys¬
tem member banks over, a period
(!)

from the present average
of net demand de¬

the industrial group

of years

its payments

level of 16V2%

apart—4.35%
for

36% and the utilities

Current yields are

37%.

4.28%

hence.

years

have

Corrections

have
had greater
mended recently by the America^
gains in both earnings and divi-^
Bankers Association,, following a
dends than either industrials or
banks

years

the money

vanced

o*

do

I

correct answer to the

lower than

even

1932.

Index

men

diversity of
employment,
public
service,
and
challenge,
banking offers great opportunities
so

stock to the shareowner.

you

training programs,
jobs,
stability
of

With

corporation needs new capital for
expansion, it must recover much':
taxed
income
by offering new

escape, the feeling that tney
and women, I am sure earn
again a
are
due tor a
higher investment
will agree also, that commer¬ on loans and investments than
rating,
cial
banks
afford
interesting- has been
possible for a quarter
growth prospects for investors.
century. I say "more normal ' ad¬
Oilier Favorable Factors b;r%V
visedly because, contrary to pop¬
I have endeavored to present a
Banking's Growth Prospects
ular impressions, interest r a t e s
realistic picture of the outlook for
Certainly no business is more are not high or "normal" by
career and investment opportuni¬
essential to the whole economy standards of historical
compari¬
ties in our great industry. How¬
than the safekeeping of individ¬
son.
They are well below the
ual, corporate and public -funds rates" of the '20's and earlier pe¬ ever, from the investment stand¬
point there are other favorable!
and the extension
of credit for
riods; and, I might add, at a time
constructive
purposes
to
those .when most other prices are well factors to be considered. Based
upon the forecasts for our econsame groups. One only has to con¬
above
historic
levels. : The. 20c my
already alluded to and the,,
sider the rapidly rising standard*
year
period of "cheap money,"
expected demands for 'pioney, it
of living to appreciate the
po¬
like
the
proverbial
ill
wind, would
appear
that
the
loan-,
tentials for the business of bank¬
taught us the art of charging fair
deposit ratio will remain high for
ing.
and equitable fees for many serv¬
some
time.
Should this, fail to'
Whereas
only a century ago ices which previously had been
materialize,
there would; be
a
about 94%
of the gross national provided
gratis
to
customers.
compensating
condition
created
annual production in this country Hence, from the standpoint of net
unquestionably by the monetary
was
the. result of human hand results, more equitable • rates for
authorities. The resulting addition
and animal labor, with an aver¬
money plus fair fees for special
to the money supply would cer¬
services? should provide substan¬
age work week of about 60 hours
tainly give banks a higher invest-*
and
a
week's
wages
averaging tially greater earnings than those ment
leverage. In any event the
less than $8—today machines do
experienced in the past.
banking system seems destined for
about 94% of the work, the aver¬
some
relief eventually from the
Cites Performance Study
age work week is 40 V2 hours and
penalty of high reserves which
the average weekly wage is $80—
A study by Harry V. Keef, Jr.,
sterilize
so
much of the usable^
and we are just on the verge of
of Tucker, Anthony & R. L. Day
funds of banks.

for

can

careers.

Therefore if the.

the shareowner.

23.9 established in 1932.

banking, will have become much

worthwhile

of

Banker

can

opportunities

in terms of compensa¬
tion, fringe benefits, opportunities
for
advancement, education,
so,

lows

low of 22.9 in 1942—10 years

portunity does banking offer the
investing public?
Much more, I
would
guess,
than
the market
ance and pension
plans, vacation the next, with a consequent reduc¬
currently seems to think.
tion in the work force. And over
time, etc.
If you agree that the field of
the
cycle, we are more stable
I was interested to learn that
commercial
banking, offers un¬
than most industries.
a
U.
S.

shares fell

the

investment

of

clip corporate earnings a second,
time when they are received by

to

their

additional funds.

kind

What

logical in that they afford the in-»
come
tax collector a chance to;

sharply higher
taxes, the banking business was
required to carry an extra item of
expense in the form of deposit in¬
surance.
Reflecting these factors,

conser¬

policies,

dividend

distributions

an

.

addition

In

will still have to go to the

banks

con¬

laws, high cash dividend,
are
somewhat
il¬

ent tax

unprecedented
of deficit financing. •

program

.

do pursue

banks

facilitate

to

the

with

if

vative

in banking is

Employment

overlook the fact that under pres-";*

earnings, there is sufficient flex¬
ibility to enable banks to follow

ABA does have
Treasury, and

if

even

success
even

>

percentage f:

purchasing bank stocks was the
artificially low rate for money
imposed upon the system in order

—

ing economy.

Employment Tenure
about

interest

public

higher

a

of

demanded of them in our expand¬

and

lending

*

stable

deserves

effort

have

What

-

Certainly this
success — in
the

preter

wno

pay-out. Nevertheless, one cannot"

Another factor contribut¬

years.

real interest on

part

the

record

great

plough-back
of J
,,a factor which-

a

ing to the lack of enthusiasm for

loans.

on

of the general economic

grasp

scene.

$30,000 and higher salary oppor¬
tunities
available
to
those* who
willing to work for them and
who have the capacity. >
What about fringe benefits?
We know in general that we
are
liberal with bonuses, insur¬

reserves

the

of

is

of many investors. On
other hand, there are many

the

which banks have made in recent

if banks are to
provide the loans which will be

all

of

investment officers that they

that

are

their
it is a

light

greater
earnings

should warrant

bank
stocks
have v: been
earlier, if < we- why
slower
in regaining
investment
are to move toward a $600 billion
popularity than have most other
economy, a further substantial in¬
of securities.
Not only
crease
in loans must be antici¬ groups
were
bank
shares
severely de¬
pated.
Obviously, if we are to halt pressed in market value during
the
1929-1932
general collapse,
the decline in capital ratios, much
but the unfortunate banking sit¬
less improve them, we will need
uation
which
prevailed
during
additional capital.
As in
the past, much of this that period was vivid for many
capital will be provided from re¬ years in the minds of many in¬
vestors.
However, I am sure that
tained
earnings.
But in
many
this has now
been forgotten in
banks this

on

banks

all

in

requirement

fair share of $20,000-

our

economists

have

staffs.

a

And I might add

field.

ness
we

10

banks

other industries; |

some

The

bank

selling at only 31% of their
high.
is not too difficult to explain

the

The,

63,6% for the industrials and 72%
for the utilities.
%

mentioned

I

groups.

.

recently have been paying x
about 53% of earnings, against

out

(as measured by

bank stocks

but

they are paying *
than is the case

two

banks

the American Banker Index) have

petroleum, util¬
this is the
ities, etc. And in even the small¬
only way talent can be obtained.
est banks, we are hiring agriculprocedure will fall far
The days
when banks offered,
try specialists in petroleum, short of needs, if the banks are to
"prestige" in lieu of salary* has
utilities, etc.. And in even the serve properly the borrowing re¬
long since passed.
smallest
banks,
we
are
hiring quirements of their communities.
How do young men make out
The American Bankers Associa¬
in pay after they have been with agricultural specialists these days.
tion is making an effort to get the
If a student is interested in the
banks a number of years?
The
over-all economy, we have a place taxing authorities to take a more
first or second pay increase may
for
him.
Many of the
larger realistic attitude toward valuation
not
come
as
try specialists in

the simple reason that

market

the

in

about 33% above their
highs; rails have been aver¬
aging
about 78%
and utilities
about 52%
of their 1929 highs,

15%.
As

the

was

might ask, why is

one

reflected

other

the

of

what

to

dividends

in

out

1929

per cent risk assets declined
from 23% to 15%.
In New York
to

relation

is

average

a

glass, or steel, but
is interested in manufac¬

rather

growing industry faces?
the 10 years from 1946

banking

for

prices of bank stocks? It is note¬
worthy that industrial stocks re¬
cently have been selling on the

'56, capital funds of all banks as

life to soap, or

ing have to tell? What are the
career opportunities
in banking?
Excellent, I feel, by any standards.
First, let's take pay.
Salary

In

problems that have
to be studied. And if the student
feels he doesn't want to devote his

doing.
story does bank¬

not

capital problem

our

of them have

tries and companies are

brignt,

it

Opportunities

What about the

in

interested

is

Bank Investment

manufacturing, we have a place
for him.
Banking does business
with all manufacturers, and all

#

#

Obviously, if banking is to
its

banking has
has competi¬
from so many sides.

outlook

the

so

adequate consideration now.

particularly since
gone "retail"
and

management because of the ex¬
panding economy, we are going to
have less available in the critical
"middle management" 25 to 45 age
in

importance

Bank Stock's Selling Average

If

serious and

large banks be given

earnings,
respectively.
This, of
course, reflects the fact that banks
are earning substantially more in

multiplying the
of banking.

thereby

money,

offer,

to

have

not

the manpower

'

.

(2774)

for

.

not far

bank

industrials

utilities.

the

The

for

.

outstanding

stocks,

and

4.41%

difference

in

than

selling much lower in
to
earnings per
share

are

relation
are

While

the

industrials
former

at

present for each $L

of reserves

maintained.

.

comparing these three groups of
equities is the fact that bank
stocks

posits to 10%. This would permit
banks to invest S9 instead of $5

or

utilities.

recently have
been priced
at 12.3 times earn¬
ings, industrials and utilities have
been selling at 15.4 and 16.6 times

1

Reduction of reserve re¬
quirements for time deposits from
(2)

>'

5% to 2%.

vault cash as
bank's legal reserves. •

(3) Allowance of

part of
All

a

the

of

above will

add con¬

siderably to the earning assets
banks. It never seems a
to make

but

of

good time

changes of this character

bank

earnings are being un-

Volume 185

Number 5646

.

.

The

.

Commercial and Financial Chronicle

51

(2775)
duly

penalized

by

excessive

re¬

serve

desirable

Continued

requirements, and it would

seem

to

get

I

Our

refrain from

cannot

adjustment

the Federal

There,

actuarial

yardstick

be

applied

:

reserves

made

were

of

which

lows, rebounded slightly, but it is not expected that this is
than

no

continue,

what

entirely upon the record
date, it would seem that the

fund

which has

£1,742,000,000

been

builc

tinue

ample for any¬
complete economic
reserves

fall of the year.

is-

than,

more

sufficient

to-| cover

I

■

have

referred

automation
other

and

previously

its

industries.

should

not

adding

this

factor

in

tensive
done

be

My

another

research

•

without

which

the
has

studies

ex¬

been

which

are
in process, it is sale to
say
we are on the threshhold of
considerable relief from personnel

in

the

high

turnover

where permanent personnel is not
I am sure that in a few

electronic

years

counting
banks

devices

will

purposes

show

to

for

be

reduction in this item of expense.
Thus automation wiil play a big

most

accepted

The

statistics

remarks

ing

the
desirous

in

picture
of

There is

foregoing

more

which

I

No
that I

proceeds

exempt bonds.

dynamic
The

^

is

growing

challenges

are

is such

intri-

enjoying

'

case

fo

me.

-

.

.

Further Pressure

on

period.

The

Educational

Municipal

Committee

Bond

Club of New York
the Hon. Edwin

the

State

address
June

of

the

20.

announces

Club

"North

which is

on

at

Fiscal

luncheon

program

The

for

of

the

Educational

will
the

mark

Pro¬

the

of

2%s

attrition

for

Kuhn, Loeb & Co.; Gladys S. Degner,
King,
Quirk
&
Co.,
Inc.;
Elaine M. Lamb, Halsey, Stuart &
Co., Inc.; Mary M. Hickey, Kean

Taylor & Co.; and Mareb V. Hoke,
Northern Trust Company.
.

Guests

Elaine
&

are

obtain
C.

cordially invited and
reservations

one

ism

would

not

be

a

with

Murray

is

held

attitude,
action

with

the

manifested

by Senator Kefauver long and
vigorously. But the Senator from

Tennessee, habitually interested in
TVA, seemed to feel that only
the

the

other

Blue

in

involvement

concerned

with

an

Dixon

Yates, in allegedly following White
orders to postpone a trial

af¬

House

in

examiner's

hearing

on the case,
D.-Y. financing,
The long record of

concerning vthe
relevant.

was

the

Chairman's

administration

at

the SEC,

with the sins of commis¬
sion
and, more particularly, of
omission, was not deemed worthy
of any attention at all on the Sen¬

CHIPS

hand

nominee's

incident

by

COMFORTABLE

Chip-

ate floor.

concurrently received another

1946

1936

4

$264,874,000

$104,430,000

$69,052,000
49,701,000

Peck & Co. of Chicago. Mr.
Murray was formerly with First
Securities

Company.

and

Colo.—Paul V.

Charles

added

to

the

D.

Gill

staff

have

of

50,000,000

34.7%

47.9%

71.9%

% Debt of total capitalization..

41.1%

55.3%

54.7%

41,392,000

21,533,000

22,008,000

preference stock...

14,811,000

Common stock and surplus.....

(Special to The Financial Chronicle)

DENVER,

91,942,000

% Debt of utility plant

75,319,000

Long-term debt

Boettcher Adds

man,

Total capital and

Cary
been

Boettcher

Operating
Net income

surplus

revenues

—

—

18,851,000

19,088,000

223,464,000

90,384,000

90,797,000

81,132,000

32,787,000

15,274,000

12,936,000

5,184,000

1,603,000

and

Company, 828 Seventeenth
Street, members of the New York
Stock Exchange.
President

With Hildebrand Co.
SANTA
H.

Huddy

ROSA,

Calif.—Marian

has become

Atkinson

with

Montgomery Drive.




dual

marked

Sinclair

Preferred stock

Wis. — Walter E.
now with Link, Gor¬

Bank

&
Co.,
Building.

are

in the May operation.

through

PORTLAND, Oreg.—Richard A.
is

plant

reserves.

Utility plant at original cost...

A large
desirable development after the sizable

MADISON,

Kaggerty, Phelps, Fenn

National

discrimination

J.

-December 31-

attractive terms will have to be offered.

(Special to The Financial Chronicle)

S.

metal

Chairman

Armstrong to be an Assistant Sec¬
retary of the Navy reveals the
oblique considerations governing
Senators' appraisal of an official's
past
record.
The
ball against
Chairman Armstrong was carried

of

1956

In order to make this refunding a

(Special to The Financial Chronicle)
-

Co.

Olson

most

the nomination of for¬

TWENTY YEARS OF PROGRESS

on Aug. 1, and $3,792 million of 2s
The greater part of the 2%s are owned by the
Banks, slightly more than S8 billion, nonetheless,

With Link, Gorman

With Atkinson Co.

U.

Consoli¬

on

SEC

mer

Both would then

additional

SENATORIAL

Scrutiny of the Senate's recent
debate

coming due

the Central Banks.

successful one,

Marilyn Madden Ellsworth,

may

covered

AND

Convertible

outside of

1956-57 included Elaine C.
Haggerty of Phelps. Fcnn & Co., Chair¬
man;

and

con¬

earned

market

depreciated

BLUE

not

approximately $7,700 million of the two August maturities

season.

Committee

fully

their

have

maturing Aug. 15.

educational

current

POLITICS

tv-'

Federal Reserve

session

of

stock

a

On

'

This

like

experiences

EVALUATION

present

have

THOSE

a

million

gram."
final

Frustrating

quantitative-appraisal
situations
the Blue Chip path, seems to
represent fund functioning on the
most appropriate level.

too distant future, that is sometime in July, there
refunding operation by the Treasury, since the Govern¬
ment must announce an exchange offer to the owners of $12,056
In the

-

will be

Lawyers'

His topic will

Carolina's

half million dollars.

Large Refunding Expected in July
.

Thursday,

The

it.

commitment.

diligent

that

Carolina, will
on

Club in New York.
be

Women's

Gill, Treasurer of

North

1657

of

scientific

a

the

this, unavoidable by the courage¬
ous
"strayers" from- the beaten

this fund

.

off

predictions are that between $3 billion and $4 billion will be
raised by the Treasury in the very near future. This new money
raising venture of the Treasury will put added pressure on the
money market, because the June 15
income tax payments will
entail some new borrowings.
Unless some unexpected help is
given to the money market, there will be no let-up in the pressure

Hear Edwin Gilt

the

the

firmative

This new money raising operation will keep the
the short-term money market, because this is the only
sector in which the financing can and will be done at this time.

N. Y. Mirn. Women to
,

will

this

new

The

The

of

The

pressure on

>

.

tential, and therefore these stocks
appear to belong even in a con¬
servative stock portfolio."

Short-Term Sector

which will be used to meet requirements at the start of the
fiscal

.

will

Pronto
than

-

own

;

.

much in favor of the

The current fiscal year comes to an end on June 30, but with
it will come new borrowings by the Treasury in order to get money

experience, the
has been, proved
satisfactorily
my

so

a

Hence, says Fund President Pop¬
ovic, "This is an unusual com¬
bination of strong investment fea¬
tures with added speculative po¬

-

both

stability and growth prospect.
From

*

these yields

Hildebrand

&

associated

Co.,

4000

Joins Mountain States

•

(Special to The Financial Chronicle)

DENVER,
Nicholas

has

Colo.

—

joined

Wilson

the

a

equity, after making stud- >'

base

to

Alas,

knowledgeable

completion

own

former, there will be this trading out of Government bonds.

<

of

and with

Treasury bonds,

for

and

portant items of inquiry on which

'

alto¬

and

of the Metal

for

with

and tax free bonds. And as long as there
discrepancy in the yields between non-Government and

a

the -three

and-receiving the Chair¬
opinions about, sales and
earnings prospects, working cap¬
ital and bank credit lines, inven¬
tory position — all basically im¬

comes

the current cost.

v

switches into corporates

a

a banking career
should have maximum appeal.Investors
have
the
unique

privilege

tax-

Accordingly, the pressure on long-term Government bonds is
strong, and there are no indications yet of a let-up in these

guing that

.

.,,

Machinery

brokerage firm

man's

some

-

Side

seen

price

Liquidation Persists in Treasury Bonds
>

one..

so

is

On

;

(

Hoffman
of

return

investment commitment.

doubt

banking

and

or

tion

dated

was

'

of

large

be invested in higher income corporate

can

-

Other

tracts

the

drawing.

industry

offerings

with the type of obligation being brought out. Also, sales of Gov¬
ernment bonds continue to be made in increasing amounts, so that

as

:

a

uranium

as it is,
they can not only be selective in their purchases, but they can also
get pretty much the yield which they believe is commensurate

might think
could
have; accomplished my. objective
merely by giving the following
summation; -y":;'.
;
The

Offerings have backed up in quite
that rates had to be increased in order to

that, with the calendar

S.

and

have-

out whole-hog
name-stock path, are one of the
stocks; at least for
important elements pushing the
certain
companies.
Blue
Ridge
fiduciary
investment
manager
recently
acquired
two
issues,
back to remaining with the Blue
Pronto Uranium Mines Ltd., and
Consolidated Denison Mines, Ltd., Chips, irrespective of their pos¬
sible statistical overvaluation and
in the belief that the industry has
overexploitation.
finally emerged with a clearly de¬
He is glad to "pay the price"
fined
floor
supporting
earning
not only to reduce the possibility
power
under existing contracts.
of
error,
but equally to clothe
With the declassification of infor¬
with "respectability" — in good
mation
and recording
of actual
company—those errors which may
operations, and with contracts on
still inescapably occur.
the books until 1963, full justifica¬

Corporate Bonds

doubt in the minds of buyers of new

no

U.

Funds

the Chairman of

quarter

company

sound

a

management

for

al¬

have

we

the

gome

so

of non-Government bonds

essential in present¬

were

recently,

have

we

which

On the other hand

move out at the
offering price. There appears to
good demand around for new offering of corporate bonds, but
yield has to be high enough to bring these funds into the

market.

inevitable.

as

a

the

part in the control of expenses. In
fact it
could even
reverse
the

upward trend which

cases

Line

the- priee

over-rate

will
profits, and how much and

The

have the bonds

enable

tremendous

a

few

sometimes

potential recrimination.

leading interest rates upward.
a

ac¬

profits.

explanation
increasing

unearthing of
gether scientific position; but also the answers to these pertinent
a courageous one for
adoption by questions resulted in the purchase
one
operating in that mutual fund of the shares at $17, now fallen
fishbowl of second-guessing and to
$9 for a shrinkage of one and

bond market, due to a bad case of indigestion
brought about by the too rapid flotation of new issues, has been

affected.

the

Certainly

The present time,

on

Value

three

filed suit against

,

consumption, prices
The industry and in¬

how soon."

reversal in the business

Rising Yields

for

Corp.

make

re¬

The corporate

area

basis

enthusiasm

the

indication

a

that

costs

severely

very

:

a lot of talk,
projections as

jection and when

however, does not give any indications of
pattern, and with the inflationary pres¬
sures-asstrongas they have ever been, and the rush to put out
new issues of bonds and stocks
showing no signs of slowing down,
there is practically no chance of an easing in the
(restrictive)
passive monetary policy. For that matter, not a few money market
specialists are of the opinion that tighter and more restrictive
credit policies will be seen in the not too distant future.
a

favorable

From

from the

to

upon

discussion

concluded

as

banking.

and

effect

also

great

practical

popularity, through the coming a
cropper of another fund.
The new month's legal annals
include the interesting news that

when consumption in volume is a
fact and not an indefinite pro¬

year there was mounting evi¬
spreading recession in business and the powers that be
quickly reversed the policy of stringent credit tightening and
pumped large sums of money into the market.

dence of

all of the-Josses of the Corporation
sustained to date.
f

was

other

no

and

its continuing and

ment feels that it is better to wait, valued
and
make
an
investment
only ies of

stricted, but in the spring of that

year's operating expenses and

one

market

money

fillip
for

million dollar purchase
which they had paid for
potential of new developments 191,000 shares of his stock. The
(remember Chlorophyll and Biotics - Fund management had purchased
of the recent past).;This manage¬ the stock last June as an under¬

for funds which should be
developing with the
The recent rise in commercial paper and bankers'

when tne

be

unsupported

vestors

long, because it

1953

in

was

to

present

-

and

The Federal -Reserve monetary policy is called
"passive," but
as far as t ie
money market is concerned it is as restrictive as it
has ever been. Memory does not have to be too

alone

com¬

with

needs of the Treasury and the

money

used

about this metal than

<

.

period 1934 through 1956. Express¬
ing it another^
one year's
income

new

be

can

to the rate of

Tighter Credit Policy Expected

-

had difficulties during the
22-year

investment

the

acceptance rates might be, forerunners to a higher prime rate. All
of which could be forecasting an increase in the discount rate.

62 times-~thc" estimated total net
losses experienced by the Federal

current

the

of

seasonal demand

are-

Deposit Insurance Corporation for
the 431 insured banks which have

because

metal

mercially, at what price, with
what profits and who will prosper
from among the many who are
going into this business," warns
Mr. Popovic.
"Generally, there
seems

uptrend in the yield of short-term. Government securi¬
ties, according to some quarters of the financial district, will con¬

is

thing except a
collapse* the present

will

according

The

to

up

The V

to the predictions'; of many money market
They believe that as long as yields are more attractive
in non-Government bonds, there will be
selling of Treasury bonds
in order to take advantage of this
higher income.
1

icated
to

more

minor upswing from a somewhat over-sold
position.
in quotations of the more distant
Treasury bonds

specialists.

but pred¬

necessary,

a

erosion

might

determine

to

are

4

page

Observations...
much

The long-term Government
market, after making new all-time
,

as¬

is

course,

Governments

on

By JOHN T. CHIPPENDALE, JR.

in

Deposit Insurance

sessment.

Reporter

mention¬

ing another possibility. Although
there is no evidence that we
might
expect any early relief it would
certainly
seem * constructive
if
some

from

adjust¬

an

ment program started.

C.

staff of
Mountain States Securities Corpo¬
ration, Denver Club Building.

NORTHERN INDIANA PUBLIC SERVICE COMPANY
Hammond,

Indiana

The Commercial and

Financial Chronicle

.

.

.

Thursday, June 13, 1957

(2776)

52

Continued

(4) At this point, the composite
starts
competing credit-

frpm page 9

airline

Dollar

The Elusive Airline
ings
(i.
satisfying

hunger)
obsolete

or

equity

and/or

money

million.

j

tional and Branift) as taken from
their
latest
annual reports
and

whole $215 million he
obtaining from
internal cash, generation and cash
the

1960,

In

understand¬
ably. like to pay it back commencing in 1961 after the delivery
of his final jet plane over as long
a
period' as the investment
communitv will let him have. The
banker, however, true to tradition,
already has some reservations. In
ment—and he would,

of

lesser magnitude. The debt portion
of these funds will be attracted,
generally speaking, into situations
where there exists the greatest

He

proceeds from the sale of obsolete

Super Constellation in 1959 or
for example), lie may feel,

1960

therefore, that Brown should provide now in his plan for more
or
a

of new equity

$215 million

than

being
banker, will certainly feel that
borrowed money, and he,

is

alone

debt

in

much

this

or

that

too

for

much for the airline in relation to

win

to

funds

the

at

competitive

reasonable

a

race

with

price,

lhe airlines must be "no poorer
on, this program is in the hands of than their neighboring industries
the investment community, which which
are also competing for
in
all
cases,
must supply the these funds. It is this competition
majority of the airlines' capital
the financial markets of a free
requirements for the jet age. Let's enterprise
e c o n o m y that, in
reality, set the financial ground
rules a company must follow, and
solutions—for this is the key to rf airlines are to remain a part of
what the airlines must be pre- our free enterprise economy, they
pared to do financially to swing T Jit'o alsoiirlint fViio
must
live within these rules.
fnn/<ifi
this

how

see

Brown's

views
proposed

community

and

problem

Let's

see what this means specifi¬
cally to a composite picture of the
representative airlines enumerated

'i.j.

their jet programs.

Insurance
I

Industry's Financing

should

cussion

say

here that

dis¬

no

investment

the

of

irioonc

can

earlier:■

v/

(1) On

corn-

a

■P':y1V

four

company average

basis, the Big Four, through 1959-

munities' role in airline financing

complete without emphamust each pay for $347,000,000
sizing the vital service rendered °f new equipment. On the basis1
to the airline industry in putting of 1956 actual depreciation, they
together their jet programs by the ton foresee about $63 million of
insurance companies of America, this cash coming from this source
that have committed to lend huge during
the years. 1957 through
be

can

sums

of

to

money

1959, leaving them $284 million to:

the

of

some

be raised elsewhere. Some funds
will undoubtedly be available from
depreciable, or very probably, the retained earnings and sale of exobsolescent
life
of
any
flight cess
equipment, but just how
equipment the money will be used many dollars—no one can say.

major airlines with 20 to 30 year
final maturities, far beyond the

to

for,-

* pay

best

and

until

maturities

often

1966.

with

This

no

(2)The Book Net Worth of this

the

is

composite airline (i e. the amount
remaining to the owners of the
business after deduction of all

possible

evidence of their
"going
concern"
characteristics of this dynamic in- debt from the book assets of the
dustry—and the industry, in view company) is, at the moment, $109
of the continuing financing needs million.
The only ways this Net
of the future—must be given at Worth can be increased between

faith

least

in

a

the

fair

chance to

nancially healthy
will

be

™nnpv

kept

fi-

that this faith

so

alive.

What

insur-

and 1960

now

(a) From Net Income not paid
out

in

dividends

unpredict-

(an

an

)

year

the

in

form

of

debt

(b)

•

canital

From

eains

rom-

in^fho^rriiHal
^7 illg fr0m the Sale of surPluS air"
rnlnmpr^L^w? £
craft at Prices above book values
opeiation. Commercial banks
which prior to the past few years,
vcly ""P1 stable figIhThnl?
&UtPPl7
<®>Fmm the Sale in the marto the aWhies (^r!d
pro"ud
SSZFE&S*"1*1"
rofe)(7fU/n !fCare 0f, tha
(3) Therefore to be conservaf

finpraOnn

—

another

vprv

nnnrpHirtniiip

fio-

we are

.

/n

within

H
a

riprir c'f

T1 iS

restively
J y

toenable the

-j

short

if

F

len* ^ve

neriod

P

1

j

averagtaMine^om-

ss'ooo'ooo0or y$e ooomo *2? i°f a
$6,000,000 airplane
$>0,(MX),000

nnsif?or»

posmcm..

or

..

.

v

(and bankers

never

discour-

age thi.s type of aPP™ach) this
composite airline should

^w

money

'(which^t

arrange

wUl

°nee1

on what iwe cal1 a "break even
basis"
a^nmimr the

straining its cash:, cash

p

At this

nnn

expense of depreciation




Capital

stock

banks

and,

new

retirement)

can

these

is

•

to

«

more

>

a

company

than the old stockhold-

vestment
ers

profits and assets per dollar of . in- '
-

dollar of their in--

possess per

vestment—-and fhis does hot mak6

either

stockholders

old

happy or

willing to-approve, with any sensQ
of

joy,

a new

stock issue.

Reasonable

■£

Return

j1

;

A vital

ingredient in the answer
to why airline stocks have per¬
formed so poorly relative to the
rest

of the

is simply this.

market

haven't, in the opinion of

They

the market, shown

ing

sufficient earn¬
dividend paying

and

power

potential to justify a price even
equal to book vhlue in view of the
risks
inherent
in
their
future,
such

increasing route competi¬
icr, and needs more sunlight in
the form of increased earning tion, substantially increased ca¬
pacity, and the increasingly severe
power. Since the cost to the air¬
lines of

putting an available seat
the sky has increased
steadily after the DC-6B, this in¬
crease in earning power can only
mile

into

be attained in the sizable amounts
necessary by
charge a fair

large
even

be used for debt

but

a

of

allowing airlines to
price for their main

the owners of the business
the
stockholders.) This price lor all
a
subtantial portion of their in- services for domestic scheduled
itial jet programs.
These lenders airlines was 5.30 cents per mile
very courageously do permit the
*n 1956, versus 5.75 cents per mile
airline to violate the 1 to 1 debt/
bi 1948, and has, despite rising
equity ratio (the main reason for costs, actually declined in the last
this permitted violation probably eight years while the product was
being that airlines turn their as- getting better.
Very few prodsets into cash through depreciauc*s *n our economy today can
tion charges once every five to 10 make that statement!
^
basis which

<>•<:

share of the

which will provide the funds for

years and thus throw off a
amount of cash on a break

into

stockholders

let

with insurance companies

tantly,

value is

book

of

product — available
seat miles
U« e- fefr 1° everyone the public
impor- ar|d those often forgotten men

more

below

at

-

To sell

below the actual market.

.

to be getting progressively cloud¬

arrange-

ments, (most of which are private
with full details not available to

.

As

any

and wherefors

the whys

knows,
of the

analyst

investment

market action of common

is, at least, an intricate
and somewhat unscientific business — and
a
poor
commercial
stocks

the

as

the low selling
their product and ris¬
ing costs of production. For the
market determines the price of a
stock to a great extent by apply¬
ing a multiple—called the priceearnings ratio—to the earnings of
that stock. This ratio says, in ef¬
between

squeeze

price

of

fect, that the market will pay X
dollars for each dollar of earnings
that stock is showing. It is: a very
sensitive index of value and credit

strength—and if the earnings of a
stock give promise of continuing
far into the future at satisfactory*
levels—or

better

increasing

still,

steadily into the future, the mar¬
ket will value these earnings at a

multiple.

high

You • can't

argue

With the market—and it has said
for many years

stocks

airline

the best

that

even

are

worth /about
(That was the

nine times earnings.

price-earnings; ratio. for
Four in 1951 and it is
price-earnings ratio
today). To sell above book value,
therefore, even the best airline

average

the

Big

their average

public) probably without ex- banker does not live
in that must earn a return of over 11%
some sort of debt/
world. But I should like to quote
on its book net worth. The indus¬
equity ratios as a part of the bor- a few statistics that indicate very
try, obviously, as presently regu¬
rowing
formula
beyond
which simply that the airline equity
lated, does not give promise of
the airline cannot go (at least this market is not at present the hapbeing able to earn this rate of
is the case in every airline fi- piest in the world—especially in
return. The electric utility indus¬
nancing
arrangement
we
have relation to that of other Industry, as we have seen, has been
seen).
In the case of the rela- tries in our economy. For the Big
able
to,
and gives promise of
tively smaller trunklines whose Four airlines—for example—the
being able in the future to, earn
borrowing
credit
i£
naturally price of a share of common stock
a
rate
of return
necessary - to
relatively weaker than that of the on May 15, 1957 was, on the avcreate
an
equity market price
larger airlines, this debt/equity erage, only 59% of the price of
above book value for its common
ratio will be relatively closer to
that same share of stock at its
stock. It is interesting to note that
the rule of thumb—1
to 1.
In high in 1946. For the four smaller
the common stocks of this indus¬
other words, there are strings atairlines we are using, the price
try sell today at a price-earnings
ception contain

tached

the

for

of

from banks and incompanies to even the

strongest
these

airlines.
strings

The
are

strongest
maximum

debt/equity ratios,
capital requirements and maximum permitted
debt
to
net
depreciated
book value of flight equipment

permitted

ratios.

If

airline

an

does

not

with certain equity and
working capital figures by certaip
future
dates, some of the debt
money it has already arranged to
come

share

that

in

on

age

surance

of

funds available

the

to

jet

up

borrow will not be available to it

May,

1957

was,

the average only 50% of its
1946 high price.
This compares

with a share of stock representing all the industrial issues used
in compiling the Dow-Jones averages which, in May, 1957, was
selling at 224% of its 1946 price,
This does not make for happy airline stockholders—nor is it the
best selling
point in attracting

into

capital

equity

jet

age

ex-

example:

On

pansion programs,
Here's

another

May i5> 1957> the market price of
average Big Four stock was

\^tio of about 15 times earnings
to faith in sound
utility rate regulation. It
is also significant to note that the
price-earnings ratio of all the
tribute in

a way

future

industrial stocks in the Dow-Jones
averages
versus

this

vital

area

its

maturely to pay back some of the
money it has already borrowed,

depreciation) and for the smaller
airlines this percentage of mar-

Virtually all airline financing arrangements to date demand a certain minimum amount of earning
power into the future to become
effective.
All
that
glitters
in
press stories of financing arrangements is not automatically gold!

j^et to

on

Compounding
the

added

the

the

factor

net

income

problem!' is

of

increased

book value

was

76%.

customer

of

the

May,

1957,

I

sion

Here

*

utility

-

as

about

the

only

answer.

might summarize this discus¬
on

the importance of

earnings

equity financing potential by
quoting
from
a
leading stock
market survey service which re¬
cently said "air transport equities
cannot be expected
to perform
well over the near future unless

equity

the ratio of

companies

prosperous

to

to

obtain

higher passenger fares to
ascending costs."
- *

combat

the

market to book value of the common ^tock of eight representative
electric

as

neighbors,

are

market) is interesting and reveal-

ing_' In

is

increased earnings
(the other side of the multiple)

again
in
comparison
with the
strictly regulated electric utility
industry
(perforce a good and
frequent

finance

than its neighbors.

airline industry

losses

industry in

of

The
market place sets price-earnings
ratios and they are often difficult
to raise in a hurry. To keep the
"poorer"

actually only 99% of its book
vaiue
(j. e> \ess than the actual
net assets of the company after

if

1956

in 1951. In com¬

airlines

the

parison,

times in

15

were

9.7 times

level erode its present Net Worth,
it may even be called upon pre-

and

airlines—a

the

for

nine

versus

the

^
.
covered,-but that there are no re- working capitaL needs necessipoint we bid Brown, and tained earnings -or proceeds from tated by the substantially greater
his specific problems a fond "au" the sale of aircraft in > the pic~ dollar; volume of business whichrevoir" (we'll meet him again)— ture).
the jet age is expected to bring,
'

.,

„

r

Key Essential Is. Equity

minimum working

are:

to^term money ab]e figure dependent upon the
afV;
Imancing future earning power, profit marairim* I
amoun* of airline
airline has to pay back gins, and dividend policies of the

money an

each

remain

earn-

portant element of credit strength,
airlines
will
be
substantially

present net worth! From now

its

come

cient to pay the money back over poorer than their neighbors,
the period for which it is bor¬
Violaling 1 to 1 Debt/Equity
rowed. The equity portion will be
Ratio
attracted into situations where the
(5)
In spite of this relative
foreseeable rate of return (either
m dividend income or capital equity poverty, as we have menappreciation) is relatively largest tioned, the composite Big Four
™ relation to the risks taken, airline has already successfully
Tl™s, at the outset, we can see made borrowing arrangements

(no one can now predict
accurately the piyce of a DC-7

aircraft

er

ings, it is obvious that in this im-

SGCUrlty-'
both in clSSCi
probably of equal importance, in
prudently foreseeable
cash
generating potential suffi-

discount

also

may

retained

from

will

value,

retained

„

where the
The conclusion becomes, therein airlines fore, inescapable that to enable
is unknown, has found it necesthe airlines to obtain that last
sary to follow this practice and, "elusive' ' dollar they need for the
•
as of the end of 1956, the comjet age, and to remain finanpositc debt/equity ratio of eight cially strong, healthy and cornrepresentative high-grade electric petitive
with , other industries
utilities; comparable to the air- down the long road ahead, as
lines' composite Big Four, was they must if they are: adequately
something under 1 to 1. It needs to serve the people of America,
only a glance to see that $284 more equity will be perhaps the
million of debt divided by only key
essential — either from re$109 million of Net Worth pro- tained earnings or, more imporduces a debt/equity ratio of well
tantly, and with more difficulty,
over 1 to
1—to be exact—a ratio in almost every case, from tne
of 2.6 to 1.
This same ratio for public sale of equity securities,
the composite company represent- This demands a favorable climate
ing the four smaller trunklines is for airline equity
financing —
2.3 to 1. Despite some increase in and as we shall see, this climate
Net Worth which most probably is at present unfavorable, appears

rclcitlVG

substantially the amount of money
earnings.

the airline industry must, of

and equity) with all other mdustries—virtually all planning expension programs of greater . or

onl**cfonfin11tr fhr* amnnnf nf mnnPV

projected as coming from

the jet

for

intestable
lunds of the country (both debt

aircraft, he may discount

new

Four

course, compete for the

break-in expenses

and the looming

Big

obtaining funds

age,

declining profit margins

of

view

the

Examines

equip¬

proceeds from the sale of

stories.

press

foresee

cannot

as

utility industry,
competition inherent

sffrcted^ (^''thwest,

would, of course, like to
borrow during the period
1957-

or

like

.

^

trie

representa¬
trunklines (arbitrarily

tive smaller

down

chips are

the

last

At

debt money,

least about as much
stockholders' money as

money in an industry
airlines—what we bankers call a one to one debt/equity
ratio. Even the very stable, elec-

such

are
for the

and Eastern) and four

Brown

finds

It

borrowed

(Amencan, United, Trans World

$215

—

at

see

"risk''

from. hereon

actual averages

on

to

Four domestic carriers

borrowed Big

From

million;

-$10

based

of the basic

rules.

ground

lenders of

tive

a

quoted

figures

From
sale
of
unneeded equipment

industries,

other

that,
generally speaking, as a
starting rule of thumb, conserva-

financing prob ems of
airline. real shall movo
We world and
more

e.—what is left after form, the
stockholder
dividend a typical
now
into
at $5 million per year

million;

—SI 5

financial

he having performed admirably
the role ot posing, in capsule

items)—at $20 million per year—
S60 million. From retained earn-

all

with

wise

and runs into certain

Cash for this must also be raised utilities, it was 129%. For the
through some form of perma- Big Four airlines in 1951, the
was
181%
and *for*, the
nent financing or retained earn- ratio
ings. Furthermore, few, if any, smaller lines—138%—so the inof the airlines have made finan- tervening years have witnessed a
substantial decline in this impor¬
cial arrangements for their sectant ratio for the airlines.
These
ond and third round of jet age
equipment
purchases — which, figures must be viewed in the
during the decade of the 1960's, light that to sell any large issue
of new common stock, dilution is
may equal or exceed the costs of
the airlines' initial orders which a factor and the price of the new
shares must usually be somewhat
we are talking about now.

industry

is

able

*>"•< "A

was

173%.~Moreover, in the utility industry' this ratio has risen over t- In conclusion—let us. return lo
the years.; In 1951, for.these same Mr. Brown of Airline X, who toy
■

Volume

185 ^Number 5646

.

.

The Commercial and Financial Chronicle

.

(2777)
this time

is; tired in

53

spite of his

good night's sleep, having suffered

along

with
you
during
the
bankers' .probing of his program.
You,, by this time, know in gen¬
eral the type of questions

Securities Salesman's Corner

Bank and Insurance Stocks

By JOHN BUTTON

By ARTHUR B. WALLACE

he has

been asked and the main ground
his
airline
will
probably

rules

have to

follow to

finance its

with the following impressions:

This

*(a) The investment community

j

lias

thus

shown

far

faith

in

the

week

you

about

idea

some

many

in

estates for

ability to cope success¬
fully with the tremendous prob¬
lems which prudently foreseeable
future growth will entail.
;
:

(b)

,

A, substantial

borrowed

him,

is available to
been since 1946,

that

the

amount

of

annual maturities of this debt

kept below break
eration

of

amount

money

it has

as

provided

^

into

the
are

cash gen¬
future. In this
even

the

connection, he probably mutters

a

prayer of thanks to the insurance

companies which have recently
shown
willingness
to
provide
vitally needed long-term money
to the airline

The

<c)

<

industry.
borrowed

of

amount

available to him is, how¬
ever," at
somd point definitely
limited
by the amount of the
money

book net worth of his airline and
other hard financial criteria, and
he must face the prospect of most

probably selling additional equity
securities plus, without a doubt,
increasing the retained earnings of

.

his company if he is successfully
to guide his airline
through its
transition into the jet age with a

healthy
(a)

credit

his

to

power

now

—

he

so

bosses—the present stock¬

own

holders.
as he gets
..into a taxi, that he'd better have

/p long "Dutch Uncle" talk with the

Loan who will represent his airline
in the fare'mvestigatiori in Wash¬

ington!
.

In

•

meantime,

■J mindful

of the

which

past

industry
1

;,

-,

the

has

confident

dynamic

surmounted

that

if

that, although
building up

were

look

a

what they

at

consideration

no

to what

as

might
happen someday after the inherit¬
ance taxes,
and estate settlement
costs had taken

substantial slice

a

out of their families' inheritance.

The
the

ment

he thought about it
this invest¬

more

convinced

more

an

became

man

that

here

opportunity to perform

service for
that

his

most

clients.

people

was

real

a

He

knew

had

only
a
sketchy idea of the tax savings
that
were
legally available to
them.

He knew that many

of his

clients had never thought out the
possibilities of using the tax laws
to prevent excessive and

unneces¬

tax payments, both from

sary

rent

income

mate

and

capital

accumulate

with

making life
their

from

that

the

men

hope

more

and

of
for

secure

children.

And

the years he has done

over

ulti¬

most

the

bit

a

wives

cur¬

some¬

banker
in

the

airline

-

—

certain

followed—which

sound

from

and

will

feels

funda¬

require

prompt

cooperation
authorities—the

regulatory

airlines will

come

smiling through

the

Laboratory

Quite
came

people

do

estate

have

few

a

ago, he be¬

years

thoroughly

convinced that
help on their

want

problems

that they can

so

plan not only for

a

lation

accumu¬

of

capital but also for its
preservation and direction. Ac¬
cordingly, Baron Helbig, of Baron
G. Helbig & Co., 60 Broad
St.,
New York City, set out to study
discover

thoritative

ending

sound,

every

and

proven

au¬

means

of

excessive,

unnecessary,

and unrequired tax payments. His

objectjyp,

to conserve through

,\vas

proper planning both income and

and

he

studied

As he

suspected, not only those
in the highest tax brackets who
were
holding the large estates
were
subjecting themselves to un¬

modest incomes

en¬

at the end of a long, gruelling, but
successful
flight—unfastening the
seat belt, and lighting a
cigarette.

