Full text of Commercial and Financial Chronicle : June 28, 1956, Vol. 183, No. 5546, Section 1

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c.

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CD I

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I

OF MICHIGAN

\

2 1956

JUL

ESTABLISHED 1S39

In 2 Sections

Section 1

INE

New York 7, N.

Number 5546.

Volume 183

EDITORIAL

The debate

the

Prosperity and Peace

Annuities Debated

road-building program in

"

hardly fail to leave the thoughtful observer
if not actually disgusted.

Visualizing

by the'Eisenhower Ad-"
strongly suggestive of Truman's
famous Point Four pronouncement in that it ap¬
peared to be poorly thought out, if thought out at
all, and as much designed for the general politi¬
cal effect as for anything else. Suggestions for

of

even

being intelligible.

Possibly

one may

have become

more

to carry

an

provide

out

a

'giving

;
,

would cost

a

what they

Nations
i,

For

good while such matters were shrugged off
thought that the rich would be soaked

a

-

-

'

Board; of

The

is

all

the

Governors

world

and

the

nuities"

annuities"

securities

acts,

their

ards

medicine.
'

i

if

But
costs

h.

:
'

■■

:

/

energy.

'V*
v

r

.

unfortunately,
are

Walter J. Tuohy

anti-depression

mere

-

■'

.

awarness

petro

energy,-

on

Women's

may

The basic

*An

36

of the

of

Club

page

securities

and

York

the

L.

on

pages

reasons

acts

*'■

Municipal

'

!

i {

%;

Bond

State, Municipal

COPIES OF OUR

"POCKET GUIDE FOR

INVE STM E NT

TODAY'S
ARE

CORN EXCHANGE

MEMBERS NEW

15 BROAD
CABLE:

STOCK EXCHANGES

VORK ANO AMERICAN

STREET, NEW YORK 5, N.Y.

COBURNHAM

•

Bond Dept.

Dl 4-1400

Members

T. L. Watson &Co.

*

Net, Active

*

To Dealers,

Markets Maintained
Banks and Brokers

CANADIAN

New York Stock

District Bonds

American

Exchange

STREET

NEW YORK 4,

N. Y.

BRIDGEPORT

•

PERTH AMEOY

B^nk

YORK 5

,

coast

•!

McGregor-

Doniger, Inc.

'

BONDS & STOCKS
Analysis

upon

request to

At Regular Rates

CANADIAN

DIRECT WIRES TO

Pomikox Securities

MONTREAL AND TORONTO

Goodbody a
115 BROADWAY
NEW YORK

our

DEPARTMENT

£rPORATI02t

Co.

MEMBERS NEW YORK STOCK EXCHANGE

SctM&etf COMPANY




Canadian Exchanges

Chase Manhattan

Exchange

Executed On All

Teletype NY 1-2270

25 BROAD

FIRST

Commission Orders

Stock Exchange.

Stock

CANADIAN

SECURITIES
Members

York

34 offices from coast to

1832

ESTABLISHED

New

120 BROADWAY, NEW

Teletype: NY 1-708

TELETYPE NY 1-2262

-

f

County and

THE

Harris, Upham & Cs

OF NEW YORK

Company

It

State, Municipal.

REQUEST

THE FIRST NATIONAL CITY BANK

Burnham and

DEPARTMENT

NOW AVAILABLE
ON

BANK
ST.,N.Y.

INVESTOR"
BOND

ES

S EC U R I T I

Bonds and Notes

LATEST

BONDS

of

CHEMICAL

department

Public Housing Agency

%$ &

SJATE AND MUNICIPAL

and

HAnover 2-3700

30 BROAD

state

unfairly

favorable tax treatment, is contrary
to the public interest and should be

25, 26, 27 and 28.

DISTRIBUTORS

bond

and

an

•

UNDERWRITERS

Securities
telephone:

with

and

Government,

State and

;

we

Federal

and

in

'* U. S.

why

opposed, are summarized below. The so-called "variable
Continued on page 30

recent outings of the Municipal

the "Syndicats" appear

Calvert

36

C., June 13, 1956.

state

and

under

securities

which

by Mr. Tuohy before the Coal Exporters Association

address

U. S., Inc., Washington, D.

New

on

other

believe
that the sale of "variable annuities,"
without the same regulation as other

hydro

and

and

securities under the tax laws.

Gordon

PICTURES IN THIS ISSUE—Candid pics at

DEALERS

One

energy

Continued

funds

page

people.

The fact, however, is that coal energy,

that large

involved and that somehow the
Continued

for

as

Federal

(2)
"variable
annuities" - not
be
given unfairly
favorable tax advantages over other

powered the first industrial revolution, will carry the

"

- v. -

subjected to the same

requirements

building after the war years, and are
driving hard for higher living stand¬
get the impression that new sources
of energy are to power this second
revolution.
We
hear
of
atomic

banks—and that would be good

are

regulatory

an¬

"variable

such

(1)

under

required—and that was that. In
other cases, it was merely taken for granted that
the funds would be borrowed, mostly from the

"variable

so-called

unless

authorize

would

which

of

sale

securities

with the

for-the. money

its members should i oppose any

legislation

world,

are

Investment Bankers

the

of

re-

over

<

Association of America recommends that the Association

industrial

the

sweeping

,

Association, of America

bringing with it as radical a change
in the way of living as did the first.

.

,

General Counsel, Investment Bankers

which began

half ago.. Today a second

^revolution

who would have to pay for them.

or

Assistant

the industrial reva century and

powered

solution

of the Prudential Insur¬

By GORDON L. CALVERT

.

Coal

A

great deal of thought to

power package in the
black' container, is perhaps
taken a bit for granted these days.

handy

;

and 452)

sequent issues.—EDITOR.

y concentrated

much

tasks have

better.

in the research

*

great many extremely expensive
been undertaken in recent years with¬

the

today

laboratory the world* would hear with wonder of this
amazing energy source. Coal, nature's

of the need of finding

of public enterprises, so

and confidence shared by most

be. rediscovered

could

coal

If

hearing June 22 on
previously

a

451

pected, both champions and opponents of the
pending legislation voiced their opinions at the
hearing. Because of the importance of the issues
involved, the "Chronicle" is privileged to make
provision in this issue for some of the statements
made at the hearing. Others will appear in sub¬

cooperative

financial institutions in the coal industry.

•

450,

Company of America, the leading proponent
of the common stock-backed annuities. As ex¬

ships for export coal. Describes

port needs and the faith

(Nos.

ance

Western^Europe's permanent and expanding im¬

Free

way

terest. in the cost

more

a

hills

introduced at the request

the
"unprecedented partnership"—capital¬

John L. Lewis' suggestion of

out

venture to

v

of raising the huge sums required for
such undertakings. And if their awareness may
be taken as'indicative of an awakened public insome

pro¬

a

export coal market, Mr. Tuohy announces

$50 million, composed of coal, labor and rail—

ized at

find some grain of encourage¬
apparently the politicians

aware

plan to protect and

and presenting

three

passed by the Assembly which would permit New
Jersey insurance companies to sell so-called variable annuities to the public. The measures were

and

formation of

•

y'V •'

industrial revolution of atomic, petro

energy,

mote the

in the fact that

ment

hydro

.

was

financing the gigantic scheme were cavalier to
say the least, and after months of debate, the out-.
come seems still to be far short of making sense
or

Jersey Senate conducted

extraordinary demand for coal during

an

second

the

Affairs Committee of the New

Business

The

WALTER J. TUOHY*

By

President, Chesapeake and Ohio Railway
!■■'/'Is.''.
'•
;

.

weary and discouraged
The original proposal
ministration

Copy

Pros and Cons of Variable

We See It

over

Washington during recent months and the results
of it—so far as results are actually to be seen—
can

a

Coal's Vital Place in Woild

As
—

Cents

Price 40

Y., Thursday, June 28, 1956

1 NORTH LA SALLE ST.
CHICAGO

Unlisted Trading Dept.

IRA HAUPT & CO.
Members
and

New

other

York Stock Exchange

Principal Exchanges

111 Broadway,
40

Exchange Place, New York 5, N.Y.

Teletype NY 1-702-3

WHitehall 4-8161

WOrth 4-6000
Boston

N. Y. 6

Teletype NY 1-2708

Telephone:

Enterprise

1820

,e.' 11"»

2

"i

•

.,<■

(3070)

'

*

The Commercial and Financial Chronicle

j Uj

The
For Banks, Brokers,

Dealers only

,

Security I Like Best

A continuous forum in which, each

week,

different

a

Thin

»

,

Thursday, June 28, 1956

J A

,

.

Week's

Participants and

Forum

of experts

group

...

Alabama &

Their Selections

in the investment and

advisory field from ail sections of the country
participate and give their reasons for favoring a particular security.

The British Aluminium

Company Ltd.

they to be regarded,

•re

as an

McDonnell

&

Standard Oil

request

on

of

the

Exchange

Oil

Indiana

of

largest
States

tion,

is

one

in

factors

the

oil

Corporation
Established
Associate
American

cals.

1920

Exchange

WOrth 4-2300

PHILADELPHIA

SAN FRANCISCO

•

Wires

to

off

Gulf

| Specialists in

SCRIP

|

Cuba,
Lnarjes /*riiug «.on,

•

Since 1917

characteristics

of about

record

growth

compounded.

(2) The strongest marketing po¬
sition in the United

States heart¬

land.

M'C'PONNEII&PO. |
Members

New

York

American
120

Stock

p
Exchange

Stock

Exchange

p

BROADWAY, NEW YORK S

M

TEL. REctor 2-781S

0

am—bbhihi
l£

proven

rapid

The

(3)

efficient

most

manu¬

facturing plant of any large com¬
pany in the United States, prob¬
ably holding the largest percent¬
age of modern refining.
;
(4) A low cost record for find¬
ing and developing domestic oil
reserves.

produced

Standard

of

New

gives
representation in foreign produc¬
tion
and its
value is
equal to

Trading Interest in

about

American Furniture

Ys of Indiana's total market

value,

and

also

addi¬

provides

tional unconsolidated earnings.

Bassett Furniture Industries

(6)

Camp Manufacturing

Jersey

A

challenging

position in
Canadian oil production,
and a
prospect in Cuba where they hold

.

Commonwealth Natural Gas

Vj

Life Insurance Co. of Va.

of total acreage.

(7) Possibility
profit gain
in

The company

duction

from

big
petrochemicals
very

a

Pembina

has set

a

goal

day of oil

a

pro¬

Canada

Standard

has

in

1956.

into

ventured

Cuba and Jamaica in jts never
ending search for oil.
In Cuba,
Indiana can secure a Vz interest in

12,000,000
acres,
provided
that
they spend $10 million in the next
five years.
These acreage
mitments include off-shore
and

leases

land

on

throughout .the
diana

has

island

and

captive
oil.

spotted

island,

about

%

thus In¬
the total

of

off-shore
There

under

areas

is

fair

a

within

market

com¬

lands

for

With oil

legislation favorable
manufacturing built up, oil
refinery capacity is expected to
and

increase

in

the

Cuba has

years.

10-fold

an

ideal location

next

few

for the transportation of crude to
the Eastern markets of the United

States.

,..

.

Indiana

the

is

in

now

its refineries

position

a

probably
modern in the industry.

most

Standard

are

and

owns

operates 12
plants in the United States with a

to

total

in

net

centage

1957

in

39

TWX

LY

and

larger

a

subsequent

Lynchburg, Va.
LD

per¬

years.

During 1955 Indiana succeeded
in
gaining on the industry in
sales, earnings, and capital in¬

77

vestment.
be

Trading Markets

Aerovox

These results appear to
vindication of the company's

a

policies

Corp.

for

Mercast Corp.

1

ing

in

exploration

typical

stock

Precision Radiation

in

experience

recent

industry.
tends

and

of this
been

has

years

In most
sell

to

earnings

Jfreene«uiGompaTtti
37 Wall St., N. Y.

in

stability combined with growth at
a
slightly better rate than the oil

Riverside Cement B

ESTABLISHED

ventures

North America.

near

The

Oswego Falls

of

emphasizing invest¬
refining and marketing
top efficiency and concentrat¬

ment

1929

Tel. HAnover 2-4850

years

on

ratio

the stock

higher

price

lower

a

charging capacity of
655,800 barrels per day; total cata¬
lytic cracking capacity of 260,000
barrels per day, and a catalytic
reforming capacity of 49,000 bar¬
rels per day.
Indiana is the sec¬
ond largest refiner in the United

States, with only Standard of New
Jersey ranking ahead of it.
In
catalytic reforming, the fastest

behind Jersey in capacity and well
ahead of Socony, the next largest

refiner.
This, of
exceptionally low
costs

and

outlets
the

Jobbers

stations

RICHMOND, VIRGINIA
RH 83

Telephone 3-9137




&

84

re¬

If

were

2.1

a

These

barrels

of

since

growth
this

the

same

1946,
true

this

does

per

75%.

of

any

picture, for

period sales

increased

been

number

shown

not

in

outlet

This

has

to

for this
value

a

re¬

of

acquired

it is believed that

conservatively
reserves

more

upon

Birmingham, Ala.

Mobile, Ala.
Direct

wires to

branch

our

offices r

extending its

have

stated.

not

been

than

80

million

completion of their

middle

the

growing

j

APANESE

is probably the fastest

division

retail

In the

diana
the
of

of

the

midwest, Standard of In¬

exclusively

"Standard"
the

STOCKS

southern

company.

operates

sign.

breakup

As

of

under

-

remaining at practically stationary levels for three years v
now appear to be
stirring dne
to improved Japanese
economy. '
For

Call

where.its stations have become

Yamaichi

probably do one-fifth of all
this

Securities Co., Ltd.

an

integral part of the community.
They dominate the midwest area
the retail business in

efficient

The

three

new

Established
Home

Office Tokyo

Brokers

A

1897

>

70 Branches

—

Investment

Bankers

different

trade

under
names

through subsidiary companies,
each

responsible

geographical
under

For

its

location,

own

instance,

for

a

as

separate
well as

Standard

its

-

111 Broadway,N.Y.6 COrtlandt 7-5681

rapidly
t

expanding

territory.

-Utah Oil

tails

Refining Company

the

in

States

of

tion

the

of

the

United

"Utoco"

re¬

Utah

and

Nevada and the northwestern
States

sec¬

under

trademark, where

We offer to purchase

it

Bank of Nova Scotia

is actively expanding its facilities
into the state of Wash¬

Bell Telephone Co.

farther

ington and the surrounding terri¬
tory.
:
Indiana

probably - sells
more
directly to consumers
,

products
and

retailers

than

This

company.

other

any

provides

mote more
serve

as

aggressive selling and
management spear, the

a

marketing setup
has
been
re¬
organized on a decentralized basis.

Thus,

the

maximum

management
focus

on

control

point

one

amount
•

of

is

to

able

within

...

;

of Canada

Toronto Dominion Bank
RIGHTS

oil

tight,
well knit marketing organization
which is also very flexible—able
to move quickly. In order to pro¬
a

/

to subscribe to

Quotations

Capital Stock
request

on

Goodwin Harris & Co., Inc.
149 Broadway

N. Y. 6, N. Y.

WO 4-5210

Affiliated with Goodwin
Harris & Co. Members
Toronto Stock

of the

Exchange.

the

shortest time possible.
One of the company's most in¬

teresting chemical ventures is the
Hidalgo Chemical plant. If every¬
thing goes according to schedule,
this plant can produce over 5,300
barrels
a

of

gasoline and fuel oil
180 million pounds of

day and

chemical

products

Chemicals

phasized

are

and

production
ther

in

fur¬

chemical

developments and
upgrading. This setup tied in with
its other projects couM make In¬
diana

of

one

the

chemical producers
A

new

largest petro¬
in the world.

ammonia

.

is

plant

H. Hentz & Co.

year.

still

to

cur¬

near

the

capacity of 300 tons of ammonia
day. This plant is under the
supervision of Calumet Nitrogen
Products, a company controlled
55% by Indiana and 45% by Sin¬

York

New

American

Exchange

Exchange

Commodity
Chicago

and

Exchange,
of

Board

Orleans

New

Exchange

Cotton

Cotton

other

N. Y. Cotton

Inc.
Trade

Exchange

exchanges

Exchange Bldg.

NEW YORK 4, N. Y.
Chicago

Detroit

•

Miami Beach

Hollywood, Fla.

•

Pittsburgh

•

Coral Gables

•

Beverly Hills, CaL

Geneva, Switzerland
.

Amsterdam, Holland

Each-will sppoly about Vz'
hydrogen used for the pro¬

duction
their

Stock
Stock

York

New

per

of the

1856

Members

a

going to be em¬
Hidalgo's gasoline

diverted

Established

of

own

ammonia

and

.

market

shares of this end prod¬

uct.

This plant will be one of the
largest in the middle west and is

Over-the-Counter

natural result of the comna^v's

desire to upgrade all their refined
products, e.g., the hydrogen used
in a by-product from the
hydro-

forming

Quotation Services
for 42 Years

process.

Indiana

outlets.

retails

company

-

write

or

original

Trust, Indiana has the
exclusive right to use tne Stand¬
ard
name
in the
midwest area

and

information

current

result

a

the

•fter

Standard

a

accomplished

more

out

a

reported separately, but Indiana is
hopeful that they will show re¬
serves

-

N. Y.

MY 1-1557

New Orleans, La. -

zona, New Mexico and California.
Pan Am Southern Corporation op¬

represented, clair.

the

not

the

states

reserves were

barrel

a

apply

we

market

are

have

indicate

not

are

While

for

in

share, compared to the
price of around

$1

Canadian

they

retail.

have

lubricants

in

union.

by a concen¬
trated plan of
eliminating old and
non-productive stations, enlarg¬
ing
and, modernizing
existing
ones,
and
building better and

works

$60

they

System Teletype:

barrels.

at low cost and

CRAIGIE&CO.

that

of crude oil and natural
gas

current

$59.

Bell

reported

liquids at the end of 1955

over

■F. W.-

has

at

in

provide* outlets

company's
where

a

of

It is also

a

state

it

this state.

Whitine Refmerv which will ha-e

gasoline

serve

tne
and is currently

seaboard

over

every

value

MUNICIPAL BONDS

serves

retail

billion

op¬

along

rently under construction

Standard of Indiana
almost

serves

Exchange
Exchange

lubricant marketing through Ari¬

greater yield of high

30,140

Indiana

CAROLINA

manufacturing

than the stocks of most other very

higher yield basis than
international companies.

NORTH and SOUTH

a

permits

course,

value products.

other oil stocks reach temporarily,
and
for the first time in years

VIRGINIA-WEST VIRGINIA

the

refinery
industry, Indiana is just slightly

sells

Since 1932 Specialists in

of

segment

growing

yield

and

crude

large companies. During bull mar¬
kets Indiana seldom gets into the
vulnerable
position
that
many

on

Stock

Stock

HAnover 2-0700

planning to start marketing gaso¬
line in the Texas City-Galveston
area of Texas, its first entry into

sized

Cuba

which could add between 5%-7%

STRAOER, TAYLOR & CO., Inc.

York

American

,

where

of

oil is

more

from

12,000 barrels

contract.

(5) The long time investment in

Currently,

pace.

than from any other field in Can¬
of

A

approximately 3 million
Jointly with another com¬
Indiana
has interests in

being

has

year

a

and exploration and
development is continuing at a

investment.

a

eastern

state

every

and

ada.

(1)

has

in

been

following

7%

in

states

term

&

pro¬

Company subsidiary "Amoco"
erates

in

which make it attractive for long-

RIGHTS

net

Members New

19 Rector St., New York 6,

mark

pany,

Jamaica.

the

Indiana's

about 200,000 acres in the Pembina
field. Of these about 25,000 have

doing
exploratory

Indiana

Texas.

Steiner,Rouse&Co!

-

Members

particularly

acres.

cur¬

work in

1955

Co.,

•

strong position in Canada with in¬

rently

and

In

runs.

terest

the

is

in

Investors

erates under its "Pan-Am" trade¬

Coast,

and

Principal Cities

production

Segal,

—

re¬

Currently, crude production is
running about 45% of refinery

Indiana

Canada

and

CHICAGO

•

of

with about % of the

runs,

company's

41%-57%

Ltd.

Dept., Dreyfus &
New York City. (Page 24)

production

duction.

cover

country,

also

Teletype NY 1-40

BOSTON

Private

this

5

Crude

between

finery

every state in

120 Broadway, New York

States.

liquids
averaged
slightly more
275,000 barrels per day, ap¬
proximately 25% less than their
maximum efficient rate of pro¬

Its oper¬

ations

V.

Co.,

Service

in the

oil

than

o

petrochemi¬

Member

Stock

Is

a

.

Petroleum

British

is the sixth larg¬

duction of crude and natural gas

refining,
etimg,

mark
and

pro¬
Leonard

varies

industry, en¬
gaging in ail phases of production,
transporta¬

New York Hanseatic

drilling

producer of crude

United

Company (Indiana)

Standard

United

est

Bought—Sold—Quoted

Co., New York City. (Page 2)

Canadian

company

Louisiana Securities

(Indiana)

Arlington, Jr., Se¬
Analyst, McDonnell &

curity

>

The

Company

—Charles F.

to

gram.

Co., New York City

Members N. Y. Stock

are

present

Security Analyst
BOUGHT—SOLD—QUOTED

intended

not

be, nor
offer to sell the securities discussed.)

CHARLES F. ARLINGTON, Jr.

Analysis

Oil

Standard

(The articles contained in this forum

name.

American

Oil

announced that they
purchased an interest in a
hydrocarbon
oxidation
process

have

which is brand

will/result in

new.

more

Th;s process

efficient

lower cost production of

terials

used

in

raw

synthetic

National Quotation Burean
Incorporated

and

Established 1913

ma¬

fibers.

46 Front Street
CHICAGO

Continued

on

page

24

New York
BAN

4, N.Y.

FRANCISCO

Volume 183

Number 5546

The Commercial and Financial Chronicle

...

(3071)

r

The Stock Market Outlook

INDEX
Articles and News

And the Psychological Factor

Coal's Vital Place in World

Prominent dealer believes psychological situation
today favors

Role of American Business in
Aiding
—John J. McCloy

higher stock prices; sees continuation of
Republican Administration increasing equity values and a
Democratic victory making equities preferable to
cash; and
regardless of returns, states "anything other than a full em-,

r

Railroad Financing:

stock-ownership and likelihood
of technical situation
becoming weaker as the market goes
higher; (3) advisability of including psychological possibilities
in business
forecasting; and (4) relationship of bearish stock
market to bullish purchasing
power. Lists investment issues
offering most current attraction.

what

portion to have

in cash divides itself into the

isideration
six

con-

of

off

into

or

Thus, before

up.

actively

bearish

of

the

What will to¬

the purchasing power of the dol¬

morrow

bring

forth?

And

what
will

lars

the

on

stocks

money?
most

tant

G.

M.

S.

A.

is who

be nominated and who will
be elected President of the United

' ■""/•,-

increase

sound

a

But

should

climate.

Will

his

health

into

a

then

continue to make equities prefer¬
able to cash.

we

not

can

Who will be the Republican can¬
didate
for
Vice-President?
If

think its influences would be off¬

Eisenhower's

the

gives
then

Democrats

their

nominees

chance,

a

im¬

Effect of Either Republican or
Democratic

Neither

else
I

can

am

you

better

off

if

And

nor

is

the

anyone

that

Democrat

a

Ad¬

ministration

be
elected, it
automatically
follow

stocks

will

down

go

down.

basic

sell

not

stocks

without

sell

you

stocks

procedure.

you

You

can

longer

can

you

been reduced.

reverse

and

the
do

address

♦An
Annual

sity
26,

by

of

Mr.

Loeb

"Economics

Symposium

Vermont,

before the
Forma¬
Univer¬

of
Capital
sponsored by

New

York

is

City,

the 40th Annual Convention of the Investment Deal¬
ers' Association of Canada at the
St.

Andrews

cludes the

Long-Range Planning for Canadian Oil—W. M. V. Ash__

of

The in¬

one.

industries

We have

of

seen

has

pros¬

existing

each

particu¬

as

other

spending habits

weakness in

a

some

few

con¬

a

apparent

important di¬

—J. E. Nickson_

If
one

cycles
people
year

self-cor¬

are

buy too

many

they buy less in

If they overborr'ow they

stop until their budgets
balance.

June

Continued

are

again

weak

Today's

spots

Hear! Hear!

page

Boston

Stock

•




Chicago

Schenectady

•

•

Glens Falls

Four Corners Uranium

49

May Business Failures Up 22% From Last Year_______

49

Guaranty

Trust

Charta"

and

*Circular

Co.

"Survey" Discusses Labor's "Magna
Wage-Price Spiral—.

See

and

It

(Editorial).

Insurance

Man's

Stocks

_L

Oil Deal Lessons"—

8

41

Wires

to

Philadelphia * Chicago • Los Angeles

20
50
30
17

—

18

May

Murphy Corp.*

,

5

.__

24

_.

Our Reporter's Report

Sulphur

21

Railroad Securities

Gulf

49

37

Securities

Now

in

Registration

Salesman's

Securities

The Market

.

.

.

47

Corner——

and You—By

and
Twice

Wallace Streete—

Revlon*

16
2

4

________

You

General Capsule*

52

Weekly

1

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

X.

C.

Eng¬

COMMERCIAL and

FINANCIAL

B.

DANA

COMPANY, Publishers

Park Place, New York
2-9570

to

^Prospectus

Copyright 1956 bv William B. Dana
Company

CHRONICLE

Reentered

Reg. U. S. Patent Office

WILLIAM

25,

1942,

matter

aecona-class

as

at

the

post

office

at

Subscription

DANA

SEIBERT, President

28,

1956

Thursday (general news and ad¬
vertising issue) and every Monday (com¬
plete statistical issue —market quotation
records, corporation news, bank clearings,
state and city news, etc.).

Rates

Subscriptions In United States, U.
Possessions, Territories
and
Members

In

Dominion

Canada,

Other

135 South La 8alle St.,
(Telephone STate 3-0613)?

Offices:

3,

Hi.

W!! V. FRANKEL & CO.
INCORPORATED

of

Union,

Other

of

Countries,

Bank

$40.00

and

the

rate

of

year;

per

$63.00

per

WHitehall

Record — Monthly,
(Foreign postage extra.)
of

exchange,

the

fluctuations

remittances

for

In

for¬

eign subscriptions And advertisements must
be

maat

in

New

Xorx

tuna*.

BROADWAY, NEW YORK 6
3-3960

Teletype NY 1-4040 & 4041

Publications

account

39

year.

Quotation

per^year.

Note—On

$60.00

8.

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Other

Every

Worcester

request

New

York, N. Y., under the Act of March 8,1879.

9576

on

Febru¬

7, N. Y.

SEIBERT, Editor & Publisher

Thursday, June

Chicago

Sulphur

19

—.—

The Security I Like Best.

Washington

Pan American

42

_____

Prospective Security Offerings

Pan-American

If

inc.

Exchange PI., N. Y.

17

__

Bargeron

—

on

40

Direct

8
__.

Funds

Reporter

p

Teletype NY 1-1825 & 1-4844

11

Notes

Mackie,

35

Indications of Current Business Activity

NSTA

.

HA 2-0270

Dealer-Broker Investment Recommendations

Mutual

&

Cover

____

Bookshelf

"Trinidad

Request

Singer, Bean

51

H

From Washington Ahead of the News—Carlisle

on

l

51

Coming Events in the Investment Field

Einzig:

•

.

Leveling Off of Boom Reported by Purchasingf Agents

HERBERT D.

Exchange

TELETYPE N. Y.

•

Sabre-Pinon Uranium
20

May Building Permits at Record High Level

ST., NEW YORK 4, N. Y.

TELEPHONE HAnover 2-4300

Nashville

15

ary

Spencer Trask & Co.
•

Stancan Uranium*

(Boxed)

The State of Trade and Industry
on

PREFERRED STOCKS

Members New York

Pacific Uranium

9

Donald C. Marsden Doubts Possibility of Anxiety-Free Market

REctor

Albany

Lisbon Uranium
'

Public Utility Securities

rections.
Economic

Teletype NY 1-4643

7

Governments

despite

'

6

Canadian Telecommunications: Today and Tomorrow
—T. W. Eadie

Our

in

Broadway, New York 4

DIgby 4-4970

5

likely

in

42

4

Coyne

Wilfred

cars

J. F. Reilly & Co., Inc.

3

,

Energy Program in Canada—W. J. Bennett—

Central and Investment Banking in Canada—J. E.

25

BROAD

on

Hughes

The Atomic

WILLIAM

25

following? articles

—John R.

;

The

specialized in

Algonquin Hotel,
Brunswick, and in¬
the pages indicated:

New

Significant Canadian Economic Developments

Published

have

by-the-Sea,

Observations—A.

1956.

For many years we

today's "Chronicle" is devoted to

News About Banks and Bankers

recting.

HELICOPTER

16

RIDDLE AIRLINES

not

depression

and

the next.

tion"

DOMAN
15

tinuation of divergent trends with
no
broad
all
inclusive
decline

And when

TEXOTA OIL

14

Cobleigh

SECTION TWO of

Business

situation

unfavorable

terdependence
perity

Con¬

Unwarranted Attacks Upon Uranium—Maurice
Barnett, Jr.__

Bank

all inclusive favor¬

an

changed. The outlook is for

buying

not

Self-

stay

When you buy stocks

spend money to do it.

Cycles Are

economic

or

Business

General

Regular Features

Correcting

any

<

infla¬

run

larly since 1946

yet generally overlooked. One
money.

long

alongside

obvious—

—Ira U.

As We

The

13

Crossroads

Sheraton Corporation of America: 20,000 Rooms Over the Fee

support.

a

that

and

is

reason

need

shorter

does

>

The

weeks

as

Economic

able

benefit.

scales, and

wage

is

country as a
off, its equity

time, in what I
consider the unfortu¬

event

tion

MATERIALS

14

Mortgage Lending and
ditions—Clarence G. Michalis

>

STRATEGIC

12

Appraisal (Letter to Editor)—

political

the

work

will

same

personally

,not

I

factor, regardless
election, is more predict¬
Anything other than a full
employment
policy
is political
of

the

better

the

nation

Republican

a

if

markets should

nate

I

these

think

to

elected.

At

way,

by other factors.

The

rising

questions.
Republican and therefore

a

whole

Either

suicide. And full employment plus

Victory

nor

answer

inclined
be

situation.

able.

portant.

:

set

health

become

Armstrong.

Murray

for

4-6551

LITHIUM CORP.

deterioration in the

or

*

NEW YORK

12

clearly foresee is im¬

provement

foreign

Roger F.
Outlook

that

news

election if he runs and
through his term if he is elected?

President

E.

Keeping Canada's Air Transport in Forefront

A second item in the

spree!

unex¬

power,

inflationary influences could well

hold

Jthrough

Administration

come

junk
a

WALL STREET,

11

Purchasing to Achieve Cost Economies
Stringfellow__'
1

in"

favorable'

Will President Eisenhower

again?

your,

(

on a

pectedly

the U.

will

run

in.

Democratic

Loeb

impor¬

States.

for

^.

business

The
in

receive

on

equity values based

and

news

will
.

result

relative values
of

actively bullish

'From my obviously biased Re¬
publican point of view, I think a-.
Republican Administration would'

now

unknown

have

be

you

shares.

effect

the

time

same

on

"

the

at

must

go

Telephone: WHitehall

you

on

stock

you

we.

10

__

^

Life Insurance Investments and the
Mortgage Market
—James J. 0'Leary__

predictable is
the
news:

market

are

your

Obsolete Securities Dept.
99

View—Sidney B. Lurie___

Role of the Regional Exchange—J. Sinclair

*

them may go down
expected—or may surprise
and go up. The value of the

down

£

6

9

—George

you

become

Then

The "New Look" in

kind

some

so

us

10

The Business Outlook for 1956 and
IJeypnd
v
—Leon H. Keyserling_'_

fore you sold

go

least

5

,__

1957-1966—W. Arthur Grotz_______'_____

A Bullish Stock Market

money you received will likewise

tors.
The

step

Sell

-

A Bearish Stock Market View—John.
Westcott.i

riskless state of suspended anima-.
tion.
The stocks you owned be¬

you

fluencing fac¬
•i

not

And

4

Investment Policy Implications While at the

as

major in¬

the Free World

Making Money in Stocks—Roger W. Babson____

-

stock market due to broadened

and

BASES LOADED?

Electronic Industry's Investment Outlook

—Edgar N. Greenebaum, Jr._

ployment policy is political suicide", and, together with rising
wages and shorter hours, requires long-run inflation as a sup-"'
port. Mr. Loeb discusses: (1) ability of business cycles to
become self-correcting; (2) weak technical
position in the

stocks

Prosperity

_

investors and

The decision of what portion of
one's investment funds to have in

1Page

<

_

Author "Battle for Investment Survival"

-

Peace and

—Walter J. Tuohy
__Cover
Pros and Cons of Variable Annuities
Debated at New Jersey11
Senate Committee Hearing
Cover
The Stock Market Outlook and the
Psychological Factor
(
—Gerald M. Loeb_
3

By GERALD M. LOEB*

Partner, E. F. Hutton & Company

more

3

-

Direct

PHILADELPHIA

Wires to

DENYER

SALT LAKE CITY

,

,ml

"4

w

f

The Commercial and Financial Chronicle

?

4

Thursday, June 28, 1956

...

(3072)

of anything v^e
It may. ,be. that.there is
not much else in Russia save poli¬
ticians and scientists, since that it

the

Role of American Business

%

i

* t

t

» »

•

McCIoy appraises current broad developments and un¬
solved international political and economic problems bearing,

Mr.

,

anotheJ-

perioa

relations

practices that govern our
i

uie rest
world,

I

1

of

I

T he continuing revolution

the

tech-

the

in

nique of warfare, the new

(. leadership and
tactics

me

or

the
great shifts of
Soviets,

d

power, a n

rn a n

and

of

rise

the

new

y

uncom-

mitted nations
J.

John

all make it so.

McCIoy

Our

govern-

emphasized, and events

ment has

proclaim, that we are at another
turning point in international affairs and our public policies are
weighed

being

is

It

anew.

measured

and

no

and

fitting

less

fashioned—all have something to

really probe the subject.

would make our nation a decisive

thought about this Conferthe role of American
business in the world abroad, I

'actor in any balance sheet of
world affairs.

As I

and

ence

could

not

with the vast physical
changes that have occurred in recent
years
in the environment
within which we now operate. It
startles

me,

for example, to

contemplate

the

tremendous

ad-

communications and the extent to which the
vance

the

in

of

art

world has thereby been

foreshortened. A short while ago I visited
the research laboratory of one of
communication

greatest
and

terns
rr~

devices

the

jj

..

.

.

.

our

of

Facts

Soviet

help but be impressed

again

still

.

of

..

u

Sovlet

Union. _This school

considerably

over

100,000

been

Business

land

1956.

and

up-to-date

release on

the

plate, declares "The Iron Age."

Net

$71,800,000 in April, $74,150,000 in
$54,600,000 in January.

new

orders

„

totaled $86,050,000, bringing the net
for the first five months of 1956 up to $445,700,000 as

new

orders in May

compared to $295,250,000 for

the same period of 1955.

In

Bright, notes

t

woefully

Yet in spite of great needs,

atmosphere of extreme na¬
tionalism in which these countries
sprung

Currently,

a year

United

Division's announced

the industry's 1956 vehicle building is
1955. Through last week, assemblies since
3,668,782 cars and trucks compared with

ago.

States

1955's output of

May and Ford

added,

it

lagging 23% behind
Jan.
1
approximate
4,748,758

since

plants

Midwestern

car

manufacture alone, at 3,091,877,

is behind

4,127,276 units by 25%. Truck production for Jan.
Continued

on

page

38

ob¬

breeds

life

to

corporation has rehired 7,300 workers

Motors' statement that the

production boost for July.

in their devel¬

N

above the pre¬
best yield since late April.
during the week, said "Ward's," were General

at

Living standards are low
such
countries;
capital and
are

"Ward's Automotive

scheduling at 21,973 units, rose 6.2%

Truck

in¬

opment.

skills

week output climbed 5.3%,

ceding week with Chevrolet sighting its

the

and

trade

last

industry

automotive

the

topping the 3,000,000-unit mark for the year,
Reports," stated on Friday last.

or

stacles which tend to inhibit out¬

UNDERWRITERS

private investment. There is one
final trend in the background that

assistance, particularly from

side

BROKERS

I would mention—and

DISTRIBUTORS

the

growth in the role of govern¬

ment

in

world

PRIVATE LEASED WIRE SYSTEM

economic

matters

countries,

newer

Co.

ment often acts

Members-

San Francisco Stock Exchange

lot Anqelet Stock Exchange • Midwest Stock Exchange • American
Honolulu Stock Exchange • Chicago Board
and other

;<

do

Stork Exchange

radiotelegraph circuit to Honolulu

HONOLULU

•

AND

OTHER

PACIFIC

COAST

we

always

Bound Set of "CHRONICLES"

on

This has

From

1895 to

1939 Inclusive

as

where govern¬
the arbiter and

we

in

a

man¬

the

West

sympathize.

But

Approximately 130 Volumes in all.
Available in New York City
Offered subject to

prior sale

—

Write

or

must recognize that these

century

ment

LOS ANGELES • NEW YORK • CHICAGO • BOSTON •
•

'•

governments are trying to crowd

leading commodity exchanges

a

Private leased

not

then

of Trade

which

with

ner
New York Stock Exchange •

bear

of enterprise in

manager
■

that

affairs.

"FOR SALE'7
——————

been carried to its extreme in the

Dean Witter
&

here it ap¬

plies to both the under-developed
countries and to ourselves; that is

DEALERS




type only, during May con¬

a

March, $64,600,000 in February and

and

INVESTMENT SERVICE

•

on

750,000 compare favorably with

the

PORTLAND

tool shipments, cutting

slight but steady upturn, the National Machine Tool
Builders' Association, currently reports. Total shipments of $76,-

tinued

and

toward

for

gent need for help

have

gas, and freight car building, especially, since
depend on hard-to-get structural, pipe and

industries

these

Today they have an ur¬

technical

SAN FRANCISCO

proximity of the July 4 holiday.
If there is a strike, all metalworking would be hit, but con¬

struction, oil and

hold

traditionally

looked

States

vestment.

Complete

a

agreement with

These are lands

not

have

scarce.

7 '-V"
long time

compromise, either a 3-year contract or a 5-year
a 3-year reopening clause.
As a face-saving gesture toward labor, the steel companies
may set the first-year cost of the "package" at around 20c an
hour as compared with the initial offer of 17%c an hour.
Meanwhile, whether there is a strike or not, steel production
will suffer. If negotiations go down to the wire, production loss
this week will approximate a half million tons. And there would
be another half-million-ton loss next week, maybe more, due to

hope for is

friends.

our

Indonesia,

Vietnam,

primarily

in

••%7\7'7

Steel negotiators proposed a 5-year agreement and told
the union, "This is it." Even'with threat of a strike on their hands,
steel firms held fast. It looks as though the best steel labor can

strength and

the Gold Coast, Nigeria,

perhaps others.

equipment,

pretty slim, states

are

'7 i'

length of contract has been a

on

coming.

play their independent roles in
world affairs — India, Pakistan,

United

the industry

-'777v-7;7'*7

showdown

The

to

which

threatening ges'ures, it may
in protest, but its chances of forcing

another one-year contract on
this trade paper.

the under-developed
areas
of the world.
Great new
countries have emerged, full scale,

soon

Wednesday last.

of

many

Burma,

By taking the offensive from the start,

shut down the industry

Machine

are

steel company strategists have

years,

Steel labor will growl and make
even

imports

Strong nationalism has taken
in

with

vard

who

nations

$10,000.

industry negotiators are in position to get something they need
badly—and that is stability over a period of years, according to
"The Iron Age," national metalworking weekly, in its current

political and economic, pro¬
developments
have
also
occurring elsewhere among

both

in

time

first

the

For

outmaneuvered steel labor.

needs of the
United States have been growing,

NaationarSBus^neSsr'conCfereLe? Har! branches scattered throughout the
16,

incomes

these

while

Even

of ad_

26th

School, June

our

under

000 went to families with incomes above

standard of living.

vanced. learning has an enrollment

..

our

Approximately $84,000,000,000 went to families with in¬
$5,000; another $129,000,000,000 went to families with
between $5,000 and $10,000 and the remaining $75,000,000,-

1955.

comes

—

found

But h£<rdly letss 'mportant m
shaPln/ our position has been the
rlse ot another
P^er - a
P°wer which, with its allies, con.tr0's one-fourth of the earth s
'and surface, one-third of its PeoP'e, and has gained command of
,the techniques of modern inostry and warfare. Only a fortnight ago I was told by a prominent European of a recent visit to
the Academy of Science in the

fu.

Strength

,

sys-

the

in

other materials if we

maintain

to

are

double

family income in 1955 amounted to $4,980,
in 1954 and $4,380 in 1947.
family income before taxes amounted to $288,000,000,000

Total

of the hydrogen bomb,
by missiles that-

least

Before-tax family income averaged $4,870

Average after-tax

consuming them. Suffice it to say
that in the next two decades we
at

which stated

compared with $4,850

not
United States—can stand"

must

monthly publi¬

in 1947.

to be carried

of these and

a

average

dip from 1953 to 1954.

ture there forecast and planned
even the
seemed out of this world. Thought alone. We need the help of allies
in an infinite variety of forms can
and friends—of the 310 millions
be transmitted in a flash. In about in Western Europe, the 190 mil¬
two years we shall be able to lions in Latin America and Can¬
travel to Europe in something like
ada, and of as many of the 850
four hours—about the same time
millions in Free Asia as will work
it now takes to journey by train
with .us.
And quite as clearly,
from New York to Boston. It is
they desperately, need our good
little wonder then that, with the
will and strength.
globe grown so small, political
power and influence have tended Growing Raw Material Shortage,
to
become polarized
around a
Today these political and mili¬
relatively few units. Whether we
tary necessities are facts of life for
like it or not, our own country
every business man. Standing be- 1
has become one of these—indeed, side
them, moreover, is a corollary
perhaps the first arnong them. To¬
development that is more strictly
day the United States holds reeconomic in character. I refer to
sponsibilities for leadership of a
the growing shortage of certain
political,
economic
and moral
key raw materials in the United
character that are unmatched in
States,
and
our
need to look
all history,
abroad for an increasing supply of
I do not need to go into great them. You are all familiar with
detail as to why we find ourselves the statistical position on such
in this position. The weight of our items as iron ore, petroleum, cop¬
^resources," the state of our tecn- per and other metal ores, and the
nical arts, the institutions we have prodigious rate at which we are

important that the business com- do with it. But no matter what
munity should take similar action the reasons, the fact is that today
with regard to its activities in the the United States accounts for no
international sphere, and I hope less than 40% of the world's inthat
these
meetings
today will dustrial
output.
This in itself

"Survey of Current Business,"

before-tax family income reached a record high of
$5,520 last year. This was a 3% increase over 1954 and resumed
the postwar rise in average family personal income after a slight
that

plate its implications in terms of
our
national safety and security.

continents, no nation

year ago.

a

An item of interest was gleaned this week from a report in

cation of the United States Department of Commerce,

a
picture is an unnatural
entirely out of focus with the
times.
And of course it becomes
all the more so when we contem¬

soon

r

the June issue of

Soviet

Such

In this day

above that of

week was 8%
.

to

out

span

passing through
whic.* cails xor
re-examination of the policies and
are

characterized the output of the electric
steel, lumber and coal industries in the period ended on
Wednesday of last week. '
-7 .'V ..
' V/".'. 7 - " 'V ." ';777- ; ; \7"
The employment situation showed a fractional decrease in
claims for unemployment insurance benefits, but the level for the

one,

enterprise here.
We

reaches

Industry

Moderate^'increases

dominate
work and life of other .lands.

the

Production

power,

this, it indeed

smaller each day, while the

Index

Price

Business Failures

J

standing alone in its own corner,
with lesser interests and growing
Union

Commodity Price Index
Auto

impossible to ; visualize
America as an isolated economy,

increasing; (3) imports, at the exist- *
than a third by 1965; (4) problem
of Soviet international competition; and (5) need to courage¬
ously, but realistically, organize $1 to $2 billion additional
private and public, annual program for underdeveloped areas
to assure reasonable, steady progress.
Credits private, dy¬
namic U. S. business for making an indispensable contribution
to the growth and welfare of the developed and underdeveloped
Free World, an activity now "tinged with a national interest
as
never
before," as well as to the continued health of

Trade

Food

and

,

Carloadings

>

Retail

State of Trade

becomes

(2) foreign competition

Production

Electric Output

and

In the face 01 ail

:

ing rate, may rise more

exacting

.

^

guiding observations: (1) need to double critical imports and
other materials to maintain our strength and living standards;

«'!

ap¬

gressive power but quite explicit¬
ly continues to be guided by prin¬
ciples that are the antithesis of all
that we ourselves cherish.

responsibilities and opportunities confronting
American business in its foreign. operations, and . offers these
the

both

on

Steel

The

impressive and
cannot be laughed off, particularly
when one contemplates that the
Soviet Union is not only an ag¬
sobering

are

Manhattan Bank

Directors, the Chase

Chairman, Board of

fr

parently believe their future lies!
Yet the facts of Soviet strength

J. McCLOY*

By JOHN

leaders

Soviet

the

where

is

Aiding the Free World

In

equivalent

possess.

*

CITIES

SEATTLE

into

of economic develop¬
generation, and they

a

*

are

under

great

pressure

Continued

on

from

page

22

Phone REctor 2-9570

Edwin L. Beck

c/o Chronicle, 25 Park PL N. Y. 7

Volume 183

Number 5546 ;.. The Commercial and Financial Chronicle

(3073)

In

Electronic's Investment Outlook
•

General

•

Greenebaum

'

By A. WILFRED MAY
NEW TAX-EXEMPT GUIDE

-

With the growth of tax consciousness among ever larger areas
of the moneyed
community, and the upper-bracket investor's in¬

creasing proclivity to maximize the spendable income from the
dollar

reserve

division of his portfolio, the municipal bond is

-ing constantly broader public interest. Of

elicit.

par-

.

-

.ticular and

those that do; sell to the

timely interest in this connection
-is a new conveniently arranged and sized book
."A MANUAL ON MUNICIPAL BONDS," by;
•Winthrop S. Curvin, Manager of the Municipal
Buying Department of Smith, Barney & Co.,-

X

firms

.members of the N. Y. Stock Exchange. (64 pp.,
$3.50.
Smith, Barney & Co., 14 Wall Street,

W

.New York 5, N. Y.)

With information ranging from

v -

nation

"What

of

Are

to

of the Basis Book," the book

.to the expert

"The

as

!

well as

:

the neophyte buyer of this class of securities.

The

*

in

factors

municipals

analyzing and classifying

discussed in full detail and the

are

general characteristics, such

A. Wilfred May

j XX X

classes of obli-

as

■'

types of

issues, maturities, statutory investment qualifica¬
tions, and legal opinions are succintly noted.
XX-v.X;V."X;
gors,

Maintaining

that municipal, bonds,/.perhaps

than

more

any

shows

that

commercial

banks

bought

29.5%;

private

investors

6%; corporations 5.6%; savings
XX:.Of particular interest is the attention given to the. revenue
•boud.; x X ',"X:'V";X:;X 'XXX X'.xX
.XXX:-;vX-xXX^ ^

.banks 4.5%; other investors 0.9%, and other dealers, 26.8%.

planning of the specific project, to the completion of the public
sale of

reminds

us

securities

the

how

toll

road

to

finance

project.

the

The

are

of all

>

concerns

^

or

not the whole answer to

The book ends with

,

i

E.N.

Greenebaum, Jr.

;

•

-

on-

future

.

;time of

order.

This

wb*cb

to

from

of elec¬

grouping them all
the standpoint of

securities. Furthermore, the prices

;

of

various

electronics

stocks

rose

too far and too fast in advance of

•

earnings which did not develop as
V rapidly

had

as

anticipated

been

and/or the companies in question

V

■

not as

were

capable

"Open Sesame"

i

case

If

of the Variable Annuity, the holder likewise pays

;

working years, and at retirement ; re¬
But the company's investment of the
premiums, in lieu of its restriction under the present legislation,
"is to be invested practically entirely in common stocks!1 The an-

close

are

we

to

being right,

would

setmakers

rthe premiums during his
ceives periodic payments.

especially

year,

color

if

t0

are

sets

sold.

Biff

manufactured,

FrniP

sets this year.)

industry

As

as

the hooeful

to profitable op-

either

erations,

hk

smaller
,

for

Estimated

the

in the
"Color sets

m

«

of business

out

over

,

The trend is

with'

t

g

,

the

doing

anufact urers

the"

busi

Jss

the

timeSn0 morSe

totfl available

^

Sets Per Manufacturer

than n% of the

the

js ^e

foBowing
faCturers

and

order of

manu-

the number

of sets

than

manufacturers a
The trend is
continuing and growing stronger.
with

1,1 DUj'JUU

Admiral

900,000

General Electric

800,000

known

Recently

78

Philco

750,000

set-making

675,000

absorbed

Zenith

675,000

clude

Silvertone

400,000

worth,

^380,000

200,000

that

Total First Ten
of

6,230,000

operations or were
companies in¬

by other

least

names

the sponge.

Industry 1,170,000

Total Industry

the bettersuspended

Raytheon, Capehart-FarnsStromberg Carlson, Spar-

at

Ten"

Balance

which

ton, Sentinel, Hallicrafters, Stew¬
art-Warner and Arvin.
We hear

300,000

Westinghouse

of

some

names

Motorola

Emerson

.

but will

depend on

a

of

one

It would be difficult

to find a more

striking illustration

Continued

7,400,000

the "Second

is about to throw in

on

company

stocks and

"

X

life of

the presumably fluc¬
'

man

.

^

INVESTMENT ADVICE AT THE CRADLE

:

,

.

—or

r

the

How

Really to Get Stocks to Minors

r

-

-

■

We

were

,X"

/

.

'

'

pleased to read

very

X

X

(

X

".

on

enterprises is that the
at the head of certain

21

page

fi.CHAS. W. SCRANTON & CO.
Members New York Stock

CONNECTICUT

Exchange

'

■

\

r

New Haven

SECURITIES

'

New York

—

has been

McManus

if

not

This

completely non¬
particularly
when nu-

—

JAckson

7-2669

.

by banding together, formed new

companies
; battle,

r

and

It has

Million

7.4

forth to

went

been

Sets

do

tough fight.

a

for

1956

Exchange

changed to

&

39

Walker

Teletype
NY 1-1610 & 1-4018"

Graham

top ten setmakers might
Each year we have said

address

by

Greenebaum

Mr.

Frank L. Walin

Christian H. Hoobs
'

Direct Private Wire

Societies,

Ninth

Annual

Boston,

Convention of

Mass.

• •

i

System to

our

Correspondents

in 40 Cities from Coast to Coast for

Coverage of Listed and Unlisted Markets

be¬

the
National Federation of Financial Analysts
the

Walker

Matthew A. McManus

National
♦An

%

Bfbadway, New York 6, N. Y.

Joseph V. McManus

ourselves, "This looks like the

to

Exchange

DIgby 4-3122

guesstimated what the industry as
whole might produce in the way
of television receivers, as well as

_

American Stock Exchange

Telephone

sticking our neck out
early in the year, when
after checking with TV set manu¬
facturers, component parts makers,
distributors and dealers, we have

what the

—

Midwest Stock

fairly

fore

0

V

have

Teletype NH 194




,

MEMBERS
New York Stock

engineers, either singly or

merous

achieve.

Hartford

of

was

a

REctor 2-9377

name

|

JOSEPH McMANUS & CO.

enjoyed

Ptimmy Markets

that the firm

.

scientists, and even

they may be outstanding
engineers, their * training in the
fundamentals of running a com¬
plex business has been extremely

For the last seven.years we

j:

announce

*

though

-

; i

'fi

for the short

reasons

are

We wish to
'>v.

true after World War II
r

"Times," that you have just become the proud parents of a baby

Continued

companies

existent.

■

in this morning's New York

'■i

some

or men

limited,

.

;DEAR MR. AND MRS.—

any

v

*

Following is a letter forwarded to us by a four-day mother,
a Stock Exchange member firm.
..
•.

gift, from

virtually

in

field.

'

•.

r1

new

One of the

combination of the market value of the un¬

derlying portfolio of common
tuating dividend receipts.

than

greater

or

.

June 25, 1956

...

more

three years ago.

mere

Magnavox

slightly

different setmakers com-

50

pares

they may produce this year:

^S"ENK. C, A.

total j of

-industry

of electronic companies is as great

nuitant's income will not be a fixed minimum guaranteed amount,

ten

t0D

aDDroxi-

this leaVes only 16% for

the investor. The mortality rate

or

guessti-

makes one conclusion

going

or

.

t

one wag

it:

put

.

inescapable: the big ones are getting biggei> and the Sma11 0neS

of 300,000 color

forecast the sale

0f

comparison

vious years

Hue

anH

left

nHa

an

Getting Bigger

Firms Are

A

there

business

mated production figures with pre-

-

nil

of
the

aXAfew .1 d
after t e f rst.te .

ba

more

that

evident
deal

great

a

®

con-

no

quite

comes

•

■

the

permit

Here goes 0ur neck-sticking-out market was held by the Top Ten
Js for this year. In our opinion, the as recently as two years ago. The

Sn'SleX^thelubSf is
cXful distinguish beXeen

years,,

XX' In the

recently

two

wS^

Vipn«t

thp

to come

seems

u

together

the discus¬

payments at a fixed minimum amount, which is set at the;
purchase.. The premium is paid during the holder's work¬

their

includes

tinel.

™

Xh folTo^e^- ^ ^ ^

with the proceeds, being invested by the insurance'
investor had been led to believe.
company within
the statutory legal safeguards. The annuitant
! A sadder and wiser public has
."may- receive more than the guaranteed amount, or his premiums
come to the realization that merely
may be reduced by dividends, if the company earns more than
being in- electronics is not an
'anticipated.
.>.' '•> X;-Y ■XX V-X: :x X X X X
XX1
ing

total

apologies to Ernie Gorirt and his
company, RCA, as he has just

TV

■

tronic activities,

.

the Variable Annuity seems to be in

namely

companies,

acquired labels, Sparton and Sen¬

time many are now priced so high that even

not

A True Annuity is a fixed dollar annuity, with a guarantee of

the

Manufacturing Co/ and
Pacific-Mercury Television Manu¬
facturing Corp.
The Magnavox

augment the reto buy black

may

AnnfW

difficulty* currently confronttelevision setmakers in rega d

ing

.tion for the lay public of the difference between the True Annuity
and

recognize

the label used

as

Warwick

consumers

T^fnnn maf Wsets
!
150,000 color

Attthls

the

-

X

controlled

„

.

ten

than: 150,000

•

or

"

pending Variable Annuity legislative proposals, clarifica-

name

toughest year of all to come up
with any meaningful figures." 1956
is no exception. Our best "guess-

this

setmakers and other types

of

will

you

by Sears, Roebuck & Co.
This
production comes from two-Sears-

tribute any profits to the industry

.

pro¬

actual

farfnr«Sl!Jnt

"WHAT IS A VARIABLE ANNUITY?"
sion

of

Silvertone

big

and white sets. -olor will no'

tronic issues

*

With the wide interest that has been stirred up by

Hotpoint's

being its sets will be
the parent company.

by

Most

can

chanted"

and Standard & Poor's ratings of the
over 50,000 population, several of
the larger issues of revenue bonds, and obligations of the 48 states.
A worthwhile addendum to an extremely valuable stand-by volume!

marks

the total of 6.230,000 receivers for

rpfeftf.r*!-,

interested.

be

general obligations of all cities

*

made

or going out
firm's size to its

a

Though it

erations in which the investor may

the problem posed by the tre¬

*

and links

luctance of

potential competition to

]five-page table of Moody's

*

3,400

„

ignored

they

vide

glossary of municipal bond terms, and a

a

not be
as

book

the various types of

of

than

privately and
closely-held

mendous increase in automobile ownership and the changes in the
nation's traveling habits." The volume includes a highly informa¬
tive two-page chart covering all the toll read bond issues mar¬
keted to date, with a summarization of all relevant characteristics.
v

more

out

yestment. The
•

•revenue bonds issued during the postwar period, have caught the
-imagination of investors. Nevertheless, the author explains, "toll

roads

the

■

bonds,

over,

long-term in-

„

the starting point in the

of

suitable .far

X

Its marketing course is traced from

Concludes

(June)

time

*

other insurance companies,

."private

being taken

or

even,a few of
the companies

-'14.3%;-estates, endowments,'etc, 6.4%; life insurance companies,'
-6%;

all

single

•other class of security, are bought for investment, an aualvsis by
Mr. Curvin of the distribution by his firm of new municipal issues
;

personal portables.

The

includes

manufacture of no more than one
companies engaged in the "scimiHi°n sets by the "Second Ten.
ence" of electronics are publicly
This group probably includes Sylowned, but merely the size of this timate" at this time is an industry Ya"ia» CBS, Hoffman, Packardtotal of 7.4 million sets, including Bell, DuMont, Muntz, Crosley,
figure gives a
approximately 150,000 color sets. Wells-Gardner, Olympic and Travfairly
good
If this is realized, it will bring Ler, p°t necessarily in that order.
idea
as
to
1956
some ' of
the
production within shooting Considering that there are more
distance of last year's 7.7 million
than 30 additional teleset makers
complications
in trying to
record-breaking total.
we have not mentioned,-, it-beNot

be of service

can

institutional investor

the

promotion-advertising budget.

'Mathematics of Bond Investment" to "The Use
;

public. Mr. Greenebaum estimates this

new

figure

debut in television and for at least

getting bigger and small firms smaller

are

of business

v

■&

<

expla¬

an

Municipals?"

popularly .growing

Electric

month

year's industry sales will be 7.4 million sets—close to the 7.7
million sets sold in 1955—including 150,000 color sets and

.

lifting of

any

supplementary

;the sets which G.E. plans to make
under, the Hotpoint label.
This

Associates, Chicago

Believing that certain electronic securities belong in every in¬
vestor's portfolio, Chicago security dealer not only calls
attention to the bright future of leading television set makers
but also describes eleven typical issues of other firms that
should be considered on a long-term basis, and points out that
greater opportunities for investment gain are available in a
variety of smaller companies which do not, as compared to

•

,

&

is

few

a

comments.may be in o:*der.

By EDGAR N. GREENEBAUM, Jr.*
•

there

case

eyebrows,

5

*

page

38

The Commercial and Financial Chronicle... Thursday, June 28, 1956

S

(3074)

to. learn a

Railroad Financing: 1957-66
By W. ARTHUR

GROTZ*

Railway Company

President, Western Maryland

demonstrated its
ability to survive and finding "all around us indications of tre¬
mendous growth ahead," Mr. Grotz concludes that merely on
the basis of national interest a prompt and searching study of
tax or other relief to provide an atmosphere conducive to
investor interest is required in order to finance adequately the
needs of the industry in the coming decade. Mr. Grotz esti¬

road

mediate

billion to be obtained from the

outside which would require

diem

billion if financed by serial maturities and

cept

would

roads

require

for

equip¬

ment and

facilities
the

new.

over

10

next

the

amount

I want to talk to you,

discuss

be

its

possible sources
atmosphere which must

the

and

if

developed,

great

so

an

amount is to be raised. I will ap¬

years.

$20

crease

as

depreciable
base.

equipment

new

raise

the

figure

startling

tucked

;

in

minds

our

that
W.

Arthur

Grotz

away

the

total

this

proach

first,

are

very

first

now

was

than

$20

investment in

not

so

nomical

very

billion.

vestment

The

beginnings

less

up

much

places not

railroad

was

present in¬
depreciation is, I

so

Cer¬
lines

served

by a
contemplated.

now

not

Our first question

why

more

The

believe, about $27 billion.
tainly construction of new
into

until

was,

naturally,

much money for replace¬

ments.

Yet, as one examines, in
the light of the greatly risen costs,
the bare needs of
the
•

coming

"An

address

American

our

decade
by Mr.

Association

of

industry in
of

Grotz

Railroad

intendents, Chicago, June 6,




national
before
1956.

the

Super¬

production

is

to consider.

areas

successful

operation,

revenues

ond

cash

railroads, themselves, there

three broad

railroads from

their

It

is

finance.
now to try to
many
of the $8.5

appropriate
how

raised

be

can

from

the

public by the sale of bonds, notes,
equipment trusts or capital stock.
I

believe that not

inclined to

am

will be raised by
If the pattern of the

10%

than

more

Perhaps all of the $8.5 billion
can be raised by borrowing from

Investors are shrewd and realis¬

innovation

technological

and
a

people,

the

themselves,

others,

or

supply

come up
ideas
will

can

locf

30 vpars is an

little will

indication,

from this

come

very

source.

the public. Let's

examine this pos¬
The railroad debt at Dec.
31, 1954, was $10 billion. The av¬
erage rate of interest on future
borrowings will probably be
sibility.

higher than that of the last ten
In order to assure against
a
weakening of credit the earn¬
years.

for fixed charges
double. Not only

available

ings

have

would

to

Atmosphere, however, will play

even more

but,

the fixed charges would go up

decisive

a

efforts of

in the

part

importantly, the money

the railroads to raise this $8.5 bil¬

tirnrrmnt

less

in this rather pain¬

manner.

The

third

■

.

of the

■

areas

financial policy.
,
Financial policy
involves

w?«

long-range planning,
titude

toward

debt

(a)

the at¬

(b)

creation

or

over

the

expenses.

and

The

is cash from depreciation

third

The

cruals.

area

eco¬

excess

of

sec¬

ac¬

comprises

come

to

be

distributed

The

public

divi¬

*"

dends.;,
•

as

related

area

relations

of,

financial

involves

com¬

municating to the investing pub-,
lie not only business facts but also
the

collective personal

character¬

istics of management, such as ag¬

financial policy and

financial pub¬ gressiveness, enthusiasm, imagina¬
tion and enterprise. Financing in¬
The first is the province of rail¬ volves selling, just as persistently
road superintendents, but the way as does traffic solicitation. An in¬
you
operate will have a telling vestor has thousands of alterna¬
effect
•
upon
whether, and
how tive routes for his dollars.
I wish I had time to
discuss
much, revenues increase. The day
of
railroading
for railroading's fully this policy area of financing.
sake has passed. The sign of the I can take time, however, for only
new day of financial awareness is
two
points: (1) the creation of
the activity of stockholders at and added debt by our industry should
between
annual
meetings, You, not be discouraged as a matter of
yourselves, have become increas¬ course. It should be positively en¬
ingly conscious of revenues and couraged, if it will result, as I am
lic relations.

•

outmoded

as

dete¬

The

locomotive.

steam

riorating position of common car¬
riage in
be

total economy

our

must

bound to be

are

questions

of labor relations which, by

their

effect upon

prospective net earn¬
limit the ability of
railroads to raise large amounts of
additional capital. Happily, nearings,

statemanship in labor relations is
evidenced among the leaders.
A
higher degree of understanding
be

called

for

all

on

pering.

sibly gain in the long

by any

run

condition which would impair the

railroads' ability to get the funds

required for competitive facilities
and

equipment.

Indeed, the dan¬

ger

exists that,

lacking complete

.

cooperation of labor, management

stockholders, all three, the
next ten years will see accelerat¬
ing attrition of railroad mileage.
and

During the next few

years

we

will all be

on

onstrate to

shippers and investors

alike, by

our

mettle to dem¬

actions and at¬
flexibility of think¬

our own

titudes, by our

ing, that the railroad industry is
entitled not only to survive but
This
to

neither an offer to sell nor a solicitation of an offer
of these shares. The offering is made only by the Prospectus.

announcement is

buy

any

to

Certainly

grow.

around

dous growth

industry
NEW ISSUE

JUNE 21,

1956

at

all

find

we

indications

us

of

tremen¬

The airplane

ahead.

is

talking of jet planes
$5 million apiece to handle the

greatly expanded traffic between
1959

ANDERSON ELECTRIC CORPORATION

and

The

1965.

trucking in¬

dustry is predicting that the
tion's

fleet

of

will

trucks

—and thev are

35,000 shares
$0.60 Cumulative Convertible Preferred Stock ($8.50 par)

Price $10.00 per

share

double

guessing that $100

b'llion will be invested by the na¬
tion in highways.-We find predic¬
tions for

rail-trailers, sea-trailers,
and rail, truck and air coordina¬
tion.

Certainly
growth will be

20,500 shares
Common Stock ($1

opportunities
on

every

for

is

presented

people in railroads and in

the

to

them " by

grasping
we

our

time and

afford

can

devoting

to

as

resources as

a

pursuit

advanced

knowledge

—

through"

of barriers

—

a

of

"break¬

and

by

a

really great effort^ to attract col¬
lege graduates to our industry.
Let us catch the Ketering spirit
the "inquiring mind"—of the
inevitability qf change. Let's keep
asking, "why
and "how."
pf

I recently asked Professor Kent
Healy, whose railroad course at

Yale

University

is

well

known,

why railroading has not been more

college men. He
great deal of the
stems from the lack of con¬

popular
replied
reason

public

among

that

a

that
obtained

believe

to

could

billion

be

favorable terms

on

only under the atmosphere of de¬
cidedly positive government poli¬
cies.

Equalization Reserve

Longer

Period

appropriate, therefore, to
think of the other great party in
is

It

transportation for com¬
defense—the Govern¬
And
in getting into this

interest in

and

merce

ment.

aspect I realize that I am groping
for landmarks in the uncharted
of the future.

sea

of long-term plan¬
government and railroads
should work to develop a way of
evening out the "feast or famine"
In the field

ning,

it

Does

chasing.

railroad

of

characteristics

pur¬

cost

or

save

in the long run for a typi¬
cal railroad to place an order for
rail in October in a recent year
and cut it by 80% in February?

money

The Interstate Commerce
mission

Com¬

the theory of

recognizes

the use
called
"equalization reserve." We use it
smoothing out expenses by
of
an
accounting device
for

the

of

maintenance

on

this
each

a

determined
eouipment,

needs of track
might

not

offer

Ann whether,

this highly

bility. the

desirable sta¬

cmv»rn™ent might not

take

part of the risk.
Exemption

Still

question

of this sort for

stabilizing effort.

to assure

I

But

five vears, based on care¬

or

fully
a

Urn

raise

reserve

three

and

expenses

must be washed out

I

year.

whether

way

Maryland.

Western

reserve

•

Accorded

.

Others

groping for some landmark,
to tax exemption.
I be¬

come

come

govern¬

ment^ Let's equip, ourselves for
much,of

inclined

am

from the

The challenge of these vast op¬

portunities

Copies of the Prospectus may be obtained from the under¬
signed who is a registered dealer in securities in this state.

I

$12.5

Tax

hand.

Attracting College Men

par)

turity.

na¬

by 1975—grow to 20 million trucks

of bonds during
extended at ma¬

cipal maturities
the period were

hands.

without its workers pros¬
Nor can the workers pos¬

prosper

offset the inter¬

billion to

$12.5

vening serial maturities and sink¬

railroad capital cannot

Certainly

acute

an

the period of $8.5 billion in debt
would-require the sale of perhaps

might

will

create

problem.
Moreover, a net increase over

ing funds, even assuming all prin¬

effectively corrected.

There

miphf

cash flow

if government regula¬

tion appears to be as
the

.

to be

securities is bound

railroad

dampened

internal

from

internal

to

of the

It affects investors just as it

railroads.

the

of

As

tive.

affects young men.
Let's get back to

lion. The investors' enthusiasm for

may

the standpoint, debt reduction, (c) the determin¬
individual railroads, ing factors with respect to pos¬
to many of us; secondly, of the investing public,; sible sales of additional
preferred
We
had
a
and, finally, of cooperation and or common stocks, and (d) the
;; desirable
vague
notion help from government.
percentage of net in¬
The

w a s

from

reauired for future serial debt re-

come

assume

attitude

a

lion will

v/e

of

sale of stock.

and

facilities

Perhaps

change

preciation and plowback $11.5 bil¬
lion of the $20 billion, leaving $8.5
billion to be obtained outside the

will

billion

de¬

by

covered

be gen¬ with workable
new
accruals? have a lot to do with raising
Depreciation of way and equip¬ money.
ment in 1955 amounted to $535,-,
000,000. The annual rate will in¬ > Confidence in Rails' Growth

amount for private

mous

—to

therefore,

getting $20 billion, an enor¬
industry

about

have

I

far

So

A

railroad. industry away
the "crying towel" is impera¬

total of $7.5 billion of the $20 bil¬

needed.

$20

billion
new

roughly

1951-55, inclusive, we
might count on
plowing back
about $4 billion.

with

the

billion

erated from depreciation

growth

as

the

of

industries.

by

estimate

years

example,

for

the exuberant confidence of other

the level of

railroads

how much

contrasted,

as

earnings for

the

major force in inducing
investment. The rate at which the

Depreciation Accruals

the $20

it

costs?

fidence of the older railroad men,

10 years at

next

the

will be

computer

to

about 50%. Assuming

tic,

or

adding

so

available for fixed
charges as to improve the over-all
credit picture. Certainly the bor¬
rowing for diesels did just that.
(2) The amount of net earnings
that can be plowed back in the
next
10 years consistently with
good investor relations is probably

investment

car

As to the second area,

road, to the effect that our rail¬

made

in

result

in

earnings

clerical

Symes of the Pennsylvania Rail¬

doubtless recall the
by President

you

delays

in

in the majority of rail¬

can

situations,

savings greatly in excess of added

and intense competition,
billion seems increasingly
reasonable. I am prepared to ac¬

of

result

yards

costly in car time than the
overtime pay? Would 10 cents an
hour car hire instead of $2.40 per

Proposes statesmanship in labor relations;
attracting young executives; longer equalization reserve pe¬
riod; similar tax exemption accorded to port authorities and
others; replacement accounting to contend with inflation; and
the less impressive but no less imperative economies of new
cars, yards, line changes and signals.
All

our reluc¬
overtime at

Does

more

sinking funds.

statement

countenance

to

strategic

will accrue from de¬
preciation, $4 billion from reinvested earnings, leaving $8.5
required in the next decade, $7.5 billion

the sale of $12.5

yards?

tance

assumed $20 billion replacement outlay

of the

that

mates

railroad industry has

that the

Convinced

it

sure

simply
must find ways to get more miles
per day out of cars. I believe the
national average freight car turn¬
around is about 16 days. If the
shippers and you striving together
could
save
one
day, the effect
would
equal
suddenly
finding
100,000 freight cars! And at $8,000
each, that would mean $800,000,000! Are we everlastingly exhort¬
ing the shippers to do all they
can do? Have we too many inter¬

You'll be forced

costs.

lot more. For example, you

aware

of

great construction

tax exemption
port
authorities, state
road commis¬
sions, airport and bridge authori¬
ties are basically affected by
tax exemption,
The construction
throughout vital industries under
accelerated amortization illustrates
the helo of deferred taxation. I'll
have more to say about this later.
Perhaps a landmark, an answer
to the question of tax relief for
soaring replacement costs, may be
suggested by one of the replace¬
ment theories already recognized
in taxation. One theory has to do
with the deferment of taxation on
projects based
or

deferment.

the gain

on

The work of

involved in the sale of a.
or\

nn

TifiCiP

40

<0

.Volume

183

Number 5546...The Commercial and Financial Chronicle

i

New Issues

Interest

on

these Bonds is

under the

Exempt from

any

Federal Income Tax,

hereafter imposed,

now or

provisions of the United States Housing Act of 1937,

amended

as

$88,000,000

New

'

Housing

In

an

States

opinion rendered to the President of the United
on May 15, 1953, the U. S.
Attorney General stated

in part:

f\ ■

\■

:

..

■ :J

■

"In summary, I am

of the view that: * * * A contract to
annual contributions entered into by the PHA (Public
Housing Administration) in conformance with the pro¬
visions of the act (U. S. Housing Act of 1937, as amended)
pay

☆

is valid and binding upon the United States, and that the
faith of the United States has been solemnly pledged to

☆

the payment of such contributions in the same terms its
faith has been pledged to the payment of Its interest-

bearing obligations."

2%%, 2'/2% and 2%% Bonds

.

C

Legal Investment for Commercial Banks, Savings Banks and Trust Funds in New York and
many

(parentheses not in original text)

V

other States and Legal Investment, without limitation as to amount of investment,

for all National Banks organized under the Laws of the United States

Principal and semi-annual interest payable,
Agent

in

or

These Bonds,

to

at

the option of the holder,

the City and State of New York

be issued by

as

both

to

or

at the office of the Fiscal Agent of the respective Local Housing Authorities or at the office of the Alternate
Paying
in the City of Chicago, Illinois. Coupon bonds in the denomination of % 1,000, registerahle as to principal only,

principal and interest, with the privilege of reconversion,

the

at

expense

of the holder, into

bonds.

coupon

the various local housing authorities listed below, will constitute, in the opinion of counsel, valid and legally binding obligations of the respective local housing
of annual contributions unconditionally payable pursuant to the Annual Contributions Contracts with the Public Housing Administration (an agency of the
which, together with funds of the local agency actually available for such purpose, will be sufficient to pay the principal of and interest on the bonds when due.

authorities, secured by a first pledge
Federal Government).in

an amount

The United States

Housing Act of 1937, as amended, solemnly pledges the faith of the United States to the payment of the annual contributions
by the Public Housing Administration in accordance with the terms of the Annual Contributions Contracts.

--

-

,

...

LOCATION OF AUTHORITIES AND AMOUNTS

Pennsylvania Issues

Scale 1

21/2% Bonds

2%% Bonds

21/2% Bonds

S2,315,000 Allegheny Countv, Pa. (1981-90)
815,000 Erie, Pa. (1957-96)

$1,555,000 Cambridge, Mass. (1957-82)
1,600,000 Holyoke, Mass. (1957-82)

975,000 Fayette County, Pa. (1957-90)

1,375,000 Lawrence, Mass. (1957-82)

$3,625,000 Kansas City, Mo. (1981-93)
1,615,000 Buffalo, N. Y. (1957-96)

2,275,000 Richmond, Va. (1981-93)

1,650,000 New Bedford, Mass. (1957-81)
Scale 2

Scale 3

2%% Bonds

2i/2% Bonds

$1,780,000 Peoria, 111. (1957-81)
1,875,000 Covington, Kv. (1957-81)
11,275,000 Newark, N. J. (1957-82)

25/8% Bonds
$1,295,000 Newport, Ky. (1981-93)

$2,175,000 Macon, Ga. (1957-81)

1,375,000 Paducah, Ky. (1981-93)

3,075,000 Troy, N. Y. (1981-93)

25/g% Bonds

2,715,000 Nashville, Tenn. (1957-91)

9,370,000 Capital of Puerto

$1,510,000 Huntsville, Ala.

2V2% Bonds

(1981-93)

Rico (San

/ 1,210,000 Tuscaloosa, Ala.
(1981-93)

$2,800,000 Oakland, Calif. (1957-96)

1,155,000 LaGrange,

9,160,000 Chicago, III. (1957-96)
1,915,000 Huntington, W. Va. (1957-96)

Ga.

Juan) (1957-96)

1,215,000 Woonsocket, R. I. (1981-90)

(1981-93)

(1981-93)

1,780,000 Covington, Ky.

4,215,000 Dallas, Texas (1981-93)

6,885,000 Norfolk, Va. (1981-91)

MATURITIES AND YIELDS OR PRICES
(Accrued interest to be added)

All
Due

Penna.

Issues

Due

| Scale

Due

Issues

Due

1

Scale 2

Due

Scale 3

1957

1.75%

1966-67

2.10%

1966-67

2.10%

1966-67

2.10%

l%tT

1958

1.80

1968-70

2.15

1968-70

2.15

1968-69

2.15

1967

2.15

1959

1.85

1971-73

2.20

1971-73

2.20

1970-71

2.20

1968-69

2.20

1960

1.90

1974-76

2.25

1974-76

2.25

1972-74

2.25

1970-71

2.25

2.30

1961

1.95

2.30

1977-79

1980-83

2.35

1980-83

2.35

2.375

1984-87

2.40

2.40

1988-91

2.45

1992-96

2.00

1984-86

1987-96

1962-63

1964-65

2.50

1977-79

.

1

2.05

2.30

2.10%

1975-77

2.30

1972-74

1978-80

2.35

1975-77

1981-83

2.40

1978-80

2.40

1984-87

2.45

1981-83

2.45

1988-91

,,

2.50

1984-87

2.50

1988-96

2.55

1992-96

@ 991/2

2.35

(Note: Where the yield and the coupon are the the same, the price is par)

The bonds of each issue will, with the exception
numerical order, at

thereafter but

on

or

a

redemption price of
before 20 years

if redeemed thereafter but

on

or

par

noted hereafter, be redeemable

and interest accrued

to

from their date; 2)4% if redeemed thereafter but
before 35 years
as

interest

on any

payment

on or

before 25

years

from their date; without premium if redeemed after 35

are

ofitted when,

and if issued and received by

as

with respect to

and after

ten years

from the date of the bonds
on or

before 15

years

from their date; 2% if redeemed thereafter but

years

whole,

as a

on or

before 30

from the bond date. The bonds of the local public

agencies

us

Chemical Corn Exchange Bank

and

are

subject

to

Salomon Bros. & Hutzler

Dick & Merle-Smith

Guaranty Trust Company

The Philadelphia National Bank

The Marine Trust

lacHimltf

Company

The Northern Trust Company

City National Bank A Trust Co.
Kanaaa Cily, Mo.

Baker, Watts A Co.

Commerce Trust Company

Harris Trust and Savings Bank

The First National Bank

\

of Memphia

■

Fulton, Reid A Co,
:

Federation Bank and Trust Co.

.

The Peoples

National Bank

of Charlotleaville. Va.

„

\

....

Bache A Co.

Incarparaiad

King, Quirk A Co.

Wachovia Bank and Trust

Fidelity Union Trust Company

•

"

lacerparattd

Field, Richards A Co.

,

N tw/s&t

.

First National^lank
in Dallat

National Bank of Commerce

Seattle-First National Bank

W. H. Morton A Co.

Barr Brothers A Co.

Baltimore

-

C. 1. Devine & Co.

The First National Bank

S»n Franciaco

of Portland. Ore.

A. G. Edwards A Sons

of Seattle
i

located in Kentucky,

American Trust Company

The First National Bank

Trust Company of Georgia

Kaoaaa City. Mo.

R. H. Moulton A Company

from their date;

years

of Chicago

Carl M. Loeb, Rhoades A Co.

Mercantile-Safe Deposit and Trust Company

of Weatcrn New York

Bacon, Whipple A Co.

inverse

upon request

1

Blair A Co.

in part in

prior sale and approval of legality,

of New York

Kidder, Peabody A Co.

or

from their date, 3% if redeemed

each issue, by recognized municipal bond counsel.

Descriptive Circular

Bankers Trust Company

on

above, if called in part, will be selected by lot from the whole number of the respective issues then outstanding.

These Bonds

The Chase Manhattan Bank

date

date of redemption plus the following premiums: 4% if redeemed

Pierce, Carrison, Wulbern, Inc.

\

1

ol

Company

Winaion-Salem

First National Bank

The Illinois Company

Minneapolia

Incorporated

J. C. Wheat A Co.

Third National Bank
in Nathvillc

'

New York, June 28, 1056




*

rails

tj N': joi

(3075)

J

ChronicleThursday,-June 28, 195(1

The Commercial and Financial

*

r

(3076)

La—Bulletin—Park, Ryan, Inc., 70 Pine
Y. y

of Alexandria,

City

Banking Group Wins

Street, New York 5, N.

Dealer-Broker Investment

Company—Analysis—Aetna Securities Corporation,' llTBroadway, New York 6, N. Y.
Dominion Tar & Chemical Company — Analysis — MjcLeod,

L.

Young, Weir & Company Limited, 50 King Street,
Toronto, Ont., Canada. Also available is an analysis
Steel Company of Canada, Ltd.

Recommendations & Literature
containing comments on

Atomic Letter (No. 18) dated June 1,

extension, atomic Navy, guided missiles,
Atomic Development Mutual Fund, Inc.,

uranium guarantee
aircraft

atomic

—

Bituminous Coal and The Pittston Company—Bulletin—J.

R.

treal, Que., Canada .(New York representative, 64 Wall St.,
New York 5, N. Y.).

letter—Bache

Canada—Investors'

&

monthly—Wills, Bickle

issued

Digest

Wall

36

Co.,

&

Company, 44 King Street, West, Toronto, Ont., Canada.
—

Financial Facts and Comment—Bulletin—Gardiner,

Canadian

Street, Toronto 1, Ont., Canada.

Annett Limited, 330 Bay

Co., 14 Wall Street, New York 5, N. Y.
Guide

Bank

Foreign Letter
York

New

Institutional

—

15 Broad Street,

Burnham and Company,

—

5, N. Y.
Common

Type

Stocks—Selected

list—Francis I.

1 Wall Street, iNew York 5, N. Y.

du Pont & Co.,

McKinri'on, 11 Wall Street, New York 5, N. Y.

Current information —Yamaichi Securities
Co., Ltd., Ill Broadway, New York 7, N: Y1.

Japanese Stocks

—

Latin American Import Competition—In current issue of LatinAmerican

Business

Highlights—Chase Manhattan

13

Bank,

Pine Street, New York 15, N. Y. Also in the same issue
discussion of the Latin American Meat Industry.

Life

is

a

Survey

—

La

Salle

Chicago 3, 111.

Street,

...

1.75%

memorandum

on

McGregor-Doniger,

Counties, Pa.
in yield from
1.75% to 2.50% and is applicable
to bonds of the housing authorities
of
Richmond, Va.; Kansas City,
Mo.; Holyoke, Cambridge, Law¬

Ellis & Simmons,
111. Also available is
National Aluininate Corp.

Inc.—Analysis—Unlisted Trading Depart¬

National Life

Accident Insurance Company

Analysis

—-

Scale 3

1.75%

Pacific

—

circular

a

Scale

with New York State
Wall Street, New York 5, N. Y.

an

up-to-date com¬

parison between the listed industrial stocks used in the Dowover-the-counter industrial stocks

Jones Averages and the 35
used in the National

Quotation Bureau Averages, both as to

market performance over
National Quotation Bureau, Inc.', 46
York 4, N. Y.
yield

and

Stocks With

member

firms

of

income;

growth;

Sex Appeal
the
or

a

13-year period —
Front Street, New1*1

chosen by
Stock Exchange for stable

income-growth—in

groups

June

1956

issue

of

"American Investors"—American Stock Exchange, 86 Trinity
Place, New York 6, N. Y.—subscription $1.00 per year.

Treasure

Chest in the Growing West—Area resources book
explaining opportunities of the area served—Utah Power &
Light Co., Dept. K, Box 899, Salt Lake City 10, Utah.

West German Tile Industry—Report—Roy E. Jordan, Jr., Pres.,
The Mosaic Tile Company, Zanesville, Ohio.

St.

&

views—Lerner

Co.—New

Co.,

Union

Louis

H.

Co.—Memorandum—G.

Trust

Walker

randa

on

Hurd

American

Lock

National

&

Co.,

Corp., E. & B. Brewing

Mid

Co.,

West

Abrasive

Co.,
Co.,

Brewing Co. of Michigan, Peninsular Metal Prod¬

Greetings

52 Wall

—

—

80

Investing

Corp.—Report—General

Wall Street, New

Corp.,

Aluminium

Company

Hanseatic Corporation,

Ltd.

