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Volume 136



New York, Saturday, June 3 1933.

Number 3545

The Financial Situation
HE Administration bill providing for the elimi- chosen path, with ultimate good as its object, but
nation of gold as a medium for meeting the unmindful of the fact that resort to the expedient
payment of all obligations—past, present and future of repudiation and dishonor must surely in the end
—passed the House of Representatives on Monday bring the penalties which it invites by its mereof the present week by the decisive vote of 283 to 57, tricious conduct.
For the moment all this is lost sight of, and only
to the satisfaction of all those who would debase
of a wholesale the presence of multiplying signs of trade revival,
the American unit of value as part
scheme for inflating values—a proposal so popular which is concurrently taking place, and is misat the moment—and to the chagrin and mortifica- takenly attributed to the program of inflation
tion of those who believe in the sanctity of contracts mapped out,though there are numerous independent
and desire to see the American unit of value kept causes to explain this revival, and, indeed, actual
unimpaired and the credit of the Government pre- inflation has not yet occurred;—at present only this
served at the high standard which every Administra- attracts attention. When, however, prosperity gets
tion of the Government, of whatever political faith, under full swing it will, we may be sure, be recoghas deemed it its bounden duty to defend and protect nized that the undermining of the country's standever since resumption of specie payments on Jan. 1 ard of values constitutes a bar upon the permanence
1879, following the long period of greenback infla- of trade recovery, and then will arise a demand that
tion that marked the period after the close of the the hindrances to enduring trade activity shall be
Civil War on July 1 1865. In the United States removed by eliminating the shackles which are now
Senate an effort is to be made to change the meas- being forged with such frenzied fury. It is to be
ure, so far at least as the retroactive feature of the hoped that the popular awakening will not be degold provision is concerned, so that it may not layed until incalculable damage shall have been done
be said that the country, through its legislative and an actual setback has developed. This menace
body, has deliberately engaged in the violation of can only be avoided by enlightening the public mind,
contracts and of pledged faith, but it is known that and every effort must be made to that end.
In that view the greatest encouragement must
the effort will prove futile.
during the last be given to movements like those now being inauguOf all the numerous steps taken
three months to debase and to depreciate the intrin- rated by some of the prominent mercantile and
sic value of the American unit of value, the gold trade organizations throughout the country. On
dollar, this last stab is most to be deplored. It Thursday a resolution was adopted by the Chamber
cannot fail to lower the United States in the estima- of Commerce of the State of New York urging Presition of the world, and, in fact, has already done so dent Roosevelt to refrain from any act under present
if we may judge by European comment, and it will or future emergency which will tend to impair the
surely lower the country in the estimation of our gold standard. This is as it should be, and it should
own people with the lapse of time when its character be followed by similar protests from other mercanand significance shall have been driven home and tile and financial bodies throughout the length and
its meaning made plain. Now in a momentary ebul- breadth of the land. The resolution was contained
lition of frenzied enthusiasm quite common when in a report submitted by Edward P.Maynard,Chairemotion carries the crowd off its feet, the act man of the Chamber's Committee on Finance and
is finding wide support. The lure now is the infla- Currency. Mr. Maynard well said that the Chamber
tion of values, which is the aim of all the recent should express its opinion that a sound and persimilar moves, on the idea that prosperity can manent recovery in industry and business can be
thereby be restored. What captures the unthinking accomplished only by avoiding currency inflation.
masses is that there is to be credit and currency He pointed out that any decrease in the gold basis
inflation on a scale never before attempted by any of the dollar or any other form of currency debasesolvent nation. The experience of Germany in the ment would prevent permanent recovery and in the
years following the war, when billions and trillions end work an injury to the nation's business. The
of paper marks were put out, is not exactly in point, resolution was adopted by the Chamber by an overas this represented not a deliberate attempt to de- whelming vote.
The action of the New York Chamber should be
base and depreciate the mark, as in our case, but
aimless floundering about of a country under duplicated in mercantile and financial quarters
going the process of financial dissolution. The everywhere. For the reasons already stated, there
United States, on the other hand,is pursuing its own is more or less reluctance about antagonizing the



Financial Chronicle

June 3 1933

policy of the Administration. But the situation is its purport is plain enough. The intention
is to
as urgent as during the Bryan campaigns of 1896 abolish the distinction between gold and other forms
and 1900, and sound money organizations should be of money and to permit payment "in any
coin or
formed everywhere to combat the threatening evils currency which is legal tender for public
and private
involved in persistence in the present unfortunate debts." What are the different forms of coin
course. As on those earlier occasions, the sober currency which may thus be tendered in payment
sense of the community should assert itself in vigi- public and private debts, even though there may
be a
lant opposition to the mistaken policies that are specific declaration for payment in
gold? The
being so sedulously pursued. Business men with- monthly Treasury statement, which indicates
out regard to party affiliations should unite, sound amounts of money in circulation mentions all of
money Democrats joining with Republicans in form- following: Gold coin, gold certificates, standard
ing committees and organizations with a view to silver dollars, silver certificates, Treasury
notes of
making common cause against the efforts to upset 1890, subsidiary silver, minor coin, United States
the country's whole monetary system. The eco- notes, Federal Reserve notes, Federal Reserve bank
nomic welfare Of the United States is more seriously notes, National bank notes.
threatened than in any of the previous periods when
Among all these the only tokens of real value are
political campaigns had to be conducted to deal with gold and silver; all the others are paper representathe matter. Not a moment should be lost in engag- tives. As gold is to be no longer available,
does not
ing in a wholesale crusade against the monetary that at once reduce the country to the silver
hallucinations that have taken possession of the And this being so, does not this necessarily
party in power.
all efforts at genuine stabilization? Remember that
Apart entirely from the ethical considerations the interchangeability of the different forms of
curwhich count so strongly against this latest move to rency and money as provided under the gold
standeliminate gold as the unit of value, a most serious ard Act of March 4 1900 is expressly abolished.
feature is that it leaves, and must continue to leave, And if silver is thus to be the ultimate
the true value of the American dollar always an factor, will not the dollar thereafter be
indeterminate quantity. The purpose of Mr. Roose- upon the fluctuations in silver? Suppose the
Presivelt is to bring about a standardization of values, dent succeeds in bringing about an
but how is this to be effected, or can it be effected, arrangement for the stabilization of
the dollar, in
if gold in foreign transactions is to be completely terms of gold, will not the price of
silver in the
eliminated as a factor? Suppose the gold content markets of the world be the governing factor
in fixof the dollar be reduced to the extent of 25% or 40%, ing the value of the dollar?
is the new dollar to be merely something to look at.
This appears the more likely inasmuch as the
since it is not to be used in current transactions? Thomas amendment provides in express
terms for
Is it to be merely something for contemplation by the unlimited coinage of silver. It is
true that the
the outside world in the hope that this outside world President, by this same amendment,
is empowered
will recognize it as symbolic of what we would like to fix the relation between gold and
silver, and by
to have it regarded?
the utilization of that power it is expected to estabSecretary Woodin last week, in undertaking to lish a permanent relationship between
the two
explain the purpose of the joint resolution by which metals. That relation, thus determined,
may not be
the statutory departure from the gold standard is 16 to 1, as the silverites would have it;
it may be
to the taken, observed that gold was not now being 20 to 1 or 25 to 1, but that does not alter
the fact
paid out, nor was it available for payment upon that with huge masses of silver constantly
public or private debts, and went on to say that into the country's monetary system, silver
will rerecently the Thomas amendment to the Farm Relief main the governing factor in any event,
Act had made all coins and currencies of the United as the production of silver is certain to
be enorStates legal tender for the payment of every debt, mously increased under the plan for the
rehabilitaboth public and private. Th;e, however, to the lan- tion of the white metal which lies at the
bottom of
guage used in the amendment, doubt had arisen the whole scheme. The Thomas amendment
whether obligations expressed as payable in a par- to be carefully studied in the light of that
circumticular kind of money, such as gold coin, might be stance.
satisfied by payment in other forms of legal tender.
It may be deemed an exaggeration to say
One of the purposes of the joint resolution, he ob- that the Thomas amendment provides
for the unserved, is to remove any doubt and to avoid confu- limited coinage of silver, but the language
is clear
sion, so that debtors and creditors may have a clear and unmistakable on that point. We
published the
definition of their legal position. Another purpose full text of the Farm Relief Act containing the
of the joint resolution, he declared, is to make clear Thomas amendment, or inflation rider,
in our issue
that future obligations, public and private, shall not of May 20, pages 3415-3420, and by
reference to page
contain the gold clause. The Thomas amendment 3420 it will be found that under Title
III, Section
(or inflationary rider) did not contain specific pro- 43, Subdivision (2), the President is empowered
vision to this effect. "Such a provision is contained proclamation to fix the weight of the
gold dollar in
in the resolution. The resolution makes it clear that grains nine-tenths fine and also to fix the weight
all obligations, past and future, will be upon the of the silver dollar in grains nine-tenths fine at a
same footing."
definite fixed ratio in relation to the gold dollar at
This makes it important to examine anew more such amounts as he finds necessary from
his investiclosely and more minutely the provisions referred gation to stabilize domestic prices or
to protect the
to as set out in the Thomas amendment. As was foreign commerce against the adverse effect of depointed out by us last week in our comment upon preciated foreign currencies, and to provide for the
the joint resolution, while it is not altogether clear unlimited coinage of such gold and silver at the
, what interpretation is to be given to the resolution, ratio so fixed."

Volume 136

Financial Chronicle


There is no limit of time asto the application of this Civil War. Evidently it is time for the whole 'citiprovision, and therefore it continues indefinitely, zenry to bestir itself so as to guard against the danuntil the amendment is altered or once more removed gers that threaten if the Administration persists
from the statute book. There is a further provision in its present course and thereby invites such serious
relating to silver—Sec. 45(a)—by which the Presi- ill consequences.
dent is authorized to accept silver in payment of
UST now the country is being confronted with all
the whole or any part of the principal or interest j
sorts of anomalies, and not the least of these
any foreign govnow due, or to become due, from
account of any indebted- is the congestion of unemployed funds at the moneernment or governments on
ness to the United States, such silver to be accepted tary centers of the country, at the very time when
at not to exceed the price of 50c. an ounce in United the country is being prepared for a new era of credit
States currency. This provision is limited to a and bank inflation with the view to carrying out
period of six months from the date of the passage of the schemes of the new school of theorists for the
the Act, and the aggregate of the silver accepted may social and economic regeneration of the country.
not exceed $200,000,000, but there is absolutely no A striking instance of the kind has been witnessed
termination prescribed for the coinage of silver, and, the present week. The New York Clearing House
as a matter of fact, as is evident from the excerpt Association, after having repeatedly reduced the
quoted, the language itself says "unlimited" coinage rate of interest allowed on deposits, has felt itself
of both gold and silver at the ratio determined upon. impelled to make a new cut in the rate. In the case
Evidently there is to be silver galore, and in such a of deposits payable within 90 days, the reduction
state of things, can the country escape dropping to a amounts to a full 50%,the rate having been reduced
of 1% per annum, the new
from 1 2 of 1% to
silver basis? It will be a marvel if it does not.
effective yesterday, June 2.
A further portion of the Thomas amendment, or rate having become
inflationary rider, provides that "in case the Gov- This is the lowest rate ever fixed by the Clearing
ernment of the United States enters into an agree- House, and at the extraordinarily low figure of y
of 1% is obviously close to nothing. The banks, of
ment with any government or governments under
the terms of which the ratio between the value of course, have no alternative, since they are so overgold and other currency issued by the United States loaded with idle funds that money is virtually unand by any such government or governments is lendable. Evidence to that effect is seen in a conestablished, the President may fix the weight of the current further reduction the present week in the
gold dollar in accordance with the ratio so agreed open market rate for bankers' acceptances. A reduc/
upon, and such gold dollar, the weight of which is tion of 18 of 1% in the discounts for bills of all
so fixed, shall be the standard unit of value, and all maturities was made on Thursday, bringing the disforms of money issued or coined by the United States count for bills running from one to 90 days down
shall be maintained at a parity with this standard to only V of 1% bid and % of 1% asked. Let the
and it shall be the duty of the Secretary of the reader ponder well the degree of congestion involved
Treasury to maintain such parity." This direction in rates down to such abnormally low figures.
In other forms of borrowing, rates are quoted on
to maintain other forms of money on a parity with
the gold dollar has served to obscure the presence the same diminutive basis. Call loans on the Stock
of the provision for the unlimited coinage of silver Exchange command only 1% per annum, while outand to disarm criticism, on the supposition that it side the Stock Exchange loans on demand are freely
meant the continuance in force of the similar pro- obtainable at only 1 2 of 1% per year. The United
vision under the Gold Standard Act of March 14 States Treasury is now selling 91-day Treasury bills
1900, but the declaration, it would seem, is now ren- on a discount basis of only 0.32% per annum, that
dered entirely nugatory and non-existent by the having been the rate realized at a sale of $100,352,000
joint resolution which undertakes to pull the coun- of 91-day bills on Friday of last week. Yet the Fedtry's monetary system off the gold basis by statutory eral Reserve banks, by direction of the United States
enactment, and which, among other things, provides Treasury, have just resumed the purchase of United
that "Every provision contained in or made with States Government securities, $25,114,000 having
respect to any obligation which purports to give the been acquired last week and $27,866,000 the present
obligee a right to require payment in gold or a par- week on the assumption that what is needed is more
ticular kind of coin or currency, or in an amount bank credit, while the exact reverse is the case, as
in money of the,United States measured thereby, is money market conditions so palpably demonstrate.
declared to be against public policy; and no such
The incidental harm is completely overlooked.
provision shall be contained in or made with respect One phase of this is the inability of the banks to
to any obligation hereafter incurred"; further, that make an adequate return on their capital and re"every obligation heretofore or hereafter incurred, sources, a circumstance which is being completely
whether or not any such provision is contained overlooked. The banks have had most serious
therein or made with respect thereto, shall be dis- troubles to contend with during recent years, as is
charged upon payment, dollar for dollar,in any coin evident from the crop of bank failures which has
or currency which at the time of payment is legal overwhelmed all parts of the country. The time has
certainly arrived when the banks ought to be
tender for public and private debts."
It is thus made evident that other grave dangers allowed to earn a decent rate Of return, which means
beset the country by reason of the new monetary that they ought to be relieved from the constant
and economic program projected, entirely apart injection of new credit through open market purfrom the fact that the Federal Reserve banks are to chases of United States Government securities, the
put afloat $3,000,000,000 of new credit, and that the proceeds of which find their way into the banks. It
President also has authority to put out another is safe to say that at the present low levels of return
$3,000,000,000 of greenbacks under an Act put on the banks are close to a starvation point. And their
the statute book back in 1862 at the time of the future will not be assured until they once more


Financial Chronicle

June 3 1933

can find more remunerative rates of return. They and other Treasury currencies. Upon making the
ought to be allowed to operate under normal con- substitution the Treasury deposited gold certificates
ditions, when proper correction would soon ensue, with the Federal Reserve banks.
instead of being overwhelmed with new supplies
Federal Reserve notes in circulation further deof funds at a time when they are obliged to struggle creased during the week from $3,221,429,000 to
so fiercely to put to profitable use the vast masses $3,203,102,000, but the greater part of this reduction
of idle funds that now clog the market. Purchases was offset by an increase in the amount of Federal
of United States Government securities through the Reserve bank notes in circulation, against which no
open market operations of the Reserve banks merely cash reserves are required. This is becoming a growadd to their difficulties, since the proceeds of such ing item, and it increased during the week from $84,sales, as already stated, ultimately lodge in the 211,000 to $96,280,000. The deposit liabilities are
banks, thereby deferring the coming of the brighter also a little larger this week at $2,393,773,000
day of which they stand so sadly in need.
against $2,392,817,000, but this is entirely due to the
increase in Government deposits from $37,668,000
HE Federal Reserve condition statements the to $72,328,000, member bank reserves (the principal
present week bear witness to the fact that the item in the deposits of the Reserve banks) having
policy of adding to the acquisitions of United States fallen off from $2,194,390,000 to $2,166,721,000. As
Government securities is continuing actively under a result of the decrease in Reserve note liabilities
way. After purchases of $25,114,000 of such securi- and the increase in the gold holdings, the ratio of
ties last week, there have been further purchases of total gold reserves and other cash to deposit and
$27,866,000 the present week. As it happens, how- Federal Reserve note liabilities combined has moved
ever, the experience this week has been the same as up somewhat further, rising from 67.8% to 68.0%.
that of last week, namely, that there has been no As previously noted,the Federal Reserve Board now
expansion in the volume of Reserve credit afloat, includes an item previously designated as non-Renotwithstanding the taking over of the large extra serve cash with "other cash" in computing the Reamounts of United States securities. As the pro- serve ratios. The amount of United States Governceeds of the purchases of Government securities find ment securities pledged as part collateral for Fedtheir way into the banks, the effect is to diminish eral Reserve notes increased during the week from
the borrowings of the member banks. It is not $471,900,000 to $480,900,000. The holdings of acstrange, therefore, that the discount holdings of the ceptances for account of foreign central banks keeps
12 Reserve institutions, which reflect member bank slowly diminishing, and the present week the amount
borrowing, have further decreased during the week declined from $36,770,000 to $35,731,000. At the
from $312,165,000 to $301,974,000. At the same same time foreign bank deposits have dropped this
time, the holdings of acceptances purchased in the week from $15,867,000 to $7,848,000.
open market have further dropped from $42,662,000
to $19,862,000, this being due presumably to the ma- ri"HE appearance this week of the annual report
turity of bills at a time when there is no occasion
of the New York Central RR. for the calendar
for the banks to go to the Reserve banks with new year 1932 attracts attention chiefly as showing how
supplies of bills.
even a railroad property of the superb strength of this
The result altogether is that the volume of Reserve great railroad system is bound to suffer in a period
credit afloat, as measured by the total of the bill of such unparalleled depression as the country has
and security holdings, has fallen during the week experienced during the last four years. The Central
from $2,221,925,000 tt• $2,216,237,000, notwithstand- failed to earn its fixed charges in 1932 by the sum
ing that the Reserve banks have enlarged their hold- of $18,326,550—something that would have been
ings of Government securities from $1,861,712,000 deemed unbelievable only a few years back. A mere
to $1,889,578,000. This again illustrates the point cursory examination of the figures shows that the
we made last week that itis easier to decree inflation unfavorable outcome has been due entirely to a
through the employment of Reserve credit than to shrinkage in the volume of traffic and revenues in
bring it about. However, future purchases of Gov- a degree and to an extent that has no parallel in
ernment securities ought to make a deeper impres- railroad history, the experience in this respect of
sion and give effect to the inflation program, since the New York Central System having been like that
the acceptance holdings are close to the vanishing of all other railroads without any exception. In the
point and the discount holdings are down to low previous calendar year railway operating revenues
levels. It should be noted, furthermore, that money fell from $478,918,347 in 1930 to $382,190,182 in
in actual circulation did increase $17,000,000 the 1931; in 1932 there was a further drop to $293,present week, while last week it showed a decrease 636,140, showing a decrease for the two years comof $57,000,000.
bined in the prodigious sum of $185,282,207. DrasGold holdings of the 12 Reserve banks further tic reductions reduced the operating expenses during
increased during the week from $3,499,234,000 to the two years in the huge sum of $149,552,797, but
$3,519,898,000, and as explaining these increases this, nevertheless, left a loss in the net revenue for
from week to week, although there are now no im- the two years in the sum of $35,729,409, these net
ports of the metal ,of any great consequence and revenues from railway operations having first been
the hoarded gold would appear to have been nearly reduced from $102,188,929 in 1930 to $75,124,502 in
all dislodged,the New York "Times,"in its financial 1931, and now to $66,459,520 in 1932.
column, had an item saying that it has developed
Fortunately, the indications now are for greatly
that under the Thomas amendment to the Farm Re- improved results in the near future. Train loadings
lief Act, which makes all coin and currency legal for current weeks demonstrate that the volume of
tender, it is possible for the Treasury to substitute tonnage is now exceeding that for the corresponding
other forms of currency for some of the gold that it weeks in 1932. This, if maintained, as seems likely,
has held as reserves against National bank notes affords the promise of larger gross revenues, and


Volume 136

Financial Chronicle


that,in turn, means improved net results—probably eral upward course,of stock prices. The bond marin much greater proportion than in the case of the ket continued to display strength throughout the
gains in the gross revenues, since running costs have week, though Chicago Rock Island & Pacific sufbeen greatly reduced as a result of wage reductions fered a sharp decline on the news that the Railroad
and various economies in the operation and admin- Credit Corporation had refused to grant any further
istration of the property. As a matter of fact, the loans to the company. On the other hand, the
return for the month of April, made public the pres- Southern Railway bond issues speeded up with
ent week,shows an increase in the net revenues from great rapidity on the favorable statement of earnrailroad operations, in face of a large loss in the ings which the company submitted for the month of
gross revenues. For the first quarter of 1933 there April.
was a further large shrinkage in gross and net revOn Thursday the course of prices still continued
enues alike—$19,144,304 in gross and $4,916,169 in upward, aided by the fact that all the commodity
net. For the month of May, on the other hand, with markets yielded to the general influence of buoyancy
$4,433,992 loss in gross operating revenues, there and again came under the spell of the speculative
is a gain in the net revenues of $714,671. With gross fever, establishing further violent advances. The
earnings now running equal to or above those for copper shares were whirled up on a rise in the price
1932, continued gains in net appear to be assured, of copper to 8c. a pound, and the oil stocks attracted
opening a correspondingly brighter vista for the buying by reason of the marking up of gasoline
prices in New Jersey. The fact that so many business indications pointed to increasing trade activity
HE New York stock market this week has shown proved a further stimulating agency. Electric
unalloyed buoyancy, with further very striking power production for the week ending May 27,
advances in prices. New manifestations of the deter- it appeared, made the best comparison of the year,
mination to carry out the Administration policy showing total production of 1,493,923,000 kilowatt
of inflation have been the main factors in this re- hours, or 4.8% above the corresponding figure in
newed exuberance, while the multiplying signs of 1932. It seemed certain also that the carloadings
activity in all branches of trade and business have for the same week, when compiled, were likewise
contributed to the same end. On Saturday last the to show another increase over the corresponding
news which came in the afternoon of the day before week of 1932, the same as they had for the week
that a joint resolution had been introduced in Con- ending May 20. The "Iron Age" reported the steel
gress, at the instance of President Roosevelt, pro- mills of the country now engaged to 41% of capacity,
viding for the elimination of the gold clause by statu- which compares with 38% the previous week, 35%
tory enactment, thus reinforcing the President's the preceding week, 31% the week before, and only
own action to that end, had an exhilarating effect, 15% at the beginning of April. The foreign exand led to sensational advances in all sections of the changes continued to run strongly against New
Stock Exchange list, while the concurrent rise in York, and reports came of proposed increases in
the commodity markets still further heightened the wages from many different quarters. Thus, the
feeling of enthusiasm, making the day one of the General Motors Corp. decided on a 5% increase
•most noteworthy in Stock Exchange history. The in wages as a matter of corporate policy, leaving
sales reached 4,311,340 shares, or the second largest it up to the individual units comprising the company
on record for a Saturday half-day session. The fact to decide as to when the increase shall become
that all the foreign exchanges again turned strongly effective. Friday saw a repetition of the experience
against New York, involving further depreciation of the preceding days of the week, bullish enthusiof the American dollar, accentuated the upward asm indeed running wild, making the day the most
swing of prices and added new zest to the specula- sensational of the whole week. The railroad list
tive boom. On Monday the buoyancy remained un- manifested strength because many different roads
abated, even though some commodities, like grain, were able to show in their weekly reports for May
displayed a soberer tone. Profit-taking was on a larger carloadings than in the same week last year,
large scale, prompted by the great rise in prices that and also because quite a number of roads (though
had occurred, and influenced also by the fact that by no means all) were able to report improved net
Tuesday was Memorial Day, when the Stock Ex- earnings in their returns for the month of April—
change would be closed and many holders were dis- the Southern Railway being a conspicuous instance
inclined to carry any large blocks of-stock over the of the kind. As showing the general upward course
holiday. The foreign exchanges kept turning of commodity values, copper sold here in New York
against the United States, and showed further de- yesterday at 8c., against 7/ on Friday of last
preciation of the dollar, which appealed to the fancy week; crude rubber for spot delivery sold at 6.50c.
of the crowd, on the theory that the lower the Amer- against 5.17c.; spot cotton at New York sold at
ican dollar went the greater would be ,the rise in 9.25c. against 9.00c., and the July option for wheat
prices, both of securities and commodities, in this in Chicago closed at 733
4c. against 721 8c. Silver
country. On Tuesday, the only American market ruled very steady, being quoted yesterday at
of consequence open in the United States was the 19 1 16c. against 18Y on Friday of last week. Of
New Orleans Cotton Exchange, and this showed a the stocks dealt in on the New York Stock Exchange
further active speculation in cotton at another ad- 776 established new high records for 1933 during
vance in prices. The European markets recorded the week, while only one stock dropped to a new low
the tendency of commodities still upward, and the level. On the Curb Exchange 347 stocks advanced
American dollar suffered further depreciation. As a to high levels and three stocks recorded new low
consequence, there was a renewed upward spurt on levels. The call loan rate on the Stock Exchange
the Stock Exchange, though some realizing sales again ruled unchanged as 1%.
gave the Stock Exchange list a somewhat ragged
Some further reductions and suspensions of diviappearance at times, but without affecting the gen- dends by corporate undertakings marked the course



Financial Chronicle

of the week, but these attracted little attention,
being taken as reflecting past conditions and not
what the future may have in store for the properties. The Pure Oil Co. suspended the payment of
the quarterly dividends due July 1 on the 514%,6%
and 8% cumul. pref. stocks, and the Holland Furnace
Co. omitted the semi-annual dividend due July 1
on its 7% cumul. pref. stock. The South Penn Oil
Co. reduced the quarterly dividend on its capital stock from 25c. a share to 20c. a share, and Affiliated Products, Inc., reduced the monthly distribution on its capital stock from 10c. a share to Sc. a
share. The Coca-Cola Co. reduced the quarterly
dividend on the no-par common from $1.75 a share
, to $1.50 a share, and the Coca-Cola International
Corp. also reduced the quarterly dividend on its
no-par common stock from $3.50 a share to $3 a
share. The Wisconsin Power & Light Co. declared
dividends of 75c. a share on the 6% cumul. pref.
stock, and 8712c. a share on the 7% cumul. pref.
stock; three months ago, the quarterly payment on
the 6% pref. stock was reduced from $1.50 a share
to $1 a share, and the quarterly payment on the 7%
pref. stock from $1.75 a share to $1.16 2/3 a share.
Trading has been of large proportions all through
the week. On the New York Stock Exchange the
sales at the half-day session on Saturday last were
4,311,340 shares; on Monday they were 6,953,640
shares; Tuesday (being Memorial Day and a holiday) the Stock Exchange was closed; on Wednesday the sales were 6,076,350 shares; on Thursday,
4,753,570 shares, and on Friday, 6,877,860 shares.
On the New York Curb Exchange the sales last
Saturday were 597,721 shares; on Monday, 888,136
shares; on Wednesday,949,610 shares; on Thursday,
671,339 shares, and on Friday, 1,240,250 shares.
As compared with Friday of last week, prices are
quite generally higher, the gains in most instances
being quite large. General Electric closed yester/
day at 2314 against 211 8 on Friday of last. week;
North American at 2914 against 2612; Standard Gas
Elec. at 14% against 12; Consolidated Gas of
N. 58 against 54½;Pacific Gas & Elec. at 2712
against 24; Columbia Gas & Elec. at 2014 against
17%; Electric Power & Light at 1038 against 8;
Public Service of New Jersey at 5212 against 49 ;
International Harvester at 39% against 36%; J. I.
Case Threshing Machine at 76% against 70%; Sears,
Roebuck & Co. at 323 against 28½; Montgomery
Ward & 24 against 22½;Woolworth at 39
Stores at 51 against 51; Westagainst 39; Safeway
ern Union Telegraph at 4934 against 43; American
Tel. & Tel. at 1221 8 against 113%; International
Tel. & Tel. at 1714 against 12%; Brooklyn Union
Gas at 7814 against 773 ; United States Industrial
Alcohol at 47 against 47 ; American Can at 93
against 88; Commercial Solvents at 19% ex-div.
against 18%; Shattuck & Co. at 11 against 978 and
Corn Products at 74 against 74.
Allied Chemical & Dye closed yesterday at 11278
against 10414 on Friday of last week; Associated
Dry Goods at 14 against 123 ; E. I. du Pont de
Nemours at 83 against 71%; National Cash Regis/
ter "A" at 191 8 against 19%; International Nickel
at 153 against 1418;Timken Roller Bearing at 26
against 25 ; Johns-Manville at 393 against 35;
Gillette Safety Razor at 16 against 13½; National
Dairy Products at 21 against 1912; Texas Gulf
Sulphur at 2978 against 27½; American & Foreign
Power at 14 against 1078; Freeport-Texas at 40

June 3 1933

against 35; United Gas Improvement at 20 against
19 ; National Biscuit at 5478 against 541%; Coca/
Cola at 8878 against 89 ; Continental Can at 58%
against 57; Eastman Kodak at 8278 against 75½;
Gold Dust Corp. at 23 against 21%; Standard
Brands at 21 against 20%;Paramount Publix Corp.
certificates at 1% against 78; Westinghouse Elec. &
Mfg. at 4534 against 41 ; Drug, Inc., at 58 against
511 ; Columbian Carbon at 59 against 55½; Rey%
nolds Tobacco class B at 435 against 4112; Loril/
lard at 214 against 20; Liggett & Myers class B at
92 against 873 , and Yellow Truck & Coach at 6%
against 578
The steel stocks have continued to share in the
upward movement. United States Steel closed
yesterday at 54 against 511 4 on Friday of last week;
United States Steel preferred at 953 against 90½;
Bethlehem Steel at 29 against 2778, and Vanadium
at 22 against 20%. In the auto group, Auburn
Auto closed yesterday at 67 against 53 on Fri/
day of last week; General Motors at 26% against 25;
Chrysler at 245/s against 223 ; Nash Motors at 20
against 18; Packard Motors at 5 against 412; Hupp
Motors at 53 against 4 , and Hudson Motor Car
at 978 against 73 . In the rubber group, Goodyear
Tire & Rubber closed yesterday at 3718 against 32%
on Friday of last week; B. F. Goodrich at 15
against 123 , and United States Rubber at 1438
against 9 .
The railroad shares have some of them been conspicuous features of strength. Pennsylvania RR.
closed yesterday at 28 against 2578 on Friday of last
week; Atchison Topeka & Santa Fe at 692 against
68; Atlantic Coast Line at 47 against 45%; Chicago Rock Island & Pacific at 678 against 8%;
New York Central at 3638 against 305s; Baltimore &
Ohio at 22 against 17 ; New Haven at 261 4
against 2378; Union Pacific at 11212 against 101½;
Missouri Pacific at 3 against 3 ; Southern Pa/
cific at 27 against 245 Missouri-Kansas-Texas at
16 against 123 Southern Railway at 2514 against
167s; Chesapeake & Ohio at 3818 against 361 ;
Northern Pacific at 241 against 24, and Great
Northern at 23% against 221
The oil stocks have shared in the general rise.
Standard Oil of N. J. closed yesterday at 371 8
against 3438 on Friday of last week; Standard Oil
of Calif. at 33% against 3118; Atlantic Refining
at 26% against 2214 and Texas Gulf Sulphur at
2978 against 27 . In the copper group, Anaconda
Copper closed yesterday at 18 against 13% on Friday of last week; Kennecott Copper at 213 against
17%; American Smelting & Refining at 3518 against
31½; Phelps-Dodge at 15% against 12; Cerro de
Pasco Copper at 233 against 21%, and Columet &
Hecla at 878 against 51
INCREASE in activity was reported this
week on stock exchanges in all the leading
European financial markets, with the undertone
good in every case despite some irregularity. The
generally favorable trends at London, Paris and
Berlin were influenced to no small degree by the
persistent upswing at New York, dispatches stated,
but some of the European developments also were
interpreted favorably. The London Stock Exchange
was stimulated in some measure by improvement in
important British trades and industries. The Paris
Bourse hailed the end of a long budget fight in the
French Parliament by a sharp advance in quota.


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Financial Chronicle


lions, even though the budget which was finally the month-end carryover was 1 to 114%,against 3/%
-adopted, Thursday, carries a deficit of $145,000,000. formerly. The upswing continued Thursday, as
The Berlin Boerse advanced substantially when the there was general satisfaction over the settlement
Hitler Government finally published its program, of the budget debate. Rentes improved substanThursday, for aiding German industry and decreas- tially, and common stocks also reflected further
ing unemployment. These influences were counter- buying. The tone was again good yesterday, despite
acted to a degree by uncertainty regarding the war diminished activity.
debt status, and the outcome of the several conferThe Berlin Boerse was dull and uncertain, Monences on disarmament and economic problems: day, as there was much uneasiness regarding the
There was general uneasiness over the American impending Berlin conference of foreign creditors
measures to eliminate the gold clause in bond con- of Reich borrowers. Prices fell at the start, and a
tracts and to disregard such clauses in existing late rally served to cancel only a part of the initial
agreements. The concern regarding the gold stand- losses. The irregularity continued in Tuesday's
ard occasioned by the American proposals was trading, but the general tone was firm, owing to the
heightened by indications of inflationary expedi- good impression created in Berlin by Dr. Schacht's
ents in Sweden, and by budgetary difficulties in opening speech at the creditors' conference, and by
Switzerland. In a Swiss plebiscite, Sunday, a pro- favorable reports of the trend at New York. Prices
gram for reducing Government and Cantonal sala- again slipped downward in Wednesday's dealings.
ries was voted down, and the increasing governmen- Theme was little public interest, dispatches said,
tal deficits were believed to contain a threat to the while professional operators liquidated. Equities
gold standard in that country, as inflation may be dropped from 2 to 6 points in the session, but bonds
considered the alternative.
showed greater resistance. When the Government's
The London Stock Exchange was firm and fairly program for combating unemployment was made
active in the initial session of the week, with the available, Thursday, prices moved forward sharply
stocks of rubber companies especially in demand, on the Boerse. Gains were largest in the issues of
owing to an advance in the commodity. British companies that are likely to gain from the Governfunds were weak at the start, but recovered most of ment program for stimulating employment, but
their losses. Good buying appeared in the indus- other securities also advanced. Prices advanced
trial stocks, while international issues moved further on the Boerse yesterday.
sharply higher on favorable week-end reports from
New York. Dealings were on a smaller scale, TuesTTEMPTS to find a practical method for interday, owing partly to the holiday suspension in New
national disarmament again occupied the
York. British funds lost a little ground, while home delegates of almost all nations in the world at the
industrial stocks displayed irregularity. The inter- General Disarmament Conference in Geneva, this
national group was generally good, in anticipation week, with results that are anything but encouragof further gains in Anglo-Amerian trading favorites. ipg. The flurry of optimism caused by President
The tone Wednesday was decidedly cheerful, the Roosevelt's stirring pronouncement of May 16 has
only exception being the South African gold mining died away completely, as the recent debates have
group of issues, which dropped as a result of pro- again emphasized the profound differences that
posals for heavy taxation. British funds improved, separate the heavily armed States of the world. All
while excellent demand was reported for industrial countries render lip-service to the principle of dissecurities. International issues enjoyed a further armament, but agreeittent on a method appears to
sharp advance. After an uncertain opening, Thurs- be little. nearer now than it was at the beginning
day, prices again moved higher on the London Stock of the tedious conference in Geneva, which started
Exchange. South African gold mining issues just 16 months ago. Norman H. Davis, chief Amerdropped sharply at the start, but improvement fol- ican delegate at the gathering, expressed irritation
lowed when better reports regarding the taxation at the endless delays, Thursday, when he remarked
proposals were circulated. British funds were in that more time is spent discussing the way things
good demand, while a number of bright spots ap- should be done than in discussing the things to be
peared in the industrial list. Anglo-American issues done. "Let us have more disarmament and less
maintained their strength. There was less activity procedure," Mr. Davis declared. Despite the many
yesterday at London, as the market will close until urgent appeals for early agreement, adjournment
Tuesday for the Whitsuntide holidays. Small fur- of the Conference was voted Thursday, the vacation
ther gains were registered.
to begin after a preliminary reading of the British
The Paris Bourse was firm in the opening session draft disarmament plan, and to end not later than
of the week, with international issues showing great- July 3. There were indications at Washington, late
est strength owing to the favorable advices from Mit week, of increasing pessimism regarding the
New York. French securities were in lesser de- Geneva Conference. President Roosevelt was said
mand, but advances were general in this department to hold the view that the meeting might as well end
as well. Dealings Tuesday were active on the if no advances can be made against the obstructions
Bourse, but the division between French and inter- of one kind or another which inevitably crop up.
national issues was even more sharply accentuated.
In a recent dispatch from Geneva it was remarked
Declines were registered in most of the leading that every day ends with a deadlock of some kind
French stocks, but the international group con- at the Conference, with the hope prevalent among
tinued its advance on further good reports from the delegations that efforts to bargain have been
New York. A general upward movement followed responsible and that none of the obstacles will prove
in Wednesday's dealings on the Bourse, with the insurmountable. "Should this sanguine belief prove
buoyancy ascribed largely to the reflected optimism true, the Geneva Conference would close its sessions
of New York. Equities of all kinds were in good successfully," the correspondent added, laconically.
demand, but rentes also showed gains. Money for A debate on aerial armaments, last Saturday, illus-



Financial Chronicle

trates the divergent opinions and the difficulty of
making progress. "The United States, supporting
the Soviet Union, which has taken the leadership
on this issue, demanded complete abolition of aerial
bombardments and threw the balance against the
British draft text, which would permit bombardment for police purposes in outlying regions," a
dispatch to the New York "Herald, Tribune" said.
"Simultaneously, France conditioned limitation of
air forces upon supervision of civil aviation, instead
of its internationalization, and Germany, while conditioning its concession upon complete suppression
of air weapons, nevertheless accepted, for the first
time, the principle of supervision of civil airplanes.
Germany's stand on suppression, however, provided
the day's impasse,although the Little Entente States
had made trouble with a demand for internationalization of fighting airplanes to precede their reduction."
The British draft convention was adopted unanimously, Wednesday, as the basis for a future treaty,
but the Conference decided at the same time to close
the public hearings and to continue the discussions
in private. Only the Bureau of the Conference, composed of representatives from 19 countries, will participate in the private conversations, as the General
Commission will not resume until the course of the
London conference on monetary and economic matters is charted. The need for further "political understandings" is said to have occasioned the decision
to discard public hearings and substitute the private
meetings. The vote on adjournment of the General
Commission was not taken until Thursday, and it
was on that day that Mr. Davis expressed his disappointment and called for more disarmament and
less procedure. International control of all armaments was discussed for a time, Thursday, and Mr.
Davis accepted such control in principle in behalf
of the United States, but only on condition that this
country would not in any way be obliged to employ
military sanctions against a country violating a
treaty. "Some method must be found which clearly
excludes the United States from any obligation of
this character," Mr. Davis asserted. Japan entered
a general reservation in accepting the proposal for
The new American concession on consultation, as
outlined by President Roosevelt and by Mr. Davis,
was discussed in the British House of Commons,late
last week, by Foreign Secretary Sir John Simon.
After quoting a recent address at Geneva by Mr.
Davis, Sir John Simon undertook to explain the
intent of the new policy. "It is of the utmost importance," he said, "that we should not exaggerate
or distort this declaration by a hair's breadth. Let
me explain what I understand it to mean: First,
the United States insists that it must preserve its
own independent judgment as to what is right and
what is wrong in connection with any dispute. That
is the characteristically British way of looking at
it, and we have no ground whatever for complaint.
But in agreeing to refrain from any action tending
to defeat a collective effort for peace, the United
States has abandoned, in favor of this doctrine, the
old idea of standing with folded arms, being the spectator from afar of a struggle between two States,
one of which has acted wrongly and the other the
sufferer. America now says: 'Trust us to face the
situation when we have consulted together. If we
come to the conclusion, as we very likely may, that

June 3 1933

we agree with the rest of you, we give our word that
we are not going to stand on the strict letter of the
law of neutrality. You shall not only have our good
will and our blessing, but our promise that we will
withhold from our own citizens, if they are tempted
to exercise strict neutral rights, the protection which
would otherwise be theirs.'" Sir John Simon
warned the House that "it would be foolish to delude
ourselves that we are on the eve of some definite
final agreement" on disarmament.
Much of a piece with the inconclusive disarmament negotiations is the four-Power pact for maintaining peace in Europe, upon the terms of which
Great Britain, France, Italy and Germany are reported to have agreed. Acting on a British suggestion, Premier Mussolini resumed discussions in
Rome on this proposal last week. In the effort to
gain French adherence, however, numerous important concessions were made and the resultant pact
is admittedly devitalized. The original proposal by
Signor Mussolini opened the way for peaceful revision of the dangerous boundary settlements of the
Versailles Treaty, but this is now understood to have
been supplanted, at French insistence, by a reference to Article 16 of the League Covenant, which
lays clown the principle of sanctions against an aggressor State, and to other Articles which keep revision in the hands of the League. The instrument
is innocuous enough to be acceptable to the Little
Entente States, a Paris dispatch to the "Herald
Tribune" remarks. Initialing of the agreement by
diplomatic representatives of the four countries
must be followed, moreover, by Parliamentary acceptance, and doubts were expressed in London,
Thursday, regarding such approval in all the countries concerned. "The pact in the form which the
French amendments have given it is nothing more
than an empty gesture," the Berlin correspondent
of the New York "Evening Post" reported Thursday.
\VAR debt instalments due to the United States
Government on June 15 remain a matter of
the deepest concern in London and Paris. Although
some of the leading European debtor countries made
formal requests nearly six months ago for reviews
of the debt agreements, no commissions or officials
have been appointed to study the problem. It is
altogether likely that the debt question entered
largely into the conversations at Washington preliminary to the World Monetary and Economic Conference, and there have also been intimations that
discussions on debts will be continued while American delegates to the conference are in London. In
every formal sense, however, the status of the war
debt problem remains unchanged. Whether the
London Government will pay the June 15 instalment
of $75,950,000 is quite as much a mystery in the
British capital as it is on this side of the Atlantic.
Chancellor of the Exchequer Neville Chamberlain
was asked in the House of Commons, Thursday, if
any decision had been reached by the British Government. "It would not be desirable for me to make
any statement on the matter at present," Mr. Chamberlain replied. Unless some arrangement is made
in Washington to avert difficulties on June 15, default by France is virtually certain, as that country
remains in default on the instalment due last December. There is no indication of Italian intentions, while other European debtor States obviously
take a waiting attitude.

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Financial Chronicle

It was indicated in Washington, Monday, on "excellent authority," that President Roosevelt will use
his treaty-making power to effect a debt settlement
with European countries without recourse to Congress, but attempts to obtain verification of the reports at the White House were unsuccessful the next
day. "Since the Chief Executive is empowered under the Constitution to negotiate treaties, it is definitely understood he will carry on overtures already
in progress between this country and Great Britain
and France, with a view to permanent reduction of
the debts and probably suspension of the June 15
interest payments," a Washington dispatch of Monday to the New York "Times" said. Congress would
thus be confronted with a signed pact for ratification, the report added. In a further dispatch to the
same journal on Tuesday, it was remarked that
the White House characterized these published
statements as speculation, but "well-informed quarters" still insisted that the procedure was in contemplation. The understanding prevailed in Washington, the dispatch added, that President Roosevelt
world make a statement to the country in clarification of this situation immediately after Congress
adjourns. Such adjournment is expected on
June 10.
HE World Monetary and Economic Conference
will open at London in a little more than a
week, with delegates from almost every country in
attendance. Preparations have been virtually completed for the start of this gathering on June 12,
but as the date approaches forecasts of the possible
achievements are becoming steadily more pessimistic. In Great Britain and France there is general concern over the lack of any substantial developments regarding the war debt payments due on
June 15,and this matter admittedly is casting a very
dark shadow over the forthcoming negotiations in
London. Chancellor of the Exchequer Neville Chamberlain explained to the British House of Commons,
Thursday, that the London Government will gladly
co-operate with the United States or any other Government to raise prices throughout the World. Beyond such general statements, there is little knowledge of the British Government's intentions at the
Conference, and London opinion regarding the meeting is distinctly gloomy. "One hears it said all too
often that the World Monetary and Economic Conference cannot accomplish much, that if it patches
up a mere semblance of an agreement it will have
been successful," a London dispatch to the New
York "Times" states. French thoughts about the
Conference are equally gloomy, owing to the impression in Paris that great difficulty will be encountered in achieving monetary stabilization.
It was again made plain in Washington this week
that the American delegation will seek most earnestly to obtain general agreement for an advance
in prices, and the comments by Mr. Chamberlain in
London, Thursday, probably were a reflection of
such urgings. Secretary of State Cordell Hull and
several other members of the American representation departed for London, Wednesday,on the steamship President Roosevelt. Mr. Hull remarked, before sailing, that there is the strongest reason for
an agreement to lower tariff barriers and stabilize
exchanges. The American delegation was completed, Tuesday, when Senator Couzens, of Michigan, and Ralph W. Morrison, of Texas, were ap-



pointed by President Roosevelt. American intentions to press for general reduction of tariff barriers
at the Conference were reiterated at London, Tuesday, by United States Ambassador Robert W. Bingham, in a speech before the Pilgrims of Great
Conversations at Washington, preliminary to the
World Monetary and Economic Conference, have
now been concluded. A special delegation from
Brazil, headed by J. F. de Assis-Brasil, finished its
discussions with American officials on May 25, and
a joint statement was issued by President Roosevelt
and Senhor Brasil. "As a result of the conversations," the statement said,"we are gratified to find
there is entire identity of purpose between the two
Governments respecting the solutions of the economic and financial problems which confront the
world. We recognize fully the need for removing
the existing barriers to commerce between nations
and both countries will lend their efforts to that
end at the approaching conference." The paramount need for stabilization of currencies as a basis
for a general revival of international trade also was
recognized, the statement indicated. In touching on
the problems of trade between the two countries a
completely cordial interchange of views occurred,
and this extended also to the conditions of international payments, it was reported.
The last of the series of joint statements was
issued last Saturday by President Roosevelt and
Viscount Bikujiro Ishii, of Japan, at the conclusion
of extensive conversations with the Japanese delegation. Agreement was reported on the practical
steps which should be taken toward solving outstanding economic problems. "We concur in the
view," the statement said, "that economic stability
and political tranquillity are complementary essentials to a sound basis of peace; that neither of these
can be achieved without the other; and that both
economic and military disarmament are needed for
their attainment. We have had, of necessity, to
think of the unusual situation which has prevailed
in the Far East during the past two years. We hope
that the countries of the Far East, along with those
of the Occident, will be able to contribute substantially, in a spirit of co-operation, to the laying of
solid foundations for a structure of world peace
and prosperity." An orderly monetary regime was
held necessary in the joint statement, and it was
also remarked that unreasonable obstacles to the
flotv of trade and capital should be removed. A
"reasonable enhancement" of the price of silver was
considered highly desirable, as well as stabilization
of silver exchange. "With regard to many other
measures which need to be adopted in order to establish the conditions of economic and political health
throughout the world, we are in close agreement,"
the statement added.
TUDY of the German transfer, or foreign exchange, problem has been started at Berlin by
30 banking representatives of foreign long- and
short-term creditors of the Reich on the invitation
of Dr. Hjalmar Schacht, President of the Reichsbank. The meeting was opened last Monday by Dr.
Schacht, who pointed out that it was not a Government conference, nor ever a conference between German debtors and their foreign creditors, but merely
an "informal conversation" between the creditors
and the Reichsbank, which has control of all foreign



Financial Chronicle

June 3 1933

exchange dealings in Germany. This gathering, nev- 1929 crisis in America. Since the American crisis,
ertheless, may well prove of outstanding importance we have paid out more than 10,000,000,000 marks in
to all foreign creditors of German private borrow- capital and interest in foreign currency. I believe
ers, as the Reichsbank officials obviously consider that all our creditors must recognize that this not
inevitable a downward scaling of the amount of for- only proves in a surpassing manner the good will
eign exchange made available for meeting the debt and self-respect of German industry, but that it
service. Dr. Schacht indicated in New York last represents an achievement which must have inflicted
month that such a meeting is necessary, in his harmful consequences on German economy in its
opinion, and the Reichsbank sent out the invita- entirety."
tions within a few days. Albert H. Wiggin and
The trend of events and their inevitable conseJohn Foster Dulles were named as the American quences were correctly discerned in Germany, Dr.
delegates, the former to represent American short- Schacht asserted, but the outside world shut its
term creditors of Reich borrowers, and the latter to eyes and refused to be better advised by German exrepresent the long-term creditors. Banking dele- perts, and ignored both the transfer problem and its
gates from England, France, Holland, Switzerland underlying causes. Much of the blame for the situaand Sweden also are participating. Foreign loans tion rests on the shoulders of S. Parker Gilbert, the
to German borrowers now are estimated at 19,528,- former Agent-General for Reparations Payments in
000,000 marks, of which 10,181,000,000 marks are Germany, Dr. Schacht charged. Mr. Gilbert "conshort-term loans and 9,347,000,000 marks are long- stantly ignored" the importance of the transfer probterm loans. American creditors have a greater in- lem in his reports, the Reichsbank official asserted.
terest in this situation than any others, as Amer- The standstill agreements on the short-term Gerican claims are preponderant. Short-term American man external indebtedness have postponed catasloans to German borrowers still outstanding are trophe, he remarkes, but have not provided a fundaestimated at close to $700,000,000, while the long- mental solution of the transfer problem. Withterm loans are only a little less than $1,000,000,000.
drawal from Germany in recent years of the sum
In a long address to the representatives of the of 10,000,000,000 marks has contributed to the reduccreditors as the meeting began, Dr. Schacht outlined tion of German foreign trade, he declared, and the
the position created by the rapidly dwindling gold huge decline in working capital made it impossible
and foreign exchange reserves of the Reichsbank, for German industry to operate on a normal basis.
and,in effect, asked his hearers to suggest remedies. Another disastrous result of the outflow of funds
After the American advance to the Gold Discount was the weakening of the Reichsbank, and impairBank, a subsidiary of the Reichsbank, is repaid on ment of its ability to maintain the value of the.
July 1, the gold and exchange reserves will have reichsmark on foreign markets, Dr. Schacht added.
dropped to less than 300,000,000 marks, supplying "The reserves in gold and bills of the central bank,
a cover of only 8% for the currency issues of the although they may be drawn upon occasionally for
Reich, he pointed out. Continuance of present tend- readjusting important payments, are not intended
encies involves the danger of complete dissipation to effect payment of the more or less long-term
inof reserves, Dr. Schacht declared, and of subsequent debtedness of the country's business enterprises,"•
devaluation of the reichsmark, with even more disas- he said. "If such a task is forced on a central bank,
trous consequences than those of the German infla- it is deprived of liberty of action. This is precisely
tion of 1923. "Such a catastrophe the Reichsbank what has happened to the Reichsbank through exwill not permit," he added. German debtors are cessive transfers, and this is the worst effect of this
meeting their obligations promptly, the Reichsbank whole development,for a nation whose central bank
President remarked, and the object of the conver- has lost freedom to maneuver is exposed to every
sations now initiated is to reach a readjustment of chance!'
transfer procedure.
Statements made by Dr. Schacht and statistics
"The present transfer crisis can be understood supplied by the German officials were studied careonly in the light of political developments 15 years fully by the bankers of the six creditor countries,
ago," Dr. Schacht stated. "Naturally, defeat in the and at the conclusion of the meeting yesterday a
war inflicted severe financial damages on the Ger- joint announcement was made in which general
man economic body, but it also had an immediate agreement was expressed that the free reserves of
effect on the transfer problem. This arose, in the gold and foreign currency of the Reichsbank have
last analysis, from reparations." The former Allies fallen to such a point that further reductions might
demanded reparations, but Germany was refused the impair the exercise of central bank functions by
possibility of meeting them in the only way they the Reichsbank. The desirability of gradually incould really be discharged, by export surpluses, Dr. creasing such reserves was admitted. "No concrete
Schacht declared. He criticized also the policy of proposals for dealing with the situation were put
making large loans to Germany. After stabilization forward by the Reichsbank, and the representatives
of the mark, some economic justification existed for of foreign creditors were present simply for the purraising German loans abroad for such purposes as pose of receiving and giving information and not
the restoration of the depleted stocks of raw ma- to conduct negotiations," the statement continued.
terials, but all borrowing in excess of that was an "Those attending the meeting concurred in the view
evil,the Reichsbank official continued. "It is to-day put forward by the Reichsbank that whatever action
generally recognized," he said, "that of approxi- the Reichsbank might feel obliged by the circummately 20,000,000,000 marks of foreign credits, stances to take, the Reichsbank will use every effort
easily half were employed for nothing else than repa- not only to maintain contact with the various credirations payments. This whole system was entirely tor groups but also to facilitate joint consideration
wrong and unsound, and it collapsed in a moment of the situation with the creditors with the intenwhen foreign creditors refused to extend further tion to lead to mutual understanding and agreeloans to Germany, that is, following the October ments."

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German Fascist movement is sharply nationalistic,
with revision of the Versailles Treaty one of its chief
aims. Danzig is situated on the Baltic Sea, at the
end of the Polish Corridor.
In Austria, meanwhile, increasing bitterness has
been caused by propagandist activities of German
Fascists in Vienna, and by the methods employed
within Germany by Chancellor Hitler and his lieutenants. Although the prospect of a union between
Germany and Austria seemed bright only a few
months ago, any such possibility now is remote,
as the antagonism between the Berlin and Vienna
regimes is intense. Acting on instructions from
Chancellor Engelbert Dollfuss, officials of the Austrian Government last month informed several German Fascists in no uncertain terms that their presence in Vienna was unwelcome, and they were invited to return to Germany in the airplane which
brought them to Austria. The Berlin Government
countered by imposing a charge of 1,000 marks on
the visas of German tourists to Austria. This acASCIST methods of government are at length tion, taken last Saturday, was immediately followed
occasioning some open opposition within the by the recall of the Austrian Minister to Berlin,
German Reich, while in some of the contiguous coun- while direct measures of reprisal are likely to be
tries bitter antagonism to the spread of Fascism taken in addition, Vienna dispatches state. "The
has been expressed recently by well-supported na- latest move of the Hitler regime has given a deathtional leaders. There is no apparent likelihood, blow to the Pan-Germanist suggestions of union,"
however, of any great reaction from Fascism among the Vienna correspondent of the New York "Herald
Germans. A parliamentary election was held last Tribune" said, in a report of last Sunday.
The question of Fascist anti-Semitism in Germany
Sunday in the Free City of Danzig, which is under
League of Nations suzerainty but populated almost was discussed delicately, but rather pointedly, by
entirely by German-speaking people. The "Nazis," the Council of the League of Nations, Monday, when
or Fascists, polled 108,000 of the 215,000 votes cast a protest against the treatment of Jews in Upper
in this election, and thus obtained control of the Silesia came up for consideration on the petition
Volksrat by a very small majority. The opposition of Franz Bernheim, a refugee from that region.
to Fascist edicts within the German Reich was mani- Sean Lester, of the Irish Free State, reported on
fested last Saturday by leaders of the established the matter to the Council, and he found that the
Lutheran Church, who elected Dr. Friedrich von alleged discriminations conflicted with German
Bodelschwingh as their First Evangelical Bishop, treaty obligations in Uppen Silesia. Dr. Friedrich
despite the opposition of the Fascists to this ap- von Keller, of Germany, raised the question whether
pointment. The Nazis, who desired to "co-ordinate" Herr Bernheim is qualified tb submit a petition,
the Protestant Church with the National-Socialist and this matter was submitted by the Council to a
State, had put forward Dr. Hermann Mueller as committee of three jurists. Consideration of the
their candidate for the post, but they were defeated protest was postponed pending determination of
in this test. Fascist leaders promptly challenged this aspect of the problem. Some of the most imthe legality of the election of Dr. Bodelschwingh, portant members of the Council took occasion, howand indicated that they would carry the fight to the ever, to make comments which were clearly designed
for German ears. Captain Anthony Eden, of Great
church members themselves.
The Parliamentary election in Danzig resembled, Britain, remarked that it would be necessary to
in many essential respects, the recent conflict within grant the German demand for consideration of the
Germany between Republicanism and Fascism. In status of the petitioner, but he emphasized that
his capacity as the leader of the Nazis, Chancellor this did not signify that he endorsed the German
Adolf Hitler of Germany made a radio address attitude. Joseph Paul-Boncour, of France, pointed
to the Danzig voters on the eve of the election. He out that the question brought up by the petitioner
urged the election of National-Socialist repre- was only one aspect "of a much wider and more gensentatives to the Volksrat, but carefully avoided eral problem." He expressed the opinion that the
all reference to the international status of the League of Nations would not in any way desire to
city. Dr. Hermann Rauschning, leader of the ignore the rights of a race which is dispersed in
Danzig Nazis and prospective head of the Dan- many countries. Count Raczynsky, of Poland, adzig Government, issued a statement in Berlin, mitted that the Council can deal on the petition only
Monday, in which he pledged the observance of all with the Jews of Upper Silesia, but he remarked siginternational treaties, avoidance of the "co-ordina- nificantly that "every member of the Council has
tion" methods used by the Nazis in Germany, and the moral right to appeal urgently to the German
protection of the rights of Jews. Agreement with Government to insure equal treatment for all the
the Polish Government will be sought by his regime Jewr ;xi Germany."
The Fascist Government in Germany made public
on all problems that have led to friction between
Poland and the Free City in recent years, Dr. Thursday, an extensive plan for reviving industry
Rausehning declared. The Nazi victory in Danzig within the Reich and reducing unemployment. The
nevertheless has caused anxiety in Poland, as the most important feature of this plan calls for an

It was noted in the joint communication that
representatives of the long-term creditors have
established a small permanent group for maintaining contact with the Reichsbank, similar to the
short-term standstill committee. German foreign
trade and world trade are fundamental to the problem of transfer, the statement added, and the view
was expressed that one of the most urgent objectives of the World Monetary Conference will be
to facilitate a prompt and permanent solution of
the German transfer problem. Dr. Schacht read
this joint statement to press correspondents, and
then remarked that the decision for further action
rests with the Reichsbank. "Our decision, which is
irrevocable,is that we will not permit further shrinkage of our gold and devisen (foreign exchange reserves)," the Reichsbank head declared. Those
present assumed, an Associated Press dispatch remarked, that Dr. Schacht's declaration foreshadowed a German transfer moratorium.



Financial Chronicle

issue of 1,000,000,000 marks in five-year serial notes
of the German Government, the funds to be utilized
in construction schemes, and in income tax exemptions and remissions. Federal loans are to be made
to the States an Communes for construction of
public buildings and bridges, gas, water and electric
light projects, river regulation and other purposes.
Home owners will be permitted to borrow for repair
• work, in the expectation that this also will contribute to employment of idle persons. The plan
also includes a number of novel features, designed
to induce employed single women to marry and
quit their jobs. Engagement of domestic servants
is to be promoted through reductions in income
taxes for householders having one or more servants.
Complicated provisions also were announced for
income tax exemptions for employers who install
new machinery in their plants, in replacement of
similar machinery already in use, and provided that
it will not result in a smaller number of men being
employed. The Nazi authorities made no statement
regarding the number of men these measures are
expected to put back to work,possibly because of the
mistake made by the former Chancellor, Franz von
Papen,in predicting the employment of 1,750,000 by
the far more extensive schemes announced last
OSTILITIES between Chinese and Japanese
troops in the area of old China south.of the
Great Wall and north of the cities of Peiping and
Tientsin came to a halt, Wednesday, when an armistice arrangement was concluded at the town of
Tangku, after extensive negotiations. The truce is
purely a military document, containing harsh terms
imposed by the victors upon the vanquished, but no
political provisions are mentioned. Under its terms
the Chinese troops are to withdraw immediately to
the south of a line 250 miles long, extending from
Yenking, near the Great Wall, to Lutai, 35 miles
north of Tientsin, near the coast. The line passes
through Tungchow, which is only 10 miles north of
the walls of Peiping. Japanese authorities are to
be afforded full facilities for observing the withdrawal, and when they are satisfied that it has been
carried out in good faith, they will withdraw their
own troops to the Great Wall. In the neutral area
thus established Chinese police authorities are to
maintain peace and order. These terms, dictated by
the Japanese, were accepted by the Nanking Nationalist Government of China, in order to "provide a
breathing space for our sorely tried troops and distressed population," a statement issued at Shanghai
said. "Any local arrangement with the Japanese
regarding the north China military situation will
not affect China's territorial integrity or her international position," the statement added. Japanese
authorities in north China expressed the hope,
Thursday, according to a Tientsin dispatch to the
New York "Times," that the invasion will result
in the Chinese Government's "realizing the wisdom
of negotiating to settle all the unpleasant controversies that have arisen since September 1931."

June 3 1933

Danish National Bank and the National Bank of
Sweden reduced their -discount rates from 332% to
3%. Present rates at the leading centers are shown
in the table which follows:
Austria_ ___
Danzig _ .. _ _
France _ __
Germany. _

Rate in
June 2 Rstabitohat.

Mar. 23 1933
Jan. IA 1932
May 17 1932
Aug. 23 1932
Sept. 19 1932


Jan. 25 1933
July 12 1932
June 1 1933
June 30 1932
Jan 29 1932
May 27 1933
Oct. 9 1931
Sept. 31 1932
May 29 1933




Holland_ _
Ireland__ _
434 Lithuania_
334 Poland...
234 Portugal._
tiii Rumania ...
South Africa
Sweden_ _

Rate in
June 2 Establtehed.


334 May 11 1933 234
434 Oct. 17 1932 5
334 Feb. 16 1933 4
June 30 1932 334
Jan. 9 1933 5
4.38 Aug 18 1932 5.11
May 5 1932 734
314 May 23 1983 4
(let. 20 1932 74
Mar. 14 1933
Apr, 7 1933 7
Feb. 21 1933 5
Oct. 22 1932 6%
June 1 1933 334
Jan. 22 1931 2%


In London open market discounts for short bills
on Friday were 7-16@3/2%, as against 7-16@3/ on
Friday of last week, and
for three months'
bills, as against
on Friday of last week. Money
on call in London yesterday was h%. At Paris the
open market rate remains at 23
4% and in Switzerland at 13/2%.
HE Bank of England statement for the week
ended May 31 shows a further gain in gold
holdings amounting this week to £394,090. This
brings the total again into new high ground and it
now amounts to £187,402,773 in comparison with
£129,341,726 a year ago. Since the gain in gold was
attended by an expansion of £4,190,000 in circulation,
reserves fell off £3,796,000. Public deposits increased £17,540,000 and other deposits decreased
£19,447,663. The latter consists of bankers' accounts
which decreased £21,732,174 and other accounts
which rose £2,284,511. The reserve ratio is now
48.80% in comparison with 50.69% last week and
34.29% a year ago. Loans on government securities
increased £2,505,000 while those on other securities
fell off £611,774. Of the latter amount, £33,68
was from discounts and advances and £288,091 was
from securities. The rate of discount is unchanged
at 2%.,„Below are the figures with comparisons for
five years:


May 31

June 1

June 3

June 4

June 5

a 374.064,000 355,413,751 356,370.794 359,798,602
Public deposits
33,246,000 18,552,692 6,545,145 8,877.942 361,576,772
Other depoalts
117,009.101 124,106,439 106,129,666 107.990,702 8,511,444
Rankers accounts_ 77,472,660 89,956,577 72,209,262 71,081,853 106,292,485
Other accounts
39,536,441 34,149,862 33,920,404 36,C08,849 70,346,971
Govt. securities
72,505,127 73,914,656 38,495,906
Other securities
22,198,831 37,601,752 35,416.843 58,380,547 43,106,855
Disct. di advances 11,249.948 12,481,965 7,106,070 19,192,897 27,215,003
6,476,057 6,21%102
10,948,883 25,119,787 28,310,773
Reserve notes di coin 73,338,000 48,927,975 56,563,284 12,716,840 20,999,901
Coin and bullion_ _ _ 187.402,773 129,341,726 152,934.078 57,080,483 62,274,358
156,879,085 163.851,130
Proportion of reserve
Bank rate
2.1Z %
a On Nov. 29 Ins he fiduciary currency was amalgamated
note Issues adding at that time £234,199,000 to the amountwith Bank of England
of Bank of England
notes outstanding.

HE Bank of France statement for the week
ended May 26 shows an increase in gold holdings of 21,452,058 francs. The Bank's gold, which
now aggregates 80,950,775,958 francs, compares •
with 79,470,235,749 francs a year ago and 55,034,060,503 francs the year before. Increases appear in
credit balances abroad of 6,000,000 francs, in French
commercial bills discounted of 340,000,000 francs, in
advances against securities of 45,000,000 francs and
HE Bank of Finland on May 27 reduced its dis- in creditor current accoun
ts of 475,000,000 francs.
count rate from 6% to 53/2%, the former rate Notes in
circulation record a reduction of 100,000,000
having been in effect since Jan. 311933. On Mon- francs, bringin
g the total of notes outstanding down
day, May 29, the Bank of Greece reduced its rate to 83,268,305,370 francs. Circulation
a year ago
from 9% to 7%, the 9% rate having been in effect was 81,417,780,030 francs and two
years ago, 78,since Dec. 3 1932. On Thursday, June 1, both the 185,340,315 francs. The proportion of
gold on hand



to sight liabilities stands at 77.89%, as compared
with 72.92% last year and 55,20% the previous year.
Below we furnish a comparison of the various items
for three years:
for Week.
Gold holdings
Credit bals. abroad_
a French commercial
bills discounted- bBillsboughtabroad
Adv. net.seems
Note circulation_ _
Cred• curr• accts.-Propor. of gold on
hand to sight liab_


Financial Chronicle

Volume 136

May 27 1933. May 27 1932. May 29 1931.

+21,452,058 80,950,775,958 79,470,235,749 55,634,060.503
+6,000,000 2,468,414,601 4,474,215,474 5,430,227,861
+340,000,000 3,449,556,612 4,159,967,414 6,189,596,300
1,418,969,764 4,526,666,034 20,729,695.413
+45,000,000 2,674,173,048 2,699,905,394 2,806,102,825
—100,000,000 83,268,305,370 81,417,780,030 78,185,340,315
+475.000,000 20,657,045,309 27,559,956,707 22,609,034,316
—n 2f1 7:.




• a Includes bills purchased in France. b Includes bills discounted abroad.

HE Reichsbank's statement for the fourth
quarter of May reveals a decrease in gold and
bullion of 19,000 marks. The total of bullion is
now 372,329,000 marks, in comparison with 862,721,000 marks a year ago and 2,390,327,000 marks.
two years ago. Reserve in foreign,currency,silver and
other coin and notes on other German banks record
• declines of 9,546,000 marks, 97,243000 marks and
10,726,000 marks respectively. Notes in circulation show a gain of 223,202,000 marks, raising the
total of the item to 3,468,796,000 marks. Circulation a year ago aggregated 37960,563,000 marks and
the year before 4,299,122,000 marks. An increase
appears in bills of exchange and checks of 270,582,000
marks, in advances of 102,176,000 marks, in investments of 249,000 marks, in other assets of 46,485,000
marks, in other daily maturing obligations of 67,442,000 marks and other liabilities of 11,314,000
marks. The proportion of gold and foreign currency
to note circulation at 10.1%, compares with 25%
last year and 59.9% the previous year. Below we
furnish a comparison of the various items for three


Wednesday night, according to the usual report of the
Federal Reserve Bank of New York.
EALING in detail with call loan rates on the
Stock Exchange from day to day, 1% has
been the ruling quotation -all through the week for
both new,loans and renewals. The market for time
money has Shown some improvement this week.
There have been transac.tions in 4 months' maturities
at 1%. Rates are nominal at 4% for 30 days,
Y to 1% for 60 to 120 day periods and 1@)1H% for
five and six months. There has been a light demand
for commIrcial paper this week, though the supply
of paper has been slightly larger. Rates are 13 %
for extra choice names running from 4 to 6 months
and 2@23% for names less known.


HE market for prime bankers' acceptances has
been inactive this week. The demand has
been moderate and the supply of paper has been
very small. Rates were.reduced on Thursday, June
1, A of 1% on all maturities in both the bid and asked
columns. The quotations of the American Acceptance Council for bills up to and including threeA
months' bills are 1 % bid and M% asked; for four
months, 4% bid and %% asked; for five and six
months, 1% bid and 7 % asked. The bill buying
rate of the New York Reserve Bank is 2% for bills
running from 1 to 90 days; 21 8 for 91 to 120 days,
and 23,% for bills due in 121 to 180 days. The
Federal Reserve banks' holdings of acceptances
have dropped during the week from $42,662,000 to
$19,862,000: Their holdings of acceptances for
foreign correspondents also decreased during the
week from $3 ,770,000 to $35,731,000. Open market
rates for acceptances are as follows:


Prime eligible bills
for Week.
Gold and bullion
Of which depos. abroad
Reserve in foreign curt'.
Bills of exch. and checks
Silver and other coin—
Notes on oth. Ger. bks.
Other assets
Notes in circulation
0th. daily matur. °Wig.
Other liabilities
Propor,of gold 4:foreign
CUM. to note elrenl'n


May 31 1933. May 31 1932. May 30 1931.

Reichstnarks. Reiehsmarks. Reichsmarks. Reichsmarks.
—19,000 372,329,000 862,721,000 2,390,327,000
87.667,000 207,638,000
No change.
76,998,000 128,552,000 y186,181,000
+270,582,000 3.139.842,000 3,008,473,000 1,816,432,000
—97,243,000 235,219,000 224,848,000 174,315,000
+102,176,000 165,744,000 257,258,000 167,182,000
+249,000 317,338.000 363,472,000 102,697,000
+46,485,000 3.9,129,000 804,796,000 541,489,000
+223,202,000 3,468 796,000 3,960,563,000 4,299,122.000
+67,442,000 438,793.000 430,559,000 353,272,000
+11,314,000 159,108,000 694,260,000 244,018,000
...-.1 I101

in l 01


CO 001

ECLINING tendencies again were apparent in
the New York money market, owing to the
vigorous easy money policy of the authorities, as
reflected in additional open market buying of United
States Government securities by the Fedekal Reserve
Banks. The New York Clearing House Association
announced, Wednesday, that interest rates paid on
deposits would be cut in half, effective the next day
The new rates are N. of 1% on demand deposits, and
of 1% on time deposits. Yield rates on bankers'
acceptances were adjusted downward Thursday, by
N of 1% all Around: The official bill buying rate
of the New York Federal Reserve Bank remained
unchanged at 2% for obligations due up to 90 days.
Call loans against stock and bond collateral were 1%
throughout, on the New York Stock Exchange: In
the unofficial outside market transactions were reported at lower rates every day, the quotation being
34% Monday, and Wednesday, and M% Thursday
and yesterday. Time loan rates were unchanged.
Brokers' loans increased $72,000,000 in the week to

Prime eligible bills

—180 Days— —150 Days-- —120 Days—
Asked. Bid.
—90Days— —60Days— —30Days—

Eligible member banks
Eligible non-member banks

1% bid
1% bid

OTH the Boston and the San Francisco Federal
Reserve banks reduced their rediscount rates
this week from 33'% to 3%. In the case of the
Boston Reserve Bank the change was put into effect
June 1, while the 3% rate was made effective by the
San Francisco Bank June 2. The following is the
schedule of rates now in effect for the various classes
of paper at the different Reserve banks:



Federal Reservela
New York
At. Louis
Kansas City
San Francisco

Rate in
Wert on
June 2.


June 1 1933
May 26 1933
Oct. 22 1931
Oct. 24 1931
Jan..25 1932
Nov. 14 1931.
May 27 1933
Oct. 22 1931
Sept. 12 1930
Oct. 23 1931
•Jan. 28 1932
June 2 1933




is firm and in demand in all.
STERLING exchangeflowing to London attracted
centers. Gold is
by the motive of deposit and security from no less
than twenty countries, and is moving there also by
reason of the high premium offered in the London
open market, the only free gold market in the world.
The .range for sterling this week has been between
3.96 and 4.02 for bankers' sight bills, compared


Financial Chronicle

with a range of from 3.865 to 3.933/i last week.
The range for cable transfers has been between 3.97
and 4.025 , compared with a range of from 3.868
to 3.94 a week ago.. The foreign exchanges are more
demoralized than ever and more nervous and hesitant
since the introduction in'Congress on Friday of last
week at the instance of President Roosevelt of the
bill to take the country off the gold basis by statutory
enactment. The reduction on Thursday of last week
of the New York Federal Reserve Bank rediscount
rate from 3% to 23/2% has had no effect on dollar
exchange in any market as bankers in all foreign
centers have been disinclined to place reliance in
Reserve Bank action here as authoritative marketwise since the bank holiday in March and the subsequent gold proclanhation of the President. The
general view of the foreign exchange market is that
the Reserve Bank has lost, all freedom of action with
the result that its operations can affect the technical
position of banks in their foreign exchange trading
only as a part of the general political situation, a
picture which affects only speculative traders and
dealers in so-called "bootleg" foreign exchange. All
markets are bearish with respect to the dollar and
bullish on sterling.
The dollar is now extremely weak in all centers,
but more than a third of the monetary gold stock of
the world is still here and business in all lines is showing rapid improvement due in large measure to natural
• economic causes entirely unrelated to political factors
or inflationary programs. This recovery may be
retarded but it cannot be definitely arrested and its
progress may yet be a strong factor in altering and
perhaps thwarting the unsound views rtnd programs
which have for months engaged the world's attention.
At last many voices, representing the more sound and
responsible business opinion, have been raised .in
warning and it is frequently asserted emphatically,
even though quietly, that Mr. Roosevelt is far from
believing in any form of inflation or from pinning his
historical reputation upon the experiment of unsound
economic measures. The Chamber of Commerce of
the State of New York at its meeting on June 1 drew
up a report urging that President Roosevelt restore
the gold standard and beseeching him to refrain from
any act even under emergency which would delay its
return. The report stated that a sound and permanent recovery in industry and business can be accomplished only by avoiding currency inflation. Issues
of fiat money, the report stated, a decrease in the
gold standard from its present basis of 23.22 grains to
the dollar, or other forms of currency debasement will
prevent permanent recovery and in the end prove
A considerable body of the most responsible opinion.
on this side looks for a recovery in the dollar at no
far distant date. Meanwhile markets must continue
nervous and demoralized until the outcome of the
World Economic Conference which begins in London
on June 12 has offered a new terrain upon which
foreign exchange and foreign trade relations may
be aligned. It will be recalled that on Friday of
'last week sterling exchange became very firm when
cable transfers sold as high as 3.94, the high for the
week. The firmness at that time was attributed
solely to the introduction before Congress of the
resolution to repeal the Gold Standard Act. The
full force of this demoralizing proposal began to
register in the short session of Saturday last, When
sterling sold as high as 3.983/ A further advance

June 3 1933

to 4.003/i was made on Monday. On Tuesday,
May 30, the New York market was closed in observance of Memorial Day, but on Wednesday
sterling opened at 4.02%, a new high on the move,
which compared with the year's high of 4.05. , At
this point there developed considerable selling of
sterling and buying of dollars in many markets.
Operations are asserted to have originated with London bankers and private interests. It could not be
discovered that the British authorities were in any
way active in attempting to keep the dollar-sterling
rate under 4.00, though a higher rate would at the
present juncture be decidedly distasteful to Londoh
business interests. Much of the gold coming from
the London open market, as during the past several
weeks, is taken for Continental account under the
influence of gold hoarders. However, very little of
these gold takings are shipped abroad, the hoarders
preferring to leave the metal in London vaults as the
safest place of deposit. It is estimated that during
the past four. weeks approximately £35,000,000
was received in London and that during the same'
period not much more than £3,000,000 was actually
exported. Gold hoarders and speculators in. the
metal are of course attracted by the high premium. .
For the first time in many weeks the Bank of
England has taken some of the open market gold and
has otherwise increased its bullion holdings by converting earmarked stock held in other centers. This
week the Bank of England withdrew $14,950,000 in
gold from its earmarked stock in New York. This
accession does not show in the Bank's current statement but doubtless will appear in its statement of
June 7. On Saturday last gold bars totaling £140,000
were taken in the open market, the quoted price
being 122s. 10d. On Monday £240,000 was taken
for Continental account. Bars were quoted at 123s.
3d. On Tuesday a total of $810,000 was available
in the open market, of which the Bank of England
took £343,171,the balance having gone for Continental
account. On Wednesday £70,000 was taken for
Continental account. The quotation was 123s. 10d.
On Thursday 1120,000 was available in the open
market and the quotation was 122s, 11d. on Friday
• £230,000 was sold for foreign account; the quotation
was 122s: 5d. Because of the great confidence felt
as to the fundamental soundness of the British position, funds continue to flow to London from all
centers and open market money rates are, consequently excessively low. Call money against bills is
in supply at M% down to 4,%. Two-months' bills
are easy at 5-16% to 7-16%. Three-months' bills
are 7-16% 'to %,four-months' bills.%% to 9-16%,
and six-months' bills are 5 % to %%. This week the
Bank of England shows an increase in gold holdings
of £394,090, the total standing at the record high of
£187,402,773 as of May 31, which compares with
£129,341,726 a year ago and with £150,000,000
recommended as the proper minimum by the Cunliffe
At the Port of New York the gold movement for
the week ended May 31, as reported by the Federal
Reserve Bank of New York, con,sisted of imports of
$93,000, of which $68,000 came from the Philippines
and $25,000 chiefly from Latin American countries.
Gold exports totaled $14,950,000, which was shipped
to England. In tabular form the gold movement at
the Port of New York for the week ended May 31,
as reported by the Federal
Bank of New
York, was as follows:

Volume 136

Financial Chronicle

$68,000 from Philippines.
$14,950,000 to England.
25,000 chiefly from Latin
American countries.
$14,950,000 total.
$93,000 total
Net Change in Gold Earmarked for Foreign Account.
Decrease: $14,950,000.

The above figures are for the week ending Wednesday evening. On Thursday and Friday there were
no imports or exports of the metal nor change in gold
held earmarked for foreign account. •There have been
no reports during the week of gold having been received at any of the Pacific ports.
Canadian exchange continues at a severe discount,
but more favorable to Montreal than in many weeks.
On Saturday last Montreal funds were at a discount
of 12%, on Monday at 113/%. On Tuesday,
Memorial Day, there was no market in New York.
On Wednesday Montreal was at a discount of 113/%,
on Thursday at 113/%,and on Friday at 11%.
Referring to day-to-day rates, sterling exchange on
Saturday last was up sharply. Bankers sight was
3.96@3.98; cable transfers,.3.97@3.98%. On Monday sterling was still firmer. The range was 3.96%@
4.00 for bankers' sight and 3.97@4.00% for cable
transfers. On Tuesday, May 30, Memorial Day,
there was no market in New York. On Wednesday
sterling opened at a new high on the • move but
reacted toward the close. The range was 3.98%@
4.023/2 for bankers' sight and 3.99@4.02% for cable
transfers. On Thursday the pound was irregularly
firm. The range was 3.98%@3.99% for bankers'
sight and 3.993/@4.60 for cable transfers. On
Friday sterling was again firmer, the range. was
3.989/@4.003/ for bankers' sight and 3.98%@
4.005 for cable transfers. Closing quotations on
Friday were 4.00% for demand and 4.003/ for cable
transfers. Commercial sight bills finished at 3.9932
60-day bills at 3.983/2; 90-day bills at 3.981 ; documents for payment (60 days) at 3.983/2 and seven-day
grain bills at 3.993 . Cotton and grain for payment
closed at 3.9932
XCHANGE on the Continental countries soared
this week with respect to the dollar, but rates
have been highly irregular and fluctuations wide.
All the Continentals are of course greatly demoralized
owing to the uncertainty of the general foreign exchange situation not only as it bears upon the dollar
but as it affects the future of sterling, marks, and
francs, to say nothing of the minor units which tend
to be forced up or down by the influences affecting
the major currencies. The general attitude of the
Continental centers with respect to the present and
future of exchange is indicated in the resume of
sterling. However high day-to-day quotations whatetrer their fluctuations may be, the markets are extremely dull, with only the minimum of either supply
or demand. Hence the smallest actual transaction
has'a most marked influence on quotations. French
francs while fluctuating were frequently quoted
during the week at close to the year's high. The
market to all accounts is doubtful as to the future of
the franc and feels that the Paris authorities may be
compelled to abandon gold if the standard .is not
restored by London and Washington as a consequence
of the forthcoming economic conference. However,
the most responsible authorities in Paris assert that
there can be no abandonment of gold by the Bank of
France or any form of monetary inflation. In this



the bank has • the almost universal support of the
French people, who as a result of actual experience,
look with horror upon inflation in any form. This
week the Bank of France shows an increase in gold
holdings of fr. 21,052,058, the total standing at fr.
80,950,775,958, which compares with fr. 79,470,235,749 on May 27 1932 and with fr. 28,935,000,000
in June 1928 following stabilization of the franc.
German marks, while quoted excessively high with
respect to the dollar, are only nominally so quoted,
as practically no market in the German unit exists
either here or abroad,'as all foreign exchange transactions of the Reich are blocked by the Reichsbank.
Various items of importance relating to standstill
agreements and to the blocked mark accounts; as
well as to the dangerous position of the Reichsbank
will be found on other pages.
Finnish exchange is at all times a minor unit in the
New York market, but special interest attaches to
it at present, owing to the reduction in the rediscount
effecrate of.the Bank of Finland from 6% to
tive on Saturday last. The reduction in the Finnish
rate harmonizes with reductions made this week by
the banks of Sweden and Denmark and reflects the
general ease in money conditions as well as reduced
demands for credit accommodation.
Greek exchange is also a minor unit in the New
York market, but it is to be noted that the Central
Bank of Greece reduced its rediscount rate .on Monday from 9% to 7%.
The London check rate on Paris finished yesterday
at 85.78, against 85.72 on Friday of last week. In
New York sight bills on the French centre finished
on Friday at.4.663/2, against 4.58 on Friday of last
week; cable transfers at 4.663 , against 4.583, and
commercial sight bills at 4.653/2, against 4.571
Antwerp belga,s finished at 16.47 for bankers' sight
bills and at 16.48 for cable transfers, against 16.20
and 16.21. Final quotations for Berlin marks were
27.68 for bankers' sight bills and 27.70 foil cable
transfers, in comparison with 27.19 and 27.20.
Italian lire closed at 6.133 for bankers' sight bills
and at 6.14 for cable transfers, against 6.023 and
6.03. Austrian schillings closed at 16.25, against
16.25; exchange on Czechoslovakia at 3.56, against
3.47; on Bucharest at 0.73, against 0.72; on Poland
at 13.45, against 13.15, and on Finland at 1.79,
against 1.76. Greek exchange closed at 0.663/b for
bankers' sight bills and at 0.673/2 for cable transfers,
against 0.65 and 0.66.
XCHANGE on the countries neutral during the
war, while dull and inactive in this market, is
generally firmer in sympathy with the upward swings
in sterling and French francs. On Thursday the
Danish National Bank rate of discount was reduced.
/%. The rate had been at 332%
to 3%, from 31
since Oct. 12 1932 when it was reduced from 4%.
The Swedish National Bank also, reduced its rate,
effective June 1, from 31 % to 3%. The 33/2% rate
had been in effect since Sept. 1 1932 when it was
reduced from 4%. It will be recalled that the Bank
of Norway reduced its rate of rediscount on Thursday
of last week from 4% to 4%; and, as noted above,
in the comments on the Continental exchanges, the
central bank of Finland, another Scandinavian
country reduced its rediscount rate this week from
The Scandinavian' countries are
6% to
strongly inclined to moye in harmony in all financial,
monetary and commercial matters. These lower re-



Financial Chronicle

June 3 1933

discount rates indicate in part a• general easing in

against 7.95 and 8.00.

credit conditions on the Baltic, arising at present,

nally quoted 63/8, against 63/8.


19.25, against 18.50.



activity than from






Peru is nominal

of funds.

low • level


Chilean exchange is nomi-

largely as a seasonal influence, and the rediscount


rate reductions may be viewed as a filip to further

yen are firm in sympathy with the firmness in sterling

the upward trend of business.

The Swedish finance

and the other major currencies in terms of the dollar:

minister has asked the Riksdag for an increase of

The Chinese units move almost strictly in harmony

However, business is expanding in all these countries,

XCHANGE on the Far Eastern countries presents no new features of importance.


100,000,000 kronor in the legal maximum note cir-

with the swings in silver prices.

culation in order to meet obligations involved by the

is firm in sympathy with sterling to which the rupee

increaied prices.

The actual note issue is far below

present legal limit.

The Danish international ac-

is attached at a fixed rate.

The Indian rupee


India maintains a good

export balance in international trade as the heavy

counts for 1932 show that there was a net balance

gold sales abroad offset commodity.import increases

in Denmark s favor of kr. 69,000,000, compared with

and a sharp decline in commodity exports.

a deficit of kr. 52,000,000 in 1931 and of kr. 18,000,-

estimated that India has sold abroad approximately

000 in





Swiss francs

fluctuated widely this week, but at their lowest were
exceptionally firm with respect to the dollar.


are also firmer in terms of European currencies, so

£100,000,000 of gold since Sept. 1931.

It is

There is as

yet no indication of any slackening of these shipments.

When they

began it

was estimated

India could easily ship £250,000,000.


The rest of

much so that the gold loss of both countries, recently

the world, particularly Great Britain, is well pleased

In Monday s trading the

to see this gold coming out of the Indian hoards and

conspicuous, has stopped.

guilder and the Swiss franc set new high records.
The guilder jumped 80 points to 48.40 (par is 40.20).
The Swiss unit went to 23.25 (par is 19.30).


made available for monetary uses.
closing quotations for yen checks yesterday were
245 8 against 24 3-16 on Friday of last week.

was an equally great reaction in Wednesday s market,

Kong closed at 283

with volume of transactions both here and abroad at

Shanghai at 25%


® 28%, against 271/i
@ 27 5-16;
253', against 24%


to both the Dutch and Swiss markets is again in

Manila at 50%, against 50%; Singapore at 463
%; Bombay at 303/8, against 29%, and
against 453


Calcutta at 303', against 29%.

minimum amounts.

A return flow of foreign funds

Bankers sight on Amsterdam finished on Friday
at 47.60, against 46.65 on Friday of last week; cable
transfers at 47.62, against 46.70, and


against 46.55.
at 47.50, -


Swiss francs

clos6d at 22.91 for checks and at 22.92 for. cable






checks finished at 17.86 and cable transfers at 17.87,
agai st 17.49 and 17.50; Checks on Sweden closed
at 20.54 and cable transfers at 20.55, against 20.11
and 20.12; while checks on Norway finished at 20.29
and cable transfers at 20.30, against 19.87 and 19.88.
pesetas closed at 10.11 for bankers sight


bills and at 10.12 for cable transfers, against 9.91
and 9.92.







continues quite demoralized as a result of the

major economic disturbances affecting all countries.
Rates are highly nominal.

A recent Buenos Aries

dispatch stated that the Argentine Foreign Exchange
Control Commission ruled that all dollar drafts on
New York must be covered exclusively by dollars



to . the



Argentinian importers of American goods view the
ruling with some concern as a discrimination in favor

• of







South American countries in so-called "
blocked accounts






American exporters, it is asserted, in order to obtain
payments have frequently to

accept discounts on

their bills and drafts as high as 15% in what is designated the"
bootleg exchange.

The published nomi-

nal rates for such part of the blocked accounts as are
set free, American importers assert, are .generally


to the requirements of Section


the Tariff Act of 1922, the Federal Reserve
now certifying daily to the Secretary of the

Treasury the buying rate for cable transfers in the
different countries of the world.
We give below a
record for the week just passed:
MAY 27 1933 TO JUNE 2 1933, INCLUSIVE.
Country and Monetary

Noon Riving Rate for Cable Transfers in New York,
Value in United States Money.
May 27. May 29. May 30. May 31. June 1.

June 2.

14.5500* .142916*
.148000 .143250 .142750*
164200 .165050
.166075 .164858 .164523
Belgium, belga
.008033* 5)07886*
.007833* .007925* .007875*
Bulgaria, ley
.035677 .035525 .0315416
Czechoslovakia, krone .035225 .035325
.176850 .176972
.178341 .178063 .177676
Denmark, krone
England, pound
3.971583 3.972416
4.001071 3.996083 3.991696
.017625 .017566 .017591
.017566 .017580
Finland, markka
046564 .046698
.046748 .046676 .046550
.276983 .276241 .276271
Germany, reichsmark .277408 .277008
.006745 .006722 .006705
006655 .006625
Greece, drachma
476742 .477358
.478927 .476958 .475585
Holland. guilder
201666* .201666*
.204166* .201333* .201666*
Hungary, pengo
061331 .061531
.061866 .061543 .061325
Italy, lira
201376 .201383
.202541 .202492 .201958
Norway, krone
130875 .132600
.133187 .132625 .133625
Poland, zloty
036183 .036110
.036358 .036390 .036266
Portugal, escudo
007075 .007060
.007180 .007100 .007160
101269 .101100 HOLI- .101826 .101210 .101089
Spain. Peseta
203700 .203441
.205166 .204909 .204708
.229558 .228955 .228435
Switzerland, franc_ .227950 .228707
.016425 .016000 .016116
Yugoslavia, Maar_ _ _ _ .016200 .016060
China.251458 .250000 .250000
.247083 .247500
Chefoo dollar
.251458 .250000 .250000
Hankow dollar- _ .247083 .247500
.251406 .249687 .250625
Shanghai dollar_ _ •.247187 .247500
• .251458 .250000 .250000
247083 .247500
Tientsin dollar
.279531 .279218 .279531
Hong Hong dollar__ .273125 .276562
.301250 .300200 .300000
.298300 .298450
India, rupee
.244250 .244500 .245020
242595 .243000
Japan, yen
.465000 .464375 463125
Singapore (B.S.) dollar .461250 .461250
NORTH AMER..885260 .884687 .885468
880284 .880208
.999212 .999212 .999212
.999212 .999212
Cuba, peso
. .282175 .279375 .277975
Mexico, peso (sliver). .279050 .280000
.882750 .882250 .882875
Newfoundland, dollar .878125 .877750
SOUTH AMER..693913* .690007* .691386"
Argentina, Peso (gold) .679617 .684343*
.076350* .076387* .076387*
076350* .076350*
Brazil, mlireis
.066250* .066250*
'.067500* .075000* .075000"
Chile, peso
' .536666* .536666* .543333"
552500 .535000•
Uruguay. peso
862100* .862100*
.862100* .862100* .862100"
Colombia, peso
.3.189166 3.181250 3.181668
3.160000 3.161666
Australia, pound
3.197500 3.189583 3.190000
New Zealand, pound_ 3.168333 3.170000
3.958875 3.950833 3.947187
South Africa, pound 3.925625 3.924375
*Nominal rates, firm rates not available.

Argentine paper pesos closed on Friday nominally
at 30.00 for bankers' sight bills, against 28% on Friday of last week; cable transfers at 30.50, against

Brazilian milreis are nominally quoted 7.95

for.bankers sight bills and 8.00 for cable transfers,

table indicates the amount of gold
THE followingthe principalcomparisonsbanksofasthe •
bullion in
1 1933, together with

corresponding dates in the previous four years:



Financial Chronicle

Volume 136
Baas of—






England_ _ _ 187,402,773 129,341;728 152,934,078
France a__ 647,606,207 635,761,886 445,072,484
Germany b
38,196,300 109,134,450
60,895,000' 57,460,000
Nat. Beig'm
73.388,000 •76.777,000




MO 072 558


Total week_ 1,259,205,180 1,207,577,912
Prim, ararlr

1 9K0 LAO 07.1 1 105057952


a These are the gold holdings of the Bank of France as reported in the new form
of statement. b Gold holdings of the Bank of Germany are exclusive of gold held
abroad, the amount of which the present year is E864,250.

The Four-Power Pact and the Outlook
for Peace.
The announcement on Tuesday that the French
Cabinet had authorized the French Ambassador at
Rome to join with the Ambassadors of Great Britain
and Germany in initialing the Mussolini four-Power
pact, followed by a vote in the Chamber of Deputies
which was interpreted as indirectly approving the
Cabinet's action, does not necessarily mean that the
pact will shortly be ratified and put into effect.
Ratification involves the formal action of the Parliaments of the signatory Powers, and while it may
probably be assumed that the Italian Parliament
and the German Reichstag will assent to whatever
Premier Mussolini and Chancellor Hitler respectively approve, favorable action in Great Britain
and France is by no means a foregone conclusion.
.The initialing of the pact, however, will indicate
that the project for which the four Powers have
tentatively agreed to stand has been advanced, that
the differences of opinion which have developed
since the proposal was first broached, more than-two
and a half months ago, and which as late as yesterday had not been completely ironed out so as to
admit of initialing the document on that day as
was expected, have been adjusted, and that the pact
may now become a factor of greater importance in
discussions of European peace.
Precisely wherein the pact as now agreed upon
differs from the first Mussolini draft, or from the
three or four other drafts that are believed to have
been made since the project was first suggested,
cannot be known until all the texts are published.
It will be recalled that France, while eventually
expressing a general approval of the terms in principle as a basis for further discussion, objected
strongly from the first to certain provisions which,
it was believed, interfered with or curtailed some
prerogatives of the League, and that similar objection was shortly urged with outspoken aggressiveness by the States of the Little Entente and Poland.
The burden of complaint from all these sources was
the encouragement which the pact seemed to offer
to a revision of the peace treaties through the action
of the four signatory Powers without, apparently,
invoking for that purpose the agency of the League.
The Little Entente in particular affected to see in
the proposal a device for erecting a four-Power
alliance which, if it proved effective in practical
operation, would tend at important points to supercede or materially limit the League.
Paris dispatches report that the pact, in the form
in which it is expected to be initialed, has been modified, as a result of French insistance, by incorporating in it some limiting references to the League
.Covenant. Onq of these references, it is-understoqd,
is to Article X, which pledges the League to *e
maintenance of the territorial integrity and political


independence of all the member States—a matter
which the Little Entente and Poland regarded as
particularly endangered by the proposed pact. Another reference is to Article XVI, which provides
for the imposition of sanctions upon a member State
which violates its obligations by resorting to war,
and requires a State to facilitate the passage through
its territory of the forces of another State which
joins in common action to enforce respect for the
obligations of League membership. A third reference is to Article XIX, under which the Assembly
may, from time to time, invite the members of the
League to re-examine treaties which have become
inapplicable because of changed international conditions, or whose continuance may imperil world
If it shall appear that these provisions of the
Covenant have been incorporated as essential parts
of the four-Power pact, it will register a victory for
France and the Little Entente, but the pact itself
will have been robbed of special significance. The
satisfaction in German official circles which was
reported by the Berlin correspondent of the New
York "Times" on Thursday does not seem to rest
upon a very solid foundation. Aceording to this
correspondent, Germany welcomes the pact because
it creates a super-council of fonr great Powers
which will be able to dispatch business more
promptly and efficiently than the cumbersome Council of the League, provides for the consultation 'of
Germany henceforth "in all international affairs on
the basis of equality," and explicitly acknowledges
her right to treaty revision. It is exactly the creation of a super-council, however, destined, if it
worked well at all, to displace somewhat the Council
of the League, that the Little Entente has strenuously objected to, and if its objections have now
been withdrawn it can be only because the independent action of the four Powers has been carefully
restricted. On the other hand, if a revision of the
peace treaties, which is the main thing that Germany
desires, is to be accomplished only through the
machinery of the League, the pact at this point
would appear to'amount to little more than an agreement to ask for the use of the machinery whenever
the four Powers agree that it should be set in motion. We know from experience that revision, while
looked upon at times in Great Britain with benevolent interest, has not yet commended itself seriously to any British Government,and that in France
revision is dreaded and strongly opposed. Without
the assent of either Great Britain or France, accordingly, Germany and Italy together could not
force the revision issue.
It is probable that the four-Power pact, if it actually comes into operation, will put an end to the
scheme of a Central European bloc made up of
Italy and some or all of the former Central Powers._
Beyond this negative effect, the most that can be
expected is that it may pave the way eventually
to more friendly and harmonious relations between
the four Powers and thereby impart some energy to
the League. The outlook for ratification, however,
is not bright. In spite of the success of Premier
Daladier In obtaining the preliminary approval of
his Ca'binet for the pact and in forcing forward the
budget debate, the position of the French Government appears to be increasingly the
attacks on the pact by M. Herriot and other leaders,
and by the widespread revolt of the taxpayers over


Financial Chronicle

the Government's financial policy. The four-Power
• pact does not, apparently, dispose of any of the
• questions which have been at issue between France
and Italy, notably the long-standing dispute over
naval parity, and it was reported on Wednesday that
the British Government had been unofficially informed that the pact would not be ratified until
these questions were settled. There is little evidence that Prime Minister MacDonald's enthusiasm
for the pact has been shared by the British Cabinet,
and British repugnance to.any further political commitments on the Continent has deepened as political
complications have multiplied.
The greatest single obstacle to ratification, however, is afforded by Germany itself, the country
which might fairly be expected to gain the mostfrom
the pact. No one who is in close touch with the
situation believes that Germany desires war, or
would fail to go a long way in concession in order to
maintain peace, but there is nevertheless much doubt
• of the sincerity of the Hitler Government, and much
anxiety regarding the ultimate effect of its irritating policies. The strong objection which it was reported on May 25 the Hitler Government would
make to any move intended to place the Jews in
Germany under the protection of the League as a
racial minority;together with the vigorous protest
made on Tuesday to action by the League on a petition of Franz Bernstein, a German refugee from
Upper Silesia, against the treatment of Jews in
Germany, have, it must be admitted, some substantial basis in the claim that the Jewish question in
Germany is a domestic matter and that Bernstein
himself has not fallen under the operation of any
of the discriminating German decrees, but they have
nevertheless brought the Jewish question into controversy before the League and further inflamed
resentment against German policy.
The anxiety created by the Jewish situation has
been intensified by a report, received by the French
Government from secret sources and made public
in substance on Wednesday, to the effect that the
Hitler Government has proposed to support Poland
in enlarging its territory in the Soviet Ukraine, in
the direction of the Black Sea, in return for a substantial territorial concession to Germany in the
Polish Corridor. The proposal, if it turns out to
have been made, involves also the Soviet Government, which has recently concluded with Poland a
pact of non-aggression as well as a commercial
treaty. The special significance of the matter for
France is the evidence which it affords of a political
rift between France and Poland. Poland, which is
not a member of the Little Entente but has been in
general sympathetic with its aims, has been even
more pronounced than the Little Entente in its opposition to the four-Power pact, and its opposition
continues notwithstanding that the pact has apparently 'been modified to meet the objections of the
Entente Powers. In spite of reports of extreme
hostility in Poland to the Hitler regime and a number of irritating incidents on both sides, there have
been rumors for some time that the two Powers were
getting together on the Corridor issue, and the tentative bargain reported on Wednesday, while it must
be taken with all reserve until confirmed,lends color
to the suspicion that a rapprochement is under
We have more than once expressed the opinion
that a return to the old system of alliances, re-

June 3 1933

peatedly appearing as a tendency during the past
two or three years, holds no promise of stable peace
for Europe. The reception which has attended the
progress of the four-Power pact only confirms that
view. It is regretfully to be admitted that the prospect of peace through a general agreement about
disarmament is as yet no more'assuring. It was
apparently President Roosevelt's hope, when he sent
Ambassador Davis to Europe with wide authority
to pledge American co-operation in insuring security, that the Disarmament Conference might achieve
substantial agreement, sufficient at least to enable
it to postpone further debate for a time, before the
meeting of the World Economic Conference. There
is no likelihood of such an agreement now. The
British plan, so-called, has been so overlaid with objections and counter-proposals that it is now, as has
been well said, only a confused mass of uncertain
or contradictory provisions, and the confusion has
been increased by the demand of Japan for a more
favorable ratio of naval strength than was accorded
to it by the Washington and London naval treaties.
The American security proposals, moreover, are
unsatisfactory to France because they explicitly
do not include a promise to use force. It would
have been better for the Disarmament Conference
to adjourn aine die, and thereby free the Eco
nomic Conference from the overhanging cloud of
another international parley whose deliberations
Seem only to magnify international disagreements,
than .for it to take a qualified recess as it voted to do
on Friday. It is easy to understand why Mr. Roosevelt, with this cloud on the'horizon, should be reported as less disposed than formerly to use the London Conference as an occasion for international
bargaining, and as meaning to hold the United
States to an independent course unless substantial
all-round concessions and agreements can be
secured. There is every justification for such a firm
national policy where the spirit of international
accord is obviously lacking.
Storms Have Cleared Economic Atmosphere for
International Conference.
When, at this. season of the year, persons comfortably seated in their homes witness the 'terrifying display of an evening thunderstorm, with its
ominold approach, its increasingly brilliant flashes
of lightning at times descending perpendicularly
from a sky overcast with black clouds, the observers
behold nature's method of purifying the atmosphere.
In these sententious days of progress the air is
contaminated by inhabitants of the earth to a degree
which in an earlier period of the simple life never
occurred. Conversion of petroleum, hidden for ages
below the surface, into gasoline and utilization of
the gas for motive power have tended to defile the
atmosphere to an extent never contemplated until
ingenuity, science and industry provided the people
with automobiles.
Every observing person in populous towns and
cities has witnessed the air charged with fumes and
wondered as to the effect of their inhalation by human beings. They have speculated as to whether
the almost constant breathing of the impurities
may not undermine mankind physically, mentally
and morally, perhaps in a way accounting for the
wave of new forms of committing crimes, and almost
upiversal discontent. Are we using a natural resource in a manner and to such a great extent that

Volume 136

Financial Chronicle


man is in danger Of weakening the powers with tasks with a common understanding, and, let us
which the Creator has endowed him? It would seem hope, in mutual accord with a subjugation of selfish
in this age as if nature's way of purification is more motives.
If the trials and hardships of the past three years
essential to man's well-being than at any time since
are not sufficient to bring men of the larger nations
the Garden of Eden.
The spectacle of the thunder storm, its purpose to a better understanding, must even greater distress
and beneficial results are not unlike what has been be thrust upon the world to bring about the benewitnessed for three years in the economic world. We ficial results now so sincerely desired? Common
have been building our Towers of Babel far higher sense would seem to indicate that the atmosphere
than the one of Biblical times, modern towers which must be kept clear.
It is for the survivors,in building anew, to profit
are known as skyscrapers, towers illuminated by
artificial daylight, which are heated and ventilated by sad experience, to avoid what has been demonScientific methods making them impervious to out- strated to have been wrong, and with determination
byside natural conditions. The tall structures are and zeal to make this glorious old globe a safer and•
made easily and quickly accessible to points high a better home for posterity.
The builders are again at work after the storm.
above the • Surface of the earth by swiftly-moving
They need and are entitled to the help and earnest
From the pace of the pedestrian whose progress co-operation of the rank and file of all workers. It
was limited to a few miles per hour, man has pro- is well to put aside grudges, bearing in mind that
gressed so that he may now travel from 40 to 60 all have suffered, and that the more one had to lose
miles per hour in his private car over hard and the greater was his personal loss.
Not the farmer or the producer; not the manusmooth surfaced roads, an alacrity typical of developments in many other respects. From the quill pen facturer or the distributor; not the merchant or
and stylus we have advanced to the typewriter with the consumer, nor the debtor of creditor stands
its process of manifolding, which is characteristic alone. All interests, individual and international,
of advancement in a multitude of mechanical ways, are interwoven. Leaders of some nations are diswhile thoughts are.flashed almost instantaneously posed to erect lightning rods and to wear insulated
over land and sea by telegraph, telephone, cable, clothing, overlooking the fact that the storm has
wireless and the radio. Every new development is passed and that the purpose of the conference is to
quickly seized upon for the advantage of transacting build new .foundations for reconstruction to the
mutual advantage of all concerned.
business with expedition and accuracy.
We have been living and working at such a rapid
The Industrial Recovery Bill.
pace that the entire economic wcirld has been upset
When a military commander faces an opponent of
and the economic atmosphere has been defiled and
surcharged with evils which only a storm could overwhelming power, discretion prompts a retreat
clear away. The thunder storm, which may be until reinforcements may strenghten his first line
designated as a depression; burst upon us follow- of defense to a point which will justify the coming the climax of many follies in 1929. Purifying Mander in making a firm stand and to engage the
lightning has demolished many of our idols. But enemy with a possibility of achieving victory. Inthe Rosy-Fingered Daughter of Morn again appears dustry in the United States has been gradually
upon the horizon and bids men everywhere to be forced into a position very much like that of such
inspired with new hope, to inhale a purified air, and a military commander, in respect to enactment of
to gird their loins for new and mighty deeds in all the House bill designed, among other things, to "enworthy forms- of effort.
courage national industrial recovery."
The darkest clouds have rolled by. Wrecks must
When the bill was pending in the House at Washbe cleared away and foundations mist be laid for ington, industrialists evidently realized that it
new structures which undoubtedly will surpass would be futile to waste effort and ammunition in
the old.
• opposition to the passage of the measure by that
Man has conquered the earth. He has explored its body. Indications are that the bill may be passed
poles. He has invented marvelous machines for the by the Senate also and be signed by the President.
cultivation of the soil and learned how to obtain the Industry will then be in a position to profit by the
best results from its products. He has delved be- prediction of Senator Reed that the bill will not
neath the surface to obtain rich and useful ores at be upheld by the courts, and the'final test of legality
a depth where only the heat .of internal fires pre- will come in the Supreme Court of the United
vented further progress. He has developed means States.
of rapid transportation and communication, and he
If such litigation must come it would seem as if
has navigated by airship around the mundane it ought to be handled without unnecessary delay,
and even expedited, in order that industrialists May
But to what purpose, if the whole world is sud- understand just where they stand after all doubt is
denly to be thrown into chaos by war? A new era removed. One basis for this conclusion is the mild
may come out of the international economic confer- attitude of manufacturers when the features of the
ence. Having conquered the earth it now only re- industrial bill were presented to members of the
mains for men of many nations to control them- Philadelphia Chamber of Commerce last week by
selves. If their representatives approach the con- Judge James A. Emory, counsel for the National
ference in the right spirit the present century may Manufacturers' Association, and David L. Podell,
in reality witness "Peace on Earth, Good Will to a New York lawyer, who was largely instrumental
in drafting the measure, which was introduced in
Such a conference could not have been called at the Senate by Senator Wagner of New York. The
a better time, as common suffering tends to make speakers limited themselves to interpretations of
the whole world akin and therefore to approach the various features of the important bill, and in this


Financial Chronicle

respect, while edifying, they were scarcely emphatic
or positive enough on either side to arouse enthusiasm, although each speaker at the conclusion of
his address was given applause as a sign of appreciation. Mr. Podell, speaking for the bill, was evidently so sure of his ground that he Was content
to rest with a statement of possible benefits if the
measure becomes a law, while Judge Emory reservedly talked as if he might unwittingly reveal
a line of defense to his aggressive opponents.
Thus, if this was a typical discussion, industrialists of the country would seem to he calmly awaiting
a bombardment and are reserving defensive ammunition for use before the highest tribunal of the land.
Meanwhile, should the bill pass the Senate and be
signed by the President, the statute, until finally
judiciously construed, will constitute just one more
lowering cloud hanging threateningly over American business which is persistently struggling to get
once more squarely upon its feet.
As explained by Mr. Podell, these specific purposes of the bill are commendable, namely, "to encourage national industrial recovery and to foster
fair competition."
There are debatable methods and machinery set
up to accomplish desired ends, the whole proposition being based upon the declaration that a
national emergency exists. The club to be used as
an enfoicement agency to drive reluctant manufacturers into organized groups is the licensing power
by which, through the withholding of a license to
conduct business, a recalcitrant or reluctant mann-.
facturer may be driven into such a group in his particular line of business under penalty of being de'
prived of the right to continue his business upon an
inter-State scope.
Largely around this feature of the bill will be
built the attack if resort is made to the courts.
Justification for drastic methods of enforcement is
based upon the necessity for stopping price-cutting,
a bane generally recognized among business men,
arid the argument is offered that if price-cutting
can be abolished a basis of stabilization of prices
will be afforded for the protection of all members
of the particular group affected. The aim is to
effect higher prices, which, in turn, will justify the
payment of a fair wage, which will be attempted to
be fixed under the bill's provisions.
The consumer evidently will be adversely affected
in two ways. He will be paid in dollars having depreciated purchasing power, and he will have to pay
higher prices for what he buys, to which the theoretical answer is that whatever the consumer loses
by reason of higher prices will be offset by his increase in wages and salaries, which would have some
potency if all groups were to act in concert, which
is not likely to occur, even if an advanced date were
fixed for a change.
Another cause for seeming lethargy among business men as to the enactment of the bill is that
commercial conditions have sagged into a state
where any change will be welcome on the assumption that there is greater possibility of a change_
operating to better conditions rather than to make
them worse. Many business men have drifted to an
attitude expressed by the saying, "Any port in a
Special provisions are made for the protection of
labor, including the right to organize and to bargain

June 3 1933

collectively. There is a penal clause which pro-.
vides for a fine of $500 or iniprisonment for not
exceeding six months,or both,for certain violations.
There is tacked on to this business and labor bill
"Title II—Public Works and Construction Projects." This measure provides for loans to States
not exceeding in the aggregate $400,000,000, and
it also carries the much debated appropriation of
If the bill as it has passed the House becomes a
law it would still be possible for such an industry
as the Baldwin Locomotive Works to sell locomotives for use within the State of Pennsylvania, where
its principal plants are located, and for the Stetson
Co. to sell hats within Pennsylvania, while anthracite, which undergoes a process of manufacture before marketing, might be restricted to consumption
in the Keystone State, which contains the only fuel
deposits of the kind, provided these manufacturers
elected not to comply with the provisions of the bill.
What chaos would occur if the wearer of a Pennsylvania-made hat should "invade" any one of the
surrounding five States may Only be surmised. For
three years industry has been suffering from the
effects of smoke suppressors and electrical insulators. What is desires is to have handicaps removed, rather than to be bound-hand and foot with
endless rolls of red tape.
Bankruptcies Among Consumers.
Both the Department of Commerce and the Department of Justice have made studies'concerning
bankruptcies among consumers, and the conclusions
reached as a result of their investigations have been
embodied in proposed amendments to the existing
bankruptcy law which were submitted by the President to Congress, Feb. 29 1932. The report by the
Commerce Department is confined to the economic
effects and causes of bankruptcy, while the Departnfent of Justice investigated the legal phases and
operations of the law. Although working independently of each other, and differing in methods of approach, the conclusions reached by the two departments are similar. They reveal that the problem of
reducing the number of bankruptcies and the subsequent losses can be solved only by the concerted
aetion of legislators, credit grantors and debtors.