Lo¬

with Securities, Inc., Farm¬
Union Building.

gan is

Craigmyle, Pinney Adds
(Special to The Financial Chronicle)

BEACH,

liam L. Purcell is

myle,

now

Pinney

Atlantic

&
Avenue.

Fla.

—

Wil¬

with

Co.,

Craig¬
704 East

(Special to The Financial Chronicle)

GABLES, Fla.—Jeffer¬
Montgomery has become

connected with James H. Price &

Merrick

Way.

(Special to The Financial Chronicle)

K.

LAUDERDALE, Fla.—John

LePan

has

with Roman

&

become

affiliated

Johnson, 312 East

Las Olas Boulevard.




of any

individual but, as
it, there is also a good, sound
reason
why the personal story
(sketchy as it is) of Mr. Helbig
see

valuable to

be

can

others

investment business.

the

in

It proves one

thing

beyond any doubt; if you
have a practical idea that you be¬
lieve will be helpful to other
peo¬
ple; if this idea can be conveyed
to them in a manner so that

they

were

did,

must

you

be

man

successful.

As

member of the New York Soci¬

a

and

future

without

tax

bills.

fee

a

understand
most

He

but

that

did

can

you

his

all

investment

advice

securities

business, and the head
long established firm, I

his

think I

can

that here is a man
who has proven the old adage,
"If you are to
succeed, serve your
fellowman well."
say

to

as

which

5% Notes Offered

Net

proceeds will

the company's

be

added

to

working capital and

be used for the purchase of
receivables
in
the
course
of

may

regular ' Hn&nttihg'operations, or
may be used to reduce short-term
leans.

■

,
.

Commercial

Credit

t

,

Co.

.

aiid

its

loans, wholesale financ¬

ing, accounts receivable financing,
factoring. The insurance busi¬

and

includes

ness

creditor

life

credit

insurance,

insurance,

and

fire,

theft and accident insurance.
The notes may not be redeemed

of

the

country's

investment

these

firms

as

firms

an

where

estate

"Charity

planning
and
He has originated

Income

and

Plan" which

is

on

tax

currently provid¬

reduction

—

as

for

high
the

as

a

50%

individual

plans include donations to

church, college, hospital

or

similar

earnings
they were

1957,

31,
higher for

17%

.

a year earlier.
Mr. Cook's suggestion that divi¬

the

dends

was

to

(excluding
severely cut

at March

—

12 months than

be

the

increased

point

thus

is

for- many

more

interior

York.

needed

capital.

new

to

raise

of
of

case

the

course

There

is

the

be

the

or

First

in

the

14.5

new

For

Bank

of

National

of

Dallas

with

1; or California Bank of
capital. Los Angeles with 15.6 to 1.

In many

the

for

a

to

others

In

other

banks

words, the New York

showing new highs in
earnings, their deposit ratios are
are

comfortable

example,

is

14.5% to 1 ratio;
First with 20.2 to 1;

Security

by

no

move.

need

or

question that in
instances there is justifica¬

tion for the

the

greater

America with
the

need

banks of

some
can

would

for

reason

approach

new

FDIC

Certainly if First National
City feels the need for new money

situation, for future expansion, how much

any dividend
increases
have been trivial.

Of

much

But, in rela¬

tion to the needs of the

highest

de¬

their

and

pay-out ratios

are

dividend

sufficiently low

posit: capital funds ratio (the most to justify dividend increases not
important statistic showing the necessarily related to capital hikes.
need for the new capital) ratio of And, for what it
counts, several
the

leading New York City banks
that

of

Manufacturers

Trust

these stocks

of

are
selling below
published book values, to say
nothing about their real equities.

even

posits

It must be borne in mind that the

New

York

large
to

banks

any

generally

speaking, maturities of

Government

holdings
Only a few

ratios

of

were

16

and

18

to

years

deposit

numerous

1

among

of the

some

So,
that

it
the

banks

country's large banks.
is this writer's opinion

leading New York
in

are

in

sense

no

capital.

new

City
of

need

First National

March

at

orthodox

there
bank

ratio

31,

of

muC

was

1957,

10

City

is

a

when

risk

to

today.

purpose

shareholders

its

to

1

to

assets than Ah ere

going

had

greater

City Bank's annou..ced

Anniversary for
Stanley Heller Co.

Stanley Heller &

in

for

Company,

Members of the New York

have Exchange,

bond

been kept low.
back there

30th

carrying

are

purposely set aside
bad loans.
Also,

reserves

cover

prices

June

their" 30th
Stre et.

13th

Stock

celebrates

Anniversary in Wall
Thfifc0?•:>di

organization ;
has been
t

c a

lo-

in

d

e

present

its V

quar¬

ters at 30 Pine

Street for

over

25

Mr.
th e

H

years.

11

e

e

r,

Senior Part¬
ner

and

or¬

ganizer of the

firm,

has

sociated
him

as¬

with
active

as

partners Louis /

will

ranging

from

103.25%

in

the

part

debtedness

of
of

As of Dec.

gross

amounted

superior

in¬

company.

31,1956, the

company

receivables

gross

total

the

the

During

receivables

totaling
the year,
acquired

to

$3,387,088,000, com¬
pared to $3,677,242,000 in 1955.

A. M. Kidder Adds
(Special to The Financial Chronicle)

see

Co., Inc., 131 South Tennes¬

Avenue.

With Frank Edenfield

connected

&

with

Co.,

8340

Frank

L.

Northeast

completion of this financing

(Special to The Financial Chronicle)

dividends.

As

a
group, the large
City banks are now
disbursing between 62% and 65%

New

York

First Avenue.

201

Prince

and

Stanley

Michael

J.

Heller

Pascuma.

Broker."

"Brokers'
a

Besides

doing

commission business at the pres¬

ent

time, the firm is also active in
operating earnings; that Underwritings, and in recent years
is, less than two-thirds. As they developed a Stockholders' Rela¬
have never been in sounder con¬ tions Department and has aided in
dition vis-a-vis their depositors, solidifying
the position of the
dividend
adjustments
upward managements of some of Amer¬
from the current levels are a rea¬ ica's leading corporations with the
sonable and logical expectation.
financial community.
of annual

NATIONAL

BANK

BANK

INDIA, LIMITED
to

the

Head

Office:

Government

West

End

26

OF

In

London,

Branches

in

E. C.
(London)

2.

Brancht

land

Paid-Up

Southeast

Protectorate.

Capital

£4,562,500
£2,851,562

1

Fund

£3,104,687

conducts every

banking

Bulletin

on

Request

India,

Aden,

Authorized Capital

The Bank

NEW YORK

Bishopsgate,

13, St. James's Square, S. W. 1.

Reserve

MIAMI, Fla.—Jack I. Cohen has
become affiliated with Alfred D.

Co.,

she i m,
Milton
A.
o r

give City a deposit ratio of
The firm originally started as
9.6 to 1, assuming no mate¬
Curb Brokers as Members of the
rial change in deposit liability.
New York Curb Exchange, spe¬
None of this discussion, how¬
cializing in service for brokers
ever,
is to object to increased and was known at one time as the

Burma,

A. D. Laurence Adds

&

F 1

some

Pakistan, Ceylon
Kenya, Tanganyika
Uganda, Zanzibar, and Somali-

Second Avenue.

Laurence

new

Kenya Colony and Uganda

MIAMI, Fla.—Albert B. Coe is
Edenfield

is for

capital funds
present and future growth.

Bankers

(Special to The Financial Chronicle)

now

$120,000,000 of

of

the

Benefits

ing immediate and impressive tax
benefits—often

whose

time,

higher

banks than it is for those in New

The

other

advisor

in

National

many

before June 1, 1967. On and after
that date, the company may re¬
deem
the
notes
at
redemption

der &

Succeed

and

First

<

roster

deposit ratio of about 11.2 to 1,
surely close enough to the old

the

Baron

many

their

re¬

scan¬

stalment

they

he offers his services to the clients
of

of

Bank

LAKELAND, Fla.— Linton H.
Terry, Jr. is now with A. M. Kid¬

Well

ana¬

increases

some

half.

Company. As of March 31 last, it
stood at approximately $13 of de¬ Dividend increases in this group
to $1 of capital, surplus will improve the already good
and
undivided
profits.
Paren¬ yields, and they might awaken
An underwriting group headed
thetically, if we were to add to some interest in investors who too
jointly by The First Boston Corp. capital funds unallocated
neglected these blue
reserves, long have
and Kidder, Peabody & Co. made
the ratio would, of course be more chips.
a public
offering yesterday (June favorable.
12)
of
$75,000,000
Commercial
Now, 13 to 1 is not a ratio for
Credit Co., 5% notes due 1977.
anybody to become nervous over.
The notes were priced at 100%.

clients

own.

leading

short

there is not.

of

bank stock

many

the, second

inability of

vestment

willing to also accept

firm but he is in constant demand

by

the

that

12%,

lysts look for

because of depositor runs and the

some

$1,296,832,000.

sands of dollars from both current

least

City has already increased from
$2.80 to $3.00, which rate is fully
various justified
in the light of City's

authorities

At

country's bank
savings banks)

ety of Security Analysts, with a
background of 30 years in the in¬

held

saving hundreds and thou¬

should

dividend.

Bank Stocks
Indeed, as 1957 operating earn¬
ings are likely to top 1956 by at

the

bank board to increase

a

head

I know this

as

ods of

proper

dalous for
its

that

little

as

surprising

job

your

legal advisors, he suggested meth¬

his

found

supervisory

at

stitute

well

be

bank

garded it

understand it's importance to
them, and if you will work hard

11th year to 100% in the last
three years. The notes will con¬

were

will

can

work among his own clients.
He
consulted with them and made a

problems.

With Roman & Johnson
FT.

estates

and

Helbig not only
heads his 25 year old investment

CORAL

Company, Inc., 73

of

overlooking ethical and proper
methods of preserving their capi¬
tal and their earnings. He went to

Serve

With J. H. Price

F.

lack

and

knowledge, but also people with

Today

son

penalities because of

inexperience

this

DELRAY

praises

I

1horough-going study of their en¬
tire estate pictures and, with the
help and counsel of competent

With Securities Inc.
(Special to The Financial Chronicle)

DENVER, Colo.—Frank L.

their

Cook,

instalment financing, personal in¬

airlines and the bankers will

er's

It is not often that columns such
this should be used to sing the

as

collectively are one of the three
largest enterprises in the United
tax.
States engaged in the business of

the

Earl

secures

thorities in the Internal Revenue

Service,

H.

Chairman of the Board of Federal

tax reduction whether the
bequest is large or small, and Deposit Insurance Corporation,,
for himself a lifelong in¬ counsels, and even urges, bankers
to Increase dividends.
If we go
come which can be extended to
back to the depression
his heirs if so desired.
years it
come

are
engaged in fi¬
capital for the individual, his
family and his heirs. He consulted nancing, insurance and also manu¬
with trust officers, lawyers, au¬ facturing, The finance companies

laws.

when

rence

—

occur¬

Commercial Credit

His Own Business Was His

necessary tax

joy the finest of all satisfactions
f

donor under

V Surely it is a momentous

is

next five crucial
years
and
land their jet planes gracefully at
a
creditworthy airport. Then the
.

The

causes.

plan achieves immediate in¬

thing about it.

mental financial ground rules can

be

this

subsidiaries

the

obstacles

the

an

a

and

J (e) Brown decides,

had

doing all they could see
jungle of property put to¬
gether hit or miss, with little or
was

can.

break-in expenses—and so he can
raise
additional ~ equity
in the
)
market without being unfair to

who

had been

problem

develop a little fat in the form of
working capital to keep him warm
against the cold cash draining,
winds of jet pre-operating and

going to tell worthy

am

themselves, when they

then clearly to be increased

earning

his

people

finally took

standing.

The :key

seems

I

fellow

a

years ago

financial future of the airlines and
their

This Week

Service With A Capital "T"

jet

program. He walks from the bank

and

description oi

exchange

business.

Trusteeships and Executorships
also

undertaken

Laird, Bissell & Meeds
Members New

Members

York Stock Exchange

American Stock Exchange

1>0 BROADWAY,

Telephone:
Bell

NEW YORK 5, N. Y.

BArclay 7-3500

Teletype—NY

(L. A. Gibbs, Manager

1-1248 49

Trading Dept.)

Specialists in Bank Stocks

The Commercial and Financial Chronicle

jiated that a favorable decision on
a
pending application for higher
freight rates—a decision which is
looked for in late summer—will

Railroad Securities Make an

example,

for

interest debt,
be illustrated

fixed

the

of

tism

have tried to highlight some of
the fundamentals that make rail-

Evidence of the conserva-

ment.

may

and the
charges were
(before Federal
income taxes) in 1956.
Even the
earnings for the deep depression
years
of 1932 and 1933 were
greatly in excess of the current
fixed charges of the carriers, the
coverage data
being 1.48 times
and 1.88 times respectively. Moreover
the modesty of the fixed
interest
earned 4.6 times

related

is further shown

fixed

1.34% would permit
to

tions reject all consideration of
railroad securities. I refer to the
unsatisfactory rate of return the
carriers earn under the guidance
of our regulatory agencies. However, paradoxical as it may seem,
by the this unfavorable factor also has
of only its favorable implications from an
charges investor's point of view.

fully covered, disregarding

be

of such

charges

r

^

Favorable«la adoxica
impiicanons

Those familiar with the history
otthe railroad industry will re9a^ *J?at it first came under the
- jurisdiction of the Interstate Comin(?rce Commission in 1887. While
subsequently there were many im-

-

in

Another feature of investing

railroad securities is that the for-

respective companies

tunes of the

virtue of the

month to month by

required to

statistics

myriad

from

closely

followed

be

may

pigmentations of the original act,
probably one of. the most importailt ^as Jbe testation, following
World War I known as the

be

ComCommission and which are

merce

Interstate

the

with

filed

public.
r
,

made available to the
..

^

.

..

Despite the many inherent op-

was

to

necessary

the

the

after

standpoint
vasiye

attitude towards rail
It would seem to me

negative

.securities.

period

who

securities

rail

this

at

are

time

Thursday. June 13, 1957

.

f

issues

jsiation and the recognition

rate ifor a

secured

rise t
credit

at

are

of

the

return,

the ^uresRate of Return on
Net Property Investment

4.56

$2,238 billion—19.8%

1925

5.12

out-

1926

26.7%

outstanding

1929

5.30

the

of

total

amount; 15 years later, or at the
close of 1955, the holdings had

oIrt4h6-7r% Co7atShe

total

9railbdebt!

Thus, between 1925 and 1955 the
life
insurance
companies
increased their railroad

hold-

bond

ings by nearly $1.7 billion, during which time the industry debt
was reduced from $11,305 billion
$8,375

..

.

\°

associa-

1945

eY9n

1

re.railroad bonds than do the

/ ,.'"sll1-aniCe C?u1?an!eYu
S the fraternal group
frf wa 1
1955 Ivf

of

a

invested

7.5%

of

their

this class of security, as
with 4.3%

assets

in

compared

for the life companies.

Obviously, the investment officers
the
fraternal
organizations
investments

include

sharp

rise

and

1941 to 1945 the re-

with

its

heavy

accelerated

discussion

thus

was

period 1941-1944

5-28%- Tbe upward spiraling

0f prices in

the

post-war

period

the. five years 1946-1950, since
which time some forward
prog-

ress
.

was
,

..

macje;

jn

the

1951-1955

,

J

.

perlod 11 averaged 3.92% and in
*956 the corresponding figure was
3.95%.

far

I

that

turn—3.95%—leaves much

to be

indus¬

can

just

be

as

the

Congress, in cooperation
with the regulatory agencies, will
eventually be sufficiently realistic
to ease the burden of regulation
so
that
competitive
influences
may prevail.
This approach in¬
volves a process of education and
should
ultimately
lead
to
the
adoption of legislation similar to
that now pending, embodying the

statistical

passenger cars

*

strike at the Chrysler

plans hinged on supplies. Dodge and De
on
four days the past week due

were

previous week's Budd.Co.

'

week ago.

and

-

on

Organiza¬

.

-

board's

The

report

showed

auto

credit increased $158,000,-

and personal loans rose $122,000,000. In
month of last year, auto-paper increased $149,000,000
sonal loans rose $109,000,000. v
in

000

April

-

.

the like
and per¬
*

^

increased to $41,000,000,000
at the end of April, the board states. This was an advance of $512,^000,000 during the month, compared with a $461,000,000 increase
Total

a

year

consumer

debt outstanding

earlier.

At

the

same

-

.

^

time,

paid off $3,about the same as.
than a year earlier.

the report adds, consumers

300,000,000 of their debt in April. This was
March repayment but was $300,000,000 higher

stocks went up to

nation's crude oil

The

Interior reported.

the

-

269,124.000 barrels

1, the United States

during the week ending June
*

*

.

.

'

'

Department of
*

'

represented a gain of 3,663.090 barrels
from the previous week.
The agency said domestic orude stocks
accounted for 2,667,000 barrels' of -the increase, while foreign
crude represented the remainder.
The domestic inventory

Steel

On

Operations Expected to Rise to
Capacity This Week

88,2% of Ingot

Monday of the current week, '-'Steel" magazine
strong" resurgence in steel demand

tion

Committee

,

$259,000,000 to their instalment debf in April,
the Federal Reserve Board currently reports.
The increase was
less than during the like month of the preceding two years.
Last year instalment debt rose $307,000,000 in April, while
the increase two years earlier amounted to $551,000,000.
Instalment debt outstanding totaled $31,500,000,000 at the
end of April, the report states.
This was an increase of $2,100,000,000 over the like period a year earlier.
April's climb was the largest monthly increase of the year,
but debt normally increases during the spring auto-buying season.
In March the debt increase amounted to $40,000,000, while Feb-r
ruarv
and January each showed declines.
• •
;
.

duction

Policy

in Wayne,

; ;

Consumers added

v

tial

Advisory

asked its
and pro¬

that a record rate of steel consump¬
pickup in orders for products of many metalworking

before long, adding

and

a

companies suggest it's in the making.
The record rate of steel usage, it pointed

out, is shown by the

foregoing
remarks,
al¬
though directed towards the in¬
dustry, apply with equal force to

Board's index of metal fabrication. In the first
four months of this year, it averaged 179% (1947-1949=100).
In
the first four months of 1955 (the record steel production year),

most of the

it

The

larger roads and many

ones

as

well.

The point I

trying to make clear is that

there is

healthy
erally.

no

economic barrier to

railroad

situation

a

gen¬

%

Soto plants in Detroit ^
to after-effects of the ~

strike. The Mercury factory

Mich., also worked four days a

report prepared by the Presiden¬
Transport

.

shortage^ stemming from a wildcat :
Corp. Eight Mile Rd. plant in Detroit. Work

readers to watch for a

tion.

last week and

period the week before

agency

recommendations contained in the

am

Looks Forward to Rate Increase

seems

strong and
healthy as is necessary to satisfy
our peace-time economy and war¬
time necessities.
I am hopeful
try

smaller

Naturally, the 1956 rate of re¬

industry, and rightly so.




for the four year

rail

bonds also have confidence in the

my

conclude that the railroad

Y reduced the return to 3.53% for
had

of

whose

opinion, it

be employment amortization, charges the return

Proportionately,

n^ani^ai10I!f £aVe

if™

a

main¬

estimated 130,515

,threatened last week by parts

only logical to

ino„

£.aYe turn averaged 4.97%; excluding
in

?

the railroad field

c<?n9^cf10rl
of their funds.

about

great

'the responsibility of

f

,

^

Fer,haPs the remarkable thing was
5
roads earned any return
ln V*
prostrate
condition ot the entire economy
Wlth its unemployment of resources, human as well as mafor the years

actually

these

taining an adequate system of rail
transportation. Therefore, in my

"verafed only a Uttle over 2 25™

brought

.

.

Many of the fraternal
utilized

iqIo +ht vaff

assume

\erlaK?hl heavy wartlme tratflc

billion.
..

.

~

agencies

confiscate

to

Neither do I
believe that the corporate inter¬
ests nor the public generally want
to see the properties confiscated
to the point where the Govern¬
ment would have to step in and

4.67
5.05

bonds

these

1940

*

the

an

.

.

of

railroad properties.

5.42

1927
1928

railroad

by

regulatory

desire

1924

total

ments

the

bonds

investhad risen to $2,830 billion,

the

believe that

;
at the scheduled rate for

this year and 96.232 last year. % ■ ,'
said June operations are marking a 1
return to overtime assembly, with Ford plants in New Jersey and
California and Chevrolet units in New York and Maryland sched-%
uled to work on Saturday, last.
;
;
v^,.
''' :
Similar
plans by Plymouth and Chrysler divisions were-' 1

industry,

Of course not. *

Now I cannot

built

The

,

the econ¬
omy
of the .country, regulated,
only because of the stranglehold
it has on the everyday life of the
individual, ' an
industry
whose
fixed charges require a return-on
the net investment in facilities

21-31 period were placed at 23,100
1956 peak of 22,200 sec iii

output totaled 100,780

absolutely essential to

icing its debt?

ALL CLASS I RAILWAYS

,

May auto output was placed at 531,300 units by "Ward's," or
12.6% above the 471,673 for the same month in 1956. May truck

to

Congress of the United States nor

dwindling. In
company in-

railroad

in

standing;

in

rate

3.04%
3.76
4.66

was rapidly
life insurance

amounted to

so

fair

1921
1922
1923_

supply

vestments

this

safe

a

place to invest funds, they own so
many of them and such holdings
increased substantially while the
1925

AUholmhtow1loadTriurinc

scribed

Evidently many of the life incompanies are satisfied
bonds

confidence they

of the

an

sales for the rhonth of ,,

compared with 82,431 in holiday-shortened
and 104,984 in the same week last year.

y

trend of earnings generally was only 1.34%. Should this industry
in tbe right direction. Here are experience any difficulty in serv¬

surance

railroad

of the 1921-1930 decade, be-

is

here

then

Now

,

ahead of the year-ago pace.
United States factories/ operating

6%

of property

so

- <

.%.■ ■■
;,f.'
the industry is scheduling
517,000 cars for completion in June. The volume is 20% over the/
430,373 for June last year and is in keeping with the -goal to
bring the January to June auto,building for United States plants

relatively small in
investment.
- !

being

about $500,000,000.

daily, compared with the entire
same period last year.
Reflecting the brightening sales,

the

deny rates and charges necessary
to service the debt, such require¬
terms

r

units

Regulatory agencies cannot

(d)

month earlier.

department

Average sales for the May

June,

necessary

••

ments

19^-193(f deSd/earn^Tth? pre-

Holdings

that

service the debt-

scale. This was
Stocks held by
the

the department's seasonally-adjusted

.

^

-

amount

the

of

cess

the

,

>

indispensable.

institutions' invested the huge
sums that made possible the re~

P

a

Life Insurance

Increased

a

great reservoirs of credit, the

cause

bv

yield consider!
Si!"8
comparable security.

equipment,'

of the

fair return gave
£reat hopes for the future
£ the industry. I believe

necessity f0r

Sram

usually

not

prud¬

,

(c) Earning capacity, actual and
prospective, is considerably in ex¬

habilitation and improvement pro-

hoc

3S»ments

:

•,

for

515,500 in April, paralleling*the 531,000 in May last year, "Ward's Automotive Keporis' de- 1,
clared on Friday of last week.
'
f
"Ward's" said the strong sales were .capped by-May 21-31 sales Vthat topped any 10-day period since; late 1955, the- -industry s /
record year, paving the way for continued strong factory operas *
tions during June. *
;
"
*
I
r
4 *" ; /

(a) The security for the loan is
represented by a lien on facilities
that
are
absolutely essential, if

insurance companies and savings
wde

a

maturities

and

following:

a

employment of investment funds.

In the automotive industry new car

,v

which are the

amongst

reasons,

both
area

as

profitable

May climbed to 532,100 units from

number of

loans for a

sound

are

industry

noted the inventory rise stemmed mainly '
from higher prices and was about the same as in the earlier
months of this year.
However, the report added, the averagd .

issues,

interest

fixed

especially

the

advant¬

goods manufacturers lose $200,000,000 to account for

The

mortgage bonds,

railroad

the

4

increase.

:

Most

on

•

competitive enterprise
So it is with confidence

a

and

ent

increase of $100,000,000 over a

durable

v:;Y'X

Bonds

in

monthly inventory increase last year was

5%% b
th
Interstate CornCommission. This 1920 leg-

it

merce

our

,

fhia

rtaiS fSralsroftors
ehoicebf

%,:•/%

April

of

the future that I commend the

railroad

pected to be America's gOiden age
of prosperity.
Moreover, the re¬
cent attitudes of
the regulatory

an

strength

carriers will show to best
age

of

which

under

economic

in

made

Mortgage

environment

solid

well

as

on
rates, may
political and social

well presage a

thus enabling the car¬
participate over tne
two decades in what is ex¬

Continued from page

services,

attitude

economy.

but if the
solely from op¬
the time element will be

Advances

their

continue,

funds are to eome

greater.

unprofitable

riers to fully

funds to carry out the
of desirable property
improvements will either have to
be generated internally or derived
partially from operations and in
part from new capital. In either
event, rest assured the improve¬

erations

a

toward abandonmerits

of
as

ments, technological development,
financial rehabilitation, etc. will

program

be

authorities

:■

today

is

it was a quarter
century ago. The recent rec¬
of
managerial
accomplish¬

ord

(b) They are outstanding at an
extremely low rate in relation to
the investment in facilities.

be

an

of

necessary

will

industry

far stronger than

pensating increases in rates and
charges for services rendered; it
requires large sums for further
modernization and to effect econ¬
omies to offset cost increases. The

ments

Improved

Greatly

railroad

The

benefit of com¬

level without the

contained a soca][ed
"Fair
Return" provision
hi h was subsequently held to

opportunity, especially in the case of a number
of roads whose earnings and linancial status have greatly improved, do realize greater income
overlooking

per-

in the American
that followed the First

War.

World

avoid

purposely

of

changes

€conomy

that the investment officers of instations

re-

credit

''1? railroads, many in- Government control and the

'>af

to

act

latter

vitalize the industry from a

stitutional investors still maintain

of

The

Transportation Act of 1920.

erational advantages and a satis-

factory financial structure on

Paradoxical

Favorahl*

non-operating income which, in
1956, was equal to three-quarters

a

.

next

performed in freight service tne
of return would have been
.

vestment in the property

charges

it

rate

roads, particularly their fixed in- i6%.
At the present time, therefore,
terest debt, an attractive investment medium for institutional the railroad industry creditwise
is in much the same position asfunds. My remarks were confined
to the favorable factors. There is obtained back in 1920 and as oc¬
one unfavorable aspect and it is curred in the immediate post War
important. It is one of the prin- II period. Once again it has tocipal reasons why many institu- contend with a rise in the price

by the fact that it represents only
between 25 and 30% of the in-

fact that a rate df~return

improve
the net
earnings of the carriers. I might
'add that had the industry in 1956
received 12% more for the work
substantially

Attractive Investment Medium

Position

antici-

is

it

However,

desired.

16

Continued from page

a

.

(2778)

54

Federal

Reserve

averaged 157.5% and in 1956, 169%.
Even though steel consumption is up

markedly, demand and

production have lagged in 1957. Consumers have been living on
inventories to a considerable extent, this trade weekly reported.
Production is on the uptrend now, according to "Steel."
For
thp sernnrt rrmsecutive week, steel ingot production moved up-

Volume

185

Number

5646

.

.

The Commercial and Financial Chronicle

.

(2779)
from the

ward

.

year's low mark of 84% of capacity.

A two-point

rise in each period pushed the rate to 88% in the

;•

June 9.

week

ended

This would yield 2,252,351 net tons.

;

of 31 raw foodstuffs and meats
in general use and its chief func¬
tion is to show the general trend of
food prices at the wholesale

level.

The upturn, it continued, stems from buying to beat a mid¬
year steel price increase, completion of inventory reductions by

/

consumers

and

improved business at

that

'
' 7V7 ■
:■
" t
' ',r " ■■■
:
The scrap market last week continued to
express confidence
steel production will strengthen.
For the sixth consecutive

week, the publication's price composite on steelmaking scrap rose
from the year's low point of $42.50 a
gross ton. In the week ended
June

5, it climbed to $52.33, an increase of $5.33.
the metal fabricating industry continues its record
pace,
will soon deplete its inventories and have to come into the
If

.it

market for steel.

Many industry people report an increase in incoming orders.
7NV77 .'V:
■■■W
3
Steel prices remained firm,
In the week ended June 5,

"Steers"' finished steel base price index held at $140.24 a net ton
where it has, beerrsince May IN European producers have cut their

r
•

prices again

-

'7 States.

as

range, from

in the

40

United

cents

ton to $11. Prices of
have gone down again.

a

States

The ,latest

reduction, averaging 10%, stems from >technological
advances in production and high output, this trade weekly states.
;

.

•

The

*\

American

Iron

and

Steel

Institute

that

announced

the

operating rate of steel companies, having 96.1% of the steelmak¬
ing capacity for the entire industry will be an average of 88.2%

-

of

-

capacity for the week

beginning June

'

2,257,000
i

ingot and steel

tons of

for

10,

castings,

is based

industry's

production

ingot

annual capacity of

on

rate

compared with

as

87.5% of capacity, and 2,240,000 tons (revised)
The

equivalent to

1957,

week

a

ago.

the weeks

for

133,459,150 tons

as

1957

in

of Jan. 1, 1957.

*

For the like week

|

duction

placed at 2,299,000 tons

was

''

t

3-

The

'

higher

;

.

1956.

•
.

operating

rate

capacity

than

based

are

a month ago the rate was 84.2% and pro-,
A year ago the actual weekly production

2,155,000 tons.

on

is

in

annual

an

93.4%.

or

not

1956/

•

comparable
The

because

percentage

;;7V:;:'7:7.777"v

:

capacity

figures

capacity of 128,363,090 tons

Electric Output Expands

;•'

>

and

for

is

1956

7-77 7

;

1 77'v7

power

estimated

was

,

*/

Loadings of revenue freight for the week ended June 1, 1957,
which included Memorial Day Holiday decreased by 51,118 cars
or

7

Loadings in Memorial Day Holiday Week Dropped
7.1% Below the Preceding Period

7.1%

below

the preceding

Railroads- reports.

-7'7

Loadings for

week the Association of American

-'3=3:

7
the week

ended

June

1957, totaled 671,785

1,

V

a

responding week in 1955.

,

.

,

v7;

U. S. Automotive Output
Last Week
Automotive

.77,7'?.

-7

for the

latest week

ended

Last

week's

totai

duction

output

car

totaled

130,515

(revised) in the previous week.
of

cars

and trucks amounted

June 7,

1957,

units and compared
The past week's pro¬
to

154,207 units,

or

a

units above that of the preceding week's output,
states-"Ward's."
7/."r ; V";;..
■
777
gain of 54,257

•>.

Exports of wheat and flour two weeks

_

in

United

the

States.
a

there were 23,692 trucks made
This compared with 17,519 in the previous

last

year.

,

Total

•

wheat

exports

this year

expected

are

to

reach

week's output

rose

above that of the previous week by

while truck output increased by 6,173 vehicles durIn the corresponding week last year 104,984 cars
and 21,480 trucks were assembled.
48,084

cars,

V ing the week.

Canadian output last week was placed at 8,550 cars and

1,981

the

last week and prices

against

363,528

bags

climbed

somewhat,
preceding week.
Hog

prices

a

year

cash

fractionally.

rose

fell

cocoa

ago.

prices

levels

of

noticeably

lard futures

prices

advanced

growing

Trade Volume

Slightly Lower in Holiday Week

Contrasting with the slight dip in total retail sales, attributed
the long holiday
week-end, there was a moderate rise in con¬

the

purchases of both

new

and used

Retailers
of

in

some

interest

areas

in

were

on

total

dollar

volume

Wednesday of last week

was

retail
from

trade

3%

in

the

below

to

period
1%

a

Central and Mountain —2 to -f-2 and Pacific
+2 to +6%.

Moderately Upward
Post-Holiday Week
failures

wedk ended June 6 from the Memorial

rebounded

to

289

in

the

Day Holiday low of 225 in

Dun & Bradstreet, Inc., reports.. The toll ex¬
ceeded the 257 last year and the 230 in 1955.
Failures were 4%

the preceding week,
above

the prewar level of

The

week's

increase

15

or

occurred

among

casualties

involving

more,

week ago.

a

Price Index

Food

Advanced

a

year

hogs,

The

index

for

basis

the

as

week

taken
ended

rose

4%

above that

of the




&

the

elected

were

Winners in the annual golf com¬

petition

were:

•

Ex-President's

cup
for
low
gross—James F. Burns 3rd, Blyth
Co., Inc., and Lee P. Stock, Jr.,
Bankers Trust Company.

&

Candee

Cup

for

low

net—El¬

C.

more

Patterson, J. P. Morgan
Co., Incorporated, and Dudley
Schoales, Morgan Stanley &

&

N.

Co.

Christie Cuo for match play
against par—Clarence W. Bartow,
Drexel & Co., and David B. McElroy, J. P. Morgan & Co. incor¬
porated.
.<

\

•

Tennis match

Evans,

by David

was won

American

Metals

Com¬

pany, Ltd., and Enos Curtis, with
a score of
6-0,11-9, in play against

Donald Stralen, Hallgarten & Co.
Leonard

and

A.

Frisbie, > Leonard

A. Frisbie & Co.

Frumin Named V.-P.
Of Moreland Co.
DETROIT,

For

Mich.

Frumin has been

President
land

&

and

Murray

—

elected

Director

Vice-

a

of

More-

Co., it

was announced by
Moreland, President.
Mr. Frumin, a registered
repre¬

Mr. Paul I.

sentative

with

Moreland

&

Co.

since

1953, entered the securities
business shortly after his gradua¬
tion from the University of Michi¬
gan

in 1948.

During
Force

World

served

War

in

Weather

the

II,

Mr.

Army Air

Observer

Corps.

His current civic activities include
a

Divisional Chairmanship in De¬
United Foundation Torch

troit's

Drive.

Matalene Director
Eastern
ration

preceding week, May 25, 1957, an
For the four weeks ending June 1,
1957, a gain of 4% was regis¬
For the period of Jan. 1, 1957 to June
1, 1957, the index

Steel

announced

company's board
He

like period

of last year. In the
increase Of 1% was reported.

Stainless

has

Corpo¬

that

E.

M.

Matalene, New York investment
banker, has been elected to the
is

of

directors.

general partner in the

a

investment banking firm of Hornblower &

Weeks, New York City.

tered.

recorded

a

rise of 4%

above that of the corresponding period in

With J. W. Gould
H.

With Beil & Hough

Join A. D. Laurence
(Special to The Financial Chronicle)

ST.
B.

PETERSBURG, Fla.—Frank

Emmerling

is

now

associated

with Beil & Hough, Inc., 350 First
Avenue,

North,

members

Midwest Stock Exchange.

of

the

He

was

formerly with Goodbody & Co.

MIAMI.
Yvette
man,

I.

—

Jack

M.

Alfred

W.

has

formerly

with

&

Co., and Sloan
become associated

J.
W.
Gould
&
Co.,
Broadway, New York City.

120

Golcomb,

Hooker

Rosenberg
D.

Sloan,

Sloan,

Kidder

with

Hammer, Sidney Haus-

Morgan

Leonard

with

Fla.

M.

&

(Special to The Financial Chronicle)

food

the comparable

governors

of

was

According to the Federal Reserve Board's index, department
store sales in New York City for the
weekly period ended June 1,
1957.

Sachs

members

They are:
Leonard D. Newborg of Hallgarten
&
Co.; Blancke Noyes of
Hemphill, Noyes & Co. and Robert
A. Powers of Smith,
Barney & Co.

A.

price last week were wheat, rye, bellies, steers,
lard, sugar, coffee, cottonseed oil, cocoa and rice.
were corn* oats and barley.
index represents the sum total of the price per pound

lambs,

Lower in wnolesale cost
*

Board's

Goldman,

new

of

John

ago.

Higher in
'•

country-wide

Further

noticeable rise last week in the wholesale

preceding week and 0.3% higher than the $6.18 of
a

Reserve

a

Retail trade volume in New York City the
past week reflected
gains of 4% to 6% above the similar period of
1956, trade observers
report.

price index, compiled by Dun & Bradstreet, Inc. On June 4 the
index registered $6.20 for an increase of 1.5% over that of the
date

ort

the four weeks ended June
1, 1957, no change was recorded.
the period Jan. 1, 1957 to June
1, 1957, an increase of 2%
registered above that of 1956.

The Past Week
was

Federal

sales

Robert

three-year terms.

1956.

Wholesale

There

the

store

279 in the similar -week of 1939.

climbing to 251 from 185 in the pre¬
vious week and 220 a year ago.
Small failures with liabilities
under $5,000, dipped to 38 from 40 although remaining above the
37 of this size in the previous year.
Twenty-five of the failing
businesses had liabilities in excess of $100,000 as compared with
liabilities of $5,000

board
for

Frumin

1957, rose 1% above the like period last year. In the pre¬
ceding week. May 25, 1957, a decrease of 1% was reported. For

Business Failures Turn

industrial

Department

;

v

Emerson.

of

Three

ended

above

according to spot estimates from Dun & Bradstreet, Inc.
Regional estimates varied from the comparable 1956 levels
by the
following percentages; New England, Middle Atlantic and South
Atlantic —1 to +3; East North Central —1 to
—5; West North
Central —2 to —6; West South Central —3 to
+ 1, East South

from

In

Callaghan

mystified by the contra-

air

of

Mr.

the past week. With

cars

conditioners.
Summer dresses,
sportswear and bathing suits sold well in most areas. Food volume
remained high, with gains in
picnic specialties, baked goods and
soft drinks.
The

to

Co., Treasurer.

of major household appliances, home
furnishings
well, with emphasis on outdoor furniture. Discounts were
widely prevalent for most major appliances and retailers
generally
increased their advertising in an effort to reduce
slow-moving in¬
lack

Sumner Emerson

Vice-

M.
Gardiner of Reynolds & Co. was
elected Secretary
and ; John W.

exception

seasonal

was

succeed

sold

ventories.

H.

President

considerably.» Factory
May totaled about 128,-

June 1,

and

Co.

areas

Turns

The

elected

the

helped cotton prices remain at the levels
While trading in, cotton gray goods slack¬
ened, prices held steady. Bookings in man-made fibers and indus¬
trial fabrics increased again
during the week.

Field

at

Harold

000,000 pounds compared with 226,000,000 last year.
.Although cotton trading expanded at the
beginning of the
week, it slackened at the end of the period. Continued unfavorable
weather in

the

events

Cook of Spen¬
cer T r a s k &

prices, as receipts in Chicago were curtailed. Lamb
prices re¬
mained close to those of the
previous week. Following the rise in

prices,

of

one

Sleepy Hollow
Country Club.

reaching

and warehouse stocks of lard at
the end of

and'
meet¬

Club

7'

7

rose

the

of

the- Bond

Day

the highest levels in
almost two years. This was a result of
increased demand and a
decline in hog receipts.
There was a substantial rise in cattle

and 2,412 trucks.

Commercial

as

of

7

at

Morgan

Club

The

main

moderately to 264,740 bags, as
While coffee futures prices

continued

Bond

ing took place

Government will set a minimum
to the United States
noticeably stimulated

Warehouse stocks of

Co.

annual

Reports that the Brazilian

previous week Dominion plants built 8,686 cars
and 2,232 trucks, and for the comparable 1956 week, 10,289 cars
In

trucks.

&

7 Flour trading lagged again during the week, but prices rose
slightly. Except for a moderate rise in trade with
Venezuela,
f the flour export market was quiet. Flour
receipts at New York
railroad terminals on
Friday of the preceding week totaled 86,160
sacks including 67,980 for
export and 18,470 for domestic use.

cocoa

The

election

7

price for sales of

of

of

elected Presi¬

was

New
York to succeed Robert J. Lewis
o f
Estabrook

about

year ago,

Last

dent

500,000,000 bushels, noticeably exceeding earlier
forecasts.
Average daily purchases of grain and soybean futures on the
Chicago Board of Trade totaled about
36,000,000 bushels, com¬
pared with 40,000,000 bushels in the
prior week and 51,000,000
bushels a year ago.
While soybean purchases were
noticeably I
below those of a year
ago, there was a sharp year-to-year gain
in the buying of
rye.

ago.

year

Stanley & Co.

ago amounted to about

8,175,000 bushels boosting the total for the season
so far to 488,750,000 bushels, considerably over that of the
comparable period

Last week the agency reported
week and 21,480

week

moderately.

sumers'

higher levels following the long Memorial Day Holiday week-end.
with 82,431

ago.

Despite unfavorable weather conditions
delaying crop plant¬
ing in many regions, grain
buying was sluggish in the week and
some prices
declined. Corn trading fell
noticeably, resulting in
an
appreciable decline in prices.
Damaging rains in the winter
wheat belt encouraged
buying and prices climbed

to

according to "Ward's Automotive Reports," rebounded sharply to

*

year

7

3 77\/. 7^^7733 77

Rebounded to Higher Levels

Following Memorial Holiday Period

output

N. Y. Bond Club
Sumner B. Emerson

of the preceding week.

.7

decrease of 47,424 cars, or 6.6% below the corresponding
1956 week and a decrease of 37,566 cars, or 5.3% under the cor-

cars,

V

The index closed at 286.59 on June
3,
earlier and 288.09 on the corre¬
Price increases on steel scrap,
tin, live¬
stock and flour offset
declines on some grains,
silver, rubber and
potatoes.
.'7'7."777
'
77 ■
.7 •
7-7- 7 ■

hog

Car

a

comparing with 285.92 a
sponding date a year ago.

trade

in Post-Holiday Week

industry for the week ended Saturday, June 8, 1957,
at 11,550,000,000 kwh., according to the Edison
Electric Institute.
Output was stepped up in the past week fol¬
lowing the extended Memorial Day holiday weekend.
The past week's output increased 614,000,000 kwh. above that
of the previous week; it rose 599,000,000 kwh. or 5.5% above the
comparable 1956 week and 1,509,000,000 kwh. over the week ended
June 11, 1955. 7'.7'\7%/■
V77'*'-7 ■'377'7

>

below that of

of Jan. 1,

as

President of

Made Slight Gains

Although there was a slight rise in the Dun & Bradstreet
daily wholesale commodity price index last
week, it remained

The amount of electric energy distributed by the electric light

•

Commodity Price Index
in Past Week

result of the plentifuiness of steel in the United

a

Reductions

titanium J produced

;

Wholesale

metalwork-

numerous

ing plants.

•

Sumner B. Emerson

-

•

.

some

55

are

Laurence

201 Southeast First Avenue.

&

Joseph Hewitt

and

Joseph Frederick Hewitt passed

now

away June 8 at the age of 71 fol¬
lowing a long illness. In the past

Co.,

Mr. Hewitt

was

in the investment

1X7 ol 1

Cfroot

56

The Commercial and Financial Chronicle

(2780)

Continued

ended

from page 14

for

March

the

31,

I

work.

would

other

interested in the matter of

about 142% of all
upstate school bonds issued during
the year. I have not bid directly
on
issues
primarily because as

new

$28 million

Money
Upon Mnnicipal Borrowings

sole

of

trustee

System I

legislative

measure

the

Congress

deserves

affords.

