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financi,a1
The
glitmerctat
Volume 136
iircatide
New York, Saturday, June 24 1933.
Number 3r48
The Financial Situation
HE World Monetary and Economic Conference
at London has the present week continued to
command attention beyond everything else, and
after over a week's uncertainty as to the attitude of
the United States in the matter of the stabilization
of foreign currencies along with the American dollar, this country on Thursday issued a statement in
London defining its attitude in that regard. As a
consequence the confusion in that respect previously
prevailing, and which had served to prejudice the
whole case of the United States before the Conference, has been removed, though what the effect will
be on the outcome of the Conference remains for the
future to determine.
The text of the official statement, as given out on
Thursday, June 22, by the United States delegates
to the Conference, reads as follows, according to
Associated Press dispatches from London:
"Undue emphasis has been placed upon consideration of a plan proposed for temporary de facto stabilization of currencies.
"The fact is, this never was an affair of the delegation. It was considered by representatives of the
Treasuries and central banks of the United States,
Great Britain and France, Oliver M. W. Sprague
having been especially sent to represent the United
States Treasury for this purpose. The American
Government at Washington finds that measures for
temporary stabilization now would be untimely.
"The reason why it is considered untimely is because the American Government feels that its efforts
to raise prices are the most important contribution
it can make and that anything that would interfere
with those efforts and possibly cause a violent price
recession would harm the conference more than the
lack of an immediate agreement for temporary stabilization.
"As to the ultimate objective, the American delegation has already introduced a resolution designed
for ultimate world-wide stabilization of unstable
currencies, and is devoting itself to the support of
measures for the establishment of a co-ordinated
monetary and fiscal policy to be pursued by the
various nations in co-operation with the others for
the purpose of stimulating economic activity and
improving prices."
It will be observed that the statement apprizes
the public that "the American Government at Washington finds that measures for temporary stabilization now would be untimely," and that "the reason
why it is considered untimely is because the American Government feels that its efforts to raise prices
are the most important contribution it can make,
and that anything that would interfere with those
efforts and possibly cause a violent price recession
T
would harm the Conference more than the lack of
an immediate agreement for temporary stabilization."
This is followed by the further declaration that
"As to the ultimate objective, the American delegation has already introduced a resolution designed
for ultimate world-wide stabilization of unstable
currencies, and is devoting itself to the support of
measures for the establishment of a co-ordinated
monetary and fiscal policy to be pursued by the
various nations in co-operation with the others for
the purpose of stimulating economic activity and
improving prices." This relegates stabilization, at
least for the time being, to a subordinate place, the
paramount purpose being to stimulate economic
activity and improve prices for the benefit, not alone
of this country, but for the entire world.
This official statement of the United States delegation has had the effect, too, of clarifying the situation. Associated Press advices from London, the
same day (Thursday), said that the gold bloc nations, headed by France, welcomed the American
stabilization declaration as the first clear-cut official statement by the United States of its position
at the Conference. "The lines now are clearly
drawn," a spokesman for the French delegation is
quoted as having said, "and we know where we are
going." In further explanation, the Associated
Press stated that fear that certain gold countries
might be forced to abandon the yellow metal if the
United States was left with a free hand to devaluate
the dollar had been advanced in high quarters as
the reason why the gold bloc reluctantly had agreed
to continue economic discussion despite the non-stabilization of the dollar. France and her gold "allies"
—Switzerland, Holland and Belgium—had at first
insisted that stabilization must come before other
conference work. An immediate breakdown of the
Conference has apparently been avoided by the
American move, European delegates indicated, despite the fact that every gold bloc country, especially
the smaller ones whose gold positions have been
weakening, had served notice in lobbies that it would
be impossible to carry on serious economic discussions until a measuring rod is provided by stable
currencies. They will continue to insist, we are told,
on stabilization at the earliest possible time.
The fact that the United States would not commit
itself in favor of an early stabilization of the American dollar in relation to other foreign currencies
was stressed with increasing force all through the
week, directly or indirectly, from one American
quarter after another, and the official statement of
••••
4316
Financial Chronicle
Thursday brought the situation in that respect to
a climax. The result has been that the foreign exchanges, and particularly the British pound and the
French franc, have once more turned strongly
against New York, the American dollar suffering
correspondingly further depreciation. On Thursday and Friday, with the American declaration officially proclaimed, the depreciation of the American
dollar was carried a step further. The British
2
1
pound on Thursday advanced in London to $4.23/
at the close of trading, which was equivalent to less
than 80c. for the American dollar, the lowest figure
since the United States departed from the gold stand8c.in the value of the pound
/
ard. This was a rise of.65
overnight. Yesterday the London quotation went
8,though there was some
even higher, touching $4.241/
reaction at the close. The result of the American
statement has been to create a belief that the dollar
will be left to its own devices on the market and
that no stabilization is to be expected for the time
being. The French franc here in New York for
cable transfers rose to 4.92c. on Thursday, and to
2c.,
1
4.93c. on Friday, with the close yesterday at 4.87/
emanated
have
to
said
this being ascribed to selling
em Switzerland, apparently to counteract a flight
fvif,
(
/
capital.
The American Government has apparently come
to realize very slowly that fixing the rates of the
different foreign currency units is a very difficult
and complex affair, and that even if rates for the
leading currency units should be agreed upon the
question of ability to maintain such rates is an even
more Herculean undertaking. In the case of Great
Britain the matter of the rate is wholly a question
of retaining certain important trade which Great
Britain has found it possible to acquire since it departed from the gold standard in September 1931.
In this we have reference more particularly to trade
with the silver-using and depreciated currencies of
the Far East. As frequently stated in this column,
Great Britain did not voluntarily pass off the gold
standard, contrary to the course pursued by the
United States. It was forced off, despite most
strenuous efforts to remain on the gold basis. But
having once yielded up the gold standard, it found
that there was an offsetting advantage in the fact
that the resulting depreciation in the foreign exchange value of the pound enabled it to do what it
was not able to do before, namely, to compete with
the countries of the Far East which were on a
heavily depreciated basis. The cotton textile trade
almost instantly experienced a revival.
Having gained this trade, British statesmen
naturally do not want to lose it, but are bending
every effort to retain it. That is one of the grave
problems confronting the British authorities, and
it will be the part of wisdom for our Government
to recognize the fact. Since the United States deliberately abandoned the gold basis, there has been
such a flow of refuge funds—funds seeking safety
and refuge in London—to Great Britain that the
tendency of the pound sterling is so strongly upward that it has been quite among the possibilities
that if the movement were not held in check the
pound might quickly rise to its old value of $4.8665.
But British statesmen do not want it to return to
its old figure, since in the trade with the Far East
they would lose the advantage which they now enjoy by reason of the depreciation in the pound sterling. As bearing on that point, we notice from an
June 24 1933
Associated Press dispatch from London, June 20,.
that "Japanese trade competition drew the fire of
the Federation of British industries," and that "a
special committee, composed of industrialists representing the principal trades affected by the competition has concluded a broad investigation and submitted a report to the Board of Trade." This said,
among other things, that "The depreciation of the
yen during the last year has been deliberately used
to embark on a reckless national sales policy, with
disastrous results to British and other traders in
various markets of the world."
Various rates have been suggested for the pound
sterling as part of the scheme of general stabilization—$4.20, $4.00, $3.80, &c.—but to Great Britain
the question is simply a matter of retaining the
trade which has come to it as a result of the depreciation of the pound sterling in the foreign exchanges.
And obviously, what is more, the British authorities
want assurance that whatever the rate agreed upon
this rate shall have the elements of permanency,
otherwise the United Kingdom will run the risk of
losing the trade which it has acquired since Great
Britain passed off the gold standard.
And here a new difficulty creeps up, which suggests caution in any attempt at general stabilization of foreign currencies. The United States is
desirous not only of raising the level of commodity
values throughout the world, but would embark on
the ta k of rehabilitating silver. This last is now
coming up to plague the Americans. What is more,
it seems destined to render efforts at general stabilization nugatory, no matter how wisely planned the
scheme for adjusting the rates of the different currency units. We have repeatedly pointed out in
these columns, and more particularly did so last
week, that by the inflationary rider to the Farm Relief Act the President is required "by proclamation
to fix the weight of the gold dollar in grain3 ninetenths fine, and also to fix the weight of the silver
dollar in grains nine-tenths fine at a definite fixed
ratio in relation to the gold dollar, at such amounts
as he finds necessary from his investigation to stabilize domestic prices or to protect the foreign commerce against the adverse effect of the depreciated
foreign currency," and having done this "to provide
for the unlimited coinage of such gold and silver
at the ratio so fixed." Unlimited coinage of silver
means, of course, that all silver could be taken to
the mint and then coined into dollars without limit,
and this being so, the United States could not fail
to drop to a silver basis, all efforts to the contrary
through general stabilization notwithstanding.
But the present week the United States has gone
even further than this. Senator Key Pittman of
Nevada has presented to a Committee of the World
Economic Conference a series of resolutions of a
most extraordinary character, and which, it is said,
have the endorsement of the Roosevelt Administration. The following sets forth some of the declarations in this set of resolutions:
"Whereas, silver constitutes an important medium
both in international and Oomestic exchange for a
large proportion of the world's population;
"And, whereas, the value of this purchasing medium has been impaired by governmental action in
the past;
"And, whereas, it is necessary that the confidence
of the East should be restored in its purchasing medium, which can only be done if the price of silver
Volume 136
Financial Chronicle
is restored to an equilibrium with commodity price
levels;
"Now, therefore, be it resolved, that—
"First, an agreement be sought between the chief
silver producing countries and those countries which
are large holders or users of silver to limit abritrary
sales upon the world market;
"Second, that all nations agree to prevent further
debasement of their subsidiary silver coinages;
"Third, that all nations agree to remonetize their
subsidiary coinages up to a fineness of at least 800,
when, and if, consistent with their respective national budget problems, and,
"Fourth, that it be recommended to central banks
that they agree that 80% of their metal cover shall
be in gold, and 20% shall be optionally in gold or in
silver, provided that silver is obtainable at or below
a price to be agreed upon as corresponding to the
general commodity price level and that governments
agree to modify their respective laws to this effect."
It will be seen from the foregoing that the whole
scheme is a most fantastic one. "The price of silver
is to be restored to an equilibrium with commodity
price levels." Central banks are to agree to keep
only 80% of their metal cover in gold and 20% shall
be optionally in gold or in silver, and governments
are to agree to modify their respective laws to that
end. May we suppose all this to be a feasible
proposition, and if general adherence to it be sought,
how long may we expect it to take before general
stabilization is reached? Is it at all credible that
foreign governments will make the necessary
changes, and very radical changes, in the policies
.they have pursued with respect to silver in the past?
The Indian silver rupee is now anchored to the
pound sterling at the rate of one shilling and six
pence per rupee. The British and the Indian Governments, after having labored for decades to bring
silver up to that point, is all this to become wasted
labor and some new basis for silver adopted? Anyway, what object could there be in acquiescing in
anything of the kind from the British standpoint,
and what could be gained thereby? And where
would the ultimate benefit come in? Obviously,
these are all large problems, and they are not likely
to facilitate early general stabilization.
ANY curious things are now happening in this
strange world, and not the least of them concern the affairs of the banks. By the terms of the
Glass-Steagall Banking Act, signed by the President on June 16, member banks of the Federal Reserve System are forbidden from paying interest on
demand deposits. As the New York Clearing H011ge
institutions had been cutting their rate allowed for
interest on deposits until the rate was down to only
1/
4 of 1% per annum for deposits subject to call, the
change after all is not a very important one,
although it may have the effect some day when
money rates are higher again, to induce the formation of State banking institutions, which would not
be subject to National bank laws and which, by undertaking to pay interest upon deposits, might give
rise to the formation of a class of State institutions
which might in the course of time become formidable
competitors to the National banks.
Be that as it may, the United States Treasury has
the present week gone a step further and relieved
banks entirely from the obligation to pay any interest on Government deposits which they may hold
growing out of the sale of certificates of indebted-
M
4317
ness and Treasury notes. A notice came from the.
Treasury Department at Washington on Monday
that beginning June 15 special depositaries will not
be required to pay interest on balances on war loan
deposit accounts. These special depositaries have.
often held enormous amounts of Government deposits growing out of subscriptions to different war
loans. It has been the custom of the Treasury to
let the depositary banks hold these deposits until
they were needed by the Treasury, and then call for
them and to exact payment of interest on such deposits during the time the banks held possession of
them. Under the Treasury's easy money policy the
rate has recently been rapidly reduced. The rate
formerly was 2% per annum. This was reduced to
2% on Dec. 1 1930. On Feb. 16 1931 the rate Was
1
1/
2% to 1% per annum. On
1
marked down from 1/
2 of
June 1 1931 there was a further reduction to 1/
1% per annum. The present month there have come
two further steps in the matter, the second a reversal
of the first. On June 15 1933 the rate was cut to
1/4 of 1%; this was by department circular dated
June 2 1933. But now comes a department circular
dated June 14 1933, saying that in view of the provisions of Section 11 (b) of the Banking Act of 1933
the department circular of June 2 1933 fixing the
4 of 1% per annum has been eliminated and
rate at 1/
that beginning with June 15 1933 special depositarie ; will not be required to pay any interest on
deposits of war loan accounts. We are told that
under the new banking Act deposits of public funds
of the United States Government are not exempt
from the provisions that no interest shall be paid
on demand deposits, and the Treasury has amended
its Circular No. 92 so as not to require payment of
interest on balances in war loan deposit accounts,
and is considering similar amendments to other
circulars.
Under the Glass-Steagall. Act, while the rate of
interest which banks are permitted to pay on de- mand deposits is forbidden, the rate to be allowed
on time deposits is left to the Federal Reserve Board
to determine. The law stipulates that the Federal
Re erve Board "shall from time to time limit by
regulation the rate of interest which may be paid
by member banks on time deposits." In the absence
of any action along this line thus far, the New York
Clearing House Committee the present week has
taken action itself to fix the time loan rates. The
old rate allowed on time deposits was 1/2 of 1% per
annum. The rate has now been reduced to 1/4 of 1%,
the new rate having become effective Thursday,
June 22. In distinguishing between demand deposits and time deposits, anything under 60 days in
a certificate of deposit or 60 days' notice is now considered a demand deposit instead of the former 90
days. It is stated that the Clearing House institutions felt it necessary to reduce the time deposit rate
because of the way in which customers have been
trying to have their deposits converted from the demand to the time deposit classification, to take advantage of the higher interest paid on the latter.
The Federal Reserve Board has issued a statement
saying that member banks may continue to pay interest on time deposits in accordance with their
usual practice or existing bona fide contracts until
the Federal Reserve Board issues regulations on the
subject. Preparation of such regulations requires
investigation, study and careful consideration. of
practical and economic effects, it is stated, but such
4318
Financial Chronicle
regulations will be promulgated as soon as practicable. It is also stated that views of all Federal
Reserve banks on this subject have been requested
and will be given consideration before regulations
are promulgated.
E THINK there will be general rejoicing that
Charles E. Mitchell, former head of the
National City Bank and of the National City Co.,
should have been acquitted of the charges that he
undertook to defraud the United States when he
paid no income tax in 1929 and 1930. The case from
the first hung on technicalities, and the real point
at issue was whether in making large tax deductions
awing to heavy losses sustained he acted in strict
compliance with the law. The law permits deductions for such losses, and Mr. Mitchell was within
his rights in making the deductions in his own case
IT he complied with all the legal requirements. The
jury, after hearing all phases of the case, in a trial
extending over six weeks, has decided that Mr. Mitchell did meet with all legal requirements and that
must be accepted as settling the case. We think
also that the financial community will experience
a deep sense of relief that Mr. Mitchell should have
been found guiltless in the eyes of the law, for Mr.
Mitchell has long been an eminent figure in the
financial world, and if the charges made against
him should have been fastened upon him, it could
not have but reflected more or less discredit upon
the community itself.
The truth really is that men of distinction in the
• financial community are the last ones who would
deliberately engage in violating any provision of the
law. Instead, they take special care to obtain legal
advice in the matter, as Mr. Mitchell did, seeking,
of course, to hold tax payments down to the lowest
limit permissible, but the aim always is to keep
strictly within the law. As to whether the law
should be changed to permit tax deductions of the
magnitude of those in the Mitchell case, that is another matter—that is a public question for the legislator himself to determine. And as a result of the
disclosures in the Mitchell case some important
modifications of the income tax laws have already
been made, so as to limit the amount of the tax
deductions.
W
HE Federal Reserve condition statements this
week show that the policy of having the Federal Reserve banks acquire additional amounts of
United States securities from week to week continues, and they also show that the policy is ineffective in adding to the volume of Federal Reserve
credit afloat, owing to the fact that the proceeds
of the United States securities purchased go to
ease the condition of the member banks, adding to
their Reserve deposits with the Federal Reserve
banks, and also reducing the need for borrowing on
the part of the member banks from the Reserve institutions. Borrowing by the member banks is reflected in the discount holdings of the Federal Reserve banks, and these discount holdings during the
past week were further reduced from $253,762,000 to
$222,056,000. At the same time the holdings of acceptances purchased in the open market, which are
controlled by much the same considerations, also
were further decreased, dropping from $10,200,000
to $8,827,000. Holdings of United States Government securities were added to in amount of $22,-
T
Tune
24 1933
230,000, the total of such holdings rising from
$1,932,444,000 June 14 to $1,954,674,000 June 21, but
the increase here was insufficient to offset the losses
in the discounts and the bill holdings, and the result has been that the total of the bill and security
holdings, which constitute a measure of the volume
of Reserve credit afloat, further decreased from
$2,200,030,000 to $2,188,480,000, notwithstanding
the acquisition during the week of $22,230,000 more
of United States securities.
Federal Reserve notes also show further contraction, the process having been under way ever since
the period of the huge expansion in circulation during the period of the bank holidays. In the past
week the amount of Federal Reserve notes in circulation further declined from $3,118,379,000 to $3,090,286,000. As partial offset, however, to this decrease
in Federal Reserve notes, there has again been an
addition to the amount of Federal Reserve bank
notes in circulation. This last continues to be a
growing item, and against which no cash reserves
are required; during the past week the total of these
Federal Reserve bank notes increased from $113,264,000 to $117,774,000. There was a further addition in the gold holdings of the 12 Reserve banks
during the week, but only of very moderate proportions, the grand total of the gold holdings having
risen from $3,532,790,000 to $3,533,208,000.
With the gold holdings larger, and with the liability on Federal Reserve notes diminished to the
extent already indicated, and with the deposits only
slightly larger, the ratio of total gold reserves and
other cash to deposit and Federal Reserve note liabilities combined has been further increased from
68.3% to 68.5%. The holdings of United States
Government securities as part collateral for Federal
Reserve notes were increased during the week from
$467,900,000 to $504,200,000.
HAT trade recovery is progressing, as current
statistics so plainly indicate is the case, is
evident also from the fact that dividends on corporate entities now likewise in some cases reveal larger
payments or resumption of the same, whereas until
within the last two weeks the record in that respect
was confined entirely to dividend reductions and
dividend omissions. The Adams Express Co. has
just declared two quarterly dividends of $1.25 a
share each on the 5% cumul. pref. stock, both payable June 30 to holders of record June 29. One
quarterly dividend represents the payment which
ordinarily would have been made on March 31 1933,
and the other represents the regular June 30 distribution. This action clears up all accruals to date.
The Cleveland Electric Illuminating Co. increased
the quarterly dividend on common stock from 30c.
a share to 40c. a share. The Flour Mills of America,
Inc., declared a quarterly dividend of $2 a share on
the $8 cumul. pref. stock, series A, payable July 1,
thus resuming dividends on this issue.
As to dividend reductions and omissions, the Kansas City Southern Railway decided to omit the
quarterly dividend due about July 15 on the 4% noncumul. pref. stock. From July 15 1932 to and including April 15 1933, the Company made quarterly
distributions of 50c. per share each quarter as
compared with $1 a share each quarter from October
1908 to and including April 1932. The People's
Gas Light & Coke Co. of Chicago reduced the quarterly dividend on the capital stock of the company
T
Volume 136
Financial Chronicle
4319
from $1.25 a share to $1 a share. The Common- years, the amount being $5,275,000, while silver exwealth Edison Co. reduced the quarterly dividend ports were only $235,000.
on the capital stock from $1.25 a share to $1 a share.
HE stock market this week, after last week's setThe Title Guarantee & Trust Co. declared a quarback, reversed its course and moved upward
terly dividend of only 20c. a share as against the prewith considerable rapidity. The controlling
again
vious dividend of 40c. a share. The Public Service
were the same as in previous weeks,
considerations
Co. of Northern Illinois reduced the quarterly divifurther great depreciation in the
been
there
having
dend on the common stock from 75c. a share to 50c.
American dollar which is taken
the
of
value
foreign
a share, and the Southwestern Light & Power Co.
to spell further expansion in both the security markets
likewise reduced the quarterly dividend on its $6
and the commodity markets. As a matter of fact
cumulative preferred stock from $1.50 a share to
the commodity markets themselves responded with
75c. a share.
further striking advances from the same cause and
the grain markets
HE foreign trade statement of the United States also from independent causes,
of further severe
reports
of
because
upward
spurting
for the month of May shows quite a jump, the
regions of the
wheat
winter
the
in
both
damage,
first for some time. Both exports and imports of
of the Northregions
wheat
spring
the
and
Southwest
merchandise were higher in value than they have
continue
indications
trade
the
all
also
Then
west.
been for a number of months past. Exports
in
operations
trade
in
expansion
growing
to
point
to
amounted to $114,000,000 and imports to $107,one
example
000,000. For May 1932 merchandise exports were nearly all lines of human endeavor. For
pursuits
industrial
in
electricity
of
consumption
the
valued at $131,899,000 and imports at $112,276,000.
week
ended
the
The reduction in exports in May this year as com- continues steadily to rise, and for
by
electricity
of
pared with that month a year ago was $17,899,000, Saturday June 17 the production
the
of
United
industry
equal to 13.6%, and in imports $5,276,000, or 4.7%. the electric light and power
These declines are very moderate compared with States was reported at 1,578,101,000 kilowatt-hours
the losses that have appeared heretofore. It should as against 1,441,532,000 kilowatt-hours in the correbe noted, however, that it was in May of last year sponding week of 1932, showing an increase of 9
that the drop in export and import values, which the largest ratio of increase yet disclosed in any week
has characterized the recent foreign trade state- of the year. Reports of car loadings also continue to
show increases as compared with the corresponding
ments, made its first real appearance.
Merchandise exports for the 11 months of the period of last year, these increases being of quite
current fiscal year amounted to $1,320,342,000 large proportions in the case of many separate roads
against $1,834,187,000 last year, a decline this year and systems.
Then iron and steel operations also continue their
of 27.5%, and imports to $1,046,014,000 compared
with $1,619,990,000 in the preceding year, the re- notable course of expansion. The "Iron Age"
duction this year being 35.5%. It is not unlikely reports that the steel industry of the United States is
that the higher value for both exports and imports now operating at 50% of capacity for the first time
for May this year reflects in part at least the recent since April 1931. This compares with 47% last week
advances in market prices of commodities; in other and with only 15% of capacity at the beginning of
words, the cheapening of the dollar. The balance of April. The "Iron Age" says that "the primary
trade for May continued on the export side, cause of the bulge in demand is the piling up of reamounting to $7,000,000 for that month. A year ago leases against low-priced second quarter contracts as
it was $19,623,000. For the 11 months of this year the June deadline draws near. While all of this steel
the balance of trade was also on the export side for will not get into immediate consumption, speculative
$274,328,000; for the same time in the preceding buying has been held down both by the tonnage
limitations of contracts and the unsatisfactory finanyear the export trade balance was $214,197,000.
The increase in exports that appears in the May cial standing of many buyers. In the automobile
statement was wholly in cotton. The total of the industry, at least, there has been little protective
latter was 611,935 bales, valued at $26,080,060. This buying. The bulk of the steel placed thus far by the
compares with $17,720,000 for cotton exports in motor car builders has been for immediate requireMay 1932, an increase this year of $8,360,000. Total ment and their main concern has been to get deliverexports in May, other than cotton, were $26,178,000 ies on time."
less than those of May last year, a decline of 22.9%.
The bond market has continued exceptionally
The average export price of cotton in May this year good and many of the low priced issues have scored
was 8.31c. per pound, compared with 7.03c. the advances in prices quite as noteworthy as those in
average export price for cotton in April this year, the case of share properties. The railroad list has
and 6.57c. in May 1932.
displayed exceptional strength and this has been due
to the fact that returns of railroad earnings for the
OLD exports continue far in excess of imports. month of May have begun to come in this week and
In May exports of gold from the United States among these there have been some with striking
amounted to $22,924,000 and imports to $1,785,000, records of improvement in net earnings. In the
the latter the smallest amount for any month for commodity markets grain prices have manifested
many years past. For the 11 months of the current notable advances due to the circumstance already
fiscal year gold exports have amounted to $131,- noted, namely, that weather conditions have been
012,000, and imports to $397,843,000, an excess of adverse to the growing crops. In addition there
gold imports of $266,831,000. For 11 months of the were reports yesterday that at the London Conferprevious fiscal year gold exports were $1,007,727,000 ence an agreement had been reached for curtailand imports $499,959,000, exports exceeding imports ing the wheat acreage of the world. The July
by $507,768,000. Silver imports last month rose to option for wheat in Chicago sold up to 803e. on
a higher total than for any month in a number of Friday and closed at the same figure against 737,'c.
T
T
G
4320
Financial Chronicle
the closing price on Friday of last week. July corn
in Chicago sold up to 485
%c. on June 22 and closed
at 483
%c. yesterday against 443/gc. on Friday of last
week. Spot cotton at New York closed yesterday
at 9.50c. against 9.25c. on Friday of last week.
The spot price for rubber yesterday here in New York
was 6.12c. against 5.18c. on Friday of last week.
Silver in London has again moved within narrow
limits, notwithstanding the efforts at the London
Monetary Conference to rehabilitate it and the price
in London yesterday was 183/
2 pence per ounce
against 193 pence on Friday of last week. As to
the rise in the foreign exchanges against the American
dollar, indicating further great depreciation of the
American dollar, cable transfers on June 22 sold up
to $4.243 with the close yesterday at $4.223'
against $4.073/ on Friday of last week. The French
franc on cable transfers sold up to $4.93 on June 23
and closed the same day at $4.873/ against $4.743/
on Friday of last week. Of the stocks dealt in on
the New York Stock Exchange 270 touched new high
levels for the year during the currrnt week and 1
stock dipped to a new low level. On the New York
Curb Exchange the record is 195 new highs for the
year and 5 new lows. The call loan rate on the Stock
Exchange again ruled unchanged all week at 1%.
Trading has continued quite active. On the New
York Stock Exchange the sales at the half-day session
on Saturday last were 1,567,703 shares; on Monday
they were 5,481,846 shares; on Tuesday 5,542,820
shares; on Wednesday 3,891,940 shares; on Thursday
4,374,041 shares; on Friday 3,314,100 shares. On
the New York Curb Exchange the sales last Saturday were 247,375 shares; on Monday 770,215 shares;
on Tuesday 893,519 shares; on Wednesday 597,305
shares; on Thursday 730,713 shares, and on Friday
493,569 shares.
As compared with Friday of last week prices are
quite generally higher. General Electric closed
yesterday at 233A against 215
% on Friday of last
week; North American at 323 against 313
%;Standard
Gas & Elec. at 19 against 173.; Consolidated Gas of
N. Y. at 583% against 573g; Pacific Gas & Electric
at 29 against 273/
2; Columbia Gas & Elec. at 243/i
against 233/
s; Electric Power & Light at 12% against
12; Public Service of New Jersey at 53 against 50%;
International Harvester at 393/i against 363'; J. I.
Case Threshing Machine at 85 against 77; Sears,
Roebuck & Co. at 34% against 32; Montgomery
Ward & Co. at 233/2 against 213/
2; Woolworth at
443 against 41%; Safeway Stores at 533/2 against
523/
2; Western Union Telegraph at 553 against
513/g; American Tel & Tel. at 1273' against 1233
4;
Brooklyn Union Gas at 81 against 783
4; United
States Industrial Alcohol at 511A against 459;
American Can at 913/ against 873; Commercial
Solvents at 223/
2 against 17%; Shattuck & Co. at
115
% against 9%,and Corn Products at 76 against 72.
Allied Chemical & Dye closed yesterday at 1153
4,
against 1123A on Friday of last week; Associated
Dry Goods at 143
4, against 113.; E. I. du Pont de
Nemours at 763
4, against 725
%; National Cash
Register A at 183/
2, against 173'; International Nickel
at 173/2, against 163.; Timken Roller Bearing at
293, against 273
4; Johns-Manville at 52, against
45; Gillette Safety Razor at 143%, against 143;
National Dairy Products at 213
4, against 203.;
Texas Gulf Sulphur at 30, against 26%; American &
Foreign Power at 163', against 143'; Freeport-Texas
3 United Gas Improvement at
at 363', against 33%;
June 24 1933
213', against 21; National Biscuit at 553%, against
52%; Coca-Cola at 923/
2, against 89; Continental
Can at 603, against 55%; Eastman Kodak at 79,
against 783; Gold Dust Corp. at 223
4, against
213/
2;Standard Brands at 19%,against 19;Paramount
Publix Corp. certificates at 13
%,against 1%; Westinghouse Elec. & Mfg. at 4532, against 43; Drug, Inc.,
at 53%, against 523.; Columbian Carbon at 584
3,
against 563/
2; Reynolds Tobacco class B at 45,
against 423%; Lorillard at 223%, against 203%; Liggett
& Myers class B at 93, against 88, and Yellow Truck
& Coach at 6, against 53.
The steel stocks have also moved higher. United
States Steel closed yesterday at 563/
2, against 52%
on Friday of last week; United States Steel pref. at
943,, against 93; Bethlehem Steel at 373, against
283
4; and Vanadium at 243%, against 213
4. In the
auto group, Auburn Auto closed yesterday at 63,
against 573' on Friday of last week; General Motors
at 283, against 253; Chrysler at 343, against
263
4; Nash Motors at 203
4, against 18; Packard
Motors at 5%, against 5; Hupp Motors at 63',
against 53; and Hudson Motor Car at 113', against
103. In the rubber group, Goodyear Tire & Rubber
closed yesterday at 363', against 323% on Friday of
last week; B. F. Goodrich at 153
4,against 13%, and
United States Rubber at 14, against 123
%.
The railroad shares have been distinctly strong on
increases in train loadings compared with 1932.
Pennsylvania RR. closed yesterday at 283, against
26 on Friday of last week; Atchison Topeka & Santa
Fe at 66, against 623'; Atlantic Coast Line at 44,
against 423
4; Chicago Rock Island & Pacific at 4%,
against 43.j; New York Central at 393', against
2, against 19; New
363'; Baltimore & Ohio at 223/
Haven at 253., against 223
4;Union Pacific at 1143,
against 1083'; Missouri Pacific at 53', against 43
4;
Southern Pacific at 28, against 213'; MissouriKansas-Texas at 143., against 123'; Southern Rail-•
way at 23, against 20%; Chesapeake & Ohio at 413,
against 383; Northern Pacific at 24, against 213';
and Great Northern at 233', against 20.
The oil stocks have recovered on the distinctly
improved outlook for the oil trade. Standard Oil
of New Jersey closed yesterday at 38 against 353'
on Friday of last week; Standard Oil of Calif. at
353 against 323'; Atlantic Refining at 283/i against
25, and Texas Gulf Sulphur at 30 against 263
4. In
the copper group, Anaconda Copper closed yesterday
at 163' against 14% on Friday of last week; Kennecott Copper at 19 against 173'; American Smelting
& Refining at 32% against 303; Phelps-Dodge at
133/ against 113
4; Cerro de Pasco Copper at 24
against 223', and Calumet & Hecla at 7 against 63'.
-*TOCK EXCHANGES in all the leading European financial centers were dull this week,
with price trends moderately irregular. The attention of traders and investors in London, Paris and
Berlin was centered almost exclusively on the World
Monetary and Economic Conference and developments in connection with that meeting. Lack of
any noteworthy progress on the important problems
of currency stabilization or tariff reduction was
considered virtual confirmation of the pessimistic
predictions regarding the meeting, and dealings in
securities were affected markedly by such considerations. Indications of business improvement increased, meanwhile, in various European countries,
but such factors were ignored because of the great
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Volume 136
Financial Chronicle
importance attached to the London gathering. It
was noted that British wholesale price levels are
advancing slowly but steadily. French business improvement was reflected in a decline of 5,000 in the
number of officially reported unemployed, the aggregate for the country dropping to 271,600. German
industrial indices show betterment, chiefly in the
heavy lines. Italian idleness is dropping sharply,
owing to the Government sponsored plan for work
sharing.
Business on the London Stock Exchange was on a
small scale in the initial session of the week, with
the tendency uncertain. British funds were soft,
while minor changes in both directions occurred
among industrial stocks. Home rail stocks proved a
weak spot in the market. International securities
improved on favorable week-end advices from New
York. The tone, Tuesday, improved decidedly, with
New York advices again an important factor.
British funds remained dull, but industrial issues
showed many good features, especially among speculative commodity issues. The Anglo-American
trading favorites advanced sharply. Dealings in
London dwindled, Wednesday, as there was no
stimulus from any quarter. British funds were
steady in quiet trading, while most industrial issues
drifted to slightly lower levels. The international
group weakened sharply. Thursday's trading was
marked by a slightly better tone, but the turnover
remained small. British funds advanced a bit, and
a number of industrial stocks also improved. South
African gold mining shares moved forward more
briskly, the movement being attributed to bear covering. Anglo-American issues were better, in accordance with overnight reports from New York. In
quiet trading yesterday British funds improved,
while industrial stocks were irregular.
The Paris Bourse was influenced, Monday, by the
difficulties encountered at London in the stabilization talks and by fears that France will eventually
be forced off the gold standard. Stocks were in
demand and good advances resulted, but rentes and
other fixed-revenue obligations declined sharply.
There were few changes in Tuesday's session, and
trading also was very quiet. Some of the more
speculative securities again improved a little, but
most sections of the market marked time. Rentes
steadied after early fluctuations. Trading in
Wednesday's session on the Bourse was "virtually
non-existent," dispatches said, while price changes
also were quite unimportant. Most issues remained
close to previous levels. Prices were stimulated,
Thursday, by a sharp drop in the dollar and further
conjecture regarding the possibility of widespread
inflation. Stock prices improved generally, but
trading did not improve to any great degree. Further modest gains occurred in a dull session
yesterday.
The Berlin Boerse was dull in the first session of
the week, and prices gradually dropped. Securities
of one or two breweries advanced slightly, but other
issues lost ground. The opening, Tuesday, was firm
owing to favorable reports from London and New
York, but the advance proved short-lived. It was
followed by renewed liquidation on a small scale.
with buyers exceedingly scarce. Small net lossei
were registered in almost all issues. The downward
trend was resumed in Wednesday's trading, with
the recessions rather large at the opening. Buying
of Reichsbank shares reversed the tendency in late
4321
dealings, and some of the initial losses were regained in part. Thursday's session was quite like
that of the previous day, a sharp downward movement at the start being followed by modest improvement, with the net result that small losses were
recorded in almost all issues. Trading was dull
throughout. The downward movement was resumed at Berlin yesterday.
PROCEEDINGS
at the World Monetary and Economic Conference in London were uncertain
and confusing this week, as already noted, and this
was perhaps natural in view of the large and conflicting interests involved in the discussions. Immediately after the initial delegation addresses were
completed, last week, plenary sessions were discontinued and the work of the gathering continued in
the Monetary Commission, under the chairmanship
of James M. Cox of the United States, and the Economic Commission, headed by Premier Hendryx
Colijn of Holland. Views and proposals of some
leading delegations promptly were aired in the Commission meetings, and there was apparently a good
deal of diplomatic jockeying for position. The
American delegation was placed in a bad light, as
its representatives on both commissions appeared
to be unable to offer definite ideas with the backing
of the Administration at Washington, while some
internal disunity also was reported among the
American representatives. There were indications,
however, that such divergencies would be adjusted
swiftly. In this second week of the Conference the
general impressions of observers, as reported in
numberless dispatches from London, remained
nevertheless quite pessimistic. So general was this
feeling in Europe that there was a good deal of talk
for a time this week of temporary adjournment.
First evidence; of strain and discord in the Conference appeared in connection with the question
of monetary stabilization by the United States,
Great Britain and other countries now off the gold
standard. Representatives of the banks of issue in
the United States, Great Britain and France began
consideration of the stabilization problem even before the Conference opened. It was widely reported
in London last week that they had elaborated a plan
for early stabilization of sterling and the dollar,
on a de facto basis, and the rumors persisted despite
a vigorous denial of any intentions of immediate
stabilization by Secretary of the Treasury Woodin
in Washington. This matter was cleared up, partly,
last Saturday, when a statement was issued in Washington to the effect that the United States does not
propose to enter into any agreement for monetary
stabilization until there is some assurance that a
measure of this nature would not interfere with
price recovery here. It was admitted that a proposal or suggestion for stabilization had been received from Professor 0. M. W. Sprague, financial
adviser to the Treasury, who is with the American
group in London, but it was added that they were
not agreeable to the United States Government in
the form submitted. The American delegation in
London knows the views of President Roosevelt on
stabilization and will be guided by them, it was
stated emphatically.
"The whole discussion was not one which this
Government initiated," Acting Secretary of the
Treasury Acheson said. "We are willing to listen,
but do not wish to be placed in the position of try-
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Financial Chronicle
ing to reach a deal; that is, no counter-proposal
will be made. It may be, of course, that something
can be done tentatively, for certainly all realize the
importance of currency stabilization. But we do
not wish to say that any currency should be pegged
at the present levels, or any certain level. We have
not arrived at a place where we can pick out a particular point where stabilization should take place."
It was made quite plain, dispatches said, that stabilization is a part of the general program of the
United States Government, but will not be undertaken until there is some assurance that the program as a whole will be successful in lifting this
country out of the depression. Precipitate stabilization might interfere with the advance in the general price level, it was argued, and would be avoided
for this reason.
While the American views on this matter were
being made clear, Premier Edouard Daladier of
France urged a sharply contrasting doctrine. In
an official statement, issued in Paris last Saturday,
M. Daladier declared that France regarded currency
stabilization as a prerequisite to agreement on general economic matters. "During the opening days
of the Conference, both in the plenary sessions and
in the commission meetings, we made our position
quite clear," the Premier said. "Economic problems cannot be settled unless currencies are stabilized and unless return to the gold standard is accomplished. We consider this an indispensable preliminary, without which all measures of an economic
nature would be absolutely futile." In particular,
M. Daladier said, France would refuse to consider
any reduction in tariffs or an end to the quota system, unless stabilization is first arranged. In view
of this positive declaration, it was generally held
in Europe that the future of the London Conference
depended entirely on the decision of President
Roosevelt with relation to the dollar.
To all this was added further uncertainty on the
question of tariff reductions. The United States
delegation in London moved, last Saturday, to place
on the agenda of the Economic Commission several
points dealing with tariffs. Premier Colijn had
appealed to all delegations to suggest topics for
discussion, and in response the United States group
urged consideration of a 10% multilateral reduction
of trade barriers, extension of the tariff truce
beyond the Conference, and encouragement of bilateral tariff reductions based on the most-favorednation principle. It was widely reported in London,
after these suggestions on topics for discussion were
submitted, that the United States had submitted
a definite plan for a 10% horizontal cut in tariff
rates. Senator Key Pittman found it necessary,
Sunday, to issue a formal statement to the effect
that no such definite plan could be attributed to
the American group. This left the Conference as a
whole more bewildered than ever regarding the
position of the United States.
The prevailing impressions in London of disunity
and confusion among the American representatives
was heightened somewhat unfortunately, Monday,
when it was announced in Washington that Professor Raymond Moley, Assistant Secretary of
State, would proceed promptly to London, accompanied by Herbert Bayard Swope as an associate.
It was also indicated that Bernard M. Baruch, of
New York, would "sit in" at Washington as liaison
officer between the American delegation and the
June 24 1933
President. "Mr. Baruch is a shrewd trader who
makes no secret of his conviction that stabilization
can come only as a part of a broader co-operation
involving various other economic factors," a Washington dispatch to the New York "Herald Tribune"
remarked. His selection, accordingly, was viewed
as a further indication that this Government will
turn temporarily deaf ears to proposals for early
fixation of currency ratios. In London the developments were regarded as an attempt by President
Roosevelt to compose differences in the American
delegation and to work out a uniform plan. This
impression prevailed despite the fact that it was
indicated weeks ago that Mr. Moley would "commute" between Washington and London while the
Conference is in progress.
HE serious divergencies between French and
American views on stabilization produced the
first "crisis" of the London Conference. In an Associated Press dispatch of Tuesday it was reported
that a recess of the gathering was under consideration by its leaders, and would be discussed at a
secret meeting early Wednesday. The correctness
of this report was demonstrated by Washington reports of the same day, to the effect that the State
Department would deplore any recess or adjournment of the Conference at this time. Discussions
so far had been among the representatives of the
United States, Great Britain and France, it was
pointed out, and it was felt that the other 63 countries at London should at least have a chance to
express their views before there is any talk of adjournment. Even on the monetary side of the
agenda much progress probably can be made on such
problems as the removal of exchange restrictions
and other items, with stabilization temporarily
awaiting the outcome of the discussions, it was
maintained.
While the secret debate on adjournment was going
on, consideration of monetary and economic problems was started on a somewhat broadened scale
in the London Conference. A resolution on the
problem of raising world commodity prices was laid
before the Monetary Commission, Tuesday, by the
British Chancellor of the Exchequer, Neville Chamberlain. It is essential, the resolution pointed out,
to bring about a price recovery sufficient to yield
an economic return to producers of primary products and to restore the equilibrium between costs
and prices of production generally. Monetary
action is one of the determining factors, it was
added, and it was maintained that "deflation should
cease and that cheap and plentiful credit should be
made available and its circulation actively encouraged." Central banks should co-operate with this
end in view and should announce their intention of
pursuing vigorously a policy of cheap and plentiful
money, Mr. Chamberlain declared. He urged also
that the central banks should undertake to "coordinate action—namely, by open market operations
to insure as far as possible that the credit made
available is put into active circulation." This resolution led to a long discussion in the Monetary Commission, and to a division of the gathering into two
camps. One group argued for restoration of confidence in order to raise prices, while the other
argued for an advance of prices in order to restore
confidence. The choice of a road was considered
as resting entirely on the shoulders of President
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Volume 136
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Roosevelt, and the representatives at London followed the fluctuations of the dollar with anxious
care. The discussion on price levels was continued,
Wednesday, but no perceptible progress was made.
The Monetary Commission also gave some consideration to a rather strange proposal by Senator
Bey Pittman, of the United States, offered in the
form of a resolution to be adopted by the Commission. The resolution of the Nevada Senator urged
eventual restoration of gold as an international exchange medium and withdrawal of this metal from
circulation, and suggested that the metal cover
adopted for currencies be lower than the average of
present requirements, with 25% as a suggested rate.
Of the metallic cover, moreover, 80% should be in
gold and 20% optionally in gold or silver, Senator
Pittman maintained. But these proposals have
already been dealt with in the earlier portion of this
article. After a brief study, the Monetary Commission agreed, Tuesday, that gold should be readopted
as the standard of international exchanges, but the
suggestions for reduction of metallic currency bases
and their division between gold and silver were
referred to a convenient subcommittee.
In the Economic Commission, meanwhile, various delegations made their views on important
problems known. It was in this Commission that
the tariff reduction "proposal" of the United States
was submitted for study, Saturday. Difficulties
were encountered the previous day along other
lines. Dr. Alfred Hugenberg, German Minister of
Economy and Agriculture, advanced the view at a
meeting of the Commission on Rine 16 that the
former African colonies of the Reich should be returned by agreement at the Conference. He also
hinted at the desirability of German colonization
schemes in Eastern Russia. The statements of the
German delegate caused a mild sensation at London, but the German delegation leaders quickly disavowed the proposals of Dr. Hugenberg, who was
promptly recalled to Berlin and the incident was,
closed.
The Economic Commission turned its attention,
Tuesday, to the problem of regulating the production of important foodstuffs and raw materials
throughout the world, in the endeavor to raise prices
and restore purchasing power to the vast rural populations. It was recognized at the outset that mutual
concessions on limitation of crops or production
areas would afford the only feasible means of attaining such ends, and the discussion centered
mainly in the question of such concessions. Spokesmen of 10 nations participated, a London dispatch
to the New York "Times" remarked. "The hesitations of the Australian and Canadian wheat growers, the apprehensions of the French and Polish
peasants, the grievances of the Argentine livestock
producers, the concern of Italy and other countries
to reserve internal markets for their own farmers—
all these conflicting desires and prejudices became
vivid as they were presented lucidly and without
bitterness," the dispatch added. It was noted that
the principle of international limitation of wheat
production had been under discussion for a fortnight
by a special committee, but the outlook for agreement even on this grain was not regarded as hopeful.
A corresponding pessimism prevailed regarding the
prospect of agreement in general on all important
commodities.
4323
There was a distinct lull in the Conference as a
whole, beginning Wednesday, owing in large part
to the impression in London that further delineation
of the American attitude would have to wait the
arrival of Mr. Moley next week. No progress whatever was made on the major questions of currency
stabilization or tariff policy, for several days. Discussions between regional and monetary groups
occupied the center of the stage for a time. Representatives of the European gold standard group of
countries—France, Belgium, Holland and Switzerland—conferred on the possibility of arranging a
series of preferential tariff agreements among themselves. Much interest was occasioned by direct conversations between American and Russian representatives on the problem of an international accord
on wheat. Henry Morgenthau, of the United States,
discussed this matter with Maxim Litvinoff, Foreign
Commissar of the Soviet Union, Wednesday, and
was said to have found the Russian official "particularly agreeable."
HE Conference atmosphere improved somewhat
on Thursday, when the American delegation
issued a statement, already referred to, on the stabilization problem and introduced a resolution on
tariffs and other trade restrictions. These pronouncements were made with the full approval of
the Administration in Washington, and it was
emphasized that they were official in every sense.
They served, therefore, to clarify the situation and
make plain the attitude of the United States on
these important matters. The resolution on
tariffs and trade restrictions was aimed against
extreme nationalistic action in this sphere. Such
economic action, if carried to its logical conclusion,
must result in almost complete elimination of international trade and a return to almost medieval isolation, and the tendency, accordingly, must be
arrested, it was argued. The nations were urged to
agree on a program for the complete and speedy
removal of embargoes, import quotas and similar
arbitrary restrictions, and for the reduction of tariff
barriers to a point where trade once again can move
in a free and normal manner. A further resolution,
introduced by Senator Couzens in behalf of the
American delegation, called for the co-ordination of
international monetary policy in an endeavor to
stimulate business. While these resolutions and
statements were under consideration some progress
was made toward an agreement on international
curtailment of wheat production. The United
States, Russia, Canada and Argentina were understood to have agreed on general principles, but there
was some question regarding the attitude of
Australia.
The first "crisis" of the gathering was definitely
overcome, Thursday, reports said, when the
French were induced to remain in London, despite
their pessimism regarding the monetary policy of
the United States delegation. Prime Minister Ramsay MacDonald, as President of the Conference,
mediated between the French and American groups,
but he made no progress, and was reported to believe
the Conference was likely to "blow up." A private
meeting then was arranged between James M. Cox
of the United States and Finance Minister Georges
Bonnet of France, and in this discussion the American was said to have convinced the French leader
T
4324
Financial Chronicle
that the American attitude is not inimical to France.
The position of the Conference as a whole, however,
was not greatly improved by the Franco-American
adjustment and the resolutions submitted by the
United States delegation, it was said. "The Conference seems definitely oriented in the direction of
agreement upon sonorous generalities only," a London dispatch to the New York "Herald Tribune"
remarked. "Both the British and the French
politely applauded the American initiative, but
privately admitted that it practically ended hope of
specific or important achievements in the monetary
or economic fields," it was added.
The gulf between French and American views was
widened to a degree yesterday, when the French delegation proposed a "quota truce" whereunder present quota arrangements on imports could be retained indefinitely, although no new ones could be
enacted. This resolution, an Associated Press dispatch said, was considered a counter-proposal to the
drive by the United States for complete abolition
of all embargoes, quotas and other arbitrary restrictions. It was referred to the same committee that
is considering the tariff proposal placed before the
gathering by Secretary of State Cordell Hull. On
the currency stabilization question, meanwhile, an
"armistice" has been declared. Prime Minister
MacDonald indicated late yesterday that the Conference would not dissolve owing to the differences
on this point. "I am entering the third week with
a very buoyant and hopeful heart," he said. The
Conference adjourned late yesterday and will resume next Monday. In Washington it was again
made clear yesterday that there is no intention of
immediate stabilization of the dollar. All forces
will be concentrated on the domestic recovery program, it was said, irrespective of international developments.
ORMALITIES in connection with the war debt
payments due the United States Government
from 13 debtor countries on June 15 have been completed by an exchange of notes with all the debtor
States and publication of the correspondence. The
notes sent by the State Department in Washington
reveal a sharp divergence in the attitude of the
United States toward debtors who paid in full or
in part, and those who defaulted entirely. The
position on the payments of $143,605,294 due
June 15 remains substantially unchanged, Finland
alone having made full payment. Rumania, reported last week as contemplating a payment of
about $25,000, increased this sum to $29,100. Partial, or "token payments," of approximately 10% of
the amounts due were made by Great Britain, Italy,
Czechoslovakia and Latvia. States that defaulted
entirely are France, Belgium, Poland, Lithuania,
Hungary, Estonia and Yugoslavia. Payments,
when made, were in the form of silver valued at 50c.
an ounce. The United States Government received
22,317,385 ounces of the metal, appraised officially
at $11,158,692, although the market value is considerably under this figure.
Notes exchanged with the Governments of France,
Belgium. Italy, Poland and Finland were published
last Saturday in Washington. France disclaimed,
in its communication, any desire to break unilaterally engagements freely entered into, but found
it necessary to postpone the payment due on June 15
on the same basis that default was occasioned last
F
June 24 1933
December. The reply of the State Department was
unexpectedly brusque. Noting the attitude of the
French Government and its complete default, the
United States Government remarked that it must,
in all frankness, call attention to the problems raised
by the failure of the French Government to meet
the payment due on Dec. 15 1932, which have not
yet been solved or even discussed between the two
nations. Belgian and Polish representations were
similar to those made when these nations defaulted
on Dec. 15 last. Replies by the State Department
were quite like that made to France, but it was
noted that the Belgian and Polish Governments base
their failure to pay the instalments upon the principle of inability to pay. The note from the Italian
Government pointed out that the Fascist Grand
Council had decided upon a payment of $1,000,000
on June 15 "in order to show the good will of the
Italian Government and at the same time the limitations imposed upon it by the existing situation."
The reply of the State Department was that "the
Government of the United States would not be entirely candid if it did not express its thought that
a payment of $1,000,000 on a total payment due of
more than $14,000,000 may be regarded in the United
States as unsubstantial and may occasion disappointment on the part of Congress and the people
of the United States."
.
The exchange of notes with the Government of
Finland was considered quite significant, as it appeared to open the way for immediate review of the
debt problem with this Government. The Minister
of Finland, L. Astrom, remarked in his communication that full payment of the interest of $148,592
would be made in silver, on the understanding that
payment in this form would be agreeable to the
United States Government. In its reply, the State
Department acknowledged receipt of the payment
and added that the "Government of Finland, by this
action, has justified the high regard in which it has
always been held by the Government of the United
States." Much significance was attached in the
reply to the fact that the people of Finland regarded
the payment as an important national obligation
and discharged it in full. "This Government will
be ready to discuss at the pleasure of the Government of Finland the entire debt question," the note
stated. In a Washington dispatch of Tuesday to
the Associated Press, it was noted that the United
States is anxious to give the Government of Finland
first place in the coming series of conferences looking to revision of the debts of the several nations.
Minister L. Astrom, on the other hand, was said
to prefer postponement of any such discussions until
next autumn.
Plans for review of the debt settlements would
appear to hinge in good part on the progress of the
World Monetary and Economic Conference in London. London reports of Tuesday indicated that the
British Government plans to send a mission to
Washington for this purpose, provided the London
Conference has concluded by the end of July. Foreign Secretary Sir John Simon and Chancellor of
the Exchequer Neville Chamberlain probably will
head this group, it was said. Government spokesmen were asked, in the House of Commons, whether
Great Britain would demand payment from her own
debtors in view of the fact that a token payment was
made to the United States. No reply was made to
this inquiry. The British method of effecting pay-
Volume 136
Financial Chronicle
ment and of acquiring the silver in India was bitterly attacked in Calcutta, Tuesday, by Nalini Ranjan Sarkar, President of the Federation of Indian
Chambers of Commerce, who accused Great Britain
of making a profit of more than £500,000. Unless
the figures are incorrect, the "transaction is the
shadiest in international finance in recent years,"
a dispatch to the New York "Times" quotes the
Indian business leader as saying. In French political and financial circles the brusque reply of the
state Department to the French representations
caused dismay, Paris dispatches said. The American note was viewed as a pointed suggestion to pay
first and talk debt revision afterward, a report of
last Sunday to the Associated Press remarked.
"Officials warily intimated," it was added, "that
since France is willing to pay something, a way will
be found for the United States to take it rather
than get nothing."
Additional correspondence regarding the June 15
war debt instalments was published in Washington,
Wednesday. The notes covered the action taken by
Czechoslovakia, Latvia and Rumania, which made
"token payments," and by Yugoslavia and Estonia,
-which defaulted entirely. These exchanges, like the
previous ones, disclosed a much more friendly attitude on the part of the United States Government
toward the countries that made payments than to
those that simply defaulted. In each of the notes
to the former group it was remarked that representations with regard to the entire debt question
will be "gladly heard at a date to be agreed upon
between us." The communications to the defaulting
States, however, merely noted the situation and the
stated reasons for lack of payment. It was noted
in dispatches from Washington that the effect is to
divide the debtors into two categories, the paying
group being invited to state its case while the defaulters are met with chilly reserve. "The division
suggests," a dispatch to the New York "Herald
'Tribune" said, "that unless France and the other
defaulters make overtures which account for their
delinquencies, they may be permitted to stand permanently in default on the American books."
RRANGEMENTS covering the debt service on
German external borrowings slowly are taking shape at conferences in London between Dr.
Hjalmar Schacht, President of the Reichsbank, and
banking representatives of both the short- and longterm creditors of the Reich. The discussions were
started June 13 at the invitation of Dr. Schacht,
much where they were left off at the end of a conference in Berlin, last month. In the Berlin meetings Dr. Schacht declared unequivocally that a
moratorium on external debt service was imperative
in order to safeguard the Reichsbank and prevent
its gold and foreign exchange reserves from dwindling further. After depicting the situation in a
lengthy speech at Berlin, Dr. Schacht asked the
representatives of the creditors to propose remedies,
but no suggestions were made and arrangements
entered into for the London discussions. A transfer moratorium decree was issued, moreover, to be
effective July 1.
In the British capital conversations were carried
on concurrently by Dr. Schacht with the committee
of bankers representing short-term creditors, and
with an informal group acting in an advisory
capacity on the long-term indebtedness of Germany.
A
4325
Announcement was made June 16 that an agreement had been reached between the Reichsbank and
the short-term creditors' committee for modification of the standstill arrangement of last February.
It was provided that certain repayments of capital,
guaranteed by the German Gold Discount Bank and
amounting to about 75,000,000 marks, due from
Oct. 1 next to Feb. 28 1934, would be postponed until
the latter date. The liability of the German Gold
Discount Bank on interest payable on short-term
credits guaranteed by it remained unaffected. Payments of principal postponed under the agreement
are to be made in marks if any foreign bank creditor
wishes, subject to four weeks' notice in writing, but
any marks so paid shall be accepted by the creditor
as full satisfaction of the instalment. It was
learned on the following day in London, according
to an Associated Press dispatch, that the interest
rate on the 3,600,000,000 marks of short-term credits
2%.
4% to either 4% or 41/
is to be lowered from 43
depending on the nature of the credits.
The trend of discussions on the long-term external
indebtedness of Reich borrowers was indicated in a
formal statement on June 16, made soon after the
agreement on short-term loans was announced. A
tentative agreement was reached on long-term loans,
providing for complete exemption on the Dawes Plan
loan of the German Government, and partial exemption of the service on the Young Plan loan, from
the operation of the German transfer moratorium
which is to go into effect July 1. Interest on the
Young Plan loan will be paid in foreign currencies,
as heretofore, but sinking fund payments will be
accumulated in the blocked marks account of the
Reichsbank, it was indicated. The question of the
temporary postponement of sinking fund payments
on the Young plan loan in foreign currencies is to be
referred, however, to the Bank for International Settlements, which acts as trustee for the loan. The
legal transfer priority of the Dawes plan loan, both
as to interest and amortization, was unquestioned,
the announcement stated. "Apart from the above
considerations affecting the Dawes and Young
loans, it was generally agreed that transfer for the
payment of interest should in all cases, both of the
long-term and the short-term credits, have priority
over transfer for the payment of capital," it was
added.
London reports of last Saturday indicated that
the tentative arrangements on the long-term debts
of the Reich were not satisfactory to representatives
of Dutch and Swiss bondholders, who notified Dr.
Schacht that "certain suggestions of his would not
be acceptable." The objections by investors of Holland'and Switzerland, who hold about 2,500,000,000
marks of German bonds, hampered the negotiations,
it was said. The Swiss were reported to have taken
the matter out of the hands of banking representatives, and to have assigned their official World
Monetary Conference delegate to continue the conversations with Dr. Schacht.
A vigorous American protest against the German
transfer moratorium on German long-term loans
also has been placed on record. The protest was
made in the form of a cablegram dispatched to Dr.
Schacht, Tuesday, by John Foster Dulles, after a
meeting of investment bankers concerned in the
flotation of nearly $1,000,000,000 of German bonds
outstanding in the American capital market. Mr.
Dulles acted as observer for the American houses
Financial Chronicle
June 24 1933
HANCELLOR Adolf Hitler and his Fascist followers in Germany took further steps this
week toward the complete suppression of all political opposition within the Reich. An order was
issued, Thursday, by Minister of the Interior Wilhelm Frick, calling for elimination of the Social
Democratic party from the affairs of the country.
The political faction, which is the second largest in
Germany, is to be dissolved under the order. A previous attempt to dissolve the Communist group
merely drove that faction under ground. In addition to outlawing the Social Democratic party as
treasonable and inimical to the safety of the State,
measures were taken for annulment of the 121
Reichstag seats of party members and the removal
of all Socialists from public office throughout Germany. This measure followed hard on the heels of
summary orders for the suppression of the greenshirted Nationalists of Dr. Alfred Hugenberg, who
has remained in the Cabinet as Minister of Economics, despite innumerable reports of dissention.
The Nationalists were allies of the Fascists in the
general election on March 5, but apparently the
Hitlerites no longer feel they need Dr. Hugenberg's
support.
An acute stage has been reached in Austria, in the
struggle between the Dollfuss Government and the
Fascists for control of the country. The Nazi movement in Austria is dominated by that of Germany,
and this introduces a variety of delicate international problems. The Austrian Government announced, Monday, that the Nazi or Fascist party
would be outlawed because of its continued terrorist
activities. German Nazi organizers were expelled
from the country and Fascist political activity was
forbidden. Chancellor Engelbert Dollfuss announced, Tuesday, that the Austrian Government
is master of the situation and that its measures are
"unswervingly approved by the overwhelming majority of the people of Austria." The problem of
Austrian independence was understood to have
caused much concern in Paris and Rome, and there
were further vague statements that Austria soon
may receive the $40,000,000 loan promised by a
group of European nations last year in virtual return for abandonment of ideas of "Anschluss" with
Germany. Premier Mussolini was reported from
London, Wednesday, to have evolved a new idea of
closer union between Austria and Hungary in order
to prevent Austria from turning to the Nazis, who
are also determined Pan-Germanists. The French
Government was not disposed to regard this suggestion sympathetically, dispatches said.
C
HERE have been no changes in the present week
in the discount rates of any of the foreign
central banks. Present rates at the leading centers
are shown in the table which follows:
T
DISCOUNT RATES OF FOREIGN CENTRAL RANKS.
Rate V.
Date
Affect
June23 Rsiatatekeet.
PreMous
Rate.
Country.
(1111.10P
___
Mar. 23 1933
Jan. 13 1932
May 17 1932
Aug. 23 1932
Sept. 19 1932
6
214
04
54
6
Ian.
July
June
June
Ian
May
let.
arpt
May
44
5
34
2%
64
6
2
5
0
XXX
X
Au+trla__
Belgium ___
Bulgaria_ .Chile
Colombia._
Caerhoalevakla__
TIAMI111. _ - D..nrnark—
Vng'anel_-_
Fetonla____
Flnland____
Fr.,,,ms.-_Cf./ many _ _
Cr.AWC404
I
Country.
XXX
-
of issue at the Berlin meeting between Dr. Schacht
and the creditors. Germany's foreign exchange
position does not warrant the drastic measure of
the moratorium, it was contended in this communication.
On the basis of data submitted by the Reichsbank
itself, Mr. Dulles said, it is the judgment of the
issuing houses here that "the position and prospects
of Germany as regards foreign exchange are not
such as to warrant the precipitate, drastic and arbitrary action embodied in the moratorium decree of
June 8." Both the manner of the action and its
scope were considered deplorable, as it "threatens
to impose on creditors, without their consent, sacrifices far beyond what the facts would justify." Even
the terms of the bonds are sought to be changed, so
that payment in marks to the Reichsbank will discharge a contract to pay dollars to the bondholders,
it was pointed out. "Such a policy, if persisted in,
cannot but do lasting injury to the public and private credit of Germany," it was stated. "Germany,
even in periods of great adversity, has zealously
guarded her commercial credit. When, only recently, she contended that the imposed charge of
reparations must be abolished in order to permit
her to pay her freely contracted private debts, the
world generally accepted that argument as sincere.
Germany now risks the loss of her credit standing
with lasting consequences as well as immediate
repercussions which cannot but disappoint the expectation of the Reichsbank that its action will lead
to a rapid replenishment of its gold reserves." The
hope was expressed that these, and possibly other
considerations, will result in a modification of the
moratorium decree of June 8.
An explanation of the attitude of the short-term
creditors of the Reich was issued, Wednesday, by
F. Abbot Goodhue, President of the Bank of the
Manhattan Co. and Chairman of the subcommittee
of American banks interested in the German standstill credits. In view of the existing foreign exchange situation in Germany, further concessions
were agreed to in London by representatives of the
short-term creditors, Mr. Goodhue stated. These
consist chiefly of reduction in the interest rate by
1/
27
0, postponement of certain principal payments
as already indicated, and waiving of the right to
transfer of a percentage of existing credits upon
granting new credits. "Both debtors and creditors
realize," Mr. Goodhue added, "that the short-term
credits are essential to German trade and must be
continued in order to provide Germany with the
facilities to carry on that trade and thus build up
her supply of foreign exchange. German foreign
trade and world trade were recognized by all the
creditors' representatives recently in Berlin as
fundamental to the transfer problem. Since Germany is obtaining no long-term funds at the present
time, foreign trade financed by these credits is the
only channel through which she can accumulate
this exchange; and it is to this exchange that the
long-term, as well as the short-term, creditors must
look as the source of payment to them. The continuation of the short-term credits is thus vital not
only to Germany but to all her creditors as well.
By carrying on for the last two years, as they have
done, and by making repeated concessions, the shortterm creditors have made every sacrifice for the
benefit not only of themselves and of Germany, but
also for the benefit of all Germany's creditors."
sl•NCP:)
....14"..C4
4326
25 1933
12 1932
1 1933
30 1932
29 1932
27 1933
9 1031
31 1032
29 1933
Holland_
Hungary._
India
Ireland_....
Italy
Japan
Lithuania._
Norway._ _
Poland ____
Portugal _..
Rumania.
SouthAfrlea
Spain
Sweden...
Switzerland
Rate en
P•e1{„rert
Date
elous
June23 6'31(0)U:bed. Rate.
—
-314 May 11 1933 34
44 Oct. 17 1932 5
34 Fob 16 1933
4
3
June 30 1932 34
4
Jan. 9 1933 6
4.38 Aug 18 1932 5 11
7
May 5 1932 74
34 May 23 1933 4
6(let. 20 1032 74
6
Mar. 14 1933 6%
6
I
Apr. 7 1933
4
Feb. 21 1933 5
/rt. 22 1932 64
6
3
June 1 1933 34
2
Jan 22 11131
244
Financial Chronicle
Volume 136
In London open market discounts for short bills
on Friday were @9-16%, as against %% on Friday
of last week and 3/2@9-16% for three months' bills
as against 9-16@5A% on Friday of last week. Money
on call in London yesterday was %. At Paris
the open market rate remains at 23.16/
0 and in Switzerland at 13/2%.
Bank of England statement for the week
THEended
June 21 shows a large increase in gold
holdings of £1,030,239 which brings the total up to
another new high mark of £189,276,695. A year ago
the figure was only £136,476,383. The gain in gold
was attended by a contraction of £2,999,000 in circulation and so reserves rose £4,029,000. Public
deposits increased £13,237,000 while other deposits
fell off £8,482,078. The latter consists of bankers'
accounts which are off £9,606,975 and other accounts which went up £1,124,897. The reserve ratio
is up to 48.33% from 47.21% a week ago. In the
same week last year the ratio was only 37.17%.
Loans on Government securities decreased £1,760,000
while those on other securities rose £2,534,986. The
latter consists of discounts and advances which fell
off £284,503 and other accounts which rose £2,819,489.
The rate of discount is unchanged at 2%. Below
we show the figures with comparisons for five years:
DANK OF ENGLAND'S COMPARATIVE STATEMENT.
1933
June 21.
1932
June 22.
1931
June 24.
1930
June 25.
1929
June 26.
£
£
£
£
E
Circulation a
372.022,000 358,548,037 352,831,656 358,531,877 362,732,885
Public deposits
24,848,000 35.577,416 25,249.188 21,504,850 24.714.405
Other deposits
134,995,573 106,794,912 95,163.778 99,889,989 103,579,764
Bankers' accounts_ 95,195,445 73,849,460 61,643,786 63,778,222 67,420.265
Other accounts... 39,800,128 33,145.452 33,519,992 36,113,767 36,159.499
Govt.securities
73,648,503 66,644,656 30,400,906 48,855,547 38,551,855
Other securities
26,857,933 40,707,048 36,762,202 31,239.392 50,224,394
Disc. A( advances. 12.676,753 14.141,632 9,633,254 15,899,161 26,987,712
Securities
14.181,180 26,565,416 27,128,948 15,340,231 23,236,682
Reserve notes & coin 77,254,000 52.928,346 71.181,930 59,241,413 57.474,192
Coln and bullion
189,276,695 136,476,383 164,013,586 157,773,290 160.207,077
Proportion of reserve
to liabilities
48.33%
37.17%
59.11%
48.79%
44.79%
Bank rate
2%
24%
24%
54%
3%
a On Nov.29 1928 the fiduciary currency was amalgams ed with Bank of England
Issues,
note
adding at that time £234,199,000 to the amount of Bank of England
notes outstanding.
HE Bank of France, in its statement for the
week ended June 16, shows an increase in gold
holdings of 74,870,222 francs. The Bank's gold now
aggregates 81,180,812,486 francs, in comparison
81,643,494,863 francs last year and 56,525,259,766
francs the previous year. Credit balances abroad
and creditor current accounts record an advance of
2,000,000 francs and 558,000,000 francs, while
French commercial bills discounted and advances
against securities register decreases of 232,000,000
francs and 4,000,000 frans respectively. •Notes in
circulation reveal a contraction of 782,000,000 francs,
reducing the total of notes outstanding to 82,999,324,665 francs. A year ago circulation stood at
81,018,189,220 francs and two years ago at 76,474,604,608 francs. The proportion of gold on hand to
sight liabilities stands this week at 78.36% as compared with 75.69% last year and 56.57% the previous
year. Below we furnish a comparison of the various
items for three years:
T
DANK OF FRANCE'S COMPARATIVE STATEMENT.
Changes
for Week.
Francs.
Gold holdings
Credit be's. abroad.
a French commercial
bills discounted._
b Bills bought abr'd
Adv. against secure.
Note circulation....
Cred. current accts.
Proportion of gold on
hand to sight nab_
June 16 1933. June 17 1932. June 19 1933.
Francs.
Francs.
Francs.
+74,870,222 81,180,812,486 81,643,494,863 56,525,259,766
+2.000,000 2,536,562,019 4,547,208,424 5,737,336,7(15
—232,000,000 2,829,161,995 3,250,067,163 4.654.045,775
No change 1,413,642,079 2,284,419,075 20,423,529,946
—4,C00.000 2.704,996.035 2,757,325,279 2,792,071.635
—782,000,000 82,999,324.665 81.018,189,220 76,474.604,605
+558,000,000 20,605,581,020 26,851,482,944 23,440,257,517
+0.24%
a Includes bills purchased In France.
78.36%
75.69%
56.57%
b Includes bills discounted abroad.
4327
HE Reichsbank's statement for the second quarter
of June reveals a further loss in gold and
bullion, this time of 87,370,000 marks. The total
of bullion which is now 263,871,000 marks compares
with 822,507,000 marks the same period a year ago
and 1,765,571,000 marks two years ago. Increases
appear in reserve in foreign currency of 607,000
marks, in silver and other coin of 58,831,000 marks,
in notes on other German banks of 4,136,000 marks,
in advances of 3,740,000 marks, in other assets of
1,930,000 marks, in other daily maturing obligations
of 24,843,000 marks and in other liabilities of 3,370,000 marks. Notes in circulation show a decrease of
88,557,000 marks, reducing the total of the item to
3,284,043,000 marks. Circulation at the corresponding period a year ago stood at 3,815,404,000 marks
and the year before at 3,888,610,000 marks. Bills
of exchange and investments register a decline of
41,859,000 marks and 359,000 marks respectively.
The proportion of gold and foreign currency to note
circulation is now at 10.6% in comparison with 25.1%
last year and 48.1% the previous year. Below we
furnish a comparison of the different items for
three years:
T
REICHSBANK'S COMPARATIVE STATEMENT.
Changes
for Week.
Assess—
Gold and bullion
Of which depos. abroad
Res've in foreign curr..
Bills of exch. Ar checks.
Silver and other coin
Notes on other Ger bks.
Advances
Investments
Other assets
Liabilities—
Notes In circulation...
0th. daily matur.()Wig.
Other liabilities
Propor.of gold & foreign
curr, to note circurn
June 15 1933. June 15 1932. June 15 1931.
Retchstnarks. Retchsmarks. Reichsmarks. Reichsmark,.
—87.370,000 263.871.000 822,507.000 1,765,571.000
21.569.000
No change
90,474,000 198,112.000
85,015.000 135,713,000 104.309.000
+607,000
—41,859,000 3,082.471.000 2,983,391,000 2.032,654.000
+58,831,000 315,489,000 283.800,000 199,131,000
+4,136.000
11,061,000
8,137,000
17.826,000
78,175,000 108,940,000 154,848,000
+3,740,000
—359,000 319,864.000 364.430.000 102,729,000
+1,930,000 334.184.000 768,984,000 573.973,000
—88,557.000 3.284.043.000 3,815,404,000 3,888,810,000
+24,843.000 400,411,000 380,422.000 323,620,000
+3,370,000 164,625,000 712,650,000 251,480.000
—2.3%
10.6%
25.1%
48.1%
EALINGS in the New York money market were
quiet this week, with the tendency slightly
easier. Call loans on the New York Stock Exchange
were 1% for all transactions, whether renewals or
new loans. In the unoffocial street market call
loans were reported done every day at a concession
from the official level. From Monday to Wednesday,
inclusive, such outside loans were at %%, while
transactions reported Thursday and yesterday were
at N%. Time loans were a shade easier, the range
dropping from 1% to 13/2%, or %@13'%. An
issue of $100,000,000 in 91-day Treasury discount
bills was awarded Monday at an average level of
0.24%. Of interest to the money market was a
decision by the Clearing House to act promptly on
the Glass-Steagall bill provision which prohibits the
payment of interest on most demand deposits in
member banks of the Reserve System. Customers
were notified late last week that interest on such
demand deposits had ceased. The United States
Treasury notified depositary institutions Monday
that no interest would be required to be paid on
daily deposit balances kept with them by the Treasury. The New York Clearing House Committee
announced Wednesday that the rate of interest payable of time deposits would be lowered from M% to
0, effective immediately, and it was further
3. 17
indicated that time deposits would be redefined as
those payable 60 days from demand, instead of 90
days as formerly. Brokers' loans against stock and
bond collateral declined $7,000,000 in the week to
Wednesday night, according to the usual report of
the Federal Reserve Bank of New York.
D
Financial Chronicle
4328
EALING in detail with call loan rates on the
D
Stock Exchange from day to day, 1% has
been the
week for
ruling quotation all through the
both new loans and renewals. The market for time
money has been extremely quiet this week with only
an occasional transaction in 90-day money. Rates
are nominal at 4% for 30 and 60 days, 1% for 90
and 120 day periods and 1®13i% for five and six
months. The market for commercial paper has been
moderately active this week but the shortage of
high grade paper has greatly restricted transactions.
Rates are 13/2@14% for extra choice names running
from 4 to 6 months and 14@2% for names less
known.
for prime bankers' acceptances has
THEbeenmarket
quiet this week, though there has been a
preceeding week. Paper
slight improvement over the
is still short and insufficient to meet the demand.
Rates are unchanged. The quotations of the American Acceptance Council for bills up to and including
three months are M% bid and V% asked; for four
months, 4% bid and %% asked; for five and six
months, 1% bid and V% asked. The bill buying
rate of the New York Reserve Bank is 2% for bills
running from 1 to 90 days; 23/% for 91 to 120 days,
and 2 2% for bills due in 121 to 180 days. The
Federal Reserve banks' holdings of acceptances have
dropped during the week from $10,200,000 to $8,827,000. Their holdings of acceptances for foreign correspondents however, has increased during the week
from $35,031,000 to $36,948,000. Open market rates
for acceptances are as follows:
SPOT DELIVERY.
—1W Dabs^
—180 Days—
Asked
Bia.
Asked.
Rid.
Prime eligible bills
—120 11,sys-Itid
Asked
1
—90Days—
Asked.
Rid
—60Dap-Asked.
Bid.
Prime eligible bills
—30 Days -Bid.
Asked
1.4
FOR DELIVERY WITHIN THIRTY DA VS.
Eligible member banks
Eligible non-member banks
1% bid
1% bld
HERE have been no changes this week in the
T
rediscount rates of the Federal Reserve banks.
The following is the schedule of rates now in effect
for the various classes of paper at the different Reserve banks:
DISCOUNT RATES OF FEDERAL RESERVE RANKS.
Federal Resat,' Rank.
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Danes
Ban Francisco
Rate in
Wes on
June 23.
3
21.
a
3
3'
,5
3‘
,2
3
3
314
314
3h
3
Date
Established.
Previous
Rate.
June 1 1933
May 26 1933
June 8 1933
June 10 1933
Jan. 25 1932
Nov. 14 1931
May 27 1933
June 8 1933
Sept. 12 1930
Of t. 23 1931
Jan. 28 1932
June 2 1933
34
3
31.4
314
4
3
314
34
4
3
4
344
exchange continues exceptionally firm.
STERLING
In Thursday's trading the pound shot up to
4.244 for cable transfers, the highest quotation since
the abandonment of gold by Great Britain in Sept.
1931. This quotation means that the dollar has
dropped in the estimation of foreign bankers to a new
low. In Paris the United States dollar was quoted at
79.9 cents, and at 80.2 cents in Amsterdam and in
Zurich. These are the gold values established by
the three leading gold centers. The computation is
based upon mint parities. The range for sterling this
week has been from 4.06% to 4.24 for bankers'
sight bills, compared with a range of between 4.01 2
and 4.19 last week. The range for cable transfers
June 24 1933
has been from 4.064 and 4.2434., compared with a
range of between 4.02 and 4.193/i a week ago. The
upswing in sterling, or rather the break in the dollar,
was the result of the developments at the economic
conference in London, where the American view was
expressed that currency stabilization could be better
accomplished after a general rise in prices. It will
be recalled that last week London advices from the
conference intimated the possibility that the financial
experts of Great Britain, France, and the United
States might agree upon a stabilization program for
the sterling-dollar rate at around $4.00 or possibly
$4.05. One of the United States representatives,
when interrogated regarding these figures stated that
they were about right, thereby clearly intimating to
the press representatives that a satisfactory agreement at this level was expected. Early this week
President Roosevelt instructed the United States
delegation at the London conference to withhold discussion of monetary stabilization until they could
receive first-hand information of his views from Professor Moley, who sailed for London on Wednesday.
At the same time Mr. Harrison, Governor of the
Federal Reserve Bank of New York, and Professor
0. M. W. Sprague, adviser to the Treasury Department, sailed from London for home, allegedly to seek
further light on President Roosevelt's views on monetary stabilization. These events caused great confusion and uncertainty in the markets. Traders
everywhere became nervous and the conviction spread
among European bankers that the United States has
determined to pursue a course of more decided inflation.
Throughout the week all the foreign exchanges
have been extremely erratic. Transactions have been
at a minimum and actual trades in insignificant
amounts were sufficient to effect wide variations in
quotations. Despite the pressure on the dollar and
the great confidence felt as to the future prospects of
sterling, there is not lacking an influential body of
opinion both here and abroad which insists that the
dollar is quoted too low and that the immediate
future is likely to bring considerable enhancement in
the unit rather than further depreciation. Those
holding this opinion point to the fact that the balance
of payments is entirely in favor of the United States
and that its great gold holdings, temporarily locked
up, are a potential source of strength so great as to
render speculative raids on the dollar hazardous.
It is also pointed out that the European currencies
must expect very much less support this year from
American tourist expenditures, which have always
been an important factor in their favor. These expenditures would have been at a minimum this
season in any event, but the departure of the dollar
from gold and the wild gyrations in exchange must
of necessity greatly curtail American tourist requirements.
It is also to be noted that the period of seasonal
pressure against sterling and the European currencies
is immediately ahead. Under normal conditions
from about the middle of January until the approach
of July, exchange should be in favor of London and
against New York. With the approach of July until
after the turn of the year exchange normally turns in
favor of New York and against London and the
Continent. Cotton bills begin to come into the market in the latter part of August and the autumn is
traditionally a period of weakness in sterling. It
has always been the policy of the Bank of England
Volume 136
Financial Chronicle
4329
to prepare against this autumn drain. Last year on gold, around 6d. per ounce over sterling-franc"
sterling sold at the lowest on record, 3.14M at the parity. On Saturday £470,000 bar gold was available
end of November. However, under present condi- in the open market and taken for Continental account
2d.
tions there is no way to determine how exchange will at a premium of 13/2d. Bars were quoted 122s. 23/
Continental
for
taken
was
£245,000
go. Certainly the customary seasonal and tradi- On Monday
2d. The open market
tional influences cannot be taken into consideration. account at a premium of 13/
Tuesday 040,000 was
On
2d.
122s.
was.
quotation
stated
Dispatches from Washington on Wednesday
Bars were quoted
account.
Continental
for
in
taken
exchange
occur
should
speculation
that if undue
of England purBank
the
Wednesday
On
id.
put
into
be
122s
would
machinery
Reserve
Federal
the
motion to arrest it. It will be recalled that the chased 075,047 in gold bars. This purchase was
Treasury promulgated regulations in March regard- understood to be the result of a transfer from the
ing foreign exchange. Mr. Acheson, Acting Secre- Exchange Equalization Fund to the Bank of metal
tary of the Treasury, stated that the Treasury accumulated by the Fund in the open market. On
"certainly will step in if there is evidence of undue Wednesday also £135,000 was taken from the open
speculation or if there is evidence of flight of capital market for Continental account at a premium of 6d.
from the dollar." Much of the present firmness in per fine ounce. On Thursday £120,000 was taken
sterling in recent weeks undoubtedly arises from in the open market for Continental account at a preheavy import purchases by American interests anti- mium of 53d. Bars were quoted 122s. 3d. On
cipating a rise in prices. For instance, United States Friday Continental buyers took £74,000 bar gold
foreign trade returns for May show an increase in at a premium of 43/2d. The Bank of England stateimports to $107,000,000 from $88,400,000 in April, ment for the week ended June 21 shows an increase
which is due chiefly to importation of raw materials. in gold holdings of £1,030,239, the total standing at
It will be recalled that last week the British the record high level of £189,276,695, which comauthorities asked the London banks and the Stock pares with £136,476,383 a year ago and with the
Exchange Committee to refrain from assisting spec- minimum of £150,000,000 recommended by the
ulative transactions in exchange and to limit their Cunliffe committee.
customers as far as possible to commercial purchases.
At the Port of New York the gold movement for
It would seem that at the same time the communica- the week ended June 21, as reported by the Federal
tion sent by the British Treasury to the financial Reserve Bank of New York, consisted of imports of
institutions requested them to be cautious in dealings $29,000, chiefly from Latin American countries.
in foreign securities, especially American securities. There were no gold exports and no net change in
This letter was taken in banking circles in London gold earmarked for foreign account. In tabular
as evidence of an immedaite stabilization of sterling- form the gold movement at the Port of New York
dollar exchange. However, it turns out that while for the week ended June 21, as reported by the
this was certainly in the mind of the London authori- Federal Reserve Bank of New York, was as follows:
ties the Treasury also considered the necessity of GOLD MOVEMENT AT NEW YORK, JUNE 15-JUNE 21, INCL.
Exports.
Imports.
curtailing the purchase of large blocks of foreign
None.
I
$29,000 chiefly from Latin Amensecurities by British interests, as such purchases are
can countries.
regarded as adverse to the public interest, and indiNet Change in Cold Earmarked for Foreign Account.
None.
vidual as well as large financial interests are expected
for the week ended Wednesare
figures
above
The
to refrain from all forms of foreign lending for the
there were no imports
Thursday
On
day
evening.
present. It has been clear during the past few weeks
change in gold held
no
and
metal
the
of
exports
or
ready
to
were
expand loans
that London institutions
Friday there were
On
account.
foreign
for
earmarked
as
the
vast
abroad,
but
amounts
not only at home
of money on deposit in London steadily increased no imports of gold but $1,200,000 of gold was shipped
with the rising confidence in sterling. Money and to England and $55,000 to France. Good held eargold are flowing to London from all parts of the world. marked for foreign account decreased $1,200,000.
Open market money rates in London while easy are There have been no reports during the week of gold
fractionally firmer this week under the influence of having been received at any of the Pacific ports.
Canadian exchange continues at a considerable disofficial suggestion. The end of the half-year is also
responsible. Call money against bills is quoted at count, though slightly more in favor of Montreal
3
to %, against %% last week. Two-months' than in recent weeks. On Saturday last, Montreal
4%
/%, on Monday at
bills are quoted 9-16%, against %4% to IA% last funds were at a discount of 113
on Wednesday at
103/g%;
at
on
Tuesday
%;
4
101
week. Three-months' bills are 9-16% to %%, un4%.
Friday at 93
on
and
932%;
at
Thursday
on
934%;
changed from last week. Four-months' bills are
on
exchange
sterling
rates,
day-to-day
to
%%
last
to
Referring
9-16%
week.
Sixto 11-16%, against
was
sight
Bankers'
dull.
was
4.06%@
last
7
/%,
Saturday
against
to
%
3
4
%%
bills
to
are
3 %.
months'
4
2. On Monday
The Bank of England continues to buy gold in the 4.07%; cable transfers 4.06%@4.073/
was 4.12@
range
The
firmer.
sharply
was
sterling
than
in
less
few
is
the
active
pass
but
market
open
weeks owing perhaps to the fact that the open market 4.14% for bankers' sight and 4.12%@4.15 for cable
premium has advanced. Since last week the premium transfers. On Tuesday the market was dull but
s@
2d. sterling moved up. Bankers' sight was 4.163/
moved up to 6d. per fine ounce from around 13/
In the middle of May, when there was much talk of 4.193.; cable transfers 4.163'@4.19%. On Wednesthe possibility that France would abandon gold, the day the market was dull and the pound fairly steady.
premium went as high as is. 3d., but dropped off Bankers' sight was 4.1534@4.18%; cable transfers
4. On Thursday in limited trading
swiftly during the month. The premium on gold in 4.15%@4.183
to a new high on the movement. The
went
sterling
London is regarded as the criterion of the demand
4@4.24 for bankers' sight and 4.19@
4.183
was
range
The
hoarding.
uncertainty
for the metal for private
cable
transfers. On Friday sterling confor
4.243
prosstabilization
currency
to
prevailing with respect
the range was 4.213@4.24 for
high;
rule
to
tinued
the
present
premium
for
responsible
pects is largely
4330
Financial Chronicle
bankers' sight and 4.21%@4.243/
8 for cable transfers. Closing quotations on Friday were 4.223 for
, demand and 4.223/
2 for cable transfers. Commercial
sight bills finished at 4.213/
2; 60-day bills at 4.21;
90-day bills at 4.20V4; documents for payment
(60 days) at 4.203 and seven-day grain bills at
4.213
4. Cotton and grain for payment closed
at 4.21M.
XCHANGE on the Continental countries is of
E
course largely dominated by the chaotic situation
June 24 1933
Antwerp belgas finished at 17.35 for bankers' sight
bills and at 17.36 for cable transfers, against 16.84
and 16.85. Final quotations for Berlin marks were
29.64 for bankers' sight bills and 29.65 for cable
transfers, in comparison with 28.63 and 28.64.
Italian lire closed at 6.50 for bankers' sight bills
and at 6.503 for cable transfers, against 6.283/ and
6.29. Austrian schillings closed at 14.25, against
14.25; exchange on Czechoslovakia at 3.71, against
3.61; on Bucharest at 0.78, against 0.75; on Poland.
at 14.35, against 13.75, and on Finland at 1.88,
against 1.78. Greek exchange closed at 0.691
/
2 for
bankers' sight bills and at 0.703/ for cable transfers,
against 0.69 and 0.70.
--•-XCHANGE on the countries neutral during the
war presents no new features of importance.
All these units are seriously affected by the demoralization of exchange consequent upon the uncertainty
with respect to the dollar. The resume of sterling
exchange explains the difficulties under which these
currencies labor. While quotations are all high in
terms of the dollar, they are largely nominal owing to
the inactivity of trading.
Bankers' sight on Amsterdam finished on Friday
at 49.71, against 48.45.on Friday of last week; cable
transfers at 49.72, against 48.46, and commercial
sight bills at 49.65, against 48.35. Swiss francs
closed at 23.92 for checks and at 23.93 for cable
transfers, against 23.25 and 23.26. Copenhagen
checks finished at 18.79 and cable transfers at 18.80,
against 18.19 and 18.20. Checks on Sweden closed
at 21.79 and cable transfers at 21.80, against 20.99
and 21.00; while checks on Norway finished at 21.39
and cable transfers at 21.40, against 20.64 and 20.65.
Spanish pesetas closed at 10.41 for bankers' sight
bills and at 10.42 for cable transfers, against 10.24
and 10.25.
resultinefrom the gyrations of sterling and the
dollar. The French franc is especially firm, representing largely a false valuation in consequence of
the decline in the dollar. In Thursday's trading the
franc was quoted as high as 4.91, against parity of
3.92. The volume of trading did not justify the
quotation. The franc is weak in terms of sterling
and it is understood that the British authorities frequently intervene to protect the franc. A considerable part of the demand for gold in the London open
market comes from French sources and indicate
to some extent a lack of confidence in the future of
the French position. During the five months ended
in May, French foreign trade resulted in an excess of
imports over exports of fr. 5,154,000,000, compared
with fr. 5,115,000,000 for the same period a year
ago. The French authorities are stoutly insisting
upon immediate stablization of all currencies to gold.
Their attitude on monetary and trade matters is
discussed in other columns dealing with the London
economic conference. The Bank of France statement for the week ended June 16 shows an increase
in gold holdings of fr. 74,870,222, the total standing
at fr. 81,180,812,486, which compares with fr. 81,643,494,863 a year ago with .fr. 28,935,000,000 in
June 1928 when the franc was stabilized.
German marks are quoted exceptionally high in
terms of the dollar, although these quotations are
XCHANGE on the South American countries is
purely nominal owing to the severe exchange restriclargely at a standstill as has been the case for
tions imposed by the Reichsbank. The last state- several months. The South American
exchanges are
ment of the Reichsbank shows a loss of rm.87,370,000 particularly quiescent with respect to
the dollar
in gold reserves during the week ended June 15. owing to the fact that there is a strong
tendency for
The gold holdings now stand at a new low of rm. 263,- these units to ally themselves with the
pound and to
871,000. The Reichsbank has lost over two billion favor British accounts in all exchange transacti
ons.
marks in gold since the beginning of the German Central Hanover Bank & Trust Co. has issued
Argencrisis with the collapse of the Austrian Kreditanstalt tinian and Brazilian supplements to its summary of
two years ago. On May 30 1931 the Reichsbank foreign exchange restrictions. Commenting on
the
bad approximately rm. 2,390,300,000 in gold. The Argentine situation the Bank states: "In view
of
heavy decline in its gold holdings last week is believed the recent trade agreement completed
between Engto be due to repayment of the Gold Discount Bank land and Argentina we believe the exchange
situation
credit. This is a dollar credit and the Reichsbank should be carefully watched by American exporters
.
obtained the dollars at a discount which effected a One of the provisions of this agreement allocates
to
great saving. The German commercial creditors English account exchange equivalent to England'
s
here and abroad have expressed great dissatisfaction purchases from the Argentine less a small deductio
n
that this operation should have been consumated at for Argentina's external debt service. This of
course
a time when the Reichsbank has arbitrarily forced will reduce exchange available for nationals of other
on the foreign creditors the acceptance of a mora- countries." The agreement has not yet been
ratified
torium. Several itens relating to the Reichsbank by the Argentine Congress, but ratificati
on will
moratorium and its effects on the future of German doubtless be effected within a very short time.
foreign credit and exchange will be found on other A British commission to make effective mutual trade
pages. The Reichsbank's ratio now stands at the agreements has just landed in Buenos Aires.
extreme low of 10.6%, which compares with 12.9%
Argentine paper pesos closed on Friday nominally
on June 7 and with 25.1% on June 15 1932.
at 31% for bankers' sight bills, against 301
4 on FriThe London check rate on Paris closed on Friday day of last week; cable transfers at 32.00, against
at 86.40, against 86.10 on Friday of last week. In 31.10. Brazilian milreis are nominally quoted 7.95
New York sight bills on the French centre finished for bankers' sight bills and 8.00 for cable transfers,
on Friday at 4.873, against 4.74 on Friday of last against 7.95 and 8.00. Chilean exchange is nomiweek; cable transfers at 4.873/2, against 4.7432, and nally quoted at 63/b against 63/s. Peru is nominal at
commercial sight bills at 4.87, against 4.733. 19.25, against 19.25.
E
E
Financial Chronicle
Volume 136
4331
European Politics and the Disarmament
Impasse.
The return of Ambassador Norman H. Davis to
this country, presumably to report to President
Roosevelt about the Disarmament Conference, raises
the question whether there is longer any hope for
the cause to which Mr. Davis has devoted himself.
By a curious coincidence, the optimism which Mr.
Davis expressed on his arrival was completely negatived by an event of which he apparently was not
aware. For the past six months or more he
has been an outstanding force at Geneva, exerting
himself to reconcile conflicting opinions and programs, and persevering in his task in spite of repeated rebuffs and disheartening failures. The announcement on Monday, however, by Arthur Henderson,
President of the Disarmament Conference, that
URSUANT to the requirements of Section 522 preoccupation
with the World Economic Conference
of the Tariff Act of 1922, the Federal Reserve
to hold a meeting of the Bureau,
inadvisable
it
made
Bank is now certifying daily to the Secretary of the
committee, of the Conference at London
special
or
Treasury the buying rate for cable transfers in the
as had been planned, made it clear that the work
different countries of the world. We give below a
of the Conference had been sidetracked, and on Frirecord for the week just passed:
day it was announced that the Commission, when
FOREIGN EXCHANGE RATES CERTIFIED BY FEDERAL RESERVE
it meets at Geneva on July 3, will do nothing except
BANKS TO TREASURY UNDER TARIFF ACT OF 1922.
to postpone further discussion until October.
JUNE 17 1933 TO JUNE 23 1933. INCLUSIVE.
The reasons for failure to accomplish anything of
Noon Buying Rate for Cable Transfers Os New York.
thus far are not hard to discover. Howimportance
Value 492 United Slates Money.
Country and M
UnIt.
a reduction and limitation of armadesirable
ever
23.
June
22.
June
21.
Joins
June 17. June 19. .1147143 20.
ments might seem to be, there has never in fact been
$
$
$
$
$
EUROPE$
.138000* .139750* .140000 .140200 .141208* .140000*
Austria,schilling
any real prospect of an agreement among the nations
167766 .170569 .171781 .170800 .173881 .173518
Belgium, belga
008050* .008066 .008400 .008366 .008000 .008500
Bulgaria, lev
of the world on a subject which touched vitally their
Czechoslovakia, kron. .036014 .036435 .036725 .036641 .037157 .037142
181254 .184716 .186125 .185058 .188409 .187900
Denmark, krone
national interests, their ambitions and rivalries, and
England, pound
4.069000 4.141500 4.178000 4.157750 4.228839 4.215666
sterling
.018575
.018633
.018450
.018308
ideas of what was necessary for their security.
.018316
their
.018020
_
_
markka._
Finland,
047223 .048125 .048401 .048075 .049040 .048771
France. franc
responsibility for failure is obviously
principal
The
Germany, reichsmark 285653 .290583 .292277 .291066 .296216 .295400
006855 .006892 .006985 .006939 .007004 .007029
Greece, drachma
483050 .491075 .494057 .491023 .500164 .498016
France, which has systematically opHolland. guilder
upon
laid
be
to
215866* .216666* .218375* .216250 .218750* .219166*
Hungary. Pengo
062790 .063951 .064421 .064121 .065286 .065020
Italy, lira
proposal that did not leave it the
vital
posed
every
205600 .201030 .211016 .209516 .213318 .212461
Norway, krone
138250 .139375 .140125 .139875 .140333 .141166
Poland, zloty
Power on the Continent or failed
military
supreme
.037205 .037693 .038200 .038075 .038262 .038440
Portugal, escudo
007350 .007450 .007475 .007437 .007700 .007587
Rumania, Mu
to aid in safeguarding its
Powers
to
other
bind
102439 .103925 .104261 .103900 .105128 .101361
Spain, peseta
209315 .214088 .215076 .213923 .217590 .216961
Sweden, krona
of France has inspired
example
the
but
security,
.239064
.240046
.236123
.232200 .236309 .237368
Switzerland, franc_
.016525 .016725 .016875 .016712 .016966 .017112
Yugoslavia, dinar
other nations, and the opposition that has been creASIAChinaated by France on a large scale has been duplicated
.255833 .255416 .266250 .262916 .266250 .261666
Chefoo dollar
.255833 .255416 .266250 .262916 .266250 .261666
Hankow dollar _
in various other quarters on a smaller scale. First
.257500 .258000 .266718 .262812 .286250 .262031
Shanghai dollar
255833 .255416 .266250 .262916 .266250 .261666
Tientsin dollar
and last, almost every nation represented at Geneva
.286875 .290250 .297187 .293437 .295625 .293125
Hong Kong dollar
.305210 .310625 .313350 .312850 .317437 .316400
India, rupee
.281400
.281250
.256625
.254275
.263500
.265500
has objected vigorously to some proposal that was
Japan, yen
Singapore (8.8.) dollar .471250 .477500 .484375 .483750 .487500 .490000
NORTH AMER.vital to real disarmament. When the Commission
.885260 .895625 .900052 .897239 .907239 .903281
Canada, dollar
.999212 .999212 .999212 .999162 .999212 .999212
Cuba, peso
on the eve of the meeting of the Economic
adjourned
Mexico, peso (silver). .275733 .276600 .276440 .276440 .276300 .275233
Newfoundland, dollar .882750 .892750 .897250 .894625 .905125 .900875
the United States had gone so far as to
Conference,
SOUTH AMER.Argentina, Veen (gold) .702118* .710589 .713771 .710341 .726039* .724800*
control of armaments, and had
international
accept
Brazil, mitre's
076350* .076340* .076362 .076350 .076350* .076350*
Chile. peso
075000 .075000* .075000 .075000 .078000* .078000'
and co-operation in the event
consultation
to
agreed
.558666 .556666* .556866 .563333* .571666 .578333"
GrUanay. bale
Colombia, peso
.862100 .862100* .862100 .862100* .862100 .862100'
which seemed to imply
terms
on
war
a
of
of
threat
OTHERAustralia, pound
3.240000 3.296666 3.322083 3.305833 3.367500 3.349166
an abandonment of neutrality, but even these extraNew Zealand, pound_ 3.248333 3.305000 3.330416 3.314166 3.375833 3.357500
South % Melt. pound_ 4.021875 4.094375 4.130625 4.110000 4.180000 4.167500
ordinary concessions did not satisfy France, and
*Nominal rates: firm rates not available.
French objections were still being lodged against
the British disarmament proposals because Great
HE following table indicates the amount of gold Britain refused to commit itself to sanctions, or acbullion in the principal European banks as of cept a proposed definition of an aggressor, or allow
June 22 1933, together with comparisons as of the a comprehensive supervision of armaments.
corresponding dates in the previous four years:
Mr. Davis's patience and skill in coping with these
difficulties
merit praise, but the difficulties them1933.
1932.
1931.
1930.
1929.
Yanks oftoo sharp and fundamental to be overwere
selves
£
.£
£
£
136,476,383 164,013,586 157,773.290 160.207,077
England-other situations, in some respects
come.
Meantime
653,147,938 452,202.078 352,039.122 292,932.795
Frances_._
60,653,050 123,456,850
36,601,650
GerMany b.
85,259.000
more
serious,
developed out of recent political
have
90,182.000
96,966,000
98,834,000 102.442,000
Spain
50,489,000
60,960,000
56,301,000
55,434,000
Italy
make it highly improbable that
that
Europe
in
events
81,032,000
39,873,000
35,994,000
Netherl*nds
36,400,000
40,935,000
34,300,000
72,875.000
28,530.000
Nat. Belg.
armament reduction or limitation will in the im27,207,000
85,424,000
23.156,000
Switzerland
19,845,000
13,291,000
13,497,000
11,444,000
Sweden....
12.978.000
mediate future be favorably considered. The most
9,570.000
8,031,000
9.591,000
9,551,000
Denmark
6,561.000
8,155,000
8,132.000
8,143.000
Norway.._ _
important of these situations are found in the course
1,252,582,295 1.242,875,341 063,312,714 913,064,062 811,773,872
Total week
on.
n11
,. 1 omnn,n
_
of the Hitler Government in Germany, the acute
the
in
the
controversy between Germany and Austria, the reof
reported
as
holdings
France
gold
of
new
Bank
of
form
the
are
a These
statement. b Gold holdings of the Bank of Germany are exclusive of gold held
vival of alleged plans for a union or federation of
abroad, the amount of which the present year Is £1,078,450.
XCHANGE on the Far Eastern countries is
generally firmer owing to the higher quotations
of sterling and all the major currencies with respect
to the United States dollar. The Chinese units
are firm owing to the higher prices prevailing for
silver. The Indian rupee moves directly with sterling, to which it is anchored at the fixed rate of
is. 6d. per rupee.
Closing quotations for yen checks yesterday were
263/2, against 253/ on Friday of last week. Hong
Kong closed at 293 © 29 13-16, against 29 7-16 ©
3 @
293/2; Shanghai at 26 @ 26 11-16, against 264
263/2; Manila at 50, against 50; Singapore at 49,
against 47%; Bombay at 313/8, against 30%, and
Calcutta at 311/8, against 30%.
E
P
T
.
i§?§§§§§§§&
TnA 1 ORA GAO ATA
nen .11.40 AIA
.2.7
01.11 C.1 ..s-st
4332
Financial Chronicle
June 24 1933
some of the States of Eastern Europe, and the four- to
speculation as to whether Germany may not plan
Power pact recently entered into by Italy, Germany, to
invade some part of the country.
Great Britain and France.
The Austro-German imbroglio, howeiYer, needs
to
In a conversation which Ambassador Davis had at be
observed in the light of plans, or alleged plans,
Paris last Sunday .with Premier Daladier and the for
merging some of the Central and Eastern EuroBritish Under-Secretary for Foreign Affairs, the pean
States. It is best to reserve judgment for the
French "stated clearly," according to the London
moment regarding the reported plan of France
and
correspondent of the New York "Herald Tribune," Italy
to restore the old Austro-Hungarian Empire,
"that they would sacrifice no gun,tank or plane with- but
of the existence of the idea there can be no reaout further evidence that the new Germany intended sonabl
e doubt. In 1931, when France,after coercing
a pacifist and stable role." The press censorship
Austria into accepting its terms in the Kreditanstal
t
which exists in Germany makes it difficult to tell crisis,
followed its success by demonstrating its
from the news dispatches whether the consolidation financ
ial superiority to Italy in Hungary and Jugoof Nazi power which goes steadily on indicates any- slavia
, it was currently rumored that France was
thing particularly aggressive in foreign policy. The revivi
ng an old dream of re-establishing the Austro
suggestion made on June 16 by Dr. Alfred HugenHungarian Empire under a Hapsburg ruler, with
the
berg, Minister of Economics and Agriculture, that
special object, among others, of thereby preven
ting
one of the ways to enable Germany to pay her interpermanently any agitation of an Anschluss. When,
national debts would be to "give Germany again
accordingly, the New York "Times," in its issue
of
colonial domain in Africa," while another would be
June 16, reported, on the authority of the Associ
ated
to "open up" to it "territories for the settlement of
Press, the receipt in this country of privat cab!.
e
its active race," in either case with the object of enmessages telling of "a move backed by France, Italy
abling it to undertake public works on a large scale,
and Czechoslovakia to induce King Alexan
der of
occasioned temporary anxiety lest it meant a set
Jugoslavia to settle the Croatian question in such
a
purpose on the part of the Reich to expand its terriway as to make possible restoration of the
Austrotory in Europe and recover some of its forme
r Hungarian monarchy," it merely made
more precise
colonial possessions in Africa. It was pre,ently exa project which is believed to have been entertained
plained, however, that Dr. Hugenberg spoke only
for a number of years by France. Press dispat
che;
for himself and without official authority, and
the on Wednesday and Friday represented
Mussolini as
arbitrary suppression on Wednesday of this week of
actively interesting himself in the idea of a union
Dr. Hugenberg's private armed force of young
between Austria and Hungary,and while the reports
Nationalists known as the German National Battle
have been semi-officially denied, it has been known
Ring suggests that the influence of the Nationalist
for some time that Mussolini had in mind some
leader with the Hitler Government is waning.
union or federation of States in southeastern Europe
French fear of Germany, to the extent that it is not
with, presumably, some special relation to Italy in
congenital, appears to be based, as far as domestic
politics or trade.
affairs are concerned, upon the fact that the Hitler
On the surface, nothing seems less likely than that
dictatorship is obviously strengthening its hold, and
the old Austria-Hungary should soon be restor
ed.
that a controlled and disciplined Reich will hardly
The old Empire served a useful purpos
e which the
be disposed to submit to what it regards as diswar destroyed, and much of the disorder
and ecocrimination. That the Hitler Government is firmly
nomic chaos which have appeared in Easter
n Europe
in the saddle was strikingly evidenced by the sudden
have been due to the absence of the politic
al and
suppression of the hitherto powerful Socialist party
economic union, with obvious commercial
adon Thursday. The reported remark of Baron von
vantages, which the Empire offered. The mere menNeurath, German Foreign Minister, to Arthur Hention of Austria and Hungary, however,
calls up to
deri_on on Monday, to the effect that Germany was
the succession States the memory of
States that
not prepared to acquiesce in an indefinite postponewere enemies in the World War, the Little Enten
te
ment of its demand for gradual disarmament, shows
can apparently be counted upon to oppose
any plan
that on the disarmament issue Germany means to
of federation that would change its
status to its dismaintain a positive stand.
advantage, and neither the Tardieu plan of Balka
a
n
The violent controversy that has developed befederation for commercial purposes, nor other simtween Germany and Austria is a curious example of
ilar proposals that have been brought forwa
rd since,
the rapidity with which national friendships can be
have commended themselves to the States affected.
transformed into enmities. A year ago the echos
Yet it is peculiarly significant of the profou
nd fear
of the proposed customs union, or Anschluss, beof Germany which possesses France,
and of the extween the two countries which the League, under
treme unlikelihood of any practical advance toward
strong French pressure, put under the ban were still
disarmament as long as the fear exists, that the
resounding, with Premier Mussolini represented a
restoration of a large part of Central and Eastern
favoring the union. The feeling was rather wideEurope to the political condition which the Allies
spread outside of France that the proposed union
labored to destroy forever should be seriously looked
would be a good thing commercially and industrially
upon as a desirable means of preventing a customs
for Austria, whatever advantages it might have for
union between Germany and the little State
of Austhe Reich. The Hitler victory in Germany, however.
tria, and that Czechoslovakia, a prosperous State
followed shortly by attempts to carry the Nazi cause
which owes its existence to the war, should now be
into Austria by flamboyant and even forcible means,
reported as falling in with the idea.
roused Chancellor Dollfuss to unwonted energy, and
The relation of the four-Power pact to the Austroin the face of heavy odds he has not only succeeded
Hungarian scheme and Eastern European condition;
in administering a serious check to the Nazi movegenerally, as well as to peace and disarmament,
is a
ment, but in so doing has also embroiled Austria
matter of which one would like to know more.
At
in a controversy with the Reich so bitter as to lead the
moment the position of the pact seems anomalous.
Volume 136
Financial Chronicle
4333
The fact that Germany is one of its members seems expedient to employ an expert whose duty it will
to detach Germany definitely from the Anschluss be to formulate a proper code and then to see that
idea and force it, in that respect, to accept the de- its provisions are strictly adhered to.
feat which France, and perhaps Great Britain and
The new Federal statute is very arbitrary and
Italy, desired, but Germany can hardly rest content exacting. While friction may arise in its adminwith the arrangement if it really means to seek terri- istration, early differences are likely soon to be adtorial expansion in Europe; and it will have to be justed, as there is a general disposition not to retard
given a chance to expand somewhere, for its growing recovery, but rather to give the new Federal
population is already crowding the Reich. On the machinery a fair chance to function.
other hand, the fact that other Powers are invited to
First effect of the Act is somewhat chaotic. Inadhere to the pact will, if accepted, offset any re- vestors are in some respects in a position similar
strictions that the pact imposes upon its original to that from which labor has been suffering. While
members. One of the professed objects of the pact labor has been prostrate from lack of work, capital
was support for disarmament, but it has not pre- also to an extent has been unemployed, although
vented a breakdown at Geneva and a complete dead- invested, and as a consequence a great many divilock between Great Britain and France. The re- dents have been omitted, thus sadly curtailing
port that Premier Daladier and Premier Mussolini private incomes.
• have planned an early meeting, perhaps of a more
Revival of industrial activity will provide labor
or less secret character, gives color to the sugges- with work, and the new law undertakes to give the
tion that the primary purpose of the pact was to worker a fair wage. But when invested capital is
facilitate the adjustment of differences between able to show a return through the distribution of
Italy and France, particularly those relating to dividends,"provisions are made for increased taxacolonial and naval policies.
tion at the source of earnings which will tend to
There are evidences that some large political proj- curtail the rate of dividends.
ects are taking shape in Europe. They are vague
Organized labor, protected by the Government,
and ill-defined as yet, but they connect themselves will be assured of a good wage, whereas the Governwith the "united front" of which.the American dele- ment, through taxation of industry, will restrain
gates at the Economic Conference have been made or curtail distribution of profits in the way of diviaware, with the recurring talk of reviving the Dual dends to shareholders. However, anxiety of stockMonarchy or something akin to it, with the relega- holders to have dividends restored, even at a modtion of disarmament to the field of academic debate, erate rate, makes the investor as desirous of procurand with the possible implications of the four-Power ing some return on his investment as is the laborer
pact. We may expect these projects to develop the to obtain work and a wage, but the distribution of
more rapidly if the Economic Conference fails to earnings in payment of wages will come first.
secure effective international action on economic
Then the Government will take its toll from indu-lines, for the political situation is too unstable to try before any distribution of profits can be
made
continue indefinitely as it i.
to owners of industrial plants.
The question of tariffs enters into the proposition,
Industry Prepares for the New Deal.
affecting, for instance, such commodities as anthraWith the extra session of Congress adjourned, the cite and copper, which had to meet foreign combusiness world is beginning to perk up, to look petition before the Recovery Act was passed, and
around, take soundings, and try to ascertain just which under conditions now imposed may be fur"where it is at." The situation is something like ther handicapped.
the spectacle afforded by a corn field after a torTime will be required to study any defects in the
nado has swept over it. The stalks of corn have Recovery Act, as disclosed by experience, and then
been laid low, flat on the ground, giving the appear- to apply remedial amendments.
ance that the prospective crop has been destroyed.
The flag has been dropped; the field of horses are
But the farmer knows full well .that a few days of off; some may be far behind in the race, which will
bright sunshine will bring most of the fallen stalks call for the removal of handicaps disclosed by
to a natural and perpendicular position, and that in the test.
due time there will be the "full corn in the ear,"
ready for the harvest.
The Course of the Bond Market.
Industry and business have been flayed, but
Bond
prices
have moved rather irregularly this week, sorne
the
storm has passed; warm sunshine and proper mois- issues pushing into new high ground and others selling off
slightly. While the average of 120 domestic bonds advanced
ture, with the aid of scientific methods. will,
it is fractionally to a new high, the market
was on the whole a
confidently believed, build industry anew and
place little nervous, due to the uncertainties of the outcome of
it upon a firmer foundation, thus paving the way the Economic Conference now
'reefing in London. The
for a revival in all other branches of trade
activity. stock and speculative bond markets suffered considerable
No one is inclined to sulk. The President has, reaction when word came out a week ago that the dollar and
made it clear that employers and employees, having pound sterling were to be stabilized during the meeting of
due regard for the interests of each other, must the Conference. At the same time, high grade bonds remained strong. A prompt denial of any intention to stabilize
work in harmony, which means that they must ap- the dollar for a good
while sent the markets back to their
proach the settlement of differences with a spirit recent highs on Tuesday of this week. While stocks
have
of conciliation, being willing to make conce sions in since declined considerably, bonds have held up very well
order to effect and preserve peace for the benefit of in price.
The Federal Reserve added another $22,000,000 of governthemselves and the entire country.
ment bonds to its holdings this week and prices of Treasury
The first steps to be taken under the industrial issues advanced fractionally, being
very close to their high
measure are the adoption of codes by trade groups. of February. Money in circulation contracted by an addiThis has opened the door for a new avocation, and tional $27,000,000, bringing the total outstanding amount
it is probable that each trade group will find it down where it was in January. Short term interest rates
were sow ewhat easier.
Financial Chronicle
4334
June 24 1933
of a further wage
Utility bonds displayed a good tone during the week, particularly net earnings. The possibility
however was not
strength in speculative issues being particularly noticeable reduction next Fall was eliminated. This,
RS being probably indicative
rather
but
,
bearishly
interpreted
apfluctuation
some
in the first few days. On Thursday
peared when the stock market lost some ground, but down- of assurance by the Government of continued improvement
which would remove the
ward changes were confined to fractional amounts for the in railroad traffic and earnings,
wage
for
a
reduction.
evinecessity
as
most part. Net changes for the week are small,
In a week of erratic stock price movements, industrial
denced by the following:- Consumers Power 43s, 1958
bonds
generally acted well, though there was some price
%
1023
from
1965,
5s,
from 983- to 99, American Tel. & Tel.
advances by speculative issues.
to 104, Ohio Edison 5s, 1960, from 87% to 88%, Nevada irregularity following sharp
Bethlehem 5s, 1942, gaining 3
feature,
a
were
strong
Steels
Interand
59%,
to
from
603.