Since 1920 wage-earner bankruptcies, as classified
by the Attorney-General, have increased every year,
even at a greater rate than bankruptcies among merchants and manufacturers. According to the Census
Bureau, the population of the United States .increased from 105,710,620 in 1920 to 122,775,046 in
1930, an increase of 16.1%, whereas bankruptcies
among wage earners increased from 5,647 in 1920 to
29,067 in 1930, or 414%, and they now account for
nearly 50% of all bankruptcies.
Besides the millions of dollars lost through rer
corded bankruptcies, there ai e millions lost to creditors by persons who do not pay their bills and who
are not discharged of their debts through bankruptcy. No satisfactory estimate has been made of
the total bad-debt losses through consumer credit.
Recorded losses through bankruptcies of all types
—merchants,farmers, wage earners, and others—in
the 12 years, 1920 . 1931 inclusive, were $7,223,727,656, and the average amount received by creditors during this period was 8.43c. on the dollar.

Financial Chronicle

Volume 130

• The following table shows the number and percentage of total bankruptcies by types,from 1920 to 1930,
Wage Earners.

Merchants and

Professional Persons.


Cent of


Cent of







Per Cent
Per Centl
Per Cent
Number. of Total. Number. of Total. Number. of Total

1925 •
a Based on Attorney-Generai's reports. b Increase of 414% from 1920-1930.
c Increase of 170% from 1920-1930. d Increase of 228% from 1920-1930. e Increase
of 347% from 1920-1930. f Increase of 173% from 1920-1930.


of all bankruptcies have been traced to extravagance.
The unprecedented speculation which preceded the
collapse of stocks, bonds, and real estate, and commodity prices in 1929 was also widespread among
persons engaged in every conceivable occupation.
The vast majority of those speculating in stocks and
bonds had little knowledge of stock-market practices
or of the technique of financial speculation. This
was indicated by the fact that 7% of the bankruptcies
studied were definitely caused by speculation.
The inability of unwillingness to pay judgment
liabilities arising from defaulted notes indorsed for
friends or relatives, personal injuries and property
damages occurring as a consequence of automobile
accidents, slander, libel, and other tort actions is
also one of the most prevalent causes of bankruptcy
among consumers. In 15.4% of de cases studied the
Department of Commerce fund that bankruptcy was
resorted to in order to avoid payment of judgment
debts; 87.8% of these judgments were obtained
against indorsers of notes for others; 7.3% were
automobile accident judgments, and 4.9% were obtained by the administrators of the estate of a. dishonest automobile dealer who had secured the signature of the bankrupts to purchase agreements for
automobiles which he failed to deliver.

There is no question but what the ease with which
debts can be discharged through bankruptcy has had
a.material influence on the increase in the number of
The present bankruptcy law was passed in 1898,
consumer))ankruptcies. The bankruptcy court has
increasingly become a dumping ground for the refuse and has remained unchanged except Mr a few minor
unable to foresee
of poorly-managed personal affairs of consumers and amendments. The authors were
the tremendous growth of consumer credit and its
a sanctuary where debtors obtain cancellation of
their debts, regardless of how they have wasted their attendant abuses. The use of the bankruptcy law as
property, or how fraudulently, extravagantly, or im- a means of being relieved of automobile-accident
judgments was not anticipated. The practice of inprovidently they may have created obligations. There are, of course, some of the third classification dorsing notes for others has increased with the de-who are overburdened with debt and who cannot velopment of certain types of small loan financing.
Indorsers frequently resort to bankruptcy in order,
to be discharged from-liabilities on defaulted notes.
Methods of financing real estate transactions have
' It is estimated that in 1910 the total volume.of
retail sales amounted to $20,000,000,000, of which changed considerably since the passage of the present
approximately $2,000,000,000, or 10%, was on credit. law. Unsuccessful real estate venturers now secure
The national retail credit survey, made in 1927 by freedom from their obligations in the bankruptcy
the Department of Commerce, showed that 47% of court. Retail merchants and other creditors in all
retail sales were made on credit. In 1929,the Census but a few cases are included in the petitions filed by
of Distribution revealed that retail sales through all persons seeking relief from automobile-accident
channels exceeded $53,000,000,000. •It is estimated judgments, liability as indorsers on defaulted notes,
that 50% of this was on a credit basis. Estimates and real estate obligations.
"The mere fact that 98% of the commercial bankalso show that in the year 1929 over six billion dol/
lars' worth of goods was sold on the instalment plan. ruptcies and about 991 2% of the non-commercial
Other sources of consumer credit, such as personal bankrupts who seek a discharge are granted disfinance companies, industrial banks, credit unions, charges outright suggests inquiry regarding the conpawn brokers; &c., have developed a business during sideration which is given to applications for disthe last decade which now amounts to approximately charge. The fact is thUt in most cases these applicafour billions annually. In spite of the fact that con- tions receive no consideration at all. No one is under
sumer credit is economically sound in principle and any duty to oppose his discharge, however fraudupractice, it remains for those concerned to so admin- lent or extravagant he may have been." One of the
ister it that its benefits may be secured and it abuses outstanding defects of the existing bankruptcy law,
therefore, appears to be that its leniency actually eneliminated.
Since the entire structure of consumer credit is courages many to use the law as a means of dischargbased on the continuity of income received for per- ing legitimate debts.
sonal services, the cessation of normal commercial
activities and the resultant unemployment, brought
Congress has the power to enact legislation to proabout substantial wage reductions and a huge decline tect the credit of the'nation and to control debtors'
in commodity prices. Therefore, a large number of affairs before assets'have been used or squandered.
bankruptcies can be traced to instability of consumer A bankruptcy law under which creditors in all types
income. Extravagance rather than thrift was an ac- of cases receive on an average less than eight cents on
companiment of prosperity. Throughout the last the dollar, and debtors receive discharges indiscrimidecade, particularly during the period 1925-1929, nately, should be amended.
Credit grantors can prevent bankruptcies of conwhen business was supposed to be at its best, bankruptcy was at its worst. As a matter of fact, 28% sumers by not permitting them to incur debts which



Financial Chronicle

give rise to subsequent proceedings. Intelligent
credit methods bear indirectly on the reduction in
the number of bankruptcies and the attendant losses.
The avoidance by debtors of the causes of bankruptcy consequently would further materially decrease the number of bankruptcies. Some of the suggested preventives are:
1. Extravagance may be eliminated in part by:
(a) A denial of discharge in bankruptcy to extravagant
debtors until at least 50% of the bankrupt's debts have been
paid. This can be accomplished by forcing the debtor to
amortize his debts out of future eagnings over a period of
(h) Careful credit extension, which would involve a
thorough knowledge of (1) income, (2) cost of living, (3)
entire debt position (including amount and itemization of
payments previously assumed and contingent liabilities as
indorsers), (4) antecedents.
(c)'Education of debtors and credit grantors in the standards upon which credit should be based.
(d) Credit grantors assisting debtors in budgeting incomes and refraining from overselling.
2. Dishonesty may be partly curtailed by:
(a) A thorough investigation of every bankruptcy, with
particulai reference to the causes, and a denial of discharges
to fraudulent debtors, with appropriate punishment for
each case.
(b) Co-operation between credit grantors in providing and
disseminating information concerning dishonest debtors,
especially among loan and finance companies.
3. Speculation.—Among the many ways of curbing speculation, the following are mentioned as worthy of consideration:
(a) Real estate development regulated by national, State,
or local supervision. Regulation of all projects financed by
construction loans when the participation of the public is
(b) Speculation in stocks and bonds regulated and controlled to prevent inflation or unwarranted stock and bond
(c) The bankrupt who has speculated in real estate,
stocks, bonds, or who has gambled, should be refused a total
discharge of his debts In bankruptcy.
4. It is stated that evasion of judgments might be dealt
with in the following ways:
(a) Debtors seeking relief from judgments which they
cannot pay should be prevented from including in their petitions for bankruptcy discharge debts owing to trade creditors
for necessities of life.
(b) Compulsory automobile-accident insurance would prevent many bankruptcies.
(c) Credit extension by loan companies based on the credit
worthiness of the individual rather than that of his indorsers. A poor credit risk who secures the indorsement of
friends and who later defaults frequently causes the bankruptcy of his indorsers.
Drop in National Wealth of United States from
362 Billion Dollars in 1929 to 247 Billion in
1932—Peak $488,700,000,000 in 1920.
The national wealth of the United States shrank from
$362 billion in 1929 to $247 billion in 1932, or from $2,977
per capita to $1,981 per capita, according to estimates
announced May 22 by the National Industrial Conference
Board in a bulletin entitled "Estimating the National
Wealth." According to the Board's estimates, the national
wealth reached its peak in 1920 at $488.7 billion, or $4,587
per capita. The next year, 1921, saw it drop to $317.2
billion, or $2,932 per capita. In the following years fluctuations were confined within relatively narrow limits until
1931, when the national wealth dropped to $280.3 billion.
In the 20 years from 1912 to 1932, while the total national
wealth increased from $186.3 billion to $247 billion, the
nation's population also grew, so that per capita wealth
increased only from $1,950 to $1,981, or $31 in the two
decades. •
Commenting upon the drop from $321 billion in 1922,
when the Census Bureau last estimated the national wealth,
to the figure of $247 billion for 1932, the Conference Board
points out that this shrinkage reflects largely the decrease
in prices or, in other words, the increase in the purchasing
power of the dollar that measures wealth, rather than a

June 3 1933

decrease in the quantity of things measured. The Conference Board also says:
The determining factor in these striking changes was not a change in
the volume of the physical assets of the nation, but rather in the rates at
which, accnrdlng to the varying price levels, those assets are valued. As a
matter of fact, there is well-grounded belief that despite the figures dted
the physical assets of the nation were greater in 1932 than 10 years before.

The national wealth is the sum total of physical assets
within the country.' To list them, make a complete inventory, and assign to each its value would be, the Conference
Board points out, an almost impossible task. Short cuts
and estimates characterize any effort to evaluate wealth.
These estimates do not include stocks, bonds and other
securities, which are merely titles to wealth. The rise or
the fall in the value of such securities does not change the
physical assets upon which they are based.
In all the changes of prices that have taken place, and in
all the changes in the value of the nation's assets, those
assets have had no corresponding changes in volume. In
the years of prosperity that followed 1922 the tangible wealth
is believed to have increased gradually in volume until 1930.
The marked decline of national income in 1931 and 1932
makes an increase in those years improbable. The Conference Board estimates that no appreciable change in volume
of physical assets took place in 1931, but that in 1932 there
was some impairment of the physical property of the nation.
The following table, made available by the Board, gives
the estimated valuation of the physical assets of the nation
in terms of actual dollars based upon current prices for 1920,
1925 and the depression years 1929 to 1932:

Estimates of National Industrial Conference Board,


Per Capita.



The Course of the Bond Market.
Bond prices made little headway this week, but on the
other hand they lost no ground. In fact, the price average
for 120 domestic issues stood at 85.35 all week with the
exception of Friday, when it rose to 85.87. Railroad issues
showed a slight upward trend, while utilities were irregular.
On Friday, May 26, the Administration introduced a measure in Congress which divorces the country from gold by
statute and repudiates all bond'contracts to pay in gold..
Ordinarily such a step would have precipitated a panic in
the bond .market, but under present conditions the result
has been merely a furious rise in speculative markets. Government and other high grade bonds have remained firm,
which is probably due chiefly to the technical support they
are receiving, or are counted on to receive, through Federal
Reserve operations and cheap money policy. It is not to be
overlooked, furthermore, that there is such a thing as "disguised depreciation"•in bonds, i.e., loss in their purchasing
power in terms of commodities, even when their quotations
remain stable.
Long term government bonds closed the week (up to
.Friday night) at an average price of 103.08, compared to
102.97 a week ago, and the years' high of 103.82 on February 2. They are apparently not disturbed over the prospects
of a new issue of between $800,000,000 and'$1,000,000,000
on June 15, because of the promise of Federal Reserve support. The Federal Reserve banks continued their purchases
of government bonds under the new open market policy,
adding $28,000,000 to their holdings this week.
Railroad bonds tended 'to be firm or strong. Certain of
the speculative and medium grade bonds showed large price
advances, but in the highest quality group .the gains were
limited to fractions. The Pittsburgh & West Virginia 414s,
1960, advanced from 46% to 60, the New York Central 4s.
1934, from 80 to 83n, the Cleveland Union Terminal 53.s,
1972,from 76% to 85,and the Erie 5s, 1975,from 413 to 51.
Here and there in the low-priced field irregularities were
shown because of the thought that possibly, despite the
recent traffic improvement, there might yet have to be certain capital readjustments. For example, Chicago, Rock
Island & Pacific 4s, 1934, started the.week at 31%, declined
to 24 and finished at 28W Similarly, Chicago & North
Western 43 s, 1949, ranged from 255 to 203'g, finishing
at 22%•
Utility bonds in the past week were characterized by considerable irregularity in price but generally speaking a firm
tone was displayed. Net changes for the week were small,

Financial Chronicle

as illustrated by the following: Philadelphia Electric 4s,
1971, from 935 to 937 , Northern States Power 43/2s, 1961,
from 863' to 874, Georgia Power 5s, 1967, from 73 to 75,
and New Orleans Public Service 5s, 1955,from 56 to 59.
A strong tone continued to prevail in industrial bonds,
Setbacks from previous sharp advances were few. Highest
grade issues generally gained fractionally. Motion picture
issues of the more speculative class displayed considerable
strength, Warner Bros. Pictures 6s, 1939,and the Paramount
obligations, being features. Heavy industry bonds continued to do well. Petroleum issues were firm and advances

late •in the week in Sinclair issues were a feature. Packing
bonds held most of their former gains, receding moderately
in some cases. Tire and rubber and steel issues were still
in good demand.
An irregular trend characterized this week's foreign bond.
market. Outstanding developments included a, noticeable
decline in Argentine bond prices and strength in Bolivian
issues. German issues were irregular, Finnish, Danish and
Norwegian firm.
Moody's computed bond prices and bond yield averages
are given in the tables below:
(Based on individual Closing Prices.)

(Based on Average Yields)..


P. U. indict.



rcoa) co occ-cco to



70.0.0nt.M..W0.. 0 M
Nt..W.V 01G0
, 0,1 ROM .W



52 72

58.32 74.36
55.73 71.38
nge Cio sod.
54.80 71.09
53.28 • 70.62
53.88 71.38
57.24 73.65
58.52 74.57
54.18 69.59
57.98 73.15
60.60 75.50
62.48 77.77
61.34 78.25
62.95 78.25
63.11 75.09
64.31 75.71
61.56 71.96
68.94 85.61
53.16 69.59
67.86 78.99
37.94 47.58

c.r.c.conocc...--r-r-nc r-c-c.r_
mcc coo

78 55

I. C


82.87 68.94 85.61
82.02 68.49 84.85
82.02 68.40 84.72
Excha age CI esed•
82.02 68.49 84.60
82.14 68.58 84.60
81.78 68.04 84.47
81.78 67.77 84.35
81.42 67.33 83.97
80.95 66.73 83.23
80.72 66.64 83.11
80.84 66.73 83.35
80.72 66.98 83.35
80.60 66.30 82.74
80.49 66.55 82.50
80.03 00.04 81.90
79.91 65.71 81.90
79.91 65.62 82.02
79.34 65.62 81.66
78.99 65.12 81.66
77.88 63.50 79.91
77.11 62.64 78.99
77.00 82.95 78.77
77.00 62.79 78.88
76.67 62.56 78.55
75.61 61.41 77.11
74.88 60.38 76.25
74.88 59.95 75.61
74.88 59.65 75.40



00=1 00 00 t .Ct•
MOsrtMNN.CNO!NN..0 0.=NkOW

8 MN ,

RR 2a





uic4BCCCn:o;.60;goicioceico. ,-;
mcmccomocc000l000mococcoccoccoccmc mcmcmcwwww ommommccown n a


120 Domestics
by Groups.

Averages. tic.

120 Domestic, by Ratings•





W.000 MOOnWM
Coiviviviviccaivinicicucic.i.coocCCCaic Cr..6.d..,,,,I,;"..4,4,4"„,„,„
moccocc0000cooaccooco '''
coo c00000006000ocoommomecommo co .



June 2
May 31
Apr. 28
Feb. 24
Jan. 27
High 1933
Low 1933
High 1932
Low 1932
Year Ago-.
June 2 1932
Two Years Ago
June 3 1931_ _ _

120 Domestics by Ratings.





June 2__
May 31._
, 19__
Apr. 28._
Feb. 24_
Jan. 27_
Low 1933
High 1933
Low 1932
High 1932
Yr. Ago
June 2'32
2 Yrs.Ago



• 5.80


Sloe k







6 12





k 711

4 20

4 07


Baa. •

120 Domestics
by Groups.

mvc.403.1..cmcocccococcomccVcco occooccoccom.4-474-4741-4-4-4
4.—C4,468C8. 6M6:4Co66 . 1.66826'
ww-c..cmc cal-. 0 -Doom& 0 c
•-. ocoommoomcomomo000c000000%000
6irtMistixte.tai46L4Cob,...80. 14 -c-cgs00 comm0
m c

Volume 136

P. U. Indus.










10 20







R 10


• Note.
-These prices are computed from average yield on the basis of one "Ideal" bond 4ti% coupon, maturing in 31 years) and do not Purport to show either
the average level or the average movement of actual price quotations. They merely serve to illustrate In a more comprehensive way the relative levels and the relative
movement of yield averages, the latter being the truer picture of the bond market.
t The last complete list of bonds used In computing these indexes was published in the -Chronicle" on Jan. 14 1933. page 222. For Moody's Index of bond prices
by months back to 1928. refer to the "Chronicle" of Feb.8 1932. page 907.

Purposes of New York Guaranteed Mortgage Protection
Corporation Explained by President Naumburg.
A statement as to the purpose and progress of the New
York Guaranteed Mortgage Protection Corporation was
issued on May 28 by George W. Naumburg, President of the
recently organized corporation. A recent account bearing
on its formation appeared as follows in the New York
"Herald Tribune" of May 19:
Trust companies holding guaranteed mortgage participation certificates
will form a committee to co-operate with the New York Guaranteed Mortgage Protection Corp., recently created under a special act of the Legislature at the behest of Governor Herbert H. Lehman, George W. Naumberg, its president, reported to the directors yesterday at a meeting in its
new headquarters. 60 East 42d St.
The trust companies are said to hold a large share of the $1,000,000,000
in such securities issued by title and guaranty companies on properties all
over the State. The New York quaranteed Mortgage Protection Corp.,
endowed with broad powers by the Legislature, was set up to protect the
Interests of holders of the certificates, interest on which, in many cases, is
in default.
At the offices of the corporation yesterday it was said that letters had
been sent to 2.774 certificate holders, apprising them of the functions of
the corporation, its powers and personnel, and asking the deposit of certificates.' Letters were sent to holders of only about $9,000,000 worth of
certificates, the names being taken from the first lists received from the
title companies. Similar letters will be sent out from other lists as rapidly
as possible.
There are more than 500,000 certificate holders, it was said, sharing in
the $1,000.000,000 securities issued by 58 title companies under the jurisdiction of the State Banking and Insurance departments. The holders
are located all over the world. About 70,000 properties in New York
state are involved, and they are mortgaged for about S2.000,000,000.
Savings banks hold some portion of the certificates; the trust companies
more, and small investors a great deal. Ender the terms of the law upon
which the corporation acts, it may, if necessary- become the greatest
landlord in the world, through due process of forclosure and management
of the properties involved.
All the directors of the corporation, appointed by George S. Van Schaick,
Superintendent of Insurance, were present at yesterday's meeting except

Edwin L. Miller, of Buffalo.. Besides Mr. Naumberg, President, there
were Henry Bruere. Peter P. Smith, Joseph P. Lincoln Cromwell and
Harold Stone.
The trust company committee is expected to be ready to function soon.
At present much of the work of the corporation is the assembling of information from the title companies as to security issues and their holders.

Mr. Naumberg's announcement of May 28 follows:
While the number and amount of certificates deposited to date have been
satisfactory, it is quite evident from questions asked that there are a number
of points in connection with the purpose of this organization which are not
entirely clear to the participation certificate holders. This corporation,
formed under sponsorship of the Insurance Dept. and of Governor Lehman
and endowed with broad powers by the Legislature, has been set up to
work out in a common-sense,logical way the difficulties of those guaranteed
properties which are in trouble.
This is first and foremost a non-profit making body, which is Operating
under different principles from those employed by so called "protective
committees." The corporation is under the supervision of and in constant
consultation with the Department of Insurance of New York State both
as to its actions and its expenses.
It is contemplated and so stated to depositing certificates holder that
without further consent of these holders, the expenses of this corporation
will not be more than I% of the face amount of the certificates deposited.
From this it can be readily seen that the operations of the company will
be conducted at the lowest possible expense and undoubtedly at a far less
cost than would be possible by any committee or individuals. Further.
due to the character of the corporation's board of directors, and the fact
that it is receiving the approval of the Banking and Real Estate Fraternities of this State, the best available advice is obtained.
Arrangements are now being made for the formation of various advisory
committees for different branches of the work to be done.
It is not the intention of this corporation, or its advisers, to recommend
the release of any of the guarantee companies from their obligations unless
it is felt that it is to the advantage of the certificate holders to do so. Our
purpose is at all times to protect the interest of the certificate holders, and
and at no time to relinquish any just claim that may be of value to them.
We believe it to be in the best interest of the holders of certificates to
act together. Therefore, deposits with this corporation, Room 443, Lincoln
Building, 60 E. 42d St., New York City, are invited. It is our intention
from time to time to keep certificate holders fully informed as to all developments affecting their interests.


Financial Chronicle

June 3 1933

Text of Federal Securities Act.
The following is the text of the Federal Securities Act as
passed'by Congress and signed by President Roosevelt on
May 27:

(1) Any security which, prior to or within sixty•days after the enactment of this title, has been sold or disposed of by the issuer or bona fide

offered to the public, but this exemption shall not apply to any new
offering of any such security by an issuer or underwriter subsequent to
such sixty days;
(2) Any security issued or guaranteed by the United States or any
Territory thereof, or by the District of Columbia, or by any Stateof
the United States, or by any political subdivision of a State or Territory,
or by any public instrumentality of one or more States or Territories
exercising an essential governmental function, or by any corporation
created and controlled or supervised by and acting as an instrumentality,
of the Government of the United States pursuant to authority granted'
by the Congress of the United States, or by any -national bank, or by
any banking institution organized under the laws of any State or Territory, the business of which is substantially confined to banking and is
supervised by the State or territorial banking commission or similar
official; or any security issued by or representing an interest in or a
direct obligation of a Federal Reserve bank;
Sec. 2. When used in this title, unless the context otherwise requires—
(3) Any note, draft, bill of exchange, or bankers acceptance which
(1) The term "security" means any note, stock, treasury stock, arises out of a current transaction or the proceeds of which have been
bond, debenture, evidence of indebtedness, certificate of interest or
or are to be used for current transactions, and which has a maturity at
the time of issuance of not exceeding nine months, exclusive of days of
participation in any profit-sharing agreement, collateral-trust certificate,
pre-organization certificate or subscription, transferable share, investgrace, or any renewal thereof the maturity of which is likewise limited;
ment contract, voting-trust certificate, certificate of interest in property,
(4) Any security issued by a corporation organized and operated extangible or intangible, or, in general, any instrument commonly known
clusively for religious, educational, benevolent, fraternal, charitable, or
as a security, or any certificate of interest or participation in, temporary
reformatory purposes and not for pecuniary profit and no part of the
net earnings of which inures to the benefit of any person, private stockor interim certificate for, receipt for, or warrant or right to subscribe to
or purchase, any of the foregoing.
holder, or individual;
(2) The term "person" means an individual, a corporation, a partner(5) Any security issued by a building and loan association, homestead
ship, an association, a joint-stock company, a trust, any unincorporated
association, savings and loan association, or similar institution, suborganization, or a government or political subdivision thereof. As used' stantially all the business of which is confined to the making of loans to
In this paragraph the term "trust" shall include only a trust where the
members (but the foregoing exemption shall not apply with respect to
Interest or interests of the beneficiary or beneficiaries are evidenced by
any such security where the issuer takes from the total amount paid or
a security.
deposited by the purchaser, by way of any fee, cash value or other
device whatsoever,either upon termination of the investment at maturity
(3) The term "sale," "sell," "offer to sell," or "offer for sale" shall
include every contract of sale or disposition of, attempt or offer to
or before maturity, an aggregate amount in excess of 3 per centum of
dispose of, or solicitation of an offer to buy, a security or interest in a
the face value of such security), or any security issued by'a farmers'
security, for value except that such terms shall not include preliminary
co-operative association as defined in paragraphs (12),(13); and (14) of
negotiations or agreements between an issuer and any underwriter. Any
Section 103 of the Revenue Act of 1932;
security given or delivered with, or as a bonus on account of, any pur(6) Any security issued by a common carrier which is subject to the
chase of securities or any other thing, shall be conclusively presumed to
provisions of Section 20a of the Inter-State Commerce Act,as amended; •
constitute a part of the subject of such purchase and to have been sold
(7) Certificates issued by a receiver or by a trustee in bankruptcy,
for value. The issue or transfer of a right or privilege, when originally
with the approval of the court;
issued or transferred with a security, giving the holder of such security
(8) Any insurance or endowment policy or annuity contract or optional
the right to convert such security into another security of the same
annuity contract, issued by a corporation subject to the supervision of
Issuer or of another person, or giving a right to subscribe to another
the insurance commissioner, bank commissioner, or any agency or officer
security of the same issuer or of another person, which right'cannot be
performing like functions, of any State or Territory of the United States
exercised until some future date, shall not be deemed to be a sale of such
or the District of Columbia.
other security but the issue or transfer of such other security upon the
(b) *
The Commission may from time to time by its rules and regulaexercise of such right of conversion or subscription shall be deemed a
tions, and subject to such terms and conditions as may be prescribed
sale of such other security.
therein, add any class of securities to the securities exempted as provided
(4) The term "issuer" means every person who issues or proposes to' In this section, if it finds that the enforcement of this title with respect
issue any security or who guarantees a security either as to principal or
to such securities is not necessary in the public interest and for the
income except that with respect to certificates of deposit, voting-trust
protection of investors by reason of the small amount involved or the
certificates, or collateral-trust certificates, or with respect to certificates limited character of the public offering but no issue of securities shall
of interest or shares in an unincorporated Investment trust not having
be exempted under this subsection where the aggregate amount at which
a board of directors (or persons performing similar functions) or of the
such issue is offered to the public exceeds $100,000.
fixed, restricted management, or unit type, the term "issuer" means the
Exempted Transactions.
person or persons performing the acts and assuming the duties of depositor
or manager pursuant to the provisions of the trust or other agreement
Sec. 4. The provisions of Section 5 shall not apply to any of the
or instrument under which such securities are issued and except that following transactions:
with respect to equipment-trust certificates or like securities, the term
(1) Transactions by any person other than an issuer, underwriter,
"issuer" means the person by whom the equipment or property is or is
or dealer transactions by an issuer not with or through an underwriter
to be used.
and not involving any public offering or transactions by a dealer (in(5) The term "Commission" means the Federal Trade Commission.
cluding an underwriter no longer acting as an underwriter in respect of
(6) The term "Territory" means Alaska, Hawaii, Puerto Rico, the
the security involved in such transaction), except transactions within
Philippine Islands, Canal Zone, the Virgin Islands, and the insular
one year after the last date upon which the security was bona fide offered
posssasions of the 'United States.
to the public by the issuer or by or through an underwriter (excluding in
(7) The term "inter-State commerce" means trade or commerce in
the computation of such year any time during which a stop order issued
securities or any transportation or communication relating thereto among
under Section 8 is in effect as to the security), and except transactions as
the several States or between the District of Columbia or any Territory
to securities constituting the whole or a part of an unsold allotment to
of the United States and any State or other Territory, or between any
or subscription by such dealer as a participant in the distribution of such
foreign country and any State, Territory, or the District of Columbia, securities by the issuer or by or through an underwriter.
or within the District of Columbia.
(2) Brokers' transactions, executed upon customers' orders on any
(8) The term "registration statement" means the statement provided
exchange or in the open or counter market, but not the solicitation of
for in Section 6, and includes any amendment thereto and any report, such orders.
document,or memorandum accompanying such statement or incorporated
(3) The issuance of a security of a person exchanged by it with its
therein by reference.
existing security holders exclusively, where no commission or other
(9) The term "write" or "written" shall include printed, lithographed, remuneration is paid or given directly or indirectly in connection with
or any means of graphic communication.
such exchange or the issuance of securities to the existing security holders
(10) The term "prospectus" means any prospectus, notice, circular, or other existing creditors of a corporation in the process of a bona fide
advertisement, letter, or communication, written or by radio, which
reorganization of such corporation under the supervision of any court,
offers any security for sale except that (a) a communication shall not
either in exchange for the securities of such security holders or claims of
be deemed a prospectus if it is proved that prior to such communication such creditors or partly for cash and partly in exchange for the securities
a written prospectus meeting the requirements of Section 10 was received, or claims of such security holders or creditors.
by the person to whom the communication was made, from the person
making such communication or his principal, and (b) a notice, circular,
Prohibitions Relating to Inter-State Commerce and the Mails.
advertisement, letter, or communication in respect of a security shall
Sec. 5. (a) Unless a registration statement is in effect as to a security,
not be deemed to be a prospectus if it states from whom a written pros- It shall be
unlawful for any person, directly or indirectly—
pectus meeting the requirements of Section 10 may be obtained and, in
(1) to make use of any means or ihstruments of transportation or
addition, does no more than identify the security, state the price thereof, communication in inter-State commerce or of the mails to sell or offer
and state by whom orders will be executed.
to buy such security through the use or medium of any prospectus or
(11) The term "underwriter" means any person who has purchased
otherwise or
from an issuer with a view to, or sells for an issuer in connection with,
(2) to carry or cause to be carried through the mails or In interthe distribution of any security, or participates or has a direct or indirect
State commerce, by any means or instruments of transportation, MY
participation in any such undertaking, or participates or has a participa- such security for the purpose of sale or for delivery after sale.
tion in the direct or indirect underwriting of any such undertaking but
(b) It shall be unlawful for any person, directly or indirectly—
such term shall not include a person whose interest is limited to a com(1) to make use of any means or instruments of transportation or
mission from an underwriter or dealer not in excess of the usual and
communication in inter-State commerce or of the mails to carry or transcustomary distributors' or sellers' commission. As used in this paramit any prospectus relating to any security registered under this title,
graph the term "issuer" shall include,in addition to an issuer, any person
unless such prospectus meets the requirements of Section 10 or
directly or indirectly controlling or controlled by the issuer, or any
• (2) to carry or to cause to be carried through the mails or in interperson under direct or indirect common control with the issuer.
State commerce any such security for the purpose of sale or for delivery
(12) The term "dealer" means any person who engages either for all
after sale, unless accompanied or Preceded by a prospectus that meets
or part of his time, directly or indirectly, as agent, broker, or principal,
the requirements of Section 10.
In the business of offering, buying, selling, or otherwise dealing or trading
(c) The provisions of this section relating to the use of the malls shall
in securities issued by another person.
not apply to the sale of any security where the issue of which it is a part
Is sold only to persons rissident within a single State or Territory, where
Exempted Securities.
the issuer of such securities is a person resident and doing business withSee 3 (a) Except as hereinafter expressly provided, the provision of
in, or. if a corporation, incorporated by and doing business within, such
State or Territory.
this title shall not apply to any of the following classes of securities:
111. R. 54801
To provide full and fair disclosure of the character of securities sold in
Inter-State and foreign commerce and through the mails, and to
prevent frauds in the sale thereof, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States
of America in Congress assembled,
Short Title.
Section 1. This title may be cited as the "Securities Act of 1933."



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Financial Chronicle

Registration of Securities and Signing of Registration Statement.
Sec. 6. (a) Any security may be registered with the Commission
under the terms and conditions hereinafter provided, by filing a registration statement in triplicate, at least one of which shall be signed by each
issuer, its principal executive officer or officers, its principal financial
officer, its comptroller or principal accounting officer, and the majority
of its board of directors or persons performing similar functions (or, if
there is no board of directors or persons performing similar functions,
by the majority of the persons or board having the power of management
of the issuer), and in case the issuer is a foreign or Territorial person by
its duly authorized representative in the United States except that
when such registration statement relates to a security issued by a foreign
government, or political subdivision thereof, it need be signed only by
the underwriter of such security. Signatures of all such persons when
written on the said registration statements shall be presumed to have
been so written by authority of the person whose signature is so affixed
and the burden of proof, in the event such authority shall be denied,
shall be upon the party denying the same. The affixing of any signature
without the authority of the purported signer shall constitute a violation
of this title. A registration statement shall be deemed effective only as
to the securities specified therein as proposed to be offered.
(b) At the time of filing a registration statement the applicant shall
pay to the Commission a fee of one one-hundredth of 1 per centum of
the maximum aggregate price at which such securities are proposed to
be offered, but in no case shall such fee be less than $25.
(c) The filing with the Commission of a registration statement, or of
an amendment to a registration statement,shall be deemed to have taken
place upon the receipt thereof, but the filing of a registration statement
shall not be deemed to have taken place unless it is accompanied by a
United States postal money order or a certified bank check or cash for
the amount of the fee required under subsection (b).
(d) The information contained in or filed with any registration statement shall be made available to the public under such regulations as
the Commission may prescribe, and copies thereof, photostatic or otherwise, shall be furnished to every applicant at such reasonable charge as
the Commission may prescribe.
(e) No registration statement may be filed within the first forty days
following the enactment of this Act.


under subsection (d). In making such examination the Commission
or any officer or officers designated by it shall have access to and may
demand the production of any books and papers of, and may administer
oaths and affirmations to and examine, the issuer, underwriter, or any
other person, in respect of any matter relevant to the examination,
and may, in its discretion, require the production of a balance sheet
exhibiting the assets and liabilities of the issuer, or its income statement, or both, to be certified to by a public or certified accountant .7
approved by the Commission. If the issuer or underwriter shall fail
to co-operate, or shall obstruct or refuge to permit the making of an
examination, such conduct shall be proper ground for the issuance of
a atop order.
(f) Any notice required under this section shall be sent to or served
on the issuer, or, in case of a foreign government or political subdivision
thereof, to or on the underwriter, or, in the case of a foreign or Territorial person, to or on its duly authorized representative in the United
States named in the registration statement, properly directed in each
case of telegraphic notice to the address given in such statement.
Court Review of Orders.
Sec. 9. (a) Any person aggrieved by an order of the Commission
may obtain a view of such order in the Circuit Court of Appeals of
the United States, within any circuit wherein such person resides or
has his principal place of business, or in the Court of Appeals of the
District of Columbia, by filing in such court, within 60 days after the
entry of such order, a written petition praying that the order of the Commission be modified or be set aside in whole or in part. A copy of such
petition shall be forthwith served upon the Commission, and thereupon the Commission shall certify and file in the court a transcript of
the record upon which the order complained of was entered. No objection to the order of the Commission shall be considered by the court
unless such objection shall have been urged before the Commission.
The finding of the Commission as to the facts, if supported by evidence,
shall be conclusive. If either party shall apply to the court for leave
to adduce additional evidence, and shall show to the satisfaction of
the court that such additional evidence is material and that there were
reasonable grounds for failure to adduce such evidence in the hearing
before the Commission, the court may order such additional evidence
to be taken before the Commission and to be adduced upon the hearing
in such manner and upon such terms and conditions as to the court may
Information Required in Registration Statement.
Sec. 7. The registration statement, when relating to a security other seem proper. The Commission may modify its findings as to the
facts, by reason of the additional evidence so taken, and it shall file
than a security issued by a foreign government, or political subdivision
such modified or new findings, which, if supported by evidence, shall
thereof, shall contain the information, and be accompanied by the
be conclusive, and its recommendation, if any, for the modification or
documents, specified in Schedule A, and when relating to a security
issued by a foreign government, or political subdivision thereof, shall setting aside of the original order. The jurisdiction of the court shall
be exclusive, and its judgment and decree, affirming, modifying, or
contain the information, and be accompanied by the documents, specified
in Schedule B except that the Commission may by rules or regulations setting aside, in whole or in part, any order of the Commission, shall be
final, subject to review by the Supreme Court of the United States
provide that any such information or document heed not be included in
upon certiorari or certification as provided in Sections 239 and 240
respect of any class of issuers or securities if it finds that the requirement
of the Judicial Code, as amended (U.S.C., title 28, secs. 346 and 347)•
of such information or document is inapplicable to such class and that
(b) The commencement of proceedings under subsection (a) shall
disclosure fully adequate for the protection of investors is otherwise
required to be included within the registration statement. • It any" not, unless specifically ordered by the court, operate as a stay of the
Commission's order
accountant, engineer, or appraiser, or any person whose profession gives
Information Required in Prospectus.
authority to a statement made by him, is named as having prepared or
certified any part of the registration statement, or is named as having
Sec. 10. (a) A prospectus—
prepared or certified a report or valuation for use in connection with
(1) when relating to a security other than a security issued by a
the registration statement, the written consent of such person shall be foreign government or political subdivision thereof, shall contain the
filed with the registration statement.v* If any such person is named as same statements made in the registration statement, but it need not
having prepared or certified a report or valuation (other than a public
include the documents referred to in paragraphs (28) to (32), inclusive,
official document or statement) which is used in connection with the
of Schedule A
registration statement, but is not named as having prepared or certified
(2) when relating to a security issued by a foreign government or
such report or valuation for use in connection with the registration
political subdivision thereof shall contain the same statements made in
statement, the written consent of such person shall be filed with the
the registration statement, but it need not include the documents referred
registration statement unless the Commission dispenses with such filing
to in paragraphs (13) and (14) of Schedule B.
as impracticable or as involving undue hardship on the person filing the
(b) Notwithstanding the provisions of subsection (a)—
registration statement. Any such registration statement shall contain
(1) when a prospectus is used more than 13 months after the effective
such other information, and be accompanied by such other documents, date of the registration statement, the information in the statements
as the Commission may by rules or regulations require as being necessary
contained therein shall be as of a date not more than 12 months prior
or appropriate in the public interest or for the protection of investors. to such use.
(2) there may be omitted from any prospectus any of the statements
Taking Effect of Registration Statements and Amendments Thereto.
required under such subsection (a) which the Commission may by rules
Sec. 8. (a) The effective date of a registration statement shall be
or regulations designate as not being necessary or appropriate in the
the twentieth day after the filing thereof, except as hereinafter propublic interest or for the protection of investors.
vided, and except that in case of securities of any foreign public authority,
(3) any prospectus shall contain such other information as the Comwhich has continued the full service of its obligations in the United
mission may by rules or regulations require as being necessary or apStates, the proceeds of which are to be devoted to the refunding of
propriate in the public interest or for the protection of investors.
obligations payable in the United States, the registration statement
(4) in the exercise of its powers under paragraphs (2) and (3) of this
shall become effective seven days after the filing thereof. If any amend- subsection, the Commission shall have authority to classify prospectuses
ment to any such statement is filed prior to the effective date of such
according to the nature and circumstances of their use, and, by rules
statement, the registration statement shall be deemed to have been
and regulations and subject to such terms and conditions as it shall
filed when such amendment was filed; except that an amendment filed
specify therein, to prescribe as to each class the form and contents which
with the consent of the Commission, prior to the effective date of the
it may find appropriate to such use and consistent with the public interest
registration statement, or filed pursuant to an order of the Commission, and the protection of investors.
shall be treated as a part of the registration statement.
(c) The statements or information required to be included in a pros(b) If it appears to the Commission that a registration statement is
pectus by or under authority of subsection (a) or (b), when written,
on its face incomplete or inaccurate in any material respect, the Comshall be placed in a conspicuous part of the prospectus in type as large
mission may, after notice by personal service or the sending of conas that used generally in the body of the prospectus.
firmed telegraphic notice not later than 10 days after the filing of the
(d) In any case where a prospectus consists of a radio broadcast,
registration statement, and opportunity for hearing (at a time fixed
copies thereof shall be filed with the Commission under such rules and
by the Commission) within 10 days after such notice by personal service
regulations as it shall prescribe. The Commission may by rules and
or the sending of such telegraphic notice, issue an order prior to the
regulations require the filing with it of forms of prospectuses used in
effective date of registration refusing to permit such statement to become
connection with the sale of securities registered under this title.
effective until it has been amended in accordance with such order.
Civil Liabilities on Account of False Registration Statement.
When such statement has been aniended in accordance with such order
Sec. 11. (a) In case any part of the registration statement, when such
the Commission shall so declare and the registration shall become efpart became effective, contained an untrue statement of a material fact
fective at the time provided in subsection (a) or upon the date of such
declaration, whichever date is the later.
or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, any person acquiring
(c) An amendment filed after the effective date of the registration
such security (unless it is proved that at the time of such acquisition he
statement, if such amendment, upon its face, appears to the Comknew of such untruth or omission) may, either at law or in equity, in
mission not to be incomplete or inaccurate in any material respect,
Commission may determine, any court of competent jurisdiction, sue—
shall become effective on such date as the
(1) every person who signed the registration statement;
having due regard to the public interest and the protection of investors.
(2) every person who was a director of (or person performing similar
(d) If it appears to the Commission at any time that the registration
statement includes any untrue statement of a material fact or omits functions) or partner in, the issuer at the time of the filing of the part of
the registration statement with respect to which his liability is asserted;
to state any material fact required to be stated therein or necessary to
(3) every person who, with his consent, is named in the registration
make the statements therein not misleading, the Commission may, after
notice by personal service or the sending of confirmed telegraphic notice, statement as being or about to become a director, person performing
and after opportunity for hearing (at a time fixed by the Commission) similar functions, or partner;
(4) every accountant, engineer, or appraiser, or any person whose
within 15 days after such notice by personal service or the sending of
profession gives authority to a statement made by him, who has with his
such telegraphic notice, issue a stop order suspending the effectiveness
registration statement. When such statement has been amended
consent been named as having prepared or certified any part of the
of the
registration statement, or as having prepared or certified any report or
in accordance with such stop order the Commission shall so declare
valuation which is used in connection with the registration statement,
and thereupon the stop order shall cease to be effective.
Commission is hereby empowered to make an examination
with'respect to the statement in such registration statement, report, or
(e) The
valuation, which purports to have been prepared or certified by him;
case in order to determine whether a stop order should issue
in any


Financial Chronicle

(5) every underwriter with respect to such security.
(b) Notwithstanding the provisions of subsection (a) no person, other
than the issuer, shall be liable as provided therein who shall sustain
the burden of proof—
(1) that before the effective date of the part of the registration statement with respect to which his liability is asserted (A) he had resigned
from or had taken such steps as are permitted by law to resign from, or
ceased or refused to act in, every office, capacity, or relationship in
which he was described in the registration statement as acting or agreeBig to act, and (B) he had advised the Commission and the issuer in
writing that he had taken such action and that he would not be responsible
for such part of the registration statement; or
(2) that if such part of the registration statement became effective
without his knowledge, upon becoming aware of such fact he forthwith
acted and advised the Commission, in accordance with paragraph (1),
and, in addition, gave reasonable public notice that such part of the
registration statement had become effective without his knowledge; or
(3) that (A) as regards any part of the registration statement not
purporting to be made on the authority of an expert, and not purporting
to be a copy of or extract from a report or valuation of an expert, and
not purporting to be made on the authority of a public official document
or statement, he had, after reasonable investigation, reasonable ground
to believe and did believe, at the time such part of the registration statement became effective, that the statements therein were true and that
there was no omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and
(B) as regards any part of the registration statement purporting to be
made upon his authority as an expert or purporting to be a copy of or
extract a report or valuation of himself as an expert, (i) he had, after
reasonable investigation, reasonable ground to believe and did believe, at
the time such part of the registration statement became effective, that
the statements therein were true and that there was no omission to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (ii) such part of the registration
statement did not fairly represent his statement as an expert or was not
a fair copy of or extract from his report or valuation as an expert and
(C) as regards any part of the registration statement purporting to be
made on the authority of an expert (other than himself) or purporting
to be a copy of or extract from a report or valuation of an expert (other
than himself), he had reasonable ground to believe and did believe, at
the time such part of the registration statement became effective, that
the statements therein were true and that there was no omission to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and that such part of the registration
statement fairly represented the statement of the expert or was a fair
copy of or extract from the report or valuation of the expert and (D) as
regards any part of the registration statement purporting to be a statement made by an official person or purporting to be a copy of or extract
from a public official document, he had reasonable ground to believe
and did believe, at the time such part of the registration statement
became effective, that the statements therein were true, and that there
was no omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and that such
part of the registration statement fairly represented the statement made
by the official person or was a fair copy of or extract from the public
oflicial document.
(c) In determining, for the purpose of paragraph (3) of subsection
(h) of this section, what constitutes reasonable investigation and reasonable ground for belief, the standard of reasonableness shall be that
required of a person occupying a fiduciary relationship.
(d) If any person becomes an underwriter with respect to the security
after the part of the registration statement with respect to which his
liability is asserted has become effective, then for the purposes of paragraph (3) of subsection (b) of this section such part of the registration
statement shall be considered as having become effective with respect
to such person as of the time when he became an underwriter.
(e) The suit authorized under subsection (a) may be either (1) to
recover the consideration paid for such security with interest thereon,
less the amount of any income received thereon, upon the tender of
such security, or (2) for damages if the person suing no longer owns the
(f) All or any one or more of the persons specified in subsection (a)
shall be jointly and severally liable, and every person who becomes
liable to make any payment under this section may recover contribution
as in cases of contract from any person who, if sued separately, would
• have been liable to make the same payment, unless the person who has
becomes liable was, and the other was not, guilty of fraudulent misrepresentation.
(g) In no case shall the amount recoverable under this section exceed
the price at which the security was offered to the public.
Civil Liabilities Arising in Connection with Prospectuses and Communications.
Sec. 12 Any person who—
(1) sells a security in violation of Section 5, or
(2) sells a security (whether or not exempted by the provisions of
Section 3, other than paragraph (2) or subsection (a) thereof, by the
use of any means or instruments of transportation or communication
in inter-State commerce or of the mails, by means of a prospectus or
oral communication, which includes an untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements, in the light of the circumstances under which they were made,
not misleading (the purchaser not knowing of such untruth or omission),
and who shall not sustain the burden of proof that he did not know,
and in the exercise of reasonable care could not have known, of such
untruth or omission, shall be liable to the person purchasing such security from him, who may sue either by law or in equity in any court
of competent jurisdiction, to recover the consideration paid for such
security with interest thereon, less the amount of any income received
thereon, upon the tender of such security, or for damages if he no longer
owns the security.
Limitation of Actions.
Sec. 13. No action shall be maintained to enforce any liability created
under Section 11 or Section 12 (2) unless brought within two years
after the discovery of the untrue statement or the omission, or after
such discovery should have been made by the exercise of reasonable
diligence, or, if the action is to enforce a liability created under Section 12
(1), unless brought within two years after the violation upon which it
is based. In no event shall any such action be brought to enforce a
liability created under Section 11 or Section 12 (1) more than 10 years
after the security was bona fide offered to the public.
Contrary Stipulations Vold.
Sec. 14. Any condition, stipulation, or provision binding any person
acquiring any security to waive compliance with any provision of this
title or of the rules and regulations of the Commission shall be void.

June 3 1933

Liability of Controlling Persons.
Sec.115 IEvery person who, by or through stock ownership, agency,
or otherwise, or who, pursuant to or in connection with an agreement
or understanding with one or more other persons by or through stock
ownership, agency, or otherwise, controls any person liable under
Section 11 or 12, shall also be liable jointly and severally with and to
the same extent as such controlled person to any person to whom such
controlled person is liable.
Additional Remedies.
Sec. 16. The rights and remedies provided by this title shall be in
addition to any and all other rights and remedies that may exist at
law or in equity.
Fraudulent Inter-State Transactions.
Sec. 17. (a) It shall be unlawful for any person in the sale of any
securities by the use of any means or instruments of transportation
or communication in inter-State commerce or by the use of the mails,
directly or indirectly—
(1) to employ any device, scheme, or artifice to defraud, or
(2) to obtain money or property by means of any untrue statement
of a material fact or any omission to state a material fact necessary
in order to make the statements made, in the light of the circumstances
under which they were made, not misleading, or
(3) to engage in any transaction, practice, or course of business
which operates or would operate as a fraud or deceit upon the purchaser.
(b) It shall be unlawful for any person, by the use of any means or
instruments of transportation or communication in inter-State commerce or by the use of the mails, to publish, give publicity to, or circulate
any notice, circular, advertisement, newspaper, article, letter, investment service, or communication which, though not purporting to offer
a security for sale, described such security for a consideration received
or to be received, directly or indirectly, from an issuer, underwriter, or
dealer, without fully disclosing the receipt. whether past or prospective.
of such consideration and the amount thereof.
(c) The exemptions provided in Section 3 shall not apply to the
provisions of this section.
State Control of Securities.
Sec. 18. Nothing in this title shall affect the jurisdiction of the Securities Commission (or any agency or office performing like functions)
of any State or Territory of the United States,or the District of Columbia,
over any security or any person.
Special Powers of Commission.
Sec. 19. (a) The Commission shall have authority from time to
time to make, amend, and rescind such rules and regulations as may
be necessary to carry out the provisions of this title, including rules
and regulations governing registration statements and prospectuses
for various classes of securities and issuers, and defining accounting
and trade terms used in this title. Among other things, the Commission shall have authority, for the purposes of this title, to prescribe
the form or forms in which required information shall be set forth,
the items or details to be shown in the balance sheet and earning statetnent, and the methods to be followed in the preparation of accounts,
in the appraisal or valuation of assets and liabilities, in the determination of depreciation and depletion, in the differentiation of recurring
and nonrecurring income, in the differentiation of investment and
operating income, and in the preparation, where the Commission deems
it necessary or desirable, of consolidated balance sheets or income
accounts of any person directly or indirectly controlling or controlled
by the issuer, or any person under direct or indirect common control
with the issuer; but insofar as they relate to any common carrier subject
to the provisions of Section 20 of the Inter-State Commerce Act, as
amended, the rules and regulations of the Commission with respect to
accounts shall not be inconsistent with the requirements imposed by
the Inter-State Commerce Commission under authority of such Section
20. The rules and regulations of the Commission shall be effective
upon publication in the manner which the Commission shall prescribe.
(b) For the purpose of all investigations which, in the opinion of
the Commission, are necessary and proper for the enforcement of this
title, any member of the Commission or any officer or officers designated
by it are empowered to administer oaths and affirmations, subpoena
witnesses, take evidence, and require the production of any books,
papers, or other documents which the Commission deems relevant or
material to the inquiry. Such attendance of witnesses and the production of such documentary evidence may be required from any place
in the United States or any Territory at any designated place of hearing.
Injunctions and Prospectuses of Offenses.
Sec. 20. (a) Whenever it shall appear to the Commission, either
upon complaint or otherwise, that the provisions of this title, or of any
rule or regulation prescribed under authority thereof, have been or
are about to be violated, it may, in its discretion, either require or
permit such person to file with it a statement in writing, under oath,
or otherwise, as to all the facts and circumstances concerning the subject
matter which it believes to be in the public interest to investigate,
and may investigate such facts.
(b) Whenever it shall appear to the Commission that any person is
engaged or about to engage in any acts or practices which constitute
or will constitute a violation of the provisions of this title, or of any
rule or regulation prescribed under authority thereof it may in its
discretion bring an action in any District Court of the United States,
United States court of any Territory or the Supreme Court of the
District of Columbia to enjoin such acts or practices and upon a proper
showing a permanent or temporary injunction or restraining order shall
be granted without bond. The Commission may transmit such evidence
as may be available concerning such acts or practice3 to the AttorneyGeneral who may in his discretion institute the necessary criminal
proceedings under this title. Any such criminal proceeding may be
brought either in the district wherein the transmittal of the prospectus
or security complained of begins, or in the district wherein such prospectus or security is received.
(c) Upon application of the Commission the District courts of the
United States the United States courts of any Territory, and the
Supreme Court of the District Court of Columbia, shall also have jurisdiction to issue writs of mandamus commanding any person tocomply
with the provisions of this title or any order of the Commission made
in pursuance thereof.
Hearings By Commission.
Sec. 21. All hearings shall be public and may be held before the
Commission or an officer or officers of the Commission designated by it,
and appropriate records thereof shall be kept.

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Financial Chronicle

Jurisdiction of Offenses and Suits.
Sec. 22. (a) The district courts of the United States, the United States
courts .of any Territory, and the Supreme Court of the District of
Columbia shall have jurisdiction of offenses and violations under this
title and under the rules and regulations promulgated by the Commission
in respect thereto, and, concurrent with State and Territorial courts,
of all suits in equity and actions at law brought to enforce any liability
or duty created by this title. Any such suit or action may be brought
in the district wherein the defendant is found or is an inhabitant or
transacts business, or in the district where the sale took place, if the
defendant participated therein, and process in such cases may be served
in any other district of which the defendant is an inhabitant or wherever
the defendant may be found. Judgments and decrees so rendered shall
be subject to review as provided in Sections 128 and 240 of the Judicial
Code,as amended (U.S.C., Title 28, Secs. 225 and 347). No case arising
under this title and brought in any State court of competent jurisdiction
shall be removed to any court of the United States. No costs shall be
asses.sed for or against the Commission in any proceeding under this
title brought by or against it in the Supreme Court or such other courts.
(b) In case of contumacy or refusal to obey a subpoena issued to any
person, any of the said United States courts, within the jurisdiction of
which said person guilty of contumacy or refusal to obey is found or
resides, upon application by the Commission may issue to such person
an order requiring such person to appear before the Commission, or one
of its examiners designated by it, there to produce documentary evidence
if so ordered, or there to give evidence touching the matter in question;
and any failure to obey such order of the court may be punished by said
court as a contempt thereof.
(c) No person shall be excused from attending and testifying or from
producing books, papers, contracts, agreements, and other documents
before the Commission, or in obedience to the subpoena of the Commission or any member thereof or any officer designated by it, or in any cause
or proceeding instituted by the Commission, on the ground that the
testimony or evidence, documentary or otherwise, required of him, may
tend to incriminate him or subject him to a penalty or forfeiture; but
no individual shall be prosecuted or subjected to any penalty or forfeiture
for or on account of any transaction, matter, or thing concerning which
he is compelled, after having claimed his privilege against self-incrimination, to testify or produce evidence, documentary or otherwise, except
that such individual so testifying shall not be exempt from prosecution
and punishment for perjury committed in so testifying.
Unlawful Representations.
Sec. 23. Neither the fact that the registration statement for a security
has been filed or is in effect nor the fact that a stop order is not in effect
with respect thereto shall be deemed a finding by the Commission that
the registration statement is true and accurate on its face or that it
does not contain an untrue statement of fact or omit to state a material
fact, or be held to mean that the Commission has in any way passed
upon the merits of, or given approval to, such security. It shall be
unlawful to make, or cause to be made, to any prospective purchaser
any representation contrary to the foregoing provisions of this section.
Sec. 24. Any person who willfully violates any of the provisions of
this title, or the rules and regulations promulgated by the Commission
under authority thereof, or any person who willfully, in a registration
statement filed under this title, makes any untrue statement of a material
fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, shall upon
conviction be fined not more than $5,000 or imprisoned not more than
five years, or both.
Jurisdiction of Other Government Agencies Over Securities.
Sec. 25. Nothing in this title shall relieve any person from submitting
to the respective supervisory units of the Government of the United
States information, reports, or other documents that are now or may
hereafter be required by any provision of law.
Separability of Provisions.
Sec. 26. If any provision of this Act, or the application of such provision to any person or circumstance, shall be held invalid, the remainder
of this Act, or the application of such provision to persons or circumstances other than those as to which it is held invalid, shall not be
affected thereby.
Schedule A.
(1) The name under which the issuer is doing or intends to do business;
(2) the name of the State or other sovereign power under which the
Issuer is organized;
(3) the location of the issuer's principal business office, and if the
Issuer is a foreign or territorial person, the name and address of its
agent in the United States authorized to receive notice;
(4) the names and addresses of the directors or persons performing
similar functions, and the chief executive, financial and accounting
officers, chosen or to be chosen if the Issuer be a corporation, association,
trust, or other entity; of all partners, if the issuer be a partnership; and
of the issuer, if the issuer be an individual; and of the promoters in the
case of a business to be formed, or formed within two years prior to
the filing of the registration statement;
(5) the names and addresses of the underwriters;
(6) the names and addresses of all persons, if any, owning of record
or beneficially, if known, more than 10 per centum of any class of stock
of the issuer, or more than 10 per centum in the aggregate of the outstanding stock of the issuer as of a date within 20 days prior to the
filing of the registration statement;
(7) the amount of securities of the issuer held by any person specified
In paragraphs (4), (5), and (6) of this schedule, as of a date within
20 days prior to the filing of the registration statement, and, if possible, as of one year prior thereto, and the amount of the securities,
for which the registration statement is filed, to which such persons
have indicated their intention to subscribe;
(8) the general character of the business actually transacted or to
be transacted by the issuer;
(9) a statement of the capitalization of the issuer, including the
authorized and outstanding amounts of its capital stock and the proportion thereof paid up, the number and classes of shares in which
such capital stock is divided, par value thereof, or if it has no par value,
the stated or assigned value thereof, a description of the respective voting
rights, preferences, conversion and exchange rights, rights to dividends,
profits, or capital of each class, with respect to each other class, including the retirement and liquidation rights or values thereof;
(10) a statement of the securities, if any, covered by options outstanding or to be created in connection with the security to be offered,
together with the names and addresses of all persons, if any, to be
allotted more than 10% in the aggregate of such options;


(11) the amount' of capital stock of each class issued or included
In the shares of stock to be offered;
(12) the amount of the funded debt Outstanding and to be created
by the security to be offered, with a brief description of the date, maturity, and character of such debt, rate of interest, character of amortization provisions, and the security, if any, therefor. If substitution
of any security is permissible, a summarized statement of the conditions under which such substitution is permitted. If substitution
is permissible without notice, a specific statement to that effect;
(13) the specific purposes in detail and the approximate amounts
to be devoted to such purposes, so far as determinable, for which the
security to be offered is to supply funds, and if the funds are to be
raised in part from other sources, the amounts thereof and the sources
thereof, shall be stated;
(14) the remuneration, paid or estimated to be paid, by the issuer
or its predecessor, directly or indirectly, during the past year and ensuing year to (a) the directors or persons performing similar functions,
and (b) its officers and other persons, naming them wherever such
remuneration exceeded $25,000 during any such year;
(15) the estimated net proceeds to be derived from the security
to be offered;
(16) the price at which it is proposed that the security shall be offered to the public or the method by which such price is computed
and any variation therefrom at which any portion of such security is
proposed to be offered to any persons or classes of persons, other than
the underwriters, naming them or specifying the class. A variation
in price may be proposed prior to the date of the public offering of
the security, but the Commission shall immediately be notified of
such variation;
(17) all commissions or discounts paid or to be paid, directly or
indirectly, by the issuer to the underwriters in respect of the sale of the
security to be offered. Commissions shall include all cash, securities,
contracts, or anything else of value, paid, to be set aside, disposed of,
or understandings with or for the benefit of any other persons in which
any underwriter is interested, made, in connection with the sale of
such security. A commission paid or to be paid in connection with
the sale of such security by a person in which the issuer has an interest
or which is controlled or directed by, or under common control with,
the issuer shall be deemed to have been paid by the issuer. Where
any such commission is paid the amount of such commission paid to
each underwriter shall be stated;
(18) the amount or estimated amounts, itemized in reasonable detail,
of expenses, other than commissions specified in paragraph (17) of
this schedule, incurred or borne by or for the account of the issuer
in connection with the sale of the security to be offered or properly
chargeable thereto, including legal, engineering, certification, authentication, and other charges;
(19) the net proceeds derived from any security sold by the issuer
during the two years preceding the filing of the registration statement,
the price at which such security was offered to the public, and the
names of the principal underwriters of such security;
(20) any amount paid within two years preceding the filing of the
registration statement or intended to be paid to any promoter and the
consideration for any such payment;
(21) the names and addresses of the vendors and the purchase price
of any property, or good-will, acquired or to be acquired, not in the
ordinary course of business, which is to be defrayed in whole or in part
from the proceeds of the security to be offered, the amount of any
commission payable to any person in connection with such acquisition,
and the name or names of such person or persons, together with any
expense incurred or to be incurred in connection with such acquiJition,
including the cost of borrowing money to finance such acquisition;
(22) full particulars of the nature and extent of the interest, if any,
of every director, principal executive officer, and of every stockholder
holding more than 10% of any clas.3 of stock or more than 10% in the
aggregate of the stock of the issuer, in any property acquired, not in
the ordinary course of business of the issuer, within two years preceding
the filing of the registration statement or proposed to be acquired at
such date;
(23) the names and addresses of counsel who have passed on the
legality of the issue;
(2.) dates of and parties to, and the general effect concisely stated
of every material contract made, not in the ordinary course of business,
which contract is to be executed in whole or in part at or after the filing
of the registration statement or which contract has been made not
more than two years before such filing. Any management contract
or contract providing for special bonuses or profit-sharing arrangements,
and every material patent or contract for a material patent right, and
every contract by or with a public utility company or an affiliate thereof,
providing for the giving or receiving of technical or financial advice
or service (if such contract may involve a charge to any party thereto
at a rate in excess of $2,500 per year in cash or securities or anything
else of value), shall be deemed a material contract;
(25) a balance sheet as of a date not more than 90 days prior to the
date of the filing of the registration statement showing all of the assets
of the issuer, the nature and cost thereof, whenever determinable, in
such detail and in such form as the Commission shall prescribe (with
intangible items segregated), including any loan in excess of $20,000 to
any officer, director, stockholder or person directly or indirectly controlling or controlled by the issuer, or person under direct or indirect
common control with the issuer. All the liabilities of the issuer in such
detail and such form as the Commission shall prescribe, including surplus
of the issuer showing how and from what sources such surplus was
created, all as of a date not more than 90 days prior to the filing of the
registration statement. If such statement be not certified by an independent public or certified accountant, in addition to the balance sheet
required to be submitted under this schedule, a similar detailed balance
sheet of the assets and liabilities of the issuer, certified by an independent
public or certified accountant, of a date not more than one year prior
to the filing of the registration statement, shall be submitted;
(26) a profit and loss statement of the issuer showing earnings and
income, the nature and source thereof, and the expenses and fixed charges
in such detail and such form as the Commission shall prescribe for the
latest fiscal year for which such statement is available and for the two
preceding fiscal years, year by year, or, if such issuer has been in actual
business for less than three years, then for such time as the issuer has been
in actual business, year by year. If the date of the filing of the registration statement is more than six months after the close of the last fiscal
year, a statement from such closing date to the latest practicable date.
Such statement shall show what the practice of the issuer has been during
the three years or lesser period as to the character of the charges, dividends or other distributions made against its various surplus accounts,
and as to depreciation, depletion, and maintenance charges, in such
detail and form as the Commission shall prescribe, and if stock dividends
or avails from the sale of rights have been credited to income, they shall


Financial Chronicle

be shown separately with a statement of the basis upon which the credit
is computed. Such statement shall also differentiate between any
recurring and non-recurring income and between any investment and
operating income. Such statement shall be certified by an independent
public or certified accountant;
(27) if the proceeds, or any part of the proceeds, of the security to be
issued is to be applied directly or indirectly to the purchase of any business, a profit and loss statement of such business certified by an independent public or certified accountant, meeting the requirements of
paragraph (26) of this schedule, for the three preceding fiscal years,
together with a balance sheet, similarly certified, of such business,
meeting the requirements of paragraph (25) of this schedule of a date
not more than 90 days prior to the filing of the registration statement or
at the date such business was acquired by the issuer if the business was
acquired by the issuer more than 90 days prior to the filing of the registration statement;
(28) a copy of any agreement or agreements (or, if identic agreements
are used, the forms thereof) made with any underwriter, including all
contracts and agreements referred to in paragraph (17) of this schedule;
(29) a copy of the opinion or opinions of counsel in respect to the
legality of the issue, with a translation of such opinion, when necessary,
into the English language;
(30) a copy of all material contracts referred to in paragraph (24) of
this schedule, but no disclosure shall be required of any portion of any
such contract if the Commission determines that disclosure of such
portion would impair the value of the contract and would not be necessary for the protection of the investors;
(31) unless previously filed and registered under the provisions of
this title, and brought up to date, (a) a copy of its articles of incorporation, with all amendments thereof and of its existing by-laws or instrua
ments corresponding thereto, whatever the name, if the issuer be
corporation;(b) copy of all instruments by which the trust is created or
declared, if the issuer is a trust; (c) a copy of its articles of partnership
or association and all other papers pertaining to its organization, if
issuer is a partnership, unincorporated association, joint-stock company,
or any other form of organization; and
(32) a copy of the underlying agreements or indentures affecting any
stock, bonds, or debentures offered or to be offered.
In case of certificates of deposit, voting trust certificates, collateral
trust certificates, certificates of interest or shares in unincorporated
Investment trusts, equipment trust certificates, interim or other receipts
for certificates, and like securities, the Commission shall establish rules
and regulations requiring the submission of information of a like character
applicable to such cases, together with such other information as it may
deem appropriate and necessary regarding the character, financial or
otherwise, of the actual issuer of the securities and/or the person performing the acts and assuming the duties of depositor or manager.
Schedule B.
(1) Name of borrowing government or subdivision thereof;
(2) specific purposes in detail and the approximate amounts to be
devoted to such purposes, so far as determinable, for which the security
to be offered is to supply funds, and if the funds are to be raised in part
from other sources, the amounts thereof and the sources thereof, shall
be stated;
(3) the amount of the funded debt and the estimated amount of the
floating debt outstanding and to be created by the security to be offered,
excluding inter-governmental debt, and a brief description of the date,
maturity, character of such debt, rate of interest, character of amortization provisions, and the security, if any therefor. If substitution of
any security is permissible, a statement of the conditions under which
such substitution is permitted. If substitution is permissible without
notice, a specific statement to that effect;
(4) whether or not the issuer or its predecessor has, within a period of
20 years prior to the filing of the registration statement, defaulted on
the principal or interest of any external security, excluding inter-governmental debt, and, if so, the date, amount, and circumstances of such
default, and the terms of the succeeding arrangement, if any;
(5) the receipts, classified by source, and the expenditures, classified by purpose, in such detail and form as the Commission shall prescribe for the latest fiscal year for which such information is available
and the two preceding fiscal years, year by year;
(6) the names and addresses of the underwriters;
(7) the name and address of its authorized agent, if any, in the United
(8) the estimated net proceeds to be derived from the sale in the
United States of the security to be offered;
(9) the price at which it is proposed that the security shall be offered
In the United States to the public or the method by which such price
is computed. A variation in price may be proposed prior to the date
of the public offering of the security, but the Commission shall immediately be notified of such variation;
(10) all commissions paid or to be paid, directly or indirectly, by
the issuer to the underwriters in respect of the sale of the security to
be offered. Commissions shall include all cash, securities, contracts,
or anything else of value, paid, to be set aside, disposed of, or understandings with or for the benefit of any other persons in which the
underwriter is interested, made, in connection with the sale of such
security. Where any such commission is paid, the amount of such
commission paid to each underwriter shall be stated;
(11) the amount or estimated amounts, itemized in reasonable detail, of expenses, other than the commissions specified in paragraph
(10) of this schedule, incurred or borne by or for the account of the
issuer in connection with the sale of the security to be offered or properly
chargeable thereto, including legal, engineering, certification, and
other charges;
(12) the names and addresses of counsel who have passed upon the
legality of the issue;
(13) a copy of any agreement or agreements made with any underwriter governing the sale of the security within the United States; and
(14) an agreement of the issuer to furnish a copy of the opinion
or opinions of counsel in respect to the legality of the issue, with a
translation, where necessary, into the English language. Such opinion
shall set out in full all laws, decrees, ordinances, or other acts of Government under which the issue of such security has been authorized.
Sec. 201. For the purpose of protecting, conserving, and advancing
the interests of the holders of foreign securities in default, there is hereby
created a body corporate with the name' Corporation of Foreign Security
Holders" (herein called the "Corporation"). The principal office of
the Corporation shall be located in the District of Columbia, but there
may be established agencies or branch offices in any city or cities of
the United States under rules and regulations prescribed by the board
of directors.

June 3 1933

Sec. 202. The control and management of the Corporation shall
be vested in a board of six directors, who shall be appointed and hold
office in the following manner: As soon as practicable after the date
this Act takes effect the Federal Trade Commission (hereinafter in this
title called "Commission") shall appoint six directors, and shall designate a chairman and a vice-chairman from among their number. After
the directors designated as chairman and vice-chairman cease to be directors, their successors as chairman and vice-chairman shall be elected by
the board of directors itself. Of the directors first appointed, two
shall continue in office for a term of two years, two for a term of four
years, and two for a term of six years, from the date this Act takes
effect, the term of each to be designated by the Commission at the
time of appointment. Their successors shall be appointed by the Commission, each for a term of six years from the date of the expiration of
the term for which his predecessor was appointed, except that any person
appointed to fill a vacancy occuring prior to the expiration of the term
for which his predecessor was appointed shall be appointed only for
the unexpired term of such predecessor. No person shall be eligible
to serve as a director who within the five years preceding has had any
interest, direct or indirect, in any corporation, company, partnership,
bank or association which has sold, or offered for sale any foreign securities. The office of a director shall be vacated if the board of directors shall at a meeting specially convened for that purpose by resolution
passed by a majority of at least two-thirds of the board of directors,
remove such member from office, provided that the member whom
it is proposed to remove shall have seven days' notice sent to him of
such meeting and that he may be heard.
Sec. 203. The Corporation shall have power to adopt, alter, and
use a corporate seal; to make contracts; to lease such real estate as
may be necessary for the transaction of its business; to sue and be sued,
to complain and to defend, in any court of competent jurisdiction,
State or Federal; to require from trustees, financial agents, or dealers
in foreign securities information relative to the original or present
holders of foreign securities and such other information as may be
required and to issue subpoenas therefor; to take over the functions of
any fiscal and paying agents of any foreign securities In default; to
borrow money for the purposes of this title, and to pledge as collateral
for such loans any securities deposited with the Corporation pursuant
to this title; by and with the consent and approval of the Commission
to select, employ, and fix the compensation of officers, directors, members of committees, employees, attorneys, and agents of the Corporation.
without regard to the provisions of other laws applicable to the employment and compensation of officers or employees of the United
States; to define their authority and duties, require bonds of them and
fix the penalties thereof, and to dismiss at pleasure such officers, employees, attorneys, and agents; and to prescribe, amend, and repeal by
Its board of directors, by-laws, rules, and regulations governing the
manner in which its general business may be conducted and the powers
granted to it by law may be exercised and enjoyed, togetner with provisions for such committees and the functions thereof as the board of
directors may deem necessary for facilitating its business under this
title. The board of directors of the Corporation shall determine and
prescribe the manner in which its obligations shall be incurred and its
expenses allowed and paid.
Sec. 204. The board of directors may—
(1) Convene meetings of holders of foreign securities.
(2) Invite the deposit and undertake the custody of foreign securities
which have defaulted in the payment either of principal or interest, and
issue receipts or certificates in the place of securities so deposited.
(3) Appoint committees from the directors of the Corporation and /or
all other persons to represent holders of any class or classes of foreign
securities which have defaulted in the payment either of principal or
Interest and determine and regulate the functions of such committees.
The chairman and vice-chairman of the board of directors shall be exofficio chairman and vice-chairman of each committee.
(4) Negotiate and carry out, or assist in negotiating and carrying out,
arrangements for the resumption of payments due or in arrears in respect
of any foreign securities in defauli or for rearranging the terms on which
such securities may in future be held or for converting and exchanging
the same for new securities or for any other object in relation thereto;
and under this paragraph any plan or agreement made with respect to
such securities shall be binding upon depositors, providing that the
consent of holders resident in the United States of 60 per centum of the
securities deposited with the corporation shall be obtained.
(5) Undertake, superintend, or take part in the collection and application of funds derived from foreign securities which come into the possession of or under the control or management of the corporation.
(6) Collect, preserve, publish, circulate, and render available in
readily accessible form, when deemed essential or necessary, documents,
statistics, reports, and information of all kinds in respect of foreign
securities, including particularly records of foreign external securities in
default and records of the progress made toward the payment of pastdue obligations.
(7) Take such steps as it may deem expedient with the view of securing
the adoption of clear and simple forms of foreign securities and just and
sound principles in the conditions and terms thereof.
(8) Generally, act in the name and on behalf of the holders of foreign
securities the care or representation of whose interests may be entrusted
to the corporation; conserve and protect the rights and interests of
holders of foreign securities issued, sold, or owned in the United States;
adopt measures for the protection, vindication, and preservation or
reservation of the rights and interests of holders of foreign securities
either on any default in or on breach or contemplated breach of the
conditions on which such foreign securities may have been issued, or
otherwise; obtain for such holders such legal and other assistance and
advice as the board of directors may deem expedient; and do all such
other things as are incident or,conducive to the attainment of the above
Sec. 205. The board of directors shall cause accounts to be kept of all
matters relating to or connected with the transactions and business of
the corporation, and cause a general account and balance sheet of the
corporation to be made out in each year, and cause all accounts to be
audited by one or more auditors who shall examine the same and report
thereon to the board of directors.
Sec. 206. The Corporation shall make, print, and make public an
annual report of its operations during each year, send a copy thereof,
together with a copy of the account and balance sheet and auditor's
report, to the Commission and to both Houses of Congress, and provide
one copy of such report but not more than one on the application of any
person and on receipt of a sum not exceeding $1; Provided, That the
board of directors in its discretion may distribute copies gratuitously.
Sec. 207. The Corporation may in Its discretion levy charges, assessed
on a pro rata basis, on the holders of foreign securities deposited with it:
Provided, That any charge levied at the time of depositing securities with
the Corporation shall not exceed one-fifth of 1 per centum of the face

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Volume 136

value of such securities: Provided further, That any additional charges
shall bear a close relationship to the cost of operations and negotiations
including those enumerated in Sections 203 and 204 and shall not exceed
1 per centum of the face value of such securities.
Sec. 208. The Corporation may receive subscriptions from any person,
foundation with a public purpose,or agency of the United States Government, and such subscriptions may, in the discretion of the board of
directors, be treated as loans repayable when and as the board of directors
shall determine.
Sec. 209. The Reconstruction Finance Corporation is hereby authorized to loan out of its funds not to exceed $75,000 for the use of the
Sec. 210. Notwithstanding the foregoing provisions of this title, it
shall be unlawful for, and nothing in this title shall be taken or construed
as permitting or authorizing, the Corporation in this title created, or
any committee of said Corporation,or any person or persons acting for or
representing or purporting to represent it—
(a) to claim or assert or pretend to be acting for or to represent the
Department of State or the United States Government:


(b) to make any statements or representations of any kind to any
foreign government or its officials or the officials of any political subdivision of any foreign government that said Corporation or any committee thereof or any individual or individuals connected therewith were
speaking or acting for the said Department of State or the United States
Government; or
(c) to do any act directly or indirectly which would interfere with or
obstruct or hinder or which might be calculated to obstruct, hinder or
interfere with the policy or policies of the said Department of State or
the Government of the United States or any pending or contemplated
diplomatic negotiations, arrangements, business or exchanges between
the Government of the United States or said Department of State and
any foreign government or any political subdivision thereof.
Sec. 211. This title shall not take effect until the President finds that
its taking effect is in the public interest and by proclamation so declares.
Sec. 212, This title may be cited as the "Corporation of Foreign
LondholderslAct, 1933."
Approved May 127 1933.

Text of Act Providing for Government Operation of Muscle Shoals and
Creation of Tennessee Valley Authority—Law Also Makes Provision
for Issuance of $50,000,000 in Bonds to Finance Project.
As we indicated in our issue of May 20, page 3462, President Roosevelt's program for the development of the Tennessee Valley, with plans for Government operation of the Musch Shoals power project, received final Congressional approval on May 17, the President affixing his signature to the
new legislhtion on May 18. Noting that the enactment of the
measure brings to a close the 13-year-old controversy over the
disposition of the huge war-time Alabama power and nitrate
plant, the Washington correspondent of the New York
"Journal of Commerce" on May 18 said:
May Name Board.
The new Act authorizes the President to appoint a Board of Three as a
"Tennessee Valley Authority" to manage industrial and agricultural development of the valley, with offices near Muscle Shoals, Ala. It can acquire
real estate and build dams, power houses, reservoirs transmission lines and
navigation projects; unite power installation into one or more transmission
line systems; contract with commercial producers for fertilizer; manufacture experimental fertilizer, manufacture and sell explosives to the Government at cost; produce, sell and distribute power, lease nitrate plant No. 2
for the private manufacture of fertilizer; sell $50,000,000 in 31 50-year
bonds to finance the improvements, and with Presidential approval, complete
plant No. 2, near Muscle Shoals.
dam No. 2 and the steam plant at nitrate
In signing the measure the President caused to be issued a warning to
"innocent investors" against conscienceless wildcat land speculators. He
was represented as being made very happy in carrying to realization the
hope of the great principle which he has long maintained for the development of the Muscle Shoals property and the Tennessee Valley.
The legislation provides for construction of the Cove Creek Dam across
the Clinch River in Tennessee with a transmission power line from Muscle
Under the law 5% of the gross receipts received by the Board from sale
of power generated at Dam No. 2 or any other dam built later in Alabama
Is to go to the State of Alabama. Tennessee is to receive 5% of the gross
proceeds from the Cove Creek development or any other dam in Tennessee.
In putting the vast project into operation the Administration is hopeful
early employment may be given to thousands of men.

From the Washington "Post" of May 19 we quote the following Associated Press advices:
President Roosevelt yesterday made the Muscle Shoals bill law, radiating
pleasure but warning innocent investors against land speculators seeking to
exploit the new program for developing the Tennessee River Valley.
He signed only a few hours after it became known he had initiated a Department of Justice investigation into charges that private utilities which
have leased the Muscle Shoals waterpower in recent years misused and damaged the great hydro-electric plant, which has lain virtually dormant since
its construction by the Government in World War days.
End of Long Struggle.
An enthusiastic group from Congress, including Senator Norris, of Nebraska, and Senators and Representatives from the Shoals area, applauded
vigorously as the President put his name to the law which for a dozen years
they had struggled futilely to enact. Norris said:
"The law marks an epoch in the history of our national life. It is a
monument to the victorious ending of a 12 years' struggle, waged on behalf
of the common people against the combined forces of monopoly and human
The President issued no formal statement on land speculation, but made
sure that his warning be distributed by the press. The land development
program is his own, a dream of model communities, of industry brought to
the country, of land utilized for its best purpose, of new forests growing
where ancient ones have been wiped out, of streams protected against destructive floods, used to their full capacity for navigation and generation
of inexpensive electricity. After experiment here, Mr. Roosevelt hopes to
extend the plan to other parts of the country.

As signed by President Roosevelt on May 18,the text of the
newly-enacted laws follows:
[H. R.5081.]
To improve the navigability and to provide for the flood control of the
Tennessee River; to provide for reforestation and the proper use of marginal lands in the Tennessee Valley; to provide for the agricultural and industrial development of said valley; to provide for the national defense by
the creation of a corporation for the operation of Government properties
at and near Muscle Shoals in the State of Alabama, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, That for the purpose of maintaining end operating the properties now owned by the United States in the

vicinity of Muscle Shoals, Alabama, in the interest of the national defense
and for the agricultural and industrial development, and to improve navigation in the Tennessee River and to control the destructive flood waters in the
Tennessee River and Mississippi River Basins, there is hereby created a body
corporate by the name of the "Tennessee Valley Authority" (hereinafter
referred to as the "Corporation"). The Board of Directors first appointed
shall be deemed the incorporators, and the incorporation shall be held to
have been effected from the date of the first meeting of the Board. This
Act may be cited as the "Tennessee Valley Authority Act of 1933."
Sec. 2. (a) The Board of Directors of the Corporation (hereinafter referred to as the "Board") shall be composed of three members, to be appointed by the President, by and with the advice and consent of the Senate.
In appointing the members of the Board, the President shall designate the
Chairman. All other officials, agents, and employees shall be designated and
selected by the Board.
(b) The terms of office of the members first taking office after the
approval of this Act shall expire as designated by the President at the time
of nomination, one at the end of the third year, one at the end of the sixth
year, and one at the end of the ninth year, after the date of approval of
this Act. A successor to a member of the Board shall be appointed in the
same manner as the original members and shall have a term of office expiring nine years from the date of the expiration of the term for which his
predecessor was appointed.
(c) Any member appointed to fill a vacancy in the Board occurring prior
to the expiration of the term for which his predecessor was appointed shall
be appointed for the remainder of such term.
(d) Vacancies in the Board, so long as there shall be two members in
office, shall not impair the powers of the Board to execute the functions
of the Corporation, and two of the members in office shall constitute a
quorum for the transaction of the business of the Board.
(e) Each of the members of the Board shall be a citizen of the United
States, and shall receive a salary at the rate of $10,000 a year, to be paid
by the Corporation as current expenses. Each member of the Board, in
addition to his salary, shall be permitted to occupy as his residence one of
the dwelling houses owned by the Government in the vicinity of Muscle
Shoals, Alabama, the same to be designated by the President, of the United
States. Members of the Board shall be reimbursed by the Corporation for
actual expenses (including traveling and subsistence expenses) incured by
them in the performance of the duties vested in the Board by this Act. No
member of said Board shall, during his continuance in office, be engaged in
any other business, but each member shall devote himself to the work of the
(f) No director shall have financial interest in any public utility corporation engaged in the business of distributing and selling power to the public
nor in any corporation engaged in the manufacture, selling, or distribution
of fixed nitrogen or fertilizer, or any ingredients thereof, nor shall any
member have any interest in any business that may be adversely affected by
the success of the Corporation as a producer of concentrated fertilizers or
as a producer of electric power.
(g) The Board shall direct the exercise of all the powers of the
(h) All members of the Board shall be persons who profess a belief in the
feasibility and wisdom of this Act.
Sec. 3. The Board shall without regard to the provisions of Civil Service
laws applicable to officers and employees of the United States, appoint
such managers, assistant managers, officers, employees, attorneys, and
agents as are necessary for the transaction of its business, fix their compensation, define their duties, require bonds of such of them as the Board
may designate, and provide a system of organization to fix responsibility
and promote efficiency. Any appointee of the Board may be removed in
the discretion of the Board. No regular officer or employee of the Corporation shall receive a salary in excess of that received by the members of
the Board.
All contracts to which the Corporation is a party and which require the
employment of laborers and mechanics in the construction, alteration, maintenance, or repair of buildings, dams, locks, or other projects shall contain
a provision that not less than the prevailing rate of wages for work of a
similar nature prevailing in the vicinity shall be paid to such laborers or
In the event any dispute arises as to what are the prevailing rates of
wages, the question shall be referred to the Secretary of Labor for determination, and his decision shall be final. In the determination of such
prevailing rate or rates, due regard shall be given to those rates which have
been secured through collective agreement by representatives of employers
and employees.
Where such work as is described in the two preceding paragraphs is done
directly by the Corporation the prevailing rate of wages shall be paid in the
same manner as though such work had been let by contract.
Insofar as applicable, the benefits of the Act entitled "An Act to provide
compensation for employees of the United States suffering injuries while in
the performance of their duties, and for other purposes," approved Sept. 7
1916, as amended, shall extend to persons given employment under the provisions of this Act.


Financial Chronicle

Sec. 4. Except as otherwise specifically provided in this Act, the
(a) Shall have succession in its corporate name.
(b) May sue and be sued in its corporate name.
(c) May adopt and use a corporate seal, which shall be judicially noticed.
(d) May make contracts, as herein authorized.
(e) May adopt, amend. and repeal by-laws.
(f) May purchase or lease and hold such real and personal property as it
deems necessary or convenient in the transaction of its business, and may
dispose of any such personal property held by it.
The Board shall select a Treasurer and as many Assistant Treasurers as
it deems proper, which Treasurer and Assistant Treasurers shall give such
bonds for the safe-keeping of the securities and moneys of the said Corporation as the Board may require: Provided, That any member of said
Board may be removed from office at any time by a concurrent resolution
of the Senate and the House of Representatives.
(g) Shall have such powers as may be necessary or appropriate for the
exercise of the powers herein specifically conferred upon the Corporation.
(h) Shall have power in the name of the United States of America to
exercise the right of eminent domain, and in the purchase of any real estate
or the acquisition of real estate by condemnation proceedings, the title to
such real estate shall be taken in the name of the United States of America,
and thereupon all such real estate shall be entrusted to the Corporation as
the agent of the United States to accomplish the purposes of this Act.
(i) Shall have power to acquire real estate for the construction of dams,
reservoirs, transmission lines, power houses. and other structures, and navigation projects at any point along the Tennessee River, or any of its tributaries, and in the event that the owner or owners of such property shall fail
and refuse to sell to the Corporation at a price deemed fair and reasonable
by the Board, then the Corporation may proceed to exercise the right of
eminent domain, and to condemn all property that it deems necessary for
carrying out the purposes of this Act, and all such condemnation proceedings
shall be had pursuant to the provisions and requirements hereinafter specified, with reference to any and all condemnation proceedings.
(j) Shall have power to construct dams, reservoirs, power houses. power
structures, transmission lines, navigation projects, and incidental works in
the Tennessee River and its tributaries, and to unite the various power installations into one or more systems by transmission lines.
Sec. 5. The Board is hereby authorized—
(a) To contract with commercial producers for the production of such
fertilizers or fertilizer materials as may be needed in the Government's program of development and introduction in excess of that produced by Government plants. Such contracts may provide either for outright purchase
of materials by the Board or only for the payment of carrying charges on
special materials manufactured at the Board's request for its program.
(b) To arrange with farmers and farm organizations for large-scale practical use of the new forms of fertilizers under conditions permitting an accurate measure of the economic return they produce.
(c) To co-operate with National, State, district, or county experimental
stations or demonstration farms, for the use of new forms of fertilizer or
fertilizer practices during the initial or experimental period of their introduction.
(d) The Board, in order to improve and cheapen the production of fertilizer, is authorized to manufacture and sell fixed nitrogen, fertilizer, and
fertilizer ingredients at Muscle Shoals by the employment of existing facilities, by modernizing existing plants, or by any other process or processes
that in its judgment shall appear wise and profitable for the fixation of
atmospheric nitrogen or the cheapening of the production of fertilizer.
(e) Under the authority of this Act the Board may make donations or
sales of the product of the plant or plants operated by it to be fairly and
equitably distributed through the agency of country demonstration agents,
agricultural colleges, or otherwise as the Board may direct, for experimentation, education, and introduction of the use of such products in co-operation
with practical farmers so as to obtain information as to the value, effect,
and best methods of their use.
(f) The Board is authorized to make alterations, modifications, or improvements in existing plants and facilities, and to construct new plants.
(g) In the event it is not used for the fixation of nitrogen for agricultural
purposes or leased, then the Board shall maintain in stand-by condition
nitrate plant numbered 2, or its equivalent, for the fixation of atmospheric
nitrogen, for the production of explosives in the event of war or a national
emergency, until the Congress shall by joint resolution release the Board
from its obligation, and if any part thereof be used by the Board for the
manufacture of phosphoric acid or potash. the balance of nitrate plant
numbered 2 shall be kept in stand-by condition.
(h) To establish, maintain, and operate laboratories and experimental
plants, and to undertake experiments for the purpose of enabling the Corporation to furnish nitrogen products for military purposes, and nitrogen and
other fertilizer products for agricultural purposes in the most economical
manner and at the highest standard of efficiency.
(1) To request the assistance and advice of any officer, agent, or employee of any executive department or of any independent office of the
United States, to enable the Corporation the better to carry out its powers
successfully, and as far as practicable shall utilize the services of such
officers, agents, and employees. and the President shall, if in his opinion,
the public interest, service, or economy so require, direct that such assistance, advice, and service be rendered to the Corporation, and any individual
that may be by the President directed to render such assistance, advice, and
service shall be thereafter subject to the orders, rules, and regulations of
the Board; Provided, That any invention or discovery made by virtue of and
incidental to such service by an employee of the Government of the United
States serving under this section, or by any employee of the Corporation,
together with any patents which may be granted thereon, shall be the sole
and exclusive property of the Corporation, which is hereby authorized to
grant such licenses thereunder as shall be authorized by the Board: Provided further, That the Board may pay to such inventor such sum from the
income from sale of licenses as it may deem proper.
(j) Upon the requisition of the Secretary of War or the Secretary of the
Navy to manufacture for and sell at cost to the United States explosives or
their nitrogenous content.
(k) Upon the requisition of the Secretary of War the Corporation shall
allot and deliver without charge to the War Department so much power as
shall be necessary in the judgment of said Department for use in operation
of all locks, lifts, or other facilities in aid of navigation.
(1) To produce, distribute, and sell electric power, as herein particularly
(m) No products of the Corporation shall be sold for use outside of the
United States, its Territories and possessions, except to the United States
frovernment for the use edits Army and Navy, or to its allies in case of war.