—

—

Analysis

Fire

Southwestern

&

W. C. Langley & Co.,

—

Standard

Oil

of

to

The

&

Sons,

—

New

Canada

on

United

Also available is

a

memo¬

and

York

same

bulletin

are

secured

data

1-21,

In

Investment

June 29, 1956

Investment

Sleepy

annual

Hollow

outing

of

at

Country

New

the
Club,

June 29, 1956
Bond

Club

of

Toledo

of

Bank
and

Convention

34th

meeting

at

Hotel

the

summer

as

an
Annual
Contract
between

Firms

Stock

The

*

Exchange

meeting of Board of Gov¬

LOS ANGELES,
now

Calif.—John A.

with Hopkins, Har-

:bach & Co., 609

South Grand Ave.,
Angeles Stock

members of the Los

Exchange. He was formerly
Fewel

ernors.

Hopkins, Harbach

(Special to The Financial Chronicle)

Black is

(Detroit, Mich.)
of

housing

States Housing Authority,

With
■.

"

4-6, 1956

local

the

and

payment of the annual contribu¬
tions by the PHA.

Ding" at the Forest Hills Coun¬

Association

uncondition¬

under

with

& Co.

DEPENDABLE MARKETS
Summer Job Wauled
Girl Friday for busy

would

"Missile Makers"

firm

man,

like
or

City.

♦

now

Troster, Singer & Co.
Members N. Y. Security Dealers Association
Trinity Place, New York 6, N. Y.

my

&

j

376

to

New York 7,

OEMPSEY-TEGELER & CO

or

to

make

employer.

Financial

in

munici¬

high school senior,

a

for

job

bank

Willing

endeavor




first pledge of an¬

a

amended, solemnly pledges the
of the United States to the

pal

74

New

faith

sociation seventh annual "Fling-

try Club.

PHA

United

Sept. 27, 1956 (Rockford, III.)
Rockford Securities Dealers As¬

Oct.

(Toledo, Ohio)

in

other states.

authority issuing the bonds.

Radisson.

(New York City)

annual

Association

National
Women

Field

Association

the

(Minneapolis,

1956

Minn.)

Young

2-

by

payable

ally

...

funds

trust

certain

contributions

nual

Highlights No. 32

2400

the bonds is exempt

on

and

banks

Fruit.

outing at Inverness Club.

Handling Systems, Inc.

Going to Press—

HA

1
be callable ten

their

The bonds of each issue will be

Also in the

Scarborough, N. Y.

Co.—Memorandum—Hemphill, Noyes & Co., 15
Mechanical

will

bonds

legal investments for savings

are

Arthur M.

-

•

housing

of

Federal income tax now
hereafter. imposed. The bonds

or

Sept.

York

Light Co.—Analysis—James H. Oliphant &

Broad Street. New Y'ork 5, N. Y.
on

Street, New York 5, N. Y.

Ycrk

Co., 61 Broadway, New York 6, N. Y.

randum

-

the

cost

from

Interest

Texas Gulf Sulphur—Data—-Bruns Nordeman & Co., 52 Wall

120 Broadway, New York 5, N. Y.

173

Carolina Power &

Cities Service

.

EVENTS

Portage Avenue, East, Winnipeg,
Rcyal Bank Building, Toronto, Canada.

and

•

COMING

Canadian Pacific Railway Company—Review—James Richard¬
son

.•,•„•••

.

tempo¬

from any

income, growth and trading, etc.

4, 111.

Housing

or

date at a re¬
demption pHc6 Of 104% and ac¬
crued interest, and thereafter at
declining prices to 101%.

Broadway, New York 5, N. Y. Also available are reports
on Sears, Roebuck & Co., Polaroid, and Minerals and Chemi¬
cals.
In the June "Pocket Guide" are data on companies
in the Guided Missile field with lists of common stocks for

—

(PHA)

from

the

meet

years

Indiana—Report—Harris, Upham & Co., 120

Memorandum

the
ad¬

Public

the

projects.

Casualty Co.—Memorandum—Sanders &

Corp.

of

retire

sale

to

other than the
PHA, and the balance will be used

Co., Republic National Bank Building, Dallas 1, Texas.

Peabody

'•

Analysis

from

loans

rary

Broadway, New York 6, N. Y.

115

used

be

Administration

York 5, N. Y.

Whitehall Securities Corp.,

Street, New York 5, N. Y.

will

bonds

the

from

Proceeds

&

vances

Racing

Grange, Ga.; Woon-

I.;

R.

Contributions

Corp.—Memorandum—Kidder,

Memorandum

housing

San Juan, Puerto
Huntsville and Tuscaloosa,
Ala. Troy, N. Y.; Dallas, Texas;
Norfolk, Va. ;and Covington, Paducah and Newport, Ky.

Port Huron Sulphite & Paper Co.

17 Wall Street, New York 5, N. Y.

Aquafilter Corp.

British

Felt

Manufacturing

&

ucts Corp., and

American

Auto

of

Rico;

Krensky & Co., Inc., 141 West Jackson Boulevard, Chicago
All Metal Products Co.—Memorandum—Wm. C. Roney & Co.,
Buhl Building, Detroit 26. Mich. Also available are memo¬

2.55%

socket,

Co., 503 Locust Street, St. Louis 1, Mo.
Southland

from
applies to
authorities in

and

to

issues

Post

10

Peoria,

yield

in

ranges

Macon and La

Square, Boston 9, Mass.

Statler Hotels Delaware

*

*

Office

South Penn Oil Company

Three

—

American

*

Cement

Riverside

Over-the-Counter Index—Folder showing

4

1.75%

Stancan Uranium Corp.

on

of

housing

Covington, Ky.

Tenn.; and;

—Singer, Bean &
Inc., 40 Exchange Place, New York 5, N. Y» Also
is

price

the

of

bonds

for

yield of

a

dollar

a

111.; Oakland, Cal.; Newark, N. J.;
Huntington,
W. jVa.;
Nashville,

Uranium Mines Corp. -—Circular

Mackie

to

authorities in Chicago and

Mohawk Power—Comparison

Electric & Gas—Cohu & Co., 1

from

ranges

out

99%,

Clark, Landstreet & Kirkpatrick, Inc., 315 Fourth Avenue.
North, Nashville 3, Tenn. ^ Niagara

Mass.;

Bedford,

New

Buffalo, N. Y.

and

Atlas Plywood Corporation.

&

ranges

and

rence

York 6, N. Y.
Mexican Light & Power Co. Ltd.—Bulletin—A. G. "Becker &
Co., Inc., 120 South La Salle Street, Chicago 3, 111.
Miller Manufacturing Co.—Bulletin—de Witt Conklin Organ¬
ization, 100 Broadway, New York 5, N. Y. Also available is
on

2

Scale

ment, Ira Haupt & Co., Ill Broadway, New

bulletin

for bonds of the

Erie and Fayette

T:'-

Salle Street; Chicago 4,

South La

208

yields from

in

ranges

2.40%

to

housing authorities in Allegheny,

.

Fuller & Co., 39 Broad¬

New York 6, N. Y.

way,

1

Scale

Leetronics Inc.—Memorandum—S. D.

to

public in four separate

2.55%.;/

Company—Bulletin—Leason & Co., Inc.," 39 South

Husky Oil

reoffered

were

yield
groups—Scales 1, 2, 3 and 4—at
prices to yield * from 1.75% tq

Corp.—Bulletin—Bache & Co., 36 Wall Street,
York 5, N. Y. Also in the same bulletin are data on" :

New

bonds

The
the

Jacksonville, Fla.

Wulbern, Inc., Bamett Building,

2%%, 2Yz% and 2%% for

from

Pierce, Carrison,

—

interest

specified

group

bonds, which mature serially
1957 to 1996, inclusive.

the

Makers—Highlights No. 32—Troster, Singer & Co., 74

Trinity Place, New York 6, N. Y.

Sixty

Company

Insurance

available
Missile

The
rates of

Ilarnischi'eger
"

a

Investing for Income and Growth—Two suggested portfolios^—
Thomson &

Gulf

Juan, Puerto

Rico.

v

York 5, N. Y.
Fire Brick Company—Analysis—H. Hentz & Co.,
Street, New York 4, N. Y.

60 Beaver

authorities located

housing

16 states and San

in

Co., Inc., 40 Wall Street, New

A. P. Green

a

Monthly bulletin including bid and
asked prices—Atwill and Company, Inc., 605 Lincoln Road,
Miami Beach 39, Fla.

Florida

.

Marshall Field & Co.—Memorandum—Blunt

Industry—Bulletin—Smith, Barney

Chemical & Pharmaceutical

&

Monthly bulletin

—

$88,000,000 of a total of $91,755,000
New Housing Authority Bonds of¬
fered at competitive bidding by

Exploration Limited—Report—De Pontet

Green Bay Mining &

June 27 for

the successful bidder

local

Hanover Square, New York 5, N. Y.

Manhattan Bank was

Chase

The

CFC, W. R. Grace

Co.—Annual report—Dept.

&

dealers headed by

Natco Corp.

Canadian
Bank of Commerce, Business Development Division, 25 King
Street, West, Toronto 1, Ont., Canada.

Canadian Commercial Letter

Grace

R.

&

Canada—Monthly business review—Bank of Montreal, Mon¬

Canada—Fortnightly market
Street, New York 5, N. Y.

W.

syndicate of banks

and investment

Durham, N. C.

Corcoran Street,

'& Co., 7

Co., 115 Broadway, New York 6, N. Y.

Williston &

Ill

C.

Dept. C., 1033 Thirtieth Street, N. W., Washington 7, D.

A nationwide

Stores,

Department

Housing Bodies

Of 29

West,
of the

Co., Ill Broadway, New York 6,

&

aend intereeted parties the

to

.

S88 Million Bonds

.

Inc.—Memorandum—Talmage
N. Y.
General Dynamics Corporation—Analysis—Harris, Upham &
Co., 120 Broadway, New York 5, N. Y.
General Telephone Co.—Memorandum—First Securities Corp.,

Federated

firm* mentioned will be pleated
following literature: I r

Hi* understood that the

Darling

A.

summer
near

apply
myself

with

New

myself
a

and

perience

in

N.

Y.

C.

with

leading houses.

"

to

Box S 614, Commercial

Chronicle, 25 Park Place,
N. Y.

15 years' ex¬

a

York

credit

executive.

Box

K628,

Commercial

Financial Chronicle, 25

Place,

New York

&

Park

7, N. Y.

Number 5546;.. The Commercial and Financial Chronicle

Volume 183

(3077)

getting the conservative Board to back to the University for new.. turned over probably once in ten
years.
In this case, no attention
a more courageous invest¬ buildings and increased salaries.
I
ment policy that they formed a
might also give the names was given to general market con¬
separate Trust — The Wisconsin of individual clients which my ditions or to the investment cycle.
Alumni Research Foundation. organization
has
helped
along
adopt

In Stocks

The Report of a Psychiatrist
who these same lines. I could also cite
Let me close with a story which
contributed $80 or so apiece, mak¬ a member of my family who dur¬
ing a total of $585 to start with ing 50 years increased $600 to one of my valuable associates,
over
on
Jan. 1, 1926. They increased
$1,000,000 by putting ;the John D. Riordan, tells.
It con¬
this small sum by the purchase dividends and profits back into cerns a friend who had a nervous
breakdown on account of his over¬
newer industries when they were
and
sale of "growth
stocks" so
that, at the present time, this $585, unpopular and selling these when activity in the stock market. One
with accumulated dividends and they became popular. Meanwhile day when the patient was lying
the fund was kept well diversified on the couch and telling of his
profits, amounts to over $17,000,- with
only a comparatively small early life, the psychiatrist said,
000 with a market value on Dec, amount in each
industry, so risk "I understand what got you into
was
pretty well eliminated. All all this trouble. The first thing
31, 1955, to $36,000,000. Approxi¬

They got together

By ROGER W. BABSON

Economist charts
of

making

market.

two

programs

on

the stock

money

selling

One, by

when

price is high and buying at the
bottom of decline; and, the other,

by swapping maturing industries
for
that

Points

industries.

new

latter

the

intelligence,

ability,

mately

$6,000,000

act

patents

and

requires
to

courage

out

on

seven men

from this required, however, consider¬

received

royalties

they

able work

gave

as

the entire fund

was

you

seem

to

remember

is

your

mother rocking you in the cradle

and

sinking 'Bye lo, Bye lo, Baby.'
interpreted this to mean
'Buy low—Buy low!' "
You

Wilson & Creem Admit;
On July 6 Michael Creem will
acquire a membership in the New
York Stock Exchange and will be
admitted to

partnership in Wilson
Creem, 120. Broadway, New
City, members of the New

&

York

York Stock Exchange.

Two With Federated Plans
(Special to The Financial Chronicle)

attention

no

market

Forbes

and

Mary E. Forbes have

become associated with Federated

Plans, Inc.

paid to general

the

conditions, "or* to
business

This announcement is neither

cycle.

offer to sell

an

Debentures. The

The

only

the

in

money

have

I

way

stock

made

nor a

solicitation of

an

offer to buy

any

of these

offer is made only by the Prospectus.

has

market

been by selling stocks and taking
:

profits at times like this, deposit¬
ing the

$20,000,000

money

in

banks, and
waiting
until
the

bottom

the

cline.
the

British Columbia Power Commission

of

de¬

next

When

3%% Sinking Fund Debentures,

market

crash

finally
I buy

comes,

I

this

way

not

am

Due 1986

Price 98'A % and Accrued Interest

stocks.

In

Series

a

speculator, but
like

am

ice

the

in the

North

Roger W. Babson

man

who

■;>

gathers ice in
er

Pacific Great Eastern

wintry weath¬
it up for people to

stores

and

Railway Company

use

during the summer. This same
principle, in reverse, applies to
.those

who

tables

in

about to
real

be

and

rewarded.

to

when

sell

^do

We

lack

People

so.
crowd

have the

who

crowd

are

fruit
>rv

to

courage

contrary

to

position later to

a

Into

New

British Columbia Toll Highways
and

Industries

kind

ing

by

performing

service—that

of

is

Debentures, Series B, Due 1976

another

Price

by help¬

industries when they

new

Bridges Authority

3Yr % Sinking Fund

Others make money in the stock
market

a

$10,000,000

is much unemployment, no new
building, and when commodities
are
selling below cost.
Buying

>. v

the

make conditions better when there
v

'if

-

go with the
conditions
worse.

go
in

the

cour¬

buy

or

Price 98'A % and Accrued Interest

to

who

-make

Those

33/i% Sinking Fund Debentures, Series B, Due 1981

vege¬

entitled

are

stocks

others

and

when

they are
We all perform a

spoil.

service

age

fruit

can

summer

and Accrued Interest
983A%

are

unpop-ulaii and taking profits
when these industries mature and

popular.

are

Those

who

Interest payable

June 15 and December 15 in the City of New York in lawful money of
the United States of America.

follow

this second program have the ad¬
ditional

advantage of diversifica¬
They also always keep their
money
working, whereas, under
tion.

method,

my

about

into

a

my

money,

third of the time.

new

is

idle

All of these Debentures, to be dated June 15, 1956, will be

Buying

unconditionally

to payment of principal and interest by the
PROVINCE OF BRITISH COLUMBIA (CANADA)

guaranteed

industries each year and

*

selling the stocks of a few matur¬
ing companies requires much re¬
search. Any investor who desires
to follow such a program should

as

be prepared to pay an Investment
Counselor for selecting these new
industries.
General

been

Furthermore, although

Motors, for instance, has
"gold mine," yet there

a-

Copies of the Prospectus may be obtained from only such of the undersigned as may legally offer
these Debentures in compliance with the securities laws of the respective States.

have been scores of other automo¬

bile

companies which have gone
It is necessary both to

bankrupt.

the right industry, and
the stock of the right

into

get

MORGAN STANLEY & CO.

within that industry.

A. E. AMES & CO.

HARRIS & PARTNERS LIMITED, INC.

BURNS BROS. & DENTON, INC.

also to buy
company

Wisconsin University's Program

swapping

Although
industries

for

new

maturing

industries

BLYTH & CO., INC.

THE DOMINION SECURITIES CORPORATION

Incorporated

DREXEL & CO.

GOLDMAN, SACHS & CO.

exceedingly profitable when done
very few individuals

HARRIMAN RIPLEY & CO.
Incorporated

is

MERRILL LYNCH, PIERCE, FENNER & BEANE

KIDDER, PEABODY & CO.

intelligently,
or

even

institutions have the abil¬

act on this
principle. One college, however,
has had a most interesting experi¬
and

ity

*

ence

courage

in this connection.

Wisconsin

its

to

University,

STONE & WEBSTER SECURITIES

Trustees,

which,

had

bright

chemists

and

These

younger

men

CORPORATION '

UNION SECURITIES CORPORATION

I refer to
on

WHITE, WELD & CO.

typical Board of conservative

college
,

SMITH, BARNEY & CO.

SALOMON BROS. & HUTZLER

so

also

some

engineers.
failed in




June 28, 1956.

'

!

TARBORO, N. C. —Edward L.

principle and considerable work
with

9

WOOD, GUNDY & CO., INC.

The Commercial and Financial Chronicle

10

Thursday, June 28, 1956

...

(3078)

A

A Bearish Stock Market View

brain

Greene &

Predicting the "odds

-1

society

our

of

summer

in the

was

had

around

stock

275.

At

that

:

it

was

(12)

at the

not

difficult

and

have

to

timistic

stopped rising for over six months

peak in early 1955.
(13) The banking figures

in¬
terpreted by Mr. James, Hughes
and Bolton Tremblay are no long¬

the

of

I

data

to

use

determine
trend

favor

(15)

at

is

trying

one's patience,

to

declined

than 20 points

more

and by the
had almost
reaching the all-

below

the

275

level,

spring

of

this

year

when

time record high

the bullish cause,

not defend

can

today, except on

intermediate trend basis. Some

time before the end of

July, I ex¬

Jones

Industrial

the

pect

Dow
to

Average

recover

to slightly
before the
a decline of

above the 500 level, but

of

middle

appears

next

year

greater magnitude than we have
witnessed since 1946 appears prob¬
able.

some

longer

no

there is

favorable

as

of

the

and

House

Warning Factors

Top

Some of the factors that
of

warn

pearing
(1)

follows:

as

market

bond

declining

A

usually

impending top are ap¬

an

since 1954.

(2)

A

since

July,

1955

ahead of

out

market

bear

our

London

in

(London peaked
market in 1929,

1937 and made bottom in 1940 al¬
most two

if

even

lican

we

last

about

two

Russia

gaining

the

picture

winning

back

percentage

the

gains made during the same time
period preceding the tops of 1929
and 1937.

(4)

penetration

A

the

of

200

moving
average
with the
average rolling over. i "
(5)
The
new
highs in
1956
were made with volume dropping
■

below

against
week

tack

million

15

on

week

a

shares

of

in

September and 22

the

on

upside

early

in

There

ments,
from
bear

as

bullish

few

a

(6)

A

strong

(7)

support
A

typical of

the

below

around 490.

area

high by the rails

new

confirmed by

(8)

back

retreat

the industrials

un¬

is

as

major top.
Continued weakness in the
a

odd-lot figures
to be rather

showing the public

complacent about the

outlook.

(9)
years

A time period

of about

10

since end of World War II

(10) The
been

same

declining

1919-1929.

as

tnotor

have

stocks

since

November

1955 while in 1929 General Motors

-peaked
months

me

the

being underway al¬

ready.
shown

as

by the Standard Statistic Average,
still

are

below

the

1946

highs.
Normally the low priced stocks
are
given a whirl in every bull
market before it is finally over.

(2) The
leverage
investment
trusts, such as Tricontinental, are
still selling at about the same dis¬
count that

they were several years
Normally this discount is re¬

ago.

duced

a

eliminated

entirely

or

more

as

optimistic.

(3) Usually the steel group has
sharp advance for several months

before the end of the bull market
in

as

the

in

1929

and

1937, but most of

steel

stocks, like U. S. Steel
Bethlehem, have been trading
rather

a

last

sharp

narrow

They

year

in

rise

the

for the

range

should

have
future

near

a

if

this pattern is to hold.

The

Federal

Reserve

in

March

ahead

(11) Farm

of

or

the

about

six

averages.

commodity

prices

Board

is

too

ulating
the

the

the
a

effect

reserve

re¬

but

—

unfortunately,
of lowering

record

rediscount

rate

at

the

begin¬
ning of bear markets is far from
reassuring.

In

the

1929

average

rediscount rate for the 12 Federal
Reserve

Banks, which was 5.08%
September, was lowered to

in

cember,

down to 2.67% by
Again in 1937 the Fed¬

Reserve

eral

Board

quickly low¬

ered the rediscount rate to

ber

the

av¬

1937

panic continued in both bear

markets

quick

in

spite

„

of

the Fed's

Mr.< Goldenweiser

action.

been

said

while

the

share

a

that

Federal
*An

address

New

21,

by Mr. Westcott before
Security Analysts, June

1956.

York




-

on

meantime

the

1950 at

as

"you
it

can

one

thing

Reserve

pull

he

Board

on a

control) but

investor

an

Electric

buy -General

could

recently

as

times earnings to

seven

yield 9%. I still -maintain that
"people are crazier than anybody!"
Price-earnings ratios are a matter
of investor confidence. Let the in¬

begin to worry about Adolf

vestor

Hitler, at he did in 1942, and you
buy American Telephone on a

can

9%

basis.

Joe

Stalin,

you

learned
was

that

string (in cred¬

you

long

the
-

•

-

term

next

in¬

twelve

•

SIDNEY B. LURIE*

Let

him

he did in 1950. and

as

purchase

can

about

worry

G E

on

9%

a

Investor's Mood

changing
better/' and advances bullish arguments supporting
stock buying rather than the selling even though 1956 is a

for the

plateau

The

that

thing

one

able to count

been

has been that

will

body
ratios

to

have

we

in the past

on

something

or some¬

price-earnings

cause

tumbling

come

with little change in earnings and dividends. /

year

1956

lows

but not necessarily the

—

been

who

tnose

tilings:
times

There are only a few
each year wnen it is wise
(1)

be

to

a5grfca-

is

size—our

down

we

replacement market.

willing to
cept
t

risk.

wonderful

is

the

offers

in

odds

the world:

of

out

tor's mood

a

year or

ahead. In

so

psychology at Yale, I
was .impressed
with the regular
rhythms of optimism and pessi¬
studying

mism

which

to

most

people

are

two.

that

think

to

created

have

we

bull market that will

be

a

"a thing

of beauty and a joy forever." Un¬

right

or

you

periods

the

had

nasty habit of

becoming
of

fearful

optimism

over

wanting nothing but gold
awhile

for

bull market has

This

if

in

breaker

ord

we

can

times

25

severe

in

been

many

is

1942.
a .rec¬

and

ways

currently giving

earnings

the growth stocks
er

cash

or

correct the extreme op¬

which

timism

and

and

1932

in

as

after

decline
the

in

not
a

ratios

without
too

the

for

rath¬

a

popular

distant

the

highs

the

have

already

—

than

seller

a

of stocks for

broad reasons: (1) We're

manage¬

planning is on a longterm basis. (2) This also is an age
of tremendous technological revo¬
products create
and a demand for

new

new

markets

new

plants.

Not only is our

(3)

population growing fast, but it's
shifting from one part of the
country to another—the age com¬
plexion is changing and the birth
is

rate

All of which means

^ligh.

for

markets

new

I

hasten

to

much

a

say

that

this

1956

by

and

And

is

there

nothing speculatively exciting in
But there are no specu¬
excesses
to
be corrected;

the market is down—not up.
has been

cautious

been

—

when

has been playing musi¬

everyone

cal

it

chairs.

mediate

Furthermore, the im¬
is

outlook

business

changing for the better. In my
opinion, today's doubts and fears
later will give way to renewed
confidence in business—and "con¬
fidence"

is

what

makes

stock

formations

of

as

Supporting Minority

Telephone and Woolworth, which
still sell to yield

Here

are

reasons

some

in sup¬

port of this minority view: (1)
Something new has been added to

Even at the peak in 1929 it was

possible to buy Homestake at 88
and sell it at 160 in 1932, but in
bear market it is normally more

profitable to ride through with a
reduced

commitment

in

common

stocks

rather than to try and be a
genius and find , the few stocks
that
can
manage
to swim- up¬

stream.

*

have

*

Buying Opportunity

—one

can't push it." fall

Industrial

slightly

control

of

the

recent

the weather
adverse

fac--

But farm

the worst has been seen.
without

which

the

Soil

Bank

is designed

All this

Program

to reduce

sur¬

pluses and maintain income. (2) I
see
improvement coming in an¬
other "soft

spot"

inasmuch

as

—

automobiles

the

ills

the

income—and

sults

will

be

is

do¬

decline- in

this year's re¬

close to the
figures.
The
reason/ of
course, is the boom in trucks and
very

1955

.

construction

represent

equipment
60%

over

h i

w

of the

c

styles

new

h

com¬

pany's sales. This means that an
upturn in farm income next year
would stimulate lagging divisions
which contribute somewhat less
than 30% of volume.

on

,

opinion,
tion

be

levels.

my
one

in

year

a spec¬

the

In

my

ques¬

one

answered

Will

better

a

1957.

there is only

to

these

at

go

the

Studebaker-Packard?

of

way

premise of

my

automobile

In

company

opinion, Chrysler will remain
of the Big Three.

Brunswick-Balke-Collender is

speculation not only on
ulation growth—but the
has

become the third

tor

in

the

school

is

it

and

"bet"

a

leisure

for

the

our

a

pop¬

company

largest fac¬

seating field—
our changed
There is more

on

living habits, too.

sults.

—

won't

exist

this

board.

on

Furthermore, I doubt

that there will be any significant
difference in the third quarter

operating

average

there is

—or

bull

are

whether j

rate

isn't—a strike. There

arguments

either

to

eventuality.
The

safe

Pocahontas

as

well

speculating
lease

new

as

on
on

Roads

are

a

interesting way of
the coal industry's
life.

,

This

the

rising demand for
crystallized their basic
good

management,
density,
little or

because

has

coal
assets

high

of

traffic

passenger

no

traffic, and profit margins which
favorably

compare

vaunted
In

many

market

itself.
not

is

a

with

the

chemical industry.
is

It

no

respects,
different

offers

the

stock

than

life

opportunity—'out

security.

In my opinion, this
good time to take the same

calculated risk you took when you
♦An

address

by

should

New

York

Societv

the

$35.78

Inc.,

June

21,

/

s

Earnings

masses.

this year may double the 1955 re¬

—

which

plagued 1956—a previous year Of
over-production, lack of dramatic

Average

below

over

prices are about
10% above their December lows,
-and the commodity experts think

Earnings this year on the Dow
Jones

no

.tors.

around 5%.

Harvester:

despite

farm

the

has

American

Issues

The steels have been—and still

*. the

vestment stocks such

well

>

.

International

ing

are a

direct

to

are—the best statistical values

favorite "the economy: the promise of an
growth stocks without hurting the upturn in farm income after five
price structure of the quiet in¬ years of decline.. Sure, you and I
stilt

like

Recommended

prices.

bull

be possible to correct the

may

I'd

attention.

your

This

period in which every¬

a

has

one

fu¬

market than those of the past, and

which

great

Here

Chrysler Corporation: is

dividends.

and

are a

attractive issues.

to

.

Reasons

selective

few

ulation

neat trick.

more

many

And there

industry—now

later.

True,

repay¬

not whether to buy

is

—but what!

three

in an age

business

scientific

of

been

I'd much rather be a buyer

seen.

debt

short, the $64,000 Question in

opinion

my

of

siae

uie

View

been

increases,

wage

heavy

-years

In

is

bet

-My

lative

have

con¬

result of the

a

Lurie

B.

Sidney

wrong!

are

earthmen not

suddenly

More¬

lift in

a

ments.

stability.

men

as

of

roung

this

fortunately, we are dealing with
Martians, and earth-

buying

You are either

large is a
plateau year in business with lit¬
tle aggregate change in earnings

opposite reaction. It would be nice

i stiii foresee

new

for every

equal

pro¬

busi¬

business.

permanent

sumer

one

subject. In physics we know that
an

a

over,

and

action there is

in

spending could easily be off¬
by steadily rising state, local
government
expenditures.
The highway program alone will
result 111 at least $1 billion more
being spent in 1957—and defense

is really

best

(3) The

decline

52

large

a

and

business-—for
it

spell

use

new

the

set

d

e

Ours

a

ness

ac¬

calcu-

a

in

moderate

jected

be

to

lution where

accurately,
because
can do that, but-to be
able to forecast the average inves¬

creating
demana—and

cars

to

aown

suburban

• is

of

million

to forecast

reasonably
many of us

population
source

ment whose

earnings and dividends

inventories

last-growing

At

have

a

Meanwhile, the industry

whittling

times,

all

a

already have

—

(Z)

sive.

1

winter.

1

'

highs

seen."

simple business
recognize
two

Ours really is a
for

and then even on the
sacred
blue chips.
The trick in
successful investing is not so much
now

-

Recommends certain attractive issues and predicts that "the

premise that
the 1956 lows—but not necessarily

;

,

Mr. Lurie asserts "the immediate business outlook is

basis.

while Director of Research for the

the

price

the old stock be¬
fore investors were willing to pay
the
1929
price again and this
meant waiting just 25 years. In

$30

a
an

figure of 1.46% in Septem¬
for 1.85% in August but

erage

we

earnings ratios!
Earnings had to increase to almost

and

June 1931.

the beam

off

far

how

on

were

future.

near

temporary stim¬

but

historical

a

bad

ture, it will be

in

By

and our projections weren't
as far as earnings went,

day)

count rate but also the

have

better buying op¬

tne

Partner, Josephthal & Company

;

and earnings
share, or the

project earnings ahead for ten and
(even as we do to¬

stocks

have

slipping since
1954
price of copper, which

$9.00

apt to reduce not only the redis¬

quirements

for

within

vestor "

earn¬

twenty years

us

Rediscount Rate's Effectiveness

4.93% in November, 4.78% in De¬

about the

or

argu¬

however, that keep
feeling 100% sure of

market

portunity

psychology

but the odds ap¬

over

to lavor a

pear

of

inflation

it

should take

A Bullish Stock Maiket View

keep,

mighty promising to young

every

This may

1955.

Yugo¬

fold.

a

the President's heart at¬

break

million

million

20

over

shares

her

is shown

slavia into the Russian communist

and

day

with

in

ground
peace as

a price

oOO

aouve

price of 540. The market months.

a

selling about 30 times

was

looked

ap¬

deteriorating

propaganda for

I

then,

began

Forecast

investors become

just

which

years

equalled

Repub¬

a

ings

on

foreign

be

to

pears

by

have

multi¬

use a

obtained, and on $3o

516 is

analysts like myself who began to

President.

(17) The

A bull market blow-off in

(3)
the

ahead of ours.)

years

Senate

being in the hands of the Demo¬
crats,

(1) Low priced stocks
Impending

since

excellent chance of the

an

control

of 521.

Unfortunately I
an

(at least
to be threat¬

expansion

industries.
(16) The political background

the Dow Jones Industrial Average

doubled

Over

ening

Although 1953

never

major

some

turning down sharp¬

are

temporary)
Westcott

M.

years.

proved

of

or

John

three

Earnings

ly.

mar¬

two

least

bullish background.

us a

industry)

of

for

as

industries (such as the automobile

con¬

a

bull

the

(14)

to

tinuation

ket

giving

er

ap¬

peared

made

balances

credit

their

view¬

point ?' since
most

free

and

op-'

an

have

balances

Debit

earn¬

we

the annual mean pace)

invented, radio was becoming big
business and the electrical age

1920's.

point

rise

was

of current

If

around $34.00.

plier of 15 which is slightly Ligner
tnan tnat of i 929 and 1931 (taking

earnings. Television had just been

recently
fall. Farm
declining in the late

dizzy

a

income

highs,

then

about

were

of bull markets, has

end

Dow

the

with

1952

is notorious for rushing up

Street

outstanding

D-J Average to recover slightly
above the 500 level by July, foresees by middle of next year
a possible greater decline than any since 1946, and D-J 1958
average earnings of slightly below the $35.78 shown in 1955.

Jones-Industrial Averages

1929

so,

flash up as "it did in 1929
and 1937 and sell for a few months

running at an annual rate of

are

thinking "this is where I came in."
General Electric's average price
in 1929 was about 275 on the stock

basis and, while expecting the

addressing

the

disregard

Wall

a

The last time I had the honor of

or

could

Current -earni-gs

1955.

in

shown

ings or dividends that was seen in
the late 1920's. Since my career in

few bullish arguments mollifying 100%
certainty that the bear market is now underway. At most, Mr.
Westcott cannot be bullish except on an intermediate trend
impending top, and

year

investors have

same

lists 17 bearish warnings of an

Investment Analyst Westcott

the last

bought and
hung onto growth stocks with the

months/'

tunity for the long-term investor within the next 12

once

crossed

we

many

to favor a better buying oppor¬

appear

only

since

Department
Ladd, Members New York Stock Exchange
Manager, Research

by the human
in each genera¬

accepted

Within

tion.

By JOHN WESTCOTT*

evidently

concept

era

new

be

can

Mr. Lurie before the
Security Analysts,

of

1956.

got married. And maybe we'll all
have a happy honeymoon.

'j

Number 5546

Volume 183

...

The Commercial and Financial Chronicle

(3079)

prolonged

Any

The Business Outlook
For 19S6 and
By

LEON

Beyond

such

Chairman

of President Trumans Council of Economic
Economic Adviser to Henry Montor Associates,

Advisers.

Inc., Members of N. Y. Stock Exchange

duration

in this respect,
the past.

There

talk,

has

in

:

for

it

that

to

of the 1953-54

even

than

a

ex-

of

pressions

likely. More probably, the overaL
level
of
activity may be quite

stable

during

months,

and

as

better than 3%

ican

almost

economy

would
more

forecast
tic."

was

and

Measured

billion

times, this
optimis-

fact

it

uniform

in

total

our

output

that4 total

1955

prices,
$359
the three

for

year

per

$384

about

7%

billion

whole

a

should

at

worst

higher, than the total
peak year 1955.
Meanwhile, we should remember
all-time

fought

tional downturns of

ever;

believe

I

to

an

earlier

be

gone

era

for-

and this should add perspecour longer range thought

sharn

less

was

first,

in

for

than

be?ausG

to

any

event

are more consequen-

economy

than

is bigger

one

any

man

or

political party, and that the
factors shaping our economic futore are more profound than can
be

-

■

.

.

1

»

individual.

tinue

>

*

".

cLenintinn

,

^l0CK

-

Tex.

—

Burton

-

M.

speculation

nimvs

is

always

should

indulge,

In

the

year,

This announcement

three

the

for

or

Allied

and

Council

—

Products
for

as

a

Gain

(paper), single
quantity prices
Resource

Moses

Inc.,

Talmage & Co., Ill Broadway,
New York City, members of the
New York-Stock Exchange, on
Ju*y 5
admit John E. Wads-

and

copies
on

Output

in

Total

of

because

of

our

have

we

been

not

<

Avenue, New
16, N. Y. (paper), 50c.

m

^ .r,

A WO Witn Jonn 1V1. rlynil

worth to partnership. Mr. Wads-VV (Special to-the financial chronicle)
worth has been with the firm for
SANTA B A R B A R A, Calif.—som6 timeGeorge Balogh and Robert E.
\ 0n June 30 Leslie G. Schoen- Barry are now with John M.
partnership Flynn and Company,
Gabriel Lane.

matter of record only and is under no

circumstances to be construed

as an

offering oi these

by the Prospectus.

Montreal Transportation Commission
4%% Sinking Fund Debentures, 1956 Issue

up

rapidly
advancing
productivity
and technology. There is too much
slack, and this hurts some much
more than others. Nonetheless, in
my opinion, there is no more jus¬
tification

in

than

now

the

for

$11,500,000

ex¬

to the full potentials
growing labor force and

unreflective

Dated

Due

July 1, 1956

Guaranteed

unconditionally

mid-1953

or

as

to principal, interest and sinking

The City

reckless

the calamity
reasoned
confi¬

of

July 1, 1976

fund retirements by

Montreal

of

pronouncements
mongers.
With

(Canada)

in the future, we should
intelligently, through pri¬
and public economic policies,

dence

strive
vate

make

to

than

this

Today,

future

even

conditions

current

better

augur.

in mid-1953, there are
the economy.

as

Price 98.362% and Accrued Interest

weak spots in

some

These mid-1953 weak spots, grow¬

serious

ing

more

and

automobiles

inventories and

decline,

touched

in

farm income

off

the

1953-54

There

recession.

economic

are

weak spots in the same areas now,

plus

a

decline in residential

struction.

automobiles
outlook
bleak

as

with

But
and

now

not

seem

be obtained in

any

State from

may

legally offer these securities under the laws of such State.

as

in 1953-54. More¬

the major factor in the 1953-

over,

54 recession was the drastic

slash

spending, which in
contrast is now inclining upward.
And basic business investment in
in

may

only such ol the underwriters, including the undersigned, as

to

inventories, the

does

it did

Copies ol the Prospectus

con¬

respect

Federal

plant and equipment, and in new

Shields & company
Lehman brothers

halsey, Stuart & Co. Inc.

Eastman, Dillon & Co.

Savard & hart
Hemphill, noyes & Co.

construction other tean housing, is

continuing
while

spending
new

its

amazing

consumer

reoently

have

advance,

incomes

hornrlower&weeks

♦Excerpts

from

a

reached

talk by Mr. Keyser¬

ling at opening of New Midtown Branch
of Henry Montor Associates, Inc., June
25, 1956.




ladenburg.thalmann&co.

lee hlgginson corporation

and

salomon bros. & hutzler

peaks and are almost certain

June 27,1956.

—

Economic^ Research,

;

panding

1870

v

in

AbramoVitz—National

NEW ISSUE

Output

Trends

—
,

26 Madison

York

,

free

request.

the United States Since

Bureau

securities tot sale, or as an offer to buy, any ot such securities. The offering is made only

Looking ahead, I now believe
that our total output, measured in
uniform prices, will average con¬
siderably higher for the three
years
1957-59 than
during the
three years 1954-56. To be sure,
performance since 1953 has not
been as good as it should have
been, nor is the outlook for per¬
formance immediately in prospect
as good as it ought to be. This is

Institute

Technological

1954-56.

years

of

Machinery

Advancement, 1200 18th Street,
N. 1W.,
Washington 6, D. C.

Admit

in the firm.

appears

Project

Founda¬

Requirements

Defense

and

mage to /\amu

hart will retire from

losses

and

National

.

.

—

Tax

request.

.

Talmaap

Taxes

40—The

Proprietary Manufacturing Know-

_

DETROIT, Mich.—Simon E.
Dunn is engaging in a securities
business from offices in the Griswold Building under the firm
name of S. E. Dunn & Company,
Mr. Dunn was previously with
Carr & Company and B. C. Morton
& Co.
v
7^,^
'

Oswald

—

Columbia

Excise
No.

how

^

—

tion, 30 Rockefeller Plaza, New
York 20, N. Y. (paper), single
copies free—quantity prices on

^orms S. E. Dunn & Co.

risky, and only those capable of
7

.

■

Meaina Avenue-

serious

one.

better

;

-

Burton M. Brown Opens
DALLAS,

Federal
note

mi'".''**

the

business

and

.

absorbing

tive to

and action.

.

business fiom offices,at

1705 Broadxvay.
r»

Competition

University
Press,
2960
Broadway,
New
York 27, N. Y. (cloth), $3.

'*■

engaging m a se¬

be-

greatly influenced by any one
We have stopped bethat even the recessions-of 1949
having like children, and once
and of 1953-54 were mere bagaagain are becoming adult; it is
telles compared with the tradiimportant that this 'trend conwhich

.

S

interest:

Rather, it is because
community and the
public
generally
are
regaining
their perspective on the point that
the

and

Knauth

SCOTTSBLUFF, Neb. —Casper

about

of both par-

t

Business Practices, Trade Position

foolish

be: any

higher, and at best

5%

in-the

less

.

illness

the

be

men

was

m, *

t

tial than

nation's

.

at

average

per

higher,

peak

new

Baumgartner Opens

now appears

output will

least"

not.

was

averaged

1951-53, and it

years

prewar

deemed "too

in

But

to

than

growth
in

be

prone

stability
si

few

next

a

total output for this yeer

event,

post-World
War II Amer-

Keyterliitg

the

rise to

C.

.

fhe President's second bSss'VoToffices atSsan
stock market
d Sv^ss^rmn offices at 2802 San

T1? 7u~ toward the end of the year. In any the American
that
the

lief

Leon

fi

the

?^,rs °f. tlie 1949 magnitude, seems un- two illnesses
Like

earlier

"overpriced," be-

duction and consumption, will be
io*«
higher in 1956 as a whole than in
any
previous
year,
and
much
higher in the years ahead.

the

elsewhere

three very

still

are not

profits and dividends, pro-

cause

(Special to The Financial Chronicle)

quarters,

best

Jn

second

»

the

and

-much

election

the

illne

year

go

in

the

tween

On balance,

?nci°

been

many

is

tivity than the

1951-53.

Illness

political intentions. I hope that
he gets entirely well and runs,

hi

numerous

of

nilis

Appreciable Decline Unlikely
decline this
magnitude, or

march

President Eisenhower's health and

consider-

a

Stock investment, adjusted to capabilities, will continue to be rewarding in* consonance with overall economic developments in the
long run. In these terms, and in
view Of recent corrections, good

Investors

the press carried to mount considerably during the
that "the three years remainder of this year.
r
average

the

will conform with

Presidential

May, 1953

ably higher level of economic ac-

with

despite customary
nrArtirtinnc
predictions. Th« future,
The

alarmist
alarmist

1

the justification for calamity-mongering, expects total output to average considerably higher in
1957-59, than during 1954-56; with 1956 3-5% higher than
last year. Notes cleaning-up of weak spots, along with ex¬
pansionary effects of Federal spending, business investment
in plant and equipment, and non-housing new construction.
Commenting on President's illness, observes public is beginning
to realize American economy is bigger than any individual
or
political party.
In

or
the readjustrates through con-

prosperity,

Mr. Keyserling, denying

my forecast
1954-56 will

stoppage

tract negotiation, interfered for stocks

KEYSERLING*

H

stoppage,

ment of wage

any

Former ly

work

in the steel industry would be un-

fortunate. We hope that this will
be avoided. Put never yet has any

11

tucker, anthony & co.

„

3680 -San

The Commercial and Financial Chronicle
12

(3080)

covering this material were
on
the
manufacturer's

tions

catalog dimensions and provided
yield of 17 discs per sheet. In
reviewing the specifications with
the vendor,
our
purchasing de¬

By J. SINCLAIR ARMSTRONG*

a

To Achieve Cost Economies
•

yield

According to
the Department

level.

healthy

from

ports

is at

a

re-

of

Commerce and the Securities Ex-

Com¬
mission, busi¬
nessmen plan
to
spend
a

toptheir

n g

outlays

1955

by 22%.
A report
the

for

made

Geo. E.

Stringfellow

Uniof

the

by

that consumers
buying plans this

states

This forecast takes into acthe fact that another 10%

count
of

population has moved into

our

$5,000 annual income bracket.

the

Thirty-five

per

units

sumer

are

all con¬

cent of

in the $5,000

now

higher income bracket.
Their
buying interest is high, their con¬
or

incomes

their

and

fidence

greater than last year.
Industry is building
duction facilities at
with

vehicle

pro-

new

record rate,

a

petroleum,

utilities,

public

motor

are

manufacturing,

producers, machinery man¬

metal

chemicals and rail¬
the list.
expenditure is for

ufacturers,
roads

leading

the

all

Not

production, however. The largest
single classification in the Securities and Exchange Commission's
is concerned mainly with

listing

distribution

services.

and

Ex-

penditures this year for banks
bowling alleys,
super
markets,
radio stations, and other facilities
that help get goods and services
to the consumer will be over $10,-

630,000,000.

These more than off-

slack

the

set

automobiles

the

in

sale

the

and

of

new

building

of

homes.

new

Industry spending is

an expres-

sion of confidence that

prosperity
will continue and while big consumer
spending
produces
high
employment* spending for plants
and equipment will provide even
greater employment apportunities
in

thp

futnrp

'

.

,

.1

,

The£t?re means lobs than workrPore
This
higher

ers.

have
the

cost

is

passed

on

how

long,

these

years

and

by higher
you

ask,

passed

rebels.

consumer

member what

several

be

increases

before the

wages

to get help

paid

But

prices.
can

be

to

on

Re-

happened to rubber
ago,

and what hap-

pened to coffee subsequently?
Two

Management

must

obviously

find ways to maintain level prices.

Broadly speaking, there

are

only

^l™aj°r areaS °f S3VingS in in"
(1) Distribution.

area

cutting
—77—

production
JJ

profit

^2) Those of you who represent

SUppjy companies or wholesalers

of your pur¬

cost

find the

materials

chased

for your

75%

runs

constitutes the
to

costs

w

#

„

help

An
address
by Mr. Strinrfellow bethe
National Assn. cf Purchasing
Agents Convention, Cleveland, Ohio.

fore




is

Standardization

or

sales dollar, leav¬

lax

21.9%
the

listed and
listed

pri

v

thus

and

manufactured

are

to

The

i 1

d
and

e g e

market

of

value

your

almost
J. Sinclair Armstrong

8%

is

of

11

exchange
securities. The
a

established

materials. They

uniform qual¬

by standard materials.
horizons

growth to stature of trad¬
the
big
board.; Your
established per¬

timate

ing

on

market is also the
manent

in

adhering to the Federal
laws, the rules of the

Securities

Commission
Act

and

under

the

Securities

the

Exchange Act, and
self-governing rules of the

the

stock

exchanges and the National

Association

People
some

of

are

Securities

Dealers,

careless

more

and

deliberately in violation.

are

So I urge you, guard the reputa¬
of your American Stock Ex¬

■

tion

change.

If your Exchange is used
only for purely speculative activ¬
ity and the public gets hurt, you
will

the

I

adverse

am

reap

action.

sure

public

that

re¬

all

you

proving recognize the need for support¬
of many ing your officials in their efforts

his

ity and lower inventories because
of their availability. Your needs
can
be supplied in almost every
instance

trading

securities

specifications, at lower cost than of
custom-made

in

growing companies. It is a bridge,
and a very vital one, often, be¬
money, tween unlisted status and the ul¬
on

often save
increase his company's
can

ex-

un¬

stocks,

gineering
departments,
starting market you provide is a
the drawing board stage. It is
ground for the securities
here that suggestions made by the

experience,

on

changes

another

based

all

of

trans¬

actions

at

agent,

ulation.

Ex¬

account for

between

purchasing

for

pure spec¬

You

the

should employ.
requires close cooperation
the purchasing and en¬

medium

a

change.

purchasing agent
This

be

Stock

cost which the

of cutting

should

Second, because of this atmos¬
phere,
there
is
an
observable
tendency for people to be more

competition with the giant
;
New
York

the less expensive lacquer.

method

market

investment, not just of

trading area for the stocks

obtain

to

compliance

with

your

American

Stock Exchange rules.
equally certain that you will
all support the Securities and Ex¬
change Commission in our investi¬
gations of manipulation, fraud and
I

am

other

violations,

efforts to

our

as¬

compliance with our rules
companies, large and not
under the Federal securities laws,
so large.
The market you and the
and our efforts to bring malefac¬
regional exchanges provide for
tors in the public security markets
trading in securities may be bet¬
to
book, and that you will not
ter, more liquid and more satis¬
factory for the shares of particu¬ knowingly let the Exchange be¬
come a medium for illegal distri¬
lar companies than listing on the
butions or illegal activity.
big board. The emphasis the Se¬
curities
and
Exchange Commis¬
Importance of Exchanges
sion is placing on the importance
Finally, let me relate the im¬
of
exchanges such as yours is
sure

many

opening- in
electronics, instru¬
expense,
advertising,
shipping, mentation, plastics, chemistry and
automation
are
and 10 cents profit.
building an in¬
shown by the on-the-spot studies portance of the stock exchanges
The
purchasing agent in this creasingly important role for the
in the capital markets to the cap¬
purchasing agent in management. made by Commissioners and staff
Sr°up who saves 1%% of the ^5 Realizing this you will doubtless within the past year of the oper¬ ital markets as a whole. Prices of
cents he spends,
increases com¬
outstanding securities determined
make
the
most
of
your
oppor¬ ation of the American Boston,
pany profits to 11 cents per dol¬
tunities.
Midwest, Philadelphia, Salt Lake, by the buying and selling public
lar of sales, a 10% profit increase.
San
Francisco and Los Angeles in t!he free, open, auction markets
It would take 6%% saving in all
Reflecting upon the tremendous
of
the
stock
exchanges of this
other expenses to equal this sav¬ strides
purchasing agents
have exchanges.
country have an important bear¬
Second, you are doing an im¬
ing and show the 10% profit in¬ made in the past 10 years, I am
ing on prices that may be arrived
confident you will filter out the portant
crease.
volume of the public's at when
corporations go to the
business.
Let
old and adopt new ideas and new stock-transactions
Corporations with aggressive
capital markets to sell new issues
techniques
which
will
return me give you a few brief figures. of securities for the
purpose
of
and alert managements realize
are
the
market
value of
handsome profits to your respec¬ Here
raising new capital. The amounts
their purchases must be analyzed
transactions and the number of
tive
corporations, enhance your
of new capital that will have to
and scrutinized to cut their proown
standing and render an in¬ shares traded on the American be raised
duction costs,
by corporations in the
telligent service to the consumer Stock Exchange in certain earlier
years ahead to sustain the needs
Importance of
years and recently.
public.
of our increasing population, our
"Purchase Analysis"
Dollar Vol.
Shares Sold
Your basic knowledge of busi¬
rising living standard, our dy¬
(millions) (in millions)
Research is now entering into a ness conditions within your, in¬ Year
namic
expanding economy, and
1935
$1,205
85
our
responsibilities for the de¬
purchasing department's function. dustry as well as the economy of
1945
1,728
142
the nation will play an increas¬
fense of our country and the free
There are various terms used to
1,125
110
describe this function, such as ingly important part in your com¬ 1953
world, are far larger, than any¬
1,873
170
pany's future. Yours is a future on 1954
"purchase analysis" or "cost re¬
thing the capital markets have
2,593
T 244
the
duction." Until recently research which
spotlight is focused, 1955
provided in the past. Many bil¬
995
88
which makes it a very bright fu¬ 1956 first 4 mos._
lions of dollars will be needed.
more

ing 15 cents for taxes, rent, sales

new

atomic energy,

_____

depended more on the individual
Purchasing agent than on a progran? of organized research in his
w^ole department. For instance,
on.e.,p®rfon

?

inform himself in a speciallzed field by reading or asking
until

questions

ture if you operate

help

your

efficiently and
show a good

company

profit..

he

ultimately

sa]esman who called on him
the

engineer who specified the
be purchased. The trend
for the entire purchasing de-

jtem
is

to

partment to be adequately trained
an(j

staffed

with

a

view

toward

reducing costs of materials
increasing company profits,
M

t

SDeakers.

speakers

USG
use

thpir
tneir

Boston Branch Office
BOSTON, Mass. — Reynolds &
Co., members of the New York
Stock

branch

Thomas

A.

baby
high

'furnUuJe.C
precision

office

at

have
19

opened

Congress

medkai

New Reynolds Branch

Vnirpwrifpr

Division

for

public

important

interest

which

fice

at

40

Chestnut

Street

under

from

Commission

was

savings of the
American people to American cor¬
of

ity

which
vital

capital

the

markets,

part.

You

Exchange

your part of the job
which the
capital markets must perform if
you conduct your business so that

it merits the continued confidence

which

the

public

has

shown in the past few years.

But

if

investing

anything

done

in

There
work
pose

E.
Thomas Dewey, Jr. and Talbot P.
—

and

San

^Q1S?n VOlCewriier LUVlSlOn tor
making recording dlSCS. Specifica- changes.

Francisco Stock

Ex¬

the

market

destroys that confidence of the in¬

enterprise

will

system

are a

number of factors at

in the markets
grave

markets.

today which

dangers to the capital

First

is

be

the

loser.

M. Crosthwaite

(Special to The Fin*nctal Chponicle)

FRANCISCO, Calif.

in

of the American
will succeed in

Dangers to Capital Markets

SAN

,

the stock exchanges play a

established.

the direction of Robert Eichler.

Two With Dean Witter

enormous

the

of pub¬
vesting public, the American free
speculation in the stock market

place in the last great era

RIDGEWOOD, N. J.—Reynolds in the 1920's and early 1930's be¬
Co. have opened a branch of¬
fore the Securities and Exchange

name a few.
Kendall, Jr. are now with Dean
Our purchasing department ini- Witter &
Co.,
45
Montgomery
tiated research to reduce the high
Street, members of the New York
prison

Interest

affects you with an

lic's business

lic

&

voicewriters, to

cost of sheet plastic used by our

Public

Third, this volume of the pub¬

St.

amounts

Stock

Exchange.
The

of these

The channeling

of porations will be the responsibil¬

must jealously protect against
the abuses of the public that took

electronic

aviation

two-thirds

shares, of all se¬
curities traded on all exchanges
other than the New York Stock
of

you

own

Edison,

almost

and

a

and

Inc°rpopted represents an un?nVimS /, 5 interests, I beV*
w°Ur- e*pei"ie"ce
make

Exchange

under the management of. Edward
S. Munro.

firms to illustrate their points. In¬
as

than

number

the

Reynolds & Co. Opens

1955, and to date
volume represents
half
of the market

year

this

1956,

value,

knew as much if not more than
or

the

For
in

more

f, .department

instruments,
storage and primary batteries and

of possible savings in

cost

offer advantages of

equipment,

Production.

Wise purchasing

major

10%

the

increase.

gases,

dustry:

(2)

and show

saving

in

are

a

standard materials. Such materials

labor to equal this

must realize the im¬

you

gallon
covered
the surface
at a
per, square foot than

but
twice

profits. Induce the engineer to use

saving in

may

priced,
nearly

dollar of sales,

asmuch

Ways to Economies

prof¬

company

First,

portance to the capital markets
of exchanges such as yours. You

manufacturer was
satisfied for years with a lacquer
as specified by. its engineering de¬
partment. It cost less than com¬
petitive makes; a gallon covered
250 square feet. Through research
the purchasing department found
a
better lacquer.
It was higher

lower

50 cents of your sales

increases

buying."

profit increase. Assuming
cost is 25% it would take

10%

4%

have extensive
year.

a

labor

versity
Michigan

as

11 cents per

its to

Board

serve

high

spends,

Re¬

Federal

their sales:

dollar, leaving 40 cents for labor,
taxes, rent, sales expense, adver¬
tising, packaging, shipping, and
10 cents profit.
The
purchasing
agent
who
saves
2%
of each 50 cents he

this year,

i

10%

chased materials and services runs
as

great dangers to capital markets.

Buying"

For example: a

find

may

Urges acceptance of responsibilities to forestall factors posing

the lowest

of

share of the public's stock-transaction business.

important

|

buying is often the reverse
initial price policy.

Value

manufacturing companies
the cost of your pur¬

large

plants and
eq ui p m ent
p

on

"Value

advantage of "value

Let us consider

be making

of

as

growth to Big Board trading. Cites statistics showing its

mate

.

an

agent with
research organization can take

a

(1) Those of you who represent

new

on

assumed to

eliminating

time

of American Exchange

proving ground, and bridge between unlisted status and ulti-

alert purchasing

An

the importance of wise purchasing in two typical business con¬
profit

$35

of

record

stay in business.

SEC chief emphasizes importance

17.6%,

material

raw

same

Advantages

make a profit and

company

cerns

change

billion

your

that sheets
size would
thus cut the

-

(3) filter out old and adopt new ideas and
techniques which will return handsome profits.
barometer

and

operation for the vendor.

and

business

discs

this

the

at

economies of standardi¬

advantage of "value buying" and the
zation;

20
of

cost

Mr.
Stringfellow calls attention to sizable cost cutting opportunities present in purchasing — a major area of production—
methods, providing wise purchasing, properly analyzed and
scrutinized, as part of a program of organized research, is
pursued. Recommends purchasing departments should: (1)
be trained and staffed to reduce purchasing costs; (2) take
rebellion against price increases,

consumer

overcome

Chairman, Securities and Exchange Commission

not trimmed to catalog

A. Edison, Inc.

Orange, N. J.

West

discovered

partment

STRINGFELLOW*

E.

GEORGE

By

*

Senior Vice-President, Thomas

„

The

Thursday, June 28, 1956

Role of the Regional Exchange

based

The "New Look" in Purchasing

To

...

.v..

the

atmosphere

Opens

NEW

ORLEANS, La.—Morgan
Crosthwaite is engaging in a se¬
curities business from offices at
722 St. Louis Street.

of

speculation, brought about by
the very great economic activity
of the past few years.
A stock
*A
nual

by Mr. Armstrong at the An¬
Outing of the American Stock Ex¬
talk

change,
Sunningdale
Country
Scarsdale, N. Y., June 19, 1956.

Club,

New Walston Branch
DENVER,

Colo.

—

Walston

&

Inc.' have opened a branch
in the Mile High Center under
the direction of Norman Davis.
Co.,

Volume 133

Number 5546... The Commercial and Financial Chronicle

parts of the economy. Beyond
this,
however,
most
top-flight

farm

executives of life insurance com¬
panies
realize
that
there
are
sometimes social responsibility

a

ous

Life Insurance Investments
And the

Mortgage Market

JAMES

By

Investment

does

economist

change in

severe

..

though new non-farm
by life companies declined slightly in the

commitments made

this

first quarter, compared to

year,

even

1955. Dr. O'Leary praises the Fed¬

Reserve; expects slowing down and possible easing of

eral

directly from issuers due to attractive yield compared to FHAnotes increased dependence upon cash flow,
which amounts to $10-12 billion per year, due to decreased

At

the

end

of

availability of assets to sell to meet mortgages; the heavy
demand for funds from business and industry; and heavy

Explains investment flow
by desire to maximize yield and other factors.

held

try

total

of

discuss

to

three

questions: (1) What are the
basic forces determining the in¬

vestments

panies?

life

of

insurance

com¬

What is the trend in
investments in mort¬

(2)

life company

and
(3) How do policy
actions by the Federal Govern¬
ment affect, life company mort¬

May I

pected by so many different users

capital funds to meet and fully

of

satisfy their demands.

investments?
The largest
part of what I have to say will
deal with this final question.

What

Insurance

Life

First, what are the forces deter¬
mining life insurance company in¬
The.

vestments?

this

to

answer

question

.

is

fundamental
to

under-

an

t

s

ding of

a n

our

activity in

the

mortgage

market.
At the pres¬

time

ent

assets

in

the

of

life

surance

companies

are

increasing at a
rate of nearly
$6 billion each

This

year.
Dr. James J.

figure

O'Leary

total
ance

not, of

volume

appreciate the
answer
to this question.
All life
insurance companies, whether

the

each

bond

because

year

repay¬

corporate securities,

maturities, and other similar

items.

Studies

which

have

we

made indicate that the gross flow

of

funds

have

which

life

available

companies

for

investment

each year now amount to $10-$12
billion.
This is a staggering fig¬

At

ure..

the

the

of

measure

bution

which

panies

now

time

same

it

is

a

contri¬

enormous

life

insurance

com¬

make to the economic

growth and higher living stand¬
ards
enjoyed
by the American

through

people

the

of life insurance

sumption

reinvestment

insurance companies are a

the

wide

variety

of

investment

outlets into which their funds

I

directed.

find

are

that

mortgage
bankers frequently fail to appre¬

ciate that life insurance companies
not

only have the option to invest

funds in

be

mortgages, whether they

Government-insured

or

guar¬

anteed,

conventional, or within
the conventional category whether
they be commercial or industrial,
but they are also one of the most

important

alert group of
compete fiercely with

who

other

the

achieve

to

providers

of

capital

funds to business and

men

each

record

best

yields on investments.
This
competition exists not only be¬
tween companies but also within
of

between the bond
departments. It is
surprising, therefore, that in a
period of changing interest rates,
yield differentials between vari¬
ous
' types
of
investments
are
watchbd carefully and the flow of
funds is altered accordingly.

companies
and

assets.

Beyond the impulse of yield,
however, is the fact that most life
insurance
companies
are
con¬
vinced of the desirability of main¬
In

the

sification

is

individual
ideas

differ

name

the

is

investing institution to
edge

which

has

the

invest its funds in

impor¬

more

There

so

no

my

other

knowl¬

latitude
many

to

ways.

address

Mortgage
Meeting,
25,

by Dr. O'Leary before the
Bankers Association of Florida

Ponte

Vedra

Beach,

1956.




Fla.,

May

as

point

Government

Policy

Mortgage Investments?

were

The

were

busi-

0

1946-1955, the life insurance
made about 29%.
This

for

would

billion

change

much for figures. I

to

that

portfolios the life insurance

business has
and

more

come

to realize

more

the great importance

of

Perhaps the best

how

way

Government

developments in, the Spring of
1953 as they affected the mortgage

market_
t0

jjje

the

important

in the nature of

our

are

some

na¬

part

of

most

companies

Investments

in

there was a great deal of
in
Washington
and
in
for another round of inflationary

power

agreement

elsewhere that the country was

The

boom.

in

Federal

commercial

to

efl'ort

Reserve

tightening

of

process

bank

reserves

restrain

was

up

in

business

on
an

"ex-

to

Perhaps the most important aspect of this is a recogtern strong.

nition that to be strong a corres-

further

pondent organization must have a
fairly regular flow of funds on
which it can depend. This brings
us
then to the question of how
Government
policy
affects
the

figures which I think you will
interesting and reassuring.

find

the life insurance
made $6 billion non

year

companies

particular attention

the mortgage market. At the time
the new Administration came into

keep their loan correspondent sys-

an

wfth

jnsurance

having a top-notch organization to uberance." The big new developoriginate and service the mort- .ment, however, was the program
gages
which they hold. I have undertaken by the new Treasury
detected an ever greater desire on to sell long-term bonds.

witness

•-

end. Here

Last

remarkable

pany

economy, I do not believe
that this trend is anywhere nearly
an

a

ever,

tional

at

so

like

is

30% of total assets. Un¬

or

we

me

say to you, howalong with this trend
toward
a
larger percentage of
mortgages in life insurance com-

relationship de¬
clined steadily until 1946, at which
time nonfarm mortgage holdings
of life companies were about $6.5
billion or just short of 15% of
total assets. The story since 1946
is a familiar one to you, I am sure,
in that by the end of 1955 life
company • holdings
of
nonfarm
mortgages amounted to over $27
less

to

record. But

This

assets.

com-

panies

percent

a

This is not

an

Long-Terms

Effect of

Early in February, 1953, Treasu.ry officials consulted with the life
insurance business and made it
clear that they
SOme

would like to sell

long-term bonds to nonbank
such

investors

as

life

insurance

.

Continued on page Zy

offer oj these Securities for sale. The offer is made only by the Prospectus.

altered

are

'

NEW ISSUES

over

In

;V, '

:.

••

V

•;
M>Ci

■% f '*'

Lake Ontario Portland Cement

Company Limited

(Incorporated under the laws of Canada)

Debentures due June 30,1971

$6,497,400 (Canadian)

232,050 5% Convertible Preferred Shares
(Cumulative only from July 1, 1958)
Par Value $10 (Canadian)

Per Share

'

696,150 Common Shares
Par Value $1

(Canadian) Per Share

only in the ratio of $700 (Canadian) principal
of Debentures, 25 Convertible Preferred Shares
and 75 Common Shares, and integral multiples of such

Offered

amount

principal

time, but nonetheless diversifica¬
tion is an important consideration.

amount

and numbers of shares respectively.

particular, during the past dec¬
many
life companies have

ade

their

changed

thinking

ably about the
their

of

Still
mind

proper

in

assets

that

is

panies

Price in United States Dollars

consider¬
proportion

mortgages

and

$687.95 Per $700 (Canadian) principal amount Debentures

securities.

another

force

life

to

keep

insurance

I

in

com¬

$10.18 Per Convertible Preferred Share

truly long-term invest¬

are

(plus accrued interest)

This is natural in view of the

ors.

character of

long-run

that

fore,
nies

life

$1.02 Per Common Share

insur¬

This means, there¬

contracts.

ance

life

insurance

compa¬

interested in
acquiring investments which will
provide an attractive rate of re¬
turn over a period of time.
They
basically

are

much

are

investors

most

interested

less

in

Copies of the Prospectus,

as

filed under the Companies /1ct of Canada, will

promptly upon request by such of the underwriters, including
undersigned, as may lawfully offer these securities in such State.

be furnished

than

capital

aspects of the investment

the

gains

process.

Finally, I would be remiss not
to

indicate

that

insurance

of

one

bility

on

funds

sense

a

moti¬

the

of

Kidder, Peabody & Co.

invest¬

of social responsi¬

Simultaneously with the offering in the United States, as set forth in the Prospectus,
a
portion of the Debentures, Convertible Preferred Shares and ^Common Shares are
being offered for sale in Canada by a group of Canadian Underwriters including

the part of life insurance
In an economy such

companies.
'as

ours,

prevail
mere

in
for

which free markets
the most part, the

fact that life insurance

panies
♦An

loans.

'°a"s^Of the total of $56.8 billion
Ju aV,d, A m0.rt«?,ge l0an!
made by all lenders m the period

life

1929

year"

and these
a period of

Federal,

outlets.

the

between

as

companies,

ment is

tant

of

high

pany
there
is
some
accepted
standard, at any given point of
time, of the desirable goal that the
company should have for its mort¬
gage holdings in the different cat¬
egories. There is likewise a simi¬
lar goal for the various types of
securities held by the company.
Ideas on what the proper diver¬

the flow

ments, to

billion

$2

Does

Affect Life Insurance Company

com¬

every

into

govern¬

about

residential

remaining $1.2 billion

of nonfarm

The

mortgages

diversification of

proper

a

life

local

and

uninsured

How

as

vating forces behind

and

nonfarm

mortgage

industry, to
public utilities, to railroads, to the
state

company

not

Perhaps the unique characteris¬
tic of the life insurance companies
in their investment operation is

highly

intelligent,

Government

savings.

investment

undue

of

as¬

The financial officers of life

risk1.

taining

ments of mortgages, sinking fund
on

their investments without the

their investments.

insur¬

it does not take account of

payments

mutual, bend every effort
realize the highest yield on
or

reflect tne

funds

companies have available for

investment

you

life

course,

of

is

increase

net

and does

that

sure

am

to

Investments

Company

the basic forces deter¬

are

mining where these funds flow? I

stock
Forces Determining

The

Investment Yield

Maximize

gages?

gage

also, there is no other

say

investing institution which is ex¬

1929,

billion

$5.2

represented
like

would

main

Government-insured

were

guaranteed residential mortgage

loans

mortgages which represented 30%

backlog of forward commitments.

I

billion

insurance companies of the coun¬

determined

insurance

mortgage investments,

SST,?ieS

VA mortgages;

is

life

-

refers to tendency to buy high gradq bonds

credit tightening;

of

to outline
policy affects
years,
for example, \ when life ness
and
industrial
mortgage life insurance company' mortgage
tompanies purchased Government loans. During the decade 1946- investments is to
analyze three
securities because they were con¬ 1955 inclusive, the life insurance
periods in the history of the raortvinced it was the .right thing to
companies made $38.1. billion of gage market and the capital ■mardo even though the yields were nonfarm
mortgage loans. A little ket as a whole. The three periods
unattractive.
over $9 billion of this total, were
whichT have chosen are, first, the
FHA loans, $7.7 billion were VA
tight money situation in the first
Trends in Life Insurance
loans and $21.4 billion were "con- six months of
1953; second, the
Investments and Mortgages
ventional."
In
the
conventional period of ease, or relative ease
Let
me
turn
now
to a
brief
category about 60%
were
resi- from -the late Summerof 1953
discussion of trends in life insur¬ dential loans.
Throughout the 10- throughout most of 1955;; and,
ance company investments in the
year
period, therefore, the life third, the current situation.
mortgage field. From your point
7® A aP.p™xim.a„tely
First, I would like to give you
of view, I think that these trends
$29 billion of residential mortgage
briefly my own conception of the
should be most encouraging.,

-

funds availability, including FHA-

over-all residential mortgage
VA mortgage money,

anticipate

not

'

».

-

flow

funds into

single

or

questions which cannot be an¬
solely by market forces.
There have been times in recent

Director of Investment Research, Life Insurance

Association of America

mortgage loans, the largest
they have ever made in
year. Of this total, $2.8

amount

swered

O'LEARY*

J.

13

(3081)

direct

points

of

that

they

their

funds

com¬

to

Nesbitt, Thomson and Company, Limited

the

highest
are

demands for

yield indicates
responsive to the

capital from the vari¬

June

28,1956.

14

The Commercial and Financial Chronicle

(3082)

Investment

gloom and doom on the other. The
particular crossroads which we
now face in investment policy of¬
fers a choice between tne judg¬

Policy Implications

While at the Ciossroads

or

the

University

liquidation

period;

may

(2)

and

business

resurging

consumer

by the year's turn, and might

appear

the

renewal of the upward

drift in rates, though, in the process,
market will be less tight; (3) this, then, should make

money

it worthwhile to

own

for

orderly accumulation of

aging is still sound.
term investment

policy based

tuating interest rates

aver¬

assumption of widely fluc¬

upon

fluctuating economic growth and
maneuverable portfolio and

similar

institutions, we

our

priate

allusion

conversion

taking

basis

of

cific

sets

facts

the

to

supposed

business

of

to

men

of

without
much

view,

too

regard

for

really
long-term

policy consid¬
erations.

d

The

a new era

overly

therefore,

be¬

it

be

can

t i c,

cause

the dynamic
entering into
of uninterrupted growth

American

a m a

r

as

This is

modern

puter

make

basic, single choice
policy decision."

jor

a

On

a

ever, i

moment's

think

cannot

we

alleged
cushioning

or ma¬

will agree that

you

formulating
to

answer

a

series

a

closely related questions.

of

For in¬

stance, is this the time to accu¬
mulate large holdings of
Treasury
3s against the day when
they will
be

quoted

mium
call

at

and

will

substantial

a

pre¬

their

immunity from
important?
Should

be

dencies
with

reflection, how¬

escape

consistent

research

the
Roger F. Murray

to

approach,

stabilizers

built-in

declining

any

ten¬

develop, and
dynamic forces

may

these

of

With

at work in the direction of

tions?

the

Should

thrift

common

institu¬

be

pushed up¬
credit policy will have

and

to be restrictive most of the time.
If

stocks

approached with caution?

Is
the time to be less active in

be

this
con¬

tinuing the competitive race by
emphasizing higher dividend rates
tc depositors? An affirmative an¬

of

the

initial

series

for the

not

In

of

questions:

we

of

for

able

slackening
picture.

in

gathered jointly by the Securities
and
the

the
vey

the

Commission

and
Department of Commerce and
important McGraw-Hill sur¬
of expectations, we still lack
ability to make really reliable
Exchange

of the

level of business

Taking the statistics
at
face
value,
we

trends

recognize

that

there

ap¬

only of growth
capital investment.

to be signs

pear

in the level of

no

about
lin¬
loans; common

important

tate to

move aggressively on raid¬
ing dividend rates to depositors.

capital expenditure boom will be

enough to carry us through

questions re¬
an
approach to investment
policy considerations which many
people would call too orthodox

the

at all consistent in

dation of inventories.

and

stantially

flects

old-fashioned.

This response

investment policy,

applying it to
to sub¬
conclusions

comes

opposite

to imply that we have not
necessarily found the formula for

from those reached by the ortho¬
dox and old-fashioned observer of

economic

the

seems

stability

and

steady,

continuous growth.
Economic

Picture

In contrast, you have all

great

sions
the

length

about

the

dynamic

These

on

heard

many

occa¬

potentialities

of

American

expositions

economy.
focus on the

revolutionary effects of techno¬
logical developments in industry,
the explosive pace of population
changes, the stimulus to capital
investment

lend

to

of

wage

advance

rates

more

which

rapidly

than

productivity, and the basic¬
ally inflationary pressures gener¬
ated

by

our

efforts

to

sustain

a

rising standard of living while
carrying a heavy national defense
program.

factors
*An

If

one

adds all of these

together, with the

address

by

Dean

appro¬

Murray

at

the

Ssviru;* Banks' Association Annual Confiance, Spring Lake, N. J., June 23, 195b.




conclusion

least

a

different

we

record

of

the

modest

which occurred in

1953-54,
ments

when

were

in

are

even

corrections

readjust¬

taken in stride.

It

is

undeniable that these modest in¬

terruptions in the growth of
nomic activity represent a

eco¬

very

the types of major collapses which
have typically followed other
pe¬

of

wartime

inflation.

In

looking to the future, moreover,
we cannot
argue against the fact
of
a
major shift in population
trends
mate

nor

should

we

the

underesti¬

great vitality of
American business system.

the

The

issue, however, is not be¬
tween the extreme
points of view
of the wild-eyed
optimist on the
one

hand

and

of

the

plausibly
conclude,
that we have already

may

seen

most

the

of

softness

in

the

picture and that with the
passage of time we should expect
a resumption of more active con¬
spending on durable goods.
Frankly, I find it difficult to de¬
velop much conviction on this
sumer

prophet of

in-

and the problem

clear. Their

was

not

building
the

be

increased

In

it

for,

market,
the

that

has

produced for them the highest in-

has enabled

and

come,

ment of

the

pay-

fairly liberal dividends to

their depositors.
.

0

t?

i

u

*

The Savings Banks began to acquire this type of investment in

•

quantity, both from the cash available from increasing deposits, and
cash

low

realized

interest

quick to

this

demand,

for

sale

mortgage market

feel the impact of
and interest rates

forced down to

were

the

yield government

The

was

from

as

low

3%

as

prime loans. By 1950 the assets
were almost $13 bil-

of the banks

lion, and the investment in mortgages

had increased to about 40%,

much lower

still

than

considered

desirable.

point although on balance it seems
likely that we shall be able to

expan-

gs

a

*Ihon,

$

3°b Perf°rmeck
In dollars, New York State savings banks at the close of 1955
had almost $8% billion more in
mortgages than they had ten years

-

earlier. To achieve this increase
bad ?
5 ^SJ5?t
10
*be period, 3b°ut
billion, or
3

3

m(?re.
gain m

holdings, the difference is
accounted for by payoffs and
amortization received.
.

.

...

.

,u

,

Another thing of which the
savings banks are justly proud is
the
J.
y are
I
•

source
of
mortgage capital in Now Y°r^
State, accounting for 54% of total
mortgages beld by the major fi-

odds,

the

primary

Pan^13} institutions on properties
Savings

located within the state.

a*j£ loan associations account for
insuraI?cf companies
15% and commercial banks 14/0<
,

So much for the events of the
They indicate the
volume of funds invested
in mortgages during the decade
bu^ the interesting thing is the

last ten years.

large

Geographical Expansion of
Mortgages

and stim¬

result of this

r

traditionally,

investment

as a

should like to give you just a fewfigures to indicate the magnitude

for the banks to turn to the mort-

is

the

for

which the savings banks system
can 1v^e1.1
3 proud. If I may,

natural

was

funds

le
which $11 billion or 61% were
i in n}ortga,es, and of

raised, and if
accomplished quick-

this situation

local

105 1
i*
f
?
assets o
J?3"!!? w+t5e+ m?rf

much the better.

so

time funds

same

?

of

rate

At the

sufficient

could be

that could be

ly,

the

position with other forms

?^°erest to°learnethatWon DecS 31*

or

that

so

order to
competitive

in

furnished various sections of

Partly

improved.
This meant that earnings had to
dividends

earning
necessary

purpose,

facing the banks
competitive posi-

maintained

be

and

country which badly needed
housing and in which there were

tion with other forms of thrift had
to

yields,

them to im-

enable

the

de-

over

a

0f thrift.
were

and

securities.

Purchases
We

place

desirable

their

dividend

finally of the war,
when every available dollar was
put into government bonds to
help finance the war effort.
Dividends
paid
by
the
banks
had shrunk to lVz% per annum,

of

Renewed Consumer Durable

taken

had

from

work down inventories

pleasant and gratifying contrast to

riods

and

period of uncertainty
also through a modest liqui¬

business

era,

1948-49 and in

rolling

current

therefore,

scene.

that

though it may not be completely
new, is strongly supported by the

Summarized

at

economic

same

The
at

Optimistic

tural result of the limited

this

firm

of

field

opened to the sav-

larg^ amount of low risk

maintain

had

the

a

at

pr0Ve

cline in this percentage was a na-

gage

adjustments,

no

national basis in

new

a

was

which would

invested

but

1954

were

secure

mort-assets

mortgages,

m

Furthermore, the record of recent
years appears to indicate a greater
degree of stability in
business
capital outlays. In the 1949 and

The true advocate of the dynamic
American economy credo, if he is

to this series of

swer

(

statistics

useful

the

of

Thus

mture.

years

been

Michalis

G.

the period,

have

now

we

FHA insured

on

a

pUrchase VA guaranteed mortanother act of the legis-

vestment

Just

assets

that

Although
benefit

prevent any real
the total business

to

goods

t0

before,
in
1930, 62% of

1953.'

dur¬

producers'

in

fif teen

of

market

on

gages by

62%

invested

29%

inventory, has cre¬
sufficiently strong tone to

a

the

of

gages.

However, the rising rate of busi¬
ness investment, including the ac¬
ated

was

1950j later in 1951 being permitted

billion,

.

legislation

k* &°vernment ings banks in which they could
and

probably be in a period
adjustment such as that which

cumulation

mortgages

bands,

would

began in the latter part of

assets

was

foundation for the belief that the

hold

+W to ma^e l°ans

which

ot

necessary

passed, and the banks first began

q +
State

m.ne

fact, if it were

risks;

hurry

mortgage

up

stocks

unattractive;

are

no

The

World

aiv

high level of business
and equipment,

and management should not hesi¬

ing

3s

is

and

v
York

soft

the
declines
greater than in the gen¬
eral range of industrial produc¬
tion.
There seems to be a good

there

depression

outlays for plant

and

will

long

de¬

enough

clearly

are

is mixed.

should

to

the

was

observation that the business out¬

terest

rates

April

the

existing mortgage market would
be completely overwhelmed,

back to 1945, when the
just emerging from

you

country

spots in the economy to justify the
look

stitutions with the result that in¬

Treasury

into

take

had

There

investment.

through the major thrift in-?

of

funds

After

ing the recent recovery.

funds

one is convinced by this line
reasoning, he must come up
with distinctly negative answers

pace

accelerated

capital

future?

perspective I shall

Savings Banks

forecasts

of mortgage lending be
in
anticipation
that
the supply of loans will be inade¬
quate relative to the heavy flow

the

the past.
To get a good

cline, all of us are naturally in a
skeptical frame of mind regard¬

growth,
we can
contemplate a high spend¬
ing economy which is perpetually
bursting at the seams.
Presum¬
ably, the insistent demand for
capital will outrun the flow of

ward

of

forerunner

com¬

laboratory.

which

all

fresh

a

persua¬

stimulating to the
as the latest indus¬

imagination
trial

pressure

near

as

idea

being under

very

the electronic

as

and

corporates the
our

of

economy

presented

sively.

in¬

of

term point of
look forward with

can

picture

My
may

title
sound

longer

a

one

anticipation to the dynamic
'60s in which the housing of our
rapidly expanding population and
me
supplying of related services
will
place tremendous demands
upon the capital markets and the
savings flow.

and

the

the

on

pressures

high mortgage ratio will depend
whether deposits increase as rapidly in the future as in

of

seeing the February rally in the
merely

keen

spe¬

Michalis believes continued

rates? What

recurrence

a

a

upon

bond market turn out to be

normally think of making a great
individual decisions on the

many

long-

on

investments?

finished the 1955-56 pe¬

we

market in

of split dividends for thrift

the
In the management of the earn¬

rates

the chances of

are

depositors.
ing assets of

the prospects
six months or

and

Credits insured mortgages

national basis for increasing mortgage

portfolio ratio and
extending mortgage market beyond the boundaries of local
legal market. In viewing mortgage-extension dependence upon
deposit increase, payoffs, and other increases in assets, Mr.
on

Outlook

riod of rising interest

Sees need for liquid,

progress.

use

loans

Have

short-time periods, and irregular

over

are

next

interest

for

term

supporting long-

reasons

the

during
more

stocks for dollar

common

Advances five

then,

What,

become committed far ahead in mortgages; and (4) case

maintenance of constant caution."

outlook.

Near-Term

so

is

first

consider

us

near-term
The

Treasury bills and certificates, and

some

not

Let

possibility of further adjustments in store but finds "there
much underlying strength in the current situation that it
difficult to foresee any course for excessive fear—only the

is

management

portfolio

telligent

the basis of relatively

and

are

decisions.

a

cause

anticipates business improvement

production, plant expansion
investment, employment and G. N. P. Considers the soft spots

must face up

we

Chairman

little change shown in industrial

present is no exception and
to this question if
to arrive at reasonably in¬

The

(1) capital boom will be firm enough

through the current uncertainty and modest inventory

Bank

toward the latter part of the year on

tight money, we
have had the problem of trying to
judge its duration and severity.

credo" and the gloom and doom prophet, and offers

spending

Seamen's

During each period of

we

to carry

Chairman, The Seamen's Bank for Savings

comparatively

presented by the "true advocate of the dynamic American

Conditions]

MICHALIS*

G.

President, Savings Bank Association of New York State

practically all

expect

of the time.

Well-known investment analyst assesses the economic picture

economy

a

should

we

CLARENCE

By

1953, and April, 1956,
pattern of rates which

June,

have set

City

Consultant, Bankers Trust Co., New York

these short-term views:

And General Business

inevitably face ex¬

we

periods

easy money

Associate Dean of the Graduate School of Business,
Columbia

Ontloc k for Mortgage Lending

of slackness and
in the capital markets
the conviction that periods like

tended

ROGER F. MURRAY*

By

that

ment

Thursday, June 28, 1956

...

source

of

those

funds.

The

fact

that the bond portfolio including
various types of
spending before the end of the banks were far too limited in governments,
a
dangerous
situation, bonds, and other assets increased
year.
In the process, of course, supply,
there will undoubtedly be a less since it must inevitably lead to a by half a billion dollars during
urgbnt demand for credit and for reduction of standards, and a low- this time, indicating that the funds
investment money than has been
ering of quality in this particular did
not ultimately come from
ulate

active

more

the case during

the past 12 months

If this is

or more.

a

vdlid assump¬

tion, we might expect relative sta¬
bility in the bond market and in
the level of mortgage yields for
another

still

few

the

be

however,

months.

There

distinct

The mortgages available to

consumer

type of asset in the portfolios of
,

the

possibility,

on

page

40

was

obvious

beyond the boundaries of

local

legal

market

'heft ^sets, although bonds un-

doubtedly were switched from time
to
^me
for temporary requireto ments. The gain was financed en,

that

or

the

tirely by the increase in deposits
a n ^

shows

.

•From
before

Continued

It

activities would have

lending

the

..

y.

,

banks.

extend

will

that tight money pres-

the

tion,

the

New

an

address

by

Mr.

Michalis

New Yrrk State Title

York City, June

13,

Assoc^ia-

1956.

that

it

earnings,
was

made

which

possible

Only by the excellent State of the
rnntirniorl

rrn

nrine

41

LOnUTlUCd OU page <±L

Volume 183

Number 5546

The Commercial and Financial Chronicle

...

(3083)

15

'/

Sheraton Corporation of America

became

attractive

so

that

bonds sell today at 280 bid!

those

Hear! Hear!

Prob¬

ably the highest priced municipal
in America!
(Fact is this
hybrid financing could catch on,
in a big way, with industry-eager

bond

—20,000 Rooms Over the Fee
By

IRA

U.

COBLEIGH

look

current

the

at

largest hotel chain

in the world;
gleaning dividends from hospital-

Time

when

was

the

main

(and

family

owned

hostelry,

replete

with
in

Seelbach in Louisville, Ky.
(5l>0 rooms;; and brings tne Sher¬
aton total up
to 54 hotels, and
24,360 rooms.
That roughly paints

lobby,
languid, but
nosey, desk

ton

clerks

to

ly

scarce¬

ani¬

more

mated

than

the

potted
palms
that

featured

the

decor, seedy
carpeting,

shuffling bell
hops, and
cable

pull

-

elevators.
Ira

U.