California Electric 5s, 1956,
1956, making a new high at
5s,
Steel
and
National
points
national Tel. & Tel. 43.s, 1952,from 41% to 46.
to fractionally. higher.
steady
were
Oils
up
3%.
93%,
range
small
a
within
moved
bonds
railroad
High grade
unchanged for the
virtually
were
issues
and
rubber
Tire
having
issues
best
the
this week, price fluctuations for some of
and road-building programs
been as follows: Union Pacific 4s, 1947, from 983 to 98%, week. Talk of public works
bonds, Penn-Dixie 6s, 1941,
and Chesapeake & Ohio 434s, 1992, from 1013 to 1023.. brought activity to cement
3
to
4
63
points
66
advancing
•
%
grade
Moderately higher prices were recorded for medium
The foreign bond market last week was somewhat irreguissues.
In the South American group, with the exception of
lar.
from
advanced
6134
New York Central 43s, 2013,
issues and a continuation of the
to 63, and Pittsburgh & West Virginia 434s, 1960, from 59 slight declines in Colombian
there was little change. Gerbonds,
in
Argentine
strength
scored
issues
traded
inactively
to 623. Certain of the
were off several points, with irregular
rather large gains, as Nashville, Chattanooga & St. Louis 4s, man Governments
in this group. Belgian, Danish
1978, which went from 75% to 80. The largest advances trends in the other issues
slightly weaker but French and
were
issues
Australian
and
speculative
highly
were recorded by the lower-priced, more
Kingdom bonds showed little movement, as did the •
United
5s,
Western
Grande
Rio
&
Denver
instance,
for
bonds,
bonds responded to the depreciation
1955, from 283. to 33%, and Chicago, Milwaukee, St. Paul Japanese issues. Swiss
several points, while Norwegian and
a
by
rise
of
dollar
the
of
for
& Pacific 5s, 1975, from 353. to 4158. Railroad news
an upward tendency.
also
showed
issues
Cuban
carloadings
in
gains
further
g,
encouragin
was
the most part
prices and bond yield averages
bond
computed
Moody's
and
weeks
previous
having been reported as compared with
are given in the tables below:
earnings,
May
in
increases
large
and
year,
last
week
same
the
efoopro BOND YIELD AVERACIES.I
MOODY'S BOND PRICES.*
(Based en Individual Clartne Prices.)
99 20
86.64
55.99
69.49
87.17
0000
June 23_
22_ _
21_ _
20_
10-_
17_
June 16_ _
15..
14_ _
13..
12_ _
10_
8__
5._
Weekly
May 26__
19._
12._
Apr, 28._
21._
I4__
13_
Feb. 24
17
10
3
Jan. 27..
13_
6..
Low 1933
High 1933
Low 1932
High 1932
Yr. A Q0June23'32
2 Yes.Ago
June24'31
120 Demesnes by &UMW
Aaa.
AG.
A.
5.57
5.59
5.60
5.60
5.63
5.66
5.66
5.65
5.64
5.63
.5.64
5.66
5.67
5.68
5.69
5.71
5.70
5.72
5.73
5.77
4.42
4.42
4.42
4.43
4.43
4.45
4.44
4.45
4.46
4.47
4.47
4.49
4.50,
4.49
4.50
4.51
4.50
4.51
4.52
4.52
5.05
5.10
5.13
5.12
5.15
5.16
5.15
5.15
5.14
5.13
5.13
5.11
5.11
5.10
5.10
5.12
5.13
5.13
5.14
5.17
5.79
5.87
5.98
6.24
6.47
6.70
4.51
4.55
4.61
4.79
4.77
4.89
5.19
5.26
5.38
5.62
5.77
5.93
6.61
6.72
6.69
6.40
6.29
6.70
6 32
6 10
5 91
6.81
5.95
5.96
6.89
6.07
5.57
6.75
5.99
8.74
4.75
4.76
4.78
4.65
4.61
4.81
467
4.48
440
4.43
4.42
4.43
442
4.46
4.39
4.91
4.51
5.7.5
5.73
5.79
5.76
5.58
5.48
5.76
5.47
636
5.23
5.24
5.25
529
5.26
5.37
5.05
5.96
5.44
7.03
7.92
5.38
8.55
5.52
4.36
4.80
120 Demostle.s
BY Groups.
Baa.
RR.
6.96
6.98
6.99
6.99
7.06
7.12
7.13
7.09
7.07
7.04
7.07
7.12
7.16
7.20
7.25
7.27
7.24
7.25
7.29
7.34
5.63
5.65
5.67
5.67
5.72
5.76
5.75
5.74
5.73
5.71
5.72
5.73
5.71
5.69
5.71
.72
.71
.72
.75
.81
P. U. •Indus.
ao
roedent.
000000OOOOO 0000p00g000=00 0www0ww00p.00000000$.0
o:q0ml464.-b 0.;06M;o;o00g.0000;ob.MOomM
ki4Db.60.L.:.060Mi.6w;
wa..ww.amba...4wam00cw0vw0.4..40=
65 53 106 60
43.92
04t000
76.25
00000000
r.
0
-400 00000000
tzwwwwmt4wwwww.o.
5;-,
.1.
c41,D;wWio W»kbliAiDeok6WWettb6
ww.t.
w...ovw...wwwwww
90.55
AU
120
1933
DomesDaily
Averages
Mar.24_
17._
=
63.58
X00000.000.0
00.0
. ww!400.N00.0.0.000 .
100.00
99.84
99.52
101.64
102.30
99.04
102.98
10451
105 89
10537
105.54
105 03
105.54
104.85
106.07
97.47
103.99
85.61
W
0 V
0 .
i
,
0
59.72
75.61
74.46
74.77
77.88
79.11
74.87
78.77
81 30
8323
8238
83 11
82 99
83.85
81.66
87.96
74.15
82.62
57.57
68.04 84.47
66.98 83.35
65.62 81.66
62.56 78.55
58.32 74.36
55.73 71.38
nge Clo sed.
54.80 71.09
53.28 70.62
53.88 71.38
57.24 73.85
58.52 74.57
54.18 69.59
57 98 73.15
60.60 75.60
82.48 77.77
61.34 76.25
62 95 76.25
63.11 75.09
64.31 75.71
61.56 71.96
72.06 87.17
53.16 69.59
67.86 78.99
37.94 47.58
Ist.t.nWt.w
81.78
80.72
79.34
76.67
74.46
72.16
Excite
73.95
72.65
72.85
75.82
77.33
72.06
76 25
79 45
81 54
80 49
81.18
81.07
81.90
79.34
84.60
71.87
78.55
54.43
93.28
92.25
90.55
87.30
85.35
83.35
Stock
85.87
85.10
8.5.48
87.83
89.17
85.48
89.31
90.83
9268
92.53
92.39
91.81
92.25
90.69
95.33
82.99
89.72
71.38
RR.
87.17
86.91
86.64
86.64
85.99
85 48
85.61
85.74
85.87
86.12
85.99
85.87
86.12
86.38
86.12
85.99
86.12
85.99
85.61
84.85
vm00000;14.5;n2o,g
WwWno0C
wwwW
85.10 103.99
84.10 103.32
82.74 102.30
79.68 99.36
77.11 99.68
74.67 97.78
72.06
71.87
71.77
71.77
71.09
70.52
70.43
70.81
71.00
71.29
71.00
70.52
70.15
69.77
69.31
69.13
69.40
69.31
68.94
68.9
t..3.400400
.000.
00..
coNn.-.vmWaqui0.0,400t•.
84.60
84.47
84.35
84.10
83.97
83.60
83.60
83.72
83.85
83.85
83.72
83.60
83.48
83.48
83.60
83.11
83.23
82.87
82.87
82.02
1.0000..pw
95.33
94.58
94.14
94.29
93.85
93.70
93.85
93.85
93.99
94.14
94.14
94.43
94.43
94.58
94.58
94.29
94.14
94.14
93.99
93.55
P. U. Indus.
w
a
5
3
2
1
WeeklyMay 26
19
12
5
Apr. 28
21
14
13
7
1
Dar.24
17
3
Feb. 24
17
10
3
Ian. 27
20
13
6
MO 1933
'..0sv 1933
ligh 1932
..ow 1932
Year A sorune 23 1932
Two Years'teem,.24 tom
105.54
105.54
105.54
105.37
105.37
105.03
105.20
105.03
104.85
104.68
104.68
104.33
104.16
104.33
104.16
103.99
104.16
1)3.99
10,3.82
103.82
87.96
87.69
87.56
87.56
87.17
86.77
86.77
86.91
87.04
87.17
87.04
88.77
86.64
86.51
86.38
86.12
86.25
85.99
85.87
85.35
120 Domealtes
by Groups.
*M0nWV
0.-.*01..p00.0t..0.0100Q1v.lco
C..00WO.p.000tvomm.0.,
..
cleieiNNNOiciNeiNC4
wwwww00000wooWWWWWWW0
June 23
22
21
20
19
17
I 16
15
14
13
12
10
9
8
7
AU
120 Domestics by Rattner.
120
DORMSBaa.
A.
Aa.
Alla.
Be.
0 0
0
W
1933
Daily
dreamt.
6.14
.84
7.39
6.20
.93
7.51
6.29
.07
7.67
6.58
.34
8.05
6.76
.73
8.63
6.96
.03
9.02
Excha ng Clo sed
6.70
.06
9.17
6.84
.11
9.42
6.83
.03
9.32
6.38
80
8.79
6.17
71
8.60
6.54
.22
9.27
86 616
86$
6.89
62
8.31
41
5.72
806
55
5.72
8.21
55
5.60
8.00
66
5.55
7.98
548
60
7.83
5.65
97
8.18
5.47
63
6.96
6.97
.22
9.44
5.59
7.41
30
7.66
12.98 1 49
w
w
(Based em Avows Yields).
11.31
98
7.17
7.61
14.00
7.23
63
5.04
5.88
7.25
5.94
5.95
5.96
5.96
5.97
6.01
6.00
5.98
5.97
5.96
5.98
6.00
6.05
6.07
6.04
6.11
6.10
6.09
6.11
6.14
5.13
5.15
5.17
5.18
5.20
5.21
5.23
5.23
5.23
5.22
5.22
5.24
5.26
5.28
5.29
5.31
5.30
5.33
5.34
6.36
9.51
9.42
9.43
9.43
9.51
9.56
9.68
9.58
9.60
9.57
9.69
9.80
9.78
9.71
9.77
9.78
9.72
9.62
9.62
9.68
5.40
5.47
6.59
5.81
4.93
6 10
9.66
10.08
10.07
9.89
10 2(i
10.58
6.05 10.83
6.22 11.02
6.20 10.80
6.03 10 76
5.98 ,
6.35 I 11.19
695 11.03
680 10.49
5.70 10.05
5 76 10.20
9.83
669
9.85
5.67
9.63
5.60
9.8
660
5.13 '9.42
6.35 11.19
9.86
5.75
8.11 15.83
31 years) and do not purport to show either
on the basis o one -Ideal" bond 414% coupon. maturing tu
• Mo.-These prices are computed from average yield
They merely serve to illustrate In a more comprehensive way the relative levels and the relative
of actual Price quotations.bond market.
the average level or the average movement
the
of
picture
movement of yield averages. the latter being the truer
bond pries,
Indexes was published In the "Chronicle" on Jan. 14 1933. page 222. For Moody's Index of
I The last complete list of bonds used to computing these
307.
Page
6
1932.
Feb
of
"Chronicle"
the
to
refer
by months back to 1928.
Election of Officers of Chicago Stock Exchange.
Chicago
In addition to the election of Michael J. O'Brien,
&
Webber
Paine,
of
firm
brokerage
the
resident partner of
5,
June
on
Exchange
Stock
Co., as President of the Chicago
following
noted in our issue of June 10, page 4003, the
ent
announcem
an
from
learn
elections were also made, we
issued by the Exchange:
Paul B. Skinner, re-elected Treasurer.
three years: Walter S.
Members of the Governing Committee to serve
Paul H. Davis, Edward
Aagaard. James E. Bennett, Thaddeus R. Benson.
C. Winter.
P. Molloy. Paul B. Skinner and Wallace
serve one year: M. Ralph
Members of the Governing Committee to
C. Renshaw.
Charles
and
Cleary, Kingman Douglass
S. Aagaard, M. Ralph
The three new Governors elected are Walter
Cleary and Kingman Douglass.
John J. Bryant Jr.,
Payne,
M.
are Harry
The three retiring Governors
and S. Louis Reinhardt.
An announcement issued by the Exchange on June 8
noted that on that day Wallace C. Winter was named VicePresident of the Exchange at the first meeting of the Governing Committee held since the annual election, June 5.
Officers reappointed are:
Harvey T. Hill, Executive Vice-President; Charles T. Atkinson. SecreAssistant
tary Emeritus; Jess Halsted, Secretary; Martin E. Nelson,
Secretary and Assistant Treasurer, and Kenneth L. Smith, Assistant
Secretary. Sidney L. Parry was appointed Assistant Secretary.
Volume of Trading on Chicago Stock Exchange Above
Year Ago.
Trading for the year on the Chicago Stock Exchange was
ahead of 1932 for the first time June 14 1933, we learn from
advices from Chicago, June 15. The volume to June 14 1933
amounted to 8,648,000 shares. Volume for last year to that
date was 8,591,000 shares.
Financial Chronicle
Volume 136
4335
Text of Glass-Steagall Bank Act Amending Federal Reserve and National Bank
Acts—Deposit Insurance Plan and Other Features.
Marked changes in the Federal Reserve and National
Bank Acts are effected in the newly enacted Glass-Steagall
bank bill, which, as we reported in our June 17 issue (page
4192) was signed June 16 by President Roosevelt following
the action of Congress in adopting the new legislation (as
agreed on in conference) on June 13. The deposit insurance
provisions of the newly enacted measure were referred to in
our item of a week ago, as well as other provisions embodied
in the new legislation. In the "United States News" of
June 17 it was pointed out that the new Act endeavors
through its sections to prevent the recurrence of practices
disclosed during investigations by the Senate Committee on
Banking. In at least seven ways, said the paper quoted,
it seeks to control the use of bank funds in speculation.
Further commenting on the provisions of the new Act the
"United States News" added:
Other sections of the hill seek to strengthen vulnerable spots in the
banking structure revealed by the banking crisis of February and March.
Most prominent of these features is the guarantee of deposits.
Temporary and Permanent Plan.
The guarantee provision has a temporary and a permanent phase.
The temporary guarantee will become effective on Jan. I of next year.
'unless the President sets an earlier date. It will apply to all banks which
are members of the Federal Reserve System and to all non-member banks
banks who apply which can obtain a certificate of solvency from the State
banking authorities and can meet the qualifications of an examination by
agents of the guarantee fund.
Deposits in these banks will be guaranteed up to a maximum amount of
$2,500. In order to raise the guarantee fund each bank Joining the fund
must pay In X of 1% of the deposits it has eligible for guarantee. Onehalf of this sum is payable immediately and the rest on call. If
any of
this money remains It shall be returned to the banks on July 1 1934, when
the permanent guarantee will displace the temporary system.
Permanent Insurance System.
The permanent guarantee to be managed by the Federal Deposit
Insurance Corporation, is to become effective on July 1 1934. unless
the
President sets an earlier date. The Corporation is to be presided
over by
a board of three members, consisting of the Comptroller of the Currency
and two others to be appointed by the President.
The Corporation will purchase, hold and liquidate assets of
closed
National and State member banks and insure the deposits of all
banks
which qualify for participation in the fund. Qualifications are the
same
as laid down for the termporary fund except that, after July 1 1936.
a bank
must be a member of the Federal Reserve System in order to
participate.
Scope of the Provisions.
After July 1 1934 the Corporation will insure the deposits
of all its
member banks 100% up to $10,000. The sum whereby any
deposit exceeds
$10,000 but does not exceed $50,000 will be insured
75%. The sum over
$50,000 will be insured 50%.
Funds with which to operate will be drawn by the
Corporation from
three sources. The Government will advance
$150,000,000 in the form
of a capital stock subscription. This stock will
draw dividends at the
rate of6% annually and the dividends shall be
cumulative.
Banks to Contribute.
The second source of funds will be from
participating banks. These
banks will be required to subscribe to an amount of
class A stock equal to
h of 1% of their deposit liabilities. This stock has no
vote but is entitled
to a 6% annual cumulative dividend up to 30%
of the Corporation's net
earnings.
Federal Reserve hanks will be the third source of funds
for the Corporation. Each Reserve bank is required to purchase
class B stock up
to one-half of its surplus. One-half of this sum will
be payable immediately and the remainder upon call.
No Interest on Demand Deposits.
Depositors are touched directly by one other section of the Act.
Member
banks are forbidden to pay interest on demand
deposits with certain
exceptions, such as public moneys. The Federal
Reserve Board, moreover. may set the rate of interest on time deposits.
Postal savings depositors may not draw out their deposits on leas
than 60 days' notice
without forfeiting the accrued interest.
Second in importance to the sections pro%iding
for deposit insurance
are those which attempt to curtail speculation with bank
funds. Divorce
of security affiliates from member banks is one of the
most frequently
mentioned of these provisions.
Divorce for Affiliates.
One year after the signing of the Act no member hank
may legally have
affiliate
which
Is engaged principally in the flotation, underwriting
an
and marketing of securities. The same requirement applies to
private
banks which receive deposits. Private banks which
elec. to continue
receiving deposits must submit to Federal or State examinations.
Measures are also included for the interim control of
affiliates of all
member banks. Full reports, showing the relationship between the
banks
and their affiliates, must be submitted at least three times a year, and
they must submit to examination by agents of the Federal Reserve Bank
of the district.
Funds Available to Affiliates.
Moreover, not more than a sum equal to 10% of the capital stock
and
surplus of any member bank may be advanced to any of its affiliates.
The total advanced to all affiliates may not exceed 20% of the capital
stock and surplus,
In addition to these provisions for the divorce and control of affiliates
there are other sections intended to minimise speculation with bank funds.
Each Federal Reserve bank must keep itself advised on the loans and
investments of member banks in its district to ascertain whether there is
any undue use of bank credit in speculation. The Bank would report
such practices to the Federal Reserve Board which may suspend the
member bank after a hearing.
Loans Secured by Stocks and Bonds.
Another section seeking to control speculative activity permits the
Reserve Board on the affirmative vote of six members to set the percentage
of member bank capital and surplus in any Federal Reserve district which
the member banks in that district may have outstanding in loans secured
by stocks and bonds.
A third provision forbids member banks to accept funds which are to
be loaned to brokers. At present the member banks may take money
from outside interests with the understanding that the funds will be loaned
to brokers.
Interlocking Directorates.
Two other sections forbid interlocking directorates with security firms
or with brokers. The prohibition concerning security firms applies to
member banks, and that concerning brokerage houses applies to all banks
under the Clayton Act.
The aggregate of loans to any corporation and its subsidiaries may not
exceed 10% of a National bank's capital and surplus. The inclusion of
subsidiaries is a new feature. Loans to officers of member banks by the
member bank on whose staff the officer serves also are forbidden.
As signed by President Roosevelt, the text of the Act
follows:
[H. R. 56611
AN ACT
To provide for the safer and more effective use of the assets of banks,
to regulate inter-bank control, to prevent the undue diversion of
funds into speculative operations, and for other purposes.
Be it enacted by the Senate and House of Representative, of the United
States of America in Congress assembled, That the short title of this
Act shall be the "Banking Act of 1933."
Sec. 2. As used in this Act and in any provision of law amended
by this Act—
(a) The terms "banks," "National bank," "National banking association," "member bank," "board," "district," and "Reserve bank,"
shall have the meanings assigned to them in Section 1 of the Federal
Reserve Act, as amended.
(b) Except where otherwise specifically provided, the term "affiliate"
shall include any corporation, business trust, association, or other
similar organization—
(1) Of which a member bank, directly or indirectly, owns or controls
either a majority of the voting shares or more than 50 per centum of
the number of shares voted for the election of its directors, trustees, or
other persons exercising similar functions at the preceding election, or
controls In any manner the election of a majority of its directors, trustees,
or other persons exercising similar functions; or
(2) Of which control Is held, directly or indirectly, through stock
ownership or in any other manner, by the shareholders of a member
bank who own or control either a majority of the shares of such bank
or more than 50 per centum of the number of shares voted for the election of directors of such bank at the preceding election, or by trustees
for the benefit of the shareholders of any such bank; or
(3) Of which a majority of its directors, trustees, or other persons
exercising similar functions are directors of any one member bank.
(cI The term "holding company affiliate" shall include any corporation, business trust, association, or other similar organization—
(1) Which owns or controls, directly or indirectly, either a majority
of the shares of capital stock of a member bank or more than 50 per
centum of the number of shares voted for the election of directors of
any one bank at the preceding election, or controls in any manner the
election of a majority of the directors of any one bank; or
(2) For the benefit of whose shareholders or members all or substantially all the capital stock of a member bank is held by trustees.
Sec. 3. (a) The fourth paragraph after paragraph "Eighth" of
Section 4 of the Federal Reserve Act, as amended (U.S.C., Title 12,
Sec. 301), is amended to read as follows:
"Said board of directors shall administer the affairs of said bank
fairly and impartially and without discrimination In favor of or against
any member bank or banks and may, subject to the provisions of law
and the orders of the Federal Reserve Board, extend to each member
bank such discounts, advancements, and accommodations as may be
safely and reasonably made with due regard for the claims and demands
of other member banks, the maintenance of sound credit conditions,
and the accommodation of commerce, industry, and agriculture. The
Federal Reserve Board may prescribe regulatioas further defining within
the limitations of this Act the conditions under which discounts, advancements, and the accommodations may be extended to member
banks. Each Federal Reserve bank shall keep itself informed of the
general character and amount of the loans and investments of Its member
banks with a view to ascertaining whether undue use is being madeof
bank credit for the speculative carrying of or trading in securities,
real estate, or commodities, or for any other purposes inconsistent with
the maintenance of sound credit conditions; and,in determining so what
to grant or refuse advances, rediscounts or other credit accommodations,
the Federal Reserve bank shall give consideration to such information.
The Chairman of the Federal Reserve bank shall report to the Federal
Reserve Board any such undue use of bank credit by any member
bank, together with his recommendation. Whenever, In the judgment
of the Federal Reserve Board, any member bank is making such undue
use of bank credit, the Board may, in its discretion, after reasonable
notice and an opportunity for a hearing, suspend such bank from the
use of the credit facilities of the Federal Reserve System and may terminate myth suspension or may renew it from time to time."
(b) The paragra,th of Sec. 4 of the Federal Reserve Act, as amended
(U.S.C.. Title 12, Sec. 104), which commences with the words "The
Federal Reserve licard shall classify" is amended by inserting before
the period at the end thereof a colon and the following: "Provided,
That whenever any two or more member banks within the same Federal
Reserve district are affiliated with the same holding eompany affiliate,
participation by such member banks in any such nomination or election
shall be confined to one of such banks, which may be designated for the
purpose by such holding company affiliate."
Sec. 4. The first paragraph of Sec. 7 of the Federal Reserve Act,
as amended (U.S.C., Title 12, Sec. 289), Is amended. effective July 1
1932. to read as follows:
"After all necessary expenses of a Federal Reserve bank shall have
been paid or provided for, the stockholders shall be entitled to receive
an annual dividend of 6 per centum on the paid in capital stock, which
dividend shall be cumulative. After the aforesaid dividend claims have
4336
Financial Chronicle
been fully met, the net earnings shall be paid into the surplus fund of
the Federal Reserve bank."
Sec. 5. (a) The first paragraph of Sec. 9 of the Federal ReserveAct,
as amended (U.S.C., Title 12, Sec. 321; Supp. VI, Title 12, Sec. 321),
Is amended by inserting immediately after the words "United States"
a comma and the following: "including Morris Plan banks and other
incorporated banking institutions engaged in similar business."
(b) The second paragraph rf Sec. 9 of the Federal Reserve Ai t, as
amended, is amended by adding at the end thereof the following: "Provided, however, That rothing herein contained shall prevent any State
member bank from establishing and operating branches in the United
States or any dependency or insualr possession thereof or in any foreign
country, on the same terms and conditions and subject to the same
• limitations and restrictions as are applicable to the establishment of
branches by National banks."
(c) Sec. 9 of the Federal Reserve Act, as amended (U.S.C., Title
12, Secs. 321-331; Supp. VI, Title 12, Secs. 321-332), is further amended
by adding at the end thereof the following new paragraphs:
"Any mutual savings bank having no capital stock (including any
other banking institution the capital of which consists of weekly or
other time deposits which are segregated from all other deposits and
are regarded as capital stock for the purposes of taxation and the declaration of dividends), but having surplus and undivided profits not less
than the amount of capital required for the organization of a National
hank in the same place, may apply for and be admitted to membership
in the Federal Reserve System in the same manner and subject to the
same provisions of law as State banks and trust companies, except that
any such savings bank shall subscribe for capital stock of the Federal
Reserve bank in an amount equal to six-tenths of 1 per centum of its
total deposit liabilities as shown by the most recent report of examination of such savings bank preceding its admission to membership. Thereafter such subscription shall be adjusted semi-annually on the same
percentage basis in accordance with rules and regulations prescribed
by the Federal Reserve Board. If any such mutual savings bank
applying for membership is not permitted by the laws under which it
was organized to purchase stock in a Federal Reserve bank, it shall,
upon admission to the System, deposit with the Federal Reserve bank
an amount equal to the amount which it would have been required
to pay in on account of a subscription to capital stock. Thereafter
such deposit shall be adjusted semi-annually in the same manner as
subscriptions for stock. Such deposits shall be subject to the same
conditions with respect to repayment as amounts paid upon subscriptions
to capital stock by other member banks and the Federal Reserve bank
shall pay interest thereon at the same rate as dividends are actually
paid on outstanding shares of stock of such Feceral Reserve bank. If
the laws under which any such savings bank was organized be amended
so as to authorize mutual savings banks to subscribe for Federal Reserve bank stock, such savings bank shall thereupon subscribe for the
appropriate amount of stock in the Federal Reserve bank, and the
deposit hereinbefore provided for in lieu of payment upon capital stock
shall be applied upon such subscription. If the laws under which
any such savings bank was organized be not amended at the next a salon
of the Legislature following the admission of such savings bank to
membership so as to authorize mutual savings banks to purchase Federal
Reserve bank stock, or if such laws be so amended and such bank fail
within six months thereafter to purchase such stock, all of its rights
and privileges as a member bank shall be forfeited and its membership
in the Federal Reserve System shall be terminated in the manner prescribed elsewhere in this section with respect to State member banks and
trust companies. Each such mutual savings bank shall comply with
all the provisions of law applicable to State member banks and trust
companies, with the regulations of the Federal Reserve Board and with
the conditions of membership prescribed for such savings bank at the
Lime of admission to membership, except as otherwise hereinbefore provided with respect to capital stock.
"Each bank admitted to membership under this section shall obtain
from each of its affiliates other than member banks and furnish to the
Federal Reserve bank of its district and to the Federal Reserve Board
not less than three reports during each year. Such reports shall be
In such form as the Federal Reserve Board may prescribe, shall be verified by the oath or affirmation of the President or such other officer
as may be designated by the board of directors of such affiliate to verify
such reports, and shall disclose the information hereinafter provided
for as of dates identical with those fixed by the Federal Reserve Board
for reports of the condition of the affiliated member bank. Each such
report of an affiliate shall be transmitted as herein provided at the
same time as the corresponding report of the affiliated member bank,
except that the Federal Reserve Board may, in its discretion, extend
such time for good cause shown. Each such report shall contain such
Information as in the judgment of the Federal Reserve Board shall
be necessary to disclose fully the relations between such affiliate and
such bank and to enable the Board to inform itself as to the effect of
such relations upon the affairs of such bank. The reports of such
affiliates shall be published by the bank under the same conditions as
govern its own condition reports.
"Any such affiliated member bank may be required to obtain from
any such affiliate such additional reports as in the opinion of its Federal
Reserve bank or the Federal Reserve Board may be necessary in order
to obtain a full and complete knowledge of the condition of the affiliated
member bank. Such additional reports shall be transmitted to the
Federal Reserve bank and the Federal Reserve Board and shall be
In such form as the Federal Reserve Board may prescribe.
"Any such affiliated member bank which fails to obtain from any of
Its affiliates and furnish any report provided for by the two preceding
paragraphs of this section shall be subject to a penalty of $100 for each
day during which such failure continues, which, by direction of the
Federal Reserve Board, may be collected, by suit or otherwise, by the
Federal Resevre bank of the district in which such member bank is
located. For the purposes of this paragraph and the two preceding
paragraphs of this section, the term 'affiliate' shall include holding
company affiliates as well as other affiliates.
"State member banks shall be subject to the same limitations and
conditions with respect to the purchasing, selling, underwriting, and
holding of investment securities and stock as are applicable in the
case of National banks under paragraph 'Seventh' of Sec. 5136 of the
Revised Statutes, as amended.
"After one year from the date of the enactment of the Banking Act
of 1933, no certificate representing the stock of any State member
bank shall represent the stock of any other corporation, except a member bank or a corporation existing on the date this paragraph takes
effect engaged solely in holding the bank premises of such State member
bank, nor shall the ownership, sale, or trasnfer of any certificate representing the stock of any such bank be conditioned in any manner whatsoever upon the ownership, sale, or transfer of a certificate representing
the stock of any other corporation, except a member bank.
June 24 1933
"Each State member bank affiliated with a holding company affiliate
shall obtain from such holding company affiliate, within such time
as the Federal Reserve Board shall prescribe, an agreement that such
holding company affiliate shall be subject to the same conditions and
limitations as are applicable under Sec. 5144 of the Revised Statutes,
as amended, in the case of holding company affiliates of National banks.
A copy of each such agreement shall be filed with the Federal Reserve
Board. Upon the failure of a State member bank affiliated with a
holding company affiliate to obtain such an agreement within the time
so prescribed, the Federal Reserve Board shall require such bank to
surrender its stock in the Federal Reserve bank and to forfeit all rights
and privileges of membership in the Federal Reserve System as provided in this section. Whenever the Federal Reserve Board shall have
revoked the voting permit of any such holding company affiliate, the
Federal Reserve Board may, in its discretion, require any or all State
member banks affiliated with such holding company affiliate to surrender their stock in the Federal Reserve bank and to forfeit all rights
and privileges of membership in the Federal Reserve System as provided
In this section.
"In connection with examinations of State member banks, examiners
selected or approved by the Federal Reserve Board shall make such
examinations of the affairs of all affiliates of such banks as shall be
necessary to disclose fully the relations between such banks and their
affiliates and the effect of such relations upon the affairs of such banks.
The expense of examination of affiliates of any State member bank may,
in the discretion of the Federal Reserve Board, be assessed against such
bank and, when so assessed, shall be paid by such bank. In the event
of the refusal to give any information requested in the course of the
examination of any such affiliate, or in the event of the refusal to permit
such examination, or in the event of the refusal to pay any expense so
assessed, the Federal Reserve Board may, in its discretion, require
any or all State member banks affiliated with such affiliate to surrender
their stock in the Federal Reserve bank and to forfeit all rights and
privileges of membership in the Federal Reserve System, as provided
in this section."
Sec. 6. (a) The second paragraph of•Sec. 10 of the Federal Reserve •
Act, as amended (U.S.C., Title 12, Sec. 242), is amended to read as
follows:
"The Secretary of the Treasury and the Comptroller of the Currency shall be ineligible during the time they are in office and for two
years thereafter to hold any office, position, or employment in any
member bank. The appointive members of the Federal Reserve Board
shall be ineligible during the time they are in office and for two years
thereafter to hold any office, position, or employment in any member
bank, except that this restriction shall not apply to a member who has
served the full term for which he was appointed. Upon the expiration
of the term of any appointive member of the Federal Reserve Board
In office when this paragraph as amended takes effect, the President
shall fix the term of the successor to such member at not to exceed
twelve years, as designated by the President at the time of nomination,
but in such manner as to provide for the expiration of the term of not
more than one appointive member in any two-year period, and thereafter each appointive member shall hold office for a term of twelve
years from the expiration of the term of his predecessor. Of the six
Persons thus appointed, one shall be designated by the President as
Governor and one as Vice-Governor of the Federal Reserve Board.
The Governor of the Federal Reserve Board, subject to its supervision
shall be its active executive officer. Each member of the Federal
Reserve Board shall within fifteen days after notice of appointment make
and subscribe to the oath of office"
(h) The fourth paragraph of Sec. 10 of the Federal Reserve Act,
as amended (U.S.C., Title 12, Sec. 244),is amended to read as follows:
"The principal offices of the Board shall be in the District of Columbia.
At meetings of the Board the Secretary of the Treasury shall preside
as Chairman, and, in his absence, the Governor shall preside. In the
absence of both the Secretary of the Treasury and the Governor,the
Vice-Governor shall preside. In the absence of the Secretary of the
Treasury, the Governor, and the Vice-Governor, the Board shall elect
a member to act as Chairman pro tempore. The Board shall determine
and prescribe the manner in which its obligations shall be incurred
and its disbursements and expenses allowed and paid, and may leave
on deposit in the Federal Reserve banks the proceeds of assessments
levied upon them to defray its estimated expenses and the salaries of its
members and employees, whose employment, compensation, leave, and
expenses shall be governed solely by the provisions of this Act, specific
amendments thereof, and rules and regulations of the Board not inconsistent therewith; and funds derived from such assessments shall not
be construed to be Government funds or appropriated moneys No
member of the Federal Reserve Board shall be an officer or director
of any bank, banking institution, trust company, or Federal Reserve
bank or hold stock in any bank, banking institution, or trust company;
and before entering upon his duties as a member of the Federal Reserve
Board he shall certify under oath that he has complied with this requirement, and such certification shall be filed with the Secretary of the
Board. Whenever a vacancy shall occur, other than by expiration of
term, among the six members of the Federal Reserve Board appointed
by the President as above provided, a successor shall be appointed by
to
the President, by and with the advice and consent of the Senate,
fill such vacancy, and when appointed he shall hold office for the unexpired term of his predecessor."
as
Sec. 7. Paragraph (m) of Sec. 11 of the Federal Reserve Act,
amended (U.S.C., Title 12, Sec. 248), is amended to read as follows:
"(m) Upon the affirmative vote of note less than six of its members
the Federal Reserve Board shall have power to fix from time to time
for each Federal Reserve district the percentage of individual bank capital
and surplus which may be represented by loans secured by stock or bond
collateral made by member banks within such district, but no such
loan shall be made by any such bank to any person in an amount in
excess of 10 per centum of the unimpaired capital and surplus of such
bank. Any percentage so fixed by the Federal Reserve Board shall
be subject to change from time to time upon 10 days' notice, and it shall
be the duty of the Board to establish such percentages with a view to
preventing the undue use of bank loans for the speculative carrying of
securities. The Federal Reserve Board shall have power to direct any
member bank to refrain from further increase of its loans secured by
stock or bond collateral for any period up to one year under penalty
of suspension of all rediscount privileges at Federal Reserve banks."
Sec. 8. The Federal Reserve Act, as amended, is amended by inserting between Secs. 12 and 13 (U.S.C., Title 12, Secs. 261, 262, and
342), thereof the following new sections:
"Sec. 12A. (a) There is hereby created a Federal Open Market
Committee (hereinafter referred to as the 'Committee'), which shall
consist of as many members as there are Federal Reserve districts.
Each Federal Reserve bank by its board of directors shall annually
select one member of said committee. The meetings of said Corn-
Volume 136
Financial Chronicle
mittee shall be held at Washington, District of Columbia, at least four
times each year, upon the call of the Governor of the Federal Reserve
Board or at the request of any three members of the Committee, and,
in the discretion of the Board, may be attended by the members of the
Board.
"(b) No Federal Reserve bank shall engage in open-market operations under Sec. 14 of this Act except in accordance with regulations
adopted by the Federal Reserve Board. The Board shall consider,
adopt, and transmit to the Committee and to the several Federal Reserve banks regulations relating to the open-market transactions of
such banks and the relations of the Federal Reserve System with foreign
central or other foreign banks.
"(c) The time, character, and volume of all purchases and sales
of paper described in Sec. 14 of this Act as eligible for open-market
operations shall be governed with a view to accommodating commerce
and business and with regard to their bearing upon the general credit
situation of the country.
"(d) If any Federal Reserve bank shall decide not to participate
in open-market operations recommended and approved as provided in
paragraph (b) hereof, it shall file with the Chairman of the Committee
within thirty days a notice of its decision, and transmit a copy thereof
to the Federal Reserve Board.
"Sec. 12B. (a) There is hereby created a Federal Deposit Insurance Corporation (hereinafter referred to as the 'Corporation'), whose
duty it shall be to purchase, hold, and liquidate, as hereinafter provided, the assets of National banks which have been closed by action
of the Comptroller of the Currency, or by vote of their directors, and
the assets of State member banks which have been closed by action of
the appropriate State authorities, or by vote of their directors; and to
insure, as hereinafter provided, the deposits of all banks which are
entitled to the benefits of insurance under this section.
"(b) The management of the Corporation shall be vested in a board
of directors consisting of three members, one of whom shall be the
Comptroller of the Currency, and two of whom shall be citizens of the
United States to be appointed by the President, by and with the advice
and consent of the Senate. One of the appointive members shall be
the Chairman of the board of directors of the Corporation and not
more than two of the members of such board of directors shall be members
of the same political party. Each such appointive member shall hold
office for a term of six years and shall receive compensation at the
rate of $10,000 per annum, payable monthly out of the funds of the
Corporation, but the Comptroller of the Currency shall not receive
additional compensation for his services as such member.
"(c) There is hereby authorized to be appropriated, out of any money
In the Treasury not otherwise appropriated, the sum of $150,000,000,
which shall be available for payment by the Se( retary of the Treasury
for capital stock of the Corporation in an equal amount, which shall be
subscribed for by him on behalf of the United States. Payments upon
such subscription shall be subject to call in whole or in part by the
board of directors of the Corporation. Such stock shall be in addition
to the amount of capital stock required to be subscribed for by Federal
Reserve banks and member and non-member banks as hereinafter provided, and the United States shall be entitled to the payment of dividends on such stock to the same extent as member and non-member
banks are entitled to such payment on the class A stock of the Corporation held by them. Receipts for payments by the United States
for or on account of such stock shall be issued by the Corporation to the
Secretary of the Treasury and shall be evidence of the stock ownership
of the United States.
"(d) The capital stock of the Corporation shall be divided into shares
of $100 each. Certificates of stock of the Corporation shall be of two
classes—class A and class B. Class A stock shall be held by member
and non-member banks as hereinafter provided and they shall be entitled
to payment of dividends out of net earnings at the rate of 6 per centum
per annum on the capital stock paid in by them, which dividends shall
be cumulative, or to the extent of 30 per centum of such net earnings
In any one year, whichever amount shall be the greater, but such stock
shall have no vote at meetings of stockholders. Class B stock shall be
held by Federal Reserve banks only and shall not be entitled to the
payment of dividends. Every Federal Reserve bank shall subscribe
to shares of class B stock in the Corporation to an amount equal to one
half of the surplus of such bank on Jan. I 1933, and its subscriptions
shall be accompanied by a certified check payable to the Corporation
In an amount equal to one half of such subscription. The remainder
of such subscription shall be subject to call from time to time by the
board of directors upon 90 days' notice.
"(e) Every bank which is or which becomes a member of the Federal
Reserve System on or before July I 1934, shall take all steps necessary
to enable it to become a class A stockholder of the Corporation on or
before July 1 1934; and thereafter no State bank or trust company or
mutual savings bank shall be admitted to membership in the Federal
Reserve System until it becomes a class A stockholder of the Corporation,
no National bank in the continental United States shall be granted a
certificate by the Comptroller of the Currency authorizing it to commence the business of banking until it becomes a member of the Federal
Reserve System and a class A stockholder of the Corporation, and no
National bank in the continental United States for which a receiver or
conservator has been appointed shall be permitted to resume the transaction of its banking business until it becomes a class A stockholder of
the Corporation. Every member bank shall apply to the Corporation
for class A stock of the Corporation in an amount equal to one half
of 1 per centum of its total deposit liabilities as computed in accordance with regulations prescribed by the Federal Reserve Board; except
that in the case of a member bank organized after the date this section
takes effect, the amount of such class A stock applied for by such member bank during the first twelve months after its organization shall equal
5 per centum of its paid-up capital and surplus, and beginning after
the expiration such twelve months' period the amount of such class A
stock of such member bank shall be adjusted annually in the same manner
as in the case of other member banks. Upon receipt of such application
the Corporation shall request the Federal Reserve Board, in the case of
a State member bank, or the Comptroller of the Currency, in the case
of a National bank, to certify upon the basis of a thorough examination
of such bank whether or not the assets of the applying bank are adequate
to enable it to meet all of its liabilities to depositors and other creditors
as shown by the books of the bank; and the Federal Reserve Board
or the Comptroller of the Currency shall make such certification as
soon as practicable. If such certification be in the affirmative, the
Corporation shall grant such application and the applying bank shall
pay one half of its subscription in full and shall thereupon become a
class A stockholder of the Corporation: Provided, That no member
bank shall be required to make such payment or become a class A stockholder of the Corporation before July I 1934. The remainder of such
subscription shall be subject to call from time to time by the board of
directors of the Corporation. If such certification be in the negative,
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the Corporation shall deny such application. If any National bank
shall not have become a class A stockholder of the Corporation on or
before July I 1934, the Comptroller of the Currency shall appoint a
receiver or conservator therefor in accordance with the provisions of
existing law. Except as provided in subsection (g) of this section, if
any State member bank shall not have become a class A stockholder
of the Corporation on or before July 1 1934, the Federal Reserve Board
shall terminate its membership in the Federal Reserve System in accordance with the provisions of Sec. 9 of this Act.
"(f) Any State bank or trust company or mutual savings bank which
applies for membership in the Federal Reserve System or for conversion
Into a National banking association on or after July 1 1936 may, with
the consent of the Corporation,obtain the benefits of this section,pending
action on such application, by subscribing and paying for the same
amount of stock of the Corporation as it would be required to subscribe
and pay for upon becoming a member bank. Thereupon the provisions
of this section applicable to member banks shall be applcable to such
State bank or trust company or mutual savings bank to the same extent
as if it were already a member bank: Provided, That if the application
of such State bank or trust company or mutual savings bank for membership in the Federal Reserve System or for conversion into a National
banking association be approved and it shall not complete its membership in the Federal Reserve System or its conversion into a National
banking association within a reasonable time, or if such application
shall be disapproved, then the amount paid by such State bank or
trust company or mutual savings bank on account of its subscription
to the capital stock of the Corporation shall be repaid to it and it shall
no longer be subject to the provisions or entitled to the privileges of
this section.
"(g) If any State bank or trust company, or mutual savings bank
(referred to in this subsection as 'State bank') which is or which becomes
a member of the Federal Reserve System is not permitted by the laws
under which it was organized to purchase stock in the Corporation, it
shall apply to the Corporation for admission to the benefits of this
section and, if such application be granted after appropriate certification in accordance with this section, it shall deposit with the Corporation
an amount equal to the amount which it would have been required to
pay in on account of a subscription to capital stock of the Corporation.
Thereafter such deposit shall be adjusted in the same manner as subscriptions for stock by class A stockholders. Such deposit shall be
subject to the same conditions with respect to repayment as amounts
paid on subscriptions to class A stock by other member banks and the
Corporation shall pay interest thereon at the same rate as dividends
are actually paid on outstanding shares of class A stock. As long as
such deposit is maintained with the Corporation, such State bank
shall, for the purposes of this section, be deemed to be a class A stockholder of the Corporation. If the laws under which such State bank
was organized be amended so as to authorize State banks to subscribe
for class A stock of the Corporation, such State bank shall within six
months thereafter subscribe for an appropriate amount of such class A
stock and the deposit hereinafter provided for in lieu of payment upon
class A stock shall be applied upon such subscription. If the law under
which such State bank was organized be not amended at the next session
of the State Legislature following the admission of such State bank
to the benefits of this section as so to authorize State banks to purchase
such class A stock, or, if the law be so amended and such State bank
shall fail within six months thereafter to purchase such class A stock,
the deposit previously made with the Corporation shall be returned to
such State bank and it shall no longer be entitled to the benefits of
this section, unless it shall have been closed in the meantime on account
of inability to meet the demands of its depositors.
"(h) The amount of the outstanding class A stock of the Corporation held by member banks shall be annually adjusted as hereinafter
provided as of the last preceding call date as member banks increase
their time and demand deposits or as additional banks become members
or subscribe to the stock of the Corporation, and such stock may be
decreased in amount as member banks reduce their time and demand
deposits or cease to be members. Shares of the capital stock of the
Corporation owned by member banks shall not be transferred or hypothecated. When a member bank increases its time and demand deposits
it shall, at the beginning of each calendar year,subscribe for an additional
amount of capital stock of the Corporation equal to one half of 1 per
centum of such increase in deposits. One half of the amount of such
additional stock shall be paid for at the time of the subscription therefor,
and the balance shall be subject to call by the board of directors of the
Corporation. A bank organized on or before the date this section takes
effect and admitted to membership in the Federal Reserve System at
any time after the organization of the Corporation shall be required
to subscribe for an amount of class A capital stock equal to one half
of I per centum of the time and demand deposits of the applicant bank
as of the date of such admission, paying therefor its par value plus one
half of I per centum a month from the period of the last dividend on the
class A stock of the Corporation. When a member bank reduces its
time and demand deposits it shall surrender, not later than the 1st day
of January thereafter,a proportionate amount of its holdings in the capital
stock of the Corporation, and when a member bank voluntarily liquidates
It shall surrender all its holdings of the capital stock of the Corporation
and be released from its stock subscription not previously called. The
shares so surrendered shall be canceled and the member bank shall
receive In payment therefor, under regulations to be prescribed by the
Corporation, a sum equal to its cash-paid subscriptions on the shares
surrendered and its proportionate share of dividends not to exceed
one half of I per centum a month,from the period of the last dividend on
such stock, less any liability of such member bank to the Corporation.
"(i) If any member or non-member bank shall be declared insolvent,
or shall cease to be a member bank (or in the case of a non-member
bank, shall cease to be entitled to the benefits of insurance under this
section), the stock held by it in the Corporation shall be canceled,
without impairment of the liability of such bank, and all cash-paid
subscriptions on such stock, with its propor.ionate share of dividends
not to exceed one half of I per centum per month from the period of
last dividend on such stock shall be first applied to all debts of the
insolvent bank or the receiver thereof to the Corporation, and the
balance, if any, shall be paid to the receiver of the insolvent bank.
"(j) Upon the date of enactment of the Banking Act of 1933, the
Corporation shall become a body corporate and as such shall have
power—
"First. To adopt and use a corporate seal.
"Second. To have succession until dissolved by an Act of Congress.
"Third. To make contracts.
"Fourth. To sue and be sued, complain and defend, in any court of
law or equity, State or Federal.
"Fifth. To appoint by its board of directors such officers and employees as are not otherwise provided for in this section, to define their
duties, fix their compensation, require bonds of them and fix the penalty
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Financial Chronicle
thereof, and to dismiss at pleasure such officers or employees. Nothing
In this or any other Act shall be construed to prevent the appointment
and compensation as an officer or employee of the Corporation of any
officer or employee of the United States in any board, commission,
Independent establishment, or executive department thereof.
''Sixth. To prescribe by its board of directors, by-laws not inconsistent with law, regulating the manner in which its general business
may be conducted, and the privileges granted to it by law may be
exercised and enjoyed.
"Seventh. To exercise by its board of directors, or duly authorized
officers or agents, all powers specifically granted by the provisions of
this section and such incidental powers as shall be necessary to carry out
the powers so granted.
"(k) The board of directors shall administer the affairs of the Corporation fairly and impartially and without discrimination The board
of directors of the Corporation shall determine and prescribe the manner
In which its obligations shall be incurred and its expenses allowed and
paid. The Corporation shall be entitled to the free use of the United
States mails in the same manner as the executive departments of the
Government. The Corporation with the consent of any Federal Reserve bank or of any board, commission, independent establishment,
or executive department of the Government, including any field service
thereof, may avail itself of the use of information, services, and facilities
thereof in carrying out the provisions of this section.
"(I) Effective on and after July 1 1934 (thus affording ample time
for examination and preparation), unless the President shall by proclamation fix an earlier date, the Corporation shall insure as hereinafter
provided the deposits of all member banks, and on and after such date
and until July 1 1936 of all non-member banks, which are class A stockholders of the Corporation. Notwithstanding any other provision of
law, whenever any National bank which is a class A stockholder of the
Corporation shall have been closed by action of its board of directors or
by the Comptroller of the Currency, as the case may be, on account of
inability to meet the demands of its depositors, the Comptroller of the
Currency shall appoint the Corporation receiver for such bank. As
soon as possible thereafter the Corporation shall organize a new National
bank to assume the insured deposit liabilities of such closed bank, to
receive new deposits and otherwise to perform temporarily the functions
provided for it in this paragraph. For this purposes of the subsection,
the term 'insured deposit liability' shall mean with respect to the owner
of any claim arising our of a deposit liability of such closed bank the
following percentages of the net amount due to such owner by such closed
bank on account of deposit liabilities: 100 per centum of such net
amount not exceeding $10,000; and 75 per centum of the amount, if
any, by which such net amount exceeds $10,000 but does not exceed
$50.000; and 50 per centum of the amount, if any, by which such net
amount exceeds 850,000: Provided, That, in determining the amount
due to such owner for the purpose of fixing such percentage, there shall
be added together all net amounts due to such owner In the same capacity
or the same right, on account of deposits, regardless of whether such
deposits be maintained in his name or in the names of others for his
benefit. For the purposes of this subsection, the term 'insured deposit
liabilities' shall mean the aggregate amount of all such insured deposit
liabilities of such closed bank. The Corporation shall determine as
expeditiously as possible the net amounts due to deposits of the closed
bank and shall make available to the new bank an amount equal to the
Insured deposit liabilities of such closed bank, whereupon such new
bank shall assume the insured deposit liability of such closed bank to
each of its depositors, and the Corporation shall be subrogated to all
rights against the closed bank of the owners of such deposits and shall
be entitled to receive the same dividends from the proceeds of the assets
of such closed bank as would have been payable to each such depositor
until such dividends shall equal the insured deposit liability to such
depositor assumed by the new bank, whereupon all further dividends
shall be payable to such depositor. Of the amount thus made available
by the Corporation to the new bank, such portion shall be paid to it in
cash as may be nePessary to enable it to meet immediate cash demands
and the remainder shall be credited to it on the books of the Corporation
subject to withdrawal on demand and shall bear interest at the rate of
3 per centum per annum until withdrawn. The new bank may, with
the approval of the Corporation, accept new deposits, which, together
with all amounts made available to the new bank by the Corporation,
shall be kept on hand in cash, invested in direct obligations of the United
States or deposited with the Corporation or with a Federal Reserve
bank. Such new bank shall maintain on deposit with the Federal
Reserve bank of its district the reserves required by law of member
banks but shall not be required to subscribe for stock of the Federal
Reserve bank until its own capital stock has been subscribed and paid
for In the manner hereinafter provided. The articles of association and
organization certificate of such new bank may be executed by such
representatives of the Corporation as it may designate; the new bank
shall not be required to have any directors at the time of its organization, but shall be managed by an executive officer to be designated by
the Corporation;and no capital stock need be paid in by the Corporation;
but in other respects such bank shall be organized in accordance with the
existing provisions of law relating to the organization of National banks;
and, until the requisite amount of capital stock for such bank has been
subscribed and paid for in the manner hereinafter provided, such bank
shall transact no business except that authorized by this subsection and
such business as may be incidental to its organization. When in the
judgment of the Corporation it is desirable to do so, the Corporation
shall offer capital stock of the new bank for sale on such terms and
conditions as the Corporation shall deem advisable, in an amount sufficient in the opinion of the Corporation to make possible the conduct
of the business ot the new bank on a sound basis, but in no event less
than that required by Sec. 5138 of the Revised Statutes, as amended
(U.S.C., Title 12, Sec. 51), for the organization of a National bank in
the place where such new bank is located, giving the stockholders of
the closed bank the first opportunity to purchase such stock. Upon
proof that an adequate amount of capital stock of the new bank has
been subscribed and paid for in cash by subscribers satisfactory to the
Comptroller of the Currency, he shall issue to such bank a certificate
of authority to commence business and thereafter it shall be managed
by directors elected by its own shareholders and may exercise all of the
powers granted by law to National banking associations. If an adequate amount of capital for such new bank is not subscribed and paid
In, the Corporation may offer to transfer its business to any other
banking Institution in the same place which will take over its assets,
assume its liabilities, and pay to the Corporation for such business
such amount as the Corporation may deem adequate. Unless the
capital stock of the new bank is sold or its assets acquired and its liabilities assumed by another banking institution, in the manner herein
prescribed, within two years from the date of its organization, the
Corporation shall place the new bank in voluntary liquidation and wind
up its affairs. The Corporation shall open on its books a deposit in-
June
24 1933
surance account and, as soon as possible after taking possession of any
closed National bank, the Corporation shall make an estimate of the
amount which will be available from all sources for application in satisfaction of the portion of the claims of depositors to which it has been
subrogated and shall debit to such deposit insurance account the excess,
if any, of the amount made available by the Corporation to the new
bank for depositors over and above the amount of such estimate. It
shall be the duty of the Corporation to realize upon the assets of such
closed bank, having due regard to the condition of credit in the district
In which such closed bank is located; to enforce the individual liability
of the stockholders and directors thereof; and to wind up the affairs of
such closed bank la conformity with the provisions of law relating to the
liquidation of dosed National banks, except as herein otherwise provided, retaining for Its own account such portion of the amount realized
from such liquidatio_i as it shall be entitled to receive on account of its
subrogation to the claims of depositors and paying to depositors and other
creditors the amount available for distribution to them, after deducting
therefrom their share of the costs of the liquidation of the closed bank.
If the total amount realized by the Corporation on account of its subrogation to the claims of depositors be less than the amount of the
estimate hereinabove provided for, the deposit insurance account shall
be charged with the deficiency and, if the total amount so realized shall
exceed the amount of such estimate, such account shall be credited with
such excess. With respect to such closed National banks, the Corporation shall have all the rights, powers, and privileges now possessed
by or hereafter given receivers of insolvent National banks and shall
be subject to the obligations and penalties not inconsistent with the
provisions of this paragraph to which such receivers are now or may
hereafter become subject.
"Whenever any State member bank which is a class A stockholder
of the Corporation shall have been closed by action of its board of
directors or by the appropriate State authority, as the case may be,
on account of inability to meet the demands of its depositors, the Corporation shall accept appointment as receiver thereof, if such appointment be tendered by the appropriate State authority and be authorized
or permitted by State law. Thereupon the Corporation shall organize
a new National bank, in accordance with the provisions of thi subsection, to assume the insured deposit liabilities of such closed State
member bank, to receive new deposits and otherwise to perform temporarily the functions provided for in this subsection. Upon satisfactory
recognition of the right of the Corporation to receive dividends on the
same basis as in the case of a closed National bank under this subsection,
such recognition being accorded by State law, by allowance of claims
by the appropriate State authority, by assignments of claims by depositors, or by any other effective methods, the Corporation shall make
available to such new National bank, in the manner prescribed by this
subsection,an amount equal to the insured deposit liabilities of such closed
State member bank; and the Corporation and such new National bank
shall perform all of the functions and duties and shall have all the rights
and privileges with respect to such State member bank and the depositors
thereof which are prescribed by this subsection with respect to closed
National banks holding class A stock in the Corporation: Provided,
That the rights of depositors and other creditors of such State member
bank shall be determined in accordance with the applicable provisions
of State law: And provided further, That, with respect to such State
member bank, the Corporation shall possess the powers and privileges
provided by State law with respect to a receiver of such State member
bank, except in so far as the same are in conflict with the provisions
of this subsection.
"Whenever any State member bank which is a class A stockholder
of the Corporation shall have been closed by action of its board of
directors or by the appropriate State authority, as the case may be,
on account of inability to meet the demands of its depositors, and
the applicable State law does not permit the appointment of the Corporation as receiver of such bank, the Corporation shall organize a new
National bank, in accordance with the provisions of this subsection,
to assume the insured deposit liabilities of such closed State member
bank, to receive new deposits, and otherwise to perform temporarily
the functions provided for in this subsection. Upon satisfactory recognition of the right of the Corporation to receive dividends on the same
basis as in the case of a closed National bank under this subsection,
such recognition being accorded by State law, by allowance of claims
by the appropriate State authority, by assignment of claims by depositors, or by any other effective method, the Corporation shall make
available to such new bank, in accordance with the provisions of this
subsection, the amount of insured deposit liabilities as to which such
recognition has been accorded; and such new bank shall assume such
insured deposit liabilities and shall in other respects comply with the
provisions of this subsection respecting new banks organized to assume
insured deposit liabilities of closed National banks. In so far as possible in view of the applicable provisions of State law, the Corporation
shall proceed with respect to the receiver of such closed bank and with
respect to the new bank organized to assume its insured deposit liabilities
In the manner prescribed by this subsection with respect to closed
National banks and new banks organized to assume their insured deposit
liabilities; except that the Corporation shall have none of the powers,
duties, or responsibilities of a receiver with respect to the winding
up of the affairs of such closed State member bank. The Corporation,
in its discretion, however, may purchase and liquidate any or all of the
assets of such bank.
"Whenever the net debit balance of the deposit insurance account
of the Corporation shall equal or exceed one fourth of 1 per centum
of the total deposit liabilities of all class A stockholders as of the date
of the last preceding call report, the Corporation shall levy upon such
stockholders an assessment equal to one fourth of 1 per centum of their
total deposit liabilities and shall credit the amount collected from such
assessment to such deposit insurance account. No bank which is a
holder of class A stock shall pay any dividends until all assessments
levied upon it by the Corporation shall have been paid in full; and any
director or officer of any such bank who participates in the declaration
or payment of any such dividend may, upon conviction, be fined not
more than $1,000, or imprisoned for not more than one year, or both.
"The term 'receiver' as used in this section shall mean a receiver,
liquidating agent, or conservator of a National bank, and a receiver,
liquidating agent, conservator, commission, person, or other agency
charged by State law with the responsibility and the duty of winding
up the affairs of an insolvent State member bank.
"For the purposes of this section only, the term 'National bank'
shall include all National banking associations and all banks, banking
associations, trust companies, savings banks, and other banking institutions located in the District of Columbia which are members of the
Federal Reserve System; and the term 'State member bank' shall include all State banks, banking associations, trust companies, savings
banks, and other banking institutions organized under the laws of
any State, which are members of the Federal Reserve System.
Volume 136
Financial Chronicle
"In any determination of the insured deposit liabilities of any closed
bank or of the total deposit liabilities of any bank which is a holder
of class A stock of the Corporation, or a member of the Fund provided
for in subsection (y),for the purposes of this section, there shall be excluded the amounts of all deposits of such bank which are payable only
at an office thereof located in a foreign country.
"The Corporation may make such rules, regulations, and contracts
as it may deem necessary in order to carry out the provisions of this
section.
"Money of the Corporation not otherwise employed shall be invested
In securities of the Government of the United States, except that for
temporary periods. in the discretion of the board of directors, funds
of the Corporation may be deposited in any Federal Reserve bank or
with the Treasurer of the United States. When designated for that
purpose by the Secretary of the Treasury, the Corporation shall be a
depositary of public moneys, except receipts from customs, under
such regulations as may be prescribed by the said Secretary, and may
also be employed as a financial agent of the Government. It shall
perform all such reasonable duties as depositary of public moneys and
financial agent of the Government as may be required of it.
"(m) Nothing herein contained shall be construed to prevent the
Corporation from making loans to National banks closed by action
of the Comptroller of the Currency, or by vote of their directors, or to
State member banks closed by action of the appropriate State authorities,
or by vote of their directors, or from entering into negotiations to secure
the reopening of such banks.
"(n) Receivers or liquidators of member banks which are now or
may hereafter become insolvent or suspended shall be entitled to offer
the assets of such banks for sale to the Corporation or as security for
loans from the Corporation, upon receiving permission from the appropriate State authority in accordance with express provisions of State
law in the case of State member banks, or from the Comptroller of
the Currency in the case of National banks. The proceeds of every
such sale or loan shall be utilized for the same purposes and in the same
manner as other funds realized from the liquidation of the assets of
such banks. The Comptroller of the Currency may, in his discretion,
pay dividends on proved claims at any time after the expiration of the
period of advertisement made pursuant to Sec. 5235 of the Revised
Statutes (U.S.C., Title 12, Sec. 193), and no liability shall attach
to the Comptroller of the Currency or to the receiver of any National
bank by reason of any such payment for failure to pay dividends to a
claimant whose claim is not proved at the time of any such payment.
"(o) The Corporation is authorized and empowered to issue and
to have outstanding at any one time in an amount aggregating not
more than three times the amount of its capital, its notes, debentures,
bonds, or other such obligations, to be redeemable at the option of the
Corporation before maturity in such manner as may be stipulated in
such obligations, and to bear such rate or rates of interest, and to mature
at such time or times as may be determined by the Corporation: Provided. That the Corporation may sell on a discount basis short-term
obligations payable at maturity without interest. The notes. debentures, bonds, and other such obligations of the Corporation may
be secured by assets of the Corporation in such manner as shall be
prescribed by its board of directors. Such obligations may be offered
for sale at such price or prices as the Corporation may determine.
"(p) All notes, debentures, bonds, or other such obligations issued
by the Corporation shall be exempt, both as to principal and interest,
from all taxation (except estate and inheritance taxes) now or hereafter imposed by the United States, by any Territory, dependency,
or possession thereof, or by any State. county, municipality, or local
taxing authority. The Corporation, including its franchise, its capital,
reserves, and surplus, and its income, shall be exempt from all taxation
now or hereafter imposed by the United States, by any Territory,
dependency, or possession thereof, or by any State, county, municipality,
or local taxing authority, except that any real property of the Corporation shall be subject to State, Territorial, county, municipal or local
taxation to the same extent according to its value as other real property
is taxed.
"(0) In order that the Corporation may be supplied with such forma
of notes, debentures, bonds, or other such obligations as it may need
for issuance under this Act, the Secretary of the Treasury is authorized
to prepare such forma as shall be suitable and approved by the Corporation, to be held in the Treasury subject to delivery, upon order
at the Corporation. The engraved plates, dies, bed pieces, and other
material executed in connection therewith shall remain in the custody
of the Secretary of the Treasury. The Corporation shall reimburse
the Secretary of the Treasury for any expenses incurred in the preparation, custody, and delivery of such notes, debentures, bonds or other
such obligations.
"(r) The Corporation shall annually make a report of its operations
to the Congress as soon as practicable after the 1st day of January
In each year.
"(s) Whoever, for the purpose of obtaining any loan from the Corporation, or any extension or renewal thereof, or the acceptance, release,
or substitution of security therefor, or for the purpose of inducing the
Corporation to purchase any assets, or for the purpose of influencing
in any way the action of the Corporation under this section, makes any
statement, knowing it to be false, or willfully overvalues any security,
shall be punished by a fine of not more than $5,000, or by imprisonment
for not more than two years, or both.
"(t) Whoever (1) falsely makes, forges, or counterfeits any obligation
or coupon, in imitation of or purporting to be an obligation or coupon
Issued by the Corporation, or (2) passes, utters, or publishes, or attempts
to pass, utter, or publish, any false, forged, or counterfeited obligation
or coupon purporting to have been issued by the Corporation, knowing
the same to be false, forged, or counterfeited, or (3) falsely alters any
obligation or coupon issued or purporting to have been issued bythe
Corporation, or (4) passes, utters, or publishes, or attempts to pass,
utter, or publish, as true, any falsely altered or spurious obligation
or coupon, issued or purporting to have been issued by the Corporation,
knowing the same to be falsely altered or spurious, shall be punished
by a fine of not more than $10,000, or by imprisonment for not more
than five years, or both.
"(u) Whoever, being connected in any capacity with the Corporation, (1) embezzles, abstracts, purloins, or willfully misapplies any
moneys, funds, securities, or other things of value, whether belonging
to it or pledged, or otherwise intrusted to it, or (2) with intent to defraud
the Corporation or any other body, politic or corporate, or any individual,
or to deceive any officer, auditor, or examiner of the Corporation, makes
any false entry in any book, report, or statement of or to the Corporation, or without being duly authorized draws any order or issues, puts
forth, or assigns any note, debenture, bond, or other such obligation,
or draft, bill of exchange. mortgage. Judgment, or decree thereof, shall
be punished by a fine of not more than $10,000, or by imprisonment
for not more than five years, or both.
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"(v) No individual, association, partnership, or corporation shall
use the words 'Federal Deposit Insurance Corporation,' or a combination or any three of these four words, as the name or a part thereof
under which he or it shall do business. No individual, association,
partnership, or corporation shall advertise or otherwise represent falsely
by any device whatsoever that his or its deposit liabilities are insured
or in anywise guaranteed by the Federal Deposit Insurance Corporation,
or by the Government of the United States, or by any instrumentality
thereof; and no class A stockholder of the Federal Deposit Insurance
Corporation shall advertise or otherwise represent falsely by any device
whatsoever the extent to which or the manner in which its deposit
liabilities are insured by the Federal Deposit Insurance Corporation.
Every individual, partnership, association, or corporation violating this
subsection shall be punished by a fine of not exceeding $1,000, or by
imprisonment not exceeding one year, or both.
"(w) The provisions of Secs. 112, 113, 114, 115, 116, and 117 of
the Criminal Code of the United States (U.S.C., Title 18, Ch. 5, Secs.
202 to 207, inclusive), in so far as applicable, are extended to apply to
contracts or agreements with the Corporation under this section, which
for the purposes hereof shall be held to include loans, advances, extensions, and renewals thereof, and acceptances, releases, and substitutions of security therefor, purchases or sales of assets, and all
contracts and agreements pertaining to the same.
"(x) The Secret Service Division of the Treasury Department Is
authorized to detect, arrest, and deliver into the custody of the United
States marhsal having jurisdiction any person committing any of the
offenses punishable under this section.
"(37) The Corporation shall open on its books a Temporary Federal
Deposit Insurance Fund (hereinafter referred to as the 'Fund'), which
shall become operative on Jan. 1 1934, unless the President shallb y
proclamation fix an earlier date, and it shall be the duty of the Corporation to insure deposits as hereinafter provided until July 1 1934.
"Each member bank licensed before Jan. 1 1934 by the Secretary of
the Treasury pursuant to the authority vested in him by the Executive
order of the President issued March 101933, shall, on or before Jan. 1
1934, become a member of the Fund; each member bank so licensed
after such date, and each State bank, trust company, or mutual savings
bank (referred to in this subsection as 'State bank,' which term shall
also include all banking institutions located In the District of Columbia)
which becomes a member of the Federal Reserve System on or after
such date, shall, upon being so licensed or so admitted to membership,
become a member of the Fund; and any State bank which is not
member of the Federal Reserve System, with the approval of the
authority having supervision of such State bank and certification to
the Corporation by such authority that such State bank is in solvent
condition, shall, after examination by, and with the approval of, the
Corporation, be entitled to become a member of the Fund and to the
privileges of this subsection upon agreeing to comply with the requirements thereof and upon paying to the Corporation an amount equal
to the amount that would be required of it under this subsection if it
were a member bank. The Corporation is authorized to prescribe
rules and regulations for the further examination of such State bank,
and to fix the compensation of examiners ainployed to make examinations
of State banks.
"Each member of the Fund shall file with the Corporation on or before
the date of its admission a certified statement under oath showing, as
of the 15th day of the month preceding the month in which it was so
admitted, the number of its depositors and the total amount of its
deposits which are eligible for insurance under this subsection, and
shall pay to the Corporation an amount equal to one-half of 1 per centum
of the total amount of the deposits so certified. One-half of such payment shall be paid in full at the time of the admission of such member
to the Fund, and the remainder of such payment shall be subject to call
from time to time by the board of directors of the Corporation. Within
a reasonable time fixed by the Corporation each such member shall file
a similar statement showing, as of June 15 1934, the number of Its
depositors and the total amount of its deposits which are eligible for
such insurance and shall pay to the Corporation in the same manner
an amount equal to one-half of 1 per centum of the increase, if any,
In the total amount of such deposits since the date covered by the
statement filed upon its admission to membership in the fund.
"If at any time prior to July 1 1934 the Corporation requires additional
funds with which to meet its obligations under this subsection, each
member of the Fund shall be subject to one additional assessment
only in an amount not exceeding the total amount theretofore paid to
the Corporation by such member.
"If any member of the Fund shall be closed on or before June 30
1934 on account of inability to meet its deposit liabilities the Corporation shall proceed in accordance with the provisions of subsection (1)
of this section to pay the insured deposit liabilities of such membet
except that the Corporation shall pay not more than $2,500 on account
of the net approved claim of the owner of any deposit. The provisions
of such subsection (1) relating to State member banks shall be extended
for the purposes of this subsection to members of the Fund which am
not members of the Federal Reserve System; and the provisions of this
subsection shall apply only to deposits of members of the Fund which
have been made available since March 10 1933 for withdrawal in the
usual course of the banking business.
"Before July 1 1934 the Corporation shall make an estimate of the
balance, if any, which will remain in the Fund after providing for all
liabilities of the Fund, including expenses of operation thereof under
this subsection and allowing for anticipated recoveries. The Corporation
shall refund such estimated balance, on such basis as the Corporation
shall find to be equitable, to the members of the Fund other than thoite
which have been closed prior to July 1 1934.
"Each State bank which is a member of the Fund, in order to obtain
the benefits of this section after July 1 1934, shall, on or before such
date, subscribe and pay for the same amount of class A stock of the
Corporation as it would be required to subscribe and pay for upon
becoming a member bank, or if such State bank is not permitted by the
laws under which it was organized to purchase such stock, it shall deposit
with the Corporation an amount equal to the amount it would have
been required to pay in on account of a subscription to such stock; and
thereafter such State bank shall be entitled to such benefits untul July 1
1936.
"It is not the purpose of this section to discriminate, in any manner,
against State non-member, and in favor of, National or member banlog
but the purpose is to provide all banks with the same opportunity to
obtain and enjoy the benefits of this section. No bank shall be discriminated against because its capital stock is less than the amount
required for eligibility for admission into the Federal Reserve
System."
Sec. 9. The eighth paragraph of Sec. 13 of the Federal Reserve Act.
88 amended (U.S.C., Title 12, Sec. 347; Supp. VI, Title 12, Sec. 347),
is amended to read as follows:
4340
Financial Chronicle
June 24 1933
"Any Federal Reserve bank may make advances for periods not
Sec. 12. Sec.- 22 of the Federal Reserve Act, as amended (U.S.C.,
Title 12, Secs. 375, 376, 503, 593-595; Supp, VI„ Title 12, Sec. 593), is
exceeding fifteen days to its member banks on their promissory notes
secured by the deposit or pledge of bonds, notes, certificates of indebted- further amended by adding at the end thereof the following new paragraph
ness, or Treasury bills of the United States, or by the deposit or pledge
"(g) No executive officer of any member bank shall borrow from
of debentures or other such obligations of Federal Intermediate Credit
or otherwise become indebted to any member bank of which he is an
banks which are eligible for purchase by Federal Reserve banks under
executive officer, and no member bank shall make any loan or extend
Sec. 13(a)of this Act;and any Federal Reserve bank may make advances
credit in any other manner to any of its own executive officers: Profor periods not exceeding ninety days to its member banks on their
vided. That loans heretofore made to any such officer may be renewed
or extended not more than two years from the date this paragraph takes
promissory notes secured by such notes, drafts, bills of exchange, or
by
purchase
bankers' acceptances as are eligible for rediscount or for
effect, if in accord with sound banking practice. If any executive
Federal Reserve banks under the provisions of this Act. All such adofficer of any member bank borrow from or if he be or become indebted
vances shall be made at rates to be established by such Federal Reserve
to any bank other than a member bank of which he is an executive
banks, such rates to be subject to the review and determination of the
officer, he shall make a written report to the Chairman of the board of
Federal Reserve Board. If any member bank to which any such advance
directors of the member bank of which he is an executive officer, stating
has been made shall, during the life or continuance of such advance
the date and amount of such loan or indebtedness, the security therefor,
and despite an official warning of the Reserve bank of the district or
and the purpose for which the proceeds have been or are to be used.
of the Federal Reserve Board to the contrary, increase its outstanding
Any executive officer of any member bank violating the provisions of
loans secured by collateral in the form of stocks, bonds, debentures,
this paragraph shall be deemed guilty of a misdemeanor and shall be
or other such obligations, or loans made to members of any organized
imprisoned not exceeding one year, or fined not more than $5,000, or
stock exchange, investment house, or dealer in securities, upon any
both; and any member bank violating the provisions of this paragraph
shall be fined not more than $10,000, and may be fined a further sum
obligation, note, or bill, secured or unsecured, for the purpose of purchasing and (or) carrying stocks, bonds, or other investment securities
equal to the amount so loaned or credit so extended."
(except obligations of the United States) such advance shall be deemed
Sec. 13. The Federal Reserve Act, as amended, is amended by
immediately due and payable, and such member bank shall be ineligible
inserting between Secs. 23 and 24 thereof (U.S.C., Title 12, Secs. 64
as a borrower at the Reserve bank of the district under the provisions
and 371; Supp. VI, Title 12, Sec. 371) the following new section:
of this paragraph for such period as the Federal Reserve Board shall
"Sec. 23A. No member bank shall (1) make any loan or any extension
determine: Provided, That no temporary carrying or clearance loans
of credit to, or purchase securities under repurchase agreement from,
made solely for the purpose of facilitating the purchase or delivery of
any of its affiliates, or (2) invest any of its funds in the capital stock
securities offered for public subscription shall be included in the loans
bonds, debentures, or other such obligations of any such affiliate, or
referred to in this paragraph."
(3) accept the capital stock, bonds, debentures, or other such obligations
•Sec. 10. Sec. 14 of the Federal Reserve Act, as amended (U.S.C., of any such affiliate as collateral security for advances made to any
Title 12, Secs. 353-358), is amended by adding at the end thereof the
person, partnership, association, or corporation, if, in the case of any
following new paragraph:
such affiliate, the aggregate amount of such loans, extensions of credit,
repurchase agreements,investments,and advances against such collateral
"(g) The Federal Reserve Board shall exereise special supervision
over all relationships and transactions of any kind entered into by
security will exceed 10 per centum of the capital stock and surplus of
any Federal Reserve bank with any foreign bank or banker, or with
such member bank, or if, in the case of all such affiliates, the aggregate
any group of foreign banks or bankers, and all such relationships and
amount of such loans, extensions of credits, repurchase agreements,
transactions shall be subject to such regulations, conditions, and limitainvestments, and advances against such collateral security will exceed
tions as the Board may prescribe. No officer or other representative
20 per centum of the capital stock and surplus of such member bank.
of any Federal Reserve bank shall conduct negotiations of any kind
"Within the foregoing limitations, each loan or extension of credit of
with the officers or representatives of any foreign bank or banker without
any kind or character to an affiliate shall be secured by collateral in the
first obtaining the permission of the Federal Reserve Board. The
form of stocks, bonds, debentures, or other such obligations having a
Federal Reserve Board shall have the right, in its discretion, to be
market value at the time of making the loan or extension of credit of
representative
represented in any conference or
at least 20 per centum more than the amount of the loan or extension
by such
or representatives as the Board negotiations
all
of
report
of
credit, or of at least 10 per centum more than the amount of the loan
may designate. A full
conferences or negotiations, and all understandings or agreements arrived • or extension of credit if it is secured by obligations of any State, or of
at or transactions agreed upon, and all
any political subdivision or agency thereof: Provided, That the proother material facts appertaining
to such conferences or
visions of this paragraph shall not apply to loans or extenisons of credit
negotiations, shall be filed with the Federal
Reserve Board in writing by a duly authorized officer of each Federal
secured by obligations of the United States Government, the Federal
Reserve bank which shall have participated in such conferences or
Intermediate Credit banks, the Federal Land banks, the Federal Home
Loan banks, or the Home Owners' Loan Corporation, or by such notes,
negotiations."
Sec. 11. (a) Sec. 19 of the Federal Reserve Act,as amended (U.S.C..
drafts, bills of exchange, or bankers' acceptances as are eligible for
Title 12, Secs. 142, 374, 461-466; Supp. VI, Title 12, Sec. 462a), is
rediscount or for purchase by Federal Reserve banks. A loan or extenamended by inserting after the sixth paragraph thereof the following
sion of credit to a director, officer, clerk, or other employee or any
new paragraph:
representative of any such affiliate shall be deemed a loan to the affiliate
"No member bank shall act as the medium or agent of any nonto the extent that the proceeds of such loan are used for the benefit of,
banking corporation, partnership, association, business trust, or indior transferred to, the affiliate.
vidual in making loans on the security of stocks, bonds, and other
"For the purposes of this section the term 'affiliate' shall include
Investment securities to brokers or dealers in stocks, bonds, and other
holding company affiliates as well a3 other affiliates, and the provisions
of this section shall not apply to any affiliate (1) engaged solely in
investment securities. Every violation of this provision by any member
bank shall be punishable by a fine of not more than $100 per day during
holding the bank premises of the member bank with which it is affiliated,
the continuance of such violaton; and such fine may be collected, by
(2) engaged solely in conducting a safe-deposit business or the business
suit or otherwise, by the Federal Reserve bank of the district in which
of an agricultural credit corporation or livestock loan company, (3) in
such member bank is located."
the capital stock of which a National banking association is authorized
further
(b) Such Sec. 19 of the Federal Reserve Act, as amended, is
to invest pursuant to Sec. 25 of the Federal Reserve Act, as amended,
amended by adding at the end thereof the following new paragraphs:
(4) organized under Sec. 25 (a) of the Federal Reserve Act, as amended,
"No member bank shall, directly or indirectly by any device whator (5) engaged solely in holding obligations of the United States Governsoever, pay interest on any deposit which is payable on demand: Proment, the Federal Intermediate Credit banks, the Federal Land banks,
vided, That nothing herein contained shall be construed as prohibiting
the Federal Home Loan banks, or the Home Owners' Loan Corporation;
the payment of interest in accordance with the terms of any certificate
but as to any such affiliate, member banks shall continue to be subject
of deposit or other contract heretofore entered into in good faith which
to other provisions of law applicable to loans by such banks and inis in force on the date of the enactment of this paragraph; but no such
ve3tments by such banks in stocks, bonds, debentures, or other such
certificate of deposit or other contract shall be renewed or extended
obligations."
every
unless it shall be modified to conform to this paragraph, and
Sec. 14. The Federal Reserve Act, as amended, is amended by
member bank shall take such action as may be necessary to =dorm
inserting between Sec. 24 and Sec. 25 thereof (U.S.C., Title 12, Secs.
to this paragraph as soon as possible consistently with its contractual
371 and 601-605; Supp. VI, Title 12, Sec. 371) the following new section:
obligations: Provided, however, That this paragraph shall not apply
"Sec. 24A. Hereafter no National bank, without the approval of
to any deposit of such bank which is payable only at an office thereof
the Comptroller of the Currency, and no State member bank, without
located in a foreign country, and shall not apply to any deposit made
the approval of the Federal Reserve Board, shall (1) invest in bank
by a mutual savings bank, nor to any deposit of public funds made by
premises, or in the stock, bonds, debentures, or other such obligations
or on behalf of any State, county, school district, or other subdivision
of any corporation holding the premises of such bank or (2) make loans
or municipality, with respect to which payment of interest is required
to or upon the security of the stock of any such corporation, if the
under State law.
.aggregate of all such investments and loans will exceed the amount
."The Federal Reserve Board shall from time to time limit by regulaof the capital stock of such bank."
tion the rate of interest which may be paid by member banks on time
Sec. 15. The Federal Reserve Act, as amended, is further amended
deposits, and may prescribe different rates for such payment on time and
by inserting after Sec. 25 (a) thereof (U.S.C., Title 12, Sec. 611-631)
savings deposits having different maturities or subject to different
the following new section:
conditions respecting withdrawal or repayments or subject to different
"Sec. 25. (b) Notwithstanding any other provision of law all suits
conditions by reason of different locations. No member banks shall
of a civil nature at common law or in equity to which any corporation
pay any time deposit before its maturity, or waive any requirement
organized under the laws of the United States shall be a party, arising
of notice before payment of any savings deposit except as to all savings
out of transactions involving international or foreign banking, or banking
deposits having the same requirement."
in a dependency or insular possession of the United States, or out of
(c) Sec. 8 of the Act entitled "An Act to establish postal savings
other international or foreign financial operations, either directly or
depositories for depositing savings at interest with the security of the
through the agency, ownership, or control of branches or local instiGovernment for repayment thereof, and for other purposes," approved
tutions in dependencies or insular possessions of the United States or
June 25 1910, as amended (U.S.C., Title 39, Sec. 758), is amended
In foreign countries, shall be deemed to arise under the laws of the
by striking out the first sentence thereof and inserting in lieu thereof
United States, and the district courts of the United States shall have
the following: "Any depositor may withdraw the whole or any part
original jurisdiction of all such units; and any defendant in any such
of the funds deposited to his or her credit with the accrued interest only
suit may, at any time before the trial thereof, remove such suits from a
on notice given sixty days in advance and under such regulations as the
State court into the District Court of the United States for the proper
Postmaster-General may prescribe; but withdrawal of any part of such
district by following the procedure for the removal of causes otherwise
funds may be made upon demand, but no interest shall be paid on any
provided by law. Such removal shall not cause undue delay in the
funds so withdrawn except interest accrued to the date of enactment of
trial of such case and a case so removed shall have a place on the calendar
the Banking Act of 1933: Provided, That Postal Savings depositories
of the United States court to which it is removed relative to that which
may deposit funds in member banks on time under regulations to be
it held on the State court from which it was removed.
the
prescribed by
"Notwithstanding any other provision of law, al suits of a civil
Postmaster-General."
. (d) The second sentence of Sec. 19 of the Act entitled "An Act to
nature at common law or in equity to which any Federal Reserve bank
shall be a party shall be deemed to arise under the laws of the United
establish postal savings depositories tot depositing savings at interest
with the security of the Government for repayment thereof, and for
States, and the district courts of the United States shall have original
other purposes," approved June 25 1910, as amended (U.S.C., Title
jurisdiction of all such suits; and any Federal Reserve bank which is a
39, Sec. 759), is amended by striking out the period at the end thereof
defendant in any such suit may, at any time before the trial thereof,
remove such suit from a State court into the district court of the United
and inserting in lieu thereof a colon and the following: "Provided,
States for the proper district by following the procedure for the removal
That no such security shall be required in case of such part of the deposits
or causes otherwise provided by law. No attachment or execution
as are insured under Sec. 12B of the Federal Reserve Act, as amended."
Volume 136
•
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Financial Chronicle
shall be issued against any Federal Reserve bank or its property before
final judgment in any suit, action, or proceeding in any State, county,
county, municipal, or United States court."
Sec. 16. Paragraph "Seventh" of Sec. 5136 of the Revised Statutes.
as amended (U.S.C., Title 12, Sec. 24; Supp. VI. Title 12, Sec. 24),
is amended to read as follows:
"Seventh. To exercise by its board of directors or duly authorized
officers or agents. subject to law, all such incidental powers as shall be
necessary to carry on the business of banking; by discounting and
negotiating promissory notes, drafts, bills of exchange, and other evidences of debt; by receiving deposits; by buying and selling exchange,
coin, and bullion; by loaning money on personal security; and by obtaining. Issuing, and circulating notes according to the provisions of this
title. The business of dealing in investment securities by the association shall be limited to purchasing and selling such securities without
recourse, solely upon the order, and for the account of, customers, and
in no case for its own account, and the association shall not underwrite
any issue of securities: Provided, That the association may purchase
for its own account investment securities under such limitations and
restrictions as the Comptroller of the Currency may by regulation
prescribe, but in no event (1) shall the total amount of any issue of
investment securities of any one obligor or maker purchased after this
section as amended takes effect and held by the association for its own
account exceed at any time 10 per centum of the total amount of such
issue outstanding, but this limitation shall not apply to any such issue
the total amount of which does not exceed $100,000 and does not exceed
50 per centum of the capital of the association, nor (2) shall the total
amount of the investment securities of any one obligor or maker purchased after this section as amended takes effect and held by the association for its own account exceed at any time 15 per centum of the
amount of the capital stock of the association actually paid in and
unimpaired and 25 per centum of its unimpaired surplus fund. As used
in this section the term 'investment securities' shall mean marketable
obligations evidencing indebtedness of any person, copartnership, association. or corporation in the form of bonds, notes and (or) debentures
commonly known as investment securities under such further definition
of the term 'investment securities' as may by regulation be prescribed
by the Comptroller of the Currency. Except as hereinafter provided
or otherwise permitted by law, nothing herein contained shall authorize
the purchase by the association of any shares of stock of any corporation.
The limitations and restrictions herein contained as to dealing in, underwriting and purchasing for its own account, investment securities shall
not apply to obligations of the United States, or general obligations of
any State or of any political subdivision thereof, or obligations issued
under authority of the Federal Farm Loan Act, as amended, or issued
by the Federal Home Loan banks or the Home Owners'Loan Corporation:
Provided, That in carrying on the business commonly known as the safedeposit business the association shall not invest in the capital stock of
a corporation organized under the law of any State to conduct a safedeposit business in an amount in excess of 15 per centum of the capital
stock of the association actually paid in and unimpaired and 15 per
centum of its unimpaired surplus."
The restrictions of this section as to dealing in investment securities
shall take effect one year after the date of the approval of this Act.
Sec. 17. (a) Sec. 5138 of the Revised Statutes, as amended (U.S.C.,
Title 12, Sec. 51; Supp, VI, Title 12, Sec. 51), is amended to read as
follows:
"Sec. 5138. After this section as amended takes effect, no National
banking association shall be organized with a less capital than $100.000,
except that such associations with a capital of not less than $50.000
may be organized in any place the population of which does not exceed
six thousand inhabitants. No such association shall be organized in a
city the population of which exceeds fifty thousand persons with a
capital of less than $200,000, except that in the outlying districts of such
a city where the State laws permit the organization of State banks with
a capital of $100,000 or less, National banking associations now organized
or hereafter organized may, with the approval of the Comptroller of the
Currency, have a capital of not less than $100.000."
(b) The tenth paragraph of Sec. 9 of the Federal Reserve Act, as
amended (U.S.C., Title 12, Sec. 329), is amended to read as follows:
"No applying hank shall be admitted to membership in a Federal
Reserve bank unless it possesses a paid-up unimp*ed capital sufficient
to entitle It to become a National banking association in the place
where it is situated under the provisions of the National Bank Act,
as amended: Provided, That this paragraph shall not apply to State
banks and trust companies organized prior to the date this paragraph
as amended takes effect and situated In a place the population of which
does not exceed three thousand inhabitants and having a capital of
not less than $25,000. nor to any State bank or trust company which
is so situated and which, while it is entitled to the benefits of insurance
under Sec. 128 of this Act, increases its capital to not less than
$25,000."
Sec. 18. Sec. 5130 of the Revised Statutes, as amended (U.S.C.,
Title 12, Sec. 52; Stipp. VI, Title 12, Sec. 52), is amended by adding
at the end thereof the following new paragraph:
"After one year from the date of the enactment of the Banking Act
of 1933, no certificate representing the stock of any such association
shall represent the stock of any other corporation, except a member
bank or a corporation existing on the date this paragraph takes effect
engaged solely in holding the bank premises of such association, nor
shall the ownership, sale, or transfer of any certificate representing
the stock of any such association be conditioned in any manner whatsoever
upon the ownership, sale, or transfer of a certificate representing the
stock of any other corporation, except a member bank."
Sec. 19. See. 5144 of the Revised Statutes, as amended (U.S.C.,
Title 12, Pec. 61), is amended to read as follows:
-Sec. 5144. In all elections of directors, each shareholder shall have
the right to vote the number of shares owned by him for as many persons
as there are directors to be elected, or to cumulate such shares and
give one candidate as many votes as the number of directors multiplied
by the number of his shares shall equal, or to distribute them on the
same principle among as many candidates as he shall think fit; and in
deciding all other questions at meetings of shareholders, each shareholder shall be entitled to one vote on each share of stock held by him;
except (1) that shares of its own stock held by a National hank as sole
trustee shall not be voted, and shares of Its own stock held by a National
bank and one or more persons as trustees may be voted by such other
person or persons, as trustees, in the same manner as if he or they were
the sole trustee and (2) shares controlled by any holding company
affiliate of a National bank shall not be voted unless such holding company
affiliate shall have first obtained a voting permit as hereinafter provided,
which permit is in force at the time such shares are voted. Shareholders
may vote by proxies duly authorized in writing; but no officer, clerk,
teller, or bookkeeper of such bank shall act as proxy; and no shareholder whose liability Is past due and unpaid shall be allowed to vote.
4341
"For the purposes of this section shares shall be deemed to be controlled by a holding company affiliate if they are owned or controlled
directly or indirectly by such holding company affiliate, or held by any
trustee for the benefit of the shareholders or members thereof.
"Any such holding company affiliate may make application to the
Federal Reserve Board for a voting permit entitling it to cast one vbte
at all elections of directors and in deciding all questions at meetings
of shareholders of such bank on each share of stock controlled by it or
authorizing the trustee or trustees holding the stock for its benefit Or.
for the benefit of its shareholders so to vote the same. The Federal
Reserve Board may, in its discretion, grant or withhold such permit
as the public Interest may require. In acting upon such application.
the Board shall consider the financial condition of the applicant, the
general character of its management, and the probable effect of the
granting of such permit upon the affairs of such bank, but no such
permit shall be granted except upon the following conditions:
"(a) Every such holding company affiliate shall, in making the
application for such permit, agree (1) to receive, on dates identical
with those fixed for the examination of banks with which it is affiliated,
examiners duly authorized to examine such banks, who shall make such
examinations of such holding company affiliate as shall be necessary
to disclose fully the relations between such banks and such holding
company affiliate and the effect of such relations upon the affairs of such
banks, such examinations to be at the expense of the holding company
affiliate so examined; (2) that the reports of such examiners shall contain such information as shall be necessary to disclose fully the relation
between such affiliate and such banks and the effect of such relations
upon the affairs of such banks; (3) that such examiners may examine
each bank owned or controlled by the holding company affiliate, both
individually and in conjunction with other banks owned or controlled
by such holding company affiliate; and (4) that publication of individual
or consolidated statements of condition of such banks may be required;
"(b) After five years after the enactment of the Banking Act of
1933, every such holding company affiliate (1) shall possess, and shall
continue to possess during the life of such permit. free and clear of any
lien, pledge, or hypothecation of any nature, readily marketable assets
other than bank stock in an amount not less than 12 per centum of the
aggregate par value of all bank stocks controlled by such holding company
affiliate, which amount shall be increased by not less than 2 per centum
per annum of such aggregate par value until such assets shall amount
to 25 per centum of the aggregate par value of such bank stocks; and
(2) shall reinvest in readily marketable assets other than bank stock all
net earnings over and above 6 per centum per annum on the book value
of its own shares outstanding until such assets shall amount to such 25
per centum of the aggregate par value of all bank stocks controlled
by It;
"(c) Notwithstanding the foregoing provisions of this section, after
five years after the enactment of the Banking Act of 1933, (1) any
such holding company affiliate the shareholders or members of which
shall be individually and severally liable in proportion to the number
of shares of such holding company affiliate held by them respectively,
in addition to amounts invested therein, for all statutory liability imposed on such holding company affiliate by reason of its control of
shares of stock of banks, shall be required only to establish and maintain
out of net earnings over and above 6 per centum per annum on the
book value of its own shares outstanding a reserve of readily marketable
assets in an amount of not less than 12 per centum of the aggregate
par value of bank stocks controlled by it, and (2) the assets required
by this section to be possessed by such holding company affiliate may
be used by it for replacement of capital in banks affiliated with It and
for losses incurred in such banks, but any deficiency in such assets
resulting from such use shall be made up within such period as the
Federal Reserve Board may by regulation prescribe;
"(d) Every officer, director, agent, and employee of every such
holding company affiliate shall be subject to the same penalties for
false entries in any book, report, or statement of such holding company affiliate as are applicable to officers, directors, agents, and employees of member banks under Sec. 5209 of the Revised Statutes,
as amended (U.S.C., Title 12, Sec. 592); and
"(e) Every such holding company affiliate shall, in its application
for such voting permit, (1) show that it does not own, control, or have
any interest in, and is not participating in the management or direction
of, any corporation, business trust association, or other similar organization formed for the purpose of, or engaged principally in, the issue,
flotation, underwriting, public sale, or distribution, at wholesale or
retail or through syndicate participation, of stocks, bonds, debentures,
notes, or other securities of any sort (hereinafter referred to as 'securities
company'); (2) agree that during the period that the permit remains
in force it will not acquire any ownership,control, or interest in any such,
securities company or participate in the management or direction
thereof; (3) agree that if, at the time of filing the application for such
permit, it owns,controls, or has an interest in, or is participating in the
management or direction 'of, any such securities company, it will,
within five years after the filing of such application, divest itself of its
ownership, control, and interest in such securities company and will
cease participating in the management or direction thereof, and will
not thereafter, during the period that the permit remain" in force,
acquire any further ownership, control, or interest in any such securities
company or participate in the management or direction thereof; and
(4) agree that thenceforth it will declare dividends only out of actual
net earnings.
"If at any time it shall appear to the Federal Reserve Board that
any holding company affiliate has violated any of the provisions of the
Banking Act of 1933 or of any agreement made pursuant to this section,
the Federal Reserve Board may, in its discretion, revoke any such
voting permit after giving sixty days' notice by registered mail of its
Intention to the holding company affiliate and affording it an opportunity to be heard. Whenever the Federal Reserve Board shall have
revoked any such voting permit, no National bank whose stock is controlled by the holding company affiliate whose permit is so revoked
shall receive deposits of public moneys of the United States, nor shall
any such National bank pay any further dividend to such holding
company affiliate upon any shares of such bank controlled by such
holding company affiliate.
"Whenever the Federal Reserve Board shall have revoked any voting
permit as hereinbefore provided, the rights, privileges, and franchises
of any or all National banks the stock of which is controlled by such
holding company affiliate shall, in the discretion of the Federal Reserve
Board, be subject to forfeiture in accordance with Sec. 2.of the Federal
Reserve Act, as amended."
Sec. 20. After one year from the date of the enactment of this Act,
no member bank shall be affiliated in any manner described in Sec.
2 (b) hereof with any corporation, association, business trust, or other
similar organization engaged principally in the issue, flotation, underwriting, public sale, or distribution at wholesale or retail or through
4342
Financial Chronicle
syndicate participation of stocks, bonds, debentures, notes, or other
securities.
For every violation of this section the member bank involved shall
be subject to a penalty not exceeding $1,000 per day for each day
during which such violation continues. Such penalty may be assessed
by the Federal Reserve Board, in its discretion, and, when so assessed,
may be collected by the Federal Reserve bank by suit or otherwise.
If any such violation shall continue for six calendar months after the
member bank shall have been warned by the Federal Reserve Board
to discontinue the same, (a) in the case of a National bank, all the
rights, privileges, and franchises granted to it under the National Bank
Act may be forfeited in the manner prescribed in Sec. 2 of the Federal
Reserve Act, as amended (U.S.C., Title 12, Secs. 141, 222-225, 281-288,
and 502), or, (b) in the case of a State member bank, all of its rights
and privileges of membership in the Federal Reserve System may be
forfeited in the manner prescribed in Sec. 9 of the Federal Reserve
Act, as amended (U.S.C., Title 12, Secs. 321-332).
Sec. 21. (a) After the expiration of one year after the date of enactment of this Act it shall be unlawful(1) For any person, firm, corporation, association, business trust,
or other similar organization, engaged in the business of issuing, underwriting, selling, or distributing, at wholesale or retail, or through syndicate participation, stocks, bonds, debentures, notes, or other securities,
to engage at the same time to any extent whatever in the business of
receiving deposits subject to check or to repayment upon presentation
of a passbook, certificate of deposit, or other evidence of debt, or upon
request of the depositor; or
(2) For any person, firm, corporation, association, business trust,
or other similar organization, other than a financial institution or
private banker subject to examination and regulation under State
or Federal law, to engage to any extent whatever in the business of
receiving deposits subject to check or to repayment upon presentation
of a passbook, certificate of deposit, or other evidence of debt, or upon
request of the depositor, unless such person, firm, corporation, association, business trust, or other similar organization shall submit to
periodic examination by the Comptroller of the Currency or by the
Federal Reserve bank of the district and shall make and publish periodic
reports of its condition, exhibiting in detail its resources and liabilities,
such examination and reports to be made and published at the same times
and in the same manner and with like effect and penalties as are now
provided by law in respect of National banking associations transacting
business in the same locality.
(b) Whoever shall willfully violate any of the provisions of this
section shall upon conviction be fined not more than $5,000 or imprisoned not more than five years, or both, and any officer, director,
employee, or agent of any person, firm, corporation, association,
business trust, or other similar organization who knowingly participates in any such violation shall be punished by a like fine or imprisonment or both.
Sec. 22. The additional liability imposed upon shareholders in
National banking associations by the provisions of Sec. 5151 of the
Revised Statutes, as amended, and Sec. 23 of the Federal Reserve
Act, as amended (U.S.C., Title 12, Secs. 63 and 64), shall not apply
with respect to shares in any such association issued after the date
of enactment of this Act.
Sec. 23. Paragraph (c) of Sec. 5155 of the Revised Statutes, as
amended (U.S.C., Title 12, Sec. 36), is amended to read as follows:
"(c) A National banking association may, with the approval of the
Comptroller of the Currency, establish and operate new branches:
(1) Within the limits of the city, town or village in which said association is situated, if such establishment and operation are at the time
expressly authorized to State banks by the law of the State in question;
and (2) at any point within the State in which said association is situated,
if such establishment and operation are at the time authorized to State
banks by the statute law of the State in question by language specifically
granting such authority affirmatively and not merely by implication
or recognition, and subject to the restrictions as to location imposed by
the law of the State on State banks. No such association shall establish
a branch outside of the city, town, or village in which it is situated
unless it has a paid-in and unimpaired capital stock of not less than
$500,000: Provided, That in States with a population of less than one
million, and which have no cities located therein with a population
exceeding one hundred thousand, the capital shall be not less than
$250,000: Provided, That in States with a population of less than onehalf million, and which have no cities located therein with a population
exceeding fifty thousand, the capital shall not be less than $100,000."
Paragraph (d)of Sec.5155of the Revised Statutes,asamended (U.S.C.,
Title 12, Sec. 36), is amended to read as follows:
"(d) The aggregate capital of every National banking association
and its branches shall at no time be less than the aggregate minimum
capital required by law for the establishment of an equal number of
National banking associations situated in the various places where
such association and its branches are situated."
Sec. 24. (a) Secs. 1 and 3 of the Act entitled "An Act to provide
for the consolidation of National banking associations," approved
Nov. 7 1918, as amended (U.S.C., Title 12, Secs. 33, 34, and 34a), are
amended by striking out the words "county, city, town, or village"
wherever they occur in each such section, and inserting in lieu thereof
the words "State, county, city, town, or village."
(b) Sec. 3 of such Act of Nov. 7 1918, as amended, is further amended
by striking out the second sentence thereof and inserting in lieu thereof
the following: "The capital stock of such consolidated association shall
not be less than that required under existing law for the organization
of a National banking association in the place in which such consolidated
association is located. Upon such a consolidation,or upon a consolidation
of two or more National banking associations under Sec. 1 of this Act,
the corporate existence of each of the constituent banks and National
banking associations participating in such consolidation shall be merged
into and continued in the consolidated National banking association
and the consolidated association shall be deemed to be the same corporation as each of the constituent institutions. All the rights, franchises, and interests of each of such constituent banks and National
banking associations in and to every species of property, real, personal,
and mixed, and choses in action thereto belonging, shall be deemed
to be transferred to and vested in such consolidated National banking
association without any deed or other transfer; and such consolidated
National banking association, by virtue of such consolidation and without
any order or other action on the part of any court or otherwise, shall
hold and enjoy the same and all rights of property, franchises, and
interests, including appointments, designations, and nominations and
all other rights and interests as trustee, executor, administrator, registrar
of stocks and bonds, guardian of estates, assignee, receiver, committee
of estates of lunatics and in every other fiduciary capacity, in the same
manner and to the same extent as such rights, franchises, and interests
were held or enjoyed by any such constituent institution at the time of
June 24 1933
such consolidation: Provided, however, That where any such constituent
Institution at the time of such consolidation was acting under appointment of any court as trustee, executor, administrator, registrar of stocks
and bonds, guardian of estates, assignee, receiver, committee of estates
of lunatics or in any other fiduciary capacity, the consolidated National
banking association shall be subject to removal by a court of competent
jurisdiction in the same manner and to the same extent as was such
constituent corporation prior to the consolidation, and nothing herein
contained shall be construed to impair in any manner the right of any
court to remove such a consolidated National banking association and
to appoint in lieu thereof a substitute trustee,executor, or other fiduciary,
except that such right shall not be exercised in such a manner as to
discriminate against National banking associations, nor shall any such
consolidated association be removed solely because of the fact that
it is a National banking association."
Sec. 25. The first two sentences of Sec. 5197 of the Revised Statutes
(U.S.C., Title 12, Sec. 85) are amended to read as follows:
"Any association may take, receive, reserve, and charge on any loan
or discount made, or upon any notes, bills of exchange, or other evidences of debt, interest at the rate allowed by the laws of the State,
Territory, or District where the bank is located, or at a rate of 1 per
centum in excess of the discount rate on ninety-day commercial paper
in effect at the Federal Reserve bank in the Federal Reserve district
where the bank is located, whichever may be the greater, and no more,
except that where by the laws of any State a different rate is limited
for banks organized under State laws, the rate so limited shall be allowed
for associations organized or existing in any such State under this title.
When no rate is fixed by the laws of the State, or Territory, or district,
the bank may take, receive, reserve, or charge a rate not exceeding
7 per centum,or 1 per centum in excess of the discount rate on ninety-day
commercial paper in effect at the Federal Reserve bank in the Federal
Reserve district where the bank is located, whichever may be the greater,
and such interest may be taken in advance, reckoning the days for which
the note, bill, or other evidence of debt has to run."
Sec. 26. (a) The second sentence of the first paragraph of Sec. 5200
of the Revised Statutes, as amended (U.S.C., Title 12, Sec. 84; SuPP•
VI, Title 12, Sec. 84) is amended by inserting before the period at the
end thereof the following: "and shall include in the case of obligations
of a corporation all obligations of all subsidiaries thereof in which such
corporation CONVIN or controls a majority interest."
(b) The amendment made by this section shall not apply to such
obligations of subsidiaries held by such association on the date this
section takes effect.
Sec. 27. Sec. 5211 of the Revised Statutes, as amended (U.S.C.,
Title 12, Sec. 161; Supp. VI, Title 12, Sec. 181), is amended by adding
at the end thereof the following new paragraph:
'Each National banking association shall obtain from each of its
affiliates other than member banks and furnish to the Comptroller of
the Currency not less than three reports during each year, in such
form as the Comptroller may prescribe, verified by the oath or affirmation of the President or such other officer as may be designated by
the board of directors of such affiliate to verify such reports, disclosing the information hereinafter provided for as of dates identical
with those for which the Comptroller shall during such year require
the reports of the condition of the association. For the purpose of
this section the term 'affiliate' shall include holding company affiliates as well as other affiliates. Each such report of an affiliate shall
be transmitted to the Comptroller at the same time as the corresponding report of the association, except that the Comptroller may, in his
discretion, extend such time for good cause shown. Each such report
shall contain such information as in the judgment of the Comptroller
of the Currency shall be necessary to disclose fully the relations between such affiliate and such bank and to enable the Comptroller to
Inform himself as to the effect of such relations upon the affairs of such
bank. The reports of such affiliates,shall be published by the association under the same conditions as govern its own condition reports.
The Comptroller shall also have power to call for additional reports
with respect to any such affiliate whenever in his judgment the same
are necessary in order to obtain a full and complete knowledge of the
conditions of the association with which it is affiliated. Such additional
reports shall be transmitted to the Comptroller of the Currency in such
form as he may prescribe. Any such affiliated bank which fails to
obtain and furnish any report required under this section shall be subject
to a penalty of $100 for each day during which such failure continues."
Sec. 28. (a) The first paragraph of Sec. 5240 of the Revised Statutes,
as amended (U.S.C., Title 12, Sec. 481), is amended by inserting before
the period at the end thereof a colon and the following proviso: "Provided, That in making the examination of any National bank the examiner
shall include such an examination of the affairs of all its affiliates other
than member banks as shall be necessary to disclose fully the relations
between such bank and such affiliates and the effect of such relations upon
the affairs of such bank; and in the event of the refusal to give any
information required in the course of the examination of any such
affiliate, or in the event of the refusal to permit such examination, all
the rights, privileges, and franchises of the bank shall be subject to
forfeiture in accordance with Sec. 2 of the Federal Reserve Act, as
amended (U.S.C., Title 12, Secs. 141, 222-225, 281-286, and 502)•
The Comptroller of the Currency shall have power, and he is hereby
authorized, to publish the report of his examination of any National
banking association or affiliate which shall not within 120 days after
notification of the recommendations or suggestions of the Comptroller,
based on said examination, have complied with the same to his satisfaction. Ninety days' notice prior to such publicity shall be given to
the bank or affiliate."
(b) Sec. 5240 of the Revised Statutes, as amended (U.S.C., Title
12, Sec. 481), is further amended by adding after the first paragraph
thereof the following new paragraph:
"The examiner making the examination of any affiliate of a National
bank shall have power to make a thorough examination of all the affairs
of the affiliate, and in doing so he shall have power to administer oaths
and to examine any of the officers, directors, employees, and agents
thereof under oath and to make a report of his findings to the Comptroller of the Currency. The expense of examinations of such affiliates
may be assessed by the Comptroller of the Currency upon the affiliates
examined in proportion to assets or resources held by the affiliates
upon the dates of examination of the various affiliates. If any such
affiliate shall refuse to pay such expenses or shall fail to do so within
sixty days after the date of such assessment, then such expenses may be
assessed against the affiliated National bank and, when so assessed,
shall be paid by such National bank: Prvoided, however, That, if the
affiliation is with two or more National banks, such expenses may be
assessed against, and collected from, any or all of such National banks
In such proportions as the Comptroller of the Currency may prescribe.
The examiners and assistant examiners making the examinations of
National banking associations and affiliates thereof herein provided for
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4
Financial Chronicle
and the chief examiners, reviewing examiners and other persons whose
services may be required in connection with such examinations or the
reports thereof, shall be employed by the Comptroller of the Currency'
with the approval of the Secretary of the Treasury; the'employment
and compensation of examiners, chief examiners, reviewing examiners,
assistant examiners, and of the other employees of the office of the
Comptroller of the Currency whose compensation is paid from assessments on banks or affiliates thereof shall be without regard to the
provisions of other laws applicable to officers or employees of the United
States. The funds derived from such assessments may be deposited
by the Comptroller of the Currency in accordance with the provisions
of Sec. 5234 of the Revised Statutes (U,S.C., Title 12, Sec. 192) and
shall not be construed to be Government funds or appropriated moneys;
and the Comptroller of the Currency is authorized and empowerd to
prescribe regulations governing the computation and assessment of
the expenses of examinations herein provided for and the collection
of such assessments from the banks and (or) affiliates examined. If
any affiliate of a National bank shall refuse to permit an, examiner to
make an examination of the affiliate or shall refuse to give any information
required in the course of any such examination, the National bank
with which it is affiliated shall be subject to a penalty of not more than
$100 for each day that any such refusal shall continue. Such penalty
may be assessed by the Comptroller of the Currency and collected in
the same manner as expenses of examinations."
Sec. 29. In any case in which; in the opinion of the Comptroller
of the Currency, it would be to the advantage of the depositors and
unsecured 'creditors of any National banking association whose business has been closed, for such association to resume business upon the
retention by the association, for a reasonable period to be prescribed
by the Comptroller, of all or any part of its deposits, the Comptroller
is authorized, in his discretion, to permit the association to resume
business if depositors and unsecured creditors of the association representing at least 75 per centum of its total deposit and unsecured credit
liabilities consent in writing to such retention of deposits. Nothing in
this section shall be construed to affect in any manner any powers of
the Comptroller under the provisions of law in force on the date of
enactment of this Act with respect to the reorganization of National
banking associations.
Sec. 30. Whenever, in the opinion of the Comptroller of the Currency, any director or officer of a National bank, or of a bank or trust
company doing business in the District of Columbia, or whenever, in
the opinion of a Federal Reserve agent, any director or officer of a
State member bank in his district shall have continued to violate any
law relating to such bank or trust company or shall have continued
unsafe or unsound practices in conducting the business of such bank
or trust company, after having been warned by the Comptroller of the
Currency or the Federal Reserve agent, as the case may be, to discontinue such violations of law or such unsafe or unsound practices,the
Comptroller of the Currency or the Federal Reserve agent,as the case
may be, may certify the facts to the Federal Reserve Board. In any
such case the Federal Reserve Board may cause notice to be served
upon such director or officer to appear before such Board to show cause
why he should not be removed from office. A copy of such order shall
be sent to each director of the bank affected, by registered mail. If
after granting the accused director or officer a reasonable opportunity
to be heard, the Federal Reserve Board finds that he has continued
to violate any law relating to such bank or trust company or has continued unsafe or unsound practices in conducting the business of such
bank or trust company after having been warned by the Comptroller of
the Currency or the Federal Reserve agent to discontinue such violation
of law or such unsafe or unsound practices, the Federal Reserve Board,
In its discretion, may order that such director of officer be removed from
office. A copy of such order shall be served upon such director or
officer. A copy of such order shall also be served upon the bank of
which he is a director or officer, whereupon such director or officer
shall cease to be a director or officer of such bank: Provided, That
such order and the findings of fact upon which it is based shall not
be made public or disclosed to anyone except the director or officer
involved and the directors of the bank involved, otherwise than in
connection with proceedings for a violation of this section. Any such
director or officer removed from office as herein provided who thereafter
participates in any manner in the management of such bank shall be
fined not more than $5,000, or imprisoned for not more than five year,
or both, in the discretion of the court.
Sec. 31. After one year from the date of enactment of this Act,
notwithstanding any other provision of law, the board of directors,
board of trustees, or other similar governing body of every National
banking association and of every State bank or trust company which
is a member of the Federal Reserve System shall consist of not less
than five nor more than twenty-five members; and every director,
trustee, or other member of such governing body shall be the bona
fide owner in his own right of shares of stock of such banking association, State bank or trust company having a par value in the aggregate
of not less than $2,500, unless the capital of the bank shall not exceed
$50,000, in which case he must own in his own right shares having a
par value in the aggregate of not less than $1,500, or unless the capital of
the bank shall not exceed $25,000, in which case he must own in his owl
right shares having a par value in the aggregate of not less than $1,00
If any National banking association violates the provisions of this
section and continues such violation after thirty days' notice from the
Comptroller of the Currency, the said Comptroller may appoint a
receiver or conservator therefor, in accordance with the provisions of
existing law. If any State bank or trust company which is a member
of the Federal Reserve System violates the provisions of this section
and continues such violation after thirty days' notice from the Federal
Reserve Board, it shall be subject to the forfeiture of its membership
In the Federal Reserve System in accordance with the provisions of
Sec. 9 of the Federal Reserve Act, as amended.