June 3 1933

(n) The President is authorized, within 12 months after the passage of
this Act, to lease to any responsible farm organization or to any corporation organized by it nitrate plant numbered 2 and Waco Quarry, together
with the railroad connecting said quarry with nitrate plant numbered 2,
for a term not exceeding 50 years at a rental of not less than $1 per year,
but such authority shall be subject to the express condition that the lessee
shall use said property during the term of said lease exclusively for the
manufacture of fertilizer and fertilizer ingredients to be used only in the
manufacture of fertilizer by said lessee and sold for use as fertilizer. The
said lessee shall covenant to keep said property in first-class condition, but
the lessee shall be authorized to modernize said plant numbered 2 •by the
installation of such machinery as may be necessary, and is authorized to
amortize the cost of said machinery and improvements over the term of said
lease or any part thereof. Said lease shall also provide that the Board shall
sell to the lessee power for the operation of said plant at the same schedule
of prices that it charges all other customers for power of the same class and
quantity. Said lease shall also provide that, if the said lessee does not
desire to buy power of the publicly owned plant, it shall have the right to
purchase its power for the operation of said plant of the Alabama Power Co.
or any other publicly or privately owned corporation engaged in the generation and sale of electric power, and in such case the lease shall provide
further that the said lessee shall have a free right of way to build a transmission line over Government property to said plant paying the actual
expenses and damages, if any, incurred by the Corporation on account of
such line. Said lease shall also provide that the said lessee shall covenant
that during the term of said lease the said lessee shall not enter into any
illegal monopoly, combination, or trust with any privately owned corporation engaged in the manufacture, production, and sale of fertilizer with the
object or effect of increasing the price of fertilizer to the farmer.
Sec. 6. In the appointment of officials and the selection of employees for
said Corporation. and in the promotion of any such employees or officials,
no political test or qualification shall be permitted or given consideration,
but all such appointments and promotions shall be given and made on the
basis of merit and efficiency. Any member of said Board who is found by
the President of the United States to be guilty of a violation of this section
shall be removed from office by the President of the United States, and any
appointee of said Board who is found by the Board to be guilty of a violation
of this section shall be removed from office by said Board.
Sec. 7. In order to enable the Corporation to exercise the powers and
duties vested in it by this Act—
(a) The exclusive use, possession, and control of the United States nitrate
plants numbered 1 and 2, including steam plants, located, respectively, at
Sheffield, Alabama, and Muscle Shoals Alabama, together with all real
estate and buildings connected therewith, all tools and machinery, equipment, accessories, and materials belonging thereto, and all laboratories and
plants used as auxiliaries thereto; the fixed-nitrogen research laboratory,
the Waco limestone quarry, in Alabama, and Dam Numbered 2 located at
-electric and operating appur.
Muscle Shoals, its power house, and all hydro
tenances (except the locks), and all machinery, lands, and buildings in connection therewith, and all appurtenances thereof, and all other property to
be acquired by the Corporation in its own name or in the name of the
United States of America, are hereby intrusted to the Corporation for the
purposes of this Act.
(b) The President of the United States is authorized to provide for the
transfer to the Corporation of the use possession, and control of such other
real or personal property of the United 'States as he may from time to time
deem necessary and proper for the purposes of the Corporation as herein
Sec. 8. (a) The Corporation shall maintain its principal office in the
immediate vicinity of Muscle Shoals, Alabama. The Corporation shall be
held to be an inhabitant and resident of the northern judicial district of
Alabama within the meaning of the laws of the United States relating to
the venue of civil suits.
(b) The Corporation shall at all times maintain complete and accurate
books of accounts.
(c) Each member of the Board, before entering upon the duties of his
office, shall subscribe to an oath (or affirmation) to support the Constitution of the United States and to faithfully and impartially perform the
duties imposed upon him by this Act.
Sec. 9. (a) The Board shall file with the President and with the Congress, in December of each year, a financial statement and a complete report
as to the business of the Corporation covering the preceding governmental
fiscal year. This report shall include an itemized statement of the cost of
power at each power station, the total number of employees, and the names,
salaries, and duties of those receiving compensation at the rate of more than
$1,500 a year.
(b) The Comptroller-General of the United States shall audit the transactions of the Corporation at such times as he shall determine. but not less
frequently than once each governmental fiscal year, with personnel of his
selection. In such connection he and his representatives shall have free and
open access to all papers, books, records, files, accounts, plants, warehouses,
offices, and all other things, property and places belonging to or under the
control of or used or employed by the Corporation and shall be afforded full
facilities for counting all cash and verifying transaetiona with and balances
in depositaries. He shall make report of each such audit in quadruplicate,
one copy for the President of the United States, one for the Chairman of the
Board, one for public inspection at the principal office of the Corporation,
and the other to be retained by him for the uses of the Congress. The
expenses for each such audit may be paid from moneys advanced therefor by
the Corporation, or from any appropriation or appropriations for the General
Accounting Office, and appropriations so used shall be reimbursed promptly
by the Corporation as billed by the Comptroller-General. All such audit
expenses shall be charged to operating expenses of the Corporation. The
Comptroller-General shall make special report to the President of the United
States and to the Congress of any transaction or condition found by him to
be in conflict with the powers or duties intrusted by the Corporation by law.
See. 10. The Board is hereby empowered and authorized to sell the surplus
power not used in its operations, and for operation of locks and other Works
generated by it, to States, countries, municipalities, corporations, partnerships, or individuals, according to the policies hereinafter set forth; and to
carry out said authority, the Board is authorized to enter into contracts for
such ode for a term not exceeding 20 years, and in the sale of such current
by the Board it shall give preference to States, counties, municipalities, and
co-operative organizations of citizens or farmers, not organized or doing
business for profit, but primarily for the purpose of supplying electricity to
Its own citizens or members: Provided, That all contracts made with
private companies or individuals for the sale of power, which power is to be
resold for a profit, shall contain a provision authorizing the Board to cancel
said contract upon five years' notice in writing, if the Board needs said
power to supply the demands of States, counties, or municipalities. In order

Volume 136

Financial Chronicle

to promote and encourage the fullest possible use of electric light and power
on farms within reasonable distance of any of its transmission lines the
Board in its discretion shall have power to construct transmission lines to
farms and small villages that are not otherwise supplied with electricity at
reasonable rates, and to make such rules and regulations governing such sale
and distribution of such electric power as in its judgment may be just and
equitable: Provided further, That the Board is hereby authorized and
directed to make studies, experiments. and determinations to promote the
wider and better use of electric power for agricultural and domestic use, or
for small or local industries, and it may co-operate with State governments,
or their subdivisions or agencies, with educational or research institutions,
and with co-operatives or other organizations, in the application of electric
power to the fuller and better balanced development of the resources of
the region.
Sec. 11. It is hereby declared to be the policy of the Government, so far
as practical, to distribute and sell the surplus power generated at Muscle
Shoals equitably among the States, counties and municipalities within transmission distance. This policy is further 'declared to be that the projects
herein provided for shall be considered primarily as for the benefit of the
people of the section as a whole and particularly the domestic and rural
consumers to whom the power can economically be made available, and,
accordingly, that sale to and use by industry shall be a secondary purpose,
to be utilized principally to secure a sufficiently high load factor and revenue
returns which will permit domestic and rural use at the lowest possible rates
and in such manner as to encourage increased domestic and rural use of
electricity. It is further hereby declared to be the policy of the Government
to utilize the Muscle Shoals properties so far as may be necessary to improve, increase, and cheapen the production of fertilizer and fertilizer ingredients by carrying out the provisions of this Act.
Sec. 12. In order to place the Board upon a fair basis for making such
contracts and for receiving bids for the sale of such power, it is hereby
expressly authorized, either from appropriations made by Congress or from
funds secured from the sale of such power, or from funds secured by the sale
of bonds hereafter provided for to construct, lease, purchase, or authorize the
construction of transmission lines within transmission distance from the
place where generated, and to interconnect with other systems. The Board
Is also authorized to lease to any person, persons, or corporation the use of
any transmission line owned by the Government and operated by the Board,
but no such lease shall be made that in any way interferes with the use of
such transmission line by the Board: Provided, That if any State, county,
municipality, or other public or co-operative organization of citizens or
farmers, not organized or doing business for profit, but primarily for the
purpose of supplying electricity to its owe citizens or members, or any
two or more of such municipalities or organizations, shall construct or agree
to construct and maintain a property designed and built transmission line
to the Government reservation upon which is located a Government generating plant, or to a main transmission line owned by the Government or leased
by the Board and under the control of the Board, the Board is hereby authorized and directed to contract with such State, county, municipality, or other
organization, or two or more of them, for the sale of electricity for a term
not exceeding 30 years; and in any such case the Board shall give to such
State, county, municipality or other organization ample time to fully comply with any local law nor:' in existence or hereafter enacted providing for
the necessary legal authority for such State, county, municipality, or other
organization to contract with the Board for such power: Provided further,
That all contracts entered into between the Corporation and any municipality or other political subdivision or co-operative organization shall provide that the electric power shall be sold and distributed to the ultimate
consumer without discrimination as between consumers of the same class,
and such contract shall be voidable at the election of the Board if a discriminatory rate, rebate, or other special concession is made or given to any
consumer or user by the municipality or other political subdivision or cooperative organization: And provided further, That as to any surplus power
not so sold as above provided to States, counties, municipalities, or other said
organizations, before the Board shall sell the same to any person or corporation engaged in the distribution and resale of electricity for profit, It shall
require said person or corporation to agree that any resale of such electric
power by said person or corporation shall be made to the ultimate consumer
of such electric power at prices that shall not exceed a schedule fixed by
the Board from time to time as reasonable, just, and fair; and in case Of
any such sale, if an amount is charged the ultimate consumer which is in
excess of the price so deemed to be just, reasonable, and fair by the Board,
the contract for such sale between the Board and such distributor of electricity shall be voidable at the election of the Board: And provided further,
That the Board is hereby authorized to enter into contracts with other
power systems for the mutual exchange of unused excess power upon suitable
terms, for the conservation of stored water, and as an emergency or breakdown relief.
Sec. 13. Five per centum of the gross proceeds received by the Board for
the sale of power generated at Dam Numbered 2, or from any other hydropower plant hereafter constructed in the State of Alabama, shall be paid
to the State of Alabama; and 5 per centum of the gross proceeds from the
sale of power generated at Cove Creek Dam, hereinafter provided for, or any
other dam located in the State of Tennessee, shall be paid to the State of
Tennessee. Upon the completion of said Cove Creek Dam the Board shall
ascertain how much additional power is thereby generated at Dam Numbered 2 and at any other dam hereafter constructed by the Government of
the United States on the Tennessee River, in the State of Alabama, or in the
State of Tennessee, and from the gross proceeds of the sale of such additional
power 2% per centurn shall be paid to the States of Alabama and 2% per
centum to the State of Tennsseee. These percentages shall apply to any
other dam that may hereafter be constructed and controlled and operated
by the Board on the Tennessee River or any of its tributaries, the main
purpose of which is to control flood waters and where the development of
electric power is incidental to the operation of such flood-control dam. In
ascertaining the gross proceeds from the sale of such power upon which a
percentage is paid to the States of Alabama and Tennessee the Board shall
not take into consideration the proceeds of any power sold or delivered to
the Government of the United States, or any department or agency of the
Government of the United States, used in the operation of any locks on the
Tennessee River or for any experimental purpose, or for the manufacture of
fertilizer or any of the ingredients thereof, or for any other governmental purpose: Provided, That the percentages to be paid to the States of Alabama
and Tennessee, as provided in this section, shall be subject to revision and
change by the Board, and any new percentages established by the Board, when
approved by the President shall remain in effect until and unless again
changed by the Board win), the approval of the President. No change of
said percentages shall be made more often than once in five years, and no
made without giving to the States of Alabama and Tennessee
change shall be
an opportunity to be heard.


Sec. 14. The Board shall make a thorough investigation as to the
value of Dam Numbered 2, and the steam plants at nitrate plant numbered
Dam, for
and nitrate plant numbered 2, and as to the cost of Cove Creek
properthe purpose of ascertaining how much of the value or the cost of said
ties shall be allocated and charged up to (1) flood control, (2)
(3) fertilizer, (4) national defense, and (5) the development of power.
findings thus made by the Board, when approved by the President of
thereafter be used in
United States, shall be final, and such findings shall
of said
all allocation of value for the purpose of keeping the book value
properties. In like manner, the cost and book value of any dams,
plants, or other similar improvements hereafter constructed and
shall be
over to said Board for the purpose of control and management
ascertained and allocated.
plant, or other
Sec. 15. In the construction of any future dam, steam
facility, to be used in whole or in part for the generation or
empowered to issue on
of electric power, the Board is hereby authorized and
not exceeding $50,the credit of the United States and to sell serial bonds
from the date
000,000 in amount, having a maturity not more than 50 years
per centam per
of issue thereof, and bearing interest not exceeding 3%
prices approved
annum. Said bonds shall be issued and sold in amounts and
as may be so issued and
by the Secretary of the Treasury, but all such bonds
sold below par,
sold shall have equal rank. None of said bonds shall be
be paid to any
and no fee, commission, or compensation whatever shall
or selling the
person, firm, or corporation for handling, negotiating the sale,
have all the rights
said bonds. All of such bonds so issued and sold shall
authorized by
and privileges accorded by law to Panama Canal
by the Act
Section 8 of the Act of June 28 1902, Chapter 1302, as amended
5), as now compiled in Section 743
of Dec. 21 1905 (Ch. 3, Sec. 1, 34 Stat.
from the sale of
of Title 31 of the United States Code. All funds derived
such bonds shall be paid over to the Corporation.
advisable, is hereby
Sec. 16. The Board, whenever the President deems it
Muscle Shoals,
empowered and directed to complete Dam Numbered 2 at
in the vicinity
Alabama, and the stearn plant at nitrate plant numbered 2,
the additional power
of Muscle Shoals, by installing in Dam Numbered 2
and the additional
units according to the plans and specifications of said dam.
power unit in the steam plant at nitrate plant numbered 2.
is hereby
Sec. 17. The Secretary of War, or the Secretary of the Interior,
lowest responauthorized to construct, either directly or by contract to the
Clinch River in
sible bidder, after due advertisement, a dam in and across
become known and desigthe State of Tennessee, which has by long custom
line from Muscle
nated as the Cove Creek Darn, together with a transmission
including power
Shoals, according to the latest and most approved designs,
the generation of
house and hydro-electric installations and equipment for
be impounded
power, in order that the waters of the said Clinch River may
regulating the
and stored above said dam for the purpose of increasing and
that the maxiflow of the Clinch River and the Tennessee River below, so
Numbered 2 and
mum amount of primary power may be developed at Dam
Provided, howat any and all other dams below the said Cove Creek Dam:
order to direct
ever, That the President is hereby authorized by appropriate
of the Interior,
the employment by the Secretary of War, or by the Secretary
such duties
of such engineer or engineers as he may designate, to perform
of plans and
and obligations as he may deem proper, either in the drawing
specifications for said dam, or to perform any other work in the building
construction of the same. The President may, by such order, place
engineer or
control of the construction of said dam in the hands of such
engineers taken from private life as he may desire: And provided
That the President is hereby expressly authorized without regard to the
assistrestriction or limitation of any other statute, to select attorneys and
ants for the purpose of making any investigation he may deem proper to
2, or
ascertain whether, in the control and management of Dam Numbered
any other dam or property owned by the Government in the Tennessee
therein, there has been
Basin, or in the authorization of any improvement
partnerships, or
any undue or unfair advantage given to private persons,
whether in
corporations, by any officials or employees of the Government, or
any such matters the Government has been injured or unjustly deprived
any of its rights.
the SecreSec. 18. In order to enable and empower the Secretary of War,
authority hereby contary of the Interior. or the Board to carry out the
or it is hereby
ferred, in the most economical and efficient manner, he
national defense
authorized and empowered in the exercise of the powers of
the Tennessee
in aid of navigation, and in the control of the flood waters of
e commerce, to
and Mississippi Rivers, constituting channels of inter-Stat
Act, and to
exercise the right of eminent domain for all purposes of this
necessary in
condemn all lands, easements, rights of way, and other area
rights for
order to obtain a site for said Cove Creek Dam, and the flowage
conclude conthe reservoir of water above said dam and to negotiate and
tracts with States, counties, municipalities, and all State agencies and
comrailroads, railroad corporations, common carriers, and all public utility
missions and any other person, firm, or corporation, for the relocation
railroad tracks, highways. highway bridges, mills, ferries, electric-light
plants, and any and all other properties, enterprises, and projects
removal may be necessary in order to carry out the provisions of this Act.
power house shall have
When said Cove Creek Dam, transmission line, and
been completed, the possession, use, and control thereof shall be intrusted
to the Corporation for use and operation in connection with the general Tennessee Valley project, and to promote flood control and navigation in the
Tennessee River.
Sec. 19. The Corporation. as an instrumentality and agency of the Government of the United States for the purpose of executing its constitutional
powers, shall have access to the Patent Office of the United States for the
purpose of studying, ascertaining, and copying all methods, formulae, and
scientific information (not including access to pending applications for
patents) necessary to enable the Corporation to use and employ the most
efficacious and economical process for the production of fixed nitrogen, or
any essential ingredient of fertilizer, or any method of improving and cheapening the production of hydro-electric power, and any owner of a patent
whose patent rights may have been thus in any way copied, used, infringed,
or employed by the exercise of this authority by the Corporation shall have
as the exclusive remedy a cause of action against the Corporation to be
instituted and prosecuted on the equity aide of the appropriate district court
of the United States, for the recovery of reasonable compensation for such
infringement. The Commissioner of Patents shall furnish to the Corporation,
at its request and without payment of fees, copies of documents on file in
his office: Provided, That the benefits of this section shall not apply to
any art, machine, method of manufacture, or composition of matter, discovered or invented by such employee during the time of his employment or
service with the Corporation or with the Government of the United States.
Sec. 20. The Government of the United States hereby reserves the right.
in case of war or national emergency declared by Congress, to take possession
of all or any part of the property described or referred to in this Act for the


Financial Chronicle

purpose of manufacturing explosives or for other war purposes; but, if this
right is exercised by the Government, it shall pay the reasonable and fair
damages that may be suffered by any party whose contract for the purchase of electric power or fixed nitrogen or fertilizer ingredients is
hereby violated, after the amount of the damages has been fixed by the
United States Court of Claims in proceedings instituted and conducted for
that purpose under rules prescribed by the court.
Sec. 21. (a) All general penal statutes relating to the larceny, embezzlement, conversion, or to the improper handling, retention, use, or disposal of
public moneys or property of the United States. shall apply to the moneys
and property of the Corporation and to moneys and properties of the United
States intrusted to the Corporation.
(b) Any person who, with intent to defraud the Corporation, or to deceive
any director, officer, or employee of the Corporation or any officer of employee of the United States (1) makes any false entry in any book of the
Corporation, or (2) makes any false report or statement for the Corporation,
shall, upon conviction thereof, be fined not more than $10,000 or imprisoned not more than five years, or both.
(c) Any person who shall receive any compensation. rebate, or reward, or
shall enter into any conspiracy, collusion, or agreement, express or implied,
with intent to defraud the Corporation or wrongfully and unlawfully to
defeat its purposes, shall, on conviction thereof, be dined not more than $5,000
or imprisoned not more than five years, or both.
Sec. 22. To aid further the proper use, conservation, and development
of the natural resources of the Tennessee River drainage basin and of such
adjoining territory as may be related to or materially affected by the development consequent to this Act, and to provide for the general welfare of
the citizens of said areas, the President is hereby authorized, by such means
or methods as he may deem proper within the limits of appropriations made
therefor by Congress, to make such surveys of and general plans for said
Tennessee basin and adjoining territory as may be useful to the Congress
and to the several States in guiding and controlling the extent, sequence,
and nature of development that may be equitably and economically advanced
through the expenditure of public funds, or through the guidance or control
of public authority, all for the general purpose of fostering an orderly and
proper physical, economic, and social development of said areas; and the
President is further authorized in making said surveys and plans to cooperate with the States affected thereby, or subdivisions or agencies of such
States, or with co-operative or other organizations, and to make such studies,
experiments, or demonstrations as may be necessary and suitable to that end.
Sec. 23. The President shall, from time to time, as the work provided for
in the preceding section progresses, recommend to Congress such legislation
as he deems proper to carry out the general purposes stated in said section,
and for the especial purpose of bringing about in said Tennessee drainage
basin and adjoining territory in conformity with said general purposes (1)
the maximum amount of flood control; (2) the maximum development of
said Tennessee River for navigation purposes; (3) the maximum generation
of electric power consistent with flood control and navigation; (4) the proper
use of marginal lands; (5) the proper method of reforestation of all lands
in said drainage basin suitable for reforestation; and (6) the economic and
social well-being of the people living in said river basin.
Sec. 24. For the purpose of securing any rights of flowage, or obtaining
title to or possession of any property, real or personal, that may be necessary
or may become necessary, in the carrying out of any of the provisions of this
Act, the President of the United States for a period of three years from the
date of the enactment of this Act, is hereby authorized to acquire title in the
name of the United States to such rights or such property, and to provide
for the payment for same by directing the Board to contract to deliver
power generated at any of the plants now owned or hereafter owned or constructed by the Government or by said Corporation, such future delivery
of power to continue for a period not exceeding 30 years. Likewise, for one
year after the enactment of this Act, the President is further authorized to
sell or lease any parcel or part of any vacant real estate now owned by the
Government in said Tennessee River Resin, to persons, firms, or corporations
who shall contract to erect thereon factories or manufacturing establishments, and who shall contract to purchase of said Corporation electric power
for the operation of any such factory or manufacturing establishment. No
contract shall be made by the President for the sale of any such real estate
as may be necessary for present or future use on the part of the Government
for any of the purposes of this Act. Any such contract made by the President of the United States shall be carried out by the Board: Provided,
That no such contract shall be made that will in any way abridge or take
away the preference right to purchase power given in this Act to States,
counties, municipalities, or farm organizations: Provided further, That no
lease shall be for a term to exceed 50 years: Provided further, That any
sale shall be on condition that said land shall be used for indratrial purposes only.
Sec. 25. The Corporation may cause proceedings to be instituted for the
acquisition by condemnation of any lands, easements, or rights of way which,
In the opinion of the Corporation, are necessary to carry out the provisions
of this Act. The proceedings shall be instituted in the United States district
court for the district in which the land, easement, right of way, or other
Interest, or any part thereof, is located, and such court shall have full
jurisdiction to divest the complete title to the property sought to be acquired
out of all persona or claimants and vest the same In the United States in fee
simple, and to enter a decree quieting the title thereto in the United States
of America.
Upon the filing of a petition for condemnation and for the purpose of
ascertaining the value of the property to be acquired, and assessing the compensation to be paid, the court shall appoint three commissioners who shall
be disinterested persons and who shall take and subscribe an oath that they
do not own any lands, or interest or easement in any lands, which it may be
desirable for the United States to acquire in the furtherance of said project,
and such commissioners shall not be selected from the locality wherein the
land sought to be condemned lies. Such commissioners shall receive a per
diem of not to exceed $15 for their services, together with an additional
amount of $5 per day for subsistence for time actually spent in performing
their duties as commissioners.
It shall be the duty of such commissioners to examine into the value of
the lands sought to be condemned, to conduct hearings and receive evidence,
and generally to take such appropriate steps as may be proper for the
determination of the value of the said lands sought to be condemned, and
for such purpose the commissioners are authorized to administer oaths and
subpoena witnesses, which said witnesses shall receive the same fees as are
provided for witnesses in the Federal courts. The said commissioners shall
thereupon file a report setting forth their conclusions as to the value of the
said property sought to be condemned, making a separate award and valuation in the premises with respect to each separate parcel involved. Upon the
filing of such award in court the clerk of said court shall give notice of the


3 1933

filing of such award to the parties to said proceeding, in manner and form
as directed by the judge of said court.
Either or both parties may file exceptions to the award of said commie.
sioners within 20 days from the date of the filing of said award in court.
Exceptions filed to such award shall be heard before three Federal district
judges unless the parties, in writing, in person, or by their attorneys, stipulate that the exceptions may be beard before a lesser number of judges. On
such hearing such judges shall pass de novo upon the proceedings had before
the commissioners, may view the property, and may take additional evidence.
Upon such hearings the said judges shall file their own award, fixing therein
the value of the property sought to be condemned, regardless of the award
previously made by the said commissioners.
At any time within 30 days from the filing of the decision of the district
judges upon the hearing on exceptions to the award made by the commissioners, either party may appeal from such decision of the said judges to the
circuit court of appeals, and the said circuit court of appeals shall upon
the hearing on said appeal dispose of the same upon the record, without
regard to the awards or findings theretofore made by the commissioners or
the district judges, and such circuit court of appeals shall thereupon fix
the value of the said property sought to be condemned.
Upon acceptance of an award by the owner of any property herein provided to be appropriated, and the payment of the money awarded or upon
the failure of either party to file exceptions to the award of the commissioners within the time specified, or upon the award of the commissioners, and
the payment of the money by the United States pursuant thereto, or the
payment of the money awarded into the registry of the court by the Corporation, the title to said property and the right to the possession thereof shall
pass to the United States, and the United States shall be entitled to a writ
in the same proceeding to dispossess the former owner of said property, and
all lessees, agents, and attorneys of such former owner, and to put the United
States, by its corporate creature and agent, the Corporation, into possession
of said property.
In the event of any property owned in whole or in part by minors, or
insane persons, or incompetent persons, or estates of deceased persons, then
the legal representatives of such minors, insane persons, incompetent persons, or estates shall have power, by and with the consent and approval of
the trial judge in whose court said matter Is for determination, to consent
to or reject the awards of the commissioners herein provided for, and in the
event that there be no legal representatives, or that the legal representatives
for such minors, insane persons, or incompetent persons shall fail or decline
to act, then such trial judge may, upon motion, appoint a guardian ad litem
to act for such minors, insane persons, or incompetent persons, and such
guardian ad litem shall act to tlie full extent and to the same purpose and
effect as his ward could act, if competent, and such guardian ad litem shall
be deemed to have full power and authority to respond, to conduct, or to
maintain any proceeding herein provided for affecting his said ward.
Sec. 26. the net proceeds derived by the Board from the sale of power
and any of the products manufactured by the Corporation, after deducting
the cost of operation, maintenance, depreciation, amortization, and an
amount deemed by the Board as necessary to withhold as operating capital,
or devoted by the Board to new construction, shall be paid into the Treasury
of the United States at the end of each calendar year.
Sec. 27. All appropriations necessary to carry out the provisions of this
Act are hereby authorized.
Sec. 28. That all Acts or parts of Acts in conflict herewith are hereby
repealed, so far as they affect the operations contemplated by this Act.
Sec. 29. The right to alter, amend, or repeal this Act is hereby expressly
declared and reserved, but no such amendment or repeal shall operate to
impair the obligation of any contract made by said Corporation under any
power conferred by this Act.
Sec. 30. The sections of this Act are hereby declared to be separable,
and in the event any one or more sections of this Act be held to be unconstitutions, the same shall not affect the validity of other sections of this Act.
Approved May 18 1933.

Silver Shipments from China to United States
Expected to Continue.
Exports of silver from China to the United States during
the period April 24 to May 3, inclusive, totaled 15,251,457
ounces, valued at $4,869,921, according to a cablegram from
Consul-General Edwin S. Cunningham, Shanghai, made public by the Commerce Department on May 10, at which time
the Department said:
Exports of silver from China became commercially profitable after
April 22 and it is the opinion in Shanghai that exports will continue so
long as the present disparity in the value of silver at New York and Shanghai
maintains unless the prevailing Chinese export duty of 2
/ ad valorem
is correspondingly increased or an embargo on silver shipments is imposed,
according to the Consul-General.
Stocks of silver in Shanghai are estimated at approximately 360,000,000
ounces, according to the cable.

India Exported 34,664,500 Standard Ounces of Silver
During 1932—Imports Amounted to 8,718,900
Under date of May 22, the Department of Commerce at
Washington issued the following:
India exported 34,664,500 standard ounces of silver during 1932 and imported only 8,718,900 standard ounces, according to preliminary reports re-

ceived from India by the Finance Division of the Commerce Department.
Practically all the imports were on private account.
Of the 34,664,500 ounces of exports, the Government shipped 26,107,100
standard ounces, or slightly more than its silver exports during 1931.
During the find two months of 1933 net exports of silver from India
totaled 9,208,000 standard ounces. Imports were only about 948,000 ounces
and gross exports about 10,156,000 ounces, of which Government exports
accounted for 8,727,000.
In contrast to the silver trade India's net gold exports of 9,470,000 tine
ounces during 1932 were entirely on private account. Gross exports were
9,671,200 fine ounces, and imports 201,000 ounces. During the first two
months of 1938 net exports of gold amounted to 1,195,000 fine ounces, all on
private account. (One fine ounce of gold equals approximately $20.67 with
the dollar at par.)

Volume 136

Financial Chronicle




"A Century of Progress" in the Theatre of the World
Postmaster-General) Farley, Representing President
Roosevelt—Chicago's Century of Progress Typical
of CenturyTof Progress of Nation—Says Fate Has
Made Us Central Figure in World-Wide Negotiations.
Speaking as the representative of President Roosevelt at
the opening, on May 27, of Chicago's "Century of Progress,"
Postmaster-General James A. Farley stated that "President
.Roosevelt has delegated to me the honor of representing him
at the opening of this great Exposition." Mr. Farley, according to the Chicago "Tribune," went on to say that "Chicago's
undertaking this stupendous recognition of a century of
progress is no municipal affair, although the city has reason
for its pride in the magnificence of the effort. A Century of
Progress in Chicago is typical of a century of progress of
the nation.
"The development of the little settlement around Fort
Dearborn into the magnificent metropolis now called Chicago
typifies the growth of the nation which 100 years ago consisted of a thin line of States along the Atlantic border, with
projections here and there toward the Western wilderness,
into the most powerful country in the world." In congratulating Chicago, and welcoming its visitors, Mr. Farley felicitated Chicago "on having as directing head of this enterprise
your distinguished townsman, Rufus C. Dawes, under whose
masterly leadership the vision of a world exposition has become.a reality more beautiful than the hopes of those who
conceived it."
Mr. Farley indicated that the real purpose of his presence
was to convey the message of President Roosevelt, which we
are giving elsewhere. From the Chicago "News" we quote
further, as follows, what Postmaster-General Farley had to
say,in part:
"A hundred years ago we had not long emerged from a war which we did
not know whether we had won or not—a war which, though rather slighted
In history, was second in importance to America only to the revolution, for
It confirmed the promise of the struggle through which we had gained our
"Chicago's motto, 'I Win,' might have been the watchword of the whole
United States, for in effect that is the spirit that has made you one of the
great cities of the world as it has lifted your country into eminence among
the nations.
Brings Roosevelt's Regrets.
"So it is fitting that our great President should have a part in your celebration. It is with keen regret that he could not be with you in person. Not
only did he realize the importance of this occasion, but Chicago stands out
In his memory as the greatest triumph of his career thus far. It was here
that his party nominated him for thd Presidency.
"Moreover, there is the tie of friendship with your martyred Mayor. The
most intense moment of our President's career was when he held in his arms
the friend who had stopped the deadly bullet aimed at his own heart. So it
Is that by sentiment, gratitude and by appreciation of the sturdy part this
city has played in the national life that President Roosevelt felt bound
to Chicago and was so reluctant to give up this engagement with you."
Mr. Farley then explained that President Roosevelt was the busiest man
in the world to-day, and the constant pressure to which he is subject involves
the welfare of the country and perhaps of the whole world.
"These are not engagements which can be postponed," he continued.
"Our envoys to the International Economic Conference are about to start
for London. They will be in session with the representatives of every other
great nation seeking methods by which commercial peace may be restored
to a sadly distracted globe, the currencies of which are all at odds, the
balance of which is all upset with each nation striving desperately to help
its own people regardless of the fate of the others, to the further confusion
of the fortunes of all.
United States Is Central Figure.
"Fate has made us the central figure in world-wide negotiations. We are
unique in a disturbed world in our immunity from fears of a military
kind, and for that reason can enter into these international conversations
without anybody suspecting us of hidden purposes or selfish plans. Naturally
the world looks to us for leaderships and must not look in vain.
"Bitter experience has taught us that complete isolation is no longer
possible. Time was when we could look on a war across the seas with
as much detachment as we would a tornado in the Indian Ocean. Now

a major financial earthquake in mid-Europe closes banks in Chicago; our
markets rise and fall with a bumper crop or harvest failure in the Argentine.
The shifting values of foreign exchange rock our own security exchanges.
"In the final analysis each nation must work out its own destiny, but in
the process it must contribute something to the rest. They produce many
things we need; we can supply much they require. The resulting interchange should increase the profits on each side."
Mr. Farley then traced the history of tariff duties, showing how nations
tried, sometimes successfully, to win wealth for. themselves by excluding
the products of less resourceful countries or by levying tribute on importations, until in the end one tariff was answered by another "until the customs
walls have become insurmountable barriers," and trade was left to languish
from the Occident to the Orient.
Significant in World Trade.
"In the face of this paralysis of trade such a gathering as this memorial
to a country's progress is invaluable," said Mr. Farley. "This exposition
we begin to-day may well be as significant a factor in an international trade
revival as the Economic Conference itself if the latter realizes our fondest
"I do not mean to intimate or suggest that the tariff towers will crumble
and the whole world be on a free-trade basis, for a thousand elements preclude this. A certain measure of protection is requisite, for revenue, for
encouraging domestic industries, for maintaining wages and a reasonably
high standard of living. . . . But there must be a temperance in tariffs.
Somewhere between the exorbitant heights and the absolute zero of duties
there must be a workable mean. When that is found the tides of trade will
flow with reasonable freedom to the end that no nation will be swamped
by competition it cannot meet and no nation will be able to profiteer through
tariff exactions."

Message of President Roosevelt to Fair.
Unable to be present at the opening of Chicago's "Century
of Progress" on Saturday, May 27, the felicitations of President Franklin D. Roosevelt nevertheless featured the start
of the mammoth Exposition. The President's message was
delivered at the formal opening ceremony by PostmasterGeneral James A. Farley, the President's representative at
the Fair. His conviction that the Exposition will be "one
of the historic gatherings" was expressed by President
Roosevelt, who also voiced it as his hope that it will mark
"the inauguration of a century of even greater progress—
progress not only along material lines; progress not only of
my own country, but a world uplifting that will culminate
in the greater happiness of mankind."
The President's message follows:
I have already expressed my regrets to President Dawes of the Exposition
at my inability to fulfill my engagement to open the Century of Progress
celebration, which I am sure will be one of the historic gatherings, and
which I hope will be the inauguration of a century of even greater progress—
progress not only along material lines; progress not only of my own country, but a world uplifting that will culminate in the greater happiness of
mankind, and release all peoples from the outworn processes and policies
that have brought about such a commercial and industrial depression as has
plagued every country on the globe.
Certainly the human intelligence that has accomplished the industrial and
cultural results displayed at your Exposition need not fall short of devising
methods that will insure against another perilous approach to collapse such
as that from which we are now emerging. The long and painful story of
the progress of mankind to the development of what we term civilization is
divided into chapters each of which marks the overcoming of a curse on
Slavery, private wars, piracy, brigandage and well-nigh universal tyranny
have in turn been conquered and done away with. Plagues which in past
centuries decimated populations at frequent intervals have been studied and
medicine has triumphed over most of them. Here and there appear, perhaps,
sporadic vestiges of intolerance and cruel despotism, but what a change
from the world conditions in which they were practically universal!
Yet all of these have in their time been deemed the inescapable crosses of
mankind—beyond human power to ameliorate, much less cure. The advance
of science and the evolution of humanity and charity made it known to us
that whatever is the result of human agency is capable of correction by
human intelligence. Who is there of so little faith as to believe that man
Is so limited that he will not find a remedy for the industrial ills that
periodically make the world shiver with doubt and terror?
Every convention of the peoples of the world brings nearer the time of
mutual helpfulness, so I welcome the celebration you are now beginning.
It is timely not only because it marks a century of accomplishment, but it
comes at a time when the world needs nothing so much as a better mutual
understanding of the peoples of the earth.
I congratulate Chicago and its guests and wish the exposition unbounded
success—success as a show but more success in helping to bring about a
binding friendship among the nations of the earth.


Financial Chronicle

June 3 1933

Indications of Business Activity
Friday Night, June 2 1933.
The evidence is voluminous and cumulative that this
country is distinctly on the mend. Trade, in other
words, continues to improve in both wholesale and retail
lines. The news is distinctly favorable and trade and prices
are moving into new high grounds for the year. Collections
are better. Credit has improved. The production of steel
is increasing. Even the copper trade, so long in the doldrums, is moving upward. Tin plate production is on a big
scale. Trade in lead and zinc for weeks past has been steadily
moving upward. Stocks and commodities have been active
and rising. To-day there was another outburst of activity
and strength in the stock market which is attracting general
attention. U.S. Steel touched a new high for the movement.
All this merely reflects the rising tide of trade in this country.
Production of various commodities is increasing and wages
In some cases are being advanced. The chief improvement
Is in the output of textiles such as cotton, woolen and
worsteds, but there is also steady improvement in the iron
and steel business which has always been more or less a
barometer of trade in this country. The demand for textiles
is notably good. The distrubition of cotton piece goods
during May exceeded that of either 1931 or 1932, with prices
approximately 10% higher than they were a month ago and
there are indications that the advance is going further.
The National Cotton Week promotions held during the
month of May resulted in the largest sales ever recorded for
this period. The demand was not confined to cotton staples,
however, or to yard goods but extended to ready-to-wear
items. This factor alone received wide publicity and tended
to increase the demand for other commodities on the principal
that example is contagious. One fact that stands out clear
and illuminative of the increasing production in this country
is the steadily rising output of electric power. For four
weeks in succession, the production of electric power has been
larger than in the same weeks last year, the average for the
latest week being nearly 6%,a progressive increase. In New
England the increase was even more striking, being over
11%. In other words the great organs of production are increasing their output as the demand for goods steadily increases. The trade increase is due partly to the widely disseminated talk about inflation, the universal need of replenishment of commodities and the fear that prices are
destined to reach a very much higher level in a hundred lines
of industry. Fall buying budgets have already been extended
it is said, as much as 30% in textile lines and actual fall orders
placed thus far in some divisions are fully 25% ahead of those
booked in the same time last year. The wholesale shoe
business continues to break all records for shipments for the
last 10 or 15 years. The demand is coincident with the
increase in employment in the industry. It is estimated that
80% of the shoe workers in this country are now employed.
This year retailers appear to be selecting their stocks of footwear judiciously, calling for correct style of good quality.
With basic industry improving it is small wonder that the
feeling throughout the country is more cheerful week by week.
One reason for this is the improvement in collections here
and there in this country as a natural result of the quicker
turnover. In the steel trade prices are generally firm and
some expect an advance in the third quarter. Billets and
sheet bars are $25 at Pittsburgh as a minimum while for
the third quarter an advance of $2.00 would not be surprising.
In fact it is expected in certain quarters of the trade. Wholesalers are being hurried to fill the requests for shipments of
summer goods which retailers badly need because of the
suddenness and unexpected size of the buying movement in
the last two months. The farmers' purchasing capacity is
larger after the great rise in their products. Purchases
made thus far for June delivery are estimated conservatively
to be at least 10% larger than those for the same time last
year. Re-orders for summer merchandise have been particularly large for dresses, sporting clothing, shoes, bathing
suits, beachwear generally, novelty jewelry and men's straw
hats. Orders for fall delivery of house furnishings and furniture are noted with prices rising in both divisions. In some
cases merchandise prices are not being quoted beyond the
middle of July. There is an old saying to the effect that
"success lies at the far end of a corduroy road." Perhaps

this may be illustrated in toe case of this country. Absolute
success in getting back to the hard firm ground of normal prepanic times has not yet been attained but what heartens
the American people is to know that progress to this end is
being steadily achieved.
In New York trade is increasing, even building showing
signs of awakening which has helped steel operations.
Other industries here have also improved including leather,
textiles and automobiles. It has put new snap into the
situation that both stocks and commodities were at times
extraordinarily active with the stock ticker nearly half an
hour behind the trading. Retail trade was also active. In
Chicago the pre-exposition trade was very promising.
Wholesale trade was good and hotels were more crowded
than usual. Steel output was about 35% and some new
lines were opening up. Plates were in better demand from
the building industry. It is true that the dollar volume of
wholesale trade is below that of last year but in not a few
eases there was an increase over that for March.
In St. Louis, with lead and zinc prices higher, mining•
operations are up to full capacity and this means increased
employment. The shoe industry is more active and other
industries also show more life so that relief stations report
less call upon them. Large department stores are said to
be adding to the number of employees as sales increase. In
Kansas City trade maintains its recent improvement. In
Cleveland retail trade increased sharply. Steel operations
were 56% at Cleveland, 80 at Wheeling, 25 at Pittsburgh
and 45 at Youngstown. The increase in shoe production
in April was at the rate of 40% over April last year with
signs of still greater improvement. Employment in most
cases has greatly improved since early in the year. Besides,
hours of labor have increased and in some instances, wages.
In Minneapolis good weather has helped trade greatly and
sales have increased even over those of recent favorable
weeks. Some large department stores have increased wages
and also some of the smaller industries. Flour was dull but
the business was still noticeably larger than a year ago and
there is a gain in shoes, clothing and paints.
In Philadelphia trade increases, though it is true that
retail sales are below those of a year ago in most cases.
Larger retail sales were made in wearing apparel, groceries
and hardware. The business in electrical supplies and drugs
was good. In San Francisco store business is better.
Lumber and steel are in better shape. Atlanta's trade was
reduced by the intense heat. Boston reports most of the
textiles at or near capacity. Some of them, indeed, have
brgun night work as the demand for both woolen and cotton
goods is persistent. Most of the shoe manufacturers have
further increased operations and the sale of the product is
rapid. Steel trade is better. Department stores are busier.
In the stock market, the 27th was one of the most hectic
days in the history of the New York Stock Exchange. The
turnover was 4,311,340 shares, the largest for a Saturday
since May 3 1930 and the second largest half-day's business
in the history of the Exchange. The total for the first hour
was 2,560,000 shares and quotations continued to be printed
41 minutes after the close on the ticker. Average prices
reached the highest levels in over two years and gains of
from $2 to $8 a share were common. Wall Street interpreted the Administration's bill to repeal the gold clause in
obligations as a new move toward inflation and all markets,
for commodities as well as securities, jointed in the bullish
demonstration. Trade news provided additional incentive.
Steel operations were up to approximately 43% Car loadings were larger than the previous week as well as for the
same week in 1932 and an advance in copper prices were
only a few of the indications of improved conditions. Bonds
followed the lead of stocks although the advance was not as
spectacular. Total sales were $9,916,000. U. S. Governments were irregular and the higher grade domestic issues
lagged somewhat. Speculative bonds scored some marked
advances, particularly some of the railroad group and
foreign issues were firm as a rule.
On the 29th trading assumed broader proportions than for
nearly three years although the net price changes at the end
of the session showed only a small average gain. Transactions in stocks amounted to 6,953,640 shares and in bonds
$15,720,000. A tremendous amount of profit-taking was

absorbed. Favorable trade news accumulating over the
week-end was sufficient in itself to have brought more
public interest into the market but when the inflationary
fever was added to it, speculation assumed proportions
reminiscent of 1929's peak bull market days. Railroad
stocks were relatively stronger than industrials although the
oils were bouyant. Bonds were far less active than stocks,
proportionately, and were rather mixed in tone. United
States Government's showed little trend either way. Some
domestice railways scored substantial advances but foreign
bonds did not make so good a showing and some domestic
issues were also weak.
On the 31st, after the holiday on the 30th, the turnover
was again of huge proportions, although nearly a million
shares under that of the preceding Monday. Total transactions amounted to 6,076,350 shares. Prices churned
around for the most part with little net change in the averages
although the tone at the close was rather tired and declines
were more numerous than advances. Low-priced stocks
were the principal features as far as strength was concerned
while the market leaders were reactionary. Foreign markets
had been generally strong on the 30th, both for stocks and
commodities, and bullish sentiment was still much to the
fore when our market reopened on the 31st. Mid-week
trade news continued to be favorable. Total bond sales
were $16,114,000. Prices were generally firm with domestic
rails and some utilities the strongest features. United
States Governments were unchanged to fractionally lower.
Foreign bonds were steady.
On the 1st activity slackened somewhat although still remaining on a very generous scale. Total sales were 4,753,570
shares. After hesitating during the morning, prices firmed
up later in the day with the railroad group showing particular
strength. Some price increases in raw coffee and gasoline
were reflected in the afternoon trading also. Oil companies
are counting largely on governmental regulation to straighten
out a badly demoralized condition with it appears,some prospect of their hopes being realized. Sales of bonds totaled
$14,971,000. The market showed an irregular tendency
with the lower grades scoring some substantial gains. Most
of the foreign group were soft. U. S. governments were
Stocks to-day ended 1 to 10 points higher after another
day of great activity. The sales aggregated 6,877,860
shares. U. S. Steel made a new high for the year as did a
long list of other shares. Such leaders as Allied Chemical
and du Pont were in the van. Bonds advanced as much as
8 points in some instances and trading was brisk. Sharp
advances were recorded in railroad and secondary utility
issues. Sales were estimated at $17,000,000.
As to the weather it was warm with showers over Saturday
and Sunday. Generally the forepart of the week was rainy
and cool. It was clear and cooler here on the 1st inst.
To-day it was 51 to 69 degrees here and clear. The forecast
was for fair and warmer weather to-morrow. Overnight
Boston was 48 to 62 degrees; Baltimore,54 to 70; Pittsburgh,
52 to 70; Portland, Me., 46 to 64; Chifago, 64 to 78; Cincinnati, 56 to 74; Cleveland, 58 to 74; Detroit, 60 to 80;
Louisville, 58 to 74; Milwaukee, 64 to 76; Dallas, 68 to 82;
Savannah, 60 to 80; Kansas City, 68 to 84; St. Paul, 70 to
90; Oklahoma City, 68 to 86; St. Louis, 64 to 82; Denver,
56 to 86; Salt Lake City, 56 to 84; Los Angeles, 52 to 60;
Portland, Ore., 52 to 72; San Francisco, 48 to 58; Seattle,
50 to 64; Montreal,48 to 64; and Winnipeg,60 to 90 degrees.
Improvement in Weekly Electric Production Continues.
According to the Edison Electric Institute, the production
of electricity by the electric light and power industry of the
United States for the week ended May 27 1933 was 1,493,923,000 kwh., compared with 1,483,090,000 kwh. in the
previous week and 1,425,151,000 kwh. in the corresponding
period last year. The current figure is the highest since the
week of Jan. 14 1933.
The percentage increase for the week ended May 27 1933
was 4.8% over the same week in 1932, as against 3.3% for
the preceding week over the week ended May 21 1932. The
Institute's statement follows:
Major Geographic


Financial Chronicle

Volume 136

Week Ended
Week Ended
Week Ended
May 27 1933. May 20 1933. May 13 1933.

Week Ended
May 6 1933.

Atlantic Seaboard- - - New England (alone)_ _
Central Industrial_ ___
Pacific Coast





Total United States_





Arranged in tabular form, the output in kilowatt hours of
the light and power companies of recent weeks and by
months since and including January 1930 is as follows:
Week of-


Week of-


Week of-


Jan. 14 1,495,116.000 Jan. 16 1,602.482,000 Jan. 17 1.716,822,000
Jan. 21 1,484,089.000 Jan. 23 1,598,201,000 Jan. 24 1,712.78.6.000
Jan. 28 1,469,636.000 Jan. 30 1,588,967,000 Jan. 31 1,687.160,000
Feb. 4 1,454.913,000 Feb. 6 1,588.853.000 Feb. 7 1,679.016,000
Feb. 11 1,482.509,000 Feb. 13 1,578,817.000 Feb. 14 1,683,712,000
Feb. 18 1,469.732,000 Feb. 20 1,545,459.000 Feb. 21 1.680.029,000
Feb. 25 1,425,511.000 Feb. 27 1,512,158.000 Feb. 28 1.633,353.000
Mar. 4 1.422.875,000 Mar. 5 1.519,679,000 Mar. 7 1,684,125,000
Mar. 11 1,390.607,000 Mar. 12 1,538,452.000 Mar. 14 1,676,422,000
Mar. 18 1.375,207,000 Mar. 19 1,537.747.000 Mar.21 1,682,437,000
Mar. 25 1,409.655,000 Mar. 26 1,514,553,000 Mar. 28 1,689,407.000
Apr. 1 1.402,142,000 Apr. 2 1.480,208.000 Apr. 4 1,679,764.000
Apr. 8 1,399.367,000 Apr. 9 1,465,076.000 Apr. 11 1,647,078.000
Apr. 15 1.409,603,000 Apr. 16 1,480,738,000 Apr. 18 1,641,253.000
Apr. 22 1,431,095,000 Apr. 23 1,469.810.000 Apr. 25 1,675.570.000
Apr. 29 1,427,960,000 Apr. 30 1,454.505,000 May 2 1,644.437,000
May 6 1.435.707,000 May 7 1,429,032,000 May 9 1,637.296.000
May 13 1,468,035.000 May 14 1,436.928,000 May 16 1,654,303,000
May 20 1.483.090.000 May 21 1,435.731,000 May 23 1,644.783,000
May 27 1,493,923,000 May 28 1,425,151,000 May 30 1,601,833,000
June 4 1,381.452,000 June 6 1,593.662.000
June 3
ei Increase over 1932.

Month of--







January_ __ _ 6,480,897.000 7,011,736,000 7,435,782,000 8,021,749,000 7.6%
February ___ *5,835,263,000 6,494,091,000 6.678,915,000 7,066.788,000 10.1%
6,182,281,000 6,771.684,000 7,370,687,000 7,580,335.000 8.7%
6.294,302,000 7,184,514,000 7,416,191.000
6,219,554,000 7,180,210.000 7.494.807.000
6,130,077,000 7,070,729.000 7,239.697,000
6,112.175,000 7,286,576,000 7,363,730.000
6,310,667,000 7,166,086,000 7,391.196,000
6,317,733,000 7.099,421,000 7,337.106,000
_6,633,865,000 7,331,380,000 7,718,787,000
6.507,804,000 6,971.644.000 7.270312,000
-6,638,424,000 7.288,025.000 7,566,601,000
December77.442112.000 86.063.969.000 89.467.099.000
* February 1933 has one less working day than February 1932 (Leap Year).
-The monthly figures shown above are based on reports covering approxiNote.
mately 92% of the electric light and power Industry and the weekly figures are

based on about 70%.

Loading of Railroad Revenue Freight Increasing.
Loading of revenue freight for the week ended on May 20
totaled 531,618 cars, the car service division of the American
Railway Association announced on May 27. This was an
increase of 523 cars above the preceding week,and an increase
of 15,990 cars above the same week in 1932. It was however,
a decrease of 223,120 cars under the same week in 1931.
Comparisons showed that all commodities for the week of
May 20 showed increases over the corresponding waek last
year with the exception of merchandise less than carload
lot freight and live stock, which showed reductions. Details
20 totaled 201,693

Miscellaneous freight loading for the week of May
cars, an increase of 2,882 cars above the preceding week, and 8.044 cars
above the corresponding week in 1932. It was, however, a decrease
96.476 cars under the same week in 1931.
Loading of merchandise less than carload lot freight totaled 165.976
cars, an increase of 1,602 cars above the preceding week. but 15,182
the same
below the corresponding week last year and 56,280 cars under
week two years ago.
cars, a
Grain and grain products loading for the week totaled 35,247
decrease of 3,700 cars below the preceding week, but 7,480 cars above
corresponding week last year. It was, however, a decrease of 1,348 cars
below the same week in 1931. In the Western districts alone, grain and
grain products loading for the week ended May 20 totaled 23,828 cars, an
increase of 6,365 cars above the same week last year.
Forest products loading totaled 21,387 cars, 1,363 cars above the preceding week, and 2.816 cars above the same week in 1932, but12,247 cars
below the corresponding week in 1931.
Ore loading amounted to 8,198 cars, an increase of 1,474 cars above the
week before, and 5.197 cars above the corresponding week in 1932 but
12,532 cars below the same week in 1931.
Coal loading amounted to 79,646 cars, a decrease of 1.400 cars below the
preceding week, but an increase of 7,915 cars above the corresponding
ie 1931..
f n 19 2 It was, however, a decrease of 37,080 cars below the same
Coke loading amounted to 3,897 cars, 169 cars above the preceding week,
and 796 cars above the same week last year. Compared with the same week
two years ago, it was a decrease of 2,728 cars.
Live stock loading amounted to 15,574 cars, a decrease of 1.867 cars below
the preceding week, 1,076 cars below the same week last year, and 4,429
cars below the same week two years ago. In the Western districts alone.
loading of live stock for the week ended on May 20 totaled 12,019 cars, a
decrease of 781 cars compared with the same week last year.
All districts reported increases in the total loading of all commodities
compared with the same week in 1932 except the Central Western, which
showed a reduction. All districts reported reductions compared with the
same week in 1931.
Loading of revenue freight in 1933 compared with the two previous
years follows:
Four weeks In January
Four weeks in February
Four weeks in March
Five weeks In April
Week ended May 6
Week ended May 13
Week ended May 20









The foregoing, as noted, covers total loadings by the railroads of the United States for the week ended May 20. In
the table below we undertake to show also the loadings for


Financial Chronicle

the separate roads and systems. It should be understood,
however, that in this case the figures are a week behind
those of the general totals-that is, are for the week ended
May 13. During the latter period a total of 73 roads showed
increases over the corresponding week last year, the most

June 3 1933

important of which were the Southern Ry. System, the
New York Central RR., the Chicago Milwaukee St. Paul &
Pacific Ry., the Chesapeake & Ohio Ry., the Illinois Central
System, the Louisville & Nashville RR., the Chicago &
North Western Ry. and the Norfolk & Western Ry.

Total Revenue
Freight Loaded.



Total Loads Received
from Connections.



































Grand total Eastern District--






Allegheny District
Baltimore & Ohio
Bessemer it Lake Erie
Buffalo Creek & Gauley
Central RR.of New Jersey-Cornwall
Cumberland & Pennsylvania_ _ _
Ligonier Valley
Long Island
Pennsylvania System
Reading Co
Union (Pittsburgh)
West Virginia Northern
Western Maryland































Total Revenue
Freight Loaded.


Eastern District
Group .4:
Bangor & Aroostook
Boston ge Albany
Boston & Maine
Central Vermont
Maine Central
New York N. H. & Hartford..

Group B:
Delaware & Hudson
Delaware Lackawanna & West_
Lehigh & Hudson River
Lehigh & New England
Lehigh Valley
New York Central
New York Ontario & Western..
Pittsburgh & Shawmut
Pitts. Shawmut& Northern._ Total
Group C:
Ann Arbor
Chicago Ind. dr Louisville
Cleve. Cin. Chic. dr St. Louis
Central Indiana
Detroit dc Mackinac
Detroit & Toledo Shore Line-Detroit Toledo & Ironton
Grand Trunk Western
Michigan Central
New York Chicago & St. Louis_
Pere Marquette
Pittsburgh & Lake Erie
Pittsburgh & West Virginia-Wabash
Wheeling & Lake Erie

Pocahontas District
Chesapeake & Onto
Norfolk di Western
Norfolk dr Portsmouth Belt Line
Southern District
Group A:
Atlantic Coast Line
Charleston & Western Carolina_
Durham & Southern
Gainesville & Midland
Norfolk Southern
Piedmont & Northern
Richmond Frederick. & Potom.
Seaboard Air Line
Southern System
Winston-Salem SouthboundTotal

Total Loads Received
from Connections.

Group B:
Alabama Tenn. & Northern
Atlanta Birmington & Coast..
AU.dr W.P.
-West.RR.of Ala
Central of Georgia
Columbus & Greenville
Florida East Coast
Georgia dr Florida---Gulf Mobile & Northern
Illinois Central System
Louisville & Nashville
Macon Dublin dc Savannah..._
Mississippi Central
Mobile & Ohio
Nashville Chatt. & St. Louis..
NewOrleans-Great Northern..















Grand total Southern District..






NorthwesternDistrictBelt Ry. of Chicago
Chicago & North Western
Chicago Great Western
Chic. Milw. St. Paul & Pacific_
Chic. St. Paul Minn.& Omaha_
Duluth Missabe .14 Northern.- Duluth South Shore & Atlantic.
ElginJoliet & Eastern
Ft. Dodge Des M.& Southern-Great Northern
Green Bay & Western
Minneapolis & St. Louis
Minn. St. Paul dr S.S. Marie..
Northern Pacific
Spokane Portland dr Seattle--










































Central Western DistrictAtch. Top.& Santa Fe System_
Bingham & Garfield
Chicago Burlington & Quincy
Chicago Rock Island & Pacific_
Chicago & Eastern Illinois
Colorado dr Southern
Denver & Rio Grande Western_
Denver & Salt Lake
Fort Worth & Denver CitY---Northwestern Pacific
Peoria eiC Pekin Union
Southern Pacific (Pacific)
St. Joseph dr Grand Island.
Toledo Peoria & Western
Union Pacific System
Western Pacific
Southwestern District
Alton & Southern
Burlington-Rock Island
Fort Smith & Western
Gulf Coast Lines
YHouston & Brazos Valley
International-Great Northern
Kansas Oklahoma & Gulf
KEMSBA City Southern
Louisiana & Arkansas
Litchfield & Madison
Midland Valley
Missouri dr North Arkansas
Missouri-Kansas-Texas Linea- Missouri Pacific
Natchez & Southern
Quanah Acme dr Pacific
St. Louis-San Francisco
St. Louis Southwestern
YSan Antonio Uvalde dr Gulf_
Southern Pacific in Texas & La_
Texas & Pacific
Terminal RR.Assn.of St. Louis
Weatherford Min. Wells & N.W

• Figures of preceding week. x Estimated. y Includes in Gulf Coast Lines.

Most Impressive Advances in Business Activity and
Price Levels Since Depression, Says Guaranty
Trust Co. of New York-Fundamental Change in
Relation of Government to Business.
The last month has witnessed the most impressive advances
in business activity and in price levels since the beginning of
the depression, says the Guaranty Trust Co. of New York
in the current issue of "The Guaranty Survey," its review
of business and financial conditions in the United States and
abroad, published May 29. "Thus far, the clearest evidences of recovery are largely confined to the heavy industries and the security and basic commodity markets," said
the "Survey," which continued:
But scattered reports Indicate that constructive influences have also
been felt in other branches of business, where comprehensive statistical
Information does not become available so promptly as in the lines Just
mentioned. Particularly encouraging are the numerous instances of increased employment and higher wage rates that have been reported from
all parts of the country.

Bases of Current Expansion.
Under the circumstances, it is inevitable that the question should arise
to what extent the recent improvement is due to norm expansive forces
and to what extent it Is attributable to commodity hoarding inspired by
the fear of currency and credit manipulation. This question-which is,
unfortunately, very difficult to answer-is vital in its bearing on the outlook for the future. In so far as the current expansion represents a response
to natural recuperative forces, its significance is wholly favorable.
The first and most obvious consideration that comes to mind in this connection is the fact that no money or credit expansion has yet taken place.
Although the Federal Reserve banks increased their holdings in Government securities by 825,000,000 during the week ended May 24, the advance
was more than offset by decreases in other forms of Reserve credit. If
inflation has played any part in recent developments, it has done so only
by anticipation. That may tend to indicate that the recovery is based on
sound and natural grounds, or it may simply show how extremely sensitive
the price structure is to any doubts that arise concerning the stability of the
currency. To the extent that the latter is the case, it may well be given
most careful consideration by those who have assumed that inflation, or
"reflation," is a simple and controllable process whereby prices can be
raised to a desired level by forcing a limited amount of new currency or
credit into circulation.

Volume 136

Financial Chronicle

Reasons for Optimism.
There are, nevertheless, several reasons for believing that the recent
signs of improvement reflect, in part, at least, the operation of genuinely
constructive factors in the underlying situation. One is the simple historical fact that the recession has already continued well into its fourth
year. Seldom, if ever, in the past has a violent and continuous downward
reaction extended over such a long period without effecting the necessary
readjustments and laying the groundwork for a sound recovery.
This view is strengthened by a recollection of the revival that began last
summer and attained considerable momentum before it was halted by a
combination of factors, prominent among which was the growing distrust
of the banking situation. This obstacle now seems to have been removed.
It is not unreasonable, therefore, to regard the current expansion as the
continuation or the resumption of an upward movement that really began
almost a year ago.
It may be significant also that the movements of prices in the last few
weeks have become increasingly independent of the fluctuations of the dollar in foreign exchange markets. When the price advance began, it seemed
to be primarily a function of dollar depreciation. This is no longer clearly
the case. The dollar has shown signs of greater firmness in terms of goldstandard currencies, but prices in this country have continued to rise.
Furthermore, the aggregate advances in prices of some of the most important domestic and international commodities have considerably exceeded
the depreciation of the dollar from its gold parity.
In conjunction with these favorable reflections, the fact that a substnatial
upturn in business has taken place without any appreciable monetary manipulation appears truly encouraging. President Roosevelt has announced
that the extrardinary powers conferred upon him by the "inflation"
amendment to the farm bill will be exercised only when,as and if they seem
to be required. There is ground, therefore, for the hope that the current
improvement may proceed with sufficient momentum to forestall the use
of these drastic and dangerous experiments in currency tinkering.
Broad Scope of Revival.
As time goes on, the scope and magnitude of the advance in business
activity become more apparent. Most of the basic industries, including
steel, automobiles, bituminous coal, electric power, lumber, and some
branches of the textile industry, have already risen above the levels of a
year ago. Railway freight loadings have exceeded the total for the corresponding period of the preceding year for almost the first time since the
depression began. Department store sales increased in April by much
more than the usual seasonal amount. Most significant of all, factory
employment and payrolls increased last month, contrary to the usual April
trend. The increases over the March figures were moderate, particularly
in view of the abnormally depressing influence of the banking holiday.
Recent reports from various industries, however, indicate very strongly
that the upward tendency has gained momentum in the last few weeks and
that the figures for May will show substantial gains.
Improvement has also continued in the financial situation. The exchange value of the dollar has shown increasing firmness. The withdrawal
of currency from hoarding has proceeded to a point where the sharp increase in circulation immediately prior to the banking holiday has largely
disappeared. Gold reserves of the Federal Reserve banks stand at the
highest total on record. The rediscount rate of the Federal Reserve banks
of New York was reduced on May 25 from 3 to 2M %. The banks open
and operating without restrictions are estimated to represent 90% of the
banking strength of the country, as measured by deposits; and the 5,000
or more banks that are still under restrictions are being rehabilitated as fast
as conditions permit.
Sharp Rise in Raw Material Prices.
The most striking feature of the rise in commodity prices is the fact that,
thus far, it has affected chiefly the prices of basic raw materials. The
wholesale price index of the Guaranty Trust Co., which is based on prices of
23 commodities of this class, advanced 32% between Feb. 15 and May 15,
while the weekly index of the Bureau of Labor Statistics, which is based on
784 commodities of all classes,rose only 4.5% between March 4 and May 13,
the latest date for which an index number is available.
This comparison is in line with the usual experience,inasmuch as fluctuations in prices of raw materials almost always occur earlier and are more
violent than those in manufactured commodities. Some authorities are
of the opinion that the drastic decline in prices of leading raw materials in
recent years has been one of the major factors in prolonging and aggravating the depression and that a sustained advance in such prices, unless it
arises from artificial currency manipulation, will be among the most definite
indications of genuine business recovery.
New Relation of Government to Business.
Even a cursory examination of the new laws and the bills now pending
must impress the observer with two facts of basic importance. The first
is that the relation of government to business has, for the time being, at
least, undergone a fundamental change. The second is that the Federal
Administration has been given an extraordinary degree of latitude in the
formulation of policies. Some commentators have gone so far as to regard
these changes as constituting a political and economic revolution.
The modern economic system is both vast and complex, and its precise
workings are beyond the comprehension of any individual or group. The
Government, in assuming the responsibility of regulating its operation, is
indeed taking a bold step. Not only must there be assurance of protection
against the terrific temptations to corruption inherent in the grant of such
sweeping powers, but the public service must be kept free from the inefficiency and indifference that always tend to creep into governmental bureaus.
The successful administration of such a program will require integrity,
intelligence and alertness of the highest order. The laborer and the consumer must be protected against exploitation and the minority against
oppression. At the same time, efficiency must be permitted to enjoy its
rewards and inefficiency to suffer its penalties; otherwise, the incentive to
effort will be removed and industrial progress will cease. Demagogic appeals and selfish group interests must be encountered and combated at
every step.
To meet these stringent requirements with reasonable adequacy would
appear to demand a higher grade of public service than has ever been
achieved in the past. And for every error, every miscalculation, every
failure of the system to function according to expectations, the blame will
fall squarely on the shoulders of the Government. It is not without reason
that men of practical experience in economic affairs have consistently demanded that business be kept out of politics. The industrial recovery bill,
if enacted, will carry business into politics on a scale unprecedented in this
Despite these disquieting considerations, the attitude of industrial leaders toward the bill is by no means one of unmitigated hostility. After
more than three years of ever-deepening depression, there is a fairly widespread disposition to try the experiment, with its recognized dangers and
pitfalls, rather than to risk an indefinite continuation of the almost intolerable conditions of the recent past. Even before the passage of the bill,


leaders in tho electrical equipment industry have signified their intention
to avail themselves of its provisions. If the trial is even reasonably successful in achieving its declared aims, it will bring relief to all groups. If
It fails, it can be abandoned with less permanent damage than some of the
other economic experiments that are about to be tried.

April Output of Electricity Off 5% as Compared With
a Year Ago.
According to the Department of Interior, Geological
Survey, production of electricity for public use in the United
States during the month of April 1933 totaled 6,450,793,000
kwh., compared with 6,673,357,000 kwh. in the preceding
month and 6,790,119,000 kwh. in the same period last
year. Of the total for April 1933 there were produced by
water power 3,084,230,000 kwh. and by fuel 3,366,563,000
kwh. The Survey's statement follows:
Total—By Fuels and Water Power.

Change in Output
front Precious Year.




New England
428,017,000 447,829,000 445,010,000
Middle Atlantic__
1,764,869,000 1,868,978,000 1,706,887,000
East North Central. 1,373,102,000 1,418,691,000 1,423,491,000
West North Central.. 429,826,000 445,376,000 409,656,000
South Atlantic
775,054,000 832,725,000 814.488,000
East South Central. 243,031,000 269,335,000 248,954,000
West South Central_ 307.568,000 311,912,000 312,748,000
186,334,000 203,956,000 200,227,000
777,905,000 876,555.000 889,332,000



Total for U. S

6,285,704.000 6,673,357,000 6,450.793,000
The daily production of electricity for public use in Apr I was 215,000,000
kwh., practically the same as in March (revised figures). The normal
change from March to April is a decrease of about 1%. The output in April
of this year was 5% less than in April of the previous year, which in turn
was 11% less than in April of 1931. These figures indicate an improvement
in the demand for electricity for public use.
The production of electricity by the use of water power in April was
48% of the total. This is the highest percentage ever reached by water
power. The output by the use of fuels was only 282,000,000 kwh.,or about
9% greater than the output by the use of water power.



Kilowatt Hours Kilowatt Hours
January...._ 7,587,081.000 6,932,499.000
February__ 7,023,473,000 8,285,704,000
7,323,020,000 6,673,357,000
6,790,119,000 6,450,793,000
September. _ 8,752,091,000
November _ 6,952,085,000
December.— 7,148,606.000

Produced by
1i'cifer Power.









WI ISR fIR2 nen
a Revised. b Based on average daily production.
On May 1 the total stocks of coal at electric public utilities stood at
5,594,132 net tons, a decrease of 1.9% in comparison with the amount on
hand at the beginning of the previous month. Of the total, 4,445,974
tons was bituminous and 1,148,158 tons was anthracite. Consumption of
coal in April, however, was somewhat lower than in the previous month,
partly because there was one less day in April than in March and largely
because of the increase in the output of hydro-electric plants. Bituminous
coal consumed in April amounted to 1,973,085 tons, as against 2,163.248
tons in March. while hard coal consumption dropped from 121,104 tons to
102,142 tons.
At the rate of consumption prevailing in April the total stocks of coal at
electric utility plants on May 1 were sufficient to last 81 days. This is an
Increase over a month ago. when the total stocks were equivalent to 77
days supply.
The quantities given in the tables are based on the operation of all power
plants producing 10,000 kwh. or more per month, engaged in generating
electricity for public use, including central stations, both commercial and
municipal, electric railway plants, plants operated by steam railroads generating electricity for traction, Bureau of Reclamation plants, public works
plants, and that part of the output of manufacturing plants which is sold.
The output of central stations, electric railway and public works plants
represents about 98% of the total of all types of plants. The output as
published by the Edison Electric Institute and the "Electrical World"
includes the output of central stations only. Reports are received from
plants representing over 95% of the total capacity. The output of those
plants which do not submit reports is estimated; therefore, the figures of
output and fuel consumption as reported in the accompanying tables are
on a 100% basis.
[The Coal Division, Bureau of Mines, Department of Commerce, cooperates in the preparation of these reports.]

Moody's Daily Index of Staple Commodity Prices
Continues Advance to New High Levels.
Prices of the chief raw commodities continued to advance
during the week in review, Moody's Daily Index of Staple
Commodity Prices advancing to 120.9 from 116.9, for the
ninth net gain in the last ten weeks. The closing figure was
the highest in nearly two years and was 53.6% above the
low point established on Feb. 4.
All but 3 of the 15 commodities entering into the Index
closed the week at an advance, scrap steel and hogs showing
declines and sugar being unchanged. Rubber, with a 25%
increase in price, was responsible for the largest single contribution to the advance, followed by hides, copper, and

Financial Chronicle


cotton, while lead, silk, wool, silver, wheat, cocoa, coffee
and corn added smaller amounts to the Index number.
The movement of the Index during the week, with comparisons, is as follows:
May 26
Sat. May 27
Mon. May 29
Tues. May 30
Wed. May 31
Thurs.June 1
Fri. June 2



2 wks. ago, May 19
Month ago, May 2-- Year ago. June 4
19321 High Sept. 6
Low Dec. 31
1933 High June 2
Low Feb. 4

Increase Noted in Wholesale Prices During Week
Ended May 20 by United States Department of
The Bureau of Labor Statistics of the U. S. Department
of Labor announces that its index number of wholesale
prices for the week ending May 20 stands at 63.0 as compared with 62.3 for the week ending May 13, showing an
increase of approximately 1 and 1-10%. The Bureau
further said:

June 3 1933

was reported in March. The average rate of collections during April of
accounts outstanding at the end of March was nearly as large in 1933 as
in 1932.
Percentage Change from a
Year Ago.
P. C. of Accounts
Net Sales.
Stock Var. 31 Collected
on Hand
in April.
Feb. to End of
April. April. Month. 1932.


New York
Northern New York State
Southern New York State
Hudson River Valley District
Capital District
Westchester District
All department storm
Apparel stores


Week Ending-'
Apr. 22. Apr. 29. May 6. May 13. Molt 20.
All commodities
Farm products
Hides and leather products
Textile products
Fuel and lighting
Metals and metal products
Building materials
Chemicals and drugs
Housefurnishing goods






Decrease of 6% Noted by Federal Reserve Bank of
New York in Chain Store Sales During April as
Compared with Year Ago.
The Federal Reserve Bank of New York in its June 1
"Monthly Review" reported as follows with regard to chain
store trade in the Second (New York) District:
Total April sales of the reporting chain store systems were 6% below a
year ago, the smallest decline since March 1932. This relatively favorable
comparison was due in considerable measure to the fact that Easter trade
occurred this year in April and last year in March, but the decline for March
and April combined was somewhat smaller than in most recent months.
Variety chain sales in April were slightly larger than a year ago, the
first increase since February 1932; shoe chain sales showed the smallest
reduction since June 1931;and ten-cent store sales registered a much smaller
decline than in a number of months. Sales of candy chains were the most
affected by the late date of Easter, showing a large increase over last year
following a large decline in March. The grocery and drug chains seemed
little affected by the date of Easter and sales continued to show a large
reduction from a year ago.
Candy chains during the past year have increased materially the number
of stores operated, while drug and shoe chains have reported sizable decreases in the number of units. For all reporting chains the averaeg decline in sales per store between April 1933 and April 1932 was slightly
smaller than the decline in total sales.








April sales and stocks in the principal departments are compared with
those of a year previous in the following table:

These index numbers are derived from price quotations of 784 commodities, weighted according to the importance of each commodity and based
on average prices for the year 1926 as 100.0.
The accompanying statement shows the index numbers of groups of
commodities for the weeks ending April 22, 29 and May 6, 13 and 20 1933
29 AND MAY 6, 13 AND 20 1933.


Net Sales
Percentage Change
April 1933
Compared with
April 1932.

Stock on Hand
Percentage Change
April 29 1933
Compared with
April 30 1932.



Men's and boys' wear
Woolen goods
Luggage and other leather goods
Men's furnishings
Toys and sporting goods
Women's ready-to-wear accessories
Linens and handkerchiefs
Women's and misses' ready to-wear
Toilet articles and drugs
Cotton goods
Books and stationery
Silverwear and jewelry
Home furnishings
Silks and velvets
Musical instruments and radio

Monthly Indexes of Federal Reserve Board-Increase
Noted in Industrial Production During April
Compared with March.
Under date of May 25 the Federal Reserve Board issued
as follows its monthly indexes of industrial production,
factory employment, Sic.:
(Index numbers of the Federal Reserve Board 1923-25=100)•
Adjusted for
Seasonal Variation.
Industrial production, total
Construction contracts, value z
All other
Factory employment
Factory payrolls
Freight-car loadings
Department store sales







Seasonal Adjustment.




Type of Store.
No. of Stores.

Total Sales.

Sales per Store.

Ten cent









York Federal Reserve
Below April 1932.
"Total April sales of the reporting department stores in
the New York Federal Reserve District were 10% below a
year ago, the smallest decrease since December 1931,"
according to the New York Reserve Bank in its June 1
"Monthly Review." "While the late date of Easter contributed largely to the favorable showing in April," the Bank
continued, "total sales for the whole period from the middle
of March to the end of April showed a considerably smaller
decrease than in previous months." In its "Review" the
Bank added:
Department Store Sales in New
District During April 10%

Continued improvement in the first half of May is indicated by reports
from department stores in the Metropolitan area of New York, which showed
sales only 5% below the corresponding period of 1932.
In April the New York City stores bad the smallest decline in sales since
December. 1931. and in a number of other localities the stores reported the
smallest reductions in over a year. Two groups of stores, those in Syracuse
and the Southern New York State district, reported slight increases over a
year ago, the first since the spring of 1930. April sales of the leading
apparel stores showed the smallest decline since July 1931, following a large
decrease in March.
Department store and apparel store stocks of merchandise on hand April
29 at retail valuation showed a slightly smaller decline from a year ago than





(Adjusted for seasonal variation.)

Percentage Change, April 1933 Compared with
April 1932.



Group and






Apr. Mar. Apr.
Iron and steel
Food products
Paper and printing.-- -Lumber cut
Leather and shoes__ p93
Petroleum refining
Rubber tires
Tobaccomanufactures 116




Apr. Mar. Apr.
Bituminous coal... _ p55
Anthracite coal



(Underlying figures are for payroll period ending nearest middle of month.)

Group and Industry.

Adjusted for Sea- Without Seasonal Without Seasonal
tonal Variations.
Apr. Mar. Apr. Apr. Mar. Apr. Apr. Mar. Apr.

ironand steel
Textiles, group
Wearing apparel
Paper and printing
Transportation equipment..
Cement, clay and glass
Nonferrous metals
Chemicals, group
I etroleum
Rubber products





A7 A

as &




• indexes of production, car loadings, and department store sa es based on dalli
averages. p preliminary. r Revised. z Based on three-month moving averages,
centered at 2d month.

Financial Chronicle

Volume 136

Advance in Commodity Prices Checked During Week
Ended May 27
-Index of National Fertilizer Association Still at 1933 High Point.
The continued climb of wholesale commodity prices was
arrested during the latest week, according to the index of
the National Fertilizer Association. This index has steadily
advanced for seven weeks, but for the week ended May 27
it showed no change whatever. The trend of the prices for
individual commodities was mixed; many important commodities declining while others advanced. The latest index
number, 60.1 (the three-year average 1926-1928 equals 100)
is 15 points higher than it was a month ago, and is only two
points lower than it was at this time last year. Several
groups in the index .re higher than they were a year ago.
This applies particularly to grains, feeds and livestock, textiles and fats and oils. The Association under date of May
29 continued:
During the latest week five of the major groups advanced, three declined,
six showed no change. The accumulated gain of the five advancing groups
was counteracted by the force of the loss of the three declining groups.
The advancing groups were textiles, metals, fuel, fertilizer materials and
miscellaneous commodities. The textile group showed the largest gain.
The declining groups were foods, fats and oils and grains, feeds and livestock. These are very important groups in the index.
Thirty-eight commodities advanced, the smallest number in many weeks,
and 30 commodities declined. This is the largest number of declines recorded during any week for several months. Important commodities
tht advanced during the latest week included rubber, wool, silk, burlap,
cotton yarns, cottonseed oil, beef, dried fruits, pig iron, finished steel.
lead, silver bars, petroleum, hides, rosin and tankage. Listed among the
declining commodities were wheat, corn, oats, many other grains and feedstuffs, hogs, cattle, lard, butter, eggs, linseed oil, cotton, cottonseed meal.
heavy melting steel and gasoline.
PRICES (1926-19274=10W
Fe? Cent
Each Group
Fears to the
Total Index.


Mah 27




Grains, feeds and livestock
Miscellaneous commodities
Building materials
House-furnishing goods
Fats and oils
Chemicals and drugs
Fertilizer materials
Mixed fertilizer
Agricultural implements.... 90.2
--All grouns eninhinPri
an 1
an I
AR a IRfl a

"Annalist" Weekly and Monthly Indices of Wholesale
Commodity Prices
-Weekly Index at New High for
Year During Week Ended May 29
-Monthly Index
Sharply Higher.
Further sharp advances in a large part of the commodities
carried The "Annalist" Weekly Index of Wholesale Commodity Prices 1.6 points upward to 92.7 on May 29, from
91.1 (revised) on May 23. Continuing, the "Annalist" said:
The average for May, reflecting the gains In the weekly figures, rose to
90.5 from 83.8 in April. All the group indices advanced during the week,
except chemicals, which is on a monthly basis: the sharpest gains were made
by the farm products index, which rose to 84.1 from 81.3 (revised) the week
before and is now the highest since 1931, and by the textiles index, which
rose to 92.1 (provisional) from 87.4 (revised), as prices were lifted sharply
by the sustained demand.
[Unadjusted for seasonal variation (1913=10(0.1


The advance of the weekly index was more than offset, however, by the
decline of the dollar, which fell on May 29 to 83.4 cents, in terms of exchange on France, Switzerland, Belgium, and Holland, from 86.2 May 23,
a loss of 3.2% for the six days. In terms of gold The "Annalist" weekly
Index accordingly declined to 77.3 from 78.5. May 23.
In this connection it should be noted that while the index on a gold basis,
as now given in the chart and tables, shows a continuation of last year's
decline, although at a reduced rate, it is far from certain that had we
remained on a gold basis the index would have fallen as much. This is
because the prices of commodities which are on a purely domestic basis,
without any direct connection with world markets, do not at once advance
in proportion to the decline in exchange. Such commodities as eggs, milk
(until placed under State supervision), butter, cheese, apples, potatoes,
salt, coal and coke, the prices of which have not shared in the general
advance of the past three months, continue on the whole to be governed
by domestic considerations, advancing with the gradual raising of the
general price structure. Because only a part of the commodities included
in the index are tied to world prices and have therefore advanced in proportion to the drop in the dollar, the index on a gold dollar basis shows a
considerably greater decline than would have taken place had the dollar
remained at Dar. The actual course of prices would probably have been
somewhere in between that of the index on a domestic dollar basis and that
adjusted for dollar depreciation.

Survey of Changes in Living Costs by National Industrial Conference Board-Decline of 0.4% Between
March and April-Decrease in Year 9.3%.
In the first of a series of monthly surveys on changes in
the cost of living (issued May 30), the National Industrial
Conference Board states that although there were practically no changes between March and April in average food
prices and in the cost of sundries, declines in rents and clothprices and seasonal reductions in coal prices lowered total
living costs 0.4% between these two months, according to
the indexes computed by the Board. The reduction in
living costs in April of this year since April 1932 was 9.3%
and since April 1929 27.9%, says the Board in its survey,
which further reports:
The purchasing value of the dollar was 139.9 cents in April 1933 as compared with 100 cents in 1923.
The comparative stability of food prices between March and April is in
contrast to their behavior during the preceding five months, when they
declined substantially from month to month, although it is not the first
time during the current depression that only slight changes were noted.
Compared with the price levels of April 1932 and April 1929, food prices
have dropped 12.8% and 40.4%, respectively.
Rents continued their downward trend, declining 0.9% between March
and April, which made them 14.2% lower than in April 1932 and 30.5%
lower than in April 1929. From 41 cities of the 172 cities from which rent
quotations were received, lower rentals were reported in April than in
March; from five cities increases were reported, and from the remaining
cities no changes.
Clothing prices fell 0.8% between March and April, bringing them 11.3%
below the level of April 1932 and 38.6% below that of April 1929.
Coal prices declined 2.2%, less than seasonally, between March and
April. Compared with April of last year and of four years ago, coal prices
have been reduced 4.0% and 12.4%, respectively.
A slight decline in the prices of housefurnishings made the April sundries
index 0.1% lower than that of March, 4.0% lower than in April 1932 and
10.3% lower than in April 1929.


Food •
Fuel and light
Gas and electricity

in Family
Per Cent.

% Decrease
Index Numbers of the
Cost of Living.
Average Price 1923=100. March 1933
April 1933. March 1933. April 1933.


Weighted aver.of all Items
•Eased on food price index of the 15. S Bureau of Labor Statistics


May 29 1933. May 23 1933. May 31 1932,
Farm products
Food products
Textile products
Building materials
All commodities
All commodities on gold basis_ x




[Unadjusted for seasonal variation-Monthly averages of weekly figures.]
May 1933.

April 1933.

May 1932,

Farm products
Food products
Textile products
Building materials
All commodities
All commodities on gal IlitslA A
• I rellininary. x Revised. z Rased on e.cliange quotations for France, Switzerland, Holland and Belgium.
Political developments dominated, as usual, the progress toward enactment of the bill abrogating the gold clause of all contacts being the chief
stimulant. The fact that the situation for practical purposes is little changed
made no difference, the markets generally regarding the bill as merely a
further sign of the inflationary intentions of the government. Supporting
factors were the continued improvement of business and the announcement
of preliminary hearings for acreage reduction under the Farm Relief Bill.

Gain of 17%'Notes in Farm Prices During Month
Ended May 15
-Largest Increase Recorded for Any
One Month Since April 1919.
The general Index of farm prices advanced from 53 to 62
during the month ended May 15, according to reports compiled by the Bureau of Agricultural Economics. This9
rise amounted to a gain of about 17%, the largest recorded
for any one month since April 1919. An announcement issued
by the United States Department of Agriculture on May 29
The upturn in farm prices from April 15 to May 15 this year was led by
grains, that group gaining 15 points. Meat animal prices were up 8 points,
chickens and eggs 6, cotton and cottonseed 6, dairy products 4, fruits and
vegetables 2. Wool made the most striking advance for a single commodity,
the price advancing 42 points, or 75%, during the month.
' The May 1.5 farm price index at 62 for all commodities was 6 points above
a year ago and, the highest since January 1932. The increase in farm prices
resulted in a corresponding advance in the ratio of prices received by farmers to prices paid for articles purchased since the latter remained unchanged
at 100% of pre-war. Therefore, the exchange value of farm products was
62% of the 1910-1914 average compared with 50% a year ago.
Wheat at 59c. per bushel, the average farm price on May 15, reached the
highest level recorded since May 1931, and was 39% above a year ago. The
average price of corn at nearly 39c. per bushel in mid-May has more than
doubled in the last three months.
Hog prices advanced during the month in the face of a seasonal increase
in supplies, and at $3.88 per 100 pounds the average of prices paid to
farmers was about one-fifth higher than a month earlier and nearly one-third


Financial Chronicle

above farm prices a year ago. The advance was greater in the corn belt than
in other sections of the country.
Cotton prices paid to farmers advanced 34% to 8.2e. per pound during
the month ended May 15. This price was 58% higher than a year ago and
the highest recorded since July 1931. The average price of potatoes advanced
only 3%,to 43.7c. per bushel, which was about 7% over a year ago. Butterfat prices advanced about 22% from April 15 to May 15, in contrast to the
usual seasonal decline recorded in this period. At 20.2e. per pound, the
mid-May farm price of butterfat was approximately 24% higher than a
year ago.

American Federation of Labor Report Finds Marked
Employment Increase in April But Notes Slackening of Rate of Increase in May—Unemployment
Dropped by More Than 600,000 in April, Survey
Employment in April recorded substantial gains over
March, but the rate of increase showed signs of slackening in
May, according to a survey made public on May 26 by
William Green, President of the American Federation of
Labor, and based on reports from affiliated organizations.
Mr. Green's statement said:
Government figures now available show that more than 600,000 persons
went back to work in April with the recovery of industry from the bank
Crisis. Total unemployment in March was 13,359,000;in April, 12,730,000.
The largest number of new jobs were in agriculture, 250,000, where farmers
are taking on help for the planting season; retail trade 165,000—increased
buying due both to the Easter trade and to fear of inflation has created jobs;
manufacturing, 100,000—about half those laid off by the crisis have gone
back to work; building,59,000;roads, 20,000;laundries and cleaners, 11,000.
Trade union reports for the first part of May show another slight gain in
employment, but less than half that of April. Apparently the gain in jobs is
tapering off as the summer season approaches.
Union reports show that employment in building and manufacturing continued to gain slightly in May; service industries and water transport also
report continuing improvement. But in clothing and textiles the spring
season is over and unemployment is increasing again. In building, even
after alight gains, 69% are out of work and 15% on part time; metal trades
—only 29% have full time work; in manufacturing, 49% are unemployed;
theaters, 40%;seamen and longshoremen,41%.
Relief payments reached an all-time peak In March;total relief was nearly
trebled since 1931. and public relief has more than trebled.
To get these 12,700,000 back to work is the greatest task before the nation.
Up to May 20 1933,70,000 had been sent to the forestry camps. The public
works-Industry bill will furnish jobs to start industry going through its
$3.300,000,000 public works program; but the millions now depending on relief will for the most part have to depend on the process of business improvement and the fair practice codes to be established under the bill.

Decrease Noted in Exports of Farm Products.,
Continued reduced exports of farm products in April carried the index of exports down to 59 for 44 leading farm
products, reports the Bureau of Agricultural Economics,
which, according to an announcement issued May 27 by the
United States Department of Agriculture, added:
Exports of wheat and flour were only 1,754,000 bushels. Exports of
wheat and flour during 10 months ended April 30 were 37,982,000 bushels
compared with 118,880,000 bushels during the corresponding period the
preceding year.
Only the exports of fruit and tobacco were above pre-war in the Bureau's
index; fruit at 154, and tobacco at 118. All other farm products were below
pre-war in export volume. The index numbers were: Grains and grain
products, 22; animal products, 56; dairy products and eggs, 84; cotton, 65;
wheat and flour, 20; hams and bacon, 31; lard, 98.

Further Decline Shown in Farm Real Estate Values
as of March 1 1933 When Compared with March 1
The index of the value per acre of farm real estate for the
United States as a whole as of March 1 1933 averaged 73,
compared with an index of 89 on March 1 1932 and of 106
on March 1 1931, according to estimates by the Bureau of
Agricultural Economics of the U. S. Department of Agriculture. This index is based on average values for the years
1912 to 1914. An announcement issued May 22 by the
Bureau continued:
The declines from a year ago have been widespread and over a considerable part of the country they have been reasonably uniform, reflecting
the continued declines in farm income. From 1929 to 1932 gross income
from farm production decreased a little more than half. During the same
period farm real estate values dropped a little more than one-third.
Of the various geographic divisions, the East North Central at 62 and
West North Central States at 64 were the lowest values relative to pre-war.
For individual States the indexes ranged from 53 for Indiana to 80 for
Michigan and Wisconsin, and from 55 for Missouri and South Dakota to
79 for Minnesota.
The highest average values relative to pre-war were in the New England
States, where the index for the group as a whole was 105. Indexes for
individual States in that region ranged from 92 for New Hampshire to 124
for Connecticut.
In the three Southern geographic divisions the indexes for individual
States ranged from 57 for Georgia and South Carolina to 121 for Florida;
from 73 in Mississippi to 88 in Alabama, and from 76 in Oklahoma to 89
in Louisiana.
Following the 1920 peak in farm real estate values—when the index
mounted to 170—values declined rapidly for a few years and then more
slowly. During the years 1928 and 1929 the average declines were small,
and there were indications that substantial progress had been made toward
readjustment. Subsequent breaks in prices of farm products, however,
brought greatly reduced farm incomes, and precipitated a new wave of
forced selling and declining real estate values.
Indexes for other geographic divisions as of March 1 1933 were as follows: Middle Atlantic, 82; South Atlantic, 90: East South Central, 79;
West South Central. 82; Mountain, 69. and Pacific States. 96.

June 3 1933

Geographic Division
and Slate.
New Hampshire
Rhode Island
New England
New York
New Jersey
Middle Atlantic
East North Central
North Dakota
South Dakota
West North Central
West Virginia
North Carolina
South Carolina
South Atlantic
East South Central
West South Central
few Mexico

1920 1925 1926 1927 1928 1929 1930 1931 1932 1933
% %
142 124
129 111
150 125
140 132
130 128
137 137

% % % %
126 124 124
113 112 112
126 125 123
134 131 131
130 133 134
137 138 139


% %
124 123
111 110
123 121
131 130
134 133
140 140

% %
111 94
102 92
112 101
120 112
126 118
133 124

140 127 128 127 127 126 127 126 116 105
133 111 109 108 106 105 103 96 92 82
130 124 129 128 127 127 125 123 118 110
140 114 114 112 111 110 107 101 96 78
136 114 113 111 110 109 106 101









133 116
113 98
92 79
95 85
93 83
113 106
113 103






105 99 96 94 90 82
95 87 84 83 80 72
109 99 96 95 91 80
129 127'
125 124 121 115
125 122 120 119 117 104

161 116 111 104 101 100







184 126 121 115 113 112 109







107 95 80
120 106 90
117 99 88
98 81 74
135 114 86
90 73 57
90 70 57
166 141 121

198 148 149 137 134 132 128 116









115 97
114 96
129 102
112 92


199 141 139 133 130 129 128 117









118 104
121 103
116 94
122 96


177 144 144 139 137 136 136 121









70 58
114 96
95 77
81 65
109 89
123 104
122 98
97 78



151 105 103 101 101 101 102 100 82 69
140 113 112 111 110 110 110 108 91 74
130 110 107 106 106 106 107 106 88 72
167 164 163 162 161 160 160 158 133 109
156 146 144 143 142 142 142 140 118 96
United States
170 127 124 119 117 116 115 106 89 73
All farm lands with improvements.
Figures for 1933 preliminary, sub ect to correction.


Level of General Business Activity in Boston Federal
Reserve District Increased More Than Usual
Seasonal Amount During April as Compared with
"During April there was an increase from March of more
than the usual seasonal amount in the level of general
business activity in New England," it is noted by the
Federal Reserve Bank of Boston, which, in its "Monthly
Review" of June 1, adds:
The effects of the acute financial situation in March continued to influence industrial activity in April, but despite this disturbing condition
relatively little change other than seasonal was recorded in the aggregate
level of business activity during the first four months of 1933.
The average daily consumption of raw cotton by New England mills
during April was 3,177 bales, as compared with 2,780 bales in March and
1,923 bales in April 1932;a seasonally adjusted index of cotton consumption
in this District for April was higher than in any month since September
1931, with the single exception of September 1932. The index Is based
upon the average month of 1923-24-25 as 100%, and in April 1933 stood
at 52.9%, compared with 32% in April 1932. The amount of raw wool
consumed in New England mills during April was considerably larger than
In March or in April last year, and an adjusted index for this District in
April was 76.1% of the 1923-24-25 average, as compared with 40.9% in
April 1932 and 51.9% in March.
Between March and April boot and shoe production in New England
usually declines; although there was a decrease of about 3.6% this year,
the decline was smaller than usual. The volume of production during
April slightly exceeded that in the corresponding month last year. Employment and average weekly earnings per person employed increased between
March and April in the shoe Industry of this District.
In April the total value of new building contracts awarded in New England amounted to approximately $6,273,000. as compared with $12,792,000
in the corresponding month of 1932. In March the total value was $6,239,000. The small increase between March and April was less than usual.
Registrations of new automobiles in New England in April were 14.2%
smaller than in April a year ago, and during the first four months of the
current year registrations were 16.2% less than in the corresponding period
last year. The amount of new ordinary life insurance written in this
District during April was 13.2% less than in April 1932, while the cumulative total for January-April inclusive was 15.2% less than in 1932. The
number of commercial failures in this District during April was 26% less

Volume 136

Financial Chronicle

than in that month last year, while total liabilities of these failures dropped
from $6,383,000 in April 1932 to $5,602,000 during April 1933.
April sales of reporting New England retail establishments were about
12% less than in April 1932. Boston department store sales during the
first three weeks of May were 11% less than in the corresponding period
a year ago.

Wage Payments in Chicago Federal Reserve District
Increased 6% During April-Payroll Reports Denote General Recovery in Industrial Establishments in District.
The Federal Reserve Bank of Chicago in its May 31 "Business Conditions Report" said that "industrial payrolls
reported for April denote a general recovery in Seventh
(Chicago) District establishments from the curtailed operating schedules put into effect during March. An increase of
6% in the amount of wage payments," continued the Bank,
"slightly more than offset the March loss of 5
Bank added:
The manufacturing industries, which contributed mainly to the contraction in March, also were instrumental in bringing about the subsequent
recovery. Payrolls in these industries expanded 93. %, more than compensating for the March decline of 8%. Non-manufacturing industries,
which maintained their payrolls during March with a fractional increase,
registered a 2%% decrease for April.
Seven of the ten reporting manufacturing groups and two of the four nonmanufacturing classifications contributed to the April expansion in payrolls. Vehicles. increasing 153. %,reflected mainly expanding operations
In the automobile industry. Metal and metal products increased payrolls
6%, which served partially to offset the 10% loss of the preceding month.
In the food, stone-clay-glass, and the rubber products groups, gains ranged
from 18% to 21%.and were considerably larger than the decreases reported
for March. A rise of 13% in the payrolls of the wood products group offset
practically all of the loss experienced in the preceding month, while a fractional gain in the chemical industries compensated for about one-third of
the March decline. Wholesale and retail trade concerns also reported larger
payrolls in April than in March, the increase amounting to 8%,and an expansion in all types of building and construction work resulted in a payroll
rise of 20%% for this group.
While payrolls were expanding and thus gave indication of a rising trend
in industrial activity, there was no corresponding increase in employment.
The number of employees on April payrolls of the reporting industries remained at the low level reached in March, manufacturing industries contributing a further decline of nearly 1%, while non-manufacturing industries showed an increase of 2%%. The employment decreases, however,
with the important exception of the vehicles group, were limited to those
industries which also reduced payrolls and in most of which the downward
trend of the month was seasonal in nature. The groups in which both
employment and payrolls were reduced covered the textile industries,leather
products, paper and printing, coal mining, and public utilities. In the
last-named group the downward movement was contrary to the usual seasonal trend. In vehicles, a sharp rise in payrolls was accompanied by a
substantial curtailment of working forces. Figures reported for 68 Michigan
automobile concerns showed a decrease of over 9,000 in employment,
while the per capita earnings increased from $17.00 to $21.16 a week.

Industrial Group,

Week Ended April 15 1933.

Per Cent Changes
from March 16.

No. of Number
Firms. Earners.
Metals and products.:
Textiles and eroducts
Food and products
Stone, clay and glass
Wood products
Chemical products
Leather products
Rubber products_y
Paper and printing
Total mtg., 10 groups
Public utilities
Coal Mining













EarnEarners. trigs.


Total non-mfg., 4 groups..
616 113,902 $2,733,000
Total. 14 groups
21850 538,316 $10,378,000
Other than vehicles. y Michigan and Wisconsin. z Illinois and Wisconsin.

Sales of Merchandise at Wholesale and Retail in
Chicago Federal Reserve District During April
Less Than in April Last Year.
"April trends in the wholesale distribution of commodities
were for the most part favorable, reporting groups with the
exception of groceries and electrical supplies recording greater
than seasonal increases or smaller than usual declines from
March, with dry goods showing an expansion in sales,
contrary to trend," reports the Chicago Federal Reserve
Bank in its "Business Conditions Report" of May 31,adding:
The wholesale hardware trade gained 42% over the preceding month, as
compared with an increase in the 1923-32 April average of only 8%. The
decline of 2% in both drug and shoe sales compared with recessions of 5
-year average, while the espansion of 9% in the wholesale
and 6% in the 10
dry goods trade contrasted with an average decrease of 8% for the month.
The declines from March of 4 and 2%,respectively, in the wholesale grocery
and electrical supply trades, on the other hand, compared with slight gains
in 1923-32 average April sales over the preceding month, although the
decrease in the total of electrical supply sales may be attributed to recessions
shown by Chicago firms, the dollar volume sold by firms in other cities
increasing over March. With the exception of these last two named lines,
decreases from the corresponding month a year ago were smaller than in a
similar comparison for March. Sales in the first four months of 1933 totaled

Per Cent Change
From Same Month I ast Year.

Ratio of
Accts. OutAccts. OutColstanding to
standing. lections. Net Sales,
Dry goods
Electrical supplies
In department store trade, the 23% expansion in April sales over
compared with a gain in the 1923-32 average of only 8M %,and was greater
than in April of any of these years except 1930. Furthermore, sales by
reporting stores in the District were only 15% smaller than last year in the
same month, which represents the smallest decline in the year-ago comparison since July 1931. Easter coming in April this year partially
accounted for the favorable trend shown, but there was one less trading
than in the same month of 1932, so that daily average sales were
only 12%
smaller than a year ago and 31%% greater than in March this year when
there were 1 2-3 more trading days. In the monthly comparison.
showed the greatest increase among the larger cities of the District with
50% gain in total sales, but recorded the heaviest decline
-24% from last
April, while Chicago with a gain of only 83 % over the preceding month.
experienced a decline of but 13% from April 1932. Little change took place
In inventories between March and April
-a customary trend for the period
but stock turnover was slightly more rapid than a year ago in the same month
bringing turnover for the year through April to approximately the
rate as in the corresponding months of 1932.


Per Cent Change
April 1933
April 1932.

4 Months
1933 from
Same Per.

Ratio of April
to Accounts
End of March.

Other cities

Stocks End
of Month.









Seventh District
The gain of 42% in April over March in the retail shoe trade was
than in April of any previous year on this Bank's records, going
back to
1926, comparing with an average increase of but 11% in those
years and
with an expansion of only 1% last April. Furthermore, sales of
shoes by
reporting dealers and department stores practically equaled those
in the
same month a year ago, bringing the aggregate for the year
to date to
within 20% of the corresponding period of 1932, as against a
decline of
30% shown for the first quarter of this year.
Sales of furniture and house furnishings by dealers and department
likewise expanded greater than seasonally this April. The total
of these
sales exceeded that in the preceding month by 26%-the 1927-32
gain for the month is 21%-and was only 22% less than for last April,
which is the smallest decline to be recorded in the year-to-year comparison
since February 1932. Installment sales by dealers expanded 54% in
aggregate over March and totaled only 173 % below the dollar volume
last April.
Chain store trade followed other lines of merchandising in their upward
trend during April. Aggregate sales of 13 chains operating 2,489 stores
in the period, were 12% heavier than in the preceding month. Grocery,
drug,five-and-ten-cent store, shoe, cigar, and men's clothing chains shared
in the expansion, with musical instruments alone of the groups included
showing a recession. As compared with April 1932. total sales were
smaller, but average sales per store were only 1% less, since the number of
units operated was 2% fewer than a year ago. Most groups shared in the
decline recorded in this comparison.




smaller than in the same months of 1932 by 16% in groceries, 19% in
25% in drugs, 28% each in dry goods and electrical supplies, and 29% in
hardware. Stocks of electrical supplies registered a slight expansion
April 29 over March 31, but those in other reporting groups were lighter
than a month previous. The majority of lines showed a smaller accounts-tosales ratio at the end of the month than on March 31.

Business Conditions in Philadelphia Federal Reserve
District-Marked Increases Noted Since Early
April in Production and Distribution of Commodities-Large Gains Shown in Output of Factory
Products During April and Early May.
In reporting business conditions in the Third (Philadelphia)
Federal Reserve District, the Federal Reserve Bank of
Philadelphia states that "production and distribution of
commodities in this district have shown marked increases
since early April," which follows "an extremely low level of
activity in March when closing of banks greatly disturbed
the ordinary course of business." The Bank, in its June 1
"Business Review," continues:
Output of factory products showed unusually large gains in April
apparently were well maintained in early May as indicated
by plant operations. Production of bituminous coal declined less than
was expected,
while that of anthracite registered a rather drastic
reduction in April.
While some improvement has been noted in building trades,
the volume of
contract awards had been lagging materially behind the usual
seasonal pace
and has continued over one-third less in the first four
months this year
than last. A rather exceptional gain is noted in building
permits, but the
total is exceedingly low as compared with recent years.
Both retail and
wholesale trade reported extraordinary increases in April,
even after an
adjustment is made for the spring holiday. Other indicators
of distribution
such as freight car loadings, automobile and life insurance sales
more than seasonal gains in the month, but all of them, except automobiles,
are below last year's level. Business liquidations increased sharply from
March to April both in number and the amount of liabilities, but
as compared with last year, commercial failures have been on the decline.
Industrial employment, payrolls and operating time on the whole showed
Increases in April and to some extent in early May. The gains as a rule have
been more pronounced in working time and payrolls than in the number of


Financial Chronicle

additional wage earners. Among the industries and services that reported
increases in April were manufacturing, quarrying, building, retail, and
dyeing and cleaning establishments, while among those that registered
decreases were coal mining, public utilities, wholesale trade and hotels.


Activity during April and through the first part of May showed a considerable expansion in operation and in demand for factory products.
Sales of many important manufactures have increased substantially during
this period which ordinarily reflects the beginning of seasonal slackness.
In several instances the volume of sales reached the highest level this year
and exceeded that of a year ago. Such unusual gains probably reflect in
part the delay in seasonal activity during March and to some extent a
rather rapid risein prices particularly ofraw materials used in manufacturing.
Local reports show that price advances have been rather general; the
sharpest increases since about the middle of April have occurred in textiles,
certain metal, food, chemical and hide and leather products.
Unfilled orders for goods to be manufactured have increased substantially
during the month in many leading industries. In a number of cases, too,
the present volume is larger than at the same time last year. Stocks of
finished goods at factories have been reduced materially during the month
and appear to be much smaller than a year ago. While some individual industries have increased their supplies of raw materials, inventories of this
class of commodities for the manufacturing industry as a whole seem to be
somewhat smaller than at the end of the previous month; they are also
less than a year ago. Collections show gains over the preceding month,
though not as compared with last year.
Factory employment in this district, comprising eastern Pennsylvania,
southern New Jersey and Delaware, registered a gain of about 1% and
payrolls over 4% between the middle of March and April. The number
of hours worked also increased in this period; in Pennsylvania, for example,
employee-hours worked in about 75% of all reporting companies rose 7%
in April and preliminary reports indicate that there was a further increase
both in payrolls and operating time in the second half of April and the
first part of May.
There was a large increase in the output of factory products during April
as compared with a record low level reached in March when productive
activity was greatly affected by the bank crisis. Our index of output,
which covers about two-thirds of all manufacturing in this district and
which makes allowance for the number of working days and seasonal
changes, rose from a low level of about 52% of the 1923-25 average in
March to 59 in April. The most pronounced increases occurred in some
of the most important industries such as metals, textiles, building materials,
• leather, tobacco and food products. In normal times, the spring activity
In manufacturing usually begins in February and reaches its peak in March;
thereafter a seasonal recession takes place, a fact which has not been typical
this year. Compared with a year ago, the level of manufacturing production in this district was only about 3% lower.
Most of the individual industries reported exceptional increases in the
output of their products during April. Increases are especially significant
in industries which represent the two most important groups in this district
—fabrication of metals and the manufacture of te ctile products. Orders for
textile goods have been quite diversified, while demand for iron and steel
products has been coming largely from automotive and miscellaneous industries, there having been no pronounced buying by railroads.
While the general volume of factory production continues smaller than in
other years, there are several individual industries particularly in the textile
group that reported higher operations in April than a year ago, and in
the case of silk goods, hosiery, underwear, and shoes, the volume of production was greater in the first four months this year than last.
Consumption of industrial fuel and power increased noticeably in April
so that production of bituminous coal and fuel oil showed improvement.
The industrial use of electrical energy, when computed on the basis of
working days. rose 8% more than usual from March to April. As a result
the decline in the output of electric power was noticeably smaller than is to
be seasonally anticipated.

Business in San Francisco Federal Reserve District
Moved Vigorously Upward During April, According
to Isaac B. Newton of San Francisco Federal
Reserve Bank.
Isaac B. Newton, Chairman of the Board and Federal
Reserve Agent of the Federal Reserve Bank of San Francisco, states that "Twelfth (San Francisco) District business
moved upward vigorously during April, accompanying the
Nation-wide recovery in activity. Increased activity not
only made up for the decline of March," Mr. Newton continued, "but carried many seasonally adjusted production
and trade indexes to points higher than in February of this
year. Many commodities important in this district benefited from the general rise in prices. There was considerable
improvement in employment conditions and aggregate wage
payments also increased substantially." Under date of
May 23 Mr. Newton further said:
Low temperatures and less than the normal amount of rainfall retarded
the progress of the 1933 agricultural season somewhat during April. Forage
on lower livestock ranges was inadequate, necessitating more than the
usual amount of supplemental feeding. Cattle remained in fair condition,
however, but early lambs matured slowly. Some difficulty in securing
credit for fattening these animals in feedlots was reported. Although this
bank's index of the value of agricultural products sold decreased further to
a new low level during the first quarter of 1933, there was more than the
usual increase in marketing activity in April, accompanied by rising prices
for farm products.
Daily average output of both crude and refined oils increased during
April, but changed little during the first half of May. Production remained
considerably lower than in the corresponding period of 1932. Lumbering
expanded more than seasonally during April, partly as a result of increased
demand for building materials in southern California. Awards of contracts totaling $44,000,000 for work on the San Francisco-Oakland Bay
Bridge and Metropolitan Water District of Southern California projects
greatly increased the total value of engineering construction. Mining
activity was stimulated by higher prices for non-ferrous metals.
A sharp increase in the value of department store sales during April more
than made up for the decline during March, after allowance for the stimulus
given to April sales by the occurrence of Easter in that month and for other
seasonal factors. Sales were not far below those of April 1932. Wholesale
trade which had increased during March, when most other measures of
business were declining, expanded considerably further during April.