Cobieign

those days are

forever

gone

in

all

but

the

urban

our

But

sleepier bayous of

civilization.

Although
85% of our 15,000 hotels are still
independently owned, the same
streamlining you
will
note
in
shopping districts, office buildings
and

supermarkets

you

picture

don't
is

snap

hotels, with the modern

set

by

smartly

managed

Sheraton

as

arid most famous hostelries in the

United States and Canada.
Back in 1937
trusts

ment

real

joined in

estate

the 200

purchases,

tion

for

including

Stonehaven Hotel in

room

Springfield, Mass.
acquisition

series of

a

This first hotel

the

set

or

from

hotel

every,

it.

Hotels

future

direc¬

the

enterprise; and the
in due course, merged
Sheraton
Corporation
of

plus

it has done both.

year

recent years,

of

60c cash divi¬

stantial

sold the Bancroft in

its

to

fiscal

discount

Corporation

Under our present
progres¬
sive income tax structure,
prosperity automatically
raises effective tax rates to an ultimate

a num¬

point of
stifling opportunities for private spending and sav¬
ing. Thus renewed and sustained prosperity within

Earnings
capital gains

$1.28

from"

much

has

a

stable peace-time
economy needs renewed and
sustained attention to the revenue laws. The 1954
tax revisions
provided an

a

sub¬

indicated

so

been

per

ended

year

The stock sells at

value—so

asset

in

on

amounted
for

endurance of taxation.

dividends.

stock

(which

any

It has,

u*.

now

in

depend somewhat

regards a sound
at a satisfactory

price, or sell
profit. In the course of almost

E.

1946, and there have been
ber

share

it

a

S.

stock, payable
Aug. 1, 1956. Dividends have been
regularly paid on common since

4-30-55);

what

2%

Y.

that the

buying

example of what

in

structive and

stock.

own

sold the Ford Hotel

to)

which

stood

its

on

(Toron¬
books

competent not only in smart

action.

at

such

The Sheraton basic formula for

an

on

without

taking

interest;

into

a

of fact, there has, since
middle '30s been a virtually

I.

'

(Special to The Financial Chronicle)

SAN

F.

As

matter

.With FIF Management

>

,

account

possible appreciation in value.

price of

well

located

main¬

and

du Pont Admits

JOSE, Calif. —Lola

Turner and Robert R. Miller,

L.

now

Francis I. du Pont & Co., 1 Wall

has

enabled

Sheraton

April 1, 1956 that
book value ($158 million), understated by some $65 million, the
on

market

trusts were,

total

into

assets.

value

15 will admit John
Cluett to limited partnership.

P.

Sheraton

of

By virtue of this sizeable

America. In the words of its Pres¬

appreciation

ident,

ment

business

Miller

ahead

lily.

was

in

with

San

Jose.

Mr.

York

&

members

Staff

Co., 235 Montgomery St,
of

the

San

FrancistJ

stock Exchange.

Shelley, Roberts

With T. Nelson O'Rourko
f

:

Treves & Co. Admits

to

(Special to The Financial Chronicle)

SAN FRANCISCO, Calif.
George A. Stevenson is now with,

& Co.

to

deliver,
quite consistently, earnings from
capital gains to its stockholders.
On
this
point the management
estimated

July

on

move

is to build surplus."

York Adds

|r

associated with FIF Management
the
Street, New York City, members Corporation.
Miss Turner previuninterrupted rising trend in the of the New York Stock Exchange, ously conducted her own invest,

to

power

.

and

The way to start

left for later

was

We shall not attempt to gild the

consistently from
should- earn
between
10%
and both regular operations, and capi12% on the cost of the investment tal gains, as in SHR.
depreciation

can

But the pressing prob¬

Preparations should be made

this front.

con¬

—First National City Bank."

ordered program to create

earning

A hotel

legislation

revenue

lem of income tax rate reform

mer¬

chandising
and
operating
effi¬
$600,000, for $3,200,000. It is, right ciency, but in shrewd purchase
now, building new hotels in Dallas and sale of its real property.
In
and Philadelphia.
; *
few industrial shares do you find
purchase is quite simple.

imaginative
stimulate enterprise.

do tb

Worcester, the Sheraton-Daytona ?
The management at Sheraton is
at Daytona Beach, Fla.; and last
brisk, effective, and has proved
year

Two With E. H. Hansen

(Special to The Financial Chronicle)

DAYTONA BEACH, Fla.—Thoi.

'

James G. Nuland will become

(Special to The Financial Chronicle)

a

N.

0'Rour.ke, Jr.

partner in Treves & Co., 40 Wall
WHJITTIER, Calif.—Cleo C.
Street, New York City, members Johnston and Lola B. Roche are
of the New York Stock

bers

has

joined

Ernest .^Henderson:

factor, and

ing capital gain, Sheraton

try and

has

make advantageous

pur¬

chases, and to enhance the value
of these

the

on

Exchange,

July 1.

now

533

with E. H. Hansen & Co., 124

North

Bright Avenue.

Seabreeze

of

the

Midwest

Stock

change.

efficient

available.

managements

By reinvesting earnings

common

as

a

hedge

Up to the minute
raton
of

would

news

include

the

Florence Hotel. Here at Florence,
Alabama, strategic industrial cen¬

in

as

That last phrase

was

a

understatement; for where¬
1941

the

asset

value

per

solicitation of

an

offer to buy these securities.

She¬

on

building

expand."
classic

or a

offering is made only by the Prospectus.

New Issue

hotel-motels in Tarrytown,

new

particularly the sizeable tax
earnings set aside for 'depre¬
ciation,' the company was able to
free

offer to sell

an

The

and

and

This advertisement is not

against inflation.

acquisitions by providing

most

to be favored

come

Binghamton,

N.

the
finest and most modern designed
hotel in Alabama, the SheratonY.,

and

ter of the tri-state section of Ala¬

only 33c, today, Shera¬
ton's net assets (about $108 mil¬

bama, Mississippi, and Tennessee,
there will rise an ultra plush 150

lion

$12,000,000

Canada Dry

Ginger Ale, Incorporated

room,

share

was

estimated

at

after

deducting

work

out

to

value

market

all

liabilities)

about

$27.50

per

share, on the 3,700,000 shares out¬
standing.
On April 1, 1956, this burgeon¬
ing Sheraton chain had grown to
31 hotels with about 20,100 rooms,

including
the

as

Los
in

such

well

known

Sheraton-Town

ones

House

in

Angeles, the Sheraton-Palace

San

Francisco, the SheratonBlackstone in Chicago, the ParkSheraton

and

New York,

Sheraton-Astor

in

the Sheraton Plaza in

Boston, the Sheraton-Carlton in
Washington, and the Sheraton-Mt.
Royal in Montreal.
In addition,
Sheraton Corp. owns a 25% inter¬
the Hotel Sherman in Chi¬

est in

office property including the

cago;

Sheraton buildings in

Washington,
D. C. and Boston, Mass., Rittenhouse Square Building in Phila¬
delphia and a 55 year operating
lease

the

on

Sheraton-Whitehall

Building in New York; plus

60%

a

stock interest in

Thompson Indus¬
tries,
manufacturer
of
metal
stampings and copper wire.
To

this

assets,
million a

$120
added

Twenty Year 4% Sinking Fund Debentures, due 1976

A novel feature of this unit is the

financing.

Under date of May 23,
1956, the City of Florence offered
(through Gearhart & Otis Inc. and
Joseph Faroll & Co. underwriters)
at

Revenue

Bonds

1959/1986.
eral

tax

These

due

bonds

exempt,

unusual

ited

and

5% yield.

obligations

of

with

able

the

on

interest
out

of

lease

year

Sheraton
To

land

these

-

of

a

basic

the
from

pay¬
a

30-

a

Copies of the Prospectus\nay be obtained from such of the undersigned
and others as are qualified to act as dealers in securities in this State.

by
Corporation.

property

elements

of

municipal bond

secu¬

Harriman Ripley

This unique

of

with

a

It

was

stock privilege is not new.
originated by Frederick D.

known

May 22, 1956 the well
Eppley Hotel chain, pur¬

chased

for

Merrill Lynch,

nique in

$30

over

15 years.

the

1,500

Hotel

in

million, payable
This chain includes

room

William

Pittsburgh

and




Penn

the

fa-

the financing of Stylon
Corporation in 1952 by a 5% Flor¬

ence

Alabama

Bond, convertible
The conversion

into Stylon stock.

Lehman Brothers

& Co.

Incorporated

Gearhart, Jr. (of Gearhart & Otis
Inc.) who first employed the tech¬

on

Goldman, Sachs & Co.

Eastman, Dillon & Co.

you must

admit!

grossing above
there was

group

Hornblower & Weeks

Union Securities Corporation

security, the Indus¬
Development Revenue Bond

year,

100% and accrued interest

hotel,

rity there has been added a "kick¬
er,"—sort of a Sheraton with the
fringe on the top—for with each
$1,000 bond, the purchaser also
buys 100 shares of Sheraton Flor¬
ence
Corporation common for lc
per share — $1 for the package.
Quite

Price

City of
first mort¬

principal

t he

an

lim¬

are

this

revenues

Florence

Fed¬

provide

and

and

serially
are

They

Florence, secured by
gage

Due June 1, 1976

Dated June 1, 1956

$2,500,000 5% First MortIndustrial
Development

par,

g a g e

trial

impressive

earnings

$2,500,000 hotel, complete
swimming pool and cabanas.

with

1

O'Rourke, Intv
Boulevard, men '

repeated

"The guiding principle has been to

tb

staff of T. Nelson

payments of dividends represent¬

Mr.

i

"Nevertheless, it would be better if the surplus
were
larger, not only to speed debt retirement un¬
der
prospering conditions, but also to create a posi¬
tion where a
weakening: of business can be coun¬
tered by tax reductions within a
prospectively
balanced budget. There are limits to a
country's

1979

(at 90) and

N.

selling at 15 with
dend

are

tained hotel property; a trend that

group of invest¬

a

but

Sheraton

the

Debentures due

listed

common

buy

pace- and

chains
Corporation, an
etegant $250 million aggregation
of some of the sleekest, newest,

such

6%

inventory—its stock in trade—
and Sheraton is equally willing to
at

$60-odd billion floating debt and
can
help provide markets for
obligations of State and local governments, corpora¬
tion bonds, and
mortgages.

100, the 4%% Convertible De¬

bentures due 1967

the prowl ready

any,

Far

moment;

idea
on

the Shera¬

at

its

^

in

up

offered.

the

at

the

get

octopus

an

find4 after

now

of

issue

mous

spitoons

the

release funds which

ties of the parent you can buy are
Sheraton
Corporation 6%% In¬
come Debenture due 1980 at
98, an

,

ity, and capital gains from sagacity.
often the only) inn or hotel in any
small or medium sized city was a

chisel down the

I digress.
It's Sheraton
Corp., not Sheraton Florence we
were stressing; and
among securi¬
But,

Enterprise Economist

and its effective methods for

surplus is particularly welcome to the Treas¬
at this point since Federal debt retirement can

ury

municipalities.)

•

A

"A

Pierce, Fenner & Beane
Stetson Securities

June 27, 19S6

Alex. Brown & Sons

Corporation

Eli-

Financial Chronicle... Thursday, June 28, 1956

The Commercial and

16

(3084)

participating to
with

THE MARKET... AND YOU
By WALLACE

certain
with

STREETE

A recent increase in the

has

maintain

Congressional action though it, too, is not expected
highway bill to offer any fabulous news to
plus the hopes of a compro¬ the holders in this year's re¬
mise settlement of the steel port.
Final

a

the Federal

By MAURICE BARNETT, Jr.

divi¬

Members American

bit under its

year's high but
inspiring any broad

without

held in

congestion
The Summer Stocks Mixed
area
for some time, out of
The Summer stocks—brew¬ which it broke recently to
doldrums this week, but it
wasn't enough to start any ing, soft drinks and air condi¬ free it from technical bondage
general upturn and the list tioning—made little progress and hint at possible higher
stock

was

a

by

group,

now

are

for
in the

ularly^ outstanding since, de¬ liberal
yield category. Re¬
spite their persistent progress turns at recent
prices ran as
for some years now,
they
high as 8% for Ruppert and
were able to join together in
Drewrys. For the ventures
the new highs list with far
some the brewers' contention
more
unanimity than t h e
is that the 18-year and up
other groups in at least mo¬
class, which will start to ex¬
mentary favor.
pand markedly next year, re¬
*
*
*
flecting the wartime high
Steels seemed to have a birth rate, will finally end the
hard time making up their declining per capita consump¬
mind whether a strike at this tion which has kept the brew¬
junction would enhance the ing issues out of investment
prospects for fall business favor for a number of years.
#
*
♦
holding high, or whether it
Would be too costly to keep
Air conditioning companies,
earnings reports at their fat which
overplayed their hand
recent levels. All the uncer¬
last summer by loading up re¬
tainty was rather at odds with
tailers, are in a far different
the age-old market adage not
to sell

on

strike

Summer

news.

Rally Awaited

High hopes were still ramp¬
ant that the stock market
.

would put on some
able

summer

sort of siz¬
rally sometime

within the ntext two months
once

steel

the

either way.
on

It

talks
decision

wage

settle dpwn to some

on

that

large new
orders
eventually. For the
railroads, however, the effects
would be an immediate drop
in

force

and

carloadings.

benefiting from
internal developments, nota¬

debt reduction pro¬
Earnings this year have

its

bly

gram.
also been

With

h i 111

w

e

d down

play,

of the United
should

.

.

have been

generally

—

of

sale
though it is possible that
they could be acquired a point
or two cheaper if the market
runs
into any real troubles.
Chrysler is about as well de¬
flated as any of them, down
more than 20 points under its
1956 high and nearly 40
points from its 1955 peak.
Chrysler earnings for this
year are expected to be rather
poor reading which the stock
has been discounting. Ford,
although disappointing in not
having rebounded to the of¬
fering price since it was
listed, has been holding to a
comparatively narrow range
of around a dozen points, al¬

more

a

buy

than

even




a

Despite the fanfare

over

split a year ago, which
is
led to something of a consoli¬
dation once the fanfare died
was

the

building program,
machinery maker,
Bucyrus-Erie, has been pur¬
suing a rather mundane mar¬

highway

the old-line

ket

course.

The

company,

a

do

in

this

necessarily at any
those of the

not

with

coincide

time

presented
those of the author only.]

"Chronicle."
as

expressed

views

|The
article

They

are

75-year veteran in its line, is

and

to
correct
financing
not, remedial legisla¬
should be enacted by Con¬

personnel

If

abuses.
tion

strengthen

further

to

gress

Securities

the

interests and

The

Act.

the American investor

welfare of

to the exclusion of the many

others that will have to
in such

vast

a

*

share1

project.
*

The New York Stock Exchange
has announced the following

firm

Harold I. Thorp will re¬
tire from partnership in Laurence
M. Marks & Co. on June 30.
changes.

Milton Watkins withdraws from

*

partnership in Shields & Company

Worthington Corp. also
wouldn't be completely im¬
mune from
any building pro¬
gram that huge and, more¬
over,

is also in the air condi¬

tioning

business.' It

\

also

is

June

30.

Frank

Co. June 30.
Baron

Wood

A.

J.

in

W.

retires

from

C. Langley &

.

Gordon

withdrew

and

Production

tor

Associates, Inc. as of June 12.

will apply the

ance

further

to

250

modernization

a

mainly the purchasing of •
buses at a cost of about

new

'

debentures are

have

unable

been

mines

expand

to

at

op¬

erations because of their inability
to

financing

arrange

through

a

public distribution of stock. Other
companies, already in ore have
been unable to get into production
the

for

very

reason.

same

This

already resulted in a curtail¬
ment of mining operations, and if
this condition is permitted to con¬
has

only end by small
companies finding themselves prey
to the larger corporations.
it

Let

us

is

NIUM

can

face the fact that URA¬

vital
of

welfare

realize

also

the

to

our

safety

country!

that

the

Let

and
us

URANIUM

corporations. America has
grown big and strong through the
courage and sacrifices of the pio¬
neers, and

to

the American citizenry
have supplied the
risk capital which has

their credit,

venture

or

made this progress
Scores of large

iiave

lately

possible.

oil corporations

been

the

in

102%

year

.

>

cial and honorably managed

entering

the

they are do¬

accrued interest in

all cases.

,

Province of
Quebec, has a population of ap¬
proximately 1,347,000. Since its
earliest days,

for

point

and of imports
various

United
of

the

focal
trans-shipment of
to other countries

it has been a

the

exports

both

the

in

Montreal,

for distribution

to

parts of Canada and the
States.
The construction
St.

Lawrence

seaway

will

strategic position.
The
Montreal
Transportation
Commission is presently furnish¬

improve the

ing urban
in

an

transportation services

84.5 square

mile area com-

prising the City of Montreal and
17 neighboring municipalities.
It
operates

approximately 1,700 elec¬

tric tramway cars

and buses.

Total revenue for

the Transpor¬

Commission for the five
months ended April 30, 1956 was
tation

$14,915,000,

and

total net

profit

$894,000. Comparable figures
for the five months ended April
was

30, 1955 were: revenue $13,115,000
and a net loss of $218,000.
Among
are:

the

JL^hman

other underwriters
Brothers; Eastman,

DjJion & Co.; Hemphill, Noyes &
recognize the iCo.; Hornblower & Weeks; Ladenprofit potentials that URANIUM burg, Thalmann & Co.; Lee Highas to offer.
Likewise, many of ginson Corp.; Salomon, Bros. &

ing

so

our

'

as

Assistant Treasurer of Henry Mon-

The Commission

redeemable
beginning
July 1, 1962, and at prices decreas¬
Irresponsible attacks in the form ing yearly to par for those re¬
For
of unfavorable publicity has al¬ deemed after July 1, 1974.
ready served to slow down URA¬ sinking fund purposes, the deben¬
are
callable at par plus
NIUM production. Many commer¬ tures
Mines

Sound

URANIUM field, and

partnershio

,

proceeds of the debenture sale to¬
ward repayment of a 1955 bank
loan of $1,250,000 incurred to pur- *
chase buses, and will use the bal¬

The

Hurts

large

far, has generated interest
mostly in the cement issues

sinking
Montreal,

Que., Canada.

$6,200,000.

the

Weekly Firm Changes

of

City

the

by

the entire industry.

bound to share

so

fund

and

interest

principal,

program,

industry shows great promise and
should not be dominated by a few

importantly in New York Stock Exchange
highway program which,

to yield 4.50%,

principal and interest payable in
U. S. dollars. The debentures are
unconditionally guaranteed as to

should be protected, but it should
not be done to the detriment of

tinue,
out.

the power

both

have

Se¬

Commission

curities and Exchange
should

The

discouraged.

be

of

price of 98.362%

well as for the security
States, these attacks

as

offered

$11,500,000 Mon¬
treal Transportation Commission :
4%%
sinking fund debentures,
1956 issue, due July 1, 1976, at a
issue

new

a

of sanity and fair

In the name

yesterday (June 27)

Hart

discouraged.

not

underwriting group headed

An

be encouraged and

of URANIUM

Americans.

jointly by Shields & Co., Halsey,
Stuart & Co. Inc., and Savard &

the production

that

is

the
things,

Debentures Offered

to how vital and im¬

as

it

portant

are

we

doing

of

way

Montreal Transport

plants,"

standable

—

were

contracts

fuel should make it readily under¬

concrete

well-deflated auto issues

more

supplying the needs of man¬
kind. The very fact that these re¬
actors require URANIUM as its

resting after having given a

corner

and

more

be

sues
generally, largely on somewhat more highly re¬
developments. One
projections of good sales and garded than most since it has
of the expectations is that the
earnings with some estimates shown signs of breaking out
auto
makers will rush out
indicating gross will reach the of a trading range in recent
their new lines earlier than
$200 million mark. The stock sessions., This could be a prel¬
usual
some setting late
has been no stranger to the ude to an attempt to reach
August or early September new
highs lists even in incon¬ last year's high more than
for the introductions
with
clusive markets. The company half a dozen points higher up
the result that this sagging in¬
started in the oil drilling bit the ladder. It is a large sup¬
dustry would snap out of its business last
year which, nat¬ plier to the vending machine
doldrums and snap back lust¬
urally in the formative stage, companies which have been
ily in the final months of the was a
drag on earnings last making drastic inroads into
year.
year and probably will be this the retail business. The stock
*
*
*

the

American
and

.

big corporations. That's

to the

both in
this
country and abroad, it should be
apparent that the day is not far
distant when atomic power should

rather

which

before

give the small companies
opportunity to capitalize on
URANIUM'S
tremendous future,
rather than force them to sell out
Let's

Uranium

Vital Importance of

"reactor

URA¬
oppor¬

as

an

tive and

Baltimore &

offers

tunities!

light as insidious, destruc¬
unpatriotic.

proper

well!

tremendous

price

guaranteed
NIUM

be seen in their

these attacks may

that has been

Some Promising Issues

turned.

few.

a

depend¬

our

upon

Ohio, however, was one road being let for the construction of

,

year

'

It should be re¬

sibilities ahead.

URANIUM for survi¬
vorship in time of war—as well
as our need to produce URANIUM
in time of peace if we are to re¬
main a first rate power — then

safeguard against a

a

considers

one

ence

inventories

customers'

of only

malpractices

When

a

deplete the steel
built

strike would

up as
strike

fact

the

from

economic

Market commentators were

field, and are doing so because
they too recognize the profit pos¬

,

the

illogical situation

seemingly
stems

—.

drastically by mainte¬
nance expenditures. Both will
help earnings as the large ex¬
status this year. Marketwise,
penses d w i n d 1 e. Even so,
however, there has been little
reflection of
it.
Even the earnings so far this year have
been running well above last
merger of Borg Warner with
York Gorp.stirred up little in year, and would even make a
favorable comparisoit in* the
the way of fireworks, al¬
face of a steel strike.
v
though it lifts Borg to an im¬
*.
*
*
portant position in the air
.Among the paper issues,
conditioning industry.

generally agreed that the

tremendous

directed against a

based more
Dresser Industries has been good account of themselves
such a rally
able to outperform the oil is¬ last
year,
Lily Tulip was

is traditional than

financial

history of the United States has
so
much adverse publicity been

was

the fact that

offers

uranium

single industry membered that the URANIUM in¬
as is
being done today with dustry has but one customer, the ;
United
States
Government, and (
cautious in the face of a pos¬ respect to URANIUM. It would be.
senseless to deny the existence bf ? this customer is committed to buy 4;
sible steel strike than the
abuses, but it is equally senseless whatever URANIUM is produced
steel shares themselves, This to attack an entire industry for over the next five years, and at a

point out, brewing stocks,
one

though

even

the

in

before

Never

widespread against the uncertain back¬ prices eventually.
neglect from both sellers and ground of the market gener¬
The Rails and the Strike
ally. But, as some of the mar¬
buyers.
Railroads were even more
ket students were quick to

partic¬

firms

larger

opportunities.

still suffered from

Cement issues were

the irresponsible attacks .and adverse

Taking exception

publicity directed against the vitally important uranium indus¬
try, Mr. Barnett states it is "senseless to attack an entire
industry for the malpractices of only a few." Sees sound mines
unable to expand operations, and fears they will be absorbed

The

demand.

investment

wage talks were able to snap
the stock market out of its

Stock Exchange

air of buoyance

an

City

Investing Corp., New York

General

Vice-President,

stock

the

helped

'-TV",. >r*

Upon Uraninm

a

Michigan atomic power plant.
dend

on

for

connection

in

V

i

Unwarranted Attacks

energy

contract

a-

work

degree
field

some

nuclear

the

in

are

because they

largest
also

mining

corporations Hutzler; and Tucker, Anthony &

entering the URANIUM

Co.

|

been

Trinidad Oil Deal Lessors

the

By PAUL EINZIG

bought

against

dollars.

So

ing

net

result -from, the; point

of

view of the dollar and gold hold¬

of the Treasury is bound to
precisely the same as if the oil
had been paid for in dollars. The
only difference is that, instead of
be

Unpopular Trinidad Oil Co. sale and inability of British firms
to raise the required capital for the development of its oil
concessions in Trinidad in Canada viewed, by well-known
British economist,

as a

undistributed

valuable lesson concerning the dangers

dollars.

receive

nor

On

balance
REGISTRATIONS TO JUNE 8th, FOR 23rd ANNUAL

the

arrangement would make no
difference to the size of its gold

Dr. Einzig opines: (1) Socialists
will be less likely to oppose tax concessions for firms oper¬
ating overseas; (2) sale of capital assets is not the way to
strengthen gold reserves; (3) agreement made with Texas Oil
profits tax.

CONVENTION OF NSTA, EL MIRADOR HOTEL,

and dollar reserve.

There is

one

ernment's

PALM

aspect of the gov¬

attitude

which

is

par¬

♦Charles E.

ticularly gratifying. Had Mr. Mac¬

Co. to sell oil for

un-blopked sterling is neither advantageous
disadvantageous;' and (4) labor unions may be encour¬
aged by increased reserves to press for higher wages.

nor

Notes

NSTA

spending dollars, and receiving a
corresponding amount of dollars,
the Treasury would neither spend

inherent in the high taxation and excessive

and disadvantages

millan

vetoed

the

transaction

SPRINGS, CALIF., OCTOBER 24th TO 27th, 1956.

Commercial

♦Beck, Edwin L.

it
Maurice

Hart

It is very
LONDON, Eng.—The House of solving the problem.
tempting
for
this
Government,
tial majority, the decision of the and for any future Government,
Commons approved, by a substan¬

Chancellor of the

Exchequer, Mr.

to take the line of least resistance

Macmillan,not by reinforcing its gold reserve
to oppose the with the aid of such X sales in¬
sale of the stead of strengthening the econ¬
Trinidad
O i 1 omy for the sake of improving the
Co.
to
the balance of payments. And the in¬
Texas Oil Co. crease in the gold reserve result¬
The debate
June

the

tio

20

on

was

culminaof

n

stormy

a

con¬

troversy
that
was
going on

action

is

Trade

Unions

the
forward
with
their excessive
wages
de¬
mands.
Once they are satisfied
that the danger of unemployment

Einzig

through cuts in

6.

At

opposition not only among Social¬
ists but also among the Govern¬
whom

most of
voted against

supporters,
have

would

authorizing it if the Government
had

its

announced

intention

im¬

mediately after the terms became
known.
for

nearly

Government
certain

take.

itself

about

As

week

a

was

it

from

far

line

the

the

should

Macmillan' himself

Mr.

admitted, his first impression

was

decidely unfavorable, and it was
only after a careful study of the
circumstances that he reluctantly
agreed to let! the interests con¬
cerned
proceed, subject to cer¬
tain

safeguards.

the

deal

why

reasons

the

of

one

oil

numerous

too

none

producing

areas

Commonwealth.

the

It

is

true, compared with the capacity
of
the
British
Borneo
oilfields,
and of the Canadian oilfields, the
and

actual

potential oil output of

Trinidad is

relatively small. Even

rather

sentimental

for

so,

economic
Britain

economic

than

most people in
to give up

reasons,

reluctant

are

what is, after

all,

assets

of the chief
proposed

one

the

of

Caribbean Federation.
There

ments

are

other

many

argu¬

But since

against the deal.

neither the British Petroleum Co.

Shell

the

nor

in

concern

was

inter¬

Trinidad
Oil Co., and since the prospects of
raising the capital required for
the development of its oil conces¬
ested

acquiring

the

Trinidad and

in

sions

in

Canada

anything but favorable, Mr.
had no choice but al¬

were

Macmillan
low

sale

the

to

take

place.

It

is

the Opposition would have
preferred it if the British Govern¬
ment itself decided to take over
true,

the

company,

or

to

finance

its

capital projects. But that solution
did not appeal to a Conservative
Government, and it is doubtful
whether the Labor Party, had it
been in

office, would have adopted

of some $180
result of the deal is

acquisition

million
of

as

course

a

not without

attractions,

having regards to the low level at
which the gold reserve stands in
spite

of

its

increase

last six months.

during

the

But this strength¬

ening of the gold reserve at the
cost of selling out a capital asset
is

of

High

not

Taxes

episode

decision

exactly

an

ideal




way

of

Jerome

be,

must

is

in

position to buy

a

that,

therefore, welcomed from the
point of view of Anglo-American

J.

on

worth while for the Texas Oil Co.

to

for

pay

the

twice

Trinidad Oil shares
price at which they

American

an

San

Nuveen

&

Co.

Chicago.

Dempsey-Tegeler
Straus,

Blosser

Jones

Joseph

Mulcock

R.

Straus,
J.

Miss

E.

in

Company
Mr.

ment.
trader

for

the

Street

Trust

Burnett

was

Gordon

Merrill

of

Fenner & Beane,

Wilson

&
&

Co.

Va.

111.

Chicago,

Co.

New

York,

N.

P.

Kibbe

&

Co.

Salt

Lake

City,

Utah

A.

P.

Kibbe

&

Co.

Salt

Lake

City,

Utah

Crockett & Co.

Houston, Texas

Frankel

V.

Bruns, Nordeman & Co.
Moreland

B.

Hanrahan

Hanrahan

Bean

Gordon,

Meyers, Jr.

Yarrow

♦John

J.

♦Joseph

Roald

M.
A.

Ergood,

Jr.

&

List

Blue

Morton

: i

N. Y.

j

San

Angeles,

Cleveland,

Calif.

Publishing

|

'|

New

Co.

York,

N.

!, t
<

The Robinson-Humphrey Co.

Atlanta, Ga.

New York Hanseatic

New

Mr.

&

taxation,

Corp.

Britain,

Mrs.

Saunders, Stiver Adds
(Special to The Financial Chronicle)

Ohio

CLEVELAND,

—

With Merrill

Ronald

Samuel &

Lynch

Dimengo
Stiver

is

&

Saunders,

with

now

Co.,

Terminal?

CLEVELAND, Ohio—Ivan Gelis now with Merrill Lynch,

Tower

COLUMBUS, Ohio—Thoma§ H.

fand

Edmondson

Pierce, Fenner & Beane, 216 Su¬

&

perior Avenue, Northeast.

Exchange.

Engler Add

(Special to The Financial Chronicle)

(Special to The Financial Chronicle)

is

with

Street.

now

the

than

This is under

Even

had

the

if

other

no

no

offer

British holder.

a

Oil

Trinidad

buy,

or

an

offering of these securities for sale, or as an

offer to buy, any of such securities.
offer is made only by means of the Prospectus.

as

The

deal

it

advantages,

circumstances to he construed as

to

a

solicitation of

an

has

certainly made British opinion re¬
alize the dangers and disadvan¬
tages inherent in the high taxation

335,714 Shares

of British firms

operating abroad.
Apart from
the taxation point
referred to above, the excessive
taxation of undistributed profits
deprives these firms of capital re¬
sources which they could use for

Union Tank Gar

influence

this

of

realization

Capital Stock

Mr.

Macmillan agreed, on the day be¬
fore the debate on the Trinidad
Oil deal, to make a small tax con¬

cession

not

was

of

firms

British

These shares

are

being offered by the Company to the holders

to

prepared

the

definitely

promise

larger

much

con¬

Subscription Price $29 per Share

cession demanded by many

supporters, but he
promise

long
they

the

matter.

Socialists towards the
deal

Oil

might

in

Copies of the Prospectus may be obtained from the
in which the

the

now

undersigned

may

undersigned only in those States

legally offer these securities in compliance

with the securities laws

helpful, because
less likely to make

prove

run
are

of his
willing to

point of view the atti¬

of the

Trinidad

was

examine

to

this

From

tude

of its Capital Stock

subject to the terms and conditions set forth in the Prospectus. Subscription
Warrants expire at 3:30 P.M., Eastern Daylight Saving Time, July 9, 1936.

in the Commonwealth.

operating
He

favor

in

Company

(Without Par Value)

developing their assets. Under the

of the respective Slates.

political capital out of tax

conces¬
sions for firms operating overseas.
None of the critics of the terms

which

on

Macmillan

Mr.

that

guards"

on

insists

is

of

one

utterly

have

Oil

worthless for
The Chancel¬

oil

from

general.

to

to

agree

Britain

the

Since

Dollar

the

for the oil will not
is

bound

for

to

which

Blyth & Co., Inc.

Glore, Forgan & Co.

sell

to

be

sterling

Area

in

sterling
for

Harriman Ripley & Co.
Incorporated

Kidder, Peabody & Co.

Lehman Brothers

Merrill Lynch, Pierce, Fenner & Beane

against

paid
be blocked, it

used

Goldman, Sachs & Co.

Oil

payment in sterling, in conformity
with the agreed terms of the sale
of

Corporation

The First Boston

"safe¬

the

that the Texas

have

would

Trinidad

Blunt Ellis & Simmons

I,

Which the government

lor announced
Co.

Col

agreed

to allow the deal to proceed

noticed

Smith, Barney &

purposes

would

have

Stone &

Webster Securities Corporation

June 25, 1956

.

Samuel

Engler Company, 16 East Broad

must

more

I

York, N. Y.

headquarters

great deal

a

of

shares

its

from

removed
worth

to

the

once

i

Y.

Atlanta, Ga.

♦Martin, Justus C.

♦

|

Philadelphia, Pa.

Inc.

♦Ronan, Frank J.

Building.

Calif.

Ohio

Philadelphia, Pa.

Co.

Co.,

Mateo,

Los

Co.

&

The Robinson-Humphrey Co.

♦Jolley, Lex

St. Francis Hotel

Stroud

N. Y.

New York,

Co.

Newburger &

Smith

E.

Russell

V

Mass.

New York,

Co., Inc.

&

Russell

Gottron,

York, N. Y.

Worcester,

Mackie, Inc.

&

Fay

&

Morgan

Russell

Co.

Graves

Hooker &

Keenan

N.

&

Singer, Bean

♦Paul

J.

..

Detroit, Mich.

Co.

&

holder who is not subject to Brit¬
ish

Y.

Stark

Pierce,

Lynch,

Lynchburg,

j

<"

Lynchburg, Va.

Inc.

Moreland

Claflin, Jr. has been added to the
staff

Inc.

Mason,

I.

♦John J.

William

Mason,

♦Paul

Lynch Adds
—

N. Y.

New

♦Jules

Ohio

York,

♦Paul

Minot, Kendall & Co.,

CANTON,

New

♦Eugene

Inc.

I

t

Detroit, Mich.

Crockett

Ure,

A.

Y.

N.

I

1 ~

A.

Kibbe

R.

.

!

\

Jr.

P.

♦L.

Depart¬
formerly

Syracuse,

McDowell

&

Horner &

Wm.

Frankel

V.

♦A.

Trust

New York, N. Y.

Horner &

♦William

the

New York, N. Y.

Co.

Scott,

Mason

Harry J.

*

Bank-State

Second

with

associated

become

Co.

&
Co.

Reilly & Co., Inc.

♦Harry J. Wilson

BOSTON, Mass.—Peter Burnett

&

&

Blosser

I

New York, N. Y.

Scott,

Mason

Anne

F.

Mo.

Chicago. 111.

Co.

McManus

E.

111.

&

McManus

Joseph

Mulcock

♦Walter G.

has

McDowell

Calif.

Francisco,

St. Louis,

Co.

&

&

Joseph McManus

♦John F. Reilly

Stock

to

Co.

♦George J. Elder'-

Second Bank-State Tr. [

Chicago, 111.

&

♦George Dedrick

Peter Burnett With

Y.

Co.

&

♦Ernest

made

that,

Tegeler
Isaacs

R.

N.

York,

Strauss

♦James

financial relations.

Building, members of the Midwest

was

Allyn

New

i

Y.

S.

♦Graham Walker

quoted on the London Stock
Exchange before the offer was
were

C.

N.

John

Jr.

Sayre

F.

♦Milton

such

up

advantageous terms.
One of the reasons why it appears
properties

Hill,

(Special to The Financial Chronicle)'

higher in Britain than elsewhere,
American and other [interests will

practical purposes.

it.
The

government's

is

interests

within

vestment in the United States. The

Merrill

long as taxation of corporation
earnings and of large personal in¬
comes
r e m a i n s
substantially

unpopular is that it
handing over to non-Brit¬

means

ish

material im¬

raw

Oil

Trinidad

the

be

main

the

of

♦Byron J.

so

are

Sales Unpopularity

Oil

British in¬

American opposition to

♦James

company,

One

J.

appetite.

Lesson

A

A.

♦Houston

press

A lesson that has emerged from

be

But

their

erate

first the deal encountered violent

own

encourage

to

ports, that might be necessitated
announcement by a decline in the gold reserve,
has receded, it will be much more
of
the
Texas
difficult to persuade them to mod¬
Oil
offer
on

June

ment's

likely to

since the

ever

Paul

ing from the Trinidad Oil trans¬

♦Thompson M. Wakeley

stimulated

also

.* I

Mich.

New York,

Hanseatic Corp.

York

New

investment in the Commonwealth.

have

Detroit,

Co.

Financial

&

Chronicle

would have discouraged American

would

Parcells &

Charles A.

Exley

It

Dr.

17

(3085)

Number 5546... The Commercial and Financial Chronicle

Volume 183

White, Weld & Co.

13

(3C86)

Thk~Commercial and Financial Chronicle... Thursday,

^

the business development depart¬
bank.

ment of the

o-'V

;

Kingsbury S. Nickerson, Presi¬
dent
of

Jersey

City,
21

June

on

on

that at

It is announced

election of John P. Scholl

of Di¬

held

June

The

26,

lers

Division.
of

Creamer

in

are

the

Mr.

Trustee of the Empire

gets

Domestic

John

was

announced

Charles

York.

Both

real

and

the

are

loan

estate

Charles

C.

of

Windie,

National

Brook,

Nassau

June

on

divi¬
payable in stock, of 2l/z%.
special meeting of stockholders
proposed semi-annual

A

the

bank

called

been

has

form

naoxt

tne

peopie

more

and William T.
appointed As¬

oi

regular

Action

Cedar

Grove,

N.

Newark

&

ing

of

Co.

taken

fication

of

bank

putting

aner

it

service,

Quar¬

s

was maae

known by the bank on june 2.0
according to the "Pittsburgh Post

14, following rati¬

Dispatch," which added tnat Frank

the

J.,

N.

R.

by
both
banks,
details
of
whicn
were
given in our May 31 issue, page
2617.
In
approving the merger
plans

stockholders

the

of

Vice-Chairman,

Denton,

sented

each

Penn

iictm

member

new

goid emblem

on

*

pre¬

w.ui

June 19 at

Hotel

National

a

a

Wii-

12, at

fice.

T

■

tional Bank has offices in 25

Myrtle

Hunt, the only wo¬
man
in the
122-year history of
The Bowery Savings Bank of New
York, to reach the rank of Assist¬
ant

M.

munities

after

22

with

bank.

the

-Secretary
Board

e ver

Miss

25 years.

director
tion of

of

and

Bank

Women,

the founders

in

was

1930

ings Bank Women

one

of

the Sav¬

of

of the

Y.,

of

total
as

which

of June

7

made

was

■

in

•

1942

Vice-President

a

•

in

re¬

New

York.

ated

at

National

Chase

with the

with

Later, he

Bank

was

of

affili¬

Ohio with
000

into

stock

common

of

$40,-

National

the

City Bank
of Marion, at Marion, Ohio with
stock of $700,000 became

common

effective June 2 under the charter
and title of the National City Bank
of

Marion.

fective

The

date

of

latter
the

the

at

ef¬

had
capital stock of $748,000 in 37,400
Bank& Trust Co. as Manager of
shares of common stock, par $20
brought about by a stock dividend its real estate and mortgage loan each, surplus of $800,000 and un¬
of $40,000, and the sale of $80,000 department.
In 1939-he resigned divided
profits, including capital
to accept a, post with the Federal
of new stock.
reserves, it is stated, of not less
Deposit Insurance Corporation in than $459,075. As a result of the
*
*
*
Jeisey City. Mr. Bitting was ac¬
Appointments of two new tive in the Real Estate Board of merger the Caledonia Banking
Company has become a branch
Assistant Vice
Presidents of the New
Jersey, the Mortgage of the National
City Bank
of
Rockland-Atlas National Bank of

as
Associa¬

National

N.

'

January,
1950,
as
Officer-inCharge of County Bank's mort¬
gage
department.
Mr.
Bitting
started his banking career in 1928

$280,000,
compared
with
$160,000
previ¬
ously. The additional capital was

She has served

the

the

ported

for

Bowery,

*

Ellenville,

elected

and

1

■

Vice-President

Assistant

addition of $120,000 to its capi¬

tal,

was

re¬
Chairman of

The

of

Hunt

of

Bank
an

Bruere,

Henry

President

tired
the

to

com¬

County.

*

*

retired
on
years' service

29

Nassau

As of June 7 the Home National

Vice-President,

June

in

"

f

Metro-

jmlitan Area, and President from

Passaic

the

1935.

is the author

She

of

ol

women

Boston, Mass., has been announced

by

in banks.
if.

J.

Frederick

H.

President.
*

if

Association of New Jer¬

Bankers

banking magazine articles
public relations and the role

many
on

They

Hagemann,

the Home Builders Asso¬
ciation of New Jersey, etc.

merger,

Nathaniel F.

are:

""■> Y-,

Esten of Westwood, who will con¬

Wilbur

tinue

Lewis, President of
Union Dime Savings Bank, New
York, announced on June 21 the

*

*

*

nington, N. J. with

eral

banking division; and Avery
Sawyer of Brookline, active in

of

the

was

J. under the

of Trenton, N.

charter and title of
annourx.ernenr

ot

is

offei

an

to

is

ne'iliei

buy any

by Diospeclus only

made

an

oflei

to

sell

no'

a

solicita¬

fective

June

the latter

ef¬

office

Trenton

of the
*

96,000 SHARES

Vincent
>

E.

Trust Co.

COMMON
(Pat

Value

$b

Furey has been

ap-

pointed Senior Vice-President

of

Geoffrey S. Smith,
President. Mr. Furey is a com¬
mercial lending officer with more
than 30 years experience.
He has
been

share

He

is

Chairman

$950,000
(with
Dated:

stock

purchase

warrants

Due:

Girard

election

attached)
;

July 1, 1956

the

at

Girard

July 1, 1976

12

of
Corn

announced.
PRICE

1947.

Officers'

Corn

Exchange and responsible for the
administration of lending policy.
Nine other officer promotions and

Sinking Fund Debentures due 1976

Common

of

Committee

Loan

6%

Vice-President since

a

'00%

•

a

new

officers

at

TEXAS

NATIONAL

RAUSCHuR,
AUSTIN.

EPPLER.
CHAS.

JUNE

27,

CORPORATION

PIERCE

HART

OITTMAR

&

&

&

WHITE

1956




ft

CO.

PARVIN

COMPANY

GUC-R1N
3.

INVESTMENT

TURNER
&

CO.

CORP.

J.

lending officer, and Harold W.

Operations Officers,

MARVIN

M.

E.

MORELAND

ALLISON

SHEARSON

LENTZ.

ft

&

CO.,

HAMMILL

ft

NEWTON ft

CO.

INC.
CO.

CO.

SOUTHWESTERN SECURITIES COMPANY
R.

L.

STEWART

ft

*

CO.

moted
v

dent.
Paul

In

Senior
M.

the

Trust

Terrell

Officer.
William

trust

Branin

Senior

B.

Hunte^,

A.

Trust

pro-

Vice-Presiadvanced

Officer., and

to

to

all

department,

was

Harman

promoted
A.

Assistant

to

B.

were

to

Allen

Investment
Yerkes

was

Officer while

Eagleson, Jr., Russell

and Morris

*

*

B. Ste¬

,

A stock dividend of $500,000 has

National

capital of the
of

Bank

She¬

boygan, Wis., making it now (as
of June 8) $1,000,000, compared
with $500,000 previously.
*

$

Announcement

National

Bank.

principal officers will be
Josepn M. Dodge, Chairman of the
Board; Selden B. Daume, VieeChaiiman of the

Board; Raymond
T. Perrmg, President and Direc¬
tor; Charies H. Hewitt, Executive
Vice-President and
ton

J.

Director; Mil¬
Senior Vice-Presi-

Drake,

J.

Director; Clar¬
Huddleston, and William

J.

ence

Thomas/Senior Vice-Presidents.
The Detroit Bank, established in

1849,

operates

the

oldest

offices

42

in

bank

is

and

Michigan.

Although offering commercial
and
savings banking, until this
time

it

has

partment;
Bank

&

had

not

the

Bank

de¬

Wabeek

the

result

the Detroit Trust

the

and

which

is

Co.

Trust

Company

trust

a

Detroit

of the merger of

Wabeek

occurred

State

Aug.

on

1,

1955; the Detroit Trust Company,
established

was

in

1900.

Prior

to

merging with the Wabeek State
Bank, it had been exclusively en¬
gaged in the trust business; the
Wabeek

lished

State

in

Bank

estab¬

was

Mich,

in

expanded to Ferndaie
and in 1938 transierred

1933,
1934,

Birmingham,

in
its

main office to the Fisher

Detroit.

Building,
Birmingham
Na¬
was
organized in

The

tional

Bank

1933. The Ferndaie National Bank
established

was

in

*

As

tional

National

bank

Second

Na¬

Lexington,

of

its

Ky.

title

Bank

Lexington.

*

the

11

Bank

changed

1945.

*

of June

the

to

Second

Trust

&

Early in the

increased

Co.

year

of

the

capital from

its

$150,000 to $300,000, reference to
which

made in these columns

was

*

is

*

.

tional

Bank

Carolina,

V

*

the Security Na¬

of

Greensboro,

reported

No.

capital

a

of

$2,250,000, increased from $1,500,000 by the sale of $750,000 of new
stock.

-

..

*

The

*

Planters

*

National

Bank

&

Trust

Company of Rocky Mount,
N. C., with common stock of $350,000

has

Bank

taken

&

Roanoke

the

over

Trust

Company
noke Rapids, N. C., with

of Roa¬
common

stock of $50,000, the consolidation
having been effected as of June 9
under the charter and title of the

;

made

As of May 25,

of

the

Planters

National

election of the

Co.

to

consolidation

following members
the Advisory Board of Direc¬

At

the

Bank

effective

Trust

&

date

of the

the

capital of the
bank was
reported
$600,000 in 24,000 shares of
common stock, par $25
each; sur¬
plus of $700,000 and undivided
profits, it is reported, including
capital reserves, of not less than
$403,725.

tors of the Fourth National Bank

consolidated

in

at

Wichita, Kansas: Dr. Harry F.
Corbin, Jr., President of the Uni¬
versity of Wichita; Dwane L. Wal¬
lace, President of Cessna Aircraft
Company and O. A. Sutton, Presi¬
dent of the O. A. Sutton Corpora¬

*

tion.
*!•

Exchange were also
Stephen S. Gardner,

Kalb and William L. Stunners, both
MUIR

each

lor

share for each share

Detroit

*

by the Office of the
Comptroller of the Currency, as a
result of which the capital as of
June 6 became $650,000 instead of
$487,500 previously.

June 26 by

on

one

of

Bank,

The

of

reported

of Philadelphia, it was announced

-

shore!

Price $11.25 per

is

share

a

Ferndaie

the

*

$162,500 in the
capital of the Lake County Na¬
tional Bank of Painesvile, Ohio,

Security

*

*

Girard Trust Corn Exchange Bank

STOCK
pei

increase

*

served to double the

*

MI".

An

The

1.

of The

of

share

National

April 12, page 1824.
*

Pennington
bank has become the Pennington

The following
bona fide residents ol Texas.

of these securities.
»o

stock

common

merged with and
Trenton Banking Com¬

$250,000

into

This

V'\

;■ ■;

The First National Bank of Pen¬

his activities with the gen¬

pany

tion

Marion.

sey and

Jr.,

of

National

-

1933 to

nine-tentns
share

each

for

Vice-President and

%

Newark & Essex Banking Co. also
The Central National Bank of
the West Hempstead
office of the bank, to approve the approved a proposal to increase Richmond, Va., has enlarged its
its capital wnicn on the effective
The
executive
committee
of dividend, which must also be con¬
capital to $2,2o0,000, the amount
City Bank larmcrs Trust Com¬ firmed by the Comptroller of the date ol tne merger is reported as having been increased effective
pany has appointed Raymond H.
Currency.
The dividend will be $7,125,000, on Z85,000 snares oi June 5 from. $2,000,000 as a result
hampson a Trust Officer. He was payable on July 17. At the July common stock, par $25 each, sur¬ of a stock dividend of $250,000.
formerly an Assistant Trust Offi¬ meeting the stockholders will also plus of $/,12o,000 and undivided
*
*
*
cer
in estates and personal trust be asked to
approve the sale of profits of not less tnan $3,300,00U.
The sale of new stock to the
administration.
an
additional
*
%
%
'
■'
104,500 shares of
amount of $100,000, has increastd
*
*
*
stock
beginning
July
24
with
Franklin B. Bitting, Vice-Presi¬ the capital of tne Anacos.ia Nabeing
issued
to
stock¬ dent of County Bank and Trust uonai nank of Washington, D. C.
Roger Hornby, Assistant Per¬ rights
sonnel Director,
and Frank Ra- holders of record on the meeting Company of Paterson, N. J., died from $500,000 to $600,000.
The
dano, Assistant Treasurer, have date allowing them to buy one of a heart ailment on June 24, at effective date of the increase was
been
appointed Assistant Vice- share of Meadow Brook stock for Harkness Pavilion of New York June 15, according to the weekly
each 13 held at that time.
This
Pi esidents of Chemical Corn Ex¬
Medical Center.
Mr. Bitting was advices of the Comptroller of tne
change Bank, of New York, it would bring the total stock out¬ born in Media,
Pa., in- 1900.' He Currency's reports.
was
announced
on
June
25
by standing to 1,496,950 shares. Au¬ joined County Bank as Manager
*
*
si*.
Harold H. Helm, Chairman.
gustus B. Weller is President of of the real estate
department in
The
merger
of the Caledon'a
the bank. The Meadow Brook Na¬
*
❖
*
August, 1940, was promoted to Banking Company, of Caledonia,

July

share

uent; Herbert H. Gardner, Senior

ceremony.
if

Birmingham

Pittsburgh, Bank, and

of

tne

was

Bank¬

Essex

Newark,

June

on

of

employ¬

one

the

National Bank

club

centuxy

in 25 >ears

the

with

J.,

joined

will

the Detroit Wabeek Bank & Trust

*

Company

pa., have
ter

stock

Ail

Co.,
*

the Ivleiion

of

Trusi

&

the proposed
Firs* Nauonai Bank

approving

of uie

merger

^

2*

aie

Seventeen officers and

sav¬

ees
#

bank

consolidated

elective

Officers.

appointments

the

be exchanged is announced as fol¬
lows: one share for each share of

were

Jr.,

to

ings."

the

for

Warren Maxson, added will exceed one billion dol¬
lars. The basis on which shares of
jr., James E.;

J.

❖

encouiage

their

recom¬

a

and

immediately.

win

that

will

directors

Newman,

Investment

sistant

legally

paid

G.

he aoaed, "tnat tins increased id-e

National

Brook

Meadow

at

a

of

the bank's Exchange Place of¬

at

be

can

new

rate

S. Davis,

liam

tne

of

dend,

has

Assistant

an

25

group.

been
Manager

Jr.,

Jordon,

appointed

tnat

highest

of

merger
banking de¬
Collins, of the four banks. The consoli¬
dated bank will be known as The
George
E. Spencer, Assistant Treasurers. Detroit Bank and Trust Company,
In the operating department, Har- and it will provide 52 banking of¬
iison
Cottingriam,
Jr.,
Robert fices covering Detroit, Birming¬
Ferndaie, and Southfield.
Crothers, and Fred W. Hartman ham,
were
appointed Assistant Treas¬ The total tapital funds of the
consolidated institution wilj, it is
urers.
In
the
trust
department,
George E. Spaeth was made As¬ announced, be in excess of $60,sistant
Trusi Oxiicer, while Wil¬ 000,060 and total resources it is

Graham

L.

Howard

Thompson,-Jr.,

the

is

rate

jointly announced

mend to the shareholders

partment are William A.

Mr. Nickerson stated that the

2V2%

and

*

County, N. Y., announced

department

services

Meadow

The
Bank

irji the mortgage

national

*

*

of New

Bank

by

Harris, Stevens, Inc.

F.

City

ef¬

i.

All

boaras

New officers in the

John

Mr.

real estate firm

of the

of Brown,

C.

26

President.
Vice-President

is

director

a

June

on

Diehl,

Bridgets

First National

oi

a

Savings Bank of New York,

Barbour, Jr. and Wil¬
Reynolds have been ap¬
pointed Assistant Cashiers by The

liam

as

City

*

*

paid

rate

to 21/2%,

*

Jef-

Mr.

and

the

in

of

author¬

Invest¬

"j

«

Interest, will be
semi-annually
and
will be paid oil ail balances over
$10. Deposits received belore July
16, will draw interest from July l.
uuiy
compounded

interest

*

board

moved up to

were

Officer.

by commercial Danks. "Vve nope/'

in Brooklyn.
*

Teller,

Floor Audi¬

as

Supervisor,
*

Dey is a member
supervising offices

group

Clerk

The election of Harry W. Brid¬

bank's

the

as

Vice-Presi-

Assistant

Ivlr.

oents.

tor and

three

All

Vice-Presidents.
been

has served

and

unit head and later

Thomas F.
Creamer,
llalpn W. Dey and Waiter W. Jeffers

Mr.

1928

in

.appointed

had

As¬

Scholl joined the staff as a

First
National City Bank of New York
rectors

as

sistant Secretary of the bank.

regu¬

a

meeting of the Board

Bank

J., announced
tne

deposits

savings

fective

lar

N.

tnat

increase

an

National

of the bank had

directors
ized

First

Xne

or

venson

ment

June 28, 1956

The

*!'

Announcement

of

proposed
Michigan banks
a

merger of four
has been made by officers of

sale

amount

of

National

Board of The Detroit Bank, De¬
troit; Selden B. Dauine, President

became

Detroit

Wabeek

Bank

&

Trust Co. Detroit; and Herbert H

Gardner, President of the Bir¬
mingham National B&nk of Bir¬
mingham, Mich and the Ferndaie
National Bank of Ferndaie, Mich.

|

stock

to

the

$302,500

has resulted in

the

*

new

Bank

the
respective
institutions
namely,
Joseph M. Dodge, Chairman of the

of

*

of

of

by the First
Jackson, Miss.,

increasing the cap¬
$1,512,500 to
enlarged capital

ital of the bank from

$1,815,000.

The

effective
*

The

Clovis

June

*

6.

*

National

.

Bank

of

Clovis, Mew Mexico has increased
its capital from $150,000 to

000,
the

as

$200,-

of May 31. The addition to

capital

came

about by a stock

'Volume 183

Number 5546

The Commercial and Financial Chronicle

...

(3087)
dividend
of

of

$25,000

$25,000 of

and

the

sale

stock.

new

*

*

search
ment

Corp.,
Co.

American

of

Illinois,
Ventures, Inc., Reno.

*

C. D.

*

Invest¬

and

a businessman, a doc¬
lawyer, a retired widow, a
bank President, a scientist, or an

tor,

Securities Salesman's Corner

of the California Bank of Los An¬

dents),

geles, at 6861 Santa Monica Blvd.,

Robert

Victor

H.

E.

Williams,

Winfrey

and

elected

were

Vice-Presidents of. California

The

«

will

announced.

wood

area

C. F. Schwan

elected Cashier

block

west

the bank and E. E. Bontems,
Eugene
D.
Cole,
Wallace
E.
Frazier, W. T. Harrison, V. K. Kelsey, James B. Mears, F. W. Peter¬
son, L. B. Raethery L. A. Soper,
Jr., and Tony Westra were elected

Santa

Monica

was

of

Assistant
/. •

Vice-Presidents.
*•

r.

.■

*

*

in

of

one

its

Board

Bank

of

cisco

met

of

out

of

state

offices,

Directors

California

of

of

San

The

Fran¬

June

12, at Tacoma,
Wash. At this meeting, four mem¬
of the staff of the Tacoma

bers

office

appointed

were

Cashiers.

They

Assistant

E.

are;

H.

Fossen, T. J. Muzzy, Louis Parker,

is

assigned

relations

to

section

the

public

the

of

in

constructed

the

Holly¬

located

is

and

of

the

one

column

discussion

intersection.

capital

$300,009

by

of

to

the

shares,

Scotia

Nova

at

ratio

five

of

"Gazette"

"Gazette"

the

of

stock

in

to

the
1.

indicates

of

the new
been made by
Chairman
and

having

as

L.

each

June

which

announcement

H.

for

according

advices

press

Montreal

The

held,

Enman,

President

of

further

,

follows:

as

the

bank,

action

capital

will

from

reports

is $10 and

increase

paid-up
$18,-

$15,000,000

to

000,000.
balance

of

the proceeds,
to rest account.
month directors in¬

office. He is past President of the
Tacoma chapter of the American

$8,400,000, will
Earlier

this

Institute

creased

way

of

Banking.

chapter

Mr.

President

past

a

instructor

and

has

.'service.

In

Parker,

who

his

local

A.I.B.

30

over

years

position, Mr.

new

has

Muzzy
former

and

the

of

been

with

the

bank since 1947, will be in charge
of the bank's consumer loan de¬

partment. He
President

chapter.

recently elected

was

of

the

Mr.

Tacoma

Hodgert

A.I.B.

joined

the

staff of The Bank of California in
1948

will

and

mercial

officiate

Loan
*

With
Los

the

Angeles,
June

on

and

t

wide

*

opening of its new
Calif., Main Office

pletion

of

account
"The

the

will

Calif., is placing
organization
June

Chairman
Directors.

its

on

7

The

Board of

Los

new

more

Angeles

of stock

sue

300,000 shares in

was

shareholders at $30 a share in the
ratio of one share for each four
held"
*

*

According

to

*

advices

a

professional investment

California

J.

Vice-Chairman
board

of

of

Taylor,

the

b

k's

a n

directors, is Senior Ex¬
in

ecutive
and

divisional

Arthur

Southern

Southern

California

Divisional

Head.

chant

is

Bank

there to

carry

chant

Bank

sponsored,

to

be

edge cannot be obtained in
You cannot read

know

securities.

of

H.

O.

Johnson,

complete

First

Western

ported

26

divisional
June

on

offices

in

California

and

Northern

division.

53

Southern

new

Execu¬
will

Each

staffs.

11,

re¬

Southern

offices

in

The

the

bank's

California

head¬

quarters is located at 556 S. Spring

E.

of

Trust

and

Francisco,

it

has

joined the

pany

announced

was

Low

director
man
a

who

has

and

been

named

Ltd.,

O.B.E.,
is

(Private)
R.
L.
Prain,

that

the

*

Wodan

it

and

bank

for business early in

advise

people

If

you. are

acquiring
enable

only

to

my

as

advice to

Business.
the

If

he

Vice-President,.
headquarters

at

Bank,

was

New

Executive

He will make his
First Western's

in

substantial

salesman, then

a

you is Find Another

wish

you

securities

to

business

stay in
must

you

of

with me and study
have better methods

learning than that.

have

sic

training

and

you

sound

with

up

and
some

knowledge.
desk and

a

Some firms

that

courses

are

ba¬

they will set

Others

fundamental

have

only

a

telephone to offer. But

regardless of

the

opportunity for

learning that you may or may not
have, you will have to be your
own

teacher

if

you

going to

are

learn to analyze securities and the

times

you

can¬

There is

edge
ment

when

Stops

it

applies to invest¬
procedure.
The men who

have reached the very top in this
business still spend hours in read¬

ing and study every week of their
lives. -The more you learn the
more you will appreciate that
you
have

more

to learn. The panorama

Desire

to

Enter

are

the speculative stocks and

didn't

you

because

a

Pro¬

it

cyclical

(because

know

any better,
the easy way

was

or

to

make money when the goose was

high) turn
discover
was

sour on you,

that

what

then you'll

what

you

must

But

you

will

night.
dence

as

doing.

are

you

You

This

announcement

gain

counts.

brass.

And

happen unless

these

you

things

two

hours

year

you

curities.

study

can

day

a

1, the

has

been

Confidence in You,

and Who Consult With You

during the first'

on

an

helpful to select several good

as

a

out

too

about

much.

100

medium

Bought

Some

a

Likely

Story,

or

an

Appealing

If

you

wish

vestment

to

become

an

funds

to

growth,

indicated.

is neither

ctn

offer

nor ct

solicitation of

an

ready and prepared
portant work.

that

Handelsbank

of the

changed
N.°V.

to

.

'

Check
you
an

up

to

answer

lem,

work.

or a

prob¬

solution,

ask

your

pass

over

manager,

don't

Be thorough! Look upon

first year in this business

year

learning—earn what
While

You

NEXT

you

L.

WEEK:

offer to buy these securities.

Subordinated Debentures
July 1, 1971
(Canadian )

per

Share

Underwriters and $3,750,000 principal amount are
by United States Underwriters. The Deben¬
tures are being offered to the public in each of said countries only by
dealers authorized so to do by the laws of the respective countries.
underwritten

JUNCTION, Colo.—

Filosa

is

engaging

in

Price 101.688%

a

ties

(U.S.)

formerly with Filosa Securi¬
Company and Ralph M. Davis

from such of the several Underlawfully offer the securities in such State.

Copies of the Prospectus may be obtained in any State only

& Co.

writers, including the

undersigned,

as may

administrative office in San Fran¬
cisco and will
of

serve

committees

general

Mr.

on

on

number

a

addition

executive

membership
rectors.

in

duties

the board

Low

to

was

»

of

and

di¬

elected

a

member of the Association of Re¬
serve

is

a

City Bankers in

director of

tions,

and

Continental In¬
Co., Home Life Insurance

Nichols

Engineering




North

&

Re¬

American

Planning

Planning Cor¬

poration has been formed with of¬
fices
York

at

579

C.

LEHMAN BROTHERS

Fifth

Avenue, New
City to engage in a securi¬

ties business. Officers

are

Barnard

WOOD, GUNDY & COMPANY LIMITED

Luce,-Jr., president and Treas¬

corpora¬

including

surance

Co.,

1932,

numerous

North American

his

urer;

Charles T. Ross, Vice-Presi¬

dent; and Austin D. Graham, Sec¬
retary.

June 27, 1956.

/but

((WHAT TO READ AND STUDY»

Peter Filosa Opens
GRAND

can

Earn.

(Special to The Financial Chronicle)

Peter

as

for intense application and

Canadian

being

When

question

a

the

find

sales

a

your

on

discover that you don't know

$3,750,000 principal amount of the Debentures are being underwritten

by

im¬

Make notes of your interviews.

Company Limited
Due

this

for

(Canadian)

%
Convertible

feet

your

$7,500,000
Home Oil

di¬

income,

or

Get

a

as

obtain

slowly. Don't try to be an
investment advisor before you are

in¬

consultant who can sit

the

them

wet

Leam

Personality and Sales Talk.

try to learn
Specialize in a
Find out what peo¬
use

for

versification,
where

your

Only

Don't

ple need and

lators

Who

them

use

funds.

few of them.

anything.

Stock From You Because You Had

growth, and

starting vehicle. Don't soread

Investment Basis, and Not a Col¬
lection of Heterogeneous Specu¬

Convertible into Class A Shares at $15

name

ac¬

least

at

are learning to sell se¬
In this connection I think

another for

have built

clientele that Consists of Inves¬

1957.

announces

June

over

confi¬

work and learn. You

You

The offer is made only by the Prospectus.

5

won't

know

start out with the smaller

can

thought

you

gold has turned out to be tar¬

tors Who Have

constantly changing. Unless You
the

sales—there are
will not buy

people

situations you have sold

a

short cut to knowl¬

no

when

they think that
"going up" as they will
often do when the public is in a
speculating and confident mood.
If you sell the wrong
securities, if
they

will

Never

you

learn

Mutual Funds, one for income and

nished

problems of your clients.
Learning

If you have confidence in
your¬
it will be because you know

self

it is

periods when

are

securities because

we

have achieved the

you

step toward success in be¬
coming a professional investment
security salesman.
V
" (

be prepared for "ups and downs."

Manual home

Today,

tion, then
first

There

not make the easy

:ji

was

Exchange

where

interested

make

ability to ad¬

your

what

short cuts that will

some

you

commissions

will

ical

Corn

Do So.

to

Must Believe Before You Can Sell

securities business from offices at
215 North Fifth Street. Mr. Filosa

York,

their

on

in

vise and help such people as these
to
better their investment posi¬

Handelmaatschappij

Rotterdam,

company

a

comes

his

confidence

York,

to California and
to First Western from the Chem¬

life, and

takes

seriously and professionally

only

Ltd.,

New

Bulawayo.
will be Chairman

from

as

Vice-Chair¬

practically all his adult

be¬

I

category, and with
feeling of complete

a year

assured

an

(Rhodesia)

expected

open

of the bank's Board, has been

banker

who

anyone

young man back in .1925, I was
told
to
take
Moody's Railroad

a

The Mer¬

Trust

Co.,

on

elected

mak¬

am

fident He Is Qualified

Ltd., Messina, and Leben In¬

vestment

June 20 by T. P. Coats, Chairman
of the bank's Board of Directors.
Mr.

&

Western

Company of San

must

as

institution,
as

Lambert, Brussels, Messina
(Transvaal)
Development
Com¬

Wodan

First

new

que

*

Low

I

because

$100,000

Rothschild Freres, Paris, Ban-

N.V. of

Herrick

.management
Bank

*

work
can

statement

that

meet

you can

established

Rhodesia .and

*

"

you

if

this

Your

a

investment salesman.
lieve

and

well; if

as

in the $10,000 a year in¬
bracket and the one in tjie

come

De¬

to

Concentration, don't try
top flight advisor and

to become

ing

and

man

business in the

on

Selection

Read

Street.
*

But
even

crudely
in my own
experience, when as

as

Attention

bond

a

of Central Africa, is
it is stated, by N. M.

Rhodesian

fornia

is

Undivided

&
Sons
and
Philip
Higginson & Co. Ltd., both
London, in conjunction with

de

Vice-President.

day.

a

few books and

a

Your

Hill,

His counterpart in Northern Cali¬

tive

mand

bought

Rothschild

Dillon,

have

you

advise others you must Know
what you are doing. This knowl¬

is

which will be knowh

headquarters.

man

can

Have

will

Southern

28

London, it is announced in
Salisbury, England, that a Mer¬

The

bank's

May

Security Salesmanship

investments When He Feels Con¬

procedure. You must
knowledge.
Before you

acquire

or

the

investment

from Charles Barker & Sons Ltd.

of

the

re¬

will first of all wish to understand

of

Federation

as

of

If you have the desire to become

612,810, including deposits of $1,170,358,469. The last previous is¬

Nyasaland.

serve

attempting

intricacies

which at April 30 totalled $l,2o3,-

Main Office, in addition to pro¬
viding complete banking facilities,
also

com¬

issue, the bank stated,
bring shareholders'
equity
closely in line with assets

will

state¬
North-

a

basis, it was an¬
by T. P. Coats,

the bank's

of

profits. On

present issue rest
$50,400,000.

total

new

Company of San Fran¬

South divisional
nounced

undivided

1951, when total assets were $840,139,000. That issue was offered to

*

11, First Western Bank

Trust

cisco,

Com¬

as

Officer.

go

by $7,000,090
through transfer of $6,000,000 from
tax-paid reserves and $1,000,000
from

study

to learn is by doing.

rest account

is

are

the

to

and

salesmanship. Most
salesmen need help
during their

it.

"The

Tacoma

the

start somewhere

"Par value of shares
the

master

itself

training

this

tail securities

May 31 in

share

one

shares

Canadian

record

devote

of

weeks

has

many securities, and one
who has never invested in a stock

fession that Never Ceases

Toronto,' first year in the business. The best

Ont., is offering the new issue to
of

will

coming

for beginners who

*

#

During the

and

Highland

Incident to plans to increase its
Bank

(ARTICLE I)

The drive-in is the first

*

Van

Bruce A. Hodgert, Mr. Van Fossen
is a veteran of 40 years service
and

be

the

Following the practice of hold¬
ing a directors meeting annually

the

nounced.

shareholders

v

The Fundamentals of

Monday,

on

who

<

owned

By JOHN DUTTON

July 9,
Frank L. King, President, has an¬
open

a

individual

Highland and Santa Monica Office

to

President,

*

drive-in facility of the

new

Bank of Los Angeles at a meeting
of the directors on June
11, Frank
L.
King,

,

down with

Pacific

Baillie, Neil R. Campbell,
Chaffey, Paul E. Uhl, J. R.
Van der
Zee, all the foregoing
.previously Assistant Vice-Presi¬
Ben

19

The Commercial and Financial Chronicle
20

Thursday, June 28, 1956

...

(3088)

sense—that is, in
Detroit automobile indus¬
the workers should seek jobs elsewhere.
The Republican Governor of Illinois was so shocked that he at
uttering

was

man

plain

very

some

common

nixieieen

years,

unionunaieiy, not

effect, if there is unemployment in the
try

From

Washington

only do the calculated prices fail

properly to evaluate pending

first refused to sit

of the News

his mind.
capable man and he is making a splendid
Secretary of Defense. His occasional sound-off s, instead oi caus¬
ing a throwing up of hands in despair, snould be studied as to their

the Governor to change
Wilson

BARGERON

By CARLISLE

high places to get

It took all sorts of pressure from

Chicago.

Ahead

Wilson's scheduled speech in

the platform for

on

is

a

very

.+77%?.^;+-

truth.

described

as

the Senate to

dollars

billion

Only

inept statements.

in

efforts

a

few days ago he described

boost Air Force

at

insult

the

LETTER TO THE EDITOR:

"phony."
Immediately
purple with rage
some
Republican Senators
a

as

and

Anxiety-Free Market
Appraisal Possibility Doubted

only slightly less restrained. That great
statesman, Senator Stu Symington, often men¬
tioned
as
the Democratic Presidential can¬
were

much solemnity that
Wilson's usefulness as a public official was
ended.
Throughout the country editors com¬

Donald

C.

outlined

by Dr. C. F. Roos in recent "Chronicle" article falls

mented, some caustically, others with amuse¬

short

a

that Wilson was the Administration's
outstanding malaprop.
I always find these explosive statements
of the Secretary as quite refreshing.
I think

of

declared

didate,

with

ment,

he renders

and it
truth

is

or

distinct public service

Bargeron

Instead, the discussion

White House staff is said to

irked. They have indicated to the ailing Eisen¬
that something had to be done about Wilson.

moment. Why is the White House
staff
upset.
Well, it seems the Administration, realizing it
couldn't ward off an Air Force increase, hoped to keep it down to
half of the billion dollars. They feared, correctly, that Wilson's
statement would make the Senators so indignant that they would
just consider this for

a

ignore the Administration's objective. This is, indeed, what the
Senate Republican leaders thought. An effort to pacify the Demo¬
crats was the cause of Some of the Republicans joining in the
of Wilson.

criticism
.In

first

the

place,' the Secretary

eminently correct in

was

phony. There is no doubt that
the Air Force generals will gladly take every billion they can get
and then not think they have enough. This is true of the Generals
and Admirals as a whole. None of them ever has enough men and
a

battle; none of them ever has enough in peace time.
This is not in criticism of them. They have single track minds.
material

in

They are not trained to think in terms of what the economy can
stand.
The President is

a

military

man

and knows the ways of the

military. He and the Chiefs of Staff get together on the appropri¬
ations which the Administration asked for. But then, as happens

leaders of the individual services, slip out the back
door, so to speak, and take their case to Congress. With their tre¬
mendous lobby behind them, including the aircraft industry which
every

Makes

year,

depends upon government spending for about 95% of
the Air Force nine times out of 10 proves irresistible.

its business,

stock

Such

conduct in itself would
a

seem

phony.

to completely prove Wil¬

Half

a

feelings of Senators.
I

recall

In

(a)

than

more

average.

10%

(actual

subsequent

change

in

to

appear

that

saw

In

the

prices

the accuracy

down,

were

diction

based

prices
cated

the

on

1

previous, so-called malaprop on Wilson's part, his
hound dogs at Detroit during the Congressional cam¬

prices

the

of offers to buy,

any

offer to sell,

nor

a

solicitation

of these securities. The offering

.

price

valued

TABLE

in

made

only by the

only

four

Following
price level of

as—

of

remained s'able

than 10%

more

( +

or

—

1

Properly valued

11

2

10

level within

or

Poor's 50 Ind.

Makes

Stock

Stocks Price Index and

Prices,"

Commercial

Financial

and

TABLE




the basic factors used in the

de¬

com¬

However, while await¬

ing

further

such

the decision

automation

faculty,

must

we

of
re¬

DONALD C. MARSDEN

Bernstein-Macauley, Inc.,
341 Madison Ave.,
New York

June

17, N. Y.

1, 1956.

ties

is

engaging in

business

Candler

from

Avenue

of

a

G.

G.

securi¬

offices

under

Richard

at

the

906

firm

Johnson

&

Form US-Can Securities

'

Major Change (say 15% or Greater)
on Actual Stock Levels

a

.

CITY,

*Valuation of actual price levels

•

•

.

•••'.

Exchange

Place.

;

H.

Stable

>

1932__

+21

Stable

*

■

K

-

v

President;
Secretary-

•

Stable

:

have

+45
+34
+19

~

1949______

Stable

Stable

California,
v

the

to

225

staff

of

Co.. Inc.

South

B

e v e r

of

1 y

Drive.

+22

Stable

added

Securities

+24

Stable

been

Columbia

+23

1950

HILLS, Calif.—Ber¬
Alvarado, Harold E. Hale,

Harvey W. Holbrook, John W.
Llewellyn and Leon C. Quillin

+19

Overvalued

<Special to The Financial Chronicle)

nard S.

+42

'

Undervalued

*

BEVERLY

+35

1935

1944___

are

With Columbia Sees.
l

+26

Undervalued

T933—i

Officers

Allen,
Vice
Margaret Allen,

and

+25
+

Stable '

a

Fingard,,J President;

Richard

,

+26

Stable
___

in

subsequent year (% changes)

■

.

J.—US-Can

engaging

Action of actnal price level in

Dr. Roos' calculated prices

per

N.

is

Inc.

securities business from offices at
Edward

-

+40

Four With J. D.

Creger

(Special to The FijAincial Chronicle)

declines—

Stable

—19

Undervalued
Overvalued

—56

Overvalued

—96

Stable

—24

.__

1937

Actual

WHITTIER, Calif.—Howard C.
Cantonwine, Donald W. Creech,

—30

1920'_:_„_-_„

price within

+

or

—

10%

of calculated price

.

H.
/

Stephen

L.

Root

King

have

with J. D.

and

Lawrence

become

affiliated

Creger & Co., 124 North

Bright Avenue.

level.

Gearhart & Otis, Inc.
Trinity Place

be

through refinement of

Treasurer.

♦STABLE

74

at

Securities

H

Stable

be obtained from the undersigned.

to

a greater degree
valuation can be

of

accuracy

arrived

1

Stable

Years followed by

may

of

7

Chronicle

1942

Offering Circular

much

Co.

Tables II and III

,

Years followed by increase
in actual, price level—

i.

left

danger/. Perhaps

name

10% of

—

May 12, 1950.

Offering Price: $1.00 Per Share

preceding major price

JERSEY

"What

'

mediately

•

SOURCE: Standard &

(Par Value $1 Per Share)

preceding
only
minor
price
changes
was
encouraging,
the
performance- of
the
calculated
prices in valuation of years im¬

(actual price

+

calculated price)

T928__

The

10%)

1
2

299,950 Shares of Common Stock

in valuing market levels in years

Johnson

Actual price level

1

•

the degree of accuracy displayed

these

7

-

mental

the market, has faded away. While

seri¬

showed:

price level of

than 10%

more

years

Deer, in actual

1921

Company

greater

in predicting the vagaries of

R. G. Johnson Opens

Incr. in actual

1926.:

The Sessions Clock

be

to

tighter grasp of that

a

will-of-the-wisp,
ease

under¬

Overvalued by more than 10%

ISSUE

premise

SHREVEPORT, La.-Richard

1927

NEW

or

3.

Offering Circular.)

enjoyed of

I

1924

is

latter

the case, and the vision we at first

indi¬

being

as

of the Annual Average

an

the

sumed

The

correctly

market

ously either overvalued

Years Immediately Preceding

(This announcement is neither

practical tool for

a

as

investor, then the

pre¬

low.

2.

The welkins rang with the professed wrath of the
and the anguished screams of the Republicans. Yet the

hard

putations.

of

Undervalued by more than 10%

in

the

to

If, however? this system

designed

calculated

appallingly

was

calculated

price
levels in

price indicated actual stock
market

did not do

calculated

actual

confined

main reconciled to the continued
necessity
for
the
exercise
of
However,
judgment based on a variety of
diately preceding these of major intangible as well as tangible fac¬
changes, the years when the chips tors in analyzing the market.

The results be¬
well worth Dr.

the

"reality," then this is a
philosophers and not

for

under review.
in the 19 years imme¬

price

Dr. Roos' calculated

years

of

system

19 of the 36 years

Roos' claims. However, a note of
uncertainty began to arise when
we

riods

.

degree of change.
gan

accuracy

(3) Actual stock prices -showed
major
change,
say
15% ;; or
greater of the annual average, in

the calculated price
calculated price cor¬
indicated the direction of

level although not necessarily

are

First of all—if this
system is devised solely to indi¬
cate the "proper" level of actual
stock
prices, around which the
market may fluctuate widely, im¬
pelled by fanciful or intangible
reasons and only approaching the
calculated price in occasional pe¬

annual

the

a

than

more

of

satisfaction with The system.

the

rectly
the

price

as

much to lighten our growing dis¬

prices

below

level),

10%

A percentage of

here of less than 50%

10% above the calcu¬
level) or (b) as under¬

lated price

valued

(actual

than

more

the

overvalued

be worked with

can

apparent.

fluctuations

nine ; out of the
twelve years in -which the calcu¬
lated prices reflected the market
as

years,

indicated

was

or

does

properly valued, 13 years were
sired. .=,( Prediction
based
on
a
followed by years in which the
."mathematical" valuation of mar¬
actual price'1 levels j changed ' by
ket levels appears fraught with

in

clear the basis for criticism:

(1)

However, of these 24

when the market

shown

are

levels.

pretty

tables. The fol¬
lowing comments, however, make

paign of '54.
Democrats

results

the accompanying

a

reference to

two

ingly enough, the tables showed
1937
actual
prices as being a

in

1.

billion dollars is en¬
tirely too much for the taxpayers to have to fork up for the ruffled
son's statement that it is all

increased

article;

Prices?"

May 10th seemingly

1925304

Detailed

as

tically the full increase of a billion.

Roos'

1920-1955, revealed some
profound shortcomings.

reflected

having been in the mood to compromise with the Administra¬
and only add half a billion to the Air Force appropriation.
But Wilson's remark made them so indignant that they voted prac¬

F.

Stock

overvalued,
prices
percent. ' Interest¬
actual

1937

in

system

shortcom¬
ings revealed by our examination
are very real indeed.
We have as¬

considerably

as

whether

to

as

Roos'

Dr.

the

new era of

a

another

tion

Conclusions
not

is

market

phase of the tempest stirred up by
Wilson and the pain he has given to the White House staff.
It
is a sad commentary on the Senators, indeed.
They are pictured
consider

Now

ceptible.

present.

anxiety-free jproper evaluation of the market
and in 1938 actual prices dropped
appraisal for the
"informed" few. However, closer twenty-four, percent;
examination of his "mathematical"
(2) In 24 of the 36 years under
system
of calculating
"correct" review the calculated prices were
within 10%
of the actual price
stock price levels over the period
heralded

V

describing the Air Force boost as

the market with
of certainty,
but no apparent pattern to their
deviation
appears
readily
per¬

•reality of decision making in the

Stresses importance
tangible factors in

then

hut

\

Charles

"What

your issue of

be considerably
Now

variety of intangible as well as
analyzing; the market.

a

Dr.
Carlisle

always turns
his facility for saying the wrong thing.

hower

practical tool for the investor.

Chronicle:'

more

In this most recent instance the

as

Editor, Commercial and Financial ;i936

with them

than passing strange that the
merit of his cracks receives little at¬

tention.
on

a

degree

investors

Marsden, Investment Counsel, maintains system

cru¬

in

reliable

now

appropriations by a

Democratic Senators became

changes

work and

propaganda being what it is, Secretary of Defense
Wilson finds himself frequently in hot water because of what are
Political

the

cial

any

OVERVALUED

Actual

price

than

more

10%

above

calculated

below

calculated

price level.

New York 6, N. Y.

UNDERVALUED

—

Actual

price

more

than

10%

C. M. Downing Co. Formed
C.

M.

Downing & Co., Inc. has

price level.

WHitehall 3-2900

i

•

.

:

been

?

.

SOURCE:
Tables

and

■»

1

Standard
II

and

♦

*

-

&

*

formed

with

offices

at

15

*

Poor's

III In-"What

Financial Chronicle, May

50

Ind.

Makes

Stocks

Stock

12, 1956.

Price

Index

and

William

St.,

New

York

City,

to

Prices"—Commercial

engage

in

a

securities business.

'

Volume 183.

Number 5546

The Commercial and Financial Chronicle

...

21

(3089)
v

i

Continued,

from
I

'

5

page

this

*

I

'

>

4

»

,

r

*t (

Public

Observations...
One of the best ways, we

feel, to insure

a

than

baby is to start investing NOW regularly in the excellent growth
companies of America. There is no time like the present for
commencing such a program, for by procrastination it is surprising
how da,>s and even years
We

members of the New York Stock

are

department.
shall

We

ahead.
In the meantime,

../O.

/,/
we

tunity to congratulate you on the new
,

,

sent

letter

circular

to

on

are

be continued in order to

is

in

rapid

its congrowth.
The
increased

revenues

the

past

while)

decade

electric

utility industry as a
gained only 140%. Florida's

residential

in that industry where the
common stock promises a;

continuing

and

whole

benefit from such

have already established opin the area served by

erations

341%
the

°Pment Department is at its high- year-end rate base (currently the
es* leve*
activity.
company is earning about 6.3%).
Many
nationally-known
con- Moreover, all the company's rate
cerns

company's

world-wide economic events

Select a "special situation"
profit potential for the
ceiling unlimited.

served

commercial 26% and indus-

sistent

for the next decade.