I

also

On the other hand
borrowers,
notably well-

because

of

my

business firms, con¬
tinue to secure funds with relative

amended as a compromise,
providing less than the
original measure is nevertheless
a worthwhile step forward.
Pas¬
sage
of the bill would
signify
Congressional recognition of Fed¬
eral responsibility in this impor¬

have

of

Continued

authorities

Federal

erally known.
some

established

they are able to pass
interest costs to the

since

ease

the higher

on

consumer.

there is ample justi¬
fication for Federal consideration
believe

I

of

of local govern¬
financing separately from
monetary policy consideraproblem

the

ment
other

fundamental
issue of public policy is involved.
Should the benefits of new
.schools, new roads, new hospitals
Certainly,

tions.

denied

be

to

a

because

simply

us

One

before

now

eral

aid

school

to

construction

from

page

school

10

V/A

a

for

national - relations —- chief among
them, the sanctity of contracts,

country and abroad.

new

which would

the effect of the

mitigated

influencing credit and
national policy with
flexibility it needs to deal
with
emergency
situations.
A
voluntary restraint program deal¬
ing with the qualitative rather
than the quantitative aspects of
provide

Authority to purchase school district obligations and to finance

our

such

purchases

of

its

own

to

be

a

It would serve merely as
direction signals for the flow ,of

study to the programs of
states

other

30

some

this

taken
given

had

Committee

the

after

issuance

believe

I

approach,

unique

careful

the

by

bonds.

which

If underdeveloped countries are

of

marketing

one

—

sup-

port the financing of school construction.

to

their

raise

standards,

living

realize that potential
investors — whether in the pethey

must

first step I would suggest

a

obligations and eligible com¬
All other types of

mercial paper.

credit

which

Thus, if

cent higher.

•

achieved

it

with

independence must rec-

Reserve and
tions

.should

.similar to that given

operations,
tions and

This

at

is.

the

the municipal bond market.

-

reasonable

\

.

ity

in

level, New York
can

be

should
is to re¬

that

approach

not

consideration

given

A.Xrhv It whs^ 3iso iibtytha?
ft vv°a«
felt thst

in municipal

obligations. At
present, in New York State, the

serves

municipal holdings of State-char¬
tered banks range from one-tenth

-

of 1%

to 20% of assets.

A similar

range probably exists with respect

-

to

nationally

banks.' I

chartered

promotion

of

provide
school

aimed at.stimulating!in¬
vestor-interest and knowledge of
municipal obligations. My office
setting
and

number of publications

a

forth

intrinsic value of

State school district

We

also

New York

obligations.

;

stand

have individual situations to meet,

ready to assist
municipal borrowers with their
financing problems. We are often

but

consulted

recognize

to

that

individual

banks

consideration might be given
a
modest requirement of in¬

in

vestments

which

municipal
bonds
not
significantly

would

curtail their other loan activities.
At present there is a bill before

the House Ways and Means Com-

mittee which would permit

,

regu¬

lated investment companies hold¬

ing

securities

government
from

such

-their

of

to

state

securities

shareholders

local

and

the

pass

interest

through
in

its

to

tax-

exempt form. Passage of this legis¬
lation, which is merely the exten¬
sion

of

the

taxation
©pen

.

"conduit

that

now

entirely

an

theory" of
applies, would
buvers'

new

market for municipal obligations,
one of maior importance as indi¬

cated bv the interest being gener¬
ated among investment companies.
This is

an

use

tions

of

that

the

The full faith
State

been

Municipal

bond

appeal

to

cannot

make

those

of

should
who

municipal

tion make them attractive invest¬




.

i

j j.lfPl

palaces.'The

f

(

f

"

has

Iraq

a

must

be

in

New

voted

upon

successive

submitted to the voters,

This is

immediate problem and

an

to

not

be

would

Legislatures

solved

take

action

by

three

that

We also

years.

step was not necessary to achieve our objective nnd
that any additional benefit
that
might have been gained in terms
of even lower rates might be offset by the effect such action would
have

tions

other

on

of

the

sale

its

out

campaigns

can

are

waged

being

against diseases which have been
the
scourge
of the country for

particularly malaria
Everything consid-

generations,

cred> j think it is remarkable that
these countries
are
moving into
20th

^

■'

-

„

/

u

century at such

a

rapid

' •.

pace

,

,

talking

f!r we

about the responsibilities of for-

ever

There are responsibilities at this

I

am

in

school

full

few

past

of

$500

some

faith

and

enc*

untary

respect to the fiscal

to be at the initiative of the local

ness

of

concern

over

ing school board officals to
late

in

the

market

recommended

Governor.
uermit

specu¬

nevertheless

I

its approval

I did

some

so

by the

because it does

flexibility

in

the

timing of bond sales.
A

recent

have

resorted

to

The

Authority

with

which
much

I

has

cess

suc¬

been

Retirement

with

assets

of

made

substantial

of such securities.

in
the

several

unsold.

of

encouraged

bids

concern

imnortant factor

bids.

During

m

the

served

over

to

risk—

Tvi-in"

fiscal

year

vol-

use

was

to be

and

its

borrowers

Although

the

widespread
ganiza tions
it

State,
leave

in

support
in

and

was

State

this

the

plan

can

to

move

almost

I

increase
on

in¬

40

businesses

compete

foreign

only

on

an

abroad

equal

corporations

local

taxes.

could

basis

with

which

pay

the

By

same

token, it has prevented those busi¬
nesses

from

having to bear

far

a

heavier income tax load than

com¬

parable and competing businesses

operating
Those
taxes

only

who

in

this

advocate

country.

increasing

foreign income must
surely realize that what they, are
on

supporting

is

double

taxation

at

its worst.

Not only would this be
patently unfair, it would substan¬
tially impair the incentive for
American companies to make con¬

tinuing investments abroad.
Earlier I commented

-

the fact

on

that the world is growing smaller
and the lives of men are becom¬

among

of

not

value

of

I

allowed

to

nlayed

deciding

such

an

role,

convinced

am

an

of

Authority,

believe it to be superior to pro-

will

state-supoorted

of

grams

and

back

again

state

and

The

submitted

be

bond

construction

schools.

of

plan
to the

In

conclusion
no

to

tion

bv

one

the

let

me

that

say

quick overall solu-

financial

local

Many

problems

government

today

short of the introduction of selec-

people

—

including

some

who should know better are of
the opinion that foreign operations
are less expensive than domestic
operations, and therefore—in the
case

of the petroleum industry—

foreign oil is "cheap" oil. Anyone
in the industry who has producing
operations abroad can tell you that
this is far from the case,

can

credit

do

controls.

for

There

companies

—

which

four

corners

of

friends

been

but whole

been altered

distant lands

in

won

ways
many

by their operations.

International' trade

and

com¬

merce,
in brief, is one of the
foundation stones upon which the
United States has built its
pros¬
the

as

most

the world

influential

some

nation

in

today.

■

,

E. E. Hammond Heads
NASD Finance Comm.
WASHINGTON, P. C.
L.

—

Frank

Reissner, chairman of the Board

of

governors,
National
A s-

sociation of
Securities

Dealers,

an¬

nounced

the

app

of

ointment

Edmond

Hammond

E.
a s

chairman
the

of

associa¬

tion's

finance

committee.
Mr. Hammond,
a

of
anfd

governor

NASD

partner

£.

in

succeeds
the

late

E.

Curtis,

committee

as

Newton

Hammond

P.

Boston,

chairman

Frye,

former

critics claim are exorbitant — chairman of the board of Central
must be viewed from the point of Republic Co.,
Chicago.
view of the financial requirements
of such enterprises. The problem
Joins Thill Securities
is

to

earn

enough

to

are,

important and constructive

staunch

this country,

of life have

Paine, Web¬
Jackson &

provide

stockholders with a reasonable reliowever, areas in which both the turn on their investment, and at
Federal
and
Ftate
governments the same time help provide tve
tive

many

Recognition must also be given
ber,
the fact that profits of international

State Legislature in 1958.

there is

paVed W"h diS"

the

out

politics

if

factors

or-

never

action.

pertaining to
foreign operations It must be recognized that such opeiations are
long-range, that they^ are fiUod
Wlth risk, and that the road to
basic

the

to

the earth with great skill and un¬
daunted
spirit.
Not
only have

industry is to invest abroad,

received

committee of the Legisla-

a

ture.

fac^

I also believe that knowl-

lessen dealer

of

issues

on

^+1

of tHc market ^>as

an

System,

billion, I
purchases

This action has,

instances,

submission
••""■'J

$1

some

a

was

program

important,

expedient

com¬

income.

same

owned

the line, as well: it Ameri-

tain

years.

with

privilege and some
the danger of allow¬

the

credit

tion notes from two to five years.
I have some reservations

this

the

or

abroad.

perity, its security and its position

.

financing through bond anticipa¬

sound¬

business

United States income taxes

and trachoma.

being placed

State.

opera-

the credit of the State of Cali-

on

nurses

ei£n governments in attracting
American c a p 11 a 1 investment,

borrowing

mindful of the strain

hospitals

and

the

While

to

activities

faster than doctors
be obtained. All-

an(j

it must be encouraged to do so by
building aid bonds during recognition here at home of cer-

in

passed

was

refer

individual

any

ing increasingly interdependent.
American enterprise has been a
and Iran is promoting simmajor factor in this revolutionary
ilar long-range activities. In Saudi
process.
Our business and indus¬
Arabia, schools are being built trial
community has spread its
faster than teachers can be found,

bv

law

a

doing

fact is that a

Hpal of constructive snd for-

million

capital

obliga¬

P>ush

fornia

year

have

investors

substantial

ments.

State

constitu-

a

which

then

lease

funds

require

two

issues

developed

to

and

Emoloyees'

investments but to whom the tax

advantage

would

sole trustee of the New York State

to provide capital funds.

credit of the

and

used

amendment

of mak¬
institu¬

borders. In

New York to allow municipalities
to
extend the life of temporary

This

to

pany

comprehensive development pro¬

guarantee
Authority's obligations. Such

imagina¬

and

not

was

I

financial

have

variety of matters
usually pointed to the making of
intelligent market decisions.
a

on

tance

gram,

secondary support
of the municipal bond market. As

important way

ing sound, flexible
tive

.

individual

our

issues.

felt that this

attractiveness

the

own

regard> j believe the MidtUe
£ast bas suffered from some rather
tWs

designation would
national market not

a

by

program

prepared

al,o

district

York

informational

an

on

wttiiin their

l)ges

the State-wide

tional

One phase of our activity is the

/

quire member banks of the Fed¬
eral Reserve System' to hold a
certain
percentage of their re¬

responsibilities.

self-interest,

directly to the Authoi exagj.erated stories, featuring the
of a default on any th
f £
automobiles and

Authority.

the

Assistance

York's

have

to seek

interest costs.

New

educa-

would

in- this

raised which is of extreme impor¬

For

case

action
Another

r

the exten-

for

monies

funds

available to most of

State

doing everything it

a
solution to the problem of fi¬
nancing municipal construction at

stimulate

should

commercial bank participation in

aid

These

been paid

con¬

useful

a

market opera¬
requirements.

open

reserve

the

On

to Treasury

discounted

and

rate.

3%

can

afforded ' treatment

be

securities

experience with

our

state

tion.

complement to the older and more
general instruments of discount

at the

pays

believe

credit

higher rate. • Municipal obligations

■;

have had first lien

are

sive

be

municipal obliga¬

use

collateral, it

as

economy

encouraged.

trol shows that it

wishes to borrow from the Federal
.

I

the

Authority could

expenditures

years
this tax
sovereignty carries
only privileges, but provision has insured that U.'S.-*

that

ognize
also

We felt that the

this form of selective

bank

a

of

areas

be

to

acceptable collateral are dis¬
counted at a rate at least half
per

resources.

capital

Recently another issue has been

troleum industry or any other income derived from foreign
opera¬
dustry—can do business only with
tions. That this should be a cur¬
those governments which are ab-i
rent issue is somewhat surprising.
solutely reliable with regard to
It has long been a policy of our
the fulfillment of their commit¬
ments.
No competent manage- government to encourage business¬
men to invest and
operate abroad.
ment can afford to risk stockholdSince 1918 our income tax laws
e!rs' funds in countries whose
have provided that no U. S. citizen
records are stained by broken
or corporation should have to
pay
contracts and instances of bad
full U. S. income taxes on
top of
faith.
Those nations ^yhich have foreign taxes already levied on

In their own
independent nations
that Federal action be taken to
The Federal Reserve could ob¬ sell its
bonds at
a
better
rate must
do
everything possible to
increase investor participation in tain the cooperation of all lending than could the individual district create an atmosphere of stability
the
institutions
in
municipal market to more
screening
credit and we expected to pass this sav- for
business
enterprises which
closely equate supply with de¬ requests on the basis of purpose ings on to them. To assure a more will help to develop their natural
mand. One means is through use as well as credit worthiness. A favorable
rate, a reserve was to resources and improve their econof the Federal Reserve's discount statement of aims and principles be established for the Authority omies.
operations. At present, commer¬ prepared by the representatives of which would guarantee the lull
xheso
countries have
another
cial banks can borrow from Fed¬ these
institutions could provide payment of interest and principal
equaUy important obligation: to
eral Reserve banks at a rate of standards to be applied in grant¬ on
1. s. obligations of 12 months. In appjy the revenues obtained from
3% if they use as collateral Fed¬ ing
credit requests and specify addition
the. Authority would foreign (Investment to productive
eral
As

and

v-:A

to certain basic principles of inter-

Bonds

the

supply.
Proposed Correctives

bonds

nomenclature

designations; and the role
that should be played
by the
various levels of government.
•

area

Both Here and Abroad

approaches I have money market.
suggested should aid in
easing
A committee, appointed by
the situation, consideration might Governor Harriman, of which 1
be
given to resumption of the had the honor to be Chairman,
voluntary credit restraint program submitted a series of legislative
which
called
operative in 1951.
Such a pro¬ recommendations
gram
would supplement general tor the creation of a Financing
While

credit would not add to the money

policies is in order.

*

the

obligations;

obtain

provide

to
for

mechanism

area.

taken to make it easier
funds for these purposes
without sacrificing the benefits of
credit restraint?
A re-evaluation
goals of monetary

efforts

my

the

of the role and

School

Marketing

Thursday, June 13, 1957

.

Prospects for Petroleum

bid

to

to

Finally, I would like to discuss

methods of

to secure

declined

desire

the widest distribution of munici¬

bill,

such

although

public borrowers are at competi¬
tive
disadvantage?
Should
not
steps be

highest

procedures;

marketing

pal bonds.

tant

sale

bond

methods

simpli-

.

Retirement

the

duty bound to seek
return the market

am

of

fication

or

brief comment, H. R. I—the Fed¬

policies of the
than is gen¬

stabilizing

the

particularly

be

System
of
school bonds alone totalled nearly

Effect of Tight

{

purchases

1957

Retirement

.

increasingly

large

funds

MILWAUKEE,
Austin is
ties

now

Corporation,

needed Broadway.

'

Wis.

with

—

Thill

704

Reed

Securi¬

North

1

Volume 185

Number 5646

.

.

The Commercial and Financial Chronicle

.

57

(2781)

Continued from
page 7

ment

Business Implications of Expected
Population and Income Changes
look the fact that the same
popu¬
lation waves which will
stimulate
market
opportunities may
well also

taken

operate.;, As an
would
you f- agree

business

would

let's

more

focus

certain

attention

education

»

The '

posed

by

mounting numbers of junior high,
high, and college age stu¬
dents point to a further enormous

senior

increase in the prestige and
pow¬
er of educators over
the next dec¬
ade. In my

veniences
not

to

former
which

has become overshadowed
the "town? group during the

by

past 20 years.

K

trary,

j > The aging of our population, es¬
pecially • pronounced in the pro¬
jected rise in persons over 65 years
of age/ is

.likely to have signifi¬
political" implications.
Can
major ^continuing tax reductions
for business or individuals
really
cant

be in prospect to the extent that
social security and allied health
and welfare * programs
are
pro¬

gressively-liberalized in the face
of mounting political pressure
by
older voters?

trations
the

These limited illus¬

merely

broadest

public

kinds

of

some

of

changes in

policiesJwhich

to follow from

in

suggest

likely

are

the expected shift

population

age
distribution
the next decade.

over

Operations

businesses also cannot escape the
effect
of
future
population
changes. - As one small item—the
demand for

simply

summer

terrific.

jobs will be

Far

im¬

more

portant to management, there will
be a sustained and
pressing need
for skilled and experienced work¬
At

ers.

time when early retire¬
demands
may
be

ment

rising,

valued

be less able to lose

may

older

workers.

Industrial

relations problems promise to be¬
come more

complex. Can manage¬
new ways to
strength¬
their positions around the bar¬

ments find

gaining table when skilled
ers

are

so

ployees

want

the management's

em¬

benefits

more

too?

work¬

other

but

and

scarce

leisure

more

What

will

to

answer

be

even

~

"raiding" by companies des¬
perately
short
of
managerial
.

skills?

Will

it

be

necessary to
employees to

urge former women
to

ren are

In

ing
or

work

after

their

child¬

well established in school?

short, the prospects

clear

that

near

seem

there will

numbers
the

of

be

fairly

increas¬

people

living in
community

business

but whether the supply of skilled
and experienced workers will be

adequate is far from certain. Man¬
agement

incentive

plant and office
only grow.
More

to

mechanize

operations

implications for

can

manage¬

ment from

anticipated population
changes might be mentioned, but
now

increased
On

the

incomes

inflation

omy.

'

•

is
in¬

little future

ef¬

con¬

in

the

essential

are

to the future growth of the

let's consider what repercus¬

sions may arise from the
project¬
ed changes in income. Here
again,

important

developments

foreseen "outside"

as

well

can

be
"in¬

as

econ¬

Other Income

From
the
of

a

most

important

further
to

seem

implications
gains would
(1) acceleration

income

involve

consumer

mands

Implications

management standpoint

and

business

de¬

for

something "new" and
improved quality; (2) relent¬
less demands of employees for
still higher wages,
salaries, and
fringe benefits; and (3) shifts in
the availability of long-term funds

for

to

finance

future

expansion into
hands of pension trusts and
allied institutional investors.
the

Research studies in recent

toward

consumers

services

longer

the

years

goods and

which

they buy.
No
.shortages
dominate

do

consumer

thinking;
no
longer
does the average family feel com¬
mitted to buy through distribu¬
tion channels just as the manu¬
wholesaler deems best;

or

rather, the average buyer is def¬
initely becoming more selective
in what and where he
buys. Al¬
most any consumer product which

looks

now

tially

as

II—or

or
performs substan¬
it did before World War

just

even

few years ago

a

—is rapidly on its way out, if in¬
deed
it has not already disap¬
Consumer

emphasis
is
upon
"newness" in product selection to
a degree at least as
high as at any
previous time, and the outlook is
for

this

attitude

to

persist and
strengthen. Obviously behind this
viewpoint lies greater ability to
be

selective

more

because

Rising

incomes generally, and
specifically the steady ad¬
vances
in family
incomes from
bracket to bracket,
obviously have

profound

a

American

postwar
nized

that

effect

markets

years.
a

It

near

labor

costs

is

upon

during
well

recog¬

revolution




the
has

for

higher

the

Who is to say
not become in-

will

creasingly

"fixed"

rather

well

as

next

decade''

thesp

cir—

In

af-

management

can

requirements with increasing care
to insure that
every effort is made
to

improve

agement
to

the

productivity?

faces

come

allied

an

extent

increases

pay

that

problem

"automatic"

allowed

are

substitute

a

Man-

for

to

be-

"merit"

raises, and "across-the-board" increases

are

permitted

to

Will

the

next

decade?

debatable

This

subject,

but

is

a

I

very

person-

ally believe that money will average a good deal tighter over the
next 10 years than
during the past
10.

There

variation

will

of

average.
In
the
general

be

considerable
around

course

event,

any

to

this

keep
busi-

nesses

funds will be needed than

generated

from

Charles

A.

Eaton, Jr., VicePresident, Fidelity Union Trust
Co., Newark, Vice Chairman.
Cowles Andrus, President, County Bank & Trust Co., Passaic,
Charles
E.
Clifton, President,
The Trust Company of New Jersey, Jersey City.
Robert
G. -Cowan,
President,
•

within

can

be

business

Robert

J. Kiesling,
President,
Camden Trust Company, Camden.

County National Bank, Flemington.
:
'
:
L
.

...

,

.

.

Elwood F. Kirkman, President,:

Boardwalk National Bank, Atlan-;
tic City.
Henry Knepper, President, First

Camden National Bank and Trust

for

the

survival

of

well-

"big" companies, how¬
ever.
In short, the odds are very
strong
that
the
projected
in¬
or

in

creases

income

decade will

mean

an

next

consumer

mar¬

obvious carry-back

success

creasingly

the

acceleration

an

of obsolescence in

kets—with

for

upon

will

depend in¬

better knowledge

of markets and the introduction of

which

products
average
sumer

have

prospects

well

of

above

high

con¬

recall

that

the

earner

with

typical

mixed
wage

and

come

for

at

least

only human to want
it's

equally

human

17

years.

nomic

more

for

income;

manage¬

Executive,

Company of New

Jersey, Jersey

City.
The

Ladies'

Committee,
in
charge of the activities for wives
and

families of
aaa iai"lut:s 01 delegates at the
aeiegaxes at ine
-.Phvention, will J>e headed by
_

Mrs. F. Raymond Peterson.

members

of

the

Other

Committee

in¬

clude:.

/v;: ♦.
George
Munsick,
Chairman; Mrs. Frank F.
Mrs.

ViceAllen;
Beyer; Mrs. Robert

Mrs. Walter E.

MVq^°Charleq'a ^aton
{jhailes A. Ea o^ Jr

M^ wnii^

Mrs.
Kil

T

(Mm.WUlmm J Km^

MrTmnrv'

?4^an^Mr^
jr

Fmnk

Frank A

Sidton"

W

Weber

*

^ v?Dsr.

; DES MOINES, Iowa—T.

William K. Mendenhall, Executive Vice-President, New Jersey

and

political overtones

trust

investment

of

policies

Appoints Representatives
derson & Co.,

C. Hen¬

Inc., Empire Build-

inS» members of the New York

neck.

power by professional
tutional
investors
through
tutional
investors

ing

insti-

through

their
their

mounting stock holdings are not
to be dismissed lightly by
any
management planning its strategy
for the next decade.
was

a

time

If there

when

ever

attention

longer-range financing
portant, it is now.
A

to

imgrowing
incomes will
was

be

where.

at

hand—almost

That's

ment

if

any

manage-

can

over,

all

every-

really expect.
Morethere were no difficult

Accordingly, I'm happiest making
a

forecast of growth and problems
than one predicting their

rather

Make
over

no

mistake, we'll

the next 10 years.

Walter E. Beyer, Vice-President
nnri

?•

Trust Officer

\ -2

tlonal

Boardwalk Na-

I
1*7 ' 7-A•*A.•
Bank, Atlantic City, Chair-

John

P.

Marsh

passed

away

June 2 at the age of 83. Mr. Marsh
was

founder

of

the

investment

brokerage firm of John P. Marsh
&

Co., of Chicago.

awp1?t

Richard

L.

Meyer, Vice-Presi-

dent> Guarantee Bank and Trust
Company,
Atlantic
City,
Vice-

V **Jrr

Tnc0rnorated

a.aa?,a lo in®

647

South

ot/

Sunn*

duuui

(Special to The Financial Chronicle)

tution, Newark,
Charles B. Miller, Chairman of
the
Board, Peoples
Bank
and
Trust Company, Hammonton.
James B. Van Mater, President
Trust

*

i

Marache, Dofflemyre Adds

Lu'cy

Penns Grove,
John W. Kress, Executive VicePresident, Howard Savings Insti-

lands

u1

blreet*

LOS ANGELES, Calif.—Robert
T.

Officer, Atlantic HighBank,
Atlantic

National

Highlands.

Frank F. Allen, Executive VicePresident, Asbury Park National
Bank and Trust Company, Asbury
Park, Chairman.
Archie C. Barbata, President,
Bank of Nutley, Nutley.

Wright has been added to the

staff

of

Co.,

634

Marache, Dofflemyre &
South
Spring
Street,

members

the

of

Pacific

Coast

Stock Exchange,

With Pacific Coast Sees.

1

(Special to The Financial Chronicle)

BEVERLY HILLS, Calif.—John

Clem

W.

has

Company,

affiliated

become

Pacific

with

Coast

Securities

Wilshire

9201

Boule-

yarJ He_was ^rmer^ With Daniel Reeves & Co.

Charles Parcells Adds
(Special to The Financial Chronicle)

pany,

and

vt

staff of First California Company

chairman

Mrs>

n

jcia Miller has been added to the

iiicoipoiaieu,

man

Reception Committee

I L
P
M
Y%
Jonn r. lvlarsn

(special to the financial Chronicle)

Hotel Committee

-

ind the degree of exercise of vot-

re¬

It's

Zimmer,

especially
under Bankers Association, Princeton.
and Midwest Stock Exchanges,
Rising incomes ; F. Raymond Peterson, Chair- are announcing the appontments
provide considerable comfort in man, First National Bank and of C.-Edward Hines, as registered
meeting this problem. But there Trust Company, Paterson.
c
representative in our Burlington,
still remains the crucial question
John P. Poe, President, First Iowa, office and also Robert J.
of
how much of the
projected National Bank, Princeton.
O'Neill as registered representalarger incomes will be saved and
Mary
G. Roebling,
President tive in our Sioux City,
Iowa,
how will the funds be channeled and
Chairman,
Trenton
Trust office.
into business?
All that can be Company, Trenton.
Mr. Hines was formerly with
said here is that continued instiFrank W. Sutton, Jr., President Dempsey-Tegeler Burlington oftutionalization of savings through and Trust Officer, First National fice and Mr. O'Neill was, with
pension and allied funds will have Bank, Toms River.
M. Wittenstein & ^
™
«
Company.
a
profound and growing impact
Frank
A.
Weber,
President,
upon business finances.
The eco- Garden State National Bank, TeaWith First California

salary

ceived successive increases in in¬

C.

present tax laws.

emotions

(including myself) has

Jersey, Newark.

Harry

T. C. Henderson & Co.

Rising Costs and Opportunities
I

"on of

Vice-President, Commercial Trust

organizations,

absence.

acceptance.

Executive

William L. Maude, President,
Howard Savings Institution, Newark.

problems to solve, there wouldn't
be any real need for most of us.

tee

known

Menagh

SaYin&s Banks Associa-

Company, Camden,

Business

typically
branded
merchandise so long as the latter
continues
to
be
competitive in
style,
performance, and
value.
This does not imply any guaran¬

B

7:

-

will

and

v^ornpany, Newark.

Percy

William J. Kinnamon, Execu-;*^
live Vice-President, Hunterdon £

practices
and
policies.
"Trade-up"
should
become
an
even stronger
keynote in product
development and merchandising.

recognized

upon

Banking

-

ing Company, Newark,
H.
Douglas
Davis, President,
Plainfield Trust Co., Plainfield.
Roy F. Duke, President, Fidelity Union Trust Co., Newark,

money" conditions
present persist during

at

Company, ;Morris-

National Newark and Essex Bank-

"tight

as

Trust

under-

jobs of varying skills. Yes, personal income gains over the next
10 years will involve
rising costs
at least as much as
opportunities
for expanding markets.
such

ristown

town, Chairman.

between

differentials

pay

'■

__

Frank Durand, President, First

rnmmwiHiiir Cnmmiiit**
National Bank, Spring Lake,
Cooperating Committee
S. Guernsey Jones, Vice-PresiGeorge Munsick, President, Mor- dent, National Newark and Essex

over

tributor

quality

more

President,

■

effect upon manufacturer and dis¬

and

Connolly,

.

Braddock, 16 Central
Pier> Atlantic City, Secretary.
economy with rising
p.
Palmer Armstrong,
Chairdemand much more in the way
man> Monmouth County National
of new products and services. All
Bank, Keyport.
this cannot be achieved without
Sylvan G. Fletcher, Vice-Presiadequate financing. The key to dent and
Treasurer, Camden Trust
financial success obviously lies in
Company Camden
profitable operations.
Closely
Ernest ' R.
Hansen, Treasurer
allied and highly important will
and Trust officer, Perth Amboy
be ability to compete for the inSavings Institution, Perth Amboy.
stitionalized savings of the same
people whose incomes will be adMeeting Places Committee
vancing.
Bruce P. Dimon, President, NaLet me repeat my plea for all tional Bank of Ocean
City, Ocean
of us to be realistic—rather than
City, Chairman,
pessimistic
or
optimistic
about
J.
Milton
Featherer,
Cashier
the decade ahead.
Certainly, the and Trust Officer, Penn's Grove
opportunity for profitable growth National Bank and Trust Corn-

more

David J.

Membership of the Committees
mcludes the following:

than

rising

as

ford not to study its future labor

of

higher income. Equally important
to management, however, is the
noticeable tendency among fami¬
lies with higher incomes to insist

Con™ittees. representing New

T

,

demands

future

peared from the market.

Convention of ASA September 22-25

or

wages and benefits.

have both

more

precedent

economy and
expanding at recent rates
have
revealed
an
important; is going to require a great deal of
change in the attitude of many money. In all probability, more
,r

Committees Announced for 83rd Annual

iersey banks, for the 83rd Annual Federal Trust Company, Newark,
''momentum" in waee mid salart Convention
of
the
American
Harold J. Curry, Cashier, Phildemands
A. comoanv mav weH bankers Association, which will lipsburg National Bank and Trust
have
to
experience
substantial
held at Atlantic City, N. J., Company, Phillipsburg.
declines in profits for more than
22~25' were announced to-: Peter De Leeuw Jr President,
one year before it can
expect re'
: '
^a. ,on Community Bank, Garciuced union
sheer

of

power

mine

.

.

side" the company.

had

"not'Utoea&ate

tne

_

more

return

of

This

a

businesses

en

that

have

advancing

facturer

Internal

v

The internal operations of most

luxuries.

business.

on

absence

of

'

imply
will

comes

fect

and

more

salaries,
especially
when
are being squeezed. When

cumstances,

likely to

recoup much of its
status in the
community

economic

and

"variable"

judgment, the "gown"

is

un¬

and

more

profits

spending levels providing largely
for basic necessities to much
high¬
er
levels affording wide discre¬
tionary spending for modern con¬

on

developments.

problems, in

in

are

is

wonder

earlier postwar movement of mil¬
lions
of families
from
income-

widespread adoption of full voting
rights for 18-year-olds?

But

Impor¬

It

impact of rela¬
tive income gains as marked the

from

Educators' Rising Importance

distribu¬

decades.

income gains

noted earlier.

as

orable

some

result

incotne

recent

likely. however, that the next 10
years will see quite the same fav¬

changes in legislation pertaining
to

further

sight,

illustration,
that

in

over

tant

bring about some farreaching
changes
in
political
thinking affecting the social en¬
vironment within which business
will

place

tion

new

to

where the money is going to come
from to pay ever nigner wages

Mich.

DETROIT,
C.

—

has

Hutchinson

Lawrence

become

con¬

nected with Charles A. Parcells &

Co.,

Penobscot

bers

of

the

Building,

Detroit

and

mem¬
Midwest

Stock Exchanges.

Hill, Darlington Branch
Hill, Darlington & Co., members
New

York

associate

Stock

Stock

Exchange,

branch

office

under

the

Tprnmp

T

at

and

Exchange

members

American

have, opened a
150

Fifth

Ave.,

co-management
Solomon

and

John

Jerome J. Solomon ana Jonn
Schmidt.

of
F.

*

.

from page 2

Midwest

the

Board of

111.—The

CHICAGO,

Stoclf

Midwest

the

of

Governors

&

Exchange approved the following
presented
standing
committees

Walter

Executive:

Buhler,

J.

new

stretch reducing mill, a rod mill,
and a fifth open hearth furnace

Kinnon; Clemens E. Gunn, Cunningham, Gunn & Corey (Cleve-

due

to go into operation in late
1957, the full effect of recent ex¬
pansion will not be felt until the
1957 year is over.
1958 therefore

land); Edde K. Hays, Central Re-

should

public
Clarence A.
Horn, First of Michigan Corporation
(Detroit); James W. Pope;
Edward F. Thompson, Jr., Lam-

be

still

another

1957,

Lone Star's product output

crease

capacity by
There

than 20%.

more

is

has

more

certificates

future- income

for

Hollins,

Jr., Chairman, Harris, Upham &
Co.; Guenther M. Philipp, ViceChairman, Paine, Webber, Jack•son
& Curtis; Fred W. Fairman,

of

their

five

are

and 47%

Jerome
F.
Tegeler
(St.
Louis); Clyde H. Bidgood; Rob¬

olis);
ert

C.

This

amounted t to $6,100,000
in
1956, or a hefty $2.31 per share
more actually earned but not re¬
ported as such. As we all real¬

Chairman*

Jr

William

D.

William

f

E.

C. Wilson; Thomas S.
Koehler; John M. Marston, Ball,
Burge & Kraus (Cleveland).

method is both accurate and hon¬

the

translate

Robert

ize, the certificates do not excuse
payment, but merely defer it, this

of the Freedom

,

of

spiiit

should

t

encG

sav

that

■

raised

sum

million

redctliea-

>.

was

has

what

of

pe0pje

the

in

eriv^n I

b^en

past

has

^ Pc 1

ats

«

not

(not genuinely di-v

reeled) in showing • them" their
interests
Accordingly it has
,fwn 1";eresis: Atcoroingiy, it nas

this

in the years before television
total

f

Opposes Special Pleading
Much

audience, I should say that this
was

cooperaun^ com

from free enterprise.-

away

radio and print advertising— }I,e
vn.inwr
mpmh<m«
in
fhp
been directed

via

munity organizations undertook to

(Cincinnati);

Co.

&

.

.

the

in

was

txy° ycars °i beatingthe oushes,,•

really needed to be

and

us

Children. The to-

needed

amount

United Na¬

—

neighborhood of $68 million. After

1q^a th/voar following
1950, tne year loiiowing

foundation

Joseph B. Reynolds, Benj.

Bartlett

tal

Train tour, the American Heritage
* «■ " "
»
„nnnpratino.

ppr

ler-

i-i-

......

,

Tn
In

Meersj the conclusion

W

Henry

Vice
ce-Chairman;
guson;

of their wives.,; >

Something
jnn„,
done!

F. Thompson,

Edward

Aid

Overseas

ican

tions Appeal for

Latent Responsiveness

^Yilson.

Finance:

taxes.

.

.

other shibboleths that would lead

43%; of

clubs.

country

their members had failed to vote—

Jr., Bache & Co.; Robert L. John,
Woodard-Elwood Co.
(Minneap¬

but rather has set up a reserve to

adjust

V.

last.

^

__

__

Gerald

Admissions:

necessity to
plant
improve¬
ments in five years for income tax
purposes,
the
management
has
elected not to report these savings
as earned (as do some other com¬
panies and most of-the railroads),
amortize

Louis).

(St.

interesting
item in the earnings statement not
widely recognized. As Lone Star
one

and trembling, this

^

.

Bros. & Co; Henry

son

one

decline Advertising

T

W. Meets,
White, Weld & Co.; Jerome F.
Tegeler, Dempsey-Tegeler & Co.

for these additions will in¬

year,

but

gone.

was

*he

company;*

banner

economist

all

Finally

exile.

into

In fear

Chairman; William E. Ferguson,
Vice-Chairman, Thomson & Mc-

With bright prospects for
what about^ l958?
With a

and

■%

in the

ensuing year:

creased."

r

that went over his head,
one
after another they went

reports

_

continuous and shameful

a

A. C.

production and sales, earnings per
share might be substantially in¬

made

they

another

after

One

;

to

included radio mes- economist appeared before the
percentage of informed and sages on leading programs, full- King
qualified voters who went to the page advertisements in 23 leading
«Ynnr ma4e<!tv "he auavered "I *=
polls. Back in 1896, 83% of our magazines and over a thousand
reduced dhe subject of eco- "
qualified citizens had voted. By advertisements in local newspa- "ornks to a single sentence.
1916, the figure had dropped to pers across the country.
0'
r
will
revpal
71%. By 1944, it was 53%. And
The observable result in influ~
^
''
1948 showed the all-time low of encing public opinion? So far as
fdi|m e u „hp pr0nomists
51%. This was agairist a record anyone could determine—nil!
cl
} J
® ° .?OQlw. *
of 80% in Sweden and 83% in
WorW Trade Campaign,
I."
England. The worst of it was that fafied, I should say, because there..junch'M
y '
this lackadaisical attitude toward was very little that the individual
•
*
...
.
f.
•%,
the first duty of the citizen was citizen could imagine himself doIn attemPts to sell a better uni¬
not confined to the ignorant or jn„ about jt it failed to touch him derstanding of our economic sysindigent. Far from it! A study as6a personal problem; it failed to tenf, it is necessary to be even «
made in Syracuse, N. Y., right af- point out a course of personal acS J
than in the^ field of
politics, for we are entering upon
ter the 1949 election showed that llon _ even assuming there was
*
"of
^
areas
legitimate- debate andr
32% of the city's lawyers had one—which lie could embrace
are in
competition with the pro- •
with any sense of participation or
failed to vote, 28% of the banlcponents of big government,
ers, 28% of the doctors, and 23% acc0mplishment
of the teachers. In Syracuse there y A second failure was the Amer¬ planned economy,-and all the-'
.
.

Arthur C. Allyn, Chairman,
Allyn & Co., to serve for the

by

anticipated increase in

m

half

other

the

Combatting the Piopagand ists
For Socialized Power

of

Board

Til—The

'HTPAfin

and ' commanded
produce a text
could understand.
economists

the

from page 11

he

standing Committees

The Security
I Like Best
With

Continued

Exchange

1957 ;

Thursday; June 13,

.

.

(2782)

Continued

■

Chronicle

The Commercial and Financial

58

been discounted as special nlead-,
"ing.
Some woel'ul examples, I

less

•

think

?•--

have been in the controver— **

engendered by the Freedom Ji, Thte appeal failed, I think,,-between management.-' and'S
Train into active participation in cause there was inadequate com-- iahor'"'^Thp "-union :?ets
forth
an:#
the elections that year.
The rer munity organization. Experience ^vp,ifittmt r,rp«pntc• a(
tion

est.

- •

However, having use of the
Floor
Procedure:
Thomas
S.
for a number of years be¬ Koehler,
Chairman;
Norman
paid is quite important, Freehling, Vice-Chairman, FreehnrGvlous
particularly when we see what ling, Meyerhoff & Co.; Walter
of company replies in kind. In study vclimate
backdrop—creates
dentiai year.
'-Sfter study,' it has been shown)
the management has done with
Encouraged by this success, an
the $1.50 per share the shares sold
Jfor originally 10 years ago.
The K Havs- James W Pcnm
Frdnk aU-out effort was made in 13.32 to
a„. suCh s„ecial pleading-par-i'
money has been used to reduce Jia. Rogers- Arch'C
E
Dotv '
^
persuade qualified citizens to regticularly when it seems to concernf
nogers,
the company's indebtedness, and I
/vrc^n vMster and vote. Millions of aollars
In the case of a company or an the-interests only of special*
Public
Relations:
Harry, A.* of ra<j|0 and television time and- industry, there is no better group
>gr0L]ps. h'-Tt-.
v
: ? V ^ •
v
consider it an important plus in
Baum, Chair man, Wayne Hummer space [n newspapers, - magazines, of advocates than its employees-, .-;p
h _
evatfgernfpd
ex-'
my evaluation. There are several
& Co.; Scott Davis, Vice-Chair- and
billboards was donated
by well informed and armed with a
.
more years covered by these cer¬
tw
io involvp:
man; Gordon Bent, Bacon
Whip- media owners and advertisers. The- vital interest in the business. Too ^ho
tificates.
pie & Co ; Seymour E. Clomck; campaign rwas
planned, by the often we find that this source **
for
Hie
of
V
The truly
difficult phase
of B
Frankhn
Houston,
Dallas most modern methods known to much-needed local assistanee is
re
evaluating a stock is normally the Union Trust Company (Dallas);
advertising, beginning with nsy- overlooked in the planning of nayou re-,
intangibles.. Being in close con¬ George H. Knott; William S. Macchological
research and
ending tional and even local campaigns.
-t
tact with the company has, in this
fadden, Piper, Jaffray & Hop- wjth the talents of some of the Also often neglected are the com-v,' JJ1
j
case, made it unusually simple. A wood
(Minneapolis);
John
M. most brilliant creative men in the munity leaders, whose civic
case
in point: the Board of Di¬
Marston;
Howard e p.
Morris^ field, all of whom volunteered clinations will respond quickly to
ZtXl'rl
rectors. It is an unusual one, com¬
Taussig, Doy & Co. (St. Louis); their services. Did it succeed? The a program which promises to achin'w fifo
posed of several small town bank¬ Morris M. Moss, Morfeld, Moss &
records show that the percentage complish good ends.
,
^en
on
ers, a florist, an editor, a doctor Hartnett
(St.. Louis); James G. Gf all citizens voting in 1948 had
In the successful cases I have
6
'
11
3a
1 e t
and an automobile dealer
among
Peterson; Leslie B. Schwmn 7 L. been 51%. JL1X the 1952 campaign, cited, there has dlWflj'D been d
In VAXV- XCllt.U.j
Uv V/ll
U 1 flj
lllyl v
1.1 Clo
always Dvvil a
V ..> cite another
ib.
m
'
the 26 members. Few, have na¬
Let me
example.B. Schwinn
& Co.
(Cleveland); 63% of all Americans of voting "sales force" involved—thousands
tional prominence though all are
interesting research;
disclosed that,'
regionally noted- Only three had
any previous knowledge
bored with;)
of the
money

fore it is

-

e«*nbal ingredient is peisonal
selling at the local level,

f^urf

a^f

wardDov^n
Montgomery Watd. Do
^ those adverlis
^1?'-- I
such,

^

^dpd ^
^

L"

behind the barn

.

--

•,

\

J

.

steel business.
»

made

But each is

and

man

knows

.

a

self-

what

it

takes to get things done, primarily
because each has done it. As
pio¬
in

neers

have
cess

their

own

achieved

fields,

degree

a

many

of

suc¬

the merchant

princes of old
would hardly have dreamed pos¬
sible.

A

afraid

to

board

like

tackle

this

is

anything

not

ambi¬

tious.

Above

all, there is an unusual
confidence that is hard to describe.
Lone Star Steel the

At

manage¬

ment has

the

it, the steelmen have it,
the sales depart¬

directors,

ment,

and

the

even

customers

have it. Its plain, unshakable con¬
fidence in what the future holds.
After any big market
rise, such
as Lone Star has
seen, stockhold¬

begin to wonder if maybe it

ers
,

isn't time to sell.

To

posite would be the
correct

thing to do.

motion,
stock

the

to

forces

new

highs

nearly

Once set in
that
can

years to come. It would

to

the op¬

me

more

push
last

seem

a

for

wise

stay with the management that
made their original invest¬

who will

grow

than 3,600% in
That kind of esti¬

more

10 short years.

.

advisers to the

as

-;------

-

cause"'Too"^'much"

Americans registered to vote actu-

Willis B.

—oaij-

jn
jn

appreciation

Rubin

Company;

Securitv

Selected

Edward

Sunervisors

American

P.

and

111

Stoes

of

'

Chicago.

have

and

become

William

F.

associated

as

thoughts and actions of Amer-

icans:

will respond to

The public

the degree that they see

MILWAUKEE, Wis.—Miss Joan
Wendel

This understanding is based on
fundamental principle—a pnnciPle that underlies the success or
failure of any attempt to influence

a

the

J... With Milwaukee Co.

To sell the American

regis-

)

..A.w

V-i

.

T

/A

1

tTA

people
4-K/WW

problem of involving people.
•

r,rinciDie

an

-

Miss Wendel

firm's

-

will

Milwaukee

Rayne will

cover

serve

in

-officer

the

*

Campaign Failures

Mr.

Racine.

i, f,0„„0niiv

oinnfl
.

Since failure is fiequently

instructive

With F

W

Clark Co

than

success,

let

me

dra& a skeleton or two from our

exchanges,

campaign in behalf of world trade,

of

S.

Alice

&

M.

Draper, Sears & Co., 50 Con¬

gress

Street, members of the New

York and Boston Stock

Exchanges.