June 3 1933

Seasonally adjusted freight carloadings and automobile sales moved upward
from low levels, while intercoastal traffic remained unchanged.
Credit conditions in the Twelfth District improved further during the
four weeks ending May 17. Banking reserves were increased by a $10,000,000 favorable balance of payments with other parts of the country, and
by $13,000,000 of United States Treasury expenditures in this area in
excess of collections: Not only was the supply of funds thus increased,
but the demand was reduced by a further return of currency amounting to
$22,000,000. These changes enabled member banks to pay off $36,000,000
of their borrowings at the Reserve Bank and, in addition, to build up their
reserve deposits by $9.000,000. A large part of the inflow of funds from
commercial and financial transactions with other districts originated when
local banks sold for cash in national markets,substantial amounts of United
States securities which they had received by allotment from the Treasury's
May 2 financing. Since the 86,000,000 of securities received from the
Treasury were paid for with $67,000,000 of deposit credit and $6,000,000
in maturing obligations, only $13,000,000 of cash was required for their
purchase. There was little change in time or net demand deposits or
reporting member banks during the four weeks reviewed, although loans
continued to decline.

Lumber Orders Heaviest Since April 1931—Production
and Shipments Also Gain.
Lumber orders booked at the sawmills during the week
ended May 27 1933 slightly exceeded those reported for the
previous week and were the heaviest since April 1931;
production and shipments were respectively 3% and 5%
greater than the week before and exceeded all weeks since
November 1931, according to telegraphic reports to the
National Lumber Manufacturers Association from regional
associations covering the operations of 644 leading softwood
and hardwood mills. Orders totalled 238,792,000 feet;
shipments were 189,893,000 feet and production, 146,030,000 feet. For the 21 weeks of the year to date, orders
were 4% in excess of those received during similar period of
1932; softwoods being 4% greater, and hardwoods, 5%
more. The Association also added:
Production during the first 21 weeks of 1933 was 93% of last year's
output; shipments were 91% of similar 1932 period.
All regions showed excess of orders over production the week ended
May 27, softwoods totalling 58% above and hardwood orders being 2g
times production. Production was 17% greater; shipments 41% heavier,
and orders 85% heavier than in the corresponding week of 1932. All
regions shared in the excess of orders over last year's and all showed heavier
Unfilled orders at the mills on May 27 1933, were the equivalent of
22 days' average production of the reporting mills, compared with 15 days'
a year ago. The 1933 record is the best since May 1930.
Forest products carloadings at 21.387 cars during the week ended May 20
were the heaviest since the week ended Nov. 14 1931. They exceeded
loadings in the corresponding week of 1932 by 2,816 cars but were 12,247
cars below similar week of 1931.
Lumber orders reported for the week ended may 27 1933. by 419 softwood mills totaled 212,192,000 feet, or 58% above the production of the
same mills. Shipments as reported for the same week were 164,975,000
feet, or 23% above production. Production was 134,184,000 feet.
Reports from 237 hardwood mills give new business as 26,600.000 feet,
or 125% above production. Shipments as reported for the same week were
24.918,000 feet, or 110% above production. Production was 11,846,000 ft.
Unfilled Orders.
Reports from 378 softwood mills give unfilled orders of 587,784,000 feet,
on May 27 1933,or the equivalent of 22 days' production. The 533 identical
mills (softwood and hardwood) report unfilled orders as 666,397,000 feet
on May 27 1933, or the equivalent of 22 days' average production, as compared with 444,342,000 feet, or the equivalent of 15 days' average production on similar date a year ago.
Last week's production of 405 identical softwood mills was 129,208,000
feet, and a year ago it was 108,813,000 feet; shipments were respectively
161,407,000 feet and 118,619,000; and orders received 203,931.000 feet and
111,706,000. In the case of hardwoods, 181 identical mills reported production last week and a year ego 9,635,000 feet and 9,692,000; shipments
20,357,000 feet and 10,680,000; and orders 21,653,000 feet and 10,100,000
West Coast Movement.
The West Coast Lumbermen's Association wired from Seattle the following new business, shipments and unfilled orders for 180 mills reporting for
the week ended May 27
Domestic cargo
Coastwise and
Domestic cargo
delivery. __ _ 55,915,000 delivery _ — -207,190,000 intercoastal. 26,939,000
89,273,000 Export
16,445,000 Foreign
82,404,000 Rail
33,675,000 Rail
378,873,000 Total
112,859,000 Total
Production for the week was 73,645,000 feet.
Southern Pine.
The Southern Pine Association reported from New Orleans that for 114
mills reporting, shipments were 43% above production, and orders 71%
above production and 19% above shipments. New business taken during
the week amounted to 46,056.000 feet. (previous week 38,291,000 at 106
mills); shipments 38,541,000 feet, (previous week 35,053,000); and production 26,863,000 feet. (previous week 25,899,000). Production was
42% and orders 72% of capacity, compared with 41% and 61% for the
previous week. Orders on hand at the end of the week at 111 mills wore
93,897.000 feet. The 111 identical mills reported an increase in production
of 10%, and in new business an increase of 84%, as compared with the
same week a year ago.
Western Pine.
The Western Pine Association reported from Portland, Ore., that for
106 mills reporting, shipments were 29% above production, and orders
56% above production and 22% above shipments. New business taken
during the week amounted to 49,770,000 feet, (previous week 58,547,000
at 116 mills); shipments 40.926,000 feet, (previous week 37,331,000);
and production 31,809.000 feet, (previous week 29,923,000). Production
was 25% and orders 39% of capacity, compared with 22% and 43% for
the previous week. Orders on hand at the end of the week at 105 Mills

Financial Chronicle

Volume 136

were 149.878,000 feet. The 104 identical mills reported a decrease in
production of 5%, and in new business a gain of 55%, as compared with
the same week a year ago.
Northern Pine.
The Northern Pine Manufacturers of Minneapolis, Mimi., reported
production from 7 mills as 1,524,000 feet, shipments 3,062,000 feet and
new business 2.428.000 feet. The same mills reported production 8%
more and new business 53% more than for the same week last year.
Northern Hemlock.
The Northern Hemlock and Hardwood Manufacturers Association, of
Oshkosh, Wis., reported softwood production from 12 mills as 343,000
feet, shipments 1,081.000 and orders 1.079,000 feet. Orders were 18%
of capacity compared with 17% the previous week. The 11 identical mills
reported a gain of 178% in new business, compared with the same week a
year ago.
Hardwood Reports.
The Hardwood Manufacturers Institute, of Memphis. Tenn., reported
production from 225 mills as 11,471,000 feet,shipments 23,290.000 and new
business 24,094.000. Production was 25% and orders 53% of capacity,
compared with 21% and 45% the previous week. The 170 identical mills
reported production 2% less and new business 100% greater than for the
same w ek last year.
The Northern Hemlock and Hardwood Manufacturers Association, of
Oshkosh. Wis., reported hardwood production from 12 mills as 375.000
feet, shipments 1.628.000 and orders 2.506.000 feet. Orders were 62%
of capacity, compared with 39% the previous week. The 11 identical mills
reported a gain of 68% in production and a gain of635% in orders,compared
with the same week last year.

Automobile Production April 1933, Compared with
Preceding Months.
April factory sales of automobiles manufactured in the
United States (including foreign assemblies from parts made
in the United States and reported as complete units or
vehicles), based on data reported to the Bureau of the
Census, consisted of 181,029 vehicles, of which 153,330 were
passenger cars, 27,308 trucks, and 391 taxicabs, as compared
with 118,609 vehicles in March, 148,326 vehicles in April
1932, and 336,939 vehicles in April 1931.
The table below is based on figures received from 120
manufacturers in the United States, 33 making passenger
cars and 87 making trucks (nine making both passenger
cars and trucks). (The total number of manufacturers
heretofore reported as 144 has been reduced due to certain
establishments going out of business, discontinuing manufacture of automobiles, or being merged with other establishments). Figures for taxicabs include only those built
specifically for that purpose; figures for trucks include
ambulances,funeral cars,fire apparatus, street sweepers, and
buses. Canadian figures are supplied by the Dominion
Bureau of Statistics.

United States.
Year and


Trucks. cabs.:

FassenTotal. per Cars Trucks.






834,781 168,235










Total (year). 2,389,738 1,967,055 416,648



65,093 17,528


Total(4 mos.) 1,005,132

Total(4 mos.)





s. 94,085
















Total (year)_ 1,370,678 1,134,372 235,187





September -..._





108,321 21,718
91,340 15,333
99,885 *18,064
153,330 27,308



50,718 10,098


452,876 82,423 1,20* 21,543 18,830 2,713
TOW(4 mos.) 536,507
* Revised. a Includes on y factory-built taxicabs, and not private passenger cars
converted into vehicles for hire.

Divisions of General Motors Corporation Increase
Wages of 100,000 Employees 5%.
Announcement has been made by Lawrence P. Fisher,
Vice-President of the General Motors Corp. and President
And General Manager of the Cadillac Motor Car Co. that a
5% pay increase authorized by Alfred P.Sloan,Jr., President
of General Motors, will affect 100,000 wage earners employed


in the various divisions of the company. Associated Press
advices from Detroit, Mich., June 2, continue:
In the majority of plants controlled by the corporation, the wage increases
went into effect yesterday, company officials said.
Advances in wages were announced to-day for employes of Cadillac
Motor Car Co., employing 3,000; Fisher Body Corp., 32.000; Chevrolet
Motor Co., 10,000; Pontiac Motor Co., Frigidaire Corp. and Inland Manufacturing Co., all units of the General Motors Corp.
No estimate of the total increase in payroll disbursements was available
from company officials. The increase is a partial restoration of previous

Tire Prices Increased-Pennsylvania Rubber Co.
Announces 5% Advance.
Announcement has been made by W. 0. Rutherford,
President of the Pennsylvania Co., that effective May 29
tire prices have been advanced 5%. The company, which
was one of the few tire concerns to report a net profit for
1932, sells only to the public and not to car manufacturers.
The company's factory is working 24 hours daily and seven
days a week, according to Mr. Rutherford.
The Pharis Tire & Rubber Co. of Newark, Ohio, has
announced an increase of 20% in its retail tire prices.
Chrysler Corp. Reduces Prices of Its Models.
The De Soto Motor Co., a division of the Chrysler Corp.,
has reduced prices $30 to $100 according to a Detroit dispatch. The new prices range from $665 to $875. All standard
models were cut $30 and custom models $40 to $100.
Reductions of $50 to $110 have been made on the Chrysler
Six and Royal Eight lines. List prices of the Chrysler Six
line now range from $745 to $945 and for the Royal Eight
from 95 to $1,125.
Prices of the Chrysler Imperial line have been cut $80 to
$100 the new list prices ranging from $1,295 to $1,495.
Mid-West Distribution of Automobiles According to
Federal Reserve Bank of Chicago-Gain in Sales
by Distributors and Dealers During March Continued During April-Furniture Manufacturers'
Shipments Larger.
"Sales of automobiles by both distributors and dealers in
the Middle West continued to gain in April, despite the heavy
increases shown in March," according to the Federal Reserve
Bank of Chicago,"and for the second successive month the
number of new cars sold at retail was larger than a year ago."
In its "Business Conditions Report" of May 31, the Bank
The smaller decline from April last year registered in the number of new
cars sold at wholesale than in their value and the increase in number of
sales at retail as against the decrease shown in their value, are in part a
reflection of variations in price ranges of certain makes of cars as between
this year and last. Stocks of both new and used cars were somewhat heavier
at the end of April than a month previous, whereas decreases are usual for
the period, but they remained considerably smaller than a year ago. Data
on deferred payment sales for 23 dealers indicate a slight rise in the ratio
to total sales, from 48% in March to 49% in April, although the ratio
reported by these same dealers for April 1932 amounted to 56%.
(Changes in April 1933 from Previous Months.)
Per Cent Change From

Companies Included.

March 1933. April 1932. March 1933 April 1932.
New cars:
Number sold
Number sold
On hand April 29
Used cars:
Number sold
Salable on hand





















With regard to orders booked by furniture manufacturers,
the Bank said:
Operations of furniture manufacturers reporting to this bank were accelerated during April. shipments expanding 15% over the March volume,
-a reflection in
despite the decline in orders booked a month previous
part of the 29% increase in current orders. These gains were contrary to
trend, as were the declines experienced in March. Unfilled orders, however,
though increasing during the month approximately 4% in the aggregate,
were nevertheless markedly reduced in the comparison with current orders,
the ratio of 67% being 17 points under that of a month previous. Operations
averaged 30% of capacity, as compared with 33% in March and 41%
year ago.

International Wheat Conference Opened in London
on May 31 Following Geneva Parley Which Ad-Agreement Reported Reached.
journed May 17
In London the current week the International Wheat
Conference was resumed, in the hope it was stated, of reaching an agreement on restricted production before the opening
on June 12 of the World Monetary and Economic Conference. Yesterday (June 2) United Press advices from London


Financial Chronicle

The four leading wheat-producing Powers definitely agreed to-day to
restrict acreage and overcome the problems of surplus crops.
The delegates, representing the United States, Canada, Australia and
Argentina, however, had not yet reached the stage of deciding the exact
percentages for each country.
It was generally agreed the restriction should be for two years.

The present London parley follows the international
Wheat Conference held at Geneva in May. In advices
from London on May 28 the New York "Times" stated that
useful preliminary work was done early at Geneva, but the
meetings there came to a standstill a fortnight ago because
none of the delegates was empowered to commit the respective governments to definite decisions. The London Conference, had previously been scheduled for May 29, but the
change in the date to May 31 was announced on May 30.
Under date of May 31 Associated Press accountsfrom London
Instructions were received from Sydney to-day by the Australian delegation at the International Wheat Conference that Australia would not participate in an agreement to limit wheat acreage. The stand failed, however,
to disturb the hopeful attitude of the American delegation, and the conference set its advisers to wotk on a draft program.
Henry Morgenthau, Sr., chief of the American group of experts, and his
colleagues expressed the belief that an agreement could still be reached for
the control of wheat production by the time the World Economic Con•
ference gets under way June 12.
Stanley M. Bruce, the Australian High Commissioner, announced at the
first formal session of the four-power conference that his government could
not participate in a proposed international scheme for limiting production
of the cereal.
The American delegates are understood to take the view that Australia
is bargaining for an arrangement whereby that country would not have to
restrict production as drastically as Canada and the United States.
At the morning meeting where the spokesman of each country outlined
his position, the Canadian delegation said that it must await the arrival
at London of Prime Minister Bennett before committing itself.
The harmony between Argentine and United :3tates policy on the wheat
problem, which developed at Geneva in the earlier discussions, became
more apparent here as the Argentine spokesman expressed his willingness
to co-operate to the fullest extent with the other great wheat-producing
countries for solving the question of world grain surplus.

Indicating on May 30 that delegates to the conference are
hopeful that some plan can be drawn up agreeable to each of
the principal producing nations, Associated Press accounts
that day added:
Since the harvest in the United States and Canada is imminent, and sowing for next season's crop already has begun in the Southern Hemisphere,
it is improbable that any plan could be made effective before 1934.

The adjournment of the Geneva Conference on May 17 according to Geneva advices to the "Times," was marked by
the publication of a long communique which, said the
"Times" message, gave no details of the plan for acreage
reduction, which had been reported the previous day, but
breathed confidence that this question would be definitely
solved &ion. In United Press advices from Geneva May 18
to the "Wall Street Journal" it was stated:
Delegates to the wheat conference have agreed on a secret aide memoire
covering acreage reduction and creation of an international control board.
The agreement was put into the form of a memoire pending approval of
the respective governments.
The memoire covers four main points:
1. Reduction of acreage as the most feasible way to increase world price.
2. Each government will decide the manner of obtaining reduction.
3. Rejection of the practicability of the export quotas system.
4. Creation of an international control board, probably with headquarters
in London, to supervise the reduction agreement.

As was noted in our May 13 issue, page 3247, the League
of Nations Economic Committee's consultation of experts
of the United States, Canada, Australia and Argentina on
the wheat exports problem, began at Geneva on May 10,
in preparation for the London Economic Conference. As to
the concluding session of the Geneva Conference and the
adoption of the communique we quote the following from
the Geneva advices May 17 to the "Times":
After stressing that the wheat problem was the main key to world recovery, the communique says:
"The problem can be solved only by international action. The three
main measures for this international action, which should be conceived as
something provisional, would be: (a) Limitation of production and possibly of exports; (b) liquidation of stocks; (c) maintenance of a reasonable
import mzrgin in European importing countries.
"The experts thoroughly examined the first two points and will resume
conversations in London on May 29 after having consulted their governments. Thanks to the progress already made, it is hoped definite conclusions may then be reached.
"Compared with the London wheat conference of May 1931, the present
meeting admits of a new element of the greatest importance: on the American side there exist legal possibilities for co-operation."
Much of the communique is devoted to an effort to bring European
producers into eventful accord and, above all, to persuade big European
importers to facilitate a solution by tariff reductions. There would seem to
be little point to all this unless the overseas countries anticipated agreement
among themselves. The experts point out that wheat acreage in European
importing countries increased 9% in 1930 and say this resulted from keeping
home prices high, in some instances four times the world price.
The experts explain that the four large exporting countries are "quite
prepared to take into account the desire of European countries to secure
adequate living conditions for agriculturists." They have no intentionof
demanding abandonment or modification of protectionist policy that Is
deep-rooted in national sentiment, but merely wish to ask Importing countries to apply this policy with necessary moderation.

June 3 1933

They proceed to give many arguments as to why Europeans should do
this in the general interest.
Under protectionism, "in exporting countries a disastrous price level
almost entirely wipes out purchasing power of population," say the experts.
"Wheat is the foundation of the economic edifice. . . .
every measure tending to reduce the difficulties of the wheat trade will be
a powerful remedy for the agricultural crisis—that is to say, for the crisis
In general. . . . To judge from the disastrous price level, it might be
thought there was an enormous overproduction, but if the figures for wheat
production and consumption are compared and analyzed it will be found the
annual surpluses do not represent the difference in quantity which might be
expected in view of the remarkable drop in prices.
"In these circumstances the difficulties in the way of readjusting production and consumption should not be insurmountable," they continue.
"The actual overproduction is comparatively small. But the wheat crisis
takes the form of an accumulation of exportable stocks,concentrated mainly
in the United States and Canada. The fact that this accumulation has
coincided with a number of abundant harvests in big producing countries
caused a glut on the market and surplus stocks are seriously affecting world
It is an open secret that the ability to dump these stocks on the world
market has been one of the best cards in the hands of Henry Morgenthau,
Sr., head of the American delegation, in pushing acreage reduction and other
American proposals. It is likely to be useful, too, in bringing Europeans
Into line.

World Has Record Stocks of Wheat.
Stocks of wheat available for export of carryover In the

principal exporting countries on May 1 totaled 774,000,000
bushels, or about 49,000,000 bushels more than on May 1 1932,
and stocks in the principal importing countries of Europe
were also larger on May 1 than a year ago, says the Bureau
of Agricultural Economics in its report on world wheat prospects for May, according to an announcement issued May 27.
The Danube Basin countries and Russia are reported to be
the only large wheat producing areas where stocks are relatively small.
World shipments have declined rapidly during the last six
weeks, and in April were 21,000,000 bushels less than for
April 1932, says the Bureau, adding:
It seems unlikely that world shipments and consumption will increase
sufficiently during the remainder of the crop year to prevent the world
carryover of wheat being larger than the record carryover as of July 1 1932.

The Bureau says that the recent rise of wheat prices "has
been closely associated with rising prices of other commodities," due "primarily to the expectation of inflation and improving business conditions, but only in part to any actual
depreciation of the dollar in the foreign exchanges." The
Bureau continued:
Chicago wheat prices have risen about 50%, while the rise of the dollar
value of the French franc (still on the gold standard) has amounted to only
about 17%. But wheat prices have also been affected' by the poor outlook
for the winter wheat crop in the United States.

Plan for Improving Cotton Industry to Be Proposed
by Cotton Mill Heads.
The cotton textile industry has organized to study the application of the Farm Adjustment Act to its business, and
has launched an immediate survey within the industry to
submit recommendations to the Agricultural Adjustment Administration, an announcement issued by the United States
Department of Agriculture, May 26, said, continuing:
Leaders in the industry conferred at length, May 25, with Administrator
George Peek and Co-administrator Charles Brand, discussing in a general
way the situation of the cotton textile business and its relation to the provisions of the new Farm Act. Those attending the conference represented
the majority of cotton mills in New England and the South.

George A. Sloan, President of the Cotton Textile Institute,
stated, following the conference, that "90% of the textile
industry is now educated to the point where it will co-operate
in any reasonable plan for improving conditions in the industry."
Those conferring with Administrator Peek and Co-administrator Brand, according to the announcement, included:
T. M. Merchant, of South Carolina, President of the American Cotton
Manufacturers' Association, which represents all Southern mills; Ernest
Hood, of Massachusetts, President of the National Association of Cotton
Manufacturers, representing New England mills; George Sloan, President of
the Cotton Textile Institute, representing mills in both the New England
area and the South; Colonel G. Edward Buxton, New England manufacturer; Cason J. Callaway, former President of the American Cotton Manufacturers' Association and President of a large group of Georgia mills, and
Robert Stevens, formerly a New York merchant and a representative of mill
interests of New England and the South.

Petroleum and Its Products—President Roosevelt Decides to Include Oil Control Measure in General
Industry Recovery Bill to Facilitate Action—East
Texas Wells Closing as Wide Open Flow Exhausts
Pressure—Commission Orders Tests Prior to June
12 Hearing—Oklahoma Refuses to Increase Allowable at Present Prices.

Important developments in Washington during the week
affecting the petroleum industry were featured by Secretary
of the Interior Ickes' announcement Thursday before the

Volume 136

Financial Chronicle

House Ways and Means Committee that President Roosevelt desired that an amendment be made to the Industries
Control Bill which would give him supervision over the oil
industry, and that the Marland Bill be dropped for the
present. This will have the effect of speeding Governmental
action, it is believed.
The amendment as drafted to meet the wishes of the President was read to the House Committee. It follows: "For
the oil industry, in addition to the powers granted the President concerning codes of fair competition, agreements and
licenses, he is authorized to prescribe regulations to supplement State conservation legislation regulating the production
of petroleum, to allocate equitably the national market
demand for petroleum and the products thereof among the
oil-producing states and between domestic production and
importations and to prohibit the transportation into interstate commerce of petroleum and the products thereof produced or withdrawn from storage in violation of any State or
Federal law or the regulations prescribed thereunder."
The President's expressed desire served the purpose of
causing the immediate suspension of consideration of the
Marland bill, which would have given Secretary Ickes the
control now transferred directly to the President.
Ickes declared that the wide powers as outlined are necessary for the President, adding that "it is necessary that the
power be lodged in the Government because the States have
not been able to meet the situation."
The Secretary declared that many oil producers would
undoubtedly express preference for the Marland Bill and its
provisions, but added significantly that "the amendment is
acceptable to the President."
The refusal of a three-judge Federal Court in Texas to issue
an injunction restraining the Railroad Commission from enforcing its present East Texas allowable of 791,201 barrels
daily has left the Texas situation unchanged, except for the
threat of pool exhaustion which is carried in the fact that
hundreds of wells have been closed down due to the ceasing
of bottom hole pressure, caused by the wide open flow.
Belief has been expressed that under present production
schedules the wells will be exhausted at the rate of 1,000
per month.
Because of the seriousness of this aspect of the situation,
the Railroad Commission has ordered that tests be made of
wells under wide open flow conditions, and that on June 12
a hearing be held to determine whether or not the present
order is creating waste.
A cut in East Texas production will have the effect of
causing prices to advance immediately, it is believed. The
general price is now 25e. throughout the State, the 100.
price having been sustained for but a short period following
the issue of the large production order which, while theoretically limiting output to less than 800,000 barrels daily, really
brought about production averaging 1,000,000 barrels daily.
The disruption of the Texas price structure was reflected in
other fields throughout the midcontinent area, and in other
oducing centers.
The Oklahoma Corporation Commission, recognizing the
national status of the industry, has refused to permit an
increase in the Oklahoma City field output, despite the fact
that nominations have been filed for an additional 100,000
barrels daily. The Commission held that the production
and sale of crude at 25c, a barrel is wasteful.
The Texas situation has had reverberations abroad, as
the Rumanian oil producers on Thursday lifted the restriction previously imposed on output and maintained under
agreement with world producers. The Rumanian officials
hold that the United States had violated the agreement and
had thereby jeopardized the possibility of an advance in
world prices. The Rumanian production may advance to
22,000 metric tons a day, from the former restricted level
of 18,000 daily.
There was a slight decline in national production for the
week ended May 27, the American Petroleum Institute
declares. The daily average output was 2,634,550 barrels,
a drop of 70,800 barrels from the daily average of the previous
No crude price changes were reported this week.
Prices of Typical Crudes per Barrel at Wells.
(All gravities where A. P. I. degrees are not shown.)
Bradford, Pa
$1.37 Eldorado, Ark., 40
$ .52
.85 Rusk, Tex., 40 and over
Corning, Pa
.47 Salt Creek, Wyo., 40 and over -_-- .23
.42 Dant Creek
Western Kentucky
Mid-Continent, Okla., 40 and above .25 Midland District, Mich
Hutchinson, Tex., 40 and over_
. . Sunburst, Mont
.25 Santa Fe Sprgs., Calif., 40 and over .75
SpindeltoP, Tex., 40 and over
.25 Huntington, Calif., 26
Winkler, Tex
Smackover, Ark., 24 and over
.20 Petrone, Canada



The protracted price-war which has kept gasoline prices
around 10c. a gallon in Northern New Jersey has come to
an end, with the posting yesterday (Friday) of advances by
Standard of New Jersey which will return service station
prices to 16.5e., less 2c. for cash. Other companies which
adopted the low prices during the price-war period will
undoubtedly follow Standard's lead and re-establish that
territory on a profitable basis.
In some circles the action of majors in returning to profitable prices is regarded as a victory for the independent
interests of New Jersey, who have steadfastly fought every
price cut during this period, and who have instituted legal
action against a group of the majors. The Independent
Oil Dealers Association of New Jersey has been especially
active in this regard.
The statement issued by the New Jersey Standard accompanying the posting of the increase pointed out that "prices
in New Jersey and certain other areas have been abnormally
depressed, and the present move will return prices to normal
levels. The adjustment will vary at different points, depending on local conditions." The company also advanced
tank car gasoline prices Mc. a gallon to Sc. at Bayonne,
and Xe. to 43 c. at Baltimore and Philadelphia.
The price adjustment is based on cargo-lot prices at seaboard, this being the new process of determining prices, as
adopted by Standard.
It is believed here that the settlement of the New Jersey
situation will react favorably throughout the Metropolitan
area, and that advances may be expected in New York and
New England.
Fuel oils have shown a stronger tendency this week, with
Grade C, bunker, firm at 75c. a barrel, in bulk at refineries,
and Diesel steady at $1.65 a barrel, same basis. The Navy
oil contracts for about 1,850,000 barrels of fuel oil were
allotted this week for the Service's east coast requirements,
and for more than 6,000,000 barrels on the west coast.
There has been a brisker movement in kerosene, with the
price ranging from 4Yic. to Sc. for 41-43 water white in
bulk at refineries.
Gasoline prices in Nebraska will be reduced throughout
the state, following a 2c. cut in Omaha, posted by Sinclair
Refining Co. and Phillips Petroleum Co. on June 1.
Pennsylvania lubricating oils have been active during the
past week, with prices showing a firmer tendency, reflecting
the improved tone noted throughout the industry as President Roosevelt's control bill nears passage in Congress.
Price changes follow:
-Tank car gasoline prices advanced 34 c. to 434c. by smaller
May 29:
companies, and met by Standard of New Jersey and other majors.
June 1:
-Standard Oil Co. of Nebraska, Sinclair Refining Co., and
Phillips Petroleum Co. reduce Omaha gasoline prices 2c. a gallon. Adjustment of statewide basis expected to follow.
-Standard Oil Co. of New Jersey advances tank car gasoline
June 1:
prices c. to Sc. a gallon at Bayonne; hc. to 434c. at Baltimore and
-Standard Oil Co. of New Jersey advances service station gasoJune 2:
line prices in New Jersey, posting advances ranging up to 3.5c. a gallon
In territories where "price wars" have been conducted. The new price
at Newark, N. J.. will be 14.5c. a gallon, cash, at service stations, including 4c. tax.
Gasoline, Service Station, Tax Included,
*$.15 New Orleans
New York
$.152 Cleveland
18 Philadelphia
.19 Denver
.115 San Francisco:
16 Detroit
Third grade
16 Houston
Above 65 octane-- 185
.172 Jacksonville
.12 Kansas City
.133 Premium
15 Minneapolis
125 St. Louts
* Less 2 cents cash discount.
Kerosene, 41-43 Water White. Tank Car, F.O.B. Ltd. Refinery.
N.Y.(Bayonne$.04)j-.05% Chicago
$.02%-.03% New Orleans, ex__ _$.03%
North Texas
.03 Los Ang.,ex_ .04(-.06
Fuel Oil, F.O.B. Refinery or Terminal.
N.Y.(Bayonne)California 27 plus 13
Gulf Coast C
Bunker C
$ .75
$.75-1.00 Chicago 18-22 D_42%-.50
Diesel 28-30 D
1.65 New Orleans C
.60 Philadelphia C
Gas 0 I, F.O.B. Refinery or Terminal.
28 plus 0-L0351,04 32-36 G 0
U. S. Gasoline, Motor (Above 65 Octane), Tank Car Lots, F.O.B. Refinery.
N. Y.(Bayonne)
Standard 011, N.J.
Shell Eastern Pet-$.043j New Orleans ex_ .04-.04%
Motor. U. S__$.05
New York
Stand. 011, N. Y_ .0485 Colonial-Beacon.. 05 California
Tide Water Oil Co .05
z Texas
0460 Los Angeles, ex. .004-.07
Richfield Oil(Cal.) .053
0485 Gull ports
Warner-Quin. Co. .05%
Republic 01.1
.05 Tulsa
Richfield "Golden." z "Fire Chief." $.0485.

Sugar Prices Advanced Ten Points.
It was announced yesterday (June 2) that the California
& Hawaiian Sugar Refining Corp., Ltd., has advanced the
price of refined sugar 10 points to 4.60 cents a pound,effective
at the close last night.


Financial Chronicle

Revised Oil-Control Bill Offered in Senate as Amendment to Industrial Recovery Measure-Bill, Similar
to That Introduced on May 19 in Both Houses,
Would Create Government Official to Administer
Industry and Eliminate Secretary of Interior
Senate Finance Committee Concludes Hearings.
Revised legislation for the control of the petroleum industry was introduced in the Senate on May 26 by Senator
Capper of Kansas. The bill was immediately referred to
the Senate Finance Committee, which on the same day
began hearings on the petroleum situation. These hearings
were concluded on May 29. The new Capper bill closely
parallels the provisions of the Capper-Marland bill, introduced in the House and Senate on May 19, and described
in our issue of May 27, page 3639. The new measure, however, was introduced as an amendment to the National
Industrial Recovery bill, and differs from its predecessor
chiefly in providing that the dictatorship over the oil industry need not be placed in the hands of the Secretary of
the Interior, but shall be exercised by an administrator who
is to be an official of the Government. The revised bill also
eliminates natural gas from the regulatory provisions.
Among the provisions common to both the original and revised Capper bills are that prohibiting inter-State shipment
of petroleum or its products produced in violation of State
conservation laws; that authorizing the administrator to
investigate and announce domestic and export demand for
such products as he may choose; that for regulating imports
and limiting them to the daily average for the final half of
1932; that for a tax of 50 cents a barrel on oil produced in
excess of demand; and that for a tax of Yj, of 1% a barrel on
crude oil produced or imported.
Among the witnesses to appear at the hearings before the
Senate Finance Committee were Secretary of the Interior
Ickes, Representative Marland of Oklahoma, Jack Bialock
of Texas, J. B. Elliott of California and. J. E. Jones of
New York. Secretary Ickes explained that the proposed
measure would prevent transportation of illegally-produced
oil, and that the Government would allocate to the
oil States their proportion of total market demand. Most of
the changes in the oil bill have been made to make it harmonize with the Industrial Recovery measure, he said.
Testimony of other witnesses was quoted, in part, as follows,
in Washington advices to the New York "Journal of Commerce," May 30:
Jack Blalock of Texas, Secretary of the independent association opposed
to monopoly, denied that there is over-production in the east Texas fields
nor the existence of an emergency that "justifies this drastic legislation."
He suggested that the committee follow President Roosevelt, as expressed
in his letter to the oil State governors early in April, and provide for divorcement of pipelines from other branches of the industry.
"There is the strangle hold is the oil Industry," he said. "That would
solve the question for the oil men."
The committee was urged by John B. Elliott of California, to sponsor a
Congressional investigation of the oil industry. Mr. Elliott is president of
the independent association opposed to monopoly.
"If you will do this. Congress will learn of the facts already well known
to the independents," Mr. Elliott said.
Support of the legislation was voiced by I. C. Grimm, representing Gov.
George White of Ohio and the oil and gas associations of Ohio.
"The small producers have exerted every effort to continue in the oil
business, to save their properties and keep their men employed," he said,
"but we find it impossible to continue any longer under the present low
price for crude oil. Unless some legislation is enacted at this session of
Congress to give immediate relief, it will result in a complete shutdown of
all small wells."
Opposing the Capper bill, J. Edward Jones of New York cited Supreme
Court opinions on the subject of Federal control of oil production and gave
views of prominent economists.
"Federal control of the industry inevitably would result in ultimate failure
to a point of disaster," he said. "Blame for such an end would be placed
upon the Administration that sponsored it."
Complete divorce of the transportation facilities from companies interested directly or indirectly in producing, processing or the marketing of
the product transported, Mr.Jones declared, is an effective means of placing
all operators upon an equal competitive basis: of enabling prices to result
purely front the effect of relationship between supply and demand: of
preventing monopoly and thereby bringing stabilization to the industry
and providing for the true convervation of oil.
"Let us solicit the aid of the Department of Justice in obtaining prosecutions for violations of our Federal anti-trust laws with respect to price fixing
tactics," he said, "instead of turning over the industry to a man who admittedly does not know the fundamentals of it and who,therefore, would be
Incompetent to dictate to us. We should regulate and curtail the law violators, not the economic elements of petroleum."

Crude Oil Output Declined During Week Ended May 27
1933, but Exceeds Same Period Last Year-Inventories Fell Off.
The American Petroleum Institute estimates that the
daily average gross crude production for the week ended
May 27 1933 was 2,634,550 barrels, compared with 2,705,350
barrels per day during the preceding week, a daily average
production for the four weeks ended May 27 of 2,680,650
barrels and an average daily output of 2,169,400 barrels
for the week ended May 28 1932.

June 3 1933

Stocks of fuel at all points decreased 95,000 barrels during the week ended May 27 1933 as against an increase of
443,000 barrels during the previous week.
Reports received for the week ended May 27 1933 from
refining companies controlling 91.6% of the 3,856,300barrel estimated daily potential refining capacity of the
United States indicate that 2,288,000 barrels of crude oil
daily were run to the stills operated by these companies,
and that they had in storage at refineries at the end of the
week 32,743,000 barrels of gasoline and 125,257,000 barrels
of gas and fuel oil. Gasoline at bulk terminals, in transit
and in pipe lines amounted to 20,809,000 barrels. Cracked
gasoline production by companies owning 95.4% of the
potential charging capacity of all cracking units averaged
473,000 barrels daily during the week.
The report for the week ended May 27 1933 follows in
Week Ended 1Week Ended 4 Wks. End. Week Ended
May 27 '33. May 2033. May 27 '33. May 28 '32.
North Texas
West Central Texas
West Texas
East CentralTexas
East Texas
Southwest Texas
North Louisiana
Texas (not incl. Conroe)_
Coastal Louisiana
Eastern (not incl. Michigan)
New Mexico
California 2.634,550 2,705.350 2,680.650
-The figures indicated above do not include any estimate of any oil which
might have been surreptitiously produced.
(Figures in Barreb3 of 42 Gallons.)
Daily Refining Capacity
of Plants.


East coast
Ind., Ill, Ify
Inland Texas
Texas gulf
Louisiana gulf.,.
North La.
Rocky Mountain



644.700 638,700 99.1
144.700 135,000 95.0
434,900 424,000 97.5
459,300 390,000 84.9
315,300 177,700 56.4
555,000 542,000 97.7
146,000 142,000 97.3
79,000 88.5
152,000 138,000 90.8
915,100 866,100 94.6

Crude Runs
to Stills.
a Motor
Gas and
Daily Oper- Stocks.
Average. Wed.
496,000 77.7 16,919,000 6,670.000
82,000 60.7 2,167,000
279,000 65.8 8,472,000 3,856,000
220,000 56.4 4,871,000 3,151,000
98,000 55.1 1,717,000 2,213,000
458,000 84.5 5,816,000 6,178,000
113,000 79.6 1,473,000 2,057,000
43,000 54.4
36,000 26.1 1,248,000
463,000 53.5 14,063,000 99,092,000

Totals week:
May 27 1933._ 3,856.3003,532.500 91.6 2,288,000 64.8 c57067000 125,257,000
q Sc,. Sons n2590 91.6 2.266.000 64.1 57 162 non 124 Ann Ann
'k,.., on I wet
a Below are set out estimates of total motor fuel stocks on U. S. Bureau of Mine
basis for week of May 27 compared with certain May 1932 Bureau figures:
58,770,000 barrels
A. P. L. estimate of B. he M. basis, week May 27 1933_6
68,811,000 barrels
U. S. B. of M. motor fuel stocks. May 1 1932
69,135,000 barrels
U. S. B. of M. motor fuel stocks, May 31 1932
b Estimated to permit comparison with A. P. I. Economics report, which is on
Bureau of Mines basis.
c Includes 32,743,000 barrels at refineries, 20,809,000 bulk termina s, in transit
and pipe lines, and 3,515,000 barrels of other motor fuel stocks.

Gasoline Prices Raised by Standard Oil Co. of
New Jersey.
The Standard Oil Co. of New Jersey announced on June 1
that with a view to raising gasoline prices to normal levels
it has made increases in its prices, effective June 2. The
New York "Times" of June 2, in noting the increases, said:
In areas where quotations have been depressed by a price war, particularly in New Jersey, the move will result in an advance of approximately
three cents a gallon in the retail price. The adjustment will vary at different points.
The new price at Newark will be 16.5 cents a gallon, less two cents
for cash, at service stations. This is an advance of approximately 3.5 cents.
A year ago the price was 16.2 cents, not including the 1-cent Federal tax,
which had not been enacted then.
The price of spot gasoline in tank cars has been advanced a quarter
cent a gallon to five cents, f.o.b. Bayonne, N. J. Prices at Baltimore and
43% cents a gallon.
Philadelphia have been advanced to
Marketing areas from Maine to Louisiana are believed to be affected
by the company's move. It is regarded in the trade as a contribution
toward a firmer price structure, and other large companies are expected
to fall in line. For several months the leading companies have been
engaged in a price war with independent marketers of East Texas gasoline
who have been cutting prices.

Standard Oil Co. of New York Advances
Gasoline Prices.
Effective to-day (June 3) an advance of 0.3 cents a gallon
in gasoline prices has been made by Standard Oil Co. of
New York, Inc., throughout New York and New England.
The new price at service stations in New York City will be



Financial Chronicle

14.5 cents a gallon, including 4 cents in taxes, according to
the "Wall Street Journal" of last night.
The company has also met the advance of 3' -cent in the
tank-car price of gasoline made by Standard Oil Co. of
New Jersey, its new price being 5.10 cents, Long Island.
Wire Prices Increased-Brass Prices Also Higher.
The General Cable Corp., following an advance of M and
yi cent a pound in wire prices in the morning of June 1,
announced a second advance that day of M cent a pound
for deliveries in car lots. The new prices are:
Bare wire, 10.50 cents a pound, up 0.625 cent; weather proof wire. 12.375
cents, up 0.625 cent, and magnet wire, 12 cents, up 0.75 cent.

Phelps Dodge Copper Products Corp., Anaconda Wire &
Cable Co. and other copper fabricators have followed the
higher postings on copper wire.
Revere Copper & Brass Co. announced an advance of M
cent a pound in copper and brass products with the exception
of phosphor-bronze, which was raised 1 cent. Welding rod
prices were unchanged.
Monthly Statistics of Tin Exports According to
International Tin Committee.
The International Tin Committee met at the Bolivian
Legation Paris on May 23. A communique issued by the
New York office of the International Tin Research & Development Council on May 25 noted the monthly statistics as
to exports as follows:
SEPT.-DEC. 1932, JAN. TO MARCH 1933 AND APRIL 1933.
Balance at September to January to
Sept. 1
SePt.1 1932.

April 1933.

N. E. 1

•For November 1932 the figure of export for Nigeria has been cor ected to 370
tons (previously reported 295 tons). The total for export for September-December
1932 has now been corrected.
-A plus sign means excess over quota; a minus sign means balance in hand
on quota allowance.

General Advance in Non-Ferrous Metals-Activity
Expands at Higher Quotations.
"Metal and Mineral Markets" for June 1 observes that
favorable reports on the general business situation and
uncertainty as to the ultimate value of the dollar caused
prices for non-ferrous metals to move upward sharply in the
week that ended yesterday. Demand for metals and metal
products seems to be expanding with each fresh advance in
quotations. Operators who favor an orderly rise in prices
are experiencing great difficulty in checking speculative
enthusiasm. Copper during the period scored a net gain
of /0.; lead and zinc advanced about Mc.; tin, 4c. per
pound, and silver, 13/2c. per ounce. The same publication
Copper Advanced to MC.
The market for copper scored a net gain of Kc. in the last week, both
here and abroad. Demand was fairly active in both markets, though
buying interest was more in evidence toward the close of the week than
earlier in the period. Shipments of copper into consumption are increasing as the market is moving into higher ground, and, with output
likely to show no appreciable change over the summer period, operators
believe that the uplift that has taken place is fully warranted. Copper.
it is pointed out, has advanced no more on a percentage basis than the
other major metals. The undertone late yesterday was strong.
Abroad, where inflation of the dollar would have little bearing on prices,
the trend of prices also was upward throughout the period. European
operators believe that a recovery in business in the United States should
stimulate trading in all directions and serve to increase commodity values.
On Thursday, May 25, activity in the European centers was restricted
because of a holiday. Beginning with Monday, May 29, trading abroad
became quite active, and prices realized daily covered a wide spread,
owing to the fluctuating exchange rates. Yesterday business was done
abroad at prices ranging from 7.625c. to 7.75c., c.i.f. basis.
Fabricators experienced good business in copper and brass products
and prices were advanced on two occasions. On May 29 leading interests
announced a general advance of Xc. in copper and brass products. Yesterday, May 31, phosphor bronze quotations were marked up lc., and all
other products .5.6c.
The copper statistics for North and South America for 1932 were issued
during the week and are about in line with expectations.
Lead at 4.10c., New York.
Stimulated by the general upward movement in commodity prices
and the marked advance of security markets, daily buying of lead increased steadily in volume as the past week progressed, reaching a total
of more than 3,000 tons on Monday. Yesterday, following the third rise
in prices during the week, activity diminished somewheat, but nevertheless
a fair volume of business was booked for the day, and the total of sales
for the seven-day period was far above that for an average week, exceeding
10,000 tons. The New York price level of the metal moved up last Thursday to 3.750., the contract settling basis announced by the American
Smelting & Refining Co. on that day. On Monday the company advanced
this basis to 3.90c., and yesterday an advance to 4.10c. was announced.
The price situation in the West was slightly irregular during the period,
ranging from 3.60c. to 3.6250., St. Louis, when the 3.750. level was quoted


in the East, but holding uniformly at 3.75c. on Monday and at 3.950.
Business of the week was well distributed among the various consuming
Interests, with corroders placing the heavier share of the orders. Buying
by the foil interests was slightly less than in the preceding week, but the
purchases by cable, mixed-metal and pipe and sheet manufacturers improved.
Sales for the calendar week ended May 27 totaled about 11,000 tons.
Metal sold for shipment during May. according to statistics circulating
among producers, totaled 24,000 tons; sales for June shipment already
total about 22,000 tons, and those for July shipment have reached about
11,000 tons.
Zinc Again Higher.
The trend of prices in zinc again was upward, sales yesterday going
through as high as 4.325c. per pound, St. Louis, for Prime Western, as
against 3.850. a week ago. The sales for the calendar week ended May 27
totaled 5,200 tons, an excellent week's business. Demand continued
active over the last two trading days. Galvanizers were the principal
buyers, and quite a fair tonnage of forward material was booked during
the week. The strength in concentrate again was a factor, the Joplin
market advancing to $28 per ton.
Active Trading in Tin.
Demand in the domestic tin market was more brick last week than at
any time during the last few years; in fact, late last Saturday morning
trading came to a standstill because all metal available for sale had been
purchased. Despite the holiday on Tuesday, several importers did a fair
day's business, using sterling quotations as a basis for settlement. The
bulk of the business of the week was booked on Thursday and Friday.
On Monday a period of quiet developed, and this prevailed until just
before closing time, when trading picked up markedly for a brief period.
Sales yesterday were moderate in total volume. Prices during the sevenday period moved up from 37c. to 41.50c. for Straits, the higher figure
applying to some business booked early yesterday.
Chinese tin, 99%. prompt shipment, was quoted as follows: May 25.
33.50c.; May 26, 33.625c.; May 27, 34.875c.; May 29, 35.6250.; May 30.
holiday; May 31. 37.750.

Demand Continues to Gather Momentum as Steel
Output Rises to 41%
-Pig Iron and Steel Scrap
Prices Again Advance.
Further gains in production and demand, coupled with
growing strength in prices, are rapidly establishing the iron
and steel industry on the firm footing of a seller's market,
announces the "Iron Age" of June 1. Steel ingot output,
which has had an uninterrupted rise since the third week
in March, now averages 41% of capacity as compared with
38% a week ago. And expected seasonal influences have
not yet come into play to check the forward movement,
adds the "Age," further stating:
The remarkable upswing in tin plate demand has brought output of
that product up to 90% of capacity, with full operations likely to be
attained within a week. Continued expansion of specifications indicates
sustained production for at least two months.
Automotive support of the steel,industry is undiminished. Retail sales
of motor cars, which for long had been concentrated in the Northeastern
section of the country, particularly New York and the New England
States, are now broadening out in the South and other regions.
Miscellaneous steel consumers continue to increase their purchases.
Electrical sheets are more active and tack plate is moving in good volume.
Stamping plants are busier, especially those making kitchenware; electrical
refrigerator makers are taking a heavy tonnage of sheets; and oil supply
Interests are buying steel for development work in the Southwest. Makers
of conductor pipe and eavestrough are manufacturing on a larger scale
to build up their stocks. Plate fabricators are booking tank orders from
both the oil industry and brewers. A Detroit manufacturer has a backlog
of more than 100,000 insulated steel beer barrels and is using 150 to 500
tons of sheet steel a week.
Railroad buying continues to lag so far as orders for rails and rolling
stock are concerned, but growing interest is being shown in steel for equipment repairs. The Pennsylvania's release of 12,460 tons of rails to the
Steel corporation is being rolled at the Pittsburgh district mill, which
resumed operations late last week. A Chicago independent is rolling
3,250 tons for the same line. The New York Central will soon place
about 8,000 tons, and the Norfolk & Western is inquiring for 10.000 tons,
as well as for 6,000 kegs of spikes and a tonnage of tie plates.
Federal construction and road work requiring both structural steel and
reinforcing cars is in the offing, but current lettings are light. Fabricated
structural steel awards, totaling 11,800 tons, compare with 15,500 tons
last week and 3,750 tons two weeks ago. New projects of 20,350 tons
include 15,000 tons for a New York Central viaduct and 2,200 tons for a
brewery stock house in New York City.
Despite the relatively small tonnage now coming from the railroads,
the construction industry and the oil companies
-all three leading consumers of steel in normal times
-May steel bookings were the heaviest
for any month in nearly two years for many companies. Demand for sheets
and strip steel has been stimulated by the recent advances for third quarter.
However, not all companies participated in the advance and at least one
that did has withdrawn its quotations. Apparently these producers are
disposed to defer action on flat-rolled steel, as well as other finished products,
pending definite information on wage rates during that period.
The manner in which the American Iron and Steel Institute reacted
to the industrial recovery bill makes it possible that the first move of the
industry to carry out its part of the program will be a general advance in
wages. A 10% increase in coal miners' wages in conjunction with price
stabilization negotiations in the coal industry is considered significant. awl
Notwithstanding their unqualified support of the principles of the
Industrial control bill, iron and steel producers, as well as consuming
interests, are commencing to voice their dissatisfaction with certain provisions and omissions in the measure, as passed by the House of Representatives.
Absence of machinery to regulate foreign competition is regarded as
incompatible with increases in domestic wages and costs. The licensing
feature, besides being of doubtful constitutionality, is so drastic as to
excite universal apprehension. The employment clauses, it is feared
would invite labor trouble instead of promoting harmony in employeremployee relations, while the tax proposals would impose too heavy a burden
on lower bracket income and discourage investment.
The only important price advance on finished material to be announced
this week was an increase in bolts, effective immediately. Pig iron continues to show strength, with the recent advances in the Valleys established

Financial Chronicle

Direct reflexes of gains in freight car loadings are heavier pig iron and
steel shipments for railroad repair work; the expected placing of 10.000
tons of rails by Norfolk & Western;and the reopening of the Edgar Thomson
rail mill.0
Some farm implement manufacturers who planned to suspend for the
summer will continue production. Automobile output for May probably
will exceed the original estimate of 200,000 by 25,000, with further evidence
that June will be equally as good, and prospects that summer production
will be seasonally strong.
Structural steel also has joined the procession of improvement, awards
for the week going to 17,000 tons, largefy on the strength of 7,400 tons for
a New York apartment and 3.500 tons for an open-hearth building at
Detroit for the Great Lakes division of the National Steel Corp., which is
adding to its steel capacity.
A better outlook for Federal projects also has quickened demand for pipe.
Chicago sanitary district improvements ordered by the Government will
take 10,000 tons of cast pipe. Large inquiries are developing in Eastern
cities, and at Pittsburgh some steel pipe mill schedules have been speeded
up. Bids are being taken by Los Angeles for 4,150 tons of plates; by the
Navy for 1.133 tons of armor plate.
May sales of pig iron by lake furnaces exceeded all expectations, rising
to1150% over April, with tonnage placed so far this year larger than the
entire amount for 1932. Furnaces have accumulated backlogs which probably will carry them,at least at present rate of operations, through the third
quarter. Several additional stacks now are slated for early resumption.
A Pittsburgh foundry has booked orders for 4,200 cast steel car frames.
There has been little abatement in demand for sheets and strip from
automotive, refrigerator and washing machine manufacturers; some northern Ohlolmills have increased their output, anticipating present demand will
hold through June and July. Tin plate, most active of finished steel products, shows further evidence of expansion, with mills now averaging 80 to
85%. Export orders are heavier; one calls for 15,000 tons of tin plate
for pineapple cans.
Steel ingot production last week continued to mount in most districts.
At Wheeling, W. Va., the rate was 80%; Cleveland, 59; New England, 58;
Birmingham, 50; Youngstown. 47; Detroit, 38; Chicago, 37; Buffalo, 33;
Pittsburgh, 27; and Eastern Pennsylvania, 1934 %• Further advances in
some districts are indicated for this week.
This country again increased its favorable balance of foreign trade in
iron and steel in April, when exports rose 19,828 tons to 100,395 tons,
highest in two years. Seventy-three per cent of the April tonnage was
scrap. Imports gained only 5,947 tons to 28,061. Exports for the four
months this year, 301,618 tons, are 112,454 greater than last year; imports,
91.815 tons, are down 42,942 tons.
In practically all finished steel lines in which advances have not already
been announced for third quarter, consumers are pressing for prices, with
mills reluctant to name them until further clarification of Federal industrial
control and Its effect on costs. Some wire mills expect to limit sales to
a, month-to-month basis beginning July 1.
."Steel'."iron and steel price composite this week is unchanged at $28.50:
the finished steel composite remains $45.10; while the scrap composite is
down 4 cents to $9.37.

Steel ingot production in the week ended May 29 is placed
at a shade under 42% of capacity, according to the "Wall
Street Journal" of May 31. This compares with a fraction
over 39% in the preceding seven days and with 34M% two
weeks ago. The "Journal" also reports as follows:
U. S. Steel is estimated at a little over 35%. against 33;4% in the week
before and 2954% two weeks ago. Leading independents are credited with
a rate of about 48%, compared with 453.4% in the preceding week and
401i% two weeks ago.
The following table gives the percentage of production for the corresponding week of previous years, with the approximate changes from
the week immediately preceding:

42 -2%
75 -494

40 -2
92 - H
72 -2

Bituminous Coal Output Continues Well Above the
Corresponding Period in 1932-Anthracite Production Lower.
According to the United States Bureau of Mines, Department of Commerce, production of bituminous coal showed
little change in the week ended May 20 1933, continuing, as
in the past four weeks, well above the corresponding period
of 1932, amounting to 5,050,000 net tons, as compared with
5,080,000 tons in the week ended May 13 1933 and 4,298,000
tons in the week ended May 21 1932. Anthracite output in
Pennsylvania during the week ended May 20 1933 is estimated at 664,000 net tons, a decrease of 60,000 tons, or
8.3%,from the production of the preceding week, and compares with 698,000 tons in the corresponding period last year.
During the calendar year to May 20 1933 there were
produced 112,342,000 net tons of bituminous coal and
17,544,000 tons of anthracite, as against 119,535,000 tons of
bituminous coal and 20,371,000 tons of anthracite during the
calendar year to May 21 1932. The Bureau's statement
Week Ended
May 20

May 13

Calendar Year to Dale.
May 21




Bltum. coal
Weekly total 5,050,000 5,080,000 4,298,000 112,342,000 119,535,000 203,957,000
Daily aver_
945,000 1,006,000 1,714,000
842,000 847,000 716,000
Pa. anthra.-b
Weekly total 664,000 724,000 698,000 17,544,000 20,371,000 28,308,000
Daily aver_ _ 110,700 120,700 116,300
Beehive coke
Weekly total
343,000 2,447,000
Daily aver_ _
a Includes lignite, coal made in o coke, local sales, colliery fuel. b Includes
Sullivan County, washer) coat, dredge coal, local sales, and colliery fuel. c Subklot
to revision. d Revised.
Week Ended

Arkansas and Oklahoma
Kansas and Missouri
New Mexico
North Dakota
Pennsylvania (bituminous)
West Virgins-Southern.b
Other states

May 13

MaY 3

May 14

1,372,000 1,385,000 1,331,000
1,129,000 1,020,000 969,000

May 16

Accompanying the ninth consecutive weekly increase in
steelworks operations, lifting the National average to 43%,
is an:encouraging broadening of the entire iron and steel
market foundation, stated the magazine "Steel." on May 29.
That publication further reported as follows:

41 -2
71 -234
79H -I- 35
80 -135


Steel Scrag..
May 29 1933, $9.75 a Gross Ton.
IBsaed on No. 1 heavy melting steel
One week
$9.67 quotations at Pittsburgh. Philadelphia
One month ago
9.42f and Chicago.
One year ago
36.75 Jan. 3
$9.83 May 9
6.42 July 3
8.50 Jan. 12
11.33 Jan. 6
7.62 Dee. 29
11.25 Dec. 9
15.00 Feb. 18
14.08 Dec. 3
17.58 Jan, 29
16.50 Dec. 31
13.08 July 2
15.25 Jan. 11
13.08 Nov.22



Pig Iron.
May 29 1933, $15.01 a Gross Ton. Based on average of heal° iron at Valley
One week ago
814.56 furnace foundry irons at Chicago.
One month ago
14.10 Philadelphia, Buffalo, Valley and SirOne year ago
$15.01 May 29
$13.56 Jan. 3
14.81 Jan. 5
13.56 Dec. 6
15.90 Jan. 6
15.79 Dec. 15
18.21 Jan. 7
15.90 Dec. 16
18.71 May 14
18.21 Dec. 17
18.59 Nov.27
17.04 July 24
19.71 Jan. 4
17.54 Nov. 1

U. S. Steel.


Finished Steel.
May 29 1933, 1.892o. a Lb.
Based on steel bars, beams, tank plates.
One week ago
1.892o. wire, rails, black pipe and sheets.
One month ago
1.8670.1 These products make 85% of the
One year ago
1.9700. United States output.
1.9480. Jan. 3
1.887e. Apr. 18
1.9260. Feb. 2
1.9770. Oct. 4
2.0370. Jan. 13
1.945e. Dec. 29
2.2730. Jan. 7
2.0180. Dec. 9
2 3170. Apr. 2
2.2830. Oct. 29
2.288c. Dec. 11
2.217o. July 17
2.4020. Jan. 4
2.212c. Nov. 1

•Not available.

. 00ca


June 3 1933


In sales. The "Iron Age" pig iron composite has risen from $14.56 a week
ago to $15-01 a gross ton. Scrap markets continue to show no definite
trend, although a corrective movement in the East has raised the "Iron
Age" composite slightly from $9.67 to $9.75. The finished steel composite is unchanged at 1.892 cents a pound.

5,080,000 4,810,000 4,295,000 6,854,000
724,000 664.000
A SUM non 5.474 ono s nen elm 7 Ign nnn
a Includes operations on the N.& W ,C.& 0., 1. irginian, K.& M.,and
b Rest of State, including Panhandle.

Total bituminous coal
Pennsylvania anthracite

Appalachian Coals, Inc., Increases Wages 10 to 18%
in Four State Region-Approximately 75,000 Miners
More than 75,000 bituminous coal miners in the four-State
Appalachian region received wage increases of 10 to 18%
on June 1, it was announced by Appalachian Coals, Inc..
according to Associated Press advices from Cincinnati, Ohio,
which added:
The scaling upward of pay in Eastern Kentucky, Southwestern Virginia.
Eastern Tennessee and Southern West Virginia was in accordance with
recommendations made by directors of the giant marketing agency May 25.
Officials could not give the average scale nor how far the advances would
go toward making up for pay cuts.
The more than 137 coal mining companies in the selling co-operative
are operating at about 50% of their capacity of 30,000,000 tons annually.
officials said.
The fields in which wage increases became effective to-day include those
of Hazard and Harlan, Ky.; Logan County. West Virginia, and the Southern Appalachian, which embraces Southeastern Kentucky and Eastern
Kentucky. Increases in other fields are expected later.

With regard to the recommendations made by the directors
of the Appalachian Coals, on May 25, Associated Press
advices from Cincinnati, May 26, said:

Volume 136

Financial Chronicle

A call for higher prices and a 10% wage increase went out to the coal
industry of four States from Appalachian Coals, Inc., huge marketing
The wage scales of more than 137 mining companies are involved in
Eastern Kentucky, Southern West Virginia, Southwestern Virginia and
Eastern Tennessee—the region where Appalachian Coals represents the
bituminous coal industry.
R. E. Howe, Executive Secretary of the agency, said he could not accurately state the average wage scale for the region or how far a 10%
raise would go toward restoring normal wages.
Directors representing the major part of the potential 80.000.000 ton
annual output of the agency's membership, approved a resolution saying
that "the present selling prices of coal, and, as a necessary result, the
prices paid for labor, are too low, and that an increase of each resulting
in the larger buying power is a necessary prerequisite to a return to

Wages of 8,000 Miners of Pittsburgh Coal Co. Increased
10%—Other Companies Take Similar Action.
Three large coal companies in the Pittsburgh, Pa., district,
employing over 10,000 men, announced wage increases on


May 27 of 10%. The Pittsburgh Coal Co. announced that
wages of its 8,000 men, employed in 12 mines in Pittsburgh
and one in Kentucky, will be increased 10% voluntarily.
In announcing the increase, J. D. A, Morrow, President,
said that it is the first upward revision in the company's
wage scales since 1926. From the Pittsburgh "Post
of May 29, we quote as follows regarding the increases:
Loaders will receive 3834 to 4934 cents a ton, as compared with the
former rate of 35 to 46 cents. Day workers will be paid $3.80.
The increase was made possible, Mr. Morrow said, by increased demand
for industrial coal in the last two weeks. Present demand now calls for
operation of mines at 65% of capacity, he said.
About 1,000 miners with the Keystone Coal and Coke Co. will be
affected by its 10% pay raise, officials stated. The company operates
five mines.
The Jamison CoaL and Coke Co.,employing about 1,200 men,announcing
a similar pay boost, said "greatly improved conditions in the industrial
situation indicate we will go into capacity operations at all plants within
a short time."

Current Events and Discussions
The Week with the Federal Reserve Banks.
The daily average volume of Federal Reserve Bank credit
outstanding during the week ending May 31, as reported
by the Federal Reserve banks, was $2,208,000,000, a
decrease of $35,000,000 compared with the preceding week
and an increase of $127,000,000, compared with the corresponding week in 1932. After noting these facts, the
Federal Reserve Board proceeds as follows:

of waiting until the following Monday, before which time the
statistics covering the entire body of reporting member banks
in the different cities included cannot be got ready.
Below is the statement for the New York City member
banks and that for the Chicago member banks, for the
current weeks, as thus issued in advance of the full statement
of the member banks, which latter will not be available until
the coming Monday. The New York City statement, of
On May 31 total Reserve Bank credit amounted to $2,218,000,000,
course, also includes the brokers' loans of reporting member
practically unchanged from a week ago. Decreases of S27,000,000 in member
banks. The grand aggregate or brokers' loans the present
bank reserve balances and $6,000,000 in unexpended capital funds, nonweek shows an increase of $72,000,000, the total of these
member deposits, &c., were offset by an increase of $17,000,000 in money in
circulation and a decrease of $15,000,000 in Treasury currency, adjusted.
loans on May 31 1933 standing at $635,000,000 as compared
Bills discounted decreased $7.000,000 at the Federal Reserve Bank of
with $331,000,000 on July 27 1932, the low record for all
Cleveland. $3,000.000 at San Francisco and 1110.000,000 at all Federal
time since these loans have been first compiled in 1917.
Reserve banks. The System's holdings of bills bought in open market
declined $23,000,000 and of Treasury certificates and bills $9,000,000, while
Loans "for own account" increased from $539,000,000 to
holdings of United States bonds increased $10,000,000 and of United States
$611,000,000, while loans "for account of out-of-town banks"
, Treasury notes $27,000,000.
Beginning with the statement of May 28 1930, the text ,remain unchanged at $17,000,000, and loans "for account
accdmpanying the weekly condition statement of the Federal of others" at $7,000,000.
Reserve banks was changed to show the amount of Reserve CONDITION OF WEEKLY REPORTING MEMBER BANKS IN CENTRAL
Bank credit outstanding and certain other items not included
New York.
in the condition statement,such as monetary gold stocks and
May 31 1933. May 24 1933. June 11932.
money in circulation. The Federal Reserve Board's explana6 933,000,000 6,786.000,000 6,635,000,000
tion of the changes, together with the definition of the dif- Loans and investments—total
ferent items, was published in the May 31 1930 issue of the Loans—total
3 427,000,000 3,287,000,000 3.875,000,000
"Chronicle" on page 3797.
On securities
1,733,000,000 1,863,000,000 1,815,000,000
All other
1,694.000,000 1,624,000,000 2,080,000,000
The statement in full for the week ended May 31, in com3,506,000,000 3,499,000,000 2.760.000,000
parison with the preceding week and with the corresponding Investments—total
date last year, will be found on subsequent pages, namely,
U. S. Government securities
2 429,000,000 2,384,000,000 1,777,000,000
Other securities
1,077,000.000 1,115,000,000 983,000,000
3859 and 3860.*
Beginning with the statement of March 15 1933, new Reserve vault Federal Reserve Bank_ __ _ 868,000,000 913,000.000 781,000,000
Cash in
items were included, as follows:
Net demand deposits
5,749,000,000 5,601,000,000 5.065,000,000
1. "Federal Reserve bank notes in actual circulation," representing
the amount of such notes issued under the provisions of paragraph 6 of Section 18 of the Federal Reserve Act as amended by the Act of March 9 1933.
2. "Redemption fund—Federal Reserve bank notes," representing the
amount deposited with the Treasurer of the United States for the redemption of such notes.
3. "Special deposits—member banks" and "special deposits—nonmember banks," representing the amount of segregated deposits received
from member and non-member banks.
A new section has also been added to the statement to show the amount
of Federal Reserve bank notes outstanding, held by Federal Reserve banks
and in actual circulation, and the amount of collateral pledged against
outstanding Federal Reserve bank notes.

Changes in the amount of Reserve Bank credit outstanding
and M related items during the week and the year ending
May 311933, were as follows:

Time deposits
Government deposits


Due from banks
Due to banks



1,356,000,000 1,300,000.000 1,100.000.000

Borrowings from Federal Reserve Bank.
Loanson secur. to brokers & dealers;
For own account
For account of out-of-town banks
For account of others






On demand
On time
Loans and investments—total

481,000,000 413,000,000 306,000,000
154,000,000 150,000,000 103,000.000
1,180,000,000 1,186,000,000 1,353.000,000



TOTAL RES'VE BANK CREDIT_ _2,218,000,000 —1,000,000
Monetary geld stock
4,315,000,000 +1,000,000
Treasury currency adjusted
1,954.000,000 —15,000.000
5,812,000.000 +17,000,000
Money in circulation
2,167,000.000 —27,000.000
Member bank reserve balances
Unexpended capital funds, non-mem508,000,000 —6,000,000
ber depoalta, &c


Returns of Member Banks in New York City and
Chicago—Brokers' Loans.
Beginning with the returns for June 1927, the Federal
Reserve Board also commenced to give out the figures of
the member banks in New York City, as well as those in
Chicago, on Thursday, simultaneously with the figures for
the Reserve banks themselves, and for the same week, instead




333,000,000 526,000,000
302,000,000 390,000,000




343,000,000 244,000.000
208,000,000 193.000,000

Reserve with Federal Reserve Bank.,... 187,000,000
Cash in vault

166,000,000 207,000,000
37,000.000 16,000.000

Net demand deposits
Time deposits
Government deposits


872,000,000 892.000,000
351,000.000 391,000,000

Due from banks
Due to banks

Bills discounted
Bills bought
U. S. Government securities
Other Reserve bank credit

!tweeze (+) or Decrease(—)
May 31 1933. May 24 1933. June 11932.
302,000,000 —10,000,000 —103,000,000
20,000,000 —23,000,000
1,890,000,000 +28,000.000 +315.000,000
7,000,000 +4,000.000



On securities
All other
U. S. Government securities
Other securities

Borrowings from Federal Reserve Bank_



Complete Returns of the Member Banks of the Federal
Reserve System for the Preceding Week,
The Federal Reserve Board resumed on May 15 the
publication of its weekly condition statement of reporting
member banks in leading cities, which had been discontinued

Financial Chronicle

Reserve Board respecting the returns of the entire body of

reporting member banks of the Federal Reserve System for
the week ended with the close of business on May 24:
The Federal Reserve Board's condition statement of weekly reporting
member banks in 90 leading cities on May 24 shows increases for the week
of $44,000,000 in net demand deposits, $7,000,000 in time deposits and
$78,000,000 in reserve balances with Federal Reserve banks, and decreases
of $17,000,000 in loans and investments and $7,000,000 In borrowings from
Federal Reserve banks.
Loans on securities declined $74,000,000 at reporting member banks in
the New York district and $76,000,000 at all reporting member banks.
"All other" loans increased $7,000,000 in the New York district and at all
reporting banks.
Holdings of United States Government securities increased $31,000,000
In the Chicago district and $29,000,000 at all reporting member banks, and
declined $9,000,000 in the St. Louis district. Holdings of other securities
increased $11,000,000 in the Chicago district, $9,000,000 in the St. Louis
district and $23,000,000 at all reporting banks.
Borrowings of weekly reporting member banks from Federal Reserve
banks aggregated $78,000,000 on May 24, the principal change for the
week being a reduction of $7,000,000 at the Federal Reserve Bank of
New York.
Licensed member banks formerly included in the condition statement of
reporting member banks in 101 leading cities, but not now included in the
weekly statement, had total loans and investments of $735,000,000 and
net demand, time and government deposits of $678,000,000 on May 24,
compared with $712,000,000 and $661,000,000, respectively, on'May 17.
A summary of the principal assets and liabilities of the reporting member
banks in 90 leading cities, that are included in the statement, together with
changes during the week and the year ended May 24 1933, follows:

24 1933.
Loans and investments-total__ _ _16,329,000,000

On securities
All other

Increase (+) or Decrease (-)
May 17 1933.
May 25 1932.




-69,000,000 -1,700,000,000


-76,000,000 -691,000,000
+7,000,000 -1,009,000,000


+52,000,000 +1,167,000,000

U. S. Government securities_ _ _ _ 4,963,000,000
Other securities

+29,000,000 +1,141,000,000


Reserve with F. R. banks
Cash in vault
Net demand deposits
Time deposits
Government deposits
Due from banks
Due to banks
Borrowings from F. R. banks













Stock of Money in the Country.
The Treasury Department at Washington has issued the
customary monthly statement showing the stock of money
in the country and the amount in circulation after deducting
the moneys held in the United States Treasury and by Federal Reserve banks and agents. It is important to note that,
beginning with the statement of Dec. 31 1927, several very
important changes have been made. They are as follows:
(1) The statement is dated for the end of the month instead
of for the first of the month;(2) gold held by Federal Reserve
banks under earmark for foreign account is now excluded,
and gold held abroad for Federal Reserve banks is now
included, and (3) minor coin (nickels and cents) has been
added. On this basis the figures this time, which are for
April 30 1933, show that the money in circulation at that
date (including, of course, what is held in bank vaults of
member banks of the Federal Reserve System) was $6,003,473,159, as against $6,319,514,854 on March 31 1933 and
$5,464,626,961, on April 30 1932, and comparing with
$5,698,214,612 on Oct. 31 1920. Just before the outbreak
of the World War, that is on June 30 1914, the total was
only $3,459,434,174. The following is the full statement:


June 3 1933



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7 15





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after the report issued on March 6, giving the figures for
March 1. The present statement covers banks in 90 leading
cities instead of in 101 leading cities as formerly, and shows
figures as of Wednesday, May 24, with comparisons for
May 17 1933 and May 25 1932. Corresponding data by
weeks beginning March 1 will be published, it is stated, in
the Federal Reserve Bulletin.
Licensed member banks formerly included ix the condition
statement of reporting member banks in 101 leading cities,
but not now included in the weekly statement, had total
loans and investments of $735,000,000 and net demand,
time and Government deposits of $678,000,000 on May 24,
compared with $712,000,000 and $661,000,000, respectively,
on May 17.
As is known, the publication of the returns for the New
York and Chicago member banks was never interrupted.
These are given out on Thursday, simultaneously with the
figures for the Reserve banks themselves and covering the
same week,instead of being held until the following Monday,
before which time the statistics covering the entire body
of reporting member banks in 90 cities cannot be got ready.
In the following will be found the comments of the Federal




el v co v v.
















.4 .,0











cc; :15 oi m 66


MhM000 0









0 .1 M .6 .6 M
052 .1. .6
, .6






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4 m , .m,o



le •,.0


g' g Z

4 •







COC.0 V 0 CO N
. .4

N 0 0V
0.0h .
h c0 N co .0 g co
ao 0 0
'0.6 oc7Oci
t C



-sg s , 'go 4
5,:.t..s. .74diOlf

P..79tZi , 0
51r t1 71'
2a-- 0 .gb..°;4',2
-B 4. -6 ?. - - • <1 ca
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CMCC 000




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...-; 2R8g5.%
.E-4 .
•-• 0 4 .4 OA in.,


• Revised figures.
a Does not include gold bullion or foreign coin other than that held by the Treasury,
Federal Reserve banks, and Federal Reserve agents. Gold held by Federal Reserve
banks under earmark for foreign account is excluded, and gold held abroad for
Federal Reserve banks Is included.
b These amounts are not included in the total since the money held in trust
against gold and silver certificates and Treasury notes of 1890 is included under gold
coin and bullion and standard silver dollars, respectively.
c The amount of money held in trust against gold and silver certificates and
Treasury notes of 1890 should be deducted from this total before combining it with
total money outside of the Treasury to arrive at the stock of money in the United
d This total includes $61,919,401 gold deposited for the redemption of Federal
Reserve notes ($1,393,555 in process of redemption). $38,150,336 lawful money
deposited for the redemption of National bank notes ($17,448,989 in process of
redemption. Including notes chargeable to the retirement fund), $3,318,000 lawful
money deposited for the redemption of Federal Reserve bank notes ($45,298 In process
of redemption, including notes chargeable to the retirement fund), $1,350 lawful
money deposited for the retirement of additional circulation (Act of May 30 1908)•
and $55,615,842 lawful money deposited as a reserve for postal savings deposits.
e Includes money held by the Cuban agency of the Federal Reserve Bank of
I' The money In circulation includes any paper currency held outside the continental limits of the United States.
-Gold certificates are secured dollar for dollar by gold held in the Treasury
for their redemption; silver certificates are secured dollar for dollar by standard
silver dollars held in the Treasury for their redemption; United States notes are
secured by a gold reserve of $156,039,088 held in the Treasury. This leserve fund
may also be used for the redemption of Treasury notes 011890. which are also secured
dollar for dollar by standard silver dollars held in the Treasury; them notes are being
canceled and retired on receipt. Federal Reserve notes are obligations of the United
States and a first lien on all the assets of the issuing Federal Reserve Rank. Federal
Reserve notes are secured by the deposit with Federal Reserve agents of a iike
amount of gold or of gold and such discounted or purchased paper as is eligible under
the terms of the Federal Reserve Act, or, until March 3 1934, of direct obligations
of the United States If so authorized by a majority vote of the Federal Reserve
Board. Federal Reserve banks must maintain a gold reserve of at least 40%, including the gold redemption-fund which must be deposited with the United States
Treasurer, against Federal Reserve notes in actual circulation. Federal Reserve
bank notes are secured by direct obligations of the United States or commercial
paper, except where lawful money has been deposited with the Treasurer of the
United States for their retirement. National bank notes are secured by United
States bonds except where lawful money has been deposited with the Treasurer of
the United States for their retirement. A 5% fund is also maintained In lawful
money with the Treasurer of the United States for the redemption of National bank
notes secured by Government bonds.

Volume 136

Financial Chronicle

Henry L. Stimson to Head Permanent Conciliation
Commission Created by Locarno Agreements—
Ex-Secretary of State Accepts Joint Offer of France
and Germany—Will Not Reside in Europe Unless
Dispute Is Referred to Commission by Mutual
Henry L. Stimson, former Secretary of State, has been
offered the Presidency of the Permanent Conciliation Commission created by the Locarno arbitration conventions and
has accepted the post, according to an announcement from
Paris which was confirmed by Mr. Stimson on May 31. The
offer was made by joint agreement of the French and German Governments. The functions of the Commission are to
settle outstanding disputes, but it has no fixed headquarters
and Mr. Stimson's duties will not necessitate his presence
In Europe unless a dispute arises between France and Germany and is referred by mutual agreement to the Commission. A further outline of the work of the Commission follows, as quoted from a Paris dispatch to the New York
"Times" on May 31:
The Arbitration Commission was designed to take conciliatory action in
disputes arising between the signatory Governments, and it was provided
that it might be summoned before any arbitral action was taken by the
World Court.
The duties of the Commission are to elucidate and collect evidence by
snaking investigations, if necessary, in any matter in controversy and to endeavor to bring about an amicable settlement.
France, Britain, Germany, Italy and Belgium, which signed the Locarno
arbitration convention, have the right to appoint one member each to the
Commission. Three additional members of other nationalities also serve on
the Commission. These include Mr. Stimson.
It is provided that the Commissioners themselves should elect their President, but it has already been agreed that Mr. Stimson's acceptance means
his election to the Chairmanship.

Sir John Simon and Sir Austen Chamberlain Praise
U. S. Contributions to Peace—British Foreign
Minister Says United States Has Taken Long Step
in Renouncing Passive Neutral Tradition.
American changes in foreign policy, as indicated in the
recent disarmament message of President Roosevelt and the
pledges made by Ambassador Norman H. Davis at Geneva,
were praised in the House of Commons on May 26 by
British Foreign Minister Sir John Simon and Sir Austen
Chamberlain. Sir John told the House that the pre-war conception of neutrality is now substantially modified, and
added that the reversal of American policy was "historic."
In the future, he said, the idea of the impartiality of neutrals
would disappear whenever the United States decided as to
a wrongdoer. Sir Austen Chamberlain also expressed similar views, and said that he had no more doubt of the good
faith of the American people in selecting their course of
action than of Great Britain's in fulfilling the strict obligations of the Treaty of Locarno. Important passages from
Sir John's address were quoted as follows in London advices
to the New York "Times" May 26:
Speaking with all the weight of his authority as a lawyer, Sir John said
the importance of the United States action was not substantially less because of the limitations put upon it. On the contrary, he defended the
reluctance of the United States to bind herself in advance and said it was
"very characteristically the British way of looking at it."
He suggested, in fact, that it was snore effective than what he called the
Continental method, ivhich used "a most precise and elaborate definition
in cold blood and cold print" to describe the exact conditions under which
action might be taken.
Sir John's speech to-day was a remarkable exposition of the security
problem as affected by American decisions and by the draft disarmament
convention. Recalling Great Britain's incessant difficulties with the United
States during the years of the latter's neutrality in the World War, Sir John
implied that they were now a thing of the past.
"I cannot say how much I think we should appreciate this effort now
being made by the American Government and President to co-operate with
us in what is a piece of world work," he said, "to abandon a tradition the
American people have most jealously guarded, while of course circumscribing
strictly and clearly the limits within which they will undertake to act.
Sees Fundamental Changes.
"At the same time it makes fundamental changes in the prospects of
American influence being effectively exerted, if, unhappily, hereafter we are
faced with a conflict where one side, in the judgment of the American
people and ourselves, is a party which should be discouraged and, as far
as possible, put under the pressure which neutrals may exert."
Sir John said real progress had been made at Geneva, although disturbing
storm signals were still flying. He welcomed the better tone of Chancellor
Hitler's Reichstag speech, especially since it mused the withdrawal of the
German amendment which had threatened to disrupt the Disarmament Conference. Finally he summed up the British disarmament policy under five
First, Great Britain welcomes and responds to President Roosevelt's appeal that the Disarmament Conference press for practical results on the
text of the British plan.
Secondly, Great Britain cannot proceed further on the lines of singlehanded disarmament on which she has already gone far, but has pointed out,
through the British proposals, how much further disarmament by agreement can go.
Thirdly, Great Britain recognizes the validity of the concern of other
countries for security, a concern which Part 1 of the British plan, coupled
with the American declaration, has done much to meet.


Fourthly, Great Britain will not undertake liabilities except those already
assumed under the League of Nations Covenant and the Treaty of Locarno
but will join in the proposed consultative pact.
Fifthly, Great Britain maintains that international disarmament must
depend on policy, and therefore, to be permanently effective, must depend
upon better relations among European States.

Senator Robinson Says President Has Not Obligated
Nation to Use Other Than Moral Force in Preserving Peace—Administration Leader, in Address
Before Iron and Steel Institute, Declares Davis
Plan Contains No Threat of War.
President Roosevelt has not obligated the United States to
use other than moral force to preserve world peace, according
to a declaration made by Senator Joseph T. Robinson, administration leader in the Senate, in an address on May 25
at the annual dinner of the American Iron and Steel Institute in New York City. Senator Robinson said that most
European Governments "hail the President's proclamation
and appeal as an abandonment by the United States of its
policy of isolation," merely because of the expressed willingness of this country to contribute to the security of other
nations. Additional remarks by Senator Robinson, as reported in the New York "Herald Tribune" on May 26, follow:

"From a study of the language used it is apparent that President
merely announced his willingness to negotiate treaties for the elimination
the sovweapons for offensive warfare, for the entry into obligations by
the event
ereignties not to invade territory of others, and for consultation in
of violation of the agreements," he explained.
Senate to Pass on Pacts.
"The terms of such arrangements as may be found acceptable to the United
States must be worked out by the conference.
"The President and the Senate will scrutinize with care any consultative
pacts which may be negotiated and will be guided only by the determination to maintain those exalted standards of international relations which
are consistent with well recognized American traditions of justice and
After speaking in stinging terms of Japan's advance in China and the
long dispute between Paraguay and Bolivia over the Chaco, Robinson said
the "rule" laid down by Norman H. Davis, Ambassador at Large in Europe,
on determining an aggressor is "perhaps as near an acceptable single test
as can be prescribed."
But it is obvious, he added, that this rule is "not applicable to battles on
National boundaries or to cases where belligerents simultaneously occupy
enemy territory."
Mr. Robinson said Japan had "suffered in the esteem of mankind—her
claim that in some mysterious way she is merely acting in defense of treaty
rights being generally discredited as shallow pretense."
Sees Geneva Hopes Revived.
He said the League of Nations represented "the most effective organization established during the history of mankind for the preservation of international peace," yet two of its members "are now engaged in a war
which may continue until one or both of the belligerents becomes so completely exhausted that the conflict can not longer be carried."
Declaring the President had revived hopes for success at Geneva, Mr. Robinson said it the delegates to the Disarmament Conference "realize the
weighty consequences which devolve upon their action, they may be able to
enter into compromises which will strengthen the ties binding civilized
peoples and minimize their fears of one another."

Japan Seeks Naval Parity at Geneva Conference—
Ambassador Davis Replies That United States Is
Willing to Make Further Cuts in Naval Strength—
British Oppose Definition of "Aggressor" Nation.
The United States is prepared to reduce its naval strength
still further, according to a statement made before the Disarmament Conference at Geneva on May 25 by Norman H.
Davis of the United States. Mr. Davis was replying to a
move by Japan to strike from the draft of the proposed disarmament convention the limitations established by the
Washington and London naval treaties. On the same day
the British delegation to the Conference offered objections to
the definition of the term "aggressor" and contended that
greater elasticity was needed in determining responsibility
for a breach of the peace than a fixed definition would
Proceedings of the Conference, as described, in part, in
Geneva advices to the New York "Times" on May 25,follow:
Naotake Sato, for Japan, moved to strike out the first article of the
naval chapter of the British draft convention, incorporating the Washington
and London treaty provisions. Japan, he explained, did not seek to escape
her obligations but saw no reason why the rest of the world should thus be
made to "recognize these treaties."
Norman H. Davis of the United States, replying extemporaneously, agreed
that the omission of this article from the disarmament convention would
not modify the obligations of its signatories. "For that reason," he said,
"I should regret very much to have it suppressed because of the effect this
might possibly have on public opinion. The naval treaties have contributed
so much to the peace of the world and the solution of the general disarmament problem that I deplore any reference whatever that might give the
erroneous impression that we are going to take a step backward."
Terms Inclusion Unwise.
Mr. Sato thought it useless to mention these treaties in a general convention, which would probably not be ratified much before the 1935 naval conference. Under these conditions, he said, Japan was "convinced it is not In
the interests of disarmament to base the future general convention on the
tonnages in the said treaties to refer to them."


Financial Chronicle

Captain Anthony Eden of Great Britain, who spoke before Mr. Davis,
made no reference to Mr. Sato's statement. He answered instead the argument that France raised against the basis proposed for her agreement with
Italy and the heavy attack on the naval chapter which Russia and Spain
made as discriminating against small navies.
Recalling that the United States had not "even attempted to build up to
the treaty limit." Mr. Davis reaffirmed that "we are quite prepared to go
further in reduction."
Mr. Davis argued not only for keeping the two naval treaties in the
framework of the world convention's naval chapter, but he said: "If we
tie up the naval problem with the land and air problems, we shall help to
solve them all."
Rene Massigli of France deplored the British abandonment of qualitative
disarmament in this naval chapter. He made it clearer what abolition
France wanted in compensation for the land weapons she is asked to forego
as aggressive when, recalling President Roosevelt's description of tanks as
"land battleships," he remarked that there were "ocean-going battleships,
too." He thought the period remaining before the 1935 conference too
short for the proposed basis of a Franco-Italian agreement. He wanted it
arranged, too, on the Hoover principle of relativity, which for him meant
relativity of status quo, whereas to Signor di Soragna, who replied for
Italy, it means relativity of needs.
The attitude taken by the British on defining "aggressor" was that it
was necessary to know the background of each case in order to determine
responsibility. The definition proposed yesterday by the security committee
of the conference stipulated that the term should apply to a nation taking
any of the following actions:
The declaration of war; the invasion by anrned forces of the territory of
another State, with or without a declaration of war; an attack by land,
naval or air forces; a naval blockade; support to armed bands formed within
a State which have invaded another State, or refusal to deprive such bands
of protection.
M. Politis, who received warm applause from all the delegates, replied
to Captain Eden that elasticity was assured under the text on consultation
proposed yesterday by Foreign Minister Sir John Simon of Great Britain.
This provides that the world shall not attempt to apply the definition of
aggression until all other efforts to restore peace have failed.

Governor Harrison of New York Federal Reserve Bank
Sails for London to Confer with Heads of Central
Governor George L. Harrison of the New York Federal
Reserve Bank sailed for London last night (June 2) aboard
the S. S. Olympic to confer with heads of Central Banks.
Prof. Sprague Executive Assistant to Secretary of
Treasury Woodin Sails to Participate in World
Monetary and Economic Conference.
Professor 0. M. W. Sprague, Executive Assistant to Secretary of the Treasury Woodin, sailed for London on June 2
to be financial adviser to the American delegation at the
World Economic Conference. The appointment of Prof.
Sprague to his new Washington post was noted in our issue
of May 27, p.3636.
James P. Warburg Sails to Participate in World Monetary and Economic Conference in London.
James P. Warburg, Vice-Chairman of the Bank of the
Manhattan Co. on June 2 sailed on the S. S. Olympic to
attend the World Monetary and Economic Conference in
London. President Roosevelt appointed him financial advisor to the American Delegation.
Soviet Delegation to London Parley Will Be Headed
by Litvinoff.
The Soviet Government on May 22 formally announced
its intention to participate in the World Monetary and
Economic Conference at London, and issued a list of its
delegates to the conference. Foreign Commissar Maxim
Litvinoff was named Chairman of the delegation, while the
other members are:
V. I. Mezhlauk, Vice-Chairman of the State Planning Commission.
Ivan M. Maisky, Soviet Ambassador to Great Britain.
Alexander V. Ozersky, Vice-Commissar for Foreign Trade, who recently
was recalled as head of the Soviet trade delegation in London.

United States and China in Agreement as to Measures
Necessary to Effect Economic Stability—Conversations Between President Roosevelt and Chinese
Minister of Finance Soong—Disarmament Cuts
and Increased Price of Silver Held as Essentials.
A joint statement, issued May 19, by President Roosevelt
and T. V. Soong, Chinese Minister of Finance, said the two
were In agreement on measures to be taken to solve world
problems and that it was considered "essential that the price
of silver, the great medium of exchange of the East, should
be enhanced and stabilized." The statement also bore on
developments in the Far East, and said:
It is our ardent hope that peace may be assured and that to this end practical measures of disarmament may soon be adopted.

The.statement, wihich was issued at the conclusion of conversations between President Roosevelt and Mr. Soong, read
as follows:
At the conclusion of our conversations, we note with profound gratification
that we are in agreement in regard to the practical measures which must be
taken for a solution of the major problems which to-day confront the world.
We agree that economic stability cannot be achieved without political

June 3 1933

tranquillity and that economic disarmament can be attained only in a world
in which military disarmament is possible. It is our ardent hope that peace
may be assured and that to this end practical measures of disarmament may
soon be adopted. In this connection, our thoughts naturally have turned to
the serious developments in the Far East, which have disturbed the peace
of the world during the past two years. There the military forces of two
great nations have been engaged in destructive hostilities. We trust that
these hostilities may soon cease in order that the present effort of all the
nations of the world to re-establish political and economic peace may succeed.
We are in entire agreement that present unreasonable obstacles to international trade must be removed and that the present financial and monetary
chaos must be replaced by order. In this connection, we consider it essential
that the price of silver, the great medium of exchange of the East, should
be enhanced and stabilized. We are in the closest agreement as to many
other measures which must be adopted for the rehabilitation of the economic
life of China and of the world, and we are both resolved to approach the
problems of the World Economic Conference, as well as the problems of the
disarmament conference, with the determination necessary.

President Roosevelt and Viscount Ishii of Japan Issue
Joint Statement at Conclusion of Series of Discusions—Stress Need of Peace in Far East, Stabilization of Monetary Conditions and Rise in Silver
An understanding for the return of stable monetary conditions, for an improvement in the price or silver, and a hope
of peace in the Far East and throughout the world were
expressed in a joint statement issued on May 27 by President
Roosevelt and Viscount Kikujiro Ishii of Japan, at the conclusion of their series of conferences in Washington held as a
preliminary to the World Monetary and Economic Conference in London. The text of the joint statement follows:
At the conclusion of our conversations we are happy to note that our
views coincide in regard to practical steps which need to be taken toward
solving the outstanding economic problems which are now of common
interest and concern to all nations.
We concur in the view that economic stability and political tranquility
are complementary essentials to a sound basis for peace; that neither of
these can be achieved without the other; and that both economic and
military disarmament are needed for their attainment. It is our ardent
hope that both may be achieved.
We have had, of necessity, to think of the unusual situation which has
prevailed in the Far East during the last two years.
We hope that the countries of the Far East, along with those of the
Occident, will be able to contribute substantially, in a spirit of co-operation,
to the laying of solid foundations for a structure of world peace and prosperity.
We are in complete concurrence in the view that in place of the existing
monetary chaos there should be established by international effort an
orderly regime and that unreasonable obstacles to the flow of trade and
capital, where they now exist, should be removed, and where they do not
exist should be adequately safeguarded against.
We consider it highly desirable that the price of silver be reasonably
enhanced and that silver exchange be stabilized.
With regard to many other measures which neod to be adopted in order
to establish the conditions of economic and political health throughout the
world we are in close agreement.
We look toward the convening of the World Economic Conference and
we observe the work of the Disarmament Conference resolved to contribute
to the maximum of our ability, in a spirit of utmost co-operation, to the
end that, through the instrumentality of sincere and determined efforts
on the part of all the nations, principles and practices may be agreed upon
which will be helpful to each and to all.

France Pays Interest on Bonds on Basis of Gold Value
of Dollar.
It was made known in Paris advices May 31 (to the New
York "Times") that interest due June 1 on the French 734
and 7% bonds issued in the United States in 1921 and 1924
would be paid at the Paris branch of Morgan & Co.according
to the gold value of the dollar, it was announced by the
French Ministry of Finance. The rate of payment was
25.52 francs to the dollar.
At the same time it was announced in New York that the
French Government would pay the semi-annual interest due
to holders of its American dollar issues of 75% bonds due
on June 1 1941 and 7% bonds due on Dec. 1 1949 and would
adhere strictly to the gold clause in these loans. An announcement made May 31 through J. P. Morgan & Co.,
paying agents, for the French Government indicated that
payment would be made in dollars at a premium or in francs
at the gold parity of exchange, which is 25.52 francs a dollar.
The announcement was made by J. P. Morgan & Co. as
Twenty-Year External Gold Loan 7;i% Bonds.
Payable June 11941.
External Loan of 1924 Twenty-Five Year Sinking Fund
7% Gold Bonds Due December 1 1949.
To holders of above-described bonds:
The French Government requests the undersigned, Paying Agents .for
the coupons of the above loans, to announce that coupons maturing June
1 1933 and payable at the office of Messrs. J. P. Morgan & Co., 23 Wall
Street, New York City, may until further notice also be paid at the option
of the holder:
(a) Upon presentation and surrender at the office of Messrs. J.P.Morgan
& Co., 23 Wall Street, New York City, in United States currency at the
dollar equivalent of French Francs 25.52 per dollar of face value of coupon,

Volume 136

upon the basis of their buying rate for exchange on Paris at time of presentation.
(b) Upon presentation and surrender at the office of Messrs. Morgan &
Cie., 14 Place Vendome, Paris, France, in French Francs at the rate of
French Francs 25.52 per dollar of face value of coupon.
J. P. MORGAN & Co., Paying Agents.
New York City, May 31 1933.

It was pointed out in the New York "Times" of June 1
that on the basis of the closing quotation in New York
May 31 on the franc at 4.653i cents, a coupon of the 73/2%
loan, which would normally be worth $37.50, would be paid
June 1 at about $44.51, and a coupon of the 7% loan,
normally worth $35, would have a value of about $41.54,
oripremiums of $7.01 and $6.54 a coupon, respectively.
It was added, however, that the actual amounts to be paid
would depend upon the market quotations ruling at the
time the coupons were presented. The "Times" further
This procedure follows the action of the French municipalities of Bordeaux, Lyons and Marseilles on May 1 when their coupons became due.
Germany, Italy and certain other European governments with dollar bond
issues outstanding, however, have elected to pay only in terms of the face
value in depreciated dollars.
Payment of the coupons due to-day on the French Government loans
will be made here at the offices of J. P. Morgan & Co., or, at the option
of the holder, in Paris at the office of Morgan & Cie.

France and Gold Clause—No Change Seen in War
Debt or Economic Parley Situation.
From the "Wall Street Journal" of May 29 we take the
following from Paris:
French bankers generally interpret the proposed American law abrogating
the gold clause as intended mainly to solve the problem of internal gold
From the view of war debts, it is pointed out that should France resume
payments, the agreemert already gives her the option of paying in United
States Treasury bills, the price of which in francs already has been reduced
through depreciation of the dollar in the foreign exchange market. As far
as service on French dollar bonds is concerned, it is very unlikely that the
French decision to continue payment of coupons in dollars, plus the premium, or in francs at the gold parity, will be modified.
a It is also thought that the prospects for the world economic conference
have not been affected although th. American action reinforces the French
opinion that monetary reconstruction will be the paramount issue.

Dutch East Indies Government to Pay July 1 Coupons
on Gold Basis.
The decision of the Dutch East Indies Government to
adhere to the gold basis in paying coupons on its dollar
loan, was indicated by the Guaranty Co. of New York on
announcing on May 31 the receipt of a cablegram from its
European representative stating that the Dutch East Indies
Government has issued official notification that it will purchase at the rate of guilders 2.46 per dollar the coupons due
July 1, on the Dutch East Indies 6% dollar loan due 1947,
which are delivered to the Nederlandsche Handel Maatschappij in Amsterdam, Holland, on or before June 19 1933.
Return of Nations of World to Gold Standard Urged at
Congress of International Chamber of Commerce.
A proposal that the nations of the world return to the gold
standard is reported to have been received with enthusiasm
from the congress of the International Chamber of Commerce
at Vienna on May 31. With regard thereto Associated
Press advices from Vienna said:
To-day's suggestion in favor of rehabilitation of the yellow metal, which
has been a point made by other speakers before the congress, came from
Professor T. E. Gregory, British financial expert, who said all attempts
to manage paper currency has failed.
Individual countries, he asserted, were reluctant to return to gold because
each feared that others would employ the opportunity to get special advantages for themselvet
The way to overcome this fear, the British representative told the congress, "is the same as overcoming fear of a lonely road—we must all take
the road together"

From the same accounts we also quote:
Other speakers shared his views, but Eliot Wadsworth of Boston, Mass.,
warned the congress to remember the gold standard really is "99 per cent
confidence and 1 per cent gold."
Mr. Wadsworth said he would prefer to emphasize balancing budgets
and restoring to its pedestal the old maxim, "as good as a government
"Real business morality" was accepted as a commercial tenet to-day by
financial and industrial delegates to the Congress.

President Schacht of Reichsbank Says Germany Can't
Meet Credits—Asserts Transfers on Private Debts
Are Draining Reserves
-30 Bankers,Representatives
of Creditors in Six Countries, Hear Appeal.
The meeting of foreign bankers convoked by Dr. Hjalmar
Schacht, President of the Reichsbank, to discuss the transfer
of service payments on Germany's private foreign debts got
under way at the Reichsbank on May 29 with a lengthy
discussion of the present state of the transfer problem by
Dr. Schacht. It was noted in a wireless message from
Berlin on that date to the New York "Times" that 30


Financial Chronicle

bankers, representing creditors in the United States, England, France, Switzerland, Holland and Sweden participated
in the discussions. Dr. Schacht and Vice-President Dreyse
of the Reichsbank were the only German participants in the
conversations which, it was said, would be occupied wholly
with an exploration of the transfer problem.
As to Dr. Schacht's statement the Berlin advices to the
Stresses Drain of Gold.
In his statement to the foreign bankers Dr. Schacht took pains to explain
that the meeting was not a governmental matter nor was it called to discuss
the relations between German debtors and foreign creditors. Since the
former were promptly meeting their obligations, the immediate object of the
conversations, he declared, was to reach a readjustment of present transfer
procedure, which was rapidly draining the Reiciisbank's gold reserves.
After listening to Dr. Schacht's presentation of the reasons opposed
to continuation of the present transfer methods, the meeting adjourned
until Tuesday. There was no exchange of opinions between both parties
to-day because no concrete proposals were advanced on the German side.
Dr. Schacht prefaced his statement with the request that the meeting
should not be regarded as a formal conference, but as being in the nature
of an informal discussion. He laid down the proposition that if the Reichsbank should continue to endeavor to supply bills of exchange for the German
debt service, the inevitable consequence would be a collapse of the mark
more calamitous than that of 1923. He added emphatically that the Reichsbank would not assume responsibility for or permit such a catastrophe.
Blames Reparations Payments.
The cause of Germany's troubles with her debt service he declared to be
her excessive borrowing during the years of her reparations payments.
"That whole system of borrowing was radically unsound," he said.
"It collapsed with the advent of the October 1929 crisis in the United
States, from which moment on the stream of foreign credits to Germany
Among the plans up for consideration, according to reports in German financial circles, was one providing for the issuance of mark bonds,
which would take the place of foreign currencies for payments on debt
service. These would either be guaranteed by the Reich or would have the
character of government bonds, which would be recognized abroad and
would return 4% interest.
Recourse to such an expedient would make the Reich the guarantor or
surety for private business and adoption of the scheme would assume that
these bonds could be floated abroad in such a manner as to assure Germany's creditors ready access to their service payment, since their issuance
would be predicated on the assumption of loosening official exchange restrictions in Germany.
Preparatory Step Is Seen.
In the absence of concrete proposals from Dr. Schacht, foreign bankers
admitted to-night that thus far they had played the part of good listeners
only. It appears to be their conviction, however, that the present meeting
was conceived on the German side as constituting an essential preparatory
step for the World Economic Conference, and that Germany intends to
reiterate at London her well-known position that her foreign private indebtedness can be liquidated without disturbance to her own economy
or the interests of the creditor States only if she receives opportunities for
expansion of her exports.
The current conversations at the Reichsbank, therefore, are designed
to give renewed and timely emphasis to this thesis, which already
plain will constitute the chief point of contention at the London conference
in connection with debates on tariffs and import restrictions.
The principal points advanced by Dr. Schacht in his statement to the
foreign bankers to-day were as follows:
"Our discussion is not a governmental matter. The representatives
of their respective governments have nothing to do with our meeting.
Neither is it a discussion between German debtors and their foreign creditors
—for all debtors are paying up. What is in issue is simply the foreign exchange problem, which first of all falls under the competence of the Reichsbank."
"Now," Dr. Schacht went on, "the present transfer crisis can be understood only in the light of political developments 15 years ago. Naturally,
defeat in the war inflicted severe financial damages on the German economic
body, but it had an immediate effect on the transfer problem. This arose,
in the last analysis, from war debts—with respect to Germany called
Sound Justification for Loans.
After the restabilization of Germany's currency,the Reichsbank President
continued, Germany had sound economic justification for raising loans
abroad for a few specified purposes, namely the restoration of her completely exhausted stocks of raw materials; for reorganizing her exports, her
export industry and shipping, and finally for increasing the Reichsbank's
gold and exchange reserves as a support for currency.
"But all borrowing in excess of that was an evil," he emphasized. "Today Germany can transfer funds only by means of an export surplus. Then
it should follow that foreign loans, in so far as they could not be used
abroad, could come into Germany only in the form of goods.
"Our excessive use of foreign credits thus was the cause of Germany
having had an excess ofimports over exportsfrom 1924 to the middle of 1930.
"The politicians who had imposed reparations on Germany had started
from the opposite idea that Germany must find money for reparations
Payments through exports. But if that was the policy, it should not
have been countermanded by concurrently granting huge credits that
involved heavy imports into Germany."
Dr. Schacht said that industrial opposition to Germany building up an
export surplus developed everywhere in the world so that even deliveries
In kind on the reparations account met resistance.
"Under such circumstances, and with the politicians insisting on reparations being paid there was nothing left but to apply to them the funds
coming in from abroad, and of a round 20,000,000 marks that came into
Germany a good half was used for nothing but to pay reparations."
System Collapsed in 1929.
This system, he went on. was false and unsound. It collapsed with
the beginning of the depression in the United States in October 1929.
The stream of foreign credit stopped, and only with the greatest trouble
a few additional loans, such as that from Lee, Higginson & Co.. could be
The consequences, Dr. Schacht declared, were:
"First, we could no longer pay reparations; second, in place of an import
surplus we got an export surplus."
He insisted that in Germany the trend of events had been correctly
discerned ever since 1924, whereas the outside world shut its eyes. and.

Financial Chronicle


refusing to be better advised by Germany,ignored both the transfer problem
and its underlying causes.
Criticizes Reparations Agent.
Dr. Schacht criticized S. Parker Gilbert for having, as reparations
agent,subordinated the transfer problem, as did the Young Plan conference.
When the collapse of the Austrian Creditanstalt in 1931 brought a run
of foreign creditors on Germany, precipitating her ultimate financial crisis,
this was met, Dr. Schacht said, by instituting control of foreign exchange;
but, while this supported German currency, it did nothing to mitigate
the crisis, which steadily got worse. So the standstill agreements, he said.
were only momentary palliatives, even if concluded "with the best intentions on the part of the foreign creditors."
Dr. Schacht said Germany, having repaid more than ten million marks
In principal and interest since the American crisis began, had given more
than ample evidence of the good faith of German business, but reminded
his hearers that giving up such a large amount under such circumstances
again had a crippling effect on German trade and industry.
Finally, Dr. Schacht asserted, no thought seems to have been given
to the fact that this repayment of credits could not be effected without
seriously depleting the reserve of the Reichsbank, which was responsible
for Germany's currency.
"The reserves in gold and bills of the central bank of issue, although
they may be drawn on occasionally for readjusting important payments,
are not intended to effect payments of the more or less long-term indebtedness of the country's business enterprises," he went on. "If such a task is
forced on the central bank, it is deprived of liberty of action. This is
precisely what has happened to the Reichsbank through excessive transfers.
And this is the worst effect of the series of events, for a country whose
central bank has lost freedom to manoeuvre is at the mercy of any accident.
Sees Danger of Catastrophe.
"From the figures submitted to you, gentlemen, you will see that there
is danger now that the Iteichsbank's reserves may shrink to zero. Its
present reserves, with the gold discount, stand at 300,000,000 marks.
Coverage thus has fallen to 8%. If we let this thing go on, the Reichsbank
will run into the danger of being no longer able to prevent the sale of marks.
That is, in such case, we should certainly experience an official discount
of the mark and subsequent devaluation of it, which, I think it is clear to
you all, would precipitate an even greater catastrophe than 1923. Such
a catastrophe the Reichsbank will not permit."
The leading American delegates at the meeting are Albert H. Wiggin
and John Foster Dulles.