(3)

million
1956

construction

for

vs.

the

first

$213

was

4

months

$202 million for the

of

same

Florida p- & L. The factors that
brougbt General Electric and
^bese other manufacturers to Flor*da sbould bring many hundreds
°* others. Climate is the main
asset> since it enables industries
requiring highly technical personnel to attract these employees to

lhe state-

Florida today has almost 4 million people, and the Census Buabove.,last year. For the first 4 reau estimates that by 1965 it will
(1) It sits astride important trade routes of the Western World.
months of 1956, the company con- reach the 5 million mark. This
It has a veritable storehouse of basic mineral deposits at hand and'
nec'ted 7079 neW services vs. 6659 should make it the largest state
in prospect that , "hard money" is trying to, buy./'This mineral
last year. For the first 5 months in the Southeast and the tenth
wealth is needed to implement the economies of capitalistic na-'
revenues
gained f 131/2%.
Share largest in the country. Industry
tions as they progress under the aegis of Article 2 of NATO.
j. . v>. earnirigs 'are- running- sh a r p 1 y and commerce will have to expand
(2) There is an ever-expanding demand for the basic supply
higher this year.
in the area to serve this rapidly
that this "special situation" has in hand and in prospect.
Herein
A very favorable factor is the increasing market as well as the
lies the future of profits unlimited in the decacie ahead, . . . as
new Sunshine
period

last

Non-residential

year.

construction

such a "special situation"! ^

believe that we have found

We

also

was

slightly

Skyway—a 15-mile

forward without surcease to knit more closely
crossing spanning the mount of
the economic warp and woof of international trade.
In the final
Tampa Bay, and converting the
analysis—this is capitalism's answer to communism ! !
peninsula on which St. Petersburg
(3) This "special situation" has contracts in hand and others
is built to a funnel for north and
in various stages of finalization.
About a year ago (using our
south bond traffic and trade.
In
the first full year of traffic
proven methods) we calculated and published a profit potential
on
of 12 to 15 times the tnen market price of this [sic] "special situa- ,
this bridge, revenues were 57%
tion." We shall be forced to double these price projections (more
above the forecast, and they are
or
less) as soon as current negotiations are finalized.
These- now running 10% ahead of last
projections appear to be only the beginning! !
year's. The new Florida Turnpike
Small wonder that hard-headed clients of this office, who
under construction should
be of
have studied all the data we have mailed to them, report that they
direct benefit to the area served
are
accumulating—by "dollar averaging"—large blocks of tins
by the company. Many additional
miles of 4-lane highways will also
"special situation ' stock for long pull holding.
Since—"intensity for value bids with time"—may we suggest
nendi'n e Feriprii nfphw/v ptn®
that—as of now—you owe it to your financial future to at least
pending Federal
Highway Program is enacted.
The total conprocure and peruse copies of all the data that we have released
great nations move

clients.

thus far to investor

struction

Respectfully submitted,

cost

loadbuilding
amount to
The

of the company

into class A shares

Offers

Lehman Group

Home Oil Debentures
offering was made yes¬

Public

$7,500,000
converuole
subordinated debentures, due July
1,
1971.
One-half of the total
principal amount is being under¬
written by United States under¬
writers headed by Lehman Broth¬
Co., Ltd. 5%

offered

and

ers

of

2 7)

(June

terday

Home Oil

this country,

in

half is being under¬
written and offered in Canada by

and the other

a

Canadian

by
Ltd. Princi¬

managed

group

Wood, Gundy & Co.,

pal of and interest on the deben¬
tures will be payable in Canadian

offered in
priced at
101.688% and at 100% in Canada.
Net proceeds from the financing
will be added to the general funds
of the company and be available
for
expenditure
in
connection
with expansion and development

money,

The debentures

United

the

States

of the Home's

corporate pur¬

The company, incorporated
Canada in 1929, engages in the

poses.
in

exploration for and production of
crude oil and natural gas. Sales
during
March

and

the
31,

net

three

months

1956 totaled
income

ended

$415,308,

sales of $1,-

665.967 and net income of $192,875

The

debentures

major

programs

will

over

of 1955.
are

convertible




south of us-

approved by the Federal
Commission, will be serv¬

Suwannee

the

addition,

company

In

will pur¬

Plant

River

This

principal amount annually to the
extent such purchases can be ef¬
fected at less than 100%.
They
also are redeemable at the option

prices ranging
105% to 100%, plus accrued

from

Almost

&

Inc.; Lazard, Freres & Co.; Smith,

& Co.; Stone & Webster
Corp.; White, Weld &
Co.; Allen & Co.; J. Barth & Co.;
J. C. Bradford & Co.; Burnham &
Barney

Securities

Co.;

and

New

York

Economou

Opens

we

offers

so

serve

much

opportunity
to

for

for

watpr

sales

ert Jesberg

of residential

con-

heaters

and

of 28%,

ranges

*n t(fe "firs?

Annlianee

16%

four'months

of

This announcement is neither
an

is

now

.

an

offer to sell

nor a

at

436

West

Twentieth

Street, New York City, to engage
in

a

securities business.

will be known
omou

as

Associates.

His firm

Arthur N. Econ¬

solicitation of

offer to buy these securities. The offer is made
Prospectus.

Offered

only by the

as a

Speculation

150,000 Shares

HELIO AIRCRAFT CORPORATION
Common Stock
Par Value $1.00 per

Price:

The

$6.00

had

Corporation

per

Share

Share

financing

on

behalf of Helio

outstanding

tion Note due

COPY
Box

d'AVIGDOR
63

Wall STREET

may

he obtained from:

COMPANY

NEW YORK 5, N. Y.

•

•

WHitehall 4-3405

899,

Dept

K

Salt lake

d'AVIGDOR COMPANY:

City 10,
Utah

Please send

me

Aircraft Corporation

UTAH POWER
& LIGHT CO.

Serving in Utah
Colorado

-

-

Administra¬

February 10, 1961.

industry.

FREE

9

February 25, 1956,

Note, due April 1, 1958, and $20,000 Small Business

Copies of the prospectus

%

otr

(Par Value $1.00 per Share),
of Convertible Notes, a $20,000 Promissory

204,824 shares of Common Stock
$8,000 face amount

a

copy

Idaho

Wyoming

of the prospectus relat:ng to Helio

Common Stock (Par Value $1.00 per Share).

Name

Address

City & State...

York
Ex,

He was previously with
E. F. Hutton & Company,
changes.

Arthur N. Economou has opened
offices

affiliated with

J. Barth & Co., 4;04 Montgomery

NEW ISSUE

Write for

Hanseatic

Corp.

A. N.

50%

where

explains why the

group

Co., Inc.; Blyth & Co.,

■

sumers heaters—versus ranSes an<i Street, members of theStock
use electric
New
water
a
national
q
Francis™
average

AREA RESOURCES BOOK

clude: Bear, Stearns & Co.; A. G.
Becker

-

This offering represents new

offering
in this country, in¬

the debentures

0

Aircraft Corporation.

area

of the

p.

reduce costs and improve operat-

service is cheaper than oil.
saving will of course be

interest.
Members

-

ing efficiency.

the company at

of

-

North

in

fuel costs at company plants
gas

~~

~

~~

--

$225,000 passed on largely to the consumer.
The availability of natural gas

retirement

for

chase

redeemable

and accrued interest.

100%

at

PE-ratio based

the

Drice

that

first 75,000 kw unit went into on the estimated,. 1956 earnings is
service, and the: second will go 18.2.
in this fall; in early 1958 the first
120,000 kw generator is scheduled
Now With J. Barth Co.
to go into operation. The instal(Special to The Financial Chronicle)
lation of these larger units will
SAN FRANCISCO, Calif.—Rob¬

1,
Florida at a saving of 25% under
1961 through July 1, 1970; at its
the cost of oil. The contract price
option the Home may retire up to
with the Houston Company will
an
additional $565,000 in each of
those years. For the sinking fund permit at least a '20% saving in
the debentures will be

At

company's

the

November

Last

bepi selling •*: to yield 3.3%

49

proposed natural gas pipe¬

if

Power

annually beginning July

clause—the latter being based on
construction cost index,
The company has maintained a
heavy construction schedule and
expects to spend about $33 million
a year over the next two or three
years. Future financing is expected to include $20 million
bonds in the near future, a cornmon stock issue in the late sprmg
*957 and later another bond or
preferred stock issue. . ./■ ••. • .
Earnings for the 12 months
erded May were $2.51.(a share,
compared with $2.3,0 for calendar
year 1955. President Clapp eslinvi,es earnings ior this calendar
year at $2.69. The dividend rate
is .now $1,60 but with a payout
P^cy of 70r7o
an increase
womd appear to be. in the offing.

a

$650 million.

require ing all the companv's major power
the
company
to retire $56o,000 plants by 1958. The company is
principal amount of the deben¬ already buying natural gas for the
tures

schedules were adjusted to include
a fuel clause and a commodity

markets among the 35 million
People in the southeastern states
to the o°rth and the 45 million xhe stock has
People in the Caribbean area cently around

Sinking fund provisions

$2,000,744

was^

which compared with

in the first quarter

(Canadian) per share.

$15

line,

two

of these

are

business and prop¬

erty, and for other

at

small

regulatory troubles years ago with

industries

17%.

Florida

capitalist told me once—if you want to amass a
fortune in the stock market—you must:
A hard-headed

Find the industry that is destined to
over-riding economic conditions.

average

r

+

c

trial

DEAR SIR:

Foresee clearly the shape of

The

country.

lnclodes two of climate seems assured for the next cost of $2,500, and the heat pump
cSt gpTlnS areaS ln f°Ur years' at least' as Governor brings in- additional revenue of
mi1tersb"rg and Collins and his administration re- $174 annually to the company. The
S!^bsidiary' cently received an overwhelming objective is 25,000 units by 1961.
SS! bouth r!g ' -serves endorsement. An active advertisl Georgia.
While Florida Power Corp. had
counties m
ing and development program will

nues,

(2)

coun-

dairying, lumbering, naval stores,
fishing and sponge fishing. Residential sales provide 43% of reve-

a

(Financial Consultant since 1927)

(1)

1075

.

attract the old Pinellas County Board, its
packing and canning plants, new residents and new industries, relations with the State Commisphosphate mines and lime rock The State Development Commis- sion have been much happier. The
mines. Other important factors are s*on *s swamped with inquiries, as Commission granted the company
agriculture, raising of citrus fruits ^re the Chambers of Commerce. a rate increase in August 1953, al¬
and
vegetables,
cattle
raising, The company s Industrial Devel- lowing a return of 6.45% on a

(Modern version.)

"special situation."

1298

citrus

AGED

expanding

columnist,

your

system

and north™estern in a Florida location. Also, Flor- home can install year-around airif p°p"latl°n °f lda's favorable political business conditioning at an approximate

Principal

arrival.
Very truly yours,

INVESTMENT ADVICE FOR THE
A

iq

•

again wish to take this oppor¬

once

its

•

be

us

on

.

^

IA
thP
^ jf t f
Or^ncrp
ppnrffa

We wish to place these facilities at your disposal.
be only too happy to discuss our views as to the

years

,

Exchange, and among
of our fine research

securities, with excellent growth possibilities. Won't you
of service to you? We know you won't regret it in the

proper

ox-,

FlnriHa

excellent facilities we are proud to boast

our

let

fly by us.

units

other utility, with

any

residential — approximately 40%
T
Fov/er. Corporation s industries will now newinterested of all heat pumps in use today in
means that certain be types of
area
consists of 31
the

vwi/io
service

last

above

commercial installations and

Florida Power Corp.

good life for your

of these

more

By OWEN ELY

that life

18%

were

President

Clapp feels that
the
electric
appliance with the
greatest
potential
is
the
"heat
pump."
Today the company has

Utility Securities

the baby the best

We wish to congratulate you, and to wisn
has to offer.
*

girl.

year

year.

,

....Telephone

22

(3090)

The Commercial and Financial Chronicle

Thursday, June 28, 1956

...

"""

J

Continued

from

business

4

page

has

almost

investment
that

business

very
many

In

Aiding the Free World
sent direct exports,

their

peoples to do so. Even so,
seems
probable that in their

it

zeal

they

too

ernment

which

allocated

have

I

to

is

huge total indeed.

a

great

as

product

Effort

positive

the

to

side,
role

perhaps
the most
helpful
developed by governments in the
postwar years lies in fields that
involve cooperative effort on the
part of two or more nations. The

to

the

and

can

does

national

industrial

from

is

with

ness

as

health

of

Europe, as well as to
America, Southeast Asia and
areas.

and

Impact of Our Exports
believe

been

unusual

an

spects.

the

It

has

opportunities for private business

extraordinary

rather

sections of the world.

justment

contribution which increases the

same

than

reduces

be

can

said

them.

the

for

The

struction

various

and

ried

out

under

so-called

tainly,

the

is

Geneva

and

GATT

there

of

one

the

tariff

on

profound

of

that

changes for

it

is

trend

a

the

international
which

over

field.

It

nificant

continuing vigi¬

is itself

play

lance, reassuring themselves con¬
stantly that government is indeed
acting to serve the best interests
of its citizens.

of

is

of

their

meaning

tional

it

\

be

can

to

for

business?

1

as

of

American

business

today

When

vital

to

When

us.

one

of

producers develops a
copper supply in Africa, he
tributes
fense

both

and

to

to

nation

that

whose

highly.

This does not

national

interest

is

mount

factors

cannot

and

private

of

mark

matter

of

these

before

recognized,

a

third consideration
the public
interest. The problem of
manage¬
ment
is
to
be
cognizant of all
three and to move ahead in
—

har¬

mony with each of them.

We should look for

the

record

of

a

business

is

many

But

business

today

uting to the world economy. All
•jold, American companies now are

providing products to other coun¬
tries which, it is
estimated, have a
value approaching S35
billion. Of
this total some $15 billions
repre¬




a

have

a

rather

I

the

extended

Middle

trip

East

who

One

traveling

are

them

saw

every¬

where, in Beirut, in Cairo,
and

mascus,

in

even

fastness of Arabia.

ir?

the

Da¬

remote

In addition

to

never

ments

from

flow,

4%

our

of

or

for-

or

exports

our

that

gross

foreign

are

less

national

earnings

which are remitted to the
United
States represent an annual
return
of

I

only 8%
know

ther

on

that

capital investment.
many

firms

remit

part of thqir earnings and
good share is used for fur¬
expansion. And I am more
a

a

impressed by the fact that a cer¬
tain
large machinery producer,

which is

a

helped in
least, by

the

initial

good customer of ours,
third of its product, or

exports a
that another domestic
producer of
national repute with which
wc

do

It

is

no

stages,

at

some
rather
generous
credit arrangements facilitated
by
the government at Bonn.

than

more

cumstances

the

terms

in

trend

same

America,

closer to

and

us

is

evident

in

market which is

a

one

that in recent

have

taken

too

1947

the

In

United

States supplied two-thirds
Latin-American imports.
Ad¬
mittedly this was artificially in¬
of

flated
At

by wartime
rate,

any

had

by

1950

down to 52%

come

it

developments.

has

share

our

and

gradually

since

slipped

to 48%.

trend

it

of

these

turn

may

recent

many questions that might be ex¬
plored today—questions to which

How

answers,
Are

we

that

I

in

electrical
America

of

But

there

as

is

as

whicn

that

rules

of

the

growing
Bloc

activity

areas

in

world

the

markets

ticularly to its efforts
trade

relations

of

lightly.

The

Soviet

industrial

an

only to

•

par¬

under¬

with

them.

Indeed,

dangers

ability

now

to

the

foreign trade

use

instrument

of

at

work

Southeast

the

market

1954.

has

Soviet

for

exports,

against

as

taken

and is

in

of

only

over

part

major

a

with

of

and

about
are

Soviet

recently

25%
now

of

reported

Burma's

flowing

im¬

from the

Bloc.

on

West

245%,

greater
Other
diesel

in

a

There

Soviet

that

serious

to

Latin
third

a

result

basis,

and

been

risen

livery has

ri¬
m

some

factors.
made

are
a

limited

which will

in

to

offer

number

have

and

de¬

not

can

sary

afford
for

the
the

the

particularly how to enlist
of private capital.
at

the

record

a

mixed

tunities
where

in

to

develop

welcome.

capital

East stand

out

the

hand,

other

and

total

number

than

seem

tractors, while

actually
ours.

to

many

of

But I do not think that we can
take any very great satisfaction

ship

from these particular

ours

past

experience

incidents,

should

as

demon¬

On

been

urgently

needs

assistance.

There

are

many reasons for this

mixed record of investment in the

under-developed
ten

one

of

the

areas.

most

are

now

have

we

in

least successful in Southeast
Asia,
which is an area that

Britain

supplies has not been satisfactory.

been

Middle

in this regard.

cations

Soviet

has

the

or

and

countries

and

by

of

resources

Certain

America

most

oppor¬

abundant,

appear

outside

Latin

where

areas

taking longer than expected.
flow

we

American

We have been

one.

successful

there

the

of

the sup¬

When

companies in the lesser developed
countries, it can only be labeled

And

that

World
neces¬

under-developed

off

indi¬

be acceptable.

The big problem is how to
organize it, how to manage it, and

form

of

appears

Western

auentlv this finds

number

help,

areas.

eries

a

alterna¬

investment

always been good.
Both Argentina and
Britain, .for
example, have found Soviet deliv¬
are

least
more

The

such

never

Certainly

bitateral

thus far the items that

Soviet has had

Brit¬

in

limiting

arrangements
other nations on

with

the

must

is

anproacn

assure

stable and

a

provided

those

producers

the

trade

a factor here? What
Then again, I notice
of farm tractors

Germany

in

very

dropped

ex¬

a

position.

gidity

Trade

of

to

petitive

heavy

sales

strength,

mistake

a

com¬

exam¬

of

ship to Latin America is
while

would make

field

the number

30%,

we

aggerate the Soviet Union's

attain¬

at

mere

markets

Yet with all its political

that

stand-off in the race
with population
growth, a solution

port

"Times,"

example,

that

a

look

supplies to Burma, India
Indonesia. The New York
for

without

Afghanistan

of

an

one of our

do is to

future.

tive,

of growing flow

source

bil¬

that

not

are

can

progress

to be

a

it

countries

steady

Last

Asia

order of $13

estimated

What it

productive

see

Egypt s
14% in

is

gives hone for

a

provided

Southeast

trade

the

Asia.

Bloc

one-fourth

And

external

We

under-developed

the

It

most

a

already in the Middle

and

year

in

able.

its

as

the

on

any
revolutionary results over¬
night, but revolutionary results

foreign

policy, regardless of cost.
East

is

just the re¬
their capacity to
capital is lim¬
total
investment

so,

are

being spent in 1956 by

gravest

Soviet

on

under-de¬

largest corporations.
This $1
to
$2 billion obviously won't
produce

disposing of

of the

one

from

deliberate

in

the

on

short

relatively

to $2 billion
yearly
is about all that could be
handled
in the near future—less
than is

to costs and rela¬

as

in
is

billion.

capacity second

allies

long

additional $1

the Soviet Union too will have its

tions

is

lion, and of this amount, foreign
sources,
public and private, fi¬
nance
something more than $1

surpluses, and it will have fewer
compunctions

our

one-

,

States

Today,

areas

it is expanding
The day will come when

rapidly.

barely

increased

ited.

expand

Union

while

underdeveloped

while

Even

yearly

Soviet

and

the

and

absorb

and

ours,

all

United

verse.

con¬

to

is

billion

one

areas,

veloped countries

developed countries. This is cer¬
tainly not a matter to be taken
has

of

capital

the

with

these

believe.

us

combined.

The

mentioned

of

have

population

power

I refer to the

game.

in

a

proportions,

at least

are

manpower,

I

which

as
great. But such a com¬
parison ignores the vital fact that
our
$400 billion economy carries
about three times the
productive

being less friendly, and
apt to play by its own

is

as¬

compli¬

a

in

one

—

sixth

mid¬

source

is

course,

would

some

own

International

anotner

us—one

earlier

of

process

people

increasing¬

competition that is rising to

aid

Underdeveloped Countries

True, there

that

a

to

all must cooperate. Yet it is not

subsidi¬

is

investment

Already the Soviet

task of
unmanageable

toward

or

of

governments,
international
or¬
ganizations and private business

Competition

told, for

Germany have

Is price

about credit?

up

prices?

1951, whereas those of

50%.

we

our

companies

ain and West

that

am

the

have

the final

competitive

equipment

American
since

are

staying

this score?

ple,

to know

keep us on our toes.
challenge limited only
field.
Perhaps of
greater importance
is the

sistance,

of

ica

I don't pretend

the

export

to

cated

cir¬

out

years

in. such countries

ports

Our experience in Latin
Amer¬
and
the Middle East raises

be

For the Western World such

countries

In

we.

establishing branches

it

The

Latin

may

com¬

in

bankers!

were

that the Germans in
par¬
ticular have been
making a strong
bid for trade in the Middle East

granted.

other, I am
impressed by state¬

much

who

any

we

are

gentleshadows

secret

for

I already

engage

the

previous

years

if it failed to be
prof¬

Somehow

that

as

American

not

these

in

trips, but for some
reason
I
suddenly was highly
conscious of them,
particularly of

both

foreign investment

ign business
itable.

on

Perhaps

remained

much

management

benefits

would

ment

to

us

to

form

Aid

Britain, Germany and Japan,
must
export or die, will
have a need to
sharpen their pen¬

front

and

us.

Union
has
extended
credits
to
these countries
amounting to more
than $500 million.

course,

like

we

was

in

One-Way Flow

suggested.

than

friends

our

must

a

us.

new

their growth.

pattern of trade.

ahead—in

Soviet Type

clear that

upon

of the major

one

that might be offered
under-developed countries in

the

more

dollars

ly* to the advantage of all.

Foreign

First, I think it is

then

Not

these

panies

that

degree to
is contrib¬

Heavier

are

prices

are
higher. Moreover,
importance to Britain,

Benefits

only

the

competition

exports
are
undoubtedly larger
than they otherwise
would have
been.

undemanding

of

diverse

recent

stronger,

great

to determine how it
is discharg¬
ing this international responsibil¬
ity. 1 doubt that there is wide

which

800

some

study
suggests that

them

standards
of

a

and

product

moment at

American

coun¬

advanced

such

of

one-way

never

has

companies

and

degree

not

this proc¬

as

on

fact,

not

a

it

as

busi¬

today, in

tech¬

companies operat¬
today, and they have

trade

added

countries

American

again

Britain

it

Britain

be

be

been

American

country

a

v/ith them.

often

of

benefit from

expected to carry
out ventures that are
inconsistent

must

has

States

lower,

sole

Yet to the interests of
shareholders and employees there

last
than

under-developed

that
Even

because

or

ness

Expect

throughout

of

chemicals, autos, heavy
machinery and food processing. As

we

The interests of
shareholders and
employees continue to be para¬

total
the

other

And

Great

of

the

dle ground that works

took

have

more

capital

and

the

fields

mean

the

I
be

is

a

of

aries

expect heavier competi¬
tion in the period ahead. I
recently

activities,

at

benefits

their

primary consideration in deter¬
mining the shape and extent of
our
foreign trade-and investment.

that

lands—a
much

which

in

friendship

These

billion

and

ing

dia, it affords much needed help
a

abroad

companies

But

left

of

of

so,

which

a

road.

$18

United

de¬

rise

a

Even

imports will, of

period

some

hope may help to pointy
the way for some of our delibera¬

all

branches

manu¬

as

the

observations

Japanese.

only

funds for capital imports into In¬
tc

broad

I

that

new

standard

our

part, I have only

own

rather

tions.

the

to

niques of management and

Jiving. And when an American
investment firm provides dollar

value

American

other

con¬

future

our

turns

one

facturing.

our

metal

my

few

in

the

is the

the

to

be

cils

salesmen

the

tries

billion,
third.

a

distortion in

factorily answered this afternoon.

Americans, there were Germans,
Dutch, French and even some

ess.

the

lem may continue to
plague indi¬
vidual
nations
and
cause
some

These

and

research,

States company ships specialized
machinery to Western Germany,
it helps strengthen an area which
is

self-interest?

own

impressed with the variety
and number of
missions, engineers

in

reap

as

to

spread evenly throughout
the world, so that the dollar
prob¬

public

through

a

United

a

the

poured into these endeavors. They
represent the main channels

are

national interest

a

before.

never

for

States

money

"whole, the international activities
.tinged with

both

the tangible results
huge investment which

almost

believe

taken

our

receiving

are

counting.

is

$16

from these

prob¬

and

of

But it is another factor that
act

Nor

con¬

if

both

trade

expect

this

even

than

ad¬

exports

contribution tends to

the

made

interna¬

our

that

what

—

First,

said

of

our

United

both

in its operations abroad. We
might
now ask ourselves what
these de¬
up

when

iof course,

the

on

our

countries

subsidiaries

feel

the responsibilities and
opportun¬
ities that face American business

velopments add

the

activities

recent

bearing

a

which

underestimated.
of

some

developments

years that have

This high propor¬
index of the sig¬

Indeed,

grow.

will

Competition

and

broad

role

in

It

Abroad
are

an

to

not

in

Russian

be

assistance

not

are
not easy questions and I do
not suppose they will all be satis¬

them.

importance of American Business
then

efforts,

which

manufacturers.

those in all

imports should also

our

do

viets.

likely to
time,

some

our

are
necessary food and raw mate¬
rials
or
machinery essential to

must

These

almost

for

the

to

the

certainly

squarely
just

phase of the
continuing struggle with the So¬

Not only

other countries

production.

of

apt

World nations

loser

price, quality and monetary con¬
siderations. It might even be that

For

tion

a

that

I

it

military and aid expendi¬

our

ceed

these, what is the outlook for
United States business abroad and
where can we best concentrate

three-fourths of shipments either

lands, including the United States,
maintain

evident

gen¬

that

Certainly we must all be pre¬
pared for greater competition in

and

is

upon

high level of which it is capable,
imports a decade hence may ex¬

left

difficult

of

any

or

future.

near

of

power

becomes

legacy

a

extent

effect

Free

American economy Operates at the

of

and
been

have

we

from

shortage

the

tinue

lems

over;

when

expansion

and

suffers

dollar

but

Free

period

a

the

are

achieve¬

determine

and

questions before

world

stay fairly heavy

which remain
unsolved, both
political and economic. In the face

aams

world

Europe and Asia still use our
agricultural
materials.
Indeed,
one analyzes our export
list,

Cer¬

government, both domestically
in

the

ern

world business in recent years has
been the vast growth in the role
and

building roads,

seen

facilities; specialized
machinery is being installed in
new
factories; and much of West¬

Con¬

denying

with

equipment from America

railroads

new

trade—the

program.
no

con¬

electrical equipment is going into

and for the Colombo Plan in
Southeast Asia; and for work car¬

rope,

ference

be

can

technical assistance programs; for
activities of O.E.E.C. in Eu¬

the

Heavy

a

in many re¬

one

been

face

This is

are

to the continued

as

the

its

Colombia

eral

and

the

of

in

what

will in

enterprise in our own
But the past decade has

impact of our
exports is readily evident in most

a

needs

welfare

well

country.
I

great

industrial

the

vigorous activity is making an in¬
dispensable contribution to the

World,

make

its

in

ments

slipped lower, ap¬
parently because of lack of dollar
exchange. I personally doubt that

for

of

remarkable

competition

and

newsprint

shadow

a

of

We have to look the facts

Europe, while shipments
friendly neighbors like Brazil

tures in

not

capable

Western

Venezuela

and

ore

difference?

a

to

doubt but that United States busi¬

Latin
other

from

strate that in spite of certain cru-

oities of approach, the Soviets

all, wh^t about dol¬
availability? The big increase
our
exports last year was to

in

Canada.

There

of

countries

complicated

oil

iron

measure,

Western

growth

Bank,

example,

of

rather

Are we adjusting
changing needs of the mar¬

Does this make

And above
lar

and the Middle
East, copper from
Chile and Africa, and, in
growing

It is almost

entire

be

without

us

Western

work of the international agencies
is a case in point.
Tne World
for

would

Germany,
whichvtoday'is a major exporting
power,'and it is larger than that
of all Italy. Moreover, this contri¬
bution of America is being made
throughout the whole Free World

Intergovernment Cooperative

Looking

the

as

provides a
essential margin for a great
important companies in the

materials which the United States
obtains
from
other
lands.
Life

maining $20 billions represent the

bound to prove to them.

abroad

Nor must we
forget the significance of the raw

re¬

gasoline.

use

to the

ket?

United States today.

output of American branches and
subsidiaries located abroad.
This

gov¬

a role—a fact
experience
is

large

believe

while the

its

of

Averages
be misleading and the fact is

can

Role of American Business

half

overseas.

Very of¬

important is

the extreme
I

have
of

inatory
limit

nationalism, to which
already referred.
Frean

restrictions

practicrs

the

outlet in the
and

discrim¬

that

sharply

activities

of

foreign

businessmen. Sometimes the threat
of

expropriation hangs over the
investor, and there is always the
possibility of political change and
even

war.

We can't overlook the

Volume 183

Number 5546 ...The Commercial and Financial Chronicle

(3091)
fact that at times

in

the past in¬

vestors have suffered

brutal

some

losses in the foreign field.
In

the face of all

t

this I

.

have

a

un¬

to the best way to build

as

needed

up

investment in the

der-developed lands.

un¬

Thus far in

the postwar period we
have favored a mixed

to

appear

approach,
both government and
pri¬
business
contributing.
It

with
vate

needs

be

to

to

seems

of

be

to

me

expression

our

a

Weeden Adds

times,

recognized, however,

E.

advanced sectors of the Free

more

stitutions

be

arrangements

banks

of

the

now

a mixed
system of this char¬
acter creates problems of its
own,
particularly in areas that may run

into exchange difficulties. How do
private investors and government
event?

queue

in

up

Is there

such

danger of

an

kind

a

of Gresham's Law
operating here,
with government investment driv¬
ing out the private, no matter how

good

the

&

Co.,

510

South

Street.

GeYmain

with

(Special to The Financial Chronicle)

OAKLAND,
Ballantyne

Charles.

Western

Calif.
now

is

—

with

Securities

With Witherspoon Co.
(Special to The Financial Chronicle)

ence

A.

with

pany,

Inc.,

SAN

215

West

&

Seventh

DIEGO,

Co.

now

Inc.,

415

of

Company,
He
A.

with E. S.

and

Laurel

Street,
Angeles Stock

Exchange.

—

to the staff of Ervin E.

Ball, Burge Adds
/

■

Edward

—

merce

Brush, Slocumb Adds
(Special to The Financial Chronicle)

SAN
ard

Building, members of the

He

FRANCISCO, Calif.—Rich¬
Olney has oeen added to

Brush, Slocumb & Co.^
Inc., 465 California Street, mem¬

formerly with

was

D.

the staff of

New York and Midwest Stock Ex¬

changes.

to

answer

Perhaps

these

there

bers

of

the

San

Francisco

Exchange.

m

questions.

are

final

no

answers, and no immediate
tion to the problems

solu¬

GROWING

confronting

the

investor in the under-devel¬
oped lands. We may be faced with

milh

the

alternative, then, of doing
letting governments
carry on alone in default, or of
nothing and

moving ahead
the

in

the

face

of

uncertainties, exercising

sonable

caution

Of

courage.

tives, I
ter.

and

twov alterna¬

very much prefer the lat¬

Moreover,

,

all

rea¬

considerable

these
I

optimistic

am

enough to believe that the under¬

developed
will

countries

gradually

themselves
to

come

recognize

the great

advantages to be gained
from private
foreign investment.

Dynamic Private Investment
Such countries should never be
allowed to forget that it is the
private investor who often works
J

in the most dynamic
sectors of the

economy—those which are sus¬
ceptible to maximum growth and
which

earn

essential

foreign

ex¬

change.

Moreover, it is private
investment which usually carries
With it technical and
management

skills that

are

as scarce

sary as capital itself.
dent that over

and

It is

neces¬

acci¬

no

one-third of United

States
ica

imports from Latin Amer¬
produced

are

that

represent

by

companies

United

States

vestment—imports that
valuable to
the

Latin

us

and

which

Americans

to

even

more

enable

buy

chinery and other items

in¬

highly

are

ma¬

that

are

important to them.'

;

'

If American business is to
ahead
with

move

foreign investment,
particularly in the underlands, those concerned

and

develoned

with the matter must
gain an in¬

timate

knowledge of the countries

involved—knowledge
the

the

of

not only of
forces at work, but

economic

political

enough
sion

to

that

the

particular

ground,

in

looks

a

shaky.
men

It is not

impres¬

vague

Communists

that

needs

detailed

a

country

or

payments

well.

as

have

the

in

balance

particular

American

who possess

knowledge

standing of other

of

the

from pickles to point

year

business

and

lands

SEALING UNLIMITED.

a

gaining

are

same

under¬

that

I

n a single

sealed

year, more

than fifty billion containers of every kind

by the Darex "Flowed-in" Gasketing

process

are

W.

shown here.

the

has
of Massachusetts.
other way can we even be¬
gin the task of seriously evaluat¬
no

ing risks.
Men of the

foreign

type needed for our
business are not created

overnight. For this reason, among
others, progress on the problem

In the process,

ress

seems

I

as

inevitable to

cannot

imagine

me.

this

supplied by the Division,

stream in

heat-bonding, liquid sealing
can

lids

crankcases.

major Dewey and Almy plants supply

an
are

facilities has made W. R. Grace & Co.

apart

from the billion people or so who
will benefit from the assistance
we

can

a

...

in world

trade, transportation

:

1

DAVISON CHEMICAL COMPANY DIVISION

DEWEY AND ALMY CHEMICAL COMPANY DIVISION
DEWEY AND ALMY OVERSEAS COMPANY DIVISION
FOSTER AND KLEISER COMPANY

one

of the nation's

GRACE LINE INC.
GRACE NATIONAL BANK OF NEW YORK
POLYMER CHEMICALS DIVISION
SOUTH AMERICAN GROUP

leading

producers of essential chemicals.

bring

to them.
For the
West, such assistance is not mere¬

ly

prises

GRACE CHEMICAL RESEARCH

nical

standing

For copy

of the 1955 Annual Report

now

available, write Dept. CFC

matter of helping other lands

build

up

counter

their
to

strength
possible
Soviet
own

as

a

en¬

croachment, although that can be
an important by-product.
Rather,
investment in the lesser developed




W. R. GRACE & CO.
Executive

a

and

ahead—in

AND DEVELOPMENT COMPANY DIVISION

Dewey and Almy is one of seven Grace chemical divisions pioneering
new frontier's
in
chemistry. The developments of these diversified

know-how,

move

GRACE CHEMICAL COMPANY DIVISION

keyed to basic human needs."

Just

American

to

by

business

CRYOVAC COMPANY DIVISION

to

business, with its
immense stock of capital and tech¬

see

continues

in

com¬

amazing variety of chemical and rubber specialties, all of which
"Products

CO., backed

and finance.

pounds for industrial applications ranging from
Here and abroad twelve

&

experience

...

high-speed machines designed and

nation

living in isolation, I cannot fore¬

of

chemicals, agriculture and manufacturing
in widespread Latin-American enter¬

perfected by the Dewey and Almy Chemical Company

Division of W. R. Grace & Co.,

of

foreign investment in the un¬
der-developed
lands
may
not
come in a
hurry. Yet such prog¬

GRACE

industry,

Bostonnn

In

R.

century

Symbol of Service V.

Offices: 7 IJanover Square, New York 5

Stein, 1414

Broadway.

.1 must confess that I don't know
the

A.

SACRAMENTO, Calif.
James
Cunningham has been added

Saunders, Stiver & Co.

latter?

Richard

(Special to The Financial Chronicle)

Ball, Burge & Kraus, Union Com¬

Hope

with

Ervin E. Stein Adds

formerly

was

M. Meyers is now connected with

B.

is

4336

Harrison

CLEVELAND, Ohio

Hope

Leavell

Harrison, 2200 16th Street.

M.

1419

Calif. —John

members of the Los

Street.

staff

(Special to The Financial
Chronicle)

Pritchard is

Witherspoon & Com¬

Richard

the

J.

(Special to The Financial Chronicle)

ANGELES, Calif. —Clar¬
Neal, Jr. has become con¬

nected

joined

United

Inc.,

Now With E. S.

^Special to The Financial Chronicle)

SACRAMENTO,-Calif.—Arthur
D.

Mutual Fund Associates.

Eugene

Broadway.

LOS

has

Curran

Fourth Avenue.

Joins United Western

borders both

Richard Harrison Adds

SACRAMENTO, Calif.—Jay! C.
The

will

body to this ex¬
hope some of the seeds
planted here in the nutri¬
I

tious soil which

Weeden

Spring

to give

pression.
can

and

Joins Curran Staff
(Special to The Financial Chronicle)

ANGELES, Calif.—Claude
Elias, Jr. has become connected

with

World economy. I have no doubt
whatsoever that the necessary in¬
emerge

Staff

to

(Special to The Financial Chronicle)

LOS

that

creditors

v.

.■

inevitable challenge and outlet
for the talents and
energies of the
an

tendency to feel puzzled and
certain

countries
natural

23

V
&
%

Throughout the World

Stock

The Commercial and Financial Chronicle
24

...

Thursday, June 28, 1956

-

(3092)

Continued from page

Kuhn, Loeb & Go. to
Our

By JOHN T.
It

Admit New Partners

Reporter on Governments

Bulk

Activity

of

yields with greater purity.
This company is on the thresh¬
old of a new era in its chemical

but

relaxed.

tendency to move down a bit on

turities showing the

not too much

•program

continue

1995

week

business

to

Federal Reserve Banks did
not give any direct help to the banks in the system.
The two
previous weeks substantial purchases of Treasury bills had been
made by the Central Banks. The commercial banks met the heavy
loan demands incident to the June 15th tax payments by a modest
increase in discounts at the Reserve Banks, along with some in¬
direct assistance through a seasonal expansion in Federal Reserve
Bank credit given against uncollected checks. This is known as the

Warburg's partnership

to
act on
behalf of the firm. A natural¬
ized British subject, Mr. Warburg
is Chairman of S. G. Warburg &
full

ceived

Ltd., London and will con¬
in London. He has
interests in the
United States and Canada. He is
Chairman of Brandeis, Goldschmidt & Co., Inc., New York,
metal merchants, a subsidiary of
the London concern of the same

Co.,

tinue to reside

market specialists appear to be concerned about
Reserve Banks did not act to ease the

the Federal

markets further through direct action. This lends support
opinions held in some quarters that the aid given recently
to the money markets was intended to give help only to the banks
for the June 15th income tax period. It may be that there will be
money

to the

tax

Acceptance

the

On

Rate Significant
of the Bankers Ac¬

hand, the recent lowering

other

ceptance rate by Vs of 1% is being looked upon in other quarters
as an indication that money rates will continue to ease moderately.

dealers in acceptance rates was

This reduction by
a

temporary decrease was made
Demand

stay

about

the first since

and British and

Commerce

large, and loans may still

a

Borrowing by Treasury

$2 to $3 billion of new money will be coming along in July
August, probably through the issuance of near-term securities.
Also $12.5 billion of Treasury notes will mature in August and

notes,

became

that time

At

pretty much for

and

Britain,
investors
time

this

slow pace, because
appear to be inclined to assume a waiting attitude at
due, it seems, to two things; first, because yields on

Government

several

obligations

a

reached

have

its

levels that make

Mr.

firm

in

as

recently joined the

Manager of the Municipal

Department,

Stuart & Co. Inc.

On Board Directorate

Of Minerals

senior

Halley,
bia

Incorporated

University

neering

Senior Partner
the investment banking firm of

Research

Philip

University;

consulting

City, has been included on
the directorate of Minerals Incor¬

New

porated,

it

Chairman

announced

was

Hugh

by

of

the

Fulton

organized

recently

company.

include:

directors

Thayer

York

of

Engi¬

for

Director
of

D.

mining

Columbia

Wilson,

engineer

the

duction

States

War

a

in

SAN

joined the staff of
Archie H. Chevrier, 519 California
Street, member of the San Fran¬
cisco Mining Exchange.

Board; Joseph W. Frazer,

who has been Chairman of Board
of

Graham-Paige

Corporation,

Co.,

Willys Overland Motors, Inc., and

formerly

of

President

Ventures

Limited;

Leonard J.

Buck, the President of Leonard J.
Buck,

Inc.,

mine

mineral and metal

of

director

owners

and

brokers, and

Ventures

a

Limited;

Frederick D. Gearhart, Jr., who is
President

and

a

director

of

the

of

firm of Norville &

Minerals

issue

investment banking firm of Gearhart

Gearhart &

Inc.;

Hugh




Fulton,

Uranium

Incorporated

Dent.

plans to

2,500,000 shares of common

stock

Otis,

Standard

Corporation; and Leo T. Norville,
senior
partner
of
the
Chicago
law

do

via

an

underwriting

Otis, Inc.

the

reflect

not

this

true

value of

dynamic fuel.
Indiana

1946

Since

has

spent

$2 billion in capital expend¬
itures, or approximately $200 mil¬
lion a year. Of this amount, about
50% was for the exploration and

production of oil. This yearly rate
is expected to increase to over
$220 million during the next few
years, and in any one year may
go as high as $250-$280 million.
With the company's refineries in
receive

by

Building.
with Eisele,

Farnam

He was
Axtell &

Net

Joins Merrill
RALEIGH,
now

N.

C.

1956

are

debt.

ex¬

pected to be around $5 per share,
with "cash flow" of between $9.75-

$10.25

share. In 1957, earnings
by 6%-10% after allow¬

a

rise

can

ing for slight dilution of the com¬
mon
by full conversion of cur¬

rently outstanding convertible de¬
bentures. This rise in earnings is
based

on

oil

for

an

and

above

anticipated demand
oil products of 4%

1956;

manufacturing

and

economies, tied in with a stream¬
lined

transporting and marketing

We do not expect
petrochemicals will play an
important part in 1956's earnings
but should be a growing factor in
organization.
that

my

Lynch
—

Thomas

invested

return

the

same

but

as

have

Until recently,
capital was about

on

as

of the industry,

that

the modern

been

facilities which

built in the

should

last years

their weight, the re¬
improve.

1948, Indiana decided to con¬
cash by

gradually distribut¬

ing its stock holdings of Standard
Oil of New Jersey in the place
of cash dividends. This policy has
proven

is

Pierce, Fenner & Beane, 324 South

dis¬

of

for

while

a

during

the latter part
V.

Segal

very

successful

as

a

attained.

for

amounting

Premier

of

known

both for

1894. At the
"SN" is sell¬
ing at about 12 times earnings,
and offers a yield of 4.1% on the

paid each year since
present price of $59

least

billion

25

8.1% of the world's
supply, it is still exnloring
It holds 50%

the globe for more.

interest, for example, in Canada's
Oil

Triad

Co.,

and

strong

a

ag¬

gressive oil exploration firm.
British Petroleum

what is

owns

largest

believed to be the world's

fleet of tankers which

num¬

now

ships with 41 additional ;
vessels now being built. The fleet
is carried at a written down cost j
144

ber

of less than

$15

per

million dead weight

costs

ing
Its

times

20

,

efficient refining

huge and

1955

in

network

marketing

and

ton (for two
tons). Build¬

actually

are

more.

produced and distributed 336 mil¬

than in
1954.
The
company
which
is
among the globe's largest refiners .<
possesses vast refining capacities y
in Aden, Western Australia, Great
lion

25%

barrels,

more

Britain and Western Europe.

Earning^ last

year came to $1.29
100-million shares,46% higher than 1954 earnings of

share

per

cents

88

on

At today's price

share.

a

Petroleum

British

in

investor

an

buying equity at about 15 times
1955 earnings and about 10 times
estimated 1956 earnings. The in¬
is

has

vestor

important

an

fellow

shareowner—Great Britain, which
of

56%;

owns

will

Britain
power

the

do

stock.

Great

everything in its

to protect and nourish

this

vital oil producer.
war

or

other

catas¬

trophe, profits are likely to move
to

to

about
more

$2

a

expected to
in

share in

than $3

a

1956, and

share next year.

addition, the company can be

In

cash

receive $670 million

reimbursements from the

just-formed

Consortium.

Iranian

The

company

into

capital

will

channel

this

expenditures leaving

most of its current income

avail¬

able for dividends.

Now With Emch & Co.

its

higher earnings base
Dividends have been

at

to

f

or

Barring

capital.

the

idends

C.

topic

cussion

1957.

feeling that Indiana is

stockholders.
For
the future we anticipate a
more liberal attitude on cash div¬

with Merrill Lvnch,

Salisbury Street.

in

earnings

Indiana 'and

(Special to The Financial Chronicle)

Pulla is

shape,

greater

be in the form of long-term

serve

Redelfs, Inc.

a

household

barrels,

over

In

<Special to The Financial Chronicle)

be¬

almost

that

hopes

start to carry

OMAHA, Neb.—Kay L. Bredensteiner is now with H. O. Peet &

and is the Chairman of the Board

the

was

came

Mossadegh's
it will be
able to provide a captive market wild reign in Iran. The company
for
some
of its natural gas by recovered quickly from the Pre¬
further development into chemi¬ mier's ill-starred attempt at na¬
cals. When you have a large sup¬ tionalizing it. Today it is stronger
ply of a natural resource such as than ever and is ready and able
gas, it is advantageous to extract to realize a large share of the
the high value chemical fractions enormous and fast-growing world
such as ethylene rather than sell wide demand for oil.
it at regulated or low prices which
With 1 unrestricted
reserves
Indiana

With H. O. Peet

Pro¬

re¬

Oil;

Ltd.,

Co.,

Leonard

1946.

times since

turn

President of Kaiser-Frazer and of

who

Calif.—Ar¬

FRANCISCO,

nold Toews has

founder

Lindsley,

Iranian

of
increasing about 4 xk

the industry,

;

com--

until

cently "known
as the Anglo-

growth consistent with that

entering a period where it will be
to earn a higher return on

City and former Vice-

United

?The

natural gas are re¬

able

(Special to The Financial Chronicle)

Chairman for Metals and Minerals
for

it}

the earnings for

Joins A. H. Chevrier

of Colum¬

School

the

and

Scientific

Ladenburg, Thalmann & Co., New
York

a

It is

New York law firm; Dr.

a

■

in¬

vestment.

Reserves of

partner of Fulton, Walter &

John R. Dunning, Dean

Harry B. Lake,

&

connections

having for¬
merly been Vice-President, Direc¬
tor and Manager of the Municipal
Bond Department of Halsey,

This issue is expected to be priced to go

Harry B. Lake and Others

Other

in developing

as

and

parts of the

Miralia

Bond

well.

of

well

world, par¬
ticularly in North America.

of investments more attractive, especially new issues.
Secondly, pension funds, one of the main buyers of the most dis¬
tant Treasury bonds, are evidently making preparations to make
commitments in the large offering of American Telephone bonds
soon.

as

interests

various

other types

which is coming

Warburg,

it became active in placing
issuing
business in Great

ited,

Investors Marking Time

still at

Mr.

others,

company's name was changed to
S. G. Warburg & Company Lim¬

granted.
Trading in Treasury securities is

growth

pany,

excellent

formed
the New
Trading Company Ltd., London,
and after World War II, when the

Reserve

rollover of these securities can be taken

a

Warburg

with

bonds in September. These operations should be
little effect upon the money market, and with
Banks owning $75 billion of the maturing

of

Manufac¬

Plywood

Mr.

1928

firm.

handled with very

Federal

Ltd.,

Co.,

of the refinery

production will
emphasis and a
larger share of expenditures. The
one of the chief executives and in
chemical's share
will be much
1930 one of the partners of M. M.
greater than in past years. Prob¬
Warburg
&
Co.,
Hamburg,
a
ably all of this new money Will
family banking concern founded
be generated from earnings and
in 1798. In 1938 the family was
depreciation, although if new cap¬
forced by the Nazi government
ital is needed it most likely would
to dispose of its interest in the

or

billion

Ltd.

Lobnitz

In

some

the

Co.

Ltd., London, and
& Co. Ltd., Glasgow.

Treasury financing is beginning to get some consideration as
far as the money market is concerned, with expectations that

$1

Co. Ltd., Private

turers

nomic situation.
New Money

Thames

and

the

be

French Bank (for
Industry)
Ltd.,

Investment

Enterprises

dominating force in the future trend of
interest rates and credit. It is also evident that opinions are still
very prominent in the financial district that some easing in money
conditions is to be expected in the not too distant future, because
of the defensive developments which have come about in the eco¬
will

however,

and

Jessel Toynbee &

the upside for a short period of time, which could bring
minor firming of interest rates. The pattern of business,

on

Corporation Ltd. and
Ltd., Toronto,

velopment

Triarch Corporation

last October.

for credit continues to be

Lim¬

is also a Direc¬
tor of various companies in
Canada and the United Kingdom,
such as Toronto & London Invest¬
ment Co. Ltd., Transoceanic De¬

ited. Mr. Warburg

period.
Lower

Warburg & Company

G.

S.

by

controlled

is

which

name,

passing of the income

firming of interest rates, with the

modest

so

ported at over 11.89 trillion cubic
feet, about the fourth largest in
the industry.
Placing a value of
4c on a thousand cubic feet this

power

extensive business

"float".

a

Petroleum

British

fol¬
represents a value of over $470
lows the arrangements made three
million, or about $14 a share of
years ago at which time he re¬
stock. Production of gas has shown

For the second week in a row the

that

June 30,

partners as of

1956.
Mr.

Some money

to the firm as

admitted

be

general

Federal On Sidelines

the fact

David- T. Miralia

and

Warburg
will

for the whole year of

90% of the income taxes accrued

had to pay
1956.

-

noticed.

by

and

large

were

Warburg

G.

S.

Miralia

T.

David

the member banks of the system
reflected principally borrowings by
corporations in order to get funds which were used to pay June
15th income taxes.
In the first half of this year, corporations
loans

The

last

'

phasis is so slight as to be hardly

being invested in this bond.

switch money

British Petroleum Co., Ltd.

that the shift in em¬

with the maturity

Among the most distant Treasury obligations, the 3s of
to be the leaders, with new money as well as

volume.

a phase which has not
prepared in overnight haste^
is the result of a calculated

with each comparatively undervalued today part carefully considered.
The at about $22 a share has earnings^
dividend
prospects
which •
forming of an organization ca¬ and
make
it
a '
pable of producing and market¬
standout
ing chemical products coincides

is still largely confined to the shortGovernment market, with the intermediates and longer ma¬

term

Department

Dreyfus & Company, New York City
Members New York Stock Exchange

plan, well thought out

Short-Terms

in

Investors Serviee

history,

activity

and

Volume

LEONARD V. SEGAL

yet

esses,

been

the New York Stock

on

grouping chemical proc¬
results in
increased

in

sary

the wind is going
opinions around
now among money market specialists.
There are questions as to
whether there will be a continuation of the tight money policy,
with the passing of the June 15th income tax payments, or will
there be a modest easing in money conditions? There is, however,
considerable agreement that a part of the tension which sur¬

The stock is listed
Exchange.

$2.40 dividend.

It re¬

the number of steps neces¬

duces

waiting periods, trying to figure out which way
to blow.
There appears to be ratner divided

rounded the money market has been

coatings.

plasticizers and

G.

Siegmund

that

announced

is now in one of those

though the money market

as

seems

The Security I Like Best

Kuhn, Loeb & Co., 30 Wall St.,
New York City, members of the
New York Stock Exchange have

CHIPPENDALE, JR.

2

(Special to The Financial Chronicle)

MILWAUKEE, Wis.—Harold H.
Emch, Jr. is now with Emch
Company, 735 North Water
He

has

tenden

and

Street.

recently been with Crut&

Co.

and

prior

with Blair, Rollins &

thereto

Co., Inc.

Volume 183

Number 5546

..

(3093)

.The Commercial and Financial Chronicle

25

^Syndicats" Hold Annual Outing
June 22, 1956 at Echo Lake

Claire

Borick

Friend.

Blyth

<ft

Co

"Syndicats";

Ann

.

Inc.:

Claire Marshall

Kathleen

Beck, Shields & Company, President of
<ft Co., Treasurer

Mary O'Rourke, Reynolds

Nancy Zuger, Bache & Co.

ft-

Lynch, F. S. Moselev & Co.; Kathryn McCarthy, William A. M. Burden & Co.;
Edith McGill, First Boston Corporation




& Co.;

Miller, First Boston Corporation; Mae MacDonald, Blyth & Co., Inc.;
Marguerite Kascle, Riter & Co.; Mildred Stevens, Smith, Barney & Co.

j.

Marguerite Aimone, W. C. Langley & Co.; Winifred McGowan, E. F. Hutton & Company;
Lcis West, Blyth & Co., Inc.

Barrett, Equitable Securities Corporation; Claire Hoppener, Goldman, Sachs
Winifred Lees, Kidder, Peabody <fi Co.

Jane

Enright, Shearson, Hammill & Co.; Carolyn Scheid, Morgan Stanley & Co.;
Betty Lewis, Carl M. Loeb, Rhcades & Co.;

Marlon

Country Club

,^'y ]' K I
\

'

Peggy Rentelman, Blyth <fi Co., Inc.; Helen Campbell, Lee Higginson Corporation; Dorothy
Union Securities Corporation; Elayne Whalen, Blair & Co. Incorporated

Gertrude

Harrington, Smith, Ba~ney & Co.; Pauline Ledderman, Blair
Lillian Neylcn, Harriman Ripley & Co., Incorporated

Boardman,

& Co. Incorporated;

26

The Commercial and Financial Chronicle..

(3094)

.

Thursday, June 28, 1956

Municipal Bond Women's Club of New York

May W. Rockafellow, Flagler System; Dorothy Root, F. S. Smithers

Justina

& Co.

Taylor, Chase Manhattan Bank; Ruth Miller, Lee W. Carroll & Co., Newark, N. J.;
Menard, Lee Higginson Corporation; Angela Policriti, First National City Bank

Lenore McConkey, Blair & Co. Incorporated; Mary Varley, Harriman Ripley & Co., Incorporated

Lillian

Jackie

Grace

Zvonik, Laidlaw & Co.; Madeline Kessler, Bache & Co.

Eleanor Kube,




R. L. Day & Co.; Jeanne

Skippon, Adams, McEntee & Co.

Whelen, C. F. Childs and Company; Connie Hay, Shields & Company;
Jra Haupt & Co.; Doris Kurtzmann, Rooert Winthrop & Co.

Alice Droley,

Josephine Capitani, The Bond Buyer; Mary Ciarlo, The Bond Buyer

Marie

Dolan, J. J. Kenny Co.; Betty Cruickshank, Harris Trust &

Savings Bank, New York

Volume 183

Number 5546

...

The Commercial and Financial
Chronicle

(3095)

Madeline

Sundstrom, Chemical
Marion

Corn Exchange Bank; Francis
Isengard, Harry
Junker, Chemical Corn Exchange Bank

Downs

&

Co.;

Ncrma Anderson;

Ann Carroll, George B. Gibbons & Company, Inc.; Sara
Pardy, R. D. White &
Company; Joan O'Brien, Caldwell, Marshall, Trimble & Mitchell

Marie Downs

Noceti, Paine, Webber, Jackson & Curtis; Ruth Jones, Bear, Stearns &
Co.;
Helen Potts, Dean Witter & Co.

Ann Gross, Bankers Trust Company; Doris
Niederauer, Bankers Trust Company




J.

Estelle

Hanvey, Wood, Struthers

&

Co.; Ann Schreiber, Mitchell, Pershing, Shetterly &
Mitchell,
President

of

Club

Ronnie

Smith, G. H. Walker & Co.; Kay Daly, Empire Trust
Company; Mareb
Northern Trust Company; Elaine
Haggerty, Phelps, Fenn & Co.

Emma

Brehm, R. W. Pressprich & Co., Chairman; Jean
Wainwright & Ramsey, Inc.

Catherine Wies, Halsey, Stuart

&

Marie Davies,

Co., Inc.; Helen Kane

Hoke,

27

28

The Commercial and Financial Chronicle... Thursday, June 28, 1956

(3096)

At Morris

Ola

County Golf Club

Elaine Malast,

Smith, Marine Trust Company of Western New York; Louise Bullwinkel, Tripp & Co., Inc.;
Jane Brownell, Chas. E. Weigold & Co.; Bett Dickinson, Dick & Merle-Smith

Mary Dillon,

White, Weld & Co.; Jeanette Boondas, Gregory &
Betty Hanser, Hemphill, Noyes & Co.

serving

Sons;

Halsey, Stuart & Co., Inc.; Margaret O'Shea Burns,
Vernette Bonn, Carl M. Loeb, Rhoades & Co.

Eldredge & Co.;

Cathleen Morin, Smith, Barney & Co.; Josephine Rodd, Goldman, Sachs &
Gladys S. Degner, King, Quirk & Co.

Co.;

successful
Blair

DIVIDENDS

municipalities

&. Co.

INCORPORATED

throughout the nation!

Business continuous since 1890

GALORE

Salt River Project

(Arizona), Jersey City,
Washington Suburban Sanitary Dis¬
trict, Regional Planning Commission of
Cuyahoga County (Cleveland), the City of
Houston and the City of Tacoma
all use our uniquely complete
financial consulting services.

Underwriters and Distributors of Municipal, Utility, Industrial
and Railroad Securities

•

Equipment Trust Certificates

...

For almost

Nothing

quarter century we have provided
governmental units with experienced counsel

in

helpful

Department

a

than

financing, revenue financing, reorgani¬
existing debt structure, over-all financial
planning and financial public relations.

the

Monday

Issue

new

zation of

To learn

more

about

our

services

■

44 Wall

of

the

/

Consultants

Municipal Finance

on
•

New York 5, N. Y.

for

Street, New York 5, N. Y.

Telephone DIgby 4-4000

dividends

declared

Teletype NY 1-1109

and
Private Wire System Connecting

•

when

WAINWRIGHT & RAMSEY Inc.
70 Pine Street

"Chronicle"

apd how

link municipality with underwriter
and investor we invite your inquiry.

we




more

Bank and Insurance Stock

New York

payable

Boston

Philadelphia

coverage

Albany
Kansas

City

Buffalo
Los Angeles

Detroit

Rochester

Flint

Chicago
Grand Rapids

San Francisco

Toronto

Volume 183

Number 5546... The Commercial

and Financial Chronicle

Continued from page 13

(3097)

with

the

commercial

has

banks

of

ume

homes

built.

Naturally,

if conditions dictate if.v
An' in--'
dependent
and
fully
,

spilled

field.

credit

Life Insurance Investments
And the Mortgage Market
companies in order to draw funds
away from certain areas of infla-

time,

the

they

argued

of long-term bonds
investors would make
it possible for the
Treasury to obtain its funds from the
savings
of the people and would
avoid

obtaining of funds from
mercial

banks'

fhoney

supply. vAs
psychological f o r c

throughout ?the
mortgage .markets
potent

and- the

that the
ing

the

expansion

Treasury

By

the

1954 the situation of

and

prices of Government

Current Situation

-

^

what can be said about the

and

situation in the mortgage

a

accentuated by exaggerated ideas
on the .part of the
financial com-

munity

about

of

way

how

much

long-term

in

the

financing

Treasury desired

to

do.

asking what their plans were
for investment in mortgages during 1956. The general reply by
most
companies was that they

any

event, the decline in prices
Government securities spread

companies holding the bulk of the
assets of the life insurance business

the

In

of

in^^ere planning

the

highly

bond

sensitive
of

area

corporate

investments

much

and

ket

rose sharply .on corporate
securities, particularly on bonds
placed directly with life insurance

the

yields

companies.
As

all

you

know

development ^ set
abrupt
shift
of

well,

so

in

quired

this

motion

life

an

insurance

funds away from the Governmentinsured and guaranteed

mortgage

market

into

where

rates

were

rigid

conventional residential

mortgages and business and industrial

mortgages,

into

corporate

and particularly
bonds
acquired

directly from the issuers. Throughthis period the combined ac-

out

tion

of

the Treasury and
the
Reserve, plus the rigid

)

Federal
rates

FHA and VA

on

loans,

pro-

duced

a
drought in the available
funds for the Government-insured

and guaranteed market.

it led

generally to

other

terms

beside

the

Moreover,
stiffening of

a

mortgage

on

interest

loans

rate.

to
the
brings us
uiuigs
us
then
tiicii
iv
me
second period from the Summer of
1953 pretty much
through 1955.
By the end of May and early in
i

June

i.

certain

occurred

•

•

_

basic

which

the

gage market around in an

different

i

_

changes

turned

direction.

By

i

had

mort¬

entirely
the late

Spring it had become uuviuui that
obvious tildi
spots existed in the business
it

uau

soft

situation and the Federal Reserve
moved

swiftly in the direction of
policy of "active credit ease."
That is, reserves were made freely available to the commercial
banking system. At the same time,
a

the

Treasury

withdrew

sharply
funding the
same
time,

in its ambitions about
debt.

also

At

about

rather

rate

on

the

lion

belatedly, the interest

Government-insured

and

guaranteed

mort-

borne

not

were

Moreover,

eran.

by the vet-

during

the

mild

which

oc-

life

insurance

com¬

year.

able assets to sell

tain additional

to

end

an

and

life

come

companies

are

upon

this

of

situation,

institu¬

rates to rise. As

result, the yields
obtainable on high-grade bonds
purchased directly from the is¬
suers

a

have become most attractive

relative

the

to

yield

Govern¬

on

mortgage
and

loans,

both

residential

and

industrial.

commercial

What

we

are

is

witnessing,

tendency

a

for

companies

their funds

the

life

redirect

to

somewhat

there¬

from

away

and

think

Available
How

will

you

Mortgage

serious

will

this

life insurance companies acquired a larger volume of nonfarm mortgages than were acquired in the corresponding period

change in the overall availability

in

This

1955.

The
for

and

figures
the

reassuring

$1,590

were

first

quarter

of

year, or even

FHA

the

of

because

at

most

year

Within

made

and the yields

a

on

total

acquisitions

are

mortgages

amounting

to
$477 million in the first quarter
of 1956 as compared with the
lesser amount of $433 million in

However,

will 7
immediately recognize,
———j
these acquisition figures reflect
Past commitments and do not provld? .a S?od L\ Picture of current
L
mnr*!
as *—
y°u

~

nv»lr r\4decisions in the mortgage market.
In this connection it is
significant
in

rtn rtn

Q

commitments

new

nonfarm

w>

to

residential

gage loans made
°
,

by life
~^

pur¬

mort¬

companies
ww-

sions

about

will

in

our

business

picture,

able

goods

industries

in retail

sales. In

the face

found

particularly

FHA

mortgages,
and

VA

and

mort-

highly attractive invest-

gages,

a

ment

outlet.

therefore,

It

that

Summer of

is
no
surprise,
beginning in the

1953 the

new

further
there is
in

tightening

of

credit

are

a

working

sharp expansion of
capital

which

of

business

depleted

was

ing of inventories

was

by

The buildalso

an

im-

portant cause.
Along with this,
there has developed an enormous
expansion of demand for capital
of

industry
expanding plant
ac-

companied by a boom in the nonresidential construction field. In

the face of this development the
Federal Reserve Board became in-

mortgage

increased
this rise in
tinued

sharply
new

by

375%

commitments

loans
and
con-

steadily through the third-




at

work

in

inflationary

our

economy

and proceeded to tighten its

bad

upon

reserves

an

re-

the

expansion

of

and

ultimately

we

increase in the rediscount

rate.

reason

be eased somewhat. Moreover,

highly

the

availability of
mercial bank loans so
tight,
of

the

would

York

s u;c

R

the

ceeding

1 1 i

o

Municipal Forum of j
the coming year,;

for

Bush,

C

n

v.

.

First

National

City

Bank

New

of

York.

Robert
s

F i

.r

h

e r

,

Do remusl
was

^Vice-

President; Al¬
fred

J.

Bian-

Dean
&

construction

and

field.

Federal

consider.
group

We

most
no

Reserve

They

of

are

and

men

competent

all

desire

Board

must

highly able

a

they

staff.

I

have
know

a

of

group whose

judgment is more
We
must
admire

trustworthy.

their courage. I am sure that they
will alter their policies promptly

;

T

Co.,

r e a s

urer;
Albert F.
Henry

Haiback, B. J.
Van

g.

Wetls,

&

Ingen

Co., Inc., Secretary.
Philip M.
Hiss, The First National Bank of
Chicago; Townsend Wainwright,
Wainwright & Ramsey, Inc.;
George W. Bramhall, Bramhall,
Falion & Co., Inc.; and Eugene A.
Mintkeski, The Port of New York
Authority, were elected to the

demand

for

loans

significant

that

in

In

conclusion,

{This Announcement is

Colombian

of

Governors.-

-

.

,

Mortgage Bank Bonds
(Bunco Agricola llipotccurio)

'

issue of 1926, Due April 1, 1916

;

Guaranteed

<

■

.

Twenty-Year 7% Sinking Fund Gold Bonds
■

Twenty-Year 7% Sinking Fund Gold Bonds
In-uie of

January, 1927, Due Jiinuary 15, 1917

Guaranteed

Twenty-Year 6% Sinking Fund Gold Bonds

Guaranteed

Twenty-Year 6% Sinking Fund Gold Bonds

IrfHue of August, 1927,

Ibbuc of

Due August 1, 1947

April, 192!!, Due April 15, 194)1

Bank of Colombia
(Bunco de Colombia)

Twenty-Year

Fund

7%

Twenty-Year

Sinking

Duied

April 1, 1927, Due April 1, J947

Fund

Gold

Bonds

7%

Sinking

Duted

of

1927

of

1928

April 1, 1921), Due April 1, 194)1

Gold

Bonds

Mortgage Bank of Colombia
(Banco

investments is

the

desire

to

investment yield. Dur¬
the decade following World
War II, the life insurance com¬
panies have made an enormous

Dated November 1, 1926, Due November 1, 1946

Twenty-Year

7%

Dated

amount

of

available for
residential and

both
and

industrial.

The

these

funds

has

because

of

have produced in turn changes in

this market
We

deal

are

of

has

been

reduced.

witnessing today

criticism

of

the

a

great

Federal

been

exercising

and

for
and

the

some

mortgage market. Naturally, home
builders desire to go on each year
rising to new records in the vol¬

Gold

Bonds

of

1927

Mortgage Bank of Bogota
llipotccurio de Bogota)

Twenty-Year 7% Sinking Fund Gold Bonds
Ibmic of

Slav,

1927. Due

May 1, 1917

Twenty-Year 7% Sinking Fund Gold Bonds
issue of

October, 1927, Due October 1, 1947
and

'

Convertible Certificates for 3% External Sinking
Bonds of the

Fund Dollar
Republic of Colombia, Due October 1, 1970
NOTICE OF EXTENSION

The

time

within which the

Offer, dated June 25,

1942, to exchange the above Bonds and the appurtenant
coupons lor Republic of Colombia, 3% External
Sinking Fund Dollar Bonds, due October 1, 1970,

be accepted is hereby extended from Ju^y 1, 1956
July 1, 1957.
The period for exchange of Convertible Certificates
for 3% External Sinking Fund Dollar Bonds of the
Republic due October 1, 1970 in multiples of $500 prin¬
cipal amount has also been extended from January 1,
1957 to January 1, 1958.
Copies of the OiTer may he obtained upon applica¬
tion to the Exchange Agpnt, The First National City
Bank of New York, Corporate Trust Division, 2 Wall
Street, New York 15, N. Y.
may
to

AGRICULTURAL

effect this restraint is having upon

construction

Fund

Dated October 1, 1927, Due October J, 1947

money

mortgages,

Sinking

February 1, 1927, Due February 1, 1947

Twenty-Year 6U% Sinking Fund Gold Bonds of 1927

ing

commercial

llipotccurio de Colombia)

1% Sinking Fund Gold Bonds of 1926

Twenty-Year

(Baneo

maximize

in

Offer)

not an

Agricultural Mortgage Bank
Guaranteed

my

residential

ordinarily have been placed

v f

Conclusions

corn-

which

Board

To the Holders of

this

has

,

Dependence Upon Cash Flow
With

of

New

Witter

it is

Reserve for the credit restraint it

T.

dent

chetti,

that

the forces which have

commercial bank loans to replen-

straint

H. Grady Wells,
Jr., Andrews &
Wells, Inc. has been elected Presi¬

may

some

ance

bank

little else

<

Elects Wells Pres.

than drive up prices. None of us
wants to see a runaway boom and
then a collapse in the residential

and

to expect

coming weeks the situation

experienced

forces

utilized, the pouring

money can do

views might
be summarized in the following
way. The most compelling motive
directing the flow of life insur¬

commit-

ments of life insurance
companies
to
purchase VA

new

productive

our

of

frequently the yields on FHA and
VA mortgages have not been com¬
petitive and the supply of funds

companies

insurance

resources are

in of

this I rather expect that the Fed¬
eral Reserve
will go slowly on

yield spreads with the result that

life

When all of

generally,

of the year with the

the

a

larly in the automobile and dur¬
and

tively short period of time. In the

this,

have, too

mortgage fi¬
full utilization

particu¬

creasingly impressed in the Spring

of

top of

be

been operating to bring about this
change in the mortgage market?
They are undoubtedly painfully
clear to you. Early this year we

ish

We

long-term
on

declined slightly in the first quar- period we have not had any re¬
ter of thls year as compared with currence of Treasury action in the
1955- Thls decline was particularly debt management field to tighten
poteworthy in the Government- up the availability of long-term
insured and guaranteed categories, funds.
What

over

commercial bank credit

the

funds which

Government and corporate securities declined sharply over a relaface

seen

for

nancing

good.

own

often

availability of
altered only
gradually. We are hearing more
and more today about soft spots

this

equipment. This has been

securities

our

beginning
life insurance

and

recovery

for

the

companies active in the FHA and
VA mortgage market made deci¬

°

of
the

into residential construction

gone

in the availability of
mortgage money.

loans subsided.

rapid

price of housing

the

and

VA

and

is

of

Government

rise in

of residential mortgage funds this

compared with $1,414 million for the first quarter of 1655.
as

chase

record

construction

situation

During the first quarter of 1956,

that

the

study

we

residential

Municipal Forum

the

Funds

varied

of

When

to

NY

mortgage market
where yields are relatively much

the

VA

They
of

support

guaranteed

Government-insured

availability

prices

being made available
mortgage market.

the

conventional

and

sometimes

the

is

investments

changing conditions in the capital
market and changing policies by
Government agencies, particularly
the Federal Reserve System and
the U. S. Treasury. These changes

situation

mortgages offered them at at¬
yields. It is common in.
Congressional circles to hear the
complaint that not enough money

a
balanced
and
regular growth
without inflationary excesses.
These are the questions which

and

full

tractive

guaranteed
mortgages. The same thing is true
of the yield on purchase-leaseback

ment-insured

stability.

the

of

elected

nonbank

become? Actually, I do not believe
that we shall witness any severe

of

have

us.

Company,

of

investors, it has been per¬
natural for flexible interest

fore,

mortgages* < the

figures which I
find
interesting

1956

all of

ment.

is sharply changed by
but, nonetheless, I have some

million

heavy volume

a

economic

should

mention Federal and state Govern¬

types

purposes

this

having

and

inter¬

are

other

for

In

in

ested

companies

W

funds from business and

downturn

insurance

for

of savings,f:for
financing homes,
industry, and commerce —not to

curred, the demand for industrial

business

mortgage... lending.
Basically,
lending institutions such as life

which exists not only in the life
insurance business but also with

sure,

now

objective
Federal Reserve Board is
essential
the maintenance of
financial

of

bulk of which were residential,
„.,Th'e expectation of December, I less responsive to market forces.
am

delighted
volume

are

with the highest possible

used

face

insurance

ac-

bankers

in order to ob-' the past decade, it is clear that at
to put into certain times too much
money has

required to depend heavily
the

mortgage

funds

mortgages have pretty much

the

income tax payments.

they

flush

year

companies

concerns

GI

for

Moreover, the
days of having readily avail¬

record amount of $6 bil-

regarding discounts

on

demand

a

this

down

nonfarm

a

of

mortgage loans was
raised to 4%% and the situation
gages was clarified to permit these
discounts to be charged provided

the

have

1955.

earlier, last

insurance

the first quarter of 1955.

This
xino

T

life

as

mar-

this year as was true of

As I mentioned

.

^

to invest about

in the mortgage

money

companies

heavy backlog of
forward commitments, a substan¬
tial part of which will be taken

t^flharket as viewed through the tional
.foj^yes of life insurance companies? fectly

secut^§!ifpu will be interested to know
corresponding rise
at in December of last year 1
Government security yields.
Ap^1%nt out a questionnaire to a sizetually, this movement was greatly^pble number of life insurance
ties

that

■In

contemplat-r^tirrent

this program was sufficient
about a sharp decline

situation

a

their cash flow.

operating •:^Prance companies,

knowledg^^j^Now,

was

also af-

ease

on VA and FHA
mortgage loans to the point where
th^lSp-year no-down payment loans
know;v/Were acceptable to many life in-

exceedingly ^

are

of 1953 pretty much
early Spring of this year,
Spring and Summer of

the^fected the terms

bring
the

middle

until the

com-""

'securities

mere

-

was most attractive
insurance companies from

life

heavy

a

the huge
already at

larly difficult time in view of the
panies

the

area

insurance

facing

fact

of

you
e s

life

the VA mortgage on a yield basis

to

sale

to non-bank

this

plus

funds from business and industry.
This demand comes at a particu¬

general rule,

a

This,

in

long-term

the

time, has created

where
are

and in volume

A?nluchsame
as the.mortgage market,
that

quarter of 1954. As

demands

this

into

over

MORTGAGE

BANK

(Banco Agricola Hipotecario)

the

By Pedro Navas Pardo
Dated, June 28, 1956.

(Gerenle)

U

30

The Commercial and Financial Chronicle...

(3098)

Continued

example, purchasers of tra¬

For

jrom first page

ditional annuity contracts

policies have not been
affected, insofar as the

surance

directly

Pros and Cons of Variable

amount of their con¬
tracts
and
policies
have
been
concerned, by selling commissions,

principal

Annuities Debated
annuity" differs from the conven¬

fundamental

tional annuity in two

annuity
a fixed

where the true
guarantees payment of
(1)

of

number

annuity"

dollars, the

would

of

payment
value of

not

of
the

only

pay

number of units which

a

in

fluctuate

would

"variable
guarantee

number

fixed

a

would

but

dollars

is

in

bonds

and

under

mortgages

statutory requirements and

com¬

stocks,

common

guaranteed
any
fixed dollar payment, and he may
obtain a profit or suffer a loss
dependent upon whether the ag¬
gregate value and income of the
stocks

common

fund

the diversified

in

increase

deducting
dends

(2) where funds paid into true
annuities are invested principally

a

not

decrease

or

selling

ministrative

value, and

in

interest

an

diversified fund of
he

respects:

purchases

officers

salaries

(after

ad¬
divi¬

expenses,

and

expenses

values.

rity.

The

is

Purchaser of

Secu¬

a

"Vari¬

a

However, the value of a
"variable annuity " aside

a

from fluctuations in its value re¬
sulting from investment experi¬
ence, will be reduced by deduc¬
tions

for,

selling

commissions,
expenses of

officers,
tion

of

salaries

administra¬

and, in some companies, pay¬
of dividends to stockholders.

dollar

payments, (2) by providing

tality table,
mined

mor¬

which is deter¬

upon

of

number

a

in the

error

units

the

from

and other

selling

value

units

of

pertinent information—

esseritial

deemed

such

for

the

public
of in¬

the protection

interest and

to

Pay

Fixed

a

Dollar

a

purchaser of

are

"variable

a

that

annu-

Act

of

1933

and

certainly

investor is to have

an

period of

a

obtain

not

contract

these

fact

the cash

in

the

cases

would

"variable

still

alternative

an

interest

in

common

stocks and that the issu¬

ing

I

ment fund providing a supervised
investment in securities selected
for possible long-term growth of
capital with special consideration
given to corporations actively en¬
gaged in newer scientific develop¬

technologies. Prospec¬
be

tus and other information may

obtained
dealer

from

investment

your

Research

of

types

equity

afforded

be

to

In

as

Federal

certain

times

investors

ATOMIC SCIENCE

ties"

not

are

to

conten¬

will

be

ade¬

we

ATOMIC

DEVELOPMENT

erally

MUTUAL

are

not

legal

the

,

or

the payment of

"insurance"

understood

payment of

FUND, INC.

ey

and (b)

a

to

certain

any

within

mean

sum

of

the

mon¬

of

1955

insurance risks in

Atomic

Development Securities Co., Inc.

1033 THIRTIETH

STREET, N. W., WASHINGTON 7, 0, C.

Dept. C

Tel.

FEderal 3-1000

Massachusetts

Life Fund
DIVIDEND

Massachusetts
is
26

paying
cents

Fund

dividend

of

share from

net

a

per

Life

investment income,

payable

June

holders

26,

of

trust

at

the

1956

to

certificates of record
close

of

business

tfnbWUMC*

of

Conse¬

contracts

"annuity" by
companies will, upon
the basis of legal and public un¬
derstanding, lead most investors
insurance

that they

contracts

purchas¬

are

efcm/tanVf Trustee

Incorporated 1818




in that any

increase in the value
annuity over the cost there¬

of the

of is taxable at the

graduated

or¬

which

organized

replies to

our

April

that

of

1955;

inquiries to the

commission

insurance
in

in

each

of

this

company had not
yet been authorized to do business

because
time

of

income is lower

retirement

when

he

time

a

and

at

a

capital gain income would prob¬
ably be taxed at d much lower
income

com¬

a

guarantee

permitiinl^variable

annui¬

ty" dividend and capital gain in¬
pound

and

com¬

tax-free until the time of

receipt

Act

of

1933

Federal Investment

the

and

Company Act

of 1940.

The

Variable

Committee of
ciation
tors

the

of

(the

the

National

Securities

national

necessity

for

aggravates

that

assurance

"variable annuities" will be regu¬
lated as other securities, in order

that

require

of what

investors

obtain

they are buying and other
afforded £y securities

of

the

of

state

in November 1955,
following report:

tee of the National Association

Administrators

careful

the

types
plans that

of

has arrived

at

after

consideration

variable

have
the

been

of

to

annuity
proposed

following

con¬

clusions:

"(1) A variable annuity plan
falls within the provisions of the
definitions of a security, such as

profit-sharing agreement,

in¬

supplied.)

to

pur¬

vestment

of

cause

many

switch from direct

investors

to

common

stock

ownership or' investment in

regu¬

lated investment companies to in¬
in i "variable
annuity"

contract

or

commonly known

the

various

states.

an

instru¬

any

a secu¬

as

(Emphasis

'

;

of

the

contracts.

Officials

Administra¬

"The Variable Annuities Commit¬

ment

would

Asso¬

association

administrators

securities acts)
submitted
the

Annuities

tage

other forms

over

so

to

as

advan¬

tax

of

invest¬

ment, although developments out¬
lined above may

regulation and
few
the

years,

respectfully

we

Committee

of

terests

will

be

bring about such

taxation within
that

New

the

Jersey

a

urge

best

in¬

investors

served

by not adopting
Assembly Bills 450, 451, and 452.
By LOUIS W. DAWSON

President, Mutual Life Insurance
Company of New York
There

is
a
growing
public
recognition of the fact that a rea¬

sonable

amount

ments has

of

sound

a

equity invest¬
place irl most

invest ment
programs.

Hence,
is

there

a

some

will

that

combine

the benefits of

invest¬

ment with the

annuity prin¬
ciple. I doubt
that

this

dewill

d

m a n

cause

ranges for an

an

on

Dawson

individual

annuity

settlement

come

W.

Louis

When

it.

nore

be¬
ig¬

we

or

ar¬

for an in¬

his life insur¬

policy, I think he is seeking

ance

security in the form of purchasing
power

advantage

vestment

(5)

taxed

unfair

tax

authorizing the sale .of such contractSj because this tax advantage

Securities

be

If fixed-dollar annuities or income

laws, before legislation is adopted

District

to

of payments.

This

the

accumulate

to

of

the

and

acts

annuitant,Furthermore,

requesting an injunc¬
tion against the sale of "variable
annuity" contracts by V. A. L. I. C.
until it complied with the Federal

for

and

disappear

United

States

Federal

the

simply

protection

Columbia

will

r^eived during

full disclosure of the exact nature

change Commission filed

(2)

.of, high income

years

to

Ex¬

rity, found in the securities laws

securities

earlier

1956,

and

and

woulp receive fa¬ equity

vorable tax treatment because of
age and
retirement-so that the

19,

Securities

unfairly

investors the necessary protection

method

other

any

the

under

for

his

when

the insurance commission of
state. Furthermore, on June

by

given

securities laws to afford

that the annuitant Would presum¬

indi¬

year

that

regulated

State

ably receive payments at

rate than

was

pro¬

such

(2)

growing
public demand

of those states.

but

be

dinary incorhe tax r#te, it appears

any

mission would not afford the pro¬
tection
provided under Federal
State

"variable annuity"

a

but

a

th'e<,^United

partment

of

have

with

met

Treasury

interested

De¬
States

parties

to consider the

appropriate meth¬
od of taxing "variable annuities."

his family.

for himself or

settlements will supply that, then
fixed

dollars

are

what

he

wants.

But if fixed dollars will not ade¬

quately
power,

else.

provide that purchasing
then he wants something

If

variable

annuities would

help to maintain or enhance pur¬
chasing power, then they would
seem
to have a logical place in
our

—in

operations.
We have a right
fact, a duty—to engage in

any activity that will forward the
security of our policyholders and

their families.

The

tive

use

of equities in conserva¬

long-term

investment

pro¬

is not a new or untried con¬
ception, Many property insurance
companies have been doing it suc¬
cessfully for years. So have en¬
dowment funds, charitable trusts
and investments trusts of various
grams

We understand that

they are con¬
types. The laws of many States
sidering changes in the tax laws,
permit the operation of personal
not only to provide a method of
trust funds under the "prudent

taxing "variable annuities" which man" principle that allows for
be
less
discriminatory holding
|of equities; and funds
against other forms of investment, placed with trust companies are
but to change the method of tax¬
generally permitting more lee¬
ing other contracts issued by in¬ way in this matter of stock hold¬
surance companies so as to lessen
ings. Many of the trusteed pen¬
tax discrimination against other sion
plans of corporations now
forms of investment.
provide for inclusion of equities.
Regulatory authorities and the
Conclusion and Recommendations
general public are giving increas¬
Recognizing that there may be ing acceptance to equities. Entire¬
changes in concepts within the in¬ ly aside from the effects of possi¬
surance
industry,
as
in
other ble further inflation, the investing
fields, and that there is strong public increasingly wants a share
opposition within the insurance in the growth of the American
would

chasers of securities, because state
insurance commissioners do not

the

industry to the sale of "variable

opinion that if the sale of vari¬

require

able

annuities is to be permitted,

annuities" by insurance companies
because
it
would
mark
a
de¬

the plans should be subject to the

parture from the generally under¬

upon

stood

terest

closed

that
to

in

Federal

there

be

fully

dis¬

purchasers the detailed

information
closed

ence

CJCot/ufalCfr/e

legislatures

payment of fixed dollar amounts.
(2) Regulation of "variable an¬
nuities' by a state insurance com¬

a

required to be dis¬
prospectus under the

Securities

Acts

and

the

regulatory authority and experi¬

June 22, 1956.

ofUttencAu&elk

contract.

quently,
the sale
bearing the word

ing

the

advantage in

tax dis¬

a

accumulated dividend income 'and

giving

to assume

in

by in¬
intro¬

were

insurance

as

claim that there is

may

and

Since there is yet no assurance
that "variable annuities" (1) will

in¬

those

New
Hampshire,
Jersey, New York and Texas,
the bills were not adopted in

Securities

the

authorize

Maryland,

"variable annuity" contract are
incidental to the main investment
a

of

to

bills

companies

features

GET THE FACTS AND FREE PROSPECTUS

While

contract.

to

plaint in the District Court of the

the legal or generally understood
meaning of the term "insurance"
because (a) "insurance" is gen¬

through

the

from

payments

vestment

started

come

State

Likewise, "variable annui¬

years.

annuitant

the

as

not

are

for the

acts

as

favorable tax advantages.

gain to accumulate and
tax-free
until
such

capital

securities

tection of investors

compound

tremendous advantage would

of money at stated
or for a
period of

life

permit both dividend income and

be in

commission,

within

sum

for

could

..insurance,

the

generally understood meaning of
the term annuity because an "an¬
nuity" is legally and generally un¬
a

as_

ty" contracts, the Variable Annu¬
ity Life Insurance Company of

securities

(1) "Variable annuities"

invest in

a

taxed

is

permitted sale of "variable annui¬

conclusion

as

response

mean

in

gains; but the in¬
"variable annuity," if

of

quately protected in regulation by

derstood to

realized capital

the

and

the

of

state insurance

any

of

Inves¬

Regulation

annuities"

that

is

by
reflected

companies

in

the

annuities"

New

"variable

tions

on

Secu¬

Jersey

under Federal and State securities

"annuities"

Broadway, New York 5, New York

duced

cated

in

authorizing

of

"variable

surance

state

acts, and

from

income

and

investments

a

the

Laws.

support

to the

as

sale of "variable annuities"

that protection of New Jersey in¬
vestors
requires
regulation
of

Corporation

Established 1930
120

under

pay

(4) In the District of Columbia,
where
present
insurance
laws

submit the following facts:

National Securities &
*

no

Annuities"

Securities

a

or:

of

the

on

regulated

a

must

America

New

Requires

rities

stock mutual invest¬

fund

obliga¬
the investor a fixed
assumes

of

"Variable

National Growth Stocks Series is

ments and

pay

tors

Series?

diversified

amount.