,

in-

nersonal

.

cil

was

prevailed

up

r^eir"a^ef on t

J'

^
single

the electric issue of a
vertisement Robert Young
ri

d

"

that Asaph

the controrcrsy over

B

try without

and all the

enterprise

system

blessings^it has brought

•

indeed
t

A

•

.

changing

rpbe

can»^»»

you

...

!

P

_

L

«

^

editorials all

were

being

the

promised -inrou.^n car.

PTWfRa
service.
•

through-car"

Dr0mi«ed

svlvaflia

^

•

.
Phrasing-

the

Issue

understand economics.
-

There

is

fable

a

about

an

X

an-

kingdom for advice.
„

,

Coun-

to conduct

,

,

.

.

•

n-

4.-

^

Confused

manded
and

by their conflicting
and
cohnsel,
he
com-

them

to

prepare

a

short

could

other exfv

cite many

simple text on economics for

touched t e springs

tional

1

involvement

to point

out

After

many

and

t

.
brought

*

action, but I would like to make
comment on your own problem
which

has
tenor

been

bave

been

""""

of

disturbing

my

looking

thoughts.
at

the

I

research

'°.W

conducted in the 'thirties into
publics relative pieference

..
,

a

a

In fury, the King banished half

objective

over

but

daj- ^

_

essential to American prosperity.

the

-pext

...»

standing of our economic system,
as well as a greater appreciation
0f our political rights and duties,
Most people find it difficult to

in the Fulton National Bank Bldg.

with

trains,

very

indivisible, and there is -country, and within hours, the.
need of a better under- jvjew York Central and the Penn-

was

associated

, •.

through-railroad service to the;

there
as

that expanded foreign trade

now

'

coast: "A hog can cross the coun-

free

great

them in their Lancaster, Pa. office

is

/

our

months, they
brought him many volumes replete with charts and graphs.

Light

adran;

;t is even more true when we try
to build the same appreciation of
our economic freedoms—including

even

announce

Snndstone cam^

cient King' who' troubl.ed by the amples of public opinion advertis-*
economic woes of his- people, jng jn the field of business thaft moie called upon the economists of his . 8 ... th
rfn
f na.-.

Doxey has been added to the staff

—

0f

senting their respective cases imr' the public interest, the noise of

preserving our political freedoms,

theories

Mass.

^

•

Hard to Understand Economics

XT' Alt

Mea, you must involve them. You
Milwaukee
Company, * 207
East must persuade them that your
Michigan Street, members of the cause is theirs.
You must show
Midwest Stock Exchange, it was them how their own well-being
announced by Joseph T. Johnson, and
that of their friends and
President.
—
neighbors is directly affected.

publi^ ser™ clo®et
In 1946, The Advertising

BOSTON,

t>™k«n§ interests and the raiM-,.
,i°ads. No mattei how much theiF1
writers thought they were pre-.

such volunteers, and their enlistmerit is an important part of the

doms

LANCASTER, Pa.—E. W. Clark
Co., members of the New York
Stock Exchange and other leading

m

the long-continuing fight waged?
tn advertising .r-r- ----- thej
« pages between

said

be

the cnuus ui
mc
efforts of

their own

interests involved.

Rayne,

tered sales representatives of The

.

Draper, Sears Adds

cannot

U1
of

Hon1SsfP1Lour MoUel JohTw People which is simply waiting to
Evers, President, Commonwealth eausfand "some unTeSandlng0 of s"pp?rt worth(y causes or-10 brin5
Edison
Comnanv*
William
V
cause and some uncieistanding ot about a greater appreciation of
Kahler, President', Illinois Bell
If
of persuasion.
our responsibilities as citizens in
Telephone

,

T

-

-

,

mate of growth 10 years
ago was,
after all
just Texas-talk.
.

....

any went to the polls that year. •
wem LU
umiBoyer, Treasurer, Republic Steel
These
bUe action campai;,,s
Corporation,
Cleveland,
Ohio-, h
b
fascinating and heartGoodrich
Lowry, President,(
experiences for many
Northwest Bancorporation, MmAm9r\c~n<i ^ho
chared
in them
neapolis, Minn.; William G. Mar- ^
reVealed an enormous latent
Chairman
of
the
Board,
responsiveness in the American

has

ment

serve

Board of Governors are:

(

■

.

q
or

^

Volume

185

Number 5646

.

.

.

The Commercial and Financial Chronicle

privately-owned, as against pub¬
licly-owned, utilities.

country,

Do

think

you

should

be

electric

publicly

owned?

This is the hardest place on the

utilities

-

Don't know..

;

y

Is

there

such

not

yours

business?;

13.6%

•

Such
our

say

a

V,,«■ '.v'-->i- '■,""

is

the

land

blunted

Americans

And

over.'

a

people,

We dote

h

we

reserve

coin

before

y

conjure
up
spectre of monopoly.,

the

.

were

drawn

(by

ernment

support
attention to

V

products

as

works

gov¬

me

call

fact

in

a

only : when

•

the word government own-

dence

are

advocate

public opinion

exact

as

as

ment.

'•' rings false, the jury is at liberty to

.'h:'

think

the

conclusive

that

Commonality of
hands until it

involved.

evidence
this

ours

sees

is

quite

own

interes

This is not because the

important that we know
today's young people are
thinking and what the nature of

the

often

called

v/hich

And

intend

we

to

act

in

the

public's interest, we had better be
real about it, for they have pretty
Shrewd instincts.
;
"h"
,

-

£ Persuasion, Not Propaganda

v,

'v Somehow this fact is reassuring.
It is good to known that in

a

free

can

sell

a

the shareholders,

the

on

I

>

of

v

as

they do,

fearful of

our

we

future.

And to the

government-owned

by

public, and

are not

audited

outside firms.

the

FOCUS

ideas

millions

and
been

never

"keep

have

of

City,

according to an an¬
by Herbert R'. Ander¬
son,
President. Mr. Reed, who
joined the organization in Febru¬

of

your

head

an

rector- of

advocate

an

as

officer in the United

States Naval Reserve.

He is

Di¬

Consultants,
Princeton, New Jersey.-

public

down"

relations..

And

in

this

context

I

like

Co.

to

saw

Rejoins Samuel Franklin

Grant

more

Government-owned

power

virtually

free

Grant

record

voters.

ON

In

a

shortly,

numbers

we

of

relatively short

*

*

the

strike

"

*

labor

■

the

Franklin,

purpose,

ribbed

will
new

pe¬

THE

recently

r

Joins Bache Staff

(Special to The Financial Chronicle)

(Special to The Financial Chronicle)

CHARLOTTE, N. C.
L. Robb is

ANGELES, Calif.—Lucien

now

—

Holland
Co.,

with Bache &

Johnston Building.

Caforio has been added to the

staff

of

the

change.

Joins

Bateman, Eichler & Co.,

453 South
of

has

steel,

Bateman, Eichler Adds

R.

He

Creger & Co. and

J. Logan & Co.

blow."

the

Company, 215 West

Seventh7 Street.
been with J. D.

op¬

LOS

t

-:

strength to

know,

us

.

.

and edged with

To

from

Next year our high schools will
begin to graduate record numbers

students—and

us

we

(Special to The Finanoial Chronicle)

.

the will to fashion as * LOS ANGELES* Calif.—Charles
W. Cottle has rejoined Samuel B.

feel,

we

as

us

Spring Street, members

Pacific

He

Coast

Stock

Ex¬

previously with
Marache, Dofflemyre & Co.
was

Zilka, Smither

PORTLAND, Oregon
O.

Van

Harley
Zilka,
Co., Inc., 813 Southwest

Hise

Smither &

Alder Street.

is

now

—

with
:

-

FUTURE

Columbus and Southern Ohio Electric Co.



a

Economic

any

public to keep rates down;
suppliers and labor to pay

the

riod, the number of young voters
will begin to outweigh the number

the

have

"Grant

power of

for

another,

company—is constantly under
from the government and

have

support

it

the

pressure

of

militant

been

nouncement

Furthermore, the p u b 1 i c 1 y-,. so clearly, as poets sometimes
do,
utility—and again I mean what is needed in our times. "
,y "

that industry understands
prime secret of public rela¬
tions, there is no limit to the
a

York

owned

the

even

;has

discussed

quote John Drinkwater, who

degree

advertising to gain

Reed

elected Vice-President of Distribu¬
tors Group, - 63 Wall
Street, New

of

interest and the welfare of all.

to the

erations,^ are

need not be

be

can

school

We would not have it otherwise." these
pressures,
and the public
long as the American people should be aware of the difference.

react

for

make

Chadwick

At the same
time, it was an¬
If I nounced that Robert
Di Anderson
understanding of our has ben made Associate
Director
utilities .are,., fundamentally, - full:: American
public I know they love of Sales
Development of Distribu¬
and irrevocable monopolies who a
fighter for a just and honorable tors
Group. 1 Mr, Anderson, who
do not need to renew their fran¬
cause, a cause that is persuasively
chises;
have - no tax problems, presented in terms of their own joined the company in 4954, was
formerly with Kidder, Peabody &
make no comparable
accounting
.

JVIn contrast,

nation of free

men.

must

Group Appoints
Reed, Anderson

S.

served

Do

As

if

we

upstanding

be

may

we

Americans will stand beside you.

,

dividends; and from the future to
provide for growing needs.

and

have

I

that

sion—between the ways in which
our enemies work and the
way in

American people are selfish. It is
because
they are smart.
They
don't w7ant any wooden nickels.

job

Then

them fully aware of the issues.

persua¬

propaganda and

future.

Disf.

59

anything ary of this year as Director of
help, it is. in the Sales Development, was formerly
monopolistic; but in effect, they manner by which this task is ap¬ a member
of the Economics Fac¬
are
more
nearly contractors to proached; Advertising can be use¬
ulty of Yale and Rutgers Univer¬
the public* whose contracts (fran¬
ful. Do it one way, however,, you . sities
and
also
Special Corre¬
chises), come up for reviewC pe¬ .will find that it will not help, and
spondent for "The Economist" of
riodically; whose rates are regu¬ it may prove to be a most, expen¬
London;- During World War II he
lated; whose books are audited by sive way of talking to yourselves.
are

from

;

educational

our

high duty.

for materials and
manpower;
from the stockholders for larger

between

it

on

all.

Yes, this is the vast difference

American

will sit

its

reject it

on

free

and

is

If

Public utilities

those

that apply in our law courts—in¬
was substituted for public
^ownership, only 15% of the re-- cluding the 'one which says that
spondents. voted for the govern¬ if any part of a witness' testimony

yership

"/ I

your

owners,

that

educational

what

against the

and

that govern this evi¬

just

companies—as

It

public accountants; and who an¬
nually ' must
account
to
their

is that which concerns the interest
of the public itself.
rules

—

More: conduct of the business, and to the
government for taxes;
>

magic

the

ble in the court of

to.

just. referred

■

it's,

our

sell

presents admissible evidence. And
the only evidence that is admissi¬
-

let
significant

■

will learn its magic

we

power;'JBut

The

research

'tVhen

and

of this,
a

>

between

ownership.

;> In

and more

many thou¬

sands of shareholders)

y■

to

The

private
enterprise
will be much greater in the years
immediately ahead.

Contrasts Two Types of Utilities

-

voters.

ownership

persua¬

appreciation for

privilege but

as

the

public

threat of 'government
gobble, should be not only your

we

and
on

services, is only beginning.

I wonder if the public might not
have a different attitude if the

public ownership

it

decisions

advertising to

well

as

nation,

a

•

of

use

ideas,

"t

distinction

as

accept

we

own

evidence.. /
The

while

salesmanship.
Only,
the right to ring the

"private ownership,;* you in¬
-Yon-

yet,

win

of

creeping

not

the good avocate.

immediately .''you

:

do

love

we

on

make- our'

^interest.

the

to

*

older

of

country sound

job that must be done

campaign

power

react to their propaganda the
way
less fortunate people do the whole

sulate yourselves from the
public's

the

fall
that

our

strong.

and

What baffles the Commu¬

is

reject propaganda

of words in

power

that

publicly-owned utilities
by that I mean America's

world

publicly-owned

a

great

nists

thing as a privately-owned utility—unless it's
jthe farmer who owns a Delco set?
Jte

to

ground.

Publicly owned___ 55.6%
Privately owned..; 30.7% 'V

*

sion

weapons

Answer

'

«■

A

globe in which to hoodwink peo¬
ple into thinking that black is
white, or that evil is good, or that
slavery is freedom. Our enemies'

privately

* or

,,■",
.

and

'■ ;

.

that have made

men can distinguish be¬
tween propaganda and persuasion.

.

Question

(2783)

-

■;

60

The Commercial and Financial Chronicle

(2784)

.

.

.

Thursday, June 13, 1957

A; INDICATES

Now in

Securities

ADDITIONS

SINCE

Registration

ITEMS

•

PREVIOUS
REVISED

ISSUE

•

A" Applied Research Laboratories
Academy Life Insurance Co.
May 27 (letter of notification) 1,296 shares of capital
April 18 filed 750,000 shares of common stock (par 50
stock (par $1) and 71 shares of class B stock (par $1),
cents) to be offered for subscription by military, Na¬
tional Guard, active, retired or reserves, personnel and
pursuant to previous options.
Price—$8.55 per share.
Proceeds—For working capital. Office—3717 Park Place,
not to the public at large. Price—$1 per share. Proceeds v
Glendale 8, Calif: Underwriter—None.
t—For operating capital.
v
'
Office — Colorado Springs, >
/.
Colo. Underwriter—None. Offering—Expected in about * / Associates Investment Co. (6/19)
month.

one

..

'

.

'

May 24 filed $20,000,000 of 20-year subordinated deben¬
tures due June 1, 1977. Price—To be supplied by amend¬

.

Acme Tool &

Engineering Corp.
April 4 (letter of notification) 100,000 shares of common
stock (par 10 cents). Price—$1 per share. Proceeds—
For leasehold improvements; purchase of equipment,
inventory material, etc.; and for additional working ;
capital. Office — 4142 Howard Ave., Kensington, Md.
Underwriter—Williams, Widmayer & Co., Washington,
.

D.

C.

Agricultural Equipment Corp.
March

1

500,000 shares of com¬

(letter of notification)

stock

mon

Price—50 cents per share.

(par 10 cents).

Proceeds—To reduce obligation,

working capital./Address—P.
Colo.
Underwriter—-Mountain

purchase tools and for
Box 322, La Junta,
Securities Corp.,

All America Expansion Corp.,

Pasadena, Calif.
May 3 filed 184,000 shares of common stock, of which
©2,000 shares are to be offered to public and 92,000 shares
issued to promoters. Price—To public, $1 per share; no
proceeds from sale to promoters. Proceeds—For general
Business—Purchase

purposes.

oil fruits

in

grown

writer—None.

President.

and

of

resale

Brazil and other countries. Under¬

LeRoy R. Haynes, of Pasadena, Calif., is
'
/

-

.

,

,

„

—

Underwriter—The First Trust Co. of Lincoln, Neb.

Allied Products of Florida, inc.
May 1 filed 130,000 shares of class A common stock (par
$1) to be offered to stockholders of record about June 10,
1957; rights to expire about June 25. Price—$11.50 per
.

share.

Proceeds—To

retire

York:

bank

Hutzler

Bros.". &

working capital and to reduce

bank

Underwriters

borrowings.
and

Lehman

Brothers,

■;'/'I v';*/•/;' "v ; j.-/

^

Salomon

—

both

■ ./

Bankers Fire & Marine Insurance Co.

.

Underwriter—None.

//- ;v v../;r/

Oil

&

Mine

Corp., Sutherlin, Ore.
Feb. 11 (letter of notification) 71,710 shares of common
stock (par 10 cents).
Price — 75 cents per share.
Pro¬
ceeds—To go to selling stockholder. Underwriter—L. D.
Friedman & Co., Inc., New York, N. Y.
•

(Conn.)

Bridgeport

for each

shares held; rights to expire on June 24.

seven

share. Proceeds—To retire bank loans
(presently outstanding $600,000) and for general corpo¬
rate purposes. Underwriters—Smith Ramsay & Co., Inc.,
Bridgeport, Conn.; and Chas. W. Scranlon & Co., New

Price—$26

per

Haven, Conn.

/

./..;/

Browne Window

;,

,

/./■••_/ ',/

•'/

-

April 10 (letter of notification) 82,500 shares of
stock

Petersburg, Fla. Underwriter—Atwill

ers.

Co., Inc., Miami

common

cent). Price—At market. Total offering
$300,000. Proceeds—To selling stockhold¬
Office—1400 East Jefferson Ave., Dallas, Tex. Un¬
one

not to exceed

derwriter—Wm. B. Robinson &

Ar American Brake Shoe Co.

Co., Corsicana, Tex.

Butler

June 11 filed 119,162 shares of common stock
(no par) to
be offered to
employees in accordance with

company's

purchase and option plans. Price—Not greater than
price on date of offfer (but not less than 85%
price).
; •
•
.
V,

(he market
of such

.

•

offered

to

public

residents

Price—$7.50
capital.
Office—49

working
dence, R. I.

in

Rhode

share.

per

Island

Westminister
Underwriter—None.

American

Hardware

and

Proceeds—For

St.,

Provi¬

—

Distributors

of

general

mer¬

April 8 filed 118,000 shares of
being offered in exchange for

stock

common

(par $12.50)

stock and class B

common

Locks, Inc., at the rate of one
share of American Hardware for each two
Kwikset com¬
mon
shares and 55,500 American Hardware
common

chares for

150,000 shares "of Kwikset

stock.

offer

The

is

conditioned

class

B

common

its acceptance

upon

not less than 85%

of

of the issued and
outstanding Kwikset
common and class B common
shares by June 28.
Under¬

writer—None.
American

Income Fund, Inc., New York
May 24 filed 500,000 shares of
capital stock (par $1).
At market.
Proceeds—For investment. Under-

Price
W

±7~r?ne'

burton H. Jackson is President.
~

York

Invest-

Securities Cycle Research Corp.,

New

American Provident Investors
Corp.

Feb. 15 filed

50,000,000 shares

of common stock

(par one
working
Office—Dallas,
Underwriter—Peoples Securities (So., J. D. Grey,
of New
Orleans, John S. Tanner, of Dallas, and C. L.
Edmonds, of Houston, three of the 22
directors, are
Chairman, Vice-Chairman and President, respectively

cent).

Price—$2 per share. Proceeds
capital and general corporate
purposes.

•

Ames

(W.

13 filed

R.)

Co.

funds

—

For

(6/18)

50,000 shares of capital stock
(par $2)

—'fo be supplied by amendment.
with

from

private

sale

new

share

for

each

4.11

shares

held; rights to
expire on June 21. Price—At par ($25 per share). Pro¬
ceeds
For the purchase of the Barnstable pipeline.
Office—25 Iyanough Road, Hyannis, Mass. Underwriter
—Coffin & Burr, Inc., Boston, Mass.
—

C & D

stock of Kwikset

common

one

Batteries, Inc.
(letter of notification) 14,000 shares of com¬
mon
stock (par $10) to be offered for subscription by
stockholders and employees.
Price—$12.50 per share.
Proceeds
For machinery, equipment, inventories and
working capital. Office — Washington and Cherry Sts.,
Conshohocken, Pa. Underwriter—None.
March 28

Corp.

Proceeds

—

Price

Together

of

$500,000 of notes to
insurance firm, to retire bank
loan; for expansion and
working capital. Underwriter—Dean Witter &
Co., San

& Beano and Stone & Webster Securities Corp. »■.
(jointly). Bids—Expected to be received about the mid- \
die of July.-';/V" ■/*"■' •'*/-.
V-'c'.V"
•

Chance

Vought Aircraft, Inc.'.(6/26) ,V
$12,500,000 subordinated debentures due
July 1,' 1977 (convertible into common stock to and
including July 1, 1967).
Price —To be supplied by
June

filed

5

writer—Harriman Ripley
Chess

Uranium

Corp.

—

Calidyne Corp., Winchester, Mass.
May 1 filed $1,250,000 of Limited Partnership Interests to
be offered first to present limited partners at the rate of
one $1,000 unit for each $1,000 of his present
investment;
then to public. Price—$1,000 per unit. Proceeds — To
construct plant; to purchase machinery and equipment;
and to reduce outstanding demand notes. Business—Pro¬
duces electro-dynamic shaker and other vibration test

equipment.

Underwriter—None. Robert C. Lewis, Philip
C. Efromson and Thomas Gouzoula, all of
Winchester,
Mass., are the general partners of this Massachusetts
Limited Partnership.

Ar Cameron Industries, Inc., New York (6/27)
June

filed 300,000 shares of common stock (par 10
Price—$1 per share. Proceeds—For exploration
development program. Underwriter—R. G. Worth &
7

cents).
and

(U. S. funds). Proceeds—For exploration costs, etc. Of¬
Montreal, Canada. UnderwriterCo., Inc., 160 Broadway, New York./.,/

A Cincinnati Gas & Electric Co.
June 7 filed 160.000 shares of common.stock

The

the

company's Employees'

date

or

dates.

.

.

and for general corporate
purposes.

Underwriter—APA,

Inc., another subsidiary, Minneapolis, Minn.
effective June 4.




'

stock

l

Statement

'/■ :•/

A- Citizens' Acceptance Corp.
May 24 (letter of notification) $200,000 6%
ferred bonds to be offered

as

a

later

•' '

•

.

5-year de¬

follows: 50 series D at $500

Square, Georgetown, Del.

Coastal Chemical Corp.,

Underwriter—None.;

Yazoo City, Miss.

,

be offered for sale to farmers and other users of fertilizer

materials.
To

Price—At

construct

and

($25

par

per

share).; Proceeds—

operate facilities for manufacture of

anhydrous ammonia. Underwriter—Mississippi Chemical
Corp., Yazoo City, Miss. /rr;// " /'//'/
'■/ ""/"r;^'
Corp., Sanford, Me.:

^ J

March 29 filed 250,000 shares

of common stock (par 100), exercise of warrants to purchase the
following number of shares and held as follows: Gliek:
to be issued upon

at 10 cents per

•

Comico

Proceeds—From sale of shares

warrant.

to sellers of warrants.

Underwriter—None.

Corp., Memphis, Tenn.

(7/8-12)

May 2 filed 750,000 shares of common stock. Price—$2
per share. Proceeds—To construct mill; for payment on
mining leases and royalty agreement. Underwriter—
Southeastern Securities Corp., New York.

A-Consolidated Water Co. (6/17)
May 24 (letter of notification) 10,000 shares of 6% cumu¬
lative convertible preferred stock (no par—stated value
$25). Price—$25 per share. Proceeds—For part payment
of bank loans made March 1, 1957. Office—327 S. LaSalle
St., Chicago, 111. Underwriters — The Milwaukee Co.,
Milwaukee, Wis., and Indianapolis Bond & Share Corp.,

Indianapolis, Ind.
International Corp., Chicago,

III.
shares of class A common stock
(par $1). Price—$5 per share. Proceeds — To discharge
current notes payable, including bank loans, and long
term debt in the total sum of approximately $1,030,000;
for new equipment; and for working capital.
Under¬
writers
Allen Shaw & Co., 405 Lexington Ave., New
,

Conticca

March

13 filed 558,100

—

York

17, N. Y.; and Shaw & Co., San Marino, Calif.

Continental Gin Co.,

Birmingham, Ala.

April 30 filed 143,298 shares of common stock (no par)
being offered for subscription by common stockholders
of record May 27, 1957 at the rate of one additional
share for each share held
(with an oversubscription

privilege); rights to expire on June 17.
share.
and

Price—$30 per

Proceeds—For expansion program and machinery

Underwriters—Courts & Co.; Clement
Co., Inc. and The Robinson-Humphrey Co.,

equipment.

Co., Inc., New York.

A. Evans &

Capper Publications, Inc., Topeka, Kan.
March 25 filed $1,000,000 of five-year 4% first mortgage
bonds, series six, and $3,000,000 of 10-year 5% first
mortgage bonds, series seven. Price—At par. Proceeds—
To redeem outstanding bonds and for improvement of
present facilities and other corporate purposes. Under¬

Inc., Atlanta, Ga.

writer—None.

Continental Mines & Metals Corp., Paterson,

Mines, Inc.,

shares

are

to

be

Kings Mountain,
offered

for

N. C.

subscription

by

stockholders at the rate of five additional shares for each
four shares held; and the remainder will be offered to

N.I.

April 24 filed 400,000 shares of common stock (par 10
cents). Price—$1 per share. Proceeds—For exploration
and development

of properties.
Mass.

Underwriter

—

Leward

M. Lister & Co., Boston,
Continental

Carolina

.

each; 100 series D at $1,000 each and 15 series D at $5,000
each.
Proceeds—For expansion of business.
Office—
The

Turpentine & Rosin Corp.

and

50,000 shares of common
$6 per share. Proceeds—For

Stock Purchase Plan.

remaining 80,000 shares are to be offered at

for each 100 shares held.

??.
P^ce

stock of APAF

(par $8.50),

of which 80,000 shares are to be offered for subscription

283,676

in

•

Jean R. Veditz

March 29 filed 679,469 shares of common stock, of which

Apache Oil Corp.,
Minneapolis, Minn.

$2.50).

.

5 'r

fice—5616 Park Ave.,

Co., a subsidiary; to carry an inven¬
tory of leases for present and future
drilling programs-

•

loans. Under-

bank

& Co. Inc., New York;/ :

May 14 (letter of notification) 600,000 shares of common
stock (par $1—Canadian).
Price—50 cents per share.

(par
investment

rsnciscOj vdiif,

reduce

Proceeds—To

amendment.

Ar Cardinal Motel Corp.
May 21 (letter of notification) 300,000 shares of common
stock.
Price—At par
($1 per share).
Proceeds—For
construction and operation of a modern hotel. Office—
13 Army St., Henderson, Nev. Underwriter—None.

•»

-

r

& Co., Inc., underwriters of original offering, 140,000
shares; and by three individuals 110,000 shares. ^ PriceShares to be offered at market. Warrants are exercisable

Business

Underwriter—None.

of

Massachusetts.

~

amendment.

chandise.

shares held
be

.

/ 'Colonial Aircraft

• Buzzards
Bay Gas Co.
May 22 (letter of notification) 5,840 shares of 6% prior
preferred stock being offered for subscription by holders
of prior preferred stock of record May 20 on the basis

(with an oversubscription privilege); rights
expire June 28, 1957. Any unsubscribed shares will

-

Brothers, Chicago, III.
May 28 filed 40,000 shares of common stock (par $15)
to be offered for subscription by certain of the Ben
Franklin franchise holders.
Price—To be supplied by

American Guaranty Corp.
May 13 (letter of notification) 38,651 shares of common
stock (par $1)
being offered to stockholders of record
May 17, 1957 on a basis of one new share for each three
to

A- Central Illinois Light Co./y;;
I
12 filed $15,000,000 of iirst mortgage bonds due'
Proceeds—To repay bank loans and for-new con1987.
struction. Underwriters—To be determined by competi-'
tive bidding. -Probable bidders; Halsey,: Stuart &. Co*:
Inc.; Morgan Stanley & Co.; Kuhn, Loeb & Co.; Eastman
Dillon, Union Securities & Co.; The First Boston Corp.;.
Harriman Ripley & Co., Inc.; Merrill Lynch, Pierce, Fen-,
June

May 1 filed 150,000 shares of class C common stock to

pay current accounts payable
working capital. Business—Manufactures build¬
ing materials and electrical appliances. Office — St.

Beach, Fla.

Vancouver, B. C., Canada, is Presi¬
principal stockholder.-v
:
J:;

dent and

\:/;v

Manufacturing Co.

inventory purchases, to

(par

A. S. MacCulloch of

under

Gas Co.

May 17 filed 28,910 shares of common stock (no par)
being offered for subscription by common stockholders
of record June 4, 1957 on the basis of one new share

and for

stock

././/;,

Ar Barium Steel Corp., New York (6/27)
June 6 filed $10,000,000 of 5^% convertible subordin¬
ated debentures due June 15, 1969.
Price—To be sup¬
plied by amendment. Proceeds—For construction of new
plant. Underwriters—Lee Higginson Corp. and Allen &
Co., both of New York.
'
Bonanza

Price—At par ($1 per share).
Proceeds—
loans, for exploration and development work,
construction and working capital.
Underwriter — None.
To repay

ner

April 25 (letter of notification) 19,854 shares of common
stock (par $5) to be offered to stockholders of record
May 30, 1957 on a basis of two new shares for eaph 11
shares held; rights, to expire July 30, 1957. Price—$11
per share. Proceeds — To increase capital and surplus
accounts. Office
312 N; 23rd St., Birmingham 3, Ala^

loans, for expansion,

&

New

of

.',/■:///\l'r•.>•/

,

Allied Finance Co., Dallas, Texas
April 22 filed $1,200,000 6% sinking fund capital deben¬
tures due 1972. Price
At 100% of principal amount.
Proceeds—For reduction of bank loans and working cap¬
ital.

short-term

For

—

O.

States

Denver, Colo.

corporate

Proceeds

ment.

the public.

(letter of notification) 11,400 shares of capital
stock (par $5) and $125,000 of 20-year 5% subordinate
debentures dated March 31, 1957 to be offered in denom¬
inations of $100 to present stockholders, officers and

March 12

employees of the corporation at rate of 3/10ths of a share
of new stock for each share held and $300 debentures
Price-^Of stock, $15 per share;

of debentures at face amount.

struction
Miss.

purposes

in

Proceed^—For

Shamrock, Fla.

Underwriter—None.

^

con¬

Office — Laurel^
"»*•

:"

'*

Volume

185

Number

5646

.

.

The Commercial and Financial Chronicle

.

(2785)
Cougar Mine Development Corp.
(letter of notification) 560,000 shares of com¬
mon stock (par one cent).
Price — 50 cents per share.
,

March 15
Proceeds

For diamond

drilling on company's lands,
prospecting expenses, working capital and other corpor¬
ate purposes.
Office—83 Campfield St., Irvington, N. J.
Underwriter—Roth & Co., Maplewood, N. J.
—

it Cowiche Telephone Co., Cowiche, Wash.
May 23 (letter of notification) $63,000 of 20-year 5Vz%
first mortgage sinking fund bonds, series
"B," dated
June 1, 1957, to be offered in denominations of
$1,000
each.
Proceeds—For expenses in increasing telephone
service.
Underwriter—Win. F. Harper & Co., Seattle,
Wash.

..

..

/. ■

,;

■

,

.

one share to receive an
option to purchase two addi¬
tional shares at any time
prior to Nov. 30, 1959 at $4.50
per share.
The price of the
remaining 2,500,000 shares
will be $5 each, of which
500,000 shares are to be re¬
served for exercise of
options to be granted to directors,
officers and employees.
Proceeds
For industrial and
business development of
Mississippi and the South.
—

Seattle, Wash.,t

;

'

r

NEW
June

10

for

\

Government

common

on

62

page

Southern California
(Bids

•

Edison

to

be

Co

invited)

...Bonds

$40,000,000

Southern California Gas Co

XX'/^VtX/

(Monday)

Co

and

Share

&

8:30

a.m.

Bonds

PDT)

\

Debentures

(Reynolds & Co., Inc. and Lfester, Ryons & Co.)

Corp.)

*

<

$35,000,000

Thriftimart, Inc.

Preferred

Indianapolis Bond

(Bids

X

$5,000,000

June

Employees

Corp.

Debentures

»

27

(Thursday)

Cameron

Chicago & North Western Ry...Equip. Trust

(Bids

11

Co

EST)

a.m.

(R.

Bonds

&

x

Co.)

486,058

June 18
Ames

(W. R.)

program of company and its sub¬
Underwriter — To
be
determined by com¬

Witter

&

Co.)

50,000

June 28

July 1

shares

Co

and Reynolds & Co.
(jointly); Lehman
Bids—Tentatively scheduled to be received
up to 11:30 a.m. (EDT) on June 24 at 600 Market Street,
Wilmington 99, Del.

(Offering

to

>

$300,000

Cfts,

$2,235,000

(Friday)

11

(Offering to stockholders—no underwriting)

Common

EDT)

a.m.

200,000

Co..

Inc.)

25,000

(Bids

11

Common
Blyth

&

Co.,

EDT)

July 8

Inc.)

Comico Corp.

shares

(Monday)
Common

Securities

Corp.)

Preferred

(May be Morgan Stanley & Co.; DrexeL& Co.; and
Glore, Forgan & Co.) $25,000,000

.Bonds

$15,000,000

—

(Southeastern

Public Service Electric & Gas Co

.

shares

(Tuesday)

a.m.

$300,000

by

584,176

Rochester Gas & Electric Corp

Common

stockholders—underwritten

Brothers.

July 2

shares

Mines, Ltd
Randall &

(Monday)

Mountain States Telephone &
Telegraph..Common

Debentures
Inc.) $15,000,000

Lincoln National Bank & Trust Co

Co.

CDT)

Common

£

Inc.)

(Offering to stockholders—may be underwritten by
The First Boston Corp.)
$120,000,000 ,•/

Gulf States Utilities Co

(Steven

noon

Co.,

First National City Bank of New
York.__Common

shares

(Tuesday)

(A. C. Allyn & Co.,

(Bids

&

Common

Fairbanks, Morse &

Lake Lauzon

Worth

(Bids

Co

(Dean
.

G.

Common

.

(Offering to stockholders—underwritten by
Morgan Stanley
:

Industries, Inc....l,

$30,000,000

Outboard Marine Corp

Underwriter—None.

•

$250,000

•

Michigan Consolidated Gas

'& Hutzler and Wood, Struthers & Co.
(jointly); White,
Weld & Co. and Shields & Co. (jointly); Francis I. du
&

in

lands and every character of real
property.

(Offering to stockholders—underwritten bv
Johnston, Lemon &
Co. and Eastman
Dillon, Union Securities & Co.) $601,040

petitive bidding. Probable bidders: Halsey, Stuart &
Co. Inc.; Eastman, Dillon, Union Securities &
Co.; Mer¬
rill Lynch, Pierce, Fenner &
Beane, and Kidder, Peabody & Co. (jointly); Kuhn, Loeb & Co.; Salomon Bros.

Pont

17

Water

(The Milwaukee Co.

construction

sidiaries.

interest

CALENDAR

_

Consolidated

Delaware Power & Light Co. (6/24)
May 28 filed $15,000,000 of first mortgage and collateral
trust bonds due 1987.
Proceeds—To retire bank loans
and

beneficial

Underwriter—None.

(Thursday)

June

tights to expire June 14, 1957. Price—At par ($10 per
Share). Proceeds—For a construction program. Office—

St., Sycamore, 111.

and convey

ISSUE

(

stock to be offered to stockholders of record
May 1, 1957
on the basis of one new share for each seven shares
held;

112 W. Elm

of

*

DeKalb &

Ogle Telephone Co.
April 25 (letter of notification) 22,025 shares of

13

Norfolk & Western Ry
....Equip. Trust Ctfs.
<Bids n?°n EDT) $6,450,000
./-

;/;X:'/

y

certificates

Price—$1,000 per certificate. Proceeds—To
acquire by purchase, lease or otherwise, and to
hold,
own, subdivide, lease, mortgage, exchange,
bargain, sell

Continued

cents). Price —- At market (approximately 53 cents per
share). Proceeds—To selling stockholders. Underwriter
Herrin Co.,

Pompano Beach, Fla.

March 4 filed 850
the Trust,

Underwriter—None.

.

Daybreak Uranium, Inc., Opportunity, Wash.
May 7 filed 631,925 shares of common stock (par

Florida Trust,

61

$1,500,000

July 9 (Tuesday)

,

it Dividend Shares, Inc., New York
June

Southern Bell Telephone &

11

filed 5,000,000 shares of capital stock (par 25
Price—At market. Proceeds—For investment.

cents).

'Bids

Trans

Development Co.
May 10 (letter of notification) 298,000 shares of com¬
mon stock (par 10 cents).
Price—$1 per share. Proceeds
•—For exploration and development; road
improvement;
general corporate purposes and working capital. Office
•—1129 Vermont Ave., N. W., Washington 5, D. C. Under¬
writer—Landrum Allen & Co.,
Inc., Washington, D. C.

Montana-Dakota

11

Eastern

Texas

Eastern

Read

June

Erie RR.

20

working capital.

Kerr-McGee Oil
(Lehman

and

(Bids

Pacific
(Blyth

Share.

;

of

four

retire

common

Price

short-term

Price

—

purchase

&

Co.,

Straus, Blosser
225,000 shares

11:30

First

America

and

Electric

I

Bonds
a.m.

EDT)

$20,000,000

•/'

/

(Monday)
Debentures

Service
11:30

(Bids 11

CotL_it'_u^i.^____jBonds
EDT)

a.m.

&

$10,000,000

Light Co

a.m.

July 17

Common

EDT)

Bonds

$15,000,000

(Wednesday)

Great Northern Ry

.

McDowell)

&

(Bids

Equip. Trust Ctfs."

to

be

invited)

July 23

(Monday)

$4,965,000

EDT)

a.m.

(Bids

$15,000,000

Common

Hornblower

&

Weeks)

164,604

—

debt

$15

To

300,000

shares

for

each

(par

Barium

Steel

(Lee

Bonds;

(Thursday)
Equip. Trust Ctfs.

(Bids to be invited)

Bell

about $9,000,000

Household

$3,000,000

(Bids

(Lee

Hlgginson

CDT)

(Bids

Weld

Co.)

&

Rimrock

EDT)

noon

(Bids

530,712

EDT)

shares

Duke
•

(Harriman

Ripley & Co.

New

Debentures
Inc.)

(Bids 11

EDT)

$10)

Federal

Colonial

(Offering

Insurance
in

The First

exchange
Boston
as

&

Co.)

for

Corp.

stock

of

Colonial

Life

Chemical Corp

1

(Smith,

Ba-ne" & O.)

Insurance—

Inc.;

Ames

A.

E.

3**28^

&

(Bids

be

$50,000,000

to be invited)

1

Bonds

$30,000,000

(Tuesday)

Telephone

to be invited)

Co

Debentures

$100,000,000

to

be

Bonds

invited)

$15,000,000

Light Co
to

be

Common

invited)

400.000

6hares

Co., Inc.; and McLeod,
$39,372,000

October

Young,

15

(Bids

11

Ohio

Power

EST)

a.m.

November

Weir, Inc.)

(Tuesday)

Indiana & Michigan Electric Co

sh»-e-

&

&

(Bids

Utah Power

1—Common

Co. Inc.; Dominion Securities Corp.; The
First Boston Corp.; Smith, Barney & Co.; Wood, Gundy & Co.,

Ripley

invited)

*
to

Bell

(Bids

Pr-ferred

Metropolitan Toronto (Municipality of)Debentures
(Harriman

(Tuesday)

shares

Louisiana-Delta Offshore Corp
-•

Bonds
$15,000,000

10

October

and Spencer Trask & Co. will act

400,000

(Wednesday)

invited)

Utah Power & Light Co

$1,250,000

(The First Boston Corp. and Dean Witter & Co.) $30,000,000

Co., both of New York.

(Bids

-—Common

dealer-managers)

be

September 11 (Wednesday)
Jersey Bell Telephone Co
Debentures

Southwestern

265,000 shares

Co

Kaiser Aluminum &

'

(Bids

...Preference
Reid

..Debentures

$90,000,000

$12,500,000

Erie Resistor Corp
(Fulton,

invited)

Co

Common

a.m.

to

1

(Wednesday)

Chance Vought Aircraft, Inc

Power

•

of
June 26

be

September

1,200,000 shareq

Common

p.m.

..Bonds

$15,000,000 '

Louisville Gas & Electric Co
(Bids

Corp
3:45

(Minn.)

(Tuesday)

September 4
Bonda
Common

(Bear, Stearns & Co.)

(Hugo)

(Bids to

$20,000,000

Tidelands, Inc

Stinnes

August 20

„

Puget Sound Power & Light Co
(Bids

(Tuesday)

EDT)

a.m.

and William

Co.;

$40,000,000

11

Debentures

$50,000,000

Pacific Telephone & Telegraph Co

Debentures

White,
&

EDT)

'

$2,130,000

Corp

Corp.;
Blair

a.m.

Northern States Power Co.

.Debentures

__

noon

11

August 13

(Tuesday)

Corp

Finance

(Tuesday)

Telephone Co. of Pennsylvania

Hlgginson Corp. and Allen & Co.) $10,000,000

by

April 10 filed 10,000,000 shares of common stock (par
$1), of which 2,500,000 shares are to be offered
publicly
at $4 per share prior to Nov.
30, 1957, each purchaser of

—1

invited), $60,000,000

July 30

Duquesne Light Co

capital stock

shares

be

Southern Pacific Co

Debentures

Corp..

June 25

for

be supplied

to

July 25

shares

$2,000,000

Petroleum

(G. H. Walker & Co.)

per

and

(Tuesday)

Pacific Gas & Electric Co

Bonds

Debentures

(Bids

Mississippi Corp., Jackson, Miss.




11

Jersey Central Power

McDowell)

Corp

Inc.

stock.

Offer will

&

&

and

i

become effective upon acceptance
by
holders of 90% of Colonial stock, or, at
option of Federal, acceptance by not less than 80% of the Colonial
shares. Offer will continue for 30
days, or to about July
26. Dealer-Managers—The First Boston
Corp. and Spen-

Icer Trask

Bonds

July 16 (Tuesday)

Industries, Inc....

Finance

Zapata

(6/26)

Federal

376,600 shares

(Smith, Clanton & Co., Powell & Co. and Frank S. Smith & Co.)

;,June 7 filed 400,000 shares of capital stock (par $4) to
be offered in exchange for
100,000 shares of Colonial
basis

EDT)

Corp.,..

(Bids

Debentures

Blosser

(

the

Texas

/.V

<

Southeastern Fund

Underwriter—Fulton, Reid & Co., Inc.,

Insurance Co. of

a.m.

(Glore, Forgan & Co.) $3,500,000

$2,925,000

Straus,

June 24

company's common stock presently owned by PennTexas Corp. at $50 per share. Underwriter—A. C.
Allyn
& Co. Inc., Chicago, 111.

on

Allied Paper
'

Delaware Power & Light Co

•
Fairbanks, Morse & Co. (6/18)
May 27 filed $15,000,000 of Convertible subordinated de¬

Life

Common
11

Power Co..

July 15

C6¥p;-___Debentures

(Thursday)
EDT)

noon

Brothers

Cleveland, Ohio.

^Federal Insurance Co.

$25,000,000

Equip. Trust Ctfs.

(6/26)

(par $12.50).

bentures due June 1, 1972.
amendment.
Proceeds—To

invited)

West Penn Power Co

Chicago & Eastern Illinois RR.__Equip. Trust Ctfs.

Corp., Erie, Pa.

To

be

$20,000,000

June 5 filed 100,000 shares of 90-cent convertible
prefer¬

series

$30,000,000

Preferred

Kerr-McGee Oil Industries, Inc

Price—$1,010 per unit. Proceeds—Together with other
funds, to purchase, directly or through subsidiaries,
drive-in theatres; to acquire other
properties, etc.; and
for working capital. Underwriter—None.

—

Debentures

invited)

on a

shares of preferred stock and 10 shares of

1957

$10,000,000

(Kidder, Peabody & Co.; Blyth & Co., Inc.;
White, Weld & Co.;/
and Laurence M. Marks &
Co.) $30,000,000
v*--.-*1
*

$20,000,000

-

(Bids

Corp. of America, Philadelphia, Pa.
filed $375,000 of 10-year 6% debentures due
March 1, 1967; 3,750 shares of 7% cumulative
preferred
stock (par $100); and 7,500 shares of common stock
(par
$1) to be offered in units of $500 of debenture, five

Resistor

Beane)

Debentures

to

(Bids

Corp..

Transttti'ssion

Preferred /
&

(City of)

Washington Water
"

$680,000

Inc.)

be

(Offering to stockholders—bids

Debentures

$10,000,000

(Dillon, Read & Co. Inc.) $15,000,000

14

Proceeds

Co.

to

(Bids

Common

&

Co
Fenner

Pacific Power & Light Co

shares

Co.