Oscar Wassermann and Theodor Frank to Retire From
Board of Deutsche Bank.
Oscar Wassermann and Theodor Frank have notified
the governing board of the Deutsche Bank that they will
retire from it at the end of this year. We quote from Berlin
advices May 29 to the New York "Times" which also said:
Herr Wassermann,one of the most prominent bankers in Germany, long
has been a leading spirit in the Deutsche Bank, the governing board of
which he joined in 1912. His financial authority extended far beyond
this institution.
Herr Frank joined the Deutsche Bank's governing board after the
Disconto Gesellschaft's amalgamation with it.
It is reported that the bank hopes to retain the service of the retiring
officers in an advisory capacity.

Berlin to Help Shipping—Provides 20,000,000 Marks
to Offset Losses in Currency Upsets.
The following from Berlin, May 26, is from the New
York "Times":
The Reich Government to-day approved an appropriation of 20,000,000
marks out of which German shipping is to be reimbursed for losses in freight
revenues occasioned by the abandonment of the gold standard by the
United States and Great Britain.
While the losses are reported to have been heavy, they could not have
been foreseen since the altered international currency situation completely
upset all advance calculations.
Plans for a reorganization of German shipping along regional lines have
been completed as to the main points it was reported from Hamburg to-day.
The Lloyd-Hamburg-American pools will be made more flexible, but both
lines will continue to compete for the North Atlantic Far East business.
It is also proposed to dissolve the pools' allied units, restoring them to their
former position as independent lines.

1 Coupons of Hamburg-American
Line Bonds.
Speyer & Co., and J. Henry Schroder Banking Corporation paid, on June 1, the June 1st coupons of the HamburgMarine Equipment
American Line First Mortgage 6
Serial Gold Bonds.
Payment of


5% Free State of Bavaria Treasury Notes due June 1
1933—Offer to Exchange.
On June 1, RM. 40,000,000.—Free State of Bavaria
Treasury Notes, issued in 1928, become due for payment in
Reichsmark at 110%. The State of Bavaria has offered to
exchange the old 5% treasury notes against 6% Free State
of Bavaria Serial Bonds of 1933 at 9234% according to a
circular prepared by New York and Hanseatic Corporation.
Republic of Finland.
The National City Bank of New York, as fiscal agent,
is notifying holders of Republic of Finland 5
loan sinking fund gold bonds, due Feb. 1 1958, that $132,000
principal amount of these bonds have been selected for
redemption at par on Aug. 1 1933. Bonds so selected will
be paid at the redemption price upon presentation and
surrender at the head office of the bank on and after August 1,
after which date interest on such drawn bonds will cease.
Redemption of Portion of Bonds of

June 3 1933

To Pay Young Plan 534% Bonds in Current Money—
Bank for International Settlement Interest Payments to U. S. British, Swedish Holders in Paper,
Others on Gold Basis.
From Paris the "Wall Street Journal" of May 29 reported
the following:
June 1 coupon of the 5M% Young Plan bonds will be paid in paper
dollars, sterling and Swedish crowns without premium for exchange depreciation, while bearers of the French, Swiss and Belgian franc, florin, lira
and reichsmark coupons will receive interest as usual.according to a decision
taken by the Bank for International Settlements, as trustee for the German
government's obligation.
The B. I. S. reserves the rights of bondholders in the first category and
stands on its request to the Reich to pay a supplement on the basis of the
gold clause. There is little or no expectation, however, of inducing the
Reich to change its policy, especially since formal American abandonment
of the gold clause.
It is pointed out there is no provision for arbitration in the contract or
general bond, and even if the question were referred to arbitration, the
court's decision could not be enforced.
It is understood British banking agents offered no opposition to the payment in sterling at current value and that none is likely from the Americans.
A plan was considered for distributing the loss due to the difference between the amount receivable on a gold basis and the amount actually
received by the trustee over all groups of bondholders uniformly, but this
was abandoned as involving complications of litigation all around.

Austrian Government Remits Funds for Payment of
June 1 Interest on Guaranteed Loan 1923-1943.
Announcement was made on May 26 by the trustees of the
Austrian Government Guaranteed Loan 1923-1943 that the
coupons due June 1 would be paid. The loan was issued
under the auspices of the League of Nations and it is stated
that approximately $17,000,000 is outstanding here.
The trustees announcement follows:
Austrian Government Guaranteed Loan 1923-1943.
The Trustees of the above loan announce that the coupon maturing
June 1 1933, will be duly paid on the due date in the respective foreign currencies.
The provision for this coupon was to be constituted under the General
Bond by six monthly instalments payable from Nov. 1 1932,to Apr. 1 1933.
The Austrian Government has not remitted the instalments payable on Nov.
1 and Dec. 1 1932, but since Jan. 1 1933, has remitted the full monthly
Instalments except for the April instalment. As regards the latter instalment the Austrian Government only transferred an amount sufficient to
provide for the June, 1933, coupon after exhausting the remainder of that
part of the reserve fund applicable to interest which was created under
Article 10 of the General Bond.
The sinking fund requirements for the tenth fiscal year ending May 31
1933, have also been met in full. They were provided partly by payments
from the Austrian Government and partly by drawing on that part of the
reserve fund applicable to amortization, which portion has thus been exhausted.
The Trustees have renewed their demand to the Austrian Government
for the reconstitution of the reserve fund in accordance with the terms of the
General Bond.
Secretary to the
14 Place Vendome.
l'aris, France.

Spanish Exchange of Abolition of
Gold Clause by United States
On May 27 Associated Press advices from Madrid said.


Effect on

Abolition of the gold clause in all obligations by the United States will
have little effect in Spain, according to Julio Carabias, Governor of the
Bank of Spain, and Manuel Aleixandre. president of the Bank of Industry
and Commerce. They said that few American securities were held here.
and they did not look for the Exchange to be greatly affected.

Slight Aid to Chile in Reduced Exchange Value of
Dollar—Central Bank Report Says Gain in Commerce Will Be Offset by Price Rise Then.
The Central•Bank of Chile, in a report on May 27,forsees
only slight improvement in trade between Chile and the
United States as a result of the reduced exchange value of
the dollar according to a cablegram on that date from
Santiago to the New York "Times" which added:
The repercussion in Chile of the reduced value of the American money
unit cannot be considered beneficial. It is true that Chile can now purchase
with greater ease the dollars it requires, perhaps lowering the costs of such
imported articles as gasoline, lubricating oils and other goods, but on the
other hand a depreciation in the dollar value will signify higher prices
goods manufactured and expo.ted from Chile, principally affecting
of soda and some agricultural lines.
We therefore do not believe our foreign trade with the United States
adbe benefited in any way by the depreciation of the dollar, since the
vantages of the new situation will be offset by disadvantages.
that of
The position of other countries in this respect will be the same as
Chile, it being specially difficult for those still on it to maintain the
The only real practical stimulus to international trade would be &radical
change in customs tariffs policies.
The drop in the dollar may benefit debtors in that particular
but this advantage, as regards Chile, can only be considered as
theoretical,since this country cannot think of resuming service on its
debt nor payment of trade debts in arrears until a fundamental improvement.
improvements in
has taken place in the internal situation, followed by
liquidaexport trade, or until special agreements are reached concerning the
tion of private debts on the basis of international compensation

Volume 136

Financial Chronicle

Argentine and Chile Sign Commercial Treaty, to Be
Valid for Three Years After Ratification by Both
A commercial treaty between Argentina and Chile was
signed at Buenos Aires on May 28, on the 31st anniversary
of the conclusion of a boundary treaty between the two
nations. The trade pact supersedes a modus vivendi which
has been in existence for six months, and provides that both
signatories co-operate to prevent a repetition of the 1932
closure of the Trans-Andean Railway. The treaty is subject
to ratification by Congresses of both countries. It is limited
to three years, but a clause permits revision in 1934 if experience shows that changes are necessary. Officials said
that the pact will facilitate the interchange of many essential
products, without requiring either nation to concede costly
tariff reductions to other countries with which it has most
favored-nation treaties.
Purchase of Argentine Bonds Through Sinking Fund.
J. P. Morgan & Co. and The National City Bank of New
York, as fiscal agents, are notifying holders of Government
of the Argentine Nation external sinking fund 6% gold
bonds, issue of June 1 1925, due June 1 1959, that $389,298
in cash is available for the purchase for the sinking fund of
so many of these bonds as shall be tendered and accepted for
purchase at prices below par. Tenders of these bonds, with
coupons due on and after December 1 1933, should be made
at a flat price, below par, before 3 p. m. July 3 1933. If
tenders so accepted are not sufficient to exhaust the available
funds, additional purchases on tender, below par, may be
made up to August 30 1933.
Tenders Invited for Purchase of Argentine Government Bonds Through Sinking Fund.
The Chase National Bank of the City of New York, acting
for the fiscal agents of the Government of the Argentine
Nation External Sinking Fund 6% gold bonds of 1924
Series "B," due December 1 1958 is inviting tenders at a
price below par of a sufficient amount of these bonds to
exhaust the sum of approximately $266,309 available in the
sinking fund. Proposals will be opened at 3 p. in. on July 3
1933, and should be sent to the Trust Department of the
bank at 11 Broad St., New York City.
Temporary Offer to Holders of Tucuman (Argentina)
7% Bonds Respecting Interest Payments
in U. S. Dollars and 40% in Scrip Certificates.
The Municipality of Tucuman (Argentine Republic),
through L. Yrrazabal, Mayor, and Julio C. Montini, Secretary, is notifying holders of its external 23-year 7% sinking
fund gold bonds due June 1 1951 of a temporary offer of
readjustment with respect to interest payments due during
the period from Dec. 1 1932 to June 1 1935, inclusive. The
offer, it is stated, is being made due to the present difficulty
of providing foreign exchange and the fact that the municipality now believes that it can obtain sufficient exchange to
make only partial payments in U. S. dollars on account of
interest due in that period. The municipality has previously deposited with the Bank of the Nation (Tucuman
Branch) Argentine pesos sufficient at the then current rate
of exchange to meet interest and sinking fund payment due
Dec. 11932. An announcement May 29 regarding the offer
The offer provides for the payment of 60% of such coupons maturing
between Dec. 1 1932 and June 1 1935 in cash in U. S. dollars and 40%
($84 for each S1,000 bond, covering the amount not payable in cash during
the entire period) by the delivery of a transferable interest bearing scrip
certificate, payable in U. S. dollars and redeemable out of sinking fund
moneys after June 1 1935. Cash payments of the Dec. 1 1932 and June 1
1933 coupons will be made when the bond is deposited under the loan readjustment plan and other cash payments made when due. A suspension of
the semi-annual sinking fund payments during the period mentioned is
also provided under the offer. Holders desiring to accept the offer are
invited to deposit their bonds with City Bank Farmers Trust Co., New
York City, from whom copies of the loan readjustment plan may be

Temporary Offer of Adjustment of Interest to Holders
of Bonds of Province of Mendoza (Argentine).
The Province of Mendoza (Argentine Republic) through
Guillermo Cano, Minister of Finances, and Ricardo Videla,
Governor, is notifying holders of its external 7.50% secured
sinking fund gold bonds, dated Dec. 1 1926, and due June 1
1951, of a temporary offer of adjustment with respect to
interest payments and the retirement of bonds during the
period from Dec. 2 1932 to Dec. 1 1937, inclusive. A
statement issued in the matter says:
Due to its greatly reduced revenues and the difficulty of providing foreign
exchange, the Province finds itself unable for the time being to continue in
full the semi-annual payments.


The offer provides for the payment of coupons maturing from June 1 1933
to and including Dec. 1 1937, at the reduced rate of interest of 4% per
annum, or $20 for each $37.50 coupon. Under the offer, semi-annual
sinking fund payments accruing from Dec. 2 1932 to Dec. 1 1937 will be
suspended, but commencing June 1 1934, the Province agrees to make payments to the depositary to be applied to the purchase or redemption of
of bonds. The plan further provides for the waiver of the security fund
during the period and for the readjustment of the method of depositing
pledged revenues. Holders desiring to accept the offer, which is not
conditional upon the acceptance of any specified percentage of bonds, are
Invited to deposit their bonds with the Manufacturers Trust Company
New York,
from which copiesoftheloan readjustment plan may be obtained.

Argentine Foreign Exchange Control Commission
Rules that Dollar Drafts on United States Must
Be Covered by Export Receipts.
United Press advices from Buenos Aires May 31 to the
New York "Herald Tribune" stated that the Foreign Exchange Control Commission ruled on that date that all
dollar drafts on the United States must be covered exclusively
by the amounts of dollars obtained through the exportation
of Argentine products to the Northern Republic. The
advices added:
The ruling is viewed as threatening a drastic cut in the apportionment of
the available foreign exchange to the United States in view of the large
favorable trade enjoyed by that country.
Last year United States' exports to Argentina were valued at $27,459,868.
while her imports from this country aggregated only $11,180.828. A total
of 560,000,000 is reported to be tied up here, importing firms and bankers
being unable to remit to the United States to meet commercial obligations
there because of the shortage of dollar coverage.
The Commission's ruling also stipulated that permits for payment on
collections or other dollar transferences can be liquidated solely in dollars.
Special permits will be necessary to carry out payments in other currencies.

Argentina Said to Have Arranged to Cut Gold Bond
Rate to 4%.
The following (United Press) from Buenos Aires May 31
is from the New York "Herald Tribune':
Foreign Minister Alberto Hueyo announced to-day that an arrangement
had been made with holders of the 73.6 % external gold bonds, whereby the
interest would be reduced to 4%. The loan was contracted in the United
States in 1927. Such a reduction in interest implied a saving of 3,750,000
pesos to the government.
The present administration, he told the Senate in response to a demand
for information by Senator Sanchez Sorondo, has succeeded in scrupulously
fulfilling all obligations and has maintained Argentine credit intact abroad.
Enumerating the economies effected, he said the United States abandonment
of the gold standard had permitted a saving of 7,000,000 pesos on the debt
Customs receipts have been on the increase since the first of the year
and at present total 10,000,000 pesos more than this time last year, Senor
Hueyo declared. The new income tax and the business transactions tax,
he said, have yielded 12,000,000 pesos, permitting a reduction in the budget
deficit to 6,000,000 pesos. This deficit will be wiped out if Congress
sanctions the proposed tax on incomes derived from government securities.

New Australian Refunding Loan Oversubscribed.
A cablegram June 1 from Canberra (Australia) to the
New York "Times" said:
Subscriptions to the £5,000,000 3,1% internal loan reached £8.100,000.
The Council therefore will meet next Tuesday without need to worry
about finding money for the unemployed during the Winter. When the
next loan is floated to make up £10,000,000 for the unemployed under the
Premier's plan, it is expected that the rate will be lower than 314%•
Customs revenue in the eleven months ending on May 31 was more
than E5,000,000 above the estimates. Allowing for budgetary expenditures, it is expected that the surplus at the end of the year will be more
than £2,500,000. Postal revenue also has greatly increased. indicating an
improvement in trade and industrial activity.

London advices June 1 to the same paper stated:
The Commonwealth of Australia 33 % five-year refunding loan amounting to £11,000,001) met with a good reception when the subscription lists
opened to-day. The lists for cash applications closed within two hours.

Canadian Press accounts from London May 29 had the
following to say regarding the loan:
Announcement was made by the Treasury to-day that Right Hon.
Neville Chamberlain, Chancellor of the Exchequer, had agreed to an
immediate Australian bond issue not exceeding five years' maturity for
the purpose of refunding certain Australian loans bearing interest at the
rate of6 %. The Chancellor made it clear, however, that this exceptional
measure in no way implied the withdrawal of his request made in January
regarding the conversion of trustee securities. At that time it was explained
that the capital market was free to domestic and Empire borrowers, with
one exception. The exception applied to the replacement of existing issues
by new issues in the case of optional conversions where the new issue ranks
as a trustee security, and involves either underwriting or an invitation to
the public to subscribe new cash.

Additional Rulings on Bonds of Upper and Lower
Austria by New York Stock Exchange.
The New York Stock Exchange has issued the following
announcements through its Secretary, Ashbel Green:
Committee on Securities.
May 26 1933.
Referring to the rulings of this Committee dated Dec. 1 1932 and Jan. 26
1933. in the matter of the non-payment of interest on Province of Lower
Austria Secured Sinking Fund ni% Gold Bonds, due 1950:
The Committee on Securities further rules that beginning with transactions of June 1 1933, the bonds dealt in as "with all unmatured coupons
attached" shall be ex the June 1 1933. coupon

Financial Chronicle


That beginning June 1 1933, the bonds may be dealt in as follows:
(1) "with Dec. 1 1932, and subsequent coupons attached";
(2) "with all unmatured coupons (i.e., coupons, the due dates of
which have not been reached) attached";
That bids and offers shall be considered as being for bonds "with Dec. 1
1932, and subsequent coupons attached" unless otherwise specified at the
time of transaction; and
That all transactions in the bonds shall be "Flat."
Committee on Securities.
June 1 1933.
Referring to the rulings of this Committee dated Dec. 1 1932 and Feb.
Province of Upper
24 1933, in the matter of the non-payment of interest on
Austria External Secured Sinking Fund 7% Gold Bonds, due 1945:
The Committee on Securities further rules that beginning with transactions of June 1 1933, the bonds dealt in as "with all unmatured coupons
attached" shall be ex the June 1 1933, coupon;
That beginning June 1 1933, the bonds may be dealt in as follows:
(1) "with Dec. 1 1932, and subsequent coupons attached";
(2) "with all unmatured coupons (i.e., coupons, the due dates of
which have not been reached) attached";
That bids and offers shall be considered as being for bonds "with Dec. 1
1932, and subsequent coupons attached" unless otherwise specified at the
time of transaction; and
That all transactions in the bonds shall be "Flat."

Previous rulings on the bonds were noted in our issues of
Dec. 3 1932, page 3788 and Feb. 11 1933, page 934.

June 3 1933

J. P. Morgan & Co., New York City, in United States currency at the
dollar equivalent of French Francs 25.52 per dollar of face value of coupon.
upon the basis of their buying rate for exchange on Paris at time of presentation, or (b) upon presentation and surrender at the office of Messrs.
Morgan & Cie., Paris, France, in French Francs at the rate of French
Francs 25.52 per dollar of face value of coupon:
The Committee on Securities rules that in settlement of contracts in said
-payment date and
bonds on which delivery was due prior to the interest
should have been made with the next due coupon attached, but where
-payment date without the coupon
delivery is made on or after the interest
attached, and in settlement of contracts in said bonds made "Delayed
Delivery" between May 25 1933, and May 29 1933, inclusive, the cash
settlement made in lieu of the coupons shall be on the basis of United States
currency in New York at the dollar equivalent of French Francs at gold
parity of exchange, the said dollar equivalent to be computed at the rate
at which coupons may be cashed at the office of Messrs. J. P. Morgan &
Co. on the date of actual delivery, under option (a) referred to above.
The computation of accrued interest is not changed by this ruling.
Committee on Securities.
June 1 1933.
In view of the arrangements made for the payment of the June 1 1933,
coupons attached to the Government of the French Republic 20
External Gold Loan 7%% Bonds. due 1941, at the option of the holder
surrender at the office of Messrs. J. P.
either (a) upon presentation and
Morgan & Co., New York City, in United States currency at the dollar
equivalent of French Francs 25.52 per dollar of face value of coupon, upon
the basis of their buying rate for exchange on Paris at time of presentation,
or (b) upon presentation and surrender at the office of Messrs. Morgan dr
Cie., Paris, France, in French Francs at the rate of French Francs 25.52
per dollar of face value of coupon:
The Committee on Securities rules that in settlement of contracts in the
-payment date
said bonds on which delivery was due prior to the Interest
and should have been made with the next due coupon attached, but where
-payment date without the coupon
delivery is made on or after the interest
attached, and in settlement of contracts in said bonds made "Delayed
Delivery" between May 25 1933, and May 29 1933, inclusive, the cash
settlement made in lieu of the coupons shall be on the basis of United States
currency in New York at the dollar equivalent of French Francs at gold
parity of exchange, the said dollar equivalent to be computed at the rate
at which coupons may be cashed at the office of Messrs. J. P. Morgan &
Co. on the date of actual delivery, under option (a) referred to above.
The computation of accrued interest is not changed by this ruling.

Supreme Court Orders Inquiry on Bonuses Paid
Officers of American Tobacco Company—Suit of
Stockholder Results in Ruling for Review of Firm's
Distribution of Earnings.
The Supreme Court of the United States on May 29
ordered an inquiry to determine whether George W. Hill,
President of the American Tobacco Company, has been receiving more than a just share of the company's earnings.
In 1930 Mr. Hill was paid more than $1,000,000 in salary
and profits. The inquiry ordered by the court would also
include the distribution of earnings to Vice Presidents of the
firm. The ruling represented a partial victory for Richard
R. Rogers of New York, a stockholder of the company, who Allied Chemical & Dye Corporation Defends Its Stand
brought suit on the ground that a by-law authorizing large
—Declares Data Ordered by New York Stock Exchange Would Aid Competitors—Final Letters
bonus payments to officers was invalid, and that even if it
Made Public.
were held valid the amounts paid were unreasonably large
The New York Stock Exchange, which announced on
and subject to revision. He contended that the surplus or
net profits of the company, after meeting all liabilities, was May 25 that it would remove from the list on Aug. 23 the
exclusively within the control of the board of directors, and preferred and common stocks of Allied Chemical & Dye
that under the charter of the company it could not be dis- Corp. unless the corporation agreed to issue more detailed
tributed by stockholders. Officers of the company, on the reports to its stockholders, made public on May 29 the
other hand, replied that stockholders had authority to con- correspondence which passed between the company and the
trol the finances, and that officers were not receiving exorbi- Exchange preceding the ultimatum of the Exchange issued
tant allowances or unreasonable salaries. The court's May 25. H. F. Atherton, Secretary of Allied Chemical,
decision was summarized as follows in Associated Press in a letter to the Governing Committee of the Exchange
dated May 24, said it would be against the best interests
Washington advices on May 29:
In ordering the investigation into the money accruing to Hill and the of the stockholders to make public information which could
vice-presidents through the company by-law adopted in 1912, giving them
company's competitors. He reminded the
a percentage of surplus profits, the court upheld the legality of the by-law be used by the
Exchange that its Committee on Stock List had approved
Nevertheless, Associate Justice Pierce Butler who delivered the opinion
the listing of Allied Chemical stock on several occasions
said the "rule prescribed by it cannot, against the protest of a stockholder.
under an agreement which did not provide for the furnishing
and effect to
be used to justify payments of sums so large as in substance
of such information as the Exchange was requesting at the
amount to spoliation or waste of co-operative property."
The facts alleged by the plaintiff, Justice Butler continued."are sufficient
present time.
to require that the District Court upon a consideration of all the relevant
In reply, the Exchange, in a letter sent by its President
facts brought forward by the parties, determine whether and to what extent
Richard Whitney to Orlando Weber, President of Allied
payment to the individual defendants under the by-laws constitutes misuse
and waste of the money of the corporation."
Chemical, states that it is believed to be "essential in the
Under the 1912 by-laws Hill, as President, received 2;i% of profits after
public interest that our requirements and practices should
all dividends and expenses had been paid. The vice-presidents get 13 %.
Hill received $842,507 from the profits clause in 1930. He got cash
keep pace with the changes in business customs and concredit of $273,470 and salary of $168,000.
ditions which from time to time occur."
Charles F. Neiley, a Vice-President, received more than $400,000 under
For more than three years the Stock Exchange has been
the by-laws, $89,945 in cash credits and $50.000 in salary.
Vincent Riggio, a Vice-President, received an almost identical sum.
seeking to induce the Allied Chemical management to
The decision to-day reversed both the Circuit Court of Appeals and the
itemize more fully its balance sheet and income account.
Federal District Court for the Southern District of New York. The latter
The controversy reached an acute stage about a month
was directed to make an inquiry.
A dissenting opinion was filed to-day by Associate Justice Harlan F.
ago, when the Exchange made public the long correspondence
between Orlando F. Weber, President of Allied Chemical;
The stockholders had assailed a stock issue which the directors allotted
H.F. Atherton, Secretary of the company; J. M. B. Hoxsey,
themselves and other officers. The court did not pass on the merits of the
case, but Justice Stone said he felt the court should go to the bottom of
Executive Assistant of the Committee on Stock List of the
the matter. He recited that there were 56,712 shares of common stock
Exchange, and Frank Altschul, Chairman of the Committee
being made available to directors and other company officials at a price of
$25 a share when the market price of the stock was $112.
on Stock List. (See "Chronicle" April 29, p. 2888.)
On that basis, he said, Hill's profit from that transaction alone was
Information regarding the Allied Chemical recent corre$1,169,280, exclusive of the more than $1,000,000 in profit, salary and cash
spondence and resolutions, transmitted by Frank Altschul,
Justice Roberts took no part in the consideration of either case.
Chairman of the Committee on Stock List to the Governing
Committee, is given under five headings, as follows:
Chemical dr
(1.) Copy of a letter dated May 24 1933, from the Allied
Ruling of New York Stock Exchange on Bonds of
Dye Corp. to the Governing Committee of the New York Stock Exchange.
Government of French
Committee on
(2.) Copy of a report and recommendation made by the
The following announcements were issued by Ashbel Stock List to the Governing Committee of the New York Stock Exchange
on May 24 1933.
Green, Secretary of the New York Stock Exchange:
a resolution adopted by the Governing Committee on
Committee on Securities.
June 1 1933.
In view of the arrangements made for the payment of the June 1 1933,
coupons attached to the Government of the French Republic External Loan
-Year Sinking Fund 7% Gold Bonds, due 1949, at the option of
of 1924 25
the holder either (a) upon presentation and surrender at the office of Messrs.

(3.) Copy of
recommendation of the Committee on Stock List on May 24 1933.
(4.) Copy of a letter from the Secretary of the New York Stock
dated May 24 1933. in acknowledgment of the letter of the Allied Chemical
& Dye Corp. of May 24 1933.
(5.) Copy of a letter from the President of the New York Stock Exchange
dated May 26 1933, in reply to the letter of the Allied Chemical & Dye
Corp. of May 24 1933.

Volume 136

Financial Chronicle

(1 )
61 Broadway, New York.
To the Governing Committee,
New York Stock Exchange,
New York, N. Y.

Mal/ 24 1933.

Dear Sirs:
We wish to call your attention to the following in connection with the
discussions between the Exchange and this company regarding its annual
reports to stockholders:
In Dec. 1920, when the stock of this company was originally listed, full
consideration was given by the Committee on Stock List and by the cornpony to the form of the application and the agreement contained therein.
Such application and agreement were the bases upon which the decision
of the company to have its stock listed, as well as the decision of the Exchange to list it, were made. No reference was made in the application
or the agreement to furnishing the information now being requested.
In Dec. 1929, the Exchange listed additional shares of our stock. At
an extended conference with the Committee on Stock List on Dec. 23 1929,
most of the points which the Stock Exchange has now raised were discussed and the reasons why we did not desire to supply the additional information were stated. In reply to the printed questionnaire, we advised
that we proposed to publish our financial statements In the same form as
theretofore published. Our application was approved by the Exchange
and an agreement executed. In a letter to the company, dated Dec. 31
1929. the Committee on Stock List recognized the mutual obligations
arising from the agreement which had been entered into as to the company's
stock which had been listed up to that date.
In Dec. 1930, the Exchange listed additional shares of our stock. We
conferred at length on Dec. 15 and Dec. 16 1930, with representatives of
the Stock List Committee. Most of the points which the Exchange has
now raised were again discussed and we again stated our reasons for not
desiring to disclose further information with reference to the company's
affairs. In reply to the printed questionnaire, we advised that we proposed
to publish our financial statements in the same form as theretofore published. Our application was approved by the Exchange and the agreement
now in effect was executed.
We have always considered and now consider that these listing proceedings
conitituted an agreement between the Exchange and the company as to
what reports the company was required to publish as a condition to the
admission and continuance of its stock on the trading list. At the same
time we have been willing to consider with the Exchange, and have recently considered with it at length, its suggestions for variations in our
regular system of reporting; and we have been entirely ready at all times,
as we are at present, to adopt any such changes which do not appear to
us to be contrary to the best interests of the company's stockholders. It
is in this spirit that we have been reconsidering with the Exchange from
time to time during the last year or so the same or similar suggestions regarding our reports as those which were disposed of upon the successive
listings of our stock as above indicated.
On March 28 1933 the Exchange wrote the company, requesting it to
make a statement not later than the date of the annual stockholders' meet-.
Mg in order to clear up any misunderstanding as to the value of marketable
securities carried in the balance sheet under current assets, and suggesting
that further consideration of all other questions which had been under discussion be deferred until later. After preliminary acknowledgment of
this letter, we replied on April 21 1933. stating that we would be pleased
to make a statement at the annual meeting regarding marketable securities
as requested by the Exchange. At the same time we pointed out that our
report explicitly stated that marketable securities were shown at cost
that the difference between cost and market value was amply provided for
in the general contingency reserves. The Exchange never made any reply
to this letter, and we did not doubt that the Exchange found it entirely
satisfactory, as it was intended to be.
At the annual meeting of stockholders held April 24 1933, among
statements made by the presiding officer with reference to the company's
report for 1932. was the following:
"U. S. Government and other marketable securities carried under
assets. aggregating $92,400,000 stated at cost, had a market
value as of
Dec. 31 1932 of approximately $28,000,000 less than cost.
The reserves
which have been provided are ample to take care of this
A transcript of the complete statement is attached.
We thus fairly complied with the Exchange's request of
March 28 1933.
There was obviously no occasion to comment on other items
of current
assets. Accounts and notes receivable have, of course, no
market value;
uncollectible items are currently written off and probable
future losses
therein are comparatively small. Cash was cash. As
stated in the report
itself, the policy of valuing inventories on a basis of cost
or market, whichever was lower, was being continued.
We hoard nothing further from the Exchange
until April 27 1933, when
we received the Exchange's letter of the previous day
stating that on that
day the Committee on Stock List had submitted a special report
this company to the Governing Committee. This letter
enclosed a copy
of such report and advised us that the Governing Committee
had deferred
action thereon until May 3, at which time an opportunity would
be given
to us to appear or submit a statement.
- The conclusion of the special report was that "the Committee on
List is forced to the conclusion that further discussion with the corporation
will prove unavailing." As appears in the report, this conclusion
based primarily on "reports appearing in the public press." On the
of these press statements the Committee on Stock List reported that at the
stockholders' meeting: (a) "no statement appears to have been
calling specific attention to the overstatement of current assets resulting
from" the balance sheet statement of marketable securities at cost;(b)"No
statement appears to have been made as to what part, if any, of the
contingency reserve was required to reflect any shrinkage in other current
assets"; and (c) that a statement was made to the effect that "there would
be no change in the company's method of issuing statements." On this
basis the report stated that the Committee on Stock List "reports the matter to the Governing Committee for such action as it may deem appropriate
in the circumstances." This report appeared prominently in the evening
papers of April 26, the date of the report, as well as in the morning papers
of April 27, although, as above stated, we received no word from the Exchange on the subject until we received on April 27 their above mentioned
letter of the previous day.
We consider that this precipitate and misleading action of the Exchange,
based on newspaper reports, and without previous communication with the
company on the subject, was altogether improper and unreasonable and
obviously injurious to the interests of the company and its stockholders.
The occurrences at the annual meeting which are referred to in the special
report were in fact largely the contrary of what was stated in the report.
As above pointed out, the presiding officers' statement did specifically call
attention not only to the fact that the current value of marketable securities


at Dec. 31 1932 was $28,000,000 less than cost, but also the fact that these
securities were shown in the balance sheet at cost, and also to the fact that
the difference was amply provided for in the reserves. Consistently with
the company's letter of April 21, no statement was made with reference to
any corresponding shrinkage in the balance sheet values of other current
assets—cash, accounts receivable and inventories—because there was no
such shrinkage. No one stated at the meeting "that there would be no
change in the company's method of issuing statements," or anything to
that effect. The Exchange knew as well as the company that consideration between them of various possible changes was then shortly to be resumed in accordance with the Exchange's letter of March 28 and the company's reply of April 21, above referred to.
By its sudden publication, without warning, of this unwarranted special
report, the Exchange apparently sought to transform what had previously
been a reasonable exchange of views between it and the company regarding possible voluntary changes by the company in the form of its annual
reports into a campaign by the Exchange to compel the company to make
such changes unwillingly by means of hostile and misleading public
This action by the Exchange raises fundamental questions regarding the
relationship between it and the companies whose securities it has admitted
to trading; and we will therefore state briefly our views in this connection.
The management of the Exchange is responsible to its members. Its primary object is, or should be,to provide a broad,free,fair and active market
for the purchase and sale of securities through its members, as brokers,
to their profit. The management of the company is responsible to its
stockholders. Its primary object is, or should be, to conduct its business
so as to yield the maximum of continuous earnings and dividends to the
profit of its stockholders. These different primary objects naturally lead
to somewhat divergent views on the part of the management of the Exchange and on the part of the management of a company whose securities
are admitted to trading on the Exchange in regard to the information which
the company should publish concerning its affairs. Hence, the agreements
which the Exchange requires of a company in this regard as a condition to
the listing of its securities. The management of the Exchange, we presume, would be the better pleased the more frequent and full a company
made its reports, and the greater the public interest thus inspired in trading
in the company's securities. The management of the company, on the
other hand,owes to its stockholders, not only a duty to report to them from
time to time regarding its affairs, but also a duty not to publish information
regarding its affairs which might be effectively used by the company's business adversaries to its disadvantage in the conduct of its business.
The management of the company is neither responsible to the members
of the Exchange in respect of the information to be published regarding the
company's affairs nor in any position to determine what the best interests
of the members are in that regard. The management of the Exchange is
neither responsible to the company's stockholders in respect of the information to be published regarding its affairs nor in any position to determine
what the best interests of the stockholders are in that regard. In connection with trading in a company's securities on the Exchange it is thus necessary that the management of the Exchange and the management of the
company, each representing their respective principals, should be in agreement as to what information the company will publish regarding its affairs.
If they agree, the securities can be admitted to trading. If they do not
agree, the securities cannot be admitted to trading. But neither the Exchange nor the company can properly undertake to settle the question for
Regardless of all other considerations, we consider that we are under
obligation to our stockholders not to permit publication of information
regarding this company's affairs which might be used by Its business adversaries to the company's disadvantage in the conduct of its business, and,
further, that we are under like obligation to determine freely whether any
particular kind of information is of this character; and so long as the stockholders continue us in the management of the company we propose to continue to discharge these obligations to the best of our ability. At the same
time we will continue to give full consideration to the wishes of the management of the Exchange in this regard so long as our stock remains listed
on the Exchange, with a view to proper accommodation of the interests of
the members of the Exchange and the interests of the company's stockholders. If, however, our considered conclusions at any time prove to be
unacceptable to the management of the Exchange, we do not propose for
that reason to adopt their different conclusions.
We have assured you informally of the baselessness of the unfavorable
gossip regarding the company which has recently spread abroad. This has
concerned principally the company's marketable securities. We wish now
to confirm the facts in this regard as previously stated to the Stock Listing
Committee. It has been suggested that by reason of these security holdings the company was more of an investment trust than a chemical manufacturer. The fact is, as the company's published balance sheet shows,
that these securities constitute less than a quarter of its assets. It has been
rumored that, although the balance sheet describes the item as "U. S. Government and other marketable securities," no substantial amount of U. S.
Government securities are included. The fact is that about $20,000,000
of U. S. Government securities are included. It has been rumored that the
balance of the item represents a speculative trading account, largely affecting the company's earnings. The fact is that it consists practically entirely
of the securities of six companies. Of these holdings, the chief are substantial holdings of the company's preferred and common stock. The others
are in the main holdings in other companies which are related to this company's operations, and for this reason we consider that it would be contrary
to the best interests of our stockholders to publish the list of these holdings.
All these securities have been held for years; there have been no sales
any of them at any time, except that in 1931 the company
decreased its
holdings in one other company by less than 20% and in another by less than
15%. None of these securities are current assets in the sense that
company contemplates cashing them in the near future, but
only in the
sense they are in fact readily marketable. The company has
never speculated in the security markets and never will under the present
Since the publication of the Exchange's special report on
April 26, we
have resumed our discussions with the Stock List Committee
in a sincere
effort to reach an accord with them upon such
changes In our annual
reports as would reasonably satisfy both the management
of the Exchange,
reflecting the interests of its members, and the management
of the company, reflecting the interests of its stockholders. In
the course of these
discussions we have sincerely endeavored to satisfy the members
of the
Committee as to the sufficiency of the bases for our judgment
that it would
be contrary to the best interests of our stockholders to
publish further
particulars of our income. In this respect we believe that
this company
Is to be distinguished from most whose securities are listed
on the Exchange.
Of course it is not a public utility. Furthermore, it has
never sold a share
of its stock or any other capital obligation. It does not
seek credit. There
are thus absent the usual bases on which companies may properly publish
information regarding their affairs in greater detail than the best interests
of their stockholders might otherwise warrant. This company's business,
moreover, has always been and is at the present time subject to competitive

Financial Chronicle


conditions of extraordinarily severe and far reaching character. We are
well aware that our principal competitors, particularly those abroad,
scrutinize every item of obtainable information regarding our business to
use against us. We do the same against them and we know very well how
a little information regarding their affairs picked up here and there and put
together can assist us in our efforts to defeat their competition.
As a result of our discussions with the Stock List Committee we have
arrived at the following conclusions regarding their suggestions as a basis
for a mutually satisfaCtory accord, viz., that in future annual reports to
stockholders we will show in the body of the financial statements or by note
at the foot thereof:
(a) Property account is carried at cost;
(b) Marketable securities are carried at cost;
(c) Basis of inventory value;
(d) U. S. Government securities separately from other marketable
(e) Amount of other marketable securities which are listed on the Exchange or the Curb:
(f) Market value of U. S. Government securities;
(g) Market value of other marketable securities;
(h) Amount of reserve for depreciation of marketable securities;
(1) The item of further surplus consists of a specified amount of earnings
accrued to the company since its organization and a specified amount of
earnings accrued to its constituent companies prior to the company's
(j) Amounts of the company's preferred and common stock held in the
company's treasury, at cost, and the reserves provided, if any, to cover the
difference between cost and market;
(k) Any substantial amount of non-recurring items included in income;
(1) Dividends paid on the company's stock owned are included in income
or not as the case may be.
We have stated our views and our attitude about all these matters very
frankly because we believe that this course offers the best prospect of a
genuine and stable understanding between us in respect to the questions
Involved. We do not hope that you will agree with our views in all respects.
We do hope that you will understand clearly what they are and will appreciate that they are sincerely entertained; and we earnestly hope that you
will find acceptable our conclusions regarding the requested changes in our
annual reports.
Very truly yours,
(Signed) H. F. ATHERTON, Secretary.
• .
Annual Meeting of Stockholders
April 24 1933.
Remarks of Chairman of the Meeting.
We are pleased to note the interest which you, ladies and gentlemen,
have indicated in the affairs of the company by your attendance at this
You are all fully aware of the severity of the depression and of the attendant decline in commodity consumption by the basic industries which
we serve, such as steel, agriculture, oil, textiles, glass and building. A
decline in commodity consumption is always accompanied by intensification of competition. While costs of production, with the exception of
taxes, are largely within the control of the management, selling prices are
Invariably determined by competition. The decline in price levels of the
company's products during the past year has been accelerated in part by
depreciated foreign currencies and by the dumping of foreign commodities
Into the domestic market.
You have all received copies of the annual report for the year 1932. A
very large percentage of our present stockholders have also received copies
ofour reports each year since the company was incorporated. It has always
been the policy of the company to present to the stockholders in the annual
reports the essential information as to the company's financial status and
the results of its operation in a simple and consistent form, thus affording
a continuity of record. From an examination of the reports since organization you will note that: The company's total assets have increased from
$282,000,000 to $408,000,000. Funded debt has been eliminated and
current liabilities other than for dividends to stockholders have been substantially reduced. Total reserves have increased from $72,000,000 to
$191,000,000. Surplus has increased from $126,000,000 to $159,000,000,
notwithstanding the transfer in 1931 of $40.000,000 from surplus to reserve
for general contingencies to protect the company's assets and operations
against future contingencies. During the period, in addition to two stock
dividends of 5% each on the common stock, cash dividends amounting to
$163,000,000 have been paid to stockholders.
U. S. Government and other marketable securities carried under current
assets, aggregating $92,400.000, stated at cost, had a market value as of
Dec. 31 1932 of approximately $28,000,000 less than cost. The reserves
which have been provided are ample to take care of this depreciation.
As to results for this year to date, I may state that while net earnings
for the first quarter of 1933 have fallen short of dividend requirements,
the company's liquid position remains unimpaired. Cash dividend on the
common stock has been declared payable May 1 1933 at $1.50 per share,
which is the rate maintained since 1926.
Report and Recommendation of the Committee on Stock List to the Governing
Committee New York Stock Exchange May 24 1933.
Notwithstanding prolonged negotiations with Allied Chemical & Dye
Corp.. no agreement has been reached in regard to the information to be
furnished presently to stockholders or in regard to the future publication
of the balance sheet, surplus and income account of this corporation in a
manner which, in the opinion of the Committee on Stock List, would furnish stockholders with information essential to a proper understanding
of the condition of the corporation and of its operations.
Accordingly, the Committee on Stock List recommends to the Governing Committee that the preferred and common stock of Allied Chemical
& Dye Corp. be stricken from the list of the New York Stock Exchange on
Aug. 23 1933, unless prior thereto the corporation shall have furnished
stockholders with adequate information in regard to the present condition
of the company and shall have entered into an agreement with the Exchange, satisfactory to the Committee on Stock List, as to the manner in
which the financial reports of the corporation will be published in the
Resolution Adopted by Governing Committee May 24 1933.
Upon motion duly made and seconded. it was unanimously resolved that
the preferred and common stock of Allied Chemical & Dye Corp. be stricken
from the list of the New York Stock Exchange on Aug. 23 1933. unless
prior thereto the corporation shall have furnished stockholders with ade-

June 3 1933

quate information in regard to the present condition of the company and
shall have entered into an agreement with the Exchange, satisfactory to
the Committee on Stock List, as to the manner in which the financial reports of the corporation will be published in the future.
Orlando F. Weber. Esq., President,
Allied Chemical & Dye Corporation,
61 Broadway, New York, N. Y.

May 24 1933.

Dear Sir:
The letter of May 24, signed by the Secretary of your company and
addressed to the Governing Committee of the New York Stock Exchange.
was duly received and submitted to the Governing Committee at its meeting this afternoon.
I am directed to inform you that, after due consideration, the Governing Committee unanimously adopted a resolution upon the recommendation of the Committee on Stock List. I enclose herewith a copy of such
recommendation and resolution for your information.
I am further directed to inform you that the President of the Exchange
will send you shortly a communication which will answer in detail the various
matters referred to in the above mentioned letter of May 24.
Very truly yours,
(Signed) ASHBEL GREEN, Secretary.
Mr.Orlando F. Weber, Esq.,President,
Allied Chemical & Dye Corporation.
61 Broadway, New York. N. Y.

May26 1933.

Dear Mr. Weber:
A communication addressed by your corporation to the Governing Committee of the Exchange under date of May 24 1933 was duly received and
submitted to the Governing Committee at its meeting held on May 24
1933. After due consideration,and upon the recommendation of the Committee on Stock List, the Governing Committee unanimously adopted the
following resolution, which has already been furnished to you:
"Resolved, That the preferred and common stock of Allied Chemical
& Dye Corp. be stricken from the list of the New York Stock Exchange
on Aug. 23 1933, unless prior thereto the corporation shall have furnished
stockholders with adequate information in regard to the present condition of the company and shall have entered into an agreement with the
Exchange, satisfactory to the Committee on Stock List, as to the manner
In which the financial reports of the corporation will be published in the
A letter from the Secretary of the Exchange enclosing a copy of the resolution was sent to your office immediately after the adjournment of the
Governing Committee, meeting Wednesday evening. Unfortunately,
your office had already closed, and the messenger, finding it impossible to
deliver the letter by hand, thereupon mailed it to you.
Before stating the reasons which actuated the Governing Committeain
adopting this resolution, I feel I should refer to the history of the negotiations between your company and the Exchange. When we first brought
up for discussion, in December 1929, the question of more informative
financial statements, we also took up with you the question of certain
changes which we thought necessary In the form of your agreements with
the Exchange. You confined the lengthy discussion, when you appeared
before the Committee,almost entirely to the matter of the proposed changes
in the agreements entered into by your company as a condition of listing,
and eventually agreed to certain changes, though failing to meet fully the
Committee's views.
In our letter to you of Dec. 311929, to which your communication refers,
we advised you specifically that we believed it to be essential in the public
interest that our requirements and practices should keep pace with the
changes in business customs and conditions which from time to time occur.
We further advised you that the Committee had given favorable consideration to your pending application because it was aware that you might
not have been sufficiently advised of the policies of the Stock Exchange
to give them due consideration. We denied the contention that the form
of any application anti the agreements contained therein fixed the status
of future applications and agreements with the company. We expressed
our disappointment that our efforts to secure your co-operation had met
with so little success. When your application of December 1930, was
presented, we took up again with you questions of both agreements and
financial statements.
On each of these occasions your board of directors had declared a stock
dividend payable on Jan. 3 of the succeeding year, or as soon thereafter
as the additional stock was granted listing. The applications were presented in the early part of December, and therefore the time for discussion
as to changes in your financial reports was strictly limited, unless the
Committee on Stock List was willing to force a delay in the payment'of
the stock dividends to your stockholders. The listing of the additional
stock, under such conditions, I submit, can not be construed as approval
of the financial statements to which we were objecting.
I deny that the publication of the special report was in any way precipitate or misleading. The exact contrary Is the case. The requests contained in our letter to you of June 23 1932 were specifically denied in your
Secretary's letter of Aug. 17 1932. We would have been fully justified in
taking then the action which we have taken now. In an effort, however.
to avoid just the situation which has now occurred, we wrote advising you
of our intention to submit the correspondence to each of your directors.
On Aug. 25 1932 you stated that you would yourself have this done, and
that we would be advised of the action taken. However, the first definite
information which we had as to your final position was when we received a
Cony of your printed annual report on March 17 1933, nearly seven months
later, containing a sentence in your letter to stockholders reading:
"The balance sheet and the income account of the company for 1932 are
in the same form in which they have been previously stated."
Since this fact was perfectly manifest without the sentence in question,
we deemed this a final answer to our request.
We were still anxious, however, to avoid the necessity for drsatic action,
as to the possibility of which you had been fully advised the previous August.
We wrote, therefore, our letter of March 28 1933. No reply was received
until April 21, when we were advised of a verbal statement which it was
proposed to make at the forthcoming stockholders' meeting. This reply
indicated that the only concession which would be made was a statement
of the difference between the figure at which "U. S. Gov't and other marketable securities" were carried on your balance sheet, and the market value
of these securities. Far from being a satisfactory compliance with our
request, this communication indicated that you proposed to make an
announcement at the meeting of stockholders substantially similar to the
one which you had made at the preceding annual meeting, We had spedfically pointed out in our letter of March 28 that we did not consider such
a statement sufficient.

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Volume 136

The proceedings at the stockholders' meeting were convincing evidence
that up until that time there was no intention of complying with any of the
requests contained in our letter dated ten months earlier. We did not rely
upon the press reports of the meeting without having in our possession a
stenographic transcript of what had been said which fully confirmed these
Under these conditions, the Committee on Stock List had no choice
other than to bring the matter to the attention of the Governing Committee, and that Committee, in fixing the date on which it would consider
the matter, endeavored to give you ample time to make any statement
which you thought relevant to the matters under discussion. This was
afterwards extended from May 3 to May 10, and then until May 24. The
matter had been under discussion on the last named date for 11 months.
Surely this does not indicate any precipitancy upon our part.
Your implication that the Exchange is primarily interested in these
questions from the standpoint of securing for its members activity in the
market is not warranted. No such thought has ever influenced our listing
policies. Our interest has been, from the beginning, in the proper protection of stockholders through securing for them reasonable information.
In regard to the main question under discussion, the Governing Committee has been advised that on Monday of this week you appeared before
the Committee on Stock List to submit certain suggestions looking toward
an agreement with the Exchange in regard to your financial statements.
and also for the purpose of stating to the Committee the reasons why you
felt that a more complete disclosure of the income account of your company
would be detrimental to the best interests of your stockholders. Towards
the close of that meeting, and after you had fully expressed yourself in
regard to the competitive conditions existing in the chemical industry,
a question elicited the fact that your company had included under current
assets, and as part of the item designated as "U. S. Gov't and other marketable securities" substantial holdings of your own preferred and common
stocks. No statement as to the extent of these holdings was made other
than that they were substantial, but it appears from your letter to the
Governing Committee that holdings of your own stock constitute the most
important Item of the so-called "other marketable securities." This disclosure immediately raised serious questions which had not theretofore
been under consideration.
We can see no justification for this procedure, which you have advised
us has been continued since 1929. While custom has, in some instances,
sanctioned the inclusion of a corporation's own stock among its assets,
this can not be justified unless the facts are fully disclosed. Furthermore,
under the existing conditions, there is no justification for including such
holdings among current assets.
In the financial reports of your company since 1929 there has been no
indication, either in the balance sheet or in the income or surplus accounts,
which would lead stockholders to believe that your company had purchased
either its own preferred or common stocks. On the contrary, the statement
of surplus against which you have annually charged the amount of dividends paid has shown a deduction from surplus equal to the current rate
of dividend on the entire amount of preferred and common stock which
was issued and supposedly outstanding in the hands of the public. This
form of statement tended to make stockholders believe that your company
had not purchased its own shares.
The above described method of reporting the dividends paid by your
company necessarily casts doubt upon the validity of the income statement
of your company. When this fact was pointed out to you, you stated that
the amount of these dividends had not been included in the income account
because a corresponding sum had, simultaneously, been credited to an
unspecified reserve account. This explanation of the manner in which
the dividends on stock held by the company had been included in your
financial statements does not solve the problem. If it is improper for a
corporation to increase its income by including therein dividends on its
own stock (and this, of course, would be particularly true where the dividends paid were not fully earned, as was the case with your company in
1932, according to your published reports for that year). it is equally improper for a corporation to credit such dividends to some reserve account
without disclosing the relevant facts to stockholders.
In view of this development, the Committee felt that it was bound to
Insist upon a more informative income account.
While we recognize that the management of a company producing highly
competitive products must withhold detailed information in regard to the
cost of production and cost of sales, the interests of the stockholders which
would be served by a failure to disclose such information must be balanced
against the danger inherent in permitting a corporation which enjoys a
public market for its securities to submit annual statements which reflect
Inaccurately the results of its operations. Since you do not disclose the
amount of your annual appropriation for depreciation, or obsolescence.
It is possible to increase or decrease these at pleasure. It has also been developed at our hearings that income from securities and the above mentioned dividends upon your own reacquired stock, as well as non-recurrent
Items such as a large tax refund, may have been credited more or less directly
to reserves. Within wide limits, therefore, the lack of information as to
details of your income account makes it possible for the management of
your company to vary the reported income up or down, at pleasure, and
makes it impossible to compare intelligently the income account of one year
with that of another. We do not say that this great power has been
abused. We do say that it ought not to exist. After considering these
facts, the Governing Committee concluded that the income account of
your company, as it has been reported in the past, amounts to nothing
more than a statement of an arbitrary amount which the management
and directors of your company have elected to call "Income."
We have considered, carefully, your statements that to give the information requested in our letter of June 23 1932 would be helpful to your competitors. For this reason we initially omitted any request to show sales
or cost of sales, and have since verbally withdrawn the request that general,
selling and administrative expenses be shown. In view of the fact that
your company produces over 5,000 different products, we find it impossible
to believe that the mere statement of your net operating profit would furnish your competitors with any useful information. The arguments which
you have presented against disclosing further information in regard to your
income account are identical with those advanced by you in support of your
former contention, from which you have now receded, that no changes
should be made In your balance sheet.
As stated above, it seems probable that certain items which should have
been reflected in your income or surplus accounts have been charged or
credited directly to reserves. This practice is likewise objectionable.
Without questioning your sincerity, we are equally sincere in feeling that
the requested information is essential if the securities of your company are
to remain listed upon an organized stock exchange.
In order that the stockholders of Allied Chemical & Dye Corp. may fully
understand the reasons for the action taken by the Exchange, we feel it is
necessary to publish our recent correspondence.

Faithfully yours,
(Signed) RICHARD WHITNEY, President.


Milton Hayman, Former Member of Failed Firm of
Hayman & Hayman, Reinstated as Member of New
York Curb Exchange.
On May 25, the Board of Governors of the New York
Curb Exchange reinstated to regular membership, Milton
Hayman, who was a floor member of the firm of Hayman &
Hayman, which was suspended from the Exchange on
July 11 1932, for insolvency.
0- Mr. Hayman, who was admitted to membership on the
Exchange on April 27 1921, will trade as an individual, the
former partnership having been dissolved.
Trial of Isidor J. Kresel for Charges Growing Out of
Failure of Bank of United States Adjourned to
Sept. 15—Supreme Court Justice Taylor Grants
Delay at Request of Counsel John W. Davis.
Supreme Court Justice George H. Taylor Jr. of Westchester County,in the Criminal Courts Building on May 22,
adjourned the trial of Isidor J. Kresel on charges of misuse of
the funds of an affiliate of the Bank of United States of
which he was a director and counsel, until Sept. 15. We
quote the following from the New York"Times" of May 23:
The adjournment was requested by John W. Davis, counsel for Mr.
Kresel, because of other engagements, and was not opposed by Assistant
District Attorney James G. Wallace.
Justice Taylor. who Is to preside at the trial at the request of the Appellate
Division, granted an application by Mr. Wallace for a special panel\ of
Jurors because "an ordinary Jury cannot be obtained without delay and
difficulty." The Court signed an order directing that a panel of 150 be
drawn at the office of the Commissioner of Jurors on Sept. 15. Mr. Davis
opposed the application.

New York State Stock Transfer Tax Law—Communication to New York Stock Exchange from F. S.
McCaffrey, Deputy Commissioner of Department
of Taxation and Finance.
The New York Stock Exchange has received the following
communication, dated May 25, from Frank S. McCaffrey,
• Deputy Commissioner, Department of Taxation and Finance
of the State of New York, it was made known on May 26 to
members of the Exchange by Ashbel Green, Secretary:
Your attention is called to the provisions of Chapter 643 of the Laws of
1933, effective June 1 1933, changing the tax on transfers of stock and other
taxable certificates from a par value basis to that of selling price. By this
amendment the rate of tax is fixed at Sc. per share on stock selling under
$20 per share and 4c, per share on stock selling at $20 and upwards per
By the terms of the Act the rate of tax on taxable certificates, which are
transferred but not sold, is Sc, per share.
To aid in the carrying on of business between stock brokers, banking
Institutions and transfer agents, it is deemed advisable to permit the following certifications, which may be imprinted on certificates presented for
On certificates presented for transfer, when the sale or transfer of title
occurred prior to June 1 1933, tax at the rate imposed prior to that date is
permissible. Such transactions must bear a certification as follows:
This is to certify that the sale of these shares or the transfer of title
thereto was made prior to June 1 1933,
Broker, custodian or transfer agent
On certificates presented for transfer when no sale has occurred, but under
the language of the Act are taxable, certification may be made as follows:
The undersigned hereby certifies that the transfer of the within shares
does not constitute a sale. Tax is paid at lower rate.
Broker or custodian.
Transactions on which the selling price is less than $20 per share, the
following certification may be imprinted on certificates presented for
This is to certify that the transfer of the within shares represents a sale
In which the selling price was less than $20 per share.
Broker or custodian.
Transfer agents are permitted to accept certificates presented for transfer
bearing either of the above certifications, exacting tax on the basis of the
Transfer agents are also granted permission, for the period beginning
June 1 and ending at the close of business June 10 1933, to accept certificates
for transfer without either of the above certifications, that is to say, for
that period they are relieved of the responsibility of exacting proof or certification that tax affixed at the rate of 3c. per share is warranted. This
relief is granted to clear up incampleted transactions.
Chapter 455 of the Laws of 1933 exempts from tax transfers from an
owner to a custodian, where the certificates are to be held or disposed of
by the custodian for and subject to the instructions of the owner, or from
such custodian to the owner, or from such custodian to his nominee, or from
one nominee of the custodian to another, or from the nominee back to the
custodian, provided the stock continues to be held for the same purpose.
On all such transactions certifications must be imprinted on the certificates
presented for transfer bearing the following language, depending on the
particular transaction:
We hereby certify that the transfer of the within shares represents a transfer from the owner thereof to us as custodian or to our nominee, to be held
or disposed of subject to the instructions of the owner.
We hereby certify that the within shares standing in the name of our
nominee are being transferred to us or another nominee of ours to be held
for the same purpose as they would be held if retained by us as custodian.

Financial Chronicle


We hereby certify that the transfer of the within shares represents a
transfer from us as custodian, or our nominee, to the owner thereof, heretofore held by us as custodian.
Chapters 454, 455, 472 and 643 of the Laws of 1933 all amend the stock
transfer tax law. The Department has ruled that while Chapters 454, 455
and 472 specifically mention only Section 270 of the law, and also that the
effective date for each of the three last mentioned Chapters is April 26,
and that for Chapter 643 is June 1, all of the Chapters are to be considered
as amending both Sections 270 and 270-a of the Act and should be read and
construed as a whole when applying the statute.

Ruling on Bond Purchases Amended by New York
Stock Exchange.
Green, Secretary of the New York Stock Exchange,
notified members of the Exchange on May 27 that the Committee of Arrangements has amended its ruling dated Aug.3
1932, to read as follows:
If a member purchases bonds from another member without specifying that
his bid is a "next day" bid, and if subsequently a disagreetnent develops as
to whether the transaction was mode for "next day" delivery or for "delayed
delivery," as provided in Paragraph B of Section 7 of Chapter I of the
Rules, and neither party can produce a witness, then the transaction shall
be considered to have been made for "delayed delivery."
If either member has reported the transaction as having been made for
"next day" delivery, such member shall, unless specifically permitted by
the Committee of Arrangements to do otherwise, render immediately a corrected report, which shall be binding upon all parties concerned provided
that the change is made before 2:15 p. m. of the next business day, or before
11:30 a. m. if such next day is a half holiday observed by the Exchange.
If the change is not made prior to such hour, and if such member then clears
the transaction at his own expense, he must pay an additional transfer tax
(unless the bonds are exempt from transfer taxes) and shall not charge any

New York Clearing House Lowers Interest Rates.

This week the New York Clearing House reduced the interest rates paid on deposit by Clearing House institutions.
This action follows an increase in rates which was put into
effect by the Clearing House in April, and to which we referred in our issue of Apr. 15, p.2522. In the case of demand
deposits the rate to banks, trust companies and private
banks was lowered this week from M% to 3,4%; the rate to
mutual savings banks and to others is likewise cut from M%
to %. The rate of interest on time deposits payable after
90 days is reduced from 1% to 34%•
The change in rates was announced as follows on May 31
by the Clearing House:
77-83 Cedar Street.
New York, May 31st 1933.
Dear Sir:
Acting under the provisions of SECTION 2,ARTICLE XI of the Clearing
House Constitution, relating to interest on deposits to be paid by Clearing
House institutions, we beg to advise you that the following maximum rates
have been fixed, effective Friday, June 2nd 1933:
On Certificatesrof Deposit Payable Within
90 Days of Issue or Demand, and on Credit
BalancesPayable on Demand or Within 90 Days
of Demand

To Banks, Trust Companies and Private

To Mutua

On Certificates of Deposit
or Time Deposits, Which
by Their Terms are Payable
on or After 90 Days, But
Not More Than Six Months
From the Date of Issue or


Certificates of Deposit or Time Deposits payable more than six months
from date of issue or demand are not subject to regulation as to rate of
Interest payable, but are subject to other regulations. including ruling No. 15.
By order,
Clearing House Committee.

Reduction in Rediscount Rates of Boston and
San Francisco Federal Reserve Banks.

Two of the Federal Reserve Banks—Boston and San
Francisco—have this week followed the action taken last
week by the New York and Chicago Reserve Banks in lowering their rediscount rates. Mention of the reduced rates
adopted in New York and Chicago was made in our issue of
May 27, page 3633. On May 31 the Federal Reserve Bank
of Boston reduced its discount rate on all classes of paper of
all maturities from 334 to 3%,effective June 1. The previous
change had been an advance from 234 to 334% on Oct. 17
1932. The Federal Reserve Bank of San Francisco reduced
its rediscount rate, effective June 2, from 334 to 3%. The
last named rate had been in effect since Oct. 21 1931.

June 3 1933

New Offering of $75,000,000 or Thereabouts of 91
Treasury Bills—Will Be Dated June 7 1933.

Tenders to a new offering of 91-day Treasury bills to the
amount of $75,000,000 or thereabouts were invited on May 31
by William H. Woodin, Secretary of the Treasury. The
bills, which will be dated June 7 1933 and mature Sept. 6
1933, will be used to retire an issue of $75,266,000 which
matures on June 7. Bids to the offering will be received at
the Federal Reserve banks, or their branches, up to 2 p. m.,
Eastern standard time,Monday,June 51933. Tenders will
not be received at the Treasury Department, Washington.
The bills will be sold on a discount basis to the highest bidders
and on the maturity date the face amount will be payable
without interest. Secretary Woodin's announcement continued in part:
They will be issued in bearer form only, and in amounts or denominations
of $1,000, $10,000, $100,000. $500,000, and $1,000,000 (maturity value).
No tender for an amount less than $1,000 will be considered. Each
tender must be in multiples of $1,000. The price offered must be expressed
on the basis of 100, with not more than three decimal places. e. g., 99.125.
Fractions must not be used.
Tenders will be accepted without cash deposit from incorporated banks
and trust companies and from responsible and recognized dealers in investment securities. Tenders from others must be accompanied by a deposit
of 10% of the face amount of Treasury bills applied for, unless the tenders
are accompanied by an express guaranty of payment by an incorporated
bank or trust company.
Immediately after the closing hour for receipt of tenders on June 5 1933.
all tenders received at the Federal Reserve banks or branches thereof up
to the closing hour will be opened and public announcement of the acceptable
prices will follow as soon as possible thereafter, probably on the following
morning. The Secretary of the Treasury expressly reserves the right to
reject any or all tenders or parts of tenders, and to allot less than the amount
applied for, and his action in any such respect shall be final. Those subnutting tenders will be advised of the acceptance or rejection thereof. Payment at the price offered for Treasury bills allotted must be made at the
Federal Reserve banks in cash or other immediately available funds on
June 7, 1933.
The Treasury bills will be exempt, as to principal and interest, and any
gain from the sale or other disposition thereof will also be exempt, from all
taxation, except estate and inheritance taxes. No loss from the sale or
other disposition of the Treasury bills shall be allowed as a deduction, or
otherwise recognized, for the purposes of any tax now or hereafter imposed
by the United States or any of its possessions.

President Roosevelt Authorizes Purchase of $100,000,000
of Government Securities by Postal Sayings
Announcement that President Roosevelt had authorized
the Board of Trustees of the Postal Savings System to buy
$100,000,000 additional Government bonds or other securities was made on May 27, a White House statement in the
matter (May 27) saying:
Request of the Board of Trustees of the Postal Savings System for authority to purchase bonds or other securities of the United States to the
amount of $100,000,000 was approved to-day by President Roosevelt.
Previously the request had been approved by Postmaster-General Farley,
Secretary of the Treasury Woodin and J. Crawford Biggs, Acting AttorneyGeneral, all members of the Postal Savings System Board of Trustees.
The $100,000,000 purchase would be in addition to securities already
authorized for purchase by the Board of Trustees.
Power to grant the authority requested by the Board is conferred upon
the President by the Act of May 18 1916, which provides:
"When, in the judgment of the President, the general welfare and interests o
the United States so require, the Board of Trustees may invest all or any part o
the postal-savings funds, except the reserve fund of 5% herein provided for, in
bonds or other securities of the United States. (Sec. 2, Act of May 18 1918)."

On May 27 the Washington correspondent of the New York
"Journal of Commerce" said:
At the present time the Postal Savings System has more than $1,157,651,788 of deposits, much the highest on record. Authorization of purchase
bonds will make it possible to place these excess deposits in such bonds
from time to time.
The Secretary of the Treasury will supply the bonds either from old Issues
or new issues. The $100,000,000 will not all be purchased at once. . . .
The objective under the Postal Savings System is to take the deposits
given to the Government and place them back in the banks of the country
from which they came. There is a requirement, however, that such postal
savings deposits be collateraled by Government bonds up to 100%.

Statement by Secretary of Treasury Woodin Concerning Gold Clause Repeal—One Purpose to Make
Clear Future Government Obligations Will Not
Contain Clause.
Following the introduction in Congress on May 26 of the
joint resolution relating to the payment of obligations in
gold, making all coin or currency issued by the Government
legal tender for the payment of public and private debts,
Secretary of the Treasury Woodin issued a statement on
May 26 in which he said that one purpose of the resolution
"is to make clear that future obligations, public and private,
shall not contain the gold clause." It was pointed out In a
Washington account on that date (May 26) to the New York
"Times" that the resolution, being retroactive, would permit
the Government and corporations to redeem in any money
issued by the United States, current obligations containing
the gold clause. The "Times" dispatch continued, In part:
It also clarifies the wording of the Inflation amendment to the Agricultural Adjustment Act, which makes all money issued by the United States

Volume 136

Financial Chronicle

legal tender for the payment of public and private debts. Contracts drawn
up hereafter stipulating gold as the medium of payment would be illegal.
The provision of the Second Liberty Loan Act requiring that bonds, notes
and certificates issued by the Treasury should be payable in gold of the
present standard of value would be repealed.
Gold Act Held Unaffected.
The Act of March 14 1900, which is the gold standard law, would not be
affected by the resolution, officials declared. This Act provides that "the
dollar, consisting of 25.8 grains of gold nine-tenths fine . . . shall
be the standard unit of value, and all forms of money issued or coined by
the United States shall be maintained at a parity of the value of this standard, and it shall be the duty of the Secretary of the Treasury to maintain
such parity."
Secretary Woodin said the resolution had special significance with regard
to future issues of United States obligations. He explained that the Government would soon be issuing large amounts of bonds and that if the
resolution passed, they would not contain the usual stipulation as to pays,
bility in gold, as provided in the Second Liberty Loan Act.
Notes and certificates issued since the gold embargo in April have contained the gold clause in conformity with the law, even though payments
have been suspended on meeting all maturities. The Thomas Amendment
would permit the payment of such maturities and meeting of other obligations, specified as payable in gold, in any type of money issued by the
United States.
Coins Would Be Legal Tender.
One section of the resolution provided that coins and currencies issued by
the Government should be legal tender, except gold coin when below the
standard weight.
This was merely a restatement of the law which provides that when gold
is brought to the Treasury for redemption the coins are weighed, and if
below the 25.8 grains of gold, nine-tenths fine, the actual value only is paid.
Gold coin long in circulation may be worn sufficiently to reduce its value
from the amount stated on the face.
The gold resolution was drafted in the Treasury Department at President
Roosevelt's direction. In effect, it puts into statutory form the currency
policy adopted with the advent of the new Administration, under which gold
payments were suspended indefinitely and a partial embargo placed on gold
It removes confusion which arose. particularly among railroads and other
corporations with large volumes of outstanding gold bonds. As the country
was definitely off the gold standard under Presidential proclamation, the
resolution would make no change in this situation.
The provision that gold should be stipulated as the medium of payment
for Government securities, repealed by the resolution, was written into the
law at a time of currency uncertainty, so that a purchaser of bands could
be assured of full payment in terms of a standard fixed dollar at their
No Effect on War Debt Position.
The resolution would have no effect on the position of this country with
relation to the possible payment of the war debts June 15, when $40,791,840
In principal and $102,813,454 In interest are due.
Under the Thomas amendment any lawful money of the United States
may be employed for the payment of debts. Therefore, the foreign governments. if they desired to pay, could obtain dollar exchange at a discount
In foreign markets with which to make the remittance. This Government
could hardly demand payment in gold when it declined to fulfil its own
obligations in gold.
Treasury experts said that there was no accurate estimate of the volume
of outstanding corporate gold bonds. The Government's public debt, normally payable in gold, is about $21,824,000,000. . . .
Secretary Woodin said that the National Metal Exchange had not been
asked for advice as to a plan for stabilization of gold, nor had any monetary
question been taken up with that organization so far as he knew.

The statement issued May 26 by Secretary Woodin
A joint resolution was introduced to-day in both houses of Congress designed to clarify the effect of recent legislation upon the status of the
"gold clause" in public and private obligations. This resolution has the
support of the Administration.
Since March 6, when the President declared a bank holiday, transactions
involving payments in gold have been brought under control in order to protect and maintain the supply which constitutes a reserve for the nation's
currency. Gold is not now paid, nor is it available for payment, upon
public or private debts.
Recently the Thomas amendment to the Agricultural Relief Act has made
all coins and currencies of the United States legal tender for the payment
of every debt public and private. Due, however, to the language used, doubt
has arisen whether obligations expressed to be payable in a particular kind
of money, such as gold coin, may be satisfied by payment in other forms of
legal tender.
While the Supreme Court of New York is reported to have held, in a recent
case, that an obligation calling for payment in gold coin could be satisfied
by payment of other lawful forms of money, confusion may be created if the
existing legislation is differently construed in other jurisdictions. One of
the purposes of the resolution is to remove any doubt and to avoid confusion,
so that debtors and creditors may have a clear definition of their legal
Another purpose of the resolution is to make clear that future obligations,
public and private, shall not contain the gold clause. The Thomas amendment did not contain specific provision to this effect. Such a provision is
contained in the resolution.
The resolution makes it clear that all obligations past and future will
be upon the same footing.

Senator Fletcher's Statement Regarding Purpose of
Resolution Placing "Gold Clause" Obligations and
New "Legal Tender" Obligations on Same Footing.
With the issuance by Senator Fletcher, on May 26, of a
statement on the resolution repealing the gold clause in
public and private contracts, it was stated that Senator
Fletcher's statement was prepared at the Treasury and represents the official view respecting the resolution. The New
York "Times," in its advices from Washington, May 26, reporting this, also said:


President Roosevelt regards the legislation as a simple proposal to legalize
a de facto situation. A statement made public by Senator Fletcher, who is
Chairman of the Senate Committee on Banking and Currency, explains fully
the position of the Administration, it was said on behalf of the President.
The President holds that the resolution in no wise involves the inflation
policies of the Government, nor will it, in his opinion, have any effect on
the coming economic conference in London.
The view of the President is that the legislation was necessary due to
possible complications that might be created by court decisions if the Thomas
amendment were permitted to remain in force as written. What the Government is doing, in the opinion of the President, is to inform the people that
they cannot retain gold in their possession, and that paying in gold would
be merely going through a "rigmarole," since the Government would immediately take possession of the gold.

From the same paper we take, as follows, Senator Fletcher's statement:
Certain questions of interpretation have arisen with respect to the legialation empowering the President to prevent the withdrawal and hoarding of
gold and the provision in the Thomas amendment making all coins and currencies legal tender for all debts.
Additional and immediate legislation is necessary to remove the disturbing effects of this uncertainty and to insure the success of the policy by
closing possible legal loopholes and removing inconsistency.
(1) By the Emergency Banking Act and the existing Executive order
gold is not now paid or obtainable for payment on obligations public or
private. By the Thomas amendment currency was intended to be made legal
tender for all debts. However, due to the language used, doubt has arisen
whether it has been made legal tender for payments on gold-clause obligations, public and private. This doubt should be removed.
These gold clauses interfere with the power of Congress to regulate the
value of the money of the United States and the enforcement of them will
be inconsistent with existing legislative policy. The Government should
have specific authority to control its gold resources. Furthermore, private
debtors with gold-clause obligations are entitled to protection and a prompt
and clear definition of their legal position.
To End "Uncertainty in Business."
(2) Future issues of a Government obligation should be payable in lawful currency of the United States and not in any specific coin. To promise
to do otherwise under the present circumstances would open the Government
to severe and merited criticism. This, however, requires legislation amending existing statutes relating to Government obligations. It is essential that
all obligations of the Government, past and future, be treated alike.
(3) In making all Wills and currencies of the United States legal tender
the Thomas amendment has created confusion, which was not intended in
the provisions of the pre-existing law relating to gold coin when below
standard weight, subsidiary coins and minor coins. Philippine coins may
also have been made legal tender for payment of debts in the Continental
United States contrary to real intent. These uncertainties should be
It is of the utmost importance that legislation along the lines of that
suggested in the attached draft be enacted immediately because:
(a) It completely regularizes the present de facto situation as to both
public and private debts.
(b) An offering of Treasury obligations must be announced on June 5
and issued June 15. It is essential that no question as to the good faith of
the Government be raised in connection with this issue or future issues .
(c) It would greatly facilitate administration of orders against hoarding.
(d) It would eliminate existing uncertainty in business.
(e) It places old "gold clause" and new "legal tender" obligations on the
same footing in respect of payment.
(f) It makes certain of accomplishment the declared policy of Congress.

The introduction of the resolution repealing the gold
clause was referred to in our issue of May 27, page 3635.
Representative Steagall Reported as Holding That
Resolution Making All Moneys Legal Tender Repeals Gold Standard Act.
Incident to the introduction in the House, on May 26, of
the gold resolution by Representative Steagall, the New York
"Times," in Washington advices that day, said:
Steagall Sees Great Advance.
Immediately after introducing the measure in the House, Representative
Steagall declared it to be a "declaration of the economic independence of the
United States."
"I give it as my humble judgment," said Mr. Steagall, "that this legislation marks a final, definite and determinate step. the taking of which will
bring a revival of business and the restoration of prosperity and happiness
to the people of the United States.
"This is the President's bill, and its passage will mean that the United
States has declared by statute its abandonment of any obligation to maintain
the gold standard as a permanent law of this country."
Differing with some others, Mr. Steagall held that the new move was a
"repeal of the Gold Standard Act." Going on, he said:
"With the enactment of this legislation, which of course is certain, no
bonds, notes, securities or other obligations, whether public or private, will
have to be paid in gold. They will be payable in United States currency.
"Furthermore, the bill is retroactive. Also I will say that future obligations of the Treasury will be floated under the provisions of this Act. The
bill applies to everything owed by or to the United States or its citizens. The
passage of the bill will mark the greatest advance in the interest of the
people ever taken by a legislative body of this or any other country."
Representative Goldsborough, also a member of the Banking and Currency
Committee, said be wished to endorse every word said by the Chairman.

On May 29, when the resolution (which we note elsewhere)
was passed by the House, the New York "Times" reported
the following from Washington:
Steagall Eaplains Need of Move.
Defending the resolution, Mr. Steagall, the Banking Committee Chairman,
declared that the occasion for the declaration that the gold clause was contrary to public policy arose out of the experiences of the present economic
These gold clauses, he said, rendered ineffective the power of the Government "to create a currency and to determine its value," and, that being so,
the only alternative was enactment of the resolution.


Financial Chronicle

Two developments of the emergency he added, made the legislation
necessary, the first being the tendency to hoard gold, the second the tendency
of capital to leave the United States.
"There can be no substantial question," said Mr. Steagall, "as to the
constitutional power of Congress to make this legislation applicable to all
obligations, whether public or private, whether of the past or in the future.
The power of Congress in this matter is express and undoubted.
"So far as the future is concerned, the power to borrow, both of the
Government and of private interests, will be seriously impaired unless outstanding obligations and future obligations are placed on the same footing
In respect to the medium of payment."

Opposition to Gold Clause Repeal Resolution Voiced
by Senators Glass and Reed—Repudiation of Contracts by U. S. Unconstitutional, Says Virginia
Noting that strong opposition was expected to develop to
the Fletcher-Steagall resolution which was introduced in
both houses on May 26, at the instance of the Administration,
and which would repeal the gold clauses in legislation of
1900, the Second Liberty Bond Act, and subsequent legislation, a dispatch on that date from Washington to the New
York "Herald Tribune" added:
This was made plain by Senator Carter Glass, Democrat of Virginia, former Secretary of the Treasury, who called the proposal unconstitutional. He
objected especially to its retroactive effect.
Senator Glass said:
"The proposal to repudiate all outstanding gold contracts is unconstitutional and the courts will so hold if there is any integrity left in the courts
with regard to the sanctity of contracts. It is utterly useless to enact this
legislation with 40% of the gold in the world in this country."
The language of the Virginia Democratic veteran, long a champion of the
gold standard, was no more pointed than that of Senator David A. Reed,
Republican, of Pennsylvania, also a gold standard adherent.
Senator Reed, when informed of the resolution and the fact the Administration was back of it, said: "That is terrible. It means plain repudiation
and it will hurt the credit of this country for a hundred years."
Senator C. L. McNary, Republican leader of the Senate said he had not
made up his mind as to how he would vote, but added: "Because of the
retroactive feature of the legislation proposed, there is certain to be considerable opposition."
Senator Henry F. Ashurst, Democrat, of Arizona, Chairman of the
Judiciary Committee, said: "The proposal is fully in accord with established
law. The Government has the right to establish legal tender."

How Debts Can Be Paid with U. S. Off Gold Basis.
On May 28, Associated Press accounts from Washington
What going off the gold standard will mean:
Government bonds need not be redeemed in gold, but can be paid in any
legal money.
Private debts, such as mortgages, can be paid in any legal money regardless of whether the original contracts stipulated gold.
The war debts owed by foreign countries can be paid in any legal money
gold not being necessary.
It will be unlawful to stipulate gold, in contracts made hereafter, as the
medium of payment.
All coins and currency legally issued will become legal tender for payment
of public or private debts.

Canada's Interest in Repeal of Gold Clause by United
States—Move Here Would Lessen Payments to
United States.
Canadian Press advices from Ottawa, May 26, stated:
The progress in Congress of the new gold measure will be closely watched
In Ottawa. Monetary experts here expected that Washington would take
some such action in view of the litigation which going off the gold standard
and refusal to pay gold bonds in gold appeared to invite.
Most Canadian external gold bonds are held in New York or London. A
recent court decision in Great Britain held that since gold was not available
in the United Kingdom, debtors could satisfy the holders of gold bonds there
by paying in sterling.
Until the United States went off the gold standard in April, all commitments of Canada in New York had to be paid on the gold basis. Since the
United States went off the gold standard the dollar has fallen some 15 to 16%
below gold.
If the measure is successful, financial authorities here say, it will mean
that instead of paying New York debts in terms of gold, which was well
above 30% premium to-day over the Canadian dollar the debt could be met
by United States funds, which closed at a premium of 141%. In
meantime, Canadian gold would go to London, where to-day it brought
$27.44 an ounce, whereas par is $20.67.
The interest payments clue in New York on Canadian bonds—Dominion,
direct and guaranteed, provincial direct and guaranteed, municipal and
corporations, for the present calendar year was $156,731,324 and the
principal due was $100,392,776.

Bill Repudiating Gold Clause by U. S. Assailed by
British Press—Roosevelt Plan Repudiation, Says
Financial Editor of London "Times."
Indicating that strong criticism of the United States was
being made in the British press over the Steagall bill to
abolish the obligation to pay debts in gold, a London cablegram, May 28, to the New York "Times" went on to say:
"Repudiation of the gold clause may be held to be justified, as Walter
Lippmann sought to justify it, on the ground of public policy and interest,
but it is none the less repudiation," writes the financial editor of the London
"Times." "It is true that to determine the value of money is one of the
attributes of sovereignty, but to draw a parallel between the losses sustained by America's deliberate stoppage of gold payments and the subsequent repudiation of the gold clause is to confuse the issue."
Under the heading "Legalizing the Fraud," the "Financial News"
editorially says:

June 3 1933

"It does not go to the length of sabotaging the World Economic Conference in advance, but it is bad enough. It is bad enough that a civilized
country having 40% of the world's gold should descend to the trick of
locking up that gold and declaring to its creditors it has lost the key and
cannot pay them. It is bad enough that a civilized country, to quote the
New York 'Times,' should by a formal Congressional act repudiate a
solemn, explicit engagement of which the Government has long since obtained the fruits.
"The capitalist system has survived many shocks and doubtless will
survive this one, but a contract is the whole basis of capitalism, and the
deliberate shattering of contracts on this scale must leave its marks on the
system for generations to come."
After expressing the hope that the Supreme Court and the sanctity of
the Constitution may prevent this "colossal injustice" from being finally
ratified, the "Financial News" concluded:
"But history yields no evidence that there is any way of frustrating an
embarrassed and unscrupulous sovereign from debasing the currency of his
subjects if he really is intent on doing an, And in the face of recent events
it would be plainly foolish to count on any juridical obstacles being able to
impede Roosevelt from carrying through his modern rendering of the coin
clippers' art."

U. S. Money Policy Criticized by Charles Boissevain at
Congress of International Chamber of Commerce—
Move Off Gold Condemned—British Delegate Says
Settlement of War Debts Must Be Made to Improve
In Associated Press advices from Vienna May 20 to the
New York "Times" it was stated that the Seventh Congress
of the International Chamber of Commerce was enlivened
by a denunciation of what was called the "immoral" monetary behavior of the United States. The account continued:
In the finance and industry section, Charles Boissevain of Holland was
applauded when he declared that the International Chamber of Commerce
should defend not only sound business spirit but should also watch over
"real business morality."
Ile condemned the behavior of those nations which abandon the gold
standard "although unquestionably in a position to maintain it." He
condemned also what he described as the "repudiation" of the gold clause
in contracts by the United States.
Earlier to-day the Congress was told settlement of the war debts must
be accomplished before it will be possible to improve world economic conditions. This was set forth in a report by NV. II. Coates, British delegate on
"The Maladjustment of Prim and its Influence on International Indebtedness."
The council of the International Chamber, Mr. Coates said, feels that it
is "voicing the almost unanimous opinion of the members" when it affirms
that the world cannot be raised out of the depression until the debt problem
has been settled.
In restoring the equilibrium of world economy the sanctity of contracts
must be preserved, but their literal fulfillment must not be unduly stressed,
Mr. Coates told the chamber. This applies particularly, he said, to the
contracts of international debts.
"Their execution in the literal terms of the bargain is so offending to
the conscience of the debtor peoples that an act of default no longer carries
in their mind any taint of moral obloquy," the British delegates asserted.
"If sanctity of contract is to be preserved, equity in fulfillment cannot
be denied. It is therefore urgent that there should be created by international agreement through the League of Nations a new series of Courts for
the application of equity to the problem of international debts."

Gold Obligations Affected by
r $100,000,000,000—Federal Gold Clause Reported at
Bonds Total $22,000,000,000.
The following is from the New York "Times" of May 27:
Obligations outstanding in this country lathe amount of $100,000,000,000
are, it is estimated, affected by the resolution introduced in Congress yesterday abrogating the "gold clause."
; The gold clause, which came into general use in this country following
the currency inflation of the Civil War, provides for payment "In gold of
the present standard of weight and fineness" as to interest and principal
on debts. It was designed to protect creditors from payment in depreciated money.
r. The largest item in the total of indebtedness.subJect to the gold clause
Is the $22,000,000.000 debt of the United States Government.
In addition, upward of $14,000,000,000 of securities issued by States
and municipalities is estimated to contain this clause. Nlost railroad and
other domestic corporation bonds contain the clause in their Indentures.
Following are estimated totals of securities outstanding hero, most of
which contain the gold clause:
United States Government securities
State and municipal
Other domestic corporations
Foreign "dollar" bonds
15 In addition to the foregoing totals, there are amounts of real estate
bonds, farm mortgages, private debts and other contracts which probably
call for payment In gold, the volume of which would bring the total above

World Gold Accord Needed, Says Prof. Gustav Cassel—
Fears Effect on Property of Abolishing Clause in
Our Bonds.
Professor Gustav Cassel, international economist and
member of the Swedish Monetary Committee,said on May 29
that the Steagall resolution in the United States definitely
attacks and endangers the sanctity of all contracts. Associated Press advices from Stockholm, Sweden, May 27,
went on to say:
The resolution providing for abolition of the gold-payment clause In all
obligations intensifies the desirability of a clear definition of American
monetary policy, Professor Cassel declared.
"The proposal may simplify payment of war debts," he said, "but the
possible effect on the security of private property in the world in general
must not be overlooked.

Volume 136

"An international agreement on this point must be forthcoming immediately. President Roosevelt now has sufficient power and a supporting
public opinion to define a monetary policy without difficulty, and it is
important that he do so to facilitate international accord."

President Roosevelt Urged to Restore Gold Standard in
Report Adopted by New York Chamber of Commerce.
A report urging President Roosevelt to put forth every
effort to restore the gold standard and to refrain from any
act, even under emergency, which would delay its return,
was presented to the Chamber of Commerce of the State of
New York on June 1. According to the report," . . . a
sound and permanent recovery in industry and business
can only be accomplished by avoiding currency inflation.
Issues of fiat money, a decrease in the gold standard from
its present basis of 23.22 grains to the dollar, or other forms
of currency debasement will prevent permanent recovery
and in the end be injurious."
The Chamber at its meeting on June 1 reaffirmed its
faith in the gold standard after an attempt to postpone
such action, made by Ambrose W. Benkert, an investment
banker, had been decisively defeated. Mr. Benkert sought
to have a report of the Committee on Finance and Currency
referred back for further consideration, declaring that
"there is a growing conviction that something is basically
wrong with the monetary system." The resolution attached
to the committee report, which was finally adopted, follows:
Resolved, That the Chamber of Commerce of the State of New York
herewith reaffirms its faith in the present gold standard, and expresses the
hope that the President will put forth every effort to the end that it may
be retained.
Resolved, That the Chamber repectfully urges the President to refrain
from any act under the pressure of existing or future emergency, that
would tend to impair such standard under which this country has weathered
many storms.

James Brown, President of the Chamber, who presided
and who is also in the investment banking business, listened
as the committee's report was read by Chairman Edwin P.
Maynard. After the reading was finished Mr. Brown invited a full discussion and Mr. Benkert rose and offered a
substitute resolution. He referred to the monetary policy
report unanimously adopted last year by the Council of the
London Chamber of Commerce, and said:
In the United States a more belated crystallization of opinion, but an
opinion none the less studied and aggressive, affirms that the gold standard
does not work satisfactorily. Such opinion believes that arrest of deflation, restoration of reasonable property and security values, and reestablishment of a fair price level are more important than retention of
any economic tradition.

Mr. Benkert urged that the Chamber committee hold
public hearings and submit to the Chamber a comprehensive
report on the following questions:
1. Whether it is necessary to raise the United States price level in order
to restore prosperity.
2. Whether there is logical reason for believing that prices can be raised
and maintained at a desirable level without altering the gold content of
the dollar.
3. Whether the monetary policies adopted by the present Administration are justified.
4. Whether a managed currency such as prevails in Sweden and Great
Britain, or such as is provided in House Resolution No. 5073, generally
known as the new Goldsborough bill, or any other type of monetary policy
would be preferable to the gold standard as it existed prior to March 41933.

In speaking against the substitute resolution, Mr.Maynard
said that the present economic situation of the world was
not due to fiscal or monetary conditions, but to the crushing
load of debt the World War had left as a legacy to those
who survived. When President Brown called for a vote
Mr. Benkert's resolution received only a few votes and the
committee resolution was then adopted.
The Committee on Finance and Currency, which sponsored
the report, expressed the belief that the Chamber would
not wish to take any action which might be construed as
hampering the recovery work of the Administration, but
felt that it is important nevertheless for the Chamber to
reaffirm its faith in the gold standard. The Committee,
of which Edwin P. Maynard is Chairman, warned that a
study of the history of all nations which have attempted currency inflation shows that it has resulted in financial and
commercial disaster. The report continued:
At this time credit expansion and higher prices for certain commodities
are most desirable. Some call this inflation, but it is quite different in its
consequences from currency inflation.
When a Government starts its currency printing presses or takes other
action to depreciate its money, its people rush to exchange their money for
goods, more or less regardless of their consuming needs. But when the
quantity of money is stabilized, and confidence is restored, people dispose
of at least their surplus holdings of goods for money. During all this proceeding, it is the speculator who profits most. In the final analysis, neither
the employer nor employee has gained anything, but has frequently suffered losses from the rapid fluctuation of prices.
Our people do not need more currency, but confidence in the stability
of our present monetary system. Fully 90% of this country's business is


Financial Chronicle

done by checks; and our present system provides for a large expansion of
currency as the demands of commerce require.
Since this Chamber was reincorporated in 1784 by Act of the Legislature
of the State of New York it has taken official action on more than a score
of occasions against many Federal measures, proposed or in operation,
which involved derangement of the monetary system of this country. A
study of these reports and of contemporary financial and commercial history shows how vital to prosperity is sound money and the feeling that our
currency circulation will not be tampered with.

Mexican Gold Output Steadily Declining, Report
Despite the increased demand for gold, Mexican output
of the precious metal has been steadily declining during the
past ten years, it is made known in official figures received
in the Commerce Department's Mineral Division. The
Department on May 23 went on to say:
Official statistics show that since 1900 Mexico has produced 23,826.723
fine ounces of gold, with the greatest output occurring about the end of the
first decade of the century.
Production has been on the decline during the past ten years. In 1927
gold output was recorded at 722.233 fine ounces,from which level it dropped
to 670,503 ounces in 1930 and 599,803 ounces in 1932. This decrease in a
period when demand for gold generally has been on the increase has been
attributed to restricted operations of major mining companies, due in turn
to world market conditions.
Silver production increased during the first part of the century. reaching
its peak to date with an output of 108,873.812 fine ounces in 1929. from
which it declined to 69,397,543 fine ounces in 1932. Total production
since 1900 is placed at 2,281,005,680 fine ounces.
Mexican production of other minerals in the past four years is shown in
the following table:
80,559,680 73,370,477 54,120,555 34,938,205
173,978,363 124,106,433 120.291,853 57,100,437
247,415,004 231,874,736 226,629,979 132,779,088
Figures for recent years show production of small quantities of platinum.
cadmium, vanadium, selenium and diatomite. No manganese has been
produced since 1927, and no important quantity since 1920.

Gold from

Twenty Countries

Going to

London for

Under date of May 27, advices from London to the New
York "Times" said:
Large amounts of gold continue to reach London from abroad, chiefly for
safe custody. More than 20 countries are now sending gold to England,
which in the last three and one-half weeks received over £26,500,000.
During that period exports of gold have amounted to only £2,500,000.
It is a curious and instructive fact that France, Holland and Switzerland
have all sent large quantities, although these countries are still on the gold
standard. Owners of this gold are evidently very distrustful of their own
currencies and regard London as offering a place of greater safety for
deposit than their own countries.
America's action in going off gold has greatly increased the desire to
hoard gold, and no effective measures can be devised to prevent this movement to London, which, although Great Britain is still off the gold standard,
remains a free gold market. No restrictions at all have been placed upon
movements of foreign-owned gold.

New Treasury Regulations Eliminate Gold Clause
from Circular Under Which Treasury Bills are
Under new Treasury regulations the gold clause it is
stated has been eliminated from the circular under which
Treasury bills are issued. This was indicated in a Washington dispatch June 1 to the New York "Times", from which
we also quote as follows:
This action, disclosed to-day, was taken in view of the administrationbacked resolution pending in Congress proposing to eliminate the gold clause
from all contracts, public and private. Nothing in existing law requires
that bills be designated as payable in gold, although there is such a requirement on bonds, notes and certificates.
The amendment to the regulations, signed by Acting Secretary Acheson,
really does not change the situation, since gold payments had already been
suspended under Presidential proclamation.
Prior to Oct. 16 1931, no specific stipulation as to the method of payment
was made in bill circulars. In Section 2 of the circular on that date it was
"Treasury bills are payable at maturity in United States gold coin of
the present standard of value upon presentation to the Treasurer of the
United States in Washington or to any Federal Reserve bank."
The sentence has now been rewritten to read:
"Treasury bill.are payable at maturity upon presentation to the Treasurer
of the United States in Washington or to any Federal Reserve bank,"
The Secretary of the Treasury is authorized by Section 5 of the Second
Liberty Bond Act to issue Treasury bills on a discount basis and payable
at maturity without interest, and "to fix the form, terms and conditions
thereof, and to offer them for sale on a competitive basis, under such regula
tions and upon such terms and conditions as he may prescribe."
In 1931 many inquiries had come relative to the payment of bills in gold
and about the difference between their status and that of bonds, notes and
certificates in that regard. To bring about uniformity the Treasury then
decided to write in the gold clause.
Bills to the amount of about $1,000,000,000 are outstanding. The first
issue to be affected by the new order is one of $75,000,000 on which bids
will be received at the Federal Reserve Banks and branches on Monday.
The bills. of 91-day maturity, will be used to refinance an issue of 875,216,000 due June 7.
Bills were adopted as a pan of government financing by Ogden L. Mills
when he was Under-Secretary of the Treasury. In the last two years they


Financial Chronicle

have been sold frequently on a level equivalent to less than one-half of 1%
interest on an annual basis. The government thus borrows frequently in
comparatively small amounts, instead of doing all financing at the quarterly
periods and in large amounts, saving on money costs for the Treasury.

Announcement by New York Federal Reserve of Amendment to Treasury Department Circular Governing
Issuance of Treasury Bills.
The following circular was issued on May 31 by the New
York Federal Reserve Bank:
(Circular No. 1237. May 31 1933)
To all Banks and Trust Companies in the Second
Federal Reserve District and Others Concerned:
In a telegram received on May 29 1933,from the Treasury Department,
we have been asked to advise banks and other subscribers to Treasury bills
in the Second Federal Reserve District that paragraph 2 of Department
Circular No. 418 relating to Treasury bills was amended on May 29 1933,
as follows:
2. Treasury bills are bearer obligations of the United States, promising
to pay a specified amount without interest on a specified date. They are
te be issued on a discount basis. Rach Treasury bill, prior to its issue,
must be validated by a Federal Reserve Bank as fiscal agent of the United
States, and the dates of the original issue . . .and the maturity thereof
will be stated thereon. Treasury bills are payable at maturity upon presentation to the Treasurer of the United States in Washington or to any
Federal Reserve Bank.
George L. Harrison, Governor.

House Passes Resolution Repealing Gold Clause in
Public and Private Contracts.
By a vote of 283 to 57 the House on May 29 passed the
resolution repealing the gold clause in public and private
contracts. The resolution was introduced in Congress a
week ago,as was indicated in our issue of May 27, page 3635.
As summarized in a Washington dispatch May 30 to the
New York "Journal of Commerce" the resolution accomplishes three purposes:
(1) It declares that the clauses in public and private obligations stating
that they are payable in gold or a specific coin or currency are contrary
to public policy.
(2) It provides that obligations, public and private, expressed to be
payable in gold or in a specific coin or currency, may be discharged dollar
for dollar in legal tender. It also provides that no future obligations,
public or private, shall be expressed as payable in any specific coin or
(3) It makes certain technical amendments to the Thomas amendment
which are necessary to carry out the intention of that legislation regarding
what shall be legal tender in the United States.

The resolution was reported to the House by its Banking
Committee on May 27 by a vote of 12 to 4, Representative
Byrns, the Democratic leader, announcing immediately that
it would be called up on a special rule when the House convened at noon on Monday May 29. In a Washington
dispatch May 27 to the New York "Times" it was stated
that developments in both Senate and House indicated that
the chief fight would centre about the proposal to make the
abandonment of gold payments retroactive. Several Senators, it was said, felt that the Government could with good
grace apply the plan to future issues, but not to past obligations. The dispatch from which we quote likewise said:
Both committees, however, approved the resolution exactly as it came
from the Treasury. The Senate Committee remained behind closed doors
for an hour and a half while Dean G. Acheson, Under-Secretary of the
Treasury,informed members that about $2.000,000,000 of the Government's
$21,000,000,000 debt must be refinanced within the next few months.
necessitating prompt action on the resolution.
Administration officials say that unless such a law is effective before
the next bond issue is offered, probably about June 5, the gold clause
must be written into the terms of this issue, as this is dictated under the
terms of the Second Liberty Loan Act.

Describing the House action on May 29, when that body
passed the resolution by a vote of 283 to 57, the "Times"
had the following to say in its Washington advices:
On the final roll-call 28 Republicans and five Farmer-Laborites joined
with 250 Democrats in favor of the resolution, while nine Democrats and
48 Republicans voted in opposition. More than half the Republican
membership was absent when the record vote was ordered.
All efforts to amend the resolution were defeated by overwhelming
majorities, and the arguments of the opposition that passage spelled
repudiation of sacred obligations, was an abandonment of American principles of honor and was"a deliberate effort on the part of the Administration
to cheat the creditors of the United States," fell on deaf ears, so far as
results were concerned. The Administration lines never wavered for
a moment.
The battle against the resolution was concentrated against the retroactive provisions, which make the proposed law applicable to all obligations
"heretofore or hereafter incurred," regardless of any clause stipulating
payment in gold.
Representative Luce of Massachusetts, senior Republican member
of the Committee on Banking and Currency, directed the attack. with
Representatives Beedy of Maine, Beck of Pennsylvania and Mapes of
Michigan as his principal lieutenants.
Amendments Are Badly Beaten.
Mr. Luce, as his first move against the resolution, offered an amendment declaring the proposed law to be of an emergency character, and
eliminating the retroactive provisions. This was defeated by a storm of
noes, the majority being so great that Mr. Luce did not even ask for a count.
The next move was a motion to recommit the measure to the Committee on Banking and Currency, with instructions to report it back
minus the retroactive provisions. On this there was a roll-call in which
the motion was defeated 263 to 78.

June 3 1933

The House was in an uproar when Chairman Steagall of the Committee
on Banking and Currency demanded a record vote on passage. From
all parts of the House came cried of "No, no." Mr. Wags,11 refused to
listen, however, and Speaker Rainey ordered the call of the roll.
The empty seats on the Republican side disclosed that the Republican
exodus was much greater than it was on the motion to recommit.
The nine Democrats who voted "no" were Representative Black of New
York, Boehne of Indiana, Brown of Michigan, Claiborne of Missouri.
Farley of Indiana. Fiesinger of Ohio, Huddleston of Alabama, Pettengill
of Indiana and Thom of Ohio.
Republicans who refused to follow their leaders and voted for the resolution included Representative Britten of Illinois, Carter of Wyoming,
Collins of California, Dirksen of Illinois, Dondero of Michigan. Gilchrist
of Iowa, Guyer, Hope, Lambertson and McGugin of Kansas, Wolfenden.
Kinzer and Turpin of Pennsylvania. Mott of Oregon, Taylor of Tennessee,
Welch of California, Whitley of New York, Wolverton of New Jersey,
Woodruff of Michigan, and the progressive group from the Middle West.
Luce Sees Repudiation of Faith.
Opening fire on the resolution, Mr. Luce said that if properly named
it would go down in history as "the Repudiation Act of 1933." The propoeal involved two elements, he said, one the renunciation of the obligations
of the United States, and the other prohibition of future obligations of the
same sort as those to be repudiated. . . .
Representative McFadden of Pennsylvania asserted that the legislation
was "foretold by a writer in The Dearborn Independent several years ago
when that paper published the so-called Protocols of Zion."
He quoted at some length from the "protocols," which among other
things, according to the Pennsylvanian, predicted that "when the crash
comes the Gentiles will have the paper and the Jews the gold."
"Is it not true," asked Mr. McFadden, "that in the United States
to-day the Gentiles have the slips of paper while the Jews have the gold
and the lawful money? And is not this repudiation bill a bill specifically
designed and written by the Jewish international money changers in order
to perpetuate their power?"
McFadden Refuses to Retract.
The remarks of Mr. McFadden were listened to in silence. When he
concluded, Representative Black of New York took the floor and denied
there was any basis for the insinuations.
"The gentleman from Pennsylvania," said Mr. Black, "has seen fit to
inject Hitlerism into this House. We don't want it here. I saw the Jewish
boys of New York go to war, and I say the remarks reflecting on this great
race were entirely uncalled for."
Representative Celler of New York called on Mr. McFadden to withdraw his remarks, but Mr. McFadden made no response.
Representative McGugin, Republican, of Kansas, speaking for the
resolution, warned his colleagues that the Republican party would "never
stage a comeback" under its present leadership. He named Representative
Snell of New York,the minority leader, Mr. Luce and ex-Secretary Ogden
L. Mills as among the party leaders who must be eliminated if the party
was to be restored to power.
Representative Beck of Pennsylvania, closing the debate,said it was true
that the Constitution did not prohibit the impairment of contracts by the
Government. A greater constitution did, however, and that constitution
VMS written on Mount Sinai, he said.

As to the Senate Committee action on May 27 the "Times"
said in part:
With Senators Glass and Gore, Democrats, and Kean, Republican,
voting nay, the Senate committee agreed, 9 to 3, to report the joint resolution. Senator Glass was reported to have voiced vigorous objection, and
after the committee meeting he said:
If you want my opinion, this whole thing is repudiation and nothing else.
You can talk until you are blue in the face and you can't make anything
else out of it.
Glass Nearly Wins on Change.
The resolution escaped substantial change by only a narrow margin
when the Senate committee by a vote of 7 to 6 rejected an amendment by
Mr. Glass to make the program inapplicable to Government bonds and war
The text of this amendment read:
Except obligations owing by or to the United States which by their
terms are payable in gold.
Not all of the twenty members of the Committee were present, but the
close division on the Glass amendment was held to presage opposition of
some proportions when the resolution reaches the floor, although administration leaders are confident of the ultimate result.