Sec. 32. From and after Jan. 1 1934 no officer or director of any
member bank shall be an officer, director, or manager of any corporation, partnership, or unincorporated association engaged primarily in
the business of purchasing, selling, or negotiating securities, and no
member bank shall perform the functions of a correspondent bank on
behalf of any such individual,partnership,corporation,or unincorporated
association and no such individual partnership, corporation, or unincorporated association shall perform the functions of a correspondent
for any member bank or hold on deposit any funds on behalf of any.
member bank, unless in any such case there is a permit therefor issued
by the Federal Reserve Board; and the Board is authorized to issue such
permit if in its judgment it is not incompatible with the public interest,
and to revoke any such permit whenever it finds after reasonable notice
and opportunity to be heard, that the public interest requires such
revocation.
Sec. 33. The Act entitled"An Act to supplement existing laws against
unlawful restraints and monopolies, and for other purposes," approved
4344N
Oct. 15 1914, as amended (U.S.C., Title 15, Sec. 19), is hereby amended
by adding after Sec. 8 thereof the following new section:
"Sec. 8A. That from and after the 1st day of January 1934, noi
director, officer, or employee of any bank, banking association, or trust
Company, organized or operating under,the laws of the United States
shall be at the same time a director, officer, or employee of a corporation
(other than a mutual savings bank) or a member of a partnership organized for any purpose whatsoever which shall make loans secured by
stock or bond collateral to any.individual, association, partnership, or
corporation other than its own subsidiaries."
Sec. 34. The right to alter, amend, or repeal this Act is hereby
expressly reserved. If any provision of this Act, or the application
thereof to any person or circumstances, is held invalid, the remainder
of the Act, and the application of such provision to other persons et8
circumstances, shall not be affected thereby.
Ariirroved June 16 1933, 11:45 a. m.
1
Deposit Guaranty Fund Provided for in Glass-SteagalI
Bank Bill—New York City Banks to Carry 28%
of All Member Banks' Share in Cost-12% to Be
Borne by "Big Three."
From the New York "Times" of June 18 we take the
following:
Under the Glass-Steagall bank bill, banks in New York City will have
to carry about 28% of all member banks'share in the cost of the guaranty
fund; the "big three," the Chase. the National City, and the Guaranty.
will have to pay 12% of the cost, and the Chase National Bank alone will
have to pay more than 5%. These figures are based on the deposit liabilities
of the institutions involved. The latest available figures for all member
banks show total deposits of about $25,000.000,000. The New York
Clearing House banks in their report for the last week listed time and
demand deposits of nearly 87,000,000,000, more than $3,000,000,000 of
which was held by the three largest banks, the Chase National having
of
nearly 81,300,000,000. Under the bill the banks must contribute
1% of their total deposits, half the amount being payable when the fund
In
dollars
the
total
being
subject
to
call.
effective
and
half
becomes
contribution from all member banks works out at 8125,000 000; the share
of the New York Clearing House banks being 835,000,000; that of the
"big throe" roughly 815,000,000, and that of the Chase alone nearly'
86,500,000. And the banks do not know how many times they may be
called upon to repeat the contribution.
Banks to Cut Directorates Under Glass-Steagall Bank
Act—Limits Number and Forbids Securities Dealers,
on Boards.
Pointing out that the directorates of many local banks
and trust companies will undergo numerous changes within
the next year, in accordance with the provisions of the
Banking Act of 1933 (generally known as the Glass-Steagall'
Bank Act), the "Wall Street Journal" of June 19 added: •
That bill stipulates that "the board of directors, board of trustees, or
other similar governing body"of every National bank,State bank or trust
company, which is a member of the Federal Reserve System, shall consist
of not less than five nor more than 25 members. The changes must be
made one year from the date of enactment.
At present about half of the leading New York City banks and trust
companies, members of the Reserve System, have directors or trustees
numbering in excess of 25. Chase National Bank, Manufacturers Trust.
Co.. and Guaranty Trust Co.each have 36, according to the latest available'
Information, while Central Hanover Bank & Trust Co. and Irving Trust.
Co. each has 30. Bank of Manhattan Co. has 31.
Commercial National Bank Trust Co. has 29; Bank of New York & Trust,.
28, and New York Trust Co., 26. Bankers Trust Co. has 32.
National City Bank, as the result of three resignations in the last six.
months, and one death, has 21 directors. First National Bank has always
maintained a small board,and it at present numbers nine members. Other
large institutions are Chemical Bank & Trust Co.. which had 25 as of
March 31 last; Brooklyn Trust, 24; Public National'Bank & Trust, 11;
Corn Exchange Beak Trust, 20; Continental Bank & Trust Co., 19, and
U. S. Trust Co., 15.
The banking legislation also provides that from and after Jan. 1 1934,
"no officer or director of any member bank shall be an officer, director or
manager of any corporation, partnership, or unincorporated association
engaged primarily in the business of purchasing, selling, or negotiating
securities. . . ."
A number of the local banks and trust companies currently have on
their board directors who come within this ruling.
—
ement by Senator Glass on Glass-Steagall Bank
Bill—Explains Action of Conferees—Comment by
Senator Vandenberg on Conference Report—
Double Liability of Stockholders Eliminated as to,
Future Bank Stock Issues.
While we referred in these columns June 17 ,(page 4192)
to the action of Congress in passing the Glass-Steagall.
Banking Bill, we were unable to make room at the time
for a statement made before the Senate on June 13 by,
Senator Carter Glass, in which he briefly explained what the
conferees had done in reaching agreement on the bill. The
statement of Senator Glass follows:
S
The bill as reported to the Senate. I would say conservatively, contains
98% of the bill as passed by the Senate. The differences among the
conferees causing so long a delay related to the insurance of deposits provision of the bill. There was a readjustment of what was known as the
"Vandenberg Amendment" which was accepted by me with the express
understanding with the proponent that if it should occur that the bill would
be endangered by the inclusion of the Vandenberg amendment providing
temporarily for insuring deposits up to $2.500 until the permanent provision
of the bill should go into effect. I would feel obliged to agree to some modification of the amendment. That the conferees finally agreed to do, because
It seemed certain to the conferees that the Vandenberg amendment, as
accepted by me and by the Senate, would endanger the passage of the bill. ,
We have so modified the Vandenberg amendment as that, instead of
immediately insuring deposits up to the amount of 82,500 in the member
banks and in such State banks as were wMing to avail themselves of the
privilege of the provisions by the payment of the required fee, we provide
4344
Financial Chronicle
for the insurance of deposits up to $2,500 on the first day of January 1934.
next January. Insuring such member banks as may then have been licensed
to conduct the business by the Secretary of the Treasury and such nonmember banks as may be approved by the corporation charged with the
administration of the insurance provision of the bill.
We did this for the reason that we were assured by the President and
by the Treasury and by the authorities of the Federal Reserve Board that
it would be disastrous to undertake an immediate insurance of deposits up
to $2.500, for the reason that 90% of the depositors In banks are persons
who deposit less than $2,500. and it would be a physical impossibility to
prepare for the insurance provided in the Vandenberg amendment. Therefore we modified the amendment as I have indicated. That was done. I
think I am accurate in saying, by the unanimous decision of the conferees
of both Houses. It became our conviction that the beat that could be
done by us was to have this insurance go into operation on the first day of
next January after there had been suitable provision for it.
In addition to that we modified the permanent insurance provision of
the bill so as to provide that non-member banks applying for the Privilege
and paying the fee exacted might be insured under the S10.000 provision
of 100% up to $10,000. 75% between $10,000 and $50,000. and 50%
over $50.000.
We extended from one year to three years the time when non-member
banks might receive such insurance, before they would be required. in
order to continue the insurance, to become members of the Federal Reserve
Banking System. In short, a non-member bank may receive the privileges
of the permanent insurance provision beginning on July 1 1934. or sooner
if the President should so desire. That also applies to the temporary
for
provision. They may be insured up to July I 1936, without applying
words,
membership in the Federal Reserve Bank ng System. In other
the non-member banks are thus given use of Federal Reserve fac titles for
that period of time without having to become members of the Federal
Reserve Banking System. On and after July 1 1936 all banks availing
become
themselves of the permanent insurance provision of the bill must
members of the Federal Reserve Banking System.
It may be of interest to state to the Senate that the executive authorities
at the outset were all thoroughly opposed to the Insurance of bank deposits.
I may say also that a majority of the subcommittee of the Committee on
Banking and Currency having In hand the preparation of the bill were
Utterly opposed to the Insurance of bank deposits. But as sensible men
we realized that it was a problem from which we could not escape. We
knew perfectly well that the other branch of Congress by an overwhelming
vote had passed a bill providing for a guaranty of bank deposits and we
therefore knew that we were obliged to deal with the problem In some way.
That being so, the Senate subcommittee made representations to the
executive authorities to that effect and suggested that it will be better to
deal with the problem in a cautious and a conservative way than to have
ourselves run over in a stampede. After representations of that view to
the executive authoritice, they were brought to agree that It were better
to do the thing in that way than to have it done In a severely unwise fashion.
In this way we brought about complete accord between the executive
authorities and between the conferees of the two Houses of Congress. The
Senate now has before It the result of the conference.
In one other particular we made an alteration In the administrative
feature of the insurance phase. In the bill as passed by the Senate we
provided that the funds should be administered by a board consisting of
five members, one of them to be the Comptroller of the Currency, one to
be a member of the Federal Reserve Board, the three remaining members
to be selected by the 12 Federal Reserve banks. The House provision
provided for five members, one of whom should be the Comptroller of the
Currency, the other four to be appointed by the President of the United
States. We finally compromised our differences there by providing a
board of three members,one of them to be the Comptroller of the Currency.
the other two to be appointed by the President, and not more than two
members of the board to be of the same political party.
There Is one other provision of the bill which has been altered that
might interest the Senate. and that is the provision relating to double
liability of stockholders In the banks. We have written into the bill a
provision which does not undertake to interfere with existing liability, but
which obviates the double liability for future James of stock.
The above statement by Senator Glass was followed by
the following query:
Mr. King. Does that stockholder escape any liability whatever other
than the loss of his stock,should the bank go Into the hands of a receiver?
June 24 1933
Mr. Glass. Under future issues he has no double liability on account of
his stock. We do not deal with his liability In other respects.
Mr. President, I think that just about explains the more or less important
alterations made by the conferees in the Senate bill.
We also append a statement made to the Senate on June 13
by Senator Vandenberg:
Mr. Vandenberg. Mr. President. I desire to comment only briefly on
the conference report; and I do so because the chief controversy for the past
three or four weeks has revolved around by amendment which undertook
to provide immediate and practically universal hank deposit insurance.
ed emotions.
I confess that I have greeted the conference report with mi,
In some degree the proposed formula fails to include some of the propositi iflS
conference
the
that I had felt to be essential On the other hand. 1 think
report in respect to deposit insurance in general, and in respect to the
. represents a distinct and paramount
Purpose of my amendment.In par.icular,
victory for a new principle In American banking* and 1 am glad to join In
hospitality to the conference report. We propose, at last, to make the
savings of America safe. It has been my objective for months and years.
I should be unable to bring myself to approve the conference report.
however, in view of its seeming postponement of the Insurance feature
under my amendment. except for the Inclusion in the conference report of
10 very significant words.
Mr. l'resident, the temporary emergency Insurance. it is true, has been
postponed from July 1, as was my contemplation. until Jan 1 1934; but In
addition to that postponement appears the following phrase:
"Unions the President shall by proclamation fir an earlier date."
Mr. President, under that language we have created the possibility of
Immediate deposit insurance If the situation develops In a fashion to require
it
We have eliminated July 1 1933 as a fl ed focus, but we have left
July I 1933 in the bill as a matter of reality if the situation requires. It is
my fundamental theory that deposit insurance is abeolutely fundamentally
necessary to the economic recuperation of the United States. I am absolutely sure in my own mind that if we could ha% e had deposit insurance
and
last New Year's we would have escaped the debacle of last March
that lust so soon as we get deposit insurance of an effective nature we shall
escape the hazards of future jeopardy. That jeopardy still abounds. We
ha% e not yet answered our banking problem. It never will be answered
except on a basis of justified and adequate depositor co..firience.
So. when the conferees bring us back a formula which, while tentatively
postponing the initiation of deposit insurance until Jan. 1 1931 nevertheless permits the President of the United States to Invoke It at an earlier
date I am satisfied and happy to welcome it as a great landmark on the
road to permanent stabilization of the banking function In America. I
am satisfied to take It as a substantial fulfillment of my own purposes as
e..pressed In my amendment.
One other point was fundamentally Involved in this argument. It was
the question of protecting State banks which are not members of the Federal
Reserve System.
!daily of us have insisted from the very first that if any deposit Insurance
system was to be established. It must in the first instance treat the nonmember State banking structure of the country on an equality with Federal
Reserve member banks So the emergency amendment—Identified as the
Vandenberg amendment for easy speaking—which was adopted by the
Senate provided for the adrnisaion of non-member State banks to this
insurance fund on the certification of solvency by their own State banking
authorities.
That provision remains In the conference report. limited only by the
subsequent acceptance of that certification subject to e•omination by the
managers of the insurance corporation; and those managers are not the
Federal Reserve Board
We are not delivering these State banks into
the control of the Federal Reserve S stem
This management is an Independent management, as the Senator from Virginia iMr. Class has Indicated
The presumption of validity will attach to the cent irate of solvency
as furnished by the State banking aethority, and it Is subject only to a
perfectly proper check. The burden of proof to upset a State certificate
will rest upon the managers of the holtiratiCe corporation.
Therefore. Mr. President. much as I should have liked to have the
temporary emergency fund reinain In its initial form, recognizing the
tremendous odds which the Senate conferees not only have coaronted but
ba%e faithfully battled against and triumphantly o%ereome feeling that
these two fundamental essentials to protect the integrity and the utility of
this insurance deposit fund are e %latent in the conference report. I am very
happy to join the Senator from Virginia in urging the adoption of the
report.
Text of National Industrial Recovery Act—Provides Federal Control for Revival of
Industry and $3,300,000,000 Public Works Program—$100,000,000 for Distribution
by Farm Relief Administrators—New Taxation.
We are giving here the text of the National Industrial
Recovery Act as passed by Congress and signed by President
Roosevelt on June 16. Final Congressional action and
approval of the measure by President Roosevelt was noted
in our issue of June 17, page 4196, and on page 4198 we gave
a statement by the President in which he said that "history
will probably record the National Industrial Recovery Act
as the most important and farreaching legislation ever
enacted by the American Congress." A further statement
by the President, issued June 16, explaining the purposes
of the new legislation, is given elsewhere in our issue to-day.
As we have heretofore stated, the National Industrial Recovery Act provides Federal control for the revival of industry and a Government sponsored public works program
costing $3,300,000,000. Of the latter sum, the President is
authorized to allocate not in excess of $100,000,000 for distribution by the Farm Relief administrators. The proposed
bond issue of $3,300,000,000 to finance the construction of
Federal, State, local and public benefiting private projects,
to create new employment, will require $220,000,000 annually for financing, and to meet the cost of this, new taxation is provided as follows:
A tax of 1-10 of I% on corporation net worth, with a 5% additional
assessment on earnings above 124%; a 5% tax on corporation dividends
to be deducted at the source; an increase of 34c. In the present gasoline
tax; three-year extension of corporation consolidation return authority
with increase of I% in income tax rate on consolidated returns, instead
of the present three-quarters of 1%.
Extends for one year, also, all special excise taxes voted by last CongreSa and makes adininistrative changes in the tax law to prevent carrying
over into subsequent years stock anti bond losses which exceed the gains
In the year in which they occur. These apply to both corporations and
Individuals.
Provides for publicity for income tax returns under regulations to be
drawn by the President,
The Act is divided into three titles, de.cribed as follows
by the Washington correspondent of the New York "Journal
of Commerce":
1. A program of Industrial recovery through removal of obstructions
to the free flow of Inter-State Commerce, promotion of co-operative action
among trade groups and with labor, elimination of unfair competition,
anti relief of unemployment.
2. An emergency administration of public works to plan and execute
a comprehensive program of construction involving contemplated expenditure of $3,300,000,000.
3. Miscellaneous provisions, including amendments to the Reconstruction Finance Corporation Act.
The outstanding features of the new law were summarized
as follows in the same paper (June 12):
1. Defines the policy setting forth the existing national emergency
and establishes the constitutional basis for the legislation.
2. Authorizes the President to establish suitable agencies to carry out
this policy and to set up the necessary machinery, Including establishment of an Industrial planning and research agency.
•
Financial Chronicle
Volume 136
• 3. Provides the following methods for putting into effect the policy
set out in the legislation:
(a) Voluntary codes of fair competition; (b) mandatory codes; (c) trade
agreements; nil labor agreements; (e) limited labor codes, and (f) licensing.
4. Authorizes the President to license business enterprises if necessary,
make effective a code of fair competition or an agreement otherwise to
effectuate the policy.
5. Provides for limiting imports of foreign merchandise if threatening
the success of the recovery program.
6. Exempts from the provisions of the anti-trust laws any business
operation carried on in compliance with the provisions of a code, agreement, or license for a period of two years plus 60 days.
7. Requires trade and industrial groups to furnish to the President
such information as he may call for.
8. Sets up penalties for violations of the law and (or) the rules and
regulations established thereunder.
9. Announces safeguards for labor.
10. Provides a system of taxation for the amortization of the public
works program whereby business is to contribute the funds, on the theory
that the entire legislation is designed to benefit business and the activities
should receive its financial support. These taxes are to raise in excess of
$220,000,000 annually.
The following is the text of the Act:
H. R. 5755.
NATIONAL INDUSTRIAL RECOVERY ACT.
(As agreed to in conference.)
AN ACT To encourage national industrial recovery, to foster fair corncompetition, and to provide for the construction of certain useful
public works, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled.
TITLE I—INDUSTRIAL RECOVERY.
Declaration of Policy.
Section 1. A national emergency productive of widespread unemployment and disorganization of industry, which burdens interstate
and foreign commerce, affects the public welfare, and undermines the
standards of living of the American people, is hereby declared to exist.
It is hereby declared to be the policy of Congress to remove obstructions
to the free flow of interestate and foreign commerce which tend to diminish the amount thereof; and to provide for the general welfare by promoting the organization of industry for the purpose of co-operative
action among trade groups, to induce and maintain united action of
labor and management under adequate governmental sanctions and
supervision, to eliminate unfair competitive practices, to promote the
fullest possible utilization of the present productive capacity of industries,
to avoid undue restriction of production (except as may be temporarily
required), to increase the consumption of industrial and agricultrual
products by increasing purchasing power, to reduce and relieve unemployment, to improve standards of labor, and otherwise to rehabilitate
ndustry and to conserve natural resources.
Administrative Agencies.
Sec. 2. (a) To effectuate the policy of this title, the President is
hereby authorized to establish such agencies, to accept and utilize such
voluntary and uncompensated services, to appoint, without regard to
the provisions of the civil service laws, such officers and employees,
and to utilize such Federal officers and employees, and, with the consent
of the State, such State and local officers and employees, as he may
find necessary, to siestribe their authorities, duties, responsibilities,
and tenure, and, without regard to the Classification Act of 1923, as
amended, to fix the compensation of any officers and employees so
appointed.
(b) The President may delegate any of his functions and powers
under this title to such officers, agents, and employees as he may designate or appoint, and may establish an industrial planning and research
agency to aid in crrying out his functions under this title.
(c) This title shall cease to be in effect and any agencies established
hereunder shall cease to exist at the expiration of two years after the
date of enactment of this Act, or sooner if the President shall by proclamation or the Congress shall by joint resolution declare that the emergency recognized by section 1 has ended.
Codes of Fair Competition,
Sec. 3. (a) Upon the application to the President by one or more
trade or industrial associations or groups, the President may approve
a code or codes of fair competition for the trade or industry or subdivision thereof, represented by the applicant or applicants, if the
President finds (1) that such associations or groups impose no inequitable
restrictions on admission to membership therein and are truly representative of such trades or industries or subdivisions thereof, and (2)
that such code or codes are not designed to promote monopolies or to
eliminate or oppress small enterprises and will not operate to discriminate
against them and will tend to effectuate the policy of this title: Provided,
That such code or codes shall not permit monopolies or monopolistic
practices: Provided further, That where such code or codes affect the
services and welfare of persons engaged in other steps of the economic
process, nothing in this section shall deprive such persons of the right
to be heard prior to approval by the President of such code or codes.
The President may, as a condition of his approval of any such code,
impose such conditions (including requirements for the making of redorts
and the keeping of an ounts) for the protection of consumers, competitors, employees, and others, and in furtherance of the public interest,
and may provide such exceptions to and exemptions from the provisions
of such code, as the President in his discretion deems necessary to
effectuate the policy herein declared.
(b) After the President shall have approved any such code, the
provisions of such code shall be the standards of fair competition for
such trade or industry or subdivision thereof. Any violation of such
standards in any transaction in or affecting interstate or foreign commerce shall be deemed an unfair method of competition in commerce
within the meaning of the Federal Trade Commission Act, as amended;
but nothing in this title shall be construed to impair the powers of the
Federal Trade Commission under such Act, as amended.
(c) The several district courts of the United States are hereby invested with jurisdiction to prevent and restrain violations of any code
of fair competition approved under this title; and it shall be the duty of
the several district attorneys of the United States, in their respective
districts, under the direction of the Attorney General, to institute
proceedings In equity to prevent and restrain such violations.
(d) Upon his own motion, or if complaint is made to the President
that abuses inimical to the public interest and contrary to the policy
herein declared are prevalent in any trade or industry or subdivision
4345
thereof, and if no code of fair competition therefor has theretofore
been approved by the President, the President, after such public notice
and hearing as he shall specify, may prescribe and approve a code of
fair competition for such trade or industry or subdivision thereof, which
shall have the same effect as a code of fair competition approved by
the President under subsection (a) of this section.
(e) On his own motion, or if any labor organization, or any trade or
industrial organization, association, or group, which has complied with
the provisions of this title, shall make complaint to the President that
any article or articles are being imported into the United States in substantial quantities or increasing ratio to domestic production of any
competitive article or articles and on such terms or under such conditions
as to render ineffective or seriously to endanger the maintenance of
any code or agreement under this title, the President may cause an
immediate investigation to be made by the United States Tariff Commission, which shall give precedence to investigations under this subsection, and if, after such investigation and such public notice and hearing as he shall specify, the President shall find the existence of such
facts, he shall, in order to effectuate the policy of this title, direct that
the article or articles concerned shall be permitted entry into the United
States only upon such terms and conditions and subject to the payment
of such fees and to such limitations in the total quantity which may be
imported (in the course of any specified period or periods) as he shall
find it necessary to prescribe in order that the entry thereof shall not
render or tend to render ineffective any code or agreement made under
this title. In order to enforce any limitations imposed on the total
quantity of imports, in any specified period or periods, of any article
or articles under this subsection, the President may forbid the imporfirst
tation of such article or articles unless the importer shall have
obtained from the Secretary of the Treasury a license pursuant to such
any
regulations as the President may prescribe. Upon information of the
action by the President under this subsection the Secretary of
article
Treasury shall, through the proper officers, permit entry of thesubject
or articles specified only upon such terms and conditions and
imported,
be
may
which
to such fees, to such limitations in the quantity
directed.
and to such requirements of license, as the President shall have
Any
The decision of the President as to facts shall be conclusive.
continue
condition or limitation of entry under this subsection shall
the
of
Secretary
the
in effect until the President shall find and inform
conTreasury that the conditions which led to the imposition of such
dition or limitation upon entry no longer exists.
or prescribed
(f) When a code of fair competition has been approved
provision thereof
by the President under this title, any violation of any commerce shall
foreign
or
interstate
in any transaction in or affecting
shall be
be a misdemeanor and upon conviction thereof an offender
violation
fined not more than $500 for each offense, and each day such
continues shall be deemed a separate offense.
Agreements and Licentes.
agreement*
Sec. 4. (a) The President is authorized to enter into
perwith, and to approve voluntary agreements between and among,trade
sons engaged in a trade or industry, labor organizations, and any
to
or industrial organizations, associations, or groups, relating effecttrade or industry, if in his judgment such agreements will aid in
affecting
or
in
transactions
to
respect
uating the policy of this title with
requireinterstate or foreign commerce, and will be consistent with the
comments of clause (2) of subsection (a) of section 3 for a code of fair
petition.
price
or
wage
destructive
that
(b) Whenever the President shall find
are being
cutting or other activities contrary to the policy of this title and, after
practiced in any trade or industry or any subdivision thereof, essential
such public notice and hearing as he shall specify, shall find it of fair
code
to license business enterprises in order to make effective a
competition or an agreement under this title or otherwise to effectuate
person shall,
the policy of this title, and shall publicly so announce, no
any busiafter a date fixed in such announcement, engage in or carry on
in such
specified
ness, in or affecting interstate or foreign commerce,
purissued
license
a
obtained
announcement, unless he sahll have first
The President
suant to such regulations as the President shall prescribe.
may suspend or revoke any such license, after due notice and opportunity
thereof. Any
for hearing, for violations of the terms or conditions
license shall be
order of the President suspending or revoking any such
such a license
without
who,
final if in accordance with law. Any person
or in violation of any condition thereof, carries on any such business
for which a license is so required, shall, upon conviction thereof, be
fined not more than $500, or imprisoned not more than six months,
or both, and each day such violation continues shall be deemed a separate
subsection
offense. Notwithstanding the provisions of section 2 (c), this
of
shall cea.ie to be in effect at the expiration of one year after the date
proclamation
enactment of this Act or sooner if the President shall by
emergency
or the Congress shall by joint resolution declare that the
recognized by section 1 has ended.
Sec. 5, While this title is in effect (or in the case of a license, while
section 4 (a) is in effect) and for 60 days thereafter, any code agreement,
or license approved, prescribed, or issued and in effect under this title,
and any action complying with the provisions thereof taken during such
period, shall be exempt from the provisions of the antitrust laws of the
United States.
Nothing in this Act, and no regulation thereunder, shall prevent an
individaul from pursuing the vocation of manual labor and selling or
trading the products thereof; nor shall anything in this Act,or regulation
thereunder, prevent anyone from marketing or trading the produce of
his farm.
Limitations Upon Application of Title.
Sec. 6. (a) No trade or industrial association or group shall be eligible
to receive the benefit of the provisions of this title until it files with the
President a statement containing such information relating to the
activities of the association or group as the President shall by regulation prescribe.
(b) The President is authorized to prescribe rules and regulations
designed to insure that any organization availing itself of the benefits
of this title shall be truly representative of the trade or industry or subdivision thereof represented by such organization. Any organization
violating any such rule or regulation shall cease to be entitled to the
benefits of this title.
(c) Upon request of the President, the Federal Trade Commission
shall make such investigations as may be necessary to enable the President to carry out the provisions of this title, and for such purposes the
Commission shall have all the powers vested in it with respect of investigations under the Federal Trade Commission Act, as amended.
Sec. 7. (a) Every code of fair competition, agreement, and license
approved, prescribed, or issued under this title shall contain the following conditions: (1) That employees shall have the right to organize
and bargain collectively through representatives of their own choosing,
4346
Financial Chronicle
June 24 1933
(b) The Administrator may, without regard to the civil service laws
or the Classification Act of 1923, as amended, appoint and fix the compensation of such experts and such other officers and employees as are
necessary to carry out the provisions of this title; and may make such
expenditures (including expenditures for personal services and rent at
the seat of government and elsewhere, for law books and books of reference, and for paper, printing and birding) as are necessary to carry out
the provisions of this title.
(c) All such compensation, expenses, and allowances shall be paid
out of funds made available by this Act.
(d) After the expiration of two years after the date of the enactment
of this Act, or sooner if the President shall by proclamation or the Congress shall by joint resolution declare that the emergency recognized
by section 1 has ended, the President shall not make any further loans
or grants or enter upon any new construction under this title, and any
agencies established hereunder shall cease to exist and any of their
remaining functions shall be transferred to such departments of the
Government as the President shall designate: Provided, That he may
Issue funds to a borrower under this title prior to Jan. 23 1939, under
the terms of any agreement, or any commitment to bid upon or purchase
bonds, entered into with such borrower prior to the date of termination
under this section, of the Power of the President to make loans.
Sec. 202. The Administrator, under the direction of the President
shall prepare a comprehensive program of public works, which shall
include among other things the following: (a) Construction, repair, and
improvement of public highways and park ways, public buildings, and
any publicly owned instrumentalities and facilities; (b) conservation
and development of natural resources, including control, utilization,
and purification of waters, prevention of soil or coastal erosion, development of water power, transmission of electrical energy, and construction
of river and harbor improvements and flood control and also the construction of any river or drainage improvement required to perform or
satisfy any obligation incurred by the United States through a treaty
with a foreign Government heretofore ratified and to restore or develop
for the use of any State or its citizens water taken from or denied to
them by peformance on the part of the United States of treaty obligations
heretofore assumed: Provided, That no river or harbor improvements
shall be carried out unless they shall have heretofore or hereafter been
adopted by the Congress or are recommended by the Chief of Engineers
of the United States Army; (c) any projects of the character heretofore
constructed or carried on either directly by public authority or with
public aid to serve the interests of the general public; (d) construction,
reconstruction, alteration, or repair under public regulation or control
of low-cost housing and slum-clearance projects; (e) any project (other
than those included in the foregoing classes) of any character heretofore
eligible for loans under subsection (a) of section 201 of the Emergency
Relief and Construction Act of 1932, as amended, and paragraph (3) of
such subsection (a) shall for such purposes be held to include loans for
the construction or completion of hospitals the operation of which is
partly financed from public funds, and of reservoirs and pumping plants
and for the construction of dry docks; and if in the opinion of the President it seems desirable, the construction of naval vessels within the
terms and (or) limits established by the London Naval Treaty of 1930
and of aircraft required therefor and construction of heavier-than-air
aircraft and technical construction for the Army Air Corps and such
Army housing projects as the President may approve, and provision of
original equipment for the mechanization or motorization of such Army
tactical units as he may designate: Provided, however, That in the event
of an international agreement for the further limitation of armament,
to which the United States is signatory, the President is hereby authorized
and empowered to suspend, in whole or in part, any such naval or
military construction or mechanization and motorization of Army units:
Provided further, That this title shall not be applicable to public works
under the jurisdiction or control of the Architect of the Capitol or of
any commission or committees for which such Architect is the contracting
Oil Regulation.
and (or) executive officer.
' Sec. 9. (a) The President is furhter authorized to initiate before
Sec. 203. (a) With a view to increasing employment quickly (while
the Inter-State Commerce Commission proceedings necessary to presecuring any loans made by the United States) the President
reasonably
'scribe regulations to control the operations of oil pipe lines and to fix
is authorized and empowered, through the Administrator or through
reasonable, compensatory rates for the transportation of petroleum and
such other agencies as he may designate or create, (1) to construct,
its products by pipe lines, and the Inter-State Commerce Commission
finance, or aid in the construction or financing of any public-works
cases.
such
of
determination
and
hearings
the
to
shall grant preference
project included in the program prepared pursuant to section 202;
(b) The President is authorized to institute proceedings to divorce (2) upon such terms as the President shall prescribe, to make grants to
from any holding company any pipe-line company controlled by such
States, municipalities, or other public bodies for the construction,
holding company which pipe-line company by unfair practices or by
repair,
or improvement of any such project, but no such grant shall be
products
its
or
petroleum
of
transportation
• exorbitant rates in the
in excess of 30% of the cost of the labor and materials employed upon
tends to create a monopoly.
such project; (3) to acquire by purchase, or by exercise of the power of
(c) The President is authorized to prohibit the transportation in
eminent domain, any real or personal property in connection with the
thereof
interestate and foreign commerce of petroleum and the products
of any such project, and to sell any security acquired or
construction
permitted
amount
the
of
excess
in
storage
produced or withdrawn from
any property so constructed or acquired or to lease any such property
to be produced or withdrawn from storage by any State law or valid
with or without the privilege of purchase: Provided, That all moneys
regulation or order prescribed thereunder, by any board, commission,
received from any such sale or lease or the repayment of any loan shall
officer, or other duly authorized agency of a State. Any violation
be used to retire obligations issued pursuant to section 209 of this Act.
of any order of the President issued under the provisions of this subother moneys required to be used for such purpose;
section shall be punishable by fine of not to exceed $1,000, or Imprison- in addition to any
.(4) to aid in the financing of such railraod maintenance and equipment
ment for not to exceed six months, or both.
as may be approved by the Inter-State Commerce Commission as deRules and Regulations.
sirable for the improvement of transportation facilities; and (5) to
advance, upon request of the Commission having jurisdiction of the
Sec. 10. (a) The President is authorized to prescribe such rules and
project, the unappropriated balance of the sum authorized for carrying
regulations as may be necessary to carry out the purposes of this title,
out the provisions of the Act entitled "An Act to provide for the conand fees for licenses and for filing codes of fair competition and agreeCongress," ap.ments, and any violation of any such rule or regulation shall be punish- struction and equipment of an annex to the Library of
proved June 13 1930 (46 Stat. 583); such advance to be expended under
able by fine of not to exceed 8500, or imprisonment for not to exceed
the direction .of such Commission and in accordance with such Act:
six months, or both.
Provided, That in deciding to extend any aid or grant hereunder to any
(b) The President may from time to time cancel or modify any order,
State, county, or municipality the President may consider whether
approval, license, rule, or regulation issued under this title; and each
designed
agreement, code of fair competition, or license approved, prescribed, action is in process or in good faith assured therein reasonablyprudently
to bring the ordinary current expenditures thereof within the
or issued under this title shall contain an express provision to that effect.
estimated revenues thereof. The provisions of this section and section
TITLE Jr-PUBLIC WORKS AND CONSTRUCTION PROJECTS. 202 shall extend to public works in the several States, Hawaii, Alaska,
the District of Columbia, Puerto Rico, the Canal Zone, and the Virgin
Federal Emergency Administration of Public Works.
Islands.
(b) All expenditures for authorized travel by officers and employees,
Section 201. (a) To effectuate the purposes of this title, the President
including subsistence, required on account of any Federal public-works
Is hereby authorized to create a Federal Emergency Administration of
Projects, shall be charged to the amounts allocated to such projects,
'Public Works, all the powers of which shall be exercised by a Federal
notwithstanding any other provisions of law; and there is authorized
Emergency Administrator of Public Works (hereafter referred to as the
to be employed such personal services in the District of Columbia and
'"Administrator"), and to establish such agencies, to accept and utilize
be
elsewhere as may be required to be engaged upon such work and to
such voluntary and uncompensated services, to appoint, without regard
in addition to employees otherwise provided for, the compensation of
to the civil service laws, such officers and employees, and to utilize
made
funds
such Federal officers and employees, and, with the consent of the State, such additional personal services to be a charge against the
such State and local officers and employees as he may find necessary, available for such construction work.
Federal
(c) In the acquisition of any land or site for the purposes of
to prescribe their authorities, duties, responsibilities, and tenure, and,
public buildings and in the construction of such buildings provided for
without regard to the Classification Act of 1923, as amended, to fix the
of the
306
In this title, the provisions contained in sections 305 and
compensation of any officers and employees so appointed. The PresiEmergency Relief and Construction Act of 1932, as amended, shall
dent may delegate any of his functions and powers under this title to
apply.
such officers, agents, and employees as he may designate or appoint.
and shall be free from the interference, restraint, or coercion of elnployers of labor, or their agents, in the designation of such representatives
or in self-organization or in other concerted activities for the purpose
.of collective bargaining or other mutual aid or protection; (2) that no
employee and no one seeking employment shall be required as a condition
of employment to join any company union or to refrain from joining,
'organizing, or assisting a labor organization of his own choosing; and
.(3) that employers shall comply with the maximum hours of labor,
minimum rates of pay, and other conditions of employment, approved
or prescribed by the President.
' (b) The President shall, so far as practicable, afford every opportunity to employers and employees in any trade or industry or subdivision thereof with respect to which the conditions referred to in
clauses (1) and (2) of subsection (a) prevail, to establish by mutual
agreement, the standards as to the maximum hours of labor, minimun
rates of pay,and such other conditions of employment as may be necessary
in such trade or industry or subdivision thereof to effectuate the policy
of this title; and the standards established in such agreements, when
approved by the President, shall have the same effect as a code of fair
competition, approved by the President under subsection (a)of section 3.
(c) Where no such mutual agreement has been approved by the
President he may investigate the labor practices, policies, wages, hours
of labor, and conditions of etnployment in such trade or industry or
subdivision thereof; and upon the basis of such investigations, and after
such hearings as the President finds advisable, he is authorized to prescribe a limited code of fair competition fixing such maximum hours of
labor, minimum rates of pay, and other conditions of employment in
the trade or industry or subdivision thereof investigated as he finds to
be necessary to effectuate the policy of this title, which shall have the
same effect as a code of fair competition approved by the President
under subsection (a) of section 3. The President may differentiate
• according to experience and skill of the employees affected and according
to the locality of employment; but no attempt shall be made to introduce
• any classification according to the nature of the work involved which
might tend to set a maximum as well as a minimum wage.
• (d) As used in this title, the term "person" includes any individual,
• partnership, association, trust, or corporation; and the terms "interstate
• and foreign commerce" and "Interstate or foreign commerce" include,
except where otherwise indicated, trade or commerce among the several
States and with foreign nations, or between the District of Columbia
or any Territory of the United States and any State, Territory, or
foreign nation, or between any insular possessions or other places under
the jurisdiction of the United States, or between any such possession
or place and any State or Territory of the United States or the District
•of Columbia or any foreign nation, or within the District of Columbia
or any Territory or any insular possession or other place under the jurisdiction of the United States.
Application of Agricultural Adjustment Act.
Sec. 8. (a) This title shall not be construed to repeal or modify any
. of the provisions of title I of the Act entitled "An Act to relieve the
existing national economic emergency by increasing agricultural purchasing power, to raise revenue for extraordinary expenses incurred by
.reason of such emergency, to provide emergency relief with respect to
agricultural indebtedness, to provide for the orderly liquidation of jointstock land banks, and for other purposes," approved May 12 1933;
and such title I of said Act approved May 12 1933, may for all purposes
be hereafter referred to as the "Agricultural Adjustment Act."
. (b) The President may, in his discretion, in order to avoid conflicts
in the administration of the Agricultural Adjustment Act and this title,
.delegate any of his functions and powers under this title with respect
to trades, industries, or subdivisions thereof which are engaged in the
handling of any agricultural commodity or product thereof, or of any
competing commodity or product thereof, to the Secretary of Agriculture.
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Financial Chronicle
(d) The President, in his discretion, and under such terms as he may
prescribe, may extend any of the benefits of this title to any State,
county, or municipality notwithstanding any constitutional or legal
restriction or limitation on the right or power of such State, county, or
municipality to borrow money or incur indebtedness.
Sec. 204. (a) For the purpose of providing for emergency construction
of public highways and related projects, the President is authorized to
make grants to the highway departments of the several States in an
amount not less than $400,000,000, to be expended by such departments
in accordance with the provisions o.t the Federal Highway Act, approved
Nov. 9 1921, as amended and supplemented, except as provided in this
title, as follows:
(1) For expenditure in emergency construction on the Federal aid
highway system and extensions thereof into and through municipalities.
The amount apportioned to any State under this paragraph may be used
to pay all or any part of the cost of surveys, plans, and of highway and
bridge construction including the elimination of hazards to highway
traffic, such as the separation of grades at crossing, the reconstruction
of existing railroad grade crossing structures, the relocation of highways
to eliminate railroad crossings, the widening of narrow bridges and roadways, the building of footpaths, the replacement of unsafe bridges, the
construction of routes to avoid congested areas, the construction of
facilities to improve accessibility and the free flow of traffic, and the
cost of any other construction that will provide safer traffic facilities
or definitely eliminate existing hazards to pedestrian or vehicular traffic.
No funds made available by this title shall be used for the acquisition of
any land, right of way, or easement in connection with any railroad
grade elimination project.
(2) For expenditure in emergency construction on secondary or feeder
roads to be agreed upon by the State highway departments and the
Secretary of Agriculture: Provided, That the State or responsible political
subdivision shall provide for the proper maintenance of said roads. Such
grants shall be available for payment of the full cost of surveys, plans,
improvement, and construction of secondary or feeder roads, on which
projects shall be submitted by the State highway department and approved by the Secretary of Agriculture.
(b) Any amounts allocated by the President for grants under subsection (a) of this section shall be apportioned among the several States
seven-eights in accordance with the provisions of section 21 of the
Federal Highway Act, approved Nov. 9 1921, as amended and supplemented (which Act is hereby futher amended for the purposes of this
title to include the District of Columbia), and one-eighth in the ratio
which the population of each State bears to the total population of the
United States, according to the latest decennial census and shall be
available on July 1 1933, and shall remain available until expended;
but no part of the funds apportioned to any State need be matched by
the State, and such funds may also be used in lieu of State funds to
match unobligated balances of previous apportionments of regular
Federal-aid appropriations.
(c) All contracts involving the expenditure of such grants shall contain
provisions establishing minimum rates of wages, to be predetermined
by the State highway department, which contractors shall pay to skilled
and unskilled labor, and such minimum rates shall be stated in the invitation for bids and shall be included in proposals for bids for the work.
(d) In the expenditure of such amounts, the limitations in the Federal
Highway Act, approved Nov. 9 1921, as amended and supplemented,
upon highway construction, reconstruction, and bridges within municipalities and upon payments per mile which may be made from Federal
funds, shall not apply.
(e) As used in this section the term "State" includes the Territory
of Hawaii and the District of Columbia. The term "highway" as defined in the Federal Highway Act approved Nov. 9 1921, as amended
and supplemented, for the purposes of this section, shall be deemed to
Include such main parkways as may be designated by the State and
approved by the Secretary of Agriculture as part of the Federal-aid
highway system.
(f) Whenever, in connection with the construction of any highway
project under this section or section 202 of this Act, it is necessary to
acquire rights of way over or through any property or tracts of land
owned and controlled by the Government of the United States, it shall
be the duty of the proper official of the Government of the United States
having control of such property or tracts of land with the approval of
the President and the Attorney General of the United States, and without
any expense whatsoever to the United States, to perform any acts and
to execute any agreements necessary to grant the rights of way so required
but if at any time the land or the property the subject of the agreement
shall cease to be used for the purposes of the highway, the title in and
the jurisdiction over the land or property shall automatically revert to
the Government of the United States and the agreement shall so provide.
(g) Hereafter in the administration of the Federal Highway Act, and
Acts amendatory thereof or supplementary thereto, the first paragraph
of section 9 of said Act shall not apply to publicly owned toll bridges or
approaches thereto, operated by the highway department of any State,
subject, however, to the condition that all tolls received from the operation of any such bridge,less the actual cost of operation and maintenance,
shall be applied to the reapayment of the cost of its construction or
acquisition, and when the cost of its construction or acquisition shall
have been repaid in full, such bridge thereafter shall be maintained and
operated as a free bridge.
Sec. 205. (a) Not less than $50,000,000 of the amount made available by this Act shall be allotted for (A) national forest highways, (B)
national forest roads, trails, bridges, and related projects, (C) national
park roads and trails in national parks owned or authorized,(D) roads
on Indian reservations, and (E) roads through public lands, to be expended in the same manner as provided in paragraph (2) of section 301
of the Emergency Relief and Construction Act of 1932, in the case of
appropraitions allocated for such purposes, respectively, In such section
301, to remain available until expended.
(b) The President may also allot funds made available by this Act
for the construction, repair, and improvement of public highways in
Alaska, the Canal Zone, Puerto Rico, and the Virgin Islands.
Sec. 206. All contracts let for construction projects and all loans and
grants pursuant to this title shall contain such provisions as are
necessary to insure (1) that no convict labor shall be employed on
any such project;(2) that (except in executive, administrative, and supervisory positions),so far as practicable and feasible, no individual directly
employed on any such project shall be permitted to work more than 30
hours in any one week; (3) that all employees shall be paid just and
reasonable wages which shall be compensation sufficient to provide,
for the hours of labor as limited, a standard of living in decency and
comfort; (4) that in the employment of labor in connection with any
such project, preference shall be given, where they are qualified, to exservice men with dependents, and then in the following oder: (A) To
citizens of the United States and aliens who have declared their intention
of becoming citizens, who are bona fide residents of the political sub-
4347
division and (or) county in which the work is to be performed, and (B)
to citizens of the United States and aliens who have declared their intention of becoming citizens, who are bona fide residents of the State,
Territory, or district in which the work is to be performed: Provided,
That these preferences shall apply only where such labor is available
and qualified to perform the work to which the employment relates;
and (5) that the maximum of human labor shall be used in lieu of machinery wherever practicable and consistent with sound economy and
public advantage.
Sec. 207. (a) For the purpose of expediting the actual construction
of public works contemplated by this title and to provide a means of
financial assistance to persons under contract with the United States
to perform such construction, the President is authorized and empowered
through the Administrator or through such other agencies as he may
designate or create, to approve any assignment executed by any such
contractor, with the written consent of the surety or sureties upon the
penal bond executed in connection with his contract, to any national
or State bank, or his claim against the United States, or any part of such
claim, under such contract; and any assignment so approved shall be
valid for all purposes, notwithstanding the provisions of sections 3737
and 3477 of the Revised Statutes, as amended.
(b) The funds received by a contractor under any advances made
in consideration of any such assignment are hereby declared to be trust
funds in the hands of such contractor to be first applied to the payment
of claims of subcontractors, architects, engineers, surveyors, laborers,
and material men in connection with the project, to the payment of
premiums on the penal bond or bonds, and premiums accruing during
the construction of such project on insurance policies taken in connection
therewith. Any contractor and any officer, director, or agent of any such
contractor, who applies, or consents to the application of such funds
for any other purpose and fails to pay any claim or premium hereinbefore
mentioned,shall be deemed guilty of a misdemeanor and shall be punished
by a fine of not more than $1,000 or by imprisonment for not more than
one year, or by both such fine and imprisonment.
(c) Nothing in this section shall be considered as imposing upon the
assignee any obligation to see to the proper application of the funds
advanced by the assignee in consideration of such assignment.
Subsistence Homesteads.
r Sec. 208. To provide for aiding the redistribution of the overbalance
of population in industrial centers $25,000,000 is hereby made available
to the President, to be used by him through such agencies as he may
establish and under such regulations as he may make, for making loans
for and otherwise aiding in the purchase of subsistence homesteads.
The moneys collected as repayment of said loans shall constitute a revolving fund to be administered as directed by the President for the
purposes of this section.
Rules and Regulations.
F Sec. 209. The President is authorized to prescribe such rules and
regulations as may be necessary to carry out the purposes of this title,
and any violation of any such rule or regulation shall be punishable by
fine of not to exceed $500 or imprisonment not to exceed six montha,
or both.
Issue of Securities and Sinking Fund.
Sec. 210. (a) The Secretary of the Treasury is authorized to borrow,
from time to time, under the Second Liberty Bond Act, as amended,
such amounts as may be necessary to meet the expenditures authorized
by this Act, or to refund any obligations previously issued under this
section, and to issue therefor bonds, notes, certificates of indebtedness,
or Treasury bills of the United States.
(b) For each fiscal year beginning with the fiscal year 1934 there is
hereby appropriated, in addition to and as part of, the cumulative
sinking fund provided by section 6 of the Victory Liberty Loan Act,
as amended,out of any money in the Treasury not otherwise appropriated
for the purpose of such fund, an amount equal to 2)4 per centum of the
aggregate amount of the expenditures made out of appropriations made
or authorized under this Act as determined by the Secretary of the
Treasury.
Re-employment and Relief Taxes.
Sec. 211. (a) Effective as of the day following the date of the enactment of this Act,section 617 (a) of the Revenue Act of 1932 is amended
by striking out "1 cent" and inserting in lieu thereof "1% cent;."
(b) Effective as of the day following the date of the enactment of
this Act, section 617 (c) (2) of such Act is amended by adding at the
end thereof a new sentence to read as follows: "As used in this paragraph
the term 'benzol' does not include benzol sold for use otherwise than
as a fuel for the propulsion of motor vehicles, motor boats, or airplanes,
and otherwise than in the manufacture or production of such fuel."
Sec. 212. Titles IV and V of the Revenue Act of 1932 are amended
by striking out "1934" wherever appearing therein and by inserting
in lieu thereof "1935". Section 761 of the Revenue Act of 1932 is
further amended by striking out "and on July 1 1933" and inserting
In lieu thereof"and on July 1 1933 and on July 1 1934".
Sec. 213. (a) There is hereby imposed upon the receipt of dividends
(required to be included in the gross income of the recipient under the
provisions of the Revenue Act of 1932) by any person other than a
domestic corporation, an excise tax equal to 5 per centum of the amount
thereof, such tax to be deducted and withheld from such dividends by
the payor corporation. The tax imposed by this section shall not apply
to dividends declared before the date of the enactment of this Act.
(b) Every corporation required to deduct and withhold any tax under
this section shall, on or before the last day of the month following the
payment of the dividend, make return thereof and pay the tax to the
collector of the district in which its principal place of business is located,
or, if it has no principal place of business in the United States, to the
collector at Baltimore, Maryland.
(c) Every such corporation is hereby made liable for such tax and
is hereby indemnified against the claims and demands of any person for
the amount of any payment made in accordance with the provisions of
this section.
(d) The provisions of sections 115, 771 to 774, inclusive, and 1111
of the Revenue Act of 1932 shall be applicable with respect to the tax
Imposed by this section.
(e) The taxes imposed by this section shall not apply to the dividends
of any corporation enumerated in section 103 of the Revenue Act of
1932.
Sec. 214. Section 104 of the Revenue Act of 1932 is amended by
striking out the words "the surtax" wherever occurring in such section
and inserting in lieu thereof "any internal-revenue tax." The heading
of such section is amended by striking out "surtaxes" and inserting in
lieu there"internal-revenue taxes." Section 13(c) of such Act is amended
by striking out "surtax" and inserting in lieu thereof "internal-revenue
tax."
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Financial Chronicle
Sec. 215. (a) For each year ending June 30 there is hereby imposed
upon every domestic corporation with respect to carrying on or doing
business for any part of such year an excise tax of $1 for each $1,000
of the adjusted declared value of its capital stock.
(b) For each year ending June 30 there is hereby imposed upon every
foreign corporation with respect to carrying on or doing business in the
United States for any part of such year an excise tax equivalent to $1
for each $1,000 of the adjusted declared value of capital employed in
the transaction of its business in the United States.
(c) The taxes imposed by this section shall not apply—
(1) to any corporation enumerated in section 103 of the Revenue
Act of 1932;
(2) to any insurance company subject to the tax imposed by section
201 or 204 of such Act;
(3) to any domestic corporation in respect of the year ending June 30
1933, if it did not carry on or do business during a part of the period
from the date of the enactment of this Act to June 30 1933, both dates
inclusive; or
(4) to any foreign corporation in respect of the year ending June 30
1933, if it did not carry on or do business in the United States during
a part of the period from the date of the enactment of this Act to June 30
1933, both dates inclusive.
(d) Every corporation liable for tax under this section shall make
a return under oath within one month after the close of the year with
respect to which such tax is imposed to the collector for the district in
which is located its principal place of business or, if it has no principal
place of business in the United States, then to the collector at Baltimore,
Maryland. Such return shall contain such information and be made in
such manner as the Commissioner with the approval of the Secretary
may by regulations prescribe. The tax shall, without assessment by the
Commissioner or notice from the collector, be due and payable to the
collector before the expiration of the period for filing the return. If
the tax is not paid when due, there shall be added as part of the tax interest at the rate of 1 per centum a month from the time when the tax
became due until paid. All provisions of law (including penalties)
applicable in respect of the taxes imposed by section 600 of the Revenue
Act of 1926 shall, in so far as not inconsistent with this section, be applicable in respect of the taxes imposed by this section. The Commissioner
may extent the time for making the returns and paying the taxes imposed
by this section, under such rules and regulations as he may prescribe
with the approval of the Secretary, but no such extension shall be for
more than sixty days.
(e) Returns required to be filed for the purpose of the tax imposed
by this section shall be open to inspection in the same manner, to the
same extent, and subject to the same provisions of law, including penalties, as returns made under title II of the Revenue Act of 1926.
(f) For the first year ending June 30 in respect of which a tax is imposed by this section upon any corporation, the adjusted declared
value shall be the value, as declared by the corporation in its first return
under this section (which declaration of value cannot be amended), as
of the close of its last income-tax taxable year ending at or prior to the
close of the year for which the tax is imposed by this section (or as of the
date of organization in the case of a corporation baying no income-tax
taxable year ending at or prior to the close of the year for which the
tax is imposed by this section). For any subsequent year ending June 30
the adjusted declared value in the case of a domestic corporation shall
be the original declared value plus (1) the cash and fair market value of
property paid in for stock or shares, (2) paid-in surplus and contributions to capital, and (3) earnings and profits, and minus (A) the value of
property distributed in liquidation to shareholders, (B) distributions of
earnings and profits, and (C)deficits, whether operating or non-operating;
each adjustment being made for the period from the date as of which
the original declared value was declared to the close of its last incometax taxable year ending at or prior to the close of the year for which
the tax is imposed by this section. For any subsequent year ending
June 30, the adjusted declared value in the case of a foreign corporation
shall be the original declared value adjusted, in accordance with regulations prescribed by the Commissioner with the approval of the Sercetary,
to reflect increases or decreases (for the period specified In the preceding
sentence) in the capital employed in the transaction of its business in
the United States.
(g) The terms used in this section shall have the same meaning as
when used In the Revenue Act of 1932.
See. 216. (a) There is hereby imposed upon the net income of every
corporation, for each income-tax taxable year ending after the close
of the first year in respect of which it is taxable under section 215, an
excess-profits tax equivalent to 5 per centum of such portion of its net
Income for such income-tax taxable year as is in excess of 1234 per centum
of the adjusted declared value of its capital stock (or in the case of a
foreign corporation the adjusted declared value of capital employed in
the transaction of its business in the United States) as of the close of the
preceding income-tax taxable year (or as of the date of organization if
it had no preceding income-tax taxable year) determined as provided
in section 215. The terms used in this section shall have the same meaning as when used in the Revenue Act of 1932.
(b) The tax imposed by this section shall be assessed, collected, and
paid in the same manner, and shall be subject to the same provisions of
law (including penalties) as the taxes imposed by title I of the Revenue
Act of 1932.
Sect. 217. (a) The President shall proclaim the date of—
(1) the close of the first fiscal year ending June 30 of any year after
the year 1933, during which the total receipts of the United States
(excluding public-debt receipts) exceed its total expenditures (excluding
public-debt expenditures other than those chargeable against such
receipts), or
(2) the repeal of the eighteenth amendment to the Constitution,
whichever is the earlier.
(b) Effective as of the 1st day of the calendar year following the date
so proclaimed section 617(a) of the Revenue Act of 1932, as amended,
Is amended by striking out "13i cents" and inserting in lieu thereof
"1 cent."
(c) The tax on dividends imposed by section 213 shall not apply to
any dividends declared on or after the 1st day of the calendar year
following the date so proclaimed.
(d) The capital-stock tax imposed by section 215 shall not apply to
any taxpayer in respect of any year beginning on or after the 1st day
of July following the date so proclaimed.
(e) The excess-profits tax imposed by section 216 shall not apply to
any taxpayer in respect of any taxable year after its taxable year during
which the date so proclaimed occurs.
Sec. 218. (a) Effective as of Jan. 1 1933, sections 117, 23(1), 169,
187 and 205 of the Revenue Act of 1932 are repealed.
(b) Effective as of January 1 1933, section 23(r) (2) of the Revenue
Act of 1932 is repealed.
June 24 1933
(c) Effective as of Jan. 11933, section 23(r) (3) of the Revenue Act
of 1932 is amended by striking out all after the word "Territory" and
inserting a period.
(d) Effective as of Jan. 11933, section 182(a) of the Revenue Act of
1932 is amended by inserting at the end thereof a new sentence as follows:
"No part of any loss disallowed to a partnership as a deduction by section 23(r) shall be allowed as a deduction to a member of such partnership
In computing net income."
(e) Effective as of January 1, 1933, section 141 (c) of the Revenue
Act of 1932 is amended by strikityg out "except that for the taxable
years 1932 and 1933 there shall be added to the rate of tax prescribed by
sections 13(a), 201(b), and 204(a), a rate of three-fourths of 1 per centum"
and inserting in lieu thereof the following: "except that for the taxable
Years 1932 and 1933 there shall be added to the rate of tax prescribed
by sections 13(a), 201(b), and 204(a), a rate of three-fourths of 1 per
centum and except that for the taxable years 1934 and 1935 there shall
be added to the rate of tax prescribed by sections 13(a), 201(b), and
204(a). a rate of I per centum."
(f) No interest shall be assessed or collected for any period prior to
Sept. 15 1933, upon such portion of any amount determined as a deficiency in income taxes as is attributable solely to the amendments made
to the Revenue Act of 1932 by this section.
(g) In cases where the effect of this section is to require for a taxable
Year ending prior to June 30 1933, the making of an income-tax return
not otherwise required by law. the time for making the return and paying the tax shall be the same as if the return was for a fiscal year ending
June 30 1933.
(h) Section 55 of the Revenue Act of 1932 is amended by inserting
before the period at the end thereof a semicolon and the following:
"and all returns made under this Act after the date of enactment of the
National Industrial Recovery Act shall constitute public records and
shall be open to public examination and inspection to such extent as
shall be authorized in rules and regulations promulgated by the President."
Sec. 219. Section 599 (a)(I) of the Revenue Act of 1926, as amended,
is amended by striking out the period at the end of the second sentence
thereof and inserting in lieu thereof a comma and the following: "except
that no tax shall be imposed in the case of persons admitted free to any
spoken play (not a mechanical reproduction), whether or not set to
music or with musical parts or accompaniments, which is a consecutive
narrative interpreted by a single set of characters, all necessary to the
development of the plot, in two or more acts, the performance consuming more than 1 hour and 45 minutes of time."
Appropriation.
Sec. 220. For the purposes of this Act, there is hereby authorized
to be appropriated, out of any money in the Treasury not otherwise
appropriated, the sum of $3,300,000,000. The President is authorized
to allocate so much of said sum, not in excess of $100.000,000, as he
may determine to be necessary for expenditures in carrying out the
Agricultural Adjustment Act and the purposes, powers, and functions
heretofore and hereafter conferred upon the Farm Credit Administration.
Sec. 221. Section 7 of the Agricultural Adjustment Act, approved
May 12 1933, is amended by striking out all of its present terms and
provisions and substituting therefor the following:
"Sec. 7. The Secretary shall sell the cotton held by him at his discretion, but subject to the foregoing provisions: Provided, That he
shall dispose of all cotton held by him by March 1 1936: Provided further,
That, notwithstanding the provisions of section 6, the Secretary shall
have authority to enter into option contracts with producers of cotton
to sell to the producers such cotton held by him, in such amounts and
at such prices and upon such terms and conditions as the Secretary
may deem advisable, in combination with rental or benefit payments
provided for in part 2 of this title.
"Notwithstanding any provisions of existing law, the Secretary of
Agriculture may in the administration of the Agricultural Adjustment
Act make public such information as he deems necessary in order to
effectuate the purposes of such Act."
TITLE III—AMENDMENTS TO EMERGENCY RELIEF AND
CONSTRUCTION ACT AND MISCELLANEOUS PROVISIONS.
Section 301. After the expiration of ten days after tile date upon
which the Administrator has qualified and taken office, (1) no application shall be approved by the Reconstruction Finance Corporation under
the provisions of subsection (a) of section 201 of the Emergency Relief
and Construction Act of 1932, as amended, and (2) the Administrator
shall have access to all applications, files and records of the Reconstruction Finance Corporation relating to loans and contracts and the administration of funds under such subsection: Provided, That the Reconstruction Finance Corporation may issue funds to a borrower under
such subsection (a) prior to January 23 1939, under the terms of any
agreement or any commitment to bid upon or purchase bonds entered
into with such borrower pursuant to an application approved prior to
the date of termination, under this section, of the power of the Reconstruction Finance Corporation to approve applications.
Decrease of Borrowing Power of Reconstruction Finance Corporation.
Sec. 302. The amount of notes, debentures, bonds, or other such
obligations which the Reconstruction Finance Corporation is authorized and empowered under section 9 of the Reconstruction Finance
Corporation Act, as amended, to have outstanding at any one time is
decreased by $400,000,000.
Separability Clause.
Sec. 303. If any provision of this Act, or the application thereof to
any person or cirsumstances, is held invalid, the remainder of the Act,
and the application of such provision to other persons or circumstances,
shall not be affected thereby.
Short Title.
See. 304. This Act may be cited as the "National Industrial Recovery
Act."
New York State Bankers Association to Hold 40th
Annual Convention at Lake George, N. Y., June
26 and 27.
The 40th annual convention of the New York State
Bankers Association will be held the coming week at The
Sagamore, Lake George, N. Y., June 26 and 27. The
program calls for a business session on the morning of June
26, a round table discussion in the evening, a business session
on the morning of June 27 with a banquet in the evening.
The newly enacted Glass-Steagall bill, and particularly the
deposit insurance provisions will it is stated come up for
discussion.
Volume 136
Financial Chronicle
4349
Text of Railroad Relief Act—Provides for Federal Co-Ordinator to Reorganize
Transportation System, and Effect Certain Carrier Consolidations.
With the approval on June 16 by President Roosevelt of
the bill "to relieve the existing National emergency in relation to inter-State railroad transportation" (generally known
as the railroad relief bill) the measure became a law. Details of the final Congressional action on the bill, and its
signing by President Roosevelt were noted in these columns
June 17, page 4195. The following is the text of the Act
as signed by the President:
[S. 15801
AN ACT.
To relieve the existing national emergency in relation to Inter-State
railroad transportation, and to amend sections 5, 15a, and 19a of the
Inter-State Commerce Act, as amended.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, That this Act may be cited as
the "Emergency Railroad Transportation Act, 1933."
TITLE I—EMERGENCY POWERS.
Section 1. As used in this title—
(a) The term "Commission" means the Inter-State Commerce Commission.
(b) The term "Co-ordinator" means the Federal Co-ordinator of
Transportation hereinafter provided for.
(c) The term "committee" means any one of the regional co-ordinating committees hereinafter provided for.
(d) The term "carrier" means any common carrier by railroad subject
to the provisions of the Inter-State Commerce Act,as amended,including
any receiver or trustee thereof.
(e) The term "subsidiary" means any company which is directly or
indirectly controlled by, or affiliated with, any carrier or carriers. For
the purpose of the foregoing definition a company shall be deemed to
be affiliated with a carrier if so affiliated within the meaning of paragraph
(8) of section 5 of the Inter-State Commerce Act,as amended by this Act.
(f) The term "employee" includes every person in the service of a
carrier (subject to its continuing authority to supervise and direct the
manner of rendition of his service) who performs any work defined as
that of an employee or subordinate official in accordance with the
provisions of the Railway Labor Act.
(g) The term "State commission" means the commission, board, or
official, by whatever name designated, exercising power to regulate the
rates or service of common carriers by railroad under the laws of any
State.
Sec. 2. In order to foster and protect inter-State commerce in relation
to railroad transportation by preventing and relieving obstructions and
burdens thereon resulting from the present acute economic emergency,
and in order to safeguard and maintain an adequate national system of
transportation, there is hereby created the office of Federal Co-ordinator
of Transportation, who shall be appointed by the President, by and with
the advice and consent of the Senate, or be designated by the President
from the membership of the Commission. If so designated, the Coordinator shall be relieved from other duties as Commissioner during his
term of service to such extent as the President may direct; except that
the Co-ordinator shall not sit as a member of the Commission in any
proceedings for the review or suspension of any order issued by him as
Co-ordinator. The Co-ordinator shall have such powers and duties as
are hereinafter set forth and prescribed, and may, with the approval of
the President, and without regard to the civil service laws and the
Classification Act of 1923,as amended,appoint and fix the compensation
of such assistants and agents, in addition to the assistance provided by
the Commission, as may be necessary to the performance of his duties
under this Act. The office of the Co-ordinator shall be in Washington,
District of Columbia, and the Commission shall provide such office
space,facilities, and assistance as he may request and it is able to furnish.
The Co-ordinator shall receive such compensation as the President shall
fix, except that if designated from the Commission, he shall receive no
compensation in addition to that which he receives as a member of the
Commission.
Sec. 3. The Co-ordinator shall divide the lines of the carriers into
three groups, to wit, an eastern group, a southern group, and a western
group, and may from time to time make such changes or subdivisions
In such groups as he may deem to be necessary or desirable. At the
earliest practicable date after the Co-ordinator shall have initially
designated such groups, three regional co-ordinating committees shall be
created, one for each group, and each committee shall consist of five
regular members and two special members. The carriers in each group,
acting each through its board of directors or its receiver or receivers or
trustee or trustees or through an officer or officers designated for the
purpose by such board, shall select the regular members of the committee representing that group, and shall prescribe the rules under which
such committee shall operate; but no railroad system shall have more
than one representative on any such committee. In such selection each
carrier shall have a vote in proportion to its mileage lying within the
group. The two special members of each committee shall be selected
in such manner as the Co-ordinator may approve, one to represent the
steam railroads within the group which had in 1932 railway operating
revenues of less than $1,000,000 and the other to represent electric railways within the group not owned by a steam railroad or operated as a
part of a general steam railroad system of transportation. Each such
special member shall have reasonable notice of all meetings of his committee at which any matter affecting any carrier which he represents is
to be considered, and may participate in the consideration and disposition
of such matter. Members of the committees may be removed from
office and vacancies may be filled in like manner.
Sec. 4. The purposes of this title are (1) to encourage and promote
or require action on the part of the carriers and of subsidiaries subject
to the Inter-State Commerce Act, as amended, which will (a) avoid unnecessary duplication of services and facilities of whatsoever nature and
permit the joint use of terminals and trackage incident thereto or requisite
to such joint use: Provided, That no routes now existing shall be eliminated
except with the consent of all participating lines or upon order of the
Co-ordinator,(b) control allowance::, accessorial services and the charges
therefor, and other practices affecting service or operation, to the end
that undue impairment of net earnings may be prevented, and (c) avoid
other wastes and preventable expense;(2)to promote financial reorganization of the carriers, with due regard to legal rights, so as to reduce fixed
charges to the extent required by the public interest and improve carrier
credit; and (3) to provide for the immediate study of other means of
improving conditions surrounding transportation in all its forms and the
preparation of plans therefor.
Sec. 5. It shall be the duty of the committees on their own initiative,
severally within each group and jointly where more than one group is
affected, to carry out the purposes set forth in subdivision (1) of section
4, so far as such action can be voluntarily accomplished by the carriers.
In such instances as the committees are unable, for any reason, legal or
otherwise, to carry out such purposes by such voluntary action, they
shall recommend to the Co-ordinator that he give appropriate directions
to the carriers or subsidiaries subject to the Inter-State Commerce Act,
as amended, by order; and the Co-ordinator is hereby authorized and
directed to issue and enforce such orders if he finds them to be consistent
with the public interest and in furtherance of the purposes of this title.
Sec. 6. (a) The Co-ordinator shall confer freely with the committees
and give them the benefit of his advice and assistance. At his request.
the committees, the carriers, the subsidiaries, and the Commission shall
furnish him, or his assistants and agents, such information and reports
as he may desire in investigating any matter within the scope of his
duties under this title; and the Co-ordinator, his assistants, and agents,
and the Commission,shall at all times have access to all accounts,records,
and memoranda of the carriers and subsidiaries. If, in any instance, a
committee has not acted with respect to any matter which the Coordinator has brought to its attention and upon which he is of the opinion
that it should have acted, under the provisions of section 5, he is hereby
authorized and directed to issue and enforce such order, giving appropriate directions to the carriers and subsidiaries subject to the InterState Commerce Act, as amended, with respect to such matter, as he
shall find to be consistent with the public interest.
(b) Insofar as may be necessary for the purposes of this title, the Commission and the members and examiners thereof shall have the same
power to administer oaths and require by subpena the attendance and
testimony of witnesses and the production of books, papers, tariffs,
contracts, agreements, and documents and to take testimony by deposition, relating to any matter under investigation, as though such matter
arose under the Inter-State Commerce Act, as amended and supplemented; and any person subpenaed or testifying in connection with any
matter under investigation under this title shall have the same rights,
privileges, and immunities and be subject to the same duties, liabilities,
and penalties as are provided in the case of persons subpenaed or testifying in connection with any matter under investigation under the InterState Commerce Act, as amended.
Sec. 7. (a) A labor committee for each regional group of carriers may
be selected by those railroad labor organization which, as representatives
duly designated and authorized to act in accordance with the requirements of the Railway Labor Act, entered into the agreements of Jan. 31
1932, and Dec. 21 1932, with duly authorized representatives of the
carriers, determining the wage payments of the employees of the carriers.
A similar labor committee for each regional group of carriers may be
selected by such other railroad labor organizations as may be duly
designated and authorized to represent employees in accordance with the
requirements of the Railway Labor Act. It shall be the duty of the
regional co-ordinating committees and the Co-ordinator to give reasonable
notice to, and to confer with, the appropriate regional labor committee
or committees upon the subject matter prior to taking any action or
issuing any order which will affect the interest of the employees, and to
afford the said labor committee or committees reasonable opportunity
to present views upon said contemplated action or order.
(b) The number of employees in the service of a carrier shall not
be reduced by reason of any action taken pursuant to the authority
of this title below the number as shown by the pay rolls of employees
in service during the month of May 1933, after deducting the number
who have been removed from the pay rolls after the effective date of this
Act by reason of death, normal retirements, or resignation, but not more
in any one year than 5 per centum of said number in service during May
1933; nor shall any employee in such service be deprived of employment
such as he had during said month of May or be in a worse position with
respect to his compensation for such employment, by reason of any
action taken pursuant to the authority conferred by this title.
(c) The Co-ordinator is authorized and directed to establish regional
boards of adjustment whenever and wherever action taken pursuant to
the authority conferred by this title creates conditions that make necessary such boards of adjustment to settle controversies between carries
and employees. Carriers and their employees shall have equal representation on such boards of adjustment for settlement of such controversies,
and said boards shall exercise the functions of boards of adjustment
Provided for by the Railway Labor Act.
(d) The Co-ordinator is authorized and directed to provide means
for determining the amount of, and to require the carriers to make
just compensation for, property losses and expenses imposed upon employees by reason of transfers of work from one locality to another in
carrying out the purposes of this title.
(e) Carriers, whether under control of a judge, trustee, receiver, or
private management, shall be required to comply with the provisions
of the Railway Labor Act and with the provisions of section 77, paragraphs (o), (p), and (q), of the Act approved March 3 1933, entitled
"An Act to amend an Act entitled 'An Act to establish a uniform system
of bankruptcy throughout the United States', approved July 1 1898,
and Acts amendatory thereof and supplementary thereto."
Sec. 8. Any order issued by the Co-ordinator pursuant to this title
shall be made public in such reasonable manner as he may determine
and shall become effective as of such date, not less than 20 days from
the date of such publication, as the Co-ordinator shall prescribe in the
order; and such order shall remain in effect until it is vacated by him
or suspended or set aside by the Commission or other lawful authority
as hereinafter provided, and such order may include provision for the
creation and administration of such just pooling arrangements or for
such just compensation for the use of property or for carrier services as
he may deem necessary or desirable and in furtherance of the purposes
of this title.
Sec. 9. Any interested party, including, among others, any carrier,
subsidiary, shipper, or employee, or any group of carriers, shippers, or
employees, or any State commission, or the Governor of any State,
or the official representative or representatives of any political subdivision thereof, dissatisfied with any order of the Co-ordinator may,
at any time prior to the effective date of the order, file a petition with
the Commission asking that such order be reviewed and suspended
pending such review, and stating fully the reasons therefor. Such
petitions shall be governed by such general rules as the Commission may
establish. If the Commission, upon considering such petition and any
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answer or answers thereto, finds reason to believe that the order may be
unjust to the petitioner or inconsistent with the public interest, the
Commission is hereby authorized to grant such review and, in its discretion, the Commission may suspend the order if it finds immediate
enforcement thereof would result in irreparable damage to the petitioner
or work grave injury to the public interest, but if the Commission sus)ends an order, it shall expedite the hearing and decision on that order
as much as possible. Thereupon the Commission shall, after due notice
and a public hearing, review the order and take such action in accord
with the purposes of this title as it finds to be just and consistent with the
public interest, either confirming the order or setting it aside or reissuing It in modified form, and any order so confirmed or reissued shall
thereafter remain in effect until vacated or modified by the Commission.
Sec. 10. (a) The carriers or subsidiaries subject to the Inter-State
Commerce Act, as amended, affected by any order of the Co-ordinator
or Commission made pursuant to this title shall, so long as such order
is in effect, be, and they are hereby, relieved from the operation of the
anti-trust laws,as designated in section 1 of the Act entitled "An Act to
supplement existing laws against unlawful restraints and monopolies,
and for other purposes," approved Oct. 15 1914, and of all other restraints or prohibitions by law, State or Federal, other than such as are
for the protection of the public health or safety, in so far as may be
necessary to enable them to do anything authorized or required by such
order made pursuant to this title: Provided, however, That nothing herein
shall be construed to repeal, amend, suspend, or modify any of the
requirements of the Railway Labor Act or the duties and obligations
Imposed thereunder or through contracts entered into in accordance with
the provisions of said Act.
(b) The Co-ordinator shall issue no order which shall have the effect
of relieving any carrier or subsidiary from the operation of the law of
any State or of any order of any State commission until he has advised
the State commission of said State, or the Governor of said State if
there be no such commission, that such order is in contemplation, and
shall afford the State commission or Governor so notified reasonable
opportunity to present views and information bearing upon such contemplated order, nor unless such order is necessary, in his opinion, to
prevent or remove an obstruction to or a burden upon inter-State commerce.
Sec. 11. Nothing in this title shall be construed to relieve any carrier
from any contractual obligation which it may have assumed, Prior to
the enactment of this Act, with regard to the location or maintenance
of offices, shops, or roundhouses at any point.
Sec. 12. The willful failure or refusal of any carrier or subsidiary or
of any officer or employee of any carrier or subsidiary to comply with the
terms of any order of the Co-ordinator or of the Commission made
pursuant to this title shall be a misdemeanor,and upon conviction thereof
the carrier, subsidiary, or person offending shall be subject to a fine of
not less than $1,000 or more than $20,000 for each offense, and each day
during which such carrier, subsidiary, or person shall willfully fail or
refuse to comply with the terms of such order shall constitute a separate
offense. It shall be the duty of any district attorney of the United States
to whom the Co-ordinator or the Commission may apply to institute in
the proper court and to prosecute under the direction of the AttorneyGeneral of the United States all necessary proceedings for the enforcement of the provisions of this title and for the punishment of all violations
thereof, and the costs and expenses of such prosecution shall be paid
out of the appropriation for the expense of the courts of the United
States: Provided, That nothing in this title shall be construed to require
any employee or officer of any carrier to render labor or service without
his consent, or to authorize the issuance of any orders requiring such
service, or to make illegal the failure or refusal of any employee individually, or any number of employees collectively, to render labor or
services.
Sec. 13. It shall further be the duty of the Co-ordinator, and he
is hereby authorized and directed, forthwith to investigate and consider
means, not provided for in this title, of improving transportation conditions throughout the country, including cost finding in rail transportation and the ability, financial or otherwise, of the carriers to improve
their properties and furnish service and charge rates which will promote
the commerce and industry of the country and including, also the
stability of railroad labor employment and other improvement of railroad labor conditions and relations; and from time to time be shall
submit to the Commission such recommendations calling for further
legislation to these ends as he may deem necessary or desirable in the
public interest. The Commission shall promptly transmit such recommendations, together with its comments thereon, to the President and
to the Congress.
Sec. 14. The expenses of the Co-ordinator except so far as they are
borne by the Commission in accordance with the provisions of section 2,
but not including the expenses of the co-ordinating committees, shall
be allowed and paid, on the presentation of itemized vouchers therefor
approved by the Co-ordinator, out of a fund obtained from assessments
on the carriers, and said fund is hereby appropriated for the payment of
such expenses. It shall be the duty of each carrier, within 30 days after
the date of enactment of this Act, to pay into this fund, for the first
year of the operation of this title, one and one-half dollars for every mile
of road operated by it on Dec. 31 1932, as reported to the Commission,
and to pay into said fund within 30 days after the expiration of such
year a proportional amount covering any period of extension of this
title by proclamation of the President under section 17, and it shall
be the duty of the Secretary of the Treasury to collect such assessments.
Any amount remaining in the fund when this title ceases to have effect
shall be returned by the Secretary of the Treasury to the carriers in
proportion to their contributions. The carriers and the Pullman Co.
shall be permitted, anything in the Inter-State Commerce Act, as
amended, to the contrary notwithstanding, to provide free transportation and other carrier service to the Co-ordinator and his assistants and
agents and to the employees of the Commission when engaged in the
service of the Co-ordinator.
Sec. 15. The Commission shall not approve a loan to a carrier under
the Reconstruction Finance Corporation Act, as amended, if it is of the
opinion that such carrier is in need of financial reorganization in the
public interest: Provided, however, That the term "carrier" as used in
this section shall not include a receiver or trustee.
Sec. 16. Any final order made under this title shall be subject to
the same right of relief in court by any party in interest as is now provided
in respect to orders of the Commission made under the Inter-State Commerce Act, as amended. The provisions of the Urgent Deficiencies
Appropriation Act of Oct. 22 1913 (38 Stat.L. 219), shall be applicable
to any proceeding in court brought to suspend or set aside any order of
the Co-ordinator or of the Commission entered pursuant to the provisions of this title.
Sec. 17. This title shall cease to have effect at the end of one year
after the effective date, unless extended by a proclamation of the President for one year or any part thereof, but orders of the Co-ordinator
June
24 1933
or of the Commission made thereunder shall continue in effect until
vacated by the Commission or set aside by other lawful authority, but
notwithstanding the provisions of section 10 no such order shall operate
to relieve any carrier from the effect of any State law or of any order of a
State commission enacted or made after this title ceases to have effect.
TITLE II—AMENDMENTS TO INTER-STATE
COMMERCE ACT.
Section 201. Section 5 of the Inter-State Commerce Act, as amended
(U.S.C., title 49, sec. 5), is amended by striking out paragraphs (2)
and (3) and by renumbering paragraphs (4) and (5) as paragraphs
(2) and (3), respectively, and by striking out the last sentence of the
paragraph so renumbered as paragraph (3).
Sec. 202. Such section 5 is further amended by striking out paras,:(7), and (8), and by inserting in lieu thereof the following
)
(8h
parauap
graphs
"(4) (a) It shall be lawful, with the approval and authorization of
the Commission, as provided in subdivision (b),for two or more carriers
to consolidate or merge their properties, or any part thereof, into one
corporation for the ownership, management, and operation of the
properties theretofore in separate ownership; or for any carrier, or two
or more carriers jointly, to purchase, lease, or contract to operate the
properties, or any part thereof, of another; or for any carrier, or two or
more carriers jointly, to acquire control of another through purchase
of its stock; or for a corporation which is not a carrier to acquire control
of two or more carriers through ownership of their stock; or for a corporation which is not a carrier and which has control of one or more carriers
to acquire control of another carrier through ownership of its stock.
"(b) Whenever a consolidation, merger,purchase,lease,operating contract, or acquisition of control Is proposed under subdivision (a), the
carrier or carriers or corporation seeking authority therefor shall present
an application to the Commission, and thereupon the Commission shall
notify the Governor of each State in which any part of the properties of
the carriers involved in the proposed transaction is situated, and also
such carriers and the applicant or applicants, of the time and place for
a public hearing. If after such hearing the Commission finds that, subject to such terms and conditions and such modifications as it shall find
to be just and reasonable, the proposed consolidation, merger, purchase,
lease, operating contract, or acquisition of control will be in harmony
with and in furtherance of the plan for the consolidation of railway
properties established pursuant to paragraph (3), and will promote the
public interest, it may enter an order approving and authorizing such
consolidation, merger, purchase, lease, operating contract, or acquisition
of control, upon the terms and conditions and with the modifications so
found to be just and reasonable.
"(5) Whenever a corporation which is not a carrier is authorized,
by an order entered under paragraph (4), to acquire control of any
carrier or of two or more carriers, such corporation thereafter shall,
to the extent provided by the Commission, for the purposes of paragraphs (1) to (10), inclusive, of section 20 (relating to reports, accounts,
and so forth, of carriers), including the penalties applicable in the case
of violations of such paragraphs, be considered as a common carrier
subject to the provisions of this Act, and for the purposes of paragraphs
(2) to (11), inclusive, of section 20a (relating to issues of securities and
assumptions of liability of carrieTs), including the penalties applicable
In the case of violations of such paragraphs, be considered as a 'carrier'
as such term is defined in paragraph (1) of such section, and be treated
as such by the Commission in the administration of the paragraphs
specified. In the application of such provisions of section 20a in the
case of any such corporation the Commission shall authorize the issue
or assumption applied for only if it finds that such issue or assumption
Is consistent with the proper performance by each carrier which is under
the control of such corporation of its service to the public as a common
carrier, will not impair the ability of any such carrier to perform such
service, and is otherwise compatible with the public interest.
"(6) It ehall be unlawful for any person, except as provided in paragraph (4), to accomplish or effectuate, or to participate in accomplishing
or effectuating, the control or management in a common interest of any
two or more carriers, however such result is attained, whether directly
or indirectly, by use of common directors, officers, or stockholders, a
holding or investment company or companies, a voting trust or trusts,
or in any other manner whatsoever. It shall be unlawful to continue
to maintain control or management accomplished or effectuated after
the enactment of this amendatory paragraph and in violation of its provisions. As used in this paragraph and paragraph (7), the words'control
or management' shall be construed to include the power to exercise control or management.
(7) For the purposes of paragraphs (8) and (11), but not in anywise
limiting the application thereof, any transaction shall be deemed to accomplish or effectuate the control or management in a common interest
of two carriers—
"(a) If such transaction is by a carrier, and if the effect of such transaction is to place such carrier and persons affiliated with it taken together, in control of another carrier.
"(b) If such transaction is by a person affiliated with a carrier, and if
the effect of such transaction is to place such carrier and persons affiliated
with it, taken together, in control of another carrier.
"(c) If such transaction is by two or more persons acting together,
one of whom is a carrier or is affiliated with a carrier, and if the effect
of such transactiod is to plate such persons and carriers and persons
affiliated with any oae of them and persons affiliated with any such
affiliated carrier, taken together, in control of another carrier.
be
"(8) For the purposes of paragraph (7) a person shall be held to
affiliated with a carrier if, by reason of the relationship of such person
circumstances
to such carrier (whether by reason of the method of, or
surrounding organization or operation, or whether established through
common directors, officers, or stockholders, a voting trust or trusts, a
holding or investment company or companies, or any other direct or indirect means), it is reasonable to believe that the affairs of any carrier
of which control may be acquired by such person will be managed in the
Interest of such other carrier.
"(9) For the purposes of paragraphs (6), (7), (8), and (11), wherever
reference is made to control it is immaterial whether such control is direct
or indirect. As used in this paragraph and paragraphs (7), (8), and (11)
'control' shall be construed to include the power to exercise
control.
"(10) The Commission is hereby authorized, upon complaint or upon
its own initiative without complaint, but after notice and hearing, to
investigate and determine whether any person is violating the provisions
of paragraph (8). If the Commission finds after such investigation that
such person is violating the provisions of such paragraph, it shall by order
require such person to take such action as may be neceo.cc In the
opinion of the Commission, to prevent continuance of such violation.
"(11) For the proper protection and in furtherance of the plan for the
consolidation of railway properties established pursuant to paragraph(3)
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Financial Chronicle
and the regulation of inter-State commerce in accordance therewith, the
Commission is hereby authorized, upon complaint or upon its own
initiative without complaint, but after notice and hearing, to investigate
and determine whether the holding by any person of stock or other share
capital of any carrier (unless acquired with the approval of the Commission) has the effect (a) of subjecting such carrier to the control of
another carrier or to common control with another carrier, and (b) of
preventing or hindering the carrying out of any part of such plan or of
impairing the independence, one of another, of the systems provided for
in such plan. If the Commission finds after such investigation that such
holding has the effects described, it shall by order provide for restricting
the exercise of the voting power of such person with respect to such stock
or otker share capital (by requiring the deposit thereof with a trustee, or
by other appropriate means) to the extent necessary to prevent such
holding from continuing to have such effects.
"(12) If in the course of any proceeding under this section before the
Commission, or of any proceeding before a court in enforcement of an
order entered by the Commission under this section, it appears that since
the beginning of such proceeding the plan for consolidation has been
reopened under paragraph (3) for changes or modifications with respect
to the allocation of the properties of any carrier involved in such proceeding, then such proceeding may be suspended.
"(13) The district courts of the United States shall have jurisdiction
upon the application of the Commission, alleging a violation of any of
the provisions of this section or disobedience of any other issued by the
Commission thereunder by any person, to issue such writs of injunction
or other proper process, mandatory or otherwise, as may be necessary
to restrain such person from violation of such provision or to compel
obedience to such order.
"(14) The Commission may from time to time,for good cause shown,
make such orders, supplemental to any order made under paragraph
(1), (4), (10), or (11), as it may deem necessary or appropriate.
"(15) The carriers and any corporation affected by any order made
under the foregoing provisions of this section shall be, and they are
hereby, relieved from the operation of the antitrust laws as designated
in section 1 of the Act entitled 'An Act to supplement existing laws
against unlawful restraints and monopolies, and for other purposes.'
approved Oct. 15 1914, and of all other restraints or prohibitions by or
Imposed under authority of law, State or Federal, insofar as may be
necessary to enable them to do anything authorized or required by such
order.
"(16), If any provision of the foregoing paragraphs of this section,
or the application thereof to any person or circumstances,is held invalid,
the other provisions of such paragraphs. and the application of such
provision or any other person or circumstances, shall not be affected
thereby.
"(17) As used in paragraphs (4) to (16), inclusive, the term 'person'
Includes an individual, partnership, association, joint-stock company,
or corporation, and the term 'carrier' means a carrier by railroad subject
to this Act".
Sec. 203. Such section 5 Is further amended by renumbering as paragraph (18) the paragraph added by the Act entitled "An Act to amend
section 407 of the Transportation Act of 1920," approved June 10 1921,
and by renumbering the remaining three paragraphs as paragraphs (19),
(20), and (21), respectively.
Sec.204. The provisions of the Inter-State Commerce Act,as amended,
and of all other applicable Federal statutes, as in force prior to the
enactment of this title, shall remain in force, as though this title had
not been enacted, with respect to the acquisition by any carrier, prior
to the enactment of this title, of the control of any other carrier or
carriers.
Sec. 205. Section 15a of the Inter-State Commerce Act, as amended
(U.S.C., title 49. sec. 15a), is amended to read as follows:
"Sec. 15a. (1) When used in this section, the term 'rates' means
rates, fares, and charges, and all classifications, ngulations, and practices relating thereto.
"(2) In the exercise of its power to prescribe just and reasonable
rates the Commission shall give due consideration, among other factors,
to the effect of rates on the movement of traffic; to the need, in the
public interest, of adequate and efficient railway transportation service at
the lowest cost consistent with the furnishing of such service; and to
the need of revenues sufficient to enable the carriers, under honest,
economical, and efficient management, to piovide such service."
Sec. 206. (a) All moneys which were recoverable by and payable
to the Inter-State Commerce Commission, under paragraph (6) of section 15a of the Inter-State Commerce Act, as in force prior to the enactment of this title, shall cease to be so recoverable and payable; and all
proceedings pending for the recovery of any such moneys shall be
terminated. The general railroad contingent fund established under such
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section shall be liquidated and the Secretary of the Treasury shall distribute the moneys in such fund among the carriers which have made
payments under such section, so that each such carrier shall receive an
amount bearing the same ratio to the total amount in such fund that the
total of amounts paid under such section by such carrier bears to the
total of amounts paid under such section by all carriers; except that if
the total amount in such fund exceeds the total of amounts paid under
such section by all carriers such excess shall be distributed among such
carriers upon the basis of the average rate of earnings (as determined by
the Secretary of the Treasury) on the investment of the moneys in such
fund and diffierneces in dates of payments by such carriers.
(b) The income, war-profits, and excess-profits tax liabilities for any
taxable period ending after Feb. 28 1920, of the carriers and corporations
whose income, war-profits, or excess-profits tax liabilities were affected
by section 15a of the Inter-State Commerce Act, as in force prior to the
enactment of this Act, shall be computed as if such section had never
been enacted, except that, in the case of carriers or corporations which
have made payments under paragraph (6) of such section, an amount
equal to such payments shall be excluded from gross income for the
taxable periods with respect to which they were made. All distributions
made to carriers In accordance with subdivision (a) of this section shall
be included in the gross income of the carriers for the taxable period
In which this Act is enacted. The provisions of this subdivision shall not
be held to affect (1) the statutes of limitations with respect to the assessment, collection, refund, or credit of income, war-profits or excessprofits taxes or (2) the liabilities for such taxes of any carriers or corporations if such liabilities were determined prior to the enactment of this
Act in accordance with section 1106 (b) of the Revenue Act of 1926 or
section 606 of the Revenue Act of 1928, or in accordance with a final
judgment of a court, an order of the Board of Tax Appeals which had
become final, or an offer in compromise duly accepted in accordance
with
Sec. 207. Paragraph (a) of section 19a of the Inter-State Commerce
fAocllto
,was
s
:amended (U.S.C., Title 49, Sec. 19a (a)), is amended to read as
"(a) That the Commission shall, as hereinafter provided, investigate.
ascertain, and report the value of all the property owned or used by
every common carrier subject to the provisions of this Act, except any
street suburban, or interurban electric railway which is not operated as
a part of a general steam railroad system of transportation; but the
Commission may in its discretion investigate, ascertain, and report the
vain, of the property owned or used by any such electric railway subject
to the provisions of this Act whenever in its judgment such action is
desirable in the public intere..t. To enable the Commission to make such
investigation and report, it is authorized to employ such experts and
other assistants as may be necessary. The Commission may appoint
examiners who shall have power to administer oaths,examins witnessess,
and take testimony. The Commission shall, subject to the exception
hereinbefore provided for in the case of electric railways, make an inventory which shall list the property of every common carrier subject to
the provisions of this Act in detail, and show the value thereof as hereinafter provided, and shall classify the physical property, as near,"
as practicable, in conformity with the classification of expenditures
for road and equipment, as prescribed by the Inter-State Commerce
Commission."
Sec. 208. Paragraphs (f) and (g) of such section 19a, as amended
(U.S.C., Title 49, Sec. 19a (f), (g), are amended to reas as follows:
"(f) -Upon completion of the original valuations herein provided for,
the Commission shall thereafter keep itself informed of all new construction, extensions, improvements, retirements, or other changes in the
condition, quantity, use, and classification of the property of all common carriers as to which original valuations have been made,and of the
cost of all additions and betterments thereto and of all changes in the
investment therein, and may keep itself informed of curerent changes
in costs and values of railroad properties, in order that it may have
available at all times the information deemed by it to be necessary to
enable it to revise and correct its previous inventories, classifications,
and values of the properties; and when deemed necessary, may revise,
correct, and supplement any of its inventories and valuations.
"(g) To enable the Commission to carry out the provisions of the
preceding paragraph, every common carrier subject to the provisions
of this Act shall make such reports and furnish such information as the
Commission may require."
Sec. 209. If any provision of this Act, or the application thereof to
any person or circumstances, is held invalid, the other provisions of this
Act or the application of such provision to any other person or circumstances shall not be affected thereby.
•
Approved, June 16 1933, 12:05 p. m.
Indications of Business Activity
THE STATE OF TRADE—COMMERCIAL EPITOME.
Friday Night, June 23 1933.
Trade continues to expand and there are no signs of a
let-up despite the fact that this is the usual time for a
slackening of business. Seasonal factors have been pushed
to the background. The decision of this country to let the
dollar seek its own level makes it apparent that the Administration will exert every effort to maintain the upward trend.
Steel output again showed an increase and the consumption
of electricity is now the largest since April 1931 The lumber
industry is more active with orders for new lumber exceeding
those for any week since October 1930. Bituminous coal
production is increasing. An encouraging feature, too, is
the increase in carloadings. They now exceed the 1932 level
by 12%. Coal, oil and other industries are making rapid
progress. Employment and wages continue to increase.
The Industry Control Administration is pushing forward
trade agreements looking to an increase in wages and shorter
working hours.
There was more interest shown in furniture and household furnishings. Radios, musical instruments and even
jewelry were in better demand. Consumer buying is larger
owing to a fear of an advance in prices in the near future.
Many retailers have already marked up stocks of staple,
goods which were being sold much below replacement costs.
There was a better demand for mattresses in anticipation
of an advance in prices. Special sales are reported of odd
pieces of furniture at below replacement costs in order to
clear the floors for the new fall displays. Sales of luggage
are the best of the year. Women's apparel was in better
demand and a good business is going on in men's clothing,
especially in summer wear. Retailers' stocks are not
adequate enough to meet the demand. Wholesale business
was more active with prices rising. Orders for women's
clothing exceed the usual seasonal trade. Nearly all branches
in the manufacturing industry report increased activity.
And the building industry is increasing a little. Sales of
real estate are more numerous. The tin plate industry is
4352
Financial Chronicle
operating at 100% of capacity with a good backlog. The
output of hardware trails orders. Textile machinery was
in better demand. Exports of coal, coke and farm machinery made material gains during May, and those of steel
were the largest since October 1930, totaling 123,069 gross
tons against 100,395 tons for April and 80,477 in May last
year. The glass industry showed more activity and is at
the highest level seen since the fall of 1931.
Commodity markets are all higher for the week. Coffee
and silver are the only exceptions. Cotton has risen since
last Friday 30 to 34 points under the influence of the Government's plan to reduce the acreage and some good buying.
Wheat reached new high levels owing to reports of damage
to the crop by hot and dry weather. Other grain also moved
into new high ground. Inflation talk has affected all markets. Sugar was more active and the feeling in the trade
is more hopeful that something beneficial will be done at
the conference to be held in Washington next week.
The weather during the week has been extremely warm,
and even hot in certain parts of the country-in the Mid
West, South West and North West. Hot blasts swept over
the dry prairies of Kansas and Nebraska, recording record
high temperatures. Wheat, oats, corn and other crops,
already damaged considerably, will be further injured in
many sections unless rains and lower temperatures come
quickly. There were numerous readings near or above 100 in
Illinois, Wisconsin,Iowa, Minnesota and Nebraska. Chicago
with cooling breezes from Lake Michigan recorded a temperature of 93 at 1 p. m. In the middle of the week temperatures
in many localities went even higher, but dropped a little the
last few days. Reports from the Prairie provinces of Canada
showed that the heat wave was also felt there. To-day it
was 67 to 82 degrees here. Overnight Baltimore had 64 to
80; Boston,52 to 62; Bismarck, N. D.,76 to 106; Birmingham
Ala., 68 to 96; Cairo, Ill., 68 to 92; Charlotte, N. C., 72 to
94; Chicago, 72 to 90; Cincinnati, 74 to 92; Concordia,
Kansas, 72 to 94; Des Moines, Ia., 70 to 94; Devils Lake,
N. D., 68 to 104; Cleveland, 62 to 72; Portland, Me., 54 to
60; Detroit, 60 to 76; Kansas City, 72 to 92; Huron, S. D.,
78 to 102; Indianapolis, 72 to 94; Phoenix, Arizona, 76 to 102;
Los Angeles, 58 to 76; San Francisco, 50 to 60; Seattle, 52 to
70; Montreal, 50 to 62 and at Winnipeg, 68 to 96.
Commodity Prices Gained Substantially During Week
Ended June 17 as Index of National Fertilizer
Association Hit New High for 1933.
Wholesale commodity prices advanced five points for the
week ended June 17, according to the index of The National
Fertilizer Association and reached a new high point for 1933.
The index advanced to 61.2, (the three-year average 19261928 equals 100) and is five points higher than a week ago,
11 points higher than a month ago and 12 points higher than
a year ago. In noting this on June 19, the Association
continued:
During the latest week seven of the major groups in the index advanced,
five declined and two showed no change. The advancing groups were
foods, fuel, including petroleum and its products, grains, feeds and livestock, textiles, miscellaneous commodities, house-furnishing goods and
Chemicals and drugs. The declining groups were metals, fats and oils,
agricultural implements, fertilizer materials and mixed fertilizers. The
foods and fuel groups showed the best gains.
Fifty-three commodities advanced during the latest week and 27 commodities declined. During the preceding week 24 commodities advanced
and 27 commodities declined. Among the important conirnoditlee that
advanced were cotton yarns, cotton hose, cotton underwear, wool, woolen
yarns, hemp,silk, linseed oil, tallow, milk, bread, ham, pork, fancy flour,
potatoes, canned tomatoes, apples, oranges, corn, oats, wheat, rye, barley,
Cottonseed meal, bran, heavy hogs, gasoline, which advanced sharply,
kerosene, hides, shoes, soap, leather, soda and camphor. Among the
Important commodities that declined were raw cotton, burlap, lard, butter,
eggs, raw sugar, beef, beans, canned peas, linseed meal, cattle, lambs.
Copper, zinc, tin, silver, coffee, rubber, automobile tires, sulphate of
ammonia and mixed fertilizers.
0-The index number and comparative weights for each of the 14 groups
listed in the index are shown in the table below:
WEEKLY WHOLESALE PRICE INDEX-BASED ON 476 COMMODITY
PRICES (1926-1928=100)
Group.
23.2
16.0
12.8
10.1
8.5
6.7
6.6
6.2
4.0
3.8
1.0
.4
.4
.3
Foods
Fuel
Grains, feeds and livestock
Textiles
Miscellaneous commodities
Automobiles
Building materials
Metals
House-furnishing goods
Fats and oils
Chemicals and drugs
Fertilizer materials
Mixed fertilizer
Agricultural Implements._
ton on
All croups combined
Latest
Week
June 17
1933.
Preceliac,
Week.
Month
Ago.
Year
Ago.
ovvamoot,
nnvcommo
Fer Cent
Each Group
Rears to the
Total;Indez.
61.6
48.4
47.3
55.9
62.7
84.4
71.9
73.9
75.2
50.4
87.2
64.7
65.9
90.2
61.1
48.1
50.0
51.4
60.4
84.4
71.6
70.6
75.2
52.6
87.2
64.0
65.9
90.2
59.7
64.9
41.3
40.7
59.5
87.7
72.1
71.0
78.3
36.1
87.6
67.9
71.9
92.1
81.2
60.7
60.1
60.0
June 24 1933
Department Store Sales in Metropolitan Area of New
York During First Half of June.
In the metropolitan area of New York department store
sales declined 1.2% during period from June 1 to June 15
1933 in comparison with same period in 1932, according to
the Federal Reserve Bank of New York in a report issued
June 22. In each period there were 13 shopping days. New
York and Brooklyn department stores reported a drop of
1.4% and department stores in Newark a drop of 0.1%.
Wholesale Prices Slightly Higher During Week Ended
June 17, According to United States Department
of Labor.
The Bureau of Labor Statistics of the Ti. S. Department
of Labor announces that its index numbers of wholesale
prices for the week ended June 17 stands at 64.5 as compared
with 64.0 for the week ended June 10 showing an increase
of approximately .8 of 1%. The Bureau added:
These index numbers are derived from price quotations of 784 commodities, weighted according to the importance of each commodity and
based on average prices for the year 1926 as 100.0.
The accompanying statement shows the index numbers of groups of
commodities for the weeks ended May 20, 27, and June 3, 10, and 17 1933:
INDEX NUMBERS OF WHOLESALE PRICES FOR WEEKS OF MAY 20,
27. AND JUNE 3, 10, AND 17 1933.
(1926=100.0)
Week Ended.
May 20. May 27. June 3. June 10. June 17.
77.9
55.3
61.2
77.9
71.1
72.9
71.9
58.9
52.4
60.3
78.9
56.2
61.0
78.1
71.5
73.2
71.9
58.8
53.2
61.0
79.9
57.5
61.1
78.2
71.8
73.2
71.9
59.2
52.5
61.0
80.9
58.7
60.8
78.7
72.9
73.8
72.4
59.5
52.8
61.0
82.8
60.2
61.4
78.9
73.4
73.8
72.8
60.6
63.0
63.3
63.8
64.0
64.5
50.9
59.9
Farm products
Foods
Hides and leather products
Textile products
Fuel and lighting
Metals and metal products
Building materials
Chemicals and drugs
Houseturnishing goods
Miscellaneous
All commodities
Loadings of Railroad Revenue Freight Again Rise.
The first 15 major carriers to report for the seven days
ended June 17 1933 loaded 252,972 cars of revenue freight,
as compared with 243,620 cars in the preceding week. and
223,455 cars in the corresponding period in 1932. With
the exception of the International Great Northern RR.,
all these roads showed increases over the week ended June 10
1933. Comparative statistics follow:
REVENUE FREIGHT LOADED AND RECEIVED FROM CONNECTIONS.
(Number of Cars.)
Loaded on Lines.
Reed from Connection*.
Weeks Ended.
17 June 10 June 18 June 17 June 10 June 18
1933. 1933. 1932. 1033. 1933. 1932.
June
Atchison Topeka & Santa Fe_ _
Chesapeake & Ohio
Chicago Burlington de Quincy RR.
Chicago M. St. P. & P. Ry
Chicago & North Western Ry__ _
Chicago R. I. & Pacific Ry
Gulf Coast Lines and subs
International Great Northern _ _
Missouri-Kansas-Texas Lines_
Missouri Pacific RR
New York Central Lines
Norfolk & Western Ry
Pennsylvania System
Pere Marquette Ry
Wabash Ry
20,093
19,962
13,920
17,759
14,831
13,890
1,567
4,414
5,006
13,651
42,809
17,780
57,527
4,860
4,903
18,312
19,855
13,919
17,292
14,574
12,791
1,543
4,888
4,736
12,850
41,104
16,685
55,407
4,748
4,876
20,699 3,877 3,858 3,680
15,045 8,499 8,376 5,706
13,249 5,784 5,849 5,152
15,014 6,515 6,000 5.768
13,177 7,654 7,754 6.499
13,632 8,022 7,753 7,994
2,413
836
865 1,048
2,016 1,488 1,402 1,727
5,243 2,323 1,981 2,351
12,497 7,501 7,160 6,769
36,105 54,337 51,074 45,320
12,875 4,038 4,010 3,112
51,682 35,883 34 492 29,186
:
•
•
4,590
5,218 7,159 6,868 7,177
252,972 243,620 223,455 153,894 147,442 131,489
Total
Not available.
TOTAL LOADINGS AND RECEIPTS FROM CONNECTIONS.
(Number of Cars.)
Weeks Ended.
Illinois Central System
St. Louis-San Francisco Ry
Total
June 17
1933.
June 10
1933.
June 18
1932.
25,178
13,093
23,941
12,341
22,946
12,364
38,271
3(1,282
35,310
Loading of revenue freight for the latest full week-that is,
for the week ended on June 10-totaled 564,546 cars, the
highest for any week so far this year, according to figures
compiled by the American Railway Association. This was an
increase of 56,312 cars above the preceding week, when
loadings were reduced due to the observance of Memorial
Day. It also was an increase of 62,861 cars above the same
week in 1932, but a decrease of 167,863 cars under the same
week in 1931. Comparisons show that the loading of all
conunodities for the week of June 10 increased over the
corresponding week last year with the exception of merchandise less than carload lot freight. Details for the week
ended June 10 1933 follow:
Miscellaneous freight loading for the week of June 10 totaled 218.123
cars, an increase of 21.741 cars above the preceding week, and an Increase of
22.467 cars above the corresponding week in 1932, but a decrease of 76.478
cars under the same week In 1931.
Financial Chronicle
Volume 136
Loading of merchandise less than carload lot freight totaled 167.996
cars, an increase of 20,004 cars above the preceding week, but 8,489 cars
below the corresponding week last year and 50,720 cars under the same
week two years ago.
Grain and grain products loading for the week totaled 35,917 cars, an
increase of 1.713 cars above the preceding week. 11,290 cars above the
corresponding week last year, and 4.958 cars above the same week in 1931.
In the western districts alone, grain and grain products loading for the
week ended June 10 totaled 25.786 cars, an Increase of 10,288 cars above
the same week last year.
Forest products loading totaled 24,352 cars, 1.569 cars above the preceding week, and 7,278 cars above the same week in 1932, but 6,194 cars
below the corresponding week in 1931.
Ore loading amounted to 9.973 cars, an increase of 1.456 cars above
the week before, and an increase of 6,832 cars above the corresponding week
in 1932, but 17,641 cars below the same week in 1931.
Coal loading amounted to 87,944 cars, an increase of 9.312 cars above
the preceding week, and an increase of 21,108 cars above the corresponding
week in 1932, but a decrease of 18,466 cars below the same week in 1931.
Coke loading amounted to 4,440 cars. 151 cars below the preceding week.
but 1,793 cars above the same week last year. It was, however. 1,022 cars
below the same week two years ago.
Live stock loading amounted to 15.801 cars, an increase of 668 cars above
the preceding week, and an increase of 582 cars above the same week last
year, but 2.300 cars below the same week two years ago. In the western
districts alone, loading of live stock for the week ended on June 10 totaled
11.890 cars, an increase of 320 cars compared with the same week last year.
All districts reported increases in the total loading of all commodities
compared with the same week in 1932 except the central western which
showed a small decrease. All districts reported reductions compared with
the same week in 1931.
4353
Loading of revenue freight in 1933 compared with the two previous
years follows:
1933.
1932.
1931.
Four weeks in January
1,910,496
2,266,771
2.873.211
Four weeks in February
1,957,981
2,243,221
2.834,119
Four weeks in March
1,841,202
2,280.837
2.936,928
Five weeks in April
2.504,745
2,774,134
3,757,863
Four weeks in May
2,127,841
2,088,088
2,958.784
Week ended June 3
508,234
447.412
761,084
Week ended June 10
564.546
501,685
732,409
Total
11,415,045
12.602.148
16.854,398
The foregoing, as noted, covers total loadings by the railroads of the United States for the week ended June 10. In
the table below we undertake to show also the loadings for
the separate roads and systems. It should be understood,
however, that in this case the figures are a week behind
those of the general totals-that is, are for the week ended
June 3. During the latter period a total of only 31 roads
showed decreases as compared with the corresponding week
last year. Among the most important carriers showing
increases over a year ago were the Pennsylvania System, the
Baltimore & Ohio RR., the Southern Ry. System, the New
York Central RR., the Chicago Milwaukee St. Paul &
Pacific Ry., the Chesapeake & Ohio Ry., the Louisville &
Nashville RR., the Norfolk & Western Ry., and the Chicago
& North Western Ry.
REVENUE FREIGHT LOADED AND RECEIVED FROM CONNECTIONS(NUMBER OF CARS)-WEEK ENDED JUNE 3.
Total Revenue
Freight Loaded.
Railroads.
1933.
Eastern DistrictGroup A:
Bangor & Aroostook
Boston & Albany
Boston & Maine
Central Vermont'
Maine Central
New York N.H. dr Hartford_ _ _
Rutland
1932.
Total Loads Received
from Connections.
1931.
1933.
1932.
1,165
2,507
6,628
817
2,365
8.932
545
1,448
2,411
6,123
582
2.241
8,689
540
1,239
4,004
10,566
758
3,409
14,749
649
224
4,150
8,584
2,445
2,038
9,400
855
208
3.765
8,087
2,194
2.119
8,976
933
22,999
22,034
35,375
27,696
26,282
4,056
6,816
9,619
109
1,071
5,976
1,662
16,656
1,423
234
232
4,015
6,180
8,784
124
1,007
5,454
861
14,059
1,725
313
252
7,040
10,807
13,211
216
1,640
10,074
2,295
26.412
2,073
474
417
5,618
4.836
11,724
1,415
702
5,837
110
22.599
1,782
25
151,
5,299
4,336
9,890
1,327
767
5,489
19
19.368
1,667
24
161
47,854
42.774
74,659
54,799
48,347
392
1,048
6,941
25
284
220
1,103
2,839
6,015
2,856
3,824
4,243
4,624
1,089
4,405
3,324
427
1,117
5,994
25
228
132
1,581
2,064
4,868
2,608
3,304
3,687
2,425
263
4,334
1,710
627
1,734
8,935
45
558
284
1.971
4,809
7,672
4,499
6,106
5,988
5,527
483
6,201
3,442
819
1,588
9,072
52
129
1,815
701
4.806
6,819
170
6,657
3,576
4,468
728
6,312
2,023
816
1,449
7,911
32
95
1,265
822
4.247
5,757
234
6,089
2,815
2,667
531
6,109
1,544
43.232
34,747
58,931
49.735
42,383
Grand total Eastern District... 114,085
99,555
168,965
132,230
117,012
Allegheny DistrictBaltimore & Ohio
Bessemer & Lake Erie
Buffalo Creek dr Gauley
Central RR. of New Jersey_ -Cornwall
Cumberland dr Pennsylvania __
Ligonier Valley
Long Island
Pennsylvania System
Reading Co
Union (Pittsburgh)
West Virginia Northern
Western Maryland
21,804
1,641
162
4,589
414
175
42
910
48,701
9,308
4,498
33
2,093
19,918
669
106
4,650
6
148
54
938
44,539
9,229
2,669
37
2,525
34.757
4,186
166
9,250
4
281
138
1,567
76.135
16,034
7,432
38
2,949
11,608
1,154
8
8,264
36
17
17
2,155
30,895
12,337
1,256
9,934
482
6
7,935
37
8
17
2,424
25,249
11,394
461
3,055
2,494
94,370
85,488
152,937
70.800
60,441
Total
Group B:
Delaware dr Hudson
Delaware Lackawanna & West_
Erie
Lehigh & Hudson River
Lehigh & New England
Lehigh Valley
Montour
New York Central
New York Ontario & Western._
Pittsburgh & Shawmut
Pitts. Shawmut & Northern_ _
Total
Group C:
Ann Arbor
Chicago Ind. & Louisville
Cleve. Cin. Chic. & St. LouisCentral Indiana
Detroit & Mackinac
Detroit dr Toledo Shore Line.._
Detroit Toledo dr Ironton
Grand Trunk Western
Michigan Central
Monongahela
New York Chicago & St. Louis_
Pere Marquette
Pittsburgh & Lake Erie
Pittsburgh & West Virginia
Wabash
Wheeling & Lake Erie
Total
Total
Pocahontas DistrictChesapeake & Ohio
Norfolk & Western
Norfolk & Portsmouth Belt Line
Virginian
Total
21,303
16,420
1,200
2,638
7,871
3,703
1,055
460
5,279
2,749
954
331
35,776
29,140
41,561
13,089
9,313
8,572
911
426
151
44
1,890
558
324
6,753
18,104
160
7,363
853
469
121
53
1,586
401
249
5,984
15,819
156
11,693
1,128
891
154
60
2,403
519
495
9,095
24,015
187
3,679
1,167
828
157
76
930
775
3,451
2,733
10,429
660
37,893
33,054
50.640
24.885
,4a,...
....1.0MON4,-,01...N
Nr1,
-..0.001,
.N01...
.. CO C-NVM0100
x Estimated. y Included in Gulf Coast Lines.
,4
Total
14,223
11,481
773
2,663
i
Southern DistrictGroup A:
Atlantic Coast Line
Clinehileld
Charleston & Western Carolina.
Durham & Southern
Gainesville & Midland
Norfolk Southern
Piedmont & Northern
Richmond Frederick. & Potorn.
Seaboard Air Line
Southern System
Winston-Salem Southbound...
Group B:
Alabama Tenn.& Northern_ _ __
Atlanta Birmington .4 Coast.._
AU.& W.P.-West.RR.of Aa
Central of Georgia
Columbus & Greenville
Florida East Coast
Georgia
Georgia & Florida
Gulf Mobile & Northern
Illinois Central System
Louisville & Nashville
Macon Dublin dr Savannah
Mississippi Central
Mobile & Ohio
Nashville Chatt. & St. Louis_
New Orleans-Great Northern__
Tennessee Central
20,498
Total Loads Received
from Connections.
1933.
1932.
1931.