EDT)

Transmission

(Dillon,

Eric

stock,

a.m.

(Charles Plohn & Co.)

„

Texas

expire June 15.
expansion of belt grinder division. Office—831 West Fa¬
yette St., Syracuse, N. Y. Underwriter—None.

share.

Montreal

Common

Seaporcel Metals, Inc

(par $10).

3-for-10 basis; rights
Price—$25 per share. Proceeds—For

ence

(Bids

Debentures

Utilities

(Bids

Pierce,

July 10 (Wednesday)

Co

50,000

Service

Lynch,

(Wednesday)

Brothers)

(Lehman Brothers

Erie

Common

Associates, Inc.
(Lehman

Engelberg Huller Co., Inc.
May 6 (letter of notification) 4,084 shares of common
stock (par $10) to be offered for subscription by stock¬

•

(Merrill

Wisconsin Telephone Co

(Salomon Bros. & Hutzler and Lehman Brothers)
$20,000,000

26.

May

Debs.

$70,000,000

Airlines, Inc

Investment

Microwave

Shares, Inc. Underwriter—To be
determined by competitive bidding.
Probable bidders:
Blyth & Co., Inc., and Merrill Lynch, Pierce, Fenner &
Bean (jointly); Kuhn, Loeb & Co. and Smith,
Barney &
C.; (jointly); The First Boston Corp. and Lehman Broth¬
ers (jointly); Kidder,
Peabody & Co., Stone & Webster
Securities Corp. and White, Weld & Co. (jointly). Bids
•—To be received by Standard
Shares, Inc., 15 Broad
Street, New York 5, N. Y., up to 11 a.m. (EDT) on June

to

Telegraph Co

Invited)

June 19

Associates

Proceeds—To Standard

holders of record May 15, 1957

be

Electric

(Offering to stockholders—no underwriting) 3,337,036 shares

Dominion Resources

Duquesne Light Co. (6/26)
May 22 filed 265,000 shares of common stock

World

to

Texas

19

(Tuesday)

Co
(Bids

Bonds
11

a.m.

EST)

$28,000,000

Ohio Power Co
(Bids

Bonds

$20,000,000

Preferred
11

a.m.

EST)

$7,000,000

*

The Commercial and Financial Chronicle

62

.

.

.

Thursday, June 13, 1957

(2786)

To

Continued from page
ir Fluorspar

61 'l

.

*

notification) 30,000 shares of common
stock (par $1) to be offered for subscription by common
stockholders on the basis of one new share for each four
shares held
Price—$8.50 per share. Proceeds—For min¬
ing operations. Office—433 S. E. 74th Ave., Portland,
Marion, Ind.
notification) 8,339 shares of common
stock
Price—$25 per share. Proceeds—To
go to four selling stockholders.
Underwriter—Raffensperger, Hughes & Co., Inc.; Indianapolis, Ind.
'General Aniline & Film Corp., New York
Jan. 14 filed 426,988 shares of common A stock (no par)
and 1,537,500 shares of common B stock (par $1). Pro¬
ceeds—To the Attorney General of the United States.
Underwriter—To be determined by competitive bidding
Probable bidders: Blyth & Co., Inc., and The First Bos¬
ton Corp. (jointly); Kuhn, Loeb & Co., Lehman Brothers
and Glare, 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., Washington 25,
D. C., but bidding has been postponed.
General Credit, Inc., Washington, D. C.
Aug. 17, 1956 filed $2,000,000 of 6% subordinated sink¬
ing fund debentures,, due Sept. 1, 1971, with detachable
warrants to purchase 160,000 shares of participating
preference stock, to be offered in units of $500 of deben¬
tures and 40 warrants. Price—$500 per unit. Proceeds—
For expansion and working capital. Underwriter—None
named.
Offering to be made through selected dealers.
Application is still pending with SEC.
Foster-Forbes Glass Co.(

(letter of
(par $1.50).

May 21

Equipment Corp.
shares of $3 cumulative convertible
preference stock ($50 liquidating value) being offered
for subscription by common stockholders of record June
5, 1957 on a l-for-6 basis and by holders of $1.60 cumu¬
lative preference stock on a l-for-9 basis; rights to ex¬
pire on June 24, 1957. Price—$50 per share. Proceeds—
To increase working capital.
Underwriters—The First
Boston Corp. and Tucker, Anthony & R. L. Day, both of
General Precision

May 17 filed 194,200

(6/14)
May 24 filed 1,480,787 shares of common stock (par $10)
and 170,000 shares of 5.28% convertible preferred stock
{par $50) to be offered in exchange for common and
preferred stocks of Peninsular Telephone Co. on the
basis of 1.3 shares of General common for each share
of Peninsular common, and one-half share of General
preferred share for each share of Peninsular $1 pre¬
ferred, $1.30 preferred and $1.32 preferred. No exchange
©f preferred stock will be made unless at least 80% of
the Peninsular preferred stock is exchanged.
Offer is
expected to remain open for a period of 30 days. Deal¬
er-Managers— Paine,

&

on

Corp.; White, Weld & Co.; Eastman Dillon,
rities
& Co.;
Salomon Bros. & Hutzler
Lynch, Pierce, Fenner & Beane (jointly).
received up to 11 a.m. (EDT) on July 16
General Public Utilities Corp., 67 Broad
York 4, N. Y.

June 18 at

Wall Street, New York 15,

1957

Webber, Jackson
Corp.

&

Curtis

and

the basis of one new share

on

common

May 24,

1957. Price—At par ($20
Proceeds—For construction and equipment
installation of an incentive wage plan. Office—287

and

purchase plan. Price—$2 below sales price on the New,
York Stock Exchange (estimated at $53 per share). Pr
working capital. Office—1955 W. North Ave;,
Melrose Park, 111. Underwriter—None. -.
/.

eecds—For

Haydu Electronic Products, Inc.
(letter of notification) 100,000 shares of common
stock (par 10 cents).
Price—$1 per share. Proceeds—
For working capital. Office—1426 West Front St., Plain-

.

June 3

(6/26)
'
June
6 filed 300,000 shares of cumulative convertible
preferred stock (par $100). Price
To be supplied by
amendment.
Proceeds—For expansion program and to

and

Underwriter—Berry & Co., Plainfield

field, N. J.

★ Kaiser Aluminum & Chemical Corp.

Newark, N. J.

and Dean Witter & Co., San

shares of 50-cent convertible pre¬
ferred stock, series A (par $5) and 2,476,116 shares of
common stock
(par 60 cents), of which all of the pre¬
ferred and 763,011.3 shares of common stock are being
offered in exchange for Mount Vernon Co. preferred
and common stock on the basis of one Holly series A
share for each of the 406,638 shares of Mount Vernon
preferred stock and 2l/z shares of Holly common stock
for each of the 305,204.52 shares of Mount Vernon com¬
mon
stock.
Of the remainder, 210,000 Holly common
shares are being offered to certain holders of 35,000

Works Co. common stock on a
basis; 38,333 Holly common > shares are
offered to certain finders, 60,000 shares to certain ven¬
shares of Van Dorn Iron
six-for-one

1,016,595 shares will be reserved
against conversion of preferred stock; and the remain¬
ing 388,176 are to be reserved for possible issuance at a
future date in exchange for 64,696 shares, of-Van Dorn
Iron Works common stock.
The offers will expire on
dors

Kerr-McGee Oil

Statement effective April
■ \
■ v.; ■
v'--■'
Holy Land Import Corp.,. Houston, Texas
Feb. 27 (letter of notification) 100,000 shares of common
stock. Price—At par ($3 per share). Proceeds—For in¬
V;

i;

;

Underwriter—Benjamin

working capital, etc.
Co., Houston, Tex.

Georgia Casualty & Surety Co.

—

Gibbs

Automatic Moulding Corp.

May 22 filed $1,000,000 of 6% convertible debentures
due March 31, 1967. Price—At par.
Proceeds—To in¬
crease
company's activities and for working capital.
Office—Henderson, Ky. Underwriter—Cook Enterprise,

New York, N. Y.;

standing shareholders in exchange for such outstanding
'shares and certain claims against the company; the reare to be offered to the public.'
par
($1 per share).' Proceeds—For working
Office—22105 Meekland Ave., Hayward, Calif.
Underwriter
Stephenson, Leydecker & Co., Oakland,

maining 200,000 shares
Price—At

capital.

—

'

Gob

•

writer—None.

{letter of notification) 240,000 shares of common
(par 30 cents) of which 86,610 shares are being

Jan. 21

6tock

sold pursuant to
share. Proceeds

outstanding warrants.
—

Price—$1.25 per

Underwriter

For additional discount department

and
for working capital. Office—41 Stukely St., Providence,
R I. Underwriter—Bruns. Nordeman & Co., New York,
store

be

rate of

★ Golden Salt Co.

production and sale of vitamin coated salt and to license
others with respect to such salt.
Office—208 N. Second
Government Employees

Corp. (6/17)
$661,040 5% convertible capital deben¬
tures due June 30, 1967, to be offered for subscription
by common stockholders of record June 10, 1957 at the
rate of $100 of debentures for each 20 shares of com¬
mon stock held; rights to expire on July 8, 1957.
Price
100% of principal amount. Proceeds
For working
capital. Underwriters—Johnston, Lemon & Co., Wash¬
ington, D. C.; and Eastman Dillon, Union Securities &
Co., New York.
24

filed

—

—

it Greater Finance Co.
May 27 (letter of notification) 25,000 shares of 5V2%
cumulative preferred stock (par $10) and 25,000 shares
of common stock (par $2), to be offered in units con¬
sisting of one share of each class of stock. Price—$12
per unit.
Proceeds—For making small loans. Office—
5559

North 5th

St., Philadelphia 20, Pa.

Underwriter—

None.

Gulf States Utilities Co.

May 17 filed 200,000 shares of

(6/18)
common

stock

(no par).

Proceeds—To repay a portion of outstanding bank loans.

Underwriter—To be determined by competitive bidding.
Probable

bidders:

Merrill

Lynch, Pierce, Fenner &
Beane and Lehman Brothers (jointly); Stone & Webster
Securities Corp.; Carl M. Loeb, Rhoades & Co.
Bids—




offered
one

subscrintion

for

new

share for each

—To be supplied

ing capital, etc.

bv

shares held.

at

stock

be

offered

in

units

of

one

-*

ment

'

-

—

Investors

Philadelphia, Pa.; B. Ray Robbins Co.,

Berry & Co., Plainfield, N. J.

Underwriter—To be determined by com¬
petitive bidding.
Probable bidders: Halsey, Stuart &
Co. Inc.;
Kidder, Peabody & Co.; The First Boston

Idaho

■

.

of)

$39,372,000 of debentures to consist of (a)

sinking

debentures due in varying
1967, 1972, 1977, 1982 and 1987,

fund

amounts on July 1,1962,

(b) $4,453,000 instalment debentures due Julyil,
1958-1977, inclusive. Price — To be supplied by .amendProceeds
For improvements and other capital

and

..

ment.

—

Underwriters — Harriman Ripley & Co.
Inc.; Dominion Securities Corp.; The First Boston Corp.;
Smith, Barney & Co.; Wood, Gundv & C*>
Tnc.; A. >E.
Ames & Co., Inc.; and McLeod, Young, Weir, Inc.; all

expenditures.

.

of New York.

J

-

.

.

Michigan Consolidated Gas Co. (6/17)
May 22 filed $30,000,000 of 25-year first mortgage bonds
due 1982.
Proceeds—To repay bank loans and for con-

'

program.
Underwriter—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; The First Boston Corp.; Blyth & Co., Inc.;
White, Weld & Co. and Lehman Brothers (jointly). Bids
—To be received up to 11 a.m. (EST) on June 17 at 415

struction

*

Clifford
•

St., Detroit 26, Mich.

Microwave

Associates,

Inc.

(6/19-20)

May 29 filed 50,000 shares of common stock (par $1).
Price—To be supplied by amendment. Proceeds—To dis-

Isthmus

★ Jersey Central Power & Light Co. (7/16) May 29 filed $15,000,000 of first mortgage bonds due
1987.
Proceeds—To repay bank loans and for construc¬

.

.

$34,919,000

-

May 21

tion program.

Securities Corp.,

June 6 filed

Diversified

Steamship & Salvage Co., Miami, Fla.
(letter of notification) 300,000 shares of com¬
mon stock (par 10 cents).
Price—$1 per share. Proceeds
—To purchase a ship and for working capital. Under¬
writer—Anderson Cook Co., Inc., Palm Beach, Fla.
.

May 1, 1972. Price—At par (in units of $100 and
each): Proceeds—For working capital. Office—17
W. Lancaster Ave- Ardmore, Pa. Underwriters—Walnut

$500

* Metropolitan Toronto (Municipality
(Province of Ontario)
<6/26)

*

Services, - Inc.,
Minneapolis, Minn., which will also act as distributor.
Manager

Ardmore, Pa.

filed

(letter of notification) 800,000 shares of common
stock. Price—At par (171? cents per share). Proceeds
---For mining expenses.
Office—Sidney Bldg., Kellogg,
Idaho, Malcolm C. Brown is President. Underwriter—
Standard Securities Corp., Spokane, Wash., and Kellogg,

Fund, Inc.

March 25 filed 10,000 shares of common stock. Price—At
market. Proceeds—For investment. Sponsor and Invest¬

—

.June 3

-

Investors Variable Payment

28

New York; and

common

Colo.

Underwriter

mand
r

*

three warrants to buy three common

shares.
Price—$3.75 per unit. Each warrant entitles holder to
purchase one common share at $2.75 per share. Proceeds
—To acquire stock of fire insurance unit and for general
corporate purposes. Office — Englewood, Colo. Under¬
writer—American Underwriters, Inc., also of Englewood,

(6 26)
stock, of .which

common

$250,000 of 6% renewable subordinated
debentures, due upon demand May 1, 1967,;without de¬

...

to

Corp.

shares are to be sold for the account of the
and 246,281 shares for account of selling stockr
Price—To be supplied by amendment.
Proceeds—To retire $175,000 debentures now outstanding

Marion Finance Corp.,

'

common

of

100,008

March

Proceeds—For work¬
Underwriter—Franklin Securities Co.,

^International Insurance Investments, Inc.
"
10 filed 118,140 shares of common stock (par $1)
and warrants to purchase 354,420 additional shares of
share and

Offshore

for general
corporate purposes.
Smith, Barney & Co., New York.

the

Price

Office—Syracuse,%

y

filed 346,289 shares

5

Proceeds

share.

per

purposes.

and
*

by amendment.

Dallas, Texas.

Price—$12.50

corporate

Underwriter—None.

Idaho.

stockholders

seven

general

it Mascot Mines, inc., Kellogg,

June

Ave., Walla Walla, Wash. Underwriter—None.
.

*

-

March 28

.

*

Calif.

Co., Dallas, Tex.
filed 100,000 shares of common stock (no par)

:

holders.

<par one

share... Proceeds—To equip and
and for working cap¬
Underwriters—Names to be supplied by amend¬

\

company
-

'V,

per

'

'

V

be offered to employees of company

to

Louisiana-Delta
June
:

International Fidelity Insurance
to

Letter to be withdrawn.

May 29 (letter of notification) 300,000 shares of common
stock.
Price—At par
($1 per share).
Proceeds—For

May

/..V

$5)

(par

its subsidiaries.

N. Y.

operation; to increase the number of stores;

N. Y.

'

—For

establish five super launderettes
ital.

per

working capital and other corporate
Underwriter—Steven Randall & Co., Inc., New

★ Lamson Corp. of Delaware
June 10 (letter of notification) 5,000 shares of common

*

/

;•

ment.

Ltd., Toronto, Can. (6/18)
shares of common stock (par $1).
share. Proceeds—For drilling ex¬

York.

W. Clay Merideth is President.

Price—$1

cents

purposes.

Mohawk

—

Y.

Dec. 21 filed 500,000 shares of common stock

cent).

Lake Lauzon Mines

March 18 filed 750,000

.

stock

International Duplex Corp., San Francisco,

Shops of America, inc.

Calif.

and

Ignacio Oil & Gas Co., Denver, Colo*
_
May 20 filed 650,000 shares of common stock (par 50
cents). Price—$1 per share. Proceeds—For drilling and
completion of test wells; for acquisition and exploration
of additional properties; and for working capital. Under¬

Inc., Ill S. 7th St., Terre Haute, Ind.
•

' :

.

(letter of notification) 300,000 snares-of capital

penses, equipment,

^ H-P Distributing Co.. of D. D., Inc.
5 (letter of notification) 34,000 shares of class B
non-voting common stock (par $1) to be offered as
follows;, 19,000 shares at $5 per share; 10,000 shares at
$10 per share and 5,000 shares at $20 per share. Proceeds
—For general operating funds and reserve fund. Office
—5817 Baltimore Blvd., Iiiverdale, Md.
Underwriter—
None.

— Lehman Brother^,
Straus, Blosser & McDowell, Chicago, III.,

*

Inc., Clinton, N. Y.

working capital.

and

V

^

stock, of which 100,000 shares are being offered to out¬

first mortgage
Price—90% of
principal amount. Proceeds—For equipment repayment
debt

.

(6 20)

* Klassen Enterprises, Inc., Hayward, Calif.
May 29

May 29 (letter of notification) $75,000 of
5% sinking fund bonds due May 1, 1965.
of

>

Inc.

capital expenditures. Underwriters
■New York; and

$40,000,000 of sinking fund debentures due
1982. Price—To be supplied by amendment. Proceeds—
To reduce bank loans.
Underwriters — Lee Higginson

Valley Investing Co., Inc., Utica, N.

Industries,

May 31 filed 225,000 shares of common stock (par $1)N
by amendment. Proceeds — For

Price—40

Corp. and White, Weld & Co., both of
and William Blair & Co., Chicago, 111.

^

Price—To be supplied

.

June 4 filed

Household Gas Service,

McDowell, Chicago, 111.

Kerr-McGee Oil

(6/25)

Household Finance Corp.

,

Underwriters—Lehman Brothers, New York; and Strau?,
Blosser &

,

ventory,

V

(6 20)

May 31 filed $20,000,000 of sinking fund debentures due
Price—To be supplied by amendment. Pro:ceeds—To retire bank loans and for capital expenditurei*

Underwriter—None.

July 10.
24. '

Francisco, Calif.

Industries, Inc.

June 1, 1977.

property;

of

Underwriters—The First Boston Corp*

retire bank loans.

Holly Corp., New York
Jan. 25 filed 406,638

June

May 10 (letter of notification) 10,000 shares of common
stock (par $5) to be offered first to stockholders and
agents, then to the public. Price—$30 per share. Pro¬
ceeds
To expand and finance the company's regular
line of business.
Office—70 Fairlie St., N. W., Atlanta,
Ga. Underwriter—None. Dan D. Dominey is President.

'

i*

May 31 (letter of notification) 5.660 shares of common
stock (par $1) to be offered to employees under a stock

Underwriter—None.

Hartford, Conn.

at office of
Street, NeW

it Jewel Tea Co., Inc.

share).

Homestead Ave.,

Union Secu¬
and Merrill
Bids—To be

'■

for each eight shares

held; rights to expire June 21,

Corp., New York

Webster Securities

Special Machinery Co. i

Hartford

&

New York.

Stone

(EDT)

a.m.

April 30 (letter of notification) 6,105 shares of
stock being offered to stockholders of record

per

Underwriter—None.

General Telephone

11

to

up

Manhattan Bank, 40

New York.

Corp. of America

May 28 (letter of

Ore.

received

be

Chase

.

*

charge bank loans and to finance inventory and accounts
receivable

and

expenditures

for

development

of

new

products. Business—To develop and produce components
for radar systems.

Underwriters-Lehman Brothers, New

York, who has acquired from the company an option to

purchase up to 20,000 shares of common stock at $7 per
share during the period beginning Nov. 24, 1957 and
ending May 24, 1962.
Mass.

Company's Office

—

Burlington,

Volume

Number 5646

185

.

.

The Commercial and Financial Chronicle

.

^

.

•

.

(2787)

,

New

Mississippi Valley Portland Cement Co.

Brunswick

Dec. 26 filed 1,600,000 shares of capital stock (no par), of

Dec. 14 filed

which 708,511

tures due Jan.

shares are subject to an offer of rescission.
Price—$3 per share. Proceeds—For completion of plant,
provide for general creditors and for working capital.
-Office—Jackson, Miss. Underwriter—None, offering to
the made through company's own agents.
Utilities

Montana-Dakota

Co.

ment.

writer —To

determined

be

by

bidding.

Inc.

.

v

sinking fund debentures

To be supplied
improvement and
public works. Underwriter—To be determined by com¬
petitive bidding. Shields & Co., Halsey, Stuart & Co.
Inc., Savard & Hart and Salomon Bros. & Hutzler, will
due March

by

1, 1977. Price
Proceeds—For local

amendment.

head

one

group.

—

Mid

Utah.

'

(7/1)
June 5
to

'

'

Vv

shares

584.176

filed

be offered

for

At

are

($5 per share).
change at Turner from

share for each five

matic
None.
•

per

% Underwriter—None.

Mutual

»<•

Investment

>

■

>.

■

Sharing-

Plans, Inc.,.Richmond, Va¬
shares of capital stock (par $1),
be offered trustees of profit sharing retirement plans.

rto

Price—At market.
—T.

Richmond, Va.
/"•-

.

Office— 5001; West Broad

-

.

Mutual Investors Corp.

for

^

<

May 29 (letter of notification), an undetermined number
B common stock (par $5). Price—To
supplied by amendment. Proceeds—To go to execuEstate*of Hubert L. Carter. Office—44 Franklin

Nashua, N. H. Underwriter—Kidder, Peabody & Co.,
Inc., Boston 1, Mass.
Princeton, N. J.
.

May 8 filed 250,000 shares of, common stock. Price—At
i market.

'

y

;
-

-

Proceeds—For

investment.

Office—10

Investment Advisor
Hoisington, Inc., same address.
St., Princeton, N. J.
National

—

ex¬

Underwriter—

—

units

To

of

Nassau

r
*

.Underwriters—Names to

Paramount
..

Rochester

held; rights to expire

on

•„

Qo. of Sioux City, Iowa, on the basis of 7 la

&

Each $500 note will carry a warrant to
purchase 50 shares of common stock. Price—To be sup¬
plied by amendment. Proceeds—To retire $5,000,000 of
(par 10 cents).

purposes.
Underwriters — Cruttenden,
Co.," Chicago, 111.; Cantor, Fitzgerald & Co.,

Ohio.

•

!

•




...

Underwriter

—

G. F. Church

.

Maritime

Bldg., 911 Western Ave., Seattle,

Underwriter—None.

Corp., St. Louis, Mo.
1,250 shares of class C cumulative pre¬
ferred stock (par $57).
Price—$97 per share. Proceeds
—To R. M. Realty Co., who is the
selling stockholder.
filed

Yates, Heitner & Woods, St. Louis, Mo.
Offering—Expected within the next few weeks.

&

,

Co.

on

common

stock

common stock

(par $5)

of St. Paul

the basis of

56% shares of
St. Regis stock for each share of Lumber company stock.
The offer will be declared effective if 95% of the
latter
stock is deposited for exchange (and
may be declared
effective at option of St.

Regis, if not less than 80%

of the stock is

deposited).

San Juan Horse

Racing Association
(letter of notification) 259,945 shares of com¬
mon stock (par 50
cents). Price—$1 per share. Proceeds
—For construction of a horse racing
oval; erection of
stable, etc.; in operating a race track and working capi¬
April 29

tal.

Office—1040 Main St., Durango, Colo. Underwriter

—None.

for

(par $5)
to be offered in exchange for common stock of
Milprint,
Inc., Milwaukee, Wis.,1 on a share-for-share basis. The

exchange for

Tacoma Lumber

June

Philip Morris, Inc., New York
May 28 filed 385,000 shares of common stock

—

to be offered in

of record June 4, 1957 at the rate of one new share for
each 20 shares held; rights to expire on June 25. Price

construction program.

common

St. Louis Insurance

common

Underwriters—Drexel & Co.,
Philadelphia, Pa., and Morgan Stanley & Co., New York.

corporate

Beverly Hills, Calif.; and Westheimer & Co., Cincinnati,

Wash.

St. Regis Paper Co.
April 1 filed 850,000 shares of

St., Coffeyville, Kan.
Co., St. Louis, Mo.

for

''/ current indebtedness; and for working capital and gen¬
&

Office—515

Inc.

Underwriter—Amos Treat & Co., Inc., New

July 2.

stock to be offered to stockholders and the
public. Price
,—At par $1 per share). Proceeds—For expenses incident
to development of a new concept of mechanical
parking.

—$36.25 per share.- Proceeds—To repay bank loans and

.

on

Enterprises,

Philadelphia Electric Co.
May 14 filed 609,815 shares of common stock (no par)
being offered for subscription by common stockholders

it National Telefilm Associates, Inc.
$5,000,000 of 6% sinking fund subordinated
notes due June 15, 1962, with .common stock purchase
warrants attached: and 350,000 shares of common stock

(EDT)

a.m.

Underwriter

8th

The offer

July 22, 1957, unless extended.

11

Parking, Inc.

May 13 (letter of notification) 275,000 shares of

(par 10 cents).

York, N. Y.

to

up

Rota

capital. Office—7360 Castor Ave., Phila¬
Underwriter—None.

Price—$2.50 per share. Proceeds—
of. loans and working capital. Business—
Phonograph records. Office — 383 Concord Ave., New

June 12 filed

Podasta

ceived

5,500 shares of class B
Price—At par ($10 per share). Proceeds

Pepsi-Cola Mokan Bottlers, Inc.
April 11 (letter of notification) 60,000 shares of common
stock (par 50 cents).
Price—$5 per share. Proceeds—
For general funds of the company. Office—207 West

eral

Corp.; Kidder, Peabody & Co.; White, Weld &
(jointly); Salomon Bros. & Hutzler; Blyth & Co.,
Inc.; Eastman Dillon, Union Securities & Co. and
Equitable Securities Corp. (jointly).
Bids—To be re¬
Co.

March 27

it National Tea Co., Chicago, III.
shares of common stock (par $5) to
be offered in exchange for common stock of Tolerton

on

Boston

For payment

June 12 filed 48,720

expire

gations and for construction program. Underwriter—To
be determined by competitive
bidding. •. Probable bid¬
ders: Halsey Stuart & Co.
Inc.; Shields & Co.; The First

Aug. 1. Proceeds

June 3 (letter of notification) .120,000 shares of
stock

1,200,000

Gas & Electric
Corp. (7/2)
May 29 filed $15,000,000 of first mortgage bonds, series
-R, due 1987. Proceeds—To discharge short-term obli¬

it Panorama Sales Corp.
June 3 (letter of notification)

delphia 15, Pa.

Lithium

filed

3

Bear, Stearns & Co.* New York.

man

stock.

Tidelands, Inc., Shroveport,-La.

(6/25)
shares of capital stock (par 20
cents). Price—To be supplied by amendment. Proceeds
—For equipment and working
capital.
Underwriter-

be

York.

will

Rimrock

June

Power &

—For working

shares of National Tea for each Tolerton share.

Management

Co., Inc.*, 60 Broadway,, New York, N. Y.

a

program.

Fund, Inc., New York

March 29 filed 100,000 shares of common
stock (par $1).
Price—At market.
Proceeds—For investment.
Under¬
writer—None.
D. John Heyman of New York
tsvFresident. Investment Advisor—Resource
Fund

—For construction program. Underwriter—To be determined by competitive bidding.
Probable bidders: Leh-

common

Harland W.

Corp., New York
Feb. 19 filed 3,120,000 shares of common stock (par one
cent).
Price—$1.25 per share.
Proceeds—For acquisition of properties; for ore testing program; for assessment work on the Yellowknife properties; and for cost
of a concentration plant, mining equipment, etc. Underwriter—Gear hart & Otis, Inc., New York.
Offering—

& Warficld

■»t -

Resource

be

construction

Underwriter—E. L. Aaron & Co., New

York.

loans and for working capital. Under¬
Blyth & Co., Inc. and Hornblower & Weeks,
York, N. Y., and Los Angeles, Calif.

Indefinite.

:

vision releases.

•

St.

*

Price—

dial auto¬

Pancal Oil Corp.
May 13 (letter of notificatidn) 299,000 shares of common
stock, (par 10 cents).
Price—$1 per share. Proceeds—
For oil drilling expenses.
Office—27 William St., New
York, N. Y. Underwriter — Bush Securities Co., New
York, N. Y.

tors of

Fund,

.

Kidder, Peabody & Co.; Ladenburg, Thalmann & Co.
Bids—Expected to be received up to 11 a.m. (EDT) on
July 10.

-

-of shares of class

Nassau

Pyramid Productions, Inc., New York
Sept. 27, 1956, filed 220,000 shares of com. stock
-(par $1)
A which 200,000 shares are to
be offered to public and
20,000 shares issued to underwriter. Price—$5
per share.
Proceeds—To retire $125,000 of
outstanding 15% deben¬
tures as well as a $173,180 debt to
Trans-Union Produc¬
tions, Inc.; and for working capital. Business—Tele¬

Brothers, Eastman Dillon, Union Securities & Co.,
-Bear, Stedrns & Co. and Dean Witter & Co. (jointly);
>

1

-

(jointly); The First Boston Corp.; Merrill
Lynch, Pierce, Fenner & Beane; Stone & Webster Se¬
curities Corp. Bids—To be received at 90
Broad Street,
New York, N.Y., up to noon (EDT) on June 25.

.

each 10 shares

V

(letter of notification) 150,000 shares of com¬
stock (par $1). Price—$2 per share. Proceeds—For

lit Nashua Corp.

«

Lehman

Brothers

Light Co* (7/10)
June 4 filed 376,600 shares of common stock (par
$6.50)to be offered for subscription by common stockholders
of record July 10, 1957 on the basis of one new share for

purchase of royalty and working interests. Office—1518
Philadelphia 2, Pa. Underwriter—Walter S.
Sachs & Co., Inc., Philadelphia, Pa.

:be

1, 1987. Proceeds—To repay bank loans. Under¬
writer—To be determined by competitive
bidding. Prob¬
able bidders: Halsey, Stuart & Co.
Inc. and

of New

Pacific

Walnut St.,

;

Puget Sound Power & Light Co. (6/25)
17 filed $20,000,000 of first mortgage bonds due

July

short-term
—

Columbia,

May

supplied by amendment.

April 22
mon

a

of

preferred
(par $100). Price—To be supplied by amendment.
Proceeds—For, construction program.
Underwriter—Mer¬
rill Lynch, Pierce, Fenner &
Beane,, New York.

the basis

converting

Todd

Public Service Electric & Gas Co.
(6/18)
29 filed 250,000 shares of cumulative

$50 note ~arrd one common share.
supplied by amendment. Proceeds — To
repay short-term debt and other current liabilities and

New York.

Minerals, Inc.

*

Price

'

Mutual

For

J. C.

stock

Finance

offered in

St.,

.May 17 (letter of notification) 295,000 shares of common
-stock (par 10 cents). Price—$1 per share.- Proceeds—To
acquire real estate properties and mortgages.. Office—550
•iFifth Ave., New York 36, N. Y. Underwriter — Stuart
Securities Corp.,

—

manual service to

None.

—

C., is President and Board Chairman.

May

Pacific Natural Gas Co., Longview, Wash.
-May 28 filed $1,000,000 of subordinate interim notes due
,1963 and 20,000 shares of common stock (par $1) to be

"

^

v

of New York

S.

•

Proceeds—For investment. President

Coleman Andrews.

Proceeds
a

offered for subscription by key
employees
stock incentive plan.
Price—$90

a

Underwriter

poses.

(6/17)

on

be

Prudential Investment Corp. of South Carolina
April 30 filed 209,612 shares of common stock. Price—
$1.20 per share. Proceeds — For general corporate
pur¬

.

Office—Buckfield, Me.

:

writers

Trust for Profit

and

Corp.
May 29 filed 164,604 shares of common stock (par $10).
Price—To be supplied by amendment. Proceeds—To re¬

both

filed 50,000

19

exchange.

Pacific

duce

••

Retirement

il March

"

At par

share). Proceeds—To repay advances
.from American Telephone & Telegraph Co., the parent,
%.which owns 86 74% of the presently outstanding shares.
($100

par

liabilities

public.

-

(par $100)

rights to expire on July 31.* Subscription
expected to be mailed on July 1. Price—

held;

warrants

v.

•

current

stock to be offered to present stockholders
of preemptive rights, thereafter to the

Co.

subscription by stockholders of record

June 20, 1957 on the basis of one new

•shares

-

of capital stock

.'

Co.

per share.
Proceeds—For working capital. Office—821 N. 19th
St.,
Birmingham 2, Ala. Underwriter—None.

Oxford County Telephone &
Telegraph Co.
April 18 (letter of notification) 6,000 shares of common

'

Telegraph

of

to

pursuant to

ley & Co., New York.

-$195,253 is included). Proceeds—For buying of inven¬
tory and working capital. Office—Miami National Bank
Bldg., Biscayne Blvd -Miami, Fla, Underwriter—None.

Telephone .&

■

Portland Gas & Coke

stock

common

holders of record June 14, 1957 on the basis of one new
share for each 15 shares held; rights to
expire on July
1, 1957. Price—To be supplied by amendment. Proceeds
—For capital expenditures.
Underwriter—Morgan Stan¬

$500 and $1,000 (an offer of rescission in the amount of

States

,;4

..

intermediary in negotiating the transaction.

★ Progressive Farmer Co., Birmingham, Ala.
3
(letter of notification) 467 shares of common

May 24 filed 486,058 shares of common stock (par 30
cents) to be Offered for subscription by common stock¬

■■■„

May 28 (letter of notification) $300,000 of 8% 3-year first
and second mortgages to be offered in denominations of

Mountain

.,

None.

June

Securities, Inc. of Utah, Salt Lake City,

Outboard Marine Corp.

v

"it Mortgage Investment Foundation, Inc.

\<

America

—

—

Oil Ventures, Inc.
May 13 (letter of notification) 2,500,000 shares of com¬
mon stock.
Price—At par ($10 cents per share). Pro¬
ceeds—For development of oil and
gas properties. Office
—725 Judge Bldg., Salt Lake
City, Utah. Underwriter—

15, 1977 and $17,800,000 of 5V4% sinking fund

debentures

*

•

working capital. Office—1313 Sixth St., Redmond, Ore.
Underwriter—None.

(7/10)

(City of)

payment

deposit of at least
The offer will expire
Lehman Brothers

upon

shares.

Underwriter

May 22 filed 226,194 shares of common stock
(par $9.50)
being offered for subscription by common stockholders
of record June
10, 1957 on the basis of one new share for
each five
shares held; rights to expire on
July 1.
Price
$16.25 per share. Proceeds—-For construction
program.
Underwriter—Lehman Brothers, -New York.

(par $5) to be offered first to stockholders on
preemptive basis; unsubscribed • to employees; and
remainder to public. Price—$16
per share. Proceeds—

construction,

as

19.

effective

common

—

a

due Feb.

'

Offering—Indefinitely postponed.

stock

For

become

Plymouth Fund, Inc., Miami, Fla.
Feb. 5 filed 500,000 shares of
capital stock (par $1).
Price—At market.
Proceeds—For investment. Under¬
writer
Plymouth Bond & Share Corp., Miami, Fla.
Joseph A. Rayvis, also of Miami, is President.

and

company.

Price—At par

it Montreal

■

acted

Northwest Telephone Co.

June 7 filed $7,200,000 of 5 V4%-

'

Bruns¬

bank loans.

March 28 (letter of notification) 7,200 shares of

shares of common^,
($1 per share). Proceeds — For
capital expenditures, including construction of motel,
roadside restaurant and gas station. Business—Has been
processing and selling of gravel. Office—203 Broadway,
Monticello, N. Y. Underwriter—Walnut Securities Corp.,
Philadelphia, Pa.
•'
■'
^
'
;;:v* ■.

,

New

★ Newport News Shipbuilding & Dry Dock Co.

stock.

.

The
repay

June 6 filed 60,000 shares of common stock
(par $1) to
be offered under the
company's "Restricted Stock Op¬
tion Plan" to certain
employees of the

Feb. 18 (letter of notification) 300,000

.

to

Underwriter—Willis E. Burnside & Co., Inc., New
York, N. Y.

,

Monticello Associates,

advanced

Commission to

will

July,

on

Del.

'

_

offer

346,500 Milprint

it New Cornelia Extension Copper Corp.
May 31 (letter of notification) 300,000 shares of common
stock (par 10 cents). Price—$1 per share.
Proceeds—For
mining operations. Office—129 South State St., Dover,

bidders: Halsey, Stuart & Co. Inc.; Blyth &
Co., Inc.; Merrill Lvnch,. Pierce, Fenner & Beane and
Kidder, Peabody & Co. (jointly); Blair & Co., Incorpo¬
rated.
Bids—Expected to be received up to 11 a.m(EDT) on June 19 at Citv Bank Farmers Trust Co., Two

St., New York, N. Y.

be

Electric Power

Chicago.

Probable

Wall

of)

Price—To be supplied by amend¬

Underwriter—Halsey, Stuart & Co. Inc., New York

(6/19)

competitive

1,1982.

Proceeds—To

wick

May 27 filed $10,000,000 of debentures due June 1, 1977
(convertible through May 31, 1967). Proceeds—To re¬
tire bank loans and for-construction program.
Under-,

'

(Province

$12,000,000 of 25-year sinking fund deben¬

63

it Sea Harbor Co.
3

(letter of notification) voting trust certificates
shares of class A and 1,396 shares of class B
capital stock (no par). Voting Trustees—Louis J. Gumpert, John B. McTigue (Vice-President), William T.
790

Orr

hees.

(President), Charles G. Terry and Enders M. VoorOffice—Club Drive, Hewlett Harbor, Long
Island,

New York.

Continued

on

page

64

The Commercial and Financial Chronicle

if Strato-Missiles, Inc.
(letter of notification) 300,000 shares of common

from page 63

Continued
•

.

.

Thursday, June 13, 1957

.

(2788)

€4

Inc.

Metals,

Seaporcel

(6 19)

stock (par 10
be offered to
public. Price—82 per share. Proceeds—For new equip¬
ment and working capital. Underwriter—Charles Plohn
Incl
May 28 (letter of notification) 300,000 shares of common
stock* Price
At par (81 per share). Proceeds — For
mining expenses.
Office—404 East Main, Farmington,
Tin & Exploration Co.,

—

N. M.

Underwriter—None.

Sire

Inc., New York

Plan,

of nine-month 8% fund notes.
Price—At par (in denominations of $100 each). Proceeds
—For working
capital and other corporate purposes.
Underwriter—Sire Plan Portfolios, Inc., New York.
May 14 filed $1,000,000

Hartsvilie, S. C.
June 10 filed 60,000 shares of common stock (par $5)
to be offered for subscription by common stockholders
of record June 10, 1957. Of the unsubscribed stock, cer¬
tain employees may subscribe for up to 10,000 shares.
Price—To be supplied by amendment. Proceeds — For
working capital. Underwriters — R. S. Dickson & Co.,
Inc., Charlotte, N. C.; and G. H. Crawford Co., Inc.,
Sonoco Products Co.,

Columbia, S. C.

Columbia, S. C. (6/24-28)
3 filed $2,000,000 of 6\k.% sinking fund subordin¬
debentures due Juqe 15, 1972, of which $1,500,000

Southeastern Fund,

•

June
ated

11

Price—$1 per share. Proceeds—To
develop Hatfield propulsion system, and other projects;
for purchase of additional facilities and for working
capital.
Business—To produce machinery and equip¬
ment.
Office—70 East 45th St., New York, N. Y.
Un¬

1987.

Price—To be supplied by amendment.

principal amount are to be offered for subscription by
stockholders; the remaining $500,000 principal amount,
plus any unsubscribed debentures, to be publicly of¬
fered.
Rights will expire on July 15. Price—To stock¬
holders, 95% of principal amount; and to public, at
100%.
Proceeds—For working capital.
Underwriters—
Smith, Clanton & Co., Greensboro, N. C.; Powell &
Fayetteville, N. C.; and Frank S. Smith & Co.,
Columbia, S. C.

Telephone & Telegraph

Bell

Southern

Co.,
Inc.,

derwriter—Kesselman &

Proceeds

I,. 1966.

—

Co.

debentures due June

parent,

To repay advances from

Summers

Telephone & Telegraph Co., expected to
amount to approximately $36,000,000, and for additions

Underwriter-—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Morgan Stanley & Co. Bids—To be received
up to
11 a.m. (EDT) on June 18 at Room 2315, 195
Broadway, New York, N. Y.
and improvements.

^Southern California Edison Co. (6/26)
first and refunding mortgage
bonds, series I, clue July 1, 1982. Proceeds — To retire
bank loans and for construction program. Underwriters
—To be determined by competitive bidding. Probable
bidders: Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.; The
First Boston Corp. and Dean Witter & Co.
(jointly);
Kuhn, Loeb & Co. Bids—Expected to be received up to

June 10 filed 840,000,000 of

(EDT)

on

Gyroscope Co.

the basis of two new shares for
each five shares held. Price—To be supplied by amend¬
ment.
Proceeds—For working capital and general cor¬
porate purposes. Office—Santa Monica, Calif. Under¬
writer—Daniel Reeves & Co., Beverly Hills, Calif. Of¬
fering—Expected today (June 13).
.'
record May 31, 1957 on

San Antonio, Texas

Texam Oil Corp.,

of record March 15,

1957 on

basis of two new shares

a

held; rights to expire on July 20. Price
supplied by amendment. Proceeds—To repay

for each share

7—To

be

exploration of oil and
gas leases, for drilling and completion of wells, and for
other corporate purposes.
Underwriter—None.
indebtedness, for acquisition and

(6/19)

Corp.

Transmission

Eastern

Texas

*

May 29 filed $15,000,000 of debentures due June 1, 1977.
Price—To be supplied by amendment. Proceeds — For
new construction.
Underwriter — Dillon, Read & Co.,
Inc., New York.
Transmission

repay

•

June

on

of

one

May 28 filed $35,000,000 of first mortgage bonds, series

due

C,

Proceeds—To repay loans and
Underwriter—To be determined

1983.

construction.

for

new

by com-*

petitive bidding. Probable bidders: Halsey, Stuart &
Co. Inc.; Blyth & Co., Inc. and Merrill Lynch, Pierce,
Fenner & Beane (jointly); White, Weld & Co. and East¬
man
Dillon, Union Securities & Co. (jointly). Bids—
Tentatively expected to be received up to 8:30 a.m.
(PDT; on June 26.
Southern Discount Co.,

Atlanta, Ga.

(letter of notification) $60,000 of subordinated
non-convertible 5%
debentures, series G, due Oct. 1,
1975 (in denominations of $500 and $1,000 each), to be
offered in exchange for series D, E or F debentures.

May 23

Office—919 W. Peachtree

(A. G.) & Bros. Inc.
April 11 filed $2,017,300 of 5V2% subordinated convert¬
ible debentures due June 15, 1962, being offered for sub¬
scription by common stockholders of record May 23, 1957
on

the basis of $100 of debentures for each

30

common

(flat).

on June 17. Price—At par
Proceeds—To reduce bank loans. Underwriter—

The largest stockholder, Pyramid Rubber Co., has

agreed to purchase all of the debentures not subscribed
for by the
17.

other stockholders. Statement effective May

^ Standard Oil Co,

(New Jersey)
1,058,967 shares of capital stock (par $7) to
be offered from time to time by the company to certain
June 5 filed

executives of the company and of its wholly-owned sub¬
sidiaries pursuant to the terms of an "Incentive Stock

Option Plan for Executives."
Steadman

Investment Fund,

East Orange,

May 10 filed 100,000 shares of

common

to be offered in connection with
of

Fund

Inc.,

N. J.
merger

stock

(par $1)

into this Fund

of

Fortune, Inc., Fortune II, Inc., Fortune III,
Inc. and Fortune IV, Inc. Underwriter — William Allen
Steadman & Co., East Orange, N. J.
Stinnes

(Hugo)

Corp., New York

(6/25)

March 29 filed 530,712 shares of common stock (par $5),
of the presently outstanding 988,890 common shares.
'

Proceeds
States.