Protection

National Growth Stocks

common

to

dollar

Investing In

a

company

tion

of

sale

in the fact that

annuity" contract is
a

desirability

any

the

of

company

tax

State

requirements

eliminate
stock

common

ing

investments—will

insurance

that

such

a

ties" should be taxed

this

fundamental

remain

in

shares

investment
current

who
regulated
or

company.

the

in

in

shares

investor

An

invests di¬

stocks

adequate information in consider¬

In

sum.

ob¬

who contend that "variable annui¬

of

value

lump

a

and could

years

were

investor in
would

who

common

investment

ties

be

to

ment of the value of his units only

of

Iuterested In

in

purchases

or

annuity"

investor

an

rectly

receive

(3) The obvious doubt

over

The fundamental facts

over

regulatory

contracts

an

considerable tax advantage

a

time

purchasers of "variable annuities"
Annuity" Acquires an In¬
paid each year to a participant, tonly if "variable annuities" are
terest in a Diversified Fund of
would be assumed by the issuing subject to regulation under the
Common Stock. The Issuing
company or (3) by providing that Federal Securities Act of 1933.
Company Assumes No Obliga¬ the investor could receive
pay¬
tion

tain

vestors under the Federal Securi¬

essential if

con¬

"variable annuity"

insurance,

"variable

a

it

"vari¬

of

such

subject to the Securities

a

as

vestor

f

of the

nature

disclosure

able

Amount.

(6) If
taxed

ductions

basic

Full

whether

determining

things,

other

among

judgment

Act of Connecticut.

commissions, details of other de¬

The

that the risk of

A "Variable Annuity"

principal

declaratory

a

tracts are

mortality tables).

investment policy designed able
annuity"
contract
is
not
payment of guaranteed
changed (1) by selling it in com¬
dollar amounts, funds paid
bination (or as part of a package)
into "variable
annuities" would
with a true annuity or insurance
be invested wholly or principally
contract which guarantees fixed
stocks with fluctuating

unit in

dollar

other securities under Federal and

their

because

policies have guar¬

fixed

a

same

obtain

adjustments for experience under

assure

common

anteed

amount.

adminis¬

and

Life Insurance Association and to

ment

fixed

in

expenses,

contracts and

Hartford
County to enjoin the sale of such contracts should not
unless
proposed sale of "variable endow-, be authorized
(1)
such
ment" contracts by the American contracts
are
subjected to the

capital stock of the vari¬
able annuity company and making
on

pany
to

of

trative

ity,"

and in¬

Thursday, June 23, 1956

of

state

sioners has

insurance

been

commis¬

principally with

"(4)

The

is

of

degree of regulation

same

the

states'

Federal

vided
sale

Committee

securities

laws 'that

for

the

are

under

laws

and

now

pro¬

regulation

of

the

of investment securities."

On

April 18, 1956, the Insurance

meaning

insurance
of

a

fixed

of

annuities

and

connotating payment

as

dollar

amount,

we

are

not

opposing the concept of a
"variable annuity"; however, we
submit

that

facts

the

outlined

economy.

There

fixed

-

is

evidence that
annuities,
based

strong

income

necessarily conservative in¬
assumptions, have failed to
the public's expectations.
This has resulted in a strong and
fulfill

increasing
some

public

clude equities.

annuity contracts and

insurance

policies

guaranteeing

for

in¬

Someone is bound

Commissioner of Connecticut and

above demonstrate that the "vari¬

to meet this demand.

the

traditional

demand

type of annuity that will

able

damental

Banking

Connecticut

payment of fixed dollar principal

state

amounts.

plaint

Commissioner
of
(who administers the

securities

in

the

act)

filed

Superior

a

com¬

Court

of

annuity" contract is

mentally

a

an

interest

of

common

funda¬

security, representing
in

a

diversified fund

stocks,

and

that

the

So the fun¬

question is whether this
demand should be met by the life
insurance business* or by others.
We live in what might well be

Volume 183

Number 5546

...

The Commercial and Financial Chronicle

(3099)
termed

an

"age of improvement."




course,

I

think

we

will

find

the

I

31

The Commercial and Financial Chronicle
32

Thursday, June 28, 1956

...

(3100)

Continued from page

theoretically

31

but

posal,

dangers of
The

Pros and Cons of Variable

policyholder buy more life inor,
indeed, retain what

-a

surance

has?

he

Luedicke,

Heinz

Dr.

As

of

Journal

Editor

of

merce,

The

find

quickly

may

...

that it is destroying the

out

foundation of its own busi¬

very

be aware of this
but it will in effect

ness.

It may not

right

away,

advertise the fact that it no longer
^believes

its

in

of

product

own

The

people of the United States
in general, and the 100,000,000 life
insurance policyholders in partic¬
ular, have a vital stake in a sound
and stable economy. It is the peo¬
ple of limited means who are hurt
most

by inflation, and it is these
people who make up the
"bulk of life insurance policyhold¬
ers.
It is the moral obligation of
the life insurance companies to be
in
the van of the fight against
inflation, rather than to capitulate
and
begin to offer contracts of
variable income as a hedge against
The

•

\

;

•

...

shaken.

business

which

N. E. C.

insurance
sale

companies today is the
life insurance protection.

of

Our

ability to sell this protection
in the future depends on the con¬
tinued confidence of the public in
our
product, which in turn
pends on the soundness of

The

economy.

try's

insurance

to

answer

indus¬

rising prices is to launch
against

inflation

devices
of

of

fight

a

than

rather

augurating
acceptance

de¬
our

problem

the

based

inflation

in¬

the

on

being

as

inevitable.

Furthermore, how is the consci¬
entious life
been

However, if the companies
aggressively sell these

gible.

variable

annuity

likely

quite

to sell security, and

who has at heart the best interests
of

his

client,

variable

he

hand

sell

and

sell these

to

majy

which

or

off as expected? How
security on the one

may not pay
can

going

contracts

the

at

prepared

to

sell

what

amounts

to

be

time

same

speculation

effect

in

the

on

other? This is truly carrying water
both

on

shoulders.

insurance

Let

companies

the

life

their

and

agents sell guaranteed security, as

they always have, and let others
sell shares in these

funds.

I

ment

in

first

not

am

opposed to invest¬

equities

has

an

stock

common

provided

adequate

one

amount

pendents.

I simply say that life
companies are not the
vehicle for such invest¬

insurance
proper

ment.

Now
like

having said this, I would
make it abundantly clear

to

for

the

one

moment subscribe to

record

that

look back

over

do

not

for

the the¬

inflation.

inevitable

ory of

I

If you

the years, you will

find that inflation has always come
in times of major war and imme¬

diately following
other
been

periods

but during

war,

the

economv

relatively stable.

that those

who

think

•inevitable inflation

in

has

believe

I

terms of

being psy¬
chologically affected by the period
through which we have just been
passing—and I cannot but be re¬
are

is

common

increase sub¬

Ownership of common
ownership in the

stantially.

means

which

of

stock

the

is

purchased.
This carries with it
the right to vote, and consequently
the

right to have a voice in man¬
The holding of a suffi¬
cient quantity of the common stock
agement.
of

any

be

a

which need not
large percentage of the total,
company,

carries with it
trol.
the

do

I

element of con¬

an

believe

not

be in

it to

public interest for life insur¬
companies to control indus¬

try, or even to put themselves in
the

position

being accused of
Many of you will

of

control.

such

remember the hearings conducted

the Temporary National Eco¬

by

Committee

in

on

economic

of

concentration

the

1939-40,

During those hearings the
question was raised as to whether
power.

life

the

readily
disposed of when it was shown
that, practically speaking, the life
This question

insurance

companies
owned no
The answer might

well

have

facts

were

different

been

if

the

dif¬
ferent
answer
might well have
had unfortunate consequences for
the life

and

a>

Tuesday last,

the

Securities and Exchange Commis¬
announced

sion

its

findings,

an-

parently unanimous, that variable
annuitv

contracts

in

are,

effect,

securities and, therefore, that their
sale is subject to its requirements.
It

to

seems

what

life

has

me

taken

now

variable

a

that, in the face of

insurance

place, for
to

company

annuity

pervision.
Exchange

a

issue
is

contract

practically asking for Federal

su¬

the Securities
Commission once
If

and
un¬

dertakes to regulate any

phase of
a life company's business, there is
no telling where it may end.
Conclusion

With

the

point of

that

view

a

life insurance company should be

progressive and willing to experi¬

ment, I thoroughly agree. I sin¬
cerely believe that the companies,

experimentation

can

too

and

gerous

forms

be

too

of

dan¬

potentiallv detri¬

mental to the nublic and the busi¬
ness

to be undertaken.

On

this

stress

point

like

to

the words of the late Chief

Justice Hughes that life insurance
"is

practically the highest form of

trusteeship."

I do not believe that

substantial

any

of

portion

such

minded of those who held the view

funds should be used for the pur¬

in

chase of

the

late

then in

a

1920's

that

we

were

ter, in

New Era.

has
Federal

Problems

en'*ry of the life insurance
companies into the variable an¬
nuity business will carry with it
other serious problems at the Fed¬
agree

I

believe

we

would all

that the continued

regula¬

there

is

some

are

advocated
It

seems

carried

and

surance
more

market goes the

ing is heard




on

variable

life

should

other

the

stock pur¬

that

stocks.

by the several states is in the pub¬
lic interest, and that any degree

with

away

companies

tion of the life insurance business

The

bull market

common

contend

common

previous

on

that whenever

prolonged

a

advantages of
chases

stocks. This mat¬

somewhat different form,

been

occasions.

The

eral level.

a

common

in¬

buy

When
way,

the

noth¬

the subject.
annuity

idea

companies

ance

company,

have

life

the

insurance

450,
be defeated.
Bills

Assembly
should

451

452

and

are

of Maryland,

latures

has

been

would

business of ours

I

public
in
common stock pools, and that New
Jersey will not lead the way in
putting its stamp of approval on
legislation of this character.
business

of

in effect participations

are

selling

Incidentally,

the

to

have

I

segregated portfolio of in¬

of any

vestments^.

to
widely

shared

by life insurance company
executives throughout the country.

of

Stock Exchange

the

appreciate

the

Committee
bers

behalf of the

on

firms

member

and

ali types

include

such

Under

contracts.

under which

mem¬

the

of

ry. • •••'••

an

authority an insurance company
could presumably provide for a
life
insurance settlement
option

invitation of
Chairman to appear before this

I

■>'

•

any

been

extremely broad language

would appear to

New York

with

shall- have

placed."

G. KEITII FUNSTON

President of the

in which amounts

.

connection

contracts

This

By

.

in

received
such

results

investment

reflect

to

as

which
placing
the

variable annuity contract

a

result

would

Exchange who

widow might select

a

in

or

do

proceeds of her husband's life in¬

business

in

surance

reside

New

Such

Jersey.

advocated

to

ket

Exchange

sible

pub¬

lic

which

tract"

business

American

particularly Jersey

—

stock ownership
by individuals, but also indirectly
through financial institutions—is
in the long-run interest of indi¬
vidual investors, of the securities
direct

through

and
of
our
nation's
The Exchange welcomes
the entrance into this endeavor of

which

owner

diversified
stocks. The

a

would

undivided

an

a

mon

in

companies

insurance

contracts

sell

the

holding

to
give

interest

of

com¬

purchaser of such

contract would bear all the risk

industry,

of market fluctuations and income

economy.

yield.

any

and all persons or institutions
can
make a sound con¬

which

tribution

to

The

the

of

achievement

goal.

shareownership

broad

To " call
such
contracts
"variable
annuities" cannot, in

our

represent
To

shareownership does not

stock

however, that it believes in
selling common stock to all per¬
sons indiscriminately. In its pub¬
lic statements and advertisements,

form

mean,

Exchange stresses the
as
the rewards of

Stock

risks

as

well

stock ownership and

points to the

for the individual to
have adequate life insurance and
necessity

cash

emergency

ownership. We
of
all

he considers stock

full

advocate

so

that the

po¬

tential investor will have available
the

facts

sound
we

on

which

investment

to

base

a

The

Exchange

member
ness

of

firms

in advance

public
as
to
the
their purchase would

compound
common

risks inherent in
stock
ownership. It is
the

sincere conviction that these
bills would do exactly that—be¬

my

they would permit the sale
common
stock
investment

cause

of

contracts

the

to

public

in

the

guise cf insurance.

in

Act of 1940."
this

In

whether

There

appears

the

action

has

annuities

brought

been

This

squarely before the courts.
since the

has occurred

bills

these

of

regu¬

the sale of vari¬

lation applies to
able

question

securities

Federal

of
Assembly.
in the

passage

the

by

While this issue is pending

Federal
would
this

believe

I

courts

be

it

to "enact these
would raise

Legislature
Their

bills.

that

public disservice for

a

passage

national scope and

a

significance—for they do not limit
the sale of variable contracts to
the

New

insurance

life

Jersey

sponsoring this legisla¬
They would permit out-ofinsurance companies to sell

company

contracts

company

permit

also

life insurance
including companies

Jersey

New

any

Jersey

New

to

would

and

residents

—

might subsequently be or¬

expressly

ganized

that

for

pur¬

pose—to sell variable contracts in
many
other States, without the
express
consent of the Legisla¬
tures of those States and directly
in conflict with the position taken

Securities Administrators
States through their As¬

the

by

of those

sociation.

of

—

specifically permits
annuities or

State

No

sale

the

of

variable

other

On

tracts.

variable

insurance

con¬

bills to

contrary,

the

permit the sale of such contracts
been rejected by the Legis¬
latures of four States in the past

have

few

years.

Securities

Regulation

Stock

The

Essential

believes

Exchange

by govern¬
agencies of the issuance
sale of securities is in the
the

that

regulation

mental
ard

and

interest

public

In

itself.

rules

asking

in

also

interest of the securities

that

the

industry

the

same

apply whether a security is
and sold by the securities

issued

industry or by an insurance com¬

Variable Annuities Are Securities

to

general

be

agreement on the part of all ex¬

are going
no further
have in asking that reg¬

we

pany,

than

we

ulation

of the

securities industry
include some

itself be extended to

of this legisla¬ aspects of the securities business
permit not now fully covered by regula¬
If
common
stock invest¬
to sell tion.
with all the risks in¬
public. Repre¬ ments

cept the sponsors

you

tion that these bills would

regulates

used

our

must

care¬

by

our

insurance

securities

busi¬

securities
insurance

members and
be approved

by the Exchange. Im¬

to

company

the

—

sentatives from every

public. The

soliciting

from the general

advertising

and

the
of

nature

confuse

would

and

methods

firms

which

mislead

an

the

permit the sale of common
investment contracts in a

before

invest."

fully

a common

portfolio.

judgment

"investigate

urge

interest in

investment

disclosure

affairs

corporate

before

reserves

an

which

contracts

as

basic

their

change

opinion,

character

stock

Exchange's endorsement of

contained in the Investment Com¬
pany

which

Essentially, these "variable con¬
bills
would
permit New

of

ownership

legislation would ap¬

Keith Funston

G.

the

in

this

parently permit.

participa¬

tion

situation—a situation

a

a

variable annui¬
ties is
in the business
of investing, reinvesting and trad¬
ing in securities within the defi¬
nition of an 'investment company'
issuing
"engaged

such

from such

that

company

state

one's

be-*

1940,

conclusion

its

of

of

Act

Company

cause

tion.

of

time

Imagine

that

ment

death.

the

at

complied

only with tne registration re¬
quirements of the Securities Act
of 1933, but also with the Invest¬

the level of the stock mar¬

upon

ownership in
America. The

variable

of problems of

family would depend

your

a

not

the confusion and pos¬
hardship which might result

broader share-

broader

issuance

life insurance the amount of money
left

believes

the

ap¬

variable basis. Under variable

on a

has

Exchange

authority would

forms of life insurance itself

some

Stock

York

stock fund.

common

a

permit

parently

many

the New

vears

in

broad

seeking

the issuing company has

to vary so

...

of

is

sale

a

equity

to restrain the
annuities until

injunction

com¬

This means—and

amount of benefits

other

and

Commission

The

the bill—"any con¬
by
an
insurance
providing for the dollar

company

stocks

on

insurance

"contracts

issue

contracts

investments.")

court

quote from
issued

tract

reason

believe that these views are

to

variable basis."

into the

what

authorize

panies

putting this wonderful in¬

prove

type

bill

This

annuities."

the

Under

VALIC,

by

common

so-called

of

issuance

the

yond

"variable

conventional

of

periodic sums
varying in amount would be pay¬
able depending upon the value of
an
underlying fund invested in

Assembly Bill 450 goes far be¬

being in the public interest. I trust
that you gentlemen will not ap¬

annuity'

periodically

sum

issuers

issued

Provisions of the Bills

New Hamp¬

and Texas, and
rejected by all as not

New York

shire,

fixed

a

annuities.

securities.

and

1933." In

'variable

its

pay

surance

Legislation of this general type
been introduced in the legis¬

contained

this conclusion
the
pointed
out
that:

of

"Under

to

has

'security'

contracts, VALIC is not obligated
as

may

.

within the definition

.

term

not

which

.

Securities Act of

properly described what it
is selling because it undoubtedly
will
have
difficulty in training
salesmen to sell properly both in¬

be

to

member

is

fearful that

am

permitted to sell variable
annuities, and that New Jersey

for

if this

the public interest

it not to be in

the

would

I

I

stock

I believe

reasons,

.

the
the

in

happens, he will blame the
market and not the insur¬

broader

plans to meet changing
some

.

Commission

he put in.

than

these

all

For

velop

However,

America, that: "The .
con¬
constitutes
an
investment

tract

detriment.

the

needs.

Annuity Life Insurance Company
of

support

by and large, are alert to chang¬
ing conditions. Thev do experi¬
ment, invest in new fields and de¬
new

a

see

For

business.

insurance

C.—On

E.

S.

otherwise,

of

case

annuity, there would be

variable

was

stock.

common

the

of

assets, exercised control over in¬
dustry.

In

the

ago,

declared, in connection with
issued by the Variable

service to the people of no guarantee. All of this risk of a
and I cannot will¬ stock market decline is assumed
its reputation put in by the policyholder, who
may
jeopardy or people misled to their find that he will get back less

of

of its large accumulation

cause

premiums.

days

contracts

country,

be¬

business,

insurance

sion

get

amount

a

three

just

And,

generally

he

the sale of se¬

Securities and Exchange Commis¬

back at least the
of money he has paid in
to

expects

no

rendered

pur¬

variable

curities."

under

When he

the

of

plans to

annuity

"the

recognized

have

—

similarity

basic

this

ingly

surance

ance

of

life insurance to protect one's de¬

their

that

stock holdings would

stocks

it

contracts,

of

know

I

an

fixed

made

be

annuity

an

by

the

—

Association of Securities Adminis¬

contract

to

were

chases

of industrious and
management, might well be
has

will

payments

certain conditions.

association

trators

that

company

through
National

States,

various

the

their

regards in¬

guarantee

a

as

surance

insurance

over

up

supervised

and

The average person

insur¬

are

the sale of securities.

in

years

many

trained

properly

one¬

a

members

its

Commissioners

Securities

The
of

greater

business are negli¬

insurance

life

underwriter, who has

trained

it is safe

I think

—

that, at present, the aggre¬
gate common stock holdings of the

nomic

principal business of life

built

companies,

ance

severely

T.

not

the life

in

wise

same

inflation.

lic's confidence

variable annuity field.

company,

guaranteed dollar contracts.

is

of

salesmen

street.

consider some of the
things that might happen if the
life insurance companies enter the

to say

"Any insurance company that
goes into what actually is the mu¬
tual fund business

unfortunate.

be

let's

Yet,

Com¬

has well stated it:

would

ernment

The Exchange also insists

When a substantial
drop occurs, as has repeatedly
happened in the past and will hap¬
pen
again in the future, people
will be hurt, and surely the pub¬

Federal Gov¬

of regulation by the

market

sales methods are banned.
that the

proper

pro¬

which/has many
very practical nature.

a

stock

way

Annuities Debated
fering guaranteed dollars. If the
insurance company has recognized
inflation as inevitable, why should

interesting

an

one

gone

on

before

industry,
industry

as

are

well

as

experts, have

and will testify
today that variable

record

you

annuities

field in the

securities.

volved—are offered without secu¬
rities

regulation, we fear that the
will injure not only the

results

public but also the entire
ties
I

industry.
would like

also

to

securi¬

comment

Volume 183

the

on

Number 5546

statement

made

...

The Commercial and Financial Chronicle

with

the

by

tax

no

proponents of these bills that the

contrasts

insurance

tax

is

industry

the

most

whether

of

rates

In

addition, of
course, the individual must pay
the capital gains tax of up to 25%
realized

of

appreciation from his

shelter

tax

investments.

stock

common

which

would

The
pro¬

try, the securities industry, or the

vided to

railroad industry is the most reg¬

to

ulated

through the variable annuity de¬

is besides the

point.

Even

individual who chose

an

invest

in

rather

vice

than

assuming that the railroad indus¬
try is the most regulated, I would
not expect you to agree that tnis

a

by direct stock

investment is

would

stocks

common

qualify

railroad company

a

to

with

the

stimulus

tax

comply¬

in

laws,

of both insurance and stock

to sell insurance without

ing

readily apparent.
afforded by such
shelter might well result

The

insurance

or

ing

a

might become

furthermore, that Congress,' de¬
spite the fact of State regula¬
tion of life insurance companies,

ing

did

own¬

Insurance, instead of be¬
means
of spreading risk,

ership.

into the securities business
without complying with the secu¬
rities laws.
It is worth noting,
go

character

changing the whole

vehicle for avoid¬

a

common stock in¬
Common stock invest¬

of

not

sued

of

instead

being

means

a

profitably employing the sav¬
ings of individuals, might become

exempt-the securities is¬

the

on

vestments.

ment,

by life insurance companies

from

taxes

in

concentrated

registration ' provisions

insurance

Inc.,

difference

The

r

regulation
regulation is highlighted by the
that the Superintendent of

ance

dividual

stock ownership
productive enterprises.

fact

Insurance

District

the

of

com¬

our

life

forded

able

dustry is founded on the premise

annuities

by

to

to meet

for

its

policy¬

our

structure

primarily

directed

is

affairs

financial

the

of

lion

I

Conclusion
In

antees, while securities regulation

to provide

primarily

designed

disclosure to the investor

for full

to'protect the public at the
point of sale from false or mis¬
leading information.
The
question raised by these
and

is

bills

insurance

whether

not

adequately regu¬
lated for purposes of selling in¬
surance.
The question is whether
companies

are

be permitted

they should

to en¬

the securities business
submitting to the Federal
State regulation which has
developed over the years to
in

gage

without
and
been

protect the public in the sale of
securities. These protections
should

which

applied

be

of

well

the

to

might

annuities

variable

sale

include:

The

(1)

'

prospectus in

a

sale of variable

the

is

on

of

this

(2) The application of the same

sales lit¬

of

sale

the

used

in

annuities

as

advertising

and

variable

apply to the sale of securities.

Limitations

(3)

investments

permissible

on

sell¬

companies

by

variable annuity contracts.

ing

Protection

(4)

*

public

the

of

against fraud in the sale of vari¬
annuities.

able

Tax

<►

are

mittee

arises

State

of

borders

the

beyond

far

that

from

the

It would therefore

insurance.

day.

bined
of

annuities would

variable

$8

present

laws

tax

when

compared with direct investment
by

be

can

only one answer—Insurance com¬

to

shpuld

sell

throughout the United
I

to

Federal

1955

tax

income

law

of life

applicable

insurance

companies is based on a formula
estimated
tive

tax

vestment

to

rate

result

in

of 7.8%

income from

an
on

effec¬
net in¬

dividends,




should like to

for

terms

to

of

outline

will

all

follow

myself
in

fund

variable

is

herent in the proposed

reasons

The

points

will demonstrate to

failing to provide

es¬

to investors not

,

open-end investment

com¬

panies

have
cause

against

the

bills

consideration.
not

changed

then
views

Our

since then

f^e superficial

be¬

changes

position to these bills.

for

you

is

in¬

which

be

not

common

them—and

mon

we

annuity
We

surance.

stock

in

see

or
a

do

a

not

end

form

investment

in

a

of

which

com¬

virtually

investment.company,

investment

of

see

form of in¬

open-

a

form

we

and

as

industry

an

.

have;

...

Can it be, we ask

ourselves, that
by-pass the regula¬
high standards so

all it takes to
tion

and

the

essential

to

of

to

new

protect the
of

three

public

New

is

Jersey

permit

the establishment
investment companies un¬

der the

of insurance?

name

•

-

Certainly the State of New Jer¬
Let me add to his statement that
sey would never permit a man to
taxation of the mutual fund in¬
open a public establishment with
vestor is designed to put him in
a
license to operate a tea room
precisely the same tax position he
when, in fact, the only merchant
would occupy if he owned stocks
dise he intended to sell was al¬
directly rather than through the coholic. This would be an inter¬
intermediary of
an
investment esting way to avoid the
regulation
company. This conduit theory of of the State's
liquor authority and
taxation is certainly not discrim¬ to
circumvent the normal liquor
inatory nor favorable since ail it license fees and taxes. We find it
does is to put the mutual fund
hard to imagine your approving
investor in the same position as
these bills which would permit an
any other investor.
The variable insurance
would, as Mr. Funston so
clearly indicates, create a spe¬
cially favored class of investors
from the standpoint of taxes.

surance"

variable

other form of

annuities
common

and

stock

investment.

which

ties

tween

a

area

of difference be¬

mutual fund and the pro¬

regulation.

dwell

on

this

I

should

like

difference

at

to

some

length, if I may, in an effort to
cut through the smokescreen that
has enveloped the discussion about
regulation, and to point to some
specific differences between Fed¬
eral and state regulation of the

investment

business for 36
investment

and

in

field

since 1928.

fund

the

started

to

The first mutual
issue

1924;

so

you

can

been

in

this

business

have

years,

company

see

shares

in

that I have
for

a

good

t

a'ic

and
t i b

a

n

investors, and the regulation

ment

both

the

and state

found
of

"annuity"

an

in¬

"in¬

normally applies to securi¬

which

Federal

govern¬

governments have

essential

to

the

protection

investors.
Bills

These

Termed

are

That

men.

Defective

defective bills, gentle¬

they threaten the pub¬

lic interest must be
the

The third

or

an

stocks

Common

avoid the

thereby

a
significant difference — a
competitively unfair difference—

between

in

vestment

ate

any

to call

company

contract

We look at

permitted undistinguishable from the

stock investment

panies
earned.

legislation.

bills—our lawyers

of

the

busi¬

out

enactment

securities business and the regula¬
examine tion these bills contemplate.
them, consulting actuaries exam¬
I personally have been in the
ine

of

recognizing

bills

have, as you know, con¬
sistently opposed these bills this
The tax shelter which these bills
year,
just as we opposed their seek to establish for variable an¬
predecessors in 1955. Last year I nuity investors would permit
was
one
of the many witnesses them to avoid or reduce
through
who appeared before the Assem¬
deferment, their equitable share
bly Business Affairs Committee of the public tax burden and cre¬
speak

level

anxious to keep the op¬

are

portunists

taxation.

outlined

avoidance

.

a

,

The

We

proposed

in

tax

has

funds

between

the

and

annuity

Funston

I do not

out the United States..

mutual

the

I believe, how defective these
are

con¬

judgment. V

our

difference

Mr.

our

me.

second

in spe¬

opposition to which I shall ad¬

bills

paying

mutual

and

reasons

our

urging the New Jersey Senate
to reject these bills.
Many of our
reasons have already been
docu¬
mented by other witnesses; others
may be presented by spokesmen
who

the

to

in

guarantees

annuities

A

States.

outline
of

some

opposing these bills.

intend

of

use

superficial, in

Hugh W. Long

by

than 2 million men, women
institutional investors, located

cific

returns

annuities makes the life

able

more

and

the highest

system

a

assures

conduct.

ness

tingency difference between vari¬

are

owned

public

which

fact

that

American

all

obvious from

elements

of

the

business

securities

are

represented

here today, fulfilling
responsibilities as citizens

their
who

recognize

bills

the

abuses

these

invite.

Should you feel that the securi¬

ties

base their opposition
competitive considera*
the proponents of the

people

only

on

tions,
bills
you

late

as

have suggested, may I ask
to consider that the bills vio¬

seriously

Annuity
tional

of the

many

recommendations

of

the

Committee

Association

of
of

basic

Variable

the

Na¬

Insurance

Commissioners, a Committee on
New Jersey Commissioner
Howell served. (Would it not be
desirable to learn why many of
which

that

Committee's

recommenda¬

part of its entire history.
Some tions, to which Mr. Howell appar¬
pioneered and which, through our of
my colleagues here today have
ently subscribed, are not embodied
of
whether
these
contracts
are efforts and performance, and un¬
also had long experience in the in these bills which he
approves?)
der Federal
and
state securities
called
"variable
annuities"
©r
investment company business.
May I also ask you to consider
regulation,
has grown substan¬
that the National Association of
masquerade under some equally
Lived Through Stock Market
tially both in size and in accept¬
Securities Administrators has
attractive but misleading label.
ance
by thrift-minded people in
Cycles
adopted a strong position in oppor
To summarize our position, the America.
We've
lived
through ups and sition to this
type of legislation.
We
believe we are competent
downs in the stock market price Neither of these two
New York Stock
Exchange be¬
groups can
to evaluate the type of business
level; we've lived through the be motivated by competitive con¬
lieves:
proposed in these bills, and have mistakes
that
occurred
in
our
siderations.
Their positions with
a
public responsibility to do so, business in its early years, just as
(1) That variable annuities are
respect to variable annuities are
because we have had more expe¬
mistakes occur in every business,
securities.
simply the expression of their
rience in this type of business than
it seems, during the formative pe¬
responsibilities as public servants.
(2)
That, as securities, their anyone, including the proponents
riod.
We've learned from actual
To demonstrate all the defects
issuance and sale should be sub¬ of the legislation.
experience how our business must
the public regardless

the

to

regulation

same

treatment

and

apply to securi¬

as

A mutual fund is

an

(3)

the

That

annuities

on

sale

any

variable

of

basis should not

undertaken

by

companies

which also sell life insurance be¬
that

confusion
to the

type

being

would

in

result,

the

public

first, in
mind

as

product being sold and the
and

degree

provided,

injury

securities

opinion,

the

to

of

and,

public,

industry,
to

-the

industry itself.

protection
second,

to

and,

life
-

in

in

the
my

insurance

a

medium that

individual to acquire
interest in a widely diversified

permits

an

be

conducted, how common stock
programs
must
be

investment

of

these

bills

would

take

more

time than today's schedule allows.
But a few examples may, I be¬

sold, and how they must not be
carefully selected portfolio of sold, if the public interest is to be lieve, demonstrate their total de¬
fectiveness.
and to obtain, regard¬
protected. We've learned that our
less of the amount of his invest¬ interest and the
public interest
Funds Highly Regulated
ment, the benefits of full-time are one and the same.
Operation of a variable contract
professional management.
We cooperated with the Securi¬
company
will, for all practical
The
variable contract
scheme
ties and Exchange Commission in
purposes, be identical to operation
outlined in these bills would per¬
drafting the Investment Company of an open-end investment com¬
mit an individual to acquire an
Act
of
1940
and
have worked
pany.
Now open-end investment
interest in a portfolio of equity
closely with the SEC ever since companies are subject to a vast
securities, and to obtain the bene¬ in its efforts to administer and
body of regulation. The Securities
fits of full-time professional in¬ implement this basic public-inter¬
Act of 1933, the Securities Ex¬
vestment management.
In basic est legislation. And we cooperated change Act of 1934r the Invest¬
with this federal agency again in ment
Company Act of 1940, the
principle, then, there is no real
1949 and 1950 in drawing up the Statement of Policy of the Securi
difference between a mutual fund
Statement, of Policy, a code which ties
and
Exchange
Commission
and the so-called variable annuity. defines in most specific terms the
Continued on page 34
language and format of invest¬
May T carry the comparison fur¬
and

individuals in common stock.

The

eral
out

than

which

form

cause

under

co m-

assets

billion

panies to sell securities?"
In
my
opinion, there

in

provide

to¬

more

these

significant

investment

which

am

126 companies

have

regulation

annuitant

These

that the really basic ques¬
tion is—"Is it in the public in¬
terest to permit insurance com¬
appear

be

shelter

tax

I

of

of our business,
that unethical,
im¬
or, if he
dies, to his proper or dishonest conduct by
beneficiary. The more substantial any investment company, regard¬
the guarantee, the more identical less of what it might be
called,
an
annuity is to an investment would inevitably be harmful to
plan, and the less significant life the public confidence and ap¬
contingencies - become. ! The gen¬ proval that we as individual com¬
minimum

anteed

in

go

this

mortality, apparently. Most an¬
nuities, I am told, involve guar¬

the companies
it
represents

speaking

significant element

a

believe that the result is

of

and

that

than

posed variable contract business is

ties.

implications

contin¬

less

of individual annuities actu¬

ally involve

Com¬

slightly different form of insur¬
Similar to Mutual Funds
policy. They constitute a re¬
In communications to you, the
quest to permit insurance com¬
panies to sell securities to the proponents of this legislation have
public under the label of insur¬ largued that it is fear of competi¬
ance
without the safeguards es¬ tion which motivates our opposi¬
Certainly competition—un¬
tablished
for
the
protection of tion.
competition—is an element,
the public in the sale of securities fair
and under a tax shelter intended and an important one, in our op¬

tax

has

life,

Much

ance

for

sales

reports,
prospectuses
presentations. We be¬

differ¬

a

Another facet of this legislation
which

50%

It

legislation, it is this*year's*bills do nothing/in our
clear that these bills represent far judgment, to respond to the objec¬
tions we voiced last year.
more than a mere request to write

ject

Shelter

character which

advertising,

company

sales

lieve

such

some

this

by

Differences

three

are

element.

gency

behalf

under

light of the serious problems
national

a

raised

contracts to

annuities.

standards with regard to
erature

of

panies

of

use

own

There

vestment

n

Company

to

to assure, insofar as pos¬
sible, its ability to meet its guar¬

company

is

presently

who

people

life insurance.

ment

ences.

only in New Jersey, but through¬

distort

would

to

literature,

Asso¬

sential protection

annuities

attention

your

Technical

National

to extend this tax shelter to .vari¬

.

the

the

able

severely. It might
pliance with insurance laws is not
enough. A variable annuity^'ac-1 even spark Congressional action
to reduce or remove the advan¬
cording to the SEC, is an nonexempt security and must be reg¬ tageous tax treatment of all life
insurance companies. Such a de¬
ulated as such.
:
This action by the Commission velopment would, of course, be to
points up the fact that insurance the disadvantage of the 100 mil¬

regulation

of

you,

tax

to

Elizabeth, N. J.

member of the Executive

a

For the
life insurance industry to attempt

less, the Securities and Exchange
Commission,
after ; months
of
study, has concluded " that com¬

call

and

technical differences.

and

dress

tuating securities prices.

Nonethe¬

laws.

in¬

obligations and not

obtain

to

is

Co.,

holders profits arising out of fluc¬

compliance with all of the appli¬
insurance

seek

insurance

purpose

its guaranteed

of

cable

its main

that

Annuity Life Insurance Company
America.
Presumably, his de¬
cision was based on the company's

the

to

&

for

The favorable tax treatment af¬

Co¬

of

of

lumbia approved the

sale of vari¬
the Variable

am

Committee

of the Securities Act of 1933.

panies — with results that would
between insur-* change our whole concept of a
and
securities corporate democracy based on in¬

Long

33

strongly thgt this coopera¬
tive enterprise with the SEC has
First, the variable annuity been in the public interest and
ciation of Investment Companies
investor can elect a pay-back plan hence, in our own interest.
We
and of the Association's Open-End
that
involves
I

Committee.

be

ther

By HUGH W. LONG

President, Hugh W.

dividend

on

stock.

common

indus¬

insurance

the

on capital gains.
This
sharply with > personal

.

income,
ranging from 16% to 87%, when
an
individual invests directly in

heavily regulated industry in the
country and that no additional
regulation would be needed even
though insurance companies were
permitted to issue and sell secu¬
rities
through
the
medium
of
variable annuities.
The question

(3101)

securities

34

The Commercial and Financial Chronicle

(3102)

Continued, jrom page

Johnson

33

sists

of

Annuities Debated

portion
This

Fears Corporate Control

regulations of

the "blue sky"

these con¬

various states—all

These

New

provisions which experience lent here, too. Under these bills
has proved necessary to protect it would be quite possible for a
the public interest in the opera¬ variable account company to ac¬
tion and sale of common stock quire, in effect, the control of a

is corporation which

it

Because

plans.

principal statute relating to
companies, I'd like to

the

investment

highlight some of the terms of the
Company Act of 1940
and demonstrate how these New

was

organized

by and for the benefit of the offi¬
of the variable contract

cers

com¬

pany.

Investment

I

have

about

concern

no

in

hierarchies

that

like

should

first.,

stress,

to

judgment

that it is our considered

directorates

of

interlocking
other

that

and

that have cropped up

evils

in the busi¬

minimum, the protec¬ ness world in the past have
provisions of the 1940 Act place in their thinking.

that,

a

as

tive

Securities Acts

other

the

of

and

should be written into these New

Jersey bills. We also believe that
state insurance department,

a

But the
are

We

can

to their present

tain
He

new

insurance

person

experience and staffs necessary to

can

of

be misled through the absence

disclosure require¬
bills, there can be
no
justification for hasty passage
of
responsibility
for
implementing
this
legislation. We
believe
the
skeletal
terms
of the bills there is more than a possibility
themselves with regulatory pro¬ that such misleading and misrep¬
visions and rules.
Is this not an resentation will exist if these bills
unwarranted delegation of legisla¬ are passed.
The model for ade¬
charge the
Department with

would

bills

These

State

Insurance

adequate

ments in these

executive de¬ quate disclosure regulation is al¬

tive authority to an

partment, particularly in view of
that department's inexperience in

my

could, if
per

and

if

53%

ready

the Federal and state
books, gentlemen.
It is

on

statute

provision limiting
to 5% the amount of an invest¬
ment company's assets that
cap be
contains

one

the

in

invested

a

securities

of

any

peared in
sue

the

of "Trusts

azine.

I

Estates"

and

quoting only

am

corporation. This requirement tained in the article:
the company to diversify,
"... If the entire

wide

benefits

give its investors the

of

diversification

are

silent
the

we

invest¬

These New Jersey bills

ment risk.

'of

of

this, and application

on

general

statutes is vague,

believe.

The

tailed

1940 Act requires that

financial

statements,

de¬

mag¬

been

used

to

buy

annuity in 1932
(annual)

a

...

return

on

con¬

each

article

was

$20,000 had
variable life
the average
the premium
.

written

."
by

Johnson, father of the
variable annuity idea and, until
George

com¬

recently, President of the Variable
Annuity Life Insurance Company
ings, be filed annually with the which is located in Washington,
SEC. These reports must be filed
D. C. and against which the SEC
for the same fiscal date each year.

plete with lists of portfolio hold¬

Assembly
speak
content

Bills 450, 451, and 452 has filed court proceedings to

vaguely

most

dating

and

the Insurance
The

1940

diversified
cannot

of

reports

to

Department.

Act

also

says

investment

own

the

about

more

than

that
of

ment company.

by

an

a

invest¬

The Act also

pro¬

Disputes
I

take

Johnson's
able

have
to

mined

vestment company and

companies




corn-

can

that

deliberate

a

unintentional
in the sale of

or

misrepresentation

that is required

I

in

plan that will

a

adequate regulation.

assure

on

is

an

repeat that

is,

in

fact,

I'm

with

the

Prudential.
I

greatly concerned, though,
about what might develop if these
am

bills

passed. For they will
New Jersey a very attrac¬

are

make

tive

which

in

state

domicile

and

pose

These

to

organize

life

stock

a

make

bills

annuity business
business

stockholders
surance

a

the

for

of

such

of

owners

because the

are

in the 3-5%

stocks

E. T. McCormick

erally

brief

as

pointed

in

as

telegram

so-called

"variable

annuities"

or

certificates

as

interest

of

or

participation in a profit sharing
agreement. They would certainly
not

seem

the

be

to

commonly

of

that

annuities

variable

stock

a

in¬

meaning
implies a

term

which

Must

As such

Be

protections that have been found

variable

contracts,
which the

on

have

compensated

disappear with

can

a

Gentlemen,

if

be¬

come

law, they will be an open
invitation
to
opportunists
and
promoters everywhere. Certainly
I

that my state of New
Jersey is not about to become a
hope

haven

for

Street

or

have
in

the

for

been

the

exiles

the

forced

from

Wall

who

operators
of

out

business

in

We of the

companies

our

should

have

investors'

interests

and

in

our

ment

of

public

damaging to

busi¬

our

ness.

which

not
so

to

proves

is

desirable

this legis¬

urge

approve

these bills

clearly attempt to
legislation

and

experience

essential
elements

to
and

by¬

regula¬

of

(1)

Is there

(2)

Has

I urge

so

upon

the

delicately balanced.

these views

merely because of
in

business

my

a

not

experience

the

on

"Street," but as
employee and

upon you

so-called

former long-term
Commissioner of

the Securities and

Exchange Com¬

mission.

up

better

thought

of

a

that

meet

to

try

to

way

problem?
The problem results from the
impact of cost of living changes

the income

on

A

sion

had

in

by

receive $4,500

to

1951

to

no

pen¬

have

in order to

purchasing

same

defer

persons.

$z,503

a

would

1940

have the
We

retired

ol

receiving

person

in

one

power.
our

re¬

gard for the matchless reputation
of the life insurance

industry. The
organized under the
laws of New Jersey and has had
Home

81

years.

Office

in

this State for

Today

have

one

cies

or

cates

or

than

more

million Americans and

insurance

group

slightly

average

32

Canadians

Prudential

more

poli¬

certifi¬

less

than

$1,000 in face amount.

Flexibility

is

essential

the

to

kind of growth we have had. Our
company

has been notable for the

introduction of

new forms of pro¬
tection. When the company started
in a basement office in Newark

1875 its policies were exclu¬
sively small weekly premium con¬
tracts sold to individuals.
During
Prudential's early years group in¬
surance was unknown.
Hospital¬

in

ization

insurance

Credit

life

known.

were

contracts

unknown.

keeping
social

of

with

new

fields—

changing

the

economic

and

pen¬

unknown.

have expanded

these

pace

un¬

welfare

Group

were

Over the years we

each

was

union

Insured

plans

into

unknown.

was

insurance

of

structure

the United States and

Canada.

State

regulation of insurance
provided a healthy atmosphere
for progress of the life insurance
business.
We
are
perhaps
the

has

Pending

SEC Action

The recent action of the Securi¬

ties and Exchange Commission

bringing the action for
tion in

were

setting

problem?

a

anyone

sion

country is

the

United

an

in

injunc¬

States District

most

highly regulated business in
But
far-reaching
state insurance laws and regula¬

the

country.
have

tions

proved

Of

change.

adaptable

to

most other
ahead with new

course,

businesses

against

things without legislative

or regu¬

latory clearance—just

du Pont

the

Variable

Annuities

Life Insurance Company of Amer¬

ica, Incorporated, should be given
great weight in your consideration
of

the

bills

in

question. At least

enough weight, I respectfully sug¬
gest, to warrant the tabling of
action

with
the

reached

respect to these bills
Federal

a

Court

finST decision

has

in

an

years

keep

un¬

bills which

am

might result in

regulatory authority and

in substantial

New

Jersey

panies which
called

might sell

"variable

question, by

pecuniary loss

insurance

use

com¬

the

annuities"

of the

mails

so-

in
or

instrumentalities of Interstate

Commerce, and thereafter be sub¬

practices ject to not only civil but criminal

of the securities business.

action under Federal Law.

no

can

go

as

governmental approval

start

making

nylon

General

Electric

need

to

nor

did

such

ap¬

proval when it decided to manu¬
diamonds.

facture

Our far-reaching life

insurance
could have

regulatory pattern
been
our

a

road-block to progress. But

states have not allowed

this

to

happen. Thus insurance is able
to
keep providing needed new
forms of protection on a private
basis

without

ment

an

giving the govern¬

excuse

to take

the

over

job.

immediate conflict in State and

Federal

to

the

precipitant action in favor of

these

needed

any

that you do not wish to take

sure

even

lature

confidence

which the economic future of

their

to

of

respectfully

in

or

with, because

it rests that ephemeral ele¬

upon

any

be

removed

established proceeding pending before it. I

long

performance

for

be

tampered

way

until

open-end investment

profit. We do not believe that the

out

responsible people
industry urge that this key¬

stone
any

business

and

No

clean-up of the insurance

business in Texas.

We

financial

in

Court for the District of Columbia

bills

these

sound

structure.

decided

same

plan for college teacners:

its

Regulated

securities, their sale and

their

ent

those

Prudential is

guaranteed payment of dollars.

tion. As you well

Others

to

the

which

the

within

accepted

issues

today

as

Shanks

M.

studied and

May 26, 1956, to Sen¬

on

buy

are

Carrol

possible.

Funston, and add only
opinion as expressed in a

my own

here

say

Keith

Mr.

who
to

The

and

that I concur gen¬
the remarks made by

me

to

the general

pubiic

statement

my

universally necessary
through State and Federal regula¬

profits

promoters
themselves

sale

them.

know, the safe¬
guarding of the buyers of securi¬
The provisions of Section 8 of
ties through such State and Fed¬
Assembly bill 451 offer a most
eral
regulations has become a
attractive inducement to organ¬
keystone in the arch of our pres¬

the

in

make

almost

Inducement

their

shall

Let

to

possible

want

salesmen, should, in
the
most profitable public interest, be subject to the
generally accepted sanctions and
promoters and
the

Legis-

those others

are

insur¬

company.

which

a year;

time

company

tion

common

de¬

upon

available

your

for the sole pur¬
of issuing variable contracts.

ance

the

paid for

the

tJiat

mands

Forbes, that I do not
not too con¬ have the slightest doubt that the

contract

a

Jersey

know

and

pass

quality

I

bills. They are which might be sold under the
highly ethical and pending legislation would be se¬
successful mutual company.
My curities, whether considered under
own
companies' group insurance the guise of investment contracts
sound

a

deter¬

on

New

of these

sponsors

by dividing the cost price

returns

ask¬

tne

ator Malcolm

cerned about the intentions of the

would

vari¬

now

make

protect

properly regulated and
equitably taxed variable contracts

Mr.

are

ing

under

lature

in

variable contracts. Yet I've barely

sale

return 20% per

gentlemen,

into the dividend

today

with

The yield, or return

interest between officers of

in¬

issue

legis¬

Since

public from being victimized

by

to

all states in¬
cluding New
Jersey. We

thai

as

the

in

teachers

consideration.

his

specific

essential to

is

annuities

variable

of

suance

college

an¬

presently

have

effort to show how investment

an

Four years ago the New York
Legislature made possible the is¬

pressing, I

be

of

lation
you

invested

no

Company

America

nuities"

C

•

tried

regulation

records

Contention

statement

annuity

year.

Yield

violent

investment,

whose stock the investment

re¬

th$

Company Act of 1940.

hibits self dealing, and conflict of
an

under

a

corporation's outstanding stock,
control

register

Securities Act of 1933 and the In¬

company

10%

it

that

vestment

.which rules out the possibility of

corporate

quire

proposed

for two years.
the end of the

at

he'd
capital left.
have

of

be¬

the
the

"variable

year

course,

I

50%

redeemed

he

decline in the stock market.

(would have been) over 20%.
This

of

one

the several similar references

forces
to

1956 is¬

February,

serious

year.

per

appear

with reference to
problems raised by

net on our portfolio

regulating the operation and sale embodied in the Securities Act of
of common stock investment
1933, the Securities Exchange Act
plans? Is it not apparant that it of 1934, the Investment Company
would take two or three years or Act of 1940, the various state "blue izers of new stock insurance com¬
even longer for that department to
sky" laws and in the rulings that panies for the purpose of issuing
acquire the necessary staff and have been developed to implement variable annuities. Let me tell
experience to perform adequately these basic laws.
you why:
in a field entirely new to it?
May I offer one more indication
(1) the risk to the promoter is
What are some of the regulatory of the need for most
specific reg¬ virtually non-existent; the public
specifics with which we are con¬ ulation in the marketing of all who buy the contracts bear the
cerned?
types of securities including vari¬ risk,
The 1940 Investment Company able annuity securities. This shows
(2)
the
promoter can make
variable
contracts
can
be
Act requires a detailed registra¬ how
himself a high-salaried officer of
tion statement from each invest¬ misrepresented. Under the State¬
the company; these bills set inade¬
ment company, including a thor¬ ment of Policy
of the SEC, it
quate limits on expenses, officer
ough
recital of the company's would be clearly illegal for an or
employee compensation, and
fundamental investment policies- investment company or officer of
selling costs. In addition,
policies which cannot be changed an investment company to publish
(3) this provision permits the
without
prior approval by the or use literature so misleading as
promoter to compensate himself
company's shareholders. Assembly that from which I shall quote.
in hard cash on the basis of un¬
Bills 450, 451 and 452 lack these
I should like to quote from an
realized paper profits. These are
protective features.
article entitled "Immediate Vari¬
may
never
benefit
The 1940 Investment Company. able Life
Annuities" which ap¬ profits that
Act

opportunity to

you

able to earn

we were

year

capital
Of

of

return

a

4%

not be certain of

of

motives

the

for the

fore

Insurance

first of all

you

less

no

scratched the surface of the detail

provisions of these bills

not restricted

sponsor.

no

staffed and experienced to render
companies which might be formed
protection to buyers of insurance in New Jersey because of the at¬
and annuities, is totally inexperi¬
tractiveness of this legislation to
enced in the regulation of equity
promoters. And we can't predict
investment plans and
would be what motives
might prompt such
unable to give adequate protection
people to buy control of stock in¬
to buyers of variable annuity in¬
surance
companies which are
vestments. The Securities and Ex¬
presently domiciled in this state.
change Commission and the state
If there is a possibility that just
securities departments
have the one widow or one retired

give the public this protection.

of

one

the

integrity of the sponsors of
bills ignore
time-tested these bills. They do not have selfprovisions without which the in¬ dealing in mind, I know, and I am
vestor would find himself unpro¬
sure
that
pyramided : companies,
I

I want to thank

that an investor
companies can ob¬

period
I

Now

and

President, The Prudential

Exchange

It

misleading.

more

no

a

capital.

President, American Stock

to tell you

were

Jersey

tected.

is

of

refund

a

investors

article
be

invest¬

By CARROL M. SHANKS

McCORMICK

EDWARD T.

By

sound, and equally misleading, if

Jersey bills are si¬

tain

investment

plus

the

of

would

of

combination

a

return

ment

the

formula

magic

no

improving returns. He simply
neglected to indicate that the pay¬
out from a variable annuity con¬

Pros and Cons of Variable

and

has

for

Thursday, June 28, 1956

...

Here

in New

Jersey the insur¬

companies and the public
have be'en particularly fortunate
in the forward-looking point of
ance

view

of

the

state government

aa

legislation and insurance reg¬
ulation.
As to New Jersey com¬

to

panies the New Jersey Legislature
has basic control not cnly over
their

operations in this state but

in all states:

;It

is

our

'

belief

-

that

insurance industry as a

the

life

whole has

Volume 183

Number 5546

(

The Commercial and Financial

...

Chronicle
a

responsibility to cooperate with

a

uxe

a0e

or

me

people

secui

to

aver-

press

It is part of that

Their

expanu ana moa-

talk

field—a field wnich has tradition¬

surance

ally represented

a great special¬
sphere of the life insurance

ized

companies.

Our

of

variable

that

an¬

of

nuities stems from the dilemma of
many pciaons now retired
aiviauai or group pension

plans.

and

give

But

also

we

believe

in

the

fixed

number of dollars but

variable

amounts

underlying
ment

to

fixed

offer

to

other

or

fixed

retirement

amount

Historical

studies

in¬

stant amount of purchasing power.

We.are convinced that the propo¬
sal offers the best chance of meet¬

ing the problem presented by the
impact of cost of living changes

long-term retirement plans. No
has

better
An

been

able to suggest
to the problem.

answer

actual

annuity plan
well be in force for 40

be 20

period of retirement

may

30 years.

or

in

count

the

are

ones

thinking about

plans.

The

fact

re¬

that

might guess that there won't

much

next

inflation

more

year

few

or

years

in

the

doesn't

really have much

thinking of

bearing. Also,
long-term vari¬

a

able annuity plan the day-to-day
or
month-to-month
performance
of the stock market isn't the test.

The

real

lieve
our

test

in

is

There

;

whether

we

be¬

here.

that

be¬

are

it.

loophole

But

even

if

there were, experience proves that
and the Treasury have
been

alert

to

Arguments
and

plug

loopholes.

up

about

Federal

taxes

Federal securities laws have
place here.

participation

agencies
to

has

that

see

been

not

policies
invest¬

ing on a sound basis. Far-reach¬
ing state regulation has done its
job admirably.-The right to make
investments is not

the

special prerogative of
limited group of enterprises.
Stock

years

the New

any

York

Exchange and Wall Street

securities

firms

have

hun¬

spent

dreds of thousands of doHars tell¬

ing

in

us

zine

should

make

in

are

behaved

long-term future of
productive enterprises.

We

maga¬

-extensive

plans

an

Today

because

uproar

we

the-*'adoption

of

As¬

sembly Bills 450. 451 and 452. We
certainly nothing very are convinced
this is a good pro¬
radical in suggesting that our re-,
gram—good for the life insurance
tired people should have a chance
companies, good for their agents,
to participate in that future.
and most important of
all, good
Such
people in the securities for the public.
There

is

business
don't

as

proposal
claim they can use the

even

variable

this

oppose

annuity approach to the
Unless they become life

problem.

insurance

companies, they can't
the annuity principle of guar¬
anteeing to spread a principal

use

amount and
over

a

But

they

earnings thereon

new

begin selling
it's going to

coverage

competition. So

mean

even

though

they should be our top apostles
of
private enterprise and free
competition
they
are
turning
heaven and earth to have this
idea

new

suppressed by governmental
'
1

action.

Before this Legislature

they

are

asking that certain statutory con¬
trols over accounting and report¬
ing practices
of life
insurance
companies

strait

should

jacket

gressive

to

be

kept

block

this

as

a

pro¬

move.

about variable annuities already—
and

to death and regulated to death.

The

New

or

extend

Acts,

the

taxes

a

lot

and

Legislature

Federal

Federal

Nonetheless

ably hear
eral

Jersey
the

you

tax

laws

Securities

will prob¬

today about Fed¬
Federal

securities

regulation.

The opposition doesn't
want to seem to be against prog¬




great deal about

a

the life insurance business and its

existing products and sales meth¬
ods.

These

the

are

hundreds

of

college and university teachers of
tionnaire
of

In

the 319

"Yps"

think

bv

to

who

a

ques¬

group

replied

the

84%

be

offered
of

"Dp

annuity

ovm

you

contracts

the

to

insurance

Similarly,

answered

question

variable

life

this

college teachers of in¬

to

shouH

to

response

sent

surance

public

companies?"
550

members

of the American Finance Associa¬

tion

who

responded

such

to

a

Questionnaire, 78% said that they
thought

that

quite

of

association

that

a

retirement plan
fixed dollar income

conven¬

over a
15
20 year period or
longer could
create serious financial

problems

variable

a

variable

annuities

help prevent.

Other prudent long-term inves¬
tors, including those with trustee
responsibilities, have increasingly
recognized that common stocks
have a place in their overall in¬

personal

bee.

trusts,

common

ket

stocks.

levels

At current

this

of

mar¬

figure would

and executives with

a

professional

Out at the

billion

of

stocks

common

were

held by religious, educational and
charitable

funds

all

—

of

which

must be administered
pursuant to
the highest trust
it

variable

annuity

practicable

companies
toward

join

increased
In

stocks.

life

for

to
a

will

insurance

this
of

use

sense

make

we

trend

common

only

are

asking for permission to catch
with

up

another

type

of

survey

has

iust

recently been completed. It dealt
how
many
life insurance

companies

exnect

be

issuing
variable annuities within the next
to

96

life

space

has

consistently maintained that in
the insurance business shorter
pe¬
riods of statistics mean

riod
for

decade.

has
it

been

an

and

adjusted
split-ups

ten-year

pe¬

important one,

several

of

years

inflation of the

well

as

been

The

embraces

pronounced
omy,

have

dividends

econ¬

several compara¬

as

compara¬ tively stable years; and it
put in¬
little by themselves, that surance
management to one of the
investors would do well to select severest
tests in their
handling of

periods

of

ten

years,

or

even

longer,

in which ; to put insur¬
statistics to a test. And util¬

extended coverage in

a

term that

saw a number of

devastating hur¬
brought great losses
izing such a longer span, a favor¬ to the
industry. Consolidated data
able or unfavorable trend
may .be are used in the cases of
fleets; and
ance

1955

and

for

1946-1955

ricanes

that

ten-year

a

inclusive.

average,
These earn¬

ments, less Federal income taxes,
for the net figure.

-Earnings-

Union

Dry Ginger

of

man¬

yesterday
offered $12,000,000 of Canada
Dry
Tnc.. 20-vear 4% sink¬

ing fund debentures, due June 1,
1976, at 100% and accrued inter¬
est.

Net proceeds from the financing
will be used by the
company fori

corporate

purposes.

The debentures will be redeem¬
able at the option of the
company,
five years,
at redemption

after

ranging
from
104%
to
100%, and for the sinking fund at
100%, plus accrued interest in

each

case.

Canada

2.82

1.42

2.34

4.58

4.33

—0.60

2.18

Bankers'

Ginger

Dry

line of

&

__

Shippers'

_

Insurance

2.56

Fidelity Phenix
Fire

Fire.

3.36

2.72

Ins

2.78

3.19

___

Association

Fireman's Fund

Firemen's

2.66

2.25

Federal Insurance t

5.11

4.15

(Newark)

2.86

Glens Falls Insurance

4.27
v

3.27

•4.60

-Si,5.54

^

2.62

2.47

^

2.86

2.55

9.59

7.97

Ale,

Inc.,

distributes

and

a

carbonated

beverages
States, the most im¬
portant of which are Canada Dry
Ginger Ale, which is manufac¬
a

secret

Fire

Insurance

3.27

3.12

5.00

,;4.08

Fire

5.15

6.06

Union

2.84

4.47

2.03

3.54

New

Hampshire

Northern

formula, and

Insurance

9.00
2.30

2.54

Pacific

4.30

3.94

2.91

V

6.24

North River Insurance

4.62

Fire

Phoenix Insurance

Providence

Washington

St. Paul Fire &

1.25

Aetna

Re-Insurance

2.13

1.31

1.37

0.86

5.65

2.91

7.99

•

Bond

6.36

4.16

Fidelity

&

Guaranty

2.18

5.85

4.07

6.20

Surety

r.

16.13

2.26

Surety
Casualty
Fidelity & Deposit

States

1.75

1.95

Continental

Seaboard

4.57

12.32

American

Massachusetts

3.43

2.60

1.59

Fire

Casualty $.

American

2.45

2.66
1

United States Fire
Westchester

0.37

3.18

Marine

Security Insurance
Springfield Fire

5.67

t Pro forma, Federal and United States Guarantee assumed
to be merged for decade.

in the United

tured under

Insurance

Continental

United

manufactures

full

1.29

American

National

and

banking
(June
27)

syndicate

general

$5.58

Agricultural Insurance

National

investment

an

Ginf^r Ale

1946-1955 Avge.

Insurance Co. of North America

Securities

Corp.
Hornblower & Weeks, joint
agers

1955

$5.43

Home

Ale 4% Debs. Offered

t Pro forma, Aetna Casualty and Automobile Insurance
sumed

It

will

to
be

be

merged for

noted

that

in

as¬

decade.
almost

It is

our

observation that, some¬

instance the high grades in how, no matter which test insur¬
carbonated beverages include this list show better earnings for ance stocks are subjected to, un¬
Canada Dry Quinine Water, Col¬ 1955 than for the average of the derwriting profit
margin, earn¬
ten years through 1955.
Only a ings trend, growth in investment
lins
Mixer,
assorted
flavored
drinks and Spur, a cola-flavored handful of the secondaries showed income, gain to the shareholder,
similar behavior; a considerable etc., the high grades continue to
beverage. The company has a net¬
as
high grades, and the
work of company-operated bot¬ majority of them reported a poorer show
1955 than the average for the dec¬ lesser grades seem to continue as
tling plants, of which there are 21
ade.
In other words, the "blue just that.
in the U. S., four in Canada and
*
*
*
two in Cuba. Another major divi¬ chips" showed a more favorable
A note of
interest: May fire
sion of the company's carbonated trend; the secondaries a less sat¬
isfactory trend. And as the longer losses, as estimated by the Na¬
beverage operations is the licens¬
term showing is of such impor¬ tional Board of Fire Underwriters,
ing of independent bottlers in
tance in insurance stock invest¬ were $87,681,000, or 22.1% above
the
United
States, Canada and
ments, those showing the better May, 1955. Those for the current
other countries.
As of May 31,
trend give the investor better re¬ year's
five
months
were
11%
1956, there were 167 licensed bot¬
sults.
above the like period of 1955.
tlers in the U. S., 18 in Canada
Canada Dry Club Soda.

Its other

and 69 in 42 other countries.

and

spirits

distribution
line

of

of

a

alcoholic

The

department

of

comprehensive

beverages, both

imported and domestic.
the fiscal

ended Sept.

year

30, 1955, the company and its con¬
solidated
sales
come

subsidiaries

had

net

of

$74,259,000

and

net

in¬

of

$3,491,000.

For

the

six

months

ended

consolidated

pect to be issuing variable annuity

$35,530,000

contracts within

income

that period.

This

the

Great

March

18 months.

The survey states that
insurance companies ex¬

stocks.

in

figures
stock

Hartford

Canada

For

with

for

American Insurance
Hanover Fire

the parade.

'

University of Indiana

ings

earn¬

be

either

int°r°st in finance.

given

higher. In addition the Ful¬
bright Report showed that $6.3

bers of thi<? association

officers

been

consolidated

even

the company handles the national

corporate

already

1955

ings, broken down, of the prin¬
cipally traded fire and casualty

on

31,11954, held $32.7 billion

mem¬

or

the

Insurance Stocks

discerned that will be more mean¬
vestment programs. In last
year's
earnings consist of statutory un¬
report of the Fulbright Committee ingful than merely several years'
derwriting gain or loss, the equity
to investigate the stock
data.
market it
in the change in the
premium re¬
So it is that there is given this
was^ brought out that bank ad¬
week earnings statistics for both serve, plus income from invest¬
ministered

companies. Over 70% of the

university teachers of finance and

—

annuity plan might tively

wine

are

has

providing insurance

or

that

This Week
There

long retirement here

a

By ARTHUR B. WALLACE:

some¬

rest

It is the belief of the

tional
a

a

the

should be issued bv life insurance

variable annuities should be taxed

can't revise

also knows

economics

Before
Federal
agencies
in
Washington they have asked that

large, wholly impar¬
a great deal

a

tial group that knows

insurance.

that if life in¬

assume

companies

surance

this

the

full life time.

There is

And

us.

than

age

3

health

extremely

prices

them.-

urve

Since
are

may retire at

lower

may result.

of

use

stock investments.

common

they

and

newspaper

that ^retirement

ads

annuity.

pilot

a

what

necessary

up their present
and annuities contracts
by

recent

high,

companies

backed

In

variable

standards for pilots

Federal

of

insurance

stock

annuity plan for state employees.
The Airline Pilots Association has
shown substantial interest in the

The

tax

any

from

Far

Governor's Com¬

a

responsibilities.

Congress

the

great

funds

isn't

common

Long-term trends
tirement

mutual

The

50 years or longer. The accu¬
mulation period up to age 65 may
last for 40 or 45 years and the

in

salesmen

ing sold in this country.

no

or

be

ciled"

a

individual's
very

that

fund

already doing with the shares
the
so-called^'Canadian domi¬

of

indicate

type of combined plan
would have provided a fairly con¬

some

mutual

are

sources

this

may

the

claiming.that their product
offers a tax advantage just as
they

variable

supplement

annuities

come.

one

are

satisfied that after variable
annuities are being issued gener¬

ally

propose

annuities

on

we

will be

.dollar

that

comply

which

we are

to an
stock invest¬

portfolio.

We

of

of

keyed

common

laws

There is no unfair regulatory
advantage and no unfair tax ad¬
vantage here. As a matter of fact,

which provide a life income not of
a

as we now

to

all

subject.

need

annuities

—

-

with

protection against loss of income.
for variable annuities

b-

quirements just

solid

such

Exchange Commission juris¬

the
annuities, as
we plan to
issue, them, are subject
to SEC
jurisdiction, it Would not
alter our plans to go ahead. We
would then comply with SEC re¬

policies and

In Wisconsin

,

35

mission on state retirement plans
is actively at work
on a variable

pilots
justification

no

Even if it should be held
by

of the dollar.

can

centralized

courts that variable

will go on stressing them, because

else

regulation

be

Washington.^

diction.

Prudential believes in the con¬
tinued need for fixed dollar an¬

nothing

must

for treating variable annuities as
"securities" subject to Securities

when purchased years ago
today
often
fail
to
meet
the
buyer's needs, primarily because
of the impact of inflation on the

nuities and insurance

governmental

We feel there*!?

quate

power

all

"

Annuity incomes that seemed ade¬

purchasing

Appap&ntly they have
' to^the
philosophy

victim

business

in

in-

on

regulation

companies by state gov¬

ernments.

fallen

//;;

.

advocacy

about

completely ignores the far-reach¬
ing and effective^regulation of in¬

service in the annuity

our

competition by talking about

them with .taxes and the SEC.

proviae

responsibility to
ermze

and-so they will continue to
try to dignify their efforts to sup¬
ress

seif-re-

great mass of

plans.

ny

aiid

tnrm

i.iiuaavef

Lance

(3103)

net

and

sales

31,

aggregated

consolidated

amounted

to

1956,

net

$1,091,000.

every

The Commercial and

l

Financial Chronicle

Thursday, June 28, 1956

...

(3104)

36

.

.

,

'

.

-I

,

v

'

'

I

eral funds

•

,

iContinued from first page

Belgium, and 0.63 in Italy.

practice is to require local people to pro-,
themselves with what they want. They are in a posi¬
to know what it costs and to decide whether they

i:As We See It

<

tion

have to be found has not brought forth any
straightfoward facing of the issue. It still remains to be
seen where the money is really coming from, and no pre¬
tense has been made of trying to prune expenditures
elsewhere in order to make it possible to proceed with all
this road construction without adding dollar for dollar to
the tax burden. In point of fact the original proposals of

Administration were so

the

Even in the

often

obviously defective and so

date. ;

*

.

If

both locally and on an

true

•'*

constructed

Continued

.

and

place whenever new roads are being planned and
need not be reminded of the political pitfalls that
the designer of any system of roads. Our road build¬

laid out,

beset

still remains to be planned or designed
practical way, and its financing continues to be a
problem for us and our children. There should, of course,
be coordination in the planning of road systems—but if
we are to be really successful, some way has to be found
ing of the future

in

a

to

by-pass time-serving politicians. Of course, this prob¬
virtually all public undertakings—

lem is encountered in

another

good reason for keeping such

minimum

—

but when it bears upon projects

of

from first page

so

today

furnishes

actually

the world's

States

and is

demand will be so great
that all coal, as well as all other
will

How

.

•

time

report says it has taken 55 million
as
the
maximum
because

tons

Meeting Extraordinary Coal

which are

the situa¬

right—that
the

merely

to

should

played politics

special benefits for the veterans of our

were

catch

and

hold

we

the

have

votes

soldiers, sailors and marines, have, of

of

the

is

What

better roads laid out with
Much of it is

more




defi¬

be

•

only 20 million tons more than
last
year.
Under these
quite apparent

it

was

circumstances it is

transport

tons

went

to

overseas

des¬

and

tinations. Another peak movement

million

22

of

British coal

But in other years

strike.

in

occurred

by the

caused

1926,

tons

the

ex¬

years

to

Western

Eu¬

Europe's
Western
Europe used 805 millions of short
big

is

Western

demand for energy?

tons of coal

equivalent in energy
in 1955.
This is made up of coal
and lignite 597, oil products 139,
hydroelectric 63, and natural gas
6.
Of the coal, 27 million tons
were
imported from the United

Coal

States. This

was

71% of all United

States coal exports in 1955.

biggest customers in West¬

Ger¬
many, which took 6,672,000 short
tons; Italy, 6,056,000; the United
Kingdom, 4,858,000; The Nether¬
Europe, last

were:

year,

lands, 4,623,000; Austria, 1,219,000;
Belgium and Luxembourg, 1,142,000; and France, 1,017,000.
Western Europe's Future

What
coal

the

is

demand

in

probable
Western

in

the

Demand
future
Europe?

demands
equivalent of

millions of short tons of coal will
go

to 926 in 1960, and to 1,323 in

1975.

These projections are made

in the report just

published by the
Eco¬

Organization for European
nomic Cooperation.

more

I

1945,

finally, it is estimated to be
tons this year, based

42

million

on

the first quarter.

Production and overseas exports

reveal

high points, 1947 and 1951, but

beginning

with

1954 we see the

of a year - to - year
upward trend in exports.
The
forecast for this year is a contin¬

development

uation of this rise.

Export

significance of the
trend is the change in the charac¬
ter of the export coal movement.
It is becoming more evident day
The

real

day that the foreign demand
for American coal is no longer on
spot basis, but is permanent and
expanding.
Export coal is now
a

ports?
Chief

The world-wide expansion of

its

coal

among

the European

the

problems

of

coal industry are a

in spite of
and the low
manpower.
The coal
man per day in the

steel-making capacity is a reliable

declining labor force

guide to the magnitude of future
increased
coal
use,
keeping in
mind that it takes a ton of coal to

recruiting
output of

make
core

a

of

ton

of

steel.

European

The

demand

hard

for

output

per

efforts,

United States is 10 tons,

compared

with 1.21 in Great Britain, 1.12

in

that

This

al false impression of the con¬

tribution

nuclear

that

energy

is

to
Western
Europe's energy needs during the
next 20 years. The report forecasts
that nuclear energy will not pro¬
vide more than 8% of the total
likely

make

to

energy demand

is

It

1975.

in Western Europe
mistake, the re¬

a

indicates,

port

to

large scale is

The

just around the corner.
clusion

that

assume

atomic energy on a

con¬

is:

"For many years to come con¬
ventional forms of energy will be
needed and

coal must remain the

mainstay of the Western European

economy."

energy

Thus,

find that international

we

has

become

of the

United

coal

States.

established

an

industry in the

We

now

face

the

responsibility of seeing to it that
the exportation of coal continues
to

It can not.

says

tance have been unfortunate.

part

increase

report

enthusiasm aroused
by nuclear energy, and the head¬
line publicity given to develop¬
ments of relatively small impor¬

trade

production materially and lessen
dependence on United States im¬

of the

popular

duration.

Europe

commercial

a

portion

sizable

any

being purchased in sizable quan¬
tities on contracts of 3 to 5 years

Can

on

The O. E. E. C.

the

in

Permanent and Expanding

energy,

is too far in the future to

basis,

is

of coal for the last 10 years
two

Atomic

load.

tons—it averaged
—and

petroleum, natural
falling water are not
available in quantities sufficient
to meet the current energy deficit.
But

and

gas,

annual tonnage from 1920

amounted to 4 million
22 million tons
in the 10-year period 1946 to 1955

to

to

energy.

the

during

—

of energy can be

sources

expand in response
heavy demand for more

the

to

bear

by

Western Europe's energy

expressed

1920

since

average

Other

expected

United

the

from

exports

States

.

returned

strictly local in significance and importance.
care of
locally. Federal aid for such
projects is quite unwarranted, whether directly or in¬
directly provided. All too often in this day and time Fed¬

That should be taken

the

In

How

new

long since

and
foresight is simple enough.

this

for it has a direct bearing
the economic strength that
underlies
the
ability
to
resist
aggression.

not

ought to be done in the matter of

going

aife

meet

and

upon

pensions to pale into insignificance. In this
only what all of it is costing today both
directly and indirectly, but what it must inevitably cost
in the future by reason of guarantees of loans and the like.
it

tons

help

rope,

caused the old
case

million

to

na¬

that I
This year

Europe

speak.

to

available

made

invented, often

course,

huge new expenditure, British coal production in 1965 will

ahead Eu¬
port volume varied widely, and it
rope's import needs will be much was not until after World War II
greater. It is vital that American that
export became a major factor
coal in the necessary amounts be
in the coal industry.

paid out to veterans without any real
a first rate scandal. The bonuses, and

other devices that

lfke

States has

hunger of the

Western

40

over

The

moneys

various

of

coal

the

tions

ciency.

accumulating number of foreign wars is another case in
point. There was a time when "pension scandals" filled
the newspapers of the day. We thought—and we were
claim to them

about

ern

have

Even with

billion).

(close to $3
this

increased port

considerably

need

We know the United

abroad

passes.
we

of

that Great Britain, once the coal
facilities. "Larger supplier to Europe, can never
the
world's
largest
recoverable imports
in
the
future — says again fill that role.
coal reserves, and the capacity ef¬ O.E.E.C. — would almost certainly
A friend of mine who holds an
ficiently to produce it. Behind the have to come from the United
important place in
the British
Iron Curtain, in Russia and Red
States and their cost would be
coal and shipping trade recently
China, are also vast reserves of largely dependent on the level of told me that in 1913 Great Britain
coal. We may assume their ability transatlantic freights at the time."
exported 75 million tons of coal,
to mine it and their own growing It is my belief that both port and
18 million tons moving through
need for it. In South America and
transport facilities can and will be his home
port of Cardiff, Wales.
. Japan, the coal resources cannot improved, and that United States
Last year no coal was exported
keep up with the growing needs export can go to the level of 100 from
Cardiff, and coal loading
and they are importing United million tons a year.
terminals in that port are being
States coal.
The
exportation of American converted into unloading facilities
There is one vital area in the
coal overseas began as far back as
for the permanent importation of
Free
World, however, where a the 1890's.
The first really sub¬ coal/
serious shortage of coal threatens
stantial movement of export coal
both prosperity and peace.
It is occurred in 1920 when 22 million
Coal Covers Energy Deficit
</ '

a

The lavishness with which

the next ten years

mines, capital expen¬
one
billion
pounds

new

ditures

probably

would

amounts

larger

Demand

fore¬

equipment and the open¬

new

ing of

1955, 44 million in 1960,
and 55 million tons in 1975. The

extraordinary

in

necessitate

million

Board

declining coal produc¬
present collieries would

in

tion

the

from

imports

coal

Coal

that

casts

Eu¬

estimates

O.E.E.C.

upwards?

been revised

National

The

in

tons

demand for coal be met?

road building program lies in the fact
of the future have already been committed

in the matter of

costs have

for

United States will be—27

will be needed.

this

for metal¬

million tons for 1956.
The

government money in

improvements and new
mines, output targets have been
revised
downwards
and
capital

purposes.

ropean

greatest share of

energy sources,

responsible — requires that so large a proportion of our
efforts be given to preparedness for war. Few have given
real thought to the extent to which the old-age and survi¬
vors
insurance scheme will presently draw upon the
resources of the productive elements in the population.
Yet that drain exists and will grow more and more stag¬
as

amounts of

Europe con¬
17.5 million tons of United
metallurgical coal in 1955,
reported to be seeking 22.5

sumed

energy

many

gering

After six years,

"dismal."

as

diligent long-term planning by
the British National Coal Board,
and
the
investment
of
large
capital

is

coal

States

United

of this second one,

part

energy.

things which can hardly be expected to be pro¬
ductive in any real sense of the term. This fact is the more
to be lamented by reason of the circumstance that the
world situation—for which we ourselves may be in part

to

The authoritative London pub¬
lication, "The Economist," regards
the British coal production out¬
look

As energy needs double
in the next generation, more and
more coal
will be required. The

the

hardly be said that the real reason that so
trouble is encountered in finding ways and means

that the funds

,

lurgical

Coal

need

financing such

from depths of 1,800 to 3,000

range

problem!

too.

Squandering Funds
much

shafts

The

mines grow deeper

Prosperity and Peace
heaviest

undertakings to a

expected to cost many, many billions of dollars,
tion appears to be particularly disturbing.

It

of British coal
and deeper. In
1924, the average depths was 1,000
feet, today it is 1,300 feet. New
mines
opened
in
recent
years
ing.

Coal's Vital Place in World

inter-community and even

special interests prefers to have them.
the opportunity to observe—
who has not? — the political maneuvering that has

involved

of

sense.

Citizens who have had

taken

should

ficulties

■■■■

expected does not augur a surplus of roads/Roads
must, of course, be built where they are needed and
wanted—not where some politician or other individual

inability to adapt older
mechanization, and dif¬
in deeper min¬

the past,
mines to

feet.

road

our

builders

with

production in the face of
rapidly
expanding
energy
re¬
quirements. These include faulty
and wasteful mining practices of

road systems, their benefits

chiefly to certain individual states and

accrue

We still have

The fact that certain of the recently
toll roads have not attracted the traffic their

inter-regional

of larger

in¬

to

abroad

countries

some

crease

most of the funds.1

up

■'VV' ' '
If one could be sure—as one certainly cannot—that
a national system or systems of roads would be skillfully>
carefully, and wisely laid out, and that such a system
would be efficiently developed in the years ahead with
funds prudently and fairly raised from the people, one
might find it easy to give approval, quite possibly hearty
approval to some such scheme as that now put forth. Cer¬
tainly if the motor industry is to continue to produce and
sell cars as it has in recent years, and if the people of the
country want to increase their ownership and use of motor
vehicle transportation, more roads are essential. This is
•

of

really be paid for in rough proportion to benefits received.
Naturally there will be sort of national residual which
must be charged against the nation as a whole, but the
current tendency is to have the Federal Government put

patently suitable for political attack that one could hardly
have expected the Democratic politicians to fail to make
the most of their opportunity in this, an election year. And
that seems to be essentially the history of this road build¬
ing legislation to

case

are

sons

local communities.

state aid to

decline, other rea¬
given for the inability

and manpower

really need the improvements enough to pay for them.
Similar reasoning, of course, applies in many instances to

would

productivity

addition to low

In

A much sounder

vide

in France, 0.78 in

Germany, 0.98

supplied merely because it seems to be so
Federal Government to raise funds.

are

much easier for the

be

the

the

U.

S.

billion

dollar

business

of

Department

Com¬

has called it.

merce

Now

examine

is

the

this

critical

channel

time

of

to

interna¬

tional trade that has been set up,

connecting
mine

with

the
the

American
foreign

what needs to be done to

coal

consumer,

strength-

Volume 183

the

Number 5546... The Commercial and Financial Chronicle

channel, and keep the tioa]

moving?

'

.

There

^

•

four

are

*

,v

major parts in

this channel..

:

(1) Production
the mines.

,

of

;

the

coal

Ship at Competitive Cost,

«

.

at

(3)

Third

is

(2) Rail

transportation

from

consider

no

mine to tidewater.

merchant

the

(3) Ocean transport to foreign

taken

marine

of

place.

been

distribution

overseas.

By GERALD D. McKEEVER

It is

Grande

basis

and

Conservative

Financial

quality and quantity of
shipping are limited. Herein

ocean

Institutions1

lies

one

As to the first our highly me¬
chanized and efficient coal mining

We

need

industry has well established its

across

ability to produce the coal at low

enough to hold the markets.
(4) No less important is

cost.

-

The coal producers are mak¬

ships that

selves.

The U.

the

at

ocean

time

that they will increase
capital spending" this year
to $300 million.
This faith and

terminals,

their

as

confidence being exhibited by the
American
coal
industry
have

end

to

spread

conservative

most

our

financial

institutions,
such
as
investment
houses,
and

banks,

trust funds.
A

the

advertisement

leading bank, the

by a
First National

coal

loading

the

of

the

piers,

cost

routes for

ocean

redistribution

cargo.

of

coal

for

these

four

problems
and will lay the foundation

areas,

international

an

City Bank of New York is head¬

that could

lined

bilizing the

Diamonds," and it continues "Coal

the world.

There

production

coal

trade

economy

by

"Bright

1975

Please

last

.

wants

than double

stake to stand by

when

help."

particularly
When

its

put

those
bank

a

behind

money

future, it is saying it with

A

heavy
responsibility
rests
upon the coal industry to produce
good low-ash coal, well prepared,
and

reasonably

priced.

Far-

sighted producers recognize that
a quality product alone is the firm
foundation

of

the

export

coal

trade.
We

inade¬

coal

trade channel.

The American coal

industry, the
union, and the railroads
in an unprecedented

miners'

partnership.

It is my, privilege
today to announce the foun¬
dation of an organization which
will have a far-reaching effect on
the future of our foreign trade in
here

coal.
Announces

New

on

Venture

Export

Late last fall the

count

can

are

international

our

at

and do nothing

that there

we see

quacies in

is too much

have joined

than words.

more

long way in sta¬
and peace of

a

bank

words.

to

,

coal's

go

more

.

notice

three

Black

with

can

.

for

Future

top executives

the solid back-

of the industries and organizations
most vitally concerned with the
high productivity and efficiency. overseas
export of coal held joint
The
United
Mine
Workers
of
discussions in Washington. Called
America, to its credit, has histori¬
by Joe Moody, President of the
cally supported mechanization in
i

.

.

.

.

.

.

,

jng of the miners in maintaining

the industry.
Six years of peace
in the coal industry have proved
what

progressive

do

can

men

working together.
Rail

Will

(2) Next
from

rail

tidewater.

transportation
Sneak¬

two

largest railroads
that, originate coal for exnort, who

together

through

Hampton
fully

80% of all the coal

move

exported

the

Roads,

of

port

recognize

we

obligation to provide

our

an

ample

supply of coal cars for
-loading, to maintain adequate fa¬
for

cilities

dumping, and to give
service at reasonable rates.

good

These

railroads

mak¬

now

are

ing heavy capital expenditures to
increase
the
cap^citv to handle
export coal at Hampton Roads.
Lambert's

At

Point

in

Norfolk,

the Norfolk & Western is
additional

tracks,

piers,

building
and

ter¬

minal facilities. The Chesapeake &

2ZJSTA
Newport News
a

that

will

into

go

coal

pier

operation

this

new

fall, with supporting yards, tracks
other termnial facilities.

and

The

have

together

14,000

now

new

all-time low (around 1%).

an

The

export
per

roads

hopper
order, and bad orders are

on

cars

at

two

nearly

railroads

handling this

are

traffic at less than

cent

a

ton mile, in trains which rep¬

resent the world's lowest cost land

transportation.
•:

Because

presidents

of

union,

coal-

the

originating railroads. A survey of
all phases of the coal business was
made, and on May 28 the group
voted

to organize

tion.

be

to

a

known

Coal Shipping, Inc.

corporation

were

new corpora¬
as

American

Papers of in¬

filed earlier this

the

capitalizing

week,
at

company

million.

£50

This

corporation will pro¬

new

mote the

export coal trade on the

?

economnieally.
fact

can

—The

United

be

this

suoerior

States

can

of

the

mined

for

less

shipment
than

the

overseas,

cost

of

at

coal

mines in Great

much
at

the

years

in

even

rate

and

increases

level. This is

only partly indicated.

by the fact that while the
all

factor

of

62,928,

the

over¬

ton-miles per
hour last year was
gross

freight train

1956.