220
670
747
3,731
247
602
793
341
787
15,254
15,443
127
164
1,815
2,606
562
248
193
627
528
2,838
197
478
824
290
638
15,660
12,687
85
108
1,630
2,357
520
301
230
718
744
4,274
327
579
1,217
452
883
22.518
21.278
132
183
2,314
3,249
834
592
1933.
171
615
964
1,982
160
386
1,287
301
730
7,925
3,387
340
207
1,311
2,060
325
442
1932.
153
524
712
1,593
118
293
1,050
224
684
6,497
2,834
243
148
913
1,502
243
348
44,357
39.981
80.524
22,593
17,859
Grand total Southern DLstrict--
82,250
73,015
111,164
47,478
38.357
Northwestern DistrictBelt Ry. of Chicago
Chicago & North Western
Chicago Great Western
Chic. Milw.St. Paul& Pacific-Chic. St. Paul Minn. dr Omaha_
Duluth Missabe & Northern- -_
Duluth South Shore & Atlantic_
Elgin Joliet & Eastern
Ft. Dodge Des M.& Southern_
Great Northern
Green Bay & Western
Minneapolis & St. Louis
Minn. St. Paul& S.S. Marie- _.
Northern Pacific
Spokane Portland & Seattle-...
608
13,626
2,157
15,740
3,235
3,680
277
3,720
290
7,221
434
1,958
3.723
7,302
915
1,493
11,423
2,006
12,961
2,753
523
369
2,812
188
6,248
449
1,616
3,324
6,568
1,059
1.613
21,879
3,022
24,290
4,373
11,944
1,213
5,050
389
14,150
696
3.091
6,659
11,280
1,245
1,474
7,332
1,976
5,761
2,476
37
273
3,879
124
1,683
319
1,031
1,545
1,828
1.133
1,414
6,009
1,912
4,883
2,260
71
309
2,663
107
1,711
331
991
1,719
1.752
745
64,886
53.790
110,694
30,871
26,877
15,218
2,417
208
12,451
11,263
1,748
530
1,235
289
1,007
564
96
12.902
337
330
9,050
198
1,159
15,849
2,565
164
11,163
9,985
1,812
645
1,079
160
720
487
129
12,284
168
228
8,663
55
926
22,881
3,644
206
20,479
16,625
2,566
1,070
1,940
312
1,000
805
155
21,609
373
280
13.146
142
1,505
3,772
1,426
21
5.570
5.690
1,756
788
1,760
19
705
207
47
3,011
344
869
5,897
5
1,271
3,058
1,507
18
4,454
5,059
1,403
524
1,377
5
451
165
15
2,474
148
585
4,408
4
911
71,002
67.082
108,738
33,158
26,586
166
131
127
1,731
161
113
96
2,164
218
136
167
12,867
3,045
320
124
946
2,454
243
111
1,051
4,382
88
1,516
1,074
230
478
80
4,155
11,970
45
98
7,004
1,905
1,577
132
1,358
1,246
72
369
55
3,779
10,236
42
87
6,457
1.776
4,967
395
1,935
1,920
216
562
108
5,609
19,526
47
112
9,722
3,139
1,442
765
1,068
655
609
188
234
1,922
6,963
20
116
3,133
1,512
1,586
353
1,122
1,097
208
182
199
1,661
5,828
33
71
2,415
1,559
5,294
3,795
1,569
27
5,005
3,197
1,402
18
7,428
.6.716
2,209
29
2,289
3,348
2,138
38
2,433
3,300
1,434
39
45,865
39,342
67.025
30.875
27.209
Total
Total
Central Western DistrictAtch. Top. & Santa Fe System_
Alton
Bingham dr Garfield
Chicago Burlington & Quincy
Chicago Rock Island & Pacific_
Chicago & Eastern Illinois
Colorado dr Southern
Denver dr Rio Grande Western_
Denver & Salt Lake
Fort Worth & Denver City.- _
Northwestern Pacific
Peoria dr Pekin Union
Southern Pacific (Pacific)
St. Joseph & Grand Island__ _ _
Toledo Peoria & Western
Union Pacific System
Utah
Western Pacific
Total
17,477
14,568
814
2,917
Total Revenue
Freight Loaded.
Railroads.
Southwestern DistrictAlton & Southern
Burlington-Rock Island
Fort Smith & Western
Gulf Coast Lines
y Houston & Brazos Valley_ _ _ _
International-Great Northern-Kansas Oklahoma & Gulf
Kansas City Southern
Louisiana & Arkansas
Litchfield & Madison
Midland Valley
Missouri & North Arkansas.- - Missouri-Kansas-Texas Lines__
Missouri Pacific
Natchez & Southern
Quanah Acme dr Pacific
St. Louis-San Francisco
St. Louis Southwestern
y San Antonio Uvalde dr Gulf..
Southern Pacific in Texas & La_
Texas viv Pacific
Terminal RR. Assn. of St. Louis
Weatherford Min.Wells & N.W.
Total
4354
Financial Chronicle
Col. Leonard P. Ayres of Cleveland Trust Co. Find
Business Expansion Under Way—"Vicious Spirals
.of Deflation Broken in This and Nearly All Other
Countries—While Increased Activity Is Encour•
aging to Business, It Is of Limited Significance in
•
the Larger Economic Situation—Price Advances
Not Due to Enhancement in Value of Goods and
Securities.
• "Business conditions are improving vigorously, and prevailing sentiment among people of all classes and occupations" says Col. Leonard P. Ayres, Vice-President of the
!Cleveland Trust Company "has in recent weeks become far
more confident and even optimistic." In the company's
"Bulletin" dated June 15, Col. Ayres notes however that "as
things are, the increased activity is encouraging to business,
but so far it is of limited significance in the larger economic
situation." Col. Ayres comments on the advancing prices
-since April of commodities and securities and says "it is interesting and disquieting to realize that these price advances
are not in the main due to any genuine enhancement in the
-true value of American goods and securities." He further
says "they are caused rather by the judgment of the international markets that the real worth of the America! dollar
is considerably less than they recently considered it to be."
Col. Ayres points out that "we now have two standards by
which to measure prices"—"gold currencies as reflected in
the quotations of foreign exchange," and the other "that of
the American paper dollars." Col. Ayres' comments in the
"Bulletin" follow:
We have now had twelve weeks of continuously improving business without any general setback. The lowest point in commercial and industrial
activity was reached in the third week of March at the end of the bank
holiday.' Three factors have been chiefly influential in initiating the recovery abd sustaling it. The first was the automatic resumption of buying and producin that came with the reopening of the banks, and the renewed confidence in their soundness.
This was followed by a general upturn in the prices of securities and
commodities caused by the nearly universal belief that we were entering
upon a period of linonetary inflation. The acceptance of this belief resulted
in a widespread wave of forward buying which still continues, and which
has brought as a natural consequence greater production, increased wholesale and retail trade, and heavier loadings of freight for the railroads.
Business expansion and business contraction both tend to be self generating.
Their movements acquire a momentum that carries them onward until they
encounter a combination of forces sufficiently powerful to reverse their
direction. At present in this country and in nearly all other countries
the vicious spirals of deflation have been broken, and business expansion is
under way. Since February vigorous advances have been under way in nine
of the ten principal security exchanges of the world. Moreover industrial
activity is increasing in most of the principal countries.
The great depression has forced enough of the essential readjustments to
be made, and has resulted in creating sufficiently serious shortages of essential goods, so that industry, trade, and transportation are expanding. In
this country they are doing so with a vigor never before equalled. This
recovery does not now need the additional stimulation of artificial credit
expansion, great public works financed by huge Governmental deficits,
bonuses paid to farmers, or the Federal promotion of irrigation and power
projects. Business revival once well under way thrives beat on a program
characterized by a minimum of interference. What this country needs most
just now is to be saved from its rescuers.
Industrial Production..
The volume of industrial production increased sharply from March to
April, and preliminary figures indicate that figures for May will show another important gain. In March the volume was 45.4% below the computed
normal level, and in April only 39.0% below. This is an increase of nearly
12% which is greater than any previous increase in one month of which
we have record. The April figures are preliminary and are subject to
revision which is not likely to make them any less favorable.
The data in the small table in the diagram [this we omit—Ed.] bring
the index as nearly up to date as the available figures will permit. These
figures may be used to bring forward any of the long diagrams published
by this bank. The data used are records of industrial production compiled
by the Federal Reserve Board, and adjusted by this bank to show the
percentage fluctuations above and below the computed normal level. One
of the long diagrams referred to carries the record of business activity in
this country back by months to 1790, and it is interesting to note that the
percentage increase from March to April of this year is greater than that
of any single previous month in that long span of over 143 years.
The improvement from March to April is similar to the one last summer
from August to September in that it shows advances in almost every important element of the index. In manufacturing output there were noteworthy increases in iron and steel, textiles, food products, lumber, automobiles, leather, and tobacco. There was a slight decrease in the output of
cement. In mining the largest increases were those in bituminous coal,
and in zinc. There were decreases in the output of petroleum and silver.
Among the 13 group indexes entering into the final figures eight showed
outputs larger than those for April of 1932.
Business Improvement.
Business conditions are improving vigorously, and prevailing sentiment
among people of all classes and occupations has in recent weeks become far
more confident and even optimistic. The actual upturns so far recorded by
the statistical records of business fundamentals are relatively small as compared to the great declines of the long depression, but they are significant
as advances from the low levels reached in the early months of this year.
The shaded areas in the diagram show the depression declines of six important business indicators, and their recent upturns reflect the improvements that are causing hope and confidence to replace doubt and despondency.
In each case the areas show monthly changes from the beginning of 1929
through May of 1933, and the averages for 1929 are taken as being equal to
100. Wholesale commodity prices reached their lowest levels in February
of this year when they were only 62% of their 1929 averages. In May they
June 24 1933
had advanced to 65%. Most current newspaper comments tell of increases
far greater than this, but they refer to advances based on a few sensitive commodities, while the index shown here is the inclusive one computed by the
U. S. Department of Labor, and based on nearly 800 commodities. Such
an index moves slowly.
The index of bond prices is based on 60 issues, and is that compiled by
the Standard Statistics Company. It reached a record low of less than 61
in June of last year, and after a good recovery again declined to 66 in April
of this year. The recent advance carried it up to a May average of 74. Improvement in railroad freight car loadings has been even more restricted.
They fell to 48 last summer, and after a good recovery declined again to
47 last March. The May figure was just over 50. They are currently
showing totals slightly above the figures for the corresponding weeks of last
year.
The index for business activity is a sensitive one made by combining the
data of three weekly indexes, and converting them into monthly averages.
The recent advance has carried this index from a low of 50 in March up
to 60 in May. This reflects the greatest advance in general business activity
that has ever been made in two consecutive months. Moreover there is
every prospect that the figures for June will again be advancing ones.
The two areas at the foot of the diagram show changes in the numbers of
actively producing blast furnaces, and in the prices of common stocks. It
Is interesting to note that these two Indexes have moved in closely similar
ways throughout the depression. The record low level for the blast furnaces
was 20 in March of this year, and the recent advance has carried the index
up almost to 34 in May. The stock price index is one compiled by the
Standard Statistics Company, and includes 90 issues. It fell from 121 in
September of 1929 to 19 in June of 1932. Its low level this year was 24
in February, and since then it has risen to 35 in May. These are monthly
averages. The lowest day this year was 21, and the highest one 40.
Iron and Steel.
There has been an unprecedented advance in steel ingot production which
has carried the index of operations from 13% of full capacity in the second
week of March up to 47% in the first week of June. Moreover this has been
corroborated by an increase in the percentage of blast furnaces in active
production from 13 at the end of March to 21 at the close of May.
In any ordinary period of business upturn after depression these figures
would be highly important because they would indicate that the essential
first steps in durable recovery were being taken by expanding construction,
heavy railroad buying, and demands for new industrial equipment. As things
are the increased activity is encouraging to the industry but so far it is of
limited significance in the larger economic situation.
Double Standard,
Since early in April the prices of most commodities and securities have
advanced vigorously in this country. This has greatly encouraged manufacturers who have seen the worth of their inventories increasing, and bankers
who have realized that some of their loans were becoming safer because the
collateral securing them was advancing in value, and investors who have
watched their holding of stocks and bonds quoted daily at higher prices.
These advances have encouraged farmers because they have seen in them increased hope that they could meet interest and tax payments, and they have
given confidence to businessmen who know that purchasers of all sorts of
goods commonly buy eagerly in rising markets but reluctantly in falling ones.
It is interesting and disquieting to realize that these price advances are
not in the main due to any genuine enhancement in the true value of
American goods and securities. They are caused rather by the judgment
of the international markets that the real worth of the American dollar Is
considerably less than they recently considered it to be. We now have two
standards by which to measure prices. One is that of gold currencies as
reflected in the quotations of foreign exchange, and the other is that of
the American paper dollars.
The diagram shows by weeks for the first five months of this year
the
changes in the prices of 40 high grade bonds included in the Dow Jones
index, the U. S. Department of Labor index of wholesale commodities,
and
the Standard Statistics index of 20 utility stocks. The three
solid lines
show how the values of the securities and commodities have
varied if the
owner was a person living in this country. The dashed line shows
what
has happened to the values of the same bonds, stocks, and
commodities if
their owner lives in a country on the gold basis, such as France, Belgium,
or the Netherlands.
If such an owner living abroad sells his American bonds, stocks, and
commodities in our markets at their new high prices and converts the proceeds into money that he can use in the country where he lives, he will
receive for them a good deal less than he would have last February
during
the bank crisis when conditions here seemed to be at their worst.
Our paper
money still has its old value when used to pay domestic debts,
but abroad
the dollar no longer has its former prestige or its old purchasing
power.
International Recovery.
Business recovery has been under way for about a year in most of
the
Important industrial countries, and now it is beginning to
make progress
here. The accompanying diagram [this we omit—Ed.]
shows monthly
changes in industrial activity in eight countries during the past six
years.
The indexes have all been constructed in the same way by
combining the
figures showing the changes in pig iron output, steel
production, coal production, and ton-miles of freight moved on the railroads. The
series have
been seasonally corrected, and given equal weights, and
the average for the
three years from 1927 through 1929 has been taken as being
equal to 100.
All the horizontal lines are 10 points apart.
The heavy horizontal lines represent for each country the
averages of the
three pre-depression years of 1927, 1928 and 1929 that are
taken as being
equal to 100. The small diagram at the bottom shows the
index of industrial
activity for the eight countries combined. It was made
by giving the data
for each nation a weighting proportionate to the
population. It shows the
course of this international depression. The index for
this country is
carried through May of this year, those for the United
Kingdom, Canada, and
Germany through April, and the others through March.
The facts presented in the diagram afford little support for
the contention
that business recovery was dependent on adopting the
policies of inflation,
currency debasement, and repudiation. It is true that the
curve for Japan
has been rising since March of 1932, and that country has
been inflating her
currency, and engaging in military operations. However,
the industrial
activity of Italy has been rising since May of 1932, that
of France since
last June, and those of Germany and Belgium since last
July, when the
English line turned up also. The low points for Canada
and the United
States were reached in March of this year.
This country is now participating in a general recovery
of industrial
activity that was initiated abroad. Our industries joined in the upturn
last summer, and carried the gains forward to the close of the year. Then
political dissensions and banking troubles combined to cause a new decline.
The records of the other nations suggest that an adequate remedy might
have been found if the prompt and vigorous actions taken had been directed
to restoring full confidence in our banking system, and had refrained from
altering our monetary system. In that event our present business upturn
and speculation would probably have been less violent, but possibly our
genuine recovery more durable.
Moody's Daily Index of Staple Commodity Prices
Discloses Firm Trend.
Raw commodity prices showed a firm trend after the
sharp drop in the last half of the previous week. Moody's
Daily Index of Staple Commodity Prices advanced graudally
to 122.7 for a net gain of 2.6 points for the week. The
Index is just a trifle below its peak point of 123.8 reached
early last week.
Eight of the 15 staples included in the Index closed the
week at higher prices, while four declines and three-steel
scrap, copper and lead-were unchanged. The most important advances were in wheat and rubber, the latter
regaining almost a cent of its loss of the previous week.
Cotton, silk, corn, wool tops, sugar and cocoa were also
higher, while hogs, coffee, hides and silver showed net losses
for the week.
The movement of the Index number during the week, with
comparisons, is as follows:
June 16
Fri.
June 17
Sat.
Mon. June 19
Tues. June 20
Wed. June 21
Thurs. June 22
June 23
Fri.
120.1
119.5
121.7
121.7
121.9
122.4
122.7
2 weeks ago, June 9
Month ago, May 23
Year ago, June 25
1932 High, Sept. 6
Low, Dec. 31
1933 ,High, June 13
Low, Feb. 4
121.6
114.7
83.3
103.9
79.3
123.8
78.7
"Annalist" Weekly Index of Wholesale Commodity
Prices Lower During Week of June 20-Domestic
and Foreign Indices.
A loss of 0.3 point for the week carried The "Annalist"
Weekly Index of Wholesale Commodity Prices down to 93.4
on June 20, from 93.7 (revised) June 13. The "Annalist"
continued:
Reports last week that a currency stabilization program had been agreed
to by the United States at the World Economic Conference were largely
responsible for the decline, the dollar rallying and the markets going
generally lower. Subsequent denials from Washington sent the dollar back
close to its previous low, without, however, being reflected in a corresponding recovery of the price level. As the dollar itself declined a net 0.7 cent
to 81.7 on June 20, the index on a gold basis showed a somewhat greater
loss than in terms of United States currency, dropping to 76.3 in terms of
gold from 77.2 (revised) a week ago.
THE "ANNALIST" WEEKLY INDEX OF WHOLESALE COMMODITY
PRICES.
Unadjusted for Seasonal Variation-41913=100)•
June 20 1933. June 13 1933. June 21 1932.
Farm products
Food products
Textile products
Fuels
Metals
Building materials
Chemicals
Miscellaneous
82.5
97.3
*102.1
98.3
99.5
107.0
96.2
80.2
a84.1
97.7
0100.2
95.9
99.5
107.0
096.2
78.7
66.3
93.3
67.2
138.1
96.0
107.2
96.0
79.6
93.4
a93.7
88.9
All commodities
76.3
a77.2
All commodities on sold basieb
for
quotations
exchange
on
France,
Based
Switzerb
Revised.
a
• Preliminary.
land, Holland and Belgium.
The extreme sensitiveness of the commodity markets to fluctuations in
exchange and to the uncertainties causing them will doubtless persist until
the monetary policy of the administration becomes clearer. Meanwhile,
the speculative possibilities of the situation are emphasized to a wholly
undesirable degree, with danger of serious reaction through the withdrawal
of speculative support when (and if) a policy of currency stability is finally
determined upon.
DOMESTIC AND FOREIGN WHOLESALE PRICE INDICES-MAY 1933.
(Measured in currency of country, no adjustment for depreciation; 1913=100)•
March
Per Cent Change
April
May
May
1933.
1932.
1933.
1933.
Yr.
81.9
a83.8
88.8
+ 1.9
+8.0
90.5
TJ. S. A
100.6
102.1
105.3
+2.4 - 0.8
104.5
Canada
97.6
+2.1 - 1.5
97.2
100.7
99.2
United Kingdom
385
384
421
-0.5 - 9.3
382
Franceb
91.1
+1.3 - 5.5
a90.7
97.2
*91.9
Germany
313
287
282
0.0 - 9.9
•282
Italy
133.2 al34.0
113.6
*133.6
+17.6
+0.3
Japan
100.0.
1914
July
b
Revised.
a
Provisional.
•
Indices used: U. 8. A., Annalist; Canada. Dominion Bureau of Statist es: United
Kingdom, Board of Trade; France, Statistique Generale; Germany, Statistische
Iteichsamt; Italy, Milan Chamber of Commerce; Japan, Bank of Japan.
Foreign prices in May generally advanced. The gains, however, were
much smaller than those reported for the United States, Just as the preceding losses had been much more moderate. Canadian prices, particularly
sensitive to changes in this country, rose 2.4% from the April level, continuing an advance that started, like our own, in March. British prices
rose 2.1%. after having declined steadily for five months. German prices
rose 1.3%, after having been practically stationary since January. The
most recent weekly figures for both Great Britain and Germany point to
an accentuation of the advance in June.
Italian prices were unchanged from April. while the French index showed
a loss of 0.5%. lower prices for vegetable foodstuffs in both countries
being largely responsible The latest weekly figures, however, show a
moderate upturn in Italy in early June, indicating that the Italian prices
may join somewhat belatedly in the general advance. Latest weekly
figures for France. however, show nothing more than an apparant checking
of the recent gradual decline.
4355
Financial Chronicle
Volume 136
The Japanese price level advanced 0.3%. an unimportant change: prices
had been declining since January, after rising sharply during the second
half of last year, the situation being largely dominated by the financial
policies of the government.
Decrease of Only 10% Noted in Sales of Ordinary Life
Insurance in United States During May as Compared With May Last Year-Smallest Decline for
One Month From Previous Year Since January
1932-Canadian Sales.
Sales of ordinary life insurance in the United States during
the month of May were only 10% below sales for May
1932. This experience, which represents the smallest decrease in production in one month as compared with the
same month of the preceding year since January 1932,
corresponds very favorably with the acceleration in other
industries. The Life Insurance Sales Research Bureau at
Hartford, Conn., in noting the foregoing under date of
June 19, continued:
Sales for the first five months of the year were 22% below those for the
same period a year ago. When the monthly ratio is better than the year-todate comparison, an upward trend is indicated. This has been true during
both April and May in every section of the country with the exception of the
west north central. In this section the two ratios were the same in April,
but the monthly comparison indicated an upward trend in May. The
New England section made the best monthly showing with a decrease of
only 5%. The east and west north central and the east south central sections
all showed better than average experience. Of the individual States, seven
showed a larger volume of sales this May than in May last year. These
States were New Jersey, Ohio, Missouri, Delaware, Kentucky, Utah and
Oregon.
Although the usual seasonal fluctuation in life insurance sales shows a
decline from the March volume during both April and May, actual sales in
May this year were larger than for any other month.
The table below gives by sections April and May business this year as
compared with that of the respective months a year ago, and also the
experience for the first five months of the year in comparison with the same
period during 1932. The upward trend is apparent:
let 5 Mos.
April Ratios May Ratios Ratios 1933
1933 to 1932. 1933 to 1932. to 1932.
New England
Middle Atlantic
East North Central
West North Central
South Atlantic
East South Central
West South Central
Mountain
Pacific
United States total
84%
82%
75%
78%
81%
89%
84%
80%
82%
95%
90%
91%
93%
85%
94%
86%
87%
87%
84%
78%
76%
80%
73%
82%
81%
71%
75%
80%
90%
78%
These figures are compiled from reports made to the Life
Insurance Sales Research Bureau. The 79 companies reporting their experience, the Bureau noted, represent 91%
of the total legal reserve ordinary life insurance in force in the
United States. In a summary of sales in Canada, the Bureau
said:
Sales of ordinary life insurance in the Dominion of Canada during May
were off only 1% when compared to the same month a year ago. This is
the smallest monthly decrease since August 1931. The Provinces of Alberta.
Nova Scotia, Quebec and the Colony of Newfoundland increased for the
month.
For the first five months of 1933, Canada as a whole showed a loss of 17%
when compared with the same period last year. The decrease in sales for
the last 12 months as compared with the preceding 12 months was also 17%,
Monthly Index of Wholesale Commodity Prices of
United States Department of Labor Shows Third
Consecutive Advance During May.
The index number of wholesale commodity prices as computed by the Bureau of Labor Statistics of the U. S. Department of Labor shows an increase from April to May 1933,
registering the third successive advance in recent months.
This index number which includes 784 commodities or price
series weighted according to the importance of each commodity and based on the average prices for the year 1926=
100.0, averaged 62.7 for May as compared with 60.4 for
April, showing an increase of 3.8% between the two months.
The increase since February, with an index of 59.8, has been
nearly 5%. When compared with May 1932, with an index
has been recorded
number of 64.4, a decrease of about 2
in the 12 months. The Bureau further said as follows under
date of June 19:
The farm products group showed the greatest advance, registering an
increase of almost 13% from the previous month. A sharp rise took place
In the average prices of grains, livestock, cotton, eggs, lemons, oranges,
hay, fresh milk, peanuts, tobacco, dried beans, sweet potatoes, and wool.
Decreases were recorded in the average prices of fresh apples, onions and
white potatoes.
Among foods, price advances during the month were reported for butter,
cheese, evaporated milk, rye and wheat flour, macaroni, corn meal, rice,
dried fruits, canned vegetables, most meats, cocoa beans, coffee, lard,
oleomargarine, raw and granulated sugar, and vegetable oils. On the other
hand, soda crackers, mutton, and smoked salmon averaged lower than in
the month before. The group as a whole increased almost 6% in May
when compared with April.
The hides and leather products group registered the second largest increase, the index rising approximately 11% during the month. All subgroups shared in the advance, with a subgroup of hides and skins mounting
nearly 50%. Textile products as a whole advanced 8% from April to
May. All sub-groups contributed to the increase.
4356
Financial Chronicle
Anthracite coal, electricity, and most petroleum products showed reductions in average prices, causing the group of fuel and lighting materials
to decline more than 1.4
2 % from the previous month. Bituminous coal
and coke showed little or no change in average prices.
Metals and metal products as a whole showed an upward tendency for
May, due to advancing prices for non-ferrous metals and plumbing and
heating fixtures. Agricultural implements and iron and steel decreased
slightly and automobiles remained at the April level. The index for the
group was I% higher than for the month before. In the group of building
materials the average prices of brick and tile, lumber, and paint and paint
materials and other building materials moved upward during the month,
while structural steel and cement showed no change between the two months.
The group as a whole recorded an increase of
%•
The group of chemicals and drugs incredsed 2I,6% during May due to
advancing prices in all subgroups. As a whole the housefurnishing goods
group increased only slightly from the previous month. Both furniture
and furnishings shared in the advance.
The group of miscellaneous commodities rose nearly 2% between April
and May due to sharp advances in cattle feed and crude rubber. Automobile tires and tubes, paper and pulp and other miscellaneous commodities
showed smaller advances during May.
The May averages for all the special groups of commodities were above
those for April, ranging from less than 2% in the case of all commodities
other than farm products and foods to nearly 7;,i% in the case of raw
materials.
Between April and May price increases took place in 364 instances,
decreases in 49 instances, while in 371 instances no change in price occurred.
INDEX NUMBERS OF WHOLESALE PRICES BY GROUPS AND SUBGROUPS OF COMMODITIES (1926=100.0).
Groups and Subgroups.
All commodities
Farm products
Grains
Livestock and poultry
Other farm products
Foods
Butter, cheese and milk
Cereal products
Fruits and vegetables
Meats
Other foods
Hides and leather products
Boots and shoes
Hides and skins
Leather
Other leather products
Textile products
Clothing
Cotton goods
Knit goods
Silk and rayon
Woolen and worsted goods
Other textile products
Fuel and lighting materials
Anthracite coal
Bituminous coal
Coke
Electricity
Gas
Petroleum products
Metals and metal products
Agricultural implements
Iron and steel
Motor vehicles
Nonferrous metals
Plumbing and heating
Building materials
Brick and tile
Cement
Lumber
Paint and paint materials
Plumbing and heating
Structural steel
Other building materials
Chemicals and drugs
Chemicals
Drugs and pharmaceuticals
Fertilizer materials
Mixed fertilizers
HousefurnIshing goods
Furnishings
Furniture
Miscellaneous
Automobile tires and tubes
Cattle feed
Paper and pulp
Rubber, crude
Other miscellaneous
Raw materials
Semi-manufactured articles
Finklhed products
Non agricultural commodities_
All commodities other than farm products
May 1932. Apr121933. May 1933.
64.4
46.6
42.8
44.4
49.8
59.3
59.6
88.1
81.5
56.5
54.9
72.5
88.4
35.7
60.6
97.9
54.3
62.9
82.9
50.5
29.1
58.3
87.2
70.7
85.6
82.0
77.1
108.1
103.0
47.2
80.1
84.9
80.0
93.8
48.3
64.4
71.5
77.4
75.0
59.5
73.9
64.4
81.7
78.2
73.6
79.1
58.7
89.4
69.0
74.8
75.5
74.1
64.4
39.2
45.9
76.5
6.7
84.6
53.9
58.1
70.3
68.1
711 4
60.4
44.5
44.8
41.0
46.7
56.1
53.1
65.9
57.8
50.3
56.6
69.4
83.2
45.8
57.2
77.2
51.8
81.4
50.7
47.2
26.3
53.3
87.5
61.5
81.4
78.1
75.2
98.3
97.5
32.5
76.9
83.1
75.7
90.4
49.2
59.4
70.2
75.0
81.8
57.9
68.9
59.4
81.7
77.9
71.4
79.5
54.6
62.9
60.0
' 71.5
71.7
71.5
57.8
37.4
49.5
70.6
7.4
72.7
50.0
57.3
65.7
63.7
85.3
62.7
50.2
52.8
46.8
51.8
59.4
58.8
69.3
58.8
52.3
130.4
76.9
83.6
67.3
68.3
77.2
55.9
81.9
57.9
48.0
29.1
81.5
70.7
60.4
78.5
78.3
75.2
(9
(9
31.2
77.7
83.0
75.2
00.4
56.8
81.3
71.4
75.2
81.8
59.6
70.7
61.3
81.7
78.8
73.2
80.9
55.0
86.8
83.1
71.7
72.0
71.6
68.9
37.8
54.4
70.7
10.2
74.0
53.7
81.3
67.2
65.4
88.5
• Data not yet available.
Bank of Montreal Reports Canadian Trade Conditions
as Continuing Favorable.
"The favorable business reaction throughout Canada,
which characterized April, has extended into May and June,
there having been a marked upswing in the volume and tone
of trade, both foreign and domestic,in the level of commodity
and security prices, and in the extent of general employment," says the Bank of Montreal in its review of Canadian
trade dated June 22. "The betterment has not reached all
industries, and improvement in some is not yet very pronounced. It is, however," the bank says, "a great gain in
itself to have the long-continued fall in prices and production
arrested and the plus replace the minus sign in statistical
comparisons." The bank further said in part:
The price level, which is the key to so much in the current economic
situation, rose in the case of the Dominion Bureau of Statistics wholesale
Index from 65.410 April to 66.9 in May. The rise was principally ingrains,
livestock, cotton, wool, copper, lead, tin, zinc, silver and other raw materials. Wheat followed an erratic course, on levels higher than any since
May 1932. There was an abrupt rise followed by recession in flour prices,
with unsettling effects upon trade. An advance in cotton was ascribed to
unfavorable crop reports, increased activity in United States textile mills.
and inflationary measures. Copper was very firm, with offerings slow in
coming forward at prices averaging a cent a pound higher. Silver prices
have received a fillip under continued speculative buying and later by
repercussions from proceedings of the Economic Conference. Offsetting
June 24 1933
features were declines in iron and iron products, and in certain chemicals
Summing up for the more important group indexes: total raw materials
went up in price from 53.3 to 56.2; total Canadian farm products from
41.1 to 46.9; producers' goods from 60.7 to 63.9; and total manufactured
commodities from 69.7 to 70.6.
Aggregate external trade of Canada in May,$79,035,000, was $6,600,000
less than in the corresponding period last year, a decrease of $11,434,000
occurring in imports and an increase of $5,100,000 in exports of domestic
produce. The great shrinkage in value of Canada's external commerce
during the period of world depression is shown in a decline in imports from
$1,198,087.000 to $385,500,000, and in exports from $1,100,320,000 to
$478,443,000 in the twelve-month periods to May 1930 and 1933, respectively. In the two years, however,an adverse trade balance of $97,767,000
has been converted into a favorable balance of $92,943,000, and it is noteworthy that during the last 24 months only four have shown an excess of
imports over exports. The revenue side of the picture, however, is not propitious, representing a decline of$2,276,400 In Customs collections compared
with May a year ago; with Excise and Income Tax decreases added, the
total decline in Dominion revenues as between May 1933 and May 1932 is
$10,331,500.
Bank of Montreal Reports on Crop Conditions
in Canada.
"While conditions are fairly satisfactory in the Prairie
Provinces of Canada, crops have suffered from intense heat
during the past week, and good rains are required over large
areas to avoid serious effects," says the Bank of Montreal
in its current crop report. "The grasshopper menace has
become serious, and is causing damage in scattered sections
of all three provinces. In Quebec cool weather and lack of
moisture has retarded the growth of crops generally. In
Ontario crops are in advance of former years but rain is
badly needed to promote growth. In the Maritime Provinces
recent rains have proved beneficial and crops above ground
are showing satisfactory growth. In British Columbia early
crops have made poor progress in the Fraser Valley and it
is estimated that yields of grain and hay will be considerably
below average. Conditions have been more favorable in
the interior of the province."
Employment and Payrolls in Manufacturing Industries
During May Increased Over April According to
United States Department of Labor.
Index numbers showing the trend of employment and
payrolls in manufacturing industries are computed monthly
by the Bureau of Labor Statistics of the U. S. Department of
Labor from reports supplied by representative establishments in 89 of the principal manufacturing industries of the
United States and covering the pay period ending nearest
the 15th of the month. These indexes of employment and
payrolls are figures showing the percentages represented by
the number of employees or weekly payrolls in any month
compared with employment and payrolls in a selected base
period. The year 1926 is the Bureau's index base year for
manufacturing industries, and the average of the 12 monthly
indexes of employment and payrolls in that year is represented by 100%. The Bureau's survey, issued June 15,
continues:
A comparison of the May 1933 index of employment (58.7) with the
Index of April 1933 (56.0) shows an increase in employment of 4.8% over
the month interval. A similar comparison of the May payroll index (38.9)
with the April index (34.9) shows a gain of 11.5% in Payrolls between
April and May. Comparing employment in May 1933 with May 1932 it is
seen that the level of employment in May 1933 is 1.7% below the index
of employment in May 1932 (59.7). The payroll index of May 1933 compared with the index of May 1932 (42.5) shows a decline of 8.5% in payrolls
over the year interval.
The changes in employment and payrolls in May 1933 are based on
reports supplied by 17,923 establishments in 89 of the principal manufacturing industries of the United States. These establishments reported
2,832,335 employees on their payrolls during the pay period ending nearest
May 15 whose combined weekly earnings were $45,794,311. The employment reports received from these co-operating establishments cover approximately 50% of the total number of wage earners in all manufacturing
Industries of the country.
The increases in employment and payrolls in May 1933 as compared
with April 1933 indicate a general expansion in manufacturing activities.
An upward trend in employment was shown in 72 of the 89 manufacturing
Industries included in the Bureau's survey, and gains in payroll totals were
reported in Si of the 89 industries. This improvement in the employment
situation over the month Interval is of especial significance as employment
and payrolls ordinarily show a decline from April to May. The average
percent of change in employment between April and May over the preceding 10-year period 1923-1932 has been a decrease of 1.4% and payrolls
have shown an average decline of 1.1% between these months over the
same interval.
The percents of change in employment and payrolls occurring between
April and May, as shown by the Bureau's indexes for the years from 1923
to date are as follows:
Month and Year.
April-May, 1923
April-May, 1924
April-May, 1925
April-May, 1926
April-May, 1927
April-May, 1928
April-May, 1929
April-May, 1930
April-May, 1931
April-May, 1932
April-May, 1933
Percent of Change.
Employment,
Psyrotts.
No change
-3.9
-1.3
-1.2
-1.0
-0.3
+0.1
-1.4
-0.7
-4.0
+4.8
+3.5
-4.5
+0.2
-1.7
-1.0
+0.3
+0.2
-2.3
-1.2
-4.9
+11.5
Comparing the index of employment of May 1933 (58.7) with the index
of employment in July 1932 (55.2),in which month the low point of employ-
Financial Chronicle
Volume 136
ment in 1932 was reached, it is seen that employment has increased 6.3%
between July 1932 and May 1933. The index of payrolls in May 1933
(38.9) is 7.5% above the level of the July 1932 payroll index (36.2). While
both employment and payrolls in March 1933 fell below the low point of
July 1932 the situation existing in numerous manufacturing establishments
In March, due to the "bank holiday," was so unusual and in many instances of such temporary character that the March indexes are rather
abnormal indicators from which to measure changes in employment and
payrolls. The May 1933 indexes show gains of 6.5% in employment and
16.5% in payrolls over the March 1933 indexes.
INDEX NUMBERS OF EMPLOYMENT AND PAYROLL TOTALS IN
MANUFACTURING INDUSTRIES.
(12-Month Average 1926=100).
Payroll Totals,
Employment,
Manufacturing Industries.
May
1932.
General index
Food and kindred products
Baking
Beverages
Butter
Confectionery
Flour
Ice cream
Slaughtering and meat peeking_
Sugar, beet
Sugar refining. cane
Textiles and their products
Fabrics
Carpets and rugs
Cotton goods
Cotton small wares
Dyeing and finishing textiles_
Hats, fur-felt
Knit goods
Silk and rayon goods
Woolen and worsted goods.. _
Wearing apparel:
Clothing, men's
Clothing, women's
Corsets and allied garments
Men's furnishings
Millinery
Shirts and collars
Iron and steel and their products
not including machinery_ _ ...
Bolts nuts, washers and rivetsCast-Iron pipe
Cutlery (not including silver
and plated cutlery) and edge
tools
Forgings, iron and steel
Hardware
Iron and steel
Plumbers' supplies
Steam and hot water heating
apparatus and steam fittings_
Stoves
Structural & ornamental metal
work
Tin cans and other tinware....
Tools (not including edge tools,
machine tools, files & saws)...
Wirework
Machinery, not including trans
portation equipment
Agricultural implements
Cash registers, adding machines
& calculating machines
Electrical machinery,apparatus
and supplies
Engines, turbines, tractors and
water wheels
Foundry& machine shop prod'ts
Machine tools
Radios and phonographs
Textile machinery and parts.. _
Typewriters and supplies
Nonferrous metals & their prod'ts
Aluminum manufactures
Brass, bronze & copper prod'ts_
Clocks and watches and timerecording devices
Jewelry
Lighting equipment
Silverware and plated ware......
Smelting and refining: copper,
lead and zinc
Stamped and enameled ware. _ Transportation equipment
Aircraft
Automobiles
Cars, electric & steam railroad_
Locomotives
Shipbuilding
Railroad repair shops
Electric railroad
Steam railroad
Lumber and allied products
Furniture
Lumber, millwork
Lumber, sawmitls
Turpentine and rosin
Stone, clay and glass products._ _
Brick, tile and terra cone
Cement
Glass
Marble, granite, slate & other
products
Pottery
Leather and its manufaCtures... _ _
Boots and shoes
Leather
Paper and printing
Boxes, paper
Paper and pulp
Printing-book and job
Ptg.-newspapers& periodicals.
Chemicals and allied producta
Chemicals
Cottonseed, oil, cake and meal_
Druggists' preparations
Explosives
Fertilizers
Paints and varnishes
Petroleum refining
Rayon and allied products
Soap
Rubber products
Rubber boots and shoes
Rubber goods, other than boots.
shoes, tires and inner tubes__
Rubber tires and inner tubes__
Tobacco manufactures
Chewing & smoking tobacco
and snuff
Cigars and cigarettes
April
1933.
May
1933.
May
1932.
April
1933.
May
1933.
59.7
56.0
58.7
42.5
34.9
38.9
80.5
82.8
77.9
100.7
65.4
84.5
76.7
86.8
33.5
76.0
62.7
62.1
54.9
63.6
75.2
74.9
56.9
75.8
46.0
50.7
64.2
59.8
71.6
101.4
56.9
62.6
55.5
80.1
77.3
117.3
91.8
73.8
83.3
63.2
83.3
39.3
75.1
69.5
69.3
47.3
73.5
76.2
76.4
66.6
78.9
51.7
62.6
69.8
66.0
74.6
101.4
59.2
77.5
58.8
83.2
78.2
136.1
94.6
74.1
84.0
67.4
87.5
43.6
78.0
73.3
75.4
51.2
79.3
81.2
77.2
67.2
82.7
57.0
75.6
68.4
64.6
74.2
100.5
58.4
71.4
59.3
70.9
72.4
69.6
90.1
52.5
72.7
67.2
76.0
34.7
68.7
39.1
39.6
30.1
40.9
52.3
49.4
24.6
50.1
28.6
34.5
38.1
30.2
44.5
80.0
34.8
41.6
33.5
63.9
61.5
112.1
68.9
48.5
66.8
47.1
65.9
32.2
65.1
42.0
42.4
25.3
45.7
48.9
53.4
34.1
48.7
29.5
39.5
41.3
32.5
46.7
72.4
31.0
54.5
35.1
67.1
62.5
132.1
71.5
51.0
66.2
50.9
69.6
33.8
68.1
45.4
49.6
32.9
52.5
58.9
55.2
36.4
54.0
35.7
52.6
37.1
31.1
39.3
76.2
33.0
44.3
36.1
56.8
59.8
33.7
50.2
61.0
23.5
53.3
64.9
24.5
30.5
34.7
19.9
24.2
29.5
12.4
29.5
36.4
13.2
73.9
60.2
53.3
57.6
64.1
55.9
50.8
47.2
51.3
53.4
58.2
56.2
48.6
54.2
66.8
53.2
32.2
28.1
28.3
37.4
31.4
23.3
21.0
23.3
27.3
37.0
31.7
24.6
28.7
41.7
33.8
49.9
34.0
45.1
36.7
48.7
20.4
28.1
18.0
25.0
21.8
29.2
49.4
71.9
38.5
71.3
38.0
73.8
30.4
43.8
18.5
41.3
19.8
45.7
68.8
94.4
56.1
87.5
58.0
93.0
40.2
71.2
27.2
58.3
31.0
72.3
53.1
28.5
42.8
27.6
44.6
25.5
33.9
22.7
23.9
18.5
27.0
18.4
74.3
62.4
64.6
51.9
44.9
48.1
63.1
45.7
47.3
44.5
30.0
33.0
46.6
49.6
35.5
61.0
56.0
68.4
55.4
48.6
53.9
38.2
41.3
26.9
67.2
51.3
52.4
49.9
48.1
47.8
38.5
43.0
27.8
81.3
54.1
55.1
52.0
49.4
51.5
29.5
29.1
22.0
53.6
33.7
38.2
36.7
26.8
32.9
23.1
19.7
14.7
50.5
28.3
26.3
29.4
28.0
26.4
23.9
23.0
15.5
62.3
33.5
30.4
34.2
31.5
33.6
44.7
37.1
68.6
61.9
33.5
33.1
57.9
56.8
35.7
33.8
60.5
59.1
26.8
24.2
50.1
39.0
16.6
20.0
36.6
30.3
19.6
21.4
41.9
35.0
61.8
64.3
59.6
208.3
61.1
20.5
20.2
87.0
51.4
70.0
50.0
38.5
45.0
38.1
35.8
43.9
46.0
31.6
41.4
58.9
56.8
59.8
43.6
206.4
45.4
17.4
10.0
53.2
44.8
64.0
43.3
32.8
40.1
30.6
30.2
39.5
38.4
21.2
35.5
59.5
56.5
62.4
46.9
244.8
48.9
17.5
9.9
57.0
46.2
63.6
44.9
35.3
43.8
33.1
32.0
44.7
41.2
24.1
37.2
64.2
42.9
43.8
50.2
206.7
52.1
13.0
17.0
69.7
43.2
62.5
41.7
22.1
24.0
24.0
20.0
39.5
30.6
15.7
28.0
46.9
35.0
35.1
30.2
205.7
31.4
9.6
6.1
36.7
33.2
49.7
31.9
15.6
18.5
16.1
13.5
30.5
21.0
8.0
17.1
40.6
36.4
39.2
36.9
232.5
39.3
9.3
6.2
39.6
35.6
51.1
34.4
17.9
21.9
18.2
15.3
36.0
23.8
9.7
19.7
46.7
49.0
63.8
71.9
73.0
67.3
81.6
69.1
75.0
77.4
99.4
76.1
86.1
34.7
73.3
75.0
58.3
73.1
64.8
129.9
94.2
66.7
55.6
31.8
56.7
74.1
76.2
65.7
76.5
67.0
72.6
66.7
96.5
79.1
85.2
27.8
67.7
75.1
117.4
65.3
62.9
133.1
94.0
60.1
45.6
32.8
58.8
75.6
76.3
73.0
77.4
69.1
74.8
66.7
96.5
77.3
88.4
23.2
66.2
75.0
67.2
71.6
63.6
147.0
95.8
63.0
39.8
34.6
38.6
44.1
42.6
49.5
71.6
58.6
54.8
86.9
92.0
65.5
65.6
34.3
73.4
54.3
41.1
64.4
59.8
110.6
85.4
46.4
38.9
16.7
29.9
44.3
44.2
44.7
58.1
51.1
45.6
60.2
77.1
58.8
59.4
23.3
62.3
44.9
59.4
48.7
52.6
103.1
76.8
34.8
28.3
18.2
31.3
49.1
47.2
55.7
60.3
55.8
50.2
51.9
77.5
61.1
63.7
22.0
63.1
46.9
36.8
57.9
53.7
117.8
78.8
44.4
32.5
79.6
64.7
69.3
78.6
56.8
58.2
81.6
62.4
66.3
53.3
45.8
51.5
47.7
31.9
38.3
52.1
44.5
48.5
87.1
67.0
83.0
55.0
86.7
63.6
71.6
49.1
62.3
35.4
70.7
45.8
4357
.
Non-Manufacturing Industries,
The general improvement in the employment situation between April and
May 1933 was also reflected in a number of the non-manufacturing industries
surveyed monthly by the Bureau of Labor Statistics. Increased employment was reported in 9 of the 16 industries surveyed and increased payrolls
were reported in 12 industries. The increases in employment in May 1933
in most instances were greater than the average percents of change between
April and May in the preceding years for which data are available, and,
while seven industries reported declines in employment, the decreases
reported in May in several of these industries were not as pronounced as
might be expected. For example, the retail trade group which reported a
gain of 10.1% in employment in April, due largely to Easter trade, reported
a decline of only 2.1% in employment in May,indicating that a great number of employees taken on for Easter business were retained on the payrolls
of the reporting establishments.
The most pronounced gain in employment between April and May was
shown in the quarrying and non-metallic mining industry, in which the
increase of 10.5% was somewhat larger than the usual seasonal increase
reported in this industry in May. Employment in the building construction
industry increased 8.9% (preliminary) gains in employment in this industry
being reported in practically all localities. The metalliferous.mining industry reported a gain of 2.2% in employment and the dyeing and cleaning
industry reported an increase of 1.1%. In the remaining five industries in
which increased employment was reported in May, the upward trend was
less than 1% and was as follows: Wholesale trade, 0.9%; crude petroleum
production. 0.3%; laundries, 0.2%; power and light and banks-brokerageinsurance-real estate, 0.1% each. The most pronounced decrease in employment from April to May (16.4%) was reported in the anthracite mining
industry. While seasonal in character, this decrease is slightly greater than
the average decline shown in this industry in May. The decrease of 7.5%
in employment in the canning and preserving industry is also seasonal,
reflecting a between season period in which the California canneries show a
marked decline and canneries in other sections of the country have not begun operations. The bituminous coal mining and the telephone and telegraph industries reported losses in employment of 3.8% and 3.1%. respectively, coupled, however, with small increases in payrolls. The retail
trade industry reported a drop of 2.1% in employment, the electric-railroad
and bus operation industry reported a decrease of 0.5%, and the hotel
industry reported a decrease of less than .1 of 1% in number of employees
over the month interval.
The 16 non-manufacturing industries surveyed, together with the percents of change over the month interval and the index numbers of employment and payrolls, where available, are shown in the table below. The year
1929 was used as the index base or 100 in computing the index numbers of
these non-manufacturing industries, as information for earlier years is not
available from the Bureau's records. The year 1929 may be considered a
fairly normal recent year for these non-manufacturing industries.
INDEXES OF EMPLOYMENT AND PAYROLL TOTALS IN APRIL AND
MAY 1933, TOGETHER WITH PERCENTS OF CHANGE BETWEEN
APRIL AND MAY 1933 IN NON-MANUFACTURING INDUSTRIES.
Indexes of
Per Cent
Per Cent
Indexes of
Payroll Totals.
of
of
Employment.
(Avg.1929--100) Change (A001929=100) Change
April to
April to
April
May
May
May
May
April
1933.
1933. 1933.
1933.
1933. 1933.
Industries.
Anthracite mining
Bituminous coal mining
Metalliferous mining
Quarrying & non-metallic mln'g
Crude petroleum producing___ _
Telephone and telegraph
Power and light
Electric-railroad & motor bus
operation & maintenance__
Wholesale trade
Retail trade
Hotels
Canning and preserving
Laundries
Dyeing and cleaning
Banks, brokerage, insurance,
and real estate
Building construction
51.6
63.7
29.4
39.3
56.8
72.3
76.9
43.2
61.2
30.0
43.4
56.9
70.1
76.9
-16.4
69.5
73.3
78.6
71.9
49.2
73.4
81.1
69.1
74.0
77.0
71.9
45.5
73.5
82.0
-0.5
+0.9
-2.1
96.3
96.4
+2.2
+10.5
+0.3
-3.1
+0.1
-7.5
+0.2
+1.1
+0.1
*+8.9
37.4
26.6
16.4
20.2
40.1
67.8
69.4
30.0
26.9
17.0
23.8
41.6
68.5
69.9
-19.7
+1.4
+3.7
+17.9
+3.9
+1.1
+0.7
58.1
56.0
60.4
51.7
33.5
54.0
54.6
58.2
57.4
59.5
51.8
31.8
54.5
53.9
+0.2
+2.5
--1.5
+0.1
-5.0
+0.9
-1.3
83.3
83.6
+0.4
*+los
x Indexes not computed as data for index base year are not available.
Y Less than one-tenth of 1%.
* Preliminary.
Production of Electricity Continues to Increase.
The production of electricity by the electric light and
power industry of the United States for the week ended
June 17 was 1,578,101,000 kwh., a gain of 9.5% over the
corresponding period last year during which period output
totaled 1,441,532,000 kwh. The seven days ended June 17
1933 was the seventh successive week that production
exceeded that of the same period last year. The current figure
also compares with 1,541,713,000 kwh. produced during the
week ended June 10 1933. The Institute's statement follows:
PER CENT CHANGES.
Major Geographic Dioisions-New England
Middle Atlantic
Central Industrial
Southern States
Pacific Coast
Total United States
Week Ended
Week Ended
June 17 1933, June 10 1933.
Week Ended
June 3 1933.
+18.2
+7.0
+11.9
+13.6
-1.4
+14.5
+7.2
+10.0
+10.9
-5.3
+12.1
+7.1
+7.3
+12.9
-2.3
+9.5
+7.4
+5.8
Note.-Specific information on the trend of electric power production is now
available for the Southern States the addition of another geographic region. In
the weekly reports of electric power output. This major economic division includes
the territory south of the Potomac and Ohio rivers and the States of Arkansas,
Oklahoma, Louisiana and Texas.
The region formerly described as the Atlantic Seaboard has been changed to the
"Middle Atlantic" area and includes the States of Maryland, Delaware, New
Jersey and the central and eastern portion of New York and Pennsylvania.
No changes have been made in New England, the Pacific Coast, or the Central
Industrial region which, as before, is outlined by Buffalo, Pittsburgh, Cincinnati,
St. Louis and Milwaukee.
Arranged in tabular form, the output in kilowatt hours of
the light and power companies of recent weeks and by
months since and including January 1930, is as follows:
Financial Chronicle
4358
Week of-
1933.
Week of-
1932.
Week of-
1931.
Jan. 14 1,495,116.000 Jan. 16 1.602,482,000 Jan. 17 1,716,822,000
Jan. 21 1,484,089,000 Jan. 23 1,598,201,000 Jan. 24 1,712,786,000
Jan. 28 1,489,636,000 Jan. 30 1,588,967,000 Jan. 31 1,687,160,000
Feb. 4 1,454,913,000 Feb. 6 1,588,853,000 Feb. 7 1,679.016,000
Feb. 11 1,482,509,000 Feb. 13 1,578,817,000 Feb. 14 1,683,712,000
Feb. 18 1,469,732,000 Feb. 20 1,545,459,000 Feb. 21 1,680,029,000
Feb. 25 1,425,511,000 Feb. 27 1,512,158,000 Feb. 28 1,633,353,000
Mar. 4 1,422,875,000 Mar. 5 1,519,679,000 Mar. 7 1,684,125,000
Mar. 11 1,390,607,000 Mar. 12 1,538,452,000 Mar. 14 1,676.422,000
Mar. 18 1,375,207,000 Mar. 19 1,537,747,000 Mar. 21 1,682,437,000
Mar. 25 1,409,655,000 Mar. 26 1,514,553,000 Mar. 28 1,889,407,000
Apr. 1 1.402,142,000 Apr. 2 1,480,208,000 Apr. 4 1,679,764,000
Apr. 8 1,399,367,000 Apr. 9 1,465,076,000 Apr. 11 1,647,078,000
Apr. 15 1,409,603,000 Apr. 16 1,480,738,000 Apr. 18 1,641,253,000
Apr. 22 1,431,095,000 Apr. 23 1,469,810,000 Apr. 25 1,675,570,000
Apr. 29 1,427,960,000 Apr. 30 1,454,505,000 May 2 1,644,437,000
May 6 1,435,707,000 May 7 1,429,032,000 May 9 1,837,296,000
May 13 1,468,035,000 May 14 1,436,928,000 May 16 1,654,303,000
May 20 1,483,090,000 May 21 1,435,731,000 May 23 1,644,783,000
May 27 1,493,923,000 May 28 1,425,151,000 May 30 1,601,833,000
June 3 1.461,488,000 June 4 1,381,452,000 June 6 1,593,662,000
June 10 1.541,713,000 June 11 1,435,471,000 June 13 1,621,451,000
June 17 1,578,101,000 June 18 1,441,532,000 June 20 1,609,931,000
June 25 1,440,541,000 June 27 1,634,935,000
June 24
July 2 1,456,961,000 July 4 1,607,238,000
July 1
July 9 1.341.730.000 July 11 1,603,713,000
July 8
a Increase over 1932.
DATA FOR RECENT MONTHS.
Month of-
1933.
1932.
1931.
1930.
1933
Under
1932.
6.7%
7.1%
7.5%
8.4%
6.1%
4.9%
5.7%
6.4%
9.8%
10.6%
8.9%
5.3%
4.5%
4.8%
2.8%
1.8%
a0.5%
a2.2%
a3.3%
a4.8%
a5.8%
a7.4%
a9.5%
$212,229,000 in May 1932. For the 11 months ended May
1933 the exports of the metal foot up $131,012,000, against
$1,007,727,000 in the corresponding 11 months of 1931-32.
Silver imports for the 11 months ended May 1933 have been
$20,002,000, as against $23,982,000 in the 11 months ended
May 1932, and silver exports were $8,038,000 compared
with $18,711,000.
TOTAL VALUES OF EXPORTS AND IMPORTS OF THE UNITED STATES.
(Preliminary figures for 1933 corrected to June 17 1933.)
MERCHANDISE.
5 Months Ending May.
May.
Exports
Imports
Excess of exports
Exoes.• of Imports_
1933.
1932.
1933.
1932.
Increase(+)
Decrease(-)
1.000
Dollars.
114,000
107,000
1,000
Dollars.
131,899
112,278
1,000
Dollars.
549 338
470 026
1,000
Dollars.
725,884
636,506
1,000
Dollars.
-178,526
-166,480
7,000
----
19,623
__ _
79,312
___
89,358
____
EXPORTS AND IMPORTS OF MERCHANDISE. BY MONTHS.
____
1933
Under
1932.
Total
__-77,442,112,000 88.083.969.000 89.467.099.000
Note.-The monthly figures shown above are based on reports covering approximately 92% of the electric light and power industry and the weekly figures are based
on about 70%.
Record of Farm Bankruptcies Relatively Low.
Farmers do not commonly seek escape from their financial
obligations via the bankruptcy route, says the Bureau of
Agricultural Economics, reporting on farm bankruptcies last
year. Less than 5,000 farmers resorted to bankruptcy in the
year ended June 30 1932. This was 7.7% of all bankruptcies
as reported by occupational, business and professional
groups. An announcement issued by the United States Department of Agriculture, June 10, which contained the foregoing, continued:
The figures on farm bankruptcies are a little larger than those for the
preceding year-4,849 farm bankruptcies as compared with 4,023-but the
Bureau points out that this represents only one farmer out of 1,000, the vast
majority of farmers preferring to fight through the depression and endeavor
to pay their obligations. That the farm is a home as well as a business is
probably the chief motivating factor.
The Bureau's figures are compiled from information collected by the
Attorney-General. All geographic divisions except the East South Central
States participated in the increase in farm bankruptcies in 1932 compared
with 1931, the largest increase being in the East North Central States, where
the number of farm bankruptcies last year was 1,580 against 1,025 in 1931.
Farm bankruptcies have been increasing steadily in this region since 1921.
Illinois led all States in number of farm bankruptcies last year, reporting
614 cases, followed by Ohio with 460, Iowa 456, Wisconsin 251, Missouri 228,
Indiana 208, New York 193, and Georgia 165 cases. The total of 63,279
bankruptcies by all groups was divided by the Attorney-General as follows:
Farmers, 4,849; wage earners, 29,655; merchants, 15,606; manufacturers,
1,466; professional, 1,506; other classes, 10,197. The total number of bankruptcies in 1931 was 60,105.
Country's Foreign Trade in May-Imports and Exports.
The Bureau of Statistics of the Department of Commerce
at Washington on June 19 issued its statement on the
foreign trade of the United States for May and the 11
months ended with May. The value of merchandise exported in May 1933 was estimated at $114,000,000 as compared with $131,899,000 in May 1932. The imports of
merchandise are provisionally computed at $107,000,000 in
May 1933, as against $112,276,000 in May the previous
year, leaving a favorable balance in the merchandise movement for the month of May of approximately $7,000,000.
In May 1932 there was a favorable trade balance in the
merchandise movement of 819,623,000. Imports for the
11 months ended May 1933 have been 81,046,014,000 as
against $1,619,990,000 for the corresponding 11 months
of 1931-32. The merchandise exports for the 11 months
ended May 1933 have been $1,320,342,000 against $1,834,187,000, giving a favorable trade balance of $274,328,000
for the 11 months of 1932-33 against 8214,197,000 in the
11 months of 1931-32.
Gold imports totaled $1,785,000 in May 1933 against
$16,715,000 in the corresponding month of the previous
year, and for the 11 months ended May 1933 were 8397,843,000, as against 8499,959,000 in the same period a
year ago. Gold exports in May were $22,924,000 against
1931.
1932.
1933.
January_ _ _ _ 6,480,897,000 7,011,736,000 7,435,782,000 8,021,749,000 7.6%
February ___ 5,835,263,000 6,494,091,000 6,678,915,000 7,066,788,000 10.1%
6,182.281,000 6,771.684,000 7,370,687,000 7,580,335,000 8.7%
March
6,024,855,000 6,294,302,000 7,184,514,000 7,416,191,000 4.3%
April
6,219,554,000 7,180,210,000 7,494,807,000
May
6,130,077,000 7,070,729,000 7,239,697,000
June
6,112,175,000 7,286,576,000 7,363,730,000
July
8,310,867,000 7,166,088,000 7,391,196,000
August
6,317,733,000 7,099,421,000 7,337,106,000
September__
8,633,865,000 7,331,380,000 7,718,787,000
---October 6,507,804,000 6,971,644,000 7,270,112,000
---November _
6,638,424,000 7,288.025,000 7,566,601,000
---December..__
June 24 1933
1930.
1929.
1928.
1.000
1.000
1,000
1,000
1.000
1,000
Dollars. DoUars. Dollars. Dollars. Dollars. Dollars.
120,589 150,022 249,598 410,849 488,023 410.778
101,516 153,972 224,346 348,852 441.751 371,448
108,014 154,878 235,899 369,549 489,851 420,617
105.219 135,095 215,077 331,732 425,264 363,928
114,000 131,899 203,970 320,035 385,013 422,557
114,148 187,077 294,701 393,186 388,881
106,830 180,772 288,782 402,881 378,984
108,599 164,808 297,785 380,564 379,008
132,037 180,228 312,207 437,183 421,807
153,090 204,905 328,898 528,514 550,014
138,834 193,540 288,978 442,254 544,912
131,814 184,070 274,858 426,551 475,845
ExportsJanuary
February
March
AprIl
May
June
July
August
September
October
November
December
5 months ending May 549,338 725,884 1,128,890 1,781,017 2,229,902 1,989,328
11 months ending May 1,320,342 1,834,187 2,896,353 4,398,924 4.980,270 4,488,411
1 611,016 2,424,289 3,843,181 5,240,995 5,128,357
12 months end. Dec__
ImportsJ inuary
February
March
April
May
June
July
August
September
October
November
December
183,148
174,946
210,202
185,706
179,694
173,455
174.460
188.879
170,384
168,708
149,480
153,773
135,520
130,999
131,189
128,522
112,276
110,280
79,421
91,102
98.411
105,499
104,468
97,087
96.006
83,748
94.860
88.412
107,000
310,968
281.707
300,480
307,824
284,683
250,343
220,558
218,417
226,352
247,387
203,593
208,838
337,918
351,035
380,43!
345,314
353,981
317.249
317,848
348,715
319,818
355,358
328,585
339.408
368,897
389,442
383,818
410,886
400,149
353,403
352.980
389,358
351,304
301,063
338,472
309,809
5 months ending May 470,026 636,506 933,698 1,485,842 1,932,972 1,768,883
11 months ending May 1,046,014 1,819,990 2,258,619 3,598.628 3,938,484 3,830,252
12 months end. Dec
1,322,774 2,090.6353.060,908 4.399,3614,091,444
GOLD AND SILVER.
5 Months Ending May.
May.
GoldExports
Imports
Excess of exports
Excess of Imports
SilverExports
Imports
Excess of exportsExcess of Imports.._
1933.
1932.
1933.
1932.
Inerease(+)
Decrease(-)
1.000
Dollars.
1,000
Dollars.
1,000
Dollars.
1,000
Dollars.
1.000
Dollars.
22,024
1,785
212,229
18,715
89,322
182,378
21,139
___
195,514
----
93,058
235
5,275
1,885
1,547
2,457
11,105
---5.040
318
-_ _-
541,721
127,780
-452,399
+54,598
413,941
7,001
9,352
-4,544
+1,753
2,351
8,648
EXPORTS AND IMPORTS OF GOLD AND SILVER. BY MONTHS.
Silver.
Gold.
1933.
ExportsJanuary
February
March
April
May
June
July
August
September
October
November
December
1932.
1931.
1930.
1933.
1932.
1931.
1930.
1.000 1,000 1,000 1.000 1,000 1,000 1,000 1,000
Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars.
54 8.948 1,551
1,811 3,571 5,892
14 107,863
14
207
21,521 128.211
209
942 1,638 5.331
26
290
289
28,123 43,909
967 2,323 5,818
27
16.741 49,509
110
171
1,617 3,249 4,848
22,924 212,229
628
82
235 1.885 2.099 4,978
40
26
226.117
____
1,288 1,895 3,338
____
828 2,305 8,709
23,474 1,009 41,529
39 39,332
____
18.067
433 2,024 4,544
__
60 28,708 11,133
868 2,183 3,903
____
81 398.604 9,268
1,318 2,158 4,424
___
16 4.994 5,008
875
872 4,103
38
___
13 32,851
1.280 2,188 3,472
749 9,837
5 mos.end. May 89,322 541,721
11 mos.end. May 131.0121007727 107,054 119,170
809,528 488,794 115,967
12 mos.end.Dec.
2.457 7,001 12,881 26,665
8,038 18,711 37,035 68,718
13,850 26,485 54,157
importsJanuary
February
March
April
May
June
Ally
August
September
October
November
December
1,783
855
1,693
1,520
5,275
____
__
____
____
____
___
-___
128,479
30.397
14,948
8.769
1,785
34,913
37,644
19,238
19.271
16,715
20,070
20,037
24,170
27,957
20.674
21.758
100,872
34,428
16,158
25,671
49,543
50,258
83,887
20,512
57,539
49,289
80,919
94,430
89,509
12,908
60,198
55,76/1
65,835
23.552
13.938
21,889
19,714
13,680
35.635
40,159
32,778
2,097
2,009
1,809
1,890
1,547
1,401
1,288
1,554
2.052
1,305
1,494
1.203
2,896
1,877
1,821
2,439
2.636
2,364
1,663
2,685
2.355
2,573
2,138
3,215
4,756
3,923
4,831
3.570
3,488
2,707
3.953
3,492
3,481
3,270
2,852
2,680
5 mos.end. May 182,378 127,780 178,054 218,261 11,105 9,352 11,869 20,566
11 rnos.end. May 397,843 499,959 339,908 328,403 20,002 23.082 31,158 51,771
12 mos.end. Dec.
363,315 612,119 396,054
19,650 28,864 42,761
Building Operations in Principal Cities of United States
During May According to United States Department
of Labor-Estimated Cost of New Residential and
New Non-Residential Buildings Increased.
Indicated expenditures for total building construction in
May was 128.6% greater than in April 1933, according to
•
Financial Chronicle
Volume 136
reports received by the Bureau of Labor Statistics of the
U. S. Department of Labor from 761 identical cities having
a population of 10,000 or over. The 1933 increase of May
over April was over five times greater than the increase
shown in comparing these two months in 1932, said the
Bureau, which continued under date of June 19:
Comparing May 1933 with April 1933, there was an increase of 32.8%
in the number and an increase of 75.6% in the estimated cost of new residential buildings. This is the first time in four years that indicated expenditures for residential buildings was greater in May than in April. New nonresidential buildings increased 16.2% in number and 240.9% in indicated
expenditures. There was an increase of 12.7% in the number of additions,
alterations, and repairs and an increase of 31.7% in indicated expenditures for this type of structure. The total number of building operations
Increased 14.6% during this period. During May 1933, 3,732 familydwelling units were provided in new buildings. This is an increase of61.0%
as compared with April. The index number of total building operations
increased from 9.5 in April to 21.7 in May.
Table I shows the percent of increase or decrease in indicated expenditures for building operations in May as compared with April, each year,
1930 to 1933, inclusive:
TABLE 1-PER CENT OF INCREASE OR DECREASE IN INDICATED
EXPENDITURES FOR BUILDING OPERATIONS IN MAY AS COMPARED WITH APRIL, EACH YEAR, 1930 TO 1933. INCLUSIVE.
Year.
1930
1931
1932
1933
Residential
Building.
- 5.0
-18.0
-18.6
+75.6
Non
Residential
Building.
Additions,
Alterations
and Repairs.
- 9.4
- 20.9
+ 57.1
+240.9
Total
Pudding
Operations.
- 6.1
- 19.5
+ 24.0
+128.6
+ 3.2
-18.6
-14.7
+31.7
The various agencies of the United States Government awarded contracts
furing May for buildings to cost $2,127,603. This is over 32,500.000 less
than the value of contracts awarded during April 1933, and more than
$27,000,000 less than in May 1932.
Comparing permits issued in 347 identical cities having a population of
25,000 or over in May 1933 and May 1932, there was a decrease of 12.1%
in the number of new residential buildings, but an Increase of 5.4% in indicated expenditures for new residential buildings. New non-residential
buildings decreased 16.8% in number and 15.9% in estimated cost. There
was an increase in both the number and estimated cost of additions, alterations, and repairs. The number increased 12.8% and indicated expenditures 19.1%. The total number of building operations, comparing May
1933 with May 1932,increased 3.7%,while indicated expenditures decreased
7.4%. The number of family-dwelling units provided in these 347 cities
increased 16.1%, comparing May 1933 with May 1932. This is the first
month during either 1933 or 1932 to show an increase in the number of
families provided for and in indicated expenditures for residential buildings
as compared with the same month of the previous year.
Permits were issued during May 1933 for the following important buildings: In the Borough of the Bronx for apartment houses to cost over $2,800,000; in Boston, Mass., for a school building to cost $300,000; in Peekskill,
N. Y., for an armory to cost $319,000; in Washington, D. C., for a bus
terminal to cost $185,000; in Duluth, Minn., for an institutional building
to cost nearly $170,000; over $1,300.000 was spent for repairs in the Borough of Manhattan and, in Philadelphia, indicated expenditures for repairs
reached a total of nearly 3900.000; in San Frnacisco, Calif., a permit was
Issued for various; public works to cost over $31.000,000. A contract was
awarded by the Supervising Architect of the U.S.Treasury Department for
a post office in Nashville, Tenn., to cost over $990,000.
TABLE II-ESTIMATED COST OF NEW BUILDINGS IN 761 IDENTICAL
CITIES, AS SHOWN BY PERMITS ISSUED IN APRIL AND MAY,
1933, BY GEOGRAPHIC DIVISIONS.
New Residential Buildings.
Geographic Division. Cities.
Estimated
COS,.
April 1933.
Families Provided /or is
New Dwellings.
May 1933. April 1933.
May 1933.
New England
108
Middle Atlantic
174
East North Central._ 176
West North Central_ 66
77
South Atlantic
South Central
77
Mountain and Pacific 83
$887,721
2,267,390
677,118
709,275
807,505
457,382
1,510,081
$1,776,918
5,614,964
1,250,843
817,265
883,250
542.007
1,962,773
239
524
185
244
268
260
598
415
1,440
291
274
323
270
719
Total
761
Per cent of change_._
7,316,472
12,848,020
+75.6
2.318
3,732
+81.0
Geographic DiriliOn. Cities.
New Non-Residential
Buildings,
Estimated
Cost.
Total Construction
(Including Alterations
and Repairs),
Estimated Coat.
April 1933. May 1933. April 1933. May 1933.
New England
108
Middle Atlantis
174
East North Central__ 176
West North Central_ 66
South Atlantic
77
South Central
77
Mountain and Pacific 83
Total
Per cent of chancre
761
$604,192
2,265,155
698,423
4,785,365
1,595,352
802,675
1,282,687
$1,154,354
2,975,677
1.143,186
813,721
945,058
1,688,964
32,304,098
$2,514,513
7,654,441
2,468,561
6,144,603
3,387,026
1,928,932
5,191,644
$4,191,805
13,536,892
3,831,746
2,450,339
3,034,037
3,131,389
36,782,706
12,033,849
41,025,058
-4-240.0
29,289,720
66,758,914
4.195 s
Continued Improvement Noted in Volume of Business
in Minneapolis Federal Reserve District During
May-Activity in Some Lines Exceeded Volume of
Year Ago.
In its preliminary summary of business conditions in the
Ninth (Minneapolis) Federal Reserve District, issued under
date of June 16, the Federal Reserve Bank of that place
said that "the volume of business in the District continued
to improve during May and an increasing number of lines of
activity exceeded the volume of the preceding year." Continuing the Bank said:
The daily average of bank debits at reporting cities rose from the adjusted
index of 55 in April to 58 in May and in the latter month was slightly higher
than a year previous. The adjusted country check clearings index increased
from 71 in April to 79 in May, and in the latter month was at the highest
4359
level since July 1931. Freight car loadings for the first three weeks of May
were 9% larger than in the corresponding period last year, with increases
over last year's figures reported for grains and grain products, coal, coke,
forest products and ore. Other increases occurred in flour shipments,linseed
products shipments and department store sales. The preliminary total of
department store sales during May was 3% larger than a year ago. This
was the first time since March 1931 that the current month's figure has
exceeded the total for the same month in the previous year. Decreases
occurred in electric power consumption and building permits and contracts.
Deposits at city member banks were larger on June 7 than a year ago.
Part of the rise in business activity is due to the transaction of business
which normally would have occurred last fall. An unusually large part of
the cash grain crop was held on farms beyond the normal marketing period
and is now being shipped to market in heavy volume. May marketings at the
Minneapolis and Duluth terminals of wheat produced in the Ninth Federal
Reserve District amounted to 10,982,000 bushels as compared with 7,682,000 bushels in April and 2,718,000 bushels in May a year ago. Prices of
farm products continued to rise during May and in that month, higher
prices than last year's quotations were quoted for wheat, corn, rye, flax,
butcher cows, feeder steers, hogs, lambs, ewes, butter, eggs and potatoes.
These higher prices, together with the unusually heavy marketing movement of certain products, have provided the rural portion of the district
with a considerable debt-paying and purchasing power.
Largely as a result of the increased wheat marketings mentioned above,
the farmers' cash income estimate for May was considerably higher than in
May last year, and higher than in any month since last October. The estimate of the amount of farmers' cash income from hogs was also larger than
in the same month in the preceding year for the first time since the summer
of 1930, because of the large increase in prices received, as the quantity
marketed was smaller than in May last year.
ESTIMATED VALUE OF IMPORTANT FARM PRODUCTS MARKETED IN
THE NINTH FEDERAL RESERVE DISTRICT.
Bread wheat
Durum wheat
Rye
Flax
Potatoes
Dairy products
Hogs
'Total of seven items
May 1933.
May 1932.
% May 1933
of May 1932.
$7,702,000
1,383,000
186,000
600,000
968,000
8,557,000
4,296,000
51,628.000
468,000
148,000
433,000
525,000
8,531,000
3,615,000
473
296
126
139
184
100
119
223 11h2 OM
515 34R 000
154
Building Activity in Illinois During May and First
Five Months of 1933 Reviewed by Illinois Department of Labor.
Howard B. Myers, Chief of the Division of Statistics and
Research of the Illinois Department of Labor, states that
"during May 1933, a total estimated expenditure of $1,012,309 for 1;353 building projects was authorized by building
permits issued in the 65 reporting cities of Illinois. These
figures," Mr. Meyers continued, "which disclose the third
consecutive monthly gain, represent increases over April
1933 of 18.4% in the number of projects, and 12.5% in the
total estimated cost." Under date of June 19 Mr. Myers
continued:
The April-May increase is to be contrasted with a usual seasonal decline
In the estimated cost of permit projects of more than 5%. Compared to
May 1932, the total expenditure of $1,012,309 represented a decline of
36.4%. For the first month since October 1932, the total estimated cost
of permit buildings exceeded $1,000,000.
New building projects accounted for the May increase, the total expenditure for all such projects showing a gain of 28.0% over April reports.
Within this classification residential building gained 50.6%, while nonresidential building increased 13.0%. The estimated cost of additions.
alterations, repairs and installations during May 1933 declined 1.9% from
the total cost reported in April. In Chicago, the total estimated cost of
building projects increased 33.4% in May, and that for projects in the
group of 34 Chicago suburban cities increased 15.2%. The total estimated
cost of proposed building projects in the 30 cities outside the Chicago
metropolitan area declined 17.5%.
In Chicago, expenditure for both new residential and new non-residential
building showed gains during May 1933 over the preceding month.* New
residential building increased from $36.750 in April to $112,000 in May,
or 204.8%, and new non-residential building increased from $102,575 to
$174,270, or 69.9% for the same period. The estimated expenditure for
additions, alterations, repairs and installations showed a decline from
April to May amounting to 8.4%. The increase in the proposed expenditure for new non-residential building is to be accounted for largely by the
erection of numerous refreshment and concession stands and other stores,
as well as small office buildings connected with parking lots and gasoline
service stations in the vicinity of the Century of Progress exposition. Over
$45,000 was to be spent on 75 projects authorized by permits issued in
May for such buildings, most of which are temporary structures.t The
increase in Chicago new residential building was the fourth consecutive
monthly gain reported, and for the first time since December 1931 the
estimated expenditure in residential building exceeded that for the same
month of the preceding year. The increase in new non-residential building
was the fifth consecutive monthly gain reported. Both new non-residential
building and additions, alterations, repairs, and installations total were
below those for May 1932. The May 1933 index for total Chicago building
was 2.8; that for new residential bullding. 1.5: for new non-residential
building, 1.9, and for additions, alterations, repairs and installations, 25.7.
(Monthly average 1929= 100.)
The increase of 15.2% in total estimated expenditure for the group of
34 Chicago suburban cities in May was caused by a gain of 60.1% in new
residential building and an increase of 58.9% in the estimated expenditure
for addition, alteration, repair and installation projects. New nonresidential building declined 43.9%. Twenty-two of the cities comprising
this group showed gains in the total estimated expenditure for all building
classifications over April, and 19 reported gains over May 1932.
The April-May decline of 17.5% in the total proposed expenditure for
the group of 30 reporting cities outside the Chicago metropolitan area was
caused by declines of 30.3% in new residential building, and 21.7% in
additions, alterations, repairs and installations. The gain in the estimated
expenditure for new non-residential building of 10.6% was insufficient to
offset losses sustained by building in the other two major classifications.
Eleven of the 30 reporting cities outside the Chicago metropolitan area
showed gains over April 1933 and 9 reported gains over May 1932.
4360
Financial Chronicle
Of the total estimated expenditure authorized by permits in the 65
reporting cities of the State during May one-half was to be expended for
building projects in Chicago; 26.6% in the 34 reporting municipalities in
the Chicago suburban area; and 23.3% in the 30 cities outside the Chicago
Metropolitan area. The proportion of the total estimated amount to be
expended for new residential building was 25.7%; for new non-residential
building was 29.1%, and for additions, alterations, repairs and installations, 45.2%•
A cumulated total estimated expenditure amounting to $3.757,384 was
authorized by permits issued in 65 Illinois cities during the first five months
of 1933. This represents a loss of 50.8% from the total of $7,638,929z
authorized by identical cities during the same period in 1932. In Chicago,
the total estimated cost of permit building projects for the same comparative
period declined from $3,497,150z in 1932 to $1,595,201. or 54.4%; for the
34 Chicago suburban cities the total proposed expenditure declined from
$1,651,630z to $912,827, or 44.7%, and for the 30 municipalities outside
the Chicago metropolitan area the total estimated cost declined from
$2,490.149z to 51,249.356, or 49.8%. An analysis of the cumulative
totals by building classification disclosed that for the five-month period
total State expenditure for new residential building declined from 51,854,369z in 1932 to $659,409 in 1933. or 64.4%; new non-residential building
declined from $3,346,376z to 51,255,478. or 62.5%, and additions, alterations, repairs and installations decreased from $2,438,184z in 1932 to
51,842.497 in 1933, or 24.4%. Fourteen of the 65 reporting cities-9 in
the Chicago suburban area, and 5 outside the Chicago metropolitan area—
reported authorized expenditures for the first five months of 1933, in excess
of the expenditures for the same period of 1932.
•The index of seasonal variation for total Chicago building for May is
126.7. and for April, 139.8.
t These projects are outside the Exposition grounds. Figures do not
include expenditure for Exposition buildings, since no permits were issued
for such projects.
z Revised.
Lumber Orders Slightly Below Preceding Peak Week—
Production Heaviest Since October 1931.
New business received at the lumber mills during the week
ended June 17 1933, though 3% below that shown in revised
reports for the preceding week, was otherwise largest in
volume since December 1930, and lumber production was
heaviest since October 1931, according to telegraphic reports
to the National Lumber Manufacturers Association, from
regional associations, covering the reports of 647 leading
hardwood and softwood mills. Shipments except for the
preceding week were largest since September 1931. Hardwood orders in each of the last three weeks have exceeded
those reported for any week since September 1930. The
Association's report follows:
Total orders during the week ended June 17 were 252.482,000 feet:
shipments were 208,842,000 feet; production, 174,707,000 feet. All regions
showed excess of orders over output, softwood orders being 39% and
hardwood orders 96% above production. For the 24 weeks of 1933 to
date, orders were 41% above production and shipments were 27% above.
Orders at Western Pine mills exceeded 60,000,000 feet which was appreciably above those of any previous week since the reorganization of that
association.
Compared with corresponding week of 1932, production was 47%
greater;shipments 44% and orders 94% more. All reporting regions showed
orders and production in excess of last year. For the year to date, production was less than 1% below that of similar period of 1932; shipments
were 3% below; orders 14% above.
Unfilled orders at the mills were the equivalent of 25 days' average
production. They were 85% heavier than on corresponding date of last
year. Gross stocks at softwood mills were 26% lighter.
Forest products carloadings continued to advance, totaling 24,352 cars
during the week ended June 10. This was 7,278 cars above the same week
in 1932 and 6,194 cars below the corresponding week of 1931.
Lumber orders reported for the week ended June 17 1933, by 420 softwood mills totaled 219,663,000 feet, or 39% above the production of the
same mills. Shipments as reported for the same week were 181,024,000
feet, or 15% above production. Production was 157,967,000 feet.
Reports from 244 hardwood mills give new business as 32,819,000 feet,
or 96% above production. Shipments as reported for the same week were
27,818,000 feet, or 66% above production. Production was 16,740,000 feet.
Unfilled Orders.
Reports from 367 softwood mills give unfilled orders of 659,306,000 feet,
on June 17 1933, or the equivalent of 24 days' production. The 526 identical mills (hardwood and softwood) report unfilled orders as 747,394,000
feet on June 17 1933, or the equivalent of 25 days' average production, as
compared with 404.915,000 feet, or the equivalent of 14 days' average
production on similar date a year ago.
Last week's production of 404 identical softwood mills was 151,233,000
feet, and a year ago it was 103,673,000 feet; shipments were respectively
175,718,000 feet and 126,865,000; and orders received 210,045,000 feet and
111,840,000. In the case of hardwoods, 178 identical mills reported
production last week and a year ago 12,746,000 feet and 8,152,000; shipments 21,013,000 feet and 9,650,000: and orders 25,024,000 feet and
9,264,000 feet.
West Coast Movement.
The West Coast Lumbermen's Association wired from Seattle the following new business, shipments and unfilled orders for 181 mills reporting for
the week ended June 17:
SHIPMENTS.
NEW BUSINESS.
UNSHIPPED ORDERS.
Feet.
Feet.
Feet.
Domestic cargo
Coastwise and
Domestic cargo
delivery__ _ _ 46,459,000 delivery _235,259,000 lntercoastal _ 37,480,000
Export
11,301,000
16,491,000 Foreign
109,395,000 Export
Rail
33,247,000
46,261,000 Rail
108,498,000 Rail
Local
7,202,000
Local
7,202,000
Total
453,152,000
116,413,000 Total
Production for the week was 82,646,000 feet.
Total
89,230,000
Southern Pine.
The Southern Pine Association reported from New Orleans that for 101
mills reporting, shipments were 32% above production, and orders 25%
above production and 5% below shipments. New business taken during
the week amounted to 35,471,000 feet (previous week 39,362,000 at 104
mills): shipments 37,455,000 feet (previous week 36,665,000); and production 28,461,000 feet (previous week 27,237,000). Production was 48% and
orders 60% of capacity. compared with 44% and 64% for the previous
June 24 1933
week. Orders on hand at the end of the week at 99 mills were 93,635,000
feet. The 99 identical mills reported an increase in production of 39%,
and in new business an increase of 77%, as compared with the same week
a year ago.
Western Pine.
The Western Pine Association reported from Portland, Ore., that for
114 mills reporting, shipments were 17% above production, and orders
45% above production and 24% above shipments. New business taken
during the week amounted to 60,963,000 feet (previous week 52,725,000.
at 115 mills); shipments 49,092,000 feet (previous week 46,935,000); and
Production 41,941,000 feet (previous week 42,558,000). Production was
31% and orders 45% of capacity, compared with 31% and 38% for the
previous week. Orders on hand at the end of the week at 113 mills were
163,445,000 feet. The 111 identical mills reported an increase in production
of 27%, and in new business a gain of 104%, as compared with the same
week a year ago.
Northern Pine.
The Northern Pine Manufacturers of Minneapolis, Minn., reported
production from 7 mills as 3,742,000 feet, shipments 3,485,000 feet and
new business 4,927,000 feet. The same mills reported production 145%
greater and new business 12% greater than for the same week last year.
Northern Hemlock.
The Northern Hemlock and Hardwood Manufacturers Association, of
Oshkosh, Wis., reported softwood production from 17 mills as 1,177,000
feet, shipments 1,762,000 and orders 1,889,000 feet. Orders were 23%
of capacity compared with 12% the previous week. The 15 identical milla
reported a gain of 86% in new business, compared with the same week a
year ago.
Hardwood Reports.
The Hardwood Manufacturers Institute, of Memphis, Tenn., reported
production from 227 mills as 15,938,000 feet, shipments 25,504,000 and
new business 31,013,000. Production was 34% and orders 66% of capacity,
compared with 28% and 65% the previous week. The 163 identical
mills reported production 55% greater and new business 165% greater
than for the same week last year.
The Northern Hemlock and Hardwood Manufacturers Association, of
Oshkosh, Wis., reported hardwood production from 17 mills as 802,000
feet, shipments 2,314,000 and orders 1,806,000 feet. Orders were 30%
of capacity, compared with 48% the previous week. The 16 identical mills
reported a gain of78% in production and a gain of 261% in orders,compared
with the same week last year.
Cuban Growers Demand Share in Sugar Profit.
In United Press advices June 10 from Havana,Cuba,it was
stated that a memorandum of the Cuban Sugar Growers and
Agriculturists' Association to President Gerardo Machado,
protesting against the treatment accorded sugar growers at
the Violeta and Velasco Sugar Centrals of the Eastern Cuba
Sugar Corporation, is seen by the Havana press as the first
step in a move to order the enforcement of law or the passage
of new legislation for the protection of the growers who deliver cane to the mills under contract. The Havana advices
(as given in the New York "Herald Tribune") went on to
say:
The growers complain that, despite the recent rise in sugar prices, the
Eastern Cuba Corporation is seeking to depress prices paid to growers for
the cane. This corporation is a subsidiary of the Cuban Cane Products.
Before the harvesting of the 1933 sugar crop, the sugar mills made a new
and special arrangement with the growers. The previous arrangement had
provided that for each 100 arrobas of sugar cane cut and delivered to the
mill the grower was to receive 51
/
2 arrobas of sugar. An arroba weighs 25
pounds. One hundred arrobas of cane produce between 12 and 13 arrobas
of sugar. Under the new special arrangement the grower was to receive
in advance 45 cents for each 100 arrebas delivered.
Sugar prices have risen considerably since this arrangement was effected
and now stand at between one and 13i cents a pound. But the growers
at the Violeta and Velasco mills maintain that the Eastern Sugar Corporation is liquidating its account by payment of an additional five cents per
100 arrobas of cane, thus bringing the total payment to 50 cents for 100
arrobas. They compare this price with that which they would have re/
2 arrobas (13734 pounds)
ceived under the contractual arrangement of 51
which, with sugar at its present price, would net them $1.37% to $1.72,
instead of 50 cents.
In addition to this situation, the growers say they are now faced with
ejection from the lands they have rented, sown and cultivated, as ttey are
unable to pay the rentals because of the low price received for their cane.
In brief, the growers pay rent for the land, sow and cultivate it, cut more
than one ton of cane and deliver it to the mill for a total of 50 cents.
International Wheat Accord at London Regarded
Assured—Henry Morgenthau Sr. Looks for FivePower Accord with Australia Joining United States,
Canada, Argentina and Russia.
Australia's acceptance of a wheat acreage reduction
scheme was all that was lacking yesterday (June 23), said
Associated Press cablegrams from London, for the consummation of a five-Power agreement described as an international enlargement of certain provisions of the American
Farm Relief Bill.
The Associated Press accounts added:
Russia and Argentina are the latest nations to join Canada and the
United States in the gigantic proposal. One part of the plan provides
for curtailment of acreage, perhaps by 15%. by the four great exporting
countries—Argentina, Australia. Canada and the United States.
Russia, to the great surprise and pleasure of delegates, joined in the
other part of the plan to limit wheat exports.
Henry Morgenthau Sr., technical adviser of the American World Economic Conference delegations, who has been prime mover in efforts to
enlist the biggest wheat producers, in the movement for increasing prices,
is confident Australia, too, will join.
"All that remains now is the settlement of actuarial details," the New
Yorker asserted. He said the plan provided for "reduction of acreage and
an arrangement as to maximum exports." He hopes also that Danubian
countries will participate.
Maxim Litvinoff, Soviet Foreign Commissar, accepted the agreement
'on exports, and Thomas le Breton, Argentine representative, accepted the
Stanley Bruce of Australia
entire proposal on behalf of their governments
was in touch with Canberra.
progress of their plans.
the
at
joy
colleagues'
his
sharing
One American,
described the development as "the biggest thing that has happened so far
in the conference."
Should Mr. Bruce hear favorably from his Government, the wheat
delegations were prepared to meet to-day to draft the agreement for
presentation to the conference.
Smaller producers then would be asked to enter the pact.
Automobile Financing During April 1933.
A total of 131,953 (preliminary) automobiles were financed
in April, on which $45,345,822 was advanced, compared
with 101,345 (revised) on which $33,540,278 was advanced
in March, and with 155,691 on which $56,415,652 was
advanced in April 1932, the Department of Commerce
reported on June 20.
Volume of wholesale financing in April was $40,912,368
(preliminary), as compared with $27,716,354 (revised) in
March and $33,903,704 in April 1932.
Monthly statistics on automobile financing, based on data
reported to the Bureau of the Census by 292 identical automobile financing organizations, are presented in the table
below for December 1932, and January, February, March
and April 1933. The month of December 1932 is included in
both series to afford comparability. Data for 1931 and 1932
include reports from 313 organizations. The figures include
complete revisions to date.
RCaU Financino.
Year
and
bfonth.
1931.
January
February
March
April
May
June
July
August
September
October
November
December
Total year
Wholesale
Financing
Volume
in Dollars.
40.164,672
49.812,959
63,089,716
71.194.343
72.623,199
58.171,936
48,853.330
43,942,549
35,840,571
25,770.269
15,719,974
29,257,137
New Cars.
Total.
Volume
in Dollars.
Number
of Cars.
160.490
172.958
237,273
290.076
277,950
265.389
236,878
204,878
176,663
159,980
131.047
134,663
554.440.655 2,448,245
1932.
January
February
March
April
May
June
July
August
September
October
November
December
Total year
4361
Financial Chronicle
Volume 136
Number
of Cars.
61,691.837
66,130,134
91,997.270
112.982.254
109,372,143
104,642,284
95,910,307
79,598,201
68,284,838
60,691,614
48,568.648
50,432,428
Volume
In Dollars.
58.499
67.599
102,665
133,347
126,729
115.106
100.832
83.602
67,609
58,055
44.701
48,131
32,945,588
36,854,428
55.022.086
70,544,761
68,564.134
83,554.955
59,300,107
48.885,947
38,809.797
33,195,759
25,394,801
27.305,927
950.301,958 1,006,875
558,158,290
122.344
123,574
140,779
155,691
184,721
177,961
132.467
131,069
111,189
97,922
82,161
82,110
44,628,529
44,829,138
51,148,285
56,415,052
58,435,573
63,169,095
44,716,907
45,068,741
38,837,225
33,623,573
27,727,369
27,025.018
41,375
40.780
46,234
57,661
63,885
74,205
45,816
46,416
39,513
31,241
24,666
26,194
23,475,671
23,623,496
26,887,515
31,835,792
33,590,555
38,329,334
24,149,328
24,644,532
21,551,246
17,644,406
13,980,978
14,090,821
330,267,440 1,521,988
535,625,105
537.986
293,803,672
81,592
26.824,994
26,061
13,961,808
34,841,766
33,276,393
34,121,364
33,903,704
38,608,439
43,682,471
26,016,028
22,104,084
18,676,535
13,131.603
11,774,473
20,130,580
1932.
December
1933.
January_ a
February_a
March a
April_b
20,121.956
91,862
30.159.102
87,153
27,550.717
27,716,354 c101,345
40,912,368 131,953
31.264,932
29,174,994
33.540,278
45.345,822
Used Cars.
Number
of Cars.
35,555
32,642
38,329
55.578
18,334.255
16,859,893
19,465,532
28,229,388
Volume
In Dollars.
Unclassified.
Number
of Cars.
Volume
in Dollars.
1931,
January
February
March
April
May
June
July
August
September
October
November
December
Total year
97,834
100,696
128,311
149,112
142,796
141,935
128,707
115,020
103,234
97,437
82,816
82,757
27,238,324
27,707,242
34,688,428
39,546,288
37,781,543
37,988,162
34,126,071
30,486,513
27,580,567
25,882,006
21,891,123
21.859,828
4,157
4,663
6,297
7.617
8,425
8,348
7,339
6,254
5,820
4.488
3,530
3,775
1,509,925
1,568,464
2,286,756
2,891,205
3,028,466
3.099,167
2,484,129
2,245,741
2,094,474
1,613,849
1,282,724
1,266,673
1,370,655
366.774,095
70.715
25,369,573
77,321
78,802
90,121
93,398
98,010
99,513
82.687
80,648
67,724
63,791
54.696
53,609
19,974,286
19,941,665
22,779,892
23.068.269
23.257.953
23,394,676
19,225,478
18,908,584
15,989,259
15,035,731
12,833,770
12,174,121
3,648
3.992
4,424
4,632
4.826
4,243
3,964
4,005
3,952
2,890
2.799
2,307
1,178,572
1,263,977
1,480,878
1,513,591
1,587,065
1,445,085
1,342,103
1,515,625
1,296,720
943,436
912,621
760,076
938,320
226,581,684
45,882
15.239,749
53,109
12,076,429
2,422
786.757
1932.
January
February
March
April
May
June
July
August
September
October
November
December
Total year
1932.
December
1933.
2.303
12,151,783
778,894
54,004
January.a
2,107
620,829
11,694.472
52,404
Februsxy-a
2,502
13,328.950
747,746
60,514
March _ a
3,265
1,023,374
18,093,060
73,110
April_b
Of
c
this
number
April-preliminary.
a January. February and March revised. b
42.12% were new cars, 55.41% used cars, and 2.47% unclassified.
The May output of 172,883 units was a gain of 23% over April and
51% over the corresponding month last year.
Production by Chamber members on the basis of this estimate amounted
to 605.739 units for the first five months of this year as compared with
584,505 units for the same period in 1932.
This report, which covered the entire industry with the exception of one
major producer, is by far the most encouraging which the industry has
received in some time inasmuch as factory operations are still being regulated
closely to retail sales.
Puerto Rico's Sugar Crop-Yield Reduced 21% to
785,000 Tons by Hurricane.
The following from San Juan, P. R., June 14, is from the
New York "Times":
The sugar Producers Association announced to-day that the crop now ending would amount to 785,000 short tons, a reduction of 207,000 tons from
last year's crop of 992,000 tons, approximately 21%. The loss was due
to hurricane. Final figures from centrals still grinding are not expected
materially to change the output.
Recently, improved prices affected the return on approximately 25%
of the crop, insuring a profit for some of the larger mills.
•111..
Activity in the Cotton Spinning Industry for May 1933.
The Bureau of the Census announced on June 21 that,
according to preliminary figures, 30,959,216 cotton spinning
spindles were in place in the United States on May 31 1933,
of which 24,571,498 were operated at some time during the
month compared with 23,416,680 for April, 23,439,122 for
March, 23,659,100 for February, 23,766,968 for January,
23,775,136 for December, and 21,633,036 for May 1932.
The aggregate number of active spindle hours reported for
the month was 8,309,664,772. During May the normal time
of operation was 26 2-3 days (allowance being made for the
observance of Memorial Day in some localities), compared
% for February, 253.
% for April, 27 for March, 233
with 243
for January, and 26 for December. Based on an activity
of 8.96 hours per day the average number of spindles operated
during May was 34,778,658 or at 112.3% capacity on a
single shift basis. This percentage compares with 95.7
for April, 93.9 for March,95 for February, 95.1 for January,
87.2 for December, and 63.3 for May 1932. The average
number of active spindle hours per spindle in place for the
month was 268. The total number of cotton spinning
spindles in place, the number active, the number of active
spindle hours and the average hours per spindle in place, by
States, are shown in the following statement.
State.
Retail Financing.
Year and
Month.
Output of Motor Vehicles During May Gained 23% Over
April-Production During Month Highest in 22
Months.
May production of motor vehicles by companie; belonging
to the National Automobile Chamber of Commerce was the
highest in 22 months, according to a preliminary report
issued June 15 at the Chamber's annual meeting. The
report continued:
Alabama
Connecticut
Georgia
Maine
Massachusetts
Mississippi
New Hampshire
New York
North Carolina
Rhode island
South Carolina
Tennessee
Texas
Virginia
All other States
United States
Cotton growing States
New England States
All other States
Spinning Spindles.
Active Spindle: Hours for May.
In Place ActiveDurMay 31. Mg May.
Average per Spindle.
Total.
In Place.
1,684,746 627,448,093
709,098 176.419.292
2,966,694 1,101,713,122
818,726 215,771,177
3,247,148 810,576,871
54,246.052
150,536
835,976 154,206,317
66,710,823
253,740
5,414.162 1,846,343.126
996,448 266.302,542
5,490,436 2,350,409,469
512,016 238,667,592
69,320,914
207.876
630,352 165,793,819
673,544 165,735,514
335
176
335
223
139
252
139
117
301
146
414
398
248
246
185
30,959,218 24,571,498 8,309,664,722
19,046,296 17,189,090 6,506.142.110
10,866,184 6,705,908 1,653,317,027
676,500 150,205,585
1,046,736
268
342
152
143
1,873,302
1,003.968
3,284,582
968,176
5,835,644
214,952
1,111,700
587,808
6,138,752
1,829,432
5,681.772
599,664
282,080
673.396
894,008
Farm Credit Administration to Sell 788,000 Bales of
Seed-Loan Cotton to Secretary of Agriculture.
What is reported as the first step to set up the cotton pool
from which options are to be offered to the producers was
taken on June 19 by the Farm Credit Administration in
announcing the sale of 788,000 bales of seed-loan cotton to
the Secretary. The Washington correspondent of the New
York "Journal of Commerce" on June 19 reporting this,
added that other sales of Government cotton to the Secretary
which will eventually lead to the creation of a 2,400,000-bale
pool are expected to follow. The following is the announcement made Juno 19 by the Farm Credit Administration:
The Farm Credit Administration, in accordance with the Agricultural
Adjustment Act, was directed by Congress to sell to the Secretary of
Agriculture all cotton taken from growers on seed and crop production loans,
which will amount to about 788,000 bales.
The Farm Credit Administration has made arrangements whereby final
settlement for this cotton with the growers will be made on the basis of
93i cents per pound, based on July, New York, for middling % cotton.
with current adjustments for variations in grade, staple and location.
4362
Financial Chronicle
The various agencies handling this cotton are rapidly developing final
settlement reports for the farmers on this price basis. These reports will
be mailed in the near future. In cases where the sales proceeds exceed
the loans and costs, the difference will be paid to the growers. In cases
where the proceeds are less than the loan and where the collateralized value
placed on the cotton is greater than the sales proceeds, the grower's note
will be credited with the amount of the collateralized value in an amount
not in excess of the note.
Southern Cotton Co. to Purchase Entire Cotton Crop
of San Joaquin Valley.
From Dallas June 20 the New York "Journal of Commerce" reported the following:
The Southern Cotton Co. of Texas will purchase the entire cotton crop
ofthe San Joaquin Valley, Calif.,regardless ofits size, according to Shokichi
Oshimo, managing partner of the company. Last year this firm bought
80% of the Valley crop, which amounted to 80,000 bales. The crop this
year is expected to total 150,000 bales and to cost the firm some $10,000,000.
The company will export 100,000 bales to Japan, according to Mr. Oshimo,
who recently returned from his native land. This year America will ship
100,000 bales more to Japan than it did last year, or approximately 1,500,000 bales.
Domestic Cotton Mill Activity Highest in Four Years.
Domestic cotton mill activity is still tending upward and
is now at the highest level in four years, according to the
New York Cotton Exchange Service. "During the first
part of June," says the Exchange Service, "cotton mills ran
at about 116, average rate in 1922-1927 equals 100, as against
109 in May,58 in June last year, 83 two years ago, 77 three
years ago and 110 four years ago." The Exchange Service
also said under date of June 19:
The current rate of cotton mill activity is twice as large as a year ago,
and is the highest since May 1929 when business activity reached its peak
Just prior to the beginning of the depression. The rate of increase in cotton
mill activity since the bank holiday has been slightly less than that in
general manufacturing activity, but it will be remembered that, prior
to the bank holiday, cotton mill activity was relatively high, while general
manufacturing activity was at a low ebb. At the present high rate, mill
activity is on a season consumption basis of about 7.500,000 bales.
Petroleum and Its Products—Crude Prices Mount
Rapidly as Sharp Improvement is Noted in All
Divisions—Sinclair Lauds Production Code—Minimum Price May be Set at $1 or More.
Strong improvement was felt throughout the petroleum
industry this week as prices mounted consistently throughout
Texas and the Mid-continent area. Settlement to some
extent of the over-production problem which has been the
stumbling-block to higher prices has already been achieved,
prior to the actual adoption and enforcement of the industry's
code, as prepared in conformity to the Industrial Recovery
Act.
The Code of Fair Competition for the industry, as approved and adopted with the almost unanimous support of
representatives of the producers in the United States establishes the industry in a position more favorable than at any
time in its history. All factors which have served to undermine the successful and profitable operation of an oil company
have been eliminated, while a minimum price of at least $1
will probably be sought in conformance with the price clause
of the code, which reads: "it is estimated that there are
approximately 300,000 wells in the U. S. known as stripper
wells, producing an aggregate of approximately 500,000 barrels per day, and representing an estimated reserve of several
billion barrels of petroleum. These wells are all on the pump.
Production from them at present prices represents a loss.
If abandonment of these wells is forced, the reserves of oil
which they represent will be lost to the owners and to the
American people. Conservation of the national supply requires the preservation of these reserves and they can only
be preserved by a price which permits their production
without loss." It is pointed out in this regard that the actual
cost of production at many stripper wells in above $1 a
barrel, and for that reason the crude minimum price must
be at or above the dollar mark.
Harry F. Sinclair, Chairman of the executive committee
of Consolidated Oil Corp., holds that the adoption of the
production code will enable the $12,000,000,000 oil industry
to make "a large contribution to industrial recovery." The
oil leader adds that "the production code is designed to be a
new Magna Charta. It has plenty of teeth in it—more than
the hastily written press summaries would indicate. Production in excess of reasonable market demand, or purchase
of such production is declared to be in violation of the act.
Drilling is made subject to permits to be issued under the
President's authority. The need for establishing fair prices
is squarely faced in provisions which declare that the sale
of crude oil below cost of production is contrary to the policy
of the Recovery Act and in many instances is unfarir com-
June 24 1933
petition. The President is requested to establish minimum
prices in various producing areas and also to fix maximum
prices in order to protect consumers. To pay a secret price
is unfair competition and a villation of the code.
"Overproduction, excessive withdrawals from storage and
many other provisions are included, all with the purpose of
putting the industry on a stable basis, eliminating `hot' oil
and stopping the cut-throat competition that has brought
the industry into a deplorable state."
Mr. Sinclair called particular attention to the resolution
adopted by the producers at the conclusion of their meeting
in Chicago, in which they state: "It is the sense of this
meeting that price-cutting and other activities now exist
in the petroleum industry which make it essential to license
the business of producing, transportation, refining and
marketing petroleum and its products. In order to make
this code effective and to effectuate the policy of title 1 of
the National Industrial Recovery Act we, therefore, request
that the President call a hearing upon such public notice
thereof as he shall specify, in order to determine whether or
not it be essential to license the above-named subdivisions
of the petroleum industry, in order to make effective this
code and to effectuate the policy of title 1 of the National
Industrial Recovery Act,and we further request that such
hearing be held at the same time and the same place as the
hearing on this code."
Mr. Sinclair emphasized the point that "this declaration
means, in plain words, that the oil industry is not going to
take any chance of code violation, but asks the President to
start it out on the `new deal' with a licensing system that says
in effect, 'Obey the rules or go out of business.' As one of
the committee that formulated the rough draft which, after
days of discussion, changes and additions, became the Production Code, approved by the representatives of major and
smaller companies representing every oil purchasing section
of the country, I am of the opinion that there is no more
important provision in the code than the licensing feature.
It is to be hoped that it will receive the President's sanction
along with other provisions."
Oil marketing and refining associations and representatives
opened their meeting in Chicago Thursday of this week, to
follow the lead of the producers in formulating a code with
`teeth'in it. C.E. Arnott,chairman of the board of SoconyVacuum Corp., was elected chairman and Louis Collins,
independent marketer of Nashville, Tenn., secretary.
On Wednesday Governor Miriam A. Ferguson of Texas
vetoed two measures which would exert farther State control over the oil industry. One was planned to place oil
pipe lines under the 'intangible assets' tax law, while the
other provided punishment for violations of the proration
or other conservation orders of the Railroad Commission.
The Governor sharply criticized the Legislature for failing
to adopt measures she had advocated for levying a tax upon
intangible values of all corporations not paying a gross production, and for providing only a tax on intangible values of
oil pipe lines. "By the increased tax which we have placed
upon the oil business in the Daniels bill, the oil industry will
pay more than one-half of all taxes levied by the State government. Therefore, if this bill were approved, it would be so
grossly unfair and inequitable that the courts would promptly
declare it unconstitutional." The Governor vetoed the second bill as she considered it a duplication of House Bill 844.
Increases in allowables in Oklahoma were granted by the
Corporation Commission this week. 30,000 barrels more
daily is permitted from the Greater Seminole region, and 44,000 barrels from the Wilcox zone of the Oklahoma City field.
The increase was granted on petition of the Carter Oil Co.,
subsidiary of Standard of New Jersey, which based its application on increased market demand.
Oil brokers who yesterday were exerting themselves to
locate cargoes of East Texas crude found producers asking
from 60c. to 70c. a barrel, despite the fact that prices were
advanced in the last few days to 500. Texas Panhandle
prices are now uniform, due to the action of Sinclair-Prarie
Oil Marketing Co., Texas Co., and Magnolia in meeting
the slightly higher schedule of Humble Oil & Refining,
posted June 19. Pennsylvania prices have also been advanced.
The many advances which have been posted during the
past week are considered by informed factors in the local
territory to be but the fore-runners of advances which will
carry crude up to the $1 mark even before the President
acts on the Code suggestion that such a price be established
as the minimum.
Volume 136
Financial Chronicle
Price changes follow:
4363
Important price changes follow:
and Indiana,
June 17-Standard Oil Companies of New York,New Jersey
June 17-In addition to meeting advance of Sinclair-Prairie in midadvance gasoline lc. per gallon.
continent, East Texas and Panhandle, Texas, the Magnolia Petroleum Co.,
gallon.
June 17-Standard of Ohio advances gasoline 31c. per
subsidiary of Socony-Vacuum Corp., also advances West Texas crude 10c.
tank car gasoline
June 19-Hartol Products Co. posts ;ie. advance in
a barrel, new price 30c.; Darst Creek 12c. and Mirando 10c., new price
prices.
on both being 35c.; Luling and Corsicana heavy 10c., to 30c. a barrel:
lead of Magnolia
June 20-All leading marketers in Oklahoma follow
Lytton Springs 20c. advance, new price 45c.
total rise to
Petroleum Co. and post further gasoline advances, bringing
June 17-Continental Oil Co. meets Sinclair-Prairie advance.
gallon.
a
13c.
Elk
crudes.
Montana
and
Wyoming
June 17-Ohio Oil Co. advances
wagon and service
June 20-Standard Oil Co.of Louisiana advances tank
Basin and Grass Creek light crudes are increased 27c. to new price of 63c.;
and Tennessee.
station gasoline prices %c. a gallon in Louisiana. Arkansas
Big Muddy 20c., to 45c.; Rock Creek 6c., to 52c.; Sunburst 150., to new
in metropolitan
June 22-All majors in Philadelphia post 2c. cash discount
price of 80c.
area.
June 17-South Penn Oil Co.advances Corning grade crude 10c. a barrel,
price for tank car
June 26-Standard Oil Co. of New York will post 53(c.
new price 60c.
gasoline.
June 17-All grades of Pennsylvania crude advanced 10c. a barrel with
Included.
Gasoline, Service Station, Tax
$.135
exception of that in Buckeye Pipe Line Co. lines, which was advanced 7c.
New Orleans
41.18
$ 175 Cleveland
New York
36
18)j Philadelphia
New prices: Bradford-Allegheny crude $1.47 a barrel; Pennsylvania grade
.19X Denver
Atlanta
Francisco:
San
12
lines
Eureka
in
$1.17;
Co.
Detroit
lines
Line
Pipe
193
in South West Pennsylvania
Baltimore
144
grade
Third
.175
175 Houston
Boston
$1.12; in Buckeye lines, 97c.
Above 65 octane-- .185
.20
.182 Jacksonville
Buffalo
.219
June 17-Ohio Oil Co. advances central western crudes 20c. a barrel.
Premium
14
135 Kansas City
Chicago
145
St. Louis
Minneapolis13
New prices: Illinois and Princeton 67c.; Lima 75c.; Indiana 45c.; Western
• .18
Cincinnati
Kentucky 62c,
*Less 2 cents cash discount.
Refinery.
June 19-East Texas Refining Co. meets price of 50c. a barrel for East
Kerosene,41-43 Water White, Tank Car, F.O.B.
4 ...03
.034
$.0234-.03% I New Orleans,ex._0_-.6
Texas crude.
Chicago
New YorkTulsa
.044(-.06
June 20-Humble Oil & Refining Posts East Texas at 50c. flat. Other
(Bayonne) _S.04X-.05X 1 Los Ang.,ex__
.03
to
gravity
Texas
the
restored
being
North
light crudes in Texas were topped at 52c.,
Fuel Oil, F.O.B. Refinery or Terminal.
basis; Gray County posted from 34c. to 36c.; Carson County 29c. to 41c.;
6 .65
Gulf Coast C
California 27 plus D
West Texas and New Mexico crudes 30c. flat; Refuglo 45c.; Mirando 40c.;
N.Y.(Bayonne)5.75-1.00 Chicago 18-22 D .42I4-.50
$ .75
Bunker C
Pettus 55c.; Darst Creek and Salt Flat 40c.; Conroe crude 35 to 35.9 gravity
.70
C
Philadelphia
.60
1.65 New Orleans C
Diesel 28-30 D_
advanced to 59e. with 2c. advance on each degree, with 40 gravity topped
or Terminal.
Refinery
F.O.B.
Oil,
Gas
at 69c.
5.01%
I ChicagoN.Y.(Bayonne)June 20-Gulf 011 Corp. meets new price lists in mid-continent and Texas
$ 0136 I Thin
28 plus 0 0_8.035,1-.04 i 32-36 G 0
fields.
Car Lots. F.O.B. Refinery.
U. S. Gasoline, Motor (Above 65 Octane), Tank
June 20-Effective as of June 19, 7 a. m., Standard Oil Co. of Louisiana
$.05-.0534
Chicago
N. Y.(Bayonne)N. Y.(Bayonne)
posts new crude prices in Louisiana and Arkansas as follows: Caddo, below
New Orleans,ex.. .04-.0434
Pet.S.0525
Eastern
Shell
Standard Oil, N.J.04,043'4
29 gravity 26c.; 40 and above, 50c. Homer, below 29 gravity 32c.; 40 and
Arkansas
U. 13-$.0525 New YorkMotor,
05-.07
Colonial-Beacon- .0540 California
above, 56c. Haynesville, below 29 gravity, 29c.; 40 and above, 53c.
Stand. Oil, N. Y. .0540
07
,
0434
exAngeles.
Los
0515
z Texas
Sabine and De Soto, below 29 gravity, Mc.; 40 and above, 59c. Eldorado,
Tide Water 011 Co .05
05-.053(
0525 Gulf ports
Gulf
.0534
(Cal.)
OU
below
Richfield
below 29 gravity, 37c.; 40 and above, 61c. Sarepta and Carterville.
05-.0534
Tulsa
0525
011
Republic
Warner-Quin. Co- .0534
.0534
Pennsylvania-29 gravity, 35c.; 40 and above, 59c. All with differential of 2c. per degree.
Former price for all was flat basis of 25c, per barrel. Smackover crude,
Richfield "Golden." a "Fire Chlei." 5.0540.
formerly 20c. a barrel, is now priced at 30c.
June 21-Ashland Refining Co. advances eastern Kentucky crude price
Oklahoma Supreme Court Delays Petition for Increased
to 65c. a barrel, an increase of 15c. and the first price advance in this
Oil Output.
field in several years.