—

To

the

Attorney

General

of

the

United

New

Underwriter—To be determined by competitive

Lenrnan

Probable bidders include Kuhn, Loeb & Co.,
bromeis and Giore, Forgan & Co. (jointly).

Bids—To be received up to 3:45 p.m.
at Office of Alien Property,




(EDT)

on

Washington 25, D. C.

June 25

(par 10

selling stockholder, Ralph J. Ursillo, General Manager
of the company. Price—$1.50 per share.
Proceeds—To
drill and complete oil wells on the company's Pennsyl¬
vania and Kentucky properties and for two "deep tests"

(6/26)

on

its

as well as for working
Underwriter—Name to be supplied by amend¬

Pennsylvania property,

capital.
ment.
•

Zapata Petroleum Corp.

(6/24-28)

3~filed

$3,000,000 of convertible debentures due
1972. Price—At par. Proceeds—To retire bank loans; for

June

and for working
Underwriter — G. H. Walker & Co., St. Louis,
Mo. and New York, N. Y.

development of producing properties;

capital.

for

York.

Prospective Offerings
Airborne

May 16 it

Instruments Laboratory,

was

Inc.

announced company plans to issue and sell

May 6 (letter of notification) 6,000,000 shares of common
stock (par one cent). Price—Five cents per share. Pro¬
ceeds—For exploration of oil properties.
Office — 704

$2,000,000 of 15-year 5V^% unsecured subordinated con¬
vertible
debentures. American
Research & Develop¬

First National Bank

Corp., owner of 31,500 shares or 15.8%
borne's stock, propose to purchase $320,080 of

Bldg., Denver, Colo.

ment

Underwriter—

Wayne Jewell Co., Denver, Colo.
World Airlines,

Trans

Proceeds—Together with

debentures.

(6/18)
May 28 filed 3,337,036 shares of common stock (par $5)
to be offered for subscription by common stockholders
of record June 17, 1957 at the rate of one new share
for each share held; rights to expire on July 8. Price—
To be supplied by amendment. Proceeds — To pay for
aircraft
and
other
equipment. Underwriter — None.

Inc., New York

borrowed from institutional

•

Allied Paper Corp.

June 10 it
sell

$3,500,000

writer

York,

Aluminum

sell

proprietary

of

subordinated
new

convertible debentures.

mill at Kalamazoo, Mich. Under¬

& Co., Chicago, 111., and New
Offering—Expected about the middle of

Y.

March 18 it

and

(7/15-19)

July.

(letter of notification) 100,000 shares of class A
stock (par 10 cents).
Price—$1.50 per share.
Proceeds—For working capital; machine tools; equip¬

Specialty Co.

was

announced company

plans to issue and

cumulative convertible pre¬
$20). Underwriters—Emch &
The Marshall Co., both of Milwaukee, Wis.

15,000 shares of $1.20

ferred stock series A (par

Office — 4932 St.
Underwriter—Whitney &

development.

Ave., Bethesda 14, Md.
Co., Inc., Washington, D. C.

be

Glore, Forgan

—

N.

common

Elmo

to

investors, for a building and

reported company now plans to issue and

was

Proceeds—To build

Tripac Engineering Corp.

ment

of Airthe new

$4,000,000

expansion program.

Hughes Tool Co., the holder of 2,476,142 shares of TWA
common stock may purchase any unsubscribed shares.

Co. and

Atlantic City

U. S. Semiconductor Products, Inc.

Electric Co.

April 9, Bayard L. England, President, announced that
later this year the company will probably issue about

'

April 11 filed 500,000 shares of common stock (par $1).
Price
To be supplied by amendment.
Proceeds — For

$5,000,000 of convertible debentures. Proceeds—For con¬
struction program. Underwriter—May be determined by

purchase of new materials and working capital.
Office
Phoenix, Ariz. Underwriter — Jonathon & Co., Los
Angeles, Calif.

competitive bidding. Probable bidders: Halsey, Stuart &

—

Co.

Inc.; Kuhn, Loeb & Co., American Securities Corp.
Struthers & Co. (jointly); White, Weld & Co.
and Shields & Co. (jointly); The First Boston Corp. and
Drexel & Co. (jointly); Eastman Dillon, Union Securities & Co. and Smith, Barney & Co. (jointly); Lee Higginson Corp.; Blyth & Co., Inc.

—

and Wood,

United Utilities,

Inc., Abilene, Kansas
filed 105,000 shares of common stock (par
$10) being offered in exchange for stock of OregonWashington Telephone Co. on the basis of 2Y2 shares for
each Oregon-Washington common share and five shares
for each Oregon-Washington preferred share. This offer
is subject to acceptance by not less than 80% of each
class of stock and will expire on July 1. Dealer-Manager
April

25

-

Bank

Uranium Corp.

have

per

offered

for

June
$30

new

4,

1957;

r>pr

for

each

with rights

sharo

Underwriter—Goldman,

shares

10

to

Pr«cep',«

Sachs

For

held

&

^xd""

Co.,

of

as

19.

*op

New

.

Bell Telephone Co.
was

R.

Staats

&

Co.,

San

.

of Pennsylvania

(7/30)

announced company plans to issue and

sell $50,000,000 of new debentures due 1997.

Proceeds—
$50,000,000 of 5% series C bonds. Underwriter
—To be determined by competitive bidding.
Probable
bidders: Halsey, Stuart & Co. Inc.; Morgan Stanley &
Co.; The First Boston Corp.; White, Weld & Co. and

Pa.

expire June

—

Underwriter—William

April 25 it
To redeem

subscription by stockholders at the rate of

share

Proceeds — To increase capital and surplus
acquire Farmers & Stockmen's Bank of

to

Francisco, Calif.

May 13 filed 51,000 shares of capital stock (par $5) to be
one

used

Phoenix.

Proceeds—For exploration purposes.
Underwriter—To be named by amendment. Graham Al¬
bert Griswold of Portland, Ore., is President.
Latrobe,

offered

share.

and
'

$1 per share).

Vanadium-Alloys Steel Co.,

Douglas, Phoenix, Ariz.
announced stockholders of record May 28
160,000 additional shares of capital

was

been

stock (par $5) on the basis of one new share for each
2Y2 shares held; rights to expire on June 14. Price—$14

of America, Portland, Ore.

April 30 filed 1,250,000 shares of common stock (par 10
cents). Price—To be supplied by amendment (expected
to be

of

May 29 it
-

—Zilka,. Smither & Co., Inc., Portland, Ore.

'

bidding.

Inc., New York
common stock

700,000 shares of

cents), of which 600,000 shares are to be offered for
account of company and 100,000 shares for account of a

held; rights to expire July 1. Price—
$40 per share. Proceeds—For capital improvement and
working capital.
Underwriter—Hornblower & Weeks,
10

shares held; rights to expire
None.

redeem

Woodland Oil & Gas Co.,

May 28 filed

Feb. 27

Spalding

To

shares

each

St., N. E., Atlanta, Ga. Under¬

writer—None.

—

Indefinitely postponed

Titanic Oil Co.

(6/26)

be

Price—To

supplied by amend¬
presently outstanding
bonds, to repay bank loans and for ex¬

Proceeds

program.
Business—Meat packing firm. Unierwriters—Smith, Barney & Co.; Glore Forgan & Co.
and Hallgarten & Co., all of New York City. Offering—

June 26.

Southern California Gas Co.

Inc.

$20,000,000 of 20-year sinking fund de¬
1976.

due

pansion

Un¬

share

Printing & Lithographing Co.

first mortgage

Houston, Tex.

new

p.m.

28 filed

ment.

bank loans and for expan¬

the basis

program.

Bids—Tentatively scheduled to be re¬
(EDT) on July 10 at office of West
Broad Street, New York, N. Y.

Inc.

Wilson & Co.,

bentures

Bearing Co., Canton, O.

12

construction

out

cash, in exchange for 151,882 shares of capital stock of
Kable Printing Co. (111.) on the basis of $20 of notes and
$6 in cash for each share held. This offer which is to
expire July 12, is conditioned upon the acceptance by
holders of at least 130,000 shares of Kable stock (about
85%). Holders of Kable stock who own less than 51
shares will receive cash at the rate of $26 per share.
Office—Racine, Wis.
Underwriter—None.

filed 484,276 shares of common stock

record

carry

Electric Co., 50

Western

(no par)
being offered for subscription by common stockholders

of

to

May 15 filed $3,037,640 of 5% serial notes due Dec. 1,
1958
to
1967, inclusive to be offered, together with

working capital. Underwriters—Rey¬
Inc., New York, and Lester, Ryons & Co.,
Calif.

Roller

Timken

May 21

Co.

&

ceived up to 11

sion program and

nolds & Co.,
Los Angeles,

1957,

White, Weld & Co. (jointly); Lehman Brothers; The
Langley & Co.; Harriman Rip¬

ley

May 31 filed $5,000,000 of convertible subordinated de¬
bentures due 1977. Price — To be supplied by amend¬
Proceeds—To

series

First Boston Corp.; W. C.

2,700,000 shares are to be offered to public at
$2 per share. The remaining 300,000 shares are under
option to original stockholders at $1 per share. Proceeds
—For expansion and working capital.
Underwriter—T.
J. Campbell Investment Co., Inc., Houston, Texas.

ment.

(7/10)

$20,000,000 of first mortgage bonds,

April,

and

May 28 filed 3,000,000 shares of common stock (par $1),

Thriftimart, Inc., Los Angeles, Calif.

Power Co.

Penn

Dillon, Union Securities & Co.; Kidder, Peabody & Co.

May 29 filed 200,000 shares of preferred stock, subordin¬
ate convertible series (par $100). Price—To be supplied

Texas Glass Manufacturing Corp.,

due "

Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Eastman

Aug.

by amendment. Proceeds—For expansion program.
derwriter—Dillon, Read & Co. Inc., New York.

bonds

Proceeds—

Underwriters—Kidder, Peabody &

bank loans.

filed

3

and

(6/19)

Corp.

mortgage

Q, due July 1, 1987. Proceeds—Together with proceeds
from sale of about $12,400,000 of common stock in March

"

Eastern

Texas

West

Penn

May 29 filed 300,000 shares of common stock (par $1),
to be offered for subscription by common stockholders

of first

$30,000,000

Co.; Blyth & Co., Inc.; White, Weld & Co. and Laurence
M. Marks & Co., all of New York.
June

May 20 filed 250,080 shares of common stock (par $1) to
be offered for subscription by common stockholders of

American

a.m.

Co., Inc., New York.

To repay

of which

(6/18)

May 28 filed $70,000,000 of 29-year

11

(par 10 cents).

New York.

± Sierra

filed

June

stock

May 24 filed 340,000 shares of common
cents), of which 300,000 shares are to

& Co.,

(7/10)

^Washington Water Power Co.

June 7

record

Price—
*""*ogram.

York.

.

Eastman Dillon, Union Securities & Co. (jointly). Bids—
a.m. (EDT) on July 30.

Expected to be received up to 11

Volume 185

Number 5646

.

.

.

The Commercial and Financial Chronicle

(2189)
Byers (A. M.) Co.
May 7 stockholders approved

Consolidated

a proposal to authorize a
100,000 shares of cumulative preference
stock
(par $100) and to increase the authorized out¬
standing indebtedness to $15,000,000, in connection with
its proposed recapitalization
plan. There are no specific
objectives involved. Control—Acquired by General Tire

class

new

of

& Rubber Co. in 1956.
Underwriter—Dillon, Read & Co.,
Inc., New York, handled previous preferred stock financ¬
ing, while Kidder, Peabody & Co. underwrote General

Tire & Rubber Co. financing.
•

Central Hudson Gas & Electric

April 22 it

announced

was

sell this year about

Proceeds—To

Corp.

plans to issue and
$7,500,000 of unsecured debentures.

finance

company

construction

program.

Under¬

writer—Probably Kidder, Peabody & Co., New York.
Central Illinois Public Service Co.

April 9 it

Edison Co. of New York, Inc.
May 20, H. R. Searing, Chairman, said the company will
probably sell a new issue of first and refunding mortgage
bonds later on this year. [On Oct.
24, 1956, $40,000,000
of these bonds, series
M, due 1986, were offered and
sold.] Proceeds—From this issue and from bank loans,
to pay part of the cost of the

loans and for construction program. Underwriter—To be
determined by competitive bidding.
Probable bidders:

Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler;
Equitable Securities Corp.; Eastman Dillon, Union Secu¬
rities & Co.; Blyth & Co., Inc.;
Kidder, Peabody & Co.;
and Merrill
Lynch, Pierce, Fenner & Beane

(jointly);
Kuhn, Loeb & Co. and A. C. Allyn & Co., Inc. (jointly).

Offering—Expected late in 1957.

this

year

—

bank

repay

loans

and

for

construction

program.

Un¬

derwriters—Kidder, Peabody & Co. and White, Weld &
Co. about the middle of last year
arranged the private
placement of an issue of $5,000,000 series G first mort¬
gage bonds.

?■>

;

^Chesapeake Industries, h»c.
June

3

tion. of

it

reported company plans early registra¬
$3,500,000 of 5Vz%; collateral trust sinking fund
was

bonds due 1972 and 350,000 shares of common stock. Each
$10 of bonds will carry a warrant to purchase one share
of

stock.

common

Co., New York,

Underwriter

—

Van

Alstyne, Noel &
;-.V''V

v" '

•

Chicago & Eastern Illinois RR. (6/25)
Bids will be received by the
company up to noon (CDT)
on June 25 for the
purchase from it of $2,130,000 equip¬
ment trust certificates. Probable bidders:

Halsey, Stuart

& Co. Inc.;

Salomon Bros. & Hutzler.

ir Chicago & North Western Ry.

(6/27)
expected to be received by the company up to
(CDT) on June 27 for the purchase from it of $2,235,000 equipment trust certificates to mature annually
Bids

are

noon

from

July 15, 1958 to 1972, inclusive. Probable bidders:
Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler.

Chicago, Rock Island & Pacific RR.
Bids

expected to be received by the company in July
for the purchase from it of about
$3,000,000 equipment
Co.

certificates.

Probable

bidders:

Halsey,

Stuart

&

Inc.; Salomon Bros. & Hutzler.

Cleveland
Nov. 12 it
1957.

Electric

Illuminating Co.
reported company plans to issue and sell
of first mortgage bonds in the Summer of

was

$25,000,000

Proceeds—To repay bank loans and for construc¬
Underwriter—To be determined by com¬

tion program.

petitive

bidding.

Probable

bidders:

Halsey, Stuart &
Co. Inc.; The First Boston
Corp.; Blyth & Co., Inc.; Dil¬
lon, Read & Co. Inc.; Blair & Co. Inc., and Baxter, Wil¬
liams & Co.
(jointly); Glore, Forgan & Co.; White,
Weld & Co.

Coastal Transmission
Corp.
March 6 it was reported the
company

plans

to

offer

publicly $7,800,000 of interim notes

and 678,900 shares
of $1 par stock in units.
(Common stock not sold in units
would be purchased by

Delhi-Taylor Oil

Corp., or its
stockholders at an average price of $10
per share.)
Pro¬
ceeds—Together with funds from private sale of $40,000.000, for construction program. Underwriters—Lehman
Brothers and Allen & Co., both of New York.
•

Columbia

June 6,
and

i

sale

Gas

issuance

1957.

Pro¬

ceeds—To help finance 1957 construction
program, which
is expected to cost
approximately $84,000,000. Under¬

writer—To be determined by
competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co.

Inc.; Morgan Stanley
&
Co.; Merrill Lynch, Pierce, Fenner & Beane and
White, Weld & Co. (jointly). Bids—Expected to be re¬
September.

Columbus & Southern Ohio Electric Co.
Feb. 21 it

was

sell in the Fall

reported that company plans to issue and
$8,000,000 of cumulative preferred stock.

Underwriter—Dillon, Read & Co. Inc., New York.

& Co. and the First Boston

April

Halsey, Stuart & Co. Inc.; White, Weld
& Co, (jointly); Morgan
Stanley &
Co.; The First Boston Corp. and Harriman Ripley & Co.
Inc. (jointly).
&

Co.

and

Shields

May 6 it

this

announced company plans to sell in

was

plans

to

raise

about

bentures and

common

stock

(attached or in units). Un¬
derwriter—Lehman Brothers, New York. Offering—Ex¬
pected in August.
Connecticut Light & Power Co.
Feb. 18, it was reported company plans to sell not less
than $20,000,000 of first
mortgage bonds, possibly this
Fall, depending upon market conditions. Proceeds—For
construction program.
Underwriter — Putnam & Co.,
■

Hartford, Conn.; Chas. W. Scranton

&

Co., New Haven,

Conn.; and Estabreok & Co., Boston, Mass.




Hanna Steel Co., Birmingham, Ala.
April 8 it was reported company plans to issue and sell
120,000 shares of class A common stock. Price—$5 per

1957

$60,000,000 of mortgage bonds. Proceeds — For
construction program (estimated to cost about
$89,000,000
this year). Underwriter—To be determined
by competi¬
tive bidding. Probable bidders: The First Boston

share.

Underwriters—Cruttenden, Podesta & Co., Chi¬
111.; and Odess, Martin & Herzberg, Inc., Birming¬
ham, Ala. Offering—Expected in June.

cago,

Corp.
Halsey, Stuart & Co. Inc. (jointly); Coffin & Burr,
Inc., and Spencer Trask & Co. (jointly). Bids — Now
expected to be received in latter part of June.
and

Houston Lighting & Power Co.
Feb.

13 it was reported company may offer late this
Fall approximately $25,000,000 first mortgage bonds, but
exact amount, timing, etc. has not yet been determined.

Duk* Power Co. (9/10)
April 22 it was reported company plans to issue and sell
$50,000,000 of first refunding mortgage bonds. Proceeds
—To repay bank loans and for new construction.; Under¬

*

ton

Corp.;

Morgan

Stanley

&

Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Equitable

Securities

writer—To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.; The First Bos¬

"

Union

ceived

Stone & Webster
Bids—Tentatively scheduled to be re¬
Sept. 10.

on

Idaho

determined

it

was

announced

$3,750,000

Proceeds

of

proposes to issue
trust bonds

collateral

—

—For

Manufacturing Co.
announced company plans to offer stock¬
rights to subscribe to approximately $3,000,000
of convertible debentures early this summer.
Proceeds
—For working capital.
Underwriter—Smith, Barney &
Co., New York. Registration—Expected later this month.

Bank of

Fort Worth

Proceeds—To increase capital and
Underwriters—Dallas Union Securities Corp.

Corp., both of Dallas, Texas.

National

City Bank of New York (6/28)
May 17 it was reported Bank plans to offer its stock¬
holders the right to subscribe for 2,000,000 additional
shares of capital stock (par $20) on the basis of one new
share for each five shares held as of June 24, 1957;
rights to expire on July 22, 1957. Warrants are expected
to be mailed on or about June 28. Price—$60 per share.
Proceeds—To increase capital and surplus. Underwriter
—The First Boston Corp., New York.
General Telephone

P.

U.

Commission for authority

to issue

General Tire & Rubber Co.

an

issue

was

of

reported that this company is considering

convertible

subordinated

debentures, prob¬

ably around $15,000,000, which may first be offered for

subscription

by

working capital.

common

stockholders.

Proceeds—For

Underwriter—Kidder, Peabody & Co.,

New York.

and

for

construction

Power

&

Light

Co.

time in

some

1957

if

market

conditions

Ry. (7/17)
Bids are expected by the company to be received on
July 17 for the purchase from it of $4,965,000 equipment
trust certificates. Probable bidders: Halsey, Stuart & Co.
Inc.; Salomon Bros. & Hutzler.

it

make

feasible, and an issue of $8,000,000 in bonds in 1958. Tem¬
porary bank loans are available and probably will be
utilized, during at least part of 1957. Additional secu¬
rities will need to be sold in 1959 and 1960, amounting
to approximately $14,000,000.
Proceeds—To repay bank
*

and

for

new

construction.

Underwriter—May

Lehman Brothers, Goldman, Sachs
Boston Corp.. who underwrote last

be

& Co. and The First
equity financing.

Iowa Southern Utilities Co.

April 2 it was announced company plans to issue and
sell $5,000,000 of first mortgage bonds later this year.
Proceeds
To repay bank loans and for construction
—

program.
Underwriter—To be determined by competi¬
tive bidding.
Probable bidders: Halsey, Stuart & Co.

Kuhn, Loeb & Co.; White, Weld & Co.; Lehman
Brothers, and Bear, Stearns & Co. (jointly) Equitable
Securities Corp. and Salomon Bros. & Hutzler (jointly);
The First Boston Corp.; Dean Witter & Co.
Inc.;

Jefferson

Lake

Sulphur Co.

1956, Eugene H. Walte, Jr., announced company
plans in the near future to sell an issue of convertible
debentures. Proceeds—For expansion program.
Dec. 27,

jr Lincoln National Bank & Trust Co.,
Ind. (6/18)

Fort Wayne,
'
i

June 4 it

was

reported Bank plans to offer to its stock¬
right to subscribe on

holders of record June 18, 1957 the
before

or

July

9,

1957

for

25,000

additional shares of

capital stock (par $25) on the basis of one new share for
each four shares held. Underwriter—Blyth & Co., Inc.,

Indianapolis, Ind.
Long Island Lighting Co.
was announced company plans to sell later
$40,000,000 of rist mortgage bonds, series J.
Proceeds—To refund $12,000,000 of series C bonds due

April

16 it

this

year

Jan.

1, 1958 and for construction program. Underwriter
be determined by competitive bidding. Probable

—To

Great Northern

loans

Co. of California

announced application has been made to

was

California

stock

loans

Price—$24 per share.

May 3 it

bank

15.

-

stockholders the privilege

subscribing for 100,000 additional shares of capital
stock (par $10) on the basis of one new share for each
6Vz shares held as of June 4; rights to expire on June 24.

Southwest

(10/15)

Prichard, Pres., announced that pres¬
plans contemplate an issue of $6,000,000 of preferred

ent

Stuart & Co. Inc.; Salomon Bros.

of

First

Electric Co.

Nov. 21, 1956, H. T.

June 5, company offered to its

and First

of

Indianapolis

are
expected to be received by this company in
Cleveland, Ohio, up to noon (EDT) on June 20 for the
purchase from it of $2,925,000 equipment trust certif¬
icates to mature in 15 equal annual installments. Prob¬

First National

reduction

Oct.

on

Bids

•

& Michigan
was

Inc.; Harriman Ripley & Co. Inc.; The First Boston
Corp.; Eastman Dillon, Union Securities & Co. Bids—
Tentatively expected to be received up to 11 a.m. (EST)

(6/20)

bidders: Halsey,
& Hutzler.

Underwriter—To be

competitive

program.
Underwriter—To be determined by competi¬
tive bidding.
Probable bidders; Halsey, Stuart & Co.

Electric

able

Hutzler

reported company plans to issue and sell
$20,000,000 of first mortgage bonds due 1987. Proceeds

was

RR.

bonds after Nov. 1.

by

Indiana

May 20 it

holders

Erie

Dillon,

&

Hutzler and Eastman Dillon, Union Securities & Co.
(jointly); Blyth & Co. Inc., Lazard Freres & Co. and
First Boston Corp.
(jointly); Kidder, Peabody &
Co. and. White, Weld & Co. (jointly); Equitable Securi¬
ties Corp. (2) For stock—Kidder, Peabody & Co.; Blyth
& Co., Inc., and Lazard Freres & Co. (jointly).

For advances to Blackstone Valley Gas &
Co., a subsidiary. Underwriter—To be deter¬
by competitive bidding. Probable bidders: Hal¬
sey, Stuart & Co. Inc.; Kidder, Peabody & Co.; Blyth
& Co., Inc.; White, Weld & Co.; Stone & Webster Se¬
curities Corp. and Estabrook & Co. (jointly).
Emerson

Bros.

&

mined

June 3 it

Eastman

The

company

25-year

Salomon

bidding, probable bidders:
(1) For bonds—Halsey, Stuart & Co. Ipc.; Salomon Bros.

Eastern Utilities Associates

15

Brothers,

and

Power Co.

first mortgage

Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.; White, Weld
& Co., and Kidder, Peabody & Co.
(jointly).

sell

Co.

was reported company plans to issue and sell
around 200,000 to 225,000 shares of common stock in the
Fall in addition to between $10,000,000 to $15,000,000

April 3 it was announced company may need additional
capital of between $25,000,000 and $35,000,000 during the
next two years.
Underwriter—For any bonds to be de¬
termined
by competitive bidding. Probable bidders:

and

Lehman
&

May 16 it

Eastern Gas & Fuel Associates

April

Corp.;

Securities

(jojntly); Lazard Freres & Co. and Blyth & Co., Inc.
(jointly); Kidder, Peabody & Co.

Co.;

Securities Corp.

and sell

company

Kuhn, Loeb & Co.; Glore, Forgan & Co. and W. C. Langley & Co. (jointly).

about

May 10 it

reported

determined by competitive bidding. Probable bid¬
Stone & Webster Securities
Corp.; Lehman Bro¬
thers and Equitable Securities Corp.
(jointly); Lee Hig- "
ginson Corp. and Carl M. Loeb, Rhoades & Co. (jointly);

ders:

Probable bidders:

portion will consist of first mortgage bonds which would
be placed
privately, and the remainder will include de¬

was

be

To repay bank loans and for construction
program. Un¬
derwriter — To be determined by
competitive bidding.

$64,000,000 to finance construction on a proposed
refinery and for other corporate purposes. The major

it

8 it was reported company tentatively plans to
issue and sell some preferred stock this
year.
Proceeds
-—To
finance construction program.
Underwriter—To

April 22 it was reported company plans to issue and sell
$40,000,000 of first mortgage bonds this Fall. Proceeds—

500,000 Shares of 5% cumulative preferred stock
(par $20). Proceeds—For construction program. Under¬
writers—Paine, Webber, Jackson & Curtis, Boston, Mass.;
and Mitchum, Jones & Templeton, Los Angeles, Calif.

10

(

4

Gulf States Utilities Co.

Corp. (jointly).

Consumers Power Co.

the

ic Commerce Oil & Refining Co.
June

March

—

surplus.

System, Inc.

company announced that it plans the
of $25,000,000 debentures later in

ceived in

Gulf States Utilities Co.

$146,000,-

Electric

are

trust

Underwriters—Carl M. Loeb, Rhoades & Co.
Lynch, Pierce, Fenner & Beane.

program.

and Merrill

Detroit Edison Co.

announced

was

company plans to issue and
$6,000,000 of first mortgage bonds.
Proceeds
Together with $4,500,000 of 4%% 12-year
convertible debentures placed privately, to be used to

late

.

it was reported
company plans to issue and
by competitive V'
bidding. Probable bidders: Halsey, Stuart & Co. Inc.; ; sell $16,000,000 first mortgage bonds in November. Pro¬
ceeds—To repay bank loans and for construction
Morgan Stanley & Co.; The First Boston Corp.
pro¬
/• :
'„'j
gram.
Underwriter—To be determined by competitive
Consolidated Natural Gas Co. :
bidding. Probable bidders: Halseyr Stuart & Co. Inc.;
May 9 it was announced company plans to issue and sell :
Merrill Lynch,
Pierce, Fenner and Beane and .White,
$25,000,000 25-year debentures in October in addition to
Weld & Co. (jointly); Salomon Bros. & Hutzler
and
$25,000,000 sold on June 11.
Underwriter
To be de;
Eastman Dillon, Union Securities & Co.
termined
(jointly); Kuhn,
by competitive bidding.
Probable bidders:,,.; Loeb &
Co. and A. C. Allyn & Co. Inc.
(jointly); Stone
Halsey, Stuart & Co. Inc.; White, Weld & Co. and Paine,
& Webster Securities
Corp.; Lee Higginson Corp.
Webber, Jackson and Curtis (jointly); Morgan, Stanley

000.

Central Louisiana Electric Co., Inc.
sell

was announced company plans to issue some
additional first mortgage bonds, the amount of which has
not yet been determined.
Proceeds — For construction

company's 1957 construc¬

tion program which is expected to total
about
Underwriter — To be determined

Interstate Gas Co.

May 3 it

s

reported company plans to issue and sell
$10,000,000 of 1st mtge. bonds.Proceeds—To reduce bank
was

April 8 it

Gulf

65'

bidders:

Halsey,

Stuart

&

Corp. and Blyth & Co. Inc.
Co.

and

Inc.; The First Boston
(jointly); W. C. Langley &

Co.

Smith, Barney & Co. (jointly).

Continued

on

pcige

66

*

Chronicle

The Commercial and Financial

■-Continued from page
Louisville Gas &

Electric Co.

pected to be received up to 11 a.m. (EST) on

(9,4)

competitive bidding. Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Kuhn, Loeb & Co. and
American Securities Corp. (jointly); Kidder, Peabody &
Co. and Goldman, Sachs & Co. (jointly); Harriman Rip¬
ley & Co. Inc.; Lehman Brothers and Blyth & Co., Inc.
(jointly); The First Boston Corp.; Eastman Dillon, Union
Securities & Co. and White, Weld & Co. (jointly). Bids

To be determined by

—Tentatively scheduled to be
Middle South Utilities,

received on Sept. 4.

Inc.

May 8 it was announced company may consider an offer¬
ing of new common stock within the next year or so.
Proceeds—About $19,000,000, for investment in common
stocks of the System operating companies during the
three-year period 1957, 1958 and 1959.
Underwriter—
Previous stock offering was to stockholders, without
underwriting, with oversubscription privileges.
was reported company may issue
the fall about $20,000,000 of debt securities.

May 20 it
For

construction

program

and

to

reduce

and sell in
Proceeds—
bank

loans.

Underwriter—To be determined by competitive bidding.
bidders:

Probable

Halsey, Stuart & Co. Inc.; Eastman
Dillon, Union Securities & Co.; White, Weld & Co.; Kid¬
der, Peabody & Co.; Smith, Barney & Co., and Blyth &
Co., Inc. (jointly); Merrill Lynch, Pierce, Fenner &
Beane and Stone & Webster Securities Corp. (jointly).
New England Electric System

be received

May 23 it was announced company intends to offer and
$60,000,000 of first and refunding mortgage bonds.

•

sell

construction

Proceeds—For

ders: Halsey,
First

Boston

was

Co.; Lowell Electric Light Corp.; Lawrence Electric Co.;
Co.,
one company.
This would be followed by a $20,000,000 first mortgage bond issue by the resultant com¬
pany, to be known as Marrimack-Essex Electric
Co.
Underwriter—May be determined by competitive bid¬
ding. Probable bidders: Halsey, Stuart & Co. Inc.; Kuhn,
Loeb & Company; Salomon Bros. & Hutzler; Eastman
Dillon, Union Securities & Co., and Wood, Struthers &
Co. (jointly); Lehman Brothers; The First Boston Corp.;
Equitable Securities Corp.; Merrill Lynch, Pierce, Fen¬
ner & Beane; Kidder, Peabody & Co., and White, Weld
& Co. (jointly).
Offering—Expected in first half of

& Telegraph Co.

Co.

Telegraph

89.6% of the voting stock of Pacific T. & T.

Co.

Pierce, Fenner & Beane, all of New York, N. Y.

& Telegraph Co.

&
to

1957. «'

New Jersey Power & Light Co.

Sept. 12, 1956, it was announced company plans to issue,
$5,000,000 of first mortgage bonds. Underwriter—
To be determined by competitive bidding.
Probable
bidders: Halsey, Stuart & Co.; Kuhn, Loeb & Co., Leh¬

and sell

man

Brothers

and

Salomon

Bros.

&

Hutzler

(jointly);

Eastman Dillon, Union Securities & Co. and White, Weld
& Co. (jointly); Equitable Securities Corp.; The First
Boston
•

Corp.; Merrill Lynch. Pierce. Fenner & Beane.

were

Bros. &

from

Halsey, Stuart & Co.
Hutzler, but were rejected.

Inc. and

Salomon

Niagara Mohawk Power Corp.
April 22 it was reported company tentatively plans to
issue and sell this fall about $40,000,000 of bonds. ' Un¬
derwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; The First
Boston Corp.; Morgan Stanley & Co.;
Kuhn, Loeb & Co.
and Eastman Dillon, Union Securities & Co.
(jointly).
Norfolk & Western Ry.
(6/13)
Bids will be received by the company up to noon (EDT'*
on June 13 for the purchase from it of
$6,450,000

equip¬

ment trust certificates due

semi-annually to and includ¬
ing June I, 1972; Probable bidders: Halsey, Stuart & Co.
Inc.; Salomon Bros. & Hu.tzler.
•

Northern States Power Co. (Minn.)
4 it was reported
company plans

March
sell

to

issue

be determined

and

program.
Underwriter
To
by competitive bidding. Probable bidders:

Halsey, Stuart & Co. Inc.: Merrill Lynch, Pierce, Fenner
and Beane, Kidder, Peabody & Co. and
White, Weld &
Co. (jointly); Lehman Brothers and Riter & Co.
(joint¬
ly); The First Boston Corp. and Blyth & Co
Inc
(jointly); Equitable Securities Corp.; Kuhn, Loeb & Co.;
Harriman Ripley & Co. Inc.
Bids—Expected to be re¬
•

Ohio

a.m.

Power Co.

May 15 it

on

Aug. 13.

(11/19)

was

and

(EDT)

sell

—

14

it

the

announced

was

company

plans to issue

first mort¬

Public Service Co. of

(about

bonds

mortgage

year

$25,000,000

to

Probable bidders: Halsey, Stuart & Co.

petitive bidding.

Bros.

Salomon

& Hutzler and Eastman

-

(Calif.)
announced that proceeds of at least $1,-

was

to be received by the company prior to July

1, 1957 from the sale of new capital stock and used for
working capital. Underwriter—May be Blyth & Co., Inc.,
San Francisco and New York.
San Diego Gas & Electric Co.
April 23, E. D. Sherwin, President, announced that com¬
pany will probably raise about $7,500,000 late this fall

through the sale of preferred stock.
&

Underwriter—Blyth

Co., Inc., San Francisco, Calif.
was

reported company plans to issue and sell

Underwriter—To be
bidding. Probable bidders.

$10,000,000 of first mortgage bonds.
determined

by

competitive

Halsey, Stuart & Co. Inc.; The First Boston Corp. and
Lehman Brothers
(jointly); Kidder, Peabody & Co.;
Eastman Dillon, Union Securities & Co.
Bids—Not ex¬
pected to be received until next Fall.
Bids

are

25 for
of

expected to be received by the company on July
it of approximately $9,000,000

the purchase from

Stuart & Co.

Probable bidders: Halsey,

Inc.; Salomon Bros. & Hutzler.

Southern Union Gas Co.

May 16 it

was reported company plans to issue and sell
$10,000,000 of debentures this summer. Proceeds—

about
For

construction

& Co.

program.

Underwriter—May be Blair

Incorporated, New York.

Southwestern Bell Telephone Co. (10/1)
May 24 directors approved the issuance of $100,000,900
new

debentures.

Proceeds

—

For

expansion

program.

reported that this company now plans to
$28,000,000 of first mortgage bonds and
70,000 shares of $100 par value preferred stock. Pro¬

by competitive bid¬
ding.
Probable bidders: Halsey, Stuart & Co. Inc.;
Morgan Stanley & Co. Bids — Tentatively expected to

ceeds—To

be

issue

termined
#

bank loans. Underwriter—To be de¬
competitive bidding.
Probable bidders:

repay

by

(1) For bonds—Halsey, Stuart & Co. Inc.; The First Bos¬
Corp.; Blyth & Co., Inc.; Eastman Dillon, Union Se¬

ton

curities

&

Co.

and

Salomon Bros. & Hutzler
(jointly).
(2) For preferred stock—Eastman Dillon, Union Securi¬

ties & Co. and Salomon Bros. & Hutzler
man

(jointly); Harri¬
Ripley & Co. Inc. and Stone & Webster Securities




Underwriter—To

received

on

be

Oct.

determined

1.

Tampa Electric Co.
May 8 it was announced company plans to issue and
sell $18,000,000 of first mortgage bonds.
Postponement
of financing was announced on June 6.
Proceeds — To
repay

bank loans and for
be

bidders:

determined

by

Halsey, Stuart

new

construction.

Underwriter

competitive bidding.
&

Co.

Inc.;

"i

'

.

announced company, a subsidiary of
Gas & Electric Co., plans to issue,-,
year, $4,000,000 Of bonds, $1,100,000 of notes .
and $900,000 of preferred stock to
its parent in ex- <.
change for $6,000,000 of notes to be issued in exchange «
it

15

April

within

was

Valley

one

assets

certain

for

The latter,

of Blackstone;

in

turn,;"

by negotiated sale the first three
securities mentioned in this paragraph.

proposes
new

to dispose

,

April 15 it was also announced Blackstone plans to offer ;
to its common stockholders (other than Eastern Utilities-.
Associates

its

the

latter

the

and to common stockholders of
$2,500,000 of common stock of Valley'

parent)

receive as part payment of certain ;
properties. Dealer-Manager—May be Kidder,
Peabody & Co., New York.

Gas

Co.,

it

is

to

Virginia Electric & Power

Goldman,

Probable

Sachs

&

Co.

March 8 it was announced company

v

plans also to sell in,

$20,000,000 of debt securities. Probable bidders '
for bonds may include: Halsey, Stuart & Co. Inc.; Kuhn,
Loeb & Co. and American Securities Corp.
(jointly);:'
Salomon Bros. & Hutzler; Eastman Dillon, Union Secu-;
the Fall

rities

& Co.; Stone

& Webster Securities Corp.;

White,

& Co.

Wisconsin

Public

Service

Co.

May 29 it was announced company plans to
sell about $7,000,000 of first mortgage bonds

issue and

and about
$5,000,000 common stock this Fall. Proceeds—For con-,
struction program and to repay bank loans.
Under¬
writers— (1) For bonds, to be determined by competi- *
tive bidding. Probable bidders: Halsey, Stuart & Co.'
Inc.; Kidder, Peabody & Co.; The First Boston Corp.;Merrill Lynch, Pierce, Fenner 3c Beane; Salomon Bros.»
& Hutzler and Eastman Dillon, Union Securities & Co. '(jointly); Dean Witter & Co.; Lehman Brothers; White,*Weld & Co.
(2) For any common stock (probably first
to stockholders), The First Boston Corp., Merrill Lynch,
Pierce, Fenner & Beane, Robert W. Baird & Co. and
William Blair & Co.

(jointly).

Wisconsin Telephone Co.

•

—To

Bids—Tenta- y

Valley Gas Co.

Weld

(7/25)

equipment trust certificates.

Dillon^;

Eastman

Blackstone

South Carolina Electric & Gas Co.
Jan. 14 it

(jointly);

Smith, Barney & Co. (joint-. :

ly); Lehman Brothers; Blyth & Co., Inc.
tively scheduled to be received on Oct. 1.

Blackstone

Corp., Ltd.

are

Peabody & Co. and Merrill Lynch,r'

Beane

&

Union Securities & Co. and

Dillon,

200,000

(10/1)

also announced company plans to offer *'

Fenner

Pierce,

Union Securities & Co. (jointly).

April 30 it

& Light Co.

was

the

able bidders: Kidder,

Inc.; Blyth & Co., Inc.; The First Boston Corp.; Harri¬
man Ripley & Co. Inc.; Glore, Forgan & Co.; Kuhn, Loeb

Co.,

,

public 400,000 shares of common stock. Underwriter—To be determined by competitive bidding. Prob- y"

to

be issued and sold by the company
1957. Proceeds—To repay bank loans

will

12 it

March

(amounting to $25,000,000 at Dec. 31, 1956) and for new
construction. Underwriter—To be determined by com¬

&

$15,000,000 of first mortgage bonds due 1987.
To repay bank loans and for construction

—

Power

Utah

Indiana, Inc.

announced that it is expected that a new

first

of

$30,000,000)
during the

./V
plans to issue and :

ly); Lehman Brothers and Bear, Stearns & Co. (jointly);
White, Weld & Co. and Stone & Webster Securities Corp.
(jointly); Kidder, Peabody & Co. Bids — Tentatively .y
scheduled to be received on Oct. 1.

Co.; The First Boston Corp.; Morgan Stanley & Co. and:
Drexel & Co. (jointly).

series

(10/1)

:

Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. /
Inc.; The First Boston Corp. and Blyth & Co., Inc.
(jointly); Salomon Bros. & Hutzler; Eastman Dillon,,
Union Securities & Co. and Smith, Barney & Co. (joint- y

& Co. Inc.; White, Weld &

able bidders: Halsey, Stuart

was

Light Co.

12 it was announced company

Proceeds

gage bonds. Proceeds—For expansion program. Under¬
writer—To be determined by competitive bidding. Prob¬

it

.

Corp. of California

Utan Power &

March

sell about

Glore, Forgan &

and sell in the second half of 1957 additional

Feb. 11

'

York and Boston,
stock financing.
: y-

program.

Southern Pacific Co.

construction

ceived up to It

Underwriter

-

■

May 21 it was announced company plans a public offer¬
ing of securities to provide about $6,700,000 of new
working capital.

of

about $25,300,000

Philadelphia Electric Co.
Feb.

(8/13)

approximately $15,000,000 of first mortgage bonds.

Proceeds—For

construction.

Purex

received by the company in New York, N. Y.,

up to noon (EDT) on June 11 for the purchase from it
of $6,450,000 equipment trust certificates.
They were
received

new

>'

who handled previous

Co., New York.

New York Central RR.

Bids

subsidiary

(jointly). Bids—Expected
a.m.
(EDT
on July
15.

—May be Lee Higginson Corp., New

securities, in the following form: $15,000,000

new

for

New

Jersey Bell Telephone Co. (9/11)
May 1 it was announced company plans to issue and sell
$30,000,000 of debentures. Proceeds—Together with pro¬
ceeds from sale of 900,000 shares of common stock (par
$100) to parent, American Telephone & Telegraph Co.,
will be used to pay for expansion program. Underwriter
—To be determined by competitive bidding. Probable
bidders: Halsey, Stuart & Co. Inc.; Kuhn, Loeb & Co.;
Morgan Stanley & Co.; Shields & Co.; White, Weld &
Co.; The First Boston Corp. Bids—Tentatively expected
to be received on Sept. 11.
~

a

11:30

Inc.

Transocean

was announced
company,
Natural Gas Co., may issue

Corp.

to

up

17 Samuel S. Auchincloss, President, announced
negotiations were under way with an underwriting firm
looking to a public offering of capital stock. Proceeds—
For working capital. Business—Electronics. Underwriter

of
mortgage bonds, $3,700,000 of preferred stock and $6,600,000 of common stock. Proceeds—To repay advances
of $9,300,000 from parent, and the remaining $16,000,000
of

received

be

Tracer lab,

,

Co.

it

20

Securities

Webster

May

Weld & Co. (jointly); Equitable Securi¬
The First Boston Corp.; Harriman Ripley &
Kuhn, Loeb & Co.