:

corresponding figure;

had been appealed by both
roads—by the Union Pacific which
wanted no part of a joint rate ar¬

middle link in

the

Burlington

Island

the transcon¬

the

and

eastern

at its

end

Rock
the

and

rangement, and by the "Denver"
because of the relatively inconse¬

Western Pacific and the Southern

quential gain provided by the or¬
der. The High Court decision sus¬
taining the ICC thus precludes,
for the time being at least, the

ver"

Pacific

the western,

the "Den¬
is benefiting from expanded
on

chased about 124,000 shares and it1
announced

was

on
May 16 this '
that it held 170,811 shares in
treasury to cover the 170,810

year

tinental route formed by its con¬
nections with the Missouri Pacific,

its

shares

which

April 11 of this

stockholders

on.

voted to retire.

year

This acts to increase the leverage
in these shares which was con¬

siderably reduced by the elimina¬
tion of the former 5% preferred
stock by conversion, which was
completed in 1954. Leverage is an.

both di¬
attractive
feature
in
a
growth,
importance,
situation, and apparently the road,
however, it is enjoying the fruits
and
its stockholders set greater
possibility of an "across the board" of rapid growth in its own terri¬
joint rate arrangement which the tory. Since 1949 the road has add¬ store by improving on this aspect
than by using its excess funds to
"Denver" had so long been striv¬ ed
$6 V2 million of annual revenues
retire bonds. This tends to suggest
ing for, but may not stand in the from industrial installations on its
that there may be no early plans
way of separate actions from time own lines. Last
year the 'Geneva,
to refund the three bond issues of
to time for the establishment of Utah
plant of' the Consolidated
the road which arose from the
joint rates .qn specific commodi¬ Western Steel (U. S. Steel) made
1947 reorganization.
ties or groups of commodities in an
$8V2 million investment in in¬
respect of which the latter might
be able to prove competitive dis¬
advantage

or

injury. In the mean¬

time, however, the decision of two
weeks ago is regarded as being
somewhat of a victory for the
Pacific.

Union

'

The effect of this
"Denver"

only

nevertheless

decline

The

small.

been

has been

date

to

little under two

a

points, but this has been admitted¬
ly in a period when rail stocks

generally have been firm to a
little higher as measured by the
since June 11. The gain
more noticeable
in the
Jones Rail average. The cor¬

averages

been

has
Dow

responding Standard & Poor's av¬
has showed only small frac¬
the same period.
There may be several reasons
for the market's having taken the
final word on the Ogden Gateway
erage

tional gain in

case

so

first

largely in its stride. In the

place,

of

many

rections.

who

those

bought "Denve r" speculatively
some time ago in the expectation
of a favorable outcome may have

since become tired out and
stock. Secondly, there

their

the possibility

marketwise.

reflected
there

the

is

stronger

from

greater

creased

capacity and its $18 mil¬
anhydrous ammonia plant is
completion this year.
The
road
is
naturally enjoying
heavy volume of traffic from peak

lion

Union Tank Gar Co.

scheduled for

Colorado Fuel

Geneva and of the

Iron

and

piant at Pueblo.of

Growth
traffic

and

the

both

revenues

(ton-mileage) 'of the

Denver & Rio Grande Western has

consistently

the
both the

well above

held

corresponding trends of
Class

I

total

the

of

and

average

district

Western

Central

the

for

for the past

five years. In addition
gained greatly in
operating efficiency, as a result of
which it stands close to the top of
the

has

road

the

list

as

ratio

the

to

of

carry-

through of gross revenues to pre¬

operating income. Refer¬

net

tax

ring

to
I

Class

measure

ranking

the

roads

of

according

in the March 29

leading
this

to

issue of

"Chronicle," it will be noted

the

that the "Denver" stands sixth in

this particular

tabulation.

One key to

in

Offering Underwritten
The Union

of both

operations

near-peak

or

hour

is

traffic

Of

the Consolidated Western plant at

the price of

on

has

stock

connecting

Finally,

by acquiring ships of its own and
placing them in the export coal
trade.
Other plans will
follow,
directed toward additional prob¬

the

to

ment

the steady improve¬
operating efficiency has
100% in

Tank

Car Co. is of¬

fering to its stockholders of record
June 22, 1956, the right to sub¬
scribe on or before July 9, 1956,
for

335,714 additional shares of
capital stock (no par value) at $29
per share at the rate of one new
share for each
This
ten

seven

shares heldl

offering is being underwrit¬
by

group

a

of

investment

banking firms headed jointly by
Smith, Barney & Co. and Blunt
Ellis & Simmons.
The net proceeds will be
to

added

the general funds of the

to

pany,

com¬

for company's

pay

ex¬

pansion program.
The Union Tank Car Co. which,
was

incorporated

in

Jersey

New

in

July, 1891, and until 1912 was a
subsidiary of the Standard Oil Co.
(New Jersey), is engaged in the
business

of

tank

owned

railway

furnishing

by it to shippers
of liquid products in bulk, and of
building and
maintaining
such
cars in its own shops.
cars

been the increase of over
gross

ton-mileage

probability facilitated

freight train

per

This has

1946.

since

been

by the constant pro-

Now

Colson, Marsh

WASHINGTON,
firm

name

D.

C.

—

The

of the Marsh Planning^

dieselization throughout
& Investment Company, 1832 M
this period to the
point where
ment of American coal.
It will been "cushioned" and supported
Street, N. W., has been changed
dieselization
powered 99.6%
of
be remembered that it was four by sounder buying on the strength
to Colson, Marsh and Company.
of
its
relatively
modest
price standard gauge freight train miles
that M,
in 1955, resulting in the lowering
proposed cooperative venture to around the 42 level based on cur¬
Now Reliance Sees.
of the transportation (cost) ratio
provide more ships for export rent earnings and giving little rec¬
The firm name of Columbia Se¬
to 29.4%, or the lowest since 1943.
coal.
ognition
to
the strong growth
are
evident in this Further dieselization, largely to curities Corporation, 135 BroadThis is an historic moment in forces that
take care of growth and need for way,
New York City, has been
situation
the coal industry. We stand as a
in

lems

the

international

year^go

cohesive

move¬

the

that

price

of

"Denver"

has

group

the

—

coal

pro¬

The
Western

porters, and the railroads.
Our
unity is the assurance to the free
nations that coal, America's great¬

which

est and most abundant natural re¬

share

1955 earned

in
its

on

of

$5.01

per

present stock capital

represents

dividend

Grande

Rio

&

Denver

ducers, the miners' union, the ex¬

1953

the

50%

stock

3-for-l

and the

will find

its vital role in

prosperity and

peace.

William Langmore
William Langmore, formerly in
investment

business,

r

T

passed

oi

at his home June 21st at the

of 49 following

a

long illness.

With Suburban Sees.
(Special to The Financial Chronicle)

Kerekes

countries.—

Securities Co.,

CLEVELAND, Ohio—Joseph M.
is

now

with

Suburban

732 East 200th St.

total

of last year, or a
"split" of 4V2-for-l. Net in¬

come

has increased each year

1948

age

in

gress

Tota Lliw.,

Britain. Germany,
France, and other coal producing




three

that it is taking
time for the interpretation of the
decision to be digested and to be

and

delivered to tidewater piers, ready

A

,

of

order

ICC

amount,

completely.

into

remarkable the

coals

The

out

sold

away

be

Ogden

long

possible basis. Its first
is to enter immediately
the ocean shipping business,

of the

stated

the

broadest

coal

producers and the coal carrying railroads to do their coopera¬
tive job mor*> efficiently and mo^e

through

in¬

rate

versely affected by the failure of
speculative expectations to work

proposal

world

of these pfforts

miners'

the

of

the

source,
,

producing companies, the

President

to

ing for the

tion, the group included the chief
executives of the larger exporting

and

Play Its Part

is

mine

Southern Coal Producers Associa¬

and coal

case

annually but the

passenger

gauge, the efficiency of;
is well below the system.:

higher level of traffic, the sharp exclusive ofthe
increase in gross revenues fore- operation, was 66.276. This is asfcle
r™-from,the question of unprofitable >
castvfor this year, bringing; it
close to the all-time peak made in ity of much of this light-density .;
line.
1953, net may be $5.40 to $5.50 per
An interesting aspect of "Den¬
share. Selling at about 8 times
this
expected per share result, ver" stock is that, although the '
"Denver"
stock
is
thus
quite road is showing vigorous growth, •
soundly priced. It would thus be its stock capital is being contract- •'
surprising if it were to be ad¬ ed. During 1955 their road pur¬

ago

looking decisions tak¬
can
provide immediate

for

dispelled

least,

Gateway.
:

<

now

has, for the

Gateway

terchange

Forward
en

favorably

j

which

look like they should cov¬

Due

them-

by

and

this

er

cer-

are

ed number of commodities on in¬

low-

the

creases

been

should be constructed at the other

relief

recent

S.

the

which
hanging fire for more
than seven years. This decision of
the High Court upheld the ICC
order of 1953 which granted the
"Denver" joint freight rates with
the Union Pacific on a very limit¬
Ogden

has

modern and efficient

as

U.

on

million

freight

possible windfall from

a

the

ing heavy capital expeditures to fourth factor, the unloading of the
enlarge operations,. increase ca¬ coal at the foreign port and its
pacity, and reduce costs.1 It is es¬ delivery to consumers. Large bulk
timated

Rio

Supreme Court
11

at

being

dreams of

S.

June

of

decision

get the coal
a
cost low

can

favorable

most

greatest problems.
larger, better and more

which

realities

$2^

&

Denver
situation

Western

tainly

of the

modern

the

appraise
of

at

possible to settle down

now

together that last year
transported 38 million tons of coal
But the

"

was

leaves the road with 314 miles at*

Denver & Rio Grande Western

put

great achievement,

of

-<

narrow

of export coal, a
transportation
has
A fleet of ships has

a

more

application for

ing the year. However, this still

such' for

as

10 mileg,

The

acted upon by the ICC last year,
and"this lint? was dismantled dur-

been

has

line.

this, filed in 1953,

Railroad Securities

abroad, truly

(4) Unloading and
of the coal

branch

ocean

that there

handling

miracle

shores.

together with

^

shipping.
Much credit is due to the shipping
companies for their part in pre¬
serving the export market. When
we

3*

(3105)

due

of

split

May

to

bined with

revenue

since
com¬

steadily improving ef¬

The

ficiency.

gains

latter

factor

was
most in evidence in the earnings

gain in 1954 and 1955 even when
lapsed from the upward
trend

seeing

of

prior years. This year is

a

revenues,

continued
in

resumption

of

gain
well

in

however, as
as
tight control of expenses

spite of the increase in wages

and

other costs. The road has es-

timated the wage increase

of 1955

heavier power, is contemplated in
the road's $6.7

penditures

million capital ex¬

million for 12
additional diesels. Another impor¬
tant factor in the road's operating
$2

efficiency is that 522 miles of its
line

or

about

just

an

of total road mileage

Control.

A

further

25%

even

is now oper¬

Centralized

under

ated

step

Traffic
auto¬

in

installation of automatic elec¬

tronic

control of

car

the otherwise very

retarders in

A

source

more

of

narrow

gauge

Now

Tankersley, Elliott

ALBUQUERQUE, N.
firm
name
of Whitney

M.—The
Com¬

&

Incorporated, Simms Build¬
ing, has been changed to Tankersley, Elliott & Morris, Inc.

pany,

Firm Name Watson & Co.
SANTE
name

of

FE,

N.

Watson,

M.—The
Geer

&

firm
Swet—

nam,
La Fonda Hotel, has been,
yard. changed to Watson and Company.

saving which

fully felt this year is

abandonment

Securities

modern Grand

Junction, Colo, classification
be

Reliance

for this year in

mation is planned
the

to

Corporation.

for this year,

budget

includes

which

changed

of the

will

the

137.5 mile

line between Pon-

cha Junction and Gunnison,

Milton E. Larke
Milton E.

Larke, member of the

American Stock Exchange,

Colo., away on June 19.

passed

The Commercial and Financial Chronicle...

38

Thursday, June 28, 1956

(3106)

Continued from page

to

5

will

15-20% annual increase from here

Electionic's Investment Outlook
brand names are
public. This one
fact in itself seems to account for
of how important
the American

to

on

in

CEC in¬
hold the 162,500 shares of
be anticipated.

can

tends to

Burroughs stock it will receive in
that state¬ exchange for its present invest¬

greater the potential

and also the

Though

appreciation.

considerably over-simpli¬

ment is

growth shown to
not
continue, but a
of

rate

date

the

Naturally

million.

$17.1

same

ment in

most

important ICBM, and Van¬

over-all program

the
earth
satellite, the
company is engaged in numerous
highly classified activities. Martin
guard,

established

concerned

with-various

of

electronic

test

these /'birds."
in

physical sciences.

Electro-Data Corp., worth

Automation

pro¬

is

types

devoted entirely to research
the frontiers of knowledge in

the

of the missile

gram

year

at

during the fiscal
starting July 1. A little known

but vital part

subsidiary last

new

a

year

the

One of the

test

Hallamore

for

gear

equipment

leaders

field

Electronics, Inc.,

is
di¬

a

vision of The Siegler Corporation.

Issues

Though a 35-year-old company,
share of the fied, it can also be said that to approximately $6.5 million today,
With automation the most Siegler stock was
date the investing public has not and carried on its books at only
privately owned
business going to fewer and fewer
popular word of the year, inves¬ until last July. At one time, Sieg¬
companies. Only those companies participated to any great extent $1,065,000.
tors have been looking diligently
ler confined all of its activities to
in the growth potential inherent
Bell & Gossett Co. was founded
which
can
expend tremendous
the increasingly large

in some of the soundly-run
sums of money in advertising and
smaller companies. Time permits
promotion have even a chance of
the
mention
of
only
11
more
maintaining their position. In or¬
der to achieve $1.5 billion of sales stocks, six of which are listed and
the other five unlisted. It might
during the ten-year period from
be well to emphasize that these
1946 through 1955, one company
issues should be considered only
spent
roughly $100 million in
on a long-term basis.
advertising.
This manufacturer
started almost from scratch as the

46

tral

expendi¬

advertising

total

tures rose almost 200%.

six

Bright Outlook and Possible

as

Something new has been
added, and that is the communica¬
pumps.

tions

Pitfalls

if

Even

be¬

"the year of the

as

vanishing profit margin," the fu¬
ture
for the
leading setmakers
does look bright despite increas¬
ing pressure on manufacturers to
lower
prices
and
make
less

this

At

money.

television

over

homes have only one

of all

90%

well

time

Due in

set.

introduction

the

of

part to the

personal
portables, we would not be sur¬
prised to see the day when many
families

will

new

their

have

set in the

large

with
portables in the kitchen, bedroom
screen

living

room

the

For

Bell & Gossett has
been developing and testing their
last five years

communication

Dualex

own

only

Introduced

tems.

sys¬

recently,

the

the

industry's

He

pan.

that the

lion

One

room.

best

has

of

forecasters,

gone

record

on

industry will sell 100 mil¬

television

in

sets

decade. Obviously
dying business.

the

this

is

next

not

a

activities

could

of

comprise

Bell

over

&

half

lowest

cost

bejpossibly scription at this time. We feel that

in the it affords an excellent vehicle for
industry. With its aggressive mer¬ participation in the broad field of
chandising ability we are of the electronics. Bendix is engaged in
opinion that in the continuation about as many different phases of
of what is already a brutally com¬ electronics as
any company in the
television

petitive

miral will
The

market,

manufactures

outside

this

of

should be

ment's

approximation of the per¬
of electronics to overall
activity is 40%, it is gradually in¬
creasing. 1955 sales break down
into three basic categories shows
aviation 63%, automotive 20% and

more

centage

There

growing foreign

a

country and though the manage¬

own.

country

domestic maker.

any

Ad¬

than hold its

more

company

telesets
than

producer

mar¬

ket for portables. The low average

income

and

high

prices

of

con¬

ventional TV receivers have

com¬

bined to hold back the growth

From the standpoint of investment

at

this

time

would

we

American

are

select

$1

Broadcasting-Para¬

analogy of television manufactur¬
ing with the automobile makers
throughout the years is too plain
to
ignore. With sizable growth

Recently

This

improvement

continue for

claimed

ready

the

ABC

that

his

number

margins

in

two

is

time

tried

to

avoid

the

companies which

are

in

the

firm
of

direction.

same

believers

research

well-known

growth.

immediately

sales

of

shied

son

most

major

to

in

the

are

from

away

of the

activity

briefly

importance

the

sorea¬

consisted

of

group

spent

10.7%

of

on

the aircraft companies.
in

the

aircraft

at this time is the Glenn L.

Martin

Co.

Very

strong

on

companies have made remarkable
progress in

electronic engineers on the
theory
that it is "the thing to do" in

rary

Beckman has increased sales from

is

slightly

record

and

these.
not

the

At the

included

order to

assumption that
familiar with

already

keep

same

the

up

time,

stocks

we

have

of

com¬

also

fiscal

year

development.

on

research

Consolidated

devotes

same

approximately
percentage of sales to

search

and

a

over

development.

the
re¬

Both

relatively short time.
$3 million in 1949 to

with the times.

seven times that
figure in the last
speaking, the smaller fiscal year. In the last six
years
the company, the greater the
risk, CEC has jumped from $2.8 million

Generally




red

r

decline,

well

on

we

the

feel that Martin
way

to

eventual

highs in sales and earn¬
ings. In addition to the publicly

announced

on

currently
use

automatic

in

Once

electronic

The

head.

sales

elec¬

of

record

levels,

and

Before

conclude

are

leave

I

these

re¬

^t should be mentioned that

for each

dollar spent at this time
missiles, there is virtually an
additional dollar .spent for test
on

and

ground support equipment.
Siegler sales for its last fiscal year
were
$10.5 million.
For the"* 12

for

months

its

rears

The financial condition is

marks

control.

process

again, automation

age

opinion they are mak¬
important
contributions
to

Siegler

is

company

run

different aspects

at

instruments of the

equipment

company

sound, and sales and earnings

analytical

making

a

(the average

tronics.

of the infra¬

laboratory, type,-the

is

men

several

believes that it supplies

laboratory

I
excellent

an

of the

ing

maker,
instru¬

on

it

as

young

are

analysis. The

approximately 90%

curve

ending June 30 next

would

we

had

not

be

surprised

year,

if

major projects at Mar¬

tin, including Titan, possibly the

a

temporarily-leveled off until
recently, but newrinstruments and

virtual tripling of .sales took place.

increased

at this time pose

demand-

Though

Perkin-

for

and

resulted in

in

sizable backlog.

a

any

many

.

The two chief competitors are the

vestments

aforementioned-dgeickman Instru¬

have

ments

Consolidated

and

three

All

dynamics.

Electro¬

have

indicated.
glamorous phase of
is probably
the missile program.
Close to $2
The

billion

business

for

be *exhended

will

Continued

from

page

in

way

in

a
growth industry
of outperforming; the

bull market.

True

growth securities generally

move

forward

most

aircraft

a

averages

well

defined growth trends

the

investments made

considerable risk
professional investors'
minds, the record shows that in¬

Elmer products opened new areas

market
Thucj

t

vigorously
cycle

tor's

has

heb^e

securities

the

a

after

run

a

its

bear

course.

certain electronics

belong in

inves¬

every

portfolio.

4

The State of Trade and
1-June 23 at 576,905 units is

Industry

trailing 1955's production of 621,482

units by 7%.
Thus far in

54.3%

1956, said "Ward's," General Motors has garnered
S. car output, Ford 27.1% and Chrysler Corp.
Studebaker-Packard and American Motors are running
total U.

of

14.8%.

neck and

neck, each with 1.9% of the total, and less than 70 units
-t-

'

■'

Canada, vehicle manufacture, set back two weeks ago by a

5-day scheduled halt at Studebaker and heat losses at Chrysler
Corp., returned to strong levels last week. The nation's car man¬
ufacture since Jan. 1 this year is now behind like 1955 by only
6%

and truck

erecting is ahead 14% for

an

over-all lag of only

2.4%.

Steel

Industry Set to Close Down Plants at Mid-Week
Prior to the June

A

Strike Deadline

30

continuing boom in metalworking, the country's largest in¬

dustry, through the last half of the year was forecast on Monday
by "Steel" magazine after an industry-wide survey

of this week

directed

to

5,000 plants.

According to the survey, metalworking dollar sales in the next
six months will be nearly 5% higher
which established a new record.
Three

half

of

four

will

sales

be

metalworking
as

large

or

than those in the first half,

plant managers expect

larger than

those in

second

the first six

months, while only 25% see any dip in sales volume, the survey
continues.

Executives

participating

in

"Steel's"

believe

survey

there

dip in production during July and August, due to vaca¬
tions, warm weather and other seasonal factors, but they expect

may be a

the final four months to be strong.
The magazine said

indicated sales volume for the metalwork¬

ing industry in 1956 will be $138,000,000,000, up 7.3% from 1955
sales. That is more than the total gross national product for any
year

to 1942.

up

executives

Metalworking

re¬

panies which recently may have set
up a small laboratory with a few

dustry,

on

chemical

for

is

sup¬

search, with an extremely broad
participation in the guided mis¬
sile, jet and nuclear propelled
aircraft fields, Martin is probably
the most improved operation of
all aircraft companies. Though its
earnings have been in a tempo¬

current

are

special emphasis

In

companies whose

favorite

Our

continued

insure

Beckman

Both

during the first half of the

identified with the electronics in¬
you

with

Babies"

called "war babies." For this

al-\

sales

"War

radio time. Furthermore, he
plying was materiel were valued
already achieved by several com¬ claimed that in two years he ex¬ in the market
place at relatively
panies
which
are
largely
de¬ pects the ABC television business low multiples. Recently this con¬
pendent on consumer acceptance to be fully as large as either NBC dition has
changed somewhat, as
of their products, the amount of or CBS. The same source antici¬
more
and more people come to
investment
gain appears to be pates certain government legisla¬ the conclusion that a
strong de¬
limited in comparison to the op¬ tion by the end of this year which
fense program is vital. The air¬
allow
portunities available in the wide would
fully
competitive craft makers as a
group naturally
variety of smaller companies which three-station television
markets
fall
into
this
category. To call
do not sell to the public.
Broadly in the principal cities. If this is them "airframe makers" is
highly
speaking
the
various
types
of an accurate forecast, it should be inaccurate as these
companies for
electronic companies in this latter highly constructive for ABC. In
the
most
part
now
engage
in
category break down into the fol¬ time, color TV will be of tremen¬ numerous
phases of the defense
lowing groups: end equipment and dous importance to all of the net¬
program,
including nuclear en¬
systems manufacturers; compo¬ works.
ergy, power plants and electron¬
nent
parts
makers;
instrument
The next two companies, Beck- ics.
A large portion
of all the
makers and electronic specialties.
man Instruments and Consolidated
electronic engineers in the coun¬
We have already touched on the
Electrodynamics, are grouped to¬ try work in or for the aircraft in¬
"entertainment" type of manu¬
gether as basically both of these dustry. It |therefore seems fitting
facturers, so will conclude with scientific companies are
working that we should at least touch

selecting a few equities to
discuss, we have for the most part,

instrument

leading

a

is

tail

dog.

the top executives is 43) with
good business experience, and we

The Perkins-Elmer Corporation

is

the

of

of

the instrument field.

ment of

apart.

Certain investors for quite some

come.

President

network

being achieved.

are

Suggested

should

long time to

a

currently running well over
million per month and are

stepping up rapidly. Interestingly
enough, highly satisfactory profit

mount

tors.

In

a

concentrated

the

of some setmakers points up
possible pitfalls for investors. The

the others.

giants in

by

is

investing in the missile

program

the

electronic

rest

Siegler
of

means

how

indus¬
specialized seg¬

fully compete against
trial

of

success¬

can

and automation it will

fall

on

example

good

a

but

a

the

the

believe

of Sieg-

earnings,

rapid rate that
to be only a matter of

before

wagging

1956. Panel-

capable management

and

appears

time

instru¬
ments
made
in
this
country.
Though previously Perkin-Elmer

may

pattern just
outlined in regard to the rise and

comments

is

lit

it

than

attain
pre¬ of the total sales volume.
eminence
in
personal TV port¬
Bendix Aviation is probably too
ables. Through printed circuitry well known to
require any de¬
Admiral

the

the

year.

sales

growing at such

well over $6
New sales rec¬

ords should be set in

company

time during the past
believe that the
process of chang¬

Theatres.
Earnings from
broadcasting division are in¬
creasing faster than those being
shown by its two larger competi¬

Nevertheless,

last

Gn"cett

it has

as

ler's

1949 to

in

$600,000
million

less

heating equip¬

comprises less than 50%

Sales

systems.
from

increased

electronics

low

and

panels

have

the

as

industrial 17%_, Current backlog
(predominantly military) is about
of one-half billion dollars.
abroad.
Ross Siragusa, of Admiral, pre¬ television
Perhaps
the
Litton Industries is the excep¬
dicts that the industry will sell portable will play an important
tion to the rule
we
mentioned
10 million sets in 1957. He is cer¬ part in overcoming that serious
earlier: generally speaking,
en¬
tainly not basing all of this op¬ obstacle.
gineers do not make the best
timism on color sets as in this
The
broadcasting end of the heads of companies. Here is a
total he includes only half a mil¬ electronics
industry has demon¬ combination of outstanding scien¬
lion of the rainbow variety. His strated
remarkable
growth, and tists
and
businessmen.
Though
projection calls for large screen even with the current study of
only 2% years old, Litton has al¬
sets to account for five million network
operations being made in
ready made giant strides and has
units and personal portables for
Washington, we feel that there is established itself as a major pro¬
4V2 million. Nor does Mr. Siragusa still considerable growth in the
ducer of electronic systems,
feel that 1957 will be a flash in
proper
broadcasting equities. computers and components. Sales

children's

and/or

trol

selective

Dualex

the

the manufacture of

ment. The electronics division still

and manufacturer of complex con¬

We

is in

ing.

eventually

1956

known

comes

electronics.

of

end

com¬

panies." One that we have been
following for
several years is
Panellit, Inc., a leading developer

ments

any

years.

trend

equipment as well
electrically driven circulating

"automation

in

stocks

for

calling sys¬
tems have been exceedingly well
received
by both military and
commercial
users.
In
time, the

the stock is about
at

manufacturer of hot

one

water heating

Proceeding alphabetically, we
begin with Admiral Corp. Ad-

been

cen¬

heating and air condi¬

home

number

ply stated, only the blue chip com¬
panies can afford the advertising miral's performance, both marketdollars which must be spent. An wise and earnings-wise has been
interesting statistic is that during discouraging. Starting from 1950,
have declined steadily
the last ten years while the total earnings
national output increased less than each year. The current price of
100%,

of

Using the trade name
Hydro-Flo, the company is the

unknown

relatively

was

prior to the postwar period. Sim¬

the field

in

tioning.

Issues to Consider for Long-Term

name

recently

until

and

ago

years

concentrated

gain 2.8% in the second half.

also

expect

that

employment

will

A shortage of skilled workers will

restrict production in 22% of the plants covered and
will advance 3.5%;

will

go

up

2%.

selling prices
manufacturing costs will jump 5% and profits

Manufacturing capacity will

be

increased 3%.

Twenty-seven per cent of the companies questioned, it stated, are

planning to start expansion of manufacturing capacity during the

ne^t six months.
Material shortages
duction.
copper,

are expected to continue to resrict pro¬
shortages expected are in steel products,
nickel and aluminum. All predictions are based on general

Most

serious

labor peace and a long steel strike could dispel the
trade weekly pointed out.
The

metalworking

authority

said

that

even

optimism, this

though

steel-

Volume 133

Number 5546...The Commercial and Financial Chronicle

(3107)
makers hope for
June 30

peaceful settlement of the wage issue before the
an orderly shutdown of their

a

Moving higher in wholesale price the past week were
wheat,
hams, bellies, sugar, coffee and cocoa. On the down side were corn
rye, oats, barley, beef, lard, cottonseed
oil, eggs, steers, hogs and

deadline, they will begin
facilities by midweek.
Should
on

a

peaceful

settlement

midnight Saturday,

several

be

reached

near

days will be

the

required

to

restore

The

-

normal

steelmaking operations. Should a shutdown be effected
by Saturday, some plants may continue
through the July 4 holiday
before resuming production. Vacation
schedules at many metalworking plants are being arranged to fall within the
period in

which

of

31

Wholesale

The

industry's ingot production rate for the weeks in
on

For the

annual

capacity of 128,363,090 tons

like week

month

a

duction 2,370,000 tons.

A

year

the rate

ago
ago

the

of Jan.

as

was

1956

Weather

previous week.

output

and

that

production

Prices
of

Car

Loadings Register

increased

14,356

sociation

of

revenue
cars

or

American

trended

June

16,

the

on

the like week

lower

producer

for

Chicago Board of Trade

Building

Automotive output for the latest week ended June
22, 1958,
to "Ward's Automotive Reports," advanced
5.3% in
building, topping the 3,000,000-unit mark for the year. Truck
output also rose in the week to 6.2% above that of the

Last

week's

by

5,335

1,286 vehicles.
and 29,271

amounted

week and

car

output advanced above that of the previous
while truck output rose the past week by
In the corresponding week last
year 151,249 cars
cars,

tracks were assembled.

previous

29,271

from

sumption

Seasonal Decline

a

months, that is, June through
August, is expected to decline seasonally to 3,600,000 barrels
daily,
or
4% above the similar period a year
ago.
Gasoline demand
which is included in the above
figure is expected to average about
the

same

months

of

1955, according to

a

survey

by the Independent Petroleum Association of America.

Total

inventories of all oils at the

close

of May were about
3,500,000 barrels under last year's level with the gasoline excess

the

over

stocks

1955

continue

California down

total

increased

under

their

than

more

Announced

production
approximate 7,100,000

will

market

about

for

domestic

crude

6,840,000 barrels

per

by

1955

16,000,000

level

with

barrels.

residual

Fuel

fuel

10,000,000 barrels.
allowables

barrels

indicate

daily.

The

oil
*

June

July

oil

in
.

production
and

ended

oil, therefore, is expected to average
day, the survey points out.

and

June

21

industrial
from

286

failures
in

the

declined

preceding

Bradstreet, Inc., reports.

to

245

week,

in

Dun

the

&

However, they were considerably higher
occurring a year ago or the 215 in the similar week
Despite this marked rise from the past two
years, the

than the 205
-

of

1954.

toll

was

All

21% below the prewar level of 310 in 1939.

of

$5,000

as market receipts continued well
sharply be¬
easier trend most of the week but

an

of

cotton

for

the

new

crop

and

during

May

showed

Daily average con¬
slight decline from

a

or

more,

slightly
by

the past week. Liabilities in excess of
$100,000 were incurred
26 of the failing concerns as
compared with 25 a week ago.

Wholesale Food Price Index Continued to Ease
the

Past Week

Continuing the downtrend
wholesale

of last week, the Dun & Bradstreet
fell to $6.09 on June 19,

food price index
comparing
$6.14 the previous week and $6.18 two weeks
ago, the high
point for this year. The current figure reflects a
drop of 6.2%
with

from the corresponding
year-ago level of $6.49.




Father's

Day

a

Year Ago

sales

promotions

and

hot

weather

buying of men's summer apparel,
goods and air conditioners the past week.

sporting

stimulated

consumer

Increased

automotive

ventories

of

continued

below

new

sales

passenger

that

of

a

moderately

however,

cars;

year

reduced

dealer

automobile

in¬

volume

ago.

Total retail trade expanded

moderately this week, and notice¬
ably exceeded that of the similar week last year.
The

total

dollar

volume

of|retail trade in the period ended
Wednesday of the pa|| wf&t was 6 to 10% higher than a year
ago, according to estimatef b,y Dun & Bradstreet, Inc.
Regional
estimates varied from the comparable 1955 levels
by the following
percentages: New England and South +5 to -|-9; East and Middle
West
+7 to +11; Northwest +6 to +10; Southwest
+4 to
+ 8 and Pacific Coast +2 to +6%.

-on

,

While wholesale orders for

Fall

apparel and household fur¬

nishings expanded last week, bookings in some textiles and food
products were moderately reduced. Although total wholesale vol¬
remained

exceeded

at

June

the

level

of

the

that of the similar week

Department
from

the

stores

Federal

sales

on

Reserve

previous
a

year

week,

Board's

index

of

basis

the

taken

as

week

ended

1956, increased 12% above those of the like period last
year.
In the preceding week, June 9, 1956, an increase of 9%
was reported.
For the four weeks ended June 16, 1956 an increase
of 8% was reported. For the period Jan. 1, 1956 to June
16, 1956,
Retail
5

to

was

trade

Power

According
of

home

debentures

3%%

in

New

York

City

the

past

week

K, due
1986, priced at 98 V2 and accrued
interest yield 3.835% to maturity.
$10,000,000 Pacific

Great

East¬

ern

Railway Company 3%% sink¬
ing fund debentures series B, due
1981,

priced

at

98 %

to

yield

3.86%.

$10,000,000 British Columbia
Highways and Bridges Au¬
thority 3%% sinking fund deben¬

Toll

tures

series

B, due 1976,
yield 3.84%.

at 983/4 to

priced

is

unconditionally guaranteed
principal and interest by the

sues

to

as

Province

of

British

Columbia.

Principal and interest
in

New

York

in

payable

are

United

States

dollars.

The
last
public sale in the
United States of obligations of the
Province of British Columbia was
in

1952.

Sinking fund provisions for the
debentures
each of

by

calculated to retire

are

the

issues

maturity.

each issue

in

The

its entirety

debentures

of;

non-callable before

are

June

io,

1961.

June

15,

1961

They
and

callable

are

thereafter

at

prices ranging from 102% to 100%
after June

15, 1981 for the Power

Commission bonds; 102% to 100%
after June 15, 1977 for the rail¬

bonds;

after

June

and 102% to 100%
1973 for the Toll

15,

Highways and Bridges Authority
bonds.

from

Proceeds
Power

the

sale

Commission

of

the

debentures

will be used to repay
outstanding
bank loans and for capital expen¬

ditures.

The Commission supplies

electric

power

to

most

of

Province

except for
the
densely settled areas such
cities

of

Vancouver

and

the

more
as

the

Victoria.

The

Pacific

way

will apply the proceeds from

Great

Eastern

Rail¬

its debentures issue to the repay¬
ment of outstanding bank loans
which
tion

were

incurred for construc¬

The

purposes.

Railway

is

presently engaged in construction
of

northern

and

southern

exten¬

sions aggregating 365 miles to its

existing line so that, upon com¬
pletion, the road will extend about
miles

729
to

from

Dawson

John.

Vancouver

Creek

This

and

north

Fort

St.

with

compares

the

rail route of about 1,255
miles from Vancouver via Edmon¬

present

ton to Dawson

of

526

Creek,

or

a

saving

miles.

T^e Toll Highways and Bridges
Authority will use the proceeds of

the sale of its debentures to repays

outstanding bank loans and for
capital expenditures in connection
toll

construction

bridges.

present

owns

bridge,

one

Narrows
across

couver

and

additional

Authority

at

onlythe
First
Gate)
Bridge
operates

namely,

(Lion's

Burrard
to

of

The

Inlet

North

from

Van¬

Vancouver.

Eastman, Dillon Branch

rose

LAS

to trade observers, special promotions, increased
furnishings and vacation goods, mainly accounted

VEGAS,

Nev. —Eastman,

Dillon & Co. has opened a branch
office

at

107

South

Third

under the management

According to the Federal Reserve Board's index, department
store
sales in New York
City for the ( weekly period ended
June 16, 1956, registered an increase of 13% above those of the
like period last year.
In the preceding week, June 9, 1956, an
was

recorded.

1956,

a

16, 1956. the index recorded

was

recorded.

corresponding period in 1955.

H.

For the period Jan.
a

rise of 3%

Joins Wulff, Hansen
(Special to The Financial Chronicle)

,

SAN

1,

1956 to

above that of the

Street

of Dwight

Gravnett.

For the four weeks ending June 16,

June

gain of 8%

sinking?

series

registered above that of 1955.

volume

for the rise.

increase of 11%

Commission

fund

7% above the like week of 1955.

sales

are:

$20,000,000 British Columbia

with

country-wide

a

it somewhat

ago.

16,

gain of 4%

Bros. & Denton, Inc.
The under¬
writing group comprises 79 firms.

way

selling prompted by scattered mill

Like Period

a

of the week's decrease

occurred in failures
involving lia¬
which fell to 197 from the 243 of last
week; however, they remained above the 166 of this size a
year
ago.
Small failures with liabilities under $5,000, rose

bilities

largely reflecting weakness in vegetable

By Father's Day Purchases Rose
Moderately Last Week and Was Noticeably Above

ume

week

statistical

declined

vestment firms headed jointly by
Morgan Stanley & Co., Harris &
Partners Limited, Inc. and Burns

Each of the three debenture is¬

Trade Volume Aided

August

Business Failures Reverse
Upward Trend the Past Week
Commercial

pre¬

April.

Total demand for the next three

prepared

daily

a

Results of the sale of cotton on June 12
by the CCC under
the surplus disposal program were announced on
June 18. A total
of 1,567,278 bales were sold at a minimum
price of 25 cents a
pound, basis Middling 15/16-inch cotton.
This was 2Vz
cents
under the previous minimum at recent sales.

was

During June-August Period Expected to
Show

than

The

weakness reflected

Extensive

more

to

^ose

pressure on new crop

curtailments, mostly favorable conditions
reductions in the price of foreign cotton.

the

Oil Demand

5%

ago

developed considerable., strength aided by
trade buying coupled with
improved de¬

and

Hog prices also

Early

placed at 10,550 cars and 2,676
previous week Dominion plains built 9,o82 cars
and 2,613 trucks, and for the
comparable 1955 week, 9,086 cars
and 2,284 trucks.
In

week

a year ago.

Canadian output last week

■trucks.

as

Cotton prices displayed
turned higher at the close.

to

Last week the agency reported there were
21,973 trucks made
the United States. This
compared with 20,687 in the

in

two

above year-ago levels and sales of fresh
pork fell off
cause of hot weather.

put states "Ward's."

week

Europe.

oils.

128,112
increase of 6,621 units above the preceding week's out¬

an

house

Lard prices worked lower

industry assembled an estimated 106,139 cars,
compared with 100,804 (revised) in the previous week. The
past
units,

crop

position, however, remained
Warehouse^stocks of cocoa moved higher and totalled
376,134 bags, against 369,943 a week earlier and 238,744 a year
ago.

the

trucks

occur

market

cocoa

mand

preceding

period.

and

new

bearish.

according

cars

of

Coffee prices spurted upward last
week, reflecting active
roaster demand for green coffee
beans, a tight supply position of
high quality coffee and the announcement that the Brazil
Coffee
Institute had advanced its minimum
prices at which exports of
coffee are permitted.

car

of

Harvesting

of

The

6.2% in Latest Week

total

influenced by reports

marketings of corn were small, prices
a lack of buying incentives. and
ample
Purchases of grain and soybean futures

crop.

commission

production

close

week-end.

reflecting

the

bia, Canada, aggregating $40,000,000 were offered for public sale
yesterday (June 27) by a nation¬
wide underwriting group of in¬

leading grains

wheat supplies
become more pronounced. Interest in other
flours was slight witn
no indications of
any broadening in demand.

corresponding week in 1954.

week's

towards the
the

over

further declines will

1956, totaled 801,431

Bonds of three instrumentalities
of the Province of British Colum¬

The issues

in

movements

despite

cars, an increase of 21,474 cars or 2.8% above the
corresponding
1955 week, and an increase of
94,194 cars, or 13.3% above the

Last week

the

Domestic business in hard wheat
bakery flours remained slow
some downward adjustment in
prices late in the week.
Buyers were content to draw upon balances in the belief that

vS

U. S. Car Output Climbed 5.3% and Truck

ago

60,300,000 bushels, from 51,300,000 in the week
ceding, and 34,000,000 last year.

Railroads reports.
ended

turned

rainfull

easier

average

freight for the week ended June 16, 1956,
1.8% above the preceding
week, the As¬

Leadings for the week

heavy

moisture

Latest Week

Loadings of

year

was the
possibility that export trade might be
private commercial interests.

Although

Further Rise of 1.8% in

a

a

wheat is nearing completion in
Oklahoma and Texas and is moving
into Kansas.

53,000;000 kwh. above that of the
1,252,000,000 kwh. or 12.2% above the
over

dominated

this time

Early strength in wheat reflected a lack of rain
high temperatures which tended to resirict
selling operations
ordinarily are heavy at this time. Another sustaining factor

diverted to

the Edison Electric Institute.

comparable 1955 week and 2,497,0C0,000 kwh.
in 1954.

conditions

At

in the bread cereal

rose

It increased

further

a

the past week.

pro¬

The amount of electric
energy distributed by the electric light
and power
industry for the week ended Saturday, June 23,
1956,
was estimated at
11,478,000,000 kwh., the third successive week of
week's

was

pared with 288.17 a week previous.
index stood at 273.35.

Electric Output Gains for Third Successive Week

The

pound

per

slight dip in the general level of prices
last week. The
daily wholesale commodity price index, compiled
by Dun & Bradstreet, Inc., closed at 287.49 on
June 19, as com¬

was placed at
1,716,000 tons or 71.1%. The operating rate is not
comparable because capacity is higher than
capacity in 1955. The
percentage figures for 1955 are based on annual
capacity of 125828,310 tons as of Jan. 1, 1955.

improvement, according to

price

[Influenced By Heavy Rainfall
There

1, 1956.

96.3% and

actual weekly

of* the

Commodity Prices Dipped Mildly Last Week

The

American Iron and Steel Institute
announced that the
operating rate of steel companies having
96.1% of the steelmaking
capacity for the entire industry will be at the
average of 94.0%
of capacity for the week
beginning June 25, 1956, equivalent to
2,314,000 tons of ingot and steel for castings as
compared with
93.0% of capacity and 2,290,000 tons (revised) a week ago.
is based

Debentures Offered

index represents the sum total
foodstuffs and meats in

raw

general use and its chief
function is to show the
general trend of food prices at the whole¬
sale level.

strike may be in
progress, "Steel" concluded.

a

British Columbia

lambs.

deadline

39*

James
staff
Russ

FRANCISCO,
D.

Hansen

of
Wulff,
Building.

has

Calif. —
joined the

Hansen

&

Co.,;

The Commercial and Financial Chronicle..

.

(3108)

40

babit have become of increasing has been on the books for a

Continued J
irom F y
vaae 14

IMYrAetfM Attf
inVeMineill

V/llfftir

•

-

...

lAf nil A

ino

m

lYACCVAIIIlC

VIWiImI v€1U»>

IHw

111

II11V

TV

longer of funds. There are, of course,

period. In this way, the true saver mechanical problems in handling

that the stable character- is rewarded more closely in acistics of the savings flow will con- cordance with his contribution to
tinue and perhaps even be accent- the enterprise, and there is an
uated. The combination of more absolute minimum of competition
ups and downs in the demand for for "hot" money between indifunds, as contrasted with at least vidual institutions.
By varying

IIllUlIvClllvIO

gm

logically

should

we

suppose

■

llAflC

'iVtlUllfA

UlIwV

m

ia

V

1B

_

H

—

importance,

the

degree of stability in the

same

Thursday, June 28, 1953

differential in

the

rate

between

split rate; but I can assure you
from actual experience that they

a

soluble with modern account-

are

ing equipment. In any event, the
trouble is a small „ price indeed

to pay for about the only realistic
and

far

sighted

have

T

answer

the new and the old depositor, it
,
pmprppnpp
is possible to reflect much more
.
.
accurately changing patterns of competition in some of
earnings and changes in the flow attractive aspects.

operative again be/ore another year has-passed if the
business
improvement materializes.
Essentially, any firm judgmerit on this possibility must be
fe vie wed
frequently because in
this area we are trying to guess
what will be the attitude of busiiiess
men
and consumers six to
nine months from now when they
will be looking not at the pres•ent situation but at a new set of

(2) In the area of the corporate
demand for funds, we are all conscious of the tremendous amount
of internal financing done through
depreciation and retained earnings, with the result that corporations have to seek external sources
of funds only during peak periods
when heavy capital outlays happen to coincide with a build-up
of inventories and receivables.

supply, represents a strong additional
reason
for
anticipating
fairly wide fluctuations in interest rates.
,

operating in a changed en-

When^ such demands expand by

10 fa beyond internal sources of
funds, they may readily cause a

wjdely over comparatively short residence. The original cost of a for diesels, freight cars, other
perj0(js 0f time. The change from dwelling that has been sold is car- equipment, yards and signals, and
extreme ease in the Summer of
ried forward as the cost of the road property.
r;; ? .

could be

sures

factors

vironment.
Oiifinnk

f„„<r«rTnrm

T.

.

about the background lor investment policy over
vhe longer term, we again face a
ch°foe between the points of view:
of

the

the dynamic

and

thinkers

orthodox

more

American econ-

marginal effect has, of course,
been a primary influence on the
bond market this year. An especially drastic decline in the corporate demand for external funds
would, of course, occur in a business

level of interest

throughout

rates, alter all, is

is

it

a

fluctuates

of

with

deal
rates

the Spring of
might prove to be fairly
typical of the rapidity and range
this year

0£

^ot just |n ^is country but

(3)

the

the advo-

world,

jpterest

fluctuations dur-

rate

This, of
that, as I am
strongiy convinced, the growth
ancj progress of this country will
follow
an
irregular, fluctuating

-j

ahead.

years

assumes

course>

rather than

path

line

straight

a

vaae

its least '

-r

,

6

u

Railioad Financing:

tight situation replacement

very
emerged in

which

,

-

investment
pattern of

which

development
to

firm

my

should be prepared in

we

-nterest

reversal.

enthusiasts.
The choice is
specially important because tne
omy

Continued irom

^onunuea JTum

policy

mand on the capital markets. This

.

,

,

.

thinking

belief

that in appraising the longer-term

sjderations,
outlook

ratp

.

these and related con-

on

increase in the actual de- 1954 to the

'

■

In

Based

of

dwelling.

Another

It is

1957-66

serious question whether

a

the railroads would, or indeed
could, have borrowed the additional $1,440,000,000 which I estimate to be the ultimate tax deferbooks as the investment in rail ment by accelerated amortization
regardless of how many times it in the period 1950-55.
is replaced or what is the cost of
the replacement rail.
A subseNo Less Imperative
r
quent charge is made in the inThe problem of the future is
vestment account only to account even more serious. The striking
theory has to do with the replacement of rail in track—replacement
in kind. Thus, the cost of the old
rail is carried forward on the

pot established by precise rela- Cates of a flexible credit policy projection from here through
iionships

funds.

mand of
ual

the

to

^supply and de-

custom, contract-

governmental

relationships,

policies

realm

apparently winning the de-

are
bate

the

of

The

idea

last

that

of

money

answer

and just plain

horse-

and credit

to

all

a for the added cost resulting from economies of diesels are here—
optimistic increasing the weight of the rail, not ahead. The economies of new
computations-for the year 1965.
I can see no fundamental differ- cars, new yards, line changes and
new

easy money is the
problems under all

circumstances

the

in

quarter-century,

has

era

the

to

ence

Policy
of the

some

implications for port-

folio management policy of the
conclusions which I have presented? In discussing the nearf°rm outlook'' 1 have suSgested
that a period of less tightness in
the money market is in prospect
ororate tor onlv
It is
??Ce
9 T-l
r?-nge
over the nPxt several months, but
therefore in l'TOkine at *}■ YJ« P,
Y 1S both that we should be alert to the
the Ioncer-term outlook to relch desirable and effective as a con" possibility
of a resurgence m
judgment 0™ whether we are
wv?
g
?■
business around the turn of the
bf
?
wnetir. ase con- stability .We are on notice then that year which might cause a renewal
JiKeiy to uave persistent
should think in terms of
in

monw

same

vear

•

k

neccssarv

«

w

t

rir

1

mon-

we

trasted

fiindsTn
inps

intermittent,

wum

excess

finw
^

ours s

nf°thc" reffular'

'

spec. l

sav-

sav

that the next decade will be char-

acteiized by a well-sustained an
expanding demand for funds, we
iihould
very

expect that
e
persistence of these pres-

sures

wouid

logically

resuit

an

in

appreci-

bythe'^end oTfL" period'thanll
Dip
trie

ranital

markets

ttie

had

swings of
between
tightness

durat.on
case

hppn
been

had

markpfc

capital

characterized

by

has

as

the

been

case

short
and
since

Spring of 1951. In my opinion,

why6

and

changes

sharp

interest
trends

in

to"emph'asize ffvTo"

Sons:

P

these

Advanced

for

Sharply

Through ine application
xnrougn the application

credit

the

restraint!

of
ot

principal

thrift institutions
with
perhaps
;!
1
m^n-uuoxis, wiia pernaps
the partial exception of the sav-

and

mgs

loan

which

associations

have

recourse

Home

Loan

to

the

Federal

Banks, find it

neces-

sary to operate substantially on

cash basis.

a

This is unlike the sit-

Tatin?o°! the fairl7 rAfCent past'
In

1948, for example, the pegging

°^g^Vernm^n

^on.

fo

it

ease

drastically at another,

of

in

thrift

thp

exnansion

housing

f»Vp
have

mort^acrp warp'

facilitipc

"r!rptnh''

Thirinf*

of

thp

to

this

Lpn

seen

elasticity

vpnr

thai
that

can

n

r n

paoifai

v

i h

»

h

markotc

howovpr'

-u/p

aii
all

thfx
the

aimnst
almost

nf
of

be removed if credit

policy is directed to that end. Putting
-fo
4.

n

uiat

these
psch

institutions
hacic

the

range

on

inAvitahiv

,

close
moanc

*

.

of fluctuations in

interest rates will be magnified.




this

seems to me

Depreciation vs. Replacement
Accounting

in rates. The
really short-

some

counting

that

mi

will

Common

stocks

continue

importance

to

be

of

increasing

compared with the

as

financing of the producer. If
into

takes

would

I

COUrage

enthusiastically

in

inclusion

their

account

home

cost

averaging

one

Portfolio

mort-

years

when

we

come

into

the

active

period of family formations durfng the early 1960's, consumer fi-

en-

port-

01 uuiidi
as

however,

is,

strong and as persuasive as ever.

be more practical. The answers to
these questions are basic to the

the next several years, I have

that we should be prefor wide or even violent

pared

depreciation
jsed upon a

that the national interest reauires
a prompt and searching study of

to

accounting
stable price level and

useful than
replacement accounting when
price levels change considerably,
they have in recent years.

suooose

t

p£

that the
on onn

population

railroads wished

frpiaht

the next lO

vears

rar«?

and

vear

a

that the

C0P

exceeded difference car. Ex$5,000 per for tax
thi

will

drastically

PDOg

LL

would

mean

j

^Lch

their

vary

time

to

plans

time

as

they become more or less willing
to go into debt depending upon
their amount of confidence in the

prospects for employment and in-

past

Institutionalized

of

few

and

years

us that only cash and really short
maturities of high grade securities
provide this flexibility
in
truly reliable form.

Savings

Finally on the
determination in

to

and

Gearhart & Otis, Inc., New York

per

r^lacSnf program

Arpplerafprt

"Mnian « UTO UHWlf
■

«

SeSSIOBS ClOCK SsiaFeS

in-

taxable

occictanpp

■

**

fvPArhsirf & Oil <5 Off AYS'

pvpn

Amortization

Accelerated Amortization

share)

The Sessions companv intends

to add the net

P^eeeds^o

work-

capital. It was incorporated
in Connecticut in 1882, and its
principal offices and plant are
ing

located in hac PntPr^ thP finlri nf
Forestville, Conn. The
company nas entered tbe field ot
radio timers tn nvnanHin^ itc linP
and industrial timers,
.
ariditinn
mmmnv

nf PiPPtr)P r-innto

mnuompntu

of e,lectnc clocks and movements,
accei- ■
d o9kryJ"defen^p cofora^
is the of work on defense contracts,

Now for a closer rook at
erated amortization, which
only device so far applied to the
Giving effect to the new financrailroads. Let everyone under- ing, the Sessions company will

...

..

subject of policy
setting

nreceding

demand

of

as

I

have argued,

rates

thoughts

of

on

If it is true,

(5) Thinking simply in terms investment policy.
the

The last

investments.

should have convinced

national product

stand (D that the $20 billion pr0" h?ve outstandjng 1,181,200 shares
S^am is for replacement: (2) that of common stock (par $1) and
less stable dividends to depositors I would each replacement costs from 2 to 50,000 shares of 7% cumulative
emphasize the need for flexibility 5 times as much as the railroads convertible preferred stock (par
v
rnonpuvprohilitv
consistent have been permitted to accumu- $5).

come. For this reason, the aggregate demand for investment funds

prove to be even

loans

the
rail-

thp

at least $400

+

from

and

a

City, on June 26 publicly offered
299,950 shares of common stock of
The Sessions Clock Co. at par ($1

Densin{J

an

sumers

assure

financing

T° ^ t0 bring t0 thiS C°nCept -d adequate for national defense.
s0me figures we can recognize,

a

a<?

other relief to

road plant adequate 10 years from
now — adequate
for the greater

as

i

nnna

or

atmosphere for

so
more than *200 mi,lion
oiionL i!!i
so.then .istent trend 1 any
e direction. yearty> or more than $2 billion
1
f d tendency for business This means that flexibility will be over the 10 years. Extend the thetln^C„19jP 9nnm? ?, vf31.3 .0ngex °£ gIjj importance and that we Qry to repiacements other than
and more stable On the de- maneuverability in liquidity and fretght cars and you will swell the
basis is not should emphasize the portfolio nnfpnt:_i <b9 hiilinn tn
s0
very significant.
rrand-for-funds ^idp nf thn
means of acromolishina maP°tential $2 billion to an even
the equa- as a m _a s t ac o p
g a more important aid.
tion, we must expect that con- ,ior shifts to different fooes of
^
+

tax

a

'S
}h C?P"a'
C°ndi" loads'
S K'one'dl^ction would be

"^in? t ,Lhi? br0ad
fn01tnhBe apUa VaXTs Tf

I leave you with my conviction

me that
is prem-

seems

depredation^

^ thinkinS about investment

argued

It

I0r ine ne.x.b.iU years and mai ine

Liquidity and

policy over a longer period such
as

replacement ac-

versus

that it may well be less

or

.

,.

Maneuverability

financing and all aspects of

gage

such

are

long-term investrnent medium for a savings bank
admirable

an

f" andnfol 'the consumfr eumuiatToMnTp^^^^^^
ilxl .1LUi&
uie consumer cumuidtion in a piugidin

term

in-

^ornnie<;ptmitp1Crmfn^

be less impressive but

that the exam- replacements. For example, the
of the residence and of the Chairman of U. S. Steel, Mr. Roger
indicate a principle that so Blough, has forcefullv stated thef
as funds remain in the en- urgency of a more realistic depreterp\ise> dedicated to its public ciation law for his industry's treservice, there has been no reali- mendous needs,
zation of a profit merelv because
I hope that these stirrings of my
the physical pieces of rail or resi- mind will stimulate your thinking
dence. or even freight cars, have and, through you, the thinking of
actually turned over.
a widening circle. The questions
are not long-haired. They couldnt

It
ples
rail
long

particular reason to become counting.

no

suit irom changes in the basic
supply and demand of funds.

,p,r.lcfs pr0~ might
the

owning

committed far ahead on mortgage
loans.

"dcdhia" aT thp" tvlft 6X; than in ,he
of
the
investment
available

value of

This will have the effect of exaggerating the fluctuations in interest rates which may normally re-

pansibility
funds

may

problem of financing higher cost

lar circumstances.

.

Fluctuating Interest Rates

(1)
\ij

the upward drift

0f

to tighten money at one time and js

tho

Reasons

a.

signals

1905 with rail no less imperative!
ton in 1955 and*
The railroads are not alone in

^ ?ller radically changed term securities like Treasury bills
This approach involves the rela- long-term planning which we must
t° meet different situations,, The and certificates is apparent under tive merits of depreciation ac- do.
these circumstances.
Also, there

in

anticipate rather frequent

rates rather than protracted

want

which

measures

^hffongeHerm^we COn^mer credith'
cltear
the
longer term, we
the
ahead, isparticularly

over

why

^houid

credit

authorities will be prepared really

we assume

j'

and

etary

in

ton

a

which cost $96

examnle%iav he ofofo

one

$25

gy way of summary, what are replacing freight cars under simi- searching for the solution of

inw^rates for a*ry pr,eSSUres aIe/LsiniLhaS been
imr^rtant stronS1/+uUPP°r+ted by the exffriT
A
iSriod
Meht
which f"ce f the Postw.ar yearsMore
lasts for two Hats wSrunddSb^
m3*y 3
S yG3r' bT
^ddv oroduce ^foeher lev^l in- ? Tec°nomists>
teresfratesthanif the
forces fovernm.^ntt offl^als' and
in
fnftrlnd

between replacing rail which

cost

Implications for Investment

discred-

been

prading all to the important con- 0f credit restraint when inflationmake interest rate ited. The case for the application
tributions

most

that

we

should

become accustomed to wider fluetuations in the earning power of
bound "to fluctuate because the our institutions, it is good sense,
demand for funds as represented good logic, and good judgment to
b^ longer-term capital require- introduce much greater flexibility

funds in the capital market,
conclude that interest rates

we
are

late before Federal income taxes

For

the

three

months

ended

j" depreciation reserves; and (3) March 31, 1956 sales totaled $1-

hat accelerated amortization ac- 192,863 and net loss was $122,137,

tually made ar5reat difference in while for the year ended Dec. 31,
'recent years. The freight car or- 1955, sales amounted to $6,338,380
ders that piled in at an unprece- and net loss was $372,590.
dented rate as the authorization
expired last December demon- .
F'rpJpirJf.L- T Henhirrn

strated conclusively that accelerFrederick 1. Hepburn
aded amortization was the very
Frederick T. Hepburn passed
hfe blood of the drive by govern- away June 15th at the age of 83
has become much more institution- frequent adjustments in regular ment to increase the car fleet.
following a long illness. Mr. Hepahzed over the years, as a greater rates. Personally, I am even more
The total of purchases under the burn in the past was President
proportion of the savings have enthusiastic about the use of solit tax aid of accelerated amortiza- of H. D. Walbridge & Co. and of
taken on contractual aspects, and
dividends under which a higher tion for the years 1950-55, inclu- the
Electric Bond and Shares
as
the elements of custom and rate is paid to the depositor who sive, amounted to $4,936,057,000 Companies.
ments

than

varieg

the

much

mQre

wideiy

relatively sluggish savings flow. As the savings process

in

the

payment

of

dividends

to

depositors. The use of extra dividends is aporopriate to avoid too

Volume 183

Number 5546

Continued

from

The Commercial and Financial Chronicle

...

nights if he

3

page

(3109)

1921

expected to

ever

interest

rates

for

pay

his

Continued

from

bor¬

41

14

page

rowed

capital.' Neither Goodyear?s
credit nor going money rates ever

The Stock Matket Outlook

hit that
in

And the

Psychological Factor

thought

been

that

they

discounted

largely

are

in stock market prices.
I

♦

with

entire

having the

how

run

flect changes in earnings or divi¬

this

means

and know-

succeed.

to

dends

nearly as much as changes
in appraisal. I can tabulate many
stocks that have enjoyed sensa¬
tional

Technical Market Weakness and

.) ■

v.

so

since

the

Fall

earnings

are

up

and

but

the

advances

1953.

Higher Market

~

point of view.
If
down the reasons for the

country

about the eco¬

in

ing and planning to better itself
and

market

population work¬

situation

the

you

is doubly true from a

same

stock

widest changes in stock prices you
will find these changes do not re¬

not worry

can

nomic

The

publicized

widely

so

Their

their

are

dividends

of

situation in the main factor has been the much
stock market itself is paramount/ greater increase in the price-earn¬
I
view
it as
weak.
Weaker, I ings ratio that has been paid by
think, than at any time since 1929. today's buyers. This willingness

■•V The

technical

However, I

be expressing an

may

to pay a

old fashioned and soon-to-be-outdated

in

tion

technical position

weak

a

is when

preponderance of stocks
small and inexperi¬

a

in

held

are

My defini¬

point of view.

of

portion held

has

York Stock

Exchange

fig¬

released

the number

stockholders in

eight million.

of these

Many

stockholders

indi¬

both

are

high

new

a

the

vidually small and inexperienced.
sense

their inexperience when I

telephone calls after
decline in the
stock average, asking about the
market in panic and telling me
"they" can not let the market
drop ^another day" like the weak¬
ness just occurring. If these people
get letters

or

small percentage

that stocks—all stocks—are

knew

likely from time to time to lose
at
least
half
their
gains, they
either

would

believe

not

think themselves misled.

know

or

me

they

;

—and "non-purpose" loans—are as

they

as

excepting

ever were,

Federal Reserve margin re¬

1929.

quirements
prevent them from
reaching those totals. But before

bearish, please recall I
point of view may

get

you

admitted |my

old

be

said

fashioned and outdated.

I

"preponderance" of stocks

a

weakly held. And that the
proportion held on credit was
were

"relatively"
It

is

high.

my

.weak but likely to get weaker as
the market goes higher.

Back in March, 1954, I wrote a
feature
story
for
"The

cover

^American Magazine"

on

"How to

fundamental

of

that

psychological situation
today favors more investors and
higher stock prices.
In conclusion, WHAT to buy is
perhaps

more

WHEN to

buy.

onto

families had the

means

time

words

stock

have

a

long

way

to go.

The

from

economic

view, is in
mists

can

and

opinion the fore-

my

influencing

;most

factor.

is

view of what people
collectively will pay for it than
by any statistical appraisal of
what
it
might theoretically be
worth.

This

next year's

business but indi¬
actualities. We

constantly upsetting such fore¬
We

casts.

should—or
versa.

Or

buy
we

•mew

but

car

the

appraisal,

in its determina¬
tion and in its inaccuracy.
has
not

vacation

it has that.

sure

The

possible value I had in mind

suffers

it

because

is

estimates of the future.

on

too

the past than

more on

It has

moderate.

the

as

be worth

may

a

eventually

than

surface.

am

test

I

unusual

dearness

cover

great deal more
appears

if I

see

for

reason

un¬

the

spend¬

said

we

twice
in

the

would

as

old

much
bus.

why I think that practical
must be heav-

'

If I

New

stocks, of course, are
different category.

a

chemical
Dow

is the

group

I

group.

invest blindly I would rather buy
the 10 stocks, yielding the least
than the

10

yielding the most.

currently outstanding and
might mention Union Carbide and
American

The

is

group

depressed

I think has reached

and

point

and

turn.

a

buying

a

like

I

the

all

Big Three: Chrysler, General Mo¬
tors and Ford.

dentally,
in

These stocks, inci¬

different

are

especially

leverage.
I

like the

Santa

Fe,

rail grouo, especially

Southern

New York Central.
fers

unusual

an

craft

The latter of¬

opoortunity.

manufacturers

forecast with

almost

Never take

anything for granted.

high is high
or how low is low.
Many potential
profits were lost on the way up in
1929

because

people

stocks

higher.

But

took

Good

in

probably

can

greater accuracy

any

stocks

leading air¬

major industry.
this

groun

could

they

not

did.

go

Among miscellaneous issues

Grace,

Nickel,

Goodyear
Sylvania

are

Caternillar

Tire.

and

W.

R.

Alleghany

be

bottom.

on

is

It

what

goes

down

or

up

to

must

think
come

that

Merrill Lynch

my
was

LOS

ANGELES, Calif.—Ben E.

Ambrose,
Robert

Richard

M.

Griffin,

H.

issory

notes

1864 with
pens

that

Akron
I

am

would

a

a

outstanding
last fiqld

visit
a

to

trip

Goodyear

plenty

of

sleepless

fact

not

large extent

a

that

the

met

of 1953, when the
government bonds

or

of

that

the

%
was

purchase

foregoing

of

mortgages

by the savings banks has been fi¬
nanced

largely
out
of deposit
gains, and it is probably true that
extraordinary amount of buy¬

any

industrial

national product have shown
relatively little change, and that

while there

much

be

may

adjustments

in

further

some

store, there is

underlying strength

current

situation

that

it

so

in the

is

diffi¬

cult to

foresee any cause for ex¬
fear
only the mainte¬
of constant caution.

cessive
nance

&

Two With

—

that

the

Reserve

in

tightening the
market may be eased as

effectiveness

becomes

icism

the

account

Federal

action

money

the

into

take

must

fact

more

this

of

action

apparent and crit¬

mounts.

Sr.

Merritt

&

are

Co.,

Broadway.

Mr.

ously

with

was

with

now

King,

Inc., 1151
Robinson

South
previ¬

McCormick

and

mortgage money is not
available
been

the

at

and

years,

situation

and

the

last

ten

for

reasons

also

are

it has

as

the

of

this

fairly apparent.

that

Morgan Adds to Staff

now

with

connected

members

Spring

the

of

Los

the

whole

economy,

country.

When

savings banker is offered
ment bonds

Sutro

&

HILLS,

Samuels

L.

Co.,

275

is

tion

at

advanced

with

a

yields,
into

come

these

competi¬

prime mortgage
loans

in

FHA

loans.

New

York

VA

guar¬

or

North

which

high

at

yields,

affected

are

general tightness of

Canon

Brooks D. Weber

and

had been

& Co,

a

now

up"

commitments

and

depend

(1) deposit increases; (2)
and (3) other increasesassets.
If we put aside the-

upon

payoffs;
in

factor

variable

find

that

of

deposits,

the

the

provided

latter

New

two

we

sources

York

State

savings banks in 1955 with about
dollars

billion

a

vides

in

put

amount

new
pro¬

substantial basis for future

a

business, but it is less

mortgage

the

half

than

to

This

investments.

that

amount

the

banks have invested in.
mortgages in each of the last two
years.
This fact is a further indi¬
that

cation

other

the
caused

by

money

borrowers, plant expansion
the

and

credit.

demands

of

instalment

The last few months have

also witnessed

a

of

of

continuation

the

the high ratio of mortgage invest¬
ment

the

over

past few

dependent

mainly
future
It

is

is

as

that home starts

reported

of

years

whether
rapidly in the

upon

the past,

in

as

down to

are

rate

seasonally adjusted

a

off

about 20%
it may well
buildingcosts as well as other factors, cer¬
tain
building projects may be
postponed for 'the time being.
from

1,100,000,

last

that

be

and

year,

due

Optimistic
If

increased

to

once

there

Short-Term

of

law

the

mand

of

more

the

is

supply

again build
in

the

freer

de¬

itself,

probability that

and

up

not

Future

and

asserts

reservoir of loanable

we

could have

distant

too

the

funds could

future

looking

slower than usual

savings,

which

to be caused more by com¬

I

am

a

market. But how

mortgage

on

the factors

forth, so watch these and
may have the indication you

by the heavy demands of industry,

for.

■

inclined

to

you
are

•

.

feel

more

op¬

timistic than pessimistic about the

reasonably short-term future but
I

do

not

of

to

the

wish to

assume

the

role

a

prophet. If you want a more
positive expression of opinion as

shape of things to come, I
you to your

can

favorite prognosticator.

noticeable slowing

any

deposits.

The rate of

by these factors
fact

in

up

only again refer

mort¬

new

acquisitions is slowed down

gage

that there

Mortgage

as
are

well

With D. D. Creger

by the

as

(Special to The Financial Chronicle)

sizable future

WHITTIER,

Calif.

—

Sidney

A.

Simon has become associated with
D.

Creger

&

Co.,

124

Nortf»

Bright Avenue.

Company

partner in Davies

interest

rates,

as

Bache Adds to Staff

a

result

of

firmed

considerably, and have led

these

banks

selective

California

"loaned

well

future

active, will depend

the

First

account

of the institu¬

Deposits
—

with

Drive.

with

some

set

offered

"Loaned Up" Banks Need More

Calif.
now

It must be pointed out
mortgage

are

that

govern¬

excellent corporate

or

(Special to The Financial Chronicle)

BEVERLY

the

indicates that

J.

Robert

make

to

supply

money

commitments already on the book9
of many of the banks.

Angeles Stock Exchange.

in¬

to

represents 61% of assets and also

by

ANGELES, Calif.—Carl V/.
is

that

paratively large withdrawals than

(Special to The Financial Chronicle)

Garrett

the

affect

therefore, the

seems

Morgan & Co., 634 South

continue

to

few years.

readily

as

present

most

over

accumulation

Company.

LOS

banks

deposits increase

In any event, it is apparent that

and

Tod-

fail

mortgages at the rate of the last

country

ANGELES, Calif.—John S.
J.

the

anteed loans in other parts of the

King Merritt

Harold

should

deposits

however, it is evident that
would be quite impossible for

it

savings
We

Mortgage

(Special to The Financial Chronicle)

and

If

crease,

tions

production, investment in plant
expansion, total employment and

bonds

Brooks D. Weber passed away
in¬ June 14th following a long illness.
in Mr. Weber had been associated

that President Thomas

have

the

on

and

to

based

compete with

in

few days ago and

is

investments

Lynch,
Pierce,
Fenner
Beane, 523 West Sixth Street.

prom¬

due

adviser

This

John

with

now

2%% coupon/It hap¬

my

only

sure

are

Joins Sutro & Co.

Today, they have unsecured

business

Mer¬

Kommerstad and

Meniktas

vice-versa.

clients. Each and every bond
payable not at 100 but at 120.

that

is

of

(Special to The Financial Chronicle)

back

If my memory serves me right,
it was about 35 years ago when I

that

point

a

be too

may

factors

Four With

Street,

factual

not

to

New

Fortunes

lost on the way down in
1930, 1931 and 1932 because peo¬
ple took it for granted they "must"

inventories

The supply of mortgage money in
York is dependent upon the

Corporation.

any

were

situation, and the
tendency of industry to accumu¬

are

for

it

removed

was

con¬

income

Board's

United Aircraft. Boeing and North
American Aviation.

hunter,

We do not know how

farm

Railway and

The business of the

Robinson

Granted

,

One

the

gross

Cyanamid.

motor

LOS

Do Not Take Anything for

in

despite lagging automobile sales,
declining housing starts, a poor

would .select

as

forced for example to

were

ily weighted with the psycholog¬
ical possibilities, and not confined




The

rill

yet in the fig¬

directions.

some

nancial

market but not

as

in

directions is

wide one, but/ late

Another attractive

G.

cluded

the statistical.

a

These

each in

situation which is reflected in the

ures.

somewhat,
those

econ¬

well, has levelled
in fact, has even

Gas.

to

can

the words the
so

peg

It is obvious from the

that the national

appears

the

government bond mar-'

put out by the national treasury.

Situation

high, the probability
will improve to¬
wards the latter part of the year
—again, follow your favorite fi¬

cheapness

apparent

hidden

a

inclined

more

and

the

on

favorable.

few, there is Stand¬

a

of

International

seemingly cheap

Business

economy,' in
omists love

ket,
issue

Jersey, Phillips
Petroleum, Sinclair, TXL Oil and,
in the gas field, American Natural

Oil

Tractor,

shares may just be no good. And
the aoparently overpriced shares

the

and

present

outstandingly

ing them out of shares that AP¬
The

now

off

to

the

/

Their "cash flow" situation

to mention

the danger of luring investors into

first mortgage bonds under par to

our

past.

Attractive

The future in oils looks

bright

shares that SEEM cheap and keep¬
PEAR dear.

General

It

which

in

when

1951
from

ing in the future will have to
struction of housing.
Your esti¬ depend upon the same factor. In¬
From
an
investment point of mate of the immediate national creasing deposits are generally an
view, the: group that offers the economic future during the bal¬ indication of a healthy economic
most current attraction in
ance
of 1956 may be formed by situation, so that the future of the
my view
is the oils.
The growth trend of the economist
you
read and in mortgage market insofar as the
the best managed oil companies is whom
you believe, however, the
savings banks are concerned, de¬
extremely strong, yet their mar¬ sum total of the concensus of pends in a large measure upon
ket
valuation
is
still relatively these experts seems to be that the state of business.

than

inator

available

them.

declined

be

often based

mortgages

most

or

only the funds but the

of

was

denom¬

common

for

those years, which

over

not

invest

trying at least to picture the

/Issues Currently

dearness.

This

economy

Buying

is

that.

that it gave the investor an indi¬
cation
of
relative
cheapness or

business forecasting

to

possible value and I

one

even

LESS—or vice

change

instead spend
our

That is

•

1956

to

as

January 1957. The
capital gains taxes force us to do

both

sold Goodyear Tire & Rubber 8%

We DON'T buy the
seers

appraisal

we

than

MORE

we save

ing direction.

statistical

resembles the economists' business

Econo¬

figure the probabilities

viduals create the

on

aspect, both
technical

psychological
an

stock

I think the price of a
fixed more by the psy¬

granted

Psychological Situation Favors
Higher Stock Prices

the;/current

on

chological

the

general estimate of the total num¬
ber of stockholders was only 6,500,000—one and a half million
less than today.
So perhaps we

are

today.

June

cember 1956

than

price level.

to become

that

At

.

important

But before passing
subject, I might add a

that

few

million

17

perhaps

shareowners.

cf

in

more

situation six months hence in De¬

ard

I feel the

Build Your Family Fortune" and
stated

invest¬

values.

ment

or

opinion that the cor¬
rect way to look at this technical
situation is that it is not only

^

to -select

us

as

greater rate than the ebb

flow

am

are

the credit situation. Brokers' loans

high

far

a

and

It

^

small when I
see
the unparalleled amount of
""odd lot"'buying as reported of¬
ficially in the papers.
The real
difference as compared to 1929 is
I

what

of

was

been wrong

Trend, to me, is always far
important than price. Now
stocks

Outlook for Mortgage Lending
And General Business Conditions
made

is

the

"high"

years.

choice of issues is

recently

individual

new

,

of

measure

investor confidence.

many

ulator) confidence ebbs and flows

country has reached

.

psychological

a

of

major de¬

a

market

has

credit is relatively

suggesting that

ures

a

gree

reflection

a

but in

accustomed

pro¬

when

and
on

The New

itself

I

fundamentals

then

Believe me, investor (and spec¬

high.

at

degree

some

bond

below that to which he

at

hands

enced

of

high price-earnings ratio

accept a lower income yield is

or

the

when income yields started to de¬
crease

have

low level in my 35 years
The investor who

Wall Street.

to

in

Moreover,
money

time

that

is

conditions

be

their

it
is

have

somewhat
choice

appears

of

more

risks.

that

available

at

local

MIAMI

Morris
1

is

Lincoln

BEACH, Fla. — Frank
with Bache & Co.,

now

Road

Building.

the
this

being confined more to
market, than the sec¬
ondary out of state market.
the

(Special to The Financial Chronicle)

Robert A. Gardner
Robert

A.

Gardner,

partner ir».

Mitchell, Hutchins & Co., Chicago,,
In any event, mortgage money passed away June 21st at tne ago
seems
to be tighter than that of of 66 following a heart attack.

42

The Commercial and Financial Chronicle...

(3110)

Thursday, June 28, 1956

-a indicates

Now in

Securities

-

^ Abbott Laboratories, North Chicago, III.
June 22 filed $540,000 of participations in the corpo¬
ration's Stock Bonus Plan, together with 30,000 shares
of common stock whicn may oe purchased pursuant to
the Plan.-

Grand Junction, Colo*

Abundant Uranium, Inc.,

(letter of notification) 3,000,000 shares of com¬
mon stock (par one cent).
Price—10 cents per share.
Proceeds—For mining expenses.
Office—319 Uranium
Center, Grand J unction, Colo. Underwriter—Ralph M.
Davis & Co., Grand J unction, Colo.
Feb. 23

•

Aero Supply

June 4
stock

(par $1)

to

June 25, 1956, on a

July 20, 1956. Price — $2 per
machinery and equip¬
ment in plant, additional equipment and working capital.
Office—611 West Main St., Corry, Pa.
Underwriters—
Henry M. Margolis and Leo A. Strauss, directors of the
on

Proceeds—For relocating

company.

,

Allied

Oil

&

Industries

Corp.
June 14 (letter of notification) 150,000 shares of capital
stock (par 10 cents). Price—$2 per share. Proceeds—
For the acquisition of oil and gas leasehold interests
and working capital. Office — 403 Wilson Bldg., 2601
Main St., Houston, Texas.

Underwriter — Muir Invest¬

ment

Corp., San Antonio, Texas.; D. N. Silverman & Co.,
New Orleans, La.; Texas National Corp., San Antonio,
Texas.; Charles B. White & Co., Houston, Texas.; and
Heed and Sloan Co., Dallas, Texas.

• Altec Companies, Inc., New York (7/16-18)
June 26 filed 100,000 shares of capital stock (par $1), of
which 35,000 shares are to be offered for account of the
company and 65,000 shares for certain selling stockhold¬
ers.
Price—To be supplied by amendment. Proceeds—
To be advanced to Altec Lansing Corp., a wholly-owned
subsidiary, to be used for its expansion program. Under¬
writer — Dean Witter & Co.,. San Francisco and New
York.
•

American

due

Frontier Corp.,

Memphis, Tenn.
shares of class A common stock (par
|1).
Price — $10 per- share. Proceeds — Together with
other funds, to purchase 1,000,000 shares of common
stock (par $1) of American Frontier Life Insurance Co.
Feb. 15 filed 175,000

Underwriter—rNone,

-

15 filed

Statement effective June

19.

Los Angeles, Calif.

are

offered ior

To

—

be

Proceeds

by amendment.
Underwriter—None.

Public

Finance

—

To

and

$9,250,000

improving

and

plant.

Underwriter—Columbia Securities Co., Inc. of California,

/Beverly Hills, Calif.
American Insurors'
'Feb.
iPrice

10
—

filed 400,000 shares of common stock (par $1).
$2.50 per share. Proceeds — To expand service

business.
Office
Birmingham, Ala.
Underwriter
Odess, Martin & Herzberg, Inc., Birmingham, Ala.
—

e

American Machine &

"Foundry Co.

—

June 1 filed

$10,897,000 of 4x/4% subordinated debentures
July 1, 1981, being offered for subscription by com¬
stockholders of record June
27, 1956, at the rate of
$100 of debentures for each 25 shares of stock then held;
f rights to expire on July 11. Price—At par (flat). Pro¬
ceeds—To reduce bank loans and for
working capital.
Underwriter—Union Securities Corp., New York.
due

mon

American Tar & Turpentine
Co., Inc.
June 5 (letter of
subordinated

debentures

due

May

15,

1976 and 20,000 shares of common stock
(no par) to be
offered in units of 10 shares of common stock
and $100
of debenture.
Price—$110 per unit. Proceeds—For in¬

stalling

plant in Winfield, La. Office—219 CaronNew Orleans, La. Underwriters — Scharff &

a new

delet

St.,
Jones, Inc., and Nusloch, Baudean & Smith,
Inc., both
of New Orleans, La.
American Telephone
June

18

& Telegraph Co. (7/10)
of 34-year debentures due
Proceeds—For advances to
subsidiary and

filed

'July 1, 1990.
associated

$250,000,000

companies; for investments; for extensions,
additions and improvements to
properties; and for gen¬
eral

corporate

purposes.

Underwriter—To

be

deter¬

mined

by competitive bidding. Probable bidders: The
First Boston Corp. and
Halsey, Stuart & Co. Inc. (jointly);
Morgan Stanley & Co. Bids—Expected to be received
up

to 11:30

a.m.

(EDT)

Co.

on

The

and

filed

Proceeds—To

1981.

construction.

petitive
Co.

$5,000,000

reduce

bidding.

loans

bank

Probable

be

July 10.

bonds due

and

for

new

determined by

bidders:

Halsey,

com¬

Stuart

&

Inc.; Shields & Co.; The First Boston Corp.; Dean

(jointly).

Expected to be received up to 11 a.m.
17 at 90 Broad St., New York 4, N. Y.
Atlantic Oil

(EDT)

Bids—

July

on

Corp., Tulsa, Okla.

April 30 filed 2,000,000 shares of common stock (par $1).

Price—$1.50 per share. Proceeds—For working capital
and general corporate purposes.
Underwriter — To be
named

June

by amendment.

11

Credit

Philadelphia,

retire

indebtedness

of

the

com¬

to its affiliates for money borrowed for working
capital. Underwriter—Name to be supplied by amend¬
ment. George A. Searight, New York, underwrote stock
offering in December, 1954.
pany

Atlas

Corp.

Feb. 28 filed 9,890,095
to be issued pursuant
this

corporation

to

an

common

of

1.3 shares for each share of Wasatch
common.
The registration statement also covers 1,250,000 shares of 5% cumulative preferred stock (par $20)
and

which will become issuable upon and to the extent that
shares of common stock are convertible into shares of

preferred stock.
24.

Stockholders approved merger
effective April 20.

Statement

762

,

by amendment.

(7/17)
Price-

Proceeds—For
Strum

invest¬

&

Tcwne, Inc.;
New York, and Mutual Funds Statistical
Surveys Ltd.;
Montreal, Canada. Underwriter—Hayden, Stcne & Co.;
New York.
•

Cary Chemicals Inc., Milltown, N. J.

(7/3)
$2,300,000 of 6% first lien bonds due 1976
and 230,000 shares of common stock (par 10
cents) to be
June

filed

5

offered in units of $500 of bonds and 50 shares of stock;
be supplied by amendment.

Price^-To

'Proceeds—$1,*

150,000 to be applied to cost of

plant;

$138,000

to

polyvinyl chloride

new

interest

^bonds

on

during

the

first year; $230,748 for liquidation of
mortgage on pres¬
ent.plant; $33,000 for retirement of outstanding preferred
.

stock; $10,352 for purchase of common Stock;-and about
$447,400 for working capital. Underwriters—Lee Hig->
ginson Corp. and P. W. Brooks & Co., Inc., both of New
York.

-

.

.

★ Champion,
June

22

Inc.? Iron Mountain, Mich.
(letter of notification) 2,000 shares of

stock

to

be offered first to stockholders.

per

common

Price—At par

share). Proceeds—For working capital. Office
Ludington St., Iron Mountain, Mich. Under¬
-

Chesapeake Shores Country Club, Inc.
May 29 filed 5,000 shares of common stock, of which it is
the

company's intention to offer for sale at this time
only 2,500 shares. Price—At par ($300 per share). {Pro¬
ceeds

To

—

and

construct

operate

Office—Upper Marlboro, Md.

a

recreation

resort.

Underwriter—None.

C. I. T. Financial Corp.
May 17 filed $75,000,000 of debentures due June 1, 197U
Price—To be supplied by amendment.
Proceeds—Pri¬
marily for furnishing working funds to company's sub4sidiaries.
Underwriters—-Dillon, Read & Co. Inc., Kuhn,
Loeb & Co. and Lehman Brothers, all of New York.
Offering—Temporarily postponed.

June

4

Utilities Corp.

(letter

amount

of

June

1966 to

of

1,

6%

(Each

notification)

$109,245.5Q

subordinate

at

the

rate

of

$1.30

principal

debentures, due

be offered for subscription

stock

common

held.

of

convertible

for

by holders
each

share

$100

of debentures is convertible into 18
shares of common stock.)
Price—At 100% of principal
Proceeds—For
working capital, construction,
purchase of Dover plant, etc. Office—90 Broad St., New
amount.

stock (par $1)

agreement of merger with

13 shares for each share of Wasatch cumulative

preferred;

—

Underwriter—Birken-

York, N. Y. Underwriter—None.
shares of

Airfleets, Inc., Albuquerque Asso¬
ciated Oil Co., RKO Pictures Corp., San Diego Corp.
and Wasatch Corp. on the following basis: Four shares
for one of Atlas common; 2.4 shares for one share of
Airfleets common; one share for each share of Albu¬
querque common; four shares for each 5.25 shares of
RKO common; 2.4 shares for each share of San Diego
common;

Office

expenses.