From the same account we also quote:
The action of the (House] Committee on Rules, which agreed to a rule
which permits amendment from the floor, gave indication that support of
the resolution on the Democratic side was not quite so solid as leaders
might like.
The rule permits three hours' general debate, and after that, amendments
under a five-minute limitation. There will also be an hour of debate on
the rule itself which, not taking into consideration the time to be consumed when consideration is under the five-minute rule, rdearis that it will
be 4 p. the earliest before the real battle, which will involve the efforts
to amend. . . .
The opposition's program in the House is to concentrate the attack
on the retroactive phase of the legislation. Representative Luce, ranking
Republican member of the Banking Committee, so announced this afternoon following a conference with the minority leaders. Mr. Luce has no
delusions as to the strength of the Administration forces and expects the
resolution to pass by a substantial majority and without important amendment. The fight will be largely for "record" purposes.
Only two Republicans, Representatives Luce and Wolcott of Michigan,
attended the House Committee meeting at which the resolution was voted
out. Two Democrats, Representatives Brown of Michigan and Reilly
of Wisconsin, joined Messrs. Luce and Wolcott in opposing the resolution.
An amendment by Representative Luce to prevent cancellation of
existing governmental gold contracts was defeated by a vote of 11 to 5.
Luce Gives Opposition Views.
Following the meeting Mr. Luce was asked to outline the opposition's
Position as it would be expressed in general from the floor Monday or
Tuesday. . . . He said:
"I take the position that so far as this bill impairs the obligation of
contracts, it is unfair and undermines our whole business as well as our
social structure. The Federal Constitution embodied that belief in forbidding the States to impair the obligation of contracts. Just why the
application was not made to apply also to the Federal Government I
have never known. However, the principle involved is precisely the same.
"There would be no normal objection to providing that future obligations should not go to the extent of requiring specified sorts of performance.

Volume 136

Financial Chronicle

But to nullify public and private contracts now in existence is an example
fraught with the most dangerous significance.
"It would be a sad mistake to think that only individuals of wealth
are concerned. For many years the treasurers of our universities and
colleges, our hospitals and all other philanthropic institutions, have taken
into account the gold clause in making their investments. The worst
part of this proposal is the breaking of faith with those who hold money in
trust for the relief of the unfortunate and the afflicted.
Senator Vandenberg Questions Move.
"From a practical point of view this action at the present moment has
two very serious objections: First, it restricts the freedom of our delegates
to the Economic Conference by at least intimating what will be the policy
of the United States, and, secondly, it still further discourages merchants,
manufacturers and all men of affairsfrom attempts at immediate resumption
of activities.
"It is hard to reconcile this action with the repeated and most emphatic
assertions of the President that he stood for sound currency. It opens
the door wide for unrestricted inflation, and all history tells us it's one of
the hardest things in the world to stop, once started."
Senator Reed, not a member of the Banking Committee, but an expert
on the Government's financial policy, held that the resolution was an absolute repudiation of a pledge made with regard to Government obligations.
Mr. Reed, who bitterly opposed the Thomas inflation amendment to the
Farm Relief Bill some weeks ago, objects to this country's abandoning the
traditional gold standard in any way.
Stating that he had not entirely made up his mind on the matter, Senator
Vandenberg commented:
"I am inclined to wonder just how far we can go in reducing the obligations. If the Government can cut 20 to 25% off their value, why can't
it cut them down 100%? Where will the line be drawn, and who will draw
it? On the other hand, I am inclined to concede that the Government
can protect itself. It is a difficult subject and I have not yet studied it
all out. I am, however, much more opposed to any arrangement affecting
past obligations than I am the future ones."

Elsewhere we give the majority report of the House
Committee on the resolution and the minority report of
Representative Luce.
President Roosevelt Signs Bill Providing for Federal
Regulation of Securities—Purpose of New Legislation—Creation of Corporation of Foreign Security
Following the completion of Congressional action last week
on the bill providing for the Federal regulation of securities,
President Roosevelt on May 27 affixed his signature to the
newly enacted bill. In approving the new legislation—an
Administration measure—President Roosevelt stated that
the Act is "intended to correct some of the evils which have
been so glaringly revealed in the private exploitation of the
public's money." The President's statement issued with
the signing of the bill on May 27 follows:
"It gives me much satisfaction to sign the Rayburg-Fletcher Securities
Bill, and I know I express National feeling in congratulating Congress on
its passage. For this measure at last translates some elementary standards
of right and wrong into law. Events have made it abundantly clear that
the merchandising of securities is really traffic in the economic and social
welfare of our people. Such traffic demands the utmost good faith and
fair dealing on the part of those engaged in it. If the country is to flourish,
capital must be invested in enterprise. But those who seek to draw upon
other people's money must be wholly candid regarding the facts on which
the investors' judgment is asked.
To that end this bill requires the publicity necessary for sound investment. It is, of course, no insurance against errors of judgment. That
is a function of no government. It does give assurance, however, that,
within the limit of its powers, the Federal Government will insist upon
knowledge of the facts on which judgment alone can be based.
The new law will also safeguard against the abuses of high pressure salesmanship in security flotations. It will require full disclosure of all the
private interests on the part of those who seek to sell securities to the public.
The Act is thus intended to correct some of the evils which have been so
glaringly revealed in the private exploitation of the public's money. This
law and its effective administration are steps in a program to restore some
old-fashioned standards of rectitude. Without such an ethical foundation,
economic well-being cannot be achieved."


merce. In addition the Act is intended to protect investors against fraud
and misrepresentation.
Business, it is hoped, will benefit from the Act through the protection
which honest enterprise, seeking funds through honest means, will be
afforded against dishonest competition, according to a statement issued by
the Federal Trade Commission. Public confidence will be restored, and
capital which has been hesitant because of fraudulent security deals may
again enter the channels of finance and commerce.
Nevertheless, it is not intended that the Government shall be placed in
the position of passing judgment on the soundness of the security offerings.
In brief, the Act provides five ways in which the investor can inform
himself or will be protected. They are:
(1) Thirty-two differentstatements must be filed with the[Federal Trade]
Commission by any group issuing securities when the securities are registered. Copies of any or all of these statements, designed to show the
condition of the company and the reasons surrounding the security issue,
will be furnished to investors who ask for them at a fee which the Commission may fix.
Among other things which the 32 statements will show are the balance
sheet of the issuing company, its profit and loss statement, its articles of
incorporation and the underlying agreements affecting the issue.
Estimates of Proceeds.
Other statements will show the estimated net proceeds to be realized
from the issue, the specific purposes for which the money is to be used,
and the expenses surrounding the issue including commissions and fees paid
to underwriters. The price at which the security is to be sold to the public
must also be listed.
To show the general character of the issuer, one statement must state
the business engaged in. In addition, the funded debt, capitalization and
higher salaries of the company must be disclosed.
In the Act two separate lists ofstatements are laid down,one for domestic
issues and another for offerings of foreign governments. In general, however. the two lists follow the same outline.
All this information will be on file with the Commission 20 days before
the issuance of securities actually begins. During this "cooling off" period
the Commission may investigate the proposed issue, the prospective investors are free to inform themselves on it through •xarnination of the
Through this dissemination of information it is hoped that the most
good may be derived from the Act.
(2) Supervision of advertisements is the second method whereby the Act
seeks to protect the investor. The Commission may call for the filing of
any prospectus issued in connection with any registered security. If the
prospectus takes the form of a radio statement, the filing is obligatory.
Unless the Commission rules otherwise, each prospectus must contain
most of the information required when the security is registered and listed
as above. Certain documents, like the articles of incorporation, are specifically exempt.
Issuance of Stop Orders.
(3) The third device for protection involves Government intervention
and evoked much discussion in Congress before agreement was reached.
As it now stands, its most important part provides that the Commission
may issue a stop order against any security about which untrue statements
have been made in the registration statement. This section now reads:
"If it appears to the Commission at any time that the registration statement includes any untnue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements therein not misleading, the Commission may,after notice by personal
service or the sending of confirmed telegraphic notice, and after opportunity for hearing (at a time fixed by the Commission) within 15 days
after such notice by personal service or the sending of such telegraphic
notice, issue a stop order suspending the effectiveness of the registration
"When such statement has been amended in accordance with such stop
order the Commission shall so declare and thereupon the stop order shall
cease to be effective."
Official Liability.
(4) The fourth provision seeks to insure accuracy and truthfulness in
the registration statements of the issuing company by making its offlcers
and participating employees personally responsible for misinformation
unless they can prove that they had no knowledge of the misinformation.
The aggrieved investors may sue these persons to recover civil damages.
(5) The fifth feature of the law outlines remedies which are open to the
investor if the issuance of the security involved fraud. They are:
(a) The purchaser may rescind the transaction and sue for a return of
his money in the district whereof the defendant is an inhabitant or is found,
or transacts business.
(b) The Government may stop the further or threatened fraud or misrepresentation by injunction in the district courts.
(c) The registration of the securities may be revoked or suspended for
fraud or misrepresentation on the part of the issuer, but the revocation or
suspension does not apply to such parts of an issue of securities which have
already been sold and are in the hands of the public.
(d) Those guilty of the fraud may be prosecuted criminally by the

According to a Washington dispatch May 27 to the New
York "Times" Senators Fletcher and Robinson of Arkansas,
Representative Rayburn of Texas, Chairman of the Interstate and Foreign Commerce Committee, and officials of
Under the new securities Act provision is made for the
the Federal Trade Commission were grouped about the
President when he affixed his signature to the bill. The creation of the "Corporation of Foreign Security Holders,"
"for the purpose of protecting, conserving, and advancing
pen he used was presented to Mr. Rayburn.
Details of the passage of the bill have already been given the interests of holders of foreign securities in default."
The new Act will be found in full on pages 3786 to 3791
in these columns May 13, page 3271, and May 27, page
3639. The bill requires that before any one can sell, or of the current issue of the "Chronicle."
offer securities for sale in inter-State commerce, the securities must be registered with the Federal Trade Commission. Federal Securities Act Not Retroactive—Officials Say
It Applies only to Issues Floated After the Effective
In the "United States News" of May 27 it was pointed out
Date—Selling Can Proceed in Meantime as if No
that the six main features of the Act are:
Protective Legislation Had Been Enacted.
Six main features of the Act are: Registration with the Federal Trade
Officials of the Department of Justice and the Federal
Commission of information about forthcoming security issues.
Supervision of the advertisements of securities.
Trade Commission made it plain on May 31 that the
Power on the part of the Commission to issue stop orders against any
Securities Control law was in no way retroactive. A disissue.
patch from Washington on that date to the New York
Exemption of certain Federal, State and municipal issues.
Personal responsibility of officers for misinformation concerning their
"Times" went on to say:
security offerings, and
Four specific remedies in the case of fraud.

From the same paper we quote:
Telling the Investor.
Behind the Act is the basic intention of informing the investor of the
facts concerning the securities to be offered for sale in inter-State corn-

It would apply, they said, only to transactions initiated after the effective date of the Act, which is not until 60 days after its signing by the
Reports from New York were to the effect that some believed the
protective features of the measure, particularly as set forth in Section 12,
might be considered retroactive. While preferring not to be quoted, officials of both government agencies agreed that this was not the case.


Financial Chronicle

They pointed out that the bill had been redrafted in several important
respects, subsequent to its introduction in the House, with the sole purpose
of meeting this objection.
Enacted with the signature of President Roosevelt last Saturday(May 27)
the measure requires that all new security issues must face public examination by the Federal Trade Commission and by any investor desiring to examine the record underlying the issue.
Notice of intention to issue any security must be filed with the Commission, accompanied by a complete financial statement of the issuing
An interesting comment made during the discussion of the law to-day
• was that the provisions governing the filing of intentions for registry with the
Commission do not become operative until 60 days from last Sunday.
During that time, it was explained, securities might be issued, advertised
and sold in inter-State commerce Just as though there were no law governing
such transactions.
Neither does the law apply to securities already issued, except where
only a part of a block of securities has been issued and the remainder withheld for future marketing.
Section 12 of the law provides that any person who sells a security in
violation of the various provisions relating to registration or on the basis
of untrue or misleading information "shall be liable to the person purchasing such security from him, who may sue either at law or in equity in any
court of competent jurisdiction, to recover the consideration paid for
for such security with interest thereon, less the amount of any income received thereon, upon the tender of such security, or for damages if he no
longer owns the security."

Federal Trade Commission's Announcement Bearing
on Administration of Federal Securities Act.
Following the signing of the Federal Securities Act on
May 27 by President Roosevelt it was announced that the
Federal Trade Commission will be prepared to handle the
statements required by the Securities Act to be filed with it
when such becomes effective. Before that time the Commission expects to have formulated rules and regulations
under the Act and to have worked out forms for the information required in the statement. While the time allowed
the Commission for examination of the statements for
incompleteness and inaccuracies is very short, only 10 days,
it is believed that the Commission can effectively administer
the Act if allowed sufficient funds and personnel. The
Commission's announcement of May 27 continued:
This Act Is probably the most important piece of legislation that has been
passed by the present Congress. It is not an emergency measure, but is a
permanent addition to our regulatory legislation. It will bring together
for the first time accurate and detailed information about the various concerns engaged in inter-State commerce. It will make available to the
public for the first time accurate information as to the operation and conduct of many of the business enterprises of the country. From the information required by this bill a great deal may be learned about business
trends, and information may be obtained that will enable the prediction
of the approach of economic depressions and the taking of steps to prevent
them. The publicity of this information will undoubtedly exert a great
stabilizing influence.
The basic policy of the Act is that of informing investors of the facts
concerning securities to be offered for sale in inter-State and foreign commerce and providing protection against fraud and misrepresentation. It
will be the aim and purpose of the Federal Trade Commission under the
authority of the Act to prevent further exploitation of the public by the
sale of fraudulent and worthless securities through misrepresentation, to
place adequate and true information before investors, and to protect honest
enterprise seeking capital by honest representations against the competition
afforded by securities offered through crooked promotion and misrepresentation. Statistics indicate that the sale of worthless securities through
misrepresentation and fraud has amounted to the colossal sum of $25,000,000,000 during the last ten years. This means $2.50 for every man,
woman and child in the United States.
Chairman March says the Commission intends to administer the Act
so as to give purchasers of securities full and accurate information and at
the same time interfere as little as possible with the legitimate financing
of legitimate business. The Commission is fully aware of the magnitude
and importance of the responsibility imposed upon it by this Act.
The Commission to a large extent is familiar with many of the problems
that will be presented as a result of its investigations into blue sky activities.
Huston Thompson, a former Chairman of the Federal Trade Commission,
was largely responsible for the draft of the bill as presented to Congress and
had a large part in presenting the bill to the committees of both Houses.
The public should thoroughly understand that the Commtssion is not
authorized to pass in any sense upon the value or soundness of any security.
Its sole function is to see that full and accurate information as to the security
is made available to purchasers and the public, and that no fraud is practiced in connection with the sale of the security. Speculative securities
may still be offered and the public is as free to buy them as ever. The
Commission's duty is to see that the security is truthfully presented to
prospective purchasers. The fact that a description of the security and
of the concern issuing the security is filed with the Commission is in no
sense and must not be regarded as an endorsement or approval of the
security or the concern by the Commission.
The Commission believes that a proper and efficient administration of
the Act will prevent a large part of the frauds that have heretofore been
practiced upon the public through the sale of securities. It will be the Commission's endeavor to so administer the Act.

An item noting the signing of the bill by President Roosevelt is given elsewhere in our issue to-day.
Study of State "Blue Sky" Laws by Federal Trade
Commission to Formulate Rules for Administration
of Federal Securities Act.
State blue sky laws throughout the country will be combed
by,Federal Trade Commission experts to help shape regulations for administering the new National Securities law.
Associated Press advicesfrom Washington May 30,indicating
this, added:

June 3 1933

Orders to obtain this data from all States having statutes protecting the
investing public went forth to-day after a conference between Commissioners
Ewin Davis and William E. Humphrey.
Davis, only Roosevelt appointee on the Commission, is slated for a major
part in enforcing the new law intended to shield the public from fraudulent
security sales. There is some possibility that President Roosevelt may
break a custom of years and designate Davis,former Tennessee Representative, Chairman of the Commission. The present practice is to rotate the
Chairmanship each year among the Commissioners.
To-morrow the Commission expects to examine in detail its duties under
the new securities law and arrange for funds to administer it.
Estimates now being prepared for the budget bureau fix $250,000 as the
minimum starting sum. Future allowances will be guided by the amount
of business done and experiences in administration.
Davis said one corporation already has notified the Commission of its
desire to file a statement of a new issue.
"We told them that such a statement could not be received for 40 days,"
Davis said, "and the corporation said it would hold up the issue in order
to receive whatever benefits might come from filing a public financial report
with the Commission."

Selling of Securities at Special Rates Covered in
Federal Securities Act.
Sales of securities below the market price by an issuing
house, as revealed in testimony by members of J. P. Morgan
& Co., will at least be matters of public record under the
provisions of the new securities Act, said a Washington
dispatch May 26 to the New York "Times," which likewise
The bill, advocated by the administration and sent to the White House
yesterday, does not penalize this practice, but seeks to combat it, together
with other "weaknesses" in the present security-issuing business, through
publicity. Penalties for misstatements are as high as five years in prison
or a fine of $5,000 or both, in addition to authorization of civil suits by defronded investors.
The measure requires filing with the Federal Trade Commission, and for
transmission to investors, of the broadest possible information concerning
new securities issues, detailing 32 separate requirements for sworn statements, including "all commissions or discounts paid or to be paid, directly
or indirectly," by the issue to the underwriters in respect of the sale of the
security to be offered.
This section was inserted in the bill prior to the revelations in Senate
hearings, but the remainder of the bill was based principally on findings
from other investigations of stock and bond sales conducted by the Senate
Banking and Currency Committee for the past year.
In addition to publicity of all factors surrounding the physical issuance
of securities, the statements filed with the Trade Commission must show
the names of officers and directors of the issuing company, the names of
holders of 10% or more of prior securities, a detailed description of the
business and financial condition of the company and the salaries of its
In its entirety, the bill requires publication of virtually every prior Act
by the issuing company, including its public and private management
The bill provides that this information shall be a public record when
filed with the Trade Commission, except that the Commission is authorized
to hold in confidence records of contracts, publication of which would hurt
the welfare of the company.
After the company's record is filed, twenty days must elapse before the
security at issue may be sold, and during that time it cannot even be promoted or advertised.
Even after the Commission shall have approved an application, under
the terms of the bill the issuing company is not relieved of liability, for at
any time in the future, evidence of untrue statements may be used as the
basis for criminal prosecution and for civil suits by investors to obtain
reimbursement for their losses.
Appeals in all cases from findings by the Commission may be taken to
the Federal courts.
Virtually parallel conditions are set up for publicity on issues of foreign
securities in the United States, except that liability for the truth of the
statements rests with the domestic finance agent of the issuing source.

House Passes Administration's Industrial Recovery
Bill—Increase in Normal Income Tax Rates—
Application of Rates to Corporate Dividends—
Increase in Gasoline Tax—Sales Tax Defeated.
The Administration's Industrial Recovery Bill, combining
a detailed plan for Government control of industry with
authorization for public works aggregating 83,300,000,000,
was passed by the House of Representatives on May 26 by
a vote of 323 to 76. As approved by the House the measure
specifies an increase in normal income tax rates from 4 and
8% to 6 and 10%, application of these normal rates to
corporate dividends, and an increase in the Federal refiners'
gasoline tax from the present rate of 1 cent a gallon to 1N,
cents. These various taxes were estimated to yield an
annual revenue of 8220,000,000 to finance the public works
program. In addition, as a means of raising a further
$480,000,000, a group of special excise and miscellaneous
levies which would have expired on June 30 1934, are extended by the bill for one year. Introduction of the National Industrial Recovery Bill in both Houses of Congress,
following President Roosevelt's special message on May 17,
was described in our issue of May 20, page 3461.
The bill is now under consideration by the Senate Finance
Committee, where various substitutes for the proposed tax
program have been suggested.
Before passing the bill on May 26 the House voted 265
to 137 against a general manufacturers' sales tax as a substitute for the increases in income taxes and gasoline tax.

Volume 136

The House wrote into the bill, however, repeal of the section
of the 1932 Internal Revenue Act which permits net loss
carryovers for one year. This action was considered to have
been prompted by recent testimony of J. P. Morgan before
a Senate subcommittee. In its passage through the House,
the bill had an easy path since debate was limited to seven
hours and no opportunity was given for amendment except
to the Ways and Means Committee. One of the amendments inserted was a provision transferring the existing 3%
electricity tax from the consumer to the producer.
The principal tax provisions of President Roosevelt's
National Industrial Recovery Bill were decided upon in the
House Ways and Means Committee on May 22 when, by a
vote of 13 to 9, the committee voted to recommend to the
House an increase in the normal rates of income taxes,
application of these normal rates to corporate dividends
and an increase in the refiners' tax on gasoline, from 1 cent
a gallon as at present to 13 cents. These measures are
calculated to raise $220,000,000 annually in new revenues
to finance the Administration's $3,300,000,000 public
works program. In addition the committee voted to extend
for another year the special excises, import taxes, miscellaneous imposts and stamp taxes enacted in the Revenue
Bill of 1932, yielding further estimated revenue of $480,000,000. These special taxes would all have expired on
June 30 1934.
In our issue of May 20, page 3462, there were listed
tentative tax programs which Budget Director Douglas had
submitted to the House Ways and Means Committee, in
connection with the raising of new revenues to furnish
sinking fund and interest to finance the public works projects.
The program agreed upon by the committee on May 22
is the first of four suggested by Mr. Douglas. A modified
general manufacturers' excise or sales tax, which was one
of the alternatives proposed, was defeated by the committee
by a vote of 18 to 6. The new tax program as recommended,
with the yields in new revenue estimated by Mr. Douglas,
Increase of normal rates from present level of 4% on first $4,000 of net
income and 8% on the remainder to 6 and 10%, respectively, $46,000,000.
Application of same rates-6 and 10%—to income from corporate dividends which now are subject only to surtaxes-383,000,000.
Increase of present 1-cent gasoline refiners' tax to 15'4 cents-392.000,000.
Total, $221,000,000.

In approving the above tax plan, the committee wrote
into the Recovery Bill the specific provision that the new
income and gasoline tax increases should automatically be
discontinued as soon as the 18th Amendment should be
repealed or at such time as the receipts of the Government
exceed its expenditures. The section of the bill in which
this provision was incorporated is as follows:
Effective as of the first day of the calendar year following:
"1. The close of the first fiscal year ending June 30 of any year after the
year 1933, during which the total receipts of the United States (excluding
public debt receipts) exceed its total expenditures (excluding public debt
expenditures other than those chargeable against such receipts), or
2. The date of the repeal of the 18th Amendment to the Constitution:
"Whichever is the earlier, as proclaimed by the President, the amendments by subsections, &c., of this section shall cease to be in effect, and the
Revenue Act of 1932 shall read as if such amendment had never been

The special taxes, which the Committee recommended
be extended until June 30 1935, were included at the request
of the Administration, when Budget Director Douglas told
the Committee on May 22 that the credit of the government must be raised above all reproach. These taxes included import duties on coal, copper, lumber and oil; excises
on lubricating oil, home brewers' supplies, automobiles,
tires, tubes, accessories, trucks, jewelry, radios, phonographs, mechanical refrigerators, firearms, sporting goods,
matches, candy, chewing gum, soft drinks and electrical
energy; imposts on telephone and telegraph messages, oil
pipe line transportation, checks, safe deposit box rentals
and the new stamp taxes on stock and bond transfers and
conveyances on the produce exchanges.
In filing its formal report on the $3,300,000,000 measure
on May 23, the House Ways and Means Committee remarked that the added tax burden in the National Industrial
Recovery Bill should "be cheerfully borne" because of the
increased employment and other benefits to be expected.
The public works program, Chairman Doughton said,
"should produce an immediate, substantial revival of
Other passages from the report of the Committee follow:
The industrial recovery program should not only add to this stimulation
but should Insure the permanence of a return to better, healthier and
happier conditions throughout the industries of the nation.
By establishing maximum hours of work and minimum wages we may
Insure the continued employment of those now employed and furnish


Financial Chronicle

work for a substantial percentage of those now idle, and this brings about
security of employment for millions of our people at wages sufficient to
provide for living in decency and comfort.
By raising the standard of labor conditions throughout trade and industry, through voluntary co-operation with the aid of the government,
unfair competition, based upon the employment of underpaid and overworked labor, should be generally eliminated.
As a result of such a program, we may confidently expect a further
stimulation of industrial operations, greater security of capital, greater
security of labor and a steady increase in the prosperity of the nation.

While the House Ways and Means Committee was settling
upon the tax program to be reported with the bill, the
Senate Finance Committee on the same day (May 22)
held an open hearing at which Senator Wagner explained
the measure in detail, while its provisions were sharply
attacked by Senators King, Gore, Connally and Clark.
Discussion of the bill by these Senators, as reported in
part by the Washington correspondent of the New York
"Times" included the following remarks:
Senator Wagner strongly defended the bill against charges that it "emasculates" the anti-trust laws, remarking that the arguments against it by
committee members were very similar to those to which he had listened
during hearings in New York State on laws controlling child labor. He was
appearing before the committee as a witness for the bill.
Senator Wagner's reply was that the proposed organization of business
"is the necessary consequence of the growing complexity of our economic
machinery, and of the increasing interdependence between one State and
all States; between one industry and all industries, and between employment anywhere and employment everywhere.
Measure Called "Revolutionary."
Senator Gore termed this thesis as "revolutionary as anything that
happened In this country in 1776, in France in 1793 or in Russia in 1917."
Senator King inquired caustically:
"Is this bill drawn from the standpoint of Mussolini or from the German
cartel system?"
"Neither," retorted Senator Wagner. "We want to substitute efficiency
and industrial planning for the present lack of planning."
The purpose underlying the measure was described as follows by Senator
"The National Industry Recovery Bill has as its single objective the
widespread and permanent re-employment of workers at wages sufficient
to secure comfort and decent living. This desired end is to be reached by a
two-fold program, involving, first, co-operative action within Industry,
encouraged by law and supervised by the President for the protection of the
public, and, secondly, direct government expenditures for public works.
"The bill marks a far-reaching departure from the philosophy that
the government should remain a silent spectator while the people of the
United States, without plan and without organization, vainly attempt to
achieve their social and economic ideals. It recognizes that planlessness and
disjunctive efforts lead to waste, destruction, exploitation and disaster.
and that purposive planning awaits the substitution ofregulated co-operation
in place of the unlimited and frequently pernicious competition which_we
have heretofore regarded as the sole guardian of the public welfare.
Business and Public Interest.
"This trend in thought and action is accompanied by a widening concept
of business—that all business is affected with a public interest. That is the
necessary consequence of the growing complexity of our economic machinery
and of the increasing interdependence between one State and all States,
between one industry and all industries, between employment anywhere and
employment everywhere.
"At the same time the bill preserves as the central motivating theme of
American industry the voluntary action and individual initiative which
have contributed so markedly to our industrial progress. Competition Is
not abolished; it is only made rational. In this bill we say that business
may not compete by reducing wages below the American standard of
living, by sweating labor, or by resorting to unfair practices. Competition Is
limited to legitimate and honorable bids for the market and real gains in
technical efficiency."
Senator Wagner, a noted jurist, contended that the bill is constitutional,
particularly in relation to "the compulsion of the economic situation."
He also argued that the measure averts the "dangers of monopoly" through
planned economy, and does not endanger the anti-trust laws.
"But it is revolutionary, Isn't it?" asked Senator Gore.
"I do not think so," NM the reply.
"But will it not make the constitutional power of the government Vary
with economic conditions ?" insisted Senator Gore.
"Well, I think that always has been so," said Senator Wagner.
Senator Wagner said that the power of Congress, or of all government,
always varies with conditions that must be met.
When Senator Gore raised the point of possible confiscation of private
property under the measure, Senator Wagner replied that relief through
the courts would be available, just as appeals may be taken to the courts
under present laws.
Senator Gore, persistent, asked if the power "isn't too much to vest in a
Mussolini or a Stalin or anyone?"
"There has been an overstatement of the dictatorial power contained
in the bill." Senator Wagner heatedly replied.
Senator Connally challenged the contention that Congress may broaden
Its power in emergencies, but Senator Wagner maintained that "we can
reach over a wide area in an emergency."
Says Prices Will Be Raised,
Senator Connally raised the argument that the bill will operate to raise
prices. Senator Wagner agreed that it would, but when Senator Connally
asked if the measure would not operate to put industrial prices above those
received by agriculture, Senator Wagner said:
"We want to put both on an equality. The Farm Relief Act and the
pending bill really are complementary. It would be absurd to lift agriculture
up a way and then lift industry still higher."
Senator Barkley asked Senator Wagner what would happen at the
end of the two-year period, during which the bill would be operative.
Confidence was expressed in reply that many features of the emergency
legislation will be incorporated in permanent law.
"I am confidence that the Administration of it will be made into Permanent form," Senator Wagner.went on. "If it proves to be the better way to
have an organized industry than to have chaos, It will be made permanent
by Congress."


Financial Chronicle

U. S. Chamber of Commerce Endorses Industrial Recovery Bill, as National Association of Manufacturers Opposes Measure—Chamber to Help
Members Formulate Policies—Congress Warned
by Manufacturers that Bill in Present Form
Means Bureaucracy to Control Business—Harmful
Effects of Legislation Cited by James A. Emery.
Opposing views regarding the Administration's National
Industrial Recovery Bill were expressed in statements by two
important business groups issued in Washington on May 28.
The Chamber of Commerce of the United States endorsed
the measure and offered to render its members all possible
assistance in complying with the terms of the bill. The
National Association of Manufacturers, on the contrary,
urged Congress to "look before it leaps and not make haste
to repent at leisure." This latter statement was signed by
James A. Emery, counsel for the Association, who declared
that if the bill is enacted in its present form it will retard,
rather than promote, business recovery. Among the objections listed by Mr. Emery are that the bill transfers
control and authority over industry from the managers to
a Government bureaucracy, that it provides no protection
against imports, and that through the use of collective
bargaining the measure will result in the immediate and
complete unionization of all labor in all industry and the
closed shop.
The views of the Chamber of Commerce of the United
States were expressed in a letter to members, signed by
H. I. Harriman, President, as follows:
Because of the magnitude of the task to be undertaken, the application
of the Act will necessarily be gradual. Immediate emphasis will be placed
upon industries which can afford the largest volume of re-employment.
Since re-employment is an immediate objective, it is probable that
the first agreements will be expected to cover only minimum wages, maximum hours of labor and hours of operation to eliminate the depressing
effects of unfair competition in employment and to promote stabilization
and increase of activity.

Mr.Emery's statement,opposing the bill, was as follows:
Congress owes it to itself and to the country to scrutinize with care and
deliberation the control of industry—public works—tax bills now before
it and euphemistically entitled the National Industrial Recovery Act.
Congress should look before it leaps, and not make haste to repent at
Our examination of the bill forces the conclusion that in its present
form, apart from every other consideration, it will, if enacted into law,
tend to retard rather than promote business recovery. It will in fact nip
In the bud the business recovery already manifesting itself. It will hurt
rather than help.
It will do this, in our judgment, first because it will transfer with a
stroke of the pen all control and authority over every aspect of business
operation and management from its private owners and managers to a
Government bureaucracy. Nothing is so illusory and ill-founded as the
assertion widely disseminated that this legislation primarily gives to
business and industry the power and authority to regulate itself. Nothing
may be done without Government sanction and approval. Anything
may be ordered or may be forbidden by Presidential edict. For weeks
and months business and industry is likely to be marking time waiting for
Administrative approval. It adds another to the uncertainties that are
an obstacle to necessary future commitments,if business is to move forward.
In the second place, it will retard business and industrial recovery
because with increased prices and without correspondingly import control,
the American manufacturers will be under increased competitive handicaps
in the home markets and foreign goods will undersell and displace American
goods with consequential decline in production at home and added unemployment—less work instead of more, for the American worker.
If in actual operation, the partnership between the Government and
business does not operate to shorten hours of labor in order to Spread employment and to raise wages in order to increase consumers' purchasing
power—and at the same time increase prices in order that business and
industry may have the means to sustain the resulting increased production
costs, then the primary purpose of the present proposals has failed of
realization. But if these results are attained the necessity ofsome additional
defense against cheaply produced foreign goods is self-evident. The bill
In its present form provides no such defense.
In the third place, the industrial recovery bill in its present form will
retard recovery and destroy the forward impetus of industry because in
the guise of leaving labor free and untrammeled and at the same time
insuring to labor the right of collective bargaining the bill in effect—
and designedly—means the virtually immediate and complete unionization of all labor in all industry and the closed shop.
Not the least important and significant provision of the present proposal is the two-year limitation clause for the partnership between the
Government and business and industry. It is said that it is an emergency
expedient to be discarded as soon as the emergency is passed. This seems
to recognize that unlimited control of industry by Government bureaucracy
Is a vice to be rid of as soon as possible. Yet the proponents of the measure
eaten its virtues and give assurances that business and industry have
nothing to fear and that the "partnership" will be wholly beneficent. If
it be beneficent, why should it not be permanent? If it be otherwise,
why embark upon it?
The remaining aspect of the present bill which ought to have the most
serious and painstaking consideration is the revenue section, the increased
taxes which it is proposed to impose to contribute to the support of the
$3,000,000,000 which it is intended to borrow and spend for public works.
Increased taxes under present conditions are an unmitigated evil, at best.
The increased levies written into the bill by the House are particularly
objectionable and disadvantageous. We submit that a fairer method of
raising the required revenue would be to spread a one-point gross manufacturers' sales tax over our industries.

The harmful position in which industry will be placed
as a result of the enactment of the National Industrial
Recovery bill was also pointed out by Mr. Emery in an
address delivered by him on May 23 before a large body of

June 3 1933

manufacturers who are members of the Phlladelphia Chamber
of Commerce. In this address Mr. Emery said:
The relation of public policies to the present critical industrial situation
cannot be over-exaggerated. The deadly spiral which has suddenly
dragged the price level downward has been accompanied by shrinking
contraction, and cut-throat competition for survival. The fears produced
in the minds of depositors led to hoarding and withdrawals of deposits
until, unable to distinguish between the sheep and the goats, the public
began to distrust all banking institutions.
The President's bold and vigorous step to bluntly separate sound from
unsound banks; to drastically reduce Governmental expenditures; and to
find a new source of revenue, transforms our public philosophy to a new
faith in vigorous leadership.
Under this situation the industry of the nation has been aroused by the
series of proposals to place it under drastic detailed Federal regulation,
which proposes to deny the facilities of inter-State commerce to mining
and manufacturing industries in any establishment of which any person
was required or permitted to work more than 30 hours in one week of
six hours in one day. To this was added, at the suggestion of the Secretary
of Labor, the compulsory establishment of what Was termed fair wage rates
and the control of production, the whole sanctioned by the most drastic
penalties for its violation. Slow to perceive the significance and effect of
these proposals, the industries of the country, with few exceptions, gradually
but generally concluded that they were unsound in principle and unworkable
In practice. Many undoubtedly were deceived by the plausible suggestion
of compulsory work spreading applied by the terms of the bill to those
forms of employment in which the most practical success had been had in
every form of work spreading, while excepting those forms of employment
In which the least progress had been made.
It should be squarely recognized that a revolution in political authority
was proposed,for, if Congress, under the commerce power. may arbitrarily
exclude any article which is not produced under the condition which it
fixes for inter-commerce between States, then the control of all local
• powers passes from local Government to Washington. For, if Congress
may prohibit, as it pleases, it may condition the entrance of any commodity into commerce. That means It may determine every circumstance
which it wishes to attach to production and distribution as the principles
of moving domestic and foreign trade outside the State of manufacture.
The enforcement of such a bill underrates the States to mere provinces,
operating under a buearocratic domination of the Federal Government.
The principal difficulty of successfully substituting the detailed control
of local operation by public authority for the expressed judgment of resPonsible management in local operation is too obvious to require amplification.
The plan of industrial control now pending before Congress involves
the granting to the Executive of unprecedented authority enforced through
unparalleled powers and penalties. As an official endeavoring to interpret
the industrial viewpoint, I believe they are translated when I say that
industry is desirous of co-operating with the President in every practical
way to meet this crisis. The evidence of its confidence in the good faith
and fairness of the President is found it its willingness to accept control
under existing condition, which, under normal circumstances are a shock
to our principles and practices. I believe there are certain major circumstances which deserve the attention of Congress in this measure, as
1. Primarily the recognition of the fact that, formulated in practicable
terms, its success rests upon the nature of the agencies and the quality
of the personnel employed in its administration.
2. If it attains economic effects intended, it is essential to its success
that the President shall possess authority to protect our market against
competitive production of low wages, especially in depreciated currency
If the pill operates as intended, to raise commodity prices, increased
wages and shortment of hours, it increases unit cost of production and
enlarges the advantages of our foreign competitors. If there is no executive
authority to meet this condition as it arises, our imports are likely to be
enlarged at the expense of our domestic safety.
3. The bill gives the power to license any industrial trade or business.
The condition that license can be revoked if certain conditions are violated,
that is the power of commercial exile. Such extraordinary authority seems
hardly necessary to the execution of the measure when it is recognized
that exclusive of it, the President possesses the power to enforce trade
agreements and wage standards by fine; the issuance of cease and desist
orders under agencies of his own creation; the power to reorganize an
industry that fails to act; and the power to repeal, modify or annul any
contract or agreement made. If it be said such power is rarely if ever used.
why grant It? "The Constitution," said Jefferson,"represents the measure
of our confidence in the beet of men." No provision of the measure is of
more dubious validity.
The labor provisions of the measure are neither an ample statement of
fundamental rights, nor a fair declaration of employment relations. Surely
It is not intended to seek a reorganization of mutually satisfactory employment relations in every form in which they exist in the United States and
throw them into a single mould. Industrial employers recognize the
fundamental right of men to bargain individually or collectively with
their employees, without arbitrary duress or coercion and where collective
relations exist or are established, they endure in any form mutually agreeable to the parties and operate through representatives a their own
choosing. Any attempt to coerce industry of the United States into a
single form of employment or organization is equally destructive of the
fundamental rights of both employer and employee. It must, moreover.
be clear that any form of coercion sought, to be applied in the Administrations' measure to employers, must be equally applicable to employees,
or the equation is destroyed.
The success of the measure will lie in the capture of its asserted philosophy; the preservation of private initiative, and its self organization
in all and its relations of employer and employee subject only to such
rational aid and restraint as is essential to the attainment of its objectives.
The appalling tax measure suggested in the House measure may break
the back of already overburnened industry. To spread the burden over
all,rather than a few,is the most outstanding end of an emergency situation.
A small gross manufacturers' tax would accomplish this objective not
without severe effort and many sacrifices, but it would involve less economic
°era than the concentrated burden proposed in the pending House bill.

President Roosevelt Would Include Provisions for
Petroleum-Control in Industrial Recovery Bill
Secretary Ickes Tells Ways and Means Committee
Section Covering Oil Would Meet Administration
Hearings on the Marland-Capper oil-control bill were
opened by the House Ways and Means Committee on June 1,

Volume 136

Financial Chronicle

when Secretary of the Interior Harold L. Ickes offered on
behalf of President Roosevelt an amendment to include oil
regulation and to be attached to the industrial control bill
pending in the Senate. Mr.Ickes said that he was authorized
to speak for the President in stating that the latter hopes
that there will be included in the national industrial recovery
bill the following section on petroleum conservation:
"Section 10.—For the oil industry, in addition to the powers granted
the President concerning codes of fair competition,agreements, and licenses.
he is authorized to prescribe regulations to supplement State conservation
legislation regulating the production of petroleum, to allocate equitably the
national market demand for petroleum and the products thereof, among
the oil producing States and between domestic production and importations
and to prohibit the transportation in inter-state commerce of petroleum and
the products thereof produced or withdrawn from storage in violation of any
State or federal law or the regulations prescribed thereunder."

This short amendment would be offered as a substitute for
a forty-page bill which was drafted by the Department of the
Interior and which Senator Capper had intended to introduce
as an amendment to the industrial recovery bill. Introduction of legislation providing for control of oil production was
noted in our issue of May 27, p. 3639, and it was there indicated that the President had previously expressed the hope
that the oil legislation might be attached to the industrial
bill, although he had not specified what wording he would
House Passes Administration Farm Credit Bill and
Sends Measure to Senate Without Amendment—
Bill Would Set Up 12 Regional Co-Ordination
Agencies, One in Each Federal Land Bank District
—Revolving Fund of $120,000,000 Provided for
The administration farm credit bill, providing facilities
to make effective President Roosevelt's recent order combining agricultural loan organizations, was passed unanimously by the House of Representatives on May 31. All
amendments proposed were voted down by large majorities,
and the measure was sent to the Senate in the form drafted
by Henry Morgenthau Jr., Governor of the Farm Credit Administration.
The new administration bill was introduced on May 25 in
the House of Representatives by Representative Jones,
Chairman of the Committee on Agriculture, and in the Senate
by Senator Byrnes of South Carolina. The measure authorizes a revolving fund of $120,000,000 to establish and
finance twelve production credit corporations. Of this
amount, $80,000,000 would be obtained from unexpended appropriations and an additional $40,000,000 would be appropriated by Congress. Each of the twelve corporations is authorized by the measure to supervise and finance local credit
associations, which would be established to enable farmers
to borrow for general agricultural purposes. The twelve
production credit associations would not supply direct loans
to the farmer, but would provide the capital for the local
The bill was drafted under the supervision of Henry
Morgenthau Jr., who has been named Governor of the Farm
Credit Administration. Representative Jones said on May
25 that enactment of the legislation would mean the saving
of approximately $2,000,000 in administration expenses, with
the elimination of many duplications, and would put farm
credits on a better basis. He added that the bill "will provide a system of credit outside of regular commercial banking channels which is suited to the peculiar needs of agriculture." An abstract of the measure, as contained in Washington advices to the New York "Times" on May 25. follows:
Each Production Credit Corporation will have an initial capital of 87,500,000 and will be empowered to finance and supervise the operations of
local production associations, these local units to be incorporated under
Federal charter for the purpose of enabling farmers to borrow from Intermediate Credit Banks for general agricultural purposes.
The Production Credit Corporations are authorized to subscribe for Class
A stock in each local unit served by them, and in amounts approximately
20% of the volume of loans made or to be made by the credit administration as estimated by the corporations. At no time can the amount of Class
A stock outstanding be less than $5,000, except with the consent of the
Credit Administration.
Local production credit associations may be organized by ten or more
farmer borrowers with credit up to four to eight times their capital. Under
the plan, it is asserted, this means that $1 capital will make possible about
$5 of sound production credit. No loan can be made by a local unit for
less than $50 unless the transaction is approved by the Production Credit
Corporation in whose jurisdiction the unit operates. Dividends cannot be
more than 7%.
For the purpose of creating and maintaining a surplus equal to at least
25% of the paid-in-capital of the corporation, the bill requires to be applied
for this purpose the excess of earnings on stock held by it above the amounts
necessary to pay operating expenses and to restore losses and impairment of
capital. The surplus will be invested by the Governor of the Farm Credit
Administration in obligations of the United States, or in Class A stock of
production credit associations, or both, as he may see fit.
The Governor of the Farm Credit Administration will have power under
the bill to establish a corporation to be known as the Central Bank for Co-


operatives, with headquarters in Washington and with regional banks in
each of the Federal Land Bank districts. These banks are empowered to
make loans on a business basis to local co-operatives under regulations approved by the Governor of the Farm Credit Administration.
The Governor also is authorized to buy stock in the banks for co-operatives,
using the remainder of the revolving fund of the old Farm Board as loans
are liquidated. Each co-operative borrowing from the central bank or
from a regional bank must acquire $100 of stock in such bank for each
$2,000 loaned. Should additional funds be required, the central bank has
the power to issue and sell debentures. Interest rates, depending on the
kind of loan, range from 3 to 6%.
The bill also carries a number of amendments to the Farm Loan Act.
One removes the limitation against the taking of chattel mortgages by
Federal Land Banks, while another removes double liability on stock of
borrowers in national farm associations on engagement entered into after
enactment of the bill.
Another amendment broadens the eligibility of borrowers from Federal
Lahd Banks to include any person who is engaged or intends soon to engage in farming, or to any person the principal part of whose income is
derived from farming. There is also an amendment which prohibits the
formation of additional national agricultural credit corporations, and another permits direct loans to co-operatives on other collateral approved by
the Governor as well as on warehouse receipts and chattel mortgages on
live stock. Another amendment authorizes Federal Land Banks to enter
into agreements with local farm loan associations to share losses and gains
on foreclosed farms equally between local associations and the land banks.

In reporting on the measure to the House on May 31, Representative Jones of Texas, Chairman of the Committee on
Agriculture, made the following statement, as quoted by the
Washington correspondent of the New York "Times":
The bill is intended to take care of the production and marketing problems of agriculture in so far as the, matter of credit is involved, and is
supplementary to the Federal Farm Loan Act enacted early in this session
of Congress.
While direct lending by the Government to farmers to finance their production may be justified in cases of emergency, it is an unsatisfactory
system of providing the required credit.
At the same time the policy of permitting such lending to be done entirely by private agencies has proven equally unsuccessful.
In this bill the purpose is to provide the stimulus in the form of Federal
capital and supervision to the establishment of local institutions in which
farmers are participants and owners, and through which necessary credit
may be provided on a safe business basis and also at a reasonable rate of

Former Senator Brookhart Named Special Adviser to
Agricultural Adjustment Administration—Will Expand Markets for American Farm Products, Including Those in Processed Form—Report That He
Will Deal with Amtorg Trading Corp. in Seeking
Russian Barter Arrangements.
The appointment of Smith W. Brookhart, former Senator
from Iowa, as Special Adviser to the Agricultural Adjustment Administration, was announced on May 27 by George
N. Peek, Administrator of the Agricultural Adjustment Act.
According to Mr. Peek's announcement Mr. Brookhart "has
been designated to make purely factual studies intended to
be of service between business men of this country and
Eastern European business interests in the expansion of
markets for American farm products, including those in
processed form." In Associated Press accounts from Washington May 27 it was stated that the development of Soviet
Russia as an outlet for the surplus of several agricultural
products, including cotton and meat products, emerged that
day as one of the objectives of the Agricultural Adjustment
Administration. At the same time it was stated by the Associated Press that the Department of Agriculture refused to
admit specifically that the main function of Mr. Brookhart
would be •to develop trade relations with Soviet Russia.
However, the New York "Times" in its advices from Washington May 27 had the following to say in part:
With the announcement of his appointment it was revealed that Mr_
Brookhart will seek to expand the market for surplus American farm products
by a plan for large-scale bartering of such commodities for Russian articles,
which, formerly imported in considerable quantities here, have fallen off
with the sharp contraction in the purchasing power of the American urban
The proposal contemplates that no money need change hands in the expected exchange of commodities and that there will be no direct contact between the two Governments.
Mr. Brookhart, it is understood, will act largely as a promoter and will'
deal only with the Amtorg Trading Corporation in seeking Russian orders
in exchange for an enlarged market here for that country's products.
It has been said that the surplus of agricultural commodities in this
country was threatening the successful operation of the new Farm Relief
Mr. Brookhart said to-day that "substantial progress" had been made in'
the direction of increasing farm exports, particularly to Russia. His efforts
would not be confined to Russia, he explained, adding that investigation has
been made of possible markets in Poland, Rumania, Latvia and other
countries of Eastern Europe. But in Russia, Mr. Brookhart sees the greatest

From the Associated Press advices May 27 as given in the
New York "Herald Tribune" we take the following:
Has Been Studying Soviet Needs.
Since he left the Senate on March 4, in consequence of his defeat in the Republican primary in Iowa last year, Mr. Brookhart has been occupying an
office in the Brooking Institution and devoted himself to the study of Soviet
Russia's agricultural needs. He referred to himself to-day as "a sort of
Secretary of State for Russian affairs during several administrations." He


Financial Chronicle

visited Russia in 1923, and since then, he said, has read everything he can
find on the subject and has received regular reports on the development of
Soviet economy.
"Our people don't realize what a tremendous potential demand there is
In Russia for American agricultural and industrial products," Mr. Brookhart said this afternoon. "Soviet Russia is building a new civilization for
160,000,000 people. It will take them a generation to do it. There is a
tremendous demand there now and it will continue for many years."
Mr. Brookhart expressed the belief that Soviet Russia alone could take
the equivalent of the entire American agricultural surplus in raw or processed forms. "I believe that if we had had the proper arrangements we
could have sold 2,000,000 bales of cotton to Russia last year," he said.
"Their machines were running only at 60% of capacity, and they need
more machines. I believe they could take our 5% surplus of livestock and
our 30% surplus of hog products, and a lot of other things."
Says U. S. Could Take Manganese.
In return, Mr. Brookhart said, the United States might well take manganese and wood pulp and "lots of other things" of which Soviet Russia
produces a sUrplus. The intrusion of Russian woodpulp into the American
market created quite a furore in the industry about a year ago and led to
the agitation for a ban on its import on the ground it was produced by
forced labor. American manganese interests have likewise strongly fought
duty-free importation of the more cheaply-produced Russian manganese.
The power of the Reconstruction Finance Corporation to finance the exports of agricultural commodities and livestock might well be employed in
starting American-Soviet trade into motion, Mr. Brookhart said. By using
this virtually unused power, the Reconstruotion Finance Corporation may
accept drafts and bills of exchange drawn on it, having maturities up to
twelve months and growing out of transactions involving the export of
"agricultural or other products." It may also make loans to finance sales
of surpluses of agricultural products in the markets of foreign countries.
These powers would serve to establish short-term credits in this country
for Soviet Russia.
"Most of the processors don't want. to pay the processing tax which will
have to be levied if our surpluses are not disposed of abroad," said Mr.
Brookhart, "so we are going to try to help them to market the surpluses and
avoid the processing tax and all the complications that go with IL"
The State Department, when questioned, asserted complete ignorance of
Mr. Brookhart's appointment. It would have no bearing on the question of
recognition of the Soviet Union, it was stated. Through Amtorg and, for
a time, two or three other trading corporations, the Soviet Union has maintained trade relations with this country for more than a decade. However,
the volume of trade has greatly shrunk in the last three years, partly due to
the depression, partly to the failure of this country to provide either credit
or a market for Soviet products.

June 3 1933

States cannot, acting individually, provide for the interstate placement of
workers. The common-sense solution is the establishment of a co-operative
system wherein the Federal Government and the States unite in performing
together this indispensable service for the American people.
"Let no one delude himself that, with the resumption of business, men
will universally return to their former shops and work benches and resume
where they left off in 1929.
"Such a course is quite impossible in view of the many changes that have
occurred since that day. We must provide the best machinery we can
contrive carefully to bring the right man to the proper job. The bill which
has to-day passed the Senate is designed to accomplish that purpose.",s

Initial Grants Under Wagner Act Total $21,659,282—
Federal Relief Administration Allotment Goes to
31 States and Hawaii.
First allotments of Federal funds under the provisions of

the Wagner Act were made on May 29 when Vile Federal
Emergency Relief Administration announced grants totaling
$21,659,282 to thirty-one States and Hawaii, for the purpose
of meeting immediate relief needs. The immediate grant to
New York State amounted to $6,532,282 and about $2,000,000
additional will be made available by the end of June. Some
of the larger States, including Pennsylvania and Ohio, were
not on the preliminary list, either because they had not made
applications or because supporting data submitted were incomplete. The initial grants were made under the subsection of the act which provides for the automatic distribution
during the second quarter of the year of $250,000,000 of the
total of $500,000,000 appropriated, on the basis of one-third
of the amount expended during the preceding quarter by the
States out of public moneys from all sources for relief work.
The administrator considered only outlays made in January
and February, as satisfactory figures for March were not
available, but these will be examined later.
President Roosevelt signed the Wagner $500,000,000 direct
relief bill on May 12. This was noted, and principal features
of the legislation were described, in our issue of May 20,
page 3461.

Mr. Peek's announcement of May 27 follows:
Mr. Brookhart has been designated to make purely factual studies intended to be of service as between business men of this country and Eastern
European business interests in the expansion of markets for American farm
products, including those in processed form.
His assignment to these duties is in accordance with provisions of the
Agricultural Adjustment Act which specifically authorizes the Secretary of
Agriculture to take steps for expansion of markets and removal of surplus
agricultural products.
The assignment of these duties to Mr Brookhart was made by the Agricultural Adjustment Administration wholly on its own authority, and the
Agricultural Adjustment Administration does not regard this assignment
as one which will have any bearing upon the United States' Governmental
relations with any foreign country. All such matters are regarded as
strictly within the purview of the State Department which would have been
consulted if his undertaking these duties had been considered as having
the slightest international significance. In his purely factual studies Mr.
Brookhart is not to negotiate with any foreign Government.

Congress Passes Wagner Bill to Co-ordinate State
Employment Services—Bill Appropriates $1,500,000
First Year and $4,000,000 Each Year For 4 Years
Thereafter—Measure Ready For President's Signature—Statement by Senator Wagner Explaining
Aims of Bill.
The Wagner bill, authorizing a Federally-co-ordinated
State employment service, was passed by the Senate on
May 29 without debate and without a record vote,and similar
action was taken by the House on June 1. The bill is
identical with that passed by Congress three years ago and
vetoed by former President Hoover. It now goes to the
President for his signature. The measure provides for
establishment of public employment services by States,
modeled after the system already operating in New York
State, with the Federal Government co-ordinating the activitives of the State services. The bill includes an appropriation of $1,500,000 for the first year and $4,000,000 annually
for four years thereafter. Of this money three-fourths would
be distributed to the States to aid in maintaining the employment services, on condition that the States appropriated
equal amounts, while the balance would be used for administrative purposes. Senator Wagner issued a statement, after
passage of the bill by the Senate, in which he said that the
measure was designed primarily to adjust employment under
the anticipated business revival in keeping with changes
that have occurred during the depression and to establish
a permanent system that will abolish for all time the haphazard method of bringing together workers and jobs that
heretofore existed.
"The restoration of the 13.000,000 unemployed men and women to their
normal occupations is the most difficult task of the period of reconstruction." Senator Wagner said.
"The principal question that must be answered in the organization of a
nation-wide employment service is this: What shall be the relation between
the Federal Government and the States in the conduct of such a service?
"The Federal Government alone cannot perform the entire task. The

Loans by Reconstruction Finance Corporation for
Self Liquidating Projects Up to May 25 Totaled
Through Loans Will Require Over 1,000,000 Carloads of Material.
A total of 1,006,500 carloads of material will be required
for the construction work authorized through self-liquidating
loans by the Reconstruction Finance Corporation up to and
including May 25, the Corporation announced on June 1.
The total amount in loans on that date was $201,298,000, the
announcement said, scattered over 35 States and territories
and these projects, according to engineers' estimates, will
provide a total of 291,785,000 man hours of labor. The
Corporation's announcement continued:
The million carloads of material will provide employment for thousands
in the mines, mills and factories, according to Director Harvey Couch, and
while the improvements are being made in only 35 States and territories,
they will involve indirect employment in practically every State ofthe Union.
Self-liquidating projects have begun to show their effect in the increased
output of steel. Several bridge loans have been authorized, including the
$13,000,000 bridge across the Mississippi River at New Orleans and the
$70000000 bridge across the bay at San Francisco. The first huge order
for structural steel for the San Francisco span was placed recently. Some
bridges also will require much timber piling and concrete materials, thereby
aiding other industries.

Following, according to the announcement, are the total
loans and man hours of labor listed by States:
New Hampshire
New Jersey
New Mexico
New York
North Carolina
Utah _
Washington _
Porto Rico_

Total Amount
Loaned or to be

Total Direct and
Indirect WanHours.





Financial Chronicle

Volume 136

Monthly Report of Railroad Credit Corporation—
Loans Made Up to May 31 1933 Totaled $73,691,368—
$1,312,340 Repaid.
The Railroad Credit Corporation, to May 31 1933, had
made loans to railroads, to meet their fixed interest obligations, totaling $73,691,368, with repayments of $1,312,340,
net loans outstanding $72,379,028, according to the monthly
report of that Corporation filed with the Inter-State Commerce Commission. In a letter addressed to chief executives
of participating carriers and accompanying the report,
E. G. Buckland, President of the Railroad Credit Corporation, said:
At the termination of the lending period, May 31 1933, substantially
all of the emergency revenues, whichaccrued to the 432 participating carriers
on traffic moved up to and including March 31 1933 had been received
and allocated to the purposes of the Plan. The receipts from lap-over
Items, which must be paid in June, will be used for general liquidation
The plan was created, primarily, to benefit the credit position of the
transportation industry by preventing defaults in the fixed interest obligations of participants. The unexpected and unprecedented conditions, which
have existed during the entire life of the Corporation, made this task more
difficult than was anticipated when the Plan was first under consideration.
A review of the lending period shows that 64 carriers applied for loans
aggregating $149,241,868. Of this sum, applications for $75,550,500 were,
for various reasons (principally the granting of similar applications by the
Reconstruction Finance Corporation), removed from the docket or denied,
while loans actually made totaled $73,691.368. A brief summary of the
Corporation's resources to May 31 1933 and the application thereof, excluding accrued but uncollected interest, is stated hereunder.
Emergency revenues accruing to participating carriers through
March 31 1933 and reported to the Credit Corporation
Less amounts reported but unpaid—receivership items,.kc

Total emergency revenue payments into the fund
Less refund of taxes paid on such revenues

Net available for the purposes of the Marshalling and Distributing Plan. 1931 _________________________________________$74,072,209.93
Proceeds from sale of capital stock
Interest collected on loans, bank balances, &e.—Net


Loans to participating carriers
I,as repayments


Net outstanding ____________________________________________$72,379,028.22
Expense of administration
Net disbursements
Balance in general fund
Balance in petty cash fund
Balance in reserve for tax refunds. 4,n
Total_____________________________________________________ $74,657,425.66
It will be noted that the fund heretofore reserved for the purpose of
making the tax refunds, required by Paragraph 4 of the Plan, has been
curtailed. This action was taken on the basis of revised estimates of claims.
as furnished by participating carriers. To the extent necessary, the reserve
will be replenished from collections properly creditable to the fund.
The Board of Directors will review, from time to time, the Corporation's
need for funds and any balance over and above its requirements will be
distributed in accordance with the provisions of Paragraph 14 of the Plan.

The report for the month follows:
OF MAY 311933.
Nd Change During
Assets-May 31 1933.
May 1933.
Investments in affiliated companies—Loans made_ _ $10,860,821.02 $72,379,028.22
Petty cash fund
Special deposit—Reserved for taxes. .kc
Miscellaneous accounts receivable—Due from
contributing carriers
Interest receivable
Unadjusted debits
Expense of administration—Jan. 1 to May 31 1933,

$4,474,691.59 $75,377,390.92

Non-negotiable debt to affiliated companies—Reported rate increases under Ex Parts 103
$4,268,811.24 $74,317,125.07
Unadjusted credits
Income from funded securities—Interest accrued
on loans to carriers
from unfunded securities and accounts—
Interest on bank balances, dm
Capital stock

84,474.691.59 $75.377,390.92

•Denotes decrease.

Loans of $199,100,000 to Farmers Through Reconstruction Finance Corporation in Nine Months'Period—
Distributed by Regional Agricultural Credit
More than $199,000,000 was "pumped into the credit
stream" of American agriculture by the Regional Agricultural Credit Corporation in the nine-month period
ended May 28, during which this agency was a part of the
Reconstruction Finance Corporation. The foregoing announcement was made May 28 by the Reconstruction
Finance Corporation, which also had the following to say:
Figures compiled to-day giving virtually complete returns on the operations of the Regional Agricultural Credit Corporation show that 146,000
applications for loans were authorized to farmers in every State of the
Union and Puerto Rico for a total of $199,100,000; of this amount $135,000,000 had been disbursed when the Farm Credit Administration took over
the work at the close of business yesterday. Directors of the Reconstruction Finance Corporation feel that the livestock industry has probably


been saved from'complete demoralization by theactivities of the Regional
Agricultural Credit Corporation.
The character of the borrowers may be judged by the fact that in the
Short interval since the Regional Agricultural Credit Corporation began
operations on Sept. 1 1932 repayments as of the close of business May 26
totaled $8.127,000.
Offices of the Regional Agricultural Credit Corporations were established
in each of the 12 Federal Land Bank districts at the time it was made
a part of the Reconstruction Finance Corporation, for the purpose of
providing credit facilities for farmers who were solvent but unable to
obtain credit through the usual financial channels because of closed banks
and general economic conditions. The Government has been able to
protect thousands of farmers from foreclosure by this method and provide them with funds to make a new crop.
Unlike ordinary banking institutions, the Regional Agricultural Credit
Corporations advanced money on any article of security the farmer owned,
provided such security had been appraised by local inspectors and approved
by local loan committees. Money was advanced in large sums.if necessary,
to cattlemen or wheat growers, or in small amounts to farmers who operated
on a limited scale. The small advances have been known as."barnyard
loans," the smallest on record Is $25. The largest loan that has been
approved was for $750,000.
The Government made direct contact with these farm borrowers, at
no expense to them, through field agents of the Corporations, but the
overhead expense of this method of farm relief was reduced to a minimum
by the patriotic co-operation of the boards of directors and loan committees of the Regional Corporations, who receive only a per diem of
$4.25 while they worked for the Government.
The Regional Agricultural Credit Corporations have not competed with
local banks, and have discouraged applications for loans if these loans
could be negotiated elsewhere. The organization was perfected simply
to provide credit for farmers, and especially farmers of limited means.
whose credit facilities had vanished, if those farmers had something they
could offer as security to safeguard the Government's investment. This
form of security was often only a cow, some hogs or a truck—anything
of value to insure refunding of the loan, which the farmer agreed to repay
out of crop returns or the sale of livestock.
In many cases, this temporary plan of farm financing made it possible for
farmers to continue producing and prevented them from abandoning the
farm in disgust and joining the great army of the unemployed.
These 12 Regional Agricultural Credit corporations and their 22 branches,
cover the United States like a blanket. They protected thesheepmen in the
Northwest, the citrus growers in California, Texas and Florida. the cattle
ranchers of the far West, wheat, corn and cotton growers and the fruit and
potato growers of New England. The inspectors in Maine last winter
used snow shoes to call on the potato growers.
When the Regional Agricultural Credit Corporation left the Reconstruction Finance Corporation, the approximate total number of loans approved
by the corporations was 146.000. showing the broad aspect of this campaign
to aid the Nation's farmers. Of this general total, 28,268, or 19.46 %.
was for loans of less than $250. The largest number was in the class between $500 and $1,000, a total of 42,328, but there were 37 loans, or .03%.
for more than $100,000. Loan have been made in all the States and Puerto
Rico. The largest totals were in the wheat-growing, livestock-raising and
cotton-growing sections. Minnesota leads in numbers with 17,516; North
Dakota second with 17.121, and Texas third with 13,071. In total amount
of loans, however, North Dakota is first with $17.086,309 and Nebraska
second with $16,838,631.
The corporations have a capital structure of $44,500,000, but they have
discounted almost twice as much of their paper with the Reconstruction
Finance Corporation. They paid out from $5,000,000 to $6,000,000 weekly
in farm loans, and repayments are made as fast as crops are sold. The
Corporation was organized Sept. 1 1932 and the first loan was approved
on Oct. 8 last year.

President Roosevelt Initiates Investigation by Department of Justice Into Alleged Misuse by Private
Utilities of Government Facilities at Muscle
Shoals—Communication to President by Officials
of Alabama Power Co. and Tennessee Electric
Power Co.—Deny Any Improper Action by Those
In Associated Press advices from Washington, May 18,
it was stated that a few hours after the signing of the Muscle
Shoals Bill by President Roosevelt it became known that
he had initiated a Department of Justice investigation into
charges that private utilities which have leased the Muscle
Shoals water power in recent years "misused and damaged
the great hydro-electric plant which has lain virtually
dormant since the construction by the Government in World
War days." These Associated Press advices, as given in the
Washington "Post" of May 19, added
Ickes Makes Charges.
The investigation by the Justice Department concerns charges brought
to the President by secretary Ickes, of the Interior. After complaints, he
sent an investigator to the Shoals. and the latter's report was understood
to contend that the Alabama Power Co. and the Tennessee Electric Power
Co. had improperly and destructively used the Muscle Shoals substation to
interchange power.
At Birmingham,Thomas W.Martin, President of the Alabama company,
denied anything irregular had taken place. In Washington, Maj.-Gen.
Lytle Brown, Chief of Army Engineers, who has had control of the plant.
said the same. Nevertheless, a thorough Federal inquiry is in prospect,
which, it appeared likely, would be directed by Huston Thompson,former
Chairman of the Federal Trade Commission.

In answer to inquiries concerning charges made against
the Alabama Power Co. and The Tennessee Electric Power
Co., executives of these companies made public on May 18,
a telegram to President Roosevelt as follows:
Birmingham, Ala., May 18 1933.
Honorable Franklin D. Roosevelt.
President of the United States,
Executive Mansions.
Washington. D. C.
The statement in the afternoon newspapers that the Tennessee Electric
Power Co. and the Alabama Power Co., have been guilty of the theft of
power or of any improper action in connection with the purchase of power


Financial Chronicle

or the use of government facilities at Muscle Shoals is absolutely and
unqualifiedly false.
We respectfully request you to instruct those who are making the investigation for you to proceed at once and make it public, thorough and
complete in order that the officials of the Alabama Power Co. and the Tennessee Electric Power Co. may be able to show at the earliest possible date
the recklessly false and untrue nature of the charges quoted in the afternoon
newspapers to-day.
None of the Government facilities at Muscle Shoals have ever been
used by the Tennessee Electric Power Co. or the Alabama Power Co. other
than in exact accordance with understandings.
President, Alabama Power Co.
.10. C. GUILD,
Vice-President and General Manager,
The Tennessee Electric Power Co.

On May 18, Associated Press advices from Chattanooga
Major Robert N. Neyland, District Army Engineer stationed here, when
informed of the investigation started at Washington into alleged misuse of
power facilities at Muscle Shoals,said the plant always has been operated in
strict accordance with War Department orders and there had been "no
misuse at all."

Dr. A. E. Morgan, College President and Flood-Control
Expert, Named Head of Tennessee Valley Authority
—New Director Says Valley Plan May Aid Millions
Within Decade.
The appointment of Dr. Arthur E. Morgan to direct the
Tennessee Valley Authority created under the Muscle
Shoals Act was announced by President Roosevelt on
May 19. Dr. Morgan has been named for the term of nine
years beginning May 18 1933. He is President of Antioch
College at Yellow Springs, Ohio, and an authority on flood
control; he has had charge of the $60,000,000 flood control
project on the Miami River, following floods of 1913. More
than 100 other names are said to be under consideration for
the other two places on the Authority.
In a statement made on May 20, Dr. Morgan said that he
believed the Tennessee Valley project might aid "greatly in
keeping the proper balance between city and rural population. One million persons have returned to the Valley
because they lost work in cities and now have only slender
means of livelihood, the director said. He then continued,
according to the Associated Press:
We have them back in the hills with nothing to occupy them whatsoever.
They merely sit there and wait for a job.
It seems to me that mass production has gone too far in America. If
some industries can be adapted to small communities, you may keep those
folks at home instead of having them go to Cleveland and Detroit, where
they do nothing except obey orders, press buttons and punch clocks.
The nation would be much better off if we could keep these people at
home. There are too many in the cities.
I believe we can absorb about 2,000,000 in the Valley in the course of 10
or 20 years.

RailroadRelief Bill Passed by Senate—Six-Hour Day
Amendment Dropped Because of Roosevelt Opposition—Dismissal of Employees to Effect Retrenchment Is Prohibited—New Basis of Rate-Fixing
The administration's bill setting up a Federal co-ordinator
to bring about railroad consolidations and economies was
passed by the Senate on May 27 without the formality of a
roll call, and the measure was sent to the House, where a
similar bill is still pending in Committee. The bill, which
combines both permanent legislation and emergency projects,
was amended by the Senate to prohibit dismissal of employes in effecting retrenchment. The bill was introduced
in Congress on May 4 after a special message from President
Roosevelt, and a favorable report was agreed upon by the
Senate Inter-State Commerce Committee on May 19. A detailed description of hearings on the measure was given in
our issue of May 27, page 3649.
On June 1 the House Inter-State and Foreign Commerce
Committee favorably reported the bill, and at the instance
of President Roosevelt agreed in principle to the Senate
amendment protecting railroad labor against loss of jobs.
Other minor amendments were adopted.
Before the bill was passed by the Senate, Senator Black
of Alabama withdrew a proposed six-hour-day amendment
when Senator Dill, Chairman of the Inter-State Commerce
Committee, said that the President "opposed it as unworkable in this emergency and that it would ruin the bill." He
added that the President's position had been accepted by the
labor unions. An amendment adopted at the request of
Senator Norris would require the Inter-State Commerce
Commission to fix rates to give a fair return upon either a
basis of prudent investment or cost of reproduction now,
whichever was the lower. Features of the bill, as passed
by the Senate, were described as follows in Washington advices to the New York "Times" on May 27:
The measure suspends the Anti-Trust Laws for one year and authorizes
a Federal co-ordinator to effect economies in co-operation with three rail-

June 3 1933

road regional committees by eliminating unnecessary duplication of services,
arranging for joint use of terminals and trackage, taking steps to avoid
waste, and promoting financial reorganizations to reduce fixed charges and
Improve carrier credit.
This section is for a two-year emergency period, but it could be extended
another year if the President desired.
The bill has two permanent sections, one repealing the recapture clause
of the Transportation Act retroactively and the other placing railroad holding companies under Federal control.
Although the co-ordinator could not fix rates, the bill sets up a new
basis for rate-making by declaring broadly that the Inter-State Commerce
Commission shall give consideration, in fixing rates, to their effect on
traffic movements, the need of adequate, efficient railway service at the
lowest cost consistent with furnishing it and the need of revenues sufficient
to enable the roads to provide this service.
Senator Borah, Republican, of Idaho, expressed opposition to setting
aside the anti-trust laws to permit mergers and consolidations as the roads
saw fit, but Senator Dill explained there was nothing in the bill that enlarged the Inter-State Commerce Commission's existing power to authorize
Ile added, however, that the bill was intended to give the Commission
control over consolidations effected through holding company operations
which the Commission could not reach now.
Joseph B. Eastman, a member of the Commission, has been prominently
mentioned as the President's choice for Federal co-ordinator.
The regional committees to be set up by the co-ordinator would be comprised of five members each from the Eastern. Southern and Western railroad groups, with special members representing short lines and electric
lines when their interests were affected.
The co-ordinator would see to it that labor committees were set up for
regional group of carriers. These would be selected from the regular railway labor organizations and be consulted before any order affecting employes was handed down.
"Yellow dog" contracts and company unions would not be recognized.
The co-ordinator would be required to notify State Commissions or
Governors before issuing any order relieving a carrier from operation
any State law or State Commission order.
His orders could be appealed to the Inter-State Commerce
where all interested parties would have twenty days to lay
their complaints
before an order took effect.

Railway Unions Plan Plea to President Roosevelt on
Behalf of Six-Hour Day—A. F. Whitney Sees Little
Hope of Inclusion of Plan in Legislation by
A plea to President Roosevelt to support the six-hour day
on American railways may be made by the 21 railroad
Brotherhoods, according to statements by A. P. Whitney,
President of the Brotherhood of Railway Trainmen and
Chairman of the Railway Labor Executives Association. Mr.
Whitney added, in a newspaper interview in New York City
on May 28, that he entertained little hope for modification
by the House of the Emergency Railroad Transportation
as passed by the Senate on May 27, with the six-hour
section eliminated. Further details of the interview, as
given in the New York "Times" on May 29, follow:
lie criticized Congress as "reactionary" and declared that
the railway
brotherhoods, backed by the American Federation of Labor,
would now redouble their efforts for a reduction of working hours as
essential to economic recovery. As part of their campaign, Mr. Whitney
indicated, the
railway brotherhoods may now try to enlist the interest and
support of
President Roosevelt.
He denounced as "subterfuge" the elimination of the six
-hour-day section from the Railroad Bill on the promise that it would
be reintroduced in
other form upon the re-assembling of Congress in the Fall.
He took occasion also to assail the reorganization of
the railroads as
proposed under the Transportation Act. He said the
brotherhoods were
opposed to the consolidation of the roads under a Federal
cause it proposes to set aside the anti-trust laws and co-ordinator, bethus strengthen
monopoly and because the bill is "a left-handed step toward
socialization of
the railroads."

Railroad Executives Testify Before L-S. C.
on Proposal to Reduce Freight
Rates—R. H.
Aishton Asks Restrictions on Competitive
Transportation—Daniel Willard Declares General
Cut Would Mean Disaster to Majority of
Testimony by leading railroad executives was given before
the Inter-State Commerce Commission at a
series of hearings beginning on May 25 to gather data
regarding a proposal to reduce freight rates. These hearings
represent the
final stages of an investigation by the Commission,
was undertaken on the request of national organizations
so-called basic producers that the railroads be called upon
to show cause Why they should not be
required to make
drastic cuts in prevailing rates. Testimony from shippers
supporting the general reduction had been given to the Commission before it opened the sessions at Which the railroads
had an opportunity to present their case.
Among the witnesses appearing during the recent hearings,
R. H. Aishton, Chairman of the Executive
Committee of the
Association of Railway Executives and Chairman of the
Board of the American Railway Association, declared on
May 25 that co-ordination of the nation's transportation
facilities Into an effective system cannot be achieved without relaxing railroad regulation and imposing similar restrictions on competitive transportation agencies. Daniel
Willard, President of the Baltimore & Ohio Railroad, told

Volume 136

Financial Chronicle

the Commission on the following day (May 26) that he
"staked his reputation" on the assertion that a general reduction in freight rates would mean disaster to a majority
of the railroads. Testimony of Mr. Aishton and Mr. Willard,
as summarized by the WaShington correspondent of the
New York "Times," follows:
Holding that it is generally conceded that adequate railroad transportation service is essential, Mr. Aishton declared the railroads can only meet
this public demand on a basis of equality of opportunity.
"The inequitable relationship of to-day cannot continue if railroad service
of to-rnorrow is to meet the public's requirements," he said. "Progressive
and sound co-ordination of all means of transportation cannot otherwise be
In a statement Mr. Aishton set forth the decline in net railway operating
income from $1,251,698,000 in 1929 to $326,364,000 in 1932, and repudiated the contention that a blanket freight rate reduction would increase
"For three years," he said, "the railroads have been advocating the
changes required for equality of opportunity with all instrumentalities that
serve the public in the field of transportation.
"It is essential that a realization of sound and equitable policies should
be had at the earliest possible moment."
Throughout a cross-examination by former Senator Smith W. Brookhart,
of Iowa, Mr. Aishton adhered to his argument that a general reduction in
rates would have little, if any, effect on the volume of traffic handled.
"Traffic may remain the same after as before a reduction in rates," he
said, "or it may increase to some extent, yet unless such increase is sufficient to overcome the loss in net revenue on the whole traffic due to the
lower rate, the final effect of the reduction is a decline in net revenue."
Statistics of Debt.
Answering a series of questions propounded by the Commission at the
opening of the investigation, Dr. Julius Parmelee, statistician for the Association of Railway Executives, said that Class I roads had a total outstanding
funded debt at the close of 1932 amounting to $10,812,796,385.
Deducting from this total $728,777,307 of equipment obligations, with
serial maturities and difficult to classify as to interest rate, and deducting
also a small amount of receipts outstanding, according to his estimate,
$10,084,013,450 of bonds bore an average nominal interest rate of 4.59%.
These outstanding bonds were grouped according to their interest rate by
Dr. Parmelee as follows:
Interest Rate %—
3 to 3.993,458.755.458
4 to 4.49
4.50 to 4.99
5 to 5.99
6 to 6.99
Rate not shown
Called upon by the Commission for a statement of his opinion, as the
head of what it considers "the typical railroad of the East," Mr. Willard
"I say that any general rate reduction at this time, with the present
greatly reduced volume of business, together with the uncertainty of the
future, would tend to bring financial distress if not disaster to the majority
of the railroad companies of the United States.
"I appreciate that this is a very serious statement to make, but I wish to
add that it reflects my carefully considered judgment, based not only on
the statements which the railroad witnesses have submitted but upon some
considerable personal experience of my own."
Argument Is Forceful.
Mr. Willard's was the most forceful language used by any of the witnesses
presented by the railroads to refute the argument advanced by national associations of basic producers that a general reduction in rates would aid
business generally and increase the volume of railroad traffic.
"I do not believe," he said, "that a general reduction in freight rates at
this time would have any appreciable effect on the volume of business now
"I ought perhaps to add that railroad rates are constantly being reduced
either upon the initiative of management or by order of the Commission.
There has been a total reduction of 18% since 1922, including the first 10%
reduction ordered in 1922."
Taking Commissioner Joseph B. Eastman as his authority, Mr. Willard
said that, contrary to the popular impression, railroads are not overcapitalized.
"The same thing is true of the Baltimore & Ohio," he went on. "It
is not
overcapitalized, and yet at the present time over $315,000,000 of its capitalization is receiving no return whatever and the average
rate of interest
paid upon its outstanding funded indebtedness is less than 5%.
"The applicants in this case have repeatedly called
attention to the
decline in commodity prices and to the fact that railroad rates
have not
declined in similar amount.
"Assuming that there is a relationship between commodity
prices and
railroad rates, which I do not concede, I venture to call
attention to the
fact that since this application was filed the Congress of the United
responsive in part at least to requests from some of the associations
are among the applicants in this case, has enacted a law, which the
has signed, the announced purpose of which is to bring about an increase
commodity prices.
"If the law just enacted has the effect which the Congress
expects, the
alleged maladjustment between railroad rates and commodity prices
the applicants in this case complain of will be largely, if not
corrected—not, however, by the destructive method of further completely,
reducing or
deflating railroad rates but rather by the constructive method
of raising
the commodity prices themselves."

Reconstruction Finance Corporation Ruling Requiring
Reduction in "Excessive" Salaries of
Before Loans Will Be Made to Corporations—
Scale of Cuts Runs from 60% on Highest Salaries
to 10% Between $4,800 and $10,000—Rule, Already
Applied to Southern Pacific, Expected to Affect
Railroads Chiefly.
Corporations which in the future wish to obtain loans from
the Reconstructive Finance Corporation must reduce exces-


sive salaries paid to executives, according to a ruling announced by Jesse H. Jones, Chairman of the Corporation, on
May 28. Under this ruling salaries exceeding $100,000 must
be reduced 60%,including previous cuts, while a sliding scale
of reductions is specified for salaries in lower brackets. The
reductions will remain effective until the loans are liquidated
or until the corporations are able to meet fixed charges out
of revenues. The procedure mentioned has been applied to
the Southern Pacific Co. when its request for a loan of
$23,200,000 was approved. The statement issued by Mr.
Jones follows:
Although Congress has not yet adopted the legislation limiting salaries of
officers of corporations borrowing from the Reconstruction Finance Corporation, the Board of Directors of the Reconstruction Finance Corporation
made it a condition of the loan to the Southern Pacific Co. that, in the event
such a law is passed by Congress, the officers of the Southern Pacific will
put whatever limitation Congress imposes into effect from June 1 1933.
Regardless of Congressional action, the Corporation made it a condition
of the Southern Pacific Co. loan that salaries be reduced according to the
following percentages:
Any salary that has heretofore been more than $100,000 per year, to be
reduced not less than 60%, including previous reductions; salaries that
have ranged from $50,000 to $100,000, to be reduced not less than 50%,
including previous reductions; those ranging from $25,000 to $50,000, to be
reduced not less than 40%, including previous reductions; those ranging
from $15,000 to $25,000, to be reduced not less than 25%, including previous reductions; those ranging from $10,000 to $15,000, to be reduced not
less than 15%, including previous reductions, and those salaries and wages
from $4,800 up to $10,000 to be reduced not less than 10%,including reductions heretofore made.
Deductions of approximately 25% have already been taken by the higher
salaried officials of this road. Union contracts are not affected by the
Corporation's requirements.
These are the maximum salaries that can be paid by the borrowing corporation during the continuance of the loan of the Reconstruction Finance
Corporation, or until the road is earning all fixed charges. The road is also
required to go to hankers and the public for funds to repay the Government
as soon as the money market will permit.
While the Southern Pacific RR. loan is the first in which these salary
reductions have been required, it will be the policy of the Corporation to
impose similar conditions in all future loans to railroads or other corporations
paying excessive salaries.

According to Washington advices to the New York "Times"
on May 28, it is the general impression that the ruling will
affect chiefly the railroads. Discussing salaries paid railroad executives, the dispatch mentioned states:
According to a compilation of salaries made by the Inter-State Commerce
Commission in June 1932, the Chairman of the Executive Committee of the
Southern Pacific Co. received $150,000 in December 1929, which was cut to
$135,000,000 as of March 1 1932 ; the Vice-Chairman, $85,000 in 1929 and
$76,500 in 1932, and the President $100,000 in 1929 and $90,000 in 1932.
The Chairman and Vice-Chairman held the same office also on the Texas
New Orleans. Such additional reductions as have been made have not been
This report was compiled from questionnaires sent to the railroads at the
request of Senator Couzens and transmitted to him by Commissioner Eastman. It listed the following salaries:
Dec. 1 1929. Mar. 1 '32.
Atlantic Coast Line
Baltimore & Ohio
(Senior Vice-President)
Boston & Maine
Chicago & Northwestern
Chicago Milwaukee St. Paul & Pacific
Delaware & Hudson
Denver & Rio Grande Western
Erie System
Great Northern
Illinois Central System
Lehigh Valley
Missouri Pacific System_
New York Central System
New Haven System
Pennsylvania System
Southern Railway System
Union Pacific System
In connection with the salary of the President of the Baltimore & Ohio,
the report said that $120,000 as of March 1 1932 was figured after a reduction of 20%, effective May 1 1931, the salary at that time apparently having
been increased to $150,000 since the Dec. 1 level.
There have been numerous reductions since March 1932, bringing the
level of salaries to a somewhat lower range than given in the report, but these
have not been made available by the Commission.

Joint Stock Land Banks Must Liquidate, Says Webster,
Kennedy & Co., as Result of Enactment of Farm
Mortgage Relief Bill—Failure to Make Congress
Recognize Title "Instrumentalities of the United
States Government" Regarded as Adverse Action.
As a result of the enactment into law of the new Farm
Mortgage Relief bill, the future of the Joint Stock Land
Banks has been definitely defined, say Webster, Kennedy &
Co., of.New York, specialists in these securities, in a special
study of the new legislation. The firm says:
It will be learned with disappointment that all Joint Stock Land Banks
must liquidate--those that can, in an orderly manner, those that
have the alternative of early receivership or readjusting their obligations in
line with their shrunken assets at the expense of bondholders.
The hope that Congress would recognize and endeavor to give some meaning to the title "Instrumentalities of the United States
Government" has
ended in disappointment. The effort, by friendly interests, to
have these
banks liquidated through the Federal Farm Loan System, on a fair appraisal
basis has also failed to get support. In fact, the new legislation has resulted
largely from the efforts of the "Farm Bloc" to bring about a reduction in


Financial Chronicle

Interest rates to farmer borrowers and to stop foreclosures. Realizing that
they could not, legally, force the Joint Stock Land Banks to lower their
interest rates on farm loans and stop foreclosures, yet knowing that a
majority of the banks could not continue in business without financial assistance, the Farm Bloc leaders arranged the bill so as to make it virtually
impossible for these institutions to carry on.

Those weaker banks of the system which have been forced
to borrow from the Reconstruction Finance Corporation to
keep out of receivership now find themselves facing a critical
situation, the study continues. Having been authorized to
borrow only under provisions of the new law, they are apparently shut off from continuing on the old basis of unrestricted loans from the Reconstruction Finance Corporation.
The firm continues:
It appears certain that many of the banks will have to borrow or default
on bond interest within the next few months. Out of 46, only 18 have
earning assets equal to outstanding bonds, and, in many instances, a major
percentage of these assets simply represent loans that have not been foreclosed, although they have been definitely in default for some time. Certain
of these 18 banks are sound and will work out within their own resources,
but some will undoubtedly require reorganization.
As to the remaining banks, a number whose earning assets are slightly
below their outstanding bonds, yet which still show a good reserve and surplus, will probably be able to get along without borrowing from the liquidation fund (as provided under the new law). But the balance have such a
serious deficit between earning assets and bonds, and so many of these
assets are in default, that they will be forced to borrow soon or default on
interest, which means receivership.

The various banks "must offer some kind of compromise
proposition to bondholders which will scale down the indebtedness of the bank to a point which will permit continued
operation on an interest-paying basis," says the firm, which
If they apply for and receive loans from the $75,000,000 fund made available by the Emergency Farm Relief bill they must reduce their interest
rates on all mortgage loans outstanding to 5%. They can only hope that the
bondholders will see the picture clearly and co-operate in keeping the bank
out of receivership. That this can be accomplished is entirely problematical.
It will probably take several more receiverships to put force behind any
new reorganization plans.

Board of Indianw Commissioners is Discontinued—
President by Executive Order Abolishes Service as
Measure in Interest of Public Economy.

The Board of Indian Commissioners is to be abolished and
its functions taken over by the Secretary of the Interior.
From the "United States News" we quote:
Action to this end was taken May 25 by President Roosevelt in the
interests of economy, and subsequently the Department of the Interior
announced that substitution of Federal day schools and the public school
facilities for some of the Government Indian boarding schools is one of
the ways in which the Indian Service of the Department will accomplish
budgetary changes made necessary by the economy program.
The President sent a message to Congress with an executive order abolishing the Board of Indian Commissioners. The message follows:
To the Congress: Pursuant to the provisions of Section 1, Title III, of
the Act entitled "An Act to maintain the credit of the United States Government," approved March 20 1933, I am transmitting herewith an executive
order abolishing the Board of Indian Commissioners.
There is no necessity for the continuance of this Board and its abolition
will be in the interests of economy.
May 25 1933.

Arms"Embargo Resolution Reported to Senate With
Amendment Providing That Any Ban on Arms
Shipments Would be Invoked Against All Parties
to a Dispute—Clause Urged by Senator Johnson
Said to Assure United States Neutrality.
The arms embargo resolution, which was passed several

weeks ago by the House of Representatives, was favorably
reported to the Senate on May 27 after an amendment had
been adopted restricting the President in the use of the
proposed embargo authority to prohibiting exports of arms
to all parties in international disputes. This compromise
measure was agreed to in conferences between Secretary of
State Hull and Chairman Pittman of the committee, and
was the result of proposals of Senator Johnson that the
embargo might not be decreed to affect a single nation.
The amendment adopted by the committee and included
in the reported resolution reads as follows:
Provided, however, that any prohibition of export, or of sale for export,
prohibited under this resolution, shall apply impartially to all of the parties
in the dispute or conflict to which it refers.

Authorship of this amendment was attributed to John
Bassett Moore, authority on international law, who had
severely criticized the resolution in the form in wLich it
passed the House. Senator Johnson said that the amendment
"retains the status of neutrality of this nation" and added
that "if an aggressor is to be determined, the Congress
retains the right to act." The complete text of the resolution, as amended, follows:
Joint Resolution to prohibit the exportation of arms or munitions of war
from the United States under certain conditions:
Resolved by the Senate and the House of Representatives of the United
States of America in Congress assembled. That whenever the President
finds that in any part of the world conditions are such that the shipment of

June 3 1933

arms or munitioneof war from-countries which produce these commodities
may promote or encourage the employment of force in the course of a dispute
or conflict between nations, and, after securing the co-operation of such
governments as the President deems necessary, he makes proclamation
thereof, it shall be unlawful to export, or sell for export, except under such
limitations and exceptions as the President prescribes, any arms or munitions of war from any place in the United States to such country or
countries as he may designate, until otherwise ordered by the President or
by Congress. Provided, however, that any prohibition of export, or sale
for export, prohibited under this resolution, shall apply impartially to all
the parties in the dispute or conflict to which it refers.
Sec. 2. Whoever exports any arms or munitions of war in violation of
Sec. 1 shall, on conviction, be punished by a fine not exceeding $10,000 or
by imprisonment not exceeding two years, or both.

Inquiry into Affairs of J. P. Morgan and Other Private
Bankers—President Roosevelt Reported as Telling
Senate Committee He Desires Inquiry Pushed.

In Associated Press advices from Washington May 29,
it was stated that President Roosevelt told members of the
Senate Banking Committee that day that he wanted their
investigation of J. P. Morgan & Co. and other private
bankers to be pushed forward "without limit." The
Associated Press added:
In an official source it was asserted that the President "renewed his expression of desire to have the investigation go through without limit and
indicated his complete confidence in the Committee."
At the beginning of the investigation into private bankers, President
Roosevelt gave the Committee his backing and urged that the inquiry be a
thorough one.
As a matter of fact, it was said to-day in an informed quarter, the President suggested to the Committee at that time that its activities be turned
toward the private bankers.
Documents in the hands of Senate investigators show J. P. Morgan &
Co. and its affiliate, Drexel & Co., have sold six bond issues during recent
years which do not mature until after the year 2,000.
This practice was severely criticized at the last session of Congress by
Senator Couzens, who was then Chairman of the Senate Inter-State Commerce Committee. Railroad officials defended the procedure,saying many
investors want securities which will insure return for many years to come.
The list, carried in documents filed with the Committee, by the Morgan
company, follows:
Issues managed by J. P. Morgan & Co.:
Cincinnati Union Terminal Co., issued Nov. 19 1931, first mortgage,
5%,$12,000,000, issue price 97,due July 1 2020; selling profits 359.793.
Same company, issued Sept. 25 1930, first mortgage, 43 %,$12,000,000,
issue price 102 H,due July 1 2020; profits $64,000.
Louisville & NashvIlle RR. first refunding mortgage, 4% 0, issued
Feb. 7 1930, $15,000,000, price 95, due April 1 2003; profits $113,360.
Morris & Essex RR., issued Oct. 21 1927, first refunding 3%%,$9,871,000, price 85, due Dec. 1 2200; profits $40,869.
New York Central RR., issued March 10 1931, refunding and improvement
%.$75.000.000. price 100, due Oct. 1 2013; profits $400,403.
Issues managed by Drexel & Co.:
Lehigh Valley RR. general consolidated mortgage, 4%, issued Dec. 28
1927, $12,686,000, issue price 923, maturity 2003; profits $54,822.

Inquiry into Affairs of J. P. Morgan & Co. by Senate
Committee Investigating Stock Exchange Trading
—Senator Glass Disavows Any Morgan Link.

The following (copyright by Nana, Inc.) from Washington
May 29, is taken from the New York "Times":
Threats and insulting letters by the score have beaten down upon the
head of Senator Carter Glass of Virginia because of his persistent opposition
to the methods used in the J. P. Morgan & Co. inquiry before the Senate
Committee on Banking and Currency.
Many in Washington and the country at large are puzzled to know why
this frail but doughty Senator, who has fathered most of the bank-reform
legislation in Congress in the last quarter century, should seemingly take
up the cudgels for the house of Morgan, which fought most of that legislation tooth and nail.
All the threats, all the criticism and all but one of the insults directed
against Senator Glass as an alleged "tool" of Wall Street have glanced off
harmlessly. One single exception sent him into a tower of rage, for it was
an uncomplimentary telegram from a man of some standing in the East.
The Virginian wrote this reply:
"Dear Sir: I am wasting a three-cent stamp to say I always disregard
the insults of a blackguard, particularly when they come from a distance?.
Pecora Is Criticized.
"I haven't the remotest relation to the house of Morgan and I don't
give a continental for it," Senator Glass said in an interview. "I do care
a great deal for the dignity of the Banking and Currency Committee of the
Senate, of which I've long been a member, and for orderly and sensible
procedure by the committee.
"Our members have been drawn around a long table for nearly a week
without one particle of knowledge beforehand about what counsel for the
committee proposed to disclose, without being given one particle of information as to what,if anything, J. P. Morgan & Co. has done of an informal,
illegal or illicit nature.
"Counsel for the committee, with a corps of some 15 or 20 accountants
and experts, spent weeks in combing the files and private papers and correspondence of the firm of Morgan & Co. One thing they seemed to have
discovered was that the Morgan firm had illegally and irregularly charged
off a loss of $21.000,000, thereby escaping, contrary to law, payment of
income taxes on that amount.
"It seemed to me inevitable that any counsel intent upon making a
fair and honest investigation of a banking firm, whether it be that of Morgan
or some one else, would have immediately demanded to know the meaning
of this apparent illegal evasion of income tax payment.
"Yet, Mr. Pecora waited until he had Mr. Morgan on the stand, and
without informing the committee as to his purpose, deliberately made the
impression on the committee, upon the press and upon the country that
this banking firm had been guilty of an irregular if not a criminal evasion
of the income tax law.
Cites Waste of Time.
"The facts are that despite Mr. Morgan's contention that he personally
was ignorant of the details of the transaction in question, Mr. Pecora
refused until compelled by the committee to call to the stand Leonard

Volume 136

Financial Chronicle

Keyes. Morgan's office manager, who made out the firm's income tax
returns for 16 years.
It "When Mr. Keyes did go on the stand his testimony, uncontradicted
to this moment, showed that the firm had done nothing of an irregular,
immoral or illegal nature so far as its Income tax returns were concerned,
but it had complied with every requirement of the law and had freely
submitted its income tax figures to the sworn and tested examiners of the
Internal Revenue Bureau.
"Had these facts been presented to the subcommittee prior to the opening
of the hearing, the committee then could have decided whether or not to
waste an entire day in police court interrogations of Mr. Morgan and Mr.
Keyes upon the groundless assumption that the banking firm had been
guilty of some irregular or illegal evasion of its income tax."
Senator Glass insisted that he felt no antagonism toward Mr. Pecora
and no particular friendliness for Mr. Morgan.

Inquiry into Affairs of J. P. Morgan & Co. by Senate
Committee Investigating Stock Exchange Trading
—Use of Private List by Banking House Defended
by George Whitney in Outlining Sale of United
Corporation Units Below Market—Senator Kean,
Dwight W. Morrow, Edgar Rickard, at One Time
Called Hoover Aide, Named at Probe.
Vigorous defense of the practice of J. P. Morgan & Co.
in offering common stocks of corporations in which it is
interested to individual buyers at cost, was offered before
the Senate Banking Committee on May 31 by George
Whitney, partner of the firm. The Washington correspondent of the New York "Journal of Commerce" in its
account of this went on to say:
Mr. Whitney's explanation of the practice to distribute risks to the
banking house came after a detailed probe into the financial set-up of the
United Corp., public utility holding company, organized by the Morgan
Ferdinand Pecora, counsel for the stock market investigation committee,
developed to-day that the Morgan firm passed on to another "private list"
of its customers units of United Corp. stock at a price of about 324 per
unit lower than it opened on the exchanges.
Option Warrants Cited.
The committee counsel further brought out that option warrants on
United Corp. stock, acquired by the Morgan firm during the transaction,
could have been marketed at a profit of about $68,000,000.
Mr. Whitney counteracted this latter development with the statement
that the banking firm could have made about $58,000,000 on certain stocks,
that it traded for United Corp. securities without taking the trouble of
organizing the holding company.
Protesting the reference to the list of customers allowed to purchase units
of United stock at the same price it cost the Morgan firm, as a "preferred
list," Mr. Whitney declared that those taking advantage of the firm's offer
assumed a definite business risk.
The idea is not new, he contended, and is common practice in England
and was in this country long before "boom" times. "We used them to
distribute the underwriting of common stocks we did not think it would
be secure for the bank to carry," he explained.
Mr. Whitney told Mr. Pecora that there were instances where his firm
had used the "private lists" before 1927, although there were few instances
during that period calling for their use.
Not Preference Lists.
"We do not consider them preference lists," he said. "They are lists of
people we know, have had relations with and are competent financially
and mentally to undertake the risk we offer them."
Later under cross-examination by committee counsel the witness declared
that the transactions were not underwriting the technical legal form, but
that they were done to "divide our risk."
"They were definite and direct purchases for sale transactions, but had
the same results as far as J. P. Morgan & Co. was concerned as underwriting," he emphasized. "While they were straight sales they
have in
the financial field an element of underwriting."
Asked what risk the customers had to take when the stock was offered
to them at $20 per share while it was selling on the market
at $37, the witness stated that he did not think that had been shown. He stated that the
stocks (Alleghany Corp.) were not being quoted on the market when the
Morgan house made the offer to sell.
Mr. Pecora replied that trading on a "when issued basis" opened on the
Alleghany stock Jan. I 1929 at 30 to 32, and asked if the witness could
produce letters to the private customers making offerings at 20 before that
date. Mr. Whitney stated that most of the offers were made in conversations over the telephone and no records were kept.
Harmony on Course.
Dissension that has existed in the committee at the manner in which the
investigation was being conducted was ironed out at an executive session
this morning. Senator Glass, who had objected to "circus" methods and
who had asked to be informed as to the course of the proceedings, declared
that he was satisfied and had obtained the information he desired.
In organizing the United Corp., J. P. Morgan & Co. received 800.000
shares of common stock in the corporation. 600.000 of the $3 preferred stock
and 714.000 optional warrants allowing the purchase of common stock at
$27.50 per share. Later the firm purchased for $10,000,000 400.000 shares
of common stock and 1,000,000 option warrants. An offer similar to the
latter transaction was made at the same time by Bonbright & Co. and
In passing the stock in the corporation to customers on ita private lists,
the company sold the stock in $75 units consisting of one share of $3 preference stock, at its liquidating value of $5 and one share of common stock
at $25. Mr. Whitney explained that this private offering, made at cost
to the Morgan firm, was made during Jan. 9 and 14 1929.
Mr. Pecora pointed out that George Howard, President of the United
corp., had previously testified that on Jan. 21 the first quotation on the
counter market priced the units at $99.
Denies Bonus Grant.
After Mr. Whitney had stated that the stock was sold to the private customers at cost to the firm, Mr.Pecora asked if the option warrants the company received in the transaction were held as a bonus. Mr. Whitney replied
in the negative, adding that the warrants were not carried on the company's books because they were not "proper assets."
Mr.Pecora introduced evidence showing that the option contracts rose to
$47.50 during the climb of the United Corp. stock. Mr. Whitney stated
under examination that the company sold 200,000 of the warrants from


July to September, 1929 at an average price of about $40, a total of 38,490.000.
The committee counsel then asked if the Morgan partners could not have
sold the remaining 1,514,000 warrants at a "very substantial" price for
some time after that.
Mr. Whitney pointed out that the firm still held the options and that
it was a matter of speculation as to at what price they could have been sold.
He added that the options are still bringing about $2 on the curb market
"because people still think it is a privilege to pay that amount for an
option to buy at $27.50 stock that now sells for about $9."
In the list of the customers invited to purchase the United Corp. units
were the names of Secretary of the Treasury Wood's', Senator McAdoo
(Dem., Calif.), John J. Raskob and Norman H. Davis, Ambassador-at
Large, all of whom have been named in previous lists.
Dwight W. Morrow,former Ambassador to Mexico, was another prominent notable listed, as was Charles G. Dawes, who was Ambassador to
England at the time he was indebted to the Morgan company.
An attempt to link former President Hoover with the private list through
Edgar Pickard. said to have been his financial agent, named on the United
Corp. list, was made by Senator Costigan (Dem., Colo.). Mr. Whitney
declared that he did not know Mr. Pickard.
Senator Kean (Rep., N. J.), whose banking firm of Kean, Taylor & Co.,
was listed, issued a statement through the committee pointing out that his
firm has associated in Morgan issues for a considerable time. He declared
that he had no knowledge of the United Corp. transaction.

The following is from the Washington dispatch May 31
to the New York "Times":
Kean Explains Morgan Offer.
The following explanation by Senator Kean of New Jersey for the name
of his firm Kean, Taylor & Co., being on the United Corp. list, was read
into the record by Senator Fletcher, Chairman of the Committee:
"A newspaper reporter came in to see me last Thursday and said the
name of my firm, Kean, Taylor & Co., was on the list of Messrs. J. P.
Morgan & Co.
"I asked Mr. Pecora on Friday if this was so, and he said he would look
It up.
"When I was a young man, after starting the firm in 1892, I was able
to place a considerable number of bonds brought out by Messrs. J. P.
Morgan & Co. I asked the present Mr. Morgan's father for an interest
in the bond syndicates that they were bringing out, and Mr. Morgan
having a kind heart and finding that I was ready to work, gave me a small
interest from time to time, on which amounts I made good.
"In other words, I sold more bonds than my proportion of the syndicates,
and I have taken interests in the Morgan offerings ever since. At about the
same time I obtained like interests in bond syndicates originated by Messrs.
Kuhn, Loeb & Co.; Dillon, Read & Co. and other issuing houses, because
as a distributer I could be useful to them.
"Since becoming a member of the Senate I have spent most of my time
in Washington, so that I am and have been out of touch with my office
and business there."