Northern

'

Registration—Planned for June 14,

ties Corp.;

Pipe Line

,

determined by competitive bidding. Probable bidders: :
Halsey", Stuart & Co. Inc.;. Kidder, Peabody & Co. and y
Merrill Lynch, Pierce, Fenner & Beane (jointly); Hemp- /4;
hill, Noyes & Co. and Drexel & Co. (jointly); The First *
Boston Corp.; Eastman Dillon, Union Securities & Co.; /
Kuhn, Loeb & Co., Blyth & Co., Inc. and Lehman Bro- J
thers (jointly); Harriman Ripley & Co. Inc. and Ston*

Co. and White,

Basin

expects to sell $10,-

000,000 of first mortgage bonds due 1987. Proceeds—
For pWit expansion. Underwriter—For any bonds to be

Electric Co.
issue ano
$6,000,000 of first mortgage bonds. Underwriter—
To be determined
by competitive bidding.
Probable
bidders: Halsey, Stuart & Co. Inc.; Merrill Lynch, Pierce
Fenner & Beane, Eastman Dillon, Union Securities &

Inc.:

(7/15)

May 27 it was announced company

Pennsylvania

Permian

Co.

Service

Electric

Texas

owns

Offer¬

Sept. 12 it was announced company plans to

into

Dillon, Union Securities & Co. and Merrill Lynch,

man

(8/20)
May 24 it was announced company plans to issue and
sell $90,000,000 of new 23-year debentures due( 1980.
Proceeds—To repay advances from parent and for im¬
provements and additions to property. Underwriter—To
be determined by competitive bidding.
Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.
Bids—Expected to be received on Aug. 20. Registration
—Expected in the latter part of July.

Haverhill Electric Co. and Amesbury Electric Light

issue and sell

$10,000,000 of preferred stock. Proceeds—For new con¬
Underwriters—Kidder, Peabody & Co.; East¬

struction.

ing—Expected some time in August.
Telephone

(7/9)

May 27 it was reported company plans to

Underwriter—

parent.

New York.

Texas Electric Service Co.

May 24 it was announced company plans to offer to its
stockholders the right to subscribe for 1,822,523 addi¬
tional shares of common stock on the basis of one new
share for each six shares of common stock and/or pre¬
ferred stock held. Price—At par ($100 per share). Pro¬
ceeds—To repay advances from
None.
American
Telephone &

Bids—Had been expected to
on July 17.

(EDT)

Tampa Electric Co.

Securities Corp.,

Pacific Telephone

May

11 a.m.

rights to expire on July 16. Postponement of financing
announced on June 6.
Underwriter—Stone 3c Webster

July 23.

Co.

Beane.

217,286 additional shares of common stock, first to stock¬
holders of record about June 26 on a l-for-10 basis;

by competitive bidding. Probable bid¬
Stuart & Co. Inc.; Blyth & Co., Inc.; The
Corp. Bids—Expected to be received on

determined

be

up

May 8 it was announced company plans to issue and sell

Underwriter—To

program.

&
to

Fenner

Pierce,

Nov. 19.

(7/23)

& Electric Co.

Gas

sell

announced SEC has approved the merger
of the five following subsidiaries: Essex County Electric

May 23 it

Pacific

Pacific

Montana Power Co.

^

Thursday, June 13, 1957

Co.; Stone & Webster Securities Corp.: Kuhn, Loeb &
Co. and A. C. Allyn & Co. inc. yoinuy/; Mernil Lynch,

Corp. (jointly); The First Boston Corp.; Blyth & Co.,
Inc.; Kuhn, Loeb & Co.; Lehman Brothers. Bids—Ex¬

65

May 14 it was reoorted company plans to issue and sell
$15,000,000 of first mortgage bonds. Proceeds—To repay
bank loans and for construction program. Underwriter—

/

.<.

.

gRwn

m

(7/9)

April 3 it was announced company

plans to issue and sell
1992. Proceeds—

$30,000,000 of 35-year debentures due

Underwriter—To be deter¬
mined by competitive bidding. Probable bidders: Halsey,
Stuart & Co.; Morgan Stanley 3c Co.; The First Boston
Corp. Bids—Expected to be received at 195 Broadway,
New York, N. Y., on July 9.
For

construction program.

Volume

Number 5646

185

.

.

The Commercial and

.

(2791)

Financial Chronicle

Continued

jrom

politically more repugnant than
the accommodating monetary in¬

12

page

where wages and

areas

tentative

that

figures

1956

squeeze.

was

to

seem

a

show

of

year

Associate Professor of Economics,

want

"It's

often

have

an

assumed

increase in

that

if

prevent

we

But in

pendently originating and not the
of

consequence

anything

else,

tion

it

It

in

prices.

may

The

governing fac¬
tor is the. state

The

of demand. We

•,

eaamr'

in

mind

two

•past

"iBr?1,

by i ts

a

vided

lutions for the

-

Rees

.

.

:

.

the

Nemours

and

t

Institution

is

that

moved

in

up

the

about the rate at

by

in

rise

in

prices

rates has

wage

t he

a

i

i

level
ties

than 'the

the

with

do

price

easy

the

to

y,

discussions

would lead

us

perhaps

say

unions
their

of

some

of

members

the

wages

in

of

by

effort

the

paid. It

a

the

Kaplan

H.

D.

.

-

■

-

'

.
'

*

economy

*

payroll

higher

The

costs.

entire

the others to keep the

growing labor force gainfully em¬

Increase of $5
ployed.
billion in na¬
tional

BRADFORD

income

originating in
the

-

manufac-

turing
ment

s
re¬

higher

wages and sal¬

U.

Director of

Geo.

P.

prices

also

Hitchings

force

New York

the money

demand.

sumer

payroll
in

evidence of

costs

1956

hourly

have

increased

1955.

An

tude

through
ity.

- manufacturing
owing to higher
earnings, which

10%

increase

could
an

in

not

of

since
this

be

mid-

magni¬

absorbed

increase in productiv¬

ically be passed

on

as

a

price in-




be.
We

n

of

Fabricant

into account.

effect

with

faced

Big increases, year by year, in
basic, underlying costs of all

It

may

is

w a

y

a

e

public inr e s t, they

in

1887

in

rail-

the

roads,

the widespread indus¬

MARTIN R.

not

the

of

be

requested and obtained. While
it would be very difficult for gov¬
ernment to maintain a monetary

policy which would lead to large
unemployment, it is the responsi¬

The result

unemployment

is

policy which might lead to little

bits

of

unemployment

in

those

outing
Club,

Whitemarsh, Pa.

,

*

(Philadelphia, Pa.)
Philadelphia Securities Associa¬
tion annual outing at the Overbrook Golf Club, Ithan, Pa.
1957

June 21,

(Chicago, 111.)
Club of Chicago
31st annual Field Day at Mid¬

Bond

Traders

west

Country

Club.

has gone
June 28, 1957 (New York City)
0
on in the face of a tight monetary
Investment Association of New
policy. It has occurred in the pres¬
York annual outing at Apawaence of a Federal surplus. It
was
mis Club, Rye, N. Y.
not
touched
current

inflation

by

specu¬

or

June 28, 1957

boom,
t h

e

was

as

It

rather than

R.

Gainsbrugb

v

v

Syndicats annual outing at the
Country
Club,
Glen

Cove, Long Island, New York.
Aug. 1-2, 1957
Club

Bond

an

expansion i n
profit margins.
Finally, sev¬
eral
pivotal
wageincreases

Golf Club.

(New York City)

Nassau

a c c o m-

panied by a
shrinkage

M.

Morris County

June 28, 1957

in

t.

p a s

(New York City)

Municipal Bond Women's Club
New York annual outing at

of

stock

a

commodity

(Denver, Colo.)
of
Denver-Rocky

Mountain Group of
summer

IBA annual

frolic and golf tourna¬

ment at the Columbine

Country

Club.

?

(Santa Barbara,

Sept. 25-27, 1957
Cal.)
-

came

responsibility

Country

at'Whitemarsh

Industrial Conference Board
The

bene¬

government to bail out every ex¬
cessive wage increase that might

(Philadelphia, Pa.)

June 22, 1957

GAINSBRUGH

ulti¬

be

1957

of Philadelphia, summer

Chief Economist, National

effects

always

Club annual

Investment Traders Association

is solely

union,

bility of government to maintain

in

that labor

one can say

responsible for the price
rise, but without doubt, it is the
major factor.

(Minneapolis-

outing and picnic with cocktail
party at Hotel Nicollet June 19
and an all day sports program
at the White Bear Yacht Club,
White Bear Lake, Minn. June 20.

June 21,

and trusts and other
combinations in restraint of trade.
Fundamentally we are in an in¬
flationary wage-price spiral.
Of

Even the immediate

not

:

pools

members

a

appears

O. Glenn Saxon

Dr.

in

or

1957

Paul)
City Bond

Twin

the
t

19-20,

St.

to the
detriment
o f

to

taking

outing at Western Golf & Coun¬

tices,

found

-Association

Dealers

& Michigan summer

try Club.

by

production must find
prices or in unem¬

in

'.i

June

portance of monetary policy.

another

the

because

•<

market or land

have bumped

once

looking

flation..

prices,

try realizes it

in¬

mate

S.

Dr.
we

inflation, which, I
infer, we are again going to learn
about only by the hard way. This
lime it is a monumentai wage in¬

ployment.

fore the coun¬

Securities
of Detroit

•

is

,

^Detroit, Mich.)

June 18, 1957

the future be¬

prosperity for

infla-

great

industrial

in

far

too

not

ficial, particularly when it leads
quickly to cuts in hours' and em¬
ployment. At the same time we
must educate the public to the im¬

into
kind

Analysts, r Inc.;. annual muting at
-Westchester Country Club.

.

be

York Society -of

New

lative fever or

backwards, we
B. Smith

V

off

e

of

1957 (New York, N. Y.)
Security

June 18,

creases are

about

While

again

Bradford

a

wage-rate

an

experience.

There

situation.

excessive

t h

Club

Bond

Club, Rye, N. Y.
long June 14, 1957 (Philadelphia, Pa.)

emphasize that

of

learned by the
hard way of

must

continue to

of

which

reflection

A cost increase cannot automat¬

than it used to

the

tio

of

for

has been

average

increase

peacetime,

to

we were

—

New
West¬
chester Country Club and Beach
Municipal

primary
problem of
public educa¬
tion,It won't

amounts

what

lifetime

kind

Club.

June 14, 1957 (New York City)

delphia annual outing at Phila¬
delphia Cricket Club.

is

important i n
peacetime, o r

market

excess con¬

The

ment, but I do think that the prob¬
lem of inflation has become more

Corp.

up on us

entirely

problem of unemploy¬

historic stock-

supply increase and the

no

the

prices,. an-",

other

demand for

there is

While

Club and Oconomowoc Country

Investment Association of Phila¬

course, no

University

think we have

dori't

inflation crept

maKing

consumer goods rela ¬
tive to supply.
The money sunply has increased only 1.8% from
June, 1955 to November, 1956, on
a
seasonally adjusted basis, and

our

at

in¬

examination

I

licked

looking back¬
carefully

for higher
generally since mid-1955 is

borne out by

Research, National

Economic Research, Inc.
Professor of Economics

t

Field Day at Oconomowoc Lake

a

passed, when we need legis¬
the present

rect

trial

Bureau of

1957 (Milwaukee, Wis.)
Bond Club annual

Milwaukee

lation at the Federal level to cor¬

since

1890 among

ward

main

e

in

ity price inflation.

creased pay¬
roll costs are
t h

Steel

still rise, of

C SOLOMON FABRIC ANT

three great inflations.
In World
War I, there was a great commod¬

aries, includ¬
ing fringe sup¬
plements.
That

Wages will

in¬

wage

as

B. SMITH

S.

had

have

We

seg¬

has

flected

Economist,

excessive

the productivity "of "la¬
bor rises, but we may then have
a stable price level.

*

as

^

Sheraton

York annual field day at

and

come,

Bond

Group. annual

at

June 14,

of Economics

has

Municipal

•

spring
Gibson and
the Maketewah Country Club.

Management has a

Yale University

time

The

(Cincinnati,

can

of unfair prac¬

on

creases.

Dealers

party

kept

are

Government has

balance and
on with a competitive
where there will be some

restraint

course,

inflation

of

1957

13-14,

Ohio)
Cincinnati

the same type

supply brought into
go

effects

labor demand and

Then we'll get

must have the means
i.of .buying the product before pro¬
ment in 1956 as also part of it.
duction >can
be
profitably
ex;
panded. Now the employees who
GEORGE P. HITCHINGS
have been the chief beneficiaries;
Manager, Economic Analysis Dept.
c'f rising dollar incomes must sim-"
Ford Motor Company
ilarly learn that savings make
The. generating
factor in the jobs; and that it takes the pur¬
price rise for consumer goods and chases of those with iixed incomes
well

with¬
work¬

have'a few more years
of increases in commodity prices.

rwage earners

as

increases in the

talking

we'll

ill

country was

We may

,

June

g

OLIN G. SAXON

about is primarily a
reflection of the current shortage
of labor;
It won't continue indefinitely at anything like the
present serious rate..
•
are

n

Professor

ing population. We have a chronic
labor shortage. The condition we

.

been

stimulati

T. Ellis

total population

in

large

Jasper

Park Lodge, Alberta, Canada.

Jules Backman

both

responsibility not to intervene.

birthrate in this

creases

out

'

has

have

of Canada Convention at

•

They

sources.

(Canada)

Investment Dealers' Association

in steering re¬

in labor costs.

reflection

^

mid-1955

Field

Investment

June 11-14, 1957

responsibility to fight, and to fight
hard, against excessive increases

to

being
saddle

-

The unprecedented level of invest¬

play
roles

within bounds.

quite low in the early 1930's. We
now have a situation of large in¬

r

1956 may be part of this change.

wages

of the fact that
A.

-

since

In

and

valuable

The

Ira

is

total

15% to 20%
might be in a
"economy.
y •
;'i -v ,
nonunion situation; another third
When-wages are moving ahead
by perhaps 5 % ? to: 10%, and the
of productivity — when manage¬
remaining third not at all.
ment's resourcefulness is not able
The price rise associaftd with
to dope with increased unit costs—
the Korean war started on the de¬
the economy is being weakened
mand side with the scare buying
and is headed for a showdown in
at the outbreak of the war, and
resistance to further savings and
again when the Chinese came into
investment.
Neither the wage
4he war. Afterwards prices lev¬
earner nor anybody else can in the
eled off, and finally turned up in
long run win. that way.
Many
..1956.
The. 1956 'situation repre¬
leading employers had to learn
sents a change. The very substan¬
the. hard-way, in the decades betial gains of the trade unions : in
tween the World Wars, tlpit the

services

and

be avoided if labor costs

and on

Labor's

high employment, to have a creep¬
ing type of inflation. To be sure,
if. is nd€ t'he ideal balance for an

above; whatfthey

^

process.

EVENTS

impose

production tends to be distorted; •

provide h i g h
employment.

a- pattern
in which we are pre¬
pared, for the sake of getting this

third of the trade

raised

on

during the

the

be that
we've taken to

inflation

wage

resto¬

a

balance in the

COMING

we

Prices

money

war,

may

believe. I would

to

a

have

than

credit,

the

per

wages

monetary authori¬

with it

do

been experi¬

rationing functions.
Wrhen
wages or prices are fixed, these
roles are largely destroyed and

supplv built

-

with

have; and monetary policy has

more

gained from
better

a

entire bargaining

and

ing the war, on

c e r-

1

n

n

not

are

veloped dur¬

unemployment if there is not
family, in-the
adequate demand, f ; *
level of living
Trade unions have perhaps some¬
'obtainable and
to

be

of

have

wage

mand that de¬

per

some

or

less

ration

Over

process.

price

might

Co.

&

the only factor
that raises prices. For the 10 years
after
the war, this country
has
been enjoying generous prosper¬
ity,
based
partly on the
pent - up de¬
Wages

KAPLAN

continuously

creasej

adequate demand, or by deflation

what

-

we

wage

rises

bargaining
to

much

e

so¬

suggestion

ELLIS

Economist, E. I. du Pont de

employment;
Albert

One of t h

proposed

encing is the

up

is

there

to

IRA T.

high level of

pro-

the imbalance prevailing

on

accommodate this in¬
crease in cost, and so have had to
increase our prices.
dustry

"We have had

They

"flation

have

output
hour.;,/

be fol¬

lowed

the longer-term
the emphasis placed

was

here

haven't been able in the steel in¬

can

rise in labor

independ¬
ent w age in¬

can

II.

Brookings

exceeded

f

creases.

D.

decade

which

the

lines of

consequences
o

we

undoubtedly would
unemployment.

evidence

general

liave to bear

note to

new

problem

price controls.
A.

not; the

may

the

factors:

the longer term, perhaps there is

,

it

or

more

two

in the

supply at that price level.
doing we create a situa¬

which

A

price rise since June of 1955

we

They

pressures

University

to

those

as

costs.

so

lead to

must lead to a

rise

enough,

The

has been due

same

designed to dampen down
from the demand side.

are

boom, and the increases in labor

demand sufficient to ab¬

a

sorb the

inde¬

wages

tighten

School of

Commerce, Accounts and Finance,
New York

the

are

used for traditional inflation.

we

we can restrict
the product.
If

for

to

The choice that the nation

Professor of Economics,

the

policy,

market

Unive£s|ty of Chicago

a

we

validate, through our monetary
mechanisms, this regular increase
in
basic
underlying
cost.
We

ket for the product. Through mon¬

etary

going to have

are

we

mechanisms

■

has thus far made is that we will

maintained aepenas upon tne mar¬

ALBERT E. REES

4

may be increased
whether they are

initially ^ but

„

.

lot of
unemployment, or we are going to
curb the abuse of labor monopoly

or

power.

Prices

crease.

cost

a

JULES BACKMAN

ate going to go on and see
dollar steadily depreciating,

We
our

But the basic

II.

*

have devised to deal with this in¬

flation

flation.

Wage Inflation Analyzed
By Conference Board Forum

prices have

extreme.

become

67

.

J.

,

than

rather
In

past

upward

after

before

price increases.

inflations, prices moved
first
and
wage
rates

have

relationship

Fall

learned
over

of

time

the

close

between

unit labor costs and finished goods

prices, and the extent to which
wage costs in current dollars, in¬
cluding
fringe
benefits of
all
forms, have outstripped the gains
in productivity since World War

Association

Meeting at Santa Barbara

Biltmore.

Oct. 7-8, 1957 (San

lagged.
We

Investment Bankers

Francisco, Cal.)

Stock Exchange
Firms Board of Governors meet¬

Association

of

ing at Mark Hopkins
Oct.

10-11,

1957

Hotel.

(Los Angeles,

Calif.)
Association

of

Stock

Exchange
meet¬

Firms Board of Governors

ing at Beverly

Hills Hotel.

63

The Commercial and Financial Chronicle

(2792)

Fund

May
and the
of 1957 were

for

shares

months

five

first

Philadelphia

of

By ROBERT R. RICH

Stock dividends in two industry

reported by Roy R. Coffin, Presi¬

The Case for Electric

dent.

May sales amounted to $280,667
for an increase of 297% over the
total

of

in

$70,679

May,

five

first

the

For

like

"When you

trial

1956.
of

months

$926,923 up 81%
the sales of $511,393 in the

1957 sales totaled
oyer

Pont

&

Fla.

—

has

Co.

as

ment

Francis I.
opened

under

of

direction

the

answer

portfolios

course, on

ing and John L. Kitchens arc also

posed by

member of

a

America's

;

more

they should be

volatile issues.

used depends, of

so

the particular time and on the needs and expec¬

tations of the person

who buys them.

in the

MUTUAL

performance.

by Standard & Poor's indexes (annual aver¬

ages), the latter advanced approximately 236% from 1947

INVESTMENT

to

FUND

While the increase for the utilities

1956, while the electric company stocks rose only 41%.

comparison, it
an

GVHdh SUrJtb St,

FREE INFORMATION
FOLDER AND PROSPECTUS TO

YOUR INVESTMENT DEALER OR

NATIONAL SECURITIES &

.Shareholders

Broadway, New York 5, N. Y.

"When

the

factors

are

of

safety of income, moderate
growth in rising markets, and defensive ability in falling
markets

are

considered in

utility stocks to

invest in

a

combination, the importance of
well diversified portfolio is clear."

New Hecker Branch

ATOMIC-

Market

a

branch office at 235

Square

under

the

DEVELOPMENT

agement o£ Eugene K.

MUTUAL

Fry

was

man¬

opened

a

Industrial

the quarterly dividend,
after adjustment, is larger than it
was for the previous quarter and
More

quarter of 1956.

same

Mr.

First

Street

ment

of

Fry.

■

under

Alden

the

manage¬

D.

Tompkins and
Edgar W. Goldthorpe.

than

$1,100,000

increase

This

in

is

divi¬
10%

a

the distribution

ever

for

the second quarter of 1956. Assets
of the five funds and sixteen in¬

dustry classes of Group Securities
are

approximately

now

$103

The dividend message described
the securities markets of the last
as

"reflection of

a

healthy consolidation in

our

na¬

tion's

economy
which has now
going on for about two
years." The message declared that

been

there is evidence that the economy
is - about > toresume
its
basic

growth.

"The

behaviour
of

the

wide

of

t

variation

different

in

segments

has provided an
opportunity for favorable adjust¬
economy

in

ment

portfolios

to

benefits

from

growth

by

maximize

of

the

the

manage¬

long-term

American

no

brief

a

good

decline.

loans

have

for

There

resumed

offset

by

their

to

only
decrease in

a

is

sharp
minor

a

the

de¬

Mem¬

again been selling
securities to try to

for

of

Growth Stock Fund

enormous

bank

reserve

member

for

ward

Massachusetts Investors

the

for commercial loans.

trend

d/jodon

each year have averaged 35.6c per
share and have varied by only

3.5c per

banks

the

last

has

de¬

The

discounts
been

four

up¬

months.

Any move to ease the money mar¬
ket by the Federal Reserve Banks
would
stock

probably

prices.

share.

Additions to the fund's holdings

during the six months ended April
30

included:

Ohio R.R.

The

Sinking

Debentures,

Fund

The

following issues

Series

come,

The

New

or

Hartford

Ref. Mtge.,

Net

investment dealer

Inc.,

Manhattan

of

April

at

so

inflate

"Axe

Resources Cross

or

135 8. La Salle St., Chicago 3, 111




61

Broadway

CHICAGO
120

South LaSalle Street

LOS ANGELES
aio

West Seventh Street

on

the

Survey

of

the

Situation," is¬

by E. W. Axe & Co., Inc.

DEVONSHIRE STREET

NEW, YORK

followed by

Exchange.—From

Financial

VANCE, SANDERS A COMPANY

Selected Investments Co.

was

Houghton

BOSTON
Prospectus from your dealer

Fund

Delaware

of

Resources

have crossed the $50 million mark

million

$3.2

a

the

since

assets

growth

first' of

the

W. Linton Nelson, President,

year,

reported.
Mr.

Nelson

current

asset

396.

Delaware's

noted

position at $50,662,-

By way of striking contrast,

the

Fund's

total

amounted to less

close

resources

than $600,000 at

its

the
year

first

of operation.

This
ware

of

latest

Fund

complete

report marks

as one

Dela¬

of the country's

fastest growing

mutual investment
companies. Launched in 1937 as a
general
account
for
small
in¬
vestors
in
this
area,
the Fund
steadily gathered momentum and
in

1950

assets

had

reached

the

then, Dela¬
ware has more than quintupled in
size outpacing the industry as a
whose

A

combined

in

resources

the

same

local
concern
owned
by a handful of share¬
holders, Delaware Fund is now a
nationally-known financial insti¬
tution

-

General

relating to the shares of any of these separate
he obtainedfrom authorized dealers or

111

moderate reduction

Stock

investment funds may

live.

a

sharp advance in prices

OF BOSTON

shares

j

$7 million level. Since

common

The general level of

in the bank rate

Bond Fund
A prospectus

totalled

30,

Delaware Fund

No

U

american

;

Bond

period.

even

LIMITED

Selected

.

$21,890,018.

seven-year

but

Canada General Fund

CFC

and
&
&

2019,

Series A, 4's 2007.

assets

Fund,

4Vi's,

A,

250%

sued

PHILADELPHIA 3, PA.

elim¬

York, New Haven
Railroad Co., First

increased

London

your

were

inated: Chicago, Milw., St. Paul &
Pacific R.R. Co. General Mtge. In¬

whole

a

Prospectus from

5M:'s,

1977..

higher than in the United States,

Century Shares Trust

&

ordinated Debentures, 4Vs's, 197.7,
and
Pioneer
Natural
Gas
Co.,

interest rates in England is much

IMassachusetts Investors Trust

Baltimore

Co., First Consolidated

Mtge. Series B, 4's, 1980; Dresser
Industries, Inc., Convertible Sub¬

a

"other"

mand for real estate loans.

mand

Tel. FEderal 3-1000

years,

in

expecting

Commercial and

have

report.

connection,
the
report
that, during the past 10
total income dividends paid

climaxing

advanced

recession.

reason

advance,
extent

semi-annual

this

states

$50 .Million Level

rates

government

1033 THIRTIETH STREET, N. W., WASHINGTON 7, D. C.

during the six
April 30, according

econ¬

Interest Rates and

accommodate

Development Securities Co., Inc.

$521,021

fund's

shareholders'

omy," it stated.

Interest

the

to

a

period of

ber banks have

GET THE FACTS AND FREE PROSPECTUS

totalled

dends from net investment income
distributed.

investment

net

income, based on two quarterly
per-share declarations of 8.5c each,

In

held. In

now

both cases,

'f

..

.

Payments from

stock for each share

after

VERNON, N. Y.—
Pinne}' & Co. have

branch office at 22 West

formerly with Sperry &

Co.

FUND, INC.

MOUNT

Craigmyle,

the period.

months ended

Craigmyle, Pinney Branch

SUNBURY, Pa.—Hecker & Co.
has opened

Dept. C

of

Common Stocks

ATOMIC SCIENCE

Atomic

mes¬

Machinery Shares and Steel Shares
were given an additional share of

ments

income, the dividends of utilities
surely the safest of all equity securities.

Established 1930

and

further extension of the

"With respect to

RESEARCH CORPORATION
120

;

three months

22% in the cost of living.

.

WRITE FOR

Inc.,

The dividend

million.

impressive by

"In the years 1949, 1952 and 1953 the electric stocks
performed better than the industrials; and their defensive
characteristics were particularly evident in the market
downturns of 1949 and 1953. In 1949, for example, the
industrials declined 2.2%, while the utilities rose 3.9%.
In 1953 the average index of the industrials remained
approximately at the level of 1952, while that of the utili¬
ties advanced 6.1%.
%
%

Ntf//
m
k

not

than sufficient to compensate for

was more

increase of

was

bonds, reports a per-share net
asset value of $7.14 on April
30,
of end of the first half of the .1957
one
of fiscal year. This compares with a
largest figure of $7.38 at the beginning of
second

sent to more than 35,000
shareholders throughout the
United States and Abroad.

was

As measured

Group

Bond Fund, Inc., a
investing exclusively

in

sage was

prevailed

postwar era, it is true that the stocks of electric

the

Manhattan
mutual fund

message

oldest

mutual funds.

also for the

"Under the economic conditions that have

in

dividend
Securities,

Group

a

utility stocks belong in invest¬

complements to

nine of the

noted

were

quarter

Bullock, Ltd., and the logical re¬

utilities have not matched the industrials in

A

funds

dividends

increased

and

payments for

justify buying the stocks of

was

is that

as

The extent to which

Donald L. Larsen. Robert F. Keat¬

associated with the firm.

you

given in the firm's May "Perspective," follows:

a

branch office at 1286 North Palm
Avenue

can

question

seminar held at Calvin

"The

SARASOTA,

This

classes

Utility Common Stocks

look at the strong market action of indus¬

stocks, how

utilities?"

ply,

period last year.

New du Pont Branch
du

Thursday, June 13, 1957

.

Manhattan Bond
Splits,
Higher Dividends, Fund Dividends
Cited by Group
Top Half-Million

Mutual Funds

Philadelphia Fund
sales

.

Stock

Record Sales for

Record

.

longer

whose

a

shareholder

include

upwards

viduals

and

of

ranks

indi¬
through¬

18,000

institutions

out the United States and abroad.

Volume

Number

185

5646

.

.

The Commercial and Financial Chronicle

.

A "Work Break"
The

issue

current

"Brevits,"
by Vance, Sanders & Co.,

issued

deviates

in

economic

part

its

from

content

and

usual

takes

a

slightly different approach to the
current

spate of articles contain¬
ing advice to those who will com¬
plete their formal education this
enter

and

year

the

Pennsylvania and Virginia. Philip
C. Smith joined National in 1953

Elects Officers
The

board

of

has

Na¬

of

five

Vice-Presidents

new

to

since 1953, covers,

ida,

resi¬

the

first

readers, for
card

which

"To
"Due
and

offer

we

Personal

accompanying
recently
called

increased

keen

a

business,

desire

endeavor

be

can

to

remain

find

some

aside

and

ical

in

innovation, but

believe

the

idea

time

great

adoption

Work Break Plan is

in

of

the

not

compul¬
each em¬

favor

of
adopting
the
Idea, will have fully
their vacation plans."

Work Break

completed

Three-Dimensional TV
A new television screen,

devel¬

oped by the Naval Research Lab¬

oratory, mav lead to three-dimen¬

IVi.

television, according to the

June

issue

"Keeping,, Up,

Shares

Management Corp., sponof the $153 million Televi¬

sors

sion-Electronics Fund, Inc.
The basis for the new screen,
the publication said, is a process
for

depositing

phosphor

face of the television
of

form

on

tube in

the
the

transparent films,
inhtead of opaque white powders
now in use.
The films, the NRL
reportedly stated, are more rug¬

thin,

than

ged

the

powdered

screens

and provide a new and

simplified
approach to color television. They
allow
viewing by television in
bright daylight with little loss of
contrast.

color

For

the publication
reported, films that create differ¬
TV,

ent colors may

be deposited

top
of each other and may be lighted
separately or mixed by controlling
the speed or the direction of the
electrons in the tube. By

on

using one
primary

of each of the three

film

colors,
trum

the

can

complete

be

color

obtained

by

spec¬

proper

mixing.
Th»

new

process,

developed by

Dr. Charles Feldman

of NRL, has

been successfully demonstrated in

full ranee of co^rs. which gen¬

erate

bright, sharp pictures.

U.

n.

*vucui.c

and

the

manages

wpfred
C. FmitH is now conducting a se¬
curities business from offices at
-

of $300,000,000.
Moving up "toThe post of Vice-

cess

|WV„r

President
resident
!

from

that

of

resident

■*"*—~

-

Vice-President

Rufus L. Car¬

are

ter, Ira G. Jones, M. G. H. Kuechle
L.

L.

Smith

Moorman.

becomes

Walter J.

after serving as district manager,
Elected resident Vice-Presidents
are

David T. Gillmor, Jr., I,

Gard¬
Jones, Jr., John M. R; Morton,

Jr.,i Philip C, Smith and
Osicki

of

urer

the

since

George

corporation.

has

He

accounting department

1945.
is

in

charge of the

Pacific Coast territory, which in¬
cludes the States of Arizona, Cali¬

fornia, Colorado, Idaho, Montana,
Nevada,
New
Mexico,
Oregon,
Utah, Washington, and Wyoming

Brand

has

in

a

securities

States Naval Reserve.

Director of Economic Con-

a

has been made Associate Director
of

the

firm's

Drive to engage

business.

He

was

farmers

resulted in

former

in

times

heavy seasonal bulge
in grain shipment in the late sumand

mer

greater

a

autumn

dearth

months

of

and

traffic

in

a

the

and often «red ink» instead of net

income

for

the

ead

the year
For

in'stance,

for

age

the

months

taking

1946-55

the

of

aver-

decade,

the
operating income of the Great

net

Northern for the first four months
of

Sales

11

TT

//•

•

eytcl,e'

_

income.

net

For

Island.

Hampshire,

Vermont

and

R h o d

Erie

e

Penn¬

sylvania.

first

four

months of the current
ever,

the

prised

even some

not

much

so

year, howNorthern
sur-

Great
in

of the optimists,
showing a 2.3%

gain in gross as compared with
the corresponding 1956 period in
of

a

decline

in

carload-

ings of almost three times

but,

particularly,

more

of the

riers

show

to

much

as

in

being

comparatively few

healthy

a

car¬

gain

in

income.
May brought a re¬
versal, however, with a decline in
gross due to lower lumber move¬
net

ment

well

as

of

as

certain

manu,

factured products.

intensified,

was

increased
income

net

months
share

theless,
well

for

as

was

the

year

to reduce

first

to

five

$1.36 per

against $1.41 for the

as

responding

completed, one after the
other, the Great Northern has en¬
joyed outbound traffic in the rail

this

year

with

net

income not far away, one way or
the other, from the all-time high
of $5.32 per

western

sideration

nois!,

territory,

covering

Illi¬

Kansas and Missouri; Mr.
with
National
since

share made last year,
this is after giving full con¬

and

to

the

7-cent

per

The other is the decline to

years.

60 cents per share in the tax-deferment factor due to accelerated
amortization
per

The
be

hour

further wage increase that will be

cushioned,

freight

rate

iast j)ec

in the road's

about

Arkansas.

siana. Mississippi, North

1.

covers

Alabama,

Florida, Georgia, Loui¬
Carolina,
Oklahoma, South Carolina, Ten¬
and

nessee

Smith is

in

Texas.

Walter

J.

J.

charge of the Metro¬

New York

City territory,

includes Northern New

and

Long

Island.

He

has

Mr.
ern

Oilimnr

area

rHory.

the

Nevada

O

Mr.

Pa.

Jones,
since

of

Worth

r p a « n

Now VorV

Dortions

territory
tional

of

Mr.

cinro

Pactum

rities Company.

Pontiac),

covers

State

the

and

in

with

t^e

with

pnvors

is

the

wage

Na¬

notions

to

effective

second

step in the
settlement that has

been concluded between all roads
and most of the unions and which

will

'the

represent

increase

In the

case

of the Great North-

hour means
about $600,000 on the annual wage
bill so that the 1957 wage cost will
each

cent

for

for

some

1956

$8.5

per

million

without

lowance for the
other

more

making

than

any

al¬

possibility of

The

^

mu-

District

(Detroit

of

and

Columbia,

March

about

5%

a

Northern

Great

Nov. 1.

the wage

bill amounts to $1.45

This increase

in

per

share before Federal taxes which

the

for

this

of

first

would

year

to

if

continuation

the

of

Great

been

not

had

it

five

have

less favorable for the

Northern

the

for

heavy

movement of grain that was such

important

factor in swelling
the road's 1956 earnings. Grain is
an

long-haul

a

and

its

or

item

nounced plans to consider the
construction of a pipeline from
the Williston Basin to Lake Superior ports via
inasmuch

for

whether it

the

Great
east¬

moves

westward/and this traffic

as

Williston

the

Twin

Cities

the production of the

Basin

is

showing

now

of exceeding local

Sincb

capacity.
eastern

refining
pipelineCto the

a

markets

to

,

handle

.

this

.

t

J

production is certain to be
ku*R by one concern or another
as soon.as traffic builds up to an
economical level, the Great Northe?n» " xt builds the pipeline, can
Plc^ up business that would not
be long-term rail traffic in any
case'JL.n *1® ca?e ° 5be Sou'thfrn Pacific, the first of the rails
to £° mto

pipeline business,

the Pipeline is not in competition
with the railroad. Over the longer
the

run

traffic

would

be

lost

to

the rails anyway.
Additional traffic diversification
has
come
from
industrialization

along the lines of the Great North¬
from

dam

power

and

irrigation

construction

ern,

and

from

the

construction of SAC Air Bases. In
1956

alone

were

located

Great

206

Northern

jet air bases
struction

lines

still

the

large

under

con¬

Dakota

North

eastern Montana.

of

three

and

are

in

industries

new

the

on

and

One of these

is

just north of the road's new Gavin
freight
Yard at Minot, N. D., which, in¬
121/2%
for
cidentally, is one of the most

amounted to 31.4% of 1956

pre

against

as

revenues

iron

with which the road is so

generally associated.

It

was

stated

the road about a month ago
that grain shinments in the first

by

months

four

the

of

current

year

above the total for the

20%

corresponding 1956 period. At the
time it

in

was

stated that
movement

ore

pected for the full year
pared with 1956 which

10%

a

is

as

ex¬

com¬

was

ad¬

versely affected bv the strike at
iron minps wMch completely

the

ore

down

shioment

the

from July

of

iron

1 to Aug. 5 of last

year.

As

in

1956 the grain

bas been
f

•

again on

ferrito'-u. inelu^ing

Mirb'^an

in
in

the

results

months
been

an¬

"cost-of-living" adjustment
t,t

whereas

"hold-downs," according
the road's 1956 report.

shut

be

1957.
This
increase of

after

increase

effective.

ern

additional

of

an

resulted
resulted

1956
1956

7,

same

1958

7-cent

pas-

stated

was

increase'of

6% nominal

hike is scheduled to become

1,

recent

in

revenues

would

were

Nov.

automatic

the

1956

qompfhinff less than 4H %

when
hourly

to

run

another

Trie,

Nortv',extern

Morton,

1951

of t^o Factum

associated

19^1.

1

1.956

wage

North¬

of the pacific Coast, ter-

California.

Nov.

increase

7-cent

The

by

received

much smaller

a

million

$11

freight

ward

the
3-cent
per
hour
cost-of-living
escalation that took effect on May

which

cents

report that the
higher freight rates should yield

of

and

to

fare increases. It

senger

1944, is in charge of the southern

year

however,

the'more

by

Northern

territory

crude

temporary since rail movement is

signs

increases

28 and

extent,

in effect for the final two months
current

65

was

increase burden will

wage

Moorman,

the

which

share in 1956.

cor¬

period.
Never¬
Great Northern may

up

Kuechle, with National
since 1943, is in charge of the mid-

Mr.

of

products.

RAILWAY

we're accrued at the rate of 30.2%

1956

the

end

in

in April,
accruals also.

tax

this

of

.

The decline

The combined effect

New

dis¬

was

the

1944.

State,

heavy movement

been

through into new high ground million non-recurring adjustment
again this year, particularly as to for an over-accrual in previous

by

Jones, with the corporation
since
1943, is in charge of the
Northeastern
territory, covering
the states of Connecticut, Maine,
Massachusetts, Upper New York

been

_

tional Securities & Research since

Mr.

has

of construction and
pipeline mate¬
rials
and, until pipelines have

new highs for both
in 1956 but which will be at a high cost compared with pipeline.
gross and net income of the Great somewhat higher rate this year It is thus typical of the forwardNorthern it may "take some do- for two reasons. One is that the looking management of the Great
inci"
vnoira
ing"
to
make
another
break¬ 1956 figure was reduced by a $1.3 Northern
that
they
have
an-

net

formerly with Pacific Coast Secu¬




NORTHERN

year

and Hawaii. He has been with Na¬

uooer

Calif.—Rob¬
opened offices at

last

tinguished by

one

Carter

Mr.

National

(Special to The Financial Chronicle)

pressed

This latter traffic is essentially
Because

the face

assistant treas

named

was

been in the

1951:

Onens

BEVERLY HILLS,
232 North Canon

J.

Vice-President

a

\ypchincdon. He joined National

ert

He is

tional Securities Series of mutual

Frpsno),

Woodley Street.

loans

storage facilities.
The less
orderly marketing by often hard-

movement

Na¬

been with National since 1945.

(Special to The Financial Chronicle)

Robert Bi*ar>d

During World
Officer m

By GERALD D. McKEEVER

GREAT

funds with aggregate assets in ex¬

Jersey

"

9900

London.

the United

tional Securities & Research Corp.
sponsors

which

SEPULVEDA. CaMf.

of

War H he served as an

Securities

Moorman

l..

l..

by Henry J. Simonson
Jr., Chairman and President. Na¬

politan

W. C. Smifh Ooens

result

as

formerly a member of the Eco- early months of the
year.
The
nomics Faculty of Yale and Rut- result for the
"granger" roads and
gers Universities and also Special
particularly for the Great NorthCorrespondent for
The Econo- ern> was a jow ievei Gf
revenues

announced

ner

sional

a

Anderson, President. Distribu¬
Group is sponsor and invest¬

a

CCC

via

support

and

there

and

of

was

nounced that Robert D. Anderson

according to an
made by Herbert

pos¬

sory, it is hoped that
ployee will find enough time to
give the plan a fair trial. It is
.also hoped that those employees

not

He

honestly

we

It can conceivably be
steady employment and
it might also be a means of assur¬
ing regular pay checks.
the

Yale Law School and attended the

mist'

President

aid to

"While

February of this year as Director
of Sales Development, is a graduate of Wesleyan University and

movement

■

as

sibilities.

an

Reed,
organization in

the

price

its

°uf'

that

known

has

Vice

Vice-

that

now

O

this may seem a rad¬

some

joined

as

Mr.

problem

69

the
year
amounted
to
only
Development. about
4%% of the year's total,
Mr.
Anderson, who joined the but the
ment adviser for Group Securi¬
corresponding ratio for
ties, Inc., one of America's oldest Company in 1954, is a graduate of 1956 was almost 14%. While this
the Xiuibilivibb JjLllUUl* JJdxVCVxllCj
vllv!
Hotchkiss School, Lakeville,
1
Virfnl
and largest mutual funds.
' r°™g
Mr. Ahbe, who is a resident of conn., Hamilton College and the «
Summit, New Jersey, was former¬ University of Michigan School of
Business Administration. He was
doe in no small part to
ly manager of the Florida offices
progressively better traffic diver¬
of Harris, Upham & Co.
and, ear¬ formerly with Kidder, Peabody & sification, much of which has re¬
Co.
lier, headed his own investment
sulted
from
greatly steppedl-up
firm in Palm Beach. He joined
oil activity in the Williston Basin.
In Investment Business
Distributors Group in 1954. Mr.
While the Great Northern owns
Ahbe served in Military Intelli¬
(Special to The Financial Chronicle)
no oil lands here or
elsewhere, it
gence in World War II. A Lieuten¬
CONCORD, Calif. — Edward L. does benefit trafficwise from the
ant Colonel in the U. S.
Army Re¬ Nichols is now engaging in a se- increase in operations in this area.
serve, he attended Lafayette Col¬ curities business from offices at The Great
Northern serves parlege in Easton, Pa.
3033 Willow Pass Road.
ticularly the prolific Tioga and
East
Poplar fields
into
which

the WORK BREAK."
"To

Ahbe,

tors

new

set

firm.

the

sultants, Princeton, New Jersey.
At the same time, it was an¬

R.

competition

to

of

of

announcement

find it necessary to
policy—
"Effective Immediately
"We are asking that somewhere
between
starting
and
quitting
time and without infringing too
much
on
the
time
usually de¬
voted
to
lunch
period,
coffee
breaks, rest period, story telling,
ticket selling, vacation planning,
and the rehashing of yesterday's
TV programs, that each employee
a

made

member of the Board of Directors
of the Company,

we

institute

L.

and Director of Sales of Distribu¬
tors Group, Inc. has been made a

All Employees!"

to

John

..

the

was

Progress

At Distributors

our

is

Harvard Business School.

business

attention."

our

Carolina and Eastern Ten¬

nessee.

poration's executive staff, it was

chuckle, the thought

a

in

expressed
to

job,

Alabama, Flor¬
North Carolina,

Georgia,

South

cor¬

"Keeping in mind," the publica¬
tion says, "a picture of the young
inexperienced
graduate starting
his

who

City area, including North¬
New Jersey and Long Island,
Mr. Mills, also with National

also

Plainfield, New Jersey,

President

and

new

world.

on

of

Announcement

ern

directors

elected

Vice-Presidents and five
dent

has been made steadier

of

the Metropolitan New

covers

York

tional Securities & Research Cor¬

poration

the election of S. Chadwick Reed

and

Nat'l Sees. & Research

of

(2793)

a

derh^e

wMch

divp

Also,

have

jn

substantial offset to
in

1"~~ber

suf£ered

reside

grain

movement

tial

traffic

shipments
from
the

construction,
is less of a

modern of the electronic
button"

classification

January

the

ICC
of

sion

road's

of

the

this

Last
the

approved

construction

serve

"push¬

or

yards.