June 21-Sinclair-Prairie Oil Marketing Co. meets Humble's prices for
of the State of Oklahoma on June 12
Court
Supreme
The
crude in Texas Panhandle.
relief to the Sterling Refining and
temporary
give
June 21-In meeting advances of other companies, Shell Petroleum also
refused to
posted the new field in Polk County, Texas, at flat price of 50c.
companies, and instead requested them
Production
Refiners
June 22-Texas Co. meets Humble Oil's postings in Gray. Carson and
addition,
to file an amended petition within three days. In
Hutchinson Counties, Texas Panhandle, and in Conroe and Darst fields,
companies
The
briefs.
of
filing
postings.
earlier
Company's
for
Texas
days
which were slightly higher than the
the Court allowed 15
from
Prices of Typical Crudes per Barrel at Wells.
had sought a permit to produce 5,000 barrels of oil daily
shown.)
not
are
(All gravities where A. P. I. degrees
hearing
immediate
an
asked
also
had
and
wells,
the refiners'
$ .52
$1.47 Eldorado, Ark., 40
Bradford, Pa
.52 by the State Corporation Commission on a petition to in.60 Rusk. Tex.. 40 and over
Corning, Pa
.50
.67 Salt Creek, Wyo.,40 and over
Illinois
.52
Darst Creek
Western Kentucky
crease allowable production, which had been set at 400
.48
Mid-Cont., Okla.,40 and above__ .52-.60 Midland District, Mich
barrels daily. Further details of the petition, and the Court's
.80
.52 Sunburst, Mont
Hutchinson,Tex.,40 and over
.52 Santa Fe Springs, Calif.,40and over .75
Spindietop, Tex., 40 and over
as given in the "Oklahoman" on June 13, follow:
decision,
.76
.52 Huntington, Calif., 26
Winkler, Tex
the new proration
1.75
.30 Petrolia, Canada
Smackover, Ark., 24 and over
Petition of the companies charges that house bill 481,
due process of law,
law, is unconstitutional, that they have been denied
REFINED PRODUCTS-GASOLINE PRICES ON UPWARD TREND
producers to refuse to sell
and that an agreement had been made between
AS FIRM UNDERTONE SPREADS THROUGHOUT INDUSTRY
is in restraint of trade.
oil at the present price and that this agreement
appeal.
-STANDSHORTLY
OILS
EXPECTED
-ADVANCE IN FUEL
Sid White represented the two companies in their
attorney for a
ARD OF NEW YORK TO ADVANCE TANK CAR PRICE
Edwin Dabney, proration attorney, and D. A. Riahardson,
group of operators, represented the Commission. It was their argument
MONDAY.
the petitioners did have due process, that to permit them to run the
Gasoline prices have advanced in nearly every section that
increased allowable would be violation of the ratable-taking clause, and
of the country, reflecting the upswing which is being felt that the whole scheme of curtailment would be upset.
White first took the case to Federal District Court nearly a month ago,
throughout all divisions of the petroleum industry. The
the case was dismissed and petitioners told to seek relief before the
but
higher prices for crude, in many cases representing more than Corporation
Commission. Last week, White asked for an immediate hear100% increases, coupled with the drop in production, has ing before the Commission, but was advised he might get hearing in ten
industry up to a sharp realization of its low price days by proper notice; instead, he went to Supreme Court.
brought the
status. The bulk gasoline market in Chicago this week
registered a price advance of 100%, with stocks hard to
obtain even at this higher price.
The Mc. additional Federal tax has been added to service
station prices, and in many localities an advance of lc. or
more has been posted simultaneously. Led 1?y the lc. advance posted June 17 by the Standard Companies of New
York, New Jersey and Indiana, and a Yo.advance by Standard of Ohio, the trade in general marked up gasoline service
station prices in accordance with the action of these leaders.
Important announcement was made yesterday by Standard
of New York,to the effect that on Monday,June 26, it would
/0, tank car gasoline price recently ported by
meet the 53
Hartol Products here. Unofficial report was that this advance would be followed immediately by an additional 3i.e.
advance, and then by a Mc. advance in service station prices.
It is generally believed here that this action of Standard
will lead the way to a revision by all companies, with the
Wic. price established for U. S. Motor above 62 octane.
Fuel oil prices are tending higher, and a 10c. advance is
expected in the local market, possibly to-day, or early next
week. Kerosene is quiet, but prices will undoubtedly be
carried higher with the general list.
Gasoline in the Chicago wholesale market this week advanced from 2c. a gallon for the low octane, or third grade,
to 4 to 43.4c., described as the most rapid and startling recovery in many years. Stocks are not freely available even
at these higher prices.
Crude Oil Output Off-Motor Fuel Inventories Declined
1,068,000 Barrels During Week Ended June 17 1933.
The American Petroleum Institute estimates that the daily
average gross crude oil production for the week ended June 17
1933 was 2,611,850 barrels, compared with 2,709,350 barrels
per day during the preceding week, a daily average of
2,657,850 barrels for the four weeks ended June 17 and an
average daily output of 2,197,550 barrels for the week ended
June 18 1932.
Stocks of motor fuel oil at all points declined 1,068,000
barrels, or from 54,647,000 barrels to 53,579,000 barrels
during the week ended June 17 1933, as compared with a
decrease of 1,500,000 barrels during the previous week.
Reports received for the week ended June 17 1933 from
refining companies controlling 91.6% of the 3,856,300 barrel
estimated daily potential refining capacity of the United
States, indicate that 2,344,000 barrels of crude oil daily
were run to the stills operated by those companies, and that
they had in storage at refineries at the end of the seek,
30,300,000 barrels of gasoline and 125,468,000 barrels of gas
and fuel oil. Gasoline at bulk terminals in transit and in
pipe lines, amounted to 19,784,000 barrels. Cracked gasoline
production by companies owning 95.4% of the potential
charging capacity of all cracking units, averaged 476,000
barrels daily during the week.
The report for the week ended June 17 1933 follows in
detail:
Financial Chronicle
4364
DAILY AVERAGE PRODUCTION OF CRUDE OIL.
(Figures in Barrels.)
Week
Ended
June 17
Weak
Ended
June 10
1932.
.
g2;c3.2;r1t9f
454,950
106,450
42,950
46.900
18,000
158,700
58,450
836.800
65,200
50,100
25,300
29,950
117,300
41,050
91,650
15,700
30,450
5,600
2,550
36,000
475,300
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1933.
1933.
O.v.
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Ov,0
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'888888888888888888888
Week
Ended
June 18
7.18Itti
V.
Oklahoma
Kansas
Panhandle Texas
North Texas
West central Texas
West Texas
East central Texas
East Texas
Conroe
Southwest Texas
North Louisiana
Arkansas
Coastal Texas (not Including Conroe).
Coastal Louisiana
Eastern (not including Michigan)
Michigan
Wyoming
Montana
Colorado
New Mexico
California
y
-4
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1933.
Average
4 Weeks
Ended
June 17
453,400
96,550
53,050
50,800
24,650
179,350
58,000
331,050
700
55,100
29,550
34,050
112,850
31,850
107,550
17,150
35,300
6,700
3,000
36,200
480,700
Total
2 611.550 2.709.350 2.1157_850 2.197.550
Note.-The figures indicated above do not include any estimate of any oil which
might have been surreptitiously produced.
CRUDE RUNS TO STILLS, MOTOR FUEL STOCKS AND GAS AND FUEL
OIL STOCKS, WEEK ENDED JUNE 17 1933.
(Figures in barrels of 42 gallons each.)
Daily Refining Capacity
of Plants.
District.
Reporting.
Potential
Rate.
Total.
East coast
644,700 638,700
Appalachian_ _ 144,700 135,000
Ind., III., Ky
434,900 424,000
Okla., Kan., Mo. 459.300 390,000
Inland Texas_ 315,300 177.700
Texas Gulf
555,000 542,000
Louisiana Gulf_ 146,000 142,000
North La.-Ark.89,300
79,000
Rocky Mountain 152,000 138,000
California
915,100 866,100
%
Crude Runs
to Stills.
aMotsr
%
Daily OperAverage. Wed.
99.1 489,000
95.0
91,000
97.5 338,000
84.9 244,000
56.4
95,000
97.7 445,000
97.3 113,000
88.5
48,000
90.8
43,000
94.6 438,000
Fuel
Stocks.
Gas and
Fuel Oil
Stocks.
76.6 15,708,000 7,176,000
67.4 1,982,111
862,000
79.7 7,516,111
3.978,000
62.6 4,595,000 3,331,000
53.5 1,489,000 2,179,000
82.1 5,631,000 6,239,000
79.6 1,650,000 1,900,000
60.8
247,000
580,000
31.2 1,159,000
686,000
50.6 13,602,000 98,537,000
Totals week:
June 17 1933 3,856,300 3,532,500 91.6 2,344,000 66.4 c53579,000
June 10 1933_ _ 3.858.300 3 532 MU) AI 452 2A2 ens ea a an RAI nnn 125,468,000
19R amnnn
a Below are set out estimates of total motor fuel stocks on U. B. Bureau
basis for week of June 17 compared with certain June 1932 Bureau figures: of Mines
A.P. L. estimate of B. of M. basis, week June 17 1933.b
66,400,000 barrels
U. S. B. of M. motor fuel stocks, June 1 1932
69,135.000 barrels
U. S. B. of M. motor fuel stocks, June 30 1932
81,668,000 barrels
b Estimated to permit comparison with A. P. I. Economics report,
which is on
Bureau of Mines basis.
c Includes 30,300,000 barrels at refineries, 19,784,000 bulk terminals, In
transit
and pipe lines. and 3.495,000 barrels of other motor fuel stocks.
Crude Oil Prices in Texas and Mid-continent Fields
Advanced.
Crude oil prices in the Texas andlmid-continent fields
have been advanced considerably since June 15. On that
day the Tide Water Oil Co. put into effect a 50% increase in
the price paid for Conroe crude, making the new posted
price 45 cents a barrel. At the same time the Danciger Oil
& Refining Co. posted an increased of 10 cents a barrel for
crude in the East Texas area, making the new quotation
35 cents a barrel. As noted in our issue of June 17, p. 4168,
the Bell Oil & Gas Co. posted a price of 50 cents a barrel in
North Texas.
Effective June 16, a small purchaser, the Olney Texas Oil
& Refining Co. posted a price of 46 to 50 cents for 38 to 40
gravity oil, in the North Texas division.
Increases in the price of crude oil, ranging from- 3•to 32
cents a barrel, was announced on June 16 by seven companies
to become effective June 17. The advances extended from
the Gulf Coast section to the mid-continent fields of Oklahoma and Kansas, with hardly a field omitted. In reporting
the increases, the Houston "Post" of June 17 said:
The gulf coast sector came in for the biggest boost when the SinclairPrairie 011 Marketing Co. posted a new schedule. effective June 17, putting
into effect the gravity scale for purchases, whereas they formerly paid a
flat price of 30 cents a barrel.
Under the new scale the Sinclair-Prairie will pay 32 cents a barrel for
below 20 gravity coastal oil, with a 2-cent spread, reaching the peak at 62
cents a barrel for 34 gravity and above.
For Gray county crude the Sinclair-Prairie posted 30 cents a barrel for
below 36 gravity oil, with a 2-cent differential upward, reaching its peak at
40 cents for 40 and above gravity. The former price was 20 cents a barrel
flat.
Carson and Hutchinson counties were posted at 20 cents a barrel for
below 36 gravity with a 2-cent spread upward to 30 cents a barrel for 40
and above. Former price was 18 cents a barrel flat.
For Oklahoma. Kansas, North Texas and North Central Texas crudes the
Sinclair-Prairie Oil Marketing Co. posted 28 cents a barrel for below 29
gravity with a 2-cent spread upward, reaching its apex at 52 cents a barrel
for 40 degree gravity and above oil.
Under the new schedule posted by the Sinclair-Prairie and the East
Texas Refining Co.,the posted price for East Texas crude was made 50 cents
a barrel, June 17, which is an increase of 25 cents a barrel over the former
price.
The mid-continent top of 52 cents per barrel was met by the White Eagle
011 Co., Barnsdall 011 Co., Skelly 011 Co. and the National Refinery Co.,
which is largest purchaser of stripper well oil in several Oklahoma counties.
Under the new postings for Oklahoma and Kansas the minimum price
will be 28 cents a barrel, or 3 cents per barrel higher than the previous flat
price of 25 cents per barrel.
June 24 1933
The upward swing of crude oil prices in the mid-continent
area continued on June 17 with a number of the major companies, as well as independent companies posting new schedules, the Houston "Post" of June 18 noted, continuing:
Latest to post new prices, all of which were effective on June 17 were:
Magnolia Petroleum Co., Stanolind Crude Oil Purchasing Co., Continental
011 Co., while the Derby 011 Co. of Wichita, Dickey Petroleum Co., El
Dorado Refining Co., Golden Rule Co.,and the Globe 011 Co. also had met
the price increase.
In its new postings the Magnolia Co. met the price scale posted June 16
by the Sinclair-Prairie Oil Marketing Co., both in the mid-continent and the
East Texas fields, while the Stanolind Crude 011 Purchasing Co. and the
Continental all posted prices meeting the Sinclair-Prairie schedule.
Under the new schedule East Texas crude was boosted to 50 cents a barrel, while a top of 52 cents a barrel was put into effect in the mid-continent
area.
The increase in crude oil prices in the mid-continent area
became general on June 19 when a number of additional
companies posted new schedules, which for the greater part
met those previously posted. The Houston "Post" of June 20
noted that the principal change in this immediate section
was the posting of a price of 65 cents per barrel flat for crude
purchased in the Tomball area of Harris County by the
Humble Oil & Refining Co., and a top price, posted by the
same company, of 69 cents a barrel for the Conroe field of
Montgomery County. The "Post" continued:
New schedules were posted June 19 by the Humble Co., Gulf Pipe Line
Co., Texas Co. and Shell Petroleum Corp.; all announced through their
Houston offices, Arkansas Fuel 011 Co., Standard Oil Co. of L01111118119,
Carter Oil Co., Empire 011 and Gas Co., Pure Oil Co., Atlantic Oil Co.
and a number of other smaller companies.
For North Texas the Humble Co. reverted to the gravity basis starting
at 28 cents a barrel for below 29 gravity with a 2-cent spread upward to
52 cents a barrel for 40 and above. East Texas was posted at 50 cents a
barrel flat. while Refuglo was posted at 45 cents flat, while Mirando, Salt
Flat and Darst Creek were posted at 40 cents a barrel flat, and Pettus at
55 cents a barrel flat.
The Shell Petroleum Corp. announced that, effective June 20, it will
pay the following posted prices on 42-gallon barrels for crude oil:
East Texas, 50 cents: Livingston area, Polk county, 50 cents; Howard,
Glasscock. Winkler, Upton, Crane and Pecos (except Yates shallow pool),
30 cents; Pecos county Yates shallow pool, 25 cents; Lee county, New Mexico, 30 cents; Salt Flat, Texas, 30 cents.
The Atlas Pipe Line Co. met the increase in price of 50
cents a barrel for East Texas production. The Southern
Oil and Refining Co. followed suit, according to Associated
Press dispatches.
The Tide Water Oil Co., the first major purchaser to
advance Conroe crude oil prices to 45 cents flat from 30 cents,
has met the schedule of other companies ranging from 59 to
64 cents a barrel, we learn from Houston advices to the
"Wall Street Journal" of June 21. Tide Water's new prices
are retroactive to June 19. In its issue of June 22, the
"Journal" said:
Texas Co. has met the Humble 011 & Refining Co.'s postings on June 19
on crude oil in Gray, Carson and Hutchinson counties, Texas Panhandle,
and In Conroe and Darst fields. Thexe are slightly higher than Texas Co.'s
earlier postings.
Allowable Oil Output in Three Oklahoma Areas is
Increased as Result of Better Demand.
The Oklahoma Corporation Commission on June 20 voted
2 to 1 to increase the oil allowable of three flush areas in
Oklahoma 77,091 barrels daily for the remainder of June.
The increase was permitted, it was said, as a result of improved demand caused by higher crude prices. Details of
the changes, as given in Tulsa advices to the New York
"Journal of Commerce," follow:
The Wilcox sand zone of the Oklahoma City field was increased 43,791
barrels to 150,000 barrels daily, retroactive to June 1.
Class B areas in Greater Seminole were increased 30,300 barrels daily to
140,000 barrels for the last ten days of this month, and the Tatums field
of Carter County was increased 3,000 barrels daily to 8,600 barrels daily
for the last ten days of the month.
Chicago Petroleum Conference Votes to Allow President to Fix Minimum and Maximum Prices-Independents Agree On Allotment Plan to Limit Output.
A proposal permitting the President of the United States
to fix maximum and minimum petroleum prices was adopted
by representatives of more than 40 crude oil producing companies which supply 95% of the country's output, and which
met at Chicago on June 17. The proposal was included in a
code drafted by independent and large oil producers under
the provisions of the National Industrial Recovery Act. On
the same day, delegates representing 33 independent producers' associations and the American Petroleum Institute,
also meeting at Chicago, agreed upon an allotment plan for
the industry under which production would be limited and
drilling of new wells would be prohibited except with permission from the President.
Further details of the code, which will be submitted to
directors of the 37 producing organizations for final ratification, were described as follows In Chicago advices to the
"Wall Street Journal" on June 20:
Volume
136
Financial Chronicle
Crude prices well above those in effect at present are practically assured
by the clause on price, which reads as follows: "It is estimated that there
are approximately 300,000 wells in the United States known as stripper
wells, producing an aggregate of approximately 500,000 barrels per day,
and representing an estimated reserve of several billion barrels of petroleum.
These wells are all on the pump. Production from them at present prices
represents a loss. If abandonment of these wells is forced, the reserves of
oil which they represent will be lost to the owners and to the American
people. Conservation of the national supply requires the preservation of
these reserves and they can only be preserved by a price which permits
their production without loss."
A survey carried on in 1931 revealed that the average weighted cost of
production of domestic crude at the well for the years 1927 to 1930, inclusive, was above $1 a barrel. While the cost of production has naturally
been reduced in the last three years, leaders in the industry state that cost
of production for many stripper wells is still well above the dollar mark,
so that to assure profitable operations for all a minimum price should be
set above $1 a barrel.
Oil Industry Code Seen as Doom of "Wildcat" Well
Operators.
The code of practices which has been formulated for the
petroleum industry means the virtual end of "wildcat" oil
operations, in the opinion of leaders of the industry In
Denver, according to a dispatch from that city to the New
York "Herald Tribune" on June 19. The article continued:
Under the new plans for the industry, which will be mandatory when
approved by President Roosevelt, and his agent, those who desire to drill a
"wildcat" well first must get a permit from the oil industries' own organization. In addition, the usual State permit must be obtained if the well is
on State land, or a Federal permit must be obtained if the well is on Government land. Even if issued, the person receiving the permit would have
to agree to limit operations in the future.
It was pointed out that curtailment in new oil production would enable
the coal industry to come back. Because of the abundance of crude oil in
late years it became possible to sell oil in competition with low-grade coal
for use as fuel.
H. F. Sinclair Sees Oil Production Code
in Industrial Revival—Terms It
a Vital
"New
Factor
Magna
Charta."
The production code now under consideration by the oil
industry will result in an important contribution to industrial recovery, according to a statement by Harry F. Sinclair,
Chairman of the Executive Committee of Consolidated Oil
Corporation, on June 20. Mr. Sinclair stressed the significance of the licensing feature, and then continued:
The production code is designed to be a new Magna Charta. It has plenty
of teeth in it—more than the hastily written press summaries would indicate. Production in excess of reasonable market demand, or purchase of
such production is declared to be in violation of the act. Drilling is made
• subject to permits to be issued under the President's authority.
The need for establishing fair prices is squarely faced in provisions which
declare that the sale of crude oil below cost of production is contrary to
the policy of the Recovery Act and in many instances is unfair competition.
The President is requested to establish minimum prices in various producing areas and also to fix maxim= prices in order to protect consumers.
To pay a secret price is unfair competition and a violation of the code.
Overproduction, excessive withdrawals from storage and many other provisions are included, all with the purpose of putting the industry on a stable
basis, eliminating "hot" oil and stopping the cut-throat competition that
has brought the industry into a deplorable state.
Gasoline Prices Advanced—One-Half Cent of the Increases Applied th Cover Federal Tax Imposed by
National Industrial Recovery Act.
The Standard Oil Co. of New York, Inc., a subsidiary of
the Socony-Vacuum Corporation, has increased its prices of
gasoline 1 cent a gallon throughout its territory which comprises New York and New England. One-half of the increase,
or M cent, covers the increase in the Federal gasoline tax
imposed by the National Industrial Recovery Act which
became effective June 17. The remainder of the advance
became effective June 19. The Standard Oil Co. of New
Jersey also advanced service station and tank wagon prices
of gasoline M cent a gallon throughout its territory effective
June 19. The company also passed the M cent Federal tax
on to the purchaser. From the Chicago "Tribune" of
June 17 we take the following:
Two increases of M cent a gallon in gasoline prices were announced
June 16 by the Standard Oil Co. of Indiana.
The first increase became effective June 16 and was made because of
the advance in the refinery market. The other 3 cent increase becomes
effective June 17 and is made to cover the increase in the Federal tax
which is boosted to 1% cents a gallon June 17 as a result of the signing
of the Industrial Recovery Act June 16 by the President. The Federal
tax was formerly 1 cent a gallon.
The Indiana Standard Co. again increased its prices
throughout its territory 1 cent a gallon on June 20.
Good Sales Volume in Lead and Zinc—Copper Firm—
Tin and Silver Irregular.
"Metal and Mineral Markets" for June 22 reports that
the attention of producers of non-ferrous metals was centered
in the Industrial Recovery Act. The immediate objectives
of the measure appear to be well understood, and steps are
being taken to adjust wage levels and increase employment.
To comply with the Administration's program even higher
4365
prices will have to be obtained by producers, and, under the
circumstances, the markets, taken as a group, are held to be
be in a strong position. Lead and zinc again sold in good
volume, though most of the business was put through in
the last three days. Copper was very quiet early in the
period, but buying interest improved somewhat in the second
half of the week. Tin was irregular, chiefly because of uncertainty over the exchange situation. Statistically, the
market for tin is said to be making progress. Silver met with
a setback yesterday on disappointment over the reception
accorded to the American proposals at the London conference. The same publication says:
Copper Firm at Sc.
Although the total sales of domestic copper were comparatively small
in volume last week, the price of the metal was firmly held by first-hands at
the Sc.. delivered Connecticut, level. Shipments on the business booked
extended into the fourth quarter. Inquiry was said to have improved
somewhat yesterday, and, with fabricators reporting a further material
improvement in the outlet for their products, the immediate prospects
for copper were held to be good. According to general opinion in the trade,
a sizeable reduction in metal stocks will probably be effected during the
current month. Much consideration is apparently being given to the provisions of the Industrial Recovery Act. Several interests have already Increased wages or provided additional employment by expanding their
operations.
Demand in the foreign market was modest early in the week, the lack of
interest in the metal being attributed largely to the reticence of consumers to
place orders at the recently advanced price level. Following a moderate
change for the better on Monday, trading improved substantially the next
day, the revived interest being accompanied by an upward movement In
prices. During the seven-day period prices ranged from 7.35c. to 7.80c..
c.i.f.
World's production of copper for the years 1931 and 1932. based so far
as possible on blister output of countries wherein the ore originated, with
exclusion of copper derived from scrap,according to the American Bureau of
Metal Statistics' year book, in short tons. follows:
1932
1931
521,631 255,509
United States
37.588
58,124
Mexico
145.632 125.370
Canada
5,941
14.721
Cuba
3.000
1,900
Bolivia
248.014 114.175
Chile
23.610
48.828
Peru
200
600
Venezuela
3,566
Austria
1,102
1,102
France
30.864
31.967
Germany
33.244
26,842
Yugoslavia
13.702
9,858
Norway
35.300
34.278
Russia
32,638
40,015
Spain and Portugal
3.632
2.238
Sweden
77.873
84.225
Japan
10.500
11,000
Asia (a)
16,510
15.096
Australasia
169.332 141.962
Africa
10,000
10,000
Other countries (b)
1,481.969 972,720
Totals
(a) Other than Japan. (b) Includes some European production.
Lead Buying Continues.
In view of the recent heavy buying of lead, producers were prepared for a
quiet trading period, and little was expected of the market during the last
week. However, the sales for the week exceeded 4,200 tons, a total well
above the average. The continued buying of lead was regarded as indicative of the confidence that buyers possess as to the current needs ofindustry.
Shipments to consumers during May totaled 28,197 tons, against 25,378
tons in April and 21,950 tons in March. The fact that stocks of refined
lead did not show the expected reduction during the month of May apparently had no influence on the market, partly because of the additional fact that
all of the excess output came from secondary sources. (For May statistics
see page 3.)
The market held at 4.20c., New York,the contract basis of the American
Smelting Sc Refining Company, and 4.05c.. St. Louis. The undertone was
firm in all directions, and higher prices might have resulted before the close
of the week had London moved upward. Last week the buying was again
fairly general in character. Corroders find encouragement in the improved
demand for lead pigments and batteries. Cable makers are taking more
lead than earlier in the year.
Receipts of lead in ore by United States smelters during March and
April, according to the American Bureau of Metal Statistics. in tons, were
as follows:
April.
March.
17,835
24,037
Domestic ore
223
91
Foreign ore
18.058
24,128
Totals
3,625
3,679
Lead in scrap_a
ore.
with
a Inclusive only of scrap smelted in connection
not
and
96.,
Correction.—London lead, spot, June 14 was £13 38.
£13 135. 9d. as published in the June 15 issue.
Moderate Sales of Zinc.
Demand for zinc was of fair proportions last week, with the price basis
undergoing practically no change from that of the preceding seven-day
period. The market, however, closed firm yesterday, with some talk
prevailing of 4.40c. zinc before the end of the week. Stocks of ore in the
Joplin District were reduced during the calendar week to the lowest level
that has existed in many years: price of ore held steady and unchanged at
$30. Most of the metal sold during the week was for prompt or thirdquarter delivery, producers generally declining to accept any business for
the more forward positions.
Tin Moves with Echange.
With Straits tin commanding an extra premium over other brands, conshowing
more
interest in English refined and Chinese. The
sumers are
market showed some irregularity in prices, largely the result of wide variations in sterling exchange. In the main the market was steady on reports
of continued large consumption in this country and some improvement in
business abroad. Reports to the effect that the tin restriction scheme may
be modified after July 1 made some traders a little nervous. Those who
take a firm view of the situation believe that total stocks of tin may be
reduced as much as 18,000 tons before the end of the year, should consumption hold around present levels.
Chinese 99% tin was quoted as follows: June 15,39.65c.; June 16, 39.30c.
June 17. 39.25c.; June 19, 41c.; June 20. 42c., and June 21, 41.625c.
4366
Financial Chronicle
Steel Output Highest Since April 1931-Operations
Now at 50% of Capacity-Further Rise in Price of
Steel Scrap.
Rising three points from 47% of capacity, steel production
has reached a 50% rate for the first time since April 1931
reports the "Iron Age" of June 22. Operations have advanced
from 35 to 40% at Pittsburgh, from 46 to 50% at Chicago,
from 36 to 48% at Buffalo, from 50 to 55% in the Valleys,
from 23 to 26% in eastern Pennsylvania and from 63 to
67% in the Cleveland-Lorain district. The Wheeling district
remains on an 85% basis, while the Great Lakes plant at
Detroit continues to run at capacity. The "Age" further
goes on to say:
June 24 1933
"Steel" of Cleveland, in its summary of the iron and steel
markets, June 19, stated:
Steelworks operations continue to make good headway with a rise of
another point to 49% last week, and are expected to reach 50% this week.
for the first time since April 1931.
In practically all leading production centers the upward momentum
persists, though at a slower pace than in early June, and in no district is
there a recession. Some of the more important gains for the week are
three points to 79% at Cleveland; four to 45 at Chicago; four to 37 at
Buffalo, and 3X to 28%% in eastern Pennsylvania. Tin plate mill
operations now are 90 to 95%, with all independent mills in the Pittsburgh
district at capacity.
All factors which have more than tripled the steelworks rate since March
continue as vitalizing forces, and with further improvement in early prospect in some industries steelmakers are approaching the third quarter
with more confidence than when they entered the second. July promises
to set aside the traditional summer let-down in steel.
Still further gains are indicated by additional blast furnace resumptiona.
General expectation of price advances in third quarter is leading conA steel works blast furnace has been lighted in the Valleys, and one has been
sumers to specify to the limit of second quarter contracts, which mills
blown in at Chicago, with another scheduled to go in next week. At Pittshave until July 15 to complete. This is accelerating the volume of current
burgh two steel plant stacks will be added to the active list this week, while
business. But lack of definite price policies beyond July make it difa third is scheduled to go in early next month.
ficult for consumers with known requirements to cover for the full period.
With steel buyers increasing their specifications and pressing for shipSome of the leading steelmakers are willing to book new contracts for
ments, mills are beginning to experience difficulty in keeping up with
practically all their products, except sheets, for shipment before Aug. 1,
demand, in some cases falling behind on deliveries. These evidences of
at present prices, with clauses giving them the right to revise in the event
growing market tension, emphasized by the appearance of a scarcity of
of wage or freight increases. A few sheetmakers are offering contracts
skilled labor in certain eastern mills, are reminiscent of conditions which
for July at advances of $3 to $4 a ton, also with protecting features. Some
have been conspicuous by their absence since the '20's.
assurances have been given buyers that a more definite determination
The primary cause of the bulge in demand is the piling up of releases
of prices will be forthcoming this week.
against low-priced second quarter contracts as the June 30 deadline draws
Pressure for steel is becoming more insistent from the automotive and
near. While all of this tonnage will not get into immediate consumption,
miscellaneous manufacturing industries. More material is moving into
speculative buying has been held down both by the tonnage limitations of
Michigan automobile centers than at any time since the spring of 1931.
contracts and the unsatisfactory financial standing of many buyers. In
Automobile foundries. normally 30 days ahead of the assembly line, conthe automobile industry, at least, there has been little protective buying.
tinue at this range. Retail sales are strong, production schedules are
The bulk of the steel placed thus far by the motor car builders has been for
being revised upward, June output will exceed May by a good margin,
immediate requirements and their main concern has been to get deliveries
and July promises to equal June.
on time. To guard against interruptions in their production schedules they
Railroads are nearing the point where they will be able to make heavier
are having much of their steel rushed to their plants by motor truck.
commitments for general repair purposes. Weekly car loadings now are
The persistence of a heavy retail demand for automobiles is a continuing
estimated at 550.000 to 600,000, and some steelmakers figure that at
cause of surprise to the motor car trade itself. June automobile output.
700.000. 75% of class I roads will be in the profit area. Norfolk & Western
according to present indications, will exceed that of May,and the movement
has purchased 10,000 tons of rails; Seaboard Air Line, 11,470 tons.
of steel to the motor car industry promises to continue at the present pace
For the first time in three months the Government is obtaining bids
through most of July.
on post office projects, many to be closed in July. Supplementing the
Steel mills still refrain from quoting for third quarter except with a stipuFederal construction plans, public works programs are shaping up for early
lation protecting them against increased production costs incident to the
action in many cities and States. Structural shape awards for the week
National Industrial Recovery Act. Pending the completion of a code by
increased to 17,230 tons, including 12,000 tons for the Rip Van Winkle
the steel industry and its acceptance at Washington. it is unlikely that
Bridge, Hudson, N. Y.
quarterly contracting will be resumed. Meanwhile prices will probably be
East Texas oil producers are being forced to resort more to pumping.
named from month to month. Mills that put in bids Monday on the New
and large steel tonnages for walking beams, derricks and other equipment
York Central'a third quarter requirements quoted for July shipment only.
are developing in that field. Demand for oil refinery equipment also
The price outlook is not only clouded by the uncertainty of labor costs
is improving, with keener competition for the better grades of gasoline.
but by disturbing evidences of aggressiveness on the part of union organizaTwo freight vessels placed with an Eastern yard will require 6,000 tons
tions. Persistent efforts are being made to unionize coal mines in the
of steel.
Connellsville region despite the express warning of President Roosevelt
Pittsburgh steelworks continue to light blast furnaces; in three weeks
that the new legislation is not intended to "foment discord." However, a
of June, 11 stacks in that district will have resumed. Action has revived
reassuring note is found in one of General Johnson's first official pronouncein scrap, with heavier sales and price advances. The United States Steel
ments. Emphasizing the need of speed in getting industrial codes into
Corp., now operating 15 Great Lakes ore carriers, is to double the number
operation, he makes it plain that their provisions need not be "arrived at by
In July.
collective bargaining."
"Steel's" iron and steel price composite is unchanged this week at $28.75:
The iron and steel industry will probably get a stronger stimulus from the
the finished steel composite remains 345.30, while the scrap figure is up
public works section of the new Act than from the part under the adminis20 cents to $9.66, having advanced 47% in 11 weeks.
tration of the General. Bids will be asked promptly on public road projects
on which $400,000.000 will be spent and there will be early action on the
Steel ingot production continued to move forward in the
Navy's program, which calls for the construction of 32 ships, requiring
past week, the gain amounting to about 1% for the entire
66,400 tons of plates, shapes and bars. Bids from private builders will be
industry, reported the "Wall Street Journal" of June 20.
taken on 17 of these vessels on July 26, while the remaining 15 will be
gotten under way as soon as possible in Government yards. In addition,
This is in sharp contrast with past years, which recorded
contracts will quickly be placed for public building projects on which bids
decreases for like periods. The improvement which started
were taken but on which final action was deferred in March.
about two months ago has been maintained for a much longer
Public work features structural steel awards of the week, which, at 22,8.00
period than was anticipated and promises to continue,
tons, are the largest with one exception since February. Lettings of plate
continued the "Journal," which further stated as follows:
work are also outstanding. totaling 19,700 tons.
For the week ended June 19 the ingot production is placed at about
American mills are figuring on a South American inquiry for 25.000
tons of rails. Europe reports an invasion of American wire products, Par473 % of capacity, in the compilation by Dow, Jones & Co., Inc. This
compares with 46% in the previous week and with 44;4% two weeks ago.
ticularly in Holland.
Independent steel companies are still in the van and are credited with
Scrap manifests a strong undertone throughout the country, with scata rate of 55% for last week, against 53% in the week before and 51% two
tered advances reported in some centres. Heavy melting grade has risen
weeks ago. United States Steel 113 estimated at 38%. compared with
another 25c. a ton at Chicago. and the "Iron Age" composite for melting
37;4% in the preceding week and with 3654% two weeks ago.
scrap has advanced from $9.92 to $9.96 a ton. The pig iron and finished
The following table gives the percentage of production in the corresteel composites are unchanged at $15.01 a ton and 1.892c. a lb.
sponding week for previous years, together with the approximate changes
THE "IRON AGE" COMPOSITE PRICES.
from the week immediately preceding:
Finished Steel,
June 20 1933, 1.892o. a Lb
Based on steel bars, beams, tank plates,
Industry.
U. S. Steel. Independents,
One week ago
1.8920. wire, rails, black pipe and sheets
One month ago
1.8920. These products make 85% of the
1932*
One year ago
1.970c. United States output.
1931
35-4
35 -21i
35 -2
1930
Low.
High.
71-1
66 -2
61 -3
1933
1929
19480. Jan. 3
1.8670. Apr. 18
95 -I
92 -2
99-1
1932
1928
1 977c. Oct. 4
1.9260. Feb. 2
72%- ;i
6911-1
76
1931
1927
2 037c. Jan. 13
1.945o. Dec. 29
74-4
71 -3
68 -2
1930
2.273c. Jan. 7
2.0180. Deo. 9
*Not
available.
1929
2 317c. Apr. 2
2.283c. Oct. 29
1928
22860. Deo. 11
2.2170. July 17
1927
2 4020. Jan. 4
2.2120. Nov. 1
Large Increase Reported in Bituminous Coal and
Pig Iron.
Anthracite Production.
June 20 1933, $15.01 a Gros. Ton.
Based on average of basic iron at Valley
One week ago
According to the U. S. Bureau of Mines, Department of
$15.01 furnace foundry irons at Chicago,
One month ago
14.56 Philadelphia, Buffalo, Valley and BirCommerce, production of soft coal during the week ended
One year ago
mingham.
14.01
June 10 1933 is estimated at 5,435,000 net tons, the highest
High.
Low
1933
$15.01 May 29
$13.56 Jan. 3
figure recorded since the middle of March, and is 1,460,000
1932
14.81 Jan. 5
13.56 Dec. 6
1931
15.90 Jan. 6
15.79 Dec. 15
tons above that for the corresponding period in 1932. Com1930
15.90 Dec. 16
18.21 Jan. 7
1929
18.21 Dec. 17
18.71 May 14
pared with the week ended June 3 1933, when working time
1928
18.59 Nov.27
17.04 July 24
1927
was curtailed by the Memorial Day holiday, there is an
19.71 Jan. 4
17.54 Nov. I
Steel Scrap.
increase of 504,000 tons.
June 20 1933, $9.96 a Gross Ton.
Based on No. 1 heavy melting steel
Anthracite production in Pennsylvania during the week
One week ago
$9.92 quotations at Pittsburgh. Philadelphia
One month ago
9.67 and Chicago.
ended
June 10 1933 is estimated at 735,000 net tons, an
One year ago
8.83
increase of 141,000 tons over the holiday week, and of 47,000
High.
Low.
1933
$9.96 June 20
$6.75 Jan. 3
tons, or 6.8%, over the week of May 27 1933. For the week
1932
6.42 July 5
8.50 Jan. 12
1931
11.33 Jan. 6
7.62 Dec. 29
corresponding
to that for June 10 anthracite output a year
1930
15.00 Feb. 18
11.25 Dec. 9
1929
17.58 Jan. 29
14.08 Dec. 3
ago amounted to 559,000 tons. The Bureau's statement
1928
16.50 Dec. 31
13.08 July 2
follows:
1927
15.25 Jan. 11
13.08 Nov. 22
Financial Chronicle
Volume 136
ESTIMATED UNITED STATES PRODUCTION OF COAL AND BEEHIVE
COKE (NET TONS).
Cal. Year to Date.
Week Ended.
June 10
I933.c
June 11
1932.
June 3
1933.c
1933.
1932.
1929.
Bitum Coal:a
Weekly total 5,435,000 4,931,000 3,975,000 127,823,000 131,400,000 231,202,000
965,000 1,695,000
938,000
Daily aver__ 906,000 913.000 663,000
Pa.Anthra.: b
Weekly total 735,000 594,000 559,000 19,561,000 22,182,000 32,033,000
238,200
164,900
145.400
Daily aver__ 122,500 118,800 93,200
Beehive Coke:
371,400 2,906,200
369,300
9,700
10,800
10,600
Weekly total
21,059
2,691
2,676
1,617
1,800
1,767
Daily aver__
b Includes
a Includes lignite, coal made into coke, local sales, and colliery fuel.
Sullivan county, washery and dredge coal, local sales, and colliery fuel. c Subject
to revision. d Revised since last report.
ESTIMATED WEEKLY PRODUCTION OF COAL BY STATES(NET TONS).
Week Ended.
State.
Alabama
Arkansas and Oklahoma
Colorado
Illinois
Indiana
Iowa
Kansas and Missouri
Kentucky:Eastern
Western
Maryland
Michigan
Montana
New Mexico
North Dakota
Ohio
Pennsylvania (Bit.)
Tennessee
Texas
Utah
Virginia
Washington
West Virginia:Southern b
Northern c
Wyoming
Other States
Total bituminous coal
Pennsylvania anthracite
.
a
14c.,
r.a.waw.ag-a..t4 ...awaaa- 54
, 4-PPPMPPPPPP.PPPPP.P:4PP
1§§§§§§§§§§§§§§§§§§§§§§§§
June 3
1933.
May 27
1933.
140,000
19,000
83,000
463,000
175,000
42,000
60,000
472,000
88,000
21,000
1,000
26,000
19,000
16,000
288,000
1,465,000
49,000
13,000
29,000
147,000
19,000
1,110,000
315,000
54,000
1,000
June 4
1932.
June 6
1931.
June
Average
1932.a
387,000
230,000
122,000
70,000
31,000
15,000
175,000
83,000
48,000
672,000 1,243,000
95,000
249,000 416,000
129,000
88,000
55,000
50,000
128.000
74,000
67,000
661,000
379,000 584,000
183,000
126,000
132,000
47,000
16,000
29,000
1,000
12,000
4,000
38,000
35,000
15,000
29,000
51,000
15,000
14,000
18,000
13,000
378,000 888,000
70,000
968,000 1,853,000 3,613,000
113,000
46,000
78,000
21,000
11,000
13,000
89,000
31,000
17,000
122,000
168,000
240,000
29,000
44.000
24.000
930,000 1,315,000 1,380,000
296,000 496,000 856,000
75,000
104,000
55,000
5.000
3,000
2,000
4,931,000 5,115,000 3,640,000 6,654,000 10.866,000
523,000
959,000 1,956,000
688,000
594,000
5,525,000 5,803,000 4,163,000 7,613,000 12,822,000
Total coal
a Average weekly rate for the entire month. is Includes operations on the
N.& W. C.& O.; Virginian; K.& M.; and B. C.& G. c Rest of State, including
Panhandle.
Bituminous Coal Output Again Increased During May
-Anthracite Production Higher Than in Preceding Month, But Showed a Decline as Compared
with the Same Period Last Year.
According to the U. S. Bureau of Mines, Department of
Commerce, estimates show that during the month of May
1933 a total of 22,488,000 net tons of bituminous coal and
2,967,000 tons of anthracite were produced, as against
19,523,000 tons of bituminous coal and 2,891,000 tons of
anthracite during the preceding month and 18,384,000 tons
of bituminous coal and 3,278,000 tons of anthracite during
the corresponding period last year. Comparative statistics
follow:
MONTHLY PRODUCTION OF BITUMINOUS COAL AND ANTHRACITE
IN MAY (NET TONS).
Bituminous.
Month.
Anthracite.
No. of Average
No. of Average
Working Per WorkWorking Per Work- Total
Total
Production. Days. ing Day. Production Days. ing Day.
1933-April
May
19,523,000
22,488,000
24.7
28.4
790,000 2,891,000
852,000 2,967,000
24
26
120,500
114,000
1932-May
18,384,000
25.3
727,000 3,278,000
25
131,100
4367
Soft-Coal Operators Adopt Code to Permit Price Fixing
by Districts-Sharp Competitive Practices Are
Outlawed-Uniform Sales Contracts Provided.
The National Coal Association, meeting in Chicago on
June 16, adopted a model code under which the operators
of each mining district may write their own provisions for
wages and hours of work. The code outlaws secret rebates,
commercial bribery, and other sharp competitive methods,
and provides for inspection of the books of operatives by
officers of the Association. It was formulated by a cornmittee of 19 soft-coal operators. The principal features of
the new code were described, in part, as follows in the "Wall
Street Journal" on June 16:
One of the principal provisions of the "Code of Fair Competition" completed by the National Coal Association convention here pertains to minimum prices to be charged for soft coal in the various districts. In this
respect, section four of the tentative code recites in part: "Sound economic
principles require the sale.of all coal at such price or prices as will realize
to the producer the cost of production plus a fair margin of profit.
"Each district shall from time to time fix fair and reasonable minimum
prices on the several grades and classifications of coal produced; such
of
prices shall be based upon the cost of production and the competition
substitute fuels and other forms of energy and upon other competitive
market factors. Failure to maintain such prices when so fixed shall be
shall,
deemed a violation of this code. Producers operating under this code
if required,furnish this Association such information and reports as may be
necessary to enforce this code."
This provision has been interpreted by certain producers to mean that the
general level of coal prices may be raised to permit profitable operations of
the industry generally, which, they state, are not now possible.
What Is Unfair?
As a further means of enforcing the above provision and as an outline
code
of unfair practices not to be allowed by the Association,section 5 of the
rebates,
sets forth 11 items of unfair practices. These provisions would bar
prepayment of freight, pre-dating and post-dating of invoices, attempts to
purchase business or obtain information of competitors' busness through
bribes, misrepresentations of quality or sizes of coal and variations in terms
of contractural agreements.
The code also includes provision for standardization of sizes and grades
of coal in each district and for a uniform sales contract which "shall conof
tain a definite statement of price, quantity, quality and grade, terms
payment, time rate and place of delivery and all other elements necessary
for a complete contract.
Sections 2 and 3 of the general code relate to employment and wages.
to
Under these provisions the code states that "employees are entitled
reasonworking and living conditions and to rates of pay consistent with
in deable standards." In this respect each district is given a free hand
termining the details in accordance with local conditions. With reference
to employment conditions the code states:
"Employees shall have the right to organize and bargain collectively
from interthrough representatives of their own choosing, and shall be free
agents, in the
ference, restraint, or coercion of employers of labor, or their
other conin
or
self-organizztion
in
or
representatives
designation of such
mutual
certed activities for the purpose of collective bargaining or other
protection:
aid or
change
a
compel
to
construed
be
Provided that nothing in this title shall
and employers
in existing satisfactory relationships between the employees
employees
the
that
except
corporation,
or
firm,
of any particular plant,
organize
of any particular plant,firm, or corporation shall have the right to wages,
for the purpose of collective bargaining with their employer as to
employment;
hours of labor and other conditions of
be required as
(2) that no employee and no one seeking employment shall
or to refrain from
a condition of employment to join any company union
of his own choosing; and
joining, organizing or assisting a labor organization
hours of labor,
(3) that employers shall comply with the maximum
or
minimum rates of pay, and other conditions of employment. approved
prescribed by the President (of the United States).
The note of the committee which drafted the code states that the above
provision is the required portion of section 7 (a) of the National Industrial
It
Recovery Act which must be complied with by the coal associations.
states, however,that "each district shall write its own clause on employees'
act."
the
of
relations within the provisions
Industry leaders state that the purpose of this provision on conditions
requirement
ofemployment is to preserve the status quo without injecting a
Illinois and
for greater or less amount of unionization. At present the
which
industry
coal
soft
the
Indiana fields are the only principal sections in
are thoroughly unionized.
Current Events and Discussions
The Week with the Federal Reserve Banks.
The daily average volume of Federal Reserve bank credit
outstanding during the week ended June 21, as reported by
the Federal Reserve banks, was $2,203,000,000, a decrease
of $6,000,000 compared with the preceding week and of
$92,000,000 compared with the corresponding week in 1932.
After noting these facts, the Federal Reserve Board proceeds
as follows:
On June 21 total Reserve bank credit amounted to $2,194.000.000, a
decrease of $18,000.000 for the week. This decrease corresponds with
decreases of $76,000,000 in member bank reserve balances, $27,000,000
in money in circulation and $4.000,000 in unexpended capital funds,
non-member deposits, &c., offset in part by a decrease of $90,000,000
in Treasury currency, adjusted.
Bills discounted decreased $23,000.000 at the Federal Reserve Bank of
Cleveland, $2,000,000 each at Philadelphia and San Francisco, and $32,000,000 at all Federal Reserve banks. The System's holdings of bills
bought in open market declined $1,000.000, while holdings of United
States Treasury notes increased $10,000,000 and of Treasury certificates
and bills $13,000,000.
Beginning with the statement of May 28 1930, the text
accompanying the weekly condition statement of the Federal
Reserve banks was changed to show the amount of Reserve
bank credit outstanding and certain other items not included
in the condition statement,such as monetary gold stocks and
money in circulation. The Federal Reserve Board's explanation of the changes, together with the definition of the
different items, was published in the May 31 1930 issue of
the "Chronicle," on page 3797.
The statement in full for the week ended June 21, in comparison with the preceding week and with the corresponding
date last year, will be found on subsequent pages, namely,
pages 4415 and 4416.
Beginning with the statement of March 15 1933, new
items were included, as follows:
1. "Federal Reserve bank notes in actual circulation," representing the
amount of such notes issued under the provisions of paragraph 6 of Section
18 of the Federal Reserve Act as amended by the Act of March 9 1933.
2. "Redemption fund-Federal Reserve bank notes," representing the
amount deposited with the Treasurer of the United States for the redemption of such notes.
3. "Special deposits-member banks" and "Special deposits-non-member banks," representing the amount of segregated deposits received from
member and non-member banks.
A new section has also been added to the statement to show the amount
of Federal Reserve bank notes outstanding, held by Federal Reserve banks
4368
Financial Chronicle
and in actual circulation, and the amount of collateral pledged against
outstanding Federal Reserve bank notes.
Changes in the amount of Reserve bank credit outstanding and in related items during the week and the
year ended June 21 1933 were as follows:
Increase (÷) or Decrease (—)
Since
June 211933. June 14 1933. June 22 1932.
Bills discounted
Bills bought
U. S. Government securities
Other Reserve bank credit
222,000,000 —32,000,000
9,000.000 —1,000,000
1 955,000,000 +23,000,000
8,000,000 —7,000,000
TOTAL RES.VE BANK CREDIT_-2,194.000,000
Monetary gold stock
4,317,000,000
Treasury currency adjusted
1,890,000,000
Money in circulation
5,696,000,000
Member bank reserve balances
2 205,000,000
Unexpended capital funds, non-member deposits, &c
500,000.000
—266,000,000
—45.000,000
+225.000,000
—8.000,000
—18,000,000
—1,000,000
—90,000,000
—27,000,000
—76,000,000
—94,000,000
+400,000,000
+120,000.000
+191,000.000
+139,000,000
—4,000,000
+97,000.000
Returns of Member Banks in New York City and
Chicago--Brokers' Loans.
Beginning with the returns for June 1927, the Federal
Reserve Board also commenced to give out the figures of
the member banks in New York City, as well as those in
Chicago, on Thursday, simultaneously with the figures for
the Reserve banks themselves, and for the same week, instead
of waiting until the following Monday, before which time the
statistics covering the entire body of reporting member banks
in the different cities included cannot be got ready.
Below is the statement for the New York City member
banks and that for the Chicago member banks, for the
current week, as thus issued in advance of the full statement
of the member banks, which latter will not be available until
the coming Monday. The New York City statement, of
course, also includes the brokers' loans of reporting member
banks. The grand aggregate of brokers' loans the present
week shows a decrease of $7,000,000, the total of these
loans on June 21 1933 standing at $775,000,000 as compared
with $331,000,000 on July 27 1932, the low record for all
time since these loans have been first compiled in 1917.
Loans "for our account" decreased from $754,000,000 to
$719,000,000, but loans "for account of out-of-town banks"
increased from $22,000,000 to $49,000,000 and loans "for
account of others" from $6,000,000 to $7,000,000.
CONDITION OF WEEKLY REPORTING MEMBER BANKS IN CENTRAL
RESERVE CITIES.
New York.
June 21 1933. June 14 1933. June 22 1932.
Loans and investments—total
7 039.000,000 6,993,000,000 6,462,000,000
Loans—total
3,455,000,000 3,517.000.000 3.645,000,000
On securities
All otner
1,813,000,000 1,840,000,000 1,720,000,000
1,642,000,000 1,677,000,000 1,925,000,000
Investments—total
3,584,000,000 3,476,000,000 2,817,000,000
U. S. Government securities
Other securities
2484,000,000 2,398,000,000 1,881,000,000
1,100,000,000 1,078,000,000 936,000,000
Reserve with Federal Reserve Bank
Cash in vault
794.000,000
37,000,000
907,000,000
40,000,000
762,000,000
40,000,000
Net demand deposits
Time deposits
Government deposits
5,522,000,000 5.869,000,000 4,898,000,000
752,000,000 687.000,000 755,000,000
290,000,000
76,000.000 143,000,000
Due from banks
Due to banks
79,000,000
77,000,000
71.000.000
1 278,000,000 1,474,000,000 1,054,000,000
June 24 1933
March 1. The present statement covers banks in 90 leading
cities instead of in 101 leading cities as formerly, and shows
figures as of Wednesday, June 14, with comparisons for
June 7 1933 and June 15 1932.
Licensed member banks formerly included in the condition
statement of reporting member banks in 101 leading cities,
but not now included in the weekly statement, had total
loans and investments of $738,000,000 and net demand,
time and Government deposits of $701,000,000 on June 14,
compared with $726,000,000 and $678,000,000, respectively,
on June 7.
As is known, the publication of the returns for the New
York and Chicago member banks was never interrupted.
These are given out on Thursday, simultaneously with the
figures for the Reserve banks themselves and cover the
same week,instead of being held until the following Monday,
before which time the statistics covering the entire body of
reporting member banks in 90 cities cannot be got ready.
In the following will be found the comments of the Federal
Reserve Board respecting the returns of the entire body of
reporting member banks of the Federal Reserve System for
the week ended with the close of business on June 14:
The Federal Reserve Board's condition statement of weekly reporting
member banks in 90 leading cities on June 14 shows increases for the week
of $224,000,000 In net demand deposits. $36,000,000 in loans and investments and $73,000,000 in reserve balances with Federal Reserve banks,
and decreases of $12,000,000 in time deposits, 923.000.000 In Government
deposits and $7,000.000 in borrowings from Federal Reserve banks.
Loans on securities increased 362,000.000 at reporting member banks
in the New York district and $56,000.000 at all reporting banks. "All
other" loans declined $7,000,000 In New York district and 38.000.000 at
all reporting banks.
Holdings of United States Government securities declined $45,000,000
In the New York district and $23,000,000 at all reporting member banks.
Holdings of other securities increased 39,000,000 in the New York district
and $11,000.000 at all reporting banks.
Borrowings of weekly reporting member banks from Federal Reserve
banks aggregated $53,000,000 on June 14 or 37.000,000 less than the week
before.
Licensed member banks formerly included In the condition statement of
member banks in 101 leading cities, but not now included in the weekly
statement, had total loans and investments of 3738.000.000 and net demand.
time and Government deposits of $701,000.000 on June 14, compared with
$726,000,000 and $678.000,000, respectively, on June 7.
A summary of the principal assets and liabilities of the reporting member
banks, in 90 leading cities, that are included In the statement, together
with changes for the week and the year ended June 14 1933, follows:
Increase 1+) or Decrease (—)
Since
June 7 1933. June 15 1932.
June 14 1933.
Loans and investments—total-16,521,000,000
+36,000.000
Loans—total
8,559,000,000
+48.000,000 —1,432,000.000
3,798,000,000
4,761,000.000
+56.000,000
—8,000.000
On securities
All other
Investments—total
U. S. Government securities_
Other securities
7,962.000,000
—426,000.000
—467,000.000
—965,000,000
—12,000,000 +1,006,000,000
_ 4,990,000,000
2,972.000,000
—23,000,000
+11,000,000
+934,000,000
+72,000,000
1,709.000.000
198,000h000
+73.000,000
+4,000,000
+186.000.000
+19.000,000
11.207.000,000
4,263,000,000
158,000,000
+224,000,000
—12,000.000
—23,000,000
+849,000.000
--274,000,000
—255,000,000
1,531,000,000
3,079,000,000
+80.000,000
+110,000.000
+382,000.000
+507,000,000
53,000,000
—7,000,000
—95,000.000
Reserve with F. R. banks
Cash in vault
Net demand deposits
Time deposits
Government deposits
Due from banks
Due to banks
Borrowings from F. R. banks_
Borrowings from Federal Reserve BankLoans on secur. to brokers & dealers:
For own account
719,000,000
For account of out-of-town banks_ __ _ 49,000,000
For account of others
7,000,000
Total
On demand
On time
Loans and investments—total
775,000,000
754.000.000
22.000,000
6,000,000
324,000,000
28.000.000
7,000,000
782,000.000
359,000,000
591,000,000 588,000.000 262,000,000
184.000,000 194,000,000
97,000,000
Chicago.
1,249,000,000 1,198.000,000 1,376,000,000
Loans—total
647,000,000
641,000,000
91,1000,000
336,000.000
311,000,000
333,000,000
308,000,000
530,000.000
381,000,000
602,000,000
557,000,000
465,000,000
395,000.000
207,000,000
351,000,000
206,000,000
287,000,000
178,000.000
Reserve with Federal Reserve Bank_ __ _ 215.000,000
Cash in vault
32,000,000
217,000,000
33,000,000
181.000,000
23,000.000
Net demand deposits
Time deposits
Government deposits
956,000,000
350,000,000
45,000,000
928,000.000
359,000,000
6,000,000
894,000,000
374,000.000
27,000,000
Due from banks
Due to banks
191,000,000
271,000,000
233,000,000
280,000,000
131,000,000
259,000,000
On securities
All other
Investments—total
U. S. Government securities
Other securities
Borrowings from Federal Reserve Bank_
10,000,000
Complete Returns of the Member Banks of the Federal
Reserve System for the Preceding Week.
The Federal Reserve Board resumed on May 15 the
publication of its weekly condition statement of reporting
member banks in leading cities, which had been discontinued
after the report issued on March 6, giving the figures for
Text of Notes Exchanged Between United States and
British Governments Incident to Debt Payment
Due from Latter June 15.
As was indicated in our issue of June 17, page 4177, the
State Department at Washington made public, on June 14,
correspondence exchanged between the United States and
Great Britain on the $75,950,000 instalment due June 15
from the British Government on its war debt to the United
States.
Only $10,000,000 was paid by Great Britain on the
indebtedness, as was reported in our issue of a week ago
(pages 4177-4178), the British Government, through its Ambassador, Sir Ronald Lindsay, indicating in its note to the
State Department its purpose to make this payment "as an
acknowledgment of the debt pending a final settlement." In
the note it was also stated that in the view of the British
Government "the instalment should be considered and discussed as part of the general subject of war debts upon
which they are anxious to resume conversations as soon as
they can be arranged." Acting Secretary of State William
Phillips, in presenting the President's views in the Matter,
stated that the latter Points out that it is not within his
(the President's) discretion to reduce or cancel the debt
nor alter the schedule of payments contained In the exist-
ing settlement. As to the British Government's proposal for
a further discussion of the subject, the President suggests
that the British Government "provide for such representatations to be made in Washington as soon as convenient."
Volume 136
Financial Chronicle
The text of correspondence exchanged between the Government of the United States and the British Government
concerning the June 15 debt payment was made public by
the State Department as follows, on June 14:
DEPARTMENT OF STATE.
Washington, June 9 1933.
His Excellency the Honorable Sir Ronald Lindsay, P. C., G. C. M. G.,
K. C. B., C. V. 0., British Ambassador.
Excellency:
I am requested by the Secretary of the Treasury to notify you that
$75,950,000 interest is due and payable on June 15 1933, on account of
the indebtedness of your Government to the United States, pursuant to the
debt agreement of June 19 1923.
The debt agreement of June 19 1923 requires 30 days' advance notice
In case your Go‘ernment desires to make payment in obligations of the
United States isued since April 6 1917, but I am requested by the Secretary of the Treasury to advise you that he will be glad to waive the
requirement of 30 days' advance notice if your Government wishes to pay
in that manner.
Accept, Excellency, the renewed assurance of my highest consideration.
WILLIAM PHILLIPS, Acting Secretary of State.
The British reply:
BRITISH EMBASSY.
Washington, D. C., June 13 1933.
The Honorable William Phillips Acting Secretary of State of the United
States, Washington, D. C.
Sir:
In reply to the note handed to me by the State Department on June 9,
I am directed by my Government to make the following communication
to you:
It will be recalled that the general views of his Majesty's Government
in the United Kingdom on war debts and on their relation to present
world difficulties were explained in notes exchanged in November and
December last.
His Majesty's Government at that time decided to make payment of
the amount due on Dec. 15, but they indicated clearly that this payment
"was not to be regarded as a resumption of annual payments contemplated
by the existing agreement," and they announced their intention of treating
this payment "as a capital payment, of which account should be taken in
any final settlement."
Finally, they pointed out that the procedure adopted "must obviously
be exceptional and abnormal," and they urged upon the United States
Government "the importance of an early exchange of views with the object
of concluding the proposed discussions before June 15 next in order to
obviate a general breakdown of existing intergovernmental agreements."
His Majesty's Government in the United Kingdom adopted this procedure because they recognized the peculiar position in which the then
United States Administration was placed, and the impossibility of their
undertaking any effective discussion of the problem at that time. His
Majesty's Government acted, however, on the understanding that the discussion would take place without delay, upon the provisions of the existing agreement in all its aspects, 90 as to arrive at a comprehensive and
final settlement, and in the belief that payment on Dec. 15 would greatly
increase the prospects of a satisfactory approach to the whole question.
Negotiations were accordingly started even before the new Administration was Inaugurated; and his Majesty's Government in the United Kingdom
have been most anxious to pursue them as rapidly as possible. On the
occasion of the Prime Minister's visit to Washington the President and
his advisers made preliminary explorations as to the basis of a clearer
understanding of the situation. For reasons not within the control of
either Government, however, it has not yet been possible to arrive at a
definite conclusion of these negotiations.
A speedy conclusion is, however, urgently needed. The treatment of
intergo% ernmental obligations must closely affect the solution of the problems with which the World Conference has to deal, because they cannot
be separated from influences which have brought the world to its present
plight.
For instance, it is generally agreed that one of the first and the
most
essential of our aims should be to increase the general level of commodity
prices. It may be recalled that after the Lausanne Conference there was a
marked tendency Mr prices to rise, but that this tendency was reversed when
the prospects of a final settlement of intergovernmental obligations receded,
while the December payment was accompanied by a sharp fall in prices which
was felt in America at least as much as in Europe. Experience, therefore,
appears to show that the effect of these payments upon prices is very direct.
In the opinion of his Majesty's Government, it is essential for the success
of the Conference that the delegates should not be hampered and
harassed
by doubts about the possibility of a satisfactory settlement of
war debts.
Payment of a further instalment of the debt at this juncture would inevitably be judged to mean that no progress whatever had been made
toward
such a settlement and would, therefore, deal a damaging blow at the confidence of the delegates.
In the circumstances, and in view of their action last December,
his
Majesty's Government had hoped that the United States Government
would
have been able to accede to the request of his Majesty's Government
to
postpone payment of the June instalment pending discussion of war
debts
as a whole. Since, however, this does not appear to have been
found possible his Majesty's Government are obliged to decide upon their
course of
action.
Such a decision must, in any case, be of an extremely difficult
character,
and in considering it his Majesty's Government have felt their deep
responsibility, not only to their own people, but to the whole world, which
is
awaiting the deliberations and recommendations of the conference with
the
utmost anxiety.
The conclusion at which his Majesty's Government have arrived is that
payment of the June instalment could not be made at this juncture
without
gravely imperiling the success of the conference and involving widespread
political consequences of a most serious character. In their view, the instalment should be considered and discussed as part of the general subject of
war debts upon which they are anxious to resume conversations as Boon as
they can be arranged.
In the meantime, in order to make it perfectly clear that they do not
regard the suspension of the June jayment as in any way prejudicing an ultimate settlement, his Majesty's Government propose to make an immediate
payment of $10,000,000 as an acknowledgment of the debt pending a final
settlement. If, as they trust, the Government of the United States is thereafter prepared to enter upon formal negotiations for an ultimate settlement
of the whole war debt question, his Majesty's Government would gladly be
4369
informed of the time and place at which the United States Government would
desire such negotiations to be begun.
I have the honor to be, with the highest consideration, sir,
Your most obedient, humble servant,
R. 0. LINDSAY.
The American reply:
DEPARTMENT OF STATE.
• '
Washington, June 14 1933.
His Excellency the lion. Sir Ronald Lindsay, P. C., G. C. M. G., K. 0. B.,
C. V. 0., Ambassador of Great Britain.
Excellency:
In reply to the note handed to me by your Excellency on the 13th instant,
I am directed by the President to make the following reply:
The President understands that his Majesty's Government have concluded
that payment of the June 15 instalment "could not be made at this juncture
without gravely imperiling the success of the conference and involving
widespread political consequences of a most serious character."
He notes, also, that accompanying this communication is a payment of the
$10,000,000 "as an acknowledgment of the debt pending a final settlement," and notes the characterization of the circumstances with which the
British Government accompanies this payment, although he by no means
concedes some of the statements concerning the world-wide economic cause
and effect contained in his Majesty's Government's communication, especially
in so far as they affect the economic conference. a
The President points out to his Majesty's Government the well-known fact
that it is not within his discretion to reduce or cancel the existing debt
owed to the United States, nor is it within his power as President to alter
the schedule of debt payments contained in the existing settlement. Such
power rests with the Congress.
He notes, likewise, the suggestion of his Majesty's Government that they
desire to make further representations concerning the entire question of the
debt and that his Majesty's Government request that a time and place be
indicated where such representations can be made to the President or the
appropriate representative of the Executive. The President suggests that
his Majesty's Government provide for such representations to be made in
Washington as soon as convenient.
Any results of such a discussion of the debt question can be submitted for
the information or the consideration of the Congress when it next meets.
Accept, Excellency, the renewed assurances of my highest consideration.
WILLIAM PHILLIPS, Acting Secretary of State.
Correspondence Between United States and France
Incident to Default by Latter on War Debt.
The notes which passed between France and the United
States with respect to the June 15 instalment of $40.738,568
due on the French debt to the United States were given out
at the State Department at Washington on June 17. As we
have heretofore noted, the French Government failed to
make any payment on its June 15 indebtedness. Press cablegrams from Paris had previously (June 15) contained an account of the French Government's note to this country (in
which is indicated that it was obliged to defer the June 15
payment), and as given in the Paris cablegrams we published
that version of the note in our June 17 issue, page 4180. As
made public by the State Department, however, the note presented to the latter by Ambassador Andre de Laboulaye differs somewhat in text from the cabled message, and we hence
give herewith the French note and the United States Government's reply as made available at the State Department.
In noting the French Government's failure "to meet in whole
or in part the instalment due," Acting Secretary of State
Phillips called attention "to the problems raised by the failure of the French Government to meet the payment due on
Dec. 15 1932, which have not yet been solved or even discussed between the two nations." The notes between the
two countries were given as follows in the Washington advices, June 17, to the New York "Herald Tribune":
FRANCE.
EMBASSY OF THE FRENCH REPUBLIC IN THE UNITED STATES.
Washington, June 15 1933.
His Excellency, the Honorable William Phillips, secretary of State, Washington, D. C.
Mr. Secretary of State:
In reply to your letter of June 9, my Government has instructed me to
address to you the following communication:
"The French Government had hoped that the due date of June 15 would
not arrive before the conclusion of an agreement on the mttlem.nt of the
war debts, responding to the considerations set forth in the resolution voted
by the Chamber of Deputies on Dec. 13.
"Circumstances, unfortunately, have not yet permitted the realization
of that hope, but the French Government still thinks that in the nearest
future a solution ought to be found for the problem of intergovernmental
debts in the interest of world economic recovery and particularly for the
purpose of maintaining, as well as of developing, the results already obtained, which results are due in so large a measure to the sacrifices of France
with respect to her own claims.
The French Government therefore finds itself obliged to postpone the payment due on June 15. But it by no means intends to break, unilaterally,
engagements freely entered into and desires to renew to the Federal Government the assurance that it is always ready to bring in all appropriate ways
Its most active co-operation in seeking a satisfactory solution."
Please accept, Mr. Secretary of state, the assurance of my highest consideration.
ANDRE DE LABOULAYE.
American reply:
DEPARTMENT OF STATE.
Washington, June 17 1933.
His Excellency Mr. Andre de Laboulaye, Ambassador of the French
Republic.
Excellency:
Financial Chronicle
4370
The Government of the United States acknowledges receipt of the note of
the French Government setting forth its attitude concerning the debt obligation due on June 15 to this Government. It notes that the French Government has failed to meet in whole or in part the instalment due on existing
debt agreement between the French Government and the Government of the
United States.
The Government of the United States must, in all frankness, call attention to the problems raised by the failure of the French Government to meet
the payment due on Dec. 15 1932, which have not yet been solved or even
discussed between the two nations.
Accept, Excellency, the renewed assurances of my highest consideration.
WILLIAM PHILLIPS, Acting Secretary of State.
Payment of $1,000,000 by Italy on Debt to United
States—Official Communique Issued at Rome—
Notes Exchanged Between United States and Italy.
Italy, which, as we reported June 17 (page 4179), paid
about $1,000,000 (in silver) of the June 15 payment of $13,545,438 due on its indebtedness to the United States, addressed a note on June 14 to the State Department through
Ambassador Rosso making known its intention to make an
immediate payment of $1,000,000 as an acknowledgment of
the debt. In answer to the Italian Ambassador's note, Acting Secretary of State Phillips said that the Government of
the United States "would not be entirely candid if it did
not express its thought that a payment of $1,000,000 on a
total payment due of more than $14,000,000 may be regarded
in. the United States as unsubstantial." As to the request on
the part of the Italian Government for a further conference
on the debt question Mr. Phillips stated that this Government would be glad to confer in the matter. In Associated
Press accounts from Rome, June 16, it was stated that the
Italian 'Government officially announced that day the payment to the United States, on June 15, of $1,000,000 in silver
on the war debt. The same advices continued:
June 24 1933
Furthermore, it is noted that the Italian Government has not made full
payment at this time for the reasons which were presented to this Government by Finance Minister M. Jung, during his recent visit to Washington,
at which time he discussed Italy's capacity to pay.
The Government of the United States, however, would not be entirely
candid if it did not express its thought that a payment of $1,000,000 on a
total payment due of more than $14,000,000 may be regarded in the United
States as unsubstantial and may occasion disappointment on the part of the
Congress and the people of the United States.
Accept, Excellency, the assurances of my most distinguished consideration.
WILLIAM PHILLIPS, Acting Secretary of State.
Principle for Future Treatment of War Debtors Outlined by United States to Foreign Nations—Correspondence with Czechoslovakia, Latvia and
Rumania—Notes to Estonia and Jugoslavia.
The same principle for future treatment of war debtors
as outlined in correspondence previously published was
indicated in five additional batches of debt correspondence,
with reference to the payments due on June 15, made public
by the State Department at Washington on June 21. The
countries concerned are Czechoslovakia, Estonia, Latvia,
Rumania and Jugoslavia, said a Washington account
(June 211 to the New York "Times" which added:
Of these countries, Czechoslovakia, Latvia and Rumania made "token
payments" June 15. The other two paid nothing.
Czechoslovakia paid $180,000 In silver, on account of the total of $1,500.000 due. Rumania made a payment of $29.100, also in silver, to apply on
Its due instalment of $1,000,000. Latvia paid $6,000, in currency, of
the $118,961 interest payment due.
The five countries advanced inability to pay as at least one of the reasons
for not meeting the June 15 instalment, and the State Department noted
this statement in its replies to these nations.
Only the three which made token payments received promises of negotiations for debt revision, however, the notes to Estonia and Jugoslavia
adhering to the formula worked out previously in replying to France.
It was merely said that this Government notes that the government concerned "has failed to meet in whole or in part the instalment due on the
existing debt agreements."
Reparations Halt Mentioned.
Jugoslavia, alone of all the countries with which the debt correspondence
has been published so far, referred to tbe discontinuance of German reparations payments,first under the Hoover moratorium and subsequently under
the Lausanne agreement, as a reason for not settling last week's payment.
The State Department qualified its reply slightly to include a reference to
Jugoslavia's "inability to pay, which it alleges to be due to special conditions not applying to other governments. . ."
The Government said it made the payment for the purpose of demonstrating good will, but at the same time asserted that the present economic situation places limitation on the expression of this good will.
Premier Mussolini, as Minister of Foreign Affairs, was invited to initiate
negotiations toward a definite solution of the problem before Dec. 15, when
the next payment is due.
An official communique reads:
"A grand council meeting on June 12 made the following decision: 'The
grand council of Fascism, in view of the payment falling due June 15 and
the beginning of the London conference, decides on payment of $1,000,000
for the purpose of demonstrating the good will of the Fiscist Government
but at the same time this good will is limited by the present economic situation, and it invites the Foreign Minister to initiate negotiations for a definite solution of the problem before the next payment on Dec. 15 provided
by the existing Italo-American agreement.'
"Consequently, yesterday the Ambassador at Washington, following instructions from the head of the Government, consigned a note to the State
Department in which, in conformity with the above-mentioned deliberation
and with reference to the explanations furnished by finance Minister Jung
during his visit in Washington, the Italian Government informed the United
States Government of the decision taken to make an immediate payment of
$1,000,000 as recognition of the debt while awaiting final systemization
at the soonest date convenient to the American Government.
"Payment was made yesterday to the Federal Treasury in New York of
2,000,000 ounces of silver."
Steps Toward Negotiations.
Progress is being made toward fixing dates for the debt-revision negotiations to begin, Acting Secretary Phillips indicated. It was the intention
of the State Department to arrange the hearings in the order of debt status
of the countries, those most nearly having fulfilled their obligations coming
first.
This plan was upset by the fact that L. Astrom, the Finnish Minister,
has been summoned to Helsingfors and is expected to sail within a few days.
Finland was to have headed the list of negotiators in recognition of having
paid its obligations to date in full, including the $148,592 on interest account
due June 15.
Tentative dates are now being discussed with Sir Ronald Lindsay. the
British Ambassador. Great Britain would logically have the next call
on first place, for its payment of $10,000,000 on account of the $75,950,000
due June 15.
Under President Roosevelt's present plans it is expected to have the
countries begin to advance their representations toward the end of July.
The note addressed by Ambassador Rosso to Acting Secretary Phillips follows:
The notes made public by the State Department on June 21
were given as follows in the New York "Herald Tribune":
ROYAL ITALIAN
EMBASSY.
1Washington, June 14 1933.
The Honorable William Phillips, Acting Secretary of State, Washington, D. C.
Sir: With reference to your note of the 9th of this month concerning the
amounts due on June 15 by the Italian Government to the Government of
the United States in accordance with the debt agreement of Nov. 14 1925, I
have been instructed to inform you that on June 13 the Fascist Great
Council has passed the following resolution:
"In view of the payment due to the United States on June 15 and of the
opening of the Economic Conference in London, the Fascist Great Council
decides that a payment of one million dollars shall be made in order to
show the good will of the Italian Government and at the same time the
limitations imposed upon it by the existing situation. The Council invites
the Minister of Foreign Affairs to start negotiations for the final solution
of this problem before the payment of next December falls due as provided
by the existing debt agreement."
I am also instructed to inform you that, in accordance with the above
resolution and in view of the representations already made by Finance Minister Signor Jung during his recent visit to Washington in regard to Italy's
capacity to pay, the Italian Government propose to make an immediate payment of $1,000,000 as an acknowledgment of the debt pending a final settlement and that they would be glad to enter upon negotiations for such a final
settlement of the war debt question at the earliest date convenient to the
Government of the United States.
Accept, sir, the renewed assurance of my highest consideration.
AUGUSTO ROSSO.
The following is the reply of Mr. Phillips:
DEPARTMENT OF STATE.
Washington, June 17 1933.
His Excellency Signor Augusto Rosso, Italian Ambassador.
Excellency: In reply to your Excellency's note of June 14, the President
directs me to say that the Government of the United States notes that the
payment of $1,000,000 has been made on account and as an acknowledgment
by your Government of the debt due to the United States. This Government
notes also the request of the Italian Government for an opportunity to present representations concerning the entire debt question and in reply desires
to inform you that it will be glad to confer with you in regard to this
matter.
LATVIA.
Arthur B. Lule, Consul General of Latvia in New York, wrote to William
Phillips, Acting Secretary of State, on June 15, saying In part:
"My Government state with regret that no opportunity for a survey of
the debt situation has been given them, to the present date, June 15, when
a new interest payment has become due under the debt-funding agreement
of Sept. 24 1925.
"I am directed, sir, to inform you that the Government of Latvia still
adhere to the motivation and viewpoint as contained in their note of Dec. 15
1932. Inasmuch as the international situation has become even more
complicated and Involved since that date, due to exchange and transfer
difficulties, and inasmuch as the foreign trade of Latvia has suffered a
further considerable decline, and the budget problem presents increasing
difficulties. the Government of Latvia is faced with the necessity, which
they sincerely regret, of refraining from payment of interest due on June 15
1933, until the proposed negotiations concerning a revision of the debtfunding agreement have been brought to a conclusion.
"However, I have the honor to advise you, sir, that my Government
has not the slightest intention of interfering with or barring the negotiations which they anticipate with the Government of the United States,
regarding Latvia's indebtedness, by an unilateral decision or action. It
Is to avoid such an impression that the Government of Latvia have this
day transferred to the United States Treasury, the amount of $8,000
(six thousand dollars), constituting approximately 5% (five per cent) of
the interest payment due June 15 1933 with the same reservation, however,
as was made in connection with the last payment, that of Dec. 15 1932 to
the effect that the Government of Latvia do not consider this transfer as
resumptive of payments under the agreement of Sept. 24 1925."
American Reply.
Mr. Phillips replied on June 21, acknowledging the receipt of the $6,000
"as an acknowledgment of the debt," and added:
"In accordance with your request, the representations of the Government of Latvia with regard to the entire debt question between our two
countries will be gladly heard at a date to be agreed upon between us."
RUMANIA.
Minister Davila of Rumania wrote to Mr. Phillips on June 15 in part
as follows:
"In reply to your note of June 9, permit me to emphasize, in the name
of my Government, the following part of the note which I had the honor
to address to you to-day:
Volume 136
Financial Chronicle
64
•
•
•
In the course of these conferences I have also shown that
although the limits of taxation have been reached and every possible
economy made, the expected revenue of Rumania, with a population of
almost 19,000.000, is equivalent to only 139,50(,,000 gold dollars, of which
835,000,000 is due on account of interest on the external debt service,
the statuary amortization of which has had to be practically suspended for
the next year, with the consent of the bondholders: that the National
income of Rumania in 1932 has fallen to 56.96% of the figures for 1929.
and that this situation compelled Rumania to enforce severe foreign exchange restrictions, this being, under the circumstances, the only means
of maintaining the legal parity of the National currency. I have, therefore,
been compelled to request that the instalment due by Rumania to the
United States of America on June 15 1933 be postponed until after the
re-examination of the entire problem, and that a date should be set for
this purpose. Unfortunately, for reasons which I well understand, this
request of my Government could not so far be complied with.'"
As a token of good-will, Rumania then proffered $29,100 as 3%
interest on account as acknowledging its debt. The note added that
"pending a final settlement, the Rumanian Government trusts that a
date for the rediscussion of the whole problem will be set at your earliest
convenience."
American Reply.
Mr. Phillips replied on June 21, acknowledging the offer to pay $29,100
and saying: "The presentation made in your note as to the inability of
your Government to pay the entire amount has been noted." His note
then added:
"In accordance with your request, the representations of the Government of Rumania with regard to the entire debt question between our two
countries will be gladly heard at a date to be agreed upon between us."
CZECHOSLOVAKIA.
Ferdinand Veverka, Czechoslovakian Minister, wrote to the State
Department on June 15, saying:
"As the complex and difficult economic and financial situation has not
permitted as yet that such a final settlement be arrived at, the Czechoslovak Government, in an effort to manifest its utmost willingness to
meet existing obligations, has decided upon paying a sum of 8180,000.
a sum expressing the highest limit of payment which could be made at
present without impairing the budgetary and monetary equilibrium so
laboriously attained and maintained.
"This sum, which is being paid without any prejudice to the final settlement, and as a payment on account of it, is also destined to confirm and
acknowledge the existing obligation until that final settlement is made
possible. This. In addition to all observations mentioned in the previous
notes and which have not lost their substance and justification, seems to
be a sufficient reason to the Czechoslovak Government for renewing the
request for negotiations at the earliest possible moment with the view to
Initiate the final reconsideration and settlement of the whole of the intergovernmental Czechoslovak debt to the United States."
American Reply.
The American reply, on June 21, acknowledged the intention of Czechoslovakia to pay $180,000 and noted "the presentation made in your note
that this 811121 is 'the highest limit of payment which could be made at
present without impairing the budgetary and monetary equilibrium' of
your country." As in the other notes it was stated that the further representations of the debtor would gladly be heard.
ESTONIA.
Charles Kuusik,acting Consul General of Estonia in New York, wrote to
Mr. Phillips on June 15 as follows:
"Sir: I have the honor to acknowledge receipt of your note of June 9,
in reference to the June 15 payment. My Government regrets very much
that on account of existing depressed economic conditions in Estonia it is
not in position to effect the payment of the amount due on June 15 from
Estonia to the United States. I have been instructed to ask the United
States Government to agree to a friendly exchange of views regarding the
possibility of reconsideration of the debt-funding agreement of 1925, as
requested in our note of Dec. 15 1932."
•
American Reply.
Mr. Phillips in replying on June 21 noted that "the Estonian Government failed to meet in whole or in part the instalment due on the existing
debt" of Estonia, and added:
"The Government of the United States must, in all frankness, call
attention to the problems raised by the failure of the Estonian Government
to meet the payment due on Dec. 15 1932, which have not been solved
or even discussed between the two nations.
"The Government of the United States notes further that the failure to
pay this instalment is based by the Estonian Government upon the principle of Inability to pay."
JUGOSLAVIA.
Dr. L. Marano, Jugoslav Minister, wrote to the State Department on
June 15 stating the views of his Government on the debt payments due
in 1932 and 1933 as follows:
The royal Jugoslav Government is financially unable to make these
payments on account of the following reasons:
"(1) The chief reason is the non-payment of the German reparations
due to Jugoslavia, which have not been paid to us. in spite of the fact that
we did not accept the moratorium proposed by President Hoover. This
situation was continued by virtue of the Lausanne agreement. Jugoslavia
was inequitably and harder hit than any other country by this moratorium
and was placed in quite singular a situation, for if the annuities due by
Jugoslavia on her debts are deducted from the reparation payments due
to her by Germany she is a loser to the extent of 16 million dollars per
annum.
"The money was devoted to carrying out the obligations imposed upon
the country by the expenses of the war and the enemy occupation, such as
the payments to war invalids, war damage to property, &c. In addition,
the reparation money was used for the repayment of the foreign debts
contracted for the restoration of the country devastated by war operations
.
and enemy occupation.
"(2) In addition, this very unfavorable situation has been aggravated by
the general world crisis, and particularly by the agricultural crisis under
which Jugoslavia, which is chiefly an agricultural country. 18 particularly
suffering. The budgetary consequence thereof is that, on account of the
fall of agricultural prices, the revenues of the State are lowered. As additional consequences of this crisis in Central Europe, foreign capital was
withdrawn and on account of the dropping of foreign trade, all commerce
has to be carried on by making use of he clearing system."
American Reply.
Mr. Phillips's reply on June 21 was In virtually the same language as the
note to Estonia, except that it was noted that Jugoslavia'a inability to pay
was alleged to be "due to conditions not applying to other governments."
4371
Elsewhere we give the notes previously (June 17) given
out by the State Department.
Texts of Notes Between Poland and United States on
Debt Payment Due Latter June 15.
On June 17 the State Department at Washington made
public as follows the notes which passed between the Polish
Ambassador and Acting Secretary of State Phillips regarding
the June 15 debt payment due from the Polish Government:
POLISH EMBASSY.
Washington, D. C., June 14 1933.
(Memorandum.)
Referring to the note addressed to the Government of the United States
by the Polish Government on Dec.8 1932, concerning the postponement of
the payment of the consolidated debt instalment due on Dec. 15 1932, the
Polish Government declares that the factual situation set forth in the
above-mentioned note has not in any way improved in the course of the
last six months and that the premises therein adduced continue to remain
in force.
In view of the above, the payment by the Polish Government of the
interest instalment due on June 15 1933 has unfortunately also become
Impossible.
Under these circumstances the Polish Government is compelled to request
the Government of the United States to take the above under advisement
and to defer similarly the payment of the instalment due on June 15.
The Polish Government declares its readiness to communicate all the
data and information which might be found necessary and, referring to the
declaration made by the Ambassador in Washington on Jan. 18 1933, is
ready to consider with the Government of the United States the matter of
the aforesaid debt in its entirety.
State Department's Reply.
DEPARTMENT OF STATE.
Washington, June 17 1933.
His Excellency, Mr. Stanislaw Pate*, Ambassador of Poland.
Excellency:—The Government of the United States acknowledges receipt
of the note of the Polish Government setting forth its attitude concerning
the debt obligation due on June 15 to this Government. It notes that
the Polish Government has failed to meet in whole or in part the instalment
due on existing debt agreement between the Polish Government and the
Government of the United States.
The Government of the United States must,in all frankness,call attention
to the problems raised by the failure of the Polish Government to meet the
payment due on Dec. 15 1932, which have not yet been solved or even
discussed between the two nations.
The Government of the United States notes further that the failure to
pay this instalment is based by the Polish Government upon the principle
of inability to pay.
Accept. Excellency, the renewed assurances of my highest consideration.
WILLIAM PHILLIPS, Acting Secretary of State.
Correspondence Between Belgium and United States
on Debt Payment Due Latter June 15.
The texts of the notes between the Belgian Ambassador
and Acting Secretary of State Phillips relative to the June 15
debt payment due the United States, was given out by the
State Department on June 17. Belgium was one of the
Governments which failed to make any payment on its
debt. The notes follow:
BELGIAN EMBASSY,
Washington, June 14 1933.
To His Excellency, the Secretary of State, Department of State, Washington.
Mr. Secretary of State:—In reply to the letter which your excellency addressed to me on the 9th of this month, I have the honor to advise you that
the Belgian Government is not in a position to modify, for the due date of
June 15, the attitude which circumstances constrained it to adopt on the
15th of December,last. It desires to renew the assurance of its entire goodwill in seeking a satisfactory settlement.
I take this opportunity, Mr. Secretary of State, of renewing the assurances of my highest consideration.
PAUL MAY.
Reply to State Department.
DEPARTMENT OF STATE.
Washington, June 17 1933.
His Excellency, Mr. Paul May, Belgian Ambassador:
Excellency:—The Government of the United States acknowledges receipt
of the note of the Belgian Government setting forth its attitude concerning
the debt obligation due on June 15 to this Government. It notes that the
Belgian Government has failed to meet in whole or in part the instalment
due on existing debt agreement between the Belgian Government and the
Government of the United States.
The Government of the United States must,in all frankness,call attention
to the problems raised by the failure of the Belgian Government to meet
the payment due on Dec. 15 1932, which have not yet been solved or even
discussed between the two nations.
The Government of the United States notes, further, that the failure to
pay this instalment is based by the Belgian Government upon the principle
of inability to pay.
Accept, Excellency, the renewed assurances of my highest consideration.
WILLIAM PHILLIPS, Acting Secretary of State.
Notes Between Finland and United States Incident to
June 15 Debt Payment—Finland Only Nation to
Pay in Full.
Finland, as we noted in our June 17 issue, page 4179, was
the only one of the foreign governments to pay in full the
June 15 instalment on its debt to the United States. The
text of the correspondence between the two nations was
made public as follows on June 17 by the State Department
at Washington:
Financial Chronicle
4372
LEGATION OF FINLAND.
Washington, D. C., June 14 1933.
The Honorable William Phillips, Acting Secretary of State, Washington, D. C.
Sir:—I have the honor to acknowledge receipt of your note of June 9
1933. by which you were good enough to inform me that the Secretary of
the Treasury had requested you to advise me that he would courteously
waive the requirement of thirty days advance notice contained in the
debt agreement of May 1 1923, for the case that my Government should
wish to make payment on June 15 next in United States obligations.
Highly appreciating this courtesy I wish to state that my Government,
when making payment in full of the interest, due to-morrow, the 15th of
June. in the amount of $148,592.50. will prefer the method for effecting
payment in silver provided for in Section 45 of the emergency farm mortgage Act of May 12, since my conversations at the Department of State
disclosed that this form of payment will be agreeable to the Government
of the United States. My understanding is that the American Government will accept silver at a price of 50 cents an ounce, and that the silver
should be delivered on June 15 at the assay office in New York..
1 I should be greatly obliged to you if you would kindly confirm the correctness of my above understanding.
Accept, sir, the assurances of my highest consideration.
L. ASTROM.
Reply of State Department.
DEPARTMENT OF STATE.
Washington, June 17 1933.
Mr. L. Astrom, Minister of Finland:
Sir:—The President directs me to acknowledge the receipt of the payment
by your Government of the June 15th instalment of the debt owed to the
United States Government. The Government of Finland, by this action,
has justified the high regard with which It has always been held by the
Government of the United States. It Is significant that the people of Finland have regarded this payment as an important national obligation and
have discharged its terms in full. This Government will be ready to discuss
at the pleasure of the Government of Finland the entire debt question.
Accept, sir, the renewed assurances of my highest consideration.
WILLIAM PHILLIPS, Acting Secretary of State.
A wireless message from Helsingfors June 19 to the New
York "Times" said:
The American note to Finland's Washington Minister, expressing appreciation that Finland paid in full her war debt annuity maturing June 15.
was received here with great satisfaction.
One newspaper writes: "It Is characteristic of the present world economic
conditions that a nation paying her debts should receive special recognition."
The press acknowledges with gratification the American offer to discuss
Finland's debt whenever the Finnish Government regards the time as
opportune.
Under date of June 20 Associated Press advices were
reported as follows from Washington:
Because Finland paid its war debt instalment in full, the Administration
was anxious to give it first place in the corning series of conferences looking
to revision of the debts of the several nations.
However, Minister L. Astrom told Acting Secretary William Phillips at
the State Department to-day that he was anxious for a long summer holiday
and would appreciate postponing discussions of the Finnish debt until fall.
World Monetary and Economic Conference—Preliminary Discussions Ended With Addresses by Delegates from Three British Dominions, China and
11 Smaller Nations—Canada Proposes Stabilization of British and American Currencies as One
Solution of Monetary Problem—Mexico Ready to
Adapt Monetary System to an International
Regime.
The general preliminary discussion of the World Monetary
and Economic Conference, meeting at London, was concluded on June 15 when the representatives of three British
Dominions, China and 11 small nations brought before the
conference the specific troubles of the various countries for
which they spoke. The principal features of these various
addresses were given, in part, as follows, in London advices
to the New York "Times" on June 15:
Prime Minister Bennett of Canada urged "with all the power at my
command that the two greatest trading and creditor countries at the
conference at the earliest possible moment reach an agreement on de facto
stabilization of their currencies." Ile held this to be essential to the success
of the conference.
Canada, he said, would endeavor to maintain the value of its dollar
on a stabilized basis at London and New York whenever the United States
and the United Kingdom would establish a stable relationship for their
currencies.
The Canadian Premier urged price-raising through credit expansion and
suggested that creditor countries could not afford to take too cautious a
view of the magnitude of public works undertaken by the governments or
overlook the needs of general international lending.
"Either we must resume the normal international contacts, which give a
free competitive system opportunity to find a natural response to the ways
of consumers or we will find ourselves In insular groups based upon artificial
regional economies." he said.
Regarding tariff quotas Mr. Bennett agreed in the main with Neville
Chamberlain, British Chancellor of the Exchequer, but he said the nations
would continue to use tariffs as instruments of National policy to safeguard
the development of their resources and prevent unfair competition. The
depression, he asserted, had brought a network of impediments that were
damming normal channels of trade.
Suggests Wheat Plan,
Mr. Bennett emphasized the world wheat surplus, which he considered
could be dealt with effectively only by an international agreement"involving
possible reduction of acreage until the abnormal carryover is disposed of."
Alluding again to tariffs he suggested that wheat-importing countries consider the feasibility of increasing purchases at the same time when proclueing countrks were reducing their wheat supplies. This, he thought, would
provide an equilibrium more quickly than simply reduction of the supply.
G. W. Forbes of New Zealand likewise gave his general endorsement of
Mr. Chamberlain's speech, but as the spokesman for a debtor country he
June 24 1933
laid special emphasis on the borrowers' capacity to pay under present
circumstances. Not only, he contended, must there be a general scaling
down of public and private debts among nations, unless commodity prices
were raised so as substantially to reduce their burden, but he suggested
the debts might have to be scaled down even though prices were raised.
The Germans listened with special interest to thisstatement.
Joseph Connolly of the Irish Free State did not mention Mr. Chamberlain's speech, but he discussed broad aspects of the conference's task and
urged it not to shrink from unconventional solutions. Be said he felt the
whole organism of international exchange should be brought under orderly
International control and removed from the control of "those who merely
exploit it."
He questioned whether the present system of production and finance
needed to be regarded as inevitable since It had not worked effectively.
"Even if we have to face the fact that a new order of things must be
evolved," he said, "let us not hesitate, but with courage and honesty turn
our energies to the work of seeking a way out."
Mr. Connolly suggested that the Bank for International Settlements
might be a clearing house for international exchange co-ordinated with the
central banks.
T. V. Soong of China described graphically the economic backwardness
of his country and called attention to its potential purchasing power if the
standard of living were raised, and he urged a higher value for silver.
China, he said, might prove a decisive factor in a new era of prosperity
since she offered an enormous market awaiting development.
Sees Opportunity for Capital.
Here was an opportunity for foreign capital. and it was the intention of
the Chinese Government to increase the consuming power of the country,
Mr. Soong said. While gold currencies were being stabilized, he said, he
hoped the value ofsilver. China's currency, would be raised and stabilized.
Tewftk Rushdi Bey of Turkey endorsed the economic non-aggression
pact proposed by Foreign Commissar Litvinoff of the Soviet Union. He
explained the Turkish tariffs which were recently raised, by saying the
revenue was needed for budget purposes. He pointed out that Turkey's
exports were chiefly foodstuffs and tobacco, and he said she was seeking
agreements with nations that were her customers but that Turkey meant
gradually to abolish such quotas as had been imposed.
Alberto J. Pani of Mexico reviewed the reorganization of the Mexican
National Dank and said Mexico was ready to adapt its monetary system
to an international regime which the conference might recommend.
He said Mexico wanted to support measures to raise the price level
without reducing consuming capacity and that as the chief silver-producing
country she was keenly interested in raising the value of silver and stabilizing its price.
Cadre, da Matta of Portugal said that as soon as the great commercial
powers stabilized currencks Portugal would follow suit, but that she
reserved the right to decide on parity. He opposed bimetallism but advocated the planned use of silver as a subsidiary currency.
Latvia was proud of having adhered to the gold standard and urged the
larger countries to take the lead in reducing tariffs. said Delegate Salnals,
but he urged restoration of the unconditional most-favored-nation clause.
Asks Debt Readjustment.
Dr. Kailas of Estonia suggested a readjustment of debts based on the
capacity to pay and urged the elimination of import restrictions. The
Venezuelan spokesman, Senor Escalante, said Venezuela owed no foreign
debts and adhered to economicliberalism. Hence,he lett the tariff question
to the countries concerned. Constantin Maynard of Haiti thought agreements for the regulation of production should be applied to American
agricultural countries that could not trade with one another but required
markets elsewhere.
Fuad Aslani of Albania told how his country had suffered from trade
restrictions that had reduced the income of the people. Senor Tudela
of Peru urged a reorganization of public credit and banking. Foreign
Minister Maximos of Greece was particularly interested in markets for
tobacco to enable Greece to pay her debts.
Rafael Estrella Urena of the Dominican Republic emphasized the burden
of debts incurred in prosperous days and the need for an agreement among
producers. Russia introduced a resolution for all States in the conference
to withdraw. "irrespective of the motives underlying them," all measures
"having the nature of economic aggression or discrimination against any
one country." This presumably referred to the British embargo against
most of her imports from Russia.
World Monetary and Economic Conference—Dr. Alfred
Hugenberg, German Delegate, Asks African Colonies for Germany—Memorandum Arouses Indignation of Other Delegations—Proposal is Immediately Disavowed by Members of German Delegation and Dr. Hugenberg is Recalled to Berlin.
Dr. Alfred Hugenberg, German Minister of Economics
and one of the German delegation to the World Monetary
and Economic Conference at London, submitted to the
conference on June 17 a memorandum recommending that
Germany be granted colonies in Africa and hinting at the
desirability of German colonization schemes in eastern
Russia. The memorandum said that Germany's capacity for
meeting her international debts might be increased by giving
her an African empire where large public works schemes could
be carried out and also by opening other new territories.
The memorandum aroused much resentment among the
various delegations to the conference, but hardly had this
had an opportunity to develop when the Gel man delegation
to the conference disavowed Dr. Hugenberg's memorandum
by informing Dr. Hendryk Colijn,Prime Minister of Holland,
who is presiding over the economic committee, that the
suggestions put forward represented purely personal views of
Dr. Hugenberg, and should not be considered as official
proposals of the German delegates. On the same day (June
17) it was announced that Dr. Hugenberg would leave
London immediately for Berlin and, it was reported, might
be asked to tender his resignation as Cabinet Minister to
Chancellor Hitler.
Volume 136
Financial Chronicle
(2) that the metal cover -for currencies be lower than the average of
current reserve requirements, with 25% as the suggested rate;
(3) that 80% of the metal cover be in gold and 20% optionally either
in gold or silver, if silver can be obtained at a rate to be fixed in ratio to
commodity prices;
(4) that subsidiary coinage be remonetized and further debasement be
prevented, and
(5) that arbitrary sales of silver on world markets be limited by the
principal silver-producing countries.
Undue emphasis has been placed upon consideration of a plan proposed
for temporary de facto stabilization of currencies.
The fact is this never was an affair of the delegation. It was considered
by representatives of the Treasuries and Central banks of the United
States, Great Britain and France, Oliver M. W. Sprague having been
especially sent to represent the United States Treasury for this purpose.
The American Government at Washington finds that measures for temporary stabilizatiou now would be untimely.
The reason why It is considered untimely is because the American Government feels that its efforts to raise prices are the most important contribution
It can make and that anything that would interfere with those efforts and
possibly cause a violent price recession would harm the Conference more
than the lack of an immediate agreement for temporary stabilization.
As to the ultimate objective, the American delegation has already introduced a resolution designed for ultimate world-wide stabilization of unstable currencies, and is devoting itself to the support of measures for the
establishment of a co-ordinated monetary and fiscal policy to be pursued
by the various nations in co-operation with the others for the purpose of
stimulating economic activity and improving prices.
Whereas, confusion exists in the field of international exchange, and,
whereas, it is essential to world recovery that an international monetary
standard should be re-established.
Now, therefore, be it resolved, that all the nations participating in this
conference agree:
First, that it is in the interests of all concerned that stability in the
International monetary field be attained as quickly as practicable.
Second, that gold should be reestablished as the international measure
of exchange values.
Third, that the use of gold should be confined to its employment as cover
for circulation and as a medium for settling international balances of payment. This means that gold either in coin or bullion will be withdrawn
from circulation.
Fourth, that in order to improve the workings of a future gold standard,
a uniform legal minimum gold cover for the currencies of various countries
which shall adopt the gold standard shall be established, and that this legal
minimum reserve shall be lower than the average of present reserve requirements.
• Fifth, that central banks of various nations be requested to meet at once
in order to consider adoption of such a uniform minimum reserve ratio, and
that a metal cover of 25% be recommended for their consideration, and
•further.
Whereas, silver constitutes an important medium both In international
and domestic exchange for a large proportion of the world's population.
And, whereas, the value of this purchasing medium has been impaired
by Governmental action in the past.
And, whereas, it is necessary that the confidence of the East should be
restored in its purchasing medium, which can only be done if the price of
silver is restored to an equilibrium with commodity price levels.
Now, therefore, be it resolved that,
First, an agreement be sought between the chief silver producing countries
and those countries which are large holders or users of silver to limit arbitrary sales upon the world market.
Second, that all nations agree to prevent further debasement of their
subsidiary silver coinages.
Third, that all nations agree to remonetize their subsidiary coinages up
to a fineness of at least 800, when, and if consistent with their
respective
national budget problems, and,
Fourth, that it be recommended to central banks that they agree that 80%
of their metal cover shall be in gold, and 20% shall be optionally
in gold
or in silver, provided that silver is obtainable at or below
a price to-be
agreed upon as corresponding to the general commodity price
level and
that Governments agree to modify their respective laws to this
effect.
The text of the resolution on trade restrictions introduced
before the World Monetary and Economic Conference on
•June 22 by Secretary of State Hull, follows:
Whereas the various nations have been constrained on the one hand to
impose restrictions upon Imports in the nature of tariffs, quotas, embargoes,
&c., and on the other hand by subsidized exports, and
' Whereas this tendency has resulted in nationalistic action in all nations,
which, if carried to the logical conclusion, will result in almost complete
elimination of international trade and return to medieval isolation;
Whereas it is agreed that this tendency must be arrested if world recovery is to be achieved and a decent standard of living is to be widely
maintained; now, therefore, be it
Resolved, That all the nations participating in this Conference agree:
First—That it is against the common interest for any nation to adopt
or continue a policy of extreme nationalism and to raise additional trade
barriers and discriminations:
Second—That embargoes, import quotas and various other arbitrary
restrictions should be removed completely as quickly as possible, and
Third—That tariff barriers should be reduced as quickly as possible
by reciprocal bilateral agreements or by multilateral agreements to the
point where trade can once more move in a free and normal manner, and
Fourth—That care should be taken in making bilateral or multilateral
agreements not to introduce discriminatory measures, which, while providing an advantage to contracting parties, would react disadvantageously
upon world trade as a whole.
a
4373
World Monetary and Economic Conference—Statement
by American Delegation Clarifies United States
Position on Stabilization—Currency Plans Considered "Untimely"and Price Rise Is First Objective
—Resolution by Secretary Hull Urges Leveling
of Barriers to Trade.
For the first time since the opening of the World Monetary
and Economic Conference at London on June 12, the objectives of the United States delegation were definitely outlined
when on June 22 the delegation issued a statement regarding
the attitude of the United States toward monetary stabilize,
tion, while on the same day Secretary of State Hull introduced a resolution regarding trade barriers and tariffs. In
the stabilization statement, the delegation said that "undue
emphasis" had been placed upon consideration of a plan for
temporary de facto stabilization of currencies, and that the
"American Government at Washington fi ds that measures
for temporary stabilizaion now wou d be untimely."
Raising of prices, the statement continued, wa;the immediate
interest of the American Government.
The resolution on trade restrictions was introduced by
Secretary Hull by authority of the American delegation and
on instructions of the United States Government. It was
described by the delegation as "designed to lay the foundations for a gradual reduction and removal of artificial barriers
to trade." Both the statement and the resolution seemed
to indicate in obvious terms that the United States Government at the present time is interested primarily in raising
price levels; that to do so it is willing to co-operate with
other nations, particularly if it can insure the leveling of
artificial restraints to American exports; but that it will not
consider, as the price of concessions from other nations,
an agreement to stabilize the dollar at a definite ratio either
to gold or to the currencies of other countries befoie its
other objectives have been attained.
The text of the American delegation's statement on stabilization follows:
World Monetary and Economic Conference—Senator
Pittman Proposes Bimetalism Resolution, Providing 80% of Metal Backing Currencies Be in Gold
and 20% Optional in Gold or Silver—Suggests 26%
Reserve Requirement.
A modified form of bimetalism was suggested by Senator
Key Pittman of the United States in a resolution offered on
June 19 to the subcommittee of the monetary and financial
commission dealing with permanent measures for currency
rehabilitation under the auspices of the World Monetary and
Economic Conference meeting at London. Senator Pittman's
plan for a return to monetary stability proposed:
(1) That gold be restored as a world measure of exchange values, but
that it be withdrawn from general circulation and used only as a cover and
means of settling international balances;
Senator Pittman explained that if his plan were adopted
all governments could return to the use of gold as a measurement in international exchange. The resolution attracted
little initial comment in the subcommittee. The remarks
offered were quoted as follows by the London correspondent
of the New York "Times" on June 19:
A Swiss delegate said he wondered whether the nations were prepared to
discipline themselves in the monetary field. If so, he declared, agreement
would be easy on a basis of gold with silver used for small money.
L. G. A. Trip of Holland quoted the "declaration of the gold delegation
of the League of Nations that gold constituted the only possible standard."
The Council of the Bank for International Settlements had stated the same
opinion, provided certain necessary preliminary conditions were fulfilled,
and he said the preparatory comrnision of experts had echoed this conclusion.
"Personally, I do not believe this commission thinks it possible that there
can be any relief for the world without monetary stability and a return of
the necessary confidence to fight against hoarding," he added. "Without a
reasonable degree of stabilization of the principal currencies, particularly of
the pound and dollar, it will be impossible to accomplish anything concrete
as regards, for instance, the movement of capital.
"As regards the role played by silver, the commission doubts the possibility of the central banks having an important part of their cover in a
metal of the slue as variable as silver. If this difficultj
, could be avoided,
however, silver would play a useful part in the figfit against hoarding."
IIenri Parrnentier of France reiewed the list of financial authorities who
have declared that gold alone could constitute an international standard.
"Is there actually any delegation which holds a different opinion?" he
asked.
The_committee then adjourned, the very unanimity of opinion to which
H. Parmentier had referred having left so little to be said that there was
a dearth of speakers.
The text of the resolution dealing with gold and silver
presented to a committee of the World Economic Conference
by Senator Pittman follows:
World Monetary and Economic Conference—Multilateral 10% Tariff Cut Proposal, at First Attributed
to U. S. Delegation, Is Disavowed by Senator
Pittman.
A proposal for a multilateral agreement upon a 10% tariff
cut, which was reported submitted to the Economic Committee of the World Monetary and Economic Conference at
London on June 17 by the United States delegation, was disavowed on behalf of the delegation on the following day by
Senator Key Pittman, who said that the suggestions as published in the press had originated not with the
American
delegates but with their technical advisers, and that they
were in no sense official. The text of the reported
proposals,
as contained in London advices to the New York
"Times" on
June 17. follows
4374
Financial Chronicle
Suggested agenda for the economic commission in the field of tariffs and
commercial policy.
A. Reduction of trade barriers by multilateral agreements.
1. Import duties—A 10% horizontal reduction in the import duties in
effect in various countries on June 12 1933, including a corresponding reduction in the amount of any surtaxes and other imposts levied exclusively
upon imports (or at a higher rate than domestic goods), also in the amount
of any existing margins of tariff preferences now granted on products of
whatever source other than the importing country.
2. Import Restrictions—Corresponding liberalization of import restrictions other than tariffs, including all measures of an economic character
having the effect of curtailing importations by other means than import
duties and essential routine customs regulations.
[A partial suggestion of a concrete program on this subject is embodied
in a document on import restrictions to be submitted by the American delegation.]
3. Equitable Operation of Import Quota Restrictions—Agreement upon
principles and practices to govern the operation of import-quota and similar
systems, which would be designed to minimize unnecessary uncertainties
and obstructions in international trade and avoid discriminations as between
the same products of different origins.
[A series of concrete principles on this subject is suggested in a document on import restrictions to be submitted by the American delegation.]
Such multilateral agreements for reduction or moderation of import duties
and other trade barriers would become operative and binding upon ratification by a sufficient number of countries to constitute the recipients of at
least 50% of the international trade during 1932, as tabulated in the League
of Nations report, "Review of World Trade, 1932."
B. Extension of the customs truce beyond the London conference for a
sufficient period after the close of the conference to afford a stable basis
for working out constructive measures for international trade adjustments
by bilateral negotiations or otherwise.
Details to Be Proposed.
[More detailed proposals on this subject, including an indication of allowable exceptions and reservations, may be submitted by the American delegation.]
C. Encouragement of reduction of trade barriers by bilateral agreements.
In addition to agreement on the above subjects, which it is believed can
and should be worked out at this conference, encouragement should be
given
by resolution to further and subsequent reduction of trade barriers,
particularly by reciprocal agreements between various pairs of countries.
Such reciprocal agreement should be based on the most
-favored-nation
principle in its unconditional and unrestricted form—to be applied
to all
forms and methods of control of imports, and not alone to
import duties—
subject only to such limited or temporary exceptions to meet
special situations as may gain general assent at this conference.
Senator Pittman's statement, denying the official nature
of the tariff proposals, read as follows:
The statement in the press to-day that the American
delegation has proposed to the Economic Conference a 10% horizontal cut
in all tariffs is
without foundation. No such proposition was submitted
by the delegation.
The technical advisers of the delegation may have
drafted their ideas to
form the basis of discussion for the agenda of the Economic
Commission.
I am informed these suggestions were transmitted to and
given publicity
through the Economic Commistion of the League of Nations
Monetary and
Economic Commission and were not given out through press
officers of the
American delegation.
It is unfortunate that through error the statement
was attributed to the
American delegation. I should add that this erroneous
impression was duo
to no fault of the press.
Secretary Hull Appeals to United States for Faith in
London Conference—Speaking on Radio, He Explains Tariff Policies and Says Limited Industries
Can No Longer Expect Widespread Tariff Protection—Asks for Tariff Adjustments to "Aid General
Prosperity."
Secretary of State Cordell Hull in an address from London
on June 15, which was broadcast to the people of the United
States, appealed for confidence in the outcome of the World
Monetary and Economic Conference, and warned that
limited industries can no longer expect to receive widespread
tariff protection when their products cannot compete with
those made in other countries. In explaining his tariff
policies, Mr. Hull said that the tariff "should be adjusted
so as to bring to us a tariff that will aid general prosperity
instead of furthering industries whose main asset is an insurmountable tariff wall." He also said that the conference
had made a good start and that divergences of opinion were
"more apparent than real." His address follows:
Fellow-citizens: The American delegation at the London Economic
Conference realizes the magnitude of its task and faces it with confidence
that ultimately the proceedings of the conference will result in measures
that will advance the restoration of the disturbed economic world and give
us, as well as every other country, a better opportunity to move
again
toward prosperity and contentment.
I am glad to be able to tell you the principle of prompt action
foreshadowed in the conversations with Prime Minister MacDonald held in
Washington during his recent visit has taken hold of the conference. Appreciation of the world crisis has committed all delegations to conclude our
work in six or eight weeks instead of taking that many months, which
was
the original thought of many.
When I left Washington, the usual estimate of the time required for
the
opening speeches was three weeks. Instead, the general discussion was
closed this afternoon, after three days. In addition, the two major committees, one on economic, the other on monetary questions, have
already
been selected and will proceed to-morrow to the effective work of the
conference, which means the interchange of views, the reconciling
of
differences; in short, all the processes that lead to final agreement.
The work of the conference naturally divides itself into two branches.
There may be varying opinions as to the relative importance of the economic
and monetary sides, bud, obviously, the two things must work practically
In concert. There can be no adequate approach to commercial stability
unless we break down the economic barriers erected by the various nations
June 24 1933
in the way of tariffs, quotas and other expedients adopted in their vain
efforts to achieve surcease from the pangs of the panic.
Likewise, these barriers cannot be lowered with safety to the systems
of different countries without agreements looking to the correction, of
tariff and other obstructions, and the stabilization of exchange must be
accomplished if there is any good to be reached by this congress of nations.
It is plain that, as a preliminary to the work of international reconsMucMon, there has been a truce in tariffs and, as far as possible in exchange.
pending whatever arrangements can be made for the longer truce on whatever basis the nations finally agree. It is not difficult to state the objective
but we must realize these objectives cannot be reached by any haphazard
or casual road.
Each country, naturally enough, is concerned mainly with the prosperity
of its own nationals. What we see is a mutual profitable exchange in
surpluses. We must not expect to protect the limited industries, the
products of which are not important in volume or equal in excellence to
what our foreign customers have. Nor shall we establish monopolies to
the detriment of the consumer. In short, the tariff should be so adjusted
as to bring to us a tariff that will aid general prosperity instead of furthering
industries whose main asset is an insurmountable tariff wall.
How long will be the disputes depends on the spirit with which the
vital elements of the convention undertake their service. It is perhaps
not illogical that at the beginning, before the v81'10118 delegations have
become well acquainted, there should be a certain amount of caution, if
not suspicion, a wariness indicating the nationals' positions, and a desire
to feel the other fellow out before revealing the program for which each
nation will strive.
I find the atmosphere like that of one of our own national political
conventions. While various elements are seeking the success of particular
candidates, there Is a stiffness in getting started. There are back-room
conferences and more or less mysterious manoeuvres, but pretty soon the
atmosphere changes.
The desires of every faction become known to all the others and so they
proceed to final agreement. I am glad to report so far we have met nothing
but courtesy and kindness. I do not mean by this the other people have
made any commitments or yielded anything essential any more than has
the American delegation.