Inquiry into Affairs of J. P. Morgan & Co. by Senate
Committee Investigating Stock Exchange Trading
—List of Those to Whom Stock of United Corporation, Inc., Was Sold Below Market Price.
The following list of those to whom J. P. Morgan & Co.
sold stock of the United Corporation, Inc., at $75 a share
in January 1929 when it was listed on the market at $99,
was placed in the record of the Senate investigation on
May 31 by Ferdinand Pecora, counsel for the Banking
and Currency Sub-committee, according to the "Times":
Mrs. Helen B. Achelis
W. H. Aldridge, President, Texas Gulf Sulphur Co
A. M. Anderson, partner, J. P. Morgan & Co
Joseph Andrews, trustee, Bank of New 'York Sr Trust Co
Mrs. Irma D. Ashmead
I. C. R. Atkin
The Atlantic-Merrill Oldham Corporation
J. Howland Auchincloss
C. A. Austin, late President Equitable Trust Co
Mrs. Isabel Valle Austin
Gaspar G. Bacon and George Whitney
Trs. U-13 of trust dated 11-13-14, Mrs. Hope Norman Bacon
Priscilla T. Bacon, George Whitney and Gaspar G. Bacon, trustees
U-D of trust for benefit of Geo. F. Baker
Donald C. Bakewell, President Duquesne Steel Co
Bankers Company of New York, security affiliate Bankers Trust
Charles H. Barnes, director Medford Trust Co
Sosthenes Behn,Chairman International Telephone & Telegraph Co. 1,000
Otto F. Behrend. Treasurer Hammermill Paper Co
C. J. Bennett
J. J. Bernet, President
Ohio RR
Stephen Birch. director Kennecott Copper Co
C. N. Bliss, director Bankers Trust Co
Birth & Co., investment bankers
Amy W. Board
Bonbright & Co., investment bankers
Bonbright & Co., investment bankers
Nicholas F. Brady, late Chairman New York Edison Co
Charles S. Brewer
Bradford Brinton, director J. I. Case
Brown Brothers & Co., investment bankers
George F. Brownell, Vice-President Erie RR
Matthew Brush, President American International Co
Roger H. Bullard
George Burgess
W. E. Burnet, director South Porto Rico Sugar Co
Ward M. Canady, President U. S. Advertising Corp
W. C. Cannon, partner Davis. Polk, Wardwell, Gardner 81,
. Reed
George W. Carpenter, partner Jesup & Lamont, members New
York Stock Exchange
Mrs. Kathryn R. Carpenter
W. L. Carson
Dr. Alfred H. Clark
E. H. Clark, director Irving Trust Co
Clark. Dodge dr Co., members New York Stock Exchange
Leon R. Clausen, President J. I. Case
E.0. Congdon
Continental National Bank & Trust Co
Clinton H. Crane President St. Joseph Lead Co
8,, M. Crocker. Vice-President International General Electric Co.._
Mrs. P. E. Crowley
George Dahl
Arthur V. Davis, Chairman Aluminum Company of America
A. B. Davis
Henry G. Davis
John W. Davis, oounsed J. P. Morgan & Co
Norman H. Davis, U. S. Ambassador at Large
Donald K. David, trustee Bowery Savings Bank



Financial Chronicle

June 3 1933

Lewis C. Dawes
Old Colony Corp.,security affiliate First National Bank of Boston_ _ 2,000
D. Debevoise
John Oldham, director Atlantic National Bank
Moreau Delane
Robert E. Olds, late Assistant Secretary of State
Wm. F. Delany
General John J. Pershing
Edward Dibrell
Harry Peters
D. J. Dimock
Frank L. Polk, partner Davis, Polk, Wardwell & Reed
Dominick & Dominick, member New York Stock Exchange
W.Julius Polk
Camille Dreyfus, President Celanese Corp
Daniel E. Pomeroy, director American Brake Shoe and Foundry.. _ _
J. A. Sanquhez, employee J. P. Morgan & Co
W. C. Potter, President Guaranty Trust Co
Drexel & Co., Philadelphia partnership of J. P. Morgan & Co
John W. Prentiss, Hornblower & Weeks, member New York Stock
Drexel & Co., Philadelphia partnership of J. P. Morgan & Co
Seward Prosser, Chairman Bankers Trust Co
F. H. Ecker. President Metropolitan Life Insurance Co
Phillips Exeter Academy, trustees for the benefit of
Mrs. Cornelia Cousins Egan, wife Morgan employee
Mrs. D Y. Ranson Jr
Dean Emory
John J. Raskob,former Chairman Democratic National Committee;
Robert W. Emmons 3d, partner Gammack & Co., members New
director General Motors
York Stock Exchange
Lansing P. Reed, partner Davis, Polk, Wardwell & Reed
Miss Alwens G. Evans
S. W. Reyburn, President Associated Dry Goods
Evans, Stillman & Co., members New York Stock Exchange
Miss Ester S. Rich
William Everdell. director Continental Mortgage Guarantee Co_ _ _
Edgar Rickard
George B. Everitt, President Montgomery Ward & Co
Mrs. Rose M. Ricketts
J. V. Ewing estate
J. Henry Reraback. director Aetna Casualty Co
Charles S. Ruffner, director A. P. W Pulp & Paper Co., Ltd
William Ewing, special, partner J. P. Morgan & Co
G. Faccioli
Salomon Brothers & Hutzler, investment bankers
Eliot Farley, President D. L. & W. Coal Co
A. H. Sanford
Herbert L. Satterlee, member Satterlee & Canfield
Mildred Farwell
Dr. E. Ross Faulkner
Franz Schneider, Vice-President Newmont Mining
William C. Finley
Schoellkopf, Hutton & Pomeroy, Inc.. investment bankers
Mrs. Florence S. Schuette
First Chicago Corp., affiliate First National Bank, Chicago
First National Corp
Robert Meridith Serale
First Security Co., security affiliate First National Bank of N. Y
Charles Seymour
Malcolm D. Simpson
Laurence P Fisher President Cadillac Motor Co
A. P. Sloan, et al., President General Motors
Major Max C. Fleischmann, director Standard Brands
Carl Flach
Matthew S. Sloan,former President N. Y. Edison
H. A. Fortington, Financial Secretary Royal Insurance Co., Ltd
Harvey H. Smith 40
F. S. Smithers & Co., members N. Y. Stock Exchange
Albert Foster Jr
N. L. Snow
Teresa Fowler
A. H. Springer
Harry Frees
Mre. Edith T. Stanley
P. A. S. Franklin, Chairman International Mercantile Marine
W. E. Frew, Chairman Corn Exchange Bank
Gilbert Stanley
State Street Investment Corp.. investment trust
Giovanni Fumml, Morgan employee in Italy
John A. Stephens Jr
G. L. Gegen
Edward R. Stettinius, Vice-President General Motors
Mary B. Ganunack
Spencer Trask & Co., investment bankers
Thomas H. Gamrnack, partner Gammack & Co., members New
George D. Stewart
York Stock Exchange
George H. Gardiner, member Davis. Polk, Wardwell & Reed
Stockholms Enskilda Bank
Cornelius J. Sullivan, partner Eidlitz & Hulse
Thomas Garrett Jr.. member Davis, Polk, Wardwell & Reed
J. J. Sullivan--------25
Miss Lydia K. Garrison
1;dlic, Wiiidir- --Gardiner
E. S. S. Sunderland, partner Davis,Mrs. Philip McKim Garrison
David L. George, member Dubosque, George & Farrington
Stock Exchange
Sutro Brothers & Co.. members New York
F. Gibbons
Miss Katharine Taylor
Harvey D. Gibson, President Manufacturers Trust Co
Myron C. Taylor, Chairman U. S. Steel Corp
Mrs. S. Parker Gilbert, wife of Morgan partner
Walter C. Teagle, President Standard Oil Co. of N. J
J. Gindorff
Eldredge Thomas
Rudolph Goepel
George H. Townsend, director Fairchild Aviation
Philip G. Gossler. Chairman Columbia Gas & Electric Co
Mrs. P. M. Trace
Guaranty Co. of New York, security affiliate Guaranty Trust Co
Mrs. Elizabeth S. Trippe
Guggenheim Brothers, bankers
William H. Thurston, director Edward Haynes. Inc
T. S. Hallett. employee J. P. Morgan & Co
Union Trust Co., Cleveland bank
Hambleton & Co., Inc., investment bankers
The Union Trust Co. of Pittsburgh
Henry Hammill Jr
0. P. Van Sweringen, President Allegheny Corp
C. P. Hamilton, director American European Securities Co
Edmund N. Wakelee
P. T. Hanscom, President United Electric Securities Co
Miss Anna Walsh
Mrs. Hebe Harris
Cornelius J. Walsh
Walter P. Haskell
Allen Wardwell. Davis, Polk, Wardwell, Gardiner & Reed
Chester W. Hawkins
Mrs. Marie Watkins
Charles Hayden, partner Hayden, Stone & Co
N. A. Weathers, Chairman United Electric Securities Co
R. C. Hill, Chairman Consolidated Coal Co
F. C. Weems
William Hill
Hartland West
Charles D. Hines, National Committeeman for New York State;
John D. Ryan, late Chairman Anaconda Copper
resident manager Employers' Liability Assurance
Robert White
George C. Hitchcock
J. G. White & Co., Inc., investment bankers
Hitt, Farwell & Co., members New York Stock Exchange
White, Case & Co., Morgan attorneys
William E. Holloway Jr
George Whitney, agent, member .1. P Morgan & Co
George Holton, general counsel Socony-Vacuum
Martha B. Whitney
-----------R. G. Hutchings, director N. Y. N. H. & H
Trustees for Martha ---- -------------- iicWeri "I:. ifaitin, Ziaiiiii; iir.
W. J. Hutchison, director Kansas City Southern Ry
Bacon and George Whitney
Frederic Ewing, director Socony-Vacuum Oil Co
Margaret S.
-,--r -=-----, Arthur Curtis James, Chairman Western Pacific Ry
Whitney---- -Richard Whitney & Co., -----New York Stock Exchange.
P. H. Johnston, President Chemical National Bank
Richard Whitney & Co
A. N. Jones
Richard Whitney & Co
W. J. Jones
Ira Wight
Kean, Taylor & Co., member New York Stock Exchange
A. H. Wilson-------------------------------------- ---25
Dr. John J. Henan Keating
A. H. wigen. rne
Daniel Kelleher
T R Williams Ichabod T Williams & Sons
Cornelius F. Kelley, President Anaconda Copper Co
Joseph Wilshire, President Standard Brands
A. J. Kennedy, trustee Flushing Savings Bank
Garrard Winston, director Oliver Farm Equipment
Leonard A. Keyes, employee J. P. Morgan & Co
Wood, Low & Co., members New York Stock Exchange
Kidder, Peabody & Co., investment bankers
Wood Struthers dc Co., members New York Stock Exchange
Roy Kinnier
William Woodin
Loeb & Co., investment bankers
A. H. Woods, President Rockefeller Centre
H. R. Kurrie
10 Clarence M. Woolley, Chairman American Radiator & Standard
A. C. Lange
Sanitary Co
Lapondos Corp.. holding company for T. W. Lamont
J M.Young
Augustin Legoretta
Percy S. Young
Lee. Higginson & Co.,investment bankers
L. Edmund Zacher, President Travelers Insurance Co
Colonel Charles A. Lindbergh
William Ziegler Jr., director Standard Brands
Dr. Harley P. Lindsay
Stoughton B. Lynd
Henry E. Machold, former N. Y. State Republican Chairman and
Chairman St. Regis Paper Co
Inquiry into Affairs of J. P. Morgan & Co. by Senate
C. H. Mackay, Chairman Postal Telegraph & Cable Co
C. MacVeagh
Committe Inquiring into Stock Exchange Trading
Mrs. Louis Pugh Macy
-Text of Agreement on Morgan-General Electric
Manufacturers & Traders Peoples Trust Co
E. H. Manville
Deal-Sale of Mohawk Power Holdings at $12,000,1,000
Marine Trust Co
000 Below the Market Detailed.
Isabel A. Marsh
Dorothy Martin
In its Washington advices May 31, the New York "Times"
R. C. O. Matheny
W. G. McAdoo, Senator and former Secretary of Treasury
gave as follows the text of an agreement between the General
T. N. McCarter, President Public Service of New
Electric Co. and J. P. Morgan & Co., on the sale of holdings
Ural H. McCarter
J. J. McCloy, partner Cravath, de Gersdorff Swaine & Wood_ - - in the Mohawk Power Corp. to the Morgan firm at $12,Hall P. McCullough, partner Davis. Polk, Wardwell & Reed
R. B. Mellon, President Mellon National Bank, Pittsburgh
000,000 below the market price:
'F. F. Merseles
The General Electric Co. agrees to sell to J. P. Morgan & Co. its holdings
Stephen Merselis, late President Johns-Manville
Albert C. Milbank, partner Milbank, Tweed, Polk & Webb
and the holdings of the General Electric Employees Securities Co., after
Edward 0. Miner, Chairman Pfaudler Co
the approval by the board, in the Mohawk Power Corp., on the following
C. H. Miner
Minsch, Monett & Co., Inc., investment bankers
William A. Mitchell
(1) The common stock at the price of $40 plus interest at 5% from June 1
Daniel J. Moran, President Continental 011 Co
1928 to date of payment therefor; such date to be as J. P. Morgan & Co.
Alexander Perry Morgan
may elect between Jan. 1 and Jan. 15 1920;
D. M. Morgan
(2) The second preferred stock at a price of 107 flat, at the same
Morgan Grenfell & Co., London partnership of J. P. Morgan & Co_ 15,000
H. S. Morgan, et al, partner J. P. Morgan & Co
as provided above;
J. J. Morgan
similarly to
(3) The option warrants at a price of $20 flat, payment
Morgan & Cle:N;ii-riititnerifili-- J. ic.------------ ii - O of.f
- -- be made as above provided.
J. P. Morgan No. 2 account
In making the purchase as described, J. P. Morgan & Co. recognize
J. R. Morron, director B. & 0. Railroad
Hon. Dwight'W. Morrow,late Senator from New Jersey and former
the importance of preserving the good-will of the Brady and up-State
partner in J. P. Morgan & Co
interests in the general power situation.
Frederick K. Morrow, President United Cigar Stores
J. P. Morgan & Co. plan to handle their holdings of Mohawk Hudson
Charles Munroe
shares in harmony with the interests as described; having no present
J. A. Murray
di-000 tention of divesting themselves of such shares to any so-called foreign cor,
The National diiit--------iiitiiiii-------------iiitiiiiiii - ilia- ---- -10,000
Newmont Mining Corp
full consulporation or foreign interests; and engaging not to do so without
Northern Trust Co
tation with such interests as described and with officials of the General
J. D. Northrup
Electric Co.
Nosivad Corp
J. P. Morgan & Co. recognize the services that have been rendered to
M. O'Connor
Miss Ruth Ogg
the Mohawk Hudson Power Corp. by Charles Brewer as Chairman of the.
C. E. Mitchell, former Chairman National City Bank


Volume 136

Financial Chronicle

board, and are prepared to continue the obligations and present relations
of the General Electric Co. to him.
(Signed) J. P. M. & Co. G. S.
Photostat copy.

Inquiry into Affairs of J. P. Morgan & Co. by Senate
Committee Investigating Stock Exchange Trading
—L. P. Fisher of Cadillac Motor Car Co. Did Not
Buy Alleghany Corporation Stock for Speculation,
He Says.

Lawrence P. Fisher, President of Cadillac Motor Car
Co., was reported as stating on May 26 that he purchased
stock through J. P. Morgan & Co. at less than the market
price "because I was buying for investment and not for
speculation." A Detroit dispatch to the New York "Times"
indicating this, added:
Mr. Fisher's name was included in a list given the Senate Committee
of those who were able to buy Allegheny Corp.stock at $20 a share when it
was worth 50% more.
"As a matter of fact," he said, "at the time the stock was purchased
It was not even listed and no one knew exactly what the market price was.
"I bought it and paid for it as an investment, and not for manipulation.
If it was higher than $20,that was because somebody else was speculating."

Senate Inquiry Into Affairs of J. P. Morgan & Co. by
Senate Committee Investigating Stock Exchange
Trading—Vote in Committee on Publication of
Morgan Partnership Agreement—$51,538,000 Taxes
Paid by Banking House 1917-1929—George Whitney
Explains Figures on Assets.

Incident to the action of the Senate Banking and Currency
Committee in making public on June 1 the articles of copartnership of J. P. Morgan & Co., the Washington correspondent of the New York "Herald Tribune" on that date
The articles revealed that Mr. Morgan has reserved to himself important
powers over his partners, who now number 19. In case of a difference or
dispute among the partners. Mr. Morgan's word is final. Mr. Morgan
may dissolve the partnership at any time, provided partners representing a
majority interest in profits consent. Mr. Morgan may compel any partner
to withdraw and fix the amount due him.
Share of Each Partner Not Disclosed.
Among other provisions of the articles are these:
In case there should be no lineal descendant of Mr. Morgan in the firm,
the firm name of J. P. Morgan & Co. shall not be used more than 15 years,
unless there should again be a lineal descendant of Mr. Morgan in the
The partners can take only half their profits each year, the rest being
kept as "undivided profits."
The basic articles were drawn in 1916 and have stood unamended since
that time, it was revealed. The supplemental provisions showing the percentage of profit to which each partner is entitled were not made public.
These have changed each time that a partner has died or resigned or a new
partner has been admitted. Mr. Morgan's older son, Junius S. Morgan,
became a partner in 1919, and his younger son, Henry S. Morgan, became a
partner in 1928. so that there seems little likelihood that the provision for
possible discontinuation of the present name of the firm will be used in the
visible future.
The Vote in Committee.
The publication of the articles, which John W. Davis, counsel to Mr.
Morgan, said week before last were so confidential that he never had seen
them, was voted by the Senate Banking and Currency Committee in executive session this morning. All the 14 or more member of the committee
present voted in favor of it except 3, who wanted the supplemental material
about the division of profits also made public. The three were Senator
Edward P. Costigan, Democrat, of Colorado; Senator James Couzens,
Republican, of Michigan, and Senator Peter Norbeck, Republican, of
South Dakota, who sent his vote by Senator Costigan.
In announcing the determination of the Committee to newspaper men,
Senator Duncan U. Fletcher, Democrat, of Florida, the Chairman, said
that the structure of the firm was deemed of public interest.
"The question was raised as to whether the powers granted to one partner
are such as to prevent the articles being construed as a real partnership
agreement," he said.
Bearing on Partner's Income Tares.
Senator Fletcher added that this point had a bearing on the question
of the income tax paid by the partners. As a co-partnership the firm does
not pay income taxes, the taxes being paid individually by the partners.
As was brought out last week, the profits or losses of the partnership were
periodically established by the dissolution of the partnership and the for
mation of a new one whenever a partner dropped out or was added.

The text of the partnership agreement as made public
by the Senate Committee is given elsewhere in our issue
to-day. As to what was brought out at the Committee
hearing on June 1 we quote the following from the "Herald
Tribune's" account of the hearing on that day:
From 1917, when the income tax law was first imposed,to 1929,inclusive,
the total income tax paid by Mr. Morgan and his partners was $51,538,000.
During the three boom years, 1927-29 inclusive, the partners paid in the
aggregate $21,675,000. It was brought out at the beginning of the investigation that, because of their capital losses, the partners had paid an aggregate of only slightly less than $48,000 for 1930 and no income tax for 1931
and 1932.
In 1929, the United Corporation, the Morgan-Bonbright utility holding
company, acquired 800,000 shares of the common stock of Public Service
of New Jersey and 53,000 of United Gas Improvement common from the
American Superpower Corporation by a transfer through a specially created
Mr. Pecora
third corporation, the Public Electric Holding Co.
persistently sought the reason for the creation of this third corporation.
He intimated that it was to evade the payment of taxes which would have
been incurred by the American Superpower Corporation if it had revalued
the stock on its own books. Mr. Whitney as persistently said he did not
know why it was done, but that he assumed it was to suit the "convenience"
of American Superpower, a corporation with which he had no connection.
J. P. Morgan & Co. and Bonbright & Co. opened a joint stock account


in 1929 to support the $3 preference stock of United Corporation. A total
of 99,000 shares was bought and resold through the account. Mr. Whitney
called this a "merchandising operation." Mr. Pecora insisting upon the
term "stabilizing the market," which he found used in a cablegram concerning the operation taken from the Morgan files. Mr. Whitney did not like
the word "stabilize."
Two more lists of selected subscribers to Morgan stocks were made
public. One was of those who bought United Corporation units through
Drexel & Co., the Morgan house in Philadelphia. The other was a short
list of purchasers of Niagara Hudson Power Corporation. Among the
prominent names which had appeared on previous Morgan lists were Owen
J. Robert, now (but not then) Justice of the United States Supreme Court;
Owen D. Young, W. W. Atterbury, President of the Pennsylvania RR.,
and Justice John W. Kephart, of the Pennsylvania Supreme Court, and
J. Henry Roraback, Republican National Committeeman for Connecticut.
Harvey C. Couch, who later became a director of the Reconstruction
Finance Corporation, made a first appearance.
On Dec.31 1930, outstanding loans arranged by the Morgan firm for four
utility companies in the United Corporation group totaled $91,644,636.
in which the house of Morgan participated to the extent of $48,894,636.
The Niagara Hudson list of selected subscribers received units consisting
of one share of common, one class A warrant and one class C warrant for
$25 a unit. The first market quotations, in the summer of 1929 for the
common stock and class A warrants totaled $36 or more for the two, thus
affording a profit of $11 on a quick turnover without counting the class C
Mr. Pecora revealed that the one person who was on record as refusing
to take the opportunity to subscribe to a Morgan stock issue was E.G.
Suckland, Chairman of the board of the New York New Haven & Hartford
RR, Mr. Buckland turned down the offer of United Corporation units
because his railroad was about to negotiate a contract with the Connecticut
Light & Power Co., in which one of the United group had an interest.
He did subscribe to the Morgan offerings of Allegheny Corporation and
Standard Brands.
When Mr.Pecora had finished reading Mr.Buckland'sletter to Arthur M.
Anderson, a Morgan partner, Mr. Whitney promptly read Mr. Anderson's
letter of reply, in which it was said "We wouldn't even have suggested that
you do such a thing if we had remembered," the complication of which
Mr. Buckland spoke
How many other persons may have declined to become subscribers is not
known as most of the offers were made orally.
Pecora Puzzles Auditors.
Mr. Pecora wound in and out during the day in a way which produced
continual rehashing of testimony previously given and left the few committee members in attendance and most of his auditors in the dark as to
what he was trying to bring out.
The sharpest conflicts between him and Mr.Whitney,who was again the
principal witness, came late this afternoon. Mr. Whitney's explanation of
the Morgan-Bonbright pool to support United Corp. preferred in 1929
as a normal merchandising operation dissatisfied Mr. Pecora. He insisted
that it was intended to "stabilize" the market. Mr.Whitney explained that
large blocks of the preferred were being sold by persons who evidently
wanted to hold only the common (the stock had been distributed in units of
one share of preferred and one of common). The result was that the price
of the preferred fell, he said, to an attractive investment point.
"We wanted to get the shares in the hands of those who wanted them for
investment," he finally explained.
Mr. Pecora broke the deadlock by going on to the transfer of securities
from American Superpower to United Corp. through a specially created
third corporation.
He relentlessly pushed Mr. Whitney for an explanation. Mr. Whitney
insisted he didn't know, but that it was something the lawyers contrived.
"Why the lawyers did it this way I don't just know," he said.
Mr. Pecora asked if it was not "in order to avoid payment of taxes
accruing to either corporation from such a transfer."
Mr. Whitney said he couldn't testify as to the motive.
"It didn't affect United Corp. one way or the other," he said.
Mr. Pecora's curiosity concerning the option warrants issued by United
Corp. consumed a considerable part of the morning session. But nothing
clear-cut emerged from this line of inquiry.
Glass on Capital Gains Law.
Senator Carter Glass, of Virginia, questioned Leonard S. Keyes, General
Manager of the Morgan firm, on the advantages and disadvantages to the
government of the capital gains tax.1 Mr. Keyes said he thought it would be
to the advantage of the government to repeal this provision of the income tax
law, because the "drop in values on the Exchange has been so great as to
wipe out the base for otherwise taxable income."
Senator Glass pointed out that this provision has yielded more than one
billion dollars in taxes in the seven years it has been in effect. It was in
this connection that the income tax payments of the Morgan partners from
1917 through 1929 were made public.
Mr. Pecora questioned Mr. Whitney at length on questions of public
policy toward utility holding companies. He quoted Owen D. Young's
testimony last winter in the I11131111 hearings that a holding company serves a
useful purpose but that there should not be more than one imposed over
operating companies.
Mr. Whitney agreed that the piling up of holding companies as in the
Insull pyramid was undesirable. He insisted that this had not been done
in the United States Corp. group. He said that while some of the companies
In which United Corp. has substantial interests are technically holding
companies to some extent, they were primarily operating companies.
Senator Fletcher announced to-night that the hearings will be continued
to-morrow and probably will extend through Monday or Tuesday of next

From the Washington advices June 1 to the New York
"Journal of Commerce" we quote the following:
George Whitney, member of the firm of J. P. Morgan & Co., was
again the witness when the Senate Banking and Currency Committee
to-day resumed its inquiry into banking, financing and securities sales
practices. He was further questioned concerning the affairs of the United
Corporation, the public utilities holding company organized in 1929 by
J. P. Morgan & Co., Drexel & Co.. and Bonbright & Co.
At the outset of the morning session Ferdinand Pecora, counsel for
the Committee, endeavored to show that, if the Morgan firm had sold in
the open market, at a price several points below the peak high of 1929.
the securities which the Morgan firm had received from the United Corporation the firm would have "reaped profits aggregating $122,668,000."
Mr. Whitnet admitted that this checked with his own arithmetic, but
quickly added that, while this "might have been done," as a matter of
fact "it was not done."
At yesterday afternoon's hearing Mr. Whitney put into the record
figures concerning the value of certain United Corporation holdings at


Financial Chronicle

acquisition and at the high market price of 1929. Questioned concerning
these figures this morning, Mr. Whitney said they related to the valuation
of those securities which were turned over to the United Corporation in
January, 1929, in exchange for certain stock and option warrants.
"And according to these figures." Mr. Pecora said, "had your firm
not transferred those securities, which consisted of securities of the Mohawk
Hudson Power Co., United Gas Improvement Co., and Public Service Corporation of New Jersey, to the United Corporation in January 1929. but
had held those securities until sometime in July, August and September of
1929, your firm could have sold those securities in the open market at
prices representing the highest valuations reached in the open market that
year, which would have yielded to J. P. Morgan & Co., a profit equivalent
to the difference—well a profit of $57,387,379. Am I correct in that interpretation of this statement?"
"That is correct," rejoined Mr. Whitney. "The reason I wanted to
get it in the record was because I was being questioned on certain supposititious circumstances, and I had said that we had done some guessing


Into Affairs of J. P.
Committee Investigating

Morgan & Co. by Senate
Stock Exchange Trading
—Text of Morgan Partnership Agreement.'
On June 1 the Committee inquiring into the operations
of J. P. Morgan & Co. incident to the investigation of
Stock Exchange trading made public the Morgan partnership agreement,omitting, however, the names of the partners
and the percentage of their interest. As given in Associated
Press accounts from Washington, the list follows:
This agreement made the 31st day of March 1916, between John Pierpont
Morgan and others, witnesseth:
That the parties hereto have this day formed a partnership for the transaction of a general foreign and domestic banking business in the cities of
New York and Philadelphia, upon the following terms and conditions:
First.—The business shall be conducted in New York under the firm
name of "J. P. Morgan & Co." and in Philadelphia under the firm name of
"Drexel & Co." and shall commence on the first day of April 1916.
--The capital of the partnership shall be as follows:
Third.—The net profits and losses shall be divided and borne as follows:
(Second and third sections not given completely in conformity with
earlier decision of the Senate Banking Committee.]
Fourth.—Interest at the rate of 6% per annum shall be allowed or
charged on all partners' accounts, including capital and undivided profits.
Fifth.—No transaction shall be made which shall be objected to by any
member of the partnership.
Sixth.—In case of a difference or dispute between members of the partnership, the same shall be submitted to the decision of Mr. John Pierpont
Morgan, which shall be final.
Provision For Dissolution.
Seventh.—The partnership may be dissolved at any time by Mr. John
Pierpont Morgan. subject to the liquidation thereof; provided that partners
representing a majority in interest in the profits of the partnership shall
consent to such dissolution.
Eighth.—Any partner may withdraw from the partnership upon giving
three months' written notice of his intention to do so. In that event, the
remaining partners may continue the business, and the shares of the profits
or losses of the withdrawing partner or partners shall be divided thereafter
among the remaining partners, or otherwise disposed of, according to the
decision of Mr. John Pierpont Morgan, who shall fix the valuation of the
assets, determine what portion of the assets, if any, shall be appropriated
as an offset to liabilities, and also be the judge of the amount due such
withdrawing partner or partners on account of capital, undivided profits and
credit balances.
The amount so due may be fixed by Mr. Morgan as of three months
after the receipt ()ranch notice or as of the 31st of December next ensuing
after the receipt ofsuch notice, and the interest ofsuch withdrawing partner
or partners shall continue at the risk of the business until the date as
The determination of Mr. Morgan as to the dates for fixing the amount
due such withdrawing partner or partners shall be communicated in writing
to him or them within 30 days after receipt ofsuch notice of withdrawal.
The amountso fixed shall be paid to such withdrawing partner or partners
within three months after the date as of which the value of his or their
interest shall have been fixed, except in the event that a liquidation of the
partnership shall have been entered upon prior to such date, in which
event, and notwithstanding the foregoing provisions, the interest of such
withdrawing partner or partners shall abide the results of liquidation and
shall be payable only as the liquidation proceeds.
When Mr. Morgan shall fix the amount as due any withdrawing partner,
a schedule shall be furnished showing the valuations at which the various
assets of the partnership were appraised, and what portion of the assets, if
any, have been appropriated as an offset to liabilities. Any withdrawing
partner; if required, shall take his pro rata share of the assets not so appropriated to an extent covering the amount so due him.
Ninth.—It is further agreed that Mr. Morgan may, at any time, Compel
any partner at once to withdraw and retire from the partnership, upon
giving him written notice to that effect, and in that event, the mount due
such retiring partner shall be forthwith fixed by Mr. Morgan, and thenceforth the interest of such partner shall be dealt with in the same manner as
above provided for in the case of a voluntary withdrawal by such partner.
Tenth—In case of the death of any partner other than Mr. Morgan, if,
within 30 days after such partner's death, such of the surviving partners
as shall represent a majority in interest in the profits of the partnership
(exclusive of the interest of such deceased partner therein) shall give to
the persons named in his will as executors, or to his administrators or other
legal representatives, written notice that they desire an extension of the
partnership for a period specified in such notice, not exceeding three years
after the death ofsuch deceased partner, then and in that event the partnership shall continue for the period not exceeding three years so indicated
by them, and the capital and interests hereunder of such deceased partner
and his estate and his and its responsibility and interests in the business as
continued shall continue during such period of extension.
The interest of such deceased partner in the partnership shall be ascertained and dealt with in the same manner as is hereinbefore, in Article
VIII, provided for in the case of a voluntary withdrawal, and the date of
the death of such partner, or in the event that notice of extension of the
partnership shall have been given as hereinbefore in this article provided,
then the date of expiration of the extended period specified in such notice
shall stand in the place of the date adopted for termination of his interest
as required by said article VIII in the case of a partner voluntarily withdrawing.

June 3 1933

If at any time fixed by the provisions of said Article VIII or of this present
article for the doing of any act or the making of any decision by Mr. Morgan
with reference to the interest of a withdrawing or deceased partner, Mr.
Morgan shall not be living, then such act may be performed by such of the
continuing or surviving partners as shall at such time represent a majority
in interest in the profits of the partnership (exclusive of the interest of Mr.
Morgan therein) with the same force and effect as if performed by Mr.
ELEVENTH.—In case of the death of Mr. John Pierpont Morgan the
partnership shall be dissolved on the 31st day of December next ensuing,
unless his death be within a period of six months prior to Dec. 31 in any
year. in which event the partnership shall continue until the 31st day of
December in the next ensuing calendar year and shall then he dissolved.
If, however, within thirty days after Mr. Morgan's death such of the
surviving partners as shall represent a majority in interest in the profits
of the partnership (exclusive of the interest of Mr. Morgan therein) shall
give to the persons named in his will as executors, or to his executors, or
to his administrators (or other legal representatives) written notice that they
desire an extension of the partnership for a period specified in such notice
not exceeding three years after Mr. Morgan's death, and then and in that
event the partnership shall continue for the period not exceeding three years
so indicated by them and shall then be dissolved: and the capital and interests hereunder of Mr. Morgan and his estate and its responsibility and
Interests in the business as continued during such period of extension shall
Twelfth—Upon the dissolution of the partnership following the death of
Mr. Morgan, the good-will of the business and the right to use the firm
names of J. P. Morgan & Co., and Drexel & Co. shall belong to the then
surviving partners who shall thereupon decide whether to continue the
business and, if continued. upon what terms.
In case such surviving partners cannot agree either as to the continuance
of the business or the terms and conditions of the new partnership, the
surviving partners representing a majority in interest in the profits of the
old partnership (exclusive of the interest of Mr. Morgan therein) shall have
the right to decide and shall decide what shall be done in respect of continuing the business and the terms and conditions of a new partnership, and
their decision shall be conclusive and binding on all the surviving partners.
In case such majority in interest shall decide to continue the business,
such majority shall determine the amount due Mr. Morgan's estate OD
account of his capital, reserved profits and net credit balances, and the
interest of Mr. Morgan's estate shall be dealt with in the same manner as
hereinbefore in Article 8 provided for in the case of a voluntary withdrawal
of a partner, except that the powers vested in Mr. Morgan by Article 8shall
in such case be vested in such majority in interest.
In case such majority in interest shall decide not to continue the business,
the responsibility and interests of Mr. Morgan's estate shall be subject to
the results of the liquidation of the partnership.
In case such majority in interest shall decide to continue the business,
any partner not desiring to remain in the partnership may withdraw therefrom in the same manner and upon the same terms and conditions as provided in Article 8 hereof; and in no event shall such withdrawing partner
or partners be entitled to any interest in or allowance for either the good-will
of the business or the use of the firm names; but such good-will and firm
names shall belong to the remaining partners free from any claim whatever
of such partner or partners so withdrawing from the partnership.
If the business or any portion thereof be continued under the same
firm name of J. P. Morgan & Co. and at any time there should cease to be
any lineal male descendant of Mr. J. Pierpont Morgan in the male line
bearing the name of Morgan. in the partnership, the right to the use of
the firm name of J. P. Morgan & Co. shall cease after 15 years from such
time, unless before the expiration of such 15 years there should again be
such a lineal descendant of Mr. J. Pierpont Morgan in the partnership, in
which case the right to use said firm name shall continue unimpaired until
15 years after such time as there should again be no such lineal descendant of
Mr. J. Pierpont Morgan in the partnership.
In no event shall the good-will of the business or the right to use the firm
name have any cash or money value either as between the existing partners
or as between the existing partners and any withdrawing or former partner,
or the estate of any deceased partner or any descendant of Mr. J. Pierpont
Morgan, whether or not such descendant has ever been a partner in the
And each of the parties hereto hereby covenants with each of the others
that he vrill never become or be a partner in any partnership using, and
that he will never use,said firm name of J. P. Morgan & Co. in violation of
the provisions of this article.
Thirteenth. It is further agreed not only with respect to the partnership
hereby formed, but also with respect to any successor partnership, that
upon the death of any partner and the termination of his interest or that
of his estate in the partnership, or upon the voluntary or compulsory
withdrawal of any partner or partners, or upon the dissolution of the partnership and the formation of a successor partnership, the good-will of the
business and the right to use the firm names shall belong to the surviving
or continuing partners, and that in no case shall any estimate ever be put
upon the good-will or right to use the firm names in ascertaining the amount
due any withdrawing partner, whether such withdrawal be voluntaryor
compulsory, or the estate of any deceased partner.
The valuations, decisions and determinations made by Mr. Morgan or
the majority in interest as hereinbefore provided shall in all cases be final
and conclusive against a withdrawing partner or the estate of a deceased
Fourteenth.—The books of the partnership shall be settled on the 31st
of December in each year. One-half of each partner's proportion of profits
shall be placed to his credit. The other half shall be set aside and kept
as undivided profits until such time as Mr. John Pierpont Morgan may
consent . its division among the various parties in interest as provided in
It is also understood that no partner shall draw from the partnership
any money beyond the amount placed to his credit, without the consent
of the other parties hereto.
Fifteenth.—It is understood and agreed that no partner shall engage
in any other business or be a general or special partner in any other firm.
Sixteenth.—The firm name shall not be used by any partner except in
the partnership business.
Seventeenth.—Speculation In stocks or anything else by the individua
members of the partnership is prohibited; but this clause shall not be construed so as to prohibit any partner from investing his private means in
such way as he may see fit.
Eighteenth.—No member of the partnership shall become security or
endorse,except in the partnership business, without the consent of the Partied
Nineteenth.—The firms of J. P. Morgan SG Co. and Drexel & Co. being
partners in the firms of Morgan, Grenfell & Co. of London, and Morgan,
Harjes & Co. of Paris, their proportion of the s pitsl thereof shall be
supplied out of the partnership capital mentioned in Article Second here-

of, and the profit or loss therein shall:be included in the partnership accounts hereunder.
Witness our hands and seals the day and year first above written in the
presence of
[At this point there was another blank in the document made public,
in accordance with the committee vote not to make public the names of the
partners. It was said in committee quarters, however, that there are no
secret partners and that the names are well known.]
Supplementary Notes.
There then followed these supplementary notes to the agreement:
Dec. 31, 1916.
Thomas Cochran has this day become a partner in the firms of J. P.
Morgan & Co. and Drexel & Co., subject to all the terms of the foregoing
New York, Dec. 31 1919.
Junius Spencer Morgan Jr., Elliot Cowdin Bacon and George Whitney
have this day become partners in the firm of J. P. Morgan & Co. and
Drexel & Co., subject to all the terms and conditions of the foregoing
New York, Dec. 31 1920.
Arthur E. Newbold's interest in the firms of J. P. Morgan & Co. and
Drexel & Co. having ceased this day and his contribution to the capital
having been repaid him, Thomas S. Gates has this day become a partner
In the firms of J. P. Morgan & Co. and Drexel & Co. subject to all the
terms of the foregoing agreement.
New York, Dec. 31 1921.
William Pierson Hamilton withdraws this date from the firms of J. P.
Morgan & Co. and Drexel &'Co. and his contribution to capital has been
repaid him.
New York, Dec. 31 1922.
After settlement of the books on the 31st day of December 1922, and each
year thereafter as provided in Article 14, the net balances then standing
to any partner's credit shall be considered as capital, and such amounts
shall not be withdrawn without the consent of Mr. Morgan.
New York, Dec. 311922.
Henry P. Davison's interest in the firms of J.P. Morgan & Co.and Drexel
& Co. having ceased this day, his contribution to the capital has been
repaid to his executors.
New York, June 30 1923.
Russell Cornell Leffingwell has this day become a partner in the firms of
J. P. Morgan & Co. and Drexel & Co.. subject to all the terms of the
foregoing agreement,
New York, Dec. 31 1924.
Elliott Cowdin Bacon's interest in the firms of J. P. Morgan & Co. and
Drexel & Co. having ceased this day,his contribution to the capital has been
repaid to his executors.
New York, Dec. 31 1925.
Edward It. Stettinlus's interest in the firms of J. P. Morgan & Co. and
and Drexel & Co. having ceased this day, his contribution to the capital
has been repaid to his executors.
New York, Dec. 31 1926.
William H. Porter's interest in the firms of J. P. Morgan & Co. and
Drexel & Co. having ceased this day, his contribution to the capital has
been repaid to his executors.
Francis Dwight Bartow, Arthur Marvin Anderson and William Ewing
have this day become partners in the firms of J. P. Morgan & Co. and
Drexel & Co.,subject to all the terms and conditions of the foregoing agreement.
New York, Dec. 311927.
Dwight W. Morrow, having retired on Sept. 30 1927, his interest in the
firms of J. P. Morgan & Co. and Drexel & Co. ceased on that date and his
contribution to the capital has been paid him.
Harold Stanley has this day become a partner in the firms of J.P. Morgan
& Co. and Drexel & Co., subject to all the terms and conditions of the
foregoing agreement.
New York, Dec. 31 1928.
Henry Sturgis Morgan, Thomas Stilwell Lamont and Henry Pomeroy
Davison have this day become partners in the firms of J. P. Morgan & Co.
and Drexel & Co., subject to all the terms and conditions of the foregoing
Thomas Newhall and Edward Hopkinson Jr. have this day become
partners in the firms of J. P. Morgan & Co. and Drexel & Co., subject to
all the terms and conditions of the foregoing agreement.
New York, June 30 1930.
Thomas S. Gates withdraws this date from the firms of J. P. Morgan &
Co. and Drexel & Co. His contribution to capital and his share in full to
date of profit and loss have been paid to him.
New York, Jan. 2 1931.
S. Parker Gilbert has this day become a partner in the firms of J. P.
Morgan & Co. and Drexel & Co., subject to all the terms and conditions
of the foregoing agreement.
New York, Jan. 2 1932.
Charles Denston Dickey has this day become a partner in the firms of
J. P. Morgan & Co. and Drexel & Co., subject to all the terms and conditions of the foregoing agreement.

Inquiry Into Affairs of J. P. Morgan & Co. by Senate
Committee Investigating Stock Exchange Trading
-List of Those Invited by Drexel & Co. to Subscribe to Stock of United Corporation on Favorable
The following list of those invited by Drexel & Co. to
subscribe at favorable terms to stock units of the United
Corporation, was put into the Senate record on June 1
before the Senate committee investigating J. P. Morgan
k Co., according to the New York "Times":
lifester S. Albright
Edgar Allegaert
.1. Howard Arthur
Thomas G. Ashton
W. W. Atterbury
Charles T. Bach
George Barker
C. D. Barney & Co

Thaddeus R. Beal

Charles G. Berwind
Anthony J. Drexel Biddle
Cordelia Bradley Biddle
Eugenia L. Biddle
Livingston L. Biddle
Thomas A. Biddle & Co

Bloren & Co
George H. Blake
Morris It. Boklus
William W. Bodine


Financial Chronicle

Volume 136



Matthew It. Boylan
Francis 13. Bracken
Henry G. Brengle
Sarah H. 0. Bright
Clarence C. Brinton
Alex Brown & Sons
Edward Browning, Jr
Robert J. 13runker
James It. Calhoun
Cassatt & Co
E. W. Clark & Co
John A. Clark
John L. Clawson
M. Worthington Clement
Morris L. Clothier
B. Dawson Coleman
Thomas Conway, Jr
J. Cooke
Albert J. County


D. Graham Craig
Anne L. Croasdill
Samuel M.Curwen
Agnew T. Dice
William C. Diekerman
Emily P. Dickson
Anthony J. Drexel
Mary Thompson Drinker
Sophie H. Drinker
John C. Dunn
Frederick W. Edmondson
George D. Edwards
Elkins, Morris 8: Co
Eleanor Mayo Riverson
Florence L. Ening
Julian L. Eysmans
Edgar C. Felton
Philip H. Gadsden
John K. Garrigues
Jay Gates
Thomas S. Gates
C.H.Geist Securities Corporation. 2,500
General Coal Securities Corporation, 100
William P. Gest
Robert Glendinning & Co
Gertrude C. Grover
Herbert W. Doogdall
Graham, Parsons & Co
Alfred M. Gray
Albert M. Greenfield
John H. Gross
Harry J. Haas
T. Truxton Hare
Jonas S. Harley
Harrison & Co
Charles V. Henry
William M. Hollanbach
John Hopkins
Edward Hopkinson, Jr
Daniel Houseman
Thomas W. Hulme
George H. Huston
Fred S. Hutchings
James T. Hutchings
Charles E. Ingersoll
Albert A. Jackson
Janney A- Co
Archibald T. Johnson
Arthur Jones
Edith Bolling Jones
Moorhead C. Kennedy
Reid Kennedy
Florence M. Kephart
John NV. Kephart
Henry H. King
Leonard H. Kinnard
William T. Kirk
William NV. Kitzmiller
Charles Z. Klauder
Louis J. Kolb
Walter D. Larbelere
William A. Law
Van Antwerp Lea
Edward B. Leisenring
Francis A. Lewis
Charles F. Lineaweaver
Horace P. Liversidge
Eleanor M. Lloyd
George F. Lloyd
H. G. Lloyd
H. G. Lloyd, Jr
Stacy B. Lloyd
Walter E. Long
Edward E. Loomis
TJzal H. McCarter
Edward McDonald
George H. McFadden & Bros
William J. MeGlinn
John W. McGregor
Andrew J. Maloney
Caroline F. Maloney
Donalk Markle
John C. Martin
John H. Mason
Sidney Mason
William Clark Mason
Joseph B. Mayer
John C. Miller

John W. Minds
Montgomery, Scott & Co
C. Eldridge Morgan
E. Corliss Morgan
William R. Morgan
Marshall S. Morgan
Effingham B. Morris
Effingham B. Morris, Jr
I. Wistar Morris
Arthur V. Morton
Catherine T. Munson
Johnathan C. Neff
A. E. Newbold, Jr
W. H. Newbold's Sons & Co
C. Stevenson Newhall
Thomas Newhall
William A. Obdyke
Charles S. W. Packard
Joshua A. Pearson
George Wharton Pepper
Henry C. Place
Charles Raymond Potts
Francis X. Quinn
Evan Randolph
Catherine C. Hanley
Mary Thompson Reath
Edward B. Robinette
Alexander C. Robinson
Mary D. Robinson
Owen J. Roberta
Benjamin Rush
Fred J. Rutledge
Sylvester B. Sadler
Bernard J. Samuel
William I. Schaffer
Charles H. Schlacks
Frank C. Schroeder
Garfield Scott
Arthur W.Sewall
George Siefert, Jr
J. Willison Smith
Harrison Smith & Co
Alfred G. B. Steel
Samuel J. Steele, Jr
Stone, Webster & Blodgett, Ine__
E. T. Stotesbury
Morris W.Stroud
Stroud & Co., Inc
Jeremiah J. Sullivan, Jr
John J. Sullivan
Walter Lamar Talbot
Clyde C. Taylor
Frank H. Taylor
William H. Taylor
Paul Thompson
John B. Townsend
Joseph B. Townsend
Townsend Whelen & Co
Lewis H. Van Dusen
T. Wilson V. MIddlesworth
Alexander Van Rensselaer
Sarah Drexel Van Rensselaer
Samuel M. Vauclain
Robert Von INfoschzisker
C. D. Waddell
Edmund W. Wakele
Charles C. Walbridge
Philip Wallis
Clarence A. Warden
William G. Warden
Samuel D. Warriner
Joseph Wayne, Jr
Joseph NV. Wear
John H. Weaver
West & Co
John L. Wilkie
James M. Willcox
Parker S. Williams
Asa S. Wing
Clement B. Wood
Wendell J. Wright
Frederick S. Wynn
Edward H. York, Jr
Percy S. Young
Richard R. Young



Inquiry ,Into Affairs of J. P. Morgan & Co. by Senate
Committee Investigating Stock Exchange Trading
-E. G. Buckland of New York, New Haven &
Hartford R.R. Declined to Accept Offer to Subscribe to Stock in United Corporation.
E. G. Buckland, Chairman of the board of the New York,
New Haven & Hartford Railroad declined, for an ethical
reason, declined to accept stock in the United Corporation
offered byJ.P.Morgan at prices to a list of its customers below
market prices. Mr. Buckland's reason was given in a letter
to Arthur M. Anderson, Morgan partner, on Jan. 16 1929.
The letter, according to Associated Press advices from Washington June 1 said:
Dear Arthur:
I appreciate very much your telephone suggestion that I subscribe for
and purchase shares of the new corporation organized to acquire a substantial interest in public utility corporations furnishing electrical energy.
I understood that one of those corporations is the Connecticut Light and
Power Company, with which my company has a contract. We are about
to open negotiations for future dealings with this company in regard to
power requirements, and I feel that I ought not at this time to consider
any investment in its securities or in securities of any corporation which
may exercise a directing influence.
-excuse the paradox
This may seem to you leaning over backwards, but
I feel more comfortable in that posture. Just the same, I appreciate your
having brought this to my attention.


The name of Mr. Buckland, it is stated, was among those
who availed themselves of some of the firm's other special


Inquiry Into Operations of J. P. Morgan & Co. by
Senate Committee Investigating Stock Market
Trading-Herbert Hoover's Secretary Says Former
President Engaged in No Stock Dealings While
in Office-Statement by Edgar Rickard.
Paul Sexson, Secretary to former President Herbert
Hoover, issued the following statement at Palo Alto, Cal., on


Financial Chronicle

May 31, incident to the Senate Committee investigation of
J. P. Morgan & Co.:
During his term, both as Secretary of Commerce and President, he
refused at all times to have any ownership or dealing in stock, directly or
Indirectly. in any shape or form.

Associated Press adviees from Palo Alto, from which we
quote, added:
Mr. Hoover's name was brought into the investigation by a member of
the committee in connection with that of Edgar Rickard, New York mining
engineer, named as a Morgan customer.
Edgar Rickard issued the following statement at his New York office
"Information from Washington states that I had a participation in the
United Corporation. This is true. My participation was entirely a
Personal matter of my own, and it is outrageous to attempt to capitalize
my association with Mr. Hoover to drag his name into this matter."

Inquiry Into Affairs of J. P. Morgan & Co. by Senate
Committee Investigating Stock Market Operations
—G. H. Howard of United Corp. Describes Financing by Banking House—Senator Glass Asks Aim of
George H. Howard, President of the United Corporation
and President of its wfholly-owned subsidiary, the New York
United Corporation, was the only witness on May 26 before
the Sub-committee Senate Banking and Currency Committee inquiring into the operations of J. P. Morgan & Co.
Regarding Mr. Howard's testimony we quote in part as follows from the Washington dispatch (May 26) to the New
York "Times":
The United Corporation, he testified, is a holding company principally
and was organized at
for securities issued by public utility
the instance of J. P. Morgan & Co., Drexel & Co., and Bonbright & Co.
"The United Corporation," Mr. Howard said in reply to Ferdinand
Pecora, counsel for the Senate Sub-committee, "was incorporated Jan. 7
"About Jan. 11 1929, it acquired from J. P. Morgan & Co. 350,957 shares
of common stock of the Mohawk Hudson Power Corporation, 62,360 shares
of second preferred stock of the Mohawk Hudson Power Corporation, 124,740
option warrants of the Mohawk Hudson Power Corporation, 130,565 shares
of common stock of the United Gas Improvement Company, 59,500 shares
of common stock of the Public Service Corporation of New Jersey, and
$700,801.10 in cash.
"The United Corporation issued in consideration of the receipt of those
shares and that cash, 600,000 shares of its $3 cumulative preference stock,
and 800,000 shares of its common stock, and 714,200 option warrants.
"The securities were turned in at a price of about $12,000,000 less than
their market at that time."
"Are you a Philadelphia lawyer?" asked Senator Couzens.
"No, sir," replied Mr. Howard.
"I had particular reference to that financial set-up when I asked if you
were a Philadelphia lawyer," said Mr. Couzens.
Value Was $55,566,644.63.
Mr. Howard testified that the market value of 130,565 shares of United
Gas Improvement stock on Jan. 8 1929, was $164 a share, and the total
market value for that stock was $21,412,660. On the same date, he said,
the market value of all the securities which. the United Corporation received in this initial transaction was $55,566,644.63.
"In exchange for those securities what, if anything, did the United
Corporation issue or give to J. P. Morgan & Co. in this initial transaction?" Mr. Pecora asked.
Mr. Howard answered: "Six hundred thousand shares of its $3 cumulative preference stock, 800,000 shares of its common stock ahd 714,200
option warrants."
The original stock plan of the United Corporation, he continued, authorized it to issue 13,000,000 shares, of which 1,000,000 were first preferred,
2,000,000 of "preference stock" and 10,000,000 of common.
"No first preferred stock has ever been issued," Mr. Howard said. "The
$3 preference stock is entitled to dividends at the rate of $3 a share a
year and $50 a share in liquidation if the Company is liquidated. The
common stock is ordinary common stock, entitled only to dividends in ease
dividends have been paid on the first preferred stock, if issued, and upon
the preference stock, which has been issued. Each share of stock has one
Morgan Control Brought Out.
Mr. Howard said the holders of the option warrants were entitled to buy
a corresponding number of common-stock shares at any time in the future
at $27.50 a share. Senator C,ouzens asked whether Morgan & Co. would
have had control only by the exercise of the 714,200 option warrants.
"With respect to the immediate first transaction," said Mr. Howard,
"they had 800,000 shares of common that would give them control. If
they had converted they would have gotten 714,000 more shares of common stock."
"They had control without exercising their right under any of these
option warrants?" Mr. Pecora inquired.
"That is right." . . •
"Of how many corporations does the United Corporation own any stock?"
Mr. Pecora asked. Senator Couzens suggested that the witness also give
the "percentage of control" in each instance.
Lists Unitedis Holdingtr.
"As of May 15," Mr. Howard testified, "United Corporation owned
Mohawk Hudson second preferred stock. 62,370 shares, 2.8%.
"Niagara Hudson common stock, 1,914,417 shares. 21.9%.
"Niagara Hudson Power Corporation 'A' warrants, 250,819 2/3. 9%.
"Niagara Hudson 'B' warrants, 145,530. 29.3%.
"Niagara Hudson Power Corporation 'C' warrants, 300,000. 132%.
"Common stock of the Public Service Corporation of New Jersey, 988,271
shares. 17.9%.
"6,066,223 shares of the common stock of the United Gas Improvement
Company. 26.1%,
"2,424,356 shares of the Columbia Gas and Electric Corporation common stock. 20.9%.

June 3 1933

"Columbia Oil and Gasoline Corporation Voting Trust Certificates, two
items, 49,053 shares and 35,716 shares. 3.6%.
"38,183 4856-8000 of Columbia Gas and Electric Corporation $5 convertible preferred. (I haven't that percentage.)
"Commonwealth and Southern Corporation, 1,798,270 shares. 5.3%.
"1,005,000 Commonwealth and Southern Corporation option warrants.
"34,857 505-600 of the stock of Electric Bond and Share Company.
67-100 of 1%.
"Societe Lyonnaise, 30,038 shares. 3.2%.
"48,705 shares of Lehigh Coal and Navigation Company. 2.5%.
"203,900 shares of the Consolidated Gas Company of New York. 1.8%.
"63,002 shares of the common stock of American Waterworks. 3.6%.
"33,175 shares of the Consolidated Gas Company of Baltimore. 2.8%."
Operate in Twelve States,
Morgan &
Mr. Pecora introduced in evidence a table from the office of
whiah United
Co., showing that the population served by these companies in
Corporation has an interest was 55,272,000, distributed through the following States: New York, New Jersey, Connecticut, Pennsylvania, Delaware,
Ohio, Michigan, Illinois, Tennessee, Mississippi, Alabama and Georgia.
Mr. Pecora—How much cash did the United Corporation receive from anybody in exchange for its capital stock in January 1929?
Mr. Whitney—Up to Jan. 11, $20,700,801.10.
Q.—And from whom did it receive that sum of money? A.—Well, I have
testified already as to $700,801.10. As to the other, $10,000,000 from
J. P. Morgan & Co., and $10,000,000 from Bonbrigth Electric Corporation.
Q.—You have already told us what securities issued by the United Corporation were received by J. P. Morgan & Co. for that consideration? A.—
No. Only as to the securities. As to the $10,000,000 in cash. J. P. Morgan
& CO. received 400,000 shares of the common stock and 1,000,000 option
warrants of the United Corporation, and as to the $10,000,000 which Bonbright Electric paid in at that time they received 400,000 shares of common
stock and 1,000,000 option warrants of the United Corporation.
Explains Option System.
"Do you know the reason for the authorization and issuance of these option
warrants which entitle the holders thereof at any time in the future to purchase from the company its common stock at $27.50 per share?" Mr. Pecora
"Well," replied Mr. Howard, "it has been customary in connection with
the creation of the financial structure of companies similar to this to issue
various option warrants as a class of security."
Q.—Do you mean to say it has been customary to issue option warrants
unlimited as to time? A.—Yes.
Q.—How many other corporations did that prior to 1929? A.—I don't
.what consideration were the option warrants issued?" asked Senator
"The option warrants—the shares and the cash—were issued in each case
here for the $10,000,000 in connection with the other transaction for the
shares. The options were carried in at $1 an option."
Q.—As part payment for the price of properties acquired? A.—In some
cases in part payment for shares of other securities acquired and in these
other cases for the value.
Senator Adams—On your balance sheet, under liabilities, you are oarrying 14,000,000 shares of common stock at a stated value of $5 a share?
Q.—Some $72,000.000 is the liability? A.—Yes.
Senator Adams—You carry these 3,700,000 option warrants at a listed
figure of $27.50, and your option warrant really represents a share of common stock, doesn't it? A.—No, they are carried at nothing. Option warrants outstanding entitling holder to purchase at any time without limit
three million seven hundred thirty-two—
Senator Adams (interposing)—You carry a liability item of 376,000,000
against that?
Mr. Howard—No, that is the capital surplus, 360,630,000.
Mr. Pecora—Let us assume the United Corporation's common shares at
some time subsequent to January 1929, reached a market value of $50 a
share. Any one holding any of these option warrants would immediately
demand the issuance to him by the company of shares of that comanon stock
having a market value of $50 a share for $27.50 a share. A.—That is right.
Mr. Pecora—To whom were any of these option warrants issued by the
United Corporation? A.—On the first ti insaction Morgan & Co. got 714,200.
On another transaction Morgan & Co. go-. a million of these and Bonbright
Electric Corporation a million.
United Gammon's Rise Detailed.
"What did Morgan & Co. pay for those option warrants when it got the
block of a million?" asked Mr. Pecora.
"Morgan & Co. did not pay for them separately at that time," Mr Howard
said. "Morgan & Co. paid to the corporation $10,000,000 in cash and received 400,000 shares of common stock and a million option warrants, and
Bonbright Electric had a similar transaction."
Q.—How long after the 9th of January 1929, did the common stock of
United Corporation reach a market value in excess of $27.50 per share?
A.—On the Philadelphia Stock Exchange, on Feb. 2 1929, the common stock
was quoted at 58%, 56% and 56%. On May 9 1929, after the stock had
been listed on the New York Stock Exchange, the corresponding prices
were 67%, 66% and 66%.
At this juncture Mr. Pecora said: "That is enough for my purposes now.
May I withdraw this witness temporarily and ask George Whitney to resume the stand?"
"Just wait a moment 1" exclaimed Mr. Glass. "I am tired of sitting
around the table here in absolute ignorance of where we are going or where
we are being taken or what is expected to be adduced from the examination of witnesses.
"I think members of the Committee are entitled to know some of these
things so that they may receive the testimony with some degree of appreciation of its significance, if it has any, and that they themselves may interrogate witnesses with some degree of intelligence.
Glass Asks Aim of Inquiry.
"I do not know what all this has meant this morning," Senator Glass continued. "I want to ask the witness now if any of the transactions enumerated have been contrary to the law of any of the States in which this company operates, or contrary to any Federal statute."
"No, sir," said Mr. Howard.
Senator Glass—I would just like to know what it is all about.
Senator Couzens—I wonder if we could get an answer to Senator Glass's
question as to "what this is all about I"

Volume 136

Chairman Fletcher—I do not see how we can anticipate what Mr. Pecora
expects to develop.
Senator Glass—But we could have anticipated if the Committee had been
told by counsel what he wanted to prove.
Mr. Pecora—I shall be very glad to comply with the Senator's suggestion
and answer as to what it is all about, or at least what, in my humble opinion, it is all about.
Mr. Pecora read Senate Resolution 56, which directed the Banking and
Currency Committee to conduct the investigation.
"That," said Chairman Fletcher, "is the authority under which we are
acting and that is the authority under which we are proceeding"—
Glass "Expresses Himself."
"Hold on!" interposed Mr. Glass. "The Senator from Virginia is going
to express himself, and there is no authority in this Committee to prevent
him from expressing himself.
"I say that, in compliance with this resolution, Mr. Pecora and his
numerous investigators went to New York and made this preliminary investigation, having had access to all of the books of this and perhaps other
concerns—we do not know how many other concerns; he obtained, apparently, complete information as to those things—and I have said, and I
insist now, that it was his duty to have come here to Washington and have
appeared before the Sub-committee and to have told us what he found, what
significance he attached to what he found, and what he proposed to establish by the investigation before this Committee, and not to have brought
the members of the Committee here before a crowded assembly room without knowing one solitary thing about the meaning of all this.
"And I say that is so, and other members of the Committee agree with
Mr. Pecora—May I remind Senator Glass that after the enactment—
Senator Glass—So far as that is concerned, I have examined the minutes
of the various meetings of the Sub-committee and I do not find that at any
meeting of the Sub-committee the employment of Mr. Pecora was authorized.
Chairman Fletcher—The minutes have not been written up, then. That
is all I can say about that. I know he was employed, and the Sub-committee
did it unanimously.
Senator Costigan—I agree with what the Chairman says. There can be
no question about the employment of Mr. Pecora.
Senator Glass—I have within the three last hours examined the minutes
in detail. It may have been that the employment was authorized, but there
Is no record of it. That is immaterial because I think the Committee is
satisfied with Mr. Pecora's employment: . . •
Pecora Explains Aims.
Senator Glass—"This particular line of examination, into the activities
and operations of the issuance of securities of the United Corporation, is
being conducted under that clause of the resolution which empowers and
directs the Committee to make a thorough and complete investigation, among
other things, of the business of banking, financing, and extending of credit,
and of the business of issuing, floating or selling securities.
"This United Corporation, it has already been shown, to the extent
I have been permitted to proceed up to the present moment, is a
corporation that has issued hundreds of millions of dollars of securities
to the investing public.
"And certainly its size and the area of its operations were deemed
to be
of sufficient importance to merit the attention of this Committee
under this
"It has already further been shown by the evidence presented
at this
hearing that 1,000,000 option warrants were issued to J. P.
Morgan & Co.
for an allocated value or consideration of $1 each,
and a similar amount for
similar valuation to the banking house of Bonbright
& Co.; that those
option warrants are unlimited as to time, and entitle the
holders thereof to
purchase for each warrant a share of the common
stock of the United Corporation at $27.50.
Rise in Stock Is Cited.
"It has already been shown at this hearing that,
within a few days after
the issuance of those option warrants for that
consideration of $1, the
common stock of this company was traded in
on the public Exchange in
Philadelphia at prices doubling or more the sum of
"Now, there was proof—and the proof on that
has not yet been completed, gentlemen of the Committee—that
the securities of the United Corporation were issued under circumstances and
upon terms that enabled a
very small number or group of individuals
to acquire, at terms certainly
against the interests of the corporation, those
of its securities that are
called option warrants.
"Now, r want to pursue the inquiry
further, and I think the developments
will throw considerable light on a
certain phase of the business of issuing
and floating and selling securities."
Senator Glass—Now, let me ask Mr.
Pecora if he did not ascertain all
these things by reason of his
investigation in New York, and if he could
not have made to the Sub-committee,
prior to the meeting of the general
Committee, just the statement that he has
made here, that he expected to
develop those facts?
Mr. Pecora—Senator Glass, if I had to come
members of the Sub-committee every time I had Washington to consult the
I would have been busy taking every train between development to report
New York and Washington.
Preliminary Parley Recalled.
"I did not ask you about 'every time' you discoverey
anything or had any
development," Senator Glass said. "What I wanted
you to do was to come
here at some time after you completed your investigation
and give to us
some idea of what you proposed to develop here, in order that
we might not
waste our valuable time sitting around a table here
listening to questions
propounded and answers given which were of no
significance to a man of
ordinary intelligence, if I have ordinary intelligence."
Mr. Pecora then replied:
"Senator Glass will probably recall that in the latter
part of March, or
shortly after the adoption of Resolution 50 I appeared before
a meeting of
the Senate Banking and Currency Committee and outlined to the
the general scope, the lines of inquiry, that I was about
to undertake as
counsel for the Committee.
"I specifically read at that meeting the draft of the
quesitonnaire, so
called, that has been alluded to in the evidence here in the past
few days,
which I had sent to J. P. Morgan & Co. and other private banking
firms doing business in the City of New York.
"Now, that questionnaire, to a definite extent, suggested quite
fully, I
think, the lines and scope of the inquiry that I was undertaking to
as counsel for the Committee. Since that time I have received not a
request from any Senator on the Committee for any (further or more
advices or information concerning what I was doing.


Financial Chronicle

Pecora Statement Applauded.
"In view of that, I have been, with the exception of one visit to Washington that I made about three weeks ago, spending my time in the City of
New York, from early morn until late at night, engaged on this preliminary
investigative work.
"And I want to add that I did not seek this assignment as counsel to
the Committee. I appreciated and I still appreciate the honor, the dignity
and opportunity for service in having been asked to serve as Committee
"I have been happy to render whatever service, modestly, I could as
counsel to the Committee; and I want to assure Senator Glass that the compensation of $255 a month which I am receiving for these services certainly
is no incentive to me to render these services or to continue to render
Glass Opposed Arrangement.
"I want to say to the counsel, to the dommittee," Senator Glass went on,
"that the mere sending out of interrogations to bankers did not constitute,
for the purpose of the Committee, evidence of data which should have been
submitted to the Sub-committee.
"As I have said, and as I insist, so far as the compensation of counsel
to the Committee is concerned—and I want to say this to the counsel and
to the Committee—I was utterly opposed to an arrangement of that sort.
I do not think that this counsel or any other counsel ought to be required
to come here to Washington, or to go to New York, or anywhere else, and
work for the United States Senate without adequate compensation.
"And I was in favor of giving whatever-counsel might be employed adequate compensation. And I do not imagine that counsel for the Committee
is working just for the $255 a month. Far from it!"
"As a member of the Committee," said Senator Costigan, "I wish to express my appreciation of the ability and the efficiency of counsel for the
Committee. In my judgment the investigation-thus far conducted has been
relevant and material." . . .
Glass Maintains Stand.
"I move that the Committee adjourn," said Senator Byrnes.
"I hope the Senator won't make that motion" Senator Glass declared.
"I do not intend to be put in an unreasonable attitude. And I am perfectly
indifferent to darner or applause. I want that understood.
"I still say it would have facilitated the operations of this hearing, and
enabled the members of this Committee to have come in session with some
comprehension of what has been discovered by Mr. Pecora, and what he
expected to develop, had he come to Washington and laid before the Subcommittee, briefly, the results of his examinations in New York. And member after member of the Committee have agreed that would have been the
better course.
"Now, I do not care anything about the 'House of Morgan.' The 'House
of Morgan' never loaned me a dollar in their lives and very likely never
would, in any way, shape or form"—
"Unless you were properly introduced," Senator Couzens broke in.
"I am not careful of the 'House of Morgan' except that I am careful for
the dignity and orderly procedure of this Committee." Mr. Glass continued. "As one member of this Committee I do not intend to see any injustice done to the 'House of Morgan' or any other house, whether it be of
large consequence or of little consequence or of no consequence. That is
the attitude I intend to maintain to the end of these hearings.
No Witnesses Excused.
"I am not afraid to do J. P. Morgan & Co. justice. Id they have done
anything they ought not to have done, I am not afraid to legislate accordingly. The only solitary sentence of statutory law that would have corrected the things we have here talked about was framed by me and passed
under my management on the floor of the Senate."
"These are things of the past." Senator Adams said. "I am not a member of the Sub-committee, but if the Sub-committee feels that counsel should
make some statement in advance, I am satisfied that in future they would
have no difficulty with counsel as to advice in advance as to the prospects."
"That does not alter my contention that it ought to have been done in
the past," Senator Glass declared.
The Sub-committee then adjourned until 10 o'clock next Wednesday morning [May 31].

Inquiry Into Affairs of J. P. Morgan & Co. by Senate
Committee Investigating Stock Market Operations
—Profits of Banking House in Security Issues—
$18,284,908 in Five Years 1927-31, Papers Turned
Over to Senators Show.
According to Associated Press accounts from Washington
May 27 (copyright), figures of profits through security
flotations and syndicate operations were disclosed on that
date in documents obtained from the files of the banking
house by Senate investigators. The Associated Press further
said (we quote from the New York "Times"):
They showed that the Morgan firm reported to the investigators gross
profits of $18,284,908 from the sale of securities alone during the five-year
period from 1927 to 1931, inclusive, in addition to untabulated millions on
other operations.
Bare details of stock pool or syndicate operations in which the Morgan
house participated hinted at millions of additional profits, but the total
could only be guessed because of the form in which it was reported.
Committee investigators have gone back of the figures presented by the
Morgan firm and found additional profits which will be totaled and submitted later to the inquiry Committee. The Morgan reports showed them
only as shares still held.
A joint account in Proctor & Gamble Company common stock from July
1929, to June 1930, in which the Morgan profits were $1,853,959, revealed
the size of some of the operators. A total of 180,900 shares were bought
and sold for the account.
The period covered by the figures included two and a half "boom" years
and the same number of "depression" years.
Testimony before the Committee has shown that the twenty partners in
the firm paid total income taxes of $11,000,000 in 1929; $48,000 in
and none in 1931. But the profits revealed to-day were not divided Into
Pool Profited in Crash.
One of the most interesting documents was a summary of the operations
of the so-called bankers' pool which went into the market in 1929 shortly


Financial Chronicle

after the collapse. It showed that the pool, listed under the name "special
suspense account," made a total profit of $1,067,355 of which Morgan's
share was $170,776.
The Morgan files gave much additional information also about the socalled selected lists of clients to whom the firm sold stock at bargain prices.
Two such lists already have been made public by the investigators, including the names of many famous persons of high position in public life and
out. Stock In the Alleghany Corporation and Standard Brands, Incorporated,
was sold to them at prices below the market quotations for those stocks.
In June 1927, Morgan & Co. acquired 400,000 shares of Johns-Manville
Corporation common at 47%. It disposed of 343,750 shares to a selected
list at the purchase price of 47%, and 56,250 to another selected list at
Many noted persons are understood to have been on the second selected
list and to have responded readily to the price, Which realized a profit of
$562,000 for Morgan & Co.
Another special list of favored customers obtained 315,070 units of United
Corporation the Morgan holding company, at 75. Each unit included a
share of preference stock and a share of common.
List for Niagara Hudson.
The third list obtained common stock in Niagara Hudson Power Corporation. This company sold 2,000,000 shares of the stock on Aug. 19 1929,
each carrying one Class A and one five-year Class C warrant, at $25 a unit.
Morgan and Bonbright & Co. purchased 200,000 units, of which the house
of Morgan sold 56,500 to a selected list, leaving a balance of 143,500 to be
divided between the two companies.
The record showed the bankers' pool was one of the biggest syndicate
Operations participated in by the Morgan house during the five-year period.
Other participants were listed as the First Securities Company, Chase Securities Corporation. Guarantee Company of New York, National City Company,
Bankers Company and Daniel, Murry, S. R. Simon Guggenheim.
Each participant had a 4-25ths interest, except the Guggenheims, who
had 1-25th, the record disclosed, and the pool engaged in operations in
some of the better-known stocks with varying results. Altogether, 1,146,609
shares in thirty-seven different stocks were traded.
The syndicate bought 60,000 shares of Columbia Gas and Electric Company stock for $4,016,425 and sold them for $4,622,060, realizing a profit
of $605,635.
It bought 66,600 shares of General Electric for $15,902,050 and sold
them for $16,521,000, for a return of $618,960.
A profit of $326,484 was made in United States Steel by purchasing
148,400 shares at an average price of $182.45 or a total of $27,075,700, and
selling them for an average of $184.65, or 07,402,184.
A loss of $608,394 was sustained in Anaconda Copper, in which the syndicate bought 76,200 shares for $6,514,215 and sold them for $5,905,821.
Losses of $404,339 and $206,785, respectively, were listed for dealings in
Sears, Roebuck and Johns-Manville Corporation stock. The stock of the
latter company was bought for 170 and sold for 138. . . .
It was impossible for Committee agents to calculate total Morgan profits
from the documents furnished them by the firm because in many cases they
were listed entirely or partially as blocks of stock.
For instance, in one underwriting issue the firm report said: "Profits
received by J. P. Morgan At Co., 1,375 shares."
Further research will be required to determine what that represents in

Inquiry Into Affairs of J. P. Morgan & Co. by Senate
Committee Investigating Stock Market Operations
—Mr. Morgan's Explanation of Payment of British
Income Tax—Capital Gains and Losses Ignored
in England.
While reference was made in these columns May 27 (pages
3654-3656) to the testimony by J.P. Morgan before the Senate
Banking and Currency Committee in which he made an explanation as to the payment by him of a British income tax,
we give herewith the following explanation made by Mr.
Morgan (according to the New York "Times") to the Senate
Committee on May 25 of the fact that he paid an English income tax in 1930, 1931 and 1932, although he did not pay income tax in the United States:
"There was a question raised about my having paid income tax to the
British Government, yesterday. I was asked yesterday whether I had paid
any income taxes to any foreign Government, and replied that I had paid
Income tax to the British Government. My memory was not entirely clear
about it, so that I thought I would like to explain it a little.
"My income tax to the British Government is paid upon the basis of the
English income tax law, and it is fixed by the Inland Revenue authorities,
as they call them there. I paid an assessment during 1932 of £7,000, and
approximately similar amounts for 1931 and 1930.
"The English income tax includes a tax on the rental value of property
owned which the owner uses and which would have increased his income
had he rented it, and does not include any capital gains and losses."
When questioned by Mr. Pecora, counsel for the Committee, Mr. Morgan
said that if the English system of income tax were adopted in this country
he would have had to pay income taxes for the years 1930, 1931 and 1932,
and would have had to pay a "lot less" in 1928 and 1929.

London ad vices May 25 to the same paper said:
The simplest explanation as to how J. P. Morgan paid income tax in
Britain in 1931 and 1932, though he was not required to pay in the United
States, is that authorities here base their annual assessments on certain
classes of Income at the source and ignore altogether the point whether the
recipient loses part or all of it afterward.
If, say, a man receiving a salary of £1,000 saves £200 which he invests
wisely, the income tax authorities take a tax on his salary and then, when
the investment matures, they take a tax on that too.
But it is no concern of theirs whether another £200 of savings have
been lost in the meantime.
They regard the ownership of a house as a form of income. Thus, speaking hypothetically, if Mr. Morgan owned property in Britain (which he
did largely), he would be forced to declare, under heavy penalties, the exact
amount of money he brought over from the United States to Britain. This
would be taxed. If he leased estates, the income therefrom would be
taxed, too.
Moreover, if he received a salary as a partner or a director in the English
company it would be taxed, as would his income from British investments.

June 3 1933

Inquiry Into Affairs of J. P. Morgan & Co. by Senate
Committee Investigating Stock Market Transactions—Letters from John J. Raskob and Charles
Francis Adams Accepting Offer of Stock of Allegheny Corp. Below Market Price.
During the examination on May 25 of George Whitney by
the, Senate Committee inquiring into the affairs of J. P.
Morgan & Co., Ferdinand Pecora, counsel for the Committee,
introduced letters from John J. Rascob,then Chairman of the
Democratic National Committee,and Charles Francis Adams,
subsequently Secretary of the Nary, relative to the offering
of Alleghany Corporation stock to them in 1929 by the Morgan firm. These letters were publighed as follows in the
New York "Times":
The letter from Mr. Raskob to Mr. Whitney read:
Whitehall, Palm Beach,
Dear George:
Many thanks for your trouble and for so kindly remembering me. My
check for $40,000 is enclosed herewith in payment for the Alleghany stock,
which kindly have issued when ready, in the name of John J. Raskob, Wilmington, Del. I appreciate deeply the many courtesies shown me by you
and your partners, and sincerely hope the future holds opportunities for
me to reciprocate. The weather Is fine and I am thoroughly enjoying golf
and sunshine.
Best regards and good luck.
The letter was received by J. P. Morgan & Co. on Feb. 8, 8:10 A. M.,
1929 according to a notation.
Tlie letter from Mr. Adams read:
15 State Street, Room 102,
Boston, Feb. 13 1929.
H. S. Morgan, Esq.,
23 Wall Street, New York, N. Y.
My dear Henry:
As you probably know, I have duly signed on. I see no reason why this
should interfere with this bit of investment. I accordingly send a check
with many thanks to you. Please have the certificate put in my name.
Always affectionately yours,

Inquiry Into Affairs of J. P. Morgan 8c Co. by Senate
Committee Investigating Stock Market Transactions—Defaulted Bond Issues Floated Prior to
1927 by J. P. Morgan & Co. and Drexel & Co.
Incident to the inquiry into the operations of J. P. Morgan
& Co. by the Senate Banking and Currency Committee investigating stock market trading, it was stated in Washington advices May 28 to the New York "Times" that the following list shows bond issues made prior to 1927 by J. P.
Morgan & Co., and Drexel & Co., which are in default as to
interest or principal:
J. P. Morgan & Co.
Chicago City & Connecting Railways, collateral trust sinking fund gold
5s. issued Jan. 1 1910; due Jan. 3 1927; defaulted Jan. 3 1927.
Florida East Coast Railway, first and refunding mortgage 5% gold bonds,
issued Sept. 1 1924, Series A, due Sept. 1 1974; defaulted Sept. 1 1931.
Interborough Rapid Transit Company, 10-year secured convertible 7%
gold notes, issued Sept. 1 1922; due Sept. 1 1932; defaulted Sept. 1 1932.
Imperial Russian Government credit of 1916, issued June 1918.
Republic of Mexico, 4s, 5s and 6s, of 1899, issued prior to July 1913.
Drexel de Co.
De Bardeleben Coal Corporation, first mortgage 6% bonds, 1953, issued
May 22 1928; defaulted Dec. 1 1931.
Franklin County Coal Company, first mortgage 6% bonds, issued Jan. 8
1924; defaulted Jan. 1 1931.
Terre Haute, Indianapolis & Eastern Traction Company, first and refunding mortgage 5% bonds, 1946, issued May 23 1910; defaulted Oct. 1 1930.
Indianapolis, Crawfordsville & Danville Electric Railway Company, first
mortgage 5% bonds, 1952, issued June 1 1912; defaulted Nov. 1 1930.
The Baldwin Locomotive Works, 3-year 5%% notes, 1933, issued March
11 1930; defaulted March 1 1933.
Lehigh Valley Coal Company, first mortgage 4% bonds, 1933, issued in
1904; defaulted Jan. 1 1933.
Red Jacket Consolidated Coal and Coke Company, consolidated mortgage
5% bonds, 1944, issued in 1904; defaulted Jan. 11 1932.
Other Defaulted Issues.
The following are the names of all issues in which either firm has had
any participation and which are now or have been at any time between
1927 and 1931, inclusive, in default:
Republic of Peru secured 7% sinking fund gold bonds, due Sept. 1 1959;
defaulted Sept. 1 1931.
Republic of Peru Peruvian National loan 6% external sinking fund gold
bonds, first series, due Dec. 1 1960; defaulted June 1 1931.
Republic of Peru Peruvian National loan 6% external sinking fund gold
bonds, second series, due Oct. 1 1961; defaulted April 1 1931.
Chicago Rapid Transit Company first and refunding mortgage 6%go
bonds, Series A, due 1953; defaulted July 1 1932,
Chicago Rapid Transit Company first and refunding mortgage 6% bonds,
Series B, due 1944; defaulted July 1 1932.
h% external sinking fund bonds, due Oct. 15
United States of Brazil 61
1957; defaulted April 15 1932.
International Match Corporation 5% twenty-year sinking fund debentures,
due Nov. 1 1947 ; defaulted May 1 1932.
International Match Corporation 5% ten-year convertible debentures, due
Jan. 15 1941; defaulted July 15 1932.
Williamsport Wire Rope Company first mortgage sinking fund 6% bonds,
due Nov. 1 1947; defaulted Nov. 1 1932.
City of Vienna external loan sinking fund 6% bonds, due Nov. 1 1952;
defaulted Nov. 1 1932.
Republic of Chile external loan sinking fund e% bonds, due Sept. 1 1961;
defaulted Sept. 1 1931.
Republic of Chile external loan sinking fund 6% bonds, due March 1 1962;
defaulted Sept. 1 1931.

Volume 136

Republic of Chile external loan sinking fund 6% bonds, due May 1 1963;
defaulted Nov. 1 1931.
Republic of Chile Railway refunding 6% sinking fund external bonds,
due Jan. 1 1901; defaulted Jan. 1 1932.

Items bearing on the inquiry into the affairs of J. P. Morgan & Co. appeared in these columns May 27, pages 36513661.
Inquiry Into Affairs of J. P. Morgan & Co. by Senate
Committee Investigating Stock Market Trading—
Samuel Reyburn Tells of Incidents Bearing on
Participation in Preferred Stock List—Asserts New
York Bankers Saved Little Rock Institution from
Red Attack.
Samuel W. Reyburn, President of the Associated Dry
Goods Corporation, New York City, whose name appeared
on J. P. Morgan & Co.'s preferred list of buyers of the stock
of the Alleghany Corporation, told the Advertising Club of
New York at its luncheon meeting on May 26 how he had
"won a place on the list of underwriters."
The foregoing is from the New York "Herald Tribune" of
May 27, from which we also quote:

Mr. Reyburn said that more than thirty years ago, when he was President of a trust company in Little Rock, Ark., he had opened a New York
account with the Morgan firm. He told how, after he had built up deposits in his company to about $400,000 on an original capital of $10,000,
a "radical group" had sought to undermine confidence in his bank and of
how the day had been saved by J. P. Morgan & Co. and others.
Chosen for Special Work.
Mr. Reyburn said he was asked by the Morgan firm to come to New York
for some special work in 1914, the recommendations having come from two
bankers, William Porter, a Vice-President of the Chemical National Bank
and later a Morgan partner, and Thomas Cochran of the Astor Trust Company, who also became a Morgan partner.
Mr. Reyburn said he undertook the special work assigned in July 1914,
but in the fall of that year economic conditions were such that it brought
the business close to receivership. Again he was indebted to the Morgan
firm, which provided half of a $1,000,000 loan, two other banks putting up
the remainder, half at the suggestion of the Morgan company.
"As confidence returned in January 1915, I received my first invitation
to join in the underwriting of some venture that the Morgan firm had agreed
to help finance," Mr. Reyburn said, adding that the matter had been presented to him by the late Dwight W. Morrow. "That investment I think
I held over a year and then disposed of it at a nice profit." Other investments followed, he added, and "naturally, I was proud of the fact that my
dealings with the firm had won me a place on their list of underwriters and
I am glad to say that, despite losses on some of the obligations, on the whole
it had been a valued and profitable association."
IVile Joined in Purchase.
He said that when the participation in the Allegheny Corporation was
offered to him, he "was rather short of ready funds and only took a small
amount." When his wife heard about it, he said she "begged for an interest" and he finally agreed to sell to her, for the price he paid, the 600
shares of the stock he had taken, "explaining that if a loss occurred she
would have to stand it." Some time after that, he said, she sold her holdings at a profit of $4,887.50.
Mr. Reyburn said he also wanted to explain the $90,000 loan he received
from J. P. Morgan & Co. soon after the market break in the fall of 1929. He
said he borrowed this money to help out several friends who were "in trouble."
Their collateral had depreciated, their loans were due, and their collateral
was about to be sold at figures less than the face value of their loans, he
said. When they appealed to him for help, he said, he went to the Morgan
firm, where he had his "largest personal account," and arranged the loan,
which was repaid within six weeks.
"I believe in the soundness of a private banking business," he concluded.
"My confidence in the firm of J. P. Morgan & Co. is of the highest and in
these times when public opinion is so misguided and hostile to private
bankers, I do not mind in the least giving my favorable opinion."

Inquiry Into Affairs of J. P. Morgan & Co. by Senate
Committee Investigating Stock Market Operations
—Gov.Pinchot of Pennsylvania Calls for Resignations of Two State Supreme Court Justices on
Preferred Stock List.
Governor Gifford Pinchot of Pennsylvania, demanded on
May 27 the resignation of two State Supreme Court Justices
who bought stocks from J. P. Morgan interests at prices
below the market. Associated Press accounts from Harrisburg, Pa., on May 27, authority for the foregoing added:
Urging Justices John NV. Kephart and William I. Schaffer to step down
from the bench, he asserted. "If I had the power I would remove them at
The justices who were elected for twenty-one-year terms, replied that they
have no intention of resigning. They denied the Governor's charge that
they had accepted "favors from utility bankers" and "utterly disqualified
themselves for further service in the State's highest court."
Justice Schaffer, who said he bought Allegheny Corporation stock for
Investment and "sold it at a heavy loss," asserted his right to buy securities
as any other citizen would buy them.
Justice Kephart declared he holds the stock for which he paid $6,000 and
now values it at $600. He added:
"Unless a judge must resign because he eats in a restaurant owned by some
banker there is no more reason for my resignation over the Allegheny matter
than there would be for eating in a banker-owned restaurant."
The Governor's request for the resignations came closely in the wake of a
similar request from Warren Van Dyke, Pennsylvania Roosevelt leader and
Chairman of the Democratic State Committee. Mr. Van Dyke went further,
insisting the disclosures by the United States Senate Banking Committee
were sufficient to warrant impeachment proceedings.

Offerings of stock by J. P. Morgan & Co. below market
price were referred to in these columns May 27, pages 3654
and 3657.


Financial Chronicle

Annual Convention of Illinois Bankers Association to
Be Held in Chicago June 5 and 6.
The 43rd annual convention of the Illinois Bankers Association is to be held in Chicago June 5 and 6. The annual
dinner of the Association will take place in the evening of
June 5, and on June 6 two business sessions will be held.
Francis H. Sisson, President of the American Bankers Association and Vice-President of the Guaranty Trust Co. of
New York, will deliver an address at the dinner on "Looking
Forward." At the morning session on June 6 addresses
will be made by William F. Ploch, President, National City
Bank, Long Beach, N. Y.; R. H. Brunkhorst, Comptroller,
Harris Trust & Savings Bank, Chicago, and William H.
Dietrich, United States Senator from Illinois. At the afternoon session Louis J. Krensky of A. M. Krensky & Bros.,
Chicago; H. A. Lyon, Advertising Manager, Bankers' Trust
Co., New York; N. G. Kraschel, Lieutenant-Governor of
Iowa, and Victor A. Olander, Secretary, Illinois State Federation of Labor, will deliver addresses. Following the annual election of officers, the convention will adjourn on
June 6.
Suspension of Holidays and Opening of Banks for
Since the publication in our issue of May 27 (page 3662)
with regard to the banking situation in the various States,
the following further action is recorded:

Referring:further to the new National bank being formed
in Washington, D. C., through the union of a number of
restricted banks in Washington and which is to be known
as the Hamilton National Bank of Washington, announcement was made on May 29 that there had been 8675,000
worth of stock subscribed to date to open the new institution.
The announcement followed meetings of the general subscription committee and the subscription committee of the
Federal-American,National Bank & Trust Co., one of the
restricted banks committed to the plan for the new bank
The Washington "Post" of May 30,is authority for the foregoing, from which we also take the following:
This was the first announcement of a general total. It was made at the
beginning of the second week's campaign to secure $1,250,000 worth of
stock to create the new bank and make available 50% of the deposits of
the seven participating banks, more than $10,000,000. Members of the
general subscription committee hope to have the remaining $575,000 worth
of stock subscribed by the close of the week.
With more than half of the necessary amount of stock subscribed, however, organizers of the new bank emphasized the importance of every
stockholder and depositor in the institutions concerned subscribing to the
fullest extent possible. An oversubscription, they said, would add greatly
to the prestige of the new institution. . . .
Seven restricted banks are now in the plan to create the "Hamilton National Bank of Washington." They are Federal-American National Bank
& Trust Co., District National Bank, Potomac Savings Bank, Washington
Savings Bank, Northeast Savings Bank, Woodridge-Langdon Savings &
Commercial Bank and United States Savings Bank.
Entry of the last institution into the merger plan is protested by Col.
Wade H. Cooper, its President and majority stockholder, who has submitted a plan to the Treasury Department for reopening the bank independently.
(Jul. Cooper said his plan was designed to make available for depositors
75 cents on the dollar instead of 50 cents. He declared last night(May 29)
that he was confident that it would be approved in preference to the merger
Into the Hamilton.

TheBoard of Directors of the Reconstruction Finance
Corporation on May 25 authorized the purchase of $25,000
of preferred stock in a new bank which it is proposed to
organize at Conway, Ark., a community now without banking facilities.
The preferred stock authorization is contingent on the
subscription of an equal amount of common stock by those
interested in the organization of the new bank.

On May 29 the directors:of the Reconstruction Corporation authorized the purchase of $50,000 worth of preferred
stock in the Gainesville National Bank at Gainesville, Ga.,
a reorganized institution. The authorization for the purchase of the preferred stock is contingent upon the subscription of an equal amount of common capital stock by
those interested in the reorganization of the institution.

A reorganization program looking towards an early reopening of theMustin State Bank at 5645 West Lake St.,
Chicago, is being pushed by officials of the institution,
according to the Chicago "Tribune" of May 26, from which
we quote further as follows:
Perley 13. Castle, President of the Austin State,said yesterday (May 25)
$200,000 of new money is being raised through the sale of stock to shareholders and business interests in the community. Depositors are being
asked to waive claims on 60% of their deposits. The bank, which is forty


Financial Chronicle

years old, had deposits of $1,700,000 when the moratorium began March 3.
The reorganization plan has been approved by State Auditor Barrett,
Castle said.

That a new bank is being organized, and will open shortly,
as a successor to the Halsted Street State Bank of Chicago,
Ill., is indicated in the following taken from the Chicago
"Tribune" of May 26:
A new bank, the South Town National, is being formed to take over
50% of the deposit liabilities of the Halsted Street State. Half of the
$200,000 of new stock has been placed, officials state. Assent of depositors
to the 50% waiver is being sought. Assets not acquired by the new bank
will be liquidated to satisfy 50% of deposits not assumed.

The National Security Bank of Chicago, Ill..—the new
institution which replaces the Security Bank—opened on
May 27 in the former quarters of the old bank. The new
bank is capitalized at $200,000 with surplus and reserves of
$50,000. The Chicago "Journal of Commerce" of May 27,
in noting the opening, furthermore said:
The Security Bank has been in process of voluntary liquidation since
the moratorium was lifted March 13. It was organized in 1906 and was
the oldest bank on the Northwest Side. The same officers who were
chiefly responsible for the policies and management of the old institution
will head the new national bank.
In commenting on the establishment of the new bank, Norman B. Collins,
President, stated the new institution will fill the pressing need for banking
facilities on the Northwest Side.

We learn from the Chicago "Journal of Commerce" of
May 26 that the Iroquois Farmers' State Bank of Iroquois,
Ill., and the Bowen State Bank at Bowen, Ill., resumed
businega on that day without restrictions.
The following day, May 27, six more Illinois State banks
were reopened on an unrestricted basis, according to the
Chicago "News," namely, the Wheeling State Bank, Wheeling; Golden State Bank at Golden; Martinsville State Bank,
Martinsville; Arrowsmith State Bank at Arrowsmith;
Brighton State Bank at Brighton, and Pleasant Plains
State Bank at Pleasant Plains.
According to the Chicago "Journal of Commerce" of
May 27, the following Illinois State banks reopened on that
date under authority of the State Auditor: The wheeling
State Bank at Wheeling; the Golden State Bank at Golden;
Brighton State Bank, Brighton; the Martinsville State Bank
at Martinsville; the Arrowsmith State Bank at Arrowsmith,
and the Pleasant Plains State Bank of Pleasant Plains.
The West Thirty-First Street State Bank of Chicago, Ill.,
reopened for business on May 29 after having been closed
since the moratorium, according to the Chicago "News" of
that date, which stated that deposits greatly exceeded
withdrawals on the opening day. The bank it was stated,
has $55,000 new capital and old deposits of $135,000. Deposits at the time of closing, it was said,were $248,000,but
$113,000 has been waived by the depositors. Officers of
the institution are as follows: Ignatius Chap, President;
Edward J. Visk and Frank Chap, Vice-Presidents; Arthur
I. Chap, Cashier, and G. V. Chap and Michael A. Dolinyak,
Assistant Cashiers.
Two Illinois State banks, the Farmers' State Bank of
Mount Sterling and the Farmers' State Bank of Lewistown,
reopened for business without restrictions on May 31. •

June 3 1933

an institution organized to succeed the Gretna Trust & Savings Bank of Gretna. The authorization to purchase the
stock is contingent upon an equal amount of common tock
being subscribed by those interested in the new organization.
The new Hibernia National Bank in New Orleans, New
Orleans, La., which opened fo business on May 22 with
combined capital and surplus of $3,000,000 and deposits
of $14,000,000, on the night of May 24, three days later,
showed a gain in deposits of well over a million dollars.
Chairman R. S. Hecht and President A. P. Imahorn expressed themselves as well satisfied 'with this concrete
evidence of the co-operation and confidence of the community."

The Reconstruction Finance Corporation on May 29
authorized the purchase of $50,000 of preferred stock in the
Calais National Bank of Calais, Me., a new bank. The
authorization to purchase the preferred stock is contingent
upon the subscription of a like amount of common stock by
those interested in the organization of the new institution.
Associated Press advices from Augusta, Me., on May 26
reported that Financial Institutions, Inc., a holding company
for a chain of Maine banks, and organized and controlled
by Walter S. Wyman and Guy P. Gannett, was placed in
receivership on May 25 by Chief Justice William R. Pattangall of the Maine Supreme Judiciary. The action was taken
on petition of Mrs. Wyman and Mr. Gannett. 0. Beane,
an Augusta attorney, was named receiver. The dispatch
continued in part:
Ten of the banks are now closed and in the hands of conservators or
receivers while two banks—the First National Granite, of Augusta, and
the National Bank of Gardiner—divorced themselves from the chain. In
the case of the Gardiner institution this was accomplished by purchase of
$50,000 stock owned by another of the chain's banks, while the details
of the Augusta transaction were not disclosed.
The closed banks are: Fidelity Trust Co. of Portland (said to be the
largest bank in Maine); State Trust and Augusta Trust of Augusta; Maine
Trust & Banking Co. and Gardiner Trust of Gardiner; Security Trust and
Rockland National of Rockland; Peoples-Ticonic National of Waterville:
Thomaston National and York County Trust Co. of York Village.
Wyman,who is President of the Central Maine Power Co.,and connected
with other corporations, and Gannett, publisher of daily newspapers in
Portland, Waterville and Augusta, issued a joint statement which said the
receivership appeared "the only proper course" to take to "properly conserve the interest of the creditors and stockholders."
The last annual report of the State Banking Department listed time and
demand deposits in the seven closed trust companies as totaling $49,536,170,
of which $38,991,839 were time and $10,544,331 demand. The Fidelity
Trust Co.,had the most,$18,241,980 of time and $7,872,401 of demand. ...
Capital stock was listed as 25,000 shares preferred, $100 par value, and
200,000 shares of common no par value.

A reorganization plan of the People's Ticonic Bank of
Waterville, Me., which has remained closed since the bank
moratorium, was approved on May 29 by the Comptroller
of the Currency, according to a dispatch from Washington
on that date by the Associated Press.

A plan for the reorganization of the Hopkins Place Savings
Bank of Baltimore, Md., has about been completed and the
management hopes to release it soon, according to the
Baltimore "Sun" of May 28. The statement of the bank
issued last Dec. 31 showed total deposits of $18,661,282 and
The organization of a new National bank in Plymouth, resources of $19,858,233. The savings bank has been
hid., to replace the First National Bank of that place, now operating on a 06% withdrawal basis since termination
in the hands of Samuel Schlosser, Sr., as conservator, is of the bank holiday, March 14.
being undertaken by Mr. Schlosser upon the recommendaWe learn from the same paper that G. Pitts Raleigh has
tion of the National Banking Department, according to a succeeded E. Stanley Gary as President of the institution.
dispatch from Plymouth on May 29 to the Chicago "Tri- Mr. Gary, who held the office of Chairman of the board as
bune." The dispatch continued:
well as President,continues as Chairman. Mr. Raleigh, who
The conservator will continue the operation of the First National Bank
heretofore was a Vice-President of the Maryland Trust Co.
until the new organization is completed. Then plans for taking over the
of Baltimore, was to assume his new duties on June 1, it
assets or liquidation will be perfected.
was stated.
Concerning the affairs of the Union Trust Co. of BaltiRelease of 11 State and savings banks in Iowa from the
more, Md., the reorganization plan of the institution was
restrictions of S. F. 111, imposed upon the banks during
the State Bank Commissioner
the National and State banking holiday was announced approved by the directors and
on May 23 by D. W. Bates, Deputy Superintendent of of Maryland, John J. Ghingher, on May 29 and
details of the proposal have now been mailed to the stockBanking for Iowa. The Des Moines "Register" of May 24
holders and depositors. The Baltimore "Sun" of May 30,
in reporting the matter, named the banks as follows:
from which the above information is obtained, continued:
Sanborn Savings Bank, Sanborn; Dallas County Savings
. on its acceptance will make immediately available
Bank, Minburn; Perry State Bank, Perry; Rowley Savings toThe plan . . in cash. 40% in certificates of deposit and 40% in cerdepositors 20%
Bank, Rowley; Farmers' State Bank, Bayard; Fairfax State tificates of beneficial interest. These distributions are contemplated in
Savings Bank, Fairfax; Le Mars Savings Bank, Le Mars; addition to the 5% of depositors' funds a parity made general deposits of
The certificates of deposit will be on
Tipton Savings Bank, Tipton; Silver City State Bank, the reorganized bank and will be deemed to represent time deposits. They
Silver City; Watkins Savings Bank, Watkins and Sioux will be liquidated with all possible speed in various installments or in a
lump sum 30 days after so directed by the directors with the approval
County Savings Bank, Maurice.
of Mr. Ghingher.

The directors of the Reconstruction Finance Corporation
on May 29 authorized the purchase of $100,000 worth of
preferred stock in the First National Bank of Gretna La.,

The certificates of beneficial interest will be issued by a newly formed
holding company and will represent slower assets for deferred liquidation
and distribution.
Stockholders will receive stock in the holding company carrying the
same liability, share for share, for their present trust company holdings.

Financial Chronicle

Volume 136

Plans for the reorganization of the Chestertown Bank of
Maryland at Chestertown have been approved by the Maryland State Bank Commissioner, John J. Ghingher, according
to Baltimore advices on May 29 to the "Wall Street Journal," which added:
They provide for an increase in capital to $50,000 from $27,000, and the
issuance of certificates of beneficial interest to depositors. Depositors
would be permitted to receive 35% of their deposits in these certificates.

The Westminster Deposit & Trust Co. of Westminster,
Md. which had been operating on a 10% withdrawal basis
since the legal holidays, was to reopen on a 100% basis on
May 31, according to an announcement the previous day
by John J. Ghingher, State Bank Commissioner for Maryland. In reporting the matter in its issue of May 30 the
Baltimore "Sun," continuing, said:
The complete reopening of the bank, which had approximately $1,000,000
iedeposits, has been made possible. Mr. Ghingher said, by the voluntary
subscription on the part of some depositors and stockholders of $180,000
in new capital. The bank previously had 1,000 shares of $100 Par capital
stock outstanding. This capitalization was reduced to $10,000 by cutting
the par value down to $10, and 9,000 new $10 par shares were issued at
$20 to restore the bank's capitalization to $100,000 and leave $90.000 to
be carried to surplus.
Charles E. Nicodemus is President of the bank. N. H. Baumgartner
is its Treasurer.

Announcement was made on May 27 that the new Seat
Pleasant Bank at Seat Pleasant, Md., formed from the
Southern Maryland Trust Co., now operating on a restricted
basis, is expected to open on June 5, according to the Washington "Post" of May 28, from which,we also take the following:
The articles of incorporation for the new institution were filed with the
State tax commission yesterday (May 27) after having been approved the
• day before by Judge Joseph C. Mattingly, of the Prince Georges County
circuit court.
The charter for the new bank, recently approved by the Maryland State
Bank Commissioner, grants the right for the new institution to open on a
$25,000 capital. It is expected to operate on a 100% basis.
A conservator will be appointed for the Seat Pleasant Bank, and as the
stock of the trust company is liquidated it will be placed to the credit of
the depositors of the new establishment. An application for membership
in the Federal Reserve System will be entered.

Governor Ely of Massachusetts on May 27 announced
that the Bay State National Bank and the Merchants'
Trust Co., both of Lawrence, Mass., closed since the National bank holiday, would re-open about July 1 under a
reorganization plan approved by the Comptroller of the
Treasury, the State Department of Banking, the Federal
Reserve authorities and the State Supreme Court. The
Boston "Herald" of May 28, authority for the foregoing,
went on to say:
The plan, affecting 20,000 depositors, calls for the operation of both
banks under the charter of the Bay State National in the quarters of the Merchants Bank. Fifty per cent of the deposits of each will be taken over by
the new bank, or a total of about $6,000,000. The balance of the assets and
liabilities will be held in trusteeship, and stockholders and depositors of both
banks will be asked to subscribe to $825,000 in new stock.
Depositors will receive certificates representing the 50% of the deposit
not assumed by the reorganized bank.

The Allegan State Savings Bank of Allegan, Mich., will
re-open on July 5 next, according to an announcement by
officials of the institution on May 29. The bank has been
closed since the proclamation of the Michigan banking
holiday. A dispatch by the Associated Press on May 29,
reporting the foregoing, went on to say:
Under a conservator's plan, approved by State and Federal authorities,
a 100% assessment was made against stockholders, and 50% of all deposits
will be impounded.
The other 50% of deposits, officials said, will be released gradually, a
part on the opening day. The impounded 50% will be released when conditions warrant.

The new Wabeek State Bank of Birmingham, Mich.,
organized and owned by U.S. Senator Couzens of Michigan,
and to which reference was made in our April 29 issue, page
2910, opened for business on May 22. The new institution
has a capital structure of $100,000, made up as follows:
$62,500 capital; $17,500 surplus and $20,000 undivided
profits. George B. Judson is President of the new bank;
Cecil R. Cummings, Vice-President and F. C. Schlorff,
Cashier. In noting the proposed opening of the new bank,
the "Michigan Investor" of May 20 had the following to
say regarding Mr. Judson and Mr. Schlorff:
The new President brings 24 years' experience to the new bank. In
1909 he opened the Highland Park State Bank with E. G. Leibold. Secretary to Henry Ford. He left in 1917 to become Cashier of the Bank of
Mr. Judson succeeded Senator Couzens as President of the Bank of
Detroit and continuecrin that office for seven years, when the bank was
consolidated with the Guardian National Bank of Commerce in 1930. He
also became an officer of the enlarged bank and resigned in March of this
year asISenior Vice-President.
Mr. Schlorff, Cashier of the Wabeek State Bank, was also formerly
associated with the Bank of Detroit and the Guardian National Bank of


The following Minnesota State banks were reopened on
May 25 by order of Elmer A. Benson, Commissioner of
Banks for Minnesota: Bank of Wilmar at Willmar; Farmers'
State Bank of Cyrus and the First State Bank of Leroy.
Reopening on an unrestricted basis of the following State
banks in Minnesota was noted in a Minneapolis dispatch
to the "Wall Street Journal" under date of May 29:
Audubon—Farmers State Bank; State Bank of Audubon.
Evan—State Bank of Evan.
Glenville—Citizens State Bank.
Mazeppa—Bank of Mazeppa.
Minneapolis—Marquette Trust Co.
Otisco—Otisco State Bank.
Pillager—Security State Bank.
Spring Grove—State Bank of Spring Grove.

Reopening of the People's Bank & Trust Co. of Tupelo,
Miss., and its two branches at Rienzi and Nettleton, Miss.,
releasing $92,000 to depositors, was reported on May 24 by
the Mississippi State Banking Department. J. S. Love,
State Superintendent of Banks, said the three reopenings
brought to 196 the number of State banks that had been
reopened since the March banking holiday. The Jackson
"News,"from which we have quoted above, went on to say:
The project marks reopening of a bank in liquidation, Mr.Love explained.
The reorganized institution will have capital of $55,000 and surplus of
$53,000. To-day's release of deposits equals 5% of the total, with 20%
deterred deposits aggregating $271,000 to be paid from time to time, Mr.
Love said. Additional assets of the old bank, he said, should account for
collections equivalent to a minimum 15% dividend above the 25% assured.
More than $700,000 in preferred and secured deposits already has been
paid in the old liquidation, the Superintendent said.
Officers of the new bank are: V. S. Whitesides, President; F. L. Spight,
Chairman of the Board; R. W. Carruth, Vice-President; E. M. PerrY,
Vice-President; W. H. Patton, Cashier.
The bank reopened under a decree from Chancellor James Finley under
whose jurisdiction a committee will handle deposits trusteed for depositors.
Three appeals from the Chancellor's decree have been filed by persons
opposing the reopening.