16-mile

a

exten¬

main

line

air base which is

pected to be

substantial

a

to
ex¬

traffic

tributary.
The

net

of

all

Great Northern
its

1956

(based

is

topping
I

roads

the

three

the

whose

of

t'

the

growth road,
of

list

135

1956

136, or only

major

exception

wave.
was

Chesapeake
revenue

one

roads

riding the crest

Northern
e

of

the

Pocahontas

export coal

Great

rival

that

index

with

which have been

the

is

the 1947-49 average as

100)

of the

a

revenue

on

Class
of

this

Even so,
a

close

&

Ohio

index

was

notch higher.

The Commercial and Financial Chronicle

70

.

.

.

(2794)

The following

Indications of Current

latest week
week

Business Activity
Latest

AND STEEL INSTITUTE:
operations (percent of capaclty)___
Equivalent to—
Steel Ingots and castings (net tons)
IRON

AMERICAN

-

oil

condensate output—dally

and

gallons each)

42

Crude

June 16

§2,257,000

Age

Week
*87.5

output (bbls.)
Distillate fuel oil output

<bbls.)„
May
terminals, in transit, in pipe lines—
Finished and unfinished gasoline (bbls.) at
—May
Kerosene (bbls.) at
———
—*
--May
Distillate fuel oil (bbls.) at.
May

Residual fuel oil output (bbls.)_

Ag'

ALUMINUM

*2,240,000

2,299,000

2,155,000

7,457,350
7,910,000

7,633.000
26,214.000

2,048.000

CONSTRUCTION

ENGINEERING

CIVIL

12,592,000

12,264,000

12,580,000

8,003,000

7,584,000

7,952,000

Public construction
and

State

municipal

Federal

(tons)
(tons)—.

anthracite

Pennsylvania

SALES INDEX—FEDERAL
SYSTEM—1947-49 AVERAGE = 109

DEPARTMENT STORE

198,332,000

184,870,000

23,935,000

21,165.000

21,879.006

91,532,000

79,119,000

77,399,000

39,791,000

37,571,000

35,836,000

671,785

722,903

718,924

719,209

Refined

590,672

617,829

610,677

631,310

Indicated

AMERICAN

■

Domestic
Benzol

Scrap
METAL

100,712,000

211,609,000

116,022,000

Month

198,195,000

173,596,000

134,191,000

Orders for

171,613,000

140,395,000

105,466,000

New

22,515,000

26,582,000

33,201,000

28,725,000

8,900,000

*9,565,000

9,570,000

8,552,000

545,000

487,000

499,000

11,550,000

289

257

5.670c

$50.83

$47.50

$44.17

June

31.525c

31.300c

31.475c

29.300c

28.975c

29.950c

43.300c

15.000c

15.000c
14.800c

15.800c

11.500c

12.000c

14.000c

CIVIL

13.500c

Public

98.500c

98.500c

99.125c

95.125c

94.71

95.92

-104.83

99.04

100.09
98.73

95.32

96.23

104.31

87.18

87.59

88.67

93.08

93.97

103.13

95.47

95.92

96.54

105.17

94.26

95.32

97.00

106.04

!!

June 11

DAILY AVERAGES:

YIELD

)

I—June

3.52

3.35

4.13

4.09

4.01

June ii
June ii
June 11

*

j

«.

";ime

}

June
June
June

1
1
1

June

7

Orders received (tons)

(tons)

—

activity
Unfilled orders (tons) at end of period

Percentage of

REPORTER PRICE INDEX—

OIL, PAINT AND DRUG
AVERAGE

3.88

-3.81

3.72

1

=

3.83

sales

4.05

3.99

4.59

4.51

3.75

4.20

4.14

3.56

4.04

4.01

3.97

3.44

4.12

4.05

3.94

3.39

purchases

Refined

of

-

-

ANI)

384.116

382,666

493,679

110.20

110.24

110.44

108.70

Cotton

269,270

597,183

425,430

Y.

650,685

132,590

141,720

78,490

68.990

584,170

509,176

520,319

612,4.33

total

716,760

650,896

598,809

681,243

OF

2,748,-20

May 18
May 18
.-...May 18

2,573,793

1,772.060

478,610

470,920

265,160

2,138,436

1,742,439

2,237,963

2,897,260

2,609,356

2,007,599

LABOR

$76,726,917

1,342,810
$67,158,913

1.313,262

1,190,651

1,424.509

1,001,859

$48,716,705
855,325

1,012,969

7,562

4.009

14,739

—May 18
.May 18

1,298,523

1,179,083

847,763

$67,472,968

$57,962,814

$41,380,676

11,568

374.080

323,530

213,150

May 18

374.080

323,530

213,150

as

of Jan.

1,

487,490

436,470

369,720

534,490

$4,539

*$30,190

$27 432

21.861

*21,713

20.001

*$51,903

$47,433

28.933

States:

(in

fine

*29.130

18

560,170

13,034,650

11,919,650

13,610.440

12,479,820

382,770

MOTCR

VEHICLE
IN

8,664,580

9,047,350

11,755.340

motor

EARNINGS

SOCIATION

OF

I

AMERICA

101.081

456

ROADS

371

$388,984 912

(AS¬

RRs.)— Month

March:

of

100):

OF

CLASS

552,881

83,169

474

coacheo

RAILROAD

654.333

579.105

104 633

trucks

of

668.730

549.744

89.371

MANU¬

passenger cars
motor

42.671

April:

vehicles

of

28,250

*43.186

654.851

of

*30,229

45.069

FROM

SALES

S —AUTOMOTIVE

UT.

of

number

131.284

3,012.601

*93,210

28.403

FACTORY

*133,271
*3.188.881

89.667

!

:

Number

11.309.940

119 472

2.977,765

u

—

Number

445,400

27,095-

1

ounces

short tons)

Number of

575,790

Total

117.5

117.2

4

90.8

89.9

June

4

106.5

105.3

104.4

102.9

91.6

88.6

82.9

125.3

125.2

125.4

121.4

117.2
90.21

farm

and foods

June

4

$903,612,439

$815,462,206

operating expenses

690,143.852

643,339.479

76.38

78.89

76.32

$100,351,351

$84,423,267

$99,941,473

89.857.313

65,734.214

88,976.189

71.000.000

47.000,000

70,000.000

Operating ratio

91.4

Taxes

Tlncludes

1,024,000 barrels of foreign crude runs.
SBased on new annual capacity of 133,459,150 tons
against, Jan. 1, 1956 basis of 128.363,090 tons.
tNumber of orders not reported since introduction of

pound.




£ Prime Western Zinc sold

on

delivered basis at centers where freight from East St. Louis exceeds

•

4—

Net
•

other then

operating revenues

Total

114.2

4

Iljune

as

$4,898

MINES)—

OF

FACTURERS' ASSN.—Month

Juno

Monthly Investment Plan.
a

(BUREAU

(in fine ounces)

PLANTS

May 18

foods

1957,

$5,524
SERIES—

February:

(in

railway operating income before charges

Net

income

ZINC

one-half cent

571

1.025

AND SALES

NEW

)£ ———.-.i—

(in short tons)-

Total

~May

figure.

$2,993

495
1242

$30,378

Lead

245,680

STOCK

products

•Revised

33,161

March

of

Copper (in short tons)

TRANSACTIONS

May 18

commodities

124

production of recoverable metals in the

Silver

245,680

<95.7

All

*131

(million of dollars):

Zinc

DEPT.

120

131

:___■

United

(SHARES):

S.

*134

$3,857

———1"

OUTPUT

Mine

,

U.

*98
T06

INSTITUTE

—

——

Month of

$52,224,287

May 18

—

*90

98
115

138

.

COMMERCE)

Nondurables

METAL

1,008,960

May 18

...

commodities

Processed

OF

Sales

.

SERIES

100

109
109

$66,962,066

Commodity Group—
Farm

—_

1,271,103

sales—

=

111

YORK—1917-49

April:

of

PURCHASES

Month of March

[

(1947-49

NEW

549

Durables

——May 18

Y.

113

FED¬

Inventories—

—May 18

N.

122'

*106

FEDERAL

i_i___

(DEPT.

sales)—

THE

*127

122

SECOND

MANUFACTURERS' "INVENTORIES

v

sales

—

122

1,370.663.

$52,239

2,608,923

Gold

ON

:. 152,112

19,290.000

RE-

370.960

2,418,650

May 18

SALES

118,393
985.087

2,537.665

STOCK

____;

MEMBERS

-

18,457,000

1.118

_

ROUND-LOT STOCK

104,334
966,626

„

INSURANCE—Month

LIFE

722.551.

1,588.323"
14,684.667.

(000,000's omitted):

May 18

PRICES, NEW

SALES

OF

690,627
1.654.221

13,099,426

is

Industrial

sales

shares

56,731

18,365.000

£

DISTRICT,

Oruiiuuy

COMMISSION:

._

V

1,515.629

monthly), unadjusted
daily I, unadjusted-—

INSURANCE

658,420

purchases)—t

143.049

-

Average^! 00—

seasonally adjusted-.

Stocks,

—May 18

N.

ON

143.330

11,894.888

)

——

.———May 18

Total sales

All

BANK

807.979

—

—

of May 4

adjustment

STORE

< average

LIFE

EXCHANGE

_

STOCK

_

as

(average daily), seasonally adjusted
Stocks, unadjusted

352,840

sales

WHOLESALE

140,191

"

COM-

Sales

383,850

sales

OF

OF

SALES—FEDERAL

RESERVE

(average

Sales

399,960

by dealers—
shares—Total sales—

round-lot

139,842

of May 4—

as

Average—100—Month

24.450

May 18

sales

Other

seasonal

RESERVE

328,390

Round-lot purchases by dealers—

Short

113,571

172.358

:

(tons

of May 4

SYSTEM—1917-49

ERAL

sales

AND

April—

STORE

DEPARTMENT

302,120

258.890

—

.

ACCOUNT

DEPT.

—

Month of April:
Adjusted for seasonal variations

■

ROUND-LOT

of

as

spindles active

SERVE

.

264,370

23,500

sales

Total

public storage

344,600
360,350

—

(customers'

other

EXCHANGE

116.716

:_L———

LINTERS

AN,D

DEPARTMENT

23,000

—

Customers'

FOR

143,961

•_

stocks at end of period

pounds)-

Consumed month

557,8«x

376,960

short sales

TOTAL

*106.718

i„

pounds)

(tons of 2,000 pounds)

Sales

May 18

Dollar value

2,000

Linters—Consumed month of April—
Stocks May 4-—--—:2—_t.—__

——.—-———May 18
_May 18

SPECIALISTS

dealers

of

91

10,380

_

of

110.016

273.228'

1,673,648

April:

272,725

389,380

.

SECURITIES

of

pounds)

In consuming establishment

1,574,840

—

2,000

account of members—

of orders—Customers'

Number

*2,015,104

MERCE— RUNNING BALES:

1,297,320

shares

Other

6,625.374

*245.933

2,109,626

tons)

93

963,230

May 18

Short

(net

272,124

1,139,520

purchases by dealers (customers'

of

6,898.602

5.965,912

144.013

month

95

1,574,610

;_____

—

Customers'

Number

of

282,388

1,268,910

_

Dollar value

Round-lot

6,211,845

262,459

242,783

323,020

—

________

sales 'by

Number

end

at

of

copper

—May 18

DEALERS

Odd-lot

2,233,000

—

88

1,780,540

———

—

—

of

40,104.000

1,750.000

6,895.073
6,632.614

______

261,684

off the floor—

purchases

Number

42,750.000

2,062,000

;L

tons)

(net

(tons

2,000

COTTON

STOCK TRANSACTIONS FOR ODD-LOT ACCOUNT OF ODD-

Odd-lot

42.110.000

of Mar.:

261,409

1,457.520

sales

—

192.593

MINES)—Month

In

May 18
—May 18
May 18

Total sales

I.OT

OF

OF,MINES)—Month

stock

S. A.

—..May 18

sales

EXCHANGE

(BUREAU

(tons

Without

—

sales

184 576

production in U.S. A.—.

In U.

277,520

purchases

Other

639,653

341,285

413.1

1,584,860

.—.—

Short sales

832.246

543.762

_______

344,224

——-----—May 18

Total round-lot transactions for

Total

1,287.524

728,338

712,252

409.2

176,290

———

transactions initiated

Total sales

$2,119,770

731,781

___

.

'

coke

Re'ined

the floor—

———

Total sales

Other

municipal-,

381,000

1,081,760

sales

Short

$1,460 119

of

421.9

426.3

305,700

.—-——

sales.

Total

$83,800

Deliveries to fabricators--

,

1,632,010

——;

Other transactions initiated on

Other

$88,900

1,053,537

Month

—

INSTITUTE—For month

Crude

3.49

1,700,920

———

..

sales

other

$39,000

EN¬

—

_„Jv——

_

coke

Copper

3.35

—May 18

purchases

Short

12.600
23.800

803,194

NEWS-RECORD

(BUREAU

Oven

FOR

TRANSACTIONS

Total sales

Total

$47,400

13,100
'23,900

construction

"Beehive

'

Other

s$51,900

$1,856,731

CONSTRUCTION

Production (net tons.)
Oven coke (net tons)

3.26

3.89

ACCOUNT OF MEM¬
BERS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS:
Transactions of specialists In stocks in which registered—
Short

$52,200

13,100

coal and lignite (net tons)—.
Pennsylvania anthracite (net tons)

■

ASSOCIATION:

NATIONAL PAPERBOARD

Total

$176,760,000:

March

of

Bituminous

3.46

4.25

!1

"J11"*;

Group

Group

MOODY'S COMMODITY INDEX

1949

$197,024,000

COM

OF

April:

COKE

2.85

3.50

~ ::

4.62

ROUND-LOT

__

DEPT.

—

.

Group

Production

—$192,432,000

;

SYSTEM—Month

dollars):

OUTPUT

of

<,

100.00

92.35

COAL

106.74

95.01

June 11

Utilities

938

OF

construction

State and

108.34

97.78

4.07

Public

136:

GOVERNORS

SERIES—Month

construction

Federal

,3.96

Industrials

133

747

'

S.

Private

96.69

Group

Average corporate

Railroad

ol'

114
693

(000's omitted):

U.

24.000c

97.94

137,436

<

:

May

13.500c

94.12

Group

BOND

NEW

ENGINEERING

25.000c

Juno 11

Government Bonds—

U. S.

OF

thousands)__

(in

GINEERING

11.500c

ii

5.943

107,703

6.559

23,700

Total

95.35

9,772

service—

Retail

14.000c

89.90

5,359

RAILROADS—

in

order (end of month >

on

INVENTORIES

(millions

25.000c

88.02

8,056,000 :

undelivered

Manufacturing; i__Li__ „__£_ii___——,

11.000c

88.21

*51,834.000

8.961

and

AMERICAN

units installed

April

25.000c

June

-

'

105,190

.DEBITS—BOARD

COPPER
MOODY'S

12.528,000v

6.420

order

on

Wholesale.

15.800c

•

'

INSTITUTE—

month)

of

BUSINESS

16.000c

16.000c

14.800c

June
June
—June
June
—June

*

June 11

Group

281,707.000

CAR

291.391.000

——i.

44.300c

-June

—

Industrials

;,353,533.000

L

(barrels)—

THE FEDERAL RESERVE

$45.83

June 11

Utilities

16,618.000

New locomotive units

$60.29

-

Public

cars

OF

5.179c

Aaa

Railroad

24.584.000

19,243.000

lort

ex

cars

of

MERCE

$64.56

corporate

Average

24.941.000

18,196.000

and

April:

of

AVERAGES;

DAILY
Government Bonds—

MOODY'S BOND PRICES

^

267

5.670c

—

(St.

8.

225

$64.56

fZinc

U.

21,852.000

barrels)^——

<

domestic

freight cars
delivered

new

freight
of

»

23.382,000 ;

April:

Month

10,951,000

5.670c

(New York)

Lead

11,311,000

864.56

——

—

at_——

at
Louis) at
(delivered) at—
—
Zinc (East St. Louis) at
Aluminum (primary pig. 99% ) at
Straits tin (New York) at

Lead

10,936,000

209.027.000

25:611,000

40.000

imports

ASSOCIATION

109

133

232,449.000 '

231,880.000
24.000

RAILWAY

Locomotive
11G

257,515.000

23,682.000

_

34.000

stocks

of

Backlog

398,000

110

238,815,000
.215,099.000

(barrels*—.

(barrels)

Total

at

refinery

refinery

Export

output

„

all

186,655,000

Electrolytic copperDomestic

.1_

(barrels)——T__u——±.l__

imports

$385,205,000

June

ton)———————
steel (per gross ton)
PRICES (E. & M. J. QUOTATIONS):

Pig iron (per gross

.

V

(barrels of 42 gal-

output

consumption

209,170,900

June

-8,255,824

(barrels)

products

$298,907,000

—June
June

steel (per

Finished

oil

233,529,000

DUN &

———

COMPOSITE PRICES:
lb.)

AGE

IRON

—

—

—

output

$442,699,000

June
INDUSTRIAL)

(COMMERCIAL AND
INC

oil

gasoline

$250,213,000

KDISON

BRADSTREET,

13,523.785

.7,066.732

'

BANK

FAILURES

MO, 589.074

INSTITUTE—Month

(barrels)

8

9.814.000

7,821.616

tor.s>—

.a.——i,__
v.", >r

crude

Natural

Decrease

June

ELECTRIC INSTITUTE:
Electric output (in 000 kwh.)

PETROLEUM

I

produced

<net

___

of February:

25,020,000
96,881,000

RESERVE

of Feb.

INSTITUTE:

products

Total domestic production
Ions each)—

40,067,000

-June
June

.

steel

of

of March—

AMERICAN

(end

and lignite

coal

Bituminous

tons) end

STEEL

.

Month

194,373,000

195,285,000

MINES):

(U. S. BUREAU OF

COAL OUTPUT

(short

AND

-

31
31
31

June
June
June
June
June

—

IRON

Shipments

ENGINEERING

—

construction

Private

17.074

Crude

construction

8.

U.

132,763

145.131

8,319,000

•"

NEWS-RECORD:
Total

147.029

1,978,000

13,055,000

1
1

Ago

166.324

aluminum

ingots and steel for castings
(net tons)—Month of April

27,218.000

1,878,000

I

June
cars)—June

freight loaded (number of cars)...—
freight received from connections (no. of

Revenue

Year

Month

MINES):

OF

119.059

8,072,000

27,102,000

ASSOCIATION OF AMERICAN RAILROADS:
Revenue

(BUREAU

Steel

7,037,050

7,529,450

2,119,000

May 31

Residual fuel oil (bbls.) at

of that date:

Previous

Production of primary aluminum in the U. S.
(in short tons)—Month ol February—..—

Stocks at refineries, bulk

——

are as

Month

93.4

84.2

1)8,132,000

31
31

of quotations,

cases

Latest

27,476,000

31
31
31

in

or,

either for the

are

Stocks of

7,418,450

May 31
May
—May
May
May

Kerosene

that date,

on

Year

AMERICAN

—

(bbls.)

(bbls.)

output

.<88.2

month ended
Month

(bbls. of

average

———

to stills—daily average

runs

Gasoline

Week

-

Previous

production and other figures for th*

cover

Dates shown in first column

month available.

INSTITUTE:

AMERICAN PETROLEUM
Crude

j

.June 16

steel

Indicated

or

statistical tabulations

or

Thursday, June 13, 1957

of

after charges
(BUREAU

OVIDE

(estimated)

OF

•

678,443.510

MINES)—Month

March:

Production

Shipments

16.939

(short tons)

(short

15,003

17.405

15.451

tons)

Stocks at end of month

(short tons)_4.

•

14,711

13,487

29.877

28,389

24.212

Number 5646

185

Volume

.

.

The Commercial and Financial Chronicle

.

proposition
ried
clause

it

though

even

10-year

a

non

-

(2795)

an

car¬

even

had

callable

more
costly level than
originally been proposed.

protection of buyers
against sudden redemption.
Rejecting the

it

Central

ing

offerings

time

$6,450,000

of

trust

corporate

took

date, with

ally

as

On

indication

any

market

taken

not

was

out of the

was

gener¬

the

that
woods.

the

contrary, market ob¬
reported
that
demand

servers

continues to lag and that

there is
nothing
to
suggest
any
early
change in the attitude of inves¬
with

tors

New

funds

to

put

work.

to

offerings

corporate

now

should
be attracting individual investors
as well as institutions with funds
to

yields

affording

are

the

rection,

it

although

about

time

that

individuals

in

either

from

ramparts

first

Bond

them,

a

marks
generation
had

have

sucli

at least some of
convinced that people

men,

are

or

greater numbers are absorbing

the

articles appearing in
periodicals
outlining
how
the
purchasing power of the dollar
many

behaved

has

extended

over

pe¬

riods of time.
These observers reason that thi;

looking
ahead
some
endeavoring to figure

Clement,
and

years,

how

ing

maintain

to

the

of their savings,

power

buying

shy¬

are

from the fixed return*

away

offered

planned

bonds and

mortgages,

by

three

road,

years

bids.

sold

the

On
the

bidders
prices to

top
at

it

as

earlier

the

had

threw

ago,

certificates

the

out

occasion
to

of stock to shareholders at

share

The

it

in

the

ratio

share for each 10
taken.

FARMINGTON,
A.

David

been

staff of M. P. Giessing & Co.,
North Jefferson Street.

(Special to The Financial Chronicle)

LAKE

WALES, Fla>-Ldvie W.
Livingston has rejoined the "Staff

109

added

Johnson-Tillman Investments,
Orange and Market Streets. Mr.
Livingston
has
recently
been

of

With Merrill Lynch

a

with Bache & Co.

new

one

was

99.8%

CINCINNATI, Ohio
Schmidt

underwrote

the

is

with

Fenner

—

Merrill

&

John E.
Lynch,

DIVIDEND NOTICES

Dixie

Beane,

NATIONAL SHARES

Terminal Building.

14
A

offering

made

several

Eddy Adds to Staff

aways" during the course of the

offering
to

which

naturally

bring the project to

a

ful conclusion.

success¬
*

'

Lewis

changes.

of

payable

"And

would

the

be

Vice
June

of

sented

the

Stock Ex¬

■

two

affecting

Rosario

New York 5, N. Y.
June 12.1957

-

DIVIDEND

(Special to The Financial Chronicle)

The

of

Board

419

NO.
of

Directors

this

Company, at
Meeting held this day, declared an interim
for the second .quarter
of 1957,
ol
Fifty-Cents ($050) a share-on the outstanding
capital stock of
this
Company, -ipayable
on
June 28. 1957, to stockholders of record at the
close of business on June 21, 1957.
a

HARTFORD, Conn.—Hartvig T.
Johnson Jr. has joined the staff

dividend

Co., Ill Pearl

McDANIEL, Secretary-Treasurer.

With Sheffield Co.
(Special to The Financial Chronicle)

SUPERCRETE
NEW LONDON, Conn.—John J.
Moran

is

affiliated

now

ST.

&

Company,

pre¬

State

325

Street.

.

.v

-

LTD.,
MAN.

BONIFACE,

with

NOTICE

Sheffield

DIVIDEND

OF

Notice is hereby given that the Board of
has declared a div dend of eight

•»;;

Directors
and
on

DIVIDEND NOTICES

schools
other things

number of

a

STOUT,
Secretary

and

11

one-quarter
the

Common

pany in
not been

and

roads

President

Mining Company

Joins G. H. Walker

three years

or

1957 to stock¬
business June

S.

York & Honduras

New

<■

by the opposition in

last

the

programs

of

1957.

10,

G. E.

budget if we
and
adopted

followed

had
some

15,

JOSEPH

Street.

interesting is what
would be the budget today if
it followed the projection that
was
here in 1953, or what

York

staff] of Eddy & Co.,

and Boston

of G. H. Walker &

of the facts that

some

July

at the close

record

are

would be

New

1957.

124 Broadway,

"It

CORPORATION

Street,

Street, membersiof the

New York

might be better for some of these people that
complaining so bitterly (about the President's
budget) to look up the actual facts instead of merely
listening to partisan speeches.

stock

28,

HARTFORD, Conn.—George T.
Colt, .Mark H. Klein and Mrs.
Maybelle C. Shepard have been
33

Unconvincing Retort

capital
holders

(Special to The Financial Chronicle)

helped

Wall

quarterly dividend of twelve cents

(12c) a
share and an extra dividend of live cents (5c)
a
share have been declared this day on the

"lay-

added to the

An

Rejoins Johnson-Tillman

-r

Mo. —Thomas
the

Dis¬

Co., its rail car manufac¬
turing unit as 4s. That company
subsequently disposed of them at

has

Adds
to

Pierce,
who

The R. F, Griggs Com¬
35 Leavenworth Street.

of

(Special to The Financial Chronicle)

of

held,

$220

.

Bankers

done

patch

and

savings deposits.

International Business Machine

a

staff

(Special to THE^rNAirciftL-Chronicle)

the

strong undertone
in the stock market, with indus¬
trials in new high ground, serves
as a stiffening
backdrop.

F. Wheeler has been added to the

La

pany,

Naturally

Conn.—Richard

WATERBURY,

Minn.—Carl J. Fuchs

M. P. Giessing

Griggs Adds

.(Special to The Financial Chronicle)

r.

has joined the staff, of Smith,
Hue & Co., Pioneer Building.

Corp's offering of 1,055,223 shares

road

yield from 4.75% to 5.50% accord¬
ing to maturity.
But

ST. PAUL,

top

The

reoffer

to

Successful

5.5% coupon

a

second bid of 98.6816

a

tendered.

di¬
the

opportunities.

in

being

But there is no rushing

place.

of

that

equipment

Bankers offered the

brought to market this week ap¬

Offer

R. F.

Smith, La Hue

vestors with considerable celerity.

turn
offer¬

certificates.

peared to be fairly well received.
this

its

for

of

price of 98.757 for

But

to

out

bids received

down

Several

IBM

Maybe you can't sell debt secu¬
rities
quickly these days.
But
equities appear to move out to in¬

Bids

finally got around to
railroads again and New York

Well,
the

Joins

(Special to The Financial Chronicle)

for

71

cents <$.08t4) per share
Capital stock of the com¬

respect
waived,

of which dividends have
payable July 2, 1957 to

shareholders of record at the close of busi¬

The Garlock

ness

June

14, 1957.

Transfer books will not be closed.

*

is indicated that
while some new issues, in fact the
majority, have been laggard in
moving out to investors they have
Meantime,

it

accumulating

not been

dealers'

on

in any disturbing volume

shelves
since

sponsoring groups evidently
not waiting too long before

are

cutting such
syndicate.

from

"I

have

not

.

Preliminary inquiry around for
the
debentures
being marketed

a

lot of money.

ri e».

Packing Company

c.i»ennower

particular ap¬
peal of my own to make to
—
these people, except to read the facts, understand
what is going on, why we need a lot of money for
this Government, and what are they going to do
about it."—President Dwight D. Eisenhower.
This

Mover

Fast

A

loose

issues

that involved

seems

to us to be a

woefully weak defense,
budget estimates as those
which make large expendi¬

much of current

so

policies and

programs

^

RA

J

COMMON DIVIDEND No. 324

meeting of the Board of Direc'
tors, held this day, a quarterly divi¬
dend of 25y! per share and an extra
dividend of ,25.^ per share were deAt

a

dared

on

the

common

stock of the

Company, payable June 29, 1957, to* '
stockholders of record at the close of
business

June 14, 1957.

A

H. B. Pierce,

Secretary

DIVIDEND NOTICES

CANADIAN

yield 4.80%..
K

course

those

a.

in

factor

participating

in

favor of

the

'Ami'
CORPORAIIOn

other

recent

At

CORPORATION

m

Detroit

mar¬

million

$75

appeared

Cred¬

20-year

notes

moving
well,
"out-the-window"

be

to

though not

of

an

23, Michigan

COMMON

DIVIDEND

NO.

77

offerings.

Commercial

Meanwhile.

—

-

&

On

it's

Dividend

was

of

run

NOTICE

ALLIED PRODUCTS

the 25year maturity which
took it out
of competition with much of the
of this issue

keting

30 cents
on

DIVIDEND

and proceeded to reprice the
for
public
offering
at

Of

PACIFIC

RAILWAY COMPANY

a

issue

to

Company

Second Quarter Dividends

price of 100.1599 for a 4%% cou¬

101.085

Diversified Closed-End
Investment

"'sell-out" for that is¬

a

the first one in a while.
Bankers paid the
company

pon

<7,i-continental
«

tures inevitable.

sue,
.

DUNSMORE, C. A.,

Secretary-Treasurer.

■

%aao.us.wt*or*

for Consolidated Natural Gas Co..

indicated

F. R.
,

no

June

poration,
per

4,
a

1957,

the

board

of

Michigan corporation,

directors

declared

share on the Common shares of the

1957

to

shareholders

of

record

at

the

of

close

Products

Allied

quarterly

a

Corporation,
of

dividend
payable

business

June

Cor¬

of 40c

June 28,
14,

a

Notice

67Vi cents

oOo

meeting

share

a

the COMMON STOCK
a

share

on

the

—

$2.70 PREFERRED STOCK

of the Board of

Directors held today a dividend of
seventy-five cents per share on
the Ordinary Capital Stock was
declared in respect of the year
1957, payable in Canadian funds
on August 1, 1957, to shareholders
of record at 3:30 p.m. on June 21,

Payable July
Record

1957

1,

Date June

1957

18,

Kenneth H. Chalmers

Secretary
65

Broadway, New York 6, N. Y.

1957.

By order! of the Board.

1957.

T. F. TURNER,

Secretary.
Montreal, June 10, 1957.

INTERNATIONAL

FINANCIAL NOTICE

SHOE
NOTICE

CONTINENTAL

To the Holders of

BAKING

The Board of Directors has declared this

CORPORATION

NOTICE

presently
debentures

after

HEREBY

IS

will,

this date,

upon

GIVEN,

that

temporary

presentation

a

on

or

be exchanged for definitive

The Board of Directors has declared this

dividend, for the second quarter of the
the

outstanding

Common

presented
trust

This is

.

be

day

year

exchange
of

New

R IE GEL

The

York

at

the

Hanover

15,

PAPER

the

corporate
Bank,

a

1,

per

close of business June

not

be closed.




HOSTESS
CANE

share

payable on August 15, 1957,

ord

at

to holders of record at close
June

July 20,1957.
H. Edwin Olson

the

of 60f
on

close

of

July
rec¬

of business

14, 1957, was declared

by the Board

of Directors.

Vice-President and Secretary

-

ANDREW W. JOHNSON

June 6,1957

Vic*-President and Treasurer

treasurer

June 7, 1957

payable

1, 1957 to stockholders
'W.

of business

WILLIAM FISHER

Secretary

quarterly dividend

per

25*

1957, to

By J, BICKNELL LOCKHART, Jr.

New York, New York, June 13,1957

A

share

The stock transfer books will

CORPORATION

Common Stock

regular quarterly

regular quarterly

1957, of 50$!

17, 1957.

70

New York.

a

dividend of

Stock, payable July
at

for

office

Broadway,

should

CONSECUTIVE DIVIDEND

COMMON STOCK DIVIDEND NO. 92

holders of record of such stock
debentures

declared this day

Common Dividend No. 49

on

debentures.

Temporary coupon

185™
The Board of Directors has

June 17, 1957.

the

coupon

St. Louis

DIVIDEND

quarterly dividend

$1.37]/i per share on the outstanding $5.50 dividend Preferred
Stock, payable July 1, 1957, to stockholders of record at the close

of business

1981

outstanding

day

COMPANY

QUARTERLY

of

Sinking Fund Debentures
due

COMPANY

Preferred Dividend No. 74

R1IGEL PAPER

3%%

REGULAR

THE COLUMBIA

GAS

SYSTEM, INC.

June

4,1957

72

The Commercial and Financial Chronicle

(2796)

Thursday, June 13, 1957

...

BUSINESS BUZZ
on.v.

from the Nation's

i-

Broadboftom S Bubbfedome

Behind-the.Scene Interpretations

:

SECURITIES

Capital

RECEPTION
/^niNGTON,

v,

Subcommittee

full

the

to

has

roads

com¬

41,000-rnile in¬
increased by
7,000 miles.
Total cost of the
interstate system alone would
be increased from $27 billion to

?

is

in

among leaders of
political parties and

executive

the

branch

heavier

the

expand

to

government

The air

rail

13-year period. To
complete all work and links is

will

be

roads

cross

tersections.

Public

of

Bureau

There

„

Roads

that construction is gain¬
ing momentum in all regions of
the country, with only a hand¬
ful of states lagging.
The states
says

putting

are

states

A

encountering diffi¬
obtaining right-of-

are

culties

in

areas

cities

in

the

in

and

in

prices

Land

ways.

the

of

few

rural

towns

and

practically all states
are likely to in¬

have risen and
from

crease

to

10

in the

20%

immediate years ahead.
An estimated

90,000,000 motor

streets

and

with

compared
now

1975

by

the

as

65,000,000

in use.

While

interstate

eco¬

com¬

a

has

been

system

slow

a

enactments

one

far

as

as

concerned.

are

Capitol Hill observers predict
•

that the 1958 session

for

up

is shaping

livelier session.

a

election

is

year

year

Next

be filled.
and

Senate seats

one-

are

to

Both the Republicans

Democrats

tax cut.

all

when

members of the House and
third of the

are

favoring

a

Any tax reduction leg¬

islation appears unlikely to be
enacted into law until 1958.

Commerce

be

the economy of
continues strong.

country

a

Department

that

is

1957

reports
going to

better year than 1956.

will include only about 1.2% of
the
nation's
total
road
and

timates

street mileage when completed,
it will carry 20%
of all the
traffic over the four, six,-eight

Es¬

goods and services.

and 10 lanes.

Eight and lu la^es
a few of the big

will be built in

metropolitan
The

areas.

multi-laned

interstate

system, according to new esti¬
mates presented to Congress, is
going to take an additional 1,500,000 acres of land. The acre¬
age will be equal to the land
area

for

51

cities

the

size

of

San

Francisco, Senator Arthur
V. Watkins, Republican of Utah,
said.

Passenger Deficit Study

.Passenger trains have failed
to show a profit in the U. S.

along

are

;the

Civil

being revised
line pertaining

all

to

public' works

in

the

Government, exclusive
highway program
starting
July 1, is expected to exceed
$1,750,000,000. This would com¬
pare
with estimated expendi¬
tures for 1957 of $1,466,000,000.
Civil public works spending for
fiscal 1956 was $1,054,000,000.
of

the

vast

The

place

to

and

get beyond the committee stage

Articles

capacity, would bring

total production by 1960 to 10,-

Mr. Williams said

072,000 tons.

that the

ANPA studies indicate

demand in 1960 in North Amer¬
ica

increase

will

to

9,500,000

this

session.

Jones bill
revenue

The sponsors,

mal

the

Under

Davis-

growth

who

tons

the

be

Self-Employed Pensions

if

prised

would

the

be

not

United

sur¬

States

shortage

print

in the coming
years because
of the growing
demand for paper.
He urged
the House Interstate Commerce
Committee to

give thought and
study toward opening up some
of the vast public acreage in the
Western States to private indus¬
try for pulpwood.
Approximately

newsprint
United

80%

the

of
in

consumed

the

States is imported from

International

Paper

Company is the world's largest
newsprint manufacturer.
dition

to

its

Canadian

tion, International is

ing

newsprint

and

plans to put

at

In ad¬

produc¬

now

Mobile,
a

TVA presently owes the Fed¬
eral Government

mak¬

Ala.,

machine

in

production at Pine Bluff, Ark.,

than $1,-

more

TVA

Qualified observers

on

Capi¬

Institute of

35th Street,

approval
this
pending proposals

session
designed

of
to

voluntary
pension
self-employed indiMeasures are pending

by

viduals.
before

the

House

Ways

and

the

By terms of
self-employed indi¬

bills

a

de¬

duction for income tax purposes
for amounts set aside for retire¬
Annual

ment.

not exceed

deduction

could

10% of self-employ¬

ment income.

■

[This column is intended to re¬
flect the "behind the scene" inter¬
pretation from the nation's Capital
and may or may not coincide with
the "Chronicle's"

own

that

would

committees

authorize

on

the

bills
Ten¬

Valley Authority to issue
bonds to provide for additional
power capacity to keep up with

become

Karony

affiliated

have

with

Daniel

Reeves & Co., 398 South

Beverly

nessee

the

growth of the

currently

Drive, members of the New York
Pacific

and

area.

appears

that the

changes.

spokesman for the Amer¬

•

-

■

Coast
•

.

-

Stock
•

since 1945.
As

a

Commerce

and

the

Interstate

Commission

is pre¬

tion,

Williams,

of

the

declared

newsprint

now

trade

paring to inaugurate a passen¬
train operating deficit in¬

is under contract.

vestigation

will

ger

coming
to

the

up

wiin.

with

complex

the
some

hope

answers

situation.




of

An

associa¬

90% of ail
being produced
North Amer¬

ican capacity by the end of 1959
tons

be

increased

from

Canada

tons in the United

by

730,000

and

665,000

States.

The

Spring 1957 issue of
Retailing containing

of

Resale Price

in

Revitalization

on

of

York; Retail Labor Costs;

Maintenance; Crisis

Retailing; Skills of Creative

Leadership; Retail Selling Can
Improved; Honor

Retailing

—

New York

University School of Retailing,
York
per

3,

N.

Y.

(paper)

$3.50

year.

Story of Taxes—E. I. du Pont de
Nemours &

ton

Co., Inc., Wilming¬

98, Del.

Botany Mills
Campbell Co. Com.
Fashion Park

Indian Hehd Mills
United States

Envelope
Morgan Engineering
National Co.

&

no. Inc

General

that

—

articles

A. S.

1 Carl Marks

Canada.

Cranston

request.

on

Journal

V/ct:

other

Manager

result

Y.,

TRADING MARKETS

place in both the United States

pe¬

N.

Retailing

Ex¬

>

Newspaper
Publishers'
Association,
representing
800
daily newspapers, told a Con¬
gressional committee that an¬

gasoline and tire rationing

The books show that they

employment opportunities —
S.
Department of Labor,
of Labor Statistics, 341
Ninth
Avenue, New York 1,

U.

ican

since the 1942-45 World War II

have lost several billion dollars

of

Washington Square Center, New

(Special to The Financial Chronicle)

John

Technology, 10 West
Chicago 16, 111. $6.00.

and Should be

views.]

BEVERLY HILLS, Calif.—Jack
and

Illinois

Bureau

Roll in

Durbin

the
Re¬

of

of
1957—Discussion by Secre¬
tary of Labor James P. Mitchell

New

great newsprint shortage
may
appear
on
the
horizon
despite the expansion taking

riod.

1

Means Committee.

viduals would be allowed

of

Armour

Open Letter to College Graduates

encourage

plans

—

Foundation

tol Hill agree there is no chance

Hearings have been held by
Works

Proceedings

—

conference

1957

search

of

both the Senate and House Pub¬

lic

a foreword by Ad¬
Robert B. Carney, USN
(Ret.) — Naval Institute, An¬
napolis, Md. $5.75.

ference

Two With Daniel Reeves

Hearings

gadin, with

National Industrial Research Con¬

200,000,000.

is

faced with another acute news¬

Navy in World War II—

miral

He

he

1060
Montreal,

Office,

Commander Marc'Antonio Bra-

self-supporting.

said

Revised edi¬

Street,
$3.50.

Canada,
Italian

a year,

would

bonds

organization of¬
ficial declared that newsprint is
increasing all over the world,
including the countries within
the sphere of the Iron Curtain.

trade

—

Head

University

the nor¬
Tennessee'

Valley Authority is 10%
declare

more.

or

by Air

say

the

of

the

tion—IATA

pending in the House,
bonds
are
proposed.

r

It

Newsprint Crisis Impends
.

taking

now

1957

Senate and House bills may not

the

for the new fiscal year

As¬

Transport

Regulations Relating
Carriage of Restricted

ex¬

later this year.

Federal

Air

sociation

Canada.

Meantime,
the

Mr. Soupnoodle?"

up any,

—

International

The

are

indicate

the

listed

that

new

vehicles will be using the high¬
ways

"transport

many people who
Congress passes far
too many laws for the overall
good of the country. The pres¬
ent session of Congress, which
is likely to end in early August,

feel

10% of the in¬

up

costs.

terstate

new

report

stir you

1,395,000 tons added to the

Wait Till Next Year

;v-V

;

"Our prospectus

com¬

in¬

or

Insurance
Origin, Ob¬
jectives, Operations — Institute
of Life Insurance, 488 Madison
Avenue, New York 22, N. Y»
(paper) on request.

passengers

v

Gaining Momentum
The

Administra¬

parison of the passenger and
freight financial results of 37
railroads for 1956.
Only the
Long Island railroad chalked a
passenger service profit.

a

no

Ilealtii

pansion

The ICC's

population of 50,000 or more), 42 of the state
capitals and all 48 states. The
multi-laned, divided highways
will have only controlled ac¬
cess roads, which means there

cities with

—$7.50.

€oGflf>

The

business.

118,000,000

nomics"

connect

to

ef¬
The

pared with 42,000,000 in 1956.

interstate is sched¬
209 cities (all

The super

an

flying U. S. domestic lines

expected to take up to 15 years.
uled

Association—Proceedings of
43rd
annual
meeting—
Specialties Manufac¬
turers Association, Inc., 50 East
41st Street, New York 17, N. Y.
the

Chemical

tion predicts that by 1970 there
be

In¬

ers

and

new

hurting the

are

Aeronautics

will

the

during

lines

passenger

Civil

Jordan—Franklin

stitute, 20th and The Parkway,
Philadelphia 3, Pa. (cloth) $4.00.

operate.

billion

$50

estimated

an

off

equipment being re¬
is more expensive to

placed

epoch-making program at this
time.
By terms of the present
act, the grand total of Federal
and state money to be spent on
all Federal-aid roads will in¬
volve

Clarence

spending many

lightweight equipment in
fort to improve service.

of the

Unfinished

Franklin's

Business—Edited by Helen and

Chemical Specialties Manufactur¬
are

millions of dollars for

opposition

both major

Benjamin

that

show

records

the railroads

There

it is further along.

—•

Institute, Inc., Empire
State
Building, New York 1,
N. Y.—(paper).

if

ICC

The

Industry —1957 Edition

Carpet

lematical.

Congress
is
not
expand the program

of

Bureau

cah

worse

or

Book

Year

1956—American

Rug

they abandoned
all tpassenger service, is prob¬

However,
until

better

be

would

financially

Sta¬

Metal

Basic Facts About the Carpet and

with an answer to the
question whether the railroads

i

_

ICC

the

not

or

of

Annual

Statistics, 50 Broadway,
New York 4, N. Y. $3.00.

come up

possibly $50 bil¬

S44 billion and
lion.

Whether

Bureau

36th

Metal

000.

the

that

terstate system be

to

for

railroads

line

I

staggering deficit of
$696,900,000 in 1956, the sec¬
highest on record and the
biggest since 1953 when the
deficit was listed at $704,500,-

Works

Public
on

recommended

likely

tistics

ond

Senate

mittee

American

rolled up a

it.

The

class

The

Highway Act of 1956. There has
been a building program

June

on

investigated.

to be

never

rival

the

start

18. Some 15
phases of deficit operation are

hearings

greatest construction the world
ever
has known.
This is pro¬
vided
under the Federal Aid

to

will

examiner

ICC

C.— An

D.

job lies ahead in the

enormous

FOREIGN

SECURITIES SPECIALISTS

20 BROAD STREET

TEL: HANOVER-2-0050

_

NEW YORK 5, N. Y.

•

.

TELETYPE NY 1-971

1

Riverside Cement

Flagg Utica

LERNER & CO.
Investment

10 Post Office

Securities

Square, Boston 9, Mass.

Telephone
HUbbard 2-1990

Teletype
BS 69