I do feel, as general recognition of the irresistible demand of humanity.
that the conference hall should not be the arena of political jockeying but
of an incessant striving to solve the world's problems.
The address of King George was a gracious welcome with a background
of earnestness that showed no little study of the world's dilemma and a
perception of what is necessary to get us out Of the slough of depression.
It is too soon to be able to announce in detail what the accomplishment
will be, but the best minds of many nations will work out a workable
program into enactments that will at least begin the process of restoration.
Of course, there can be no explicit formula that will make everybody
prosperous and happy. so I do not promise you that the millennium will
come with the adjournment of the International Economic Conference.
What I do expect is that whatever action is taken here will instill into
the peoples everywhere a spirit of confidence, in lieu of their feeling of
despair, a realization that they are not to be ground among the wheels of
hopeless economic warfare, and that the time will come again when resources and efforts and industry may be reasonably sure to bring to each
of us something approximating his deserts.
Every country can, I imagine, get along in some sort of fashion by
depending almost entirely upon its domestic market, and doubtless in a
world made up of nations our country was far better off than most, better
off than any. Such a process, however, means a reconstruction of the
country's whole domestic economy. To agriculture it implies the cutting
of acreage; to industry, the curtailment of production; to labor, a lessening
of opportunity, which involves high costs and low purchasing power.
On the cultural side it must bring provincialism, a narrowing of ideas.
if not of ideals, for without the knowledge of the customs and manners
and learning of the rest of the world, which is one of the benefits of extensive
International commerce, nations inevitably tend to decline and to decay.
This has been the case in many instances throughout the past ages.
The efforts of each nation to save itself, regardless of what happens to
the rest of the world, dislocated the whole system of general commerce.
Our task in London is to rearticulate the scattered family, to put an end
to the gyrations of currency which really act as additional trade hindrances.
These things. I firmly believe, we will be able to do. The difficulties
envisaged by some newspapers all over the world, their reports ofskirmishes,
their surmises and speculations of conspiracies, represent over-appraisement
of the obstacles of pioneering along a new trail of world progress.
It is true that the underbrush is thick. It always is in such an enterprise, but that we shall make our way through it and strike a fairly clear
road beyond I unhesitatingly believe.
Fourteen Million Belgian Credit Granted by French
Banks—Paris Expected to Ask Extension of British
Loan.
United Press advices from Paris June 20 are taken as
follows from the New York "Herald Tribune":
A group of French banks extended a credit of 300,000,000 franca (about
$14,430,000) to the Belgian Government to-day.
Authorities denied reports that an official Belgian loan will be placed
on the French market.
Meanwhile, Finance Minister Georges Bonnet was expected to take up
in London the question of renewing for three months the loan of £30,000.000
granted the French Treasury by British banks in April.
The loan created a considerable stir at the time it was granted, coming
a few days after the abandonment of the gold standard by the United
States. It was suspected that it cloaked a maneuver against the dollar.
which later was denied by the Finance Ministry.
It was conceded, however, that the loan played an important part in
keeping France on the gold standard. Leilving the way clear for the pound
and the dollar to fight out their differences without the complication of a
third monetary unit in the financial battle.
France Has 249 Million Five Months' Trade Deficit.
The following (United Press) from Paris June 20 is from
the New York "Herald Tribune":
A trade deficit of 5,153,000,000 francs ($249,453,600) for the first five
months of 1933 was reported to-day by the Ministry of Finance. Imports
for the period were 12.702,000,000 francs ($614.776,800). against 12,622.000,000 francs ($610,904,800) in tho corresponding period of 1932, it was
reported. Exports were 7,548.000,000 francs ($365.323,200), against
8,507,000,000 francs ($411,738,800).
Imports in May amounted to 2,464.000,000 francs ($119.257,600), while
exports were 1,497.000,000 ($71,583,600), it was reported.
-41
Volume 136
Financial Chronicle
Dr. Schacht of German Reichsbank in Letter to Chancellor Hitler Indicates Reasons for Transfer
Moratorium—Decrease in Gold and Currency
Reserves Viewed as Leaving Insufficient Currency
for Payments Needed in Export Trade—Asks Decree Under Which German Debtors Would Make
Payments to Conversion Bank.
In a letter addressed by Dr. Schacht of the German
Reichsbank to Chancellor Hitler, the reasons for, and aims
of, the transfer moratorium are discussed. A translation
of the letter (dated June 8) was made available this week
by Herman A. Metz, President of the Board of Trade for
German-American Commerce, Ltd. The letter proposes
the issuance of a decree under which all German debtors to
whom the Reichsbank cannot grant the necessary transfer
currencies for the time being would be obliged to make their
payments in reichsmarks at the current rate of exchange of
the foreign currency, "to an autonomic Conversion Bank,
newly to be founded under the supervision of the Reichsbank." The translation of the letter follows:
Dear Mr. Chancellor:
Reserves of the Reichsbank in own gold and covered currency amounted
at the end of June 1930 to 3,078.000,000 reichsmarks, which was the
highest point of monetary stabilization reached. Due to discontinuation
of credits by foreign countries, brought about by the crash of the Austrian
Credit Bank in May 1931. these reserves have been rapidly decreased.
This decrease has been slowed up by the standstill agreements after the
crisis of July 1931, it was, however, not to be prevented that on May 31
1933 only about 280.000,000 reichsmarks in own gold and covered currency
remained in the Reichsbank.
Although the amount of gold-covering does not play the important part
it used to play in regard to the internal finances, due to the Government control of currency, the continued decrease of gold and currency reserves at
the Reichsbank leads to the grave danger that the currency available will
not be sufficient for the payment of the millions needed in the daily export
trade of the country. This danger increases as with the steady decline of
the monetary reserves exports are shrinking, too. The development of
the German trade balance during the last months, with its sharply decreasing export surplus (average per month of the first four months in 1932
equals 94,000,000 reichsmarks, against 44,000,000 reichsmarks at the same
time in 1933), gives a good illustration. Arbitrary measurements regarding
currency in a number of other countries have created a further danger.
So far, Germany could figure on the use of higher export-surplusses of
former months, but a shrinking of these reserves and with it a shrinking
of trade has come dangerously near.
Such a condition has to be prevented in order not to jeopardize the payments for imports of raw materials, etc., which represent the basis of employment for German high class workers. In German exports not only
the German workers are interested, but also the creditors of Germany.
Germany can only make payments in the currency of her creditors if German exports are kept alive. That this is understood everywhere in the world
has been documented by the conversations with representatives of the creditor nations regarding transfers.
From this situation the necessity arises to take immediate measures to
prevent a further weakening of the Reichsbank and to attempt a strengthening of its reserves. This necessity has also been acknowledged by the
creditors. The measurements taken to aid the Reichsbank have so far
been of no avail. To keep up debt payments, the entire surplus of the export as well as Reichsbank reserves have been given up continually. The
situation has oecome so crucial that the Reichsbank, in order to maintain
export trade and with it Germany's capacity to pay, is forced to take recourse to a decisive measure. With July 1 1933, the Reichsbank will,
temporarily, cease to contribute currency for the transfer payments of such
obligations as existed during the crisis of July 15 1931, as far as these have
not been regulated by the standstill agreement. This measure is expected
to help the Reichsbank in the preservation of its remaining reserves, in filling these out gradually and in making it possible for the Reichsbank to
supply the necessary currency for the credit and commercial transactions
with foreign countries.
As the final goal of these measures, the Reichsbank expects to co-ordinate
German currency to the free international monetary system and to make
Germany's future capacity to pay fully effective.
We are aware that the proposed measures will inconvenience the creditors for a short time, but we believe that it is in the interest of the creditors to make such a temporary sacrifice in order to strengthen German's
capacity to pay, rather than to risk the danger of a lasting stop in this
capacity. Such a stop the Reichsbank wishes to avoid by all means. It
therefore requests the Government to decree by law that all German debtors
to whom the Reichsbank cannot grant the necessary transfer currencies for
the time being, be obliged to make their payments for the agreed-upon
service of all foreign debts, entered into before July 15 1931 (as far as these
are not regulated by the existing or future standstill agreements), when they
fall due,in reichsmarks at theicurrent rate ofexchange of the foreign currency,
to an autonomic Conversion Bank, newly to be founded under the supervision of the Reichsbank. In case et bon-payment of a debtor, the foreign
creditor must have at his disposal all regular, lawful rights to obtain payment of reichsmarks.so that it be absolutely clear that the measure taken by
the Reichsbank is only a measure of monetary policy and not the sanctioning of a stop in payments.
By proposing this measure, the Reichsbank hopes to contribute to a
revival of world trade. It hopes that soon the time will come when the
Reichsbank has again ample currency not only for the long-term loans but
also for commerce and trade in general. The Reishsbank wishes to take
the initiative in urging the other States and banks to take measures towards
a revival of world trade, and would suggest that this problem be discussed
primarily at the World Economic Conference, in order to bring about a
co-operation of all the interested countries.
Such co-operation is also in accord with the wishes of Germany's creditors
which were represented at the Reichsbank's Transfer Conference of May
29 to June 2 The unanimous desire for close co-operation was the most
important positive result of this conference. For your information we are
enclosing copy of a press communique and beg to point out the proposed
installation of a committee of creditor-representatives for Germany's
long-term debts. After it is planned to hold a meeting of the Committee
of Creditors of Germany's short-term debts in London, during the Conference, the new committee might be asked to London at the same time to
discuss with the others the question of further steps and especially the handling of the limited currency resources, with the aim to co-ordinate the new
system to the resumption of free transfer.
4375
Issuing Houses Which Sponsored German Bond Issues
Send Protest to President Schacht of Reichsbank
Against Declaration of Transfer Moratorium—
John Foster Dulles Acts in Behalf of American
Bankers.
The issuing houses which sponsored various issues of
German bonds have been following recent developments
affecting these bonds, and at their invitation John Foster
Dulles attended the Berlin debt discussions called by the
Reichsbank. Mr. Dulles returned to New York on the
steamer Berengaria, which reached New York June 15,
and after a study of Mr. Dulles's report and following a
meeting of the issuing houses held June 19 Mr. Dulles was
requested to send the following cablegram to ,Dr. Schacht,
President of the Reichsbank:
Following a meeting of the issuing houses at whose invitation I attended
the recent debt discussions at Berlin, I was requested to advise you as
follows:
"It is their judgment, on the basis of the data submitted by the Retellsbank itself, that the position and prospects of Germany as regards foreign
exchange are not such as to warrant the precipitate, drastic and arbitrary
action embodied in the Moratorium Decree of June 8. They deplore both
the manner of the action taken and its scope, which threatens to impose on
creditors, without their consent, sacrifices far beyond what the facts would
justify and whereby even the terms of their bonds are sought to be changed
so that payment in marks to the Reichsbank will discharge a contract to
pay dollars to the bondholders. Such a policy, if persisted in, cannot but
do lasting injury to the public and private credit of Germany.
"Germany, even in periods of great adversity, has zealously guarded her
commercial credit. When, only recently, she contended that the imposed
charge of reparation must be abolished in order to permit her to pay her
freely contracted private debts, the world generally accepted that argument
as sincere. Germany now risks the loss of her credit standing with lasting
consequences as well as immediate repercussions which cannot but disappoint
the expectation of the Reichsbank that its action will lead to a rapid
replenishment of its gold reserves.
"The issuing houses trust that these and possibly other considerations
will result in modifying the application of the Law of June 8, the terms of
which contemplate that its rigor may be relaxed by executive action. It
appears impossible to Justify a cessation of interest payments on German
bonds as a whole in the face of repayment of the entire principal amount of
the Golddiskontbank Credit due July 1, maintenance of interest payments
on non-commercial short term debt and large scale repurchases of Gtrman
bonds in the market for German account."
In making the above announcement June 20, the issuing
houses said:
Dr. Schacht has emphasized his desire to maintain contact with groups
representative of creditors with a view to arriving at some practical application of the Law which would be accepted as fair by the bondholders. It is
the intention of the issuing houses to continue contact with the situation
and, either individually or collectively, to advise bondholders when in the
judgment of the issuing houses any definite lines of action by the bondholders become desirable.
From the New York "Times" of June 21 we take the
following:
The Goiddialcontbank credit to which Mr. Dulles refers amounts to
$45,000,000, having been previously reduced from 850.000,000 This is
owed a group of New York banks headed by the International Acceptance
Bank, now consolidated in the Bank of the Manhattan Company. The
German authorities have indicated that this amount will be paid in full
on July 1.
Ralph T. Crane, a partner of Brown Brothers, Harriman & Co., who is
Chairman of the group of New York bankers who have underwritten the
various German dollar bond issues during recent years, declined yesterday
to indicate what steps would next be taken if Germany defaulted.
In other banking quarters the belief was expressed that American bondholders' might obtain some redress where German corporations had tangible
assets in this country. It was the view of some that such assets might be
attached by the bondholders, and the hint was dropped that other reprisals
along this line could legally be taken.
It was pointed out yesterday that, inasmuch as Dr. Schacht had emphasized his desire to maintain contact with groups representative of
creditors with a view to arriving at some practical application of the moratorium law which would be accepted as fair by the bondholders, the issuing
houses would continue to keep contact with the situation, either individually
or collectively. The bankers plan to advise bondholders when, in their
Judgment,any definite lines of action by the bondholders become desirable.
So far there has been no move to start a committee to receive deposits of
German bonds, since, in the first place, default has not yet occurred, and.
secondly, because of the desire to avoid,if possible, the incurring of expense
to the bondholders. In this connection it was explained that the bankers
were "neutral" regarding the possibility of the creation of a Corporation of
Foreign Security Holders under the terms of the Federal Securities Act.
This corporation can be formed only by proclamation by President Roosevelt.
Although reports from Berlin have indicated that the German Government 7% bonds, the Dawes Plan Loan, will be exempt under the moratorium and that the full debt service will be continued, bankers here have
not been officially notified to this effect. Reports from the same source
have indicated that at least the interest payments, if not the sinking fund,
will be maintained on the German Government 530,the Young Plan Loan.
The declaration by Germany of a partial transfer moratorium on foreign debts contracted before July 1931 was
noted in our issue of June 10, page 3997. "Standstill
credits," it was indicated, are exempt from the moratorium.
F. Abbott Goodhue, Representing American Bankers
Interested in Short-Term Credits Under "Standstill" Agreement, Holds Short-Term Credits Are
Essential to German Trade.
On June 21 F. Abbott Goodhue, President of the Bank
of the Manhattan Co. of New York, who is Chairman of
the sub-committee representing the American banks interested in German credits, issued a statement bearing on the
recent London conference on "standstill" credits, in which
4376
Financial Chronicle
he said that "debtors and creditors realize that short-term
credits are essential to German trade and must be continued
in order to provide Germany with the facilities to carry on
that trade and thus build up her supply of foreign exchange."
The "Times" of June 22 observed:
Mr. Goodhue did not join issue with the group of American investment
bankers who on Tuesday sent a cable message to Dr. Hjalmar Schacht,
head of the Reichsbank, protesting against suspension of payments on
German bonds and charging that it was unfair to cease interest payments
when the full principal of the 845,000,000 bankers' credit to the Golddiskontbank was being repaid and when interest was being maintained on
Germany's non-commercial short-term debt. His argument that continuation of the short-term credit interest indirectly benefited long as well as
short-term creditors was construed in Wall Street. however, as an answer
to strictures leveled against the bankers for sanctioning Germany's plan
tor paying interest on her debts to the banks while refusing to pay interest
on her debts to the public.
Mr. Goodhue's statement follows:
At the recent conference in London between the representatives of the
short-term creditors of Germany under the standstill and the representatives of the German debtors and of the Reichsbank further concessions were
agreed to by the creditors in view of the existing foreign exchange situation
In Germany.
Both debtors and creditors realize that the short-term credits are essential to German trade and must be continued in order to provide Germany
with the facilities to carry on that trade and thus build up her supply of
foreign exchange. German foreign trade and world trade were recognized
by all the creditors' representatives recently in Berlin as fundamental to
the transfer problem. Since Germany is obtaining no long-term funds
at the present time, foreign trade financed by these credits are the onlY
channel through which she can accumulate this exchange; and it is to this
exchange that the long-term, as well as the short-term, creditors must look
as the source of payment to them. The continuation of the short-term
credits is thus vital not only to Germany but to all her creditors as well.
By carrying on for the past two years as they have done, and by making
repeated concessions, the short-term creditors have made every sacrifice
for the benefit not only of themselves and of Germany, but also for the benefit of all Germany's creditors.
However, at the meeting Dr. Schacht. the President of the Reichsbank,
stated that in spite of the sacrifices which had already been made, he was
forced to ask for further concessions, which have been made by the standstill creditors as follows:
Postponement from September till the end of the present standstill
agreement of instalment payments by the Deutsche Golddiskontbank on
credits heretofore guaranteed by it;
Agreement to consider further postponement of any preferential rights to
cash payments arising after Sept. 1 1033;
Waiving the privilege of having immediately transferred in foreign exchange dividend payments of bankrupt debtors, to the extent that such
transfer shall be subject to veto by the Reichsbank;
Agreement that the creditors would not oppose admission to the standstill agreement of creditors of Norddeutsche Kreditbank and Bank fuer
Auswaertigen Handel credits;
Waiving the absolute right to transfer of a percentage of existing credits
upon graLting new credits, and making such transfer subject to the Reichsbank's discretion;
And agreeing to a further reduction in interest rate of A %. This last
reduction in interest is the third which has been made during the past year.
Maximum rates were fixed at the conference in London last July and further
modified by the schedule adopted at the conference in Berlin in February;
the present interest schedule to be effective July 15 is the third straight
reduction that the standstill creditors have accepted in the interests of
German economy and of all the creditors of Germany.
It may be recalled that originally the German creditors were called
together through their various Central Banks to work out a program to
Continue to hold the then outstanding credits at Germany's disposal as a
result of President Hoover's moratorium in 1931.
Agreement Reached in London on German Short-Term
"Standstill" Credits Between Dr. Schacht and
Foreign Bankers' Committee—Delay in Repayments and Reduction in Interest Rates.
• Advices from London June 16 to the New York "Times"
regarding the new German "standstill" agreement said:
An agreement reached to-day between Dr. Hjaimar Schacht, President
of the Reichsbank, and the foreign bankers' committee, provides for the
postponement for the present of repayment Of the capital of the German
short term credits covered by the standstill agreement and also that the
creditors' committees "will be advised by a conservative committee" to
recommend a reduction of interest rates.
The German Gold Discount Bank, guarantor of the payments, will
now have until next Feb. 28 to repay 75,000,000 marks[about $21,375,000
at current exchange] that were to have fallen due prior to then.
This revision of the standstill agreement; covering short-term obligations
aggregating more than 3,000,000,000 marks, is regarded in London as the
best that could be expected in the circumstances. The standstill credits
were exempted from the partial transfer moratorium recently declared by
the Reichsbank.
Discuss Long-Term Credits.
DISCUSSiODS between Dr. Schacht and the long-term creditors, whose
funds cannot now be transferred from Germany, were begun to-day after
the agreement with the short-term creditors had been reached. British
American, Swedish, Dutch and Swiss creditors were represented at the
Song-term meeting, the official report of which follows:
"The whole question was freely and fully discussed, but the character
of the meeting was such that no decision or agreement could be made on
details. It was, however, the unanimous or in some cases the predominant
opinion that certain principles should be observed.
"Dr. Schacht maintained that it was in the interest of all the creditors
to keep intact the financial machinery for carrying on Germany's foreign
trade, both imports and exports, because it is principally from that source
that devisen [foreign exchange] are acquired with which the service on all
foreign obligations can be made.
"It was strongly advocated, and no objection was raised, that the service
of the Dawes loan should have absolute priority over the other transfers.
Certain representatives advocated similar treatment for the Young loan.
Agrees to Dawes Loan Priority.
"Dr. Schacht agreed that the Dawes loan had legal transfer priority,
both for interest and amortization. While not admitting such priority for
June 24 193J
the Young loan, he was prepared to have regard to the predominant opinion
of those present that the next priority should be given to this loan.
"On the other hand, certain strong views were expressed to the contrary
and Dr. Schacht desired to have the opportunity of considering all the
arguments brought forward.
"The suggestion was made that efforts should be made to secure a
temporary postponement on the sinking fund of the Young loan in order
to accelerate the recovery of the exchange position, and it was agreed to
refer this to the Bank for International Settlements.
"Apart from the above consideration affecting the Dawes and Young
loans, it was generally agreed that transfer for the payment of interest
should in all cases, both of the long-term and short-term credits, have
priority over transfer for the payment of capital."
The creditors will remain in touch with the Reichsbank to settle other
questions arising before July 1, which will be discussed at a meeting to
be held soon.
An item bearing on the agreement appeared in our issue
of June 17, page 4181, in which the reduction in interest
rates was noted.
Dutch and Swiss Reported as Opposing Dr. Schacht's
Proposals on German Long-Term Credits.
On June 17 Associated Pres accounts from London said:
The refusal of representatives of the Netherlands and Switzerland, who
together hold 2,500,000,000 gold marks [currently about 8710.000.000] of
German foreign long-term credits, to accept proposals of Dr. Fljalmar
Schacht, President of the Reichsbank, hampered negotiations over those
German obligations to-day.
The Swiss have taken the matter out of the hands of bankers and have
assigned their official World Economic Conference delegation to the credit
discussions here with Dr. Schacht and Dr. Alfred Hugenberg, German
Minister of Agriculture and Economics.
Regarding the agreement announced yesterday on the German shortterm credits, covered by the standstill accord, it was learned the interest
rate is to be dropped to 4 or 4A % depending on each case.
The agenda of discussions of the long-term loan were split yesterday
into two parts, one comprising the Dawes and Young loans. It was understood that a tentative agreement had been reached whereby those loans
were to be exempted from the German partial transfer moratorium, with
the exception of the Young loan sinking fund.
Taking up the second part of the agenda to-day, however, the Swiss
and Dutch representatives notified Dr. Schacht that certain suggestions
of his would not be acceptable.
German Delegation Withdraws From International
Labor Conference, After Charging Insults--Chairman of Parley Denies German Statements.
The German delegation to the International Labor Conference at Geneva withdrew from the conference on June 19
after issuing a statement that it would not participate "as
long as satisfaction is not given to German protests and
justice not done to well-founded complaints of the German
delegation." An account of the incident, in Geneva advices
of June 19 to the New York "Times," continued:
In a reply to the statement, Giuseppe de Michelis, Chairman of the
conference, declared the reasons for leaving given by the Germans were
not convincing and said the declaration would be referred to the committee
which would submit it to the conference.
It was said here the German withdrawal was mainly the result of the
publication by a Geneva newspaper,"Le Journal des Nations," of a "tactless" statement to the German press by Robert Ley of Germany which
offended the Latin-American countries and the workers' representatives.
The Hitlerites had earlier charged "extremely offensive remarks against
Germany and her delegates at the beginning of the conference."
The officers of the conference, in answering the Germans' charge, said
"no affront has been offered to the German delegation during sittings of
the conference or committee; the incidents to which the German delezation
alludes, if they took place, occurred outside the proceedings of the conference."
The officers' statement was signed by President de Mich°lls, Italian Government representative, who was said to have agreed before the conference
to common action between, the Fascisti and Nazis.
Discussions for Trade Treaty by Representatives of
Hungary and Germany—Hungarian Premier on
Visit to Berlin, Says "Significant Agreement" Was
Reached.
Chancellor Adolf Hitler has reached a "significant agreement" with General Julius Goemboes, premier of Hungary,
according to a copyrighted United Press dispatch from Berlin
on June 19. General Goemboes forecast a trade agreement
among Hungary, Germany, Austria and Italy and indicated
that such a pact might lead to closer economic relations
among the Danubian nations. The meeting between General Goemboes and Chancellor Hitler was described as follows in a communique issued by the German Government on
June 17, and cabled by the Berlin correspondent of the New
York "Times":
"Current political and economic problems came up for discussion.
Economic interests were gone into with special thoroughness and in this
domain the meeting of the two statesmen was of the greatest importance
and positive results were attained.
"The conversations were concluded with the utmost cordiality and
with assurances that the two countries regarded each other with the greatest
sympathy."
Gold Clause Reported Revoked in Chile.
From the New York "Herald Tribune" we take the
following (United Press) from Santiago, Chile, June 17:
The United States decision to annul the gold clause in governmental and
private obligations found a quick response in Chile, where the Court of
Appeals has just revoked the decision of a lower court ordering fulfillment
of a contract in gold money which had been made prior to the abandonment
of the gold standard by Chile.
French and Swiss to Keep Gold Basis.
Associated Press advices from London June 23 to the
New York "World-Telegram" said:
Reports published in London that several European gold standard countries were about to follow the United States and Great Britain and abandon
gold were denied to-day.
Georges Bonnet, Finance Minister of France, classified as "absurd"
statements that the franc was weakening. Before leaving for Paris he
asserted that "these reports are vicious" and that "the French franc is
perfectly safe."
Georges Bachmann, President of the Swiss National Bank, made a
similar denial.
Swiss Will Pay Interest on Bonds Here in Gold.
Under date of June 9 Associated Press accounts from
Berne, Switzerland, stated:
The Swiss Federal Council decided to-day to continue to pay in gold
the interest on bonds floated in the United States.
With reference to the above the New York "Herald
Tribune" said:
The total amount of the issue outstanding is 530.000.000, on which interest is next due on Oct. 1. On the basis of the present exchange value
of the dollar, the premium which the American holders of the bonds will
receive on that date is between $15 and 36 on each $27.50 of interest. The
bonds are 536s.
Committees
4377
Financial Chronicle
Volume 136
for
Protection of American
Colombian Bonds.
Holders of
In our issue of June 17, page 4183, we referred to statements issued by two committees for the protection of American holders of Republic of Colombia bonds, recommending
that bondholders refuse an offer of settlement of interest on
the basis of one-third cash and the remainder in scrip. One
statement was issued by Lawrence E.de S. Hoover, Secretary
of the Independent Bondholders Committee for Republic of
Colombia, while the other was issued by Richard Washburn
Child, Chairman of the Republic of Colombia Bondholders'
Committee. A typographical error made it appear that both
statements were issued on June 13, whereas Mr. Hoover's
statement was actually issued on June 13 and that by Mr.
Child did not come out until two days later, on June 15.
Monthly Instead of Weekly Reports on Short Interest
Called for by New York Stock Exchange.
The New York Stock Exchange, which under a ruling made
by the Exchange on Sept. 16 1932 (noted in our issue of
Sept. 24, page 2083), has called for weekly reports of the
short positions of members, directed on June 16 that monthly
reports instead of the weekly be reported, commencing
June 30. The new ruling follows:
NEW YORK STOCK EXCHANGE
Committee on Business Conduct
June 16 1933.
To Members of the Exchange:
With reference to the circular of the Committee on Business Conduct of
Sept. 16 1932, covering the reporting of short positions, the Committee
now directs that monthly instead of weekly short positions be reported hereafter as of the close of business on the last day of settlement of each month
(ledger date), commencing as of June 80 1933.
The ledger dates as of which short positions are to be reported during the
remainder of the year 1933 are as follows: June 30, July 31, Aug. 31,
Sept. 29, Oct. 31, Nov. 30 and Dec. 29.
This information is to be placed in the hands of the Committee by noon
of the second business day thereafter.
ASHBEL GREEN, Secretary.
From the New York "Herald Tribune" of June 18 we take
the following:
With the advance of the markets there has been a decline of interest in
short selling, which up until a year ago was agitating the public by reason
,of the drastic decline of stock prices. Critics of the practice advocated the
abolition of short selling, but the Stock Exchange has consistently held that
it tends to stabilize the markets. Now that prices are rising the subject
of short selling has apparently lost all interest for the public.
Protest by Peruvians Against Increased Export Duties
on Cotton and Sugar—President Agrees to Name
Committee to Study Arguments. It was stated in a Lima (Peru) cablegram June 13 that the
Peruvian Congress at a secret session on June 9 passed a bill
increasing the export duties on cotton and sugar. This
cablegram, as given in the New York "Times" went on to
say:
Clause 1 fixes the export duty on cotton at 18 pence a hundred pounds,
Clause 2 puts a tax of 11i pence on a quintal of sugar and Clause 3 provides
that the moneys obtained be applied to the national defense.
Cotton exports, amounting to a million quintals a year, previously bore
a duty on a sliding scale, according to the difference between the official
quotations in Liverpool and the cost of production here, which averaged
8 pence for 100 pounds. Although contracts for future delivery carried a
clause whereby now taxes imposed between the date of contract and date
of delivery would be charged to the seller, owing to the shortage of freight
on this coast on 40,000 quintals delivered, but not yetshipped,the shippers
will have to pay the new duties.
Although the taxes have not yet been publicly announced, customs
officials are collecting them.
Growers, merchants and shippers will hold a protest meeting under
the auspices of the National Agricultural Society to-morrow.
Regarding the protest meeting and the promise of the
President to appoint a committee to study the arguments,
a cablegram on June 15 from Lima to the "Times" said:
A protest meeting was held this morning by the National Agricultural
Society, which addressed a petition to President Benavides, signed by all
the leading growers, merchants and shippers regarding the law imposing
new duties on cotton and sugar. This afternoon a committee went to the
presidential palace to present it.
The chief points in the memorial are that "cotton producers are only
now receiving a margin over the cost of production, for the first time in
several years; they already have accepted two direct taxes and a profits
tax, consequently they consider an additional tax unwarranted and
detrimental to the industry."
The President promised to appoint a committee to study the arguments
in the petition.
The revenue from the new tax, amounting annually to 2.500,000 soles,
would be devoted to the national defense.
Volume of Commercial Paper Outstanding as Reported
to Federal Reserve Bank of New York $60,100,000
on May 31, as Compared with $64,000,000 April 30.
The New York Federal Reserve Bank issued the following
release under date of June 23:
Reports received by this bank from commercial paper dealers show a
total of $60,100,000 of open market commercial paper outstanding on May
31 1933.
• Below we furnish a record of the figures since they were
first reported by the Bank on Oct. 31 1931:
1933—
May 31
Apr. 30
Mar. 31
Feb. 28
Jan. 31
1932—
Dec. 31
Nov.30
Oct. 31
Sept.30
Aug. 31
1932—
JmY 31
June 30
May 31
Apr. 30
Mar. 31
Feb. 29
81,100,000 Jan. 31
1931—
109,500.000
113.200,000 1)ee. 31
110,100,000 Nov.30
108,100,000 (,t. 31
560,100,000
64,000,000
71,900,000
84,200.000
84,600,000
5100,400,000
103,300,000
111,100,000
107,800,000
105,606.000
102.818,000
107,902,000
117,714,784
173,684,384
210,000,090
Trading on New York Cocoa Exchange to Commence
10 a. m. Instead of 10:30.
The Board of Managers of the New York Cocoa Exchange
announced on June 15 that commencing July 3 trading will
coMmence daily at 10 o'clock instead of 10:30 a. m. which
is the present week day opening time. The Saturday trading
hours will remain unchanged, 10 a. m. to 12 noon.
Commodity Exchange, Inc. to Open in New Quarters
on July 5—Combined Quarters Located at 81
Broad Street.
Commodity Exchange, Inc. will officially open for business
in the new and combined quarters at 81 Broad Street on
July 5, it was announced June 19 by Jerome Lewine, President. Work on the new trading quarters, which are on the
ground floor of the International Telephone & Telegraph Co.
Building, is rapidly nearing completion the announcement
said, continuing:
They will house the trading activities of what was formerly the National
Raw Silk Exchange, Inc.: the National Metal Exchange, Inc.; The Rubber
Exchange, Inc., and the New York Hide Exchange, Inc. Silk, rubber,
silver, copper, tin and hides are the commodities dealt in. The constituent
exchanges were legally merged on May 11933. Executive offices, board and
committee rooms are located on the 15th floor.
Since the legal merger on May 1, 62 new members have been added, a
majority of those representing New York Stock Exchange houses and firms
holding memberships in other leading exchanges. Only regular or extra
memberships are available on the Exchange and the membership is limited
to 1,031. Price of seats has risen since May 1 from $900, the consolidation
price, to $3,800. June 19, or more than four times the allocation figure.
A previous reference to the Exchange was noted in our
issue of May 20, page 3435.
Stock Exchange, in New Listing Rule, Requires Notice
of Intention to Charge Off Assets Against Surplus
Enlarged Through Change in Par Value of Stock.
The New York Stock Exchange now requires corporations
which increase their capital surplus through a change in the
par value of their stock to state whether they intend to charge
off assets against this surplus, according to an article in the
New York "Times" on June 16. This regulation has been
adopted, it was said, with a view to preventing unsound
writing down of assets. The "Times" article referred to
continued:
Applications for listing approved by the Stock Exchange on June 21 show
that three companies, Park Sr Tilford, the International Hydro-Electric
System and Kresge Department Stores, stated they had no intention of
writing down the value of cagital assets.
The following was contained in Park & Tilford's application:
"No write-down of assets of the company is now contemplated, but if any
future write-downs are to be made same will be done in conformity with
standard methods of accounting."
Such statements, the "Times" noted, have not hitherto
been incorporated in applications. The Exchange, it is
4378
Financial Chronicle
reported, has asked listed companies to submit to it plans
for writing down assets, so that the committee on stock list
could express an opinion concerning the advisability of the
step. The Exchange, however, has not assumed the right
to veto the plans.
Sale at Auction in New York by Chase National Bank
of Collateral ;;Behind Loan to Continental Shares,
Inc.—Record Auction Sale.
In the largest security auction since 1929 the Chase National Bank of New York on June 12 realized more than 823,240,000 in selling the collateral behind its loan to Continental
Shares, Inc. With regard thereto we quote the following
from the New York "Times" of June 13:
The loan, originally approximately $33,500,000, had been reduced to about
$27,000,000. A total of 1,837,373 shares in thirteen companies was disposed of, most of which were bought by the Chase Bank. Two blocks went
at prices even with the market, while one-half of the remaining blocks were
taken above that level and the other half below it.
Not until after noon was it known whether the sale would be allowed to
proceed as scheduled. At that time Federal Judge John C. Knox refused
to enjoin the bank from selling the collateral, denying a petition of Burke
Patterson, holder of 720 shares of the investment trust's stock. At 2 P. M.
Justice John L. Walsh also declined to grant a like injunction.
Only three blocks of stock were not bought in by the Chase Bank. One
block of 10,000 shares out of 65,000 of B. F. Goodrich common went to a
Wall Street broker, and two Canadian institutions took blocks of 506 shares
of the Bank of Nova Scotia and 1,236 shares of the Canadian Bank of Commerce. In none of these cases was the name of the purchaser revealed.
Included in the sales were blocks of stock representing working control
of the United Light and Power Corporation and 20% of the capital stock
of the Lehigh Coal and Navigation Company, which in turn owns 12% of
the common stock of the National Power and Light Corporation.
Comparisons With Market.
The following table shows the blocks sold and the aggregate price paid
for each block, compared with the market price yesterday or the latest
available market price:
Market.
No. Shs.
Bid.
Company.
$1,708,000
95,000 Republic Steel
$1,816,000
625,000
500,000 Cliffs Corporation
x625.000
939.000
62,368 United States Rubber
966.000
1,113,000
65,000 B. F. Goodrich
940,000
24,500 Harbison-Walker
557,000
551,000
1.769,000
1,787,000
54,796 Youngstown Sheet & Tube
2,521.000
2,521,000
98,400 Firestone
2.869,000
76.000 Goodyear
2.878.000
4.386,000
350.900 Lehigh Coal
4,430,000
448.667 United Light & Power "B"
5,047,000
*5,421,000
245,000
230.000
40.000 International Paper & Power "A"
510,000
488.000
170,000 International Paper & Power "B"_
750,000
300,000 International Paper & Power "Cr
787.000
121,000
y133,000
506 Bank of Nova Scotia
z182,000
1,236 Canadian Bank of Commerce
158,000
$21,843,000
Total
$23,240.000
x Book value as of Dec.31. * Two weeks ago. y Friday. z Saturday
In all cases the blocks offered were of various classes of common or
capital stocks. There were no preferred shares in the list. The sale was
the only one announced on loans made by banks to the trust, which was
sponsored originally by the Otis-Eaton interests of Cleveland. A bank in
Cleveland holds collateral for another loan, which was prorated among banks
in Ohio and here.
The Chase Bank received few offers for the stocks sold, although the
blocks were broken up into units of 10,000 shares or lees. There were 190
such units. Outside bidders appeared in only five cases.
Rivals for Lehigh Coal.
The only excitement in a long, wearisome auction, with the temperature
and humidity rising steadily, came when rival bidding for the Lehigh Coal
and Navigation Company's common stock began. The first block of 10,000
shares was bid for by four separate interests, the price going from 5 to 6,
6%,6%, 7, 7%, 8 and 81/
4. The second 10,000-share block brought a single
bid of 7%. The remaining thirty-two blocks of 10,000 each brought bids
of $5 a share, two of the bidders combining to make alternate offers and
conferring frequently as other bidders withdrew. The final block of 900
shares brought a bid of 5 from the same person who bid for the second block
at 7%.
There was dramatic suspense when the offer by blocks was followed by
an offer of all thirty-five blocks as a unit of 350,900 shares. The representative of the Chase Bank bid 12%.
"That let's us out," one of the active bidders for the separate blocks exclaimed as he and the other bidders departed. Two Stock Exchange firms
and an investment trust were reported to have been the bidders involved.
There was less interest when shares representing about 45% of the voting
stock of the United Light and Power Company was offered by blocks, the
Chase representative bidding 10% a share as the forty-five separate blocks
were offered in turn. When the 448,667 shares were offered as an entirety,
however, all three qualified bidders started to compete for the stock, the
price starting at 10% and going to 11%, a Chase bid, where it stuck. The
original Chase bid of $4,542,753 was thus pushed up to $5,047,504 by the
other bidders, who failed to identify themselves.
George T. Bishop, President of Continental Shares, as the representative
of Cleveland banks since the resignation of Cyrus S. Eaton in 1931, was
present at the beginning of the auction sale, but left after a few blocks
had been sold. He would make no comment on the sale, saying: "This
speaks for itself."
Similar Sale Recalled.
There has been a series of auction sales involving public utility and other
properties during the depression. The first in which control of a property
passed was the sale of Green Mountain Power Corporation at auction in
New York for $1,025,000 on Dec. 1 1931.
In December 1932, the Central Hanover Bank and Trust Company bought
at public auction, for $5,750,000, the important public utility securities it
held as collateral against defaulted loans to the National Public Service
Corporation. The New York Trust Company had previously advertised for
sale certain collateral under a loan to National Electric Power Company, but
withdrew the securities and later entered, with the Chemical, into a partial
reorganization plan.
In March 1933, the Chase National Bank bought for $4,068,000 utility
stocks held to secure loans to National Electric Power and Seaboard Public
June 24 1933
Service Corporation. The biggest single auction planned, that of the holdings of four New York banks in securities held to secure notes of Insull
Utility Investments and Corporation Securities Company, was to have
brought in $10,325,000 at the upset prices specified at the time, in May
1932. Legal actions have delayed this sale, which has not yet taken place.
Commenting on the sale in its June 18 issue, the "Times"
said:
A Record Auction Sale.
The biggest auction of securities since the depression began was held in
the Exchange Sales Room at 18 Vesey Street last Monday (June 12). Few
of the prospective bidders had anything to say after discovering that the
Continental Shares auction was not a bargain sale. Representatives of the
Chase National Bank had a telephone constantly connected to a Stock Exchange firm which was supplying them with the latest quotations from the
floor. This enabled them to bid at the market or better as each block of
stocks came up for gale. In fact, the sale brought $1,400,000 more than
the market prices. This was due chiefly to the fact that the stock market
was rushing up furiously while the sale was in progress. Some of the stocks
closed well above the prices bid at the auction between 2:15 and 2:45 P. M.,
the sale having started at 2 o'clock. The belief that there might be more
active bidding for the securities offered, which included shares in leading
steel, rubber, newsprint, utility and coal companies, was not borne out by
the events, and it was no doubt due to the attitude of the Chase not to
sacrifice anything at less than current market values. The bank itself bought
in virtually all the shares offered for sale in its behalf. .
Last week (page 4185) we published a statement made on
June 13 by Winthrop W. Aldrich, Chairman of the Governing
Board and President of The Chase National Bank of New
York, with reference to statement appearing in certain of
the morning newspapers in regard to the auction sale on
June 12 of securities held as collateral for loans from the
bank to Continental Shares, Inc.
New York Clearing House Lowers Interest Rate on
Time Deposits—Interest on Demand Deposits
Ceases—Latter Held to be Funds Payable Within
60 Days.
The New York Clearing House Association on June 21
announced that,effective June 22, the rate of interest on time
deposits would be 34 of 1%, compared with M of 1% previously. At the same time it was announced that under a
ruling of the Clearing House, deposits payable within 60 days
would be regarded as a demand deposit in fixing interest
rates. Except to mutual savings banks, no interest will
hereafter be paid by Clearing House members on demand
deposits. The rate to mutual savings banks which was cut
from M to WI% on June 2 continues unchanged at 3 of 1%.
Regarding the action of the Clearing House on June 21 the
New York "Herald Tribune" of June 22 said:
The change in deposit rate rulings made known yesterday by the Clearing
House Committee, of which George W. Davison, Chairman of the Board of
the Central Hanover Bank & Trust Co., is Chairman, represented a
further adjustment of the rate structure to conform with the conditions
created by the passage of the banking Act [Glass-Steagall] of 1933. This
Act forbids member banks to pay interest on demand deposits, with certain
exceptions, and stipulates that the Federal Reserve Board "shall from time
to time limit by regulation the rate of interest which may be paid by member banks on time deposits." . ..
It had not been generally realized that the banking Act made an exception
In the case of mutual savings banks and the smaller political sub-divisions.
The law has the following to say on these exceptions:
"Provided, however, that this paragraph (saying that 'no member bank
shall, directly or indirectly by any device whatsoever, pay any interest on
any deposit which is payable on demand') shall not apply to any deposit
of such bank which is payable only at an office thereof located in a foreign
country, and shall not apply to any deposit made by a mutual savings bank,
nor to any deposit made by or on behalf of any State, county,school district,
or other sub-division or municipality, with respect to which payment or
action is required under State law."
The notice issued June 21 by the Clearing House follows:
NEW YORK CLEARING HOUSE.
77-83 Cedar Street.
New York, Juno 21st 1933.
Dear Sir:—
Acting under the provisions of Section 2, Article XI of the Clearing House
Constitution, relating to interest on deposits to be paid by Clearing House
Institutions, we beg to advise you that the following maximum rates have
been fixed, effective as to demand deposits at the close of business Thursday, June 15th 1933, and as to time deposits Thursday, June 22nd 1933.
Your attention is called to the fact that by this ruling anything under
60 days certificate of deposit or 60 days' notice is a demand deposit In
fixing interest rates.
On Certificates of Deposit Payable Within
60 Days of Issue or Demand, and on Credit
Balances Payable on Demand or Within 60 Days
of Demand
To Banks, Trust Companies and Private
Bankers.
To Mutual
Savings
Banks.
0%
X%
On Certificates of Deposit
or Time Deposits, Which
by Their Terms are Payable
on or After 60 Days. But
Not More Than Six Months
From the Date of Issue or
Demand
To
Others.
0%
%
Certificates of deposit or time deposits payable more than six months
from date of issue or demand are not subject to regulation, as to rate of
interest payable, but are subject to other regulations, Including Ruling
No. 15.
By order,
GEORGE W. DAVISOY
Chairman,
Clearing House Committee
CLARENCE E. BACON, Manager.
Financial Chronicle
Volume 136
The above rates compare with the following which had
previously been in effect, as was noted in these columns
June 3, p. 3822.
On Certificates of Deposit Payable Within
90 Days of Issue or Demand, and on Credit
Balances Payable on Demand or Within 90 Days
of Demand
To Banks, Trust Companies and Private
Bankers.
Si%
To Mutual
Savings
Banks.
On Certificates of Deposit
or Time Deposits, Which
NI Their Terms are Payable
on or After 90 Days. But
Not More Than Six Months
From the Date of Issue or
Demand
To
Others.
Si%
With the passage of the Glass-Steagall Banking Bill (signed
by President Roosevelt on June 16) the Clearing House
issued under date of June 15 the following notice (made
public June 17) suggesting that member banks notify their
customers that under the act interest on demand deposits
would cease. The notice follows:
NEW YORK CLEARING HOUSE.
77-83 Cedar Street.
New York,June 15th 1933.
To the Members of the
New York Clearing House Association.
Gentlemen:
Under the provisions of the Banking Act of 1933 (as published in the
newspapers) the Federal Reserve Act has been amended with regard to the
payment of interests on deposits and we are advised by counsel that the
amendment becomes effective immediately upon the signing of the Act by
the President.
It is suggested that members send out notices to their customers with
special reference to the following provision of the Act:
"No member bank shall, directly or indirectly, by any device whatsoever.
pay any interests on any deposit which Is payable on demand." Section 11(b)
Very truly yours,
CLARENCE E. BACON.
Manager.
Government Depositaries No Longer Required to Pay
Interest on Public Moneys in Accordance With
Provision in Glass-Steagall Bank Act.
Notice has been issued by the Treasury Department that
interest payment is no longer required on daily Treasury
balances effective June 15. Indicating that this move
results from the inclusion in the Glass-Steagall Banking
Act of a provision making no longer necessary the payment
of interest by depositaries, the following circular was issued
June 19 by the Federal Reserve Bank of New York:
FEDERAL RESERVE BANK OF NEW YORK.
Fiscal Agent of the United States.
[Circular No. 1245, June 19 1933—Reference to 1932 Treasury
Department Circular No. 92, Revised.]
SPECIAL DEPOSITS OF PUBLIC MONEYS UNDER THE ACT OF
CONGRESS APPROVED SEPT. 24 1917, AS AMENDED.
To designated special depositaries of public moneys and all other banks
and trust companies in the Second Federal Reserve District:
Enclosed will be found a copy of the 1933 Second Supplement to Treasury
Department Circular No. 92 Revised, from which you will note that, in
view of the provisions of Section 11(b) of the Banking Act of 1933, the
caption "Interest on Deposits" and the paragraph thereunder in Treasury
Department Circular No. 92, dated Feb. 23 1932, as supplemented June 2
1933, with respect to the payment by special depositaries of interest on
War Loan Deposit Accounts at the rate of Si of 1% per annum, have been
eliminated, effective June 15 1933.
Accordingly, beginning June 15 1933, and thereafter, special depositaries
will not be required to pay interest on daily balances in War Loan Deposit
Accounts. Special depositaries should, however, compute interest on
War Loan Deposit Accounts at the rate of Si of 1% per annum to and
Including June 14 1933.
GEORGE L. HARRISON, Governor.
The Treasury Department's announcement follows:
TREASURY DEPARTMENT.
Office of the Secretary.
11933—Second Supplement to Department Circular No. 92 Revised—
Accounts and Deposits.]
SPECIAL DEPOSITS OF PUBLIC MONEYS UNDER THE ACT OF
CONGRESS APPROVED SEPT. 24 1917, AS AMENDED.
Washington, June 14 1933.
To Federal Reserve Banks and other banks and trust companies incorporated
under the laws of the United States or of any State:
In view of the provisions of Section 11(b) of the Banking Act of 1933.
Treasury Department Circular No.92.dated Feb.23 1932. as supplemented
June 2 1933, is hereby further amended so as to eliminate the caption
"Interest on Deposits" and the paragraph thereunder which reads as follows:
"Until further notice, each depositary will be required to pay interest
at the rate of SI of 1% per annum on daily balances."
Accordingly, beginning June 15 1933 and thereafter, special depositaries
designated under the terms of Treasury Department Circular No. 92, dated
February 23 1932, as supplemented June 2 1933, will not be required to
pay interest on daily balances in "War Loan Deposit Accounts."
DEAN ACHESON, Acting Secretary of the Treasury.
Early the current month action was taken toward reducing
of 1% to 3,4 of 1% the rate required to be paid by
from
Government depositaries, the change having been scheduled
to go into effect on June 15. Notice of the proposed change
appeared in these columns June 10, page 4006. The 3,1, of
1% rate, however, never became operative, since the
elimination of interest was made effective June 15. The
4379
lowering of the rate from 1% to M of 1% occured in May
1931, reference thereto appeared in our May 30 1931 issue,
page 3985, at which time it was noted that the rate had
gradually been reduced from 2%.
Interest Payments on Deposits by Federal Reserve
Member Banks—Federal Reserve Board's Rulings
Respecting Provisions in Glass-Steagall Banking
Act,
The Federal Reserve Board has issued instructions for
the guidance of member banks as to the course to be pursued
in the observance of the provision in the new Glass-Steagall
Banking Act which forbids member banks to pay interest
on demand deposits after June 16 1933. The Board,
among other things, states that "member banks may continue to pay interest on time deposits in accordance with
their usual practilie . . ,until the Federal Reserve Board
issues regulations on the subject." The Board's instructions were made known in the following circular dated
June 22, issued by Governor Harrison of the New York
Federal Reserve Bank:
FEDERAL RESERVE BANK OF NEW YORK
[Circular No. 1249, June 22 1933.1
INTEREST PAYMENTS ON DEPOSITS BY MEMBER BANKS
To all Member Banks in the Second Federal Reserve District:
For your information, we quote below from a telegram received from
the Federal Reserve Board concerning certain of the provisions of Section
19 of the Federal Reserve Act, as amended by Section 11(b) of the Banking
Act of 1933, regarding payment of interest on deposits.
(a) Except as indicated below, the law forbids member banks to pay
interest on demand deposits after June 16 1933: but interest accrued on
or before that date may be paid.
(b) The law does not prohibit payment of interest in accordance with
the terms of any certificate of deposit or other contract previously entered
Into in good faith and in force on June 16 1933.
(c) No such certificate of deposit or other contract may be renewed or
extended without eliminating provision for payment of interest on demand
deposits; and all such contracts must be modified as soon as possible consistently with bank's contractual obligations so as to eliminate payment
of interest on demand deposits. If contract is subject to modification
or cancellation at option of bank it must be modified as soon as possible.
(d) Prohibition against payment of interest on demand deposits, however. is not applicable to deposits payable only at an office of a member
bank located in a foreign country nor to any deposit made by a mutual
savings bank nor to any deposit of public funds made by or on behalf of
any State, county, school district, or other subdivision or municipality,
with respect to which payment of interest is required under State law.
(e) This exemption is not applicable to deposits of receivers of insolvent
State or National banks, since they are not public funds.
(f) Deposits of public funds of the United States Government are not
exempted and Treasury has amended its Circular No.92 so as not to require
Payment of interest on balances in war loan deposit accounts and Is considering similar amendments to other circulars.
(g) The Federal Reserve Board is not authorized to grant member
banks permission to pay interest on demand deposits.
(h) Member banks may continue to pay interest on time deposits in
accordance with their usual practice or existing bona fide contracts until
the Federal Reserve Board issues regulations on the subject. Preparation
of such regulations requires investigation, study and careful consideration
of practical and economic effects, but such regulations will be promulgated
as soon as practicable. Views of all Federal Reserve Banks on this subject
have been requested and will be given consideration before regulations
are promulgated.
(I) The meaning of provision re waiving requirement of notice before
payment of savings deposits requires further study and will have to be
covered by a later ruling or by provision of a regulation.
(j) Prohibition against payment of interest is applicable only to deposits which are "payable on demand" and therefore subject to such regulations as the Board may prescribe. Interest may be paid until maturity
on deposits which are originally bona fide time deposits although such
deposits have become payable within 30 days and for that reason alone
are classified under existing regulations as "Demand Deposits" for purpose of computing reserve's.
(k) Since provisions regarding payment of interest on deposits are
incorporated in Section 19 of the Federal Reserve Act, definitions contained in Section II of the Federal Reserve Board's Regulation D should
be considered in determining what are time deposits pending issuance
of further regulations on this subject.
GEORGE L. HARRISON. Governor.
In its issue of June 17 the New York "Times" said:
Depositors in the 7,000 member banks of the Federal Reserve System
throughout the country received no interest yesterday on their demand
deposits. This was the first concrete result of the signing of the GlassSteagall bank bill by President Roosevelt.
The bill, which prohibits the payment of interest on demand deposits,
became effective shortly before noon, when it was signed by the President.
However, since the law takes no account of fractions of days, bankers
here ruled that no interest should be paid at all for yesterday.
The loss of interest to depositors of New York City member banks
amounts to roughly $50.000 a day, or Si of I% on about $7,000.000.000
of demand deposits. For all depositors, who have about 815,000,000,000 of
demand deposits in member banks, the day's loss of interest may amount
to 8200,000 to $400,000, no accurate estimate being possible because of
the wide variation of rates paid.
The suspension of interest took place automatically. Some banks have
decided to advise their customers by letter: others assume that the customers are acquainted with the law.
New Offering of $75,000,000 or Thereabouts of 91-Day
Treasury Bills Dated June 28 1933.
On June 21 Acting Secretary of the Treasury Acheson
invited tenders to a new offering of 91-day Treasury bills
to the amount of $75,000,000 or thereabouts to be sold on
4380
Financial Chronicle
a discount basis to the highest bidders. The bills, the
Secretary's announcement said, will be dated June 28, and
will mature Sept. 27 1933, and on the maturity date the
face amount will be payable without interest. Bids to the
bills, which will be used to meet an issue of $100,158,000
maturing on June 28, will be received at the Federal Reserve
Banks, or the branches thereof, up to 2 p. in., (Eastern
Standard time), Monday, June 26. Tenders will not be
received at the Treasury Department, Wash. Mr. Acheson's
announcement continued in part:
They (the bills) will be issued in bearer form only, and in amounts or
denominations of 31,000, $10,000, $100,000, $500,000, and $1,000,000
(maturity value).
No tender for an amount less than $1,000 will be considered. Each tender
must be in multiples of 81.000. The price offered must be expressed on
the basis of 100 with not more than three decimal places. e. g., 99.125.
Fractions must not be used.
Tenders will be accepted without cash deposit from incorporated banks
and trust companies and from responsible and recognized dealers in investment securities. Tenders from others must be accompanied by a deposit of 10% of the face amount of Treasury bills applied for, unless the
tenders are accompanied by an express guaranty of payment by an incorporated bank or trust company.
Immediately after the closing hour for receipt of tenders on June 26
1933, all tenders received at the Federal Reserve Banks or branches thereof
up to the closing hour will be opened and public announcement of the acceptable prices will follow as soon as possible thereafter, probably on the
following morning. The Secretary of the Treasury e<pressly reserves the
right to reject any or all tenders or parts of tenders, and to allot less than
the amount applied for, and his action in any such respect shall be final.
Those submitting tenders will be advised of the acceptance or rejection
thereof. Payment at the price offered for Treasury bills allotted must be
made at the Federal Reserve Banks in cash or other immediately available
funds on June 28 1933.
The Treasury bills will be exempt, as to principal and interest, and any
gain from the sale or other disposition thereof will also be exempt, from
all taxation, except estate and inheritance taxes. No loss from the sale or
other disposition of the Treasury bills shall be allowed as a deduction, or
otherwise recognized, for the purposes of any tax now or hereafter imposed
by the United States or any of its possessions.
Tenders Totaling $240,273,C00 Received to Offering
of S100,000,000 or Thereabouts of 91-Day Treasury
Bills Dated June 21—:$100,361,000 Accepted at
Average Rate of 0.24%.
Announcement was made on June 19 by Secretary of the
Treasury William H. Woodin that tenders totaling $240,273,000 had been received to the offering of $100,000,000
or thereabouts of 91-day Treasury bills, dated June 21, on
which bids were received up to 2 p. m., (Eastern Standard
time), that day, at the Federal Reserve Banks and their
branches. Of the bids received, Secretary Woodin announced, 8100,361,000 was accepted at prices ranging from
0.18 to 0.30% per year. The average price of the bills to
be issued is 99.939, and the average rate is about 0.24%
per annum on a bank discount basis. This compares with
previous rates of 0.27% (bills dated June 7); 0.42% (bills
dated May 24), and 0.45% (bills dated May 17). The
announcement of the offering of the bills dated June 21
appeared in our issue of June 17, page 4190.
June 24 1933
_ _
prior to the signing of the confirmation order. The Washington Post Publishing Co., Mr. Hamilton stated, has a
paid-in capital and surplus of $1,250,000. Mr. Meyer is
President of the company, Mrs. Meyer, Vice-President, and
Floyd R. Harrison, Secretary-Treasurer. The "Post" was
formerly owned by Edward B. McLean. The following
statement, authorized by Mr. Meyer, was contained in the
"Post" of June 13:
It will be my aim and purpose steadily to improve "The Post" and to
make it an even better paper than it has been in the past. It will be conducted as an independent paper devoted to the best interests of the people
of Washington and vicinity, and hopes to have their interest and suppost.
I think I should, in this connection, make it clear that, in purchasing
"The Post," I acted entirely on my own behalf, without suggestion from
or discussion with any person, group or organization.
War Department to Save $49,000,000 on Military Activities in Fiscal Year 1934—Secretary Dern Sees
Expenditures of $225,000,000 Instead of $274,000,000
Appropriated—No Reduction in Personnel Contemplated.
The War Department will spend only $225,000,000 on its
military activities during the fiscal year 1934, instead of the
$274,000,000 appropriated, according to an announcement
by Secretary of War Dern on June 17. The saving of $49,000,000, Secretary Dern indicated, would be accomplished
by limiting training activities, living expenses, maintenance,
and operating costs, material and equipment. His statement
follows:
By Executive action the War Department appropriation for its military
and departmental activities for the fiscal year 1934 has been definitely
fixed. The sum total of the items amounts to approximately $225,000.000.
Within the limitation of funds every effort has been made to absorb the cuts
so as to minimize the impairment of National defense as much as possible.
The detailed analysis of reductions discloses that the retrenchments relate
primarily to living expenses, maintenance and operation costs, material and
new equipment, with some curtailment of training activities and overhead
civilian personnel. All components of the army of the United States will
have less funds. However, each is retained without reduction in its fighting
personnel.
The regular army will omit its normal field training activities including
target practice, will reduce its flying training, suspend many of its supply,
arsenal and depot activities, its research and development studies, its reequipment, including aircraft, and its armament activities as well as
certain curtailments in its motor and animal programs.
It will also have to reduce expenditures for its employees and clerks.
Field employees at arsenals, depots and posts will be seriously affected.
The National Guard will retain its existing personnel and be able to
conduct all field and partial armory training. While the National Guard
will have to suspend some of its activities, it is estimated that the funds
available will permit two weeks'field training and at least 12, and probably
20, armory. training drills.
The Reserve Officers Training Camps will be maintained, but with
curtailment in supplies, uniforms, equipment and also with about one-third
reduction in its summer training camps activity.
The Organized Reserve is now associated with the regular army in
the Civilian Conservation Corps work in so far as there is a shortage of
regular army officers for this work. As most of the Reserve Officers associated with the Civilian Corps are of junior grades, some funds have been
reserved which will permit the training of a few of the key field officers of
the Reserve Corps, in accordance with the annual program of training for
Organized Reserves.
The Citizens Military Training Camps will be held as scheduled, but with
a reduction in attendance to meet the limited funds available. This reduction will limit all training to candidates who have had previously at
least one summer's training in the Citizens Military Training Camps.
The army school system, which provides schooling for all components,
including West Point and air cadets, will continue.
The following economy instructions were broadcast throughout the army:
"Field training and target practice for the regular army will be suspended
during the fiscal year 1934, except that recruits will fire such courses as are
deemed necessary to become reasonably proficient in the use ofsmall arms.
"Additional compensation for qualification in arms will be continued
during the fiscal year 1934 only to the extent necessary to compensate for
one year after date of qualification those men who are qualified and authorized to receive such compensation on June 20 1933. Detailed instructions
will follow.
"It is contemplated that army schools be re-opened in the fall. Detailed
Instructions with regard to personnel will follow in due course.
"National Guard will hold its annual two weeks' field training and
not less than 12 armory drills for each organization, generally distributed
evenly throughout the fiscal year 1934.
"Limited expenditures for 14-day training of reserve officers will be
specifically authorized later. No change in Reserve Officers Training Corps
and Citizens Military Training Corps summer training already covered in
radiogram June 10 1933."
President Roosevelt Leaves Washington on First Vacation—Sets Sail from Cape Cod, Navigating Small
Schooner, with New Brunswick as Destination.
President Roosevelt left Washington on June 16 for 'his
first vacation since he assumed office on March 4. The
President planned to spend the greater part of his holiday
on a sailing trip from Cape Cod to Campobello Island, N. B.,
and expected to leave the latter place around the end of
June, returning to Washington on the cruiser Indianapolis.
Mr. Roosevelt left Washington by train and arrived in Boston on June 17. He then traveled by automobile to Groton,
where he called on his son Franklin Jr. and continued on to
Marion, Mass., where he boarded the small schooner Amberjack II. On the following day (June 18) the schooner, navigated by the President, began the sea voyage. Mr. Roosevelt was accompanied by his son, James, and a small crew.
In the first two days of the ocean trip the ship encountered
rough weather.
President Roosevelt Explains Federal Relief Plan to
Governors and Other State Executives at WashWashington "Post" Bought by Eugene Meyer Former
ington Conference—Asks Full Co-operation with
Governor of Federal Reserve Board.
National Aid Operations—Program Does Not
George E. Hamilton Jr., who bid $825,000 for the WashInclude "Useles3 Projects."
ington (D. C.) "Post" at a public auction, held June 1 by
State relief executives and eight Governors who met In:
a decree of the District Supreme Court,announced on June 12 Washington on June 14 to discuss with Harry L. Hopkins,
that in bidding he represented Eugene Meyer, formerly Federal Relief Administrator, the administration's plan for
Governor of the Federal Reserve Board. In his announce- handling work proposed in the Wagner $500,000,000 aid bill,
ment, issued following the signing of an order by Justice
were told by President Roosevelt that the Federal Govern-:
Proctor of the court confirming the sale, Mr. Hamilton said ment in its relief work expects complete co-operation by,
that Mr. Meyer is the sole stockholder of the Washington every State within its borders. The President urged the crea-;
Post Publishing Co., organized for the purpose of taking tion of a relief organization in each State to co-ordinate aid,
title' to the property and continuing the publication of the "in a business-like way but entirely apart from partisan'
paper. Mr. Hamilton's bid was transferred to this company politics," and he also issued a warning that the public works,
Volume 136
Financial Chronicle
program does not mean the building of "a lot of useless
projects in the disguise of relief." The part to be played by
the Federal Government was defined by the President as one
exof co-operation "in reasonable proportion" to the total
to
statement
his
In
themselves.
States
penditures by the
the visitors at the White House, after their conference with
Mr. Hopkins, the President said:
The President's Statement.
Federal Government's
The Emergency Relief Act is an expression of the
communities with redetermination to co-operate with the States and local
gard to financing emergency relief work.
local units of GovIt means just that. It is essential that the States and
Federal Government
ernment do their fair share. They must not expect the
total.
to finance more than a reasonable proportion of the
and by the 5,000 local
It should be borne in mind by the State authorities
that there are 4,relief committees, now functioning throughout the land,
000,000 families in need of the necessities of life.
responsiObviously the Federal Relief Administrator should put as much
competent setbility as possible on the State administration. This means a
or six well-known citizens,
up in each State, preferably a commission of five
but entirely
who will not only administer the relief in a business-like way
be assured
apart from partisan politics. The only way relief officials can
administrathat people are getting relief who need relief is to have competent
tion.
It is essential that there be effective co-ordination of relief and public
works in all communities. While an important factor in setting up a public
works program is speed, there is no intention of using the public works funds
simply to build a lot of useless projects disguised as relief.
It is the purpose to encourage real public works. One function of public
works in an emergency is to provide a bridge by which people can pass from
relief status over to normal self-support. Partisan policies must play no
part in the carrying out of this work.
The use of public works as a means of rational redistribution of population from congested centres to more wholesome surroundings where people
can have a chance to lead normal life will be encouraged.
It is a primary purpose of my administration to co-operate with the States
and with industry to secure work opportunities for as many of the unemployed as possible, by which they will find employment through normal
channels. But until those jobs are available the Federal Government, States
and every local community must provide relief for every genuinely needy unemployed person in America.
I know that I can count on your full and complete co-operation with the
Federal Emergency Relief Administrator and I can assure you on his behalf
of a sympathetic understanding of your problems and of decisive action
when that is necessary.
The President also added some informal remarks in which
he paid tribute to Mr. Hopkins as follows:
Three years ago, when I was Governor of New York, we passed a perfectly
unheard-of relief bill in the amount of $25,000,000 for one year's expenditures, and Harry Hopkins took charge of it. We did a great deal and I
learned a lot from him and his work. That is why I brought him to Washington when we started on this particular angle.
During the campaign both parties made it fairly clear that there was a
certain principle involved and that is this: The first step, taking care of
people out of work, people lacking housing, clothing or food—the first charge
Is against the locality and then, if the locality has done everything it possibly can, then it is the duty of the State to step in and do all the State
can possibly do, and then there is an obligation on the Federal Government,
hence the Federal Relief Bill.
Now we are attacking, as you know, on a good many fronts at the same
time. •We have got not only this actual relief fund of the Federal Government, which is to supplement the work of the localities and of the States,
but we are helping to improve things through three or four other measures
that are going to count very heavily in putting people to work. You all
know about the reforestation camps.
We actually have more than 235,000 men enrolled in these camps at the
present time. By the 15th of July we will have 275,000 people, all actually
at work in the woods. It is a good record, I think, and can be compared
with the mobilization carried on in 1917.
Then there is the bill passed yesterday, which gives us two other good
measures whith will afford relief. The first is the section of the bill relating to industrial control. We are going to get that started as fast as it is
humanly possible.
To give you an illustration, it has been estimated by the cotton industry
alone that the code they are going to propose to us, through the shortening
of hours alone, will put to work about 130,000 more people than are working at the present time.
That is just one industry. It will be a big help.
If all the major industries within a month or two do the same thing, it
means we will have several million more people back at work. Then, there
is the public-works end of the bill.
In it is the largest peace-time appropriation ever passed in the history
of any country in the world—$3,300,000,000—for public works of various
kinds.
Part of it is for highways, part for Federal projects, for State projects,
for municipal projects, &c.
The object is to spread those public works relatively in proportion to
the need in the various parts of the country and to get people started on
work which will use the largest percentage of actual labor and the smallest
percentage of expenditures that do not go into labor.
That will get started within a short period of time.
The result is that on your relief program you are going to find that your
task will be getting easier and easier as time goes on.
Now, then, on this $300,000,000 the Federal Government is putting up
for relief, I think I should make it perfectly clear again that it is only to
be used where it is honestly shown that the localities have done everything
that they possibly can be asked to do, both through local and private charity
and public appropriations, that the State Governments have done everything
they can possibly do.
Then, if additional funds are needed, that is where the Federal Government comes in.
We also quote from a Washington dispatch of June 14 to
the New York "Times" regarding the suggestions made to the
Governors and relief executives by Mr. Hopkins:
4381
funds should be
In opening his conference, Mr. Hopkins said the Federal
co-operation of
administered by official public units, but appealed for the
private agencies.
competent
He suggested a nonpartisan commission overseeing the work of
the Federal
persons whose appointment and salaries would be approved by
Relief Administrator.
have to
Mr. Hopkins made it clear that money for hospital work would
come from private funds.
in
Wagner
the
money
He also stated that the $250,000,000 of so-called free
were
Bill would be allotted only when States could demonstrate that they
at the end of their resources so far as raising funds by local bond issues or
taxation was concerned.
Court Holds Salary Cut, aslMade Under Federal
Economy Act, Is Valid—Dismisses Action by Letter
Carrier to Get Full Pay.
A decision upholding as valid the Federal Economy Aet,
which was passed March 20 and which gave the President
the power to reduce salaries of Government employees,
was handed down on June 14 by Judge Mortimer W. Byers
in Brooklyn Federal Court. An abstract of the case, as
given in the New York "Times" on June 15, follows:
substitute
The Court dismissed the action of Nathan Amchanitzky, a
of
letter carrier, to compel Acting Postmaster John A. T. Carrougher
first half
the
during
Brooklyn to pay him $30.84 for services performed
Mr.
of the month of April. Under the provisions of the Economy Act
accept.
Amchanitzky received a check for $26.07, which he refused to
Mr. Amchanitzky, in his complaint, contended the Economy Act was
unconstitutional because Congress therein delegated a legislative function
to the Executive. After the complaint was served on the acting postmaster, the Government made a motion for dismissal on the ground that
of
it did not contain a statement of facts sufficient to constitute a cause
action and that the Court lacked jurisdiction.
Post-Office Department to Save $9,500,000 by Enforced
Nine-Day Furloughs Without Pay, and Cut in
Equipment and Maintenance Allowance of Rural
Carriers—Economy Move Effective July 1.
reavings of 89,500,000 will be realized under an order by
Postmaster-General Farley which was signed by President
Roosevelt on June 16, and which specifies nine-day furloughs
without pay for postal employees, beginning July 1 and effective until Sept. 30. In a statement issued by Mr. Fa ley
on June 18, it was indicated that in addition to the enforced
furloughs, the equipment and maintenance allowance of
rural carriers will be reduced from 4 cents to 1.176 cents a
mile during the three months. This is the initial economy
step to be taken by the Post-Office Department under
authority of the Independent Offices and Economy Acts.
'
Postmaster-General Farley had the following to say:
Whether the furloughs and the reduced allowances for rural carriers will
the future
be continued beyond Sept. 30, will depend very largely upon
trend of post-office business. Mall volume is now pickicg up. The postal
end of
revenues are increasing. It is the department's hope that by the
September business conditions throughout the country will hal e so improved
handle the
as again to require a full complement of postal employees to
of the
work, and, of course, eliminate the necessity for a continuation
furloughs.
we
altogether,
If conditions do not justify abandoning the furlough
September
certainly expect that we can at least reduce it somewhat after the
quarter.
in the rural
The department is calling upon every employee, except
not affect
mail service to make this sacrifice. While the present order does
Every
order.
later
a
in
departmental employees, they will be included
one form or
post-office employee will be called upon to take this cut in
another.
being asked
Rural mail carriers whose positions cannot be furloughed are
allowances. It is
to make their sacrifice in the reduction of their equipment
contribute
materially
will
action
our confident hope that the result of this
of
not only to the balancing of the budget, but also the economic restoration
the country.
normal
by
We lose about 5,000 employees a year in the Federal service
possibly can,
separations. Our policy in the post-office will be. as far as we
personnel
surplus
our
until
payroll
the
to retain all efficient employees on
volume picks
has been eliminated by these normal separations, or until
up, meantime making the saving demanded by the general economy program by furloughs and not by outright dismissals.
Executive Orders Issued by President Roosevelt Putting
into Effect Industrial Control and Public Works
Administration Under Industrial Recovery Act—
Hugh Johnson Named Administrator for Industrial
Recovery—Colonel Donald H. Sawyer Federal
Emergency Administrator of Public Works.
On June 16 the following executive orders were issued by
President Roosevelt (according to Washington advices to the
New York "Herald Tribune") setting up the Industrial Control and Public Works administrations:
EXECUTIVE ORDER.
Pursuant to the authority of "an Act to encourage national industrial recovery, to foster fair competition, and to provide for the construction of
certain useful public works, and for other purposes," approved June 16 1933,
and in order to effectuate the policy set forth in Title 1—Industrial recovery
of said Act:
1. I hereby appoint Hugh Johnson to be the Administrator for Industrial
Recovery under said Title 1 of said Act.
2. I hereby appoint a Special Industrial Recovery Board to be composed of
the following members: The Secretary of Commerce, Chairman ; the Attorney-General; the Secretary of Agriculture; the Secretary of Labor' the
Director of the Budget; the Administrator for Industrial Recovery; the
Chairman of the Federal Trade Commission.
4382
Financial Chronicle
The Administrator during the ensuing 30 days shall have authority, subject to the general approval of the Special Industrial Recovery Board, to
appoint the necessary personnel on a temporary basis to conduct hearings and
to do such other and necessary work as authorized under Title 1 of said Act.
FRANKLIN D. ROOSEVELT.
The White House, June 16 1933.
EXECUTIVE ORDER.
Pursuant to the authority of "an Act to encourage national industrial recovery, to foster fair competition, and to provide for the construction of
certain useful public works, and for other purposes," approved June 16 1933,
and in order to effectuate Title 11—public works and construction projects—
thereof;
1. I hereby appoint Colonel Donald H. Sawyer to exercise temporarily the
office of Federal Emergency Administrator of Public Works.
2. I hereby appoint a Special Board for Public Works, consisting of the
following: The Secretary of the Interior, Chairman; the Secretary of War,
the Attorney-General, the Secretary of Agriculture, the Secretary of Commerce, the Secretary of Labor, the Director of the Budget, Colonel George
R. Spalding.
During the ensuing 30 days the Federal Emergency Administrator of
Public Works shall have authority to allot the sum of not to exceed $400,000,000 provided for in Title 11 of said Act for highway building for distribution among the States, Territories and the District of Columbia, and
authority to allot the sum of not to exceed $238,000,000 to the Department of
the Navy for the construction of certain vessels, the construction whereof
conforms to the London Naval Treaty and has heretofore been approved
by me.
The distribution of the money herein allocated for public roads shall be
subject to the approval of the Board of Public Works.
The Federal Emergency Administrator of Public Works is hereby authorized to employ such necessary personnel on a temporary basis as may be
approved by the Board.
During the next 20 days it shall be the duty of the Federal Emergency
Administrator of Public Works and the Board herein constituted to study
and report to me on all public works projects which have heretofore been
submitted or shall hereafter be submitted.
FRANKLIN D. ROOSEVELT.
The White House, June 16 1933.
Statement by President Roosevelt Explaining Purposes
of National Industrial Recovery Act—Calls New
Law Challenge to Capital and Labor to Co-operate
in Program—Sees Opportunity to Put Millions
Back to Jobs This Summer—General Hugh Johnson
Appointed Industrial Control Administrator.
Shortly after signing the National Industrial Recovery Act
on June 16, President Roosevelt issued a statement in which
he explained the purposes of the measure, and outlined in
general terms the machinery that will be employed to place
the legislation in operation. In his statement the President
also announced the appointment of General Hugh Johnson as
Administrator, under the industry control section of the Act,
and said that it was his "hope that the 10 major industries
which control the bulk of industrial employment can submit
their simple basic codes at once and that the country can
look forward to the month of July as the beginning of our
great national movement back to work." The President
added that "the Act proposes to our industry a great spontaneous co-operation to put millions of men back to their
regular jobs this summer." He stressed the fact that the
legislation is a challenge to industry, which has long insisted
that, given the right to act in unison,it could do much for the
general good which has heretofore been unlawful. It is a
challenge also to labor, he declared, for the workers are
given a new charter of rights long sought and hitherto denied, and they will be expected to co-operate with their employers. The adoption of the bill by Congress and its approval by Congress was noted in our issue of June 17, page
4196. President Roosevelt's statement of June 16 follows:
The law I have just signed was passed to put people back to work, to let
them buy more of the products of the farm and factories, and start our business at a living rate again. This task is in two stages—first, to get many
hundreds of thousands of unemployed back on the payroll by snowfall, and
second, to plan for a better future for the longer pull. While we shall not
neglect the second, the first stage is an emergency job. It has the right
of way.
The second part of the act gives employment by a vast program of public works. Our study shows that we should be able to hire many men at
once and to step up to about 1,000,000 new jobs by October 1 and a much
greater number later. We must put at the head of our list those works
which are fully ready to start now. Our first purpose is to create employment as fast as we can but we should not pour our money into unproved
projects.
We have worked out our plans for action. Some of it will start tomorrow. r am making available $400,000,000 for State roads under regulations which I have just signed and I am told that the States will get this
work under way at once. I have also just over $200,000,000 for the Navy
to start building ships under the London treaty.
In my inaugural I laid down the simple proposition that nobody is going
to starve in this country. It seems to me to be equally plain that no
business which depends for existence on paying less than living wages to
its workers has any right to continue in this country. By "business" I
mean the whole of commerce as well as the whole of Industry; by workers
I mean all workers—the white collar class as well as the men in overalls ;
and by living wages I mean more than a bare subsistence level—I mean the
wages of decent living.
Throughout industry, the change from starvation wages and starvation
employment to living wages and sustained employment can in large part
be made by an industrial covenant to which all employers shall subscribe.
It is greatly to their interest to do this because decent living, widely spread
among our 125,000,000 people, eventually means the opening up to industry
June 24 1933
of the richest market which the world has known. It is the only way to
utilize the so-called excess capacity of our industrial plants. This is the
principle that makes this one of the most important laws that ever came
from Congress because, before the passage of this act, no such industrial
covenant was possible.
On this idea, the first part of the act proposes to our industry a great
spontaneous co-operation to put millions of men back in their regular jobs
this summer. The idea is simply for employers to hire more men to do the
existing work by reducing the work-hours of each man's week and at the
same time paying a living wage for the shorter week.
No employer and no group of less than all employers in a single trade
could do this alone and continue to live in business competition. But if
all employers in each trade now band themselves faithfully in these modern
guilds—without exception—and agree to act together and at once, none
will be hurt and millions of workers, so long deprived of the right to earn
their bread in the sweat of their labor, can raise their heads again. The
challenge of this law is whether we can sink selfish interest and present
a solid front against a common peril.
It is a challenge to industry which has long insisted that, given the
right to act in unison, it could do much for the general good which has
hitherto been unlawful. From to-day it has that right.
Many good men voted this new charter with misgivings. I do not share
these doubts. I had part in the great co-operation of 1917 and 1918 and
It is my faith that we can count on our industry once more to join in our
general purpose to lift this new threat and to do it without taking any
advantage of the public trust which has this day been reposed without stint
in the good faith and high purpose of American business.
But industry is challenged in another way. It is not only the slackers
within trade groups who may stand in the path of our common purpose. In
a sense these groups compete with each other, and no single industry, and
no separate cluster of industries, can do this job alone for exactly the same
reason that no single employer can do it alone. In other words, we can
imagine such a thing as a slacker industry.
This law is also a challenge to labor. Workers, too, are here given a new
charter of rights long sought and hitherto denied. But they know that the
first move expected by the nation is a great co-operation of all employees, by
one single mass-action, to improve the case of workers on a scale never
attempted in any nation. Industries can do this only if they have the
support of the whole public, and especially of their own workers. This is
not a law to foment discord, and it will not be executed as such. This is
a time for mutual confidence and help, and we can safely rely on the sense
of fair play among all Americans to assure every industry which now moves
forward promptly in this united drive against depression that its workers
will be with it to a man.
It is, further, a challenge to administration. We are relaxing some of the
safeguards of the anti-trust laws. The public must be protected against the
abuses that led to their enactment, and to this end, we are putting in place of
old principles of unchecked competition some new Government controls.
They must above all be impartial and just. Their purpose is to free business
—not to shackle it—and no man who stands on the constructive forwardlooking side of his industry has anything to fear from them. To such men
the opportunities for individual initiative will open more amply than ever.
Let me make it clear, however, that the anti-trust laws still stand firmly
against monopolies that restrain trade and price fixing which allows profits
or unfairly high prices.
If we ask our trade groups to do that which exposes their business, as
never before, to undermining by members who are unwilling to do their
part, we must guard those who play the game for the general good against
those who may seek selfish gains from the unselfishness of others. We must
protect them from the racketeers who invade organizations of both employers and workers. We are spending millions of dollars and if that spending is really to serve our ends it must be done quickly. We must see that
our haste does not permit favoritism and graft. All this is a heavy load
for any Government and one that can be borne only if we have the patience,
co-operation, and support of people everywhere.
Finally, this law is a challenge to our whole people. There is no power
In America that can force against the public will such action as we require.
But there is no group in America that can withstand the force of an aroused
public opinion. This great co-operation can succeed only if those who bravely
go forward to restore jobs have aggressive public support and those who lag
are made to feel the full weight of public disapproval.
Machinery To Place Legislation In Operation.
As to the machinery—the practical ways of accomplishing what we are
setting out to do, when a trade association has a code ready to submit and
the association has qualified as truly representative, and after reasonable
notice has been issued to all concerned, a public hearing will be held by the
Administrator or a deputy. A Labor Advisory Board appointed by the
Secretary of Labor will be responsible that the affected labor group, whether
organized or unorganized, is fully and adequately represented in an advisory capacity and any interested labor group will be entitled to be heard
through representatives of its own choosing. An Industrial Advisory Board
appointed by the Secretary of Commerce will be responsible that every
affected industrial group is fully and adequately represented in an advisory
capacity and any interested industrial group will be entitled to be heard
through representatives of its own choosing. A Consumers Advisory Board
will be responsible that the interests of the consuming public will be represented and every reasonable opportunity will be given to any group or
class who may be affected directly or indirectly to present their views.
At the conclusion of these hearings and after the most careful scrutiny by
a competent economic staff the Administrator will present the subject to
me for my action under the law.
I am fully aware that wage increases will eventually raise costs, but I
ask that managements give first consideration to the improvement of operating figures by greatly increased sales to be expected from the rising purchasing power of the public. That is good economics and good business. The
aim of this whole effort is to restore our rich domestic market by raising
its vast consuming capacity. If we now inflate prices as fast as far as we
increase wages, the whole project will be set at naught. We cannot hope
for full effect of this plan unless, in these first critical months, and, even
at the expense of full initial profits, we defer price increases as long as
possible. If we can thus start a strong sound upward spiral of business
activity our industries will have little doubt of black-ink operations in the
last quarter of this year. The pentup demand of this people is very great
and if we can release it on so broad a front, we need not fear a lagging recovery. There is greater danger of too much feverish speed.
In a few industries, there has been some forward buying at unduly depressed prices in recent weeks. Increased costs resulting from this Government-inspired movement may make it very hard for some manufacturers and
jobbers to fulfill some of their present contracts without loss. It will be
a part of this wide industrial co-operation for those having the benefit of
Volume 136
Financial Chronicle
these forward bargains (contracted before the law was passed) to take the
initiative in revising them to absorb some share of the increase in their
suppliers' costs, thus raised in the public interest. It is only in such a
willing and considerate spirit, throughout the whole of industry, that we
can hope to succeed.
Hugh Johnson Administrator.
Under Title One of this Act, I have appointed Hugh Johnson as Administrator and a special Industrial Recovery Board under the Chairmanship of the Secretary of Commerce. This organization is now prepared to
receive proposed codes and to conduct prompt hearings looking toward their
submission to me for approval. While acceptable proposals of no trade
group will be delayed, it is any hope that the ten major industries which
control the bulk of industrial employment can submit their simple basic
codes at once and that the country can look forward to the month of July
as the beginning of our great national movement back to work.
During the coming three weeks Title Two relating to public works and
construction projects will be temporarily conducted by Colonel Donald H.
Sawyer as Administrator and a special temporary board consisting of the
Secretary of the Interior as Chairman, the Secretary of Commerce, the
Secretary of Agriculture, the Secretary of War, the Attorney General, the
Secretary of Labor and the Director of the Budget.
During the next few weeks the Administrator and this board will make
a study of all projects already submitted or to be submitted, and as previously stated, certain allotments under the new law will be made immediately.
Between these twin efforts—public works and industrial re-employment,
it is not too much to expect that a great many men and women can be
taken from the ranks of the unemployed before winter comes. It is the
most important attempt of this kind in history. As in the great crisis of
the World War, it puts a whole people to the simple vital test:—"Must we
go on in many groping, disorganized, separate units to defeat or shall we
move as one great team to victory?"—
General Hugh S. Johnson New Chairman of Industrial
Administrative Board, Asks Spread of Work on
Living-Wage Basis—In Address to Coal Convention
He Says Industry Must Unite for Shorter Week with
More Employees.
Business and industry have reached a critical economic
stage, at which there is a danger of relapse from recent improvement because prices have risen more quickly and to a
greater degree than wages, according to General Hugh S.
Johnson, newly-appointed Chairman of the Industrial Administrative Board, in .
a radio address from Pittsburgh to
the delegates to the annual convention of the National Coal
Association, which met in Chicago on June16. General Johnson had been traveling by aeroplane to address the convention at Chicago, and when the plane in which be was a passenger was forced down he used the radio to convey his
message to the delegates. A relapse from improvement can
be prevented, he said, by an immediate movement on a broad
front for spreading work on a living-wage basis. "The
idea," he said, "is simply for employers to hire more men to
do the existing work by reducing the work hours of each
man's week and at the same time paying a living wage for
the shorter week." He added that such a program cannot
be undertaken unless all competing companies and industries
adopt it at about the same time. His further remarks, as
quoted in Chicago ads-ices to the New York "Times" on
June 16, were:
"The simplest and most direct course for each industry," he said, "Is
now to submit as an industry entirely what it would like to do, first, to
carry out our primary purpose, which is to put men back to work at decent
living wages in the shortest possible time, and second, those provisions
which you find it absolutely necessary to include to protect the willing and
forward-looking among your members from the racketeers and the pricecutters and those who are willing to take advantage of the unselfishness and
public spirit of other men."
Specific schedules could be drawn up later, he told the delegates; the
need now is for the basic codes. He paid tribute to the President for having
formulated the plan as particularly his
and said that his statement of
policy to-day, together with the act, "is own,
the charter of a new industrial selfgovernment in this country."
General Johnson said that his dash to Chicago through mountain passes
obscured by fog and cloud drifts was indicative of the willingness of the
administration to go more than half-way to co-operate with industry in the
recovery program.
"While we do not expect under these circumstances to see some of the
drastic things that were done during the war," he declared, "we do have a
principle and a situation which requires the same kind of cooperation.
Sees Back-to-Work Movement.
"I think I detect, and I think I am experienced enough from my war experience to be able to recognize when I do detect it, this same kind of a
ground swell throughout all of industry. I think we are on the verge of a
great National movement of our people back to work."
It was not the purpose of the Government, he explained, to tell industry
how to restore payrolls and profits. That, he insisted, was the problem which
each industry must solve for itself, subject only to Government guidance
of the most general kind.
Not all the benefits were to be for the workmen, he continued. In restoring employment the plan would also restore profits by making it possible
for companies to eliminate price-cutting and other disastrous trade practices.
Predicts Industrial Recovery.
"I don't need to tell you of the dangers of selling below cost of production. All of you know what damage can be done to the price structure by
the sale of a 'distress' car of coal. If ever there was an industry in need
of help it is the bituminous coal industry.
"American industry with the aid of this new industrial act, is about to
pull itself out of the hole."
4383
B. M. Baruch Takes Office as "Adviser Without Portfolio"—To Fill Post of Assistant Secretary of State
Moley While Latter Attends London Conference—
Expected to Aid in Shaping Administration
Policies.
Bernard M. Baruch, New York banker and economist, has
been appointed by President Roosevelt as an "adviser without portfolio," it was made known at Washington, on
June 19, when Mr. Baruch assumed the duties of Assistant
Secretary of State Moley while the latter is absent from his
post attending the World Monetary and Economic Conference in London. It was indicated that Mr. Baruch will transmit to Mr. Roosevelt reports from the London conference
while the President is on his vacation, and that he might be
influential in shaping Administration decisions on proposals
for stabilization of the currency and other similar questions.
A discussion of Mr. Baruch's recent position in formulating
various Administration policies, and of his past career, is
quoted below from a Washington dispatch to the New York
"Times," on June 19:
Mr. Baruch was behind the scenes, and the dominant economist, during
the framing of the Industrial Recovery Act, and his ideas were also embodied
in the Farm Relief Act. He recommended General Hugh Johnson, one of
his advisers on industrial economics, to help shape this Act. Mr. Johnson
is now the Industrial Administrator.
He also was influential in the election as Administrator of the Farm
Relief Act of George N. Peek, with whom he had been associated tor many
years in the study of the farm problems. General Johnson and Mr. Peek
were both associated with the Moline Implement Co., Moline, Ill. . . .
While Mr. Baruch might be considered as a man with an international
viewpoint, willing to co-operate with foreign countries in plans to restore
world prosperity, he is represented as not so sure that this is the time to
enter into broad industrial agreements. Those who have chatted with him
recently are of the opinion that he favors a national policy, coupled with
international agreements that will not prevent the successful working out
of the Administration's domestic program. . . .
Mr. Baruch first came into the picture as one of the supporters of Mr.
Roosevelt for the nomination in the pre-convention days. After the election
he consulted frequently with Mr. Roosevelt at Hyde Park, and it was predicted that he would be chosen either as Secretary of State or Secretary of
the Treasury.
When the plans for the World Economic Conference took shape, there was
speculation as to the possibility of Mr. Baruch being selected as head of the
American delegation, the poet which finally went to Secretary Hull.
Mr. Baruch was a power in the Wilson Administration. In 1916 he was
appointed a member of the Advisory Committee of the Council of National
Defense, and later was made Chairman of the Committee on War Materials,
Minerals and Metals, Commissioner in charge of raw materials for the War
Industries Board, and a member of the Commission in charge of all purchases
for the Allies. He was appointed Chairman of the War Industries Board on
March 5 1918, and resigned Jan. 1 1919.
He was connected with the American Commission to Negotiate Peace as a
member of the Drafting Committee of the Economic Section, and was a
member of the Supreme Economic Council and Chairman of its raw materials
division. He also was economic adviser for the American Peace Commission
and later wrote a book on the Versailles Treaty.
Government to Ask for Bids on $25,000,000in Building
Projects—New Construction Costing $100,000,000
to Be Under Way by October—Projects Include
Federal Office Building in New York City.
Plans to call for bids on $25,000,000 of public construction
within 45 days, in addition to a similar amount on which
bids are now being sought, were announced in Washington
on June 16 by Postmaster-General Farley and L. W. Robert,
Assistant Secretary of the Treasury, although detailed lists
of the projects to be considered were not issued at that time.
Among the larger projects said to be included are the Federal office building in New York City costing $5,715,000, and
the post office at St. Louis, costing $4,275,000. Mr. Robert
told reporters that the Government hoped to have $100.000,000 in new buildings under way by October.
New United States Employment Service to Begin Operations on July 1.
•
The new United States Employment Service will begin
active operations on July 1, according to a statement on
June 19 by W. Frank Persons, director of the employment
bureau in the Department of Labor. Mr. Persons said that
twenty-four states already maintain employment services,
and that the bureau will aid these in expanding their work.
It will also assist other states to establish services, he added.
The objectives of the new service, he said, are to clear labor
among the states, collect reliable information regarding labor
demand, and carry on necessary research work.
Farm Credit Administration to Aid Closed Wisconsin
Banks—Plan Will Help Depositors and Creditors
—Expected to Release $18,000,000 in Public Deposits.
A plan to aid depositors and creditors of closed banks
throughout Wisconsin by refinancing approximately $50,000,000 in farm mortgages held by Wisconsin banks was
announced on June 16 by Henry Morgenthau Jr., Governor
of the Farm Credit Administration. He said the plan will
4384
Financial Chronicle
release more than $18,000,000 in public deposits. Details
of the plan, as given in a Washington dispatch to the "Wall
Street Journal" on June 16, follow:
The Farm Credit Administration has arranged through Secretary Woodin
of the Treasury and Jesse H. Jones of the Reconstruction Finance Corporation to place $35,000,000 of its bonds with the Reconstruction Finance
Corporation in return for cash.
Representatives of the Farm Credit Administration will establish an
office at Madison and with a corps of from 50 to 100 appraisers, will commence a three to six months task of appraising and taking over all the farm
mortgages held by the closed banks.
There were about 800 banks in Wisconsin, Mr. Morganthau said. Of
these, only 160 state and 100 national banks are fully open. Thirty-five
national and 150 state banks are in the process of liquidation. State banks
open under restrictions number 350. There are 350,000,000 of farm mortgages held by these banks, 90% of which are in the closed banks.
Primarily to Help Farmers and Depositors.
Governor Morgenthau represented his plan as one primarily to aid
depositors and farmers in debt to these banks, though the placing of this
additional cash in the banks is likely to also to help reopen the closed
banks, it was said.
The aid to depositors will come in the cash which will go directly to the
depositors of the closed banks. There is about $18,000,000 of public funds
tied up in them, and on this account municipalities have had difficulty
Paying salaries to school teachers, policemen and firemen.
Aid to farmers will come in the fact that all mortgagee moust be cut dwn
to a level representing 50% of the value set by the Farm Credit Administration's appraisers, plus 20% of the value of permanent improvements
on the land. On an average, the $50,000,000 of mortgages are worth
about 70 cents on the dollar, which is why only $35,000,000 in cash is
needed, Mr. Morgenthau said. The appraised value will be the average
value of the land for the years from 1905 to 1914. modified by changes
In circumstances affecting the value of each particular farm.
Whether state and national banks will use these funds to reorganize
and reopen will be left in every case to the state banking department or
the comptroller of the currency, Mr. Morgenthau said. The refinancing of
the farm mortgages in the Wisconsin banks has been made possible by a
law there that the administrative officals of the state ccan prinit a writedown both of assets and deposit liabilities, be explained.
Mr. Morgenthau was enthusiastic over the plan to aid Wisconsin. He
indicated that the idea might be tried in other states also, but he was
unable to say whether the legal situation in other states was as wall adapted
to the program as it is in Wisconsin. He anticipated that there would
be specialsessions of legislatures in other states to permit state banks to
write down deposit liabilities and the value of assets so that the Farm
Credit Administration could refinance farm mortagges.
Paul Bestor Resigns as Farm Loan Commissioner
Effective June 30—Will Continue in Advisory Capacity Until Aug. 31—Albert S. Goss of Seattle
Selected to Fill Vacancy.
Henry Morgenthau Jr., Governor of the Farm Credit
Administration, announced on June 15 that Paul Bestor,
Farm Loan Commissioner, had tendered his resignation, to
become effective June 30 1933. Mr. Bestor has accepted
appointment as Supervisor of the Mortgage Loan Department of the Prudential Insurance Co. of America, Newark,
N. J. Mr. Morgenthau's announcement continued:
Dylan arrangement between Governor Morgenthau and the Prudential
Insurance Co., Mr. Bestor will continue until Aug. 31 1933 to act in an
advisory capacity with the Farm Credit Administration, so that his successor may have the benefit of Mr. Bestor's experience during that period
while familiarizing himself with the duties of his position.
'In a later announcement, Mr. Morgenthau stated that
Albert S. Goss of Seattle has been selected to fill the vacancy
as Farm Loan Commissioner.
Loans of $28,496,690 to Farmers' Co-operative Organizations Authorized During May by Farm Credit
Administration — $4,862,167 Repaid — $181,017,629
Outstanding May 31 1933.
During May, loans aggregating a total of $28,496,690.18
were authorized to be made to farmers' co-operative organizations from the revolving fund created by the Agricultural
Marketing Act, Henry Morgenthau, Jr., Governor of the
Farm Credit Administration, announced on June 17. Mr.
Morgenthau's statement was made in line with his policy to
make public each month a report of new loans authorized
and loans outstanding to the co-operatives. A previous
statement showing loans authorized from Feb. 28 1933 to
April 30 1933 was noted in our issue of June 17, page 4201.
In the statement of June 17 it was noted that cash amounting
to $29,509,487.51 was advanced to the co-operatives on
both old and new commitments during the period from
April 30 1933 to May 31 1933. The co-operatives repaid
$4,862,167.41, the statement said, leaving them owing the
Farm Credit Administration a total of $181,017,629.17 on
May 31 1933. The statement continued:
The American Cotton Co-operative Association was granted a commitment of $27,400,000. The money was advanced and used in paying off
primary liens on the organization's 1930 seasonal pool cotton. In making
this loan the Farm Credit Administration is paving the way to take such
action and to make such settlements as are necessary in order to acquire full
legal title to the Association's cotton which is later to be sold to the Secretary of Agriculture as provided for in Part 1, Section 3 of the Agricultural
Adjustment Act.
Loans authorized to be made between April 30 1933 and May 31 1933,
from the revolving fund created by the Agricultural Marketing Act, and
total loans outstanding as of May 31 1933, are shown for each association
on the following schedule:
June 24 1933
Total Loans
New
Commitments. Outstanding.
Name and Address—
,
A.& M. College Co-oper. Creamery, Starkville, Miss_
15,000.00
Ala. Farm Bureau Cotton Assn., Montgomery, Ala__
268,084.23
Ala. Fla. Co-oper. Peanut Assn., Montgomery,Ala__
14,169.78
Alamo Co-oper. Milk Prod. Assn., San Antonio, Tex_
10,252.23
American Cotton Co-oper. Assn., New Orleans, La_ _27,400,000.00 98,827,505.28
American Rice Growers Assn., Lake Charles, La
70,323.85
Arizona Pimacotton Growers Assn., Phoenix, Ariz
265,845.75
Arkansas Rice Growers Assn., Stuttgart, Ark
247,940.81
Arnegard Potato Growers Assn., Arnegard, N. Dak
4,000.00
Battletown Co-oper. Fruit Exchange, Berryville, Va.
16,800.00
Big Horn Co-operative Marketing Assn., Basin, Wyo.
106,693.29
Blair Apple Growers Assn., Blair, Kan
7,638.55
Cafeteros de Puerto Rico, Ponce, Porto Rico
49,912.13
Calavo Growers of California, Los Angeles, Calif
12,000.00
Calif. Cotton Co-oper. Assn., Ltd., Bakersfield, Calif_
89,112.00
Calif. Grape Control Board, Ltd.,San Francisco, Calif.
2,440,690.65
Calif. Peach & Fig Growers Assn., Fresno, Calif
155,884.36
Calif. Prune & Apricot Growers Assn., San Jose, Calif_
329,490.56
California Raisin Pool, Fresno, Calif
1,251.921.51
Calloway Co-operative Creamery, Calloway, Neb__
3,434.55
Cassia Potato Growers Co-oper. Assn., Burley, Idaho..
2,211.42
Challenge Cream & Butter Assn., Los Angeles, Calif_
238,710.84
Chautauqua az Erie Grape Growers Assn., Westfield, N. Y
168,881.08
Clintondale Fruit Growers Co-oper. Assn., Clintondale, N. Y
175,000.00
Colorado Bean Growers Assn., Trinidad, Colo
111,381.28
Co-operative Grange League Federation, Ithaca, N.Y.
410,000.00
Co-operative Pure Milk Assn., Cincinnati, Ohio
1,725,000.00
Council Bluffs Grape Growers Assn., Council Bluffs,
Iowa
5,000.00
Dairy & Poultry Co-operatives, Inc., Chicago, 111__
80,534.39
Dairymen's Co-oper. Creamery of Boise Valley, Caldwell,Idaho
120,000.00
Dairymen's League Co-over. Assn., Inc., N. Y. CRY3,750,000.00
Eastern Dark Fired Tobacco Assn., Springfield, Tenn_
482,946.91
Eastern Shore of Virginia Produce Exch., Onley, Va._
114,727.42
127,680.62
Eatonton Co-operative Creamery, Inc., Eatonton, Ga.
10,411.76
Egyptian Seed Growers Exchange, Flora, Ill
38,880.04
Enid Co-operative Creamery, Inc., Enid, Okla
8,000.00
Farmers Equity Co-oper. Creamery Co., Orleans, Neb.
26,862.99
Farmers Equity Union Creamery Co., Lima, Ohio19,200.00
Farmers Federation, Inc., Asheville, N. C
56,680.15
Farmers National Grain Corp., Chicago, Ill
15,709,546.17
Farmers Nat. Grain Corp.(drouth relief), Chicago,Ill_
789,379.64
Farmers Union Co-oper. Creamery, Billings, Mont..
6,081.00
Farmers Union Co-open Produce Assn.. Colony, Kan_
82,786.01
Farmers Union Poultry Comm'n Co., St. Paul, Minn
1,546.51
Florida Citrus Exchange, Tampa, Fla
2,164,794.34
Florida Truck Growers Assn., Bradenton, Fla
3,930.00
Fruit Growers Union Co-over., Sturgeon Bay, Wis.
683,029.81
Fruit Industries, Ltd., San Francisco, Calif
2,944,462.08
Fruitland Fruit Assn., Fruitland, Idaho
8,500.00
Gem Fruit Union, Inc., Emmett, Idaho
12,000.00
299,195.46
Georgia Cotton Growers Co-oper. Assn., Atlanta, Ga.
7,040.91
Georgia Peanut Growers Exchange, Inc., Albany, Ga.
Gt. Lakes Fruit Industries, Inc., Benton Harbor, Mich
170,532.76
1,000.00
2,505.45
Growers Co-operative Assn., Newberg, Ore
9,548.85
Growers Co-oper. Grape Juice Co., Westfield, N. Y_
Guilford Dairy Co-operative Assn., Greensboro, N. C_
12,542.89
Hastings Potato Growers Assn., Hastings, Fla •
100.000.00
Idaho Egg Producers, Caldwell, Idaho
29,173.30
Idaho Grimm Alfalfa Seed Growers Assn., Blackfoot,Idaho
28,000.00
Illinois Fruit Growers Exchange, Centralia, Ill
13,510.00
Indiana Poultry Co-operative, Inc., Indianapolis, Ind16,040.38
48,399.60
Interstate Associated Creameries, Portland, Ore
Jay Co. Farm Bureau Co-oper. Assn., Portland, Ind
6,500.00
Kentucky Blue Grass Seed Growers Co-oper. Assn.,
936,791.75
Winchester, Ky
Land O'Lakes Creameries, Inc., Minneapolis, Minn
2,953,325.00
Louisiana Cotton Co-over. Assn., New Orleans, La
55,796.50
Lower Columbia Co-oper. Dairy Assn., Astoria, Ore._
186,500.00
74,792.22
Magtex Fig Association, Houston, Tex
Maine Potato Growers, Inc., Ft. Fairfield, Me
2,670.93
232,678.51
Maryland Tobacco Growers Assn., Baltimore, Md__
3,018.31
Miami Valley Co-oper. Milk Prod. Assn., Dayton, 0..
87,536.86
Michigan Producers Dairy Co., Adrian, Mich
Mid South Cotton Growers Assn., Memphis, Tenn._
106,488.83
Minidoka Potato Growers Co-oper. Assn., Inc.,
1,270.84
Rupert, Idaho
Mississippi Farm Bureau Federation, Jackson, Miss_
2,200.00
Missouri Valley Blue Grass Seed Growers Assn.,
262,318.76
Plattsburg, Mo
50,000.00
Montana Bean Growers Association, Billings, Mont
39,680.42
Mountain States Honey Prod. Assn., Boise, Idaho-26,116.15
Mushroom Co over. Canning Assn., Kennett Sq., Pa
5,000.00
76,642.00
NationalCheese Producers Federation, Plymouth, Wis
117,536.20
National Fruit dc Vegetable Each., Inc., Chicago, Ill_
4,016,033.94
National Livestock Marketing Assn., Chicago, 111—
354,010.59
National Pecan Marketing Assn., Jackson, Miss
91,580.33
National Producers Feeder Pool, Chicago, Ill
821,908.65 16,087,364.29
National Wool Marketing Corp., Boston, Mass
74,036.50
N.C. Cotton Growers Co-over. Assn., Raleigh, N.C223,429.16
N.D.-Mont, Wheat Growers Assn., Grand Forks, N.D
63,332.73
North Platte Valley Co-over. Cheese Co., Gering, Neb.
606,434.20
Northern Wisconsin Co-over. Tob. Pool, Madison, Ms
16,986.49
Northwest Grain Assn., Minneapolis, Minn
Ohio Farmers Co-oper. Milk Assn.(nee'). Cleve., Ohio.
500,000.00
9,266.46
O. K. Co-oper. Milk Assn., Inc., Okla. City, Okla_
Oklahoma Cotton Growers Assn., Okla. City, Okla
388,722.08
Orchard Grass Seed Growers Co-oper. Assn., Louisville, Ky
444.88
Pinto Bean Growers Assn., Trinidad, Colo
42,112.28
Plains Co-operative Inc., Plainview, Tex
8,933.85
Poultry Producers Assn. of Texas, San Antonio, Tex_ _
1,741.28
184,343.89
Producers Creamery, Marion,Ind
30,000.00
Producers Mutual Exchange of North Carolina,
Durham, N.C
4,830.03
Producers Produce Co., Inc., Chillicothe, Mo
102,169.62
Rice Growers Assn. of California, Sacramento, Calif_ _
361,250.00
Rio Grande Valley Citrus Exchange, Weslaco, Tex-13,176.10
Rio Grande Vegetable Co-over. Assn., Weslaco, Tex_
41,479.91
Sacramento Valley Walnut Growers of California,
Live Oak, Calif
19,014.00
Ban Dimas Lemon Assn., San Dimas, Calif
15,000.00
Sequoia Walnut Growers MOM., Visalia. Calif
30,000.00
Shelby County Milk Producers Assn., Memphis,Tenn.
89,595.49
South Carolina Cotton Growers Co-over. Assn.,
Columbia, S. C
98,499.71
South Carolina Packing Corp -Co-over., Fairfax, S. C.
46,618.39
South Carolina Tobacco Growers Marketing Assn.,
Florence, S. C
3,812.83
721,289.72
South Shore Co-operative Assn., Silver Creek, N. Y_
7,316.52
South Mississippi Dairy Producers Assn., Laurel, Miss.
17,983.09
Southern Idaho Bean Growers Assn.,Twin Falls, Idaho
49,623.19
Southwestern Irrigated Cotton Growers Assn., El
Paso, Tex
42,000.00
4,649.48
Southwestern Poultry Association, Brownwood, Tex_
Soy Bean Marketing Association, Chicago, Ill
127,985.70
Staple Cotton Co-operative Assn., Greenwood, Miss_
9,347,007.93
Stayton Canning Co. Co-operative, Stayton, Ore_
10,684.35
Stemming District Tobacco Assn., Henderson, Ky_
125,477.37
Sun Maid Raisin Growers of Calif., Fresno, Calif
4,484,287.48
24,127.40
Tex. Certified Cottonseed Breeders Assn., Dallas,Tex_
Texas Cotton Co-operative Assn., Dallas, Tex
429,610.90
The Dalles Co-operative Growers, The Danes, Ore_
34,890.19
The Ohio Farmers Co-operative Milk Assn. (old).
430,000.00
Cleveland, Ohio
Tulsa Milk Producers Co-operative Assn., Tulsa, Okla.
35,666.61
Ilintah Farm Bureau Co-operative Assn., Vernal, Utah
6,250.00
Union Fruit Co., Paonta, Colo
300.00
Financial Chronicle
Volume 136
New
Commitments.
Name and Address—
United Dairy System, Inc., Springfield, Mass
United Dairymens Association, Inc., Seattle, Wash_
Upper Snake River Valley Dairymen's Assn., Idaho
Falls, Idaho
Utah Fruit & Vegetable Growers, Inc., Salt Lake
City, Utah
Valley Co-operative Fruit Exchange, Winchester, Va
Valleyof Virginia Co-oper. Milk Producers Assn.,
Harrisonburg, Va
Virginia Co-oper. Peanut Assn., Inc., Suffolk, Va_
Washington Canners Co-operative, Vancouver, Wash_
Washington County Co-oper.Creamery Co., Linn,ICan
Wathena Apple Growers Association, Wathena, Kan_
Wayne Co-oper, Cherry Growers, Inc., Sodus, N. Y.
Wenatchee-Okanogan Co-oper. Federation, Wenatchee, Wash
W. Va. Poultry Co-oper. Assn., Parkersburg, W.Va_
Western Dark Fired 'Fob. Growers Assn., Murray,Ky_
Wisconsin Potato Growers Exchange, Waupac, Wls.
Wolcott Vegetable Growers, Wolcott, N. Y
Woodstock Co-oper, Fruit Exchange, Woodstock, Va_
3,000.00
Total Loans
Outstanding.
15,500.00
764,560.65
70,000.00
19,590.62
27,000.00
45,646.81
12,812.50
38,578.55
11,832.75
8,797.95
14,299.78
75,000.00
220,900.00
11,155.31
282,034.04
1,320.93
2,595.00
15,260.00
28,496,690.18 181,017,629.17
Total
-
Livestock Feed Loans to Be Made to Farmers
In Drouth of Several States by Farm Credit Administration.
On June 14, Henry Morgenthau Jr., Governor of the Farm
Credit Administration, announced that special livestock feed
loans will be made available to farmers who are confronted
with a serious drouth situation in Southwestern Kansas,
BOutlreastern Colorado, the Oklahoma Panhandle, the north'ekrtion. of the Texas Panhandle, and Northeastern New
Me 'co. Loans will be made from the feed-loan fund of
$1,000,000 formerly administered by the United States Department of Agriculture and recently made available to the
Farm Credit Administration. In his announcement, Mr.
Morgenthau continued:
Special
Reports indicate that at least 30 counties are affected by the drouth.
This is the belt in which practically no winter wheat is being produced this
year, and continued drouth and dust storms have destroyed spring crops.
Pasture is not available and there is a serious shortage of feed for livestock.
Farmers in this drouth area will be given an opportunity to apply immediately for feed loans to the county crop loan committees in the States
affected. The money will be made available at the rate of $2.50 a head
per month for horses and cattle more than a year old, 30 cents a head for
sheep, and MOO a head for brood some, the total loan not to exceed $10.00
a head for horses and cattle, $1.20 for sheep, and $4.00 for brood sows.
The maximum loan to any individual is $250 and the date of maturity
Is Aug. 31 1934. As the necessity for a continued feeding program will
depend on whether or not pasture and feed crops are available later, the
initial payment to the borrower will be for one month only, with additional
instalments on a monthly basis if the need develops. The Act authorizing
the appropriation requires that a first mortgage be taken on the livestock
as security for a loan.
General Hugh S. Johnson Issues Guide for Preparation
of Codes of Fair Competition Under National
Industrial Recovery Act—Urges Speed by Industries and Warns of Presidential Power to Prescribe
Codes—To Ask Temporary Armistice on Price
Increases.
Instructions to industry regarding the preparation of codes
of fair competition under the provisions of the National
Industrial Recovery Act were made public on June 20 by
General Hugh S. Johnson, Administrator of the Act. Particular reference was made in the instructions to the "ten
major industries which control the bulk of industrial employment," and although they were not singled out by name,
General Johnson intimated that if they did not submit codes
within the near future the President might use his authority
to compel them to do so. More than half of the bulletin
of instructions stressed the general purposes of the fair
competitive codes and their voluntary nature. In that connection General Johnson quoted sections of the Act giving
the President power to prescribe codes for recalcitrant or
dilatory industries. The bulletin was issued as a model for
basic codes, particularly the provisions regarding labor, and
suggested that each industry arrive within itself at an agreement on maximum hours of work, minimum wage rates
and methods to orce opposing minorities into line.
In an interview on June 20, General Johnson said that he
would ask the Nation's industrial leaders not to raise prices
for several months as a counter-balance to wage increases
planned in trade agreements. His comments on this matter
and on other phases of the administration of the law are
quoted below from Associated Press Washington advices of
June 20:
"We are going to ask something in the nature of an armistice on increased
capacity and prices until we get this thing started," he said. "You can't
go out and make any hard and fast rules or force people, but we are going
to appeal very earnestly to all industries not to increase their capacity by
labor-saving devices for a few months."
The administrator stated that if there were any "slackers" in forming
trade agreements he had not detected them, and that virtually every industry now was preparing codes of fair competition for presentation to him.
Saying he could promise nothing, he added:
"There has been too much promising and too little action throughout
this depression."
Eventually the plan was that all industries, including newspapers,
should come under the scope of the Act.
4385
"If anybody gets around this it will be my fault, but I am not going
to begin thinking any one is trying to get aroung it," he added. "We are
are going to have to do this job in a goldfish bowl."
Referring to the possibility of the minimum wage fixed by a code becoming the maximum wage, a contingency which he said would be fought
against. General Johnson asserted "there was a minimum wheat price
during the war that became the maximum, and the farmers haven't gotten
over that yet."
In response to another query he said the recovery administration was
"not going to be used as a machine for unionizing any industry," even
though the law permits "collective bargaining."
"The men can organize, but I am neither going to organize industry
nor labor," he said. "My business is to pass upon these agreements as
they are presented. The law gives the authorization to bargain collectively.
I have a law to execute and I am going to do it."