Investment Advisers—Van

Colonial

$600,000 of 6% convertible subordinated
due June 15, 1968. Price—100% of principal

Proceeds—To

supplied

ment.

Pa.

filed

debentures
amount.

Corp.,

mining

& Co., Denver, Colo.

writer—None.

first mortgage

Underwriter—To

For

—

—108 East

(7/17)

of

mining

Boulder,

($100

of

.

Atlanta Gas Light Co.
20

Under¬

Robinson-Humphrey Co., Inc., ;both

Atlanta, Ga.

Atlas

notification) $200,000 principal amount,

201/2-year 5V2%

To reduce bank loans and for new construction.

Witter & Co. and Lazard Freres & Co.

-

Proceeds

be

resin

July 10, 1956 on the basis of one new share
for each 10 shares held; rights to expire on July 31,
1956. Price—To be supplied by amendment. Proceeds—

June

Development Co.

To

Underwriter—None.

&

organizing and operating a racing stable.
VOffice—Virginia and- Truckee Bldg., Carson City, Nev.

for exploratory work on
Pearl Street,

Office—1424

Canadian International Growth Fund Ltd.
June 15 filed 625,000 shares of common stock.

Associated Grocers, Inc., Seattle, Wash.
April 20 filed 5,703 shares of common stock; $2,000,000
of 25-year 5% registered convertible debenture notes;
and $1,500,000 of 5% coupon bearer bonds. Price — Of
stock, $50 per share; and of notes and bonds, 100% of
principal amount. Proceeds—To reduce bank, mortgage
loan, or other indebtedness; and for working : capital.

writers—The. First Boston Corp.; New York; and Courts

For

used

Denver Club Bldg., Denver, Colo.

None.

of record

At

Underwriter—Lamey & Co., Boulder, Colo.

share.

Underwriter—

Atlanta Gas Light Co. (7/11)
June 20 filed 88,280 shares of common stock (par $10)
to be offered for subscription by common stockholders

—

Birnaye Oil & Uranium Co., Denver, Coio.
April 6 (letter cf notification) 1,000,000 shares of class
A common, stock (par five cents). Price — 10 cents
per

Proceeds—For modern¬

telephone

be

properties.

•

ceeds

—

Colo.

mayer

izing

Price

Burton is President of
company.

Proceeds—To

mineral

(letter of notification) 102 shares of common
stock and 500 shares of 5%% cumulative preferred stock.
($50 per snare).

bonds.

Big Horn Mountain Gold & Uranium Co.
(letter of notification) 9,300,000 shares of com¬
mon stock (par one cent).
Price—Three cents per share.

21

Price—At par

debenture

Feb. 23

★ Asotin Telephone Co., Asotin, Wash.
June

of 20-year 6%
1976, of which $10,-

1,

issued

—

convertible

American Horse Racing Stables, Inc.
(letter of notification) 3,000,000 shares of com¬
mon
stock.
Price—At par (10 cents per share).
Pro¬

May 11

$100,000 convertible

William H.

(7/10)
of

$285,000

be

Proceeds—For capital expenditures and working
capital. :v Office — Baltimore, Md. Underwriter
None.

subordinated
debentures due June 15. 1971. Price—100% of principal
amount.
Proceeds—Together with $7,750,000 to be bor¬
rowed from insurance
companies, for construction or
acquisition of new plants and equipment and for work¬
ing capital. Office—West Haven, Conn. UnderwriterReynolds & Co., Inc., New York.
filed

to

par.

talesman of the insurance firm.

31

are

Beta Frozen Food Storage, Inc.
May 14 filed 15,000 shares of preferred stock (par $50)

share. Proceeds—For working capital. Underirrtter—None, sales to be directly by the company or by

Armstrong Rubber Co.

notification)

principal amount

—

cents per

•

of

debentures due July

Business—Fireplace units, etc. Office—Norwich, N. Y.
Underwriters—Mohawk Valley Investing Co., Inc.,
Utica,
N. Y., and Security & Bond Co.,
Lexington, Ky.

Sept. 16 filed 78,006,081 shares of common stock to be
offered for subscription by holders of life 'insurance
policies issued by Public Life Insurance Co. Price—20

May

(letter

in exchange for
like amount of 6% debentures due 1S73.
Price—100%
and accrued interest. Proceeds
For working capital.

Phoenix, Ariz.

Co.,

issue

a

common stock¬
share for each 10 shares held.

supplied

bank loans.

repay

000

subscription by

one

8

convertible

1,

be

to

Price

revised

Bennett-Ireland, Inc.
June

$4,099,300 of 5% subordinated debentures

holders at the rate of

previous

items

•

1986 (convertible until July 1, 1964) and
63,614 shares of common stock (par $1). The debentures
are to be offered for subscription by preferred stockhold¬
ers at the rate of $10
principal amount of debentures
for each preferred share held, while the common shares
July

Arizona

103,903 shares of common

be offered to stockholders of record
basis of one new share for 4Ve shares

held; rights to expire
share.

Arden Farms Co.,
June

Mfg. Co., Inc.

(letter of notification)

Registration

additions

since

on

Colorado

Springs Aquatic Center, Inc.
500,000 shares of common stock (par 10
Price—$1 per share. Proceeds—For swimming
pool and related activities, bowling alley, site preparation
including parking, and land cost ($95,000). Underwriters
June

5

filed

cents).

—Arthur

Copley

L.

&

Weir

&

Co., Colorado

Springs, Colo.; and

Co.

Columbia

General

Investment Corp.

March 29 filed 100,000 shares of commcn stock (par $1)
to be offered for subscription by stockholders only. Price
—A

maximum

additional

General

of

$4.50 per share.

investments,

Life

Insurance

Underwriter—None.

including
Co.

Proceeds—To
stock

Office

—

of

make

Columbia

Houston,

Tex.

-

May

★ Commercial

Life Insurance Co. of Missouri

June 21

Automation

Industries

Corp., Washington, D. C.

May 11 filed 179,000 shares of common stock (par $1).
Price—$5.25 per share. Proceeds—For working capital
and other corporate purposes.
Underwriter — None.
Harry Kahn, Jr., of Washington, D. C., is President and

(letter of notification) 50,000 shares cf common
stock to be offered initially to stockholders (par $2).
Price—$5.50 per share. Proceeds—To be added to gen¬
eral funds and for expansion of business.
Office—5579

Pershing Ave., St. Louis, Mo.
Jones &

*

Underwriter—Edward D.

Co., St. Louis, Mo.

Treasurer.

New York.

Boston

Philadelphia
1

San Francisco

Private IVires




Pittsburgh

to

all

offices

Chicago

★ Baldwin Laboratories, Inc.
June

Cleveland

stock.

19

(letter of notification)

Price—At

operating

par

expenses.

Qmaha, Neb.

($100
Office

per
—

190

shares of

share).
2506

Underwriter—None.

common

Proceeds—For

Rockbrook

Road,

Commodity Fund for Capital Growth, Inc.
May 28 (letter of notification) 60,000 shares of common
Price—$5 per share. Proceeds—For trad¬
ing in commodity future contracts. Office — 436 West
20th St., New York 11, N. Y. Underwriter — Arthur N.
Economu Associates, New York, N. Y.
stock (par $1).

.

Volume 183

Number 5546

The Commercial and Financial Chronicle

...

Commodity Holding Corp.
6 (letter of notification) 3,000,000 shares of com¬
mon stock
(par five cents). Price—10 cents per share.
Proceeds—To trade in commodities. Office—15 Exchange
Place, Jersey City, N. J. Underwriter — Southeastern
Securities Corp., i>35 Broadway, New York.
June

Commonwealth, Inc., Portland, Ore.
March 23 (letter of notification) 5,912 shares of 6% cu¬
mulative preferred stock being offered for subscription
by stockholders of record April 16, 1956 on a pro rata
basis; rights to expire on July 2, 1956. Price—At par ($50
.per share)."Proceeds — For working capital. OfficeEquitable Bldg., 421 S. W. 6th Ave., Portland 4, Ore.
Underwriter—None.
'• /
v.t .
'■ ^

stock

(par $10). Price—Of debentures, 100% of principal

amount;

and

of stock, $12
bank loans and

share.

per

Proceeds—For

payment of
other obligations totaling
$184,000, and for the purchase of securities of company's
Underwriters
The Milwaukee Co., Mil¬
waukee, Wis.; Harley, Haydon & Co., Inc., Madison,
Wis.; and Indianapolis Bond & Share Corp., Indianapolis,

subsidiaries.

—

Ind.

Continental
March 28

Equity Securities Corp.

filed

40,000 shares of class A

;

• Consolidated

Diesel Electric

June

15 filed 3GO,000 shares of
cents), of which 100,000 shares

Corp.

(7/10-11)
stock

(par

account

of

common
are

for

stock

(par $5) and 80,000 shares of class B common stock (par
50 cents). Price—Of class A stock, $12.50 per
share, and
of class B stock, 50 cents per share.
Proceeds—To in¬
crease capital and surplus.
Office—Alexandria, La. Un¬

company
and 200,000 shares for account of certain
.selling stockholders. Price—To be supplied by amend¬
ment.
Proceeds—For working capital and to finance
inventories and accounts receivable.
Office—Stamford,
Conn. Underwriter
Van Alstyne, Noel & Co., New
—

York.

stock

(par

Proceeds—For mining
St., Winnemucoa, Nev.
Co., Denver; Colo.
•

Price

cent).

one

—

20 cents per share.

Office—41 East Second

expenses.

Underwriter—Shelley, Roberts &

due

Dalmid Oil & Uranium, Inc., Grand
Junction, Colo.
April 16 (letter of notification) 2,700,000 shares of com¬
mon
stock (par one cent).
Price—10 cents per share.

Street,

18

(7/9)

filed

$330,000 of 5% convertible-debentures
1, 1976 and 26,000 shares of class A common

June

NEW

ISSUE

July 2

Cooper Tire & Rubber Co., Findlay, Ohio
97,950 shares of common stock (no par) to
be offered for subscription by common stockholders on

Trust Co. of

the

June

as

basis

of

IY4

shares

new

for

each

two

shares

held

of June 19, 1956 (with an

oversubscription privilege);
12, 1956. Price — $10.50 per
share.
Proceeds—For working capital.
Underwriter—
Prescott & Co., Cleveland, O.
rights

to

expire

Crater Lake

July

on

Office-

expenses.

Springs, Colo.
Denver, Colo.

•

1902

—

East

Underwriter

—

of

shares

of

class

A

and

San

Rafael, Colorado
Skyline Securities, Inc.,

class

B

stock

(par

$5

each).

Price—To be supplied by amendment.
Proceeds—For
general corporate purposes. Underwriter—Blyth & Co.,

Inc., New York.
Cullen

Minerals Corp. (Texas)
(letter of notification) 300,000 shares of com¬
mon stock (par 10 cents).
Price—$1 per share. Proceeds
—To repay bank loans, and for expansion and working
capital. Underwriter — Lepow Securities Corp., New
York.

(Bids

11:30

EDT)

a.m.

Offering—Temporarily postponed.

(Milton

D.

Blauner

&

Co.,

Inc.)

Lay (H. W.) & Co., Inc
(Johnson,

Union
"

-

'

$300,000

general corporate purposes.

Lane, bpace & Co., Inc.)

$1,150,000

(Milton

Biauner

&

Co.,

Inc.")

:r

July 3

*

(Peter

(Lee

Hfgginson

Corp.

$2,300,000

United

and

bonds

P.

and

Brooks

W.

230,000

&

Co.,

States Shoe Corp

(Merrill

Lynch,

Pierce,

&

Co.,

Inc.

Canadian

&

Beane)

170,000

and

Light

Borton

Connecticut

shares

$234,375

Simon,

&

'

11

Air

Lines,

Noyes

Co.;

&

Courts

Corp.)

and

Co!;

&

Securities

Courts

Corp.)

Devall

&

-Common

Co.;

and

Equitable

July 6
to

stockholders—to

Stanley & Co.)

July

be

about

underwritten

270,000

9

stockholders
Natural

White,

Debens.

Weld

El

of

Gas

(Bids

mon

&

Co.)

to

be

Rubber

Co.,

Inc.;

Gas

and

notes, to purchase and equip three boats
working capital. Office—1111 No. First Ave., Lake
Charles, La. Underwriter—Vickers Brothers, Houston,
Tex.

Doctors Oil Corp.,
Carrollton, Tex.
23 filed 500,000 shares of common

Feb.

stock (par 10
Price — $1 per share. Proceeds — For working
capital, to be devoted mainly to acquiring, exploring,
developing and operating oil and gas properties; and to

cents).

off $13,590.80 liabilities. Underwriter
James C.
McKeever & Associates, Oklahoma City, Okla.
pay

—

Dolomite

King, Inc.
(letter of notification) 6,000,000 shares of capital
Price—At par (five cents per
share). Proceeds—
For mining expenses.
Office—139 North Virginia St.,
Reno, Nevada. Underwriter—None.

June 18
stock.

Co.

Gas

Dealers,

August 1

Co
White,

Corp.;

Stuart &

Co.

Boston

to

Corp.;

Courts

Co.,

Kirsch Co.
(Cruttenden

&

&

Debentures
Weld

&

Co.;

Pacific

Co.

and

(Bids

14

ar.d

88,280

The

by

The

First

Robinson-Humphrey

shares

Common

Smith, Hague, Noble & Co.)

stockholders—bids

San Jacinto Petroleum
(Offering

to

White,

11:30

a.m.

EDT;

$40,000,000

(Tuesday)

8:30

a.m.

PDT;

&




Debentures

11

120,000 shs.

a.m.

EDT)

341,550

shares

(Friday)
Corp
Co.)

stock

filed.

Natural Gas Co., Inc.
notification) 50,000 shares of 6% cumu¬

stock
(par $5) and 50,000 shares of
(par 50 cents) in units of one share of

each class of stock.
Price—$5.50 per unit. Proceeds—
To repay loans and for
general corporate purposes. Of¬
fice — Ritzville, Wash. Underwriter —

Morgan & Co.,

Lake

City, Utah.

Engineering Co. of California
(letter of notification) 18,378 shares of com¬
(par $1), of which 13,000 shares are to be
offered to employees.
Price—$9 per share. Proceeds—
For plant construction and
working capital.
Office—
June

15

stock

South Alvarado

St., Los Angeles o7, Calif.

Under¬

writer—None.
Eureka Corp., Ltd., New York
April 30 filed 2,276,924 shares of common stock (par 25
cents-Canadian), of which 1,991,210 shares are to be
offered for subscription by stockholders of record
May
18, 1956 at the rate of one new share for each five
The

remaining 285,714 shares

sued to the underwriters

as

to be is¬

are

compensation in connection

the

offering. Price—$1.75 per share. Proceeds—
explore, develop and exploit the TL Shaft area. Un¬
Corp., Ltd. and Rickey Petroleum!
& Mines, Ltd., both of Toronto. Canada.
derwriters—Alator

Natural

shares

8

Power

filed

Corp. (7/2)
$20,000,000 of first

mortgage

bonds

Proceeds—To repay bank loans and for

new

due
con¬

Underwriters—To be determined by com¬
bidding. Probable bidders: Halsey, Stuart &
Inc.; Kidder, Peabody & Co. and Merrill Lynch,
Pierce, Fenner & Beane (jointly); Lehman Brothers
and Blyth & Co., Inc.
(jointly); Glore, Forgan & Co.;
petitive

to

be

Co

invited)

September 11
(Bids

to

be

to

be

Debentures

$30,000,000

invited)

invited)

October 1
to

Bonds

October 2

Bonds

£20,000,000

Securities Corp. and
(jointly). Bids—Expected
(EDT) on July 2.

per

share.

Proceeds—To

(par $1).

expand

Office—Fort

Hills Mining and
Oil, Inc.
(letter of notification) 1,200,000 shares of com¬
stock (par five cents). Price — 25 cents
per share.
4

Proceeds—For

expenses

incident to

mining operation!.

Office—Kemmerer, Wyo. Underwriter—Philip
& Co., Inc., New York 6. N. Y.
Debentures

$30,000,000

a.m.

Gas

mon

(Tuesday)

(Bids to be invited)

Union
Inc.

company*!
Lauderdale, Fla. Underwriter—
Offering will be made through James C. Dean,

business.

Jan.

$10,000,000

Columbia Gas System, Inc

Corp.;

President of company.

(Monday)

invited)

Boston

Ripley & Co.

Florida Sun Life Insurance Co.
March 16 filed 32,000 shares of common stock

None.

$15,000,000

Bonds
be

First

Price—$10

(Tuesday)

September 25 (Tuesday)
Virginia Electric & Power Co

The

to be received up to 11:30

(Tuesday)

Gas

Carolina Power & Light Co

(Bids

Common
be'Tfnderwritten by

298,410

June

Harriman

$78,000,000

—Common

stockholders—to
Weld

be

struction.
Bonds

Tampa Electric Co
July 13

to

Washington

June 6 (letter of
lative preferred

Florida

(Tuesday)

August 28

(Bids
to

expected

Eastern

1986.

$3,750,000

and

Common
underwritten

Pacific Power & Light Co
(Offering

Inc.)

Telephone & Telegraph Co

(Bids

—1

&

$20,000,000

(Wednesday)
Otis,

August 21

Inc.) $30,000,000

be

Co.;

•

To

Common

(Bids

Consolidated

Inc.)

tration

a

American

Co.

(Wednesday)

stocknolders—to

Price—$75 per unit. Proceeds—
parking building and facilities.
Bank Bldg., Portland, Ore. Un¬
derwriter—Blyth & Co., Inc., Portland, Ore. Full regis¬
Office—1333

with

..Common

July 11

of stock.

development of

shares held.

Common
100,000 shares

Consumers Power Co

$6,000,000

Atlanta Gas Light Co
(Offering

$1,000,000

(Tuesday)

I
-

Class A
Inc.)

(Monday)

invited)

be

August

Debentures

Transmission

Halsey,

250,000 shs.

Bonds

(Gearhart

shares

_

Curtis)

&

Securities

Webster

Kraus)

Illinois Power Co

Common

300,000

(Offering to stockholders—to be underwritten by Merrill Lynch,
Pierce, Fenner & Beane; 2,570,846 shares

&

Burge &

(Friday)

Minerals, Inc.

Corp

Co.)

Jackson

20

July 24

Sperry Rand Corp.

(Stone

Ball,

Downtown Parking
Association, Inc.
May 18 (letter of notification) 4,000 shares of common
stock (par $25) and 4,000 shares of cumulative
preferred
stock (par $50) to be sold in units
consisting of one share

180

Common

(Baker, Simonds & Co.)

$9,250,000

Corp

Webber,

$9,650,000

(Thursday)

and

(par one cent). Price — 10 cents per share.
Proceeds—For mining expenses. Office—155 North Col¬
lege Ave,, Fort Collins, Colo. Underwriter — Columbia
Securities Co., Denver 2, Colo.

mon

—Common

July 23

to

Colo.

$250,000,000

Inc.)

&

shares

Copeland Refrigeration Corp

Debentures

Co.,

270,000

Corp.)

Securities

(Bids

Fort Collins,

Electronic

Common

and

by

(Tuesday)

Noel

Research

State

Corp.,

stock

Salt

Gold Seal Dairy Products Corp
(All

Co., Inc.

and

Co., Inc.--Com.

$300,000

Brothers)

July

shares

Co
&

Alstyne,

Dominick

Stk.

$642,000

underwritten

1,400,000

invited;

(Reynolds

Tennessee

$40,000,000

Corp

&

,

payments of

common

Co._

July 19

Class A

&

Natural

be

Consolidated Diesel Electric

(Paine,

shares

North American Coal Corp

American Telephone & Telegraph Co.„Debentures

National

125,000

EDT)

Buston

Common

Paso

Co.—to

July 10

(Van

shares

(Wednesday)

First

by

shares

Rare Metals Corp. of America

Armstrong

46,000

Bonds

(Monday)

Co.; Harley, Haydon &
Indianapolis Bond & Share Corp.;

to

Fund, Ltd.--Com.

...Common

Milwaukee

Western

$5,000,000

Common

a.m.

Cement

Republic

,

Marine Construction

(letter of notification) 150,000 shares of com¬
stock (par $1). Price—$2 per share. Proceeds—For

625,000 shares

(Vickers Brothers)

(Dominick

Consolidated Water Co

(Offering

Co.)

Co.)

<fe

(Vickers

(The

L'DT;,

Growth

Kansas Power & Light

(Friday)

&

May 16

For

Bonds

Inc.—

11

.

Land

of each class

(Tuesday)

Common

&

July 18

136.000 shares

Yale & Towne Manufacturing Co
Morgan

..Common

$570,000

Devall Land & Marine Construction

(The

(Offering

Co.)

Union Electric Co.

Equitable

i

Noyes

-

-

Co.;

&

$2,000,000

Wheland Corp.
(Hemphill,

shares

Debentures

Securities

•

100,000

Co

(Courts

(Bids

-

&

a.m.

Water

-

(Hemphill,

shares

Co

(Putnam

Delta

Inc.)

•

Wheland Corp.

Inc.)

(Hayden, Stone & Co.)

Common

Ross,

100,000

Common

Co.,

International

Common

Fenner

Washington Natural Gas Co
(Barrett Btrrick

Gas

Inc.)

shares

common

&

Morgan

(Bids

Bonds & Common

Co.)

July 17

$800,000

(Tuesday)

Cary Chemicals, Inc

&

Mica & Minerals Corp. of America

Atlantic
/•

(Monday)
Common

Witter

Becker

Class A Stock

D.

16

Cummins Engine Co., Inc
G.

Underwriter—Courts & Co.,

Atlanta, Ga.

March 26 (letter of notification) 2,997,800 shares of com¬

Companies, Inc

(A.

-Class A Common

Mines, Inc

*

Altec

(Dean

Common

(7/17)
125,000 shares of common stock (par $3).
supplied by amendment. Proceeds—For

be

Douglas

CALENDAR

$20,000,000

Lines, Inc., Atlanta, Ga.

19 filed

(7/18)

ir Crossett Co., Crossett, Ark.
notification) an undetermined number

July

General Transistor Corp

Underwriter—Columbia

working capital. Underwriter—The First
Lincoln, Neb.

Delta Air

Price—To

Mining & Milling Co., Inc.

March 8 (letter of notification) 575,000 shares of common
stock. Price—50 cents per share. Proceeds—For
mining

(Monday)
Bonds

Junction, Colo.
Co., Denver, Colo.

Dean & Co., San
Antonio, Texas
May 21 (letter of notification) 20,000 shares of 6% pre¬
ferred stock, series A.
Price—At par ($10 per share).

mon

Florida Power Corp

Office—1730 North 7th

Grand

Securities

Proceeds—For
•

March 30

Consolidated Water Co., Chicago, 111.

June

Underwriter—A. G. Becker &

Co., Inc., Chicago, 111.

June 18 (letter of

Consolidated Mercury Corp.
May 21 (letter of notification) 1,500,000 shares of com¬
mon

tain selling stockholders.

June 6 filed

10
the

^ Cummins Engine Co., Inc., Columbus, Ind. (7/16)]
100,000 shares of common stock (par $5).
Price—To he supplied by amendment.Proceeds—To cer¬
June 26 filed

Proceeds—For mining expenses.
common

derwriter—None.

^ Connecticut Water Co., Clinton, Conn. (7/17)
June 25 filed 45,000 shares of common stock
(no par).
Price—To be supplied by amendment.
Proceeds—To¬
gether with funds from private sale of bonds, to be
used to purchase water ^properties and franchises of
Connecticut Light & Power Co. Underwriter—Putnam
& Co., Hartford, Conn,

43

(3111)

Continued

on

Gordon

page

44

44

The Commercial and Financial Chronicle...Thursday, June28, 1956.

(3112)

Continued from page 43

.

Corp.;
$1.60 cumulative

.

April 13 (letter of notification) 250,000 shares of capital
stock. Price—At par ($1 per share). Proceeds—For min¬

General Precision Equipment

20

June

vertible

filed

59,445

shares

of

ing

con¬

preferred stock and common stock of Graflex, Inc.
in the ratio of one-quarter share of General preference
stock for each Graflex preferred share and one-quarter
share of General common stock in exchange for each
Graflex common share. Underwriter—None.
General

Corp.

Transistor

Idaho-Alta Metals Corp.

New York.

Ideal-Aerosmith, Inc., Hawthorne, Calif.
Dec. 16 (letter of notification) 150,000 shares of capital
itock (par $1).
Price — $2 per share. Proceeds — For

400,000

equipment, machinery, inventory, etc. Office—12909 So.
Cerise Ave., Hawthorne, Calif. Underwriter—Samuel B<
Franklin & Co., Los Angeles, Calif.

Proceeds—-To repay bank loans and for hew construction.
Underwriter—To be determined by competitive bidding.

(letter of notification) 80,000 shares of common

(par $2.50). Price—$3.75 per share. Proceeds—
note payable.
Office—4112 Aurora St., Coral
Gables, Fla.
Underwriter—Atwill & Co., Inc., Miami
stock

Probable

To

Boston Corp.;

Beach, Fla.

*

Golden Dawn Uranium Corp., Buena

Vista, Colo.

of notification) 3,000,000 shares of capital
(par five cents). Price—10 cents per share. Proneeds — For mining expenses. Underwriter — Bel-Air
Securities Co., Provo, Utah.

Dec. 27 (letter

Industrial Minerals Development Corp.

stock

notification) 1,000,000 shares of com¬
Proceeds—For
development and working capital. Office—Moab, Utah.
Underwriter—I. J. Schenin Co., New York.
March 7 (letter of
mon

^ Gold Seal Dairy Products Corp. (7/20-8/1)
June 22 filed 200,000 shares of class A stock (par 10
cents).
Price—$5 per share. Proceeds—For expansion
and to repay outstanding obligations.
Office—Remsen,
N.

Underwriter—All

Y.

State

Securities Dealers, Inc.,

New York.
•

'

.

-

Grain Elevator Warehouse Co.

stock

writer—Bennett

(par 10 cents) being offered for subscription

in units of $50 of debentures

and

Price—Five cents per share.

stock.

Inglewood Gasoline Co.
May 18 (letter of notification) 175,725.9 shares of capital
stock (par 50 cents) to be first offered to stockholders.
Price—$1.70 per share. Proceeds—For construction of
an absorption type gasoline plant. Office—11950 San Vincente Blvd., Suite 207, Los Angeles 49, Calif.
Under¬

May 28 filed $6,302,950 of 5% convertible subordinated
debentures due 1976, together with 126,059 shares of com¬
mon

one common

share by

Nov. 10 filed 100,000 shares

rights to expire on July 12. Price—$50 per unit. In
exercising the subscription rights, credit will be given
toward the subscription price on the basis of $45 for
each share of preferred and $15 for each share of com¬
mon stock of National tendered
as a part of the sub¬

June

scription. Proceeds—For capital expenditures and work¬

Underwriter—None.

Gray Tool Co., Houston, Texas
May 3 (letter qf notification) 3,270 shares of class B stock
(no par), of which 1,000 shares are to be offered pro
rata to the holders of class A stock and 2,270 shares are
offered to employees of the company. Price — $50 per
share. Proceeds—For working capital. Office—6102 Harrisburg Blvd., Houston, Tex. Underwriter—None.
Growers Container

Corp., Salinas, Calif.

May 28 filed 600,000 shares of
to

common

stock

(par $1)

offered

be

primarily to individuals and firms who
in or closely allied to the growing and
shipping industry. Price—$3 per share. Proceeds—For
working capital, capital expenditures and other corpo¬
rate purposes. Underwriter—None.
engaged

are

Guaranty Income Life Insurance Co.
Dec.

30

(letter of notification) 24,000 shares of capital
(par $5) to be offered first to stockholders; then
policyholders and the public. Price—$10 per share. Proseeds—For working capital. Address—P. O. Box 2231,
Baton Rouge, La. Underwriter—None.
Stock

Gunkelman

(R. F.)

& Sons, Fargo, N. D.

May 25 (letter of notification) 1,800 shares of 5% cumu¬
lative preferred stock (par $100). Price—$98 per share.
Proceeds —For expenses incident to commercial
grain
business. Underwriter—W. R. Olson
Co., Fargo, N. D.
Hard Rock

Mining Co., Pittsburgh, Pa.
Feb. 20 (letter of notification)
1,000,000 shares of
mon

stock

(par

com¬

cent). Price—Five cents per share.
Proceeds—To purchase machinery and
equipment and
for working capital. .Office —377 McKee
Place, Pitts¬

burgh, Pa.
Hidden

one

March

to

4

f|led 80,561 shares of common stock (no par)
in exchange for common stock of

offered

be

Globe

Metallurgical Corp. at the rate of 0.4666% of one share
for each Globe share. Offer to expire oft July 20, 1956,
unless

\ *
Jan. 27 (letter of notification) 1,000,000 shares of com¬
mon stock
(par 10 cents). Price — 25 cents per share.
Proceeds—For mining expenses. Office—155 West South
Temple St., Salt Lake City, Utah. Underwriter—Melvin
G. Flegal & Co., Salt Lake City, Utah.

Metals, Inc.

Office

—

369-375 DeKalb Ave., Brooklyn 5,

Underwriter—Kamen & Co..

N. Y.

Salvage Co., Inc.
May 4 (letter of notification) 100,000 shares of common
stock (par 10 cents). Price—$3 per share. Proceeds—For
working capital and for purchase of a ship and equip¬
ment.
Office—1214 Ainsley Bldg., Miami, Fla. Under¬
writer—Foster-Mann, Inc., New York, N. Y.
Israel-Mediterranean Petroleum, Inc.
(Panama)
May 29 filed American voting trust certificates for 1,430,shares of common stock (par one cent), of which
1,000,000 certificates are to be offered for public sale,
180,000 shares and certificates therefor are subject to
options and 250,000 shares and certificates therefor are

000

to be offered for sale outside of the United States.

derwriter—H. Kook &

Co., Inc., New York.

Jurassic

assessable

1956 Oil

Exploration Capital Fund
filed $450,000 of participations in this Fund

$15,000.
Proceeds—For payment of various
property and explor¬
atory well costs and expenses. Business—George P. Hill
and Houston Hill are engaged in
exploration for and
production of oil and gas as a joint venture. OfficeFort Worth, Tex. Underwriters
William D. McCabe
and E. S. Emerson, South Texas
Bldg., San Antonio, Tex.
—

Hiskey Uranium Corp.
May 31 filed 500,000 shares of common stock (par 30
cents). Price—$1 per share. Proceeds—For drilling ex¬
purchase of properties and working capital. Of¬
Vegas, Nev., and Salt Lake City, Utah. Under¬

share.

activities.
Colo.

non¬

stock

(par one cent). Price—10 cents
Proceeds—For expenses incident to mining

common

Office

—

Underwriter

West Montezuma St., Cortez,
Bay Securities Corp., New York,

326

—

New York.

it Kansas Power & Light Co.
Price—To
repay

be

bank

supplied
loans and

Lab,

(par $8.75).

by amendment.
Proceeds—To
for new construction.
Under¬

writer—The First Boston

Kay

X.

(par 33 ^ cents). Price—At market. Proceeds—
selling stockholders. Underwriter—Sincere & Co.,

stock
To

111.

Chicago,

(letter of notification) 133,000 shares of com¬
(par 65 cents). Price—$1.50 per share. Pro¬
Office—115 Broadway, New

May 11
mon

stock

ceeds—For working capital.
York 6,

Underwriter—None.

N. Y.

(H. W.) & Co., Inc. : (7/2-5)
.
V
May 25 filed 200,000 shares of class A common stock
(par 50 cents), of which 149,000 shares are to be of¬
fered by the company and 51,000 shares for account
of certain selling stockholders.
Price—$5.75 per shared
Proceeds—To repay $300,000 of bank loans, retire 7,879
shares of 5.2% cumulative convertible preferred stock*
and for working capital. Business—Produces food prod¬
•

Lay

Office

ucts.

—

Underwriter

Chamblee, Ga.

Johnson,

—

Lane, Space & Co., Inc., Savannah, Ga.
Lester

Engineering Co., Cleveland, Ohio

Feb. 24

(letter of notification) 37,500 shares of common
subscription by common;
stockholders of record March 1, 1956 on the basis of one
new share for each 4Y4 shares held. Of the unsubscribed

stock (par $1) to be offered for

to 7,500 shares are to be offered to em¬
Price—$8 per share. Proceeds — For general
corporate purposes.
Office—2711 Church Ave., Cleve¬
up

Underwriter—None.

land, Ohio.

Lewisohn Copper Corp.
March 30 filed

100,000 shares of common stock (par 10

improvements, equipment and for general corporate
purposes.
Office—Tucson. Ariz.
Underwriter—George
F. Breen, New York. Offering—Postponed.

Corp., New York.

San

Diego, Calif.
May 23 filed 364,280 shares of class A common stock (par
$1), of which 307,400 shares are to be offered to the
public and 56,880 shares to certain stockholders. Price—
To be supplied by amendment. Proceeds—$2,455,361 to
be applied to the repayment of notes and bank
loans;
$343,700 to pay accounts payable and commissions pay¬
able; and the balance of approximately $200,000 to be
added initially to working capital to be used for general
corporate

writer—Ackerson-Hackett Investment Co., Reno, Nev.

Co., New York, and Los Angeles, Calif.

purposes.

June

filed

21

Underwriter—Shearson, Hammill &

600,000 shares of

common

10

stock (par

cents), of which 600,000 shares are to be sold for ac¬
count of the company and 90,000 shares for selling stock¬
holders.

Price—$1 per share, by amendment. Proceeds
exploration and development and other general
corporate purposes1: Underwriter—George A. Searight,

—For

New York

City.

Lone Star
June

filed

1

Fund, Dallas, Texas
125,000 shares of Balanced Income Series;

125,000 shares of Insurance Growth Series; and
shares

of

Industrial
—

Growth

Series.

Price—At

For investment. Underwriter

—

125,000
market.

All States

Management Co., Dallas, Texas.

-

/

Long Island Lighting Co.
April 5 filed 120,000 shares of cumulative preferred stock,
series G (par $100). Price—To be supplied by amend¬
ment.
Proceeds—To repay bank loans.
Underwriters—
Blyth & Co., Inc., The First Boston Corp. and W. C.
Langley & Co., all of New York. Offering r— Postponed
because of present unsatisfactory market conditions.
/
Los Angeles Airways, Inc., Los Angefes, Calif.
April 23 (letter of notification) 645 shares of common
stock (par $10). Price — $54 per share. Proceeds — To
Clarence M. Belinn, the selling stockholder. Office—5901
West Imperial Highway, Los Angeles 49, Calif. Under¬
writer—Dean Witter &

Lost

Oct.

Co., Los Angeles, Calif.

Canyon Uranium & Oil Co.

6

(letter of notification) 3,000,000 shares of non¬
(par one cent). Price—10 cents
per share.
Proceeds—For expenses incident to mining
operations. Office — Simms Bldg., Albuquerque, N. M.
assessable capital stock

Underwriter—Mid-America Securities
Lake

Inc. of

Utah, Salt

City, Utah.

Lumberman's

Investment &

Mortgage Co.

May 2 filed 50,000 shares of

common stock (par $10).
Price—$12 per share. Proceeds—For working capital and

general

(7/18)

June 25 filed 270,000 shares of common stock

fices—Las




Price

be the market

price on the American Stock Ex¬
change. Proceeds — For carrying out the exploratory
drilling and development of presently licensed acreage,
operations and expenses of the company, and acquisition,
exploration and development of additional acreage. Un¬

per

New York.

Kropp Forge Co.
June 4 (letter of notification) 18,804 shares of common

Proceeds

New York.

Isthmus Steamship &

—To

derwriter—Ira Haupt & Co.,

Industries Corp.

Plastic

Oct. 12 (letter of notification) 150,000 shares of common
stock (par 10 cents).
Price—$2 per share. Proceeds—
For advances to Arliss Co., Inc. for purchase of equip¬

ment, etc.

ceeds—To

it Lithium Developments, Inc., Cleveland, Ohio

extended.

International Basic

International

filed

20

(par $1).

cents). Price—To be supplied by amendment. Proceeds
—For exploration and evaluation of leasehold properties,

Iron Corp.

Inter lake

Dome

to be offered for public sale in minimum units of

penses,

withdrawn as underwriter; new one to be named.

Minerals, Inc., Cortez, Colo.
Aug. 26 (letter of notification) 2,855,000 shares of

& Hill
13

Price—
Proceeds—For general corporate

share).

Underwriter—Graham & Co., Pittsburgh, Pa.

Exploration Co., Inc.
May 15 (letter of notification) 3,000,000 shares of capital
stock. Price—At par (10 cents
per share).
Proceeds—
For the development of oil and
gas properties. Office—
219 E. Fremont
Ave., Las Vegas, Nev. Underwriter—
National Securities Co., Las
Vegas, Nev.
Hill

of 6% convertible preferred

Underwriter—Alexander Watt & Co., Inc., has

purposes.

150,000 shares of class A common stock
Price—To be supplied by amendment. Pro¬
pay loans from banks and factors; and for
working capital and other corporate purposes. Business
—Prefabricated homes, house trailers and lumber. Un¬

June

portion,
ployees.

Inc., Belleville, N. J.

stock (cumulative if and to the extent earned).
At par ($5 per

,

Co., Hollywood 28, Calif.

&

Insulated Circuits,

preferred and common stockholders of National Alfalfa
Dehydrating & Milling Co. of record June 20, 1956 on
the basis of one such unit for each preferred of National
and one such unit for each 10 National common shares;

ing capital.

The First

Halsey, Stuart & Co. Inc.;

bidders:

White, Weld & Co. and Merrill Lynch,
Pierce, Fenner & Beane (jointly); Harriman, Ripley &
Co. Inc. and Glore, Forgan & Co. (jointly); Union Se¬
curities Corp. Bids—Expected to be received on July 24.

pay

—

Lawyers Mortgage & Title Co.

$20,000,000 first mortgage bonds due 1986.

June 27 filed

be supplied
by amendment.
stockholders.
Business — Drapery hardware.
Underwriters
Cruttenden & Co., Chicago, 111.; and

selling

(7/24)

it Illinois Power Co.

^Giffen Industries, Inc.
June 18

stock

& Co.),

Price—To

it Knox Corp., Thomson, Ga.

(letter of notification) 120,000 shares of com¬
(par 10 cents). Price—$1.50 per share. Pro¬
ceeds—For exploration and development expenses. Un¬
derwriter — Fenner Corp. (formerly Fenner-Streitman
mon

(N. J.) , New York
shares of common stock (par 10
cents). Price—$1 per share. Proceeds—For plant facil¬
ities, survey of property and underground development.-;
Underwriter—None. Maurice Schack, Middletown, N. Y.,
Is President. Statement effective March 11.
filed

<rV\

$5).
Proceeds—To

Smith, Hague, Noble & Co., Detroit, Mich.

March 7

General Uranium Corp.
18

'..-..r

(7/11)

filed 120,000 shares of common stock (par

June 21

(7/2)

Richmond Hill, New York City. Un¬
D. Blauner & Co., Inc., New York

•

Underwriter—Garnett H. Davis, President.

Atlanta, Ga.

writer—None.

City.

Jan.

(par one cent). Price—$1 per share. Proceeds—
working capital, etc. Office—295 Hayden St.; N. W.,

stock

For

Inc., Montgomery, Ala.
Jan. 5 filed 125,000 shares of common stock (par $1).
Price—$5 per share. Proceeds — To expand operations
of subsidiary and increase investment therein. Under¬

(letter of notification) 100,000 shares of com¬
mon stock (par 25 cents).
Price—$3 per share. Proceeds
—For machinery and equipment, to repay bank loan
and advances and for working capital, etc.
Office —
130-11 90th Ave.,

it Keefe Chemical Manufacturing Corp.
«7y
June 13 (letter of notification) 50,000 shares of common

^Kirsch Co., Sturgis, Mich.

Hometrust Corp.,

11

derwriter—Milton

—

Calif.

5%

•

P. O. Box 308, Winterhaven,
Underwriter—Arthur B. Hogan, Inc., Hollywood,
Address

expenses.

Calif.

preference stock (no par) and 59,445 shares
(par $1) to be offered in exchange for

of common stock

June

Mining Co., Winterhaven, Calif. ..V

Holden
-

corporate

purposes.

Office

—

Denver,

Colo.

Underwriter—None.
Mammoth Milling & Uranium Co., Inc.
May 11 (letter of notification) 3,000,000 shares of capital
stock. Price—At par (10 cents per share).
Proceeds—
For mining expenses.
Office—205 Carlson Bldg., Pocatello, Idaho. Underwriter—Columbia Securities Co., Inc.
of California, Beverly Hills, Calif.

Manufacturers Cutter Corp.
Oct. 18

(letter of notification) 300,000 shares of class A
stock. Price—At par ($1 per share). Proceeds—
To repay loans, and for new equipment and working
capital. Business—Cutting tools. Office—275 Jefferson
common

St., Newark, N. J. Underwriter—Paul C. Ferguson & Co,
same city.

I

Volume 183

Number 5546.... The Commercial and Financial Chronicle

-

Marquardt Aircraft Co., Van Nuys, Calif..

For

mining expenses. Office
Denver, Colo. Underwriter
city. .
\

June,25 filed 42,000 shares of
capital stock
be offered for
subscription

(par $1) to
by stockholders on a pro
rata basis.
Price—To be supplied by amendment. Pro¬
ceeds—From sale of stock, together with funds from
private placement of $2,000,000 of first mortgage 5Vi%

if Mechanics

..........

Co.

amount

(in denominations of $10 each). Proceeds—For
working capital and general corporate purposes. Office
Newark

Ave., Jersey City, N. J.

None.

•

None.

Underwriter—

.

May 24 (letter of notification) $100,000 of 12
debentures.

capital.
Calif.

Price

—*

Office—333
Underwriter

At

Proceeds
Montgomery St.,

(par $2)

Guardian

—

5%

year

—

-'

>.

common

Y,

Y

•

and devel¬

mercial-development of the results obtained. Office—
Cambridge, Mass. Underwriter—Paine, Webber, Jack¬

per

held; rights to expire on July 3. Price
Proceeds—For advances to
subsidiaries;

share.

loans; for improvement

son

Mica & Minerals Corp. of America

••V

June

13

filed

570,000 shares of

Price—$1

poses.

Underwriter

—

State

Peter

—

(W. H.) & Co., Wilkes-Barre, Pa.
20,000 shares of common stock (par $5).
Price—$25 per share. Proceeds — For working capital.

Jan.

mining expenses. Office—728 Symes Bldg., Den¬
ver 2, Colo. Underwriter—General
Investing Corp., New
York, N. Y.
'/VI

April 23 (letter of notification) 7,475 shares of preferred
stock (par $20) and 29,900 shares of common stock
(par
$5) to be offered in units of one preferred and four com¬
mon shares.
Price—$40 per unit. Proceeds — For pur¬

Pacific Finance

machinery and equipment. Office—New Albany,

cumulative

convertible

preferred

26

Chemical

filed

of

8%

'to be offered

common

stock

(par $2)

pursuant to the company's 1956 Employees'

Stock Plan.

Mormon Trail
Feb. 9

stock

Mining Corp., Salt Lake City, Utah
(letter of notification) 3,000,000 shares of capital

(par

one

cent).

Price—10 cents

per

share.

Pro¬

ceeds—For mining expenses. Office—223

Bldg., Salt Lake City, Utah.
Investment, Inc., Las Vegas, Nev.

eum

Phillips Petrol¬
Underwriter—Frontier

if Nash Finch Co.
7 (letter of
notification)

June

1,000 shares of common
(par $10). Pries—At market. Proceeds—To sell¬
ing stockholder. Underwriter
J. M. Dain & Co.,
Inc.,
stock

—

...Minneapolis, Minn.
if National By-Products, Inc.
19 (letter of notification)
2,000 shares of common
stock (par $1).
Price—$5 per share. Proceeds—To pay
estate

taxes.

•Des Moines, Iowa.

"Inc., Des

Office—800

Bankers

Trust

Bldg.,
Underwriter—T. C. Henderson & Co.,

Moines, Iowa.

National

Consolidated Mining Corp.
(letter of notification) 87,000 shares of common
(par one cent). Price—$3 per share. Proceeds—
For mining expenses.
Address — Salida, Colo. Under¬

May 9

stock

writer—Pummill Enterprises, Houston, Tex.
f

National Lithium Corp., Denver, Colo.
Dec. 27 (letter of

"ftock

(par

one

Offering—Indefi¬
.

Electric Co.

(par $25)

June

20

shares

construction program. Underwriter—Blyth

Co., Inc., San Francisco and New York.
Pacific Power &

.

Light Co.

(7/11)

June 7 filed

341,550 shares of common stock (par $6.50)
to be offered for subscription by common stockholders
of record July 11, 1956 at the rate of one additional share
for each 10 share? then held; rights to expire on Aug. 2,
1956. Price—To be set by board of directors. Proceeds—
For construction program.
Underwriter—To be deter¬
mined by competitive bidding.
Probable bidders: Leh¬
man
Brothers, Union Securities Corp., Bear, Stearns &
Co. and Dean Witter & Co. (jointly); Kidder, Peabody
& Co. Bids—Tentatively expected to be received up to
11

a.m.

(EDT)

on

Pan-Israel Oil

July 11.
Co., Inc.

notification) 300,000 shares of common
cent). Price—$1 per share. Proceeds—




Porter-Cable

expansion
Fairlawn, N. J. Under¬

Co., New York.

Statement has

been

Machine Co.

(letter of notification) 15,000 shares of common
stock (par $10) to be offered for subscription by stock¬

holders at rate of

Price—$20

one

new

share for each 14 shares held.

share. Proceeds—For working capital and
expansion program. Office—1714 No. Salina St., Syra¬
cuse, N. Y. Underwriter—George D. B. Bonbright & Co.,.
per

Rochester, N. Y.

430,000 shares of common stock (par one cent), of which
1,000,000 certificates are to be offered for public sale,
180,000 shares and certificates therefor are subject to
options and 25,000 shares and certificates therefor are to
be offered for sale outside of the United States. Price—
To be the market

oil and

price on the American Stock Exchange.
exploration, drilling and development of
acreage in Israel. Underwriter—H. Kook &

gas

Co., Inc., New York.

Peabody Coal Co., Chicago,
27

if Protective Foods Corp.
(letter of notification) 19,857 shares of 80 cents

June 22

cumulative preferred stock

(par $5) and 39,714 shares oF
(par $1) to be offered in units of one
and two shares of common. Price—$15
per unit. Proceeds — For working capital. Office — 45GA
West 38th St., Minneapolis 16, Minn.
Underwriter—
stock

common

share preferred

None.

'

Prudential

Federal

March 21 (letter of

Uranium Corp.

notification) 6,000,000 shares of

stock (par two cents).

mon

R.

and

Price—Five cents

per

coin-

share.

Underwriter—Skyline
.

,v

P.

Minerals, Inc., Reno, Nev.
Feb.' 14 (letter of notification) 500,000 shares of common,
stock.
Price—At par (10 cents ner share).
Proceeds—
For mining expenses.
Office—5~<S Mill St., Reno, Nev;
Underwriter—Utility Investments, Inc., Reno, Nev.
June

Corp.

8

(letter of notification) 171,000 shares of capital
(par 10 cents). Price—$1.75 per share. Proceeds

stock

—To pay

sign.

obligations, to buy equipment and inventory,
working capital. Business — Manufacture and

Office

Expected at end of July.
Radium

Hill

Uranium, Inc., Montrose, Colo.

June 14 (letter of notification) an undetermined number
of shares of common stock which when sold at the'
will

market

bring

in an aggregate amount of $42,500.
mining expf.ises. Office—Bryant Bldg.,
Montrose, Colo. Underwriter—Shaiman & Co., Denver,
Proceeds—For

Colo.
Rainbow Uranium Co., Denver, Colo.
May 8 (letter of notification) 3,000,000 shares of common
stock (par one cent). Price—10 cents per share. Proceeds
—For mining expenses. Office—316 Symes Bldg., Den¬

Colo. Underwriter—Carroll & Co., Denver, Colo.

ver,

(Fred P.), Inc., St. Louis, Mo.
150,000 shares of 5Vz% cumulative pre¬
Price—To be supplied by amend¬
ment. Proceeds—To repay bank loans incurred by com¬
pany to redeem and cancel all of the issued and out¬
standing shares of 4% and 7% preferred stock; and for
expansion program. Underwriter—Edward D. Jones A
Co., St. Louis, Mo. Statement may be withdrawn as com¬
pany may be acquired by ACF-Wrigley Stores, Inc.
Rapp

March

filed

2

ferred stock (par $10).

Rare

Metals

Texas
June

Corp. of America, El Paso,

(7/9)

filed

15

1,400,000 shares of capital stock (par $1)
subscription by common stockholders

for

to

be

offered

of

El

Paso

Natural

the

basis of

Co.

on

and

shares

or

or

Co.

and

share

of

Natural

Western
Rare

portion thereof of El Paso

share

of

Rare

Metals

stock

portion thereof of Western

Gas

Metals stock for
common

for

each

11

Natural Gas Cck.

of

El

to

stock.

a

Western.

remainder

The

will

be

used

pay

Paso

and

for exploration, acquisition and development of
mining and milling properties and for working capital.
Underwriter—White, Weld & Co., New York.
Rea

210,823 shares of common stock being
offered for subscription by stockholders of record Jan.
30, 1956 on the basis of nine additional shares of common
stock for each 100 common shares held and nine new
shares of common stock for each 40 shares of preferred
stock held. This offer will not be made to holders of the

one

Gas
one

The offering is expected to be made
two-week period commencing in July. Price
—To be supplied by amendment.
Proceeds—$1,250,009
to be used to pay outstanding 4% short-term notes and
the then outstanding 3V2% and 3%% subordinated notes
common

during"

III.

filed

interchangeable letter Radaliter
St., Long Island City, N. Y.
Brothers, New York/ Offerings-

41-18 38th

—

Underwriter—Vickers

stock

May 29 filed American voting trust certificates for 1,-

Feb.

Proceeds—For
—

June 14

each five shares

(Panama)

Proceeds—For

June

Federal

&

stock

Co.

400,000 shares of

(Calif. )

12, 1956 on the basis of one new share
held; rights to expire on July 2,
Price—$45 per share. Proceeds—To reduce bank

each

1956.

and processing silica. Office—2508 Auburn
Ave., Cincin¬
nati, Ohio. Underwriter—None.

if Monsanto

record

loans and for

(par $50) and
3,000 shares of common stock (no par) to be offered in
units of one share of preferred and one share of common.
Price—$60 per unit.
Proceeds — For mining expenses

"June

of

Mutual

for

Mohawk Silica Co., Cincinnati, Ohio
March 23
(letter of notification) 3,000 shares

Corp.

being offered for subscription by common stockholders

Phoenix, Ariz.

Office

sale of color-illuminated

N. M.

May 22 filed 812,791 shares of common stock

—

Underwriter—Arizona

Gas &

Pacific

fMay 24 (letter of notification) $300,000 of trust fund cer¬
tificates. Price—At par ($2 per unit). Proceeds
To
provide capital and surplus funds for the activation of

&

withdrawn.

.and for

Co., Inc., and Hornblower & Weeks.
nitely postponed.

Modern Pioneers' Life Insurance Co.

share).

per

working capital.

Radaiite

April 10 filed $25,000,000 of debentures due 1971. Price
—To be supplied by amendment. Proceeds—For reduc¬
tion of short-term bank loans.
Underwriters—Blyth &

Underwriter—LewiS| & Co., Jackson, Miss.

$8

writer—Shields

New York

(letter of petrification) 2,000,000 shares of common
stock (par five cents)."" Price—15 cents per share. Pro¬
ceeds—For exploration and development and other gen¬
eral corporate purposes. Underwriter—Philip Gordon A
Co., New York.

Mission Appliance Corp. of Mississippi

company.

(par-$l).

Nov. 8

York.

Benefit Insurance Co.,

stock

Oak Mineral & Oil Corp., Farmington,

$2,400,000 the Chavin .lead-zinc-copper-silver mine
Peru, and for general corporate
purposes.
Underwriter — Gearhart & Otis, Inc., New

this insurance

and
.

at

Securities, Inc., Denver 2, Colo.

^

shares of Boston Fund, Inc.

located in South Central

.

common

f

Plans, Systematic Investment Plans, and Systematic In¬
vestment Plans with Insurance, for the accumulation of

(8/1)
2,500,000 shares of common stock (par
Price—$1.50 per share. Proceeds—To acquire

filed

for

Miss.

(7/19)

filed $15,000,000 of Single Payment Investment

June 25

^Minerals, Inc., New York

chase of

—

(expected

Proceeds—For mining expenses.

American Planning Corp.,

if North

—

cent).

Kingston, Pa.

Price—To be supplied by amendment.^ Proceeds—jfpr
mining machinery and working capital. Office—Cleve¬
land, Ohio. Underwriters—Dominick & Dominick, New
York; and Ball, Burge & Kraus, Cleveland, Ohio.

par)
30,000 shares of $6 dividend preferred stock (no
par). The company does bot intend presently to sell
more stock than is
required to raise, at most, $2,700,000.
Price
$100 per share. Proceeds — For construction,
working capital, reserve, etc. Underwriter—None.
and

one

A. E. Nicholson Jr. of

if North American Coal Corp
June 25 filed 250,000 shares of

'

Midland General Hospital, Inc.,
Bronx, N. Y.
Jan. 12 filed 24,120 shares of common stock
(no

22

the company and 59,473 shares for account of two selling
stockholders.
Price
To be 'supplied by amendment

filed

is President.

'

June

16

Underwriter—None.

—For

.

Underwriter—Birken-

Nicholson

Mid-Continent Uranium Corp.
May 31 (letter of notification) 100,000 shares of common
stock (par one cent). Price—50 cents
per share. Proceeds

■'%.

St., Salt Lake City, Utah.
Co., Denver, Colo.

mayer &

Morgan & Co., New York.

-ft

June

Curtis, Boston, Mass., and New York, N. Y.

Niagara Uranium Corp., Salt Lake City, Utah
April 3 (letter of notification) 2,400,000 shares of com¬
mon stock
(par 3% cents). Price—10 cents per share.
Proceeds
For mining expenses. Office — 345 South

per

Office—Wilmington, Del.

&

(7/16)

common stock
(par 10
share. Proceeds—To repayment of
loans, to exercise option to purchase property now under
lease, for construction of a plant, and for further explo¬
ration, working capital and other general corporate pur¬

cents).

Popular Merchandise Co., Inc.
8 filed 259,473 shares of common stock (par $1>»
of which 200,000 shares are to be sold for account of

stock

opment costs; and other corporate purposes. Underwriter
—-None.

each three shares

to repay current bank

8,000 shares of class A
(par $1). Price—At the market (maxi¬
Proceeds—For working capital. Office—34tb
St. & 22nd Ave., North, St. Petersburg, Fla. Underwriter
—Eisele & King, Libaire, Stout & Co., New York.
>
stock

$6).

mum

June 21

May'18; filed 250,466 shares of capital stock (par tlO
cents) being offered for subscription by stockholders' of
record June 15, 1956, on the basis of two new
shares for

Industries, Inc., St. Petersburg, Fla.

(letter of notification)

•

A

if National Research Corp. (7/10-17)
filed $6,000,000 of convertible subordinated de¬
bentures due July 1, 1976.
Price — 100% of principal
amount.
Proceeds—$3,000,000 in payments of capital
stock of NRC Metals Corp., a wholly-owned subsidiary;
for advances to said subsidiary and for general corporate
purposes.
Business—Scientific research and the com¬

Meroast Corp., New York

16

common

and

postponed.

Francisco, Calif.

-—$3

Pinellas
Feb.

50,000 shares of class B common stock
(par $2). Price—To be supplied by amendment. Pro¬
ceeds — To selling stockholders. Office — Little
Rock,
Ark.
Underwriter—Equitable Securities Corp., Nash¬
ville, Tenn., and New York, N. Y. Offering—Indefinitely

For working
San Francisco,
Securities Corp., San

par,

Houston, Tex.

,

National Old Line Insurance Co.
Nov. 15 filed 50,000 shares of class

Mercantile Acceptance Corp. of California

-

to fcixsellihg stockholders! Office—Scott St. and Holmes
Road, Houston, Tex. Underwriter—Rotan, Mosle & Co^

(par $1) and 40,000 shares of Class B stock (par
$1) to be offered for subscription by Class A and Class
B stockholders of record Feb. 1, 1956 on a l-for-4 basis.
Price—$2 per share. Proceeds—For vacuum metallizing,
conditioning, slitting and inspection machinery. Office—
1145-19th St., N. W., Washington, D. C. Underwriter—

June 18, (letter of notification) $250,000 of 7%
20-year
debentures due July 10, 1976. Price—100% of
principal

—586

.

Metallizing Corp.
(letter of notification) 24,000 shares of Class A

stock

1

......

.

June 4

II

Underwriter—None.

Finance

Perforating Guns Atlas Corp.
,
(letter of notification) 12,500 shares of common
stock (par $1). Price—$24 per share. Proceeds—To go1

..

Investment

National

bonds, for capital improvement, equipment and general
corporate purposes.

556 Denver Club Bldg.,
Service Co.,

—

same

March 5

4§

(3113)

(J. B.)

Co., Inc., Santa Monica, Calif.

V*

May 29 (letter of notification) 50,.000 shares of common
stock

Price—$6 per share. Proceeds.
working capital. Office—1723 ClovMonica, Calif. Underwriter—ShearHammill & Co., Beverly Hills, Calif.
(par $5) per share.

—For inventory and

erfield Blvd., Santa
son,

if Reid

Laboratories,

6,492,164 shares of common stock issued for the acquisi¬
tion of the Sinclair properties under an offer of June
28, 1955. The warrants will expire on Dec. 31, 1957.

June

(letter of notification) 297,000 shares of capital

Price—At

N.

par

($5

per

share). Proceeds—For working

capital and general corporate purposes.
None. Statement effective March 27.

Underwriter—

stock.

13

Price—At

working

par

capital, etc.

W., Atlanta, Ga.

Inc.
($1

per

share).

Proceeds—For

Office—2965 Nancy Creek Road,

Underwriter—None.
Continued

on

page

46

46

<;

The Commercial and Financial Chronicle

(3114)

Continued jrom

page

Sperry Rand Corp.

45

June

Reinsurance Investment Corp., Birmingham, Ala.
May 25 filed 2,985,000 shares of common stock, of which
2,485,000 shares are to be offered to public and 500,000
shares

to

are

reserved

be

exercise of options to

on

be

granted to employees of company. Price—To public, $2
per share. Proceeds—The first $3,000,000 will be used to
purchase or organize a legal reserve life insurance com¬
pany to be known as the "Reinsurance Company of the

South"; the remainder will be used for other corporate
purposes. Underwriter—Luna, Matthews & Waites.
Reno

Hacienda, Inc., Inglewood, Calif.

Dec. 19 filed 4,000,000 shares of common stock. Price—
At par ($1 per share). Proceeds—To purchase real prop¬

erty, for construction of
and for general

&

ton

corporate

buildings
purposes.

and other facllittet
Underwriter—Wil¬

Bayley Investment Co.

Republic Cement Corp., Prescott, Ariz. (7/18)
April 20 filed 965,000 shares of capital stock. Price—$10
per share. Proceeds—For construction of plant, working
capital and general corporate purposes. Underwriter—
Vickers Brothers, New York.

Rogosin Industries, Ltd.
June 4 filed 75,000

stock (par $100)
and $7,500,000 of 20-year 3% debentures due May
1,1976,
This includes 5,000
common
shares and $500,000 of
common

debentures to be received by Beaunit

Mills, Inc. in

pay¬

for rights to manufacture viscose rayon yarns.
Price—At par or principal amount. Proceeds—For cap¬
ment

ital

expenditures,

working capital and

San Jacinto Petroleum

June 20

filed 298,410

to

be

of

record

each

offered

for

for

July

four

12

Corp.

(7/13)

snares of common

stock

(par $1)
stockholders

subscription by common
on the basis of one new

shares

amendment.
and

other corporate

Underwriter—None.

purposes.

held.

Price

To

—

be

share

for

supplied by
obligations

Proceeds—To discharge certain

general corporate purposes.

Office — Houston,
Underwriter—White, Weld & Co., New York.

Tex.

Schwartz Carbonic

Co., El Paso, Texas
Feb. 27 (letter of notification) 30,700 shares of common
etock to be offered for subscription by stockholders on
basis of 0.6158

Price—$7.50

share for each

new

common

share held.

share.

Proceeds—For expenses incident
to manufacturing and sales of carbon dioxide.
Office—
per

1600 East Eleventh St., El Paso, Tex. Underwriter—None.

Securities Acceptance Corp.
June 8 (letter of notification) 5,000 shares of cumulative
5% preferred stock (par $25). Price—$26.25 plus accrued
dividends from April 1, 1956.
Proceeds — For working
capital. Office—304 South 18th St., Omaha, Neb. Under¬
writers

Cruttenden & Co., Chicago, 111.; WachobCorp., Omaha, Neb. and The First Trust Co. of
Lincoln, Neb., Lincoln, Neb.
—

Bender

Security Casualty Insurance Co.
|
May 10 (letter of notification) 30,000 shares of common
stock (par 30 cents) and 90,000 shares of
participating
preferred stock
share of

one

Price—$4

(par 50 cents)

common

cents)

record

of

for

July

1956, on the basis of
one new share for each 10 shares held; rights to expire
on July 25,
1956. Price—To be supplied by amendment.
Proceeds—To

reduce

bank

9,

loans

to be offered in units of

and three shares of preferred stock.

and

both of New York.

Fenner & Beane,

Strategic Metals, Inc., Tungstonia, Nevada
4 (letter of notification) 1,200,000 shares of com¬
mon
stock.
Price—25 cents per share.
Proceeds—For
expenses incident to mining operations.
Underwriter—
Jan.

R.

Developers, Inc., Spokane, Wash.
Feb. 2 (letter of notification) 920 shares of 6% cumula¬
tive non-voting preferred stock ($100 per share) and
2,160 shares of common stock (par $10). Price—Of pre¬
ferred, $100 per share; and of common, $15 per share.
Proceeds—For improvements and working capital.
Of¬
fice—909 West Sprague Ave., Spokane, Wash.
Under¬
writer—W. T. Anderson & Co., Inc., Spokane, Wash.

the

Proceeds—To

market.

Pa.
stock. Price—At

selling stockholders. Under¬

Corp.

(Utah)

May 7 (letter of notification) 300,000 shares of common
stock. Price
At par ($1 per share).
Proceeds — For
mining expenses. Office—Continental Bank Bldg., Salt
—

Lake

City, Utah. Underwriter
Inc., Salt Lake City, Utah.

—

Coltharp Investment

T

Tennessee Gas Transmission Co.

Price—At

expenses.

Pacific Power Co.

June

1 filed 62,576 shares of common
stock (par $7.50)
being ofered for subscription by common stockholders
of record June
21, 1956 at the rate of one new share for
ten

shares

then

held

privilege); rights to expire
per

share.

struction

(with
on

an

July 6,

oversubscription
1956. Price—$20

Proceeds—To repay bank loans made for con¬
Underwriters
Stone & Webster

purposes.

15 filed

$30,000,000 of debentures due Jan. 1, 1977.
supplied by amendment. Proceeds—Toward
payment of outstanding short-term notes issued under
the

Revolving

Credit Agreement.

Underwriters—Stone

& Webster Securities Corp.; White, Weld &
Halsey, Stuart & Co. Inc., all of New York.

Co.;

and

Teton Oil & Minerals Co.

May 29 (letter of notification) 3,000,000 shares of com¬
mon stock
(par one cent). Price — 10 cents per share.
Proceeds—For mining and drilling expenses. Office—750
Equitable Bldg., Denver, Colo. Underwriter—Columbia
Securities Co., Denver,

Colo.

Tex-Star Oil & Gas

Price

—

At the market.

Proceeds

—

(par 10

To selling

Underwriter—None.

Sonic

Research Corp.\
(letter of notification) 90,000 shares of common
(par $1).
Price—$2 per share.
Proceeds—For

June 20
stock

cost
the

of

negotiating

demonstration

additional

license

agreements

and

of

equipment to be licensed. Office
—15 Chardon
St., Boston, Mass. Underwriter—Jackson
& Co., Inc., Boston, Mass.
•

Southern

June 4

Power Co.

filed

175,000 shares of common stock (par $1).
per share.
Proceeds—To retire bank loans

Price—$19
and

Nevada

for

construction

program.

Underwriters—William
Co., Los Angeles, Calif.; and Hornblower &

R. Staats &

Weeks, New York. Offering—Expected today (June
28).
Southwestern Oklahoma Oil Co., Inc.
Feb. 27 (letter of
notification) 15,001 shares of common
etock (par 10
cents) to be offered for subscription by
stockholders. Price—$10 per share.
Proceeds—For ex¬
penses incident to development of oil and
Office—801

gas properties

Washington Bldg., Washington, D. C. Under¬

writer—None.

^

Corp., Dallas, Texas
(letter of notification) 99,990 shares of common
(par $1). Price — $3 per share. Proceeds—For
working capital and general corporate purposes. Office
—Meadows Building,
Dallas, Texas.
Underwriter —
Thomas F. Neblett, Los Angeles, Calif.

June

8

filed

Resources, Inc., Santa Fe, N. M.

1,000,000 shares of

common

stock

(par 25

cents). Price—$5 per share. Proceeds—To exercise
tions, purchase additional properties and for

op¬

general

corporate
rities Co.,

purposes.

Underwriter—Southwestern

Dallas, Texas.




agreed

not

exercise

to

their

Casualty is the owner of 510,476 shares (51.047%) and
Continental Assurance Co. 240,000 shares (24%) of the

outstanding United States Life Insurance Co. stock. Price

Proceeds—To company, to be invested
producing securities. Underwriters—William
Co., Chicago, 111.; and The First Boston Corp.
and Carl M. Loeb, Rhoades & Co., both of New York.
income

Blair

•

&

United

To

—

Shoe

States

fhed

6

June

be

(7/3)

Corp.

shares

170.000

of

common

stock

(par $1).

Proceeds

supplied by amendment.

—

To

stockholders. Office—Cincinnati, Ohio. Under¬
Lynch, Pierce, Fenner & Beane, New

York.

Universal

Fuel

5V2%

—For construction

program.

Underwriter—The First of

Corp.

Uranium Exploration Co., Salt

Lake City, Utah

Feb. 13

(letter of notification) 77,875 shares of common
stock (par 25 cents).
Price—$1 per share.
Proceeds—
For mining expenses.
Office—538 East 21st South St..
Salt Lake City, Utah.
Underwriter — Pioneer Invest¬
ments, Salt Lake City, Utah.
Utco

Uranium

Corp., Denver, Colo.

30

Jan.

(letter of
stock, which

mon

underwriter.

mining

first

notification) 200,000 shares of com¬
covered by an option held by the

are

Price—10

cents per share.
Proceeds—For
Office—310 First National Bank Bldg.,
Underwriter — Amos C. Sudler & Co..

expenses.

Vance

Jan.

Industries,

Inc.,

Evanston,

III.

24

(letter of notification) 7,000 shares of common
(par one cent). Price—$7 per share. Proceeds—

stock
To

Co., Phoenix, Ariz.

Chemical

&

May 17 (letter of notification) 300,000 shares of capital
stock. Price—At par ($1 per share). Proceeds—For min¬
ing expenses. Office—825 Broadway, Farrell, Pa. Under¬
writer—Langley-Howard, Inc., Pittsburgh, Pa.

Denver, Colo.
same city.
of

bonds dated Jan. 1, 1956 and due 1958-1980,
Price—100% and accrued interest. Proceeds

inclusive.

• U-Kan

Minerals, Inc., Topeka, Kansas
(letter of notification) 599,600 shares of

June 19
stock

(par

10

ceeds—For

cents).

Topeka, Kan.

Price—50

cents

common

Pro¬
Office—204 Central Bldg.,
Underwriter—E. R. Bell Co., Kansas City,

mining

per

share.

expenses.

Mo.

stockholders. Office — 2108 Jackson Ave.,
Underwriter—Arthur M. Krensky & Co.,

selling

Chemical

Secu¬

&

Materials Corp.

May 25 filed 200,000 shares of common stock (par $10).
Price—To
be
supplied by amendment.
Proceeds—To
selling stockholders. Office—Chicago, 111. Underwriters
—Allen & Co., Bache & Co. and Reynolds & Co.,
Inc.,
all of New York.
•

Union

Offering—Temporarily postponed.

Electric

Co., St. Louis, Mo. (7/17)
$40,000,000 of first mortgage bonds due
Proceeds—To repay bank loans and for
construction program.
Underwriter—To be determined
by competitive bidding. Probable bidders: Halsey, Stu¬

June

July

art

&

Co.

• Union
Mines, Inc. (7/2)
j
May 17 filed 400,000 shares of class A stock (par 10<5).
Price—$2 per share.
Proceeds—To pay indebtedness
and for exploration and
development costs.
Office—

Grand

Junction, Colo. Underwriter—Milton D. Blauner
Co., Inc., New York.
Union

Tank

1956

shares

$29
eral
&

shares

per

notification)

(letter of

of

12,000

shares-of $1.25

stock

(par $1) being offered in ex¬
change for 5% cumulative preferred stock (par $100) of
The Prosperity Co. on the basis of four Ward preferred
shares, one-half share of Ward common stock a tad $1.05
in

common

cash for each Prosperity preferred

share. This offer,

which is limited to acceptance by 3,000 Prosperity pre¬
ferred shares, is alternative to the right to receive in¬

•

Prosperity preferred share.

Washington Natural Gas Co.

June

18

(letter of notification)

stock

mon

ceeds— For

(7/3)

187,500 shares of com¬

(par 10 cents). Price—$1.25 per share. Pro¬
working capital. Office — 217 Washington

Clarksburg, W. Va. Underwriters—Barrett HerCo., Inc., New York, N. Y. and Ross, Borton &
Simon, Inc., Cleveland, Ohio.

Ave.,
rick

&

West Jersey

on

share.

stock

Title & Guaranty Co.

(letter of notification) 10,000 shares of common

Cnar

offered for

$101
a

of

which

8,000

shares

are

first

to

be

period of 30 days in exchange for outstand¬

ing preferred stock on a 2-for-l basis; any shares re¬
maining will be offered to common stockholders. Price—

$25

per

N/J.
•

share.

Office—Third and Market Sts., Camden,

Underwriter—None.

Western

Massachusetts

Companies

.May 29 filed 102,237 shares of common stock (par $1),
of which 92,237 shares are being offered for subscription
by common stockholders of record June 21 on the basis
of one new share for each 12 shares held; rights to expire
on

July

9.

The remaining

10,000 shares are being of¬

employees. Price—$37.50 per share. Proceeds
repay bank loans and for construction program.
Underwriters—The First Boston Corp. and White, Weld
to

—To

capital stock (no par) being
subscription by stockholders of record June
the basis of one new share for each seven

held; rights to expire

Jan. 23

fered

Car Co.

June 4 filed 335,714 shares of

22,

9

cumulative preferred stock, series A (par $25) and 1,500

1986.

.

•

Industries Corp.

Ward

March

filed

18

1,

Inc.; Lehman Brothers and Bear, Stearns &
Co. (jointly); Blyth & Co., Inc. and Union Securities
Corp. (jointly); The First Boston Corp.; White, Weld &
Co. and Shields & Co. (jointly).
Bids—Expected to be
received up to 11 a.m
(EDT) on July 17.

&

Inc., Chicago, 111.

stead $100 per

Union

offered for

Southwestern

have

standing, 310,476 shares are to be sold for the account
of Continental Casualty Co. and 239,588 shares for the
account
of
Continental
Assurance
Co.
Continental

stock

•

(jointly).

Skiatron Electronics & Television
Corp.
March 16 filed 470.000 shares of common
stock

cents).

companies

subscription warrants which total 75,006 shares).
Of
remaining 550,064 shares which are presently out¬

Jan. 20

—

Securities Corp. and Dean Witter & Co.

stockholders.

tinental

Evanston, 111.

300,000 shares of com¬
par ($1 per share).
Proceeds—
Underwriter—Western States In¬
vestment Co., Tulsa, Okla.

each

Y.

capital stock (par $2), of
which 100,000 shares are being offered by the company
for subscription by stockholders of record June 7, 1956
at the rate of one new share for each 10 shares then
held; subscription warrants will expire at 3:30 p.m.
(EDT) oh July 9, 1956 (of the 100,000 shares, the Con¬
filed 650,064 shares of

1

Price—To be

Togor Publications, Inc., New York
March 16 (letter of notification) 299,700 shares of com¬
mon stock (par 10 cents).
Price—$1 per share. Proceeds
—For working capital and general corporate purposes.
Office—381 Fourth Ave., New York, N. Y. Underwriter
—Federal Investment Co., Washington, D. C.

Sierra

United States Life Insurance Co. of N.
June

writer—Merrill

Shangrila Uranium Corp.
Dec. 30 (letter of notification)

•

unit; and to public, $10 per unit. Proceeds—For
capital improvements and general corporate purposes.
Office—Norwood, N. J. Underwriter—None.

selling

(7/10)

Arizona

stock.

19

.

writer—None.

mining

Inc.

(letter of notification) 150,000 shares of con¬
vertible preferred stock (par $1) and 30,000 shares of
common stock
(par 10 cents) to be offered in units of
five shares of preferred stock and one share of common
stock first to stockholders.
Price—To stockholders, $9

Price

June

Fiberglass Industrial Plastics,

S.

U.

March

Wash.

mortgage

mon

Co., Houston, Texas.

in

• Selective Life Insurance Co., Montgomery, Ala.
(letter of notification) 50,000 shares of common
stock (par 50 cents).
Price—$1.50 per share. Under¬

For

Jacinto Building,

Uranium Corp., Spokane, Wash.
March 1 (letter of notification) 1,000,000 shares of com¬
mon stock
(par five cents). Price—20 cents per share.
Proceeds—For mining expenses. Office — 422 Paulsen
Blag., Spokane, Wash. Underwriters—Percy Dale Lanphere and Kenneth Miller Howser, both of Spokane,

^ Tipton County Utilities Co., Inc.,
Dyersburg, Tenn.
June 21
(letter of notification) $115,500

June 15

For expenses

—$26 per share.

Target

•

Price—$1.25 per share. Proceed—
incident to oil production. Office
i>an
Houston, Tex. Underwriter Mickle &

stock (par 10 cents).

the

writer—None.
Sweet

Oil Co., Houston, Texas
notification) 240,000 shares of common

per

Reynolds & Co.. Salt Lake City, Utah.
Suburban Land

common

19 (letter of

for

unit. Proceeds—For working capital, etc.
Josephine St., Denver, Colo. Underwriter—
Intermountain Securities, Inc., Denver, Colo.
per

Office—257

Jan.

capital ex¬
penditures. Underwiters—Lehman Brothers and Merrill

Lynch, Pierce,

.Thursday, June 23, 1956

Union of Texas

of common stock (par
subscription by common

snares

offered

be

to

stockholders

(7/10)

2,570,b46

Sun Oil Co., Philadelphia,
April 18 filed 229,300 shares of

(New York)

shares of

50

filed

14

..

July 9, 1956. Price—
Proceeds—For working capital and gen¬
on

corporate purposes.
Underwriters—Smith, Barney
Co., New York, and Blunt Ellis & Simmons, Chicago,

&

Co., both of New York.
Western

Securities

Corp. of New Mexico

13

(letter of notification) 50,000 shares of common
stock.
Price—At par ($1 per share).
Proceeds—To start
a dealer or brokerage business.
Office—921 Sims Bldg.,
Feb.

Albuquerque, N. M.

Underwriter—Njone.

Volume 183

Number 5546... The Commercial and Financial Chronicle

•

Wheland Co.,
Chattanooga, Tenn. (7/3)
May 23 tiled $2,000,000 of convertible subordinated de¬
bentures due June 1, 1976, and 136,000 shares of common
stock (par $5). Of the
latter, 75,000 are to be offered for
the company's account and
61,000 shares- for a selling
stockholder.
Price
To be supplied by amendment.
Proceeds—Together with proceeds from private sale of
$1,500,000 4%% first mortgage bonds and $900,000 of
3-year unsecured 4J/2% notes to a group of banks, will

'

Branift

Airways, Inc.
authorized an offering to stockholders
1,105,545 additional shares of common stock, (par

April 11
of

$2.50)

&

the

held

basis

(with

of three

shares

new

for

each

date

Weld & Co. and Shields & Co.

five

an

'

Copeland Refrigeration Corp. (7/23-27)
May 10 it was reported company plans to issue and
sell 100,000 shares of common stock. Proceeds—For ex¬
pansion program. Underwriter—Baker, Simonds & Co.,
Detroit, Mich. Offering — Expected last week in July.
Registration—Planned for latter part of June.

extended.

Proceeds—For general corporate pur¬
Underwriter—F. Eberstadt & Co., New York.

poses.

outstanding series A and series B 5%
first mortgage bonds, and for
expansion program. Under¬
writers—Hemphill, Noyes & Co., New York; Courts &
Co., Atlanta, Ga.; and Equitable Securities Corp., Nash¬
ville, Tenn.
•

California Electric Power Co.

May

it

14

was announced
company plans an offering
mortgage bonds late in 1956,- if market and
other conditions are then favorable. Proceeds—For con¬

of

•

first

struction

White Sage Uranium
Corp.
(letter of notification) 15,000,000 shares of capi¬
Price—At par (one cent per share). • Proceeds

program.

Underwriter—To be

determined

meet

by

bidding. Probable bidders: Halsey, Stuart
Inc.; Shields & Co.; Merrill Lynch, Pierce, Fennel
Beane and Kidder, Peabody & Co.
(jointly); Blyth
Co., Inc.; The First Boston Corp. and Salomon Bros.
Hutzler (jointly); Lehman
Brothers; White, Weld &

& Co.

tal stock.

&

—For mining

expenses.
Office—547 East 21st South St.,
City, Utah.
Underwriter—Empire Securities
Corp., Salt Lake City, Utah.

&

Salt Lake

&

Detroit Edison Co.
Feb.

Williamson Co., Cincinnati, Ohio
Feb. 20 (letter of
notification) 20,666 shares of class B
common stock
(par $1) to be offered for subscription by
class B common stockholders on a l-for-7 basis. Price—
$6.84 per share. Proceeds—For working capital. Office
—3500 Maison
Road, Cincinnati, Ohio.
Underwriter—
None.
;

Carolina
March 22 it

Kuhn, Loeb &

to

be

offered

holders.
will

initially

for

sale

to

the

stock

present

Central

sold

ceeds—For

immediately.

lease

of

plant

Office—Phillips; Wis.

Price—$10

-

and

per

purchase

share.

of

Pro¬

construction

equipment.

by

Offering—Tentatively deferred.

•

&

for

construction.

Central

Illinois

share. Pro¬

program

Manufacturing Co. (7/6-9)
271,167 shares of capital stock (par $10)
to be offered for
subscription by stockholders of record
July 6 on the basis of one new share for each seven
shares held; rights to expire on July 23. Price—To be
14

for

each

on

three

one

due June

1, 1971 to be offered for subscription by com¬
Price—At 100% of principal amount.
Proceeds — For general corporate purposes. Office —
Houston, Tex. Underwriter—G. H. Walker & Co., St.
stockholders.

on

a

common

stock.

share. Proceeds —For expansion program. Under¬
writer—Arthur M. Krensky & Co., Inc., Chicago, I1L

per

-

American

June

Petrofina, Inc.

man

Feb.

Underwriters—White,

(2)

For

Black

Hills

Power &

Light Co.

June 16 company applied to Federal Power
Commission
for authority to offer an
for

new

subscription

aggregate of $300,000 of common
by its stockholders. Proceeds—

construction, etc.

Underwriter—None.

Blackstone Valley Gas & Electric Co.

April 30 it

was

reported company plans to issue 25,000

shares cumulative preferred stock
(par $100). Proceeds
—To reduce bank loans.
Underwriter—To be determined
by competitive bidding. Probable bidders: W. C. Lang-

ley & Co.; Stone & Webster Securities
Corp.; Salomon
Bros. & Hutzler; Kidder, Peabody & Co.; Harriman Rip¬
ley & Co. Inc. Bids—Expected to be received sometime

July.




balance

to

be

Underwriters—Morgan Stanley & Co. and
handled new financing by Grand Union

1954.

Fairchild

Camera

&

Instrument

Corp.

June

11, John H. Clough, President, announced that
working capital financing will be required in the near
future. Underwriter—Glore, Forgan & Co., New York.

pre¬

Corp.,
an

Houston,

Texas

application has been filed

of a 565.7 mile pipeline
Underwriters—May be Leh¬
Brothers and Allen & Co., both of New York.

15

it

was

announced

company

may

Underwriter

issue and sell

—

To be deter¬

by competitive bidding. Probable bidders: Halsey,
Stuart & Co. Inc.; Morgan Stanley & Co. Bids—Expect¬
on

'

Oct. 2.

March 12 it

was

Credit

April 18 it

reported company plans early registra¬

tion of about $25,000,000 of junior subordinated deben¬
tures. Underwriter — Kidder, Peabody & Co. and The

/First Boston Corp., both of New York.
Consolidated Natural
12

it

announced

Gas

Co.

(8/28)

plans to issue and
$30,000,000 of debentures due 1981. Underwriter—
To be determined by competitive bidding.
Probable
.bidders: Halsey, Stuart & Co. Inc.; Morgan Stanley &
Dor and The First Boston Corp (jointly); White, Weld
& Co. and Paine, Webber, Jackson & Curtis (jointly)
Bids—Expected to be received up to 11 ami. (EDT) on
was

company

announced that company plans $5,000,000
Proceeds—To go to

was

Investment

Securities

Co., a subsidiary.
Louis, Mo.

Underwriter—

G. H. Walker & Co., St.
General

Utilities

Public

Corp.

April 2, A. F. Tegen, President, said that the company
plans this year to issue and sell $28,500,000 of new bonds
and $14,000,000 of new preferred stock. It is also pos¬
sible that

for

a

issue of

new

subscription by

Proceeds—To repay

1957.

common

stock will be offered

stockholders before April,
bank loans, etc., and for con¬

common

struction program.
General Tire & Rubber Co.
24

stockholders

authorized

common

shares

the

from

and

approved a proposal to increase
stock to 2,500,000 from 1,750,000

authorized preference stock to 1,000,000

350,000 shares; also a proposal that any issue of
include a privilege to convert into com¬
the company to issue warrants to

debentures may
mon

stock and permit

stock, provided the total that may be
one time does not exceed 600,000
shares.
[The company expects to issue 23,000 additional
preference shares—5,000 for acquiring stock and prop¬
erty and 18,000 for cash. Having completed long-term
borrowing negotiations of $30,000,000 from insurance
companies, the company expects to sell not more than
$15,000,000 in debentures.]
Underwriter—Kidder, Pea¬
body & Co., New York.
common

outstanding

Corp.

in May.

additional financing in near future.

purchase

Commercial

late

General Contract Corp., St. Louis, Mo.

Feb.

(10/2)

mined

June

in

Corp.

for construction

$30,000,000 of debentures.

Co.

.

announced

Columbia Gas System, Inc.

Weld & Co.; Blyth & Co.,
Inc.; and Hemphill, Noyes &

For

Securities

Transmission
was

ed to be received

it
was
announced
that
following proposed
with Panhandle Oil Corp., American Petrofina,

Ltd. will offer to stockholders of Panhandle and
Petro¬
fina oi Eelgium and to Canadian Petrofina the
oppor¬
tunity to Isubscribe to additional "A" stock of American
Petrofina.
Price—$11 per share.

stock

Equitable

14

merger

the

York.

class of security to be sold and the
the transaction have not been deter¬

system to cost $68,251,000.