Advices from Natchez, Miss., to the Jackson "News"
under date of May 27 stated that definite assurance that a
new bank would be formed in Natchez to succeed the Britton
& Koontz National Bank, was given with the announcement
that the stock-selling campaign had gone over the top and
that A. B. Learned, President of the Britton & Koontz
National Bank; G. L. Wooley, Executive Vice-President and •
Conservator, and L. T. Kennedy, attorney, were in Washington for the purpose of filing an application for a new
National bank. The dispatch added:
The committee also will confer with officials of the Reconstruction
Finance Corporation with a view to soliciting aid in the liquidation of the
old Britton & Koontz Mational Bank.

The National Bank in North Kansas City, North Kansas
City, Mo., was granted a charter by the Comptroller of the
Currency on May 22. The new institution, which is
capitalized at $50,000, succeeds the National Bank &Trust
Co. of North Kansas City.

The following with reference to the affairs of the Citizens'
National Bank of New Brunswick, N. J., which closed on
Feb. 14 last, was contained in a dispatch by the Associated
Press from Newark, N. J., on May 25:
A committee of depositors in the Citizens' National Bank of New Brunswick presented a reorganization plan to Treasury Department officials yesterday(May 23), which they hope will result in reopening the institution.
After conference with Senator Barbour and Representative Sutphin, the
committee interviewed William Smith, one of the reorganization directors,
in the office of the Comptroller of the Currency. Details of the plan were
not made public. The committee included Louis L. Hendler, Raymond A.
Hale, Charles Englehardt, Robert F. Mitchell and William Woodruff, all
of New Brunswick.
The committee was made up of members of Joyce Kilmer Post, American
Legion. They said their post considered reorganization of the bank a
necessary public project in New Brunswick. Deposits in the closed institution, they said, amounted to approximately $900,000. The institution
already has borrowed funds from the Reconstruction Finance Corporation,

William Gugelman, conservator and also Cashier of the
North Arlington National Bank of Arlington, N. J., announced on June 1 that the conditions required by the
Comptroller of the Currency for full opening of the bank
had been met, and the institution is expecting authority
from Washington to resume business without restrictions.
The Newark "News" of June 1, reporting the above, went
on to say:
The bank was required to raise $50,000 additional capital stock and
dispose of $50,000 worth of North Arlington short term municipal notes
which it held.
Directors and other stoekholders took the entire stock issue. North
Arlington property owners, Gugelman said, acquired the greater part of
the municipal notes. Their sale was expedited by agreement of borough
officials to accept them in payment of taxes or assessments to the extent
of 50% of the amount due.
"Nothing that we can see," said Gugelman, "stands in the way of immediate reopening."

Financial Chronicle


Normal operation of the Jamaica National Bank, Jamaica,
L. I., under the terms of a license approved by the Secretary
of Treasury, began at 8 a. m., May 31, when the bank was
returned to its board of directors after being under the
supervision of a conservator since March 4. This bank is
the first in New York to be released from the supervision
of the conservator. The New York "Herald Tribune,"
from which this is learnt, continuing, said:
Stockholders of the institution, at a meeting on April 6, voted for a reorganization plan based upon the issuance and sale of 4,500 shares of preferred stock to increase capitalization. Holders are to receive 6% interest
on the stock, which was sold at a par value of $100. The issue was approved
by the Comptroller of the Currency and the Federal Reserve Bank.
The bank has its main office at 163-18 Jamaica Ave. and a branch office
at Sutphin Boulevard and Hillside Ave.

License to reopen on an unrestricted basis was granted the
Commercial Banking Co. of Green Springs, Seneca County,
Ohio, on May 26 by the Ohio State Banking Department,
according to a dispatch by the Associated Press from Columbus, Ohio, on that date, which added:
The bank has been in charge of B. A. Young, former Cashier of the
Institution, as conservator.

A meeting of the stockholders of the National City Bank
of Cleveland, Ohio, to act on increasing the capital and
serving as liquidator of the Union Trust Co. of Cleveland
and the Guardian Trust Co. of that city adjourned until
June 5 after approving the plan in principle, according to
Cleveland advices to the "Wall Street Journal" on May 31,
which furthermore said:
The plan will have to be approved by the Comptroller of the Currency,
the State banking department, conservators of the Union Trust and
Guardian Trust, and the Reconstruction Finance Corporation.
When approval is received complete report will be made and final action
of National City stockholders taken.

On May 24 the Ohio State Banking Advisory Committee
approved plans for the organization of the People's Savings
& Commercial Bank of Cleveland, according to Associated
Press advices from Columbus, Ohio, on that day, which
continuing said:
The new bank will replace the Lorain Street Savings & Trust Co., which
is now in the hands of a conservator. The People's Bank'would have capital
of $200,000, surplus of $40,000 and $10,000 in undivided profits.

The Huntsville State Bank at Huntsville, Ohio, has received a license from the Ohio State Banking Department
to reopen for normal business, according to Columbus, Ohio,
advices by the Associated Press on May 24. The institution
had been operating under a conservator.

The directors of the Reconstruction Finance Corporation
on June 1 authorized the purchase of $25,000 of preferred
stock of the First National Bank in Frederick, Okla., now
being organized to succeed the First National Bank of
Frederick. The authorization to purchase the preferred stock
is contingent upon the subscription of the common stock
by those interested in the new bank.

Further referring to the new Pitt National Bank of Pittsburgh, Pa., organized to take over the assets of the defunct
Diamond National Bank and Monongahela National Bank
of that city, a Pittsburgh dispatch on May 31 to the New
York "Journal of Commerce" contained the following:
An agreement under which the Pitt National Bank will take over the
assets of the Diamond National and the Monongahela National has been
approved by the United States District Court. The bank being formed
assumes 40% of the deposits of the Diamond and 65% of the proved claims
against the Monongahela. The new bank will open with capital funds of
$1.050.000 and deposits of about $7,500.000.

The board of directors of the Reconstruction Finance
Corporation on May 26 authorized the purchase of $200,000
worth of preferred stock in the reorganization of the Petersburg Savings & American Trust Co. of Petersburg, Va.
The preferred stock authorization is dependent on the subscription of $300,000 in common stock by those interested
in the reorganization.
The purchase of $50,000 worth of preferred stock in the
Bank of Waverly, Waverly, Va., which is being reorganized,
was authorized on June 1 by the directors of the Reconstruction Finance Corporation. The authorization to purchase the stock is contingent upon subscription of the
common stock by those interested in the institution.

June 3 1933

contingent upon subscription of the common stock by those
interested in the bank.

The following Wisconsin banks have been re-opened
without restrictions according to Minneapolis advices on
May 29 to the "Wall Street Journal": People's State Bank
of Augusta; State Bank of Fall Creek at Fall Creek; Phelps
State Bank at Phelps, and the People's State Bank at Three
Additional List of Banks Licensed to Resume Operation in Second (New York) Federal Reserve
The Federal Reserve Bank of New York, supplementing
ts statement of May 24 (noted in our issue of May 27, page
3665), issued the following list showing additional banking
institutions in the Second (New York) District which have
been licensed to resume full banking operations:
(Circular No. 1236, May 31 1933).

Jamaica.—The Jamaica National Bank of New York.
Red Creek.—The Red Creek National Bank.

Buffalo.—x Adam, Meldrum and Anderson State:Bank.
x Bank in Buffalo branch territory.

Paul J. Daspet sold a membership on the Commodity
Exchange, June 1, to Harold L. Bache for another at $2,500,
and George N. Berlet a seat to Enrico A. Stein for another
at $2,500.
Arrangements were made, J- une 2, for the sale of two New
York Curb Exchange seats, one at $42,000, up $10,000 from
the previous transaction, May 26, and the second at $43,000.
The membership of Paolino Gerli in the New York Cotton
Exchange was sold, May 27, to William W. Cohen for
$18,500, this price being $250 in advance of the previous
sale and that of Samuel T. Hubbard was sold, June 1, to
George F. Mahe for another for $19,500.
Arrangements were completed, May 26, for the sale of a
membership in The Chicago Stock Exchange for $6,500, up
$1,500 from the last previous sale.
A Chicago Board of Trade membership sold, May 27,
at $9,000 net, off $800 from the previous sale. Next membership is offered at $9,500.
A Toronto Stock Exchange membership was sold, June 2,
for $25,000, up $5,000 from the last previous sale.
George Brinton Caldwell, o- rganizer and 1st President of
the Investment Bankers Association, died at his home in
Bronxville, N. Y., of heart disease on May 27. He was 69
years of age. Mr. Caldwell was formerly President of
George B. Caldwell & Co., Inc., New York,from 1924, when
it was organized, until his retirement in 1931. Until recently
he was Vice-President of the United States Bond & Mortgage
Corporation, a director of the Irvington National Bank,
Irvington, N. Y., C. W. McNear & Co., investemnt brokers
of New York and Chicago,and an executive in other financial
concerns. Through Mr. Caldwell's efforts the Investment
Bankers Association was formed in 1911. He served as the
Association's first President for two terms, in 1912 and 1913.
James Loeb, retired banke-r, and son of Solomon Loeb,
founder of the banking house of Kuhn, Loeb & Co., died
on May 27 at Murnau, Germany, near Munich, of pneumonia. He was 65 years old. Mr. Loeb, who was born in
New York, was a graduate from Harvard in 1888. Following
his graduation he entered the firm of Kuhn, Loeb & Co.
He retired from banking in 1901 and in 1905 he moved to
Murnau. He founded the Psychiatric Experimental Institute at Munich, now part of the Kaiser Wilhelm Institute,
for the systematic study of mental diseases.


The following is from the New York "Sun" of last night
(June 2):

On June 1 the directors of the Reconstruction Finance
Corporation authorized the purchase of $125,000 worth of
preferred stock of the First National Bank of Bremerton,
Wash., which is being reorganized. The authorization is

Sale of 7,000 shares of Continental Bank & Trust Co. scheduled to take
place at auction to-day, was postponed untll 10:30 a. m.June 6.
Also to be sold is a certificate for 5.000-20.000ths of beneficial interest
In certain assets segregated from the merger of the Straus National Dank
Into the Continental Bank and at the same time there will be offered 2,805.

Volume 136

Financial Chronicle

shares of $100 par of the stock of the American National Bank & Trust
Co. of Chicago, which was formerly the Straus National of that city.
The sale is for the account of Straus interests, the stock In both the
Continental and the American National banks being shares they received
in exchange for their interests in the Straus National Bank of New York
and the Straus National of Chicago.

The distribution of a 10% dividend to the 32,000 depositors
of the defunct Federal National Bank of Boston, Mass., was
begun on May 22, according to the Boston "Transcript" of
that date. The current dividend is the second of similar
amount-10%—that has been paid to depositors since the
Institution closed Dec. 15 1931 and was placed in charge of
Herbert Pearson, receiver. It is payable to both savings and
commercial depositors. The failure of the Federal National
Bank of Boston was indicated in our issue of Dec. 19 1931,
page 4104. Our last previous reference to its affairs appeared in the "Chronicle" of April 15 last, page 2551.
At a recent meeting of the directors of the Sussex & Merchants' National Bank of Newton, N. J., Charles L. Inslee
was elected Executive Vice-President of the institution;
Frank B. Boss, Vice-President and Cashier, and Rolland T.
Hull, Acting Trust Officer. Mr. Boss has been associated
with the bank for many years as Vice-President and Trust
Officer, and Mr. Hull has likewise seen long service, his
father having been one of the Presidents of the old Sussex
National Bank. The change in the official staff was the
result of the resignation of John P. Dalton, who had been
Vice-President and Cashier since 1926. Mr. Dalton leaves
to assume the Executive Vice-Presidency of the First National Bank in Paterson, N. J. Judge Henry T. Kays is President of the bank, which was originally organized as the Sussex Bank in 1818. A consolidation was effected in 1925 of
the Sussex National Bank and the Merchants' National
Spencer Carpenter, formerly Assistant Treasurer of the
Commercial Trust Co. of Jersey City, N. J., was promoted
to a Vice-President and placed in charge of the Bergen Ave.
Branch of the institution at a recent meeting of the directors.
Mr. Carpenter succeeds Timothy J. Callahan whose sudden
death occurred in Atlantic City on May 19. The new VicePresident—according to the "Jersey Observer" of May 29,
from which the foregoing is learnt—entered the employ of
the Commercial Trust a clerk in 1906 and rose through
successive stages to Assistant Treasurer in 1926, the office
from which he has now been advanced. He is a member of
the Jersey City Chamber of Commerce and the Bergen
Avenue Business Men's Association.
That the Potter Title & Mortgage Guarantee Co. has been
separated from the Potter Title & Trust Co. of Pittsburgh,
Pa., of which it was an affiliate, has been announced by
officials of the trust company, according to the Pittsburgh
"Post Gazette" of May 29, which went on to say:


bank disaster by a hurried merger of the two largest banks. By an eleventhhour rally of industry and business behind the Credit Corp. of Akron,
$15.000,000 was raised to put through the coalition.
Later, $18,000,000 of Reconstruction Finance Corporation aid was received and advances made by the Credit Corp. repaid, the corporation
remaining as the bank's largest stockholder, with 37.000 shares.
Cramer found the bank's collateral either pledged to the R. F. C. or
largely "frozen" in real estate and other loans.
A Vice-President of the Illinois Merchants' Trust Co. (Chicago) and a
former Deputy Governor of the Chicago Federal Reserve Bank, Cramer
had scarcely had time;to draw upon his banking experience to meet the
problems here wheu the banks of the country were hit by heavy withdrawals
which turned into serious "runs."
In swift succession came the "Akron plan" of restricted withdrawals
by which it was hoped to;stem the tide, the Mar. 4 bank closing and failure
of the institution to:gain a license. Then followed Cramer's dramatic fight
to form a new nationallbank in Akron,forovhich he won It. F. C.approval
only to have the reorganization',move, now up for approval, brought for'
ward and the Cramer plan put aside,at least temporarily.
Cramer is 52. A Kansan, he started in Chicago as a bank messenger.

L. S. Burk has succeeded Carl L. Jernberg as President of
the Liberty Bank of Chicago, Ill., according to the Chicago
"Journal of Commerce" of May 29, which added:
Mr. Burk formerly was connected with the National Banking Department.
Deposits of the bank have been increasing substantially, according to officials
who report current deposits totaling $3,700,000, compared with $2,200,000
in March.

We learn from the Chicago "News" of May 29 that depositors in the closed Midland National Bank of Chicago were
to receive a 32% dividend on May 31, according to an announcement by M. E. Jensen, the receiver of the institution.
The paper mentioned continued:
Approximately 2,500 depositors will receive between $90,000 and $100,000.
It is the bank's first dividend since closing June 24 1932.

The closing of the Midland National Bank was noted in the
"Chronicle" of July 2 last, page 71.
Announcement was made May 24 that the Dansard State
Bank of Monroe, Mich., plans to reopen about July 1, according to Monroe advices on that date, appearing in the Detroit
"Free Press," which added that revised plans for reopening
the institution have been approved by the State Banking
Commissioner for Michigan. The closing of this bank on
Aug.28 1931 was noted in our issue of Aug.29 1931, page 1398.
The First National Bank of Lyman, Neb., capitalized at
$25,000, was placed in voluntary liquidation on May 10 1933.
The institution was absorbed by the First National Bank in
Morrill, Morrill, Neb.
A dispatch by the Associated Press from Spartanburg,
S. C., on May 23, stated that $100,000, representing a dividend of 10%, was to be distributed the following day to depositors of the defunct Carolina National Bank of Spartanburg, according to an announcement by J. L. Campbell, receiver. The payment, it was stated, would bring the total
paid to the depositors since the bank closed to 45%.

The name of the Potter Title & Mortgage Guarantee Co. has been changed
to the Pittsburgh Title and Mortgage Guarantee Co., under the management
of officers who have no connection with the bank.
None of the officers of the bank are now either directors or officers of
the mortgage company and the bank will confine itself to that of banking
and trust business.

William L. Isom, former President of the American National Bank of Spartanburg, S. C., was acquitted in the
Federal court, on May 26, of a charge of misapplying the
funds of the bank, according to a dispatch by the Associated
Press from Anderson, S. C., on May 27.

The respective directors of three small Virginia banks—
the Bank of Carson at Carson; the Prince George County
Bank at Prince George, and the Bank of Stony Creek at
Stony Creek—have approved plans for merging the institutions and submitted the same to their respective stockholders
for ratification, according to advices from Petersburg, Va.,
on May 22, to the Richmond "Times-Dispatch," which went
on to say:

A dispatch by the Associated Press from San Francisco,
Calif., on May 30, stated that, according to a disclosure on
that day, the Standard Oil Co. of California plans to acquire
a substantial interest in the Anglo-California National Bank
of San Francisco. The advices, continuing, said:

All three of the banks were licensed to reopen after the close of the
national bank holiday, and each has increased its deposits materially since
then. The merger is advocated in order that a larger bank with capital
sufficient to meet the requirements of the three localities will be
This is in accord with the present banking policy of both State and Federal
bank authorities.
Under the consolidation deposits will amount to over half a
million dollars
and resources will be more than three-quarters of a million.
It is proposed that the name of the new bank be "The Bank of

Sterling B. Cramer, President of the First-Central Trust
Co. of Akron, Ohio, since last fall until the failure of the
institution to reopen after the National banking holiday in
March, on June 1 became Executive Vice-President of the
Fifth Third Union Trust Co. of Cincinnati, Ohio. In reporting his appointment, a dispatch from Akron on May 31
to the Cleveland "Plain Dealer," said in part as follows:
A little more than twelve months before he (Mr. Cramer) succeeded
Harry Williams as First-Central chief. Akron bankers had averted a major

K. R. Kingsbury, President of the Rockefeller subsidiary, confirmed
rumors of the move which would mark the initial entry of the Rockefeller
fortunes into western banking.
The expansion program, planned by the local institution, would be
financed through the enlargement of capital stock, much of which would be
purchased by Standard Oil. The first of the expansion steps was reported
to provide for acquisition of 15 banks throughout the State, with resources
approximating $20,000,000, now controlled by the Anglo-National Corporation, a holding company.
"The Anglo-California Bank always has done a large share of our business,
and our faith in the institution leads us to acquisition of a direct interest
in the future program of the bank," Mr. Kingsbury said. "The bank is
planning on expanding its facilities, and we believe there is no time more
propitious than the present for sound expansion."
The oil company executive is a close friend of the Fleischhackers, principal owners of Anglo-California.

Appointment of Frank K. Galloway as Vice-President and
Manager of the Hollywood and Cahuenga branch of the Security-Eirst National Bank of Los Angeles, Los Angeles,
Calif., was announced on May 19, following the monthly
meeting of the directors. He succeeds the late George G.
Greenwood. The Los Angeles "Times," from which this is
learnt, continuing, said, in part:


Formerly Assistant Cashier of the bank, Mr. Galloway has been engaged
In banking in Hollywood for nearly a quarter of a century. . . . His
entire business career has been with the bank branch which he now heads.
He began as a bookkeeper in the old Hollywood National Bank in 1910, remaining with this institution when it merged and became a branch in the
Security-First National system. Advancing through the regular clerical
positions, he was elected Assistant Cashier in 1917. . . . He is now
serving his third term as President of the Hollywood Clearing House Association, which he also served one year as Secretary.

The stock market has continued buoyant during most of
the present week, though, at times, price movements were
somewhat irregular. On Saturday stocks soared from 1 to
10 points and the turnover established next to the highest
record for end of the week trading in the history of the Exchange. Many stocks among the industrials, rails, utilities,
oils and metals reached new high levels for the present year.
The trading was so heavy that the ticker continued to fall
back and at one time was about 20 minutes late. Profit
taking was in evidence at various times during the week, but
this, as a rule, was quickly absorbed as the market continued
to forge ahead. Call money renewed on Monday at 1%
and remained unchanged at this rate throughout the week.
The avalanche of buying that flowed into the stock market
on Saturday carried prices upward from 4 to 6 points, and
in some cases, up to 8 or 9 points. Transactions were
bunched in sales of 5 to 25 thousand shares and the volume of
business was so large that the tickers were, at one time, as
already stated, 20 minutes behind the transactions on the
floor. The largest gains were recorded in the mining
shares, Homestake Mining reaching 227 at its top for the
day and closed at 220 with a net gain of 3 points. Heavy
profit taking appeared during the second hour, and while
this canceled part of the early advances, the gains, at the
close, were of a substantial character. Amer. Tel. & Tel.
was one of the strong stocks and closed with a jump of 531
points to 119. Other noteworthy gains were American Can,
331 Points to 913-1; American Car & Foundry, 531 points
to 2531; American Commercial Alcohol, 33% points to 33%;
American Tobacco B, 3 points to 89; Central RR. of N. J.,
43/i points to 803'; Continental Baking pref., 4% points to
69; Drug, Inc., 331 points to 543'; Eastman Kodak,..43
points to 80; Goodyear 1st pref., 3 points to 70; International
Cement, 3 points to 29; Liggett & Myers,531 points to 90%;
Standard Gas & Elec. pref. (7), 3 points to 36; Union Pacific,
103- points to 112; United Air & Transport, 2 points to 313/s;
United States Industrial Alcohol, 43% points to 52; Western
Union Tel., 23/i points to 45%; Westinghouse, 2 points to
4331; Worthington Pump, 2 points to 35; International
Shoe, 4 points to 49, and J. I. Case Co., 33- points to 733.
Despite early losses, stocks continued to move ahead on
Monday, public utilities, oil shares and mining stocks leading the upward surge. American Can reached its peak for
the past two years as it broke through 93, oil shares reached
new tops for the year, Amer. Tel. & Tel. and Auburn Auto
hit new highs for 1933 and stocks like Douglas Aircraft,
Warner Brothers and Howe Sound reached new high levels.
The gains ranged from 1 to 5 or more points and the tickers
were again far behind the floor transactions. The outstand/
ing advances were American Car & Foundry pref., 31 2
points to 40; American Hide & Leather pref., 4 points to 43;
American Metals pref., 4% points to 65; American Smelting
2 pref., 53 points to 603'; Auburn Auto, 43% points to
583%; Byers Co. pref., 6 points to 62; Central RR. of N. J.,
43/i points to 85; Federal Mining & Smelting, 73% points to
48; Inland Steel, 33% points to 36; Ludlum Steel pref., 33%
points to 393%; New Haven pref.,3 points to 48; Reading Co.,
7 points to 533%; Standard Oil of Kansas, 6 points to 25;
Tide Water Oil pref. (n), 33% points to 403 ; United States
Steel pref., 23% points to 973%, and Wilson Co. pref., 2
points to 49.
The New York Stock Market, the Curb Market and all
commodity markets were closed on Tuesday in observance of
Memorial Day.
Stocks were higher, but prices were irregular on Wednesday, and while the trading continued fairly heavy during
the early dealings, the activity simmered down toward the
end of the day. Railroad shares were strong during most
of the session and there was considerable demand for the
metal stocks and industrial issues, though the reaction during
the latter part of the trading left the closing prices somewhat
lower than the day's best. The turnover exceeded 6 million
shares and approximately 920 listed stocks figured in the
transactions. Mining issues moved briskly forward under
the leadership of Kennecott and Anaconda, and there was a

June 3 1933

Financial Chronicle

very considerable amount of speculative interest displayed
in the rubber and oil issues. The gains for the day included
among others, Allied Chemical & Dye, 2% points to 102;
American Can, 23% points to 893%; American Metals pref.,
23% points to 623/3; Brooklyn Union Gas, 23j points to 76;
Ludlum Steel pref., 23% points to 42; Radio Corp. pref.,
63 points to 363%; Wilson & Co. pref., 53 points to 53%;
& Towne, 23% points to 21; and United States Rubber
pref., 2% points to 273%.
Railroad shares, copper stocks and oil issues were the
outstanding features of the trading on Thursday, and Nvhile
many of the active stocks moved upward,there was considerable irregularity in evidence during the greater part of the
session. Profit taking was apparent but was well absorbed
as the market continued to move upward. The buying in
the copper group was stimulated by the improvement in
metal prices and the favorable outlook for further advances.
Distillery stocks and allied issues like National Distillers and
Libby-Owens Glass were among the strong shares, and
industrial stocks such as J. I. Case Co. and Goodyear Tire
showed substantial gains. Oil issues also were in demand
on the strength of the advance in gasoline prices. The
principal changes were on the side of the advance and
included such active speculative favorites as American Can,
13% points to 91%; American Locomotive pref., 2 points to
45; American Metals pref 23/b points to 65; Brooklyn Union
Gas, 2 points to 763 ; J. I. Case Co., 5 points to 74%;
Central RR.of N. J., 43% points to 90; Coca Cola, 13/ points
to 84; Delaware, Lackawanna & Western, 23 points to 3831;
Detroit Edison, 2 points to 78; Federal Mining & Smelting,
23% points to 505 ; General Printers Ink pref. (6), 23% points
to 53; Inland Steel, 23% points to 38; International Business
Machine, 2 points to 122; Laclede Gas (6), 105 points to
603%; Pere Marquette, 2% points to 213 ; Reading Co.,
4 points to 56; Tide Water Oil pref. (n), 23/ points to 433/2;
Union Pacific, 131 points to 10931; Universal Leaf Tobacco
pref. (8), 4 points to 109, and Wilson & Co. pref., 53j
points to 59.
Speculative interest centered around the railroad shares
and public utilities as the market again moved vigorously
forward on Friday. The gains ranged from 1 to 10 or more
points and a number of prominent issues broke into new
high ground for 1933. United States Steel reached a new
peak above 54, and there were numerous other fast movers
like Allied Chemical & Dye, Du Pont, Homestake Mining
and Air Reduction. Some profit taking was in evidence
but this made little impression on the list as the market
rushed ahead. Among the noteworthy gains for the day
were Air Reduction 33 points to 83, Allied Chemical &
Dye 103% points to 1125 , Auburn Auto 3 points to 673%,
Coca Cola 43% points to 883%, Ludlum Steel 5 points to 47,
New York & Harlem 7 points to 143, Pere Marquette pref.
8% points to 283%, Ward Baking pref. 5 points to 333%,
and Western Union Telegraph 53% points to 493%. The
market was strong at the close with prices near the best
of the day.

Week Ended
June 2 1933.

Number of arul Miscell. Municipal db
For'n Bonds.

Total _



Week Ended June 2.






33.943.900 577.008.900
Jan. 1 to June 2.






$3,943,900 $11,364,850
15,433,000 14,534,000
57,632,000 32,080,000




-No. of shares_
Government bonds-State & foreign bonds_
Railroad St misc. bonds


28 972.760 557.632.000 515,433,000

Sales at
New York Stock




$77,008,900 $57,978,650 $1,370,439,600 51.319,061,350

Week Ended
June 2 1933.
Prey week revised



Shares. Bond Sales. Shares. Bond Sates. Shares. Bond Sales.
Holl day.

11011 day.

-- --55:000
Holt day.













Volume 136

Financial Chronicle

Trading on the Curb Exchange closely followed the movements of the big board during most of the present week,
and while there were occasional periods of hesitancy, the
trend, on the whole, was strongly upward. On Saturday
the dealings were so heavy that the facilities of the curb
market were taxed to the utmost. The buying centered to
a large extent around the public utilities, industrials and
specialties, though the mining stocks were also in demand
at times. Profit taking was frequently in evidence, but
made little impression on the strong upward movement.
On Saturday the trend was sharply upward as arge blocks
of stocks changed hands under a flood of buying orders.
The industrial list attracted a large part of the speculative
intere it, particularly Aluminum Co. of America, which
reaclod 83 at its top for the day and closed at 8134 with a
nef gain of 5 points. Alabama Great Southern was up 334
p Ants to 3334; Great Atlantic & Pacific Tea Co. surged
,orward 5 points to 176; Pittsburgh & Lake Erie (234)
forged ahead 434 points to 5734, and United States International 1st preferred moved ahead 4 points to 42. Mining
stocks were strong and advanced under the leadership of
Newmont, followed by Hudson Bay, Roan Antelope and
United Verde Extension. Investment trusts were active
and strong, and oils shared in the advance. Mining issues
and oil shares led the rebound following the early weakness
on Monday. The upswing developed around mid-day when
Humble Oil & Gas suddenly turned upward and registered
a gain of 73% points. Industrial shares were represented in
the advance by Cord Corp., Sherwin Williams and John
Deere, and there were lesser gains by other members of the
group. Public utilities were under pressure in the early
dealings, but steadied later in the day and many issues
showed modest gains at the close.
The Curb Market was closed on Tuesday in observance of
Memorial Day. Public utilities assumed the market leadership during the early dealings on Wednesday but were superceded later in the day by the industrial shares and oils. Some
profit taking was in evidence around the middle of the
session but this gradually fell off as prices continued to move
toward higher levels. Oil shares were in demand at higher
prices, especially Humble Oil which moved up to 7334 at its
top for the day followed by Gulf Oil of Pennsylvania with an
advance of 234 points. Public utilities were represented in
the upturn by Electric Bond & Share, American Gas & Electric corn. and pref. and Cities Service, the latter making a
new top above 6 with a gain of 1 point. Celanese 1st pref.
was up about 3 points and the prior pref. gained 5 points to
85. Following a weak tone during the early dealings on
Thursday, new buying flowed into the market and large
gains were scored by the public utilities and industrial
stocks, while many miscellaneous issues registered substantial
gains at the close. Aluminum Co. of America, for instance,
dropped back to 78 and then swiftly climbed up to 80. General Tire and Rubber, usually inactive, jumped 8 points to 62
and Pittsburgh & Lake Erie rose 4 points to 64. Public
utilities were irregular at the start but improved as the day
progressed. Consolidated Gas of Baltimore was a strong
feature and closed with a gain of 134 points. American Gas
& Electric reached 373% at its peak for the day and Celluloid
1st prof. scored a gain of 734 points. Oil shares were higher
all along the lino, particularly Humble Oil which was exdividend and made a net gain of 134 points to 71 and Gulf Oil
which forged ahead 234 points to 52. Mining shares were
higher and moved ahead under the guidance of Newmont
which broke through 43 at its top for the day.
The big demand for curb stocks whirled all sections of the
list upward on Friday and many substantial gains were
recorded among the active speculative issues. Aluminum
Co. of America led the uprush with a gain of 53% points to
85, and General Tire & Rubber moved up about 9 points
at its peak for the day, though it lost part of its early improvement and closed with a net gain of about 3 points.
Public utilities attracted considerable speculative attention,
Alabama Power pref. (7) forging ahead 53 points to 85,
Electric Bond & Share rushing upward 4 points to 2634, and
Public Service of No. Ill. improving 5 points to 38. Investment shares were higher, Selected Industries pref. having an
advance of 634 points to 68. Mining stocks also moved up,
Newmont leading the forward movement with a further gain


of 13 points to above 44 and Pioneer Gold made a new top
above 12. The gains for the week included many prominent
stocks such as Aluminum Co. of America,82 to 85; American
Gas & Electric, 353 to 3934; American Laundry Machine,
1334 to 153; American Superpower, 43 to 5%; Asso. Gas
& Electric A, 134 to 234; Atlas Corporation, 1434 to 1534;
Brazil Traction & Light, 1134 to 123 ; Central States
Electric, 234 to 33 Cities Service, 4 to 5%;Commonwealth
Edison, 70 to 73; Consolidated Gas of Baltimore, 5934 to
613s; Cord Corporation, 1134 to 12; Creole Petroleum,
to 5%; Deere & Company, 1934 to 193 ; Duke Power, 55
to 60; Electric Bond & Share, 25 to 2834; Ford of Canada A,
834 to 1134; Gulf Oil of Penn., 46 to 5534; Hudson Bay
Mining, 734 to 934; Humble Oil, 6134 to 73%;International
Petroleum, 13 to 1434; New Jersey Zinc, 45 to 5134; Niagara
Hudson Power, 103% to 113 ; Pennroad Corporation, 234
to 334; Singer Mfg. Company, 13834 to 1433 ; A. 0. Smith,
4234 to 45; Standard Oil of Indiana, 2634 to 2934; Swift &
Company, 207 to 213%; United Gas Corporation, 23 to 3;
United Light & Power A,634 to 738; United Shoe Machinery,
463% to 47; and Utility Power, 134 to 23%.
A complete record of Curb Exchange transactions for the
week will be found on page 3879.

Week Ended
June 2 1933.



Bonds (Par Value).
Domestic. Government. Corporate.

597,721 $2,675,000
888,136 3,966,000


Week Ended June 2.


-No,of shares_
$19,669,000 $15,541,000
Foreign goverwnent
Foreign corporate
$21,917,000 $16,905,000


$131,000 $2.991,000
170,000 4,939.000

4,347,061 $19,669,000 $1,528,000

Sales at
New York Curb




$720,000 $21,917,000
Jan. 1 to June 2.









Bank clearings this week will again show a decrease as
compared with a year ago. Preliminary figures compiled by
us, based upon telegraphic advices from the chief cities of
the country, indicate that for the week ended to-day (Saturday June 3), bank exchanges for all the cities of the United
States from which it is possible to obtain weekly returns will
be 13.8% below those for the corresponding week last year.
Our preliminary total stands at $4,578,277,369, against
$5,312,804,827 for the same week in 1932. At this center
there is a loss for the five days ended Friday of 9.4%. Our
comparative summary for the week follows:
Clearings-Returns by Telegraph,
Week Ending June 3.
New York
Kansas City
St. Louts
San Francisco
Los Angeles
New Orleans
Twelve cities, five days
Other cities, five days



$2,674,099,579 $2,952,079,795
No longer will re port clearings.







!A m00 000 'an

Total all cities, five days
All cities, one day


er 010 onA on,

10 o

Complete and exact details for the week covered by the
foregoing will appear in our issue of next week. We cannot
furnish them to-day, inasmuch as the week ends to-day
(Saturday) and the Saturday figures will not be available
until noon to-day. Accordingly, in the above the last
day of the week has to be in all cases estimated.
In the elaborate detailed statement, however, which we
present further below, we are able to give final and complete
results for the week previous, the week ended May 27. For
that week there is a decrease of 5.5%, the aggregate of
clearings for the whole country being $4,183,475,985, against
$4,428,309,840 in the same week in 1932. Outside of this
city there is a decrease of 15.4%, the bank clearings at this
center recording a gain of 0.4%. We group the cities according to the Federal Reserve districts in which they are located,

and from this it appears that in the New York Reserve
District, including this city, the totals show a gain of 0.2%,
but in the Boston Reserve District there is a loss of 10.5%
and in the Philadelphia Reserve District of 4.2%. The
Cleveland Reserve District has suffered a contraction of
22.6%, the Richmond Reserve District of 28.7% and the
Atlanta Reserve District of 2.8%. In the Chicago Reserve
District the totals are smaller by 30.7% and in the St.
Louis Reserve District by 12.4%, but'in the Mmneapolis
Reserve District the totals are larger by 3.3%. The Kansas
City Reserve District records a decrease of 17.2%, the
Dallas Reserve District of 2.4% and the San Francisco
Reserve District of 14.5%.
In the following we furnish a summary of Federal Reserve



Week Ended May 27 1933.

110 cities
Outside N. Y. City


32 cities




4,428,309,840 -5.5 6,588,414,329 8,388,192,446
1,663,716,148 -15.4 2,329.272,250 2,958,934,344
193.966.244 +15.5



Inc. or

First Federal Reserve Dist rict-Boston398,322 -7.0
2,062,751 -38.5
-Boston _ . 171,489,498 189,622,697 -9.6
749,341 -21.4
Fall River_ -262,415 -18.0
562,143 -33.9
New Bedford3,122,348 -18.6
Springfield _ _ .
2,190,944 -53.6
Worcester _- .
7,525,250 +2.9
5,360,053 -34.4
New Haven .
6,620,800 +0.2
466,520 -37.3
Total(12 cities 1


218,943,584 -10.5






Inc. or



314,158,012 -30.7

Eighth Fed ra I Reserve Dis trict-St. Lo Wsb
65,500,000 -19.5
Mo.-St. Louis
15,895,390 +4.8
Ky.-LouLsvill L
7,629,774 +15.2
Tenn.- Memp els
Jacksonv Ile No clearings; only one ban k open.
454,991 -47.9

2,( 9,78


678,01 535







Ninth Fede -ill Reserve Dist rict Mione apolis 1,907,175 +1.4
Mlnn.-DuiutTh .._
41,817,138 +5.7
Minneapolis. __
13,088,474 -0.9
St. Paul_ _
1,549,846 -19.4
N. D.
-Fargo._ _
604,569 -24.7
S. D.-Aberd en
279,895 -6.3
1,503,980 +13.2


Total(4 citi 0_


89,480,155 -12.4





Tenth Fede ral Reserve Dist rict-ICansa a City153,416 -76.8
Neb.-Fremon presen
Hastings-- __ No clearings available at -11.9 t.
21,566,608 -13.4
1,740,990 -42.1
-Topeka __
3,576,599 -58.1
Wichita _ _ _ _ _
58,548,031 -15.6
Mo.-Kan. City_
2,433,615 +2.3
St. Joseph_ _
603,683 -32.6
-Colo.S ga
722,567 -47.6





Second Fede r al Reserve D istrict-New York6,457,975
5,232,162 +103.8
-Albany. •
N. Y.
624,693 -2.9
Binghmaton 32.741,794
22,835,913 -8.0
722,568 -40.3
559,236 -50.8
Jamestown_ _ _
New York_ _ 2,776,196,004 2,764,593,692 +0.4 4,259,142,079 5,429,258,102
4,964,512 -2.3
3,262,496 -18.4
2,309,508 -8.6
362,985 -24.1
N. J.-Montclal
19,611,855 -30.5
23,158,923 -12.0
Northern N. J
Total(12 cities 2,853,072,916 2,848,238,543


Seventh Fedler al Reserve D istrict-Chi cago-Mich.
-Adrian - Clearing Hou se not functio ning at present.
340,404 -17.5
Ann Arbor..--70,122,572 -1.8 109,186.025
2,215,495 -65.3
Grand Rapt Is..
1,931,000 -80.5
Lansing - - __
922,322 -60.3
-Ft. Way ne
10,831,000 -28.3
Indianapolis _ _
1,458,911 -71.7
South Bend __
2,605,678 -89.9
Terre Haute._ _
12.552,431 -22.8
724,134 -78.6
Ia.-Ced. RapIds
4,838,598 -19.6
Des Moines __
1,878,464 -2.1
Sioux City_ __
Waterloo -- _ _ No c.earings available.
833,873 -95 5
Ill.- Bloomin -I'll
Chicago.. _ _ _ _ _ 181,904,652 199,409,074 -8.8 349,146,802
429,628 -0.9
Decatur_ --__
1,950,467 -11.1
514,919 -2.4
Rockford_ _ _ __
1,323,176 -49.9
Springfield. _ --663,414

Total(7 till 0.

Ilreek Ended May 27.



We now add our detailed statement, showing last week's
figures for each city separately for the four years:
Clearings at

Week Ended May 27. .
Clearings at

Total(18 MI66)


Federal Reserve Dists,
218,943,584 -10.5
lit Bo8ton...-12 cities
2,853,072,916 2,848,238,543 +0.2 4,362,202,000 5.575,323,863
2nd New York 12 "
265,336,815 -4.2
3rd Philadelphia 9 "
185,155,712 -22.6
4th Cleveland_ -. 5 "
68,055,714 , 95,467,812 -28.7
6 "
6th Richmond._
73,209,686 -2.8
6th Atlanta_ _ _ _10 "
314,158,012 -30.7
7th_ Chicago.---18 "
89,480,155 -12.4
8th 85. Louis.-- 4 "
60,751.077 +3.3
9thiM Inneapolls 7 "
90,802,834 -17.2
Ransaselty 9 "
30,300,298 -2.4
Ilth Dallas____ 5 "
156,465,312 -14.5
12th San Fran...13 "


June 3 1933

Financial Chronicle


+0.2 4,362,202,000 5,575,323,863

Third Federa Reserve Dist rict-Philad elphia 2,613,323
3,906,634 -92.6
-Altoona _ _
Bethlehem.... Clearing Hou se has suspen ded de snags.
356,325 -37.7
1,109,356 -36.7
246,000.000 251,000,000 -2.0 340,000,000
Philadelphia 2,309,202
2,021,594 -52.2
2,029,697 -34.6
1,415,901 -11.8
1,032,908 -21.5
2,464.400 +10.7



90,802.834 -17.2



Eleventh F de ral Reserve District-0 alias860,511 -33.5
-Austin __
21,550,649 +2.2
4,726.432 -9.5
Ft. Worth -1,278,000 -10.9
1,884,706 -16.7
La.-Shrevepo i.






Total(9 citi 0.

Total(5 tit( ).




Twelfth Feder al Reserve D istrict-San Franc sco.20,849,089 -15.6
-Seattle __
4,630,000 -23.3
Spokane_ -- __
360,022 -35.8
Yakima_ _ _ - 17,757,402 -12.5
Ore -Portland..
7,888,819 -2.0
Utah-Salt L.0 ii
2,875,871 -9.1
Calif-Long 13'ell
Los Angeles_ -- No longer will report clearin P.
2,337,040 -14.8
Pasadena.-- --1,991,737
5.378,829 -55.0
Sacramento-.• San Diego -- _ No longer will report ciearin gs.
90,406,815 -13.1 106,421,074
San Francisc D.
1,213,649 -9.3
San Jose_ - -- _ _
824,140 -6.3
Santa DarbaxtL.
870,528 -15.8
Santa Monl s.
1,073,108 -18.2
Stockton. ._




Total(13 dB a) 133,725,515 156,465.312 -14.5 189,278,720 255.997,093
Grand total (1 to
_ 4,183,475.985 4,428.309,840 -5.5 6,588,414,329 8,388,192,446
Outside New Yo rk 1,407,279,981 1.663,716,148 -15.4 2,329,272,250 2,958,934,344

Week Ended May 25.
Clearings at

Total(9 cities)




Fourth Feder al Reserve D istrict-Clev elandOhlo-Akron.
Majority ban Its unlicensed; Cleari ng house not I unctioning.
36,778,877 -16.8
Cincinnati _ -77,164,808 112,837.976
62,606,813 -36.4
6,414,100 -7.1
938,493 -23.2
78,417,429 -15.5 114,144,488 147,739,278
Pa.-Pittsburgh _
185,155,712 -22.6



Fifth Federal Reserve Dist rict-Richm ondW.Va.-Hunt'n_
314,887 -74.2
3,135,618 -38.0
Va.-Norfolk _
Richmond _ __
25,011,201 -9.0
898,691 -44.4
49,157,242 -32.8
Md.-Baltimore16,950,173 -43.3





Total(5 cities).

Total(6 cities).



95,467,812 -28.7

Sixth Federal Reserve Dist rict-Atlan ta1,300,000
2,129,848 +51.7
8,587,278 -7.7
Ga.-Atlanta.. _
23,700,000 +4.2
602,110 +42.9
432,945 -29.2
7,637,501 +26.0
7,919,539 +17.6
632.943 +25.6
-Jackson_ Clearing H'se not function! ng at pr esent.
96.337 -12.5
VIcksb urg - _
-New Orleans
21,471,185 -33.2



St. John
Moose Jaw
Fort William
New Westminster
Medicine Hat._
Peterborough Sherbrookes
Prince Albert _--Moncton


Total(32 cities)











193,968,244 +15.5





Total(10 cities)


enc. OT

b Clearing house not functioning at present

Volume 136

Financial Chronicle




We reprint the following from the weekly circular of
Samuel Montagu & Co. of London, written under date of
May 17 1933:
The Bank ofEngland gold reserve against notes amounted to £185.988,501
on the 10th instant,as compared with £185,988,164 on the previous Wednesday.
No purchases of gold have been announced by the Bank of England during
the week.
In the open market, moderate amounts of bar gold have been available
daily and have been readily absorbed by the Continent. The demand
continued keen and prices ruled well above franc parity.
Quotations during the week.
Equivalent Value
Per Fine
of £ Sterling.
May 11
123s. 6d.
138. 9.09d.
May 12
123s. 3d.
13s. 9.43d.
May 13
123s. 6d.
13s. 9.09d.
May 15
123s. 3d.
13s. 9.43d.
May 16
13s. 9.76d
May 17
138. 8.43d.
1235. 5.00d.
13s. 9.20d.
The following were the United Kingdom imports and exports of gold
registered from mid-day on the 8th instant to mid-day on the 15th instant:
£301,279 Italy
3,417,907 Netherlands
63,400 Belgium
1,222,845 France
163,880 Switzerland
22.289 Austria
British South Africa
1,316,039 Czechoslovakia
British India
561,767 Poland
British Malaya
British West Africa
1J. S. A
Other countries

Quotations of representative stocks on the Paris Bourse
as received by cable each day of the past week have been
as follows:
May 27 May 29 May 30 May 31 June 1 June 2
1933. 1933. 1933. 1933.
1933. 1933.
Francs. Francs. Francs. Francs. Francs. Francs.
Bank of France
11,900 11.800 12,000 12,400 12,700
Banque de Paris et Pays Ras
1,660 1,647
Banque d'Union Parisienne
Canadian Pacific
Canal de Suez
18,585 18,570 18,690 18,650
Cie Hiatt d'Electricitie
2,570 2.626
2,630 2.655
Cie Generale d'ElectricItie
2,370 2,295 2,270 2,330 2:3543
Cie Generale Transatlantique56
_Citroen B
Comptoir Nationale d'Estompte
1,160 1,157 1,150
Coty Inc
Credit Commercial de Franoe
Credit Fonder de France
4.820 4,820 4,810 3,870 4:856
Credit Lyonnais
2,230 2,220 2,290
Distribution d'Electricitie is. Par
2,670 2,570
Eaux Lyonnais
2,900 2,860
2,900 2,900
Energle Electrique du Nord
Energie Electrique du Littoral
French Line
Gaieties Lafayette
Gas le Bon
1,050 1,040
L'Air Liquide
Lyon (P.L M.)
Mines de Courrleres
Mines des Lens
Nord Rs'
1,260 1,280
Orleans Ry
Paris, France
Lois 1,010
_ _ __
Pathe Capital
Rentea 3%
67.50 66.70 66.80 68.70 68.50
Rentes 5% 1920
106.60 105.70 105.70 109.60 108.50
Reines 4% 1917
76.90 76.40 77.80
Bente))434% 1932 A
82.60 81.70 81.80 84.30
Royal Dutch
Saint Gobsin C & C
1,320 1,574
Schneider & Cie
1,585 1,587
Societe Andre Citroen
Societe Fiancatse Ford
Societe Generale Fonciere
Societe Lyonnalse
2,865 2,920
_Societe Maraellaise
18,700 18.500 18,600 18,600 18:566
Tubtre Artificial Silk pref
Union d'Electricitie
Union des Mines..

The S. 8. "Strathaird" which left Bombay on the 13th instant carries
gold to the value of about £898.000: ofthis £600,000 is consigned to London,
£238,000 to Amsterdam and £60,000 to New York.
The Transvaal gold output for April last amounted to 895,097fine ounces,
as compared with 946,863 fine ounces for March 1933 and 949,796 fine
ounces for April 1932.
The market developed an easier tendency during the Past
week. Prices
declining from 19 1-16d. for cash and 19%d. for two months quoted on the
11th instant, to 18 3-164. and 1834d.for the respective deliveries yesterday.
With the pressure from America easing, the market could offer little
resistance to some moderate sales from the Continent, the demand from
Indian Bazaars and speculators being insufficient to offset offerings.
Although towards the end of the week the decline in the New York quotation
caused free selling, on some afternoons, the price there fluctuated sufficiently to attract buying also from the same quarter.
Following firmer advices from New York, there was a sharp
here to-day, but, as regards the outlook, it seems probable that silver
common with other markets, may be influenced to a large extent by developments in the general political situation.
The following were the United Kingdom imports and exports of silver
registered from mid-day on the 8th instant to mid-day on the 15th
£39.690 Germany
22,120 France
3,000 Canada
British South Africa
Other countries
British India
Other countries
Quotations during the week


Bar Silver per Oz. Std.
(Cents per Ounce .999 Fine.)
Cash Delis.
2 Mos. Dello.
May 11...19 1-16d.
May 10
May 12_19d.
Mai 11
May 13- _18 d.
May 12
May 15--18 d.
186-164. Mai 13
33 13-16
May 16_-18 -164.
May 15
32 516
May 17..19d.
19 1-16d.
May 16
The highest rate of exchange on New York recorded during the period
from the 11th instant to the 17th instant was $4.00, and the lowest
(In lace of Rupees)May 7. Apri130. Apri122
Notes in circulation
Silver coin and bullion in India
Gold coin and bullion in India
Securities (Indian Government)...
The stocks in Shanghai on the 13th instant consisted of about
ounces in sycee, 250,000,000 dollars and 8,760 silver bars, as
with about 150.000,000 ounces in sycee. 245.000,000 dollars and
silver bars on the 6th instant.

The daily closing quotations for securities, &o., at
as reported by cable, have been as follows the past week:
Afar 27. May 29. May 30. May 31.
June 1. June 2.
Silver, per oz-- 1834d.
18 15-16d. ---19 1-16d. 1834d.
Gold,p.tine oz. 1228.10d. 1233.3d. 1236.10d. 1236.10(1. 1228.1d.
Consols,2%%. 7234
British 334%w.L
British 4%1960-90
French Rentes
(in rarie)3% It. Holiday.
French War L'n
(In Paris)5%
1920 amort_ Holiday.
The price of silver in New York on the same days has
Silver in N. Y.,
per oz. ot.a.

The Berlin Stock Exchange resumed trading on Friday,
April 29 1932,after having been closed by Government decree
since Sept. 18 1931. Closing prices of representative stocks
as received by cable each day of the past week have been
as follows:
May May May May June June
27. 29.. 2.
Per e'ent of l'ar
Reichsbanic (12%)
125 125
125 124 129
Berliner Handelo-Gesellschafi (5%)
Commerz-und Privat-Bank A. G
Deutsche Bank und Disconto-Gesellschaft 53
Dresdner Bank
Deutsche Reichsbahn(Ger Rya) pref(7%)_. 97
Allgemeine Elektrizitaets-Geaell(A E G)
Berliner Kraft u Licht (10%)
112 111
112 113 114
Deesauer Gas (7%)
112 113
Hamburg Elektr-Werke (834%)
104 104
102 103 106
Siemens & Ilaiske(7%)
157 157 158
IC Farbenlndustrie(7%)
130 132 136
Salzdetfurth (9%)
180 185
Rhelnische Braunsohle(10%)
199 201 202 203
Deutsche Erdoel(4%)
117 118
Mannesmann Boehm
Norddeutscher Lloyd
In the following we also give New York quotations for
German and other foreign unlisted dollar bonds as of June 2
29 Hungarian Defaulted Coup 155
Hungarian Ital Bk 734s.'32 f71
Kohoiyt 634s, 1943
3312 3612
An oquia 8%. 19 6
., 23
25 Hatztadt 65. 1943 C
AustrianDefaultedCoupons 170- Land M Bk, Warsaw 88,'41 43
Bank of Colombia.7%.'47 1 3112 1312 Leipzig o'land Pr. 630,'46 53
Bank of Colombia,7%.'48 13111 3312 Leipzig Trade Fair 7s, 1953 2412 26
Bavaria 6348 to 1945
4112 Luneberg Power, Light &
Bavarian Palatinate Cons.
Water 7%, 1948
Cit. 7% to 1945
24 Mannheim & Palat 7s, 1941 43
1334,'47 122's2412 Munich 78 to 1945
1 7
9 Muni° Bk, Hessen,75 to'45 26
Buenos Aires Scrip
1 10
20 Municipal Gas & Plec Corn
Brandenburg Elec. 68. 1953 501
Recklinghausen. 75, 1947 28
Brazil Funding 5%,'31-'51 44
45 Nassau Landbank 634a,'38 6212 6412
British Hungarian Bank
Nat Central Savings Bk of
634a, 1962
Rungs.,, 734a, WIN__ 137
Brown Coal Ind. Corp 1 35
36'2 National Hungarian & Ina.
6hs, 1953
Mtge. 7%, 1948
Call (Colombia) 7%. 19 1 6143
6135 Oberptalz Elea 7%, 1946.. 3012 33 z
Callao (Peru) 734%, 1944 1 4
8 Oldenburg-Free State 7%
Ceara (Brazil) 8%, 1947__ 1 812 1012
to 1945
City Savings Bank, BudaPorto Alegre 7%,1968__ 11612 1712
pest, 75, 1953
12 84 Protestant Church (Ger1 32
Deutsche 13k 6% '32 unst d
many) 78. 1946
Dortmund MUD Bill 68.'48 30
32 Prov Bk Westphalia 65,'33 79
Duisberg 7% to 1945
18 Rhine Westph Elec Ts 1938 40
Duesseldorf 7s to 1945
28 Rio de Janeiro 8%, 1933.. 1 23
East Prussian Pr. 6e, 1953. 40
43 Rom Cath Church 6345,'48 47
European Mortgage & InR C Church Welfare 7s,'46 391
vestment 7355, 1966 _
51 Saarbruecken M Bk 6s,'47 74
1 49
French Govt. 534s, 1937
Salvador 7%, 1937
French Nat. mail SS.6a,•52 109
ifi" Banta Catharina (Brazil) 1 16
Frankfurt 75 to 1945
8%, 1947
11612 18
German Atl. Cable 7s, 1945 54
57 Santander (Colom) 7s, 1948 1 1412 1515
German Building & LandSao Paulo (Brazil) 6a, 1947 1 17
6aok 1914% 1948
bs 657 .
31 Saxon Public Works6%,
'32 1 52
Haiti 6% 1953
72 Saxon Mate Mtge 65, 1947 51
Hamb-Am Line 634s to '4() 61
64 Siem & Halake deb 65, 2930 275 295
Hover Harz Water Wks
Stettin Pub Utli 7s, 1946_
27 Tucuman City 7s, 1951___ I 20
Housing & Real Imp 75,'46 30
33 Tucuman Prey. 7s, 1950-- I 33
Hungarian Cent Mut 78'37 1 8012 32 Vesten Else fly 7s, 1947_ 1 10
Hungarian Discount & Ex36
Wurtenberg 7s to 1945-- 32
change Bank is, 196-.3. 1 291
Flat price.
Admit 7,to 1946
Argentine 5%. 1945, 3100


Financial Chronicle
Commercialand wisccuancoussews Shares. Barnes & Lofland, Philadelphia:

-- •

--National Banks.—The following information regarding
National banks is from the office of the Comptroller of the
Currency, Treasury Department:
May 20—The Hibernia National Bank in New Orleans, New
Orleans, La. Tne capital stock of this bank is
$2,700,000 and is composed of $1.200,000 common
stock and $1,500,000 preferred stock.
President, A. P. Imahorn; Cashier, G. L. Owen Jr.
Will succeed Hibernia Bank & Trust Co. of New
Orleans, La.
May 20—The National Bank of Commerce in New Orleans,
New Orleans, La. The capital stock of this bank
is $2.700,000 and is composed of $1,200.000 common
stock and $1,500.000 preferred stock.
President. 0. G. Lucas; Cashier, Dale Graham.
Will succeed Canal Bank & Trust Co. of New Orleans,
May 22—The National Bank in North Kansas City, North
Kansas City, Mo
President. Nathan Rieger; Cashier, V. K. Tuggle.
Will succeed the National Bank & Trust Co. of North
Kansas City, Mo., Charter No, 10367.
May 23—The National Security Bank of Chicago. Chicago, Ill
President, Norman B. Collins; Cashier. John L.
May 16—The First National Bank of Bardwell, Tex
Effective April 24 1933. Liquidating agent, J. W.
Tolleson, Bardwell. Tex.
Absorbed by Citizens National Bank in Ennis, Tex.,
Charter No. 13667.
May 18—The First National Bank in Midlothian, Tex
Effective April 4 1933. Liquidating agent, First National Bank In Midlothian, Tex., Charter No. 13670.
Succeeded by First National Bank in Midlothian,
Charter No. 13670.
May 25—The First National Bank of Lyman, Neb
Effective May 10 1933. Liquidating agent, C. F. W.
Bloedorn, 804 Security Bldg.. Denver, Colo.
Absorbed by First National Bank in Morrill. Neb.,
Charter No. 12625.
May 20—The Hibernia National Bank in New Orleans. La.
Locations of branches: 340 Verrett St., Algiers; 3401
South Broad St.; 1100 Decatur St.; 1427-29 Dryades
St.; 129 Bourbon St.; 4121 St. Claude St.; 4300
Magazine St.; 4101 Canal St.; 3400 St. Charles Ave.
(Certificates Nos. 813A to 821A inclusive.)
May 22—The National Bank of Commerce in New Orleans, La.
Locations of branches: Camp and Gravler Sts.
(Louisiana Bldg.); 1529 Dryades St.; 941 Decatur St.
3200 Magazine St.; 800 North Clairborne Ave.
'(Certificates Nos. 822A to 826A inclusive.)
May 24—First National Bank of Seattle, Seattle. Wash.
Locations of branches: 2050 Market St.; 216 Broadway North; 1209 Dale St.; 4824 Rainier Ave. (Certificates Nos. 827A to 830A inclusive.)

Auction Sales.—Among other securities, the following,

not actually dealt in at the Stock Exchange, were sold at auction
in New York, Boston, Philadelphia and Buffalo on Wednesday of this week:
By Adrian H. Muller & Son, New York:
$ per Sh.
Shares. Stocks.
1.020 Edrington Investment Co., par $100
31 American Indemnity Co., par $10
4.400 American Tin Corp., Dar $10
$50 lot
2.400 California Ahumada Mining Co.. par $1
$11 lot
$55 Earl Carroll Realty Corp., par $100
250 44 East 72nd St. Building Corp., par $100
$5 lot
60 The Planet Insurance Co., par $10
$6 lot
18 Strawn Coal Co., par $100
$2 lot
16 Strewn Merchandise Co., par $100
102 Texas Pacific Coal & 011 Co.. par $10
10 Texas Pacific Coal & Oil Co., par $10
$2 lot
29 Traders Compress Co., par $100
$10 lot
29 Traders Compress 011 Co., no par
250 Edrington-Minot Corp., par $100
Theatre, Inc., par $10
855 Earl Carroll
$10 lot
20 Guaranty Abstract & Title Co., par $100
Ii.( Interstate Compress Co., par $100
$3 lot
12 John E. Quarles Co., par $100
$3 lot
I() Texas Indemnity Insurance Co., par $10
$1 lot
19 Texas Electric Railway, par $100
50 National Republic Stockholders Trust Certificate of Beneficial Interest $25 lot
20 Continental Illinois Bank & Trust Co
$7.50 lot
6 Central Republic Bank & Trust Co., Chicago, Illinois
200 United States Kings County Bond & Mortgage Corp.. 7% corn. pref.,
Par $100; 200 United States Kings County Bond Sr Mortgage Corp..
$5 lot
common, no par
$5 lot
25 Premier Guaranteed Mortgage Bond Corp., corn., no par
$12 lot
50 Premier Guaranteed Mortgage Bond Corp., pref., par $100
$5 lot
10 American Woman's Realty Corp., pref., par $100
$126 lot
20 Fred F .French Investing Co., Inc., pref., par $100
10 59 Locust Avenue Corporation, pref., par $100; 10 59 Locust Avenue Cor$11 lot
poration, common, no par
20 244 North Bay Shore Drive, Inc., pref., par $100: 20 244 North Bay Shore
EIS lot
Drive, Inc., common, no par
$25 lot
34 Fort Wayne & Jackson Railroad, common, par $100
10 Hotel Irvin for Women par $100
100 Stony Point Land Co., par $100
291 Texas Land Syndicate, no par
10 Rickenbacker Motor Co., common, no par; 5 National Radiator Corp.,
corn., car.. no par; $500 Promissory note dated Jan. 12 1929. due June 12
$1 lot
1929;$300 Promissory note dated Aug. 11 1928, due Feb. 11 1929
Per Cent.
premises at 11-45 47th Ave.,
$8,000 Bond and mortgage (second mortgage) on
$4,500 lot
Long Island City. New York, 6% due may 15 1935
$4,000 Erie Railroad General Lien 4% bonds, due 1996, fully registered-55% & int.
$1,000 Erie Railroad Co. Prior Lien 4% bonds, due 1996, fully registered.79% & int.
Promissory notes aggregating 52,337.86, dated from Jan. 10 1930 to Nov. 1
1930. due Jan. 10 1933 to April 22 1933, bearing Interest at 6% per annum.$10 lot
$20,000 Maryland Mortgage and National Title Co., convertible 534%,series
10% & lat.
A, due Dec. 11948. With coupons attached
By R L. Day & Co., Boston:
we United States Trust Co. of Boston, par $10
2 Farr Alpaca Co., $100
25 American Manufacturing Co., pref.. par $100
ID Dennison Manufacturing Co., 7% preferred. Par $100
6 Everlastik, Inc., preferred A
Per Cent.
$1234 flat
$5,000 Baragua Sugar Estates, Inc., deb. 68, July 1 1947
$27 lot
$400 Hartford Aetna Realty Corp. 68, Jan. 1959 reg. certificate dep
1234 flat
$2,000 New England Southern Mills 7s Dec. 1933 coupon
1. Assignment of lease from Locateill's Capital Theatre. Inc. to J. J.
Theatrical Enterprises, Inc.. dated July 23 1930; 2. Assignment of lease from
Ball Square Theatre, Inc. to J. J. Theatrical Enterprises, Inc., dated July 23
1930: 3. Assignment of lease from Central Amusement Co., Inc. to J. J.
Theatrical Enterprises. Inc. dated July 23 1930; 4. Assignment of lease from
Dedham Community Theatre, Inc. to J. J. Theatrical Enterprises, Inc.
dated July 2 1931

June 3 1933

10 Philadelphia National Bank, Par $20
5 Central-Penn National Bank, par $10
4 Integrity Co., par $10
12 Integrity Trust Co., par $10
25 Real Estate-Land Title & Trust Co., par $10
26 Penn. Co. for Insurances on Lives and Granting Annuities, par $10
25 Ninth Bank & Trust Co

$ Per Sh.

By A. J. Wright & Co., Buffalo:
Shares. Stocks.
20 The Como Mines
5 Zenda Gold Mines

$ Per Sh.

—Louis K. Boysen & Co., announce the opening of offices at 105 So.
La Salle St. (Chicago) where they will conduct a mortgage service for
holders of mortgages on farms and city property. In addition to the
regular mortgage collection business the firm will engage in the liquidation
of mortgages for investors, particularly under the provisions of the Federal
emergency mortgage measures. In 1920 Mr. Boysen joined the First
Trust & Savings Bank. Chicago, as organizer and manager of the Real
Estate Loan Department and later its affiliated institution, the First
Trust Joint Stock Land Bank of Chicago.
—Holsapple, Safford & Co., members of the New York Stock Exchange.
announce the association with them of a group of former members of the
Chase Harris Forbes organization and previously of Harris, Forbes & Co.,
C. Ashmead Biddulph, Robert E. Cleary, George K. Coggeshall, James H.
Jenkins and John W. Sharbough. Earle T. Hoisapple and George Safford
also were formerly with Harris, Forbes & Co. previous to the establishment
of their own firm.
—Kean. Taylor & Co., members of the New York Stock Exchange,
announce that Michael J. Donovan is now associated with them. Mr.
Donovan is widely known in investment circles and until recently he was
-P. Murphy & Co.
associated with G. M.
—The American Associated Dealers, Inc. announce that A. Vere Shaw
& Co., New York City, have accepted the supervision and management of
Trusteed Industry Shares and Trusteed American Bank Shares, new
series; both restricted. management trusts.
—G.H. Walker & Co., members New York Stock Exchange, with offices
in New York and St. Louis, announce that Anthony L. McKim has been
admitted to general partnership in their firm. Mr. McKim will represent
the firm on the floor of the Exchange.
—J. S. Bache & Co., whose main office is at 42 Broadway, New York
City, are opening a Boston office, located at 10 Post Office Square (street
floor). The new Boston office will be in charge of Daniel W. Gurnett as
Resident Manager.
Dividends are grouped in two separate tables. In the
first we bring together all the dividends announced the
current week. Then we follow with a second table in
which we show the dividends previously announced, but
which have not yet been paid.
The dividends announced this week are:
Name of Company.
Railroads (Steam).
Beech Creek (guar.)
Continental Passenger fly. (8.-a.)
Morris & Essex
New York & Harlem (s.
Preferred (s.
Old Colony (quar.)
Philadelphia Bait. & Washington 01-10 -Pittsburgh McKeesport & Yough.(5.-a.)
Tunnel RR.of St. Louis(s-a)

Cent. Payable,

Books Closed
Days Inclusive.

July 1 Holders of rec. June 15
June 30 Holders of rec. May 31
July 1 Holders of rec. June 6
July 1 Holders of reo. June 15
July 1 Holders of rec. June 16
July I Holders of rec. June 17
June 30 Holders of roe. June 15
July 1 Holders of rec. June 15
July 1 Holders of reo. June 15

Public Utilities.
American Gas& Elec.,corn.(guar.) ...- 250
Holders of rec. June 9
Holders of reo. June 9
Common (s-a)
131% Aug.
Holders of tee. July 8
6% preferred (guar.)
$134 July
Amer.Superpower, 1st pref.(guar.)
Holders of rec. June 10
Holders of tee. June 5
Appalachian Elec. Pow.,$7 pref.(guar.) $134 July
$1 34 July
Holders of rec. June 16
Atlantic & Ohio Teieg. Cs. (guar.)
$134 July
Holders of reo. June 20
Battle Creek Gas Co. $6 pref. (quar.)
Bell Telephone Co. of Canada (guar.)— $134 July 1 Holders of rec. June 23
134% July 1 Holders of reo. June 20
Bell Telep. of Pa.634% pref. (quar.)
$1X July
Boston Elevated fly.(guar.)
Holders of rec. June 10
Brazilian 'Frac., Light & Power, Ltd.—
$IX July
Preferred (guar.)
Holders of reo. June 15
Canada Northern Power Corp., Ltd.—
20e July 2 Holders of rec. June 30
Common (guar.)
134% July 1 Holders of rec. June 30
7% preferred (guar.)
Citizens Water Co.(Washington. Pa.)
7% preferred (guar.)
Holders of rec. June 20
Columbus fly., Pow.& Lt., corn.(guar.) $2
Holders of reo. June 15
% July
6% preferred (guar.)
Holders of rec. June 15
1% July
Duke Power Co., common (guar.)
Holders of rec. June 15
Preferred (guar.)
Holders of rec. June 15
Eastern N. J. Pow. Co.,6% pf.(quar.)- - 134% July
Holders of roe. June 15
$1.44 July
East Tennessee Teleg. Co (8.-a.)
Holders of reo. June 16
Gas Securities Co., C0E11111011 (monthly)-- g
Holders of roe. May 15
500 June
Preferred (monthly)
Holders of roe. may 15
$134 July
Gold & Stock Telegraph Co.(quar.)Holders of tee. June 30
Greenwich Water dc Gas Systems
• 111% July
6% preferred (guar.)
Holders of rec. June 20
Hackensack Water Co. cl. A (guar.) ...- 43340 June 3 Holders of reo. June 16
% July
Indiana Mich. Else. Co.,7% pt.(guar.)Holders of ree. June 5
iss% July
Holders of rec. June 5
6% Preferred (guar.)
Indianapolis Power & Light Co.
134% July
Holders of rec. June 5
634% preferred (guar.)
$2 June 1 Holders of rec. June 1
International Power Securities pref
$134 July
International Teieg. Co. (guar.)
Holders of rec. June 30
Jersey Central Power dc Light Co.
% July
7% preferred (guar.)
Holders of reo. June 10
134% July
6% preferred (guar.)
Holders of rec. June 10
% July
rreiriers of rec. June 10
534% preferred (guar.)
Kansas Elec. Power Co.,7% pref.(qu.). IX % July
Held :re of reo. June 15
6% preferred (guar.)
134% July
irsiders of rec. June 15
700 July
Keystone Public Service pref. (guar.).—
Holders of reo. June 15
$2 July
Lynchburg & Abingdon Telep. Co.(8.-a.)
Holders of reo. June 15
Marion Water Co. 7% pref.(guar.).— 1,1% July
Holders of rec. June 20
$154 July
Metropolitan Edison $7 pref. (quar.)
Holders of rec. May 31
$134 July
Holders of rec. May 31
6 $6 preferred (guar.)
$154 July
$5 preferred (guar.)
Holders of rec. May 31
Holders of tea. June 15
Mississippi River Power 6% prof.(an.) 134% July
July 10 Holders of roe. June 30
New Eng.Pow. Assoc., corn.(guar.)
_ 500
6% preferred (guar.)
% July 1 Holders of tee. June 10
July 1 Holders of roe. ALM 10
$2 preferred (guar.)

Volume 136

Name of Company.
Public Utilities (Concluded).
New Jersey Pow. & Lt. Si) pref. (au.)...
If Preferred (quar.)
New Jersey Water Co. pref. (:man)._ -New York Mutual Telep. Co.(s.-a.)Northern Ontario Power Co., Ltd.
Common (guar.)
6% preferred (quar.)
Northwestern Telep. Co.(s.-a.)
Northwestern Utilities,6% pref. (quar.).
Ohio & Mississippi Telep. Co.(annual)._
Ohio Public Service Co. 7% pref. (mo.)% preferred (monthly)
5% preferred (monthly)
Pacific & Atlantic Telep. (s -a.)
Pacific Tel.& Tel., corn.(quar.)
Preferred (quar.)
Penn Central Light & Power Co.
55 preferred (guar.)
$2.80 preferred (queer.)
Peoria Water Works Co.7% pf.(qu.)._.
Rochester Tel. Corp.(quar.)
634% preferred (quar.)
San Joaquin Lt.& P.,7% pref.(queer.)..
6% preferred A (queer.)
7% preferred A (queer.)
6% preferred B (quar.)
Scranton Elec. Co., pref.(queer.)
Southern Calif. Edison Co., Ltd.
Original preferred (quar.)
534% series C preferred (guar.)
Southern Canada Power Co.. Ltd.
6% preferred (guar.)
Southwestern Gas & El. Co.8% pf.(qu.)
7% preferred ((mar.)
Toledo Edison Co. 7% pref. (monthly)% preferred (monthly)
5% preferred (monthly)
Union Elec. Lt. & P.of III.,6% pt.(qu.)
Union El. U.& P.of Mo.,7% pf.(qu.).
Union Traction Co.(5.-a )
U.S. Elec. Lt. & P. Shs., Inc., Del.ser.A
Vermont & Boston Telep.(annual)
Westmoreland Water Co.(quar.)
Wisconsin Pow.& Lt.,6% pref.(queer.).
7% preferred (guar.)
Wisconsin Pub. Ser. Corp. 7% pf.(MO655% preferred (queer.)
6% preferred (guar.)
Fire Insurance Companies.
Halifax Fire Ins. Co. (s.m.)
Home Fire at Marino Ins. Co.(queer.)...
Bank & Trust Cos.
Irving Trust Co. (quar.)
United States Trust Co.(guar.)

Financial Chronicle
Share. Payable.


58 1-3c
41 2-3e
I 3,4 %

Books Closed
Days Inclustee.
Holders of
Holders of
Holders of
Holders of

Name of Company.

rec. May
rec. May
rec. June
rec. June



25 Holders of rec. June
25 Holders of rec. June
1 Holders of rec. June
1 Holders of rec. May
1 Holders of rec. June
1 Holders of rec. June
1 Holders of rec. June
1 Holders of rec. June
1 Holders gf rec. June
30 Holders of rec. June
15 Holders of rec. June



1 Holders of
1 Holders of
1 Holders of
1 Holders of
1 Holders of
15 Holders of
15 Holders of
15 Holders of
15 Holders of
1 Holders of



rec. June
rec. June
rec. June
rec. June
rec. June
rec. June
rec. June
rec. June
rec. June
rec. June

2% July 15 Holders of rec. June 20
13.5% July 15 Holders of rec. June 20
134% July
2% July
134% July
58 1-3c July
50c July
41 2-30 July
155% July
134% July
75c July
54 July
30e July
873.5c June
13.4% June
134% June
155% June

15 Holders of rec. June
1 Holders of rec. June
1 Holders of rec. June
1 Holders of me. June
1 Holders of rec. June
1 Holders of rec. June
1 Holders of rec. June
1 Holders of roe. June
1 Holders of rec. June
1 Holders of rec. June
1 Holders of rec. June
15 Holders of rec. May
15 Holders of rec. May
20 Holders of rec. May
20 Holders of rec. May
20 Holders of rec. May


45e July 3 Holders of rec. June 10
50c June 15 Holders of rec. June .5
25e. July

1 Holders of rec. June 9
1 Holders of rec. June 20

Affiliated Products, Inc.(month.)
50. July 1 Holders of rec. June 19
Allied Chem. & Dye Corp., pref. (qu.)- 134% July 1 Holders of rec. June 12
Alpha Portland Cement, pref. (quar.)- - $154 June 15 Holders of me. June I
-American Factors, Ltd.(monthly)
100. July 10 Holders of rec. June 30
American hosiery Co.(quar.)
3735c June 1 Holders of rec. May 25
37550 Sept. 1 Holders of rec. Aug. 24
American 15ifg. Co., pref. (queer.)
$154 July 1 Holders of rec. June 15
American Tobacco Co.. prof. (quar.)
--- 155% July 1 Holders of rec. June 10
Anchor Cap Corp., corn. (quar.)
15e. July 1 Holders of rec. June 20
$655 Preferred (quar.)
$135 July 1 Holders of rec. June 20
Andian National Corp
ur$1 Juno 15 Holders of rec. June 5
Associated Breweries of Canada, Ltd.
Preferred (quar.)
$134 July 1 Holders of rec. June 15
Bandini I etroleum Co.(monthly)
June 20 Holders of rec. May 31
Bankers Invest. Trust of Amer.(s.
30c. Juno 30 Holders of rec. June 15
Beatrice Creamery Co., pref. (quar.)- $134 July 1 Holders of rec. June 14
Biltmore Hats, Ltd. 7% pref.(guar.)
134% June 15 Holders of rec. May 15
Bohn Aluminum & Brass Co.eons.(qu.)
25c. July 1 Holders of rec. June 15
Borg Warner,7% pref.(queer.)
13.4% July I Holders of rec. June 15
Boston Investing Co.(s-a)
$135 June 15 Holders of rec. June 5
British American Tobacco Co., Ltd.
Ordinary stock (interim)
Cables.5 Wire, Ltd. Am.dep.rec.555 pf
70. June 3 Holders of rec. May 5
Canadian Car & Foundry, pref. (queer.)44e, July 10 Holders of roe. June 26
Carreras, Ltd., ord. reg. Cl. A
June 19 Holders of rec. May 23
Amer. dep. rec. for reg. A
June 26 Holders of rec June 1
Ordinary register cl. 11
June 19 Holders of rec. May 23
Amer. dep,rec,for Ii reg
June 26 Holders of rec. June 1
Carter(Wm.) Co..6% pref. (guar.)
---- 155% June 15 Holders of rec. June 10
Chicago Dock & Canal Co.5% pf.(qu.)_ 134% June 1 Holders of rec. May 27
Chic. Junction Ry.& Un. Stkyds.(au). $2% July 1 Holders of
rec. June 15
Preferred (queer.)
$134 July 1 Holders of rec. June 15
Clorox Chemical Co., el. A (quar.)
500 July 1 Holders of rec. June 20
Coca-Cola Co.,class A (s.
$155 July 1 Holders of rec. June 12
Common (quar.)
$155 July 1 Holders of rec. June 12
Coca-Cobs Internat. Corp. corn. (quar.). $3
July 1 Holders of rec. June 12
Class A (0.-a.)
July 1 Holders of rec. June 12
Colgate-Palmolive-Peet Co., pref.(qu.)
- $135 July 1 Holders of rec. June 10
Col. 1310g..5 Loan Assoc.(N.0.)
June 1 Holders of rec. May 31
Congress Cigar Co., com.(guar.) (s.
25e. June 31 Holders of rec. June 14
Commercial Credit Trust. prof. (qu.)
50c. June 30 Holders of rec. June 20
Consolidated Paper, pref. (guar.)
17 Mc. July 1 Holders of rec. June 20
Consolidated Paper, pref.(quar.)
1735e July 1 Holders of rec. June 20
Corporal Investors, Ltd
Dart Mfg. Co., pref.(guar.)
$1% June 1 Holders of rec. May 8
DeLong Hook & Eye Co.(guar.)
50e. July 1 Holders of rec. June 20
250. July 1 Holders of rec. June 20
Dominion Textile Co., Ltd.(quar.)
July 3 Holders of rec. June 15
Eastern Theatres Ltd.. 7% pref.(0.-a.).. $355 July 31 Holders of rec. June 30
Edison Bros. Stores, Inc., pref. (queer.).. $13i June 15 Holders of rec. May 31
Electric Contr. & Mfg. Co. (queer.)
250. July 1 Holders of rec. June 20
Equity Fund, Inc.,(initial)
100. June 15 Holders of rec. June 5
Falconbridge Nickel Mines
100 June 30 Holders of rec. June 15
Faultless Rubber Co.,corn.(quar.)
590 July 1 Holders of rec. June 15
Freeport Texas.6% pref.(queer.)
134% Aug. 1 Holders of rec. July 14
Goodall Securities Corp. (guar.)
50c June 1 Holders of roe. May 29
Gorton Pew Fisheries Co., Ltd. (quar.)_
50e June 30 Holders of rec. June 20
Granite City Steel Co.(quar.)
June 30 Holders of rec. June 15
Grant (W.T.) Co., common ((uteri
25c July 1 Holders of rec. June 12
Gum antee Co.of North Amer.(quar.)
$154 July 15 Holders of rec. June 30
Hamilton United Theatres, Ltd., pf.(qu) $134 June 30 Holders of rec. May 31
Hanna(M. A.) Co. $7 pref. (queer.)
$134 June 20 Holders of rec. June 5
Helms (Geo. IV.) Co.. common (queer.).. $154 July 1 Holders of rec. June 10
Preferred (guar.)
$134 July 1 Holders of rec. June 10
Hercules Powder common (guar.)
6755c June 24 Holders of rec. June 13
Hollinger Consolidated Gold Mines
1% June 17 Holders of rec. June 2
Honolulu Plantation Co. (monthly)_ _ _ _
25e July 10 Holders of rec. June 30
Mygrade Sylvania Corp. common (qu.).
50c July 1 Holders of roe. June 10
$1% July I Holders of rec. June 10
$634 preferred (quar.)
Ideal Financing Assoc., $8 pref. (quar.)
$2 July 1 Holders of rec. June 15
50c July 1 Holders of roe. June 15
$2 Cony. preferred (quar.)
Class A (quar.)
12550 July 1 Holders of rec. June 15
Indiana General Sore. Co.,6% pf.(qu.)- 155% July 1 Holders of rec. June 5
Investors Corp.0tH. I., $11 Prof.(guar.). $135 July I Holders of rec. June 20
Kekaha Sugar CO.(monthly)
be July 1 Holders of rec. June 25
Kresge (S. S.) Co. pref. (quar,)
$134 June 30 Holders of rec. June 15
Langendorf United Bakeries el. A
250 July 15 Holders of rec. June 30
20e June 15 Holders of rec. June 1
Ladle Calif. Salt Co.(quar.)
30c July 1 Holders of roe. June 15
Lorillard (P.) Co. common Num%)
Preferred (quar.)
$1% July 1 Holders of rec. June 15
2s, 100 June 2 Holders of rec. May 15
Lyons (J.) & Co., Ltd., ord. mg
Amer. dep, rec,for ord. mg
25.100 June 2 Holders of rec. May 15
Metropolitan Coal,7% pref. (quar.)_
13.4% June 30 Holders of rec. June 23

Cent. Payable.

Miscellaneous (Concluded).
McClatchy Newspaper, 7% pref. (queer.) 4334e
prefrred (queer.)
Motor Motor, cone. ext
Mohawk Min. Co. cap. stk. (Ilquidat'g)
Morrell (J.) & Co.(quar.)
Morris (Philip) Consol., Inc. (queer.).._. 4334c
On account of accumulations
Myers (F. E.) & Bros. Co. pref. (quar.)_
National Gypsum Co. 7% pref. (quar.)_
National 011 Products,$7 pref. (quar.).. $134
National Standard Co.(guar.)
Noranda Mines (Interim)
Ohio Finance Co., common (quar.)
8% preferred (quar.)
Pacific Tin Corp., special stock
Parke, Davis & Co.(quar.)
Pechiney, A bearer shares
Amer. dep. rec. for A bearer shares__ _
Prentice-Hall, Inc., Prof.(queer.)
Pure Oil Co.554%,6%,8% pref. divs. o mitred.
Reynolds(R. J.)Tobacco m.(111r.)
Ruud Mfg. new common (quar.)
New common (queer.)
St. Louis Bridge, 1st pref. (s-a)
20 preferred (s-a)
$1 34
Siscoe Gold Mines, Ltd. (quar.)
Southern Acid & Sulphur, pref.(quar.).. $1%
South Penn Oil Co.(quar.)
South Porto Rico Sugar
Preferred (quar.)
South West Penn Pipe Lines (quar.)
Standard Oil of Ohio $5 pref. (queer.).... $134
Stein (A.)& Co., pref.(quar.)
Thomson Electric Welding (queer.)
Time, Inc. (queer.)
Tile° Products Corp.(quar.)
United Molasses Co., Ltd., pref.-Div. p assed.
United States Foreign Secur. let pf.(qu.) $15i
Wagner Elec. Corp., pref.(guar.)
Waukesha Motor Co.(quar.)
Wellington Oil Co., Ltd.(queer.)
Wesson Oil .5 Snowdrift Co., Inc.
Common (guar.)
Western Canada Flour Mills pref. (qu.)_
Western Maryland Dairy $6 pref. (qu.). $135
Westvaco Chlorine Products Corp.
7% preferred (quar.)

Books Closed
Days Inclusive.

Sept. 1 Holders of rec. Sept. ri
Dec. 1 Holders of rec. Dec. 1
June 15 Holders of rec. May 29
July 20 Holders of rec. June 24
June 15 Holders of rec. May 27
July 1 Holders of rec. June 20
July 1 Holders of rec. June 24)
Juno 30 Holders of rec. June 15
July 1 Holders of rec. June 17
July 1 Holders of rec. June 20
July 1 Holders of rec. June 20
July 1 Holders of rec. June 21)
July 1 Holders of rec. June 29
July 10 Holders of roe. June 13
July 1 Holders of rec. June 10
July 1 Holders of rec. June 10
June 12
June 30 Holders of rec. June 19
June 7
June 13 Holders of rec. June 6
June 20 Holders of rec. June 10
July 1 Holders of rec. June 17
June 15 Holders of rec. June 5
Sept. 15 Holders of rec. Sept. 5
July 1 Holders of rec. June 15
July 1 Holders of rec. June 15
June 30
July 1 Holders of rec. June ID
June 30 Holders of rec. June 15
July 1 Holders of rec. June 12
July 1 Holders of rec. June 12
July 1 Holders of rec. June 15
July 15 Holders of rec. June Si)
July 1 Holders of rec. June 15
June 1 Holders of rec. May 25
June 30 Holders of rec. June 23
June 30 Holders of rec. June 23
July 1 Holders of rec. June I()
June 10 Holders of
July 1 Holders of
July 1 Holders of
June 15 Holders of

rec. June
roe. June
rec. June
rec. June


July 1 Holders of rec. June 15
June 15 Holders of roe. May 31
July 1 Holders of rec. June 20

1 Holders of rec. June 15

Below we give the dividends announced in previous weeks
and not yet paid. This list does not include dividends announced this week, these being given in the preceding table.
Vane of Company.
Railroads (Steam).
Albany & Susqueeanna (s-al
(semi annual)
Atlanta Birm. & Coast, pref. (a a)
Atlanta & Charlotte Air Line(s-a)
Bangor & Aroostook, corn.(quar.)
Preferred (queer.)
Boston & Albany
Barton & Providence (queer.)
Carolina Clinchfleld & Ohio (quar.)
Guaranteed certificates (quar.)
Chesapeake & Ohio (quar.)
Preferred (semi-annually)
Chestnut Hill (quar.)
Cleveland & Pittsburgh, guar (guar.)
Special guaranteed (quar.)
Guaranteed (quar.)
Special guaranteed (queer.)
Dayton & Michigan 8% pref. (quar.)Delaware RR. Co. (s.-a.)
Erie & Pittsburgh 7% guaranteed (guar.)
7% guaranteed (guar.)
7% guaranteed (quar.)
Guaranteed betterment (quar.)
Guaranteed betterment (Queer.)
Georgia RR.& Banking (quar.)
Grand Rapids & Indianapolis (s.-u.)Greene (N. Y.) (5.-a.)
Illinois Central 4% leased line
Lackawanna RR.of N.J.4% gtd.(qu.).
Little Miami original guaranteed
Special guaranteed (quar.)
Louisville fiend.& St. L.5% pf.(s-a)Common (s-a)
Mill Creek & Mine HUI Nay. de RR.(a-a)
Mobile & Birmingham pref.(s -a.)
Morris & Essex (s.
Nashville & Decatur 734% gtd. (s.
N. Y. Lack.& WesUn.5% gtd.(queer.)..
Norfolk .5 Western common (queer.)....
North CaroUna (8.-a.)
North. RR. of New Jer. 4% gtd. (queer.)
4% guaranteed (guar.)
Norwich & Worcester,8% pref. (quar.)_
Phila. Bait. & Wash.(s.
Pitts. Bess. & Lake Erie com.(8.-a.)....
Pittsburgh Fort Wayne .5 Chicago (qu.)
7% Preferred (queer.)
7% preferred (quar.)
7% Preferred (quar.)
Pittsburgh Youngstown & Ashtabula
7% preferred (queer.)
7% preferred (quar.)
Reading Co. preferred (queer.)
2d preferred (guar.)
Rensselaer & Saratoga,com.(s-a)
Sussex (s-a)
Terman Rys., pref. (final)
Union Pacific common (quar.)
United N. J. RR.& Canal Co.(guar.)._
Valley RR.of New York (s-a)
West Jersey & Seashore, corn. (s.
-a.)Common (s -a.)
6% special guaranteed (0.-a.)
Public Utilities,
Alabama Power Co., 57 pref. (queer.)....
$6 preferred (quar.)
$5 preferred (quar.)
American Telep. & Tcleg. Co.(quar.)--Amer. Water Wks. at El. Co., pl.(quar.)
Attleboro Gas Light Co.(queer)
Bangor Hydro-Elect. Co., 7% Pf.(qu.)
I.% preferred (quar.)
Bell Tel. Co. of Pa., 635% pret (queer).
Birmingham Water Works,6% pf.(QU)

Share. Payable.

Books Closed
Days Inclusive.


July 1 Holders of rec. June 15
Jan. 1 Holders of rec. Dec. 15
July 1 Holders of rec. June 12
Sept. 1 Holders of rem Aug. 20
July 1 Holders of roe. May 31
July 1 Holders of rec. May 31
June 30 Holders of rec. May 31
July 1 Holders of rec. June 20a
Oct. 1 Holders of roe. Sept. 20a
July 10 Holders of rec. June 3()
July 10 Holders of rec. June 30
July 1 Holders of rec. June 8
July 1 Holders of reo. June 8
June 5 Holders of rec. May 20
Sept. I Holders of rem Aug. 10
Sept. 1 Holders ot rec. Aug. 19
Dec. 1 Healers of rec. Nov. 10
Dec. 1 Holders of rec. Nov. 10
July 5 Holders of rec. Junej16
July 1 Holders of rec. June MI
June 10 Holders of rec. May 31
Sept. 10 Holders of roe. Aug. 31
Dee. 10 Holders of rec. Nov.3D
Sept. I Holders of rec. Aug. 31
Dec. 1 Holders of rem Nov.30
July 15 Holders of rec. July 1
June 20 Holders of rec. June 10
June 19 Holders of rec. June 13
July 1 Holders of rec. June 12
July 1 Holders of rec. June 8
June 10 Holders of rec. May 2(3J
June 10 Holders of rec. May 26
Aug. 15 Holders of rec. Aug. 1
Aug. 15 Holders of rec. Aug. 1
July 10 Holders of roe. July 3
July 1 Holders of rec. June 1
July 1 Holders of rec. June 9
July 1 Holders of roe. June 20
July 1 Holders of rec. June 15
June 19 Holders of rec. May 31
Aug. 1 Holders of rec. July 20
Sept. 1 Holders of rec. Aug. 21
Dee. 1 Holders of roe. Nov. 24)
July 1 Holders of rec. June 15
June 30
Oct. 1 Holders of rem Sept. 1
July 1 Holden of rec. June 1
July 4 Holders of rec. June 1
Oct. 1 Holders of rec. Sept.
Oct. 3 Holders of rec. Sept.
Jan.2'34 Holders of rec. Doe.
Jan.4'34 Holders of rec. Doe.


Sept. 1 Holders of rec. Aug. 2
Dec. 1 Holders of rec. Nov.2
June 8 Holders of rec. May 1
July 13 Holders of rec. June 2
July 1
July 1 Holders of rec. June 17
July 1
July 1 Holders of rec. June la
July 10 Holders of rec. June 20
Oct. 10 Holders of rec. Sept. 20
July 1 Holders of ree June 19
July 1 Holders of rec. June 15
Jan 1'34 Holders of rec. Dec. 15
Dec. 1 Holders of rec. Nov. 15

1 3.4%

July 1 Holders of rec. June
July 1 Holders of rec. June
Aug. 1 Holders of rec. July
July 15 Holders of rec. June
July 1 Holders of rec. June
July 1 Holders of rec. June
July 1 Holders of rec. June
July 1 Holders of rec. June
July 15 Holders of rec. June
June 15 Holders of rec. June


Financial Chronicle

Name of Company.

Sham AWOL".

Books Closed
Days Inclusive.

Public Utilities (Conflated).
Bridgeport Gas Light Co.(guar.)
1300 June 30 Holders of rec. June 18
Brit. Col. Pow.. cl. A.(quar.)
fr.500 July 15 Holders of rec. June 30
Brooklyn Sz Queens Tran Corp.. pt.((Lu') 8134 July 1 Holders of rm. June 15
Brooklyn Union Gas Co.(quar.)
$131 July 1 Holders of rec. June 1
Butler Water Co., 7% pref.(guar.).— 154% June 15 Holders of roe. June 1
Carolina Tel. dc Tel. Co.(guar.)
8231 July 1 Holders of reo. June 24
Central Kansas Power 7% prof.((MAL)- 131% July 15 Holders of rec. June 30
7% preferred (guar.)
134% Oct. 15 Holders of rec. Sept.30
7% preferred (quar.)
134% 1-15-34 Holders of rec. Dec. 31
6% preferred (qua:.)
134% July 15 Holders of me. June 30
6% preferred (guar.)
144% Oct. 15 Holders of rec. Sept.30
6% preferred (guar.)
134% 1-15-34 Holders of rec. Dec. 31
Citizens Pass. By.(Phila.,Pa.)
OM July 1 Holders of rec. June 20
Commonwealth dr Southern Corp.—
$6 preferred (quar.)
8144 July 1 Holders of rec. June 9
Commonwealth Utilities pref. A (quar.)- 3134 July 1 Holders of rec. June 15
Preferred B (guar.)
$134 July 1 Holders of rm. June 15
Preferred C (guar.)
$134 Sept. 1 Holders of rec. Aug. 15
June 15 Holders of rec. June 5
Concord Gas Co.(s.
July 1 Holders of rec. June 15
Connecticut Elect Service,corn. (guar.)- 750
900 July 1 Holders of rec. June 15
Consol. Gas of Baltimore corn.(quar.)._
Preferred A (quar.)
$111 July 1 Holders of rec. June 15
Preferred D (guar.)
$154 July I Holders of rec. June 15
Preferred E (quar.)
$134 July I Holders of rec. June 15
850 June 15 Holders of rec. May 12
Consolidated Gas Co.of
Preferred (quar.)
$134 Aug. 1 Holders of reo. June 30
Consol. Gas. El. Lt.& Pow.Co.of Bait.
Common (qua:.)
900 July 1 Holders of roe. June 15
141% July 1 Holders of rec. June 15
5% preferred series A (guar.)
6% preferred series D (guar.)
144% July 1 Holders of roe. June 15
154% July I Holders of rec. June 15
511% preferred series D (qua:.)
Consumers Power Co..$5 Prot (1111ar.)-- sve July I Holders of rec. June 15
6% preferred ((Mar.)
144% July 1 Holders of roe. June 15
6.6% preferred (guar.)
1.85% July 1 Holders ot rec. June 15
131% July I Holders of rec. June 15
7% preferred (quar.)
6% preferred (monthly)
500 July 1 Holders of rec. June 15
550 July 1 Holders of rec. June 15
8.8% preferred (monthly)
Dayton Power & Light Co.6% pt. (mo.)
500 July 1 Holders of rec. June 20
Diamond State Tel. Co..634% Pt.(qu.)_ 154% July 15 Holders of rec. June 20
Duquesne Light Co.5% 1st prof.((Mari 131% July 15 Holders of reo. June 15
Eastern Gas dz Fuel Assoc.,6% pf.(qu.)- 134% July 1 Holders of rec. June 15
434% preferred (guar.)
$1.125 July 1 Holders of roe. June 15
El Paso Elec. (Del.),7% pref. A (qu.)
131% July 15 Holders of rec. June 30
$6 preferred B (quar.)
al% July 15 Holders of roe. June 30
El Paso Elec. (Texas), 6% pref. (qu.).., 131% July 1 Holders of roe. June 30
Electric Bond & Share Co.$8 pref.(qu.) $IM Aug. 1 Holders of rec. July 8
$5 preferred (guar.)
$134 Aug. I Holders of rec. July 8
Empire & Bay State Teleg 4% gtd.(qu.)
Sept. 1 Holders of rec. Aug. 21
4% ruaranteed (guar.)
Dec. I Holders of reo. Nov.20
Elizabeth & Trenton Bit. (s.
Oct. I Holders of rec. Sept.20
5% preferred (s.-a.)
$134 Oct. 1 Holders of roe. Sept. 20
Empire Power Corp. $6 pref.(qua:.)
$134 July I Holders of roe. June 16
Escanaba Pow.& Tree.6% pref.((Bt.).
% Aug. 1 Holders of ree..July 27
6% preferred (quar.)
141% Nov. 1 Holders of rec. Oct. 27
6% preferred (qua:.)
144% 2-1-'34 Holders of rec. Jan. 27
Frankford & Southwark.Phila. City
Passenger By
$414 July 1 Holders of rec. June 1
$IM July 1 Holders of rec. June 15
Georgia Power Co. $6 prof.(guar-)
$131 July 1 Holders of rec. June 15
$5 preferred (quar.)
Germantown Passenger By.,(qual.)....... 51.3134 July 1 Holders of roe. June 15
(qu.) 5134 July 1 Holders of roe. June 22
Green dc Coats St., Phila.Pass.By.
$134 July 1 Holders of roe. June 20
Gulf Power Co. $6 pref.(qual.)
Gulf States Utilities Co., NI pref.(qu.),.. $134 June 15 Holders of roe. June I
$111 June 15 Holders of roe. June 1
$534preferred (guar.)
Hackensack Water Co. A (guar.)
43510 June 30 Holders of ree. June 16
Honolulu Gas Co.(monthly)
15c July 1 Holders of rec. June 15
June 30 Holders of rec. June 29
Illinois Bell Telep. Co.(qual.)
Indiana Hydro-El. Pow. Co.7% prof
87340 June 15 Holders of rec. May 31
Indianapolis Water Co.,5% pref. A (qu.) I M% July 1 Holders of roe. June 100
Kansas City Pow & Lt., pt. B.,(Qua:.)... $144 July 1 Holders of roe. June 14
Kings County Lighting (guar.)
$134 July 1 Holders of rec. June 19
134% July 1 Holders of rec. June 19
7% Preferred (guar.)
6% preferred (guar.)
144% July 1 Holders of rec. June 19
131% July 1 Holders of rec. June 19
5% preferred (guar.)
8144 June 15 Holders of rec. June I
Laclede Gas Light Co.common(quar.)..
8241 June 15 Holders of rec. June 1
6% preferred (s.
Lexington Utilities Co.634% pf.(qu.).. 134% June 15 Holders of rec. June 1
Lone Star Gas Corp. common (quar.),,- j160 June 30 Holders of rec. June 15
$134 June 30 Holders of rec. June 15
6% preferred (quar.)
% July 1 Holders of rec. June 16
Long Island Ltg. Co.7% pt. A
134% July 1 Holders of rec. June 16
6% preferred B (quar.)
Louisville G.& E.(Del.), A&B em.(qu.) 43410 June 24 Holders of rec. May 31
Marconi Wirel. Tel. Co.—
2% June 3 Holders of roe. May 24
Amer. deposit rec., ordinary bearer.
2% June 3 Holders of roe. May 24
Amer. deposit rec. ord. reit
Memphis Nat. Gas Co..$7 Pref. (qual.).. 8134 July 1 Holders of roe. June 20
$154 July 1 Holders of rec. June 17
MemphisPow.& Lt.Co.,$7 pf.(qu.)
SIM July 1 Holders of rec. June 17
$6 preferred (guar.)
% July 1 Holders of rec. June 21
Miss. Vail. Pub. Serv.,6% pref. B (qu.).
Monongahela West Penn Public Service,
134% July 1 Holders of roe. June 15
7% cum. preferred (guar.)
2% June 15 Holders of rec. June 1
Muncie Water Works Co..8% pref.(qu.)
Nassau & Suffolk Ltg. Co..7% pf.(qu.)- 134% July 1 Holders of rec. June 16
350. June 15 Holders of rec. May 31
National Transit Co.(quar.)
New Eng. Gas & El. Assoc. $531 pf.(qu.) $134 July 1 Holders of rec. May 31
New England Tel. & Tel. Co
8134 June 30 Holders of roe. June 10
New York Pow.,k Lt.$5 Prot (Qua: -- $134 July 1 Holders of rec. June 15
7% preferred (guar.)
134% July 1 Holders of rec. June 15
N. Y.dr Queens Elec. Lt.& Pow.(qua:.) $2
June 14 Holders of rec. June 2
New York Steam Corp..$7 pref.(qua:.)- $131 July I Holders of rec. June 15
$6 preferred (quar.)
3144 July 1 Holders of rec. June 15
$im July 15 Holders of rec. June 20
New York Telep. Co.. pref. (guar.)
500 June 28 Holders of roe. June 15
New York Transportation CO.(guar.).Newark Telep. Co.(Ohio)6% pref.(qu.) 141% July 10 Holders of rec. June 30
June 10 Holders of rec. May 31
% July 20 Holders of rec. June 30
Nor. States Pow. Co.(Del.) 7% pf.(qu.)
6% preferred (quar.)
134% July 20 Holders of rec. June 30
Ohio Edison Co.,$5 pref.(quar.)
$141 July 1 Holders of roe. June 15
RS preferred (guar.)
8144 July I Holders of rec. June 15
81.65 July 1 Holders of rec. June 15
$8.60 preferred (quar.)
$7 preferred (quar.)
$134 July 1 Holders of rec. June 15
$7.20 preferred (quar.)
$1.80 July 1 Holders of roe. June 15
Oklahoma Gas & Elect. Co..8% rd.
(qu) 134% Juno 15 Holders of rec. May 31
7% preferred (titian)
134% June 15 Holders of roe. May 31
Peninsular Telep. Co.. (quar.)
July 1 Holders of rec. June 15
7% preferred (guar.)
134% Aug. 15 Holders of rec. Aug. 5
7% preferred (guar.)
141% Nov.15 Holders of roe. Nov. 5
7% preferred (guar.)
141% 2-15-34 Holders of roe. 2-5-34
Pennsylvania W.& Pow. Co., eom.(0n.)
760 July 1 Holders of rec. June 15
um July 1 Holders of rec. June 15
Preferred (quar.)
Philadelphia Co.$O Pref.(guar.)
3134 July 1 Holders of rec. June 1
85 preference
gm July 1 Holders of rec. June 1
Phila. Elec. Pow. Co..8% M.(luar.)-z500. July 1 Holders of rm. June 10
Phba Germant'n & Norrtst'n RR. Wu./- $114 June 5 Holders of roe. May 20
Ponce Elect. Co.. 7% pref. (guar.)
131% July 1 Holders of roe. June 15
Pub.Serv. Co.of N. H.. $6 pref.(qu.)
8134 June 15 Holders of roe. May 31
85 preferred (quar.)
$141 June 15 Holders of rec. May 31
Public Service Corp.of N.J.corn.(qu.).
700 June 30 Holders of res. June 1
8% preferred (quar.)
2% June 30 Holders of rec. June 1
1% preferred (guar.)
131% June 30 Holders of roe. June 1
$5 preferred (guar.)
8141 June 30 Holders of rec. June 1
Cumulative preferred (monthly)
500 June 30 Holders of roe. June 1
Public Service Co. of Oklahoma,
7% prior lien stock (guar.)
% July I Holders of roe. June 20
lien stock (guar.
% July 1 Holders of reo. June 20
6% prior
Public Service El.& Gas Co.7% (qu.). 141% June 30 Holders of rec. June 1
preferred (guar.)
$131 June 30 Holders of roe. June 1
Queensborough Gas & El.6% pt.(qu.)._ 134% July 1 Holders of rec. June 16
July 1 Holders of roe. June 15
Ridge Ave.Pass. By.Co.(guar.)
Shenango Valley Water Co.8% pf.(qu) 141% &lot. 1 Holders of roe. Aug. 20
6% preferred (guar.)
154% Dec. 1 Holders of roe. Nov.20

Na... of ConsPane.
Public Utilities (Concluded).
Savannah Elec.& Pr.,8% pret. A (qu.)7,4% Preferred B (quar.)
7% preferred C (guar.)
634% preferred B (guar.)
2d & 3d Sta. Pam. By.Co., gtd.(quar.)Southern California Edison Co., Ltd.
7% preferred, series A (quar.)
6% preferred, series B (quar.)
South Carolina Pow.Co.$6 pt.(guar.).Southern Col. Pow. Co.7% pf.(quar.)-Southwestern Gas dr Electric Co.,
7% preferred (guar.)
8% preferred (guar.)
Syracuse Ltg. Co., Inc.,8% pref.(quar.)
841% preferred (guar.)
6% preferred (guar.)
Telephone Investment (monthly)