The text of the bulletin describing the procedure to be
followed by industries in formulating proposed basic codes
is given below. It was signed by Hugh S. Johnson, Administrator; Daniel C. Roper, Secretary of Commerce; Homer
S. Cummings, Attorney-General; Harold I. Ickes, Secretary of the Interior; Frances Perkins, Secretary of Labor;
Charles II. March, Chairman of the Federal Trade Commission; Lewis W. Douglas, Director of the Budget, and
John Dickinson, Assistant Secretary of Commerce. Although the bulletin was dated June 19,it was not made public
until the following day.
NATIONAL RECOVERY ADMINISTRATION
Bulletin No. 2
June 19 1933.
(1) This bulletin is intended to inform all trade associations, industrial
of the National
benefits
the
secure
to
proceed
and labor groups how to
Industrial Recovery Act. In his statement upon the signing of the Act
the President said with reference to prompt submission of codes of fair
competition:
"This organization is now prepared to receive proposed codes and to
conduct prompt hearings looking toward their submission to me for approval.
While accepting proposals of no trade group will be delayed, it is my hope
that the 10 major industries which control the bulk of industrial employment can submit their simple basic codes at once and that the country
can look forward to the month of July as the beginning of our great National
movement back to work."
This bulletin covers the procedure necessary to comply with the President's suggestion.
(2) The National Recovery Administration will receive proposed codes
at any time after this date at its office in the Department of Commerce
Building, Washington, 13. C. Codes may be submitted by mail and will
be promptly examined and associations or groups submitting them will
be given such suggestions as are appropriate for further action. Consistent
with the President's statement, the major industries will so far as practical
have the rust attention of the Administration.
As soon as the proposed code is put in proper form, after consultation
with those submitting it, due public notice will,be given of a date for a
be
hearing on the code, and at such hearing a reasonable opportunity to
labor
heard will be given to all interested parties, including all affected
associagroups, and representatives of consumer organizations, the trade
tions or groups submitting codes and any essential minority thereof, other
the
concerns not members thereof, and persons engaged in other steps of
apeconomic process whose service and welfare might be affected by the
proval of the proposed code. This hearing will be held by a person desigperson,
nated by the Administrator and there will be present, to advise that
experts in the industry under consideration and the labor pertaining thereto.
who will be chosen under the supervision of the Secretaries of Commerce
and Labor, respectively. All other persons or concerns whose co-operation
is desirable in connection with the proposed codes shall be entitled to attend
such hearings.
(3) After such a hearing the proposed code may be modified at the
if it
suggestion of the Administration or otherwise and as so modified,
is agreed to by representatives of the association or group presenting it
the
as
and ratified by such association or group under such conditions
his
Administration may prescribe, it will be presented to the President for
approval or disapproval or suggested modification, and when finally
National
approved by the President,it shall have the effect prescribed by the
Recovery Act.
(4) In order to carry out the President's suggestion as quoted in paraincrease
graph I and to effect an immediate reduction of unemployment and
of mass purchasing power, trade associations or groups are invited to
submit without delay a basic code covering only such agreements as are
labor,
consistent with the policy of the Act, respecting maximum hours of
minimum rates of wages, and such means as each industry may find necessary to protect its constructive and co-operating majority from the wasteful
and unfair competition of minorities or recalcitrants. Additions, modifications, and refinements of such basic codes will be considered later upon
application by such associations or groups
(5) Every code of fair competition, agreement and license approved.
Prescribed, or issued under this title shall contain the following conditions:
(1) That employees shall have the right to organize and bargain collectively
through representatives of their own choosing, and shall be free from the
interference, restraint, or coercion of employers of labor, or their agents,
in the designation of such representatives or in self-organization or in other
concerted activities for the purpose of collective bargaining or other mutual
aid or protection: (2) that no employee and no one seeking employment
shall be required as a condition of employment to join any company union
or to refrain from joining, organizing or assisting a labor organization of
his own choosing; and (3) that employers shall comply with the maximum
hours oflabor, minimum rates of pay, maximum machine-load of employees.
and other conditions of employment, approved or prescribed by the President.
(6) It is not the function of the National Recovery Administration to
prescribe what shall be in the codes to be submitted by associations or
groups. The initiative in all such matters is expected to come from within
the industry itself. Neither is it the purpose of the Administration to
compel the organization of either Industry or labor. Basic codes containing
provisions respecting maximum hours of labor, minimum rates of pay,
and other conditions of employment, which are in themselves satisfactory,
will be subject to approval, although such conditions may not have been
arrived at by collective bargaining.
(7) In preparing basic codes the following principles should be given
consideration:
(a) Basic code provisions relating to maximum hours may involve
appropriate consideration of the varying conditions and requirements of
4386
Financial Chronicle
the several industries and the state of employment therein. An average
work week should be designed so far as possible to provide for such a spread
ofemployment as will provide workso far as practical for employees normally
attached to the particular industry.
(b) Minimum wage scales should be sufficient to furnish compensation
for the hours of work as limited, sufficient in fact to provide a decent
standard of living in the locality where the workers reside.
(c) Conditions of employment should contain necessary safeguards for
the health and safety of the workers and for stabilization of their employment.
(d) The following principle emphasized in the President's statement
should be recognized and adhered to:
"I am fully aware that wage increases will eventually raise costs, but I
ask that managements give first consideration to the improvement of
Operating figures by greatly increased sales to be expected from the rising
purchasing power of the public. That is good economics and good business.
The aim of this whole effort is to restore our rich domestic market by
raising its vast consuming capacity. If we now inflate prices as fast and
as far as we increase wages, the whole project will be set at naught. We
cannot hope for the full effect of this plan unless in these first critical
months, and, even at the expense of full initial profits, we defer price
Increases as long as possible."
In the drafting of codes, attention is especially directed to this suggestion
by the President that the recovery administration cannot be effective unless
the consumer's buying power is protected. There will be full protection
for the consumer. The codes should recognize the interest of the public
in the matter of prices.
•
(8) At the hearings described in paragraph 2 every trade association or
group proposing a code should be prepared to establish by evidence the
requirements of Section 3 (A), clause 1, of the Act which provides: That
such associations or groups impose no inequitable restrictions on admission
to membership therein and are truly representative to such trades or
industries or subdivisions thereof; and of Section 3, clause 2, of the Act
which provides: That such code or codes are not designated to promote
monopolies or to eliminate or oppress small enterprises and will not operate
to discriminate against them, and will tend to effectuate the policy of this
title.
(9) It is the purpose of the Act to encourage a voluntary submission of
codes of fair competition, and the procedure offered by these provisions
for basic codes is intended to simplify and expedite this process. But in the
event that codes of fair competition are not voluntarily submitted, attention is invited to other pertinent provisions of the Act.
It Is provided in Section 3(D) of the Act that the President, upon his
own motion or if complaint is made, may after public notice and hearing
Prescribe a code of fair competition for a trade or industry or subdivision
thereof. Section 3(D) reads as follows:
"Upon his own motion, or if complaint is made to the President that
abuses inimical to the public interest and contrary to the policy herein
declared are prevalent in any trade or industry or subdivision thereof,
and if no code of fair competition therefor has theretofore been approved
by the President, the President, after such public notice and hearing as he
shall specify, may prescribe and approve a code of fair competition for
such trade or industry or subdivision thereof, which shall have the same
effect as a code of fair competition approved by the President under Subsection (A) of this section."
In this same connection, attention should be directed to the requirements
of Sections 7(B) and (C);which read as follows:
(B) "The President shall, so far as practicable, afford every opportunity
to employers and employees in any trade or industry or subdivision thereof,
with respect to which the conditions referred to in Clauses (1) and (2) of
Subsection (A) prevail, to establish by mutual agreement the standards
as to the maximum hours of labor, minimum rates of pay, maximum
machine-load of employees, and such other conditions of employment as
may be necessary in such trade or industry or subdivision thereof to effectuate the Policy of this title; and the standards established in such agreements, when approved by the President, shall have the same effect as a
code of fair competition, approved by the President under Subsection (A)
of Section 3."
(C) "Where no such mutual agreement has been approved by the President, he may investigate the labor practices, policies, wages, hours of
labor and conditions of employment in such trade or industry or subdivision
thereof; and upon the basis of such investigations, after such hearings as
the President finds advisable, he is authorized to prescribe a limited code
of fair competition fixing such maximum hours of labor, minimum rates
of pay and other conditions of employment in the trade or industry or
subdivision thereof investigated as he finds to be necessary to effectuate
the Policy of this title, which shall have the same effect as a code of fair
competition approved by the President under Subsection A of Section 3.
The President may differentiate according to experience and skill of the
employees affected and according to the locality of employment; but no
attempt shall be made to introduce any classification according to the
nature of the work involved which might tend to set a maximum as well as
a minimum wage."
'Under the foregoing provisions of theAct . if no code or agreement
establishing standards as to maximum hours of labor, minimum rates of
pay and conditions of employment has been approved by the President,
the President is authorized under the foregoing Section 7 (C) to prescribe
alimited code upon the basis of such investigations and after such hearings
as he finds advisable.
Cotton Textile Industry Submits Proposed Code of
Fair Competition Under Terms of National Industrial Recovery Act—Hearings to Begin June 27
—Minimum Wage Set at $10 Weekly in South, $11
in North.
The cotton testile industry became the first of the country's
major industries to submit to the Industrial Recovery Administration a code of fair practices for approval under the
provisions of the National Industrial Recovery Act, when the
code was formally presented to General Hugh Johnson,
Industrial Recovery Administrator, on June 19. General
Johnson announced that the code will be the subject of public
hemings beginning on June 27. The principal provisions of
the proposed code include:
1. A minimum wage to unskilled labor, with a few specified exceptions,
of$10 weekly in the South and $11 weekly in the North.
. 2. A maximum working week of 40 hours, with not more than two
40-hour shifts.
3. Each member of the industry shall report every four weeks showing
the actual hours worked and minimum wages paid.
June 24 1933
4. Reports every four weeks on the amount of machinery in actual
operation.
5. Weekly reports of output, unfilled orders and stocks on hand.
6. Adjustment of contracts within the industry where the cost of executing
the contracts is increased by application of the Industrial Recovery Act.
7. Freedom is granted employees to organize and bargain collectively
under the terms of the Act and the requirement that they join a company
union is waived.
The code was submitted by a committee composed of
George A. Sloan, President of the Cotton Textile Institute,
Inc. of New York City; T. M.Merchant of Greenville, S. C.,
President of the American Cotton Manufacturers Association,
and Ernest M. Hood, of Salem, Mass., President of the
National Association of Cotton Manufacturers. These three
organizations are said to represent more than two-thirds of
the industry in the United States.
The text of the code proposed submitted by the cotton
industry for operation under the Industrial Recovery Act
was as follows:
CODE OF FAIR COMPETITION FOR THE COTTON TEXTILE
INDUSTRY.
To effectuate the policy of Title I of the National Industrial Recovery
Act, during the period of the emergency, by reducing and relieving Unemployment, improving the standards of labor, eliminating competitive practices destructive of the interests of the public, employees and employers,
relieving the disastrous effects of overcapacity, and otherwise rehabilitating
the cotton textile industry and by increasing the consumption of indtuttrial
and agricultural products by increasing purchasing power, and in other
respects, the following provisions are established as a code offair competition
for the cotton textile industry:
1. Definitions: The term "cotton textile industry" as used herein is
defined to mean the manufacture of cotton yarns and (or) cotton woven
fabrics, whether as a final process or as a part of a larger or further process.
The term "employees" as used herein shall include all persons employed
in the conduct of such operations.
The term "productive machinery" as used herein is defined to mean
spinning spindles and (or) looms.
The term "effective date" as used herein is defined to be July 17 1933, or,
If this code shall not have been approved by the President two weeks prior
thereto, then the second Monday after such approval.
The term "persons" shall include natural persons, partnerships, associations and corporations.
H. On and after the effective date, the minimum wage that shall be paid
by employers in the cotton textile industry to any of their unskilled employees—except learners during a six weeks' apprenticeship, cleaners and
outside employees—shall be at the rate of $10 per week when employed
In the southern section of the industry and at the rate of $11 per week when
employed in the northern section for 40 hours of labor.
III. On and after the effective date, employers in the cotton textile
Industry shall not operate on a schedule of hours of labor for their employees
—except repairshop crews, engineers, electricians,firemen, office and supervisory staff, shipping, watching and outside crews, and cleaners—In excess
of 40 hours per week, and they shall not operate productive machinery in
the cotton-textile industry for more than two shifts of40 hours each per week.
IV. With a view to keeping the President informed as to the observance
or non-observance of this code of fair competition, and as to whether the
cotton textile industry is taking appropriate steps to effectuate the declared
pollcy of the National Industrial Recovery Act, each person engaged in the
cotton textile industry will furnish duly certified reports in substance as
follows and in such form as may hereafter be provided:
(a) Wages and Hours of Labor. Returns every four weeks showing actual
hours worked by the various occupational groups of employees and minimum
weekly rates of wages.
(b) Machinery Data. In the case of mills having no looms, returns should
be made every four weeks showing the number of spinning spindles in place,
the number of spinning spindles actually operated each week the number of
shifts and the total number of spindle hours each week.
In the case of mills having no spinning spindles, returns every four weeks
showing the number oflooms in place, the number oflooms actually operated
each week, the number of shifts and the total number of loom hours each
week.
In the case of mills that have spinning spindles and looms, returns every
four weeks showing the number of spinning spindles and looms in place,
the number of spinning spindles and looms actually operated each week, the
number of shifts and the total number of spindles hours and loom hours
each week.
to) Reports of Production, Sales, Stocks and Orders. Weekly returns showing production in terms of the commonly used unit, 1. e., linear yards, or
pounds or pieces; stocks on hand both sold and unsold stated in the same
terms and unfilled orders stated also in the same terms. The returns are to
be confined to staple construction and broad divisions of cotton textiles.
The Cotton Textile Institute, Inc., 320 Broadway, New York City, is
constituted the agency to collect and receive such reports.
V. Where the costs of executing contracts entered into in the cotton
textile industry prior to the presentation to Congress of the National
Industrial Recovery Act are increased by the application of the provisions
of the Act to the industry, it is equitable and promotive of the purposes of
the Act that appropriate adjustments of such contracts to reflect such
increased costs be arrived at by arbitral proceedings or otherwise, and the
cotton textile industry committee, the applicant for this code, is constituted an agency to assist in effecting such adjustments.
VI. As required by Section 7 (a) of Title I of the National Industrial
Recovery Act the following provisions are conditions of the code:
"1. That employees shall have the right to organize and bargain collectively through representatives of their own choosing, and shall be free
from the interference, restraint or coercion of employers of labor, or their
agents, in the designation of such representatives or in self-organization or
in other concerted activities for the purpose of collective bargaining or other
mutual aid or protection;(2)that no employee and no one seeking employment shall be required as a condition of employment to join any company
union or to refrain from joining, organizing, or assisting a labor organization
of his own choosing: and (3) that employers shall comply with the maximum
hours of labor, minimum rates of pay, and other conditions of employment,approved or prescribed by the President."
VII. The President may,from time to time, cancel or modify any order,
approval, license, rule, or regulation issued under Title I of the National
Industrial Recovery Act.
VIII. Such of the provisions of this code as are not required to be in-'
eluded therein by the National Industrial Recovery Act may, with the
approval of the President, be modified, or eliminated if It appears that the
Volume 136
Financial Chronicle
in circumstances
public needs are not being served thereby and as changes
or experience may indicate.
or eliminated or
They shall remain in effect unless and until so modified
until the expiration of the Act.
ary provisions to
It Is contemplated that from time to time supplement
for the approval of the
this code or additional codes will be submitted
other unfair and
President to prevent unfair competition in price and
other purposes and
destructive competitive practices and to effectuate the
Act and which shall
policies of Title I of the National Industrial Recovery
not conflict with the provisions hereof.
unenforceable, the
IX. If any provision of this code is declared invalid or
force and effect the
remaining provisions shall nevertheless continue in full
and approved
approval
for
same as if they had been separately presented
by the President.
A letter accompanying the code read as follows:
Washington, D. C. June 16 1933.
The Honorable Hugh S. Johnson,
Recovery Act,
Administrator under the National Industrial
Commerce Building, Washington, D. C.
Dear Sir:
on through use of
In modern industrial operations, primarily carried
such devices frequently
mechanical devices, the progress of invention in
of operations
number
increased
results in enabling an employee to handle an
or of machines.
as in the long
Such progress in labor-saving devices has been recognized
important factor in
• run highly in the interest of the community and an
making possible our high American standards of living.
In times of depression such as these when employees whose services becannot readily be
come unnecessary by reason of such improvements
or into other
reabsorbed through increased operations in the industry itself
consideration.
needs
Industries, it is recognized that a situation arises which
which
situation
this
to
exception
The cotton textile industry furnishes no
improvements
prevails generally in American industry. There have been
the technique for
in the mechanical devices used in the industry and in
an increased
banding these devices which enable an employee to handle
also been affected
has
number of operations or machines. and this situation
the leadership
through the production of an improved cotton fibre under
the eliminating
of the Department of Agriculture as a result of which
been markedly
factor of breakage on spinning and weaving operations has
affected.
the tending
A stronger staple used in Improved machines makes possible
created by this
of more machines. In this as in other industries the problem
situation is greatly accentuated in times of depression.
of such disThe cotton textile industry has taken account of the problem
of fair complacement of employees in formulating its proposed code
petition for the industry.
under
It has believed that the sound line of attack on this situation
use of improved
existing circumstances is not to limit the development and
decreasby
it
meet
to
but
mechanical devices and technique and materials,
the industry with
ing the hours of labor of the individual employees in
possible an increase
accompanying adjustment in wages and so making
the wage
In the number of such employees, and at the same time improving
situation.
of the
This method makes It possible under the abnormal conditions
which
emergency to absorb into the industry itself the services of employees
handling and
the progress in mechanical devices and technique in their
.
unnecessary
improvement in raw material would otherwise make
The reduction of the hours of work of the individual also directly reduces
of modern complicated
the energy required in the continuous handling
mechanical devices.
It is by such solutions, it is believed, that the community can continue
and efficiency,
to get the benefit of the American instinct for inventiveness
of
with its great possibilities for further raising of the general standard
may otherwise
living, and yet avoid the hardship to the individual which
arise in times like these.
The attention of the administrator under the National Industrial Recovery
through these
Act Is called to the method which this industry has used
or displaced
provisions of the proposed code in its attempt to absorb
examination
by mechanical and raw material improvement, and invites the
of the administrator of the actual workings of the industry in this respect.
n in
co-operatio
full
its
The Cotton Textile Industry Committee offers
such an examination.
The committee believes that the revolutionary reduction of individual
be effected by
working hours and resulting spread of employment that will
of dealing with
the proposed code is a constructive and far-reaching method
out of the
growing
industry
the
in
this as with the numerous other problems
present emergency.
Respectfully submitted,
THE COTTON TEXTILE INDUSTRY COMMITTEE.
By George A. Sloan,
T. M. Merchant,
Ernest N. Hood.
Plans for Curtailment of Cotton Crop and Levying
of Process Tax Announced by Secretary of Agriculture Wallace—Delay in Issuance of Announcement Reported Occasioned by Protests by Southern
Senators and Representatives.
Plans designed to effect the withdrawal of 10,000,000 acres
of cotton land from production this year were announced on
June 19 by Secretary of Agriculture Wallace. Under the
plan cotton producers will be asked to sign contracts offering
to lease a definite amount of their cotton acreage to the
Secretary of Agriculture. The Department's announcement explaining the plan in brief said:
by the Secretary to
If s sufficient number of offers have been received
accept them. An effort will
justify an acreage reduction program, he will
a week or 10 days after the cambe made to act upon these offers within
paign has been launched.
for his land Is contained
The consideration offered the cotton producer
in two alternative plans: consideration of co-operation, based on the pro(1) A cash payment in
acre for land yielding on
ductivity of the land, and ranging from $6 per
cotton per acre to $12 for land yielding
lint
pounds
100
around
average
the
acre, plus an option on Governmenton the average 275 pounds or more per
which the producer agrees to retire
held cotton in an amount equal to that
per pound.
from production, and at a price of six cents
cotton option, the amount ofsuch beneilt
(2) A cash benefit without the
for land yielding from 100-124 pounds
on a per acre basis, to range from $7
pounds or more per acre.
per acre to $20 for land yielding 276
4387
reduction
If a sufficient number of offers is received to insure effective
to pay benefits.
of production, and the Secretary announces his intention
marketing
the
of
a processing tax must be in effect as of the beginning
the tax will be
year, which for cotton is about Aug. 1. The amount of
his detercomputed after a proclamation by the Secretary announcing
between
mination to pay benefits and under the law will be the difference
current
The
the current average farm price and the fair exchange value.
In the
statistics
available
from
average farm price is to be determined
Department of Agriculture.
determined
The amount of acreage to be retired from production will be
amount
by the Secretary after the offers have been received. No definite
of proamount
sufficient
of acreage is predetermined except to procure a
portion
duction to be retired as will effectively eliminate a substantial
of this year's crop and reduce excessive supplies.
"Cotton Week," beginning during the week of June126,
will be held throughout the Cotton Belt—a week's intensive campaign to procure the producers' co-operation,
according to the Department's announcement. In Associated Press accounts from Washington June 19 it was
stated:
proUnless acreage capable of taking 2,000,000 bales of cotton out of
duction is leased, Secretary Wallace said that he did not believe there would
South
be any use in applying the program. The average yield in the
is one-third of a bale an acre and 6.000,000 acres has been tentatively
set as a minimum. ...
ly
Secretary Wallace estimated that if his program succeeds approximate
in addition to the
8100.000,000 will be paid growers as rental benefits
use of $50,000,000 to acquire full title to Government-held cotton on
which growers will receive benefits as a result of being able to buy It at
leas than market prices.
In a Washington advice to the New York "Times" June 19
it was stated that Secretary Wallace made no secret of the
fact that continuation of the recent price advance in cotton
might make impossible the levying of a processing tax.
From the same account we quote:
spinners
The maximum processing tax will be levied against cotton
average
beginning Aug. 1. This tax will amount to the difference in the
farm price for cotton at the time it becomes effective and the pre-war
parity price of 12.4 cents a pound, representing the average farm price
for cotton from August 1909 to July 1914. For this reason, the amount
of the tax cannot be determined until later.
It was pointed out in the Associated Press advices that
if the tax were put into effect as of June 16 it would be
4.1 cents a pound. It was likewise noted that Secretary
Wallace stated that the current farm price may go up or
down before Aug. 1, this either increasing or decreasing the
maximum he will levy. In a dispatch June 17 from Washington to the "Times" it was stated that the announcement,
set for June 17 by Secretary Wallace, of the cotton acreage
reduction plan decided on by the Agricultural Adjustment
Administration, was postponed until 11 a. in. Monday,
June 19, as the result of protests by Southern Senators and
Representatives and agricultural commissioners of the
cotton States. The dispatch also said:
Despite the opposition of Senator Smith and even more dire predictions
by Senator Thomas,the Adjustment Administration prepared to go forward
with Its control program, including a 4-cent processing tax on cotton.
At the Department of Agriculture it was said that announcement of the
program to-day was deferred because certain pertinent statistical data had
..
not been obtained and not because of any opposition to the program. .
Protests at Meeting.
A meeting was held at the Capitol last night, attended by members of
the Senate and House Agriculture Committees, George N. Peek. Administrator of the adjustment program, and Mr. Tugwell, Assistant Secretary
of Agriculture.
Senator Smith, who, as Chairman of the Senate Committee on Agriculture. conducted the Farm Bill successfully through the Senate, declared
that imposition of the processing tax would work a great hardship at tots
time. Its 4-cent tax were imposed with cotton selling at 10 cents a pound.
prices at New York, New Orleans and other cotton markets would be forced
down to six cents a pound to absorb the tax, he said. This would apply
on all export cotton, which embraces 55% of the annual production, with
y
resulting depression of prices, for the 45% of production domesticall
consumed.
Thomas Pleads with Wallace.
To-day Senators Smith and Thomas visited the Department of AgriSecretary Wallace their hostility to the processingto
culture and reiterated
tax proposal.
Senator Thomas followed his visit with a letter to the Secretary, in
which he field:
cotton will
It is my interpretation that any processing tax assessed on
tax should be four cents
come directly out of the farmer's pocket. If the
levy of $20 per bale
per pound, then the levying of such a tax is a direct to
forcing the cotton
against the cotton farmers of the South. In addition
te higher
farmer to pay this direct tax, he Is required to pay a proportiona
price for the finished and manufactured products from cotton.
ed
products
the
manufactur
of
price
The
follows:
is
as
My reasoning
from cotton is and will be controlled, in the first instance, by thesupply
of cotton:secondly, by the demand for such cotton manufactured products.
It must be admitted that, in the end, the consumer pays the full price for
such manufactured products.
Out of this final or retail price the following secure their respective
portions: First, the retailers profit; second, the wholesalers' profit;
third, the manufacturers' profit; fourth, the handlers'-ginners'-compressers' commission and distributors' profit; fifth, the four cent tax to
the Government,and sixth, the balance, if any, will go to the cotton farmer.
Senator Thomas added:
Since practically every other industry is receiving direct subsidies from
the Federal Treasury and inasmuch as the Congress has provided a direct
subsidy for financing a reduction of acreage progress, as the representative
of a cotton State I must protest the assessment of such tax.
In the opinion of some members of the Administration there is no justification for taking money out of the Federal Treasury to eliminate the
recurring cotton surplus, which now amounts to 13,000.000 bales. It
Is the spirit of the Agricultural Adjustment Act that payments to growers
for reducing agreage should be on a self-supporting basis, it was pointed
out, and this fact is no( altered by the Bankhead amendment to the In-
4388
Financial Chronicle
dustrial Recovery Act which sets aside a $100,000,000 fund for production
control.
The tentative program on cotton calls for the elimination of about
10,000,000 acres now under cultivation by Government leasing agreements, to be supplemented by allowing planters to take options on the
2,500,000 bales of Government-owned cotton and resell it at higher prices.
Application of the tax would make more difficult the successful operation of the Industrial Recovery Act, according to Senator Smith, because
of the uncertainty it would cause in working out agreements for control
of hours of labor and the allocation of production.
June 24 1933
Production Division; C. A. Cobb, Chief, Cotton Production
Section, and Lawrence Myers, Economic Adviser, for cotton,
Agricultural Adjustment Administration.
The announcement issued June 19 by the Department of
Agriculture said:
I have received telegrams and letters from the farmers themselves from
Texas to the Atlantic Coast urging that this program be put into effect.
They realize that if something isn't done the present year's crop will be
sold at sacrifice prices. I have the utmost faith in the plan we have worked
out which places the responsibility directly upon the individual producer.
I have every confidence that he will do his part to improve a very bad
situation. We are proceeding to put this program into operation at once
State extension directors and county agents are being sent full information
as to the contracts the growers will be asked to sign. To the individual
grower, I would say, see your county agent, and to the citizenship of the
South I would urge the fullest measure of co-operation to this enterprise
that so definitely offers relief from depressing influences that have adversely affected the entire region. The success of this program means
the restoration of buying power and will bring better times to all my people
in the Cotton Belt.
The South's cotton producers will be given an immediate opportunity
to decide whether an acreage reduction program shall be attempted.on
this year's crop.
Announcement of a plan by which cotton farmers, with the co-operation
of the Agricultural Adjustment Administration, may retire at least 10,000,000 acres of cotton land from production this season was made to-day
by Secretary of Agriculture Henry A. Wallace and Administrators George
Peek and Charles J. Brand, with the approval of President Roosevelt.
Plans for a campaign to enlist the co-operation of the cotton producers
throughout the South have been completed. The Agricultural Adjustment
Administration will launch "Cotton Week" in the South during the week
of June 26, a week of intensive effort to present to producers the opportunity to sign in sufficient numbers to insure the success of an acreageadjustment program.
Contracts for the South's approximately 2,000.000 cotton producers are
being printed and will immediately be sent to the State extension forces.
Local committees are being organized in approximately 820 cotton producing counties. Contracts will be in the hands of individual cotton
producers during "Cotton Week"—the period set aside for signing contracts to take out of production a certain portion of the producers' land
now planted to cotton and in accordance with the purposes of the Agricultural Adjustment Act.
The cost of this program, if 10,000,000 acres are taken out of production, will depend upon the manner in which producers choose to offer
their cotton acreage to the Government under one or the other of two plans
that have been devised.
If enough farmers offer to take their land out of production so that the
Secretary of Agriculture is satisfied that the plan will succeed, he will
accept them and the contracts with the cotton farmers will result. Payments will then be made and the cotton options granted in accordance
with such contracts. The Secretary will proclaim the payment of the
sums provided in the contracts and a processing tax must, under the law,
go into effect at the beginning of the marketing year for cotton, which
is about Aug. 1.
It was pointed out by the Agricultural Adjustment Administration that
there is absolutely no discretion with the Secretary of Agriculture to decide
whether such a tax should be levied. The Agricultural Adjustment Act
expressly provides that when the Secretary determines that benefit payments
are to be made with respect to cotton or any other commodity he must
proclaim such determination and a processing tax automatically goes
into effect at the beginning of the marketing year next following. It
makes no difference under the statute that an appropriation is available
for the payment of any portion of the considerations involved.
The Secretary does have the function of determining the rate of tax
which, under the law, is the difference between the current average farm
price and the fair exchange value. This difference is determined from
available statistics of the Department of Agriculture. The rate of the
processing tax will be announced by the Secretary after he has received
and accepted enough offers from the farmers to take cotton land out!of
production. That tax must go into effect at the beginning of the marketing year, probably Aug. 1, if the program is adopted.
The contracts which are to be forwarded from the Agricultural Adjustment Administration provide that for a definite consideration the cotton
producer offers to retire from production a described portion of his cotton
acreage. Each farmer may take out of production not more than 40%
of his land now planted to cotton. The Secretary of Agriculture will
probably reject offers of less than 25% of the acreage of any producer
unless such acreage is very convenient to check or the yield is unusually
high. If a sufficient number of these offers to lease are received by the
Agricultural Adjustment Administration, the Secretary of Agriculture
will declare the plan operative and proceed with the disbursement of the
payments and the distribution of options under the revised Smith option
plan.
The application which the cotton producer is asked to sign will constitute an irrevocable offer from him to the Secretary of Agriculture that
he will remove from production a certain portion of his cotton land for
cash payments averaging between $8 and $9 per acre, plus an option at six
cents a pound on Government-held cotton. The amount of cotton optioned to each producer will be based on the amount that the acreage taken
out of production would ordinarily produce.
The payment would be based on the productivity of the land. The
amounts to be paid, in combination with the rights to buy Governmentheld cotton at six cents a pound, would range from $6 per acre for land that
produces an average of 100 pounds to the acre, to $12 for the highest yield
land.
An alternative plan is offered to producers who do not desire an option
on Government-held cotton. This plan contemplates a cash payment
which would also be based on the average yield of the land and would
range from $7 for 100-pound land to $20 for the highest-yield land, proclueing 275 pounds to the acre or more.
The Agricultural Adjustment Administration, having considered the
cotton problem carefully for the past several weeks, has geared its machinery to make a prompt decision on the program when signed contracts
are compiled in the field and forwarded to Washington. The results of
the week's campaign will be immediately consolidated and the Secretary
of Agriculture hopes to announce within a week or 10 days after the campaign is launched that a sufficient number of offers have been received
to insure the success of the voluntary co-operative program.
The Department of Agriculture is engaged at the present time in completing its arrangements to take over approximately 2,375,000 balm of
cotton held by the Farm Credit Administration. With the use by the
President of a portion of the $100,000,000 made available through an
amendment to the National Industrial Recovery Act, known as the Bankhead amendment, the Secretary of Agriculture will be enabled to purchase
cotton at a price which will permit him to option it to the participating
cotton farmer in an amount equal to that which he retires from production
and at a price of six cents a pound. The original Smith cotton option
plan was amended to provide for this change.
The combination of cash acreage payments and options on cotton at a
price substantially below the present market price offers the cotton producer an opportunity to be compensated for the cost of bringing the acreage
he takes out of production to its present stage and also to have the same
amount of cotton to market next fall as he would have had if he had not
participated in the plan.
The administration of the plan, if the farmers offer to
reduce a sufficient amount of their acreage to justify the
attempt, has been assigned to Chester Davis, Director,
The Department also announced as follows on June 19
the plan for applying the Agricultural Adjustment Act to
the 1933 cotton crop:
Steps Farmers Must Take.
Representatives of millers, bakers and wholosale grocers will confer
with Internal Revenue Bureau officials here Monday to devise methods
for applying the wheat-processing tax to millers' stocks of flour, which,
under the law, are subject to the 30-cent levy announced yesterday by
Secretary Wallace.
Meanwhile, throughout the Western wheat belt county authorities
were planning meetings of wheat farmers to explain to them what they
must do to share in the distribution of the 8150,000,000 fund to be raised
by the processing tax.
Following the county meetings the wheat farmer must join a county
wheat production control association. He registers with the association
the average number of acres cultivated on his farm and the average yield
an acre for the last three years. His application for an allotment is printed
in the county newspaper.
After receiving a production-allotment certificate based on five-eighths
of his average three-year production, the farmer signs a contract with
the Agricultural Adjustment Administration under which he agrees to
reduce his wheat acreage in 1934 and 1935 by an amount to be specified
by that Administration which cannot exceed 20% of that of the last three
years.
This agreement entitles the grower to receive in 1933. 1934 and 1935
a bounty of 30 cents a bushel on five-eighths of his average crop harvested
in the three-year-base period. This proportion is estimated to represent
the amount of each growers'output which went into domestic consumption.
In applying this formula, the Administration selected the preceding
five-year period so as to give full allowance for crop variations.
The processing tax is to be collected from millers by the Bureau of
Internal Revenue, according to regulations now being drafted. From the
Bureau of Internal Revenue the tax will be passed back to the voluntary
county organization, which in turn will pay the members. In actual
operation the benefits will be paid to growers before being received from
millers from a fund of $200,000,000 allowed the Secretary of Agriculture
for that purpose.
Secretary Wallace, in announcing the cotton acreage
reduction program on June 19, made the following statement:
The Department of Agriculture feels that it is desirable that a substantial portion of this year's cotton production be eliminated. With the
prospects for an unusually high yield of cotton this year and a 12,000.000
to 13,000,000 bale carryover of American cotton, it is believed that the
price of cotton this fall, if no elimination of production occurs, may be
disastrous to the producer. If the reduction sought is achieved, the situation will be materially improved and the prospects for a price approaching
the fair exchange value definitely strengthened. It has long been recognized by the cotton producer and the Department of Agriculture that the
mounting surplus of cotton, more than the normal carryover at present,
must be reduced if any material improvement is to be had in the cotton
situation.
The cotton grower should, therefore, realize that the price of cotton this
fall when he markets his crop will be determined largely by fundamental
economic factors which will be adverse unless something is done. This
plan, if it is accepted by the cotton producers, offers an approach to adjust
production more nearly to demand and will be the first step in the reduction of this tremendous surplus.
George Peek, administrator of the Agricultural Adjustment Administration, discussing the policy of presenting the
growers with the opportunity to make the choice, had the
following to say on June 19:
In undertaking a program so broad in its scope, in which the more than
$100,000,000 may be paid to cotton producers, it was decided that the
wisest course to pursue would be to place the matter squarely before these
producers. This program does just that. It will be the opportunity
and the responsibility of the cotton producer to decide what we shall do.
If enough of the growers offer their cotton acreage to the Government
to insure that a reduction in acreage can be obtained sufficient to justify
the program, plans will be carried forward with all possible dispatch.
The co-operation of the producers is essential to any of the adjustment
programs. It must be known definitely and in advance what the cotton
producer will do. The powers of the Government under the provisions
of the Agricultural Adjustment Act are offered the cotton grower if he
desires to make use of them. We only seek to point the way. The grower
must decide whether he will follow the program which we believe will
achieve desirable results.
C. A. Cobb, Director of Cotton Production, under whose
direction the cotton program will be administered, believes
that the cotton producers of the South are anxious for a
plan that will assist them in solving their difficulties. He
said:
Financial Chronicle
Volume 136
The Secretary of Agriculture, Henry A. Wallace, Administrator George
N. Peek, and Co-Administrator Charles J. Brand of the Agricultural
Adjustment Administration, with the approval of the President. announce
the following plan of co-operation between the Government and the cotton
growers of the United States for bringing supply and demand into better
balance and for bringing prices to the parity contemplated by the law.
(1) Through the instrumentality of the Federal and State farm extension services, vocational teachers, volunteer committees set up in the
Cotton Belt, and other available agencies, the Administration will ascertain
to what extent the producers of cotton are willing to take out of production
lands now planted to cotton in consideration of benefit payments,or options
plus benefit payments, in accordance with its proposals. The willingness
of the producers is to be expressed in the form of signed offers prepared
in conformity with regulations prescribed by the Secretary of Agriculture.
(2) Within a period of time to be prescribed and published by the Secretary, these agencies will confer with such producers for the purpose of
presenting the proposals of the Agricultural Adjustment Administration
and of ascertaining to what extent such producers will sign binding offers
for the reduction of cotton acreage.
(3) The Administration will submit to the producers for acceptance or
rejection the following proposal, which, if and when signed by growers
and by the Secretary, will constitute a contract:
(a) That the producer agrees to take out of cotton production a certain
acreage now planted to cotton.
(b) That as a consideration for the abandonment of such acreage, the
grower shall receive the following:
Either (1) A cash payment with cotton option as stated in such offer
signed by the producer. The amount of such cash payment is to be on
a per acre basis, subject to the regulations prescribed by the Secretary, and
In accordance with the following schedule:
SCHEDULE OF PAYMENTS WITH OPTION.
Yield per Acre.
Benefit Payment per Acre with Option.
100 to 124 lbs
125 to 149 lbs
150 to 174 lbs
175 to 224 lbs
225 to 274 lbs
275 lbs. and over
Cash plus option on Government cotton at Sc. a lb.
Cash plus option on Government cotton at Sc. a lb.
Cash plus option on Government cotton at Sc. a lb.
Cash plus option on Government cotton at Sc. a lb.
Cash plus option on Government cotton at Sc. a lb.
Cash plus option on Oovern-sent rotten at 6e. sib.
Or, at the Grower's Election (2) A cash benefit without cotton option as
stated in such offer when signed by the producer. The amount of such
benefit payment is to be on a per acre basis, subject to regulations prescribed by the Secretary of Agriculture, and in accordance with the following schedule:
SCHEDULE OF PAYMENTS WHEN PAYMENT IS MADE IN CASH ONLY.
$6.00
7.00
8.00
10.00
11.00
12.00
Yield per Acre.
Payment per Acre
Without Option.
100 to 124 lbs.____
125 to 149 lbs..___
150 to 174 lbs
$7.00
9.00
11.00
Yield per Acre.
175 to 224 lbs.
225 to 274 lbs.
275 lbs. and over
Payment per Acre
Without Option.
$14.00
17.00
20 no
These voluntary agreements above referred to are to be in a form prescribed by the Secretary which, when signed by the producers, is to constitute an irrevocable offer for a limited, specified period of time during
which the Secretary may accept or reject it.
(4) The agencies selected to obtain the offers of acreage will, in accordance with regulations prescribed by the Secretary, transmit the data
furnished by these offers to the Agricultural Adjustment Administration.
(5) If the Administration shall decide to take cotton out of production
In accordance with this plan it will, within the time designated in the
offer, give notice to the producers whose signed offers have been accepted.
It shall then be the duty of each such producer to comply with the regulations of the Secretary in the matter of taking out of cotton production
the acreage covered by his offer. Included in the regulations shall be a
requirement that the premises will be inspected prior to and subsequent
to taking the acreage out of production. Upon satisfactory showing of
compliance with the terms of the contract, each producer will receive the
cash payment to which he is entitled and, in addition, if he has so
elected,
he will receive a non-transferable option contract under which the Secretary agrees to sell to the producer a stipulated quantity of cotton not in
excess of the amount of the reduction in production which is estimated
to have resulted from the acreage reduction.
(6) In accordance with the Act a processing tax shall be in effect on
Aug. 1 1933 for the amount required by the terms of the Act. When and
if it Is determined to take a definite cotton acreage out of production, the
Secretary of Agriculture will, jointly with the Secretary of the Treasury,
estimate the amount of money which will be required currently for such
purposes. Such sums as are needed from time to time shall be advanced
to the Secretary of Agriculture. Benefit payments will be made promptly
after producers have complied with their agreement.
(7) Land taken out of cotton production may be used for the production
of soil improvement or erosion preventing crops or food and feed crops
for
home use.
(8) The work ofcarrying outtheforegoing plan has been assigned to
Chester
Davis, Director, Production Division; C. A. Cobb, Chief, Cotton
Production Section, and Lawrence Myers, Economic Adviser, Agricultural Adjustment Administration. The State and Federal extension services,
under
the direction of Dr. C. W. Warburton, will co-operate in carrying out th..
field work as will the extension services of the various States.
Policies on Corn, Hogs and Market Problems Under
Agricultural Marketing Act Being Developed.
Initial policies for applying the Agricultural Adjustment
Act to corn and hog production and marketing problems
are now being developed as rapidly as possible, it was stated
jointly June 17 by Dr. A. G. Black, Acting Corn-Hog Production Chief, and Guy C. Shepard, Chief of Meat
Processing, who is in charge of packing house trade agreements. Appointed recently to serve during an indefinite
leave-of-absence period from his duties as agricultural economics chief at Iowa State College, Dr. Black arrived in
Washington June 14 to take charge of the hog and corn
production adjustment program. Mr. Shepard took his
administrative post several week ago. We quote further
from an announcement issued by the United States Departmerit of Agriculture on June 17:
Detailed plans will not begin to take definite shape, however, until
after preliminary conferences with representatives of corn and hog pro-
4389
ducers, meat processors and food distribution agencies, the two administration officials said.
As a result of a recent preliminary meeting in Chicago with Mr. Shepard,
representatives of the packing industry are now preparing trade agreements aiming at higher hog prices, which eventually will be submitted
for consideration by the Secretary of Agriculture. Henry A. Wallace.
Mr. Shepard is being assisted in the Meat Processing Section by George
F. Fongar, former packing-house man, who will be stationed in a branch
office in the Mercantile Exchange Building, Chicago, Ill., and by S. W.
Lund, also of Chicago, who will be located at the Agricultural Adjustment
Administration office in Washington.
Processing Tax of About 30 Cents on Wheat Under
Agricultural Adjustment Act—Percentage of Acreage Reduction in 1934 and 1935 Not to Exceed 20%.
On June 16 Secretary of Agriculture Wallace announced
the program for processing taxes and acreage reduction, as
applied to wheat, under the Farm Relief or Agricultural
Adjustment Act signed by President Roosevelt on May 12,
the text of which was given in our issue of May 20, page
3415. The program with respect to cotton was announced
on June 19 by Secretary Wallace, and reference thereto
appears elsewhere in our issue to-day. In the case of wheat,
Secretary Wallace indicates that no general curtailment is
proposed for this year's crop, but that the percentage of
acreage reduction in 1934 and 1935, which may be asked,
while still undetermined (pending the outcome of the London
Wheat Conference), is in no case to exceed 20%. The
announcement also says that the exact amount of the processing tax cannot at this time be stated, "but on the
basis of prices as they existed the first half of June, the
maximum tax possible under the act would be about 30
cents." The Administration also said that "not less than
$150,000,000, it is estimated, will be available for distribution as the first year's payments to farmers to compensate them for agreements to reduce their acreage of
wheat in 1934 and 1935."
The Washington correspondent of the New York "Journal
of Commerce" said:
Four Regional Parleys Called.
In an effort to acquaint the farmers with the provisions of the wheat
program and at the same time gather necessary preliminary information
preparatory to putting the plan into operation this season, the Administration to-day decided to hold four regional conferences in the principal wheat
producing regions within the next two weeks.
The four meetings are scheduled for Kansas City, Spokane, Fargo, N.D.,
and Columbus, Ohio.
Decision to hold the meetings was reached at a conference to-day of
Administration officials and members of the extension service. Much
of the field work of organizing farmers under the wheat plan will be done
by the extension service.
Before State and county allotments can be made information regarding
conditions in the different regions will be needed. To get this information
and also to answer questions of field workers who will work in the adjustment program the Administration has called in extension service workers
in the various States and from the agricultural colleges for the regional
meetings.
Rapid Survey Proposed.
Those who attend each regional meeting will make plans for a rapid
survey by county agents in every wheat-raising county to get information
on local conditions which the Administration needs before beginning It
program.
M. L. Wilson. chief of the wheat production section, will attend the
regional meetings. Mr. Wilson announced to-day that the wheat adjust,,
ment campaign among farmers will be timed so as not to conflict with the
wheat harvest. He also pointed out that the adjustment program had
nothing to do with a farmer selling his wheat crop and that those farmers
who sell their crop will be entitled to adjustment payments on the same
basis as those who hold their wheat.
At the conference to-day, various phases of the Agricultural Adjustment Act and the wheat adjustment program were explained in addresses
by Secretary of Agriculture Wallace; George N. Peek, administrator of the
act; Chester C. Davis, director of the production division; C. B. Smith, in
charge of the office of co-operative extension work; M. L. Wilson, chief,
and A. J. Weaver, economist of the wheat production section.
The list of meetings and the States which will be represented at each
follow:
At Kansas City—Iowa, Missouri, Nebraska, Kansas, Colorado, Wyoming. Oklahoma, Texas and New Mexico.
At Spokane—Washington, Idaho, Oregon, California and Utah.
At Fargo—Minnesota, North Dakota, South Dakota and Montana.
At Columbus—New York, Pennsylvania, Delaware, New Jersey, Maryland. West Virginia. Virginia, North Carolina, Kentucky, Tennessee,
Ohio, Michigan, Indiana, Illinois and Wisconsin.
The following summary of the wheat program was made
public as follows by Secretary Wallace:
1. Contracts to be offered farmers for acreage reduction on 1934 and 1935
wheat crops up to a 20% maximum of their average for the past three years.
2. Co-operation by the Agricultural Adjustment Administration with
existing agencies to facilitate export movement of wheat as provided by the,
Act, within the limits of international agreements.
3. Possible taking out of the market of a portion of the supply of certain
types of wheat produced in excess of requirements this year.
Payments.
Compensating payments to be offered farmers in the years 1933. 1934
and 1935.
Payments to be contingent on farmers making and fulfilling contracts to
reduce their acreage of wheat in 1934 and 1935, if reduction is required.
Payments to be made this year on the domestically consumed portion
of the three-year average production of each wheat grower who signs the
acreage reduction contract.
Two-thirds of the compensatory payment this year expected to be made
about Sept. 15, the rest upon proof of reduction in the next planting.
4390
Financial Chronicle
June 24 1933
lift for the wheat-price structure. A shift of lands taken out of wheat
production into soil building or erosion-prevention uses, or into crops not
nationally produced is contemplated.
The wheat program is described by Agricultural Adjustment AdmInistration executives as the first major step on "the new untrod path" of
adjusting American agriculture to changed world conditions, and the first
large-scale attempt at economic planning for agriculture.
In direct charge of the production part of the program are Chester 0.
gumption.
Davis, general crop-production director; M. L. Wilson, production chief
The amount of the tax to be the maximum under the law and the date to
for wheat, and A. J. Weaver, senior economic specialist for wheat.
be the beginning of the 1933 marketing year, to be fixed by the Secretary,
The voluntary character of acreage reducten and its reliance upon coThe aggregate amount to be distributed to wheat farmers the first year
operation of farmers for success were emphs-ized by all executives of the
ls tentatively estimated to total approximately $150,000,000.
Agricultural Adjustment Administration. Tots plan is represented as being
Acreage Reduction.
wholly in the nature of an offer of governmental assistance to the farmer,
with success entirely dependent upon his as.-nt and co-operation.
No general curtailment of this year's wheat crop,
"This new piece of social machinery we call the Agricultural Adjustment
Amount of reduction, if any, in succeeding plantings to be conditional
Administration is ready to go," Secretary W . ace said. "It remains to
upon outcome of world wheat and economic conferences at London.
be seen whether the spirit which can keep It going and on the right road
Acreage reduction which may be required of farmers in no case to exexists.
coed 20%.
"If it operates as we hope it should bring to the co-operating grower a
The plan to end with the 1935 crop, or else be followed by a new program
measure of justice long overdue, and for the rest of the nation it will reit that is required by continued lack of world adjustments,
plenish a deep well of buying power.
The Problem of Wheal.
"The plan, quite frankly, faces certain hard facts and proposes to deal
States,
United
the
in
are
stocks
with them," Mr. Wallace said. "Twelve years after It should have been
wheat
surplus
Half the world's
done we now must get into a position to adjust our wheat production to
This country's carryover is estimated at about 360 million bushels,
the fact that the United States changed, during the war, from a debtor to
The four main exporting countries (the United States, Canada, Australia,
export
and
domestic
all
a creditor nation. Suppose we begin to produce, for a change, for the
Argentina) have seen their excess supplies over
market that actually exists. If later we happily find a wowing market,
needs grow from 270 million bushels to 594 million bushels in 10 years.
expansion to supply will be simple."
European importing countries, partly to balance debt paymenta, have
Decision to include the acreage reduction plan in its program this year
done two things through use of tariff and quota systems: (1) France,
follows a conference of wheat-industry representatives in Washington
Germany and Italy have reduced net imports until the total this year will
May 26, when such action was strongly recommended.
be only about 40 million bushels, and the United Kingdom is reducing
"In mapping our program," Administrator Peek said, "we have conaldimports and encouraging home production; (2) importing Europe has inered carefully the suggestions of every section of the wheat industry—the
creased its own annual production from 939 million to 1,251 million bushels
man who grows wheat, the man who grinds it into flour and the man who
In 10 years
bakes it into bread. Our first duty is to the farmer, but while we seek
The United States has changed from a debtor to a creditor nation, hence
long-delayed justice for him, we propose also to be watchful of the interests
losing sales to European customer countries once willing to take wheat
of others, including the consumer.
in payment on debta,
history.
in
"The plan is financed by a processing tax, but this should not necessarily
Prices of wheat in the past year have fallen to the lowest levels
mean the entire tax is to be passed on to the consumer.
16
June
on
nt
announceme
the
We likewise give as follows
"For example, in the pre-war period of 1909-1913, hard winter wheat
was selling at 95 cents a bushel at Kansas City,flour sold for $4.38 a barrel
by the Department of Agriculture:
and the retail price of bread was 6 cents per pound.
A three-year program to make the Agricultural Adjustment Act effective
"But in 1932, when wheat at Kansas City was 46.9 cents a bushel, and
for wheat was announced to-day by Secretary Henry A. Wallace and
flour was $3.85 a barrel, bread sold there at 6.7 cents a pound.
Administrators George N. Peek and Charles J. Brand, with the approval
"In other words, while wheat prices fell more than 50%. bread prices
of President Roosevelt.
rose 10%. Such a spread suggests that at least part of the processing
These executives, who are responsible for administration of the Act,
charge should be absorbed in the spread between the producer and conannounced that payments to wheat farmers in consideration of their cosumer."
operation will be offered to those who sign contracts with the Agricultural
Under the plan each State is to be allotted for the purpose of determining
Adjustment Administration to reduce their acreage if required in 1934
compensating payments to co-operating farmers that number of bushels
and 1935.
of wheat which represent its proportion of the average domestic consumpThe aggregate amount to be distributed to wheat farmers this year is
tion for the 5-year period. This 5-year base was found the fairest and
tentatively estimated at approximately $150,000,000.
most representative method of making both State and county allotments.
The announcement follows closely Thursday's [June 151 statement at
The county production allotments, In turn, will be apportioned on the
the World Economic Conference by Premier R. B. Bennett of Canada
same basis. Within the county, allotments to individual farms will be
favoring international agreementfor provisional control of wheat production,
made by county wheat production control associations on the basis of the
The program provides the United States with machinery to fulfill any
3-year average production, and these allotments will be published in the
International agreement for acreage reduction that may be made at the
county press.
London wheat conference where Premier Bennett represents Canada.
Wheat farmers who. by signing the agreement, become eligible to share
of delegates from
or Pending the outcome of the London wheat conferencethe
in the distribution, shall organize a county wheat production control assopercentage of
the United States, Canada, Australia and Argentina,
dation, choosing its director, whose salary and expenses will be withheld
acreage reduction which may be asked of American wheat farmers in 1934
Pro rata from the compensating payments.
and 1935 is undetermined, but in no case will it exceed 20%.
in the
"A fundamental difference between this plan and most prior proposals
Two main lines of approach to the wheat problem are disclosed
to raise wheat prices," Mr. Davis said, "Is that this program offers the
They may
program.
three-year
's
Administration
Adjustment
Agricultural
farmer, in an improved income from wheat, a direct incentive to reduce
be employed separately or in combination, as circumstances warrant,
his production when curtailment is required.
The two chief methods are:
"Hitherto the individual wheat farmer's interests have run counter to
First, crop reduction up to a 20% maximum in 1934 and 1935 if such
those of the group," Mr. Davis pointed out. "The individual's interest
curtailment should be required.
was to expand when he thought the group would curtail. This clash of
Second, co-operation by the Agricultural Adjustment Administration
as provided
with existing agencies to facilitate export movement of wheat
interests long has made organized curtailment impossible.
conflict
under the Act, but not including the use of measures which might
"But this plan holds out the compensating payments as a substantial
with any existing international agreement.
in
financial incentive to the individual farmer to hold down its own producWith the acreage reduction program ready to be put into operation
tion. It seeks to harmonize and identify the group's interest with that
program
1934 and 1935 if required, these methods are designed to give the
of the unit wheat farmer."
flexibility to meet all contingencies.
of all
The program aims to increase in some manner the buying power
to finance
The maximum processing tax under the law will be needed
farmers in this country. This Improved
wheat
of
the
1,200,000
nearly
announced,
was
it
program,
of
the...Agricultural Adjustment Administration
year, the
buying power is expected to stimulate demand for industrial products
The tax 113 to be collected beginning -with the 1933 marketing
many kinds, bringing renewed business and industrial activity and inSecretary,
the
by
later
proclaimed
to
be
date
precise
creased employment.
to-day, but on
The exact amount of the processing tax cannot be stated
The proposal adheres closely to specifications laid down by President
the maximum
the basis of prices as they have existed the first half of June
Roosevelt in his speech at Topeka, Kansas, last September.
tax possible under the Act would be about 30 cents.
It is voluntary, self-financing, contains within itself a curb upon overbe available for
Not less than 150 million dollars, it is estimated, will
It will not
compensate them
production and is recommended by the farm organizations.
distribution as the first year's payments to farmers to
1935 to an
stimulate dumping, and is to be decentralized in administration.
for agreements to reduce their acreage of wheat in 1934 and
to dismade
In event, it is
Supplementing the production-control plan, efforts will be
extent to be announced by the Department of Agriculture.
supplies in foreign markets, by methods not in
surplus
existing
pose
of
plantings
the
average
their
of
20%
exceed
not
announced, the reduction shall
conflict with international agreements.
for the preceding base period,
The Agricultural Adjustment Administration will co-operate with exdomestically con%The compensating payments are to be paid on the
the
!sting agencies to facilitate export movement of wheat as authorized by
each farmer
Burned part of the average production during the base period of
directly at reducing the carryover.
aimed
be
to
Act.
is
This
required.
if
acreage
who signs a contract to reduce
supply of types
program as
Possibilities of taking out of the market a portion of the
Secretary Wallace, Mr. Peek and Mr. Brand described the
Any
of wheat produced this year in excess of requirements will be studied.
wheat growers
promising substantial increase in the purchasing power of
of through
problem of
supplies of wheat acquired in this manner might be disposed
and as launching a systematic attack upon the long-neglected
other
through
or
relief agencies, the American Red Cross, for example,
income on
the wheat surplus. The program proposes to bring growers'
in the
non-competitive channels.
wheat consumed in the United States to the pre-war parity intended
The plan permits a free supply and demand price for wheat to operate
!awl'
and the
in
proceeds
all markets of the United States. When this open market price
lir Among farmers signing contracts two-thirds of the anticipated
the free
remaining
world price for wheat become adjusted the way will be open for
of the tax is planned to be distributed by about Sept. 15. The
farmer's
the
to
detriment
export movement of American wheat without
of contract as to
one-third would be paid upon evidence of fulfillment
income on that portion of his crop required for domestic use.
acreage planted in the fall of 1933 and the spring of 1934.
to-day that while
the
Department of Agriculture authorities pointed out
In order to receive a payment in consideration of his co-operation,
erecting
world wheat stocks have been rising, importing Europe has been
grower must do the following:
and the
Germany
and
barriers against wheat, and that Prance, Italy
Agriculture
the
by
required
if
proacreage,
their
and
encouraging
wheat
his
less
reduce
to
importing
Agree
(a)
United Kingdom all have been
average acreage
exports upon a
Adjustment Administration, by not more than 20% of his
ducers to grow more. Continued pressure of increasing
during the base period, and
in prices plunging
number of acres thati
contracted world market has resulted during the last year
(b) Sow to wheat, in a workmanlike manner, the
should produce the number o
at his average yield for the base period,
to the lowest level in centuries.
based. Growers
are
payments
his
which
on
and
him
income to parity
to
raising
while
allotted
bushels
The plan of curtailing farm production
forfeit payments.
failing to meet the terms of their contracts would
consumed part of the crop is compared by Department
domestically
the
on
contracting
assure
to
seeks
it
First,
is
twofold.
hours and higher
The object of the program
of Agriculture executives to proposals for shorter working
part of their production
the Industrial Recovery
farmers an income amounting to parity price on that
wages for labor in industry, contemplated in
either the American
of
independently
consumption,
domestic
be regarded
might
for
production
required
program. In one sense controlled wheat
direct financial incentive
or the world price. Second. by offering farmers
easier as well as more profitable days for farmers and
of
forerunner
the
as
to
undertakes
it
required,
when
to curtail their future wheat production
farmers' wives.
demand, providing a permanent
restore balance between supply and market
Total returns to farmers, part from payments in consideration of cooperation and part from price, are designed to secure pre-war parity under
the Act for that share of the farmer's crop consumed in this country, and
at the same time to provide a financial incentive for wheat acreage reduction
when required.
Processing Tax.
The plan to be financed by a processing tax on wheat for domestic con-
Volume 136
'Financial Chronicle
Lands taken out of wheat production are not to be devoted to other
nationally produced farm crops.
'rho administration cost is estimated to total not more than 2 cents a
bushel.
Wheat Processing Tax to Be Effective Probably July 8.
A. J. Weaver, head of the wheat division of the Department of Agriculture, told the National Millers' Federation
Convention in Chicago on June 21, that the processing tax
on wheat probably would go into effect July 8. Associated
Press advices from Chicago June 21 added:
i The task of compiling regulations to make the Agricultural Recovery Act
effective was about finished, he said, and another two weeks or so should
see the necessary machinery set up and ready for operation.
The tax was fixed at 30 cents a bushel, Mr. Weaver pointed out, and
since it was held that title to flour belonged to the miller until it was delivered to the jobber or retailer, It was probable that it would be applied to
flour, shipped before the effective date, but not delivered until after it,
because the miller would be liable to a tax on the flour.
Proclamation of Secretary of Agriculture Wallace on
Proposed Wheat Payments Under Agricultural
Adjustment Act.
Secretary of Agriculture Henry A. Wallace formally announced on June 20 his intention to make compensatory
payments, under the Agricultural Adjustment Act, to wheat
farmers who agree to adjust their 1934 acreage. The
proclamation follows:
UNITED STATES DEPARTMENT OF AGRICULTURE
Agricultural Adjustment Administration
I, Henry A. WaIlce, Secretary of Agriculture of the United States of
America, acting under and pursuant to an Act of Congress known as the
Agricultural Adjustment Act, approved May 12 1933, have determined
and hereby proclaim that rental and(or) benefit payments are to be made
with respect to wheat, a basic agricultural commodity.
In testimony whereof I have hereunto set my hand and caused the
official seal of the Department of Agriculture to be affixed in the City of
Washington this 20th day of June 1933.
(Signed) HENRY A. WALLACE,
Secretary of AgricuUttre.
•
Members of Labor and Industrial Advisory Boards
Provided by National Recovery Act Are Appointed
—Walter C. Teagle, A. P. Sloan Jr., Gerard Swope
and E. N. Hurley Among Names Listed—General
Johnson Fills Key Positions in Administration.
Members of the Labor and Industrial Advisory Boards
that will function under the provisions of the National Industrial Recovery Act were appointed on June 19. A third
Board, to represent the general public and to be known as the
Consumers' Advisory Board, is expected to be named shortly.
The Industrial Advisory Board was appointed by Secretary
of Commerce Roper, and includes the following:
Austin Finch, of Thomasville, N. C., President Thomasville Chair Co. and
Chairman of a committee of the Southern Manufacturers' Association, appointed in connection with the National Industrial Recovery Act.
Edward N. Ilurley, of Chicago, Chairman of the Board Hurley Machine Co.
Louis Kirstein, Vice-President William Filene's Sons Co., Boston.
Alfred P. Sloan Jr., of New York, President General Motors Corp.
Walter 0. Teagle, of New York, Chairman of the Board Standard Oil Co.
of New Jersey.
)erard Swope, of New York, President General Electric Co.
William J. Vereen, of Moultrie, Ga., cotton manufacturer and former
President of the American Cotton Manufacturers' Association.
Members of the Labor Advisory Board, who were appointed by Secretary of Labor Frances Perkins, include:
Dr. Leo Wolman, Economist, of Columbia University, Chairman.
John Frey, Metal Trades Department, American Federation of Labor.
Joseph Franklin, President International Boilermakers' Union.
William H. Green, President of the American Federation of Labor.
Sidney Hillman, President Amalgamated Clothing Workers.
Father Francis Haas, Catholic Welfare Council.
Rose Schneiderman, Secretary Woman's Trades Union League.
General Hugh S. Johnson, Administrator of the Act, on
June 19 announced the appointment of men to various "key"
positions In the administration. They included the following:
Assistant for Industry—Dudley Gates of Chicago, Vice-President of
Marsh & McLennan, insurance. Mr. Gates, who attended the University of
California, was engaged in banking in San Francisco until 1917. During
the war he was Secretary of the Capital Issues Committee in Washington.
Assistant for Labor—Edward F. McGrady, of Washington, legislative
representative for many years of the American Federation of Labor.
Chief of Legal Division—Donald R. Richberg, of Chicago, attorney for
railroad brotherhoods and recognized authority in public utility rate
litigation.
Chief of Research and Planning Division—Dr. Alexander Sachs, E'conomist, and a director of the Lehman Corporation of New York.
General Johnson explained that hearings and investigations in connection with applications for approval of codes
of fair competition will be conducted by Deputy Administrators, with bearings scheduled to begin early next week.
Six Deputy Administrators already named are:
W. L. Allen, of New York, consulting metallurgist and former Chairman
of Sheffield Steel Co., as well as former director of American Rolling
Mills Co.
4391
Professor Earl D. Howard, Northwestern University, formerly Executive
Secretary of the Committee on Industrial Relations of the Chamber of Commerce of the United States, later Vice-President of Hart, Schaffner & Marx.
Arthur D. Whiteside, President of Dun & Bradstreet, Inc., New York.
C. C. Williams, retired Major-General, former Chief of Ordnance during
the World War.
K. M. Simpson, consulting engineer and metallurgist, and President International Chromium Process Corp.
Nelson Slater, President of S. Slater dr Sons, manufacturers of cotton and
rayon textiles.
In announcing the above appointments, on June 19, General Johnson said that the Deputy Administrators will assist
him in conducting hearings at which all the units of an industry, including employers and workers, both organized and
unorganized, will be heard on any proposed code. The announcement then continued:
The code will fix minimum wages, maximum hours of work, and prescribe
regulations designed to eliminate unfair practices of every kind. No Deputy
Administrator will be assigned to preside over a particular industry and
none will participate in the hearing on the code of any industry in which
he has any interest.
Each Deputy Administrator will be counseled during the preliminary investigations and subsequent hearings by industrial, labor and consumer advisers who will be named by their respective Boards and chosen, in the
cases of the labor and industrial advisers, because of their outstanding reputation in the affected industry.
A code having been agreed upon, it will be submitted by the Administrator
to the President for approval. When finally approved by the President the
code will be in the nature of the "law merchant" for the industry.
Other appointments to the staff of the National Recovery
Administration announced on June 19 were:
Chief of Public Relations Division—Boaz Long, of New Mexico, formerly
of the Department of State and former Minister to Salvador and Cuba;
more recently engaged in advertising.
Personal Assistants to the Administrator—Robert K. Straus and F. M.
Robinson.
Chief of Administrative Division—John W. Power.
Fertilizer Recovery Committee Named to Co-operate
with Government Under Provisions o National Industrial Recovery Act—Horace Bowker, Chairman.
In furtherance of the plans of the fertilizer industry to cooperate with the Government under the provisions of the
National Industrial Recovery Act, it was announced on
June 9 that a special Fertilizer Recovery Committee, representative of the entire industry, has been organized and by
vote of the Board of Directors has been made a standing
committee of the National Fertilizer Association. The Chairman of this committee is Horace Bowker, President of the
American Agricultural Chemical Co., New York. The other
members are:
A. D. Strobhar, Southern Fertilizer & Chemical Co., Savannah, ViceChairman.
0. T. Melvin, the Gulf Fertilizer Co., Tampa, Secretary,
R.P. Benedict, Darling & Co., Chicago.
B. H. Brewster Jr., the Baugh & Sons Co., Baltimore.
Bayless W. Haynes, Wilson & Toomer Fertilizer Co., Jacksonville.
C. F. Hockley, the Davison Chemical Co., Baltimore.
L. W. Rowell, Swift & Co., Chicago.
John E. Sanford, Armour Fertilizer Works, Atlanta.
Wm.E. Valliant, Valliant Fertilizer Co.. Baltimore.
This committee recently met in Washington and has
since held regional meetings throughout the country to
familiarize members of the industry with the provisions of
the recovery bill.
S. H. Rifkind Tells Fertilizer Men of Aims in Enactment
of National Industrial Recovery Act.
"The National industrial Recovery Actis without question
the most far-reaching piece of legislation enacted by Congress during the present generation," declared Simon H.
Rifkind, formerly Secretary to Senator Robert F. Wagner
of New York and a member of the New York bar, in addressing the second session of the annual convention of the
National Fertilizer Association at White Sulphur Springs,
W. Va. on June 21. As legislative counsel to Senator
Wagner, Mr. Rifkind is said to have assisted in drafting the
recovery bill. Mr. Rifkind said:
The scope of this Act is far wider than that of the ordinary Act of Congress. It is, In truth, a constitution—the new constitution of
American
industry—and the charter of liberties for a democratically
organized
economic society. The Recovery Act does not pretend to cure
the ills of
business: it only affords business men themselves the opportunity to
exercise
their own wisdom and statesmanship and to devise a
remedy. It also
confers upon them the power to make the remedy effective.
It is erroneous to assume that the Recovery Act is designed
only for
the benefit of producers and manufacturers. Our economic
also of consumers, wage earners, and distributors. This system consists
Act lays down a
principle of a fair and balanced relationship among them
measure the lack of balance contributed to the depression, all. In good
and
measure will the restoration of balance contribute to recovery. in equal
The Act recognizes as fundamental the fact that
the Problem of each
industry is unique and distinct, that no one panacea will
cure them all.
If therefore lays down no rigid set of rules. On the
contrary, it declares
a broad policy in the light of which specific remedies
may be devised for
each individual industry.
The underlying assumption of the Act Is that business men
can, Ii given
the opportunity, lift the standards of competition and
employment so as
to further not only their own iaterests but the welfare of the
entire nation.
4392
Financial Chronicle
Authors of National Industrial Recovery Act Vision
Permanent Control of Industry by Federal Government, According to Representative James W.
Wadsworth.
Permanent control of industry by the Federal Government
is being planned by the authors of the National Industrial
Recovery Act, according to statements made in New York
City an June 17 by Representative James W. Wadsworth in
an interview with newspaper men. Mr. Wadsworth said that
the act represents a school of thought "that believes in
permanent control by the Government of industry, wages and
hours of labor, and although it is labeled temporary its authors believe it is a sound permanent policy. Two years from
now, when the plan is supposed to end, it will be enforced by
the greatest bureaucracy that the country has ever seen."
Other remarks in the course of the interview, as quoted by
the New York "Times" on June 18, follow:
will find our"If the attempt is made to make the plan permanent, we
revolving
selves on the verge of a great fundamental, constitutional contest,
trait as
around the proposal that individualism shall not be our dominant
a nation, but that we shall be a regimented people."
of AmerIf the plan becomes permanent it will change the whole picture
control proican life, he declared. The Farm Relief Act and the industry
the
where
see
don't
visions would have the same effect, he said, adding: "I
constitutional authority is."
if Govern"I cannot get out of my mind that Government is politics, and
are still
ment controls business, politics controls business, and politicians
looking for votes," he continued.
was
Wouldn't that mean the greatest good for the greatest number, he
asked.
"Politicians have never been able to tell people more than they already
know about earning a living," was his reply.
He was asked if he considered the broad powers granted to President
Roosevelt a mistake.
"No. Most of the powers given to him were purely for the emergency,
and, personally, I was glad to see that done."
He approved of the home mortgage relief measure, and the farm mortgage
relief measure, as necessary in the emergency, and also of the Securities
Control Bill, as a permanent measure designed to protect investors. Ile
said he regretted the deposit guarantee feature in the Glass Banking Bill,
but added, "There are a lot more good points in the measure."
United States Chamber of Commerce Advises Affiliates
of Eight Methods to Insure Success of National
Industrial Recovery Program.
Eight ways in wOich local Chambers of Commerce can
assist in making successful the recovery program under the
National Industrial Recovery Act were suggested by the
Chamber of Commerce of the United States, in a statement
for its membership issued on June 18. These several suggestions were listed as follows:
the
1. Serve as a center of actual and dependable information regarding
ComAct. As one Secretary expresses it, the Secretary of the Chamber of
commerce should endeavor to make himself the best-informed man in the
munity on this subject.
2. Arouse and crystallize public understanding and sentiment with respect
it.
to the broad purposes of the measure and the benefits anticipated from
3. Contact local industrialists with a view to ascertaining their trade
trade
appropriate
association affiliations so as to assist both them and the
association when codes are under consideration.
4. Call group meetings of manufacturers for the consideration of specific
proposals affecting the community welfare; place the facilities of the Chamber at the service of local groups.
5. Where it seems practical and desirable, organize trade and industrial
groups within the Chamber to protect local interests by co-operative action
through the Chamber, and to attain national purposes through co-operation
with appropriate trade associations.
6. In co-operation with State and regional Chambers and similar agencies,
take leadership in securing appropriate State legislative action where that
seems necessary.
7. Consider advisability of staging or encouraging campaigns to change
public psychology with respect to buying practices.
8. Set up a committee (or utilize existing industrial committee) to inform
itself upon the whole subject, to confer currently with interested local concerns and to represent the Chamber in taking such action as may be necessary
to aid local industries in making necessary readjustments, and to advance
the local public interest.
Challenged by Recovery Act—Brookmire
Warns Business to Be Alert.
President Roosevelt has challenged every industry to police
Itself under the new powers granted by the Industrial Recovery Act or to submit to dictation, the Brookmire Economic
Service declares in a special report, which points out that the
new piece of legislation vitally affects virtually every business. The immediate practical questions, it is said, must be
answered by every business man. They are:
Industry
1. Shall my industry police itself under the new powers granted by this
legislation, or shall neglect on our part give the Government cause to dictate
to us? The complications of modern business are so multitudinous that an
Industry itself should be better equipped than the Government to set up a
workable plan. No industry will be exempt, as the intention is clear to
make control all-inclusive; ultimately even the retailing branches of industry will be included. The first efforts will be made to line up the following
major industries which employ a large percentage of the total workers: Coal,
automobile, textile, steel and oil.
2. Since every industry must have a control organization with a code of
practice, shall I make sure to have a voice in its preparation? It is important to remember that any code prepared by an organization truly repre-
June 24 1933
the
sentative of industry and approved by the President, promptly becomes
standard of practice for all concerns in the industry—whether members of
punishable.
is
the organization or not. It becomes a law whose violation
Underlying these two questions the Act becomes of vital
Interest to the public, the report adds, in determining if its
adoption will make unnecessary the resort to the "dangerous
provisions of currency legislation that was passed a while
ago," and to determine if the Act will retard the radical
social changes which had threatened to be the outcome of
the prolonged depression. The report also says:
Until the new law actually becomes operative and general principles take
shape in concrete cases, the practices formulated in codes can be assumed
experience
to take their cue from past experience in similar efforts. Our
of
with many industries in the past has brought familiarity with a number
commercial
piracy,
style
evils such as: credit abuses, misleading advertising,
field
bribery, return of goods, &c., but the most notorious abuses are in the
discrimiof prices, including indirect methods—notably secret rebates, price
nation, second-hand allowances, guarantees, freight allowances, &c.
the
The whole problem of controlling competition resolves itself about
of
price factor, which in turn is logically a matter of costs. Some form
effective
price regulation would appear to be inevitable in order to achieve
control over competition. The approach to.the problem will probably be
along the lines of setting minimum labor rates which cannot be broken
under the stress of competition, of inaugurating uniform accounting, and
of forbidding sales below cost.
On complaint of abuses or on the President's own motion and if no code
has been approved, Paragraph (d) of Section 3 gives the President power
which
(after public notice and hearing) to prescribe and approve a,code
shall have the same standing as a voluntary code and shall bind the entire
industry. This is the first club placed in the hands of the President.
in
In addition to codes of fair compensation, the President is authorized
Section 4 to enter into voluntary agreements with and to approve voluntary
agreements among persons engaged in trade or industry, and labor organizations. These apply only to parties signing the agreement and are not binding
on the whole industry as are codes.
The second paragraph of Section 4 puts into the hands of the President
the big stick to swing over those who refuse to play ball. This paragraph,
containing the teeth of the bill, has been subject to the greatest attack and
does render it possible for the Government ultimately to control all industry.
For the present the object is to bring the recalcitrants in line or punish them.
In the final analysis, this legislation makes the Government the arbiter
between employers, employees and the public. The immediate emphasis of
the Administration is greatest upon the payment of a higher sum total of
wages to the working population, on the assumption that the resultant purchasing power will spell prosperity. The immediate interest of employers
is served if prices are high enough to insure a decent profit to efficient.
concerns, but one factor of paramount importance to the ultimate welfare
of employers is that prices also be reasonable enough to yield the maximum
demand for the industry's products, and assure the healthy growth of the
industry. From the standpoint of the public it is necessary to prevent any
excessive rise in prices.
Connecticut's Amended Securities Law to Become
Effective July 1.
The following is from the Hartford "Courant" of June 17:
Connecticut's amended securities law will become effective July 1, and
Clarence H. Adams, Director of the Securities Division of the Connecticut
Banking Department. has sent out copies of the new laws and new forms
to be used in conformity with them. A number of changes have been made
In the laws.
The registration fee for brokers is made 850 annually, instead of 850 for
the first year and $25 annually thereafter. Salesmen are required to file
their photographs on applications. These may be the passport type of
pictures. The salesmen are required to file on their applications a 10Year business record and brokers must file business records also for 10
years for all the partners. The Bank Commissioner is given broad powers
as regard authority for refusing registrations and also as regard cancellations. The law makes the Bank Commissioner the lawful attorney for out
of State brokers. Forms for brokers' statements are provided. The law
empowers the Commissioner to specify bookkeeping forms and authorizes
him to call for statements at his discretion. It is expected that statements
will be called for at least once a year.
New laws place the sale of oil royalties and mining stocks under the
securities division. The fraud features of the law are strengthened. Penalties have been increased from three months in jail or a fine of $1,000
two years in prison or a fine of $2,000. This makes violators extraditable.
Changes in the laws are designed to more efficiently protect the public.
Crooked operators will find the laws full of sharp teeth. Honest dealers
are adequately protected and their transaction of business is in no way
hampered or interfered with by the changes.
Investment counsel service is brought within the meaning of the securities
act as regard to registration for the first time.
Railroads of the United States, Excluding Switching
and Terminal Companies, Valued at $26,091,310,739
—Cost of Reproduction Placed at $23,963,646,235.
According to the Inter-State Commerce Commission, the
Class I,II and III carriers, excluding switching and terminal
companies, and working capital, had a book value as of
Dec. 31 1932, before deduction of accrued depreciation, of
$26,091,310,739, f which $10,727,401,013 applied to railroads in the Eastern District, $4,495,827,775 to roads in.
the Southern district and $10,868,081,951 to carriers in the
Western district.
The cost of reproduction (new) of all railroads was placed
at $23,953,546,235 on the basis of so-called "period prices"
and at $23,742,958,869 on the basis of "spot prices." The
cost of reproduction less depreciation wa estimated at
$17,754,467,309 according to "period prices" and at $16,858,547,204 using "spot prices." Land was excluded in both
instances.
The original cost of all carriers covered by the analysis was
$22,860,365,394. To this was added $3,02,799,826 as
Financial Chronicle
Volume 136
representing the value on June 1 1933 of land used for carrier
purposes.
All three classes of carriers were credited with $338,854,000
in working capital, including materials and supplies.
A summary of results of the Commission's valuations of
the steam railways of continental United States to date,
under Section 19a of the Inter-State Commerce Act, which
were made a part of the record in the pending freight rate
ease, follows:
VALUATION STATISTICS.
(Property as of Dec. 31 1932 and prices as of June 1 1933. unless otherwise indicated.]
Eastern
District.
Southern
District.
Western
District.
Total.
$
$
Reproduction new—
Except land—
Period prices- - __ 10,207,277,298 4,081,020,501 9,665.248,436 23,953,546,235
10,129,966,492 4,049,319,616 9,563,672,761 23,742,958,869
Spot prices
Reproduction less
depreciation—
Except land—
Period prices_ _ _. 7,585,449,573 3.079,183,153 7,089,834,583 7,754,467,309
7.527,996,020 3,055,260,774 7,015,856,984 7,599,113,778
Soot prices
I Original cost—
9,703,430,054 4,094,695,233 9,062,240.107 2,860,365,394
Except land
982,117,152 3.032,799,826
Land
1,660,906,409 389,776,265
xWorking capital (Ind150,175,000
338,854,000
53.860,000
134,819,000
materials d: supplies
y Investment without
deduction of accrued
depreciation—
Carriers' book_ _ _ 10.727.401.013 4.495.827.775 10.868.081.951 6.091.310.739
x As of Dec. 311932. y As of Dec 311932. From Bureau of Statistics, Interstate Commerce Commission, as to Class I, II and II carriers, but not Including
switching and terminal companies. Does not include working capital.
$
$
Governor Rolph of California Signs Bill Amending
Securities Sale Act.
Governor Rolph of California on June 12, signed Senator
Arthur H. Breed's bill amending in several respects the act
providing for regulation of companies, agents and brokers
handling the sale of securities under the supervision of the
State Commissioner of Corporations. Associated Press
advices June 12from Sacramento to the Los Angeles"Times"
added:
Some of the new provisions or newly phrased sections written into the
law are:
Whenever the commissioner is of the opinion that further sale of securities by any company would be unfair or inequitable to purchasers he may
order such company to desist from further sales. If a requested hearing is
not held within 60 days the order shall be deemed to have been rescinded.
On receipt of application to do business, the commissioner shall determine
that the proposed sale of securities will be fair and not fraudulent. All
certificates shall expire on Dec. 31 unless sooner suspended or revoked. An
applicant shall file 35,000 bond.
Growth of Church Pension Fund of Protestant
by
Episcopal Church—System Administered
William Fellowes Morgan, President, and J. Pierpont Morgan, Treasurer, Paid over $1,000,000 in
1932 Pensions.
Annual payments of the Church Pension Fund of the
Protestant Epircopal Church passed the $1,000,000 mark
in 1932for the first time in the history of the Fund, according
to the report of the President, William Fellowes Morgan,
issued June 12 to the trustees. The statement of the fund,
of which J. Pierpont Morgan is Treasurer, shows that
assessments for the two la t years of the depression have
the largest totals in its records-31,176,165.31 for 1931
and $1,126,093.74 for 1932.
Particularly significant, it is stated, is a 5% increase in
its roll of beneficiaries for 1932 over the preceding year
at a time when many pension organizations are deteriorating
or passing out of existence. An analysis recently made by
Industrial Counselors, Inc., sponsored by Owen D. Young
and others, proves that the mortality among industrial pension
systems has been extremely high during the depression.
The Church, on the other hand, has produced a system
which has not only weathered the storm but has extended
its benefits during the recent trying years. An announcement regarding the Pension Fund says:
The increase in the roll of beneficiaries is not the only evidence of the
Fund's growth. In the last seven years,age allowances have been increased
66% beyond the amounts for which the Fund originally obligated itself.
Special provision has been made so that the general salary decreases
throughout the Church, which are felt to be only temporary, need not
affect the individual pension status. Incidentally, it is probable that
the matter of pensions has influenced the laity toward placing the clergy
stipends on a more generous basis; during the existence of the Fund, the
average salary in the Episcopal Church has increased from $1,487 to $2,936.
The Secretary, Bradford B. Locke. reports that less than
of 1%
of the assessments due from parishes, missions and other ecclesiastical
organizations remain unpaid in the entire 15 years of the organization.
The valuation of the Fund as of Dec. 311932. made for the Superintendent
of Insurance of New York, under whose superintendence the Fund is
voluntarily administered, shows reserves to the value of $29,090.064.72.
The Fund's income during the past year suffered only $35,000 on a total
income from investments of over $1,350,000 a year.
Originally clerical pensions in the Episcopal Church depended upon
uncertain charity donations or upon sporadic attempts in the various
dioceses to relieve the independence of aged clergy and their families. In
1917 the Church decided to put the pension system on a scientifically assured basis which would distribute responsibility throughout the field. A
4393
large original sum was collected, which has been added to by parish assessments proportional to the rector's salary and by wise investments, until
to-day the Fund is able to give age and disability allowances and pensions
to widows and minor orphans to the number of 1,655. So successful has the
plan been in solving a problem of long standing in the Church that the
organization of the Church Pension Fund has been copied by the Presbyterian Church, U. S. A., and its advice sought by the Church of England
and the Church of Canada. The Fund has two wholly owned subsidiaries
—the Church Life Insurance Co. and the Church Hymnal Corp., both of
which are performing a valuable service to the Church.
Court Decisions in Cases of Reading Co. and Pennsylvania RR. Seen as Furthering Railroad Mergers
in East—Baltimore & Ohio Application to InterState Commerce Commission for Control of the
Western Maryland Is Forecast.
Federal courts in Philadelphia on June 16 handed down
two decisions, one of which permits the Reading Co. to
exercise control in the Central Railroad of New Jersey,
and the second permits the Pennsylvania RR. to retain its
8106,000,000 investment in the Lehigh Valley and the
Wabash. These decisions are considered as furthering
railroad consolidations in the East, according to an article
in the New York "Times" on June 18, which discussed the
decisions as follows:
The first effect of the District Court decision in the Reading case is to
Presibe the election of Charles H. Ewing, President of that company, as
dent of the Jersey Central at the meeting of the board of the last named
already
road called for Thursday. Co-ordination of the two lines has
started.
the
and
stock
The Baltimore & Ohio owns more than 40% of Reading
New York Central nearly 26%. It is understood that the New York
Because
Central is agreeable to the Reading-Jersey Central co-ordination.
still
of the minority interests involved, consolidation of the two roads is
some distance away.
Baltimore
the
case,
Central
Because of the result in the Reading-Jersey
in the
& Ohio is now expected to seek authority for the exercise of control
the case
Western Maryland, in which it has minority holdings. As was
Ohio's
with the Reading's holdings of Jersey Central, the Baltimore &
the
holdings of Western Maryland are held by a trustee. Application to
Maryland
Western
the
of
dissolution
for
Intel-State Commerce Commission
trusteeship would be necessary to give the Baltimore & Ohio control in the
shorter line.
PennUnder the Four-System Plan approved by the Commission, the
the
sylvania was to retain the Wabash and the Lehigh Valley, giving
of
Chesapeake & Ohio System rights over the Lehigh Valley. The action
to exercise
the Circuit Court of Appeals opens the way for the Pennsylvania
now
is
actual control of Wabash and Lehigh Valley. The Pennsylvania
by
agitating for a Two-System Plan in the East, such as was proposed
The
Corporation.
Finance
Reconstruction
John Barriger. now with the
of
Wabash and Lehigh Valley would go to the Pennsylvania under either
the two proposed alignments for the East.
control
Exercise of the New York. Chicago & St. Louis's (Nickel Plate)
week's
In the Wheeling & Lake Erie is another possibility opened by last
decisions.
arrangeIn 1929, the Inter-State Commerce Commission approved an
This
ment wherby control of the Wheeling was vested in a trustee.
jointly
formerly
was
control, embodying 53% of the stock of the Wheeling,
the
Subsequently,
Plate.
Nickel
the
held by the Allegheny Corp. and
certificates.
Nickel Plate was permitted to acquire all the Wheeling trustee
Nickel
J. J. Bernet is now President of the Chesapeake & Ohio and the
permit him
Plate. Release of the Wheeling control from trusteeship would
conSweringen
Van
to join the Wheeling's board, thus furthering the
solldation plan.
Joseph B. Eastman Appointed by President as Federal
Co-ordinator of Transportation Under New Railroad Relief Act—Inter-Stale Commerc Commissioner Says He Will Not Be a "Czar."
Joseph B. Eastman, member of the Inter-State Commerce
Commission since 1919, was appointed Federal Co-ordinator
of Transportation by President Roosevelt on June 16,
immediately after the President had signed the Emergency
Railroad Transportation Act. The signing of the measure
was noted in our issue of June 17, page 4195. Mr.Eastman's
appointment had been generally anticipated. In a state,
ment issued on June 16, Mr. Eastman repudiated the idea
that the Administration's emergency railroad program makes
him a "Federal railroad czar." The text of Mr. Eastman's
statement, in which he described his new duties and the
economies hoped for under the Act, follows:
The Emergency Railroad Transportation Act, 1933. does not pretend to
be a complete or final answer to the transportation problem of the United
States. Nor does it put the railroads under the control of a Federal railroad czar.
It is a temporary and preliminary measure which is designed to pave the
way to a comprehensive treatment of the transportation situation of a
more permanent and enduring character.
To this end it sets up a Federal co-ordinator of transportation, who is
not to manage the railroads. but whose duty it Is, with the aid of the InterState Commerce Commission, to help the railroads in exploring all possibilities for the avoidance of waste and preventable expense, and to encourage
and promote, and, if need be, require action which will have that result.
He has the further and very important duty of carrying on research
and study for the purpose of recommending to the President and to the
Congress such further legislation, covering all phases of the situation, as
may be necessary and practicable to place the transportation agencies of
the country on a strong and stable basis and in a position to provide the
facilities which the commerce and industry of the nation require.
So far as the immediate or early accomplishment of important economies
is concerned, the restrictions of the Act with respect to reduction in the
number and compensation of railroad employees will probably constitute
serious obstacles.
4394
Financial Chronicle
They will not prevent, however, thorousn exploration of the possibilities
in the way of economies, and the information thus gained is bound eventually to be of value.
Nor will they interfere in any way with the research and study looking to
further legislation of a more permanent and enduring character, for which
the Act provides.
No information can at present be given out as to the organization of the
work of the co-ordinator, but that matter is under active consideration
and it is expected that definite information will be available at an early date.
President Names F. P. Douglass to Investigate Dispute
Between Railroads and Employees.
Frank P. Douglass, an attorney of Oklahoma City, has
been appointed by President Roosevelt to serve on the board
of investigators which has been selected to inquire into
disputes between employees and the Kansas City Southern
Ry., the Texarkana & Fort Smith Ry, and the Arkansas
Western Ry. Co., according to an announcement from
Washington on June 19
Railroad Executives Draft Board Plan for Regrouping
of Carriers Under National Railroad Co-ordination
Act—Operating Officials to Compose Regional
Group.
The Association of Railway Executives at a recent meeting
•
in Chicago approved four steps to align the railroads in
accordance with the provisions of the National Railroad Coordination Law. These steps, as listed in the New York
"Times" on June 20, follow:
I. To group the nation's railroads into three regions—East, South and
West—for the purpose of the co-ordination law. Three railroads were
temporarily excepted from this grouping, the Wabash, Illinois Central and
St. Louis-San Francisco, for the reason that these lines run throUgh more
than one of the designated areas. The disposition of these three companies
will be announced later.
2. To have each railroad appoint an official to deal with the regional
committees which, under the law, are to assist Joseph B. Eastman, member
of the Inter-State Commerce Commission, who is to be national railroad
moderator under the law.
3. To have the regional committees appointed by utilizing for'that
purpose the existing regional organizations. The Eastern Presidents'
Conference is the medium chosen to fulfill this purpose in the East.
4. To authorize the regional committees to appoint local sub-committees
or other organizations to assist them in their work.
Mileage a Voting Factor.
Because, under the law, voting for the regional bodies plan is in accordance with the mileage of the railroads involved, the membership of the
Eastern committee will be under the control of the New York Central,
Pennsylvania, Baltimore & Ohio, Chesapeake & Ohio and New York, New
Haven & Hartford. The membership of each committee is to be five, with
two special members, one representing the short lines and the other electric
lines. Selection of the two special membersis to awaitfurther consideration.
It is expected that operating officials will be selected as members of the
regional committee for the East, most of the economies to be derived under
the plan hinged on operating reforms. Again,in accordance with the law,
the members of the committee are to appoint a chairman, but, it was explained by railroad counsel, this chairman would have no greater influence
than the other members of the committee. As an analogy, it was pointed
out that the chairman of the Inter-State Commerce Commission is appointed by rotation and has no more power than the other members.
Inter-State Commerce Commission Approves Elimination of Seatrain Lines, Inc., as Participant in
Southern Classification Schedules—Commissioner
Eastman, Dissenting, Says Schedules Were Filed
Without Lawful Authority.
The Inter-State Commerce Commission on June 14 issued
a decision upholding the elimination of Seatrain Lines, Inc.,
as a particip ting carrier in Southern classification schedules.
The decision as announced has no connection however with
proceedings pending before the Commission in regard to the
status of Seatrain. Suspension of Southern classification
schedules was ordered vacated by the Commission. Commissioner Joseph B. Eastman disagreed with the decision of
the majority, and entered a written dissent, in which he
contended that the schedules were filed without legal
authority. His opinion, in part, read:
The majority find that the schedules under suspension proposing to
eliminate Seatrain as a participating carrier in the Southern classification,
were filed by Agent Dulaney as agent for Seatrain under power of attorney
F. X. 1 No. 2. Agent Dulaney makes no such claim, and the schedules
do not so indicate. On the contrary, he testifies that he terminated this
contract of agency, returned the power of attorney, and was acting for his
other principals when he filed tha schedules. I take it that the majority
agree that once Seatrain became a party to the classification it could not
be eliminated therefrom by the other parties and without its consent.
The surprising conclusion is therefore reached that Agent Dulaney was
in fact acting under a power of attorney which he thought he had repudiated
and under which he did not pretend to act and that Seatrain in fact gave a
consent which it had no intention of giving.
I have difficulty in following this theory, and in attempting to follow
It another difficulty is encountered. The majority quote one clause of the
power of attorney, but it will be noted that it authorized Agent Dulaney
only to do and perform all and every act and thing above specified.
I find nothing above specified which authorizes him to cancel participation in the classification. What he is authorized to do is to "file classifications, classification exception tariffs and (or) specifications of standard
containers for fresh fruits and vegetables and loading rules, and supplements thereto."
Aside from these questions it seems to me that the majority have overlooked the following provision of Section 1 (6) of the Inter-State Commerce Act:
June 24 1933
"It is hereby made the duty of all common carriers subject to the provisions of this Act to establish, observe and enforce just and reasonable class['cations of property for transportation with reference to which rates.
tariffs, regulations or practices are or may be made or prescribed."
I call attention to the final reference to rates, namely "are or may be
made or prescribed." Seatrain does not now participate in rates subject to
the Southern classification, but it has a complaint pending with us seeking
the prescription of such rates. The duty to establish a classification esxits
with reference to rates which "may be" prescribed. And there is hero no
contention that Seatrain is not subject to this duty as a common carrier
subject to the provisions of the Act. It has complied with this duty, and
these schedules would now destroy that compliance. In my judgment
they have been filed without lawful authority, in spite, and without
justification.
Proposed Rail Wage Reduction Put Off Eight Months—
Agreement of Roads and Labor Is Announced by
Eastman After Two-Day Parleys—Present 10%
Cut Is Continued.
An agreement between railroads and railway labor suspending their wage reduction controversy until June 30 1934,
out of deference to President Roosevelt's recovery program,
was announced, June 21, by Joseph B. Eastman, the new
Coordinator of Transportation. Under the terms of the
agreement, which Mr. Eastman said was arrived at through
a commendable spirit of co-operation between the disputants,
the existing temporary 10% pay cut was extended eight
months from Nov. 1 and the rail managements' notice of a
further 12 ,6% reduction effective Nov. 1 was canceled.
Mr. Eastman emphasized in his announcement that
neither side had relinquished its views regarding what railway
wages should be. But both appreciated, he said, that it
would be difficult to deal wisely now with the matter "and
that the active prosecution of such a controversy at the
present time might have a most disturbing and unsettling
effect."
Mr. Eastman's announcement reads as follows:
Under this agreement the railroads will surrender for a period of eight
months their right to seek a further reduction in employees' compensation
and the employees will surrender for an equal period of time their opportunity to secure an elimination of the present 10% reduction.
The notice given by the railroads on June 15 of an Intention to seek a
22 % reduction in the basic rate of pay will be canceled.
This agreement has been reached because both the railroads and the
employees wish to do nothing which would in any way embarrass or threaten
the present policy of the Administration.
They realize that the Government has now embarked upon a wholly new
policy to promote business and industrial activity and to further the general
welfare.
Waitfor Recovery Results.
They appreciate that until the results of this policy can be more clearly
determined, it will be difficult to deal wisely with this wage controversy
and that the active prosecution of such a controversy at the present time
might have a most disturbing and unsettling effect.
Neither side relinquishes in any way its views as to what the wages should
be. but they have agreed to a postponement of the controversy out of
deference to what they believe to be the desire and policy of the Administration and in the general public interest.
The railroad managers and the railroad labor executives have entered
into an agreement under which the arrangement by which 10% is being
deducted from the pay checks of employees will be extended from Oct. 31
1933, until June 30 1934. and under which the date on which either party
can submit a notice in accordance with the provisions of the Railway Labor
Act indicating a desire to change the basic rates of pay will be extended
from June 15 1933 to Feb. 151934.
This agreement has been reached voluntarily in a spirit of co-operation
and I desire to express my very whole-hearted appreciation of the attitude
Of both parties. They have been reasonable and amicable and they merit
the commendation of the country.
Text of Wage Agreement.
The text of the agreement between the rail managers and
labor bodies is as follows:
Memorandum of Agreement.
This agreement, entered into at Washington, D. C., between the undersigned, Conference Committee of Managers and the Railway Labor Executives Association, witnesses that after conferences held between the Federal
Coordinator of Transportation, the Hon. Joseph B. Eastman. and the
respective parties signatory hereto, the parties have agreed, as follows:
1. That the agreement signed at Chicago Ill.. the 21st day of December
1932, in behalf of the participating railroads and their employees, represented as therein set forth and who are further represented in the making
of this agreement by the respective parties hereto, is hereby extended for a
period of eight months from the expiration date thereof, so that up to and
Including June 30 1934, ten (10) per cent shall be deducted from each pay
check of each of the said employees covered by said agreement of Dec. 21
1932, and by this agreement that basic rates of pay shall remain as under
the agreement of Jan. 311932; that the extended agreement shall terminate
automatically June 30 1934. and that no party prior to Feb. 15 1934. will
serve notice of a desire to change or extend this extended agreement,or of an
intended change in basic rates of pay, such change or extension to become
effective on or after July 11934; it being further agreed that in event that
such a notice should be served by any party hereto between Feb. 15 1934.
and July 11934, the proceedings thereunder shall be conducted pursuant to
the provisions of the Railway Labor Act, and such proceedings shall be conducted nationally in order that the matter may be handled to a conclusion
as expeditiously as reasonably possible.
Must lie Ratified by July 12.
2. It is further agreed that the members of the Railway Labor Executives
Association signatory hereto will recommend the approval of the agreement
by the appropriate representatives of the employees members of their respective organizations in accordance with the laws of said organizations,
and that upon receiving such approval will thereupon notify the Conference
Committee of Managers, signatory hereto, that this agreement has been so
approved and Is in full force and effect.
Volume 136
Financial Chronicle
It is further agreed that pending the obtaining and notification of such
approval all action required or permissible under the Railway Labor Act
in connection with the notices served by the participating railroads upon the
representatives of the employees of said railroads, which notices were dated
June 15 1933,and provided for a total reduction in basic rates of pay amountthat
ing to 2231% shall be suspended except as hereinafter provided, and
said notices shall be withdrawn and further proceedings thereunder discontinued automatically when the Conference Committee of Managers,
signatory hereto, shall have been formally notified by the Railway Labor
Executives' Association, signatory hereto, that this agreement has been
approved as hereinbefore provided and is in full force and effect.
It is further agreed that unless this agreement is approved as herein
provided on or before July 12 1933, the parties signatory hereto will meet
on that date for conference as provided in the aforesaid notices served by the
railroads represented by the Conference Committee of Managers signatory
hereto.
This agreement is signed at Washington, D. C.. this 21st day of June
1933, in behalf of the participating railroads and their employees represented as hereinbefore set forth.
The New York "Times" in reporting the foregoing agreement states:
The announcement by Mr.Eastman, which was made late in the evening,
followed two days of mediation. He had only two conferences with each of
opposing groups and shortly before the formal announcement the members
of representative groups had affixed their signatures to the agreement.
It had been reported earlier in the day that in return for postponement
of the wage cut the managers had suggested a corresponding delay in any
action by the Inter-State Commerce Commission which might lower existing
freight rates.
A decision from the Commission is now awaited on the petition of organizations of so-called basic producers that the railroads be required to
make substantial reductions in freight rates.
It had been reported that Mr. Eastman was asked to propose to the
Commission that it delay action in this case until the expiration of the new
wage agreement. This was denied by Mr. Eastman simultaneously with his
announcement.
"This case will be decided by the Commission on the record before it,"
he said. "There was no suggestion of any action to the contrary."
Governor Rolph of California Signs Farm Measure-Provides for Proration of Production and Marketing of Crops—Commission Created with Broad
Powers.
The agricultural prorate bill, introduced by Assemblymen
Meeker, Scudder, Clowdsley and others as means of conserving the natural wealth of California and prevent economic
waste in marketing of crops, was signed by Governor Rolph
of California on June 6, according to Associated Press advices on that date from Sacramento to the Los Angeles
"Times," which also had the following to say:
The bill provides for creation of a prorate commission composed of nine
members appointed by the Governor and endowed with broad powers to
enforce the proration of production and marketing of agricultural crops.
Fifty producers of a certain agricultural commodity within any district
can present a petition requesting the establishment of a prorate area provided
the petition is signed by not less than two-thirds of the growers within the
proposed area. If the district is formed the remaining one-third would
have to abide by the prorate restrictions.
Following acceptance of the petition by the commission an election may
be held in the proposed district, at which time all producers of the commodity to be prorated would be eligible to vote. If the plan is adopted by
two-thirds of the producing factors, the Commission shall declare the program approved.
The Commission will then select a proration program committee within
the zone, the members being five producers and two handlers, serving without
compensation.
Certificates will be issued to producers specifying to each the amount of
the commodity he may harvest and market.
Violators of the program agreement may be enjoined by the Commission
and liable civilly to the extent of $500 for each violation.
C. J. Brand o" Agricultural Adjustment Administration
on Adjustment Program Respecting Wheat and
Cotton.
Charles J. Brand, co-Administrator, Agricultural Adjustment Administration, United States Department of Agriculture, in addressing, on June 21, at White Sulphur Springs,
West Virginia, the annual convention of the National Fertilizer Association, of which he is Executive Secretary and
Treasurer, detailed the decline of agricultural purchasing
power during the past decade and discussed the manifold
provisions of the Agricultural• Adjustment Act which was
passed for the express purpose of restoring the farm purchasing power that has been lost. He pointed out that in addition
to aiding the farmer the Agricultural Adjustment Act safeguards the consumer's interest. "Undoubtedly," said Mr.
Brand, "the cost of living will eventually be increased a
little. On the other hand, however, an increase in farm
purchasing power will go a long way toward restoring general prosperity, and we are all interested in that."
Already the adjustment program, with respect to wheat
and cotton, has been announced. "The wheat program," said
Mr. Brand,"involves the levying of a processing tax and use
of the proceeds for compensating farmers who co-operate
with the Administration and who reduce their wheat acreage in 1934 and 1935. No reduction of the 1933 acreage is
contemplated," said Mr. Brand, who added.
4395
The cotton program is different in several essentials. Here it is intended
to rent at least 10,000,000 acres of cotton land, already planted, and take it
out of production. This is due to the fact that there is a world carryover of
12,500,000 bales of American cotton, and it is practically certain that the
price of cotton this fall will be disastrous to the producers unless we succeed
in checking production. Contracts have been prepared and will be sent to
the State extension forces in the Southern States, and when a sufficient
number of these contracts have been signed the Secretary of Agriculture will
declare the plan operative and proceed with the disbursement of acreage
rentals and the distribution of options under the revised Smith option plan.
The cash rental will vary from $6 per acre for low-yielding land to $12 per
acre for the higher yield land. In addition, cotton owned by the Government will be offered to the producer at Sc. per pound. The grower may sell
his cotton thus purchased after Dec. 1 1933 and before Jan. 1 1934, taking
advantage of any increase in price.
H. L. Hopkins Denounces "Split-Penny" Wage Policy
—Federal Relief Administrator Says a "Few Parasite Employers" Menace Industry—Sees Million
Jobs by Oct. 1 as Result of Public Works Program.
At least 1,000,000 men will return to work before Oct. 1
as a result of the first thousand projects in the Government's
public works program, according to a statement by Harry L.
Hopkins, Federal Emergency Relief Administrator, in an
address before the National Conference of Social Workers
at Detroit on June 17. Mr. Hopkins discussed relief measures, and crticized the "few parasite industrial employers
who tend by competition to infect the whole industrial body
of our country with a split-penny wage policy." Further
details of his remarks, as given in Detroit advices to the
New York "Times" on June 17, follow:
"They would like to see relief money pay their wage bill. But they
are doomed to disappointment," he said.
"I have no intention of permitting Federal relief funds becoming involved in any situation where employers pay their workers starvation
wages and expect them to get the difference from relief agencies."
Numerous instances had come to his attention, Mr. Hopkins said
where employers had approached relief agencies with the idea that they
were cut-rate employment agencies where workers could be obtained at
less than a self-supporting wage.
"This is asking public relief moneys to subsidize industrial wages."
he went on. "I am thankful that in none of the instances that came to my
attention did the relief agencies entertain such a proposition. There is
much satisfaction in realizing that the great majority of industrial employers believe in paying a living wage.
Mr. Hopkins pointed out that the job ahead of the Federal, State,
county and city relief bodies still is a tremendous one.
In setting forth the policies of the Federal Emergency Relief Administration, which he heads, he declared that States must bear a fair share
of the costs of their own relief problems. It appears clear that some
States will have to call special sessions of their Legislatures to appropriate
funds for this purpose, he said.
Formation of National Advisory Corporation Under
Management of Sherman Corporation—To Aid
Industries in Conforming Objectives of National
Industrial Recovery Act.
Announcement was made June 19 of the formation of
National Advisory Corporation, a private corporation organized under the management of the Sherman Corp., business
and management engineers, to aid trade associations and
independent industry in conforming with and advancing the
principles and objectives of the National Industrial Recovery
Act. The announcement said:
The conduct of the corporation will be administered by welt-known
business executives, engineers and industrial advisers. Specifically, the
new corporation will be equipped to render. in whole or in part,the following
service consistent with the Act:
To form new trade associations;
Strengthen and co-ordinate codes and activities of existing associations
or of kindred groups;
Help the stabilization of industry by means of establishing proper standards of practice for associations or independent companies;
To develop sound bases of employer-employee relationship, uniform cost
accounting. profitable manufacturing procedure, economical sales and
distributing plans, and co-operative merchandising.
It is further designed to provide self-regulatory procedure, effective pooling of licenses and patents, methods of eliminating unfair price discriminations and other abusive trade practices and protection from aggressive acts
of non-representative groups.
Only Dependable Source of Mortgages Says Philip A.
Benson Is Funds Provided Through Savings Banks
—Mortoriums, Enforced Reductions of Capital or
Interest Regarded as "Killing Goose That Lays
Golden Eggs."
The only dependable source of mortgage funds is the every
day savings of the people, and mortgage funds can be
assured only by making the capital secure. Such was the
conviction expressed before the National Association of
Real Estate Boards at Chicago on June 14 by Philip A. Benson, President of the National Association of Mutual Savings
Banks and of The Dime Savings Bank, Brooklyn, N. Y.
Mr. Benson's own bank, it is stated is a large lending institution and the organization he represents has upward of
$6,000,000,000 in real estate mortgages.
4396
Financial Chronicle
He said that moratoriums, enforced reductions of capital
or interest, and similar devices intended to abrogate contracts between lender and borrower only tend "to kill the
goose that lays the golden eggs." But upon the whole Mr.
Benson thought the realty situation improved. He also said
that "any slight interruption in savings is but temporary."
Speaking to the real estate men, gathered from all sections
of the country, he continued:
June 24 1933
If governmental guarantee of deposits had to come, this was the most
propitious time in the history ofthe country, with everything at bottom and
the minimum number of banks in operation. The banks which are open,
those which could pass muster during a period of deflated values, surely
will be stronger as values advance, and consequently the deposit Insurance
risk is less at this time than it may ever be again.
The Glass-Steagall Bill gives governmental endorsement to branch banking, which the Bank of America has successfully pioneered in California.
In my opinion it is the forerunner of legislation which eventually will extend
branch banking to a nationwide scale, as is the case in all other countries.
One significant feature of the bill which should not be overlooked is the
provision that minority stockholders of a national bank have the right to
elect representatives on the board of the institution in proportion to the
stock they hold, through cumulative voting privileges.
The sections of the bill dealing with operations of holding companies and
security affiliates offer no obstacles to the operation of Transamerica Corp.
and compliance with the terms of the new legislation can be effected without
difficulty.
The source from which we get all of our mortgage money is savings. It is
the money saved in one form or another that is lent to borrowers, which
enables the borrower to finance the purchase of real property for his own
use or for investment and income purposes, at the same time earning
interest for the lender. Remove the protection of the laws from mortgages
and other forms of investment, destroy the right to collect a fair rate of
interest on mortgages and other loans, and you destroy the incentive to save.
You kill the goose that lays the golden egg. It would indeed be a goose
to continue to lay golden eggs for others to confiscate ruthlessly.
Acquittal of Charles E. Mitchell Former Chairman of
The savings to which I refer may be represented by bank deposits—mutual
National City Bank of New York on Charges
savings banks and others—by building and loan association accumulations,
Alleging Federal Income Tax Evasion.
or by the great Insurance funds so carefully accumulated by millions of
A verdict of not guilty was returned on June 22 in the
thrifty. self-denying, premium-paying, policyholders. I think it is important
to recognize that the owners of real property and owners of every other kind
United
States District Court in New York City by the jury
of property have no right to borrow the money another has saved, nor part
before whom Charles E. Mitchell former Chairman of the
of a fund existing by virtue of the savings of others, except on terms that
make the loan safe and productive of a fair return.
National City Bank of New York on charges alleging evasion
Moratoriums affecting the payment of the principal and interest of loans
of Federal income taxes of $850,000 in 1929 and 1930. The
or of taxes on the mortgaged property disturb investors, deprive them of
trial opened early in May, and the case went to the jury
their legal rights, and surely do not add encouragement to future mortgage
lending. Of course, no lender with any degree of good sense overlooks the
12:30 p. m. on June 21. Judge Henry W. Goddard
at
human element involved in the relation of debtor and creditor, mortgagor
instructed the jury that the sole issue in the case was whether
and mortgagee. To require the last farthing is usually the utmost folly.
the former banker made improper deductions from his 1929
Patience. forebearance and tact in dealing with each situation are required
and I am sure that the mutual savings banks have attempted to exercise
and 1930 income "with intent to defraud the United States
these virtues.
Government." From the "Wall Street Journal" of June 21
We have been through a period which saw a tremendous increase in
prices and that period has been followed by one of protracted deflation.
we quote:
Through it all there has been a steady and persistent increase in savings.
Judge Goddard said the law required that sales of stock to establish
Those who participated in these savings are the real owners of much of the
deductible losses "must be actual, bona-fide transactions."
that
savings
wealth of America. We believe that any slight interruption In
Says Much Evidence Circumstantial.
occurred this year as a result of the events which led to and followed the
The Judge stated that "much of the evidence against the defendant Is
banking holiday is but temporary. The march of the army of the thrifty
I
will be resumed and funds represented by the great institutions to which
circumstantial, but the law holds that there are many occasions when
have referred will be available for investment in good mortgages.
actions speak louder than words."
If there were no interest, the mutual savings bank would not be an attrac"You have the right to believe the defendant," he said, "in his protive place to save money. It is because every dollar put into an account and
testations regarding his intent. But you have also the right to disbelieve
left to accumulate grows with the lapse of time. Interest is added, and
him. It is your duty to determine which."
Reviewing the history of the income tax law, Judge Goddard said the
interest on interest, and through the magic of compound interest periodic
size.
great
of Congress was to levy heavier income taxes on rich men, because
intent
really
deposits of comparatively small sums grow into amounts of
the Government "is put to greater expense protecting their property."
My attention recently was called to a deposit made in our bank by a Civil
Discussing the sale of 8,500 shares of Anaconda Copper stock to W. D.
War soldier in 1864. He was killed in action and it was only lately that we
Thornton in 1929, the Judge said it was also up to the jury to decide
found his heirs. The original deposit was $125 and there were no subsequent
whether that was a bona fide or sham sale.
deposits. The heirs withdrew $2,172.37.
On the $666,666.67 payment from the management fund which was
Just at present mortgagees everywhere are experiencing some difficulty
in collecting interest and in obtaining the payment of taxes on mortgaged
considered by Mitchell as an advance and not included in his income tax
depression.
report for 1929, Judge Goddard said if a man lays all the facts honestly
property. The principal reason, of course, is the economic
before an attorney acting in good faith he cannot be convicted of criminal
Lack of earnings have seriously interfered with the payment of interest and
intent even if the advice of his attorney is bad. However, if he did not
taxes and with the payment of rents by tenants. In spite of that, actual
lay all the facts before his lawyer he is not in a position to rely on the
figures show that in New York the average rate earned on mortgages is
advice of his counsel.
well over 5% and the amount of interest lost through foreclosure is inlarge
a
Judge Goddard said, however, that if they found that the advance was
finitely small and, in fact, that the total interest in arrears is not
to
be repaid only from future management fund earnings, "I charge you
interest
total
the
collectible.
with
amount compared
it was income and should have been reported." However, he said, the
Before we consider what may be the future policy of the savings banks
jury should consider the advice Mr. Mitchell received from counsel about
with respect to real estate financing, let me make the suggestion that if you
believe mutual savings banks have proved their usefulness, that you advoincluding the item in his income tax return.
cate the passage of laws to permit such banks in States where they do not
He told the jury that they could find Mr. Mitchell guilty or not guilty
in his sale to Mrs. Mitchell; guilty or not guilty for failure to report the
now exist. There have been definite suggestions along this line In at least
two States in this part of the country.
management fund payment, or guilty or not guilty in the Thornton transThere will be much work to do In the rehabilitation of old buildings and in
action.
old.
the
of
some areas slums will be removed and new buildings take the place
The case went to the jury after six weeks of intensive analysis of business
All of this is socially desirable and in the line of progress. I do not think it
deals Involving millions of dollars by which Mr. Mitchell was alleged to
have evaded payment of income taxes of more than $850,000.
fair to subsidize buildings erected in slum areas by freeing them from
taxation. What they do not pay in taxes, other owners must pay. Savings
Three U. S. Contentions.
undoubtedly
banks, life insurance companies and other lending institutions
Three government contentions were set forth in the trail by IT. S. DisWill be called upon to play their part in the finanding of these desirable
trict Attorney Geo. Z. Modelle. They were:
improvements.