.

Price—Around $4.25

be

half

The

with the FPC

Prospective Offerings
of 150,000 shares of

and

—Exoected

Coastal

expected

Hutton

in

Co.

Union stockholders. Office—East Pat¬

Eternalite, Inc., New Orleans, La.
May 28 it was reported company plans to issue and sell
about 200,000 shares of class A stock. Price — Around
$4.50 per share. Underwriter — Vickers Brothers, New

It is also

Feb. 29 it

is

E.

Union

Grand

to

,General Acceptance Corp.
April 2 it | was reported company plans to issue and
sell $15,000,000 of debentures due in 1966, $10,000,000
of capital debentures due in 1971 and about $3,500,000
of common stock. Underwriters—Paine, Webber, Jack¬
son & Curtis and Union Securities
Corp. Registration

best-efforts basis.

vAir-Vue Products Corp., Miami, Fla.
Feb. 20 it was reported early registration

will

second

(jointly); Blyth & Co., Inc. and The First Boston Corp.
(jointly); Kidder, Peabody & Co. and Union Securities
Corp. (jointly); Merrill Lynch, Pierce, Fenner & Beane.
(3) For common stock—Blyth & Co., Inc., Merrill Lynch,
Pierce, Fenner & Beane and Stone & Webster Securities
Corp. (jointly); Glore, Forgan & Co.; The First Boston
Corp.; Lehman Brothers and Bear, Stearns & Co. (joint¬
ly). Common stock will probably be offered first for
subscription by stockholders.

stock.

-

Louis, Mo.,

and

the

Stockholders of Laboratories

Shopping Centers, Inc.
announced this company has been formed
to locate and develop shopping
centers east of the
Mississippi, the funds to come from an offering of stock,

W.

ferred stock—Lehman Brothers and Bear, Stearns & Co.

Zapafa Off-Shore Co.
*
May 22 filed $2,350,000 of 5!£% subordinated debentures
mon

$5,000,000

ago.

was

terson, N. J.

Co.

securities in

of

years

some

Incorporated;

share of Youngstown

of

„

common

about

at

sale

Underwriter-

quirements for new money may be obtained in the
second half of this year. Underwriter—To be determinedby competitive bidding. Probable bidders: (1) For bonds
—Halsey, Stuart & Co. Inc.; Kuhn, Loeb & Co. and A.
C. Allyn & Co. Inc. (jointly); Salomon Bros. &
Hutzler;
Blyth & Co., Inc., Kidder, Peabody & Co. and Merrill
Lynch, Pierce, Fenner & Beane (jointly); Blair & Co.

Emsco; offer will expire on
Aug. 8.
Youngstown presently owns 388,853 shares,
representing 84.94% of the 457,786 outstanding shares of
Emsco

year.

the

stock.

announced that corporation, following Is¬
2 to stockholders of Allen B. Du Mont

offered to Grand

possible, if favorable money conditions
prevail at the time, that some portion of the 1957 re¬

Proceeds—For expansion pro¬

the basis of

shares

estimated

timing of

mined.

•
Youmgstown Sheet & Tube Co.
June 5 filed 22,977 shares of common stock(no
par)being
offered in exchange for common stock of Emsco Man¬

ufacturing Co.

this

exact

Underwriter—Morgan Stanley & Co., New York.

gram.

from

of

filed

supplied by amendment.

is

obtained
Yale & Towne

Madison

Dec.

one-third

May 16, M. S. Luthringer, President, said the new money
required to finance the company's 1956 construction

ceeds—To acquire properties. Underwriter—None.

Dolly

Oct. 10 approved formation of Broadcasting firm.

Co.

Service

its

was

on

May 7 it

Underwriter—May be Union

Public

Dairies, Inc.

Eastern

-

Securities Corp., New York.

of certain uranium
properties, and in exchange
for such working interests and
properties. Price—Shares
to be valued at an
arbitrary price of $4

Foremost

Mont Broadcasting Corp.

nancing
on

was

new

that

& Co. handled Du Mont Laboratories class A stock fi:

reported company plans to issue and sell ]
shares of cumulative preferred stock (par
$100) later this year. Proceeds — To repay bank loans

owners

June

determined

about 80,000
and

bor¬

Laboratories, Inc. of 944,422 shares of common stock as
a dividend, contemplates that additional shares will be
offered to its stockholders.
This offering will be Un¬
derwritten. Kuhn, Loeb & Co. and Van Alstyne, Nod

Co.

May 14 it

Wycotah Oil & Uranium, Inc., Denver, Colo.
Nov. 10 filed 1,500,125 shares of common stock
(par one
cent) to be offered only to the owners of percentages of
working interests in certain oil and gas leases and to the

•

Du

Central Illinois Light Co.

Statement

effective Feb. 23.

per

be

bank

future date to give its stockholders the right

purchase

suance

Underwriter—To

and

-

announced

was
a

Aug. 10 it

Light Co.

program.

funds

Allen & Co., New York.

competitive

Stuart

:

Orleans, La.

to

bidding.
Probable
bidders:
Halsey,
Inc.; Morgan Stanley & Co.; Kuhn,
Loeb & Co.; Union Securities
Corp.; The First Bostori
Corp.; Harriman Ripley ,:& Co. Inc.;: Merrill Lynch,
Pierce, Fenner & Beane and Stone & Webster Securities
Corp. (jointly).

Underwriter—None. :'"A

.Weeds Oil & Gas Co., New
Orleans, La.
Aug. 29 filed 400,000 shares of common stock (par $1).
Price—$5 per share.
Proceeds—To retire outstanding
obligations. Underwriters—Woolfolk & Shober and How¬
ard, Weil, Labouisse, Fredricks & Co., both of New

Illinois

it

15

Intends at

May 14 it was reported company plans to issue and sell
$18,000,000 first mortgage bonds in 1957. Proceeds—For

It is not expected that more than
42,500 shares

be

Nov.

Carpenter Paper Co.
May 10 it was reported company is understood to be
planning the sale of some additional common stock.
Underwriter—Kidder, Peabody & Co., New York.

stock¬

$60,000,000 will be obtained

Internal

Dolly Madison International Foods Ltd.

Bids—Scheduled for Sept. 11.

(par $5)

1956.

pected in October.

^

common

in

holders. Underwriters—None. Offering—Tentatively ex¬

(jointly); Equitable
Securities Corp.; Blyth & Co., Inc.; Kidder,
Peabody &
Co. and Merrill Lynch,
Pierce, Fenner & Beane (jointly).

★ Wisconsin Wood Products, Inc.

that about

are

investors

rowings will probably provide for the remainder of the
$95,000,000 necessary this year to carry forward the com¬
pany's program of expansion of facilities." Financing
may be in form of 15fyear debentures to common stock¬

and

Co. and A. C. Allyn & Co. Inc.
(jointly); W. C. Langley
& Co. and The First Boston
Corp.

($1,000 per debentures). Proceeds
—For construction of a
golf house and other improve¬
ments.
Underwriter—None.
"

74,016 shares "of

(9/11)

$15,000,000 of first mortgage bonds due 1986., Under¬
writer—To be determined by competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co
Inc.;

Price—At par

filed

Light Co.

announced company plans to issue

was

plans

from

sell

Wilmington Country Club, Inc., Wilmington, Del.
April 2 tiled $1,500,000 of non-interest bearing deben¬
tures, due 1991, to be offered to the members of the

25

Power &

20, Walker L. Cisler, President stated that "tenta¬

tive

Co.

*

June

Crane Co.,

Chicago, III.
Elliott, President, on March 18 stated in part: "To
the cost of present proposed capital
expenditures,
it appears that some additional financing
may be neces¬
sary." Underwriters—Morgan Stanley & Co. and Clark,
Dodge & Co.
-

F. F.

competitive

Feb. 13

Co.

Boston

oversubscription privilege). On
May 24, the company announced the number of shares
to be offered is expected to be reduced and the
offering

be used to retire

Club.

47

Inc.; Harriman Ripley & Co. Inc. and The First
Corp. (jointly); Morgan Stanley & Co.; White,
(jointly). Bids—Scheduled
to be opened at 11: 30 a.m. (EDT) on
Aug. 14. Registra¬
tion—Expected on July 20.

company

on

shares

—

f

(3115)

A

at

any

sell

Aug. 28.
•

Registration—Now planned for July

Consumers Power Co.

16.

(8/14)

June 19 company filed an application with the Michigan
P. U. Commission for authority to issue and sell $40,000,000

of first

mortgage bonds to mature not earlier than

June 1, 1986. Proceeds—For reduction of bank loans and
for new construction. Underwriter — To be determined

by competitive bidding. Probable bidders: Halsey, Stuart

Houston Texas

Feb. 29 it

with

the

Gas & Oil

Corp., Houston, Texas

application has been filed
FPC for permission to construct a 961 mile
was

announced

an

pipeline system to cost $105,836,000. Underwriters—May
be Blyth & Co., Inc., San Francisco, Calif.; and Scharff
& Jones, Inc., New Orleans, La.
Inland

Steel

Co.

April 26, Joseph L. Block, President, disclosed company
will seek additional financing through sale of equity
stock

(the method and amount has not yet been deter¬

mined). Proceeds—For expansion program.

Underwriter

—Kuhn, Loeb & Co., New York.

Continued

on

page

48

48

(3116)

The Commercial and Financial Chronicle.
.-.Thursday, June 28, 1956

Continued

from

page

Johns-Manville

ding, the following may bid: Halsey, Stuart & Co. Inc.;
White, Weld & Co.; Lehman Brothers and Union Secu¬
rities Corp. (jointly).

47

Corp.

,,

March 9, Leslie M. Cassidy,

Chairman, said the corpora¬
studying possibilities for expansion that could
require financing, adding that the management had no
definite plan for the issuance of additional stack other
than those required for the two-for-one split but "the
situation could change."

New

is

tion

Jan.

New

announced that the company is arranging

$100,000,000 from institutional investors to
major expansion program to involve ap¬
proximately $113,000,000. Underwriter—The First Bos¬
ton Corp., New York.

$10,000,000

new

of

—

sell

to

used

additional

additional
New

stock.

common

to pay for further

$37,000,000.

Proceeds—To

be

announced

was

it Meadowbrook

company

National

Bank,

West

will

vote

that the stockholders

announced

approving

a

104,500

holders

on

additional

shares

on

capital

stock

sale

of

reported

additional

that

first

company

is

mon

1956

16

it

Probable bid¬

and Goldman, Sachs & Co.
Hutzler; Harriman Ripley &
Co. Inc. and Union Securities
Corp. (jointly); Kidder,
Peabody & Co. and Drexel & Co. (jointly); The First
Boston Corp.
&

Michigan Bell Telephone Co.
for

permission

to

issue

and

sell

40-year debentures later this
struction program.

«>mpetitive bidding.

$30,000,000 of

year.
Proceeds—For con¬
Underwriter—To be determined by

Probable bidders: Halsey, Stuart &
Co. Inc.; Morgan
Stanley & Co.
.

12

it

sell

this

due

was

1976.

writers

Summer

$25,000,000

of

first

To

be

mortgage

expansion program.
determined by competitive

bonds
Under¬

Inc.

bidders:

Halsey, Stuart &

Co.

'

Minneapolis
April

16

Gas

Co.

stockholders

?ut?2™zed

approved

an

increase

common stock (Par $1) from 1,700,000

in

Previous offer to stockholders
by Kalman & Co., St. Paul, Minn.

underwritten

the

shares

2,500,000 shares.

was

National Steel Corp.

March

the company announced that
it is estimated
total construction
expenditures planned to start in
the current year and to be
completed in mid-1959 will
amount to a minimum of
$200,000,000. Underwriters—
that

Kuhn,

Loeb

&

Co.; Harriman Ripley & Co. Inc.;

The First Boston
Corp.

Natural
Feb. 20 it
late this

1976.

Gas

was

and

Pipe Line Co. of America

reported company plans to issue and sell

Spring $35,000,000 of first mortgage bonds

due

Underwriter—If determined by competitive bid¬




•

(Del.)

X-%'

Pittsburgh Rys. Co.
was announced that Standard Gas & Electric >
Co. will offer to its stockholders rights to subscribe for
.

of the

have

new

securities to be issued

been

not

determined.

the time of sale

and

Proceeds—To

help

finance

construction program. Underwriters—For any debenture
bonds — may be determined by competitive bidding;

*

probable bidders include Halsey, Stuart & Co. Inc.; The
First Boston Corp.; Kuhn, Loeb & Co., and Lehman
Brothers

(jointly); Morgan Stanley & Co. and Drexel 8c

Co. (jointly).

reported company plans to finance its

States

Power

Co.

Puget Sound Power & Light Co.
announced that it estimates that its
program
for the - years 1956-1959 will

announced company

was

construction

$87,000,000, including $20,000,000 budgeted forlarge expansion, the company says, can befrom internal sources. Un¬
competitive bidding, may
include Halsey, Stuart & Co. Inc.; The First Boston Corp. .
1956.

(Minn.)

.

:

White,*

Norwalk Truck
for

Lines,

authority

to

issue

debentures

and

(to

mainder to be advanced to Shirks Motor
Express Corp.,
Lancaster, Pa.
Underwriter — The Ohio Company,
Offshore

Gathering Corp., Houston, Texas

18

David

C.

pany

has filed

an

Commission

for.

Bintliff, President, announced com¬
application with the Federal Power

a

certificate

of necessity to
pipeline off-shore the

364-mile submarine

gas

Louisiana from the

Sabine

River to

the

Gulf

build

of

Mississippi. It is estimated that this gather¬
ing system will cost approximately $150,000,000. Type
of financing has not yet been
determined, but tentative
plans call for private sale of first mortgage bonds and
public offer of about $40,000,000 of securities (probably
notes, convertible into preferred stock at maturity, and
common stock). Underwriter—Salomon Bros. &
Hutzler,

Oklahoma Gas & Electric Co.

May

17 stockholders voted to increase the authorized
preferred stock from 240,000 shares to 500,000 shares and
the

Authorized

common

stock

from

3,681,000 shares to
5,000,000 shares. Company has no immediate plan to do
any equity financing.
Underwriters—(1) for any com¬
mon
stock
(probably first to stockholders) — Merrill
Lynch, Pierce, Fenner & Beane. (2) For preferred stock,

to be determined

bers: Merrill

by competitive bidding. Probable bid-

Lynchj Pierce, Fenner & Beane and White,

|

r

.

*

reported company has applied to the New
Commission for authority to issue and sell
40,000 shares of cumulative preferred stock (par $100).
Underwriter—The First Boston Corp.* New York.- >
York

P.

was

s

S.

South Carolina

Electric & Gas Co.

March 9, S.

C. McMeekin, President, announced that it*
is expected that $10,000,000 of new money will be re¬
quired in connection with the company's 1956 construe-,
lion program. The company proposes to obtain a part?
of its new money requirements from the sale of $5,000,000 of preferred stock and the balance from the
private sale of $5,000,000 principal amount of bonds..
Underwriter—Kidder, Peabody & Co., New York.
i

Southern

of

the State of

,

Telephone Corp.

a

coast

Coast

a

\

Rochester

common

Nov.

stockholders approved

May 28 it

has applied to the ICC

sell $2,000,000 10-year 5%
be convertible into class B
stock, par $1, beginning June 15, 1957). Pro¬
ceeds—About $1,000,000 for working capital and the re¬

convertible

16

—

'

-

Inc.

announced company

was

;

>

proposal to increase
the authorized preferred stock by 100,000 shares (par/
$100), of which it is planned to issue 50,000 shares later,
in 1956.
Underwriter
The First Boston Corp., New*
York.
,■;> v:., -'

(jointly); and Glore,

'

Rochester Gas & Electric Corp.

May

& Co. (jointly); Equitable Securities
Corp. and
Union Securities Corp., (jointly); Smith, Barney &
Co.;
Lehman Brothers and Riter & Co.

Forgan & Co.

This

financed wholly by debt and
derwriter*—If determined by

plans to issue and sell

New York.

12

& Metals Corp.

E.

April 16, Lyle McDonald, Chairman, estimated that re-,
quirements for new capital this year will be approxi¬
mately $80,000,000 to $85,000,000. The types and amounts

Co.

Weld

plans to issue and

bidding.
Inc.; The First
Corp.; Harriman Ripley & Co. Inc.; Blyth & Co

Probable

.

company

Proceeds—For

—

Boston

to

announced

com-

Columbus, Ohio.

Michigan, Wisconsin Pipe Line Oo.

June

Walter

amount to

June 5 it

April 19 company applied to the Michigan P. S.
Com¬
mission

Cuba Oil

9,

540,651.75 shares of Pittsburgh Rys. Co. Price—About $6
per share.

—

bidders: Halsey Stuart & Co.
Inc.; Blyth & Co., Inc. and
The First Boston Corp. (jointly); Merrill
Lynch, Pierce,
Fenner & Beane, Kidder, Peabody & Co. and

Smith, Barney & Co.

1-for-y

American Telephone & Telegraph Co. owns an

basis.

Public Service Electric & Gas Co.

later this year $20,000,000 of first
mortgage bonds due
1986. Proceeds—For construction
program. Underwriter
—To be determined by
competitive bidding. Probable

—

(jointly); Salomon Bros.

was

Gas

common

Feb. 15 the company

Jan. 19 it

was

by competitive bidding.

■,

construction

Northern

(jointly); The First Boston Corp.

to be determined

Natural

1,562,267 additional

May 4 it

Public Service Co.

Underwriters

1

Seibert, President, announced thatcompany will soon file a registration statement with the,
SEC preparatory to an equity offering planned to take?
place later this year. Business—To explore, drill and
operate oil, gas and mineral properties in the United
States, Cuba and Canada. - Office—120 Broadway, New ^
York, N. Y.

was

stockholders.

Expected

Telegraph Co.

Commission to offer

U.

April

Aviation, Inc.

Indiana

—

sought authority from the I California

company

Underwriter—Probably Blyth & Co., Inc.

reported company may issue in July
or
August, depending upon market conditions, about
$5,000,000 of preferred stock (in addition to about
$5,000,000 of bonds).
Underwriter
For preferred stock also
ders:

(EDT)

noon

Registration

Aug. 21.

on

program
(costing about $40,000,000)
through issuance of debt securities and treasury funds.

Metropolitan Edison Co.
April

to

(PDT)

writer—None.

(following proposed 2-for-l split up to be voted
Aug. 3). Underwriter—Morgan Stanley & Co., New

March 12 it

Underwriter—Td be determined by competitive
bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.; White, Weld
& Co.; Blyth & Co., Inc.;
Kidder, Peabody & Co, and
Drexel & Co.

American

Northern

considering

mortgage bonds later this
—
in July or August).

Stuart & Co. Inc.; Morgan Stanley,
Bids—Tentatively scheduled to be received up to

a.m.

Pan
up

Under-"

aggregate of 89.6% of the preferred and common stock.
par ($100 per share).? Proceeds — To repay
temporary borrowings and for new construction. Under¬

RR.
company

•

Price—At

For any preferred
stock, Central Republic Co. Inc., Blyth & Co., Inc., and
Merrill Lynch, Pierce, Fenner & Beane
(jointly). Bonds
may be placed privately.

(probably about $5,000,000

year

6

American

by the

(8/21)

shares to common and preferred stockholders on a

each five shares held

of preference preferred stock to be offered first to

Metropolitan Edison Co.
was

P.

reported company plans to spend about
$52,000,000 for new construction in 1956 and 1957 ($29,000,000 in 1956 and $23,000,000 in 1957). Of the total
about $30,000,000 will be obtained from new
financing,
a part of which is
expected to include about $14,846,200

Un¬

it

share for

Co.

borrowings and for capital expenditures.

Pacific Telephone &

of

received

Northern

(par

—

6

were

March 13 it

July

$5) on a l-for-13 basis. Proceeds
For expansion.
derwriter—Lee Higginson Corp., New York.
Feb.

new

& Telegraph

Telephone

July 27.

June 5 for the purchase from

upon

proposal to offer to stock¬
of

8:30

York.

Hempstead,

Co.; Kidder, Peabody & Co.; The Dominion Securities
Corp.; and Union Securities Corp. Registration — Ex-:
pected soon.
-/

& Co.

Telephone & Telegraph Co.
outstanding stock. Proceeds—To repay
temporary borrowings. Underwriter—None.

stock

New York
was

29.

69.21%

North

—

June 25 it

Aug.

one

bonds, and $10,000,000 of 5.6%/
borrowings from banks, will be used;
Underwriters—White, Weld 8c:

mortgage

notes and

construction program.

able bidders: Halsey,

June 8, it was announced company plans to offer to its
stockholders rights to subscribe for additional capital

plans to issue and
sell next Fall $20,000,000 to
$25,000,000 first mortgage
bonds. Underwriter
To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
W. C. Langley & Co.; Blyth &
Co., Inc. and The First
Boston Corp.
(jointly); Blair & Co., Incorporated and
Baxter, Williams & Co. (jointly); Smith, Barney & Co.

~

of

owns

York.

April 17 it

the

as

of

rate

financing*

writer—To be determined by competitive bidding. Prob¬

it of $6,600,000 equip¬
ment trust certificates, due annually from Dec. 15, 1956
to 1970, inclusive.
[These certificates; had been pur¬
chased by Despatch Shops, Inc., a subsidiary, on Dec.
28,
1955.] The bids were rejected.
'

Long Island Lighting Co.

12

the

on

expansion, estimated to cost an
Underwriter—Blyth & Co., Inc.,

to

porary

it New England Telephone & Telegraph Co. (8/29)
an offering to stockholders
613,010 additional shares of capital stock (par-$100)

Bids

yet been determined, except it is not the present inten¬
tion

plans to issue and sell
during October
competi¬

bonds

be determined by

Probable bidders:

New York Central

that the company plans fur¬
ther financing, the nature and extent of which has not

first

tional

interim

Pacific

of

at

into at the time of the original

1955.

May 31 the company sought approval of the California
P. U. Commission to issue and sell $78,000,000 of 32-year
debentures due Aug. 15, 1988. Proceeds—To reduce tem¬

June 20 directors authorized

Wis.

Neenah,

mortgage

April of

May 31

announced

was

first

that.,

Price—$10 per share. Proceeds—To-i
gether with funds from private sale of $35,000,000 addi-/

Halsey, Stuart & Co.
Inc.; Kuhn, Loeb & Co., Salomon Bros. & Hutzler, Union
Securities Corp. and Wood, Struthers & Co. (jointly);
Lehman Brothers; The First Boston
Corp.; Equitable Se¬
curities Corp.; Merrill Lynch,
Pierce, Fenner & feeane,
Kidder, Peabody & Co. and White, Weld & Co. (jointly).

City Power & Light Co.
April 24 stockholders approved a proposal increasing
bonded indebtedness of the company by $20,000,000. Un¬
derwriter
To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; The First
Boston Corp. and Blyth & Co., Inc. (jointly); Equitable
Securities Corp.; White, Weld & Co. and Shields & Co.
(jointly); Kuhn, Loeb & Co., Salomon Bros. & Hutzler
and Union Securities Corp.
(jointly); Lehman Brothers
and Bear, Stearns & Co. (jointly). Amount and
timing
has not yet been determined
(probably not until first
half of 1957).

Kimberly-Clark Corp.,

of

Underwriters—To

tive bidding.

Kansas

Nov. 22 it

1956.

entered

were

in

(jointly).

announced company

was

(jointly); The First Boston Corp.; Lehman
Co., Inc. (jointly); Smith, Barney
Co.; Harriman Ripley & Co. Inc.

about 280,000 shares of common stock (par $1) are to be^
sold in connection with subscription contracts which:

England Power Co.

Jan. 3 it

Co.

March

—

Co. and White, Weld & Co.

,

&

Pacific Northwest Pipeline Corp.
20 C. R. Williams, President,-announced

plans to merge its

company

The First Boston Corp.; Equitable Securities Corp.; Mer¬
rill Lynch, Pierce, Fenner & Beane, Kidder, Peabody &

borrow

to

finance its

announced

was

as yet been determined.
Under¬
May be determined by competitive bidding.'
Probable bidders: Halsey, Stuart & Co. Inc.; Kuhn, Loeb
& Co., Salomon Bros. & Hutzler, Union Securities Corp.
and Wood, Struthers & Co. (jointly); Lehman
Brothers;

writer

Probable bidders: Halsey, Stuart & Co. Inc.; Lehman
Brothers; White, Weld & Co.; Kidder, Peabody & Co.;
Union Securities Corp., Salomon Bros. & Hutzler and
Merrill Lynch, Pierce, Fenner & Beane (jointly); Blair
& Co. Incorporated.

was

it

of which has not

name

—

May 21 it

England Electric System

3

subsidiaries, Essex County Electric Co., Lowell Electric
Light Corp., Lawrence Mectric Co., Haverhill Electric
Ca and Amesbury Electric Light Co., into one company
difring 1956. This would be followed by a $20,000,000
first mortgage bond issue by the resultant company, the

Jersey Central Power & Light Co.
Feb. 6 it was reported; company may
in July 1956,
issue and sell $9,000,000 first mortgage bonds.
Under¬
writer
To be determined
by competitive bidding.

; Kaiser Steel Corp.

Weld

Brothers and Blyth &
& Co.; Kuhn, Loeb &

Jan. 30 it

Counties

was

reported

■

i

'

•

'

*

^

'-it*"

Gas Co.

of California

company

may

"

in the Fall offer

$15,000,000 of first mortgage bonds. Underwriter—To be
by competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.; The First
determined

Boston

*
:

Corp.; White, Weld & Co.; Merrill Lynch, Pierce,

Fenner & Beane.

Southern Electric Generating Co.

May 18, it was announced that this company, 50% owned •
by Alabama Power Co. and 50% by Georgia Power Co.,.
subsidiaries of Southern Co., plans to issue debt securi¬
ties. Proceeds—Together with other funds, to construct
and operate a
on

$150,000,000 steam electric generating plant;

the Coosa River in Alabama.

determined

Underwriter—May be

Probable bidders:/
Securities Corp.,
Equitable Securities Corp. and Drexel & Co. (jointly);Lehman Brothers; Harriman Ripley & Co. Inc. and Gold¬
man, Sachs & Co. (jointly); Blyth & Co., Inc. and Kidder,
Peabody & Co. (jointly); Morgan Stanley? & Co. y_
Halsey,

by competitive bidding.
Stuart & Co.
Inc.; Union

Volume 183

Number 5546... The Commercial and Financial Chronicle

(3117)
Southern

April

19 it

additional

Union

Gas

Co.

determined

at competitive
bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Stone & Webster Securities
Corp.; Goldman. Sachs & Co.; Kidder, Peab'ody & Co. ~

was announced company is considering is¬
sale to stockholders later this year of some

and

suance

stock

common

on

a

rata basis (with
Underwriter—None.

oversubscription privilege).

pro

an

Tennessee

Southwestern Resources,

Inc.
May 15 it was reported that the company plans to issue
and sell 1,000,000 shares of common stock. Price—Around
$5 per share. Underwriters — Southwestern Securities

Stevens

(J.

P.)

&

Co.,

&

corporate purposes.

;

Inc.

stock

late

in

June.

Tampa Electric Co.

cumulative preferred stock (par
issue of $20,000,000.

Feb.

18

it

vote June 28

company may issue and sell
1, $10,000,000 of first mortgage bonds. Pro¬

Underwriter—To be

program.

Big

Secondary

One of the

Moves

Well

Joins

Moved

as

fering,-this

L.

had

indicated^ value

an

Offered right on the
market

price,

ported

The corporate new issue market

taking

"breather" this week
while the industry put its house
in order for the larger schedule

was

It

Telephone

Co.'s

debentures,

Gas

Transmission
of

plus

smaller undertakings

keep

with

all

found

and

in

busier

was

the

things considered this
offerings met rather

I

SAN

appar¬

biggest

biggest
in

redemption

$20

million

bonds

since

The

buyers.

sion feature

was

the

debentures

level

Mark

This

tures

of

financing

are

L.

the

form

may

value

Carry

prom¬

staff

be converted

gave

up

for

San

Francisco

Investor

Province

likewise

of

were

&

and

common

in

about

MIAMI,

Ry.'s

for

Pacific

two

now

and

moving

million

a
•

Eastern

Columbia

Co.,

yield 3.84%.

it

was

still

&

a

Toll

All

at

pany,

Mr.

ANGELES,

E.

James Brady Jr. With
Edward D. Jones & Co.
(Special to The Financial Chronicle)

F.

South

623

ST.

LOUIS, Mo. — James F.
Brady, Jr. has become associated

t

ln J?

Fourth

D.

Jones & Co., 30O
Street, members o£

the New York and Midwest Stock

Exchanges.

Calif.—Daniel

has

years

...

c®nnec_^d w:ith

J^ar s^re^t

Edward

North

,

The

Mr,

Brady

been

Boatmen's

for

associated
National

many

with

Bank

du

Kimball & Co. Formed

Murray W. Feldman is conduct¬
ing 2 securities business from of¬

Joseph
C.
Kimball
and
Leo
Raymond have formed Kimball &

fices

Co.

2

at

Broadway,

New

York

in

Forms J. C.
James

S.

with

are

William

offices

Graye has formed J.
C. Graye Co. with offices at 15
Maiden Lane, New York
City to
engage in a securities business.

R.

BAYSIDE, N. Y.
and

80

Broad

Graye Co.
Torrente, Giglio Opens

C.

Whalen

at

securities business.

a

BROOKLYN, N. Y.
offices

Fred

formed Great Eastern

at

to engage
business. Partners

Francis W.

—

Roger

—

Torrente,

Giglio Company has been formed
with

Street,

Paul

—

Redmond

with

Street, New York City, to engage

City.

Forms Great Eastern In v.

and

2337

in
are

East
a

23rd

securities

Luca Giglio

Frank Torrente.

have

Investment

business.

Angeles Stock Exchanges.

permit

period

since June,

with

Street

offices

at

engage

to

in

67-17

218th

securities

a

values

for

May

were

the

highest

for

any

record and the highest for any previous month
Dun & Bradstreet, Inc., states. The May aggre¬

on

1956,

gate for 217 cities including New York
5.4% above the $565,327,637 for May
above the April sum of
$524,093,168.

$596,114,034,

was
a

year

ago,

and

a

of

rise of
13.7%

Building plans recorded in New York City during May were
at $70,889,351 and represented an increase of 7.8% from
$65,782,634 in May last year. It was more than double the $33,453,589 of a month earlier.
valued

&

Kakouris,

May Business Failures Up 22% From Last Year

Fowler
with

'i

Business failures climbed 18% in May to 1,164,
slightly below
above a year ago.
Failures were more numerous than in

Ainsley

the

listed

—

added




Failure

the

to

Com¬

Estes

has

Eastern

become

Securities

affiliated

rose

increasing 43% to
than

$100,000 class.

Fla.—James

&

Bradstreet

Index.

Liabilities

Inc., 308 So. County Road.

PENSACOLA,

Dun

This

May since

1940.

the most
All

H.

with

ties in

Corporation of

than

Jacksonville, North Carolina.

a

a

more

"Reference

Book," according

sharply than

the number of casualties,

post-war high of $59,901,000.

More businesses

in

April in all size groups except the $25,000 to
Small casualties with losses of less than $5,000 were

numerous

since

May than in the preceding month.
year

ago

in all

industry and trade

turers exceeded

King Merritt

Co., Inc., Casco Bank. Building.

a

Failures

PORTLAND, Maine—Dudley C.
Dunphe is now with King Merritt

&

wholesaling,

high.
'

Tolls

West North

in

two

year ago

up

more

36%.

to

groups.

when it comes to cancer?

the

1955

level

a

in

Central, West South Central and Mountain states

Unit of the American Cancel

Society, or mail your gift to CANCER,
c/o your

post-war

occurred

close

you? Fight cancer with a check-up to

Give to your

pre¬

Casualties among manufac¬

to

bury your head in the sand and

protect yourself and a check to help others.

The sharpest

in all industries, except iron and steel.

times

.

hope it won't attack you or someone

More businesses failed

the Middle Atlantic states climbed
or

.

Do you

major industries except construction had heavier casual¬

vious May, and

(Special to The Financial Chronicle)

.

1942.

upturn from 1955 occurred in manufacturing, 46% above the

With

to

the

highest rate for any month
42 for each 10,000 in May, 1955, and

was

since 1942; it compared with
66 in pre-war 1940.

Jay B.

Cook

in

Dun's

(Special to The Financial Chronicle)

to

good and steady in tone.

post-war peak of 1,170 in March and 22%

Failures occurred at the rate of 49 for each 10,000 enterprises

With Eastern Sees.

.

possible

o£

St. Louis.

'

Insko

Francis I.

Co.,

succumbed

carried

few bonds, dealers reported

demand

with

now

D

Co.

similar

;

get

T

to finance

proposes

May Building Permits at Record High Level

414

connected

the staff of Anderson

Ry.

priced

1976,

33A% coupon rate.
While

&

BEACH, Fla.
McLaughlin has been

of

Highways and Bridges Authority

to

LOS

and Los

(Special to The Financial Chronicle)

due

due

is

Company,

any

1981, priced at
9814 to yield 3.86% and $10 mil¬

debentures,

&

640 South Spring
Street, members of the New York

With Anderson Cook

Columbia

overall under¬

$20

British

Roy

connected

Staats

weeks.

Fla.—Lincoln

PALM

Great

company

—

Spring Street.

Co., Inc., 2144

Boulevard.

ANGELES, Calif.

Metza

its

Building.

debentures, due 1986, priced
at 98V2 to yield 3.835%; $10 mil¬

debentures,

announced

construction of pipeline in
Virginia to
$3,380,000 from funds generated by operations,
sale of common stock and
temporary bank borrowings.
Underwriter
The First Boston
Corp., New York; and
Johnston, Lemon & Co., Washington, D. C.
cost about

affiliated

Co.

LOS

deben¬

new

stock

Hentz

become

Makris

sion

of

H.

of

has

British Columbia Power Commis¬

9834

A.

(Special to The Financial Chronicle)

Makris Adds to Staff

Appeal

reported

included

was

new

(Special to The Financial Chronicle)

good fashion.

'

it

conversion

British

This $40 million

7

proposed

William R. Staats Adds

Seventy-first Street.

that

real ele¬

a

the

to

Washington Gas Light Co.
June

Murray W. Feldfrian Opens

Power

due

(Special to The Financial Chronicle)

marketing of three separate
issues carrying the guarantee of

lion

with

Harold

-now

formerly with

Pont

MIAMI BEACH, Fla.—Raymond
F. Barron has been added to the

The

lion

and

are

Building

as an added speculative
appeal for buyers of the issue.

taking

Insko

Cajon

was

Hentz Adds to Staff

stock, into which

naturally
of

out in

K.

Co., 1030 Sixth Ave.

with H. L. Jamieson

Florida

which

Louis &

market

provision

the

connected

now

Lawgsfcaff- Jr.*
LI

Tuesday.;.

on

ment

Calif.—Elliott

DIEGO, Calif.—Henry T.
Adams, Jr., Kaare O. Asper, Jr.,

conver¬

33V3, actually sold above

at

over

(Special to The Financial Chronicle)

(Special to The Financial Chronicle)

?*-■

takes

big exchange offer of

provi¬

especially

reported offering is expected in near
70,000 shares of common stock. Under¬
writer—Granberv, Marache & Co., New York. Registra¬
tion—Expected soon.

Lombard

*

SAN

Monday.

on

St.

sions, all tended to make the issue
attractive to

Products, Inc., New York

was

Joins Oscar F. Kraft

H. L. Jamieson Adds

sec¬

recent

the

straight

tap next week

bids

The maturity, 20-years, plus the

the

is

J. A. Hogle &

conversion feature, a sinking fund,

inent

Hogle Adds

DIEGO,

Wolcott

debentures brought out
outstanding class A preferred
yesterday.
stock is slated to get underway in
Carrying a 4V4% coupon this is¬
the same period.
sue
was
priced at 101 Vk and ac¬
Meantime,
National
Research
crued
interest, for an indicated
yield of roughly 4.19%, moved Corp.'s $6,000,000 of debentures,
to
be offered by the negotiated
quickly to a premium, but not
before a momentary lag.
route, is expected to reach the

optional

A.

-

new

20-year

and

it

LOS ANGELES, Calif. —Louis

;

of

(Special to The Financial Chronicle)

re¬

Offing

on

in

encouraging demand, particularly
Capital Airlines, $12 million of

;

4

future of

with

investors

heaviness.

In

The

will tend to

file

and

has joined the staff

J. A.

uptrend in contrast

an

recent

mil¬

Co.
But

the

several

that period.

"week's

of

one

of

rank

the

$30

and

PETERSBURG, Fla.—John

'

outstanding

undertakings

least

at

of

Tennessee

Co.'s

debentures

Vita Food
June

Joins E. F. Hutton

,

backdrop
satisfactory since the market was

Tele¬

&

million5 issue

$250

new

lion

was

fortnight ondary
weeks

American

the

Corp.;.. White, Weld & Co.; Union Securities
Bids—To be opened on Sept. 25.

-

(Special to The Financial Chronicle)

North.

prevailing

stock

and without
on

Securities

Corp.

shares.
-

ahead.

graph

Co., American Securities Corp. and Wertheim & Co.
(jointly); Salomon Bros. & Hutzler; Stone & Webster

$27.3
V

moving to

effect

ent

a

of business in prospect a

the

quite rapidly

-

,

be

to

of

I

-

-

bonds.

bidding.
Halsey, Stuart & Co. Inc.; Kuhn, Loeb

&

a proposed
stockholders will

Goodbody Staff

Munoz

(9/25)

plans to issue and sell

of

Probable bidders:

the

Goodbody & Co., 218 Beach Drive, Hutton

block,
price fixed by the offering group,

million.-

ST.

;

announced company

was

$12,500,000 of

(Special to The Financial Chronicle)

secondary of¬
taken at the

a

& Co., New

first
and
refunding mortgage
Underwriter—To be determined by competitive

?

largest deals
was
that
involving a
block of
425,000 shares of Texas Co. capital
stock.

Virginia Electric & Power Co.

—

week's

Underwriter—Kuhn, Loeb

-

$20,000,000

on

Conn.

debentures,

subscription by common
$50,000,000 to $60,000,-

funds will probably be required. Proceeds—
business and properties and for

new

Feb. 6 it
ne¬

$100), out of
The

vote

maintenance of its

York.

approving the proposed financing. Pro¬
Together with short term bank loans, will be
used to complete the 1956 to 1958
construction program.
Underwriter — Chas. W. Scranton & Co., New
Haven,

ceeds

was;reported

around Oct.

than

more

•authorized

(10/1):

ceeds—For construction

issue not

company proposes to

will

Inc.

Illuminating Co., New Haven, Conn.
May 29, William C. Bell, President, announced that

Underwriter—

stockholder

It is estimated that

working capital.

Corp.,

United

Straus, Blosser & McDowell, Chicago, 111.
sell some additional stock
(probably at the end of May),
.

For

—

Super-Crete, Ltd., Boniface, Manitoba, Canada
May 14 it was reported company plans sale of 255,000
common

000 of

or

U-Kan Minerals, Inc.
(Kansas)
May 28 it was reported company plans issue and sale of
600,000 shares of common stock. Proceeds—For oil and
mineral development.
Underwriter
E. R. Bell Co.,
Kansas City, Mo."

Underwriter—Goldman, Sachs

that

amending the company's-certificate of organ¬
permitting it to issue convertible

stockholders.

loan.

'

of

quarter

Co.

announced

was

which would first be offered for

$40,000,000
May and $20,000,000 of
placed privately. Pro¬
ceeds—To retire
presently outstanding $60,000,000 bank

Co., New York.

shares

third

Rubber

on

first mortgage pipe line bonds in
debentures in November. May be

May 28 it was announced company plans to offer pub¬
licly sometime this summer $30,000,000 of debentures.
Proceeds—To repay short-term bank loans and for
gen¬
eral

the

Transcontinental Gas Pipe Line
Corp.
April 17, Tom P. Walker, President, announced that
gotiations had been completed for the sale of

Spencer Telefilm Corp., Beaumont, Texas
16 it was announced
company plans to offer pub¬
licly to Texas residents 75,000 shares of capital stock.
Price—$1.50 per share. Business—To produce, sell and
distribute syndicated films for television. Underwriter—

I

in

White, Weld & Co. and Halsey; Stuart & Co.

.

^

late

States

it

ization

early in the
fourth quarter of 1956.
Proceeds—For expansion pro¬
gram.
Underwriters—Stone & Webster Securities

Jan.

-

bonds

gage

Co., Dallas, Tex.; and Mountain States Securities Corp.,
Denver,; Colet t e

- -

Transmission Co.

May 10, Gardiner Symonds, President, announced that
company plans to sell $30,000,000 of debentures in
July
(see a preceding column) and about $50,000,000 of mort¬

'J*** >'t

'

Porter-Stacy Co., Houston,: Tex.

Gas

United

May 25
June 29

49

town's Postmaster.

AMERICAN

the

*.

CANCER SOCIETY

50

The Commercial and Financial Chronicle...

(3118)

The ^following statistical tabulations

Indications of Current

latest week

Business Activity

week
Latest

AMERICAN

IRON

STEEL

AND

Indicated steel operations

Equivalent
Steel ingots

oil

42

July

Month

Week

§2,314,000

1

month ended

2,370,000

and castings

July

(net tons)

INSTITUTE:

condensate

and

each)

—

_________—

.

Residual fuel oil

(bbls.)

71.1

at

15
15
15
15
15
15

6,997,650

7,071,200

Revenue

Ions

6,625,600

117,953,000

8,029,000

7,826,000

7,520,000

27,363,000

27,142,000

25,550,000

25,535,000

2,034,000

2,140,000

2,055,000

>12,092,000

11,630,000

Benzol
Crude

2,197,000

12,044,000

11,205,000

oil

Refined

CONSTRUCTION

8,041,000

8,220,000

8,109,000

184,409,000

23,793,000

22,903,000

84,996,000

80,637,000

68,495,000

91,269,000

ASSOCIATION

OF

37,319,000

36,742,000

33,414,000

45,684,000

Month

Private

construction

State

801,431

787,075

778,997

631,141

664,222

of

$443,517,000

of

$511,922,0® 0

$310,263,000

225,458,000

New

Bituminous

S. BUREAU

coal

Pennsylvania

and

150,293,000

192,303,000

159,970,000

186,609,000

Middle

161,151,000

138,131,000

147,855,000

South

24,835,000

31,152,000

21,839,000

East

38,754,000

DEPARTMENT

STORE

OF MINES):

,_________June 16

10.280,000

*9,850,000

9,800,000

June 16

538,000

529,000

420,000

9,481,000
569,000

June 16

131

124

122

117

June 23

(tons)——

11,478,000

11,425,000

10,927,000

245

286

INDEX—FEDERAL

SALES

—

(COMMERCIAL

FAILURES

AND

INDUSTRIAL)

DUN

—

I

&

United

York

205

5.179c

5.179c

5.179c

4.797c

Wholesale

$60.29

$60.29

$56.59

Retail

$44.83

$49.67

$35.33

Construction

June 20

45.075c

44.625c

45.575c

Total

35.700c

June 20

40.400c

42,400c

43.000c

94.375c

97.000c

94.375c

16.000c

16.000c

16.000c

15.000c

June 20

15.800c
13.500c

15.800c

<

^

15.800c

94.41

95.27

95.41

104.66

104.83
108.16

112.19

106.56

106.56

106.74

104.14

104.48

104.48

108.70

June 26

99.68

100.00

100.16

June 26

•

103.13

102.96

103.47

105.17

105.17

.June 26

105.69

106.04

105.86

June 26

2.93

2.86

2.85

3.47

3.47

3.46

3.24

June 26

3.26

3.27

109.24

COAL

3.27

To

Europe

3.50

3.48

3.48

3.24

To

To

3.77

3.75

3.74

3.51

3.56

3.57

3.54

3.45

3.44

3.44

3.39

3.40

416.1

406.6

Asia

235,162

284,576

239,754

239,200

289,328

290,477

285,921

285,547

99

97

June 16

97

99

556,099

536,619

548,315

108.65

497,(j08

108.94

106.73

INDEX—

I

Odd-lot

sales

Number

of

by

dealers

EXCHANGE

(customers'

Y.

'/

108.05

COMMISS

Odd-lot purchases by dealers (customers' sales)Number of orders—Customers' total sales.

2

'

1,093,393

1,297,689

1,505,610

$55,850,219

$68,176,848

$82,759,993

850,097
$44,941,752

.June

2

6,078

2,333

5,958

4,268

.June

2

774,159

1,127,944

1,214,707

2

$40,421,355

$61,011,108

$63,540,360

2

175,680

295,000

274,080

227,350

2

.June

2

175,680

295,000

274,080

227,350

.June

2

483,540

467,070

590,860

294,000

780,237

1,135,277

1,220,665

818,788

dealers—

_

June

sales

427,710

387,030

506,510

333,960

June

8,703,810

11,921,680

13,300,590

9,131,520

12,308,710

13,807,100

10,128,710

TRANSACTIONS FOR ACCOUNT OF MEM¬
BERS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS:
Transactions of specialists in stocks in which
registered—

purchases

i

sales

the

1,442,850

1,597,410

1,755,010

1,154,060

178,150

308,660

351,740

298,100

17,700

14,300

23,600

17,700

192,950

287,710

288,680

277.150

210,650

302,010

312,280

294,850

floor—

June

651,931

523,247

38,570

63,540

50,510

517,487

612,884

769,829

June

.

654,655

40.090

June

Total sales

purchases

Short

569,577

557,577

651,454

833,369

620,087

Other

2,676,385

2,773,171
421,380

2,270,634

2,479,279

1,817,007

June

(1947-49

=

2,211,077

All

2,550,874

2,500,659

2,068,997

June 19

114.0

114.2

114.4

110.3

June 19

90.7

91.4

91.3

91.6

1Q1.9
79.4

102.5

102.3

103.6

.June 19

products

81.1

81.3

90.1

June 19

121.4

121.4

121.7

115.7

June 19

Meats

farm and foods

of

___

1,585,268

-13,908,773

14,681,596

May

704,029

1.716,141'
10,466,986

152,527

140,372

♦1,371,179

1,667,953

19,276,000

19,290,000

18,302,000

21,926,000

21,960,000

22,284,000

19,276,000

19,290,000

18,302,000

May 26

9,128,000

9,324,000

8,937;000

Active spindle hours per
spindle in place May

456.4

466.2

446.8

110

95

108

97

May

26

spindles

■___.

active

of

as

(DEPT.

Spinning spindles in

Spinning spindles

ERAL

May 26

OF

.

place

active

.____

COMMERCE):
May 26__-

on

May

on

(000's

STORE

26___:

omitted)

SALES—SECOND

RESERVE

DISTRICT,
OF NEW

Averag*=:l00—Month

of

FED¬

FEDERAL

YORK—1947-49

May:

(average monthly), unadjusted

Sales

(average

daily),

unadjusted

(average

daily),

seasonally

seasonally

100

'102

.

"

adjusted..

110

adjusted

"

104

127

unadjusted

Stocks,

FACTORY EARNINGS

Weekly
All

AND

130

104
♦117
*

123

124

*113

FOURS—WFEKF V
S.

DEPT.

OF

Earnings—

manufacturing

$78.40

goods

$76.30

85.49

82.78

70.38

_

$78.99

84.45

Nondurable

70.17

67.32

Hours—
All

manufacturing

Durable

Hourly
All

40.0
40.6

40.3

40.8

41.1

41.6

39.1

39.2

39.6

$1.96

$1.96

$1.87

2.08

208

1.99

1.80

1.79

1.70

_

goods

goods

Earnings—

manufacturing

Durable

goods

REAL

>_

goods

ESTATE

AREAS

OF

FINANCING
U.

S.

and

of Jan. 1, 1956, as
against Jan. 1, 1955 basis of/125,828,319
Monthly Investment Plan. Ilncrease all stocks—/

tons.

tNumber

of

orders

not

reported

since

introduction

loan

IN

HOME

—

of

April

NON-FARM
LOAN

(000's

_

_

Bank and trust companies
Mutual

savings

Individuals

banks

**

BANK
...

omitted):

associations

Insurance companies

Miscellaneous




month

26

721,577

1,420,476

156,681

Savings

commodities

than

May

May 26__

1,295,076

Cotton

BOARD—Month

100):

Processed foods
AH commodities other

of

as

of

as

"

Commodity Group—
Farm

COM-

713,940

public! storage

Linters—Consumed

OF

May

251,990

PRICES, NEW SERIES —U. S. DEPT. OF

—

of

1,974,377

323,690
1,887,387

280,240

June

sales

1,882,354

June

Total sales

LABOR

DEPT.

—

BALES:

consuming establishments

Nondurable

June

sales

WHOLESALE

476,604

June

sales

Total round-lot transactions for account of members—
Total

month

Nondurable

sales

Other

June

June
off

4,469

204

.

970,280

June

initiated

purchases

Short

183,780

1,420,770

June

sales

transactions

Total

1,153,030

334,240

1,370,040

June

Total sales

Other

1,769,500

227,370

1,176,950

the floor—

purchases

Other

1,713,070

265,900

June

Total sales

Short

1,227,600

June

.

Total

LINTERS

ESTIMATE—U.
LABOR—Month of May:

sales

on

tons)

AVERAGE

June

sales

Other transactions initiated

32,322

8,141

9,794.750

June

BOUND-LOT

Other

AND

Stocks,

sales—

sales

Total sales

Short

(net

Sales

(SHARES):

Total

138,407

131,326

326

In

Sales

SALES ON THE N. Y. STOCK
EXCHANGE AND ROUND-LOT STOCK TRANSACTIONS
FOR ACCOUNT OF MEMBERS

Other

175,198

191,785

114,190

tons)

331,456

116,778

.

(net

tons)

RESERVE BANK

_

TOTAL ROUND-LOT STOCK

round-lot

231,294

anthracite

America

tons)__

America

DEPARTMENT

Round-lot purchases by dealers—
Number of shares

Short

12,029

$40,934,508

.June

Total

12,475

T"E

814,520

.June

sales.

2

June

sales by

(net

Active spindle hours

.June

other sales

Round-lot

Pennsylvania

Central

COTTON SPINNING
2

June

Customers'

$34,714,000

MINES)—

._

and

purchases)—t
.June

short

1,998,000

$41,871,000

ST

shares

Customers'

4,885,000

2,900,000

BRADSTREET,

OF

In

STOCK TRANSACTIONS FOR ODD-LOT ACCOUNT OF C
N.

of

MERCE—RUNNING

Stocks
.June 22

ON

6,967,000

;

(BUREAU

(net

South

Consumed

.June 16

SPECIALISTS

10,874,000

8,877,000''

3.18

414.7

.June 16

AND

$14,093,000
"2.864,000

>

3.21

3.41

414.5

ASSOCIATION:

SECURITIES

4,090,000
10,772,000

13,142

&

May

3.31

June 26

—

of

tons)

North

3.14

.June 26

DEALERS

$17,142,000

$59,901,000

,-a_

liabilities

STATES—DUN

To

3.35

.June 16

LOT

955

3,619,000

liabilities
service

exports

COTTON

EXCHANGE

80

S85

13,242,000

INCORPORATIONS (NEW) ?v

(net

3.36

.June 26

100

91

1,164
5,713,000

L___

liabilities

S.

3.36

lune 26

=

121

$28,450,000

_l_l£_

3.05

.June 26

AVERAGE

153

Month of March:

109.79

June 26

PRICE

liabilities

EXPORTS

June 26

Production

87
499

94

.

INC.—Month

2.70

June 26

Groi

168

92
463

132

.

number

liabilities

UNITED
,

U.

Utilities

186

118

liabilities

BUSINESS

MOODY'S BOND YIELD DAILY AVERAGES:

Group

245

107.44

105.00

-

BRADSTREET,

103.97
1

June 26

•

1040

65,782,634
459,545,003

...

number

Commercial

110.52

June 26

OIL, PAINT AND DRUG REPORTER

33,453,589

490,639,579

108.70

108.16

&

96.11

104.66
108.34

June 26

NATIONAL PAPERBOARD

89,656,737
$565,327,637

575

service

Construction

12.500c

June 26

Industrials

94,737,762

$524,093,168

number

Wholesale
Retail

14.800c

13.500c

.>

13.500c

June 26

Public

22.696,406

May:

number

Total

Railroad

of

number

Manufacturers'

38.275c

94.750c

June 26

Railroad

44,169,443

number

Commercial

at.

Government Bonds

36,165,613
22,036,024

57,641,519

70,889,351

City

FAILURES—DUN

$60.29

MOODY'S BOND PRICES DAILY AVERAGES:

S!

85,854,855

525,224,683

__

York

INC.—Month

$44.83

June 20

U.

83,340,551

$596,114,034

States

City

New

BUSINESS

273

June 20

Louis)

90,481,087
39,352,525

'

June 20

(St.

116,977,846 '

96,616,199

Total

J. QUOTATIONS):

Electrolytic copper—
Domestic refinery at—_——
Export refinery at
»

Lead

113,384,445

42,741,264
127,956,628

22,545,547

.June 19

M.

$34,946,386

82,912,848

144,388,829

Central

.June 19

&

$34,202,468

&

CITIES—Month

Central

Manufacturing

.June 19

(E.

INC.—215

DUN

—

Pacific

IRON AGE COMPOSITE PRICES:

METAL PRICES

VALUATION

Atlantic

Outside

INC—

BRADSTREET,

103

•

12,107,000 '1

RESERVE

100

kwh.)

(in 000

PERMIT

Central

New

Electric output

136

service

Mountain

INSTITUTE:

ELECTRIC

EDISON

274,619,000

-

RAILROADS—

in

10,226,000

(tons)

SYSTEM—1047-40 AVERAGE

installed

Atlantic

West

June 21

lignite

anthracite

281,707,000
8,056,000

126

;

England

319,619,000

113,166,000

South

(U.

17,902,000

export

May:

$412,067,000

138,001,000

June 21

COAL OUTPUT

AMERICAN

units

BRADSTREET,
..

305,516,000

Federal

22,939,000

16,618,000

i

653,505

June.21

•

_______—

24,584,000

78,000

(barrels)

,

*

$826,598
__

1

_

$815,849

148,423

151,870

470,242

•

$900,390
165,247

468,006

455,960
"

128,368

_

;L

lending institutions

I
—

127,796

135,603

294,887

299,684

276,283

400,730

407,791

423,649

$2,269,248

$2,270,996

$2,357,132

of
Total

*'••

72,000",

779,957

651,826

—-June 21

—————■

40,000

28,435,000

—.—__———.____—____June 21

______

and municipal—

39,000
28,942,000

-

22,309.000

May:

June 21

Public construction

213,454,000

165,285<000

15
15

186,753,000
19,931,000

ENGINEERING

—

235,835,000

209,027,000
23,382,000

$26,774,123
118,566,051
57,389,673

7,563,000

Locomotive

construction

S.

imports

imports (barrels)
consumption domestic and
(barrels)
;
Decrease all stock (barrels)
I

181,487,000

T

U.

232,449,000

*

products

15

freight loaded (number of cars)
June 16
freight received from connections (no. of cars)—June 16

ENGINEERING

250,454,000
225,625,000
24,790,000

294,698,000

...

(barrels)

Indicated

NEWS-RECORD:

Total

Ago

15,224,000

output (barrels).
output
(barrels)

gasoline

output

BUILDING

CIVIL

Year

Month

(barrels of 42 gal-

oil

crude

June 15

—

Previous

INSTITUTE—Month

each)

Natural

ASSOCIATION OF AMERICAN RAILROADS:
Revenue

PETROLEUM

Domestic

7,065,650

of that date: '

March:

Total domestic production
;

,

..

96.3

:

June
Crude runs to stills—daily average (bbls.)
June
Gasoline output (bbls.)
—June
Kerosene output (bbls.)________________ ____June
Distillate fuel oil output (bbls.)
June
Residual fuel oil output (bbls.z—_____—June
Stocks at refineries, bulk terminals, in transit, in pipe linesFinished and unfinished gasoline (bbls.) at
June
Kerosene (bbls.) at^_______—_________
June
Distillate fuel oil (bbls.) at_——____———-June
gallons

§94.0

1

T

are as

Latest
AMERICAN

*

(bbls. of

output—daily average

of quotations,

cases

•

either for the 'J

are

Month

1,716,000

of

*93.0

in

or,

A'gO

Ago

*2,290,000

Dates shown in first column

that date,

on

production and other figures for the

cover

Year

to—

AMERICAN PETROLEUM

Crude

Previous

Week

INSTITUTE:

(percent of capacity)-^

or

month available.

or

Thursday, June 28, 1956

.

•

Number 5546...The Commercial and Financial Chronicle

Volume 183

(3119)

Leveling Gff cf Boom Reported by N. A. P. Ai

Labor's "Magna Charla" and Wage-Price Spiral
iras:S

National Association of

Purchasing Agents', latest survey con^
firms previous month's report of the national
economy's
reduced pace. Anxiety over the short-term business outlook is
expressed by those replying.
The

Supporting the market determination

-

Survey
Committee, days — 19%, 120 days and over
Acting Chairman is Mar¬ —1%;
shall Pease, Assistant Manager of
Capital expenditure purchases,
Purchases,
the
Detroit
Edison as expected, stay predominantly
Company, Michigan, confirm the in the 120 days and over category,

of

the

national

with 62%

the 21%

production

in

reporting lower

June

is

the

same

and 59%

as

report

on

in

no

is

orders

new

shown

in

month

ago.

June,

received

orders

against

No

is

in

listed

a

by 47%,

On

copper,

Most

pressed

the

anxiety, over
business outlook,

some

short-term
"

improvement

expected

1

value

the

ports of Committee members, with
only 33% <• listing higher prices,
compared with 61% a month ago.
In June,

*

*

.

of
re¬

5%

There

were

the

show lower prices,
reported in'May.
57% reporting prices

10%

where

so

whereas 34% so re¬
ported last month. Adequate
coverage
of
essential
require¬
ments, for the present business
level, appears to be reducing the
buying volume.
same,

The

and
.

Co.,

accrued

ter

thereof.

being

concurrently

underwriters,

in
Canadian

of

group

including

Nesbitt,

Thomson & Co., Ltd.
,*7

The

June

mittee

reports

members

reduction

of

The

the

reflect

Com¬

further

a

in

inventories, espe¬
cially .unworked stocks. As re¬
ported last month, the accumula¬
tion of goods against market un¬
certainties is diminishing. There
31% with higher inventories

were
*

in June; 50%

said

change, and
19% reported less carry-over than
in May. "
Continuing last month's report
no

of declines in the number of
sons

on

pay

rolls, 22%

say

have fewer this month. The

per¬

they
num¬

ber reporting their rolls the same
*

increased to 64% from May's

Those
ment

58%.
indicating greater employ¬
dropped to 14%, the smallest.

?

number since March of 1954. Most

,

were

that

optimistic, however, feeling
employment would pick up

again later in the Summer, with

prospects for
and fourth quarters.
brighter

the

third

company has been organ¬
ized to own and operate a Port¬
land cement
and

(crushed

plant,

be

to

north

shore

in

27%

June,
is

noted

this

month.

corresponding drop from 39%

ed

and

Toronto

at

of

plant will have

the

than

60

days

at

Picton,

be

neces¬

make

the

worker

truly

economy.

while
the
hand-tomouth buyers increased to 5%.
On MRO supplies, the majority




in

and

Accordingly,

pany

true

the

Magna

Charta

"Survey"

'commodity

merce,' not
The
a

points

of

out,

article

or

a

in

pawn

of

com¬

totalitar¬

a

rities

will

be

applied,

essential

characteristics

of

or article of com¬
that it is in demand and
limited
supply, giving it a

in

are

value

in the market place deter¬
mined by the supply and
demand,

according
notes

to

"Survey,"

which

that

human labor possesses
these characteristics.
not

at

the

individual
the

as

own¬

are eager to
buy and pay for.
This commodity is
inalienably his,
and he is free to sell it in the
most

attractive market he
is an independent

find.

can

He

proprietor,

entrepreneur.

notes

$300,000,

totalling
of

commodity"

declaration

of

independence

But there is

sion, .the

by

bank

tween

that

the

(1)

slaves

points

unrelated

out,

chattels

labor is not

a

be¬

contentions

working people

or

and

are

(2)

commodity

With respect to
wages, the "Sur¬
says that "it is as pointless

vey"

criticize

from

DIVIDEND

4%%

bonds

1958-1967.

due

company

of

these

of

will

After

bonds

and

the securities,

have

the
ft

e

the

outstanding

$7,000,000 of 4%% first mortgage

bonds, $6,497,400 of 5%% 15 year
debentures,
232,050
conccrUhJe
preferred
shares
and
i,d^3,t-50
common

shares.

total

may

be.

can

used

to

The

Helio company's
principal
product, the Helio Courier, is an
executive-utility aircraft with the
extremely wide speed range of
30 mph. to over
160 mph. and

operates
new

easily from a 75 yard
The airplane establishes a

.

standard of safety as well as

performance.

the

DIVIDEND

NOTICES

best terms he can."

Helio Aircraft

Corp.
Operating in the
Black—To Expand

FEDERAL PAPER BOARD CO., Inc.

Now

Helio Aircraft

Corp. which

Dividend Notice
The Board of Directors of Federal

Paper Board Company, Inc. has this

day declared the following quarterly

pro¬

dividend:

„

duces

the
Helio
Courier
and
also does subcontract work in mil¬

itary

and

electronic

45^
The

components,

per

share

payable July

it

holders of

attained

$1,000,000

sales

is

and

of

now

close

to

The

facturing

1956

15,

record

to

is

stock¬

the close of

at

1956.

Robert A. Wallacb

plant and all other corpo¬

assets

dividend

Stock

business July 2,

operating

in the black.

Common Stock.

on

Common

reports that in the last 12 months,
has

of

Mid-States

Corp.,

Vice President and Secretary

Manu¬

June 20, 1956

of

Pittsburg,
Kansas, the present contract man¬

Bogota, New Jersey

ufacturer of the Helio
Courier, is
being acquired by Helio for an

exchange
sion

of

securities.

last

than

Mid-

DIVIDEND

military sub-contract divi¬
approxi¬
its work other

on

production

Courier.

Hudson

earned

year

mately $200,000

of

the

and
A

Helio

more

It

is

,

than $7,500,000

understood

that

per

67

Smelting Co., Limited
Dividend

of

dollar

one

and

Capital Stock of this Company, pay¬
able September 10, 1956, to share¬
holders

of

business

record

at

the

of

close

August 10, 1956.

on

j. f. McCarthy, Treasurer.

year.

the

NO.

Bay Mining

twenty five cents ($1.25) (Canadian)
per snare has been declared on the

The Mid-States plant is present¬
ly capable of producing up to 300
Couriers a year which at present
prices represents a retail volume
of

or

DIVIDEND

fast-

NOTICES

OTIS

not

their
article

ELEVATOR
COMPANY
At

a

meeting of the Board of Directors

of The Gamewell

Company held today,

Monday, June 25, 1956,

a

40

declared

cents

able

per

the

on

Company

on

holders

of
on

share

Common

dividend of

Stock

July 16, 1956,
record

NOTICE

was

to

of

the

stock¬

July 5, 1956.
E. W.

Common Dividend No. 199
A

quarterly dividend of $.50

share

on

SUNDBERG,

of

per

Stock has

the Common

J>een declared, payable July 27,
record

1956, to stockholders of
at

the close of business

6,

close

the

at

pay¬

1956.

on

July

Checks will be mailed.
H.

Fardwell, Treasurer

R.

June 20, 1956

The United Gas
AIRCRAFT RADIO.

.

Improvement

CORPORATION

Company

Boonton
New

No.

94

day declared the following
dividend:

On
:

i

!!

June

of

Aircraft

declared
cents

18,

a

(20c)

common

payable

per

stock

of

August

stockholders

the Directors

1956,
Radio

of

60

Corporation

dividend

of

share

the

15,

twenty
on

record

at

M.

per

September

share

Stock,
15,

on

the

payable
1956

ihe

close

ot.

at

business

August 15. 1956

to
the

The Gosdyear Tire ( Rubber Co.

By Arden E. Firestone,

Secretary

KINGSLAND, Secretary

NOTICE

quarterly dividend of 50c

share

on

June 25, 1956

share, has been
declared payable September 28,
1956

to

stockholders

of

record

August 31, 1956.
A quarterly dividend of $1.06%
per share on the 4%% Preferred
Stock has been declared payable
October 1, 1956 to stockholders
of record August 31, 1956.
Johns Hopkins, Treasurer
Philadelphia, June 26, 1956

THE

per

the Common Stock, par

to

stockholders of record

the

company,

1956,

cents

A

value $13.50 per

Common

close of business August 1, 1956.
H.

DIVIDEND

DIVIDEND NOTICE

Jersey

GREATEST NAME IN RUBBER

ap¬

offset

work for less than he can
get else¬
where.
Each party
obtains the

a

mortage:

and

year

research and de¬

on

which

New York,

chartered

first

one

otherwise taxable income.

Treasurer

the

purchase $7,~

000,000- of

1956

the

obtained
a

to

of

com¬

to

least

proximately $1,500,000 by the end

more

The Board of Directors to¬

Canada

velopment

employer for not
than he must as to
blame the worker for
refusing to
paying

at

expenditures

strip.

|

business

Dividend

in

for

for

widespread confu¬

article

proposed
plants and facilities and to im ml

has

Helio anticipates no diversion of
revenue for income tax
pay¬

as

labor, ah assertion that the workingman is not a slave or chattel
to be bought and sold in the mar¬
ket place."

the

company

an

His

opportunity
advancement is limited only
his ability, energy and dili¬

for

being
superficially strong in humanitar¬
ian
appeal,
the
"Survey"
ac¬
knowledges that "it sounds like t

repayment of outstanding interim
construction

expanding

area.

possibly more, due to the fact that
the very large past and current

men

Describing the statement "labor
is

sec a-:

after

the

industry in the North¬

ment

commodity-r-

States

commodity

merce

initial

from the sale of. these

aluminum

any

his capacity to work—which other

rate

Ont.,

basic ingredients of cement.
The net proceeds to the

for

of

loss

-

option bJT^e company near
Picton
contaid^ substantial de¬
posits of limestone and clay, the

issuance

same,

-

under

public sale

remained

components

v

worker is represented
er
of
a
valuable

a

ian game."

The cement

planned

a

supplier

electronics
east

and

becoming

major

-

is*indis¬

unrealistic

capacity of 1,650,000 (U. S.) bar¬
rels annually. Lands acquired or

A

reported in the 60-day
Those indicating lead time

more

And

Rochester, N- Y.

to

is

32%,
range.

Ontario

Picton, Ont., and bulk storage and
bagging facilities to be construct¬

commitment

in May,

of those buying

in the 30-day range on production
materials

iLake

the

on

is

enterprise, profit

working capital.

Policy

increase from 22%

An
to

production

constructed
of

a

aggregate

limestone)

The

Buying

manufacturing plant

commercial

a

would

"lies in the very fact that labor is

$700

per

A portion of the issues is

a

real

to destroy private enterprise
resort
to
socialism, which

"The

priced,

are

by

the

chattel.

dollars, at $687.95

offered.:

earnings to

measures

labor—it

would

asso¬

shares, and integral multiples

Canada

of

and

par

being offered only
in
the
ratio
of
$700
principal
amount of debentures, 25 conver¬
tible preferred shares and 75 com¬
mon

of

(—that is, the commodity charac¬

(Canadian) principal amount of
debentures, $10.18 per preferred
share and $1.02 per common share.
Securities

ratio

ability of the worker to buy the
product, has risen 76% while pro¬
ductivity
(average
output
per
man-hour) has increased 77%, ac¬
cording to the "Survey."

by Kid¬

are

interest

The

prices,, which

Ontario

and

securities

than offset

warns that to abol¬
ish market determination of
wages

f

Inventories

goods.-

696,150 •labor,"

Lake

than

more

more

by the rise in prices of finished

Co., Ltd., is to

&

in terms of U. S.

easing
prices is indicated in the June
*

Cement

Peabody

ciates.

of

and

of

be made today (June 28)

der,

Commodity Prices
continuation

shares

Portland

has been

The article

stock, $10

(Canadian),

have

a

quadrupled since 1932, but the in¬

sary

common

through the fourth quarter of
year. There were
46% who
reported that their expenditures
would continue, and 54% reported
that they would level off.

workers

crease

preferred

and

A

including

:

Public

vertible

to

dis¬

Average hourly earnings of fac¬
tory

offering
of
$6,497,400
(Canadian) 5%% debentures due
1971, 232,050 shares of 5% con¬

but

prior

that determine the

•

Portland Cement Firm

of

wages can
the
market

from

tribution of income.

Kidder, Peabody Group

ex¬

exempted

processes

paper,

Offers Securities of

second
-

to

commodity" and that

scrap,

waste

oils,

through higher
"spiral"

wage-price

been

the
free

gence.

be

monel.

..

inconclusive.

ammonia,

The

have

for any in¬

pay

wages

The first

commerce,

months

putably true in the United States,, any

a

Brass,

are:

will

in

of

recent

passed the break-even level
is rapidly on the
way to

a

given one more
twist, in a long series of futile at¬
tempts to show that "labor is not

Aluminum,
products, nickel, steel
(structural, alloy, plate, pipe,
stainless, sheets and shapes), and

special

whole

a

will

some copper

question, on whether the current
rising total of expenditures on in¬
dustrial
plant
and
equipment
would continue, or level off, in
the
second
half
of 1956, were
somewhat

side

York,

great deal.

a

prices.

In short supply are:

working time. On
production
items,
there
is
a
shortening of ordering lead time,
-while
MRO
and
capital goods
show little change.

those answering the question

as

Aluminum,

scrap, steel

copper

linseed oil.

reduced

to the June

down

rubber,. vegetable

down gradually. Employ¬
ment is down again due to layoffs

answers

the

mercury,

worked

The

,

Changes

steel items, phenol, alcohol,
paper,
meats,
lumber, gasoline,
and electrical equipment.

new

New

reasoning behind this, the
"Survey" explains, is that labor

reported by
this month

are:

of

The

members

On the up side

lot

a

strikes,

lose

some

so reporting in May.
Commodity prices continue to
ease, and
inventories are being

and

advances

risk

which says that members of
large
union groups not
only cannot win
but might, in the event of

best be categorized as weak.

can

with 41%

*

Commodity

Company

creases

Price

by

26%

change

hand-to-moyth basis.

Committee

only 25%, compared with 33% in
May, while 28% reported reduced
orders

Trust

so

Specific

change in this
category,
whereas 51%
so
re¬
ported a month ago. An improve¬
ment

a

would

issue of "The Guaranty
published by Guaranty

Survey,"

reporting 60 days' lead time, with
2% reporting 30 days and 7% are

in May, there are
20% who say production is better,
compared with 28% last month,

percentage

the July

reporting. The next
largest grouping is in the 90-day
range, with 17%. There are 12%

economy indicated last month. Al¬

America

by striking, with little chance of
lasting material gain for them¬
selves, according to an article in

whose

pace

650,000 United Steelwork-

of

ers

Business

though

The

.

reduced

Mass., base has in

and refuting

commodity," Guaranty
Trust monthly bulletin
upholds bargaining freedom of employee
and employer. Claims steel strike offers little
chance of lasting
:
material gain since wages will be offset
by higher prices.

Survey re¬ continue to buy in the 30- to 90ports of Purchasing Executives, day range. The percentages re¬
,Who comprise the National Asso¬ ported are:
Hand-to-mouth—16%,
ciation
of
Purchasing
Agents 30 days—39%, 60 days—26%, 9U
-

of wages

the superficial view that Vlabor is not

Business

June

51

*s.

The Commercial and Financial
52

Chronicle... Thursday, June 28, 195

»

(3120)
funds,

BUSINESS BUZZ

in

appropriated for use
good-this contin¬

are

making

i

gency.

Finally, there is Social Secu

Washington
from the Nation'*

CORP.

-

gJ

a

law which vest?

payroll-tax paying beneficiarie;
with

X "

entitlement ti
Trustees. &

specific

a

pensions.

**

xl I l/U/

Capital

VAN GILTEDGE

INVESTMENT

A

Behind-the-Scene Interpretation!

This is

rity.

•

•

•

Yet

Old

Age

the

Survivors

the

Insurance

Trust

anc

just the

Fund

pother day indicated by implica¬
that after five years the
general taxpayer would have to
begin to shell out to pay these
pensions; the payroll tax would
not be enough. This is no past
over-hanging appropriation, but
it is a legal, binding obligation
of growing magnitude.

tion

as some
seen as

And

ects.

possible advantage as well

would

appropriated

be

would

grave shortcomings are
possible consequences of

its various legal proj¬
the amount which

on

year

WASHINGTON, D. C.—Some
real

than that amount.
If the Navy said it could spend
but $300 million in say, fiscal
1957, on the construction of air¬
be

proposal the Senate.-last
adopted which purports to
T>ut Federal budget and ac¬
counting on an accrual basis.,
the

week

more

no

would,

Congress

carriers,

craft

Is

.

disseptto^N^Plj^riate $300 million, and
vote
the Senate approved this
that is all that could be spent
proposal, recommended bjl 4her, !in.tot year building super airsecond Hoover Commissi^£hdf
crattr carriers,
Without

single

a

specifically by Presi-

endorsed

the

What

•'

shooffiig at«f

is

bill

illustrated by an example, which in the technical
difficulty of explaining the sub¬
ject can be illustrated perhaps
be

may

by

only

Senate

various

for

"I

appropriations remain available
until spent, sometimes lasting
over several years. For instance,
as Senator Harry F.
Byrd (D.,
in

ated

than

funds

more

fiscal

unspent

estimates,

he

Thus,

to

tionship

This

exact

amounts

would

be

fiscal

this accu¬
appropri¬
ated money.
Specifically the
budget
is
only
an
estimate,

this

only

informed

an

will be spent.

The Example

of

case

authorizing the

be the
Congress

would

example

The

hypothetical

construction of

four super aircraft carriers
to cost some $350 million apiece.
As it now goes Congress will
say,

first
and

authorization bill
an appropria¬

an

pass

subsequently

tion

bill

for
cost

an

aircraft car¬

four

to

riers

aggregate,

of

$1.4 billion.
.
That money remains available
to build four aircraft carriers

say,

until it is spent, even

if it takes
to build them all.

six years
Hence

Congress is now prac¬

tically powerless to control the
amount that will be spent in any
one

year

If

riers.

aircraft

super

on

the

work

goes

car¬

faster

anticipated, they might be

than

moment

Appropriations Commit¬
tee of the House, Rep. Clarence
Cannon
of
Missouri, - are reported to be objecting to the
bill.
It is said, however, that
their objections are more to¬

this

bill

good chance next year.

made

proposition law,

however,

toward

economy

influence

its

Houses

both

if

Even

this

tions

'

.

could

negligible for several

be

years.

place, there is no

apparent intention to apply the
thing retroactively. If the Con¬

really got religion about
economy, it could review all the
past $74.6 billion of unspent
appropriations,
even
if
that

gress

task,

herculean

an

begin next year to provide cur¬

While
the

in

(even

a

Navy

Yard) the prime (if private)

Yard)

or

in a Navy
to be compensated

subcontractors
have

Senator

total
eral

rivals
debt.

Some

over¬

an

' And

accounting,

(if

appropriations for current

estimated

zeal for

rates

any

of expenditure.

etc., etc., would be handled

in

manner.
\

,

to

have

that

a

chance

to

pass,

and

There

gage

are,

for

instance,

Farmers Home

Ad¬

so

Home

time the

money

is dis¬

government ex¬
pressly contracts to take back
this supposedly 40-year mort¬
gage
at any time after five
years that the primary lender

the

wants

varieties of FHA mort¬

insurance,

the

the

bursed,

binding.

X-teen

Finally, with the Senate pas¬

Federal

on




Joins Clement Evans Co.
(Special to The Financial

ORLANDO,

in

numerous

his unpaid balance back

cash.

Again,

no

has

Clement

Fla.

Chronicle)

—

become
A.

Howard
associat(
& Con

Evans

Inc. of Atlanta. Mr. Wheel'
previously - with
Leed
Wheeler & Alleman, Inc.

pany,
was

/

further

government-guaranteed loans.
At

1, 1958.

standing

With Sutro Bros. & Co.
(Special to The Financial

Chronicle)

Fla.—Andre
T.
Balconis,
Robert
A.
Dah
John
H.
McGowan,
Edward
PALM

BEACH,

Miller and Elwood

B. Van Voo

become associate
with Sutro Bros. & Co., 316 Sou*

hees, Jr. have
County Road.

TRADING MARKETS
Botany Mills
Fashion Park
Indian Head Mills
Geo. E. Keith Co.

Morgan Engineering
National Co.

Riverside Cement

Carl Marks & Co. Inc.
FOREIGN

SECURITIES

Sightmaster Corp.

50 BROAD STREET

•

SPECIALISTS

& DO.

NEW YORK 4, N. Y.
Investment

actually would spend in any one

Budget Bureau

Farmers

legally

not

are

to Jan.

passed

House

entices private
institutions to disburse money on

they

July 1, -1957.
The period <
exchange of convertible certif:
cates for bonds has been extende

to

is

how much it

as

the

Spending

bill there is no
concurrent disposition in either
the Senate or House to restrain

would submit an
approved
by the

Each agency
estimate

plan for

involve definite,
legal liabilities, for Congress to
appropriate money for as long
as 40 years hence, and in some
cases,
to eternity.
Others in¬
volve clear moral obligations,

why it has a chance.
It scarcely even indirectly
threatens a single subsidy.

different

new

the

accrual system of budget and

glorifying

extende

bonds, due Oct. 1, 1970, is

multitudinous Federal subsidies

everything from super aircraft
carriers to great power dams,
a

this

when

budget and
accounting scheme does not of
itself jeopardize a single of the

recommendations which appears

new

day

the Administration's bill

Fed¬

Exchange Offer

Wheeler

ministration "insure d" loans.

if

Bond

new

system longprojects 1 for

the

spending

pay

schemes.
As a
matter of fact, it is one of the
few major Hoover Commission

The New System
Under

to

con¬

even

Colombia Extends

years

such undertaking.

the

Second,

and

for their losses.

term

Senate passed

their

of these

credit"

40

same

years

admitted

the

the

of

Byrd

not coincide wi¬

the "Chronicle's" own views.]

with
On

future

dime

appropriations.
believes

hanging

and

for

of the authority's debt.

moral obliga¬

for
a

public housing, in

The Senate debate disclosed no

Congress might cancel

contract

isn't

and may or may

being notified that the exchan*
offer for Republic of Colombi
3% external sinking fund doll,

to each
"public housing authority"
sum equivalent to the service

annually

and

rent

if it took six years.

which

[This column is intended to r<
fleet the ''behind the scene" inte>
pretation from the nation's Capit ■'

lombian Mortgage Bank bonds ai

local
a

perpetual world peace, serenity
and international good will.

contract pledges its

faith

"full

its

tingencies

In the first

were

however,

scheme,

promoting

instalments.

Federal Government

by solemn

greatest weakness is its limited
applicability only to appropria¬
tions. Completely escaping this
control is the whole stable full

there

Is Limited

would be $350
million, instead of $233 million

per year,

this

see

alongsid*

and

population,

the United Nations in

standing appropria¬

no

the

which

observers

fiscal

seasoned

of contingent and

built in four years and the an¬
nual expenditure

As

amendment

16th

Holders of various issues of Ct

Or there is

Contingencies Escape

late

24

off

priate
money
Congress
was
seeking to avoid appropriating
at once in the first place.

*

it might have a

year,

the

guaranteeing the sobriety oi

by

a

pay

tion, but a contractual binding
of future Congresses to appro¬

frustrated.

underlying principles, and that
if the House does not pass the

is

This

irresponsible fis¬
place along¬

in

to

annual

additional

unspent

ac¬

if enacted, wil1

even

promise

and

government

appropriations
constantly over-hanging the fis¬
cal
picture, even the feeblest
disposition to economize can be

the

than

technicalities

act,

down

4%

With tens

control.

under which a Fed¬
building is acquired with

chase

spendable

and

ranking

the

of the

ward

fiscal

of billions of dollars of

the lease-pur¬

there is

Then

eral

k(:;'
of

system

institutional investors.

of all

for a future Con¬
should any ever become
economy-minded,
to
exercise
some

the

be

ac¬

gress,

also.

the

accrual

the way open

that

;

spent in any specific '

Republican, Rep. John Taber of
New York, and the Chairman

to

as

guess,

bill

think that the Kennedy-

alter¬
wrecking

The

loans.

would

native

present system. It does leave

the

year

At

officials readily agree is

how much

less

or

ob¬

counting system, is better than

cannot become law, :
however, until the House passes

The President's
budget likewise does not control

impartial

billion or so

to $20

insured

on

the

to

are

depressed, the governconfronted with

paying up

Better Than Before

relate

appropriations

they

chart.
market ever

Should the housing
become

Payne bill, the new

to

what

knows

ment would be

Nevertheless,

scheme

new

annual

spending, in view of
mulation of unspent

in

without consulting a

scope

takings.

witih
control

Objections

priated.

which

range

which now

the

years

servers

amount appro¬

the

from

House

rela¬

the most casual

has only

trend is
of longFederal spending under¬

enlarge

to

current

the

Actually,

them."

diture

amount spent

actual

side

official

FHA

one

any

seldom

annual rate of expen¬

the

over

for

accrual

the

escape*

as

cal climate, take its

the
that

spending schemes.

and

welfare

legislative

ineffective

over-hang of

and unspent appro¬
priations, the Congress in any
one year can do little to control
the
actual
amount spent, be¬
the

available

are

approved

cause

says

balances

at $65.9 billion.

With this great

it

review of Con¬

prior appropriations

it is

reality.1.'fAf

in the present

clients—a slight twist and
'Adlai'—another twist and it says 'Estes'—
another one and you get 'lke'l,rV »

in good with your

"Keep

Reduction in unexpended
carried over from

"(2)

mechanisms

counting,

•

coming fiscal year; and

appropriations at the beginning
of fiscal
1957 will amount to
about $140.9 billion. The Presi¬
dent estimated spending in that
year

So

all major appropria¬
for
expenditure
in the

tions

spent.

recent Ad-

all

this setting

from facing

of

gress

In

adopt

system:

"(1) Annual

were

and

own

characteristic of this country to

•

Federal

urgently needed in the

the Senate,
nine fiscal
has appropri¬

Congress

years

believe

I

which

objec¬
to be

of two

its

ministrations'* fiscal irresponsi¬

bility.

the
bill:

is

it

direction

tives

the

of

patron of this bill
expressly a step

a

am

the

in

last

the

of

six

>

behalf

on

because

to

explained

Va.)

of

be spent

Byrd said to

Senator

As

is making appropriations
objects and many

gress

...

$200 mil¬

for this purpose.

present time the Con-;

At the

pensable and useful mechanism.
However, in its present status
it is merely a reflex action oi
a
Congress
vaguely
uneasy
about what lies ahead in view

budget or just curtail spending
little, it could appropriate

over-simplifica¬

some

"*

The supposed advantage of
system is that if Congress
this svstemmood to balance the
is that it C
were in a
,

a

tion.

system is ot

only a mechanism. With
a Congress determined to main¬
tain the government's solvency,
it would
be an almost indis¬

this

only $200 million, and
lion is all that could

law, this new

made

itself

,

.

,

if

Even

accrual accounting

virtu*

dent Eisenhower.

Mechanism

Merely

A

sage

the

of

TEL:

HANOVER 2-0050

this

growth

of

new

...

".'-Ay

—'

^

.

Wiu.w/M fc.wy.MAU Ipwwn u u

..V.

\

TELETYPE NY 1-971

Securities

10 Post Office Square,
Telephone
HUbbard 2-1990

Boston 9, Mass.
Teletype
BS 69