1. That Mr. Mitchell, recipient of $3,500,000 income from salaries, sale
For a time there was much talk of Inflation and I think some apprehension
of stock and other sources in 1929, made a "fake sale" of 18,300 shares
of it. While Congress has passed some laws which seem to make inflation
of National City Bank stock to his wife, and by charging against himself
possible I am sure nothing harmful will result from them. Rather, the
the difference in price, pretended to have taken a $2,800,000 logs for the
results of all. including the abandonment of payment in gold, should be
Year.
beneficial. What we want, what will do us all good, what will put the
2. That he failed to report to the Government the sum of $666,666.67
people to work, Is confidence leading to business transactions. We are past
he
received from the National City Co.'s "management fund" in 1929.
entering
are
we
the rocks and shoals, the narrow and dangerous channel, and
on the grounds that it was not income but a loan.
on wider and safer places. While the ship needs piloting, we are, I believe,
3. That he made a "fake sale" of 8,500 shares of Anaconda Copper
In safe and skillful hands and before long we may have the experience of
stock to his friend, William D. Thornton, President of the Greene Cananea
going full steam ahead. Let us all, therefore. address ourselves to the task
Copper Co., in order to wipe out his $750.000 income of 1930.
of obtaining better conditions for real estate in the interests of owners,
The defense pictured Mr. Mitchell to the Jury as a man who, when the
mortgagees and brokers. Real estate will be. in the future as always, a
financial world was crumbling, threw his own personal fortune into Wall
good nvestment. It is the principal source of wealth—the cornerstone of
Street
in a vain endeavor to stem the downward rush of prices, and who
th
ome and the nation.
was forced to sell his stock because of "poverty."
Views of A. P. Giannini on Glass-Steagall Bank Act
Deposit Insurance and Branch Banking Features.
Restrictive regulations of the Glass-Steagall Bill are
beneficial to the banking structure of the Nation, in the
opinion of A. P. Giannini, Chairman of the Board of the
Bank of America. "The new banking law is valuable
because it brings our national banking regulations up to the
minute," Mr. Giannini said. "It supersedes legislation that
was antiquated—designed for a period of banking development which is now entirely a thing of the past." Mr.
Giannini further said:
The deposit guarantee feature has always seemed to me unnecessary if
banks are operated properly under adequate supervision, but it is justifiable
on this ground,if on no other: It will bring about a unified national banking
system. an accomplishment which could never have been successful had
Congress attempted It in the ordinary course of events, confronted witn the
prejudices of the "States Rights" adherents.
The jury's verdict was returned at 1:14 p. m., June 22,
the foreman announcing, "We have found the defendant
not guilty of both counts." The conclusions of the jury
anae after several requests had been made for portions of
the Judge's charge. From the New York "Times" of June 23
we quote :
At 10:40 a. m.[June 221 the jury sent the following note to Judge Goddard, which he read from the bench:
"The jurors would Ike to hear again the court's instructions in that portion of the charge relating to the management fund, not as to the evidence
Involved but on the law; also the general.instructions at the end of the charge
regarding the rendering of the verdict."
This was the second time the jury had asked for further enlightenment
on the management fund matter, having made such a request about6 o'clock
Wednesday night [June 211. As on the previous occasion, Judge Goddard
yesterday read from this section of the charge to the jury.
The Judge's charge said that the jury could find that Mr. Mitchell acted
properly in not reporting the $666.666.67 management fund item as income,
If it believed that Mr. Mitchell regarded himself at the end of 1929 as under
a definite obligation to repay the bonus he had received in July before the
stock market crash wiped out the management fund profits for the year.
Financial Chronicle
Volume 136
On the other hand, Judge Goddard explained, if the money was to be
repaid only out of future profits in the management fund, then it was income. In that event, however, he added, the jury would still have to determine whether Mr. Mitchell himself regarded the money as income and
willfully omitted it from his tax return.
Explains Possible Verdicts.
As to the form in which the jury could render a verdict, Judge Goddard
repeated that it could find Mr. Mitchell guilty or innocent on both counts
of the indictment, or guilty on one and not guilty on the other. As to the
first count, involving two separate transactions for the year 1929—the sale
of 18,300 shares of National City Bank stock to the defendant's wife, and
the management fund item—he instructed the jury that if they found Mr.
Mitchell guilty on either transaction they should return a verdict of guilty
on the first count.
When Judge Goddard finished reading this, Juror No. 7, F. Barnard
O'Connor, a civil engineer, of 876 Park Avenue, leaned forward and spoke
to the foreman. Mr. Campbell then asked the Judge to repeat his general
Instructions regarding the "reasonable doubt" to which a defendant in a
criminal case is entitled, and the necessity of the jurors composing their
differences and reaching a verdict if possible.
Judge Goddard pointed out to the jury in this section of his charge that
if thty were unable to agree, another jury would have to be selected in
exactly the same manner as they had been chosen, and that there was no
reason to believe that any twelve men more intelligent than they could be
found, or that the evidence could be presented any more clearly to another
jury.
At 12:13 o'clock the jury sent another note to •Judge Goddard. After
a conference with Mr. Medalie and Mr. Steller, Judge Goddard replied to
the query with a note without bringing the jury back to the court room.
The jury returned to the court room at 1 o'clock with the request that
Judge Goddard inform it as to how far a juror should go in "combining his
opinion with or submerging it in the opinion of the majority." Judge Goddard replied briefly. He said that it was "highly important in a case which
has taken as long as this one, to try to agree." He urged them to continue
their discussions, paying proper respect to each other's arguments and at;•
tempting to agree in the light of reason. At the same time, he said, their
verdict must be a unanimous one, the verdict of each individual member
of the jury.
After the jury filed back, judge Goddard directed the court clerk to
announce a recess until 2:15 o'clock, and the deputy marshals prepared.to
take the jury out for luncheon. They did not go, however, and within
fifteen minutes they settled their differences, returned to the court room and
pronounced the verdict that made Mr. Mitchell a free man.
Genesis of the Trial.
The trial grew out of Mr: Mitchell's testimony before the Senate Committee on Banking and Currency in Washington last February, when the
banker admitted that he had escaped income tax payment for 1929 by
selling the National City Bank stock to a member of his family, later
identified as his wife.
Mr. Mitchell resigned as Chairman of the National City Bank and its
affiliated companies on Feb. 26, two days after United States Attorney
Medalie had begun to investigate his income tax returns as a result of the
Washington testimony. He was arrested at his hime, 934 Fifth Avenue.
on the night of March 21, and has been under bond since then. Mr. Medalie put the case before a Federal Grand Jury on March 22, and an indictment was returned.
The indictment charged that Mr. Mitchell defrauded the government of
a tax of $728,709 on an income of $3,466,324 in 1929 and of a tax of $129,719
on an income of $624.637 in 1930, paying no tax whatever in either year.
The first count alleged that, by a sham sale of the 18.300 shares of bank
stock to his wife, Mr. Mitchell established a fraudulent tax loss of $2,872,305, and that he illegally omitted the $666.666.67 management fund payment from his 1929 return. The second count charged another sham sale
in 1930 of 8,500 shares of Anaconda stock to W. D. Thornton, President
of the Greene Cananea Copper Co., establishing a tax loss of $758,000.
The trial opened on May 11 and lasted six weeks.
Mr. Mitchell testified in his own defense for three and one-half days,
including two days under cross-examination. His defense was that he had
relied upon legal advice that the sales to Mrs. Mitchell and Mr. Thornton
complied with the income tax laws, and that the management fund pay •
ment was not legally income, and that his intent and purpose in all three
transactions had been to abide by the law.
Jury That Freed Banker.
The members of the Mitchell jury were:
JAMES IC. CAMPBELL,consulting engineer, 110 West Fortieth Street,
foreman.
CHARLES DALY,clerk, 84 Charles Street.
EDMUND J. O'CONNELL,engineer, 63 East Ninety-fifth Street.
WILLIAM A. McGRATH, hotel manager, 2006 Amsterdam Avenue:
JOHN H. HATHAWAY,traffic manager, Briarcliff Manor.
ARTHUR THOMPSON, publicity. Nanuet.
F. BARNARD O'CONNOR, civil engineer, 876 Park Avenue.
JOHN J. O'CONNOR, general contractor, 436 East 141st Street, the
Bronx.
WILLIAM MUIR. buyer. Hartsdale.
WILLIAM F. LOW, manager, 595 Madison Avenue.
LOUIS G. ADAMS,architect, 544 East Eighty-sixth Street.
NATHAN WALLACE,fur merchant, 637 East Sixth Street.
Mr. Mitchell's loan from J. P. Morgan & Co., which figured prominently
in the trial, is still nearly $2.500,000 "under water," despite the recent
advance in stock prices, it was computed yesterday. In the six weeks
since the trial began the collateral securing the loan has appreciated about
$240.000 and now has a value of $2,380,000 against a principal amount of
the loan of $5.858,319. At the opening of the trial on May 12, the collateral
had a market value of $2,140,000.
The present collateral securing the loan consists of:
53,300 National City Bank.
1,00 Anaconda Copper.
1,500 American and Foreign Power 2d pf.
4,000 option warrants American and Foreign Power.
200 Continental Illinois Bank & Trust.
4,000 International Telephone & Telegraph.
5,500 United Aircraft.
1,900 United Aircraft 6% Pr.
2.500 United States Realty & Improvement.
1.000 Werson Oil & Snowdrift pf.
1.500 American I. G. Chemical,
.
2,000 P. R. Mallory,
50 International Telephone & Telegraph convertible 4%s.
Besides these marketable securities there is included as additional collateral mortgages on Mr. Mitchell's three homes, here, in Southampton
and in Tuxedo, the value of which cannot be accurately estimated. These
mortgages were made out to Henry Sturgis Morgan and were posted as
additional security after the value of the stocks pledged had declined to
the face amount of the loan.
4397
Fromrthe New York "Herald Tribune" of June 23 we
take the following:
A few tears trickled down the bronzed cheeks of the banker when the
long suspense ended with the pronouncement of the verdict at 1:14 p. m.
Then he leaned forward in his chair and placed his hands on the shoulders
of his attorney. Max D. Steuer. Friends swarmed about them as the two
men shook hands.
"I can't talk now," Mr. Mitchell remarked. "I'm too moved."
Mitchell Thanks Each Juror.
A few minutes later, in an anteroom, he shook hands with the jurors,
saying, "Thank you, sir," to each. The corridors of the Federal Building
were so crowded with the curious that deputy marshals had to clear paths for
the departing jurors, and again for Mr. Mitchell when he walked to an
elevator, a free man, with his lawyer.
Both the banker and the lawyer, in their jubilation, proffered their hands
to the elevator operator. George Z. Medalie, United States Attorney, who
prosecuted the case, walked from the third floor courtroom downstairs to
his office on the second floor, alone. He and his wife, a daily spectator at
the long trial, were among those who shook Mr. Mitchell's hand after the
verdict.
"This was an intelligent jury," Mr. Medalie,said, "and of course we
accept its verdict." It remained within the discretion of the Treasury Department, however, he said, to file civil suit for the taxes Mr. Mitchell was
charged with having escaped.
Before he
The victorious Mr. Steller was more voluble than usual.
went away with his client he made the following statement:
"This verdict proves that in the State of New York justice can still be
had by the verdict of a jury: that neither mob psychology nor emotion will
enter the teal determinaten.
"Mr. Mitchell was absolutely innocent of the accusations made against
him as a result of what was deemed popular demand.
Stetter Praises Prosecutor.
"After a prosecuten which 'fell( wed a most exhaustive search - and the
exercise of the greatest d'llgenceen the part of the prosecutor, who presented
his case w'th as great abil ty as I'have ever w:tnesstd, the jury, nevertheless, saw the truth and decided ,accordingly."
About the city and in Washington word of the verdict was received with
varying degrees of jubilation and non-committal silence. Bankers and
members of the Wall Street financial community generally were delighted
and predicted that Mr. Mitchell would regain a prominent place in finance.
Tax consultants and attorneys were gratified that a perplexing phase of the
income-tax law had been judged by a jury in an important case.
In Washington officials of the Department of Justice and the Treasury
Department, while they said nothing about the Mitchell verdict, affirmed
their determination to prosecute similar income tax cases.
Homer S. Cummings, Attorney General, said he still believed in the jury
system. He dispelled an impression that Mr. Medalie might be asked to
resign.
Items bearing on the charges and the trial appeared in
these columns Mar. 25, page 2012 and May 20, page 3468.
Suspension of Holidays and Opening of Banks for
Business.
Since the publication in our issue of June 17 (page 4211)
with regard to the banking situation in the various States
the following further action is recorded:
CONNECTICUT.
Reorganization of the National TTradesmen's Bank &
Trust Co. of New Haven, Conn., which closed its doors on
June 29 1932, has been accomplished and the institution
reopened on June 167as the Tradesmen's National Bank.
The capital of the reorganized bank consists of $200,000 of
preferred stock, purchased by the Reconstruction Finance
Corporation, and $150,000 common stock. Its surplus is
$50,000. On reopening, 80% of the deposits became availH. Marshall Kirkman, formerly receiver for the
institution, is President and Clifford E. Smith, formerly
with the old bank, is Cashier.
The directors of the Reconstruction Finance Corporation
have authorized the purchase of $75,000 preferred stock in
able.
the reorganization of the Winthrop Trust Co. of New London, Conn.
ILLINOIS.
The reopening shortly of the Belmont-Sheffield Trust &
Savings Bank of Chicago, Ill., would appear from the following, taken from the Chicago 'Tribune" of June 17:
Prospects for early reopening of the Belmont-Sheffield Trust & Savings
Bank, 1005 Belmont Avenue. were seen yesterday. Officials reported
satisfactory progress in obtaining the needed 50% waivers from depositors
and the 33% assessment of stockholders. The assessment will bring in
about $67,000 of new money.
Permission was given by the State Auditor's office on
June 13 for the Farmers' State Bank at Hoffman, Ill., and
the Graston State Bank at Graston, Ill., to reopen on June 14.
That the First National Bank in Joliet, Ill., successor to
the Fitst National Bank of Joliet, which has been operating
under the direction of a conservator since the bank moratorium, would open on June 19 was reported in the Chicago
"Tribune" of June 17, which added: •
Confirmation of the charter of the new bank was received yesterday
(June 16) by President F. W. Woodruff.
Depositors of the old bank have been paid $1,300,000 or 40% of the
total deposits. The new bank is capitalized for $400,000, half of which
was subscribed by the Reconstruction Finance Corporation and the other
half by President Woodruff, who also was President of the old bank.
The St. Louis "Globe-Democrat" of June 13 reported that
the Old Exchange National Bank of Okawville, Ill., had been
licensed to reopen on an unrestricted basis on June 10. The
paper mentioned said:
Financial Chronicle
4398
This institution was one of the first National banks in the Eighth Federal
Reserve District to receive its license, after operating under a conservatorship since the bank moratorium.
C. H. Merrick is President, F. Moehle, Cashier, and W. A. Moehler,
Assistant Cashier of the institution.
The directors of the Reconstruction Finance Corporation
have authorized the purchase of $150,000 preferred stock in
the First National Bank & Trust Co., of Evanston, Ill., a
new bank formed to succeed the City National Bank & Trust
Co., of Evanston. The preferred stock authorization is
contingent upon the subscription of an equal amount of
common stock by those interested in the organization of the
new bank.
According to the Chicago "News" of June 21, the new
institution opened on that day, releasing 60% of the unsecured deposits, totaling $2,400,000, and all of the secured
deposits of the old bank. The institution has combined
capital and surplus of $337,500. Charles N. Stevens, formerly President of the old bank, is Chairman of the Board
of Director ; Joseph F. Wanberg, formerly with the Chicago
office of the National Banking Department, is President,
and W. W. Buchanan, Federal conservator of the old bank
since March last, is Vice-President and Truts Officer.
That the following Illinois banks had been authorized to
reopen without restrictions by Edward J. Barrett, State
Auditor of Illinois, was reported in Chicago advices to the
"Wall Street Journal" on Mune 16:
Toulon—Charles P. Dewey & Sons, bankers.
Ashland—Farmers State Bank of Ashland.
Ashland—Skiles, Rearick & Co.
Hoffman—Farmers' State Bank.
Grafton—Grafton State Bank.
DeKalb—DeKalb Trust & Savings Bank.
Vandalia—Farmers'& Merchants' Bank.
Niota—Niota State Bank.
INDIANA.
Plans for reopening the Indiana State Bank of Terre
Haute, Ind. (which has been operating on a restricted basis
since the general bank moratorium), with depositors receiving 75% of their money at once and the remaining 25%
to be available as soon as the trustees can liquidate the assets,
have been approved by the Indiana State Banking Department, according to Terre Haute advices on June 15 to the
Indianapolis "News," which added:
Trustees to be chosen are H. N. Oakley, A. W. Dudley and Henry A.
Conrad. These trustees also will receive earnings of the bank during the
process of liquidation until a fund is built up sufficient to pay the remaining
25% to depositors.
IOWA.
More than $1,000,000 was released to depositors on June
15 when the National Bank of Waterloo, Iowa, a new institution which replaces the closed Commercial National Bank,
opened for business. A pageant lasting three days was put
on by the townspeople in celebration of the opening of the
new bank. Waterloo edifices to the Des Moines "Register,"
reporting the matter, furthermore said in part:
Opening of the bank releases 40% of the deposits tied up in the closed
Commercial National bank, minus 10% waived by those who signed
depositors agreements. . . .
James M. Graham is President and Rodney P. Lien Vice-President of
the new bank.
KENTUCKY.
That an attempt to raise new capital to reopen the First
National Bank of Greenup, Ky., had failed of accomplishment and that the institution would probably be liquidated,
were indicated in advices from that place on June 5 to the
Louisville "Courier-Journal," which said:
A committee of seven depositors of the First National Bank appointed
recently to sell $35,000 in new stock to raise sufficient funds to reopen the
First National Bank here convened to-day (June 5) for a short session and
then resigned. Approximately $13,000 of the stock had been sold.
A 10% dividend is expected to be paid depositors soon by the conservator,
A. V. Pollock, and then the bank will be thrown into liquidation.
Greenup now is without banking service. The closest bank is at Russell,
10 miles east of here.
According to Associated Press advices from Greenup on
May 31 last, the Reconstruction Finance Corporation had
agreed to lend $25,000 to the institution, which had been
closed since the National bank holiday, if the $35,000 were
subscribed.
MARYLAND.
The Chevy Chase Savings Bank, Chevy Chase, Md.,
which had been in the hands of a conservator, on June 15
became the Chevy Chase branch of the Riggs National Bank
of Washington, D. C. In announcing the opening of the
branch, the Washington bank said in part:
Having acquired from John C. Walker, conservator of the Chevy Chase
Savings Bank, with the approval of the Comptroller of the Currency and
the Supreme Court of the District of Columbia, certain assets of the Chevy
Chase Savings Bank, we are now in position to offer to the people of this
community a complete banking service.
As a result of our action, there is now available to the depositors of the
former institution 60% of the amount standing to their credit—a sum
June 24 1933
quite in excess of the amount which would have been available at this time
in the ordinary course of liquidation.
The following with reference to the affairs of the First
National Bank of Snow Hill, Md., appeared in the Baltimore "Sun" of June 15:
The conservator for the First National Bank of Snow Hill, Md., has been
informed by the Washington authorities that all restrictions placed on
that bank will be removed to-day (June 15) and that the control of assets
will be returned to its Board of Directors.
Notice also was given that within 15 days the restrictions affecting the
segregation and use of deposits received during the conservatorship will
be no longer effective. Upon its opening the bank will have capital,surplus
and undivided profits of more than $132,000. The officers are Dr. John L.
Riley, President; Marion T. Hargis, Vice-President, and William T.
Bruton, Cashier.
The State Bank Commissioner of Maryland, John G.
Ghinger, has authorized reorganization plans for two banks
in that State—the Bernie Trust Co. of Taneytown and the
Farmers' State Bank of Emmitsburg—according to Baltimore advices on June 19 to the "Wall Street Journal."
The reorganization plan of the Bernie Trust Co. calls for an
increase in the capital stock to $50,000, from $40,000, and
the paying in full of all deposits under $25, State deposits,
certain charitable institutions and school deposits. Other
depositors will receive 70% of their deposits, the other 30%
to be in certificates of beneficial interest.
In the case of the Farmers' State Bank of Emmitsburg,
the reorganization plan provides for a reduction in the original capital to $5,000 from $50,000, by issuance to stockholders of one share for each 10 original shares. New capital
will be raised in the amount of $25,000 through issuance of
new stock of $10 par value, making total capital of $30,000.
Deposits of $20 or less will be paid in full. Other depositors
will receive 80% of their deposits and 20% in certificates of
beneficial interest.
MASSACHUSETTS.
The following letter from the Massachusetts Commissioner
of Banks is self explanatory:
OFFICE OF THE COMMISSIONER OF BANKS
State House, Boston.
June 20 1933.
The Commercial & Financial Chronicle,
New York City.
Gentlemen:
On page 4028 of the June 10 Issue of The Commercial & Financial
Chronicle under "Massachusetts" items, we note the following:
"On June 2 1933 the directors of the Reconstruction Finance Corporation
authorized the purchase of 6100,000 of preferred stock in the First National
Bank of Athol. Mass.,an institution being organized to succeed the Miller's
River National Bank of Athol and the Athol Savings Bank. The authorization to purchase the stock is contingent upon a like amount of common
stock being subscribed by those interested in the formation of the new
institution."
We wish to call your attention to the fact that it is apparent the Athol
Savings Bank was referred to in error as that bank is in no way connected
with the re-organization of any bank in Athol.
The Athol Savings Bank, together with all other savings banks of this
Commonwealth, was authorized to resume its usual and normal business
on March 15 1933 subject to certain limitations relative to withdrawals,
which are identical in all the savings banks of this Commonwealth.
Very truly yours,
(Signed) CHARLES J. BATEMAN, JR.,
Director, Division of Savings Banks.
The Somerville Institution for Savings, Somerville, Mass.,
closed 16 months ago, will be reopened shortly under a plan
which provides for the immediate distribution of $1,000,000
to its 20,000 depositors. The name of the institution will
be changed to the Somerset Savings Bank. The Boston
"Herald" of June 16 in indicating this went on to say:
Under a plan approved by Commissioner Arthur Guy a large portion
of the assets of the closed bank will be turned over to the new institution.
The affairs of the reorganized bank will be conducted by an entirely new
group of officers. The President will be William H. Dolben, the VicePresident, Councillor Eugene A. F. Burnett and James C. Donahue, and
the Treasurer, Richard F. Churchill.
This will be the fourth closed bank re-opened within two months by the
State Bank Commission. The other reorganized institutions are the Worcester Bank & Trust Co. of Worcester, the Merchants Trust Co. orLawrence
and the Central Trust Co. of Cambridge.
From the Boston "Herald" of June 14, it is learnt, that
Charles A. Barton, Vice-President and Trust Officer of the
Worcester Bank & Trust Co. of Worcester, Mass., prior to
its reorganization, was made President of the institution on
June 13, while other officers were chosen, and new Boards
of Directors for that institution and for the Worcester County
National Bank (of Worcester and Fitchburg) were named at
special stockholders' meetings of the two banks, which are
now controlled by the Worcester Depositors' Corporation,
in accordance with the reorganization plan of the Worcester
Bank & Trust Co.
In a statement of condition as of the commencement of
business June 12, and after consummation of the reorganization plan of the Worcester Bank & Trust Co., the Worcester
County National Bank reported capital of $2,769,500;
surplus and undivided profits of $2,274,086; deposits of
$29,015,798 and total resources of $36,050,282.
Officers of the Worcester County National Bank, as named
in advices from Worcester on June 15, printed in the Boston
"Herald," are as follows: 1
President, Walter Tufts; Vice-Presidents, Alfred R. Brigham, Frederick
IV. Holden, Alvin J. Daniels, John J. Flynn. Harry R. McIntosh, Warren
S. Shepard; Cashier, Charles S. Putnam; Assistant Cashiers. IIalford T.
Tillson, John A. Fitzgerald, Ralph W. Davis, James C. Andrew, Norman
B.Potter, C. Lane Goes, Horace E. Snow. The trust department is headed
by Clarence A. Evans, Vice-President and Trust Officer. James C. Andrew
is Assitant Trust Officer, while Catharine Olney is manager of the women's
department.
MICHIGAN.
Payment of a 25% dividend to depositors in the First
National Bank of Birmingham, Mich., will be made the
present week, Charles E. James, conservator of the bank,
announced on June 15, with the opening on that day of the
new Birmingham National Bank, in which the United States
Government has a half interest. Birmingham advices to
the Detroit "Free Press," noting this, went on to say:
Mr. James added that he would resign his post of conservator after
arranging for the dividend payment, which will release about $500,000,
and devote his time to his duties as executive Vice-President in charge
of the new institution.
The new bank was crowded with early depositors and well wishers throughout the day and received $160,000 in new accounts.
Walter L. Moreland, formerly assistant Cashier of the old bank, was
named Cashier of the new one shortly before the doors opened.
The purchase of $60,000 of preferred stock in the new
Birmingham National Bank by the Reconstruction Finance
Corporation was noted in these columns in our June 10 issue,
page 4029.
Concerning the affairs of the Fidelity Bank & Trust Co.
of Detroit, Mich., which closed its doors Oct. 7 1931, the
Detroit "Free Press" of June 13 carried the following:
Creditors of the trust department of the Fidelity Bank & Trust Co. will
receive an additional 10% payment, or $124,886.24, Judge Ormond F.
Hunt, of Circuit Court, ruled Monday (June 12). Application for the
payment was made by Paul F. Wieselberg, attorney for the co-receivers.
To date $1,061,450.17 has been paid creditors of the company. This
includes $473,000, or 30%,from the trust department,20% from the savings
department and 10% from the commercial account.
Harry J. Fox, who with J. Walter Drake, has been co-receiver Monday
asked to be permitted to resign. Judge Hunt said he could not accept the
resignation until the receivership has been completed. He permitted the
application to be placed on file, however, and said Mr. Fox could remain
Inactive. Mr. Fox. in March of this year, was appointed conservator for
the Detroit Trust Co.
The reopening on July 8 next of the Oxford Savings Bank
of Oxford, Mich., releasing about $75,000 to depositors,
is reported in the following dispatch from that place on June
18, printed in the Detroit "Free Press":
To celebrate the reopening of the Oxford Savings Bank July 8 with the
release of approximately $75,000 to depositors of the old bank, businessmen
are planning a community celebration.
Details are being worked out by a committee of merchants. The $75,000
distribution will represent a dividend of 15% on deposits of the closed bank.
MINNESOTA.
Reopening of the Farmers' & Merchants' State Bank and
the Sibley County State Bank, both of Henderson, Minn.,
followed by their immediate consolidation under the title of
the latter, was announced on June 13 by Elmer A. Benson,
State Bank Commissioner for Minnesota, according to the
Minneapolis "Journal" of June 14.
MISSISSIPPI.
The Mississippi State Banking Department on June 12
announced the reopening on a normal basis of the Leake
County Bank at Carthage, Miss., on that date, according to
a dispatch by the Associated Press from Jackson, Miss.,
which went on to say:
J. S. Love, Superintendent of State Banks, said the institution was
prepared to pay a 10% dividend to depositors on reopening, amounting to
$15,000. The bank is capitalized at $30,000 and carries a surplus of
$3.000, department records show. Superintendent Love said the reopening
restores banking facilities to a section that has been without banking service
since the March holiday.
It is learnt from McComb, Miss., advices on June 15 to
the New Orleans "Times-Picayune" that the First National
Bank of McComb, which had been operating on a restricted
basis since the National bank holiday, was to reopen for
normal business on June 17 and that its former affiliated
institution, the McComb Savings Bank & Trust Co., has
been absorbed by the First National and henceforth will be
operated as a department of that institution, which is a
member of the Federal Reserve System. The dispatch
continuing said:
J. F. P. O'Connor, Comptroller of the Currency, served notice that the
conservatorship for the First National would end with the reopening of the
bank.
Conservator Xavier A. Kramer said to-day (June 15) that on July 2,
15 days after the reopening, all funds received in trust during the holiday
period would be transferred to regular deposit accounts. After the removal
of all "slow, doubtful, and non-liquid" assets, as required by the Treasury
Department, the new bank statement has been pronounced "sound" by
the National bank examiners, according to bank officials.
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Volume 136
A subsequent dispatch from McComb to the same paper
(June 16) named the officers of the First National Bank as
follows: Dr. William Neville, President; P. J. Abright,
active Vice-President and Cashier; W. T. Denman, VicePresident; C. E. Carnes, Assistant Cashier, and J. V. Kohman, Trust Officer.
The Capital National Bank in Jackson, Jackson, Miss.,
the new institution which supplants the Capital National
Bank and the Citizens' Savings Bank & Trust Co., open for
business on June 21. The new bank, which is a member of
the Federal Reserve System, shows in a pro forma statement
of condition as of the opening date, a capital structure of
$400,000, consisting of $200,000 preferred stock, $150,000
common stock, and $50,000 surplus; deposits of $1,667,273,
and total resources of $2,067,273. The personnel of the
institution is as follows: Thad B. Lampton, Chairman of
the Board of Directors; J. T. Brown, President; T. W.
Yates, Vice-President and Cashier; S. C. Hart, Vice-President and Trust Officer; George C. Wallace, Vice-President
and Amos E.Johnston, Assistant to President. In indicating
the approaching opening of the bank, the Jackson "News"
of June 18 said in part:
The opening of the $400.000 institution makes available to more than
5.000 depositors in the Capital National Bank and Citizens Savings Bank
& Trust Co., which it succeeds, the amount of $1.667,272. which officers
said would be set up to their credit on the new bank's books when the
doors swing open three days hence.
Under the reorganization plan, which was drafted under supervision of
the National Treasury Department, the Federal Reserve System and the
Reconstruction Finance Corporation, public and preferred deposits are
made available in full while 50% of common deposits are made available.
with the deferred balance trusteed separately in the two old banks, to bear
2% interest per annum until paid.
NEW JERSEY.
Millard F. Schute, Jr., conservator of the Collingswood
National Bank of Collingswood, N. J., which has been
closed since March 4, on June 17 announced a plan for the
organization of a new institution according to the Philadelphia "Ledger" of June 18, which added:
The Collingswood National Bank has been closed since March 4. Schute
was formerly Cashier. He said the plan has received the approval of the
United States Treasury Department, at Washington.
By a two-thirds vote the stockholders of the First National
Bank of Jamesburg, N. J., at an adjourned meeting on June
14 agreed to the proposition of the Government for early
reopening of the bank, which has been doing a restricted
business since March 4. Jamesburg advices to the Newark
"News" of June 15,from which this is learnt, went on to say:
The proposition at the meeting, presided over by Joseph M. Perdue of
Newark, President. called for surrender of the stock now held by
stockholders.
This was agreed to and the stockholders now may purchase new stock
at about $120. The general public will be invited to purchase the new series.
Milton I. Voorhees, conservator, said the next move will be to determine
he amount of the deposits to be retained.
The Ridgefield National Bank of Ridgefield, N. J., has
been authorized to resume full banking operations.
Advices to the New York "Times" from New Brunswick,
N. J., on June 22 stated that the New Brunswick Trust Co.,
of which former Governor George S. Silver of Metuchen,
N. J., is Chairman of the Board, had announced that day
that as a measure of "protection for its depositors" it would
operate under provisions of the Altman Act., which allows
liens on savings and checking accounts. The dispatch went
on to say:
No payments will be made to depositors until a plan of reorganization
has been made effective by approval of the Commission of Banking. New
deposits are to be received as trust accounts to be kept "100% liquid."
The Liberty Bank, a branch of the trust company, is similarly affected.
The Hamilton Trust Co. of Paterson, N. J., and its
Totawa and North Main Street branches, reopened for unrestricted business on June 21 by permission of the Federal
Reserve Bank, according to Associated Press advices from
that city. The institution, which has 20,000 depositors,
since Mar. 4 when the bank holiday was declared, it was
stated.
NEW YORK STATE.
Announcement was made on June 13 by John R. Evans,
conservator of the National Bank of Marcellus, N. Y., that
a plan to reorganize the institution on a basis that would
make available to depositors 60% of their money had been
approved by the Comptroller of the Currency, according to
the Syracuse "Post" of June 14. The plan, which was to
be presented to the depositors shortly, was outlined by Mr.
Evans as follows:
It is the object of the management to reorganize the bank under a plan
which would release the largest possible percentage of deposits to insure
the maximum necessary from depreciated assets for the benefit of the depositors and to provide a capital of $50,000 and paid-in surplus of $25,000.
This stock will be offered to stockholders, depositors and the public.
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Financial Chronicle
The plan would make 60% of the deposits available to depositors upon
the reopening of the bank. Depositors will be asked to waive their rights
and interest in the remaining 40% in consideration for participating certificates, which would entitle them to a proportionate interest in the assets.
The assets, consisting of bonds, notes and mortgages, would be transferred immediately by the bank to three trustees to be selected and charged
with the duties of managing the trust and distributing the proceeds to the
certificate holders proportionately.
Assets pledged with the trustees include bonds of a par value of $298,000,
which under present depreciated prices have a market value of $112,000.
The balance of the assets, consisting of notes and obligations of borrowers,
have a face value of approximately $138,000.
It is the opinion of the management that the assets transferred to the
trustees should be administered for the benefit of the depositors. It can
be managed in a way that would avoid losses which would result from
Immediate sale of bonds at present prices or from pressing immediate payment of mortgages and notes outstanding.
The plan requires the consent of at least 75% of the depositors, excluding
claims of depositors and other creditors secured in full or entitled to preferred claims.
Holders of certificates will be entitled to interest, if earned by assets in
the hands of trustees, or proceeds thereof from time to time as represented
by their certificates at the rate of 3% a year.
'
To complete the plan it Would be necessary for outstanding common
stock to be turned in and canceled and new stock issued. The present
common stockholders would have the right to subscribe to the new stock
In an amount equal to the number of shares they now own at the issue price
of $150 a share. The balance of the stock not subscribed by stockholders
will be offered to depositors and the public.
NORTH CAROLINA.
The reopening on June 15 of the First National Bank of
Salisbury, N. C., without restrictions was indicated in a
dispatch from that place on June 14 by the Associated Press,
which quoted W. H. Woodson, President of the institution,
as saying that the bank had met "full conditions of Governmen, plans" necessary to its reopening. '
OHIO.
According to the Cleveland "Plain Dealer" of June 18,
directors of the unlicensed Commercial & Savings Bank of
Berea, Ohio, on June 17 sent to ,depositors and stockholders
a prospectus of their plan for reopening the bank, asking
for signed consents to be returned. The paper mentioned
went on to say:
The plan is to alter the capital structure of the bank from the present
form-1.000 shares of a par value of $100—to 4,000 shares of a par of
$25. Present stockholders of the old bank would receive two shares of the
new stock. An additional 2,000 shares of the new stock must be sold to
provide capital. This will be sold at $30 a share. Of this, $25 will go to
capital and $5 to the surplus account.
Depositors will be given certificates of participation for 25% of their
deposits. On the 75% remaining in the bank, they shall have the right of
withdrawal, with withdrawals restricted to ordinary business and personal
needs, except in case of emergency.
That the Niles Bank of Niles, Ohio, a new bank which
succeeds the Niles Trust Co., would open on June 15 was
indicated in a dispatch from that place by the Associated
Press on June 13, which said:
Approximately $200,000 will be released to depositors of the Niles Trust
Co. when its successor, the Niles Bank Co., opens Thursday morning, it
was announced to-day.
Probable reopening on a 100% basis of the Sylvania Savings Bank Co. of Sylvania, Ohio, is indicated in the following
taken from the Toledo "Blade" of June 15:
, The Sylvania Savings Bank Co., operating under restrictions may re-open
completely, if Court permission to settle its indebtedness to the Ohio
Savings Bank & Trust Co. (Toledo) is granted, D. W. Beveridge, conservator, indicated in a petition filed Wednesday in Common Pleas Court.
Mr. Beveridge plans to settle the debt, $35,132. either by paying 10%
In cash plus $47,428 in claims against the Ohio bank oiby turning over to the
Ohio bank $70,265 in claims without meth payment.'
Concerning the affairs of the unlicensed Union Trust Co.
of Cleveland, Ohio, the liquid assets of which together with
those of the Guardian Trust Co. of Cleveland are to be
taken over by the National City Bank of Cleveland, Associated Press advices from that city on June 22 contained
the following:
A judgment for $3.158,858 was awarded the State Banking Department
on behalf of the closed Union Trust Co. late to-day (June 22) against
Kenyon V. Painter, director and one of the largest stockholders in the
institution.
Only a few hours after the Banking Department filed suit against Mr.
Painter to collect debts he owed the bank, his attorney admitted the debts
and agreed to the judgment. It was entered by Common Pleas Judge L. E.
Skeet,
Oscar L. Cox, conservator of the bank, said applications for foreclosure
and sale of collateral involved would be filed at an early date. The suit
named Mr. Painter. his wife, formerly of St. Joseph, Mo., and twenty
others, all having some interest in the properties involved in mortgages
given by Mr. Painter in exchange for the loans.
OKLAHOMA.
Reopening of the Shawnee National Bank of Shawnee,
Okla., which closed some months ago, is expected soon with
completion of arrangements for the bank to open as a newly
organized institution.. Advices from. Oklahoma City on
June 20 to the "Wall Street Journal" reporting the above
furthermore said:
F. H. Riley, Chairman of the depositors' committee.. announced an
agreement with bankers has been made to re-open a new bank with $100,000
capital and 8100.000 surplus, which will purchase from the receiver all
assets of the old Shawnee National that examiners will allow.
June 24 1933
PENNSYLVANIA.
Plans"for opening a new bank to replace the First National
Bank of Wilkinsburg, Pa., have been approved by the Comptroller of the Currency, according to the Pittsburgh "Post
Gazette" of June 14, which went on to say:
"It is now up to them to see that the practical details are worked out."
Assistant Comptroller Lyons said, explaining that he meant raising the
necessary capital and perfecting an organization.
Martin L. Moore. who has been in charge as conservator of the First
National Bank of Wilkinsburg since it failed to re-open after the bank
holiday order by President Roosevelt, said that an informal meeting
was held in Wilkinsburg Monday. The plan was discussed favorably
and it was held necessary to await word from Washington. The meeting
was called by the Wilkinsburg Chamber of Commerce.
About $4.000,000 is now held by the restricted First National of Wilkinsburg. Another name, which has not yet been chosen, will be selected for the
new bank, Moore said.
TEXAS.
Application of James Shaw, State Banking Commissioner
for Texas, for receivership for the Security Trust Co. of
Austin, Texas, was granted on May 31 by Judge W.E. Robertson of the Travis County District Court, according to
Associated Press advices from Austin on the date named,
which went on to say:
James V. Allfred, Attorney-General, filed the application for Shaw.
Judge Robertson named FL Grady Chandler,former Assistant AttorneyGeneral, receiver for the company.
,
Action was taken, the Attorney-General said, to protect interests of the
depositors.
WISCONSIN.
A dispatch from Oshkosh, Wis., to the Milwaukee "Sentinel" under date of June 15 stated that plans for the reopening
of the City National Bank of Oshkosh were in process of
being submitted to the Comptroller of the Currency, according to an announcement on that day by Frank B.
Keefe, Oshkosh attorney, who heads a committee endeavoring to reorganize the institution. Mr. Keefe was quoted
as saying that a new organization would be formed to take
over the affairs and assets of the old institution, which closed
in January last.
Additional List of Banks Licensed to Resume Operations in Second (New York) Federal Reserve
District.
On June 21 the Federal Reserve Bank of New York issued
the following list, supplementing its statement of June 14
(noted in our issue of June 17, page 4214), showing additional banking institutions in the Second (New York) District which have been licensed to resume full banking operations:
FEDERAL RESERVE BANK OF NEW YORK.
[Circular No. 1247, June 21 1933J
MEMBER BANKS
NEW JERSEY.
Paterson—The Hamilton Trust Co. of Paterson.
Ridgefield—The Ridgefield National Bank.
NEW YORK STATE.
Ebenezer—x Ebenezer State Bank.
Bank in Buffalo Branch territory.
GEORGE L. HARRISON, Governor.
ITEMS ABOUT BANKS, TRUST COMPANIES, &C.
Arrangements were made June 20 for the transfer of a
New York Stock Exchange membership at $230,000. The
previous transaction was at $250,000 on June 16th.
The New York Cotton Exchange membership of William
W. Downs was sold June 19 to William P. Jenks,for another,
for $21,000, a decline of $500 from the last previous sale,
and Allen H. Wardle sold his second membership to Richard
T. Harriss, Jr., for another, for $21,000.
The third membership of Charles Slaughter on the New
York Coffee & Sugar Exchange was sold June 20 to E. J.
Schwabach for $6,500, an advance of $250 over the last scale.
Arrangements were completed June 21 for sale of seat on
Chicago Curb Exchange for $1,800, an advance of $50 over
the previous sale and a high point this year for prices of
Curb memberships.
Arrangements were completed June 17 for the sale of an
extra membership on Commodity Exchange, Inc., by A. 0.
Lowry to Harold L. Bache for another at $3,250, and for
the sale of an extra membership by W. Channing Burbank
to Le Roy Wood, for another, at $3,800. Other sales announced June 19 were Philip M. Basser, extra membership,
to Cornelius Shields, for another, $3,700, and R. Bogrand
to A. H. Vose, for another, at $3,700. On June 21 arrange-
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Financial Chronicle
meats were made for the transfer of an extra membership
held by Aage Bierrie, to E. A. Canalizo, for another, at
$3,900, a new high price.
Chester R. Dewey will assume the 'Presidency of Grace
National Bank on July 17th. Mr. Dewey is at present
Vice-Chairman of First Citizens Bank and Trust Co. of
Utica. He is also acting as Chairman of the State Legislative
Committee of the New York State Bankers' Association
and served as President of the Trust Companies' Association
of New York State from 1931 to 1933. A native of Illinois,
he was educated as a lawyer at the University of Illinois
and commenced practise of the law in New York City in
1909 with the then firm of Wilmer, Canfield and Stone,
later Satterlee, Canfield and Stone. He later became a
member of the firm of Dunmore, Ferris & Dewey of Utica,
a connection which lasted until he became President of the
Citizens Trust Co. of that city. Mr. Dewey is also President
of The Homestead Aid Association of Utica. and a Director
of Consolidated Water Co., Utica City Ice Co., Citizens
Casualty Co. of New York and various other corporations.
Mr. Dewey as President of the Grace National Bank will
succeed Francis H. McKnight who resigned on May 15 1933.
Permission was granted to the Dunbar National Bank,
New York, by the Comptroller of the Currency to establish
its first branch office at 135th St. and Seventh Ave. The
bank was founded in 1928.
George T. Connett, Executh e Vice-President and a trustee
of the North River Savings Bank, New York, was elected
President of that institution on June 19. Mr. Connett succeeds Theodore H. Banks who died on June 8 as noted in our
issue of June 10, page 4031. Mr. Connett first became connected with the bank in 1907 as an Assistant Secretary.
Franklin Stewart Dalrymple, a member of the New York
Stock Exchange firm of Walter J. Fahy & Co., New York,
died unexpectedly on June 18 at Greenwich, Conn., where he
was visiting. He was 40 years old. Mr. Dalrymple became
a partner of Walter J. Fahy & Co. in 1930, having previously
been resident manager of the firm's branch office at 522
Fifth Ave.
Louis M. Starr has been appointed President of the Ridgefield National Bank of Ridgefield, Conn., succeeding Archibald V. Davis, whose death occurred recently, according to
the Hartford "Courant" of June 10. Mr. Starr has been a
member of the Board of Directors for the past 15 years, it
was said.
Jerome '1'. Congleton, a former Mayor of Newark, N. J.,
was appointed President of the United States Trust Co. of
that city at a meeting of the directors held June 19, according to the Newark "News" of June 20. Mr. Congleton will
succeed J. Ashley Brown, who resigned, effective July 1. Mr.
Brown, who has headed the institution since it opened in
1927, will continue with the institution as a director.
Effective Monday next, June 26, the Hudson County
National Bank of Jersey City, N. J., will take over the Journal Square National Bank of Jersey City. The deal will
include the office building at Veterans Square, of which the
Journal Square National occupies the main floor. The
"Jersey Observer" of June 22, from which the above information is obtained, continuing said in part:
The name of the bank will be changed and is to be operated as one of
the branches of the Hudson County National, which will continue its main
office at 75 Montgomery Street. In all probability the name of the office
building will also be changed.
This action which will be taken at a meeting of the Board of Directors
on Monday morning will mean the discontinuing of the present branch
bank of the Hudson County National, located at 2860 Boulevard, only a
few doors from the Journal Square bank. It is understood that the lease
on the branch bank has only a short while to run.
The Hudson County National Bank has been interested in the Journal
Square bank for the past several years and has had control of the stock.
The Directors of the Hudson County bank have also been on the Directorate of the Journal Square bank, and it Is said they now control the
majority of the stock and the bank will be taken over as a unit.
In all probability the present officers of the Journal Square bank will
be discontinued and it will be put in charge of one of the officers of the
Hudson County National, working under the supervision of President
Frank C. Ferguson.
The new unit will increase the already strong assets of the Hudson
County bank by approximately six or seven million dollars.
It is learnt from the Philadelphia "Ledger" of June 23 that
the Pennsylvania Banking Department on June 16 announced bile following advance payments to depositors of
closed banks:
4401
Jordan State Bank, Allentown, 10%, amounting to $14,894, on June 29,
bringing the total payments to depositors since Oct. 28 1931, up to 60%.
North Branch Title & Trust Co., Sunbury, 5%, amounting to $27,756, on
June 30.
Pittsburgh-American Bank & Trust Co., Pittsburgh, 10%, amounting to
$204,562, on June 29.
McKean County Trust Co., Bradford, Pa., 10%, amounting to $233,357,
on June 27.
On June 15 the Riggs National Bank of Washington,
D. C., opened its new Chevy Chase branch (formerly the
Chevy Chase Savings Bank, Chevy Chase, Md.) giving the
institution seven modernly equipped and conveniently located
branches in addition to its main office. The new branch is
officered by Harold W. Burnaide, Assistant Cashier and
Manager and J. Ezra Troth, Assistant Manager. The chief
officers of the Riggs National Bank are: Charles C. Glover,
Chairman of the Board of Directors; Charles C. Glover Jr.,
Vice-Chairman; Robert V. Fleming, President; William J.
Flather, Avon M. Nevius, George 0. Vass, Sidney F. Taliaferro (and Trust Officer and Cashier), and H. G. Hoskinson,
Vice-Presidents.
At the recent regular monthly meeting of the Directors
(as reported in the Washington "Post" of June 13), a quarterly dividend of $2 per share -was declared, payable on July
15 to stockholders of record June 30.
After 43 years of active service in the banking business,
Maurice Otterback has retired sas President of the Anacostia
Bank at Anacostia, Washington County, D. C., and become
Chairman of the Board of Directors. J. Frank Campbell, a
Vice-President of the institution for many years, succeeds
Mr. Otterback in the Presidency. The Washington "Post,"
from which this is learnt,- continuing said in part:
Mr. Otterback began his banking career in the National Capital Bank in
1890. In 1906, he became Manager of Anacostia Bank, which was at that
time a branch of the former Union Savings Bank.
When the Anacostia Bank became a State bank in 3910, Mr. Otterback
was elected to the office of Cashier. He became President of the bank
May 1 1918.
Development of Anacostia Bank is due largely to the activity of Mr.
Otterback and his broad acquaintance among the people in the southeastern
part of the District of Columbia.
The appointment of Barnum L. Colton, heretofore a VicePresident and Trust Officer of the District National Bank
of Washington, D. C., as Real Estate Officer of the National
Savings & Trust Co. of that city, was announced recently by
William D. Hoover, President of the latter institution, according to the Washington "Post" of June 18, which continuing said:
After being in the Trust Department of the American Security & Trust
Co. for several years, Mr. Colton left that institution in 1924, to become
associated with the District National Bank as Assistant Trust Officer. Subsequently he was elected a Vice-President and Trust Officer of that bank.
The Cleveland Trust Co. of Cleveland, Ohio, on Monday of
this week, June 19, opened its 60th banking office. The
latest addition to the chain is located at Shaker Square
in quarters formerly occupied by a branch of the former
Guardian Trust Co. William B. Needs, formerly Assistant
Manager of the bank's new business department, is Manager
of the new branch. The Cleveland "Plain Dealer" of June
18, in noting the approaching opening of the new office,
furthermore said in part:
The opening is in keeping with the program of the Cleveland Trust Co.
in the branch banking field, in which it was a pioneer in this country. Last
week it announced its 59th office with the acquisition of the quarters
formerly occupied by the Union Trust Co. at Detroit and W. 65th Street.
At a meeting held June 14, directors of the Fifth Third
Union Trust Co. of Cincinnati, Ohio, promoted Harry Nagel,
from an Assistant Cashier to a Vice-President. The Cincinnati "Enquirer" of June 15, from which this is learnt,
continuing said:
Mr. Nagel has advanced through 33 years of service with the predecessor
banks and the Fifth Third Union having started with the old Fifth
National
Bank as a clerk in August 1900. He was made Manager of the transit department when the Fifth and Third National Banks were merged in
1908.
In 1920 he became Assistant Cashier, his particular work
being closely
identified with the bank's correspondent institutions. Thus he
has a wide
acquaintance with bankers throughout the Middle West and in
the Southern
States.
In his new duties, Mr. Nagel will continue to
supervise the Fifth Third's
relations with correspondent banks throughout the
district.
A dispatch from Galion, Ohio, on June 14 to the
Cincinnati
"Enquirer" stated that A. E. Evenson, receiver for
the
Citizens' National Bank of Galion was issuing a fourth
dividend to depositors of the defunct bank in amount
of 81,6%.
This makes a total of 581/2%, with additional
payments expected, it was said.
4402
Financial Chronicle
The Central Bank Co. of Youngstown, Ohio, will pay a 5%
liquidating dividend to depositors, making a total of 85%
paid since the institution closed Nov. 29 1929, according to
the advices on June 16 to the "Wall Street Journal."
Advices by the United Press from Cleveland, Ohio, on
June 9 reported that Alvanley Johnston, Chief Engineer of.
the Brotherhood of Locomotive Engineers, was indicted by
the Cuyahoga County Grand Jury on that day on charges
growing out of the failure in December 1931 of the Standard
Trust Co. of Cleveland. James H. Cassell, General Secretary-Treasurer of the Union, also was named in the indictment. A second indictment voted by the Grand Jury named
C. Sterling Smith, former President of the Standard Trust
Co. on charges additional to those of embezzlement on whidh
he was indicted in March last. Mr. Smith was also named
with Johnston and Cassell in the first indictment. The dispatch furthermore said:
Among the charges against Johnston and Cassell were "misapplication" of
various sums of money held in accounts of the bank. "False entry to cover
up misappropriation of credit," and "fraud." The misapplication charges
totaled hundreds of thousands of dollars. . . .
The Standard Trust succeeded the Brotherhood of Locomotive Engineers'
Co-operative National Bank, one of the vast array of financial ventures with
which the brotherhood had become connected during the administration of
the late Warren S. Stone, for twenty-two years president of the union.
After the merger, the brotherhood kept huge deposits in the Standard
Bank, and was the largest stockholder. When the Standard failed in December 1931. with $18,000,000 in liabilities, the union had almost $12,000,000 on deposit. Many union officials were on the Standard Board of
Directors, among them Johnston and Cassell.
The first indictment charged Johnston, Cassell and Smith, as Directors
and officers of the bank, with irregularities in handling affairs of the institution as concerning the Brotherhood of Locomotive Engineers. The first
count charged that securities owned by the brotherhood were illegally taken
from the Standard Trust and were replaced by notes for $450,000 on the
Standard Corporation, subsidiary of the bank.
Control of the American National Bank & Trust Co., 306
South Michigan Avenue, Chicago, has been acquired by a
syndicate of Chicago business men headed by Weymouth
Kirkland. Announcement of the purchase was made in New
York by Mr. Kirkland after final arrangements were made
on June 16. The Chicago "Tribune" of June 17, authority
for the above, continuing said in part:
Mr. Kirkland declined to comment on a report that the Chicago group is
considering removal of the bank to La Salle Street. It was reported here,
however, that the banking quarters of the former State Bank of Chicago
at 120 South La Salle Street have been considered.
Names of the syndicate members were not disclosed, but they were described as a "group of Chicago business men." Control of the bank passed
into the hands of the Manufacturers Trust Co. of New York some time ago
when that institution took over some collateral securing loans made to individuals formerly identified with the management of the bank.
Mr. Kirkland announced that the group that he represents ha purchased
the stock as an investment in a growing institution and that the bank would
not be merged with any other institution. The group buying control, it is
understood, will pool their investment in a holding corporation. When the
permanent organization of the latter is completed names of participating
individuals are expected to be released and plans for further development of
the bank announced.
S. J. T. Straus, according to Mr. Kirkland's announcement, is expected
to resign as President in the near future. Melvin L. Straus, however, will
continue as Executive Vice-President, and his family and associates will continue to hold a substantial investment in the bank.
Prior to Jan. 4 1933, the American National Bank & Trust Co. was called
the Straus National Bank & Trust Co. S. J. T. Straus, President and director,
Is Chairman of S. W. Straus & Co., Inc., which was placed in receivership
on March 4 1933.
The institution is a member of the Federal Reserve System. Deposits on
March 25 1933, totaled $10,542,000. . . .
The First National Bank of Toledo, Ill., was placed in
voluntary liquidation on June 6 1933. The institution, which
was capitalized at $50,000, was succeeded by the First National Bank in Toledo.
Duane Swift, formerly Assistant Vice-President in charge
of new business, was made Cashier of the Amalgamated
Trust & Savings Bank of Chicago, Ill., at a meeting of the
directors of the institution beld June 15, according to the
Chicago "Journal of Commerce" of that date. Mr. Smith
has been with the bank, it was stated, since its formation
eleven years ago.
At the same meeting, the directors declared the regular
quarterly dividend of $1.50 a share on the capital stock, payable July 1 to stockholders of record June 28.
Walter Kasten, President of the First Wisconsin National
Bank of Milwaukee, Wis., and President of the Wisconsin
Bankshares Corporation, announced the election of H. R.
Burling as Vice-President and director of the latter, following a meeting of the Board of Directors on June 15. Mr.
Burling will correlate the activities of the member banks of
the Wisconsin Bankshares group and supervise the relations
June 24 1933
of the various units with the parent company. An announcement by the corporation furthermore said:
Prior to becoming associated with the Bankshares organization June 1,
Mr. Burling was connected with Peat, Marwick, Mitchell & Co. prominent
.firm of accountants and auditors. Since 1919 he was resident Manager of
their Milwaukee office, and was in supervisory charge of bank examinations and audits conducted by the firm in the Middle West, including the
examination of banks connected with the Milwaukee Clearing House association.
Previously, Mr. Burling was associated with the Metropolitan Bank,
Toronto, Canada, prior to the consolidation of that bank with the Bank of
Nova Scotia. He served in the capacity of Manager of various branches in
Toronto and other Ontario points. . . .
In his report to the Board of Directors, Mr. Kasten stated,
"While earnings of the corporation for the past six months
have been satisfactory, conservatism suggests that no divi
dend action be taken at this time because of the relatively
slack demand for bank credit and prevailing low money
rates, and to further strengthen the reserves of the corporation. This is in line with the policy recommended to all national banks by the Federal Government. We anticipate continued satisfactory earnings for the remainder of the year."
The National Bank of Tulsa, at Tulsa, Okla., formerly the
Exchange National Bank, has acquired the business of Central State Bank, Tulsa, which was organized in 1929. Oklahoma City advices on June 16 to the "Wall Street Journal,"
reporting this, continuing said:
According to an announcement by National Bank of Tulsa, it has assumed
all deposit liabilities of the Central State Bank.
The Central State Bank, as of Dec. 30 1932, had capital of $100,000,
surplus and undivided profits of $14,365, and deposits of $596,460.
James D. Russell on June 15 resigned as President of the
First Owensboro Bank & Trust Co. of Owensboro, Ky., to
become connected with the Bank Relations Department of
the First National Bank of Louisville, Ky. Mr. Russell is
succeeded by C. E. Field, formerly Vice-President of the
bank, the change going into effect June 19. Owensboro advices to the Louisville "Courier-Journal," noting the above,
continuing said:
Mr. Russell has been connected with the banks of Owensboro for more than
a quarter of a century. He was Cashier of the First National Bank when it
took over the Owensboro Banking Co. and the Farmers' & Traders' Bank,
later becoming President of the combined banks. Mr. Russell is President
of the Kentucky Bankers' Association.
Completion of the organization of the Nashville Trust Co.
of Nashville, Tenn., which has taken over the business of the
old Nashville & American Trust Co. (former affiliate of the
American National Bank of Nashville from which it was recently separated), was announced on June 6, according to
the Nashville "Banner" of that date. The new trust company, which is prepared to do a general trust business, with
savings and checking accounts, and the management of real
estate, has a paid-in capital and surplus of $2,000,000. The
Institution is headed by H. G. Hill, a well known business
man of Nashville, with Charles Nelson as Executive VicePresident. Other officers are as follows: Henry Pointer,
Charles E. Bell (in charge of the Springfield branch), V. I.
Witherspoon, and E. E. Murray, Vice-Presidents; Walker H.
Gill, Trust Officer; Warner MeNeilly, Comptroller and Secretary ; Murphy S. Webb, Treasurer; Currey B. Hearn, Assistant Treasurer, and F. B. Young, Jr. and D. C. Lee, Assistant Secretaries. The "Banner" continuing said:
The new trust company was recently organized by H. G. Hill and associates who announced at the time that they felt Nashville and Middle Tennessee were entitled to an institution specializing in its own particular field.
With the taking over of the business of the former Nashville & American
Trust Co. and the bringing in of considerable new capital, the management
feels that it is offering its patrons an enviable amount of security with Its
paid-in capital and surplus of $2,000,000.
The former Nashville & American Trust Co. was the successor of the old
Nashville Trust Co. which was organized in 1889 with Charles Nelson Sr.
as its first President. He was succeeded by the late Joseph H. Thompson,
and from 1917 to 1926 the company was headed by the late William Nelson.
Mr. Nelson was the father of Charles Nelson, the Executive Vice-President
of the new company.
In announcing that the name of the Nashville & American
Trust Co. was to be dhanged to the Nashville Trust Co., Mr.
Hill was quoted in the "Banner" of May 1933 as saying:
We have plans to organize a trust company to which we have subscribed
the sum of $1,000,000 which will be paid in cash by citizens of Nashville
and in addition will issue $1,000,000 of preferred stock, to be subscribed and
paid for with funds furnished by Reconstruction Finance Corporation. . . .
Officials of the Caledonian Savings & Trust Co. of Fayetteville, N. Q., announced on June 13 that A. E. Dixon would
become active head of the institution, replacing John M.
Wilson as executive in charge of the bank's affairs, according
to advices from Fayetteville on June 13, printed in the
Volume 136
Financial Chronicle
Raleigh "News & Observer." Mr. Wilson, it was stated,
would retain the title of President, but finds it impossible to
give the necessary time to the duties of the post as active
head of the bank.
4403
and dropped about 2 points to 8934. Glen Alden Coal
and Parket Rustproof were both in supply and were down
at the close. On the other hand, Driver Harris shot upward over 3 points and General Tire followed suit with a
gain of 3 points to 83. In the public utility group, Columbia
That the Citizens & Southern National Bank, the head Gas & Electric pref. gained 4 points to 134 and Consolidated
office of which is in Savannah, Ga., would shortly open a Gas of Baltimore and Montreal Light & Power were higher
bank at Spartanburg, South Carolina, chartered under the by 2 points. Puget Sound 6% pref. forged ahead 4 points
laws of that State, was reported in a dispatch by the Asso- to 22 and Standard Power moved upward 2 points to 143/2.
Toward the end of the day there was considerable liquidaciated Press from Savannah on June 15, which said:
tion apparent. Irregularity was the outstanding feature
The Citizens & Southern Bank of South Carolina will establish a bank
in Spartanburg, S. C., opening the new institution about the first of July,
of the trading on the curb market on Wednesday with a
said William Murphey, President of the Citizens & Southern National Bank,
large part of the dealings concentrated on the oil shares,
on his return to-day (June 15) from South Carolina. Mr. Murphey and
Mills B. Lane, Chairman of the Board, went to Spartanburg Wednesday and
nearly all of which developed considerable strength. Humble
after conference with a group of Spartanburg business men, arrangements
Oil, Gulf Oil of Pennsylvania, International Petroleum and
immediately.
made
public
to establish the bank were concluded and
Standard Oil shares were the strong stocks and some subApplication has been made to the State Banking Department of South
Carolina for a charter and as soon as this is granted and a suitable location
stantial gains were in evidence as the market closed. Public
obtained, the new bank will open, said Mr. Murphey.
utilities were fairly steady during the morning, but met,
"When we opened the Charleston office," Mr. Murphey said, "it was
profit taking and fell off. Great Atlantic & Pacific Tea Co.
our plan eventually to open offices in Spartanburg and Columbia. These
plans have never changed. The Spartanburg office is about to open."
declined about 5 points to 165 due to the agitation concerning sales taxes, and fractional losses were recorded byOn June 5 a charter was issued by the Comptroller of the such prominent speculative stooks as Glen Alden Coal,
Curency for the Gainesville National Bank In Gainesville, Swift & Co. and Lehigh Coal & Navigation. Trading was
Texas. The new institution, which succeeds the First Na- dull and prices were mixed on Thursday as the dealings
tional Bank of Gainesville, is capitalized at $200,000, con- showed a slacking off of speculative activity. Some adsisting of $100,000 preferred stock and a like amount of vances were recorded dining the early transactions bult
common stock. S. M. King is President, and Raymond P. these were generaly canceled before the close of the session,
King, Cashier, of the new bank.
Industrials were under pressure, especially Aluminum Co,
of America, which had a loss of over 3 points. Public'
The Security-First' National Bank of Los Angeles, Los utilities were down due in a measure to the uncertaintyAngeles, Calif., has declared a quarterly dividend of 65 cents, regarding the operation of the National Industrial Replacing the stock on a $2.60 annual basis, as against $3.60 covery Act, and both Electric Bond & Share and Commonpreviously paid, according to advices from Los Angeles on wealth Edison were off about 3 points at their lows for the.
June 17 to the "Wall Street Journal." The dividend is pay- day. There were occasional rallies during the day but
able July 1 to stock of record June 22.
these soon petered out as the trend of the market was oft
for the day.
The Ballard First National Bank of Seattle, Wash.,capitalMany active stocks were in supply following an early adized at $100,000, was placed In voluntary liquidation at the vance on Friday, pivotal issues among the industrials and
close of business June 10 last. The institution was taken public utilities moving rapidly downward. Toward the closeover by the First National Bank of Seattle.
of the session the trend was again upward but there was no
material change in the closing prices. Hiram Walker was oneof the features of the trading as it soared upward nearly
THE CURB EXCHANGE.
Curb market stocks were fairly firm and the price trend 4 points to 2234. Many of the active issues among the publicupward during the greater part of the week, until Thursday utilities were down on the day, Commonwealth Edison, for
when prices slipped downward following similar movements instance, declined nearly 5 points and Columbia Gas & Elecon the "big board." Speculative attention has been directed tric pref. and Consolidated Gas of Baltimore were also weak.
largely to the building stocks, public utilities and industrial Oils were moderately strong but the gains were small. Minshares, though there has been a moderate demand for oil ing shares were generally neglected. The outstanding
issues and mining stocks. Public utilities and oil shares were changes for the week were generally on the side of the adthe favorites on Saturday during the early transactions, but vance and included such popular speculative issues as.
the trading fell off during the second hour and the tickers, American Gas & Electric, 42 to 44; American Superpower,
at times, had scarcely enough to keep them going. Shares 73 to 7%;Associated Gas & Electric A,2 to 23;Atlas Corp.,
% to 1734; Brazil Traction & Light, 14 to 1434; Central
of companies engaged in building operations were also in 153
8 to 48
4; Con-4; Cities Service, 44
demand, particularly the shipbuilding stocks which were States Electric, 3% to 33
Cord
of
Baltimore,
633
%
663j;
Gas
to
Corp., 1.03(
solidated
unusually active due to the construction program on which
the Government plans to start. Typical of the strength to 11/3s; Creole Petroleum, 634 to 83j; Deere & Co., 19%
%
8
shown in these stocks was New York Shipbuilding which to 30; Duke Power, 64 to 66; Electric Bond & Share, 33
Oil
of
Canada
A,
10
to
11;
Gulf
Pennsylvania,.
of
Ford
added 234 points to its previous gain. The strong stocks to 35;
including such popular issues as Consolidated Gas of Balti- 533( to 59; Hudson Bay Mining, 7% to 83(; Humble Oil,
8; New
% to 85; International Petroleum, 14% to 163/
more, American Gas, Niagara Hudson and a few others. 773
% to 13z.
Public utility stocks were the outstanding strong shares on Jersey Zinc, 49 to 5134; Niagara Hudson Power, 123
Monday, though there was also a brisk demand for the in- Pennroad Corp., 334 to 3%; A. 0. Smith,49 to 503;Standdustrial issues and oil shares, and a number of substantial ard Oil of Indiana, 29% to 30%; Swift & Co., 1934 to 20;„
gains were registered as the market closed. The industrial United Founders, 2 to 234; United Light & Power A,7% to
division was represented on the upside by Aluminum Co. of 734 and United Shoe Machinery, 48 to 4834.
A complete record of Curb Exchange transactions for theAmerica which gained 434 points to 9034 at its top for the
day. Other strong spots were John Deere which jumped 334 week will be found on page 4435.
points and A. O. Smith which rushed upward 43' points to
DAILY TRANSACTIONS AT THE NEW YORK CURB EXCHANGE.
40. Electric Bond & Share led the advance in the public
ma,
Bonds (Par value).
utilities as it surged upward 434 points to 38, followed by
Week Ended
(Number
American Gas & Electric with a similar gain. Oil shares
-lune 23 1933.
of
Foreign
Foreign
Shares).
Domestic. Government. Corporate.
Total.
attracted considerable speculative attention as the market
247,375 $1,002,000
$56,000
$106,000 $1,164,000.
moved ahead under the guidance of Gulf Oil of Pennsylvania Saturday
Monday
770,215 3,051,000
160,000
202,000 3,413,000
and Humble Oil & Refining, the latter forging forward Tuesday
893,519 4,447,000
98,000
203,000 4,748,000
Wednesday
597,305 3,255,000
335,000
161,000 3,751,000,
nearly 4 points above Saturday's final. Mining stocks were Thursday
735,713 3,551,000
446,000
211,000 4,208,000
lb
493,569 2,790,000
147,000
140,000 3,077,000active and moved ahead to higher levels, particularly New- Friday
Total
3,737,696 $18,096,000 $1,242,000 $1,023,000 $20,361,000
mont Mining which registered a 334 point gain at 41 and
New Jersey Zinc which was a point higher at 49. Investment
Salve at
Week Ended June 23.
Jan. 1 to June 23.
New York Curb
trusts were active at higher prices.
Exchange.
1933.
1932.
1933.
1932.
Following an active forenoon session, the curb market
Stocks—No. of shares_
3,737,696
392,400
45,599,899
23.950,117turned quiet on Tuesday, though there were a number of
Bonds.
Domestic
$18,096,000 $11,409,000
$442,013,000
$354,040,100.
substantial gains and an equally large list of losses as the Foreign
government _
1,242,000
443,000
20,461,000
14,032,000.
1,023,000
1,216,000
21,837,000
35,239.000.
day ended, the latter being due largely to profit taking. Foreign corporate
Total
Aluminum Co. of America was on the side of the decline
$20,361,000 $13,168,000
$484,311,000
$403,311,100.
4404
Financial Chronicle
THE WEEK ON THE NEW YORK STOCK EXCHANGE.
Trading on the New York Stock Market has been in large
volume during the most of the present week, and while there
have been numerous checks, particularly on Thursday, as
the result of profit taking, the trend of prices, on the whole,
has been upward, the occasional setbacks stimulating the
market and boosting prices to still higher levels. Oil shares
have been in good demand and there has been considerable
speculative interest directed toward shipbuilding and allied
trades. Steel stocks also have shown considerable strength
and miscellaneous industrials have moved sharply upward
all along the line. Call money renewed at 1% on Monday
and continued unchanged at that rate throughout the week.
On Saturday the market was moderately firm throughout
the two hour session, and while the volume of sales was light,
the trading was fairly active, particularly among stocks
that will benefit from the Federal construction and shipbuilding program under the new "Public Works Act." These
included among others such prominent issues as Bethlehem
Steel, New York Shipbuilding, Foundation Co. and Thompson-Starrett. Railroad shares were somewhat irregular but
showed moderate improvement after the weekly,car loading
figures were announced. The gains included such active
stocks as, American Shipbuilding, 95% points to 297A; Amer.
'Tel. & Tel., 2 points to 1253
4; Bethlehem Steel, 334 points
to 323'; Brooklyn Union Gas,1 X points to 80; Corn Products
pref., 234 points to 136; Endicott Johnson, 3 points to 59;
Foundation Co., 3 points to 20; Ingersoll Rand, 1/7s points
-to 6634; International Business Machine, 2 points to 128;
New York Shipbuilding, 3 points to 1634; Republic Steel
pref., 234 points to 3934; United States Steel pref., 1X points
-to 943; Ward Baking pref., 234 points to 353; Warner
Brothers pref., 23's points to 173
4; Pennsylvania Dixie
Cement pref., 3 points to 24; Baltimore & Ohio, 1 point to 20
and New Haven, 1 point to 2334•
Stocks were higher all along the line on Monday, the gains
ranging from 1 to 8 or more points and including many new
tops for 1933. The bullish enthusiasm was due, in a large
measure, to the Administration's decision against stabilization at the present time. New tops were established by
'New York Central, Johns-Manville, American Radiator
and American Shipbuilding. The outstanding gains for the
day were Air Reduction, 434 points to 6334; Allied Chemical
.& Dye, 43
4 points to 117; Allegheny Steel, 5 points to 22;
American Can, 4 points to 92; American Smelting, 334
points to 3434; American Shipbuilding, 534 points to 353
%;
4; Atchison, 434 points
Amer. Tel. & Tel., 6 points to 1313
1.4? 6634; Brooklyn Union Gas,434 points to 8434; Budd Mfg.
Co. pref., 5 points to 293
4;J. I. Case Co., 10 points to 8434;
Chile Copper, 4 points to 32; Columbia Carbon, 43( points
to 6034; Continental Can, 434 points to 62; Corn Products,
4 points
434 points to 7538; Curtis Publishing Co. pref., 53
to 62; Delaware & Hudson,53.4 points to 7734; Dome Mining,
434 points to 313
4; Goodrich pref., 5 points to 4734; Homestake Mining Co., 10 points to 228; International Business
Machines (6), 4 points to 132; Johns -Manville, 7 points to
52; Liggett & Myers, 434 points to 9334; New York Central,
.3 points to 3934; New York & Harlem, 7 points to 150;
Owens Illinois Glass, 434 points to 77; Pennsylvania Dixie
Cement pref., 634 points to 3034; Peoples Gas, Chicago,
4 points to 4334;
SH Points to 7034; Republic Steel, 43
4; United
Standard Gas & Electric pref., 634 points to 543
Air & Transport, 3 points to 3334; Union Pacific (6), 734
points to 116; United States Steel, 414 points to 5794; Ward
Baking pref., 43
4 points to 40; Westinghouse, 494 points to
4694, and Western Union Tel., 694 points to 563/8.
Many prominent stocks moved to new tops during the
forenoon on Tuesday, but eased off toward the end of the
session and closed around 2 to 3 points below the previous
finals, due, to some extent, to realizing. The transactions
continued heavy, however, the total turnover being approximately 5,542,820 shares. Among the active stocks
breaking into new high ground were National Distillers,
Johns-Manville, General Motors, New York Central and
Chrysler. Stocks of construction companies were also
high, Bethlehem Steel moving up nearly 10 points at its
top for the day, while American Radiator and General
Asphalt reached new peaks for the year. Oil prices were
higher due to the strengthening of crude oil prices and the
stronger tone of the gasoline market. Industrials were
represented in the upward swing by Celanese and Industrial
Rayon, both of which were extremely active. The gains
for the day were Adams Express pref., 7 points to 71;
• American Beet Sugar pref., 4 points to 38; American Metals
June 24 1933
pref., 634 points to 72; Associated Oil,4 points to 23; Bucyrus
Erie pref., 5 points to 65; Celanese Corp., 3 points to 36;
Coca-Cola,2 points to 9534; Colorado Gas & Electric pref. A,
23 points to 82; Homestake Mining Co., 234 points to 230;
Johns-Manville, 534 points to 5134; New York & Harlem,
2 points to 152; Pacific Tel. & Tel., 334 points to 89; Reading
Co.,3 points to 53; Shell Union Oil pref., 334 points to 4734;
United Fruit, 334 points to 5938; Wrigley Jr., 234 points
to 4934, and Universal Picture 1st pref., 2 points to 34.
Irregularity was quite pronounced during the early trading
on Wednesday as most of the market leaders backed and
filled within a narrow range. As the session progressed, a
spurt of two cents a bushel in wheat and a huffish demonstration in oils pulled stocks out of the doldrum, and as the
trend turned upward, railroad issues, oils and the so-called
"wet" stocks registered substantial gains. Celanese Corp.
also moved ahead and there was a strong demand for stocks
like Air Reduction, Great Northern pref., General Refractories and General Mills. Farm implement shares were
particularly strong during the late dealings and recorded
a number of substantial advances. Outstanding among the
stocks showing gains at the close were such prominent
market leaders as Adams Express pref., 3 points to 71
Air Reduction, 334 points to 66%; J. I. Case Co., 33A points
to 86; Detroit Edison, 3 points to 89; Goodrich pref., 2 points
to 4734; International Business Machines, 4 points to 138;
Universal Leaf Tobacco pref., 5 points to 115; Western
Union Telegraph, 134 points to 5534, and Worthington
Pump pref. B, 4 points to 44.
Stocks continued to move upward on Thursday, though
the gains were comparatively small due to frequent downward reactions. Railroad shares were prominent in the
trading and so were the steel stocks, particularly Bethlehem
Steel pref. which moved up nearly 3 points. Other leading
issues continued to move around without definite trend
during most of the day. There was a yielding to pressure
during the closing hour, but the final prices were not materially effected. The changes for the day were largely on the
side of the decline and included such active issues as Air
Reduction, 23
4 points to 24; Allied Chemical & Dye, 334
points to 11234; Amexican Can, 394 points to 89; American
Sugar Refining, 4 points to 63; Auburn Auto, 23
4 points to
4; Crucible Steel,
603
4; J. I. Case Co., 534 points to 803
434 points to 48; Continental Can, 334 points to 58%; Del4 points
aware & Hudson, 4 points to 72; Detroit Edison, 23
to 8634; Foundation Co., 4 points to 20; General Cable,
pref., 434 points to 3034; Homestake Mining, 7 points to
218; Ingersoll Rand, 334 points to 6434; Liquid Carbon, 434
points to 2834; National Distillers, 33% points to 7834;
Peoples Gas, 334 points to 64; United States Steel, 234 points
3 Western Union Telegraph, 334 points to 5334; and
to 54/s;
Woolworth & Co. (2.40), 2 points to 42.
Narrow and irregular price movements were the rule
during most of the session on Friday, and while there was a
modest rally toward the end of the session in which practically
all groups participated, the final gains were not particularly
noteworthy. Specialties led the way upward, followed by
the railroad shares, public utilities and industrials. Farm
implement stocks and mail order shares also were strong on
the improvement in the price of wheat. The gains for the
day included such active stocks as Allied Chemical & Dye,
%; American Can, 234 points to 9134.
334 points to 1153
American Tel. & Tel., 2% points to 12734; Atchison, 25's
points to 66; Auburn Auto, 234 points to 63; J. I. Case Co.,
434 points to 85; Chrysler Corp., 334 points to 3434; Delaware & Hudson, 434 points to 7634; du Pont, 334 points to
7334; Homestake Mining, 10 points to 228; Industrial Rayon,
4 points to 32; National
334 points to 68; Liquid Carbon, 33
Distillers, 4 points to 7734; Union Pacific, 234 points to
11434; United States Steel, 294 points to 5634; Western
Union Telegraph, 3 points to 5514, and Woolworth (2.40)
234 points to 4434. The final tone was strong.
TRANSACTIONS AT THE NEW YORK STOCK EXCHANGE,
DAILY. WEEKLY AND YEARLY.
Week ended
June 23 1933.
RaUroad
State.
Stocks.
Number of and !Wised!. Municipal &
Bonds.
!ben Bonds.
Shares.
1,587,703
5,481,846
5,542,820
3,891,840
4,374,041
3,314.100
Saturday
Monday
Tuesday
Wednesday
Thursday
Friday
Tntal
$1,611,000
3,161,000
2,890,000
2,388,000
2,837,000
2,535,000
24 172.350 $53,808,000 115 422 onn
Sales at
New York Slack
Exchange.
Stocks—No. of shares_
Bonds.
Government bonds_ __
State & foreign bonds_
Railroad & misc. bonds
Total
$3,476,000
10,208,000
12,091,000
9,289,000
10,178,000
8,656,000
Wee* Ended June 23.
1933.
United
States
Bonds.
$479,000
511,000
849,000
986,000
1,118,000
962,000
Total
Bond
Sales.
$5,566,000
13,880,000
15,830,000
12,663,000
14,133,000
12,153,000
14 005 Ann 17,1 one nnn
Jan. 1 to AM 23.
1932.
1933.
3,077,767
315,217,744
173,464,286
$4,905,000 $19,538,700
15,422,000 14,728,000
53,898,000 22,535,000
$252,548,300
370,869,500
998,506,900
$383,687,100
373,123,000
730,094,300
24,172,350
1932.
$74,225,000 $56,801,700 $1,621,924,700 $1,486,904,400
DAILY TRANSACTIONS AT THE BOSTON, PHILADELPHIA AND
BALTIMORE EXCHANGES.
Philadelphia.
Boston.
Week Ended
June 23 1033.
Baltimore.
Shares. Bond Sates. Shares. Bond Sales. Shares. Bond Sales
26,240
b9,728
84.751
48,516
48,453
6,180
$2,050
4,000
3,000
35,500
4,000
6,000
20,100
61,387
65,578
36,310
51,151
8,040
$100
11,000
2,000
4,000
1,000
572
4,748
4,287
1,883
2,007
2,626
$1,300
6,300
16,000
21,100
3,000
5.000
k. Total
283,868
$54,050
242,566
$18,100
16,123
852,600
Prey. week revised
470,307
$29,000
431,953
$15,700
23,335
$35,500
Saturday
Monday
Tuesday
Wednesday
Thursday
Friday
ENGLISH FINANCIAL MARKET-PER CABLE.
The daily closing quotations for securities, &c., at London,
as reported by cable, have been as follows the past week:
Thurs.,
Wed.,
Tues.,
Sat.,
Mon.,
June 17. June 19. June 20. June 21. June 22.
Silver, per oz__ 19 1-16d. 19 3-16d. 19 3-16d. 19 1-16d. 19d.
1228.1d. 122s.3d.
Gold, p.fine oz. 1228.135d. 1228.2d. 122s.ld
73t2
73h'
72E5
72%
73%
Consols, 2E5%
332%British
99
98%
981
99h
W.L
99)'t
British 4%110h
11019
110%
1960-90
1101.5
110%
French Rentes
69.20
69.00
68.60
68.50
(in Parls)3% fr. Holiday.
French War L'n
(in Parts) 5%
108.60
108.90
108.70
108.10
Holiday.
1920 amort
Fri.,
June 23.
183.5d.
1228.2d.
73%
99
1103
69.00
108.40
The price of silver in New York on the same days has been:
Silver in N. Y.,
per oz. (cm)
35
36
36
35
3514
34%
PRICES ON PARIS BOURSE.
Quotations of representative stocks on the Paris Bourse
as received by cable each day of the past week have been
as follows:
June 17 June 19 June 20 June 21 June 22 June 23
1933.
1933.
1933.
1933.
1933.
1933
Francs. Francs. Francs. Francs. Francs. Francs
12,300
12,100
12,200
12,200
12,200
of
Bank
France
1,630
1.640
1,620
1,680
1,640
Banque de Paris et Pays Ilea355
360
353
355
Banque d'Union Parisienne
343
346
350
340
334
Canadian Pacific
18,515 18,675 18,625 18,825
Canal de Suez
2,570
2,595
2,575
2,555
Cle Distr d'Electricitle
2,250 1,676
2,230
2,190
2,270
Cie Generale d'Electricitie
53
53
54
53
Cie Generale Transatlantique544
545
538
540
Citroen B
1:146
1,130
1,130
1,130
1,120
ComPtoir Nationale d'EscOmpte
280
270
270
270
280
Cot, Inc
348
342
339
343
Courrieres
805
818
812
808
Credit Commercial de Franoe
4,850
4:866
4,870
4,860 4,870
Credit Fonder de France
2,240
2,240
2,250
2,210
2,230
Credit Lyonnais
2,630
2,550
2,510
2,590
2,580
Distribution d'Electricitie la Par
2,820
2,840
2,880
2,850
2,900
Eaus Lyonnais
754
730
750
Energle Electrique du Nord. ___
1,012
1,018
1,014
1,010
Energie Electrique du Littoral-52
2
63
53
53
52
French Line
89
89
90
90
89
Galeriee Lafayette
HOLI1,080
1,060
1,090
1,070
1,100
Gas le Bon
DAY
620
620
610
630
Kuhlmann
820
810
830
810
830
L'Ait Liquide
931
945
927
935
Lyon (P. L M.)
340
350
340
350
-356
Mines de Courrieres
430
440
400
440
440
Mines des Lens
1,350
1,350
1,350
1,350
1,350
Nord Ity
871
875
875
875
Orleans Ry
1,010
1,010
1,010 1,010
1,040
Paris, France
94
91
91
92
Pathe Capital
1,140
1,160
1,210
1,150
1,i66
Pechiney
69.00
68.50 68.60
69.20
69.00
Bean 3%
108.10 108.70 108.60 108.90 108.40
Reines 5% 1920
79.90
79.70
79.80
80.10
79.50
Rentes 4% 1917
85.00 85.20 85.30
85.70 85.70
Rentes 412% 1932 A
1,740
1,710
1,750
1,790
1,810
Royal Dutch
1,345
1,350
1,358
1,370
Saint Gobain C & C
11,800 11,518 11,457 11,487
Schneider & Cl;
550
540
540
540
-L&3
Societe Andre Citroen
76
76
77
77
76
Societe Fiancaise Ford
136
134
135
133
134
Societe Generale Fonder°
2,845
2,835
2,840
2,865
Societe Lyonnalse
579
581
575
579
Societe Mareellabse
18,500 18.500 18,500 18,500 18,900
Suez
185
181
188
186
Tubize Artificial Silk prof
900
910
910
890
Union d'Electricitie
-910
190
190
180
190
Union des Mines_
180
77
77
77
76
Wagon-Ufa
THE BERLIN STOCK EXCHANGE.
Closing prices of representative stocks as received by
cable each day of the past week have been as follows:
June June June June June
17.
19.
21.
20.
22.
Per Cent of Par
139
141
142
143
145
Reicbsbank (12%)
91
91
91
91
91
Berliner Handele-Gesellachaft (5%)
51
51
51
51
51
Commers-und Privet Bank &. CI
59
58
60
58
Deutsche Bank und Diaconto-Gesellschaft__ 58
47
47
47
47
47
Dresdner Bank
99
99
99
99
Deutsche Reichsbabn(Ger Rye) prof(7%)-- 99
25
24
24
24
Allgemeine Elektraltaets-Gesell(A E 0)___ 24
116
114
116
116
114
Berliner Kraft u Licht (10%)
115
116
115
114
114
Deesauer Gas (7%)
92
94
93
93
92
Gesfuerel(5%)
107
107
107
106
106
Hamburg Elektr-Werke (8)1%)
165
166
164
166
164
Siemens & Retake(7%)
132
131
129
131
128
I CI Farbeninduatrie(7%)
173
171
171
173
170
Salzdetfurth (7) %)
209
210
207
211
208
Rbeinische Braunkohle(10%)
115
116
116
115
114
Deutsche Erdoel(4%)
64
64
65
66
63
Mannesmann Roehren
17
17
17
17
17
HaPart
18
18
18
17
18
Lloyd
Norddeutscher
June
23.
141
91
51
58
47
99
22
113
112
90
106
162
126
169
205
112
60
15
16
In the following we also give New York quotations for
Foreign unlisted dollar bonds as of June 23 1933:
4405
Financial Chronicle
Volume 136
Bid
Ask.
Bid
Hungarian Defaulted Coup 1 60
29
26
Anbalt 78 to 1946
Hungarian Hai B k 7 Ws.
32 f 71
'
Argentine 5%, 1945. $100
3212
Kohosyt 63.28, 1943
761,
pieces
14
25 Karstadt 68, 1943 C-D_ _ _
f z3
Antioquia 8%, 1940
Land M Bk, Warsaw 8s,'41 45
AustrianDefaultedCoupons 170
61,8,46
52
Pr.
Oland
Leipzig
3212
3012
Bank of Colombia. 7%,'47
Bank of Colombia. 7%.'48 3012 3212 Leipzig Trade Fair 78, 1953 24
35 Luneberg Power. Light et
32
Bavaria 6128 to 1945
4412
Water 7%, 1948
Bavarian Palatinate Cons.
22 Mannheim & Posat 713. 1941 4312
17
Cit. 7% to 1945
27
78
1945
to
Munich
2112
2312
47
634,
Bogota (Colombia)
&tunic Bit, Hessen,78 to '45 25
1 12
Bolovia 6%. 1940
20 Municipal Gas & blOc Corp
10
Buenos Aires Scrip
Recklinghausen, 78, 1947 2712
Brandenburg Elec. 68. 1953 4512 47
5012 Nassau Landbank 612s,'38 5612
Brazil Funding 5%,'31-51 49
Nat Central Savings Bk of
British Hungarian Bank
1 39
Bungs., 712s. 1962
41
I 39
812s. 1962
National Hungarian & Ind.
Brown Coal Ind. Corp.
40
7%,
1948
Mtge.
57
53
Cue. 1953
26
Call (Colombia) 7%. 1947 I 1512 17 Ober/slab Liee 7%, 1948
Oldenburg-Free State 7%
11
Callao (Peru) 714 %, 1944 17
26
1945
to
Ceara (Brazil) 8%, 1947.. !8
_ /2312
Porto Alegre 7%,
City Savings Bank, Buda(GerChurch
Protestant
36
34
pest, 75, 1953
23
many) 7a, 1946
74
Deutsche Bk 6% '32 unst'd
Prov Bk V‘,estohaiia 68,'33 /60
Dortmund /quo CBI 65,'48 30
40
6%'36
Westphalia
Prov.Bk
15
11
Duisberg 7% to 1945
25 RhineWestph aElect 7%'36 41
22
Duesseldorf 7s to 1945_
4112 Rio de Janeiro 6%, 1933_ I 26
Last Prussian Pr. 6s, 1953. 40
ROM (75th Church 8)4e,'46 46
European Mortgage & InC Church Welfare 7s. '44 3812
5612
I 55
vestment 730, 1966
M tsk 68,'47 74
Saarbruecken
110
French Govt. 512s, 1937
1 19
112 Salvador 7%. 19°7
reneh Nat. Mail SS.68. 52 108
28 Santa Catharine (Smell)
24
raukfurt 7s to 1945
11712
8%, 1947
52
Lerman All. Cable 76, 1945 49
Santander (Colom) 7s, 1948 I 1312
Lerman Building & Land1712
1947
6.
(Brazil)
Paulo
Sao
2812
2512
bank 612%, 1948
70 Saxon Public Works5%,'32 145
65
Haiti 6% 1953
68 Saxon State Mtge 8e, 1947 52
Hamb-Am Line 6123 to '40 63
81e01 & Lialske deb 6e, 2930 1250
Hanover Hare Water Wks.
36
27 Stettin Pub Hui 78. 19441
23
6%. 1957
TucumanCity 78, 1951.__ 1 2712
3412
3212
'48
78,
imp
Housing & Real
36
35 Tucuman Prov. 78, 1950
Hungarian Cent Mut 78'37 33
I 1812
yesten Elea fty 7s. 1947Hungarian Discount & Ex27
1945._
7.10
Itmlenbers
33
change Bank 78, 196_3_ 1 31
Ask.
3612
17
50
54
26
4812
4512
31
28
3212
5812
41
42
31
29
29
75
50
45
2712
48
40
76
21
19
1512
19
55
56
270
38
29
39
2012
32
I Flat price.
COURSE OF BANK CLEARINGS.
Bank clearings are at last beginning to show substantial
improvement. This is the third week in succession that
our bank clearings totals have registered a gain, when
compared with a year ago, confirming the reports of revival
in business that have been talked abou6 the past few months.
Preliminary figures compiled by us, based upon telegraphic
advices from the chief cities of the country, indicate that
for the week ended to-day (Saturday, June 24), bank
exchanges for all the cities of the United States from which
it is possible to obtain weekly returns will be 24.4% above
those for the corresponding week last year. Our preliminary total stands at $5,086,862,142, against $4,087,591,267 for the same week in 1932. At this center there is
a gain for the five days ended Friday of 41.1%. Our comparative summary for the week follows:
Clearings-Returns by Telegraph,
Week Ending June 24.
New York
Chicago
Philadelphia
Boston
Kansas City
St. Louis
San Francisco
Los Angeles
Pittsburgh
Detroit
Cleveland
Baltimore
New Orleans
1933.
1932.
Per
Cent.
$2,831,819,491 82,007,598,522
187,228,566
165,936,992
204,000,000
204,000,000
130,000,000
170,000,000
58,158,758
54,580,886
47,100,000
54,200,000
75,782,000
76,765,000
No longer will re port clearings
62,699,159
68,785,098
66,845,336
39,017,196
52,375,366
41,311,187
39,059.571
32,238,615
24,346,878
15,219,000
+49.1
-11.4
0.0
+30.8
-6.2
+15.1
+1.3
+9.7
-41.6
-21.1
-17.5
-37.5
Twelve cities,5 days
Other cities,five days
$3,753,873,465
485,178,320
$2,955,194,156
443,656,000
+27.0
+9.4
Total all cities,five days
All cities, one day
$4,239,051,785
847,810,357
$3,398,850,156
688,741,111
+24.7
+23.1
Total all cities for week
35,086,862,142
84,087,591,267
+24.4
Complete and exact details for the week covered by the
foregoing will appear in our issue of next week. We cannot
furnish them to-day, inasmuch as the week ends to-day
(Saturday) and the Saturday figures will not be available
until noon to-day. Accordingly, in the above the last
day of the week has to be in all cases estimated.
In the elaborate detailed statement, however, which we
present further below, we are able to give final and complete
results for the week previous, the week ended June 17. For
that week there is an increase of 7.7%, the aggregate of
clearings for the whole country being $5,756,633,945,
against $5,347,255,417 in the same week in 1932. Outside
of this city there is a decrease of 5.7%, the bank clearings
at this center recording a gain of 14.8%. The Boston,
St. Louis, Minneapolis and Dallas Reserve districts also
had increases but these gains were not enough to offset the
smaller totals in the other districts, which accounts for the
loss outside of New York City. We group the cities according to the Federal Reserve districts in which they are
located, and from this it appears that in the New York
Reserve District, including this city, the totals show a gain
of 14.3%,and in the Boston Reserve District of 12.8%, but in
the Philadelphia Reserve District there is a loss of 2.2%. In
Financial Chronicle
4406
the Cleveland Reserve District the totals record a diminution of 10.1%, in the Richmond Reserve District of 24.6%
and in the Atlanta Reserve District of 9.1%. The Chicago
Reserve District totals fall 17.1% behind, mainly because
of the still unsettled banking conditions in Michigan. The
St. Louis Reserve District has an increase of 5.5% and the
Minneapolis Reserve District of 2.9% due to the larger
movement of grains and the transactions that have been
taking place in the manufacture of beer. In the Kansas
City Reserve District the totals are smaller by 9.2%, and
in the San Francisco Reserve District by 6.3%; but in the
Dallas Reserve District the totals are larger by 3.2% due
chiefly to the higher price of cotton.
In the following we furnish a summary of Federal Reserve
districts:
SUMMARY OF BANK CLEARINGS.
Week Ended June 17 1933
1932.
1933.
Federal Reserve Dicta.
$
1st Boston
259,140,794
12 cities
4,097,785,981
2nd New York_ _12 -•
277,120,635
3rd Philadelphia 9 "
8th Cleveland_.. 5 "
185,269.688
Iltli Richmond.. 6 "
84,700,805
6th Atlanta_ ...I() "
77,888,937
7th Chicago
293,092,698
18 "
13th 88. Louis
97,963,230
4 "
81,866.954
9th Minneapolis 7 "
10th KansasCitY 9 "
92,447,198
Ilth Dallas. _ -. 5 "
37,276,730
12th San Fran 13 "
169,080,295
Total
110 cities
Outside N. Y. City
Canaria
5,755.633,945
1,755,194,908
22 ninny
319.534.947
$
229,723,793
3,586,193,612
283,484,845
206,028,179
112,276,892
85,646,282
357,207,5513
92,863,732
79,536,776
101,819,906
36,120,860
180,444,276
Ine.or
Dec.
1931.
1930.
S
$
%
592,217,186
464,737,660
+12.8
+14.3 6,124,695.604 9,422,062,103
-2.2
582,430,518
442,304,620
455,172,342
330,906,255
-10.1
187,257.651
146,585,739
-24.6
167,745,255
127,209,340
-9.1
935,408,108
592,721,078
-17.1
208,399,374
132,945,825
+5.5
125,937,960
102,274,130
+2.9
204,043,774
146,439,244
-9.2
61,360,398
51,018,726
+3.2
357,430,848
258.719,493
-6.3
5,347,255,419 +7.7 8,916,557,714 13,351,331,500
1,260,709,369 -5.7 2,934,997,492 4,111,544,786
224.746.418 +36.2
329.880.665
4,16.452.992
Week Ended June 17.
Clearings at1933.
Week Ended Juno 17.
Clearings at1933.
1932.
Inc. Or
Dec.
$
.
$
%
First Federal Reserve Dist net-BostonMe.-Bangor____
440,242
404,076 +9.0
Portland
1,121,613
2,007,138 -44.1
Mass.-Boston
227,510,440 195,117,885 +18.8
. Fall River
618,203
742,263 -16.7
Lowell
305,349
281,298 +8.6
New Bedford706,552
592,155 +19.3
Springfield. _._
3,047,668
3,108,359 -2.0
Worceater
1,098,212
2,694,031 -59.2
onn.-Hartfo-rd.
9,415,179
7,877,552 +19.5
•• New Haven_ _ _
3,449,267
4,542,583 -24.1
R.I.-Providence
11,063,400
11,983,000 -7.7
ICH -Manches'r
364,689
373,453 -2.4
Total(12 cities)
259,140,794
229,723,793 +12.8
1931.
$
1930.
$
686,795
2,880,619
413,245,728
1,223,880
514,906
972,553
4,801,067
2,997,147
10,089,667
6,149,987
10,683,400
491,931
588,423
3,758,014
533,000,000
1,215,300
672,151
1,074,664
5,864,250
3,624,915
16,184,636
8,737,552
16,782.500
734,781
454,737,880
592,217,180
Second Feder al Reserve D istrict-New YorkN. Y.-Albany..
5,493,033
6,703,218
9,408,002
4,787,883 +96.5
931,170
830,641
Binghamton--1,465,423
802,100 +3.8
Buffalo
42,647,814
58,487,574
25,312,459
26,509,056 -4.5
Elmira
1,100,037
581.529
669,749 -13.2
924,175
Jam66town__ _ _
860,867
345,294
556,744 -38.0
1,319,898
New York
4,001,439,037 3,486,548,050 +14.85,981.560.222 9,239,786,714
Rochester
8,703,806
12,408,061
6,311,470
6,742,993 -6.4
4,241.228
Syracuse
3,504,001
3,344,853 +4.8
6,087,984
Conn.-Stamford
3,816.755
2,843,983 -2.9
4.982,414
2,762,722
N. .L-Montclair
708,913
575,600 -17.1
800,000
477,023
Newark
37,083,950
37,030,903
17,731,313
22,790,141 -22.2
Northern N. J_
37,547,809
52,065,759
29,082,490
30,024,660 -3.1
Total(12 cities) 4,097,785,981 3,588,193,612 +14.36,124.895.6049,422,062,103
Third Philade iphia DIstric t-PhIladelP
Pa.-Altoona.
._
343,862
292,058
Bethlehem_ _
b
is
Chester
255,189
362,550
Lancaster
1,139,222
611,103
Philadelphia__ _ 268,000,000 263,000,000
Reading
1,186,964
2,443,079
Scranton
1,822,465
2,332,875
Wi1kes-Barre_ _
1,483,981
1,773,003
York
1,193,375
1,275,215
N.J.-Trenton
2,295,500
8,525,700
Total(9 cities)_
Total(5 cities).
-29.6
-46.4
+1.9
-51.4
-21.9
-17.4
-6.4
-73.1
616,123
b
813,219
2,195,987
421,000,000
2,776,159
3,805,738
3,175,892
1,540,531
3,786,000
1,602,919
b
1,001,243
1,822,418
555,000,000
3,524,996
5,175,759
3,563,709
2,159,951
4,724,000
-2.2
442,304,620
582,430,518
Reserve D IstrIct-Clev eland -.
b
b
b
b
b
b
60,348,338
40,657,748
42,914,726 -5.3
55,909,926
70,986,426 -21.2 119,260,269
7,912,000
11,633,000
7,572,500 +4.5
1,602,664
1,689,241
1,361,031 +24.1
b
b
b
79,100,773
82.876,4913 -4.3 135,087,984
b
b
71,308,715
154,407,670
17,036,400
2,244,517
b
204,163,040
277,120,635
Fourth Feder al
Ohio-Akron.....
Canton
Cincinnati
Cleveland
Columbus
Mansfield
Youngstown
Pa.-Pittsburgh _
his-15.1
283,484,845
206,028,179 -10.1
330,906,255
455,172,342
Fifth Federal Reserve Dist rict-RIchm ondW.Va.-HuntIon
97,081
427,888 -77.3
Va.-Norfolk ___ _
2,277,000
3,483,000 -34.6
Richmond
25,719,369 -2.5
25,086,928
3.C.-Charleston
719,720
743,224 -3.2
kid.-Baltimore_
42,991,737
61,780,324 -30.4
DC.-Washing'n
13,528,339
20.123,089 -32.8
630,105
3,456,971
36,648,045
1,718,995
78,521,393
25,610,230
1,186,046
4,641,448
45,555,000
2,439,082
104,398,722
29,037,353
112,276,892 -24.6
146,585,739
187,257,651
Sixth Federal Reserve Dist rict-Atiant aTenn.-Knoxville
3,245,850
2,456,449 +32.1
Nashville
9,446,117
9,446,112 +0.1
3a.-Atlanta _
29,100,000
27,800,000 +4.7
Augusta
883,082
716,026 +23.3
Macon
.507,065
507,818 -0.1
Fla.-Jacksonv'le
7,635,922
8.785,324 -13.1
tia.-Birm'g'm
10,829,801
9,274,997 +16.8
Mobile
940,306
758,124 +24.0
1f Ms.-Jackson
b
b
81,955
Vicksburg
88,535 -7.4
15,218,839
..a.-NewOrleans
24.929,971 -39.0
2,000,000
13,023,967
39,791,570
1,096,111
729,687
12,715,577
13,212,926
1,238,823
b
110,031
42,110,648
2,459,000
21,405,095
54,000.000
1,767,078
1,528,513
13,652,542
22,117,065
1,713,918
b
147,568
46,786,480
127,209,340
167,745,259
Total(0 cities).
Total(10 citie8)
185,269,688
84,700,805
77,888,937
85,646,282
-9.1
inc. or
Dec.
1932.
1931.
1930.
$
$
$
%
8
Seventh F ler al Reserve D istrict-Chi cagoMich.-Adria
b
is
is
b
Ann Arbor_
467,091
539,641 --13.4
604,843
738,864
Detroit. __ - _
73,770,838 -36.8 144.893,122 195,976,370
46,648,546
Grand Rapi
-67.4
2,819,622
918,425
4,908,826
5,431,349
Lansing____ ..._
1,131,800 -46.0
611,012
2,581.455
2,986,610
Ind.-Ft. Wa rue
1,122,498 -52.1
537,705
2,192,471
3,379,109
12,959,000 -19.6
Indianapolis
10.416,000
18,549,000
22,158,000
South Bend
956,413 -52.9
450,864
1,098,775
2,377,081
Terre Haute
3,223,554
2,995,081 +7.0
5,182,989
4,823,329
tee
11,919,090
15,890,859 -25.0
22,714,841
30,116,589
Ia.-Ced, RatMs
183,798
710,467 -74.1
2,585,751
2,795,205
Des Moines._ _
4,470,117
4,920,907 -9.2
6,268,921
8,455,768
Sioux City_ .__
2,147,836
2.310,893 -7.1
4,008,078
6,158,914
b
Waterloo_
b
b
b
Ill-Blooming on
1,041,869 -66.4
350,000
1,473,291
1,925,810
Chicago_ _ 209,911,978 229,905,155 -8.7 359,699,524 634,219,365
Decatur.- _
454,839 +8.5
493,612
814,256
1,153,337
._
Peoria
2,083,895
3,303,779 -36.9
3,117,346
5,218,859
Rockford_ _
511,232
477,628 +7.0
1,163,941
3,302,156
1,513,692 -50.6
747,943
Springfield_ .._
1,983,766
2,530,509
357,207,558 -17.1
592,721,078
935,408,108
Eighth Fed -ra I Reserve Ms trict-St. Lo ulsInd.-Evansyiilea
a
Mo.-St. Loub
65,600,000
64,800,000 +1.2
18,027,449 +16.0
KY.-Loulsvill . _.
20,908,253
Tenn.-Memphi;
11,117,977
9,381,680 +18.5
a
a
111.-Jacksonv Ile
Quincy
535.330 -37.0
337,000
a
100,500,000
25,446,876
12,054,824
a
799,888
a
149,100,000
40,307.442
17,589,630
a
1,207,427
138,945,825
208,399,374
Ninth Fede cal Reserve Din trict-Minn eapolisMinn.-Dulut t__
3,705,582
3,380,003 +9.6
4,491,777
57,167,511
53,739,863 +6.4
Minneapolis
66,321,288
St. Paul__..__
16,651,9134
17,683,365 -5.8
25,231,824
N. D.-Fargo __
1,613,494
1,725,564 -6.5
1,945,149
8.D.-Aberd 41.
624,080 -22.4
484,497
952,869
Mont.-Billings.
282,603
348,990 -19.0
525,413
1,981,303
2,034,911 -3.6
Helena
2,805,810
3309,695
84,969,909
28,597,060
2,053,223
1,054,797
549,995
3,303,281
Total(18 cit es)
Total(4 citi s).
Total(7 chi 3).
We now add our detailed statement, showing last week's
figures for each city separately for the four years:
June 24 1933
296,092,698
97,963,230
81,866,954
92,863,732
79,536,776
+5.5
+2.9
102,274,130
125,937,980
Tenth Fede ral Reserve Dis tact-Kans as City210,846 -78.6
Neb.-Fremon L.
45,028
225,970
b
b
Hastings._
b
1,878,912 -10.2
Lincoln
1,687,913
2,617,632
22,458,002 +0.3
22,530,468
Omaha
35,970,221
1,653,829
1,549.966 +6.7
Kan.-Topeka __
2,400,524
5,390,378
2,665,235
3,997,198 -33.3
Wichita
67,342,975 -11.0
Mo.-Kan, CI i:
59,953,983
42,777,110
2,510,826 +15.3
2,896,077
St. Joseph_
4,515,537
871,184 -34.4
Colo.-Col,S irs.
571,728
1,028,612
863,867 -48.7
442,937
.
_
Pueblo
1,215,361
262,132
b
3,327,382
45.030,348
3,697,025
7354,558
135,877,154
5,354,304
1,342,548
1,562,323
101,819,906
-9.2
146,439.244
204,043,774
Eleventh F de tel Reserve District-Da Ilas-Texas-Austin __
644,185
909,708 -29.2
25,620,247 +6.7
27,340,595
Dallas
Ft. Worth -.
4,945,597
5,292,570 -6.6
2,141,000 -30.2
1,493.653
Galveston_ _
2,852,700
2,157,343 +32.2
La.-Shrevepo :t:
1,209,648
36,768,888
7,237,133
2,544,000
3,259.059
1,246,967
42,740,911
0,861,832
2,990,000
4,520,688
51,018,726
61,360,398
Total(9 citi 0_
Total(5 MI 0_
92,447,198
37.276,730
36,120,868
+3.2
Twelfth Feder al Reserve D (strict-San Franc'sco25,348,079 -19.1
Wash.-Seattle__
20,513,113
34,599,814
42,064,671
4,582,000
5,589,000 -18.0
Spokane_ __- __
10,108,000
12,327,000
--270,199
Yakima
443,569 -39.1
706,123
987,461
18,356,829
19,302,181
Ore.-Portland
-4.9
31,172,068
37,463,814
Utah-S.L. Cl y,
9,158,016
9,212,462 -0.8
14,202,309
19,229,232
Calif.-L,Bead0_
3,393,330
3,185,877 +6.5
4,918,066
7,331,563
Los Angeles_ __ No longer Willlreport cleari ngs.
3,010,808
3,021,766 -0.4
Pasadena_ _ _ __
4,307,938
8,825,872
3,301,627
Sacramento.__
5,505,447 -40.0
7,679,633
6,998.476
San Diego_ _. No longer WI II report cleani ngs.
San Francis o_ 102,134,700 100,960,335 +1.2 140,162,370 210,152,134
San Jose_ -.-.
1,331,369
1,767,057 -24.7
2,218,254
2,781,697
Santa Barba a_
1,099,793
1,216,840 -9.8
1,641,818
2,164,568
Santa Moni a_
927,883
928,478 --0.1
1665,652
2,078,521
Stockton_ _ _ _
1,000,628
1,180,889 -15.3
1,669,400
2,307,300
Total(13 MI s) 169,080,295 180,444,276
Grand total (1 ll)
._ 5,756,633,945 5.347,255,419
chief)
-6.3
Outaide New Yo -k 1,755,194,908 1,860,709,389
-5.7 2,934,997,492 4,111,544,786
258,719,493
357,430,848
+7.7 8,916,557,714 13351331,500
Week Ended June 15.
Cl
1933.
CanadaMontreal
Toronto
Winnipeg
Vancouver
Ottawa
Quebec
Halifax
Hamilton
Calgary
St. John
Victoria
London
Edmonton
Regina
Brandon
Lethbridge
Saskatoon
Moose Jaw
Brantford
Fort WI Item
New Westminster
Medicine Hat_ _ Peterborough_....
Sherbrooke
Kitchener
Windsor
Prince Albert...
Moncton
Kingston
Chatham
Sarnia
Sudbury
Total(32 cities)
8
88,616,484
134,480,254
40,369,712
15,734,602
4,542,715
3,911,501
2,010,658
3,793,471
4,738,443
1,289,410
1,367,314
2,478,792
2,827,981
2,583,147
249,376
329,221
1,049,055
459,707
809,308
516,048
416,091
159,327
571,117
594,041
878,360
2,131,121
191,655
580,768
582,083
448,447
344,368
622,370
319,634,947
1932.
II
72,000,086
71,335,493
36,189,094
11,306,599
4,328,702
4,143,876
2,147,868
3,987,793
5,169,465
1,684,563
1,267,859
3,064,968
3,592.126
3,110,917
348,337
302,419
1,310,849
445,546
841,919
523,124
468,308
175,011
592,138
420,112
912,315
2,394,013
254,903
845,231
535,015
409,431
393,652
464,978
Inc.or
Dec.
%
+23.1
+88.5
+11.6
+39.2
+4.9
-5.6
-6.4
-4.9
-8.3
-23.5
+7.8
-19.1
-21.3
-17.6
-28.4
+8.9
-20.0
+3.2
-3.9
-1.4
-11.2
-9.0
-3.6
+41.4
-3.7
-11.0
-24.8
-10.0
+5.1
+9.0
-12.5
+33.8
234,746,418 +36.2
1931.
8
118,259,715
103,895,472
35,185,742
14,751,515
6,601,671
5,389,661
2,887,238
5,540,949
6,386,806
2,021,817
1,791,739
3,019,016
5,081,861
3,190,9113
397,350
459,624
1.779,965
732,053
1,045,143
659,999
606,847
240,525
822,210
745,145
1,087,010
3,500,738
329,029
818,827
692,732
453,353
561,624
944,126
329,880,665
1930.
s
149,092,057
141,877,103
56,779,888
19,196,595
8,746,956
6,942.726
3,338,902
6,586,450
10,864,262
2,980,921
2,779,250
3,949,350
6,446,618
4,658,922
525,211
648,058
2,184,284
1,828,333
1,415,111
874,392
1,120,507
368,502
971,139
914,215
1,245,569
5,921,889
505,100
1,220,341
961,541
630,815
881,987
1,348,948
446,452,992
a No clearings available. b Clearing House not functioning at present.
•Estimated.
Financial Chronicle
Volume 136
Zorn:medaland SItsceilianeonssews
Breadstuffs Figures Brought from Page 4486.-All
the statements below, regarding the movement of grainreceipts, exports, visible supply, &c., are prepared by us
from figures collected by the New York Produce Exchange.
First we give the receipts at Western lake and river ports
for the week ending last Saturday and since Aug. 1 for
each of the last three years:
Receipts at- I
Chicago
Minneapolis
Duluth
Milwaukee
Toledo
Detroit
Indianapolis
St. Louis- Peoria
Kansas City
Omaha
St. Joseph.
Wichita
Sioux City_
Buffalo
Flour.
Corn.
Wheat.
Rye.
Oats.
Barley.
bbls.196Ibs 60 lbs. bush.56 lbs. bush. bush. 32 lbs. bush.481bs. bush.581bs.
116,000 2,629,000
170.000
773,000
45,000
262,000
1,714,000
694,000 1,157,000 266,000 526,000
1,503 000
363,000 271,000
941,000
478,000
_
593,0001
163,000
16,000
6,000
40.000 285,000
157,000
45,0001
64,000
1,000
9,000
16,000
11,000
13,000
20,000
510,000
34,000
252,000
1,000
148,000
92,000
504.000
198.000
3,000
33,000
23,00
378,000
64.000
1,000
74,000
13,000 i,281,Iii
354,000
28,000
480,000
285,000
810.0001
117,000
275,000
73,000
916,000
3,000
31,000
41,000
2,000
61,0001
1,000
1,722,
308,000
305.000
Tot. wk.'33
Same wk.,'32
Same wk.,'31
324,000
323,000
359.000
8,257, II
3,184,000
4,644,000
8,101,000
1,407,000
2,532,000
3,609,000
592.000
1,209,000
728,000 1,749,000
81.111
358,000
211,000 439,000
Since Aug.11932
204,578,000 91,447,000 16,107,00049,452,000
17,491,000 315,777,
1931
18
@FedFRASER